Written by: J. Lee
We live in world in which transnational and organised crime are increasingly pervasive. The rise of technology, globalisation and increased ease of travel across borders has indeed facilitated transnational and organised crime. Law enforcement around the world rightly treats drug trafficking, identity theft, human trafficking, fraud, child exploitation and money laundering as serious crimes. However, what most do not realise is that financial crime is no less serious than such crimes, if not even more serious and insidious.
The Insidiousness of Financial Crime and the Fear It Instils
There is something about financial crime that makes people think it be something less serious compared to crimes against the person, such as human trafficking and child exploitation. Yet, there is something about it that people recognise to be seriously wrong, not merely because of the social and economic consequences, but rather something more fundamental. Human trafficking and child exploitation are undoubtedly serious crimes. However, simply because a crime does not directly affect the person does not mean it is no less serious than such crimes in terms of its morality.
The nature of financial crime is an insidious one. Unlike the crimes that people in general rightly condemn such as child exploitation and violence, what makes financial crime so insidious is its guise of harmlessness. That is exactly what makes it so insidious. People tend to think that is of lesser importance, if not nominal importance to fight financial crime since it only concerns finance not human lives. Moreover, where financial crime is recognised to be serious, it is regarded to be serious because of the social consequences and the treat to other businesses.
However, this I believe does not get to the root of financial crime which I believe is not merely concerned with regulation of markets and the economy, but rather pertains to that which is fundamental. Financial crime is immoral in and of itself. For reason, the author argues, it should be treated as a serious crime, in the same way that murder is treated as immoral in and of itself, such that it should be treated as a serious crime. In particular, the one financial crime which should be but is not is usury.
The Mystery of Usury
The word usury comes from the Latin word ‘usus’ which means ‘a use’. The term originally meant any charge on a loan, not just ‘excessive’ charge on a loan. The term was used to mean an excessive charge on a loan to justify charging interest on a loan.[1] Ancient societies, from ancient Sumerians to the ancient Romans, as well as the Medieval Europe were terrified of usury.[2] On the other hand, modern society not only thinks usury is normal and necessary for an economy to function effectively, but that usury is not even an issue. This raises two questions. The first is why is that ancient societies were not only fearful of usury, but terrified of it. The second question what is it about the modern mind that makes it so hard to understand why usury is wrong, and therefore, a matter of justice.
It is all too easy for the modern person to think that ancient societies were terrified of usury because they were ‘backwards’, ‘uneducated’, ‘uncivilised’ and ‘unenlightened’. However, there were indeed some ancient societies which would be considered by modern standards to be ‘advanced’ for their time, such as the Ancient Sumerians, with economies that were credit based, and not based on barter.[3] Sumerian stone tablets recording credit transactions have been found, providing evidence that such transactions did exist, even with one which recorded a person telling another to not charge him any interest. [4] So, what was it about usury that made this diverse range of ancient societies terrified of usury?
The Terror of Usury vs. the Enticement of Usury
Ancient societies recognised the bondage that it would cause to people, owing to the inability to repay debts to the creditor. It was not merely because people knew they would have to sell themselves into slavery to work off the debt. It was because people in general recognised that borrowing money and being in debt to another as morally wrong that a debtor selling oneself to slavery was seen as obligatory. This is in stark contrast to modern society which believes that each individual has a right to borrow money to whatever extent one chooses, and that the debtor has a right to pay off that debt according to how one sees fit.
Modern society believes that the two fundamental things upon which society should be organised are rights and liberties, not obligations. While there may be obligations recognised by modern society, those obligations arise only in relation to rights and liberties. There is no such thing as an obligation independent of a right or liberty in the eyes of modern society, unlike ancient societies, and also more ‘traditional’ societies which believe obligations, rather than rights or liberties, should be the fundamental norm for society to be organised.
As such, the ethic of modern society is that that which maximises the rights and liberties which are regarded to be of the higher importance is the right thing to do. Since borrowing money is regarded to be a right on part of the debtor, rather than that lending money to be an obligation on part of the creditor, it follows that usury is simply a charge that one pays for exercising one’s “liberty” to borrow money from another who provides that “service” of lending money. Therein lies the problem.
The standard view in economics and law is that borrowing money is the exercise of one’s liberty. However, is borrowing money really an exercise of liberty, or is it really bondage? One might argue that it is liberty because a person chooses to. However, little do such people realise that attached to the borrowing of money is the obligation in the moral sense, to repay that debt which subjects the debtor to the creditor. This subjection of the debtor to the creditor renders the debtor a slave to the creditor who has the moral ‘right’ to demand repayments of debts. Thus, borrowing money is not liberty at all, but bondage to the creditor.
What is so bad about usury?
Many people in modern society are puzzled and even shocked when people even raise interest on a loan, that is, usury, as an issue. Usury legitimises debt slavery, and is a means of making profit out of it. Although a person who chooses to get into debt ultimately chooses to do so, often in spite of interest repayments, it remains a wrong on part of the usurer to charge such usury, because it is to profit of the debt slavery of another.
Slavery need not be the literally trading of human beings in which property ownership is exercised over persons. What makes slavery an abominable practice, is that it keeps a person in bondage to another, as a means of seeking to reduce the dignity of another. Likewise in the case of debt slavery, it is a means of seeking to hold a person in bondage to another, also seeking to reduce the dignity of another.
Usury is precisely that which seeks to hold a person in bondage to another. It cares not for the person as a human being. It is cold, callous and cruel, making a profit out of the debt slavery of another. It is a crime.
[1] The Scholastic Analysis of Usury, J Noonan, 1957.
[2] Speech by Tomas Sedlacek, Carnegie Council for Ethics in International Affairs, ‘Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street’, delivered on October 5, 2011, at <https://www.youtube.com/watch?v=VteEjsYBZKA>.
[3] Debt: The First 5000 years, Chapter 2 ‘The Myth of Barter’, D Graeber, 2011.
[4] Debt: The First 5000 years, Chapter 2 ‘The Myth of Barter’, D Graeber, 2011.