inherent eCuity, he is articulating an ethic of @balanced reciprocity,A
one in which trade is marked by neither exploitation nor gift, neither
a7ection nor animosity. The debate over usury has usually assumed a
world clearly divided into brothers and others, friends and enemies.
But most social life is not so rigorously symmetrical. Even in tribal
groups, but more so in state and urban societies, there is a middle
groundDcordial strangers, trustworthy tradesmen, distant cousins,
friends of friends, dubious relations, who are neither wholly alien nor
a part of the inner circle of unconditional sharing. And as there are
degrees of relatedness 8and therefore degrees of strangeness:, so there
are degrees of reciprocity.
If we were to place these degrees of reciprocity on a scale, pure
gift would lie at one end, theft at the other= at one pole would be the
disinterested sharing that creates or maintains kinship and friendship,
and at the other, chicanery, exploitation, and pro>teering. Balanced
reciprocity, Calvin?s @eCuity,A lies midway between these extremes. In
eCuable dealings, neither side gains nor loses and there is no
enduring social feeling, neither good nor bad will. To this end the
ethics of eCuity permit the reckoning of time and value which the
ethics of gift exchange restrain. If we want our trade to leave neither
kinship nor anger, then we seek to balance real costs in present time.
In the case of loans, as a free loan amounts to the gift of the interest,
we make the relationship eCuable simply by reckoning and charging
the interest. What I have called ancient usury refers to this @eCuity
rate.A Where gift exchange is the accepted and moral form of
commerce, even an eCuity rate is an immoral usury, as it removes the
spirit of the gift. Tribal groups that have categorically prohibited this
simple usury must be those that have little need for the balanced
reciprocities of an amoral stranger trade, while those that have
allowed it admit some need for an ongoing, stable trade with
outsiders, foreigners, aliens.
Some tribal groups have obviously had reason to develop an ethic
of eCuable stranger trade, but on the whole those situations that call
for balanced reciprocity are not as common in pre-state societies as
they are now. The shift from pre-state to state, from tribes or small
towns to an urban, mass society brings with it a rise in stranger trade.
towns to an urban, mass society brings with it a rise in stranger trade.
The sphere of positive reciprocity has been shrinking for at least four
centuries, until now the bulk of our dealings occur at that middle
distance in which people are neither real friends nor real aliens but
what I call cordial strangers.
Cordial strangers loan money to one another at the eCuity rate. It is
a mutually agreed upon approximation of the real increase on
wealth= it assures that the creditor-debtor relationship is a market
relationship and no more= no one is connected, no one is hurt. In a
society that recogniKes the right to make a reasonable pro>t on
capital, the eCuity rate is called the prime rate. Above the prime we
have rates for speculators and suspicious strangers. Higher still, we
have modern usury, loan sharking, theft by debenture. And below the
prime we >nd various @friendship rates,A which fall to di7erent levels
for di7erent degrees of friendship, until we return to the interest-free
loan, the pure gift case.
All societies, tribal or modern, have some such range of
reciprocities to organiKe and express various degrees of relatedness or
social distance. What is particular to a market society is the need to
emphasiKe the balanced reciprocity that occupies the middle of the
scale. With it the true citiKens of a mass societyDmembers of no
community of common faith or purpose, and of no network of
cooperating kinDare able to maintain an ongoing commerce with
one another. Without it each citiKen would be overwhelmed in two
directions as all his dealings would lead him into either kinship or
conMict. The ethic of eCuity which used to appear at the edge of the
group now appears at the edge of the self, allowing essentially
autonomous individuals to interact with one another. Moderate
interest 8on loans, but in the other sense as well: gives the modern
self a semi-permeable skin so that we may express and deal with the
relative strangeness of those with whom we eat our daily lunches. A
market society cannot function without this interest, this ancient
A reply to the pro-usury arguments that follow the Reformation has
reCuired that we back o7 in this way so that we might see the
invisible assumptions upon which they lie. Their ma<or points are
true, given the rise of individualism and a decline of a common faith,
an increased range of alienable property and the disappearance of
the commons, the advent of widespread market exchange, and the
emergence of the state. Where commerce feeds no common spirit and
social life takes its style from the market, commodity exchange does
seem to imitate the functions of gift exchange. Calvin is right, our
relationship is not the same as that of the ancient Oews. And he is
right, capital will not increase unless it is used.
But market relationships and capital let out at interest do not bear
the increase-of-the-whole that gift exchange will bear. ECuable trade
is not an agent of transformation, nor of spiritual and social cohesion.
With the vector of increase reversed, interest is self-interest: it does
not <oin man to man except in the paper connections of contract. And
where the spirit of the gift has been suspended, legal contract
replaces the felt bonds of gift exchange and a skeleton of law and
police must appear to replace the natural structure and cohesion of
faithfulness and gratitude 8so that perfect law and order are perfect
alienation:. The liveliness that Dana speaks of is the bustle of trade,
not the bustle of life. As we all know, it is possible to have a lively
factory in which no one feels any personal energy. And as for Dana?s
@poor, honest debtorA who has no access to capital, the fact that the
poor are trapped in a net of property rights that would have them
suffer more deeply if they didn?t participate is hardly an argument for
that system to continue. Nonetheless, it is true that once the premises
of the post-Reformation argument in favor of usury are in place,
commodity exchange can begin its alluring imitation of gift exchange.
A still odder thing happens: with the rise of the commodity as a form
of property, the giving of gifts starts to look suspiciously like the old
way of dealing with strangersU Gentlemen, after all, loan money to
each other, not to the truly needy. How is it that the needy poor
surviveP Here is the way the word @charityA comes to be used by
William Paley in a book on morality dated 982R:
I use the term Charity G to signify the promoting the
happiness of our inferiors. Charity in this sense I take to
be the principal province of virtue and religion: for,
whilst worldly prudence will direct our behavior
towards our superiors, and politeness towards our
eCuals, there is little beside the consideration of duty, or
an habitual humanity which comes into the place of
consideration, to produce a proper conduct towards
those who are beneath us, and dependent on us.
Such charity is not gift. The recipient of a gift should, sooner or
later, be able to give it away again. If the gift does not really raise
him to the level of the group, then it?s <ust a decoy, providing him his
daily bread while across town someone is buying up the bakery. This
@charityA is a way of negotiating the boundary of class. There may be
gift circulation within each class, but between the classes there is a
barrier. Charity treats the poor like the aliens of old= it is a form of
foreign trade, a way of having some commerce without including the
stranger in the group. At its worst, it is the @tyranny of gift,A which
uses the bonding power of generosity to manipulate people. As
Huddie Ledbetter sang in his song @The Bourgeois BluesA:
The white folks in Washington, they know how
To give a colored man a nickel <ust to see him bow.
To argue over usury after about 9800 misses the point. By then the
usury Cuestion is a subtopic in the more central issues of
individualism, the ownership of capital, and the centraliKation of
power. All of the pro-usury arguments assume private property and
exchange trade, and they must be answered in those terms, not in
terms of the usury debate.
Almost all nations and states repealed their usury laws during the
last half of the nineteenth century. England abolished hers in 98RQ,
Germany in 98YV, and so on. At the same time other religious groups
<oined the Protestants, who had long tolerated usury among friends.
In 980Y Napoleon called upon Hrench Oews to clarify their position
on the brotherhood, and they replied that they were Hrenchmen >rst
and Oews second. Moreover, they explained that the Talmud made it
and Oews second. Moreover, they explained that the Talmud made it
clear that brothers could legitimately charge interest to one another.
The Catholics also fell in line. Even as far back as 9VQR the Pope had
defended Q percent interest on a state loan, and in the nineteenth
century Rome continually authoriKed the faithful to lend money at
moderate rates. At present the Holy See puts out its funds at interest
and reCuires ecclesiastical administrators to do the same.
Perfect gift is like the blood pumped through its vessels by the heart.
Our blood is a thing that distributes the breath through out the body,
a liCuid that Mows when it carries the inner air and hardens when it
meets the outer air, a substance that moves freely to every part but is
nonetheless contained, a healer that goes without restraint to any
needy place in the body. It moves under pressureDthe @obligation to
returnA that fascinated Marcel MaussDand inside its vessels the blood,
the gift, is neither bought nor sold and it comes back forever.
The history of usury is the history of this blood. As we have seen,
there are two primary shades of property, gift and commodity.
Neither is ever seen in its pure state, for each needs at least a touch of
the otherDcommodity must somewhere be >lled and gift somewhere
must be encircled. Still, one usually dominates. The history of usury is
a slow swing back and forth between the two sides. I have taken the
double law of Moses as an image of the balance point, gift contained
by a boundary like the blood moving everywhere within the limit of
The image of the Christian era would be the bleeding heart. The
Christian can feel the spirit move inside all property. Everything on
earth is a gift and God is the vessel. Our small bodies may be
expanded= we need not con>ne the blood. If we only open the heart
with faith, we will be lifted to a greater circulation and the body that
has been given up will be given back, reborn and freed from death.
The boundaries of usury are to be broken wherever they are found so
that the spirit may cover the world and vivify everything. The image
of the Middle Ages is the expanding heart, and the deviant is the
@hardheartedA man. He is usually taken to be a Oew, the only man in
town who feels no self-consciousness in limiting his generosity.
The Reformation brought the hard heart back into the Church. In a
sense, the swing from gift to commodity re-crossed its midpoint
during these years, the high liveliness of the Renaissance. The Church
still aNrmed the spirit of gift, but at the same time it made peace
with the temporal world that limited that spirit as it grew in
But the heart continued to harden. After the Reformation the
empires of commodity expanded without limit until soon all thingsD
from land and labor to erotic life, religion, and cultureDwere bought
and sold like shoes. It is now the age of the practical and self-made
man, who, like the private eye in the movies, survives in the world
by adopting the detached style of the alien= he lives in the spirit of
usury, which is the spirit of boundaries and divisions.
The @bleeding heartA is now the man of dubious mettle with an
embarrassing inability to limit his compassion. Among the British in
the Empire it was a virtue not to feel touched by the natives, and a
man who @went nativeA was Cuickly shipped home. 8In Mrs.
Dalloway, Virginia Woolf lets us know with one sentence that Peter
Walsh will never amount to much because he has fallen in love with
an Indian woman.: Now the deviant is the heart that does not keep
its own counsel and touches others with feeling, not reckoning. Gift
exchange takes refuge in Sunday morning and the family. The man
who would charge interest to his wife would still be called
hardhearted, but outside the family circle there is little to restrain the
fences of usury.
In this century the man with the bleeding heart is a sentimental
fool because he has a feeling that can no longer find its form. Still, his
sentimentality is appealing. Everyone likes Peter Walsh, though no
one would give him a good <ob. In the empires of usury the
sentimentality of the man with the soft heart calls to us because it
speaks of what has been lost.
E Philip Drucker provides an example from the tribes of the
North Paci>c coast. Loans were not uncommon there, but most
were in the nature of a gift, returned with voluntary increase to
indicate gratitude. @However,A Drucker tells us, @loans at interest
were strictly commercial transactions, the rate being agreed upon
at the time of the loan. The ruinous 90 0 percent rate was usual
for a long-term loan, that is, for several years G There are no
exact data on the origin of the custom, but there is reason to
suspect that it may not be aboriginal in originG It is probably
signi>cant that loans at interest consisted of trade blankets or
money, not of aboriginal value items.A Here, as I surmise must be
the general case, the appearance of interest on loans coincides
with the introduction of market exchange with foreigners.
E I am not fond of arguments that depend upon declaring
something @naturalA or @unnaturalA= they tend not only to cut o7
debate but to assume a division between man and nature. Usury
may be <ustly hated, but since men invented it, we must either
accept it as a part of nature or say that men are not.
To give Aristotle his due, however, we might change the terms to
@organicA and @inorganic.A Organic wealth was the original
context for most of our economic language. In The Origins of
European Thought Richard Onians makes an interesting
observation in regard to the word @capital.A Hor both the Greeks
and the Romans, the human head was regarded not as the seat of
consciousness but as the container of procreative powers, the
seeds of life. A Roman metaphor for kissing was @to diminish the
head,A according to Onians= sexual intercourse also @diminished
the head,A the point being that erotic or generative activity draws
the life-stu7 out of its container. In this way it was understood
that caput 8head, but also capital: produced o7spring. Onians
tells of a Roman cult, the Templars, who worshiped a divine
head @as the source of wealth, as making trees bloom and earth
to germinate.A Aboriginally @capitalA was a strictly organic
wealth that Cuite literally bore tokos, and in this context
Aristotle is right: it is unnatural, it is not true to nature, to speak
and act as if inorganic capital could possibly do the same.
E Such a double economy is hardly uniCue to the Oews= it occurs
wherever there is a strong sense of an in-group. In fact, if ancient
usury was not the exorbitant rate to which the term now refers
but something closer to @rentA or @interest,A then the Oewish law
is comparatively mild. An ethnologist writes as follows of a
Solomon Island society: @Native moralists assert that neighbors
should be friendly and mutually trustful, whereas people from
far-o7 are dangerous and unworthy of morally <ust consideration.
Hor example, natives lay great stress on honesty involving
neighbors while holding that trade with strangers may be guided
by caveat emptor.A
E This remarkable piece of scholarship >rst appeared in 9LQL
and has now been reprinted, with addenda, by the University of
Chicago Press. Nelson was a historian of religion who, touched
by Max Weber?s similar work, >xed on the usury debate as a way
to trace moral and economic conscience through the history of
the Church. I am indebted to his guidance.
E @The law was our custodian until Christ came, that we might
be <usti>ed by faith. But now that faith has come, we are no
longer under a custodian.ADGal. 3:2QS2R. Luther reinstates the
law in civil a7airs where faith may not be assumed, but risk
may. His is an Old Testament spirit.
E It may be time to add a note on the Islamic parallel to this
story. As we noted at the outset, the Koran clearly forbids
charging interest on a loan. The history of that prohibition is
essentially the same as that of the Mosaic law, but without the
back-and-forth dialectic, as Muhammad makes no distinction
between brothers and others, faithful and infidel.
During and after the Middle Ages, Muslims accepted a practical
modi>cation of the Koranic prohibition by allowing a return on
capital provided the creditor had taken a risk. A man was still
forbidden to take interest in the sense of a guaranteed percentage
return, but he could share in a pro>t if he had taken a risk.
Nowadays some Muslims, like some Orthodox Oews, still refuse
to charge interest on a loan, but most allow a reasonable rate of
The debate between these two factions was one of the minor
dramas to be played out in Iran after the fall of the Shah in
9LVL. The stated intent of the followers of Ayatollah Ruhallah
Khomeini was to organiKe an @Islamic republicA rooted in the
precepts of the Koran. Even a man not closely aligned with the
clergy, for mer president Abolhassen Bani-Sadr, reportedly
maintained an elaborate micro>lm library with Koranic codes
cross-referenced to economic issues.
But, as Calvin told us, a modern state cannot operate on the
ethics of an ancient tribe. Soon after the fall of the Shah, the new
head of the state-owned oil companyDa devout Muslim, a
radical lawyer, an enemy of the ShahDdeclared himself
perplexed as to how to proceed, >nding it @neither possible nor
bene>cial G to put all political, economic and <udicial problems
into an Islamic mold.A A state whose wealth derives from selling
fossil fuel to foreigners cannot operate without interest on
capital. When this drama is resolved, I imagine that, as was the
case in Europe, the merchant princes will emerge with the
power. And the clergy will have to produce a Luther or a Calvin
if they wish to share that power.
Documents you may be interested
Documents you may be interested