Milgrom-Debt and global economics

Yesterday I tried to summarize some of what Jacob Milgrom in his Leviticus said about Leviticus 25 and the concept of the Jubilee years. He also attempted to bring this text into the contemporary world as relevant for today.

The laws about the return of land to the clan in Leviticus 25 are a mechanism to prevent wealthy creditors from taking the land and impoverishing the clan and individual members of it. Micah 2:2 and Isaiah 5:8 reveal that this was a problem in eighth century Judah.

So these laws fit with the thesis that H (the Holiness Code) came into being then in response to the critique of the prophets. Milgrom notes, however, that the prophets can only condemn these practices. H seeks to fix the problem of the growing disparity between the rich and poor.

Milgrom goes on to argue that, since this is still a big problem in today’s world, we might learn something from Leviticus that we could apply to global economics today. He has a section about the Polynesian Tonga people, who have a system similar to the Jubilee laws that works for them in today’s world. They are pretty isolated though. They are becoming less isolated now. So time will tell whether they can maintain their system.

He also tells about his participation in a “Jewish-Christian Symposium on the Jubilee” sponsored by the World Council of Churches in 1996. He says that debtor nations want the International Monetary Fund and the nations of the world to

–Cancel all their debts

–Grant restitution to the original owners for land use and resource depletion

–Stop the spoliation of indigenous people’s land and resources

–Universally raise wages to a subsistence level

The laws of Leviticus 25, he says, correspond to these things, because they call for the forgiveness of debts, the restoration of the land, and liberation from economic oppression.

We have to be careful, though, because there could be unintended consequences. For instance, if creditors have to grant remission of debt, why would they stay in business? Wouldn’t credit become impossible to obtain?

Milgrom says that the rabbis have struggled with this problem at points in Jewish history. In the first century C.E., Rabbi Hillel found that credit was drying up because of the requirement that debt be canceled in the Sabbatical year. So he allowed for a special court to substitute for the creditor in collecting the debt. Milgrom says such rabbinical solutions exemplify the kind of creativity that we would need to apply Jubilee law today.

I wonder about applying a system that was meant to prevent feudalism to a post-feudal situation.

Milgrom says that the demand for cancellation of debts corresponds to Leviticus 25. Yet, verses 15-16 are not among the “selected texts” that he comments on in more detail. Those verses say according to the NIV:

You are to buy from your countryman on the basis of the number of years since the Jubilee. And he is to sell to you on the basis of the number of years left for harvesting crops.

When the years are many, you are to increase the price, and when the years are few, you are to decrease the price, because what he is really selling you is the number of crops.

Remember that these verses present a solution to a problem of debt. What the buyer bought was not the land, but the use of the land for the years remaining until the Jubilee. It was like leasing a car. You don’t really own the car. You pay to use it until the lease is up. If you owed, say, $100,000 that you could not repay and there were 5 years left until the Jubilee, then someone could pay you $20,000 a year for the use of the land over those years.

In the end the debt would be paid. It was not actually forgiven. In the example above, you had to somehow live without the use of the land for five years.  But the land got returned to you and your clan. The point of the law was to prevent families from being permanently cut off from the land originally allotted them. But the creditor did get paid.

Deuteronomy 15:1-2 has a requirement for either the relaxation or cancellation (depending on what the Hebrew shamat means) of debt every seven years. This is a law against long-term debt. So our 30 year mortgages and life-time college loans wouldn’t pass muster. And any society has to face the reality that circumstances may make debt (especially long-term debt) noncollectable. Hence, bankruptcy laws. The seven-year law looks like another instance of Israel setting up a periodic event to take care of something that is likely to happen anyway.

In regard to the 50 year Jubilee, I was once told by a financial planner that about every 50 years a mass remission of debt actually has taken place throughout history. Sometimes this has happened by going off a standard like the gold standard. Sometimes by the devaluation of currency. Sometimes by inflation that allows you to pay back your debts with money that is worth a lot less than the money you originally borrowed.

Still, the general rule in the Bible is that people should meet their obligations.

Milgrom’s main point seems to be that Leviticus 25 provides a kind of hope for solutions to inequities in the contemporary world, even if we will need considerable creativity to find and apply them.

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About theoutwardquest

I have many interests, but will blog mostly about what I read in the fields of Bible and religion.
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