Every seventh year you shall grant a remission of debts.
So decrees a biblical text, Deuteronomy 15:1. It was a standardisation of a known practice. Newly crowned Mesopotamian kings often cancelled debts and liberated people who had sold themselves into slavery because of debt. Cancellation would have been a popular move as there would have been more debtors than creditors – then as now.
The ancients had the good fortune to live before the invention of that absurd theory the ‘trickle-down effect’. Those who have barely enough to survive from day to day do not have the resources to invest in a better future. It is those with wealth to spare who may find ways to enrich themselves still further.
Or may not. In many past societies the whole point of accumulating wealth was to gain prestige by giving it away. This was true of the Angles and Saxons who invaded England in the early Middle Ages and of nineteenth century capitalists donating museums and parks to their local city. Today, though, the ultra-rich are expected to use their resources making themselves richer still, and when they do they are applauded for ‘contributing to the economy’.
It has not always been easy. The medieval Catholic Church laid down limits to how much wealth anybody should have. Now, not only are there no such limits but international financial institutions make the accumulation of wealth incomparably faster than ever before.
Enrichment and impoverishment
Throughout history it has been normal for the rich to get richer at the expense of others – which often means the poor getting poorer. For many, poverty has left only one option, to borrow money even though it may be impossible to repay it. This carries on until one of three things happens: war, revolution or deliberate redistribution by governments. I would guess that redistribution from rich to poor is more often violent than peaceful.
We are now heading towards one of these. In Europe the last major redistribution was the setting up of welfare states and their equivalents just after the Second World War. The war itself had just produced another such redistribution, though more chaotically. A few decades later the principle of a more equal society lost popularity; from the late 1970s onwards the brakes were taken off and inequality has been accelerating ever since.
For the past week European governments have been watching the new government of Greece with alarm. The Troika imposed ever-increasing austerity on the Greeks, who have now elected a government determined to reject it.
The Greeks took out the loan. Justice demands that they repay it.
Or does it?
What is justice?
Modern western society has inherited two contrasting accounts of justice. The older one has its roots in a sense of need. What makes for a healthy society? Everybody has needs which must be met. Just as we feed our children without demanding anything in return, so also our sick or elderly or handicapped neighbours need looking after. Conversely, there is a limit to how much anybody needs. Society decides how the wealth should be distributed. The Welfare State presupposed this idea of justice.
The other has its roots in individual contracts. Justice is that you obey the rules. If you borrow with a commitment to repay, repay you must. If you and your children are starving, that’s irrelevant. The state’s job is not to redistribute, but to ensure that the rules are kept. Some people argue that all income tax is theft.
Political theorists and ethicists debate these theories of justice endlessly. When there is such failure to reach consensus, it is often a good idea to climb higher up the philosophical tree and ask where the conflicting ideas come from. In what setting does each of them make sense?
Here we get into deep theological water. The egalitarian idea of justice has its historical roots in a god who has a purpose for our lives. However the purpose is described, it will include the idea that we should care for each other and meet each other’s needs.
The individualistic idea can be rooted in gods who don’t care, or more often today in the absence of any gods. Here we are, the product of unthinking, unintending laws of nature. They cannot think but we can. Deciding what to do and what counts as justice are processes of thought, which only humans can manage. When we as thinking agents negotiate against each other, there are no right answers: it is up to each one of us to bargain as successfully as we can.
So Angela Merkel insists that a deal is a deal, and the Greeks have to abide by it, however bad their living conditions get. She argues that ‘There has already been voluntary debt forgiveness by private creditors’.
‘Forgiveness’? The word is often used in this context, but it applies a term of religious morality to a situation which rejects religious morality.
Creditors sitting on billions of euros lend money at rates of interest to suit themselves, and thereby drive millions to unemployment, homelessness and starvation. No doubt from the perspective of an uncaring, individualistic, self-interested, contractual account of justice it is up to them to decide whether to ‘forgive’ the debtors. But if that account of justice is the right one, why forgive? Let them starve to death and justice has been done. If people find the idea unsettling, maybe it is the wrong account of justice after all.
To anyone who has an ounce of humanity in them, creditors who think like that are the ones in need of forgiveness.