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• Peter Foges

  Jubilee: Notes on Debt Cancellation

  Tags:

  banking,

  Christianity,

  debt,

  economic crisis,

  economics,

  Holy Land,

  Peter Foges

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  It’s the debt, stupid.

  The millions of words that have been spilled on “debt creation” have described how we got into this mess, spending more than we had. Now, like Dickens’s Mr. Micawber, we face misery. After a thirty-year leveraged binge, we are hungover and enslaved to our creditors.

  And what has been true of Americans is true elsewhere. Ask the good people of Iceland, or Latvia, or Ireland. After decades of gorging on leveraged luxuries courtesy of the neoliberal post-Reagan Washington consensus, they too are broke, their governments forced to seek bailouts from the usual list of global creditors on socially ruinous and politically explosive terms.

  But how many words have been written on “debt cancellation, the idea that this obligation we all carry like a cross could be lifted in one stroke? Conventional wisdom regards debt cancellation as “nuts.”

  What people do not know--and arguably are not meant to know--is that debt cancellation is one of the oldest ideas around. Debts have often been canceled, even in modern times. In 1947, when it was politically expedient to do so, the Allies canceled all the debts owed by the German people to their Nazi creditors, thus enabling the German economic miracle in the 1950’s and 60’s--certainly a “good thing” at the height of the Cold War. Decades earlier, in 1931, Herbert Hoover created a moratorium on German war reparations in a futile attempt to stave off global financial collapse. Going back a bit further, English and Spanish kings frequently defaulted on their creditors, usually alluding to Christian prohibitions on usury. King Charles II suspended debt payments from the British Exchequer in 1672; Edward III did something similar in 1339.

  However, as economist Michael Hudson points out in a recent brilliant essay on the plight of Iceland, a great deal of effort has been expended to obscure the fact that legal systems once allowed debt cancellation, not just for governments deemed “too strategically important to fail,” or for bankrupt kings, but for everyone. Laws and codes were amended on behalf of creditors and national elites, he argues, to put their interests above those of debtors. The rise of the over-mighty banking class took a thousand years.

  The charging of interest was a Babylonian invention. However, agrarian debts and obligations were regularly canceled. In 1646 BC, Ammi-saduqa, the tenth ruler of the First Dynasty of Babylon and the grand son of Hammurabi, the great giver of laws, issued a misharum dissolving the debts of farmers, shepherds, and the “collectors of animal carcasses.” In fact, the word misharum, means “justice.” Another word frequently used by Babylonian rulers was andurarum, a “clean slate.” This idea of starting over was later incorporated into ancient Jewish law.. The Hebrew word deror is derived from the Babylonian andurarum, and implies not only the cancellation of debts but the freeing of slaves as well.

  Babylonian debt cancellation edicts were issued at irregular and unpredictable intervals. Debt cancellation is at the heart of Jewish law. In the Jewish tradition it is a regular occurrence. In the Old Testament God commands that a jubilee be held every fifty years - a time corresponding to every seventh sabbatical year when land was to be allowed to lie fallow, all property was to be returned to its original owners or their heirs, and indentured servants--especially Israelites--were to be freed. The English word jubilee comes from the Hebrew word yobhel, a special ram’s horn, a blast of which heralded the arrival of a such a year, a presumably joyous sound not been heard in the Middle East or any where in quite a while.

  However, Hudson contends that creditors have often used ruthless methods against debtors, and that rentiers have fought fiercely for their rights. Plutarch tells us for instance that Agis IV, King of Sparta in the third century BC, was murdered for attempting a debt cancellation on behalf of his subjects. In 130 BC, the same fate waited Tiberius and Gaius Gracchus, who were pushed over a cliff by Rome’s bankers. And a few decades later, touting debt relief for Rome’s impoverished masses, the mysterious and radical Roman conspirator Catiline moved against the decaying republic’s aristocratic banking class before his inevitable defeat and death in 63 BC at the hands of Cicero and the imperial establishment.

  When Christians pray to God--many of whom are these days asking for succor at a time of financial woe--some ask quite literally for debt relief: “Forgive our debts, as we forgive our debtors.”

  That is how the Lord’s Prayer goes in Matthew’s Gospel in the 1611 King James translation. And that is how many reform Protestant congregations recite it to this day. Not for them the more familiar and banker friendly forgiveness of “sins” or “trespasses.” The author of Matthew, writing in Greek, uses the word opheilemata, which literally means financial debt. After all, if Hudson is right that creditors have generally used violence to enforce their extractive revenue privileges, then Jesus in the Temple may be history’s one exception, attacking with his bare hands, the bonus-reapers of his day.

  August 5, 2009
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