Though I’m sure someone in the State Department will argue otherwise.Cyrus the Great (590 – 529 BC), founder of the Persian Empire, was not a terrorist. Quite far from that. Although he was not wanted as a next-door neighbor, Cyrus II of Persia was highly enlightened for his time, according to the Greek historian Herodotus. Cyrus, in fact, beheaded only those who did not bend under his rule. But everyone else was saved. Such was the case of Croesus of Lydia, whose life was spared by Cyrus after the battle of Pterium, and that of Nabodinus after the battle of Opis and the siege of Babylon. However, Cyrus, like all military geniuses, had his… shall we say… pet peeves: If he ever caught someone charging interest on a loan, he’d have them tied to the stake, personally pull out his Zippo, and… . .woosh, set it on fire right there.
In this age of mortgages and loan interest rates, as well as investment returns and returns, it is interesting to see how the very concept of interest, both active and passive interest, has developed over time. over the centuries to the point where we recognize and understand it today. Looking back at how things used to be is always rewarding, insofar as it gives us a measure of how times have changed.
The ‘phenomenon of interest’, as it was once called, first came into question only in the form of loan interest for a full two thousand years. What especially attracted the attention – and anger – of our ancestors was the fact that the interest on loans does not originate from work but, as it were, from a generous maternal wealth. In societies of the past, where work and productivity were the very essence of existence, making a profit by literally producing nothing for the common good must have seemed almost sacrilegious. Furthermore, the acquisition of wealth without work was diametrically opposed to many early religious principles, both pagan and Christian.
The history of the phenomenon of interest, therefore, begins with a very long period in which only the interest on the loan, or usury, is the object of investigation. This period begins in the depths of antiquity and goes until the 18th century. It deals with the contention of two opposing doctrines: the larger of the two is hostile to interest, while the latter defends it. In the early stages of economic development a keen aversion to taking interest regularly appears. Credit still has little place in production. Almost all loans are consumer loans and are, as a rule, loans to people in distress. The creditor is usually rich, the debtor poor; and the former appears in the hideous light of a man who squeezes something out of the little of the poor as interest to add to his own superfluous wealth.
It is not surprising, therefore, that both the ancient world and the Christian Middle Ages were exceedingly unfavorable to usury. The Ancient World, despite some cheap flights, had never developed much of a credit system, and the Middle Ages, after the decline of Roman culture, found itself – in industry as in so many other things – thrown back into the fold. circumstances of primitive times. As a result, various laws were enacted in both eras prohibiting charging or paying interest.
Perhaps the Greek philosopher and thinker Aristotle in his book “Politics” is the most vociferous opponent of interest. This is what he wrote: “Of the two kinds of money-making, one, as I have just said, is part of household management, the other is retail trade: the first is necessary and honorable, the second a kind of exchange which is justly censured; because it is unnatural, and a way by which men benefit one another. The most hated, and with greater reason, is usury, which is earned with money itself, and not with its natural use. Because the money was meant to be used in exchange, but not to increase interest. And this term usury, which means the birth of money from money, is applied to the raising of money, because the offspring resemble the father. Therefore, of all the ways to make money, this is the most unnatural.Quite a statement! You may want to bring this to your banker’s attention when you apply for a loan next time.
Aristotle’s thought can be summarized as follows: money is by nature incapable of bearing fruit. As such, the lender’s profit cannot come from the peculiar power of money. And, consequently, it can only come from a fraud of the borrower. Interest is therefore a profit made by abuse and injustice (another point that can be discussed with a banker).
Things began to change a bit under the Roman Empire, when economic exchange and trade in goods became so complex that free credit no longer made sense. And yet even the Romans, perhaps in accordance with the theological creed of the day, placed severe legal restrictions on the amount of interest that could be charged. And to canonize these limits (which varied from case to case), they were the first to publish a list of interest rates. This list became more complicated over time, since the Senate thought that interest rates should be less for friendly countries and more for enemies, thus establishing the first international economic agreements between countries in the Mediterranean basin (although these ‘ economic agreements’ where unilateral, that is, imposed by Rome on everyone else).
However, things began to get progressively worse after the dissolution of the Roman Empire and the arrival of Christianity. In fact, certain passages were found in the sacred writings of the New Testament which, according to the usual interpretation, seemed to contain a direct divine prohibition on taking interest. This was particularly true of the famous passage in Luke: “Lend without expecting anything in return(Third point should be pointed out to a banker). The powerful support which the spirit of the age, already hostile to interest, thus found in the express expression of divine authority, gave it the power once more to bring legislation in its favour. . The Christian Church lent its arm. Step by step he succeeded in introducing the ban into law. First the Church forbade the taking of interest and it was allowed only to the clergy. Then everyone was banned, but the ban remained only came from the Church. Eventually even temporary legislation succumbed to the influence of the Church and gave its harsh statutes the sanction of Roman Law.
Tea status quo it was etched in stone for the next fifteen centuries, until the advent of Mercantilism and the Industrial Revolution. Here, the monarchies of the time, especially the Crown of England, decided to support private entrepreneurs with their own money. They chose to do so to gain political and strategic advantage over other monarchies and other states. And to encourage their own citizens not only to work manually, but also to think, they cheerfully invested large sums in the development of their inventions, some archaic but others of very practical application. In doing so, however, the monarchies wanted to obtain an economic benefit as well, and thus the modern concept of interest, both simple and compound, was finally born.
Louis Frascati