The overhang of debt building up due to the COVID-19 crisis will make eventual recovery particularly tenuous. Some analysts believe we’re already into a global depression; but obviously in denial about it. That then begs the question, “What is debt really… beyond an asset class for lenders, and a liability for borrowers?” To unpack debt requires looking at what underpins ‘ownership’; and that’s primarily our attitude towards property, specifically land.
“Land… they don’t make the stuff anymore” goes the expression. Yet, we unquestioningly assume our existence based on it. The question parents dread to hear is when their children want to know who made the world. Whether the response is God, the Universe, physics or Douglas Adams’ algorithmically endowed mice; the inescapable fact is that humans can’t really own the planet, because we didn’t make it. Not according to current convention anyway.
The rather difficult metaphysical problem of celestial accretion aside, we should be able to at least agree that, until we come across the original owner of Earth in person, the planet is a ‘loaner’ for now. And that goes for everything it produces at no cost. It also assumes that we will be able to afford the asking price, if in fact it’s even for sale. How bereft of philosophical heft our economic practice appears, when applied at this level.
So, what on earth do land, ownership and debt still mean? Well, if you’re a descendant of First Nation peoples, the former is primary; but the latter are superfluous. You’ll have no concept of dominion over nature. Your language won’t even have possessive pronouns. As such, the Kalahari San concept of Nhora, the proto-custodianship model for all societies over the last 200,000 years, provides many of the ethical ideas we should practice today.
Each tiny clan of San hunter-gatherers take care of a nhoresi, a defined piece of ancestral land, on behalf of the Sky God; with the understanding that it cannot be ‘owned’, but is held in ‘trust’ by its custodians for the benefit of the clan and any people who may traverse it. Ergo, hereditary custodial rights rather than modern property ownership, which the San never knew, nor debt till settlers introduced it.
By contrast, until 600 BCE, in the biblical practice of jubilee the Israelites rested from their labour and allowed the land to rest (among other things). As the sabbatical years occurred every seven years jubilee was then celebrated at the end of seven cycles of sabbatical years - the 50th year (or 49th, as some argue). It was really a semi-centennial national expiration of land leases.
Thus, biblical jubilee did not involve the forgiveness of debt, but the celebration of a debt paid by leasing the land and recouping its crop potential; therefore, there was no redistribution of wealth. If there were bountiful harvests each year, then the profit remained in the hands of the one who had leased the land.
But, since God owned the land according to the Bible, he gave the Promised Land to the tribes of Israel with the condition that private property cannot be sold, squandered or given away permanently. If a lender leased the best land available and diligently worked to make it productive, they could accumulate significant assets prior to each jubilee. That would allow them, over time, to accumulate effective control over land without actual ownership.
This was all good and well for a while, but there were some structural problems. What then spelled the end for the jubilee concept? For one thing, the shares of land were unequal to begin with. The Levites got no land; first-born sons received twice the land given to the other sons; daughters neither owned nor inherited anything; and non-Israelites had no share in the land at all.
So, while the jubilee law did prevent all the land from being owned by a few families, it did not prevent some from becoming much wealthier than others. Although jubilee set limits on the rich getting richer, and the poor getting poorer, with regard to the permanent acquisition of land; it did not necessarily prevent income inequality.
Furthermore, the people whom the biblical jubilee helped were not the poor, but the families of original affluence. The jubilee guaranteed that they endured in their landed affluence regardless of whether they wanted, or deserved, it. What the jubilee did was to periodically restore property and power to the old families, the true Israelites.
Fast forward to today and the modern Debt Jubilee Movement has dropped the original biblical context; but is making political, economic and moral arguments for extinguishing all, or some, of the debt the world is drowning in. Specifically demanding that dishonourable debt should not be honoured. Case in point being South Africa still labouring under the apartheid regime’s debt. Of course, there are many other examples of dishonourable debt throughout history. As the global financial system staggers from crisis to crisis, the biblical writing is on the wall.
So, is a debt jubilee the answer to our woes - a providential gift, so to speak? From an economic perspective, the answer is likely to be no - at least for a full version of it. However, there might be an argument for targeted debt forgiveness; or at least lenient and well-ordered bankruptcies containing forgiveness in especially acute cases.
The experience of developing country debt forgiveness suggests that forgiveness did have the desired effect of freeing up resources, which could then go to more pressing development needs. However, some resources thus freed up got wasted anyway; and an argument was also made that forgiving loans frittered away by governments merely encourages such recklessness in the future. This certainly could be a risk for a modern debt jubilee.
Nevertheless, a debt jubilee is said to be more ethical or moral than current arrangements. Which may very well be true, although not necessarily in step with current economic theory. That said, the custodianship-versus-ownership debate is making a major comeback. Our planetary convulsions of natural disasters, pandemics, military conflicts and policy failures sweep across the land; and stand in stark contrast to the image we have of ourselves as a species.
With so many entrenched interests at risk, including life itself, our modern assumptions are being tested as never before. As we reflect, in our isolation, on the complexity of the society we’ve created; we’re confronted with the unavoidable reality that cleverness bears little resemblance to wisdom. In a sense, it’s back to the future for us. To rediscover our egalitarian roots, to be fraternal. To find courage in our vulnerability. To flourish, not just survive.
The digitization and atomization of society, that’s accelerating, will continue to disrupt our lives. We probably need a Google Doc for all of civilization now, to continuously update all the learnings taking place at massively accelerated clock speed. We certainly don’t want to be the people who make humanity’s last stand. Fortunately, almost every problem becomes easier when we think really long term. Seven generations according to First Nation wisdom.
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