Economics 101: Unsecured Loans – The Law of God and Public Policy

Economics 101: Unsecured Loans
The Law of God and Public Policy

“If ever you take your neighbor’s cloak in pledge, you shall return it to him before the sun goes down, for that is his only covering, and it is his cloak for his body; in what else shall he sleep? And if he cries to me, I will hear, for I am compassionate.” Exodus 22:26, 27

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 borrowing more than was absolutely necessary.

Public policy that encourages or enables incurring debt beyond one’s net worth, or that jeopardizes one’s ability to provide for his well-being, should not be supported. Nor should it be practiced by government at any level. 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 particular aspect of economic practice.

Visit our website, www.ailbe.org, and sign up to receive our thrice-weekly devotional, Crosfigell, featuring writers from the period of the Celtic Revival and T. M.’s reflections on Scripture and the Celtic Christian tradition. Does the Law of God still apply today? Order a copy of T. M.’s book, The Ground for Christian Ethics, and study the question for yourself.

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In the Gates is a devotional series on the Law of God by Rev. T. M. Moore, editor of the Worldview Church. He serves as dean of the Centurions Program of the Wilberforce Forum and principal of The Fellowship of Ailbe, a spiritual fellowship in the Celtic Christian tradition. He is the author or editor of twenty books, and has contributed chapters to four others. His essays, reviews, articles, papers, and poetry have appeared in dozens of national and international journals, and on a wide range of websites. His most recent books are The Ailbe Psalter and The Ground for Christian Ethics (Waxed Tablet).

Scripture quotations in this article are from The Holy Bible, English Standard Version, (c) copyright 2001, 2007 by Crossway Bibles, a division of Good News Publishers. Used by permission. All rights reserved.