“The most hated sort [of moneymaking], and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term usury 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 making money this is the most unnatural.” ~Aristotle (384-322 BCE)1
Aristotle’s definition of usury is perhaps the most cogent ever made. Usury, as originally defined, is any money made from a loan. The Christian and particularly Catholic opposition to usury was founded on the dictum in the Gospel of Luke about giving without expecting anything in return, and on the Old Testament precepts against charging interest.
Opposition to usury seems to have been instinctive in many diverse civilisations and cultures, with an intuition it is something unnatural, parasitic and outright sinful. When a civilisation accepts usury as normal business practice, as does Western civilisation, it is symptomatic of an advanced cycle of decay.
The Vedic scripts of ancient India (2000-1400 BCE) call the “usurer” kusidin, a lender charging interest. Brâhmanas (priests) and Kshatriyas (warriors) were prohibited from practicing usury. The Sacred Laws of the Aryas states:
God weighed in the scales the crime of killing a learned Brâhmana against the crime of charging interest; the slayer of the Brâhmana remained at the top, the charger of interest sank downwards.2
As in the Western and Classical civilisations, the definition of usury was compromised over time. By the second century CE the Laws of Manu defined usury as beyond a “legal” interest rate, after which the interest cannot be recovered. The fact there is now a legal rate of interest, rather than an outright prohibition, indicates compromise of the type that arose in Western Christendom and Classical Greece and Rome. Additionally, like the exemption of the Jews from laws on usury under Mediaeval Christendom, the Hindu merchant caste were permitted trade in usury:
To invest money on interest, to be a jeweller, to tend cattle, tillage and trade – these are declared as occupations for the Vaisya caste.3
Siddharta Gautama Buddha offered a more unequivocal stance:
One discerns wrong livelihood as wrong livelihood, and right livelihood as right livelihood. And what is wrong livelihood? Scheming, persuading, hinting, belittling, and charging interest. This is wrong livelihood.4
Plutarch (46–127 CE), in his essay “Against Running In Debt, Or Taking Up Money Upon Usury,” described usurers as “wretched,” “vulture-like,” and “barbarous.” Cato the Elder (234–149 BCE) compared usury to murder. Cicero (106–43 BCE) stated, “these profits are despicable which incur the hatred of men, such as those of… lenders of money on usury.”
Contemporary financial analysts Sidney Homer, who worked for Salomon Bros., and Professor Richard Sylla, in their historical study of interest rates, state that the first known law on the issue was that of Hammurabi, 1800 BCE, during first dynasty Babylonia, who set the maximum rate of interest at 33⅓% per annum “for loans of grain, repayable in kind, and at 20% per annum for loans of silver by weight.”5Sumerian documents, circa 3000 BCE, “show the systematic use of credit based on loans of grain by volume and loans of metal by weight. Often these loans carried interest.”
As early as 5000 BCE in the Middle East, dates, olives, figs, nuts, or seeds of grain were probably lent to serfs, poor farmers, or dependants, and an increased portion of the harvest was expected to be returned in kind…. Earliest historic rates were reported in the range of 20–50% per annum for loans of grain and metal.6
In Greece, 600 BCE, Solon established laws on interest when excessive debt caused economic crisis. Likewise, in Rome the “Twelve Tables” of 450 BCE, establishing the foundations of Roman law, after pervasive debt was causing servitude and crisis, established a maximum interest rate of 8⅓% per annum. When Brutus tried to charge the City of Salmais 48% for a loan, Cicero reminded him that the legal maximum was 12%. The interest rate was often 4%. Some Greek “loan sharks” charged 25% per annum, and even 25% per day.7
In the Old Testament, Jews were prohibited from usury: “Thou shalt not lend upon usury to thy brother; usury of money; usury of victuals; usury of anything that is lent upon usury” (Deut. 23:19). Critically, for history, the Jews were allowed to charge usury to non-Jews: “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” (Deut. 23:20)…