The Natural Economic Order/Part IV/Chapter 5 E
E. The Usurer
It was never considered dishonourable to borrow an umbrella or a book. Even if you forgot to give these objects back the offence was condoned, the loser himself being anxious to find some excuse for the defaulter. Nobody kept a record of objects lent.
But how very different it used to be when someone wanted to borrow money, even if the amount was only a dollar! Both parties were embarrassed, and the loan-giver looked as if he were having a tooth extracted, or as if he were confronted with a grave moral offence.
Need of money was considered a disgrace, a moral stain, and you had to be very sure of a man's friendship before appealing to him when in need of money. Money! Why is the fellow in straits for money ? An umbrella, a shot-gun or even a horse I will lend you — but money? You evidently lead a loose life!
And yet it was very easy to be in straits for money. Business stagnation, unemployment, suspensions of payment and a thousand other causes brought everyone except those with a brilliant financial position at some time or other into straits for money. And those who were not blessed with a thick skin, those who shrank from exposing themselves on such occasions to a possible rebuff, came to me, the usurer; so I made my haul.
Those good times are now a thing of the past. With the introduction of Free-Money, money has been reduced to the rank of umbrellas; friends and acquaintances assist each other mutually as a matter of course with loans of money. No one keeps, or can keep, reserves of money, since money is under compulsion to circulate. But just because no one can form reserves of money, no reserves are needed. For the circulation of money is regular and uninterrupted.
When, however, an unexpected call for money does occur, you apply to an acquaintance, just as you apply to him for an umbrella when you are surprised by a thunderstorm. Thunderstorms and money embarrassment are, morally speaking, on the same level. And the person applied to will forthwith comply with the request without making a wry face. Indeed, he welcomes the opportunity, first because in a similar emergency he can apply to you, and secondly because it is to his immediate advantage. For the money in his possession loses value, whereas he will receive back the full amount of the loan from his friend. Hence his altered behaviour.
Still it cannot be said that people have become careless with their money, though money is not nearly so shy and retiring as it used to be. Money is, of course, highly esteemed, for it has cost work to earn. But it is not more highly esteemed than work, or than the worker. As a commodity it is no better than any other commodity, since the possession of money brings the same losses as the possession of a stock of goods. Commodities and labour are equivalent to ready money, and that means an end of my business.
The pawnbroker is in the same plight as myself. Anyone possessing some money for which he has no immediate use is now willing to lend it, without interest, against a pledge. For money has become inferior to the usual pledges. If you want ten dollars in a hurry, you need not slink through back streets to the pawnbroker's. You go to your neighbour to have the money advanced to you on a pledge. And any commodity that you happened to buy when you had a supply of money is as good as, or better than, ready money. Goods are money and money is goods, for the very simple reason that both are equally bad. Both are ordinary, perishable things in this valley of tears! All the bad qualities of goods have their counterpart in the loss to which money is subjected, so nobody prefers money to goods.
But for this reason labour is always in demand; and because it is in good demand, every man able and willing to work has, through his power to work, ready money in his pocket.
I tell you, the death-knell of usury has sounded!
But I am not yet going to admit defeat. I am going to sue the State for compensation. Money used to be, as it is now, a State institution, and I battened on it. I was therefore a kind of State official. By reforming money, that is, by forcible interference, the State has now ruined my trade and deprived me of my income, so I am entitled to compensation.
When the German landowners got into difficulties the State came to their rescue with the duty on wheat, which was introduced to relieve so-called agricultural distress. Why should not I also appeal to the State in my hour of need ? Is bread-usury any better than money-usury? Both of us, I the Jew, and you, the Prussian Junker are usurers — the one as base as the other. Nay, it seems to me that you are even somewhat baser and more avaricious than I. For it is bread-usury that very frequently creates the distress that drives people to the money-usurer. So if the distressed bread-usurers were relieved by a State subsidy, usury being thus placed under State protection, it is only fair to protect the money-usurer as well. For usury is usury, whether it is for land or for money. What difference does it make to the farmer whether he is fleeced in renting land or in borrowing money ? Both the money-usurer and the land-usurer will take exactly as much as they can get-neither will rebate one jot. If the landowners have a legal claim to rent, the moneylenders have a legal claim to interest. There is no escaping this logic by the assertion that there is a difference between money and land, between interest and rent, for there was nothing to prevent me from exchanging my money for land and so converting a usurer's grievance into that of a landowner.
So I shall base my appeal on the wheat-duties, and the usurer's cry of distress will not Pass unheeded by a justice-loving land.