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The loan economy

Loans are often cast as characteristic of Western, capitalist economies. Development has come to mean finding new ways to lend money to marginalised or ‘developing’ populations. Microfinance organisations offer loans paired with business plans. More radically, ‘development guru’ Hernando de Soto has suggested slum dwellers be granted deeds to their houses to use as collateral for borrowing. Non-urban, non-rich or non-Western economies appear short of systems of lending.

The reality is rather more complicated. People are constantly indebted to each other, in multiple, overlapping ways. At least since Marcel Mauss (1990[1925]), anthropologists have regarded debts and obligations as preceding money and market relations. Adam Smith had it that money evolved to facilitate trade, eliminating the need for a ‘double coincidence of wants’ in barter (each party wanting what the other has, at the same time). A standard form of value, later redeemable for other goods, was a perfect technology for people trying to buy and sell. People’s economic lives, in this widely accepted view, extended outwards from an Aristotelian ideal of self-sufficiency. Debt emerged later. David Graeber (2011) has recently set out the anthropological counter-narrative. People in pre-/non-monetary societies were not trying to buy and sell by the imperfect means of barter. Rather, they passed on goods through forms of reciprocity. A favour granted now would be answered by another later, depending on needs and means. Debt came before money.

The importance of everyday debt in a marginal, rural society is well captured by Parker Shipton in The Nature of Entrustment. This rich ethnography explores economic life among Kenyan Luo, on the shores of Lake Victoria. Luo language, segmentary kinship structure and close identification with cattle broadly resemble those of the Nuer and Dinka. And like the Nuer, this is a society classically described as acephalous (lit. ‘without a head’, or without centralised hierarchy). Shipton shows us economic life that is far from egalitarian: not only built around hierarchies of lineage, extending before birth and after death, but also hierarchies resulting from criss-crossing credit and debt. These obligations do not simply cancel each other out. Luo may avoid showing off accumulated wealth. But a man places a spire on the roof to signal that he is a lender of land – one who belongs, rooted in the landscape – not a borrower of land, who lives as a client.

Credit and debt, Shipton contends, are ‘more deeply rooted and socially entangled than many financiers suspect when introducing loan programmes from outside, and … involve longer lasting imbalances and asymmetries than many ever dream’ (2007: 208). While Shipton’s later companion volumes (2009, 2010) deal with outsider financiers, and with the meaning of land in particular, The Nature of Entrustment focuses specifically on what it means to be so profoundly entangled in debts, and so inescapably defined by them. We come quickly to understand his claim that Luo have difficulties repaying their development loans, not because they are unfamiliar with the idea of repayment, but simply because there are far more important loans to deal with. Commitments to kin, and even known acquaintances, come before those to impersonal, distant institutions.

In anthropology, the notion of interlocking obligations – or reciprocities – is familiar ground. So, too, is the idea of people defined through these commitments, more than by the material possessions they have. All this fits the pattern of a classic gift economy, defined by obligations to give, receive and reciprocate. (Or, in more recent scholarship, a logic of gift exchange amidst a wider range of exchanges.) What Shipton suggests is different. One could call it a ‘loan economy’. Every Luo is implicated in a web of loans, and loans define people.

What does a loan economy look like? The gift-economy model is, predictably, a starting point: it underlines the importance of circulating wealth, not just accumulating it. But it needs tempering, leaving room to accommodate different individual and group motivations. ‘Luo … are at times profit-seeking marketeers and at times reciprocators and redistributors’, we are told (2007: 28). It must also account for the constant renegotiation, and even non-payment, of debts. Equally (although Shipton does not make this explicit), the short- and long-term need rethinking. Long-term exchange is more than Durkheimian moral order and social reproduction (see Bloch and Parry 1989). It also offers distinct opportunities. Goods change value, people forget what they agreed, debts disappear, and loans fade into gifts without reciprocation. The loan economy is hard to pin down. But that is the point, in a sense. It transcends gift- and commodity-exchange, status and contract, assistance and exploitation. It means simply that a lot of wealth is not with its ‘owners’ (a complicated and loaded term), and that this is central to how Luo economic life works.

The actual term Shipton uses is even broader. ‘Entrustment’ is the book’s contribution to our conceptual toolkit. Like loans, entrustments are ‘exchanges expected to be reciprocated over time’ (2007: 10). But the term emerges from an attempt to conceive of loans in the broadest sense. Entrustment may overwhelmingly benefit the person entrusting something, or the person entrusted, depending on context. Someone may hand over an ox because he lacks adequate pasture, or because his neighbour lacks adequate draught power. What happens to any calves born in the meantime reveals people’s close attention to the interests at play. If lending cattle benefits the borrower more, then the lender keeps any offspring, and vice versa. In common usage, the word ‘loan’ has unduly commercial connotations for such a case. And Shipton has his sights set on a yet broader canvas. He wants to know ‘whether credit relations … could transfer living and breathing creatures, including humans themselves, whether they could bridge the living and the dead, or whether they could link the sacred and the secular’ (ibid: 3). So, if this is a loan economy, our conceptions of both loan and economy are challenged and extended.

Is this not in fact a book about trust? Not necessarily, and certainly not in any straightforward sense. We often think of trust as a bond between individuals, but here we are shown credit relations between individuals and between groups, in complex, interlocking ways. Entrustments may not require trust in people, so much as a commitment to social processes. And even where one person does trust someone else to look after a prized item of wealth, there is more than a dyadic relationship at play. Shipton urges us to keep in mind the silent third party, the audience – interested kin or the jealous neighbour next door. Entrustments look private, but they rarely are.

How far does the notion of entrustment take us? The concept enables Shipton to build a picture of economic relations that are sometimes less alienable than sale, sometimes more susceptible to recall of the original object than gifts, and often less money-focused than a conventional loan. Shipton sets out the power of the idea of entrustment by focusing first on people. Sons and daughters are entrusted to kin with fewer children of their own, a need for extra pairs of hands, and the resources to look after more dependents. These arrangements range from loving care to virtual slavery, and looking after children always brings labour into the household.

Illuminatingly, direct comparison is drawn here with entrusted cattle. Understanding entrustment means juxtaposing different forms of value, and blurring the notion of  ‘possessions’ in any narrow sense. Entrustments of people and money intersect, for example. Shipton tells of the cash portion of bridewealth transfers set according to women’s education levels. In effect, investment in girls during childhood is recouped later, when they are entrusted to their husbands’ lineages.

Bridewealth (which receives its own chapter) itself draws on competing interpretations of economic life. Cattle belong both to their buyers and to groups. So young men may buy cattle, but they cannot resell them because they also belong to the head of the household. The cattle form part of a wider pool that could contribute to bridewealth payments. But maybe the bridewealth for another son – in other words, not the individual owner. Shipton depicts fathers trying to plan for bridewealth payments from the moment of their sons’ births, and struggling to allocate cattle for the competing sons of competing wives (some of whom may also hold cattle). Other beasts will be lent by more distant relatives, to be returned in some form (hopefully) when the marriage of a daughter brings cattle into the household. But even the flow of cattle to a daughter’s father is reversible – if a marriage goes sour, or if the woman is infertile. And patriarchs are aware that they do not necessarily have the final word in the long run. Sons who die unmarried, denied bridewealth by their fathers, make for vengeful spirits. One can well imagine not only people’s social personae, but their very consciousness, shaped by all this chronic uncertainty – the constant negotiation of transfers, none of them certain or final. Conditional loans upon conditional loans, as far as the eye can see.

The dead are absolutely central to this economy of entrustment, Shipton argues. Reciprocation over time brings members of lineages – the living, the dead and the not yet born – together into a single web of obligations. The kin of a deceased man worry that improper allocation of his possessions will invite ill will from beyond the grave. His existing debts are reasserted or forgiven at his graveside, transferred across generations. Descendants inherit commitments and social ruptures from birth. An extension of economic idioms connects people to ancestral spirits, or to a Christian God. Luo are clear that sacrifice is a form of soft contract (‘not to obligate but to oblige’, ibid: 194), a point on which they agree with Hubert and Mauss.

As he draws funerals, inheritance and sacrifice into his web of entrustments, Shipton exhorts us to pay attention to serial obligations. Anthropologists should not just be looking for direct reciprocation, but also for responsibilities continually passed in a single direction within hierarchies. This applies as much to the living as to the dead. Children look after younger siblings in their charge, and may later also pay their juniors’ school fees. Thus younger siblings grow up with a sense of indebtedness from an early age. They, in turn, take on their own responsibilities within a great vertical chain of obligation. The resources that go into bringing up a child are merely entrusted, in the sense that they (or the equivalent) should be passed on when the time comes.

The central idea here is that Luo economic life revolves around passing on what is valuable. Why people do so varies enormously. This may be to spread risk (of theft, for example). It may be to disguise how much one has accumulated to avoid jealousy, by dispersing it amongst other households. And, as in so many other settings, it is often to consolidate relationships and future obligations that are at least as important as what is being entrusted. This continual passing on goes further than a narrow, conventional view of loans. And it goes further than the classic Africanist topics of ‘wealth in people’ and wealth in cattle (remember James Ferguson’s loaned livestock in Lesotho, standing socially for absent migrants).

Shipton’s ethnography is detailed, intricate and nuanced, and this review cannot do real justice to his data. But what does the concept of ‘entrustment’, or a focus on loans, actually contribute?

Attention to the dead and the sacred alongside more obviously ‘economic’ themes is valuable. It reinforces the established anthropological point that ‘the economy’ does not really exist as an entity. Shipton does more than say it; he illustrates the point in all its criss-crossing glory. Nevertheless, ‘entrustment’ has to bear a lot of analytical weight. Shipton’s approach appears to be to find the broadest possible umbrella concept, so that he can then get on with the business of serious ethnography. Theoretical analysis stands back for much of the time. But is this warranted? Is entrusting a cow or a child the same as sacrifice to an ancestor, in the hope of friendly treatment in the future? We certainly gain an understanding of debts and obligations without the baggage of the spirit of the gift. But do we gain anything else?

A focus on entrustment certainly shows, in extraordinary breadth and detail, how wealth moves around. Some theorists view production as the driver behind economic life, and others cast consumption in that role. For Shipton, distribution is the motor. Production itself can be viewed in terms of distributed labour, loaned first to one person’s field, then another’s. Serious consumption (buying something big for the house or for farming) is enabled by distributive strategies – accumulation is hidden under constant lending, rendering the accumulation of possessions socially useful, or simply invisible. What we have, then, is an economy of flows. The overall message is that circulation matters – Luo are decent economic actors because they pass things on.

This is all very well. Yet there is another, complementary way to think about entrustment, suggested but not explored theoretically in this book’s treatment of the concept. Loans are not just about flows. They also require things to stop, and sometimes for considerable periods. They are therefore about rhythms – flows juxtaposed with fragile states of suspended animation. And they are about people’s projects. When wealth stops moving, how do people build their lives around it, and what happens to them when it is recalled?

Shipton sees time as central. Luo entrustments do not generally involve interest, but time changes their significance. The value of whatever is lent fluctuates against other items of value. Moreover, incompatible forms of wealth can be exchanged more easily if there is a sufficient delay between transfers. The meanings of exchanges themselves alter, as people forget or manipulate details. Loans mediate change.

But there is even more to time than this. What does the loan/entrustment period look like to the person temporarily in possession of someone else’s wealth? A focus on loans is distinctive because it foregrounds how timescales structure plans. How do the rhythms of entrustment (loans lent, recalled, lapsed) determine the rhythms of economic life – the stops and the flows – more generally?

Entrustments can be at rest, even when they appear to be moving. Small-scale traders in urban Malawi, with whom I conducted fieldwork, act as remittance conduits. They collect cash from migrants in South Africa, and they reimburse kin back in Malawi. To this extent, the story is one of flow. But in fact, traders use the cash they receive to buy stock, which is what they bring home with them. They sell their wares, and pay migrants’ relatives in Malawian kwacha from their own savings. The period of entrustment gives traders a rhythm to their business. In the period between receiving and passing on money, they are able to hold their livelihoods together.

This intervening period is also where loans are managed. In effect, the loan relationship needs performing (something especially clear with ‘development’ loans, the subject of the third volume of Shipton’s trilogy (2010)). Take another Malawian example. Commercial banks in Blantyre are currently extending their operations, broadening their base of depositors and borrowers. But, as they lend to businesspeople ever further down the socio-economic hierarchy, they submit them to intense surveillance. This means checking up on addresses, paying visits, and policing their actual use of money. People’s status as borrowers is constantly reinforced through a performance of bank authority and debtor subordination. A bank may even insist on conducting transactions on behalf of its clients. If the borrower wishes to sell exercise books to schools, the bank may buy the books wholesale, sell them to the schools, and subtract what is owed from the profits. The businessperson never even sees the loan. In this extreme case, the period between loan and repayment appears to collapse. But what happens in that period is enormously revealing. It affects people’s sense of who they are, their capacity to determine their own lives, and the meaning of debt.

Personhood is shaped by the conditions under which people hold property, what they do with that wealth, and under what conditions. In The Nature of Entrustment, we see this most clearly when Shipton discusses land (even more so in the second volume of his trilogy, which is about mortgages (2009)). When a man moves beyond his paternal home, he does so by holding land in entrustment, his role somewhere between a stranger, a transient and a client. He lives at the pleasure of his hosts. Strangers are continually reminded of their status. They are vulnerable, and subordinate to those who can claim to belong. As outsiders, they are made to perform ritually dangerous acts, like ‘cleansing’ a widow through sexual intercourse before she is inherited by a kinsman of her deceased husband. Yet, while strangers hold land, they have options. As they work their plots, they can take steps towards eventual belonging – crucially by quietly burying relatives there.

The timeframe of such land occupation is particularly open-ended, the tempo of land loans especially slow. (This, despite the disruptions that followed individualised land titles in the 1960s and 1970s, described in Shipton’s second book.) Most appear never to be recalled. But, given Shipton’s depiction of Luo life as characterised by criss-crossing entrustments, how do different loan rhythms intersect? How do people negotiate these multiple timescales as they build their plans? Imagine you are the custodian of a kinsman’s cow, or even his child. This limited access to labour surely sets the parameters of your hopes and aspirations, alongside your access to land itself. In the Malawian case, some businesspeople who plan in the interstices of remittance flows also negotiate bank credit, juggling different rhythms, performances and possibilities.

Shipton tells us that people are defined by their entrustments – their webs of debts and obligations. This assertion takes on a whole different meaning through the lens I have suggested here. Possessions are always highly contingent. Among Luo, many appear merely to have stopped off on a longer journey. And they are often held on behalf of someone else. Nevertheless, people build lives around their plans, with different timescales set by their diverse entrustments. For this kind of emphasis, Shipton’s conception of entrustment is ultimately too broad. If entrustment can refer to children’s care of younger siblings, or the soft contract of sacrifice, we lose the capacity to understand the rhythms of economic life through its loans.

To be fair, The Nature of Entrustment does not set out to explore these rhythms. What Shipton hopes to show us is the sheer diversity of everyday entrustments and obligations. There is obvious value to this, including its warning against uncritically restrictive notions of economy. From his perspective, the economy encompasses dead people. Entrustments come with feelings attached. Debts to elders are fulfilled by looking after juniors diligently. The Nature of Entrustment’s breadth and ethnographic depth is highly suggestive – not least, by leaving space for analytical approaches that Shipton does not himself propose. For his own purposes, a broad view of entrustment opens up new territory. It lays the ground for a work of economic anthropology that is a general ethnography in the classic tradition. And this Shipton does very well.



Bloch, M. & J. Parry. 1989. Introduction: money and the morality of exchange. In Money and the Morality of Exchange (eds.) J. Parry & M. Bloch, 1-32. Cambridge: Cambridge University Press.

Graeber, D. 2011. Debt: the first 5,000 years. New York: Melville House.

Mauss, M. 1990 [1925]. The Gift. London: Routledge.

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

———- 2009. Mortgaging the Ancestors: ideologies of attachment in Africa. London: Yale University Press.

———- 2010. Credit Between Cultures: farmers, financiers, and misunderstanding in Africa. London: Yale University Press.

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