Chapter XLVII: Section CXC: Interest-Policy.--Aversion to Interest

At the same time, there is a strong aversion to the taking of interest prevalent among nations in a low stage of civilization. Industrial enterprises of any importance do not as yet exist here at all, and agriculture is most advantageously carried on by means of a great many parcels of land, but with little capital. The purchase of land is so rare, and hampered by legal restrictions to such a degree, that loans for that purpose are almost unheard of. And just as seldom does it happen, by reason of the superabundance of land, that the heir of a landowner borrows capital to effect an adjustment with his co-heirs, and thus enter alone into the possession of the estate. Here, as a rule, only absolute want leads to loaning.[190-1] If, in addition to this, we consider the natural height of the rate of wages in such times, the small number and importance of the capitalist class (§ 201), the tardy insight of man into the course and nature of economic production,[190-2] it will not be hard to understand the odium attached in the middle age of every nation to so-called interest-usury[190-3] (_Zinswucher_).

Most religions, the Christian excepted (the universal religion!), have been founded in the earlier stages of the nations who profess them, and have there, at least outwardly, exercised their greatest influence. No wonder, therefore, that so many religions have prohibited the taking of interest. Thus, for instance, the Jewish which, indeed, allows interest to be taken from foreigners, but raises loaning without interest among Jews in their commerce with one another, to the dignity of a duty binding on the conscience of the beneficent rich.[190-4] [190-5] Similarly in the Koran.[190-6] The Fathers of the Church, also, on the whole, look with disfavor on the taking of interest, relying upon well-known passages in the Old Testament, and, in part, on misunderstood expressions in the New.[190-7] This is especially true of the Fathers of the Church from the beginning of the fourth century, when the Roman empire was frightfully impoverished by the devastations of the barbarians, and as a consequence the conditions as to interest which prevail in the lowest stages of civilization had returned. Mercy towards the poor usually occupies the foreground in the demonstrations of the Fathers.[190-8]

[Footnote 190-1: Distress-debts in contradistinction to
acquisition-debts. (_Schmalz_, Staatswirthsch. Lehre in
Briefen, I, 227.) Compare _Hesiod._, Opp., 647; also
_Herodot._, I, 138.]

[Footnote 190-2: Thus _Aristotle_, calls the taking of
interest a gain against nature, since money is only a medium
of exchange, and cannot produce its like. (Polit., 3, 23,
Schn.) Similarly, _Plato_, De Legg., V, 742, and _Seneca_,
De Benef., VII, 10. Compare, however, _Tacit_., Annal, XIII,
42 seq. As late a writer as _Forbonnais,_ 1754, accounts for
interest thus: Some people hoard their money instead of
spending it; hence a scarcity or want of money, and those
who need it are obliged, in order to draw it out, to promise
to pay interest. (Eléments de Commerce, II, 92 ff.)]

[Footnote 190-3: Numerous disturbances on account of debt,
during the first centuries of the Roman Republic, until
finally (compare _Livy_, VII, 42), the taking of interest
was in the year 349 (?) before Christ, entirely prohibited.
(_Tacit._, Annal. VI, 16.) The public opinion in such
matters may be understood from the words of Cato: _majores
ita in legibus posuerunt, furem dupli condemnari,
foeneratorem quadrupli_. (De Re rust.) The _foenerari_
compared with the _hominem occidere_. (_Cato_, in _Cicero_,
De Off., II, 25.) In the higher stages of civilization
little heed was paid to the law, in practice (compare
_Livy_, XXXV, 7; _Plut._, Cato, I, 21.), although the
democratic party always held fast to the legal perpetuation
of the prohibition of interest. (_Mommsen_, Römisch. Gesch.,
III, 493.)]

[Footnote 190-4: Exod., 22, 25; Levit., 25, 35 ff.;
Deuteron., 15, 7 seq.; 23, 19 seq.; Psalms, 15, 5; 109, 11;
112, 5; Proverbs, 28, 8; Jerem., 15, 10; _Hes._, 18, 8.
After the return from exile, the prohibition was restored.
(Net. 5, 1 ff.) Was there, in the long duration of such
prescriptions, an educational measure having reference to
the peculiar fault towards which the Jewish national
character had a special tendency? In Josephus's time even,
usury practiced on one's country people was universally
despised (Antiq. Jud., IV, 8, 25.), and the Talmud continues
it. Compare _Michaelis_, De Mente ac Ratione Legis M. Usuram
prohibentis. In Russia, the orthodox Jews are wont to evade
the legal rate of interest by exacting one-half the profit,
and estimating it approximately in advance at a probable
sum. If, afterwards, the debtor declares under oath that he
made no profit, the creditor has no more to say; but then
the borrower would lose all credit in the future. (_Bonav.
Mayer_, Die Juden unserer Zeit, 1842, 13 seq.)]

[Footnote 190-5: The Mosaic passages, however, only prohibit
the taking of interest from poor people of one's own
country.]

[Footnote 190-6: The prohibition in the Koran, ch. 2, 30, is
regularly evaded in Persia, by deducting the proper amount
at the moment the loan is made. (_Chardin_, IV, 157 ff.)
Under the Mongolian rulers, it was done by way of
preference, by a fictitious sale for cash, at prices out of
all proportion. "Why cannot capitalists either buy land or
carry on trade?" asked Sultan Gazan, on an occasion when the
prohibition of interest was strongly insisted on.
(_d'Ohsson_, Histoire des Mongols, IV, 397.)]

[Footnote 190-7: For instance, _Luke_, 6, 34 ff., where
interest is no more prohibited than in _Luke_, 14, 12 ff.,
the mutual invitation of friends to a feast. Not less
groundless is the supposed allegorical allusion (_Matthew_,
21, 12) to interest-creditors. Rather might an approval of
interest be inferred from _Matthew_, 25, 27.]

[Footnote 190-8: _Origen_, for instance, would have the
creditor take no interest; but exhorts the debtor to return
double the amount unasked. (Homil., III, ad. Ps., § 37.)
Hence there is here no condemnation of interest, but only an
effort to transform all legal relations into relations of
love. Quite the reverse in _Lactant._, Instit., VI, 12;
_Basil_, ad. Matth., 5 ff.; _Ambrose_, De Off., III, 3;
_Chrysost._, ad. Matth. Hom., 56; Tim., VII, 373 ff. (Paris,
1727); _Hieronym._, ad. Ezech., V, 367 c. (Francof, 1684);
_Augustin._, Epist., 54. Even _Cyprian_, 183, 318 (Paris,
1726).]