Most people are comfortable with the concept of earning interest on capital. They conclude that it
is natural for money to be invested in financial instruments that will generate a return. Throughout history the idea that
banking is based upon a justifiable relationship that money deserves to accrue that magical reward, called interest - has
driven the behavior of societies and the fate of nations. Is there anyone who is immune to the effects of usury? Obviously
not. Individuals know all too well the reality that your money is not really yours. Currency is nothing more than a payment
on obligations that you must fulfill and provides the means to satisfy needs that we all share.
How curious that mankind accepts that surplus, saved money has an intrinsic claim to earn additional
funds, over and above it's own value. Few beliefs exist that are more readily accepted than the idea that banking based upon
the concept that interest, is a rightful method for conducting economic commerce. But by what law of nature can we demonstrate
that this practice is inherent to society?
Banking originated in Ancient Mesopotamia where the royal palaces and temples provided secure places
for the safe-keeping of grain and other commodities. Receipts came to be used for transfers not only to the original depositors
but also to third parties. Eventually private houses in Mesopotamia also got involved in these banking operations and laws
regulating them were included in the code of Hammurabi. Money changing developed when coinage was established as a convenient way to store and transfer known
But the inspiration for the word for interest arose out of the pastoral economies of the Sumerians,
Egyptians and Greek societies. The term points to the derivation of interest rates as the natural multiplication of livestock. If you lend someone a herd of thirty cattle for one
year, you expect to be repaid with more than thirty cattle. The herd multiplies -- the herder's wealth has a natural rate
of increase equal to the rate of reproduction of his livestock.
As urban communities developed the need to exchange different goods and services evolved. The origins
of finance are often associated with the ancient city of Uruk, in Sumerian during the Hammurabi era 1792 - 1750 B.C. The example
of a transaction by a merchant, Dumuzi-gamil illustrates how the practice worked. Most of the loans from second millennium Ur do not quote interest rates per month or per annum, but simply state the amount
of interest due. Most loan contracts used the lunar calendar, and quoted the sum plus interest due at the end of the month.
Interest payments were not thought of as rates per unit of time, but fixed prices for the use of the money, whether it be
for a long or a short period.
Since this example of the charging of interest dates back to antiquity, why not just accept that paying
interest is natural? The lesson of this background in not that lending with the expectation of a premium return is normal,
but that the urge to extract a gain not from your own labor, ingenuity or risk taking - dated back to ancient times. The key
question that deserves scrutiny is why is it legitimate for accumulated capital to earn money for the mere lending of the
use of that cash? No other single element in economic intercourse weighs more heavily upon the success or failure of a venture
than the availability of funds to finance the enterprise. Just the mere access to capital is not enough. Consideration for
the cost that will be extracted for its use, is the ultimate price that will be paid to conduct business.
Most sound thinking people will acknowledge that all people are not equal in ability, talent, motivation
and circumstance. So too, does this reality apply to admittance to the chambers of the lender. We have all heard of the Golden
Rule: Those that have the gold, make the rules. Well, today it should be modified that those who control the lending process
decide who gets to play the financial musical chair game!
Inflation is nothing more than the systemic devaluation in the value of the purchasing worth of the
currency. But becoming obligated to pay interest is the guaranteed separation from the fruits of your labor, determination
and willingness to accept the risk of conducting business. Once upon a time a businessman could borrow at prevailing interest
rates and have a reasonable expectation that a profit could be achieved, that the interest could be paid, and the underlying
loans could be retired. Today, capital is available from the modern day Dumuzi-gamil's that hawk, hype and tout their
schemes from their lavish Wall Street district suites.
Earning interest encourages reliance upon your own capital, and reduces the will to engage in business.
Owing interest creates partners in your endeavors that have claims greater than your own to fairly earned profits. Enslavement
is the ultimate reality to a system based upon debt, where interest reigns as the measure of who rules. The human condition
is one long sad tale of debt incurred under the penalty of compound interest. The status quo is protected in order that the
servicing of the interest, can be enforced.
Life is a risk and should be admitted as a struggle. Accepting the efficacy of interest as a normal
part of life only deepens the conflict. We all have unwanted partners, the State, in our finances. Rewarding the lender on
top of the excessive expropriation that government steals is madness. The tradition of paying interest to use capital is sheer
lunacy. Lenders of capital could be compensated for the use of funds with a share in the equity of business ventures. Let
them bear their proportion of the risk and not add to the peril of a venture, with the cost of debt service. Civilization
has been achieved through the creative inspiration and daring of the few. The work of its erection has been built on the backs
of the many. And it has been attained not because of the charge of the money changers, but in spite of their trade. The world
needs to liberate themselves from their addiction. Interest causes bondage, even if your reside in a palace . . .