Usury

[Homer]

Paidion is correct about the biblical meaning of usury. However, the prohibition against charging interest is probably not applicable today in most cases.

Our world is much different than the world of the ancient near-east. In that culture everyone "knew" that the amount of goods (the "pie") was limited, or fixed. Thus the "rich" were generally seen as bad folks because they necessarily always gained at the expense of others; if the rich got more someone had less. And any attempt to better oneself by accumulating wealth was seen as a sure sign of greed.

In "The New Testament World - Insights From Cultural Anthropology" Bruce Malina writes:

"Traders bought needed commodities in one place and sold them in another at monopoly prices, getting as much as they could regardless of their own costs. All these forms of capital accumulation were considered to be forms of usury. Technically, usury means making money by allowing another to use one's money, much as our bank loans and other modern lending institutions do. In the first century they would all be considered dishonorable and immoral forms of usury. Trading, in turn, meant making money by investing in some goods purchased abroad with the hope (and certainty) of selling at a much higher price at home..... The trader, like the money lender and the tax collector, was considered basically godless."

Now consider our society where the "pie" is viewed as not limited. It is possible to borrow money and use it to get wealthy, while benefitting customers and paying interest to the one who took a risk in lending the money.

Take the late Steve Jobs for example. Apple was started in 1976 with money borrowed from an Intel executive, and later Jobs borrowed 150 million from Bill Gates. Jobs was able to make products that arguably enriched the lives of millions of people. At least they think so; they stand in lines to buy them. It seems absurd to think it immoral for Gates and the Intel executive to have risked their money without receiving a profit for their trouble.

It seems to me the great evil today is on the part of the borrowers. To maintain our lifestyle, through our government we borrow enormous sums of money that our children and grandchildren will have to repay. Or if we have no offspring someone else's children will pay. Or even worse, we will, as some would like to see,
ignite inflation and make what we have borrowed worth much less to those who loaned us the money when we repay. Jesus might have a very different message for us today regarding borrowing and interest.

On the other hand, if we as Christians are asked by a needy person for a loan I do think it is wrong to charge interest. In that case we should lend (or give) with no expectation of getting anything in return.

Interestingly, in his book Malina says that we have a very wrong idea of what "poor" meant during Jesus' day. Malina points out that in that peasant society less than 2% of the people owned almost all the wealth. The rest were all what we would call poor, but they would not think so as long as they were able to preserve their inherited staus of subsistence and "honor". Malina says that in regard to the term "poor" the New Testament presents two sets of usages of the word. First we find a series of passages where the word "poor" is used without further description. From such passages we can not get any idea of what the authers are referring to except by sticking our own ideas into their words.

On the other hand, there is also a series of passages in which the word "poor" is used in the company of other words that describe the condition of the person who is labeled "poor". They are the imprisoned, blind, debt-ridden, lame, lepers, hungry, maimed, hungry, thirsty, stranger, widow, etc. The "poor" were people who were placed in some unfortunate circumstance or turn of events. So there were the rich at one end of society, those who faced some bad circumstance at the other, and the vast number of peasants in between, who in our eyes were in poverty. Malina says "...poor would most certainly not be an economic designation".

[thrombomodulin]

In that culture everyone "knew" that the amount of goods (the "pie") was limited, or fixed. Thus the "rich" ... always gained at the expense of others; if the rich got more someone had less

I would like to contend that the above is false. The ancient world was poor because it sufferred from a lack of capitial goods. The opportunity to invest in a method to increase productivity existed then as it does now. The continuing process of specialization in one's work and conducting trade (a.k.a "the division of labor") is only different in degree, not in kind, between now and ancient times. In the modern times we are more wealthy than the ancients could have attained because of a great amount of capitial accumulation, for by their use one today attains a greater amount of produced goods for less effort than ancient times.

"Traders bought needed commodities in one place and sold them in another at monopoly prices... Steve Jobs ... was able to make products that arguably enriched the lives of millions of people".

Both examples are the same thing - people bought a product because a product because they valued what they recieved more than one they paid for it. It is always true that the seller wants a higher price, and the buyer wants a lower price (Prov 20:14). However, both consumers and producers in the examples cited benefit from the transaction, and neither is morally wrong.

It seems to me the great evil today is on the part of the borrowers.

The great evil of today is not the borrowers. The reason there is so much borrowing is a direct result of the nature of the monetary system imposed upon us by our rulers. There is the notion that there exists a "natural rate of interest" where the supply and demand of those willing to defer present consumption for future consumption is balanced by those who prefer present consumption for future consumption (This, of course, has to do with actual physical resources and tangible objects). The interest rate that would develop in a free market is simply a reflection of the ratio at which people value present goods over future goods.

Our trouble is that the government has imposed a monetary system where money is abstract, not tangible, and can be produced in unlimited quantities out of thin air. Money enters the economy through loans, where the central bank almost always follows of policy of pushing interest rates below the "natural rate". Borrowers are acting perfectly rationally in such a sytem - because the interest rate falls below their time preference they chose to borrow. The trouble is, there is no corresponding person who has undertaken the commensurate savings to fulfill the loan. Instead, the fiat money is simply created out of thin air and given the borrower. Mass endebtedness in a society can only exist if (1) there are legal tender laws, (2) there is credit expansion (normally via fractional reserve banking). Note also, the continued expansion of the money supplies causes the value of monetary unit to diminish over time, which encourages borrowing. A free market in money would cause the opposite would to be true.

To maintain our lifestyle, through our government we borrow enormous sums of money

Credit expansion, especially government borrowing, does not maintain or improve our lifestyle. Instead, it makes our lifestyle worse off than would otherwise be.

[kaufmannphillips]

(1) If you have money to lend, then you have money to give. So it is unnecessary to charge interest to compensate for loss due to inflation, etc.

(2) When it comes to economic facilitation, there is an alternative to interest-based loans: shareholding.

[thrombomodulin]

If you have money to lend, then you have money to give. So it is unnecessary to charge interest

.

Well, I suppose if one has any thing under the sun whatsoever, then he has something to give. If someone offers to sell me bread for $3, but I am willing to pay at most $5 for the bread, then you could likewise reason that it is unnecessary for me to only pay $3, when I could instead offer the seller $2 more than his asking price. Supposing further the seller who had asked $3 for his bread, values even only the sum of $2 more than the loaves. Should he, because he has bread, reject my $5 offer, and insist that I only give him $2? I suppose by this reasonsing the buyer and seller could never reach a mutually agreeable price.

But why should interest alone be a singular exception to market pricing? Everywhere else the buyer sells for as high a price as he can, and the seller pays as little as he is able. There is nothing wrong with this. When one borrows and puts resources to use in a valued end (e.g. production), benefits are attained by that which thereby took place. Why should one not loan to that borrower which can put the resources to the most productive use - that is to say to that borrower who is willing and able to offer the highest interest payment (the highest price)?

When it comes to economic facilitation, there is an alternative to interest-based loans: shareholding.

Could you please inform me about this what exactly this alternative is, and explain its relevance?

[Homer]

Thrombomodulin,

Probably my fault, but you appear to have missed my point entirely.

I wrote:

Our world is much different than the world of the ancient near-east. In that culture everyone "knew" that the amount of goods (the "pie") was limited, or fixed.

To which you replied:

I would like to contend that the above is false. The ancient world was poor because it sufferred from a lack of capitial goods. The opportunity to invest in a method to increase productivity existed then as it does now. The continuing process of specialization in one's work and conducting trade (a.k.a "the division of labor") is only different in degree, not in kind, between now and ancient times. In the modern times we are more wealthy than the ancients could have attained because of a great amount of capitial accumulation, for by their use one today attains a greater amount of produced goods for less effort than ancient times.

When I placed the quotation marks around "knew" I thought it would be understood that the people of the ANE believed and lived as though the idea of limited goods was true. From research done by men such as Bruce Malina, John Pilch, Jerome Neyrey, et al, this would seem inarguable. There is an ancient proverb to the effect that when one man's cow gets fat his neighbor's gets skinny.

JP Holding comments:

It should first be understood that the ancient world held a concept of limited good, which is in contrast to our own society's conception of inexhaustible resources. Of course our resources technically are not inexhaustible -- they just seem like they are because we don't see the whole line of source and production! But for the ancients all good -- whether tangible or intangible -- was in limited supply, and it was obvious that it was. This was coupled with the paradigm of honor and shame, so that any person who held to too much of the limited supply was viewed as greedy and dishonorable if they did not "share the wealth" with those less fortunate.

As Holding notes, our attitude about this is the opposite of theirs. Holding mentions Malina in the article I took the quote from.

There has been much work done in cultural anthropology which involves "digging up" the beliefs, ideas, values, social structure, etc. of the ANE rather than excavating for buildings, pottery, etc. Their books are very illuminating regarding the scriptures.

Something they point out which helps us understand the near east of today is the value placed on "hohor". I am sure you have difficulty with the concept of "honor" killings. But to these people the greatest treasure in life is not wealth but their honor. This explains why Saddam Hussain reject an offer to escape into exile with hoards of money and prevent a war. He would have lost his honor in the sight of the people. In the ANE, even wicked rulers had honor.

To maintain our lifestyle, through our government we borrow enormous sums of money


Credit expansion, especially government borrowing, does not maintain or improve our lifestyle. Instead, it makes our lifestyle worse off than would otherwise be.

I do not understand your point. Do you believe we are acting morally when we protect our benefits (Warren Buffett's Medicare benefits, for example) by borrowing money from China that our children will have to repay? An enormous amount of government dollars are spent on the relatively well-off. And some persons of influence advocate inflation as a tool to lessen our debt. If that is not immoral I do not know the meaning of the word.

[thrombomodulin]

you appear to have missed my point entirely.

Indeed I did. I incorrectly thought you were affirming the ANE view of a limited pie view was a valid for that era, while still denying it would be true in the context of a modern economy.

From research done by men such as Bruce Malina, John Pilch, Jerome Neyrey, et al, this would seem inarguable.

I have not heard of these men before, or the research they have done. My fist impression (without yet of course reading their book) is that it seems like a hard conclusion to accept: For in the lower population density of the ancient world, would it not be obvious to anyone that vast amounts of uncultivated land exist - if only one could more effectivly sow and reap? or that there are more fish to be caught - if only there were better fishing nets and boats?

In any case God knew all along that the pie was not limited. So I still am at a loss as to understand why He would forbid any interest on any loan.

I'll write back on the government borrowing issue maybe later tonight, but at the moment I am out of time to write the reply.

[kaufmannphillips]

kaufmannphillips wrote:
If you have money to lend, then you have money to give. So it is unnecessary to charge interest.

thrombomodulin wrote:
Well, I suppose if one has any thing under the sun whatsoever, then he has something to give.

That's the attitude!

thrombomodulin wrote:
If someone offers to sell me bread for $3, but I am willing to pay at most $5 for the bread, then you could likewise reason that it is unnecessary for me to only pay $3, when I could instead offer the seller $2 more than his asking price. Supposing further the seller who had asked $3 for his bread, values even only the sum of $2 more than the loaves. Should he, because he has bread, reject my $5 offer, and insist that I only give him $2? I suppose by this reasonsing the buyer and seller could never reach a mutually agreeable price.

Ideally, each party should gauge the propriety of a price in light of its impact upon both the buyer and the seller. Each party should be looking out not only for their own benefit, but also for the benefit of the other party - loving their neighbor as themselves. And of course, both parties should be looking out for secondary and tertiary impacts of their arrangement on others, e.g., how it might affect their capacities to benefit others.

There are numerous ways for the parties in your scenario to work together to settle upon an agreeable price:
(1) they could split the negotiable profit margin down the middle (50:50 = $1.50 each = $3.50 price for you and the seller);
(2) they could decide whether one or the other of them has a greater use for the negotiable profit margin, and divide it accordingly (say, 65:35, 25:75, 100:0, or whatever);
(3) they could jointly apply the negotiable profit margin to others' needs (say, giving the $3 to a hungry family with no bread).

Or maybe they won't settle on an agreeable price. (That can happen with sheerly selfish actors as well.)

thrombomodulin wrote:
But why should interest alone be a singular exception to market pricing? Everywhere else the buyer sells for as high a price as he can, and the seller pays as little as he is able. There is nothing wrong with this.

There is something wrong with this, viz., that it is based upon competitive constrained interest, rather than cooperative mutual interest. I am ill-poised to love my neighbor as myself when I am trying to squeeze the greatest possible profit out of them.

thrombomodulin worte:
When one borrows and puts resources to use in a valued end (e.g. production), benefits are attained by that which thereby took place. Why should one not loan to that borrower which can put the resources to the most productive use - that is to say to that borrower who is willing and able to offer the highest interest payment (the highest price)?

"Most productive" for whom? There is no guarantee that the person who is willing and able to offer the highest interest payment will also be the person to put the resources to the most productive use for society. For example, Larry Flynt might offer a higher interest payment than a family farmer could hope to - but is smut more productive than food?

kaufmannphillips wrote:
When it comes to economic facilitation, there is an alternative to interest-based loans: shareholding.

thrombomodulin wrote:
Could you please inform me about this what exactly this alternative is, and explain its relevance?

I suppose you are acquainted with the corporate model and financing enterprises through shareholding.

Interest-bearing loans are not necessary to facilitate enterprise in an economy. Shareholding is not forbidden by Torah, and provides an adequate construct for venture investment.

What is more, it is a healthier construct. A shareholder's benefit is proportional to the success of an enterprise. A loan-holder's benefit is not proportional to the success of an enterprise - it may consume 20%, 50%, even 90% of the enterprise's profits. Because of proportionality, shareholding is less likely to sap the viability of an enterprise, and is likely to encourage greater contribution by investors to the enterprise's success.

So loans are not necessary to the facilitation of enterprise. Their sphere is that of charity. And the primary reason for loans as opposed to outright gifts would be to support the dignity and preserve the responsibility of the recipient.

thrombomodulin wrote:
So I still am at a loss as to understand why He would forbid any interest on any loan.

Because the point of loaning somebody money is to take care of them, not to take care of oneself.

[thrombomodulin]

To maintain our lifestyle, through our government we borrow enormous sums of money

Credit expansion, especially government borrowing, does not maintain or improve our lifestyle. Instead, it makes our lifestyle worse off than would otherwise be.

I do not understand your point.

There are two cases to consider when conducting an analysis of borrowing. First, those which do not involve the creation of new money, and second those which do. The key thing to always keep in mind here is that one can only consume a good which has already been produced by efforts which took place in the past (as opposed to the future).

In the first case, suppose "A" has money and loans it to "B". It follows that "A" abstains, for a period of time, from the use of resources that the sum of money could otherwise have been used to purchase. On the other hand, "B" is able to use those funds to obtain ownership of some physical resources he would not otherwise have acquired. If we keep our eyes on how physical resources are reallocated, as opposed to how money is reallocated, we see that control and ownership of resources are transferred from "A" to "B". (Of course, in an exchange economy "A" may forgo something that "C" otherwise may have sold to him, and "C" instead sells to "B", but this is beside the point). There is something of a balance here, because it is evident that B's present consumption can only exist because of A's prior production, and later on when the loan is repaid, A's future consumption will be provided for by production that B plans to undertake. So it is indeed true, that "B" can attain present benefits at the cost of future labor. However, due to the lack of time travel devices to send goods from the future back to the past, it remains impossible that "B" could ever attain a good that had not (1) already produced by someone else, and (2) has had someone relinquish ownership of that good. In this sense, I agree with you that Americans ("B") can attain a present benefit from the Chinese ("A").

In the second case, however, suppose that "A" has engaged in no production whatsoever, and has no money at all. Nonetheless, the government grants exclusively to "A" a license to create new money out of thin air. (The license comes with an onerous restriction: "A" can't spend the money he creates himself, He can only loan it to others. When the loan is repaid, the license requires "A" to destroy the principle received, but he can keep any interest payments). Now, it is not to hard to see that if "A" creates money and loans it to "B" at 0.01% interest, that "B" is able to, as before, obtain ownership of physical resources. The difference is that, in this case, "A" neither produced the goods to be loaned, nor did he defer his consumption of goods. So it should be clear that "B" attains tangible benefits that did not come from "A" or "B". Rather "B's" benefits are attained by the plundering others. The fact is that everyone besides "A" and "B" suffer a loss of purchasing power of their money - owing to the increase in the quantity of new money created, and also others experience a loss of the quantity of goods - as goods were transferred away from everyone else over to the ownership of "A" and "B".

In the second case above, "A" is the central bank and "B" is the government. A and B are partners in what is basically a scam. "Others" represent the citizens. B of course promises to make good on its "indebtedness" to A by saying that the debt will be repaid by taxation at a future date. Of course, this is a deception based in a false analogy to the first case. For in the second case, no tangible benefits were attained in the present at the expense future. Recall the key point at the beginning - one cannot consume what has not yet been created. All benefits the government purports to provide, are merely the very things that it itself has taken away from its own citizens in the present.

For further study, I would recommend reading Henry Hazlitt's "Economics in One Lesson", and Murry N Rothbard's "Mystery of Banking" (link above).

Do you believe we are acting morally when we protect our benefits (Warren Buffett's Medicare benefits, for example) by borrowing money from China that our children will have to repay?

I believe Caesar has no God given authority to administer a man's health care, or plunder one person for the benefit of another. So yes, it is my opinion that it is immoral.

[thrombomodulin]

If you have money to lend, then you have money to give. So it is unnecessary to charge interest.

Suppose if one has any thing under the sun whatsoever, then he has something to give ... Why should interest alone be a singular exception to market pricing?

The characteristic feature of all voluntarily conducted transactions is that both participants receive something they valued more than what they relinquished. That is to say, the participants in any voluntary transaction rank the value of what is exchanged in the opposite order (i.e. they have a disagreement). A transaction only fails to occur whenever the would-be participants rank the value in the same order. Surely it is true, that the buyer and seller in the bread example can agree to any price between $2.00 and $5.00 and regardless of what number that is both experience a benefit. It is apparent, in all three ways that you propose to remedy the problem, that it is unavoidable that praxeological profit (new wealth) results from the exchange which must by experienced someone - even if it is a gift to a third party.

The issuing of a loan is not categorically different - new wealth, in the praxeological sense is thereby created, and thus both the lender and the borrower are better off than otherwise. The rational provided for the proposition that the interest rate ought to be zero, is as far as I can see, equivalent to asserting either (A) there is some yet unspecified feature that warrants a different ethical analysis for loans than every other market transaction, or (B) that it is morally required for one to defer all of the benefit created in an exchange to the other participant. Yet in so far as the latter is concerned in the answers you labeled (1) and (2) the buyer and seller of bread do not do insist in giving all the benefit to the other. Instead, by proposing these solution you agree with me that buyer and seller of bread can legitimately divide the profit by agreeing to any price between $2.00 and $5.00, so my question of why not the lender and borrower as well within a range of mutually agreeable rates of interest remains unanswered.

There is something wrong with this, viz., that it is based upon competitive constrained interest, rather than cooperative mutual interest. I am ill-poised to love my neighbor as myself when I am trying to squeeze the greatest possible profit out of them.

Not so. If the buyer of the bread makes the purchase for $2.00 the seller has still benefited from the transaction. Because, as you may recall, he values the sum of only $2.00 more than the bread. I'm sure you would agree that another would-be buyer who was willing to pay only at most only $2.50, but never made a offer to buy it because the asking price was $3.00, did less good for the seller than one who actually made a purchase by making an offer that was accepted for $2.00.

Additionally, there is here a needless confounding of the notions trade and charity. For the is no apriori reason that the seller ought to be the object of the buyers charity or vice versa. Are not both buyer and seller free to give to anyone in need as they see fit, regardless of the particular individuals with whom they conduct day to day transactions?

"Most productive" for whom?

The lender.

There is no guarantee that the person who is willing and able to offer the highest interest payment will also be the person to put the resources to the most productive use for society. For example, Larry Flynt might offer a higher interest payment than a family farmer could hope to - but is smut more productive than food?

If the production of a certain amount smut attains a higher income in the market than a certain amount of food, then (sadly) it is true that the society does value that amount of smut more than that amount of food. Nevertheless, the lender is most certainly not restrained to make his judgement of what constitutes a "valued end" and "productive" loan on solely monetary considerations.

[kaufmannphillips]

thrombomodulin wrote:
The characteristic feature of all voluntarily conducted transactions is that both participants receive something they valued more than what they relinquished.

You have written of "voluntarily conducted transactions," and I will make a couple of notes here:

For some, the notion that a transaction is voluntary will reduce or eliminate culpability for either party to the transaction. For instance, some might argue that it does not matter if Transaction A seems exploitative, because it was voluntarily agreed to.

However, if one is responsible to love their neighbor as themselves, then one might well be culpable for agreeing to a transaction that exploits another party, even if that other party voluntarily agrees to the transaction.

It is worth asking how voluntary a transaction becomes when one or another of its parties is subject to duress. To illustrate: a parent is seeking medicine for their child, who is weeping in pain; and due to the hour of the day and their location, there is only one seller available, who is charging five times the conventional rate. How voluntary is it if the parent agrees to pay the inflated price?

We also may return to your bread example: let us assume that the purchaser has not eaten in three days; and that the seller knows this; and that there is no other food available within a radius of two days' travel. How voluntary is this transaction likely to be?

thrombomodulin wrote:
The issuing of a loan is not categorically different - new wealth, in the praxeological sense is thereby created, and thus both the lender and the borrower are better off than otherwise.

We should be cautious about categorization. Our taxonomies may not correspond to G-d's.

One can attempt a number of objections to the precepts of Torah, by way of categorization: the tenth day of the seventh month is not categorically different from the seventh day of the tenth month; marrying a nephew is not categorically different from marrying a niece; carefully-cooked pork is not categorically different from carefully-cooked goat; worship during menstruation is not categorically different than worship more than a week after menstruation; committed loving homosex is not categorically different from committed loving heterosex; etc.


Our taxonomies may differ at times from G-d's because we have cultural assumptions that blind us to G-d's sensibilities. Many Americans may assume that obtaining profit from other persons is an opportunity for greatness, while G-d may consider it an opportunity for debasement.

A merchant can hardly keep from wrongdoing,
nor is a tradesman innocent of sin.
Many have committed sin for gain,
and those who seek to get rich will avert their eyes.
As a stake is driven firmly into a fissure between stones,
so sin is wedged in between selling and buying. (Sirach 26.29-27.2, NRSV)

The economy of early Israel was largely oriented around husbandry of the land and of beasts - with economic success hinging upon people nurturing the world, and the nurturing providence of G-d. But our economy is largely oriented around farming people - with economic success hinging not upon nurture, but upon maximizing profits through manipulation of people and the application of power. Of course, we will find the error of this in the long run. Nurture sustains, and yields ongoing success; exploitation exhausts, and yields fleeting success.

thrombomodulin wrote:
Instead, by proposing these solution you agree with me that buyer and seller of bread can legitimately divide the profit by agreeing to any price between $2.00 and $5.00, so my question of why not the lender and borrower as well within a range of mutually agreeable rates of interest remains unanswered.

I would not say that the profit can be legitimately divided simply by agreement to any price. Parties may agree to an illegitimate division, if one party is exploitative and the other party is desperate, or mild-mannered, or unwitting.

The Torah's regulation of usury may trace back to the Exodus narrative, which is the fundamental sacred story for Judaism. This narrative is about the children of Israel being delivered from slavery and becoming freemen and then vassals of G-d.

Accordingly, the Torah includes precepts that hedge against the enslavement of an Israelite in various ways. In ancient context, an individual and the members of his household might be sold into slavery to pay his debts. In the Torah, this practice is mitigated by a number of precepts (Leviticus 25:39-55; Exodus 21:2; cf. Deuteronomy 15:12-15).

Furthermore, the Torah includes precepts that hedge against an Israelite entering bondage in the first place, including:
-- an Israelite is to strengthen another Israelite who is faltering (without imposing interest or taking profit; Leviticus 25:35-38; cf. Deuteronomy 15:7-11);
-- an Israelite is not to impose interest upon the poor (Exodus 22:25; cf. Deuteronomy 23:19).

Imposing interest saps the efficacy of giving a hand up, and makes it harder for the borrower to escape their circumstances.

thrombomodulin wrote:
Everywhere else the buyer sells for as high a price as he can, and the seller pays as little as he is able. There is nothing wrong with this.

kaufmannphillips wrote:
There is something wrong with this, viz., that it is based upon competitive constrained interest, rather than cooperative mutual interest. I am ill-poised to love my neighbor as myself when I am trying to squeeze the greatest possible profit out of them.

thrombomodulin wrote:
Not so. If the buyer of the bread makes the purchase for $2.00 the seller has still benefited from the transaction. Because, as you may recall, he values the sum of only $2.00 more than the bread. I'm sure you would agree that another would-be buyer who was willing to pay only at most only $2.50, but never made a offer to buy it because the asking price was $3.00, did less good for the seller than one who actually made a purchase by making an offer that was accepted for $2.00.

If I love my neighbor as myself, I cannot be focused on maximizing my benefit in transactions with them. I must be focused on finding a proper balance between how the transaction serves their needs and interests, and how it serves my needs and interests. It is not enough for the other party to derive merely some measure of benefit that they deem tolerable.

thrombomodulin wrote:
Everywhere else the buyer sells for as high a price as he can, and the seller pays as little as he is able. There is nothing wrong with this.

kaufmannphillips wrote:
There is something wrong with this, viz., that it is based upon competitive constrained interest, rather than cooperative mutual interest. I am ill-poised to love my neighbor as myself when I am trying to squeeze the greatest possible profit out of them.

thrombomodulin wrote:
Additionally, there is here a needless confounding of the notions trade and charity. For the is no apriori reason that the seller ought to be the object of the buyers charity or vice versa. Are not both buyer and seller free to give to anyone in need as they see fit, regardless of the particular individuals with whom they conduct day to day transactions?

The fundamental issue is not charity. The fundamental issue is love. If love is supposed to be inherent in all that we do, then we cannot exempt trade from its dynamics. And so there is a necessary integration of the notions of trade and love.

thrombomodulin wrote:
When one borrows and puts resources to use in a valued end (e.g. production), benefits are attained by that which thereby took place. Why should one not loan to that borrower which can put the resources to the most productive use - that is to say to that borrower who is willing and able to offer the highest interest payment (the highest price)?

kaufmannphillips wrote:
"Most productive" for whom?

thrombomodulin wrote:
The lender.

Because maximal productivity for the lender is an inadequate scope of concern. The lender is responsible not only for their own needs and interests, but also for the needs and interests of others.

kaufmannphillips wrote:
There is no guarantee that the person who is willing and able to offer the highest interest payment will also be the person to put the resources to the most productive use for society. For example, Larry Flynt might offer a higher interest payment than a family farmer could hope to - but is smut more productive than food?

thrombomodulin wrote:
If the production of a certain amount smut attains a higher income in the market than a certain amount of food, then (sadly) it is true that the society does value that amount of smut more than that amount of food. Nevertheless, the lender is most certainly not restrained to make his judgement of what constitutes a "valued end" and "productive" loan on solely monetary considerations.

Valuation cannot so blithely be foisted upon society as a whole. 98% of society may place no value upon a commodity, but if the 2% who are interested in it have huge wads of disposable cash that they are willing to spend upon it, its price may be stratospheric.