Considering the important position you have taken as editor on this blog, any post by you should have authoritative backing. I have concerns about parts, 3, 4, and 5 of your post “Response to Ideas Concerning a Post-Collapse World.”
Part 3. Usury. Usury is simply a fee for the use of money. Not all religions prohibit it. In Judaism, it is prohibited only in loans of “brothers” to each other, not to outsiders. It is not prohibited in Christianity. Compound interest has a number of uses, including calculating the present value of an amount to be paid in the future, or the future value of an amount currently held. The current and present values are in the same specie. It does not make sense to calculate, in gold, the future value of five copper coins. Also, English pennies did not exist at the beginning of the Christian era. Starting from 1836, five English copper pennies at 5% compound interest would now be 45,629.95 English copper pennies. A lot of pennies, but not bank busting.
Part 4. Limited Liability. Limited liability of corporations to its creditors can be created out of ordinary contract law. All persons dealing with a corporation can agree not to sue the corporation’s shareholders. Limited liability does not shield a corporation from liability in tort. It does not shield a corporation’s officers from criminal liability.
Part 5. Specie as tender. Your note in this part says that bankers are “parasites”. How can they be parasites if they have figured out a way to avoid the lending in specie that you object to? When a bank makes a loan, it does not hand a bag of money, or specie, to the borrower. It creates a new bank account in the borrower’s name. The account is “backed up” by the promissory note signed by the borrower. Private money, or specie, backed by a private promise. Incidentally, the warning of Scripture about the love of money being the root of all evil arises from money being based on man’s promise, rather than God’s promise. Sincerely – J.L.
Hugh Replies: I think you have a mistaken idea on who wrote the post. The post was written by JLF. But the ideas that are put forth are valid considerations. Usury was indeed forbidden by Christianity in the middle ages, and the New Testament has clear teachings against the charging of interest. Specifically, the Christian is expected to lend money without expectation of repayment, according to Matthew 5:42, Luke 6:34-35, and Luke 6:38. The Qur’an clearly forbids usury. Some of the earliest prohibitions that we see historically on usury come out of Vedic Texts of India. Even China has outlawed interest, at times, in its past. It is, therefore, a true statement that every major religion has taken a stand against usury at some point in history. Even if you decide that an acceptable interest rate is, say 5-8%; a credit card company raising your interest rate to 24% or 29% is nothing short of criminal and is equivalent to mobster loan shark activities. Even if the current law condones or accepts it, the practice is ethically wrong and morally bankrupt. You are also comparing apples to oranges in your calculations. The original author gave a loan life of 2000 years. Your calculations are only showing a loan life of 78 years. Using current interest rates, it is an expectation that you will pay as much in interest (sometimes two or three times as much) as you will on the principle of your home loan. Even in your calculation, the value of the loan is nearly 10,000 times the original value. Clearly, these are areas that need to be dealt with when the rebuilding of society eventually occurs.
I do not have the background or knowledge base to argue the authors point on part 4 or part 5, but I do know that the laws, as they currently stand, are very problematic and prone to abuses in the extreme. There must be some sort of representation of money to facilitate a widely accepted bartering market, but a fiat currency cannot be it. There must be an equal exchange of value or fair representation of held value on any transaction. Personally, I rather like the idea of bank checks, as they were used in the 1800s, but it requires a level of trust. The bank check held no value after being redeemed at the bank. However, you might be reluctant to take a check from someone whom you did not know. In that case, the exchange had to have something involving a hard value. I see that as a major problem with our current currency, as the bills are no more than bank checks without any value behind them, yet we are expected to believe that they contain value in and of themselves. That value only exists until people quit trusting in the value and demand hard assets in exchange.
Again, while something may be legal, it does not make it morally or ethically right. The artificial person doing business and then dissolving while protecting the organizers is a real, valid problem and needs to be addressed.