Proclaim debt amnesty across the country? A Biblical Solution to a Current Problem | Kiowa County Press

Part of an edict of restoration by Ammisaduqa, one of the rulers of ancient Babylon. (c) Trustees of the British Museum, CC BY-NC-SA

Eva von Dassow, University of Minnesota

Student loan debt is one of the heaviest forms of debt in America today. According to often quoted statistics, approximately 43 million Americans have student loan debt, cumulatively amounting to approximately US$1.7 trillion. The exorbitant costs of higher education in the United States, combined with the fact that school credentials serve as a ticket to decent employment, force many students to take out loans that follow them long after graduation – and which are almost impossible to discharge from bankruptcy.

Therefore, calls for student loan debt cancellation through legislative or executive action continue to grow, and President Joe Biden is expected to respond by order the cancellation of a certain amountdespite arguments against any general debt amnesty.

Yet this very policy is enshrined in the American Liberty Bell. “Proclaim freedom throughout the country to all its inhabitants!” he declares, quoting the biblical book of Leviticus, 25:10. The Hebrew word translated “freedom,” “deror,” actually refers to debt amnesty.

A large bell is displayed on a stand, with a shaded courtyard in the background.
The Liberty Bell, with its famous crack, in Philadelphia. Joe Sohm/Visions of America/Universal Images Group via Getty Images

In the world of the Bible, it was customary to cancel all non-commercial debts from time to time. As a specialist in the ancient Near East, I have read many cuneiform tablets that record how people then – like Americans today – often went into debt to meet their expenses. They might mortgage their property to keep a roof over their head, only to find that ever-increasing interest made it impossible to repay the principal.

They faced the additional risk of debt bondage: people who did not have enough assets to secure their debts had to pledge their dependents or even themselves to their creditors. Their creditors have thus become their masters, and those pledged for the debt were effectively enslaved, unless and until they were redeemed. A debt amnesty decree would wipe the slate clean, get people out of slavery and restore their freedom as well as their fortunes.

Kings clean the slate

The earliest recorded examples of this practice come from ancient Sumer, a land south of what is now Iraq. Urukagina, ruler of the city of Lagash around 2400 BC. decreed a debt amnesty soon after he came to power, freeing people living in debt bondage to return home and even cleaning up prisons. In the Sumerian language, this amnesty was referred to as “amargi– “return to mother” – because it returned people to their families.

Urukagina was not the first to issue such a decree, and it may have already become traditional in his time. The practice of decreeing debt amnesty is widely documented in the Semitic-speaking kingdoms of Syria and Mesopotamia at the beginning of the second millennium BC. raise a golden torch and decrees “anduraru”, or “restoration” – the Akkadian equivalent of the Hebrew “deror”. The stated purpose of these decrees was to establish or restore equity. A king’s first duty was to uphold “justice and equity”, as Hammurabi of Babylon claimed to do when enacting its laws around 1750 BC

While lending at interest is not seen as unjust, the debt that robs families of their property and their freedom creates an inequity that must be addressed. An edict of “anduraru” restores equity, liberty, and family property by canceling debts incurred for subsistence – including tax arrears owed to the state – while leaving commercial debts untouched. When Hammurabi was on his deathbed, his son Samsu-iluna took over and issued a decree forgiveness of non-commercial debts, cancellation of arrears and prohibition of their collection; thus, he declared, “I established the restoration throughout the country”.

A restoration decree could also be issued to deal with a political or economic crisis. The usurper or conqueror, having brought a people under his rule, could establish their “restoration”, both by remission of debts and by allowing those who had been captured during hostilities to be freed. Hammurabi himself did it during the conquest of the kingdom of Larsawhich was part of ancient Sumer.

A stone relief shows two men with long beards: one standing, one hand to his mouth, the other seated and holding a stick.
Detail from a relief of King Hammurabi before the sun-god Shamash, from a stone stele bearing the inscription of his proclamation of laws and dedicated around 1750 BC. AD, discovered at Susa in present-day Iran. DEA / G. Dagli Orti/DeAgostini via Getty Images

Thus the conqueror could pose as a liberator restoring a disordered kingdom. The idea was to return the people of the country to their original state, before going into debt, losing their property or losing their freedom.

Not so forgiving

The issuance of debt cancellation decrees was sporadic and not periodic, so one never knew when it would happen. But everyone knew it would happen sooner or later. Financiers would therefore prepare for this eventuality to avoid incurring losses when debts were abruptly forgiven and their collection prohibited. They used various methods to insulate transactions and investments from debt forgiveness – because otherwise who would ever offer credit to those in need?

They developed legal fictions disguise mortgages, debt bondage, etc., as contracts of other types, avoiding their cancellation by decree. The decree of Ammi-saduqa, a king of Babylon in the 17th century BC, explicitly forbade such subterfuge, but the regulations were a step behind the entrepreneurs. Clever financial instruments immunized debt against amnesty and kept credit, as well as profits, in circulation.

Ultimately, a program of periodic debt cancellation was developed into biblical law. The Book of Deuteronomy requires the forgiveness of debts between Israelites every seven years, using the term “semittah” – “remission” – and stipulating that each creditor must forgive the debt owed to him. The Book of Leviticus adds the requirement to proclaim amnesty, “deror” in Hebrew, after every seventh cycle of seven years, restoring to each Israelite his property and his family in the 50th year – the jubilee year. Recognizing that a foreseeable debt amnesty would only facilitate the planning of creditors, Deuteronomy 15:9 cautions against refusing to lend as the seventh year approaches.

The biblical writers must have had some experience of the efforts of creditors to evade the obligation to forgive debts. According the book of jeremiahwhen Zedekiah, the last king of Judah, decreed “deror” in the face of the Babylonian invasion of 587 BC. AD, creditors agreed to free their enslaved countrymen, then found ways to force them back into slavery.

Not only was the apparent purpose of the debt forgiveness orders overcome by creative credit instruments, the real purpose of such decrees was not to solve the problems that made them necessary. People would still need to go into debt to survive, pay their taxes and keep a roof over their heads. They would always risk impoverishment, debt bondage and eventual enslavement. Sporadic debt cancellation has not eliminated chronic indebtedness, nor was it supposed to.

Instead, the function of these decrees was to restore socio-economic balance – and the tax base – enough so that the cycle of borrowing to survive could begin again. In a sense, debt amnesty actually served to restore society to its ideal state of inequity, so that it would still need the same remedy.

This dynamic is worth considering amid calls for student loan debt forgiveness. A student debt amnesty would certainly be beneficial millions whose lives are hampered by interest on loans they took out in the hope that a degree would secure them gainful employment. It wouldn’t do anything solving the problems that make it necessary to incur such a debt.

As long as higher education is treated as both a private good and an occupational requirement, people will still have to go into debt to get degrees. Then the same remedy will need to be applied again.

The conversation

Eva von DassowAssociate Professor of Ancient History, University of Minnesota

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