Debt and Financialization of Childhood

by

Max Haiven

• LAST REVIEWED: 25 April 2022
• LAST MODIFIED: 25 April 2022
• DOI: 10.1093/obo/9780199791231-0253

Introduction

Financialization denotes the growing power, wealth, and influence of the financial sector of the capitalist economy, usually referring to the period since the early 1980s. The financial sector is often identified by the acronym FIRE, for Finance, Insurance, and Real Estate. In recent years, scholars and activists have shown that financialization not only dramatically affects business and government, but also society and culture at large. It even affects children, though they are often conspicuously excluded from economic and financial life by law, custom, and morality. Hedge funds and other major financial players are deeply invested in the privatization of education. Insurance companies routinely speculate on systemic and environmental risks to young people. And the movement of real estate, including urban displacement, has significant impacts on children’s well-being. The FIRE sector is, essentially, built on the manipulation of various forms of credit and debt. Today, the world has roughly $US225 trillion of outstanding debt, much of it owed by governments who must increasingly borrow from financial institutions to operate, giving the latter a profound influence over social policy, which tends to encourage neoliberal and market-friendly agendas. The period of financialization has also seen a massive explosion of consumer debt. This is not only the case in the Global North, where rising costs of education, housing, and healthcare, combined with stagnant incomes and rising prices, encourage and necessitate borrowing from increasingly integrated and powerful financial institutions. It also increasingly occurs in the Global South, where microfinance lending has encouraged the world’s poorest to borrow in the name of entrepreneurialism and survival. While debts are almost never incurred by children directly, they have a major influence on children’s lives via their impact on their families and communities. On a more abstract level, financialization and debt necessarily imply a relationship with the future, something often associated with children and childhood. Notions of intergenerational debts are a key feature of almost every culture. In financialized societies, pro-market and right-wing perspectives typically frame government debts and deficits as threatening to overburden future generations, usually as a means to justify austerity in the present (including, ironically, cutting funding to health, education, and social provisioning that benefit children). A similar rhetoric recasts education as an “investment in the future,” reflecting the pervasiveness of financialization as a process of sociocultural transformation. For all that, the connections between financialization, debt, and childhood have not yet been fully explored by scholars: no single book and only a handful of articles or book chapters have been dedicated to the topic. Almost all frame debt and financialization as exclusively negative. Very few explore how children might be active or creative agents amid these social forces.

General Overview

An edited “handbook,” edited by Mader, et al. (2020) offers a comprehensive interdisciplinary overview of financialization as a phenomenon that must be viewed as at once economic, political, social, and cultural. Most authors agree that financialization describes an accelerating, but not homogeneous, worldwide process since the 1980s that occurs in tandem with the rise of neoliberalism and corporate-led globalization, and emerges thanks in part to the rise of digitally interconnected global communications networks. But several authors also identify financialization by the more insidious ways the FIRE sector’s codes, metaphors, measurements, priorities, and ideologies have come to influence a vast diversity of public and private social institutions and have dramatically impacted society and culture. Martin’s 2002 landmark study focuses on the way a financialized mindset comes to be expected of citizens of financialized states, including, notably, a sociocultural shift marked by the increasing emphasis, since the 1990s, of teaching young people financial management skills and encouraging them to adopt financialized dispositions. Walker, et al. 2021 detail many of the ways that, in a “competitive” global economy, policymakers and educators have encouraged children to embrace financial ideas from a young age. This work builds on a foundation set by Schor’s 2005 investigations of the commercialization of childhood, although commercialization and financialization are distinct if entangled concepts. Under financialization, as Gill-Peterson 2015 argues, it has become commonplace to hear a range of actors speak of children as “investments in the future” of the nation or the economy. Indeed parents are encouraged to see their children’s curricular and extracurricular cultivation as worthwhile investments in the name of improving their capacity as bearers of human capital. As Cooper 2017 argues, in the postwar years neoliberalism’s ideological architects were fixated on the nuclear family as the elemental and proper unit of economic life and on questions of intergenerational wealth, human development, and the power of financial obligation. For Morris and Featherstone 2010, this neoliberal fixation on family and children as a site of literal and metaphorical investment has produced economic contexts marked by uneven and unjust rewards and punishments, which frequently represent a crushing burden for adults and children alike. Meanwhile, in a report for the London, UK-based Children’s Society, Capron and Ayre 2015 outline many of the specific harms of debt to youngsters. We know less about the impact of debt and financialization on children’s ideas and approaches to the world. Haiven 2014 draws on Martin’s work to explore how children “learn to learn” about financialization through their play with the globally popular Pokémon brand, especially the associated collectable trading cards.

• Capron, Lucy, and David Ayre. The Wolf at the Door: How Council Tax Debt Collection Is Harming Children. London: The Children’s Society, 2015.

  A report on the impacts of household debt on children, based on a survey and interviews with indebted adults and the children who lived with them in the United Kingdom, revealing their material and psychological toll on adults and children. The report focuses in particular on tax debt owed to municipalities and features testimonies from affected adults and children.

• Cooper, Melinda. Family Values: Between Neoliberalism and the New Social Conservatism. New York: Zone, 2017.

  DOI: 10.2307/j.ctt1qft0n6

  An investigation of the way the family is theorized by the ideological architects of neoliberalism, including a discussion of the way their work enabled the unlikely alliance of, on the one hand, free-market capitalists and, on the other, conservative religious communities.

• Gill-Peterson, Julian. “The Value of the Future: The Child as Human Capital and the Neoliberal Labor of Race.” WSQ: Women’s Studies Quarterly 43.1 (2015): 181–196.

  DOI: 10.1353/wsq.2015.0023

  Drawing on theorist Lee Edelman’s rejection of the way the “figure of the child” has been manipulated to reproduce hegemonic social relations, Gill-Peterson notes the importance of the child to Gary Becker and other neoliberal thinkers as a potential bearer of future human capital. Speaking back to Edelman and Foucualt, the author demonstrates the role of anti-Black racism in this process in the United States.

• Haiven, Max. Cultures of Financialization: Fictitious Capital in Popular Culture and Everyday Life. London and New York: Palgrave Macmillan, 2014.

  DOI: 10.1057/9781137355973

  Haiven argues that financialization not only affects economics and politics but also society and culture, and indeed that it relies upon the transformation of the social imagination that makes each social actor into an active financial subject. Chapter 4 focuses on the way financialization affects children’s play.

• Mader, Philip, Daniel Mertens, and Natascha van der Zwan, eds. The Routledge International Handbook of Financialization. London and New York: Routledge, 2020.

  A comprehensive and multifaceted interdisciplinary handbook featuring many of the leading scholars of critical finance studies sharing state-of-the-field essays.

• Martin, Randy. The Financialization of Daily Life. Philadelphia: Temple University Press, 2002.

  Martin’s first book has become a classic in critical studies of financialization, advancing the argument that financialization represents a paradigmatic shift in the relationship between the system of capitalism and social actors toward a logic of speculation. Chapter 2 focuses on financial education and the targeting of young people.

• Morris, Kate, and Brid Featherstone. “Investing in Children, Regulating Parents, Thinking Family: A Decade of Tensions and Contradictions.” Social Policy and Society 9.4 (2010): 557–566.

  DOI: 10.1017/s1474746410000278

  A critical analysis of how neoliberal social policy and discourse more generally frames “the family” as a site of certain forms of intervention aimed at “investing” for the benefit of children. The authors show that this mobilization of “the family” often erases complexities of the people and relationships to which the term refers, and creates punitive pressures and expectations whereby the development of children is downloaded as a personal or familiar responsibility, rather than a social good.

• Schor, Juliet B. Born to Buy. New York: Scribner, 2005.

  Considered a recent classic of public-facing economic sociology, Schor details the ways that, over the past century, children have been systematically targeted as consumers through advertising and the integration of corporate interests into public education. While it is beyond the scope of her study, the techniques and processes Schor details help us understand how childhood is being financialized.

• Walker, Carl, Peter Squires, and Carlie Goldsmith. “Learning to Pay: The Financialisation of Childhood.” In Growing Up and Getting By: International Perspectives on Childhood and Youth in Hard Times. Edited by John Horton, Helena Pimlott-Wilson, and Sarah Marie Hall, 193–209. Bristol, UK: Policy Press, 2021.

  The first and only overview of research into financialization and childhood with a focus on formal financial literacy programs targeting children and social impact bonds that have come to reshape public funding for youth programs and transform them into vehicles for speculative investment.