Credit System

The Laws.

"Money must not be deposited with anybody whom one does not trust."1a

"There must be no lending at interest because it will be quite in order for the borrower to refuse absolutely to return both interest and principal."1b


"The trade of the petty usurer is hated with most reason: it makes a profit from currency itself, instead of making it from the process which currency was meant to serve"1a


" . . . [T]hose who follow illiberal occupations, like . . . moneylenders who make small loans at a high rate of interest; for all these receive more than is right, and not from the right source. Their common characteristic is obviously their sordid avarice . . . "2a

The Old Testament.

"Take thou no usury of him: but fear God . . . Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase" [Leviticus 25:36-37].1a

"At the end of every seven years thou shalt make a release. And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it . . . Of a foreigner thou mayest exact it again . . . " [Deuteronomy 15:1-3].1b*

"The rich ruleth over the poor, and the borrower is servant to the lender" [Proverbs 22:7].1c*

" . . . [M]oney answereth all things." [Ecclesiastes 10:19].1d

The New Testament.

"And they come to Jerusalem: and Jesus went into the temple, and began to cast out them that sold and bought in the temple, and overthrew the tables of the moneychangers . . . And the scribes and chief priests . . . sought how they might destroy him: for they feared him, because all the people was astonished at his doctrine" [St. Mark 11:15-18].1a

" . . . [T]he love of money is the root of all evil" [Timothy 6:10].1b

The Koran.

"Do not devour one another's property by unjust means, nor bribe with it the judges in order that you may wrongfully and knowingly usurp the possessions of other men." [The Cow 2:188].1a

"Those that live in usury shall rise up before God like men whom Satan has demented by his touch; for they claim that trading is no different from usury." [The Cow 2:275].1b

The Wealth of Nations.

"When the law does not enforce the performance of contracts, it puts all borrowers nearly upon the same footing with bankrupts or people of doubtful credit . . . "1a


" . . . Against such panics, Banks have no security, on any system; from their very nature they are subject to them, as at no time can there be in a Bank, or in a country, so much specie or bullion as the monied individuals of such country have a right to demand. Should every man withdraw his balance from his banker on the same day, many times the quantity of Bank notes now in circulation would be insufficient to answer such a demand."1a*

Capital: A Critique of Political Economy.

"Accumulation of capital in the form of the national debt . . . means nothing more than the growth of a class of state creditors with a preferential claim to certain sums from the overall proceeds of taxation."1a  

"The credit system which has its focal point in the allegedly national banks and the big money-lenders and usurers that surround them, is one enormous centralization and gives this class of parasites a fabulous power not only to decimate the industrial capitalists periodically but also to interfere in actual production in the most dangerous manner . . . "1b

""Banking establishments are . . . moral and religious institutions . . . What has been [the young tradesman's] anxiety to stand well in the estimation of his banker? . . . Has not the frown of his banker been of more influence with him than the jeers and discouragements of his friends? Has he not trembled to be supposed guilty of deceit or the slightest misstatement, lest it should give rise to suspicion, and his accommodation be in consequence restricted or discontinued? . . . And has not that friendly advice been of more value to him than that of priest?""1c [Quotation from G. M. Bell, a Scottish bank director.]

Business Cycles.

" . . . [P]ractically anyone, however lacking in aptitude and training, can drift into the banking business . . ."1a

" . . . [C]apitalism is that form of private property economy in which innovations are carried out by means of borrowed money . . . "1b

"It was the financing of innovation by credit creation . . . which is at the bottom of that 'reckless banking.'"1c

The General Theory.

"With the separation between ownership and management . . . and with the development of organized investment markets, a new factor of great importance has entered in, which sometimes facilitates investment but sometimes adds greatly to the instability of the system."1a

" . . . [W]here the risk is due to doubt in the mind of the lender concerning the honesty of the borrower, there is nothing in the mind of a borrower who does not intend to be dishonest to offset the resultant higher charge."1b


"In all of the panics there were recognizable constants. First came an expansion in business activity. This usually centered on some dominant form of investment . . . Then, as time passed, expansion gave way to speculation . . . The banks, needless to say, provided the money that financed the speculation that in each case preceded the crash."1a

"Could it all be better? The answer is yes.
Proof begins with the people who manage money. If anything is evident from this history, it is that the task attracts a very low level of talent . . . Inadequacy is protected further . . . by the fact that failure is not always at cost to those responsible."1b

The Great Crash 1929

Capitalism and Freedom.

"To paraphrase Clemenceau, money is much too serious a matter to be left to the Central Bankers."1a

Money Mischief.

L'Osservatore Romano, 30 April, 2003.

"On Saturday 26 April, in the Paul VI Audience Hall, the Holy Father conducted a special Audience with . . . members of the banking community from Spain and Latin America . . ."

"To the banking community: Seek proper economic interests"

". . . I wish to recall that the concern for profit, while legitimate, cannot be the principal motive or exclusive basis of entrepreneurial or commercial activity, because such activity must take into account human factors and is subordinated to the appropriate moral demands of every human action. I invite you, therefore, to build a true community of persons that seeks to satisfy its economic interests within the framework of the proposals of justice and of solidarity, of responsible and constructive work, and of the promotion of authentic and sincere human relations that are also at the service of society (cf. Centesimus Annus, n. 35)."1a*

The Essence of Capitalism.

"Gargantuan debts are nothing but indentured servitude."1a

" . . . [U]sing Hobbesian logic, I revealed Capitalism as a Religion of Money (banks as churches, bankers as clergy, loan applications as auricular confessions, bankruptcies as excommunications, credit bureaus as index librorum prohibitorum, etc.)."1b

World War III Against the Money Trust? "For Nietzsche, nihilism is bound up with morality - specifically, Christian morality. True, we need, what Nietzsche called, a 'critique of Christian morality.'2a But such critique would be scratching the surface of morality. What we really need is a critique of Solomonic morality - 'The rich ruleth over the poor, and the borrower is servant to the lender' (Proverbs 22-7)2b*. This is the deepest and darkest root of Man's servitude . . . This is the shabbiest Magian superstition. . . This is what must be changed . . . Christian morality is the divine rebellion against the 'shabby origin'2g of a moral order based on money. We need to revaluate Capitalism itself. Fictitious Bank-Money cannot be the grand unifying system of Man's Being."2

Bank-Induced Risks. "Today, people around the world are giving themselves up recklessly to the 'calculative thinking'3a of the marketplace. People calculate what is better -- a loan or a lease --; but, they seldom reflect on the meaning of usury. Why? Because they are too busy being indentured."3

* Italics in the original. 1 Plato (c. 427-347 B.C.). The Laws. Translated with an Introduction by Trevor J. Saunders, 1970. Penguin Group.
a The Possession of Money (742), at 211.
b The Possession of Money (742), at 211.

1 Aristotle (384-322 B.C.). PoliticsTranslated by Ernest Barker, revised with an Introduction and Notes by R.F. Stalley. Oxford, England: Oxford University Press, 1995.
a At 29-30 (1258a35).

2 Aristotle. The Ethics of Aristotle: The Nicomachean EthicsTranslated by J.A.K. Thomson, 1953. Revised with Notes and Appendices by Hugh Tredennick, 1976. Introduction and Bibliography by Jonathan Barnes, 1976. London, England: Penguin Books Ltd.
a Book IV: Other Moral Virtues, at 148.

1 The Holy Bible. The Old Testament. King James Version. London, England: Collins' Clear-Type Press, 1957.
a Leviticus 25:36-37.
b Deuteronomy 15:1-3.
c Proverbs 22:7.
d Ecclesiastes 10:19.
1 The Holy Bible. The New Testament. King James Version. London, England: Collins' Clear-Type Press, 1957.
a St. Mark 11:15-18.
b Timothy 6:10.
1 The Koran. Translated, with Notes, by N.J. Dawood. N.J. Dawood, 1956, 1959, 1966, 1968, 1974, 1990, 1993. London, England: Penguin Books Ltd.
a The Cow 2:188.
b The Cow 2:275.
1 Adam Smith (1723-1790). The Wealth of Nations (1776). 2 vols. in 1. Edited by Edwin Cannan. Preface by George J. Stigler. The University of Chicago, 1976. Chicago, IL: The University of Chicago Press, at 74 (vol. 1, bk. 1). (Cannan's ed. was originally pub. 1904 by Methuen & Co., Ltd.)
a Vol. 1, bk. 1, at 107.
1 David Ricardo (1772-1823). On the Principles of Political Economy and Taxation (1817). Volume I of The Works and Correspondence of David Ricardo. Edited by Piero Sraffa with the collaboration of M.H. Dobb. The Royal Economic Society, 1951. Cambridge, England: Cambridge University Press.
a On Currency and Banks, at 352-372. See especially 358-359.
1 Karl Marx (1818-1883). Capital: A Critique of Political Economy. Volume 3. Translated by David Fernbach with an Introduction by Ernest Mandel. Edition and notes, New Left Review, 1981. Translation, David Fernbach, 1981. Introduction, Ernest Mandel, 1981. London, UK: Penguin Group.
a Chapter 30: Money Capital and Real Capital: I, at 607.
b Chapter 33: The Means of Circulation under the Credit System, at 678-679.
c Chapter 33, at 679. Quotation from G. M. Bell, a Scottish bank director, in The Philosophy of Joint-Stock Banking, London, 1840, pp. 46, 47.
1 Joseph A. Schumpeter. Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (1939). Abridged, with an Introduction, by Rendigs Fels. New York, NY: McGraw-Hill Inc., 1964. (Reprinted 1989 by Porcupine Press, Inc., Philadelphia PA.)
a "Wildcat banking," at 91.
b Capitalism defined, at 179.
c "Reckless banking," at 197.
1 John Maynard Keynes (1883-1946). The General Theory of Employment, Interest, and Money (1935). San Diego, CA: Harcourt Brace & Company, 1991.
a The State of Long-Term Expectation, at 150.
b The Psychological and Business Incentives to Liquidity, at 208
1 John Kenneth Galbraith (1908-). Money. Whence It Came, Where It Went. Revised ed. John Kenneth Galbraith, 1975, 1995. New York, NY: Houghton Mifflin Company.
a The Price, at 106-113.
b Afterword, at 310.
1 Milton Friedman (1912-). Capitalism and Freedom. With the assistance of Rose D. Friedman. Chicago, IL: The University of Chicago, 1962, 1982.
a The Control of Money, at 51.
1 Pope John Paul II. Special Audience: To Scouts, Bankers and Catholic Action. L'Osservatore Romano, 30-Apr-2003. Holy See, News Service.

1 Edward Ayoub, with the assistance of Trudé Ayoub. The Essence of Capitalism. Toronto, ON: Macroknow Inc., 2000.

2 Edward Ayoub, with the assistance of Trudé Ayoub. World War III Against The Money Trust? Book III, Chapter 1: The Essence of Capitalism. Toronto, Ontario: Macroknow Inc., 1998.
a See Friedrich Nietzsche, The Will to Power, 1901. Translated by Walter Kaufmann and R.J. Hollingdale. Edited, with Commentary, by Walter Kaufmann, 1967, at 7-8 ("A critique of Christian morality is still lacking").
b According to Rev. David Fant, Solomon was the principal writer or compiler of Proverbs; see Rev. David J. Fant, Helps to the Understanding of the Bible, in The Holy Bible, King James Version, 1957, at 14.
g Nietzsche's expression for "The supreme values in whose service man should live"; ibid., number 7, at 10-11.

3 Edward Ayoub. Bank-Induced Risks. Toronto, Ontario: Macroknow Inc., 1998.
a Heidegger's expression. The Principle of Reason, at 122 and 129 (on "calculative thinking" vs. "reflective thinking"). Translated by Reginald Lilly. Verlag Gunther Neske, Pfullingen, 1957 (Der Satz vom Grund). Bloomington, IN: Indiana University Press, 1991.