RUSKIN’S attack upon the taking of interest for capital is the part of his doctrine which goes deepest into our business system. It has in consequence weakened his influence, and has not, even by himself, been put into practice in this country. But he spent much of his strength upon it in his later years. In Munera Pulveris, written in 1862, we find him stating[92] that Usury is “merely taking an exorbitant sum for the use of anything"—“the essence of the usury being that it is obtained by advantage of opportunity or necessity, and not as due reward for labour,” and he therefore includes high profits for middlemen under the term: but in later editions he adds a footnote to say that Mr. W. C. Sillar[93] has since shown him that the payment of any interest at all is unjustifiable, and is real usury.

It is well to distinguish carefully between Interest and Profits. The business man who exploits foreign concessions, and who stimulates wars, may or may not be a capitalist. He may be using other people’s capital. He makes his profit as reward for his work, his luck, his enterprise, and an often risky responsibility. The capitalist, properly so called, is, on the other hand, an investor who simply takes his interest. Often, doubtless, one man fills both parts, but in general theoretical discussion they should be kept separate.

Interest, even if unavoidable, tends to increase the inequalities of distribution, and beyond a certain point it becomes a social danger, and may even become a disease in the body politic. It is one of the least desirable consequences of the system of private property; but it is, I fear, an inherent part of it—to be got rid of only under a communal system where private property does not exist.

His new convictions did not take an absorbing hold on Ruskin’s mind for some years. In September, 1872, he writes in Fors, Letter XXI, §§ 18, 19, in reply to a remonstrance from Mr. Sillar: “I am very careless about such minor matters as the present conditions of ... banking. I hold bank stock simply because I suppose it to be safer than any other stock, and I take the interest of it because, though taking interest is, in the abstract, as wrong as war, the entire fabric of society is at present so connected with both usury and war, that it is not possible violently to withdraw, nor wisely to set example of withdrawing, from either evil.”

“Denunciations of interest are much beside the mark unless they are accompanied with some explanation of the manner in which borrowing and lending, when necessary, can be carried on without it.” There is a passage to the same effect in the notes to Fors, Letter XLIII, written in July, 1874.

It is easy to show why interest is both just and unavoidable, if we accept the justice of private property in general. By advancing capital we enable the borrower to carry on profitable operations which will pay him after he has given us somewhat for the advance. It pays him to borrow. He obtains an immediate order upon labour from the lender who postpones using it for his own pleasure. It is this element of Time which constitutes the whole reason for interest. Ready money, that is an immediate order upon labour for which nothing has yet been given, has a price depending upon the action of those who have it and those who want it, under the same law of Supply and Demand as governs the price of other commodities. The current rate of interest, after taking off the varying payment for risk, represents both the reward for which the capitalists will save the last portion of fluid capital which is saved, and the “final” utility of the last dose of money available to borrowers. The capitalist needs an investment as much as the borrower needs capital. The advantage is not all on one side. Bankers desire eagerly to grant overdrafts to safe people. The whole process is essential to production on a large scale, and to public activity, and there is not necessarily any oppression in it, in our present state of society, though it is, like everything else, liable to abuse.

But to a man who has enough already “abstinence” is no hardship. Time is his friend. Hence a measure of government interference to stop great fortunes is just and necessary, whether by a heavy income tax or a capital levy, or by death duties, all steeply graduated. Another drastic extension of these duties would be found in the limitation of the right of bequest, fixing a maximum amount which a man may receive, or may leave, by inheritance or bequest. Bequest is not a natural, it is a strictly legal, right; and the law may regulate it.[94] This would check the worst of the evil of vast fortunes, which are a curse to their owners, and the other side of the poverty shield. They are rarely made in one generation. Bacon says: “Usury bringeth the treasure of a realm into few hands; for the usurer trading on a certainty, and other men on uncertainties, at the end of the game all the money will be in the box.”

We will now put Ruskin’s argument, from the one place where he wrote it out at length. It is the well-known passage on “the position of William” in the first letter of Fors, January, 1871.

The following is there quoted from Mrs. Fawcett’s Political Economy for Beginners. She translated it from the French of Bastiat:

Thus far Bastiat: Ruskin comments:—

“If this be an abridgment, what a graceful piece of highly wrought literature the original story must be! I take the liberty of abridging it a little more.

“James makes a plane, lends it to William on 1st January for a year. William gives him a plank for the loan of it, wears it out, and makes another for James which he gives him on 31st December. On 1st January he again borrows the new one; and the arrangement is repeated continuously. The position of William therefore is, that he makes a plane every 31st December, lends it to James till the next day, and pays James a plank annually for the privilege of lending it to him on that evening. This, in future investigations of capital and interest, we will call, if you please, ‘the Position of William.’

“You may not at the first glance see where the fallacy lies: (the writer of the story evidently counts on your not seeing it at all).

“If James did not lend the plane to William, he could only get his gain of a plank by working with it himself, and wearing it out himself. When he had worn it out at the end of the year, he would, therefore, have to make another for himself. William, working with it instead, gets the advantage instead, which he must, therefore, pay James his plank for; and return to James what James would, if he had not lent his plane, then have had—not a new plane, but the worn-out one. James must make a new one for himself, as he would have had to do if no William had existed; and if William likes to borrow it again for another plank, all is fair.

“That is to say, clearing the story of its nonsense, that James makes a plane annually, and sells it to William for its proper price, which, in kind, is a new plane. But this arrangement has nothing whatever to do with principal or with interest.”

I fear Ruskin is wrong. He forgets a sinking fund for depreciation. His error lies in supposing that a plane can be used for a year, and worn out, for no return but a plank. If planes only last a year and are of advantage, their value in use is equal to that of the cost of a plane plus a plank, plus some more. That is, the cost of making a plane is less by a plank and more than the benefit a workman can get out of it before it is worn out, after paying for his labour. The benefit in a year to the user is more than plane plus plank, or William would not go on. That is the point of the service of all capital, intelligently used.

William has to pay his tax of a plank per annum because he is not beforehand with his needs. He gets the advantage of the plane every year twelve months before he can afford to make it; and the advantage of being in advance of his needs goes to James. The element of Time is everything. A plane at the beginning of a year is of more service than a plane you have to wait for till the end. Ruskin begins his sequence of time on December 31st of the first year, avoiding the whole point. And the position of William is therefore not unfair; though it is one to be avoided.

There is little to be added of the nature of argument; though Fors is scattered over with allusions to the subject, and discussions with many correspondents are printed in full.[95]

These, and many other shorter passages,[96] consist largely of intuitive prophetic assertion of the sinfulness of interest, even the slightest. Much space is occupied by criticisms of the author’s own practice in living on the proceeds of Bank Stock, and his very cogent replies thereto. They amount to an admission that the doctrine does not fit the present time. There are impressive accounts also of the miseries of usury-ridden countries like India, and of the folly of borrowed capital. But there is no light thrown on how business is to be conducted without it: there is nothing immediately practical.

The array of authority against usance for money is weighty and of ancient date.

Lev. xxv. 35-37: “And if thy brother be poor and powerless with his hands at thy side, thou shalt take his part upon thee, to help him, as thy proselyte and thy neighbour; and thy brother shall live with thee. Thou shalt take no usury of him, nor anything over and above, and thou shalt fear thy God. I am the Lord, and thy brother shall live with thee. Thou shalt not give him thy money for usury; and thou shalt not give him thy food for increase.” (J. R. translated from LXX.) Exodus xxii. 25 and Deuteronomy xxiii. 19 are similar in purport. Psalm xv. refers to the man “who putteth not out his money to usury, nor taketh reward against the innocent”; as being a fit person to abide in the Lord’s tabernacle, and dwell in His holy hill. Here we have the taking of interest running parallel with the corruption of the high trust of the judicial bench. Ezekiel xviii. 8, 13, 17 is contemporary with Leviticus, and is practically the same voice, representing Jewish opinion on the resettlement of the State after the Captivity. Here usury is classed with every abominable wickedness.

In these Jewish passages it was the taking of interest from a brother Hebrew that was forbidden. This limitation to the profitable use of capital may have early led the Jew capitalist to the permitted Gentile outlet; and have caused him, in lending to the outside world, to carry with the act a spice of uncharitableness and conscious ill-will. These passages are a testimony to the extraordinary cohesiveness and patriotic consciousness of the restored nation. Such a proviso of itself is both cause and consequence; it leads to further isolation from others.

In the parable of the Talents, the king who was made to say, “Thou knewest that I was an hard man,” is also made to say, “Thou shouldest have given my money to the bankers that at my coming I should have received mine own with usury.” But I dare not deduce anything from this. The Parables never apply all round; they only teach one lesson at a time. He who taught the duty of prayer by means of the Parable of the unjust judge, and the duty of using present opportunity by the Parable of the unjust steward, might easily teach the duty of the use of the gifts of God, without implying that God was either a “hard man” or a usurer. All these stories may have been accompanied by some such addition as this, that if even with unjust and hard men this teaching holds, will it not be far more worth while to pray to God and to faithfully use His opportunities and His gifts?

There is, however, one passage, not in the four Gospels, but well based on tradition:—“Be honourable bankers”; and it certainly does seem strange, if the whole business of money-dealing were wrong, that that illustration of the use of spiritual capital should have been selected. The fact that usury was denounced by the Early Church may have led to the non-inclusion of this dubious text in the Canon.

Denunciations of usury are commonplaces among the Fathers of the Church. It was wholly forbidden to the clergy and sometimes to the laity. Many have been the sermons, of the fiercest character, delivered against it by the Bishops of the Catholic and Anglican Churches. John Wesley told his followers “to die sooner than put anything in pawn or borrow or lend on usury.” His rule on the subject was, however, explained later on by himself as being against “unlawful interest”; upon which Ruskin remarks: “Doubtless his disciples know what rate of interest is lawful, and what not; and also by what law it was made so; and always pause with pious accuracy at the decimal point whereat the excellence of an investment begins to make it criminal.” Nevertheless, Wesley was right.

Turning to the Greek world we find usury condemned by Solon and Lycurgus, Plato and Aristotle (“money sterile by nature”); and a Roman voice comes from Cato. From Arabia is heard the word of Mohammed. And, of great Englishmen, we find Lord Bacon, and perhaps Shakespeare, teaching the same. Concerning these it is to be noted, that being before the days of joint company ownership, their testimony was solely against private money-lending; and the one authority, John Wesley, who lived in the early days of modern business, was not against interest as such in his later years. Nor again, did these authorities attack Rent, which Ruskin is consistent in also reprobating. The landowning aristocracy, we shall remember, are to be the recipients instead of a Government annuity, as wages for their work of governing their inferiors. Amongst an agricultural, noncommercial people, the usurer is a sinister figure. This must have been the case in Palestine, and in agricultural England. To-day he is the curse of India, whose cultivators are enslaved by the money-lenders under English law. In short, we may conclude that it requires a fair field and genuine commercial habits to make interest a public benefit.

The change from the earlier to the later John Wesley is most significant. It represents the change to modern business on a large scale, which occurred during his lifetime. It is noticeable that since his time the attack on Interest has ceased, but for Ruskin, among religious teachers. As a counsel of ultimate perfection in a communist State, of course, Interest would be abolished; but most Socialists admit that it is an essential part of the institution of private property, and must stand or fall with it.

There may yet be great revolutions in our sense of duty. We may come to extend kindness to animals to the extraordinary length of not eating them. That excessive toil and numbing poverty should exist around us, may some day become a reproach to us, as we feed on the roses and lie on the lilies of life, which are often provided for us by the said labourers. By the time, then, that we come to love our neighbours as ourselves, we shall probably not be anxious to take advantage of our position of being a little beforehand with the world, of having money to lend; and may even sink the time advantage thereby at our disposal; and not take interest. But we shall be different then; and so will the world we live in. It is a kind of altruism which absolutely needs a fit environment. If the cessation of income from investments belongs to the Christianity which is to come, before this faith shall have been realized we shall have pooled our property into a common store, and the question of private investment will have fallen to the ground. Only among the Doukhobors has this kind of Christianity yet notably realized itself, and great is their well-being. But we must go on like Ruskin and take our Interest for the present.

The real trouble is not in the interest, but in the great fortunes. That an upper limit for wealth would be a blessing to the rich, and a solid gain to the nation at large, has long been my conviction. Ruskin says it is also his “long fixed conviction that one of the most important conditions of a healthful system of social economy, would be the restraint of the properties and incomes of the upper classes within certain fixed limits. The temptation to use every energy in the accumulation of wealth being thus removed, another and a higher ideal of the duties of advanced life would be necessarily created in the national mind. By withdrawal of those who had attained the prescribed limits of wealth from commercial competition, earlier worldly success, and earlier marriage, with all its beneficent moral results, would become possible to the young; while the older men of active intellect, whose sagacity is now lost or warped in the furtherance of their own meanest interest, would be induced unselfishly to occupy themselves in the superintendence of public institutions or furtherance of public advantage. And out of this class it would be found natural and prudent always to choose the members of the legislative body of the Commons; and to attach to the order also some peculiar honours, in the possession of which such complacency would be felt as would more than replace the unworthy satisfaction of being supposed richer than others, which to many men is the principal charm of their wealth. And although no law of this purport would ever be imposed on themselves by the actual upper classes, there is no hindrance to its being gradually brought into force from beneath, without any violent or impatient proceedings.”[97]

As a type of Ruskin’s satirical humour in controversy we will indulge ourselves with an extract from his argument with the late Bishop of Manchester on usury. Ruskin publicly challenged Dr. Fraser to the encounter. The Bishop had somewhat sensibly remarked that religious sanctions ought not to be imposed in cases which they never originally contemplated, referring to Leviticus on usury. Ruskin replies:

“I do not know whether by the phrase, presently after used by your Lordship, ‘religious sanctions,’ I am to understand the Law of God which David loved and Christ fulfilled, or whether the splendour, the commercial prosperity, and the familiar acquaintance with all the secrets of science and treasures of art, which we admire in the City of Manchester, must in your Lordship’s view be considered as ‘cases’ which the intelligence of the Divine Lawgiver could not have originally contemplated. Without attempting to disguise the narrowness of the horizon grasped by the glance of the Lord from Sinai, nor the inconvenience of the commandments which Christ has directed those who love Him to keep, am I too troublesome or too exigent in asking from one of those whom the Holy Ghost has made our overseers, at least a distinct chart of the Old World as contemplated by the Almighty, and a clear definition of even the inappropriate tenor of the orders of Christ; if only that the modern scientific Churchman may triumph more securely in the circumference of his heavenly vision, and accept more gratefully the glorious liberty of the free thinking children of God?”