It’s been less than two weeks since I arrived in Washington DC, as a Visiting Professor at the Busch School of Business of the Catholic University of America. I soon realized there were three things I needed in order to stop being a non-person in this country: a social security number, a US cell phone, and a bank account with a credit card. Among the three is some sort of chicken and egg relation, since they are all linked, but you never know which comes first. The most difficult item to obtain by far, however, is the credit card. Why is this?
I have been raised in the belief that you have to live within your means. (Nothing wrong with living below what you can afford either.) Avoid getting in debt, not only because you could lose your freedom and independence, but also –perhaps most of all– because it could be a sign of moral failing, a lack of foresight, or inability to rein in desires. A person with many debts is not to be trusted. Borrow only when inevitable, preferably from people you know, and pay back as soon as possible. This has always been my life’s principle and it has been the dominant ethos in most places where I’ve lived. In fact, many stores even display a sign saying, “Your credit is good, but we need cash.” “Crazy Rich Asians” may be a Hollywood blockbuster, but it doesn’t represent the everyday experiences of more than half of humanity living in the Continent.
But here, in the US, it’s different. Not only is it okay to borrow money, it is almost obligatory, even if you had enough of your own. Going in debt is certainly not frowned upon, so long as one pays the minimum on time. The stigma, rather, is for those who have no debt because that means no one wants to lend them money; they are not credit-worthy. Borrow as much as you can, therefore, for that indicates good social standing and virtue. Frugality and self-sufficiency are easily tossed out of the window. No need to turn to people you know in taking out a loan; once you’ve established a good credit record, total strangers will come knocking at your door (or call on your phone at dinner-time). Doesn’t the Gospel say, “To those who already have, even more will be given”? In order to be credit-worthy, people give up the freedom of being debt-free.
It’s amusing to read the suggestions in the University’s ‘International Scholar Handbook’ for establishing credit. We are encouraged to open a credit-line at the local store where we shop for everyday items. We are advised to sign-up at a gym and pay monthly dues. And even if we had enough cash to rent an apartment, or buy furniture, or a car, we should nonetheless take out a loan, putting a down payment and financing the rest, to improve our credit-standing. It’s as if the whole of society were shouting, “Your cash is good, but we need credit.”
Arguably, the US best exemplifies the ideal of a ‘commercial society’ along the lines described by the two Adams of the Scottish Enlightenment, Ferguson and Smith, as well as the homegrown Federalist, Alexander Hamilton (inspiration for the eponymous musical, which I have yet to see, by Lin-Manuel Miranda). Debt and loans form part of the social glue that keeps the market economy together. There is some truth in this and it is plain for anyone, visitor or local to see.
Yet I have a beef with the fact that hereabouts, you’re not credit-worthy unless proven otherwise. Whatever happened to the presumption of innocence? Could I appeal to the Fifth Amendment and bring this ‘unjust taking’ to Court?
Alejo José G. Sison teaches at the School of Economics and Business at the University of Navarre and investigates issues at the juncture of ethics, economics and politics from the perspective of the virtues and the common good. For the academic year 2018-2019, he is a visiting professor at the Busch School of Business at the Catholic University of America. He is an editor of the recently published “Business Ethics: A Virtue Ethics and Common Good Approach” (Routledge 2018). He blogs at Work, Virtues, and Flourishing from which this article has been republished with permission.