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The Economy of the Dark Ages

January 22, 2015 by · Leave a Comment 

By Phin Upham

The Dark Ages are not just a name. Civilization reverted to something akin to what the world was like before the written word. Society was only barely civilized, with the primary means of trade consisting of bartering and little else. Money existed, but most people didn’t have it.

During this time of stagnant earnings, people bartered just to live. Interest, if there was any to be charged, was accrued in the accumulation of more goods.

Although this type of trade was out of subsistence, the Church was vocal against bartering even amongst friends. The Old Testament contained several verses where God spoke to the Jews, instructing them of the evils that came with money lending.

Although the Bible did seem to make exceptions for lending among friends, the Church fell back on the moral guidelines of the New Testament. Jesus drove the money changers out of temple and the New Testament makes it clear that money lending is not a moral practice. The Church was exalting those whose acts were outwardly selfless, and shaming those who collected interest. At one point, the Church even went so far as to condemn anyone who did not see usury as a sin to heresy.

Royalty got around this, and remained within the Church’s favor, by allowing Jewish usurers into their kingdom. The Bible permits Jews to lend to non-Jews, if they collect interest. This caused some friction between Jews and Catholics, who felt that usurers were profiting off of their hard work.

About the Author: Phin Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media & Technology group. You may contact Phin on his Phin Upham website or LinkedIn page.