The High Costs of Microcredit

I’m in two seminars this semester – Anthropology of Development, and Capitalism and Neoliberalism – which often overlap in, as you can imagine, some pretty depressing and enraging ways. From the complicity of NGOs in reinforcing the social networks in Rwanda that were mobilized in the genocide to the ways that U.S. bases employ migrant workers in slave-like conditions [pdf], development and neoliberalism have their share of horror stories on their own, and it’s no surprise that the neoliberal mindset makes its way into the development apparatus.

In my class on development, one of the ethnographies we read was Aminur Rahman’s Women and Microcredit in Rural Bangladesh, which outlines how microcredit programs such as the Grameen Bank actually send their clients into cycles of ever-increasing debt as interest mounts. In typical microcredit schemes, peer pressure acts as collateral as peers in microcredit groups ensure debt repayment in order to continue qualifying for loans. Other forms of pressure, from women of higher status trying to form lending circles or from husbands who want access to capital, also force women into the system and into debt in the first place. Rahman outlines how a program seeking to empower women by providing them with loans actually uses patriarchal mechanisms to enroll them and then ensure debt repayment at all costs.

One of many aspects of neoliberalism has been how people increasingly view things in neoliberal, economic terms that had previously been outside of the market. My class touched on a variety of these issues, one of which was the growing black market for kidneys, where the world’s poor are turning to sell organs in exchange for meager amounts of money and poor health while the wealthy jump over everyone waiting on a donor list, and Nancy Scheper-Hughes’ work to try to document and stop it. As this trade continues, the poor who are scammed into selling a kidney (or who do so out of desperation) wind up with poor health, little money to show for their troubles, and sometimes the stigma of having sold a kidney.

These two specific topics came together in a recent episode of Vice. Featuring anthropologists Scott Carney and Monir Monirauzzaman, the second half of the episode focuses on the kidney trade in Bangladesh, where there are many towns or even families where numerous people have sold kidneys to get by (the first segment, on LBGT rights in Uganda, is also worth watching). The segment, titled “Kidneyville,” features interviews with some the residents of the town of Kalai who have sold kidneys out of desperation. And here’s the connection:

We weren’t surprised to find out that people regretted giving up their kidneys, but we were shocked to hear many say it was to pay off serious debts from microfinance loans which were given to them by local non-profit organizations.

“I took one loan,” one man says, “but that loan wasn’t fully repaid so I took another loan. I became deep in debt.” Another man describes how a non-profit literally took the roof from over his house since he was behind on payments. He then sold his kidney and then bought his roof back from the NGO. One woman describes how the NGO came after her when her husband killed himself because of his indebtedness.

Development programs that send people into debt in the name of helping them get out of poverty, instead committing them to debt cycles that lead them into another incredibly asymmetrical exchange. And selling a kidney still doesn’t get people out of debt to the microcredit groups, but it could cause health problems, making it harder for the poor to then find work and pay off what’s left of their debts.

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Debating Free Higher Education

The latest issue of Dissent is centered on the theme “Arguments on the Left.” The issue brings together disparate voices from across the Left to address some of the biggest issues we are confronting today. You should read the whole thing, which includes discussions on party politics, solidarity movements, justice, civil liberties, labor, reproductive rights, anarchism, Marxism, Zionism, and religion. Here, I’m going to link to a blog-favorite: the issue of free higher education. I’ve been on team-free-higher-ed for a long time, and three smart minds debate the topic in Dissent. Here are some excerpts:

Staking out a controversial claim, Max Bruenig argues that free college is actually a regressive demand, stating that “making college more or entirely free would most likely boost the wealth of college attendees without securing any important egalitarian gains.” He continues:

Given… class-based differences in attendance levels, institutional selection, and current student benefit levels, making college free for everyone would almost certainly mean giving far more money to students from richer families than from poorer ones. Of course, providing more generous student benefits might alter these class-based skews a bit by encouraging more poor and middle-class people to go to college or to attend more expensive institutions. But even reasonably accounting for those kinds of responses, the primary result of such increased student benefit generosity would be to fill the pockets of richer students and their families.

Conceding that college is mostly a place for the privileged, Tressie McMillan Cottom explains that people often don’t attend college due to cost, but also because “going to college is complicated. It takes cultural and social, not just economic, capital. It means navigating advanced courses, standardized tests, forms. It means figuring out implicit rules—rules that can change.” She lays out the inequalities and obstacles that keep people out of college beyond cost, arguing for an expansion of the conversation beyond its usual limits. She closes with a powerful rejoinder on education as a public good:

I do not care if free college won’t solve inequality. As an isolated policy, I know that it won’t. I don’t care that it will likely only benefit the high achievers among the statistically unprivileged—those with above-average test scores, know-how, or financial means compared to their cohort. Despite these problems, today’s debate about free college tuition does something extremely valuable. It reintroduces the concept of public good to higher education discourse—a concept that fifty years of individuation, efficiency fetishes, and a rightward drift in politics have nearly pummeled out of higher education altogether. We no longer have a way to talk about public education as a collective good because even we defenders have adopted the language of competition… Those of us who believe in viable, affordable higher ed need a different kind of language. You cannot organize for what you cannot name.

Already, the debate about if college should be free has forced us all to consider what higher education is for. We’re dusting off old words like class and race and labor. We are even casting about for new words like “precariat” and “generation debt.” The Debt Collective is a prime example of this. The group of hundreds of students and graduates of (mostly) for-profit colleges are doing the hard work of forming a class-based identity around debt as opposed to work or income. The broader cultural conversation about student debt, to which free college plans are a response, sets the stage for that kind of work. The good of those conversations outweighs for me the limited democratization potential of free college.

Mike Konczal argues for debt-free college education because of the vast inequality that is increasing thanks to student loan debt. He also sketches out how the erosion of higher education as a public service is hurting the country as a whole, and how it is tied to other aspects of our economy – “public disinvestment in the states has been paired with generous tax cuts for rich individuals and corporations” and “for-profit schools that have been filling in the gaps have saddled many poor people with lifelong debts.” He also makes a strong argument for higher education’s ability to help close the gap between classes in America and bring people together in unique ways:

Education is a right that the government must grant. Higher education, then, shouldn’t be left to a handful of private schools, where administrators pursue their own objectives independent of public need, or to the market, which is only interested in how much it can profit at any given time. The point of public higher education is to collapse precisely this distance between elite and mass education, by ensuring better access and higher quality that would never otherwise be available on a large scale.

Higher education also provides one of the last spaces for young people not shaped solely by market values. The American liberal arts model is unique in that it allows for experimentation, learning, and community-building. Attacks on higher education haven’t simply been about raising tuition but about dismantling this model itself. A notable example is Wisconsin Governor Scott Walker’s recent attempt to remove phrases such as “improve the human condition,” “the search for truth,” and “public service” from the state university’s mission, reorienting it simply toward the needs of business.

All three of these pieces are worth reading and thinking about. I’m obviously partial to the latter two – education is a fundamental right to those who want it, a path for class mobility, a means through which to improve society as a whole, and a signifier of what we value in the communities we live in. The college population may be unequal, but – in my opinion – the idea of college itself continues to be a vital institution which we must defend.

This is just one of many conversations happening on the left – check out the rest.

Update, October 18: Sara Goldrick-Rab has also written a salvo also on the topic of free higher education. Though published by Brookings, it speaks clearly to the Left (don’t read the other stuff in the series there, which seems more like the typical). Goldrick-Rab makes clear the stakes that we’re facing. Higher education was possible and attainable for those who wanted it two generations ago, but it has been harder and harder to get precisely as a college degree becomes more ubiquitous and more necessary for our futures:

In the 1970s, targeting financial aid on the poorest individuals made sense—after all, most people didn’t want to attend college, it wasn’t required, and college costs were low enough that the Pell Grant largely covered the bills.

Today, that model is failing: the vast majority of the populace wants access to affordable, high-quality public higher education, it is required by the modern labor market, and college costs are so high that grants and scholarships provide but a meager discount restricted to only a fraction of students with financial need. Means-tested financial aid, administered via a massive bureaucracy, leaves out both the very poorest—who cannot navigate the system—and squeezes the middle-class, who are offered only loans.