Managerial Capitalism: Being and Becoming

At first glance, Friedrich Nietzsche’s pro-capitalist stance on private property and the process of accumulating profit (or wealth) may seem to extend a vote of confidence to the business manager as a type. After all, managers manage the private property of stockholders (which can include themselves) with a fiduciary duty to do so to increase shareholder value by maximizing profit. The notion of profit-seeking by maximizing revenue and minimizing cost is arguably too simplistic. Squeezing a workforce too much, for example, can backfire in the long term. Nietzsche was concerned about such a thing happening even though he claims that the vast majority of laborers must be kept to subsistence wages for culture to be possible. He castigates petty, short-sighted managers who do not look out for the spiritual and economic welfare of workers, and yet holds that those workers must be slavish in the sense of being exploited by employers so culture can emerge and be sustained by the rich. To be for such exploitation and yet against petty cost-cutting managers renders Nietzsche’s socioeconomic philosophy interesting as well as useful in terms of keeping a capitalist economy from being reduced to the mentality of its bottom-feeder producers. I first discuss the matter of exploitation and then turn to how Nietzsche addresses his wider socio-economic philosophy more specifically to human-resource management. Within the wider subject-heading of exploitation, very different approaches, or mentalities, to human resource management can be discerned. In dichotomous terms, there can be said to be a pathos of distance between enlightened self-interest and selfish, short-sighted greed.

Nietzsche claims that capital accumulation and economic inequality are necessary for adequate investment in culture, such that not everyone must be oriented to satisfying basic needs. Moreover, private property and accumulating money serve a more fundamental function in terms of human being and becoming, the latter being construed in terms of, growing. Nietzsche’s use of this term can be thought of in terms of Aristotle’s appropriation from the natural world for his philosophy.

It has seemed to me in life that some people may have a static orientation, whereas other people may be inherently oriented to change, as in self-development. The static orientation is based on being, whereas the default of dynamism can be said to be based on valuing becoming. It may be that people wetted to a static state of being feel threatened psychologically by change-oriented people because the latter typically want the former to work on themselves too. In a dysfunctional family in which most of the people value stasis, for example, the person who values development may ironically be scapegoated precisely because any change is rejected, even that which would make the family healthy. Translated into Nietzsche’s socioeconomic philosophy, possessing assets, or private property, applies to a person’s static nature, whereas accumulating wealth means that a person is dynamic—changing.

To Nietzsche, capital accumulations by titans, and those by wealthy people more generally, have permitted the advent of culture in terms of there being adequate investments in it—something that we moderns may take for granted even though much of human (pre) history our species was oriented to meeting survival needs. Regarding a society having some individuals rich enough to develop a cultural scene, Nietzsche insists that what Marx calls the surplus value of labor of the vast majority of workers must be transferred to the few—the capitalists—so they have enough money to invest in culture. A city benefits even though most laborers work for subsistence wages. Nietzsche relates capitalist enterprise to culture as follows:

“In order for there to be a broad, deep, fertile soil for the development of art, the overwhelming majority has to be slavishly subjected to life’s necessity in the service of the minority, beyond the measure that is necessary for the individual. At their expense, through their extra work, that privileged class is to be removed from the struggle for existence, in order to produce and satisfy a new world of necessities. Accordingly, we must learn to identify as a cruel-sounding truth the fact that slavery belongs to the essence of culture. . . . The misery of men living a life of toil has to be increased to make the production of the world of art possible for a small number of Olympic men.”[1]

Slavery here is in the sense that the laborers are held to such a minimum monetary compensation that they cannot free themselves from working so their basic survival needs are met. For the privileged class—the capitalists—to be removed from the struggle for existence is a late-arriving novelty for our species, and thus the advent of culture can be construed as a luxury rather than as an intrinsic aspect or manifestation of human existence. Put another way, even though the dominance of the capitalists over labor, which I submit is a better description than is the word slavery, “belongs to the essence of culture,” culture does not belong to the essence of our species. So even though culture raises the entire species from being oriented to satisfying subsistence needs, the scaffolding that is constructed to reach the rarified air can be viewed as artificial.

Neither is the exploitation that is necessary for culture natural. Landa argues that the relevance of Nietzsche for capitalism lies precisely in slavish exploitation. Even though Nietzsche claims to have “stood far above any strictly material concerns, the basic fact cannot be ignored that, if his ‘aesthetics’ necessitate slavery, . . . if the production of ‘culture’ means the ruthless material subjugation of the vast majority of people to the benefit of an elite, then a socioeconomic theory of exploitation is inscribed into the very core of his aesthetic theory of noble culture. And it precisely here, I argue, that Nietzsche’s pertinence for capitalism lies, in the dreary fact of exploitation . . .”[2] Although the economic elite undoubtedly benefit, however, it is the species that benefits from culture. Put in terms of socioeconomics, a city benefits by having some buildings devoted to culture rather than to the means of production. Although this point renders the exploitation somewhat better morally, Nietzsche’s criticism of modern morality means that he rejects the normative objection that economic exploitation is unethical. Considering that the benefits of accumulated wealth for culture benefit not just the rich and the exploitation (i.e., economic “slavery”) is spared a damning ethical verdict, it is not difficult to see why Nietzsche would be in favor of culture. Of course, apart from Nietzsche, the holding of the vast majority of a workforce to subsistence wages while an economic elite gets rich off the transferred surplus value of labor is ripe for ethical castigation. Even if we reject Nietzsche’s socioeconomic account of culture as a result, Nietzsche presents another rationale for being wealthy—one that is existential in nature.[3]

Private property and accumulating wealth correspond to being and becoming, respectively. As such, Private property and capital accumulation are “firmly established by Nietzsche as representing the rudiments of life itself.”[4] Nietzsche claims that “those who have possessions are of one mind on one article of faith: ‘one must possess something in order to be something.’”[5] Does this mean that the subsistence-limited worker bees do not exist? Surely not. Perhaps Nietzsche means to count as something rather than to be something. This interpretation is in line with the businessman’s value-set wherein to count as someone is a matter of how much one possesses (i.e., how wealthy one is).

The capitalists would perhaps be less familiar with Nietzsche’s rationale for the act of accumulating possessions, including money: “But this is the oldest and healthiest of all instincts: I should add, ‘one must want to have more than one has in order to become more.’ For this is the doctrine preached by life itself to all that has life: the morality of development. To have and to want to have more—growth, in one word—that is life itself.”[6] Here, becoming is put in terms of growth as a natural process of life.[7] The will to power is for Nietzsche the will to life, and strength is the self-confident embrace of the fullness of life in overcoming obstacles in order to feel the pleasure of power. According to Landa, Nietzsche claims that to “live truly and properly is therefore to Exploit, Possess and Accumulate . . . Under this light, the will to power reveals itself as the metaphysical extension of the will to money.”[8] But do counting as something in virtue of having material possessions and growing as a plant does count as metaphysical? Moreover, what use did Nietzsche have for speculative metaphysics? Rather than being grounded in existentialism, Nietzsche’s view of being and becoming may bear a family resemblance to Heidegger’s claim that a person as a dasein, or one that is, comes to realize oneself hammering in an open field; only in action does a person realize oneself as one is as a that (i.e., an entity). The action to which Nietzsche refers is only open to the capitalist, however, in accumulating wealth, for the worker bees are enslaved to meeting their subsistence needs and thus are cut off from becoming in the sense of growing.

Lest it be concluded that Nietzsche’s view favors business managers, including executives, rather than stockholders who are oriented to the long-term value of their stock, Nietzsche spanks down the typical managerial primacy of immediate profit: “No doubt, the wide-ranging, multi-faceted perspective of the philosopher, as compared with the narrow view of the standard market-apologist intent on immediate gains, endowed the former a much more flexible class position. . . . Since the preservation of the class hierarchy and the prevention of a comprehensive socialist alternative was the foundation of Nietzsche’s social vision, he was at times perfectly willing to criticize naked exploitation of labor when that meant dangerously exacerbating class enmity to the point of imperiling the overall stability of the system. As in the following example: ‘What we now refer to as justice, is from this point of view a highly refined usefulness, which does not take into consideration only the present moment and exploits the opportunity, but rather reflects with responsibility on the lasting consequences, therefore taking care of the well-being of the worker as well, of his physical and spiritual satisfaction, in order that he and his descendants will continue to work for our descendants, and will be available for a longer period of time than a single individual’s life. The exploitation of the worker was, as one now understands, a stupidity, a ruthless enterprise at the cost of the future, which endangered society. Now we have before us almost a war, and the price for achieving peace, for sealing contracts and wining trust, will at any rate be very high, since the foolishness of the exploiters was great and long-lasting.’”[9] A company’s management that can be characterized by the short-sighted, petty greed of its managers is sub-optimal from the standpoint of maximizing stockholder wealth in the long-term, and thus is not in line with being and becoming. Even in terms of the wealth of non-stockholder executives, cutting labor benefits that are already trivial so as to boost next quarter’s bonus detracts from being able to retain workers whose efficiency can “grow” the company, and whose sons and daughters may decide to work for the company. In short, to the extent that the manager as a type cannot master (i.e., overcome) the instinctual urge of greed manifesting as short-sighted, selfish pettiness, Nietzsche’s pro-capitalist philosophy is not in favor of managers of such a pathetic mentality of weakness. The philosopher’s (amoral) approbation is reserved for managers who apply enlightened self-interest to management of stockholder wealth concentrated as a company by looking after non-supervisory employees in order that they will (and their offspring, if hired) continue to produce such that stockholder wealth can grow like a tomato plant on a vine during a warm, wet summer.

It is ironic that it is a philosopher who “chides economic liberalism on strictly pragmatic grounds and promotes, against the irresponsible zeal to maximize profits at the immediate present, the contraceptive measure of a ‘highly refined usefulness’ whose purpose is to ensure that the very principle of profit will survive on an enduring basis. To the extent that the ruthless practices of economic liberalism, by over-exploiting the worker, become themselves a potentially destabilizing factor jeopardizing the future, Nietzsche is willing to show his teeth to the masters as well, and recommend what one commentator readily celebrated as ‘an enlightened labour policy.’”[10] Nietzsche’s esteem for the will to money as possessing and accumulating goes not include the greedy zeal to maximize profits without adequate attention being placed on resisting expedient measures that are oriented to temporarily boosting quarterly profits and the stock price.

Beyond taking away employee perks such as complimentary gym memberships even though exercise can elongate how long an experienced employee can work, managers can detract from the long-term monetary value of a company (and stockholder wealth) by being petty with customers. When grocery-store companies decided to charge customers for paper bags, customers rightly perceived the managers as petty. When petty managers of airlines figured out that they could boost revenue by charging customers for seats with extra leg-room and for checked luggage—even applying a weight-limit to each suitcase—the business judgment was that any business lost in the long-run from customers feeling “nickeled and dimed” by a greedy management would be made up for by the more immediate revenue gained from the fees. An example of a viable substitute in the long-term in North America could be high-speed trains.

In contradistinction to banal, incrementalist managers, Nietzsche’s esteem for self-confident strength, which says in terms of its natural rather than contrived, self-interested generosity, what are the parasites to me? A person having an overflowing surplus of power (and wealth) and is oriented to life can be contrasted with the new bird of prey—the weak who seek to dominate by petty cruelty. Whereas the self-confident, strong business titan is oriented to the pleasure that is obtainable from a large, successful business deal, the weak manager greedily clutches at cutting costs budget-item by budget-item. Whereas courageous titans can be likened to the Greco-Roman conquerors whose nature it was to gain land and captured slaves, petty, control-obsessed managers can be likened to ascetic priests whose weak nature it is to inflict “Thou Shalt Not!” as a weapon to beguile the self-confident strong.

Managers who market themselves as leaders rather than managers while actually micro-managing subordinates are nonetheless innately weak rather than strong. The “leadership versus management” dichotomy itself may be a guise wherein petty managers seek to rebrand banal management as something that is enlightened in terms of self-interest. To be sure, Nietzsche points to the possibility of such self-interest being adopted by managers in order to meet the spiritual and (basic) material needs of workers so the best of them do not leave. Indeed, such economic self-interest should extend to take into account generations of workers.

Therefore, even though Nietzsche’s philosophy can be regarded as pro-capitalist because private property and accumulating wealth enable a sense of being and becoming, respectively, it cannot be said that the philosophy lauds the business manager as a type. Rather, it depends on the underlying mentality of a particular manager and even of a company’s management. Organizational culture can play a large role in forming and maintaining managerial values, norms, and practices. The culture of Enron was dramatically different than that of Ben and Jerry’s, for example. Just because Nietzsche’s philosophy can be reckoned as pro-capitalist does not mean that he would support any management. In fact, capitalism itself need not be defined in praxis by its lowest common denominator. Nietzsche’s philosophy can be utilized to keep that from happening, or to raise an economy based on private property and the market-mechanism above the squalid mentality of its bottom-feeder producers.

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1. Friedrich Nietzsche, “The Greek State,” in On the Genealogy of Morality, trans. Carol Diethe (Cambridge: Cambridge University Press, 1994), pp. 178-79.
2. Ishay Landa, The Overman in the Marketplace: Nietzschean Heroism in Popular Culture (Lanham, MD: Lexington Books, 2007), p. 28.
3. This is not to say that Nietzsche was an existentialist. The Leibniz scholar, Patrick Riley, once asked me whether I thought Nietzsche’s philosophy falls under existentialism; he didn’t think so either. Neither is the philosophy nihilist; Nietzsche asks, “what is nihilism today if it is not” being “weary of man.” Friedrich Nietzsche, On the Genealogy of Morals, in Basic Writings of Nietzsche, trans. Walter Kaufmann (New York: The Modern Library1968), p. 480.
4. Ishay Landa, The Overman in the Marketplace: Nietzschean Heroism in Popular Culture (Lanham, MD: Lexington Books, 2007), p. 28.
5. Friedrich Nietzsche, Beyond Good and Evil, trans. Marion Fabor (Oxford: Oxford University Press, 1998), p. 77.
6. Friedrich Nietzsche, The Will to Power, trans. Walter Kaufmann and R. J. Hollingdale (New York: Vintage Books, 1968), p.  77.
7. Here Nietzsche is in line with Aristotle.
8. Ishay Landa, The Overman in the Marketplace: Nietzschean Heroism in Popular Culture (Lanham, MD: Lexington Books, 2007), p. 29.
9. Ishay Landa, The Overman in the Marketplace: Nietzschean Heroism in Popular Culture (Lanham, MD: Lexington Books, 2007), p. 30. Translating from Friedrich Nietzsche, Samtliche Werke: Kritische Studienausgabe in 15 Einzelbanden (Herausgegeben von Giorgio Colli und Mazzino Montinari, Berlin/New York: Walter de Gruyter, 1988), Vol. 2, pp. 681-82.
10. Ishay Landa, The Overman in the Marketplace: Nietzschean Heroism in Popular Culture (Lanham, MD: Lexington Books, 2007), p. 31. Landa quotes from Keith Ansell-Pearson, An Introduction to Nietzsche as Political Thinker—The Perfect Nihilist (Cambridge: Cambridge University Press, 1994), p. 91.

The E.U. on Anti-Trust Enforcement: The Case of Google

On June 19, 2025, when the European Court of Justice, the E.U.’s supreme court, received a nonbinding opinion from the advocate general, Juliane Kokott, recommending that Google’s appeal against an anti-trust fine of €4 billion be dismissed by the court. The E.U.’s executive branch, the Commission, had found in 2018 that the company had “used the dominance of its mobile Android operating system to throttle competition and reduce consumer choice.”[1] I contend that the company’s written statement in response can be characterized as “stone-deaf” or oblivious to the issue at hand. Such is not an effective way of managing threats in the environment of business. Moreover, the response itself illustrates why governmental action on anti-trust on behalf of market competition is valid and necessary. I contend that the invisible-hand mechanism of a restored competitive market is more reliable than depending on managerial intentions even if they are to be based on motivation that is social-engineered from fines.

The fine of €4 billion is part of a total of €8 billion against Google for anti-trust violations over a decade, including on the company’s digital ad unit. So, a pattern of restraint of trade can be inferred. As if obvious to it, the company statement in reaction to Kokott’s recommendation included, “Android has created more choice for everyone and supports thousands of successful businesses in Europe and around the world.”[2] That the advent of android technology had given consumers another option says nothing about whether Google was also curtailing other options. That many businesses were using android technology is not a rebuttal to the government’s claim that Google was operating in restraint of trade. In fact, that many businesses were using Google’s technology means that the company’s market share, and thus market power, were enough for the company to be able to restrain competition in the industry. In wanting to brag (or advertise), the managers at Google who wrote and approved the statement were unwittingly making the government’s case. Unsuccessful companies do not have sufficient market-power to restrict or curtail competition as John D. Rockefeller’s Standard Oil did in the U.S. until that company was broken up (rather badly) by the U.S. Supreme Court on anti-trust grounds. This example begs the question of whether merely slapping Google with fines is sufficient to arrest the company’s pattern of restraining trade. Both the pattern and the bragging illustrate the tone-deaf feature of greed that narrows cognition and perception. In applying a fine to Google, the E.U. regulators would be naïve in believing that the company’s managers would then be motivated to stop curtailing competition. At the very least, the Commission’s commissioner for competition would still need to watch Google like a hawk.

I contend that it is vital to the public interest, or common good, of a society that competitive markets be protected and even created out of oligopolies by governments; this is a legitimate role for government because price-competition forces suppliers to be price-takers rather than price-setters. Only as the former are suppliers oriented to demand. This crucial role of price in a competitive market was arguably Adam Smith’s best contribution, or “value added,” to economic theory. The “invisible hand” by which buyers and sellers are both price-takers can be understood as an impersonal mechanism that constrains self-interest and even gives rise to unintended beneficial consequences of self-interest as goods and services are allocated efficiently rather than according to the self-interested will of a monopolist.

Even more abstractly, self-interest stems from the sin of self-love, which is the putting of one’s own happiness above love directed to God, so constraining especially narrow self-interest is important so as to obviate the baleful effects from greed that is oriented only to one’s own private benefit. In other words, that such self-interest is based ultimately on the sin of self-idolatry (i.e., worshipping one’s own happiness even at the expense of loving God) means that a society is wise at the very least to constrain even self-interests that are economically aggregated with unintended beneficial consequences. Smith’s “invisible hand” impersonal mechanism, if protected by government anti-trust enforcement, is more reliable, I submit, than even intended beneficial consequences that are conditional on human intention and thus motivation. This is why downsizing Google in the E.U. is preferable to trying to motivate Google’s management to stop restraining competition in its industry by means of fines.

Pierre Nicole, a Jansenist priest in the seventeenth century, argued that self-love can have beneficial consequences. The consequences are intended, but only in so far as the benefits going to others are in one’s own self-interest. Courtesy, for example, although rooted in self-love and thus fully in accord with self-interest, constrains immediate or narrow self-interest that runs unfettered in Hobbes’ state of nature. Simply put, we can get more by being social with other people than by taking their food and even killing them. Smith’s impersonal market mechanism also constrains narrow (or immediate) self-interest, such as raw greed, even though the untended aspect of the invisible hand differs from Nicole’s intended courtesy, and the impersonal aspect of Smith’s market mechanism differs from Nicole’s personal motive to extend courtesy to others because it is in one’s interest to do so. Also, whereas the invisible hand constrains self-interest itself, though competition may ultimately be in a company’s long-term best financial interest, extending courtesy to others only constrains narrow (or immediate) self-interest. In other words, narrow self-interest, in which only private benefits to oneself are sought, is constrained by both approaches and so they can be compared. But courtesy can easily be turned off, as it depends on intention, whereas the invisible hand’s operation does not depend on market participants intentions to constrain their own self-interest. As self-love is a manifestation of the foundational sin of pride, according to Augustine, a person’s intentions to constrain one’s own self-interest in actions cannot be relied upon even though it is laudable when a person assumes an enlightened self-interest and even acts altruistically. In assuming a managerial role in a company, a human being comports oneself to one’s narrow economic role, which willows one’s intentions that go beyond immediate or medium-term financial interests, both in terms of salary and company profitability.

It bears remembering that even though part of the literature on corporate social responsibility in the twentieth century includes ethical principles, CSR programs have become largely marketing. Indeed, the fiduciary duty of managers to the stockholders as a group mandates that the managers be oriented to maximizing profit (and thus dividends and the stock price). This legal infrastructure encases narrow self-interest, which benefits from restraining trade in order to increase market power and profit. Therefore, it should not be surprising that Google’s written reaction to the judicial opinion of the advocate general bears no traces of responsibility to uphold a competitive market for the good of society, but can instead be interpreted as sheer marketing. Lots of businesses use our product! Rockefeller could have said the same. That titan, who viewed himself as a “Christ figure” and a Noah in saving rival refiners from destructive competition in the 1860s by forcing them abord his “combination,” was also found guilty of restraint of trade. His self-deluded intentions certainly could not be trusted by the Supreme Court justices who ruled in favor of breaking up his company. In the 2020’s, the E.U. was surpassing the U.S. on anti-trust enforcement, but even so, I submit that motive-triggering fines are not sufficient to restoring and protecting market competition once there is an egocentric giant in the room.

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1. “Google Hits Setback in Bid to Overturn Multibillion EU Antitrust Fine in Android Case,” APnews.com, June 19, 2025.
2. Ibid.

RBI Overheating India’s Economy: On Materialist Greed Fueling Ceaseless Consumerism

A phenomenon as massive as the global coronavirus pandemic, which ran from 2020 to 2022, is bound to have major economic ripple, or wave, effects in its wake. India’s record high 9.2% growth of GNP in the 2023-2024 fiscal year illustrates the robust thrust of pent-up demand met with increased supply. To the extent that consumption over savings is the norm in any economy, a couple years off can subtly recalibrate economic mentalities to a more prudent economic mindset wherein saving money is not so dwarfed by spending it. Moreover, putting the brakes on a consumerist routine and societal norm can theoretically lead to putting the underlying materialism in a relative rather than an absolute position and thus in perspective. Yet such a “resetting” must overcome the knee-jerk instinct of any habit to restart as if there had been no change. Coming back to college, for example, after a summer away, students tend to pick up their respective routines right away as if the recent summer were a distant memory. India’s astonishing rate of economic growth just after the pandemic demonstrates that the penchant for consumerism and economic growth as a maximizing rather than satisficing variable returned as if the steeds in Socrates’ Symposium—only those horses represent garden-variety eros sublimated to love of eternal moral verities, to which Augustine substituted “God.”

The full essay is at "RBI Overheating India's Economy."

Political and Economic Elites

I submit that in virtually every political party, a distinction can be made between the “rank and file” and the political elite. Kamala Harris may have lost to Donald Trump in the 2024 U.S. federal-presidential race in part because Harris had not spoken out enough on economic issues amid soaring inflation on groceries and rents to gain traction with Democratic and Independent voters who had had enough of the “woke” ideological agenda, which includes, for example, moral pressure and even demands that people announce their “pronouns” before speaking. Although President Biden had initiated some anti-trust judicial action, the industry-oligopoly of meat producers, for example, was left untouched. So too were the mega-grocery-store chains. Kroger was later found to have spiked egg and milk prices above the increased costs with impunity, yet Harris did not suggest that the Sherman or Clayton anti-trust acts should be taken out of the garage for spin on the American judicial highways that connect the rank-and-file party-members to party elites mainly in New England, New York, and California. I contend that U.S. Senator Bernie Sander’s anti-oligopoly speeches in conservative Congressional districts gained such numbers in 2025 precisely because the Democratic Party’s elite had lost touch with the party’s “rank and file” voters on economic issues.[1]

In early May, 2025, Faiz Shakir, a top advisor to Sanders, castigated elected Democrats who want “to talk down to” voters as if ordinary people are “just too dumb to understand the general notions of powerful elites running” the show, presumably both in politics and business.[2] I don’t think it is lost on many Democratic voters that Democratic office-holders taking campaign donations from oligopolistic companies have been less than willing to urge the U.S. Department of Justice to prosecute large companies on the basis of restraint of trade. Virtually no elected official in government who takes a significant amount of “corporate cash” would be willing to propose a law strengthening anti-trust law such that governments in the U.S. would have a duty to restore monopolistic and oligopolistic industries to market-competition even if the existing firms are not colluding on price or other matters.

For example, since its early days, Facebook (then Meta) has actively bought out budding potential competitors. Social media became an oligopolistic industry in part because of that strategy. Whether or not Meta has engaged in restraint of trade, the U.S. Department of Justice could be given the legal mandate to break up the large American social-media companies in order to bring about a competitive industry. A monopolistic or oligopolistic industry cannot be counted upon to metamorphosize itself naturally into a competitive market; rather, the reverse tends to occur. Hence the need for government to act to perpetuate competition in industries.

This is not to say that Democratic and Independent voters would or should accept Sanders’ platforms of “Medicare for All” and free college-tuition at public colleges and universities. Rather, his “relentless focus on economic policy” could have improved his party’s chances to retain the federal presidency by countering “swing voters’ belief [that] Democrats are too close to feckless institutions and too obsessed with culture war issues.”[3] U.S. Senator Chris Murphy, also a Democrat, observed about six months after the 2024 election, “We viewed people like Bernie as an outlier threat to the institutional Democratic Party, when in fact what he was talking about and is still talking about is the crossover message. And it pulls Trump voters back into the Democratic coalition.”[4] Both the Hilary-Clinton-dominated party elite in 2016, which was rather unfair to Sanders, and the Kamala-Harris presumptive-nominee fiat in 2024 demonstrate the lack of willingness of the party’s elite to select its nominees for president by competitive (and fair, open) contests. This lack of political competition mirrors the lack of economic competition that has continued to plague many American industries at the expense of consumers.

Lest the attention on price-spikes from President Trump’s tariffs monopolize the public discourse on prices that American consumers must pay to have even staple products, another, more widespread, reason for higher prices may be right under their proverbial noses and yet many Americans, both as voters and consumers, may continue to be oblivious to the bad odor of greed that has fueled collusion not only within industries, but also between business and government. An anti-elite populism preached by Democratic candidates and office-holders who refuse corporate donations could really make a difference in setting the Democratic Party apart from not only Trump’s Republican Party, but also the status quo itself, whose gravitas can be likened to that of the Earth in its magnitude and relentlessness. Elites may have such a foothold in American politics and business that many party-members and consumers may be left with only a vague instinctual sense that “the gig is rigged.” For the powers that are able to frame the contours of debates on issues, including on which issues will be debated publicly, do so with a keen eye on retaining and even gaining power and wealth. Hence making the contours explicit, and uncovering the underlying vested interests, is vital to restoring bottom-up democracy and competitive markets in the United States. Faith in American democracy may boil down to the precipitate of ordinary people resisting entrenched, powerful interests even in their own political parties.

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1. An oligopoly is an industry in which a few companies dominate. An oligopoly is between a monopoly and a competitive market. Prices on products can be higher than necessary, the surplus revenue going to profits. Sellers are price-takers rather than price-setters in a competitive market, whereas companies in an oligopolistic industry have sufficient market-power to set prices because consumers have few choices.

2. Igor Bobic, “Bernie Sanders: Resisting Trump Is ‘Not Good Enough’,” The Huffington Post, May 6, 2025.

3. Ibid.

4. Ibid.

The Hebrew Bible on Business Ethics

The early Hebrews considered wealth to be an integral part of human perfection and, moreover, what ought to be.[1] The ideal man was wealthy and leisured, and yet occupied with honorable work.[2] In the Torah, as long as the Hebrews as a people obey God, including dutifully acting as stewards rather than as selfish exploiters of the land that God has provided, poverty should be nonexistent in Israel. “There need be no poor people among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you, if only you fully obey the Lord your God.”[3] Blessed wealth is a reward for fidelity to Yahweh, whereas poverty here is indicative of, or even punishment for, disobedience, which will evidently always be the case in Israel, for, “There will always be poor people in the land.”[4] The conditionality leaps off the page, as does the notion of collective justice, and yet wealthy individuals, including business practitioners, are held to account. The ethic of work is upheld even though labor in Genesis is due to original sin. 

The full essay is at "Ancient Judaism on Wealth."

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[1]. Charles R. Smith, The Bible Doctrine of Wealth and Work (London: Epworth Press, 1924), 21.

[2]. Smith, The Bible Doctrine, 22, 33-34.

[3]. Deut. 15:4-5.

[4]. Deut. 15:11.

Ownership and Compensation Conflated: The Case of Bill Gates and Paul Allen at Microsoft

Paul Allen claims in his memoir that Bill Gates tried on more than one occasion to reduce Allen’s relative ownership interest in Microsoft. Of course, the veracity of Allen’s explanation can be questioned even if the ownership changes in percentage terms are a matter of public record. Whereas The Wall Street Journal focused on Allen's credibility in making his claim, I see a case study on the difference between ownership and compensation for labor.

Allen claims in his book that in the mid-1970's, when he and Bill Gates were two college dropouts based in New Mexico, Gates asked for 60% of their partnership because of his greater contributions to the creation of software for running the BASIC programming language on an early PC, the MITS Altair 8800. Allen insists he had assumed that the partnership was evenly split, but he agreed Gates' request anyway. Several years later when the two men established Microsoft as a formal partnership, Gates asked to change their respective shares in the business to a 64-36 split, a demand to which Allen again agreed. However, in the early 1980s, Gates rebuffed Allen after he asked for an increase in his own Microsoft shares because of his work on a successful Microsoft product called SoftCard. Allen writes that he was deeply disappointed in Gates’ response; after all, the two men had known each other since they were students at a prestigious private school in Seattle. "In that moment, something died for me," Allen writes in his memoir. "I'd thought that our partnership was based on fairness, but now I saw that Bill's self-interest overrode all other considerations. My partner was out to grab as much of the pie as possible and hold on to it, and that was something I could not accept." Allen recounts that he sucked it up and thought, "OK…but one day I'm out of here."[1]  Gates had put money above not only friendship, but also a stable, enduring partnership. 

In 1982, Allen eavesdropped on a discussion between Bill Gates and Steve Ballmer, who would go on to become the company's CEO, in the Microsoft offices in Bellevue, Washington. Allen claims in his memoir that he heard the two men talking about his recent lack of productivity and how they might dilute his equity in the company by issuing options to themselves and other shareholders. Allen said he burst into the room and confronted the two men, both of whom later apologized to him and backed down from their plan. "I had helped start the company and was still an active member of management, though limited by my illness, and now my partner and my colleague were scheming to rip me off. . . . It was mercenary opportunism, plain and simple."[2] To be sure, Allen admits that his work was limited by an illness. Gates's attempts to lower Allen's stake in the company reflected Gates' concerns that Allen wasn't working hard enough and wasn't committed to the company, say people familiar with the relationship.[3] That was one reason, those people say, why Gates had put a provision in the first partnership agreement that would allow him to buy out Allen if Gates thought there were irreconcilable differences. In his memoir, Allen refers to the provision but does not include a reason for it, or why it was not mutual. 

The link between productivity or work accomplished and ownership stake may, however, not sufficiently distinguish between compensation and ownership. To be sure, additional ownership shares can be part of a compensation package, but Gates sought to change the founding ownership agreement by reducing his partner's share of ownership, which attends to founding the company. In other words, Gates should arguably have gone after Allen's salary and additional stock options, for those are more oriented to the quality of work and productivity. If a person owns a business, he still owns it if he performs badly for a year; of course, what he could take out as salary might be less than the prior year. 

1. Nick Wingfield and Robert Guth, "Microsoft Co-founder Hits Out at Gates," The Wall Street Journal, March 30, 2011.
2. Ibid.
3. Ibid.

Getting More For Doing Less: Bank Board Directors

Executive compensation is an art rather than a science. It is not as if numbers are fed into a computer and the correct compensation pops out. More discretion is involved than meets the eye. “Since the financial crisis,” The New York Times reported in 2013, “compensation for the directors of [America’s] biggest banks has continued to rise even as the banks themselves, facing difficult markets and regulatory pressures, are reining in bonuses and pay.” [1] Just five years after the financial crisis, it is interesting how the banks' respective managements decided to spend the TARP money from Congress and even more money from the Federal Reserve Bank. Also of note, board and upper management compensations seemed to be going in different directions in spite of both being presumably tied to the same firm performance. Even a performance-incentive approach tied to firm-performance can accommodate a lot of latitude, such that banks differ in how much they pay their respective boards. The discretion permits inside collusion and even outlandish demands by "celebrity" members whose advice does not necessarily come up to celebrity status.  

At $488,709 in 2011, Goldman Sachs had the highest director-pay of any American bank. Some of the bank’s 13 directors made more than $500,000 because they had extra board responsibilities. As the directors were paid in stock, 2012 promised to be an even better year for the board members. Compensation experts have stated that banks must pay premium dollar to pay such figures for what is essentially part-time work in order to get the best advice. However, JPMorgan, the largest American bank, gave its directors “only” an average of $278,194 in 2011. Bank of America paid its directors $275,000 each. Equilar reported that the average compensation for a director at one of the six largest American banks in 2011 was $328,655. This compares with $232,142 at almost 500 publicly-traded companies, according to Spencer Stuart, in spite of the fact that regulations had narrowed the responsibilities of bank boards.

One would think that compensation would reflect changes in the number of tasks even more than macro indicators of bank performance. “I get you have to pay up for sophisticated board, but what is that complexity worth?” said Timothy M. Ghriskey, co-founder of the Solaris Group, a financial services shareholder that voted in 2011 to reject a pay plan for top executives at Citigroup. “Does it take $200,000 or $500,000? The discrepancy between a board like JPMorgan and Goldman is confusing.”[2] I submit that it is confusing only from a rationalistic standpoint. 

The differential indicates that the matter is far more subjective than meets the eye. Collusion between upper management and its board may be happening. So when a compensation expert claims that a certain level is necessary, the claim can be questioned rather than taken at face value. In fact, the false-necessity may be a subterfuge used by insiders seeking to enrich each other. You scratch my back, and I’ll scratch yours. The dispersed stockholders are left with less.

In short, it can be doubted whether the director compensation levels at banks are necessary or even in the stockholders’ interest. The excess probably reflects the difficulty facing stockholders in holding the insiders accountable. Accordingly, one consequence of corporate governance reform may be reining in the pay for what is really a part-time job with fewer and fewer responsibilities. If very wealthy or renown board members demand a premium, it is not justified in terms of corporate governance unless the advice is more valuable. 

See Essays on the Financial Crisis: Systemic Greed and Arrogant Stupidity, available at Amazon.

1. Susanne Craig, “At Banks, Board Pay Soars Amid Cutbacks,” The New York Times, April 1, 2013.
2. Ibid.

Regulating Wall Street after a Financial Crisis

On Columbus Day 2011, The New York Times observed that the regulations known as the Volcker rule, “intended to limit trading when the bank's money is at risk, a sweet spot for banks, is seen as a centerpiece of the sprawling financial overhaul of the Dodd-Frank Act of 2010. In anticipation, the nation's biggest banks, like Goldman Sachs and Bank of America, have already shut down their stand-alone proprietary trading desks.”[1] Even so, the long and tortuous route by which any regulation is written was leaving its own mark in the sense that promising loopholes were finding their way into the rule. In other words, the regulated would have a disproportionate influence on the writing of the regulations. This conflict of interest is dangerous from the standpoint of not being vulnerable to another financial crisis in which the greed on Wall Street knows no bounds. 

Regulators were leaving room for “significant changes,” according to the Times. Wall Street was “lobbying furiously to tame the Volcker Rule, holding roughly 40 meetings with various regulators, warning that the changes will eat into profits at a difficult time for banks.” Those banks were undoubtedly threatening to charge more to their customers if the rule weren’t weakened. “In essence, the [rule] would upend the banking industry's lucrative, yet risky trading system, forcing powerhouse investment banks to resemble sleepier brokerage firms.” It is difficult to see Morgan Stanley and Goldman Sachs readily becoming mere market-makers and deposit and loan banks without a fight. To be sure, Lloyd Blankfein did insist that his bank was only a market maker when he testified before Sen. Levin’s Senate committee after the credit freeze of 2008.

At the time the Volcker Rule was being proposed, it was already apparent that there would be some wiggle-room for the banks. "Unfortunately, this initial proposal does not deliver on the promise of the Volcker Rule or the requirements of the statute," said Marcus Stanley, policy director of American for Financial Reform, an advocacy group. In the proposal, “a number of controversial exemptions emerged. While the regulation prevents big banks from placing bets on many stocks, corporate bonds and derivatives, it exempts trading in government bonds and foreign currencies. The proposal also provided a path for getting around the ban, for instance, when banks hedge against risk that comes from carrying out a customer's trade. Market-making and underwriting are excused, too, though the line is often fuzzy between these pure client activities and proprietary bets.” Lastly, the proposal would allow “banks to hedge against theoretical or ‘anticipatory’ risk, rather than just clear-and-present problems.” Armed with their lawyers and astute financial wizards, Wall Street banks could conceivably continue with business as usual.

Trading in government bonds and foreign currencies, and hedging even theoretical risk presumably with anything constitute an obstacle course that any Wall Street banker could run without breaking a sweat. With so much on the line and public scrutiny less potent at the regulatory stage, the financial-sector lobbyists could be expected to achieve just enough and then some. Once again, systemic risk would not be a factor, and history could repeat itself.

See: Skip Worden, Institutional Conflicts of Interests, available at Amazon.

1. Ben Protess, “Banking Industry Revamp Moves Step Closer to Law,” The New York Times, October 12, 2011. 

Is God the Invisible Hand?

A Baylor University survey on religion and economics in 2011 revealed something that may be distinctly American, culturally speaking. The results indicated that about “one in five Americans combine a view of God as actively engaged in daily workings of the world with an economic conservative view that opposes government regulation and [advocates] the free market as a matter of faith.”[1] Specifically, those Americans believed that the “invisible hand” of a competitive market is actually God at work. Put another way, the assumption is that the economy “works” because God wills it to by intervening directly in the market mechanism itself. Government regulation, in diverting economic supply and demand from “the invisible hand,” is thus sinful. Regulating the economy challenges God’s omnipotence (i.e., power) by interfering with God’s intervention in our daily lives via the operation of the market mechanism. 

The full essay is at "Is God for Regulation?"

1. Cathy Lynn Grossman, “Religion Colors Money Views,” USA Today, September 20, 2011. 

Self-Delusion Enabled by Religion: Former U.S. House Minority Leader Tom Delay and Monopolist John D. Rockefeller

It is hardly news that religion, even one based on divine love reaching down to “love thy neighbor,” can be stretched or simply ignored as needed by the desires for power and money. When these two are both engaged, religious rationales may be attempted nonetheless. I have in mind here the cases of former U.S. House Majority Leader Tom DeLay (R-TX) and the monopolist John D. Rockefeller. Just in evoking their Christian faith to justify their sordid conduct in politics and business, respectively, these two men may be seen as astounding cases of the length to which adherents can go in using religion even in spite of obvious hypocrisy.

The full essay is at "Self-Delusion Enabled by Religion."

God's Gold through the Centuries

In the wake of the financial crisis that came to a head in September of 2008, people might have been wondering if sufficient moral constraints on the greed on Wall Street are available, even possible. The ability of traders to create complex derivative securities that are difficult for regulators to regulate, much less understand, may have people looking for ethical or even religious constraints. It would be only natural to ask if such “soft” restraint mechanisms really do have the puissance to do the trick. Here’s the rub: the tricksters are typically the last to avail themselves of ethical or religious systems, and they the wrongdoers are the ones in need of the restraint. Blankfein said of his bank, Goldman Sachs, that it had been doing God’s work. About a week after saying that, he had to walk his statement back and admit that the bankers had does some things that were morally wrong. Although divine omnipotence is by definition not limited by human ethical systems, it is hard to imagine a divine decree telling bankers to tell their clients one thing (buy subprime mortgage derivatives) while taking the opposite position on the bank’s proprietary position (shorting the derivatives, beyond being a counterparty to clients). Divine duplicity seems to represent an oxymoron on a megascale rather than a justification for greed. As the crisis erupted and was subsequently managed by public officials in government and new managers brought in to salvage AIG, I was researching the history of Christian thought on profit-seeking and wealth. I have since published an academic text and a nonfiction book, which develops further on the treatise on the topic. As the book is too recondite for sane people (i.e., outside of academia), I am writing a non-fiction book on the topic for a broader readership. To whet the appetites of those of you who are waiting for something more readable that a recondite thesis, I present a brief account of my original research on the topic here. 

For the full essay, see "God's Gold through the Centuries."

________________________

See related essay: "Religious Sources of Business Ethics"

The academic treatise: Godliness and Greed: Shifting Christian Thought on Profit and Wealth 

The non-fiction book: God's Gold: Beneath the Shifting Sands of Christian Thought on Profit-Seeking and Wealth.

Income Inequality: Natural or Artificial?

In the United States, the disposable income of families in the middle of the income distribution shrank by 4 percent between 2000 and 2010, according to the OECD.[1] Over roughly the same period, the income of the top 1 percent increased by 11 percent. In 2012, the average CEO of one of the 350 largest U.S. companies made about $14.07 million, while the average pay for a non-supervisory worker was $51,200.[2] In other words, the average CEO made 273 times more than the average worker. In 1965, CEOs were paid just 20 times more; by 2000, the figure peaked at 383 times. The ratio fell in the wake of the dot-com bubble and then in the financial crisis and its recession, but in 2010 the ratio began to rebound. According to an OECD report, rising incomes of the top 1 percent in the E.U. accounted for the rising income inequality in Europe in 2012, though that level of inequality was “notably less” than the one in the U.S.”[3]  Nevertheless, in both cases the increasing economic gap between the very rich and everyone else was not limited to the E.U. and U.S.; a rather pronounced global phenomenon of increasing economic inequality was clearly in the works by 2013.

Accordingly, much study has gone into discovering the causes and making prognoses both for capitalism and democracy, for extreme economic inequality puts “one person, one vote” at risk of becoming irrelevant at best. One question is particularly enticing—namely, can we distinguish the artificial, or “manmade,” sources of economic inequality from those innate in human nature? Natural differences include those from genetics, such as body type, beauty, and intelligence. Although unfair because no one deserves to be naturally prone to weight-gain, blindness, or a learning disability, no one is culpable in nature’s lot. No one is to be congratulated either, for a person is not born naturally beautiful or intelligent because someone else made it so. This is not to say that artifacts of society, as well as their designers and protectors, cannot or should not be praised or found blameworthy in how they positively or negatively impact whatever nature has deigned to give or withhold. It is the artificial type of inequalities, which exist only once a society has been formed, that can be subject to dispute, both morally and in terms of public policy.
A society's macro economic and political systems, as well as the society itself, can be designed to extenuate or diminish the level of inequalities artificially; it is also true that a design can be neutral, having no impact one way or the other on natural inequalities. How institutions, such as corporations, schools, and hospitals, are designed and run can also give rise to artificial inequalities. In his Theory of Justice, John Rawls argues that to be fair, the design of a macro system or even an institution should benefit the least well off most. Under this rubric, artificial inequalities would tend to diminish existing inequalities. Unfortunately, a society’s existing power dynamics may work against such a trajectory, preferring ever increasing inequality because it is in the financial interests of the most powerful. Is it inevitable, one might ask, that as the human race continues to live in societies the very rich will get richer and richer while “those below” stagnate or get poorer? Jean-Jacques Rousseau (1712-1778) distinguishes natural and artificial (or what he calls “moral”) inequalities with particular acuity and insight. He answers yes, but only until the moral inequalities reach a certain point. Even if his “state of nature” is impractical, we can make more sense of the growing economic inequalities globally but particularly in the U.S. by applying his theory.

---

1.Eduardo Porter, “Inequality in America: The Data is Sobering,” The New York Times, July 30, 2013.

2. Mark Gongloff, “CEOs Paid 273 Times More Than Workers in 2012: Study,” The Huffington Post, June 26, 2013.

3. Kaja B. Fredricksen, “Income Inequality in the European Union,” OECD, Economics Department Working Paper No. 952, 2012.

Expansion at Volkswagen: Minimizing Risk in E.U.?

It is perhaps common among gigantic corporations, such as the major automobile manufacturers, to assume that current profitability is likely to be augmented by expansion. Economies of scale are presumed to outpace diseconomies as even a large company expands. At a more basic level, it is generally assumed that if a company is not expanding, it is necessarily facing its downfall. The notions of equilibrium and steady state are fundamentally at odds with the more, more, more mantra of mammon. Accordingly, it can be asked whether efforts to strengthen a company’s equilibrium are more in line with long-term profitability. The very expression, strengthening an equilibrium is étranger or foreign to business parlance.
By the end of 2012, Volkswagen had announced plans to invest €50 billion ($65 billion) in the global operations over the next three years. Much of the money was directed to expand the company’s operations outside of Europe. Two other European auto companies, BMW and Daimler, were also engaged in record investment programs outside of Europe. Taking advantage of greater-than-expected auto sales in North America and China can be a good way to limit the recessionary impact of the European debt-crisis and the related “austerity” budget-cuts at the state level. I say “can be” because assessing the automobile market in China from Europe involves risk. The workings of the Chinese government are not exactly transparent and the Chinese culture is not necessarily well-understood by Europeans (or Americans), so the Chinese auto market could quickly shift in quantity and even desired type of cars being sought without European managers seeing it coming. Even so, shifting operations globally away from problematic countries is generally a benefit of being a multinational corporation in terms of reducing the recessionary head-winds facing the company. This requires that the “flaps” on “both wings” shift so the entire plane can turn decisively.
However, if the motive is expansion per se, the international strategy is not one primarily of hedging risk. That is, the hedging effect can be muted. In fact, there could be little impact on risk-exposure, or it could actually increase. Of the €50 billion oriented to international expansion at Volkswagen, €23 billion was to be directed, en fait, to modernizing and expanding plants as well as research and development sites in the E.U. While of benefit to the E.U. in countering the recessionary impact of budget cuts in some states (though expanding in the state of Germany while Greece and Spain continue to founder could further compromise European integration), expanding in the E.U. effectively undercuts the hedging function of expanding abroad. Moreover, the underlying motive can be said to be expansion rather than reducing risk.
Whereas reducing overall risk strengthens or reinforces a company’s equilibrium, expansion taken as an end in itself, going outward as if the spray shooting out of a shotgun, can actually increase the risk because more is at stake. Expansion, being inherently general, can obfuscate efforts to be strategic. Furthermore, once the economies of scale in being a major multinational corporation have been achieved, further expansion risks triggering diseconomies of scale outpacing any additional economies from a still-larger scale. So it might be worth pondering how an equilibrium can be strengthened in a way that does not simply feed the urge for more, more, more—an instinct that can be counter-productive in the long term.  

Source:

Vanessa Fuhrmans, “German Car Makers Hit Road,” The Wall Street Journal, November 25, 2012.

Is Modern Banking Fundamentally Flawed?

Jamie Dimon, CEO of JP Morgan Chase and board member of the New York Federal Reserve (a banking regulatory body), advocates not only that financial regulation reform is not necessary, but also that deregulation is the best course for the American financial sector. Meanwhile, JP Morgan lost $2 billion in an effort to reduce risk. President Obama quickly pointed out that if one of the smartest bankers in the room can preside over such a massive loss, then a deregulated financial sector would likely present us with an unacceptably high level of risk to the entire financial system (and economy). Elizabeth Warren suggested that relying on bankers to regulate themselves would not reduce the systemic risk. The alternative would seem to be strengthening financial regulation, even though—according to Sen. Dick Durbin—“the banks own Congress.”

Perhaps the problem with systemic risk in modern banking goes deeper—beyond how it can be effectively regulated—meaning made regular in line with the public good—and, moreover, beyond what our reigning modern perspective will permit us to acknowledge, let alone see. In ecclesiastical terms historically, lending was classified as a kind of charity, specifically to the poor, as the rich presumably are not in need of lent funds (by definition). In other words, the leverage assumed by the wealthy and corporations is unnecessary. Starbucks needs the funds to build four hundred more stores in China. Wal-Mart needs additional money to buy land for new stores in major American cities. Capital from stockholders is presumably not good enough. The capped cost of leverage relative to a lack of limit on profit attracts greed to favor borrowing over raising capital through stock. The vested interests of existing stockholders (often including the executives who control their corporate boards) seals the deal on leverage as the drug of choice, even if it is not in the long-term best interests of the respective companies. Such a view of borrowing and paying (and earning) interest is worlds away from the original purpose of lending.

Viewing a loan as alms to the poor, lending with interest was originally thought to be unjust. At the very least, it was viewed as unseemly to profit in the giving of charity (although modern corporations do it all the time and get tax deductions for it, besides good public relations). Furthermore, the property (i.e., the substance of the money) lent was viewed as being inseparable from its use (i.e., as a means of exchange). The substance of money is its use, according to that view, so charging more than the money itself (i.e., the principal) is undeserved surplus. Such profit was historically reckoned as being theft. It is not good form to steal from the poor to whom one is giving alms. It is like biting someone while handing him a $20, which he needs to buy lunch (and will return later).  “Hey, I forgot my wallet today and I didn’t bring my lunch. Can you help me out? I’ll pay you back tomorrow.” If of charitable good-will, the acquaintance would reply, "Sure, here you go." If of ever greater (i.e., self-less) good-will, the lender would add, "and don't worry about paying it back." This is lending at its finest. Demanding that the borrower pay more than simply returning the $20 would represent far less than accepting the principal back. Beyond unfairness, taking interest regardless of the borrower's circumstance evinces self-idolatry.

Specifically, for a lender to receive surplus (above the principal) without labor or uncertainty (having transferred the risk to the borrower by requiring repayment) is not only unjust because it violates the risk/return relationship (i.e., a higher return is justified by assuming more risk), the certainly assumed (artifiically) by refusing to accommodate or share in any losses incurred by the borrower is rightfully only that of God. That is to say, it is self-idolatry to assume a divine quality like certainty. Furthermore, the power that some lenders presume to have over delinquent borrowers can be interpreted as an attempt to claim God's power (omnipotence) for oneself. Altogether, arrogance and the infliction of harm come from making oneself an idol (i.e., as if divine).

That which usury risks in terms of morals and self-idolatry is utterly foreign to us moderns. The original charitable purpose of lending is also lost to us in part because we are so used to our own view of lending being the default and the necessary of commercial lending in our economy. Moreover, we assume our assumptions cannot be wrong, and so we do not question whether merely charging interest is inherently unjust and a sin against God. We assume we know the purpose of lending as if it had no history.

In 1612—exactly 400 years before this writing yet late enough that commercial lending was already well-ensconced in the economy—Roger Fenton, a Puritan divine in England, opined strenuously that the sin of usury is inherently unjust. “Where we finde no iustice, what hope can there be of charitie?” Salomon puts mercy as the opposite of usury. “Wherefore vsurie may well be termed a biting . . . it eateth out the very bowels of compassion.” Usury perverts the act of charity, “turning it into an act of selflove.” Usury is against “the Canon of that Charitie which seeketh not her owne, to respect the good of others; [usury] is turned to his owne proper lucre and gaine.” (Fenton, 1612, p. 106)

Injustice does not admit of mercy manifesting as charity. We moderns are so wrapped up in our self-love that we can scarcely imagine lending as an act of compassion. The Canon of Charity to which Fenton refers is the Golden Rule, whose equity guides the Calvinist view of justice as love and benevolence to all. Such benevolence is fueled by selfless love (agape), rather than higher self-love (caritas) directed to God. We moderns can scarcely recognize this theory of justice, so used are we to strict legal justice which limits one’s duty to paying for one’s crime. That the other theory of justice might be applicable to lending is apt to strike us as odd at best.

Nevertheless, the problem behind even the best bankers of today being reckless even as they advocate for deregulation may extend beyond the antiquated debate on regulation to include the making of something borne of something natural (compassion) into something artificial. That lending was designed to be a species of charity may mean that problems are necessarily entailed in using banking for leverage.

By analogy, a person might have been brought up one way and therefore have considerable trouble in adjusting to a way of life that is at odds with that upbringing. The problem facing the person would go beyond simply regulating the new life because a basic inconsistency is in such a drastic change. Were the person to know only the new life, having forgotten one’s upbringing, she would have no clue as to why she feels fundamentally ill at ease. She would look for things in her new life to assuage the difficulties, which nonetheless transcend that environment and therefore require a more basic solution.

Besides relying too much on debt for personal and business use, we as a society are cut off from the original (i.e., designed) use of lending as a means of mercy rather than to profit. Perhaps our perspective is more limited than we think, and the problem much deeper than we realize. Given that “cloudie conceits do hang in the braines of men, which cast a dye and tincture vpon the vnderstanding,” seeing usury “so much practiced of all sorts . . . men are euen thereby without further examination much moued to thinke it lawfull.” (Fenton, pp. 108-9). Yet further examination demonstrates just how limited our tiny window in modernity is—even in spite of our lauded technological development. Our “advancement,” in other words, may blind us to being so wrong about lending even as it is ubiquitous in our world.

By 2012, for example, $1 trillion in student loan debt had accumulated in the United States. Rather than the mercy of charity in waiving interest and even the principal in particular cases of dire need, such a load on poor students represented the hubris of a society run amuck on its own conceit and greed. Such a disparity exists between such selfishness and charity that the notion of debt forgiveness even for the poor is thought of as an unforgivable unfairness rather than as charitable equity that is essentially agape seu benevolentia universalis.

Source:

Fenton, Roger, A Treatise of Usurie (London, 1612). In The Usury Debate in the Seventeenth Century: Three Arguments (New York: Arno, 1972).