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Home » Economy, Ki Tetze

Ki Teze: Why Usury is Forbidden

Submitted by on August 19, 2007 – 1:57 amNo Comment | 1,320 views

Brotherhood

Usury is not inherently wrong. On the contrary, it is critical to the conduct of business . Usury encourages banks to extend mortgages and loans, it enables entrepreneurs to establish or expand their  business and it enables ordinary people to purchase homes and automobiles.

Banks require the incentive of usury to part with their hard-earned money, but we shouldn’t require  incentive to help our siblings in their time of need. It ought to be something we naturally want to do.

Because Jews view the entire Jewish nation as a single family, they are forbidden to charge interest of other Jews. When a fellow Jew is in need and I am in a position to extend a loan, I must do so willingly. To take advantage of my sibling’s need is utterly despicable. (1)

This is why Jewish lenders are forbidden to charge interest on loans to Jews,but are permitted to charge interest on loans to Non Jews. (2)

Another Explanation

Prohibiting usury between Jewish lenders and Jewish borrowers is inherently fair. Jewish lenders  know that if the roles were reversed and  they were ever in need, they too would receive a free loan.

Asking Jewish lenders to extend free loans to non Jews would be inherently unfair because Non Jews,  not being bound by Jewish law, are not required to reciprocate. The Torah  therefore leaves this decision to the lender’s discretion, but doesn’t mandate it. (3)

Reaping Benefits

Usury is understandably wrong when the borrower is impoverished. We are required to support the poor, not to encumber them. (4)

Furthermore, it is a Mitzvah  to help the poor and the reward for mitzvot await us in heaven. Collecting interest on a loan would constitute a form of reward collection here on earth. This would naturally reduce the reward that awaits us in heaven. (5)

Why is usury forbidden to wealthy borrowers? Loans are often offered to people of means, who require immediate funds to establish a business.

why usury is forbidden - innerstream

These investors are happy to pay interest on a loan because their profit margin is expected to exceed their rate of interest. Why is usury forbidden under these circumstances?

Faith

Egypt is an arid land, where water is supplied by the Nile river. Its water supply is secure limited though to the narrow strip along the Nile. Water in Israel is also in short supply, but Israeli farmers can’t count on local water sources for their supply; they must rely on rainfall. Rain in Israel is so critical that looking to the sky to gauge the weather is second nature to Israeli farmers.

Consequently, the Egyptian mind set is one of self-reliance. The Israeli mind set is one of divine dependence. G-d deliberately transferred our ancestors from Egypt to Israel in an effort to change their mindset. Praying for rain after plowing and planting engenders a general sense of dependence on G-d for all of life’s blessings. Even after making our best effort we know that success is ensured only after G-d blesses our efforts with success.

Every business opportunity entails a form of risk. Even after investing effort and money, we know that our success is not ensured unless G-d chooses to bless our efforts with success.

Usury is the only exception. Lenders invest their money and sit back to collect interest. The interest payments are not linked to the debtor’s success: they are legal obligations that the debtor cannot avoid. The lender’s success is absolutely ensured and completely enforceable through the courts.

This form of secure return on an investment stimulates a return to the self-reliance mindset that characterized our ancestors in Egypt. G-d deliberately brought us to Israel to engender a change in this mindset. To this end, the Torah prohibits usury. (6)

Idle Waste

Another aspect of usury is that lenders sit idly by while their money generates profit.

A work ethic is integral to the moral quality of life. It promotes efficiency, direction and purpose. Without a work ethic it is easy to lapse into a state of lethargic laziness where stress and commitment are scrupulously avoided. In this frame of mind, we prefer comfort and leisure over dynamic purpose.

Our mission as Jews is to promote moral purpose. We are meant to illuminate our spirit with divine radiance and fill our spiritual void with meaning. It is our mandate to study the Torah with passion and to fulfill mitzvot with alacrity. This holy mission is accomplished only when we approach it with enthusiasm. Enthusiasm draws holiness into our environment and transforms the mundane into a sanctuary for G-d.

A bi product of this commitment is the personal advantage we gain. The effort affects our personality and improves our character. It refines our nature and sharpens our moral compass.

We become more attuned to the needs of humanity and more sensitive to the will of G-d. Our senses broaden to encompass not only our own needs, but also those of others. Not only our own pleasure, but also our mission and goal.

This cannot be achieved through idle laziness. It requires dedication, enthusiasm and commitment. Usury promotes the opposite and the Torah therefore forbids it. (7)

Footnotes

  1. Abarbenel (Don Yitzchak Abarbanel- Spain-1437-1508) and Ramban (Nachmanides, R. Moshe Ben Nachman, Spain 1194-1270) on Deuteronomy 23: 21
  2. Deuteronomy 23: 20 – 21.
  3. Iturei Torah on Deuteronomy 23: 21
  4. Abarbenel Deuteronomy 23: 21and  and Kli Yakar (R. Ephraim Shlomo of Luntshitz, 1550-1619) on Leviticus 25: 36.
  5. Tiferet Yonatan (R. Yonasan Eibshitz, Prague,1690-1764) on Deuteronomy 23: 21. He goes so far as to argue that because helping the Non Jew is not a Mitzvah per se (it is a proper deed, but not a commandment) it is not forbidden between a Jewish lender and a non Jewish borrower.
  6. Kli Yakar and Ktav Sofer (R. Avraham Shmuel Binyamin Sofer, Pressburg, 1815-1879) on Leviticus 25: 36. See Toras Moshe (R. Moshe Alshich, Tzefat, 1508-1600) ibid for a similar explanation, but a slightly different approach.
  7. R. Yitzchok Yehudah Trunk of Kutna, cited by Iturei Torah on Deuteronomy 23: 21.
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