The Talmud and Greek Debt

by Mario I. Blejer

Project Syndicate
July 19, 2011

There are two ways to look at Greece’s majestically unsustainable sovereign-debt mountain. There is, first, a pragmatic and short-term perspective, which focuses on ensuring some form of orderly restructuring (possibly for other vulnerable European states as well) without bringing down the eurozone. And there is a “moral” perspective, which focuses on the nature of debt and on the long-term economic consequences of failing to honor it.

Neither perspective is wrong; on the contrary, the problem is how to reconcile them. Indeed, failure to do so appears to explain why the official response to the Greek debt crisis has been so inadequate.

In these circumstances, the Talmud, the ancient repository of Jewish legal commentary – and one of the oldest sources of human thought on morality and economic activity – might hold the key. An oft-quoted passage provides a fresh, if not exactly new, perspective on Greece’s debt and the best way to address it.

More