Louis Hyman
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691140681
- eISBN:
- 9781400838400
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691140681.003.0007
- Subject:
- History, American History: 20th Century
This chapter discusses credit access. By the 1960s, credit access was deemed to be unequivocally beneficial. Credit use, far from marking one as immoral or unthrifty as it might have in the 1910s, ...
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This chapter discusses credit access. By the 1960s, credit access was deemed to be unequivocally beneficial. Credit use, far from marking one as immoral or unthrifty as it might have in the 1910s, denoted high social status and personal responsibility. In the 1960s, those without credit agitated for more “fair” or “equal” access. By the end of the decade, as access to credit became a social marker of independence and prosperity, various credit activists for women and people of color demanded access to credit. As such, congress passed laws to guarantee impartial access to credit. At the same time, these laws legitimated practices that would have seemed usurious two generations earlier. By the 1970s, consumer credit—legitimated as fair through federal policy—grew to an unprecedented volume and creditors extended it to all Americans with uncertain consequences for the country's economic future.Less
This chapter discusses credit access. By the 1960s, credit access was deemed to be unequivocally beneficial. Credit use, far from marking one as immoral or unthrifty as it might have in the 1910s, denoted high social status and personal responsibility. In the 1960s, those without credit agitated for more “fair” or “equal” access. By the end of the decade, as access to credit became a social marker of independence and prosperity, various credit activists for women and people of color demanded access to credit. As such, congress passed laws to guarantee impartial access to credit. At the same time, these laws legitimated practices that would have seemed usurious two generations earlier. By the 1970s, consumer credit—legitimated as fair through federal policy—grew to an unprecedented volume and creditors extended it to all Americans with uncertain consequences for the country's economic future.
Louis Hyman
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691140681
- eISBN:
- 9781400838400
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691140681.003.0005
- Subject:
- History, American History: 20th Century
This chapter looks at a federal policy called Regulation W. As the federal government attempted to restrain inflation during World War II scarcity, it instituted both the well-known rationing program ...
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This chapter looks at a federal policy called Regulation W. As the federal government attempted to restrain inflation during World War II scarcity, it instituted both the well-known rationing program for many consumer goods, and launched the now forgotten first federal attempt to directly regulate consumer credit. With Regulation W, Roosevelt authorized the Federal Reserve to directly regulate how much consumers could borrow and the terms under which this borrowing could occur. While Regulation W reduced the overall amount of consumer debt during the war, it also destabilized established lending practices and encouraged a hybridization of installment credit and charge accounts that combined interest charges and flexibility in a form outside Regulation W. In effect, from the beginning of World War II until the Korean War, Regulation W deeply shaped the course of credit practices in the American economy, pushing retailers and consumers towards revolving credit—the nucleus of today's modern credit card.Less
This chapter looks at a federal policy called Regulation W. As the federal government attempted to restrain inflation during World War II scarcity, it instituted both the well-known rationing program for many consumer goods, and launched the now forgotten first federal attempt to directly regulate consumer credit. With Regulation W, Roosevelt authorized the Federal Reserve to directly regulate how much consumers could borrow and the terms under which this borrowing could occur. While Regulation W reduced the overall amount of consumer debt during the war, it also destabilized established lending practices and encouraged a hybridization of installment credit and charge accounts that combined interest charges and flexibility in a form outside Regulation W. In effect, from the beginning of World War II until the Korean War, Regulation W deeply shaped the course of credit practices in the American economy, pushing retailers and consumers towards revolving credit—the nucleus of today's modern credit card.
Louis Hyman
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691140681
- eISBN:
- 9781400838400
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691140681.003.0006
- Subject:
- History, American History: 20th Century
This chapter examines postwar consumer credit. Many in the postwar United States achieved a material prosperity that, in debt's absence, they could not have attained. Indeed, this postwar prosperity ...
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This chapter examines postwar consumer credit. Many in the postwar United States achieved a material prosperity that, in debt's absence, they could not have attained. Indeed, this postwar prosperity enabled suburbanites with good incomes to live as well as their perhaps wealthier neighborhoods, even if they had little savings. However, this equality of consumption reinforced inequalities of wealth. While the amount loaned grew tremendously in the postwar period, the growth rate for outstanding debt remained relatively flat. Borrowing remained a viable strategy, not only because of rising incomes, but also because all consumer credit remained tax deductible. In such a favorable climate for borrowing, Americans borrowed their way to prosperity.Less
This chapter examines postwar consumer credit. Many in the postwar United States achieved a material prosperity that, in debt's absence, they could not have attained. Indeed, this postwar prosperity enabled suburbanites with good incomes to live as well as their perhaps wealthier neighborhoods, even if they had little savings. However, this equality of consumption reinforced inequalities of wealth. While the amount loaned grew tremendously in the postwar period, the growth rate for outstanding debt remained relatively flat. Borrowing remained a viable strategy, not only because of rising incomes, but also because all consumer credit remained tax deductible. In such a favorable climate for borrowing, Americans borrowed their way to prosperity.
Paul Langley
- Published in print:
- 2009
- Published Online:
- September 2009
- ISBN:
- 9780199557431
- eISBN:
- 9780191721687
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199557431.003.0013
- Subject:
- Business and Management, Political Economy, Finance, Accounting, and Banking
This chapter examines the embodied economy of mass market consumer credit, an area of economic activity that ballooned at the same time as the housing market. Drawing on governmentality literature, ...
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This chapter examines the embodied economy of mass market consumer credit, an area of economic activity that ballooned at the same time as the housing market. Drawing on governmentality literature, it examines the ways in which the responsibilities of borrowers for outstanding credit obligations have been transformed in the booming mass market for credit cards, such that individual borrower subjects come to perform entrepreneurial self-disciplines that extend well-beyond simply meeting repayments. The chapter emphasizes the intersection of the legal and extra-legal in the punishment of debtors, and how risk calculations in credit scoring can be understood as a technology of government. It offers reflections on the tensions and contradictions that are lived by individual credit card holders as the crisis unfolds, specifically arguing that self-disciplines of risk management fall short of completely containing the complexities and inherent uncertainty in economic life, such as precarious labour markets.Less
This chapter examines the embodied economy of mass market consumer credit, an area of economic activity that ballooned at the same time as the housing market. Drawing on governmentality literature, it examines the ways in which the responsibilities of borrowers for outstanding credit obligations have been transformed in the booming mass market for credit cards, such that individual borrower subjects come to perform entrepreneurial self-disciplines that extend well-beyond simply meeting repayments. The chapter emphasizes the intersection of the legal and extra-legal in the punishment of debtors, and how risk calculations in credit scoring can be understood as a technology of government. It offers reflections on the tensions and contradictions that are lived by individual credit card holders as the crisis unfolds, specifically arguing that self-disciplines of risk management fall short of completely containing the complexities and inherent uncertainty in economic life, such as precarious labour markets.
James B. Rule
- Published in print:
- 2009
- Published Online:
- May 2012
- ISBN:
- 9780195307832
- eISBN:
- 9780199944040
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195307832.003.0003
- Subject:
- Sociology, Law, Crime and Deviance
This chapter studies surveillance in people's financial affairs and in the world of markets and profit-making. The discussion focuses on the marketing of personal data in three domains, namely direct ...
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This chapter studies surveillance in people's financial affairs and in the world of markets and profit-making. The discussion focuses on the marketing of personal data in three domains, namely direct advertising, consumer credit, and insurance. This chapter determines that citizens can and do choose greater control over their information when faced with clear alternatives.Less
This chapter studies surveillance in people's financial affairs and in the world of markets and profit-making. The discussion focuses on the marketing of personal data in three domains, namely direct advertising, consumer credit, and insurance. This chapter determines that citizens can and do choose greater control over their information when faced with clear alternatives.
Coopey Richard, Sean O‘Connell, and Dilwyn Porter
- Published in print:
- 2005
- Published Online:
- September 2007
- ISBN:
- 9780198296508
- eISBN:
- 9780191716638
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296508.003.0004
- Subject:
- Business and Management, Business History
This chapter explores the role of the spare-time agent, from the watch club organizer of the late 19th century through to the working housewife and mother a century later. By the end of the 1930s, ...
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This chapter explores the role of the spare-time agent, from the watch club organizer of the late 19th century through to the working housewife and mother a century later. By the end of the 1930s, mail order retailing had begun to deal directly with the women who held the purse strings in working-class families. Agency mail order only became a significant retail phenomenon when it tapped into the rhythms of working-class women's lives. This was made possible by the creation of systems that allowed for simple credit transactions, founded upon the payment of small weekly sums out of the limited disposable income available in the majority of early 20th-century households. Equally important, the catalogues and payments were administrated by family, friends, or neighbours, who were approachable and understood both the needs and credit limitations of their customers.Less
This chapter explores the role of the spare-time agent, from the watch club organizer of the late 19th century through to the working housewife and mother a century later. By the end of the 1930s, mail order retailing had begun to deal directly with the women who held the purse strings in working-class families. Agency mail order only became a significant retail phenomenon when it tapped into the rhythms of working-class women's lives. This was made possible by the creation of systems that allowed for simple credit transactions, founded upon the payment of small weekly sums out of the limited disposable income available in the majority of early 20th-century households. Equally important, the catalogues and payments were administrated by family, friends, or neighbours, who were approachable and understood both the needs and credit limitations of their customers.
Lendol Calder
- Published in print:
- 2011
- Published Online:
- May 2012
- ISBN:
- 9780199769063
- eISBN:
- 9780199896851
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199769063.003.0013
- Subject:
- Sociology, Economic Sociology
This chapter deals with the transformation of credit across the late 19th and early 20th centuries. First, it considers the notion that credit is an essentially modern invention by detailing the ...
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This chapter deals with the transformation of credit across the late 19th and early 20th centuries. First, it considers the notion that credit is an essentially modern invention by detailing the history of informal modes of credit (like the tab at the country store) that existed long before the 20th century. Next, it shows how the 20th century saw a proliferation of novel forms of consumer credit, not least the diffusion of the installment plan. It argues that the new forms of credit fostered a new form of penny-pinching, or thrift. To be sure, the discipline of allotting money carefully so that one can afford to make all the monthly payments that accrue in the modern credit era not only reinstitutes thrift but recalibrates it to the patterns of mass consumption in the process. But, again, such transformation of thrift comes with a price: the credit may be easy, but the discipline of monthly interest payments is “hard”.Less
This chapter deals with the transformation of credit across the late 19th and early 20th centuries. First, it considers the notion that credit is an essentially modern invention by detailing the history of informal modes of credit (like the tab at the country store) that existed long before the 20th century. Next, it shows how the 20th century saw a proliferation of novel forms of consumer credit, not least the diffusion of the installment plan. It argues that the new forms of credit fostered a new form of penny-pinching, or thrift. To be sure, the discipline of allotting money carefully so that one can afford to make all the monthly payments that accrue in the modern credit era not only reinstitutes thrift but recalibrates it to the patterns of mass consumption in the process. But, again, such transformation of thrift comes with a price: the credit may be easy, but the discipline of monthly interest payments is “hard”.
Paul Langley
- Published in print:
- 2008
- Published Online:
- September 2008
- ISBN:
- 9780199236596
- eISBN:
- 9780191717079
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199236596.003.0007
- Subject:
- Economics and Finance, Financial Economics
This chapter focuses on the boom in everyday borrowing and the qualitative transformations in consumer credit and mortgage networks that have made it possible. This boom is situated in the two ...
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This chapter focuses on the boom in everyday borrowing and the qualitative transformations in consumer credit and mortgage networks that have made it possible. This boom is situated in the two principal sets of market networks of Anglo-American everyday borrowing — consumer credit and mortgage networks. It is argued that it is only through qualitative transformations in these networks, which include the forging of close relationships with the capital markets of ‘global finance’, that the boom has been made possible. The chapter also calls attention to the close interconnections that have become consolidated between mortgage and consumer credit networks, on the one hand, and the networks of the capital markets, on the other. It argues that the overlapping and intersecting of previously disconnected and detached networks has materialized through new calculative devices and performances which rationally figure and manage the uncertainties of future repayments by everyday borrowers as ‘default risks’. Particular attention is paid to the default risk management techniques of lenders — especially asset-backed securitization, but also so-called ‘structured finance’ and the use of credit derivatives — that turn on the issue and trading of default risk-related instruments in the capital markets.Less
This chapter focuses on the boom in everyday borrowing and the qualitative transformations in consumer credit and mortgage networks that have made it possible. This boom is situated in the two principal sets of market networks of Anglo-American everyday borrowing — consumer credit and mortgage networks. It is argued that it is only through qualitative transformations in these networks, which include the forging of close relationships with the capital markets of ‘global finance’, that the boom has been made possible. The chapter also calls attention to the close interconnections that have become consolidated between mortgage and consumer credit networks, on the one hand, and the networks of the capital markets, on the other. It argues that the overlapping and intersecting of previously disconnected and detached networks has materialized through new calculative devices and performances which rationally figure and manage the uncertainties of future repayments by everyday borrowers as ‘default risks’. Particular attention is paid to the default risk management techniques of lenders — especially asset-backed securitization, but also so-called ‘structured finance’ and the use of credit derivatives — that turn on the issue and trading of default risk-related instruments in the capital markets.
Coopey Richard, Sean O‘Connell, and Dilwyn Porter
- Published in print:
- 2005
- Published Online:
- September 2007
- ISBN:
- 9780198296508
- eISBN:
- 9780191716638
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296508.003.0005
- Subject:
- Business and Management, Business History
This chapter discusses the importance of the relationship between mail order and ‘free’ consumer credit. British mail order houses helped their customers finance their purchases by allowing them ...
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This chapter discusses the importance of the relationship between mail order and ‘free’ consumer credit. British mail order houses helped their customers finance their purchases by allowing them credit, usually for a period of twenty weeks, but for up to thirty-eight weeks on some more expensive catalogue items. There was no charge to the customer for this service, the cost to the company being bundled in with the price. Here was a second feature that helped to define British mail order retailing, where installment credit sales accounted for over 80% in value of total sales in the mid-1970s.Less
This chapter discusses the importance of the relationship between mail order and ‘free’ consumer credit. British mail order houses helped their customers finance their purchases by allowing them credit, usually for a period of twenty weeks, but for up to thirty-eight weeks on some more expensive catalogue items. There was no charge to the customer for this service, the cost to the company being bundled in with the price. Here was a second feature that helped to define British mail order retailing, where installment credit sales accounted for over 80% in value of total sales in the mid-1970s.
Thomas A. Durkin, Gregory Elliehausen, Michael E. Staten, and Todd J. Zywicki
- Published in print:
- 2014
- Published Online:
- August 2014
- ISBN:
- 9780195169928
- eISBN:
- 9780199384976
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195169928.003.0001
- Subject:
- Economics and Finance, Microeconomics
The term consumer credit refers to all kinds of credit employed by individuals that are not collateralized by real estate or financial assets such as stocks and bonds and not used for business ...
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The term consumer credit refers to all kinds of credit employed by individuals that are not collateralized by real estate or financial assets such as stocks and bonds and not used for business purposes. It includes installment credit for automobiles, home repair and modernization, appliances, education, large recreational items, and revolving credit on credit cards. There are many ways to classify consumer credit into categories, including use, method of generation (direct and indirect closed-end credit, noninstallment credit, and open-end credit), and kind of financial institution generating the loan (depository institutions, finance companies, credit unions, others). This chapter provides historical background, classifies in various ways the kinds of consumer credit found in the marketplace today, and introduces their uses and users. It briefly introduces the concepts of credit demand, supply, and regulation that underlie the structure of the book and previews the book structure and chapters that follow.Less
The term consumer credit refers to all kinds of credit employed by individuals that are not collateralized by real estate or financial assets such as stocks and bonds and not used for business purposes. It includes installment credit for automobiles, home repair and modernization, appliances, education, large recreational items, and revolving credit on credit cards. There are many ways to classify consumer credit into categories, including use, method of generation (direct and indirect closed-end credit, noninstallment credit, and open-end credit), and kind of financial institution generating the loan (depository institutions, finance companies, credit unions, others). This chapter provides historical background, classifies in various ways the kinds of consumer credit found in the marketplace today, and introduces their uses and users. It briefly introduces the concepts of credit demand, supply, and regulation that underlie the structure of the book and previews the book structure and chapters that follow.
Michael Lobban
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199258826
- eISBN:
- 9780191705168
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199258826.003.0019
- Subject:
- Law, Legal History
This chapter on consumer credit and debt in the 19th century covers imprisonment for debt, the poor man's bankruptcy, pawnbroking, money lenders, and the purchase of goods through hire purchase ...
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This chapter on consumer credit and debt in the 19th century covers imprisonment for debt, the poor man's bankruptcy, pawnbroking, money lenders, and the purchase of goods through hire purchase agreements.Less
This chapter on consumer credit and debt in the 19th century covers imprisonment for debt, the poor man's bankruptcy, pawnbroking, money lenders, and the purchase of goods through hire purchase agreements.
Thomas A. Durkin, Gregory Elliehausen, Michael E. Staten, and Todd J. Zywicki
- Published in print:
- 2014
- Published Online:
- August 2014
- ISBN:
- 9780195169928
- eISBN:
- 9780199384976
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195169928.001.0001
- Subject:
- Economics and Finance, Microeconomics
Chapters 1 to 5 discuss types, trends, and basic economics and psychology of consumer credit use, including credit demand, credit supply, theories from behavioral economics, and financial ...
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Chapters 1 to 5 discuss types, trends, and basic economics and psychology of consumer credit use, including credit demand, credit supply, theories from behavioral economics, and financial intermediation. Chapters 3 and 4 focus on how credit use can be productive for individuals (that is, wealth-increasing when there is a positive net present value to the transaction) and how it can change the timing of consumption to a preferred pattern. Individuals intuitively realize this, and survey evidence suggests that most uses of consumer credit involve productive purposes. Some uses of consumer credit may on occasion be less productive, even to the point of involving some sort of underlying irrational decision making, but irrationality is by no means the expectation or the norm. Chapters 5 to 8 then examine in considerable detail the credit production process known as financial intermediation. These chapters review how the development of consumer credit and its institutions reflect ongoing attempts to reduce the cost of the production process leading to technological change, evident in credit scoring, credit bureaus, and credit cards. Chapter 8 looks closely at specialized credit products sometimes known as fringe products. Chapters 9 to 13 examine the nature and effects of federal and state regulation of consumer credit. Chapter 12 includes ancillary products such as debt protection, including credit insurance, and a credit substitute in the form of automobile leasing. Chapter 13 examines what happens when things go seriously wrong, the domain of credit counseling and the consumer bankruptcy system. Chapter 14 provides a conclusion.Less
Chapters 1 to 5 discuss types, trends, and basic economics and psychology of consumer credit use, including credit demand, credit supply, theories from behavioral economics, and financial intermediation. Chapters 3 and 4 focus on how credit use can be productive for individuals (that is, wealth-increasing when there is a positive net present value to the transaction) and how it can change the timing of consumption to a preferred pattern. Individuals intuitively realize this, and survey evidence suggests that most uses of consumer credit involve productive purposes. Some uses of consumer credit may on occasion be less productive, even to the point of involving some sort of underlying irrational decision making, but irrationality is by no means the expectation or the norm. Chapters 5 to 8 then examine in considerable detail the credit production process known as financial intermediation. These chapters review how the development of consumer credit and its institutions reflect ongoing attempts to reduce the cost of the production process leading to technological change, evident in credit scoring, credit bureaus, and credit cards. Chapter 8 looks closely at specialized credit products sometimes known as fringe products. Chapters 9 to 13 examine the nature and effects of federal and state regulation of consumer credit. Chapter 12 includes ancillary products such as debt protection, including credit insurance, and a credit substitute in the form of automobile leasing. Chapter 13 examines what happens when things go seriously wrong, the domain of credit counseling and the consumer bankruptcy system. Chapter 14 provides a conclusion.
Mary Eschelbach Hansen
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780226261621
- eISBN:
- 9780226261768
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226261768.003.0006
- Subject:
- Economics and Finance, Economic History
This chapter exploits newly-collected, highly-detailed data on sources of credit drawn from documents filed by a sample of petitioners for bankruptcy in Mississippi in the 1930s. The bankruptcy ...
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This chapter exploits newly-collected, highly-detailed data on sources of credit drawn from documents filed by a sample of petitioners for bankruptcy in Mississippi in the 1930s. The bankruptcy documents reveal that long-distance credit networks were extensive during this period despite the disruption of the Great Depression. Credit networks were dominated by trade credit, particularly book credit that was extended from business to business. At this time, the bank-to-business lending channels that are common today were only beginning to develop. Manufacturers had both fewer long-distance creditors and fewer financial intermediaries as creditors than either merchants or farmers. However, when a bank did lend to a business, the bank’s share of total debt was large, foreshadowing more modern patterns. New sources of consumer credit issued by traditional financial institutions and new small-loan lenders, surprisingly, were available even in the relatively under-developed Deep South.Less
This chapter exploits newly-collected, highly-detailed data on sources of credit drawn from documents filed by a sample of petitioners for bankruptcy in Mississippi in the 1930s. The bankruptcy documents reveal that long-distance credit networks were extensive during this period despite the disruption of the Great Depression. Credit networks were dominated by trade credit, particularly book credit that was extended from business to business. At this time, the bank-to-business lending channels that are common today were only beginning to develop. Manufacturers had both fewer long-distance creditors and fewer financial intermediaries as creditors than either merchants or farmers. However, when a bank did lend to a business, the bank’s share of total debt was large, foreshadowing more modern patterns. New sources of consumer credit issued by traditional financial institutions and new small-loan lenders, surprisingly, were available even in the relatively under-developed Deep South.
- Published in print:
- 2013
- Published Online:
- June 2013
- ISBN:
- 9780804781510
- eISBN:
- 9780804784573
- Item type:
- chapter
- Publisher:
- Stanford University Press
- DOI:
- 10.11126/stanford/9780804781510.003.0005
- Subject:
- History, Latin American History
This chapter examines the effects of inflation, which began increasing significantly and erratically in the early 1970s. It documents a changing economic relationship between the middle classes and ...
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This chapter examines the effects of inflation, which began increasing significantly and erratically in the early 1970s. It documents a changing economic relationship between the middle classes and the Institutional Revolutionary Party (Partido Revolucionario Institucional, PRI), focusing on consumer credit, consumer rights, and taxation.Less
This chapter examines the effects of inflation, which began increasing significantly and erratically in the early 1970s. It documents a changing economic relationship between the middle classes and the Institutional Revolutionary Party (Partido Revolucionario Institucional, PRI), focusing on consumer credit, consumer rights, and taxation.
Louis Hyman
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691140681
- eISBN:
- 9781400838400
- Item type:
- book
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691140681.001.0001
- Subject:
- History, American History: 20th Century
Before the twentieth century, personal debt resided on the fringes of the American economy, the province of small-time criminals and struggling merchants. By the end of the century, however, the most ...
More
Before the twentieth century, personal debt resided on the fringes of the American economy, the province of small-time criminals and struggling merchants. By the end of the century, however, the most profitable corporations and banks in the country lent money to millions of American debtors. How did this happen? This, the first book to follow the history of personal debt in modern America, traces the evolution of debt over the course of the twentieth century, following its transformation from fringe to mainstream—thanks to federal policy, financial innovation, and retail competition. How did banks begin making personal loans to consumers during the Great Depression? Why did the government invent mortgage-backed securities? Why was all consumer credit, not just mortgages, tax deductible until 1986? Who invented the credit card? Examining the intersection of government and business in everyday life, the book takes the reader behind the scenes of the institutions that made modern lending possible: the halls of Congress, the boardrooms of multinationals, and the back rooms of loan sharks. America's newfound indebtedness resulted not from a culture in decline, but from changes in the larger structure of American capitalism that were created, in part, by the choices of the powerful—choices that made lending money to facilitate consumption more profitable than lending to invest in expanded production. From the origins of car financing to the creation of subprime lending, the book presents a nuanced history of consumer credit practices in the United States and shows how little loans became big business.Less
Before the twentieth century, personal debt resided on the fringes of the American economy, the province of small-time criminals and struggling merchants. By the end of the century, however, the most profitable corporations and banks in the country lent money to millions of American debtors. How did this happen? This, the first book to follow the history of personal debt in modern America, traces the evolution of debt over the course of the twentieth century, following its transformation from fringe to mainstream—thanks to federal policy, financial innovation, and retail competition. How did banks begin making personal loans to consumers during the Great Depression? Why did the government invent mortgage-backed securities? Why was all consumer credit, not just mortgages, tax deductible until 1986? Who invented the credit card? Examining the intersection of government and business in everyday life, the book takes the reader behind the scenes of the institutions that made modern lending possible: the halls of Congress, the boardrooms of multinationals, and the back rooms of loan sharks. America's newfound indebtedness resulted not from a culture in decline, but from changes in the larger structure of American capitalism that were created, in part, by the choices of the powerful—choices that made lending money to facilitate consumption more profitable than lending to invest in expanded production. From the origins of car financing to the creation of subprime lending, the book presents a nuanced history of consumer credit practices in the United States and shows how little loans became big business.
Philip T. Hoffman, Gilles Postel-Vinay, and Jean-Laurent Rosenthal
- Published in print:
- 2019
- Published Online:
- May 2019
- ISBN:
- 9780691182179
- eISBN:
- 9780691185057
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691182179.003.0002
- Subject:
- Business and Management, Business History
This chapter looks at the size of the market in 1740 and explores who was involved in it. The stock of notarial debt, even though it excluded nearly all commercial and consumer credit, amounted to ...
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This chapter looks at the size of the market in 1740 and explores who was involved in it. The stock of notarial debt, even though it excluded nearly all commercial and consumer credit, amounted to sixteen percent of GDP in 1740. Although that may at first glance seem paltry, especially when compared to the level of mortgage debt accumulated in some economies on the eve of the 2008 crisis, it is more than what mortgage markets achieve in many developing economies today. This mountain of private, nongovernmental debt raises some serious questions. The chapter addresses this issue by asking how to reconstruct past lending in a society, particularly for credit markets that have long been shrouded from view.Less
This chapter looks at the size of the market in 1740 and explores who was involved in it. The stock of notarial debt, even though it excluded nearly all commercial and consumer credit, amounted to sixteen percent of GDP in 1740. Although that may at first glance seem paltry, especially when compared to the level of mortgage debt accumulated in some economies on the eve of the 2008 crisis, it is more than what mortgage markets achieve in many developing economies today. This mountain of private, nongovernmental debt raises some serious questions. The chapter addresses this issue by asking how to reconstruct past lending in a society, particularly for credit markets that have long been shrouded from view.
Akos Rona-Tas
- Published in print:
- 2012
- Published Online:
- September 2012
- ISBN:
- 9780199895977
- eISBN:
- 9780199980116
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199895977.003.0051
- Subject:
- Political Science, Comparative Politics
This chapter argues that with the retrenchment of the welfare state in Central Europe, just as in more developed Western countries, consumer credit has emerged as an alternative way of redistributing ...
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This chapter argues that with the retrenchment of the welfare state in Central Europe, just as in more developed Western countries, consumer credit has emerged as an alternative way of redistributing income towards the middle class to secure effective demand in domestic consumer markets. It presents a short history of consumer credit in the Czech Republic, Hungary and Poland, and identifies the mechanisms deployed by lenders to overcome the information asymmetry problem in three tiers of the consumer credit market: VIP banking, mass consumer credit and fringe lending. The mechanisms to evaluate loan applicants—identifying, sorting, reputation creation, and quantification—have given rise to new forms of social control and started to reconfigure social relations. Because credit reallocates income from future to present, and not, as the welfare state does, from rich to poor, its redistributive capacity is limited, yet its effect on social structure is growing.Less
This chapter argues that with the retrenchment of the welfare state in Central Europe, just as in more developed Western countries, consumer credit has emerged as an alternative way of redistributing income towards the middle class to secure effective demand in domestic consumer markets. It presents a short history of consumer credit in the Czech Republic, Hungary and Poland, and identifies the mechanisms deployed by lenders to overcome the information asymmetry problem in three tiers of the consumer credit market: VIP banking, mass consumer credit and fringe lending. The mechanisms to evaluate loan applicants—identifying, sorting, reputation creation, and quantification—have given rise to new forms of social control and started to reconfigure social relations. Because credit reallocates income from future to present, and not, as the welfare state does, from rich to poor, its redistributive capacity is limited, yet its effect on social structure is growing.
ANDREW GLYN
- Published in print:
- 2007
- Published Online:
- September 2007
- ISBN:
- 9780199226795
- eISBN:
- 9780191710544
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199226795.003.0003
- Subject:
- Economics and Finance, Economic Systems
This chapter traces shifts in the financial landscape over the past twenty-five years. These include the rise of the financial sector, the consumer credit boom that resulted in a rise in household ...
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This chapter traces shifts in the financial landscape over the past twenty-five years. These include the rise of the financial sector, the consumer credit boom that resulted in a rise in household consumption, the concentration of shareholdings in the hands of financial institutions, the rise of corporate governance, the costs and benefits of the great drive for shareholder value and the US stock market boom, the growth of international finance, and the eventual financial crises.Less
This chapter traces shifts in the financial landscape over the past twenty-five years. These include the rise of the financial sector, the consumer credit boom that resulted in a rise in household consumption, the concentration of shareholdings in the hands of financial institutions, the rise of corporate governance, the costs and benefits of the great drive for shareholder value and the US stock market boom, the growth of international finance, and the eventual financial crises.
Stuart Aveyard, Paul Corthorn, and Sean O’Connell
- Published in print:
- 2018
- Published Online:
- February 2019
- ISBN:
- 9780198732235
- eISBN:
- 9780191796555
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198732235.003.0008
- Subject:
- History, British and Irish Modern History, Economic History
Chapter 7 addresses consumer protection issues from the 1970s onwards. It discusses the increasingly complex connections between mortgage and consumer credit, particularly in terms of second ...
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Chapter 7 addresses consumer protection issues from the 1970s onwards. It discusses the increasingly complex connections between mortgage and consumer credit, particularly in terms of second mortgages. It discusses the consumer credit protection put in place by the Consumer Credit Act. It explains how important decisions taken at that point increased further the UK’s diverse and liberalized consumer credit markets and enabled the survival (and growth) of forms of sub-prime credit that died elsewhere in Europe. The chapter also addresses issues around credit discrimination on the grounds of race and gender. It probes the reaction of consumer groups to the backlash to consumerism and the liberalization of personal finance markets under the Thatcher regime. The chapter also breaks new ground in exploring the impact of Europe, with an exploration of the hostile response that emerged when the European Parliament’s Consumer Directive threatened to curtail the UK’s consumer credit markets.Less
Chapter 7 addresses consumer protection issues from the 1970s onwards. It discusses the increasingly complex connections between mortgage and consumer credit, particularly in terms of second mortgages. It discusses the consumer credit protection put in place by the Consumer Credit Act. It explains how important decisions taken at that point increased further the UK’s diverse and liberalized consumer credit markets and enabled the survival (and growth) of forms of sub-prime credit that died elsewhere in Europe. The chapter also addresses issues around credit discrimination on the grounds of race and gender. It probes the reaction of consumer groups to the backlash to consumerism and the liberalization of personal finance markets under the Thatcher regime. The chapter also breaks new ground in exploring the impact of Europe, with an exploration of the hostile response that emerged when the European Parliament’s Consumer Directive threatened to curtail the UK’s consumer credit markets.
Andrew Gordon
- Published in print:
- 2011
- Published Online:
- May 2012
- ISBN:
- 9780520267855
- eISBN:
- 9780520950313
- Item type:
- chapter
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520267855.003.0003
- Subject:
- Anthropology, Asian Cultural Anthropology
The renowned selling system developed in America that was brought to Japan in 1900 had by then taken firm shape as a product of trans-Atlantic and transnational experience. The Singer system helped ...
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The renowned selling system developed in America that was brought to Japan in 1900 had by then taken firm shape as a product of trans-Atlantic and transnational experience. The Singer system helped produce new social roles and forms of discipline. The household machine and home-based users came to constitute the great majority of the Singer Sewing Machine Company's market in Japan. Women teachers shared with their male coworkers mobility and the privilege of entering the homes of strangers, and were more often praised or envied than feared or scorned. Singer's experience in Japan offers insight into the ways in which practices of global capitalism are not only transformative but also at times resisted, and in some measure transformed, as they take root in particular locales. It also played a role in shaping and promoting the modern profession of the salesman, new ideas of female self-reliance, and the spread of consumer credit.Less
The renowned selling system developed in America that was brought to Japan in 1900 had by then taken firm shape as a product of trans-Atlantic and transnational experience. The Singer system helped produce new social roles and forms of discipline. The household machine and home-based users came to constitute the great majority of the Singer Sewing Machine Company's market in Japan. Women teachers shared with their male coworkers mobility and the privilege of entering the homes of strangers, and were more often praised or envied than feared or scorned. Singer's experience in Japan offers insight into the ways in which practices of global capitalism are not only transformative but also at times resisted, and in some measure transformed, as they take root in particular locales. It also played a role in shaping and promoting the modern profession of the salesman, new ideas of female self-reliance, and the spread of consumer credit.
