“This fiftieth year is sacred—it is a time of freedom and of celebration when everyone will receive back their original property, and slaves will return home to their families.”
A few years ago, I came across a really interesting idea about property rights. I was listening to a radio programme, broadcast from a church in the City. It was an ecumenical discussion, involving different faiths and examined the morality of debt driven economies. I wish I had kept the podcast, but one contributor was a Rabbi, who introduced me to the ancient Hebrew idea of a “jubilee”.
In Britain, we normally associate a jubilee with a special anniversary, such as the recent Diamond Jubilee of the Queen, but in the Biblical sense the concept was very different. It could also hold a surprisingly relevant idea to us today.
One of the great plagues of modern societies has been the cycle of boom and bust. Policy makers have been obsessed with conquering this. Gordon Brown infamously claimed to have brought an end to it, only to be forced to eat those words, when he became Prime Minister. The “growth at all costs” doctrine of Keynesian economists has left us living in a grossly distorted world. There is no doubt that the debt burdens which accumulated from 2001 until the GFC were the direct result of excessively easy money policies of the world’s major central banks. That they then went on to try and solve a debt crisis with even more debt will almost certainly turn out to be folly of the highest order.
As we keep saying here at Spreadbet Magazine, absolutely nothing has been solved and a reckoning is still to come.
So what about the ancient Hebrew Jubilee? What possible relevance could that have?
In this sense, a jubilee was a year every fifty years, in which all property rights were reset. This was a religious ritual, but served a deeply useful economic purpose. It helped ensure that balance could be restored to the society, in an orderly, expected and constructive manner.
Today, we rely on the hegemony of brutal market forces to restore balance. This process is usually extremely painful and causes widespread disruption. Imbalances and inequalities are allowed to fester and grow in our system until they become so extreme there is a strong counter reaction.
Where I can agree with the Keynesians is that this is a terribly inefficient method of collective management. However, where the Keynesians fall over is their inability to accept failure and the need for renewal. The ebb and flow of society means that social systems come and social systems go. What is useful for one generation becomes redundant for another.
The ancient system of jubilee accounted for this. By resetting property right every two generations (i.e. every 50 years, 2,000 years ago), this meant that any systemic imbalances which built up (as must have been the case) would have been eased. More importantly, by shedding these imbalances, this allowed the next generation to move forward in a period of genuine economic growth.
As things stand today, there is no hope of returning to genuine growth, while debt burdens remain as high as they are. There is too much weight pressing down on the economy. Not only does this make life unnecessarily difficult and robs economic opportunity from the young, it also denies reality. At some point a widespread collapse of the current system is inevitable. The trillions of dollars of QE have only served to act as a stop gap, prolonging the misery of this drawn out crisis and further weakening our already weak position.
Sadly it is too late to do anything about this now, but when the crash comes, perhaps we will be open to radical new ideas. And who knows, perhaps we will look back 2,000 years and find some answers there?