Credit inequalities

Question 1

What are the 2 categories of people created by the market?

Answer 1

• owners of the means of production: bourgeoisie
• those who must sell their labour to survive: proletariat, working class

Question 2

What is Weber’s view on markets and inequality?

Answer 2

• “categorical” forms of inequality (man/woman, straight/queer) were external influences on the market, as markets don’t recognize status differences just economic resources.
• if you can free the market of these external distortions, then the market should no longer discriminate along those lines.

Question 3

What are “class situations” according to Weber?

Answer 3

when people have similar “chances” in life due to a shared set of circumstances.

Question 4

What is a classification situation according to Fourcade and Healy?

Answer 4

when market-generated categories “have distinctive and consequential class-like effects on life chances and social identities”

Question 5

What are the 2 types of classifications systems that have governed credit markets and shaped people’s life chances according to Healy and Fourcade?

Answer 5

1. boundary: distinguish between people who are “inside” and “outside” the category eg. credit-worthiness
2. within-market: includes people more refined set of categories/ places them on some kind of a continuous scale eg. credit scoring

Question 6

How has boundary classification contributed to credit exclusion?

Answer 6

non-economic criteria have long been used to determine credit worthiness, denying certain groups of people the ability to borrow money from mainstream lending institutions.

Question 7

What is red-lining?

Answer 7

• creating maps of U.S. metropolitan areas and color-coding neighborhoods by how risky issuing mortgages in those neighborhoods was estimated to be.
• “Risky” neighborhoods color-coded red: key metric for determining riskiness was presence of Black residents nearby.
• believed to be predictor for declining property values –> “unsafe” environment to issue mortgages
• unable to access mortgage credit, Black Americans had more challenges in buying a home and accumulating wealth in form of home ownership

Question 8

What are ways the poor paid more?

Answer 8

• renting furniture (which, over time, costs more than purchasing furniture outright)
• “buy-now-pay-later” installment schemes that often included hidden charges or exorbitant interest rates.

Question 9

Name a reason indigenous people face barriers to accessing credit markets

Answer 9

those living on reserve lands cannot use their homes as collateral, given that the land is communal and not private property