Wonga’s Adrian Beecroft
Interestingly, it is thought that the concept of paying interest derived originally from the expected natural increase in a herd of livestock, a simple compensation for what the lender might have expected to accrue if he had not lent out his property. Somehow, as money has evolved into an increasingly abstract concept there has developed a disconnect between any natural basis for rates of interest and what often is charged.
The divisive effects of unchecked interest charging has been known since money itself first started to circulate and many ancient and diverse cultures have sought to legislate against it. From ancient Greece to ancient China, many countries have outlawed loans with any interest. Usury was at times denounced by a number of religious leaders and philosophers in the ancient world, including Moses, Plato, Aristotle, Cato, Cicero, Seneca, Aquinas, Muhammad, Jesus, and Gautama Buddha.
“And what do you think of usury?” — “What do you think of murder?” – Cato
“If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest.” – Exodus 22:24
“Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest.” – Deuteronomy 23:20
“…Out of thine own mouth will I judge thee, thou wicked servant. Thou knewest that I was an austere man, taking up that I laid not down, and reaping that I did not sow. Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?” – Luke 19:22-23
“Those who charge usury are in the same position as those controlled by the devil’s influence. This is because they claim that usury is the same as commerce. However, God permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with God. As for those who persist in usury, they incur Hell, wherein they abide forever” – Koran, Al-Baqarah 2:275
The First Council of Nicaea (325) forbade clergy from engaging in usury. The Third Council of the Lateran (1179) decreed that persons who accepted interest on loans could receive neither the sacraments nor Christian burial. Pope Clement V made the belief in the right to usury a heresy in 1311, and abolished all secular legislation which allowed it. Pope Sixtus V (1585 – 1590) condemned the practice of charging interest as “detestable to God and man, damned by the sacred canons and contrary to Christian charity.”
But slowly, over time the moral imperative has been supplanted by the profit motive.
Today we discover the Church of England’s £5.5bn investment portfolio included a stake in Accel Partners, a US venture capitalist that co-funded the launch of Wonga, a company that charges up to 5,500% APR.
Perhaps more importantly we should ask ourselves how it is possible that ‘Loan Sharking’ in the UK has become legal ?
Could it be because that Adrian Beecroft, who owns Wonga, has dontated more than £500,000 to the Conservative Party since 2006 ?
Could these generous donations to the Conservative Party also explain why Adrian Beecroft was commissioned to report on employment law soon after the Conservative led coalition came into power ? Know the man by his report, released on Monday 21 May 2012, the “Beecroft Report” recommended that the government should cut red tape in order to make the hiring and firing of employees easier. This apparently, was one of the least offensive suggestions that made it past the spin doctors and was actually published.
‘Donations’ to political parties are tax deductible. So if you want an example of ‘having your cake and eating it’ then look no further than donations like this. These ‘donations’ have effectively cost Adrian Beecroft nothing. In fact, it could be argued that these ‘donations’ were made at the expense of the general public.
But of course, Adrian Beecroft got nothing from this ‘philanthropy’, did he ?
So what next ? Arise Sir Adrian ? Lord Beecroft of Wonga ?