Thinking About Usury

The reasons given for opposing usury have varied. An early argument against interest was that lenders were charging for the time that they did not have the money – and time belongs to God alone. The Roman Catholic Church was heavily influenced by the medieval scholar Thomas Aquinas, who said that usury involves charging for both an item and for the use of the item. In other words, it is like paying for a cake and then being told that you have to pay extra if you want to eat it. Aquinas insisted that money is only a measure of value. To make money out of money is therefore to violate its essence.

Behind all these theoretical arguments is a very human concern: usury often involves taking advantage of people in desperate situations who will agree to whatever allows them to survive. The prohibition on usury in Leviticus is in the context of not exploiting people “who fall into difficulty and become dependent on you” (Leviticus 25,35). Aquinas insisted that a fair use of money involves equality of exchange, which is not possible if a transaction gives one person power over another.

Against this, it can be pointed out that nowadays banks generally have more power than savers, even though savers are technically lending their money to the bank. However, the same questions come up on those occasions when banks charge high rates of interest to people in desperate need of money. Of course, this is even more the case when it comes to high-interest lending companies and loan sharks.