Once upon a time, lending money at interest was completely illegal (for religious reasons). Later, it was legalized for Jews only, which led (among other factors) to strong anti-semitism. Eventually, it was legalized for all.
Those who couldn’t afford a house right away, took the chance to have a mortgage (roughly translated, a “death-pledge”), in order to have the house they couldn’t immediately afford. This helped the poor.
But, of course, the practice spread. And with everyone able to pay more thanks to mortgages, prices rose. So what once helped a few poor, came to enslave nearly all.
Today, most people in the “developed” world are unable to buy a home without accepting decades of debt, with half the real house price going to interest payments. The worst part is, those least able to repay are charged most of all and run the risk of having their house repossessed.
Without this system of mortgages, would we be better off? We would be paying less in the long run, because of no interest. We would be paying less excluding interest, because of reduced demand. Society would be far more egalitarian without the banks taking interest.
Economists might say that the reason for the reduced demand and prices was everyone being less able to purchase, so people would be without what they wanted. But what is forgotten, is the egalitarianism of no bankers, would reduce the land wasted by the usurers, so that supply would increase for the needy and average man. Even if this didn’t fully compensate, cooperative systems of lending and giving and sharing, in and between families could fill the role, and ensure proper housing and freedom for all.
So what’s the practical conclusion? We should withdraw our money from the bank, to stop lending at interest. We (Christians, anarchists, socialists) should attempt to form new, fair, egalitarian systems of living, taking many varied forms (perhaps based around Churches or other associations). No anti-interest law is necessary if we all reject and replace it. Refuse the old world, and build the new in its shell.
These societies may lack at first, but after a while without interest, they are bound to prosper.
Here are some scriptures on money lending and usury.
The rich over the poor ruleth, And a servant is the borrower to the lender.
a servant—wast thou called? be not anxious; but if also thou art able to become free—use it rather
To no one owe anything, except to love one another
His silver he hath not given in usury, And a bribe against the innocent Hath not taken; Whoso is doing these is not moved to the age!
Thou dost not lend in usury to thy brother; usury of money, usury of food, usury of anything which is lent on usury.
In usury he hath given, and increase taken, And he liveth: he doth not live, All these abominations he hath done, He doth surely die, his blood is on him.
At this point I should clarify: I don’t believe having money in the bank or being a banker is a ticket to hell. We live by grace now. But, I do believe charging interest is unjust (although it’s irrelevant if we’re forgiving debts as God forgives our debts). [Note from 2nd May 2014: I don’t know what I meant exactly by “We live by grace now”, but I think I may have meant our actions don’t matter to God any more. Just to note, I don’t believe that now.]
Here’s Peter Maurin’s Easy Essay, ‘Mortgaged’. You can see all his Easy Essays by clicking here.
1. Because John Calvin legalized money-lending at interest the State has legalized money-lending at interest.
2. Because the State has legalized money-lending at interest, home owners have mortgaged their farms; institutions have mortgaged their buildings; congregations have mortgaged their churches; cities, counties, States and Federal Government have mortgaged their budgets.
3. So people find themselves in all kinds of financial difficulties because the State has legalized money-lending at interest in spite of the teachings of the Prophets of Israel and the Fathers of the Church.
God bless you.