Debt and Human Development

We talk about being indebted as if it were a purely negative thing, with the gap between income and aspiration normally held responsible. Yet one could equally say that people are getting a lot of credit! How can so much borrowing be warranted? The issues of debt or credit typically invoke such responses as: Financial institutions must be more tightly regulated! Neither a lender nor a borrower be! The fools have only themselves to blame!

Is this the whole story? What if this tremendous amount of borrowing is the not-yet-understood financial counterpart of a soul phenomenon: the problem of ‘creativity.’ We may not all use Gordon Brown’s ‘Golden Rule’ to measure our behaviour, but most people know that if one is borrowing money, it must be because of something in the future that will create a way to repay it - taking a college course, rather than simply funding consumption. Who decides this? Relational banking is now considered anachronistic. In the age of the credit search, it is the computer, not the person who says yes or no. The modern human being is left free to manage his own credit situation, for better or worse. Without some danger, no development! Is this the price of human creativity?