Is Lending The Root Of All Evil?

Ayn Rand famously defended money. In Atlas Shrugged, Francisco D’Anconia says:

“So you think that money is the root of all evil?.. Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?”

There needs to be a similar defense of the loan.

The Attack On the Loan

As money has been slandered—the root of all evil, etc.—the loan has been demonized as well. And not just because the loan involves money, which is already established as pure evil. The loan piles a whole new kind of evil on top of the root of money. And many who accept money are opposed to lending, or at least lending with interest. Even the good guys.

In Politics, Aristotle wrote:

“The most hated sort [of moneymaking], and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term Usury which means the birth of money from money, is applied to the breeding of money, because the offspring resembles the parent. Wherefore of all modes of making money this is the most unnatural.”

This shows a pernicious idea. If you lend 20 at 5% interest, you get back 21. This extra one is “unnatural”, according to Aristotle. Many people reflexively feel that this is coming out of the flesh of the borrower. This view is missing something. We will look at it, below.

In Ethicus, Thomas Aquinas says:

“To take usury for the lending of money is in itself unjust, because it is a case of selling what is non-existent; and that is manifestly the setting up of an inequality contrary to justice. In evidence of this we must observe that there are certain things, the use of which is the consumption of the thing; as we consume wine by using it to drink, and we consume wheat by using it for food. Hence in such things the use of the thing ought not to be reckoned apart from the thing itself; but whosoever has the use granted to him, has thereby granted to him the thing; and therefore in such things lending means the transference of ownership. If therefore any vendor wanted to make two separate sales, one of the wine and the other of the use of the wine, he would be selling the same thing twice over, or selling the non-existent: hence clearly he would be committing the sin of injustice. And in like manner he commits injustice, who lends wine or wheat, asking a double recompense to be given him, one a return of an equal commodity, another a price for the use of the commodity, which price of use is called usury. But there are things the use of which is not the consuming of the thing: thus the use of a house is inhabiting it, not destroying it. In such things, ownership and use may be made the matter of separate grants. Thus one may grant to another the ownership of a house, reserving to himself the use of it for a time; or grant the use and reserve the ownership. And therefore a man may lawfully take a price for the use of a house, and besides demand back the house which he has lent, as we see in the hiring and letting of houses. Now according to the Philosopher, money was invented principally for the effecting of exchanges; and thus the proper and principal use of money is the consumption or disbursal of it, according as it is expended on exchanges.”

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