Household debt has been widely discussed among social scientists, policy makers, and activists. Many have questioned the levels of debt households are required to take on, and have made various proposals for assisting households in debt. Yet theorists of distributive justice have left household debt underexamined. This article offers a normative examination of the distributive justice issues presented by proposals to relieve household debt or protect households from overindebtedness. I examine two goals at which debt relief proposals aim: remedying disadvantage (...) and stabilizing expectations. I then examine strategies for relieving existing debts such as debt abolition, forgiveness, bankruptcy, and mitigation, as well as strategies that aim to prevent future indebtedness, such as public provision or financing of costly goods and credit or interest rate regulations. (shrink)

Theories of justice rely on a variety of criteria to determine what social arrangements should be considered just. For most theories, the distribution of financial resources matters. However, they take the existence of money as a given and tend to ignore the way in which the creation of money impacts distributive justice. Those with access to collateral are favoured in the creation of credit or debt, which represents the main form of money today. Appealing to the idea that access to (...) credit confers freedom, and that inequalities in this freedom are morally arbitrary, this article shows how the advantage to those with collateral plays out in different ways in today’s economy. The article identifies several forms of bias inherent in money creation, and its subsequent destruction: loans from commercial banks to individuals and corporations, interbank lending, lending from central banks to commercial banks, and selective bail-outs by central banks. These are not mere inequalities: they are unjust since alternative designs of the financial architecture exist that would significantly reduce them. The paper focuses on one possible reform with the potential to address several of the types of bias identified, namely the separation of money creation from private bank credit. (shrink)

When assessing institutions and social outcomes, it matters how free society is within them (‘societal freedom’). For example, does capitalism come with greater societal freedom than socialism? For such judgements, freedom theorists typically assume Individualism: societal freedom is simply the aggregate of individual freedom. However, G.A. Cohen’s well-known case provides a challenge: imagine ten prisoners are individually free to leave their prison but doing so would incarcerate the remaining nine. Assume further that no one actually leaves. If we adopt Individualism (...) plus the standard liberal view of freedom, such incarceration seems to leave societal freedom unaffected. This is an important theoretical challenge: it seems we must either reject Individualism or reject, or at least amend, the liberal view. Cohen also suggests his case, and the collective unfreedom therein, helps us capture how proletarians are unfree under capitalism. In this article, I argue that we can solve Cohen’s puzzle, if we focus on how power can reduce freedom. If we adopt the republican view of freedom, we can say that prisoners are unfree in Cohen’s case because they are dominated by the other prisoners. This solution keeps Individualism but moves beyond liberal freedom. I then also show how this individualistic framework captures proletarian unfreedom. (shrink)

This article concerns freedom and financial markets. First, I consider the republican case for liberalization, extending Robert Taylor’s economic model of republicanism to financial markets. This case adopts what I call a “philosopher-king” approach to political theory, arguing by reference an ideal or first-best set of policies or reforms. Then, I investigate the negative externalities of several decades of financial market liberalization, including the erosion of political accountability and the growing concentration of political and economic power in the hands of (...) those best suited to profit from the rise of finance. From this “political economy” perspective, the impact of liberalization is clear: we paid for greater access to credit with political and economic domination. In republican terms, we traded freedom for credit. My analysis, moreover, has implications for republican debates on freedom and the market. In second-best worlds, where reforms will almost certainly be incremental, shaping the balance of power in ways that impact future policy, judging reforms by reference to a vision of domination-free markets will often suggest policies that make individuals less free. The political economy approach is far more relevant to debates about which economic institutions further or hinder freedom as non-domination. (shrink)

The orthodox view on higher education financing is that students should bear some of the costs of attending and, where necessary, meet that cost through debt financing. New economic realties, including protracted economic slowdown and increasing austerity of the state with respect to the public funding of goods and services has meant that the same generation who have to borrow the most in order to attend face significantly fewer employment prospects upon graduation. In this context, is the current approach of (...) shifting the costs of post-secondary education from the general public to individual students justified? Most debate on the issue has focused on the demands of distributive justice within the modern higher education system and on the whole accepts the idea that students ought to pay. I argue that distributive arguments alone are insufficient because they tacitly endorse the provision of higher education as being much like a consumer's choice. As an alternative, I explore the place and importance of higher education in supporting personal autonomy as a central liberal democratic value. I then argue that debt financing of higher education places unreasonable constraints on student's choices with respect to the kind of democratic citizens that they would otherwise aspire to be. This constraint has negative implications for the wellbeing of individual students and the larger society. (shrink)

In many Western capitalist economies, private indebtedness is pervasive, but it has received little attention from political philosophers. Economic theory emphasizes the liberating potential of debt contracts, but its picture is based on assumptions that do not always hold, especially when there is a background of structural injustice. Private debt contracts are likely to miss their liberating potential if there is deception or lack of information, if there is insufficient access to (regular forms of) credit, or if credit is overly (...) expensive. Markets for private debt can be mechanisms of structural injustice: rather than playing a neutral role, they reinforce injustices, because the failures of debt to be liberating disproportionately hit individuals in disadvantaged positions. By individualizing what are in fact structural problems, private debt can contribute to stigmatization, social exclusion and oppression. What is at stake, from a perspective of structural justice, is not only the distribution of income, but also the distribution of risk. The problems of private debt markets therefore require political attention. In addition to fighting the structural injustices that form the background condititions of private debt, it is also worth addressing private debt markets themselves. (shrink)