Some Biblical Economics

An informal essay for my Intro to Microfinance class at Eastern University, composed 6/9/08.
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What does the Bible have to say about interest rates? Though this specific question is not one I've spent much time pondering, it falls within the broader inquiry, What are biblical economics? The answer – if there is indeed an answer – is fodder for a dissertation and hardly a three-page essay. Nevertheless, I will attempt to quickly sketch my views and wherever possible, apply them to what I know of work in the microfinance industry. My first instinct, as a student of the digital age, was to begin by doing a word search of the Bible for the word “interest”. Though this turned up some intriguing passages, I was also reminded of the dangers of “proof-texting” - using short Bible texts out of context to justify a particular opinion. Instead, I prefer to read the Bible as metanarrative – a unified story that conveys a set of themes that apply to life. Thus, the passages cited represent a semi-random sampling of references to Bible-wide themes like shabat (sabbath) and charis(grace) that in turn have implications for the use of interest rates in microfinance institutions.

Biblical scholar, Ched Myers, asserts that one of the first major economic lessons of the Bible comes when the Israelites, under the leadership of Moses, have escaped the Egyptian empire and are preparing to enter their own promised land. The story of the manna in Exodus 16 contains at least three major injunctions for the new covenental society, frameworks that are later applied throughout the Bible (e.g., by the apostle Paul in 2 Corinthians 8:14-15). The first of these comes in verses 16-18, when the Lord gives Moses the command, “Each one is to gather as much as he needs.” “As much,” or “enough,” is a complicated concept, but there is a clear relativity to it. More surprisingly, the relativity of God's provision is based on need, not achievement, inheritance, or faith. Myers responds to this first injunction with the comment:

• The Bible recognizes that inequalities will inevitably arise in "fallen" society—a realism it shares with the worldview of modern capitalism. Unlike the social Darwinism of the latter, however, the biblical vision refuses to stipulate that injustice is therefore a permanent condition. Instead, God's people are instructed to dismantle, on a regular basis, the fundamental patterns and structures of stratified wealth and power, so that there is "enough for everyone." (Myers₁ 24)

The second principle of the manna story comes in verses 19-20, when the Israelites are told not to store up any of God's miracle food for the next day. When compared to the normal practices of today's society, this lesson appears ludicrous. Yet it is repeated throughout scriptural law and parable, for manna – like mammon – is not ours to hoard. If we do, it crawls with maggots and rots! Finally, Exodus 16 addresses a concept begun in Genesis 1 – that of sabbath discipline. In verses 22-30, God instructs the desert-wanderers to take an extra days' shares on the sixth day so that they can rest from the work of gathering on the seventh. Together, these three principles outline what Myers terms “sabbath economics,” and they can be seen applied specifically to the concept of interest as the Hebrew Bible continues.

Passages of Mosaic law referring directly to the charging of interest include Exodus 22:25, Leviticus 25:36-37, and Deuteronomy 23:19-20. In summary, they all say, “charge no interest.” They do qualify this statement by suggesting that it only applies to “countrymen” or fellow Israelites, which makes sense in the Hebrew Bible context of God focusing blessings and rebukes on a chosen group of people. It is notable, however, that none of the passages says “excessive interest” or “usurious interest” - just “interest.” The children of God are induced to differentiate themselves from the moneylenders, who presumably use interest rates to exploit the poor. The instructions to not charge interest come amidst warnings to not mistreat foreigners, not take advantage of widows and orphans (the helpless), and not blaspheme God. The best contextual justification given for this command – aside from its alignment with the sabbath principles stated above – is the statement, “I am the Lord your God, who brought you out of Egypt to give you the land of Canaan and to be your God” (Leviticus 25:38). In other words, charging interest is like selling a birthday present for profit – it's the ultimate insult you can pay to the gift-giver.

References to interest rates also appear in the Hebrew Bible's poetic and prophetic books. Proverbs 28:8 reads, “He who increases his wealth by exorbitant interest amasses it for another, who will be kind to the poor.” Like many of the proverbs, this is a bit of a paradoxical riddle; the essence is that wealth belongs to the righteous, not the hoarder. It is not much different than the manna of Exodus, which gets to be infested with maggots if too much is gathered. In Ezekiel 18 and 22, these concepts are echoed once again. The prophet explains God's picture of a man who is righteous and just, saying:

• He does not oppress anyone, but returns what he took in pledge for a loan. He does not commit robbery but gives his food to the hungry and provides clothing for the naked. He does not lend at usury or take excessive interest. He withholds his hand from doing wrong and judges fairly between man and man (Ezekiel 18:7-8)

An NIV note remarks that “excessive interest” is an extrapolation; it could also be translated “interest.” The righteous man does not oppress with interest, but simply takes and returns some piece of collateral with a loan. This has deep implications if taken at face value in the microfinance industry.

Jumping ahead to the New Testament, there are a couple of Jesus' parables that are often used to juxtapose the Hebrew laws cited above and legitimate interest and other investments. As a caveat, I acknowledge that my interpretation of these parables is rare, so it may be wrong, but I will present it nonetheless and welcome scrutiny. The first of these parables is that of the master who gives some of his servants each a quantity of money. In Matthew 25, the money is in talents, and in Luke 19, it is in minas; both amount to at least several months worth of wages. Several of the servants “put their money to work” (Matthew 25:17) and double their returns, but the one who doesn't is chastised by the master for being wicked and lazy. Usually, the parable is interpreted allegorically, with the master equaling God, who tells the finance-savvy, “Well done, my good and faithful servant[s]” (Matthew 25:21,23).

Ched Myers suggests, however, that this popular interpretation is backwards. Instead, this parable is about what not to do in the kingdom economy. What is his evidence? Item 1: “'Master,' he said, 'I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed” (Matthew 25:24). Does this scoundrel sound like God? Item 2: “You should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest” (Matthew 25:27). Does this fit with the Hebrew Bible's injunctions about interest and storing up treasures? Item 3: “Everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him” (Matthew 25:29). Does this sound like the God we know from Jewish history – a God of the underdog, who loves justice and mercy? Another important clue for interpreting this passage is its context. In Matthew, this story comes amidst the parable of the virgins and the metaphor of the sheep and the goats – stories about being prepared for the kingdom of God by taking care of the least among us. In Luke, the story is sandwiched between the account of Zaccheus, a tax collector who gave half his possessions away to the poor, and Jesus' triumphal entry into Jerusalem, another symbolic reference to the ushering in of God's reign on earth. All in all, Myers' interpretation just makes more sense in the metanarrative. He sums it up, saying, “This reading understands the servant who refused to play the greedy master's money-market games as the hero who pays a high price for speaking truth to power (Matthew 25:24-30)—just as Jesus himself did” (Myers₂ 38).

Luke 16's parable of the shrewd steward offers a similar dilemma. This story, too, is usually taken as an allegory with the master being God. This time, I suggest turning it inside-out without Myers' help. My evidence? Item 1: “There was a rich man whose manager was accused of wasting his possessions” (16:1). Again, does this manager (the steward) sound like a righteous, godly fellow? Item 2: “The master commended the dishonest manager because he had acted shrewdly” (16:8). Not only is he being commended for acting shrewdly (which might have its place in the kingdom), but the steward is again referred to as dishonest. This is hardly a case of someone redeeming themselves in God's eyes. Item 3 (which is not exactly subtle):

• "Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else's property, who will give you property of your own? No servant can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.” The Pharisees, who loved money, heard all this and were sneering at Jesus. He said to them, “You are the ones who justify yourselves in the eyes of men, but God knows your hearts. What is highly valued among men is detestable in God's sight." (Luke 16:10-15)

This passage that follows the parable implies with utter clarity that Jesus does not want the disciples to imitate the ways of the world when it comes to financial matters, including interest rates. Luke even offers the commentary that the Pharisees “loved money” so that his readers will be perfectly clear who the parable was meant for. In addition, the context of this story is amidst those of the prodigal son and the rich man and Lazarus, which offer messages about reckless, wasteful love and one's place in heaven being dependent on one's service to the poor. The frequency with which these parables are used to justify the hallmark tenets of our modern capitalist economy is frankly a bit disturbing.

In conclusion, the Bible doesn't spend whole books detailing how interest should be dealt with in microfinance institutions, but it leaves an abundance of clues, both big and small. On the small end, one-line injunctions in Hebrew law, the Proverbs, and the teaching of the prophets all say that interest of any kind is forbidden, at least within the Israelite community. On the big end, principles woven throughout scripture such as sabbath, grace, forgiveness, justice, and faith hint that the needs of the poor should be a priority, earthly treasures stand in the way of heaven, and the best form of stewardship is faithfulness and honesty. What, then, is the bottom line about interest rates? Should microfinance institutions take donor subsidies so that they can charge 15% or less, or should they ask for 30% so that they can survive without outside help? Or should we forget microfinance entirely and just focus on charity, because interest in any form is sinful? From the evidence presented above, it is hard to see anything good about interest at all. It is thanks to an interest-bearing loan, though, that I am even able to attend Eastern University and learn about this important topic! So I want to believe that God speaks in parables for a reason, and that scripture is best applied according to its big-picture themes. Perhaps rather than proposing a development plan and then asking whether the Bible fits into it, we should be starting with biblical concepts like sabbath, grace, forgiveness, justice, and faith and letting the ultimate Sculptor mold us accordingly.

Works Cited

Holy Bible. New International Version. International Bible Society, 1984.

Myers_1, Ched. “God Speed the Year of Jubilee!” Sojourners Magazine. Vol. 27, No. 3. May-June 1998, pp. 24-28.

Myers_2, Ched. “Jesus' New Economy of Grace.” Sojourners Magazine. Vol. 27, No. 4, July-Aug 1998, pp. 36-39.