--- title: "Meaning & Key Takeaway of: Debtors’ prisons were ultimately…" description: "\"“Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditor..." image: "https://sms4smile.com/quotes/i/ca7/yanis-varoufakis-10824_insolvency_debtors-prisons-were-ultimately-abandone_3126470.jpg" --- # Debtors’ prisons were ultimately abandoned because… ![“Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and…” quote by Yanis Varoufakis](https://sms4smile.com/quotes/i/ca7/yanis-varoufakis-10824_insolvency_debtors-prisons-were-ultimately-abandone_3126470.jpg) [Download](https://sms4smile.com/quotes/i/ca7/yanis-varoufakis-10824_insolvency_debtors-prisons-were-ultimately-abandone_3126470.jpg) [Open image](https://sms4smile.com/quotes/i/ca7/yanis-varoufakis-10824_insolvency_debtors-prisons-were-ultimately-abandone_3126470.jpg) > ““Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad? Bankruptcy and debt write-downs became for capitalism what hell had always been for Christian dogma – unpleasant yet essential – but curiously bankruptcy-denial was revived in the twenty-first century to deal with the Greek state’s insolvency.”” [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Bankruptcy was essential for capitalism’s growth, allowing risk and limited liability, yet modern denial of it hampers financial recovery. **In simple terms:** Bankruptcy lets economies reset and manage risk. Key Takeaway Accept bankruptcy as a tool for economic health. Themes economics risk bankruptcy capitalism policy Mood critical analytical Type philosophical inspirational When to use this quote - government budgeting - corporate finance - personal debt - financial crises Key Concepts limited liability financial restructuring debt management economic cycles Questions to Reflect On - Should societies balance creditor rights with economic flexibility? - What safeguards prevent abuse of bankruptcy? A Different Perspective Overemphasis on debt sanctity can stifle innovation and lending. ★ ★ ★ ★ ★ No ratings yet [Bad Debts](https://sms4smile.com/quotes/about/bad-debts-1956323/) [Curiously Bankruptcy](https://sms4smile.com/quotes/about/curiously-bankruptcy-5511019/) [Debts Sacred](https://sms4smile.com/quotes/about/debts-sacred-5511021/) [Insolvency](https://sms4smile.com/quotes/about/insolvency/) [Interest rate](https://sms4smile.com/quotes/about/interest-rate/) [Money](https://sms4smile.com/quotes/about/money/) [Responsibly Debts](https://sms4smile.com/quotes/about/responsibly-debts-5511020/) ## Related quotes > [“Like bad debts, write-off negative people from the accounts of your life.”](https://sms4smile.com/quotes/vikrmn-ca-vikram-verma/like-bad-debts-write-off-negative-people-from-the-accounts-of-your/) [Vikrmn: CA Vikram Verma](https://sms4smile.com/quotes/author/vikrmn-ca-vikram-verma/) > [He that sells upon Credit expects to lose 5 per Cent. By bad Debts; therefore he charges, on all he sells upon Credit, an…](https://sms4smile.com/quotes/benjamin-franklin/he-that-sells-upon-credit-expects-to-lose-5-per-cent-by-bad-debts/) [Benjamin Franklin](https://sms4smile.com/quotes/author/benjamin-franklin/) > [“The transformation of my role at the bank began on February 7, 2007, when HSBC Holdings announced that its bad debts for the previous…](https://sms4smile.com/quotes/danielle-dimartino-booth/the-transformation-of-my-role-at-the-bank-began-on-february-7-2007/) [Danielle DiMartino Booth](https://sms4smile.com/quotes/author/danielle-dimartino-booth/) > [“Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never…](https://sms4smile.com/quotes/yanis-varoufakis/forcing-new-loans-upon-the-bankrupt-on-condition-that-they-shrink-2/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [Man's Reason is in such deep insolvency to sense,that tho' she guide his highest flight heav'nward, and teach himdignity morals manners and human comfort,she…](https://sms4smile.com/quotes/robert-bridges/man-s-reason-is-in-such-deep-insolvency-to-sense-that-tho-she-guide/) [Robert Bridges](https://sms4smile.com/quotes/author/robert-bridges/) > [The worst bankruptcy in the world is the person who has lost his enthusiasm.](https://sms4smile.com/quotes/william-howard-arnold/the-worst-bankruptcy-in-the-world-is-the-person-who-has-lost-his/) [William Howard Arnold](https://sms4smile.com/quotes/author/william-howard-arnold/) > [The entitlement state has driven us into insolvency.](https://sms4smile.com/quotes/joe-miller/the-entitlement-state-has-driven-us-into-insolvency/) [Joe Miller](https://sms4smile.com/quotes/author/joe-miller/) > [What you have in legacy countries is long-term insolvency.](https://sms4smile.com/quotes/paul-singer/what-you-have-in-legacy-countries-is-long-term-insolvency/) [Paul Singer](https://sms4smile.com/quotes/author/paul-singer/) > [We have now an American political party and a European one. Not all Americans who vote for the European party want to become Europeans.…](https://sms4smile.com/quotes/harvey-mansfield/we-have-now-an-american-political-party-and-a-european-one-not-all/) [Harvey Mansfield](https://sms4smile.com/quotes/author/harvey-mansfield/) > [While it may be difficult to understand why cities and even entire states would doom themselves to insolvency by undertaking these obligations, the answer…](https://sms4smile.com/quotes/devin-nunes/while-it-may-be-difficult-to-understand-why-cities-and-even-entire/) [Devin Nunes](https://sms4smile.com/quotes/author/devin-nunes/) > [Canadians no longer have any financial room. Half of Canadians are $200 away from insolvency. They are facing a slowing economy with a diminishing…](https://sms4smile.com/quotes/pierre-poilievre/canadians-no-longer-have-any-financial-room-half-of-canadians-are-200/) [Pierre Poilievre](https://sms4smile.com/quotes/author/pierre-poilievre/) > [Social Security and Medicare are necessary safety nets, but they are nearing insolvency as fewer pay in, more take out, and more take out…](https://sms4smile.com/quotes/mark-mckinnon/social-security-and-medicare-are-necessary-safety-nets-but-they-are/) [Mark McKinnon](https://sms4smile.com/quotes/author/mark-mckinnon/) > [No one can reasonably deny that Medicare is headed for insolvency, and that Medicare's insolvency, if not rectified, will lead to the federal government's…](https://sms4smile.com/quotes/david-limbaugh/no-one-can-reasonably-deny-that-medicare-is-headed-for-insolvency-and/) [David Limbaugh](https://sms4smile.com/quotes/author/david-limbaugh/) > [We have been in recess since July, and during that time there has been a fuel crisis, a Danish no vote, the collapse of…](https://sms4smile.com/quotes/tony-benn/we-have-been-in-recess-since-july-and-during-that-time-there-has-been/) [Tony Benn](https://sms4smile.com/quotes/author/tony-benn/) > [Breach of promise is no less an act of insolvency than a refusal to pay one's debt.](https://sms4smile.com/quotes/mahatma-gandhi/breach-of-promise-is-no-less-an-act-of-insolvency-than-a-refusal-to/) [Mahatma Gandhi](https://sms4smile.com/quotes/author/mahatma-gandhi/) ## More by Yanis Varoufakis > [“Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never…](https://sms4smile.com/quotes/yanis-varoufakis/forcing-new-loans-upon-the-bankrupt-on-condition-that-they-shrink/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Larry Summers is one such rare insider. His question to me was in fact an invocation to reject the lure of the outside. Underpinning…](https://sms4smile.com/quotes/yanis-varoufakis/larry-summers-is-one-such-rare-insider-his-question-to-me-was-in-fact/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [The many refugees are not a Greek or German problem. They are a European problem. We should therefore develop a common strategy. That's why…](https://sms4smile.com/quotes/yanis-varoufakis/the-many-refugees-are-not-a-greek-or-german-problem-they-are-a/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“If you cannot imagine walking out of a negotiation, you should never enter it. If you cannot fathom the idea of an impasse you…](https://sms4smile.com/quotes/yanis-varoufakis/if-you-cannot-imagine-walking-out-of-a-negotiation-you-should-never/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [Had history been democratic in its ways, there would have been no farming and no indsturial revolution. Both leaps into the future were occasioned…](https://sms4smile.com/quotes/yanis-varoufakis/had-history-been-democratic-in-its-ways-there-would-have-been-no/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [The economic crisis has weakened the EU for years.](https://sms4smile.com/quotes/yanis-varoufakis/the-economic-crisis-has-weakened-the-eu-for-years/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [We will compromise and compromise and compromise but we will never be compromised.](https://sms4smile.com/quotes/yanis-varoufakis/we-will-compromise-and-compromise-and-compromise-but-we-will-never-be/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Beneath the specific events that I experienced, I recognised a universal story – the story of what happens when human beings find themselves at…](https://sms4smile.com/quotes/yanis-varoufakis/beneath-the-specific-events-that-i-experienced-i-recognised-a/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [Germany is Europe's heart. But bitterness is widespread. Currently the Germans hate the Greeks and the Greeks hate the Germans. The demonization of the…](https://sms4smile.com/quotes/yanis-varoufakis/germany-is-europe-s-heart-but-bitterness-is-widespread-currently-the/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [I don't believe a Brexit will hurt the City of London as one of the largest financial centers in the world.](https://sms4smile.com/quotes/yanis-varoufakis/i-don-t-believe-a-brexit-will-hurt-the-city-of-london-as-one-of-the/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Whenever a politician in the know gives a journalist an exclusive in exchange for a particular spin that is in the politician’s interest, the…](https://sms4smile.com/quotes/yanis-varoufakis/whenever-a-politician-in-the-know-gives-a-journalist-an-exclusive-in/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [European Union partners never said European Union partners're going to renege on any promises, European Union partners said that European Union partners promises concern…](https://sms4smile.com/quotes/yanis-varoufakis/european-union-partners-never-said-european-union-partners-re-going/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“When inordinate weight is loaded onto a flimsily constructed bridge, the weakest beam will break first.”](https://sms4smile.com/quotes/yanis-varoufakis/when-inordinate-weight-is-loaded-onto-a-flimsily-constructed-bridge/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Most Europeans like to think that American bankruptocracy is worse than its European cousin, thanks to the power of Wall Street and the infamous…](https://sms4smile.com/quotes/yanis-varoufakis/most-europeans-like-to-think-that-american-bankruptocracy-is-worse/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) > [“Austerity is a morality play pressed into the service of legitimizing cynical wealth transfers from the have-nots to the haves during times of crisis,…](https://sms4smile.com/quotes/yanis-varoufakis/austerity-is-a-morality-play-pressed-into-the-service-of-legitimizing/) [Yanis Varoufakis](https://sms4smile.com/quotes/author/yanis-varoufakis/) [Explore all 63 Yanis Varoufakis quotes ](https://sms4smile.com/quotes/author/yanis-varoufakis/) ## More Insolvency quotes > [Social Security and Medicare are necessary safety nets, but they are nearing insolvency as fewer pay in, more take out, and more take out…](https://sms4smile.com/quotes/mark-mckinnon/social-security-and-medicare-are-necessary-safety-nets-but-they-are/) [Mark McKinnon](https://sms4smile.com/quotes/author/mark-mckinnon/) > [We have been in recess since July, and during that time there has been a fuel crisis, a Danish no vote, the collapse of…](https://sms4smile.com/quotes/tony-benn/we-have-been-in-recess-since-july-and-during-that-time-there-has-been/) [Tony Benn](https://sms4smile.com/quotes/author/tony-benn/) > [Man's Reason is in such deep insolvency to sense,that tho' she guide his highest flight heav'nward, and teach himdignity morals manners and human comfort,she…](https://sms4smile.com/quotes/robert-bridges/man-s-reason-is-in-such-deep-insolvency-to-sense-that-tho-she-guide/) [Robert Bridges](https://sms4smile.com/quotes/author/robert-bridges/) > [No one can reasonably deny that Medicare is headed for insolvency, and that Medicare's insolvency, if not rectified, will lead to the federal government's…](https://sms4smile.com/quotes/david-limbaugh/no-one-can-reasonably-deny-that-medicare-is-headed-for-insolvency-and/) [David Limbaugh](https://sms4smile.com/quotes/author/david-limbaugh/) > [Breach of promise is no less an act of insolvency than a refusal to pay one's debt.](https://sms4smile.com/quotes/mahatma-gandhi/breach-of-promise-is-no-less-an-act-of-insolvency-than-a-refusal-to/) [Mahatma Gandhi](https://sms4smile.com/quotes/author/mahatma-gandhi/) > [Canadians no longer have any financial room. Half of Canadians are $200 away from insolvency. They are facing a slowing economy with a diminishing…](https://sms4smile.com/quotes/pierre-poilievre/canadians-no-longer-have-any-financial-room-half-of-canadians-are-200/) [Pierre Poilievre](https://sms4smile.com/quotes/author/pierre-poilievre/) > [While it may be difficult to understand why cities and even entire states would doom themselves to insolvency by undertaking these obligations, the answer…](https://sms4smile.com/quotes/devin-nunes/while-it-may-be-difficult-to-understand-why-cities-and-even-entire/) [Devin Nunes](https://sms4smile.com/quotes/author/devin-nunes/) > [We have now an American political party and a European one. Not all Americans who vote for the European party want to become Europeans.…](https://sms4smile.com/quotes/harvey-mansfield/we-have-now-an-american-political-party-and-a-european-one-not-all/) [Harvey Mansfield](https://sms4smile.com/quotes/author/harvey-mansfield/) > [What you have in legacy countries is long-term insolvency.](https://sms4smile.com/quotes/paul-singer/what-you-have-in-legacy-countries-is-long-term-insolvency/) [Paul Singer](https://sms4smile.com/quotes/author/paul-singer/) > [The entitlement state has driven us into insolvency.](https://sms4smile.com/quotes/joe-miller/the-entitlement-state-has-driven-us-into-insolvency/) [Joe Miller](https://sms4smile.com/quotes/author/joe-miller/) > [The worst bankruptcy in the world is the person who has lost his enthusiasm.](https://sms4smile.com/quotes/william-howard-arnold/the-worst-bankruptcy-in-the-world-is-the-person-who-has-lost-his/) [William Howard Arnold](https://sms4smile.com/quotes/author/william-howard-arnold/) > [The dearth of business activity on the traditional day of rest makes Sunday an ideal time to declare insolvency. Bankruptcy petitions are time-stamped to…](https://sms4smile.com/quotes/brendan-i-koerner/the-dearth-of-business-activity-on-the-traditional-day-of-rest-makes/) [Brendan I. Koerner](https://sms4smile.com/quotes/author/brendan-i-koerner/) > [“It was evident from the general tone of the whole party, that they had come to regard insolvency as the normal state of mankind,…](https://sms4smile.com/quotes/charles-dickens/it-was-evident-from-the-general-tone-of-the-whole-party-that-they-had/) [Charles Dickens](https://sms4smile.com/quotes/author/charles-dickens/) > [Amnesty will not help balance our budget ... In fact, a large-scale amnesty is likely to add trillions of dollars to the debt over…](https://sms4smile.com/quotes/jeff-sessions/amnesty-will-not-help-balance-our-budget-in-fact-a-large-scale/) [Jeff Sessions](https://sms4smile.com/quotes/author/jeff-sessions/) > [“When certain circumstances of the body tend to happen, the time for insolvency begins. Everything indeed is going to go into insolvency. Therefore You…](https://sms4smile.com/quotes/dada-bhagwan/when-certain-circumstances-of-the-body-tend-to-happen-the-time-for/) [Dada Bhagwan](https://sms4smile.com/quotes/author/dada-bhagwan/) [Browse all 18 Insolvency quotes ](https://sms4smile.com/quotes/about/insolvency/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "“Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad? 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