tag:blogger.com,1999:blog-21308815.post5377311356566261859..comments2023-10-08T15:51:17.426+00:00Comments on Beyond Necessity: On usuryEdward Ockhamhttp://www.blogger.com/profile/07583379503310147119noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-21308815.post-14125047429736845392011-07-10T13:03:34.870+00:002011-07-10T13:03:34.870+00:00I am also looking at Thomas here.I am also looking at Thomas <a href="http://www.logicmuseum.com/authors/aquinas/summa/Summa-IIb-77-79.htm#q78a1co" rel="nofollow">here</a>.Edward Ockhamhttps://www.blogger.com/profile/07583379503310147119noreply@blogger.comtag:blogger.com,1999:blog-21308815.post-50266155555287300952011-07-10T12:25:23.485+00:002011-07-10T12:25:23.485+00:00>>whether standard discussions of usury allo...>>whether standard discussions of usury allow interest-charging at least in principle (and they do, of all different kinds, as long as they are charged for the right reasons or under the right circumstances). <br /><br />As I note in today's post, there are only two types of interest rate. Charging for administration costs, e.g. is not an interest charge. A lender might conceal an administration charge as an interest charge, of course, but that is a different matter. The question is whether the 'standard theory' would count the two types of interest charge (non-risky and risky) as usury or not. From what you say, it sounds as though they might have allowed the second, i.e. risky type, so long as it compensated for the risk of loss and no more, but not the first. I discuss the first in the next post.Edward Ockhamhttps://www.blogger.com/profile/07583379503310147119noreply@blogger.comtag:blogger.com,1999:blog-21308815.post-50286650700487292202011-07-10T11:34:08.399+00:002011-07-10T11:34:08.399+00:00Actually, does the idea of *consistent* excess ret...Actually, does the idea of *consistent* excess returns help? I did mention this in one of the posts. The efficient market hypothesis does not rule out accidental risk-free returns. But it rules them out on a consistent basis. <br /><br />What is our moral view on such consistent returns? Probably that to achieve them must have involved some cheating or other, and thus immoral.Edward Ockhamhttps://www.blogger.com/profile/07583379503310147119noreply@blogger.comtag:blogger.com,1999:blog-21308815.post-45643489160189147372011-07-10T02:08:53.659+00:002011-07-10T02:08:53.659+00:00Our natural view – apparently shared by the mediev...<i>Our natural view – apparently shared by the medievals – is that a genuine free lunch is somehow wrong or immoral. Unearned income is wrong: everything we get, we should earn, etc. What the efficient market hypothesis suggests is that there is a kind of natural justice.</i><br /><br />I don't understand what you mean by this at all. It's clearly <i>not</i> our natural view that genuine free lunches are somehow wrong or immoral. People do have a problem with things like dishonesty, oppression, abuse of power, theft, taking unilateral advantage of someone's need to profit at their expense, and other things that contribute to the unfairness of exchange (all of which play a role in discussions of usury, which are not about the fact that interest is charged but about why it is charged). Justice or fairness in exchange involves a sort of equality, but does not involve a sort that rules out any sort of free lunch as a <i>moral</i> matter. Indeed, I can think of nothing whatsoever that morally rules out the legitimacy of one party getting a free lunch in an exchange as long as the exchange is voluntary and the other party is not harmed. Morally speaking, it's entirely possible to have a morally acceptable scenario in which you can get all the unearned income you want as long as I give it to you freely and you aren't harming me by taking it. It's only in the context of very particular kinds of exchanges that unearned income, or the attempt to get free lunches, or trying to get something for nothing, is a violation of the fairness of the exchange itself.<br /><br />This is one reason why it's a bad idea to start with interest if you are trying to understand usury itself, as opposed to simply looking at the question of whether standard discussions of usury allow interest-charging at least in principle (and they do, of all different kinds, as long as they are charged for the right reasons or under the right circumstances). Considerations of the morality of usury arise out of the nature of lending as a form of exchange, and the sort of justice that applies to exchanges. The wrongness of usury doesn't follow from the nature of interest (which is why rejecting usury is consistent with accepting some charging of interest). It follows from the nature of commutative justice.Brandonhttps://www.blogger.com/profile/06698839146562734910noreply@blogger.com