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Austerity, advice and debt

[Editor’s note: Deborah James was interviewed by Charles Stafford at the London School of Economics in October 2018.]

AOTC: Could you please start by telling us about the project you’ve been working on the last couple of years, the one on ‘advice’.[1]

Deborah James: Like many projects, this one came about almost by accident rather than design. PhD students come through the system and you think ‘perhaps we should get a grant so they can get some postdoctoral experience’. With some of my students and one or two others we came up with this plan. As part of this, I had an interest to broaden things out from my recent research in South Africa, which as you know was about debt and indebtedness. I wanted to compare this with other settings. I’d also been doing some previous research on various kinds of advice offices in the UK. Initially this was about legal advice given to immigrants – I had a small grant from the British Academy to look at this. Then I thought it would be interesting to go beyond that. What happens when immigrants get accepted, get ‘leave to remain’, how then do they fit into the wider UK population?

As we got into the larger collaborative project, we increasingly recognised that austerity regimes have come to play an important role in what has been happening – not only in the UK but elsewhere in Europe. Austerity regimes have made it more and more necessary for people to get help in accessing what might previously have been seen as the entitlements of a citizen under the post-war welfare consensus until that started getting chipped away at. For other kinds of reasons, including the financial crash of the late 2000s, a whole range of new people joined the pool of those who might need some advice. Not just the poor and the unemployed, that is, but also people from other countries, for example those who used to be middle-class, had now fallen on hard times, and came to Europe in search of what was available, basically low paid jobs. And even the stressed middle classes from the UK and European society need advice, as well as those who are in work but still rely on benefits to get by. So austerity was the cause of the greater need for advice, and there was a bigger pool of people who seemed to be requiring it.

And then, of course, the project had its own momentum. One person – Matt Wilde – studied housing initiatives and social movements. He was interested in collective advice, i.e. not just of the kind provided by Citizens Advice, Shelter and other charities, but more along the lines of group initiatives – often quite radical initiatives. Ryan Davey and I looked at debt advice, again not only coming from organisations such as Citizens Advice but also, in some cases, funded by creditors themselves. Banks and financial institutions are the ones causing the problem and so it has been insisted upon by government authorities that they pay to give advice to those they’ve put in trouble! This is a version of the ‘polluter pays’ principle. Anna Tuckett did research on the brokers who ‘teach people’ to pass the citizenship test – she argues they’re acting on behalf of a weirdly hybrid, outsourced, British state.

Another one of us – Ana Gutierrez – worked in Spain, again more on collective advice, and specifically for people who get caught up in the bizarre housing arrangements in Spain. These are low paid migrants who are more or less forced into buying houses using each other as guarantors – all kinds of dodgy things. And then suddenly the crash came and they’ve had their houses repossessed. They’ve formed a movement and Ana investigated the collective forms of advice that have emerged from that movement. So, some of the project was about social-movement oriented collective advice, but some of it was happening in these institutionalised offices, the biggest one in the UK being Citizens Advice, but of course there are others. And then there are also some charitable, and even church-based initiatives, that have been coming more and more into play. We also had one person – Tobias Eule – working in Switzerland on refugee advice.

So the project was varied, but used the UK as a base, with its extreme version of neoliberal-type arrangements from the 1970s onwards. It had a better-structured welfare state in the first place, one that was much more undermined in subsequent years than the others. We came to think of advice as a point of intervention – but one that operates in a very ambiguous way. Sometimes it operated to shore up these welfare entitlements and defend them against government cuts, but it also sometimes policed boundaries of eligibility and entitlement. Ambiguity turned out to be one of the watchwords of the project as a whole.

AOTC: Is the overall picture a depressing one?  You are talking about social movements, and I suppose there could be something inspirational here as people deal with very difficult situations together. But then there’s something bureaucratic and intrinsically depressing at another level – the dismantling of welfare, people with difficult circumstances, meetings in boring offices, etc.

DJ: The overall picture is that, although the situation is clearly depressing, there’s also a lot of resilience out there. You could argue that we shouldn’t have to be relying on such things, that there should be an egalitarian consensus where people get their entitlements without struggling for them. Looking at these advisers at middle and lower levels of the bureaucracy, there is something positive going on. When the debates about Brexit can make you despair, a look at how these individuals are trying to help others faced with these intractable structures, gives one some hope. People taking action, aiding others to get a little further with each push.

My research involved going to advice offices and listening to what happens there, but I also spoke to higher-ranking people who’d been involved in pushing for such initiatives in the longer term. I wasn’t able to follow up so much with advisees, because of all the issues surrounding confidentiality; I was working with advice staff, initially, but I also found out about the ‘patchwork funding arrangements’ they rely on to keep going. Because of austerity there are these smallish organisations, often community based, that need to get funds and enter into partnerships. They might then get financial assistance from a range of sources: the local authority, the Lottery Fund, etc. And some of the people in these smaller organisations were highly critical – not only of government but also of outfits like Citizens Advice itself. There was a lot of fighting. What are you really trying to do? Is this about advocacy at a higher level or just trying to help individuals? – which is often seen as politically conservative, of course.

I was looking at how these advisers help people with debt problems. And what I found was that a lot of people now owe money not so much to private creditors – the Financial Conduct Authority has been quite good at pushing back against payday lenders, and so on. Where people owe money now is to the government: especially council tax, which is one of the biggest expenditures. And if you don’t pay your council tax you get into arrears and then the council will come with bailiffs. Why? Because the council is up against the wall itself as a result of funding cuts. So, there are knock-on effects from austerity.

Advisers try to counterweigh a client’s income against their expenditure, and maximise that client’s income by making sure they get as many benefits as they can – often things the people themselves don’t even know about. The story you get from the newspapers is that everybody is having their benefits cut, there is nothing more available. But many people I saw in advice sessions were being helped, in fact, to get more benefits – so that they can then pay off the debts that they owe! Sometimes the benefits are from one arm of the state – central government – and then they have to pay the money strait to the other – the local authority – in order to keep that going, because as we know local authorities are very much under fire at the moment. Of course, it’s not a long-term solution. But some of these advisers were quite creative: shuffling things around, almost what I call householding, i.e. creating temporary pools of husbandry that would enable an individual or family to get by.

AOTC: Do the advisers find it difficult? I always think about this when I think about social workers, indeed even lawyers who work on family law and deal with people who have really difficult circumstances.

DJ: There’s a range of reactions to that. There’s an excess of care and empathy required, and of course Hochschild talks about ‘emotional labour’ – people having to work above and beyond the pay they might get. Obviously, there are a lot of volunteers. But I found people were quite upbeat. And I think this has do to do with their sense of professionalism. So even though they were encountering these things, they had to behave like doctors or nurses: ‘this is my job and I have to close off, to some degree. Let me get the job done to the best of my ability’.

It’s a difficult job too. There are so many legalities, there’s a very thick book they have to consult, produced by the Child Poverty Action Group. It’s updated every year because the law keeps changing. You go to page 3, it says one thing, you go to page 573, it says something slightly different. And there’s a lot of referral as well. Often you’ll find a volunteer slightly stumped by a certain person who comes in. And then they will go up and stand in a queue in the back office and ask their adviser what’s the best thing to do. And then sometimes that person gets stumped too and they will refer it further up the chain. There’s a lot of sharing of expertise. The system can appear utterly confusing, but nationwide there are a lot of ways of strategizing to counter some of the worst of it.

AOTC: I’m thinking of Insa Koch’s work on the state and what she says about attitudes to the state as people living on council estates go through some of the things you’ve been looking at. One of her main points is that they had thought of the state as a moral agent, in the past, but that had been lost over time. This is for complicated reasons, but partly to do with issues of race, ethnicity, migration – the state is now favouring others, etc. I wonder if that was relevant?

DJ: Yes – and Insa by the way was a key part of the advice project; she and I co-wrote the Introduction to a forthcoming special issue where we present our findings. She’s been doing follow-up work on that council estate. The people she discusses had mostly stopped voting. They had a kind of trust in local politicians, and when that proved not so beneficial to them they gradually lost interest in the whole democratic project. In my case, with my focus more on advisers themselves, I did find examples of people feeling that the state was being punitive – which indeed is true – and thus feeling very negative about welfare, and welfare reform, in general. But also, I found amazing levels of cooperation between advisers in charities and local authorities or officers in the Job Centre. There’ll be a meeting in which, quite counterintuitively, a government officer suggests a work-around to the officers at Citizens Advice. He tells them to counsel clients along these lines: “Look, I know your Disability payment has been cut. You should apply for Job Seeker’s Allowance instead.” And the Citizens Advice people would say: “My people don’t want Job Seeker’s Allowance, they’re not looking for jobs, they’re disabled!” And he would say: “Just do it, don’t worry. At least this way they’ll still have something to live on”. State officials at certain levels of the bureaucracy find nooks and crannies in state decrees.

You can see these advisers as playing a state-like role to some extent, and that’s commensurate with what these new visions of the state are. It’s no longer just centred in a thing called ‘the Government’. It’s now spread across market, state, civil society – that’s what the state now is, and these people are part of it. But our vision of them is that they aren’t just part of some Foucauldian project, i.e. punitively forcing people into compliance. The care work they do often goes way beyond that, its inherently contradictory.

AOTC: Stepping back, your Money from Nothing book has been out a few years, so readers are more likely to be familiar with that, and your work in South Africa, than with your new project. What was that about? Some overlap, obviously, but you were dealing with very different circumstances in that case.

DJ: That project, likewise, was something I fell into by accident! Although I’m interested in economic anthropology more broadly, I would never have seen myself as an expert on the topic of debt. It arose out of being in South Africa and driving around to visit various students who were in the field at the time. There were three, so I had to cover a lot of mileage. I was listening to the radio, this was back in 2004 or 2005, and there were these phone-in programmes that were all about people in debt. At the time I was unaware that this was affecting people all over the world: from the US to Chile to India, and beyond. So for me this was a revelation. And it was now afflicting the people I’d long studied in South Africa – that is, former cultivators who became migrants. By now, with democracy, their children had moved into civil service and other office jobs, a very rapid upward trajectory. So it was the people I’d always studied, but debt was a key thing affecting the third generation. It seemed an obvious thing to study.

I then discovered that there was an act going through Parliament, the National Credit Act, which was aimed at tackling some of the worst aspects of debt that had escalated over the ten-year period since democratisation. There’d been this massive rise in micro-lending, i.e. unsecured credit – short term loans at very high rates of interest. The government belatedly thought ‘we must do something about this’. There was something happening in both society and government. Here, as with the advice project, my research was part of a bigger grant, dealing with popular economies in South Africa, with colleagues and post-docs working on different aspects. I was only on a 20% buyout so I had to do the research during holiday periods. But it became all-consuming for me.

AOTC: How was the empirical research organised? I believe it involved a lot of interviewing. And these were people who you knew from previous research?

DJ: It was multi-sited. I went out to a rural fieldsite close to the one where I did my earlier research. I hired a local research assistant who knew a lot about the setting and we did quite a detailed study in the village. I also went to other sites, including parts of Soweto where more upwardly mobile people reside, many of them in state employment – part of the emerging new middle class. And there again I relied on a research assistant, herself a university student from this new stratum. And then, through contacts, I interviewed people working in government, people whose parents had never dreamt of their having this kind of job. I also worked with the Black Sash, a human rights organisation that has now become increasingly focused on consumer debt.

So it was about how people wanted to get ahead, and they were borrowing money in order to do that, but simultaneously there was this so-called crisis of consumer indebtedness, and attempts to legislate around it.

AOTC: So an upward climb that comes with debt.

DJ: Yes, but also debt which comes with an upward climb during a democratic transition. People who are no longer willing to be stuck at the bottom of the pile. And the same thing is true in Chile, India, all over. There’s this idea that, many years ago, people would have accepted their lot in life, if they were at the bottom of the pile. And now, ‘no – we’re in a democracy, we have rights, we want to be better off’. The rise in lending, crudely put, owes a lot to that.

AOTC: And what are the main conclusions? One is clearly about the complex relationship between upward climbing and increasing debt, getting richer and poorer at the same time.

DJ: Yes. Another is that there is a lot of abuse going on. These people were ready victims: they would borrow at all costs, do it no matter what. So they themselves resisted regulation.

AOTC: They resisted state regulation of this debt market?

DJ: That’s right. They didn’t want to be protected although, looking from the outside, you could see that they should be protected, at least from the worst abuses of the system. I became fascinated by the origins of a system in South Africa, which may be more widespread, in which people’s finances are under ‘external control’ as one lawyer put it. Everyone seems to accept the fact that you don’t really own your finances, somebody else does. A system developed of garnishee orders. Let’s say a person buys a fridge on instalments, then they default on a payment. The company that was owed the money would go to the employer of the debtor and get a signature, which was then executed by the magistrate’s court, and then the money could be deducted straight from the debtor’s account. This was rife. In the UK it’s much harder to do this, but in South Africa it was illegally done, e.g. by not using an actual magistrate but just some clerk of the court to stamp the papers. So this whole phenomenon of people’s finances not being under their own control seemed to be a central part of it; that’s one of the things I looked into and am still investigating.

Its origins lie in what was ultimately an extractive economy in the South African case. Initially, there were English capitalists and gold miners, etc., extracting mineral wealth from the ground. Now they and their successors are extracting money directly from the people who earn wages. And it’s unmediated by any effective state control.

AOTC: So there are overlapping themes with the UK project: debt and perhaps advice, assuming people in South Africa get advice too. In terms of the macro level comparisons, have you drawn any conclusions? Obviously, it’s a radically different historical context.

DJ: I’ve started writing a paper about this. It’s made me interested in the process of redistribution – it’s part of the classic anthropological canon, Polanyi and so on. In unequal societies, whose job is it to make sure that people who don’t earn money still get some? Is it taxation, is it civil society, etc.? The paper is about how, in South Africa and the UK, in different ways, market-oriented arrangements have come into play for redistributive purposes. It’s no longer just up to the state, or up to society. In the classic imaginings, people earn money in the market while others do not, and if you let that get totally out of control then there would be steeply increasing inequality. The state in theory regulates this, through taxation and welfare, but doesn’t really do so anymore. And now you get private creditors or private businesses being expected to counter the most egregious practices surrounding indebtedness.

AOTC: Can you give an example?

DJ: In Britain, it consists mostly of commercial creditors having to pay for debt advice as I mentioned: this has become their responsibility as Ryan Davey’s work shows. In the South African case, because the government is relatively ineffective in tackling abuses, the role of debt regulation has been taken on by a private company – along ‘corporate social responsibility’ lines. Its CEO is intent on creating what he’s calling a fairer capitalism – one where people don’t get ripped off blind. He is taking cases to court, in his own capacity. And then there’s Black Sash, which also has some private funding, and is trying to hit back against this rip-off culture in which creditors, and lawyers too, are pocketing ill-gotten gains made through the debt recovery, debt repayment and garnishee industry. There are macro-questions about how redistribution might be achieved, often perhaps in counterintuitive ways.

AOTC: The people you studied in South Africa, if they get advice is it primarily from their own social networks, right?

DJ: That’s right. There is little in the way of debt advice per se in South Africa. Actually, in the early years of the National Credit Act, they did introduce something called debt counselling. They wanted to make this an employment opportunity for people who didn’t have work. They had people going on two-day courses to become debt counsellors, which was laughable. It created a segmented market: if poor people get into debt they go to very badly trained counsellors (who charged, by the way). If rich people get into debt they go to lawyers. There is no free debt advice. If you have a problem you might have to go to the local trade union or community organisation, who might draw your case to the attention of Black Sash, which has very few offices and which is strapped for cash as well.  So the strategy for achieving change there, instead of having well-trained middle-level agents providing free advice as in the UK, is to take cases to court and hope the consequences of these cases might trickle down to benefit others. But the results are very patchy.

AOTC: Before wrapping up, I’d like to ask you what you think is happening in economic anthropology in general these days? To me it feels that it is coming into its own, and there’s a broad range of really fascinating projects that are being done. And I suppose one feature of that is that it has become truly globalised, including people doing research in the City of London, whatever.

DJ: I came to this as a newcomer. I was trained in South Africa in the Marxist canon because that was the only game in town. Anything “cultural” was thrown out the window, because that played into apartheid. So that came with a very particular view of economic anthropology. I felt slightly at sea when I first arrived here and came across the canon in its full roundedness. The LSE department has been a leader in that – with the book by Bloch and Parry, Money and the Morality of Exchange, and the like. Since then, the field has grown. On the one hand, it’s because people do important ethnographic work on the ground, all the way from cultivator economies to the Bank of England. But it’s also because the remit of economic anthropology has expanded. For example, there’s the focus on labour in the new ways that Johnny Parry and his students have been doing, there’s new questions surrounding welfare and redistribution. So there’s a wider idea of what economic anthropology entails.

I had a panel with Max Bolt at the 2018 conference of the African Studies Association of the UK on work, wealth and welfare. On the panel, we had an economic historian, Stefano Bellucci, talking about the rise and fall of the welfare state in Africa. This raises fascinating questions not only about economics per se but also issues of redistribution and how people who don’t earn enough money get by. Somebody attending the panel came from a university in the US and she said she hadn’t heard these things being seriously debated there. People at conferences don’t seem to be as interested in Jane Guyer, or in James Ferguson’s new book, as they are over here, she said. This was a revelation! So I thought, that’s good, maybe we’re leading the way a bit. And, of course, there are other people in Europe, e.g. Chris Hann and Don Kalb’s recent project at MPI, doing similar kind of work that also feeds into some bigger debates. There is something new and exciting going on at the moment.

  1. [1]The website for this project is here:

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