Seth Ackerman has a truly socialist plan to solve the banking crisis in 2007-8, involving something other than just dumping screw-ups for hardworking people to pick up and handing out bonuses to shareholders.
Steve Fraser also reminds, that debt is far too familiar to its human victims across the ages. Here’s another American tradition, one that doesn’t get enough airing when conservatives get gushy about the Founding Fathers:
Imprisonment for debt was a commonplace in colonial America and the early republic, and wasn’t abolished in most states until the 1830s or 1840s, in some cases not until after the Civil War. Today, we think of it as a peculiar and heartless way of punishing the poor — and it was. But it was more than that.
Some of the richest, most esteemed members of society also ended up there, men like Robert Morris, who helped finance the American Revolution and ran the Treasury under the Articles of Confederation; John Pintard, a stock-broker, state legislator, and founder of the New York Historical Society; William Duer, graduate of Eton, powerful merchant and speculator, assistant secretary in the Treasury Department of the new federal government, and master of a Hudson River manse; a Pennsylvania Supreme Court judge; army generals; and other notables.
Whether rich or poor, you were there for a long stretch, even for life, unless you could figure out some way of discharging your debts. That, however, is where the similarity between wealthy and impoverished debtors ended.
Whether in the famous Marshalsea in London where Charles Dickens had Little Dorritt’s father incarcerated (and where Dickens’s father had actually languished when the author was 12), or in the New Gaol in New York City, where men like Duer and Morris did their time, debtors prisons were segregated by class. If your debts were large enough and your social connections weighty enough (the two tended to go together) you lived comfortably. You were supplied with good food and well-appointed living quarters, as well as books and other pleasures, including on occasion manicurists and prostitutes.
Robert Morris entertained George Washington for dinner in his “cell.” Once released, he resumed his career as the new nation’s richest man. Before John Pintard moved to New Gaol, he redecorated his cell, had it repainted and upholstered, and shipped in two mahogany writing desks.
Meanwhile, the mass of petty debtors housed in the same institution survived, if at all, amid squalor, filth, and disease. They were often shackled, and lacked heat, clean water, adequate food, or often food of any kind. (You usually had to have the money to buy your own food, clothing, and fuel.) Debtors in these prisons frequently found themselves quite literally dying of debt. And you could end up in such circumstances for trivial sums. Of the 1,162 jailed debtors in New York City in 1787, 716 owed less than twenty shillings or one pound. A third of Philadelphia’s inmates in 1817 were there for owing less than $5, and debtors in the city’s prisons outnumbered violent criminals by 5:1. In Boston, 15% of them were women. Shaming was more the point of punishment than anything else.
Yes, but did Morris ever have to endure a Black Friday at Wal-Mart’s?