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Debt as circumstance, strategy and system

Two ratings agencies recently lowered South Africa’s credit rating to ‘junk status’, contractually compelling some investors to withdraw. At the time, tens of thousands of South Africans were demonstrating in major cities for the President’s removal from power, catalysed by the same far-reaching cabinet reshuffle – and especially the shady dismissal of the Finance Minister – that prompted the country’s downgrading. For many, the impaired terms of government borrowing were a powerful indictment, epitomised by the rhetorical effect of the word ‘junk’. But reactions betray class alignments. Even if import costs in reality affect everyone, some people see their economic fates as tied to international fluctuations more than others. This is certainly the case when it comes to interest rates and the terms of credit in the banking system. The Mail and Guardian newspaper recently warned South Africans to ‘pay off your debts and cut your costs’, referring specifically to such things as ‘home loans and car repayments’.[1]

Of course, people’s financial fates are more entangled than this. Before the reshuffle, the big story was about South Africa’s grant system: state child support, pensions, and disability welfare. These rely on the state’s capacity to spend, in the context of substantial dependence on international capital (especially finance and mining). The grant infrastructure is also built into the formal financial system in other intricate ways. Welfare transfers have been administered by a private company, Cash Paymaster Services, for profit. But the profit has involved means of accumulation whose murkiness recently captured headlines. Ancillary companies of CPS were ‘targeting grantees to “cross-sell” other financial products’,[2] and making large-scale automatic deductions from beneficiaries’ bank accounts for loan repayments and such items as mobile phone airtime. This was deemed unlawful by the Constitutional Court. Running the grants through bank accounts (the bank is also a subsidiary) rendered financial ‘inclusion’ a matter of making welfare as liquid as possible and creating new debts. The result was a crisis for a massive redistributive infrastructure affecting 11 million registered recipients: who would keep it going, and on what terms? The answer, the Court decreed, would be the original company, bound now as an agent of the state to continue provision, but this time deprived of the lucrative possibilities to be found in mediating South Africa’s huge wealth and institutional divide.

Rewind a few months to 2016. Students shut down campuses across the country as part of a campaign under the banner of #FeesMustFall. An appeal for free higher education emerged from a wider set of concerns about extreme inequality. Low fees for the wealthy represent crippling costs for the majority. Yet protest came not from the poorest members of society, but from members of a precarious expanding middle class. They face spiralling debt even as their successes produce expectations from kin. Student loans add to unsustainable financial burdens, and government support is not available to the so-called ‘missing middle’. This is an enduring concern: 2015 saw similar, if more moderate, protests. Here, just as in recent scandals around grant payments and South Africa’s financial reputation, debt and redistribution are two sides of the same coin.

All of this underlines a point central to Deborah James’s multifaceted and multiscalar ethnography of debt: that, in South Africa, ‘forces of state and market intertwine to create a redistributive neoliberalism in which people at all levels attempt to make “money from nothing”’ (2015: 8).[3] On the one hand, neoliberal mechanisms underpin large-scale redistribution; the grants mentioned above ensure that people have the material means for their everyday responsibilities. On the other hand, consumption seems overwhelmingly to outweigh the industrial, production-centred economy of the high apartheid era. Even as involvement in ‘labour’ remains central to imaginaries of social citizenship (See Barchiesi 2011), South Africa’s economy is increasingly characterised by attempts to make claims on others – even ‘declarations of dependence’ (Ferguson 2013, 2015) – as formal employment dries up. Making a living often means diverting flows of money as they circulate, including government grants, by creating new obligations.

Money from Nothing powerfully reveals different forms of monetary debt, and their relationships with the ‘redistributive economy’. In a country where ‘financialisation’ is much further reaching than elsewhere on the continent, the world of banks and the world of local loan sharks jostle. They are less distant than they appear. But they also bear the legacy of South Africa’s sharply stratified dual economy. Complaints abound, on radio and elsewhere, of racialised disadvantage when it comes to accessing credit, including such crucial means of upward mobility as home loans. In Money from Nothing, legacies and current realities are brought alive through people’s attempts to stretch available resources to meet post-apartheid aspirations. These require differentiating between streams of wealth so as to negotiate competing obligations, or making money more liquid and fungible so as to create ways to divert it. Explicating all of this, in the South African context, means crafting an ambitious ethnography that weaves between people’s economic experiences and the institutional and regulatory infrastructures through which economic lives are lived.

James is especially keen to resist crude generalisations and easy moralising. She notes, following Peebles (2010), that credit and debt are routinely cast as opposites – as good and bad respectively – despite their logical inseparability. Challenging this stark distinction means questioning others, too, such as that between consumption and investment. James invites us to attend to ‘local ideas of worth’; transcending analysts’ reductions to a flat monetary standard, she emphasises ‘the things less quantifiable, felt to be necessary for the good life, which justify … debt’ (2015: 15). Profiles of broadly middle-class borrowers (see especially Chapter 5) reveal the reproduction of kinship across generations, in the form of education and marriage, to be central to lives of indebtedness. Moreover, in these social circles, informal lenders often become borrowers, and vice versa. This is a much more complicated situation than simplistic narratives about reprehensible loan sharks and their victims would allow.

Our journey through debt and aspiration begins by introducing us to this middle class, the book’s primary focus. The category itself is left relatively open, to provide insights into a range of socio-economic circumstances, both metropolitan and rural. The stock figure of the ‘black diamond’ is a fast-enriched, flashy businessman. By contrast, many of James’s interlocutors are state employees – their salaries offer precisely the collateral that enables them to be so indebted. They had parents who themselves achieved upward mobility, within the constraints of apartheid, through state employment such as teaching or policing. Finally, many of the people we encounter are women who have to consolidate class positions in single-headed households through investments in education. The flashy stereotypes serve as a foil against which members of the middle class understand themselves and their efforts to maintain ‘self-discipline’. Amidst expectations, obligations and plans that operate on different timeframes, the lines between different kinds of spending are not clear-cut. Debts result from colliding anxieties: ‘the effects of competition to consume, pressures to invest, the sharply increasing costs of marriage, disagreements over expenditures, and intensifying claims by the broader family on household resources’ (ibid: 58). As people try to keep their heads above water, stereotypes are mobilised even in the expression of financial mistrust within marriages.

Perhaps unsurprisingly, given the stories with which this review began, debt offers a window into a startling range of themes in economic life and economic anthropology. One of the book’s contributions is in tying economic experiences to the complexities of legal regulation, and expert advice and advocacy (Chapter 2). Post-apartheid interventions more generally are characterised by the intention to extend opportunities to the formerly disadvantaged, itself motivated by social justice concerns, and difficulties overseeing the consequences of those new measures. In the dying days of apartheid, banks would not offer credit to small borrowers, and so caps on interest rates were removed to enable small lenders to fill the gap legally rather than below the radar as loan sharks. The result was an explosion of borrowing, much of it for personal rather than business purposes. While small lenders and small entrepreneurs were imagined to benefit, a key area of growth was in fact comprised of white former public servants loaning their retrenchment packages to their black successors.

The regulation that followed, in the wake of wide-ranging consultation, involved a peculiar combination of measures. Central to it were debt counselling, administration and education, all suggesting a mediatory and participatory approach. Brokers proliferated, as the system required debt counsellors to help people work through their problems and monetary obligations. Established human rights advocates were joined by a range of other expert purveyors of advice, from Pentecostal church leaders whose messages fitted emerging middle-class priorities and self-understandings, to motivational success-story authors (see Chapter 7). But the arrangements ultimately left lenders better protected than debtors. Creditors were able to recover debts remarkably easily, by ‘garnishee’ court orders that sanctioned deductions straight from borrower’s bank accounts. If the government sought to sustain but also limit the provision of credit, what really kept loans coming were ‘the processes of redistribution, enabled by the receipt of salaries paid regularly into bank accounts and by the readiness with which garnishee orders against these could be procured’ (ibid: 90). In fact, the regulatory infrastructure did little to slow down borrowing; deceleration came as a result of the recession worldwide.

These attempts to regulate may have been broadly ineffectual, but they confront the daunting legacies of credit apartheid. James’s analysis therefore takes us backwards, to foreground an under-explored dimension of South Africa’s colonial and apartheid history (Chapter 3). We routinely hear about land expropriation and taxation regimes in South Africa, as ways of supporting white farmers and transforming black rural dwellers into cheap labour, most famously for the mines. But one crucial dimension in this stratification was the provision of credit along racial lines, underpinning white success at the cost of the black population. This, in turn, led to the complexities of credit apartheid. Ethnically marginal traders, such as Muslims from Gujarat and Jews from Eastern Europe’s Pale of Settlement, bridged the credit gap. The financial risks of operating at this interface produced the raised prices built into hire-purchase credit schemes (hiring commodities, usually furniture, until the debt is paid). Social distance was both mediated and reiterated: highly bureaucratised record-keeping combined with equally personal relationships, but the latter relied on employees with local roots who would themselves cheat their bosses. At the same time, such debt commitments shared a feature with the increasingly popular practice of storing earnings in multiple bank accounts. They were ways for people to engage in ‘enforced saving’ (ibid: 108), with discrete streams of money confined to particular relationships and obligations. Localised informal lending arrangements would later also come to be characterised by both bureaucratised measures for repayment and repossession on the one hand (notably, confiscating ATM cards), and embeddedness in personal networks on the other.

The big change, then, has been financial ‘inclusion’. Here, James makes another important contribution. Inclusion has been variously hailed as advantaging those at the bottom of the pyramid, or as a kind of ‘adverse incorporation’ (Du Toit 2004). Here, the pernicious effects are of a particular kind. Paying government salaries, and more recently welfare grants, into bank accounts has made it harder to keep money streams separate, and easier to recover debts. Despite people’s strategies relying on differentiation, inclusion has come to mean the greater liquidity of wealth. It is financial infrastructures themselves that leave incomes at the mercy of formal institutions’ claims.

In this context, the familiar figure of the stokvel (rotating credit and savings association) has taken on new significance in the post-apartheid era (Chapter 4). Such groups continue both to enable members to commit resources and therefore hold them back from other demands, and also to promote an ethic of solidarity among participants. This now means trying to find ways to smooth over inequalities as people’s class positions diverge. And multiple memberships facilitate differentiated financial obligations, in line with class mobility. In one case, a woman participated in one initiative to assist with ‘parties and funerals’, another for food at funerals, and another still to save for big purchases. Still others were to lend money at interest for specified purposes. Indeed, some groups now oblige their members to lend out money, amidst exhortations that South Africans act like entrepreneurs. This practice enables growth on capital, in a context where banks’ interest rates for poorer citizens are negligible, and accounts are only for storage. Multiple memberships are useful not only for addressing different financial objectives. In the above example, each group also represented a claim to belonging in a particular social milieu: family; township community of earlier years; white suburban community of current residence; association of colleagues (here, educational professionals). Here, once again, James offers important insight into the institutional dimensions of middle-class economic lives in South Africa.

Financialisation is an important part of this institutional story. Many of these groups have been drawn towards formalised accounting techniques, including calculating rates of return on capital. But members also feel excluded from banking services, with their perceived lack of respect for black clients and with the poor interest rates that are available. Savings groups are an important alternative, both engaging with and maintaining distance from the financial sector. Differentiation remains key. Nevertheless, such strategies are not invulnerable. 2008’s global economic slowdown made debt troubles especially acute. As commodity prices rose, many were left unable to keep up with their regular savings-club contributions. With obvious implications for South Africa’s recent downgrading by international credit agencies, described at the start of this essay, some were driven to take out loans with terms set by rising official interest rates.

At this point, we are able to take stock. If South Africa’s dual economy was built on making the black population the basis of a cheap labour system (Wolpe 1974), what does it look like now that consumption and distribution appear to be more central than production? Chapter 6 throws today’s dual economy into relief. Previously disadvantaged people try to position themselves for entrepreneurial opportunities. Doing so resonates with official discourses, but those trying to gain traction are nevertheless aware that it is connections that really count. Most, excluded from networks of government tenders (the lucky few in these networks are known as ‘tenderpreneurs’), resort to ‘making money from nothing’. This means gathering relationships. Recruitment is about tapping into circuits of redistribution by creating and invoking claims of debt and obligation, which often ultimately rely on the government salaries of a minority. ‘Wealth in people’, a familiar theme from African anthropology (see Guyer 1993), appears in a new light.

At the same time, a massively expanded number of South Africans now do have a major asset. Township houses, formerly rented from state authorities in areas defined as non-white, were devolved to their occupants at the end of apartheid. Yet, here too, South Africa’s economy bears the imprint of a stratified past. Long understood as family abodes, township houses are places though which kin circulate – not least when marriages break up and daughters return to their parents’ homes. Since apartheid, South African law has attempted to tread a difficult line between defending the newly marketable, private-property status of houses (bringing everyone into a single economy) and the inalienable right to shelter (protecting the vulnerable from that economy). Debts, including for utility costs, lead people to sell up. Yet such sales are bitterly contested by kin. And, when debt-related repossessions are attempted, they may be frustrated by popular protest legitimised by non-commodity understandings of the family house. Houses, and indeed formal title to them, cannot be understood without due attention to ‘the complex interrelations of marriage, income, and inheritance’ (James 2015: 193).

Concerned to break down binaries, James nevertheless organises her analysis around fraught interfaces, which seem to gain imaginative power even as they are bridged and mediated. The first is between the atomism of the market and the obligations of community. Marriage in South Africa was historically structured around debt relations, in the form of long-term bridewealth transfers, but these have in turn come to rely on getting into debt of the more commercial kind. Concerns of market and community have dynamics that are far from obvious. Contrary to the refrain that market relations erode cultural distinctions, James chronicles the history of various formal debt relations as ways to withhold money from kin and defend future-oriented investments. People have historically used such commitments as hire-purchase precisely to maintain distinctions between categories of monetary earnings intended for different purposes. This is the same basic logic as membership of stokvels, which lock in a portion of earnings in a recognised kind of economic institution. As assets and commitments are compartmentalised, contrasting domains are asserted through an interface between mutuality and market: ‘housewifely thrift is kept apart from the rapid flow of the market, value items tied to the domestic domain are ring-fenced and protected, at least to some degree’ (ibid: 146).

The other overdetermining interface – rift, even – is of course that of credit apartheid’s legacies. For all its imbrication in economic lives and strategies, hire purchase was a way of selling furniture specifically to black people in the financial margins. And, for all the canniness with which people have juggled different stokvel memberships, rotating credit was a way to save outside the financial infrastructure available to South Africa’s white minority. Groups have recently resorted to lending schemes because banks do not really serve them. Yet, even here, James does not let us off with an easy binary. Members of South Africa’s precarious middle class throw credit apartheid into relief not because of outright exclusion, but because the game remains rigged. This is precisely the refrain on university campuses, as indebted black students confront the costs of mobility in one of the world’s most unequal societies.

Economic lives in South Africa have long been shaped by powerful formal institutions, as well as by the consequences of living in their interstices. Credit apartheid exemplified this, but so too do popular attempts to live through, as well as in spite of, recent financialisation. This is why James builds her account around the intersecting interfaces of community/household versus market, on the one hand, and of the legacies of the dual economy, on the other. Her informants do much the same thing. Grasping all this requires not only ambitious reach, but also methodological innovation. James juxtaposes strikingly diverse research techniques: from situational observation, to life-history case studies, to survey data, to media representations, to patiently developed relationships with advocates, advisors and other experts, to policy material and records of law-making. Her study spans everyday experiences and their policy contexts, popular economic strategies and the forms of advice through which they come to be understood, and the intricacies of kinship and the institutions through which these are negotiated. The result exemplifies the kind of breadth required to investigate indebtedness as the circumstances people are stuck in, as central to strategies through which they make ends meet, and as the premise of systems of finance and regulation.


Barchiesi, F. 2011. Precarious Liberation: workers, the state, and contested social citizenship in postapartheid South Africa. Albany, NY: State University of New York Press.

Du Toit, A. 2004. ‘“Social exclusion” discourse and chronic poverty: a South African case study’, Development and Change 35 (5): 987-1010.

Ferguson, J. 2013. ‘Declarations of dependence: labour, personhood, and welfare in southern Africa’, Journal of the Royal Anthropological Institute N.S. 19 (2): 223-42.

______ 2015. Give a Man a Fish: reflections on the new politics of distribution. Durham, NC: Duke University Press.

Guyer, J.I. 1993. ‘Wealth in people and self-realisation in equatorial Africa’, Man 28 (2): 243-65.

James, D. 2015. Money from Nothing: indebtness and aspiration in South Africa. Stanford, CA: Stanford University Press.

Shipton, P. 2007. The Nature of Entrustment: intimacy, exchange, and the sacred in Africa. London: Yale University Press.

Wolpe, H. 1972. ‘Capitalism and cheap labour-power in South Africa: from segregation to apartheid’, Economy and Society 1 (4): 425-56.

  1. [1]Mail and Guardian, ‘Pay off your debts and cut your costs’, 7 April 2017.
  2. [2]Neves, D, and D. James, ‘South Africa’s social grants: busting the myth about financial inclusion’, The Conversation, 22 March 2017. https: //
  3. [3]Full disclosure: Deborah James was the co-supervisor of my PhD, which was awarded in 2011.

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