Usury vs. loans - what's the difference?

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Tojiah's picture
Tojiah
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Apr 8 2007 23:33
Usury vs. loans - what's the difference?

I'm reading Abram Leon's book which I've mentioned earlier (The Jewish Question: A Marxist Interpretation), and a very basic issue there is how usury is an archaic vestige of natural economy, while loaning with interest from modern banks is somehow more suitable for the development of capitalism --- the former does not contribute to the development of the means of production, while the latter does.

I'm having a hard time making heads or tails of this. Could use some help.

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fnbrill
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Apr 9 2007 05:42

Interesting pamphlet. As or your question:

In marxian understanding of capitalism, a capitalist business produces commodities for profit.

Leon's point is that lending in pre-capitalist societies didn't become capital producing commodities on speculation. A usuerer lends money to a noble to finance extravagent living, war, etc. The usuerer also lends money to an artisan who produces goods not commodities. Also to a peasant, so they can pay their taxes.

A banker loans money on interest to businesses to give them the capital to start (or continue) to produce commodities/products for sale.

Hope this helps,

M

Tojiah's picture
Tojiah
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Apr 9 2007 20:10

What's the distinction between goods and commodities?

Banks loan to individuals in order to pay debts, etc, under capitalism.

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fnbrill
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Apr 9 2007 20:38

Goods = products crafted for use. for example Coopers built barells on order rather than to sell to distributors to place in stores where (as commodities) they hope they sell.

Quote:
Banks loan to individuals in order to pay debts, etc, under capitalism.

Perhaps that explains usurous rates of interest on Credit Cards...

Mike Harman
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Apr 9 2007 21:01
tojiah wrote:
I'm reading Abram Leon's book which I've mentioned earlier (The Jewish Question: A Marxist Interpretation), and a very basic issue there is how usury is an archaic vestige of natural economy, while loaning with interest from modern banks is somehow more suitable for the development of capitalism --- the former does not contribute to the development of the means of production, while the latter does.

I'm having a hard time making heads or tails of this. Could use some help.

The way the money's used is obviously different, I don't see that the actual act of lending money is any different though. Same as rent and taxes work a little differently in modern capitalist society (especially when talking about businesses), but they've not fundamentally changed I don't think.

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georgestapleton
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Apr 10 2007 00:40

Don't know the book you're reading but to answer the question: Usury vs. loans - what's the difference?

Loans are loans can take a number of forms. If i lent a friend a tenner, I would expect no more no less than a tenner back, i.e. I wouldn't charge interest. But it would still be a loan.

Usury is lending money at interest. Usury (lending money at interest) was banned by the catholic church. But as capitalism developed then the ban was avoided, gotten around, and then, as far as i know, scraped.

Usury is still considered widely against the laws of islam. Banks get around this by saying that when the lend people money they aren't lending money they are making an investment, so the return is a profit not interest. Profit and interest are just different forms of surplus value after all. The irony of course is that at the time of mohammed the dominant form of capital was mercantile capital, so the ban on usury was in some way a ban on capital. Religion is stupid. Oh well.

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Apr 10 2007 00:48
tojiah wrote:
What's the distinction between goods and commodities?

There is no hard an fast definition of a good.

Goods are sometimes defined as anything that provides utility, i.e. something that is 'good'.

Sometimes goods are distinguished from services, so a good is a physical commodity, or more loosely a physical produced thing, or even more loosely a physical thing.

A commodity is anything that commands a price.

So in short they are synonymous, the only difference is that 'commodity' has a tighter definition.

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Apr 10 2007 00:57

Actually I'm after looking at the book. Can I ask you why you are reading it. It seems really dated. Is this one of those marxist 'classics' you don't hear about.

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Tojiah
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Apr 18 2007 21:00
georgestapleton wrote:
Actually I'm after looking at the book. Can I ask you why you are reading it. It seems really dated. Is this one of those marxist 'classics' you don't hear about.

I just found it on the shelf at a local infoshop. I guess I got to reading it as part of an antidote for all that Zionist crap I was taught at school.

The reason I asked about this usury vs. loans business is that I can't understand why Jewish usurers would find it so difficult to simply remain bankers providing loans in the post-feudal world. I thought maybe there's something I'm missing that's specific to either usury or loans that prohibits the other.

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Entdinglichung
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May 18 2009 11:17

in the 17th century in Germany, the difference was that bankers from the nobility had the political and economic power to declare their usury to be interest-free loans, they officially never claimed interests by only paying out ~ 75-80% of the amount mentioned in the contracts and accounts; Italian, Jewish or Flemish bankers weren't permitted to act in this way in many German principalities

Anarcho
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May 18 2009 13:17

"usury is an archaic vestige of natural economy, while loaning with interest from modern banks is somehow more suitable for the development of capitalism"

Usury is loaning money and charging interest for it. So modern banks practice usury. The term has changed somewhat with the rise of capitalism and the need to present charging interest as acceptable. Now-a-days, usury means charging excessive interest on a loan.

In the anarchist tradition, usury generally has a wider meaning -- namely, charging for the use of anything (not just money). Thus paying rent on a house would be usury as you are paying for the privilege of using it. Profit, like other forms of surplus value, can be considered usury as well -- workers do not receive the full value of their labour, which accumulates in the hands of the capitalist. Profit, in other words, is the price paid for workers to gain access to the means of production.

Thus, for example, we find Benjamin Tucker stating that "interest, rent, and profit . . . constitute the trinity of usury."

bendjamin
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Nov 16 2009 13:08

Usury originally meant the charging of interest on loans. This would have included charging a fee for the use of money, such as at a bureau de change. After countries legislated to limit the rate of interest on loans, usury came to mean the interest above the lawful rate. In common usage today, the word means the charging of unreasonable or relatively high rates of interest.

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In cash loans, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.

So, imho, Usury and Loan are similar terms.

Stan Milgram
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Jan 2 2013 01:29

Interest.