In my opinion, usury basically comes down to profiting from someone's continued misfortune. The longer a person continues to have the misfortune of being unable to pay back the loan, the more the lender profits.
(Unless the borrower is financially bled so much that their life is ruined (such as by a health issue they can't afford to pay for causing them to lose their job), resulting in them becoming incapable of making enough money to pay; or they finally decide they're tired of being an indentured servant and paying exorbitant, unfair fees and interest rates).
If the end of usury would lead to more investment happening, I think that would be OK. I haven't looked into investing too much (I'm too broke, so knowing about investing would be of little practical use to me), but, off-hand, I can't think of any major problems with investing. Unlike lenders, who profit more when an individual or business is struggling and is not yet prosperous enough to pay back their debt in full, investors profit when a business succeeds. (Unless I'm mistaken).
Loans with interest are an ongoing parasitic drain on whatever resources you have at your disposal and hence increase your chances of failure. Being in debt can also cause needless and debilitating emotional distress in the form of the ongoing fear of the consequences of not being able to pay back your debt.
Meanwhile, investments leave you free to just build your business without being plagued with the anxiety of carrying a lot of debt, and without having to deal with excessive amounts of your profits being eaten up by the necessity to pay back some greedy, already wealthy lenders who don't need the money as much as you do.
I think people should be rewarded for helping others, not for hindering others. I think investors earned and deserve the reward of sharing in the profits of the business they helped. If I'm not mistaken, investors also take greater risks than usurers, because investors can lose everything they invested without getting a cent back, and, unlike usurers, they aren't entitled to use the legal system to bully people into paying them back.
One thing that particularly annoys me is when usurers act like they're doing borrowers a favor by taking advantage of them. Sure, loans can make the lender superficially appear to be generous, but it's not really generous at all if the lender is going to get back not only what they paid you, but also large amounts of interest and fees.
Not to mention, until you pay them back, the lender is also given a lot of power over you, such as the legal right to harass you by hiring bill collectors, damaging your credit report, getting court orders against you to impose wage garnishments, bank account levies, and other seizures of assets if you can't afford to pay, etc.
Lauxa wrote:
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What do you think the world would look like without usury?
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Hopefully, a lot better.
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What would wealthy people do with their money if they couldn't loan it out at interest?
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Spend it, invest it, give it away - all of which they doubtless do now, but hopefully they'd do even more of it.
Regarding banks and savings accounts - maybe these could survive in a no-usury world if banks decided to support themselves through investing, and by branching out into providing other services truly worthy of the name "services".
Actually, I doubt the elimination of usury alone would ruin banks totally - I'm guessing banks make quite a bit of money from unfairly high bounced check fees, ATM fees, and other annoying little fees that I would much prefer that they didn't have.
Best wishes,
Apollia