Money Lending

All serious economists of today homogeneously recognize and appreciate the economic benefits of the changing money market scenario. They also support the process and policy of charging interests or usury on different loans and rarely, if ever at all, attempt to produce any philosophical or moral defense for this position.

In these modern times, the economists have come to know the effects of such change in the country’s economy, the earning capacity of the consumer and relate it with their borrowing and purchasing power as well as reject philosophy completely. They have learned to adapt to the morality aspect of the money lending market along with the practical split.

However, there are still some people who find it hard to accept this notion and although they realize that usury is very practical in these modern times, they find it hard to believe that it is either dissolute orat bestamoral.

For the major part, the modern philosophers find no interest in this topic at all. There are few reasons for this.

  • It is partly because they require to deal with reality for that matter any
  • Partly because they believe that self-interest and capitalism along with everything in between that they entail is evil.

The philosophers like almost every man believe and accepts the fact however that self-sacrifice is the basic standard and the most crucial parameter of morality. On the other hand, as for the source of wealth they consider physical labor as the one and only factor.

All these factors eventually and naturally lead to the inference that, to some extent, these modern philosophers refer to moneylending considering it to be unquestionably unjust. They, therefore, position them to the contrary and consider it to be unworthy of debate.

However, it is high time that everything is clarified and the record is set straight. For this you will need to start form the days of Aristotle, if not beyond that.

The ancient money market

Back in the times of Aristotle, usury was considered to be immoral when the United productiveness was considered with morality. It was thereby condemned at that time based on the mistaken belief of the philosopher. It was therefore considered that such a practice of money lending is unproductive. However, you will need to look deeper into the matter here.

While everyone since Aristotle and including the contemporary economists and philosophershas disengaged productiveness from morality, they practically condemned usury based on the biblical or the altruistic grounds terming it to be immoral or at best amoral.

Here what is required is to change the view that will unify productiveness and morality. However, this will also see usury as productive and on the other hand, it will consider morality as the most effective means to attain practical success on earth.

It is also needed to gain more economic knowledge and standard of the country which in the last millennium experienced its peak. When this knowledge is combined with the new moral theory, it is easily upheld that the morality of self-interest is thereby the virtue of individual profits and gains.

The key economic points

To go deeper into the money lending scenario of the yester years and that of today followed by one and all money lenders in the country including others, you will need to first summarize the key economic opinions. It is only after that you will be able to focus into the brief indication of the morality aspect of self-interest.

Ideally, this economic knowledge is crucial because it will help you in proper defense of usury. You will know and understand the primary reason as to why money lenders charge interest on the amount of money borrowed by someone that they give willingly and most of the times this rate of interest charged is much higher than the usual rate prevailing in the market.You will also come to know why they do so even when they lend money in a riskfree and noninflationary atmosphere.

Well, the primary reasons are:

  • Money lenders usually charge interest because the money that they lend has the potential for alternative uses. That means by lending the money to you now the money lender is actually foregoing this opportunity temporarily till the time you return the entire money to the lender.
  • Moreover, when a lender lends money to a borrower, the scope of putting the same amount of money in some other personal use is also forfeited. That means the lender is directly or indirectly sacrificing personal pleasure and gains which is compensated by the interest that the borrower pays along with the principal amount.
  • The term or time for which the money is lent is also an important economic factor. The longer the term of the loan, the longer will the lender have to postpone its alternative use and continue sacrificing personal gains. The interest charged will vary according to the quantum of benefits and pleasure sacrificed by the money lender.

To sum up, it can be said that the money lenders charge interest on the amount of money they lent out to a borrower because they view it as their right to compensate their sacrifices. The money lenders lend money in the first place because they consider it to be more profitable and a better way of putting their money to use over a period of time as compared with any other alternative uses of the same amount of over the same length of time. They estimate that with the given rate of the interest charged, their benefit is greater from making the loan than from any other probable use of their capital.

Any money lender usually tries to calculate in advance the likelihood and unlikelihood of getting the capital along with the interest repaid. When such likelihood is less, the rate of interest charged will be higher and vice versa. It is the high rates of interest that enables the money lenders to gain from their willingness to take on greater risks. Somehow and somewhere there is some morality into it which no one can ignore.


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