Exhortation to the Clergy to Preach Against Exploitive Interest (Usury)

By Martin Luther and Michael Grzonka

Martin Luther is known for inspiring the German Protestant Reformation in 1517 and giving birth to Protestantism. Beyond mere theology, Luther also frequently wrote about the economic conditions in which he lived, often criticizing the conditions the budding medieval money economy created for his less-fortunate contemporaries. This Exhortation of 1540 confirms Luther's keen understanding of the interplay between economic choice and its necessities far exceeding the limited grasp of the economy many will admit for a "mere monk".
In reaction to an inactive government, Luther urges clergy to confront lenders taking exploitive interest rates on loans (the usurers). Should these "devils in human shape" refuse to repent, Luther urges pastors to practically excommunicate unrepentant usurers.
Luther's pastoral view on economy strikes us moderns as utterly naïve and out of touch with experience and present reality. But arguably this is precisely what's missing from our contemporary discourse of a more just economy.

• Language: English
• Publisher: Lulu.com
• Release date: Jan 24, 2020
• ISBN: 9781794792425

Martin Luther

Martin Luther (1483–1546) was a German theologian and one of the most influential figures in the Protestant Reformation. Some of Luther’s best-known works are the Ninety-Five Theses, “A Mighty Fortress Is Our God,” and his translation of the Bible into German. 

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Exhortation to the Clergy to Preach Against Exploitive Interest (Usury)

Exhortation to the Clergy to Preach against Exploitive Interest (Usury)

Exhortation to the Clergy

to Preach against

Exploitive Interest (Usury)

by

Doctor Martin Luther

Written A.D. 1540 in Wittenberg

Prepared and translated by Michael T Grzonka, Ph.D.

Copyright © 2020 for the eBook edition and © 2019 for the print edition by Clocktower Consulting LLC

All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher, except for the use of brief quotations in a book review or scholarly journal.

Cover Image: This is a segment of the title page of the first printed edition in German, printed by Josef Klug in Wittenberg, 1540 (Source: Staatsbibliothek zu Berlin - Preußischer Kulturbesitz, used here under exemption for academic license)

The facsimile pages of the Weimar Edition of Luther's works reproduced here are in the public domain. They were sourced from D. Martin Luthers Werke. Kritische Gesamtausgabe. Edited by Joachim Karl Friedrich Knaake. Weimar H. Böhlaus, 1883-1929. Vol 51 as available at http://archive.org/details/werkekritischege01luthuoft.

First eBook Edition: 2020

To learn more about Martin Luther, the Protestant Reformation, and group and Bible studies featuring his sermons and tracts, visit us today at

https://www.LutherBibleStudies.com

ISBN 978-1-79476-898-7 (print)

ISBN 978-1-79479-242-5 (eBook)

Contents

Introduction

Luther Wrote Frequently on Economic Topics

Luther's Exhortation of 1540

A few Words on Formatting and Translation

Exhortation to the Clergy to Preach Against Usury

Difference between Lending and Usury

Dealing with objections

Make Use of the Lawyers

A Real-life Example

The Case for Schadewacht

Damage through Missed Business Opportunity

Payments for Hypothetical Damage

Summary

Laws Alone are insufficient: They must be Taught

The World cannot be without Usury

We must Actively Fight Usury

Usury Not a New Problem

How Christians should give

Being Another's God

Where, then, is our suffering?

Can Usurers hope reaching salvation?

Conclusion

Introduction

Compared with the abundance of publications on Martin Luther and the German Reformation he spawned, it is evident that contributions on the question of professional and economic ethics remain a sideshow. Articles that take on this subject from a Lutheran perspective are even fewer, especially when published in the English language.

Martin Luther was no stranger to the influences moneyed interests regularly apply to society. Often coercive in nature and purpose, medieval private wealth continually influenced the budding Reformation – from the Roman Catholic Church (arguably the largest corporation in Luther's Europe and its agricultural economy) to the big transnational trading houses and banks of the Fugger, the Welser, the Imhof and the Hochstätter families.

The modus operandi of the emerging money economy in Luther's time was essentially laissez faire – the market actors were free to do as they pleased with precious little oversight or regulation affecting their dealings. Such willful disinterest from the authorities is known to favor the dominant players: Unsurprisingly, the medieval aristocracy, the Catholic Church, and the big trading houses frequently enjoyed the privilege of monopoly and cartel.

Luther's time therefore experienced an increase in monopolist trading. Large port cities like Antwerp, at the mouth of the river Rhine in present-day Belgium, provided natural places to form rings of merchants – that is, cartels; Luther calls them "Gesellschaften"[1] – to fix price and availability of goods thereby anesthetizing or abolishing price formation under conditions of truly free markets[2]. Active enforcement of competition by the authorities was a necessity yet to be recognized. Far from it, Luther frequently saw crown and commerce colluding in jointly establishing monopolies to maximize the profit of specific trading houses in return for other favors[3].

Of the rulers Luther knew, Holy Roman Emperor Charles V was especially vulnerable to blackmail by the Fugger banking house: A consortium of the leading German banks directed by Jakob Fugger himself had bought Charles' election in 1521. The group paid bribes of more than 113 million US Dollars in today's money to secure Charles' emperorship over his rivals. A few years later, anti-monopoly legislation was proposed at the Imperial Diet of 1523. Mr. Fugger only needed to remind Charles of this favor to derail and bury the proposed legislation – it never came up again.

'

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[1] See below on page 75.

[2] Pascal, Roy. Social Basis of the German Reformation: Martin Luther and His Times, 1971. 181f.

[3] For example, early in their history the Fugger firm held a near monopoly on the copper trade in Europe, courtesy of favorable arrangements with the Habsburg rulers in the late 1400s. Later, Charles V granted the Fugger firm exclusive rights to the mercury mines in Spanish Almaden, as a security for credits extended to the crown by the Fugger bank.

Luther Wrote Frequently on Economic Topics

Thus, it is not surprising that Luther wrote frequently on the temptations from and the love of money. Although he went to great length explaining the considerable inventiveness in methods for dishonestly separating people from their money, Luther was most concerned about the adverse consequences he keenly observed first hand.

For example, in late 1519 and early 1520, he preached a short and a long sermon on the topic of usury, and common but unfair commercial practices at the time. In 1524 he again visits the topic in his book "On Trade and Usury[4]". 1529 in both, his Small and his Large Catechism, Luther elaborates specifically on the understanding of unfair business transactions as a form of stealing when explaining the Seventh Commandment.

We often fail to view Luther's writings against the backdrop of an increasingly monetized economy, whose description readily captures contemporary characteristics:

"Formerly the nobles, if they had ready money, were wont to invest it in real estate, which gave employment to many persons and provided the country with necessities. The merchant employed capital of this kind in their regular trade, whereby they adjusted want and superfluity between the various countries, gave employment to many, and increased revenue of princes and states. Nowadays, on the other hand, a part of the nobles and merchants … employ all their available capital in dealing in money. Hence the soil remains untilled, trade in commodities is neglected, there is often increase of prices, the poor are fleeced by the rich, and finally even the rich go bankrupt.[5]"

Late in 2019, Luther's views have lost nothing of their sting and little of their relevance to the circumstances we live in today. Since the Great Recession of 2007 to 2009 interest rates fell to, and ten years later remain, as close to zero as makes no difference. At the same time it became customary to routinely charge interest rates in excess of twenty percent per year on credit card debt, and commercially provide student loans at rates close to and often in excess of ten present per year. Today we are in a position to easier grasp Luther's arguments than we have been in two generations. Interested readers may find recent publications on Luther's perspective on a market economy[6], and the social dimension of the Reformation[7] of particular interest.

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[4] "Von Kaufhandlung und Wucher"; WA 15, 293-313; 321-322

[5] Lodovico Guicciardini (1521 – 1589), nephew of medieval historian and statesman Francesco Guicciardini (1483 – 1540), as quoted in Ehrenberg, Richard. Capital and Finance in the Age of the Renaissance. Translated by H.M. Lucas. Harcourt Brace And Company, 1928. 243. Available for free download at https://archive.org/details/capitalandfinanc037633mbp/page/n1

[6] Lindberg, Carter. Luther on a Market Economy. Lutheran Quarterly 30 (2016): 373–92. Available for free download at http://www.lutheranquarterly.com/uploads/7/4/0/1/7401289/30.4_lindberg.pdf. Beyond the references on Capitalism as Religion (cit. 38) see also The Religion of the Market Economy in Rüstow, Alexander. Die Religion der Marktwirtschaft. Edited by Sibylle Tönnies. 3rd. Münster, Berlin: LIT Verlag, 2009.

[7] Lindberg, Carter, ed. The Forgotten Luther: Reclaiming the Social-Economic Dimension of the Reformation, 2016. and Cumming, Ryan P. The Forgotten Luther II: Reclaiming the Church’s Public Witness, 2019.

Luther's Exhortation of 1540

The Occasion of the Tract: A local famine

Despite all his earlier writing and preaching, the practice of taking excessively high interests on monies loaned only grew during Luther's lifetime. In 1539, at the height of the price inflation for food, Luther returns to the subject of exploitive interest in his "Exhortation to the clergy to preach against usury"[8] – presented here in an English translation for the very first time.

Aggravated by a drought and by a mouse infestation, prices for basic food staples were driven up further by speculative buying and hording of grain through aristocratic circles and by outsiders not living in the region. By 1539, bread was scarce and hunger had spread in Wittenberg. Many required consumer credits to get by, only to be forced taking loans under exploitive conditions in their desperate need to secure their daily bread and keeping their farms operational. In short order, the excessive interest payments and other chicanery with their debt very predictably deprived many of their land, house and the very economic foundation of their livelihood.

In