Thursday, March 11, 2010

Ancient Advice for the World's Economic Woes

At the end of every seven years you must cancel debts. This is how it is to be done: Every creditor shall cancel the loan he has made to his fellow Israelite. He shall not require payment from his fellow Israelite or brother, because the LORD's time for canceling debts has been proclaimed…

If there is a poor man among your brothers in any of the towns of the land that the LORD your God is giving you, do not be hardhearted or tightfisted toward your poor brother. Rather be openhanded and freely lend him whatever he needs. – Excerpt from Deuteronomy 15: 1-11

What would the world would be like if we followed this policy?

Yes I know, there are some details to work out, but it is an interesting concept. If lenders knew that their loans would have a maximum term of seven years, after which the loan would be dissolved, how would that change lending practices?

It seems to me that folks would lend smaller amounts and there would be less money in the system. But that’s not really a bad thing is it? Money created by credit isn’t “real” money anyway. It is value created by trust in the borrower. And we saw in September of 2008 what happens when that trust goes away.

That fake credit money disappears.

One thing is certain here. We would be forced to live closer to our means. And on the flip side, there would be less incentive for the hustlers to get over on borrowers.

The other interesting part is the focus on helping the poor. It says “be openhanded and freely lend him whatever he needs.”

Counterintuitive right?

Not necessarily. Muhammad Yunus and his bank won the 2006 Nobel Prize in Economics for his lending to the poor. He created micro loans that helped millions of Bangladeshis (mostly women) buy phones, cows, and the little things that they needed to get their small businesses started. One phone lending program had a 98% payback rate!

Often times the poor around us don’t need handouts, but just a little helping hand. However, it seems like we have a tendency to lend with so many strings attached that the borrower becomes a slave to the debt.

And before we pass too much judgment on banks let us not forget that we sometimes do this in our daily lives. Do you know someone who only gives when they know that they will get the same or more in return? This could be money but also time, favors, energy, help, or love…

Odds are that you do, and if you don’t, maybe that person is you… I know I have done this once or thrice.

But what’s the point of all of this? Why bring up this old scripture. Clearly it doesn’t fit today’s world right?

Maybe it does. The message of generosity, forgiveness, and redemption is a powerful one. If one banker in Bangladesh can improve the lives of six million people with an average loan of $200, what more can be done?

It looks like that old line about the mustard seed is true…

"I assure you, if you had faith as small as a mustard seed you could say to this mountain, 'move from here to there,' and it would move. Nothing would be impossible." – Mark 17: 20-21

More prosperity from more generosity…who’d have imagined…

Today’s Reading: Deuteronomy 14-16; Mark 12: 28-44

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