In 594 BC, a debt crisis was sweeping the city of Athens.
A stele stands on many lands within the city-state, and this stele indicates that five-sixths of the harvest in that area belongs to the creditor, and the peasants themselves can only keep one sixth.
These farmers are called “Liuyi Han”. If the harvest is not enough to pay off the debt, the creditor has the right to sell the “Liu Yi Han” and his wife and children into slavery.
Therefore, a large number of farmers became debt slaves, and public complaints arose at once; the peasants who had nowhere to go led to riots, trying to divide up the land and property of the rich.
The rich think that paying the debt is the responsibility of performing the contract. The debt problem has intensified social conflicts, and Athens is on the verge of fierce conflict and even civil war.
At this time, the new politician Solon, a distinguished politician in the history of Athens, took office. On the first day he served as the chief executive officer of Athens, he issued a “relief order”.
He ordered people to pull out the obligatory monument standing on the mortgaged land; abolish all debts and prohibit borrowing to use personal mortgages; farmers who sell their debts will be released; all land mortgaged due to debts will be returned to the owner .
Debtors are all cheering, but creditors and nobles who are desperately angry move around to attack Solon. Engels said: “In the revolution carried out by Solon, it should be to damage the creditor’s property to protect the debtor’s property.” Solon had to appease the nobility in exchange for interest.
Athens is lucky. Solent, the wise hero, resolved a social crisis.
Solon once wrote a psalm: “People who do evil often get rich, and good people tend to be poor; however, we do not want to exchange our morality with their wealth, because morality always exists, and wealth is changing every day. Master. “
However, for thousands of years, the conflict between the rich and the poor has been entangled with debt and morality. Debt conflicts have caused countless economic crashes, social unrest, political collapses, and even brought killings and wars.
Moses Finley, a famous scholar who studied ancient history, said that all revolutionary movements in ancient times had the same step: “Cancel debt and redistribute land.”
This is a political and interest struggle issue.
The ancients said: “Kill your life to pay for your debts and pay back your debts”, “Repay your debts with penalties, and pay off your debts.
This is a matter of moral and legal balance.
An American proverb says: “If you owe the bank $ 100,000, then your property goes to the silverOK all. If you owe the bank $ 100 million, the bank belongs to you. “
This is a matter of risk and market principles.
In modern times, debt has gradually shifted from excessive moral standards to market targets. Borrowing is defined as a market behavior, not a moral behavior. Debt is to achieve better allocation of resources in time and space by providing liquidity.
The essence of debt is to provide liquidity. Borrowing means that the ownership and risk of capital are transferred from the debtor to the creditor.
So, the moral relationship of debt evolves into a contractual relationship between rights and obligations.
Cognition of debt is the key to modern market awareness. Business means risk, and debt is the core of risk. If the capital is insolvent, is it possible to “debt is not repaid”, that is, debt exemption? If considered according to market principles, debt exemption is part of market behavior.
In this way, the bankruptcy law matching the debt exemption was born.
In 1705, the UK introduced the debt exemption system for the first time.
In 1787, at the end of the US Constitutional Conference, a representative from Rhode Island named Charles Pinkney proposed to join the bankruptcy clause. This proposal was passed almost unanimously and was included in Article 8 of the US Constitution: “Congress has the power to pass a unified law on bankruptcy.”
Madison, the founder of the United States, wrote in the “Federalist Collection” at the time: “The power to formulate a unified bankruptcy law is closely related to commercial norms, which can effectively prevent parties from using their property in different states or taking their property. Fraud committed to a different state. “[1]
Some people believe that the debtor can use the bankruptcy law to engage in “legal fraud”, and the proponents of the bankruptcy law are just the opposite. This law can effectively prevent fraud.
In fact, bankruptcy law, debt exemption, entrepreneurship, limited liability, and risk management are the same market rules. Business means risk, and the limited liability system can maximize the release of risks and stimulate entrepreneurship; debt exemption and bankruptcy laws are necessary conditions for the rise of the modern market and its implementation.
The recognition of debt and the evolution of the bankruptcy law is a history of repeated games of complicated politics, interests, creditor groups and populism.
In 1800, the birth of the first bankruptcy law in the United States was part of a long-term struggle between the Hamiltonians and the Jeffersons on the principles and ideology of the founding of the country, and between the northern business community and the southern farmersThe result of the game of interest.
Throughout the nineteenth century, the US bankruptcy law was set up three times, and it was reduced to a “night pot” to save the economic crisis and a tool for obtaining political votes. The financial panic of 1797 gave birth to the bankruptcy law of 1800; the famous panic of 1837 gave birth to the bankruptcy law of 1841; the panic of 1857 gave birth to the bankruptcy law of 1867.
Every time there is a panic, American society can basically reach a consensus: the businessman chased by the debt is unable to make a comeback, and the new businessman is afraid to risk and involuntarily expand production to save the crisis. However, every time after the crisis, speculators would use the bankruptcy law to gain profits. The southern forces worried that their land and property would be legally taken away by the speculators, and they tried to kick the “night pot” back to the bed.
The economic panic of 1893 gave birth to the bankruptcy law of 1898. The legislative history of this law can be called “a history of Odyssey that has been frustrated and nearly died for 18 years.” However, this decree skillfully balanced the relationship between creditors and debtors and became a stable bankruptcy law. Since then, the United States has established a modern bankruptcy law.
Since then, bankruptcy laws have tended to improve in the game between state interventionism and liberalism. In the 60s and 70s of the last century, American consumerism prevailed, investment banks rose, and large-scale consumer credit and housing loans triggered a massive wave of personal defaults. In the era of asset bubbles and debt inflation, the bankruptcy law encountered new challenges and also shouldered new missions and responsibilities.
Now, the global debt tide is rising, the housing bubble is expanding, the company ’s debt ratio is high, the number of housing companies ’bankruptcies is increasing, and some companies are in a bankruptcy dilemma. Investment fund redemption crisis, housing loan and consumer credit problems have emerged. Many entrepreneurs, public figures, wealthy second generation and mortgage lenders have joined the list of dishonest enforcers, and even a small number of college students have fallen into “naked loans.” Lao Luo promised to “sell the arts” to pay off debts. Lao Jia, who is making cars in the US, is applying for personal bankruptcy.
Mr. Cao Dewang, founder of Fuyao Glass Group, urged not to use “old lai” to describe bankrupt entrepreneurs, because entrepreneurs ’businesses are risk businesses, and they should be encouraged to continue their struggle. He also repeatedly called for legislation to allow private companies to go bankrupt. Now many shadow banks are recovering debts. If companies are not allowed to go bankrupt, the consequences will be unimaginable and cause social problems.
David A. Skir, a famous American jurist, in the “World of Debt” endowed the “spirit of the times” to debt and bankruptcy:
“American bankruptcy law is unique in the world. Compared with other countries, its biggest feature may be that American individuals and companies do not seem to regard bankruptcy as the last resort, so they have not at all costs. Avoid bankruptcy. No one wants to be bankrupt.p>
[4] Debt: The first 5000 years, David Greber, CITIC Press.