Well, we can dream. If it were an absolute impossibility, though, I don’t think our old friend Zippy would have written a book about it. The book is actually in the form of an FAQ, answering all of your most urgent questions and destroying, especially, all your misconceptions. For example, you have no doubt asked at one time or another: What is usury? His answer:
Usury is lending money for profitable interest. The term “usury” often specifically refers to the interest itself – interest charged on a mutuum (personally guaranteed by the borrower) loan.
Horrors, you think. Doesn’t everybody do that? Charge interest for profit, I mean? It’s the heartbeat of the American economy. So you ask, reasonably: Is usury always morally wrong?
Yes. Usury is always morally wrong without exception.
But, sputter, gasp, What if the interest rate is reasonable? I have a credit card, for Pete’s sake. I like my credit card and they only charge me 10%.
Usury is always immoral no matter what interest rate is charged. The idea that usury is only charging “unreasonable” interest is a modern fiction.
“One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions.” – Vix Pervenit
Vix Parvenit is a magisterial document dating from (if I recall) the 1400′s. [Correction: the 1700's, 1745 to be exact]. It appears to be regnant in the modern Catholic mind that the Church has modified, softened or (to speak plainly) quite literally reversed an immemorial teaching of the Faith. This, says Zippy, is a damned lie. People are often stunned by the assertion. He even draws a parallel between the doctrinal de-emphasis (also known as silence) that has accompanied the universal acceptance of usury, and the pastoral reticence that has resulted in the ubiquity of contraceptive practice, which stands as means to an end called the Sexual Revolution.
Now, I’m not qualified to comment in much depth on these matters. I’m still trying to absorb it all. I can only lay claim to a suspicion that if Zippyconomics were made public policy, the effect might be a monetary and ethical stability of revolutionary proportions (without denying, of course, the possibility of utter destruction by circumstances unforeseen, the general fate of man and his machinations). I even asked if, “..put into effect throughout the economy, it might fix a lot of problems. I wonder if it would have had an inhibiting effect on the 2008 mess.”
It unquestionably would have. The root cause of that mess was full recourse real estate loans with shaky-to-ludicrous loan-to-value ratios. Without that inventory of bad loans at the bottom of the pyramid the whole ‘real estate bonds with ratings “enhanced” by credit default swaps’ scheme would never have ‘worked’. The reason usury ‘works’ is because the usurers can buy ‘slavery shares’ in individuals (as opposed to property shares in assets); and individuals of little means are tempted into it because selling a part of themselves into slavery makes them feel (and spend) as if they were wealthier than they really are.
This all sounds right, and, in a way, so obviously true that it makes one wonder why usury laws are not now in place. They would make so much sound financial sense that the stabilizing effect on the economy might be wondrous to behold. Of course, there’s still nothing to stop the government from borrowing more than it can pay back resulting in a 17 trillion dollar debt, but since we do not have any recourse at all against those who perpetrate the malfeasance, I guess it’s a different moral problem. Another species of theft, I suppose. When you say that those real estate loans back then were full recourse, such that people were selling themselves into slavery, does that mean that when they defaulted on their loans, the bank had title to more than just a repossessed house? That they could pursue the borrowers for the full amount of the loan, or at least for the unpaid balance? Maybe even get them thrown into the modern version of debtors’ prison?
Yes. That is a “deficiency judgment”. Most mortgages are full recourse (still are now) and allow for a deficiency judgment, if the repossessed and auctioned house sells for less than the balance of the loan. I think that a few states do not allow full recourse mortgages; but most do. There is no debtors prison in the US, but they can pursue the borrower all the way into bankruptcy court, garnish wages, etc.
I have also been struck by the resistance to Zippy’s position in various (quite many, in fact) comment threads at his own place and across the net. (One of the more civilized exchanges can be found here.) It’s one thing to try to show him wrong – which none have been able to do – and in the end, if there is no meeting of minds, to thank him for a stimulating exchange. But it’s quite another to charge into a comment box convinced, on the basis of a single post, that he must be out of his mind, when he’s been writing on the subject for years. At the well-known (I presume) The Catholic Thing, his comments to a David Warren post (concerning usury, and with which Zippy agreed) were deleted because he’d offered a link to his ebook. His free ebook. Ah, but they don’t allow advertising of any kind, anything that might distract from their own preeminence. What treatment from people of supposedly like religious mind. You’d never know we were all in this together.
There are probably various reasons for this kind of petty behavior, but I don’t wish to plumb their shallows. It’s enough to note what a sorry thing it is to discover that Catholics are as capable of it as any other human biped.
In the meantime, if you’re open to the possibility that certain transactions can still be described in our own time as usurious, that its practice is in fact very real, a very venal and grave iniquity, then you can read the FAQ at the link at the top of this post, or download it from dropbox for your Kindle in either epub or mobi format.
He knows how to turn a profit, but there is no self-aggrandizement in the enterprise. It’s offered as a service to Church and country. I repeat: it’s free. No charge. Let alone at interest.