a thesis on usury

A THESIS

ON USURY

Shelby Maddox

5-9-08 Shelby Maddox

The problem of usury has always been a common one, and it is especially pernicious in

our day and age, with high interest rates and credit card companies sapping our income. Through

out the ages, men have grappled with the question, “It is wrong to take interest for

money/property lent?” The purpose of this thesis is to show that there should be a progression of

maturity in our views toward usury. This view of usury is necessary because it causes, not only

problems in the world at large, but also division among the church. The church has always been

exhorted to be wise and help the world: this is also pertinent because of the brother/stranger

relationship involved in the usury question. Usury to a “brother” has always been acknowledged

as wrong, but now we no longer know how to define a “brother.”

Some may think that the Church does not need to meddle in usury because this is an area

of economics, which the State controls. Although a thorough discussion of the Church/State

relationship is beyond the scope of this thesis, suffice it to say that the Church and the State are

co-operational. The Church guides the State, or should guide the State, in matters like this where

the application of God’s law may be needed. But still, isn’t it economics? Yes, but God has laws

for economics, and especially for usury. Therefore, God’s People should interpret this using their

wisdom and knowledge and work alongside the State as it rules.

The progression of maturity, although not recognized by most of the Christian world, is

extremely relevant to everything. It can be seen in the Trinity, with each Person representing a

stage. The progression moves from a learning stage (Priest) to a judging stage (King), and finally

to a counseling stage (Prophet). Among other things, this model shows us that God has a plan for

the world, and that we aren’t going to Hell in a hand basket. We should all be in a progression of

maturity, growing wiser all the time and more able to make our own godly decisions.

As a priest, everything is black and white. You are told what to do and you do it. The

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perfect example of this is the priests of Israel. They had a strict set of rules that they followed to

the letter. The exact steps for each procedure and sacrifice were written down and all they had to

do was follow instructions. Priests are maintenance workers. It does not require any significant

amount of wisdom to be a Priest. It is the easiest and least mature stage, but sad to say, many

people never move beyond it.

Once you show that you can handle the simple responsibilities associated with the Priest,

you move on to become a King. Kings have proven themselves to be faithful as Priests, and now

they have a different focus. They deal with death. Each decision a King must make involved

justice and punishment. They must decide who dies and who lives. This includes the control of

warfare and such activities.

In this stage of maturity, wisdom begins to play a part. Wisdom is partly the ability to

foresee consequences. Kings need this to make their life-or-death decisions. A kingly decision

without wisdom is a dangerous thing, and can lead to unforeseen ramifications.

During this stage, Kings gradually grow in wisdom until they reach the next stage of

Prophet.

Normally when we think of Prophets, we imagine an old man who, well, prophecies.

However, that is the modern view of a Prophet, and it is only part of the truth. Yes, prophets

occasionally can foresee the future, but that was only true of those prophets who came directly

from God.

A prophet leads others around him in wisdom. He is like a man, who, after reaching the

top of a cliff, throws a rope down to the others beneath him to help them up. The focus of a

prophet is to give counsel and advice. They are wise, and so can aid and strengthen kings who

need wisdom.

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The other important function of a Prophet is to mediate, through council. Christ is our

Mediator in His capacity as Prophet.

The prophets that usually come to our minds are the ancient prophets of the Bible. These

were no different from any other prophets, except that the King they counseled was God himself.

Many times in the Old Testament we read of Prophets turning the wrath of God away from His

People, like when Moses pleaded with God for the Israelites on Mount Sinai. They offered him

advice and he accepted it. This does not mean that a man, though a Prophet, is greater than God.

The fact of the matter is that God asks for their opinion and respects it. We are, through Christ,

the mediators for the world.

Original sin has its basis on the principles of this progression. Original sin is reaching for

something that you are not mature enough for. This tells us that some things are sins in some

stages but not in others.

The progression of maturity applied to usury, shows us when usury is sinful. This would

enable us to be godly businessmen and provide opportunities to bless the community around us.

Usury has been argued over and abused for too long. It is time the Church applied her knowledge

to this area, and others where her guidance is needed. Our current understanding of usury is

immature. At this point in time, we are indiscriminate to whom we charge usury. We need to be

wise, to be prophets in this area as we are called to be.

Before any more steps are taken, an important question needs to be answered. What does

usury mean? This is extremely essential, because the way we view something as right or wrong

depends largely on our definition. Because of this, the definition of usury has been tampered

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with, stretched, and beat almost to death over the centuries.

The dictionary definition of usury reflects the modern mindset and acceptance of usury.

“usury n. the practice of lending money at unreasonably high rates of

interest. ▪ archaic interest at such rates.

- ORIGIN ME: from Anglo-Norman Fr. usurie, or from med. L. usuria,

from L. usura, from usus, [‘use’].” 1

Notice that usury now officially means the practice, not the actual act. When the word

“usury” is used in this paper, it will refer to the second “archaic” definition, as regards interest

rates. Since the Latin word usus, means “use,” this can be translated and taken to mean a usage

tax, a tax charged for the use of money, land, clothing, etc.

The usury referred to in the Bible is defined a little differently. The passage people

usually mean when they talk about the usury prohibition is Exodus 22:25:

“If you lend money to any of My people that is poor by you, you shall

not be to him as a usurer, neither shall you lay upon him usury.” 2

The word usury here, in the Hebrew, is נשך neshek, which means, literally, “bite.” This is

used to refer to usury because usury gives a backlash, a sting, a bite to the one who borrows the

money.

There is another word used in relation to neshek in Leviticus.

“Take you no usury of [your poor brother], or increase: but fear your

God; that your brother may live with you. You shall not give him your money

upon usury, nor lend him your food for increase.” 3

The bracketed portion refers to the previous verse, which speaks against taking advantage 1 Concise Oxford English Dictionary, 11th Ed.

2 Exodus 22:25, KJV

3 Leviticus 25:36 -7, KJV

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of the poor man. This verse builds on that concept.

The word translated increase is ותרבית vetarbit, which means, “increase.” This is used in

conjunction with the condemnation of usury: “Take no…usury or increase…” John Calvin sums

this up excellently.

“The name neshec, which is derived from biting, sounded badly; since

then no one chose to be likened to a hungry dog, who fed himself by biting

others, some escape from the reproach was sought; and they called whatever

gain they received beyond the capital, therbith, as being an increase. But God, in

order to prevent such deception, unites the two words (Lev. xxxv.36) and

condemns the increase as well as the biting.” 4

This passage is in place to prevent the oppression of the poor. Both the Exodus and the

Leviticus passages have a section referring explicitly to the poor. A poor man cannot pay interest

on a loan. What’s more, this poor man is your brother. We are commanded to love our brothers.

“Biting” your brother financially is not love: it is hate. The command here condemns interest on

a loan paid to a poor man, as well as any profit made off of him any other way. In other words,

do not take advantage of your brother when he has fallen on hard times.

Different scholars have defined usury different ways many different times. Two of these

scholars are S. C. Mooney and Gary North, both leaders in their field and especially in this area.

Mooney argues that usury is a tax charged for the use of property alone. He suggests that

the word for “money” in these passages means physical metal, for the word is literally “silver.”

This, he says, fits with the command not to charge usury on food, drink, etc.

“The first thing that must be noted in this statement is that the word

‘money’ in this verse is given in translation of a word that actually means

‘silver.’ The economic context of this occasion was that which has been termed

4 John Calvin, Commentaries on the Four Last Books of Moses, Vol. III, p.130

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a ‘money economy.’ Silver and gold in lumps – not coins had come into service

as media for exchange. Anticipated in the rule was a loan given in media, which

still was quite different from current loans. This rule, then, was to prohibit

charging a fee for the use of property loaned.” 5

He does not think that usury refers to money loans but to property loans. However, this

means that interest rates on money loans are unaccounted for by his reckoning.

Gary North, on the other hand, argues for usury as a synonym for interest. He believes

that usury, or interest, is prohibited in the case of the poor man. He is believes that usury, a

positive interest rate, is essential to the economic growth of a culture/community. He addresses

Mooney’s arguments in his Tools of Dominion, and claims that Mooney fails to work out the

conclusions and consequences of his economy. Part of his argument is as follows:

“…what [Mr. Mooney] really means is that it is illegal biblically to

seek a positive rate of return by loaning someone a house, and it is also illegal

biblically to rent him a house. You are morally obligated to give him the use of

the loan, interest-free, or the use of the house, rent-free. This is the economics of

love [, says Mooney]. It is also a classic crank prescription for creating a society

of homeless people.” 6

Because of the way the words neshek and tarbit are used in the context of usury, it would

appear that usury as understood in the Bible is a tax charged to the poor for the use of something,

be it money or else, which hurts the poor financially to the gain of the lender.

Jeremy Bentham, a famous 18th century supporter of usury, defined it this way:

“I know of but two definitions that can possibly be given of usury: one

5 S. C. Mooney, Usury: Destroyer of Nations, pg. 94

6 Gary North, Tools of Dominion, Appendix G, pg. 1183-4

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is, the taking of a greater interest than the law allows of: this may be stiled [sic]

the political or legal definition. The other is the taking of a greater interest than

it is usual for men to give and take: this may be stiled [sic] the moral one.” 7

Bentham is known most of all for his series of letters entitled Defense of Usury, from

which the above quote is taken. These will be discussed in detail later. He also is credited for the

idea of utilitarianism.

His definition places a distinction between the moral and political versions of usury. This,

we see, is generally true. What we may call usury may, in fact, be condoned by law, whatever we

might think. This moral aspect of usury would, in an ideal Christian society, help define the

political aspect. However, it would have to be backed by wisdom. Since it is, apparently, left to

our own discernment, we need the ability to think things through both fairly and wisely.

It is important to note that usury is listed in several places in conjunction with related

sins. Following the old aphorism, “Context is king,” this can help us determine what the Jews

thought of when they heard of usury.

There are three places in the Old Testament where usury is placed among other sins:

Psalm 15 – “ 1 Yahweh, who shall abide in your tabernacle? Who shall

dwell in your holy mountain? 2 He who walks uprightly, and works

righteousness, and speaks the truth in his heart. 3 He who does not backbite with

his tongue, nor does evil to his neighbor, nor takes up a reproach against his

neighbor. 4 In whose eyes a vile person is condemned; but he honors those that

fear Yahweh. He who swears to his own hurt, and does not change. 5 He who

does not put out his money to usury, nor takes reward against the innocent. He

that does these things shall never be moved.” (Italics added)

7 Jeremy Bentham, Defense of Usury, II.3

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This psalm is a chiasm of seven parts:

A. Who dwells with the Lord?B. He who is righteous

C. He who does not do evil to his neighborD. He condemns evil and loves fellow God-fearers

C’. He keeps his wordB’. He who does not do usury

A’. This man will not be moved

In this structure, usury is contrasted to righteousness.

This passage exemplifies the way of the righteous man. In the section about usury, it is

listed next to “[taking] reward against the innocent” in typical proverbial repetition. This is the

same thing said a different way, for the message to sink in, as it were. Usury is taking something

from someone who is innocent and does not owe anything. Everyone is familiar with the story of

Robin Hood, in which King John is oppressing the people by taxes. Although this is not usury

specifically, it is taking “reward against the innocent.” Even though some taxes are justifiable,

heavy taxation such as this is forcing the people to pay more than they are bound to. Some

people today call it “stealing.” This could be construed to mean that a man is bound to pay back

a loan, no more, no less. However, this is where discretion is necessary. Whether to exact usury

or not depends on the “innocence” of the party involved, it seems.

Innocence here means that the borrower is exempt from usury, for he is a poor man who

is poor under the law. This man is not “guilty,” that is, he cannot be charged usury. He does not

owe anything. If he is not exempt under the law, he is obliged to pay the lender for the use of his

money.

All this being said, keep in mind that these passages show the Old Testament view of

usury.

Proverbs 28:8 – “He who by usury and unjust gain increases his

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substance, he shall gather it for him that will pity the poor.”

Here usury is listed side by side with “unjust gain.” This is another proverbial repetition,

and puts usury in the same frame of mind as stealing. When a Jew thought of usury, he would

think of stealing. If the gain is not unjust then it is acceptable and encouraged. A just gain would

provide restitution for the one giving the money or product, whether by labor or by selling

something. If you go to Wal-Mart and buy a gallon of milk for $3.50, that is a just gain on both

sides. But if you run away with the milk without paying, you have committed an unjust gain.

Ezekiel 18 – “ 8 He who has not given forth on usury, nor has taken

increase, who has withdrawn his hand from iniquity, has executed true judgment

between man and man, 9 has walked in My Statues, and has kept my judgments,

to deal truly; he is just, he shall surely live, says the Lord Yahweh.”

Here usury, and especially increase thereof, is forbidden. From the language of the

passage, it is evident that if these sins are committed, you have not walked in the Lord’s statues,

kept his judgments, or dealt truly with other men. Therefore, increase by usury is dealing falsely

with your neighbor. It is lying, cheating, stealing, and ungodly.

Ezekiel 22 – “ 12 In you they have taken gifts to shed blood, you have

taken usury and increase, and you have greedily gained of your neighbors by

extortion, and have forgotten me, says the Lord Yahweh. 13 Behold. Therefore I

have smitten my hand at your dishonest gain, which you have made, and at your

blood which has been in the midst of you.”

Once again usury is listed with stealing, this time in the form of extortion. It’s a list of

dishonest gain, and is in the same set of visions as Ezekiel 18 (above). It is also listed with taking

a bribe for murder. The message: unjust gain by usury is as bad as murder. The Lord will punish

the extortionists, the murderers, and the unjust usurers.

Throughout all this, a case may be made that usury is sinful in se in every case. But this is

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not a full application of what we know of God and his purposes. For example, eating pig was

forbidden until after the resurrection. Now, it is lawful (and recommended by some) to throw on

a little BBQ now and then. Physical circumcision is no longer required, and neither are the laws

of cleanliness. This is not to say that the entire OT is irrelevant. Rather, the requirements have

been revised. We no longer need physical circumcision as a mark of the covenant, because we

have baptism. Rather, we have circumcision of the heart, Paul tells us.

My point is to prove that usury is not wrong in every context. Sometimes, it is unlawful

and wicked. But in other cases, it is perfectly fine. Wisdom is needed to distinguish between

these two types of situations. And this is where the maturity/wisdom progression comes in.

All that I hope to have established at this time is, in the Old Testament, usury is an unjust

tax charged to the poor for the use of a substance.

Moving forward in history, we come to Jesus. He speaks of usury favorably in the

parable of the Ten Talents, which occurs in Matthew and Luke.

“You should have given my money to the exchangers, and then at my

coming I should have received my own with usury.” (Matthew 25:27)

Is Jesus condoning abuse of the poor here? All through the OT, usury against the poor

has been forbidden. And now, the Master (a picture of Jesus) is while not advising usury,

recognizes this practice as lawful.

What we must understand here is that Jesus is not condoning usury against the poor. He

is speaking of putting the money out at interest, lawfully. There is nothing unlawful or wicked

involved here as far as we know.

This means that there is not a blanket ban on usury, but rather, now, a selective ban. Now

in the maturity progression, some forms of usury are all right, and others are not. The theme of

this paper is to prove that these laws have been modified in maturity.

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There is no doubt that the world’s view of usury has changed over the course of history.

We have seen how the ancient Jews viewed it, but, as the purpose of this thesis is to prove a

progression through usury, the history of usury is necessary to review.

To pause for a second, the following discourse does not condone any of the actions of

sinful leaders. Apart from the Jews and a few select others, the ancient world did not have God’s

law in their hearts, and their laws to a certain extent reflect that. However, God sometimes uses

sinful men to accomplish His Works, and so it is helpful to look at the major views of usury,

both righteous and sinful.

In the ancient world, as we have seen, usury was generally condemned. Not only in

Israel, but also in the other major civilizations at that time. While many of them did not actually

forbid usury, the concept of usury or interest was at least limited in their laws.

Besides the Jews, the Hindus were the first to have laws concerning usury. Their law, the

Damdupat, limited the return to the full amount of the loan. In other words, you could not charge

more than the original amount.

Greece especially despised it. During the time of Aristotle, the Greek economy crashed as

a result of usury. The farmers were borrowing money at incredibly high interest rates. As a

result, they were no longer able to support themselves.

Solon, the great Greek politician, realized the effects of usury and did something akin to a

Year of Jubilee. He freed all those who had become enslaved as a result of debt, and he canceled

all existing debts. While he did not forbid usury, he did place limits on its power.

In Republican Rome, which was a little more tolerant in these regards, attempts were

made to outlaw usury. They did not recognize interest until 88 BC, but they did allow “rent” paid

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on a money loan. They understood that the parties are paying for the use of the money itself.

Money like this was treated as property. It was banned in the Lex Genucia in 340 BC, but many

found and exploited loopholes in the law. Under Julius Caesar, usury was not banned, but a

maximum rate of 12% was set. Justinian would later lower this rate significantly to 4%-8% in his

6th Century Code.

Aristotle was one of the first to write about usury, especially in response to the Greek

economy crash. He says that usury is sinful and should not be practiced because money in se

does not make more money. Cows in se make more cows, but money in and of itself is sterile.

Therefore, to get more money from money is unnatural.

After the time of Christ, usury was becoming more and more limited. The growing

Church was going into places where previously usury of some form had been allowed. The

debates raged as to whether it was sinful or not.

In the 4th century, the Church banned the clergy from partaking in usury. By the 5th

century, they had extended this ban to include the laity as well. Charlemagne again banned it

completely in 806. Pope Innocent IV discusses the dangers of usury in the 13th century, saying

that it was harmful to farmers. Given the choice, he said, most rich people would put their money

out to usury rather than invest in agriculture. Without support, the farmers would fall behind on

production and the whole nation would suffer.

In the 7th century, the Qur’an and Muslim law forbade it completely.

The Synod of Paris (850) and the 2nd Lateran Council (1139) threatened to

excommunicate the unrepentant usurers. In 1311, Pope Clement V put it under an absolute,

official ban of the Roman Church. This was further reinforced by the Scholastics later in the

Renaissance. They believed that the works of the Greek philosophers should be applied to

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Christianity. They found Aristotle’s works on the subject and therefore condemned usury on the

same grounds.

At this time, it can be seen how the usury prohibition slowly is becoming obsolete.

However, Thomas Aquinas and the Scholastics agreed to allow risk loans. These are

loans where the lender is at risk of losing his money as well as the borrower. This made it

possible for businessmen to get legal loans, and for the lenders to make profits off them, as long

as they shared in the risk.

Aquinas addresses the problem of usury in his Summa Theologica8. There are seven

arguments that men commonly use in support of usury.

1. Jesus spoke of himself as taking money back with usury.

2. Some form of usury is allowed in the Law, i.e., usury to strangers.

3. Civil law allows it.

4. “Further, the counsels are not binding under sin. But, among other counsels we find

(Luke 6:35): "Lend, hoping for nothing thereby." Therefore it is not a sin to take usury.”9

5. It is not sinful to accept a price for doing something you are not bound to do.

6. Usury is exacted on the material involved (i.e., silver or gold as metals), not the money.

7. If the usury is freely given back with the loan, it’s fine to accept it.

His answer is as follows:

“To take usury for money lent is unjust in itself, because this is to sell

what does not exist, and this evidently leads to inequality which is contrary to

justice. On [sic] order to make this evident, we must observe that there are

certain things the use of which consists in their consumption: thus we consume

wine when we use it for drink and we consume wheat when we use it for food.

8 Thomas Aquinas, Summa Theologica, Question 78

9 IBID, Question 78, Art. 1, Objection 4

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Wherefore in such like things the use of the thing must not be reckoned apart

from the thing itself…

“…He commits an injustice who lends wine or wheat, and asks for

double payment, viz. one, the return of the thing in equal measure, the other, the

price of the use, which is called usury.

“On the other hand, there are things the use of which does not consist

in their consumption: thus to use a house is to dwell in it, not to destroy it.

“Now money, according to the Philosopher [Aristotle] (Ethic. v, 5;

Polit. i, 3) was invented chiefly for the purpose of exchange: and consequently

the proper and principal use of money is its consumption or alienation whereby

it is sunk in exchange. Hence it is by its very nature unlawful to take payment

for the use of money lent, which payment is known as usury: and just as a man

is bound to restore other ill-gotten goods, so is he bound to restore the money

which he has taken in usury.” 10

He then answers each objection in turn:

1. “In this passage usury must be taken figuratively for the increase of spiritual goods which

God exacts from us, for He wishes us ever to advance in the goods which we receive

from Him: and this is for our own profit not for His.” 11

2. We are to treat all men as our brothers.

3. Civil law is not always godly.

4. We should not seek profit from lending.

5. Repayment is allowed, but not more than was lent.

6. The principle use of this silver or a gold object is not in their consumption, like money is.

7. No one gives usury back willingly.

10 IBID, Question 78, Answer to Art. 1

11 IBID, Question 78, Answer to Objection 1

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There are three further articles after this, discussing righteous loans and repayment, but

this is the one that deals with whether usury is a sin or not.

So far, it appeared that usury was banned for good. However, the Reformation was right

around the corner. Many were finding loopholes in the usury prohibition by the church, and

some were clamoring for the free practice of usury.

In 1515, four men attempted to get rid of the usury prohibition for good. Jean Gerson,

Gabriel Biel, Conrad Summenhardt, and his student John Eck published Tractates contractu

quinque de centum. This paper proposed a maximum rate of 5% on all interest loans. Although

there were a few who opposed this paper, most people welcomed the new views, and by 1516,

usurers had opened shop all across the country.

Martin Luther, Eck’s great enemy, of course disagreed with him on this point. But he did

say that interest would be permissible if the profits were used to help the poor, fatherless, and

widows. He violently condemned all other forms of usury.

Luther’s friend Phillip Melanchthon, however, agreed with Eck that usury was fine if no

harm was meant or done by the usurer.

Theodore Beza was also strongly against usury of any form.

But the final blow came just 30 years after Eck published Tractates contractu quinque de

centum, in 1545, when John Calvin wrote a letter on usury, entitled De Usuris Responsum. This

letter, as the title implies, was a response to the problem of usury. It is unique in that it addresses

both sides of the usury issue, and not just the positives or negatives. What many people do not

realize, or even recognize, is that Calvin looked at both sides of usury: the side that is sinful, and

the side that is perfectly legitimate. He was the first of the reformers to do so.

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He first says that usury is not a black and white issue. If usury is banned and condemned

as evil, “tighter fetters are imposed on the conscience than the Lord himself would wish.” On the

other hand, if you allow usury, sinful men will immediately seize the opportunity without

restraint.

Also, usury is not “wholly condemned” by Scripture. The comment of Christ, “Lend,

hoping for nothing in return,” does not mean that we are never to hold other men on interest. It is

to prevent the oppression of the poor by saying that interest is not always necessary in every

single case.

Even though usury is not always a bad thing, it is viewed as such because so many sinful

men abuse it. When usury is allowed, cruelty and oppression inevitably follow. But a Christian

form of usury is not cruel like this, and may be allowed. However, it is “very rare for a man to be

honest and yet a usurer.”

“It is said, ‘Money does not beget money.’ What does the sea beget?

What does a house from the letting [renting] of which I receive a rent? Is money

born from the roofs and walls? But on the other hand both the earth produces

and something is brought from the sea, which afterward produces money, and

the convenience of a house can be bought and sold for money…

“This will be made clearer by an example. Let us imagine a rich man

with such large possessions in farms and rents, but with little money. Another

man not so rich, nor with such large possessions as the first, but has more ready

money. The latter begin about to buy a farm with his won money, is asked by

the wealthier for a loan. He who makes the loan may stipulate for a rent or

interest for his money and further that the farm nay be mortgaged to him until

the principal is paid, but until it is paid, he will be content with the interest or

usury on the loan. Why then shall this contract with a mortgage, but only for the

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profit of the money, be condemned, when a much harsher, it may be, of leasing

or renting a farm at a large annual rent, is approved?” 12

His conclusion is that usury is not wrong in all contexts, but must be governed by our

consciousness and wisdom.

This is not the only place he speaks of usury. He preached several sermons on it during

his series on Deuteronomy, and elsewhere lists seven instances where usury, or interest, is

sinful13.

Several other reformers took up this letter and his other work and expanded on it, among

them Charles du Moulin and Domingo de Soto.

By the 1550s, John Eck’s views had been accepted. Intentions of the parties would

determine the legality of interest loans. This gradually shifted the responsibility of catching these

“lawbreaking loans” from the state and the church to the individual’s conscience.

In 1624, the English Act against Usury had been put into action. This was a move against

excessively high interest rates. The forerunner of modern usury laws, this lowered the maximum

rate of return on money loans to 8% nationwide. Several theologians, most notably Gerard de

Malyne and Thomas Mun, held that usury was interest charged against the poor by pawnbrokers

to sap them of their possessions. Many were expressing views on the subject while recognizing

that usury proper, whatever that may be, is outlawed in the Bible by God. Claudius Salamis and

John Locke said that money could, contra what Aristotle held, be rented.

In 1682, William Petty wrote Quantulumcunque (Concerning Money). This book

redefined usury as “a reward for forbearing the use of your own money for a term of time agreed

12 John Calvin, De Usuris Responsum (1545)

13 Calvin also addresses the issue of the two Hebrew words for usury, neshek and tarbit

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upon, whatsoever need your self may have of it in the meanwhile.” 14

Then in 1787, Jeremy Bentham15 wrote A Defense of Usury as a series of letters to his

friend Crichoff. These letters would completely redefine the way the world thought of usury. It

was he who introduced the modern notion of usury as interest above the legal rate: “the taking of

a greater interest than the law allows...(or) the taking of greater interest than is usual.”

The Defense of Usury is a series of 13 letters. The first is an explanation of his purpose,

which he sums up in the following words:

“In a word, the proposition I have been accustomed to lay down to

myself on this subject is the following one, viz. that no man of ripe years and of

sound mind, acting freely, and with his eyes open, ought to be hindered, with a

view to his advantage, from making such bargain, in the way of obtaining

money, as he thinks fit: nor, (what is a necessary consequence) any body

hindered from supplying him, upon any terms he thinks proper to accede to. ” 16

In essence, he says that anti-usury laws restrain freedom and conscience, and never end

up doing any good anyway.

Letter II holds the definition of usury that has become accepted today.

“I know of but two definitions that can possibly be given of usury: one

is, the taking of a greater interest than the law allows of: this may be stiled [sic]

the political or legal definition. The other is the taking of a greater interest than

it is usual for men to give and take: this may be stiled [sic] the moral one: and

this, where the law has not interfered, is plainly enough the only one.” 17

He also mentions one of his close friends, Sir William Blackstone. Blackstone accepted 14 William Petty, Quantulumcunque (Concerning Money) (1682)

15 It is worth noting that Bentham is the father of modern utilitarianism

16 Jeremy Bentham, A Defense of Usury, I.3

17 Bentham, IBID, II.3

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usury on the grounds that it was compensation for risk:

“To demand an exorbitant price is equally contrary to conscience, for

the loan of a horse, or for the loan of a sum of money: but a reasonable

equivalent for the temporary inconvenience, which the owner may feel by the

want of it, and for the hazard of his losing it entirely, is not more immoral in one

case than in the other.” 18

John Whipple, a major player in the usury debate, wrote a The Importance of Usury Laws

- An Answer To Jeremy Bentham in 1836. He was strongly opposed against usury, and made the

following statement in his book:

“If 5 English pennies ... had been ... at 5 per cent compound interest

from the beginning of the Christian era until the present time, it would amount

in gold of standard fineness to 32,366,648,157 spheres of gold each eight

thousand miles in diameter, or as large as the earth.” 19

In 1903, Calvin Elliot wrote Usury: A Scriptural, Ethical, and Economic View. This

book, published by the Anti-Usury League, shows that usury is wrong from the three standpoints

mentioned in the title: Scriptural, ethical, and economic.

Until 1981, most of the United States imposed restrictions on interest. After 1981,

however, these restrictions were removed as part of the Nixon economic revolution. In essence,

usury became legal. Sam Smith, editor of UNDERNEWS, puts it like this:

“The media did not report this story, the politicians did not deal with it,

and the banks got away with murder. This is not your average political or

economic change; it altered views of fair interest rates going back to ancient

times.” 20

18 IBID, IX.4

19 Whipple, Free Trade in Money

20 Sam Smith, http://www.prorev.com/2007/04/hidden-causes-defining-and-banning.htm

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Now that we have seen the general progression of the views and application of usury and

related laws, it is time to show how the maturity progression can be applied to this. But first it is

necessary to review in a little bit more depth the Maturity Progression.

The first stage, as you may remember, is the Priest. This stage is one where you don’t

take the responsibility of deciding right or wrong. Right and wrong are black and white. There is

no in-between. As relates especially to God, priests perform the commands of God.

The King is the second stage, of judgment. A king needs wisdom to judge. Sometimes

things are not black and white. Kings must make tough decisions. True kings judge their subjects

according to God’s law. This applied to usury mean that judgments must be made on loans and

interest.

The third and last stage, the Prophet, is the epitome of wisdom. They give advice to kings

and help them along. Prophets are the counselors of God, the ones who are in God’s inner circle,

the ones who guide young kings in the way they should go. A prophet is one who sees the will of

God and relates it to others. The prophetic stage applied to usury is a stage where we have

learned enough about usury to counsel others in it.

Some people may say that, because the Mosaic Laws were for a priestly age, they no

longer apply to us. However, they are just as important for us to follow, even though they are the

same laws. The laws themselves have not changed. Our perception and application of those laws,

through wisdom, has changed.

This progression of maturity can be applied to usury in two different understandings. The

general application refers to the progression of maturity through history. The previous sections

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have dealt with the history of usury; now we can see how this shows the progression of maturity.

The Priest stage can be seen in the original prohibition to the Israelites. It was a black and

white issue to them. Many other civilizations, as we have seen, came to the same conclusions

over a period of time.

The Kingly stage began during the periods of the Middle Ages and the Renaissance. This

was the period of the Scholastics during which usury started to become accepted.

The Prophetic stage is a little more difficult. Although some credit must be given to

Calvin, Bentham, and many others for ushering in the new age of usury, there is no denying that

the form of usury we have today is ungodly and greedy.

It appears that we have abandoned the wisdom aspect of usury in this “new age,” and,

instead of growing in maturity, we have done a backslide. We are now immature and

indiscriminate. We need to recover the wisdom that we have lost and apply it again to usury.

The second application, the personal, refers to the progression of maturity by us as

individuals as we grow in wisdom. This progression varies from person to person, and is

independent of the general application. This means that not every person is mature enough to

handle the responsibility of higher stages of usury. Even though the world may be in the

Prophetic stage, a certain person may be immature and may be in just the Priestly stage.

The personal stage, of course, applies to each individual person. We cannot say for

certain what stage any one person is in. If you cannot discern when to hold on interest or not, you

don’t need to be doing it at all.

However, the question still remains: when is usury not sinful? This question must be

approached prophetically, with wisdom. We have seen through the laws of Moses that usury is

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forbidden to a poor brother. But now in the New Covenant, the definition of a brother have been

changed and expanded.

Gary North deals with this question in his book Deuteronomy: An Economic

Commentary. His definition of brother is “a person who publicly confesses faith in the God of

the Bible and who had subordinated himself to the covenanted ecclesiastical community by

means of an oath-seal.”21 Therefore, anyone who confesses Christ is a brother.

If usury is forbidden to poor brothers, then where is usury allowed? North here introduces

the concept of the business loan and the charitable loan. A business loan is a loan where the

money is not absolutely necessary. The borrower may want to build a new house, or start a

project, or expand his business. While those are all desirable things, they are not necessary for

survival. This kind of loan can be given on usury, or interest. That being said, however, a

ridiculously high interest rate is ungodly. Just because this loan is “business” does not give the

right to go wild with the rates. A moderate rate is allowed, but nothing exorbitant.

The charitable loan, on the other hand, is in effect a donation, loan-free. The borrower

here needs the money desperately, for food, clothing, and other necessities. He does not have any

extra money, so usury would be cruel in this case, and the chance that he will even be able to pay

back the capital is minimal. This is the type of loan Christ is referring to when He says, “Lend,

hoping for nothing in return.” However, failure to repay this loan under the Old Covenant

required a maximum six years of servitude to make the debt good.

To qualify for a charitable loan, you must be poor under the law. There are many

definitions of poverty, but I will use the following: if you are not making enough money to pay

for the necessities of life, e.g., food, clothing, shelter, you are “poor under the law.” To go by the

old adage: if your income is less than your outgo, your income will be your downfall.

21 North, Deuteronomy, Chap. 56, pg. 879

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This poor man is the poor man we are commanded to help and forbidden to oppress. If a

poor man needs a loan to pay for necessities, he is not going to be able to pay back more than the

capital. And even if he scrapes up the capital, he is not required to pay it back. As mentioned

above, he could repay this debt by a form of slavery, called in this case indentured servitude. He

was required to serve until the next year of release, up to six years. If the loan was taken as a

business loan on interest, the period of servitude was much greater, up to forty-nine years (Lev.

25:39-41).

“The presence of jubilee-bondage loans in addition to sabbatical year-

bondage loans indicates that there were commercial loans in Israel If the

interest-bearing commercial debt contract placed [the borrower] at risk of

bondage, then by forfeiting payment on the loan, the debtor placed himself in a

much longer term of bondage…The collateral was the income stream of the land

and even the individual for up to forty-nine years [, or the next jubilee year].” 22

Not only the service of the individual could be required, but also the total income of all

his holdings.

Although the distinction between business loans and charity loans seems pretty clear-cut,

when to give out on either is not. One needs wisdom to know the righteous thing to do in these

situations. For example, if a poor man comes in and wants a loan to start a small business, what

do you do? That will depend on the situation, but it will require wisdom to think through and

help your poor brother. Is he really poor? Is this new business necessary, or is it just a wild

fancy?

As an aside point, this view of usury, and by extension banking in general, is very

personal. You have to really know your customer to really serve him well.22 North, IBID, Chap. 56, pg. 883

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As you may have noticed, interest rates are climbing through the roof and don’t show any

sign of stopping. This is especially noticeable in the States after 1981, since interest rate controls

were no longer enforced. People are forced to spend more and more money that they don’t even

have for credit cards, automobiles, mortgages and other sundry money sappers. The ancient

Greeks all wound up enslaved for their usury habits. We need to rethink our views and practices

of usury with wisdom, and be Prophets are we are called to be, so that we do not become slaves

to one another.

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a thesis on usury

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