USURY

Money lending is one of many business ventures practiced by Buddhist monks. Although commercial activities are not usually associated with Buddhism, from the inception of Buddhist communities as landowners to restaurants run by American Zen communities, monasteries have long been involved in a wide variety of economic enterprises. Because Buddhism identifies desire, rather than the objects of desire, as a source of suffering, wealth per se is not condemned; on the contrary, the proper use and enjoyment of wealth is encouraged. Commercial operations within the monastery also reflect Buddhism's origins in the urban, mercantile centers of ancient India and in the systems of exchange, trade, and commerce, as well as the legal status of property and ownership, that developed there. The spread of Buddhism along trade routes meant that Buddhism and commerce traveled hand-in-hand. In China, for example, the innovation of lending banks was introduced by Buddhists traveling from India. The material needs of Buddhist devotional practice also encouraged the development of various crafts and guilds, as well as construction, agriculture, and other technologies.

Capital resources were provided by a model of the pure gift in which the laity contributed material goods to the monastic community (d?na) in return for religious merit (pu?ya) that would enable better circumstances in future rebirths. As the wandering community of Buddhist renunciants quickly came to live the settled life of the vih?ra (monastery), monastic regulations began to allow the accumulation of donations beyond the immediate needs of the community. Some communities permitted such surplus to be used to endow funds that would generate interest for the purchase of clothing, food, and other community needs, or even for reinvestment. Because the funds generated interest and the principal investment was not depleted, they were called "inexhaustible" or "permanent" goods (ak?ayan?v?; Chinese, wujinzai). With the lands, serfs, livestock, grains, oil, cloth, gold, and silver thus acquired, renunciant communities were able to undertake a great variety of investment and commercial ventures. Later Chinese pilgrims reported that Indian monks supported themselves primarily by their land holdings and interest-bearing investments, rather than by daily rounds of alms seeking.

Lending at interest was one such practice. The assets lent from the inexhaustible goods could be commodities such as cloth, food, oils, seed, and other goods donated to the monastery. The lendable assets may also have included monies generated from land rents, commercial activities, and investments. The precepts of the various Indian schools give permission and rudimentary procedures for these lending practices. The M?lasarv?stiv?davinaya (Monastic Code of the M?lasarv?stiv?da [Group that Teaches that All Exists]), for example, gives specific instructions for lending the inexhaustible goods of the monastery, including details on the amount of collateral required (double the value of the loan), the form of the contract, the number of witnesses and guarantors needed, provisions for property seizure in the event of forfeiture, and other contractual details. The interest collected from monetary loans varied from as little as nothing to as high as 100 percent of the principal, but typically 50 percent of the principal was charged.

Although interest rates were frequently usurious, Buddhist monasteries were often the only source of large amounts of capital, so they performed an important and necessary social function that peasants, merchants, the gentry, and even monks took advantage of. At the same time, however, the vast wealth of the monasteries put them into competition for revenue with the state, so Buddhist economic enterprises were often attacked as corrupt and fraudulent. This was particularly true in China, where charges of financial impropriety were frequently raised during periods of imperial suppression of Buddhism.

The commercial activities of monasteries were not conducted solely for the purpose of economic gain—charitable lending and other social welfare institutions also developed. In China, for example, the Sanjie jiao (Three Stages school; late sixth–early eighth centuries), which operated several famous "Inexhaustible Storehouses," combined rules that provided for the endowment of inexhaustible funds with teachings from the Huayan (Flower Garland) and Vimalak?rti s?tras about the bodhisattva's inexhaustible storehouse of compassion for living beings. Their Inexhaustible Storehouse at the Huadu Monastery in Chang'an received donations from the faithful that were then lent out free of interest to the poor and needy of the empire. Because the goods of the storehouse were "inexhaustible," the donor acquired inexhaustible merit. This type of social welfare program was also seen in the development of pawnshops, another type of lending operation run by Buddhist monasteries.

Although in modern times many of the commercial ventures of Buddhist monasteries have been taken over by secular enterprise, the scope of Buddhist economic activities remains wide, and includes mutual-aid societies and cooperative banks, as well as modern forms of investment like credit cards and nonprofit corporations.

See also:China; Economics; India; Monasticism

Bibliography

Ch'en, Kenneth. The Chinese Transformation of Buddhism. Princeton, NJ: Princeton University Press, 1973.

Gernet, Jacques. Buddhism in Chinese Society: An Economic History from the Fifth to the Tenth Centuries, tr. Franciscus Verellen. New York: Columbia University Press, 1995.

Miller, Robert J. "Buddhist Monastic Economy: The Jisa Mechanism." Comparative Studies in Society and History 3, no. 4 (1961): 427–438.

Schopen, Gregory. "Doing Business for the Lord: Lending on Interest and Written Loan Contracts in the M?lasarv?stiv?da-Vinaya." Journal of the American Oriental Society 114, no. 4 (1994): 527–554.

Schopen, Gregory. Bones, Stones, and Buddhist Monks: Collected Papers on the Archaeology, Epigraphy, and Texts of Monastic Buddhism in India. Honolulu: University of Hawaii Press, 1997.

Sizemore, Russell F., and Swearer, Donald K., eds. Ethics, Wealth, and Salvation: A Study in Buddhist Social Ethics. Columbia: University of South Carolina Press, 1990.

Jamie Hubbard