Ribbis: Reasons and Rationales

R. Yair Hoffman writes:

[L]et us try to provide some philosophical explanation for the underlying prohibition of Ribis. Imagine the following scenario:

The family lives in the old country. The eldest son has emigrated and has made it to New York and has an apartment in the Lower East Side of Manhattan. Another son is about to seek his fortune in New York and needs a place to stay. He arrives at the brother’s house. The brother tells him, “Look, brother, you can stay in my apartment, no problem. And I will even charge you less than the Motel Six rates. It will only be $40 per night!” The parents would certainly be upset at their eldest son’s behavior. This is not the way one behaves with a brother.

ONE FAMILY

By the same token, the Torah views all Jewish people as one family. When a brother or sister needs a loan, therefore, we do not charge them interest, just as we would not charge them rent when they stay by us. Indeed, there are six prohibitions in the Torah associated with charging interest. The prohibition is called “Ribis” interest or “Neshech.” Anyone who has ever taken out an interest bearing loan can appreciate the fact that Neshech comes from the Hebrew root word, “bite.” Interest payments certainly do feel like a serious snake bite.

I do not understand this at all: by this logic, the Torah should have prohibited the charging of rent for residential property!

My friend and colleague H.S. cites this sort of rationale in the name of R. Shimon Schwab:

In Parshas Behar, the Torah forbids us to charge another Jew interest. It is not only prohibited for a lender to assess interest, but a borrower is also forbidden to voluntarily pay it. The commentaries have grappled with the rationale for this prohibition. Is there something wrong with charging interest when both parties agree? If one is permitted to charge a rental fee for the use of that person’s car for a week, why can’t one charge a “rental fee” if someone wants to have use of that person’s money for that same amount of time?

Rav Shimon Schwab offers the following explanation: Indeed, in the world of business, interest has its place. A functional economy relies on loans, which are only likely to occur if interest may be charged. In the realm of family, however, interest does not belong. Imagine if your brother or sister needed a loan and, despite having the money readily available, you would only offer the loan with interest! Such an action would be distasteful and inappropriate. The Jewish people, explains Rav Schwab, are all one family. The Torah stresses this by describing the impoverished person as “your brother” and instructing us to let our “brother” live along with us. As long as we view our fellow Jews as family, loans will be granted willingly without the need or desire to charge interest. Our Parsha describes a number of scenarios in which a Jew may become impoverished and need assistance to resolve his situation; in each case, the Torah describes him as “your brother.” If we can successfully adopt this perspective and always view our fellow Jews as our brothers and
sisters, then – like any close-knit family – we will be there for each other in times of need and be prepared to offer assistance without desire for compensation.

But once again, this argument proves far too much:

Imagine if your brother or sister needed a place to live and, despite having a suitable residence readily available, you would only offer it to him at market rent! Such an action would be distasteful and inappropriate.

Incidentally, R. Schwab’s great predecessor, R. Samson Raphael Hirsch, while agreeing with the basic premise that charging interest is not inherently immoral, understands the rationale for the prohibition quite differently:

“I would like to close by sharing with you a thought from Rav Samson Raphael Hirsch about the reason why the Torah prohibited interest. He notes that if the Torah considered charging interest to be inherently immoral, it would have banned charging interest from non-Jews, and also would have prohibited only the lender and not the borrower. Rather, Rav Hirsch notes, the Torah’s prohibition is to demonstrate that the capital we receive from Hashem is so that we donate tzedakah and provide loans, and thereby fulfill our share in building and maintaining a Torah community. The Torah’s goal in banning the use of capital for interest-paying loans is to direct excess funds to chesed and tzedakah.”

Once again, however, this explanation fails to distinguish between loaning money at interest and other forms of investment. Why is making an equity investment in a business any more legitimate than investing in the same business by lending it money at interest?

The truth is that it is really quite difficult to offer a rationale for the prohibition of charging interest that will be completely satisfying to the modern mind, as I discuss in my weekly halachah column for this past פרשת בהר:

In parashas Behar (25:36-37), the Torah forbids usury. The prohibitions against usury, as well as reprobation of the usurer and approbation of he who avoids usury, are reiterated throughout the Bible (Shemos 22:24; Devarim 23:20-21; Yechezkel 18:13,17; Tehillim 15:5). The Torah never explains, however, why usury is prohibited. A number of rationales have been proposed, although none appear entirely satisfactory:

  • Shaarei Yosher (end of Shaar 5) explains that usury is actually a form of theft. Despite the fact that the borrower willingly accepts the interest obligation, his consent is considered to have been given erroneously, since we presume that he does not fully realize the harm that he is thereby inflicting upon himself. This would not seem to apply, however, to loans with reasonable interest rates that are clearly beneficial to the borrowers, such as prime mortgage loans taken out by homebuyers.
  • Radak (Tehillim ibid.) declares that an agreement to pay interest is tantamount to a contract entered into under economic duress, since the borrower needs the loan. It is difficult to understand, however, why such an agreement is different from any other contract. E.g., a tenant only agrees to pay rent since he needs a place to live!
  • Some suggest that since there is a mitzvah to lend money to one’s fellow Jew, the charging of interest is forbidden under the general prohibition against charging for the performance of a mitzvah (see Shut. Avnei Nezer YD 159:3). This rationale would not seem to apply, however, with regard to money that the lender would otherwise be investing for profit, since the prohibition against charging for the performance of a mitzvah contains an exception for the recouping of opportunity costs entailed by such performance (cf. Bris Yehudah Ch. 1 n. 10).
  • Some suggest that since interest is too reliable a source of income, it eliminates the need for bitachon (reliance) upon Hashem (Kli Yakar Vayikra ibid.; Introduction to Klala De’Ribisa). The idea that taking advantage of the best available opportunities to better one’s lot can be inconsistent with bitachon is, however, a controversial one (see Commentary of Rambam to the Mishnah, Pesachim 56.; Akeidas Yitzchak #26 p. 221).

My weekly parashah lectures for פרשת בהר on this topic, and accompanying handouts, are available at the Internet Archive.

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2 Comments

  1. This may be an expression of my affection for R’ Hirsch, but I see your objection to his rationale for this prohibition as not as strong as your objections to the other rationales presented here.

    R’ Hirsch says that the Torah wants us to be investing our excess money in building the community through tzedaka and free loans. I would suggest that these two means are the primary vehicles the Torah contemplates for an individual to support the community, financially, and that the Torah doesn’t address equity investments for this purpose. It could be that the financial vocabulary available in Sinai-era Leshon Hakodesh simply didn’t include equity investments, while it did include gifts and straight-up loans, each of which is conceptually simpler. Alternatively, perhaps gifts and loans are considered ideal forms of financial assistance, while equity investment is not, for whatever reason. (Although Rambam Matanot Aniyim 10:7 contradicts this suggestion.)

    If, as R’ Hirsch says, free loans are among the two particular modes that the Torah wants us to use to support the community, then engaging in a less-helpful form of that very mode – interest-bearing loans, with respect to the same community would be a *direct* displacement of the more-helpful form. Equity investments or other uses of capital, such as, say frivolous personal purchases, also deplete resources but don’t tread on tzedaka so directly.

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