Why charging interest harms an economy

Warsan Garrow
3 min readDec 28, 2024

Interest is an inevitable economic tool within the Western financial system. Interest is the curated percentile rate one pays over the borrowed sum to a lender. An unavoidable evil in plain side as an integral part of an economy in the Western-Christian Judeo hemisphere. Did you know that the use of interest is an ancient Jewish practice? From the early stages of trade, Jewish merchants used interest to increase their incomes. What seemed clever was actually a financial loophole to sabotage and justify the exploitation of other businesses in their trade agreements. Using usuary is a means of self-enrichment added to transactions that skew the economic equation and enforce power.

From the 17th century to the early 20th century, progressive Western countries, already infused with Jewish practices, used it to get a head start. Usury was not applied to goods taken or stolen from third-world-occupied countries until the midst of the 20th century. In many Western countries, stealing goods from the Far East and Africa was common. Those goods were then sold further to neighbouring, predominantly white countries free of tax. As long as Western countries benefitted each other, there were no questions asked.
At the time, there were no economic bodies overseeing trade, financial governance, or monetary watchdogs promoting cooperation and fair commerce. It was all about concurring and securing monetary enrichment, elevating countries for decades to come. This almost kin-like cosy support system helped gain economic power, global recognition, and impact. There was not much thought wasted on ethics, equity, or the well-being of others they successfully managed to disadvantage.

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The idea of lending out money and earning from that was normal. It still is, and that is okay but at what price? And though it is common sense to put your own first when it comes to overall financial advancement. The same principle of generating a passive income was applied to commerce dealings with fellow merchants. This affected the already economically deprived far tradings partners as well. Whose major financial disadvancement the occupiers played a vital role in.
And even after trade agreements and business deals on paper, interest rates were exponentially unfair.
Somewhere around there, someone could have raised concerns about the long-term damage caused by charging excessive interest rates. As it goes, most businessmen, financial pioneers and economists, especially in those times, did not think ahead into the future. Countries fell into sudden wealth or were handed the tools to improve the circumstances of their families. It was about quick financial gains and generational advancement.

No merchant thought about the long-term consequential use of usury. A stoic German would say, “Wir haben es night gewußt.”

A reference from today’s economy to the financial aftermath of long-term interest rates is the modern-day housing market, where mortgage loans are basically financial suicide.

Within the Islamic financial system, the concept of interest is forbidden. Islam goes a bit further in the protection of its civilians in this matter. Those who are tempted are discouraged from engaging in this economically harmful and financially damaging practice.

Interest is a means that increases economic dependency and restricts individual economic liberty. Interest is a tool used to reduce civil liberties to limit economic freedom. Accumulated interest is the root cause of the economy’s coming to a halt. Interest is the only tool that governing bodies can manipulate in a way that imposes an economic crisis. A mechanism that is exploited by governments should not be taken lightly or dismissed as part of the normal flow of an economic cycle.

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Warsan Garrow
Warsan Garrow

Written by Warsan Garrow

Observer, Critical Thinker, Optimist & Passionate writer❣My work is intended for educational purposes | buymeacoffee.com/warsangarrow | Ko-fi.com/warsangarrow.

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