Rethinking Christian Economics: The Biblical Context of Usury
The following piece is republished from In Praise of Folly. It is part of a short series on Christian economics. Footnotes will be provided with the final installment. This paper will attempt to deal with an often under-discussed and misunderstood extension of the principle of Christian stewardship: Economics. Modern American Christians seem to espouse, whether implicitly or explicitly, one of three views on economics: 1) Laissez-faire capitalism; 2) “Crony” capitalism or 3) Socialism. Each of these economic models take modern economic systems and grafts Christianity onto them. They start with something else first and then add the Bible to it rather than grounding the systems upon the Bible itself. As in all world and life issues, the Christian is ought to ask first: What does the Bible say about this matter?This paper is not exhaustive, as I have not dealt with all the possible formulations of Christian economics. Rather, I intend to bring central ideas to the reader’s attention and attempt to organize my thoughts on a hypothetical Christian economic order. In this paper, there are three main topics that I intend to cover: 1) Usury, 2) Distrubutism, and 3) Socialism. For transparency, I would like to inform the reader that I reject the first, have a qualified support for the second, and totally reject the third.The Biblical Context of UsuryUsury is often considered the practice of charging unusually high rates of interest on money that is lent. Originally, however, usury denoted interest of any kind; that is, usury and interest were considered synonymous. Thus, when I refer to usury throughout this paper, I will use the original definition.In practice, usury requires the borrower to repay the lender a sum which is more than the principle of the amount borrowed. How much this additional amount will be is determined by the rate of interest and the period of capitalization (that is, the regularity at which the interest is added to the principle) agreed upon by the lender and borrower. The moral objection levied against usury asserts that if the borrower only borrowed the principle of the loan from the lender, then the borrower ought to be required to repay only the principle and no more. Within this framework, it is immoral for the lender to require more to be paid back to him than the original principle, for the lender would be in fact gaining money without doing any work. For example, if person A lends $1,000 to person B at 15% interest for 1 year to be capitalized annually, then the lender earns $150 without lifting a finger. The lender produced nothing and yet he earned money. It is understood that no man is entitled to either money which he has not worked for, or money that was not given to him. The borrower borrowed $1,000 dollars, not $1,150 dollars; therefore, the borrower does not owe the lender an additional $150. I will demonstrate that usury is a form of extortion and is hence not a legitimate obligation of the borrower. The Bible is very clear on the immorality and sinfulness of issuing loans with interest:Exodus 22:25-27: “If you lend money to any of My people who are poor among you, you shall not be like a moneylender to him; you shall not charge him interest. If you ever take your neighbor’s garment as a pledge, you shall return it to him before the sun goes down. For that is his only covering, it is his garment for his skin. What will he sleep in? And it will be that when he cries to Me, I will hear, for I am gracious.”Leviticus 25:35-38: “If one of your brethren becomes poor, and falls into poverty among you, then you shall help him, like a stranger or a sojourner, that he may live with you. Take no usury or interest from him; but fear your God, that your brother may live with you. You shall not lend him your money for usury, nor lend him your food at a profit. I am the Lord your God, who brought you out of the land of Egypt, to give you the land of Canaan and to be your God.”Nehemiah 5:6-10: “And I became very angry when I heard their outcry and these words. After serious thought, I rebuked the nobles and rulers, and said to them, “Each of you is exacting usury from his brother.” So I called a great assembly against them. And I said to them, “According to our ability we have redeemed our Jewish brethren who were sold to the nations. Now indeed, will you even sell your brethren? Or should they be sold to us?” Then they were silenced and found nothing to say. Then I said, “What you are doing is not good. Should you not walk in the fear of our God because of the reproach of the nations, our enemies? I also, with my brethren and my servants, am lending them money and grain. Please, let us stop this usury!”Psalms 15:5: “He who does not put out his money at usury, Nor does he take a bribe against the innocent. He who does these things shall never be moved.”Proverbs 28:8: “One who increases his possessions by usury and extortion Gathers it for him who will pity the poor.”Jeremiah 15:10: “Woe is me, my mother, That you have borne me, A man of strife and a man of contention to the whole earth! I have neither lent for interest, Nor have men lent to me for interest. Every one of them curses me.”Ezekiel 18:13: “If he has exacted usury Or taken increase– Shall he then live? He shall not live! If he has done any of these abominations, He shall surely die; His blood shall be upon him.”Ezekiel 18:17: “Who has withdrawn his hand from the poor. And not received usury or increase, But has executed My judgments And walked in My statutes– He shall not die for the iniquity of his father; He shall surely live!”Ezekiel 22:12: “In you they take bribes to shed blood; you take usury and increase; you have made profit from your neighbors by extortion, and have forgotten Me,” says the Lord God.”The above verses provide a solid case that God did not want the Israelites to extort their fellow Israelites by means of usury. However, we see that in Deuteronomy 23:19-20, although God prohibited usurious loans to His people, God allowed the Israelites to charge usurious loans to gentiles. This “loophole” was closed by Jesus Christ in the Parable of the Good Samaritan (Luke 10:29-42), as well as by his command to love our enemies in Matthew 5:44, an likewise in Luke 6:27 and 6:35. We see that we should treat our enemies as the Samaritan treated the Jew in the parable. We see that we should love and pray for our enemies and do them no wrong – and if usury is wrong to apply to a man, it necessarily stands in opposition to Christ’s command. If a man will die because of lending usuriously to his brother in Ezekiel 18:13, how greater will his punishment be for usuriously lending to his enemy under the New Covenant?Someone might object to my interpretation of the prohibition of usury by reference to the Parable of the Talents in Matthew 25:27 and Luke 19:13. For proper exegesis, scripture must interpret scripture. We see that the master wanted the third servant to put the money into the bank to earn interest. But was the point of the parable to teach us lending practices? Patently, no. The purpose of the parable is to teach us that if we use what God gave us, then He will entrust us with more, and that if we squander His gifts, then what He has given us will be taken from us. Christ’s words in Matthew 5:42 and Luke 6:34-35 clearly indicate that we should be liberal givers. Luke 6 even indicates that we should not even demand back the principle of the loan.Now many will say that, “Yes we should give charitably with an open hand expecting nothing in return, but in the world of business and finance different rules apply.” This is not sound reasoning. Of course charity is interest-free, but loans and charity are clearly differentiated. We see that in Exodus 22:25-27 God is clearly not talking about charity, but a business transaction. For how could a loan ever be considered an act of charity? A loan is expected to be repaid, but charity is not. The prohibition of usury in business practices is also seen in Nehemiah 5:1-4, where heavily leveraged Jews were indebted for the mortgages of their land, vineyards, and homes. We also see in the Jewish Encyclopedia that according to scripture and rabbinical tradition that lending usuriously to a brother was prohibited in all cases: “There are three Biblical passages which forbid the taking of interest in the case of ‘brothers,’ but which permit, or seemingly enjoin, it when the borrower is a Gentile, namely, Ex. xxii. 24; Lev. xxv. 36, 37; Deut. Xxiii. 20, 21.” [1]The prohibition of usury in the New Testament is extended to the unsaved as seen in Matthew 5:42 and Luke 6:34-35. We see that Jesus frequently expands the original promises and protections of the OT to cover not only Jews, but also Gentiles and the unsaved. Consider in Leviticus 19:18 that the Jews are commanded to love their neighbors, yet the usage of “neighbors” here is actually a status reserved only for other Jews. Thus, the Jews were not required to love the Amalekites, Philistines, or Edomites, among others; in fact, God ordered the Israelites to exterminate them. Followers of Christ are told also to love their neighbors in Matthew 5:43. Yet we learn in Luke 10:29-42 that our neighbor may be our worst enemy. We see that Christ has extended the definition of “neighbor” to even include those we consider enemies. It can be reasoned, then, that according to Luke 6:34-35 the prohibition of usury includes everyone, because Christ does not specify Jew or Gentile when he states that we should lend to anyone who asks, without expecting repayment. Anyone must also include the Gentiles and the unsaved.The critic might say that if we lend to anyone without even expecting the principle in return then we would all be taken advantage of and be left naked and bankrupt. This is not completely true. Of course Christ does not intend us to lend to people who 1) will spend the money on their pleasures, 2) who are affiliated with prohibited means of employment such as prostitution, pornography, drug dealing, the military industrial complex etc, or 3) people who will likely spend the money on criminal activity. We are to be as shrewd as serpents and as innocent as doves. A lot of potential objections are already dealt with right here.But what are we to do in the event that the person to whom we lent money does not repay the loan and seeks yet another loan from us? The answer is that we are not required to loan to that person again. Why? Firstly, we are not required to because retrospectively that person was unworthy of the loan in the first place, and secondly, given that the amount of money that most Christians possess is limited, the Christian should give where it will do the most good. If a Christian lends money to a person, then whether or not he continues to lend to that person will be contingent upon the borrower’s faithfulness to the agreement. If a Christian gives charity to a person, then whether or not he should give charity to that person in the future is contingent upon the how the recipient dispenses of the gift; that is, it ought to be based upon whether or not the charity accomplished its intended goal. In sum, Christians should seek out and aid those whose need is genuine. Furthermore, if a brother in a business transaction fails to pay back the loan and fails to make alternate provisions, then he has proven himself to be a liar and thief, thus forfeiting his right to the brotherhood. Liars have their place in the Lake of Fire (Revelation 21:8).Even with all this aside there is a lot of risk for a Christian lending money. For example, 1) he is not to expect even the principle of the loan back and 2) he is not allowed to leverage political power to obtain what is owed to him by another believer (1st Corinthians 6:1-11).We see that 1) usury was prohibited between Jews in the OT, 2) in the New Testament usury is prohibited in all cases, 3) we are not required to lend to spiritual reprobates and 4) in 1st Corinthians 1:18, Paul writes: “For the message of the cross is foolishness to those who are perishing, but to us who are being saved it is the power of God.”