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Usury

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Usury is a term used to describe the practice of making loans that are seen as unfairly enriching the lender. The word comes from Medieval Latin usuria, which means interest. In a moral sense, usury refers to taking advantage of others during their misfortunes. In a legal sense, it refers to charging an interest rate that exceeds the maximum rate allowed by law. A person who practices usury is called a usurer. In modern English, people might use the term loan shark to describe someone who lends money in an abusive way.

UsuryDurer
UsuryDurer

The mechanism of usury involves a borrower receiving a sum of money and agreeing to pay back more than they received. This extra amount is known as interest. In many historical societies, this practice was viewed through a religious or ethical lens. For example, in ancient Christian, Jewish, and Islamic societies, charging any interest at all was often considered wrong or illegal. In India, during the Sutra period from the 7th to the 2nd centuries BC, laws even prohibited the highest castes from practicing usury.

Different religious traditions have established specific rules regarding lending. In Judaism, lending is often viewed as an act of righteousness called tzedakah. This is an ethical obligation to help the community survive. The Torah prohibits charging interest to fellow community members, though it allows lending to foreigners. In Christianity, the New Testament teaches people to lend without expecting anything in return. The Catholic Church held very strict views for centuries. The Council of Vienne in 1311 even declared that the right to charge interest was a heresy.

Christ drives the Usurers out of the Temple
Christ drives the Usurers out of the Temple

History shows that usury was a major topic of debate among ancient philosophers and leaders. Figures such as Plato, Aristotle, and Cicero spoke against it. Later, the theologian Thomas Aquinas provided a famous argument against it in the 13th century. He argued that because money is an intermediary used to exchange for goods, charging a fee for the money itself was unjust. He compared it to trying to sell wine separately from the use of the wine. This logic suggested that a lender would be selling something that does not truly exist.

Die Wucherfrage
Die Wucherfrage

The Roman Empire provides a detailed look at how moneylending worked in practice. During the Principate period, banking was conducted by private individuals and small, back-street firms. These were often run by the urban lower-middle class. Interest rates varied between 4 and 12 percent annually. However, if rates were higher, they often jumped to 24 or 48 percent. Lenders often quoted these rates on a monthly basis. By the 3rd century, currency problems in the Empire caused these banking activities to decline.

Usury has also been linked to significant social and political conflict. In England, King Edward I passed the Statute of the Jewry in 1275. This law made usury illegal and linked it to blasphemy. This was used to seize the assets of those who violated the law. As a result, 300 Jews were hanged and their property went to the Crown. In 1290, the Edict of Expulsion forced all Jews to leave England. Many people avoided this by converting to Christianity, though some continued to practice their original faith in secret.

Significant changes occurred in the 16th century regarding how money was handled. Short-term interest rates dropped from around 30 percent to about 9 or 10 percent. This change was caused by increased capital availability and refined commercial techniques. The Reformation also played a role in weakening religious scruples about lending. In 1545, King Henry VIII of England passed an act regarding usury. This period marked a shift toward the lawful right to charge interest on lent money. These shifts helped connect the ancient debates over morality to the modern systems of finance used today.

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File:UsuryDurer.jpg
UsuryDurer.jpg
File:Die Wucherfrage.jpg
Die Wucherfrage.jpg
File:Christ_drives_the_Usurers_out_of_the_Temple.jpg
Christ_drives_the_Usurers_out_of_the_Temple.jpg
File:Bernardino da Siena – Tractatus de contractis et usuris, 15th-century manuscript – BEIC 10592116.jpg
Bernardino da Siena – Tractatus de...
File:Magna_Carta_(British_Library_Cotton_MS_Augustus_II.106).jpg
Magna_Carta_(British_Library_Cotton_MS_Aug...
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