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    Junon's Avatar
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    Wisdom behind Prohibition of Riba (interest)

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    Salaam

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    Blurb

    One of the miracles of Islam are the rules of riba (interest, usury). Many students who for the first-time study these rules think they are a burden to the economy and question wisdom to why we exchange money for money in equal amounts and on the spot. Sometimes even ask if there is a place for such restrictions in a modern economy? In this clip, we analyze the power of Islamic economic principles regarding the ban on riba by looking at the root causes of the Global Financial Crisis.


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    Re: Wisdom behind Prohibition of Riba (interest)

    I watched this guy's presentation yesterday since it was on the first page that youtube pushed up after the curiosity on the issue was peaked - i have to say that although he did mention a few important points - he completely bypassed the fundamental problems of usury and went on to the problems of credit default swaps and insurance - whereas the problem of CDOs only arises after the problem of artificial inflation of the market via basic usury.
    His references pointed to the movie "the big short" - and his mention of the waitress strengthened this observation.
    One of the issues he did highlight whether inadvertently or not - i don't know - is that the usury system actually attains around equal purchasing power on the loans which it creates - and this proves the share in criminality of those who take out loans on usury - since the fact that the loan was taken out actually allowed for an equal amount of property to be syphoned off the market every 25 years or so, and since the new amount of fiat money produced to keep the system going and repaying loans with added "interest" also inflates the economy and reduces purchasing power of the common people (who previously held that fiat paper or who sweat to get that paper) with every unit of newly "minted" (printed) or otherwise conjured fiat currency (directly comparable to precious metal coin counterfeiting), along with the fact that an equal amount of property (equivalent to that on which loans were taken out) has disappeared into the usurious banking system, and along with the fact that all new fiat currency added to the system also hits the market with the understanding that non-existent currency will be re-paid as "interest" (leading to inevitable asset seizures) - it is obvious that the usury system is reliant on political corruption since the mathematical totals prove that it is a ponzi scheme backed up by the threat of government truncheons.

    One clear evidence of the corruption is the fact that in london where the scam is primarily run - the local security guards of the banks are portrayed as "city police" even though they take over investigations from the metropolitan police as soon as the sniffer dogs reach the square mile and its surrpundings.

    Those so called "cops" are answerable to the "city fathers" who give them anything they need - and whenever a politician demands that the "city police" be incorporated into the met - all hell breaks loose - with prominent freemasons within politics and also the met claiming that it's ok as it is.
    Last edited by Abz2000; 09-17-2018 at 12:42 AM.
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    fschmidt's Avatar
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    Re: Wisdom behind Prohibition of Riba (interest)

    This guy managed to completely miss the point. Who cares if some bankers screw other bankers? The only issue with this is that in 2008, bankers were bailed out who should have gone bankrupt.

    There are 2 real problems with interest. One is that it often bankrupts poor people. The other is fractional banking which causes economic instability. This guy managed to miss both points.
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    Wisdom behind Prohibition of Riba (interest)


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    Re: Wisdom behind Prohibition of Riba (interest)

    I've posted a basic historical narrative on how the ponzi scheme has run and how an apparent Balfour like declaration by William the b@$tard made usury kosher after hailey's comet passed by.

    I am telling yous that these are the heirs of the same money changers that _ threw out of the house of God.

    They slithered into Europe and started their usury schemes there when they realised that the expanding Muslim world was having none of the usury game and so invested the gold they'd gathered to exploit a coalition of the willing goyim and fund (on usury) a campaign to get their precious witchcraft books back from under Sulaiman 's throne - and hopefully get a new footing in the less "fundamentalist", more "progressive" in decadence, clueless, Muslim majority countries so they can leech them dry too.

    Saddam was harsh on freemasonry though.
    Weird that a lot of the arab leaders purchased stocks in the banks - were they just puppets investing their citizens' money to bail out their elders or were they too rejecting God and wanting a piece of the game? Didn't they see the next massive financial collapse on the horizon once the inflation hits? Or are they unaware of how many have had theor "assets" frozen and confiscated through the usurious banking system?



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    Last edited by Abz2000; 09-17-2018 at 06:20 AM.
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    Re: Wisdom behind Prohibition of Riba (interest)

    Quote Originally Posted by Abz2000 View Post
    I've posted a basic historical narrative on how the ponzi scheme has run and how an apparent Balfour like declaration by William the b@$tard made usury kosher after hailey's comet passed by.

    I am telling yous that these are the heirs of the same money changers that _ threw out of the house of God.

    They slithered into Europe and started their usury schemes there when they realised that the expanding Muslim world was having none of the usury game and so invested the gold they'd gathered to exploit a coalition of the willing goyim and fund (on usury) a campaign to get their precious witchcraft books back from under Sulaiman 's throne - and hopefully get a new footing in the less "fundamentalist", more "progressive" in decadence, clueless, Muslim majority countries so they can leech them dry too.

    Saddam was harsh on freemasonry though.
    Weird that a lot of the arab leaders purchased stocks in the banks - were they just puppets investing their citizens' money to bail out their elders or were they too rejecting God and wanting a piece of the game? Didn't they see the next massive financial collapse on the horizon once the inflation hits? Or are they unaware of how many have had theor "assets" frozen and confiscated?



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    sigh This world is filthy filthy. We deserve to be punished. Earned the punishment and sum.

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    Re: Wisdom behind Prohibition of Riba (interest)

    Quote Originally Posted by xboxisdead View Post
    sigh This world is filthy filthy. We deserve to be punished. Earned the punishment and sum.
    Better to repent to Allah than to secure the consequences warned of in the opening 20ish verses of surah al Anbiyaa (ch.21)


    When the Prophet returned to Makkah it is reported that his head was so bowed that his beard was touching his mount, that was because he knew that he was not going in as a conqueror but as a humble servant in obedience to God.
    When Umar went to receive the keys to Jerusalem, he went in humility with a single servant whilst wearing patched clothes.

    When you see the abominations and lgbt raves in jerusalem practiced by the rothschild backed and pampered "israeli" government - after having setting up of the analogous inner and outer temples in london, and the setting up of the blasphemous religious analogies in the hellfire clubs, the analogies drawn in the naming of the United Kingdom of Israel and Judah errr... Ukgb - and the rothschild owned economist's "obituary of God" , you see that these money changers were challenging God as if conquerors returning. As if saying 'see? You had us thrown out but we set up our own kingdom like yours elsewhere and became lucifer, now we're setting up the synagogue of satan in the holy place and practicing establishing everything that rouses your jealousy'.
    Know that such blasphemy and rebellion will not go unanswered - a respite to reconsider and repent is not a license to commit crimes.



    Some of the stuff in here is interesting:




    Thanks god but no thanks huh? Scroll to 3 minutes if in a rush.

    Last edited by Abz2000; 09-17-2018 at 08:02 AM.
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    Re: Wisdom behind Prohibition of Riba (interest)

    Salaam

    Quote Originally Posted by fschmidt View Post
    This guy managed to completely miss the point. Who cares if some bankers screw other bankers? The only issue with this is that in 2008, bankers were bailed out who should have gone bankrupt.

    There are 2 real problems with interest. One is that it often bankrupts poor people. The other is fractional banking which causes economic instability. This guy managed to miss both points.
    Just for clarification Whats your position on riba/interest? Are you against it in all forms or do you make room for exceptions?

    Another video.


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    fschmidt's Avatar
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    Re: Wisdom behind Prohibition of Riba (interest)

    Quote Originally Posted by Junon View Post
    Just for clarification Whats your position on riba/interest? Are you against it in all forms or do you make room for exceptions?
    I follow the Old Testament which says:

    "Do not charge your brother interest on money, food, or anything that can earn interest. You may charge a foreigner interest, but you must not charge your brother interest, so that the Lord your God may bless you in everything you do in the land you are entering to possess."
    -- Deuteronomy 23:19-20

    So based on this I would not charge interest to Muslims and traditional Anabaptists since these groups follow the basic idea of the Old Testament.

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    Re: Wisdom behind Prohibition of Riba (interest)

    Quote Originally Posted by fschmidt View Post
    I follow the Old Testament which says:

    "Do not charge your brother interest on money, food, or anything that can earn interest. You may charge a foreigner interest, but you must not charge your brother interest, so that the Lord your God may bless you in everything you do in the land you are entering to possess."
    -- Deuteronomy 23:19-20

    So based on this I would not charge interest to Muslims and traditional Anabaptists since these groups follow the basic idea of the Old Testament.
    Deuteronomy 23:19-20 New International Version (NIV)

    19 Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest. 20 You may charge a foreigner interest, but not a fellow Israelite, so that the Lord your God may bless you in everything you put your hand to in the land you are entering to possess.
    https://www.biblegateway.com/passage...0%2C8361440592

    International Standard Version

    "Don't charge interest to your relatives, whether for money, food, or for anything that has been loaned at interest.

    Christian Standard Bible

    "Do not charge your brother interest on silver, food, or anything that can earn interest.

    New American Standard Bible

    "You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest.
    https://biblehub.com/deuteronomy/23-19.htm?_e_pi_=7%2CPAGE_ID10%2C8527623968

    Brothers: according to you it includes Muslims and Christians as well.

    Country men: Non Jew are also included if they live there

    Israelites: Only them regardless of which country they live in

    Relatives: It includes limited number of people whether they're Jew or other religious people e.g. Hindu provided that they're relatives

    Q: Who're exempted from paying interest to you...?
    Last edited by azc; 10-11-2018 at 11:51 AM.

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    Re: Wisdom behind Prohibition of Riba (interest)

    Greetings and peace be with you Junon;

    I liked your video explaining that usury is a mathematical fraud. I saw an interesting TV programme some years ago about the commandment, thou shall not steal.

    Back in 1066 William conquered England, and he divided the country up between all his lords. Each lord took or stole land, they built a castle and taxed the people nearby to fund their project. Today, many of the lords living in their stately homes can trace their ancestry back to 1066.

    Those lords who have used or invested their money wisely, have had the benefit of almost a thousand years of compound interest. The irony is, that if your ancestors were one of those peasants forced off their land a thousand years back, you still might be forced to borrow money which is still linked to the original theft of land.

    In other words, the lord today could be the chairman of a bank; whose ancestor took your ancestor's land and taxed him a thousand years ago. It just means you are still paying for the privileged of the original theft.

    In the spirit of praying for justice for al people

    Eric
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    You will never look into the eyes of anyone who does not matter to God.

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    fschmidt's Avatar
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    Re: Wisdom behind Prohibition of Riba (interest)

    Quote Originally Posted by azc View Post
    Q: Who're exempted from paying interest to you...?
    It literally says "brother" but this is a figure of speech which means someone who you consider to be a member of your community. I consider all who take God's instruction seriously to be members of my community, and that currently includes Muslims and traditional Anabaptists. So these are the people who I can't charge interest to.

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    Re: Wisdom behind Prohibition of Riba (interest)

    @fschmidt :

    Figure of speech...?

    See some more figure of speech, friend.

    Man was created after the plants. Gen.1:12, 26. Man was created before the plants. Gen.2:5-9.

    The birds were created out of the water. Gen.1:20. The birds were created out of the land. Gen.2:19.

    The animals were created before man. Gen.1:24-26. The animals were created after man. Gen.2:19.

    On the first day, G-d created and separated light and darkness. Gen.1:3-5. On the fourth day, G-d again created and separated light and darkness. Gen.1:14-18.


    G-d encouraged reproduction, Gen.1:28. He said it was an unclean process, Lev.12:1-8

    G-d was pleased with his creation. Gen.1:31. G-d was not pleased with his creation, Gen.6:6.


    Adam was to die "the day" he ate the forbidden fruit, Gen.2:17. Adam lived 930 years, Gen.5:5.

    The name of "The Lord" was known in the beginning. Gen.4:26; Gen.12:8; Gen.22:14; Gen.26:25. The name of "The Lord" was not known in the beginning. Ex.6:3.

    G-d preferred Abel's offering to Cain's, Gen.4:4, 5. G-d shows no partiality. 2 Chr.19:7; 2 Sam.14:14.

    G-d asks Cain the whereabouts of his brother, Gen.4:9. G-d goes to see what is happening, Gen.18:20, 21. G-d is everywhere and sees everything, Prov.15:3; Jer.16:17; Jer.23:24.

    It didn't rain before the flood, Gen.7:4. There was rain from above and below, Gen.8

    Two pairs of each kind were to be taken aboard Noah's ark, Gen.6:19, 20; Gen.7:9, 14-16. Two pairs and seven pairs of some kinds were to be taken aboard, Gen.7:2, 3.


    Noah entered the ark during the Flood, Gen.7:7. Noah entered the ark after the Flood, Gen.7:12, 13.

    There were many languages before the tower at Babel. Gen.10:5, 20, 31. There was only one language before the tower at Babel. Gen.11:1.


    Abraham married his half-sister and was blessed. Gen.11:29. Incest is wrong. Deut.27:22; Lev. 18:9; Lev. 20:17.

    "G-d" caused David to number the people, 2 Sam.24:1. "Satan" caused David to number the people, 1 Chr.21:1.

    Saul utterly destroyed the Amalekites, 1 Sam.15:20. David utterly destroyed the Amalekites, 1 Sam.27:8, 9. David destroyed the Amalekites - again - almost, 1 Sam.30:1,17,18.


    G-d chose Saul to save the people from the Philistines, 1 Sam.9:15-17. Saul dies and the Philistines overrun the Israelites, 1 Sam.31:6, 7.

    G-d chose Saul, 1 Sam.9:16. G-d repents for choosing Saul, 1 Sam.15:35. G-d doesn't need to repent, Num. 23:19.


    Saul inquired of G-d but received no answer, 1 Sam.28:6. Saul died for not inquiring, 1 Chr.10:13, 14.

    Saul killed himself, 1 Sam.31:4; 1 Chr. 10:4, 5. Someone killed Saul, 2 Sam.1:5-10. The Philistines killed Saul, 2 Sam.21:12. G-d killed Saul, 1 Chr.10:13,14.

    His name was Solomon, 2 Sam.12:24; 1 Chr.22:9. His name was Jedidiah, 2 Sam.12:25.

    Solomon had 40,000 stalls of horses, 1 Ki.4:26. Solomon had 4,000 stalls of horses, 2 Chr.9:25.

    Solomon had 3300 supervisors, 1 Ki.5:16. Solomon had 3600 supervisors, 2 Chr.2:2.

    Jesse had eight sons, 1 Sam.16:10, 11; 1 Sam.17:12. Jesse had seven sons, 1 Chr.2:13-15.

    Saul knew David before the encounter with Goliath, 1 Sam.16:19. Saul did not know David until after the encounter with Goliath. 1 Sam.17:55-58.


    Michal was childless, 2 Sam.6:23. Michal had five sons, 2 Sam.21:8.
    Rashi explains: "had no child: from that day on."

    David paid 50 pieces of silver for the property, 2 Sam.24:24. David paid 600 pieces of gold for the property, 1 Chr.21:25
    Last edited by azc; 10-12-2018 at 05:19 PM.
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    Re: Wisdom behind Prohibition of Riba (interest)

    Quote Originally Posted by fschmidt View Post
    I follow the Old Testament which says:

    "Do not charge your brother interest on money, food, or anything that can earn interest. You may charge a foreigner interest, but you must not charge your brother interest, so that the Lord your God may bless you in everything you do in the land you are entering to possess."
    -- Deuteronomy 23:19-20

    So based on this I would not charge interest to Muslims and traditional Anabaptists since these groups follow the basic idea of the Old Testament.
    Except what has been changed to convey a wrongful understanding and practice:

    And their taking of Riba (usury) though they were forbidden from taking it and their devouring of men’s substance wrongfully (bribery). And We have prepared for the disbelievers among them a painful torment”[al-Nisaa’ 4:61]

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    Re: Wisdom behind Prohibition of Riba (interest)

    Salaam

    Another book on the subject Id like to recommend.

    Blurb

    Opposing the Money Lenders is a collection of writings from some of the most determined fighters against usury and the Central Banking system during the 20th Century. Those included are Arthur Nelson Field, John A. Lee, John Hargrave, Ezra Pound, Father Charles Coughlin, and Gottfried Feder, who fought and inspired mass movements that struggled to liberate their nations from the forces of what one - Gottfried Feder - aptly called "Mammonism".

    The subject of the supply of our money, and who controls it, is the greatest social issue that confronts humanity today. It is the "Hidden Hand" behind history. Without dealing with the problems of banking and usury, without a people having control over its own means of credit and exchange, there can be no genuine nationhood, and no real freedom, whether personal or national. Almost every individual, family, nation, indeed most of the world, is in thrall to the money lenders.

    Despite advances in mechanisation and technology, people are working longer hours, and are more enslaved to the economic treadmill than were their ancestors in Medieval times. At the same time, despite mass education, people today understand the economic and financial system far less than their parents and grandparents. Opposing the Money Lenders examines our parasitic financial system and the means by which it might be replaced.



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    Junon's Avatar
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    Re: Wisdom behind Prohibition of Riba (interest)

    Salaam

    Like to share.



    Of money and morals

    Moneylending has been taboo for most of human history. So how did usury stop being a sin and become respectable finance?


    ‘A banker and a theologian’ sounds like the start of a bad joke. But for David Miller it’s merely a job description. After working in finance and business for 16 years, Miller turned to theology, and received his PhD from Princeton Theological Seminary in 2003. Now he’s a professor of business ethics and the director of Princeton University’s Faith and Work Initiative, where his research focuses on Christianity, Judaism and Islam. ‘How to Succeed without Selling Your Soul’ is the students’ popular nickname for his signature course.

    In 2014, Citigroup called. The bank had been battered by successive scandals and a wave of public mistrust after the financial crisis, so they wanted to hire Miller as an on-call ethicist. He agreed. Rather than admonish bankers to follow the law – an approach that Miller thinks is inadequate – he talks to them about philosophy. Surprisingly, he hasn’t found bankers and business leaders to be a tough crowd. Many confess a desire to do good. ‘Often I have lunch with an executive, and they say: “You do this God stuff?”’ Miller told me. ‘And then we spend next hour talking about ethics, purpose, meaning. So I know there’s interest.’ Miller wants people in finance to talk about ‘wisdom, whatever its source’. To ignore these traditions and thinkers, as the bulk of the industry tends to do, is equivalent to ‘putting on intellectual blinders’, he says.

    Today, a banker listening to a theologian seems like a curiosity, a category error. But for most of history, this kind of dialogue was the norm. Hundreds of years ago, when modern finance arose in Europe, moneylenders moderated their behaviour in response to debates among the clergy about how to apply the Bible’s teachings to an increasingly complex economy. Lending money has long been regarded as a moral matter. So just when and how did most bankers stop seeing their work in moral terms?

    In the early 1200s, the French cardinal Jacques de Vitry wrote a collection of exempla, morality tales that priests used in their sermons. In one story, a dying moneylender makes his wife and children swear to hang a third of their inheritance around his neck, and to bury him with it. His family does as instructed. However, later they decide to open the man’s grave to recover the money – only to flee ‘in terror at seeing demons filling the dead man’s mouth with red hot coins’, de Vitry wrote.

    In de Vitry’s world, the moneylender deserved to be defiled by demons, because he’d committed the sin of usury – charging interest on a loan. De Vitry didn’t care whether the rate was high or low, because the Church’s position was that extracting a single cent of interest was evil. The roots of this revulsion run deep, and across cultures. Vedic law in Ancient India condemned usury, and rulers routinely capped interest rates from Ancient Mesopotamia to Ancient Greece. In Politics, Aristotle described usury as ‘the birth of money from money’, and claimed it was unnatural because money was sterile and should not ‘breed’.

    Judeo-Christian religions cemented the usury taboo. The Old Testament reads: ‘Do not charge a fellow Israelite interest,’ and the Book of Luke advises: ‘[L]ove ye your enemies: do good, and lend, hoping for nothing thereby.’ In the 4th century CE, Christian councils denounced the practice, and by 800, the emperor Charlemagne made the prohibition into law. Accounts of merchants and bankers in the Middle Ages frequently include expressions of anguish over their profits. In his Divine Comedy of the 14th century, the Italian poet Dante Alighieri put the usurers in the seventh circle of Hell; in the case of Reginaldo Scrovegni, one Paduan banker singled out by Dante, his son ended up commissioning a chapel painted with frescoes by Giotto to expiate the family’s sin. Over the ensuing centuries, the philanthropy and patronage of other Italian Renaissance families such as the Medicis was partly inspired by guilt about how they’d profited from charging interest.

    The stigma against moneylending continued well into the 1500s. To understand it, think about your reaction to the idea of a bank making a loan to a business at a 5 per cent interest rate. No problem, right? Now compare that to how you’d feel if your mother lent you money on the same terms. In Biblical times, the typical loan was more like the second case – it wasn’t an arms-length transaction, but a charitable loan from a wealthy man to a neighbour who’d experienced misfortune or had nowhere else to turn. Throughout early Medieval Europe, the local church or a wealthy family was often the only source of capital, especially outside the major commercial centres. Many peasants bought their land by getting mortgages from a monastery. In a world without credit markets and insurance, then, charging interest felt like extorting a friend or family member.

    In Debt: The First 5,000 Years (2011), the anthropologist David Graeber argues that before the advent of money, economic life within a community was a web of mutual debts. People did not behave as self-interested individuals – at least not from the perspective of a single transaction; rather, they would share food, clothes and luxuries, and trust that their peers would repay the favour in return. When we consider these origins of debt and credit – as a system of mutual aid between people who trust each other – it’s no surprise that so many cultures viewed charging interest as morally wrong.

    Moreover, as the economists José Scheinkman and Edward Glaeser have noted, usury laws also acted as a kind of social insurance that reduced inequality. Since charging interest (especially extortionate interest) was condemned, poor people could get emergency loans quite cheaply, and the rich couldn’t easily and passively turn their wealth into more wealth. At least that was the idea – in reality, people often turned to loan sharks, or to wealthy Jews who were quite literally demonised for moneylending.

    Some historians and economists contend that the usury taboo was more about performance than reality. They argue that the moneyed class mostly ignored the prohibition – not least because it called for unrealistic levels of charity from the gentry. Merchants and bankers had all sorts of tactics for disguising the interest payments; one trick was for the parties to agree to use an overpriced exchange rate for the purchase of goods in the future. Or lenders made loans that didn’t pay interest, exactly, but instead promised a share of the profits from the borrower’s business. (This was a loophole, but it also ensured bankers got paid only if their loans benefitted the borrowers.)

    Meanwhile, the Catholic Church played its own part in sowing the seeds of a change of attitude. In the 13th century, it developed the concept of Purgatory – a place that had little basis in scripture but did offer some reassurance to anyone committing the sin of usury each day. ‘Purgatory was just one of the complicitous winks that Christianity sent the usurer’s way,’ wrote the historian Jacques Le Goff in Your Money or Your Life: Economy and Religion in the Middle Ages (1990). ‘The hope of escaping Hell, thanks to Purgatory, permitted the usurer to propel the economy and society of the 13th century ahead towards capitalism.’

    Even while clergy such as Cardinal de Vitry preached fire and brimstone against usury, the Church was increasingly willing to borrow money itself. Debt became essential to fighting wars, which both monarchs and the Pope needed to fund. Europe’s first real private bank had been founded in the 1100s by the Knights Templar, a Catholic military order that fought in the Crusades. The Knights protected pilgrims who travelled to the Holy Land, and this protection included safeguarding their funds by allowing pilgrims to deposit money in Europe and withdraw it in the Holy Land. Over time, the Templars offered a greater range of financial services; one of their loans relied on Crown Jewels as collateral. The Knights Templar disbanded in 1312, but other bankers extended the practice of lending until, by the 1500s, merchants were buying and selling business debts in fairs across Europe.

    Eventually kings, politicians, and business people embraced usury wholesale, and the Church looked the other way. In 1462, Franciscan monks in Italy created the first non-profit pawnshops or monti di pietà (‘banks of piety’), which went on to spread across Europe. The idea was to be like a Grameen Bank in Renaissance Italy – a lender of last resort, displacing loan sharks who extorted desperate borrowers. The Pope went on to approve ever more kinds of financial instruments, until lending with interest was effectively allowed.

    Despite the many loopholes and exceptions, usury laws still had teeth. ‘It would be a mistake to regard the Church’s sweeping prohibition as a sort of Volstead Act respected only by partisans, casually enforced, and lightly regarded,’ write the economic historians Sydney Homer and Richard Sylla in A History of Interest Rates (2005). So why did the prohibition on usury fade away?

    One interpretation is that it was simply dogma – just like the belief that the Sun revolves around the Earth – that diminished in force as the Catholic Church splintered and lost political authority. Consider the Church like a business, whose core product was salvation, the economists Robert B Ekelund and Robert F Hébert have argued. When the Catholic Church held a monopoly in Europe, the clergy could ‘sell’ salvation at high prices – including strict prohibitions and purchased ‘indulgences’, which usurious sinners could buy in order to be absolved. But in the 1500s, during the Reformation, theologians such as Martin Luther denounced these practices. They advocated a more direct relationship with God that did not rely on priests as intermediaries, and founded new Christian movements such as Protestantism. The effect was that of a new company undercutting a monopoly. As Christian factions competed for believers, it led to a faith-based ‘race to the bottom’. And to increase their appeal, sects made fewer demands on believers – which meant weakening their stance on usury.

    Here’s another view on why usury became less sinful: economic development eventually meant it wasn’t worth the trade-off. In 16th-century Europe, the economy was shifting from one defined by local agriculture to centres of commerce such as Florence. Global expansion made loans and investments more profitable, even as gold arriving from South America caused inflation. In these circumstances, the opportunity cost of not lending money grew higher and higher, as Scheinkman and Glaeser have argued.

    In addition, the spread of banking ultimately transformed credit from a personal transaction between neighbours to a competitive, impersonal market. In The Idea of Usury (1949), the sociologist Benjamin Nelson argued that this institutional shift led Europeans to view moneylending more favourably during the Reformation. Luther interpreted Bible passages about usury, especially those that condemned charging interest on the poor, as calls to act generously. Usurers commit a sin, Luther wrote, only when their actions violate the do-unto-others principle – that is, only if ‘they do not want to be treated this way in return by others’. This reciprocity meant merchants and wealthy families were allowed to charge each other interest. Luther asked Christians to offer the needy charity rather than loans – but he still accepted interest rates under 5 per cent.

    Surely we’re well rid of this moralising approach to finance? A world without interest payments would be one in which few people could access the funds they need to attend college, buy a house, or start a business. John Calvin, the French Reformation leader, thought it was immoral that his countrymen raised prices in order to take advantage of a flood of Protestant refugees who arrived in Geneva; but, just as surge pricing can recruit more Uber drivers on New Year’s Eve, we know that high prices also work to send a signal so that goods can flow to where they are needed.

    But this isn’t the full story. The rise of debt wasn’t the Church simply bowing to the inevitable. Members of the clergy played an active role in creating the mindset that allowed usury to become respectable.

    From the 1100s to the 1500s, clergymen known as the Scholastics debated whether lending was truly sinful. The Scholastics were the intellectuals of their day. They studied Roman law, Greek philosophy and Arab science at universities in Paris, Cologne, Vienna and others throughout Europe, and included luminaries such as Thomas Aquinas. They wrote and thought with the nit-picking particularity of lawyers. But despite the dry tone, the Scholastics could sound surprisingly like modern economists. Unlike previous generations of thinkers, who believed that prices should reflect the cost of production, many Scholastics understood the power of supply and demand, and argued that the just price was the market price. In one treatise, the prominent Italian Scholastic cardinal Thomas Cajetan analysed the ethics of how bankers hid interest payments in inflated exchange rates. It was equivalent to a cardinal in 2006 writing knowledgeably about credit-default swaps.

    The Scholastics also recognised the value of taking business risks. Many of them sanctioned commercial loans to be repaid with a portion of profits. As long as the return was not guaranteed, because the venture could fail or collateral was unavailable, lenders deserved to keep the interest, they said. Some clergymen also realised that people who lent money were unable to use it on other profitable ventures. This is a very modern justification for permitting interest: opportunity cost. The price of borrowing money reflects the missed opportunity to invest it profitably elsewhere.

    The Scholastics took finance seriously, but they always viewed it as connected to the domains of justice and natural law. Aquinas was not interested in narrow questions of maximising utility or channelling individual self-interest, as a modern economist might be; he and his peers wanted to know the just way to distribute wealth and how one could ensure economic exchanges were fair. In Summa Theologica (1265-74), for example, Aquinas argued that money’s ‘natural end’ or purpose was exchange. Using money to make money, rather than to facilitate the exchange of goods and services, therefore violated natural law. It was akin to selling wine or wheat separately from the right to consume these products – that is, like selling the same thing twice. ‘To take usury for the lending of money is in itself unjust, because it is a case of selling what is non-existent; and that is manifestly the setting up of an inequality contrary to justice,’ wrote Aquinas.

    The thinking of the Scholastics and other religious leaders was not all admirable. Some clergy refused to budge from the literal words of the Bible, and others appealed to anti-Semitism to denounce usury. But their conversation represented an informed and influential debate – at the highest levels of academia and religion – about the entanglement of ethics, debt, inflation, high finance and monopolies. Where is that sort of thing today?

    The Scholastics never resolved their disputes. Instead, they were replaced by new authorities on ethics and finance. It wasn’t until the rise of neoclassical economics in the 20th century that economics became the supposedly scientific study of self-interest and individual incentives – a domain in which economists do not pass judgment on actors in the market, any more than biologists would judge the ‘morality’ of bees, or engineers the ‘ethics’ of an aqueduct.

    Of course, people today do discuss the ethics of finance. We debate whether bankers deserve lucrative bonuses; we worry about the moral hazard of bank bailouts; we condemn bankers who sell financial instruments that they know will fail. But since so much of the language of economics is amoral, and built on the assumption that everyone acts in their narrow self-interest, demanding just outcomes from finance feels like expecting fair results from war. We’ve lost the instinct that finance and debt are moral affairs all the way down, which is something that the Scholastics understood.

    So what would the Scholastics make of modern finance? Would they admire how efficiently a family’s savings can find productive uses? Or would they decry how developing countries pay more to borrow than rich ones? Would they marvel at our banks’ international reach? Or would they condemn how poor people pay for banking services such as checking accounts that rich people get for free?

    It shouldn’t be so strange for a big bank to hire a theologian such as Miller; what should be strange is that we find it strange. It’s our modern talk of unfettered free markets and shareholder value that’s the anomaly. When Miller talks to bankers and executives, they often tell him that they feel as if what they learn in church or synagogue has no place at work. Even he was embarrassed about using the word ‘calling’ when he told his former co-workers that he was leaving for the seminary.

    But neither secular nor religious authorities offer much guidance to bankers trying to link what they do to some kind of ethical tradition. In seminaries and divinity schools there’s a total lack of attention to the economy and the marketplace, Miller says. ‘Clergy may be quick to throw stones at the latest corporate excess on the front pages,’ he told me, ‘but there is not much constructive work.’ The public criticises bankers for their ethical failings, but the bankers themselves have also been failed by our ethical authorities.

    Anyone interested in reclaiming ethics’ place in the world of finance, however, can build on a several-thousand-year-old foundation. ‘Aristotle, Kant, Bentham – are they dead people who have nothing of interest to offer?’ Miller muses. ‘Or were they on to something? Our economy would be unrecognisable to them. But the questions are still relevant.’

    https://aeon.co/essays/how-did-usury...ctable-finance
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