Sunday, August 28, 2011

Jubilee: Financial "reset" in the Torah

How often have we heard critics say that the Torah contains an antiquated and barbaric legal system? And yet it has some features that are more just than our own. The ancient system provided that the people should have family lands that were enough to support themselves. It also foresaw that some would prove better managers than others, and made provisions so that the misfortune -- or even bad judgment -- of the parents would not doom generations of their descendants to poverty. Every fifty years* there was a "Jubilee" -- a great financial "reset" -- where property was returned to the original owner or his family. So again every family had lands that were enough to support themselves. If the family land was lost through the carelessness of one generation, it was returned within the lifetime of the next. Debts, too, were canceled, and those who were in forced labor to pay off their bankruptcy were set free again.

Our system is very different today. There is no long-term thought given to each family having both the means and the responsibility to provide for themselves. There is no serious expectation that a debt should be repaid even if someone has to be compelled to do the honest thing and work to repay it; neither is it built into our laws that there should be a limit to the length of time that a debt can be held over the head of someone who has honestly and for years done everything in their power to repay it. There is no provision that the misfortune (or bad judgment) of one generation should be righted at some point for the sake of future generations.

Any nation's set of laws is, in some sense, the set of rules to an economic game. Our system provides a good number of honest ways to succeed, and a few dishonest ones. But it has no "reset". This is not the fault of those who have succeeded honestly. All the same, the long-term effect is to create a growing underclass who do not start life with the means to support themselves (particularly since many middle-skill jobs have left our shores), and a shrinking upper class with more and more dependents. Neither group really likes the arrangement. Some in each group are more gracious about the arrangement than others, but graciousness should not be confused with the question of whether the rules are workable.

So the question remains: Can a system work in the long term unless each family has both the means and the responsibility to provide for themselves? And if we want -- or need -- a system in which each family has both the means and the responsibility to provide for themselves, that does mean there has to be a "reset" now and then. Unless the "reset" is to mean "chaos and revolution", then we might want to give thought to having laws that take a long-term view and provide a peaceful and orderly way to reset.

* Some say the Jubilee was every forty-nine years, rather than every fifty.


Martin LaBar said...

It's a good idea. Like many other good ideas, I don't have faith that I will live to see it adopted.

Weekend Fisher said...

In the U.S., doing it at the *government* level wouldn't be practical. Doing it at the *church body* level, with contracts and leases, would be closer to feasible.

But here -- just for the moment -- I'll be content to have mentioned that the Torah was thousands of years ahead of its time on this one.

Take care & God bless
Anne / WF

Aron said...

Interesting post.

Our system does have a different kind of "reset" button--declaring bankruptcy. This isn't nearly as far-reaching as the Jubliee, but it has a similar debt-cancelling aspect.

In the case of one of my close friends, bankruptcy was the only reasonable way out of a large amount of debt incurred as a result of some poor financial managment from the previous generation.

Weekend Fisher said...

Bankruptcy has its moments -- but it's still, I think, less just to *both* parties (the lender and the borrower) than the ancient Jubilee system.

For the borrower - I've heard that bankruptcy doesn't cancel student loans (which I haven't verified myself, but I heard it from one I wouldn't suspect of lying). That's a common type of debt, and often a large one.

For the lender - I know someone "ethically challenged" (to put it nicely) who told me that he'd maxed out his credit cards on his lawyer's advice so that he could file bankruptcy. He was in management and likely well paid, but had no intentions of trying to repay as best he could; he was little better than a thief.

For our current laws, I'd love to see us do better.

Take care & God bless
Anne / WF