Recent movements such as the Tea Party and anti-tax “constitutional conservatism” lay claim to the finance and taxation ideas of America’s founders, but how much do we really know about the dramatic clashes over finance and economics that marked the founding of America? Dissenting from both right-wing claims and certain liberal preconceptions, Founding Finance brings to life the violent conflicts over economics, class, and finance that played directly, and in many ways ironically, into the hardball politics of forming the nation and ratifying the Constitution—conflicts that still continue to affect our politics, legislation, and debate today.

Mixing lively narrative with fresh views of America’s founders, William Hogeland offers a new perspective on America’s economic infancy: foreclosure crises that make our current one look mild; investment bubbles in land and securities that drove rich men to high-risk borrowing and mad displays of ostentation before dropping them into debtors’ prisons; depressions longer and deeper than the great one of the twentieth century; crony mercantilism, war profiteering, and government corruption that undermine any nostalgia for a virtuous early republic; and predatory lending of scarce cash at exorbitant, unregulated rates, which forced people into bankruptcy, landlessness, and working in the factories and on the commercial farms of their creditors. This story exposes and corrects a perpetual historical denial—by movements across the political spectrum—of America’s all-important founding economic clashes, a denial that weakens and cheapens public discourse on American finance just when we need it most.

Conventional wisdom holds that all nations must repay debt. Regardless of the legitimacy of the regime that signs the contract, a country that fails to honor its loan obligations damages its reputation, inviting still greater problems down the road. Yet difficult dilemmas arise from this assumption. Should today's South Africa be responsible for apartheid-era debt? Is it reasonable to tether postwar Iraq with Saddam Hussein's excesses?

Rethinking Sovereign Debt is a probing historical analysis of how sovereign debt continuity--the rule that nations should repay loans even after a major regime change, or expect reputational consequences--became the consensus approach. Odette Lienau contends that the practice is not essential for functioning international capital markets, and demonstrates how it relies on ideas of absolutist government that have come under fire over the last century. Challenging previous accounts, Lienau incorporates a wealth of original research to argue that Soviet Russia's repudiation of Tsarist debt and Great Britain's 1923 arbitration with Costa Rica hint at the feasibility of selective debt cancellation. She traces the notion of debt continuity from the post-World War I era to the present, emphasizing the role of government officials, the World Bank, and private-market actors in shaping our existing framework.

Lienau calls on scholars and policymakers to recognize political choice and historical precedent in sovereign debt and reputation, in order to move beyond an impasse when a government is overthrown.