There was once a time when a shake of the hands was good enough for a contract to be formed that people felt obligated to honor. In some instances, it was a valid contract. In others, it wasn’t. But either way, one’s word was one’s bond, and honoring one’s word was what one did. The point isn’t that people never found themselves unable to keep their word, but that when they didn’t, they felt shame for their failure to do so.
Is this still the case? Will this be how people feel going forward? Or is shame for failure to honor one’s obligation the latest “stigma” to fall out of favor?
Immediately after the initiative was announced, opponents of debt cancellation began denouncing “slacker baristas,” overeducated Ivy League lawyers and impractical “lesbian dance theory” majors. Immune to accusations of hypocrisy, Republican members of Congress who had received hundreds of thousands, even millions, of dollars in federal relief castigated student debtors who might receive $10,000 to $20,000 in aid.
Yes, the use of “federal relief” is a shifty and dishonest false equivalence, even if those targeted made a career out of being shifty and dishonest in their own right.
It was a stark reminder that shame, like wealth, is not evenly distributed in our society. For working-class people, insolvency is often seen as a sign of profligacy and personal irresponsibility, while large corporations and the wealthy routinely walk away from their obligations and are celebrated as savvy for doing so. Donald Trump can boastfully call himself the “king of debt” for his string of strategic bankruptcies; the average debtor would never dare.
Trump managed to fail running a casino. No one celebrated him as savvy for doing so. Even so, bankruptcy and reorganization serve purposes, mostly about seeing that people who are owed money get paid, But I digest.
The ability to rely on people to keep their promises presents a critical foundation for a nation to function. It’s not that people don’t fail to do so, and that courts don’t exist to determine contract rights, but that most of us go through life never having to sue anyone and never being sued because we do what we agree to do. On the positive side, we do so because it’s the honorable way to live one’s life. On the negative side, we do so because we would feel ashamed to be a deadbeat.
Of course, there is a component to doing so worthy of mention here, that many of us don’t “buy” things we can’t afford, don’t take on debts that we can’t repay. There is a practical reason for this, knowing that it will eventually result in financial disaster, and an emotional reason, that we can’t sleep at night knowing that we’re dishonorable people.
The mass cancellation of federal student loans will not only remove a crushing economic weight for tens of millions of people, it will lift a significant emotional one, too. This psychological shift could, in turn, have further political implications, by emboldening those who find their obligations overwhelming to engage in collective action aimed at winning more relief and changing the policies that make indebtedness so pervasive.
This sounds cool, but makes no sense. It’s the unfortunate trend of stringing words together that defy reason.
Why is our society so invested in steeping debtors in shame? The answer lies in debt’s role as a core building block of our economy and unequal social order. Debt is wrapped around every necessity of life: We use credit to make daily purchases and pay for medical care, take out mortgages, finance our cars, and borrow for college; cities and states issue debt to pay for roads and schools. Monthly repayments are often a form of wealth transfer to the affluent investors who hold these debts as assets, fueling inequality.
Without shame, why keep any promise? Why repay any debt? Is shame what keeps honorable people from lying and cheating, even if they can get away with it? When engaging in distortion for the benefit of the perpetually victimized by comparing individual debt with municipal bonds, will anyone be better off if there were no shame in being dishonorable? Should shame be stigmatized or join the growing ranks of bad stuff people do that now makes a million people on twitter send them thoughts and prayers for being so brave?
*Tuesday Talk rules apply.
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The problem is simple…and complicated. The ideal for many businesses is to have workers in debt until they die, so that they can’t leave, unionize, or do anything else that might affect the bottom line. And businesses are the major funding for many universities. Paying off all (or even some) of the debt is bad; but so is leaving people in perpetual debt. Eventually, businesses would have to relent when they didn’t have enough college graduates to fill positions…but that would take years. (Look at how slowly wages are increasing, despite there being a shortage of workers.) There is no good answer.
So this doesn’t go too far down the path of victimization, consider that ending the stigma of not keeping ones promises, honoring one’s obligations and paying one’s debts won’t be limited to evil big business but to everyone. When you destigmatize dishonor, it applies to all dishonorable conduct, not just the debts you decide are evil but the debts owed you as well.
Largely due to the absence of punitive damages in contract and the expense of litigation, there has been a dishonorable business model broadly practiced and even taught as savvy business method in this country for at least the last fifty years. It is a competitive school of thought in which contracts are never honored. As soon as the agreement is made, the small breaches and renegotiations begin, each calculated to be just small enough that litigation is uneconomical. By the end of the long chain of broken promises, the practitioner of the perpetual renegotiation method has eroded the entire value of the contract for the counter-party, who is screwed proper. The only way to ever win with the bastards who do this is to avoid ever dealing with them. Surprisingly, people don’t seem to manage that. Stigma aside, the serial breachers always seem to be able to find another patsy, and more than a few of them have made fortunes doing it.
Fortunately for the lenders, they don’t have to wrestle with such lofty, philosophical questions. When they write bad loans, they suffer real losses. Well, sometimes.
I’m not seeing where expecting someone to repay a debt “steeps debtors in shame.” The pervasiveness of debt today certainly is a shift from the society of bygone decades wherein there was a concept of whether one could “afford” desired goods or services. In the day, you could “afford” something if you had the purchase price in-hand, or a very high degree of certainty that you would have it by the time payment came due. Nobody would have borrowed (or for that matter, loaned) six-figure sums without any collateral, based simply on a potential stream of future earnings. Obviously, there has been a considerable shift in morality in the very inception of these practices, which would have been considered irresponsibly reckless when people were truly committed to discharging obligations.
Sounding more unhinged than usual. Maybe step away from the internet old guy.
Another strong argument, Jay. I can’t understand why all your clients get the death penalty for jaywalking.
Jeez. There you go, devaluing my lived experience.
Be fair, Bruce. It’s not as if Jay has ever known shame.
Without shame, there is always coercion. Make not paying worse than paying. Like debtors’ prisons. Let’s bring ’em back. Even those with the shame belong there. Filthy poors. It just has to be their fault entirely that they took loans they can’t repay. If only they were raised properly and felt embarrassment, then all would be well again.
It’s disturbingly simplistic to highlight “shame” among all the moving pieces in our great creditor-debtor world. We aren’t in a cooperative environment. It’s adversarial all the way down. Take what you can, give as little as possible. Shame ain’t coming back even if I do constantly tell people that they are obligated to pay their debts.
It is not possible to understand shame without knowing what it is to have integrity.
So yes…shame is not only ‘[not] coming back’, it also never existed in the first place for many.
Shame is integrity’s sister,
co-joined at the hip.
She’s always part of the package,
and she always holds the whip.
GD
Shame, Shame Shame,
Shame of Fools..
to paraphrase a song I once heard…
Kurt
This isn’t a shame problem. It is an, allow 18 year olds to take out tens or hundreds of thousands of dollars when they have not even picked out a major problem.
All the talk about what 18 year olds should or shouldn’t be allowed to do recently and debt wasn’t a part of the discussion (neither was the tremendous cost of college now).
I guess there is some shame to go around after all.