This weekend I read the book called "Economics" written by Stephan Slavin. Very user-friedly written book about basic economics. It allways amaze me this days how so many people forget about some basics in economics. Specially those in financial community.
They talk and talk and talk...it's so simple when you get it right. I am not economist but it is one of my interest. I wonder why I didn't study it . Basiclly, what I wanted to say regarding above mentioned book ? Under the chapter about rents, profits, and interest, there was short notice of interesting situation in ancient times ( Grecce). Mosaic laws in the book of Deuteronomy strictly forbid not only usury ( lending money at exorbitant interest rates ) but even taking of any interest.
In those days loans were made mainly for charitable purposes, so the prohibition mada a great deal of sense.
Interesting thoughts of great philosopher Aristotel about same issues:
" The most hated sort , and with greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intented to be used in exchange, but not to increase at interest...Of all modes of getting weath this is the most unnatural. "
Aristotel was wise man but times have changed since then and in our todays's world the most natural modes of getting wealth is by rent, interest, profits.
With the rise of commerce, however, the basic purpose of most loans changed, and the prohibitions against taking interest were dropped. But what constitutes a " fair " rate of interest on consumer loans continues to be debated to this days.
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