Correction: Jews are forbidden to lend at interest to other Jews (and even then there's Hillel's prozbul) but are explicitly permitted to lend at interest to non-Jews. As a matter of fact, one of the blessings Israel will merit if it is faithful is that it will lend and not borrow, whereas one of the curses for unfaithfulness is that it will borrow and not lend.
I confess that I am not aware of whether or not non-Jews are permitted to loan at interest, but I could find out.
There are good things and bad things about interest and capitalism. A good thing is that it enables social mobility. A bad thing is that this very social mobility is at odds with traditional pre-capitalist society. The highly stratified medieval European society was derived ultimately from the hindu caste system, and while much more sane morally required one and all one's descendants to be doomed for life to the same social status . . . which was fine if one was nobility, but not if one was a serf. The truly Theocratic society of ancient Israel was neither medieval Europe nor the modern "West" but rather something quite unique.
Unfortunately, Catholic and palaeocon anti-capitalism/usury is often a front for anti-Semitism (please note that I am not accusing you of this; I'm merely pointing out that this is so). But at any rate, this point of view is almost absent from American conservatism, and more American conservatives need to be exposed to it, whether they agree with it or not. For this your post is much appreciated.
Whatever similarities there may be between a feudal society and a caste society, the former did not derive from the latter. Hindus had virtually no contact with Europeans until well past the era of feudalism, which declined in the 14th century partly as a consequence of the Black Plague, when labor became scare and workers were in a position to demand wages.