Sunday, August 05, 2007

In defence of usury

This economist article finds that a "consequentialist" analysis of the results of lending money at extortionate interest rates to the poor is better for the would be borrower than being refused the loan. An "Absolutist" would not believe such a one-off study to be relevant and defer to the scriptures, which probably state one way or another that usury is evil in general and should not be allowed. I for one, have come to the conclusion that usury IS evil, but possibly a necessary one for modern civilisation to keep prospering.

2 comments:

Dr. Clam said...

A full consequentialist analysis, of course, should include the effects of lending at interest on the the *lender* and the opportunity cost to society of investing capital in such a 'sterile' way. But I think I am in agreement with your conclusions.

Jenny said...

hmm, off the top of my head, the scriptural attitude to lending was all debts are cancelled every 50 years & anyone in slavery due to unpaid debt must be freed after 7 years. Though as admitted above, I could be talking through my hat.