The Democratization of Credit

Journal of Social Philosophy 43 (1):50-63 (2012)
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Abstract

Elizabeth Anderson exalts the transition from the aristocratic to the modern ethic of debt as one of the most significant cultural achievements of capitalism. Whereas the debitor was once forced to compromise his liberty, dignity, and equality, today the rights and freedoms of insolvents are legally protected, and disadvantaged members of the community can readily obtain credit without personal supplication. Anderson’s intuition was, until recently, widely shared. Then came the financial crisis of 2007-08 and the ensuing global recession, triggered by mass defaults among “sub-prime” borrowers. Many had entered the mortgage market with no proof of income, no assets behind them, no down-payment, a chequered credit history, and a generally reduced repayment capacity. Suddenly a flurry of criticism was unleashed against the lowering of credit standards and the government programs which pressured lenders to service the poor. My aim in this paper is not to assess the democratization of credit from the point of view of economic efficiency or political prudence, but rather to provide a much needed ethical appraisal. Any number of reasons might be advanced for why a particular government policy is morally objectionable. I will concentrate on the least controversial reason conceivable: the policy violates the rights of citizens. Whether this is true of government-driven credit-democratization - specifically, whether it violates the rights of the lenders compelled to act as agents of the policy, the rights of the third parties exposed to the risks associated with the expansion of credit markets, or both – is the question that I take up here.

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Ned Dobos
University of New South Wales

Citations of this work

The Right to Credit.Marco Meyer - 2017 - Journal of Political Philosophy 26 (3):304-326.

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References found in this work

Famine, affluence, and morality.Peter Singer - 1972 - Philosophy and Public Affairs 1 (3):229-243.
Mediating duties.Henry Shue - 1988 - Ethics 98 (4):687-704.
Perfect and Imperfect Duties to Aid.Violetta Igneski - 2006 - Social Theory and Practice 32 (3):439-466.
What We Can Reasonably Reject.Thomas W. Pogge - 2001 - Noûs 35 (s1):118 - 147.

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