Source:
https://www.renegadetribune.com/the-jewish-origins-of-usury/
by Karl Radl
One
of the most hated practices in history is that of usury and many people
associate the invention (or at least major exponents) of usury with the jews.
(1) Traditionally this has been poohpoohed by jewish and philo-Semitic
historians and writers with various methods of obfuscation being used with the
most common being the claim that ‘non-jews were engaging in but the jews
outlawed’ and that ‘non-jews blamed it on jews when they were in fact
doing it just as much if not more than the jews’. These arguments against
the idea that jews as a group often engaged in usury are beyond the scope of
this article and I will address these separately.
However,
the argument that is probably the most used is the claim that the jews ‘didn’t
invent usury’ and ‘were the first to regulate it’.
The
argument goes that usury existed before the jews first appear onto the stage of
history and usually the Code of Hammurabi (c. 1775 B.C.) is bought up as an
example of usury being legislated against before jews appear in history.
The
problem with this argument is that it completely mischaracterizes the nature of
laws on interest that came before the Biblical prohibitions and especially
Deuteronomy 23:19-20 which states that:
‘When you lend money, food, or anything else to another Israelite, you are not
allowed to charge interest. You can charge a foreigner interest. But if you
charge other Israelites interest, the Lord your God will not let you be
successful in the land you are about to take.’ (2)
Since
the bland statement in Deuteronomy that interest cannot be charged to an
Israelite (= jew) but can be charged to a foreigner (= non-jew) is completely
unique in the history of interest rates in the ancient/classical world. (3)
Further
– as Robert Maloney is careful to note – while some of the discussions of
ancient texts as regards legislation around interest rates and creditor/debtor ‘are
often not clear’. (4) The fact remains that strict limitations were put on
rates of interest as well as the treatment of creditors and debtors in the
ancient Near East and only ancient Israel had any kind of blanket ban on taking
interest. (5)
The
first direct mention of the charging of interest occurs in the Laws of Eshnunna
during the Old Babylonian period and date to shortly before the Code of
Hammurabi.
Where
laws 18a to 21 state that:
‘18A. Per 1 shekel (of silver) he will add one sixth of a shekel and 6 grains as
interest; per 1 kor (of barley) he will add 1 (pan) and 4 seah of barley as
interest.
19.
The man who gives (a loan) in terms of his retake shall make (the debtor) pay on
the threshing floor.5
20.
If a man lends out money to the amount recorded, but has the corresponding
amount of barley set down to his credit, he shall at harvest time obtain the
barley and its interest, (namely) 1 (pan) (and) 4 seah per 1 kor.
21.
If a man lends out money in terms of its initial (amount), he shall obtain the
silver and its interest, (namely) one sixth (of a shekel) and 6 grains per 1
shekel.’ (6)
These
laws only covered the period between seedtime and harvest and were a way to
allow farmers in Mesopotamia to have sufficient funds to purchase seed and/or
tools (7) by giving them fixed interest rate loans that were then repayable
after the harvest was gathered. (8)
They
also allowed the debtor to repay the loan the following year should the harvest
fail which is also restated in the Code of Hammurabi, (9) while also protecting
the creditor against non-repayment by the borrower as well as fraud. (10)
Different localities and regions did use different fixed interest rates (11) and
the temples of the various Mesopotamian deities often acted as loan agents and
were generally more forgiving of debtors. (12)
The
successor of the Laws of Eshnunna; the Code of Hammurabi also includes the
addition of legal clauses defending debtors against creditors manipulating their
accounts to their advantage (13) such as using light counter-weights when giving
out a loan and heavy counter-weights when receiving repayment (i.e., loaning
less than agreed but receiving more than agreed) to substantially increase their
profits, which the Written Torah (Leviticus 19:33-36 and Deuteronomy 25:13-15)
and the Tanakh (Micah 6:10-11) refer to Israelites doing to their debtors as
well. (14)
What
Maloney is getting at here is that the Mesopotamians were simply standardizing
rates of interests and the laws around what creditors and debtors could (and
could not) do and were not proscribing interest as much as they were creating
commercial mechanisms to benefit their economies to allow them to overcome the
bad years as well as prevent any individual injustice or exploitation. (15)
In
essence then the Mesopotamians didn’t create usury, but rather regulated
interest rates and creditor/debtor rights so that their economies were flexible
and robust while also ensuring that a debtor’s position was as lenient as
possible without being permissive.
Those
who claim ‘usury is the taking of any interest’ will no doubt object
that this is still usury, but it is worth pointing out that this absolutist
definition is very late and comes from the high medieval era (e.g., Saint Anselm
of Canterbury in the eleventh century) and usury has long truly referred to
disproportionate/exploitative rates of interest not ‘any interest’ as
we can see in the example of ancient and classical Greece where high rates of
interests were charged but almost always on commercial ventures with a strong
link to risk (i.e., if you were borrowing the money for a speculative commercial
voyage to bring say olive oil from Sicily to Athens then your interest rate
would be much higher than if you were borrowing the money to buy seed grain for
your family farm for example) with the maximum chargeable interest rate being
100 percent. (16)
In
addition, the ancient and classical Greeks enforced numerous legal and non-legal
(e.g., social) restrictions against charging these highest rates of interest so
that they were rarely used and only then in extraordinarily risky ventures with
appropriate safeguards to the debtors as well as the creditors. (17)
Again
the Greeks were not engaging in usury but rather using a form of early risk
analysis to set interest rates on commercial loans with stipulated rights for
creditors and protections for debtors in the case of disaster or non-payment not
loaning money to say the citizens and farmers in the Bavarian market town of
Deggendorf and then once the crop failed trying to move in to take control of
the entire town’s assets and lands as jews did in 1338 A.D. (18)
Similarly to ancient and classical Greece; early Rome had a problem with the
social consequences of interest-bearing loans between creditors and debtors
since in Roman law of the time creditors could enslave the debtors in order to
pay off the debt before 449-451 B.C. (19) as a kind of precursor to the European
debtors’ prisons of the early modern to the Victorian era. However circa 449-451
B.C that changed with the issuance of the Law of Twelve Tables which did
precisely what the Mesopotamian legal codes before it had done and regulated the
amount of interest that could be charged (a maximum of 8 to 10 percent) on any
loan between a creditor and debtor. (20)
This was
then reaffirmed by the Lex Duillia Menenia in 357 B.C. (21) and a further law of
347 B.C. reduced the maximum allowed rate of interest to just over 4 percent
from the previous 5 percent. (22) While the Lex Genucia of 342 B.C. prohibited
the charging of any interest on loans altogether. (23)
Naturally Roman creditors sought to get around this and in so doing started to
lend money through non-Roman intermediaries. (24) Thus, to remedy this; the Lex
Cornelia in 88 B.C. returned the rate of interest to that of the Law of Twelve
Tables (i.e., between 8-10%). (25) While a further revision of the Roman legal
code – the Lex Valeria in 86 B.C. – introduced further protections for debtors
by allowing bankrupts to pay off their debts by paying back one quarter of what
they owed their creditors (26) in a measure that harked back to the earlier
Mesopotamian law codes as well as earlier Greek counter-measures against
malicious and predatory creditor practices.
From
then on common Roman rates of interest were set at between 6-12 percent for
centuries until the rise of the Eastern Roman Empire to prominence in the form
of Byzantium. (27)
We can
thus see from the foregoing summary that there was no other precedent for usury
or exploitative interest taking in the ancient or classical world other than
that stated in Deuteronomy 23:19-20, which remember states:
‘When you lend money, food, or anything else to another Israelite, you are not
allowed to charge interest. You can charge a foreigner interest. But if you
charge other Israelites interest, the Lord your God will not let you be
successful in the land you are about to take.’ (28)
This –
as Kirschenbaum points out – (29) is completely unique in the ancient and
classical world which completely bans the charging of any interest whatsoever
when the creditor and debtor are both jewish – (30) indeed jews are strongly
encouraged to lend money to other jews at no interest whatsoever – (31) but when
the creditor is jewish and the debtor non-jewish then it is not only permissible
for the jewish creditor to charge the non-jewish debtor interest but also
exorbitant rates of interest.
Since
jewish religious law (halakha) makes no distinction between legal/reasonable
interest and illegal/exorbitant interest in either the Biblical law or the
Talmuds (32) and jews view interest being charged against borrowers – even harsh
(i.e., usurious rates of) interest – as inherently fair and moral because it
isn’t their money and they ‘freely entered into the contract’ (33) even
if they were forced to do so (i.e., a legal fiction to justify immoral practices
that could have been written by twentieth century jews like Ludwig von Mises).
As
Kirschenbaum has pithily put it:
‘The
Deuterominic double standard did not disturb the Jewish commentators.’ (34)
And then
goes on to further explain
‘To
Jewish commentators the verse presented no difficulties. The morality of the
permission was clear: taking interest on loans is consistent with economic
justice and with the rules of ethics. But if so, it may be asked, what need was
there for Scripture to grant such permission? The answer: to intimate that when
a Jew lend to a Jew on interest, he violates a positive as well as the negative
injunction. In the Rabbinic interpretation of Scripture negative implications
expressed in positive language (e.g., Unto a foreigner thou mayest lend upon
interest) are technically positive commands, and added to negatively expressed
commands (e.g., Thou shalt not lend upon interest to thy brother), render them
more severe.’ (35)
In
summary then in Deuteronomy 23:19-20 jews are positively ordered by their god
Yahweh to go out and loan money to non-jews with any interest rate that the non-jew
will accept (usurious or non-usurious) while are by contrast strongly forbidden
from charging any interest on loans to fellow jews whatsoever and indeed
positively commanded to make such loans. (36)
The
rationale for this was explained by the prominent thirteenth century rabbinic
commentator Rabbi David Kimhi as follows:
‘Not
so regarding the relation between Israelite and Gentile. The Israelite is under
no obligation to perform hesed with him and to lend him his money without, for
they generally hate the Israelites.’ (37)
Put
simply jews are positively commanded in Judaism to charge usurious rates of
interests to non-jews because ‘non-jews hate jews’ therefore doing
anything bad to them (such as charging them usurious rates of interest) is
permissible because ‘they hate jews anyway so it doesn’t matter’.
Since we
have to remember the Written Torah is ‘the primitive expression of an
ethnocentric, pre-commercial clan’ (38) who had the ‘blood brotherhood
morality of the Hebrew tribesmen.’ (39)
Thus,
whenever we read Biblical provisions – and Christians have often attempted to
universalize them incorrectly – (40) we should remember Hillel Gamoran bland
statement in his article on Biblical law in 1971.
To wit:
‘That the interest law applied only among Israelites should not surprise us. In
fact, it would be more surprising if it had included the foreigner, for most of
the Bible’s laws protecting the poor were only for the Israelite poor, not for
foreigners. The laws protecting the slave from harsh treatment, guarding the
rights of the female slave, declaring that a slave must be freed on the seventh
year, releasing from debts on the seventh year, and leaving the land’s growth on
the seventh year to the poor all applied only to the Israelite. The law on
interest, then, was part of a legal body which served to protect the poor among
the Israelites.’ (41)
So yes
jews did indeed invent usury and they have justified it ever since based on
their dislike/hatred of non-jews.
Thanks
for reading Semitic Controversies! This post is public so feel free to share it.
References
(1) For example: Montagu Frank Modder, 1960, ‘The Jew in
the Literature of England: To the End of the 19th Century’, 1st Edition,
The Jewish Publication Society of America: Philadelphia, p. 22 and Barnet
Litvinoff, 1969, ‘A Peculiar People: Inside the Jewish World Today’, 1st Edition,
Weidenfeld and Nicolson: London, pp. 12-13
(2) Deut. 23:19-20 (CEV)
(3) Aaron Kirschenbaum, 1985, ‘Jewish and Christian
Theories of Usury in the Middle Ages’, The Jewish Quarterly Review, Vol.
75, No. 3, p. 270, n. 3
(4) Robert Maloney, 1974, ‘Usury and Restrictions on
Interest-Taking in the Ancient Near East’, The Catholic Biblical Quarterly,
Vol. 36, No. 1, p. 1
(5) Idem.
(6) Quoted in Ibid., p. 2
(7) Ibid., pp. 2-3
(8) Ibid., p. 3
(9) Ibid., pp. 4-9
(10) Ibid., p. 10
(11) Ibid., p. 5
(12) Ibid., p. 15
(13) Ibid., pp. 8-9
(14) Ibid., p. 9
(15) Ibid., pp. 11-12
(16) Robert Maloney, 1971, ‘Usury in Greek, Roman and
Rabbinic Thought’, Traditio, Vol. 27, pp. 79-81
(17) Ibid., pp. 81-88
(18) On this please see my article:
https://karlradl14.substack.com/p/deggendorf-1338-the-anatomy-of-anti
(19) Maloney, ‘Usury in Greek’, Op. Cit., p. 88
(20) Ibid., p. 89
(21) Idem.
(22) Ibid., p. 90
(23) Idem.
(24) Ibid., p. 91
(25) Idem.
(26) Idem.
(27) Ibid., p. 92
(28) Deut. 23:19-20 (CEV)
(29) Kirschenbaum, Op. Cit., p. 270, n. 3
(30) Benjamin Nelson, 1969, ‘The Idea of Usury: From
Tribal Brotherhood to Universal Otherhood’, 2nd Edition, The
University of Chicago Press: Chicago, p. xx, n. 2
(31) Maloney, ‘Usury in Greek’, Op. Cit., p. 97
(32) Kirschenbaum, Op. Cit., p. 270, n. 3
(33) Ibid., pp. 270; 283-284
(34) Ibid., p. 288
(35) Idem.; Maloney, ‘Usury in Greek’, Op. Cit., p.
102 makes a similar summary.
(36) Maloney, ‘Usury in Greek’, Op. Cit., p. 97
(37) Quoted in Kirschenbaum, Op. Cit., p. 289
(38) Morris Cohen, Bernard Meislin, 1964, ‘Backgrounds of
the Biblical Law against Usury’, Comparative Studies in Society and
History, Vol. 6, No. 3, p. 251
(39) Nelson, Op. Cit., p. xix
(40) Ibid., p. 4; also, Kirschenbaum, Op. Cit., pp. 286-288
(41) Hillel Gamoran, 1971, ‘The Biblical Law against
Loans on Interest’, Journal of Near Eastern Studies, Vol. 30, No. 2, p. 130
via Karl Radl’s Substack