That proscription is just wrong, in exactly the way you would expect laws written by uneducated tribal people to be wrong.
There's nothing wrong with assuming that in the ancient past people were less educated than they are now, and the general claim "religious beliefs are stupid" has been proven to the LW community's satisfaction. You, though, are making two claims that go far beyond these truisms: (1) that uneducated tribes are stupid in some specifiable pattern X, and (2) that "don't lend interest" exemplifies pattern X.
I wish you had specified what sorts of errors "uneducated tribal people" are especially prone to making, so that we could evaluate your claims.
In my opinion, Bronze Age agricultural tribes were well-advised not to charge tribal members interest! Because of the vagaries of nature and the low levels of technology, even a hard-working and relatively intelligent Bronze Age yeoman farmer might occasionally need a cash loan to keep his farm running. When he did, there was a decent chance that one of his fellow tribesmen actually would lend him the money at no interest -- tribes had an interest in keeping tribal ownership over their land, and if no loan was made, the failed farmer's land would pass out of the tribe. Because members of the tribe were closely related in terms of genetics, ideology, and social ties, altruism within a tribe was a fairly strong force, and repayment on a zero-interest loan could be effectively enforced with threats of ostracism.
Allowing people to charge each other interest in this scenario would only result in a small increase in the number of hard-working but nevertheless failing farmers who were able to secure loans. It -would- result in a large increase in the number of greedy consumers who would be able to secure loans, because instead of lending to "your brother" out of a sort of tribal altruism, you're lending to "your customer" for the sake of the interest, or, more accurately, the collateral. Since the discount rate was incredibly high in ancient times on account of how war, plague, and drought were likely to destroy investments and extreme poverty made people 'impatient,' the commercial interest rate would also have been extremely high...maybe 200% or 300% on an annual basis even for a reputable lender. There's no way that most farmers would be able to earn that kind of rate of return, so they would wind up losing the land that they put up as collateral to their creditors. Thus, the main effect of allowing commercial interest would be to concentrate good farming land in the hands of savvy loan sharks.
This seems to me like the kind of problem that's worth passing legislation to solve.
Obviously, today we think the risk of capital being concentrated in the hands of loan sharks is trumped by the reward of at least some capital flowing to entrepreneurs, and we're probably right. But in ancient times, there weren't nearly as many entrepreneurial opportunities -- higher transportation costs, slower technological growth, and huge discount rates made most kinds of entrepreneurship impossible.
I don't see what you are disagreeing with. The proscription is wrong today, however useful it was then, because it was not written by people aware of how things would change in the time since its creation. A god with the power to predict the future could have created a better code, but human beings who didn't even know what capital was couldn't be expected to (and, in fact, didn't).
Your remarks are apt and informative (I upvoted), but PhilGoetz hasn't actually written anything incorrect, yet. I approve of putting a go stone out to block the common error, but I wouldn't have worded it as a disagreement.
Exodus 22:25, Leviticus 25:36, and Deuteronomy 23:20-21 forbid Jews from charging interest on loans to "your brother" (other Jews). (This is to me the most convincing argument against Judaism and Christianity, because it's too simple to argue around. That proscription is just wrong, in exactly the way you would expect laws written by uneducated tribal people to be wrong.)
Roman Catholics believe they must follow the Old Testament laws, except for the ones they don't have to follow; but during much of the middle ages in Western Europe, this was one of the ones they had to follow. They interpreted "your brother" as meaning "brother Christians". So Jews could lend to Christians with interest (and, presumably, Christians could lend to Jews). This was convenient for everyone. The Jews were necessary to work around an irrational moral prohibition of the Christians.
Of course, the Jews had to take on the guilt of violating the moral code, even though it was for the benefit of the Christians. (This was also convenient; it meant that after some Jews had loaned you an especially large amount of money, you could kill or expel them instead of paying them back, as the Spanish monarchy did in 1492).
Later on, some orthodox Jews hired goyim to turn lightswitches and other electric devices on and off for them on the Sabbath. They're called Shabbos goy, the Sabbath goy (thanks, Alicorn!).
JCVI is considering moving from an on-site hardware grid, to cloud computing. There are lots of reasons to do this. One is so that Amazon can be our Shabbos goy.
We develop lots of bioinformatics software that we're supposed to, and would like to, give out to anyone who wants it. But if you don't have 800 computers at home, connected using the Sun Grid Engine with a VICS interface and using a Sybase database, with exactly the same versions of C++ and Perl and every C++ and Perl library that we do, you're going to have a hard time running the software.
We can't put up a web service and let anybody send their jobs to our computers, because then some professor is going to say to their freshman class of 200 students, "Today, class, your assignment is to assemble a genome using JCVI's free genome assembly web service."
If we could charge users just a little bit of money, just a fraction of the cost of running their programs, we could probably do this. Then people wouldn't be so cavalier about running a program repeatedly that takes 500 CPU hours each time you run it.
But we can't, because we're an academic institution. So that would be evil.
So we need a Shabbos goy. That's Amazon. We can release our software and tell users, "All you have to do to run this is to get an account on the Amazon cloud and run it there. Of course, they'll charge you for it. They're evil."
(The Amazon cloud is evil, BTW. They charged me for 21G of RAM and then only gave me 12, and charged me for 24 1GHz processors and gave me about 1/4 of that. I spent over $100 and was never able to run my program; and they told me to stuff it when I complained. But that's another story.)
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