Debt, Credit, and Class Formation in the New Gilded Age

• In Event: Conceptualizing and Measuring Social Class in the United States

Abstract

When commentators describe the contemporary United States as having entered a “New Gilded Age,” they typically highlight government’s role in decreasing social mobility and increasing income inequality. This paper first fits debt and credit into that picture, and describes changes in borrowing and lending through the lens of political development. Although government regulates every phase of the relationship between borrowers and lenders, different parts of the lending relationship have developed in very different directions. In particular, Americans’ access to credit expanded dramatically during the late twentieth century, but during this same period, the terms of credit and the consequences of default became far less favorable for borrowers. Second, the paper argues that access to credit expanded as a result of social movement protest, but that collective action did not emerge (or was not as successful) in securing debtor-friendly regulation of the other elements of the transaction. Finally, we suggest that the lack of collective action in these policy arenas resulted from a lack of class formation around indebtedness, and hypothesize that the material structures of late-twentieth-century debt may have impeded this class formation.

Authors

• Emily Zackin, Johns Hopkins University

• Chloe Thurston, Northwestern University