As a further reason for condemning profit from trade and money transactions he points out, that such profit does not arise from the earth or from cattle.
With both these arguments he is, however, on purely mediæval ground. He pays but little regard to the new economic situation, though he has a keen eye for the abuses and the injustice which undoubtedly accompanied the new commerce. Instead, however, of confining his censure to these and pointing out how things might be improved, he prefers to take his stand on an already obsolete theory — one, nevertheless, which many shared with him — and condemn unconditionally all such commercial undertakings with the violence and lack of consideration usual in him.
In his remarks we often find interesting thoughts on the economic conditions; we see the remarkable range of his intellect and occasionally we may even wonder whence he had his vast store of information. It is also evident, however, that the other work with which he was overwhelmed did not leave him time to digest his matter. Often enough he is right when he stigmatises the excesses, but on the whole he goes much too far. As Frank G. Ward says: “Because he was incapable of passing a discriminating judgment on the abuses that existed he simply condemned all commerce off-hand.” He was too fond of scenting evil usury everywhere. A contemporary of his, the merchant Bonaventura Furtenbach, of Nuremberg, having come across one of Luther’s writings on the subject, possibly his “Von Kauffshandlung,” remarked sarcastically: “Were I to try to write a commentary on the Gospel of Luke everyone would say, you are not qualified to do so. So it is with Luther when he treats of the interest on money; he has never studied such matters.” A Hamburg merchant also made fun of Luther’s economics, and, as the Hamburg Superintendent Æpinus (Johann Hock) reported, quoted the instance of the Peripatetician Phormion, who gave Hannibal a scholastic lecture on the art of war, for which reason it is usual to dub him who tries to speak of things of which he knows nothing, a new Phormion.
In his “An den Adel” Luther had shown himself more reticent, though even here he inveighs against interest and trading companies, and says: “I am not conversant with figures, but I cannot understand how, with a hundred florins, it is possible to gain twenty annually.… I leave this to the worldly wise. I, as a theologian, have only to censure the appearance of evil concerning which St. Paul says [1 Thess. v. 22] ‘from all appearance of evil refrain!’ This I know very well,” he continues, speaking from the traditional standpoint, “that it would be much more godly to pay more attention to tilling the soil and less to trade.” Yet, even in this writing, he goes so far as to say: “It is indeed high time that a bit were put in the mouth of the Fuggers and such-like companies.”
More and more plainly he was, however, forced to realise that it was not within his power to check the new development of commerce; he, nevertheless, stuck by his earlier views. He was also, and to some extent justifiably, shocked at the growing luxury which had made its way into the burgher class and into the towns generally in the train of foreign trade. Instead of “staying in his place and being content with a moderate living,” “everyone wants to be a merchant and to grow rich.”
“We despise the arts and languages,” he says, “but refuse to do without the foreign wares which are neither necessary nor profitable to us, but [the expenses of] which lay our very bones bare. Do we not thereby show ourselves to be true Germans, i.e. fools and beasts?” God “has given us, like other nations, sufficient wool, hair, flax and everything else necessary for suitable and becoming clothing, but now men squander fortunes on silk, satin, cloth of gold and all sorts of foreign stuffs.… We could also do with less spices.” People might say he was trying to “put down the wholesale trade and commerce. But I do my duty. If things are not improved in the community, at least let whoever can amend.”
“I cannot see that much in the way of good has ever come to a country through commerce.”
He refused to follow the more luxurious mode of living which had become the rule in the towns as a result of trade, but insisted on leading the more simple life to which he had throughout been accustomed. For the good of the people, poverty or simplicity was on the whole more profitable than riches. “People say, and with truth, ‘It takes a strong man to bear prosperity,’ and ‘A man can endure many things but not good fortune.’ … If we have food and clothing let us esteem it enough. For the cities of the plain which God destroyed it would have been better, if, instead of abounding in wealth, everything had been of the dearest, and there had been less superfluity.”— “What worse and more wanton can be conceived of than the mad mob and the yokels when they are gorged with food and have the reins in their hands.”
Hence he took a “tolerable maintenance” as he expresses it, i.e. the mode of living suitable to a man’s state, as the basis of a fair wage. The question of wages must in the last instance, he thinks, depend on the question of maintenance. Luther, like Calvin, did not go any further in this matter. “Their conservative ideas saw in high wages only the demoralisation of the working classes.”
Luther’s remarks on this subject “recall the words of Calvin, viz. that the people must always be kept in poverty in order that they may remain obedient.”
According to his view “the price of goods was synonymous with their barter value expressed in money; money was the fixed, unchangeable standard of things; it never occurred to anyone that an alteration in the value of money might come, a mistake which led to much confusion. Again, the barter value of a commodity was its worth calculated on the cost of the material it contained and of the trouble and labour expended on its manufacture. This calculation excluded the subjective element, just as it ignored competition as a factor in the determining of prices.” Thus, according to Luther, the merchant had merely to calculate “how many days he had spent in fetching and acquiring the goods, and how great had been the work and danger involved, for much labour and time ought to represent a higher and better wage”; he should in this “compare himself to the common day-labourer or working-man, see what he earns in a day, and calculate accordingly.” More than a “tolerable maintenance” was, however, to be avoided in commerce, and likewise all such profit “as might involve loss to another.” It would have pleased him best had the authorities fixed the price of everything, but, owing to their untrustworthiness, this appeared to him scarcely to be hoped for. The principle: “I shall sell my goods as dear as I can,” he opposed with praiseworthy firmness; this was “to open door and window to hell.” He also inveighed rightly and strongly against the artificial creation of scarcity. Here, too, we see that his ideas were simply those in vogue in the ranks from which he came.
“His economic views in many particulars display a retrograde tendency.”— “In the history of economics he cannot be considered as either an original or a systematic thinker. We frequently find him adopting views which were current without seriously testing their truth or their grounds.… His exaggerations and inconsequence must be explained by the fact that he took but little interest in worldly business. His interpretation of things depended on his own point of view rather than on the actual nature of the case.”
The worst of it is that his own “point of view” intruded itself far too often into his criticisms of social conditions.
Influence of Old-Testament Ideas
Excessive regard for the Old-Testament enactments helped Luther to adopt a peculiar outlook on things social and ethical.
He says in praise of the Patriarchs: “They were devout and holy men who ruled well even among the heathen; now there is nothing like it.” He often harks back to the social advantages of certain portions of the Jewish law, and expressly regrets that there were no princes who had the courage to take steps to reintroduce them for the benefit of mankind.
In 1524, under the influence of his Biblical studies, he wrote to Duke Johann Frederick of Saxony, praising the institution of tithes and even of fifths: “It would be a grand thing if, according to ancient usage, a tenth of all property were annually handed over to the
authorities; this would be the most Godly interest possible.… Indeed it would be desirable to do away with all other taxes and impose on the people a payment of a fifth or sixth, as Joseph did in Egypt.” At the same time he is quite aware that such wishes are impracticable, seeing that, “not the Mosaic, but the Imperial law is now accepted by the world and in use.”
Partly owing to the impossibility of a return to the Old Covenant, partly out of a spirit of contradiction to the new party, he opposed the fanatics’ demand that the Mosaic law should be introduced as near as possible entire, and the Imperial, Roman law abrogated as heathenish and the Papal, Canon law as anti-Christian. Duke Johann, the Elector’s brother, was soon half won over to these fantastic ideas by the Court preacher, Wolfgang Stein, but Luther and Melanchthon succeeded in making him change his mind. The necessity Luther was under of opposing the Anabaptists here produced its fruits; his struggle with the fanatics preserved him from the consequences of his own personal preference for the social regulations of the Old Covenant.
In what difficulties his Old-Testament ideas on polygamy involved him the history of the bigamy of Philip of Hesse has already shown. Had such ideas concerning marriage been realised in society the revolution in the social order would indeed have been great.
Luther’s esteem for the social laws of the Old Testament finds its best expression in his sermons on Genesis, which first saw the light in 1527.
He says, for instance, of the Jewish law of restitution and general settlement of affairs, in the Jubilee Year: “It is laid down in Moses that no one can sell a field in perpetuity but only until the Jubilee Year, and when this came each one recovered possession of his field or the property he had sold, and thus the lands remained in the family. There are also some other fine laws in the Books of Moses which well might be adopted, made use of and put in force.” He even wishes that the Imperial Government would take the lead in re-enacting them “for as long as is desired, but without compulsion.”
His views on interest and usury were likewise influenced by his one-sided reading of certain Old- and New-Testament statements.
Usury and Interest
On the question of the lawfulness of charging interest Luther not only laid down no “new principles” which might have been of help for the future, but, on the contrary, he paved the way for serious difficulties. He was not to be moved from the traditional, mediæval standpoint which viewed the charging of any interest whatever on loans as something prohibited. His foe, Johann Eck, on the other hand, in a Disputation at Bologna, had defended the lawfulness of moderate interest.
After having repeatedly attacked by word and pen usury and the charging of any interest — led thereto, as he says, by the grievous abuses in the commercial and financial system, he published in 1539 his “An die Pfarherrn wider den Wucher zu predigen,” whence most of what follows has been taken. As it was written towards the end of his life, we may assume it to represent the result of his experience and the final statement of his convictions.
In this writing, after a sad outburst on the increase of usury in Germany, he begins his “warnings” by urging that “the people should be told firmly and plainly concerning lending and borrowing, and that when money is lent and a charge made or more taken back than was originally made over, this is usury, and as such is condemned by every law. Hence those are usurers who charge 5, or 6, or more on the hundred on the money they lend, and should be called idolatrous ministers of avarice or Mammon, nor can they be saved unless they do penance.… To lend is to give a man my money, property or belongings so that he may use them.… Just as one neighbour lends another a dish, a can, a bed, or clothes, and in the same way money, or money’s worth, in return for which I may not take anything.”
The writer of these words, like so many others who, in his day and later, still adhered to the old canonical standpoint, failed to see, that, as things then were, to lend money was to surrender to the borrower a commodity which was already bringing in some return, and that, in consequence of this, the lender had a right to demand some indemnification. As this had not generally speaking been the case in the Middle Ages, the prohibition of charging interest was then a just one. Nevertheless, within certain limits, it was slowly becoming obsolete and, as the economic situation changed for that of modern times and money became more liquid, the more general did lending at interest become.
Luther was well aware that to lend at interest was already “usual” and even “common in all classes.” It was also, as a Protestant contemporary complained in 1538, twice as prevalent in the Lutheran communities than among the Catholics. Still Luther insists obstinately that, “it was a very idle objection, and one that any village sexton could dispose of when people pleaded the custom of the world contrary to the Word of God, or against what was right.… It is nothing new or strange that the world should be hopeless, accursed, damned; this it had always been and would ever remain. If you obey its behests, you also will go with it into the abyss of hell.”
Though in his instructions to the pastors he condemns indiscriminately, as a “thief, robber and murderer,” everyone who charges interest, still he wants his teaching to be applied above all to the “great ogres in the world, who can never charge enough per cent.” “The sacrament and absolution” were to be denied them, and “when about to die they were to be left like the heathen and not granted Christian burial” unless they had first done penance. To the “small usurer it is true my sentence may sound terrible, I mean to such as take but five or six on the hundred.”
All, however, whether the percentage they charge be small or great, he advises to bring their objections to him, or to some other minister, “or to a good lawyer,” so as to learn the further reasons and particulars concerning the prohibition of receiving interest. Every pastor was to preach strongly and fearlessly on its general unlawfulness in order that he may not “go to the devil” with those of his flock who charge interest.
Not that Luther was very hopeful about the results of such preaching. “The whole world is full of usurers,” he said in 1542 in the Table-Talk, and to a friend who had asked him: “Why do not the princes punish such grievous usury and extortion?” Luther answers: “Surely, the princes and kings have other things to do; they have to feast, drink and hunt, and cannot attend to this.” “Things must soon come to a head and a great and unforeseen change take place! I hope, however, that the Last Day will soon make an end of it all.”
As to his grounds for condemning interest, he declares in the same conversation: “Money is an unfruitful commodity which I cannot sell in such a way as to entitle me to a profit.” He is but re-echoing the axiom “Pecunia est sterilis,” etc., maintained all too long in learned Catholic circles. Hence, as he says in 1540, “Lending neither can nor ought to be a true trade or means of livelihood; nor do I believe the Emperor thinks so either.” Besides, “it is not enough in the sight of heaven to obey the laws of the Emperor.” According to him God had positively forbidden in the Old Testament the charging of any interest, as contrary to the natural law and as oppressive and unlawful usury (Ex. xxii. 25; Lev. xxv. 36; Deut. xxiii. 19, etc.). In the New Testament Christ, so Luther thinks, solemnly confirmed the prohibition when He said in St. Matthew’s gospel: “Give to him that asketh thee and from him that would borrow of thee turn not away” (v. 42), and in St. Luke (vi. 35) still more emphatically: “Lend, hoping for nothing.”
In the Old Law, however, the charging of interest was by no means absolutely forbidden to the Jews (Deut. xxiii. 19 f.), so that it could not be regarded as a thing repugnant to the natural law, though the Mosaic Code interdicted it among the Jews themselves. As for the New-Testament passages Luther had no right to infer any prohibition from them. Our Saviour, after speaking of offering the other cheek to the smiter, of giving also our cloak to him who would take away our coat, and of other instances of the exercise of extraordinary virtue, goes on to advise our lending without hope of return. But many understood this as a counsel, not as a command. Luth
er indeed says that thereby they were making nought of Christ’s doctrine. He insists that all these counsels were real commands, viz. commands to be ever ready to suffer injustice and to do good; the secular authorities were there to see that human society thereby suffered no harm. The Papists, however, and the scholastics looked upon these things in a different light. “The sophists had no reason for altering our Lord’s commands and for making out that they were ‘consilia’ as they term them.” “They teach that Christ did not enjoin these things on all Christians, but only on the perfect, each one being free to keep them if he desires.” In this way the Papists do away with the doctrine of Christ; they thereby condemn, destroy and get rid of good works, whilst all the time accusing us of forbidding them; “hence it is that the world has got so full of monks, tonsures and Masses.” — Yet, even if we take the words of Christ, as quoted, let us say, by St. Luke, and see in them a positive command, yet they would refer only to the social and economic conditions prevailing among the Jews at the time the words were spoken. According to certain commentators, moreover, the words have no reference to the question of interest, because, so they opine, “it was a question of relinquishing all claim not merely on the interest but on the capital itself.”
The Jesuit theologians of the 16th and 17th centuries as a rule were careful to instance a number of cases in which the canonical prohibition of charging even a moderate rate of interest does not apply. They thus paved the way for the abrogation of the prohibition. Of this we have an instance in Iago Lainez, who in principle was strongly averse to the charging of interest. This theologian, who later became General of the Jesuits, when a preacher at the busy commercial city of Genoa, wrote (1553-1554) an essay on usury embodying the substance of his addresses to the merchants. Lainez there points out that any damage accruing to the lender from the loan, and also the temporary absence of profit on it, constitutes a sufficient ground for demanding a moderate interest. He also strongly insists that the lender, in compensation for his willingness to lend, may accept from the borrower a “voluntary” premium; the lender, moreover, has a perfect right to safeguard himself by stipulating for a fine (pœna conventionalis) from the borrower should repayment be delayed. All this comes under the instances of “apparent usury,” which he enumerates: “Casus qui videntur usurarii et non sunt” (ca).
Collected Works of Martin Luther Page 853