Ancient Mesopotamian rulers, including Hammurabi, faced a problem that still haunts modern economies: debt growing faster than people's ability to repay. When this happened, the entire economic system started to crack. Their solution was radical — complete debt cancellation. Amanda H Podany, professor emeritus at California State Polytechnic University, Pomona and NYU research affiliate, explains these debt jubilees on FT's The Story of Money podcast.

These ancient debt cancellations were political necessities, not charity. When peasants couldn't repay loans — often to wealthy landowners or temples — they defaulted and lost their land. The economic consequence was severe: aristocratic wealth consolidated while the tax base evaporated. Debt jubilees effectively reset the system before it collapsed entirely.

Podany argues these practices reveal something fundamental about debt's role in economies. Modern societies still grapple with this tension between creditor rights and systemic stability. The question ancient Mesopotamians faced — how much debt is too much — remains unanswered today.