Money is a funny idea. As natural as it seems today, our ancestors rebelled against it for centuries (ask Mutual Aid). Money is an incredibly useful tool, but it has huge social and institutional effects, where the minutest choices in the arbitrary rules surrounding it can have huge differences.

We choose to use a single idea of money as exchange for both items and actions (but not jobs or college admissions), land (but not air), advertising space (but not ideas), institutions (but not people), power (but not freedom), and security (but not safety). Money isn’t supposed to be used to buy and sell sex, votes, or ideologies, but it is. We allow money to be given away or held indefinitely, irrespective of the individualness or ephemeralness of its original granting. And we allow those who most directly generate the profitable products and services to get the least money.

But I’m not arguing against money or property today– they’re ideas that work awfully well. Capitalism provides for something like liberty, opportunity, and a high standard of living in a way no other system has come close to. I want to argue against one particularly funky practice: the use of money to make more money– that is, usury.

Usury is an ill-defined term. Lending is complicated business, and different degrees of justice are served by different limits on interest. The extremes delineations are at zero interest and free-market interest. With proper safety-nets, charging nothing extra seems perfectly just, if not more than just. Similarly, it seems fairly unchallengeable that charging more than what you could get on the free-market is clearly usurious. But there are finer gradations between.

Just up from zero interest is the charge to cover basic assessment and handling of a loan. I’ll call this epsilon interest, because I think it’s comparatively small (but it doesn’t make much difference if it’s bigger), and I include it in the other levels. Then there’s risk-insurance interest, set at a level to protect its lender from a disinterested party’s estimation of the risk of the endeavor. Sure, it’s theoretical, but it’s useful. Either above or below that level is the current “risk-free interest level”, which is whatever return the lender can get investing in risk-free endeavors (corporate finance people scale everything in terms of this interest rate). Finally, there’s the combination of risk-insurance, risk-free, and epsilon interest. In theory, the market drives toward that line of justice and interest, but not very well, as evidenced by the recent explosion of payday loans.

Good arguments could be made for crying usury at any level. I’ll argue that the limit of unjust interest is at the greater of the risk-free interest or and the risk-insurance interest. Call this the tipping interest.

I claim that the use of money to make its possessor more money is inherently unjust. Money is liquid incentive or liquid power *over other people* (directly or indirectly). If we want to ask if someone has gotten wealth justly, we have to ask, “By what do they *deserve* this wealth?” In a capitalist economy, you can justly exchange your property or use your time, mind, and body to get money, and the perceived worth in your items and actions is reflected in the money you get. You deserve the money for the worth you’ve provided.

The argument goes that, similarly, lending money is a kind of providing worth for which you should be compensated. But how can the worth of lending the money be greater than the money itself? Lending money is not the same as providing a service. Moreover, money transfer is not made just by all parties agreeing to the same contract. At best, that fact adds no injustice, but the question of deserving still needs to be answered.

At the tipping interest, investors are assured a risk-free level of interest, or the opportunity for more profit on risky endeavors. Why, then, would they loan to anything but the most institutional and conservative projects? The answer is, for *any* other reason, except for the money. The tipping interest ensures that the incentive for investment isn’t greater wealth, thereby removing the relentless drive on capitalist systems to sacrifice everything for profit. If only for the smallest reason, investment in a system with the tipping-interest cap is based on values– the non-monetary gains from the investment.

Allowing money to make money is at best unnecessary. It accelerates economic growth, which drives “poverty and hunger, environmental destruction, resource depletion, urban deterioration, unemployment” (ask Jay Forrester). It entrenches and extremities the economic divisions in society. It builds money-centered thinking into every aspect of life.

Will capping interest levels decrease opportunities for ventures that need capital, or otherwise harm the good things about capitalism? I doubt it. Investors will still have an incentive to invest their money– just not extra incentive. If this cap means that less money is in circulation, it will only increase the effective worth of those who don’t have much of it. It will decrease the worth of owning capital, but the greatness of capitalism is in the freedom, opportunity, and fluidity it provides, not its ability to support an upper-class. The tipping-interest cap equalizes society by decreasing the self-fulfilling power of the powerful and cuts capitalism’s bottom-line-is-the-only-line exploitive feedback loop.