Renz's Thesis No. 1 - “Commercial loans were known in antiquity.”

At a glance, this may seem quite an odd thesis to put forth as the first among 12 theses on the subject of usury, but in context of Thomas’s overall objective, it is a critical point of departure.

For his assertion, Thomas relies in part upon the book, Economic Structures of the Ancient Near East, by Morris Silver. However, the part of Silver’s book that is cited is presented as intending to overturn a long-accepted view, typified in Karl Polanyi. That is to say, Silver’s work is self-consciously controversial in that it acknowledges what Modern scholarship has been prone to accept concerning the economic realities of the Ancient world, and expressly challenges it. Silver is quite open about challenging the accepted view as an economist, not a historian. One of the very first things Silver says in his preface is to admit that, “…I am not now and never have been an antiquarian.”

M. I. Finley was Cambridge professor of Ancient History. The second edition of his book, The Ancient Economy, was published in 1985 [Berkeley:University of California Press], the same year as the copyright of Silver’s book. Finley endorsed the findings of Polanyi. His thesis pertains mainly to the Ancient Greco-Roman economies, and he explains quite extensively in his introduction why his analysis extends no earlier - into realms treated by Silver: “The Near Eastern economies were dominated by large palace- or temple-complexes, who owned the greater part of the arable, virtually monopolized anything that can be called ‘industrial production’ as well as foreign trade (which includes inter-city trade, not merely trade with foreign parts), and organized the economic, military, political and religious life of the society through a single complicated, bureaucratic, record-keeping operation for which the word ‘rationing’, taken very broadly, is as good a one-word description as I can think of.” [p. 28]

Finley sees nothing prior to Greek civilization that even remotely approximates what we know in our day as commercial activity. Clearly, the difference between Polanyi / Finley and Silver is a difference of interpretation, not one of fact. Silver does not contend that there are facts that Polanyi failed to consider, or only lately were uncovered. He rather objects to Polanyi’s interpretations.

As an exercise in interpretation, we may turn to Thomas’s appeal to an Ancient text known as The Edict of Ammisaduqa, from the 17th Century BC. Thomas claims this text documents the practice of commercial lending. But he has misunderstood the Edict. The general purpose and thrust of the Edict was to proclaim remission of debts. Thomas declares that it, “…excludes goods which have been loaned ‘either as merchandise for a commercial journey, or as a joint enterprise for the production of profit.’” The pertinent paragraph of the Edict reads (as annotated): “An Akkadian or an Amorite who has received barley, silver or (other) goods either as merchandise for a commercial journey, or as a joint enterprise for the production of profit, (5) his document is not voided (by the misharum act); he must repay in accordance with the stipulations of his agreements.” [Pritchard, ed., The Ancient Near East: An Anthology of Texts and Pictures, (Princeton: Princeton University Press, 1975) Vol. II, p. 38] Also, Thomas claims that the Edict “…even includes a paragraph which specifies what happens to people who pretend that a loan was a commercial loan, when it was not.” The section to which he refers runs thus: “If anyone had given barley or silver as an interest-bearing loan and had a document executed, (ii 30) retaining the document in his own possession, and then stated: ‘I have certainly not given it to you as an interest-bearing loan or on the melqetum basis; the barley or sliver which I have given you, I have given (as an advance) for purchases, or for the production of profit, or for some other objective,’ the person who had received the barley or silver from the creditor shall produce his witnesses to the wording of the document which the lender had denied, and they shall speak (their testimony) before god.” [ibid]

The purpose of the Edict was to provide general relief from widespread and oppressive debt arising from loan by canceling all such debt across the board. It was not meant to cancel business contracts, and the clauses cited were included in order to prevent someone from evading business obligations by way of claiming that what he owed was a debt arising from a loan and therefore cancelled. The business agreements in view were “joint enterprise,” or “an advance for purchases,” or a deposit of consignment, or some such arrangement - not a loan. The second section cited addresses a case of a lender who attempts to construe the loan he extended as some kind of business agreement, so he can circumvent the Edict and persist in collecting.

As Thomas points out, cancellation of loans across the board via such Edicts was not unusual in the Ancient world. The reason for this is because failure to repay loans was met with severe penalties, such as slavery, and even death. If sufficiently large blocs of a population became hopelessly indebted, there was very little for such ones to lose in launching a debtors uprising. Cancellation of debts was a means of stabilizing a population. In such a world, becoming indebted was a desperate measure resorted to by men who were in desperate circumstances. It was not a common method of funding a commercial venture. One must consider also that virtually all commercial activity was conducted by those in political power, or their agents. A tiny minority of any Ancient population approximated what we might think of as free or middle-class, who might have the wherewithal or opportunity to launch into some kind of business. Even such cases were regulated by those holding power, and required their protection if the activity ranged over any significant distance, as transportation was exceedingly difficult and dangerous. It made very little sense for anyone to take on loans as a means of supplying a business venture in such a world.

Thomas adjures us: “A fundamental hermeneutical principle to remember in this discussion is this: repeating the same words in a different context is not saying the same thing.” [Boldface in the original.] Finley enunciates a similar exhortation: “If I have taken so long over this introduction, with perhaps an excess of lexicography [he points out, for example, that it is impossible to translate the word freedom or free man into any Ancient Near Eastern language], that is because there is a fundamental question of method. The economic language and concepts we are familiar with, even the laymen among us, the ‘principles’, whether they are Alfred Marshall’s or Paul Samuelson’s, the models we employ, tend to draw us into a false account.” [p. 23]

Our concepts of commercial lending and borrowing have no correspondence to any Ancient socio-political reality. Reading our ideas back into Ancient texts only leads to misinterpretations. Thomas relies on misinterpretations of Ancient texts and upon Silver’s interpretations, which by no means reflects any scholarly consensus. The Finley / Polanyi view is alive and well. Thomas’s first thesis thus is not well taken.