If you understood economics, especially in terms of a free market, then you would realize that your conclusion is incorrect; there is a very real reason for interest. I challenge you now, as I have before, to explain just how economic functions can occur without interest. Do you actually understand just what would happen to the economy, at least to a free market, if interest were banned?
Many people, including you, have a complete misconception of what interest is within a free market, it is little more than the overall health or weaknesses within the market. It is the rate of business profit demonstrated as people within the market save, invest, employ people, manufacture products and distribute those products within the market…it is the expression of the entire market, all the economic movements of human action, a amalgamation of every possible factor playing its role, not only in economic terms, but in social and political terms. Interest denotes not only the health and profitability of the market, but the productivity as an economic measure; it even denotes either the responsible or irresponsible actions of governments. It provides for the balance of trade and regulates that trade in ways that are simply not possible under a managed economy or the so-called free-trade agreements which, are, in reality, nothing more than yet another form of a planned, centrally managed and manipulated market, but there is nothing free about such markets.
The fact is that without the vital function of interest within the market, the people would be far more than just deprived of their wealth and productive capacity, they would eventually be destitute for the market could not function without interest.
Interest relates specifically to the major functions that form an array of exchanges that take place every moment of every day through the voluntary agreements of people who seek to exchange one form of economic good for another form. In a similar way, a person who is seeking employment enters into a voluntary agreement with an employer, with the employer setting the wages based upon the skill of the employee or the going wage rate within the market for a give position.
Now, it is apparent that you have confused two distinct forms of economic processes, one being the free market which, if allowed, sets the rate of interest through a myriad of various mechanisms of exchange and the other is what we see around us, that system is one of Mercantilism. Mercantilism is where one party will always benefit at the expense of another party who doesn’t have the same political or financial connections as the other.
Since within any type of economy each person involved within an economic exchange will place a different degree of value on a good, whether it is an actual product or money, there is a time element involved with any form of exchange within the market. Now, because money evolved from a barter economy, money is essentially nothing more than a substitute for a given good or product. Money is the element of indirect exchange rather than direct exchange of those products. Thus, money is essentially no different than any other good except in the fact that the demand for money is prevalent within the economy due to its exceptional exchangeability. As long as there are choices in the market then the market is free, but the moment there are interventions into the market then there are distortions that arise which, if allowed to continue, create even more distortions and eventually a major dislocation of economic functions.
Competition, also vital to a free market, allows for the advancement of living standards by rewarding those who are innovative, skilled, and have the incentive to not only better their own lives, but also the lives of others who benefit from not only their products, but their ability to invest within the economy, thus spurring employment and more innovation, raising the standard of living. Contrary to the operations of free market operations, the Mercantilist market uses coercion, fraud, and exploitation and yes, what you consider usury to benefit at the expense of others. But the usury that is employed by the Mercantilist system is an artificial creation of a group of men who are dedicated to reaping the benefits of official government sanctioned redistribution, it is separated from market functions and eventually will collapse. Such a system always leads to a reduction in every economic function, such as production, investment, savings; the stock of capital and thus the results is a decrease in the overall standard of living.
If you want to see an economic system that essentially distorted, restricted and banned the free market functions within a country, including interest, then look at the former Soviet Union. There was essentially no actual use of market functions since the entire system was centrally planned by people that had no concept of either market functions or phenomena, or the importance of such functions and phenomena. Since pricing was not a factor neither was the understanding of value, because of this there were no private production and hence no exchange mechanisms. Like pricing, interest plays a very important role because it allows for the relative valuation of goods and services. Without pricing or interest it is impossible to have a valuation of goods and services functioning property within the market. Now only that, but even the distribution of labor is affected by either the artificial manipulation of pricing or, as you seek to do, the banning of certain functions that is essential to economic activity.
There is no possible way for anyone in Washington, New York or in any country to actually calculate prices, costs, interest or how to property manipulate those factors to the point that the markets can function adequately enough to maintain viability. The evolution of a Mercantilist system is similar to other forms of socialism, but in a much more obscured way. Such a system, like the socialist system and, in fact, like the system that you seem to promote, the right of private property and the title to that property is no longer defended, no longer respected or upheld on an official basis.
You talk about slavery as though it equates to interest, but slavery is the violation of a person’s right to his own person, his labors and his property. Essentially, based on your assertions, you would deny the right of a person or person’s property by banning the ability of voluntary contract between the lender and the borrower. You ideas would not only decimate the material holdings of people, condemning them to a world of poverty, but also would demoralize their spirit, relegating their lives to one of futility and ultimately despair. Your ideas are essentially no different than the entire “social justice” crowd or a form of socialism that is completely ignorant of the processes of the free market or the rights of the individual to control his property, the value of his labor, his inventiveness, free cooperation or engaging in free, private exchange and contracts.
"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun
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