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What Do The Main Religions Say About Usury?
Chrisitianity
Hinduism and Buddhism
Judaism
Other Faiths
Philosophers, Theologians and Theorists
Summary
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What Do The Main Religions Say About Usury?

This section of the web site discusses the issue of Usury in Religion.

Have you ever wondered how major religions other than Islam feel about credit cards and the like amidst the pool of interest-based finance? If so, then you will that find the answers lie right in the holy texts. The concept of "usury" is rooted in history, for the most part, has been understood to refer to -

"the practice of charging financial interest in excess of the principle amount of a loan."
(History of Usury Prohibition www.alastairmcintosh.com/articles/1998_usury.htm).

Using this definition, the practice of usury can be traced back approximately four thousand years. It has since been a ferment of repeated condemnation and prohibition, on moral, ethical, religious as well as legal grounds. Among its most prominent critics have been Hindus, Buddhists, Jews and Christians as well as Muslims. Furthermore, ancient Western philosophers and politicians, together with modern socio-economic reformers herald their discontent with it.

Christianity

Despite its Judaic roots, criticism of usury was most fervently taken up by the Christian Church, where the debate existed with great intensity. In the Christian teachings, interest is forbidden and in the texts one is able to see the clear verdicts against usury.

"The love of money is the root of all evil." (Timothy 6:10)

" [Jesus said], 'If you have money, do not lend it at interest, but give [it] to one from whom you will not get it back." (Gospel St Thomas, V95)

The Old Testament proclamations were resurrected via a New Testament reference to usury, further fuelling the debate. On the authority of these texts, the Roman Catholic Church in the fourth century AD prohibited the clergy from taking interest. In the eighth century under Charlemagne, they pressed further and declared usury to be a general criminal offence.

This "anti-usury movement" continued to rise during the early Middle Ages and reached its apex in 1311 when Pope Clement V made the ban on usury absolute (Birnie, 1952) . Despite numerous rulings and legislations, contradictions in the Church's arguments were found and along with the growing tide of commercialisation, the pro-usury counter-movement began to grow.

The rise of Protestantism and its pro-capitalism influence is also connected with this transformation (McGrath, 1990) , and as a result of these influences, c.1620,

"usury passed from being an offence against public morality which a Christian government was expected to suppress to being a matter of private conscience [and] a new generation of Christian moralists redefined usury as excessive interest"
(Ruston 1993: 173-4).

The question of interest today is a controversial topic and an ongoing debate. In the Bible, all interest is forbidden, according to Rabbi Blesofsky.

"However, there are certain halachic rulings that allow interest. There is a halachic exception to allow that." (www.bankrate.com/brm/news/advice/20040121a2.asp)

Hinduism and Buddhism

Some of the earliest references to usury can be observed in the ancient Indian religious manuscripts, derived from the Vedic texts of Ancient India (2,000-1,400 BC) in which the kusidin - the usurer, is stated numerous times and inferred to as any lender charging interest (History of Usury Prohibition).

More recurrent and meticulous references to interest payments can be read in the later Sutra texts (700-100 BC), alongside the Buddhist Jatakas (600-400 BC).

In this latter period, the first echoes of contempt for usury are heard. One example is that of Vasishtha, a renowned Hindu legislator whom created a law forbidding the higher castes of Brahmanas (priests) and Kshatriyas (warriors) from being usurers or lenders charging interest. Also, in the Jatakas, usury is referred to in a derogatory tone:

"hypocritical ascetics are accused of practising it"
(History of Usury Prohibition).

In the second century AD however, the term usury began to undergo a process of amelioration having become a more relative term that carries undertones which are much less harsh. In the Laws of Manu it reads:

"Stipulated interest beyond the legal rate being against (the law), cannot be recovered: they call that a usurious way (of lending)"
(Jain, 1929: 3-10).

Judaism

In the Jewish tradition, the borrower is the protected beloved of God, and an illustration of this is the barring of taking interest. This works in two ways and according to rabbinical interpretation, not only is the lender prohibited from charging interest, but the borrower also is forbidden from offering to pay any interest.

In the Torah one can read how Jews reject the perception of loans as a transaction that brings actual benefit to the lender. Rabbinical law, the Halacha, states that a person who either lends, or voluntarily borrows on interest is ineligible from standing as a witness in court (www.americanfinance.com/RibainTorah.shtm). This is due to it being regarded as placing financial gain over submission to God. Consequently, it is not granted that the person shall give truthful testimony in court, if that could resultantly harm their financial interests.

Criticism of usury in Judaism in Biblical passages reveal that the taking of interest is either forbidden or discouraged. Neshekh, literally means "a bite" and refers to interest from the debtor's perspective (History of Usury Prohibition). In the Exodus and Leviticus texts, the term applies solely to lending to the poor and destitute, while in Deuteronomy, the prohibition is extended to include all money lending, with the only exception to foreign business dealings.

"Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the Lord thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it."
Chapter 23, verse 20

Changing economic conditions intertwined with moral transgression made interest prohibition no longer compatible with the needs of the community, and over time, a standard form of legalization, known as hetter iskah, was established. Today it has become so widely accepted that all interest transactions are freely carried out in accordance with Jewish law, by simply adding the words al-pi hetter iskah to the contract. (Encyclodpedia Judaica, 1971).

Other Faiths

Sikhism, although a faith that has come into existence much more recently in comparison, rejects the principle of taking what does not belong to you. Says Nanak,

"To grasp what is another's is as evil as pig's flesh to the Muslim and cow's flesh to the Hindu. The Teacher shall intercede for his follower, only when he has not eaten carrion."
(Adi Granth, Var Majh, M.1, p. 141)

Taoism, another modern religion states in the text,

"Banish skill, discard profit, And thieves and robbers will disappear."
[ Ch. 19]

Theft, according to Wilson , means to take property that belongs to another or to the public. This encompasses fraud, usury, extortion, and dishonest trading.

Likewise, Confucianism is indicative in its text of a disliking of unjust transactions.

"The Master said: 'The gentleman is familiar with what is right, just as the small man is familiar with profit.'"
[ 4:16 ]

Islam of course does not allow riba - interest - in any case, even if it has not been accepted by Muslims countries throughout the world. According to Imam Ali,

"If someone comes to you for a loan, he comes out of need. If I loan you money and I find that you have difficulty paying me back, Islam encourages me to forgive the debt. God will reimburse me."

Moreover, religion is not the only morally binding code which wards one away from the practice of riba.

Philosophers, Theologians and Theorists

Plato, Aristotle, Catos, Cicero, Seneca and Plutarch all condemned usury in one form or another (Birnie, 1958) . Their synchronized stance in the civil law can be seen, for example, from the Lex Genucia reforms in Republican Rome (340 BC) which outlawed interest altogether. Furthermore, to these ancient philosophical thinkers, modern reformists too can be included amongst those who rejected interest.

Adam Smith, despite being the father of free-market capitalism and advocating laissez-faire economics, strongly desired controlling usury (Jadlow, 1977; Levy, 1987) . Although he opposed full elimination of interest, he favoured the nuisance of an interest rate ceiling, to ensure that low-risk borrowers likely to employ socially beneficial investments, were not disadvantaged as a result of

"the greater part of the money which was to be lent to prodigals, who alone would be willing to give an unregulated high interest rate"
(Smith, 1937: 339).

Similarly, the great twentieth century economist John Maynard Keynes believed

"the disquisitions of the schoolmen [on usury] were directed towards elucidation of a formula which should allow the schedule of the marginal efficiency to be high, whilst using rule and custom and the moral law to keep down the rate of interest, so that a wise Government is concerned to curb it by statute and custom and even by invoking the sanctions of the Moral Law"
(1936: 351-3).

Summary

Across the different faith groups there are implicit as well as explicit injunctions which out-rule the practice of interest-based finance. In recent times however, changing attitudes coinciding with changing economies and diluted ethics have seen the practice become but a norm.

Yet, it is not only the God-fearing who foresee problems with usury, as philosophers, theologians, and theorists join the band-wagon, and it is still indeed an ongoing debate for financiers and economists.

Is an interest-free infrastructure feasible in today's global capital markets?

Perhaps the growing emergence of Islamic banking and finance systems, in the Middle East and South-east Asia for example, and perhaps in our own humble selves too, offers a glimmer of hope for all those favouring the elimination of usury, insha'Allah.