Debtfare States and the Poverty Industry: The Case of the US Payday Lenders

Financial inclusion has become a ubiquitous feature in global capitalism. The official development literature is replete with studies linking financial inclusion to poverty reduction and empowerment. Yet, few analyses have sought to explore critically advanced forms of financial inclusion in the global North, particularly the highly profitable and controversial payday lending industry in the United States. The payday industry poses an interesting site of inquiry because it involves a segment of the working poor, who, despite being financially included, remain economically precarious. Drawing on arguments and concepts developed in my recent book, ‘Debtfare States and the Poverty Industry,’ my talk exposes the capitalist nature - and social, political, ideational and geographical dimensions therein - of financial inclusion by posing two specific questions with regard to the US payday industry. First, what are the relations of power that constitute ‘the financial’? And, second, how and why has all this been reproduced? For me, the most effective way in which to tackle these questions is by analytical addressing the social power of money and neoliberal forms of governance through a Marxian inspired framework. Seen from this perspective, I argue that the payday lending industry is not characterized by market freedoms and opportunities; but instead, it entails constructed forms of structural violence and silent compulsions that act to discipline and limit the choices available to the working poor.

Susanne Soederberg is a Professor and Canada Research Chair in Global Political Economy of Development at Queen’s University, Canada where she teaches in the Departments of Political Studies and Global Development Studies. Dr Soederberg has been appointed the Erkko Professor at the Collegium for Advanced Studies at the University of Helsinki for 2015-2016. Dr Soederberg is author of several books, including: The Politics of the New International Financial Architecture (2004), Global Governance in Question (2006), Corporate Power and Ownership in Contemporary Capitalism (2010) and her recent work, Debtfare States and the Poverty Industry: Money, Discipline and the Surplus Population (2014). At present, Professor Soederberg is undertaking research on a new project - "Governing Shelter Finance for Slum Dwellers: A Comparative Study of Mexico City, Manila and Mumbai."