The philosophical framework presented by Mr. York, while a novel and interesting approach to the debt forgiveness conundrum, ultimately misses the mark. Most problematically, for an argument that is cast in purely philosophical terms, it is strangely lacking in any normative justification: why, we are left wondering, is extra-constitutional change – or the putative emergence of a “new state” – the line of ethical demarcation when it comes to debt obligations?
I’d like to fill in this normative vacuum by suggesting why it is not. What distinguishes loans to a state, as opposed to those to an individual or institution, is that state borrowing is an exercise of sovereignty. The debtor, then, is the sovereign itself; and the source of sovereignty, by any account, is The People as a collective.
With this in view, perhaps Mr. York’s argument could be recast in the following sovereignty-conscious terms: when a government changes in an extra-constitutional manner, The People as defined by the old regime is a fundamentally different entity than The People as defined by the new one; hence, it would be unjust to hold the latter accountable for the debts of the former. By this account, determining whether The People really has changed would require evaluating the representativeness of the predecessor government vis-a-vis its successor: if citizens are truly represented in the second regime but were not in the first, then perhaps one sovereign has disappeared and another formed.
Such an inquiry, however, is foreclosed by Mr. York’s framework, which mechanically equates sovereign continuity with constitutional consistency. The perverse result: while a fledgling democracy could disavow the debts of an overthrown dictator, a newly crowned dictator could just as easily – just as ethically – wash his hands of a vanquished democratic government’s obligations; and these obligations would be forever forgotten even if democracy should soon reemerge.
The real problem for Mr. York’s argument, though, is that in neither of these cases – democracy-to-dictatorship nor dictatorship-to-democracy – has the nature of sovereignty actually changed. Sovereignty is conceptually prior to government, regardless of the government’s structure, representativeness, or continuity with a predecessor regime. Even the most wicked of governments is presumed to embody national sovereignty, as derived from The People: this is why the international community recognizes North Korea’s borders no less than Switzerland’s. It follows that constitutional upheaval within an established nation, while perhaps changing the form of the leviathan, does not transform its essence or dismantle its constituent parts. The People remains an intact and unchanged entity – with the capacity to meet prior obligations incurred on its behalf.
Two of Mr. York’s examples, West Germany and the United States, are exceptions tending to prove this rule. Both cases featured the emergence of an altogether new political unit, as opposed to merely a new form of government. Since The People of the United States was a previously non-existent entity, a new sovereign had emerged – and then, and only then, is there an argument that previous debts can be ethically ignored.
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