Usury & Value
- Labor Theory of Value: value is determined by the labor of something
- Subjective Theory of Value: value is determined by the utility of something
Usury is an extension of the labor theory of value. It's saying that the value of something can be fixed in time and interest is due upon it based on what it was worth long ago. The problem is that the utility of whatever that something was original might have totally vanished.
A worker that knows that his labor only has value in the moment has an incentive to sell it immediately, since tomorrow it will have no value. By trading his labor in the moment for less than it's worth at that particular moment, but with interest attached to it, is able to solidify the value of his labor longer than the utility of his labor. This becomes a way to avoid the market forces that would diminish the value when measured through utility and shifts it to value as determined by labor instead.
Anyone mediating a dispute might recognize that there was a component of labor that occurred in the past, but the utility of the person's labor is useless at the present time. Labor in the past has no utility and value only remains in the utility that remains. Nobody can owe a debt for something that has no present value.