Whenever the blood-sucking credit industry is briefly exposed, like when an article says that PayDay loans charge 400% annual interest, outraged citizens say things like:
“That should be outlawed!”
“That’s worse than the freaking Mafia!”
“Wait, didn’t the church used to say usury was a sin?”
The answer is: “Yes, to all of the above.”
Usury was a sin; it was considered a sneaky form of theft and the Catholic Church had reams of legal opinions on the matter. Usurers could be warned, fined, excommunicated and basically told to go to hell, where Dante said they would inhabit the fourth circle of the Inferno and serve their monstrous, gibbering god of greed for all eternity.
So what happened? Jesus said, “Give to him who asks of you, and do not turn away from him who wants to borrow from you.” He went on to say other things that indicate that his followers are to help the poor whenever they can without conditions.
In actuality, big powers such as governments and the Church itself, could engage in credit transactions; the usury laws were to protect lesser mortals from predation. If a farmer had a bad year and needed to borrow money for next year’s seed, just give it to him. If a family was hungry, feed them. If a craftsman just starting out needed tools, provide them.
It was not that they were forbidden to ever pay you back, but that they should only pay back what they had borrowed. The temptation to greed, to sit on your arse and prey on the distress of others was too great a danger to one’s soul and too great a harm to the victim. Transactions between individuals were covered by the principle: “Treat others as you would want to be treated.” No ifs, ands or buts.
Well, there was sometimes a “but if.” But-if you were a Jew and outside the domain of the Church, the usury laws did not apply. This is one reason Jews, and Christians who flouted the usury laws, were despised. This is why Shakespeare depicted Shylock, demanding his pound of flesh, as a Jew in the Merchant of Venice and no one accused him of being an Anti-Semite.
How did this change? Enter the Protestant Reformation and it’s insistence that that Antichrist in Rome had no authority; morality was a realm for the individual conscience. At first, Protestants railed against usury as much as Rome and remember-usury encompassed all fraudulent and predatory business practices; charging too much, hoarding to get a better price, monopolistic price fixing, any shady deals.
John Calvin, who set up a theocracy in Geneva, opened the door just a crack. Well, yes, you could lend on interest, but the terms and rate were to be strictly regulated by…him. The world was changing, as it always does, and England wanted to be like Holland: RICH. Holland had banks and borrowers and lenders and joint stock companies, as well as relative freedom of religion. It took generations for the Puritan ideal of Industriousness, making a lot of money, to take hold. Of course, the idea was that you could make a lot of money in order to do good with it. Parliament passed a law in 1571 allowing usury (with limits) and then in 1854 removed those limits.
So how did usury go from being a sin to being widely accepted? The Catholic Church, which had it’s own sins, was overthrown and individual initiative became the highest good. This worked well to make (some) people rich but had a bad side effect. The poor came to be regarded as morally corrupt-otherwise they wouldn’t be poor, right?
How did usury go from being a sin to being widely accepted? As the middle class arose wanting to grow rich, they demanded credit. As the church was systematically torn down, it was walled away from “meddling” in business. As the idea grew that business was moral no matter what it did (since selfishness supposedly benefits everyone) then credit and interest could safely be trusted to them alone. Many streams flowed into the Predatory Credit river in which we find ourselves swimming.
Since it was not a mysterious supernatural force that got us here, but rather the choices of regular human beings, the good news is that choices of regular human beings can get us out.