Accepted Paper:

Debt as a resource  


Rune Steenberg (Palacky University in Olomouc)

Paper short abstract:

This paper explores the tension between debt as a liability and debt as a resource in northwest China. While debt increases individual households’ vulnerability it also forges networks of mutual obligation providing social security and opportunities. The question is: Which debt to whom?

Paper long abstract:

The high cost of marriage in an environment of rising inequality and monetisation is of grave concern to poor Uyghurs in Kashgar, northwest China. The government's reaction is to restrict spending at weddings, arguing that debt destroys household savings and endangers the local economy.

Yet, ironically, this debt is as much a resource as it is a liability for the afflicted families. Social security, economic opportunity and access to much-needed funds in an increasingly financialising economy, is provided by social networks woven through gift giving at communal celebrations. Thus, giving elaborate banquets and gifts, while straining the household budget, is an investment in social capital. Also, the debt accumulated is mainly private, interest-free debt which does not subject these families to the fancies of exploitative banks but actually strengthens their ties of mutual obligation with relatives and neighbours. Money is widely borrowed and lent as a way of negotiating social relations — besides being commercial, it is also used as a social currency (Graeber 2012).

This design might seem somewhat at odds with conventional Euro-American practice, where banks encourage excessive credit lending to profit from household members' toil before they evict them. Yet the underlying problem seems to be not the debt as such but to whom it is owed. This paper advocates analysing debt within the frame of a "gift model of value," focussing on the social relations involved, instead of a "barter model of value" focussed on the relations between objects exchanged (Strathern 1992).

Panel P083
Debt: a critical reflection based on people's debts