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14501Re: Usury or the Charging of Interest on Money Lent

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  • forisraelssake
    Apr 12, 2006
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      > Do you mind expounding upon your position with historical examples?
      > In particular, I want to know more about this, "I believe it is
      > contrary to the known historical testimony of faithful church courts,
      > which never abolished commercial interest-bearing loans (so
      > far as I know)."
      >
      >

      Well my friend, how can I expand on it--by pointing to the lack of
      examples of faithful Reformed churches judicially outlawing usury in
      all cases everywhere? Well I just did that. Can you point to an
      example where that did happen? Isn't it be more your job to find
      relevant sections from the subordinate standards of the RPNA that
      justifies your all-usury-without-exception-is-wrong line of argument?
      The usury that is forbidden in Q142 of the Larger Catechism points to
      Ps. 15:5 where the term signifies unlawful interest, or that which is
      got by taking advantage of the necessity of a distressed neighbor (and
      not 'interest' simpliciter).

      In John Gill's commentary on that passage, which is certainly
      representative of the larger Calvinist community of thought (cf.
      Geneva Bible, Adam Clarke, Matthew Henry, Charles Spurgeon, J,F,&B),
      he writes:

      Psa 15:5 - He that putteth not out his money to usury,.... To the
      poor, in an extravagant and exorbitant way, by which he bites,
      devours, and destroys his little substance, and sadly afflicts and
      distresses him; see Exo_22:25; otherwise, to lend money on moderate
      interest, and according to the laws, customs, and usages of nations,
      and to take interest for it, is no more unlawful than to take interest
      for houses and land; yea, it is according to the law of common justice
      and equity, that if one man lends money to another to trade with, and
      gain by, that he should have a proportionate share in the gain of such
      a trade; but the design of this passage, and the law on which it is
      founded, is, to forbid all exactions and oppressions of the poor, and
      all avaricious practices, and to encourage liberality and beneficence;
      and such who are covetous, and bite and oppress the poor, are not fit
      for church communion; see 1Co_5:11

      The point is that while the bible outlaws usury on charitable loans (a
      charitable loan is not optional but morally compulsory) to brothers in
      the faith and to aliens who voluntarily live under God's laws, it does
      not forbid interest-bearing commercial loans.

      Interest on charitable loans forbidden:
      Exodus 22:25 "If you lend money to any of my people with you who is
      poor, you shall not be like a moneylender to him, and you shall not
      exact interest from him.

      Charitable loans declared morally compulsory:
      Deuteronomy 15:7-8 "If among you, one of your brothers should become
      poor, in any of your towns within your land that the LORD your God is
      giving you, you shall not harden your heart or shut your hand against
      your poor brother, (8) but you shall open your hand to him and lend
      him sufficient for his need, whatever it may be.

      Gary North has a good observation on how the critics of interest on
      commercial loans don't seem to apply their same logic to opposing rent
      on land:
      "...The critics of usury have generally viewed rent on land as
      legitimate. If I loan someone 20 ounces of gold and charge him one
      ounce per year in interest, I am viewed as a usurer and somehow
      morally questionable. If, on the other hand, I let the same person use
      my farm land, which is worth 20 gold ounces, and I charge him one
      ounce of gold per year as rent, I come under no criticism. Why this
      difference in opinion? In both cases, I give up something valuable for
      a period of time. I can either spend the gold or invest it in a
      business venture. Similarly, I can either sell the farm or plow it,
      plant it, and reap a crop. In both cases, I allow someone else to use
      my asset for a year, with which he can then pursue his own goals. I
      charge him for this privilege of gaining temporary control over a
      valuable asset. I charge either interest or rent because I do not
      choose to give away the income which my asset could generate during
      the period in which the other person controls it.

      "To expect me to loan someone my 20 ounces of gold at no interest is
      the same, economically speaking, as to expect me to loan him the use
      of my farm land on a rent-free basis."

      Do you require property must be bought outright or do you permit
      renting? Or to use an Ad Hominem Tu Quoque, do you rent or lease land,
      a house or apartment, a car or any other equipment? If so Julian, can
      you rebut North's argument?

      I strongly recommend reading North's paper that I linked to earlier.
      Unfortunately if I might say so, you don't seem very familiar with
      sound economic writers, or the role interest plays in allocating goods
      and services between individuals with competing time preferences. You
      use phrases like economic justice (which is a perfectly fine concept
      in theory when supporting the natural law rights of property owners
      against tyranny, coercion, and fraud) in ways that sound uncomfortably
      socialistic and Marxian. I don't think you have any leg to stand on
      with the historical testimony of the faithful in condeming commercial
      loans as a moral evil, and I am still interested in seeing if you
      condemn the institution of renting/leasing as well or if you are
      willing to rethink your entire economic paradigm. I pray you are.

      Chris
      Edmonton, AB
      RPNA
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