10 - Money and the Doctrine of Necessities

Summary

Chapter 10 analyses Locke’s early writings on money within the wider context of his corpuscularism and explores what I have termed his ‘doctrine of necessities’. The chapter argues that his theory concerning the ‘necessaries’ and ‘necessities’, rather than ‘rights’, gives systematic coherence not only to his political and economics writings but to his entire philosophical theory. In Locke’s early writings on money, the key issue concerns economic phenomena that belong to an interdependent scientific system. The chapter discusses in detail the literature dealing with moneylending that existed before Locke and demonstrates in this manner his originality.

10.1 Locke’s Doctrine of Necessities

Thinking in terms of necessities of the nation in the context of the monetary system allowed Locke to introduce the public element that private money owners lacked.¹ The entire question of money moves thereby from a moral-theological system to a system of moral-natural philosophy. In all this philosophical and theoretical work, the notion of necessities becomes central. The celebrated argument by Joyce Appleby about Locke’s conviction of the existence of a natural economic order on which mercantilism was advanced does not chime with Locke’s corpuscularianism. Among other reasons, to a committed empiricist, a minimal articulation of any natural order would require lots of experiments. Nature had certainly an order, but there was very little about that order we could say in the present state of science. Instead, in his economic thinking, Locke endorsed the argument of human necessities: necessities of the (economy of the) state and concern for the public and the shaping role of public legislation.² But it was also Locke’s theoretical premise of the disintegrative principle of corpuscularist atomism that demanded the certainty of the notion of necessities.

10.1.1 A Changing Perspective: Corpuscularianism

Human beings are back in the world in the philosophy of John Locke. We encounter them as beings in nature, in their dual capacity as rational explorers of elusive knowledge and as created natural beings endowed with powers and necessities. The following three chapters describe Locke’s response, as an economist, a moral philosopher, an epistemologist and as a political philosopher, to the magnificent challenge that corpuscular philosophy posed in the English context. Following Boyle, Locke accepted atomism in natural sciences.³ The goal of making real science – that is empirical knowledge – of social endeavours appeared clear. But atomism was hardly helpful for making theory with social content that would confront Hobbes’s individualist and atheist political science. I suggest that Locke’s doctrine of necessities allowed corpuscularianism to be launched in natural sciences at full speed without discomposing all social institutions and ensure that social sciences could partake of the new science. Moral natural law was in that sense modernized. This chapter explores how Locke benefited from a generalized language of necessities in the context of a theory of money, government, natural law and knowledge. Furthermore, he imbued the political meaning of the concept of necessities with a specific theoretical content inspired partly by theology, economy and medicine.

English corpuscular philosophy held that the physical world could be explained without Aristotelian forms or substances. In this manner, teleological thinking in natural philosophy and ethics lost much of its meaning.⁴ Locke’s rejection of Aristotelian reasoning on virtues, despite his own proposal of rational morality, may be put in the context of its incompatibility with corpuscular anti-teleological principles.⁵ As we saw in Chapter 7, corpuscularist authors considered it productive for science to narrow the scope of the philosophical approach to the physical world to a conception of a natural system held together through powers, qualities and forces. That is to say, the frame and course into which matter and motion were set in the beginning by God was the start of reasoning for the naturalist. Corpuscularianism is explained, for instance, masterfully in Robert Boyle’s The Origins of Forms and Qualities in terms that the only thing in nature that possessed something distinct from matter was the human being, with an ‘immaterial Form and a humane Body’.⁶ Next, in explaining particular natural phenomena of this ‘great Automaton, the World’, it was argued that the naturalist must pay attention only to the ‘doctrine of qualities’, meaning the qualities of matter: size, texture, shape and motion, or lack of motion. In Boyle’s view, this understanding of material bodies as an aggregate of qualities gave an element of convention, of agreement, even of arbitrariness to other conceptions such as naturalists’ classification of aspects of physical nature into species, or indeed into ‘natures’.⁷ In effect, he was hinting at the fact that in view of the emerging corpuscularianism and its infinite possibilities in relation to knowledge, contemporary science still offered a poor and positivist conception of the natural world.⁸ Did scientists know the necessary connections between the qualities of bodies? In other words, did the assumption of a structure formed by qualities and powers in the world entail knowledge of it? Both Robert Boyle, as we saw in Chapter 7, and John Locke answered these questions by reference to the premise of weakness of knowledge and the deficient state of contemporary science.⁹ In true corpuscularian spirit, Locke wrote in An Essay Concerning Human Understanding that ‘our Idea, the word Man stands for, is only an imperfect Collection of some sensible Qualities and Powers in him’.¹⁰ Moreover, the acceptance of precariousness was the precondition for fostering the type of ambitious inquiry and greater knowledge that characterized the new science. Both philosophers assumed that there ought to be (some) necessary connections among atoms, and thus the necessary causality. However, unlike Hobbes, they did not presume to know when and how these operated.¹¹ Hence, the principle of necessary causality was dropped from natural and moral sciences in the extreme form defended by Hobbes.¹²

The second scientific assumption that Locke shared with Boyle was that an omnipotent God stood behind the design of that structure. After all, in Boyle’s view, God was the donor of each of the powers of nature. In this and other instances the stimulus of the Scientific Revolution was theological, which meant not merely religious beliefs, but doing science with the help of the notion of God as the omnipotent maker and infinite container.¹³ As Aquinas had put it in On the Power of God (De potentia Dei), as ‘founder and designer of nature’ (conditor et ordinator naturae), what God did was nature.¹⁴ God was moreover superior to nature and therefore not limited by nature – a superior power does not depend on an inferior one.¹⁵ According to Cornelio Fabro, Aquinas’s understanding of power was novel, implying Aristotelian concepts of form, essence and action contained in the same notion of ‘powers’ participating of God’s order. A new and more complex metaphysical conception of the world than Aristotelian nature would then transpire from Aquinas’s ‘On the Power of God’.¹⁶ Locke’s lengthy chapter XXI, ‘Of Power’, in the second book of An Essay Concerning Human Understanding, starts similarly with the premise (‘I confess’) that power is ‘a relation to Action or Change’. Later in the chapter, he notes that ‘God, is only active [power]’.¹⁷ Aquinas’s ambition to explain everything through the notion of God’s power had been breathtaking. For example, the issues discussed in On the Power of God, in a very rich question five include the following: movement in order, the preservation of God’s free will, the uniqueness of each individual, the maintenance of creatures in existence through participation, the fact that human beings naturally do not only care for themselves individually but for the whole city and even for the entire world. The theologian’s underlying argument in that text was that by being power, God is action and goodness.¹⁸

Boyle endorsed Aquinas’s cosmology of power and powers, but as we also saw in Chapter 7, he wanted to distil the theologian’s notion of nature and purify it of Aristotelian forms, or as he put it, of ‘the lazy Aristotelian way of Philosophizing’.¹⁹ Arguably, Boyle also rejected the Neoplatonist giver of forms as incompatible with the species of atomism that he favoured, and possibly with Christianity. Corpuscular philosophers seemingly sought to overcome the earlier Neoplatonist dualism. Similarly to Aquinas, they employed the idea of God as a Necessary Existence, as described in Chapter 2, but they did not reduce the conception of God solely to this.²⁰ I contend that Boyle’s new philosophy of nature, and that of the group of philosophers he was in conversation with, undertook such a radical and imaginative break with Aristotelianism and Neoplatonism that beyond single areas of study it engendered a new cosmology that influenced future conceptions of natural law.

John Locke encountered this constellation of ideas in Oxford as a young protégé of Robert Boyle. Without denying his own intellectual originality, Locke’s evolution as a natural lawyer must be placed in this context.²¹ In combination with his profound interest and knowledge of scholastic theology and his expertise in medical works, corpuscularianism provided Locke with a change of perspective on both old and new moral, economic, political and epistemological themes. While there existed a physical system to which human beings related as bodies and thinking beings, they could also perceive the actual material world with which they interacted daily. In a sense, the corpuscular theory established the ambitious framework and goal for the future of science, including knowledge about God the Designer of nature. On the other hand, Locke’s realism – which described a capacity for perception through the senses of a kind not radically unlike that which proceeded from Aristotelian-Thomism – considered human beings to be equipped with the capacities to interact with that world.²²

10.1.2 Necessities

Locke’s economic thinking benefits from the new perspective of the physical world as an interdependent system, a ‘self-moving Engine’ that works through motion. Chapter 7 described how the concept of ‘Nature’ was rendered superfluous in Boyle’s philosophy. Instead, he regarded the physical world as an oeconomy. In the work of Locke – possibly Boyle’s most brilliant student – signs of a rapprochement between the oeconomy of nature and the oeconomy of the nation started to appear early on.²³ Locke regarded investment of money in the form of capital as being the natural way for the system or economy of a nation to function.²⁴ Crucially, he described the cycle of trade as a quasi-natural phenomenon, similarly to Boyle’s description of the natural system as quasi-artificial.

For money, as necessary to trade, may be doubly considered – 1º As in his hands that payes the labourer and Landholder, (for here its motion terminats, and through whose hands soever it passes between these he is but a Broker) and if this man want money (as for Example the Clothier) the Manifactury is not made, and so the Trade stops and is lost – 2 º as in the Merchants hands who buys the Commodity when made and if he want money the value of the Commodity when made is lessened and soe the Kingdome looses in the price.²⁵

Money thus moved within a system of trade in which it was necessary. Moreover, without money the system would stop. Locke’s originality in his unpublished writings on money (1668–1674) lay in showing that lending money at interest was not a question of moral theology, but about ‘necessity’ and ‘necessaries’ for the individual and for the nation, or for trade (the economy). Locke’s Essays of the Law of Nature, we might recall, left open the question of how to flesh out the seemingly impossible equation as between the primacy of individuals and the primacy of the public. I will argue that the means of aligning private and public interests appear for the first time in his remarkable studies on money. These show that the commonality of citizens has a common economic project as a nation, which he could demonstrate scientifically. The texts were one important intervention in engineering ‘people’s zeal for the public, by a prospect of private advantage’.²⁶ There was a pressing need to adapt values to the process of commercialization that was radically transforming the country.²⁷ These new values had at their core the aim of encouraging citizens of every status – men and women alike – to become active participants in the financial life of the nation, particularly to help finance the public debt. The activity of lending money at interest as Locke theorized provided the common roots for citizens’ participation in the economy. This was achieved through citizens acting as agents in oiling the wheels of trade with money and thus directly contributing to raising credit for the government and for trade, and in a word, contributing to building the public space, while at the same time guaranteeing their own preservation.

Writing in the 1690s against the devaluation of money as being harmful to investors and to private banks, Locke lumped together a variety of techniques, that had all been helpful at a moment of pressing need and impending ‘necessities’– including stock market speculation and lottery loans in which investors have the chance to win a prize the size of which was determined by a draw.²⁸ Locke wrote that reducing the content of precious metal in a coin without changing its denomination,

will weaken, if not totally destroy the publick Faith, when all that have trusted the Publick, and assisted our present necessities, upon Acts of Parliament, in the Million Lottery, Bank Act, and other Loans, shall be defrauded of 20 per Cent. of what those Acts of Parliament were security for.²⁹

The necessities that these new financial schemes remedied were public necessities – public debt that constituted revenue for the country by raising credit through public or parliamentary legislation, and all those pitching in were supposed to receive benefit as well. National legislation guaranteed their contribution. Crucially, these contributors had trusted that there was some common project in England which they were supporting. Locke sought to stress on a continuous basis that the new financial system belonged to a structure of national necessity with regard to a fundamental triad of publicness, nature and truth. His diatribes against greed and luxury show less interest in stressing scarcity (as that was a fact of life) than in pointing out what he considered, in the tradition of the Reformers studied in chapter 4, the true normativity of moral natural law: human beings’ necessities.³⁰ He took the view that meeting the necessities of the public clearly belonged to the moral sphere of acts and deeds that demanded performance. As this chapter will show, for all intents and purposes Locke employed the notion of ‘necessities’ politically. This is visible in a sort of conflict of homonyms across all his writings that revolve around the notion of the ‘necessary’.³¹ In Locke’s œuvre ‘necessity’ and the ‘necessary’ often denote an epistemological claim about truth, standing between chance and interest or, if you will, between fortuna and virtue.³²

‘Necessity’ may also indicate the entirety of a metaphysical structure or constitution of the world or of a certain domain within it, as we saw in the case of Hobbes and the ensuing Cudworth’s critique in relation to freedom. However, ‘necessity’ also refers to a mere contingent economic human need, or indeed a need of the state. Locke played with all these meanings in developing his political philosophy, pointing to laws of nature for areas in which he saw that certainty and predictability was needed, or where he aimed, wisely, at reinforced a theme of tradition. His emphasis in An Essay Concerning Human Understanding on ‘human beings’ necessary search for happiness’ is a case in point. Nowhere did Locke engage in a discussion or theoretical description of what exactly he meant by his concept of natural necessities.³³ Nevertheless ‘natural necessities’ are his bottom-line working tool in each text in which he puts forward a theoretical argument about politics, morality, philosophy, economics or epistemology, crucially so in the law of nature and theory of government set out in his masterpiece, the Two Treatises of Government. This suggests that he took for granted the notion’s capacity to transmit meaning and that it was common currency – in a similar way to the equally powerful notion of self-interest, against which, I argue, Locke was competing.

The language of necessities was indeed ubiquitous in the period in question.³⁴ Often, as in Locke’s work, it appears to be employed to distinguish the right course of action from one characterized by vice or superfluity. Lee Krim Davison’s study on public policy at the end of the seventeenth century offers one among many possible examples that show how necessity was equated with the category of moral right. In the course of the rise of speculation for big and small money from the 1690s onwards, derivatives appeared, including the renting of national lottery tickets for short periods. The slang for this was ‘hiring a horse’, while the paradoxically named ‘lottery insurance’ was another available instrument.³⁵ In the case of the former, there was the chance that the holder of a rented lottery ticket would win a prize during the rent time. The moralist writing for a weekly publication noted the difficulty of resisting the chance this represented, since ‘the Avaritious and Necessitous are alike drawn in, and fixing their Eyes upon the gilded Bait, the Twenty Thousand, it hinders them from regarding the Immensity of Odds, and the Improbability of Success’.³⁶ The ethical concern in this case was that despite the obvious risk and very low prospects of achieving a return inherent in these financial instruments, both the greedy and those in need were equally transfixed by what the author considered a ruse.

Viewing the system of public debt and investments as an aspect of patriotism was a relatively new approach in the 1690s. Anne Murphy mentions the moral dilemma and troubles of conscience of an investor – an experienced moneylender – in deciding whether to invest in the Million Lottery in 1694.³⁷ However, in the 1660s the idea that investing and lending money at interest amounted to an objective necessity was at once observed as a fact by everyone knowledgeable about politics and as an impossibility from a traditional moral perspective. This and the next chapter focus on the context and content of Locke’s ideas on money to show their novel departure from moral natural law and how they belonged to the sphere of an emerging science of economics.³⁸ In this perspective economic matters were no longer treated as issues in which the main agents were human beings interacting morally and socially and seeking to be virtuous. Instead, in Locke’s early writings on money, the key issue concerns economic phenomena that belong to an interdependent scientific system. This is not to say that previous authors had not observed the economic connections involved in the use of money. However, Locke only observed the systemic connections of the economy – primarily the national economy – from the perspective of purely economic phenomena; and ‘necessities’ is the main instrument through which he described the phenomena of the emerging monetary economy. As William Letwin put it in a chapter on Locke’s scientific economic thinking, the English philosopher offered the ‘economist’s view of the world, which the public cannot yet (!) comfortably stomach’. In a somewhat incoherent manner, Letwin rejected any suggestion of a natural science influence in Locke and attributed his remarkable novelty in economic scientific thinking to his studies of natural law.³⁹ However, Letwin’s description of Locke’s natural law as a ‘fusion of scientific principle and moral standard’ and his noting of the similarities between Locke’s laws of nature and those of Boyle and Newton and their assumption of physical necessities makes it clear that it was the notion of natural laws that had undergone substantial change. Interestingly, Letwin added that ‘Locke implicitly assumed that economic relations are akin to the facts of nature’.⁴⁰

Whether Locke in fact made that assumption or not, it is not crucial in observing that the issue of necessities is a novel thread in his thinking – which is partly theological and moral, partly medical and philosophical and above all drawn from the natural sciences – and concerns the strict sense of belonging to the physical body. I argue in chapter 12 that far beyond Locke’s capacity to synthesize earlier natural rights theories with great clarity, as scholars have previously argued – notwithstanding the exceptional nature of that ability – the focus in Two Treatises of Government and An Essay Concerning Human Understanding on ‘necessities’ rather than on ‘rights’ shows Locke’s originality with respect to previous thinkers.⁴¹ His theory concerning ‘the necessaries’ and ‘necessities’ rather than ‘rights’ gives systematic coherence not only to his economic writings, but to his entire philosophical theory. This novel approach is what made it possible for him to develop the theory of the public good with which he attempted to turn the foundation of capitalism on self-interest.

10.1.3 The (Sometimes Dark) Politics of Necessities

Locke, we are told, wrote the Two Treatises of Government during the Restoration period, to provide a theoretical foundation for resistance against the absolutist encroachments of an undesired dynasty.⁴² However, it was published, without substantial change, in radically different circumstances, after the triumphant moment of the 1688 Glorious Revolution. This shows that Locke’s project in the book went beyond Jacobite opposition. John Dunn, James Tully, Mark Goldie, Ian Harris, Timothy Stanton and Paul Bou-Habib⁴³, among others, have proposed a theological and specifically a New Testament interpretation of Locke’s natural law that is hard to deny when one looks at his entire œuvre.⁴⁴ What is less obvious is the manner in which Locke’s ambiguity may be explained.⁴⁵ Locke’s natural law theory in the Two Treatises of Government supports capital and labour, public and private interest, natural rights for everyone and the accumulation of money, confirms his dread of covetousness and hoarding, and yet sanctions it.⁴⁶ In short, Locke simultaneously works with a theology of equality and natural law,⁴⁷ and with a history of political theory and a political economy that are designed to undermine that theology. Together with a reconsideration of the place of natural rights in Locke’s natural law theory, the second aim of the three chapters on Locke in this book is to disambiguate this aspect of Locke. It does so by pinpointing the centrality of the concept of ‘human necessities’, and the relevant role of the ‘nation’ in Two Treatises of Government.

The paradox seems clear from the outset. The nation needs the wealth that comes through the accumulation of money and lands by the very rich, and natural law commands the provision of necessities and the preservation of every human being, something which the very rich seem to prevent with their egoistic tendencies. This, however, Locke corrects through the role of the nation. The authority of the nation is the invisible but fundamental element in the design of Locke’s natural law theory and in his lifelong political project. He regards the nation as probably the outcome of original sin, or at any rate of ‘the corruption, and vitiousness of degenerate Men’. In the beginning it was not like that. By ‘the Law of Nature’ a human being ‘and the rest of Mankind are on Community’ and were it not for the existence of evil individuals ‘there would be no need of any other; no necessity that Men should separate from this great and natural Community’.⁴⁸ Now, however, the nation was necessary.

M. J. Silverthorne has noted that in the late seventeenth century the term ‘the nation’ acquired a political and ideological connotation that it did not have before.⁴⁹ The idea of a ‘nation’ was pressed at the time even in terms of urging a change in parliamentary vocabulary. For instance, on the occasion of a parliamentary motion on 27 November 1697 to resolve the ‘Grievances of the Kingdom’, an amendment to omit that expression and replace it with a motion that the entire House of Commons would form itself into a Committee to consider ‘the State of the Nation’ was passed.⁵⁰ Leo Strauss and, more recently, Ian Hunter have tended to describe Locke’s theory of natural law as if designed to craft a minimal government. Locke would have understood government negatively, meaning that governance in relation to the individual should be as liberal as possible. Hence, the single motive for individuals in Locke’s state of nature to establish a common authority would be that of continuing their rational self-governance and protecting the rights that flowed from it – particularly in relation to property – with the ‘unparalleled capacity’ for that purpose offered by political authority.⁵¹ From the outset the theme of minimal government is at odds with Gordon Schochet’s statistical analysis of the frequency of use of the expressions ‘common good’, ‘publick good’ and ‘good of the society’ in Two Treatises of Government, which appear more than 60 times in the text. Schochet concluded that the significance of the public good was, though indeterminate, ‘self-evident’.⁵² A government must offer a remedy for the inconveniences of the state of nature, albeit that not just any government is equipped to do this.⁵³ Although it makes sense in relation to the dettament of government from theological questions, against the theory of the minimal government, my argument is that Locke’s studies of philosophy, money and medicine produced a novel form of natural law that focuses on the necessities of humanity and of the nation’s and promotes vigorous governments and richly complex civil societies.

Furthermore, the universality of natural rights appears to be achieved through the nation. Locke’s politics assume that legal and political measures taken by the government should act as a restraint upon monied men and curb their excesses. The common good, comprising both the nation and the individual, incorporates the new economic thinking through necessities. Working selfishly against the provision of necessities of other human beings, provision of which are sanctioned by God and reason, also means acting against the nation. The Two Treatises of Government repeatedly elaborate on the preservation of the individual and of mankind, usually together, thus underlining the importance of a common social project of subsistence. Therefore, in Locke’s work natural rights are not imbued with a sense of individualist rights. As John Dunn and James Tully have written, Locke always considers people in terms of their relations with God and other human beings, not as atomized individuals.⁵⁴ In the absence of an abstract, political humankind in reality it is in the nation where all these relationships occur. The origins of commonwealths were virtuous but poor, while the future seems to promise richness and insincerity.⁵⁵ Therefore, the government of the nation ought to keep in check the excesses and immorality of materialism. Further, the nation – any nation – needs wealth, virtuous individuals and labourers.⁵⁶

My argument that Locke was putting forward the idea of a nation whose governance in respect of natural necessities stemmed from universalist obligations is partly biographically and partly textually based. Locke was from the beginning of his career a professional philosopher and a natural lawyer.⁵⁷ However, in his early thirties, he became a public servant, a fact that tempered the troubled universalism of his early natural law. As became clear to him in the 1660s, the English nation required capital and labour for the unemployed and the poor. It was also the nation that would make real the will of God on earth for every human being. The nation would ensure that private interests thrived but did not take precedence over everything else. In this sense, Locke followed, in terms of fundamentals, the principles of the Protestant Reformers of the Long Parliament, and in particular of the Hartlib circle. He shared their cult of science and empiricism, their piety, their interest in the public good and in achieving general economic prosperity, and their expertise in and obsession with money and trade. He was personally acquainted with many of the main political, economic and scientific figures of this movement, often worked with them and learned from them. However, in all his writings the English philosopher eschewed the naïveté of their theoretical approach and of some of their beliefs and idealism, and was more brilliant, cautious and pragmatic in pursue of the same goals – his experience of real politicians, starting with Lord Ashley, Anthony Ashley Cooper, later 1st Earl of Shaftesbury (1621–1683) – may have had a significant impact on his philosophical style.⁵⁸ It is also true that, put simply, Locke took a commonsense approach to many of their wild financial, philosophical and other schemes (some of which were discussed in Chapter 4), curbing their excesses and enthusiasms in his own way. It also appears that the question of money rather than trade held more attraction for Locke in terms of service to the English nation and its necessities. This is clear not only from the centrality of money in his writings but also evidenced by his wish to be appointed to the position of ‘Comptroller of the Mint’ in 1695. This post went instead to the scientist Isaac Newton who had already been recommended for it. I. K. Steele writes that Locke’s participation in the activities of the Board of Trade was initially desired by the government, rather than being something either Locke or Sir John Somers (Lord Keeper and Locke’s patron) (1651–1716) had sought.⁵⁹

‘Necessities’ seemed to have taken its most evil turn in the political context of the empire generally, and in a manner that at least tarnish Locke’s fame when they referred to human beings under slavery.⁶⁰ Barbara Arneil and David Armitage have read Locke’s legal and political theory as either a defence or at least in ‘complicity’ with English colonialism.⁶¹ Hence, it was argued that in late seventeenth-century England the natural appropriation of land through labour defended by Locke in the Two Treatises justified the appropriation of America’s soil. It is useful therefore to look at Locke’s activities before the publication of the Two Treatises of Government. Locke started his collaboration with Lord Ashley as doctor and advisor in 1667. He later became Lord Ashley’s principal secretary, between 1672 and 1675, helping him in his official responsibilities as a colonial and business administrator.⁶² It was thanks to Ashley that the obscure Oxford academic became known to the world. The beginnings of their relationship were very propitious. Locke was 34 years old when he played a key role in a complicated surgery suffered by Lord Ashley Cooper and in his convalescence, both very hazardous at the time.⁶³ In return, Lord Ashley aided Locke’s transformation from a scholar into a civil servant working in the public administration of the English nation and empire. Peter H. Nidditch opines that Lord Ashley probably added an ‘economic dimension’ to Locke’s developing liberal ideas.⁶⁴ And, as I will argue, Robert Boyle also contributed on this issue. Ashley had been already active in colonial policy. He invested in and was a public administrator of some of the biggest companies in existence at the time, including the Royal African Company and the Hudson Bay Company, and was one of the eight Lords Proprietor of Carolina. In 1670, he became Commissioner of the Treasury and member of the inner Cabinet, and in 1672 Lord Chancellor and President of the Council for Trade and Foreign Plantations.⁶⁵

Lord Ashley oversaw improving the disastrous management of the colonies and promoting trade with them and introduced the inexpert but very sharp Locke to contemporary thinking on trade and money for political and imperial purposes. During this period Ashley had a great deal of power, as can be seen from records of his dealings, in relation to seeking to make the ‘Southern Plantations’ (e.g. in Barbados and Carolina) flourish.⁶⁶ His protegé learned at first hand the aristocrat’s early attempts to create a situation of mutual benefit as between landed proprietors and investors and the empire at large. Through his collaboration with Lord Ashley, Locke the civil servant was in a key position, able to witness important events and learn from them, while also initiating development of the constitutional framework for the common prosperity of the colonies and the nation. Famously, Locke was involved in the drafting of the Constitution of Carolina, which, despite the contemporary disregard of the settlers, are now assessed as amounting to ingenious legal drafting that greatly contributed to the stability of the life of the colony.⁶⁷ Lord Ashley invested hope above all in well-managed plantations with abundant crops that could be traded successfully. As Thomas Leng writes, the implementation of this vision lay in his ‘aristocratic’ understanding of empire as amounting to the burden and privilege of landed proprietors.⁶⁸ Locke’s substantial involvement in the amendment of the provisions of the Fundamental Constitutions of Carolina, which reinforced the settlers’ power of life and death over African slaves over the years, is a historical fact.⁶⁹ Nevertheless, that pragmatic support of slavery is irreconcilable with Locke’s philosophical and theological thinking. He fundamentally opposed the notion that God had given one human being dominion over another.⁷⁰ The perspective that the greater dream of production and riches for the economy of the empire took priority above almost every other political consideration is one way in which to rationalize his involvement in drafting the consent to these powers. Other ideas about the ‘necessaries’ for the colony seem to be derived from that clear set of goals. Thus, in a letter to a merchant who transported settlers to Carolina, Ashley instructed him as follows:

forbeare to invite the poorer sort yet a while … it being substantiall men and theire Familyes, that must make the Plantation which will stock the country with Negroes, Cattle and other Necessarys, whereas others relye and eate upon us.⁷¹

The meaning of ‘necessaries’, referring to enslaved human beings, was here an aspect of the management of a wider colonial economic policy that probably derived more from Ashley than Locke, who was at all times a subordinate of a very shrewd statesman.⁷² Since also Lord Ashley appears to have personally abhorred slavery, his view on this matter reflects the concept of economy as a reason of state, which was becoming sadly general during the period in question.⁷³ This approach has similarities to Boyle’s imperial dreams in relation to the utility of science as discussed in Chapter 6. Lord Ashley’s economic thinking was undoubtedly influenced by the Reformers’ scientific views and specifically by another of his protegés, Benjamin Worsley, whom we have met already. The self-described author of the Navigation Acts, Worsley depicted the colonies as a happy and rare instance in which the nation could gain territory and trade at the same time. To those one may add, capital, since Ashley was determined to further enrich himself in the process, seemingly without embarrassment. On the contrary, he viewed capital increase as the mark of the success of the imperial enterprise – while the Reformers and probably also Locke cared more for the ‘happy levellinge’ of rich and poor.⁷⁴

It is also remarkable that Locke’s rise in influence and power coincides with Lord Ashley’s fall from grace: he was dismissed from his post of Lord Chancellor in 1674, was removed from his position in the Privy Council the following year and later became dangerously unstable. He was the prime mover in the conspiracy against the King in 1682 and perhaps in the plan to assassinate Charles II and the Duke of York in March 1683, in what came to be known as ‘the Rye House Plot’; he died in exile in Holland in January 1683, before the events in question took place.⁷⁵ The prudent Locke had already established some distance from Ashley, in view of these matters, spending the period from 1675 to 1678 in France. However, he was tainted by his proximity to the late lord and had to fight to prove his innocence.⁷⁶ He travelled to Holland in August 1683 and did not return until 1689, during which period he wrote An Essay Concerning Human Understanding. According to his biographers, and despite his strenuous denial of the fact at the time, it appears that he was also involved in revolutionary politics during his time in Holland.⁷⁷ When William and Mary acceded to the throne after the Glorious Revolution, Locke was appointed Commissioner of Excise Appeals in 1689. From 1696 to 1700 he was a member of the newly established Board of Trade and Plantations, which seems to have been the first ‘really weighty body of expert opinion on political and economic matters’ in England. He sat on the Board as an expert in a matter that he had certainly mastered thanks to the training received with his early patron.⁷⁸

Locke’s writings show varying perspectives on the same theme – that is, how to preserve human nature and the nation – and the necessities of human nature were of key importance in the development of his theories in each of his main philosophical works. The unity of his thought is thus facilitated by the notion of necessities as (a) being instruments of sense and reason by which to perceive the world around us, (b) constituting the content of the natural law that seeks to preserve human nature, and (c) being a core economic notion that also explains the circle of trade through money. Through the doctrine of necessities it is explained how Locke modified moral natural law and established human necessities at its heart. Figure 10.1 shows that ‘necessities’ is a shared foundational concept in Locke’s main works.

Figure 10.1 Locke’s Doctrine of Necessities

10.2 Usury, Interest and Science

In mid-seventeenth century, England monetary interest remained an acutely religious and moral issue. This fact highlights the originality and boldness of Locke’s 1668 proposal to allow interest on money to fluctuate freely with the market. The traditional trouble did not of course lie with money lending per se: all laws permitted it and divine and natural law, in particular, encouraged it. What divine law, the laws of charity and Aristotelian philosophical tradition censured was lending at interest, especially onerous rates of interest.⁷⁹ However, in a country ‘without mines’ as contemporaries put it, whose goal was to participate in burgeoning international trade, and which experienced a remarkable growth in domestic consumption of goods, the lack of monetary institutions and monetary policy had become a burden.⁸⁰ Voicing the opinion of some, in the early seventeenth century, the learned Francis Bacon had noted that the disappearance of usury belonged in Utopia. Bacon did not encourage the relentless pursuit of lending but, as a necessary evil, he recommended its toleration.⁸¹

Apart from Bacon’s short, though influential essay ‘On Usury’ (1612), several canonical authors are usually regarded as having led the movement towards opening up the reformed world to usury. These include the Protestant civil lawyer Charles du Moulin (1500–1566), the theologian Calvin (1509–1564) and the Dutch Calvinist Claude Saumaise (Salmasius) (1588–1653). Furthermore, the very popular Consuetudo, vel lex mercatoria by Gerard Malynes (1586–1641), published in London in 1622 and written by a merchant who had a thorough knowledge of his subject, shows how this issue was being handled in practice in England. Du Moulin and Calvin argued that usury was in causing damage and fraud to our neighbours, and not in extracting utility of them. The French jurist’s essentially anti-Aristotelian position wrote that ‘conscience does not bind when nature does not oblige’ (Conscientia non ligat quos natura non obligat).⁸² Salmasius was more aggressive, approving of moneylenders that derived their profits from the poor. In his magisterial history of the practice, Eugen von Böhm-Bawerk, would, as a neoclassical economist, censure the condemnation of usury, and not the practice itself.⁸³

10.2.1 Fraternal Love versus Love of Money

The evils arising from generalised usury were grave and were felt immediately. Its social consequences included increased covetousness, extorsion and damage to fraternal love. In the context of Christian theology, its worse effect was a threat to each individual’s relationship with God. In Aquinas’s phrase, the correct use of material goods depends on a good will, meaning a will that naturally loves God more than oneself.⁸⁴ Love of money posed a great impediment to the attitude that the Christian God demanded. Usury first devoured the souls of those practising it and then destroyed the community. As is well known, that was not an exclusively Christian standpoint. The communitarian Aristotelian position stated that in a society of friends, of virtuous, liberal individuals, money would flow freely and cash transfers for those in need would be the outcome of virtue. Albert the Great’s description of usurers and merchants (in the thirteenth century) was that they were ‘illiberal’, whereas ‘the liberal uses moneys well’.⁸⁵

In a nutshell, the classic theory against usury, though not strictly monolithic, possessed an important core.⁸⁶ It was not in the nature of money to yield fruits. Money was consumed through transference (per translationem). The theologian and finance expert Henry of Ghent wrote that in relation to money it was impossible to allocate separate prices in respect of ‘substance’ and ‘use’ and that therefore no profit could be derived from its use.⁸⁷ The argument concerned respecting the nature of the thing – in this case, money. Odd Langholm points to Aquinas’s very similar negative argument against usury:

The principal use of silver plate is not in its consumption; and therefore one can licitly sell its use retaining the dominion of the thing. The primary use of silver coin, however, is its disbursement in commercial transactions. It is, therefore, not legitimate both to make a charge for its use and to expect the money lent to be restored.⁸⁸

Consequently, Aquinas and, later, Henry regarded the divided dominion of money (between principal dominion and its use) as sinful. In view of the nature of money, changes in time and place did not entitle a person to obtain more than an amount reflecting its substance or quantity.⁸⁹ As is well known, Aristotle had deeply influenced theologians on this issue. The famous passage of the first book of Politics stating that profiting from something naturally sterile like money went against nature is worth quoting:⁹⁰

The most hated sort (of money-making), and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term usury, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Whereof of all modes of making money this is the most unnatural.⁹¹

These efforts to establish a bulwark against the practice of usury in the Western philosophical and theological traditions alike had exploded by the mid-sixteenth century, giving rise to a shift from the condemnation of usury per se towards more or less general censure and regulation of fraudulent practices in the context of usury, similar to the positive regulation that exists today.⁹² However, it took some time before there was general acceptance of the rightness of this approach, in respect of which von Böhm-Bawerk stated that the ‘Church, the law and the learned world had condemned [usury] with one voice and opposed [it] with arguments drawn from all sources’.⁹³ So much so, that the historian Richard Henry Tawney, writing in the twentieth century, viewed the question of usury and money as one of the main economic controversies of sixteenth-century England.⁹⁴ The intermittent social, religious and theological chaos characteristic of the period surely did not help. Robert Ingram’s argument that in the eighteenth century the English long Reformation was still underway is a plausible estimate of its duration.⁹⁵ With that in mind, we may only imagine what the situation was like in the late sixteenth and seventeenth centuries. In summary, the situation was confusing, and doctrinal positions as to theology and the law were extremely uncertain and sharply divided.

10.2.2 The Acts against Usury

An overview of the discussions in Parliament from 1614 to 1660 for and against the abatement of usury shows not only economic reasons – such as fluctuations in the price of land, the problem of the hoarding of money and the fact that usurers would send their money abroad if interest rates were lower at home – but also an element of religious scandal. The legislative evolution that took place in the 1640s was culturally very relevant. What Vera Keller has referred to more broadly as ‘the Interregnum Christianizing of Interest’ occurred literally in the House of Commons.⁹⁶ It started in 1648 with the consultation of ‘the Divines’ on the notion of ‘Usury’:

Ordered, That as to the Word ‘Usury’, in the Paragraph of the Large Catechism, be re-committed to the Assembly of Divines: And it is referred to the Assembly of Divines, to explain what they mean by the Word ‘Usury’, in that Place; and to return their Opinions to the House.⁹⁷

This was followed in 1651 by new neutral language about ‘Interest of money’ and legislation ordering at once a reduction of the interest rate to 6 per cent and the removal of the word ‘usury’:

The Question being put, That the House doth agree with the Committee, that this Proviso, ‘Provided That no Words in this Law contained shall be construed or expounded to allow the Practice of Usury, in point of Religion or Conscience’, be left out.⁹⁸

With the Restoration, this concept was stoutly revived, and thus we read in the records that in the summer of 1660, in discussing the reduction of the interest rate to 6 per cent, the House ‘Resolved, That the Title of the said Bill be, An Act for Restraining the Taking of excessive Usury’.⁹⁹

In God and the Money Lenders, Norman Jones relates the history of the Acts against usury and the indignities that the spread of usury caused in late sixteenth-century English society.¹⁰⁰ These included the imposition of interest rates of up to 25 per cent or more, the appearance of professional middlemen, and so-called ‘brokers’ squeezing the borrower to the extreme, especially the poor. In 1570 preachers decried the universality of the vice of usury in England, in which everyone ‘was involved’.¹⁰¹ After a more lenient prohibition by Henry VIII in 1545, and a drastic one by Edward VI in 1552, the 1571 Act Against Usury was enacted. In his phenomenal though occasionally Whiggish, early history of joint-stock companies in England, Ireland and Scotland, William Scott points to two positions in the parliamentary discussions of April 1571, prior to passing the act.¹⁰² There was one group of moderates as well as another, which ‘relying on Scripture, Aristotle, Canon Law and other authorities’ was wary of the danger to young gentry of falling into the traps set by usurers and to the Queen’s Custom if people put their money into usury attracted by high interest, rather than into trade.¹⁰³ A study of the parliamentary discussions of that day, however, reveals that those against usury did not merely employ the scriptural and ‘Praeter Naturam’ argument against lending money at interest, but also quoted the ‘most ancient laws of this realm’.¹⁰⁴ The antiquarian Sir William Fleetwood (1525–1594) noted that many laws and inquiries against ‘Christian usury’ appeared in the records.¹⁰⁵ Soon to be Recorder of London, a legal office of conservator of the peace and supreme judge in the city, and valued by the Queen in that position, Fleetwood knew the ancient laws and manuscripts well.¹⁰⁶ Hence, he declared

that Usury was malum in se, for that of some other transgressions, her Majesty may dispence afore with; but for Usury, or to grant that Usury may be used, she possibly cannot.¹⁰⁷

A notorious anti-papist and priest hunter, who ended up in jail after breaking into the Portuguese Ambassador’s residence in search of English Catholics participating in the Mass, Fleetwood was, probably due to that zeal, dubbed the Earl of Leicester’s ‘mad Recorder’ in Leicester’s Commonwealth, a libellous text written against Robert Dudley, Elizabeth’s favourite and a leading political figure at the time.¹⁰⁸ Fleetwood has been rescued from obscurity on account of his having been a very knowledgeable antiquarian both of the history of England and of more contemporary authors such as Macchiavelli and Bodin.¹⁰⁹ That in opposition of those advising to concentrate the prohibition on the degree of usury, that is, the modern position, Fleetwood had such an uncompromising standpoint against the entire practice, is remarkable as a proof of the strong prohibition against usury in traditional English law and the conflicting feelings that this fact provoked at the time.

The new Act of 1571 tolerated usury and prohibited interest rates above 10 per cent. It also recognized some charitable forms of lending money at interest, as in the case of orphans’ and widows’ states. Despite the command to limit the rate, lending at interest on a large scale generalized at any rate of interest that could be got. Hence, the issue of public policy became the manner in which to secure enforcement of the law through informants. Jones links the transformation of attitudes towards usury at the end of the sixteenth century to broader theological issues concerning grace and good works. The dangers of covetousness and idolatry in relation to money were glossed over and the divines now began to refer to lending with purity of heart and good intentions. Since only God knows what is in one’s heart, so this argument went, the important thing was to keep a pure conscience. Jones takes the view that this perspective lay at the heart of the 1624 Act against usury that allowed lending at 8 per cent and reminded lenders of the need to maintain a pure conscience.¹¹⁰ The merchant scholar Gerard Malynes stated that position clearly in 1622. Usury was more subjective, than objective. A loan in which the interest compensated for loss (ex damno habito) or loss of profit (lucro cessante) was not usury. The circumstances justifying the application of interest to a loan included the profits that the borrower may acquire through use of the loan, whether he or she is in real need, the rate of interest and so on. A person granting loans would of course react to economic events but should do so with mercy for those in need and with each particular borrower in mind.¹¹¹ As studies of English economy up to the end of the seventeenth century make clear, in a deeply experimental and disorganized economy the issue of the rate of interest to be applied to money was interlocked with other measures designed to stimulate economic growth. These measures remained underexplored and not fully understood. In particular the scarcity of money in specie (bullion coins) remained an unexplained curse at the time.¹¹² In the early 1620s, Sir Thomas Culpeper (1578–1662) declared that high interest rates on money discouraged trade in favour of the business of lending and chilled communal attitudes in society by a ‘care upon one another with usury’.¹¹³

10.2.3 The Concerns of Gerard Malynes

Malynes’s voluminous Consuetudo, vel lex mercatoria of 1622 offers probably the most thorough and informed contemporary account about interest on money from a merchant’s perspective and was rightly praised by Hartlib.¹¹⁴ According to his biographer, Malynes had a long career of disasters and mischiefs as a merchant, but managed to stay consistently close to the upper echelons of government. He seems to have redeemed himself by this learned work, six chapters of which are devoted to usury.¹¹⁵ In Baconian spirit Malynes expressed the need for usury for ‘traffick’, while he rather opted for not allowing very high rates of interest, apparently agreeing with Sir Thomas Culpeper. Still a Renaissance man, Malynes was all for order and harmony, and thus for contemplating different interest rates for different groups of people, merchants, humble householders and the poor. But where Malynes appears more original was in his call to address the ‘Usurie politike’, in relation to which, in a country without banks or similar institutions, he urged the government to intervene by means of economic policies to promote the common good on a large scale.¹¹⁶ Craig Muldrew’s study on the expansion of credit makes it clear that Malynes was right to point to the problems that resulted from lack of governmental intervention. Societal interpersonal relations were carrying the burden of the rapid development of the market, and legislation allowing usury for everyone only increased that pressure. Malynes realistically depicted the widespread practice of usury and its main effects on the humblest workers, ‘the mechanick’ men and women, who were often tricked into receiving loans for very short time periods, resulting in having to pay interest of up to ‘400 percent in the hundred’ per year – while the law allowed 10 per cent. Malynes critically applied the ubiquitous seventeenth-century metaphor of the clock in Consuetudo, vel lex mercatoria. He wanted to show how the wheels of crime were all connected, like in a clock, since the ‘brokers’ who extort money from the people ‘have their money masters, to whom they pay twentieth in the hundrethe’. He took the view that the lack of governmental policy in this area was the chief cause of the abuses and accordingly recommended ‘a godly work’ that would be equivalent to ‘the Bridges’ in the Low Countries or ‘the Montes pietatis’ (‘Banks of Charity’) in Italy where people in need could pawn things or receive loans without interest. Malynes mentioned a list of 1500 charitable persons he had prepared that would be willing to donate money to that enterprise. However, he added, nothing had come of it due to the intrigues of a person in whom he had placed trust.¹¹⁷

In effect, the merchant scholar was all for the money business. However, he also reflected on the need for some sort of institutional effort for the common good of the people – for a policy that would go beyond the current legislation that merely allowed usury. That collective effort would afford every decent person that wished to do so an opportunity to participate in the economic life of the nation, without danger of falling into the hands of usurers. This would have the added advantage of getting rid of criminals, since ‘according to the Prouerbe, If there were no receiuers, there would be few theeues’.¹¹⁸ Hence the significance of Malyne’s pioneering ‘Usurie politike’ lay in its advising political control over the new financial life of the nation in a manner that would stimulate and multiply citizens’ economic transactions while also preventing organized crime and observing the rules of charity.

For all the widespread practice of usury and the legislation encouraging the application of up to 10 per cent of interest for money, the moral issue relating to this practice continued to be a subject of hot debate for decades. In The English Usurer or Usury Condemned, John Blaxton showed that doubts over the morality of usury were not put to rest with the new legislation. There was a difference, he suggested, between the legislation and what a pious Anglican would do. The legality of usury, Blaxton wrote, could not ‘excuse the usurer in the court of conscience’.¹¹⁹

10.2.4 The Scholars’ Discussion

Responding to a collective of divines and despite a more scientific bent in some of its parts, Robert Filmer’s tract A Discourse Whether it May be Lawful to Take Use for Money argued in favour of the morality of usury, largely as a response to Roger Fenton’s A Treatise of Usury Divided into Three Books of 1611.¹²⁰ Filmer’s text on usury is altogether Biblical, advising, nevertheless in the style of the new science to use ‘the light of Nature’ and ‘reason or sense’. Following revision of the various laws, Filmer concluded that ‘the law of God no where in plain terms forbids the increase of Mony’.¹²¹ Overall Filmer proved again, as he did in Patriarcha, that he was a tough man of innovative but obscure theological credentials. He was influential though, and it is remarkable and indicative of his impact that, though probably written in the 1630s, A Discourse was first published in 1653, the year of Filmer’s death.¹²² Peter Laslett’s appraisal that Patriarcha reflects ‘conventional theology’ is nowadays discredited.¹²³ Johann P. Sommerville has shown that it is untenable to pin Filmer as the orthodox Anglican against Locke, the secular libertarian. In fact, the two authors’ ideas share the same roots, with Filmer being, interestingly, the more radical in theological terms.¹²⁴ For example, Patriarcha contains a number of departures from the Bible. In noting that Jewish Law prohibits practising usury on the poor, Filmer stated as follows: ‘But with us it is otherwise; if by any other meanes we do sufficiently relieve the poor, then even the taking of Usury of them is no sin, nor oppression.’¹²⁵ Filmer did not fail to mention the question of usury again in his well-known ‘Observations Upon Aristotles Politiques Touching Forms of Government’, this time placing the political relevance of usurious practices in its historical context.¹²⁶ The ‘Commons’ in Rome found themselves terribly in debt after the wars that endangered their estates, and ‘as they thought, oppressed by usury’, complained ‘of usury and of the power of the Consuls’ and managed by sedition to obtain the election of magistrates that represented them as the tribunes of the people.¹²⁷ He also noted the ‘incredible gains’ achieved in terms of public revenue from ‘the usury of the Jews’ in Venice,

for in every city they keep open shops of interest, taking pawns after fifteen in the hundred, and if at the year’s end, it be not redeemed, it is forfeited, or at the least, sold at great lost. The revenues which the very courtesans pay for toleration, maintain no less than a dozen galleys.¹²⁸

Through this kind of public policy, Filmer seemed to suggest, the practice of usury spread in society and the Jews were exploited at the same time.

In A Treatise of Taxes, William Petty devoted a chapter to ‘Usury’ and commented on the reasonableness of paying interest on loans on the grounds of the inconvenience caused to the lender through making the loan, which amounts to an elaboration of the classic argument also put forward by Aquinas in terms of the ‘loss of the lender’ (damnun emergens).¹²⁹ Petty astutely changed the perspective: instead of criticising the morality of usury on the basis of the borrower’s need, he defended its licit nature by looking at ‘the necessities’ of the lenders:

Wherefore when a man giveth out his money upon condition that he may not demand it back until a certain time to come, whatsoever his own necessities shall be in the mean time, he certainly may take a compensation for this inconvenience which he admits against himself: And this allowance is that we commonly call Usury¹³⁰

More to the point and, and seemingly with similar ideas to Locke’s, he employed the conception of ‘simple natural interest’ as ‘the Rent of so much Land as the money lent will buy’. Where security was uncertain, and troublesome, as in England, Petty thought that interest must be employed; that was in itself unpredictable, amounting to ‘any height below the Principal’. It was fruitless, in Petty’s view, to seek to limit usury at any given time and in any given place, and was akin to making ‘Civil Positive Laws against the Laws of Nature’ – an activity that involved ‘a vanity and fruitlessness’, and Petty could only think ‘that those who make such Laws were rather Borrowers then Lenders’.¹³¹

Among the books in Locke’s library was A Letter to a Friend Concerning Usury, published in London 1690.¹³² The Catalogue produced by John Harrison and Peter Laslett indicates that it was the only work on the issue of usury that he possessed. It argues against high interest rates and is concerned with summarizing the ideas for and against the reduction of interest in works penned by Sir Thomas Culpeper in 1621, Sir Thomas Culpeper junior (1668), Sir Josiah Child (1668) and Thomas Manley (1669). These works are in the main economic tracts, although all also touch upon the moral uncertainty of usury. This is particularly true in the writings of Sir Thomas Culpeper junior, who made a point of demonstrating that it was unlawful. Josiah Child’s Brief Observation Concerning Trade, and Interest of Money, published in 1668, adopted an international perspective through which he sought to show the negative aspects of a high interest rate. While Child – who was soon to be Governor of the East India Company – acknowledged that a high rate of interest might attract Dutch money, he stated that was a ‘meer Chymera’ which would not increase the circulation of money in the country on a consistent basis. At any moment the Dutch could withdraw their money. Quoting the Bible, once again with reference to interest, Child recalled the lesson of ‘that wise legislator’, Moses, forbidding the use of money at interest among Jews and permitting it to foreigners. The Nation would become richer without high interest at home and no public good could ensue from consenting to it. Moreover, in terms of moral behaviour, the accrual of high interest on money also led to all sorts of vices, such as idleness.¹³³ The staunch defence of a higher rate of interest in Thomas Manley’s controversial Usury at six per cent examined takes much less of a moral tone. Its main point was that abatement of usury was only possible in a rich country, while forcing ‘Usury as low amongst us, a needy and declining people’ was as reasonable as expecting fruitfulness from a barren land, thus repeating the strategy of painting a dark picture of the economy employed by those who called for higher interest rates. One of a cohort of pamphleteers, Manley blamed the bad economic situation (as he saw it) upon the idleness of the poor and was probably among the first to openly praise usurers for their service to the commonwealth.¹³⁴ Sir Thomas Culpeper senior was the most original of the writers under consideration, and his approach probably set the tone for many subsequent tracts, including Locke’s. His insistence that ‘Land and money are euer in ballance one against the other’ may have given Locke impetus to think the issue through.¹³⁵

It was, of course, a moral approach that Robert Sanderson took when discussing usury, but the winds of change are already visible in the respected moralist’s work. Almost writing from the trenches of morality, attacked from all flanks, he wrote that one ought not be forced to lend at interest. He discussed usury in the context of necessary evil, as well as in other contexts. As ‘an evil thing’, similarly to other evils – divorce is the other example he gave –usury may be permitted by the law, since there were some evils that could be made to disappear only at great inconvenience to the public. Therefore it ‘pertaineth to the political prudence of Government’ to moderate how it was used, and in order to make it ‘subservient to the Publick profit’, delimit the bounds within which it was lawful. Permitting an evil, however, did not force anyone to commit it. Sanderson underlined that ‘nevertheless this is certain, that were it never so lawful, no man by that permission is obliged to the exercising of it’.¹³⁶

The letter from the physician and religious controversialist Lewis du Moulin (1605–1680) to ‘the very noble’ Robert Boyle on the question of usury testifies to the anxieties Boyle suffered on account of this issue, perhaps due to his own activities, or in the light of the proposal to readmit the Jews to England.¹³⁷ Du Moulin wrote that moral law and natural equity prohibited usury, but that one also must distinguish between loans that helped and loans that bit (juvantis or laedentis), the former being allowed and the latter prohibited.¹³⁸ However du Moulin’s larger conclusion was that ‘all the usury that benefits the debtor is licit’.¹³⁹ As a means of allowing a debtor to use someone else’s money, it was permissible for creditors to demand interest on their money. It was true that God had prohibited the Jews from practising usury among themselves. Nevertheless, it was permissible if practised in accordance with moral law and natural equity. And, like Filmer, du Moulin noted that that prohibition of usury that applied to the Israelites did not affect Christian countries.¹⁴⁰ In addition, he considered that the arts of banking and commerce though more prone to vice than other liberal arts gave no cause to suspect dishonesty or deception if practised ‘within the bounds of the rigor of the law’.¹⁴¹ Here du Moulin contributed two interesting ideas. First, he focused on the promotion of the borrower’s commercial activities. Second, in describing banking as being like any other profession and endorsing a legalist conception of the state, he indirectly pointed to the urgency of having good laws to regulate moneylenders’ activities.

10.2.5 Economists and Scientists

Appeals to the divines in relation to usury began during the last years of the reign of Charles I, prior to the breakthrough on usury made during the Interregnum. This is evidenced by Henry Robinson’s England’s Safety in Trades Encrease, presented to the High Court of Parliament in 1641. Robinson (1605–1673) is regarded as one of the most brilliant and versatile English economic thinkers of the seventeenth century and one of the leading non-ecclesiastical theorists of Independency.¹⁴² Lord Ashley Cooper was not only one of Robinson’s protectors, but apparently also one of his pupils in economic matters during the busy years before the Restoration.¹⁴³ England’s Safety in Trades Encrease contains a long list of reforms Robinson deemed necessary to resuscitate trade and the national economy.¹⁴⁴ The text also shows that he was the main inspiration behind later economic schemes, that figures such as Worlsey and Locke put forward as their own. As a member of a family that had been successfully involved in the practice of trade for more than a century, his expertise went beyond the theoretical and chiefly lay in his capacity to think about economy and trade with the breadth that the contemporary English context demanded. Robinson knew how to take into account the West Plantations, the East India Trade, and all the English territories in reordering the economic life of the country, with the ambitious goal of making ‘of England the Emporium’ of the world.¹⁴⁵ In the context of recommending the introduction of ‘Faires or Money marts’ such as that of Lyon in France or Placentia in Italy, Robinson – who faced issues in an upfront manner – produced an instructive and detailed discussion of usury. His purpose was to encourage the employment of bills of exchange, by which merchants could be given the money they needed immediately, to be paid back at an agreed time at a level slightly higher than the prevailing rate of interest. Catholic merchants, Robinson argued, had invented the ‘unnaturall use of Exchange’ as a means to obtain absolution in their confessions, a pardon that was denied if they presented their dealings openly as usury. Robinson’s remark also shows how much of an influence Aristotle remained on mid-seventeenth-century English consciousness. The usurers of Venice avoided the charge of being in that business by sending their money abroad, for example to London, with no other purpose than to put the money to use and obtain interest on it, while also helping merchants that endorsed the bills of exchange by relieving them of the need to carry coins.¹⁴⁶ Robinson’s discussion of the contemporary theory of usury in a tract on how to increase trade is representative of an approach in which the ‘safety of trade’ included both economic and moral aspects of ‘safety’. Nevertheless, the fact that the matter was now being addressed by a professional merchant was equally characteristic of the change of atmosphere. Robinson’s aim was to shine a light on the muddle reigning in relation to the question of usury. ‘Protestants and Papists Doctors, Divines and Lawyers’ all disagreed in what exactly the definition was, but Robinson considered the following to be the most useful general definition: ‘Usury is received profit from a debtor for the use of a thing given in loan’ (Usura est lucrum receptum à Creditore pro usu rei mutuó datae). However, in his view that definition was incomplete, since it did not include the ‘mutuall’ and ‘intentionall’ usury, which was also condemned in foro conscientiae. It also disregarded the complex nature of ‘giving in loan’ (dare in mutuum): a house may be rented, wages may be paid, a horse may be lent, and these did not constitute usury. For Robinson, demanding either 2 or 10 per cent was usury – the exact rate was immaterial. That did not mean, he suggested, that one ought to oppose absolutely the practice of usury. Those who read Luke 6:35, Date mutuum, nihil inde sperantes (‘lend without expecting anything back’) as an absolute prohibition, were undertaking a radical interpretation that was not altogether justified since it disregarded the fact that in Deuteronomy 23:20 the Lord allowed the Jews to practice usury in relation to foreigners. Thus, Robinson’s argument was that the discussion about making the use of money legitimate ought to move beyond ‘need’. Robinson went to the heart of the matter when he pointed to the distinction between ‘need’ and ‘profit’ and made an argument in favor of virtuous facilitation of one’s neighbour’s profit.¹⁴⁷

In England’s Safety in Trades Encrease Robinson launched a momentous challenge aimed at addressing the gulf between moral theory and commercial practice. He proposed that the divines should take the matter into serious consideration and declare what percentage of interest amounted to usury. All authors agreed currently, he noted, that taking 8 or 10 per cent of interest on the use of money was usury and unlawful, while nonetheless being practised by entire nations, ‘so sweetly and powerfully doth gaine and lucre benumbe the conscience’. England, and the entire world, accordingly needed an ‘adequate’ definition that would not ‘vitiate most contracts, bargaines, and sales, so commonly practised by all nations to the multiplying of trade, and reliefe of whole Kingdomes’. Reformation of trade ought not to signify ‘the ruine of ⅔ of all commerce throughout the Universe’ – a reformed commonwealth must therefore make usury legal and legitimate.¹⁴⁸ In line with the ideals of the new science of the advancement of laypersons he urged: ‘at this studie and consultation of our Divines I crave leave to be bold, and entreat them not to disdaine that light which experts Merchants might give them in this poynt’.¹⁴⁹

However, fears as to the irreligiosity of usury persisted throughout the Interregnum among the pious Reformers. William Potter’s 1650 tract, The Key of Wealth, or a new Way for Improving of Trade, is probably the most remarkable text on this topic to have appeared in the period in question. It evidences again that in the England of the new science the question of the ‘lawfulness’ of putting money out at interest was both a delicate moral matter and a pressing economic quandary.¹⁵⁰ After half a century of reflection upon Bacon’s call to consider usury in practical terms, the greater part of the problem that remained was as to what those practical terms comprised. Which were the correct means by which to obtain credit and thus resuscitate trade in the defunct post-Civil War economy? Furthermore, how could more bullion, and thus money, be obtained in a country without mines?

Published on 15 September 1650, The Key of Wealth appears pitched somewhere between fantasy and reality but contains an array of brilliant ideas. It is a futurist tract, which proposes the establishment of a company as ‘A Certain Myne of Gold’ built upon security provided by land and by insurance mechanisms that would create a new form of paper money.¹⁵¹ For ‘the use and possession of the said Myne’, Potter asked for a number of investors to lay out the money to purchase the land and guarantee the insurance system. Then, in order to increase their trade, rich and poor traders alike would be able to borrow from the money generated by the land rents, in whatever sum as they could offer security for, on the basis of a bond that required repayment of the money in six months.¹⁵² Wennerlind regards Potter’s Key of Wealth, along with several of Robinson’s and Hartlib’s writings of the 1650s that were inspired by it, as a turning point in the endeavours of Hartlib’s scientific circle. He takes the view that this was the moment at which alchemy and experiments aimed at transforming base metals into gold were abandoned in favour of the far more realistic idea of monetizing land as security and the promotion of land-banking as the means to supply much-needed credit. In ideological terms, this represented a movement from the ‘transmutation of nature’ to the ‘passive security of nature’.¹⁵³

The religious and moral question of usury also arises in the context of the connection between alchemy and credit-money. The undesirable social consequences of usury – enriching the few and entailing money being sent out of the country – plainly conflicted with the Reformers’ religious ideals. They were democratic and suspicious of greed, but at the same time the entire political project of the Commonwealth depended on England’s economic success. In the pursuit of wealth, recourse to alchemy, the land-banks and other means of producing credit were indicative of the efforts undertaken by the intelligentsia in their search for alternatives to usury.

In his correspondence with Hartlib, William Potter emerges as an unhonoured man, unsuccessful in his business career as an inventor and, perhaps for this reason, something of a fatalist in outlook. At the same time, Potter stands out among his peers as being not only incredibly knowledgeable about money but as a visionary who was half a century ahead in his creative approach to it.¹⁵⁴ In 1690 the Government of Massachusetts produced paper money for the first time, as proposed in The Key of Wealth, to pay for the invasion of Canada, and the link between that event and Potter has been only recently established.¹⁵⁵ Potter weighed the communal aspects of adopting a security in relation to land and creating a common fund of credit against interest-driven usury and its intolerable elitist aspects. The book’s introduction explains that this entailed going beyond ‘nature alone, (without improvement by the use of mans Reason)’ and unlike ‘the brutish people of America’ who lived ‘upon Roots and Acornes’ to benefit from the ‘Accomodations’ furnishing ‘Art’; it was also about providing ‘help, for the crying and the dying poor’, and that ‘the Rich may wealth increase’ and fundamentally that ‘none shall neede (who now will Work) to want their dayly-bread’.¹⁵⁶

Potter took the view that the way to revive the ‘decayed trade’ in any place was to ‘encrease money’, which, in his opinion, would not cause the prices of commodities to increase.¹⁵⁷ On the contrary, extraordinary quick trade, in which the market takes as much as it can, would make commodities and produce cheaper, and thus land-rents would fall. At the same time, landlords would benefit, and traders would see a quick return and a level of profit that would enable them to increase their stock year on year, thus further increasing profits. Finally, cheap commodities in England would attract bullion to the country from overseas. At the foundation of the whole enterprise, ‘the Myne’, was land, with the advantage that if it were a real mine it would give rise to much more jealousy than a mine crafted through human ingenuity.¹⁵⁸

In The Key of Wealth Potter envisaged the circulation of paper money which, crucially, unlike gold coins, could not be hoarded.¹⁵⁹ He was aware of imitating the Dutch in this regard.¹⁶⁰ Furthermore, the paper money or bills would be private to those committed by a bond and this commitment would be made visible by means of flags or signs in one’s businesses, and of course, since Hartlib was somehow involved, its complex management would be done through ‘an Office’.¹⁶¹ When everyone, or many, was willing to borrow ‘gratis’ on such a firm security as ‘the Myne’ the use of the new money that the company would provide could become general, and hence function as real credit and real money.

as the case now stands with us, the only feasible means, whereby both to receive and multiply the decayed Trade of this Land, is by increasing amongst Tradesmen some firm and known Credit or Security, equal to that of the Chamber of London, Banke of Amsterdam, or any Bills of Exchange, which being given in written or printed Evidences, may be fit to transfer from hand to (hand).¹⁶²

Significantly, one of the novelties of the entire enterprise was that borrowing money would be possible ‘without paying any Interest’, which poor merchants could not afford and that would keep the price of the commodities low.¹⁶³ Instead of serving usurers’ sectorial private interest, the Company would have a communitarian aspect. The rationale behind this was to help poor merchants. In fact, one of the effects of the whole enterprise would be ‘to diminish the Interest for monies’. For who would

put in security to borrow money upon Interest, when he may upon like security, have such Bills as will passe in the place of money lent him gratis, & that in such a way, as whereby to be brought into a capacity of multiplying his trading to the utmost degree possible?¹⁶⁴

Therefore, borrowing conditions would be most favourable for the poor merchants:

the procuring of sufficient security, for the borrowing of any considerable sums of money, may be too hard a task for the poorer sort of Tradesmen to perform; yet there will be nothing required of them, in order to the putting themselves into a capacity of multiplying their trading, and that with ready pay.¹⁶⁵

Potter did not consider this Company more risky than usury itself: ‘there is (as I have already proved) greater hazard in letting out moneys to Interest, then in this undertaking,’ and yet people, ‘in hopes of a small profit of Interest, and by that small profit, do one time with another gain more then (sic) they loose by such hazard, as is evident, by mens continuing this practice’.¹⁶⁶ Moreover, he envisaged the possibility of multiplication ‘ad infinitum’ of returns.¹⁶⁷ And if business was unsuccessful for traders, all borrowers had to do was to return the bills, while the insurance system and land rents would make good their losses.

Yet considering that those who borrow of it pay no Interest, it follows, that if they cannot make it to be taken for Commodity, all they are Ingaged unto, is but to return it again at the time appointed; although indeed if it be remembred, that this money is such as will yield the Value without any considerable losse, though sold to the Gold-smith; it cannot be doubted, but that all wise Tradesmen, will take it much rather then turne away a Chapman.¹⁶⁸

In sum, despite the almost general benefit Potter prophesied, the only ones who would not benefit from ‘the Myne’ in the Commonwealth would be ‘Usurers, Brokers and Lawyers’ who would ‘lose all their customers’ and the ‘money mongers’ that ‘hoard money to raise the interest’.¹⁶⁹

This review of positions on usury concludes with Locke. His analysis followed the same path of promoting commerce. Money was put to work in the context of trade through the industry of the borrower in the same way as land that would otherwise be left fallow was put to use through the tenant’s work. The premise, however, was inequality.

For as the unequall distribution of Land, You having more then you can or will manure, and another Lesse brings you a Tenant for your Land, and the same unequall distribution of mony I having more then I can or will Imploy and another Lesse brings me a Tenant for my mony.¹⁷⁰

Locke did not deny that the ‘usurer’ and the landlord were reaping the results of other peoples’ work.

his 6 li per Cent may seeme to be the fruit of another mans Labour as he that Letts Land to a Tenant for without the Tenant Industry (supposeing as before the owner would not manage it himself) his Land would yield him Little or noe profit.¹⁷¹

But the reason for paying interest on it lay in the fact that the borrower and tenant received more from the use of money than they paid. A merchant borrowing 1000 pounds at 6 per cent, would, if he knew the business, obtain profit exceeding the 60 pounds paid in interest. Those with skills in trade and husbandry but neither money nor land were able to obtain their livelihood through the usurer and the landlord. In this way Locke explained why borrowing money was unavoidable on the grounds of ‘the necessity of affaires and the Constitution of Humane society’, and the unequal distribution of land and money; and why receiving profit from lending money was equitable and lawful as it was for the landlord to receive rent from the tenant.¹⁷² Locke’s point was that the individual was entitled to obtain a livelihood and eventually enrichment thanks to the loan. Locke’s suggestion sounded commonsensical as more money needed to be in circulation in order to resuscitate the national economy. As discussed in his economic writings of the 1690s, the funds needed to meet the costs of government as well as both the necessities required and the luxuries desired by people would certainly not come from conquest and plunder, especially in England. As he realistically put it:

In our present circumstances, no Body is vain enough to entertain a Thought of our reaping the Profits of the World with our Swords, and making the Spoil and Tribute of Vanquished Nations, the Fund for the supply of the Charges of the Government, with an overplus for the wants and equally craving Luxury, and fashionable Vanity of the People. Commerce, therefore is the only way left to us.¹⁷³

Locke was original in that he developed a scientific discussion outside the narrative of moral theology. His philosophical methodology, which treats money as a necessity, deserves closer study.