Letter: Jesus Christ! — monetary justice? (1994)

Letter to the Editors from the November 1994 issue of the Socialist Standard

Jesus Christ! — monetary justice?

Dear Editors,

Scorpion claims, in your August issue, that the Bishop of Birmingham "should be coming out against the market in its entirety and not just its application to one of the necessities of life”. But one has to start somewhere; and the NHS. which we use in times of great need, is as good as anywhere.

You yourself, re Tony Blair, suggest that he is "Christian maybe, but socialist never. He openly supports the market economy and all that goes with it". I point out that Christians worship Jesus who said "Lend expecting no return" (Luke 6.35), in accordance with Old Testament precepts against usury (Exodus 22.25, Leviticus 25.36. Deuteronomy 23.19, Nehemioh 5.7-12, Psalm 15.5, Ezekiel 18.8-17 and 22.12).

Now there are markets and markets; and there may be room for one conducted justly. Some local "LETS" schemes aim at this. It is clear to us in the Christian Council for Monetary Justice (CCMJ) that the capitalist system which has evolved over recent centuries is at variance with Christian ethics; but the churches have largely lost sight of this since the last "top-level" denunciation of usury was made in an encyclical of Pope Benedict XIV in 1745.

The traditional teachings about commerce were endorsed by public opinion until self-assertiveness increased at the Reformation, and Calvin offered a limited acceptance of lending money at interest. This put Europe on a slippery slope, with profound consequences. Moneylending became attractive, and the banks gradually developed the practice of lending more money than had been deposited with them, thus acquiring a private monopoly of credit (or money) creation. Rich men who invested in industries based on the new technologies of coal, textiles, steel and steam-power extorted similar unearned incomes whilst they kept wages at semi-starvation level. Now money and shares have lost their physical meaning as tokens of value; but public acquiescence, fostered by the "haves", lets the rich use them to stay rich in a hungry world. Their "riches are corrupted", their "gold and silver” is "cankered” (Epistle of James 5.2-

3) 

(Coun) Frank McManus, 

Todmorden.

Reply:

We can't argue at this level since we don’t regard the bible as holy writ and so don't regard what it says (even when it doesn't say contradictory things) on any particular issue as authoritative.

We are aware that at one time Christianity did condemn the taking of interest on loans but abandoned this with the coming of capitalism, as is well documented in R.H. Tawney's Religion and the Rise of Capitalism. For us, this is a striking confirmation of the materialist conception of history which sees ideologies, such as ethics, religion and philosophy, as reflecting the economic basis of society — and of course capitalism could not function without banks acting as financial intermediaries between those with idle money and those needing funds to invest in production and the exploitation of wage-labour for surplus value. So Christianity had to adapt or perish. This is what the Protestant Reformation was all about, and eventually — a century or so late, as ever — the Catholic Church too followed suit and adapted to the new economic and social reality. To want to impose the old Christian anathema against usury on capitalism today is. in the literal sense of the term, reactionary.

Incidentally, acting as financial intermediaries is all banks can do. They re-lend money that has been deposited with them and make their profits out of the difference between the rate of interest they charge borrowers and what they pay depositors.

The illusion that banks can lend more money than has been deposited with them arose from the fact that they had to hold as cash only a small proportion of the money deposited with them, since experience had shown that on average over a given period depositors were only liable to want to withdraw a small proportion of the total amount deposited. The rest was available for re-lending as short- or long-term loans.

A "cash ratio" of 10 percent does not mean that a bank can lend nine times the amount deposited; it means that it has to hold only 10 percent of the amount deposited as non-interest bearing, ready cash. If banks really could lend more than has been deposited with them as Councillor McManus asserts, and so create wealth out of nothing, then this would be a miracle to rival turning water into wine or feeding the five thousand. 

Editors.