RESOLVENCY

RESOLVENCY explores how debt can be reimagined as a more sustainable socio-economic medium– one that enables democratic deliberation of corporate, consumer and sovereign debt relations. RESOLVENCY understands debt as most basic socio-economic medium and proposes to rethink it from its limits. Moving from an insolvency paradigm to one of re-solvency opens up the regulatory and reflexive potential of insolvency law. This shift positions insolvency not as an end-point, but as an anchor for a renewed, deliberative understanding of debt—RE:DEBT.

If money makes the world go 'round, then debt speeds it up. But what is debt? Debt and credit are contract-based bonds that enable extended social reciprocity over time, forming a logical pair of formalized exchanges. A creditor provides something to a debtor, who, in turn, owes the creditor and promises to return something—usually of equivalent value—at a later time. At its core, debt gives the debtor time—typically quantified in money—to fulfill that obligation. In this sense, debt buys time in exchange for interest. Even money itself could be understood as social debt or credit relation where the currency represents future (time-delayed) exchange value. 

Within a paradigm of perpetual growth, debt inherently threatens sustainable development. Economic expansion (on a state, corporate or personal level) today is mostly financed through debt, which is expected to be repaid by future growth—an assumption that becomes unstable when ecological and social limits are ignored. Debt bubbles fuel financial and economic crises, as seen in the global financial collapse of 2008. The natural limits to planetary growth—such as climate change—are absent from conventional economic calculations. So, too, are the rising inequalities both globally and within most national societies. Democratic governance and actors' autonomy suffer under the structural power of overwhelming economic debt. In short, an unlimited and reductionist financial conception of debt contributes to economic, ecological, cultural, and political unsustainability. Decoupled financial markets (e.g., derivatives trading), imperialistic debt politics, and the explosion of public and private debt (e.g., in response to the pandemic-induced recession) only further entrench the global debt cycle.