Sarah Skwire has this interesting discussion on the topic.
After all whom to lend and not to lend and on what terms is critical to evolution of banking.
We treat family differently, after all. My daughter will get a giant pink fluffy stuffed unicorn from me on her birthday. I don’t believe that I am similarly obligated to provide fuzzy equines for all other eight-year-olds. Different treatment is a way of acknowledging different kinds of bonds between people and different levels of responsibility to them.
All of this is on my mind because the other night, after I gave a talk on liberty and culture, an audience member and I had a discussion about banking, debt, and interest rates during which he carefully explained to me how Jews lend each other money for no interest, but when they lend to Christians, the sky’s the limit. Everyone knows it, because it’s in the Bible.
He was right, sort of. It is in the Bible, sort of.
It’s right there in Deuteronomy 23:
You shall not give interest to your brother [whether it be] interest on money, interest on food, or interest on any [other] item for which interest is [normally] taken. You may [however], give interest to a gentile, but to your brother you shall not give interest, in order that the Lord your God shall bless you in every one of your endeavors on the land to which you are coming to possess.
But textual interpretation is a tricky business. And textual interpretation of a text that has existed for thousands of years and been wrangled with by millions of interpreters — well, it doesn’t get much trickier than that.
But it seems worth noting that the word used here (both in translation and in Hebrew) is literally “brother.” This has been interpreted over the years to mean “fellow Jew.” But the word, as given, is brother.
In an intimate order, we have a responsibility to give more and do more than in the extended order.
What I think the passage means to emphasize by using this word — regardless of whether we are talking about literal brothers, or just “brothers” — is the importance and of treating those who are closest to us with particular care and concern. The kind of business relationship that is part of Hayek’s extended order, or that is located in an outer ring of Smith’s concentric circles of sympathy, doesn’t come with extra moral responsibilities to one another. A price is agreed on. A bargain is struck. An exchange is made. Everyone is content. But in an intimate order — with brothers or sisters, husbands or wives, parents or children — we have a responsibility to give more and do more than in the extended order.
And so observant Jews are told that they should not pay or charge interest to brothers — whomever they consider those brothers to be.
Though it has been interpreted uncharitably by many over the years, this passage from Deuteronomy is not a passage about cheating the outsider. This is a passage about taking special care of those who are closest to our hearts. It’s hard to find anything to object to in that.