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Introduction:

The first historic document that tells us about the problem of interest is the laws introduced by the king Urukagani 4300 years ago. One of the laws abolishes all debts. Obviously the people of that Mesopotamian society must have been heavily burdened and angered by the interest payments to the rich, so the king had to take steps against rich people to secure stability in his society.

In biblical times money lending that earned interest was called usury and regarded as morally wrong. In the Islamic tradition interest on loans is regarded as contrary to the Koran and forbidden. Islamic banking businesses find ways around this and charge fees or make &ldquo;profit sharing&rdquo; agreements that are not too different from interest.

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In Medieval Europe, usury - meaning to charge (unreasonable) interest - was regarded with much scepticism, as the ruling classes relied on ownership of land to stay rich, whereas the merchants of the cities were rich, because they owned gold (capital). The cities of Northern Italy were since the 1200s dominated by merchants. It was here European banking was established and &ldquo;banca&rdquo; was the word for benches covered with a green cloth used by Italian bankers.

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When Spain colonised the Americas they forced the Indians to deliver large amounts of gold and silver to the king, who got very rich, but the real winners were the bankers of Holland and England that financed the traders who delivered goods to Spain. Wars were particularly good times for the bankers, who financed the armies of the kings of Europe earning high interest. As wars were frequent the bankers grew to be the most powerful force in Europe. They financed colonial expansion, the Catholic church, the slave trade, the opium trade and many other ventures.

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One of the most famous banking families is the Rothschilds. In the 1700s they established themselves across Europe as a leading banking house. One Rothschild is believed to have said that he did not care which puppet was sitting on the British throne as long as he controlled the money of the British Empire.

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The family today keeps a low key and do not disclose much about their wealth but is among the richest in the world.

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In ancient times, there was no money, and interest was therefore charged on what had been lent. If a farmer had borrowed 10 bags of corn to sow his fields he would have to pay back 10 + 1 bags after harvesting. But when gold was used for money it became easier to charge interest because gold could be used to buy anything.

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Today interest is charged on money issued by central banks such as The Bank of England or the Federal Reserve of USA. All major central banks except the Chinese are owned by other banks and bankers decide over the printing of new money. New money is created when banks give loans. Thus, to expand the amount of money in circulation new loans must be given. The banks, however, are not satisfied with getting the money back but wants interest on top. Therefore the amount of money has a tendency to increase all the time and this can only happen when new loans are issued. In this way there is a close but not much talked about connection between interest and money.

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The debt crisis that hit many countries in Africa is a symptom of this phenomenon. Today African countries pay more in interest on loans than they get in development aid from rich countries. The charging of interest is therefore a very important factor in maintaining global inequalities.

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If loans are taken to create, expand or run a productive business they might be of great importance to the businessman, which could be a Poor woman investing in baking cakes to be sold in the market. However, because banking in most cases is run by very large private companies much of what is created and earned from people&rsquo;s productions ends in the coffers of the bank owners.

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