Tag Archives: Debt

[The Space Merchants]: Chlorella’s Predatory Lending

“The pattern of the B labor contract was quite clear.  You never got out of debt.  Easy credit was part of the system, and so were irritants that forced you to exercise it.  If I fell behind ten dollars a week I would owe one thousand one hundred dollars to Chlorella at the end of my contract and would have to work until the debt was wiped out.  And while I worked, a new debt would accumulate” (Pohl and Kornbluth 1).

When we discussed in class how Pohl and Kornbluth each engaged in critique within The Space Merchants, this quote was one of many that sprang right to mind.  While certainly critical of any form of contract that seeks to exploit the poorest members of society during the 1950s, it was especially thought provoking within today’s context with regards to the idea of predatory lending.  Predatory lending, was essentially the practice of praying upon unassuming individuals, by offering them “too good to be true” loan rates on things like cars and homes, and waiting for the person to default on their payments by virtue of the misrepresentation, and reacquiring the property.  While functionally a cheap way for these lenders to make money, the people who were taken advantage of were effectively coerced into taking a deal that would otherwise have been bad for them, much in the same way that Mitch was coerced into working for Chlorella.  Another similarity is the idea of the cycle of debt that accrues, where in both cases, Mitch and the individual, each struggle against massive rates for either interest payments or products, each perpetuating a system, where no matter how much one pays in, there is no way out.  Finally, is the idea that no matter what happens, the victim will be straddled with a new debt.  Even if somehow Mitch or the victim of a subprime mortgage/rate, manages to pay off their original loan, it will often have to be done on the backs of taking out other loans, borrowing money through practices like payday loans, the opening of new credit lines, and even just borrowing from those around them.  In any instance, it creates drastic harms and establishes a system which both Pohl and Kornbluth would stand ardently against.

Pohl, Frederik, and C. M. Kornbluth. The Space Merchants,. New York: Walker, 1969. Print.

Life and Debt

“The pattern of the B labor contract was quite clear. You never got out of debt. Easy credit was part of the system, and so were irritants that forced you to exercise it…And while I worked, a new debt would accumulate.”

This forcibly reminds me of my world literature class last semester when we talked about the negative effects the World Bank and other institutions have on developing countries. What happens is that developing countries borrow money from the World Bank, which restricts what they are allowed to do with it. As a result, their economies never get independent from first world countries, and they are unable to pay the debt  back. The debt increases with time and the additional money they have to borrow. I think Pohl was drawing attention to this vicious cycle in today’s world economy.