Biblical Anabaptist wrote: ↑Tue Jun 13, 2023 9:23 am
Ken wrote: ↑Mon Jun 12, 2023 4:50 pm
My own non-Biblical moral code is that it is unethical or immoral to take advantage of the hardship or misery of others to make money and that is probably what the Bible was talking about. But
there is nothing wrong with charging interest at the rate of inflation to account for the deflating value of real goods and coins over time. Nor is there nothing wrong with banks charging interest for ordinary consumer spending like new cars and McMansions in the suburbs or business ventures that are intended to make money. That is just modern finance which has created a free market in money no different from the free market in grains or fruits or meats or textiles that would have existed in any market square or bazar in any Biblical town where people freely traded goods and bargained and haggled for prices.
So if you would have loaned money to someone to buy a house in 2003, would you have written down the principal by 30% when real estate values plunged?
No, and neither would I demand a 50% additional interest if the value of the property goes up 50%.
Because I actually think the deeper message of the Biblical teaching against usury is really a commandment about exploiting the poor rather than engaging in a free market for the commodity of money.
Modern finance is really just a market in money no different from a Biblical bazar or marketplace where people freely traded goods like dates, wine, spices, textiles, metal goods, etc. I would imagine that if you were able to go back in time to any marketplace in Biblical times you would see people endlessly haggling over the price of everything and then eventually coming to agreement as to the price that day for peaches or salted fish or saffron or salt or a bolt of silk or linen.
A mortgage is really no different. The bank has a cost of money based a variety of factors such as the Federal Reserve discount rate, the 10-year Treasury Bill rates, the current and anticipated rates of inflation, the strength of the mortgage market, and so forth. So the bank gets the money to loan you at a certain "wholesale" rate and then turns around and loans it to you at a certain "retail" rate which is the interest rate on your mortgage. Part of that interest rate is based on inflation, part is based on the bank's cost of doing business, their rent, employee costs, administrative costs, etc. and part is profit. But most banks also deal in "conforming" mortgages meaning that the match current national interest rates so the mortgages can be resold on the secondary market and so are further constrained in the interest rate and fees that they can charge.
What a bank is doing when they set an interest rate for a home buyer is really no different at all from what a grocer does when they buy eggs from the farmer at a wholesale price and resells them in the grocery store at a higher retail price. The bank is obtaining (buying) the money at a wholesale rate and selling it to the customer at the current retail rate as reflected by the current day's 30-year mortgage rate.
What I think the Bible is really talking about is exploiting the poor. So, for example, payday lenders and loan sharks who charge usurious rates and fees to poor people who are desperate to put food on the table for their families and are not wealthy enough to have ordinary credit cards or a bank balance like most ordinary middle class folks. Those people are taking advantage of the misery and misfortune of others.
I would feel the same way about say a farmer who is exploiting undocumented immigrant labor and/or their children to make a profit off of their desperation by paying below market wages. That is the same exact behavior as a money lender exploiting the desperation of the poor and equally sinful. I do not feel the same way about someone who takes out a 30 year mortgage to buy a beach house and who has the ability to pay the going market rate to borrow the money to do so.
