by Dr. Robert V. Andelson, Auburn, AL
(The following speech was presented by Dr. Robert V.
Andelson at the closing brunch of the Council of Georgist
Organizations conference held in Des Moines, IA, Sept. 24, 2000.
It was followed by commentary by Alanna K. Hartzok, and discussion.
The last nine paragraphs are adapted from Dr. Andelson's editorial
introduction to the third edition of Land-Value Taxation Around the
World (490 + xlii pp., $40 hardcover, $20 paerback.) Among his
other books are Critics of Henry George (1979, out-of-print),
Commons Without Tragedy (1991, 198 + ix pp., $48 hardcover), and,
with Dr. James M. Dawsey of From Wasteland to Promised Land (1992,
145 + xiv pp., $14 paperback). Except for Critics, which is out-
of-print, the books are available at these discounted prices only
through the Robert Schalkenbach Foundation, 1-800-269-2555.
Website: http://www.progress.org/books)
(Dr. Andelson is Professor Emeritus of Philosophy at Auburn
University, Auburn, AL; distinguished research fellow, American
Institute for Economic Research, Great Barrington, MA; president,
International Union for Land-Value Taxation and Free Trade, London,
England; and vice-president, Robert Schalkenbach Foundation, New
York, NY. The opinions expressed in this speech are his own, and
do not necessarily reflect those of any institutions or
organizations with which he is affiliated.)
With your indulgence, I'd like to share some
personal background with you, so that you'll have a better
idea of where I'm coming from on the issue of Third World
debt forgiveness:
Before I was born, my father was a successful
businessman in Madison, Wisconsin, and my mother was head
buyer of women's ready-to-wear at the main department store
in town. Because of circumstances for which he was not
responsible, my father went bankrupt. They moved to Los
Angeles, where my mother's family lived, hoping that my
father could make a fresh start and get back on his feet.
But the Depression was in full swing. Instead of getting
back on his feet, he had a heart attack. Then, while a
passenger, he was seriously injured in an auto accident.
He spent most of those years in the veterans' hospital at
Sawtell, and died when I was barely three years old.
My mother had become the family breadwinner, but
there was no market in L.A. in those Depression years for
people with her experience. She was handy with needle and
thread, so, after having been head buyer with a large staff
under her, she became a seamstress and alteration woman.
Yet, somehow, in these menial, low-paying jobs, by dint of
rigid budgeting, she managed not only to put food on the
table, but to save enough money to enable her, after about
a decade, to purchase a small dress shop on Hollywood
Boulevard in parthership with a cousin, which she then
operated for some twenty-seven years. But (more to the
point, so far as our topic is concerned), by the time I was
in high school, she had paid back every penny my father
owed, even though his debts were not legally collectable,
and his creditors (with whom she had no ties of family or
friendship since they were faceless financial institutions)
had long since written them off. She did this at
tremendous personal sacrifice simply because she believed
in the sanctity of contracts.
Lest you imagine from all this that my mother was
some sort of austere, puritanical drudge, let me hasten to
add that she was an elegant women, noted both for her
impeccable taste and ready wit, who had been raised in
comfortable circumstances and who relished the "finer
things in life," but she believed in putting first things
first. She never preached to me, but taught me by example.
Some of you may have noticed that I have crooked teeth.
That is because money that might otherwise had been spent
on orthodontia went instead to pay my father's debts. My
crooked teeth are not a source of shame to me; they are a
source of pride. Every time I look in the mirror, they
remind me that my father's obligations were discharged.
President Calvin Coolidge has often been ridiculed
for his reaction to the fact that after World War I, every
nation that owed this country war debts, with the sole
exception of Finland, expected that they would simply be
annulled. "They hired the money, didn't they?," he said.
With his rock-ribbed New England conscience, he just
couldn't fathom the mentality of those who would enter into
agreements and then seek to evade them when fulfilling them
became inconvenience. For this, as I have said, he is now
ridiculed! People today can default on their financial
obligations yet continue to lead lives of luxury, with
neither legal penalty nor social stigma. We've lost
something important in this country when promises are taken
lightly and evasion is made easy. The American ethos has
become flabby.
I may be old-fashioned, but I start as Calvin
Coolidge did with the presumption that there is a moral
obligation to repay debts. Forgiving debts may be enjoined
upon the individual since all of us have been forgiven by
our Heavenly Father. But this is something we owe to the
Heavenly Father, not to those who owe the debts to us.
Even then, they should be forgiven judiciously and
responsibly lest habits of dependence and attitudes of
entitlement are engendered. I have personal experience of
having lent money to people who turned out to consider it
an entitlement and who made no attempt to fulfill their
obligations. Had I let them get away with it, I would have
done them no favor.
Governments exist to uphold justice for their
people, not to bestow benevolence upon them or upon other
people. That is because governments have no wealth of
their own to bestow. It is exacted coercively from the
taxpayers. Had the money been loaned by us individually
and voluntarily, I might advocate forgiving Third World
debt on grounds of compassion though not of right, but
it was our tax money that was loaned -- $7 billion directly
and the rest through the World Bank and the International
Monetary Fund. If our tax money is to be given away,
especially abroad, it should be on grounds of justice and
not compassion. Justice does not contenance grounds that
debts should be forgiven simply because those that owe them
are in need. It may be objected that many of these debts,
possible most of them, were contracted by corrupt non-
representative governments. Oftentimes money went into the
pockets of venal leaders or was squandered on armaments and
grandious projects that did nothing to help the people. If
a nation wishes to repudiate obligations entered into by
previous non-representative regimes, as the Soviet Union
did with regard to Tsarist obligations, that is its right
provided that it ceases to avail itself of any advantages
accruing from the borrowed money, and is willing to accept
the status of being an unacceptable credit risk. Yet so
long as the nations in question affirm some sort of organic
unity with their past despite changes in government, even
drastic ones, they must be willing to accept responsibility
for agreements entered into by past regimes.
Careless borrowing is by no means confined to
autocracies. Popular government has a built-in tendency
toward deficit spending. There are a few exceptions that
could be cited, such as Switzerland, but they are
negligible. Politicians seek to secure election or re-
election with lavish subsidies and generous social
programs, but scarcely ever on a pay-as-you-go basis. In
this country, the bill is passed on in the form of
inflation or a debt to be paid by later generations of
taxpayers. But in many other countries the currency is
already nearly worthless, and there is no prospect of
increased productivity by later generations. So natural
resources and other national assets pass into the hands of
foreign creditors.
However much one might sympathize with the
suffering multitudes of the Third World, simply to call for
debt forgiveness for their nations does nothing to correct
(and may actually help to perpetuate) the underlying
structural causes of their poverty.
Nevertheless, there are important instances where I
believe that our national interest would justify the
forgiveness of Third World debt in return for a quid pro
quo. Much as we would like to see justice prevail in other
parts of the world, our government has no constitutional
mandate to interfere in the internal affairs of other
nations. Its proper concern is with our own national
interest, and with the establishment of justice elsewhere
only when our own well-being is at stake. But our own
well-being and the rights of future generations of
Americans are dependent on the preservation of the global
habitat. If, for example, the Amazon rain forest continues
to be destroyed at the present rate, the adverse impact
upon us as well as the rest of the world could be
incalculable. Hence, it seems to me that in such cases a
"debt for nature swap," makes good sense.
But I submit that the appeals for Third World debt
forgiveness by Pope John Paul II, and the Reverends Pat
Robertson and Billy Graham, Archbishop Desmond Tutu, and
all the other spokespersons for the Jubilee 2000 movement,
are misleading. Far be it from me to impute deliberate
dishonesty to these individuals, yet as religious leaders
schooled in Scripture, they, of all persons, should know
that the Biblical Jubilee was but one part of a total
system of taxation and land tenure that also included the
tithe and the initial equal division of the Promised Land
by Joshua among the several tribes and families. This
system may be considered the ancient Hebrew equivalent of
Georgism, designed both to preclude the development of land
monopoly, and to provide a stable and equitable source of
revenue for those who performed public services. Although
scholars disagree as to whether it was even actually
implemented, it was admirably suited to the primitive
agrarian melieu for which it was designed. Debt
forgiveness today may or may not represent responsible
benevolence according to the circumstances, but from a
Biblical perspective it constitutes a structural requirement
of justice only in the context of this total system.
The Jubilee concept of debt forgiveness was set
forth in the 25th chapter of Leviticus. That concept for
debt forgiveness there was based on equity rather than on
mere compassion for the poor, and was integrally related to
a regime of land tenure and public revenue designed to
create and maintain equal access to natural and community-
created opportunity.
The object of the Biblical Jubilee was not to
impede the discharge of legitimate contractual obligations.
it was to assure that illegitimate ones would not arise.
It was to assure that "the land [could] not be sold
forever," thus thwarting the possibility of long-range
monopoly and the permanent division of society into
hereditary "haves" and "have nots." For under its
provisions, no-one could permanently alienate the patrimony
of later generations.
The royal "Clean Slate" proclamations of ancient
Babylonia (described by Michael Hudson in chapter 2,
Privatization in the Ancient Near East and Classical
Antiquity, available from the Robert Schalkenbach
Foundation) have obvious affinities to the Jubilee
provisions in Leviticus; quite possibly, both drew upon a
common, earlier tradition. Each called for the periodic
restoration of land which had been pledged as security and
forfeited for unpaid debt. But the latter was part and
parcel of a coordinated structure designed to secure to
each family and generation within the Hebrew commonwealth
the equal right to the use of the land, of which God was
recognized as the sole absolute owner.
In the Book of Numbers we find a description of how
a census of the Hebrew tribes and families was taken on the
plains of Moab before they entered into the Promised Land.
Every tribe (except for Levi, for which other provision was
made), and, within each tribe, each family, was to receive
its proportionate share, depending on its size. To ensure
fairness, the final apportionment was to be by lot.
As recounted in the eighteenth and nineteenth
chapters of the Book of Joshua, the actual distribution of
land in keeping with these stipulations was concluded at
Shiloh. According to Josephus, the territory was not
divided into shares of equal size, but rather into shares
of equal agricultural value. But Talmudic commentary holds
that value was determined by location (distance from
Jerusalem) as well as by fertility.
I have mentioned that the tribe of Levi did not
share in the equal division of the land. This is because
it was set apart for priestly functions. Since the early
Hebrew polity was theocratic, these functions embraced the
carrying out of what we would consider to be governmental
duties as well as ceremonial ones. To bring the Levites'
ministrations within the reach of all the people, they were
given official residences and surrounding acreage in forty-
eight cities, but that was only a small fraction of what
they would have received had they been born into any other
tribe. The tithe, one tenth of the produce of the land
occupied by the eleven other tribes, was instituted partly
as an indemnity to the Levites for the equal share which
they did not receive in the division, and partly as payment
for their public service. Thus it was, in point of fact, a
land-value tax, and operated as a mechanism for
effectuating the substance of equal rights to land,
alongside of and compatible with unequal physical division
of the land itself.
As modern land reformers have discovered, it is one
thing to devise a one-time apportionment that is fair, and
quite another to keep it that way. That is why the Mosaic
Law established the Jubilee Year. At the end of every
forty-nine years, any alienated lands -- those given away,
sold, or lost from unpaid debts -- would be restored to the
original families. (Temporary possessors were to be
compensated for any unexhausted improvements they had
made.) Thus the value as collateral of landed property
diminished as each Jubilee Year approached, and with it,
the possibility of forfeiture because of loans that could
not be repaid. Hence there was no pecuniary incentive to
make such loans. Concentrated ownership and the partition
of society into landed and landless classes, was thereby
prevented from creeping into the system. The Jubilee
effectively took the profit out of mere landholding as
such, leaving no incentive for speculation.
As I said earlier, some scholars hold that the
Jubilee laws were never fully implemented. If this be so,
it in no way invalidates the statutes' wisdom and justice,
but merely demonstrates the all-too-human foolishness and
arrogance of the nation that had been privileged to receive
them, a judgment recorded in its own sacred writ: "They
have rejected the law of the Lord, and have not kept His
statutes."
It is certainly not my intention to suggest that
the Mosaic plan could be used as an exact blueprint in a
society that has moved past the pastoral or agricultural
stage. But the public appropriation of economic rent,
whether through an annual tax on land values, through a
system of leasehold, through a tax on the abstraction of
resources from nature. or through some combination of
these, can, if sufficiently robust, accomplish the same
objectives for our time.
- - - - - - -
(Editor's note: On November 6, 2000, President Bill
Clinton signed a foreign aid bill that supplies $435 million toward
debts forgiveness of 41 of the world's poorest counties. In doing
so, the United States joins other major industrialized nations in
forgiving these Third World loans. Through a special debt relief
program, the World Bank and International Monetary Fund met a goal
to lift debt service obligations by Dec. 31, 2000 from 22 of the
world's poorest countries, 18 of them in Africa.)