Many have criticised usury (charging interest on loans) in clever and memorable ways. They say it’s shameful that the devil should take God’s share—the tithe. They call the usurer the greatest Sabbath-breaker because his “plough” works every Sunday. Some compare him to the lazy drones described by Virgil:
“Ignavum fucos pecus a praesepibus arcent”
(“They drive the idle drones from the hive”).
Usurers are said to break the first law given to mankind after the Fall: “In the sweat of your face, you shall eat bread”—not “in the sweat of another’s face.” Others argue usurers should wear orange hats, mocking them for behaving like moneylenders of old. And they claim it’s unnatural for money to “breed” more money.
I’ll say this: usury exists because people’s hearts are hard. Borrowing and lending are necessary, but not everyone will lend freely. So, we allow usury as a necessary evil. While some propose crafty banking systems or methods to track wealth, few address usury in practical terms. It’s useful to weigh both the harms and benefits, ensuring that, as we aim for something better, we don’t make things worse.
The Harms of Usury.
First, usury reduces the number of merchants. Without this easy way to profit, money would circulate more through trade, which is the lifeblood of a nation’s wealth. Second, it weakens merchants: just as a farmer struggles to tend his land under heavy rent, a merchant struggles when burdened with high interest. Third, it harms governments by reducing customs revenues, which rise and fall with trade.
Fourth, it concentrates wealth in a few hands. Usurers deal in certainties while others face risks. In the end, most money ends up with the usurers, and nations thrive best when wealth is more evenly spread. Fifth, it drives down land prices because money is diverted from buying land or supporting trade. Sixth, it discourages innovation and investment—money sits idle in usury instead of funding new ideas. Finally, it ruins individuals over time, spreading poverty across society.
The Benefits of Usury
On the other hand, usury does have its uses. While it may hinder trade in some ways, it also enables it. Many young merchants depend on borrowing to start their ventures. If lenders withdraw their money, trade grinds to a halt.
Second, without usury, people in need would face sudden financial ruin. They’d be forced to sell their land or goods at a fraction of their value. Usury may gnaw at wealth, but bad markets can swallow it entirely. Mortgaging or pawning goods doesn’t help much either, as lenders often demand forfeiture. I recall a wealthy man who cynically remarked, “Usury is terrible—it stops us from taking over others’ lands entirely!”
Third, borrowing without interest is unrealistic. All societies have allowed usury in some form. To talk of abolishing it altogether is wishful thinking, fit only for utopias.
Regulating Usury
The challenge, then, is to manage usury in a way that keeps its harms in check while retaining its benefits. This requires two things: first, limiting how much interest usurers can charge, so they don’t exploit others; and second, ensuring merchants can still borrow money to keep trade alive.
The solution is to create two types of interest rates: a low, general rate for everyone, and a higher, regulated rate for merchants in trade centres.
For the general rate, set it at five per cent and make it standard across the country. This would ease borrowing for most people, raise land values, and encourage investment in productive ventures rather than idle lending.
For merchants, allow licensed lenders to charge a slightly higher rate, but less than what merchants usually pay. This ensures all borrowers benefit from reform. These lenders should work independently, not through centralised banks, which often breed suspicion. They should also pay a small fee for their licences, benefiting the state without discouraging lending.
Restrict these licensed lenders to major trade cities. This prevents them from influencing the lower, general rate elsewhere, as people won’t risk sending their money far or trusting unknown lenders.
Some may argue that regulating usury legitimises it, turning what was once barely tolerated into an accepted practice. But it’s better to control usury openly than to let it run unchecked in the shadows.
Bacon Blueprint 