Richard Rohr's Daily Meditation Usury: The Root of Evil

Lone_StarrLone_Starr Posts: 97 Bronze ✭✭✭

Saw this in my inbox and thought I'd share it.


Week Twenty-six


Economy



Usury: The Root of Evil
Thursday, June 28, 2018

Even
After
All this time
The Sun never says to the Earth,

“You owe me.”

Look
What happens
With a love like that,
It lights the whole sky.
—Hafiz, paraphrased by Daniel Ladinsky [1]

The economy of exploitative profit has no place in God’s kingdom. The economy of grace—gifts freely given and received—is the way God and nature operate. [2] Charles Eisenstein explains the “sacred economics” of a gift economy and how that has been twisted into the unhealthy system we have today:

At its core, money is a beautiful concept. Let me be very naïve for a moment so as to reveal this core, this spiritual (if not historical) essence of money. I have something you need, and I wish to give it to you. So I do, and you feel grateful and desire to give something to me in return. But you don’t have anything I need right now. So instead you give me a token of your gratitude. . . . Later, when I receive a gift from someone else, I give them that token. . . .
Money becomes necessary when the range of our gifts must extend beyond the people we know personally. . . . Traditional, decentralized gift networks gave way to centralized systems of redistribution, with the temple, and later the royal palace, as the hub. . . . They soon diverged from the gift mind-set as contributions became forced and quantified, and outward disbursement became unequal. . . .

We are faced with a paradox. On the one hand money is properly a token of gratitude and trust, an agent of the meeting of gifts and needs. . . . As such it should make us all richer. Yet it does not. Instead, it has brought insecurity, poverty, and the liquidation of our cultural and natural commons. Why?

The cause of these things lies deep within the very heart of today’s money system . . . usury, better known as interest. Usury is the very antithesis of the gift, for instead of giving to others when one has more than one needs, usury seeks to use the power of ownership to gain even more—to take from others rather than to give. . . .

The money created [by the U.S. Federal Reserve] accompanies a corresponding debt, and the debt is always for more than the amount of money created. . . . Usury both generates today’s endemic scarcity and drives the world-devouring engine of perpetual growth. . . . To make new money to keep the whole system going . . . we have to create more “goods and services” . . . [by] selling something that was once free. . . .

Completing the vicious circle, the more of life we convert into money, the more we need money to live. Usury, not money, is the proverbial root of all evil. [3]


Gateway to Presence:
If you want to go deeper with today’s meditation, take note of what word or phrase stands out to you. Come back to that word or phrase throughout the day, being present to its impact and invitation.



[1] Daniel Ladinsky, The Gift: Poems by Hafiz (Penguin Compass: 1999), 34. Used with permission.

[2] See Richard Rohr, https://cac.org/blessed-are-the-merciful-2018-02-04/.

[3] Charles Eisenstein, Sacred Economics: Money, Gift & Society in the Age of Transition (Evolver Editions: 2011), 11-13, 93-95, 100-101.


Agree, disagree, love or hate it, I think there is some good truth in this piece by Father Richard Rohr.

The majority of the economic system is now debt based (The borrower is a slave to the lender). You got to applaud Goldmoney (and cryptos) for trying to offer an alternative to the slave economy.

Comments

  • GoldNRollGoldNRoll Posts: 134 Bronze ✭✭✭
    I disagree with Father Richard Rohr

    If I lend you 100 grams of gold for 1 year with an interest of 5 grams of gold, for one full year I will not dispose of my money. You will.
    5 grams of the gold is the price of you using the 100 grams of gold this year, instead of me. It is the time-preference price.
    Present use is always more valuable then future use. All psychological studies show that the vast majority of people would prefer to receive 1000 USD now than 1100 USD next year...

    Now I will cite from Ludwig von Mises - The Theory of Money and Credit:

    "A credit transaction is an exchange of present
    goods for future goods."
    - As I said, the interest (aka usury) is the price payed to the lender for postponing its present use of money for future use.

    "Banks borrow money in order to lend it; the difference between the
    rate of interest that is paid to them and the rate that they pay, less
    their working expenses, constitutes their profit on this kind of
    transaction. Banking is negotiation between granters of credit and
    grantees of credit. Only those who lend the money of others are
    bankers; those who merely lend their own capital are capitalists,
    but not bankers."

    "For the activity of the banks as negotiators of credit the golden
    rule holds, that an organic conexion must be created between the
    credit transactions and the debit transactions. The credit that the
    bank grants must correspond quantitatively and qualitatively to the
    credit that it takes up. More exactly expressed, 'the date on which the
    bank's obligations fall due must not precede the date on which its
    corresponding claims can be realized.' Only thus can the danger
    of insolvency be avoided. It is true that a risk remains. Imprudent
    granting of credit is bound to prove just as ruinous to a bank as to
    any other merchant."

    Until here, I see nothing nothing evil in the activity of banking. The problem begins with the issuance of fiduciary media:

    "Credit transactions fall into two groups, the separation of which
    must form the starting point for every theory of credit and especially
    for every investigation into the conexion between money and
    credit and into the influence of credit on the money-prices of goods.
    On the one hand are those credit transactions which are characterized
    by the fact that they impose a sacrifice on that party who performs
    his part of the bargain before the other does - the foregoing of
    immediate power of disposal over the exchanged good, or, if this
    version is preferred, the foregoing of power of disposal over the surrendered
    good until the receipt of that for which it is exchanged.
    This sacrifice is balanced by a corresponding gain on the part of the
    other party to the contract - the advantage of obtaining earlier
    disposal over the good acquired in exchange, or, what is the same
    thing, of not having to fulfill his part of the bargain immediately.
    In their respective valuations both parties take account of the advantages
    and disadvantages that arise from the difference between
    the times at which they have to fulfill the bargain. The exchange ratio
    embodied in the contract contains an expression of the value of
    time in the opinions of the individuals concerned.

    The second group of credit transactions is characterized by the
    fact that in them the gain of the party who receives before he pays is
    balanced by no sacrifice on the part of the other party. Thus the
    difference in time between fulfillment and counter-fulfillment, which
    is just as much the essence of this kind of transaction as of the other,
    has an influence merely on the valuations of the one party, while the
    other is able to treat it as insignificant. This fact at first seems
    puzzling, even inexplicable; it constitutes a rock on which many
    economic theories have come to grief. Nevertheless, the explanation
    is not very difficult if we take into account the peculiarity of the
    goods involved in the transaction. In the first kind of credit transaction,
    what is surrendered consists of money or goods, disposal over
    which is a source of satisfaction and renunciation of which a source of
    dissatisfaction. In the credit transactions of the second group, the
    granter of the credit renounces for the time being the ownership of
    a sum of money, but this renunciation (given certain assumptions
    that in this case are justifiable) results for him in no reduction of
    satisfaction. If a creditor is able to confer a loan by issuing claims
    which are payable on demand, then the granting of the credit is
    bound up with no economic sacrifice for him. He could confer
    credit in this form free of charge, if we disregard the technical costs
    that may be involved in the issue of notes and the like. Whether he
    is paid immediately in money or only receives claims at first, which
    do not fall due until later, remains a matter of indifference to him. 1
    It seems desirable to choose special names for the two groups of
    credit transactions in order to avoid any possible confusion of the
    concepts. For the first group the name Commodity Credit (Sachkredit)
    is suggested, for the second the name Circulation Credit
    (~Jrkulationskredit). It must be admitted that these expressions do
    not fully indicate the essence of the distinction that they are intended
    to characterize. This objection, however, which can in some degree
    be urged against all technical terms, is not of very great importance.
    A sufficient reply to it is contained in the fact that there are no better
    and more apt expressions in use to convey the distinction intended,
    which, generally speaking, has not received the consideration it
    merits. In any case the expression Circulation Credit gives occasion
    for fewer errors than the expression Emission Credit (Emissionskredit)
    which is sometimes used and has been chosen merely with regard to
    the issue of notes. Besides, what applies to all such differences of
    opinion is also true of this particular terminological controversy - the
    words used do not matter; what does matter is what the words are
    intended to mean."

    The paragraphs above are the essence of the entire classical economy, from ancient Chinese to the school of Salamanca and to the Austrian School.

    https://mises.org/sites/default/files/The%20Theory%20of%20Money%20and%20Credit_3.pdf

    - from page 261 in the book (266 in pdf)

    To conclude, the second group of credit transactions, knows as Circulation Credit or the issuance of credit by issuing more fiduciary media than money proper in hand, is the root of all evil. Because in this case the lender does NOT renounce the present use of money while lending. It just "duplicates" the money...
  • Lone_StarrLone_Starr Posts: 97 Bronze ✭✭✭
    I think his whole point was on the current fiat currency system that we all live in, not on the former gold standard that existed around 40-100 years ago and is now dead.

    The only way to create our currency in today's world, is to go further and further into debt. We need that currency to trade for the things we need to survive. The only way to grow in our current economic system is to cannibalize and enslave our future.

    There is the world that is
    and
    the world that we want.

    The only way to change the world is to change yourself.



    Only time will tell if Goldmoney can pull off and create a golden economy.







  • GoldNRollGoldNRoll Posts: 134 Bronze ✭✭✭
    If my understanding was right, the conclusion of the above letter was: "Usury, not money, is the proverbial root of all evil."
    My above comment was in regards to this statement.

    The comments from von Mises are applicable to the current monetary system as well to the former gold standard system. They are universal.

    If I make a current (fiat) USD deposit at a bank with interest A and maturity in 1 year, the bank business is to lend my money with interest B > A and maturity <1 year, so the bank can return my deposit with interest A to me and retain its profit as B-A. I agree with this kind of business, this is not money creation. This is the 1st type of bank lending activity Mises was writing about.
    But if I deposit (fiat) USD in my current account and the bank uses a part of it to give credit (with interest) to another person, that is money creation and debt creation. This is the second kind of lending activity Mises was writing about, that I disagree with.

    Economically, we should distinguish between (fiat) money creation and debt creation. Not all fiat money creation is debt creation ("printing" money and using it directly to buy products and services is not) and not all debt creation is money creation (the 1st type of lending in the Mises paragraph is not).

    Father Richard Rohr writes:
    "The cause of these things lies deep within the very heart of today’s money system . . . usury, better known as interest. Usury is the very antithesis of the gift, for instead of giving to others when one has more than one needs, usury seeks to use the power of ownership to gain even more—to take from others rather than to give. . . ."

    What would be the opinion of the author on FED just printing fiat and give it to the poor as a gift? (a Bernie Sander's view).

    The author emphases that the problem is when the newly created money is lent for interest. It doesn't state that there would be a problem with the creation of money per se.

    To conclude:
    Father Richard Rohr:
    - he's opposed to interest (usury) in all cases.
    - we don't know his opinion on money creation without usury (to be used as a gift'to those in trouble let's assume)

    Me:
    - I disagree with fiat money creation, be it with or without interest.
    - I do agree with lending with interest one own money or even the money of clients as a banking activity, if the clients agree and the source of money is not from fiat money creation and is not money deposited in current accounts.



  • RocketDogRocketDog Posts: 621 Silver ✭✭✭✭
    I have letters from my great-great-grandfather back around the civil war 1863-ish where he had some extra cash on hand, and he encouraged his brother to lend it to any of the trustworthy neighbors so that they might buy a cow or pigs or some sheep or some seed. After they sold their pigs, or produce or milk, they were able to make enough money to pay my great-great-grandfather back, and feed themselves and they didn't need to borrow any more. Due to the loan, the community was made stronger. He did not charge interest. The interest free lending was common back then. It was a way strengthen a community, to allow those who had good fortune to share it with those who did not. It was probably a way of banking some "good intentions" which could be returned to you if you ever fell on hard times yourself. When the money is on a gold standard and there is no inflation, then you really don't need the interest to offset the fact that you didn't get to spend your own money until a year or two later.
    At a local level, in communities with trust, peer to peer lending was probably a common thing. Charging interest in such a case would probably be obscene.
    In such a case, where you have more money than you can use, and your neighbors, maybe through misfortune or maybe through lack of insight have fallen on hard times, and you can judge whether they have learned and will use your money wisely, and their strength and well-being can lead to your strength in the future, why would you need to charge interest?
    In our current world, we are a few steps separated from this aren't we?...at least in the first world. Hard to tell who needs what. The government takes our money as taxes and doles it out blindly to both the deserving and undeserving. Neighbors do not rely upon neighbors or even communities. Everything is anonymous. Maybe charging interest in current times seems OK based on these factors.
    It has long been said that the chargers of interest are "evil". Generally the borrowing of money on interest was a practice that was considered evil and should be avoided...for obvious reasons of liability, and the irresponsible act of getting something before earning it. And now we live in a society that nearly requires borrowing at interest.
    So we need to reimagine a society, where money is based on gold, inflation is not a problem, where local economies matter much more than they do now, where we know our neighbors, where citizens have the power to help their neighbors and not be tyrannized by the federal government or banks by inflation or interest-based debts. In this society, your good behavior would set you up to receive interest-free trade with your neighbors, and only those who were unreliable or without friends would have to deal with interest-charging lenders. Social capital would be back on the rise...

    There is a lot of truth to how much "evil" or how bad the unintended consequences of large banks, large government and large corporations have become. The founders of the USA knew it. And many of the people who put the banking, and big government in place know it as they do it. Most citizens have just been unknowing sheep, along for the ride, being told that we no longer have to worry about getting along in our communities because we have big federal government payments and anonymous banking. The corrupt and the greedy love the current system. (As do many less corrupt businessmen who see ways to profit from it.)

    Judgement will become fashionable again. (Lefties are quaking in their boots.) Hopefully this time we can be more educated and not judge people poorly due to physical ailments and hopefully by now we realize that crossed eyes are not contagious etc. But judgement, deciding who our neighbors should be, and deciding how we want our local communities to be run, who is honest, and who should get run out of town, who is just a drunk and should be sent to the clinic and not given a loan, etc. These things will come back as federal notes fade away. What also must come back is our sense of social responsibility, to help our worthy neighbors without taking advantage of them. I think many of us are actually LONGING for such an opportunity, to help, to have an impact, and guide our communities in ways that we cannot with the prospect of federal grants coming in, rather than local leaders relying upon local donations... The current system causes so much corruption, and lack of local control. Going back to a gold standard could start a chain reaction that would change so much (for the better and worse -- cause local communities can go wacky) but I bet our malaise and depression would melt away as unique situations and opportunities and sense of community returned.
  • GoldNRollGoldNRoll Posts: 134 Bronze ✭✭✭
    @RocketDog
    "Going back to a gold standard could start a chain reaction that would change so much (for the better and worse -- cause local communities can go wacky) but I bet our malaise and depression would melt away as unique situations and opportunities and sense of community returned."

    Lovely comment and well said conclusion. But there is no place for malaise and depression even in the current context. While recognizing the current system as it is - ugly and corrupt -, we still have the power to choose our own emotions. Let's opt for serenity, joy and a lot of energizing motivation to change some things.
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