The Law and Political Economy of Debt

Debt is, and always has been, political. Over the course of the last century, the rise of the consumer society has dramatically increased the political and economic salience of consumer debt. Successive administrations have used expansionary credit policies to achieve their political goals, by boosting household consumption and imperfectly substituting the welfare state. As the financial sector has gained political strength, it has lobbied aggressively for light-touch regulation. The result is a repeating cycle of credit booms and busts that not only creates financial instability but also exacerbates socio-economic inequality. Advances in information technology have played a key role in both enabling the expansion of consumer credit markets as well as reproducing inequality. In turn, the political economy of consumer debt shapes, and is shaped by, law.
This course examines the relationship between consumer credit markets, legal norms, and the political economy. The course will introduce students to different frameworks for analyzing the relationship between law, markets, and the political economy. It will examine the expansion of consumer credit markets and consumer credit law in the U.S., and the technological, political and socio-legal drivers of these developments. The course will focus on two pivotal episodes in the law and political economy of consumer debt: the civil rights movement and the passage of fair lending laws; and the 2008 financial crisis and subsequent reforms to financial regulation under Dodd-Frank. The course plugs into broader debates on social and racial justice, surveillance capitalism, algorithmic governance, and stakeholder governance.