Preface to usury ebook

I first became interested in the subject of usury during the 2008-2009 financial crisis. I was primarily an investor at the time, having ‘retired’ some years earlier following an undeservedly successful stint as an entrepreneur during the ‘dot com’ explosion of the 1990’s. I remember investment bankers telling me that business credit was seizing up because nobody could tell what was real. Somewhere around the same time I read St. Thomas Aquinas’ description of usury as selling what does not exist; and I was intrigued by the connection. My response as an investor was to start buying up investments, especially corporate equity, which was on sale at a big discount. My response as a curious individual and blogger was to start collecting old books on the subject and learning about usury.

My background with startup companies certainly colored my understanding of what I was reading.  I had been involved with quite a number of small companies and had founded a couple of my own.  One was rather ludicrously successful (though of all of the successful dot com entrepreneurs I was clearly the most slow-witted). But most startup companies fail. This is true even during the crazy boom times.  Failure is actually the norm, modest success is somewhat rare, and stratospheric success is the outcome for perhaps one of every twenty to fifty high quality startups.

So when you are putting together a small company, making sure that the i’s are dotted and the t’s are crossed on what happens when it fails is just good business. It is never a happy thing when a business experiment fails, but if you’ve done your job right there is no rash of lawsuits and recriminations: you just scuttle the ship, sell off the scrap, everyone gets what they agreed and you move on with life.  Messy windups are for amateurs.

As a result of this background, when (for example) Pope Callistus III talks (in funny sounding language) about the liquidation preferences of mortgage holders terminating in the property but not in personally guaranteed notes, he is speaking a language I understand.

Prior to the financial crisis I hadn’t really thought about usury, and therefore held to fairly conventional opinion to the extent I had any view at all.  My perspective as a Catholic (without so much as a second thought) was a kind of naive and vague impression that times had changed and money had changed and that the doctrine probably only applied to things like loan sharking.  In other words, I more or less trusted the “conservative” narrative, and was certainly not sympathetic to the “progressive” notion that basic doctrines can be tossed out while pretending to retain them.

Imagine my surprise, then, when I found myself in perfect agreement – as best as I can tell – with St. Thomas Aquinas, notorious hard-liner on the subject of usury. Imagine the sense of irony as the straw armies sent against him by generations of the confused and the intransigent fell, as it became clear that – contrary to what we may have been led to believe – the authoritative Magisterial pronouncements on the subject support his view, properly understood, and are not confusing or contradictory themselves.  Imagine my surprise – I should not have been surprised – that the simple, elegant, deeply moral wisdom of the Church was right all along.

What follows was originally posted on my blog “Zippy Catholic” in the format of an FAQ (a list of Frequently Asked Questions and their answers).  It retains this basic format and the informal, conversational, opinionated style typical of the kind of blogging I do.  It is somewhat ad-hoc and redundant, reflecting its genesis and development in many live discussions.  It contains some links to external sites (especially my own blog) but I’ve tried to incorporate all of the essential material into the ebook.  I do not represent myself as an expert or authority: the references, arguments, and explanations should all be evaluated on their own merits, and it is entirely possible that some proclamation or other of which I am unaware could toss a grenade into my understanding and require rethinking the whole thing. I do believe I have this right, but I’m only human and the Magisterium might come out with something new tomorrow which contradicts the views and understanding expressed.  I offer it here as my contribution to what is probably a long overdue discussion among Catholics; a discussion which actually takes usury seriously as a grave and execrable moral wrong, and its prohibition as something which has real implications for how we live as Christians – though perhaps not the implications that you, dear reader, have been led to expect.

Virginia, January 13, 2015

(NOTE: This preface was edited slightly for inclusion in the ebook).