Credit, consumption, and debt: Comparative perspectives

Abstract

In the context of the recent economic crisis, it became clear that social scientists did not pay sufficient attention to several very critical questions concerning modern market economies. These questions include the following: How do nations regulate their credit markets? Why did household indebtedness increase substantially, and why did it grow more in some nations than others? What are the implications of access to credit for lower-and middle-income households' lifestyles? How do different nations handle overindebtedness? And finally, how exactly are the macro-level processes that underlie global debt economies linked to the experiences of actual individuals?Recently, a vibrant field of research has begun to emerge around these questions. The findings are transforming our established understandings of the political economy of advanced societies and opening new outlets for comparative research. Some key questions and issues, briefly outlined below, were discussed extensively over 2 days at the Dublin Workshops 1 on Financialization, Consumption and Social Welfare Politics in the May of 2012. Subsequent to that conference, we attempted to develop a special issue of International Journal of Comparative Sociology (IJCS) from the articles presented there, with the participants invited to submit their articles for review to the journal. Two articles from this conference are included in the current issue of the IJCS as a special section (immediately following this introductory essay).This new field of scholarship on comparative credit, consumption, and debt is a variegated one, woven together by some common themes and animated by the big questions noted above. Several lines of inquiry need to be mentioned in this regard.First, there is the question of how credit markets operate. Nations maintain distinct approaches to regulating their credit markets. While some attempt to limit access to credit, others facilitate credit use. While some nations emphasize 'consumer choice' in credit market transactions, others emphasize 'consumer protection.' Some nations heavily rely on disclosure regulations, assuming that market actors will act rationally on the basis of the information they have. Other nations put restraints on the actual credit products that can be bought and sold on the market, not leaving it to market actors to determine the level of risk that can be assumed. Comparing the United Kingdom and France, Ramsay (2012) shows, for instance, that in the United Kingdom, maximizing access to 504280C OS54310.

Top incomes under finance-driven capitalism, 1990–2010: power resources and regulatory orders

“…The effects of both market capitalisation and domestic credit volume are weak relative to stressors such as unemployment and economic globalisation however, with the latter non-significant. The weaker effect of debt is curious, considering that rising debt has been linked both to median income stagnation, and the substantial rise in publicly-traded debt servicing agencies which would suggest a stronger effect (Kus, 2013a). This finding likely reflects Kus' analysis of the moderating effects of debt, which shored up consumption and moderated personal income inequality (Kus, 2013b).…”

“…Financialisation has been conceptualised in a variety of ways, such as the diversification of firms into financial activities away from core 'real economy' pursuits (Krippner, 2011), the growing use of securitisation and tradable financial instruments as distributors of risk (Movitz and Allvin, 2014), a realignment of corporate strategies in favour of profiteering and cost saving (Thompson, 2003;Thompson, 2013), and the use of credit to shore up consumption under real wage stagnation (Guttman, 2008;Kus, 2013a;ILO, 2013;Stockhammer, 2012;van der Zwan, 2014). In terms of class structure, the era of financialisation has been characterised by the rise of what Foster and Holleman (2010) term a 'financial power elite', deriving their wealth from financial profits, real estate, and executive compensation.…”

Polarization or “Squeezed Middle” in the Great Recession?: A Comparative European Analysis of the Distribution of Economic Stress

“…However, at the same time increasing debt levels, negative equity, public sector redundancies and pay cuts and difficulties experienced by the self-employed have resulted in notions of 'middle class squeeze', coming to have considerable resonance in popular and political debate Maître, 2014, Whelan et al, 2015). The term originates in the US where it predates the recent economic crisis and refers to the relative decline in earnings for middling groups and the reliance on credit to maintain established living standards (Pew 2012, Kus, 2013. The European context is different in crucial respects.…”

“…In this paper we seek to bridge the gap between recent analyses relating to the distributional consequences of the Great Recession and those focusing more specifically on notions of "middle class squeeze" (Jenkins et al 2013, Kus, 2013. Our focus is on the more developed economies of the European Union and we will develop the argument that in understanding the distributional impact of the economic crisis in such countries it is necessary to go beyond income and develop a multidimensional approach that encompasses material deprivation and economic stress.…”

Endividamento e Desempenho Acadêmico sob a perspectiva dos Discentes de Contabilidade / Debt and Academic Performance under Accounting Student's perspective

“…O entendimento de como as decisões financeiras são tomadas pelos indivíduos está relacionado a suas características psicológicas e de percepção de bem-estar financeiro (STRÖMBÄCK et al, 2017). Embora o acesso ao crédito proporcione vantagens, como acesso mais amplo ao consumo, o endividamento dos indivíduos teve aumento considerável nas últimas décadas em função de tal acessibilidade (KUS, 2013).…”