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Borrowing, Lending, and Pledges

A bit more on debt.

Economics God’s Way (5)

“If you ever take your neighbor’s garment as a pledge, you shall return it to him before the sun goes down. For that is his only covering, it is his garment for his skin. What will he sleep in? And it will be that when he cries to Me, I will hear, for I am gracious.” Exodus 22.26, 27

Bad debt
We need to say just a bit more about debt and why God has taken such care to circumscribe the practice of borrowing and lending.

Not that long ago it was not uncommon for people whose homes had gone “under water” simply to walk away from them and leave the lender with the loss. College students, in increasing numbers, incur tuition debt they may or may not repay, and defaults continue to rise. Credit card debt leads many borrowers to bankruptcy, leaving banks and merchants—and the rest of us—holding the bag of bad debt.

Bad debt can lead to inflation as lenders raise interest rates to cover losses and government creates more money for loaning through the Federal Reserve.

Such bad debt practices—or risky debt, since not all such dealings go bad—are dwarfed by the promises and vows people make, which they casually and routinely break when it becomes inconvenient to fulfill or keep them. The rate of divorce, while declining from the 1980s high of 50%, still hovers close to 40%, including within the household of faith. The promise “till death us do part” turns out to be like bad debt or a failed investment. Church members routinely make “vows” of membership, which they promptly forget and ignore. Politicians make promises on the campaign trail they have no intention of fulfilling once they are in office. Advertisers promise their products will practically change our lives and ensure eternal happiness—before, that is, they either fall apart or wear out.

All such bad promises are like bad debt and betoken an attitude of self-interest which pervades our society.

Bad debt is just an extension of the false promises we—or the economy—“bank” on for happiness in a society driven by materialism and covetousness. We hope only to make “good use” of such practices, and not to be victimized by them ourselves. But that’s not always the way things turn out.

The hedge of the Law
In the Law of God—established by God Who is gracious, as He reminds us—such covetous and deceitful practices are consistently discouraged. Borrowing, lending, and making vows and pledges in ancient Israel were not uncommon practices, but they appear to have been carefully engaged, with a view to justice in all its forms.

God understands the weaknesses of men, and our tendency to covetousness and self-love. His Law was designed to erect a hedge against such failings of love and frailties of the flesh, so that the economy of His people could function for justice and neighbor-love. Any borrower would expect to pay back his loan—or if he borrowed goods, to return them in full, with perhaps, but not necessarily, some interest as well. If he could not, he might be subjected to some form of restorative or even retributive justice.

Those who played fast and loose with the truth, for example, by making vows or contracts they did not intend to keep, would also find themselves subject to the judgment of local rulers when their false pledges were shown to have come up short of what they promised.

It was also lawful in ancient Israel for a lender to take an item in pledge, in order to secure his loan against default by the borrower. Collateral, we call it today. Typically, we can imagine, the value of the pledge would be in line with the amount of the loan. This would keep borrowers from getting over their heads in debt, and it would assure lenders that the value of their loan would be returned to them, come what may.

However, the Lord expected justice and neighbor-love to prevail in all such arrangements. The lender could possess the borrower’s pledge if he chose. However, if the pledge were necessary to the lender’s wellbeing—such as a sleeping cloak—it would have to be available to the borrower as needed. What was true of cloaks was also true of farm animals and implements and other items of value. No one was allowed to take as a pledge the borrower’s means of earning a living or providing for himself and his family (Deut. 24.6). God expected lenders to act with grace toward borrowers, and borrowers to act with integrity toward lenders.

“Unsecured” debt
This practice of taking an item in pledge discouraged the idea of “unsecured” loans—such as credit cards, student loans, and the like. (“Unsecured debt” in ancient Israel was called “charity.”) The possibility of having to put up a pledge would have meant that debtors would have limits imposed on them concerning how much they could borrow. The notion that one could accumulate debt far in excess of the combined value of all his personal property is an invitation to injustice and, thus, foreign to the economy set forth in the Law of God. The fact that one might lose all his property should he default on his loan would certainly have discouraged more borrowing than was necessary.

Public policies that encourage or enable incurring debt beyond one’s net worth, or that jeopardizes one’s ability to provide for his wellbeing, should not be supported. Nor should they be practiced by government at any level with respect to its own doings. All borrowing and lending should be secured in real property and engaged case by case between individuals—or institutions such as banks—who know, trust, and love one another before the Lord.

This is not likely to be the case in a secular society and a materialist economy such as our own. However, the teaching of God’s Law provides guidelines for Christians in thinking about their own practices of borrowing and lending, and it can serve as a standard for us to focus on as we engage in economic activity and discussions of public policy with respect to this aspect of economic practice.

For reflection
1. Change in practices of indebtedness may be a long time coming. But what can we as Christians do to help bring more of God’s economy into our world?

2. Ultimately, bad practices of borrowing and lending are matters of the heart. Explain. Why does this make the Gospel so important in our materialistic age?

3. What would you suggest as a way of preparing young people to follow God’s standards for borrowing and lending rather than the world’s? Should the local church have a role in this?

Next steps—Preparation: Pray for yourself and the people in your Personal Mission Field, that you all may practice more of God’s approach to these economic principles. How can God use your own practice to encourage others?

What is the place of the Law of God in the Christian’s life? Our book, The Ground for Christian Ethics, answers this question and shows us again why Jesus taught us that keeping the Law is an indispensable part of our calling in God’s Kingdom. Order your free copy of The Ground for Christian Ethics by clicking here. To gain a better understanding of how the Law of God applies in daily life, order a free copy of our book, A Kingdom Catechism, by clicking here.

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Except as indicated, all Scriptures are taken from the New King James Version. © Copyright 1982 by Thomas Nelson, Inc. Used by permission. All rights reserved.

T.M. Moore

T. M. Moore is principal of The Fellowship of Ailbe, a spiritual fellowship in the Celtic Christian tradition. He and his wife, Susie, make their home in the Champlain Valley of Vermont.
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