Book Review: The Jubilee – An Impossible Dream?

By Paul Mills 05 Aug 2019

'...and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year' - Michael Hudson (ISLET – Verlag, Dresden, 2018)

Debt forgiveness is back in fashion. After the 2008-09 financial crisis, a few analysts toyed with the idea of a debt ‘jubilee’ to relieve the burden of borrowing that had been amplified by the Great Recession. There were indeed a handful of prominent defaults and debt ‘restructurings’ (such as Lehman Brothers, Greece, Detroit, Argentina and Puerto Rico) but, in the main, record high debt levels continue to be serviced, helped by record low interest rates.

But the anaemic economic recovery and growing debts of younger households have rekindled calls for system-wide debt relief. Democratic Presidential candidates Warren and Sanders have both pledged to cancel swathes of US student debt if elected. Johnna Montgomerie (Kings College, London) now advocates the cancellation of a proportion of UK household debt to relieve crippling burdens.[1] 

Michael Hudson - and forgive them their debts

Such calls prompt parallels to be drawn with the periodic seven-year debt cancellation (Deuteronomy 15:1-18) and the Year of Jubilee (Leviticus 25) which involved the release of familial land from leasehold sale and Israelite debt serfs (v. 40) every 49 years. Although the idea of declaring Jubilee (‘the Year of the Lord’s Favour’) is seen as a redemptive task of the coming Messiah (Isaiah 61:2; quoted by Jesus to refer to himself in Luke 4:19), commentators invariably spiritualise the institutions of debt release and Jubilee. After all, there are no OT references to these laws being applied and economic chaos is assumed to have been the result if attempted.

It is against this backdrop that Michael Hudson’s new book casts fascinating light on the Biblical text and its potential application. Hudson is a financial economist with a particular recent interest in the economies of the Ancient Near East. His thesis is that, far from being eccentric and impractical, the Mosaic institutions of debt release and Jubilee had numerous antecedents in Mesopotamian practice from the 3rd and 2nd millennia BC; that periodic debt cancellation was economically beneficial to these societies and the rulers that practiced it; and that societies from Ancient Babylon to the Greek city states, the early Roman republic and the Byzantine Empire who eventually forsook such debt remissions became choked by creditor aristocracies, leading ultimately to their downfall.

Hudson’s early focus is on Sumerian, Babylonian and Assyrian rulers for roughly the two millennia from 2500 BC. These periodically declared the cancellation of all agrarian (‘barley’) debts, the release of debt slaves and the return of mortgaged agricultural land – usually soon after the accession of a new ruler, the building of a temple or the fighting of a war. While much of the debt cancelled was tax arrears owed to the central governing authority (and therefore self-imposed), edicts also applied to private debts for grain, but not mercantile debts for money. 

The motives of such rulers were both political and economic. The power base of a new ruler amongst the wider populace was cemented by periodic debt cancellation, while their ability to call on the general labour force for military service, public works and the payment of taxes was less encumbered by creditors having forced small-holders into crippling debt or debt servitude. Debt cancellation acted as a periodic reset and safety valve, to limit the ability of the landed class to immiserate the wider workforce and take for themselves agrarian surpluses that would otherwise be taxed or consumed.

“By clearing the slate of agrarian debts that had built up during the crop year, these royal proclamations preserved a land-tenured citizenry free from bondage. The effect was to restore balance and sustain economic growth by preventing widespread insolvency” (p.xi).

An additional feature and benefit of such laws were restrictions upon the ability of creditors to seize outright the land of defaulting farmers. The use of land returned to their original occupiers when a debt cancellation was proclaimed.

Until relatively recently, archaeologists had mistranslated ancient Sumerian and Babylonian references to debt and slave release and not understood that debt cancellations were periodically being proclaimed. But, on re-examination, we now understand that this was what was going on, thereby putting the Mosaic code in a very different light. Rather than being utopian laws that only found their fulfilment in Jesus’ work of redemption, Leviticus 25 and Deuteronomy 15 can be seen as more regular, frequent and predictable versions of economic institutions with an historic track record, designed to mitigate debt immiseration and concentration of land holding. As Hudson notes, this pattern of thought runs throughout the OT – from the initial wide dispersal of land ownership under Joshua (chs. 13-19) to God’s judgement on Ahab for seizing Naboth’s vineyard (1 Kings 21); from Isaiah’s condemnation of the rich for accumulating large estates (Is.5:8 – presumably through debt foreclosure) to Jeremiah’s condemnation of the non-release of Israelite debt slaves every seven years (Jer.34:8-22); from Job’s concerns for the ill-treatment of debtors (Job 24:1-12) to Nehemiah’s release of debt slaves and interest-free lending (Neh.5:1-19). Periodic debt cancellation may not have happened in practice, but it was God’s intention that its embodiment should have been actual as well as spiritual.

Shedding a light: should a 'debt jubilee' be declared now?

First, we should recognise that injustices will automatically arise from the unfettered operations of a credit system – our current predicaments of rising wealth inequalities and weak prospects for younger households arise directly from high levels of debt, and the servitude that it produces. There was great wisdom in a periodic debt reset to release the shackles and prevent the concentration of land and wealth in ever fewer hands. Second, we see greater wisdom and justice in the Mosaic code than contemporary practice as it made debt cancellation regular and predictable. Hence, creditors would know when debts were to be remitted and would be reluctant to lend at that time. To institute a debt jubilee ex post and without warning now would result in injustices not only to lenders but also to those who did not borrow or worked hard to minimise their debt. It might also induce a banking crisis if banks were forced to take losses for which they were unprepared. Third, we should facilitate the restructuring of personal debts when these become unbearable, to bring release from bondage.[2] Fourth, we should discourage indebtedness in the first place through removing the subsidies banks enjoy in the creation of debt and companies receive when borrowing. Ensuring that the money we use is not the debt of a bank would be a huge step to making sure bank depositors bore losses from risk-taking with their money rather than taxpayers.[3]

But perhaps the greatest lesson from Hudson’s book is that it has long been recognised by the Bible’s writers and from ancient times that Money may be a value tool but becomes a cruel master if left unchecked, employing debt as its slave-driver and oblivious to the relational devastation wrought by excessive concentration of wealth, power and land.  As was learned of old, in such circumstances societal collapse cannot be postponed indefinitely. If debts become unpayable, sooner or later a ‘jubilee’ will be declared anyway, whether through default or inflation. It would be far wiser to reduce our debt burdens in a controlled way before that happened.

Dr. Paul Mills graduated in economics from Cambridge University and worked as a researcher at the Jubilee Centre before returning to the University. Having completed his PhD, he worked as an economist specialising in public finance and financial markets in the UK and Washington DC. He’s the author of several Cambridge Papers on debt, interest and the Bible.

Further reading:

Guy Brandon, Crumbling Foundations: A biblical critique of modern money (Jubilee Centre, 2016)

David McIlroy, Time for a Financial Reformation, Cambridge Papers 26:2 (Jubilee Centre, June 2017)

Paul Mills, The great financial crisis: A biblical diagnosis, Cambridge Papers 20:1 (Jubilee Centre, March 2011)

Paul Mills, Prodigal stewards: The looming government debt crisis and what to do about it, Cambridge Papers 23:4 (Jubilee Centre, December 2014)

[1] Montgomerie, J., Should we abolish household debts? (Polity, 2019, forthcoming).

[2] For instance, student debt is not currently included for restructuring in the US personal bankruptcy code (Chapter 13).

[3] See Mills, P.S., 2011, ‘The Great Financial Crisis – A Biblical Diagnosis’, Cambridge Papers, March; Brandon, G., Crumbling Foundations, Jubilee Centre, 2017.

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