Tag: history

A Few Thoughts on Usury

First, it’s necessary to define usury, which is not synonymous with either “loan” or “interest”, although unsurprisingly, the modern definition has been corrupted and is incorrect. The American Heritage defines it thusly:

  • The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate.
  • An excessive or illegally high rate of interest charged on borrowed money.
  • Interest charged or paid on a loan.

Even in the precise wordings of the definition, we can see the ambiguity that is the red flag that a word spell has been cast. If both interest charged and paid on a loan are usury, then both the lender and the borrower are usurers. And if all interest paid is usury, then there is no need to bring the rate of interest into the equation at all, and any exorbitant, excessive, or illegal aspect is irrelevant.

Now, the history of economics, especially as recounted by Murray Rothbard, is essentially the history of relentlessly challenging the Catholic Church’s ban on usury. And in retrospect, it’s clear that this incoherence is the direct result of centuries of gradually chipping away at the concept through adulteration and expansion of the moral and legal permissibility of usury.

In order to determine if a proposed contract is usurious, only three questions need be asked. If the answers to all three questions are unanimously yes, then the contract is not usurious and it is a legitimate census agreement as opposed to an illegitimate and usurious mutuum agreement:

  1. Is interest charged on the loan?
  2. Has the borrower posted collateral providing security on the loan?
  3. Is the lender’s recourse for recovery of principal and interest, in a case of default, limited to the named collateral and only the named collateral?

The difference, as is made abundantly clear in this extremely useful and well-informed FAQ on the subject, depends upon the nature of the guarantee for the loan, and NOT the existence of any interest. This is why student loans, credit card loans, and even car and home loans that are backed by personal guarantees are wicked, whereas corporate bonds and convertible notes are not. It is also why usury is so uniformly destructive from an entirely secular sense, while allowing the usurers to hide behind the legitimate utility of debt that permits the healthy growth of agriculture and industry without inevitably giving way to a credit bubble and eventual economic collapse.

In fact, the etymological shift in the definitional focus from collateral to interest looks downright suspicious to me as a student of historical kakology.

When reading old books and documents on usury it is important to keep in mind that the word ‘loan’ in English translations is almost always a translation of ‘mutuum’ or the like. It refers specifically to loans secured by the personal guarantee of the borrower, sometimes called a ‘loan for consumption’. Not all modern ‘debt’ or ‘loans’ are secured by the personal guarantee of a borrower or borrowers…

St. Thomas Aquinas explains that usurious lending involves selling something which does not exist.  This is very counterintuitive to people indoctrinated in modernity, and yet obvious once you’ve set aside modern anti-realism about property and economic value. 

Another way to see that what is bought-and-sold in a mutuum does not exist is to observe that, under the terms of the contract, it is possible for the lender to fail to recover everything he is entitled to recover under the contract. The reason a full recourse lender is sometimes unable to recover what he is owed under the terms of the contract is because what he is owed under the terms of the contract does not exist…

Part of what made the usury doctrine clear to me when I first really began to grasp it (as opposed to – and I was as guilty of this as anyone – superficially dismissing caricatures rooted in anti-realist modernism) is that as an investor and entrepreneur, I see investment contracts involving peronal guarantees of repayment as inherently dysfunctional. If either the investor or the entrepreneur feels the need to throw personal guarantees into the mix in order to get the deal done, that is a major red flag that the proposed capital structure of the investment doesn’t make sense on its own terms. Usually this is because the property risks – the risks of partial or total loss of capital invested – in the investment are high enough to make a simple fixed-interest debt instrument inappropriate. Instead of personal guarantees the structure should be something like a convertible note, with equity upside, or it should be secured by a larger base of existing (though probably illiquid) capital. Basically, someone is trying to consume capital they don’t have and/or shift their own risks – the risks inherent in their own portfolios of property – onto third parties, personally.

Anyway, I haven’t really added anything new to the ancient understanding of usury here. I was just a guy who happened to be standing in the right spot to see what caused the train wreck, and I’m trying to explain what I saw in our common modern language as best I can. Like theft usury often does pay, at least in the short run, and it causes all sorts of damage that impacts different people differently and unfairly. Usury is inherently dysfunctional and morally evil, like theft. It may be mildly interesting sociologically that the Catholic Church was right for millennia about a simple core financial and moral truth that modern people, for all their putative economic and technical sophistication, have gotten completely wrong.

This may be useful in the current economic hard times, as those who are wise stewards of their resources are likely to have friends, families, and acquaintances coming to them and asking them for help that goes beyond the usual charity that does not require deciding between one serious opportunity and another. The thing that is important to understand is that while one can provide a loan, and one can legitimately receive interest on that loan, the collateral provided as a guarantee against default on it must be real, specific, and, of course, proportional to the value of the combined principle and scheduled interest of the loan.

For example, if a farmer who owns ten acres of land worth 60k borrows 10k from you, you cannot hold him responsible for repaying it. And while you can require him to put up his land as collateral as a condition for the loan, you can’t legitimately have him provide all ten acres he owns as a guarantee since the land is worth 6k per acre. In that case, two acres is sufficient backing for the principle and interest; a proper census contract tends to look a lot more like a normal sale with a time delay than a bank loan full of terms and conditions that are manifestly one-sided and predatory.

Now, all this being said, it is still possible that the traditional distinction made by Christendom between mutuum and census is insufficient without a periodic jubilee, as this selection from the 1911 Encyclopaedia Britannica shows:

In Athens about the time of Solon’s legislation (594 B.C.) the bulk of the population, who had originally been small proprietors or metayers, became gradually indebted to the rich to such an extent that they were practically slaves. Those who still kept their property nominally were in the position of Irish cottiers: they owed more than they could pay, and stone pillars erected on their land showed the amount of the debts and the names of the lenders. Usury had given all the power of the state to a small plutocracy.

The remedy which Solon adopted was of a kind that we are accustomed to consider as purely modern. In the first place, it is true that according to ancient practice he proclaimed a general seisachtheia, or shaking off of burdens: he cancelled all the debts made on the security of the land or the person of the debtor. This measure alone would, however, have been of little service had he not at the same time enacted that henceforth no loans could be made on the bodily security of the debtor, and the creditor was confined to a share of the property. The consequence of this simple but effective reform was that Athens was never again disturbed by the agitation of insolvent debtors. Solon left the rate of interest to be determined by free contract, and sometimes the rate was exceedingly high, but none of the evils so generally prevalent in antiquity were experienced.

It is informative to observe that Solon’s successful solution to the problem of usury-based plutocracy of the sort that we are presently observing all across the West was very similar, though not identical, to the later teachings of Aquinas on the subject. And it’s interesting to note that the Solonic imposition of a limit to the share on the property serving as collateral is exactly the same conclusion that I independently reached in the paragraph above, while his proclamation of a general seisachtheia is exactly what Michael Hudson prescribes for the global economy.

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Putin Calls Out Neoclowns

The Russian President knows perfectly well who Russia’s most vicious enemies are, and why they are pushing for NATO forces to engage directly with the Russian military:

You know that the word “elite” has lost much of its credibility. Those who have done nothing for society and consider themselves a caste endowed with special rights and privileges – especially those who took advantage of all kinds of economic processes in the 1990s to line their pockets – are definitely not the elite. To reiterate, those who serve Russia, hard workers and military, reliable, trustworthy people who have proven their loyalty to Russia by deeds, in a word, dignified people are the genuine elite.

Presidential Address to the Federal Assembly, Vladimir Putin, 29 February 2024

He’s referring to the foreign oligarchs who took advantage of the post-Soviet “end of history” era in order to financially rape Russia. Most of them have now fled Russia. As Yoram Hazony has pointed out, foreign elites are entirely common in the late stages of empire; the fact that the current US political elite is entirely foreign, with nary an American nor a Protestant to be found in it is a) not at all surprising and b) strongly indicative of the incipient end of the imperial USA that we already appear to be witnessing.

Other historians have noted this phenomenon of imperial foreign elites as well. I was reading The Cambridge History of the Byzantine Empire last night and came across this pertinent passage:

Such priorities and shibboleths are, however, best viewed against a background of barbarians frequenting the imperial court, ad hoc arrangements continually being made with useful potentates, and titles bestowed on outsiders with barely a smattering of spoken Greek. The proportion of families in the ruling elite comprising first-, second- or third-generation immigrants probably made up around a quarter of the total… Many were members, if not from the dominant family, of elites beyond Byzantium’s borders, external or internal.

Putin knows the treachery of them that say they are elites and are not…

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The Price of Belligerence

The Swiss politicians are belatedly beginning to discover that the benefits of strict neutrality were considerably greater than they’d believed possible when they were being wined and dined by the diplomats of Clown World:

We don’t expect Switzerland to be directly attacked in the next six months. But we must prepare ourselves for a new range of threats, while the old, conventional threats have not diminished. The likelihood of Switzerland being attacked has increased over the last two years.
– Viola Amherd, President of Switzerland

This is precisely why General Henri Guisan, the hero of Switzerland in World War II, made it very, very clear to all the politicians of his day that surrendering to Nazi Germany would be an effective death sentence for themselves, and that their actions would be irrelevant anyhow. When the then-President of Switzerland was cozying up to the Nazis, in much the same way that the current Swiss administration is now cozying up to the European Union and NATO, he “punished” two young officers who were caught planning to assassinate the president by promoting them, then announced that no government authority, including the Head of State, had the power to surrender to any foreign power on behalf of the Swiss nation.

The current Swiss government is the party solely responsible for increasing the likelihood of Switzerland being attacked over the last two years. It very foolishly, unnecessarily, and very, very stupidly, chose to violate the nation’s historic neutrality in order to take sides against Russia on behalf of NATO, the EU, and the United States. Now Russia, China, and the BRICSIA nations now regard it as “a hostile entity” and, quite reasonably, no longer recognize Switzerland as an impartial party capable of hosting the sort of peace talks it has traditionally hosted for generations.

Now the government is at an important nexus. Having taken the first step into belligerence, it is now being forced to choose whether to join the EU, the UK, and the USA in their sanctions on China or not, which would be a much more serious step in economic terms than the sanctions on Russia were. One sincerely hopes that the politicians will learn from their previous mistake of violating the nation’s precious neutrality, and have the wisdom to step back from the brink and staunchly refuse to join the denizens of Clown World in leaping into the inevitable abyss of the military and economic ruin that is already in process.

If you choose to enter the ring, you cannot be surprised when you get punched in the face. And if you choose to enter the ring against a massive opponent who is four times larger than you and all your supposed friends combined, you are absolutely, 100 percent, going to lose, and you are going to lose badly.

The winning strategy, as generations of Swiss leaders have known, is to stay the hell out of the ring.

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Americans are the New Indians

When you think about it, you can’t really say it was impossible for anyone to see it coming. The sins of the ancestors are observably being meted out to their descendants, and with an ironic vengeance when one considers the source of the core concept that is fueling all of the latest migration and demographic changes across the American continent.

As I can personally attest, it takes as little as two generations to go from being a member of a recognized tribe to strangers denying that you could possibly have any relationship to it. In the ages of chaos, the world changes much faster, and much more comprehensively, than most people have the capacity to imagine.

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Library and History Reminder

If you a) have not been charged for your Castalia Library, Libraria Castalia, or Castalia History subscription yet this month and b) were previously paying for your subscription using the Credit Card payment option and c) have not yet started a new subscription using the Mastercard/VISA option, please do so today or tomorrow.

Approximately 10 percent of History subscribers and 12 percent of Library/Library subscribers have not yet relaunched their subscriptions, and if you do so before the end of the month, you will not have to make a catchup payment next month. However, please note that if you are a subscriber whose Credit Card subscription was cancelled after you were charged this month, please do NOT relaunch your subscription with the Mastercard/VISA option until March 2nd.

If you’d like to switch to an Annual subscription, please note that with a new Annual subscription, you will also receive the Library book of your choice from the books that remain in stock. New is defined as either a) no previous subscription of that type or b) a shift from monthly to annual. This book offer does not apply to Annual renewals.

On the production side, the two volumes of The Cambridge Medieval History will arrive at the warehouse tomorrow and begin shipping on Friday, the pages of The Landmark Thucydides have been sewn, trimmed, and gathered preparatory for binding on March 8th, Pride and Prejudice is scheduled for binding on April 12th, and The Junior Classics leather volumes 7 and 8 are both bound and will be arriving at the warehouse for shipping out next week.

We will announce the next Castalia Library book on Friday. Pretty sure you’re going to like it.

Thanks to all of the subscribers who were so quick in responding to the situation, and in doing so, prevented us from missing a beat in the operations. Also, at the Castalia Library stack today is a fascinating excerpt from Sir Charles Oman on the first historical example of a fair fight between column and line, a comparison of the rival tactics upon which the end result of the Napoleonic wars ultimately turned.

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He is Now

Fred Reed explains how the Gazacaust is manufacturing anti-semites around the world.

What kind of human will intentionally bomb a hospital? Or a refugee camp? Is there nothing so foul that an Israeli pilot will not do it? What could be more cowardly? What would it take to get you, the reader, to bomb a hospital?

Of course it is not the scale of what Israel is doing, but the dogged, unrelenting coldbloodedness of it, its shamelessness. It would never occur to a military man, Israeli or otherwise, to say, “No, I won’t do that.” In my decades of covering the armed forces I found officers often to be long on physical courage but almost always to lack moral courage. Soldiers pride themselves on following orders and if the orders are to bomb a refugee camp, well, the pilot was just following orders. This is what Eichmann said, though he wasn’t a soldier. The cult of obedience removes all moral responsibility.

Note that Washington is as culpable as Israel for the slaughter in Gaza. Israel depends utterly for its survival on American support. If Washington told the Israelis to stand on their heads buck naked and sing Yankee Doodle in three-part harmony, or lose all American support, in two minutes they would be upside down and wailing. The killing continues because Washington wants it to continue.

The historically literate will note that the mass deliberate bombing of civilians is not particularly Israeli, but an invention largely made and certainly perfected by the United States. The British-American air war against Germany targeted civilians. Everyone knows about the firestorms in Hamburg and Dresden, and for that matter Hiroshima and Nagasaki, though countless other German cities were so targeted, with Tokyo being firebombed to burn thousands to death. Germans who lived through this tell of exactly the results seen in Gaza, rubble, fire, dead and dying children. Plus ca change, plus ca doesn’t.

The eternal cry of the Jew: “The whole world hates me. What’s wrong with the whole world?” Well, here is an answer that will serve for a few decades. Before Gaza, there was around the web the usual low-key hostility to Jews, like the 4K background radiation. Now nice liberals make venomous comments about how Hitler should have finished, etc. For all I know, ninety percent of American Jews may oppose the killing, and certainly many do, but this doesn’t seem to matter. Selling the Holocaust will be harder for a few years. It will make no practical difference.

It is easy to see why. A friend, conservative, by no means a milquetoast, for a while watched video from Gaza. He saw a little girl, horribly hurt, legs gone but still alive, with adults, apparently her family, going stark bugfuck crazy. The child would not live for more than a minute or two, massive femoral bleeding being of short duration. My friend began sobbing, not his style.

Never an antisemite, he is now.

Here We Go Again, FRED REED, 24 January 2024

Being historically literate, I’ve never given a fragment of an airborne rodent’s posterior for the so-called “Holocaust” or bought into the endless pity party of things that happened eight decades ago. I even pointed out, correctly, that no one under the age of 40 is emotionally moved by appeals to the Holocaust, the endless Boomerism of the mainstream media narrative notwithstanding, in a public debate with a former British Member of Parliament.

But the Gazacaust is happening right now. The pointless sacrifice of hundreds of thousands of Ukrainian lives on the altar of Clown World by the Kiev regime is happening right now. The foreign invasion of the United States has been happening right now. These are the events that will shape the future, not a shameless, outdated appeal to victimhood that somehow still dominates the political scene and dictates the laws in the USA, the UK, and the rest of Clown World.

No matter how one wants to believe oneself to be a good person, subscribing to all the right beliefs and approved narratives, sooner or later, everyone will be forced to make the decision whether they are going to recognize evil to be evil, or if they are going to declare it to be good.

DISCUSS ON SG

The Cost of Cowardice

The failure to cross the Rubicon is proving to be expensive for President Trump:

Donald Trump and his family business have been fined a devastating $364 million for inflating property prices worth following a blockbuster fraud trial in New York. Judge Arthur Engoron also banned the former president from serving as the director of a company in the state for three years in the crushing ruling issued on Friday that puts the future of his business in the Big Apple in doubt.

His son’s Eric and Don Jr. were fined more than $4 million each and his former CFO Allen Weisselberg was fined $1million for the scheme to massively inflate prices of his properties including Mar-a-Lago to get favorable loan terms from lenders.

Trump has up to 30 days to come up with the money, which with interest could top more than $400million, or secure a bond of around $35 million.

It’s all about the Rule of Law, folks. The Rule of Law and democracy. It’s all about the Rule of Law, democracy, and fighting antisemitism. And, of course, transgendering any children who manage to avoid getting aborted. And vaxxing those who manage to avoid getting transgendered.

Do you still think God blesses America? Because, at least from afar, it looks a lot more like a place that has been profoundly acccursed.

You’ll cross it now… in chains.

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A Library Survey

We already know what the next book in the Castalia Library/Libraria subscription series will be, and will announce it on the first of March. We’re also working on obtaining the rights to some works we are very confident will please everyone. And we know the two volumes of A SEA OF SKULLS will be in the mix later this year after we get the regular hardcover edition out. But we’re interested in hearing from you what other books might be of interest to you this year; here are some of the books we’re considering.

We are also offering a first look at some very rare books indeed.

Also on the Library stack today is the seventh and final part of Oman’s first chapter. And while I agree with the great historian with regards to the chief lesson of history, thanks to our advantage of 95 years of hindsight, I think we can safely conclude Oman’s hopes for the “new and vigorous age” were dashed to pieces, and that the Pessimists were entirely correct about the prospects for modernity.

From the outlook of the ordinary man we are no longer at the end of a feeble and moribund Christendom, but at the start of a new and vigorous age, full of ideals, moral, cultural, philosophical, religious, and materialistic. As I said in an earlier page, it would take a whole book to discuss the question how far the Revival of Learning, the Reformation, the discovery of America and the Cape Route to the Indies, or scientific discovery which knocked the Geocentric Theory on the head, were each of them responsible for the new historical perspective of the civilized world. But the change was complete and astounding; and the foundations of the modern ways of thought had been laid, while the “Seven Ages” in their depressing series had dropped out of men’s conception of the Universe. A new visualization of the world had begun…

The Pessimist, incidentally, has enjoyed one of those periods in which he is able to snarl “I told you so” to a disconcerted world. But all down history the Pessimist has never had the last word. I prefer to range myself with the Optimists, and hope to survive long enough to see another vista of hope before my own generation has passed away.

I know not whether the change of perspective will come by means of the League of Nations, which has provoked so much enthusiasm in so many quarters, or whether it will be the result of a saner nationalism which can combine true patriotism with a proper regard for the rights of one’s neighbours. All I know is that the world-mind works by action and reaction, and that a swing of the pendulum in one direction will ultimately be followed by a swing in the other.

That to my mind is the teaching of history.

Man’s Outlook on History, Sir Charles Oman, 1929

Needless to say, the globalist neoliberal modernity that has come to be known as Clown World did not turn out to be an improvement upon Christendom, its moral, cultural, philosophical, religious, and materialistic ideals notwithstanding.

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Bad Choices Abound

Big Serge invokes a chess analogy to explain the very difficult choices being faced by Israel vis-a-vis the Arabs in Palestine and by the USA in the Middle East and in Ukraine.

The basic geostrategic problem facing the United States (and its ectopic paramour, Israel) is that the ability to conduct asymmetrically inexpensive countermeasures has become exhausted. The US can no longer prop up Ukraine with surplus shells and MRAPs, nor can it deter the Iranian axis with reprimands and air strikes. Israel can no longer maintain the image of its impenetrable preclusive defenses, upon which its peculiar identity depends.

That leaves the difficult choice between strategic retreat and strategic commitment. Half measures no longer suffice, but is there will for a full measure? For Israel, which has no strategic depth and a unique world-historic self conception, it was inevitable that commitment would be chosen over strategic withdrawal (which in their case is much more metaphysical than purely strategic, and amounts to the deconstruction of the Israeli self conception). Thus, the immensely violent Israeli operation in Gaza – an operation that could never have gone any other way, given the density of the population and its eschatological meaning.

America, however, has a great degree of strategic depth – the same strategic depth which allowed it to withdraw from Vietnam or Afghanistan with few meaningful ill effects on the American homeland. The possibility most certainly remains for a prosperous and secure America long after withdrawing from Syria and Ukraine. Indeed, the famously chaotic scenes of frantic evacuation from Saigon and Kabul represent remarkably clearsighted moments in American foreign policy, where realism prevailed and losing chess pieces were left to their fates. This is cynical, of course, but that is the way of the world.

This is a standard motif of world history. The most critical moments in geopolitics are generally those where a country faces the choice between strategic retreat or full commitment. In 1940, Britain faced the choice between accepting Germany hegemony on the continent or committing to a long war which would cost them their empire and lead to their final eclipse by the United States. Neither is a good choice, but they chose the latter. In 1914, Russia had to choose between abandoning its Serbian ally or fighting a war with the Germanic powers. Neither seemed good, and they chose the latter. Strategic retreat is hard, but strategic defeat is worse. Sometimes, there are no good choices.

The Age of Zugzwang, Big Serge Thought, 14 February 2024

It’s an excellent historical analysis and the whole piece merits careful reading. However, the one element that is being left out of the equation is The Empire That Never Ended. Which is to say, in modern parlance, Clown World. It’s simply not possible to analyze the decisions of the US government to employ military force in the American national interest when the individuals making those decisions clearly do not prioritize the interests of Americans or even the US citizenry.

The obvious and growing divergence between the Kiev regime and the surviving Ukrainian people being the relevant case in point here.

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The Thucydides Trap (Castalia Edition)

Forget great power competition. The real Thucydides Trap is the one that Castalia History has laid for unwary book collectors and armchair historians. If you’d like to see the final stamp design of the first book in the series, you can see it at Castalia Library. It’s scheduled for binding the week of March 8th and it is a behemoth of a book.

With regards to the fourth book in the History series, in the latest selection posted, Sir Charles offers profound observations about the past that reflect directly on our future. Consider how well his description of a transformed political perspective applies to the post-WWII United States and what that implies for the future of its empire.

Two centuries and a half later there was a good example of political perspective being upset for a whole nation, not by catastrophe, but by sudden expansion. I allude to the Greeks, and the result on their view of the world caused by the exploits of Alexander the Great. The Macedonian conquest of the East revolutionized the relations of the active and high-cultured little states of Greece, both with each other and with the outer world. Civic patriotism received a blow, but in return the establishment of the new Macedonian Empire offered many compensations both to the state and to the individual. If a man consented to forget that he was an Athenian or a Corinthian, and merely to remember that he was a Greek, what was more inspiring than to see that the old Hellenic genius for colonization was not extinct; to behold every land from the Aegean to the Indus covered with Greek cities as large and splendid as any that had ever existed in the old motherland…

While the empire of the Eastern world was being won by the Tigris, fights at home between small armies for a strip of plainland or a border fort seemed contemptible and absurd. For the Greeks who had thrown themselves into Alexander’s great adventure the national perspective had suddenly enlarged from a view of the Aegean to a view as far as the Oxus and the Indus. The Hellenic world had been increased twenty-fold. Why discuss constitutions any more, or indulge in petty faction-fights, when the man with a brain and a sword had the universe at his feet? The vision was illusive, and ended in a veneer of Greek civilization imposed on the East for a few centuries, at the cost of the exhaustion and debasement of the civilizer.

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