On usury

In comments to this earlier post, Matthew asks:

"Doesn't the usury condemned in the Bible refer to lending at interest — *any* interest, not just exorbitant interest?"

That's how most early Christians understood it. That point of view makes a lot of sense, too, when you read passages from the Bible like Nehemiah 5:7-11, in which the prophet excoriates as "usury" the charging of 1 percent:

"You are exacting usury from your own countrymen! … What you are doing is not right. … I and my brothers and my men are also lending the people money and grain. But let the exacting of usury stop! Give back to them immediately their fields, vineyards, olive groves and houses, and also the usury you are charging them — the hundredth part of the money, grain, new wine and oil."

The prohibition against usury — meaning any interest — lived on for centuries in the church, right on up through Reformers like Martin Luther.

Yet this is no longer what Christians mean when they condemn usury. Now we mainly mean, as Matthew put it, the charging of "exorbitant" interest. And the definition of exorbitant, it turns out, is extremely elastic. (According to 74 U.S. senators, even interest rates in excess of 30 percent cannot be considered exorbitant or usurious.)

The Catholic Encyclopedia offers a pithy explanation of this change in Christian thinking in its entry on "Interest":

What is the reason for this change in the attitude of the Church towards the exaction of interest… this difference is due to economical circumstances. The price of goods is regulated by common valuation, and the latter by the utility that their possession ordinarily brings in a given centre. Now, today, otherwise than formerly, one can commonly employ one's money fruitfully, at least by putting it into a syndicate. Hence, today, the mere possession of money means a certain value. Whoever hands over this possession can claim in return this value. Thus it is that one acts in demanding an interest.

In other words: we have markets now, so we've adapted to a changing world.

There's a more in-depth, detailed discussion of the … let's say, increasing sophistication of Christian thinking about lending at interest under the encyclopedia's fascinating entry on "usury." The author seems mightily uncomfortable with the task of reconciling the current permission with the former prohibition without implying that either might be more correct than the other.

So yes, the early Christians condemned "usury" — by which they meant the charging of any interest. And contemporary Christians condemn "usury" — by which we mean the charging of exorbitant/excessive/exploitative interest. The meaning of usury has evolved, but the severity of the condemnation is unchanged.

Here's more from that Catholic Encyclopedia entry on usury. It's a passage I wish my allegedly devout Catholic senator, Rick Santorum, had considered before voting to endorse interest rates in excess of 30 percent:

Lending money at interest gives us the opportunity to exploit the passions or necessities of other men by compelling them to submit to ruinous conditions; men are robbed and left destitute under the pretext of charity. Such is the usury against which the Fathers of the Church have always protested, and which is universally condemned at the present day. … It is in itself unjust extortion, or robbery. The sin is frequently committed. In some countries are found the exaction of interest at 30, 50, 100 percent and more. …

The precise word used there, the precise word for the precise thing that Sen. Santorum has precisely embraced, is "sin."