The invalid vilification of Shylock
Misrepresentation and misunderstanding in and about The Merchant of Venice
Completely unrelated to the ill-educated current president of the United States I had occasion to think about Shylock and antisemitism. Soon afterwards the ill-informed president gave a speech in Iowa, a state dominated by agriculture, in which he claimed that his signature legislation would free farmers from estate duty. A nonsensical claim given that the estate duty thresholds are enormously high. As a result, he claimed:
No going to the banks and borrowing from, in some cases, a fine banker - and in some cases, Shylocks and bad people.
When outrage ensued the president claimed he was unaware that the term Shylock carried with it the taint of antisemitism on the basis that the original character was a ruthless usurer. Two questions arise. Are Trump’s protestations of ignorance about the racial nature of the pejorative true? The more interesting question is why the name Shylock has the association it does as an especially egregious insult relating to the greed of Jewry.
Given Trump’s malign character the choice between his profession of ignorance or his duplicity is difficult to make. He is an inveterate teller of untruths. I don’t say he is invariably a liar as I think a significant proportion of the time he does not realise what he says is false. His ignorance of Shakespeare or of the meanings of words is credible. He would no more have opened a dictionary or the works of Shakespeare than he would have opened the Bible. That is, not at all. I am convinced he is not only dull of wits, he is functionally illiterate. Dictionaries are not uniform is ascribing a definition to the word usurer. Sometimes it is intended to describe a person who is ruthless in the conduct of business. Many may see such a trait as a compliment, particularly in American commerce. At other times the word used offensively means, in the vernacular, a loan shark.
Because he keeps popping into my consciousness I began to wonder if the characterisation of Shylock as usurer has any validity. Looked at dispassionately, the plot of The Merchant of Venice is utterly preposterous. I will briefly recap the story to illustrate how ludicrous it is.
The merchant of the title, Antonio, has interests in voyages all over the Mediterranean and elsewhere. In consequence he is, though wealthy, cash strapped. His friend needs to borrow money to enable the friend to visit the women, Portia, he wants to marry. Antonio asks Shylock to lend him the money. Antonio hates Shylock because he is a Jew and he lends money at interest. His conduct towards Shylock is abysmal. It includes spitting on his gaberdine which, I discovered recently, is a garment and not merely cloth. Shylock doesn’t like Antonio because of his displays of contempt and, supposedly, because Antonio provides finance but does not charge interest. I suspect Shakespeare had a limited idea how Venetian commerce worked and I will return to that matter.
For the purpose of travel Shylock agrees to lend 3,000 ducats for three months. He does not want to charge interest but, rather, secures the principal on a pound of Antonio’s flesh. Shylock is not much of a loan shark given that he lends money at no interest. To risk death Antonio must have been supremely confident that his voyages to the four corners would be successful. Another absurdity relates to the sum borrowed. A ducat comprised 3.56 grams of gold. The current price of gold is about $US100 per gram and therefore each ducat would now be worth about $US350. In other words, in today’s money, Antonio borrowed $1 million.
The audience is expected to believe that Shylock’s animosity towards Antonio is so severe he will forsake monetary return for the remote chance he can exact revenge. Even if Shylock is vindictive it is justified by the way he is repeatedly scorned. He says as much in his famous speech – if you prick us, do we not bleed – in which he points out Christians do not have a monopoly on revenge But, even if not, it is unclear if the malice comes about because he is a Jew or he is just choleric by nature. Elsewhere the play suggests that Shylock is simply disagreeable. His daughter, Jessica, a nascent miscreant on her way to becoming a Christian, confides to the audience that she hates her father but doesn’t know why.
As luck would have it, Antonio defaults. Shylock attends a judicial hearing to enforce his security. He declines 6,000 ducats and insists on the security. While Shylock is sharpening his knife, Portia arrives masquerading not only as a man but as that damnable creature a lawyer as well. She then engages sophistry to allow Shylock his pound of flesh but only if he doesn’t draw blood. She then has Shylock convicted, as a foreigner, for planning to murder a Venetian. Amongst a range of absurdities there is no explanation for why Shylock doesn’t insist that Antonio deliver the flesh himself rather than Shylock take it. Shylock can be released from the ensuing punishment if he abandons Judaism and adopts Christianity.
It has long been a debate amongst the literary cognoscenti as to whether Shakespeare intended Shylock to be villain or victim or both. It is emphatically the case that Shylock is embittered as well he might be. Though his name is tainted as the arch-usurer the play offers no evidence of such usury in his conduct where usury is applied in its modern sense as entailing exploitative interest. At every point in the play the scoundrels are Christians. They are given to gratuitously offensive behaviour, unscrupulous conduct such as theft, but most of all they engage in artifice and casuistry to treacherously thwart legitimate bargains freely entered into.
What I have doubts about is Shakespeare’s understanding of late Medieval or early modern commerce. The origin of Shylock’s dubious reputation is the contrast of his method of investing with those of Antonio. The implication is that Antonio undercut Shylock’s business by providing merchant finance without charge. If that is the impression Shakespeare wished to convey then it is false. It is not clear exactly when the play is set. It is set sometime during the 16th century and is, therefore, near or actually coterminous with Shakespeare’s life. During the course of the 16th century there was a sea change in the mode of business operation.
At the end of the 15th century the doctrine of the Catholic Church forbade its adherents from engaging in lending money at interest or usury in its earlier meaning. In the interest of clarity, I will refer to usury only when the lending arrangement is extortionate. Disquiet with the notion of interest on money was not new. It dated from ancient times including Classical Greece but also before then. Money was regarded as sterile and it should only be employed as the lubricant to the wheels of exchange. I like to think that the unease was a problem of the infinite or the tendency to the near infinite. For instance, to compound $1 at 10% results in a sum of nearly $14,000 after a century but $190 million after two centuries and some number with scores of places after the decimal at the end of a millennium. In monetary terms the infinite is meaningless. If so, my fond thought goes, the deity without end is devoid of meaning as well. But the real objection may be more mundane. Money begetting money may detract from productive activities like agriculture.
In late Medieval Italy a merchant wishing to obtain funds from an outside investor to embark on a voyage would enter into a bargain known as a commenda. There is more than one version of the contract which may have been based on the Islamic qirad. Essentially, the commenda is a profit (and loss) sharing arrangement between a seafaring merchant and an investor. In its plain vanilla form the commenda entailed the investor providing the capital and the merchant his labour and a vessel. Profits, if any, would be shared half each. The commenda does have a resemblance to the modern limited partnership but that is only because any other person trading with the merchant is oblivious to the existence of the silent partner. The commenda, on occasion, has an insurance character ascribed to it. Such a contention stretches a point as any profit or loss sharing arrangement means that an investor takes the same risk as the merchant.
Presumably, Antonio is the investor in the various voyages referred to in the play. As he evidently was not a seafarer it would not then be accurate to call him a merchant. His capital was at risk but not his life or at least not from storm or piracy. Shylock’s irritation at Antonio’s preferred method of financing trade is inauthentic. He ought to have known that Antonio, due to the greater risk, may well be better rewarded with a profit share than with a fixed return. I am not persuaded that Shylock, when motivated to invest without rancour, was a usurer in the modern sense. He refers to interest as usance. Self-evidently, he operated in a market with more than one participant. His ability to charge exorbitant usance is constrained accordingly. If the interest rate demanded is high it is because of added risk of default for whatever reason.
The truth is that by the time Shakespeare wrote The Merchant of Venice the commenda was a dying institution. The Catholic Church came under pressure from the rich and powerful in the late 15th century and early 16th century to abandon its prohibition on lending at interest. Leading the charge was the extraordinarily wealthy Fugger family from Germany. The coup de grace was arguably delivered by Calvin who, not coincidentally, lived in Geneva amongst businessmen.
Why were those businessmen so keen to rid themselves of the fetters imposed by the Church? There may be two primary reasons. The problem for any equity investor is to know the sum they are entitled to. They can never be certain that the active partner, the seafaring merchant, has not concealed profits from them in some way. It was close to impossible to audit. As the commitment to a deity weakened the investor could no longer rely upon the fear of god as, for example, could an investor in a qirad in the heyday of Islamic commerce. Another reason pertains to risk. As is evident from Antonio’s plight the investment is not only at the mercy of the honour of the seafarer but also the many and varied dangers posed by the seas.
I don’t believe The Merchant of Venice has anything to do with usury in the modern sense. If Shylock was intended to be a villain it is solely attributable to his distemper. The word usury underwent an abrupt semantic shift hundreds of years after Shakespeare’s death. Jeremy Bentham seems to be responsible for the dramatic narrowing of the word. In his essay In Defence of Usury he wrote:
I know of but two definitions that can possibly be given of usury: one is, the taking of a greater interest than the law allows of: this may be stiled the political or legal definition. The other is the taking of a greater interest than it is usual for men to give and take: this may be stiled the moral one …