Christian lending and the uglification of Ugley

John Richardson caught my attention with a post on The Debt Disaster, mainly because in his introduction he quoted Psalm 15:5 and highlighted the words “without charging interest”. The highlighting was in fact a link to an older post which further linked to an essay which John wrote called Losing Interest, where he argues from the Bible and from Luther that it is wrong for Christians to accept interest. I commented on the debt disaster post, and John responded quickly with a new post about The wrongs of loans, in which he appeals additionally, but inconclusively, to CS Lewis.

Now I entirely agree with John that irresponsible lending and borrowing have got out of hand. Many people who were not especially poor have fallen into a poverty trap by taking out loans larger than they can afford to repay, in many cases to buy things they didn’t need, but in others to buy the bare necessities of life such as houses to live in.

But it seems to me that the steps which John proposes for solving this problem are neither soundly biblically based nor effective.

On the biblical basis, John finds himself in a difficulty because the biblical ban on lending with interest is found only in the Old Testament, and he rightly holds that Old Testament laws of this kind are not binding on Christians. He tries to argue that this is a matter of basic morality, and not just of law, but his same argument would imply that keeping the Sabbath is a moral issue. But the moral issues here are not the precise prescriptions for an ancient society, no interest and no work on Saturdays, but the underlying principles, the need for a cycle of work and rest and to avoid oppressing the poor. (I accept that this is a very brief outline of a very complex issue.) And, although John ingeniously tries to turn this into a prohibition, it is hard to get round Jesus’ implied approval of collecting interest in Luke 19:23.

Like John, “I am not a student of economics”. But it seems to me that Luther’s teaching on interest, which he studies, is of more relevance to understanding late mediaeval world views and finances than in elucidating the proper Christian approach. Luther’s position is given as

There is no problem in taking a profit based on a loan, provided one shares the risk.

John calls this “Luther’s theology”, but surely it is in fact Luther’s culturally conditioned position on an issue on which views were in flux, at a time when modern economic systems were in their infancy and not yet fully accepted in popular culture. Luther seems to have assumed that this was a zero-sum game and so that an assured gain, rather than one made by taking a risk and so tantamount to gambling, could only be at someone else’s expense and so immoral. But the truth is that economic systems do not work like zero-sum games, there are real gains to be made in economic growth.

Now there is a theological side to Luther’s point that Christians should avoid shielding themselves from the ordinary risks of life, but instead should trust God. But in modern terms that should be used as an argument against insurance more than against interest.

The problem with John’s whole approach comes when he tries to apply specific rules suitable for one cultural situation, whether that of the Old Testament or that of Luther, to our very different situation today. What we need to ask today is whether offering loans with interest helps or harms the poor, or otherwise promotes Christian aims in general. And the answer to this today might be quite different from what it was many centuries ago.

So, do we try to follow the approach of Muslim fundamentalists and Christian Reconstructionists who aim to tear down modern society, and rebuild an ancient one based on literal application of ancient texts? Or maybe go half way and rebuild the late mediaeval society which Luther knew? Or do we start where we are, with a society which despite its many imperfections has done vast amounts to reduce poverty worldwide, and try to iron out these imperfections? I would think the latter.

But John, despite his rejection of the Christian Reconstructionist way of applying the Old Testament law, seems to want to tear down one of the fundamentals of our economic success. Indeed there is considerable irony in his recommendation

If you want to buy a house, use one of the banks currently making special arrangements for Muslims.

For these arrangements, with their discounts and surcharges calculated as if they were interest but not called that, are just the same kind of “casuistical ways of overcoming the legal prohibitions and moral strictures against usury” as the zinsskauf which Luther condemned. But by siding with Islamic law here he seems to be playing into the hands of Muslims trying to impose on non-Muslims sharia law, which means to rebuild the culture of Arabia in the time of Muhammed.

The better way, it seems to me, is to accept that interest is not intrinsically morally evil and is also fundamental to the prosperity of our modern world. To abandon such a basis would not help the poor, but put at risk the great reduction in poverty in much of the world in recent decades. Those who have money to invest should indeed invest it ethically, but that by no means implies avoiding interest, let alone accepting it only if there is real risk involved. In many cases one of the most ethical ways to invest may be to provide a loan at an affordable interest rate to relatively poor people who need homes to live in. And a convenient way to do that is through a building society.

Meanwhile, John effectively blames the current high house prices here in the UK on the easy availability of mortgages – while noting that a sufficient mortgage to buy a house remains outside the reach of ordinary people. But the basic reason why house prices are high is that demand exceeds supply; as long as this remains true mortgages will never be easily available to all. And in this part of the world the main reason for this lack of supply is the severe shortage of land available for building. The problem will not be solved by restricting access to mortgages, let alone by tweaking them to conform to the letter of sharia law.

John is the vicar of Ugley, which despite its name is probably a beautiful and prosperous small village. In 1870-72 its population was reported as 404, and by 1991 it had grown to only 430. No doubt, given its proximity to Stansted Airport and with a railway station only a mile away, housing developers would love to build all around the village, and pay a million pounds an acre for the farmland. Why don’t they do so? Because the people of Ugley, and of their district of Uttlesford which is their planning authority, don’t allow it! Understandably they don’t want their village to become a suburb living up to its name; they want to retain their rural feel. I feel the same about my already largely suburbanised village on the edge of Chelmsford, so I am not picking on Ugley. But the only real way to solve the housing shortage, and the poverty trap which is inevitably linked with it, is to release more land for housing, and accept the uglification of Ugley, or of other places like it. But are the rich village dwellers of Essex prepared to give up their rural idylls so that the poor of the county can have somewhere to live without getting into the debt trap? The key to that may be in John’s byline goal “Towards the Conversion of Uttlesford”, and similarly the rest of Essex, this country and the world. For until hearts are converted wallets never will be.

0 thoughts on “Christian lending and the uglification of Ugley

  1. OK so I’m a little late getting round to reading this, but I wanted to say “thank you” Peter, for this fine analysis of the ethical status of interest etc. As a follower of Jesus I run two businesses, one of which is involved in property, the other works with large corporations. I have always understood interest on a loan to reflect risk, temporary loss of capital, loss of opportunity (due to loss of capital), and also to adjust for the decreasing value of said capital (inflation). As long as these are sensibly set, I don’t see a problem with interest per se.

    Personally however, I do recognise something wrong about a debt-based society, where debt creates obligations, liaiblitys, and in someways, the one who receives the loan is a slave to the one who gave it. I prefer to “give without hope of return”, as Jesus said, and gift money to people rather than loan it. I haven’t attempted to work out a theology to analyse all of this, I just know that:

    – on a personal, microscale, giving gifts is my personal preference

    – on a business level, I have no problem with the concept of interest.

  2. Thanks, Alastair. I’m glad you have reappeared on the scene. I think I more or less agree with you. I prefer to give to individuals than to lend. As far as banks etc are concerned, I don’t see any problem in making them in some sense my slave. But, as you can read here, I have now decided to invest my money in a house which I can make available to people in need.

  3. Pingback: ugley

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