Do we ignore biblical teaching on usury?

The_financial_crisis_Wallpaper_Gold_Bag_of_gold_013940_It is often claimed that contemporary Christians ignore the biblical teaching that prohibits usury—usually interpreted to mean either lending at interest or lending at excessive interest. This is significant for three main reasons:

  1. The suggestion is then made that in other areas of ethical debate (sexuality, divorce, gender relations, the Sabbath principle, other areas of economics) we either don’t need to attend to what Scripture says, or we cannot do so since this would be inconsistent.
  2. National and global issues relating to finance are arguably the biggest ethical challenge we face, and we will be ill-equipped if we ignore key biblical teaching.
  3. Our post-industrial globalised context is far removed from the largely subsistence, agrarian context of much Old Testament law, so this is an important text case in how we interpret Scripture intelligently.

This comprehensive analysis by Thomas Renz, which he developed in conversation with others who contested his conclusion, offers 12 theses on the meaning and interpretation of the ban on usury. It is longer than my usual posts, but it helpfully traces the nuances of the OT texts, the way that these nuances have been missed in some parts of the interpretive tradition, but wrestled with at other times, and highlights some key issues for interpretation today.

Note: Usury is today understood to refer to “exorbitant interest” but in the past the word was used to refer to usage charges on loans, that is to any form of interest payment, whether interest was 20-25% or 60% or just one percent.

1. Commercial loans were known in antiquity

See M. Silver, Economic Structures of the Ancient Near East (London and Sydney: Croom Helm, 1985), esp. pp. 85-89 on the credit and investment market, and his Prophets and Markets: The Political Economy of Ancient Israel (Social Dimensions of Economics; Boston: Kluwer Academic Publishers, 1982), pp. 65-68, for an argument in favour of the existence of commercial loans in ancient Israel.

There was a custom for Mesopotamian kings to proclaim the remission of debts etc. at the beginning of their reigns and at intervals of seven or more years. Such a release was good news for impoverished people but it would have been bad for business, if commercial loans were included in the remission.

We are in the fortunate position of having one such edict preserved in fairly complete form, namely the Edict of Ammisaduqa from the 17th century BC. It explicitly excludes goods which have been loaned “either as merchandise for a commercial journey, or as a joint enterprise for the production of profit.” It even includes a paragraph which specifies what happens to people who pretend that a loan was a commercial loan, when it was not.

It is worth bearing in mind, however, that a neat distinction between consumer loans and producer loans is not always feasible. Barry Gordon, Lending at Interest: Some Jewish, Greek, and Christian Approaches, 800 BC-AD 100 (History of Political Economy, 14:3; Duke University Press, 1982) p. 41, observes the following:

The predominant microeconomic institution in antiquity was the household; this was not merely the modern organization coexisting of a group of consumers. At the same time it was “the firm,” a group of producers. Hence, there was the most intimate relationship in institutional terms between production possibilities, consumption potential, and household capital. When a householder borrowed he was necessarily borrowing as consumer-producer. It is not surprising that it is difficult to discover unambiguous differentiation of business and consumption loans in the literature of antiquity. Certainly, one finds lending to the poor distinguished from lending to others. However, “poor loan” does not necessarily equate with “consumer loan.”

2. Interest-bearing loans were prohibited within Israel’s polity

The prohibition of interest-bearing loans specifically applied to full members of the covenant (brother) but in this context the resident alien (Heb. ger) is to be treated like a brother. Not only must the same judicial standard applied to the stranger and to the native citizen (cf. Exod. 12:49; Lev. 24:22; Num. 15:18), but charity must be extended to the poor regardless of their ethnicity.

The loans in question are specifically loans to people who are not economically self-sufficient in Exod. 22:25 and Lev. 25:23-38 but the prohibition is not restricted to charitable loans, even if it is likely that the need for loans in ancient Israel was much more often related to crop failure than business opportunities. It deserves to be noted that Lev. 25 implies an obligation to charity towards the poor.

While the boundaries between the two were sometimes fluid (see above), it seems possible to distinguish between “charitable” loans for (the production of) necessities and “commercial” loans for expanding production. Only the former is explicitly in view in Exodus and Leviticus but in Deut. 23:19 all interest-bearing loans within Israel’s polity are prohibited.

Such a complete prohibition of interest-bearing loans could have several reasons:

(a) Opportunities for investment in an expanding business were likely rare in ancient Israel; a complete prohibition would not have a major effect on the economy, while protecting the weak from any attempts to dress up what should be interest-free charitable loans as commercial loans. The wide availability of interest-bearing commercial loans would likely reduce willingness to lend without interest to the poor. Thus a complete prohibition serves charity.

(b) It fits with the general ethos of the covenant community envisaged in the Torah that investment at a distance without partnership would be discouraged. Associates who share risks as well as opportunities  form a closer-knit community than  business “partners” whose only link is the actual loan – see the next two theses.

(c) It is possible that interest-bearing loans are considered wrong in itself. But this seems to me ruled out by the permission of such loans to a nokri, see further thesis four.

3. Loans to a foreigner (Heb. nokri) were commercial loans.

Non-resident foreigners need not be traders; a nokri is distinct from a ger by living outside the socio-economic structures of Israel’s polity, that is outside the covenant people in possession of the land allotted to them. Deut. 14:21 implies a distinction between the ger and the nokri.

The ger is regularly mentioned in Deuteronomy alongside the orphan and the widow, e.g. in 24:19 in another context of benefits given free of charge. (The orphan and the widow are not mentioned in 14:21 because an impoverished member of the covenant community must still abide by the food laws; the ger is not a full member of the covenant community and therefore not bound by the food laws, cf. 24:14; 29:11.) There is an obligation to be generous and charitably to the ger (the foreigner who lives among you), but no obligation to be generous to the nokri (the foreigner who does not live among you).

A nokri might be, e.g., a Philistine from Ekron in the olive oil business who goes to a neighboring Israelite town to borrow silver with which to buy an additional mill in the expectation of a bumper harvest. Cf. E. Stern, Archaeology of the Land of the Bible, vol. 2: The Assyrian, Babylonian, and Persian Periods (732-332 B.C.E.)  (New York: Doubleday, 2001), pp. 111-12, for Ekron.

4. The permission of usage charges on loans to the foreigner (nokri) in Deut. 23:20 implies that usage charges on loans are not intrinsically immoral.

The unqualified condemnation of usury in Ps. 15 and Ezek. 18 should not be pressed to invalidate this exception clause (cf. Kimchi). There is nothing to suggest that those in ancient Israel who availed themselves of the permission in Deut. 23:20 were excluded from going up to the holy hill (Ps. 15) and under God’s death sentence (Ezek. 18). It is worth remembering that the opportunity for loans to a nokri would only arise in prosperous times, after the needs of one’s own household were covered and charity was extended to the poor.

There have been several attempts to read Deut. 23:20 in a way which allows for the view that usury is intrinsically wicked. Traditionally, the permissions seems to have been understood as a concession to evil disposition (e.g., Aquinas, Grotius), similar to the divorce regulations. But this fails to deal with the command to treat the stranger as a brother (see above) and merely shifts greed or injustice outside the community rather than limiting it.

The proposal (Calvin; B. Gordon, Lending at Interest, 1982) that the permission applies the lex talionis principle (given that Israelites would be charged interest, if they borrowed from foreigners, it is only right and proper that they should charge interest when lending to foreigners) faces similar problems and fails to take into account that charitable loans were to be a matter for the community in which the need arose.

Ambrose suggested in his Expositions on the Book of Tobit that the permission related to Israel’s warfare against the nations of Canaan (Patrologia Latina, vol. 14, chap. 15; cf. Luther and, e.g., Richard Capel [1586-1656]). This view is today argued by S. C. Mooney: “Usury was part of the violence that Israel inflicted upon the wicked people whom God was driving out before them.” But

  1. there is no hint in Deut. 23:20 of warfare,
  2. the term nokri cannot be restricted to “Canaanite under the ban”, the very next occurrence of the term in Deut. 29.22 relates to someone who comes from a distant country,
  3. there is a difference between subjugating by usury and putting under the ban, see Deut. 7:1-2; 20:16-17; cf. Num. 21:2—the Gibeonites knew this and Saul should have known this in his treatment of the Amalekites.

The most plausible explanation in my view is that the permission relates to the fact that the nokri is a non-resident foreigner whose desire for a loan is both commercial and outside the economic structures of Israel’s polity. This explanation is not traditional but it is at least 300 years old (cf. Matthew Henry). It is the most satisfying explanation because it takes into account that the legal material uses different terms for non-Israelites who have become resident in Israel (Heb. ger, toshab). It is thus eminently plausible that Deuteronomy’s distinction between a ger and a nokri is between resident (semi-assimilated ) and non-resident (non-assimilated).

Echoing Exodus and Leviticus, a primary concern in Deuteronomy is preventing rich people from taking advantage of people who have fallen on hard times. In my reading, the nokri is not the exception to the rule, as if one may take advantage of a nokri—whether as a concession to greed or as part of a campaign to subjugate and eradicate “detestable Canaanites”. The nokri has not fallen on hard times. While a strict distinction between consumer credit and producer credit is untenable for the ancient world (see above), there is a difference between people and families trying to make ends meet and people and families seeking to expand economically. The nokri would fall in the latter category.

5. The Gospel compels us to be just and generous, equitable and charitable.

This includes the admonition to “lend freely, expecting nothing in return” (Luke 6:35). Christians are not under the Law which governed Israel’s polity but they are to form a community whose fellowship includes generosity in sharing material possessions. Jesus challenges us to love our enemies and to do good without expecting dividends in this whole section (Luke 6:27-38). But if, as many of us believe, “to one who strikes you on the cheek, offer the other also” does not prohibit  every exercise of force, and if ” from one who takes away your cloak do not withhold your tunic either” does not abolish the legitimacy of policing, then “Give to everyone who begs from you, and from one who takes away your goods do not demand them back” need not prevent trade and “lend, expecting nothing in return” does not rule out banking. This is emphatically not to say that these injunctions have no role in politics and economics but that the statements must be read in context — “as you wish that others would do to you, do so to them” will preclude many forms of interest-taking but arguably not all.

611ei9K2VpL6. The church fathers categorically condemned usury.

They did so in a context, in which “the main business of usurers was not so much earning interest on their capital as it was expropriating lands and other property that had been offered as security against loans that could not possibly be paid.” (J. L. González, Faith & Wealth: A History of Early Christian Ideas on the Origin, Significance, and Use of Money [San Francisco: HarperCollins, 1990], p. 175). Their sermons make it abundantly clear that they do not have business loans in view, neither condemning them nor commending them. Cf. my comments on Basil’s second homily on Ps 15.

While usury may refer to any (fixed?) “usage charge on a loan,” it needs to be taken into account that the church fathers, whenever they elaborate on it, seem to have “making profit from misfortune” in view, which was probably by far the most common setting for loans. Cf. The Sacred History of Sulpitius SeverusBook 1chap. 18, and Ambrose, On the Duty of ClergyBook 3chap. 3, par. 20:

It is a mark of kindly feeling to help him who has nothing, but it is a sign of a hard nature to extort more than one has given. If a man has need of thy assistance because he has not enough of his own wherewith to repay a debt, is it not a wicked thing to demand under the guise of kindly feeling a larger sum from him who has not the means to pay off a less amount? Thou dost but free him from debt to another, to bring him under thy own hand; and thou callest that human kindliness which is but a further wickedness.

Lactantius, The Epitome of the Divine Instituteschap. 64

He will not steal, nor will he covet anything at all belonging to another. He will not give his money to usury, for that is to seek after gain from the evils of others; nor, however, will he refuse to lend, if necessity shall compel any one to borrow.

Chrysostom, Homilies on the Gospel of Saint Matthew, fifth homily (on Matth. 1:22-23):

For nothing, nothing is baser than the usury of this world, nothing more cruel. Why, other persons’ calamities are such a man’s traffic; he makes himself gain of the distress of another, and demands wages for kindness, as though he were afraid to seem merciful, and under the cloak of kindness he digs the pitfall deeper.”

7. The condemnation of usury in the early church is closely related to the call to invest available money with God by giving it to the poor.

The notion that Christians ought to use every possession they do not actually need to alleviate poverty is widely attested in the patristic literature. See González, Faith & Wealth for an overview. The immense importance of almsgiving and the power attributed to it can be seen in Cyprian’s Treatise on Works and Alms summarized by Gonzales on pp. 124-28. I found Gonzales’ chapter on The Cappadocians (pp. 173-86) particularly illuminating.

8. Scholastic theologians developed the idea that usury is intrinsically wrong (making no distinction between consumption and production loans) but they sought to be just in taking into account risk and opportunity costs.

Some may have done so because they wanted to avoid the plain prohibition of usage charge on loans but no doubt some were keen to be accurate, logical and fair in their understanding of what is at issue. In either case, we need to evaluate their arguments and leave evaluating their motives to Almighty God to whom all our hearts are open.

It is worth bearing in mind that attitudes to usury were not entirely stable in the medieval period. The Church and Christian rulers often allowed usury—to be practised by Jews, not least when a pope or king needed money, one suspects. At other times strong condemnations of usury came in handy as an encouragement to participate in the the Crusades (as a form of penance). For discussion see E. S. Tan, “Origins and Evolution of the Medieval Church’s Usury Laws: Economic Self-Interest,” The Journal of European Economic History(March 2005), also available online.

The same shifts and disagreements can be observed on the Jewish side, see S. Stein, “Interest Taken by Jews from Gentiles: An Evaluation of Source Material,” J Semitic Studies 1 (1956) 141-64. There is a traditional equation of “Christian” with “Edomite” in Jewish thinking which would prohibit Jews from taking interest from Christians, because an Edomite must be treated like a brother. Those in favour of exacting usury from Christians (the only business in town!) had to argue that Christians are not in fact “Edomites.”

The classic discussion is in Thomas Aquinas, Summa Theologica, 2.ii, question 78, but the encyclical Vix Pervenit (On Usury and Other Dishonest Profit) promulgated on 1 November 1745 by Pope Benedict XIV may be considered the apex of scholastic thinking on the matter.

One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.

This is about as full a condemnation of usury as one might get, small or large profit, commercial or not. But then it continues:

By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.

Such complexity (and confusion?) is the basis for those Roman Catholic scholars who argue that the position of the church on usury has not in fact changed like Gary L. Coulter who defines usury as “the prohibition of gain from a loan sought directly by a lender without a just title” and claims that “this is the definition of the usury prohibition as it was taught, understood and interpreted by the Church for thousands of years, just as it is today.” See also Austin Fagothey, Right and Reason: Ethics in Theory and Practice, 2nd ed. (St Louis: Mosby, 1959), pp. 471-74.

9. The Reformers struggled to discern what faithfulness to Scripture meant in the area of financial interest, given the economic developments of their time.

None of the Reformers were thrilled about the commercial practices of their time but while Luther stressed the traditional distaste for usury, Calvin was concerned to uphold the principle that the Church must not bind consciences beyond what is written in Scripture. For Calvin, see, e.g., the essay by Andrew Goddard on  Calvin, Usury and Evangelical Moral Theology.

Luther spoke often against usury. His 1519 sermon must have caused something of a stir and was published in a revised form in 1520. The 1520 Sermon was re-published unchanged in 1524 with further material added elaborating on commercial practices. (The site to which I link wrongly gives “1520” for this. My link does of course not imply endorsement on the views expressed on B. Nelson observes that in private correspondence Luther moved from 1525 onwards to a view of interest-taking, in which “the economic situation and the consideration of public utility were of paramount importance” (in M. L. Stackhouse et al. [eds], On Moral Business: Classical and Contemporary Resources for Ethics in Economic Life [Grand Rapids: Eerdmans, 1995], p. 269). In his The Idea of Usury: From Tribal Brotherhood to Universal Otherhood, 2nd ed. (Chicago: The University of Chicago Press, 1969), he distinguishes three phases in Luther’s thinking. Unfortunately, Luther’s 1540 “Admonition to the Clergy that they Preach against Usury” does not seem to be available online.

In England, Hugh Latimer condemned usury as “wicked before God, be it small or great; like as theft is wicked” in his Fifth Sermon upon the Lord’s Prayer and Bishop Jewel explicitly rejected the rich lending to the rich and the merchant lending to the merchant in his Exposition upon the Epistles to the Thessalonians (published 1583, but written some time before 1571), see W. J. Ashley, An Introduction to English Economic History and Theory, Part 2: The End of the Middle Ages, 4th ed. (1906), p. 223.

10. A proper understanding of the concept of time preference demolishes the claim that usage charge on (non-productive) loans is intrinsically immoral.

The concept of time preference realizes that people value $100 now more than $100 in a year’s time, even without inflation or deflation (von Mises, cf. G. Stolyarov). This insight may be added to the acknowledgment of the right to compensation for the expenses of the transaction (damnum emergens), the loss of the opportunity to seize good bargains (lucrum cessans), and the risk of not recovering the principal (periculum sortis). This is of course not to say that a Christian must make use of such rights, or even that Christians are always allowed to make use of them.

11. Contemporary economic arrangements are deeply problematic.

High interest rates and irresponsible lending and borrowing, both on personal and international levels, are part of the problem but the mere existence of interest rates is not the problem. We should not underestimate the role of fiat money and its impact on the issue of interest. A sack of corn is valued differently just before the time to sow seed and just after harvest time but such fluctuations are different from steady inflation of money in our economy. An interest-free loan in which the same entity is returned as was borrowed (a sack of corn for a sack of corn, ten grams of silver for ten grams of silver) is different from an interest-free loan in which the same value is returned. The latter rises the question how to measure real value.

12. The Scriptures traditionally used to condemn all usury have not always been properly understood and applied but they remain relevant for us today. 

The Gospel obliges us to charity and generosity and the regulations in the Torah should still inform our thinking about socio-economic arrangements which please or do not please God. The lifestyle of many Christians today would have been abhorrent to many Christians in the past. But I very much doubt that the church fathers would have put their finger on interest-bearing bank accounts. They would be horrified about the luxurious lifestyle of many of us, while people starve in other places of the world, and about debts being incurred to finance such a lifestyle. (Cf. this illustration, shadowing the argument presented here.)

A fundamental hermeneutical principle to remember in this discussion is this: repeating the same words in a different context is not saying the same thing. The condemnation of usage charges on loans in the past was most often connected with concern for the poor. The montes pietatis, non-profit making Christian credit institutions established in the fifteenth century for charitable loans, either went bankrupt once the bequest was used up (if they provided interest-free loans) or charged a small sum of interest to cover running costs and actually helped the poor. Those who condemned these latter institutions on the basis that they were charging interest, and without providing money for all the poor who made use of these loans, drove the poor into the hands of those who charged much, much higher interest rates. Such condemnation was very different from that in the early church.

Let us imagine people who at present own more than they need but who can anticipate a need in the not to distant future—maybe they will need a car to get to work in a year’s time or maybe there will be educational expenses for their children. Are Christians permitted, in principle, to put aside resources for future use? Yes, I should think so. Jesus does not demand that we live hand-to-mouth from day to day. How should they save? Are those who buy for themselves precious metals and hid them under their bed more righteous, because untainted by usury, than those who invest the resources in a microcredit initiative which seeks to help the poor? Just asking.

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36 thoughts on “Do we ignore biblical teaching on usury?”

  1. A helpful and thought-provoking delve into a complex subject. You do not give the link to the original.
    I think it is
    I wonder if others have other links to articles or resources on this subject area.
    It raises so many questions and it is helpful to have the historical quotes and arguments.
    It also starts to debunk some simplistic answers as you say.
    Thank you for making this available.

  2. Well done Ian (and Thomas Renz) on what is a complex subject – so please forgive me if I have missed something!

    A context helps my question. it becomes most obvious on a mortgage. We borrow mortgage sums over a long period because we now that the capital sum borrowed remains the same and inflation eats into it. We borrow it knowing that inflation will reduce the value of what is borrowed.

    In pre-biblical times what was borrowed was goods. If money was borrowed the metal of the money, perhaps silver, also had value and therefore the sum borrowed was not static but adjusted naturally with inflation.

    Thus interest surely was interest over natural inflation and in that sense was profit.

    Hence you can say:
    “…..Gary L. Coulter who defines usury as “the prohibition of gain from a loan sought directly by a lender without a just title” and claims that “this is the definition of the usury prohibition as it was taught, understood
    and interpreted by the Church for thousands of years, just as it is today….”

    This is the prohibition of gain.
    How was inflation thought of, if at all, in Biblical times?

    • Clive, there are two elements to this.

      The first is the time value of money, which itself has two components. The first is the point Thomas makes in Thesis 10 about time preference, but we need to add to that the fact that modern economies run on assumed low levels of inflation—as an incentive against the time value of money to encourage people to make their assets available for investment. (If we had zero inflation, the economy would stagnate). Ancient economies, without paper money, did not run in this way.

      The second is the important distinction between lending for investment and lending for poverty alleviation. It is this latter where the Bible is most concerned to prohibit interest, since that is taking advantage of another’s misfortune. I think it corresponds very closely to payday lending. But the fact that these two are distinguishing points to the fact that it is not the charging of interest per se which is the problem.

  3. Yes. I keep coming back to the fact that the Bible’s economic ethics are so at odds with modern capitalism.

    (See, for example, Deuteronomy 23:19-20; Leviticus 25:35-37; Exodus 22:25; Psalm 15:5; Nehemiah 5:1-19; Ezekiel 18:8 etc etc. Incidentally, that’s several genres of Scripture — wisdom / poetry; Torah / pentateuch; prophets; history — written across many centuries. This must matter to God! This is something that Scripture is unusually and repeated explicit about.)

    Clearly, from the evidence above, the Bible forbids lending at interest per se – not just at “excessive” rates (which we might call usury). Furthermore, all debts were cancelled every seven years.

    (However . . . Israelites *were* allowed to lend with interest to foreigners but that, presumably, is so they are not taken advantage of: otherwise every Phoenician trader would have come to Israel, borrowed at 0% APR and then re-lent the money at home with interest. Result: Jews exploited and no money left in Israel.)

    “Legal” lending (i.e. @ 0% APR) is certainly encouraged in the Bible – the righteous lending to the poor to get them through hard times. But charging interest is prohibited. And Jesus takes this one step further: just as he did with an eye for an eye (“turn the other cheek”) or adultery (don’t even think it!) so with lending – lend not only without interest but without expecting it to be paid back! So the Law (justice) becomes grace (mercy).

    Now imagine debts cancelled very seventh year; no interest to be paid on a loan; a Sabbath rest from all production; a year of Jubilee (imagine that!).

    The number of verses in the Bible forbidding or rejecting or rebuking lending at interest far outweighs those about homosexual activity. (By a ratio of 2 or 3 to 1.) Do we tell all the bankers and brokers in our middle class evangelical churches* that they are breaking God’s laws? That they are part of a system at odds with God’s will? Or do we understand that this isn’t the theocracy, this isn’t the Kingdom? If the latter, why do we squeal so much about sexual ethics? I know the two are not the same but this is about the even-handed application of the Bible’s moral teachings and we seem to be very selective in what we see and have a ready excuse for the bits that seem unreasonable or unpalatable.

    (*E.g. Ken Costa, big name in Alpha and New Wine and churchwarden at HTB is an investment banker; would those oganisations have a partnered gay man at the top? Then a sinful — or at least cynical — thought pops into my brain: “But of course! Lots of City-types bankroll many of our big evangelical churches. It’s bad enough that we’ve been compromised but this has the whiff of our principles having been bought with hard cash.” I kill that thought before it draws breath.)

    Planks and specks (sawdust?) – well known to a certain carpenter.

    • But you cannot highlight the Bible’s ‘economic ethics at odds with modernism’ without doing at least two things:

      1. Noting the different social context we are in i.e. industrial and post-industrial, rather than agrarian

      2. The Bible’s own careful distinction between lending for investment (where interest may be charged) and lending for poverty alleviation (where interest may not be charged). This distinction in itself, as Thomas points out, means that the charging of interest is not *in itself* the issue.

      • Ian, I’m interested in this: “The Bible’s own careful distinction between lending for investment (where interest may be charged) and lending for poverty alleviation (where interest may not be charged).”

        Where in the in the Bible is lending with interest for investment allowed? I can’t find it there at all. (Unless you mean lending to foreigners?)

        • The Bible specifically prohibits providing finance at interest to the destitute. In Matthew’s gospel, personal generosity is enjoined: ‘Lend hoping for nothing in return’ (Luke 6:35)

          As I’ve said below, Christ revealed no moral qualms in his Parable of Talents regarding the minimal expectation of a businessman collecting interest from a bank account.

          Bankers, both then and now, don’t merely store up for safekeeping the money lent to them. Even a basic savings account involves lending to banks with interest for investment.

          • OK, maybe I’m being really stupid here (it’s been known!) but let me break this down to help me get my head around it:

            “The Bible specifically prohibits providing finance at interest to the destitute.”

            No, The Bible specifically prohibits lending at interest to anyone — with the stated exception of foreigners (presumably so Jews wouldn’t be taken advantage of and there’d be no money left in Israel).

            “In Matthew’s gospel, personal generosity is enjoined: ‘Lend hoping for nothing in return’ (Luke 6:35)”

            OK, apart from the misattribution (something, ironically, I think Matthew himself does?) why is Jesus enjoining PERSONAL generosity? I.e. why should this apply to a Christian’s private life but not their public ethic? So a Christian banker does not “Lend hoping for nothing in return” — he or she lends expecting full repayment, more than full repayment — repayment with interest. Imagine if, say, sexual ethics made the same distinction between home and work: “Oh yes I’m a prostitute but I’m faithful to my husband”

            “Christ revealed no moral qualms in his Parable of Talents regarding the minimal expectation of a businessman collecting interest from a bank account.” Yes, the text reveals no explicit moral qualms about using the bankers but this is a parable — i.e. not necessarily fully normative teaching. Many (maybe most?) parables show “odd” or even downright sinful behaviour that is not commented upon, much less condemned. Should I share my oil with foolish virgins? (It seems not.) Should I plant weeds in my enemy’s crops? (Probably not.) Should I net for fish indiscriminately and throw away the by-catch? Etc etc etc. They are parables based on how the world is (fallen, sinful) to show us something bigger, better and brighter but they are not moralising tales.

            “Bankers, both then and now, don’t merely store up for safekeeping the money lent to them. Even a basic savings account involves lending to banks with interest for investment.” Yes, and such practice is forbidden by the Bible. Assuming Israel kept the Law (Torah) there would have been no bankers in the land (but then there’d be no pig farms either, and we see at least one of those — maybe the pork and interest-bearing loans were for foreign export, as it were?)


          • Hi Oliver,

            Here are the scriptures relating to the charging of interest.

            Exodus 22:22 – 25: The prohibition on lending at interest within the context of afflicting victims of misfortune. ‘If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest’ (Ex. 22:25)

            Ezekiel’s prophecy again sets this prohibition in the context of exploiting the needy: ‘He does not commit robbery but gives his food to the hungry and provides clothing for the naked. He does not lend to them at interest or take a profit from them.’ (Ez. 18:8)

            In Leviticus, there is the selfsame context: ”If any of your fellow Israelites become poor and are unable to support themselves among you, help them as you would a foreigner and stranger, so they can continue to live among you. Do not take interest or any profit from them, but fear your God, so that they may continue to live among you. You must not lend them money at interest or sell them food at a profit.’ (Lev. 23:35 – 37)

            It might well suit your argument in order to highlight Deut. 23:19ff as proving an absolute and unqualified prohibition: ‘Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest. 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.’

            The other scriptural references which I’ve quoted here don’t support your argument.

            I’ll reflect on and respond to other aspects of your argument in due course.

          • David, the boss in Matthew 25 is referred to as a “harsh master”who “reaps where he does not sow” and he exacts a terrible punishment on his servant who failed to invest. That doesn’t sound like a model for a Godly businessman at all.

            It is considered poor form in Biblical interpretation to draw absolute conclusions from the incidental context of parables. Matthew 25 is part of the same Gospel tradition as the “shrewd steward” of Luke 16 and the “unjust judge” of Luke 18. In each of those parables a spiritual analogy is being made, but that in no way suggests that we should mimic the actual behavior in the parable. Only a dishonest steward out for himself would defraud his master’s accounts to secure his own future, only an unjust judge would refuse to grant a widow’s just case until she sufficiently annoyed him, and only a harsh master who reaps where he does not sow would demand payback with interest, . Their actions are NOT a model for our actions or for God’s outside of the primary point being made, which has nothing to do with money.

  4. I confess I haven’t had time to read the whole article,but I think the key point is 10 – the issue of time preference. This makes it clear that a rate of interest is just a price to be agreed by mutual consent by two parties, and not in itself any more “sinful” than any other price setting.

    I had always understood that the prohibition was on “excessive” usury, hinting at the context of inequality, where one party is exploited because they effectively have no choice. The modern equivalent is pay day loans, where consumers require protection from those seeking to get them hooked on debt. .

    • Yes, indeed, though the prohibition on any interest in a loan to alleviate poverty suggests that, in this context, any interest is excessive—though this is in a zero inflation economy.

      • That’s the wrong way round, surely? It’s a “zero inflation economy” precisely because there’s no interest? The one causes the other. But it starts with interest.

  5. It’s worth noting and adding to this summary the underlying Thomistic principles for condemnation of usury about the essential being and purpose of “things”. Money is not a “good” in itself and so money to make money is a distortion of the telos of creation. Now a contextual application of that principle arguably allows us permit usury to assert the good ends of production (investment in the manufacture of created items for good ends), shelter (mortgages), the reasonable protection of risks (insurance: and the growing international trade centred in Venice requiring insurance for ships (NB insurance is a form of usury) was the beginning of the end for the prohibition of usury in the West), and business that raises the condition of the poor (microcredit as you suggest).

    A very modern issue that draws from the underlying principle of telos is not just fiat money but the vast trade in financial markets of futures and derivatives. These products have no corresponding substantive value except their market monetary value and the value of these products is pegged against the assessment of the value of something without actual substance. You end up with the situation where the associated financial products can be worth multiple times the underlying value of the “first product”, and conversely, carry losses far beyond the substantive worth of, for example the housing stock value that the products were designed to relate to. The financial collapse that we are still dealing with was triggered by such products in the housing market of the US.

    So, there are principles of equity to be taken seriously, but i believe also principles of telos which strike at the heart of our personal and communal desires. Such financial products are, i would argue, un-Christian. They give a value that God does not give to money for its own sake and set whole communities unaccountably under the whim of financial markets that have no substantive connection to or care for their welfare.

  6. I am not an economist and I appreciate the work done by Christian scholars with training in the relevant disciplines. I want to distinguish between the careful critique of our economic system offered by, e.g., the Jubilee Centre Team, and the facile claims that anyone with a bank account is breaking God’s law. I have not offered and am not able to offer anything comparable to the work done by Christian ethicists and economists. As an OT scholar I can help with exegetical and historical questions and as a Christian OT scholar I take a keen interest in the wider hermeneutical questions.

    In a way my starting point is the observation that while taking of interest at whatever rate was totally prohibited among members of Israel’s polity, Deut. 23:20 permits charging foreigners interest. Why?

    The permission in Deut. 23:20 suggests to me that it is wrong to characterise the taking of interest as intrinsically immoral as far as the Bible is concerned. In the initial discussion which prompted me to write my theses people were arguing that the taking of interest was in fact an act of warfare. For Israel to enslave other nations (by way of interest-bearing loans) was a good thing, or so they thought. This does not seem to me a plausible reading of the text.

    Paul Mills in the booklet Debt and Interest ( writes, “The only exception was lending to foreigners – possibly because they did not keep the same rules, so could have taken an interest-free loan from an Israelite and lent it out at interest to someone else.” I probably agree with everything else he writes in this booklet but this seems to me weak. There were no Israelite banks. There was no obligation to lend to someone outside the community. If a Phoenician might have found it tempting to get an interest-free loan from an Israelite which he then could use to make a loan to an Egyptian at interest, the Israelite would have found it rather easy to resist the temptation to make such a loan. Why should he? There was a moral obligation to lend to the poor (without charging interest!); there was no duty to throw money at foreign business men.

    Even if Paul Mills were right (on this specific point, as he is right on many other points), the permission in Deut. 23:20 would still seem to establish the principle that interest-bearing loans are not intrinsically wrong but defensible in certain circumstances.

    To my mind, considerations about time-preference make a helpful contribution towards explaining why it may not be wrong in principle to make a profit from a loan. Other considerations, such as those at which Richard Sudworth hints, would help to qualify this.

    As far as our economic activities as Christians today are concerned, there seem to me two different sets of considerations. One set concerns the sort of questions about financial and economic arrangements which the Jubilee Centre raises – which aspects of our system and which of our habits are immoral? E.g., taking out a loan to go on holiday, profiteering from the plight of the poor.

    The second set of questions concerns Christian abstinence from practices which are not intrinsically wrong. I argue that if we take Torah as a whole we can conclude that (a) interest-bearing loans are not intrinsically wrong, but (b) the people of God are to refrain from making use of them within their polity.

    Within the Church of England there may be a particular temptation to confuse the two sets of questions. Given our role within the nation we have -arguably- a special responsibility to speak truth to economic and financial power. But like any church we also have to encourage discipleship (!) which means asking more of ourselves than of our non-Christian neighbours.

    I would be interested to know whether the Jubilee Centre team believes that it is *always* wrong for Christians to take out a mortgage and that microcredit initiatives are to be discouraged.

    • Is there a difference between “a (cumulative) fee for the borrowing of money” and “a share in the benefits of the investment”? It strikes me that there should be a distinction between someone going into debt in order to use your money (and paying an additional fee to get out of debt) and participating in an enterprise, but I don’t have the skill to apply this distinction to the texts.

      • There is a difference between interest (fee for the borrowing of money) and share (in the benefits of investments); the interest charged by a moneylender is fixed while shares, as they say, “can go down as well as up”. The only risk moneylenders take is that the borrower defaults but even this risk has been low historically because the use of pawns and political force usually helped moneylenders to get their due anyway.

        It can be argued that participating in an economic enterprise, sharing risks as well as benefits, is to be commended over against lending money at interest to economic entrepreneurs. But the argument would proceed from the biblical witness about the nature of human relationships, the nature of work and maybe one or two other things. It is not something that can be argued specifically from texts dealing with usury.

        • The other distinction I see is that liability towards a co-investor is (generally) limited to the investment itself, whereas interest on non-investments is paid over and above the principal. As such, the debt can grow independently of the value of the asset. And as you identify, historically the law has backed the lender in this.

          I have on occasion wondered what would happen if the rules for lending were changed such that all liability was limited to the investment. For commercial investments, interest would be a (fixed) “share” paid by the investment. Non-commercial investments might be trickier, but could work as follows:

          A lends B 80% of the price of the house, with an agreement that the nominal value of the house increases by 5% each year (for simplicity, I’ll assume a discrete single-year model). In year 1, B pays off 5% of the total value, increasing his share to 25%. The nominal value then increases by 5%. In order to pay off another 5% the following year, B must pay 5% of the new nominal value.

          To protect A, there may be rules that require B to pay a certain proportion every year or allow A to trigger liquidation of the asset, and perhaps the actual payment may be discounted before applying its value as a cost of servicing the loan (e.g. 70% goes towards repayment, while B pockets 30% as a fee).

          I can see two key consequences that flow from this:

          – B is never left with a growing liability that exceeds the value of the asset. At any point, B can agree to terminate the arrangement and liquidate the asset, receiving whatever B’s current share of the asset is worth. B’s proportional share can only decrease if A gives B more money.

          – Lenders are foolish to lend money for depreciating or non-saleable assets. In my opinion, this is a good thing. Most loan abuse (from both borrower and lender) comes when money is lent towards items or activities that do not themselves generate wealth (or that are recklessly speculative).

          An arrangement like this would allow legitimate lending while maintaining both the letter and spirit of the usury rules. (Note that I am NOT claiming that anything outside this violates them, just looking at ways of maintaining legitimate lending while preventing the interest trap)

  7. Quote:
    “A fundamental hermeneutical principle to remember in this discussion is this: repeating the same words in a different context is not saying the same thing.”

    Beautifully and succinctly put. Your analysis also confirms that, when it comes to money, we are all revisionists.

    • Jonathan,

      I would distinguish the current process of Anglican ‘reception’ (which can often be thinly disguised revision) from reform. Peter Toon put it best when he wrote: ‘In its present form, Anglican ‘reception’ is not an appeal to the sureties of the past, or even to what has been.

      Instead, it is an appeal to what might be someday, with the associated permission to test or experiment with the proposed possibilities of the future. This kind of ‘reception’ is, thus, a novelty in itself. It is no longer a ‘reformation’ (an effort to achieve the original, pristine form). Rather it is a ‘reformation forward,’ so that the true form of the Church may not have been seen or achieved yet.

      That is not, however, an eschatological consideration, according to which we are not completely sure of what Christ will make of us. Rather, it is an inversion, an experiment to determine what we will discover of Christ and his Body, the Church.

      In the end, one is faced with this question: Is there justification provided in the Scriptures for a principle of experimentation?
      No previous effort at reformation or renewal has looked to the future, rather than to the settled past. It may even be said that the reformation forward is contrary to every basic principle of church polity.

      For the experiment to proceed, it must be permitted by human authority. But until the experiment succeeds, it cannot be known if the human authorities granting permission have the divinely given authority to allow the experiment.’

      In the Parable of the Talents, Christ correlates His own rightful expectations to those of the businessman who, at very least, expected that the principal given to the last recipient could have been lent to others and have gained interest by the time of his return.

      Of course, the way of Christ is not typified exacting demands, but acceding to those of others: to serve, instead of being served.

      Still, it does make you wonder why Jesus referred to such a practice in His parable and identified with it as a rightful expectation in business, if He deemed it abhorrent.

      • I often think these days, when bemused by Christian change and experiment, of Gamaliel’s response to the Apostles’ teaching and emergent group of Jesus followers – that it would either fade or flourish according to whether it was or wasn’t a genuine movement of God.
        And Gamaliel was Paul’s teacher…

          • He wasn’t the first to try, nor the last – but then they met with a very different response.

        • Karen,

          Firstly, in proclaiming Christ as the fulfilment of OT revelation, the apostles were reformers of first-century Judaism. They appealed very much to the ‘the sureties of the past’.

          It might provoke a tenuous analogy with decriminalisation, but Gamaliel’s conjecture that the apostles’ mission could be divinely endorsed was prompted by their miraculous escape from prison.

          Modern-day revisionists have neither the support of biblical revelation, nor a similar miraculous intervention that might imply God’s endorsement of their cause..

          • When you refer to modern day revisionists, I assume you are talking about all those who think lending at interest in some circumstances is justified.

          • Jonathan,

            Regarding lending at interest: asked and answered above. The OT prohibitions against lending at interest are repeatedly expressed in the context of denouncing those who capitalise on the destitution of others.

          • Oh, I’m happy with your interpretation. But it is a revision of the way that the church interpreted the Bible for the first fifteen hundred years – a revision without any miraculous intervention to justify it, just a changing (developing) understanding of how to interpret these texts in a new context. As I said, when it comes to money we are all revisionists.

          • I stated: ‘Modern-day revisionists have neither the support of biblical revelation, nor a similar miraculous intervention that might imply God’s endorsement of their cause’.

            In contrast with the modern-day revisionists who simply treat specific scriptural ‘sureties of the past’ as irrelevant, my approach reviewed and accepted the explicit context of biblical revelation. I did not render them irrelevant.

            In terms of being at odds with post-apostolic tradition, we could also consider authoritative writings of Tertullian, Justin Martyr and Athenagoras banning re-marriage of widows. Look at the canon law in force by the time of the Council of Nicaea:
            Canon XVIII:
            ‘He who married a widow, or a divorced woman, or an harlot, or a servant-maid, or an actress cannot be a bishop, presbyter, or deacon, or any other of the sacerdotal list.’

            So, in contrast with revision, genuine reform would merely question whether such a prohibition is found in prophetic and apostolic revelation. Rendering them irrelevant is not just a ‘changing understanding of how to interpret these texts’.

          • Quote: “my approach reviewed and accepted the explicit context of biblical revelation. I did not render them irrelevant.”

            You’ll be pleased to know that is exactly what I do when I consider the biblical texts.

      • “n the Parable of the Talents, Christ correlates His own rightful expectations to those of the businessman who, at very least, expected that the principal given to the last recipient could have been lent to others and have gained interest by the time of his return.

        Of course, the way of Christ is not typified exacting demands, but acceding to those of others: to serve, instead of being served.

        Still, it does make you wonder why Jesus referred to such a practice in His parable and identified with it as a rightful expectation in business, if He deemed it abhorrent.”

        My reading is that is The Master saying “You didn’t even do the simple and sinful thing of putting it out at interest with the bankers!” You weren’t wise, you weren’t wicked you were just useless.

        • Oliver,

          ‘You weren’t wise, you weren’t wicked you were just useless.’

          That might be a valid alternative reading were it not for the master explicitly calling the servant ‘wicked’ and ‘lazy’ .

          The last servant characterises his Master’s business expectations as demanding and excessive: ‘harvesting where you have not sown and gathering where you have not scattered seed’. The Master’s retort is that the accepted expectation could have easily been met by placing the entrusted wealth in a bank account (instead of burying it) for him to collect interest on return.

          There is a stark contrast between minimal and rightful expectation of collecting interest from a bank account and the wealthy from lending at interest, instead of giving to those suffering financial hardship. (Lev. 25:35 – 38)

  8. This argument is better than most, but I still think it misses the boat at a number of important points.

    All that work is done which admits that the Biblical texts aren’t making a strict distinction between charitable loans and commercial loans…so why are we allowed that distinction? As you say, there is no clear distinction between the personal and the commercial, Deuteronomy clearly bans both with the Israelites, the critiques in Psalms and Ezekiel don’t appear limited, etc. It makes much more sense to me to say that loans to non-resident foreigners were allowed because those foreigners were not considered neighbors, to be loved as oneself. Other Israelites and resident strangers were neighbors, so they didn’t have to be loved. Also, as others have pointed out, free loans to foreign businessmen would have led to a fairly rapid capital drain.

    The line “The condemnation of usury in the early church is closely related to the call to invest available money with God by giving it to the poor” causes me to wonder why we don’t follow the Fathers in this respect.

    Arguments are made for taking into account risk, time preference, opportunity cost…but to put a financial value on those things and then demand compensation seems to me to be exactly what the Bible and the Fathers say that we shouldn’t be doing. It is our love of money, our greed, and our inability to trust God with our future that leads us to charge others for using our excessive (usually wildly excessive) stores of money in a time when billions of people are in need.

    Not to mention the fact that interest rates virtually always exceed such costs, one of several reasons why the rich steadily and rapidly control more and more of the money supply at the expense of the poor. Calvin explicitly warned against pegging our interest rates to the market, stating that it should be pegged to the needs of the borrower instead…why do we virtually never follow on this?

    The final note about microlending was strange to me – after all those words regarding the Biblical ban on interest for charitable loans to the poor, why they suggest righteousness in “investing” in companies that charge interest on charitable loans to the poor? Microloans were very much in style for a while but have been much more controversial over the last decade, linked to many thousands of suicides and orders of magnitude more negatively impacted lives.

    To so casually namedrop investment in microloans as if it is self-evidently good to make money off of charging interest to the poor seemed to me to miss the whole point of the survey of the Biblical and Church evidence. And if the point is missed on such an obvious application, then I worry that the entire exercise might just function as an excuse to namedrop enough loopholes that we then feel we don’t have to apply the verses at all.


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