Hope of Israel Ministries (Ecclesia of YEHOVAH):

The Divine Economy

"Leviticus chapter 25 is a passage that makes Das Kapital look tame...it is no longer Morris, Keynes and Beveridge who inspire and change the world -- it's Leviticus." (Will Hutton)1

by Dr. Paul Mills


Thanks to the Jubilee 2000 campaign for international debt relief, the ancient land laws of the Bible have joined the vocabulary of international finance. The Jubilee concepts of a periodic cancellation of debt, release of debt slaves and return of family property have become a powerful symbol for the advocates of debt forgiveness.

The State We're In

Western societies have accepted a compromise between relatively free trade and markets on the one hand and a sizeable role for the state in the form of redistributive welfare and regulation on the other. Essentially, we need to retain the disciplines and efficiencies of a market system but devise another mechanism that promotes fairness in the allocation of wealth and opportunities that does not require a burdensome tax and welfare system.

Why look to biblical law for economic answers? Could the biblical model offer such a viable alternative? The possibility has usually been dismissed on the supposed grounds that: the economic provisions of biblical law were designed to apply only to ancient Israel but not to later societies; technological changes make such teachings irrelevant; or that the law has been superseded by the coming of the Messiah. A fuller discussion of the case for using biblical law as a social "paradigm" or model for contemporary application has been given elsewhere.2 Suffice it to say, biblical law was devised on the basis of `the hardness of men's hearts,3 the principles that should govern economic organization (the ownership of capital, work incentives, finance, the monetary system, taxes and welfare) are not technology-specific; and the relevance of biblical law was, if anything, re-affirmed by the Messiah.4

The disobedience of Old Testament Israel meant that the law's economic institutions were rarely, if ever, implemented in full. Indeed, it is striking that Israel's punishment through exile in Babylon is attributed specifically to the nonobservance of the Sabbath year of rest for the land and, by implication, the Jubilee.5 The law itself claims that economic prosperity will result from obedience. Indeed, Deuteronomy 28 even promises a "trade surplus" if the law is adhered to. These promises are made because the economic sense of the model is assumed.

Apart from the ceremonial food laws and the observance of the Sabbath, the only constraints on trade in biblical law were the exhortations to merchants to maintain fair weights and eschew adulteration.6 This recognized the need for a basic degree of confidence by consumers in what they were buying. However, there were no other constraints on trade and no notion that trading for profit was inherently "wrong" (although profit from an artificial monopoly was condemned). There is also ample evidence that Israel participated in the international trading networks of the time.7

A Capped and Proportional Rate of Income Tax

Tithes of 10 per cent on income were directed to local poverty relief, the support of the local priests and Levites, or to religious celebrations (although the number of tithes in any one year remains uncertain).8 The limited role of the state apparatus also reduced the potential for arbitrary confiscation -- an all too familiar feature of monarchies at the time (I Samuel 8). Hence, there were few external disincentives to work or save.

A Stable Monetary System and Price Level

The evidence suggests that precious metals, first in the form of set weights of silver or gold and then coins, were used to increase trade by replacing barter throughout biblical times. This ensured a rough stability of the price level in Israel over hundreds of years,9 once again encouraging saving and trade by providing a stable store of value.

A Limited Role for the State

The intended structure of Israelite society did not include a privileged class to be supported through the labor of others. Nor did it envisage a princely "court" or aristocracy. Even when a king was eventually appointed, the law sought to limit the size of the royal household and its wealth (Deuteronomy 17).

Land Transfer

A leasehold market was envisaged in the law, so families in dire economic straits had access to the market value of their assets until the next Jubilee year (once every 50 years). This also allowed the temporary transfer of land to those best able to use it. However, a freehold market in agricultural land was prohibited.10 No family could sell its land in perpetuity. At the time of the next Jubilee, ownership and occupation had to revert to the traditional family owners, regardless of who had leased the land in the intervening period.

Restrictions On the Labor Market

The requirement for employers to pay wages punctually11 and to be responsible for their workers' safety shows the detail of the thinking behind the law in the protection of the waged laborer. Sabbath restrictions on work also underlined the importance of placing relationships to YEHOVAH God and family ahead of material provision and reduced the pressures on vulnerable workers.

The Prohibition of Interest

As well as detailing sophisticated leasehold arrangements, biblical law described a rental contract and careful rules for the treatment of different forms of security for a loan, including bonded servitude in the case of default. It also envisaged a vital role for interest-free lending between family and community members as a means of poverty relief. Yet the model expressly prohibited all loans at interest, for both commercial and consumption purposes, at least within the Israelite community.12 As a result, there was no place for a commercial loan market -- a conclusion reinforced by the laws which prescribed the cancellation of all debts (and debt servitude) every seven years.

Although the text is not explicit as to why interest is prohibited, the problems associated with a debt-based financial system are numerous and we are only now fully appreciating their extent. Low income country debt is but one aspect.13 In the context of the wider economic model, perhaps the most important implications of the prohibition of interest were that it encouraged both non-interest charitable lending and risk-sharing business finance (so distributing the profits or losses from commercial ventures more widely). Financial power could not be accumulated without sharing in the risks of enterprise, while no-one could be permanently enslaved in debt without prospect of release.

Hence the biblical model had a strong underlying current of concern for the poor. Yet its approach to the distribution of wealth and income was radically different from the familiar approach of redistributive taxes and welfare benefits. Instead, the biblical model did not concern itself with differences in portable wealth or consumption. Indeed, the acquisition of wealth was often seen as a blessing from YEHOVAH God and provided incentives to work hard.

A National Investment Fund

Instead of a share in agricultural land, a national investment fund could be established, an equal share of which would be bestowed upon every citizen when reaching voting age and relinquished at death. A non-political board of trustees would oversee investment policy and a profit-related dividend would be paid each year linked to the returns enjoyed by the investments in the fund. If the fund was large enough, this dividend could provide a basic minimum income. Citizens could borrow against their dividends for, say, ten or twenty years (to finance education, training, house purchase or a business start-up). Crucially, however, citizens would not be able permanently to sell their shares to any third party. It is this Jubilee principle that distinguishes the idea from other suggestions for a universal capital endowment.14 At some time in the not-too-distant future, everyone would receive back title to their share in the fund.

A Rediscovery of Rootedness

The Jubilee was structured to preserve the universal ownership of property and to return an extended family to its ancestral lands at least once every 50 years. This not only recognized the contribution of widespread property ownership to economic freedom, but it underlined the importance of rootedness and a sense of place. It is only through the physical and prolonged proximity of extended family members and neighbors that society can deliver care of dependants without ever greater reliance on the state or on purchased "care".15

Low Income Country Development Finance

One of the ironies of the biblical economic model is that it does not unambiguously support the Jubilee 2000 campaign for international debt relief. Of course, on the one hand, biblical law prohibits interest on all loans within the Israelite community and protects the poor through periodic debt relief. On the other, however, it upholds the moral and legal duty of debtors to fulfill their obligations. Ironically, it did not apply the prohibition of interest or the cancellation of debt to loans made to foreigners. Hence, biblical law cannot be used to support the view that international debt relief is a matter of "justice" per se. If relief is to be given, it is to be an act of chesed or mercy.

Space precludes examination of further implications for economic policy from the biblical model. Some have been outlined in earlier papers16 but others could include the design of the tax and welfare systems, the encouragement of home ownership for those on low incomes, or the protection of leisure from the pressures of 24-hour/7-days-a-week working.


The economic model set out in biblical law transcends the persistent debate about whether efficiency or equality ought to be pre-eminent in economic policymaking. By adapting property rights and factor markets, biblical law seeks to maintain universal access to the means of production and a rough equality in their distribution, without introducing state intervention or interfering with economic incentives. As such it represents a radical "Third Way" that is genuinely different from capitalism and socialism.


1. "The Jubilee line that works." The Observer, 3 October 1999.

2. See especially Wright, C. J. H., Living as the People of God, IVP,1983; and Schluter, M., and Clements, R., "Jubilee Institutional Norms". Evangelical Quarterly, Vol. 62, No. l. 1990.

3. E.g. Deuteronomy 15:9; Matthew 19:8.

4. E.g. Matthew 5:17-20. The Messiah also reaffirmed that man lives "on every word that comes from the mouth of God' (Deuteronomy 8:3; Luke 4:4).

5. II Chronicles 36:21. The Prophets foretell judgment on Israel because the economic institutions of the law were not upheld (e.g. I Kings 21:19; Jeremiah 25:8-11; 34:17: Ezekiel 22:7,12; Amos 2:6-8).

6. E.g. Leviticus 19:35-36; Deuteronomy 25:15-16.

7. E.g. Deuteronomy 28:12; I Kings 10:14.

8. Leviticus 27:30; Deuteronomy 14:28.

9. See Essay entitled Should Christians Support the Euro?, Paul Mills and Michael Schluter (Volume 7, No 4, Dec 98).

10. Leviticus 25:8-54; a careful distinction is made between agricultural land, urban property (verses 29-31) and the holdings of the Levites (verses 32-34).

11. E.g. Deuteronomy 24:15.

12. Deuteronomy 23:19.20: cf. Psalm 15:5: Ezekiel 18:13. Although contemporary legal codes (e.g. Babylon) limit rates of interest, the Pentateuch is again unique in prohibiting interest outright. The teachings of the Messiah presuppose and, if anything, reinforce the prohibition of interest (Luke 6:32 -35; 19:22, 23).

13. See essay entitled The Ban on Interest: Dead Letter or Radical Solution? Paul Mills. (Volume 2, No 1, Mar 93) The continuing difficulties of the Japanese economy bear chilling testimony to the damage that can be wrought by a debt-based financial system.

14. E.g. How to achieve a stake in the country for all. Samuel Brittan, Financial Times, 16 March 2000. p.19. Brittan envisages a one-off grant on reaching the age of 18.

15. See essay entitled Roots: Biblical Norm or Anachronism?, Michael Schluter, (Volume 4, No 4, Dec 95)

16. E.g. see essays entitled The Ban on Interest: Dead Letter or Radical Solution?, Paul Mills. (Volume 2, No 1, Mar 93), Roots: Biblical Norm or Anachronism?, Michael Schluter, (Volume 4, No 4, Dec 95), Should Christians Support the Euro?, Paul Mills and Michael Schluter (Volume 7, No 4, Dec 98) and Risk, Reward and Responsibility, Michael Schluter (Volume 9, No 2, June 00)


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