Michael Hudson: Why Banking Isn’t What You Think It Is
I’m still working on my book on the history of debt from the crusades until World War I, and how it was actually the Catholic Church that brought banking into being in order to finance the wars that it was fighting against other Christians.
The crusades were mainly against other Christians, mainly Constantinople which Rome wanted to absorb, but also against Germany, against France (the Cathars in France) and against anyone who didn’t pledge fealty and pay tribute to Rome.
The problem was, once they could recruit warlords and say, I’ll make you king of England if you pledge fealty to me and agree to pay Peter’s pence and other income, so they had the Norman conquerors, and the same thing happened in southern Italy and Sicily, they made a warlord king.
But then they found they have all these warlords willing to fight for them to kill the orthodox Christians in the east and to kill the German Christians that wanted to be independent, and any Christian that wanted to preserve the original Christianity, including sanctions against interest, well they set the inquisition on them.
So the question is, how do you arrange financing to pay for these warlords to wage armies and so they created the 13th century Schoolmen to invent a new word.
Instead of usury, they called it interest.