Debtor’s prison and usury

March 20, 2017 § 43 Comments

A good sovereign will decline to enforce usurious contracts, and will reserve the authority to – if prudentially necessary – punish those who attempt to craft usurious contracts.

It follows that in a good polity, the only way to acquire a magistrate-enforceable personal debt would be by committing a crime (including, possibly, criminal negligence).

I conclude that what makes debtor’s prison bad is acceptance of usury.  In the absence of usury, debtor’s prison is just prison for criminals.

On minding your own business and the unpersoning of contract counterparties

March 17, 2017 § 21 Comments

In Question 49 of the Usury FAQ I discuss whether a merchant may licitly charge an individual[1] penalties for late payment on unsecured merchant credit, distinguishing between two cases.

In one case the individual mutuum debtor has the resources to pay the merchant on time and refuses to do so. This is a form of theft or fraud, and thus is (under the natural law) a criminal act subject to the extrinsic titles and criminal penalties which arise from criminal acts.

In the other case the debtor has suffered misfortune and is unable to pay on time.  By extending unsecured credit the merchant took the risk of this occurring upon himself, and is not entitled to late payment penalties.

Notice that this means that the merchant who extends unsecured credit, and the enforcing sovereign, have to understand the individual holistically and charitably as a human being, in order to make this distinction.  It means – and I’m sorry to break this to you – that the dehumanizing incantation “it is just business” doesn’t actually turn contract counterparties into unpersons.

Treating others like the human beings they are in reality is a lot of work, and doesn’t always make for the most efficient business operations.  The other horn of the dilemma is that failure to extend unsecured credit will almost certainly limit a merchant’s available market.  With those moral constraints in place, it is almost as though extending unsecured personal credit should only be an act of charity, not a business decision.  It is almost as though we are to expect nothing in return when we lend money in exchange for a personal IOU.

But efficiency isn’t everything.

[1] As usual, the prohibition of usury applies to debt qua personal IOUs not to debt qua impairment of specified property.  The balance sheets of institutions are inventories of property and the various claims against that property, so “debt” which impairs the balance sheet of an institution is not the kind of “debt” implicated in usury.

The Usury FAQ as a tangible asset

March 16, 2017 § 15 Comments

Reader TomD is preparing to make a print version of the Usury FAQ available.  He is doing all of the work (he has a nice shiny shovel made of mithril), but in preparation for this ‘third edition’ I’ve added Question 56, “Isn’t criticism of usury just veiled anti-semitism”.

Regular readers may notice that the answer is a modified version of this blog post.

Lies, damn lies, and mass murder

March 13, 2017 § 12 Comments

Generally speaking there are a lot more ways to get something wrong than there are to get it right.  In the Church there is a special category of lie called heresy, which involves (again generally speaking) denying or distorting a doctrine of the Church specifically.  Truth is a unity, but not all truths are doctrines of the Church.  That water is H2O is true but is not a doctrine of the Church, for example.

The issue has been raised as to whether one of my claims is that liberalism is a heresy in this technical (rather than merely a colloquial) sense, as opposed to simply false or a lie.

My answer to that line of inquiry, for the record, is that I take no firm position on the question[*]. It is certainly arguable that liberalism as I describe it on this blog — keeping in mind the limitations of language, and the fact that liberalism is what it is in reality independent of those limitations – is condemned in various papal encyclicals, for example Immortale Dei.

But from my point of view it doesn’t much matter, and I don’t think the point is especially worth arguing.  Most folks wouldn’t balk at condemning a mass murdering political philosophy like Nazism without really caring much about whether it is or is not, in a technical sense, a heresy.  One would think that political doctrines which drive the mass murder of innocents (as just the most obvious and visible in a long list of atrocities) would run afoul of a Church doctrine here or there, I suppose, at least indirectly. But frankly the whole question seems like a bit of a red herring.

The same goes for liberalism and – depending on where you feel the lines should be drawn – its close modernist cousins.  Some folks feel compelled to draw the lines this way or that, probably driven by a delusion that the substance of the basic criticisms of liberalism can be deflected by some nominalist semantic dancing.

But my thought is that once the body count of innocents murdered reaches a certain point, quibbling over whether or not a particular political doctrine is or is not technically heresy is just Nazis dancing on the head of a pin.

[*] This contrasts with my position on usury, to which I have not really added any original thought.  My work on usury specifically (except where stated otherwise, and of course this doesn’t apply to e.g. more general discussions of currency, securities, finance, property, etc) is simply a reiteration, to the best of my ability, of the timeless moral prohibition against charging interest on personally guaranteed loans “for consumption” (in the pertinent sense) to individuals, with a few suggestions here and there as to why the moral prohibition obtains.

That is, when it comes to usury I do my best to simply restate Church doctrine; and dissent from Church doctrine is heresy.

Cloud products, usury, and the death of property

February 20, 2017 § 41 Comments

Human beings used to be reasonably capable of distinguishing reality from imagination, at least in the boots-on-the-ground world of day to day life.  Property at one time referred to something real, something which exists in its own right. Thus property could be possessed, repossessed, bought, sold, stolen, consumed, or destroyed independent of the property’s owner or of any other particular persons.

Human beings and possessions were understood to be different things, with the notable – but at least clearly delineated – exception of economic chattel slavery, not to be confused with prison.

Then along came widespread acceptance of usury. Liberal modernity counts, as one of its crowning achievements, the destruction of chattel slavery.  As with all of liberalism’s putative emancipatory achievements, this is illusory.  Rather than freeing humanity from the objectification inherent in chattel slavery, liberalism has merely driven this objectification into the subcutaneous socioeconomic metalayer, implanted it under the skin, making it that much more difficult to see and resist.  As always liberalism does not actually “free” us from authority as it pretends to do: it simply makes authority sociopathic.

The old tyrannies could at least be seen out in the open. A man knew where he stood. Now the tyranny comes cloaked as the seductress “freedom”. Liberal tyranny boils up from under layers of flesh, lurks inside clinging to the bones as it gnaws away at internal organs and releases its offal into the body. If paganism, Mohammedism, and Rabbinic Judaism are packs of hyenas harrowing Christendom, liberalism is a cancer that eats away at it from within, an alien embryo feeding on its host as it releases a thousand horrors.

But I digress.

Property is objective[1], that is, it consists of objects independent of any particular human subject or subjects.  Owners are human subjects, human beings independent of any particular property. Take away a man’s property and you still have a man.

You can tell who truly owns what by asking what happens when the music stops: by asking what, at the end of the day, secures each person’s claims. In a recourse mortgage the borrower “owns” the house and the lender owns the borrower, because the lender is contractually entitled to collect deficiencies from the borrower if selling the house does not fully discharge the borrower’s contractual obligations.  The situation is even worse than that though, because in the case of taxable real estate the sovereign really owns the property and leases it back to the tenant (whom we deceptively label the “owner”).  Real estate “owners”, then, don’t really own the actual property. The sovereign owns the property and what the “owners” really own is exclusive leasing rights: a kind of financial security.  That isn’t nothing, but there is much less there than meets the eye. Real estate “ownership” where there are property taxes is a form of lie: what is owned is not land and buildings, but a perpetual[2] and exclusive lease on land and buildings.

Products dependent upon cloud software represent a new, technologically enabled phase in non-ownership “ownership”.  Cloud software or “Internet of things” products require a “mother ship” somewhere on the Internet in order to work. Without the mother ship they become literally useless; “bricked” in the vernacular. For example you can spend years of your life producing work with a cloud based – or even just cloud licensed – CAD program, under the illusion that you own at least your own actual work product. You don’t own the software, it is merely ‘licensed’ to you, sure.  But in fact you don’t even really own your own work product which you produced with the software using your own hands and mind, because you cannot even continue to access your own work without regularly checking in with the mother ship to ensure that license terms are met . If the terms and conditions change, or the company goes out of business or the mother ship crashes for some other reason, you can’t even access the features of your own “property”; not even your own accumulated work.

Cloud products represent a kind of legalized ransomware.  As with usury there is a superficial resemblance to legitimate transactions; in this case a resemblance to having sold or leased you some tools with which you can produce your own  work; work which you then own. The work you produce with cloud-based ransomware looks like it belongs to you.

But when the music stops your hammer no longer works, there are no other hammers which will work, and all that you have built with the hammer is hostage to the true owner’s terms and conditions.  You were never the owner of your own work product in the first place: you rent your own work at the pleasure of the private party who really owns it.

When philosophical anti-realism invades the domain of property, the distinction between persons and property disappears.  This erodes the distinction between persons and objects in spheres beyond property and ownership.

If you would like to see the great dehumanization reversed, I can’t really offer much hope. But I’d be happy to hand you a shovel.

[1] Nota bene: not physical or merely physical, since physicalism is false.

[2] At least for as long as the tenant continues to make payments, which can be increased at any time without his agreement.

Gold as medieval cryptographic paper

October 22, 2016 § 32 Comments

An important feature of cryptography is authentication: the ability to verify that a document comes from who it claims to come from and has the authority it claims to have. Authentication is a feature of the medium in which a message is delivered: it is not the message itself.

There are two kinds of financial securities, for present purposes: bearer securities and securities which must be cleared when they are transferred. The latter sort have to pass through a transfer agent who verifies the identities of the parties and the legitimacy of the transfer of rights.  Rights are not technically transferred until the check clears, and if someone is being dishonest we know who they are and can hunt them down.

But bearer securities transfer the rights they represent immediately, with transfer of possession.  They don’t leave a paper trail, and it has to be possible within reason to authenticate them as they are.

Folks are always asking me to speculate about why gold or silver was the printing medium of choice for bearer securities (in particular sovereign currency) for much of premodern history.  Whatever else may be the case, it seems obvious that premodern sovereigns had limited choices of available counterfeit-resistant print media from which to choose.

As for why masses of people tend to think that the value inheres in the print media rather than the financial security it represents, that obviously involves mass psychology about why lots of people  have wrong ideas about something or other. It isn’t as if the mass of humanity has a good track record of being right about politically and religiously charged subjects. Centuries of rampant usury has doubtless contributed to a mass illusion wherein many folks can’t tell the difference between actual bread and a promise of bread, and it is an especially modern error to conflate medium and message. At the end of the day what matters is what is true though, not the results of a popularity contest.

If you find yourself psychologically in need of a reason why gold was a favored medium for bearer securities before the modern age, you need look no further than the development of cheaper counterfeit-resistant print media.  And you should probably work on your own demotic resistance to the fact that a whole lot of the time the great mass of human beings muddle through without really understanding what is going on.

Usury, Jews, and libertine cruelty

October 20, 2016 § 29 Comments

In retrospect I suppose it is odd that this hasn’t come up before; but it isn’t the sort of angle I’d thought to raise myself.  That’s just not how my mind works.

In the comments below MarcusD writes:

A priest in my diocese, when the subject of usury comes up (well, all two times), states that opposition to usury is “inextricably linked with antisemitism.” Do you have any thoughts on that position? Will you add a rebuttal to that to the “Usury FAQ”?

My first thought was that the assertions of this priest are just obviously ridiculous, the sort of modern guilt-by-association lunacy unworthy of the validation involved in treating it as a serious objection.  (To be clear: it is certainly not a serious objection).

Several things may be noteworthy though, at least in terms of characterizing the association and the guilt — to the best of my knowledge, and with all the usual caveats, this being well outside the domain of what I consider substantively pertinent to the basic moral question.

First, the fact that diaspora Jews in Christian lands gravitated toward usury as a profession is as much Christians’ fault as Jews’ fault.  The attitude was that Jews were heathens and were going to Hell anyway, so the Christian sovereign’s law actually treated Jews more leniently than it treated Christians. Christians were prohibited from engaging in usury for the sake of their own souls; but Jews were damned anyway so why not let them do what they want?  A libertine approach to the laws that applied to Jews was really a form of cruelty toward them, as is true of libertine legalism in general.  It was also a good way to cultivate anti-Christian forces within Christian society over the long term.

Just imagine if there were a tribe in modern America who were treated as if the law against violent crime didn’t apply to them. Wouldn’t that in objective fact be cruelty toward that tribe?  Wouldn’t we expect the violent behavior of that tribe to increase, to their own detriment and ours?

Second, the situation illustrates the lie built into ‘libertine’ law in the first place. Without the Christian sovereign’s enforcement, usurious contracts would have no teeth.  To the extent that the Christian sovereign enforced usurious contracts he formally cooperated with them: you can’t enforce contract terms without intending them.  So professional usury on the part of Jews was really a partnership between Jews and their Christian enforcers.

Third, there were in fact significant non-Jewish tribes or dynasties associated with professional usury, notably the Lombards.  As is the case in many high IQ professions Jews were doubtless overrepresented in part simply because they have greater intelligence than most of the rest of the bell curve.  But it isn’t as if they had a monopoly on the particular sin in question.

Of course it is risible in the first place to claim that the Church’s doctrinal condemnation of usury depends on whether or not one tribe or other has become, fairly or unfairly, disproportionately associated with that sin.  Alcohol abuse doesn’t become immune to criticism in virtue of its (fair or unfair) association with the Irish.

But in any case with usury, as with any basic execrable disgusting filthy sin against nature and nature’s God, there is plenty of guilt to go around.

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