“A shilling put out at 6% compound interest at our Saviour’s birth would . . . have increased to a greater sum than the whole solar system could hold, supposing it a sphere equal in diameter to the diameter of Saturn’s orbit.” He concluded that “A state need never, therefore, be under any difficulties, for, with the smallest savings, it may, in as little time as its interest can require, pay off the largest debts.”
What Price had discovered was the exponential growth of money invested at interest, multiplying the original principal by plowing back the dividends into new saving. What he failed to appreciate was that never in history has any economy been able to turn a penny or any other sum into a surplus large enough to pay creditors a solid sphere of gold reaching out to Saturn’s orbit. Marx accordingly poked fun at Price’s calculations in his Grundrisse notebooks (1973:842f.) on the ground that no society’s productive powers are able to support such compound rates of growth in interest claims. “The good Price was simply dazzled by the enormous quantities resulting from geometrical progression of numbers. . . . he regards capital as a self‑acting thing, without any regard to the conditions of reproduction of labour, as a mere self‑increasing number,”Whereas Babylonian kings already had enough sense to realize that debts had to be cancelled periodically (barley growers got a debt jubilee approximately every 30 years, says Hudson), it looks like we may have gotten to a situation where the entire western world is ruled by people with brains like Richard Price, with debtors lending to more debtors lending to more debtors in a never ending shell game of mirrors. The density at the top is now suchy that money instantly disappears upward through the system and can only be replaced by creating more money through more debt that again disappears upward through the system. The accumulation of wealth is acquiring the density of a black hole, and yet the notion persists among most of us that there is something completely natural in money producing wealth all by itself, and that our investments should continue to produce at rates even higher than the modest ones that can supposedly turn a penny into gigantic spheres of gold. Kings in the very old days had to put strict caps on interest rates to prevent rampant usury and its devastating effects, and violating these usury laws was punishable by death. An often quoted dictum of the doctors of the Church in those days was: pecunia pecuniam parere non potest (money cannot breed money). Yeah, go tell that to the millions of western little investors who have been convinced from the most tender age of their natural right to have investment accounts breeding indefinitely like rabbits.