1. Babylonian debt cancellations (c. 2400-1400 B.C.)

Ancient rulers periodically cancelled debts to prevent social unrest. An estimated amount is difficult to quantify, but includes large portions of agricultural loans. To give an idea of the proportion, the current value could be between $1 and $5 billion.

Debt is as old as agriculture, but ancient civilisations knew that letting debt accumulate indefinitely could only lead to catastrophe. The oldest known text of law, the Hammurabi Code, stipulates that debt should be forgiven in case of famine or natural catastrophe. In Sumerian and Babylonian times, thousands of years before Christ, debts were also traditionally forgiven by the new king at the beginning of his reign. According to economist Michael Hudson, the main reason was to avoid the concentration of wealth in a few oligarchic families, which would eventually form armies and become a threat to social order, and to the king himself. So it was a question of self-preservation for society as a whole to show periodical clemency towards indebted people and avoid excessive concentration of wealth. 

In his book “…And Forgive Them Their Debts”, Hudson argues that the first sermon of Jesus Christ was actually about debt cancellation. The tradition of the debt jubilee was deeply ingrained into Judaism by the time of Jesus Christ, and the sentence “I’ve come to proclaim the year of the Lord’s favor”, could in fact be a reference to the tradition of periodical debt cancellation. The sentence is present both in the Old Testament (Isaiah 61:1-2) and the New (Luke 4:18-19), where Jesus himself is reading from a passage of the Hebrew prophets and makes a reference to the tradition of the Jubilee year, when slaves were freed and debts were forgiven. In the time of Jesus, the Roman empire was conquering vast new territories and all the communities under its rule had to send numbers of slaves and debt payments. So it is not too far-fetched to consider Jesus a revolutionary in his day.  

The tradition of the jubilee was later adopted by the Catholic Church. In our time, the Jubilee 2000 was a global multi-faith movement that took place just before the year 2000, successfully calling for the cancellation of debt in countries of the South, which were suffering from a debt system imposed by former colonial empires.  

This article is the first part of a series dedicated to the timeline of debt cancellations in history.