It is my opinion that the UK is in the throes of a social disaster brought about by personal debt.
It is also my opinion that the Bible's prohibition of lending money at interest arises not out of obscurantism, nor out of a failure to understand economics, nor indeed out of a mere desire to protect people from 'excessive' (as distinct from 'moderate') interest payments, but out of a need to protect the poor and to prevent increasing poverty.
Just as the Old Testament allowed for divorce and the keeping of slaves, so it also allowed the Jews to lend to Gentile nations. Nevertheless, the prohibition of usury, meaning the charging of any interest on a loan, was established as the way to treat one's brother or neighbour. It is thus the Old Testament equivalent of the command to 'turn the other cheek' - not always easy to do, but representing the most desirable 'economic value'.
Up until the Middle Ages, the church also held that usury was a sin because it was immoral. Even after this view was overturned, personal debt was regarded as a last resort, to be avoided at all costs. Only in the latter part of the twentieth century did it become a widespread practice for people to buy and borrow 'on credit'.
In the 1950s, 'hire purchase' began to become common - buying goods on the 'never never', a system of which it was said, "Buy something on the never-never and you end up paying twice as much." Later came the personal credit card which, as one campaign put it, "Takes the waiting out of wanting."
Today, most British people are in substantial debt. The average adul t in the UK owes £28,024 (source, Credit Action). In 2006, the median (commonest) UK annual income was £23,244 gross (source, National Statistics online). On average, each of us owes more than we earn in a year.
Paying off a year's salary, after tax and outgoings, would be hard enough. But on top of that debt is the interest - the 'never never' element. At the current 5.5%, the interest alone on that debt is £1,278. But many lenders charge a much higher rate, for example on credit and store cards. The result is that a substantial amount of what people pay goes merely to service the debt, not to pay off the loan, with the result that yet more interest accrues to the lender.
If Third World debt is such a serious problem to entire countries, one is left wondering why Old and New World debt is not a similar problem for individuals. And if Third World debt has unfairly channelled money to lending countries, could it not be that individual debt in the Old and New Worlds is equally unfairly channelling money away from those doing the work to those doing the lending, at no great effort on their part?
Jesus said to the third man in the 'Parable of the Talents', "So you knew that I harvest where I have not sown and gather where I have not scattered seed? Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest."
If that is what he thought of those who lend on credit, what should be our own view? Future posts on this blog will highlight news items concerned with the debt disaster. Comments are welcome.
Revd John P Richardson
30 May 2007