Credit and Community: Working-Class Debt in the UK since 1880

Credit's centrality to the current economic crisis makes the publication of Sean O'Connell's social history of working-class credit consumption particularly timely. Although the credit crunch came too late to be included in this book, the portrait of a complex relationship between lenders and borrowers over the past 120 years should be required reading for those suggesting we are living on the brink of a new economic epoch.

O'Connell broadly endorses the "culturalist" perspective that, he argues, sees borrowers as having greater agency than critics of moneylenders often portray. Instead, they negotiate a hazardous environment to select credit that is convenient and minimises middle-class intrusion. O'Connell does, however, see the inequality self-evident in any credit-based exchange, which is not apparent in the more extreme culturalist positions.

Agency remains an undercurrent in the book, not least because O'Connell supplements archival research with interviews with ageing working-class credit users. In the introduction, he acknowledges that, in "narrating debt", the interviewees may have granted themselves greater agency retrospectively than they actually enjoyed. Of course, the opposite may also be true and O'Connell found that one respondent had acted as an agent for a moneylender.

Although the extracts from these interviews enliven and inform the work, the question of reliability is ever present. More significantly, in the discussion about the rise of the moneylender, much is made of the attractiveness of doorstep credit and how customers become moneylenders. Rather less prevalent is the power asymmetry present in these relationships. Power is most starkly present in the section on loan sharks, and O'Connell captures the horror of their work while also explaining how and why customers use their services.

Less satisfactory is his virtual avoidance of the inherent structural inequalities, both in the credit exchange and the causal factors that lead to this type of consumption. The best summation of the latter is provided by Edward Filene, the driving force behind the pre-war growth of US credit unions, who argued that the "'hardcore, unemployed poor' did not need loans, but grants or jobs instead".

Rather than exploring this, O'Connell retreats to the culturalist argument that norms of sociability, obligation, reciprocity and a doorstep service explain the continued use of moneylenders. He hopes that a similar personal service by credit unions will prove the best way to tackle their use. Yet this is juxtaposed by his statement that the largest moneylenders indicate that they will replace doorstep services with credit cards and other less personal products.

O'Connell is drawn to his conclusion by an unwillingness to suggest that the culture might, or should, be changed. This reticence probably arises because he wants to avoid any moral overtures - not surprising given the surfeit of morality associated with credit. However, cultural change can occur for other reasons, as contemporary moneylenders indicate, but the narrowness in which O'Connell draws the subject makes this difficult to argue.

Although nominally this is a study of working-class credit, it is more a history of certain forms of credit used by elements within the working class.

The book is fairly comprehensive on the different types of credit used by working-class households before 1970, including an exceptional section on the long-forgotten co-operative "mutuality clubs", but it is less inclusive after that because the working class and the credit they use fragmented.

By choosing to follow credit consumption by the poorest members of society, O'Connell overlooks the fascinating and culturally important story of the extension of mainstream banking services to the majority of the working class.

This subsector, whether they are called "the deserving poor", artisans, skilled and semi-skilled workers or members of social group C2, have witnessed a dramatic transformation in how they bank in recent years.

Having utilised doorstep credit from the tallyman, check trading and mail-order catalogues, they have graduated to bank and building society accounts, mortgages and private pensions, all delivered in an increasingly remote and automated way.

What their story tells us is that cultures related to the consumption of credit are not rigid and that government policy followed by market innovation can fundamentally affect how we interact with the financial sector.

Perhaps here is the lesson that can be drawn from O'Connell's enjoyable book, which, despite reservations, I thoroughly recommend: consumer behaviour when purchasing financial services is neither entirely rational nor irrational.

Although the past 120 years have seen a shift towards privatised patterns of credit consumption, calls to moral duty or the use of collectivised provision have had minimal long-term impacts. For most of us, credit is an essential component of modern life, whether we call the supplier a banker or a moneylender. Any division is as much a product of prevailing socio-economic differences as pre-existing social norms.