In which I do a little cyber gophering

April 6, 2015 § 14 Comments

I’m not back, but I didn’t manage to get fully away, as I felt it would be inappropriate to just ignore the discussion in my friend Paul Cella’s kind review of my usury ebook. The discussion there may be of interest to readers of this blog.

Have a wonderful Easter season, y’all!

UPDATE: The discussion (seemingly inevitably) wandered into the domain of currencies, bank deposits, commodities, and the like, despite the irrelevance of theories about those kinds of things to the usury doctrine.  My final comment on that (orthogonal to usury) subject is here (discussion starts in the original ebook review and spills over into that thread).

Note again that (even though I am right, hah!) one need not understand those subjects the way I do at all in order to understand what usury is and why usury is both morally wrong and economically destructive.

UPDATE 2: My comments in the second W4 thread are being edited.  That is their perogative, but here are the last two in full, for the record:


When the Bible and early Church teachers denounce usury on loans of money, they could not well be talking about charging usurious interest on government-issued vouchers, since that did not exist yet.

And that isn’t relevant, for reasons I leave as an exercise (hint: question 35).

The problem with any attempt to have a discussion with you – well, one of them at any rate – is that you cannot seem to keep more than one simple concept in your mind at a time, so every discussion becomes an endless, tedious game of whack-a-mole. If we talk about A, B, and C, by the time we’ve gotten to C you have forgotten everything already discussed in A. By the time A is re-clarified for the seventh or eighth time, you have forgotten everything about C. This happens even when you are having a conversation with yourself about your own ideas, which is why your posts and comments are characterized by (among other things) a certain, shall we say, lack of pith.

I used to think that you were a liar, who would constantly misrepresent my views, pretending not to grasp things I had already addressed many times and imputing things to me that I had not said. I thought that for quite a long time. But I think I was (in a sense) giving you too much credit.

At this point I really am convinced that it is just a cognitive deficit on your part. That is a problem that no amount of clarifying words from me (or anyone else) can cure. I’ve had no great difficulties explaining usury to everyone from children, to octogenarians with no financial background, to financial experts. And I’ve had discussions with people who clearly wanted to obfuscate the subject for ideological reasons. I don’t think you fall into that second category. I just think that any attempt at discussion with you specifically on pretty much any subject, is – for whatever underlying reason – a pointless and endless game of squirrel-chasing characterized primarily by endless hashing and rehashing of manifest irrelevancies which, for whatever reason, you are convinced are significant.

And by the way, on the use of the term “money” your beef isn’t with me.

My position all along – which in typical fashion you respond to as if you were talking to someone else with a different position – is that commodity, coin, fiat money, deposits and other call options, etc are essentiallydifferent things (none of which are licit to lend under a mutuum for gain, since it isn’t licit to lend anything at all under a mutuum for gain), despite economists’ sloppy conflation of them all into one category which they label “money” and despite their contingent historical entanglements. If you have a semantic beef about the label “money” it is with economists, not with me. This is typical Tony-projection-onto-Zippy, yet again.

I couldn’t care less what labels people settle on to use for these things, and other things besides (e.g. non recourse vs full recourse loans), as long as they are treated as the very different things that they are — something you fail to do in the OP, by the way.


I should suppose that the kings coined their money to pay their dues, to soldiers’ pay or to military suppliers, traders etc and not that the subjects could pay their taxes. How in the world would people have access to these newly minted coins? Would the king just distribute them so that people could pay him back in taxes?

It is surreal to me that you don’t see yourself answering your own question.

The sovereign creates official fungible currency and spends it on all the things that governments do. It circulates, and is in demand qua sovereign currency – has value to those the government pays with it – precisely because the sovereign uses it as his measurement units for public commerce, keeps its supply limited (lest it become worthless, like the stock of a company which issues too many shares), and because everyone needs access to some to settle their tax liabilities. This is entirely independent of the medium in which the sovereign issues his currency – gold, zinc, copper, paper, or mere ledger entries in a computer file.

This is similar to (but distinct from) banks issuing deposits. Banks issue deposit accounts as a zero-strike perpetual option to exercise against their assets. Sovereigns issue currency as an option/voucher to settle tax liabilities. Entanglement of the latter with portable commodities of intrinsic value (e.g. gold) is an accident of history, and that entanglement (as I have pointed out many times) actually reduces the transparency of what is taking place.

The deposit accounts issued by banks (and measured in units of sovereign currency) are backed by the bank’s assets: the various properties of varying liquidity in which it holds a stake. Actual currency issued by the sovereign (some of which is held in reserve by banks, to meet the demands of depositors) is backed by his power to tax.

That certain kinds of otherwise normally intelligent people are simply incapable of grasping this – not immediately perhaps, but after actually grappling with finance and trying to grasp what is actually taking place – is really quite puzzling, at least to me.

§ 14 Responses to In which I do a little cyber gophering

  • Zippy says:

    I also left a comment at First Things which has not yet been approved:

    “Some months ago, I predicted that Catholicism in America would basically accommodate itself to whatever sexual regime dominates our society. The accommodation won’t be explicit. The Church won’t endorse homosexuality or gay marriage. Instead, the bishops will step aside, avoid controversy, and just stop talking about things that carry a high price for dissent. This duck-and-cover non-statement fits perfectly into this trajectory.”

    This kind of ‘pastoral’ evasion/accommodation has been going on for centuries in the Church, and not just in America. Exhibit A: usury.

    Update: the comment has been approved.

  • Mike T says:

    What do you make of Tony’s response to my point about sheep and goats?

  • Zippy says:

    Mike T:
    I haven’t read it. His writing is too scatterbrained to make it worth the effort, and when combined with his propensity to project his own scatterbrained thinking onto others it really is just a complete waste of effort. I was only commenting in that thread because of its (putative) continuity with the discussion in Paul’s. Commenting was kind of a catch 22 for me given that the whole thing was kicked off by my usury work, and that the usual sort of ignorant attacks were being made by people who on the one hand don’t understand finance and on the other are convinced that the very things they demonstrably don’t comprehend project caveats and muddiness onto usury.

    But no more whack-a-mole for me with W4’s resident midwit.

  • Paul J Cella says:

    I tried (with only marginal success) to steer the usury thread away from goldbuggery and fiat money, those two interactive magnets for crankishness. It is only by the mercy of the Lord that the discussion wasn’t derailed by someone promoting a certain libertarian crank whose son recently announced a presidential run.

    I think you were definitely onto something in my thread when you conjectured that the outsized rhetorical denunciation of fiat money arises in part out of a usurious mindset. I’m not for a moment denying that central bank monetary decisions may be riddled with errors and impostures, but operating from the assumption that capital can be preserved in value, via stored currency, and put to use is indeed part of the problem. Demand deposits with a bank means putting it to use (as a part of the resources available for profitable lending by the bank), not storing it for future use. They offer safe deposit boxes for that.

  • Zippy says:


    Thanks. I think there is a combination of willful ignorance and usurious mindset at work; and the usual denouncers of fiat money, fractional reserve lending, etc are the worst of the lot. Leftists engage in manifest plunder based on their delusion that egalitarianism is the pinnacle of morality, rationalizing their robberies; but the gold bug fed-hating sort take self righteous ideological delusion to a whole different level. That sort haven’t even a basic understanding of the things they are talking about. Give me a forthright robber with a Robin Hood complex over that sort of raging ignorance any day.

    As soon as the first sovereign to do so stamped his face on a gold coin and decreed that he would accept these official coins to settle tax liabilities, fiat money was born: it was just perversely entangled with gold-qua-commodity, distorting both. Separating fungible government-issued tax vouchers (sovereign currency) from gold (a commodity) is an improvement in transparency, not a detriment. And private bank deposits are neither of those things: they are liability on the bank’s balance sheet, different from common equity only in the specifics of liquidation preferences and the like.

    Folks who don’t even have a basic grasp of the things they are talking about should probably work on that before going on political rampages.

    On usury, it used to be well understood that “It is as difficult to retain property as it is to earn it.” I was going to suggest that this is another example of common knowledge which has been flushed down the memory hole; but it is really worse than a memory hole, because it is a naked emperor right in front of our eyes.

    Capital must be staked in productive enterprise – which always and necessarily carries with it the risks entailed in ownership of actual property or other stakes bound by and to actual property (whatever profit distribution and liquidation terms may characterize the cap table of the productive enterprise in question) – simply in order to keep it from deteriorating through the forces of entropy to nothing, let alone to increase its buying power. Only a pervasively usurious mindset in our culture, an entitlement mentality of breathtaking depth and hubris pervading our entire civilization, can explain why the modern mind rebels upon hearing the simple moral wisdom in the prohibition of usury.

    One of the things that made my eyes roll was the contention by commenters in one of the threads that a system capable of breaking down – by which they seemed to mean a system in which catastrophic losses for large numbers of depositors are possible – is simply unacceptable.

    That’s the usurious mindset, right there.

  • Zippy says:

    Some might find it rather profound that the words of Christ get right to the essence of fiat money, in the context of being asked about payment of taxes and shown the currency-token issued by the Empire, bearing the Emperor’s likeness: “Give unto Caesar that which is Caesar’s”.

    Many modern Christians though seem to think that the statement was some sort of metaphor, or just a clever quip to dismiss the question.

  • CJ says:

    Hi Zippy – OT, did you comment on a post entitled “What Vox Day Believes”? There’s a comment by a “Zippy” that doesn’t exactly read like your usual writing, but I wasn’t sure. Just curious if you’re wading into this whole skiffy awards/morose juvenile canines business.

  • Zippy says:

    Nope, not me.

  • Aethelfrith says:

    CJ does have a point. Your comment to Tony, which I summarize as, “You don’t get what I’m saying because you’re dumb” gels with Vox’s MPAI (Most People Are Idiots) philosophy.

  • Zippy says:

    I’d put my basic view differently, FWIW. Most people blame their own incomprehension and the consequences of their own idiocy on others, and this goes at least double when the subject is finance.

    Exhibit A is depositing funds in banks.

    Zippy’s Iron Rule of Investing is “Never invest in something you do not understand”.

    A corollary is “If you lose property because you invested in something you do not understand, you have nobody to blame but yourself.”

    Everyone violates this rule all the time. Investing in something you do not personally understand is not investing: it is gambling, or worse. Expecting other people to understand it for you and personally assume the risk, guaranteeing return of the original investment in kind, is usury.

    The great majority of people who invest their money by exchanging it for bank deposits fail utterly to understand what they are doing, and typically do not even make an effort to try to understand. This is not because the information is unavailable or because the process is anything less than ludicrously transparent in 2015. Perhaps most of the people who invest in bank deposits are simply incapable of understanding what they are doing, which in itself is no vice — but if so, they should not be doing it, and blaming their incomprehension and its consequences on others is the first resort of the entitled midwit scoundrel.

    [Note: comment edited for clarity].

  • Ita Scripta Est says:


    Did you leave What’s Wrong with the World because of its liberalism? Do you agree that writers there are right-liberals?

  • Zippy says:

    I left for a number of reasons, only some of which were too-large editorial differences with certain parties. But in their defense I am really not very easy to get along with and tend to do better on my own, where any “overspill” from my own views doesn’t affect other people so much.

    Also blogging tends to make me irritated at people who in real life I would most likely like just fine. On my own I have more control over my own engagement level with folks, which mitigates that to some extent.

    I am not sure that there is a single consistent view there: just a group of writers with enough in common to make up a group blog. Also, if you were to try to draw an ‘editorial mean’ of the blog over time it has probably moved around quite a bit as the composition of writers has changed.

  • Aethelfrith says:

    I think the pathologies* of some bloggers would fade drastically if they spent less time blogging and more time interacting with other people face to face.

    *This is not a swipe against The Social Pathologist, who seems to have enough of an offline life to be normal.

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