Debt jubilee

Debt, not barter, is the true origin of money.

Admittedly my understanding of money is limited. But I’d love to learn more. Much of my initial journey into money and its uses came from listening to Dave Ramsey, reading his books and helping facilitate his courses, twice. 

I then ignored everything from him for a decade and recently popped back in to see what he’s been up to. I realize that there’s been a divergence in how I think about money now, but I don’t feel anywhere near qualified enough to understand what the divergence is. 

I imagine the core nugget comes from the idea that debt can be useful, an idea that was enathema to everything I learned from Dave’s stuff. 

I’ve been curious to read a book on the topic, so found this article on debt jubilee fascinating. 

For the corporate person, shedding debts through bankruptcy is an honorable practice. Far from being a source of shame, the well-timed, well-structured bankruptcy is just evidence of financial acumen.

I love the contrast this article paints between how corporate entities can work with debt and money, but it’s quite different for smaller individuals. 

if we accept the jubilee view – that debt is the result of accumulated misfortunes, often including the misfortune of birth into poor station – then bankruptcy represents a second chance with an opportunity to dodge misfortune.

I’ve been lucky (or blessed?) to avoid massive misfortune up to this point in my life. But some of my beloved friends and family have not, and I really appreciate this take that it’s not a moral failure. It’s that life is messy and sometimes doesn’t work. 

After people are given the benefits of bankruptcy, they are less likely to rely on public benefits. They get better jobs. Their families live better lives. Their creditors get some of their money back (which is all they can realistically expect, since “debts that can’t be paid, won’t be paid”).

If this data is correct that’s a beautiful story of the jubilee working for some people. 

(Via Pluralistic)