In the debate over the Biden’s Administration’s recent action to institute “student loan forgiveness,” some Christians have resurrected past theological condemnations of usury (loaning out money at interest).
Christians have said and done many things throughout history. I am convinced that Christianity has been an obvious net positive for human society, but that doesn’t mean every Christian opinion or even tradition has been right or good. Some have been quite bad. I comfort myself at times that some of these, while espoused by Christians, were actually imports from pagan philosophy. Geocentrism is an example of this. So is usury.
It would have been great if the Protestant Reformation had cleared things up with usury, but the legacy there is ambiguous. John Calvin was more sensible than most, though the temptation towards moralism still affected him. Economist Murray Rothbard writes,
Calvin's main contribution to the usury question was in having the courage to dump the prohibition altogether. This son of an important town official had only contempt for the Aristotelian argument that money is sterile. A child, he pointed out, knows that money is only sterile when locked away somewhere; but who in their right mind borrows to keep money idle? Merchants borrow in order to make profits on their purchases, and hence money is then fruitful. As for the Bible, Luke's famous injunction only orders generosity towards the poor, while Hebraic law in the Old Testament is not binding in modern society. To Calvin, then, usury is perfectly licit, provided that it is not charged in loans to the poor, who would be hurt by such payment. Also, any legal maximum of course must be obeyed. And finally, Calvin maintained that no one should function as a professional money-lender.
The odd result was that hedging his explicit pro-usury doctrine with qualification, Calvin in practice converged on the views of such scholastics as Biel, Summenhart, Cajetan and Eck. Calvin began with a sweeping theoretical defense of interest-taking and then hedged it about with qualifications; the liberal scholastics began with a prohibition of usury and then qualified it away. But while in practice the two groups converged and the scholastics, in discovering and elaborating upon exceptions to the usury ban, were theoretically more sophisticated and fruitful, Calvin's bold break with the formal ban was a liberating breakthrough in Western thought and practice. It also threw the responsibility for applying teachings on usury from the Church or state to the individual's conscience. As Tawney puts it, "The significant feature in his [Calvin's] discussion of the subject is that he assumes credit to be a normal and inevitable incident in the life of a society."
On the Old Testament law, Calvin was absolutely right. The regulations on loans between Israel were enmeshed in a system of sabbath years, prohibitions on selling land, and rules about slaves. No one is advocating that all agrarian production be halted every seven years and then for an additional year every fifty (so no growing crops for two successive years). And the land ownership system was based on a history of conquest that cannot and should not be duplicated. Those who advocate a ban on usury (which was not banned in all cases in Israel) are not being serious about the Bible. If they were, they would have to consider banning foreigners from owning land in the U.S. as an application of Biblical justice. No, I am not suggesting any such policy is Christian. And neither is condemning usury.
Furthermore, Jesus believed loaning money at interest was ethical (Matthew 25:27; Luke 19:23). If I thought it really mattered to people, I would say more about the Biblical context. But I don’t think it does.
Usury is merely the rent of money. If usury is sinful, then so is rent of anything else.
Claiming that rent is not inherently sinful is not the same as saying that all rental agreements are really in the best interests of the tenant. It is not the same as saying that all landlords are upright, either.
Frankly, I have never found a situation in which renting was just as advantageous as owning the asset. Likewise, being poor will always be a disadvantage to being rich. Legislation will never change that basic fact. Borrowing money is just a prominent manifestation of this disadvantage.
Your emotional reaction to things like payday loan companies does not justify legislative interventions. You need a reasonable basis for arguing that a proposed legislative intervention will make the people you claim to want to help actually better off. Reciting decontextualized Old Testament statements, or economic fallacies from classical philosophy that have been imported into Christian culture, is not sufficient.
Mark Horne has served as a pastor and worked as a writer. He is the author of The Victory According To Mark: An Exposition of the Second Gospel, Why Baptize Babies?,J. R. R. Tolkien, and Solomon Says: Directives for Young Men. He is the Executive Director of Logo Sapiens Communications and the writer for SolomonSays.net.