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"Usury" is a word that's gone out of fashion, but sometimes I wonder why, because this is clearly it. "Loan to the desperate poor in a way calculated to fuck

"Usury" is a word that's gone out of fashion, but sometimes I wonder why, because this is clearly it. "Loan to the desperate poor in a way calculated to fuck them over for ever" is explicitly bad, and that we've had to keep yelling this out loud over and over for near as I can tell the entire duration of written history is not a heartening fact.

Rainymood 8y ago
Just playing the Devil's advocate here, why is this bad if profit and growth is the ultimate motive?
- hprotagonist 8y ago
  pragmatically: if you sow the wind it’s only a matter of time before you reap the whirlwind. It’s counterproductive if sustainability of growth is your aim. Predatory behavior will, eventually, blow up in your face. If individual companies do this eventually someone will step on their necks. If nation states do this at scale, eventually the people won’t take it any more. morally: because it is bad for profit and growth to be the ultimate motive just as soon as it requires you to treat people as things. The economy is a fine servant and a terrible master.
  - gowld 8y ago
    This is wishful thinking. Predatory lending is bad for consumers, not for businesses.
    - hprotagonist 8y ago
      “bad for consumers” is my moral objection. But people here seem to object to flat moral objections, so i tried to offer a pragmatic CYA reason too.
    - NeedMoreTea 8y ago
      Until the default rate of bad loans turns into a banking crisis.
- deleted 8y ago
  [deleted]
- justin66 8y ago
  > Just playing the Devil's advocate here, why is this bad if profit and growth is the ultimate motive? People who have shifted into a permanent state of servicing high-interest debt tend to be useless to the economy once they've entered that state. Unable to consume much (and this is still a consumer economy), unable to train for new work, probably overrepresented in public welfare programs for which others foot the bill. Literally the only "profit and growth" involved is for whoever holds the debt. The overall economic effect beyond a few big bondholders is quite negative.
- ineedasername 8y ago
  If profit is the ultimate motive then sure, these aren't bad. But there are all sorts of things the government regulates that, absent regulation, might result in higher business profits. They're regulated because they're seen to be a social good and/or in the interest of public health and safety. Just about any law might serve as an example here: Murder isn't allowed, even though it might be very good for a business that offered it as a service, or a business that endeavored to literally kill off its competition. That's admittedly an extreme example, so consider some a bit more banal: food quality regulation and ingredient label laws, or safety features built into cars. The entire concept of law intrinsically, implicitly, exists to limit some behavior that might be advantageous to one person or group but not to others or society as a whole. And so once you accept that laws of any sort are a necessary part of society, you're no longer arguing about something like whether or not laws and regulations should impinge upon a free market pursuit of profit-- that is a given. Instead, you're simply arguing about where the line should be drawn.
chosenbreed37 8y ago
> "Usury" is a word that's gone out of fashion, but sometimes I wonder why, because this is clearly it. Isn't it called "interest"? I take your point though. Usury sounds a bit dirty :)
- hprotagonist 8y ago
  it originally seems to have meant “any interest at all”, but in the context of that time, it meant “charging interest in a way that’s guaranteed to create debt slaves”
- deleted 8y ago
  [deleted]
- jerf 8y ago
  I found this a very interesting discussion: https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/ https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-... (And I'm not Catholic.) But in short, if I'm getting this correct, usury is lending for which the recourse of the loan is not limited to some specific and concrete piece of collateral. A home mortgage is not usury, because the recourse for the loan is repossession, and the loaner does not (in the ideal case) have any further ability to claw away assets away from you. A critical aspect of this is that the lendee is not in any sense enslaved by this loan, because in the worst case scenario, they walk away from the loan, the home is repossesed, and the case is closed, and life goes on. (Your credit rating will also take a hit. One could quibble around the edges about this, but I suspect that news of the fact you fail to honor your loan obligations is going to get around one way or another, even in an older era.) Sure, it sucks that they may have lost their home, but at least they are not carrying that burden forward and are not a slave. I'm speaking of the standard modern US home loan. All it would take for them to become usurious is to start including clawback provisions above and beyond the collateral, and while I'm not specifically aware of that happening, I'd personally lay money there's someone out there making such loans. I suspect some payday loans are usurious, and some may not be, but I gather most of them have substantial or unlimited recourse to recover their monies? Student loans are usury; there is nothing that can be repossessed. Our government is a full and willing participant in the usury, providing the money, special dispensation that such loans are very hard to discharge even in bankruptcy, and the incredibly self-serving Public Service Loan Forgiveness program: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell... , which is totally not debt slavery how dare you think our government engages in that, it's just a friendly loving way of getting your loans forgiven if you spend ten years working for them in an approved manner. Note that "outrageous interest" isn't necessarily part of the deal; the recourse for that is to simply not take such a loan. Non-usurious lending with outrageous interest rates still doesn't enslave you, because you can walk away forfeiting the collateral, and you have a clean slate. An usurious loan even with a seemingly low interest rate (or hidden fees or whathave you) can still enslave you.
elliekelly 8y ago
The average person would be appalled at the "exemptions" to usury laws in most states. California, for example: - Banks - Credit Cards - Retail installment contracts - Pawn brokers - Licensed lenders And guess what a "licensed lender" is? Anyone who has a net-worth of $25,000 who files a form with the DBO. Functionally, Usury laws only apply to the mob.
gowld 8y ago
It's called "predatory lending" now, in part because the mechanisms or more clever (including hacking the legal system) than simply charging high interest.

Rainymood 8y ago

Just playing the Devil's advocate here, why is this bad if profit and growth is the ultimate motive?

hprotagonist 8y ago
pragmatically: if you sow the wind it’s only a matter of time before you reap the whirlwind. It’s counterproductive if sustainability of growth is your aim. Predatory behavior will, eventually, blow up in your face. If individual companies do this eventually someone will step on their necks. If nation states do this at scale, eventually the people won’t take it any more. morally: because it is bad for profit and growth to be the ultimate motive just as soon as it requires you to treat people as things. The economy is a fine servant and a terrible master.
- gowld 8y ago
  This is wishful thinking. Predatory lending is bad for consumers, not for businesses.
  - hprotagonist 8y ago
    “bad for consumers” is my moral objection. But people here seem to object to flat moral objections, so i tried to offer a pragmatic CYA reason too.
  - NeedMoreTea 8y ago
    Until the default rate of bad loans turns into a banking crisis.
deleted 8y ago
[deleted]
justin66 8y ago
> Just playing the Devil's advocate here, why is this bad if profit and growth is the ultimate motive? People who have shifted into a permanent state of servicing high-interest debt tend to be useless to the economy once they've entered that state. Unable to consume much (and this is still a consumer economy), unable to train for new work, probably overrepresented in public welfare programs for which others foot the bill. Literally the only "profit and growth" involved is for whoever holds the debt. The overall economic effect beyond a few big bondholders is quite negative.
ineedasername 8y ago
If profit is the ultimate motive then sure, these aren't bad. But there are all sorts of things the government regulates that, absent regulation, might result in higher business profits. They're regulated because they're seen to be a social good and/or in the interest of public health and safety. Just about any law might serve as an example here: Murder isn't allowed, even though it might be very good for a business that offered it as a service, or a business that endeavored to literally kill off its competition. That's admittedly an extreme example, so consider some a bit more banal: food quality regulation and ingredient label laws, or safety features built into cars. The entire concept of law intrinsically, implicitly, exists to limit some behavior that might be advantageous to one person or group but not to others or society as a whole. And so once you accept that laws of any sort are a necessary part of society, you're no longer arguing about something like whether or not laws and regulations should impinge upon a free market pursuit of profit-- that is a given. Instead, you're simply arguing about where the line should be drawn.

chosenbreed37 8y ago

> "Usury" is a word that's gone out of fashion, but sometimes I wonder why, because this is clearly it. Isn't it called "interest"? I take your point though. Usury sounds a bit dirty :)

hprotagonist 8y ago
it originally seems to have meant “any interest at all”, but in the context of that time, it meant “charging interest in a way that’s guaranteed to create debt slaves”
deleted 8y ago
[deleted]
jerf 8y ago
I found this a very interesting discussion: https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/ https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-... (And I'm not Catholic.) But in short, if I'm getting this correct, usury is lending for which the recourse of the loan is not limited to some specific and concrete piece of collateral. A home mortgage is not usury, because the recourse for the loan is repossession, and the loaner does not (in the ideal case) have any further ability to claw away assets away from you. A critical aspect of this is that the lendee is not in any sense enslaved by this loan, because in the worst case scenario, they walk away from the loan, the home is repossesed, and the case is closed, and life goes on. (Your credit rating will also take a hit. One could quibble around the edges about this, but I suspect that news of the fact you fail to honor your loan obligations is going to get around one way or another, even in an older era.) Sure, it sucks that they may have lost their home, but at least they are not carrying that burden forward and are not a slave. I'm speaking of the standard modern US home loan. All it would take for them to become usurious is to start including clawback provisions above and beyond the collateral, and while I'm not specifically aware of that happening, I'd personally lay money there's someone out there making such loans. I suspect some payday loans are usurious, and some may not be, but I gather most of them have substantial or unlimited recourse to recover their monies? Student loans are usury; there is nothing that can be repossessed. Our government is a full and willing participant in the usury, providing the money, special dispensation that such loans are very hard to discharge even in bankruptcy, and the incredibly self-serving Public Service Loan Forgiveness program: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell... , which is totally not debt slavery how dare you think our government engages in that, it's just a friendly loving way of getting your loans forgiven if you spend ten years working for them in an approved manner. Note that "outrageous interest" isn't necessarily part of the deal; the recourse for that is to simply not take such a loan. Non-usurious lending with outrageous interest rates still doesn't enslave you, because you can walk away forfeiting the collateral, and you have a clean slate. An usurious loan even with a seemingly low interest rate (or hidden fees or whathave you) can still enslave you.

elliekelly 8y ago

The average person would be appalled at the "exemptions" to usury laws in most states. California, for example: - Banks - Credit Cards - Retail installment contracts - Pawn brokers - Licensed lenders And guess what a "licensed lender" is? Anyone who has a net-worth of $25,000 who files a form with the DBO. Functionally, Usury laws only apply to the mob.

gowld 8y ago

It's called "predatory lending" now, in part because the mechanisms or more clever (including hacking the legal system) than simply charging high interest.