The role of rural indebtedness in the evolution of capitalism

Few studies have attempted to systematize the broader consequences of ordinary indebtedness – the inevitable other side of credit. My purpose here is to suggest four preliminary theses on the role of indebtedness in the evolution of capitalism, with special reference to the rural sphere. I argue that across time and space, credit/debt relations have not only been a key factor behind social differentiation through the control of land, labour and capital (Thesis I). They have also fostered market discipline by forcing the borrower – whether a poor peasant or a company manager – to calculate, pay, trade, work, intensify (Thesis II). Interest-bearing and guarantee-based loans have thus generated pressures for economic growth, short-termism and innovations, but have also undermined traditional community bonds and environmental conditions (Thesis III). Through its remarkable reward-or-punish nature, the credit/debt couple represents a powerful mechanism of social selection that has, in the long run, crucially shaped the evolution of capitalism (Thesis IV).