William Godwin (1756-1836) did not philosophically address the question of debt obligations, although he often had many. Perhaps this helps to explain the omission; it’s overwhelmingly likely that Godwin would deny that there is such a thing as the obligation to repay debts, and his creditors wouldn’t have liked to hear that.
A debt is a type of promise, and Godwin denies that promises generate obligations. It is not that we should never do as we have promised, of course. Rather, we should always perform what we think to be the right – the most just – action, regardless of whether it is or is not what we have promised to do. “I ought to be guided by the intrinsic merit of the objects, and not by any external and foreign consideration. No engagements [i.e., promises] of mine can change their intrinsic claims” (Political Justice, Bk.3, Ch.3).
Later Godwin comes to the question: “if promises be not made, or when made be not fulfilled, how can the affairs of the world be carried on?” He may have in mind Hume’s essay on the obligation of promises in the Treatise of Human Nature.
Hume does not believe that promises naturally give rise to obligations; there needs to be a social convention in place. But without the convention in place “the affairs of the world” are not carried on, at least not in anything like their recognisable form:
Your corn is ripe to-day; mine will be so tomorrow. It is profitable for us both, that I should labour with you to-day, and that you should aid me to-morrow. I have no kindness for you, and know you have as little for me. I will not, therefore, take any pains upon your account; and should I labour with you upon my own account, in expectation of a return, I know I should be disappointed, and that I should in vain depend upon your gratitude. Here then I leave you to labour alone: You treat me in the same manner. The seasons change; and both of us lose our harvests for want of mutual confidence and security. (Treatise of Human Nature, 3.2.5)
Of course what we do in this type of situation is promise. I help you with your harvest today and you promise to help me in return. This is not just a promise; it is a debt. I provide you with a service or good. You give me a promise. And convention, with a little help from the iron fist of the law, ensures that you keep the promise by providing a good or service to me. Without this system in place, there we’d be, gaping stupidly in our half-harvested fields. So isn’t a good thing at least for us to think that promises generate obligations, particularly the sort that involve debts?
Not for Godwin, who insists that without promises the affairs of the world would be carried on by “rational and intelligent beings acting as if they were rational and intelligent”. He asks: “Why should it be supposed that the affairs of the world would not go on sufficiently well, though my neighbour could no farther depend upon my assistance than it appeared rational to grant it?”
In Hume’s example, we can perhaps imagine Godwin saying that I should help you today because it is the rational thing to do: I have no work until my harvest is ready tomorrow; why not help you today? This isn’t easy to make sense of until we understand what Godwin means by “rational”; clearly this is not the rationality of homo oeconomicus. Rather: “To a rational being there can be but one rule of conduct, justice” (2.6). And: “If justice have any meaning, it is just that I should contribute every thing in my power to the benefit of the whole” (2.2). Now we can see why, subject to rationality, I should, in Hume’s example, help you today, and you should also help me tomorrow. Each act, taken individually, contributes to the benefit of the whole.
Each act, taken individually. Thus debt plays no role in explaining the justice of the latter act. The justice of your helping me tomorrow is not contingent on what I do for you today; it is what you should do tomorrow simply in virtue of its contributing the most benefit to the whole. Likewise for the justice of my helping you today.
That is a crucial point. We can see in it the radical rejection of the notion that debt should play any role in accounting for justice. Cephalus defined justice to Socrates as consisting in part of always paying one’s debts. For Godwin, the idea that one should pay one’s debts can only be a hindrance to justice. If paying somebody is what contributes the most benefit to the whole, then we should pay her regardless of whether or not we she is our creditor. If paying her is not what contributes the most benefit to the whole, then we should not pay her, debt or no debt. “If we discover any thing to be unjust,” says Godwin, “we ought to abstain from it, with whatever solemnity we have engaged for its perpetration.” A debt obligation is then at best superfluous and at worst unjust.
There is one hint in Godwin’s writing that he is, after all, thinking about debt specifically, and not just about promising. It is this example:
I have promised to bestow a sum of money upon some good and respectable purpose. In the interval between the promise and my fulfilling it, a greater and nobler purpose offers itself, and calls with an imperious voice for my cooperation.
There is no explicit mention of debt, but clearly the most common instance in which one promises money is when one promises it to the creditor from whom one borrowed it. It seems to follow quite directly from Godwin’s reasoning that one should only repay a creditor when, after the promise is made, no nobler purpose comes into view for which the money might be used. In fact one’s obligation is never that of a debtor; it is always that of somebody who possesses money and is bound, however the money was acquired, to make the noblest possible use of it. If the creditor accepts justice, she will accept his result; if she rejects justice, she has no claim to the money.
Of course if you don’t repay your creditors you probably won’t get credit in the future. And this reduces your financial power to perform just acts in the future. Would Godwin accept this as justifying the view that people are obliged to pay their debts? Certainly not. The principle that promises ought to be kept is an inherently unjust idea. It is the idea that something other than considerations of the benefit of the whole, viz. prior debt commitments, should ever govern our actions. To treat promises as binding encourages the idea that promises are binding, but this is “a principle founded in prejudice and mistake . . . let it afford ever so great advantage in any particular case, the evil of the immoral precedent would outweigh the individual advantage.”
If I repay a debt, I give my creditor over to think that there was a real debt obligation. I thus encourage a prejudicial and erroneous notion – a perversion of true justice that may be harmless in this case but will certainly create injustices in the future. To honour justice, “neither a borrower nor a lender be”, as Polonius tells his son.
If the very idea of a debt obligation is a perversion of justice, why do we so often take the opposite view proposed by Cephalus: that debts ought, as a matter of justice, to be repaid? Perhaps it is a pragmatically useful moral illusion, tolerable for everyday dealings because it often gets the right result but dangerously distortionary if treated as anything more than a rough heuristic.
But if that is true, it is a profoundly disturbing feature of the way we do things that the people who are in most need of social justice are almost always extended credit instead.