The Evolution of Interest and Debt: From Middle Ages to Modern Times

Abstract

It would be difficult to examine interest-free alternative financial systems without reviewing the evolution of debt practices, thus, this book offers a chronological account of the development of interest-based debt transactions and contributors offer their take on how the issue of interest has been addressed throughout medieval and modern civilizations. The book provides a review of the impact of these interest-based transactions and practices upon social relations and institutions, throughout the history of modern economics, observing the relative conditions of the time and, as such, will shed light on the ongoing problems as well. The authors assert that the development of the concept of interest can be traced through three historical periods. The first period covers the emergence of social issues associated with the practice of interest in ancient times, and the introduction of partial measures to deal with these problems, offered particularly by the authorities of divine religions. The second period covers measures from a more radical stance, as introduced by the major religions, with the same foundations and principles at their core. The third and final period, examines the arguments that justify interest-based transactions and particularly how the stance of major religions has been translated into a basis of support for these transactions. Each period presents its own dynamics and helps analysts better understand the history and roots of interest-based transactions. While the book is grounded on research that relies heavily on historical sources, it offers a contribution to the literature on economics as well, since the historical findings are analysed in the context of economic terms and theories. An interdisciplinary effort, the book will attract attention of those who have an interest in finance, economics, history, religion and sociology.