💬 Tell me about your debt, though!

Charles Spencer, 3rd Duke of Marlborough - Niall Ferguson's poster boy for debt in The Ascent of Money. He had to sell his dad's statues from their palace plinths to pay his debts. His descendent, the 12th Duke of Marlborough, had his Porsche repossessed for unpaid debts in 2022. Celebrities - they're just like us!

How was your Easter holiday? What did you do? I spent mine obsessively reading (1) The Magicians by Lev Grossman and (2)The Cut's Debt Week series.

The posts are behind a paywall (a subscription is worth it, though!) But in summary, New York Magazine's The Cut has been posting people's personal stories about being in debt - "falling into it, climbing out of it, and why it’s so hard to avoid." There's the daughter who quit her job to care for her dying father. The man with undiagnosed bipolar who overspent on luxury clothes. And - the most harrowing to me - the creatives who lost their income during the pandemic and had to hock their kid's toys to buy dinner groceries.

So I don't really have time to sit and parse through data to figure out if The Cut is correct that everyone is in debt now and basic living is impossible and even the middle-upper classes are squeezed, etc. etc. Lily Allen was talking about this in 2006 (pre-crash!) so it's hard to know if it is actually worse now.

Someone else jump in here and comment on if/how much Lampen's anecdotes are representative of a population trend. But what interests me is that The Cut is doing a whole series about debt in the first place! Not 'the economy', not tariffs, not income inequality. Debt.

Learning how the interviewees got out of debt makes reading it feel markedly better than doom-reading the NYTimes opinion section. But as these people describe it, paying off their debt wasn't some triumphalist moment of grand accomplishment, but the anti-climactic escape from an utterly life-sucking financial prison. The interviews not only capture how debt happens, but how it feels.

What is striking about these stories is how completely arbitrary and unnecessary paying off debt feels in the context of these human stories. Several interviewees point it out - debt payments just go into a black hole. And yet this very abitrary-feeling thing is actually one, if not the, most binding obligations we can enter into. It is easier to get divorced than it is to get out of debt.

Debt is where we reckon with how finance is not just about making money or greed - a low-hanging default criticism. Finance is about obligations - promises made that are almost impossible to break. (Or, for the esoterically-inclined among us, it's where we experience the difference between the commodity theory of money and the credit theory of money.)

My research interests are on corporate financial obligations, not personal. And while the rules of corporate debt are definitely different than private debt, the thrust of the lock-in is the same. Financial lock-in is simultaneously the most ambiguous and most concrete of all the lock-ins. And the same lock-in that individuals have to their financial obligations is the same ones that firms do. And firms also have to figure out a way to pay it back - at least according to our systems as they are now.

Firms can't just go around, I dunno, stranding assets willy nilly because scientists tell them they'll nuke the planet if they don't.

Now, I am not saying this is the way it should be. I'm saying it's the way it is right now. When I say they 'can't', I mean like, legally, they cannot. I'm not saying debt's gotta be paid, like, morally. But it does have to be dealt with. 'Greening finance' isn't just a matter of either redirecting or restraining people's greed, but unravelling deeply-entrenched financial obligations.