One of the frequent readers of this blog, who writes his own blog from a conservative Muslim tradition, and who appears to share an interest in my favorite Muslim historian, Ibn Khaldun, responsible for first discussing concept of asabiya that I write about somewhat frequently, made a recent post where he talked about his hopes for the new Muslim Brotherhood-led government in Egypt . While I am not as sanguine about he is of the prospects of peace in Egypt, full transparency, or the ability of the Muslim mobs there to respect the persons or property or dignity of minority populations like Coptic Christians, one area of Muslim law that I have a great deal of interest in, despite not having a lot of knowledge about its workings, is the idea of an interest-free economy. I share this interest because of my own interest in biblical law, which has analogous principles.
One of the great evils of our time, and indeed throughout human history, has been the exploitation of the poor and needy through lending at interest for basic necessities of life. It is immensely difficult to be a wise steward of resources, which we should all aspire to be (and which most of us, myself included, could stand to be better at) when the choice is often financial difficulty or not knowing how to survive. Tucked away in a part of the Sabbath law that is often neglected in Leviticus 25 there is a law of the Bible that condemns the charging of interest to one’s brethren to one’s poorer brethren in the same general context of laws that demand the forgiveness of debts every seven years, the land Sabbath, as well as freedom from slavery and the restoration of land every 49 years at the Jubilee.
These laws are not put together simply haphazardly. In fact, there is a very good reason these laws are all placed together and a specific context for so doing as aspects of God’s Sabbath laws. As these laws are frequently neglected by those who profess to follow the Bible, it is worthwhile to provide some historical and cultural context to the existence of these laws together as part of the Sabbath law. From the dawn of human history, some of the first recorded documents of the Sumerian civilization were accounts of debt and taxes for the small peasant farmers from wealthier bankers and government employees. At least since the time of Hammurabi, if not before, there has been an occasional effort by wise leaders to reduce the debt burden on their population and the negative social effects it has.
After all, poverty is a cycle that leads people to exploit the land, take on debt to increase their holdings (or pay for necessary capital maintenance or improvements), plant cash crops without resting the land that deplete the soil and lead to decreased yields, more poverty and more debt, and eventually lead to the loss of the family plot and some kind of servitude, whether as tenant farmers for the wealthy or as landless migrants seeking a better life in the city. All of these problems are interrelated, and Leviticus 25 deals with all of them, attacking land hoarding by the wealthy, predatory lending practices (which in biblical terms is lending to the poor at any interest rate whatsoever), exploitation of the land by commanding rest for the land and its inhabitants. Developing an interest-free economy is an important part of a godly economic system that avoids exploiting the needy and leading to increased centralization of wealth, power, and land ownership.
Leviticus 25:35-38 reads as follows: “If one of your brethren becomes poor, and falls into poverty among you, then you shall help him, like a stranger or a sojourner, that he may live with you. Take no usury or interest from him; but fear your God, that your brother may live with you. You shall not lend him your money for usury, nor lend him your food at a profit. I am the Lord your God, who brought you out of the land of Egypt, to give you the land of Canaan and to be your God.”
Some commentators of the Bible, like Gary North, argue that this did not demand a completely interest-free economy, and that the investments and borrowing of the wealthy would be exempt from this law prohibiting interest. We also know that the Bible itself nowhere condemns people receiving interest for investments (see, for example, Matthew 25:26-27: “But his lord answered and said to him, ‘You wicked and lazy servant, you knew that I reap where I have not sown, and gather where I have not scattered seed. So you ought to have deposited my money with the bankers, and at my coming I would have received back my own with interest.’). Nonetheless, as anyone who has been following the sovereign debt crisis of the last few years knows all too well, larger borrowers have few problems getting bailouts and aid packages from other nations, other banks, and international groups, because their bankruptcy threatens the well being of many, and they have leverage over their creditors to demand better terms in times of economic trouble. The poor farmer or town dweller seeking to keep a roof over his head and a little bit of dignity has no such leverage, and so God forbids the lending to the poor at interest.
A few years ago, if I had written about this particular passage, I would have expected the question, “Why is interest such a bad thing anyway? After all, a bit of greed and profit motive and interest motivate people to work harder anyway.” As we have examined, the profit motive engendered by debt and the need to pay it back lead to all kinds of evils, including workaholicism, companies and individual cutting moral, ethical, and legal corners to ensure better short term profits, environmental destruction, and other evils. The fact that the whole complex of these evils is condemned in Leviticus 25 ought to lead us to think that maybe God really does know what He is talking about when he condemns the rape of the land or the exploitation of its inhabitants through debt, interest, land seizures, and forced servitude.
Anyone with any degree of awareness can see that the insoluble nature of the debt crisis is all about interest. In order to pay off debts, one needs steady and consistent income, and growth. Where growth is limited to nonexistent, a person or a society cannot “grow” its way out of debt. But given that there are limited resources and unlimited longings and desires, to expect unlimited growth is unreasonable. Therefore, it is illegitimate to seek to spur others to unsustainable efforts through the use of interest, especially when it is owed at such an inflexible rate of payment. Future gains are unstable and unreliable, and to mortgage the future to pay for the present, however common it may be in our lives, is an immensely dangerous act, and sadly all too many of us have found out those great dangers all too well personally.
What does an interest-free economy look like? I have never actually lived or even spent a great deal of time in a place where this particular law against interest has been enforced. Muslims have an even stricter version of this law against riba (interest), and it is clear that economies can function on an interest-free level, because a lack of interest does not necessarily mean a lack of profit. It simply means that profit is based on an “internal rate of return” rather than a charging of interest. In fact, the Muslim laws against interest and the understanding that property rights of human beings are limited because we are only the viceregents of the ultimate owner (God) are very close to the biblical view of property, even if they grant more power to the state than a biblically based viewpoint .
It is lamentably clear that Western civilization is bankrupt morally as well as economically. We ought to expect nothing less, given that our economic systems have been based on largely unlimited growth, involved the exploitation of our own and other people, and put short-term profits and pleasure over long-term gain and principles of stewardship of our people and of our resources. And we are reaping what we have sown. If we want to get out of the deep abyss we have all put ourselves into, we are going to need a new vision of life and economic practice that no longer depends on the exploitation of poorer people and countries through interest payments that make the rich richer while they impoverish the world and its increasingly frustrated inhabitants. A renewed focus and interest in biblical law and its economic implications would be in order.