borrowing and lending

Without lenders, there can be no borrowers. Why, then, do we blame borrowers for the financial crisis, rather than lenders? LSE sociologist Nigel Dodd explains.

Indebtedness … bestows an assumption of blame on the borrower, conflating financial obligation with moral guilt. There are clues buried deep in our linguistic history: it was Nietzsche who noticed that the German word for debt, Schuld, also means guilt. When this double meaning was pointed out to American economist Paul Krugman, he responded: “Now it all makes sense.” ….

[N]othing about this should surprise us. In every society throughout history, debt – as opposed to credit – is given a negative moral evaluation. ….

[W]hat varies is our moral evaluation of creditors and debtors. In literature, many creditors have been portrayed as evil. Goethe and Marlowe all cast creditors as devils in the form of Mephistopheles. Dickens described the moneylender, Scrooge, as “a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner”. Shakespeare’s notorious moneylender, Shylock, has typically been portrayed as a villain, and in urban slang calling someone a shylock means they are a loan shark. ….

More recently, however, it is the debtors – subprime borrowers, for example, and countries such as Greece – that are stigmatised.

Nigel Dodd, “Cast aside the moral judgment and give debt the credit it deserves“, Financial Times, 1 November 2014.

Google Translate provides four additional meanings of Schuld: blame, fault, liability and trespasses.

Polonius, in in Act I, Scene 3 of William Shakespeare’s Hamlet, is even-handed. He famously advises his son Laertes to eschew both borrowing and lending:

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

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