Debt and Democracy

How can we respond to sovereign debt crises in a fair way? In this seminar, we will tackle core philosophical and economic questions that arise in sovereign debt crises, with a special focus on Europe, and in particular on Greece. We’ll tackle the following normative issues: In what way are states morally bound by sovereign debt contracts? Should debtor countries always repay their debts? If not, under what conditions? Should creditors try to enforce debt repayment and should they impose conditions in return for bailouts? Who should pay the burden for excessive debt levels?

These questions are normative in the sense that they require more than analyzing economic data; they plainly also presuppose a theory of what is just regarding sovereign debt. But answering these normative questions crucially presupposes answering a lot of vexing economic questions first as well. We will deal with the following: Why do sovereign states repay their debt at all given the limited legal enforcement procedures? Which conditions does the Troika impose on Greece, and how do they limit the democratic sovereignty of Greece? What are the different policy options of how European countries can reduce their debt levels at the current juncture?

The aim of the seminar is to equip participants with analytical tools and empirical background to analyze sovereign debt crises. Participants are encouraged to attend the Finance & Philosophy Lecture Series on the same topic this Summer Semester.

Philosophy and Economics Programme, University of Bayreuth

Summer 2015, with Till Cordes, Carsten Jung, and Jens van’t Klooster