Continuing on our journey of debt relief history, we’ll move on next to two of the most famous ancient civilizations: Greece and Rome. (Fun fact: The author of this blog actually has a degree in ancient history and archaeology).
Ancient Greece’s history with debt relief is quite similar to that of the Mesopotamia area, as discussed during the last blog. Initially, the rules for failure to pay a debt were quite harsh. According to the Constitution of the Athenians, the punishments for failure to repay a debt were harsh compared to our modern options. If an Athenian debtor defaulted on their debt obligations, the debtor would be forced to surrender their land to them, and become a hektemoroi, or serf, who would then continue to cultivate their own land and turn over one sixth of the yields to the creditors. If the debt was worth more than the assets, then the debtor’s family would also become slaves of the creditor.
Due to the worsening debt crisis of Athenian society, Solon of Athens enacted the Seisachtheia reforms circa the sixth century B.C.E. which immediately cancelled all debts, returned seized property, retroactively freed enslaved debtors, and banned the practice of debt enslavement. The impact of this reform could fill its own book, but in short, this reform helped shake up a stagnated financial system and the laid the ground work for Athens’ famous democratic government. But Athens was not the only city-state in Greece. Sparta, a well know military power, also enacted debt cancellations about three centuries later.
In comparison, the Roman Empire never technically enacted a full debt forgiveness scheme like that of Athens. But why? By looking through Roman texts, it’s clear that Roman citizens did have debts. Tacitus, a Roman historian, wrote that interest rates were an “ingrained evil” in Rome and was a common cause of strife and discord in the Roman population. Yet, any debt reforms such as the banning of serfdom or the capping of usury rates, never lasted very long. Generally, there were a few different governmental reactions to debt relief over Rome’s long history: Outright refusal of debt adjustment, making payments more feasible without freeing up the secured assets (such as reduced interest rates), handing over debtor’s assets to creditors, and partial forgiveness.
But why should you care about what people who were wearing togas and chitons were doing? Your financial problems are now! Although, this blog is a very shallow dive into the ancient history of debt relief, it’s clear that debt relief has been around for longer than one might think and people have always needed help. Debt relief is an ancient concept and no matter how you might feel, you are not alone in your financial worries.
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