Posts tagged ‘Usury’

This is completely off-topic, and a much more substantial piece than my usual posts. However, this discussion at Aeon prompted me to put forward some thoughts on similar issues which I wrote a while go.  I hope this is interesting, but in any case normal service will resume in a couple of days…

Debt problems beset the modern world,  from unpayable mortgages and the banking crises they precipitate, through lives eroded by unmanageable loans, the sovereign debt problems that have threatened the stability of Europe, to the vast interest repayments that quietly cancel out much of the aid given to some developing countries. Debt is arguably the modern economic problem. It is the millstone round our necks; yet we are not, it seems, to blame those who put it there. Debtors are not seen as the victims of a poorly designed, one-sided deal, but as the architects of their own prison. It is widely accepted that they face an absolute moral duty to pay up, irrespective of capacity or consequences. The debtor now bears all the blame, although once it would have been the lenders who were shamed.
That would have been so because usury was once accounted a sin, and while the word now implies extortionate terms, in those days it simply meant the lending of money at interest – any rate of interest.  The moral intuition behind that judgement is clear – if you gave some money, you were entitled to the same amount back: no less, no more. Payment and repayment should balance: if you demanded interest, you were taking something for nothing. The lenders did no work, added no new goods to the world, and suffered no inconvenience while the gold was out of their counting house. Indeed, while someone else held their money  they were freed from the nagging fear of theft and the cost and inconvenience of guarding their gold. Why should they profit?

From a twenty-first century perspective that undeniably seems naive. Interest is such a basic part of the economic technology underlying the modern world that to give it up appears mad: we might as well contemplate doing without electricity. The very word ‘usury’ has a fustian, antiquarian sound, with some problematic associations lurking in the background. An exploded concept, then, an archaic word; a sin we’re well rid of?

Yet our problems with debt surely suggest that there is an element of truth lurking in the older consensus after all; that there is a need for a strong concept of improper lending.  Isn’t there after all something wrong with a view that blames only one party to a lending plan that has gone disastrously off track? Shouldn’t the old sin now be raised from its uneasy sleep: shouldn’t usury, suitably defined, be anathematised once more, as it was in earlier times? Continue reading ‘Against Usury’ »