Home > Uncategorized > Your economic history for today: Egyptian debt law

Your economic history for today: Egyptian debt law

I find myself immersed in all kinds of obscure (and not so obscure) texts and I thought that some of you might find it of interest to read what Diodorus of Sicily had to say (around 45 BC) about Egyptian debt law:

Their laws governing contracts they attribute to Bocchoris. These prescribe that men who had borrowed money without signing a bond, if they denied the indebtedness, might take an oath to that effect and be cleared of the obligation. The purpose, was, in the first place, that men might stand in awe of the gods by attributing great importance to oaths, for, since it is manifest that the man who has repeatedly taken such an oath will in the end lose the confidence which others had in him, everyone will consider it a matter of the utmost concern not to have recourse to the oath lest he forfeit his credit. In the second place, the lawgiver assumed that by basing confidence entirely upon a man’s sense of honour he would incite all men to be virtuous in character, in order that they might not be talked about as being unworthy of confidence; and, furthermore, he held it to be unjust that men who had been trusted with a loan without an oath should not be trusted when they gave their oath regarding the same transaction. And whoever lent money along with a written bond was forbidden to do more than double the principal from interest.
In the case of debtors the lawgiver ruled that the repayment of loans could be exacted only from a man’s estate, and under no condition did he allow the debtor’s person to be subject to seizure, holding that whereas property should belong to those who had amassed it or had received it from some earlier holder by way of a gift, the bodies of citizens should belong to the state, to the end that the state might avail itself of the services which its citizens owed it, in times of both war and peace. For it would be absurd, he felt, that a soldier, at the moment perhaps when he was setting forth to fight for his fatherland, should be haled to prison by his creditor for an unpaid loan, and that the greed of private citizens should in this way endanger the safety of all. And it appears that Solon took this law also to Athens, calling it a “disburdenment,” when he absolved all the citizens of the loans, secured by their persons, which they owed. But certain individuals find fault, and not without reason, with the majority of the Greek lawgivers, who forbade the taking of weapons and ploughs and other quite indispensable things as security for loans, but nevertheless allowed the men who would use these implements to be subject to imprisonments.

  1. rddulin
    December 20, 2015 at 1:49 pm

    It would be interesting to see a list of all instances of debt being forgiven en masse for the past several thousand years. Also how the particular economy fared afterwards.
    It certainly seems to be a persistent problem.

  2. December 21, 2015 at 4:13 am

    First paragraph sounds a bit like Adam Smith in Moral Sentiments – a person’s reputation is important.

    • blocke
      December 21, 2015 at 11:48 am

      As Montesquieu in the Spirit of the Laws explained; it all depends on the values the community respects, and these vary from Republics, to Monarchies, and Despotism’s..

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