Why the Bible's subversive teaching on debt is more relevant than ever

by Tim Jones

Posted: 26 Apr 2019

Twenty-one years ago, as a wide-eyed 16-year-old, I went on my first ever protest. Travelling to Birmingham with a group from my Baptist church, we joined 70,000 others to surround the G8 summit, demanding debt cancellation for 52 impoverished countries by the year 2000.

The Jubilee 2000 campaign explicitly used the language of a "Jubilee" from the Jewish scriptures, the Christian Old Testament, to motivate people to support the campaign for debts of countries in Africa, Asia and Latin America to be cancelled as a true way to celebrate the millennium.

People of all faiths and none supported the campaign, but the Jubilee language helped to motivate support from Christians and churches in countries around the world. Travelling to Birmingham with my church was one small example of this.

By 1998 the debt crisis in impoverished countries had been ongoing for almost two decades. Many countries had been trapped in debt, with reckless lenders being bailed out by new loans from the IMF and World Bank, while economies stagnated and debt increased.

The Birmingham G8 protest was a pivotal moment in the global "Jubilee" campaign. It was followed by more large protests including in Cologne in 1999, Genoa in 2001 and Edinburgh in 2005. Over 20 million people around the world signed a petition calling for debt cancellation. Eventually, the G8 leaders committed in 2005 to a significant amount of debt cancellation, which has led to 36 countries having $130 billion of debt cancelled.

However, the Jubilee campaign's proposals to prevent debt crises from occurring again were largely ignored. Ten years after the 1998 protest, this failure was brought home with the financial crisis in North America and Europe, and subsequent Euro zone debt crisis which replicated many of the features of the 'Third World Debt Crisis' in the 1980s and 1990s.

The "Jubilee" of the Jewish and Christian scriptures points towards regular debt cancellations, rather than just a one-off. A recurring cycle of debt cancellations every 7 or 49 years may not be practical, but it speaks to the need for ongoing systems to be in place to prevent the cycle of debt crises.

Ten more years on, we are now witnessing another debt crisis emerging across many impoverished countries. Average government external debt payments have increased 60% in the last three years, and are at the highest level since 2004. The IMF reports that of 68 impoverished countries it assesses,32 are in debt default or at high risk, and just 11 at low risk.

The global financial crisis which began in 2008 also exposed how debt can lead to economic and social crises in rich countries. In many of these countries, from the UK and US to Ireland and Iceland, it was the debts of private banks and companies, rather than governments, which caused the crisis. The Occupy movement which arose as a response often used the language of "Jubilee" to call for people not to have to bear the costs of debts created by powerful banks.

One ongoing consequence of the economic stagnation in the UK which has followed the 2008 crisis and the political response to it, is that people, especially those on low pay, have become more dependent on debt to survive. Three million households across the UK are now severely indebted- paying more than a quarter of their income to their creditors. Almost half of these households are in the poorest 20 percent of households.

The "Jubilee" concept is again inspiring those campaigning for action to tackle this personal debt crisis in the UK. Jubilee Debt Campaign is working in a coalition with the New Economics Foundation, Centre for Responsible Credit, Toynbee Hall, Research for Action and Fair by Design to call for a cap on interest rates and charges on all forms of consumer credit, alongside measures to tackle the root cause of the crisis such as increases in the minimum wage.

Debt cancellation is a necessary response when debts are too high. But one-off debt cancellations are not sufficient. Crises will keep being repeated unless the underlying causes of debt dependence are tackled, both for countries and for people.

Central to the Jubilee tradition - and Jesus' parables on debt in particular - is that all lenders are ultimately debtors too, and lenders need to take responsibility for the debts they create. Cancelling debt is not an act of charity, but a recognition that a loan was unjust, or has failed, or changed circumstances mean the debtor should no longer repay. Lenders share the responsibility over debt when they give a loan, and lenders can impoverish people and countries through their actions.

To move towards a more just approach to debt requires lenders to take greater responsibility for their role in creating debt, alongside a recognition that sometimes debt needs to be cancelled - not as a charitable act of forgiveness on the part of the lender - but in recognition of the injustices that the debt is based on and perpetuating.


This article has been written for our series on Debt in partnership with Theos think tank.

The views expressed in this article do not necessarily reflect the views of Theos and St Paul's Institute. For our views, read our report on debt.


About this author

Tim Jones is Head of Policy at the Jubilee Debt Campaign. He is a trained political economist.

Disclaimer

The opinions expressed in this article are those of the author, and do not necessarily represent the views of St Paul's Institute or St Paul's Cathedral.