Comment by geofft
9 years ago
I don't see why this is a blanket terrible idea - a ban on loans with interest, which are the only sort of loans that are economically rational for the lender, is a moral principle of one of the world's most popular religions (Islam) and used to be a moral principle of another (Christianity) until it was corrupted by capitalism in its lands. So we must at least concede that the idea of a world where loans are forbidden is well within the Overton window.
A world where people don't need loans seems like a pretty good world, honestly. I've been fortunate enough that my parents were able to finance my college education out of their savings, and I rent my apartment because I don't want a big mortgage, and my life is I think better compared to people I know with student loans and mortgages. A world where everyone has the same access to resources that I had is a worthy goal, and if we can fund that by banning loans, seems fine.
There is a whole industry of sharia-compliant finance to work around the ban on loans. The solution for the christian dislike for money-lending back on those days was for non-christians to do it. A world where people don’t need loans might be nice, but not all the people can use your parents’ money (and depending on what you want to do and how rich is your family, even you might need additional financing).
That's more about compliance in name only than actually following the faith. Like arguments if turning on the lights counts as setting a fire.
Of course. The point is that, paraphrasing Crichton’s Jurassic Park, debt finds a way.
Wait, why are interest-free loans the only kind of economically rational loans? Commercial debt contracts include interest, and are executed exclusively between sophisticated buyers and sellers of debt.
I think I put too many negatives in that sentence. I am claiming that interest-bearing loans are the only economically rational ones (because otherwise you're taking on nonzero risk for definitely zero reward), and interest-free loans used to be widely acknowledged as the only morally justifiable ones.
Ah, you're right. It's just the sentence structure that confused me.
(I asked another question here but decided I'm having a hard time reading or composing standard written English today so, some other time!)