Getting Used to Usury

By Eddie Mikus

Usury. Its an arcane word with an ancient meaning, but on April 9, 2014, Father Patrick J. Ryan S.J. made it relevant once again when he delivered the biennial McGinley lecture. The lecture, which is given each semester in connection with a distinguished chair that Father Ryan holds, focused on Christian, Jewish, and Muslim perceptions regarding usury, or the charging of interest on loans.

Ryan began the lecture with a quip about a modern example of usury.

“I dedicate my lecture to my credit card company over the past 18 years that recently tried to charge me $24.34 in interest and late fees on a bill for just $2.00,” Ryan said.

Ryan spoke about how the terminology relating to usury originated with the use of cattle to pay off debts.

“Michael Hudson, a historian of economics in antiquity, maintains that the imagery involved in describing interest accruals symbolically refers to the reproduction of cattle,” Ryan said. “Heads (capita in Latin) of cattle seem to have contributed their name to what we call ‘capital’ today.”

Ryan also spoke about anti-usury provisions spelled out in the Book of Exodus.

“One central element of a market economy specifically forbidden in the Book of the Covenant (Ex. 20:22-23:33), datable to several centuries later than Abraham, is the charging of interest on loans made to fellow Israelites,” Ryan said.

However, Ryan stated that the Jewish people were forced to charge interest to non-Jews in order to make a living after the Roman devastation of Jerusalem in 70 CE and the formation of the Jewish diaspora.

“No longer having land of their own on which to herd or farm, Jews found themselves economically circumstanced into the life of trade and even into banking and the lending of money for interest,” Ryan said. “The ability of Jews to lend at interest to non-Jews facilitated this particular form of financial survival.”

Ryan also spoke about the evolution of Christian views on usury.

“The theological writers of the first Christian centuries shared the hostility of many New Testament authors to the market and its values,” Ryan said. “They were particularly antagonistic to the charging of interest on loans, as can be seen from the commentary by Clement of Alexandria (ca. 150-215 CE) on the forbidding of interest on loans in Exodus 22:25.”

However, he stated that the matter became open for interpretation by the time of the Protestant Reformation.

“In the Reformation era, Martin Luther and John Calvin embraced opposite viewpoints on the charging of interest of loans,” Ryan said.

“Luther continued with the medieval Catholic hostility to usury, as can be seen in his Long Sermon on Usury (1520), in which he describes the lending of money to a renter to use it to make a profit,” Ryan said. “What Luther doesn’t like about this business is that the renter of the property takes all the risks, and even if the crop or business the renter undertook fails, the renter, even in bankruptcy, still has to pay back five percent more than was actually borrowed from the lender.”

“John Calvin on the other hand, though five percent interest on a loan reasonable, although he banished from Geneva those who worked as professional money-lenders.”

Ryan also addressed the negative view in which the Islamic religion regards usury.

“In an early passage of the Qur’an in terms of time and place of revelation, the charging of riba (interest) is contrasted vividly with the obligatory annual Muslim payment of the poor-due, zakat,” Ryan said.

Ryan also addressed current Islamic perspectives on usury.

“Although Christians over the last five centuries [lost] their aversion to charging interest on loans, Muslims have not, and this is particularly noticeable in the wealthy oil states of the Gulf, but also in poorer countries like Egypt and Pakistan,” Ryan said. “The Muslim Brothers, since their founding in Egypt in the early 20th century have opposed the automatic charging of interest on loans or the automatic paying interest on monetary investments.”

Rabbi Daniel Polish and Hofstra University Professor Hussein Rashid offered responses to the lecture from the Jewish and Muslim perspectives, respectively.

Polish addressed how charging interest has become a significant part of historic perceptions on Jews, an assertion which he supported by referencing Shylock in William Shakespeare’s play The Merchant of Venice (The character is a Jewish moneylender).

            “When we talk about moneylending, of course it impossible for anyone who is familiar with the Western canon not to summon images of Shylock, whose very name has become eponymous in various circles for putting out money on interest,” Polish said.

Polish then spoke about how the image of the moneylender has become conflated with the world’s perception of Jews.

“Judaism is a essential part of Shylock’s usury, and in Shylock’s usury, there is fundamental element of the world’s perception of Jews,” Polish said. “Centuries later, it is fulfilled by the Rothschilds, whose financial acuity funded so much of European government in the 18th and 19th centuries and created the image of the international Jewish banker.”

Hussein spoke about usury in terms of the relationship between the individual and God.

“Muslim traditions generally affirm capitalism, and see capitalist playing an important role in societal transformations,” Hussein said. “But, like all human activity, it then needs limits and conventions to make sure that God’s consciousness.”

According to Hussein, the prohibition on usury exists to make sure that humanity does not become taken over by greed.

“Arguably, the greatest sin in Muslim traditions is to be ungrateful to God,” Hussein said. “There are numerous ways one may become detached from God, but to become overly attached to the goods of the world is by far the easiest.”

The lecture concluded with a discussion between the three men and Donna Rappaccioli, dean of the Gabelli School of Business.