Friday, November 18, 2011
Usury Revisited
A while back I had some thoughts about usury as existing in a somewhat unique position from a historical point of view. Professor Bainbridge had a nice response to my post. And this is a more recent and also very thoughtful post by John Schwenkler, discussing a piece by Elizabeth Anscombe, Faith in a Hard Ground, in which she comes down very strongly opposed, that I did not know.
https://mirrorofjustice.blogs.com/mirrorofjustice/2011/11/usury-revisited.html
Comments
You can follow this conversation by subscribing to the
comment feed
for this post.
As an Anscombe fan, I'm rather disappointed, though I haven't been able to find the full article to ensure this representation is fair. Obviously interest on a loan is the charge for risk + expected inflation. There are rather limited circumstances in which the interest charged might be greater than that (regulatory interference, misleading people about the terms of the loan, and so forth), but it seems obvious that the reason it is just to charge interest is that the loan has seriously impaired value once given (due to risk and inflation). Most cases of folks referring to "exorbitant" interest rates seem like they're really just talking about very high-risk loans, which of course justify very high rates of interest (or else the loans would not be made). It seems like one thing to say we should be ready to give charitably to people (which of course we should) and another to talk as if certain rates of interest are unethical. To say this is to say that the highest-risk (probably poorest) debtors should be prohibited from seeking loans, and only be permitted to beg. Am I missing something significant, or was Anscombe just missing the market price of risk?
Posted by: JAB | Nov 19, 2011 12:54:33 PM
JAB, I don't think you are missing anything. But I don't think Anscombe was missing anything either.
Posted by: Marc DeGirolami | Nov 19, 2011 1:44:04 PM
Belloc has an essay condemning usury as well: http://www.catholictradition.org/Classics/belloc2-2.htm
Basically, interest on a non-productive loan is usury, whereas, money lent for a profitable venture is not.
This goes to the heart of the traditional condemnation of usury which saw the loaning of money as sinful interest because it is contrary to nature. Money doesn't naturally breed more money. But money lent to buy a house or build a factory is different because it is productive, so the lender is rightly owed a share.
This view of the matter would prevent us from becoming the indebted society that we are. Taking out a loan for a new television or a vacation,for instance,is foolish. Money shouldn't be lent for such purposes and the lender is both facilitating the foolishness and profiting by it.
Posted by: AML | Nov 19, 2011 1:45:40 PM
Marc, please clarify: you think Anscombe recognized interest as a charge for risk, but believed it is unethical to charge a price for risk?
Posted by: JAB | Nov 19, 2011 7:58:20 PM
JAB, I haven't had a chance to read through Anscombe's full piece either, so I probably should wait to comment.
My guess -- it is only a guess at this point, pending reading the piece -- is that Anscombe was aware of the issues that you raise, but that they did not affect Anscombe's view of how a Christian ought to approach the question of lending money at interest. But again, that is merely a guess, which needs verification from the source and possibly other writing of hers.
Posted by: Marc DeGirolami | Nov 19, 2011 8:04:17 PM
I'll be in touch when I get ahold of the article. The book's on my wishlist, so we'll see what happens come Christmastime.
In my view the question "what is just or ethical?" is a very different question from "how a Christian ought to approach the question of lending money at interest." There are many things which seem to be required of Christians which are not required by (or even seem often to be subversive of) natural justice. I would have guessed Anscombe sought to answer the former, although she would obviously be interested in the latter. But as you note, we haven't read it.
(Full disclosure: I'm pretty sure that I'm partially plagiarizing a vaguely-recalled David Bentley Hart comment somewhere with that last line.)
Posted by: JAB | Nov 19, 2011 11:14:23 PM
Er, second-to-last line. My kingdom for comment-editing functionality...
Posted by: JAB | Nov 19, 2011 11:14:57 PM
Anscombe doesn't talk about risk in the essay I cited. I imagine, though, that she'd be willing to allow for charging the amount of interest that would be necessary to ensure against default -- the key thing is that charging interest not be a way to *make money*, which is what Aquinas clearly disallows.
Posted by: John Schwenkler | Nov 23, 2011 9:57:34 PM
I agree with how JAB approaches the issue, i.e. the difference between the "just/ethical" and "Christian approach" views. Certainly the Catholic notions of promoting human dignity and the common good of the community would entail leaning away from high interest rates when possible, but it does seem like a difficult issue to face when these types of loans are "just" in our community, while maybe not Christian. Perhaps there is a balancing act to perform between the good of the community and a man's providence over his personal life.
Posted by: Steven H | Nov 27, 2011 7:00:35 PM
Recent Posts
Categories
Monthly Archive
StatCounter
PageViews
Since February 19, 2008
