The Catholic, Christian and Traditionalist community were shocked and appalled to learn last week that their pillar, blogger Zippy Catholic, had been killed in a bicycle accident last Tuesday evening while riding on a country road.
We are still struggling to reconcile ourselves to this new world, in which Zippy no longer roams about skewering sloppy thought, and so enlightening all of us his readers, interlocutors and students.
It was a severe and devastating blow, completely unanticipated. Zippy was neither old, nor – so far as we knew – ill. So his death came out of left field. No one was prepared for it. He had, we all thought, several decades more of good, fruitful work in him, that all of us would have enjoyed, and that would have profited us all, and man, and the whole human project. We looked forward to that prospect, blithely, happily, as if we possessed it already. Now, it is ripped away from us. We find ourselves bereft, lost, bewildered.
And: we miss him. We want him here with us, still. God damn the evil circumstance that took him from us. And – and – God bless that taking, as proper (as it must have been, necessarily) under the purveyance of Omniscience.
Blessed be the Name of the Lord. Amen. Lord, bless and keep thy faithful servant Zippy Catholic, and make him soon fit to enter into the coruscating Light of thy Holy Presence. Help and heal all his wounds, correct all his defects, and complete him. All this I pray, in the Name of the Father, and of the Son, and of the Holy Spirit. Amen, amen. Hallelujah, hallelujah, thanks be to God. Amen, amen.
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I have for many years corresponded with Zippy as a friend and shieldmate in the culture wars. I don’t know when exactly he started writing online, except that it was somewhere around the turn of the century (2002, I think he told me), when he began commenting as Matt – his true Christian name – at View From the Right, the seminal Traditionalist blog begun by our own Jim Kalb and immortally continued by the late Lawrence Auster. Matt’s career as a commenter at VFR was brilliant. With Jim and Lawrence, he was important in and influenced the early discourse that found later elaboration in both Neo-Reaction and the alternative Right. Among other things, he came up in those early years with the term ‘unprincipled exception,’ which has since entered the lexicon of the Right as an essential tool of analysis in understanding liberalism.
Later, Zippy became a regular contributor at that other crucial Christian Traditionalist site, What’s Wrong With the World. There among many other things he began explicating his profound and rigorous analyses of two moral issues sadly neglected in these latter days: torture, and usury. He wrote also with acid ruthless acuity on issues of sexual morality, and in particular on the incoherence at the core of liberalism, which – as he noticed and brilliantly explained – pursues the authority to impose upon all and sundry its notion that authority per se is illegitimate.
He continued this work at his own eponymous blog, where he composed and published his indispensable Usury FAQ (available at Amazon and as a free online book), and where he gathered to himself a convocation of sparkling wits, and a conversation seldom equaled for brilliance anywhere on the web. And that’s saying something.
Zippy’s work on usury was of particular importance. Not so much because it was astonishingly good, penetrating, insightful, and – this is important – savvy both theologically and financially. It was all that. But what is much more, it was revolutionary, in the good way. It upended the modern attitude toward full recourse debt – which is to say, usurious debt – by noticing the crucial, indeed the simply vast moral and spiritual difference between full recourse debt (collateralized by human life value) such as we see in student loans and credit card debt, and non-recourse debt (collateralized by real property) such as we see in mortgages, most auto loans, business financing, and so forth. In short, Zippy noticed, and showed, that full recourse debt is in effect a sort of slavery. As such, it treats men as means, rather than ends in their own right.
Which is why usury – full recourse debt – is a mortal sin.
This was not a new insight. As Zippy copiously and exactly showed, it had been the explicit, and official, and widely understood doctrine of the Church (and indeed of many human cults and their derivate cultures) from the very beginning, that had fallen into desuetude only recently (as the Church reckons recency). Zippy’s achievement was simply to discover that this was all so. Being himself as a businessman and entrepreneur financially astute, he read the Church’s dogmatic pronouncements of centuries, and understood what they meant under the terms of modern finance. Then, he applied that understanding unflinchingly.
He managed to see the plain words written on the page before him so clearly and honestly as to let his own mind be blown, to overturn and then to transcend its previous hard won understanding.
To thus see beyond the purely libertarian notions of modern finance to this bedrock of moral truth that ought – objectively ought, on pain of hellfire – to form what we think of as possibly OK in finance, and so that ought to conform our thoughts and then our practices to moral reality: that took brilliant insight of epic proportions. What is more: it took terrific moral courage and intellectual honesty. It took guts, to dare to see as Zippy saw.
I am a financial professional – indeed, a finance nerd, as Zippy once characterized us both to me – and before I read him on usury I had no notion of what Zippy had discovered. I had long thought of usury as a quaint, abandoned, obsolescent, indeed somewhat ridiculous notion, like the luminiferous ether and mercantilism. He radically corrected my notions of the moral bedrock of finance, and so, by logical extension, of economic transactions generally.
[Mercantilism too has since then been somewhat rehabilitated in my eyes (with major qualifications of my own). Of the luminiferous ether, I am not yet so sure. But about that, I shall say only this: too often in my intellectual life have “outmoded, superseded, and in retrospect fairly ridiculous” notions turned out to be the simple truth, for me to blithely reject the notion of the ether, and of the absolute inertial frame that it entails, as just, simply, wrong.]
No one does that with me. Zippy did. It was hard. Hard for me, that is; Zip had already been through that paradigmatic revolution, all by himself. I had his help with it. I am grateful to him.
He took the further step of realizing that, just as in her public pronouncements and teaching the Church a few years ago “forgot” – i.e., she pretended to forget – that usury is a mortal sin, so likewise is she at this very moment engaged in “forgetting” – i.e., in pretending to forget – that adultery (and, now, in its train, all sorts of other things, as contraception, abortion, homosexuality, God knows what is next, but apparently it is to be paederasty) is a mortal sin.
This realization bore down upon him inexorably – and, thanks to his forthright writing on the subject, likewise upon me, and many others – the realization that the mere untrammelled individual liberty beloved of the modern liberal dispensation both entails and presupposes moral nominalism, and thus the implicit embrace of mortal sin, and so the historical welcome of spiritual disaster, aye and then of disaster economic, political and cultural – of disaster biological.
It is a dire, dour thought. Zippy faced it squarely, and told it forth fearlessly. God bless the man.
Zippy’s style was acerbic, dense, terse, trenchant. He could pack more into a paragraph than most writers can unreel in a whole essay. He suffered no irritation with especial gladness, but fools particularly irked him, and he was mercilessly honest and straightforward in identifying and shredding to bits the errors of his interlocutors – including me. So, we learned a lot from him.
Most of all, Zippy was a deeply faithful, deeply knowledgeable Catholic layman. He was a true Son of the Church – not least, in his evisceral criticisms of her ministers. The principles of the faith were simply his own; that was all. He would not compromise them for any reason whatever. So he followed their logic wherever it took him. I remarked to him once that this often took him right through what had appeared to be formidable brick walls.
Zip had no response to that. It was as if he were shrugging, to say: “Well, what else could I do, and still live?”
What generally appeared on the far side of those walls was the clear light of spacious open day; of sanity, and of health. Zippy was busting through the brick walls of a sick wicked prison.
Zippy’s unblinking, unsparing honesty was but one aspect of his aweful fidelity to his Lord. He could not love Christ and also anywise at all corrupt the pure doctrine of his Body, so far as Zip himself yet reckoned it. He could not insult and wound his Master, by holding his tongue for fear of insulting anyone else, thereby betraying Truth himself.
This unbending integrity was I think the source of his tremendous personal magnetism. It was astonishing. I cared enormously whether or not Zippy agreed with this or that notion I had found credible. If he agreed with me, I felt as sure as sure that I was probably correct. If he did not, well then I had some work to do, by God. Sometimes I convinced him; sometimes I argued him to a standstill. Never, though, did it turn out that I simply proved him wrong (not to him, anyway!). Rather, it seemed usually to turn out that we had been saying the same things, in different and only apparently irreconcilable ways. Sometimes it was Zippy who figured that out, sometimes it was I. But almost always – sometimes after stiff rhetorical blows given and suffered – we ended in agreement.
As for those times when we never arrived at agreement, why, there is no end to the time we may have to hash things out, in God’s love.
Zippy is one of the best minds – intelligent, clear, coherent, careful (in both senses of that word), and simply good – that I have encountered. He is a true friend to me, and a teacher. I shall miss him horribly.
Vale, Zippy, my dear good friend. How sad am I, at this your stirrup cup! How bitter is that draft to me, that is so sweet to you! How bereft am I at your departure, indeed, and lonely, and forlorn! Yet soon I feel sure, soon shall we meet again, as under the magistry of Heaven is soon truly reckoned; and so then shall we converse, long and long, and delightfully; not, then, by mere email and internet posts, but face to face. Then shall we engage again as in this life we did, in many lethal happy disputes, like the men of Valhalla. You shall slay me, again and again; and then, on other days, I shall slay you. And afterwards, every time, we’ll raise a glass and rejoice again together, recounting to each other the story we both know perfectly well of the battle just ended, of the beauty of this thrust, that parry, and then of the final just dénouement, that settles all even as it kills. Until then, my friend – so soon shall it be, thank Heaven, as we then shall reckon things – as, indeed, you already do. Salaam, my friend; shalom. So long.
Love, and blessings, and prayers. Give my love to our dear Lawrence.
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Zippy the anonymous Catholic blogger was nowise modest. His yes was yes, and his no was no, and that was that, by God, take it or leave it, and devil take the hindmost (quite literally). But Matt the earnest Christian family man was quite modest. His own family had for the most part to find out for themselves that Matt was writing as Zippy. As his brother told me, Matt did not want his own person – his own life, his natural concerns for his family and friends, and so forth – to interfere in any way with the propagation, the perfection, and aye the correction of his message as Zippy. Or vice versa. So he kept the two personae pretty strictly separate.
I understand that perspective. I share it, and honor it. I therefore ask that you do the same. Please don’t speculate about who Zippy Catholic might be. His real name is Matt; leave it at that. Let Matt rest in peace, and let his family reel and stagger at his sudden untoward violent absence, and then left to themselves eventually begin to recover, so to find some new equilibrium not too horrible, perhaps endurable, and maybe even – God send – noble, and good.
Perhaps someday the brilliant work of the anonymous blogger Zippy Catholic will redound here below to the public honor of Matt the man. But, let that day arrive under the auspices of his family, and what is much more of his Lord. Zippy after all, with Matt his author, is first and foremost a loyal vassal of Jesus Christ, and vowed above all things to the purposes of his Lord. Let those supernal purposes be dispositive then for us, no? Perhaps it is that the future usages under the Provenance of Heaven for the sake of all our souls of the life’s work of that poor and faithful man, Matt, and of his writings under the nom de guerre of Zippy Catholic, are served best by a public ignorance that Matt is in fact Zippy.
Let Zippy live as Zippy, and Matt as Matt. God bless them, both and one.
Of one thing we may after all be sure, that should settle all our worry on Matt’s behalf: his work as Zippy redounds already to Matt forever in the Book of Life, and in the Life of the Heavens. Matt’s work as Zippy is there already perfectly public. There, soon, shall we all know him perfectly well – and, he, us, who are his friends.
Let us all be satisfied with that.
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I am who I am. As with so many of the mortal crises of my own life, Zippy’s death – my friend Matt’s death – has triggered in me a wonderful thundery hale storm of new theological and metaphysical comprehension, that has I think important consequences for the way that I – that we – understand and order life concretely here below in relation to him, and to all our beloved dead. None of it is new. As with most of the things I figure out, it turns out to be standard issue doctrine, well understood by the Church – but not by me, or anyone who ever taught me – from the beginning.
I shall write about that stuff in a subsequent post, which I shall dedicate to Matt.
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Post Scriptum: In the days since I learnt of Zippy’s death, I have corresponded about it with many friends I had in common with him in the online community of Reaction and Tradition, Catholic and otherwise. Those conversations affected the course of my thoughts and feelings about him, his online career, and his death. Naturally therefore they contributed to what I have written above. I thank my correspondents, all.
It is only right that in this connection I should particularly acknowledge my conversations with our regular commenter Terry Morris, and with Lydia McGrew. Both of them helped me a great deal, and some of what I write above echoes the things they wrote to me.
The Orthosphere 
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Beautiful, Kristor! Thank you for writing and sharing this.
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Amen, Kristor! The Lord lift up his countenance upon you and give you peace.
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From a reflection on Job 21, by Fr. Patrick Henry Reardon, the following internal quotation :
Perhaps this understanding, coupled with the assurances of Romans 8:28, is all that can be had to sustain us in the current crisis.
Thank you, Kristor. You’ve captured his personality (at least, his online personality) perfectly.
There’s a sense in which everyone is irreplaceable, and another sense in which no one is, but there is a practical, non-sentimental sense in which Zippy was irreplaceable to the reaction/broader orthosphere. Most of the things we write are ideas that are “in the air”, and if one person doesn’t write it, another person soon will. I think everyone will agree that if Zippy hadn’t performed his study of usury, it wouldn’t have been done by someone else; it simply wouldn’t have happened. Few had the ability, and even fewer had the prior interest. Who would think to study usury when Catholics are all arguing about divorce? And yet it turned out to be very relevant, this past battle which we had forgotten and the Kasperites remember as a precedent. Few among us anti-moderns ever even tried to match Zippy’s rigor. It is a common thing, after the great intellectual effort to break free of the Enlightenment, to simply collapse in exhaustion, as it were. But Zippy kept on digging, giving the best illustration of my saying that rejecting the Enlightenment is only the beginning of thought.
Nobody else does quite what he did, which means we will simply have to get by without it. And we will, but it’s a shame.
Yes. No more new posts at Zippy’s site. It’s a feeling of impoverishment, on that score, just like the feeling I had when Lawrence died. But I now feel quite sure that I shall not have to do without Zippy’s guidance altogether, even respecting new things that come up. More on that later.
Around the time that Zippy was writing on usury, E. Michael Jones published a big book about the history of usury and capitalism, but he isn’t anywhere close to Zippy on theory. It was more like a 1500 page history of economic injustice and its apologists. To me it felt like something was “in the air”.
Indeed, it’s when one reads what other traditionalist Catholics were saying about usury at the time that Zippy’s distinctiveness is most clear.
With respect to usury, and the Church’s historic position on usury as explicated by Jones, I seem to recall that Zippy was critical of Jones for lack of clarity on the subject. I could be wrong about that, as memory may be failing me in this particular case. I do know that Zippy respected and recommended certain of Jones’s works, including but not necessarily limited to, Libido Dominandi and one other whose title escapes me at the moment. I haven’t read Barren Metal (Jones’s latest book) as yet, but my understanding is that Jones is more clear about the evils of usury in that work, than he has been in previous books.
I read it. It’s clear, good, strong, history, but not much good on financial or ethical theory.
Thanks, anon. Somebody needs to turn Jones onto Zippy’s Usury FAQ.
Thank you, Kristor.
In my own mental scheme of things, Zippy was one of the ‘Big Four’ in the Traditionalist right blogosphere, and one of only four blogs (traditionalist or otherwise) from which I would read every new post. Along with Jim Kalb, I regarded him as one of the two most penetrating critics of liberalism. His precision of thought was impressive, and he has greatly influenced how I think about things. I very often found myself searching Zippy’s blog when I was looking for a way to articulate a problem with liberalism or positivism or postmodernism or whatever to an interlocutor.
One trait I appreciated about Zippy that he shared with Lawrence Auster was that he spoke authoritatively and was willing to criticize others on the right for their errors or their bad behavior. He had a fierce and tenacious commitment to the truth and didn’t care if the positions he took irritated others (another trait he shared with Auster). At a time when the relative success of the secular right has tempted many on the religious right to prioritize success over truth and to avoid ‘punching right’, I found this very refreshing. Zippy didn’t give a damn who he punched, so long as the truth was at stake.
Reblogged this on ReactionaryThought and commented:
RIP Zippy Catholic
RIP Zippy Catholic.
As for good men dying before their time. I notice that unless God has directly tasked a person with a mission to complete generally believers are on their own in regards to their own safety. Supernatural interventions to save are rare in the scheme of things.
RIP Matthew “Zippy Catholic”
May his memory be eternal!
RIP Zippy Catholic.
RIP Zippy Catholic.
Thanks for this. God bless you and God bless Zippy and his family.
There is no need for me to go into detail about Zippy’s contributions. Suffice it to say that he put forth most trenchant analyses of liberalism and modern usury, putting forth eternal moral truths in a manner so to pierce through the modern’s defenses. Having great courage, he faced down the fact that much of his foundational modern beliefs were complete lies, and emerged not just with his eyes opened, but also opening the eyes of others.
Though understandable, it is regrettable that his nerve failed him, at least partially, with regards to church matters: on Protestantism, the current Pope and the old pederastic scandal.
Nonetheless, he remained a formidable thinker, and moreover a lover of the truth, and also a brilliant articulator, and crowning all of these a most witty rhetorician. We will not see his like any time soon.
Zippy’s nerve never failed him. I don’t write about all sorts of things; that doesn’t mean I would not be prepared to tell the truth about them if I did, but rather only that they just don’t interest me as much as the things I do write about, and that I feel I have a particular capacity to address. Likewise with Zip. He never paid much attention to Francis or the paederasty scandal, but then, lots of other people did, and do. There are hundreds of supremely competent writers online who are beavering away at the scandals of the Church that so fill the news these days. No one but Zippy was penetrating usury (e.g.) as he could, or did.
As for Protestantism, Zippy was among the most extreme writers I ever encountered. I went at it with him online and then in private correspondence a few years ago, in a long, bitter – albeit friendly and respectful – dispute about whether Anglican masses are as sinful as sodomy. He thought they are, and vehemently said so; I vehemently disagreed. Both of us were quoting magisterial sources to each other. The man was manifestly willing to say things about Protestantism that – to him – seemed obviously implicit in Catholic doctrine, and therefore true – and that he knew would sound absolutely outrageous in the ears of his interlocutors – would provoke their outrage. As they did. He was perfectly willing to burn friendly relationships for the sake of the Truth, so far as he could see it. He simply would not budge on the Truth.
I argued him to a standstill over Anglican masses, but I never convinced him.
Lawrence was notoriously prickly and obstinate in standing for the truth, come hell or high water, and no matter whose feelings were hurt in the process, or whose ox was gored. He knew he had that reputation, and he worried about it. He once asked me if I thought a commenter had been accurate in comparing him to Savonarola. I said, “yeah, you are like Savonarola, but in a good way.” Or something to that effect. As in, a Savonarola preaching *against* enthusiasm and mob frenzy.
Compared to Zippy, Lawrence was a pussycat.
Zippy’s nerve never failed him. I don’t write about all sorts of things; that doesn’t mean I would not be prepared to tell the truth about them if I did, but rather only that they just don’t interest me as much as the things I do write about, and that I feel I have a particular capacity to address. Likewise with Zip. He never paid much attention to Francis
He did write about the Pope, trying to excuse him as a ‘middle manager just over his head’, or somesuch, I forget the wording he used. It was very understandable, but even still a refusal to see what Francis really is.
On Protestantism, I would say that in our discussion he was demonstrated wrong on Sola Scriptura, but he didn’t budge.
But right now I don’t care to argue at length whether Zippy was perfect or not in these respects. The only difference it makes, really, is that my eulogy isn’t completely glowing but unvarnished. He was still a great warrior for the truth, and I mourn his passing.
Fair enough. Zippy would be the last to suggest that you should ever budge when your apprehension of truth had not compelled you to do so. We can take all this up with each other again in Valhalla.
GJ:
He did write about the Pope, trying to excuse him as a ‘middle manager just over his head’, or somesuch, I forget the wording he used. It was very understandable, but even still a refusal to see what Francis really is.
As Kristor implies, we shall see. I highly doubt that from where you stand you are able to see clearly “what Francis really is,” even if it happens to turn out that you are right in what you have concluded.
Thank you for sharing this memory Kristor.
May Zippy rest in peace. In paradisum…
Here is our post at What’s Wrong With the World
http://whatswrongwiththeworld.net/2018/09/zippy_catholic_requiescat_in_p.html
Back in the days of our national torture debate, I was talking with my little sister, a Marxist university professor and social justice activist, about how grieved I was that so few seemed to understand why torture is always wrong, but how grateful I was for conservative voices speaking up against the GOP. She recommended that I might like to read Zippy Catholic, and I’ve been checking in on him ever since.
I am not as well educated as my sister, or Zippy. Certainly I have no training in theology or philosophy. I barely have a BA. I often did not understand him. I struggle with his arguments and his continual referring back to his own earlier arguments in such a way as to make me dizzy.
But in spite of all that, I am enormously grateful to him. He was like a bright light shining in the days when I couldn’t believe how degenerate my countrymen had become over torture.
I hadn’t known that the usury FAQ is now a free ebook. I will be looking to get that. When I read several days ago of his death, I sat here and silently wept for a while, surprised at my grief. Had he, or much of any of you, known me in real life, he’d have written me off as an evil female. Of that I am quite positive, but still, he was like a great bright light.
So there’s your view from a struggling former lefty.
Thank you, Lord, for lending us Zippy Catholic for a season.
Dear Vera Lee, I’m sure Zippy would not have written you off as an evil female. Christians don’t write off sinners afflicted with evil.
RIP Zippy Matt.
Salute!
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Thought I would mention that I am lecturing on political ideology to high school seniors today and using Zippy’s explication of liberalism.
That’s great, Josh. It was nice to know you!
Seriously, I’m sure we would all be interested to see how that turned out.
Eternal rest grant unto him, O Lord, and let perpetual light shine upon him. May he rest in peace. Amen.
A beautiful and wondrous post. May his family be consoled and he rest in the peace of Christ.
I always found it slightly puzzling that he used a deadly pen that was “torture” for his interlocutors, although I suppose it has a long and hallowed tradition (i.e. St. Jerome). The culture of the comboxes is cutthroat but he never let culture determine his thinking.
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I stumbled across this long after anyone will read it, but I wanted to make one small correction in the comments above, about usury, which became Zippy’s most forceful issue. it is said above that
In short, Zippy noticed, and showed, that full recourse debt is in effect a sort of slavery. As such, it treats men as means, rather than ends in their own right.
Which is why usury – full recourse debt – is a mortal sin.
Actually, it isn’t. And Zippy, (when he was being careful) would have said as much. Once in a while he let the detail slip, but usually he didn’t: It isn’t the mere basic reality of full recourse debt that is a mortal sin. And usury isn’t defined as full recourse debt. It is charging interest on the use of the money that is where the sin lies. If you have a full recourse loan at 0 interest, usury does not arise and there is no moral problem with it under the usury teachings, none at all. Not even a hint or smidgen.
Admittedly, Zippy did comment about how full recourse debt was like to slavery, but the connection between the charge for use and the entailment of the debt on the very life of the person (recourse) was one that he sometimes allowed to come through in a confused way – as the comment above is confused.
Absolutely right: sloppiness on my part. I should have written that “usury is charging profitable interest on full recourse debt.” I didn’t notice the oversight when I was writing the Eulogy because the phenomenon of charging interest of 0% on full recourse debt is never seen in real life. But then, negative real interest rates on mutua are possible these days, come to think of it. Note however the further qualification that usury is *profitable* interest on full recourse debt. Negative real interest is not profitable to the lender, so in writing such a mutuum he could not be committing usury. But in such a case, the *borrower* would in effect be charging profitable interest on the note. Would he be the usurer in such a case? It’s an interesting question.
If Zippy were here, he’d make short work of it. My first take is that borrowing at negative real interest rates under the form of a mutuum is not usurious. But I’ll need to think about it some more; certainly it is unjust, ergo sinful. The only question is whether it falls under the category of usury.
The other intriguing aspect of this – and another factor of my rhetorical oversight in the OP – is that one of Zippy’s most important points regarding usury is that the moral problem thereof lies, not in the fact or the rate of interest, but in the character of the note. Interest at any freely negotiated rate on a non-recourse note is not usurious. Only profitable interest on full recourse notes is usurious.
*Interest per se is not usury.* When Zippy finally drove that through my head, it was one of the great “ah hah” moments of my intellectual life.
I think negative interest rate ‘full recourse borrowing’ is sinful. The argument I use is simple.
The sin in full-recourse interest-bearing lending comes from the discarding of reality involved. Charging interest in such a case is separating real things that cannot be separated and using that separation as your justification, viz. usury is ultimately reducible to the sin of nominalism.
(N.B.: I should in clarity say I am using Aristotlean ideas of abstraction here, so when usury is reducible to nominalism I don’t mean ‘is nothing but’ nominalism, but rather drawing them into a categorical identity.)
The same relation pertains, in reverse, when the lender offers to pay the borrower interest and allow the borrower to encumber the lender’s person until such a time as the loan is repaid. Whether it is a mortal sin or not is a different question, though I tend to think the answer is ‘yes’.
The question of whether or not any lender would ever allow a borrower to encumber his person until repayment of the loan is also separate. I certainly can’t see a case where that would happen, and I can’t believe that is what is actually proposed with nominally negative interest rate borrowing. (It’s definitely true that J.P. Morgan does not demand the use of Jerome Powell’s person as a security to make good the interest that the Fed owes that organization on negative-interest loans.)
Thank you for responding.
The sin in full-recourse interest-bearing lending comes from the discarding of reality involved. Charging interest in such a case is separating real things that cannot be separated and using that separation as your justification, viz. usury is ultimately reducible to the sin of nominalism.
I would tend to agree. This is, also, how St. Thomas describes it: the lender charges once for “the thing” and then again for “the use” as if they were separable, when they are not.
I would argue, in the case of negative interest, that it is clearly not the case that the lender is charging once for the use and once for the thing. The interest payment isn’t at all like the charge for use (even though the charge for use is a kind of unreality): it is roughly speaking a premium fee for the security of “the thing”, i.e. the amount to be paid back. The lender is paying a fee to be ensured of getting back what he lent. This is almost indistinguishable from paying a fee for a deposit contract, much as you pay a fee to a bank for a safety deposit box. And since nobody has ever suggested that such a contract (for a fee) represents a sin, I would hesitate to suggest it is wrong.
Adding in a feature that the negative interest loan (or fee-for-deposit) contract is to be “full recourse” to the borrower does not seem to be something that changes this. Either way, “recourse” merely implies that society can force the borrower to meet his obligation to repay with anything of value that the borrower might have (or might acquire), which is something society always had the power to enforce anyway in its power to enforce contracts. Making it explicit in the terms of the loan contract doesn’t add to the powers civil authority had to enforce the contract.
I completely agree with this. Above I was attempting to construct what a ‘full recourse’ negative interest loan would look like. It’s hard, because frankly why would anyone agree to such a thing? This thing you have described is a non-recourse loan; if it can be conceived as simply paying a regular fee to ensure return of the principal, then another way to say that is the lender can just decide not to pay, accept the loss of the lent object, and move on with his life. This is exactly similar morally to a loan where the lender can return the object in order to stop obligatory fees for continuing its use and move on with his life.
The only case where lending is usurious is where that is not the case and the fee must be paid nonetheless. Therefore, the only case where a negative-interest loan would be a negative image of usury would be where the lender is somehow still liable to the borrower if he decides to surrender the principal and walk away. I admit I can’t think of any reason why anyone would sign such a contract, or at least no reasons intrinsic to the relationship itself.
This thing you have described is a non-recourse loan; if it can be conceived as simply paying a regular fee to ensure return of the principal, then another way to say that is the lender can just decide not to pay, accept the loss of the lent object, and move on with his life.
I don’t think that is necessary. Assume for the moment that the lent thing is a consumable that will be consumed by the borrower (for we are considering loans like to ordinary mutuum loans, only with negative interest). Then the borrower is going to pay back by some OTHER wealth than what he borrows (and consumes). If the fee the lender must pay is paid in full up front, then there is no “walking away” by refusing to “continue” to pay more fees. And recourse is present if the lender has the legal / moral right to demand repayment in wealth not limited to any one thing, or any specified list of things, that the borrower owned at the time of the loan, but also extending to wealth he may yet acquire after the loan is made. It is the lender’s reach forward into potential but not yet actual wealth that characterizes recourse, that crimps the borrower in a way that cannot be “satisfied” by pointing at a definite list of objects he already owns and saying “no more than this”. The fact that a lender may walk away by not demanding repayment has never distinguished recourse from nonrecourse, because it has always been true (of all loans) that a lender may forgive any loan and simply give up on repayment at all.
In other words, what you are suggesting is a loan where it is the lender who is on the hook for payment “no matter what”, i.e. recourse to the lender rather than recourse to the borrower. Since in negative interest the lender pays the FEE, whereas the borrower pays the repayment (for what was loaned), this is indeed an extraordinarily odd arrangement, and I cannot imagine anyone ever entering into such a thing. Arguably, it would be an unconscionable contract for a lender to be obliged to pay the fee even in the absence of requiring the borrower to repay the loan, i.e. a contract no sane society would uphold.
Of course, this is what pagans and medievals thought about usurious loans, too, so the fact that I can’t wrap my head around why or how anyone would do such a thing is not a proof that nobody would.
Fair enough. But in a usurious loan where the lender has recourse to the borrower, the borrower wants the loaned thing to use / consume / alienate, and the question is whether he might or might not be willing to pay a premium (a fee) on top of the repayment of the loan, even if society judges such a contract immoral. One can conceive his having a motivation to doing so: without promising the fee, the lender won’t lend (in spite of the lender demanding the fee being immoral, the borrower still has to get a lender willing to lend). In our negative interest situation, though, the motivation doesn’t seem to be there if there is no recourse to the borrower: If the lender is lending and also is the one paying a premium in order to ensure the repayment (i.e. to secure the right to an amount, to be paid back in the future, equal to his lent item), the “securing” doesn’t actually mean anything if there is no (a) securing collateral or (b) securing through recourse to the borrower. So he has no motive to pay a fee to begin with. He can lend hoping the borrower will repay as justice requires, but he doesn’t need to part with a premium to do that; the fee is (in theory, that is) supposed to provide him something in addition to merely hoping the borrower is honest and able to repay. So if the point of the lender paying a fee is to ensure something more than merely that justice requires the borrower repay, there would seem to be no additional purpose served by the lender also granting recourse to the lender as still another benefit to the borrower.
The only cases I can think of where a lender might willingly enter this reverse situation such that the borrower has recourse to the lender’s person would be for factors extrinsic to the loan. For example, if some authoritative body were able to either say, “Make loans or you go to prison,” or, “Make loans and we will guarantee a positive return.”
Lending organizations have been placed in similar situations in the USA before, though not as relates to the particular strange terms of this loan arrangement.