Philosophy Studies Review_of_A_Douglas_The_Philosophy_of_De.pdf

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1 Review of Alexander D OUGLAS . The Philosophy of Debt . Abingdon: Routledge, 2016. 164 pp. 1 Recent financial events, especially the subprime and the sovereign debts crises, have revived debate on debts, the necessity of debt repayment and the eventuality of debt cancellations. A milestone in this debate was reached by David Graeber’s Debt (Brook lyn: Melville House, 2011), but despite the richness of this essay, many normative questions remain unanswered. Should debt always be repaid? Who should repay it? Should government deficits be allowed or even encouraged? Alexander Douglas’ recent book aims to provide an answer to all these questions. The main endeavour of the book lies in applied philosophy, that is in finding general principles able to answer such questions and to reconcile our possibly conflicting intuitions about debt and credit. However, the analysis is largely nourished by history, linguistics and economics, which makes the book highly original and multidisciplinary. The author’s general thesis is that debt is an institution necessary for society to benefit from certain goods of common life and that, therefore, this institution should be sustained and respected. Of course, not all debts are indiscriminately beneficial in every instance, only productive debts of a certain kind are. Overall, however, the i n s t i t u tion of debt of making loans for profit is beneficial. This entails several kinds of obligations for states, banks, firms and individuals, which I examine later on. The book is divided into 36 short chapters grouped into five parts. In the first part ( Language ), the author insists that the word ‘debt’ is equivocal and that common usage has often exploited its ambiguities. The biggest confusion concerns the relation between debt and duty. Debt, the author argues, is not a genuine synonym for duty. What one owes to someone else (duty) is not simply determined by what one borrowed in the past (debt). And there are many instances in which one has, in fact, no duty at all to repay one’s debts. A first instance may occur when ordinary taxpayers have to repay a debt contracted by a corrupt bunch of apparatchiks. Clearly, the author argues, there is no obligation to repay debts contracted on such terms. A second instance occurs when one borrower cannot repay her debts because of bad luck or unforeseeable changes in cir cumstances. As the author writes, “ought implies can” (15), so if one cannot repay, one must not. Third, one may not be obliged to pay one’s debt if it appears that the creditor had no real trust, at the moment of the contract, in the debtor’s ability and willingness to repay it. This means that if the lender did not secure a proper amount of u n d e rwr i t i n g s , or if there was, at the moment of the contract, reasonable grounds to think that the debtor was not able or willing to repay the debt, the duty to repay it disappears. Finally, lending money with the fraudulent intent of seizing power over the debtor by taking advantage of her inability to repay does not generate, according to the author,

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