Review
- Whenever Bob owes Alice, then Alice has reason to look after Bob, to the extent that increases the chance he satisfies the debt.
- Yet at the same time, Bob has an incentive for Alice to disappear, insofar as it would relieve him.
This is a case where you shouldn't oversimplify then extrapolate from the over-simple model. In most real-world formal debts, disappearance of the debtor or creditor does not void the debt. If Bob disappears, Alice collects from Bob's estate. If Alice disappears, Alice's heirs collect from Bob. In cases where collection is uncertain, the terms of the debt are generally worse, so the lender is paid for the risk they're taking. In many other cases, the debt is informal and not seriously enforceable, so disappearance isn't necessary, just unwillingness/inability to pay.
And you CERTAINLY shouldn't try to reason from a book about an instance of an extremely formalized and evolved set of laws and agreements that are already far from generality about debt. The story is interesting, but doesn't tell you much about other forms of debt.
In most real-world formal debts, disappearance of the debtor or creditor does not void the debt. If Bob disappears, Alice collects from Bob's estate. If Alice disappears, Alice's heirs collect from Bob.
That seems interesting to me. I presume this is the case in large part because of some combination of laws and judicial precedents. So, exactly what legal things are involved here?
I'm not sure I understand your question. In the modern world, financial debt exists entirely in the world of laws and judicial precedents. Informal or non-monetary debts probably don't have the legal system at their root, but they almost all will have evolved different ways of handling the "disappear or make your lender disappear" strategy.
Sorry that I wasn't clear.
I want to know which laws and judicial precedents are most relevant to the situation that you are describing.
You should consider attending law school, I guess. There's a LARGE body of contract and debt-collection law and precedent, and relatedly, inheritance and probate law. It's worth reading your credit card or mortgage agreement to get a sense of it.
You should consider attending law school, I guess.
Sure, that's one option, but requires a lot of time.
There's a LARGE body of contract and debt-collection law and precedent, and relatedly, inheritance and probate law.
I have no doubt that this is true. Are you aware of a good short introduction?
It's worth reading your credit card or mortgage agreement to get a sense of it.
I agree with you, but I've already done this.
I think you're making a really large ask when one can do a simple google search to get a good start. One could also just access one of the several LLM available online, pose the question and work through some subsequent questions with the LLM.
However, in light of being helpful and making positive and not just negative contributions I think you'll find this goole search link of immediate help in getting started on answering your own questions.
For large enough cases, changing the legal system is a way to make the debtor/lender "disappear." Ownership and debt are both based on society-level agreement.
Historically European Jews were money lenders since Christians were forbidden to charge interest. This was one of the major forces behind the pogroms, since killing the debt holders saved you having to pay up.
On a country level scale this is significant. If you live in a dangerous area, you want the USA to have invested a lot of money in you which they will lose if you ever are conquered.
People claiming that debts are inherited by the estate: this only applies to formal, legible debts. If you lend money informally (possibly because there's a criminal element involved), or the debt is an informal obligation to provide services/respect then once the debt holder dies it's often gone.
Even for many types of legible debt, once the debt holder dies it's very difficult for the estate to know the debt exists or it's status. If old Joey Richbanks lends me 10 million dollars, witnessed and signed in a contract, who says his children are ever going to find the contract? And if they do, and I claim I already paid it, how certain are they I'm lying? And how likely are they to win the court case if so?
And if they do, and I claim I already paid it, how certain are they I’m lying? And how likely are they to win the court case if so?
When you pay it off, Joey should be sending you a document stating that the debt is paid, and you should also have a record of a bank transfer or other paper trail showing that the money got to Joey. If his children demand the money and you claim you already paid it, the court will ask for this paperwork and will have no trouble deciding that you're lying if you can't produce it.
The answer to "why can't I just abuse the system?" is "they're not idiots; they'll have thought of it".
There is a saying that if you lend money to a friend, you are likely to lose both the money and the friend.
I think the second point is a bit problematic. That might depend on the type of debt you're considering. But limiting my comment to purely financial, and especially documented, debt then I don't think Bob has any actual incentive here. Why? Even if Alice is removed the ownership of the loan and the right to repayment transfer to the estate and heirs. So Bob's position doesn't change.
Commonly encapsulated as "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."
Epistemic status: riffing, not sure if these secondary forces of debt are at play much
If A has many different debts to B and B many different debts to A, such that it's not trivially easy to figure out who owes who more, perhaps self-serving bias will lead each to believe they have a net balance in their favour and create overall more allyship.
Another thought: these effects seem to most disfavour delimited debts. I might be relieved if my friend's project falls apart, but I wouldn't be if they dropped dead. So if my debt is not limited to their project, then my dislike of the debt is set against all of my like of them as a person, and is more likely to come out clearly lacking, rather than just against their project, which I perhaps don't care much about (and similarly with the airport debt).
Reading this gave me an uncomfortable moment considering my feelings for all the people who expect things of me or of whom I expect things, outside the specific context of debt.
It makes me think of the very common case in society of someone taking care of an elderly or otherwise care-needing relative.
But like @Dagon says, this is only one aspect of such interpersonal relationships, out of many. In particular, taking this "as reason to avoid debt in all its forms more" sounds to me like hoping never to get in a situation which in fact happens all the time. It would be throwing a lot of human interactions out with the bathwater.
I think one could consider it a part of mental health to be able to make commitments without resenting it, and to manage situations in which such resentment arises.
wow. I only read the first 3 lines, and I already predict 5% this will have been profoundly usefwl to me a year from now (50% that it's mildly usefwl, which is still a high bar for things I've read). among top 10 things I've learned this year, and I've learned a lot!
meta: how on earth was this surprising to me? I thought I was good at knowing the dynamics of social stuff, but for some reason I haven't looked in this direction at all. hmm.
Just curious, why do you spell "useful" as "usefwl?" I googled the word to see if it means something special, and all of the top hits were your comments on LessWrong or the EA Forum
Oh. As I read those first lines, I thought, "Isn't it obvious?!!! How the hell did the author not notice that at like, 5 years old?" I mean, it's such a common plot in fiction. And paradoxically, I thought I wasn't good at knowing social dynamics. But maybe that's an exception: I have a really good track record at guessing werewolves in the werewolf game. So maybe I'm just good at theory (very relevant to this game) but still bad at reading people.
The idea of applying it to wealth is interesting, though.
A general thing I hadn’t noticed about debts until lately:
These might be tiny incentives, and not overwhelm for instance Bob’s many reasons for not wanting Alice to disappear.
But the bigger the owing, the more relevant the incentives. When big enough, the former comes up as entities being “too big to fail”, and potentially rescued from destruction by those who would like them to repay or provide something expected of them in future. But the opposite must exist also: too big to succeed—where the abundance owed to you is so off-putting to provide that those responsible for it would rather disempower you.
And if both kinds of incentive are around in whisps whenever there is a debt, surely they often get big enough to matter, even before they become the main game.
For instance, if everyone around owes you a bit of money, I doubt anyone will murder you over it. But I wouldn’t be surprised if it motivated a bit more political disempowerment for you on the margin.
There is a lot of owing that doesn’t arise from formal debt, where these things also apply. If we both agree that I—as your friend—am obliged to help you get to the airport, you may hope that I have energy and fuel and am in a good mood. Whereas I may (regretfully) be relieved when your flight is canceled.
Money is an IOU from society for some stuff later, so having money is another kind of being owed. Perhaps this is part of the common resentment of wealth.
I tentatively take this as reason to avoid debt in all its forms more: it’s not clear that the incentives of alliance in one direction make up for the trouble of the incentives for enmity in the other. And especially so when they are considered together—if you are going to become more aligned with someone, better it be someone who is not simultaneously becoming misaligned with you. Even if such incentives never change your behavior, every person you are obligated to help for an hour on their project is a person for whom you might feel a dash of relief if their project falls apart. And that is not fun to have sitting around in relationships.
(Inpsired by reading The Debtor’s Revolt by Ben Hoffman lately, which may explicitly say this, but it’s hard to be sure because I didn’t follow it very well. Also perhaps inspired by a recent murder mystery spree, in which my intuitions have absorbed the heuristic that having something owed to you is a solid way to get murdered.)