The Sin of Usury

by Michael

"I'm not going to research this article, because if I started to do that I would never even begin to be able to write about a very important topic. So this is just off the top of my head and I may get some of my facts wrong. I'll also engage in "sweeping generalities" but again I'm trying to get across the big picture and I'm not inclined to spend the time researching this right now.

In other words, this article is strictly my opinion. You may say that isn't any different from my other articles, but I usually spend a lot of time finding online references to back up my opinion. So don't expect to find any links in this article, not that most people follow links anyway.

I'm going to start off by giving my definition of usury. Again, this is just off the top of my head. If I were to look up an exact definition, that would just get me started down a giant rabbit hole of how to exactly define the word and how different people have defined it different ways at different times. I'm not interested in that right now.

I define usury as lending money at interest. And of course if someone is lending the money, then someone else is borrowing it.

Some may say that what is important is the interest rate. And that it only becomes usury when it involves high interest rates. I'm not going to make that distinction. I'm also not going to distinguish between simple interest and compound interest. Although obviously, compound interest only compounds the sin.

My understanding is that usury was a sin as defined by the Catholic Church throughout history. I don't know about the pre-Christian Jewish definitions so I won't get into that. I also won't get into whether or not Jewish merchants in medieval times were the source of usurious lending. I'm not interested in that, and it is another black-hole that I don't want to explore at this time.

The big change as I understand it happened with the Protestant Reformation. And the key figure was Calvin. He was the one that decided that usury should no longer be a sin. His followers became the Calvinists.

I don't know which Protestant denominations are considered the most Calvinist, but it doesn't really matter. As far as usury goes, virtually all Protestants have full adopted the Calvinist position that usury is not a sin.

Catholicism I believe still considers this to be a sin -- although you wouldn't know it in practice. The Church probably nuances it with some statement about very high interest rates, but that is like trying to distinguish between different forms of contraception and labeling some a sin while others OK.

Usury was what allowed capitalism to flourish. Capitalism is not just about a free economy, it is also about "capital" -- that is, money. And it is about banks. It is about an abstraction of money, which is no longer something tangible. It is just a line in a balance sheet. It is a number. It doesn't necessarily reflect a physical reality like so many cattle, or acres of land, or barrels of wine.

Money takes on a life of its own. It becomes a god.

All this is possible because of usury. Because without the lending of money, then once a transaction is completed it is over. You exchange your two pieces of silver for two rabbits and the deal is done. There is no need to maintain a record of the transaction.

But if you borrow the money to buy the rabbits then the transaction is not over. A record must be kept. And as money is borrowed to repay another lender, the web of debt gets ever more thick and complicated.

This begins to quickly affect prices. If people had to save up money to buy a home, and then pay in cash then undoubtedly home prices would be lower.

And it would also be true that people would purchase smaller and more modest homes because they wouldn't be able to save up enough money to purchase a larger and more luxurious home. And maybe that would be a good thing.

Like all false gods, this one is eventually exposed when the drought comes. No longer do the sacrifices to the false idols bring the rain. They never did, it was all just an illusion; a hoax perpetrated by the priests of the religion.

When the magic fails, the people who placed their belief in false gods become disillusioned. The faithful that trust in the LORD have no reason to lose their faith. In fact their faith will be increased.

Trust in the LORD!" (snip) ...

NOTE: This article is originally published at this website:
http://publicvigil.blogspot.com/2011/07/sin-of-usury.html

Michael's blog has many other relevant articles:
http://publicvigil.blogspot.com