Usury vs interest

[TimV]

Have any of you giving this some thought? I tend to think of the prohabition against usury as profiting by your neighbor's misfortune, but I would like to here what the rest of you say.

On what grounds did Calvin allow interest?

Thanks.

 

[TimV]

PS, I know what I've heard, and can use google! I'm really hoping for some serious help. Didn't he write a letter to someone devoted to the subject?

Thanks much!

 

[VirginiaHuguenot]

The letter referred to is not in my edition of Letters of John Calvin so I can't comment on the contents, but this information may be of some assistance:

One school of thought about Calvinism long has been that it represented a revolt against the medieval condemnation of usury, and implicitly profit, helping to set the stage for the development of capitalism in northern Europe. Such a connection was advanced in influential works by R.H. Tawney and by Max Weber.

Calvin expressed himself on usury in a letter to a friend, Oekolampadius. In this letter, he criticized the use of certain passages of scripture invoked by people opposed to the charging of interest -- he re-interpreted some of these passages, and suggested that others of them had been rendered irrelevant by changed conditions.

He also dismissed the argument (based upon the writings of Aristotle) that it is wrong to charge interest for money because money itself is barren. He said that the walls and the roof of a house are barren, too, but it is permissible to charge someone for allowing him to use them. In the same way, money can be made fruitful.

He also said, though, that money should be lent to people in dire need without hope of interest.

Source: http://www.phatnav.com/wiki/index.php?title=John_Calvin

 

[TimV]

Thanks Andrew!
I saw that also. Can you help me find that letter?

 

[VirginiaHuguenot]

I think the letter is in Latin. Here is the citation I found through some research:

Ep. 383, in the collection of his letters and answers, Hanover, 1597.

 

[TimV]

Here is the reply from the Jewish scholar

"Yes, Hebrew distinguishes between legitimate interest and usury. Even legitimate interest, however, is ruled out in the Deutoronomy passage. "

So, can a Christian charge interest to another believer?

 

[TimV]

No one? It occures to me that perhaps this is a blind spot with us. I've got a loan to pay for my house. Is that wrong? I have always tended to think that Usury was "unjust" amounts of interest. But then we quickly get into arbitrary amounts.

All this easy credit offered has hurt many people, including Christians.

Have any of you thoughts? Or have any of you read up on the subject?
Thanks
(I'd hate to let my Jewish friend get the last word it!)

 

[ChristianTrader]

Originally posted by TimV
Here is the reply from the Jewish scholar

"Yes, Hebrew distinguishes between legitimate interest and usury. Even legitimate interest, however, is ruled out in the Deutoronomy passage. "

So, can a Christian charge interest to another believer?

Which exact passages are under discussion?

CT

 

[TimV]

Any of them! Can you charge/accept interest or no, from a fellow believer?

 

[Puritan Sailor]

The Jews were not allowed to charge each other interest. But they were allowed to charge foreigners interest for commercial purposes, not to exploit them.

Lev. 25:
35"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. 36Take no usury or interest from him; but fear your God, that your brother may live with you. 37You shall not lend him your money for usury, nor lend him your food at a profit. 38I 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.

Neh. 5
6And I became very angry when I heard their outcry and these words. 7After 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. 8And 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. 9Then 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? 10I also, with my brethren and my servants, am lending them money and grain. Please, let us stop this usury! 11Restore now to them, even this day, their lands, their vineyards, their olive groves, and their houses, also a hundredth of the money and the grain, the new wine and the oil, that you have charged them."

Duet. 23
20 To a foreigner you may charge interest, but to your brother you shall not charge interest, that the LORD your God may bless you in all to which you set your hand in the land which you are entering to possess.

 

[TimV]

Exactly. Now how does this apply to us?

 

[ChristianTrader]

I would recommend checking out Gary North on the subject. Go to www.freebooks.com and use the site search feature, to look up usury.

Here is one link to perhaps start with:

http://www.freebooks.com/docs/html/gnde/Chapter55.htm

CT

 

[VirginiaHuguenot]

Here's a recent article of interest which touches on the Muslim prohibition of usury in the sharia laws:

http://www.usatoday.com/money/perfi/general/2005-02-24-islamic-finance-usat_x.htm

Also here is more on Calvin's thoughts on usury:

Usury

Calvin also had insights into the workings of economics. It is his understanding of "usury" that interests us here. Calvin was part of a society that had forbidden the lending of money at interest for 750 years (since the council of Nicaea in 775). During that period many laws were passed against usury but as many ways around the law were found. It is in this context that Calvin brings new insight into society. Taking interest on loans was officially banned by canon law, but in practice was accepted by the community. In Geneva prior to the Reformation, interest rates were set at 5% per 3 months (Bieler 55).

By 1544 Calvin had "formulated a doctrine about lending money at interest" (55). According to Bieler, Calvin had been set free from the traditional views held by the medieval theologians. Calvin was no longer bound to the traditional views of the past and so was free to develop his own biblical ethics concerning the lending of money (56).

Turning to Scripture, Calvin found many instances in which the lending at interest was forbidden. These would have been the same passages to which canon law appealed; yet Calvin's interpretation was new, even revolutionary. Calvin allowed for the lending of money at interest. By applying new hermeneutical insights Calvin learned that the banning of usury was in relation to lending to the poor. God, according to Calvin, does not want His people to be tightfisted to the poor. In his commentary on the law Calvin interprets the ban on interest in Exodus 22:35 to be a command of charity to the poor and not a total ban on taking interest (Comm. Last Four Books of Moses, vol. 3, 126). In his commentary on Psalm 15:5 Calvin asks the question "Whether all kinds of usury are to be put into this denunciation, and regarded as alike unlawful" (Comm. on Psalms, 212). Again, Calvin points to the role of the rich and the necessity of kindness to the poor but goes on to say that a total ban on interest is not what the psalmist is advocating. If there is a total ban, the man in need of money, who will be sinning by borrowing money, will be "rendered bolder by despair, and may rush headlong into all kinds of usury . . ." (212).

However, Calvin cannot cast off the perception of the moneylender as a terrible man. He agrees with Cato that a moneylender is not much better than a murderer, for they are both "bloodsuckers." It is because those who lend money tend to turn to evil and lose all compassion for their brothers that God forbids usury (213). Calvin realizes that the lending for investment is different from lending to the poor. Therefore, he allows moneylending on a limited scale for the sake of developing business capital (Bieler 56).

Throughout his teaching on usury Calvin is painfully aware of the sinfulness of man. At every turn of phrase he points out the terrible dangers of lending money. Moneylenders turn into greedy and heartless men who will lend only to the rich, for they know they will receive a return on their investment. When lending to the poor, the moneylender plunders and devours them (Comm. on Psalms 213).

Calvin's teaching on usury is one of temperance and kindness. It is a teaching that dealt with the growing industrialization of the European city and the need for capital but still kept the biblical teaching on usury in sight. This teaching was one of compassion for the poor and steeped in a love for the neighbour.

Source: http://spindleworks.com/library/vanpopta/calvin.htm