DP12605 Could/Should Jubilee Debt Cancellations be Reintroduced Today?

Author(s): Charles A E Goodhart, Michael Hudson
Publication Date: January 2018
Keyword(s): Babylonian and Byzantine Empires, Debt-Canceling Jubilees, Equity Participation, inequality, Land Tax, Student Loans
JEL(s): E60, E61, E62, E65, H10, H23, H80, N30, N35, P43, Q15, R52, Z13
Programme Areas: Public Economics, Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12605

In this paper we recall the history of Jubilee debt cancellations, emphasizing what their social purpose was at that time. We note that it would not be possible to copy that procedure exactly nowadays, primarily because most debt/credit relationships are intermediated via financial institutions, such as banks, insurance companies, etc., rather than by governments or wealthy families directly. But we argue that the underlying social purpose of such Jubilees- to keep debt within the reasonable ability to be paid without social and economic polarisation - could be recreated via alternative mechanisms, and we discuss the politico-economic arguments for, and against, doing so