SNAPSHOT: “And Forgive them their Debts”, Michael Hudson

Hudson, Michael : …and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year (THE TYRANNY OF DEBT Book 1)  2018

From Publisher

Hudson, Michael. …and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year 2018

In …and forgive them their debts, renowned economist Michael Hudson – one of the few who could see the 2008 financial crisis coming – takes us on an epic journey through the economies of ancient civilizations and reveals their relevance for us today. For the past 40 years, in conjunction with Harvard’s Peabody Museum, he and his colleagues have documented how interest-bearing debt was invented in Bronze Age Mesopotamia, and then disseminated to the ancient world. What the Bronze Age rulers understood was that avoiding economic instability required regular royal debt cancellations. Professor Hudson documents dozens of these these royal edicts and traces the archeological record and history of debt, and how societies have dealt with (or failed to deal with) the proliferation of debts that cannot be paid – and their consequences. In the pages of ...and forgive them their debts, readers will discover how debt played a central role in shaping ancient societies, and how it continues to shape our world – often destructively.

The Big Question: What happens when debts cannot be paid? Will there be a writedown in favor of debtors (as is routinely done for large corporations), or will creditors be allowed to foreclose (as is done to personal debtors and mortgagees), leading to the creditors’ political takeover of the economy’s assets – and ultimately the government itself? Historically, the remedy of record was the royal Clean Slate proclamation, or biblical Jubilee Year of debt forgiveness.

The Real Message of Jesus: Jesus’s first sermon announced that he had come to proclaim a Clean Slate debt cancellation (the Jubilee Year), as was first described in the Bible (Leviticus 25), and had been used in Babylonia since Hammurabi’s dynasty. This message – more than any other religious claim – is what threatened his enemies, and is why he was put to death. This interpretation has been all but expunged from our contemporary understanding of the phrase, “…and forgive them their debts,” in The Lord’s Prayer. It has been changed to “…and forgive them their trespasses (or sins),” depending on the particular Christian tradition that influenced the translation from the Greek opheilēma/opheiletēs (debts/debtors).

Contrary to the message of Jesus, also found in the Old Testament of the Bible and in other ancient texts, debt repayment has become sanctified and mystified as a way of moralizing claims on borrowers, allowing creditor elites and oligarchs the leverage to take over societies and privatize personal and public assets – especially in hard times. Historically, no monarchy or government has survived takeover by creditor elites and oligarchs (viz: Rome). Perhaps most striking is that – according to a nearly complete consensus of Assyriologists and biblical scholars – the Bible is preoccupied with debt forgiveness more than with sin.

In a time of increasing economic and political polarization, and a global economy deeper in debt than at the height of the 2008 financial crisis, …and forgive them their debts documents what individuals, governments and societies can learn from the ancient past for restoring economic and social stability today.

Table of Contents

The Rise and Fall of Jubilee Debt Cancellations and Clean Slates

What were Debt Jubilees?

Social purpose of Debt Jubilees

How well did Debt Jubilees succeed?

Why did debt Jubilees fall into disuse?

Archaic Economies versus Modern Preconceptions

Widespread misinterpretation of Neolithic and Bronze Age society

The International Scholars Conference on Ancient Near Eastern Economies (ISCANEE)

What makes Western civilization “Western”?

A legacy of financial instability

The Major Themes of this Book

Part I:  Overview

1. Babylonian Perspective on Liberty and Economic Order

2. Jesus’s First Sermon and the Tradition of Debt Amnesty 32-57
The meaning of Biblical deror (and hence “the Year of Our Lord”)
From Judaism to Christianity
The Dead Sea Scroll 11QMelchizedek
Debt in the Biblical laws, historical narratives and parables

3. Credit, Debt and Money: Their Social and Private Contexts

From chieftain households to temples

Anachronistic views of the Mesopotamian takeoff and its enterprise

Growing scale of the temple and palace economy leads to monetization

Creating markets for commodities, and as a fiscal vehicle for tax debts Land tenure

What Sumerian commercial enterprise bequeathed to antiquity

Classical antiquity privatizes credit and stops cancelling agrarian debts

How the modern financial and legal system emerged from antiquity’s debt crisis

A Chronology of Clean Slates and Debt Revolts in Antiquity

Mesopotamian Debt Cancellations, 2400–1600 BC

Allusions to Debt Cancellations in Canaan/Israel/Judah and Egypt  1400–131 BC

      Debt Crises in Classical Antiquity: Greece and Rome 650 BC–425 AD

Part II: Social Origins of Debt

4. The Anthropology of Debt, from Gift Exchange to Wergild Fines

The reciprocity of gift exchange

How classical moneylending differs from gift exchange

Fine-debts for personal injury catalyze special-purpose proto-money

Debts called into being monetary means to pay them

Cattle as a denominator of debts, but not of commercial exchange or interest

Debt collection procedures originally preserved economic viability

Collecting debts from borrowers who committed no offenses

5. Creditors as Predators: The Anthropology of Usury

A misleading theory of how usury began

Failure of physical productivity or risk levels to explain early interest rates

Most personal loans are for consumption, not to make a profit

Paying interest out of the surplus provided by the debtor’s own collateral

The polarizing dynamics of agrarian usury, contrasted with productive credit

6. Origins of Mercantile Interest in Sumer’s Palaces and Temples

How the social values of tribal communities discourage enterprise

Temples of enterprise

The need for merchants and other commercial agents to manage trade

The primary role of the large institutions in setting interest rates

Nullification of commercial silver debts when accidents prevented payment

Diffusion of Near Eastern finance and commercial enterprise

7. Rural Usury as a Lever to Privatize Land

How debt bondage interfered with royal claims for corvée labor

Fictive “adoptions” to circumvent sanctions against alienating land to outsiders

The contractual clause “sold at the full price”

Royal proclamations to save rural debtors from disenfranchisement

Part III:  The Bronze Age Invents Usury, But Counters Its Adverse Effects

8. War, Debt and amar-gi in Sumer, 2400 BC

City-state rivalries and the rise of urban dynasties

Lagash’s water wars with Umma, and the ensuing tribute debts

Enmetena’s proclamation of amar-gi, economic freedom from debt

9. Urukagina Proclaims amar-gi: 2350 BC

Palace domination of the temples

Urukagina’s reform text c. 2350 BC

Cancelling debts and freeing bondservants

Sumerian amar-gi as an ideological Rorschach test for translators

The timing of amar-gi and subsequent clean slates

10. Sargon’s Akkadian Empire and Its Collapse, 2300–2100 BC

Sargon’s conquest of southern Mesopotamia

Gutian Domination of Sumer: c. 2220–2120

Descent of the Gutians into Mesopotamia, and the First Interregnum

11. Lagash’s Revival Under Gudea, and his Debt Cancellation, 2130 BC

12. Trade, Enterprise and Debt in Ur III: 2111–2004 BC

Privatization of trade and agriculture

What Ur-Namma’s laws meant by níg-si-sá

13. Isin Rulers replace Ur III and Proclaim níg-si-sá: 2017–1861 BC

Lipit-Ishtar’s laws and the fall of the Isin dynasty

14. Diffusion of Trade and Finance Via Assyrian Merchants, 2000–1790 BC

Commercial and personal debts in Kanesh

Assur’s trade strategy and andurārum proclamations

The archaeological context for Assur’s andurārum inscriptions

Assyrian monopolistic commercial policy

15. Privatizing Mesopotamia’s Intermediate Period: 2000–1600 BC

Property rights as an independent dynamic

Economic entropy and indebtedness

Amorite takeover of the temples

A financial market in rentier shares

Tensions between local headmen and the palace

How wide a sphere did royal debt amnesties affect?

The nomadic takeover of Southern Mesopotamia

Larsa’s period of dominance, 1932‑1763 BC

Rim-Sin’s debt cancellations

16. Hammurabi’s Laws and mı-šarum Edicts: 1792–1750 BC

Retaining the loyalty of Babylonia’s cultivators by proclaiming mı-šarum

The scope of Hammurabi’s laws

The importance of record keeping as a check on abuses

Physical punishment for lawbreakers too poor to pay

Growing palace power over the temples and landed communities

The rate of interest on silver and barley debts

Enforcement of Hammurabi’s laws in practice

17. Freeing the Land and its Cultivators from Predatory Creditors

How the palace saved subsistence land from being privatized

Limits on creditors aggressively taking crops

Laws saving citizens from debt bondage

How Hammurabi’s laws preserved economic balance

Hammurabi’s philosophy of deterrence regarding creditor abuses

18. Samsuiluna’s and Ammisaduqa’s mı-šarum Edicts:  1749 and 1646 BC

Hammurabi’s son Samsuiluna takes the throne, 1749‑1712 BC

Ammisaduqa’s mı-šarum edict closes legalistic loopholes

19. Social Cosmology of Babylonia’s Debt Cancellations

Military conflict and land pressure make mīšarum proclamations more frequent

Restoring the (idealized) order

The end of the Old Babylonian Period

20. Usury and Privatization in the Periphery, 1600–1200 BC

Decentralization and grabitization gain momentum

The Kassite Age in Babylonia, 1600–1200 BC

Creditor stratagems in Nuzi, 1450–1400 BC

How indebtedness led to a dependent labor force

The Hurrian-Hittite “Song of Release” extends the application of andurārum

Expropriation of cultivators from the land

The Middle Assyrian epilogue

21. From the Dawn of the Iron Age to the Rosetta Stone

Debt amnesties in the Neo-Assyrian and Neo-Babylonian empires

The Inscriptions of Sargon II (722 to 705) and his grandson Esarhaddon (681 to 669)

Egypt’s pharaonic amnesties

Part IV:  The Biblical Legacy

22. Judges, Kings and Usury: 8th and 7th Centuries BC

The anti-royalist spirit of Biblical law

Land tenure threatened by debt foreclosure

The prophets lead a revolt

How the Ten Commandments pertain to the usury problem

23. Biblical Laws Call for Periodic Debt Cancellation

Lending and interest in the Covenant Code of Exodus

The Priestly Code of Deuteronomy

Jeremiah depicts the Babylonian captivity as divine retaliation for violating the Covenant

24. The Babylonian Impact on Judaic Debt Laws

Ezekiel’s apocalyptic message in the face of Judah’s defeat by Babylonia

From Ezekiel to Third-Isaiah

The reforms of Nehemiah and Ezra

Egypt substituted for Babylonian oppression

Recasting Babylonian andurārum proclamations in a Yahwist context

25. From Religious Covenant to Hillel

The twilight of economic renewal and the Jubilee

Creditor misbehavior in the story of Job

The post-exilic prophets, psalms and proverbs

From royal to Levitical rhythms of economic renewal

The implicit conflict underlying Judah’s first Jubilee

Judah revolts and a new oligarchy emerges

How Hillel’s prosbul yielded power to creditors and land appropriators

26. Christianity Spiritualizes the Jubilee Year as the Day of Judgment

Jesus’ teachings on debt forgiveness

From the Jubilee Year to the Day of Judgment

From redemption to charity

From Stoic Philosophy to the Church Fathers

The Virgin Mary replaces Nanshe and Nemesis

The End Time and the Day of Judgment

Redemption, the arrow of time and the Christian Millennium

27. Byzantine Echo

Roman fiscal reform from Diocletian to Justinian

The Novels of Basil and Romanus protecting smallholders from the dynatoi Romanos’

Novel of 934 barring dynatoi from acquiring village land

28. Zenith and Decline of Byzantium: 945–1204

Tax exemption for Church property

The fight by Basil II (976–1025) against the dynatoi

Land monopoly leads to fiscal and military dismantling


29. Western Civilization is Rooted in the Bronze Age Near East

How creditor appropriation turned land into “private property”

The meaning of economic liberty

Bronze Age money as a means of palatial production and trade accounting

The inherent inability of personal and agrarian debts to be paid over the long run

My Rough Notes

The Rise and Fall of Jubilee Debt Cancellations and Clean Slates

Hudson, Michael. …and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year (THE TYRANNY OF DEBT Book 1) (Kindle Locations 244-245). Kindle Edition.

The idea of annulling debts nowadays seems so unthinkable that most economists and many theologians doubt whether the Jubilee Year could have been applied in practice, and indeed on a regular basis. A widespread impression is that the Mosaic debt jubilee was a utopian ideal. However, Assyriologists have traced it to a long tradition of Near Eastern proclamations.

Instead of causing economic crises, these debt jubilees preserved stability in nearly all Near Eastern societies. Economic polarization, bondage and collapse occurred when such clean slates stopped being proclaimed.

What were Debt Jubilees? Debt jubilees occurred on a regular basis in the ancient Near East from 2500 BC in Sumer to 1600 BC in Babylonia and its neighbors, and then in Assyria in the first millennium BC. It was normal for new rulers to proclaim these edicts upon taking the throne, in the aftermath of war, or upon the building or renovating a temple. Judaism took the practice out of the hands of kings and placed it at the center of Mosaic Law.i By Babylonian times these debt amnesties contained the three elements that Judaism later adopted in its Jubilee Year of Leviticus 25. The first element was to cancel agrarian debts owed by the citizenry at large. Mercantile debts among businessmen were left in place.

A second element of these debt amnesties was to liberate bondservants – the debtor’s wife, daughters or sons who had been pledged to creditors.

A third element of these debt jubilees (subsequently adopted into Mosaic law) was to return the land or crop rights that debtors had pledged to creditors.

Commercial “silver” debts among traders and other entrepreneurs were not subject to these debt jubilees. Rulers recognized that productive business loans provide resources for the borrower to pay back with interest, in contrast to consumer debt. This was the contrast that medieval Schoolmen later would draw between interest and usury. Most non-business debts were owed to the palace or its temples for taxes, rents and fees, along with beer to the public ale houses.

As interest-bearing credit became privatized throughout the Near Eastern economies, personal debts owed to local headmen, merchants and creditors also were cancelled.

In addition to preserving economic solvency for the population, rulers thus found debt cancellation to be a way to prevent a financial oligarchy from emerging to rival the policy aims of kings.

The common policy denominator spanning Bronze Age Mesopotamia and the Byzantine Empire in the 9th and 10th centuries was the conflict between rulers acting to restore land to smallholders so as to maintain royal tax revenue and a land-tenured military force, and powerful families seeking to deny its usufruct to the palace. Rulers sought to check the economic power of wealthy creditors, military leaders or local administrators from concentrating land in their own hands and taking the crop surplus for themselves at the expense of the tax collector. By clearing the slate of personal 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.

Debt jubilees were designed to make such losses of liberty only temporary. The Mosaic injunction (Leviticus 25), “Proclaim liberty throughout the land,” is inscribed on America’s Liberty Bell. That is a translation of Hebrew deror, the debt Jubilee, cognate to Akkadian andurārum. The liberty in question originally was from debt peonage.

These proclamations enabled society to avert military defeat by preserving a land-tenured citizenry as the source of military fighters, corvée labor and the tax base. The Bronze Age Near East thus avoided the economic polarization between creditors and debtors that ended up imposing bondage on most of classical antiquity.

So popular was the demand for a debt jubilee that the 4th-century BC Greek general Aeneas Tacticus advised attackers of cities to draw the population over to their side by cancelling debts, and for defenders to hold onto the loyalty of their population by making the same offer. Cities that refrained from cancelling debts were conquered, or fell into widespread bondage, slavery and serfdom.

That ultimately is what happened in Rome.

Why did debt Jubilees fall into disuse? Throughout history a constant political dynamic has been maneuvering by creditors to overthrow royal power capable of enforcing debt amnesties and reversing foreclosures on homes and subsistence land. The creditors’ objective is to replace the customary right of citizens to self-support by its opposite principle: the right of creditors to foreclose on the property and means of livelihood pledged as collateral (or to buy it at distress prices), and to make these transfers irreversible. The smallholders’ security of property is replaced by the sanctity of debt instead of its periodic cancellation.

Archaic restorations of order ended when the forfeiture or forced sale of self-support land no longer could be reversed. When creditors and absentee landlords gained the upper political hand, reducing the economic status for much of the population to one of debt dependency and serfdom, classical antiquity’s oligarchies used their economic gains, military power or bureaucratic position to buy up the land of smallholders, as well as public land such as Rome’s ager publicus.iii

Violence played a major political role, almost entirely by creditors.

Within Judaism, rabbinical orthodoxy attributed to Hillel developed the prosbul clause by which debtors waived their right to have their debts cancelled in the Jubilee Year. Hillel claimed that if the Jubilee Year were maintained, creditors would not lend to needy debtors – as if most debts were the result of loans, not arrears to Roman tax collectors and other unpaid bills. Opposing this pro-creditor argument, Jesus announced in his inaugural sermon that he had come to proclaim the Jubilee Year of the Lord cited by Isaiah, whose scroll he unrolled. His congregation is reported to have reacted with fury. (Luke 4 tells the story). Like other populist leaders of his day, Jesus was accused of seeking kingship to enforce his program on creditors. Subsequent Christianity gave the ideal of a debt amnesty an otherworldly eschatological meaning as debt cancellation became politically impossible under the Roman Empire’s military enforcement of creditor privileges.

A study of the long sweep of history reveals a universal principle to be at work: The burden of debt tends to expand in an agrarian society to the point where it exceeds the ability of debtors to pay. That has been the major cause of economic polarization from antiquity to modern times. The basic principle that should guide economic policy is recognition that debts which can’t be paid, won’t be. The great political question is, how won’t they be paid?

There are two ways not to pay debts. Our economic mainstream still believes that all debts must be paid, leaving them on the books to continue accruing interest and fees – and to let creditors foreclose when they do not receive the scheduled interest and amortization payment.

Today’s legal system is based on the Roman Empire’s legal philosophy upholding the sanctity of debt, not its cancellation. Instead of protecting debtors from losing their property and status, the main concern is with saving creditors from loss, as if this is a prerequisite for economic stability and growth. Moral blame is placed on debtors, as if their arrears are a personal choice rather than stemming from economic strains that compel them to run into debt simply to survive.

Archaic Economies versus Modern Preconceptions

Our epoch is strangely selective when it comes to distinguishing between what is plausibly historical and believable in the Bible, and what seems merely mythic or utopian.

Today the idea of annulling debts seems so unthinkable that not only economists but also many theologians doubt whether the Jubilee Year could have been applied regularly in practice. The widespread impression is that this Mosaic Law was a product of utopian idealism. But Assyriologists have traced it to a long tradition of royal debt cancellations from Sumer in the third millennium BC and Babylonia (2000–1600 BC) down through first-millennium Assyria. This book summarizes this long Near Eastern tradition and how it provided the model for the Jubilee Year.

Hammurabi’s Babylonian laws became instantly famous when they were discovered in 1901 and translated the next year. Less familiar is the fact that nearly each member of his dynasty inaugurated his rule by proclaiming a debt amnesty – andurārum, the source of Hebrew cognate deror, the Jubilee Year, which has the same root as its Babylonian model. Personal agrarian debts were cancelled, although commercial “silver” debts were left intact. Bondservants pledged to creditors were returned to the debtor’s family. And land or crop rights pledged to creditors or sold under distress conditions were returned to their customary holders. These rules are so far at odds with the creditor-oriented ideology of our times that the instinctive response is to deny that they could have worked.

Wouldn’t the economy be disrupted when credit dried up? This criticism is anachronistic, because most agrarian debts did not stem from actual loans. They mounted up as unpaid bills, starting with fees and taxes owed to the palace.

Their bills were put on the tab, to be paid on the threshing floor at harvest time.

Another modern objection to the practicality of debt cancellations concerns property rights. If land is periodically returned to its customary family holders, how can it be bought and sold? The answer is that self-support land (unlike townhouses) was not supposed to be sold as a market commodity.

It was customary for Near Eastern rulers to proclaim amar–gi or mīšarum upon taking the throne for their first full year, and also on the occasions when droughts or floods prevented crop debts from being paid. Cancelling debts and restoring land rights reasserted royal authority over creditors engaging in usury to obtain the labor of debtors at the expense of the palace.

By the time Roman creditors won, the Pharisee Rabbi Hillel had innovated the prosbul clause in debt contracts, whereby debtors waived their right to have their debts annulled in the Jubilee Year. This is the kind of stratagem that today’s banks use in the “small print” of their contracts obliging users to waive their rights to the courts and instead submit to arbitration by bank-friendly referees in case of dispute over credit cards, bank loans or general bank malfeasance. Creditors had tried to use similar clauses already in the Old Babylonian era, but these were deemed illegal under more pro-debtor royal law.

Most history depicts our civilization as starting in Greece and Rome, not in the preceding thousands of years when the techniques of commercial enterprise, finance and accounting were developed.

There is a problem of cognitive dissonance and outright ideological rejection in dealing with the ancient Near East, precisely because its organizing principles and economic dynamics are so far at odds with those of today’s mainstream economics and popular opinion.

Today’s Assyriological mainstream have come to accept the idea that debts were annulled and financial clean slates proclaimed with more lasting effect again and again.

Part of this turnaround was catalyzed by a series of colloquia that I organized with the Peabody Museum

Land was the most important asset to be privatized, and debt was the major lever prying land away from communal tenure.

The most popular treatment of debt in its broad perspective was the anthropologist David Graeber’s Debt: The First 5,000 Years (2011).

What made classical antiquity “modern” – and in the minds of many historians, “Western” – was the privatization of credit, land ownership and political power without the more or less regular Clean Slates that had been traditional in the Near East.

The concept of private property permitting creditors to expropriate mortgage debtors that is widely accepted today, already throughout antiquity led to a cry for debt cancellation – as late as Kings Agis V and Cleomenes III in Sparta (late 3rd century BC) and Mithridates in his three wars against Rome (88 to 63 BC). The absence of royal, religious or civic debt amnesties made classical Greece and Rome different from the Bronze Age Near East. Our own civilization inherited Rome’s pro-creditor legal principles that helped the oligarchy impoverish its citizenry.

Mainstream economic models assume that financial trends are self-correcting to restore balance. The reality is that debts growing at compound interest tend to polarize and impoverish economies, if not corrected from “outside” the economy. Sumerians, Babylonians and their Near Eastern neighbors recognized the need for this action. Today’s “free enterprise” model-builders deny that debt writeoffs are needed. Modern ideology endorses chronic indebtedness as normal, despite debt service drying up the internal market and forcing a widening range of debtors into financial dependency.

At the outset of recorded history, Bronze Age rulers relinquished fiscal claims and restored liberty from permanent debt. That prevented a creditor oligarchy from emerging to the extent that occurred in classical antiquity.

Today’s world is still living in the wake of the Roman Empire’s creditor-oriented laws and the economic polarization that ensued.

The Major Themes of this Book

All economies tend to polarize between creditors and debtors if not counteracted by writing down debts in line with the ability to pay without widespread default and forfeiture of land and property. Failure to write down debt arrears creates a creditor class at the top of an increasingly steep economic pyramid, reducing much of the population to debt clientage or worse.
1.Charging interest on debts was innovated in a particular part of the world (Sumer, in southern Mesopotamia) some time in the Early Bronze Age, c. 3200–2500 BC. No trace of interest-bearing debt is found in pristine anthropological gift exchange, or even in the Linear B records of Mycenaean Greece 1600–1200 BC. The practice diffused westward to the Aegean and Mediterranean c. 750 BC.

2. A major task of Babylonian and other Mesopotamian rulers upon taking the throne was to restore economic balance by cancelling agrarian personal debts, liberating bondservants and reversing land forfeitures for citizens holding self-support land.

3. The easiest debts for rulers to remit were those owed to the palace, temples and their collectors or professional guilds. But by the end of the third millennium BC, wealthy traders and other creditors were engaging in rural usury as a sideline to their entrepreneurial activities. Enforcing collection of such debts owed to the palace, its bureaucracy and private lenders would have disenfranchised the land-tenured citizen infantry and lost the corvée labor service and military duties of debtors reduced to bondage.
4. Debt cancellations were not radical, nor were they “reforms.” They were the traditional means to prevent widespread debt bondage and land foreclosures. Bronze Age rulers enabled economic relations to start afresh and in financial balance upon taking the throne and when needed in times of crop failure or economic distress. There was no faith in inherent automatic tendencies (what today is called “market equilibrium”) to ensure economic growth. Rulers recognized that if they let debt arrears mount up, their societies would veer out of balance, creating an oligarchy that would impoverish the citizen-army and drive populations to flee the land.
5. Palace collectors and merchant entrepreneurs acted increasingly as creditors on their own account. A political tug of war ensued as nomadic tribesmen conquered southern Mesopotamia and took over temples and turned them into exploitative vehicles while trying to resist customary checks on the corrosive effects of debt.
6. Classical antiquity replaced the cyclical idea of time and social renewal with that of linear time. Economic polarization became irreversible, not merely temporary. Aristocracies overthrew rulers and ended the tradition of restoring liberty from debt bondage. This brought “modern” land ownership into being as debtors forfeited their land tenure rights or fell into bondage with little hope of recovering their free status.
7. Without Clean Slates, creditor oligarchies appropriated most of the land and reduced much of the population to bondage. Creditors translated their economic gains into political power, casting off the fiscal obligations that originally were attached to land tenure rights. The burden of debt and its mounting interest charges led to the foreclosure of land as the basic means of self-support and hence the loss of the debtor’s liberty.
8. Livy, Plutarch and other Roman historians described classical antiquity as being destroyed mainly by creditors using interest-bearing debt to impoverish and disenfranchise the population. Barbarians always stood at the gates, but only as societies weakened internally were their invasions successful. The invasions that ended the fading Roman Empire were anticlimactic. In the end, the only debts that Emperor Hadrian could annul with his fiscal amnesty were Rome’s tax records, which he burned in 119 AD – tax debts owed to the palace, not debts to the creditor oligarchy that had gained control of Rome’s land.
9. Archaic traditions of restoring order, originally legally enforceable, were given an otherworldly eschatological meaning as the social order collapsed under the burden of debt. Losing hope for secular revival, antiquity felt itself to be living in the End Time.
10. The Qumran scroll 11QMelchezedek wove together Biblical texts concerning debt cancellations with apocalyptic texts about the Day of Judgment. Although many of Jesus’ sermons used images and analogies associated with debt, the idea of redemption and forgiveness was spiritualized to the point where it lost its basis in fiscal and debt amnesties that had released debtors from bondage.
11.  Byzantine rulers revived the Near Eastern practice of returning land tenure to smallholders, nullifying foreclosures, “gifts” and even outright purchases as constituting stealth takeovers by the wealthy. Takeovers via antichresis (taking the land as ostensibly temporary collateral to pay the interest due) also were annulled.
12. The common policy denominator spanning Bronze Age Mesopotamia and the Byzantine Empire was the conflict between central rulers acting to restore land to smallholders so as to maintain royal tax revenue and a land-tenured military force, and wealthy or powerful families seeking to concentrate land in their own hands, denying this usufruct to the palace. When royal power to preserve widespread land tenure waned under assertive oligarchies, the result was economic shrinkage and ultimate collapse.

Babylonian Perspective on Liberty and Economic Order

Modern American society retains many iconographic references that can be traced back to ancient Babylonia. Our nation’s two most familiar symbols of freedom, the Statue of Liberty and the Liberty Bell, recall vestiges of an ancient tradition that has been all but lost since imperial Roman times: liberty from bondage and from the threat of losing one’s home, land and means of livelihood through debt.

A farmer claims that he does not have to pay a crop debt because the ruler, quite likely Hammurabi (who ruled for 42 years, 1792–1750 BC), has “raised high the Golden Torch” to signal the annulling of agrarian debts and related personal “barley” obligations.[

The Babylonian ruler’s ceremonial gesture of holding aloft a flame to signal mīšarum, clearing the slate of debts, seems to have marked the transition to a new reign by the new ruler upon the death of his predecessor after the period of mourning had ended.

Should our Babylonian visitor proceed to the Liberty Bell in Philadelphia, he would find further vestiges of the idea of absolution from debt bondage. The bell is inscribed with a quotation from Leviticus 25.10: “Proclaim liberty throughout all the land, and to all the inhabitants thereof.” The full verse refers to freedom from debt bondage when it exhorts the Israelites to “hallow the fiftieth year, and proclaim liberty throughout all the land and to all the inhabitants thereof; it shall be a Jubilee unto you; and ye shall return every man unto his family” (and also every woman, child and house slave who had been pledged).

The Hebrew word translated as “liberty” in the Leviticus text is deror.

Proclamation of these clean slates became so central a royal function that the phrase “to issue a “royal edict” (ṣimdat šarrim) usually referred specifically to a debt cancellation.

By the first millennium BC, however, kings had lost the power to overrule local aristocracies. Where they survived, they ruled on behalf of the wealthy. From Solomon and his son Rehoboam through Ahab and most subsequent rulers, the Bible depicts most Israelite kings as burdening the people with taxes, not freeing them from debts or palace demands. That is why the Biblical prophets shifted the moral center of lawgiving out of the hands of kings, making debt cancellation and land reform automatic and obligatory as a sacred covenant under Mosaic Law, handed down by the Lord.

Today’s readers of the Bible tend to skim over the Covenant Code of Exodus, the septennial šemittah year of release in Deuteronomy and the Jubilee Year of Leviticus as if they were idealistic fine print. But to the Biblical compilers they formed the core of righteousness.

“Land must not be sold in perpetuity, for the land belongs to me and you are only strangers and guests. You will allow a right of redemption on all your landed property, and restore it to its customary cultivators every fifty years” (Leviticus 25: 23–28).

The broad theme of this book is how the modern concept of economic liberty has stood the original meaning of liberty on its head. Today’s pro-creditor “market principle” favoring financial claims by holding that all debts must be paid, reverses the archaic sanctity of releasing indentured debt pledges and property from debt bondage.

Central to any discussion of this inversion is the fact that Mesopotamia’s palaces and temples were the major creditors at the beginning of recorded history. To enable them to perform their designated functions, communities endowed them with land and dependent labor. Neither temples nor palaces borrowed from private creditors (although their functionaries and entrepreneurs acting for them did). Nowhere in antiquity do we find governments becoming chronic debtors. Debts were owed to them, not by them. Today’s world is the opposite. When the U.S. Congress discusses ways to reduce the federal budget deficit, the most untouchable category of expenditures is payment to bondholders on the public debt. The same is true for Third World countries negotiating with banks and the International Monetary Fund – creating the recent debt-ridden austerity and economic collapse imposed on Greece.

From the Biblical prophets to Roman Stoic historians a central theme was the accusation that what tore their society apart was the failure to cancel debts.

The legacy of lawgivers proclaiming clean slates is commemorated at the entrance to the United States House of Representatives. Grouped around Moses in the center, with Hammurabi on his right, are “23 marble relief portraits of ‘historical figures noted for their work in establishing the principles that underlie American  law.’”[


2. Jesus’s First Sermon and the Tradition of Debt Amnesty

In the first reported sermon Jesus delivered upon returning to his native Nazareth (Luke 4:16 ff.), he unrolled the scroll of Isaiah and announced his mission “to restore the Year of Our Lord.” Until recently the meaning of this phrase was not recognized as referring specifically to the Jubilee Year. But breakthroughs in cuneiform research and a key Qumran scroll provide a direct link to that tradition. This linkage provides the basis for understanding how early Christianity emerged in an epoch so impoverished by debt and the threat of bondage that it was called the End Time.

Jesus was both more revolutionary and more conservative than was earlier recognized. He was politically revolutionary in threatening Judaic creditors, and behind them the Pharisees who had rationalized their rights against debtors. Luke 16: 13–15

Jesus’s call for a Jubilee Year was conservative in resurrecting the economic ideal central to Mosaic Law: widespread annulment of personal debts. This ideal remains so alien to our modern way of thinking that his sermons are usually interpreted in a broad compassionate sense of urging personal charity toward one’s own debtors and the poor in general. There is a reluctance to focus on the creditor oligarchy that Jesus (and many of his contemporary Romans) blamed for the epoch’s deepening poverty.

“The religious feeling against usury [found in Exod. 22.25, Lev. 25.35f., and Deut. 23.19f. with regard to foreigners] was entirely absent from the Sumero-Babylonian world where payment of interest upon a loan is regarded as a normal and respectable phenomenon.”

Lev 25:(8-11)

13 July 19

When I studied Biblical history at seminary the curriculum covered the idea of the Year of Jubilee (Lev 25:8-13)

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