Working for Debt - by Simon Bittmann

About the Book

""Credit has always been at the center of American capitalism, but it underwent a major shift in the late nineteenth century. Along with the industrial and bureaucratic transitions, for the first time more and more workers used their future labor income as collateral to build debt, however small their wages. Networks of companies made a profit out of payday advances, relying on wage assignments and garnishments to mitigate the risk associated with default. Far from a marginal or underground economy, salary lending became a major source of credit for workers all over the country, from African-American washerwomen to white foremen, from Illinois roomers to Georgia railroad men. Together they became a republic of indebted wage-earners at the heart of the contemporary economy. But for Progressive reformers, these transactions threatened to revive a form of "wage slavery" reminiscent of a dark but recent past. In thriving to eradicate the "loan shark evil," they relied on strong moral assumptions about the needs faced by the working class, seeking in short to protect the white breadwinner from unfair extortion. These efforts paved the way for a takeover by commercial banks in the 1930s and 1940s: as modern consumer credit replaced old-world usury, these new actors profited from a set of federal policies to further associate legitimate borrowing with temporary budget needs faced by middle-class households. Loan Sharks uncovers the economic and social logics lying beneath our wage-based credit system. Building on unexplored corporate and judicial records and progressive reformers' archives, it studies working-class history and politics through the lens of credit market segmentation. From early twentieth-century anti-usury crusades to the first credit programs of the New Deal, this books shows how these movements legitimized moralistic endeavors at the expense of economic realities-ultimately dividing the credit market based on the borrower's class, race, and gender.""--

Book Synopsis

In the early twentieth century, wage loans became a major source of cash for workers all over the United States. From Black washerwomen to white foremen, Illinois roomers to Georgia railroad men, workers turned to labor income as collateral for borrowing capital. Networks of companies started profiting from payday and property advances, exposing debtors to the grim prospects of garnishments of their wages and possessions in order to mitigate the risk of default. Progressive and later New Deal reformers sought to eradicate these practices, denouncing "loan sharks" and "financial slavery" as major threats to a new credit democracy. They proposed fair credit as a universal solution to move past industrial poverty and boost consumer freedom--but in doing so, reformers, lenders, and bankers limited credit access to the white middle-class constituencies seen as worthy of protection against extortion.

Working for Debt explores how the fight against wage loans divided the American credit market along class, race, and gender lines. Simon Bittmann argues that the moral and political crusades of Progressive Era reformers helped create the exclusionary credit markets that favored white male breadwinners. The politics of credit expansion served to obscure the failures of U.S. capitalism, using the "loan shark" as a scapegoat for larger, deeper depredations. As credit became a core feature of U.S. capitalism, the association of legitimate borrowing with white middle-class households and the financial exclusion of others was entrenched. Blending economic sociology with business, labor, and social history, this book shows how social stratification shaped credit markets, with enduring consequences for class, race, and gender inequalities.

Review Quotes

Bittmann's rigorous, deeply insightful account argues that moral crusades against the loan shark "evil" hid an uncomfortable reality - many Americans could not earn enough to survive the merciless demands of capitalism - and illustrates how efforts to stamp out predatory lending ultimately produced new forms of racial inequality and economic stratification that persist to this day.--Josh Lauer, University of New Hampshire

A fascinating social history of wage credit and a powerful contribution to the expanding sociological study of exploitation.--Christopher Muller, Harvard University

About the Author

Simon Bittmann is a tenured researcher in sociology at the Centre national de la recherche scientifique and the University of Strasbourg.