All the major religions, including Marxism, decry usury, defined as charging interest on a loan of money. Later generations have universally discovered that loans charging interest are an important component of any economic system, and many mealy-mouthed workarounds have been developed to enable doing so without technically running afoul of the religious authorities, one of the most blatant being “carrying charges” — the lender explains, with solemn and serious mien, that delivering so much cash is dangerous, requiring guards and precautions and a consequent extra charge. Another workaround is to declare “usury” as constituting excessive interest, which runs into the same problem as you get with “fair”: there is no clear breakpoint between “reasonable” and excessive, and what is “reasonable” (or “fair”) to one person may be excessive to another. Controversy ensues.

In reality, though, it’s a matter of terminology. An example might help.

Suppose person A needs to transport goods, for whatever purpose — perhaps to take crops to market, or when moving house. But A has no donkey (or, in modern terms, no truck). What to do?

A relative, friend, or neighbor, or even a good-hearted stranger, might lend a donkey (truck). A is expected to return the loaned item in good order when he is done with it, but there is no charge involved other than, perhaps, a quid pro quo, a favor granted to be called in later. In fact, a charge violates the very notion of “friendship”.

But if no such person appears, A is stuck — or is he? Not quite. He is likely to find that there are several (less good-hearted) strangers who are willing to rent a donkey (truck) to him. As with lending, A is required to return the item in good order when he is done with it, but unlike lending, he is also expected to pay a usage charge — rent — for the time he is using it. This is an unremarkable transaction, made every day in every society that actually has something that could be called an “economy”, and no religion other than, perhaps, Marxism finds anything untoward about it on the part of either party. Indeed, at various times and places religious authorities have been notable, and sometimes notably rapacious, landlords, all the while decrying “usury”.

A is willing to pay rent because he gains some advantage by using the item, that is, he profits by it. But suppose the profit anticipated is large. A might very well come out at the end of the transaction with enough resources to buy a donkey (truck). If so, everyone is pleased. A’s customers have the goods they wanted, the owner gets his donkey back, and A has a new asset.

In that case, A might well decide to short-circuit the process somewhat. He goes to banker B and borrows the price of the donkey. He then goes to another (even less good-hearted) stranger, pays for the donkey, and uses it for the purpose intended, then returns the money to B, who wants a premium — “interest” — over and above the amount “borrowed”. Usury!

But, in fact, the banker didn’t lend anything at all. He rented funds out, and expects to be paid for their use, just as the donkey’s owner wanted to be paid for the use of his animal. In either case, the rented item must be returned in good order at the end of the time of usage; in either case, the usage incurs a charge. Calling one payment “rent” and the other “interest” obscures the reality. A wishes the use of a valuable item for a short period, and is required to pay for that use.

The Bank of America doesn’t lend money. They rent money out to people who want to use it for purposes of their own.