In our parsha, Parshat Ki Teitzei, we read about the prohibition of interest:
You shall not cause your brother to take interest, interest of money or interest of food, interest of anything that he may take as interest. (23:20)
Why is there a prohibition on interest specifically for a loan? If a person sells someone an item, he is permitted to raise the price, and if the two sides agree, there is no prohibition. Why is it forbidden to profit specifically from a loan?
The Gemarra discusses whether there is an obligation to reimburse a loan, or whether it is only the fulfillment of the commandment of "redeeming a loan". It is clear, with everything else, that a person must return an item, so why is there a discussion specifically about a loan; if a person gets a loan, obviously he has to return it!
All the above questions lead to one principle. The Torah ruled that a loan = a grant. On the one hand, the Torah allowed man to earn according to his ability (and did not impose a socialistic economy), but on the other hand, it ruled that man must lend to his friend when his friend is poor, and the Torah ruled that this loan will be a type of grant, because the money is not his but rather G-d’s.
This is also expressed in the Gemarra when it is written that "loans are extended to be spent". In other words, when a person gives a loan, this money does not belong to the lender at all. The borrower, if he wishes, can use the money to marry a woman. But the lender is not allowed to do this, because the money was given to the borrower ‘for expenses’, as a grant, and this money does not belong to the lender. Therefore, the lender does not have any rights to the loan right now, since it is the borrower’s property. Therefore, if he takes interest he is stealing from the other party (I heard this from my teacher and father-in-law Rav Blumentzweig Shlita).
This principle is explained in the Ohr Hachaim (Exodus 22:24):
"When you lend money to My people" – if you have more money than necessary for your needs, so much so that you are able to lend, know that "to the poor person who is with you" – you are holding on to the pauper’s share".
The accepted understanding is that the property belongs to the person and for specific reasons he needs to give it to another person. Here we have a dramatic change: the person’s property is not exactly his but rather "he is holding the pauper’s share". The balance of the money that the person has, is in effect, a deposit and he must give it to whoever needs it.
It is possible that this idea is hidden in the word "charity". The word charity always arouses in us the explanation "a donation to the poor" (Even Shushan, Explanation 4). However, this is not the origin of the word. The origin of the word is "justice". The explanation of justice is "integrity" (Even Shushan, Explanation 1). In other words: The person who gives charity, is not giving a donation, he is doing justice! He is acting according to the attribute of integrity. And the laws of loans are also part of this justice!
On the one hand, the Torah does not promulgate a social economy. There is no aspiration that everyone should be equal, and everyone should aspire to earn according to his capabilities.
However, there is the aspiration that there should be enough money in the world for the possibility to exist to help all people who are lacking. Even in the capitalistic system, many countries worldwide are welfare countries. However, many times there, the basic focus is to preserve capitalism for fear of a revolt of the masses. But in the Torah’s economy, this is an integral part of the economic system. Man can earn as much as he is able, but this profit will be used by him to help all those who need his help, so that in the end a better and more satisfactory world will be created.