alt Hacker NewsWhy do some ancient traditions ban usury?
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mcherm • yesterday at 10:33 AM
I suspect actually MOST ancient traditions ban usury (or ban lending altogether). Christianity banned usury, Islam banned essentially all lending, Hinduism banned some casts from lending and regulated the lending of others[1].
I think the practice was found to be corrosive to societies and thus at one point or another many of them tried to ban it. (Lending is also very helpful for commerce, so most societies also reintroduced it. Actual practice varied at different points in history.)
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There are regulations around it even today. It's not a complete free-for-all. https://www.paidnice.com/usury-laws-by-state
But to answer the question, there's quite an instinctual aversion to earning money through apparent idleness. Same reason that people hate landlords who just get "passive income" simply for owning. (Of course the owner had to buy it in the first place, or had to inherit it - and indeed inheriting too much stuff also rubs people the wrong way - except if they themselves are blocked from passing on their things to their kids).
Same reason that merchants were distrusted, since there was no concept of economics that would allow them to understand that in fact trading and arbitrage is actually valuable contribution for the market to properly price goods, and is a much better way to price things than gut feelings about "sentimental value" or the labor theory. But this was not well understood so making money through trade was seen as witchcraft. How come he can come to the village and buy our pig for X and then go sell it for X+Y in the city? I mean that's somewhat understandable, the transport etc. Income through interest doesn't even have that. Of course the real value proposition is again a kind of resource allocation cognitive processing. The lender's contribution is in the assessment of prospects of the profitability of a venture. That apparently this is not the case in many consumption credits is indeed some kind of system failure, and some perverse incentives set up by regulations, where somehow the financial companies are not punished by reality for misallocating. See 2008 etc.