Debt, Credit, Interest

Out of that dampening function of society comes that thing called debt or credit, depending on which side you look at it: today I have eaten your eggs, therefore I have a debt to you and you have the corresponding credit toward me, until tomorrow when you will eat my fishes.

And out of debt/credit comes interest. Today you have eggs and I don’t have fishes, and so for your eggs today you ask me a handful more of fish tomorrow; tomorrow I’ll have fish and you’ll not have eggs, and so for my fish tomorrow I’ll ask you one more egg the day after tomorrow. Or, today you have grains of wheat and I don’t, and so for some of your grains today you ask me some grains more tomorrow.

Both borrowing/lending and earning out of lending are controversial subjects, so some examples may help evaluate when they are ethical and when they are suppressive.

Is it right to borrow/lend? if you give me some of your eggs, or grains of wheat, you apparently decreased the wealth of your small group, your family, on one hand, but increased that of your wide group, your fellows, on the other, and a stronger wider group will make your smaller group stronger, too. Provided I roll up my sleeves and grow more wheat.

Credit can also have a leverage effect: suppose a given resource produces a given amount of survival factors, and has a given cost. To purchase it one had to set aside the corresponding purchasing power by saving one’s surplus, accumulating it little by little, which would require a given time. If one borrows that purchasing power one can purchase that resource sooner, so it can start producing survival factors sooner. It’s just ethics as usual: is that beneficial – really beneficial – for all? On the one hand, one ought to weigh up the pros and cons of getting the production in advance against the cost and indebtness for borrowing the means to acquire that resource in advance. But on the other hand, beyond the specific case, one has to take into account the ethics of the philosophical side of it as well, in that a whole concept of conducting business on debt develops on this basis, whose ethics is indeed questionable.