Usury normalized in US capitalism

murphyUpon college graduation, there’s often a flurry of questions and concerns facing university students in America.

Where can I find a job? Will I find one at all? Would mom and dad let me move back in? Why did I major in this stupid field?

Perhaps the most pressing of all in this modern age: How will I pay back these loans?

 

 

A New York Times article titled “A Generation Hobbled by the Soaring Cost of College” reports, “About two-thirds of bachelor’s degree recipients borrow money to attend college, either from the government or private lenders, according to a Department of Education survey of 2007-8 graduates.”

Given the immense cost of college, loans are often the only feasible way to finance the pursuance of a bachelor’s degree. Students are just one of the many groups to begrudgingly accept loans as an inevitable means of reaching goals.

This attitude has not been consistent throughout history.

Loaning money with interest used to be described as “usury,” and was considered a grave sin. Dante Alighieri’s 14th century epic goes so far as to describe usurers — or lenders of money at interest — as inhabitants of the seventh circle of hell, ahead of violators like murderers and blasphemers. His claim is founded upon the idea that the origination of money that was has no value to back it is an affront to God and creation.

Alighieri’s philosophy is not without a base in religious history.

The gospel of Luke states “And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. But love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be children of the Most High, because he is kind to the ungrateful and wicked.”

Ezekiel 18:12-13 is a little more harsh and condemns usurers: “Oppresses the poor and needy, commits robbery, does not restore a pledge, but lifts up his eyes to the idols and commits abomination, he lends money on interest and takes increase; will he live? He will not live!”

This denunciation in Proverbs touches on the idea that loaning with interest provides essentially free money for those in a higher economic standing and creates a situation in which “the rich rule over the poor, and the borrower is slave to the lender.”

This is quite a far shout from a modern world whose entire economic system is built upon the practice of lending with interest. Stocks and bonds, the objects of business trading, are debt securities. The issuer of the security owes the holder interest and the principal sum of the purchased stock or bond, and must pay this at a later time, termed the maturity date.

Even 500 years ago, we may have called this institutionalized immorality. Today, we call it Wall Street.

The 2008 financial crisis triggered by the bursting of the U.S. housing bubble was blamed on “high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

Even after enduring the catastrophes that can be associated with debt securities, one would have to be insane to entertain the notion of a world bereft of loans and interest.

Although our religious texts are remarkably unequivocal on the baseness of usury, the progression of our culture has normalized it to the point that few people at all would consider it controversial.

Can society bury sin? I think the example of usury provides us with a resounding “Yes.”

Reach the columnist at bjmurph2@asu.edu or follow him on Twitter @MurphJamin