We tend to have ambivalent attitudes about the lending of money at
interest. On one hand, we recognise it
as a needed service. Most of us have no
compunction about using credit cards for purchases. Even when we pay our entire balance on
receipt of our monthly statement, we understand that we are using the account
as a short-term loan to buy things without needing to withdraw the cash from
the bank. And even those of us who are
loath to use credit cards, or borrow money in other ways, still purchase large
items on credit: for example, an
automobile or a home. Very few of us
would be able to purchase these things at all without the use of credit. So by our buying patterns, we heartily
endorse the practice of lending money at interest. In differing degrees, we are happy to utilise
the services of those who do so.
On the other hand,
we hold those who make a living lending money, at the very least, in
distaste. Even whilst we happily use
their services, we find credit companies and banks unsavoury. I can’t remember the last time I heard
someone praise their credit card issuer.
This, even if the interest rate paid was not especially excessive.
If you know some
Jewish history, you know that Jews often fell into the role of the moneylenders
for the Christian world. And you
probably know that the Christian world held us in contempt for this. Perhaps, their willingness to use Jews for
this service, reflects that they already held us in contempt.
Early church cannon
law forbade Christians from lending money at interest. And the prohibition was partly based on one
verse from this morning’s Torah reading.
In chapter 22, verse 24 we read: When
you lend money to my people, to the poor man among you, do not press him for
repayment. [Also] do not take interest
from him. So why do we, the People of the Book, the people to whom
the Torah was directly given, find it okay to lend money at interest while our
Christian neighbours could not?
The
key is in understanding the different ways of interpreting ‘my people.’ To the Jew reading the Torah, this means
other Jews. To the Christian, this means
other Christians.
Rabbi
Louis Jacobs of Blessed Memory was one of great Torah scholars of our
generation. According to him, in ancient
Israel there were foreigners in the land whose business was to lend money. They were something like predators, swooping down
on the needy, offering a quick loan with little fuss. And those in need of money would often borrow
from them as it was less embarrassing than to request a loan from family of
neighbours. Perhaps they only needed the
money for a limited term, a few days or so, until the expected payment of
something owed them or which they planned to sell. But as we know, those who borrow money even
with the best intentions can easily of have turn of luck that makes timely
repayment impossible.
The
prohibition on charging interest to one’s fellow Jew, represents a preference
that Jews would overcome their embarrassment at borrowing from someone they
knew. The advantage in terms was
intended to nudge them to ask for temporary help from family and neighbours,
rather than borrow from the ‘carpetbaggers’ who roamed the land in search of
easy money.
Note
also that the verse assumes the money borrower would be poor. The point is that the borrowing of money in
ancient Israel, at least where this verse is concerned, should be seen as a
poor man’s last resort to get past a difficult moment. For this reason also, in our verse the lender
is enjoined against ‘pressing…for repayment.’
When one lends money to the poor among the people Israel, one is not
permitted to make vigorous demands for repayment when the borrower has
experienced further misfortune.
The
prohibition on interest, and on pressing for repayment, gave rise to Hebrew
Free Loan Societies in various communities.
They exist primarily in North America, but there is at least one such Australian
organisation, in Melbourne. Jews give
money to the free loan societies, so that they can in turn help other Jews with
basic needs, without causing any embarrassment.
But
the prohibition on lending at interest should not be seen as a license for Jews
to demand interest-free loans from other Jews for any purpose. Unfortunately, a lot of
people today have an entitlement mentality, and Jews are not exempt from this
tendency. If you want to borrow money,
even from a fellow Jew, in order to invest for profit, or for discretionary
spending, you should be willing to pay interest for the privilege. And it is perfectly permissible under Halachah to charge interest under such
circumstances.
There’s
another dimension to all this. The
availability of credit ultimately paved the way for the development of the
modern industrial, mercantile economy. To
the extent that the Jews were willing to be the medieval world’s bankers, we
pulled the world out of the primitive agrarian economy and enabled the
development of manufacturing and international trade. As Christians no longer feel constrained to
lend money at interest, we Jews no longer dominate the enterprise. But we Jews were pioneers in the business,
and that’s partly why the stereotype of the Jews dominating banking, persists
to this day.
We
will probably never extinguish the unsavoury image of those who lend money for a
living. But understand that not all
moneylending is worthy of contempt. We may
think poorly of the loan companies that prey on the poor, with so-called payday
loans at sky-high interest. We may practice
personal thrift, avoiding the use of credit for discretionary purchases, to
preserve our personal financial well-being. But the overall practice of lending money is
an important service that has enabled the creation of our modern, diversified
economy. And even in our worst personal financial
moments, I doubt that most of us would want to return to the pre-industrial
age. Shabbat shalom.
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