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Monday, April 21, 2008

Calvinism & Usury

There is a link between Calvinism and our modern use of Usury. We now live in an age where High Usury against is commonplace, yet the Bible and Historic Christian commentary for 15 hundred years were all against it. Except for one person. And that person was John Calvin.

In the book "Christianity's Dangerous Idea" Alister Mcgrath goes through the common consensus of Biblical interpretation in regards to the issue of Usury. He notes how everyone was against it. Then he turns tro Calvin and shows how his view eventually became the common interpretation of the text among Prots and then about 3 hundred years later among Catholics, and eventhough he doesn't mention this, but it has alo become the view of some Orthodox in recent decades.

Yet while Christians were Prohibited from lending money at interest, Jews
were explicitly exempted from this ban. This exemption led to the emergence of
the stereotype of the Jew as an avaricious moneylender, famously exemplified in
Shakespeare's Shylock in The Merchant of Venine. These views were not challenged
in the first phase of Protestantism. Martin Luther regarded the biblical
prohibition of usury as permanently binding. In his 1524 sermon on trade and
usury, Luther lashed out at any attempt to change interest. In his view,
Christians "should willingly and gladly lend money without any charge." The
Elizabethan Protestant bishop John Jewel reflected the views of his age when he
raged from his pulpit against the iniquities of usury. "It is theft, it is the
murdering of our brethern, it is the curse of God and the curse of the people."
This uncompromising opposition to usury was emodied in a statute passed by the
English Parliament in 1571, which had the uniforeseen and unintended effect of
legitimating usury at a fixed rate of 10 percent.

Yet the lending of monay at interest was essential to the emergence of
modern capitalism. A steady increasing hunger for capital led many in both
church and state to turn a blind eye to moneylending and to reconsider the
entire theological basis of the prhibition of usury. Calvin could not have been
unaware of these problems. The survival of the city of Geneva depended on being
able to sustain and develop its urban economy and remain independant of
potentially dangerous neighbors.

In 1545 Calvin wrote to his friend Claude de Sachin, setting out his views
on usury. The letter was not published until after Calvin's death (1564), when
Theodore Beza decided to make its contents generally known in 1575. At one
level, this letter can be read as a total inversion of the teaching of the Old
Testament; a more attentive reading confirms this suspicion but discloses the
sophisticated lines of argument that led Calvin to his surprising conclusion.
how could Calvin reinterpret the Old Testament's explicit statement that usury
is prohibited to mean that it is actually permitted?.

Calvin's letter of 1545 reinforces the impotance of biblibal interpretation
to Protestantism. In one respect, Calvin reaffirmed the general Protestant idea
that not all the rules set out for Jews in the Old Testament were binding upon
Christians; in these instances, the Old Testament offered moral guidance only,
not positive prescription for conduct. Yet this way of interpreting the Old
Testament had been applied to cultic issues-such as the Old Testament's demand
for animal sacrifices. Calvin's extension of the principle to usury broke new

A fundamental theme recurring throuhout the letter was that things had
moved on. the situation in sixteenth-century Europe was not the same as that in
ancient Israel.
As Bieler points out in his magisterial study of Calvin's economic thought,
the new economic realities of the sixteenth century made it possible to view
interests as simply rent paid on capital. Calvin therefore argued for the need
to probe deeper and ascertain the general princliples that seemed to underlie
the Old Testament ban on usury in its original context. It was the purpose of
the prohibition, not the prohibition itself, that had to govern Protestant
thinking on this matter. "We ought not to judge usury according to a few
passages of scripture, but in accordance with the principle of equity." For
Calvin, the real concern was the exploitation of the poor through." through high interests rates.
This, he argued, could be dealt with in other ways-such as fixing of interest
rates at communally acceptable levels. Calvin's willinglness to allow a variable
rate of interest showed an awareness of the pressures upon capital in the more
or less free market of the age.

Calvin's views which were seen by many as running counter to the clear
meaning of the Bible, took some time to become accepted. By the middle of the
seventeenth century-more than one hundred years after Calvin's groundbreaking
analysis-usury was fully regarded as acceptable.
Protestant jurists such as Hugo
Grotius and Samuel Pufendorf supplemented Calvin's theological analysis with
clarifications of economic concepts, especially in relation to price and value,
that finally removed any remaining scruples about lending money at unterest. The
Catholic church did not legitmate usury, however, until 1830, apparently in
response to the widespread acceptance of the practice within predominantly
Protestant western Europe.

Yet Protestantism did more than bring about the theological adjustment that
opened the way to a modern capitalist economy, its early development in the
cities of Europe, especially in Switzerland, created the economic conditions
that made such a change inevitable and essential. During the period 1535 to
1540, an economic recession descended on the area around Geneva. Despite this
downturn, Geneva was able to survive and to go on to benefit from the subsequent
recovery throughout the region, which lasted from 1540 to 1555. It is now
thought that one of the prime reasons for Geneva's resilience during this period
was the emergence of the Swiss banking system, which allowed Basel and other
major Swiss Protestant cities sympathic to Calvin's religious agenda to bail him
out through large loans. The Swiss banking system emerged as a direct response
to a shared sense of identity throughout the Protestant cantons of Switzerland
and neighboring cities-including
raising of capital for economic expansion thus became imperative for Geneva
around this time. Calvin's removal of the remaining theological impediments to
the practice of usury was not merely religiously progressive; it was essential
if his version of Protestantism was to survive
. So intimate was the connection
between the religious system of Calvinism and the city of Geneva that the
collapse of the latter would have had disastrous implications for the

Calvinism's noval interpretation of Usury is one of the causes of masses poverty in the World today. Yes, the world has always had it's poor, but Calvinism has made it even worse.

Related links:
orrologion: Entries on 'Interest' & 'Usury' in the 1917 Catholic Encyclopedia

More on "Usury"


[1] pages 332-335 from the book "Christianity's Dangerous Idea: The Protestant Revolution-A History from the Sixteenth Century to the Twenty-First by Alister E. McGrath. Published by HarperOne, Copyright 2007


Kevin Jackson said...

Very interesting & insightful.

Jnorm said...

Yeah, Dr, Alister Mcgrath......the sameone that likes to argue with Richard Dawkins.

But Alister Mcgrath wrote an awsome book. It was hard to put the book down. It is packed with information.


Anonymous said...

If you are alarmed by the state of the economy, strength of the dollar and ballooning national and individual debt, then you are not alone. Help us try to restore the Thrift ethic to the American political and economic discourse. More than just being stingy, Thrift is the wise use of material resources, encompassing self-sufficiency, stewardship, and sustainability. Come to our conference-Confronting the Debt Culture- in Washington D.C. on May 12th and 13th to meet important individuals from the pro-thrift community. A major focus of the conference will be to address the problems posed by payday loans and other predatory lending options- truly modern paragons of the biblical definition of usury. We will also be exploring alternative, pro-thrift options, usually provided by various credit unions. Speakers include Chris Peterson, usury expert from the University of Utah S.J. Quinney College of Law; Ken Eiden, CEO of Prospera Credit Union (Appleton, WI); Dr. John M. Templeton, Jr. and many more. Learn more at To sign up, email

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