UPenn Press is bringing out a paperback edition of Charles R. Geisst's
Beggar Thy Neighbor: A History of Usury and Debt.
Excerpt:
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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