Issue

11th Issue (March, 2009)

Buddhist Explanations of the Fundamental Factors of ‘Debt’ (Iṇa)

Rev. Upali
University of Peradeniya
revupalisramon@gmail.com

Introduction

The immediate factor related to poverty is debt or loan. In fact, taking loans is so inextricable in life that most people, (not necessarily be extremely poor), in a way or other take loans for various purposes, some even having no other option of earning wealth. The Pāli term for ‘loan/debt’ is ‘iṇa’. The Buddha speaks about nature of debts in various discourses while exclusively treating this subject in ‘iṇasutta’ (the discourse on debt) of Aṅguttarnikāya.[1] Here the Buddha says that poverty is no blessing for humankind, worse even is taking loans and being unable to repay. However, there is a way out of poverty, but, if only we exercise that in practical life. In this essay, while remarking on some general fundamental factors related to debts, I encapsulate the Buddhist explanation to why and how a person falls into debt, and the recommended principles to be exercised to be free from debts.  

Fundamental Factors of ‘Debt’

Discussion on debt can be considered mainly in two levels

1. individual/private level - a poor person or someone in financial crisis getting into debt, and
2. national/international level – a nation getting into debt to another nation/s.

In the individual level a person, specially in villages, may take loans from a rich neighbour or friend. Therefore, the dealings – concerning interest, time to be repaid, and what will happen if the loan is not paid off in the due period - are privately set by individuals involved. If the deal is a big one, for example, in the case of starting up a business or building up a house, then people take loans from banks where the system is more formal and based on some written rules and regulations. In the national level, the rules are even more formal and exchanges are concerned with national wealth also. Yet, there is another classification that concerns 

1. natural debt – where the debtor is responsible for the background causes, and 
2. forced debt – a person or country prepares (sometimes even by violent means) the background conditions for another person or country to take loan for some political or some devious gains.  This feudal social phenomenon has its function even in democratic countries today, perhaps in the most disparaging manner. [2]

 In the first there is no one else to be blamed other than the person in debts, but, the second where violent means are employed cannot be approved anyway.
In individual level or national level fundamental factors are the same. They are – self created or forced conditions, interests for the debt, and consequences where a person/nation in debt has to suffer for being unable to pay off the loan in due time.

Buddhist Explanations

Of the two main levels of debts, as there was no banking system like today during the Buddha’s time, the Buddha talks about the first – i.e. individual level. However the term the Buddha uses, in iṇasutta, – kāmabhogino (for/to worldly persons) – bears a tone of the subject being ‘generalized’ and thus has a wider application. In fact, according to Buddhism, individual and society are relative to each other; in that sense what is true to individual is true even for a nation because individuals are the constituents of society. Therefore, the principles to be followed to build a nation are actually the  same as principles that an individual should exercise.

The discourse on debt (or iṇasutta) is in question and answer form, the Buddha questioning on all the factors related to a poor person who takes loans and what follows if he is unable to pay off the loans; and the monks replying every question in the affirmative. Then the Buddha generalizes the fact in a statement and captures the psychological factors of the person in debt. Thus, the Buddha says only a person who is poor, one who is destitute, one dispossessed of basic needs[3] takes loans for survival and falls into the woeful situation of debts. Although he has nothing he promises to give interests (vaḍḍhiṃ paṭissunāti) being unable to pay off the loans on due time. This only burdens his loans that he is still unable to pay. Then he is accused, haunted, and pressed persistently wherever he goes – even among gatherings and community discussions - by the money-lender. Then the money-lender takes action against him. The debtor wants to hide away but fails, and then he loses control of his mind and does various things none of which helps him to be free from the accusation of debt, instead leading him to further moral and physical deterioration.

A person falls into such exasperating situations due to his improper and reckless thinking, speech, and actions. Although he aspires and tries to conceal his shameful act he is not able to do so. Because, he is devoid of trust/confidence, shame, fear, exertion, and wisdom in what is good[4] . The Buddha says that even if such a person enters the Buddha’s dispensation, without developing these factors he will have no success but to deceive himself. Therefore, it is recommended that he should have shame at least not to go to others’ doors for financial help when he has all the capabilities to earn; he should have fear of being indebted with the burden of loans and interest; most importantly he should use his physical strength and exertion, skills and wisdom to earn his living by rightful means. Even if such a person has to take loans that is not a problem for him because he can repay them.

The fact that taking loans is not always a curse and can be used for prosperity has been emphasized in various instances. In the Sāmaññaphala sutta of the Dīghanikāya, the Buddha advises king Ajātasattu on the best uses of loans as follows – suppose, great king, a person takes loans and uses in business. That loan, in turn helps him  prosper. With his gains he removes off all his former debts completely, with the remaining he supports his wife and children. Reflecting thus about his success, he is not only delighted but also receives great mental bliss. Such a person, the Buddha says, is truly happy in worldly life. Elsewhere, the Buddha emphasized being free from loans is one of the greatest happiness for a worldly person.

The Buddha speaking of ‘generosity’ (dāna), to be exercised by the rich and wealthy people (in fact every person), in various enumerations of moral principles invigorates the fact that the rich bankers or creditors have some social obligations to execute. Hence, the poor who has creative and progressive tendencies should be assisted by giving loans; not to press them for unbearable interest but for establishing in business activities.[5]  

Conclusion

The above discussion reflects two types of individuals: one who is reckless has to suffer from loans, making his survival extremely difficult and social life an disharmonious one; and the other one who directs his thoughts, speech, and mind properly succeeding in worldly activities. The central responsibility is however upon every individual/nation. The five factors an individual or a country must possess are – trust, shame, fear, exertion, and wisdom, to be ever free from debts and enjoy worldly as well as spiritual bliss.

References

1. Aṅguttaranikāya – III, (tr.) Hare, E. M., London: PTS, 1952.
2. The Discourse on the Fruits of Recluseship (the sāmaññaphalasutta and its commentaries), (tr.) Bodhi, Bhikkhu., Kandy: BPS, 1989.
3. Thera, Prof. Dhammavihari, “Poverty, Hunger, and Under-Development [A little bit of relevant Buddhist thinking]”, in – Dharma Man Religion Society Governance in Buddhism, Dehiwala: Buddhist Cultural Centre, 2006.