Excellent article. Setting aside the point on extending interest-free credit as a form of charity, to those opposed to interest of any kind, what is the incentive for extending credit? Anyone who lent $ to someone who doesn't need it (i.e. is poor) but instead merely wants it (e.g. to buy a house, build a business, etc) would be foolish indeed. And to suggest that forgoing borrowing for a home or business is equally foolish in this reader's opinion. Again, great essay!
Thank you. I've listened to a number of traditionalist Catholics who still believe all interest is wrong, and they tend to be heavy on bashing doctrinaire libertarians and light on any substantial positive vision. Be that is it may, I would guess that, because they have no problem with interest exacted on capital goods (a la Aquinas' house), they would propose that instead of borrowing money to buy a house, one would apply to a home building company to build the house and then pay them back an agreed upon amount. This is not only inefficient, but it also defeats the major purpose of prohibiting interest (which would be to keep richer people from profiting from poorer people) as it puts all the power in transactions in the hands of the ones who presently have capital. Or, to put it more simply, when you remove someone's ability to exchange future money for present money, this succeeds only in profiting those who presently have money.
Excellent article. Setting aside the point on extending interest-free credit as a form of charity, to those opposed to interest of any kind, what is the incentive for extending credit? Anyone who lent $ to someone who doesn't need it (i.e. is poor) but instead merely wants it (e.g. to buy a house, build a business, etc) would be foolish indeed. And to suggest that forgoing borrowing for a home or business is equally foolish in this reader's opinion. Again, great essay!
Thank you. I've listened to a number of traditionalist Catholics who still believe all interest is wrong, and they tend to be heavy on bashing doctrinaire libertarians and light on any substantial positive vision. Be that is it may, I would guess that, because they have no problem with interest exacted on capital goods (a la Aquinas' house), they would propose that instead of borrowing money to buy a house, one would apply to a home building company to build the house and then pay them back an agreed upon amount. This is not only inefficient, but it also defeats the major purpose of prohibiting interest (which would be to keep richer people from profiting from poorer people) as it puts all the power in transactions in the hands of the ones who presently have capital. Or, to put it more simply, when you remove someone's ability to exchange future money for present money, this succeeds only in profiting those who presently have money.