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Well, my assertion for why people dislike usury isn't because of just high rates, but high rates + unreasonable measures to ensure repayment. Focusing the discu

Well, my assertion for why people dislike usury isn't because of just high rates, but high rates + unreasonable measures to ensure repayment. Focusing the discussion to whether the rates are a particular economically justified number or not ignores the social aspects of usury. Even the article doesn't just focus on high interest rates, but discusses hectoring people during their daily lives, calling bosses, friends, and family to shame them into repaying, and linking credit ratings to job applications. Maybe the outrage on usury would be lower if it was legislated that lenders cannot use public shaming, criminal sanctions, or garnishing wages to force repayment on someone that has stated their intent to default on their loans. The borrower would be blacklisted from the lender in the future and overall interest rates would go higher due to less recovered funds. However, there may be less outrage because as I stated, the key issue isn't just rates but rates + unreasonable lender behavior. The difference between a bank and a loan shark isn't just different rates, but that a bank will only downgrade your credit rating in a default while a loan shark will break your legs. If you're interested in some reading, check out David Graeber's "Debt: The First 5000 Years." It's a pretty interesting presentation of the social nature of money beyond just a number on a balance sheet.

wutbrodo 7y ago
I guess what I was addressing was the claim that the rates are "unjustifiably" high given the aggressive recovery tactics: > tools and punishments lenders use to lower the risk of default below what justifies their high rates My point was that this assumption was unfounded, and it's a better baseline assumption that the counterfactual of aggressive recovery tactics would be even higher rates. It seems we're in agreement that it can be entirely salutary for the government to decide to limit the actions you can take to recover debt (at the likely cost of higher rates), but it's important to be clear on the model we're using here.

wutbrodo 7y ago

I guess what I was addressing was the claim that the rates are "unjustifiably" high given the aggressive recovery tactics: > tools and punishments lenders use to lower the risk of default below what justifies their high rates My point was that this assumption was unfounded, and it's a better baseline assumption that the counterfactual of aggressive recovery tactics would be even higher rates. It seems we're in agreement that it can be entirely salutary for the government to decide to limit the actions you can take to recover debt (at the likely cost of higher rates), but it's important to be clear on the model we're using here.