A Payday Loans window in Henrico County, Virginia (2007).
flickr.com/andrewbain
origin story / money

The Shark and the Hound

America’s long history of predatory lending.
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But capitalism is abuse by design, and there can be no lasting truce between lenders and borrowers until the lenders are no longer motivated by profit. This is because capitalism doesn’t just permit exploitation of the working class by the owning class; it requires it. Abuse will manifest itself in every sphere dominated by capital, whether in compliance with or in violation of the law. Loan Sharks may not affirm this conclusion, but it demonstrates the principle.

The financial industry—its every hedge fund, every savings and loan association, every brokerage firm, and every mortgage company—is dedicated to one thing only: capital accumulation. Capital accumulation is the process by which capitalists turn large sums of money into even larger sums money. And where does that money come from to begin with? To take a cue from Marx, all value under capitalism is determined by labor, and all profit is generated by the exploitation of that labor. To compete in the market, businesses must pay obeisance to the profit motive—and since suppressing wages is the surest way to gain an advantage and outperform competitors, this inevitably results in a race to the bottom. Working people’s bodies and time are exhausted, and the fruits of their labor are extracted by their employers, who set about multiplying all of this through investment. All capital in the accumulation phase bears the mark of abuse.

Yet the cycle of abuse doesn’t stop with material production. Where there is capital accumulation there is always what Marxist geographer David Harvey calls “accumulation by dispossession,” the process of separating people from the basic resources they need to get by, like houses to live in, transportation to work, and even money itself—and then duplicitously offering to grant access to those resources . . . for a fee. Predatory lending is a prime example of accumulation by dispossession, designed to target and extract wealth from the bottom and siphon it to the top. It makes the rich richer and keeps the poor under their heel—which makes them more acquiescent workers and more desperate, reckless borrowers.
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