A History of Credit in the Unites States: The Expansion of Consumer Credit in the Sixties

Abstract

While the development of consumer credit in the US has been often related to the new disposition towards consumption that in the 1960s effectively undermined historic Protestant guilt about debt, and replaced it with a post-scarcity attitude, it has also to do with the civil rights movement. An improbable convergence of interests among government, civil rights activists, and lenders, worked to reassemble access to credit, and ultimately to change credit policies, lending practices, and discriminating laws based upon race, gender, and age, and finally, to provide every American citizen with the right to borrow. This result – debt as an economic right -- was based on the principle of justice and a premise of solvency; the illusion of permanent economic growth and a long tradition of virtuous debtors made this premise reasonable. When the right to access credit was granted, the economic cycle had already changed, and American capitalism entered its post-affluent era. Consequently, the premise of solvency evaporated into debt, and rather than accessing the American Dream, American families entered a financial nightmare, absorbing more and more liabilities and financial shocks.

Keywords: Consumer credit, United States, Civil rights, Economic history.