The moral accounting of debts: productivity, deservingness and the consensual creation of Chapter XIII bankruptcy

Nicholas A. Pang

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Chapter XIII's wage-earner payment plans are now the default form of personal bankruptcy in the USA. During the Great Depression, it was created as a voluntary choice and enacted with unanimous legislative support. Absent conflict between creditors and labor and social reformers, legislators agreed that Chapter XIII was for the benefit of both honorable insolvents and their fair creditors. How did wage-earner payment plans emerge out of a consensual legislative process? Employing a computational abductive approach on a wide range of legislative, media and bankruptcy records, I show that Chapter XIII's creation was facilitated by a 'moral accounting' that, based on their race and gender identities, positively evaluated most White men bankruptcy petitioners as 'deserving', even as it recognized occupational variations in their economic 'productivity'. This study highlights how racial discourses of 'deservingness' are central to the construction of credit markets as part of America's submerged welfare state.

Keywords: borrowing; Canada: 1913; credit & debt; debt; and wealth; historical sociology; law; moral norms; stratification; AAM requested (search for similar items in EconPapers)
JEL-codes: J1 N0 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2025-01-31
New Economics Papers: this item is included in nep-lab
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Published in Socio-Economic Review, 31, January, 2025, 23(1), pp. 155-181. ISSN: 1475-1461

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