Following the great flood, the earth once again was repopulated by the sons of Noah; Shem, Ham, and Japheth. An incident in Noah’s tent revealed Ham to be a wicked man. Noah cursed Ham’s offspring, and ascribed a blessing to Shem and Japheth. A grandson of Ham was Nimrod (Genesis 10:6-8), who became great and founded Babylon (v.10). A descendant of Shem, one of the blessed, was Abram (later known as Abraham, Genesis 11: 10- 27). God made a covenant with Abram, to make him a great nation and a blessing to all the earth (Genesis 12:1-3). He called Abram out of Mesopotamia, specifically out of Ur, a sister city with Babylon in the plain. It was in this “plain in the land of Shinar” that the offspring of Ham gathered to build the Tower of Babel (Genesis 11:1-4). They sought to build this city and tower as a monument to themselves; in order to make a name for themselves (v. 4). This was the ungodly company out of which God called Abram. The godly, such as Abram and his offspring, receive the name God bestows upon them; they do not seek to make their own name. They do not seek to establish themselves in the earth independently, but acknowledge their Creator who alone establishes and displaces peoples and kingdoms according to His own good pleasure. They receive their law from the mouth of God, rather than creating it out
of their own sinful minds. So it was that Abram listened to God, and followed Him out of Ur. And so it was that God gave His law to Abram’s descendants, who became the people of God – Israel. Meanwhile, in Babylonia sinful men were busy making their own laws, and becoming the people – or rather the serfs – of their self-exalted rulers. From the depths of their respective foundations to the furthest extent of their respective structures, Israel and Babylon represent two utterly opposed and irreconcilable religions, philosophies, and law-systems. They may be spoken of in the broad generalities suggested to us by Augustine – “The City of God”, and “the earthly city”. Their differences may be explored endlessly, however the present purpose is to recount the impetus each has given to the phenomenon of usury. Israel, as The City of God, held in the law of God the fountain of all opposition to usury, which endures to this day. Babylon, with its antithetical Code of Hammurabi, became the originator of usury and the cultivator of idolatrous plunder and covetousness, also which endures to this day. It shall be instructive to explore these two sources, for their respective characters shall add convincing proofs of the unlawfulness of usury.
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Augustine, The City of God, Bk 1
According to the modern perspective “interest” commonly is thought of in terms of a loan of money, however, “interest”, or usury, was present in ancient economies as far back as records go; even before there was any such thing as money. Earliest records show that ancient trade at first was what now is called “barter”. As civilization began reconstruction following the flood (Genesis 9-11) each household generally produced what it needed. This included growing or hunting food, constructing shelters, and manufacturing clothing, vessels, and other household articles. Men were able to imagine greater quality and quantity of goods
than they actually were able to produce. This is not surprising, since men still experience such limitations to this day. However, the ancient limitations were much more restrictive than what are now experienced. Back then, men were for the most part limited to whatever natural resources they had on hand, and were resigned to produce only those articles as their own personal talents would allow. The desire for abundance of quality as well as quantity – whatever the motivation –
sparked the creativity of men to overcome the limits that they experienced. They learned to accumulate a surplus of easily produced goods, and trade them in barter for other goods that were needed. For instance, one who was particularly talented in making rope could feel fairly secure in devoting a substantial portion of his time and energy torope-making because he knew that others similarly were devoting themselves to making other things, for which he could trade his surplus of rope. Also, men of one region could concentrate on the production of goods that required natural resources which were indigenous to their land, and trade the surplus of them for goods produced in other regions with resources that they themselves lacked. For instance, an area rich in iron ore could produce an abundance of goods, such as tools, that are useful all over the world, and trade from their surplus for some other goods, like spices, which are found only in another part of the world. In this way, a great variety of expertly made goods was made available all over the then known world. This was what economists call a “natural economy”.
All was not, however, one happy household. The sinfulness of men had expanded the violence which Cain had perpetrated upon Abel into a deep-set enmity among peoples. In the manner of “the earthly city”, some men sought to exalt themselves by means of subjugating other men. The needs of men’s military pursuits provided the necessity which became the mother of invention. Transportation methods, particularly sea travel, began to be developed, though they would require centuries to perfect. Advancing technologies and methods not only made military campaigns
more successful, but also provided for more efficient transportation of goods.
However, travel by any means was hazardous over great distances, due to roving pirates and bandits. The strong centralized governments of the ancient world realized the advantages of vigorous trade, and provided security for the transportation of goods. Such security was effective against alien threats, however, kingdom after kingdom in the ancient world succumbed to internal strife and
disintegration. The causes of such internal turmoil were many, but certainly not the least cause was usury. One historian maintains: “Interest probably originated in Babylonia, and debt and excessive interest were burdensome. The usual rate was twenty per cent, though higher rates were frequent. ” The pagan religious order was the center of life, including commercial life. Their pagan temples served also as banks, and the priesthood as bankers. Their banking functions were surprisingly advanced; offering commercial contracts, checking, and promissory notes. A central feature of Babylonian banking was usury.
Ancient usury occurred in the form of the granting of a loan on condition that the borrower repays more than was loaned. Due to natural conditions, such as drought, or conditions imposed by man, such as the ravages of war, it was not at all uncommon for some men to find themselves in want. Usually, the goods that could meet their need were available, but the problem was that they had nothing to trade in order to acquire them. Those having a surplus of the desired good were in a position to make a loan, but all too commonly would not do so unless the borrower committed to repay a greater quantity of like quality goods. Also, loans typically were made only on personal security, or the security of one’s property (including his family). The requirements to
1) repay more than was loaned and
2) offer security of person or property, proved to be a double edged sword.
The stipulation that more be repaid than was loaned amplified the likelihood that repayment could not be completed, and upon default, the nature of the loan security meant that the borrower and/or his family entered into slavery to the usurer, or that all of his property was confiscated by the usurer. Of course, this system only served to increase the abundance of those with an abundance, and the want of those in want.
It was this abundance of some and want of others that tended to stratify ancient societies. It was a “classic” case of the rich getting richer and the poor getting poorer. The Ancient world dramatically illustrated the truth of Proverbs 22:7, “The rich roles over the poor, and the borrower becomes the lenders slave.” Usury was
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C.A. Herrick, History of Commerce and Industry (New York: Macmillan,1920),
p.32
a wedge that only widened this breech. The lender was in a position to make a loan because he had an abundance of a desired good. The borrower was in the position of seeking a loan because he suffered lack. Unless he was a usurer himself, the
borrower made his gains honestly, through his own productive efforts, or through trade. Yet he found that usury ate away his gains. He experienced himself working and sweating, but the output of his work did not sustain himself and his household to the extent that it would have were it not encumbered by usury. The usurer, on the other hand did not sweat, nor did he toil. He simply made a loan. Perhaps he made several loans.Then he sat back and watched while the measure of wheat that he loaned out came back to him as 1.5 measures of wheat. He reaped great gains, yet he engaged in no productive effort, nor did he engage in trade. Great fortunes were acquired by this means. Overlords arose displaying great wealth that was produced by the sweat of others. Also, these overlords became masters of many slaves by means of foreclosure. Time and again, such slavery became so massive, and the class polarization so great, that revolution resulted. Such disintegration was inevitable because that which was loaned was in finite supply. Usury is a monster that feeds upon itself. Having to repay more than was loaned imposes an immediate hardship. As a number of debtors enter into competition with one another – not to produce the best quality product at the lowest price – but to comer enough scarce resources to meet his debts and usury, the prospects of repayment dwindle. New loans arise in order to maintain the usury payments on the initial loan. If the process survives a rash of defaults without debilitating social chaos spawned by frustrated debtors, it eventually will reach the point of arithmetic impossibility. There simply will not be enough goods in existence to pay all of the debts with usury.
This sort of scenario was prevalent in the ancient world, however, there was one society that stood out as opposite to this in every respect. They had ideals which condemned usury, and instead required that one look with compassion and love upon one’s fellow countryman who had become needy; requiring free loans to such a one. That society was ancient Israel. Their law was the law of God. The practice of usury was not unknown to the people Israel. In their language they had characterized the practice most fittingly as a bite (Heb. Neshek). This was not the consuming bite of a lion, but the poisonous nip of a serpent. Usury does not all at once destroy a man or a nation with, as it were, one bloody gulp. Rather, it slowly, sometimes nearly imperceptibly, subverts the victim’s constitution until he cannot prevent the fatal consequences even though he knows what is coming. This subtle violence was not only appropriately named, but also was condemned in Israel’s law. On three occasions in the giving of the law, God admonished His people to be free from this sin (Exodus 22:25, Leviticus 25:35-37, Deuteronomy 23:19).
These texts and others will be discussed more thoroughly in a following chapter; the following observations shall suffice for the present discussion. There actually is no Hebrew word to be translated “money”. The word translated as “money” in Exodus 22:25 and Deuteronomy 23:19 literally is to be rendered “silver”, as it is in Leviticus 25:37. It is evident that by the time of the giving of this law, it was common for loans to be made of exchange media. However, direct loans of needed goods were not entirely unknown, and in order that the law may explicitly be understood to cover loans of every sort, and therefore to prohibit usury in every case, Deuteronomy 23:19 specifies “interest on money, food, or anything that may be loaned at interest.”
Not only the law, but the Prophets as well condemned this covetous evil. An example is Ezekiel chapter 18. The prophet is contrasting the righteous and the wicked. The righteous man is characterized as one who is free from idolatry, not oppressive, does not commit robbery, is gracious to the needy, executes true justice, keeps the statutes and ordinances of God, and “does not lend money on interest” (v.5-9). The wicked man is characterized as entirely opposite to this. He “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” v.12-13a. The prophet continues, “will he live? He will not live! He has committed all these abominations, he will surely be put to death; his blood will be upon his own head” (v.l3b).
The social chaos that necessarily results from rampant usury need not plague a law-abiding people. Though they had the law according to which they could live as a free and prosperous people, Israel was unfaithful, and succumbed to the enticing sins of the pagan peoples. As a consequence, they spent seventy years in captivity to Babylon. But God had prepared the hearts of a new generation to return to Him and to His law. Under the leadership of Nehemiah, a remnant returned to Jerusalem to rebuild the city. The book of Nehemiah tells the story. Chapter 5 tells of a problem that had beset the people. Usury had begun to subvert the brotherhood of
the remnant. Some held mortgages on their brother’s fields, vineyards, and houses, which they felt compelled to mortgage in order to buy food.
The complaint of the borrowers arose, “And now our flesh is like the flesh of our
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The Reader is reminded of the significance of italics in the New American Standard translation. It indicates a word supplied by the translators that does not occur in the original text.
brothers, our children like their children. Yet behold, we are forcing our sons and daughters to be slaves, and some of our daughters are forced into bondage already, and we are helpless because our fields and vineyards belong to others.” (v.5) Nehemiah discerned the nature of the problem. ”Then I was angry when I heard their outcry and these words. And I consulted with myself, and contended with the nobles and the rulers and said to them, ‘You are exacting usury, each from his brother!’ Therefore, I held a great assembly against them.” (v.6,7) In then assembly Nehemiah explained to them their sin of usury, and demanded that they not only repent, but also return the fields and vineyards that were seized through usury. It is evident that this was a remnant of the City of God, for their repentance came quickly and cheerfully. The repentant usurers declared, “We will give it back and will require nothing from them; we will do exactly as you say.” (v.12) Their society was healed of this sin, and was restored.
Countless times pagan societies were in this same situation, and instead of humility and repentance, there was revolution, bloodshed, and chaos. The City of God calls her inhabitants to exalt not themselves, but God. The people of God are to act not according to the base instincts of their sinful hearts, but are to instruct their hearts with the law of God. In keeping with their paganism, godless people indulge in self-gratification. The restraining influence of their man-made laws usually arises from practical necessity; sometimes it is practical to oppose usury rather than to
risk revolution. Ancient history records numerous instances when debts were forgiven. This usually happened when power changed hands, and power changed hands not only after wars, but after debtor uprisings as well. Debt forgiveness was a very popular tactic for new rulers, but in pagan societies it only mimicked godly justice. Such remissions were cheap imitations of God’s law, which were born not of righteousness, but of pragmatic necessity. As such they were witnesses against the essentially pagan and godless economies that spawned their necessity. In ancient Babylonia, these edicts of remission of debts were called misarum, which
literally means “justice” or “equity”. If the cancellation of debts was called “justice” by the ancient Babylonians, it is little wonder that they called the usury itself sibtu , a “seizure”.
By the time of the height of Babylonia (about 2000 B.c.) trade had developed to the point that men began to “mediate” their exchanges with goods that had more or
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James B. Pritchard, introductory essay to “The Edict of Ammisaduqa” in, Pritchard, ed., Ancient Near Eastern Texts (Princeton: Princeton University Press, 1969), p.526
less universal appeal. In Babylonia this was silver. This was not in coins, but lumps, and was traded by weight. Babylonia achieved a highly developed and active trade, which was served by an elaborate system of weights and measures. The well known “shekel” was part of this system. (In Genesis 23:16 Abraham bought a burial site for Sarah for “four hundred shekels of silver”). This was an example of a most significant trade development known as “mediation of exchange”. This type of exchange was devised to overcome further limitations on the productive creativity of man. Personal limitations were answered by trading with other people and other lands, as was noted above. But the possibilities that this created only served eventually to reveal in time a new type of limitation. If men acquire goods from other men through trade, what can be done if one cannot easily find another who desires what he has to offer? Cunningham illustrates this problem of the exchange: “I have a coat which I want to exchange for bread; you have bread which you want to exchange for boots; unless a third party comes on the scene it may be impossible for us to arrange any terms at all.” Cunningham goes on to recount an anecdote from the ancient market concerning an unfortunate
would-be trader: “He may be seen wandering in the Bazaar with a ball of beeswax in his hand for days together, because he can’t find anybody willing to take it for the exact article he requires.” R.C. Sproul, Jr. theorizes how an ancient hermit economist might have addressed such a problem. He comes up with a most improbable solution.
The hermit, the great economic thinker of his community, searched long and hard for a solution. After many sleepless nights it dawned on him. He entered the market the following day armed with a bundle of high quality spears and an armful of clay tablets. The tablets bore this inscription: The holder of this tablet may redeem it for one spear.’ A frustrated skinmaker approached the hermit, bemoaning the limits of their barter system. The hermit, whose skins were threadbare, offered a tablet to the skinmaker. The skinmaker explained that he had no need for a spear at the present time. The hermit explained that somebody undoubtedly would in the near future, someone who perhaps had something the skinmaker would want. The two made a deal. The skinmaker traded a skin for a tablet, which he redeemed for a small bear (skin intact) before the day was done.
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W. Cunningham, The Growth of English Industry and Commerce (1910; New
York: A.M Kelly, 1968), YoU, p.1l6
IBID
The hermit’s new idea did not take hold instantly, but eventually all producers installed tablets into their market proceedings. Thus money began.
This is a quite unfounded account of the origin of exchange media. In the ancient world it would have been unthinkable to trade goods for clay tablets, no matter what they said. The Babylonians used clay tablets as a means of recording contracts and debts, but these did not circulate as exchange media. Production of goods was too difficult, and transportation of goods too hazardous, for the ancient man to give up his wares for clay tablets and to assume that the promise on its face would ever be paid. Needed was a universally desired good, which could be accumulated in surplus, and traded anywhere, anytime, with anyone, for other goods that are particularly desired. Exchange still occurs, only one party to the
exchange would receive some good which does not service a particular felt need, but which he knows he will be able to pass on to someone else in exchange for such need-servicing goods. This is not to say that such a mediating good has no useful purpose, but only that the desire for such a good is universal enough that one would not think it too risky to acquire more of it than he actually may need, knowing that he surely will be able to use the surplus in future exchanges. Goods which have served this purpose in antiquity have been many. Durant reports, “There is hardly anything that has not been employed as money by some people at some time: beans, fish-hooks, shells, pearls, beads, cocoa seeds, tea, pepper, at last sheep, pigs, cows, and slaves.” The great commercial advances of Babylonia were a result of the emergence of silver and gold as the premier media in exchange (it is invalid to follow Durant in calling them “money” at this point, as shall become clearer below). The universality of their appeal was greater than any other article, thus exchange could occur over the widest possible space. The limitations on trade were reduced to the technical and security problems of transportation. The use of such media to enhance trade was a key feature in the transition from the
“natural economy” to what economists term a “money economy”.
However, the development of exchange media also had consequences for the matter of loans and usury. With a universally valued exchange medium, loans were more easily given, since it no longer was necessary to loan the very goods that were needed. All one needed in order to become a professional usurer was a store of silver or gold. A quantity of these metals could be loaned to anyone who
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R.C. Sproul, Jr., Money Matters (Wheaton: Tyndale House, 1985), p.67
Will Durant, The Story of Civilization (New York: Simon & Shuster, 1954),
YoU, p.15
suffered virtually any need, for they could trade the metal loaned for whatever they needed. Though making the loan became easier, repaying it with usury did not. This only exacerbated the calamitous effects of usury on society. The development
of exchange media rightly is to be considered a blessing, if it may be assumed that they are used by a righteous people. However, the very same developments evidently are a curse in the hands of pagans. The Code of Hammurabi, the law of “the earthly city”, regulated usury in an attempt to minimize the social unrest brought on by default and foreclosure. For an example, law no. 88 states, “If a merchant lent grain at interest, he shall receive sixty qu of grain per kur as interest. If he lent money at interest, he shall receive one-sixth (shekel) six se (i.e. one-fifth shekel) per shekel of silver as interest.” Other laws in this code restrict or even prohibit usury in certain cases. However, the point is that Hammurabi regulated
usury; he did not prohibit it. In this “regulation” the law sought a practical effect rather than righteousness. They desired to maximize wealth, produced by the sweat of debtors, short of causing them to revolt.
The pagan societies of ancient Greece and Rome found themselves burdened by the problem of usury. For their model, Greece and Rome adopted the way of “the earthly city”. Herrick reports, “A writer on ancient law says that there is no legal conception or legal transaction of the Roman law at the height of its development that does not find its counterpart in Babylon.” Durant concurs, saying of ancient Greek banking, “The temples serve as banks, and lend to individuals and states at a moderate interest … Meanwhile the money-changer at his table (trapeza ) begins in the fifth century [B.c.] to receive money on deposit, and to lend it to merchants at interest rates that vary from 12 to 30 per cent according to the risk … He takes his methods from the Near East, improves them, and passes them on to Rome, which hands them down to modern Europe.” Whether the alterations made by the Greeks are to be considered “improvements” is a matter of perspective. Certain aspects of the development (e.g. the benefit of coinage) would be considered an
improvement, even in the City of God, but such benefits hardly are worth adopting the general Babylonian economy in sum.
Prior to the rise of Greece, exchange of goods was mediated with a number of substances, but mainly silver and gold, as was noted above. It also was noted that
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James B. Pritchard, ed., Ancient Near Eastern Texts (Princeton: Princeton
University Press, 1969), p.169
Herrick, p.32
Durant, Vol.lI, p.274
the introduction of mediation alleviated to some degree the limitations of barter. However, when a gross problem is solved, a more delicate problem is revealed. In this case, once the benefits of exchange media became commonplace, the awkwardness and cumbersomeness of the media became more and more of a nuisance. Silver and gold were traded by weight. That meant that there had to be a balance and a set of standard weights on hand at every exchange. This not only was inconvenient, but provided many opportunities for cheating. The weights
could be altered by the seller so that the buyer was tricked into giving more silver than he thought he was giving, or they could be altered by the buyer so that the seller was cheated. Also the silver itself could be altered so that the lumps or bars were in reality only silver covered. Such schemes could be detected fairly easily; by comparing weights, and cutting open silver bars, but this is what constitutes the awkwardness and cumbersomeness of the use of media in exchange. A solution to this problem was to mint the metals into coins. “The necessities of an extensive trade stimulated banking, and caused the Lydian government about 680 (BC) to issue a state-guaranteed coinage.” The Greeks quickly picked up on this idea and perfected it. Coins issued by the state elicited a certain trust on the part of the general population. It was natural to assume that in their original condition the coins were full of integrity, and it was very easy to detect any tampering. A coin, by its markings could, by visual inspection alone, be determined to consist of a certain weight of silver or gold. Rome also excelled in the art of coinage. Their chief coinage operation was set up in the pagan temple “Moneta“, and it is this name which eventually gave us the word “money”. The term “money”, strictly defined, refers to silver and gold in coin form. A number of things may function as money, but later, in the discussion of modern history, the danger inherent in considering such things to be money themselves shall be noted.
Coins worked because of the readiness of the general population to trust in them. Almost as soon as governments issued coins upon this trust, they also began to betray this trust by their own version of unjust weights. Greece and Rome both quickly became addicted to inflation by means of debasement. Debasement is the technique of reducing the proportion of silver or gold in a coin, so that a given quantity of precious metal will make more coins than before. The more coins they could make, the easier they could pay their debts and finance wars – that is until prices started to rise. The remedy to price increases, typically, was more debasement.
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Durant, VolJI,p.69
Oxford English Dictionary
Durant:
The emperors from Septimius Severus onward repeatedly debased the
currency to pay for state expenses and military supplies. Under Nero the alloy
in the denarius was ten percent [i.e. 90% silver], under Commodus thirty, under Septimius fifty. Caracalla replaced it with the antoninianus, containing fifty percent silver; by 260 its silver content had sunk to five per cent. The government mints issued unprecedented quantities of cheap coin; in many instances the state compelled the acceptance of these at their face value instead of their actual worth, while it insisted that taxes should be paid in goods or gold. Prices rose rapidly; in Palestine they increased one thousand per cent between the first and third centuries.
A so-called ruler of the people, who would feign to prosecute and punish the thief and then commit thievery himself by means of coin debasement, surely is an unrepentant dweller of Babylon. To circulate a coin that on its face claims to be a shekel of silver, when in fact it contains only a fraction of that amount, is nothing different than what the crooked merchant does with his rigged up balance or deceptive weights. The law of God condemns the one just as well as the other. “You shall do no wrong in judgment, in measurement of weight, or capacity. You shall have just balances, just weights, a just ephah and a just hin” (Leviticus
19:35,36)
What the mediation of trade accomplished in Mesopotamia, the introduction of coinage amplified in Greece and Rome, to the extent that it was not subverted by inflation. The greater efficiency afforded usury by these development also was amplified. Even the inflation of coinage debasement served to amplify the effects of usury, because the price increases that followed inflation also meant higher “interest rates” and a greater necessity of borrowing. Greek and Roman societies became fairly volatile. In Greece, the stereotypical ruthlessness of creditors and misery of debtors was painfully evident. Durant describes the situation in this way,
“The poor, finding their situation worse with each year – the government and the army in the hands of their masters, and the corrupt courts deciding every issue against them – began to talk of a violent revolt, and a thoroughgoing redistribution of wealth. The rich, unable any longer to collect the debts legally due them, and angry at the challenge to their savings and their property, invoked ancient laws, and prepared to defend themselves by force against a mob that seemed to threaten
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Durant, Vol. III, p. 632
not only property but all established order, all religion, and all civilization.
Plato similarly describes the ravages of usury on ancient Greek society, as part of his argument for “democracy”, in preference to an “oligarchy”:
“In an oligarchy, then, this neglect to curb riotous living sometimes reduces to poverty men of a not ungenerous nature. They settle down in idleness, some of them burdened with debt, some disfranchized, some both at once; and these drones are armed and can sting. Hating the men who have acquired their property and conspiring against them and the rest of society, they long for a revolution. Meanwhile the usurers, intent upon their own business, seem unaware of their existence; they are too busy planting their own stings into any fresh victim who offers them an opening to inject the poison of their money; and while they multiply their capital by usury, they are also multiplying the drones and the paupers. ”
It was in this explosive atmosphere that Solon came to power. His legislation effectively averted violent revolution, and had such potent and long term effect that Durant has called it “one of the encouraging miracles of history” A centerpiece to his reform was the cancellation of all debts. “All persons enslaved or attached for debt were released, those sold into servitude abroad were reclaimed and freed.” This, of course, was wisdom that Solon borrowed, consciously or not, from the law of God. In the City of God, not only were loans to be without usury, but they were to have a term of no more than six years (Deuteronomy 15:1,2). At
the end of this term all debts were to be cancelled. How strange that when
unbelievers do what the law of God requires, even from earthly or
practical motives, it is called a “miracle” if the result is favorable. Solon’s
plan, however, did not include repentance. His was a pragmatic course.
His cancellation of debts was only designed to appease those oppressed with debts. Since he was dealing with haughty, unbelieving hearts, he would not avert a crisis without also appeasing the other side. This he accomplished by allowing the usurers to keep “their” property, and by allowing usury to continue, though under new regulations.
Rome faced similar troubles. The Twelve Tables of ancient Roman law
______________________
Durant, Vol.lI, p.1l2
F.M. Conford, tr., The Republic of Plato (London: Oxford University Press, 1968), p.280-281
IBID, p.1l8
IBID
accommodated usury in an attempt to keep it moderate. However, a society facing the choice of rampant destruction or moderate destruction does not respond as though it were facing any real choice at all. Either road eventually brings it to the same place. In response, the Roman government grasped for stability by lowering the legal rate of usury, eventually banning it altogether. This proved fruitless, though, because the inhabitants of “the earthly city” did not have this law written on their hearts. The “inventors of evil” (Romans 1:30) devised ways of accomplishing the same thing as usury while keeping the letter of the law. The “repurchase agreement” was one example of such thinly disguised usury. In a typical case the usurer would buy an article from the borrower for, say, 10 shekels, and then sell it back to him for 11 shekels, payable over some period of time. The article in question may or may not change hands, but the effect of this deal was a loan of 10 shekels at usury of 10%.
The philosophers generally were opponents of usury in the pagan realms. The two philosophers of note in ancient Greece, Plato and Aristotle, both spoke against it. The general thrust of Plato’s comments is given above. Additionally, in his “Laws” he proposed to outlaw usury. His opposition to usury was of a general, ethical nature, which arose from the problems that usurers created for society. Aristotle was the only one who came forth with any real theoretical argument against it, though it is not much of a case. It is concise enough to be quoted in its entirety.
There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honourable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be usedin exchange, but not to increase at interest. And this term interest (Gk. Tokos), which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most un-natural.
It is apparent that Aristotle’s case was a pragmatic one. He appeals to nature rather than to law. He saw the consequences of usury, and sought for some theoretical reason to oppose it. However, the usurers and nobles of his day were just as pragmatically in favor of usury as he was pragmatically against it. As with Solon and with Roman law at certain points banning usury, there were periods where the governments became convinced of the utility of giving usury a rest for a time. One
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Aristotle,Politics, Bk.I, Ch.10
must wonder whether Aristotle did not ever flirt with the idea of the practical utility of indulging in usury. According to the Rev. Cleary, the history of
usury in Greece and Rome as a whole is characterized by this dialectic, “All practice in Greece and Rome was in favor of usury-taking, all theory was against it.”
A voice in the ancient world that was more convincingly opposed to usury than was Aristotle, was the testimony of the “Church Fathers” and the “Ecumenical Councils”. Who better to speak to this matter than those learned inhabitants of the “City of God”, whose views are informed by the law of God? God raised up a mighty army of saints in the infancy of the church to assure purity of doctrine and practice. Their writings form a chorus of orthodoxy and piety, and it does not surprise us to find a unanimity on the prohibition of usury. Basil, Chrysostom, Clement, Tertullian, Ambrose, Jerome, Augustine, and others all spoke vigorously in opposition to usury. Probably because they were content to dispose of the matter in terms of the law, they did not take a theoretical approach to the problem. That is, it was enough for them to note that usury is unlawful, consequently they experienced no burden to explain why it was unlawful. Numerous church councils were conducted in the early centuries AD. They were convened to handle various doctrinal and ecclesiastical matters, but several of them saw fit to speak briefly to the matter of usury. Cannon 20 of Elvira (300 AD) states: “If it is discovered that any of the clergy accepts interest on the loan of money, it is determined that he is to be degraded and that fasting is to be imposed upon him. If it is proved that someone, even a layman, has accepted interest; and, already reformed, he promises that he will cease and will not exact interest any more, it is determined that he be shown mercy. But if he persists in his wickedness, he is to be ejected from the church.”
And Canon 17 of Nicea (325 AD) says in par:
. . . the holy and great council has decided that if anyone after the publication of this decree receives interest for the services of a loan, or engages in the business of usury in any way, or demands half again as much, or devises any other scheme for filthy lucre, he is to be deposed from the clerical estate, and his name stricken from the register.
Rev. P. Cleary, The Church and Usury (1914; Hawthorn: The Christian Book
Club of America, 1972), p.26
cited in, W.A. Jurgens, The Faith of the Early Fathers (Collegeville: The
Liturgical Press, 1970), YoU, p.254,255,286
Many scholars doubt the authenticity of the inclusion of laymen in the condemnation of Elvira. It is the only ancient decree of the church that specifically prohibits usury to laymen. Cleary points out that this was not because the church tolerated usury among the laity, but because the “Fathers” wanted to avoid conflict with the state. Since usury once again was allowed by Roman law, there would have been a problem in their forbidding Roman citizens from doing that which Roman law permitted.
A number of other church councils spoke similarly on the matter of usury. Constantine was Roman Emperor during this time, and is well known for having embraced the Christian Faith. Many of the church councils were called at his bidding, for the purpose of strengthening the unity of the church amid doctrinal controversies and heresies. However, neither he nor any of the Emporers who came before took any serious steps to transform the realm into a true “City of God”. The social unrest, due in part to usury, was never effectively addressed, as in the case of Greece under Solon. The wage and price controls of Diocletian were a failure, and legislation was enacted, and later confirmed by Constantine, that cast the average tenant farmer into a virtual serfdom. This, along with the decentralization resulting from the Barbarian conquest of the Empire, ushered in
the medieval era.
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Cleary, p.45