Re: Third Worlder on Free Markets

From: steve (
Date: Wed Oct 17 2001 - 05:04:19 MDT

> >
> > IIRC, when similar religious laws were tried in parts of Europe at
> > points in time, I believe the business community created fee structures
> > the various services associated with the interest free loan so that
> > could be made...
Spike said
> My knowledge of history is dubious at best, but I think there was
> a time in Europe where the Christians were forbidden under usury
> laws from profitting from loaning capital. Fortunately they had Jews
> living among them who were under no such restrictions. The Jews
> had many restrictions in other areas, such that the structure of the
> laws practically forced them into banking, which turned out to be
> enormously profitable. Perhaps someone can fill in the details. spike
This is broadly right. The Church develops an explicit ban on usury during
the "medieval reformation" of the 11th/12th centuries (along with a lot of
other things such as clerical celibacy). Jews were increasingly banned from
other occupations but could lend money at interest. Two consequences in
addition to the one Spike gives (a) Jews become even more unpopular and
favorite scapegoats for Kings facing a spot of bother over high taxes etc
(b) everyone else wanted to get in on the act, particularly the Italians and
the Dutch. So ingenious theologians produced arguments that it wasn't
interest that was banned, only "excessive" interest, and came up with
elaborate ways of charging for loans without explicitly charging interest
(what Muslims do today). Although rulers repeatedly pass anti-usury laws
these are not effectively enforced by the 15th century. BTW Calvin was very
hostile to interest, as were most of his followers. Steve Davies

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