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Debt Forgiveness: Plainer Speaking, Please.
Stephen A. OConnell
1
December 22, 1999
revised July 13, 2000
1. Introduction
In contemporary economic usage, the cancellation of debt is referred to as debt
forgiveness.
2
This terminology resonates with New Testament passages in which debt is
used as a metaphor for sin. In the Lords Prayer, for example, the disciples are taught to
ask God to forgive us our debts, as we also have forgiven our debtors (Matt. 6:12,
NIV). But the economic terminology subtly reverses the scriptural metaphor. If debt must
be forgiven, then the state of debt distress must have the connotations of sin. Given the
complexity of debt distress in practice, the result is an odd one. Our terminology seems to
pre-judge the case; in effect, we enter the court asking the creditor for mercy rather than
justice.
In this note I trace the historical roots of the current usage. I ask when, how, and
with what consequences the English usage acquired its decidedly normative overtones. In
the process I make a case for the replacement of forgiveness with cancellation in
economic discussion, and particularly in the Jubilee 2000 debate. Use of the more neutral
term acknowledges at the outset the complex economic and moral dimensions of the
issue and allows a more productive debate on ways forward.
2. An analogy transformed
The juxtaposition of debt with forgiveness in early English language translations of
the New Testament undoubtedly provided crucial practical impetus to the establishment
of the modern English usage.
3
Thus in the earliest full translation of the bible into
(Middle) English, the disciples are taught to ask the Father, in the Lords Prayer, to
forgive their debts
1
Professor of Economics, Swarthmore College. Without implication in the results, I thank Catherine Ball,
Bob DuPlessis, Ray Hopkins, Christen Lungren, Susan Meyer, Ginny OConnell, Fred Pryor, and Mark
Wallace for discussions and references.
ã 2000 by Stephen A. OConnell. All rights reserved.
2
The 1992 New Palgrave Dictionary of Money and Finance, for example, has an entry for debt forgiveness
but no reference to debt cancellation.
3
T. S. Eliot viewed the influence of ecclesiastical language on common usage as substantial even in the
20
th
century. In reviewing the just-released New English Bible in 1962, he warned that as long as the new
translation was used only for private reading, it would be merely a symptom of the decay of the English
language in the middle of the twentieth century. But the more it is adopted for religious services the more it
will become an active agent of decadence. (Sunday Telegraph, December 16, 1962, cited in Bruce, F. F.,
1978, History of the Bible in English. Oxford: Oxford University Press. p. 239.)
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As we forgeve to oure dettours. WYCLIF Matt. vi., 1382, cited in OED.
The terms debts and debtors appear in the original Greek, in a form literally
applicable to loan contracts. Bruce (1978), however, traces the particular turn of phrase to
the Aramaic spoken by Jesus, in which debts referred idiomatically to sins (p. 76).
Indeed, the thrust of passages such as the Lords Prayer centers clearly on the concept of
forgiveness, rather than on debt per se. Thus a parallel tradition in English translation
uses trespasses rather than debts in Matthew 6:12, and aside from literal consistency
with the Greek there is no fundamental reason to prefer one to the other.
4
In the New Testament parables, forgiveness is an act of grace rather than of
justice or obligation. It would not occur if God were merely just, and not also merciful;
moreover, it is the prerogative of the powerful and righteous, rather than of the weak and
sinful. Popes famous couplet captures these complex connotations: To err is human; to
forgive, divine. Throughout the New Testament, and not only in the Lords Prayer, the
release from debt is used as an analogy for forgiveness. Thus when Peter asks Jesus
Lord, how many times shall I forgive my brother when he sins against me? Up to seven
times?, Jesus answers that
... the kingdom of heaven is like a king who wanted to settle accounts with his
servants. 24 As he began the settlement, a man who owed him ten thousand
talents was brought to him. 25 Since he was not able to pay, the master ordered
that he and his wife and his children and all that he had be sold to repay the debt.
26 The servant fell on his knees before him. Be patient with me, he begged,
and I will pay back everything. 27 The servants master took pity on him,
canceled the debt, and let him go. (Matt. 18: 21-27, NIV).
In verse 27, the master does not forgive the debt; his simple action is to cancel it. It is
the gracious nature of this act, and its liberating effect on his subordinate, that begins to
illustrate what Jesus means by forgiveness of sins. The passage thereby employs, to
powerful effect, two very distinct ideas.
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The complex, normative, and novel concept of
forgiveness of sins is brought to life via the simple, descriptive, and familiar concept of
cancellation of debts. It is in conflating the two concepts that the term debt
4
The primacy of forgiveness is illustrated by the fact that while all early English translations employ
forgive in the Lords Prayer, the earliest translation directly from the Greek chooses trespasses over the
literal debts: And forgeve vs oure treaspases, even as we forgeve oure trespacers. (Tyndales New
Testament, 1534, cited in Bruce, op. cit., p. 46). Before Tyndale, passages in the English vernacular were
almost certainly translated from the Latin Vulgate of c. 400, as was the Wycliffe bible. Old English
versions appear to use gyltas (e.g., Ags Gosp. Matt. c. 1000, vi.12: And forgyf us ure gyltas, cited in
Oxford English Dictionary); Middle English versions (1100 1500) variously use either debts or
trespasses. For a sampling of English translations, see The Lords Prayer in English, a web page compiled
by Catherine N. Ball
http://www.georgetown.edu/cball/oe/pater_noster.html).
5
Thomas Aquinas viewed the use of metaphor as a central feature of Gods communication with man in
the bible: It is befitting Holy Scripture to put forward divine and spiritual truths by means of comparison
with material things. For God provides for everything according to the capacity of its nature. Now it is
natural to man to attain to intellectual truths through sensible things, because all our knowledge originates
from sense. Hence in Holy Scripture spiritual truths are fittingly taught under the likeness of material
things. (Summa Theologica Q. I, Art. 9)
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forgiveness acquires its modern and, in the economic sphere, largely misdirected,
normative overlay.
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3. Debt cancellation: two alternative traditions
Debt contracts go back as far as the sea loans of Greek antiquity, and the practice of
lending was common enough within the tribes of Israel that the Mosaic law set out
regulations to govern it. Debt obligations were therefore ready material for the parable-
making of the New Testament. But the earlier traditions were far from interpreting debt
cancellation as an act of forgiveness in the New Testament sense. Their particular
emphases instead point to the normative ambiguity of debt distress as a human
phenomenon.
Sea loans were extended by wealthy merchants to ship captains who carried trade
across the Mediterranean. These contracts contained an explicit allowance for
cancellation in the event that cargo was lost to piracy or storm. This provision allowed
lender and borrower to share risk efficiently while exploiting an opportunity for mutual
gain. In their ex ante provision for risk-sharing and their deployment in support of
commercial enterprise, sea loans anticipated by several millennia the forms of financial
contracting that were to develop during Europes commercial revolution.
The Mosaic law, as set out in the Hebrew Torah, lays out three cyclical periods of
rest: the Sabbath, occurring every 7
th
day, the Sabbatical year, occurring every 7
th
year,
and the Jubilee year, occurring every 50
th
year (following 7 sabbaticals). Jews are
admonished not to work on the Sabbath day and not to plant or harvest in either the
Sabbatical year or the year of Jubilee. The Sabbatical and Jubilee years, however, have
distinctive features associated with freedom from the bondage of debt or servitude. Thus:
1 At the end of every seven years you must cancel debts. 2 This is how it is to be
done: Every creditor shall cancel the loan he has made to his fellow Israelite. He
shall not require payment from his fellow Israelite or brother, because the
LORDs time for canceling debts has been proclaimed. (Deut. 15: 1-2, NIV)
Consecrate the fiftieth year and proclaim liberty throughout the land to all its
inhabitants. It shall be a jubilee for you; each one of you is to return to his family
property and each to his own clan.. (Lev. 25:10, NIV)
The presumption here is not that loans are made to exploit commercial
opportunity, but rather to avert disaster. Indeed the Mosaic law encourages such lending:
7 If there is a poor man among your brothers in any of the towns of the land that
the LORD your God is giving you, do not be hardhearted or tightfisted toward
your poor brother. 8 Rather be openhanded and freely lend him what he needs.
(Deut. 15: 7-8, NIV)
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There are many other biblical shadows in the terminology and legal structure of contract law, including
the term grace period and the fact that US bankruptcy law prohibits an individual from filing for personal
bankruptcy more than once every seven years (see below on the Hebrew sabbatical, or seven-year
-----Got that potese, those with money loan it out and every seven years those without just keep it---Marxist as all get out right?
"If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be." -- Thomas Jefferson
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