For any interested who happen to read German, here is an excellent article on what is called the "Regensburg affair," circa 1587. Basically, a handful of faithful pastors dared to follow Luther and preach against lending at interest. The magistrates tried to silence them, but they wouldn't be silenced. They brough in Jakob Andreae to attempt to soften the view of these stubborn traditionalists. It didn't happen, so they were exiled for preaching the truth, for preaching the same exact thing Luther preached only half a century before.
This conversation must happen. And we must be courageous when it gets uncomfortable.
I’ve been thinking on usury for quite a while, can’t avoid what the Bible says about usury, there is a prohibition.
The other unfortunate topic that kind of goes hand in hand with usury is indentured servitude/slavery for no more than a 7 year term, to pay off debts. There were instances the slave remained serving in the household after being granted freedom, because of the righteous and benevolent master, who was fair. This is not to say that this institution wasn’t grossly abused as it was. (See the story of Laban and Jacob). Not trying to advocate for slavery, but like usury, a topic that has been ignored
Very stimulating article! I have trouble wrapping my head around charging zero interest say for a 10 year loan, when the cost of living rises by 25% in that decade. If I'm the lender, I've lost that 25%, or a deductible portion of it, as the loan was being repaid, making the "cost of doing business" a burden on the lender, not on the borrower. I have gone to Washington with others to fight against the pay day loans and the rapacious credit card loans, with at least some results. What I read here is more in line with tearing the whole system down. Which is a challenging but valuable thought for Christians.
One of the things we need to realize is that we have become conditioned to believe and accept that inflation was created on one of the seven days of Creation. It is neither God-given nor natural.
One of the most iniquitous developments is how inflation is used by the government to "taper the Ponzi scheme" of its unsustainable welfare programs.
That said, reasonable men might agree that a loan should be repaid at the inflation-adjusted equivalent so that the lender is not out of pocket against inflation; otherwise, there is no incentive to lend if it's not pure charity.
If we consider the most adverse conditions possible for a lender—a fixed-rate, compound-interest loan for 10 years at 4.25% per year, starting in 2016 when rates were low and ending in 2025 —it still beats the massive inflation over that period.
The lender would have gained 53% against the cumulative inflation for that period, which was 33.9%. Perhaps the lender breaks deducts another 2.5% for its weighted average cost of capital to provide the loan in the first place, plus some admin overhead. That's a very unusual case - the banks have not been placed in that situation for decades. When they have been on the losing side, they have threatened to implode the system to get bailed out, even as their risk profiles multiplied.
The government student loan racket is as bad as payday loans and the legalized credit card theft, thanks to the Senator from MBNA. Glad you have fought that wickedness!
We don't need or want a revolution, just Christian charity starting at home and healthy paternalism for people who don't have the 112 IQ necessary to process financial documents properly.
If you have over one billion US dollars worth of leverage, you are way past having the capacity to act with moral agency no matter how you wrap the package.
Thanks so much for the response to my comment. Allow me to comment on what would be an enlargement of the field for Christian charity as ground is re-taken from governmental programs now caring for the poor and corporate finance programs designed on bottom line profits now driving the loan business. First, it's a big jump. As in ginormous. Secondly, could the replacement of corrupted loan practice by charitable, less onerous policies, be accomplished in any realistic way and how long would that take? Would that mean charitable money would "subsidize" several percentage points of a higher interest loan? Of course, that could be abused, but it can at least be envisioned. Finally, Christians are not the only charitable players in God's realm of the left. Although it's hard even to think of commingling funds among Christian groups ecumenically (we did it for seven years with Lutheran Disaster Response of New York after 9/11), it would be necessary across inter-faith lines. Even tougher, even more necessary. I should say that to me there's a subtle but basic difference in motivation in the interfaith world. The motivation for us - at least the Lutheran some of us - is the Gospel: He who was rich for our sake became poor, etc. Other ecumenical and faith partners are more law-based. But - if this huge change of direction in the profit motivation is undertaken, then charitable monies of all faiths would of necessity need to be commingled. This would expand tremendously the concept of "cooperation in externals" that has been a guiding principle for LCMS agencies working in God's realm of the left. A few Monday morning thoughts.
There is still considerable capital capacity in the LCMS that could be leveraged into discounted loans and gifts, but original sin and moral hazard are significant obstacles.
With regard to co-operation in externals, I am vehemently opposed. There is not a single example of LCMS co-operation in externals that has not compromised its confession to the point of grieving the Holy Ghost. Ultimately, all those partnerships become dangling goodies in front of the needy and greedy in the hopes of luring them to the gospel. That's not how gospel proclamation works.
What we see with all these external programs is that they move their attention from the nearer neighbor to the most distant neighbor. We talk a great game about how all the activities are "gospel opportunities". Let's be honest - where have they borne fruit? We have poured billions (cumulatively) into foreign missions, Concordias, disaster relief, comfort dogs, immigration, and refugee support. After all that, LCMS membership and weekly attendance have halved in just a quarter century.
The LCMS has a fundamental problem with mission and gospel proclamation. It is singularly unsuccessful at making converts, yet wildly successful at shedding its founding stock.
I hope our theologians can get to the root cause. This has to be a problem of impure doctrine, not a lack of doing nice things for the needy.
Mission and Gospel proclamation are absolutely the top priority. That can't change because of our anchors in Scripture and the Lutheran Confessions, which include the result of those realities in the hearts of believers through time - we hold to the objective reconciliation of the world with God through God's acts in Christ to bring us back together, all of us humans for all of time. Subjectively, all do not know or believe this and therefore become the primary purpose of mission proclamation - to do as Jesus did and to seek and save the lost in His precious Name.
Having said that, cooperation in externals in a financial way can indeed bear fruit, and not involve usurious practices. Two good things can be true at the same time. The first denomination to commit to the Nehemiah Housing Plan, providing thousands of owner-occupied mostly single family affordable homes around the country but centering in Brooklyn, NY was our very own Lutheran Church-Missouri Synod. I know this because I was the person who asked them to commit one million dollars interest free for a five year period to accomplish the building of the first 1000 such homes. And the LCMS said yes, and followed through, eventually sending the money and participating in and ecumenical trust with others. Because subsequently Roman Catholic, Baptist and Episcopalian millions were added to the interest free pot, and those homes were built. Because of the revolving loan pool concept that brought the money back to its ecumenical trustees while the building took place, after all was said and done each denomination got back far more than their original committed amount of money, because those funds were invested while not being used. Not only were homes built, but baptisms, first holy communions, confirmations, membership accession and congregational leaders were developed including some who went on to ordained service in the Church.
Cooperation in externals and non-usurious programs of building affordable housing produced fruit for the Kingdom of God. And, it should not be forgotten, equity for those who purchased those homes.
Glad to see this conversation continuing.
For any interested who happen to read German, here is an excellent article on what is called the "Regensburg affair," circa 1587. Basically, a handful of faithful pastors dared to follow Luther and preach against lending at interest. The magistrates tried to silence them, but they wouldn't be silenced. They brough in Jakob Andreae to attempt to soften the view of these stubborn traditionalists. It didn't happen, so they were exiled for preaching the truth, for preaching the same exact thing Luther preached only half a century before.
This conversation must happen. And we must be courageous when it gets uncomfortable.
https://babel.hathitrust.org/cgi/pt?id=mdp.39015062685980&seq=313
(The article begins on pg. 313 of this document.)
Thank you, Pastor.
I’ve been thinking on usury for quite a while, can’t avoid what the Bible says about usury, there is a prohibition.
The other unfortunate topic that kind of goes hand in hand with usury is indentured servitude/slavery for no more than a 7 year term, to pay off debts. There were instances the slave remained serving in the household after being granted freedom, because of the righteous and benevolent master, who was fair. This is not to say that this institution wasn’t grossly abused as it was. (See the story of Laban and Jacob). Not trying to advocate for slavery, but like usury, a topic that has been ignored
Pope Francis spoke against usury fairly recently. What are you referring to in 1918?
Apologies, it should be 1917. Here is a reference: https://canonlawmadeeasy.com/2014/09/04/what-does-the-church-say-about-usury/
In Latvian there is a saying "Debt is not a brother." It, at the very least, should not be treated as one.
Very stimulating article! I have trouble wrapping my head around charging zero interest say for a 10 year loan, when the cost of living rises by 25% in that decade. If I'm the lender, I've lost that 25%, or a deductible portion of it, as the loan was being repaid, making the "cost of doing business" a burden on the lender, not on the borrower. I have gone to Washington with others to fight against the pay day loans and the rapacious credit card loans, with at least some results. What I read here is more in line with tearing the whole system down. Which is a challenging but valuable thought for Christians.
Thank you, Dr. Benke.
One of the things we need to realize is that we have become conditioned to believe and accept that inflation was created on one of the seven days of Creation. It is neither God-given nor natural.
One of the most iniquitous developments is how inflation is used by the government to "taper the Ponzi scheme" of its unsustainable welfare programs.
That said, reasonable men might agree that a loan should be repaid at the inflation-adjusted equivalent so that the lender is not out of pocket against inflation; otherwise, there is no incentive to lend if it's not pure charity.
If we consider the most adverse conditions possible for a lender—a fixed-rate, compound-interest loan for 10 years at 4.25% per year, starting in 2016 when rates were low and ending in 2025 —it still beats the massive inflation over that period.
The lender would have gained 53% against the cumulative inflation for that period, which was 33.9%. Perhaps the lender breaks deducts another 2.5% for its weighted average cost of capital to provide the loan in the first place, plus some admin overhead. That's a very unusual case - the banks have not been placed in that situation for decades. When they have been on the losing side, they have threatened to implode the system to get bailed out, even as their risk profiles multiplied.
The government student loan racket is as bad as payday loans and the legalized credit card theft, thanks to the Senator from MBNA. Glad you have fought that wickedness!
We don't need or want a revolution, just Christian charity starting at home and healthy paternalism for people who don't have the 112 IQ necessary to process financial documents properly.
If you have over one billion US dollars worth of leverage, you are way past having the capacity to act with moral agency no matter how you wrap the package.
Thanks so much for the response to my comment. Allow me to comment on what would be an enlargement of the field for Christian charity as ground is re-taken from governmental programs now caring for the poor and corporate finance programs designed on bottom line profits now driving the loan business. First, it's a big jump. As in ginormous. Secondly, could the replacement of corrupted loan practice by charitable, less onerous policies, be accomplished in any realistic way and how long would that take? Would that mean charitable money would "subsidize" several percentage points of a higher interest loan? Of course, that could be abused, but it can at least be envisioned. Finally, Christians are not the only charitable players in God's realm of the left. Although it's hard even to think of commingling funds among Christian groups ecumenically (we did it for seven years with Lutheran Disaster Response of New York after 9/11), it would be necessary across inter-faith lines. Even tougher, even more necessary. I should say that to me there's a subtle but basic difference in motivation in the interfaith world. The motivation for us - at least the Lutheran some of us - is the Gospel: He who was rich for our sake became poor, etc. Other ecumenical and faith partners are more law-based. But - if this huge change of direction in the profit motivation is undertaken, then charitable monies of all faiths would of necessity need to be commingled. This would expand tremendously the concept of "cooperation in externals" that has been a guiding principle for LCMS agencies working in God's realm of the left. A few Monday morning thoughts.
There is still considerable capital capacity in the LCMS that could be leveraged into discounted loans and gifts, but original sin and moral hazard are significant obstacles.
With regard to co-operation in externals, I am vehemently opposed. There is not a single example of LCMS co-operation in externals that has not compromised its confession to the point of grieving the Holy Ghost. Ultimately, all those partnerships become dangling goodies in front of the needy and greedy in the hopes of luring them to the gospel. That's not how gospel proclamation works.
What we see with all these external programs is that they move their attention from the nearer neighbor to the most distant neighbor. We talk a great game about how all the activities are "gospel opportunities". Let's be honest - where have they borne fruit? We have poured billions (cumulatively) into foreign missions, Concordias, disaster relief, comfort dogs, immigration, and refugee support. After all that, LCMS membership and weekly attendance have halved in just a quarter century.
The LCMS has a fundamental problem with mission and gospel proclamation. It is singularly unsuccessful at making converts, yet wildly successful at shedding its founding stock.
I hope our theologians can get to the root cause. This has to be a problem of impure doctrine, not a lack of doing nice things for the needy.
Mission and Gospel proclamation are absolutely the top priority. That can't change because of our anchors in Scripture and the Lutheran Confessions, which include the result of those realities in the hearts of believers through time - we hold to the objective reconciliation of the world with God through God's acts in Christ to bring us back together, all of us humans for all of time. Subjectively, all do not know or believe this and therefore become the primary purpose of mission proclamation - to do as Jesus did and to seek and save the lost in His precious Name.
Having said that, cooperation in externals in a financial way can indeed bear fruit, and not involve usurious practices. Two good things can be true at the same time. The first denomination to commit to the Nehemiah Housing Plan, providing thousands of owner-occupied mostly single family affordable homes around the country but centering in Brooklyn, NY was our very own Lutheran Church-Missouri Synod. I know this because I was the person who asked them to commit one million dollars interest free for a five year period to accomplish the building of the first 1000 such homes. And the LCMS said yes, and followed through, eventually sending the money and participating in and ecumenical trust with others. Because subsequently Roman Catholic, Baptist and Episcopalian millions were added to the interest free pot, and those homes were built. Because of the revolving loan pool concept that brought the money back to its ecumenical trustees while the building took place, after all was said and done each denomination got back far more than their original committed amount of money, because those funds were invested while not being used. Not only were homes built, but baptisms, first holy communions, confirmations, membership accession and congregational leaders were developed including some who went on to ordained service in the Church.
Cooperation in externals and non-usurious programs of building affordable housing produced fruit for the Kingdom of God. And, it should not be forgotten, equity for those who purchased those homes.