The mitzvah to give a loan to a fellow Jew in need comes from Devarim 15:8, “Rather, you shall open your hand to him, and you shall lend him sufficient for his needs, which he is lacking.” However, in this week’s Torah portion of Mishpatim, the Torah gives an additional instruction, when one does give a loan to his fellow Jew on how not to do it: “When you lend money to My people, to the poor person [who is] with you, you shall not behave toward him as a lender; you shall not impose interest upon him” (Shemos 22:24).
Based on this pasuk, “When you lend money…” The Medrish Tanchuma says “This is what is meant when it says “He who increases his riches with usury and interest gathers it for him who is gracious to the poor” (Mishlei 28:8). How does this happen? If a Jew needs a loan and then a non-Jew comes and asks for a loan. If he says it is better to lend to a non-Jew and charge interest then to lend to a Jew and not charge interest, and by doing so becoming wealthier, to that King Shlomo screams ‘He who increases his riches with usury and interest’. ‘Gathers it for him who is gracious to the poor,’ refers to Eisav. Was Eisav really gracious to the poor, wasn’t he oppressive to the poor? Rather what this means is that the government will hear about the usury and interest, and challenge him over his rights to it, then take his money and build from it buildings for the need of the country, bathhouses, and structures made out of pillars and canopies to stroll under in order to protect the public from sun, rain, and to direct clear breeze to cool people down. All this for the need of the country and those who pass through and return into the country and that is what’s meant by ‘gathers it for him who is gracious to the poor’ (Medrish Tanchuma, parshas Mishpatim, paragraph 19). (Click here for Hebrew text.)
Though this Jew did not transgress the prohibition of charging interest to a fellow Jew, but he still did not fulfill the mitzvah of giving a loan to a fellow Jew, a brother in need, in order to make an extra buck by lending to a non-Jew. For this reason, measure for measure, Hashem does not allow the money he earned to stay in his hands rather it is collected by “him who is gracious to the poor,” meaning Hashem causes this person to be stricken with poverty by flesh and blood because it is the nature of the government to punish him and confiscate his wealth in order to be gracious to the poor. (See the Bi’ur Ha’Amarim on this medrish.
The Jew in this case was not asked to give up any of his money; a loan must be paid back. Hashem just does not allow him to earn more money at the expense of his fellow Jew when he is in need. We see from here that the result of not lending to a fellow Jew in need, and instead lending to a non-Jew in need just to make money off interest causes the government to have a claim against this person’s wealth and raise his taxes in order to support those who are in need. However, why is this a punishment, why is it any different than giving tzedaka, teruma, maaser, peah, or anything else which the Torah says you must or should give up your personal wealth for in order to support your fellow Jews who are less off then you are?
The difference is that by mitzvos like tzedaka you might be losing money but you are gaining eternal reward, and even in these cases, for example maaser, tithes to the poor, Hashem guarantees if you abide by the mitzvah you will become rich. However if the government collects a large portion of your wealth to give out to the poor and support the infrastructure of the country you don’t get any reward in this world or the next, this is why it could be a punishment.
It would seem that Hashem had in mind ideally for individuals or even private groups like charities or a kupah, to set up systems of distribution to those who are not as well off or in need. There are even rules in maseches Bava Basra 7b-8a about the upkeep of individual cities, their roads, walls, security, etc. These individualized systems are in order for both the giver and recipients to benefit. However the control of government over people’s assets on a major nationwide scale perhaps could be a sign of punishment instead of a way of peacefully sharing the wealth in the world.