Usury is the practice of making unethical or immoral monetary loans. Depending on the local laws or social mores, a loan may be considered usurious because of excessive or abusive interest rates. In other countries, the act of simply charging a fee to borrow money is considered usury. Usury may be used in a moral sense — condemning taking advantage of others’ misfortunes — or in a legal sense where interest rates may be regulated by law.
Historically, Christianity and Islam, in much of Medieval Europe, have regarded charging any interest for loans as sinful. Similar condemnations are found in religious texts from Buddhism and Judaism. Though the Roman Empire eventually allowed loans with carefully restricted interest rates, the Christian church in medieval Europe banned the charging of interest at any rate.
So what happened to evolve society to what we have today?
The pivotal change in the English-speaking world seems to have come with the permission to charge interest on lent money, particularly the 1545 act, “An Act Against Usurie” of King Henry VIII of England. Lending money has become big business since that time and society as a whole expects a return on money they place in a bank. Banks on the other hand are businesses who make far more on the use of the money they are given than the return they pay out.
Are we all guilty of Usury? If so, how do we fix the problem. I believe that it is ok to profit from money invested in a company that you share with others as long as you don’t charge interest on the money you use to start the business. It would also be ok to profit from equity in a home that you bought for someone else, but not ok to charge interest on the loan. Renting a property would be ok and I suspect that some form of rent to own would be ok as well.
The real issue is the blurry line that keeps getting blurrier (If that’s a word)…
Great post Fred! This issue has been on my mind for some years now, affecting how I invest, save up, and whether I buy or rent. It’s a very tricky issue since the entire world economy seems to revolve around interest, borrowed money, loan ‘products’, credit, etc. Personally I find it bewildering to navigate this issue and all its grey, black and white areas! Thanks for the post and reminding me that others are having similar thoughts!