Usurer's Capital

Usurer’s Capital


a form of interest-bearing capital characteristic of precapitalist formations and originating during the period of the breakdown of the primitive communal system. According to K. Marx, usurer’s capital, along with merchant’s capital, belongs to the “antiquated, … antediluvian forms of capital, which long precede the capitalist mode of production and are to be found in the most diverse economic formations of society” (in K. Marx and F. Engels, Sock, 2nd ed., vol. 25, part 2, p. 142).

Typical of usurer’s capital is the use of the loaned money not as capital but as a means of payment or purchase. “What is sought from the owner of a hoard is not capital, but money as such.… The really important and characteristic domain of the usurer, however, is the function of money as a means of payment” (ibid., pp. 147, 149). In ancient Rome, usury developed along with tax farming—that is, the collection of rents, taxes, and fees. Another typical feature of usurer’s capital is exceptionally high interest on loans. The interest level fluctuated very sharply between different countries and even between the cities and regions within a country, ranging from several score to hundreds of percent a year. For example, in ancient Greece, some usurious loans are known to have cost 48 percent a month, or more than 570 percent a year. During the Middle Ages the feudal aristocracy paid from 30 to 100 percent annual interest for loans.

In the precapitalist formations usurer’s capital was provided chiefly in the form of loans to large landowners (slaveholders and feudal lords) and small-scale producers, including artisans and peasants. In the case of the small-scale producers, the loan absorbed not only the entire surplus product but also a portion of the necessary product produced by the borrower.

Usurer’s capital does not create a mode of production. Marx observed that usury, like commerce, “exploits a given mode of production… and is related to it outwardly” (ibid., p. 159). This explains the conservative character of usurer’s capital and its striving to preserve the existing economic and political relations and to act as a parasite within the existing framework. At the same time, usurer’s capital undermines and destroys the economic structure characteristic of precapitalist formations. During the epoch of the genesis of capitalism, usury “is a powerful lever in developing the preconditions for industrial capital” (ibid., p. 160). Usurer’s capital leads to the ruin of small-scale producers and the formation of the large fortunes necessary for the primitive accumulation of capital.

Usurer’s capital is a precursor of loan capital, which serves as the basis for capitalist credit and as the main form of interest-bearing capital. The credit system and capitalist banks developed as a reaction against usury, because usurer’s capital confiscated from the borrower all of the surplus product, which, therefore, could not be systematically used for capitalist reproduction. Marx described the creation of the credit system as “the subordination of interest-bearing capital to the conditions and requirements of the capitalist mode of production” (ibid., p. 149).

Usurer’s capital survived under the conditions of capitalist production, particularly in countries and economic sectors where capitalist commodity relations were relatively weakly developed. “The more insignificant the role played by circulation in social reproduction, the more usury flourishes” (ibid., p. 160).

In the developing states of Asia, Africa, and Latin America, usurer’s capital is the basis for the financial enslavement and exploitation of the peasants, small-scale artisans and craftsmen, and poorest strata of the population by local merchants and by the wealthy. Usurer’s capital is particularly strong in India, Pakistan, and Indonesia. The conditions for the preservation of usurer’s capital are fostered by insufficient development of the domestic market and commodity-money relations, the weakness of the credit system, and the predominance of small-scale commodity producers in the economy.

Usury, or the granting of small loans at very high interest, also exists in the industrially developed countries, but it is prohibited by law and is usually practiced illegally.


Marx, K. Kapital, vol. 3, ch. 31. In K. Marx and F. Engels, Soch., 2nd ed., vol. 25, part 2.
Marx, K. “Teorii pribavochnoi stoimosti” (vol. 4 of Kapital), part 3, [section] 7 and appendix. Ibid., vol. 26, part 3.
Lenin, V. I. Razvitie kapitalizma ν Rossii. Poln. sobr. soch., 5th ed., vol. 3, chs. 2, 5.
Lenin, V. I. Ekonomicheskoe soderzhanie narodnichestva i kritika ego ν knige g. Struve. Ibid., vol. 1, chs. 3, 4.
Medovoi, A. Rostovshchicheskii kapital ν sel’skom khoziaistve Indii. Moscow, 1961.
Medovoi, A. Kredit i kreditnye sistemy stran Azii. Moscow, 1968.
Medovoi, A. Banki i kredit razvivaiushchikhsia stran. Moscow, 1974.


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Marx at one stage, in discussing pre-capitalist relationships in Volume III of Capital, calls usurer's capital, which he describes as the antiquated form of interest-bearing capital, as a parasite on the capitalist mode of production.
It was also seen as an autonomous and independent form of capital: "Interest-bearing capital, or, as we may call it in its antiquated form, usurer's capital, belongs together with its twin brother, merchant's capital, to the antediluvian forms of capital, which long precede the capitalist mode of production and are to be found in the most diverse economic formations of society" (1991, 924).