Development and Underdevelopment in the History of Economic Thought

From usury to credit system: Marx and the analysis of the historical forms of interest-bearing capital

Pierre Matari, UNAM

In this paper, we analyze the transformation of usury into a credit system. This process as well as the controversies it raises appears in the history of economic thought in a series of authors of the sixteenth and seventeenth centuries, that is between the Protestant Reformation and the Glorious Revolution. His critique by Marx in the Book IV of Capital, especially the works of Martin Luther (1525), John Locke (1691), Joseph Massie (1750) and David Hume (1752) highlights two key aspects of the historical making of finance capital: the difference between usury and credit and the nature and determinants of the interest rate. According to Marx "interest-bearing capital" is and economic form that exist in any society based on merchant relations. Thus, the challenge consists in determining the concrete forms of “interest-bearing capital” in each mode of production, insofar as it records merchant relations. Usury corresponds to interest-bearing-capital in pre-capitalist modes of production. In contrast, finance capital corresponds to interest-bearing capital in capitalist conditions of production. Finance capital is born with the transformation of usury into a credit system structured in two levels (the banking system and the Stock Exchange). In addition to the purpose of clarifying the nature and origin of some notions of Marx's theory, this paper contributes, more broadly, to the study of the place of economic thought prior to Adam Smith (Hutchison, 1988) in Marx’s formation of monetary and financial thought.


Keywords: Interest-bearing capital, Credit System, Marx, Luther, Locke

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