Argentina’s default on its sovereign debt in 2001 set in motion a long and complicated process designed to convince those to whom it owed money to restructure the loan. By 2010, the troubled Latin American nation, now more or less back on its feet, proposed a new arrangement, offering its bondholders about 30 cents on the dollar. An overwhelming majority signed on, but a handful—mainly investors who bought the bonds from their original holders for a reduced price, expecting to turn a profit—did not. A deal, they said, was a deal.
Unmoved, the Supreme Court decided not to review the earlier ruling. What happened as a result was nothing: Sovereign debt markets registered little movement, and Argentina’s debt, after an initial dip, bounced back once the government in Buenos Aires grudgingly hinted that it was ready to negotiate with its bondholders. Clearly undeterred by the Supreme Court’s decision, Ecuador, having itself defaulted in 2008, waited just one day before taking to Wall Street to sell $2 billion worth of 10-year bonds.
The economic predictions of those who supported Argentina’s restructuring bid fell flat, but what about their moral argument? In an op-ed in the New York Times, one such supporter, Mark Weisbrot, the co-director of the Center for Economic and Policy Research, a progressive think-tank, essentially served up Ezekiel’s old chestnut about fathers eating sour grapes and their children’s teeth growing numb.
Jewish law, in its infinite wisdom, offers a simple answer to this question: until the debt is paid.
It’s a moving story, but it solves very few problems. We humans are not divine, and our interactions are rarely guided solely by spiritual edicts. We’re a transactional species; what we need is not a parable but contract law. This realization haunted Christianity throughout much of its early years as an ascendant religion. Read Peter Brown’s majestic Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 A.D., and you’ll get a fine portrayal of how a Roman economy based on a model of civic obligation was gradually replaced by a “new emphasis on the supernatural efficacy of the Christian gift.” Charity, debt, wealth—all were governed by a set of theological entanglements that sanctified poverty even as the church grew richer and more powerful. All the while, it tried to negotiate the practical meaning of Jesus’ insistence that the affluent had little reason to expect any part of the kingdom of heaven.
Judaism, on the other hand, delivered a more earthly account. While advocating the forgiveness of debt every seven years as a measure against destitution, it nonetheless realized the need to approach economic questions in all their thorniness, stacking the Talmud with numerous in-depth discussions about loans, interest rates, and other practicalities. But the essence of the religion’s approach to these matters was best captured, as is so often the case, by Maimonides, who famously offered up a hierarchy of eight levels of charity. At its bottom was begrudged giving; at its top, supporting a fellow Jew by empowering him to grow resilient and self-sufficient.
This, then, is Judaism’s radical difference: Rather than advocate unequivocal forgiveness and channel all transactions through a central institution, i.e., the church, it opted to remain committed to the uneasy exchanges between people, which meant offering measures of mercy but ultimately insisting that words be kept and obligations met.