Professor Nicholas Gane

Sociology, University of Warwick

Usury as a Problem for Neoliberalism

Date and Time: Thursday 1 June 15.00-17.00

Venue: Room E221, Sirkkala Campus (Kaivokatu 12), Minerva Building (2nd floor), University of Turku

Abstract: The regulation of ‘payday’ loan providers has become a key point of public and political concern following the financial crisis of 2007-08. In late 2014, following a high-profile campaign by trade unions, Occupy and religious groups, new government regulations were introduced to regulate payday lending by capping interest and fees at 0.8% per day of the amount borrowed, and the total cost of fees and interest at 100% of the original sum borrowed. This meant that the most prominent British payday loans companies – Wonga – was forced to reduce its standard annual percentage rate (APR) from 5,853% to 1,509% on its loans. Wonga has since committed itself to a new regime of ‘responsible lending’, but the broader political and moral question of usury (the freedom to fix the rate at which money can be loaned) remains. This question is not new as it was central to many of the key texts of late-18th and 19th Century political economy. Adam Smith, for example, argued for the government regulation of interest on loans, while Jeremy Bentham responded by calling for a ‘defence of usury’. This paper will return to these classical debates over usury and will consider their continued relevance today. In particular, it will consider debt and usury as potential problems for the pro-market form of governance known as neoliberalism as, within its own terms of reference, it is not clear how and to what extent government should intervene in the market through the regulation and governance of debt. To large extent, government post-crisis has prioritised the problem of public or sovereign debt over questions of private debt (thereby leaving consumers largely to look after themselves), but soaring levels of private debt continue to present a problem for neoliberal policies that seek to prioritise market mechanisms, and for a capitalist system more generally that is premised on an ideal of growth. This paper will address these questions by focusing on usury as a lingering and, to date, unresolved problem for liberal thought, and as something that exposes the limits of, and can potentially destabilize, current forms of neoliberal politics.

Recent Articles:

‘In and Out of Neoliberalism: Reconsidering the Sociology of Raymond Aron’. Journal of Classical Sociology, 16, August, 2106, pp.261-79. http://jcs.sagepub.com/content/16/3/261.abstract

‘Central Banking, Technocratic Governance and the Financial Crisis’. Sosiologia, 52, 4, 2015, pp.381-96. Available here: https://www.academia.edu/19658356/Central_Banking_Technocratic_Governance_and_the_Financial_Crisis

‘Sociology and Neoliberalism: A Missing History’. Sociology, 48, 6, 2014, pp.1092-1106. http://soc.sagepub.com/content/48/6/1092

‘The Emergence of Neoliberalism: Thinking Through and Beyond Michel Foucault’s Lectures on Biopolitics’. Theory, Culture and Society, 31, 4, 2014, pp.3-27. http://tcs.sagepub.com/content/31/4/3.full.pdf+html

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