The Case for an Interest-Free Economy

Old Testament law repeatedly states its opposition to the charging of interest within a relational context. This position is reinforced in the Wisdom and Prophetic literature, radicalised in Jesus’ teaching and was applied widely within early and Medieval Church doctrine. This paper makes the case for taking the critique of interest seriously again. It does so by examining the ethical reasons for opposing the charging of interest within a relational framework in light of biblical teaching. It then highlights what has gone wrong since the relaxation of the Church's opposition to interest-based debt, especially since the development of unanchored credit money. The contours of an interest-free financial system are then outlined, with its contrasting advantages. Nevertheless, continuing subsidies and bailouts, institutional inertia and localised efficiencies provide reasons for the continuing survival of a debt-based system. However, the return of non-debt-based money may soon further disrupt the status quo and make the case for an interest-free economy once again.