Mr. McArthur is right to reframe the debt debate as a question of sovereignty, rather than one of constitutionality. All governments derive their legitimacy – their right to sovereign power – from The People. (Indeed, this has been a legal axiom in the West at least since the creation of Roman law.) It follows that whatever a government’s constitutional form, and however radically that form changes over time, as long as that government represents roughly the same body politic, it is responsible for paying its debts.
Accordingly, we can hold the United States after 1787 responsible for the debts incurred under the Articles of Confederation, but not responsible for the pre-1776 debts of the British Empire. (On this point, among others, Mr. Goodwin seems to misunderstand Mr. McArthur’s argument, which does account for the different debt responsibilities of a country borne of another country’s borders.) The argument works conversely as well. A debtor to a country should meet his debt obligations even if that country changes its constitution. This is because the debtor is just as much in debt to that country’s People as the country itself. If the People, i.e. the creditors, remain roughly the same between one constitution and the next, they still deserve their interest payments.
Mr. McArthur errs, however, when he assumes that all governments necessarily embody a sovereignty deriving from the people. By definition, a tyrannical government does not. A tyranny flouts The People’s sovereignty, it operates beyond the confines of the state’s legal framework, and often enough, it disregards the commonweal for its own selfish interests. The international community recognizes North Korea, but this is a recognition out of pragmatism. Few would seriously suggest that Kim Jong Il leads a legal government operating as a legitimate representative of the North Korean people.
I accept Mr. McArthur’s basic premise, but add one corollary. When a People are held hostage by a tyrant, The People cannot be made responsible for his debts. Indeed, in the same way that an individual is not legally responsible to respect a contract entered into under coercion, a People cannot be responsible for a debt forced onto them by a tyrant.
Of course, the argument can get more nuanced. Not all tyrants act tyrannically all of the time. When a sometime tyrant incurs a debt legally, and in the interest of the commonweal, The People ought to bear responsibility for that specific debt (no matter how many times they may later change their government). Naturally, this raises several new issues. What constitutes tyrannical behaviour? How do we judge what is in the interest of the commonweal? But these are questions for another discussion.