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    Debt, Default, and Two Liberal Theories of Justice


    Suttle, Oisin (2016) Debt, Default, and Two Liberal Theories of Justice. German Law Journal, 17 (5). pp. 799-834. ISSN 2071-8322

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    Abstract

    There is a fundamental disconnect between the public discourse about sovereign and external debt in comparison to private domestic debt. The latter is predominantly viewed through a Humean lens, which sees economic morality in terms of contingent social institutions, justified by the valuable goods they realize; while sovereign and external debt is viewed through a Lockean lens, which sees property, contract, and debt as possessing an intrinsic moral quality, independent of social context or consequences. This Article examines whether this Lockean perspective on sovereign and external debt is compatible with the dominance of Humean approaches to the domestic economy. It considers and rejects the most plausible argument for reconciling these views, which emphasizes the different qualities of cooperation in the international and domestic economies. It further argues that many standard objections to a Humean approach to sovereign debt suggest, not the Lockean approach, but rather a Hobbesian international moral skepticism. Concluding that the Lockean approach is unmotivated, this Article instead advances a Humean account of sovereign debt and default. It shows how taking seriously the demand for institutional justification and the idea of persons and peoples as free and equal provides an account of the duties of states—whether creditors, debtors or third parties—in sovereign debt crises. It further examines the implications of each approach for democratic choice about sovereign default.

    Item Type: Article
    Keywords: Debt; Default; Two Liberal Theories; Justice;
    Academic Unit: Faculty of Social Sciences > Law
    Item ID: 12319
    Identification Number: https://doi.org/10.1017/S2071832200021477
    Depositing User: Oisin Suttle
    Date Deposited: 30 Jan 2020 16:47
    Journal or Publication Title: German Law Journal
    Publisher: Cambridge University Press
    Refereed: Yes
    URI:

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