Chapter 25 - What is Usury?

The Modern Definition of Usury

The modern definition of usury runs along these lines:

Usury is the charging of excessive interest or illegal interest rates for the use of money.
The Old Definition of Usury

The old definition of usury runs along these lines:

Usury is the charging of interest for the use of money.

or

Usury is the charging of a fee for the use of money.

Thus, any loan carrying interest was considered sinful both to the lender and the borrower.

A Muslim Description of Usury (Riba)
Riba can be roughly translated as "Usury", or unjust, exploitive gains made in trade or business.

There were concessions for business. Mohamed was a trader and knew of the monetary needs of trade.

Many Muslims, living in areas where usury is strongly established. Muslims need to buy houses in these areas but the house prices have been inflated by usurious lending practices.

An Ancient Definition of Usury

The original term 'Neshek' comes from the verb 'Nashak' which means to bite as in serpent bite. What is indicated here is that the action of usury is like a snake bite. This suggests that it is not like a bite of a lion which would cause you immediate pain, but is like a snake bite where there is initially almost no notice of the bite but slowly an agonizing end awaits the bitten.

Or with different wording is has been described as: "Usury does not all at once destroy a man or nation with, as it were, a bloody gulp. Rather, it slowly, sometimes nearly imperceptibly, subverts the victim's constitution until he cannot prevent the fatal consequences even though he knows what is coming." [Mooney, P23]

Thus, I conclude that the original definition should read more like:

Usury is the demanding of a greater amount in return than has been lent causing an Impossible Contract and a most unpleasant outcome for the debtor.

The definition of usury has been softened over the years to tolerate usury. Usury was widely banned in the texts of all the major religions. Throughout history loopholes and ways around the bans on usury have been found. These ways around the directives in the religious texts were encouraged by those who sought to profit from usury. So it is quite likely that even the very old definition had been softened. When reading the old texts there appears to be clear indications of the effect of usury on those with little money. This effect appears to be greater than merely the requirement to pay a little extra in interest. The writers of the old texts seem to be quite aware of the crushing effects of usury.

Correct Definition of Usury

I, therefore, say that the correct definition of usury should be:

Usury is the practice of lending money and expecting a greater amount in return such that unpayable debts occur.

or

Usury is the practice of making a loan and demanding a greater amount in return such that unpayable debts occur. The practice creates an Impossible Contract and an unpleasant outcome for the debtor usually involving asset stripping.

or worded as:

My Law of Usury

Usury is the practice of making a loan and demanding a greater amount in return than was lent such that unpayable debts are created and repayment is impossible.

Only when there are alternative movements of money between the lender and borrower will the loan not become unpayable. If a private lender or a group of lenders creates their own form of money tokens and has a monopoly on their issue, unpayable debt is almost certain to occur. This will happen irrespective of where the tokens relate their value. The practice of usury will usually be accompanied by asset seizure, sometimes called foreclosure, and a general movement of assets towards the creditors. The lenders will become the creditor class who will become the masters and controllers and rulers of all assets including land, property, machinery, factories, utilities, media, public opinion, government and all aspects of human life.

The most common situation for alternative movements of money occurs with the public bank. A public bank operated by the government on behalf of the people. The public bank handles all income and expenditure of the government including taxation receipts. The public bank will be spending money into society on general expenses and infrastructure and taxing money back out of circulation to avoid an oversupply of money. The public bank effectively creates money on an as needs basis itself, or in cooperation with the Treasury, and spends and lends it into society. Taxation then becomes a mechanism to remove money tokens from the society to prevent oversupply.

If a private organisation, separate from the government creates its own money tokens and lends it to individuals in society or to the government, taxation becomes a money harvesting operation for the benefit of the private moneylenders and a never-ending increase in debt to the private organisation will occur."

This makes the analysis of usury much more interesting and indeed more realistic.

In Latin the word usuria means:
Usuria: demanding in return for a loan a greater amount than was borrowed.
Blackstone's Commentary on Usury about 1765

"When money is lent on a contract to receive not only the principal sum again, but also an increase by way of compensation for the use, the increase is called interest by those who think it lawful, and usury by those who do not." [250]


[250] Blackstone's Commentaries on the Laws of England, Page 1336 by Sir William Blackstone, originally published by the Clarendon Press at Oxford, 1765-1769.