100% Annual Interest Rates in Ancient Mesopotamia

100% Annual Interest Rates in Ancient Mesopotamia

It is certainly interesting to read about the laws and customs of ancient states, especially when comparing them to modern legal systems. For example, in the third millennium BC (five thousand years ago), in Mesopotamia, there was already a problem of usury on a monstrous scale. The specificity was that loans were issued with an absolutely astronomical interest rate (sources mention rates of 20%, 50%, and even more, sometimes reaching 100%).

The process of concluding the deal was quite elaborate, and loan agreements contained a number of terms, guarantees, obligations, deadlines, etc. There was a specific judicial procedure for debt collection, which included the transfer of pledged property and even the sale of the debtor into slavery or bondage.

A huge percentage of people were recognized as insolvent and found themselves in a dependent position. But is it good for society that economic and social actors are erased from the life of the community and society? Of course not.

This is precisely why every ruler, starting from a certain period, enacted "laws of justice" in the first year of their reign. This meant the forgiveness of all debts for all people and their liberation from debt slavery. It became such a common occurrence that it acquired its own ritual, the lighting of fires. One could say that this was one of the first manifestations of rational populism.

But don't worry, after a short period of time, most of those freed from debt were once again enslaved. Perhaps that's why in Sumerian, the common verb for "to sit" and "to owe" was the same.