Re: interest v. "usury"

royls_at_telus.net
Date: 09/11/04 

Date: Sat, 11 Sep 2004 20:25:28 GMT

On Thu, 9 Sep 2004 17:13:12 -0400, "Mark Monson" <m_monson@ztech.com>
wrote:

><royls@telus.net> wrote in message news:4140912d.5963943@news.telus.net...
>> On Thu, 9 Sep 2004 10:33:27 -0400, "Mark Monson" <m_monson@ztech.com>
>> wrote:
>
>> >> >> Fine. Suppose an entrepreneur wants to create some capital for a
>> >> >> productive venture he is planning. He can get workers to create it
>> >> >> for him by supplying them with food while they work. But he has no
>> >> >> money, so he borrows some, agreeing to pay back the same amount plus
>> >> >> 1% at the end of a month, when he believes the creation of the capital
>> >> >> will be complete.
>> >> >>
>> >> >> Is that 1% interest, or usury?
>>
>> I do not consider the above question terribly subtle or complex. So
>> if you wish to continue this discussion, please answer it.
>>
>> And I'll even make it simpler for you. Forget the workers. The
>> entrepreneur borrows the money so that he himself can eat while he
>> works to create some capital. Interest or usury?
>
>More simple yet. A worker borrows food so he can produce something else for
>exchange. If he pays back more than principle, he pays Usury.
>
>In the usual case labor does work, receives wages, and then consumes food. Only in
>distress will the worker borrow food.

Wrong. A worker may borrow food (or money to buy food) in order to
devote time that would otherwise be spent getting food to creating
capital that will allow him to be more productive in the future.
Consider the simple example of a pioneer borrowing in order to eat
while he builds himself a house. You are saying that this worker is
entitled to all the additional production having a house will allow
him to produce, while the lender who made the construction possible by
financing it is entitled to nothing whatever beyond the return of what
he advanced. I find such a position absurd. Calling it "usury" does
not change the nature or rightfulness of the lender's return, any more
than calling rent seeking "investing" changes the wrongfulness of its
return.

-- Roy L