AMES, Iowa – Borrowing money to buy a new home or finance a college education is so common and relatively easy that we don’t always think about the ethical and moral issues associated with debt before signing on the dotted line.
It’s more than just a question of “Can I repay this loan?”. Kate Padgett Walsh, an assistant professor of philosophy at Iowa State University, says it requires a deeper look at all aspects of the lending process. And the conversation shouldn’t be limited to individuals, but include debt amassed by governments.
“From a philosophical perspective, it’s easy to oversimplify the ethical issues and not think them through,” said Padgett Walsh. “There are so many complexities with debt that we need to take a much closer look at ethics.”
For example, when is it ethical to declare bankruptcy or default on a loan? Or what makes a loan predatory, if the borrower has agreed to the terms? These were among the many questions raised following the 2008 housing and financial crisis. History has shown that there isn’t always an easy answer to issues that we still struggle with today, Padgett Walsh said.
These topics and others will be the focus of “The Ethics of Debt” symposium at ISU Sept. 24-26, organized by Padgett Walsh and William Carter, an assistant professor of German studies. Featured speakers include Clara Han, Johns Hopkins University; Miranda Joseph, University of Arizona; and Gustav Peebles, The New School for Social Research.
The symposium will open with a forum on student debt and screening of “Default: The Student Loan Documentary” at 7 p.m. on Sept. 24, in the Memorial Union Great Hall. Carter says organizers want students to have the opportunity to openly discuss how much they should borrow, how long they should stay in school and how to spend their student loan money. Financial aid and counseling experts will also be available to answer questions and refer students to on-campus resources.
The Devil’s Pact
With so many opportunities to acquire debt today, people need to think about how they spend their time and money. An investment in higher education or a home both have value, but individuals should consider what is in their best self-interest before taking on that burden, said Carter, who studies economic thought and literature.
“These issues come up repeatedly and often overlap in life,” Carter said. “It’s what the literature refers to as the ‘Devil’s Pact.’ What is the tradeoff? What are you getting right now for what you’ll get and have to repay in the future?”
Carter and Padgett Walsh say the 2008 recession has made people more wary about borrowing. Still, the convenience of financing a major purchase combined with a desire for instant gratification makes it easy to get caught up in a web of debt. However, all the blame should not fall on the shoulders of borrowers. The symposium will also cover the responsibility of lenders and regulators to operate a fair system without excessive risk.
You can find a symposium schedule and learn more at: www.philrs.iastate.edu/2015/04/20/ethics-of-debt/. The event is made possible by a grant from the Center for Excellence in the Arts and Humanities (CEAH) and support from the College of Liberal Arts and Sciences (LAS) at Iowa State. It is further supported by Anthropology, History, International Studies, Philosophy and Religious Studies, and World Languages and Cultures at Iowa State.