You shall not deduct interest from
loans to your countrymen, whether in money or food or anything else
that can be deduced as interest, but you may deduct interest from loans
to foreigners. Do not deduct interest loans to your countrymen, so that
the Lord your God may bless you in all your undertakings in the land
that you are about to enter and possess. (Deut.
23:20-21) |
The laws
about loans must be understood in the light of the simple agrarian economy
of ancient Israel. There is no evidence that there was a money market of any
significance, or that solvent Israelites commonly borrowed for commercial
or other purposes, though a couple of passages imply that not all borrowers
were poor.[1]
The type of loans with which the Torah regularly deals is charitable loans
to countrymen who have fallen on hard times. This is clear from the statements
of the present law in Exodus and Leviticus, which explicitly refer to the
borrower as impoverished.
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If
your kinsman being in straits, comes under your authority…do not
exact from him advance or accrued interest, but fear your God.... (Leviticus
25:36-37)
If
you lend money to My people, to the poor among you, do not act towards
them as a creditor: exact no interest from there.
(Exodus 22:24 )
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Under these
circumstances, lending is a moral obligation incumbent on those who can afford
it, and it is to be done without further increasing the borrower's poverty
by requiring interest, which could be ruinous.[2]
As Josephus puts it, "It is not just to draw a revenue from the misfortunes
of a fellow-countryman. Rather, in succoring his distress, you should reckon
as gain the gratitude of such persons and the recompense which God has in
store for an act of generosity." Lending without interest is frequently
listed among important virtues and praised as an act of generosity, and exacting
interest is condemned.
Although
interest-free loans are sometimes mentioned in Mesopotamian texts, no prohibition
on interest is known from the ancient Near East, possibly because the sites
from which we have documentation had more developed commercial economies.
There is an interesting letter from Ugarit in which the writer claims that
gentlemen do not demand interest of each other. Greek philosophers opposed
interest, and it was periodically forbidden in early Rome. As economies developed
and money began to play a more important role, the prohibition of interest
became impractical, and the halakhah [religious law] devised legal means for
circumventing it. Eventually the prohibition was restricted to the realm of
charitable loans, in keeping with its original purpose.[3]
Since Exodus
22:24 and Leviticus 25:35-37 refer to loans to the poor [unlike the verse
in Deuteronomy], some scholars believe that interest was first prohibited
only on loans to them, and that Deuteronomy is the first to protect all Israelite
borrowers from interest. However, non-legal passages consistently regard the
taking of interest from one's countryman as wrong, without differentiating
between solvent and poor borrowers, and it is unlikely that exacting interest
from solvent people, on the rare occasion when they might borrow, was ever
acceptable. Most likely Exodus and Leviticus specify the poor simply because
it was they who normally borrowed.
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[1]
Exod. 22:24; Deut. 24:2 [back]
[2] Rates of 20 to 25 percent for silver and 33 1/3
to 50 percent for grain were common in the ancient Near East, and
higher rates were known. [back]
[3]
With the development of a money economy, industry,
and trade, Jewish practice evolved —
albeit against long resistance —
a legal fiction known as hetter iska, whereby a loan is contracted
in the form of a partnership. Although this procedure is considered
legitimate for business transactions and investments, loans to a person
in need are still required to be free of interest. [back]
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Jeffrey
H. Tigay, editor and commentator, The JPS Torah Commentary: Deuteronomy
(Philadelphia: Jewish Publication Society, 1996).
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