I was so gratified to see Wendell Berry’s remarks in a recent interview (“Wendell Berry: Landsman” with Jim Leach in Humanities magazine, May/June 2012) where he makes a point about economics that is overlooked in these days when divisiveness rules the political roost. The general view is that the economic battle is between capitalism and socialism, but as Wendell observes, “both are industrial systems and they have made the same mistakes in some ways.” Both have ignored “the propriety of scale and the standard of ecological health.”
Yes, yes, yes. But I would like to go farther (probably too far) than Wendell did. Both capitalism and socialism are similar industrial systems basically because both accept and practice the industrial idea that the fundamental tool to “growing an economy” is the ability to borrow money at compound interest rates. I certainly would be foolish to deny the effectiveness, maybe the necessity, of being able to borrow money. We borrowed to buy our first house and car. But seeing how borrowed money nearly ruined people I knew when I was growing up, I was determined never to borrow again if I could avoid it and I never did. Repaying a loan over a long period of time often means buying the house or car twice and if one carries credit card debt all the time, to paying for stuff more than three times.
Somehow this kind of insanity has become sanctified in our society as if it were holy scripture. The phrase “free enterprise” is uttered by its high priests with all the fervor of a biblical evangelist uttering “the Lord Jesus Christ.” I remember the first time I confronted this kind of reverence and realized with a shock, that “free enterprise,” guided by what its followers called an “invisible hand,” was almost a synonym for God.
For centuries societies learned from experience that borrowing money on interest invariably results not in “free enterprise” but in the economic enslavement of indebtedness and usury. Humans privately, and as representatives of corporations and governments, eventually borrow more money than they can pay back. They just can’t help it. And they lack the will to install the rigid controls necessary to keep money interest from, literally, captivating them.
Farmers who ignore the wisdom of the ages are most at risk in the world of manufactured money. (The most well-known example perhaps is from Shakespeare: “Neither a borrower or a lender be/ for loan oft loses both itself and friend/ and borrowing dulls the edge of husbandry.”) Farm crops grow at their own sweet pace and know nothing about manipulated money growth— as I must have written a thousand times by now. The trading shenanigans going on presently in the banks are spilling over into the Chicago Board of Trade. Are you watching the grain markets? Corn and soybean prices have been bouncing up and down like a drunken kangaroo on steroids. Expert marketers admit that they are mystified. But I hear very few of them suggest that the basic reason for this instability might be coming from the notion that we can make money grow faster than real things grow.
Banks do the same when they buy up mortgages or other bundles of paper and attempt to sell them in secondary markets for a kind of gain that can vanish overnight because it is based not on real material resources but on human desire. It is a form of usury to me, a method of trying to make something that exists only in the mind— money value— grow without any respect at all for “the propriety of scale or the standard of ecological health.” This kind of speculation always comes to grief. Ask J.P.Morgan Chase. Money doesn’t grow in trees and trees don’t grow on money.