"William Shakespeare’s play, 'The Merchant of Venice,' dramatizes the inherent tension between creditor and debtor, and illustrates the evolution of the concepts of credit and debt. In the play, the judge, Portia, unexpectedly declares the forfeiture, in favor of the State of Venice, of all the lands and goods, not of the debtor, but of the creditor, Shylock.
In ancient times, that would have been unthinkable. Under Greek law, non-payment of a debt was categorized as a capital crime similar to murder. Under Roman law, a creditor was allowed to seize the debtor and sell or kill him in foreclosure, since a sum of money owed was equated with human life. And under Judaic law, a creditor was allowed to take the children of the debtor for nonpayment of a debt.
Juxtapose the harshness of these legal concepts with the constitutional mandate that
No person shall be imprisoned for debt…
and it becomes clear that centuries of social, cultural, and political change have dramatically altered the concepts of credit and debt.
But the historical tension between creditor and debtor, dramatized in 'The Merchant of Venice,' has obviously not disappeared. In lieu of human life - the allegorical pound of flesh - merchants had to devise a rational, and kinder, system of ensuring the payment of debt. Hence the concept of security, a transaction by which a creditor mitigates the risk of non-payment of debt by equating a sum of money owed with property or another person’s undertaking to pay.
It is intuitive that Shakespeare titled his play after Antonio, the merchant, because it was the rise of the merchant class, of mercantilism, of trade and commerce , which greatly influenced this evolution. Without credit, and without a rational system of dealing with non-payment of debt, trade and commerce would not have flourished to the levels that were seen in the 14th to the 19th century.
By the 20th century, modern-day merchants were translating the concepts of credit, debt and security into increasingly complicated and sophisticated transactions required by the global economy. But the metamorphosis seemingly ignored the underlying premise and legal framework of these concepts."
