Geisst R. Charles’, Beggar Thy Neighbor: A history of Usury and Debt.
Part 2: Description of Expected Plans of Revisions and Expansions.
This paper primarily focuses on examining the three themes that dominated the era of usury and debt. The segregation of Protestants from the main denomination, that is, the Roman Catholic Church, the subsequent wars and Capitalism are some of the major things witnessed during that era. This paper will explore the major themes while having a look whether there exist any form of connection between them. From the Authors point of view, there is a connection between the three themes therefore he discussed them as a single unit in Chapter three. Discussing the themes without establishing the roles these themes played in the World’s economies leads to a false and misleading conclusion. A detailed expansion of the relationships between the three themes makes the discussion more accurate and detailed. Furthermore, the kind of relationships between these three themes and their impacts to era of usury and debt will be reviewed.
Part 3: Final Draft.
Connecting the Three Themes: Protestants, War, and Capitalism.
Protestants refer to any of the varied denominations of Christianity that differed and subsequently separated from the Roman Catholic Church based. During early times, Roman Catholic was the major denomination, moreover, it was the only recognized Christian denomination Worldwide. The separation was occasioned by theological or political differences during the Reformation (Geist 138). Reformation was the religious movement of the 16th century that began as an attempt to reform the Roman Catholic Church, and it collapsed to the creation of Protestant churches.
Capitalism, on the other hand, refers to the economic system based on private ownership of capital. Capitalism is just but an ideology that was used to divide and rule the world. Capitalist believe in private ownership of property, private wealth accumulation, competitive markets and a voluntary exchange of economic goods and ideas. War refers to an active struggle between competitive entities. It was a time characterized by increasing wealth and revenue of the nation. Acts such as usury and interests were finding their way into the economy something that the faithful at the time did not find pleasing.
There is a close link between Protestants, war and capitalism. All the three themes complement each other, nonetheless, Protestants separated from the main denomination, a separation that involved war. Although the separation came as a result of difference in ideologies, it involved both active and cold war. The Roman Catholic was opposed to the idea of some section of the congregation separating from the mainstream congregation, it led to war. War is a physical confrontation that leads to injury or even loss of lives (Geist 135). Through this, a close link between the theme of war and Protestants is clearly revealed. War played a critical role when the Protestants proposed a separation from the main congregation, perhaps, it was due to war that the Roman Catholic Church let the Protestants form their own domination; a denomination that was formed according to the ideologies that led to their segregation.
Just the same way the issue of segregation from the main denomination involved war, capitalism is an ideology that is greatly associated with war. During world war, there were the communists and the capitalists. Communism was led by the Union of Soviet Socialists Republics (USSR) while the Capitalists were led by the United States of America (USA). Basically, Capitalism and Communism were economic ideas used to own the World’s properties. These ideologies elucidated feelings that led to the World War. World war was fought as two major blocks, the Communist and the Capitalists. There is a close link between Capitalism and war, therefore, war becomes a vocal theme between the three themes.
Factors that Led to the Formation of Banking and Lending Institutions.
Lending money is a traditional practice that began a long time ago, but Charles Dickens made the practice common or popular in the 19th century. Initially, people lent out money but lacked proper channels to reclaim their money. Creditors could make the local arrangement with the borrowers and could agree on the terms of payment. As money appreciated in value and the economy started growing, the need for money became inevitable. People engaged in money borrowing to get capital for setting up businesses while others sought money for survival (Geist 126). There were no other creditors apart from those who owned huge assets. These were the creditors who lent out money to debtors who were in need of money. In some instances, the debtors would surrender various valuables or property as a surety of settling the debt at a later date. Therefore, when the number of defaulters grew creditors resorted to other means that could help them recover their money. Creditors began to confine debtors who defaulted payment regardless of the amount owed. The practice attracted both supporters and critics in equal measure.
Critics did not welcome the treatment the debtors were undergoing in the prison cells. The conditions were dehumanizing because some were raped and even experienced the highest level of brutality. Some fed on rats and experienced equal penalty with those who had committed other serious crimes. Therefore, this form of treatment was unfair to debtors because the treatment did not consider the amount owed.
Mistreatment of debtors was a blessing in disguise because it led to the inception of banks that treated their customers with respect. Banks introduced interests that could accrue to the original amount, and people could be given time to settle their debts without pressure being exerted on them. Most debtors enjoyed the treatment in the banks, and they opted for their services. Most people avoided loans from the creditors because of their inhumane penalty that was entirely different to that of the banks (Geist 150). The inception of banks also led to the emergence of activities such as stock trading that attracted investors and more people to embrace banking. It is through mistreatment of debtors that the Bank of England was procured. Even though huge borrowings to finance military activities threatened to bank, its supporters continued growing, and it saved the necks of debtors from creditors.
Factors that Led to the Development of International Banking.
Exploration and colonization played a key role in promoting the emergence of international banking. England and Europe wanted to be associated with financial institutions that would facilitate their interests abroad. Now that many nations in Europe were colonizing the rest of the world with England focusing on America, the newfound land. It saw the rise of financial institutions that began from humble beginnings rising to the post of international banks. Some began as merchants while others began as gold and coin shops where the locals exchanged their currency. The need for investing abroad was the motivating factor that led to the emergence of international banking. The system of capitalism, which advocated for private ownership of capital, also facilitated the emergence of private financial institutions that encouraged banking (Geist 140).
Another reason that facilitated international banking was the presence of large institutions, which required money for investments. The banks at the time lent out loans at interest while the clients borrowed huge amounts of money that earned a lot of interests to the banks. The business turned out lucrative because they dealt with institutions, which honored payments, unlike individuals who defaulted payments. Lending money to governments and other large institutions proved profitable because they used the money that was lent out to them to venture into the business that generated income or returns and thus they did not experience challenges in paying back the money. However, to the small clients, it was risky lending them money because most of them took loans for survival, therefore, experienced challenges in paying back the money.
The leading international financial institutions at the time were the likes of Baring and Rothschild, which had humble beginnings like family enterprise. Compared to the previous creditors who existed before banks, these financial institutions lent money to governments and large investing institutions, which had no bad debts like debtors who dealt with earlier creditors. Therefore, it is through investments abroad and international borrowing that led to the concept of international banking.
Reasons behind the Panic and Inflation in the 18th Century England.
Usury laws prevailed until this era of exorbitant interests, which saw inflation sets in the economy. Another common aspect that featured in this era was the numerous unrests of people condemning the prevailing economic conditions. There were instances when the Bank of England had to obtain a loan from the UK government. There were also cases of price gauging, which saw the prices of domestic prices shoot. The increasing rates of inflation fuelled more unrest as the economy got worse. Consequently, this instilled fear and anxiety in the economy fuelling the existing panic even further.
The cost of living rose coupled with a shortage in the supply of gold. Those who bore the blame of these uncertainties’ were the traders and middlemen. In a bid to rescue the situation the government tried to apply the system of mercantilism. It was a form of economic system, which sought to increase the wealth of a nation by regulating all the commercial interests. Also, the system assumed capitalism, especially during the Industrial Revolution. Politicians also worked tirelessly to abolish the usury laws that were felt to be exploitative (Geist 146). The effect was felt especially during the inflation period where civilians believed that the traders were exploiting them. They failed to recognize that they were victims of their laws. Consequently, pressure was also coming from the religious front, which advocated for the abolition of usury, which they felt, was taking part in exploiting the citizens.
Conclusion.
It is evident from the text that Protestantism, capitalism, and war characterized this era. The Protestants were objecting the Roman Catholic while adopting new economic policies that the Catholics did not find appealing. After adoption of the new economic policies, what followed were a series of unrests over the consequences of the policies they had adopted. Therefore, it is evident that the revolution was coupled with numerous changes that influenced polices adopted in that era (Geist 147).
Work cited
Geisst, Charles R. Beggar Thy Neighbor: A history of Usury and Debt. Philadelphia: University of Pennsylvania Press, 2013.
