So my limited understanding of its' history is that Christians were not permitted to be usurers (sinful) so that's why Jews became bankers and were able to prosper, leading to the "rich Jew" attitudes that have permeated western society. Is usury immoral? How would our society/economy be different if usury were not permitted in Christian circles today?

Usury is indeed immoral in the Christian religion, and the teaching never should have changed.

As for how things would look, I imagine not much different, mankind being as it is I assume even a Christian nation where usury is illegal would be like any Muslim nation where they charge a fee or membership dues for borrowing money, which acts as interest without actually being interest

Isn't the prohibition against loaning at interest from the Old Testament which was all abolished?

How different? Easy: no interest, no capitalism. It would be ethically unacceptable for a Christian nation.

Define usury.

Charging any interest at all on a loan. The RCC has condemned it as a sin for hundreds of years.

Then Calvin comes along and he's like "eh who cares" cause he was an arsehole like that.

I think things are a little more complicated than that in modern times. Most modern nations have economies with built-in inflation. The inflation rate for the US last year was 2%. So if I loaned you money and gave you a year to pay it back without any interest then I am losing 2% of the monetary value of that loan. It is actively costing me money to lend you money, even if you repay in full.

On the one hand, I don't think lending with roughly enough interest to match inflation is usury. You're just expecting back the same value you have loaned. On the other hand, there are many rampant examples of usury in our society. Just look at payday and title loan companies. I would probably argue that those rent to own furniture stores employ usury.

There's a big grey area between the rate of inflation and the examples above. Is it usury to charge higher interest than inflation to cover the risks of default? Maybe, but at some point if your default rate is high enough then you're back to title loan 1000% per year territory. Personally I'd argue that anything over the inflation rate is usury, but then again I have a mortgage at 4%. So I'm probably contributing to the moral bankrupcy of America.

ramblin_ag02 said:

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I think things are a little more complicated than that in modern times. Most modern nations have economies with built-in inflation. The inflation rate for the US last year was 2%. So if I loaned you money and gave you a year to pay it back without any interest then I am losing 2% of the monetary value of that loan. It is actively costing me money to lend you money, even if you repay in full.

On the one hand, I don't think lending with roughly enough interest to match inflation is usury. You're just expecting back the same value you have loaned. On the other hand, there are many rampant examples of usury in our society. Just look at payday and title loan companies. I would probably argue that those rent to own furniture stores employ usury.

There's a big grey area between the rate of inflation and the examples above. Is it usury to charge higher interest than inflation to cover the risks of default? Maybe, but at some point if your default rate is high enough then you're back to title loan 1000% per year territory. Personally I'd argue that anything over the inflation rate is usury, but then again I have a mortgage at 4%. So I'm probably contributing to the moral bankrupcy of America.

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Certainly. My question for R&P would be whether the Catholic church or Christianity more broadly in terms of other denominations has any official statements of ethics that clarify any of that. For most of the history of the RCC, it seems the condemnation of interest was categorical: any interest, period, is unacceptable for a Christian. This would seem to make many financial careers (obviously banking) completely off limits to a practicing Christian (or Muslim, for that matter?). I guess Jews get off sort of easy since Old Testament God said interest is ok as long as it's being charged to Gentiles and not other Jews.

What does the Church say about ursury?

Debt: The First 5,000 Years goes into the history of usury in Europe. The Western Church (pre-reformation) was strongly against usury and any level of interest on loans. Unfortunately, the princes of Western Europe loved making war, which involves taking on debt, so the Jews were kept around for that. And they made great scapegoats when it was time for debts to be repaid.

Eventually the Catholic Church adopted the Calvinist stance that charging interest on loans was fine, as long as it wasn't excessive.

The big difference in modern Western society and all previous societies is the level of consumer debt. For most of history debt has been used to finance war or finance productive activities for businesses (e.g. borrow money to build a ship to transport goods which leads to profits used to repay debts).

In today's society consumers borrow lots of money from their future earnings to finance consumption now. Why save money for a house when you can assign X years of future earnings to have it now? This form of debt has never existing before the last century or so because no sane financial institution would offer this type of lending unless back-stopped by the government. This gets people into all sorts of trouble when layoffs, medical expenses, and life in general comes calling, and it's probably the type of usury the Church should be focused on today.

Ulrich said:

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Define usury.

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charging unreasonable interest rates for a loan. Like payday loans, title loans, etc. The Bible commands to lend interest free to the poor when in financial distress.

Just the poor? And reasonable interest is ok? Where?

The commandment is to loan money interest free to someone who is part of His people. Rich or poor. So if it is a non-Jew, the commandment does not apply.

Dr. Watson said:

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Just the poor? And reasonable interest is ok? Where?

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I don't see the rich going to payday loan places, but maybe it happens.

Marco Esquandolas said:

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agie95 said:

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The commandment is to loan money interest free to someone who is part of His people. Rich or poor. So if it is a non-Jew, the commandment does not apply.

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Cause f--k gentiles, amirite?

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More like genocide em, amirite?

Martin Q. Blank said:

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Ulrich said:

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Define usury.

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charging unreasonable interest rates for a loan. Like payday loans, title loans, etc. The Bible commands to lend interest free to the poor when in financial distress.

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8%+ per week interest rates are reasonable when the default rate is 6%. Like sweatshops in Malaysia, people use them because it's better than the alternative.

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Well, let's think a little about a 6% default rate. These figures are for loans that run from 14 to 30 days. That is, if you lend out $10,000 in accumulated loans then 30 days later $600 of them will have defaulted. Or at the shorter end, after 14 days $600 will have defaulted. Sticking with 30 days, so, how much interest do you have to charge on the $10,000 to only cover your default rate?

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https://www.forbes.com/sites/timworstall/2011/12/20/why-payday-loans-are-so-expensive/#6aa385b20399

Just so I'm clear:

charging interest on a loan = BAD because that's money you make?

charging an indulgence to commit the sin of your choosing = GOOD because that's money the Roman church makes?

You need to Google indulgences because you are obviously confused. Even during the worst abuses of the teaching it was never I can sin to my hearts content but the Church took my money so I'm still square with God.

Martin Q. Blank said:

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Loans should not be given out for rims and your daughter's quinceanera. They take advantage of the poor, like sweatshops in Malaysia.

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A sweatshop sounds pretty good when the alternatives are starvation or prostitution.

I assume most payday loans are just people trying to get by, make rent, buy food. Even so, there's no way to know ahead of time what they'll use the money for or enact any policy to stop frivolous spending.

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I assume most payday loans are just people trying to get by, make rent, buy food. Even so, there's no way to know ahead of time what they'll use the money for or enact any policy to stop frivolous spending.

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There's this thing called language. A series of clicks and sounds are used in series to communicate a message. Typically a lender will use this method to ask what the money is being used for in order to ensure their money is secure.

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There's this thing called language. A series of clicks and sounds are used in series to communicate a message. Typically a lender will use this method to ask what the money is being used for in order to ensure their money is secure

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Yeah I'm sure that will work.

"Are you going to buy hookers, booze, and coke with this cash"
"No"
"Here's your cash"

It just dawned on me you're the two teas theory guy.

Swing and miss. It's ok that the bible got economics wrong, add it to the list. The discipline hadn't been invented yet.

John Maplethorpe said:

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Swing and miss. It's ok that the bible got economics wrong, add it to the list. The discipline hadn't been invented yet.

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Yeah, but Jesus was a pro-2nd Amendment laissez-faire capitalist.

I picture my Jesus as a successful small business man. With a tasteful mullet, bass boat, and two jet skis.

Jesus was pro-business, in fact, he was the world's finest CEO:
https://www.amazon.com/Jesus-CEO-Ancient-Visionary-Leadership/dp/0786881267


In all seriousness, the model for Christians should be something like the Amish. Loans are something that can be used sparingly for profitable business opportunities (buying productive farmland in their case) but should never be used for "life events" (that is where you rely on fellow Christians) or regular consumption or desires (that is where you rely on personal savings).

Note that this is more of a cultural attitude than any sort of government policy. But most Christians have hopped on board with modern consumption and borrowing habits, which makes opposition to gay marriage and other social stances appear hypocritical and mean-spirited to non-Christians.

Sure, ignore all the parts of the New Testament about the eye of the needle, not worshiping mammon, not storing up wealth on earth, etc. but zero in on Romans 1:27.

You can't have labor intensive inventions, life saving drugs, multi-million $ buildings. Jet travel, nice houses, international cargo ships(bringing fresh food), metals, or retirement accounts without investment and loans.

John Maplethorpe said:

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You can't have labor intensive inventions, life saving drugs, multi-million $ buildings. Jet travel, nice houses, international cargo ships(bringing fresh food), metals, or retirement accounts without investment and loans.

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Yes that's exactly right.

Businesses raising capital through debt markets has a long and glorious history. What Christians should be concerned about is household debt accrued to finance consumption, not investment.

Guys, the concept here is simple. If your brother asked you for a reasonable loan to help him through a tough situation, don't be a dirtbag and charge him interest.

If it is a business venture, different standard.

The core concept is to be smart with the money God has trusted you with, but not to be greedy. Generousness is important.

I'll pass on a piece of advice from my father and grandfather, both of whom worked in lending and collections for decades. Never loan money to family. If you can't afford to give it outright, then just say no. There's nothing worse than trying to play collections officer on someone in your own family.