Debt: The First 5000 Years - autonomous learning

AGE OF THE GREAT CAPITALIST EMPIRES 321
of government as a profit-making enterprise; but money always remained
a political instrument. This is why when the empires collapsed
and armies were demobilized, the whole apparatus could simply melt
away. Under the newly emerging capitalist order, the logic of money
was granted autonomy; political and military power were then gradually
reorganized around it. True, this was a financial logic that could
never have existed without states and armies behind it in the first
place. As we have seen in the case of Medieval Islam, under genuine
free-market conditions-in which the state is not involved in regulating
the market in any significant way, even in enforcing commercial
contracts-purely competitive markets will not develop, and loans at
interest will become effectively impossible to collect. It was only the
Islamic prohibition against usury, really, that made it possible for them
to create an economic system that stood so far apart from the state.
Martin Luther was making this very point in 1524, right around the
time that Cortes was first beginning to have trouble with his creditors.
It is all very well, Luther said, for us to imagine that all might live as
true Christians, in accordance with the dictates of the Gospel. But in
fact there are few who are really capable of acting this way:
Christians are rare in this world; therefore the world needs a
strict, hard, temporal government that will compel and constrain
the wicked not to rob and to return what they borrow,
even though a Christian ought not to demand it, or even hope
to get it back. This is necessary in order that the world not
become a desert, peace may not perish, and trade and society
not be utterly destroyed; all of which would happen if we were
to rule the world according to the Gospel and not drive and
compel the wicked, by laws and the use of force, to do what is
right . .. Let no one think that the world can be ruled without
blood; the sword of the ruler must be red and bloody; for the
world will and must be evil, and the sword is God's rod and
vengeance upon it.ZS
"Not to rob and to return what they borrow"-a telling juxtaposition,
considering that in Scholastic theory, lending money at interest
had itself been considered theft.
And Luther was referring to interest-bearing loans here. The story
of how he got to this point is telling. Luther began his career as a reformer
in 1520 with fiery campaigns against usury; in fact, one of his
objections to the sale of Church indulgences was that it was itself a
form of spiritual usury. These positions won him enormous popular