The Jubilee Celebration has a long history throughout the world, dating back to biblical times, when individual debts would be forgiven every 50 years. During the Great Depression certain household debts were forgiven, and the concept is gaining popularity today as well.
Q. Well, its very nice to honor Queen Elizabeth, but… this is a business show.
A. Indeed. But we’re bringing this up because of the basis of the Jubilee celebration; it’s origins are in the very ancient and worldwide tradition of periodic debt forgiveness. And some pretty serious people are starting to talk this up as something we need to look at, including Steven Roach and Ken Rogoff.
Q. Ah, right. So I know there are biblical references to Jubilee, a tradition of forgiving individual debts every 50 years.
A. Yes, and that demonstrates how strong the tradition is in western culture. But it’s been an extremely common idea throughout the entire globe since the dawn of civilization. Chinese Emporers did it routinely; so did rulers in India. It’s actually one of the key parallels between all cultures throughout world history.
Q. Why? You would have thought debt forgiveness would be the last thing ruling aristocracies would want to see happen.
A. Of course there are lots of theories and reasons. Sometimes, a king wanted to earn “power with the people” to ward off an encroaching aristocratic class; sometimes the King and the aristocracy agreed to do it together so they could convince the peasantry to go to war for them. But the basic argument, certainly in the religious texts, has been that to avoid saddling unborn generations with the debts of their ancestors.
Q. Well, that’s certainly a relevant idea today. But is it a realistic policy proposal?
A. Look, we’ve done it before, in the Depression, for certain household debt, so you have to say the answer is “yes”…especially when you look at the extremely over-indebtedness of the whole world. But I actually think you’re already seeing a subtle form of Jubilee right now, in the worldwide race to currency devaluation. The central banks are sort of declaring their own Jubilee.
Q. Right, because obviously printing money effectively reduces debt…
A. Yep. And by the way, maybe the central banks are even sending us a clue on this point: don’t forget that “Queen Elizabeth” and “Quantitative Easing” are both referred to as QE!