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Bankruptcy, bankrupture, debt slaves, debt death and other interesting things

Do you know where the word bankruptcy came from? Do you know ‘ancient’ bankrupts were ordered into slavery and some were killed?

The news today about Channel 10 going into administration got me thinking about how earlier societies dealt with solvency problems in business and commerce. Yes, I’m a real nerd when it comes to the origin of words and the history of ‘legal solutions’.

TB LL mosaic

The term bankruptcy​ comes from the Italian ‘banca rotta’ – to describe (often literally) breaking/cracking/rupturing the actual desk/working station of old money lenders in old ‘Italian’ states or republics (before the creation of modern Italy). This ‘breaking’ symbolically and dramatically showed the moneylender could no longer operate.

As a former lawyer, especially as a law student, I was fascinated how different societies came up with what they thought were ‘just and fair ways’ to deal with problems and to protect and punish.

From my understanding, the Romans first formulated many legal principles that went to influence the British justice system.

Before the Romans, The Greeks has their own rules – and before the Greeks, other ‘ancient’ societies developed their own laws and forms of punishment.

It’s interesting how the Greeks dealt with people who were not able to pay their debts.

If someone couldn’t pay, the debtor (usually a’HE’ back then) his family and his servants and slaves were forced into ‘debt slavery’ – put to work until their physical labor paid off the debt to the creditor. Many Greek states limited debt slavery to 5 years.

If you think that was harsh, in the Asian system under Ghengis Khan – falling into bankruptcy 3 times was punishable by death.

As I mentioned, I’m a real nerd for these sort of historical oddities. They could be good to drop into BBQ or pub conversation if you are discussing Channel 10 going into administration.


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This entry was posted on June 14, 2017 by in Uncategorized and tagged , , , .
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