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Humanities Assignment: Justification on the idea of Credit Revolution


Task: Humanities Assignment Task: Calder calls the rapid rise of consumer credit a “revolution.” How does he justify the idea of a “credit revolution” and what were its chief characteristics?
Use the resource Financing the American Dream “A CULT URAL HISTORY OF CONSUMER CREDIT” by Lendol Calder for answering this.


The concept of consumer credit discussed in this humanities assignmentfacilitates the consumers to borrow money (Swanton and Gainsbury, 2020). The consumers can also incur debts while borrowing for consumption or other requirements. The consumer credit allows the consumers to make defer repayment of the borrowed amount over a period of time. Consumer credit helps the consumers to have easily accessible credit. With the help of consumer credit, the consumers can purchase assets or goods. The biggest advantage of consumer credit is that the consumers do not need to pay for good or asset in cash while making the purchase (Rona-Tas, 2017).

Credit revolution has been identified by Calder as a systematic approach. The small loans’ regulation, the rationalization as well as the expansion of the means for instalment purchasing are a part of the credit revolution. The time period between 1940 and the transition of the century are referred to as the period of fundamental changes. There have been cultural as well as economic changes (Calder, 2009).

Credit Revolution
The moral fabric of America has been weakened by the sudden rise of the consumer credit. In the book by Calder, this rapid increase in consumer credit has been termed as a revolution. Most of the people agree to the fact that this increase in consumer credit has been an unwise spread into the American economy. There are people who strongly oppose the idea of easy credit. As opined by Calder (2009), easy credit often has several detrimental impacts on the people and the economy. The easy availability of credit might result in unrestrained hedonism. Many people are led towards bankruptcy due to this easy credit. The present generation is habituated to spending as much as they wish. However, the previous generations who did not have access to easy credit used to plan their expenditures wisely. The ancestors of the present Americans controlled their expenditures in such a way so that they were never led into debts.

Presently, the people are leading a very affluent life. However, it is believed that this affluent lifestyle is like a bubble that would soon burst. The craving for American dream is like a puzzle. The more people try to find contentment in materialistic achievements, they keep sinking into the endless race, trying to make the means and ends meet. Lendol Calder on the other hand did not believe in these claims or fears (Calder, 2009). He found them wrong fundamentally or found them to be exaggerated unnecessarily. Consumer credit was not a post Second World War period’s invention. The predecessors as stated by Calder during the nineteenth century also indulged in borrowing for meeting the consumption requirements. As per Calder (2009) the credit revolution took place during the 1920s and 1930s. However, many are unaware of the facts and believe the credit revolution to have originated during 1950s or even the 1990s. This is not true. The people, who believed that the consumer credit would lead to economic collapse of the nation or bankruptcy, were proved wrong. The opponents of consumer credit comprise the bankers, preachers, government officials and journalists. The consumer credit was revolutionary as it was characterised by a sudden rise in easy credit. The proponents and opponents of consumer credit had their own opinions. The proponents believed that consumer credit will foster consumership and benefit the American households. On the other hand, the opponents believed that consumer credit was a curse for the economy, which would lead to an ultimate downfall of the nation. Between the years 1915 and 1940, there were many new credit institutions that came into existence. These credit institutions implemented new credit lending methods. They aimed at financing consumptions of new and various types. Therefore, they used the methods that facilitated higher amount of lending to greater number of people (Calder, 2009). There werecertain characteristics of the credit revolution. The people who invented the credit revolution, made use of the educational campaigns on public relations and advertisements for bringing the borrowing and lending activities away from the urban shadows. During 1920s, the household credit became the highest promoted services for consumers (Calder, 2009).

There are common taglines or marketing slogans for consumer credit that promote buying now and paying later. The different companies started advertising their easy payment schemes. According to Calder (2009), American consumership had got used to phrases like and ‘Take Advantage of Our Easy Payment Plan!’ and ‘Buy Now, Pay Later!’

The concept of credit for consumers changed completely in the society. The consumers in American households started incurring higher debts (Saiag, 2020). The idea, memory and experience about consumer debts changed completely for the American consumers.

As stated by Calder (2009), consumption debt started getting acceptance within the American society. People incurring debt for meeting consumption requirements were no longer ashamed. Credit for consumers started being justified and also recommended during the 1930s. This credit revolution gave rise to a new term known as consumptive debt. The debt that was incurred for consumption was no longer seen as a sign of poverty or improvidence. In fact, consumptive debt indicated respectability for the middle class (Calder, 2009). Calder realised that because thrift had always been a valued aspect of the American economy, credit revolution was hard to accept. Through consumer credit, the thrift was being discounted for all the classes. The American society believed that thrift was the core reason behind the prosperity of the nation and was considered a significant factor for the American citizens. The cultural and economic change brought the consumer credit into existence. However, consumer credit remains unaccepted and vilified by the society for long (Calder, 2009).

It can be concluded that consumer credit was revolutionary. There was no such concept like consumer credit before. It was an idea that had no precedent and was completely new to the American society. It has been agreed by economists and industrialists that after the industrial revolution, which was a shift from handicrafts or primitive means to machinery, the consumer credit is the second biggest revolution. There were many critics who did not support the idea of consumer credit. This was because they were uncertain and sceptical about the outcome of the credit revolution. Most of the critics thought that through instalment buying and borrowing the moral behind the decision making would be hampered. They thought that the economy would breakdown. However, credit revolution has proved them wrong. Even today, the world economy is following consumer credit and prospering with time. ?

Calder, L., 2009. Financing the American dream: A cultural history of consumer credit.Princeton University Press.

Rona-Tas, A., 2017.The off-label use of consumer credit ratings. Historical Social Research/HistorischeSozialforschung, pp.52-76.

Saiag, H., 2020. Financialization from the margins: Notes on the incorporation of Argentina's subproletariat into consumer credit (2009–2015). Focaal, 2020(87), pp.16-32.

Swanton, T.B. and Gainsbury, S.M., 2020. Gambling-related consumer credit use and debt problems: a brief review. Current Opinion in Behavioral Sciences, 31, pp.21-31.

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