Source: French to English Tester Published on: 2026-04-02
Source: The Conversation – in French– By Maxime Menuet, Professor of Economic Sciences, University Côte d’Azur
For a long time, debt was used to finance war and crises. Since the 1970s, the indebtedness of States no longer responds solely to the financing of these exceptional events. Debt now structures our economies, our politics… and even our imaginations. Should debt be freed from the idea of sin? Can it be, even?
Contrary to popular belief, public debt is a relatively recent phenomenon. It is indeed essential to distinguish the debt of a private individual, whether prince, king, or emperor, from that contracted by a society as a whole. Under the Ancien Régime, the royal treasury and the kingdom’s treasury were often confused. The debt then amounted to a personal commitment. This accounting confusion was even claimed by mercantilists, who evaluated the nation’s wealth by the measure of the king’s personal treasury.
The true birth of public debt coincides with that of the modern nation-state, a moment where individuals, as subjects or citizens, recognize a transcendent entity – the state – capable of issuing debt securities on their behalf. From the outset, this instrument is therefore closely linked to trust in political power.
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Going into debt for the war
For a long time, the dynamics of public debt followed a relatively simple pattern: a cycle of war and peace. States went into debt to finance extraordinary expenses, particularly conflicts, then reduced their debt during peacetime, supported by economic growth or inflation. The examples are well known: British debt exceeds 150% of gross domestic product (GDP) after the Napoleonic wars, while that of France exceeds 200% at the end of the two world wars.
Since the 1970s, a major transformation has been taking place. Developed countries are now sustainably indebting themselves… in times of peace. Deficits have become structural, averaging nearly 3% of GDP in the countries of the Organisation for Economic Co-operation and Development (OECD).
This break raises a central question: why do states continue to accumulate debt in the absence of exceptional shocks, and what are the consequences?
Public debt, a strategic lever
My work focuses precisely on illuminating the origins of this indebtedness as well as its effects. On the side of the causes, I have shown that the accumulation of public debt can result from economic inefficiencies linked to social conflicts or political strategies. Debt is not just a financial instrument: it can become a strategic lever for those in power.
For example, the reputation for competence of a political leader – notably their ability to “manage” the debt – has value only if the problem persists. By completely resolving the debt issue today, they would partially deprive their future actions of justification.There is thus an incentive to let the debt accumulate, rather than to definitively eliminate it.
A social regulation tool
In another register, thedebt can also play a role in managing internal social tensions. A leader may have an interest in shifting the conflict outward – for example, towards international creditors – in order to reduce internal divisions, especially during the pre-election period. This “diversion” mechanism was observed, for example, during the Greek crisis, when thegovernment of Alexis Tsiprashas strongly politicized the conflict with the famous “Troika,” helping to rally domestic support in the face of external pressure.
Beyond its causes, public debt profoundly transforms the functioning of economies. An idea widely accepted, especially since thework of Henning Bohn at the end of the 1990s, is that sustainability depends on the reaction of governments: if they increase taxes or reduce spending when debt rises, then its trajectory remains controlled.
Governments less sensitive to debt than to interest
My research invites a more nuanced assessment. In practice, governments react less to the stock of debt than to its cost, that is to say to the interest burden. This distinction is decisive, particularly in the current context where the rise in interest rates seems hardly avoidable, given the massive investment needs ahead — whether for the energy transition or rearmament. Such an environment is likely to lead to more restrictive fiscal policies.
But a reaction that is too strong can, paradoxically, produce the opposite effect to the one sought. It can trap the economy in an unstable dynamic, characterized bystrong fluctuations in the debt ratio and increased uncertainty about the future trajectory. This is what I called the“danger of budgetary rules”A: wanting to excessively discipline debt can, in reality, weaken the economy.
An extreme example is given by Romania, then a member of the Eastern bloc and equipped with acommunist economy, of Nicolae Ceaușescu. In the 1980s, the regime imposed drastic austerity in order to fully repay external debt. Although the goal was achieved in 1989, the economic and social cost was considerable. This episode illustrates that an excessive reaction to debt can produce deeply destabilizing effects in the long term.
A moral and religious imagination
However, reducing public debt to a mere contractual mechanism or a macroeconomic variable means missing an essential dimension: its moral scope.My recent worksuggest that, since at least the 1970s, developed economies have entered a new regime, where public debt far exceeds its initial function of financing deficits.
It becomes a central instrument for regulating capitalism, structuring both public policies and collective expectations. In this sense, it must be understood as a “total social fact,” to use Marcel Mauss’s expression.
But this centrality is not only due to its economic or institutional effects. It also relies on the representations associated with it.
Indebtedness indeed mobilizes a deeply rooted moral and religious imagination. To be in debt is to be at fault. In Abrahamic traditions, sin is thought of as a debt to be repaid – to the point that the two concepts become conflated, as statedSaint Ambrose(339-397): “What is debt, if not sin?” The obligation to repay is not then merely a simple return: it involves reparation, sometimes an expiation, which exceeds in value the initially owed sum.
This link between debt, fault, and liberation is particularly visible in the biblical tradition. One of its most striking expressions is that ofjubilee : every fifty years, it was prescribed to free the slaves, to cancel debts, to redistribute properties, and to let the land rest. This heritage continues to inspire certain contemporary positions: since John Paul II, several popes –as was still the case in 2024– have thus called for the cancellation of public debts, particularly those of the poorest countries, on the occasion of the jubilee years.
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A guilty company?
This imaginary has not completely disappeared. It continues to structure, often implicitly, thecontemporary discourses on public debt. This is frequently presented as a collective fault, justifying austerity policies or the impossibility of acting. The indebted society thus becomes a guilty society, compelled to discipline itself. From this perspective, debt is not only an economic tool: it organizes the functioning of capitalism itself. By imposing obligations over time, it shapes behaviors — budgetary discipline, political trade-offs — while stabilizing the system and limiting the scope for transformation.
Breaking out of this logic requires shifting the perspective. It is not a question of denying the economic stakes of debt, but of breaking away from the idea that it is primarily a fault. Other imaginaries exist. WithFelwine SarrIn particular, some African traditions invite us to think about public debt differently: not as guilt but as a bond, a relationship, or even a lever for collective transformation. This is the direction in which my current work lies.
This article is published in association with theCircle of economists within the framework of the Best Young Economist Award, for which the author was a finalist.
Maxime Menuet received funding from the National Research Agency under the SustainDebt project (ANR-24-CE26-3350)
–ref. Should public debt be de-moralized?https://theconversation.com/should-public-debt-be-moralized-279614