Pope Francis recently said that it is “not human!” to earn money by making loans at interest to the poor. This got me thinking about how the last thing a desperately poor person needs is debt. And how all the poorest people I know are swimming in debt, and many of the people I think are doing well are in even deeper.
Since it was the Pope who got me thinking on this, I decided to see what the Big Three have to say about the subject of usury. I got each of these quotes from the Usury wiki.
The Old Testament : (Deuteronomy 23:20 (19)—”Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest.”
The New Testament: (Luke 6:34)— “if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. But love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be children of the Most High, because he is kind to the ungrateful and wicked.”
The Qur’an: (Al-Baqarah 2:276-280) “God condemns usury, and blesses charities. God dislikes every disbeliever, guilty. Those who believe and do good works and establish worship and pay the poor-due, their reward is with their Lord and there shall no fear come upon them neither shall they grieve. O you who believe, you shall observe God and refrain from all kinds of usury, if you are believers. If you do not, then expect a war from God and His messenger. But if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew.”
It seems the Big Three agree with Pope Francis… usury is just not cool.
I can’t help but feel that these sentiments apply directly to our most recent economic disaster. Big banks made bad loans on purpose! Loans they knew could not be paid back. Loans they did not want paid back, when there was so much more money to be made in foreclosure and asset liquidation. Never-mind that those tactics were devastating to the victims of the biggest ponzi scheme ever. Some people made ALOT of money. And that’s what America is all about, right? If you have made some money you have proved you are a worthy person and have the right to more. Conversely, if you are broke you have shown you are not worthy of having anything more and are an unsightly, slightly offensive, drag on the rest of us, won’t you, please, just… go away. The trend toward total consumer indebtedness is well under way in America and inequality grows with it.
Then I had to think about what it means to be poor. The family of 6 living in an efficiency apartment in Detroit might seem to be wealthy in comparison with a family in rural North Korea or the Central African Republic – I mean, after all, they probably have a refrigerator, microwave, and even a cell phone or two. They are certainly poor by American standards, even if they seem wealthy in contrast to other poor people around the world. Poverty depends on context. But we all know poor when we see it.
The trend in “micro-loans” over the past 10 years or so, and is at least somewhat profitable for some people, seems slightly less immoral than the debt slave system devouring the western world. Micro-loans are small loans made to really poor people, usually in developing countries, with the humanitarian goal of reducing poverty and providing opportunity. Made mostly to individuals, with the idea of aiding the community as a whole, the default rate is very low, especially considering that the loans are made to very poor people. Then again, I imagine that leg-breakers are pretty cheap and readily available in the poorest parts of the world. Kiva.org has loaned out over half a billion dollars since 2005, with the help of over a million generous lenders. While Kiva and it’s lenders do not earn any interest on these loans, tremendous pressure to repay these loans on time is brought to bear by the community, which often pays off the loan when the individual is unable to. In which case the community will collect the debt from the individual, they may take his animals… or his roof! The idea sounds good but, according to David Roodman‘s book “Due Diligence: An Impertinent Inquiry Into Microfinance” it has no real net effect on poverty. A micro-loan is basically a subsistence loan, like using your credit card to pay your electric bill, and is not a large enough infusion of capital to have any real effect on poverty in general, unless it is to raise the general level of indebtedness. Are these the good intentions proverbially mentioned?