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The Evil of Interest

I've been doing some crash reading on economics, trying to get my head around the insanity of our economic situation.

As I sifted through this information, it suddenly hit me that lending money on the condition that it be paid back with interest is morally wrong. It is inconsistent with reciprocal altruism, the principle underlying cooperative behavior between non-relatives. The idea of reciprocal altruism is that I do you a favor with the expectation that you would do the same for me, and, in the future you (or someone else in the group) will do something for me of equal value. It is tit-for-tat, not, "I'll give you some food if you give me 20% more than what I shared with you."

Today, have-nots in society are forced to borrow from those who have, for a price. Someone who is born into a wealthy family can sit back, living off the interest gained from lending, while producing nothing of value. We've come a long way (in the wrong direction IMHO) from the days of reciprocal altruism.

Actually, the situation is even more despicable than I just described. The financiers of today are no longer lending money backed by actual property of value. They loan money that they do not have. They gamble, hoping to gain on the losses of others. It's a dirty, evil business.

Comments

( 11 comments — Leave a comment )
kk0isonlymyname
Oct. 25th, 2008 02:33 am (UTC)
That's a very Islamic thing you just said about interest.
skepoet
Oct. 25th, 2008 03:51 am (UTC)
To be fair, Christians and Jews believed that before the Reformation too--Islam just hasn't made such concessions to economics.
hostirad
Oct. 25th, 2008 04:07 am (UTC)
I did recently watch a video in which they quoted some passage from the Bible indicating that people should not collect interest.

Not that I need the Bible to support the way I feel.
skepoet
Oct. 25th, 2008 04:08 am (UTC)
The definition of usury gets changed every few years until it was literally rendered meaningless in the Christian tradition.
hostirad
Oct. 25th, 2008 04:05 am (UTC)
Cool.
skepoet
Oct. 25th, 2008 03:50 am (UTC)
You know for a hardcore libertarian, you don't read like one. Schumpter was right that the finance sector tends towards corporatism in the long run because of the nature of interest and speculation games. So I suppose to be a true anarch-capitalist, one has to believe in de-corporatization.

Edited at 2008-10-25 03:52 am (UTC)
hostirad
Oct. 25th, 2008 04:08 am (UTC)
I've always been a left-leaning libertarian with a soft spot in my heart (or head) for the poor.
skepoet
Oct. 25th, 2008 04:39 am (UTC)
If that was the capitalism that most people supported, I think I would be an anarcho-capitalist.
(Deleted comment)
skepoet
Oct. 26th, 2008 06:45 pm (UTC)
In the UK, there's a longstanding (but somewhat obscure) branch of the liberal tradition that holds that land cannot be owned; we do not own the earth, we merely inhabit it, so land should only be leasable for limited duration

Henry George believed a similar thing here.
(Deleted comment)
hostirad
Oct. 25th, 2008 02:48 pm (UTC)
True, it would be harder for a business to raise capital. I think I could live with slow growth.
skepoet
Oct. 26th, 2008 06:46 pm (UTC)
I think we should slow growth for resource consumption reasons and slowing it without state coercion is ideal.
( 11 comments — Leave a comment )