the land of israel

Debt and the Land

The ethics of debt forgiveness have to account for more than just the debtor-creditor relationship

By Scott Ferguson|May 27, 2021

Debt presents a political and economic quandary. The scale of the question is enormous: if in America it’s student debt that has seen the most discussion, still this amounts to $1.7 trillion out of a total personal debt burden of $14.6 trillion (more now than at any other time in our nation’s history). Crisis is already on its way. It is likely that much of this personal debt cannot be repaid, and perhaps—if the repayment does more harm than good—should never be repaid.

But the policy choices run into an ethical predicament. On the one hand we typically feel that a well-intended debtor who cannot repay – due to misfortune, or because the debt was not their choice - should not have to die with that burden, and that one should avoid repayment if it is harmful somehow (as in Plato). On the other hand, we typically consider it wrong to borrow something and not repay it.

And this ethical predicament relies on an ontological puzzle. We think of debt as a two-way relationship, as the obligation to transfer something back to some other from whom we have taken; debt is, insofar as full repayment remains futural (impending but not yet present). Yet debts where repayment is either impossible or self-defeating nevertheless tend to remain in being anyhow – on the books and on the debtors shoulders. If our ethical intuitions take their start from this two-way futural model, the existence of unpayable debts shows this ontology to be dubious. Any better way to think about debts is worth considering: presently, the only resolution to the ethical predicament is that either the creditor is cheated of what they are owed, or the debtor will be hounded for collection unto death.
I’d like to suggest that there is a richer ontology of debt implicit in Deuteronomy 15, one that may thereby shed light on the ethics and politics of today’s debt crisis. This text does not pose the question of debt as just a relation of loaning and repayment; it rather puts that relationship in terms of the land. The treatment of an unpaid, or even unpayable, debt is not a question of one side winning or losing, but of the land being blessed or cursed.
The first two verses of Deut. 15 present the famous shmita command to periodically release debts. They read: “Every seventh year you shall grant a remission of debts. And this is the manner of the remission: every creditor shall remit the claim that is held against a neighbor, not exacting it of a neighbor who is a member of the community, because the Lord’s remission has been proclaimed.” This is not, as it may appear, a simple nullification of debt, including the duty to try to repay. The passage importantly highlights the creditors, not the debts: the command is that the creditor drop all rights to be repaid, not that everyone forget the debt altogether. The release, in other words, is asymmetrical: if the creditor can no longer claim what they are owed, still the debtor is not equally forbidden from returning what they have taken.
Deuteronomy 15 is therefore not divine permission to rob one’s creditors. If Deuteronomy is strict regarding the release of debt claims, other books equally insist that it is wicked to borrow and not pay back (Psalm 37:21), that one must not deal falsely (Lev. 19:11) or break one’s word (Num. 30:2), and that one must “not withhold good from those to whom it is due, when it is in your power to do it” (Prov. 3:27). The release does not dissuade borrowers from repaying what they owe to the extent that they can. The command is rather that creditors renounce their claims to collect, and that they do so on a regular basis; i.e., it is a hard limit on how long any creditor can legitimately harrass their debtors. 
But these commands also come with an argument behind them, and it is there that I think we can learn a lesson about unpayable debt. 15:4-5 in particular insists, “There will, however, be no one in need among you, because the Lord is sure to bless you in the land that the Lord your God is giving you as a possession to occupy, if only you will obey the Lord your God by diligently observing this entire commandment that I command you today.” Thus the creditor, despite having to write down a loan here and there, is not the loser in all of this; indeed, the creditor is supposed to benefit from following the command to release debt claims. The creditor’s release prompts God to bless the land; the land’s general prosperity then overgrows the loss incurred by wiping the books.
We may discern in the commandment an intereting economic argument concerning the creditor’s own interests, namely, interest in a land that is “blessed.” Freeing bondspeople, dropping debts, and lending freely to those in need (even at risk of occasionally not getting it back) may indeed produce momentary difficulties, but that may be overlooked if the result is a land which prospers. While the Deuteronomic author frames the matter simply in terms of obedience and reward, we might extrapolate from the concerns of the text and note that a land where debts are still repaid for the most part, but also where labor is mobile, where no economic agent can be permanently lost in the spiral of debt, and where individuals can expect help from their neighbors when in need and easy credit when advantageous, would likely be a better place to live and do business even without the guarantee of divine blessing. It is a recipe for what we would now call a productive, dynamic, thriving marketplace: the debtor, relieved of excessive overhead, can now put their money towards goods, services, new assets, etc., driving broader growth. By helping the land as a whole to prosper, dropping debt claims indirectly benefits the dropper just as well as the droppee.
Thinking in terms of the land—and, by extension, the community that resides thereon—can thus provide a corrective to the ethical question of debt. It is just not right that debt is only a two-item relation: the debt, debtor, and creditor are all in the land, in a wider context, which is affected by however debt is treated. In the language of Deuteronomy 28, their collective prosperity depends far more on whether that land is “blessed” or “cursed” than on whether any debt is repaid or not, or even repayable at all. Creditors who keep their debtors forever burdened bring God's curse on the land and, at the same time, starve new economic potential, all for the sake of a debt they will probably never collect anyway; those who release debt claims feed the possibilities for new growth.
This offers a lesson for the present political and ethical quandary. Trying to decide what to do with our masses of personal debt on the basis of the rights (or duties) or the virtues (or vices) of countless individual lenders or creditors is, I think, to put the question at the wrong level. Money paid to creditors is money not spent on new products, travel, services, not invested in new businesses (that can in turn hire on labor and buy assets, raw materials, and services from others). It need not be posed as a problem of choosing winners and losers. Our question should be, rather: What choices will generate blessings in the land which may benefit everyone, even if to some it may seem a momentary loss?

Photo Credit: David Bena, via Wikimedia Commons.

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Scott Ferguson

Scott Ferguson

Author, Scott Ferguson (PhD’20), is a recent graduate in Philosophy of Religion. His research focuses on Kant and the practical presuppositions of rational theology.