Comments: opinion

Whilst I applaud Justin Welby's stand against a vicious and parasitical "industry", I have a strong suspicion that the Church will not rise to the challenge, except in a few places. Even in the late Victorian heyday of credit unions, credit unions only had a modest local success.

We also need to clarify what is or isn't usury. In the early modern period interest rates were capped as follows: 10% from 1545-1552, and from 1571-1624; 8% from 1624-1651; 6% from 1651-1713; and 5% from that point until abolition in 1854 (by which time the law had long been a dead letter).

Curiosity has led me back to Hansard. Did the Church take a dedicated and principled stand against the proposed abolition of usury laws by the classical economists and their supporters?

Er, no. There were attempts to abolish the laws in 1824 and 1828 in the House of Commons. Even high Tory opponents of abolition such as Sir Charles Wetherell did not play the religious card. Partial abolition was attempted in 1839. However, in 1854, Parliament tried again. Mr Gladstone (then chancellor of the exchequer and only lately having finished his tract on The Functions of Laymen in the Church) moved the bill, but the religious angle was not broached, either by him or anyone else.

When the bill reached the House of Lords is was introduced by the third marquess of Lansdowne, a devout adherent of classical political economy, and then minister-without-portfolio (and, as Lord Henry Petty, chancellor of the exchequer in the Ministry of All the Talents, 1806-07). Again, the issue of religion was not broached.

Did the bishops intervene in the debate? No - not at all.

The two prelates most interested in economics: John Bird Sumner (then archbishop of Canterbury) and Charles James Blomfield (bishop of London), both liberal-classical economists, were conspicuously silent, assuming they were there at all (Blomfield was an assiduous parliamentarian). The other distinguished economist then on the bench, Richard Whately (archbishop of Dublin) does not appear to have crossed St George's Channel that year; his surviving contemporary correspondence with another classical economist, Nassau Senior, seems to make no mention of the abolition of usury. Had any of them spoken, I fear it would have been in favour of abolition; like Adam Smith and Jeremy Bentham, they would probably have deprecated the distorting effect of any attempt to limit the creation of credit, if only because it would limit the access of the poor to credit - and it would be up to the poor to determine what credit they could afford.

You have to go right back to Edwin Sandys (archbishop of York, 1577-89, who was against any form of interest), Lancelot Andrewes (whose BD exercise in 1585 was against usury) or Robert Sanderson (bishop of Lincoln, 1660-63), before finding any bishops really willing to stand up for Leviticus 25 or Deuteronomy 23.

Posted by J Drever at Saturday, 27 July 2013 at 1:35pm BST

In spite of the embarrassment caused by the CofE 's Wonga investment Archbishop Welby seems to have received a mostly favourable Press coverage for standing up for the Poor against the wicked loan sharks . Like Pope Francis he has the Poor at heart. Our Lord would approve. Hopefully as visible unity now seems a far distant prospect because of certain obstacles - the two Churches can co-operate in a joint initiative towards the eradication of poverty. When Justin meets Francis again at the Vatican in December - let us hope for great things to result from the meeting.

Posted by Father David at Sunday, 28 July 2013 at 9:11am BST

I too commend the Archbishop for his efforts, and wish we had more hierarchs and religious leaders here in the USA willing to publicly take on those forces that keep the poor in their poverty, and who profit off the misery of so many people.

Posted by FD Blanchard at Sunday, 28 July 2013 at 1:06pm BST

"I too commend the Archbishop for his efforts, and wish we had more hierarchs and religious leaders here in the USA willing to publicly take on those forces that keep the poor in their poverty, and who profit off the misery of so many people."

Have you tuned into the Episcopal Policy Network? TEC holds a lot of great positions. General Convention passed a resolution to create a credit union, seemingly like Welby is proposing.

Posted by Cynthia at Monday, 29 July 2013 at 4:02am BST

Some thoughts after considering this briefly. (I may blog about it later today if there's time.) For short-term lending, the CofE is in a good position to lend, as it's a relatively wealthy (we'll assume), non-profit, with local structures embedded in the community. It could provide small, short-term loans at lower interest than pay-day lenders, because it need not make a profit. So far so good. But there are some borrowers who use the loans over longer periods (whom the media focus on). For them, there are two alternatives. If payday lenders go out of business (Archbishop Welby's goal), they'll have to borrow from loan sharks (see Niall Fergus's The Ascent of Money for details), or the CofE will have to closely monitor payments or absorb those losses, covering them with profits from the legitimate short-term borrowers. If the CofE monitors, I have visions of the local vicar checking his parish's borrowers for 'extravagant' expenses ('Good morning Mrs. Miggens, just here to have a quick look in the pantry!' says the Reverend Slope, as he comes in the door.) Thomas Chalmers did something similar in Scotland in the 1800s (with reputed success), but I'm not sure most clergy would be up for that, and I'm afraid the borrowers would end up back with the loan sharks anyway, and the reputation of the CofE would not be enhanced.

It seems like a good idea, competing against Wonga, but I'm not sure it will work in practice. The discussion is worth having, though, and it shouldn't be overshadowed by the ethical investment brouhaha ... which is a consequence of having a diversified portfolio.

Posted by Scot Peterson at Monday, 29 July 2013 at 7:07am BST
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