The ability to walk away unscathed from unsustainable debt and start again has been a defining characteristic of American capitalism.

So says professor Niall Ferguson in “The Ascent of Money” when visiting Memphis, Tennessee, “a town famous for Blue Suede Shoes, barbecued ribs … and bankruptcies“:

  1. What has been the case since 1898?
  2. What are we told about bankruptcy and American values?
  3. Why is the law as it is, and what is the consequence for risk-takers?

(Your answers will be checked in class. If you’re not in a class context, you may request the answers here.)

In Europe, on the other hand, according to The Economist, “many countries treat honest insolvent entrepreneurs more or less like fraudsters”, and it can take years to discharge a bankrupt of his or her debts:

life sentences

Things may however be changing: advocacy groups are campaigning to “end the cultural stigma of failure in Europe when it comes to startups and entrepreneurs”, and the French government is trying to change attitudes to failure by sponsoring “Le Portail du Rebond”, which aims to help some of the 60,000 entrepreneurs who declare bankruptcy each year to bounce back.


Propose three concrete policies to change attitudes to bankruptcy in Europe. 

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Course Discussion