On Odious Debt

This week, one of you, my very dear readers, tipped me off to an excellent article. (Thanks George!) In said article my colleague at LSE, David Graeber, has an extensive and extremely interesting discussion with Disenz, “On harmful jobs, odious debt, and facists who believe in global warming”, which is very much worth your time. 

What interested George enough to flag this up for me was David’s discussion of conceptions of debt, and the medieval response thereof. In particular, David cites the following case:

“…remember, [in the medieval period], economic questions were moral questions that fell under canon law, it was all a branch of theology. Actually, I’d say economics is still a branch of theology it just doesn’t admit it any more.”

The example was this: there is a man in prison, on a diet of bread and water. So he is slowly dying. The inmate in the next cell has some friends who bring him food; he says, say, I have a few hard-boiled eggs here. I’ll give you one of these eggs if you sign this document giving me the rights to all your property. So he agrees, eats the egg, survives, and a couple years later they’re both out of prison. Is the contract enforceable?   … The answer today is: yes. We have been doing pretty much exactly that to the Global South for years. But most medieval theologians would argue: obviously not. The man who signed over his property was not actually a free agent. ”

George wanted to know if Graeber’s framing of the question was accurate, and I am happy to report that it is, in fact the case. So, get ready for some theology.

The theological underpinnings of the medieval case against debt under coercion stem primarily from biblical considerations. The Bible is absolutely full of arguments against debt enslavement, for example. In fact, the immorality of debt under duress is introduced in the very first book of the Bible, Genesis. There we are introduced to Joseph, whose technicolour dream coat you may or may not heard of. Anyway, Joseph has a long and convoluted story, but he is sold as a slave to the Pharaoh, rises to the role of Vizier, and then eventually his bothers who sold him come begging for help during a famine and Joseph helps them all to settle in Egypt.

The thing is, the famine was so profound that no one – not the Egyptians or the newly settled Israelites – had anything to eat, and Joseph ends up selling pretty much everyone into debt servitude as a result. The Pharaoh had massive grain reserves that he had bought from all the working people, but working people had nothing, so were forced to ask for help, saying, ““We cannot hide from our lord the fact that since our money is gone and our livestock belongs to you, there is nothing left for our lord except our bodies and our land.Why should we perish before your eyes—we and our land as well? Buy us and our land in exchange for food, and we with our land will be in bondage to Pharaoh. Give us seed so that we may live and not die, and that the land may not become desolate.”[1]

This is all well and good in theory, but when a new Pharaoh takes over, he begins explicitly to exploit this situation with the Israelites. That is how the Israelites fall into bondage with the Egyptians – through a hopeless situation where they were forced to barter their land in order to survive. Most biblical scholars in  both the medieval period and now agree that this is whack.

The fact that debt and extracting it is a bad thing is then reiterated in Leviticus 25 which warns readers, “If any of your kin fall into difficulty and become dependent on you, you shall support them … Do not take interest in advance or otherwise make a profit from them, but fear your God; let them live with you. You shall not lend them your money at interest taken in advance, or provide them food at a profit.”

This is hammered home in the New Testament, where theologians argued that Jesus’s life is meant to be understood as a redemption – not just from sin but from the conception of debt itself. It is for this reason, they argued, that Jesus is explicit that his ministry is aimed at the poor. This is typified in Luke 4:18-19, where Jesus announces, “The Spirit of the Lord is on me, because he has anointed me to proclaim good news to the poor. He has sent me to proclaim freedom for the prisoners and recovery of sight for the blind, to set the oppressed free to proclaim the year of the Lord’s favor.” Here, theologians argued Jesus was discussing a sort of jubilee year wherein debts would be forgiven in order to free those oppressed by them.

This is reiterated in the original version of the Lord’s Prayer/Our father in Matthew 6: 11-12, which explicitly includes the lines “Give us this day our daily bread, and forgive us our debts as we have forgiven our debtors”.

The good JC is also heard to remark in Matthew 5:42 that we are all to “Give to everyone who begs from you, and do not refuse anyone who wants to borrow from you.” and again in Luke he urges us all to, “Lend, expecting nothing in return.”

So yeah, “help poor people, and do not make them go into debt for essential things that they need to live” is something that has a long (long long long) biblical tradition which I have only vaguely scratched the surface of here and late antique and medieval Christians were acutely aware of that.

In the Patristic period (roughly 100 – 450 AD), when Christians were busy writing all the rules, one of the big ones was that attempting to collect interest was incompatible with the conception of Christian Charity. This was underlined by a parade of scholars oh whom Gregory the Bishop of Nyssa’s (c.335-c.395) reaction was typical. Gregory accused those who lent at interest of attempting to “bait as a wild beast to those in distress in order to ensnare them in their need.” The greed that consumes those who lend, he states “counts its gain and cannot be satisfied, and is disconcerted by gold hidden in a person’s home because it remains idle and unprofitable.”[2]

So that is pretty unequivocal.

As a result of all of this thought, lending money at interest was considered a specific sin which was called usury. The Decretum Gratiani, a collection of Church laws that was compiled by the monk and canonist Gratian (d. c. 1159) in 1140 defined usury as demanding, receiving, or expecting to receive more on a loan than the amount which was initial lent.[3]

Medieval Christians were extremely onboard with this interpretation, which was underlined throughout the period. For example, lending at interest was expressly condemned and banned by the Church first at the Third Lateran Council in 1179, and then again for good luck at the Second Council of Lyon in 1274.

All of this underscored what the historian O’Donovan has described as a medieval conception that, “the private amassing of wealth, retained and preserved by property right for exclusive use, as a violation of the divine owner’s intention that the earth’s abundance be shared in charity and distributed justly for the sustenance of all”.[4] In other words, God and in both of his divine and earthly forms has repeatedly told you to share. You therefore have no business amassing wealth and private property and impoverishing your fellow man while doing so. Hell yes, comrades.

At the heart of this was a conception that money was what one could consider sterile. It didn’t make anything else, it was just something that placed a theoretical value on something already extant. It cannot grow any more worth on its own. This was initially an Aristotelian concept, which our boy Tommy Quine Quine (shout out to a legend) cited in his argument against usury. He noted that, “the Philosopher … says that ‘to make money by usury is exceedingly unnatural.’”[5]

For him, to lend at interest – say lending someone a tenner, but expecting fifteen quid back – would be asking someone to pay for something, “which does not exist, and this evidently leads to inequality which is contrary to justice.”[6] Doing so is an attempt to “sell the same thing twice over”.[7] You are asking someone to pay a tenner for what the tenner is worth, but then a fiver on top for using it. The money didn’t make anything, you are just demanding that it make something else from the person you lent it to. He likens this to selling someone a bottle of wine, and then charging them again to actually drink it.[8]

So that is all well and good, does that mean there was no lending in the medieval period – haha no. Remember all those rules about sex that the Church made and that no one followed? Yeah same thing. Even after Tommy makes some excellent points about how lending is theft, he still concedes that people, unfortunately, be lending. SMDH. There were some ways which that could be done in a theologically correct way. You could charge interest, for example, if you were lending someone money and by not lending it and using it elsewhere you would have made more money, for example. In that case you are asking for money to cover your loss. Those who lent money were also told that they could not expect full repayment from those they lent if there was some unavoidable loss on the borrower’s side. After all, the lender should have known there was some risk going in and not lent if he couldn’t cover it.

There was also a group of people who could lend at interest to Christians without it being a sin – Jewish people. Jewish people, obviously, had the same proscriptions against usury in the Torah, but they interpreted the passages differently. See they still were God’s chosen people and therefore all the warnings that “If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall you lay upon him at interest” definitely applied to lending to other Jewish people, but certainly not Christians, who went out of their way to make the point that they were not, in fact, Jewish.[9]

Now before you get all anti-Semitic and start accusing Jewish people of predatory lending in a society that was against such a thing I need you to slow your damn roll and realise that the primary reason that Jewish communities were lending to Christians wasn’t because they could but because Christian communities wouldn’t allow them to participate in other work. Jewish people were often prohibited from, for example, joining guilds, or practicing trades where they participated in trade with Christians. The only way for them to survive was explicitly to lend money because that is what they were forced to do legally.

This is why, as we have discussed before, Jewish people were a regular facet of medieval life in cities as the free capital that they were able to lend was always in demand. It also, sadly, contributed to the stigma against Jewish people and became a nice little excuse for Christians to massacre them all every time they got into debt. Jewish people, through a series of explicit legislation became associated with greed and usury through no fault of their own.

All of which brings us to the point of this fairly heavy discussion, (I know, you come here for tits, and yet I will persist in flashing theological discussions in your face.) – debt is immoral. That’s it. That’s the argument. Hell, debt has BEEN immoral since Aristotle was throwing it down, and deep in your heart of hearts you know that. As David Graeber and Aristotle have both pointed out it is also, crucially not real. As Graeber noted, “Rich people do not believe in debt, at least not in their own debt. … if you’re in a position of weakness, debt is morality; if you’re in a position of strength, debt is power. … Look at international relations. If Sierra Leone owes a billion dollars to the USA, Sierra Leone has got trouble. If the USA owes South Korea a billion dollars, South Korea has got trouble.” Debt is an imaginary game that is backed up by violent force. That’s it. The medieval Jewish communities that would be massacred and expelled from entire kingdoms, like England, when the king got too deeply into debt to them is evidence of that fact.

Now abolishing the conception of debt is a moral imperative, but another lesson we should take away from the medieval discussion of that fact is that abolishing debt in and of itself does not lead to an equitable society. Medieval European society took the conception that usury was a sin and used it to oppress Jewish people. In order to build a more just world we need to abolish our current forms of lending, but we must take care to reimagine the world afterwards in a way where that spirit is inclusive of everyone, without focusing violence on others.

Or, you know, we could destroy everything instead to make a couple rich dudes even richer. We’re getting pretty good at that.

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[1] Genesis 47:18-19.
[2] Gregory of Nyssa, usur. (PG 46:437; J 197–98, Quoted in, Casimir McCambley, “Against Those Who Practice Usury by Gregory of Nyssa,” Greek Orthodox Theological Review 36.3-4 (1991): 295.
[3] Joan Lockwood O’Donovan, “The Theological Economics of Medieval Usury Theory”, Studies in Christian Ethics 14(1), 50.
[4] Ibid., 52.
[5] Aquinas, Summa Theologica, Second Part of the Second Part, ed. Anthony Uyl, 3^rd edition, (Woodstock, Ont.: Devoted Publishing, 2018), p. 322.
[6] Ibid.
[7] Ibid.
[8] Ibid.
[9] Exodus 22:24.

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