Financial institutions around the world have made it easier for private individuals to take out a variety of loans and use financial products to invest and speculate. This trend has affected the ways in which people purchase property, consume desired goods, or cope with financial crises. But the influence of debt and the financial industry extends also beyond the economic sphere to changing lifestyles, gender relations, and familial ties.

Halle an der Saale, December 2nd, 2024. Deregulated Financial Markets and Increasing Private Debt
Starting in the 1970s, the liberalization of financial markets brought about a fundamental transformation of the capitalist economic system. As a result, the power and significance of finances in business and society have continually increased. One component of this politically driven neoliberal process is the deregulation of loans for private households. This development has given rise to a massive increase in household debt. “Compared to the run up to the Global Financial Crisis of 2007–2008, the more recent increase in debt in most countries is less dramatic,” notes Marek Mikuš, Head of the Emmy Nother Research Group ‘Peripheral Debt: Money, Risk and Politics in Eastern Europe’. “However, the private use of financial products and services has reached a tremendous level worldwide.”

Not Just an Economic Problem
At the conference, which will bring together more than 30 participants, researchers will examine the social consequences of this global expansion of the financial sector. “The purpose of the 26 presentations is not primarily to analyse the economic system”, Mikuš explains. “Rather, the focus is on how the everyday lives of people change as a consequence of the widespread easy access to financial products, which various actors encourage them to use as a way to improve their circumstances.” For example, topics include young people who borrow money to invest in cryptocurrency in order to escape from everyday drudgery and pay for a cooler lifestyle. At the same time, other cases illuminate the far-reaching forms of solidarity that may emerge within families as they join efforts in order to pay off the debts of individual family members.

Unequal Debt Burdens
Debt practices disproportionately affect some social groups more than others, as a contribution on loans among low-income families in Brazil illustrates. Here, female recipients of cash welfare transfers have been enabled and encouraged to borrow money to buy residential property as well as everyday necessities such as food, medicine, and school supplies. This form of financing consumption in pursuit of a better life affects gender relations, because the debt is mostly borne by women. “This is just one example of many that demonstrate how the liberalization of financial markets and the ubiquity of incentives for loan-financed consumption leads to new forms of social inequality or deepens existing ones,” Mikuš notes. “While people with high incomes and assets profit from the current financial system, everyone else is disadvantaged by it.”


Dr. Marek Mikuš is head of the DFG funded Emmy Noether Research Group ‘Peripheral Debt: Money, Risk and Politics in Eastern Europe’
More information about the group’s research programme: (https://www.eth.mpg.de/peripheral-debt)

ImageSource Pixabay Hansuan Fabregas