Year: 2024
Type: article
Abstract: Recent National Regulatory Framework from Law 216 of November 22, 2011, on the Prohibition of Usury in Business. Morality and the legality of the issue of usury are, however, deeply rooted in ancient times, with prohibitions against usury established in all major religions. Historical contexts and regional geography of principal economic forces have led religion and long-standing lending practices to coexist. Figures from ancient world cultures have taken stances against these practices, which, among other things, later influenced the attitudes of certain religious leaders. The three Abrahamic religions, in chronological order, Judaism, Christianity, and Islam, have numerous references of practical interest. Christianity has opposed these practices from the beginning, although some dogmas have been reinterpreted over time. In Islam, there is strong opposition to interest, and an economic phenomenon attracting more attention is the alternative to the current international banking system—Islamic banks. KEYWORDS: abrahamic religions, islamic banks, regulatory framework, usury JEL CLASIFICATION: N1, N15, N35 1. INTRODUCTION The deficiencies of the current normative framework and the problems created by its instability are expressed somewhat euphemistically by one of our renowned law professors, Ion Turcu: “Most of those who make our laws do not possess legal studies and probably believe they don’t need them, as they are not mentioned in their job description…” (Turcu I. 2011, p. 11). It is said, however, that Christian morality could successfully replace the gaps in legal norms. Which of the major religions does not aim to establish morality as the cornerstone of the community?It took 21 years after '89 for various justice and criminal investigation structures to attempt, usually unsuccessfully, to categorize such actions as fraud, tax evasion, or unauthorized practice of a profession. This social plague led to the creation of one of the most succinct normative acts, Law 216 of November 22, 2011, which prohibits usury. Judicial authorities can apply "imprisonment from 6 months to 5 years" and will confiscate the sums of money obtained through the commission of the crime, i.e., the interest collected by the usurer.The activity of “usury” is defined by the normative act as “the lending of money with interest, as a profession, by an unauthorized person.” We should nuance that, contrary to popular perception, the difference between a usurer and a banker is not just that the former lacks "authorization." A multitude of complaints, property seizures, and the temptation of very large, albeit controversial, gains have necessitated defining usury as "a new crime" in our country, even though its existence as a social phenomenon dates back to ancient times. Vedic writings from ancient India mention usury from 2000 years ago, and it was systematically addressed by the ancient Greeks, who referred to the first banking institutions. The distinction between usury and interest arises from the exaggerated added value in the former category versus the regulated and legal value in the latter. Dictionaries further specify that the etymology of the term "interest" comes from the verb to acquire, to obtain something honestly, meaning "to gain something through work, effort, perseverance; to earn, to achieve; to find, to procure" in contrast to usury, which implies unjust profit. 2. MAJOR RELIGIONS AND INTEREST From the outset, the practice of lending with interest has been intertwined with religion. The social importance of temples was also due to their role as the earliest places for depositing significant amounts of money. The oldest known banking building is located in Mesopotamia, where archaeologists discovered accounting tablets with cuneiform writing beneath the ruins of the Uruk temple (this "red" temple dates back to around 3400-3200 BCE). By lending money, early religious leaders achieved dual objectives: they obtained profit and gained gratitude/influence, with money becoming a source and symbol of power. Both this type of profit and influence, more so than theological ideals, have been sought and contested throughout history. Not infrequently, and not randomly, some state leaders were also religious leaders. The relationship between the practice of lending with interest and the institutions that represented them, and the state, was bidirectional and intense from the beginning. On one hand, the state was interested in developing and maintaining credit structures as they represented sources of financing and influence. On the other hand, the institutions and individuals providing loans were interested in the existence of a relatively strong state to protect them and ensure their normal functioning through state-specific instruments (army, justice, police, finance, etc.). For example, in the Hellenistic region, around six centuries BCE, city-states and temples issued their own currency, and in Athens, Solon's laws legalized interest, while priests from the Temple of Delos conducted banking operations with cash or goods. To evade usury and the dominance exerted by Athens and Delos, some Greek city-states established the first public banks managed or controlled by officials. Arguing the state's interest, we note that one of the earliest regulatory acts in the ancient Orient, the Code of Hammurabi, highlights the authorities' interest in controlling interest-bearing loans, stipulating that all loan contracts must be approved by royal officials. The metaphysics of history reveals many elements of the state's interest in controlling interest up to the present day. The practice of lending with interest, particularly usury, not only produces profit and influence but also generates and maintains resentment. These resentments and social tensions, motivated by a certain exploitation that, at different historical periods, encompassed large segments of the population, are also sources of ethnic divisions and subsequent persecutions. A famous Shakespearean saying applies through time: if you want to lose a friend, lend them money. 2.1. Congruence and Adjacency in the Abrahamic Religions’ Approach to Interest-Based Lending The ancient temples of antiquity were notable not only for storing large amounts of money but also for excelling in the practice of lending money with interest. In Rome, popular movements and political parties gained support by implementing measures to control usury. Among the great figures of antiquity who condemned usury were Cicero, Seneca, Plutarch, Aristophanes (in his "Moralia"), Plato (in his "Laws"), and especially Aristotle, who, in his "Nicomachean Ethics," argued that it is immoral and unacceptable for money to generate more money on its own. Aristotle discussed wealth in two categories: natural wealth—related to land products or domestic animals—and unnatural, distorted wealth, which is wealth in money, where money increases its own value. It is very plausible that these teachings contributed to the strong opposition that early Christian leaders (who were educated in ancient teachings) had against the practices of interest based lending. 2.2. Christianity At the Council of Nicaea in 325, which set guidelines for Christianity and demonstrated a complete break from ancient religions, Christian priests were prohibited from lending money with interest. This directive was applied differently depending on the political situation in Europe and the relationships among centers of power. In Western Europe during these centuries, the region was fragmented into small states, a mosaic of internal struggles among noble factions, between the nobility and the clergy, or between monarchs and the nobility. The only well-structured social institution that remained was the Catholic Church, which from the beginning found its role as a state within a state (a tendency that persisted even in communist Catholic states) and often subordinated or even replaced state power. In Eastern Europe, however, the Byzantine state remained strong, with Justinian's era attempting to recreate a Great Mediterranean as an internal sea (as in the height of Roman glory) and continued the Greek banking traditions. The emperor's power, and implicitly the state's power, managed to subordinate the Orthodox Church to state authority, a tendency that persisted even after the fall of the Byzantine state under the blows of the Crusaders and later the Ottomans.The different position of Catholicism meant that the prohibitions of the Council of Nicaea extended throughout the Western Christian community, prohibiting all Christians from engaging in usury. Eight more religious councils after Nicaea and several monarchs, culminating with Charles Martel, sought to reinforce the prohibitions against interest. Several biblical texts underpin this view, for example, in Exodus (22:25): "If you lend money to any of my people who are poor among you, you shall not be like a moneylender to him; you shall not exact interest from him," and Leviticus (25:35-37): "If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. You shall not lend him your money at interest, nor give him your food for profit." The nuance regarding the prohibition among members of one’s own people has been exploited over time, remains a topic of debate to this day, and is present in various evangelical chapters. In Deuteronomy (23:19-21): "You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest. You may charge a foreigner interest, but you may not charge your brother interest, that the Lord your God may bless you in all that you undertake in the land that you are entering to take possession of it," and Ezra II (5): "He does not give his money at interest or take any increase; but he keeps his hands from any injustice and executes true justice between man and man," or Ezekiel (22:12): "In you they take bribes to shed blood; you take interest and profit and make gain of unjust gain from your neighbors; and you have forgotten me, declares the Lord God."In the New Testament, a passage reiterates the prohibition on the practice of lending: "But love your enemies, do good, and lend, expecting nothing in return; and your reward will be great, and you will be sons of the Most High, for he is kind to the ungrateful and the wicked" (Luke 6:35). In addition to the evangelical texts, the Church Fathers and major Christian theologians contributed to this view. For example, St. Basil the Great said: “Are you rich? Do not borrow! Are you poor? Do not borrow! If you are rich, you do not need to borrow, and if you have nothing, you will have nothing to repay your loan.” “When you wish to give to the poor for the Lord, giving is both a gift and a loan; it is a gift because you do not expect it to be returned; it is a loan because of the great generosity of the Lord, who will repay the debt in place of the poor.” In Western Europe, with the flourishing of maritime commercial areas, there was a reinvention/revitalization of banking activities in the major cities of Northern Italy (Venice, Genoa, Milan, Florence), the Iberian regions, driven by the immense amounts of gold and silver brought from American colonies, as well as the Hanseatic League's northern European commercial centers and the nations that excelled in navigation (English, Dutch). The practice of interest-based lending was revitalized, and ethical debates on interest intensified, as the Reformation began.Its founder, Luther, extolled poverty—true faith—and the clergy no longer needed wealth. The feudal lords in most German states discovered great merit in such faith, which, importantly, allowed them to appropriate ecclesiastical properties. In England, Henry VIII, after the Pope refused to grant him a divorce, also discovered doctrinal pretexts, broke away from Rome’s hegemony, and enriched himself through similar operations. “Rulers who were frequently reproached by the Pope could generally only view favorably a doctrine that added religious powers to their political power and made each of them a pope. Far from diminishing the absolutism of rulers, the Reformation only exaggerated it” (Gustave Le Bon, p.121, 2010). 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Author: Adrian Sorin MARIAN
Institution: Bogdan Voda University
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4407549145