Indebted Societies. Credit and Welfare in Rich Democracies. Cambridge Studies in Comparative Politics Series. 2021

Financial markets are woven deeply into the fabric of our societies and play an increasingly important role in peoples’ daily lives. In many advanced democracies, access to financial markets is now a prerequisite for full participation and inclusion in labor markets, housing markets, and educational opportunities, creating a new kind of social and economic citizenship.

Indebted Societies provides a rich study of the causes and consequences of rising household indebtedness. The book develops a social policy theory of everyday borrowing to illuminate how financial markets interact with welfare states and to explain important differences across OECD countries. Weaker social policies and a flexible knowledge economy have increased income volatility and expenditures for housing, education, forcing many people into debt to cope with social risks and harness social opportunities. By highlighting credit markets’ substitutive and complementary relationship with welfare states, the book helps explain why similar groups of people are more indebted in some countries than others.

Drawing on a wide range of quantitative data and in-depth empirical studies of people in Denmark, the United States, and Germany, Indebted Societies reveals a fundamental transformation of social rights and social responsibilities. It shows that the rise of financial markets as private alternatives to welfare states and resulting patterns of indebtedness have profound downstream socio-economic and political consequences for economic insecurity and public support for the welfare state across countries.

The book’s findings have implications for how scholars and policymakers think about the role of financial markets and household debt in a world of changing labor markets and welfare states. Credit markets and welfare states appear to fulfill similar functions but follow different underlying logics, each with their own socio-economic and political consequences that shape and amplify insecurities, inequalities, and social solidarity.

Awards

  • Winner of the William H. Riker Book Award for the best book in political economy published during the past three years, American Political Science Association, 2022

  • Winner of the Best Book on Class and Inequality Award, American Political Science Association, 2022

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