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Currently, usury is thought of as the act of charging an interest rate that is above the legal ceiling for interest rates. In earlier times, usury referred to any interest whatsoever and was sometimes favored and sometimes scorned. There is a long history of prohibitions against credit market activity. It is our view that religious and cultural taboos are based on the notion that lenders are compensated for no legitimate labor. While this view is correct, it misses the point. Interest is lenders’ compensation for not consuming or investing so that others, borrowers, may do so.

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