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.
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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
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