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Borrow: The American Way of Debt
In this lively history of consumer debt in America, economic historian Louis Hyman demonstrates that today’s problems are not as new as we think.
Borrow examines how the rise of consumer borrowing—virtually unknown before the twentieth century—has altered our culture and economy. Starting in the years before the Great Depression, increased access to money raised living standards but also introduced unforeseen risks. As lending grew more and more profitable, it displaced funds available for business borrowing, setting our economy on an unsustainable course. Told through the vivid stories of individuals and institutions affected by these changes, Borrow charts the collision of commerce and culture in twentieth-century America, giving an historical perspective on what is new—and what is not—in today’s economic turmoil.
A Paperback Original
Borrow examines how the rise of consumer borrowing—virtually unknown before the twentieth century—has altered our culture and economy. Starting in the years before the Great Depression, increased access to money raised living standards but also introduced unforeseen risks. As lending grew more and more profitable, it displaced funds available for business borrowing, setting our economy on an unsustainable course. Told through the vivid stories of individuals and institutions affected by these changes, Borrow charts the collision of commerce and culture in twentieth-century America, giving an historical perspective on what is new—and what is not—in today’s economic turmoil.
A Paperback Original
306 pages, Paperback
First published January 1, 2012
21 people are currently reading
568 people want to read
About the author
Louis Hyman
11 books22 followersLouis Hyman attended Columbia University, where he received a BA in history and mathematics. A former Fulbright scholar and a consultant at McKinsey & Co., he received his PhD in American history in 2007 from Harvard University. He is currently an assistant professor in Cornell University’s School of Industrial and Labor Relations, where he teaches history.
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Displaying 1 - 24 of 24 reviews
February 20, 2013
Interesting and well-researched narrative on the evolution of debt in American society and how the economy and business of debt evolved as society changed from an agrarian, localized society (where credit was routine and based on personal relationships) to a wage-based more nationalized economy (where installment credit was enabled by the regular paycheck replacing the seasonal payments from the harvest) to a consumer economy where the debt itself became the commodity, with consequences that we all can see.
One interesting tangent that I feel the author didn't explore, but could have, would be the intersection of debt and marginalized populations. He touches on it when he talks about how the credit departments at department stores (some of the first issuers of credit) initially viewed their role as surrogate husbands controlling what were assumed to be the spendthrifty ways of female customers. Similarly, the exclusion of racial minorities from the formal banking system has had repurcussions that the author kind of glosses over. There are monographs, if not books, in these topics, which persist today. (Ask a single woman trying to get a mortgage on her own.)
Overall, very interesting read.
One interesting tangent that I feel the author didn't explore, but could have, would be the intersection of debt and marginalized populations. He touches on it when he talks about how the credit departments at department stores (some of the first issuers of credit) initially viewed their role as surrogate husbands controlling what were assumed to be the spendthrifty ways of female customers. Similarly, the exclusion of racial minorities from the formal banking system has had repurcussions that the author kind of glosses over. There are monographs, if not books, in these topics, which persist today. (Ask a single woman trying to get a mortgage on her own.)
Overall, very interesting read.
August 31, 2018
> Borrow examines how the rise of consumer borrowing—virtually unknown before the twentieth century [...]
Oh the sweet old days when you could bet on:
* what grandparent is going to die of hunger this year
* which of the children are going to die of exposure this winter
* watching daddy die of tetanus
* finding the remains of a cousin eaten by the wolves
There was no debt in those days. And serfdom was a concept invented by Google.
Oh the sweet old days when you could bet on:
* what grandparent is going to die of hunger this year
* which of the children are going to die of exposure this winter
* watching daddy die of tetanus
* finding the remains of a cousin eaten by the wolves
There was no debt in those days. And serfdom was a concept invented by Google.
August 18, 2012
Think of how many people have lost their jobs and their homes in this recession. The author starts the book with a story a just such a family who loses it all. It sounds just like it happened today. However, the actual story he tells happened in 1929! Guess what? History repeats itself! Until the controls that were implemented after the Great Depression were rescinded, this problem never occured again until today. We just don't learn - after all big government is evil, even when it works to our mutual benefit.
The book starts this way, but then goes in the history of personal finance and debt. We baby boomers grew up in a time when debt was not good. Even having a mortgage was on the edge. Then in the 60's and 70's credit cards became established and with the computer explosion have become ubiquitous since the 90's. Having debt is a way of life today. The author makes no judgement on that. However credit cards fueled the explosion of consumer goods that now everyone could have without having the money to pay for them. What a plan.
He also shows how the banks were able to game the system to provide them ways to hedge their money for these 'loans', meaning skimming off the interest payments without having to have the capital to support all the loans.
This is a good book if you know a little bit of finance. It isn't too technical, but it does tend to drag in places. The history of debt is interesting though, and how it improved our middle class lives is an amazing thing. Somehow we make money out of nothing and it works. I say 'For how long?'
The book starts this way, but then goes in the history of personal finance and debt. We baby boomers grew up in a time when debt was not good. Even having a mortgage was on the edge. Then in the 60's and 70's credit cards became established and with the computer explosion have become ubiquitous since the 90's. Having debt is a way of life today. The author makes no judgement on that. However credit cards fueled the explosion of consumer goods that now everyone could have without having the money to pay for them. What a plan.
He also shows how the banks were able to game the system to provide them ways to hedge their money for these 'loans', meaning skimming off the interest payments without having to have the capital to support all the loans.
This is a good book if you know a little bit of finance. It isn't too technical, but it does tend to drag in places. The history of debt is interesting though, and how it improved our middle class lives is an amazing thing. Somehow we make money out of nothing and it works. I say 'For how long?'
February 12, 2012
It's almost impossible to imagine modern life without credit cards, or mortgages, home equity lines of credit, car loans, or student loans. We take the ability to borrow for granted, but it is a relatively recent development, with tremendous economic, political, and social consequences -- and yet, most of us know shockingly little about it. Louis Hyman's brief and extremely readable new book, Borrow, is an attempt to change that.
Hyman shows that our modern view of debt was the unintended consequence of many other decisions, from the birth of the Federal Housing Administration in the Great Depression, to the rise of great department store empires and their discount chain successors, to the bank networks that gave us credit cards, down to the securitization boom and the collapse of collateralized mortgage obligations (CMO) that spawned the 2008 recession.
This is a fine example of economic history writing with much-needed perspective on our current financial troubles.
Hyman shows that our modern view of debt was the unintended consequence of many other decisions, from the birth of the Federal Housing Administration in the Great Depression, to the rise of great department store empires and their discount chain successors, to the bank networks that gave us credit cards, down to the securitization boom and the collapse of collateralized mortgage obligations (CMO) that spawned the 2008 recession.
This is a fine example of economic history writing with much-needed perspective on our current financial troubles.
April 28, 2012
This was a pretty interesting book that chronicled the history of American debt, starting from the early 1900s. It was definitely interesting to learn about the slow evolution of debt from an unmentioned character blemish through common acceptance to a near necessity. It was interesting to learn the history of American debt. It was amazing to learn things like balloon mortgages existed in the 1910s. The history of American debt was chronicled fairly well in this book.
I guess my only regret is that the book was pretty repetitive. There's foreshadowing, and then there's telling the same story with different words over and over. But it was still a rather interesting history of American debt.
History of American debt.
History of American debt.
History of American debt.
History of American debt.
History of American debt.
I guess my only regret is that the book was pretty repetitive. There's foreshadowing, and then there's telling the same story with different words over and over. But it was still a rather interesting history of American debt.
History of American debt.
History of American debt.
History of American debt.
History of American debt.
History of American debt.
February 26, 2013
fairly interesting, readable history of personal debt, tracking changes in the regulation of mortgages, the "securitization" of credit card debt as a (misleadingly) simple way of managing the risk of default, etc.
Striking reminder of how recent the widespread availability and use of bank credit cards is and how rapidly it increased in the '70's:
"A 1968 sample found that only 17% of Americans had credit cards, as opposed to the 62% who had gasoline company cards. Men who used credit cards, moreover, were disproportionately affluent, urbane, and more likely to agree with statements such as 'I like to think I am a bit of a swinger'" (p. 151).
not sure it has quite the same connotations in 2013 when i dig out the visa to pay for groceries. Probably marks me as likely to agree with "I prefer not to carry a lot of cash around, and I like getting 1% back".
Striking reminder of how recent the widespread availability and use of bank credit cards is and how rapidly it increased in the '70's:
"A 1968 sample found that only 17% of Americans had credit cards, as opposed to the 62% who had gasoline company cards. Men who used credit cards, moreover, were disproportionately affluent, urbane, and more likely to agree with statements such as 'I like to think I am a bit of a swinger'" (p. 151).
not sure it has quite the same connotations in 2013 when i dig out the visa to pay for groceries. Probably marks me as likely to agree with "I prefer not to carry a lot of cash around, and I like getting 1% back".
December 26, 2016
An absolutely fantastic and wonderful history of debt in the United States, beginning in the 1800's through the present day. It details the sequence of changes in culture and policies that brought us to where we are today. It would also provide better understanding for those who need to evaluate how much debt they wish to incur.
Interesting episodes include the reason for a barter economy in America's west during the late 1800's, how General Motors introduced installment payments for automobiles, and an idea to finance venture capital by issuing securities similar to those backed by mortgages.
Interesting episodes include the reason for a barter economy in America's west during the late 1800's, how General Motors introduced installment payments for automobiles, and an idea to finance venture capital by issuing securities similar to those backed by mortgages.
September 9, 2012
This was not the book I hoped it would be, but Hyman has written a very readable short introduction to consumer debt as it developed in the U.S. I recommend it because it is short, free of jargon, and very pleasingly written. It will give the lay reader a good introduction to the debt crises that will make other, more specialized, studies of the crisis easier to understand.
February 28, 2013
The author did a great job of turning an otherwise dry and tedious topic into a pretty engaging and concise read. I enjoyed the many vignettes and felt I got a good understanding of where we've been and where we have the ability to go in how debt instruments are utilized in the US.
June 13, 2012
What made me decide to read this? I may (or may not) finish it after the new novels I just got.
November 7, 2012
A decent history of the consumer economy that contradicts various misrepresentations made by our political candidates and the two-party media stations. Read with coffee.
April 3, 2023
Written in 2012, Hyman reviews the similarities between the 1929 financial crisis and the history of how the conditions ripe for the 2007/2008 housing subprime mortgage crisis were formed. In both instances, wild speculation was empowered by easy credit. Hyman expects his audience will be shocked at how much both meltdowns were alike.
He then traces a history of increasing consumer debt in America, from credit at department stores and installment payments, to the invention of credit cards for personal use, and the bundling of mortgages into securities. Low Federal rates, easy credit and specious safety ratings led to a hunger for investment into risky products. No surprise these became bubbles and letdowns. Hyman's book is even more interesting given we've seen another cycle of these same things in 2020/2021 with almost zero Federal rates, crypto, and speculative stocks like GameStop. The early twenties of the most recent century again had lots of money available and poor returns on safer investments.
Hyman's solution is to make investments in productive things more profitable, rather than try to change human nature. He suggests the Federal rates remain decent, so Treasury bonds and other safer venues stay attractive. This dampens wild lending. Wrapping business loans into securities would be a creative way to increase credit to economic, job making ventures. This would be an improvement over securities for credit card and mortgage debt, which aren't productive and don't incentivize the right kind of economic growth. Consumer debt has become too profitable so everything is aligning to make it easier for people to be enslaved to it.
He then traces a history of increasing consumer debt in America, from credit at department stores and installment payments, to the invention of credit cards for personal use, and the bundling of mortgages into securities. Low Federal rates, easy credit and specious safety ratings led to a hunger for investment into risky products. No surprise these became bubbles and letdowns. Hyman's book is even more interesting given we've seen another cycle of these same things in 2020/2021 with almost zero Federal rates, crypto, and speculative stocks like GameStop. The early twenties of the most recent century again had lots of money available and poor returns on safer investments.
Hyman's solution is to make investments in productive things more profitable, rather than try to change human nature. He suggests the Federal rates remain decent, so Treasury bonds and other safer venues stay attractive. This dampens wild lending. Wrapping business loans into securities would be a creative way to increase credit to economic, job making ventures. This would be an improvement over securities for credit card and mortgage debt, which aren't productive and don't incentivize the right kind of economic growth. Consumer debt has become too profitable so everything is aligning to make it easier for people to be enslaved to it.
December 6, 2022
This book was very informative and interesting but ultimately hard to get through.
A lot of the language and terms I ended up asking my husband who works for a bank about or googling.
But the historical stuff was very interesting especially the history of housing and mortgages/mortgage backed investments.
A lot of the language and terms I ended up asking my husband who works for a bank about or googling.
But the historical stuff was very interesting especially the history of housing and mortgages/mortgage backed investments.
March 11, 2018
the history of debt in the United States is special indeed. Hyman made reexamine a lot of perception of prosperity and an American identity. personal credit has come long way in the United States, and I appreciate historical narrative more
January 29, 2019
A book which deals with the History of Debt sounds pretty boring but the author does a really good job presenting the way debt has changed over the years. Debt affects all of us and knowing how it came to be this way is interesting and useful.
March 23, 2018
Very informative but hard to get through. I don’t know how to write about the history of debt in an engaging way but I did learn a lot!
December 22, 2018
Great intro chapter, but the rest of the book is disappointing, poorly-written, and too dense.
January 6, 2017
so the other week i was hanging with a coworker and i mentioned my difficulties finding a bank that would let me have two chequing accounts and no savings which was what i'd done back home to save while avoiding interest
(for the curious what i did was put my money in an account at the local credit union whose interest rates are so low that in the past six months i have only gained one cent on the minimum deposit i put into the savings account. i will of course be donating this penny to charity)
anyways i explained this was because of the islamic prohibition against interest and she was like oh wow, that's interesting, i didn't know that was a thing! why?
and then i cried inside because i am nowhere near as good a muslim as i should be and whenever people ask me things like this i'm like i know there is a reason...but the thing is i haven't really read up on it in awhile...i just kinda live my life in islamic boundaries and don't educate myself as much as i should...i'm sorry!!!!!!!
ANYWAYS. having read this book i can say GOD KNOWS WHAT HE'S ABOUT WHEN HE FORBIDS THAT WHICH IS HARMFUL TO US, INTEREST IS WHY YOU END UP WITH PEOPLE INVESTING THEIR MONEY INTO FINANCE INSTEAD OF REAL COMMODITIES AND PLUNGING US INTO RECESSIONS WHEN BUBBLES BURST AS THEY INEVITABLY DO
(that's not hyman's conclusion. his conclusion is credit is neither good nor evil and that the government should set up a bureau to securitize business debt so that investing in business rather than credit card or mortgage debt is profitable. i just can't help noticing that the only reason debt based bonds yield potentially high returns is because of the interest they're built on and a system based on profiting off money rather than actual goods is always gonna be risky and doomed to periodic failures sooooo)
also i am very very concerned about the number of americans who apparently think buying stuff on they can't afford on credit is a good idea like my guys. my ladies. if you can't afford it in cash just don't buy it, eric hyman thinks it's great that credit allowed americans to realize their material dreams before they could save for them but i do not! if you see a thing that you really really want and your account balance will not cover it please interpret that as your brain telling you it is time to go for a walk FAR AWAY from the thing where you can contemplate how you have led a perfectly happy existence before the thing crossed your vision and can likely continue to lead a perfectly happy existence afterwards
4 stars
(for the curious what i did was put my money in an account at the local credit union whose interest rates are so low that in the past six months i have only gained one cent on the minimum deposit i put into the savings account. i will of course be donating this penny to charity)
anyways i explained this was because of the islamic prohibition against interest and she was like oh wow, that's interesting, i didn't know that was a thing! why?
and then i cried inside because i am nowhere near as good a muslim as i should be and whenever people ask me things like this i'm like i know there is a reason...but the thing is i haven't really read up on it in awhile...i just kinda live my life in islamic boundaries and don't educate myself as much as i should...i'm sorry!!!!!!!
ANYWAYS. having read this book i can say GOD KNOWS WHAT HE'S ABOUT WHEN HE FORBIDS THAT WHICH IS HARMFUL TO US, INTEREST IS WHY YOU END UP WITH PEOPLE INVESTING THEIR MONEY INTO FINANCE INSTEAD OF REAL COMMODITIES AND PLUNGING US INTO RECESSIONS WHEN BUBBLES BURST AS THEY INEVITABLY DO
(that's not hyman's conclusion. his conclusion is credit is neither good nor evil and that the government should set up a bureau to securitize business debt so that investing in business rather than credit card or mortgage debt is profitable. i just can't help noticing that the only reason debt based bonds yield potentially high returns is because of the interest they're built on and a system based on profiting off money rather than actual goods is always gonna be risky and doomed to periodic failures sooooo)
also i am very very concerned about the number of americans who apparently think buying stuff on they can't afford on credit is a good idea like my guys. my ladies. if you can't afford it in cash just don't buy it, eric hyman thinks it's great that credit allowed americans to realize their material dreams before they could save for them but i do not! if you see a thing that you really really want and your account balance will not cover it please interpret that as your brain telling you it is time to go for a walk FAR AWAY from the thing where you can contemplate how you have led a perfectly happy existence before the thing crossed your vision and can likely continue to lead a perfectly happy existence afterwards
4 stars
November 5, 2014
Some of my favorite quotes from the conclusion:
"When it is more profitable to build an electric car than to invest in a credit card, we will know that this crisis is over. Helping create new investment opportunities, as the federal government did with the formation of the aerospace and electronics industries, is the best way to divert capital away from speculators and into the hands of entrepreneurs."
"To save our economy, it must become easier for investors to lend to small business. Economic growth is small business growth."
"When it is more profitable to build an electric car than to invest in a credit card, we will know that this crisis is over. Helping create new investment opportunities, as the federal government did with the formation of the aerospace and electronics industries, is the best way to divert capital away from speculators and into the hands of entrepreneurs."
"To save our economy, it must become easier for investors to lend to small business. Economic growth is small business growth."
May 15, 2016
Interesting book on the history of debt in the United States. The last chapter is well written and can stand along on why the mortgage crisis happened and what the US can do to prevent this in the future. The answer might not be anything you have heard before...
April 29, 2013
Overall a great read. Only flaw that I noticed was the omission of the term derivatives and their impact on the Great Recession.
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March 15, 2013332.743 H9965 2012
December 22, 2015
Very interesting and informative, but a bit dense and not particularly engaging. Not my favorite economics book that I've read.
July 23, 2016
Basically the history of the credit card with a nice dash of the mechanisms that led to 2008.
Displaying 1 - 24 of 24 reviews