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Usury originally was the charging of interest on loans (any interest) or a fee to for the use of money. It actually became an offense to practice usury in 1179 that was punishable by excommunication, and later by death, until the 16th century with the increased need for mercenaries and by Catholic rulers in response to Protestants' abrogation of usury laws. As charging interest became more accepted, it later evolved to the charging of excessive interest on loans, even if many people view the high interest rates on items such as credit cards to be acceptable. Such risky and shady lending disproportionately affects those of low socioeconomic status.
Prohibition of interest
There are two main reasons why money is lent, it may be borrowed for to pay for capital goods or to use as working capital, as in modern business, or it may be borrowed by a person who requires it to pay for everyday needs in the past or future. In ancient societies capital goods did not really exist in the way they do in modern societies, and the greater part of borrowing was for the personal needs of the less wise or fortunate, who needed money, which came from the more fortunate or wise, who had it. This created an ethical problem, as lending seemed both to fund the profligacy of the unwise and made the unfortunate exploitable to the more fortunate.:12 It was only with the introduction of more modern practices of commerce and the development of machines for production that lending was seen as beneficial to both lender and borrower.
- Exodus 22:25 — If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.
- Leviticus 25:36 — Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee.
- Leviticus 25:37 — Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.
- Deuteronomy 23:19 — Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
- Deuteronomy 23:20 — Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.
Note also that there is no low point beneath which the taking of interest is no longer usury: even 1% is too much:
- Nehemiah 5:11 — Restore, I pray you, to them, even this day, their lands, their vineyards, their oliveyards, and their houses, also the hundredth part of the money, and of the corn, the wine, and the oil, that ye exact of them.
Then the New Testament further reinforced the point:
- Luke 19:23 — Finally the master said to him 'Why then didn't you put my money on deposit, so that when I came back, I could have collected it with interest?'
- (The slave in this story is apocryphally said to have responded, "They wouldn't let me open an account without at least 200 pieces of silver.")
- Matthew 25:27 _ "Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury."
- Luke 19:22-23 — "…Out of thine own mouth will I judge thee, thou wicked servant. Thou knewest that I was an austere man, taking up that I laid not down, and reaping that I did not sow. Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?"
Ribā is an Arabic term used in the Qur'an that usually translated to English as usury. It appears in:
Qur'an 2:275-278 — "Those who swallow usury will not rise, except as someone driven mad by Satan's touch. That is because they say, “Commerce is like usury.” But God has permitted commerce, and has forbidden usury. Whoever, on receiving advice from his Lord, refrains, may keep his past earnings, and his case rests with God. But whoever resumes—these are the dwellers of the Fire, wherein they will abide forever. God condemns usury, and He blesses charities. God does not love any sinful ingrate. Those who believe, and do good deeds, and pray regularly, and give charity—they will have their reward with their Lord; they will have no fear, nor shall they grieve. O you who believe! Fear God, and forgo what remains of usury, if you are believers.
Qur'an 4:161 — And for their taking usury, although they were forbidden it; and for their consuming people's wealth dishonestly. We have prepared for the faithless among them a painful torment.
The Qur'an does not actually define what constitutes usury.
In 2021, to combat the high inflation rate in Turkey, Islamist autocratic President Recep Tayyip Erdoğan decided to cut interest rates, citing the Islamic prohibition on usury. The announcement resulted in a further plunge of the value of the Turkish Lira in international trading because Erdoğan did the exact opposite of what economists recommend. Erdoğan also ignored the fact the real interest rate (the interest rate factoring in inflation) was actually negative when he made this decision. The inflation rate at the time of Erdoğan's decision was 21%, and expected to rise to 30% in 2022. The Turkish central bank interest rate was only 14% shortly after the announcement. The negative rate meant that one would in principle borrow money from a Turkish bank, immediately exchange it for a stable currency, then slowly pay the money back as the Lira continues to depreciate against the stable currency, thus making a profit.
Role in antisemitism
The church banned the charging of interest by Christians in 1179. However, Jews had no religious laws forbidding them from charging interest to non-Jews and people still demanded loans. At the same time Jews were being pushed out of many jobs and into professions considered marginal, such as money lenders and collectors, while being taxed heavily. Peasants hated the "front men" of their lords for the heavy taxes since many were not overly bright (rather than actually blaming the people actually levying the taxes), and no one likes their lender — it was a perfect storm. In 1189 riots in York/London started due to the heavy burden, and when people realized an easy way to get rid of loans was to get rid of the lender.
This led to over 400 years of persecution of money lenders, and exorbitantly high interest rates due to people killing off their lender when they didn't feel like paying. Even after changes in the 16th century to make charging interest (and being a Jew) more acceptable, many times Jews were the most experienced at banking — continuing the tradition. As mercantilist economic trade (along with reductions in interest rates) expanded from the 15th to the 18th century, many bankers who financed it expanded in fortune and political influence.
The most predominate family were the Rothschild family of Jewish bankers which started in 1744 by Mayer Amschel Rothschild. Jews were still second class citizens at this point. Mayer built a centralized banking system of command and control, as well as fast coded communication, through his 5 sons that was the envy of Europe. This further cemented the ire of many people in seeing a second class group of citizens having such wealth. This in part led to the Hep-Hep riots in Germany, where people just tried to take the Rothschild wealth by force, which failed since the actual currency was held in another location. Some Rothschilds were also large proponents of Zionism and creation of a Jewish state in the 19th-20th centuries because of their relegation to less than human treatment by the world at large. To give an idea how wonderful it was as a citizen of "Christian" communities, Jews were confined to ghettos with high walls to "protect the outside community" during Christian holidays and required their own judicial system since no one really cared what happened to them outside those walls.
Later, usury (excessive interest) was abused for debt bondage, which is still present today. Rates are placed so high as to make working off a persons debt nearly impossible within their lifetime, letting the debt holder own a persons life and labors. Sometimes jackholes decide to enslave their kids pay it off as well, while racking up new charges at insane "interest rates".
This leads into today with such a background of hatred linking antisemitism and finance/banking that can still be seen in modern times. This is nearly all relegated to bigots, cranks and conspiracy theorists.
Role in the bizarre
Due to the passages in the Bible, fundamentalists have a dim view of usury, but many disagree as to what usury actually is. Definitions range from vaguely defined "excessive" rates, to 12% interest (which was set as a maximum rate for clergy giving loans in 325), to any interest at all. It is good to note that a good number of houses of worship, and likely all of the mega churches in the US were built with some sort of mortgage.
It also often plays into factors of the New World Order bullshit conspiracy theories about the Rothschild family pulling the strings on international banking by debt slavery cranks. To many nuts any financial instrument is "usury" (certainly any debt) — including excessive interest, predatory lending, any debt, stocks, futures, options, and so on. This shows the complete and total lack of any financial knowledge by many of these cranks.
- A History of Economics, the Past as the Present by J.K. Galbraith (1991) Penguin. ISBN 0140153950.
- Politics, Book 1, Part X by Aristotle, (350 BCE) Translated by Benjamin Jowett.
- Lira skids to new low after Erdogan cites Islamic usury by Ezgi Erkoyun & Nevzat Devranoglu (Dec 20, 2021) Reuters via Financial Post.
- Central banks - summary of current interest rates Global-rates.com (archived from 22 Dec 2021 03:23:35 UTC).
- The Economic Collapse Blog — If you can stomach the stupidity