The Machine (VI): Usury

Usury, properly defined, is any credit in which the creditor does not share the risk of the activity that the loan finances.

Everyone can understand intuitively, though rarely explain it in detail, how modern techniques are qualitatively different from ancient techniques; how the world before and after them differs in several important, indeed decisive, ways. Historically, it is easy to point to the Industrial Revolution as the originator of the world of machines in which we live: after it, our world is not just a collection of all techniques, but forms a total and totalizing nexus. It was almost immediately apparent in the middle of the 19th century that the factory was one thing, but the factory system another, and that it was this second that had been realized and that characterized the era. So that, as we have already mentioned several times, the Machine – understood as this nexus - is the substrate of modern existence, with almost no experience being possible outside of it, only through it, with fewer and fewer exceptions as time goes on.

Although we have already explored the distinction (which is mainly between technique and machine) and its implications, we have done it from a technical point of view – that is, from the point of view of the techniques in themselves. But now we need to look at the distinction from a social perspective in particular to achieve the aim of this text, which is to explain how modern technique is a result of, and only possible with, a usurious financial system. The reason for doing so is that there is much 'traditionalist' opposition to usury, but comparatively little understanding of its implications in the technical realm – so that the consequences of the abolition of that financial system, which is a moral imperative, are not taken into account. And they should, especially by those who intend to maintain part of the system (the machine) by abolishing one of its prerequisites (usury).

There are three factors or principles that make it possible to clearly distinguish the modern technical milieu from the ancient one.

In the first place, modern technique is the result of the elevation of the principle of efficiency to the primary concern of humanity. It is a total rationalization of means and a single focus on the quantitative aspect (and therefore the machine is the correct image to understand it, since it is independent of the man, which is the origin of qualitative assessment). What we mean by this is that, in pre-modern societies, the ends are as important as the means, and in the realization of a means (of a technique) account is taken not only of its possibility and the power it confers, but there are always and everywhere considerations of another order – ethical, moral, social and ultimately theological and metaphysical – and these are based not on the efficiency of the technique itself, that is, on the possibility of achieving the multiplicity of objectives it proposes to achieve, but primarily on an evaluation based on principles, that is, whether the ends are proper and should be pursued or not, and only then, what techniques should be used or not; not only whether the means are proper for the ends, but also whether the means themselves have no external consequences beyond those ends, even when the ends are considered beneficial. One need only consider the vast quantity of myths and legends dealing with technique to verify that the ancient consideration of means is completely different from the modern.

The same assessment of principle applies in traditional societies to other forms (today officially regarded as non-existent) of realizing power over matter, as is the case of magic, which, as we have seen previously, is in the same exact domain of what is today erroneously designated as 'technology'. This principle is simple to prove: the main techniques used in the Industrial Revolution were not discovered at the time, but had been known for several centuries – simply until then, social institutions had the authority and power not to allow their use, rationalization and, above all, democratization. The best example of this is the steam engine, which is known to have been invented in the 1st century AD, but which until the 18th century remained unrealized and unused for reasons external to its efficiency and the objectives it intended to acomplish. Other important examples can be given: the printing press was originally invented in China millennia before it was rationalized and democratized in the West. In Japan the knowledge and use of gunpowder and the manufacture of firearms was introduced by the Chinese in the 13th century and then by the Portuguese in the 16th century – and for a century after both events, Japan became one of the biggest and best manufacturers of firearms in the world. However, after this century, and observing the social effects and disruption of traditional society created by them, the decision was taken not only to stop their manufacture but to banish their use altogether (this story is told in a small but great book called Giving Up the Gun by Noel Perrin - and it is not spurious to relate this story to the parallel story of the adoption, and later rejection, of the Christian Faith by the Japanese, as Faith and Technique unfortunately came together in this case and were as violently rejected as they had once been enthusiastically embraced). In short, the decision to go ahead with a technique or to suppress it is not taken in a traditional society purely from the point of view of technique, but primarily for reasons external to technique. Since the Industrial Revolution, however, no other consideration has been allowed other than efficiency, let alone a qualitative assessment of objectives.

Secondly, modern technique is characterized by indiscriminate use – what can be called a democratization, and which is not coincidentally simultaneous with other forms of democratization. The firearm and the sword provide a good point of comparison: while the sword requires specific skills and training from its user, the firearm is, as it is often called, the 'great equalizer' – anyone can use one with minimal training and without requiring great skill or effort. The same, indeed, could be said for any piece of machinery that replaced craftsmen with factory workers. This democratic implication, of indiscriminate use, has a standardizing effect on its uses and, therefore, on users. European, Arabic or Japanese swords were qualitatively different, and these differences were the product of different circumstances and natures, and therefore also led to different fighting techniques. The machine gun, on the contrary, and whatever its model, maker or place of manufacture, can and is used in exactly the same way by the most disparate peoples – even by children – and with the exact same effect. Another example is the disparity between traveling on a horse, a camel or a llama, and in contrast the uniform and uniforming characteristics of the automobile, whose effect transforms all spaces in the exact same way and following the same exact model, as can be seen the sprawl of any modern city in any part of the world. And not only is modern technique independent of man, it is also independent of the rest of Creation – an engine or a computer work in the exact same way whether they are used in the Siberian taiga or the Ecuadorian rainforest.

Third, and finally, and probably the simplest feature to understand, modern technique requires large-scale integration and cooperation, across vast distances and by unrelated peoples – that is, modern technique depends on a system, and in particular a system whose parts have no natural and traditional (ethnic, linguistic, religious) relations. The absence of such a system would make modern techniques impossible. If the industrial system were to collapse, modern techniques would be those that, even if the knowledge of how to build and repair them were maintained (which is dubious), could no longer be built, repaired or even operated, since their existence depends on the system (an electrical grid, an international transport system, large operations to extract primary goods, etc). In short, the modern technical system is like an ouroboros, it feeds on and from itself, and the parts cannot exist without the whole – and is as much dependent on this human construction as it is independent of Divine Creation.

Finally, it remains to be said that this definition is not always directly applicable. There are certainly cases that are difficult to categorize, and it could be said that it is more a spectrum, like color, than a black and white division. As with all spectrums there are two extremes. We might say, for example, that fire is at one end of the spectrum and nuclear bombs at the other. However, it is also possible to say that today it is practically impossible to eradicate nuclear bombs completely (not least because their destruction implies other problems, which only underlines the dead end in which modern man has found himself in his unreasonable pursuit of technical advancement). But this does not make the analysis insignificant, nor the concepts trivial. It is still necessary to keep in mind that two opposites exist and that in between decisions have to be made, even if the decisions cannot be made at an institutional level – which is obvious, technique being the classic (and in fact original) example of the ‘arms race’ conundrum. Choice continues to be possible to some extent for each person, and in each situation, although this freedom is increasingly limited (who today can live in society without, for example, a computer?). But such difficulty demonstrates that the machine system is already a prefiguration and preparation of the final system, the Mark of the Beast, whose implementation is now perfectly perceptible even by many who have never considered the wider implications of the industrial system.

Having then defined modern technique we can proceed to explain how it is the result of, and only possible with, a usurious financial system – especially in its systematic aspect. But before explaining it, it is necessary to offer a precise definition of usury, since this concept has been highly distorted so that its definition is so vague that it does not really serve as a definition at all. The vague 'definition' is that of an 'immoral' loan that 'unfairly' enriches the creditor. The advantage of this ambiguous and imprecise 'definition' is that it allows its proponents to relegate the discussion to general questions of 'ethics' and 'justice'. It is therefore necessary to reject this imprecision, and the definition we use is both precise and historically correct – by which we mean that all ancient religions and civilizations used this definition, and that only in the modern West has it been abandoned for the ambiguity previously mentioned.

Usury, properly defined, is any credit in which the creditor does not share the risk of the activity that the loan finances. The question, contrary to what is also commonly brought up in the discussion, is not of interest in itself. Interest is simply the price of time preference and risk, since a good today is more valuable than a good in the future and a good whose existence is certain is more valuable than a good only in potentiality. Interest is not, therefore, a misappropriation or a violation of Natural Law in itself, but only when the creditor does not share the investment risk and is then guaranteed a priori the return of the loan with interest. This will become clearer when we look at the issue from the point of view of barter.

Since modern technique requires a complete subjugation of society to the principles of efficiency, a financial system is then needed that allows the discovery of the most efficient means - that is, a system of trial and error, and this process has very high costs and, moreover, it has no real end, and needs a constant and expanding flow of capital and investment. The number and frequency of trial and error required to find the most efficient form of production in a market economy can only be sustained by constant currency inflation and the borrowing of that new currency through the banking system, as the risk is too high to finance all attempts (most resulting in losses) with real savings. It is unlikely that one would invest real saved capital when sharing the risk of such a volatile discovery process. And it is not necessary to guess, but it is logically certain that most loans would not be made, given the simple fact that such loans are actually founded only on lowering interest rates, with the creation of money to back them up. It is therefore also necessary, to keep up with the high number of trials and errors, that there be a transition from a 'total reserve' system – in which, even without sharing in the risk of a project, only real capital is invested in the discovery process – to a 'fractional reserve' system, where money is created and borrowed without any relation to real savings. Using the precise definition given above, it is obvious that the 'fractional' system is necessarily a form of usury, since there are no real savings behind the credit, and therefore, the risk is non-existent, whatever the legal framework of the matter.

Without usury, and without its necessary relationship to the 'fractional reserve' system, credit as such would be a minimal part of the economic system – as is the case in all traditional societies. If the creditors had to share the risk of the financed initiative, it is obvious that credit would not be, as it is today, the main driver of economic activity, neither in production, and much less in consumption. Before the modern era, this situation of total dependence on credit was practically non-existent, but in the few places and times that it did occur, it took the exact same path it takes today and for the same reasons.

China had the first recorded case of hyperinflation with its discovery and use of paper, first leading to rapid technical expansion in various areas and especially used for military purposes, eventually resulting in a sharp loss of currency value due to limitless creation of banknotes. It is important to mention that the substitution of paper notes for real goods cannot be carried out overnight, and that it is rather a necessarily slow and hidden replacement process: firstly, paper notes are only titles to real goods (generally precious metals) which are deposited, and which are thus more convenient to exchange; over time, the banknotes themselves start to be perceived as the goods they are supposed to represent, creating the possibility of manufacturing more banknotes without the corresponding goods existing. This, in short, is what inflation is all about.

Apart from this distant example (and, it should be noted, directly linked to a technical innovation, paper), inflation before modernity was not only rare, but also limited, due to the simple fact that paper currency did not exist, and that the medium of exchange remained a real good, such as gold or silver, rather than a title to that good, such as paper banknotes. Although there has been currency devaluation on several occasions, the potential for inflation was ultimately very small, as it was impossible to simply create currency (with the exception of cases where new sources were discovered, as with the 'discovery' of the American continent), but instead it was necessary to take the existing currency and reduce the amount of gold or silver, something that was easily identifiable – both by weight and appearance (one of the most common practices was to make holes in the coins), which usually led to states make the use of the devalued currency mandatory. So technical constraints played an enormous role in limiting currency manipulation and the use of artificial credit, and as such in the stability of the monetary system, even outside the moral issue of usury.

All this changed with the democratization of the printing press in the West, which allowed the same fraudulent practices seen in ancient China when paper was invented and, in particular, allowed devaluation to remain hidden for longer periods (and contrary to what previously happened with gold or silver), and thus leading to long periods of inflation and an increase in the availability of artificial credit. It should come as no surprise that the first case of hyperinflation in modern times occurred in the aftermath of the French Revolution, through the creation of bonds related to the looting of Church property, which were inflated by both the State and private counterfeiters, again illustrating the link between technical development, usury, fraud, revolution and war.

With this historical context it is useful to consider the ontological aspect of credit, for lack of a better term. Credit is essentially a function of saving. The best way to understand it is to remove currency from the question, that is, a means of exchange, and think in terms of barter: this way it is possible to understand that to lend a good is to forgo its consumption; it must be saved, and only through fraud (even if institutionalized) is it possible to escape this reality.

If a man saves some beans he can then lend them to another man, who has a plan for sowing the beans and who after the harvest is able to repay the initial loan with interest and make a profit for his own consumption or for future cultivation. It is then clear that the purpose of saving is always consumption in the future – the creditor can consume the same beans tomorrow that he saved today, or consume beans that exist in the future through the enterprise in which he invested (the sowing of more beans). As such, credit can only exist naturally based on savings, and saving is nothing more than renouncing consumption today for the sake of the future. In this context, usury would consist of the legal obligation of those who borrowed to return the loan with interest even if their activity had not generated enough to pay it – obviously leading to ruin. Thus, usury encourages lending, since success for the creditor does not depend on the activity financed, and therefore the creditor does not need to carry out any investigation into the purpose or to assess the risk of the loan, since it does not incur any risk in the first place. If the success of the lender was tied to the success of the borrower the lender would investigate if the borrower is a trustworthy man, if he has tried similar ventures before and been successful, if his plans are well made and not fanciful, etc. But with usury, the lender has no need for any consideration, since his return is already assured – if not by the success of the venture, by the force of the law.

Credit can be seen as a form of time travel – accessing the future in the present. We can then see the destructive effects of usury, and the indiscriminate use of credit that it promotes. Unlike any healthy society in which present consumption and comfort are sacrificed for the benefit of future generations, a society that lives on credit, which again is only possible through usury, is a direct attack on future generations, taxing the future for present consumption. It is therefore not surprising that since the last links of the monetary system to real goods (gold and silver) were destroyed, real wages have continued to fall and ever more precipitously, as the future is increasingly taxed from the present. And so the comparison with barter is no longer possible, because money is no longer linked to any reality in the present (savings) but only to an expectation on the future. This expectation is just an unfounded hope that investment subsidized by usurious credit will bring about sufficient technical advances (i.e., productive capacity) to compensate for this imbalance between real goods and credit. However, and even leaving aside all issues related to usury, this can never be achieved – since, by the very logic of the system, technical development is not evaluated from the point of view of ends, but only a rationalization of means. Most technical innovations, and especially those aimed at the public, do not exist to repay the borrowed future goods, but only to increase consumption in the present at the expense of the future, exacerbating the problem. Just think of the amount of goods completely disconnected from production and almost exclusively oriented towards entertainment and leisure (mobile phones, cars, video games, televisions, etc.), which make up a large part of the modern economy (not just in themselves, but in all industries that exist to make them possible). Not only were such products developed through credit, but their consumption itself is largely based on credit, without generating any added value.

In our barter example, the lender would have saved no beans, and the borrower would make a binding promise to pay back the beans he borrowed plus some interest, but the borrowed beans (which, in fact, do not exist) would be for consumption only, and soon there would be no future beans to pay the loan or the interest. Thus it is possible to see how the present system is a destructive illusion, which goes against the most basic natural order of providing for the future, and instead destroys the future to finance the present. The immorality of using state power to enforce actual payment on a loan that is based on nothing is just the icing on the evil cake. And if the effects are more severe in a 'fractional reserve' system, it is not possible to separate this advance from the legalization of usury, which encourages risk-free investments and which, eventually, creates pressure for the system to abandon 'total reserves'.

Technical accelerationism and the continued expansion of money (because there are not enough real savings to provide the market with enough credit for production, let alone consumption) is necessary to keep the usurious system intact, and it is no coincidence that both, although generally unrelated in the mind of most, have the exact same trend of exponential growth, and of extreme volatility and fragility. Both modern monetary practices and technical advancement exist in a race against time to expand or implode. It is common knowledge that large companies (and states alike) operate with huge deficits, needing constant injections of liquidity to operate while looking for the next technical breakthrough that will allow them to push the problem further into the future, but such injections are completely fictitious, they are not based on real capital, and as such, they only accentuate the problem more and more, resulting in inevitable corrections which become more and more severe and that eventually culminate in hyperinflation with all its horrible results, direct and indirect.

Although a 'fractional reserve' system where usury is illegal is theoretically possible, this has never been observed, for the simple fact that it is the lack of risk on the part of the creditor that gives the impetus for such a system to be implemented in the first place; and secondly, the 'fractional' practice itself is only a technical equivalent of the legality of usury - since the credit granted is not founded on saving, but is created to be lent, not actually risking anything; if the credit is not returned, the creditor is left in the exact same position; and if it is returned, the creditor has earned interest out of nothing.

In the absence of usury and the 'fractional reserve' system that always follows it, the vast majority of the technical advances that characterize the industrial age would not have happened. It is not by chance that the ancients considered usury to be 'against nature', that is to say, sterile – for the various reasons that we have listed, and in particular because of the character of stealing from the future to pay for the present – and it is also not a coincidence that the technical world which results from this usurious system shares, to a large extent and more and more as it advances, that same characteristic of sterility that we see everywhere, and that the same technocrats are at the forefront of these other, more obvious manifestations of an attack on the Natural Order.

It is therefore completely spurious to be vaguely and morally against usury without considering its intimate relation with the system of the Machine: one cannot exist without the other, one would always lead to the other, and abolishing one is abolishing the other. Whether such an abolition is possible, or desirable, is for the reader to decide, but the implications should be known, considered and freely chosen. Otherwise our moral stance is but a vague feeling of moralism.