My opinion of “usury” is that it refers to loans where the interest continues to accumulate if the debt is not paid. I think this can be solved by considering the contract to be a thing that terminates at a specified price.
We're not going to have any meaningful progress if this issue is not tackled. Any talk of "equity" is nonsense until then.
> setting it to zero causes all sorts of distortions
It doesn't, because under Islamic law, loans are purely an act of charity. That's how the Islamic world has operated for a very long time now, until relatively recently where some people have succumbed to the Western economic practices post WWII. If you want to make money, you invest it, where the investor and invetee both take on risk, not like the basically one-sided interest contract where the lender is all but guaranteed to profit.
Thank God and all His angels that I’m not Muslim then.
> We're not going to have any meaningful progress if this issue is not tackled.
Exactly, however tackling it is going to include educating people on the time value of money.
> It doesn't, because under Islamic law, loans are purely an act of charity.
Fortunately I don’t abide by Islamic law.
> If you want to make money, you invest it, where the investor and invetee both take on risk, not like the basically one-sided interest contract where the lender is all but guaranteed to profit.
Lenders are not even close to guaranteed to profit, and a loan is a type of investment.
Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way.
> Fortunately I don’t abide by Islamic law.
Yet people keep crying at the wealth gap and inflation rates and the government printing money and only a tiny percentage at the top benefits at the misery of everyone else. Islamic law is there to make a stable and just society, not for us to be wolves and destroy one another, which humans have done time and time again and it's never going to change.
> Lenders are not even close to guaranteed to profit
They are contractually owed a profit. They can go after the borrower in case of default with the full support of the law and take not only the principal, but the interest on top. This would never happen if the loan were an act of charity. The fact that the entire banking industry exists is proof that it's a very lucrative business to be in.
> and a loan is a type of investment
This isn't a strong argument because hiring a hitman is also an "investment" or "business transaction". Islam places restrictions on investments. For instance, investing in a tobacco company or a casino is prohibited. Lending money with interest is another prohibited investment.
If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans.
> Islamic law is there to make a stable and just society, not for us to be wolves and destroy one another, which humans have done time and time again and it's never going to change.
Respectfully, I’m not interested in becoming a Muslim.
> They are contractually owed a profit.
They are contractually owed a payment. Its not profit until expenses are subtracted. And there is always the risk that the other party does not return the money.
> They can go after the borrower in case of default with the full support of the law and take not only the principal, but the interest on top.
It seems you may have identified a problems with the law then.
> This isn't a strong argument because hiring a hitman is also an "investment" or "business transaction".
A hitman is not an investment and as a transaction, it is for the performance of a crime (presumably). So it is already prohibited as it is the commissioning of a prohibited act, there is no need to consider it an investment to regulate it. Surely Islam also prohibits murders if they are done for free.
That's not the point of discussion. The argument is that we have known for literally thousands of years that charging interest on loans is a destructive practice. It's banned in Islam, Judaism, and Christianity for a reason. Yet we cry today at the mess we're in, as if we didn't know any better.
> They are contractually owed a payment. Its not profit until expenses are subtracted. And there is always the risk that the other party does not return the money.
They're owed more money than the capital. That's what is prohibited. It doesn't matter if it's profit or revenue. Banks operate and generate ridiculous profits on this basis.
> It seems you may have identified a problems with the law then.
So the law can't protect the contract? What's the point in writing a contract then in the first place? Take that away and no business contract makes sense anymore since it can't be enforced by the law.
We don’t know that, we only know that Abrahamic theocrats have prohibited it.
> They're owed more money than the capital. That's what is prohibited. It doesn't matter if it's profit or revenue.
Yes, this is foolish.
> Banks operate and generate ridiculous profits on this basis.
Banks generate ridiculous profits in fractional reserve banking. In a system where they have to survive on the difference between interest collected and interest paid then they only profit when they make good loans and are able to collect them in a timely manner.
> So the law can't protect the contract? What's the point in writing a contract then in the first place?
How does the law draw blood from a stone? You yourself said the law is wrong for continuously accumulating interest on an unpaid debt. It seems youkve forgotten the problems you already identified.
> Take that away and no business contract makes sense anymore since it can't be enforced by the law.
This only applies to the business contract that we have both identified as problematic.
(1) They're prophets. (2) We know that, look around you at what's happening.
> Yes, this is foolish.
It's not. Look around you at the disasters.
> they only profit when they make good loans
An interest bearing loan is, by definition, not good. It's predatory. So it means that those banks profit most on the most predatory loans, exactly as I was explaining.
> You yourself said the law is wrong for continuously accumulating interest on an unpaid debt
That's part of it. The argument is that the law protects interest bearing loan contracts instead of nullify them.
Zero are even better. We've known for literally thousands of years that interest (usury) is parasitic, immoral, and dangerous. Islam, Judaism, and Christianity all outlaw it. Yet we continue to engage in it and wonder why we end up in mess after mess.