Yale University Press has published Plastic Capitalism: Banks, Credit Cards, and the End of Financial Control (2024), by Sean Vanatta (University of Glasgow). A description from the Press:
American households are awash in expensive credit card debt. But where did all this debt come from? In this history of the rise of postwar American finance, Sean H. Vanatta shows how bankers created our credit card economy and, with it, the indebted nation we know today.
America’s consumer debt machine was not inevitable. In the years after World War II, state and federal regulations ensured that many Americans enjoyed safe banks and inexpensive credit. Bankers, though, grew restless amid restrictive rules that made profits scarce. They experimented with new services and new technologies. They settled on credit cards, and in the 1960s mailed out reams of high-interest plastic to build a debt industry from scratch.
In the 1960s and ’70s consumers fought back, using federal and state policy to make credit cards safer and more affordable. But bankers found ways to work around local rules. Beginning in 1980, Citibank and its peers relocated their card plans to South Dakota and Delaware, states with the weakest consumer regulations, creating “on-shore” financial havens and drawing consumers into an exploitative credit economy over which they had little control. We live in the world these bankers made.
An additional author note for readers of this blog: "Plastic Capitalism is fundamentally a history of how stakeholders used law—and especially state law—to structure consumer financial markets through the post-World War II era. It also shows how American bankers, through financial innovation and clever lawyering (including a cameo by Robert Bork), broke down the system of regulatory federalism that had restrained finance since the New Deal."
From the reviewers:
“Sean Vanatta’s remarkable Plastic Capitalism is the finest account we have yet of the rise of the now-ubiquitous credit card and the steady expansion of its role in American capitalism and in our own financial lives. In a narrative history that draws on deep archival research, Vanatta shows clearly how our financial technologies and economic world are built by law and politics, instead of emerging through consumer desire.”—Kimberly Phillips-Fein
“Vanatta illuminates the complex tapestry that is the US financial system by following one important thread—the history of the credit card industry. In this way he provides a novel and compelling account of how bankers made use of our divided federal system of government to break free of the constraints imposed on them by New Deal regulation. The mountains of credit card debt under which American households have come to labor was the unhappy result.”—Naomi Lamoreaux
More information is available here.
-- Karen Tani
