The Debate (And Now Discussion) On Usury Continues.
I have two prior blog posts bringing attention to this debate, here, and here. The latest threads involving me (though, in all modesty, there are others there more worth reading) are:
THIS IS AN OLD COMMENT OF MINE THAT I HAVE BLOGGED BEFORE, BUT THE RESPONSE BELOW IS NEW
[Context: Someone claims that charging interest is usury and that usury is theft, ergo, charging interest is theft]
How is it stealing if the person in debt entered the contract voluntarily?
Say I voluntarily decide to give all my food and money and shelter away. Then say I die of exposure and starvation. Are the people I gave my stuff to guilty of theft and murder?
Let’s look at Leviticus 25:35-37.
“If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. You shall not lend him your money at interest, nor give him your food for profit.”
Seems like there is a caveat (he must be poor, unable to maintain himself, and a “brother”) on interest, not a prohibition on it.
But if I interpret it rather as a broad prohibition, I must interpret the rest of the passage in the same manner. Therefore, it must be criminal to sell food to not just poor people, but to anyone that is hungry.
How about Exodus 22:25-27?
“If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him. If ever you take your neighbor’s cloak in pledge, you shall return it to him before the sun goes down, for that is his only covering, and it is his cloak for his body; in what else shall he sleep? And if he cries to me, I will hear, for I am compassionate.”
More caveats. “My people” and “who is poor”. And how about the cloak. What if he has more than one?
And Deuteronomy 23:19-21
“You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest. You may charge a foreigner interest, but you may not charge your brother interest, that the Lord your God may bless you in all that you undertake in the land that you are entering to take possession of it.”
Interest sounds perfectly legal to me. And we could argue all day about who constitutes a brother, and who a foreigner in the modern era.
Nehemiah 5: 6-13
“Now there arose a great outcry of the people and of their wives against their Jewish brothers. For there were those who said, “With our sons and our daughters, we are many. So let us get grain, that we may eat and keep alive.” There were also those who said, “We are mortgaging our fields, our vineyards, and our houses to get grain because of the famine.” And there were those who said, “We have borrowed money for the king’s tax on our fields and our vineyards. Now our flesh is as the flesh of our brothers, our children are as their children. Yet we are forcing our sons and our daughters to be slaves, and some of our daughters have already been enslaved, but it is not in our power to help it, for other men have our fields and our vineyards.”
“I was very angry when I heard their outcry and these words. I took counsel with myself, and I brought charges against the nobles and the officials. I said to them, “You are exacting interest, each from his brother.” And I held a great assembly against them and said to them, “We, as far as we are able, have bought back our Jewish brothers who have been sold to the nations, but you even sell your brothers that they may be sold to us!” They were silent and could not find a word to say. So I said, “The thing that you are doing is not good. Ought you not to walk in the fear of our God to prevent the taunts of the nations our enemies? Moreover, I and my brothers and my servants are lending them money and grain. Let us abandon this exacting of interest. Return to them this very day their fields, their vineyards, their olive orchards, and their houses, and the percentage of money, grain, wine, and oil that you have been exacting from them.” Then they said, “We will restore these and require nothing from them. We will do as you say.” And I called the priests and made them swear to do as they had promised. I also shook out the fold[a] of my garment and said, “So may God shake out every man from his house and from his labor who does not keep this promise. So may he be shaken out and emptied.” And all the assembly said “Amen” and praised the Lord. And the people did as they had promised.”
This has a bit more detail. It definitely comes down a lot harder on interest and mortgages. But it is still within the context of “brotherhood” not only in lineage but in faith. It also speaks literally of slavery. Are debtors enslaved today? Surely in a sense they are, but not in a truly “biblical sense”. Also notice the purpose of these mortgages. They were taken out to pay the king’s tax. So is the root of the evil in question interest or taxation (which is real theft)?
And Ezekiel 18:5-9.
“If a man is righteous and does what is just and right—if he does not eat upon the mountains or lift up his eyes to the idols of the house of Israel, does not defile his neighbor’s wife or approach a woman in her time of menstrual impurity, does not oppress anyone, but restores to the debtor his pledge, commits no robbery, gives his bread to the hungry and covers the naked with a garment, does not lend at interest or take any profit, withholds his hand from injustice, executes true justice between man and man, walks in my statutes, and keeps my rules by acting faithfully—he is righteous; he shall surely live, declares the Lord God.”
This may be ideal. But it is still a tall order. The command to feed the hungry and clothe the naked comes before the prohibition against charging interest. If it should be illegal to charge interest, should it not also be illegal to NOT share every spare piece of bread and article of clothing you have with every hungry and naked person one comes across?
HERE IS THE RESPONSE, NOTE THAT HE DOES NOT ADDRESS MY SCRIPTURAL CITATIONS OR GIVE HIS OWN
“How is it stealing if the person in debt entered the contract voluntarily?”
This is the crucial ruse Keith [sic]. The question is: what choice did the person have? Could he choose between a 5% mortgage and a 0% mortgage? Or could he choose between renting at even higher cost, 5% at Bank of America and 5,1 at Citigroup?
This is how ‘choice’ in the libertarian sense always works out. This is how the tyranny of Monopoly Capitalism parading as ‘free markets’ with ‘choice’ and ‘liberty’ work out.
But you are arguing that interest is always bad, even when there is choice. Say I take out a loan for something I can live without. Say I knew what I was getting into. Say I knew that interest would be charged because I was told by the person I was borrowing it from that it would not be worth it for them to loan their money “at cost”. How in the world is anyone forced into this situation? Make no mistake, not all loans are given to the needy. I would agree with you that some loans should be charitable, but that it is not the responsibility of banks to determine who is needy and who isn’t. They are there to make loans to people that can pay them off, not take up the responsibilities of poor or the ignorant. If people slip through the cracks, blame their “brothers” for not taking care of their needs, or better yet, blame them for being to proud to accept charity, or live in a hovel because they don’t have the skills, health, or ingenuity necessary to live in a McMansion. This is ALL the scriptures say: If your BROTHER is in NEED, do not charge them interest. This does not and can not translate into “if your CUSTOMER has a DEMAND, do not charge them interest.”
If there is choice there is no interest.
There is only interest if you can’t get it interest free! that’s why it’s so important to look behind the grandiose words: ‘choice’ ‘liberty’ ‘human action’; What is actually happening that is the questionl.
If you can go to a Mutual Credit Facility for a mortgage at 0% or bullion mortgage at 5%, where would you go?
Clearly you only go to the gold bank if there is no alternative, so no ‘choice’, even though you can ‘choose’ between hundreds of banks all offering the same silly specie.
End of story.
I HAVE THE LAST SAY (ACTUALLY, HE CHANGES THE SUBJECT, NOT THAT I MIND)
The same is true for when you purchase anything. There is no choice to get it for free unless someone gives it to you. In the case of money, this is known as charity.
I am not opposed to mutual credit, per se, but personally I would rather see my money appreciate with interest than depreciate with inflation. But these days the interest rate on savings is so artificially low that the average person probably wouldn’t notice the difference between the two types of banking. The problem with no interest is that it does not foster savings, and therefore drives investment lower than it would if people had incentive to save.
With this last sentence I admit I was making a deduction (some might call it speculation). But think about it: If there is no incentive to lend money, because no-interest loans means not only are you out the money until it is paid back, but you are not even being paid for your temporary loss of money. This has far-reaching ramifications. The first and most obvious (though for some reason I didn’t mention it in my comment, but was reminded that I should with an answer I received from a fellow blogger after having inquired for his opinion on mutual credit) is that people simply won’t lend to anyone but their friends and relatives or for infinitesimally brief periods of time. Then, because there are very few lenders, most people in need of a loan will have to forgo the purchases they would otherwise make, be it necessary or frivolous. Not only that, but people will start pulling their money out of banks. Why have your money sit in someone else’s (a greedy banker, no less) vault not appreciating a penny’s-worth (and likely depreciating thanks to the inflation caused by mutual credit creation) when you can spend it all at once, put it in black market banks that still lend for interest, or stuff it under your mattress and guard it with a sawed-off shotgun? With people taking their money out, bank runs could ensue. We all know where that sort of thing can lead. But, wait! There’s more! With banks failing and those that survive being savings-starved, where will entrepreneurs, investors, venture capitalists, and just ordinary people go for the liquidity necessary to fund their projects? Its a double-whammy for borrowers, because not only will there be no incentive for lenders to lend to them, but for the few lenders that decide to go on lending, there will be a scarcity of funds for them to loan out to borrowers. Scarcity, of course, leads to higher prices. If you can’t charge those prices in the form of interest, you will have to tack them on somewhere else or, and I hate to burst your bubble (pun intended), face the consequences.