Debt in Just Societies

Professor John Linarelli, a Chair in Commercial Law at Durham will come to speak about debt in just societies.

This is a free event however registration is required in advance. Refreshments will be available.

Debt in Just Societies

A post-Great Recession consensus has emerged that persons, firms, banks, and governments should deleverage and that access to credit should be restricted. This talk deals with legal and policy solutions to the dilemma that debt presents to societies: successful societies benefit from a substantial infrastructure of consumer, commercial, corporate, and sovereign debt but debt can cause substantial private and social harm. Pre- and post-crisis solutions have seesawed between subsidising and restricting debt, between leveraging and deleveraging. Unsophisticated solutions restrict debt without accounting for the risk of harm to persons least able to bear the risk, worsen pre-existing inequalities, destroy or impair the net worth of households, and impose unfavourable distributive consequences. This seminar offers normative tools to assist policymakers in developing institutions to take criteria other than economic stability into account, but which do not undermine the aim of economic stability. The speaker will argue for access to credit architecture that is responsive to equality concerns, and will advocate a luck egalitarian approach, a responsibility-catering form of egalitarianism offering policymakers options to take the debtor’s choice and desert into account while still accounting for cognitive mistakes people often make in debt decision making. More sensitivity to equality concerns in law and policy should lead to developing incentives to promote hybrid instruments to relax the rigidity of debt. It should also lead to discouraging, on moral grounds, law and policy relying primarily on private debt to finance the public goods features of mixed public-private goods.

Professor John Linarelli holds a Chair in Commercial Law at Durham. He has served in professorial posts on both sides of the Atlantic, in both the UK and the USA. He joined Durham Law School in October 2014. Professor Linarelli's research is interdisciplinary, in law, moral and political philosophy and economics. He holds a PhD in Philosophy from the University of California Riverside as well as degrees in Law. Professor Linarelli’s research focuses extensively on inequality. His current projects include work on inequality in post-Great Recession banking and financial law. Forthcoming in early 2016 is his co-authored book, with M Sornarajah (NUS) and Margot Salomon (LSE), to be published with Oxford University Press, Beyond Global Capitalism: Reclaiming the Future of International Law, has edited and co-edited two major volumes on global justice and international economic law.

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