Is it biblical to charge interest on debt?

In debating the Biden administration’s recent move to introduce “student loan forgiveness,” some Christians have revived past theological condemnations of usury (lending money at interest).

Christians have said and done many things throughout history. I am convinced that Christianity was an obviously positive outcome for human society, but that doesn’t mean that every Christian opinion or even tradition was right or good. Some were pretty bad. I sometimes console myself with the fact that some of these, though professed by Christians, were actually imports from pagan philosophy. Geocentrism is an example of this. It is also usury.

It would have been nice if the Protestant Reformation had cleaned up with usury, but the legacy there is ambiguous. John Calvin was more reasonable than most, although the temptation to moralism still affected him. Economist Murray Rothbard writes,

Calvin’s main contribution to the question of usury was having the courage to drop prohibition altogether. The Aristotelian argument that money is sterile had only contempt for this son of an important city official. A child, he emphasized, knows that money is only sterile if it is locked away somewhere; but who in their right mind borrows money to waste money? Merchants borrow money to make a profit on their purchases, and money is then fruitful. As for the Bible, Luke’s famous decree commands only generosity to the poor, while the Hebrew law in the Old Testament is not binding in modern society. For Calvin, then, usury is perfectly permissible provided it is not encumbered in the form of loans to the poor, who would be harmed by such a payment. In addition, of course, every legal maximum must be observed. And finally, Calvin asserted that no one should act as a professional moneylender.

The curious result was that Calvin hedged his explicit pro-usury doctrine with qualifications and in practice approached the views of scholastics like Biel, Sumenhart, Cajetan and Eck. Calvin began with a comprehensive theoretical defense of interest-taking and then concluded with qualifications; the liberal scholastics began with a usury ban and then put it into perspective. But while the two groups were converging in practice, and the scholastics were more theoretically sophisticated and fruitful in discovering and formulating exceptions to the usury prohibition, Calvin’s bold break with the formal prohibition was a liberating breakthrough in Western thought and practice. It also threw the responsibility for the application of teachings on usury from the church or the state onto the individual’s conscience. As Tawney puts it, “The essential feature in his [Calvin’s] Discussion of the subject is that it assumes that credit is a normal and inevitable occurrence in the life of a society.

Calvin was absolutely right about the law of the Old Testament. The loan arrangements between Israel were enmeshed in a system of sabbaticals, land sales bans, and slave rules. No one advocates ending all agricultural production every seven years and then for one more year every fifty years (so no crops for two consecutive years). And the land tenure system was based on a history of conquest that cannot and should not be duplicated. Those who advocate a ban on usury (that was Not forbidden in Israel in all cases) are not serious about the Bible. If that were the case, they would have to consider barring foreigners from owning land in the US as an application of biblical justice. No, I am not suggesting that such a policy is Christian. And usury is not condemned either.

In addition, Jesus believed that it was ethical to borrow money at interest (Matthew 25:27; Luke 19:23). If I thought people really cared, I would say more about the biblical context. But I don’t think it does.

Usury is just the rent of money. If usury is sinful, then so is hiring everything else.

Saying that rent isn’t inherently sinful isn’t the same as saying that all leases really are in the best interests of the tenant. It’s also not the same as saying that all landlords are sincere.

Honestly, I’ve never found a situation where renting was as beneficial as owning. Likewise, being poor will always be a disadvantage if you are rich. Legislation will never change this basic fact. Borrowing money is just one prominent manifestation of this disadvantage.

Your emotional response to things like payday loan companies doesn’t justify legislative intervention. You need a reasonable basis to argue that proposed legislative intervention will actually make the people you claim to be helping better off. Reciting decontextualized Old Testament statements or economic fallacies from classical philosophy imported into Christian culture is not enough.

Mark Horne has served as a pastor and has worked as a writer. He is the author of The Victory According to Mark: An Interpretation of the Second Gospel, why baptize babiesJRR Tolkienand Solomon says guidelines for young men. He is Executive Director of Logo Sapiens Communications and a writer for SolomonSays.net.

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