Money from Nothing: indebtedness and aspiration in South Africa by Deborah James (review)

When following public debates on over-indebtedness and financial stability in South Africa, the story seems to be plain and easy to understand. Too many citizens are living beyond their means, so they drift into indebtedness. Their fate derived from behaving in an irrational way. The lesson of this plot comes forward clearly: everything would be fine if they would only follow the intended ways of the credit market.

In such a context, the multifaceted analysis of Deborah James, Money from Nothing: indebtedness and aspiration in South Africa provides important insights into the social dependencies and mutual obligations, which cannot be manipulated by individuals at their own convenience. Her focus lies on the middle class as the typical stratum of society that drifts into financial stress. She aims at complementing the aseptic model of a ‘contract-centred, market-oriented’ economy (which has been abandoned by most economists long ago, but enjoys a second life in many business newspapers and, unfortunately, political discourses) by adding stories from the lifeworld of ordinary citizens. The South African household as a place in which economic planning, consumption, reproduction and redistribution takes place, reflects complex conflicts that derive from historical heritage as well as from contradictory demands of contemporary society.

The book comprises seven chapters that cover quite different topics, which can be discussed here only in part. The first shows the impact of personal money lending on the social identity of the post-apartheid middle class and vice versa. The social advancement of many interviewees had been based on two factors: the investments of their parents’ generation in education; and on an allegiance to the post-apartheid state as main provider of well-paid jobs. The consequence, however, consists quite often in a multitude of pretensions from the family. Not only that keeping the own nuclear family in the middle class is an expensive endeavour; South African social conditions usually result in demands of the less lucky relatives. In this regard, marriage turns out to be an unviable venture for men and women alike, because the finances of a couple get stressed from a whole range of claims like bridewealth, support for family members and the necessity to defend a social status in the community. This is the main reason why the precocious recommendations of commentators, indebted people should abandon their conspicuous consumption, is wasted. James reveals how domestic thriftiness can go hand in hand with indebtedness.

The second chapter turns to the societal negotiation of the topic, with an inevitable focus on the environment in which the Marikana killings took place. It is no longer a secret that money lenders chose the tightened living conditions around the mines as a profitable market area. The remarkable thing about the Marikana protests was that a social problem, which usually is treated as the destiny of isolated individuals, was taken up as a topic of collective action of solidarity by the miners.

Of special importance are James’ results on the debt counselling industry. Often confronted with non-compliant debtors and unwilling creditors, their power is restricted to the mediation of new time frames of repayment schemes. This presents absolutely no solution to the really over-indebted. Internationally, South Africa takes an exceptional position by offering no option of debt relief (Niemi et al 2009). Debt discharge is to the advantage of debtors, creditors and society alike. Debtors can get back into social life, creditors benefit because debtors receive new incentives to earn money and pay back at least a part of their financial obligations, and society is relieved from the need to support people who have no prospect of an autonomously led life (Kilborn 2007). By insisting on the absolute defence of property rights in the National Credit Act, the whole debt counselling procedure is turned into a fruitless but expensive rescheduling operation. Real help for the over-indebted needs a debt relief mechanism that burdens some more risk on creditors, a move...