Friday, May 20, 2016

Toward Interest-Free Banking

A loan is always a charitable event, but it can be made evil by charging interest.  Interest is wrong because it always does harm.  The interest free loan in charity cannot be replaced by any other instrument, but for the interest bearing loan there are countless alternatives for financing business.  Interest bearing (usury) loans are simply unnecessary in a free, prosperous, just economy.   On the other hand, usury cannot legally exist without hegemonic (state) support.  If states were to delegitimize usury, that is make it no more enforceable in law than gambling debts, usury would move to the edges like drug addiction, prostitution and gambling.  There is not much incentive to repay interest when there is no sanction for not paying interest.

(Ironically, although Vegas gambling debts are not enforceable by law, the fact that the casino lent you $10,000 in chips (interest free!) is a loan enforceable by law.)

Sweden has a bank that operates as most banks once did.

According to JAK's philosophy, economic instability arises out of and is a consequence of the levying of interest.
JAK operates under the following principles:
  • Charging interest is inimical to a stable economy
  • Interest causes unemployment, inflation, and environmental destruction
  • Interest moves money from the poor to the rich
  • Interest favours projects which yield high profits in the short term
The ultimate goal of JAK is to abolish interest as an economic instrument and to replace it with instruments that are in the best interests of the people. The main aim of the bank is to provide its members with a viable, feasible financial instrument, sustainable for the environment and serving the local economy.

If you read the wiki entry, you'll note the bank once issued its own currency, as all banks once did, until outlawed by the Hegemon.  You'll note their structure makes their assets also high and dispersed fruit, as we know the hegemon is seizing low hanging fruit first, and now, as with robbing pensioners on fix-incomes through low interest rates.  But then, to be a pensioner in a usury-based system, and then to be robbed in your old age by that same system is rather condign, no?

JAK came to my attention compliments of this accountant, Samer Hijazi, who added...

Other institutions include Kingdom Bank in
the United Kingdom, Pax Bank and Liga
Bank in Germany, the Catholic Family
Federal Credit Union and Holy Rosary
Credit Union in the United States and
the Institute for the Works of Religion
in Italy (more commonly known as the
Vatican Bank)....The Catholic Church continues
to condemn usury but even the Vatican Bank
participates in the global interest based financial
services system.

Just so.  Read his concise history of interest, with which I cannot quarrel.  A point to be taken is there already is a completely viable means of being interest free in the world, but the more the better. Samer Hijazi clearly gets both sides of the issues, so it is good to read he has assumed a place of leadership in usury-free practice.

The oldest bank in the world is a Catholic bank, but much deformed over 550 years of financial temptations, and now requires bail-out.

And as an aside, I would note that the fees JAK charges members was what the Catholic Church once theorized was acceptable in a charitable loan, and the overall term for this was interesse in Latin, meaning a loss. When Calvin bid welcome usury the protestants took the same term and changed it to a right to a gain.  You can see etymologically how the argument of covering a loss (chimerical opportunity cost) moved to a right to a gain. Policy laundering did the rest.

Feel free to forward this by email to three of your friends.


Anonymous said...

Is it possible for one to start their own bank that operates interest-free in the US? A bank is just a business, like any other company, correct, or not? Wouldn't the same or similar business principles that you teach also apply to a bank business?

If it's not permitted to create your own currency in the US, is it possible to create something usable like currency, but not fall under the legal definition of money by the government (I think the Swiss have some kind of system, but for businesses). Also, if bitcoin is a currency or used in place of currency, why is it legal in the US?

John Wiley Spiers said...

WEll, probably not a bank, becasue that might lead to criminal prosecution , although there are entities that disperse interest free loans, but are not banks.

As to creating currency, not legally, but more useful is extending credit at no interest, a lost art in USA.

Bitcoin never was a currency, contrary to the claim of scam artists, it is simply a tally system, a ledger as wikileaks notes, what lists taxable assets.

We simply need to deregulate banking to have a free market in money.