In praise of high interest

Once upon a time, I had an amateur interest in economics, particularly development economics. Luck, or its absence, had landed me in a series of vaguely journalistic jobs with partially reputable commercial institutions in Asia. We, who worked there, used such terms as “monetary,” and “Euromoney,” and “investment,” to affirm our respectability.

We were advocates of wealth. If the “third world” nations on which we were reporting were to become good and modern, they would cultivate wealth in preference to all other intentions. Technology and speed were among the means.

My father, also — an “industrial designer” with an appreciation for craft — got caught up in this. In the generation before mine, he, too, sometimes worked in Asia. A more honest character than I, he discerned in less time that the well-intended tasks he had taken up were essentially destructive. He was paid, for instance, to analyze domestic handicraft industries, and suggest ways in which the craft skills they had refined could be transferred to modern industry. Success meant native and foreign investors would become rich, wage labour be increased immensely, and the cash economy expanded into places which it had never previously violated. Countless formerly free people, who had been living happy, honourable, lives, would now be placed under various kinds of mortgage.┬áNote, it was not financial, but cultural impoverishment that made them ciphers in an immense, metastasizing, inhuman machine. It gave them the chance to die without love.

It took me, scandalously, many more wasted years to reach exactly the same conclusion as my father about what I was doing there.

The inhuman machine in which we are “taken care of,” back here in the West, malfunctions, usually from politically-programmed failures and disorders. “Inflation” is one example of the sort of thing I mean. To a modern, Keynesian economist, the oil in the machine lubricates the works, and the only question is whether it has been applied too excessively. But if it is too little, they recommend “quantitive easing,” in which we squirt more oil in. The economists have settled on 2 percent as adequate to their purposes. Just now it is riding high, to a level much above adequate. Interest rates rise to “flatten the curve” as we did for two weeks with the Batflu. This doesn’t, and has never, worked, of course, and the pain continues for months or years, as economic activity progressively ceases.

High interest rates are only a problem for people who borrow money. It is, for them, what usury has always been. Yet, those trying to save some fraction of what they may have earned, don’t mind it at all. I, for instance, adore high interest rates. For I like to give valuable things away; or to take other measures to prevent my wealth from falling into the hands of thieves and governments.

Inflation is incidentally one of the chief, though fairly subtle, methods of taxation. But one would have to be tedious to explain this obvious fact.