The problem with usury

Usury has two legs, an individual intentions leg and a systemic/societal leg. It can stand (shakily) without one or the other, but not without both.

Individual intentions

Usury comes from the same root as the verb "to use". A world in which individuals see each others as a means to their own ends, or more bluntly as Hobbes said "a war of all against all" leads to hell, and many traditional religions recognized this and forbade usury, at least within the tribe (aka intra-tribal).  We're talking mostly rent and lending at interest, but it generalizes beyond that. This has an easy "fix": if we see each other instead as manifestations of the sacred and try to make our relationships with each other based on that perception, we may have a taste of heaven on earth. From an evolutionary game theory perspective, forbidding usury and instilling the sacred intra-tribal relationships perspective is a way to reduce intra-tribal conflict and impose a cost (when the rule is broken) on "defectors" (aka free riders, landlords, money lenders, some politicians, etc), which gives a selective (inter-tribal) advantage at the group/tribe level compared to groups/tribes that don't use this strategy.

However, even the best of intentions, where we want to create a relationship based on the sacred within the people involved in an economic transaction, can lead to hell, in a system whose foundation is short term individual benefits with only long term individual costs, or externalized costs to others. Such a system (e.g. our current global economy, whether in capitalist or socialist form) inevitably goes towards massive inequality, which destroys communities and families, which ironically individuals need for optimal functioning. This is a systemic problem, not an individual one, and it's solution is also systemic (as in we need a different economic system).

Systemic dynamics

Here's how it plays out: some get wealthy just by having land or money, which they can leverage to make a much greater (money) / (labor spent) ratio than most people with less money. If we start with everyone having an equal amount of resources and add a tiny amount of random inequality of resources, or even random inequality in self-interest, it's an unstable equilibrium where the initially slightly richer (or slightly more self-interested, or even just slightly more entrepreneurial) get even richer and the initially slightly poorer (or less self-interested, etc), who have to pay the bulk of the interest and the rent to the rich, get poorer. Sometimes it's even indirect, where the rich rent to other rich people, who are using other poor people through rent or interest. The short term stable equilibrium is massive economic inequality, but that is also unstable in the long term as the poor revolt against the rich. And this can happen at any scale, even a small village, or a family. That is why stable families are mostly based on a gift economy, and long-lived villages do not have money lenders or landlords within the village. And that is why villages and families which adopt and mimic the current global economic system within themselves are not stable, also leading to individual unhappiness.

Possible solutions

One possible solution is to forbid usury (as some mainstream religions have done), but people are very clever about circumventing prohibitions and attempts to legislate morality. Things are not always black and white: I'm not really renting the house to these folks, it's a mutual gift....

Another possible solution (favored by conservatives, though they won't necessarily admit what is being done) is propaganda (this word does not necessarily entail deceit) campaigns by the government and the wealthy to make the poor either aspire to be rich or at least middle class (and sometimes succeed to various degrees) by playing the game, to look forward to a reward in an afterlife, or to identify with the rich or middle class through other shared "identity" traits (even though they are wealthier and have all these perks that we don't, we can identify with some of them who are white, black, women, men, american, pakistani, christian, jewish, muslim, gay, straight, entrepreneurial, hard-working, talented, coke-drinking, etc), and by identifying with them, resist the temptation to be murderous towards them (in sociological terms, they are no longer considered an out-group, they become part of our in-group). This is a containment solution that might succeed in preventing revolt for a while, but does not prevent the massive unhappiness of a large part of the population that is either not able to be of use to family and community (aka unemployment), is toiling under alienating conditions, and is often causing harm to nature or other people far away and in the future.

A third possible solution (favored by many liberals) to this systemic problem is the redistribution of wealth by a big government through taxation, or subsidies to the poor. It has the problems of creeping burocracy (with its own version of inequality and dampening of initiative) and disempowerment of poor people, which I don't want to get into here, suffice it to say that it is not a good long-term solution.

I don't know what a good solution is (can you help me figure it out?), but I can speculate based on my best understanding of the problem that it involves localizing the economy so that it is easier to see the effects of our actions on other people and even on ourselves, in a short enough time. This is the solution that was favored by tribal societies, families, rural villages before the industrial revolution, Gandhists, and catholic distributists.