I don’t believe in credit.
To crib an old line from Nikki Hay, it’s not that I don’t believe it exists or happens, it’s just that I don’t believe it really should. Or in using it myself.
In my last visit to Chicago this spring, I told Fish and his girlfriend that I didn’t have as much of a problem with capitalism holistically as I did with the credit aspect specifically. They gave me the waterfalling laughs of ridicule that can only come from students of the University of Chicago when they’re about to be more conservative than you: “There wouldn’t be any capitalism without credit!” they trilled, almost in unison.
Apparently, Messrs. Bernanke, Paulson, and Bush agree. No wonder I don’t like credit.
At base, the concept of credit is simple and classically American: something for nothing. “Nothing” might be considered too harsh a judgment – it’s “something”, ranging from a handshake to a promise to a statement of income to collateral to a pound of flesh. But really, at the end of the day, it’s nothing. Suddenly you have money to spend that you didn’t have before, all because someone believes that you can make that money back (and possibly more) before they want their money back.
For some reason, or perhaps several, this has always seemed innately inappropriate to me. And not for any mid-millennium European judgments about “moneychangers” or any other such nefarious historical dogma. After all, the one aspect of the credit world that I have delved into is interest-bearing accounts: savings accounts and certificates of deposit, so I clearly haven’t carried over to objecting to banking altogether. Although maybe I should by the time I complete this analysis.
Maybe it was watching my parents cut up their credit cards and throw the pieces in the fire in Visalia, California during my early childhood, pronouncing vague admonitions that I not get trapped in the same web they were now escaping. That sobering mid-eighties scene no doubt had a major influence on how I approached my early adulthood. Maybe it was watching how quickly my friends in high school could accrue debt at the rate of a soda at a time. Whatever my influences, it was pretty clear to me that I never wanted to have monetary credit by the time that credit card companies flooded my Brandeis campus mailbox with promises of unlimited lines of borrowing, with only my pending degree as collateral.
My objection to credit and debt, conceptually and philosophically, is twofold. And the two halves of the fold may seem to contradict each other, as I think about it, so you’ll have to bear with me…
1. Spending money you don’t have.
Conceptually, this just seems obviously wrong. Even leaving aside the fact that the average American has no idea what they’re doing with money or what it’s good for (and no institutions in our society are designed to teach them otherwise), spending someone else’s money just seems unwise. One of the only reasonably decent arguments for capitalistic elements of a society (such as property ownership) is that people take better care of their own things than they do of communal property. I think this trait could be unlearned pretty easily, but if I grant it in the status quo, the credit/debt aspect of capitalism defeats one of its only defensible attributes. The “owned” property is actually someone else’s, or was bought with free money from someone else. To what extent do you really feel you’ve earned this item and have to take care of it if it’s on borrowed cash? No one’s ever done the study, but I bet property bought in cash lasts twice as long and in better condition than property bought on credit.
Of course, modern American capitalism benefits the most when property is trashed. Then people need to go out and buy more. The sustainable, homespun, hand-grown aspects of property ownership are directly in conflict with the credit mentality. You hear that, global warming nuts? Credit is anti-environmental!
Of course, this should be obvious by now in a society that needs to run on planned obsolescence to sustain its “growth”. Your DVD is obsolete now, it’s time for Blu-Ray! Your screen is just a little too small, there’s a bigger one out. Your computer is just a little too slow, there’s a faster one out. Your car is just a little too fuel inefficient, there’s a slightly more efficient one out. Your phone is just a little too crackly, there’s a more connected one out. Incremental technology is the boon of the credit world, forcing the efficiency-minded to grab the next gadget or advance before they’ve even paid off the last one.
But all these objections are mild compared to…
2. Indebtedness = slavery.
This is the larger problem with credit and the thing that really needs to come home to roost in our society. This is the really insidious aspect of debt, the one that’s really ballooned in the last couple decades, the one that makes me want to stand up and cheer at the possible defeat of the credit lifestyle. This, ultimately, is why I personally could never stomach getting a single credit card, never want to buy a house unless I can do so outright, and have never borrowed money that wasn’t from a close friend (and in an amount less than $20).
When one owes money, one has two choices. One can be conscientious about it, and care about paying it back, or one can pretty much not care. The latter leads to the first phenomenon (above), not taking care of things, not being responsible with borrowed items. This, in turn, leads to the foreclosure world that we’re reeling in the midst of now… borrowing money one couldn’t hope to pay back just to enjoy/trash some stuff for a while and have to give it back. Yes, this is a slightly abrasive oversimplification of the foreclosure mentality of this decade, but it’s close enough.
The second choice, the one taken probably by the preponderance of people, despite American values, is to care quite deeply about paying the money back. To want to not be upside-down for the rest of one’s life. This is the road I’m more familiar with, in part because I’m fortunate enough to have fortunate and motivated friends, most of whose first experience with credit/debt is/was student loans. Often, they take out these loans not just for undergrad, but to get a shiny advanced degree, often in a professional school, especially law school. And the old story goes a little like this:
X: I want to go to law school!
S: Why? You’ll just get dragged down into doing something evil with it.
X: No I won’t! I want to do law school to help people and save the world.
S: [sighs] Okay. If you insist. But be careful, because you’ll be surrounded by offers of evil.
X: Uh oh. I can’t pay for law school. Good thing there are student loans available!
S: Oh dear. I know how this one ends.
[a year passes]
X: Law school is really dull. Thank God I get to do something interesting when this is over.
[two years pass]
X: You would never believe how much money I owe for all this law school. You know, I think I’m going to take a high-paying firm job for a few years to pay it off.
S: But they do evil!
X: But just a little evil. And I won’t even be in the most evil department. And it’s just for a few years.
[a few years pass]
S: So, going to move on from evil yet?
X: Welllll… I’ve gotten three promotions and now that I’ve paid off my debt, I’m really accustomed to this high standard of living.
X: You know, I’ve been thinking that the best way to save the world might be to make a whole pile of cash and then donate it at the end of my life to things I care about?
S: Yeah? Like Carnegie or Gates?
X: Yeah, exactly. They did lots of good for the world, right?
Your script may vary, and there are a couple exceptions here and there, and I’ve probably upset all my friends in law school (which, really, is like 75% of you). Whatever. You know I worry about this anyway, so no surprises. The point is that with or without me nagging them on their shoulder, this is the general progression that an uncanny number of people go through. And while my crowd usually does this with law school, there are plenty of people doing this with undergraduate degrees or business school degrees (although that’s more obviously a lost cause) or other professional pursuits.
And I’m not saying we should go back to the time where education was a privilege only of the rich. However, the insidious move that America has seamlessly made to draft the most intelligent and caring of the poor and middle class into indentured servitude to the institutions that keep the poor poor… this I object to.
And while this is the most glaring example of credit’s insidious ability to corrupt and enslave, it’s by no means the only one. Every day, debt and credit keep people from quitting jobs they despise because of obligations they’ve committed to that are over their head. And the society that takes debt and credit for granted, that naturally pushes everyone toward new cars and houses and gadgets they can’t afford, ensures that everyone will continue to be indebted and enslaved, compromising their free time, free will, and the morality and creativity of the pursuits of their life and labor, all to keep the machine that crushes them going.
So, uh, forgive me if I’m rooting with all my might for all of this to fail. Forgive me if I want the bail-out to fail and the dire warnings of the end of credit and thus capitalism to come true. Forgive me if I think a little pain is worth the ultimate outcome of letting go of this mentality where leveraged greed ate itself until there was nothing left to consume.
And in the meantime, whatever they end up deciding, make your own choice. Burn your credit cards. Walk away from the system. Spend only the money you actually have. Own less. Buy less. Opt out. Don’t participate in the institutions that are trying to destroy you. You’ll be happier, humbler, more secure. And you can quit your job when you want.