The practice of charging interest on loans has been controversial since it was first mentioned in early recorded history. Lending is a powerful economic tool, vital to the development of society but it can also lead to disaster if left unregulated. Prohibitions against excessive interest, or usury, have been found in almost all societies since antiquity. Whether loans were made in kind or in cash, creditors often were accused of beggar-thy-neighbor exploitation when their lending terms put borrowers at risk of ruin. While the concept of usury reflects transcendent notions of fairness, its definition has varied over time and place: Roman law distinguished between simple and compound interest, the medieval church banned interest altogether, and even Adam Smith favored a ceiling on interest. But in spite of these limits, the advantages and temptations of lending prompted financial innovations from margin investing and adjustable-rate mortgages to credit cards and microlending.
In Beggar Thy Neighbor, financial historian Charles R. Geisst tracks the changing perceptions of usury and debt from the time of Cicero to the most recent financial crises. This comprehensive economic history looks at humanity’s attempts to curb the abuse of debt while reaping the benefits of credit. Beggar Thy Neighbor examines the major debt revolutions of the past, demonstrating that extensive leverage and debt were behind most financial market crashes from the Renaissance to the present day. Geisst argues that usury prohibitions, as part of the natural law tradition in Western and Islamic societies, continue to play a key role in banking regulation despite modern advances in finance. From the Roman Empire to the recent Dodd-Frank financial reforms, usury ceilings still occupy a central place in notions of free markets and economic justice.
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A Much Needed Historical Volume on Evolutionary Finance Presentation of economic and financial history has traditionally been one of two formats. One being the presentation of the economic statistics and analysis of those numbers or a narrative encompassing the activities of either main characters or institutions of a period under review. This volume uses the latter approach to summarize the evolution of finance and more specifically credit from being a sin to being an important element in modern day economic affairs.With little or…
Thoroughly Excellent This excellent book surveys usury and the development of interest from biblical times to the present. What I found rewarding was that the author covers, in detail, biblical materials about usury in the Middle East and ends with the Dodd-Frank law. The best part is that it is a detailed financial history, talking about interest and how it was calculated, not just a string of anecdotes pieced together and called a history. The book does not give just the highlights but underlines them with…
Needs editing While the content of the book is interesting, I found sections very difficult to read. Some sentences or entire paragraphs were repetitive or unclear, sometimes even seemingly contradictory. I think another round of edits could have significantly improved the book.