Is it biblical to charge interest on debt?

In the debate over the Biden administration’s recent move to institute “student loan forgiveness,” some Christians have resurrected past theological condemnations of usury (lending money at interest).

Christians have said and done many things throughout history. I am convinced that Christianity has been a clear net positive for human society, but that does not mean that every Christian opinion or even tradition has been right or good. Some have been pretty bad. I sometimes console myself that some of them, although espoused by Christians, were in fact imports from pagan philosophy. An example is geocentrism. Wear too.

It would have been great if the Protestant Reformation had cleared things up with usury, but the legacy there is ambiguous. John Calvin was more sensible than most, though the temptation to moralism still affected him. Economist Murray Rothbard writes,

Calvin’s main contribution to the question of usury was to have the courage to get rid of prohibition altogether. This son of a prominent city official had nothing but contempt for the Aristotelian argument that money is sterile. A child, he pointed out, knows that money is sterile only when it is locked up somewhere; but who, in their right mind, borrows to keep the money idle? Merchants borrow to make a profit on their purchases, and so the money is then fruitful. As for the Bible, Luke’s famous injunction only commands generosity towards the poor, whereas the Hebrew law of the Old Testament is not binding in modern society. For Calvin, then, usury is perfectly lawful, provided it is not burdened with loans to the poor, who would be harmed by such payment. In addition, any legal maximum must of course be respected. And finally, Calvin argued that no one should operate like a professional moneylender.

The odd result was that by protecting his explicit pro-usury doctrine with a caveat, Calvin in practice converged on the views of scholastics such as Biel, Summenhart, Cajetan, and Eck. Calvin began with a radical theoretical defense of the taking of interests, then surrounded it with reservations; liberal scholastics began with a ban on usury, then nuanced it. But while in practice the two groups converged and the scholastics, in discovering and elaborating exceptions to the prohibition of usury, were theoretically more sophisticated and fruitful, Calvin’s bold break with the formal prohibition was a liberating breakthrough in Western thought and practice. He also cast the responsibility of applying the teachings on usury of Church or State to the conscience of the individual. As Tawney says, “The important feature of his [Calvin’s] discussion on the subject is that it assumes that credit is a normal and inevitable incident in the life of a society. »

On the law of the Old Testament, Calvin was absolutely right. Regulations on inter-Israeli loans were enmeshed in a system of sabbaticals, bans on selling land and rules on slavery. No one is advocating that all agrarian production be stopped every seven years, then for an additional year every fifty years (so no cultivation for two consecutive years). And the land ownership system was based on a history of conquest that cannot and should not be duplicated. Those who advocate the prohibition of usury (which was not forbidden in any case in Israel) are not serious about the Bible. If they were, they should consider banning foreigners from owning land in the United States as an application of biblical justice. No, I am not suggesting that such a policy is Christian. And does not condemn wear and tear either.

Furthermore, Jesus believed that lending money at interest was ethical (Matthew 25:27; Luke 19:23). If I thought it really mattered to people, I would say more about the biblical context. But I don’t think that’s the case.

Usury is only the rent of money. If usury is a sin, so is renting anything else.

Saying that rent is not inherently a sin is not the same as saying that all tenancy agreements are truly in the tenant’s best interest. Nor is it the same as saying that all owners are rights.

Frankly, I have never found a situation in which renting was as beneficial as owning the property. Likewise, being poor will always be a disadvantage of being rich. Legislation will never change this basic fact. Borrowing money is just one important manifestation of this disadvantage.

Your emotional reaction to things like payday loan companies does not justify legislative interventions. You need a reasonable basis to claim that a proposed legislative intervention will actually improve the situation of the people you claim to want to help. Reciting decontextualized statements from the Old Testament, or economic errors from classical philosophy that have been imported into Christian culture, is not enough.

Mark Horne has served as a pastor and worked as a writer. He is the author of Victory According to Mark: An Exposition of the Second Gospel, Why Baptize Babies?JRR Tolkienand Solomon says: Guidelines for Young Men. He is the executive director of Logo Sapiens Communications and the author of SolomonSays.net.

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