PREFACE ON USURY - From: THE MODERN IDOLATRY

From: THE MODERN IDOLATRY being An Analysis of Usury and THE Pathology of Debt, Jeffrey Mark 1934


PREFACE ON USURY

   The aim of this book is to show that the causes for the present widespread individual, industrial, political and international unrest must be sought in the financial system, and in that only. More specifically, that this system, under whose archaic dictates we all necessarily live and suffer, is based on and entirely motivated by usury — which is itself the genesis of all hatred, fear, suspicion and war.

   In order to do this, a somewhat detailed examination of existing financial processes has been undertaken. This has hitherto been considered the exclusive province of financial and economic experts. It is imperative to-day that it should be regarded as a matter for everyman’s judgment.

   The fact that certain sections of the book are somewhat technical, does not mean, therefore, that it has been written solely as a challenge to financial theorists. This book is written for the ordinary man, and its main implication is sociological.

   The present intolerable position, which the writer believes to be merely the preliminary stage in the complete breakdown of the monetary system throughout Western civilization, is the living ‘ reductio ad absurdum ’ of a condition which is implicit in all forms of sociology under usury.

   Modern civilizations, as well as those of the ancient world, have been built up on and were or are being broken by usury. The expansion of a nation or empire depends fundamentally on the expansion and maintenance of its debt-structure. So long as interest-payments can be made with respect to an increasing debt-structure, national or imperial entities can be supported or extended. In the last analysis, however, these interest-payments can only be transferred through the complementary degradation of certain classes within these entities and the commercial exploitation of retrogressive or undeveloped countries outside them. The spectacular rise of communism and socialism in the last eighty years shows that this internal exploitation is now receiving organized opposition on a world scale. The position with regard to external exploitation will be discussed in some detail in the succeeding paragraphs.

   For hundreds of years, the civilizations of the West have lived at the expense of the East. Interest-payments due on Western capital have been made possible by the creation of slavery conditions in the Eastern countries. The jingoistic paraphernalia of Western military power, state, church, and law derive from and are entirely subordinate to the financial and commercial processes which brought about those conditions- For if, in the military campaigns which extended the areas for Western exploitation, the Bible has followed the sword, both priest and soldier have followed the usurer.

   In this century, the Eastern countries have come to an awareness of these financial and commercial processes, and are now prepared to accept, to some extent, the continuance of slavery conditions, at the dictates of financiers, so as to further a new and aggressive policy in the world market, with respect to both industrial and agricultural products. In this policy, the most powerful weapon of the East is the low standard of living to which its workers have become inured during centuries of Western oppression. They are, therefore, able to produce and sell at prices with which the West cannot compete.

   The chief advantage '' of the East, that is to say, in the coming suicidal struggle for economic supremacy, derives from the miserable conditions which have been created there by Western domination. Under usury, it is the exploited who finally exploit the exploiters, until the wheel once more comes full circle and the same punitive justice again comes into play. The rise and fall of civilizations are but episodes in the history of usury.

   There are two forms of usury. The major form is that represented by bank loans, and the minor form by the creation of interest-bearing savings and investments which go to make up the debt-structure in every country.

   A fact which is not, but which should be, common knowledge, is that all money in and out of circulation, now comes into existence as an interest-bearing loan in favour of the banking systems of the world. This major principle of usury is administered by an international organization which functions through the central banks and large financial agencies of Western civilization. The minor form of investments is sporadic and individualistic — even when controlled by international commercial combines — but derives from, and, in practice, is dominated absolutely by the major principle of bank loans.

   It is important, therefore, to realize that we are all usurers — from the child who deposits his mite in the penny savings-bank to the international syndicate of money-lenders which operates through the Bank for International Settlements and the League of Nations machinery at Geneva — and that the universal adoption of this evil and disruptive principle, against the teaching of all the highest philosophical and religious examples, is ratified by common consent and full legal authority.

   Psychologically, usury is based on the desire to get something for nothing. In practice, it promotes a process of interference, by the accumulation of debt-claims, in the flow of the medium of exchange, i.e., money. The spending of money is, at one and the same time, the promotion of this flow and the creation and consumption of commodities. The progressive accumulation of savings and debt-claims (misleadingly called capital) is the damning up of this flow and the progressive restriction, first of consumption, then of production, and so, finally, of both. The secondary flow created by the investment of debt-claims can only be maintained by the indefinite extension of the area for exploitation.

As the world is a self-contained entity, and as we are all simultaneously both usurers and consumers, the progressive accumulation of debt finally operates to restrict the creation and exchange of material and psychological values throughout the whole of society. Debt, in fact, is nothing more or less than a fantastic abstraction, called out of the deeps of man’s subconscious, ultimately to confound debtor and creditor alike.

   For, as statistics go to prove, debt automatically increases at a faster rate than production, so that there inevitably comes a time when goods go into pawn faster than they are produced. When these countries (e.g. of the East) which were formerly exploited to pay a large part of the interest-claims due on accumulated debt, not only show less disposition to do so but begin to establish external debt-claims of their own, an impossible position of tension is created. This attempts to resolve itself by a desperate competition for the disposal of mounting “ surpluses ” in the world market, so that foreign currency for the payment of interest on external debt can be obtained. The result of this is, firstly, an accelerating competition in internal wage slavery in all countries concerned, and, secondly, when these conditions become insupportable, revolution or war. The World War itself was not a cause but a symptom of the present decline.

   In the past, this progressive accumulation of debt-claims has brought about the ruin of civilizations as single units. Three civilizations in the American continent rose and fell. Babylon, Egypt, Greece and Rome fell. But now the nations are so interlocked by modern means of communication and transport, by international debt and exchange parities, that a civilization which encompasses the world is threatened.

   The reconstruction proposals in Part III of this book are therefore concerned with the details of a mechanism to effect the abolition of usury in all its forms. The end of this would be the gradual elimination of all debt-claims and the establishment of a system of free money to facilitate and not obstruct, as at present, the complete distribution of the whole product of industry to consumers. This would not necessarily involve, as is commonly supposed by socialists and communists, the abolition of the profit system and the nationalization of the productive processes. The abolition of the principle of money interest on money lent would itself remove anomalies and desperate injustices which are supposed to reside in capitalism and the profit system.

   Since the writing of “ Das Kapital ”, Western capitalistic exploitation, now faced by the aggressive commercial retaliation of the East, has necessarily given way to purely financial negation. Nearly all the creations of the nineteenth-century capitalists — such as, for instance, the power-loom cotton industry of Lancashire — ^have been broken by usury. International finance, like the international armaments racket which it has spawned, knows no boundaries, geographical or cultural, and if the end of the latter is destruction, the end of the former, consciously or unconsciously, it matters not which, is universal degradation and slavery.

   In attempting to trace out these developments, the writer refers specifically to the so-called principles of British and American banking. As the British system is the more highly developed, the more “ stable and the more in accordance with the declared ideals of bankers, he has based his argument mainly on a discussion of its methods. Eight years’ residence in the United States has familiarized the author, to some extent, with the workings of the American banking and industrial systems, and statistics are given as far as possible, from both American and British sources, at each stage in the argument. He has thus sought to interest the reading public on both sides of the Atlantic.

   The writer apologizes for the wholesale use of quotation marks and italics. He has been impelled to do this, because so many terms used in banking circles, as well as in ordinary conversation, take on an entirely opposite meaning when the bogus principles of internal and international finance are understood. Bank “ credit ” should invariably be thought of for what it is, i.e. bank debt (and moreover as irrepayable debt). The phrase “ bank deposits ” is a legal euphemism, as all bank “ deposits ” derive from the progressive issue of bank ** credit ”. No one, consequently, really “ makes ” money except the bankers who literally create it. The term “ convertible currency ” is a quibble which has bedeviled mankind for centuries. Money is not “ convertible ” into gold for the well-known reason that gold “ backing ” exists in less than a one-to-ten ratio to bank “ deposits Nothing, in the writer’s opinion, could be more fundamentally unsound than a “ sound ” currency. Foreign " trade ” is not primarily the exchange of goods between nations, but essentially a device to transfer interest payments due on international debt. Foreign “ investments” are simply part of the mechanism of foreign “ trade ”. It is criminal to regard unsaleable goods as industrial “ surpluses ” while millions throughout civilization are faced with the fear or actual fact of starvation. According to financial, as opposed to common-sense reasoning, the blessings of an ever-increasing abundance and leisure become insoluble problems of “ over production " and “ unemployment."

   If, on occasions, the writer may seem to be a little extravagant or emotional in his attitude, this is because it is difficult, if not impossible, to be consistently impersonal when discussing the principles of so-called sciences which have brought such an enormous amount of totally unnecessary suffering to humanity. Banking and economics are not sciences, but academic elaborations of sinister fallacies, based on superstitions which themselves derive from the gold idolatry of barbarism. The author wishes to acknowledge his indebtedness to the writings of the Editor of, and the contributors to, the “ New English Weekly a magazine almost entirely devoted to the discussion of certain aspects of the New Economics. Where direct quotations are used, acknowledgment has been made. But, in a few instances, fragmentary phrases as well as paraphrases of incidental material in editorials and articles have been used without acknowledgment.

   He wishes also to thank specially his friend, Mr. Schuyler Jackson, to whom this book is dedicated. In this enterprise, as in others, he owes much to the unworldly wisdom of this Pennsylvanian farmer.