In defense of debtors’ prison

Ferdinand has a hysterical post in which he calls Megan McArdle a paid-whore of the plutocracy for suggesting that people pay their debts.

I happen to believe that people should pay their debts. In fact, if they sign their name to a piece of paper that says “I will do X and if I fail to do X then Y will happen” they should do X and stop whining about Y happening if they haven’t done X.

If you borrow too much money, you have to suffer the consequences. The problem with modern society is that people don’t want to suffer any consequences of their actions.


20 Responses to In defense of debtors’ prison

  1. aretae says:

    McArdle’s point is actually that debts are MORE morally binding than the position: “Fine, I’ll take Y”…and that the contractual argument you’re making is insufficiently strong.

  2. Gurf says:

    OK, I went back and re-read McArdle’s post. She’s actually saying something here which is not immediately obvious, and is worth thinking about.

    I don’t know about Lysander Spooner (literally, I don’t; I haven’t read the guy), but most of us think of the law as something binding on us in many cases. If we get caught shoplifting, there are penalties. Most of us accept that. We may disagree with the exact nature of the penalties, but we accept that. Not everything illegal is malum prohibitum; sometimes we agree that it’s malum in se. Murder (not in self-defense) is a more obvious example, but it’s not the one McArdle used.

    So most of us agree that there should be a penalty for shoplifting, and let’s be honest: To a first approximation, that includes essentially everybody who wants to default on a mortgage.

    And if we signed a mortgage, most of us understand that doing so involves agreeing to certain penalties.

    So, on the one hand, there are penalties for doing something. On the other hand, there are completely different penalties for doing something completely different. Both are penalties for doing things.

    Here’s where it gets too complicated for Ferdinand: They are DIFFERENT penalties for doing DIFFERENT things. The PENALTIES are DIFFERENT. The THINGS are DIFFERENT. DIFFERENT MEANS NOT THE SAME.

    Is it OK to shoplift, even if you’re accepting the penalty for doing it?

    Many would say no.

    Many would say that shoplifting is still wrong anyway, and you still shouldn’t do it, even if you don’t mind getting caught. Morally wrong and legally wrong are not the same thing. McArdle is not saying we should change the penalties. She is saying the exact opposite: She is saying that something can be legal, yet not moral. She is saying you should refrain from defaulting casually. Society functions better when we voluntarily stay within certain norms, not because we will be imprisoned or fined otherwise, but because civilized people recognize that we all have to behave like civilized people. And the more we do the right thing because of conscience rather than external threat, the less money and time we waste on cops kicking the wrong people’s doors down in the middle of the night, and the better off we all are.

    If you observe that shoplifting and defaulting on your mortgage both involve penalties, that is not the same thing as saying that they SHOULD have the SAME penalty. There is nothing in McArdle’s post which suggests anything of the kind.

    Ferdinand is an hysterical moron. I don’t think he even finished reading the post. He started reading, utterly misunderstood where the post was going, got all emotional, burst into tears, and threw a shitfit.

    • Gurf says:

      Sorry, I messed up the paragraph that began “Many would say that shoplifting…”

      Morally wrong and legally wrong MAY coincide, but may not. I can’t do the Venn diagram an ASCII but I’m sure we can all visualize it.

    • Gurf says:

      It can be extraordinarily difficult to communicate thoughts to people that they haven’t already had. If you try metaphor and analogy, people may take you literally and get confused or upset. I just read a sentence in a book about DNA. It said that hair follicle cells “aren’t interested” in anything but producing keratin, and so the parts of their DNA unrelated to keratin production are shut down in some sense. You can imagine a creationist reading that and being absolutely gobsmacked: “Can you BELIEVE these crazy atheists claiming that hair follicle cells have “interests”? It says so right here in the book! It says they’re not “interested” in anything but keratin! This fool thinks CELLS can THINK! He SAID so!”

      No, it was just a figure of speech. (Of course my example of a creationist is made up, but I’ve seen actual creationists missing actual points in similar ways — so as Richard Feynman said to the feminist, “Don’t bug me, man”.)

      Do you know the old joke about the prisoners who’d told the same jokes so many times that they just numbered them? One would say “45!” and the others would howl with laughter.

      People tend to communicate by throwing a lot of filler noise around a few commonly-understood triggers, which indicate shared ideas. The filler does communicate some detail, but the heavy lifting is in the triggers. Tent poles, call ’em. Ferdinand so utterly failed to comprehend the post that I think he honestly never really read the actual words. He mistook a stretch of canvas for a tent pole, and thus took issue with stuff she wasn’t talking about at all.

  3. K(yle) says:

    Eh, I suppose in theory people should be responsible for their actions, but the people I’m borrowing money from don’t seem to be.

    If I’m insolvent as an individual and default on the repayment of my debt I’m to be punished. If my bank made a bunch of bad loans that no one is paying off though, they’ll just get the Feds to collect taxes from me to pay for their blunder. All in all, it seems that paying back loans is kind of a thing for suckers to do.

    This is even trickier with student loans, since they aren’t dispensable by bankruptcy, which is the government making an inherently risky loan into an inherently risk-free one. You can’t repossess an education from a defaulting student. It would be, under natural circumstances a stupid loan to make.

    As a consequence few could get one. College tuition would plummet except for at the very top, and people would probably evaluate their academic discipline based on it’s ROI, and indeed colleges would mostly have tracks that were likely to produce a good ROI based on this demand.

    There’s no way around the student loan industry being total BS from just about every angle.

  4. Red says:

    You’re assuming that all humans are capable of making responsible decisions. Quite are few are not. Normally you would like to pair them up to a responsible person (mate/ward) that could be responsible for them.

  5. Handle says:

    The law in non-recourse states like California and Virginia is actually pretty plain – if you borrow a bunch of money to buy a house, the only “Consequence Y” of a failure to make your contractual payments is foreclosure and repossession of the property – with the bank sucking up the loss if the loan is underwater. What McArdle is asking is, if one could continue making payments and/or pay off the debt, then regardless of what the law says, is there an additional moral obligation to do so?

    Well, when faces with such a need for guidance on an ethical and moral question, we should seek out some authority on the subject, perhaps our Priest, or possible look it up in your own Good Book and draw analogies. (I like the King James myself).

    Let’s see here … Psalm 37:21, “The wicked borroweth, and payeth not again: but the righteous showeth mercy, and giveth.” Or Ecclesiastes 5:4,5, “When thou vowest a vow unto God, defer not to pay it; for he hath no pleasure in fools: pay that which thou hast vowed. 5 Better is it that thou shouldest not vow, than that thou shouldest vow and not pay”.

    Well, problem solved and .. oh wait. McArdle’s not especially religious is she? At least she doesn’t reveal any sincere religiousness in her writing. Where in the world is she getting her ideas for what’s moral and what’s not? Or, more specifically, where is she getting the idea that it’s even worth it to debate the point, as if it ever could be resolved objectively between people who initially disagree by process of logic, argument, and evidence – and not just a matter of subjective taste or personal interest?

    Basically McArdle is a Natural-Law Intuitionist in this regard (whether she knows it or not). She swims in that stream of thought that assumes there existentially is such a transcendent thing as “right and wrong” in human affairs without the need for a Divine, and that it can be “discovered and reasoned out”, by reference to a few core and widely or universally-shared principles in much the same way as theorems can be proven from the axioms in mathematics. The principles are what all good and right-thinking people can find in the “dictates of their consciences”, or something. Needless to say – this is a very dangerous idea (part of Unitarian Universalism, ‘natch) because it is fundamentally intolerant and supremacist and social-conformist without understanding itself to be such. If you ever want to get to the core of what’s wrong with Hitchens, Dawkins, et al, it’s here – like like The Moldbug explained, at length.

    Personally, I think debt is a plague on our society (especially in a central-bank managed FRL system), and most especially for the bottom half, and it doesn’t bother me to think that creditors should be terrified of precisely this kind of thing happening so that they’ll be less likely to fuel another bubble with a reckless explosion in the extension of more credit.

    If people strategically default in the states where the law permits it (the state in which I currently reside does not), then I’m not concerned with the morality of the case – the reasonable judgment of which always depends on the precise circumstances of the particular situation.

    Thing of the radical changes in creditor-behavior that might come about. They might even require good credit scores, proof of income, 20% down, and try to avoid any chance of future foreclosures – which is a big hassle for everyone – by not writing crazy, novel, “toxic” instruments like teaser-Option-Arms for $800,000 to illegal immigrant apprentice-bus boys earning $14K a year. Wait a minute – wasn’t there once a world where that system was in effect?

    • Foseti says:

      Well said. Frankly, this is my biggest concern with not believing in god. I believe in a lot of things that can only logically be defended by reference to god.

      • Handle says:

        It’s cool to believe those things without God, so long as you are honest about their subjective origin. It’s an entirely different case to say, “I prefer to think that it is immoral to …” than to say, “It is immoral to …” as if it is derived from some transcendental universal Truth, but without any comprehensive and cosmological moral system to back that up as a kind of root of “authority” for your position. Or you can be particularist and say “It is wrong for me to do these things, but not necessarily for everyone.”

        But that’s what Universalists do. Worse – they reverse-engineer these principles to line up to support what they want to accomplish socially and politically in their insatiable drive for Utopia. If you’ve read Rawl’s “A Theory of Justice” or anything in that ridiculous genre – you’ll see that’s precisely the whole objective.

      • aretae says:

        Study ethics for a while…I mean really. Look at the arguments. God doesn’t get you ANYWHERE with respect to ethics (See Divine Command meta-ethics, and its associated troubles. Heck, Plato addressed that problem.), and besides, you cannot rationally support the proposition that God exists either. You have to start with the position that faith beats reason.

        Ethics is FAR harder of a topic than anyone who hasn’t taken an equivalent of an undergraduate degree (not course) in ethics realizes.

      • Foseti says:

        Without god, you run into some dead ends. God solves those problems, but it’s not exactly a satisfactory solution unless you already believe in god.

      • aretae says:


        I hear you…and my long study of ethics says you’re wrong. God doesn’t solve ANY of the problems, despite what it looks like on first glance.

    • Sardonic_sob says:

      I can construct pretty much any moral principle you can get out of the Bible by using the Categorical Imperative. That most definitely includes “you should pay your debts unless you can’t, not just if it’s convenient.” This is not the same thing at all as “natural law intuitivism,” and it’s pretty much where McArdle is coming from on this topic.

      • Handle says:

        Yeah, you ought to, because “the golden rule” and “the categorical imperative” are related notions – but why use the categorical imperative at all?

        Why not treat all personal moral questions as a CEO treats business decisions, or the international-relations realists treat national decisions – amorally, with a pragmatic view of strategically maximizing one’s personal welfare while interacting in an environment where one can expect the others to do the same. Do you have something that operates as “authority” here that you do not feel free to violate even if you don’t understand or agree with it, or do you have a mere personal preference?

        And, at any rate, I beg to differ with your confidence in the outcome of CI reasoning. Even Kant conceded that the CI doesn’t work when the parties are not on equal terms and of a fundamentally different nature because the specific details of the situation are unilateral and cannot be examined with pure reciprocity. Even relations between smart and simple, or men and women are problematic unless you assume some “fundamental human equality of the dignity of autonomy” or some such. This is why strong egalitarianism has such a prominent role in his reasoning. A Universalist accepts this, of course, whereas a typical Particularist does not – accepting the notion only insofar as individuals are similarly situated in the relevant characteristic – that is, the classical notion of “Justice” as equal application of general laws.

        This was one of the main problems that Rawls sought to overcome in his “A Theory of Justice” with the “veil of ignorance” concept. A smart, rich person could say “Sure, it’d be nice if it were a universal law if the smart and rich got richer and the simple and poor people got poorer, that’d be great for me. I can support laws that do that.” Rawls said, “Ok, that’s the opposite of what I want, try instead to imagine that you haven’t even been born yet and don’t know what kind of (perfectly equal) person you’re going to be born as, and now think about morals and politics. Most likely you’d be simple and poor and so you’d like to rob the rich through taxes.” (And then he gets all utilitarian on us).

        But getting back to McArdle – as this example shows, people could certainly be comfortable with the notion of a universal law in which, when individuals borrow from a bank in a non-recourse state, they may stop paying if they chose with the sole asset available for remedy being the house itself. In fact, that’s actually the law in about half the states today, so clearly lots of ethical, and moral people think it’s a fair and just notion, and the banks don’t hesitate to work in such legal environments.

        And in fact, that’s the whole problem McArdle’s facing here, and why she keeps revisiting the subject (as she has for, what, over 18 months now?) – because both her own loyal commenters and the rest of the Progressive-econoblogosphere luminaries (no strangers to moral assertions they) keep disagreeing with her moral conclusion. So she’s trying to “settle” the question without reference to some accepted, shared authority, as if that’s possible.

        It’s just like trying to settle a matter of law without reference to statute or caselaw precedent – which when judges do it, as they have for centuries, they once were perfectly happy to concede that they were making it up as they went along, trying as best they could to conform the new policy to principles of equity and justice in accordance with their wisdom, judgment, and moral conscience. And they often used their intuition – as many people do. And they called it “Natural Law” when the result was deemed to be consistent with their notion of immutable human nature.

        And the issue for McArdle is – when people disagree about what is ethical in a particular circumstance how can I convince them about what I think it true and good and right? This has proven especially challenging for her when the precise question is “When is it immoral abuse above and beyond the requirements of the existing law of bad-faith breach to take advantage of a situation when you don’t have to breach, but the consequences for breach are dramatically in your favor – but when they are spelled out clear as day in the terms of a contract with a highly sophisticated, arm’s-length party”?

        What McArdle could do is say, “If you are a Utilitarian, as I prefer to be by choice, then the world would have more net-social-welfare if…” or “If you’re a Rawlsian Universalist, then the principles of social justice say …” or even “If you are the kind of Christian who takes these things seriously, then the position of the Church of your community is …”

        But she doesn’t say it like that at all, does she? Instead she writes as if there is indeed a right answer to this question that she has some special insight into, and in trying to convince us she uses analogies which appeal not to authority but to our feelings and intuitions about what is right or wrong in a similar situation (like the Macy’s Shoplifting thought-experiment). This is very different from even a sola scriptura contradistinction from an existing Orthodoxy, it’s essentially a sola ipse, “look only inside yourself”.

        In my opinion, sola ipse can work in a social and cultural sense for a certain elite slice of society, but, alas, not most of it – a large fraction of whom require moral instruction and social-conditioning – including the introduction of a particularly strong psychological attachment – to following the rules, because social order is fragile (circumspice).

        Self-discipline in the face of our strongest animal impulses is very difficult for these people and they need a profoundly intense internal countervailing force – with frequent reinforcement multiplied by social-pressures, to assist them with self-control so we can have a pleasant civilization to live in. Most people need clear guidance and the feeling of confidence and certainty – and when told there is no real map and to ethically reason for themselves with simply do what they feel / can get away with.

        At any rate, the overall point is not ethical reasoning but how one can use reasoning to resolve ethical disputes. Without a common acceptance of first principles it’s simply not possible – like arguing proofs in mathematics with different axioms. You may accept a certain set of principles as having “authority over you” or you may go a step further and believe them to be transcendentally true – as universalist religions (even informal secular ones) do.

        But when these Universalists disagree and try, in ignorance at their own futility, to talk it out without reference to first principles or authority, as if that’s ever going to resolve anything – well, I’ve just got to sit back and watch and laugh with amusement.

      • Sardonic_sob says:

        You are completely correct that the CI is a created first principle, a proposed and fairly artificial solution to the problem, “We need an ethical first principle from which we can derive an ethical system.”

        My only point was that it is neither more nor less so than any other first principle or principles, and that untestable and unfalsifiable claims of divine inspiration do not, logically speaking, elevate such other principles above it. You don’t need God to construct an ethics and, so far, ethics claiming to be derived from divine command have not resulted in behavior I would consider particularly more ethical than the ethics I construct for myself absent same.

        Basically, so far as I can tell people are either taught to act ethically as children or they are not,and either it sticks or it doesn’t. The basis of the ethics is largely irrelevant in my experience.

      • Handle says:

        Sardonic_sob – I just want to say I really appreciate your writing and the level of discourse we’ve been sharing. I’d clarify my point by saying it’s not what “the basis” for ethics is, but how strongly a person will adhere to any particular code of behavior, even when it’s not in his interests to do so – or even when he finds it personally disagreeable.

        I’ll end by highlighting this disgraceful episode in the continuing chronicles of the decline of our Western Civilization. The mob seems to be composed of quite ordinary young folks (not just your typical “oppressed youths”) who seem absolutely without hesitation in their chaotic vandalism and undeterred by any strong internal moral qualms (which, sadly, would be required because, apparently, the police weren’t exactly able or willing to establish civil order – their primary function).

        I do not believe that all cultures at all times and places are equally susceptible to these sorts of events (which is what I’ve heard enough to know that it’s the usual excuse). Something very important has failed here. Not just the policies and practices of law enforcement – but something, if you’ll excuse my terminology, concerning the souls of the rioters.

        My position is that I’d be willing to support whatever is reasonably required to remedy this dysfunction so my family can live in a place where we can trust our neighbors without worrying whether our business will be ransacked by their punk perpetually-adolescent children should the local sports team lose a meaningless game. I’m all ears when it comes to ideas about how to accomplish that, but I don’t think human nature gives us very many options.

  6. Tschafer says:

    The points made here against MacArdle are a lot better than the ones Ferd made. He’s becoming increasingly unreadable as time goes on, and yes, “hysterical” is the word. I don’t really bother reading him much anymore.

  7. Jehu says:

    The problem is that the banks and lots of large industries have paraded their moral hazard repeatedly in our faces. Government officials like Geithner have also made it clear that laws are only for the little people. In such an environment it is very hard for me to sternly insist that the little people must continue to play by the rules simply because I can meaningfully impose costs on them whereas I can’t for the politically connected. I believe that it is evil to not keep one’s promises when they are freely entered into outside of a state of war, but I feel very awkward when I can only enforce those rules on the weak.

  8. Fake Herzog says:


    Great comments — I see a future in blogging for you.

    As for aretae’s claim that “you cannot rationally support the proposition that God exists either”, what if I told you that there are in fact, very good and rational reasons to believe that Jesus of Nazareth was the Christ?

    Aretae, please give this paper a read and blog about it over at your place, I’d love to get your thoughts:

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