Spectacularly erudite blog post of the decade: Daniel Davies takes on The Economics of Pound’s Canto 45, “With usura hath no man a house of good stone.” Davies disposes of Pound’s famous crankery and grants his good points in just measure, starting from the observation that “In terms of the provision of houses made out of good stone, the financial industry has performed fantastically well ever since the beginnings of the Building Society movement in the middle of the nineteenth century.” Elsewhere:

The proposition that the rate of interest is too high is not intrinsically a nutty one, and taken with reasonable interpretative charity, the passage:

[…] Stone cutter is kept from his stone
weaver is kept from his loom

WITH USURA

wool comes not to market
sheep bringeth no grain with usura
Usura is a murrain, usura
blunteth the needle in the the maid’s hand
[…]

can be seen as a reasonable description of a Keynesian (even better, Kaleckian) recession; usura is too grasping for the current conditions of production and thus the rate at which savers demand to be compensated for delaying consumption is greater than the rate which current consumers and investors are prepared to pay in order to bring their purchases of goods and capital forward in time, and stagnation results.

But the problem is in believing that this is in any meaningful way the fault of the banks….The real fallacy in Pound’s economics is assuming that the horse moves because the cart keeps pushing it.

Read the whole thing, really. [02:04 PM]