History of usury

Money is like body temperature, you should have it. Flavio Briatore Italian entrepreneur

In the modern world, the term “Usury” is interpreted extremely vaguely: the usurer receives “illegal” financial benefits, puts the borrower in “enslaving” conditions, charging an “unreasonably high”, “exorbitant”, “illegal” interest rate.  

But we do not consider banks that lend at interest rates that are not always loyal, to be moneylenders, despite the enslaving conditions of lending. Maybe this is a private person lending money illegally and collecting the amount of debt using inhumane methods? Let's try to figure it out.

Usury arose as a result of the impossibility of paying for urgent needs, that is, against the backdrop of the acute needs of unsecured people. At all times, people who did not have money to pay for the basic needs that ensure human existence went to the moneylender. Consequently, usury originated and existed as an undisguised form of exploitation of need, often in its extreme form. At the same time, the reasons for the emergence of such a need were varied: famine due to crop failure, natural disasters, wars and much, much more.

In the Encyclopedic Dictionary of Brockhaus and Efron we will read:

Usury can be understood in the narrow and broad sense of the word. In the first sense, “usury” means the extraction of excessive benefits from a monetary loan by exploiting the difficult situation of the debtor, in the second - in general, any contractual transaction in which there is enrichment disproportionate to the service provided due to the need or constrained position of the other party; this includes, for example, the sale of livestock on credit for an exorbitantly expensive price (Viehwucher), the purchase of agricultural products for next to nothing (Kornwucher), the sale of land on credit (Landwucher), etc.

The delivery of gold and jewelry by starving people in the notorious Torgsin network in exchange for food is a vivid illustration of usury in the broadest sense, in its most unsightly form.

 Thus, the characteristic features of “usury” in general are:

• exceeding the benefit received from a transaction than the usual remuneration under given conditions,
  
• exploitation of a person’s need or constrained position, leading to his economic decline.. 
  

It is clear from this that a high interest rate on a money loan does not in itself give the transaction a usurious nature. If, for example, money is given to a very risky enterprise, then, according to the normal conditions of a credit transaction, the lender must take a large percentage as a reward for the risk; a debtor who has received a high profit on the turnover of borrowed capital, for example 40-50%, can, without any damage to himself, give the creditor 20 or even 30%, which under other conditions may well characterize a usurious transaction. 

On the other hand, receiving disproportionate remuneration for a loan of money, for a sold item, etc., from a rich person acting on a whim, cannot be considered “usury” in the same way, since there is no exploitation of need that threatens the economic well-being of the person.

Further, the dictionary says: The idea of usury in a broad sense has been developed only in very recent times (at the time of writing - the end of the 19th century), but the concept of “usury” has been known since ancient times. 

Usury is an ancient economic phenomenon. The first loans were given and repaid in kind - grain, flour, livestock. According to one version, the very idea of ​​​​giving property for growth originated from livestock loans. By lending an ox (for example, as a draft force), the owner received it back with a natural increase.

The first moneylenders acted even before the emergence of money (for example, the Greek poet Hesiod, who lived in the 8th-7th centuries BC, wrote about them, i.e., approximately 100-200 years before the emergence of the first monetary systems in Hellas).

In 1874, the party Arab workers dug out from one large mound several well-preserved clay vessels, tightly filled with small inscribed tiles. The workers who found the vessels took them to a certain merchant in Baghdad, from whom George Smith bought them for the British Museum, not knowing what treasure they had stumbled upon. 

There were about three thousand tiles. Upon inspection, it turned out that these were documents on trade and legal transactions, with the names and signatures of the main persons and witnesses. Among these names was always the name of some son, grandson, or descendant of a certain Egibi, apparently the founder of a company with enormous wealth and influence.. Thus, the archives of a rich and influential family known as the Banking House of Egibi were opened.

To be continued