No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Sixteen: Valuing the Future - Concepts in Capital & Finance 390 RETURN OF ANCESTRAL LAND ON THE JUBILEE Leviticus 25:13-17 13 ‘On this year of jubilee each of you shall return to his own property. 14 If you make a sale, moreover, to your friend or buy from your friend’s hand, you shall not wrong one another. 15 Corresponding to the number of years after the jubilee, you shall buy from your friend; he is to sell to you according to the number of years of crops. 16 In proportion to the extent of the years you shall increase its price, and in proportion to the fewness of the years you shall diminish its price, for it is a number of crops he is selling to you. 17 So you shall not wrong one another, but you shall fear your God; for I am the Lord your God.’ 23 ‘The land, moreover, shall not be sold permanently, for the land is Mine; for you are but aliens and sojourners with Me.’ The concept of “jubilee” is perhaps one of the most contested and ideological of issues within the broader Christian community. Some on the Christian Left suggest that Jubilee requires land redistribution and equalization of income, as well as debt forgiveness. Those on the Christian Right respond that this is simply reading into the text. Verse 15 clearly states the land was never sold; rather, only the produce of the land could be sold. The return of the land was not debt forgiveness but, in effect, the return of leased property per the contract. For a helpful review of this issue, view the “Five Myths about Jubilee. ” In this chapter, we are only concerned with verse 16. The “lease” price of the land was to be determined by the number of years of crops. In economic terms, we would say it was to be determined by a series of cash flows (the yield from the land). Scripture doesn’t give us a specific formula, just that the price was proportional to the number of years. In this chapter we will be able to apply the economics of finance to provide a very precise answer as to how to value capital assets today that will provide a series of benefits in the future.