Debt towards humans, or towards natural / social phenomena? Classical accounting gives the wrong answer

I identify two very different types of debt:

  • towards human creditors, or
  • towards natural or social phenomena.

Debt towards human creditors is the most visible form of debt. It is recorded in public or private accounts, and is the purpose of active monitoring, in order to ensure that the debtor keeps a sustainable capacity to pay the creditor back. The rights of creditors are defended by national and international law.

However, debt towards humans is not as hard as what could appear prima facie.

When a debtor encounters difficulties in paying back, s/he can negotiate delayed payments, or reduced interest rates. Debt can even be erased. Debtor default it is part of the creditor’s risk. Insolvency is the legal procedure to acknowledge the debtor’s incapacity to pay back, and to share the damage among creditors. It happens hundreds of thousands of times per year in any economy for private companies or individuals. Even States sometimes simply erase their debts, either by declaring insolvency or by destroying the value of money through inflation. Whatever the situation, the fact that debt towards humans is not honoured only has a distributional effect, in a zero-sum game: the creditor is stripped of his/her assets by the insolvent debtor.

Debt towards natural or social phenomena takes many forms:

  • in the absence of proper physical maintenance, any asset deteriorates under the unfortunate second law of thermodynamics, stating that the entropy of the universe (its disorder) can only grow. Delaying maintenance makes the deterioration worse, and further repair most difficult and costly. This is a debt towards a physical phenomenon
  • the amount of greenhouse gases (GHG), e.g. carbon dioxide, that the atmosphere can hold while maintaining the global warming below 1.5 or 2°C is a finite stock. It is like a bathtub that we currently fill with water at a rate much higher than it empties. The later we start reducing our GHG emissions, the closer we will be to saturating the available stock, and the steeper the needed decrease in emissions – or the higher the global warming. In both cases, time is paid by additional costs, in a form of debt towards the climate.
  • in the absence of appropriate health care, or of preventive health measures that improve living conditions of the population, public health deteriorates, leading to curative actions that are not only financially very costly, but also cause additional human suffering. This is debt towards human health.
  • in the absence of the right education at the age when the human brain is ready to receive it, or of protection against destructive visual content, teaching the same thing later is much more costly and difficult. This is a debt toward the neural system of the population.
  • in the absence of timely protection of soils against drought or against compaction by heavy agricultural machinery, they deteriorate, the living beings inside it die – and it takes hundreds of years for the soil eco-system to regenerate and to re-build its fertility.

In all these examples, recovery due to late investment of resources by humans is not only more costly than what would have been the case if done earlier. It may very well be simply impossible.

Contrary to debt towards humans, debt towards natural or social phenomena cannot be written off. These phenomena are not subject to negotiation regarding delayed payment or lower interest rates. No insolvency procedure exists to be relieved of one’s debt towards them. They are thus the hardest, most inflexible form of debt. They are also those where the consequences of not paying back is a negative sum game: if humans don’t pay on time, they lose, and no-one benefits.

Despite this asymmetry, our societies are focused almost exclusively towards debts between humans, and hardly even evaluate those towards natural or social phenomena. Considering the above, I would rather revert these priorities.

Author: Sergio Arbarviro

My competences are originally those of an engineer – but I have been making incursions, for quite some time now, into several other fields, such as economics, politics, psychology, social sciences and history. I am the designer of the KuneAgi deliberative on-line democracy software, and a founding member of the CosmoPolitical Party.