Losing Interest
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Losing Interest It is a commonplace observation that Anglicans today accept many practices which were the cause of controversy to earlier generations. Artificial contraception, for example, was the subject of heated debates even quite recently, yet is almost entirely accepted by Anglicans now. Another often-quoted example of a formerly controverted practice is that of usury — the lending of money at interest. The received understanding is that the Church once opposed this, but that increasing economic pressures forced a change of heart, as a result of which European economies were released from medieval restraint and enabled to become the prosperous societies we see today. Thus, we are told, the Church was shown to be as hopeless on the economic front as it was on the scientific. The persecution of Galileo and the handicapping of Western economics belong in the same, unenlightened, boat. Yet we see around us now a world of individuals and societies crippled with debts incurring the constant repayment of interest. And in the theology of the Middle Ages we find opposition to usury rooted not in a wooden adherence to the letter of Scripture, but in a deep concern for social justice. It is therefore, I would suggest, time for us to think again about the ‘wisdom’ of our denomination’s current stance. Law The immediate cause of the Church’s original ban on usury was, of course, the strictures of Old Testament Law: You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is [customarily] lent for interest. You may charge a foreigner interest, but you may not charge your brother interest, that the LORD your God may bless you in all that you undertake in the land that you are entering to take possession of it. (Deut 23:19-20) Our difficulty, however, is that there are many parts of the Law which we ignore. We wear clothing woven from different kinds of cloth and eat prawns, for example. Nevertheless, it must be admitted that there are other parts of the Law which we still uphold as binding. We do not permit murder or adultery, we do not tolerate sex with animals or incest, and so on. I have argued elsewhere1 that the key to the Law from a Christian perspective is its fulfilment in Christ. He has delivered us entirely from the Law, not only in its ceremonial prescriptions but its moral impact. However, the Law remains effective as Scripture, provided we understand the implications both of the laws themselves and their fulfilment. Some, such as the laws which established the division between Jew and Gentile, have been entirely subsumed in Christ. Others — those on murder or adultery for example — give way to the more demanding ethic of the New Testament, exemplified in the Sermon on the Mount (eg Matt 5:21-30). Morality Sometimes, however, the New Covenant implications for an Old Covenant Law are not entirely clear. Homosexuality is the current bête noir, but what about usury? Was this simply a ‘boundary marker’ between Jew and Gentile? The permission to levy interest on a foreigner might suggest so. But other Old Testament references imply a powerful moral dimension to this issue: O LORD , who shall sojourn in your tent? Who shall dwell on your holy hill? He ... who does not put out his money at interest and does not take a bribe against the innocent. (Psalm 15) To the Psalmist, usury and bribery belong together as instances of injustice. Or what about Ezekiel’s description of the evil son? ... who even eats upon the mountains, defiles his neighbor’s wife, oppresses the poor and needy, commits robbery, does not restore the pledge, lifts up his eyes to the idols, commits abomination, lends at interest, and takes profit (Ezek 18:11-13) The NIV here, incidentally, reflects the later assumption that taking interest per se is not the
2 issue: He does detestable things. He lends at usury and takes excessive interest. (vv 1213) But a glance back at Leviticus 25:35-37 confirms the ESV’s rendering: If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. ... You shall not lend him your money at interest, nor give him your food for profit. What Ezekiel condemns is taking any interest from the needy or profiting from their misfortune. After the restoration, Nehemiah also evidently feels this to be a moral issue, hence his fury against the Jewish nobles and officials who are taking advantage of the poor returnees: Let us abandon this exacting of interest. Return to them this very day their fields, their vineyards, their olive orchards, and their houses, and the percentage of money, grain, wine, and oil that you have been exacting from them. (Neh 5:10-11) In the Old Testament, then, usury is clearly a moral issue, particularly when it applies to the poor. Jesus Jesus also takes an oblique swipe at the extracting of interest in the parable of the talents. The third man, who simply kept his master’s money wrapped in a hanky, justifies it on the grounds that: ... you are a severe man. You take what you did not deposit, and reap what you did not sow. (Lk 19:21) To which his master replies, Why then did you not put my money in the bank, and at my coming I might have collected it with interest? (Lk 19:22-23) This is often taken as a statement of the minimal effort the servant should have made: if he would not trade, he could at least invest. But Luke’s ‘bank’ is the money lender’s table — the trapedza2 — and the irony is biting: ‘You know I take out what I haven’t put in and gain where I’ve made no effort? Then you should have lent my money to the money-lenders. Then I would at least have had some profit compatible with my character!’ Admittedly the rest of the New Testament is silent on the subject. Yet is this because (as has been argued about other matters) it was of no importance, or is it not rather more likely (given the evidence) that it was due to universal agreement? Certainly the early Church Fathers felt the latter, and thus, until the end of the Middle Ages, usury was regarded as immoral and therefore illegal under Canon Law. Luther Here, I must admit I am not a student of economics, much less the economics of medieval Europe. However, I have made a theologian’s study of some of the period, and am struck by Martin Luther’s stance on usury, particularly as it gives us some insights into the various practices of the time. Luther was opposed to all forms of usury, especially an arrangement known as zinsskauf — the purchasing of an asset with a fixed ‘rent’. Significantly, not everyone shared his view. Indeed the very existence of zinsskauf is testimony to the fact that there were various casuistical ways of overcoming the legal prohibitions and moral strictures against usury. One could, for example, arrange to make a ‘gift’ upon the repayment of a debt — not strictly interest, but nevertheless a real gain to the creditor. Still it was more or less universally agreed that usury was wrong.
3 However, whilst there were doubtless some who took this position on the grounds that ‘the Bible says so’, others, Luther amongst them, regarded the biblical injunctions as reflecting wider principles consistent with the whole thrust of Scripture. Specifically, the charging of interest contravened the command to love your neighbour: Such lenders love themselves alone and seek only their own; they do not love and look out for their neighbor with the same fidelity as they love and look out for themselves.3 On the contrary, Luther says, Christ’s command means that, ... we should willingly and gladly lend without charge or zinss. Of this our Lord Jesus Christ says in Matthew 5, ‘From him who would borrow from you, turn not away’; that is, do not refuse him.4 But, he continues, most people avoid this obligation: For all the doctors agree in this, that borrowing and lending shall be free, without charge or burden; though they do not all agree on the question to whom we ought to lend. For ... here too there are many who gladly lend to the rich or to good friends, more to seek their favor or because they are related to them than because God has commanded it [...]. But there is always trouble and labor about those to whom God’s command points; to them no one wants to lend [...].5 First and foremost, then, Luther is concerned to defend the poor, and he lays the words of Christ from the Sermon on the Mount on all Christians as an obligation, specifically rejecting the notion that they are a ‘counsel of perfection’ applying only to the ‘saintly’ minority. But Luther is not an unthinking literalist. There is no problem in taking a profit based on a loan, provided one shares the risk. Even zinss would be acceptable if the seller of zinss shared the risks of the purchaser who, in a bad year, could turn round and say, This year I owe you nothing, for I sold you my toil and effort for the production of income from such and such property; I have not succeeded. The loss is yours, not mine; for if you want to have an interest in my profits you must also have an interest in my losses, as the nature of every transaction requires.6 Clearly, therefore, Luther’s theology would not prohibit investment. What he will not brook is the charging of a fixed return, regardless of the borrower’s circumstances or fortune. This, he insists, is contrary to justice, contrary to nature and contrary to a true theology. In the real world there are risks corresponding to the fortunes visited on us by God. But that, Luther observes, is life. Indeed on the basis of his wider theology, we may infer that the attempt to shield oneself from risk is, in Luther’s eyes, a self-defeating attempt to avoid encountering the God who tries our faith through the difficult circumstances of the real world. Who can have faith in a good God who never experiences loss or hazard? The person who simply rakes in their percentage regardless is living in a world of delusion whilst fleecing the neighbour they have been commanded to love. Of course, Luther recognizes, this makes the lending business less attractive to some: Perhaps you will say, ‘If it were to be done this way, who would ever contract for zinss?’ See there! I knew perfectly well that human nature would turn up its nose at doing what is right. Now it comes out that in this zinss contract nothing is sought but security, greed, and usury.7 Luther is satisfied provided, in the words of many an advertisement, ‘the value of your investment can go down as well as up’. Trade and commerce are not prohibited (though Luther was convinced it was difficult to practice them Christianly), only practices which take advantage of other people who remain exposed to risk, whilst seeking to protect oneself from any such risks
4 in the process of taking their money. The present Yet, as is well-known, the Churches of Europe gradually abandoned their opposition to usury, such that today virtually all Christians have literally ‘bought into’ the present system. And this, it is frequently alleged, is an example of modern enlightenment overcoming ignorant prejudice. But what is the real effect of the change? One contemporary advertisement by a credit-card company depicts the alternative companies as a vampire sucking blood out of the hapless debtor. ‘Change to us,’ is the message, ‘And your problems will be solved.’ Yet the blood will still be sucked, albeit hopefully in smaller volumes! Or what about that biggest of all loans, the mortgage? How bizarre is it that the rocketing price of a basic need, namely shelter, is greeted as a sign of a healthy economy? If the same were happening regarding food, there would be a revolution. But because a mortgage is seen as ‘normal’ and a house as an ‘investment’, people eagerly saddle themselves with massive debtrepayments, even if, as is often the case, it means two people in a household working just to manage. In fact, of course, the price of houses has not gone up, only the cost of servicing the debt of money-lenders like the Halifax and Nationwide. And, in itself, a house is no more an investment than is a pair of shoes. (You can’t sell what you’re using!) But those who can afford it have swallowed the prosperity myth and in the process force the poorer members of society into crippling debt or out of the market altogether. In June this year, individual Britons borrowed £10 billion. This is roughly £2,000 per annum for every man, woman and child in the country. On a ‘modest’ 15% interest rate, the repayment figure would be £2,300 — but of course people do not generally repay all the loan. Instead, they incur interest, and hence interest on the interest itself, so that a £2,000 loan can easily become a £3,000 repayment, of which £1,000 buys literally nothing. Thus although the credit system is not always directed at the poor, it certainly impoverishes the borrower. And this is not to mention loan sharks or Third World Debt, about which latter the Church of England has been very vocal whilst saying comparatively little about the appalling debt in this country. Of course some individuals and countries might have been wiser in their borrowing. There have, no doubt, been cases of greed as well as need. But who, in the long term, is the greedier — the foolish debtor, or the leech-like creditor who, having been repaid several times over, still cries ‘Give, give’? Realism Of course, many will say it is being unrealistic to challenge the existing financial order. But if it can be demonstrated that the present system is oppressive to the less-well-off, deceptive to the financially unwise and damaging to all, then surely it is not wrong to question? The real problem is how to challenge the present system and how to avoid becoming embroiled in it. Frankly, I don’t know what to do on the macro-economic scale. That is for the experts to consider. In the meantime, however, here are some bits of practical advice for consideration by individuals: •
You may need a credit card for some payments, but always pay it off every month.
•
Cancel your deposit account at the bank. The money you are making is money the bank is taking from others.
•
Invest by all means, but only where the value can go down as well as up. OK, you may lose out, but ‘better to be poor with God than rich with the devil’. If in doubt, stick to a current account.
•
If you want to buy a house, use one of the banks currently making special arrangements for Muslims.
5 •
Call on the Church of England’s finance officers to look at their investment portfolios.
•
Challenge not just Third World Debt but First and Second World lending.
•
Remember, however, loans are not the issue. Risk-free, fixed-interest money lending is the issue.
•
Give to the one who begs from you, and do not refuse the one who would borrow from you.
Revd John P Richardson United Benefice of Henham, Elsenham and Ugley
Notes 1.
What God has Made Clean, The Good Book Company, 2003
2.
Arndt, Gingrich, Danker, & Bauer, A Greek-English lexicon of the New Testament and other early Christian literature, (Chicago: University of Chicago Press, 1979)
3.
‘Trade and Usury’, 1524, LW 45, 293
4.
Ibid 289
5.
Ibid 289-290
6.
Ibid 303
7.
Ibid 304
2 issue: He does detestable things. He lends at usury and takes excessive interest. (vv 1213) But a glance back at Leviticus 25:35-37 confirms the ESV’s rendering: If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. ... You shall not lend him your money at interest, nor give him your food for profit. What Ezekiel condemns is taking any interest from the needy or profiting from their misfortune. After the restoration, Nehemiah also evidently feels this to be a moral issue, hence his fury against the Jewish nobles and officials who are taking advantage of the poor returnees: Let us abandon this exacting of interest. Return to them this very day their fields, their vineyards, their olive orchards, and their houses, and the percentage of money, grain, wine, and oil that you have been exacting from them. (Neh 5:10-11) In the Old Testament, then, usury is clearly a moral issue, particularly when it applies to the poor. Jesus Jesus also takes an oblique swipe at the extracting of interest in the parable of the talents. The third man, who simply kept his master’s money wrapped in a hanky, justifies it on the grounds that: ... you are a severe man. You take what you did not deposit, and reap what you did not sow. (Lk 19:21) To which his master replies, Why then did you not put my money in the bank, and at my coming I might have collected it with interest? (Lk 19:22-23) This is often taken as a statement of the minimal effort the servant should have made: if he would not trade, he could at least invest. But Luke’s ‘bank’ is the money lender’s table — the trapedza2 — and the irony is biting: ‘You know I take out what I haven’t put in and gain where I’ve made no effort? Then you should have lent my money to the money-lenders. Then I would at least have had some profit compatible with my character!’ Admittedly the rest of the New Testament is silent on the subject. Yet is this because (as has been argued about other matters) it was of no importance, or is it not rather more likely (given the evidence) that it was due to universal agreement? Certainly the early Church Fathers felt the latter, and thus, until the end of the Middle Ages, usury was regarded as immoral and therefore illegal under Canon Law. Luther Here, I must admit I am not a student of economics, much less the economics of medieval Europe. However, I have made a theologian’s study of some of the period, and am struck by Martin Luther’s stance on usury, particularly as it gives us some insights into the various practices of the time. Luther was opposed to all forms of usury, especially an arrangement known as zinsskauf — the purchasing of an asset with a fixed ‘rent’. Significantly, not everyone shared his view. Indeed the very existence of zinsskauf is testimony to the fact that there were various casuistical ways of overcoming the legal prohibitions and moral strictures against usury. One could, for example, arrange to make a ‘gift’ upon the repayment of a debt — not strictly interest, but nevertheless a real gain to the creditor. Still it was more or less universally agreed that usury was wrong.
3 However, whilst there were doubtless some who took this position on the grounds that ‘the Bible says so’, others, Luther amongst them, regarded the biblical injunctions as reflecting wider principles consistent with the whole thrust of Scripture. Specifically, the charging of interest contravened the command to love your neighbour: Such lenders love themselves alone and seek only their own; they do not love and look out for their neighbor with the same fidelity as they love and look out for themselves.3 On the contrary, Luther says, Christ’s command means that, ... we should willingly and gladly lend without charge or zinss. Of this our Lord Jesus Christ says in Matthew 5, ‘From him who would borrow from you, turn not away’; that is, do not refuse him.4 But, he continues, most people avoid this obligation: For all the doctors agree in this, that borrowing and lending shall be free, without charge or burden; though they do not all agree on the question to whom we ought to lend. For ... here too there are many who gladly lend to the rich or to good friends, more to seek their favor or because they are related to them than because God has commanded it [...]. But there is always trouble and labor about those to whom God’s command points; to them no one wants to lend [...].5 First and foremost, then, Luther is concerned to defend the poor, and he lays the words of Christ from the Sermon on the Mount on all Christians as an obligation, specifically rejecting the notion that they are a ‘counsel of perfection’ applying only to the ‘saintly’ minority. But Luther is not an unthinking literalist. There is no problem in taking a profit based on a loan, provided one shares the risk. Even zinss would be acceptable if the seller of zinss shared the risks of the purchaser who, in a bad year, could turn round and say, This year I owe you nothing, for I sold you my toil and effort for the production of income from such and such property; I have not succeeded. The loss is yours, not mine; for if you want to have an interest in my profits you must also have an interest in my losses, as the nature of every transaction requires.6 Clearly, therefore, Luther’s theology would not prohibit investment. What he will not brook is the charging of a fixed return, regardless of the borrower’s circumstances or fortune. This, he insists, is contrary to justice, contrary to nature and contrary to a true theology. In the real world there are risks corresponding to the fortunes visited on us by God. But that, Luther observes, is life. Indeed on the basis of his wider theology, we may infer that the attempt to shield oneself from risk is, in Luther’s eyes, a self-defeating attempt to avoid encountering the God who tries our faith through the difficult circumstances of the real world. Who can have faith in a good God who never experiences loss or hazard? The person who simply rakes in their percentage regardless is living in a world of delusion whilst fleecing the neighbour they have been commanded to love. Of course, Luther recognizes, this makes the lending business less attractive to some: Perhaps you will say, ‘If it were to be done this way, who would ever contract for zinss?’ See there! I knew perfectly well that human nature would turn up its nose at doing what is right. Now it comes out that in this zinss contract nothing is sought but security, greed, and usury.7 Luther is satisfied provided, in the words of many an advertisement, ‘the value of your investment can go down as well as up’. Trade and commerce are not prohibited (though Luther was convinced it was difficult to practice them Christianly), only practices which take advantage of other people who remain exposed to risk, whilst seeking to protect oneself from any such risks
4 in the process of taking their money. The present Yet, as is well-known, the Churches of Europe gradually abandoned their opposition to usury, such that today virtually all Christians have literally ‘bought into’ the present system. And this, it is frequently alleged, is an example of modern enlightenment overcoming ignorant prejudice. But what is the real effect of the change? One contemporary advertisement by a credit-card company depicts the alternative companies as a vampire sucking blood out of the hapless debtor. ‘Change to us,’ is the message, ‘And your problems will be solved.’ Yet the blood will still be sucked, albeit hopefully in smaller volumes! Or what about that biggest of all loans, the mortgage? How bizarre is it that the rocketing price of a basic need, namely shelter, is greeted as a sign of a healthy economy? If the same were happening regarding food, there would be a revolution. But because a mortgage is seen as ‘normal’ and a house as an ‘investment’, people eagerly saddle themselves with massive debtrepayments, even if, as is often the case, it means two people in a household working just to manage. In fact, of course, the price of houses has not gone up, only the cost of servicing the debt of money-lenders like the Halifax and Nationwide. And, in itself, a house is no more an investment than is a pair of shoes. (You can’t sell what you’re using!) But those who can afford it have swallowed the prosperity myth and in the process force the poorer members of society into crippling debt or out of the market altogether. In June this year, individual Britons borrowed £10 billion. This is roughly £2,000 per annum for every man, woman and child in the country. On a ‘modest’ 15% interest rate, the repayment figure would be £2,300 — but of course people do not generally repay all the loan. Instead, they incur interest, and hence interest on the interest itself, so that a £2,000 loan can easily become a £3,000 repayment, of which £1,000 buys literally nothing. Thus although the credit system is not always directed at the poor, it certainly impoverishes the borrower. And this is not to mention loan sharks or Third World Debt, about which latter the Church of England has been very vocal whilst saying comparatively little about the appalling debt in this country. Of course some individuals and countries might have been wiser in their borrowing. There have, no doubt, been cases of greed as well as need. But who, in the long term, is the greedier — the foolish debtor, or the leech-like creditor who, having been repaid several times over, still cries ‘Give, give’? Realism Of course, many will say it is being unrealistic to challenge the existing financial order. But if it can be demonstrated that the present system is oppressive to the less-well-off, deceptive to the financially unwise and damaging to all, then surely it is not wrong to question? The real problem is how to challenge the present system and how to avoid becoming embroiled in it. Frankly, I don’t know what to do on the macro-economic scale. That is for the experts to consider. In the meantime, however, here are some bits of practical advice for consideration by individuals: •
You may need a credit card for some payments, but always pay it off every month.
•
Cancel your deposit account at the bank. The money you are making is money the bank is taking from others.
•
Invest by all means, but only where the value can go down as well as up. OK, you may lose out, but ‘better to be poor with God than rich with the devil’. If in doubt, stick to a current account.
•
If you want to buy a house, use one of the banks currently making special arrangements for Muslims.
5 •
Call on the Church of England’s finance officers to look at their investment portfolios.
•
Challenge not just Third World Debt but First and Second World lending.
•
Remember, however, loans are not the issue. Risk-free, fixed-interest money lending is the issue.
•
Give to the one who begs from you, and do not refuse the one who would borrow from you.
Revd John P Richardson United Benefice of Henham, Elsenham and Ugley
Notes 1.
What God has Made Clean, The Good Book Company, 2003
2.
Arndt, Gingrich, Danker, & Bauer, A Greek-English lexicon of the New Testament and other early Christian literature, (Chicago: University of Chicago Press, 1979)
3.
‘Trade and Usury’, 1524, LW 45, 293
4.
Ibid 289
5.
Ibid 289-290
6.
Ibid 303
7.
Ibid 304
