Consumer Lending in France and America : Credit and Welfare

Why did America embrace consumer credit throughout the twentieth century, when most other countries did not? How did American policy makers by the late twentieth century come to believe that more credit would make even poor families better off? This book traces the historical emergence of modern consumer lending in America and France.

"At the beginning of the 20th century, consumer credit in the United States was perceived as unfair and exploitative. Social reformers fought to limit the economic and social impact of small lenders they decried as loan sharks. Reputable businesses steered clear of sales credit because of the questionable consumers that it would attract. By the 1970s, however, credit in America had been reimagined as a legitimate tool of household finance that was understood to have broad social and economic benefits. This transformation in the moral economy of credit accompanied a revolution in lending technologies and the regulatory treatment of consumer credit. Ultimately, these changes allowed American households to amass unprecedented debt -- debt that eventually precipitated the worst financial crisis of postwar America. To understand the origins of that crisis, we need to understand not just the shifting habits of consumers, but also what happened to lenders as the public moved from opposing credit to embracing it. This book traces how that transformation occurred. Nearly all accounts of the origins of American consumer credit have focused exclusively on the U.S. experience. Single-country case studies have their virtues. But they do not allow the observer easily to differentiate what is unusual about the U.S. case from what is common even to countries with very different credit practices"--