When is a Loan Not a Loan?

By Dr. Yeshaya Gruber

February 13, 2019

11K 53

About 2,000 years ago, a young rabbi walked around the fertile Galilee in the north of Israel, offering his takes on morality and human life. He reportedly had some odd thoughts about personal finances: “If you lend to people from whom you expect to receive, is that any kindness/grace (Greek χάρις; charis) of yours? ...But do what is morally right, and lend without expectation of return” (Lk 6:34-35). Not exactly “sound financial advice”! And why would it be “morally right” (Greek ἀγαθός; agathos) – as opposed to just foolish – to lend money and not expect it to be paid back? So, when is a Loan Not a Loan?

Like most sayings of first-century Jewish teachers, these mad-sounding ideas can be traced back directly to the ancient Hebrew Torah. The arrangements described there were markedly different from today’s economic system. The main feature of the global financial system today is “credit” (i.e., debt). At the moment, for example, the United States government owes about 22 trillion dollars. Private citizens and businesses in the U.S. owe another 30 trillion or so. The government of Japan owes around 10 trillion dollars. Public and private debt in China is estimated – some say underestimated – at 34 trillion dollars. All this debt creates vast economic activity, huge profits for some lenders, and also massive dangers.

By contrast, the ancient Torah prescribed a locally oriented system that could never be based on cycles of debt. For a start, it was forbidden to charge a citizen interest (Exod 22:24/25; Lev 25:35-38; Deut 23:19-20/20-21). Moreover, every seven years all debts of citizens had to be cancelled (Deut 15:1-3)! This meant that lending money would usually bring financial loss, not profit. But what if someone truly needed to borrow money due to difficult circumstances? The Torah’s solution did not involve banks or other corporations. Rather, it relied on the willing assistance of individuals, given freely and directly to their “brothers.” Members of Israel were expected to “open their hands” and loan as much as genuinely needed to people in their own local communities who had fallen on hard times -- even if it was right before the date when all debts would be cancelled (Deut 15:7-9).

A “loan” in this sense was very much like a gift, with no expectation of return. Creditors received no interest and might easily lose the entire principal as well. Yet to refuse to give such a “loan” was called “sin” (Hebrew חטא; chet’); even to be unhappy about “lending” in this way was regarded as “base” (Hebrew בליעל; beliya‘al, literally “destructive of benefit”). The Galilean rabbi was obviously reminding his listeners of this commandment. His statement continued by mentioning favor from God for those who gladly helped their fellows in this way (Lk 6:35) – in precise parallel with the text of Torah, which had specified divine blessing as the reward (Deut 15:10).