The economics of the Books of Moses

Moses needed only two building blocks out of the Book of Genesis to build a model for the Israelite economy.

Benedikt Koehler, | updated: 07:11

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When John Locke claimed the world would become a better place if everyone enjoyed the right to “life, liberty, and property” he had no notion that the third leg of that triad, the right to buy property, one day might create a crisis of a special kind. Today, for every homeowner basking in the glow of a property boom, there is a first-time buyer locked out from climbing up the housing ladder. Housing policies either promote economic upsides or cushion social downsides, stuck between a rock and a hard place.

But there have been economic templates where rules for land use were linked with measures for social welfare. One was in the Bible: Moses needed only two building blocks out of the Book of Genesis to build a model for the Israelite economy.

The first building block out of Genesis was that God had created the earth and wanted Israelites to live in the Promised Land. However, Israelites were left in no doubt who owned that land, for God declared: “The land is mine; for ye are strangers and sojourners with me” (Lev. 25: 23). Israelite families that immigrated into Canaan were allocated farms of roughly the same size. So the wealth pyramid was flat. Since Israelite farmers were tenants rather than owners, they were entitled to enjoy the fruits of their labour. But they had no title to the land they farmed. And that meant they had no right to sell out.

The second building block out of Genesis was that the seventh day, the Sabbath, was a day of rest. Moses scaled up Sabbath provisions. In year seven, slaves were to be released and debts cancelled. After seven times seven years, land reverted to original owners (transfers of land might have happened in the interim, for example, if a tenant had defaulted on debt). Taken in the round, the provisions of the Sabbath worked like a reset button to level social inequalities.

These two building blocks of Mosaic economics remained cornerstones of economic order for a very long time. Roman law recognized the right to private land ownership, but when Christianity supplanted paganism it brought with it the Mosaic notion that land could not be bought or sold by individuals. In the Middle Ages and for some time after, land was held in trust by priests or princes – an attitude that prevailed until challenged by John Locke (and others who thought like him).

Although Locke won out over Moses regarding the right to own land, Moses framed other economic terms of reference that have persisted even longer. One was that he banned lending at interest, as did Jesus, who said, “Lend, hoping for nothing again.” (Luke 6:35). And Muhammad too pronounced a ban on lending in the Koran: “Those that live on usury shall rise before God like men whom Satan has demented by his touch” (Koran 2: 275).

Admittedly, Moses was not unique in banning lending at interest, the Greek philosopher Aristotle was in sympathy with that urge. But in the case of Moses, the usury ban was a matter of religious orthodoxy, for Aristotle, a matter of ethical preference. If in the meantime secular societies have quietly set aside Aristotle’s reservations, Islamic societies still comply with the Koranic injunction against usury.

It might be held that Moses’ restrictions to land ownership held back economic development. But if so, then Romans, who allowed private land ownership, should have achieved increasing standards of living. Since such did not happen, the right to own land must be seen as only one in a mix of conditions needed to promote wealth.

In the post-Locke world, utilitarianism has drained ethics out of economics, and Moses no longer features as a point of reference for economists. Locke did not mention him, nor did Adam Smith. But interest in Moses has revived in periods when social reformers looked for social systems that combined economics and ethics in a single system.

One such reformer was the American economist Henry George (1839 – 1897) who gave speeches on Moses – Apostle of Freedom. The economies of our times have endowed the world with a cornucopia of goods, but productive efficiency alone has not muffled disquiet over lack of legitimacy how goods are distributed. The particulars of Mosaic economics may be obsolete, but its methodology – whereby economics is intertwined with ethics – is not out of date.