The morality of usury

[Peejay]

I performed a search here for topics on usury and struck out so pardon me for starting up a new topic on my first day. Seems to me that this is perhaps a national discussion we should be having, as it is notoriously absent from the debate about how to cure an economy that is reeling from usury instruments.

In researching the history of usury it appears that until very recently ( in relative terms ) the practice was at the least frowned upon, in many cases punishable in all sorts of ways, right up to the penalty of death. There is a long list of religious and secular laws that restrict or forbid the practice all together. The majority of sentiment throughout history appears to rest upon a moral consensus that taking profits by placing your fellow man into debt is wrong on a very basic level.

The concept of “usury” has a long historical life, throughout most of which it has been understood to refer to the practice of charging financial interest in excess of the principle amount of a loan, although in some instances and more especially in more recent times, it has been interpreted as interest above the legal or socially acceptable rate. Accepting this broad definition for the moment, the practice of usury can be traced back approximately four thousand years (Jain, 1929), and during its subsequent history it has been repeatedly condemned, prohibited, scorned and restricted, mainly on moral, ethical, religious and legal grounds. Among its most visible and vocal critics have been the religious institutions of Hinduism, Buddhism, Judaism, Islam and Christianity. To this list may be added ancient Western philosophers and politicians, as well as various modern socio-economic reformers. It is the objective of this paper to outline briefly the history of this critique of usury, to examine reasons for its repeated denouncement and, finally, to intuitively assess the relevance of these arguments to today’s predominantly interest-based global economy. The scope will not extend to a full exploration of some of the proposed modern alternatives to usury, except to describe the growing practice of Islamic banking as an example.

(There is a url cite for the above with a long and detailed history of usury. I'd love for you to read it after I have reached 15 post )

Now assuming that the history of usury is not in debate ( HA ! ) and that by examining this history we can conclude that an overwhelming number of cultures and societies have recognized the potential for fatal incidents in economies, should we not be taking a very long, very hard look at drastic changes to the way we view the practice ?

Total US debt: 53 TRILLION DOLLARS ( this is all public and private debt )

Total US hard currency: 860 BILLION DOLLARS ( most of this is held out of country )

How can this amount of US debt, acruing interst, ever be reconciled with even twice the amount of hard currency ? Surely an ocean can be filled with what I don't know about economics but these numbers should strike anyone with a decent functioning lobe as a very, very serious situation. A giant chunk of this debt has never and most likely will never be represented by product or asset. It is represented only as the concept of value of time on money, interest. There are no cars, no grain, no coal behind it. It appeared of thin air and came into existence as a debt of hard currency through no labor or production. It is profit from thin air.

We can go on and on about the merits of usury and hopefully we will. Who else thinks that beyond all the politics, beyond the attempts to balance this debt agaisnt product and asset, there must be a wholesale change in the way we believe money can be earned ? Is interest actually earned ? What good does it do for us as a nation ? Is it not one of the fundamental practices that has landed us in such a mess and can we do anything about it ?

 

[Agnapostate]

I predict a free market swarm to this thread...what's most amusing about that is that individualist market supporters such as Benjamin Tucker ardently opposed usury, along with rent and other forms of interest. This has little productive purpose, and reinforces my belief that "capitalism is an economic system in which surplus value is extracted in the production process by using wage labor and utilized in the circulation process to sustain capital accumulation," as cogently put by a market socialist.

 

[Peejay]

Well of course, most free market types like their own version of free money. All you need is a pile of money and you are entitled to more money by that virtue alone.

And I really like that quote in your sig line.

 

[Agnapostate]

Well of course, most free market types like their own version of free money. All you need is a pile of money and you are entitled to more money by that virtue alone.

And I really like that quote in your sig line.

Many thanks. Free market ideology, apart from being foolishly utopian (for instance, numerous free marketers here have failed to address my identification of principal-agent problems in conventional capitalist firms) are sorely lacking in the ethical realm that they claim is brought about by "voluntary exchange of consenting individuals in a competitive marketplace." (A delusion, naturally.)

 

[Peejay]

This topic could be debated under political, economic or ethical / moral pretenses. I prefered to address the topic in this forum so that perhaps there will be some input from the perspective of right / wrong and to get an idea if there is any sense of this right / wrong preserved in American culture today. It seems obvious that very few view usury instruments as wrong anymore. Perhaps a nuisance to some, but not wrong. Certainly a virtual sea of people who not only have no moral objections to usury, but have no idea that there every were any. I don't expect that many people still hold this practice in the same lowly regard as thousands of years of humanity. In a matter of a few decdades it appears that this moral judgement has been eclipsed despite thousands of years of human experience to the contrary. I am not interested in the teaming numbers of people who will not only say that usury is good but that I should probably start lending and profitting myself, but more interested in seeing if even the most devout and moral of our numbers recall anything at all about the subject.

 

[Agnapostate]

Only time will tell. Would you have any interest in participating in this thread?