Renz's Thesis No. 2 - "Interest-bearing loans were prohibited within Israel's polity."

I affirm Thomas’s second Thesis as stated. However, his elaboration of the Thesis brings out nuances that I do not affirm. In the first place, his emphasis seems to be upon the phrase, “within Israel’s polity,” as though to imply that outside Israel’s polity another rule holds. Indeed, he refers the reader forward to a subsequent Thesis wherein this point is made more plainly. Secondly, while he admits that Deuteronomy 23:19 issues a blanket condemnation of usury, he regards this as an oddity that must be explained.

At the conclusion of his discussion of Thesis No. 1, Thomas quite helpfully cites Barry Gordon to the effect that, “…it is difficult to discover unambiguous differentiation of business and consumption loans in the literature of antiquity.” Thomas nevertheless would like to define “charitable” loans vs. “commercial” loans with sufficient precision to serve a point of law. He claims, for example, that in the Exodus and Leviticus prohibitions only “charitable” loans are in view. Thus, for Thomas, the blanket prohibition of usury on all loans without distinction in Deuteronomy becomes something to be explained.

It will be useful to survey Thomas’s proposed explanations, but the first thing to be noted is that he speaks of investment and loan as virtually synonymous. This confusion of concepts is the popular outlook in our day, and is nothing new or particular to Thomas. It is just this sort of confusion that makes discussion of usury difficult. For example, it was this confusion that led to Thomas’s misunderstanding of the Edict of Ammisaduqa, as explained above. Usury arises in a contract of loan. It is a fee that is imposed, which the borrower must pay in addition to the loan principal. Investment, properly understood, is not a loan. Investment is money or other property given by a party to a joint venture. His “return” on an investment is calculated by agreed terms, and may or may not exceed the amount of the original principal invested, depending upon the degree of success of the venture.

Thomas offers a number of possible explanations for the blanket prohibition of usury in Deuteronomy. He says, first, that “Opportunities for investment in an expanding business were likely rare in ancient Israel; a complete prohibition would not have a major effect on the economy, while protecting the weak from any attempts to dress up what should be interest-free charitable loans as commercial loans.” It will be necessary to assess this proposal allowing for the confusion of investment and loans, as explained above. What is immediately striking in this proposal is that it speaks of commercial lending in Ancient Israel as “likely rare,” whereas Thomas’s prior Thesis was concerned to establish such lending as a common practice. Also, Thomas implies that a prohibition of usury on commercial lending would be bad for “the economy,” and argues that such a prohibition might have worked in Ancient Israel just because commercial lending was rare. But a view that a prohibition of usury is bad for “the economy” is one that cannot simply be taken for granted when reading the Old Testament.

Next, Thomas proposes that, “It fits with the general ethos of the covenant community envisaged in the Torah that investment at a distance without partnership would be discouraged. Associates who share risks as well as opportunities form a closer-knit community than business ‘partners’ whose only link is the actual loan.” If he had not already demonstrated a confusion of the categories of investment and loan, this proposal might have been taken as an argument for doing business as an investor rather than as a lender. Indeed, a blanket prohibition of usury certainly would have the effect of promoting commercial investment and discouraging commercial lending. Once the proper distinction is observed between lending and investing, this proposed explanation of Thomas for a blanket prohibition amounts to stating only the perfectly obvious.

Finally, Thomas says, “It is possible that interest-bearing loans are considered wrong in itself. But this seems to me ruled out by the permission of such loans to a nokri.” Here he alludes to Deuteronomy 23:20, where the text states that “you may charge interest to a foreigner [nokri].” Thomas then promptly refers the reader to his Thesis No. 4. It is at this point that it becomes clear that Thomas’s acknowledgement of the blanket prohibition of usury “within Israel’s polity” stands in vivid contrast to a different rule he sees operating outside Israel’s polity. In keeping with the flow of the Theses as Thomas has laid them out, I too shall defer further comment to discussions that are to follow.