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Introduction to Changing Attitudes Towards Usury
- The history of usury (interest) and its moral implications in the Western world
- The transformation from a view of usury as a sin to a necessary economic practice
Martin Luther and Usury
- Luther condemned usury but recognized it as a practical reality in the sinful world
- Advocated for government regulation, acknowledging the need for interest while maintaining moral opposition
John Calvin’s View on Usury
- Calvin believed that usury was not inherently sinful and justified it as a necessary part of business
- Shifted views on usury, permitting it in the course of business but still opposing the profession of moneylending
The First Legal Recognition of Interest (1545)
- Parliament in England acknowledges interest as an economic reality and sets limits on it (initially 10%, later reduced to 5%)
- The recognition of interest as part of trade, but with moral concerns still at the forefront
Shakespeare’s The Merchant of Venice
- Depiction of usury in Shakespeare’s work, reflecting the ongoing debates about its morality
- Shylock, a Jewish moneylender, represents the morally suspect view of usury
- Christian moneylenders contrast with Shylock, highlighting the tension between business and morality
The Renaissance and Enlightenment Shift in Economic Thought
- Shift from moral condemnation to economic recognition of the role of interest in facilitating trade
- Emergence of new ideas on how interest is connected to property rights, risk, and the time value of money
Theories of Interest and Economic Growth
- Turgot: Interest as compensation for time, recognizing that time changes the value of money
- Jeremy Bentham: Advocates for the freedom of interest rates, highlighting the economic benefits of unrestricted lending