RT Article
T1 Usury and Just Compensation: Religious and Financial Ethics in Historical Perspective
JF Journal of business ethics
VO 72
IS 1
SP 1
OP 15
A1 Mews, Constant J.
A1 Abraham, Ibrahim
A2 Abraham, Ibrahim
LA English
YR 2007
UL https://ixtheo.de/Record/1785627430
AB Usury is a concept often associated more with religiously based financial ethics, whether Christian or Islamic, than with the secular world of contemporary finance. The problem is compounded by a tendency to interpret riba, prohibited within Islam, as both usury and interest, without adequately distinguishing these concepts. This paper argues that in Christian tradition usury has always evoked the notion of money demanded in excess of what is owed on a loan, disrupting a relationship of equality between people, whereas interest was seen as referring to just compensation to the lender. Although it is often claimed that hostility towards ‘usury’ has been in retreat in the West since the protestant Reformation, we would argue that the crucial break came not with Calvin, but with Jeremy Bentham, whose critique of the arguments of Adam Smith, upholding the reasonableness of the laws against usury, led to the abolition of the usury laws in England in 1854. There has to be a role for law, whether Islamic or secular, in regulating financial relationships. We argue that by retrieving the necessary distinction between demanding usury as illegitimate predatory lending and interest as legitimate compensation, we can discover common ground behind the driving principles of financial ethics within both Islamic and Christian tradition that may still be of relevance today. By re-examining past ethical discussions of the distinction between usury and just compensation, we argue that the world’s religious traditions can make significant contributions to contemporary debate.
K1 financial ethics
K1 Religion
K1 predatory lending
K1 Middle Ages
K1 Islamic Finance
K1 Bible
K1 Interest
K1 Usury
DO 10.1007/s10551-006-9151-0