Credit has always been a very confusing thing.
Not just the mechanics of how it works but confusing to understand whether or not it is ''good''.
The image that credit evokes, through history, has only amplified this confusion.
While the image of credit in the ancient world, as told by philosophers, might bring up attitudes of “bans and shame,” as Rosa-Maria Gelpi and François Julien-Labruyère in their book The History of Consumer Credit Doctrines and Practices mention, it was the only means by which anybody could acquire goods and make purchases in the marketplace.
Within religious communities, with the sin of usury, it was with Thomas Aquinas that the Christian compromise on interest came about, as well as 'just' compensation that could be raised by a creditor.
However for every story there is about the perceptions of credit in times gone by, there is a counter-narrative. To say that there was a single way in which credit was viewed in the ancient world and through to the Middle Ages, is as erroneous as suggesting that credit itself is a recent development.
Though it is not coincidental that the image of credit, as well as lending, personal debt and profits raised on payments has a negative image, it is very interesting how we come by ideas of how such matters were generally perceived at the time. Popular histories and literary figures have done the most to raise our consciousnesses to how such things were considered, back in those days, and shape our opinions as to how far we have come.
We may well think of how negatively perceived the moneylenders were, how villainous Shylock was in Shakespeare's The Merchant of Venice, and how noble a demand it was to give to one's brother without the expectation of profiting personally from doing so. But it was never so black and white. The debates and discussions on matters of finance were very rich indeed, and we have a lot to learn from them. Further still - and whether we like it or not - with credit, history does tend to repeat itself. It is for this reason that I have chosen to contextualise my forthcoming book on loan sharks by looking back into financial history. Certainly to do so gives us a chance to reflect on some of the more contemporary debates we have around personal debt, and in doing so we often find that familiar truism rings true: first as tragedy, then as farce.
My point here is that so many of the debates we have today have been had before.
Notions of how much a person should reasonably be able to profit from lending, as well as the ethics of the business, are as old as financial transactions themselves. Issues concerning what measures to take when payments are deferred are no more unfamiliar to history than war and conflict are.
One cannot hope to properly critique the present-day operations of loan sharks and payday lenders without understanding history.
Carl Packman is the author of the forthcoming, Loan sharks.
Banking and payments
Transforming Public Services