On usury

In comments to this earlier post, Matthew asks:

"Doesn't the usury condemned in the Bible refer to lending at interest -- *any* interest, not just exorbitant interest?"

That's how most early Christians understood it. That point of view makes a lot of sense, too, when you read passages from the Bible like Nehemiah 5:7-11, in which the prophet excoriates as "usury" the charging of 1 percent:

"You are exacting usury from your own countrymen! ... What you are doing is not right. ... I and my brothers and my men are also lending the people money and grain. But let the exacting of usury stop! Give back to them immediately their fields, vineyards, olive groves and houses, and also the usury you are charging them -- the hundredth part of the money, grain, new wine and oil."

The prohibition against usury -- meaning any interest -- lived on for centuries in the church, right on up through Reformers like Martin Luther.

Yet this is no longer what Christians mean when they condemn usury. Now we mainly mean, as Matthew put it, the charging of "exorbitant" interest. And the definition of exorbitant, it turns out, is extremely elastic. (According to 74 U.S. senators, even interest rates in excess of 30 percent cannot be considered exorbitant or usurious.)

The Catholic Encyclopedia offers a pithy explanation of this change in Christian thinking in its entry on "Interest":

What is the reason for this change in the attitude of the Church towards the exaction of interest... this difference is due to economical circumstances. The price of goods is regulated by common valuation, and the latter by the utility that their possession ordinarily brings in a given centre. Now, today, otherwise than formerly, one can commonly employ one's money fruitfully, at least by putting it into a syndicate. Hence, today, the mere possession of money means a certain value. Whoever hands over this possession can claim in return this value. Thus it is that one acts in demanding an interest.

In other words: we have markets now, so we've adapted to a changing world.

There's a more in-depth, detailed discussion of the ... let's say, increasing sophistication of Christian thinking about lending at interest under the encyclopedia's fascinating entry on "usury." The author seems mightily uncomfortable with the task of reconciling the current permission with the former prohibition without implying that either might be more correct than the other.

So yes, the early Christians condemned "usury" -- by which they meant the charging of any interest. And contemporary Christians condemn "usury" -- by which we mean the charging of exorbitant/excessive/exploitative interest. The meaning of usury has evolved, but the severity of the condemnation is unchanged.

Here's more from that Catholic Encyclopedia entry on usury. It's a passage I wish my allegedly devout Catholic senator, Rick Santorum, had considered before voting to endorse interest rates in excess of 30 percent:

Lending money at interest gives us the opportunity to exploit the passions or necessities of other men by compelling them to submit to ruinous conditions; men are robbed and left destitute under the pretext of charity. Such is the usury against which the Fathers of the Church have always protested, and which is universally condemned at the present day. ... It is in itself unjust extortion, or robbery. The sin is frequently committed. In some countries are found the exaction of interest at 30, 50, 100 percent and more. ...

The precise word used there, the precise word for the precise thing that Sen. Santorum has precisely embraced, is "sin."

Comments

[Some Dude]

That list of Senators voting in favor of 30%+ interest rates includes:

Barack Obama, John Kerry, Patrick Leahy, Paul Sarbanes, and Harry Reid.

WTF??

[Scott]

I guess the same section also condems property taxes:

Nehemiah 5:4) Still others were saying, "We have had to borrow money to pay the king's tax on our fields and vineyards. 5) Although we are of the same flesh and blood as our countrymen and though our sons are as good as theirs, yet we have to subject our sons and daughters to slavery. Some of our daughters have already been enslaved, but we are powerless, because our fields and our vineyards belong to others."

And condems high taxes in general:

14) Moreover, from the twentieth year of King Artaxerxes, when I was appointed to be their governor in the land of Judah, until his thirty-second year-twelve years-neither I nor my brothers ate the food allotted to the governor. 15) But the earlier governors-those preceding me-placed a heavy burden on the people and took forty shekels [a] of silver from them in addition to food and wine. Their assistants also lorded it over the people. But out of reverence for God I did not act like that.

[Beth]

No, Scott, high property taxes are cited as creating the need for usurious borrowing, just as famine is in the preceding verse, but it is the usury which is condemned. It would have been as foolish for Nehemiah to condemn the taxes as the famine. Both were outside his control and the control of the people. The former was an act of nature and the latter was the act of a foreign king.

In your second excerpt, Nehemiah is not condemning the size of the taxes, but the corruption of the governors who used their position to enrich themselves and lord it over their brethren. Basically, he's condemning graft.

[Matthew]

Thanks, Fred. Obviously I knew the definition had changed, but had never seen a good explanation of how or why. Yours will more than do.

[Scott]

No, Scott, high property taxes are cited as creating the need for usurious borrowing

Where was it specified that those property taxes were particularly high?

Both were outside his control and the control of the people. The former was an act of nature and the latter was the act of a foreign king.

Famine was outside people's control, but taxes are set by human beings, not by Acts of God. Nobody in the Old Testament ever condemned a foreign king?

Their assistants also lorded it over the people.

That's not graft, that' a belief that one's own superiority entitles one to political power over another, and that's not limited to Republicans.

[Michael]

we've adapted to a changing world

But... but... Jesus is the same yesterday, today and forever. In the beginning was the Word and the Word was with God and... and...

Funny how the Bible gets rewritten only when it serves certain special interests.

[Beth]

Where was it specified that those property taxes were particularly high?
The landowners had to go into debt to pay them. I'd call that high.

Famine was outside people's control, but taxes are set by human beings
I didn't say "people." I said "the people." Of course kings are people, but they're not "the people" that Nehemiah was talking to or about.

That's not graft, that' a belief that one's own superiority entitles one to political power over another
No, it's not. It's taking advantage of one's political power for social advantage or -- in the case of the food and money -- financial gain.

graft (n) - Unscrupulous use of one's position to derive profit or advantages.
- The American Heritage Dictionary

(To Fred and other readers: I apologize for wasting so much time on this troll already. From here on in, I'll just leave it alone.)

[Scott]

The landowners had to go into debt to pay them. I'd call that high.

If you don't have the cash flow, even low property taxes can put you into debt (particularly considering what's considered a 'low' tax burden nowadays). You're defending property taxes the way interest is being defended - with hair splitting over 'high' vs. 'low'. Property taxes are just a slow way to do what eminent domain abuses do quickly - take property from some to give to others who can make more money with it.

I don't object to the very idea of paying any interest whatsoever because I don't really care what the OT says concerning how a bronze-age agrarian society should be run, any more than the average liberal cares that the same OT calls for gays to be put to death (but if you want to use those verses to point out the double standards of the religious right, be my guest).

I didn't say "people." I said "the people." Of course kings are people, but they're not "the people" that Nehemiah was talking to or about.

So the interest payments on the debt used to pay property taxes are evil, but the property taxes forced on them by that foreign king are just peachy? That's just special pleading in favor of property taxes.

graft (n) - Unscrupulous use of one's position to derive profit or advantages.

Most people think of graft as meaning personal material gain. I was talking about the validation and ego gratification some people, left and right, get from forcing others to live according to their own morality.

[Ben Allen]

There's a valid reason for so many democrats to have voted against the 30% cap amendment, since apparently as drafted it would override any lower caps already set by the states.

[obeah]

Some Dude, the reason those senators voted against the 30% cap was that it would have superseded the 21% cap already in place in some states.

[obeah]

Sorry, I managed not to see Ben's comment even though it was apparently posted over an hour ago.

[animus]

And here I was thinking that the name for what Santorum had embraced was Fido...

But never mind. Islam still maintains a ban on any interest, and yet Islamic banking appears to work fairly well. You can probably find some information by googling.

[paperwight]

Some Dude, the reason those senators voted against the 30% cap was that it would have superseded the 21% cap already in place in some states.

*maybe* AFAIK, most credit cards are national-bank-issued; states don't have authority to regulate national bank interest rates for the most part. Also, just because the federal rate caps at 30% doesn't mean that the states can have a more restrictive regulation. California's EPA-equivalent laws are much more restrictive than the National EPA laws.

In other words, I don't believe the Senators when they say that. I think it's bullshit.

[paperwight]

*can't* have a more restrictive regulation.

[Shag from Brookline]

These comments are taxing my interest. The IRS taxes my interest. Where is a usurer to go? I remember when life was vigorish, secured by broken limbs. Credit card companies merely break your will, especially with the coming bankruptcy bill. But the wealthy in bankruptcy still get the protection of the Florida homestead exemption that can run into the millions. It's all the Matthew Effect, to bring the New Testament into this economical/ecumenical/comical discussion. As they say in show business, "Break a leg". Just kidding.

[Dan]

For the traditional position on usury in Jewish rabbinical law, see:
http://www.jewishencyclopedia.com/view.jsp?artid=58&letter=U

[Some Dude]

For the record, the Amendment would not have superseded state usury laws unless they provided for interest greater than 30%. Lower-rate state laws would have been preserved.

I think the lib Dem Sens voted against it because it would have created a rate umbrella--banks could raise the rate to 30% in states without usury statutes and justify it as saying it was authorized by Congress. That's the only thing I could think of. Makes sense. What doesn't make sense is why Dayton picked 30% instead of 18% or something with a whiff of reasonableness.