‘Neither a borrower nor a lender be’?

Luke Bretherton wrote this article for ‘God and the Moneylenders’, published by the Centre for Theology and Community in 2013 at the height of the Archbishop of Canterbury’s so-called ‘war on Wonga’. [***] As we emerge from the pandemic it still feels very relevant today, and many of the questions surrounding ethical finance remain unresolved.

We are grateful to Luke – and to CTC – for permission to reprint the article here in full for the Living Theology Forum. Longer and more detailed than most LTF articles, it addresses the Scriptural teaching on the subject of money and lending, explores how this inheritance has been applied by the Church through the centuries, and unpacks its relevance for our context today. In doing so, it offers us a contemporary application of the Biblical injunctions against usury, and an account of what positive and faithful lending must involve.

Scripture, usury and the call for responsible lending

The Bible has a great deal to say about the power of money. In particular, it is quite specific about how we should treat debt and lending. A primary narrative template for understanding salvation is given in the book of Exodus, in which the central dramatic act of the story is liberation from debt slavery in Egypt. The Canonical structure of Genesis and Exodus in the ordering of Scripture makes this point. The book of Genesis closes with the story of Joseph. At the end of this story, although saved from famine, the Israelites, along with everyone else in Egypt, are reduced to debt slavery. [1] This is a ‘voluntary’ process entered into in order to receive the grain from Pharaoh’s stores that the people had given to Pharaoh for safe keeping in the first place. [2] After several rounds of expropriation the people finally come before Joseph and say: ‘There is nothing left in the sight of my lord but our bodies and our lands…Buy us and our land in exchange for food. We with our land will become slaves to Pharaoh.’ (Gen 47.18-19) The first chapter of Exodus opens with a new Pharaoh who takes advantage of the Israelites debt slavery to exploit them. So the Israelites were not prisoners of war or chattel slaves, they were debt slaves undertaking corvée labour on behalf of the ruling elite. [3] It is this condition that the Israelites are redeemed from. As David Baker notes, the verb ‘go’ in ancient Hebrew is used for both the Exodus and for the seventh-year release of debt slaves.[4] The linkage between liberation from Egypt and debt slavery is made explicit in Leviticus 25.35-46. In this text the prohibitions against usury and limits placed on debt slavery through the institution of jubilee are grounded in the relationship established between God and the people through the act of liberation from Egypt.

In the Gospels, Exodus is one of the key framing narratives that shape the presentation of Jesus’ life, death and resurrection. And the notion of redemption or Jesus paying with his life in order to liberate humans from our debt of sin is a leitmotif in the New Testament (Mark 10.45; Romans 6.21-23; Colossians 3.5-6). Indeed, the declaration of Jubilee – that is, the release from debt slavery – forms the basis of how Luke frames Jesus’ announcement of his purpose and mission:

The Spirit of the Lord is upon me, because he has anointed me to bring good news to the poor. He has sent me to proclaim release to the captives and recovery of sight to the blind, to let the oppressed go free, to proclaim the year of the Lord’s favour. (Luke 4.18-19) [5]

And what Luke then depicts in Act 2 as a direct fruit of the outpouring of the Holy Spirit is the enactment of the Jubilee community where no one has debts because “All who believed were together and had all things in common; they would sell their possessions and goods and distribute the proceeds to all, as any had need”. (Acts 2.44-45)

So at heart of the story of salvation we find the power of money and liberation from debt is a central concern. The admonition that we cannot serve both God and Mammon (Matt 6.19-24) it is not a trivial matter: the central drama of salvation history is an act of liberation from debt slavery. [6] To put the pursuit of money before the welfare of people, and use money to re-enslave and exploit people, especially the poor and vulnerable, is to turn your back on God’s salvation and deny in practice the revelation given in Scripture of who God is. Whereas to use money to serve the common good, and in particular to relieve the poor, is a mark of salvation.

Here the parables of Dives and Lazarus (Luke 16.19-31) and of the Rich Fool (Luke 12.16-20) are instructive. In these parables the wealthy who hoard their riches, using them for their own aggrandisement and benefit instead of giving and lending to others in need, are condemned as not only foolish but damned.[7]

This brings us to the specific biblical teaching on when and how we should lend each other money. Indicative of the direct teaching on lending money is the following from Exodus 22.25: If you lend money to my people, to the poor among you, you shall not deal with them as a creditor; you shall not exact interest from them.

Not lending at interest is directly equated with righteousness, as is set out in Psalm 15: O Lord, who may abide in your tent? Who may dwell on your holy hill? Those who walk blamelessly, and do what is right, and speak the truth from their heart; …who stand by their oath even to their hurt; who do not lend money at interest, and do not take a bribe against the innocent.

Whether these stand as condemnations of interest per se, or more specifically excessive or extortionate interest is a matter of dispute. The Hebrew word used in Exodus and Psalm 15 is neìek, which is probably derived from the proto-semitic root of ntk or nsk meaning ‘bite.’ [8]

In the Old Testament at least usury can be used as a synonym for charging any kind of interest and is condemned as immoral in relation to those subject to covenantal obligations. In the law given to the Israelites, central to the faithful witness of the People of God is that they do not make each other debt slaves and exploit each other in pursuit of money. Neither land (the basis of the covenant) nor the people (who were saved to serve God) are to be exploited for personal profit. Rather they are to be good neighbours to each other and good stewards of the land.

The proper ordering of lending and borrowing directly effects the right ordering of communal relations. This is because the proper relationship between the land and the people is at stake. The land and fellow Israelites were non-fungible goods given by God as gifts for the flourishing of all. Possession of land did not entitle the holder to exclusive use. Human ownership and use of created goods was limited because God is the ultimate owner: humans are simply stewards of what they have received from God. [9] To convert land or people into fungible goods of no greater value than anything else is not only to instrumentalise them for one’s own benefit, and so place one’s one welfare above the good of all, but to usurp God’s title.

In modern parlance we call such a process ‘commodification’: the treating of that which is not for sale as a commodity to be bought and sold. The extensive manumission laws of Exodus, Deuteronomy and Leviticus relate to debt slavery and are measures to keep in check such a process of commodification of land and people. [10] For example, in Leviticus, the Israelite who cannot pay back his loan cannot be made a debt-slave but remains free, and instead becomes a hireling of the creditor until he can amortize his debt. [11] Treatment of the poor is a touchstone that marks whether relations of faithful, mutual responsibility that encompass the whole people are adhered to or not. The turning of people and land into property capable of being traded within a monetary economy is a direct threat to the proper ordering of economic, social and political relations and the concrete ability of all the people to participate in the covenantal order as those of equal value.

The key issue at stake here is not usury per se (as will be seen, there is no absolute prohibition on usury in Scripture) but the nature of the relationship between the lender and the borrower as fellow members of the people of God. Both land and people belonged to God and were not to be expropriated for personal gain or monetized as commodities to be bought and sold.

The Jubilee legislation served as a limit that disrupts any justification to permanently expropriate land through debt. [12] The land was to be used to provide the means of life, not converted through exploitation or monopolisation into a means for either the death or the enslavement of one’s neighbour. As Albino Barrera puts it: YHWH as landowner affords sanctuary and provides sustenance to all sojourners who have been welcomed to reside in God’s domain. Naturally by extension, guest and tenants who have been received to dwell on the land are expected to mutually respect each other and treat one another justly, if only because they are each equally under the landowner’s charge as his guests and tenants. [13]

Legislation concerning the lending of money frames it as a good thing to do as a response to someone in need. [14] But on no account should another’s misfortune be turned into an opportunity for personal gain. In Nehemiah we are given a picture where the rich and powerful Israelites have become like Pharaoh and are exploiting a famine to make others debt slaves (Neh 5.3-5). Nehemiah calls the ‘nobles and officials’ to repentance and in particular to stop charging interest on what they are lending and make restitution (Neh 5.10). The text is a depiction of what judgment, repentance and a return to faithfulness involves.

In the New Testament, the story of Jesus’ encounter with Zacchaeus, a tax collector and probable moneylender, directly echoes Nehemiah. The sign of Zacchaeus’ repentance and that he really changed his ways is that he pays back ‘four times’ the money he extorted (Luke 19).

As can be seen, central to the faithful witness of the People of God in both Old and New Testaments is that they do not actively make each other debt slaves and exploit each other in pursuit of money. [15] However, there is no absolute condemnation of usury in Scripture. While neither the misfortune of the poor and landless is to be exploited for personal gain, nor the lending of money or goods to one’s kin to be treated as an occasion for profit, usury is licit when it comes to ‘foreigners’ (Deut 15:3, 23:20; Lev 25:39-54).

The distinction between the prohibition of usury in relation to those subject to the laws of Israel and its licitness when it comes to foreigners has long troubled Christian interpreters. A common way of reconciling the seeming contradiction is through some kind of contextualisation that thereby relativises the distinction. The suggestion is that because Israel was a peasant economy most loans were distress or consumption loans rather than loans for investment. By contrast, loans to foreigners were commercial loans relating to trade.

However, this solely economic explanation is too reductive. Calvin, who is often associated with the economic contextualisation of the usury prohibitions in Scripture, is in fact closer to the mark when he states: Looking at the political law, no wonder God permitted his people to exact fenory [excessive charging of interest] from foreigners: because otherwise mutual reciprocity would not have obtained, without which one side must needs be injured. God commands his people not to practise fenory, and therefore by this law lays the obligation on the Jews alone, not on foreign peoples. Therefore, in order that analogous conditions may prevail, he concedes the same liberty to his people that the Gentiles were arrogating to themselves, because precisely this moderation is tolerable, where the position of both parties is the same and equal. [16]

Calvin brings to the fore the issue of power and how the equal and fraternal relations of mutuality that were possible in relations between the Israelites could not be expected between the Israelites and foreigners due to the asymmetry of power.

The Deuteronomic double standard on usury suggests that unlike in relation to murder or lying there is no absolute moral prohibition against charging interest. Although, as Calvin perceived: Usury has almost always these two inseparable accompaniments, viz. tyrannical cruelty and the art of deception. Elsewhere, the Holy Spirit, in praising the saintly, God-fearing man who has abstained from usury, likewise shows that it is very unusual to see a worthy man who is at the same time a usurer.

One analogy for usury that helps us understand the ambiguity of Scripture in relation to usury is to compare it to a drug. Like a drug such as heroin, usury is both a poison and a remedy simultaneously. [17] Its ambiguity and double-edged nature, rendered explicit in the Deuteronomic double standard, is what makes the treatment of usury such a contested and confusing field of endeavour. To offer credit at interest is to serve an essential need in the monetary economy. As the history of capitalism suggests, profiting from interest-based credit and the levels of exchange it facilitates is a potent driver in the creation of monetary wealth, technical innovation and the provision of welfare. The effect of usury is to draw people into relationship with each other who ordinarily might have nothing in common or who are deeply suspicious of each other and have no shared life.

At a concrete level, one fruit of modern economic globalisation is just such an increase in trade between enemies. However, as well as enabling exchange, credit also gives enormous power to the creditor - in some cases a power to rival that of a king or an emperor - and its effects can be hugely destructive on social and political relations. The immiserating impact of debt repayments, whether on a personal level or among developing countries, are instances of this destruction. Myriad personal testimonies recount how the burden of debt leads to family breakdown, depression and in some cases suicide. Such is the destructive power of usury that Ambrose sees it as a form of warfare that was nevertheless lawful in relation to an enemy. As he puts it: “wherever there is the right of war, there is also the right of usury”. [18]

Responses to Scripture

So Scripture has much to say about responsible lending and sees how we treat each other through lending and borrowing as a key mark of faithful witness. This may seem surprising to us, but the prohibition against usury was consistently upheld by the Church as a vital sign of faithful witness right up to the modern period. Such was its importance that the prohibition of usury and the proper treatment of the poor in money matters was a central concern of the church councils.

Incorporated into deciding matters of belief and practice were condemnations of usury. For example, the Council of Nicea (AD 325), from which we derive the Nicene Creed, has a direct condemnation of usury (canon 17) by clergy. [19] This was then extended to lay people at the Council of Clichy (AD 626). And the prohibition of usury was part of Canon law from around 1140 onwards.

a) Patristic

For the earliest theologians charging interest on a loan to someone in need was incompatible with Christian love. For example, Augustine held that we meet Christ in the poor man and should respond as Christ responds to our poverty with generosity and love and not as an opportunity for profit. For Ambrose, loaning a poor person money in their hour of need and then charging interest on the loan is like offering medicine that turns out to be poison. As Ambrose puts it, the poor man ‘begs for liberty, and you impose slavery.’

For all the Patristic writers, money, like all property, was given not for private enrichment but to be used in such a way as to benefit the common good, of which alleviating poverty was a central part. Even where limited interest was allowed by civil law, John Chrysostom encouraged those who heard his sermons to go beyond the law and act according to the order of love established by Christ. [20]

b) Scholastic

The medieval Scholastic theologians continued and developed the Patristic reflections on lending money. Aquinas and others were not against profit per se (as is sometimes asserted) but ‘filthy lucre’: that is, unlawful and unjust profit.

Specifically in relation to the lending of money, there were wide-ranging and quite complex discussions about different kinds of loan and when interest could or could not be charged. Much of this was in response to the development of banking and trade from the twelfth century onwards. There emerged up to the Reformation a growing consensus that distinguished legitimate interest and usury. Legitimate interest related broadly speaking to questions of i) indemnity (where a payment was delayed, a charge was incurred as a form of compensation, analogous to a modern credit card arrangement); ii) risk (where there was a danger of losing one’s capital a charge could be made as a form of insurance against loss); iii) what was called lucrum cessans (interest could be charged where greater profit could have been earned with the money using it for something else, so the interest was a form of recompense); and iv) remuneration (a charge could be made for the work in managing a loan). [21]

Usury became the illegitimate and/or excessive charging of interest on a loan. Another specific terms for this was ‘fenory’ (from the Latin foenus) or in English ‘ocker’ (from the German wocker). Trading agreements and loan contracts where both parties were expected to gain were one thing; lending at usury, where only the usurer could profit, was quite another. Even where a charge was deemed licit, the ideal for many Scholastic theologians was that such a charge be measured or moderate. For example, the Fourth Lateran Council (1215) condemned those who were ‘heavy and excessive’ in what they charged. As one Elizabethan memorandum from the Public Records Office puts it: “Usury and trewe interest be thinges as contrary as falsehood is to truth.” [22] Although, as with distinguishing truth from lies, it was not always clear-cut in practice! For many of the Scholastics charging interest on a loan was unnatural or against natural law because it went against the true end or use of money, which was as a medium of exchange. Unlike a cow or a fruit tree, left on its own money could not grow or bear fruit; rather it was sterile. As the parable of the talents makes clear, if one puts a bag of gold in the ground it will not grow but will stay the same. Likewise, give a bag of gold to someone and, unlike a house, an ipod or a pig, which is affected or changed by time and use, they can give exactly the same thing back. Thus to seek interest was to make money an end in itself rather than a means to an end and this was to make money act against its own nature (this was an argument originally put forward by Aristotle). Beyond acting unnaturally, the excessive or illegitimate charging of interest was a mortal sin that led directly to hell. For example, Dante puts the usurer below the blasphemer and sodomite in the third ring of the seventh circle of hell (Inferno canto 17). Anselm saw usury as stealing from God because if money was sterile then what was really being sold was not money but time and this did not belong to humans but to God and could not be turned into a commodity because God had given time freely to everyone. So serious a sin was usury that the known usurer, like the heretic, could not be buried in sacred ground and the priest who did so was to be de-frocked. As with Zacchaeus, the only way to demonstrate real repentance was to make restitution of ill-gotten gains.

Anselm is particularly interesting because he developed one of the most important theologies of salvation: that of the substitutionary atonement in his work Curs Deus Homo. The forgiveness of debts without a charge is the central image of his theology of salvation. Contrary to many readings of his theology, salvation was not a kind of accounting process where Christ’s life was counted as an equivalent exchange for human sin. Instead of Christ’s death marking a demand of divine retribution or satisfaction it represents a divine act of grace that refused to hold our debt of sin against us. [23]

So again, release from debts and not demanding like for like continued to be a profound analogy for the gift of salvation.

c) Reformers

Eric Kerridge argues: ‘The Reformation made no real or substantial change to fundamental Christian teaching about usury, not to any of the Christian attitudes to it, remedies for it, or laws against it.’ [24] However, there is a somewhat heated discussion between scholars on whether such an argument is right. The key point of contention is whether there is an intrinsic relationship between Protestantism and Capitalism – a debate that need not concern us here.

What can be said is that Luther, Zwingli, Calvin and the other Reformers all condemned biting usury or fenory. What the Reformers, and Calvin in particular, were responding to was the need to distinguish between commercial agreements freely entered into between equals (where there is in effect a symmetry of power) and loans made to the poor in times of emergency or great need (where there is an asymmetry of power). In the latter case, consent may have been given, but it could hardly be said to be given freely.

Here the Reformers were directly echoing Scholastic concerns which themselves drew on Aristotle. The key analogy in these discussions was that of a ship’s captain who has to throw his cargo overboard in a storm in order to save his life and his ship. While an act of free will, it could hardly be said to be voluntary in any straightforward sense. At best such action was forced by need and involved a ‘mixed will.’ Likewise, the one who agrees to pay interest by dint of necessity or at a time of distress acts under duress. [25]In such cases, lending at interest was an act of coercion and unjust. [26]

Distinguishing between commercial loans and usury was vital in contexts such as Geneva, Zurich and then Amsterdam and London where banking was crucial to the economic survival of Protestantism itself. The Reformers were not always that successful in making this distinction. However, they were clear that, as Calvin puts it: “Usuries [i.e. the charging of interest in general and not fenory or biting usury] are not nowadays unlawful, unless and in so far as repugnant to equity and brotherly association.” [27]

While Calvin does struggle to harmonise the different Scriptural texts when commenting upon them, the following comments can be taken as indicative of his advice in practice: I would never advise any man to put his money out to interest, if he can employ it any ways else. Yet when a man’s whole estate doth lie in ready money, he may well contract with such and such persons, that upon such and such terms it may be lawful for him to receive benefit and profit thereby. But he must be very careful, that you do not let loose the reins to demand, and take excessive gains, as is the custom and practice of too, too many, nor should he grieve all grinds the face of that poor man with whom he has contracted, nor endammage the publick interest by his own private benefit. Wherefore upon the whole, I dare not approve of any interest, till I do first know how, and upon what terms, articles and conditions, and with what persons you do transact herein. [28]

Such was his concern that he supported the introduction of a cap on interest rates in Geneva as did Bullinger in Zurich and for Luther anything beyond 20% was ‘overmuch.’ [29]

Applying the Christian Tradition Today

This paper began with a quotation from Shakespeare’s Hamlet and asked the question whether we should ‘neither a borrower nor a lender be’? The rest of the quote, often cited out of context, advocates absolute independence and not risking the vulnerability and tensions involved in borrowing: “This above all: to thine own self be true.”

This is not the Christian way. To be a lender and borrower are good things. To be a lender and a borrower is to be situated within economic relations of inter-dependence, cooperation and mutual responsibility that reflect the God-given pattern of life set out in Scripture. To lend and borrow is to be drawn into real relationships that demand we have to negotiate a common life in which my flourishing is dependent on the flourishing of others. They are real relationships because, in a sinful world, they make explicit issues of power, risk and conflicts of interest that have to be addressed if we are to be real neighbours rather than a crowd of competitive individuals with no real connection or common life.

Of course, and herein lies the irony we discovered in the recent economic crisis, the idea that we can be a crowd of competitive individuals is a utopian fantasy that does not connect with the reality of financial transactions where relations of interdependence and mutual responsibility are inherent in the action of borrowing and lending. If one part of the body suffers, or if only the interests of the few are attended to, eventually all suffer as the system collapses.

Maintaining economic relations so they reflect the reality of inter-dependence and mutual responsibility requires limits to ensure that the vulnerabilities involved in being a lender or a borrower do not become occasions for exploitation, oppression and abuse. But it seems many of our politicians and business leaders are still keen on putting their faith in a fantasy rather than reality.

The proposals for a cap on the cost of credit are an attempt to deal with the world as it is rather than a utopian one. While clear in their condemnation of usury and consistent with Scripture the Patristic, Scholastic and Reformation writers were not naïve. Aquinas speaks for most in the Christian tradition when he says: Human laws allow some sins to go unpunished on account of the condition of imperfect men, wherefore much that is useful would be prevented should all sins be punished particularly by specific penalties. Therefore human law tolerates some usuries, not because considering them to be in accordance with justice, but lest many people’s useful activities be interfered with. [30]

The questions confronting the church, past and present, is how to prevent unjust and extortionate interest rates, encourage responsible lending, and as Christians, point to a deeper reality and truer foundation for human life, one based on loving kindness and generosity not maximisation of profit and the private pursuit of selfish interests. It is to these questions that the proposals of Archbishop Justin Welby and his critique of Wonga address themselves. Whether one agrees with them or not the questions they are addressing are ones central to the very fabric of what Christians confess and how we are called on in Scripture to live out that confession.