26 August 2021

I have odd thoughts when I read scripture. David says that a righteous man does not take money at interest — while many in this world bemoan the low return on their investments, or borrow cheap money forgetting it is not paying the interest but the debt that counts. Ursury, or the demanding of interest on money loans is wrong. We all know that when the interest rates are high: we call it loan sharking. But the seed is rotten, and it makes societies unstable.

St. Thomas Aquinas explains that usurious lending involves selling something which does not exist. This is very counterintuitive to people indoctrinated in modernity, and yet obvious once you’ve set aside modern anti-realism about property and economic value. Aquinas compares it to attempting to sell wine and the consumption of the wine as two separate things.
Imagine that Bob lends Harry $100, Harry lends Fred $100, and Fred lends Bob $100. They each spend the money on beer, and charge 10% interest in the form of a deferred fee. The contracts attempt to entitle each of them to an additional $10 – for a total of $30. This $30 worth of new financial entitlements on the books is not connected to anything ontologically real. The 2008 financial crisis was the result of a usurious network of real estate loans and ultimately circular insurance-like schemes which created this kind of ‘fake’ wealth. All usurious lending involves the creation of fake wealth.

It is very good to avoid debt. It is also good to help people get real property, or to join in ventures and share profits. But here the reformers were wrong in allowing interest payments because they were repelled by the workarounds the casuistry of canon lawyers, and the Rabbinical rule that loans for interest was licit for the gentiles, ignoring the psalm.

The reason is that the charging of interest against an individual will enslave them. Companies and societies won’t starve if all their money goes into paying off creditors and investors: people will

And then, to make it worse, I was distracted by James addressing his letter to the twelve tribes of the dispersion. This is not obvious, as Calvin notes:

When the ten tribes were banished, the Assyrian king placed them in different parts. Afterwards, as it usually happens in the revolutions of kingdoms (such as then took place,) it is very probable that they moved here and there in all directions. And the Jews had been scattered almost unto all quarters of the world. He then wrote and exhorted all those whom he could not personally address, because they had been scattered far and wide. But that he speaks not of the grace of Christ and of faith in him, the reason seems to be this, because he addressed those who had already been rightly taught by others; so that they had need, not so much of doctrine, as of the goads of exhortations.

We know that there were three tribes in Judah: the Levites and priests left the kingdom of Israel (2 Chron 11:13) But that does not explain the 12 tribes. But we do not know who was in Jerusalem. James Did. And he knew how the Jewish nation had been scattered, the Jewish believers included.

At this point I was stuck, so here are the texts.

Psalm 15

A Psalm of David.

15 O Lord, who shall sojourn in your tent?
Who shall dwell on your holy hill?
2 He who walks blamelessly and does what is right
and speaks truth in his heart;
3 who does not slander with his tongue
and does no evil to his neighbour,
nor takes up a reproach against his friend;
4 in whose eyes a vile person is despised,
but who honours those who fear the Lord;
who swears to his own hurt and does not change;
5 who does not put out his money at interest
and does not take a bribe against the innocent.
He who does these things shall never be moved.

James 1:1-8

1 James, a servant of God and of the Lord Jesus Christ,
To the twelve tribes in the Dispersion:

2 Count it all joy, my brothers, when you meet trials of various kinds, 3 for you know that the testing of your faith produces steadfastness. 4 And let steadfastness have its full effect, that you may be perfect and complete, lacking in nothing.

5 If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him. 6 But let him ask in faith, with no doubting, for the one who doubts is like a wave of the sea that is driven and tossed by the wind. 7 For that person must not suppose that he will receive anything from the Lord; 8 he is a double-minded man, unstable in all his ways.

We should not be shocked when there are bad consequences to bad policies. We were warned: I recall the warnings. I recall that we were told there was no slippery slope,

I was told that virtue was not necessary, nor self discipline, nor honour.

All my life I was told these, and they are lies. Lies cannot continue, and the consequences of policies based on lies is an inevitable failure: personal, familial,and societal.

As we live in this world, we have to bear the consequences of them.

But in this we need to look beyond us. God will use such things to train us as surely as lifting iron will make us strong.

And he will bring his church to himself, refined, and will remove the tears: of effort, of grief, of regret and of mourning for what we lost, from our eyes.

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4 months ago

Seems to me that interest is what keeps people from borrowing money if they don’t really need it. Hard to start a business or buy a large item (house) without a loan. But if there were no interest on loans then why not go into debt? Other than personal morality and caution suggesting it is a bad idea. This is why, when my buddy and I are out and he runs out of cash I loan him $50 if he needs it but don’t charge him interest. My dad, however, made a deal with me at one point to help me do some needed renovation and repair on my house, where he loaned me the money at interest. He got the same amount he would have from his investments (so not cutting into his needed retirement funds) and I got a lower rate than I would have from the bank.

Also on the idea of usury, maybe I missed something in reading, but I always thought that was excessively high interest, so called because you took advantage of someone’s high need. If interest itself were a moral problem, then why have a separate word for excessively high interest?