Northern Advocate Column, Uncategorized

Dead monarchs and the cancelling of debts

17 November 2022

When the kings of the ancient Sumerians died or were overthrown by a rival, it was customary for a time to cancel debts for ordinary citizens. The wiping of debts was like a society reset. A necessary one in those early days of civilisation, when the cultural memory of more egalitarian communities still lingered.

Four and half thousand years ago, in the land that’s now modern-day Iraq, debt and early forms of money were relatively new, as was control or ownership of land. In these centralised economies, Sumerian peasant farmers could get into difficulty and incur debt. If it got unpayable, they might be forced to hand over land to creditors or the state. Often then having to sell themselves or family members into slavery. A drought, declining yields, invasion by another regional power, raids by nomads, or high taxes, could all see a peasant family’s fortunes and status in society plummet. Meanwhile, those lucky or in a position to play the system could amass a greater share of wealth.

The problem was, hierarchy and inequality weren’t good for society’s morale. When there are winners and losers, what reason do the losers have for sticking around to defend the winners from an invading army or nomad raiders? Some might prefer to join the nomads or engage in some banditry instead. Hence the practice of cancelling debts when a new monarch came to power. It was a practical way of maintaining the allegiance of commoners to the state and to the privileged hierarchy at its centre.

I tell this tale from the ancient world because there are parallels with today. In many countries, personal debt is high, fuelled by a house price boom and the spiralling cost of living. Wealth disparities have only grown since the Covid pandemic hit. Young people who aren’t from wealthy families are feeling aggrieved. Inequality is stoking political tensions in every country, whether mature democracies or oligarchal states like Russia and China. And it’s contributing to military tensions between nations. Rather than deal with the inequalities, one response is to try and unite a country by drumming up nationalism or even starting a war.

This is the world in which New Zealand might start looking at constitutional change following the death of Queen Elizabeth II. There will be different ideas about what we should do and at what speed. But regardless of who our head of state is (or whether one is even needed), shared allegiance to the state is undermined by inequality. The Sumerian rulers understood this. That’s why when one monarch died and a new one ascended the throne they tried to heal society by cancelling debts. The goal was to restore some equality (and political stability) which had been eroded in the previous years.

Skip forward a few millennia. On September 26, New Zealanders will get a one-off public holiday to mourn the death of Queen Elizabeth. A surprising move perhaps in these supposedly modern times. The Labour government has been smart (some might say calculating) in realising the opportunity to try and unite us in mourning, no matter how forced it feels.

While we’ll take the paid holiday, I’m sure many of us would prefer our debts were cancelled, like in Sumerian times. And maybe that idea is not so far fetched. Word is, if Matthew Hooton writing in the NZ Herald can be believed, Labour is considering cancelling student loan debt as its big election year promise. In the United States, President Biden already has plans to cancel $10,000 worth of student debt for low-to-middle income borrowers. At least some in ruling circles understand that you can’t have a functional society when citizens are overburdened with debt and wealth inequalities are left to grow unchecked.

The vast stretch of time and geography between an ancient Middle Eastern civilisation ruled by kings and modern New Zealand seems, on the face of it, enormous. It’s tempting to think we share nothing in common with those people and their attempts at state management. And yet old problems persist, giving rise to the demand for old solutions.

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