Today I found this interesting primer on the Christian theological history of usury via DocJax. Looks like it's an introduction to a church conference on the topic of debt, but I haven't yet found more about the conference itself.
This topic is still churning in my mind. What gives it special meaning to me is my education--I mean, I actually took a class in college called "The Theory of Interest." I've seen how intricate interest is to all aspects of our economy and society; how we take for granted its value, both monetary and ethical. At this point, removing interest from our economy would be like removing prepositions from the English language; things wouldn't make sense until we completely reorganized. The little 5-page discussion above struck me because apparently today's attitudes about lending only developed a few hundred years ago. Obviously, I want to learn more than what this un-sourced 5-pager offers.
One of my recent book purchases might help me in that regard: Thomas Aquinas: Select Writings. My current topic of interest aside, I've been wanting to read more Aquinas since college, when I'd read selections from Summa theologiae.
The other book I bought last week and finished this weekend was The Soul Thief by Charles Baxter. I knew of Baxter from college writing classes, saw a new book of his on a display table at Barnes & Noble, and took a chance. I'm glad I did, too. The story itself was good, but the real value of this book to me was the overall composition, which is fairly sophisticated. Baxter clearly took a lot of skill and care into crafting the novel, and for an aspiring writer it'll be a valuable addition to the toolbox.
One last note on the topic of writing. I've been quiet on this blog, and, it turns out, I've been quiet off of it as well. But! The other night I started another story (I feel obliged to say "another" since I have a few well-unfinished diddies hanging out there) (no idea why I used "diddies" to describe stories); for now, it's a creepy story about a home library from the perspective of a young boy. I'm already thinking less about the plot and more about how interesting it is to write from a child's perspective and may try to combine this young fella with one from another piece I was working on.
Tuesday, March 10, 2009
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Another historical influence on the idea of interest was the discovery of the Americas. Everything was gold-backed then which for hundreds of years was stable, but then the Spanish discovered huge amounts of gold in the Americas, they started bringing it back to Europe, thereby devaluing all of the European currencies. All of a sudden, loaning without interest was a losing proposition, which changed some people's views on interest.
ReplyDeleteInteresting. To me, interest exists because of the belief in the time-value of money: if I give you $10 for 1 year, you have to compensate me for what I could have been doing with that $10 during that 1 year. In one instant, $10 is worth $10, but over 1 year, $10 is worth $10.50.
ReplyDeleteBut you're saying that interest exists because money no longer represents any kind of physical value (like gold)? Or was it more because the rapid discovery of new gold caused money to devalue too quickly and interest simply leveraged that?
I don't know all the reasons that interest exists, but I know that the understanding of inflation, caused by the discovery of the Americas, changed Protestant views on interest. Martin Luther (and I think the other Protestant reformers) believed that charging interest in any way was a sin. This was based on the belief that your $10 would still be worth $10 in a year because the amount of gold was stable and money was gold backed. Once people started understanding inflation, the Protestant churches changed their position. They acknowledged, as you put it, that interest leveraged the devaluation of money. I think that they still initially believed that loaning money for gain was wrong, but this position has obviously been toned down as time has passed.
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