Lending money at interest makes sense when it is in effect a contribution to a productive enterprise, that is, when it is given to someone who will use it for a profitable enterprise and pay the interest out of the profits. It is also inevitable in commercial lending, because anyone who provides a service - such as a loan - will inevitably want to be paid for his service, above and beyond the return of his capital. However, that something is inevitable does not make it any less dangerous. I have mentioned Warren Buffett exactly because he has become the world's richest man by wisely investing his and other people's money in long-term, productive businesses; but for every Warren Buffett who looked to the long term and to what business was actually meant to do, there are inevitably hundreds of gamblers who only want to see the colour of more money.
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Date: 2008-10-14 04:08 pm (UTC)Lending money at interest makes sense when it is in effect a contribution to a productive enterprise, that is, when it is given to someone who will use it for a profitable enterprise and pay the interest out of the profits. It is also inevitable in commercial lending, because anyone who provides a service - such as a loan - will inevitably want to be paid for his service, above and beyond the return of his capital. However, that something is inevitable does not make it any less dangerous. I have mentioned Warren Buffett exactly because he has become the world's richest man by wisely investing his and other people's money in long-term, productive businesses; but for every Warren Buffett who looked to the long term and to what business was actually meant to do, there are inevitably hundreds of gamblers who only want to see the colour of more money.