Social Policy Unit Major Sue Hay's keynote address presented to the Christian Budgeting New Zealand Inc. conference in Auckland on 14 August 2015.
The idea of lending without interest gradually disappeared as a theological concept in the 19th Century and in the face of rampant capitalism and its handmaiden Calvinist Protestantism. As so often happens we adopted a theology or at least a moral philosophy which suited our ends.
But in my opinion the idea of usury still has currency. While it would be quite fanciful to imagine a world without lending based on interest, most of us would accept that there still should be a limit to the rate of interest required by lenders of borrowers.
For those of us with assets and sound credit histories this limit is determined by the market. Such ‘good credit risks’ have a number of opportunities to borrow money and the marvellous invisible hand of the market ensures competition amongst lenders. This competition comes in the form of the interest charged on loans.