Consumer credit has been a crucial element of modern mass consumption societies across the globe. The way lending institutions evolved, however, and the social function they were awarded throughout the twentieth century, differed fundamentally in Western Europe and North America. Taking the examples of France and the United States, Gunnar Trumbull provides a suggestive study of varieties of consumer capitalism that focuses on commercial lenders, state regulators and the political coalitions behind credit policy. Why did especially American households amass unprecedented levels of debt in the twentieth century? In pursuit of this question, Trumbull adds not only to a growing literature on consumer lending, but also to a recent interest in comparative and transnational histories of consumer capitalism in the Western world.
Consumer lending—which will come as little surprise to many readers—expanded more slowly in France than in the United States and French lending institutions and practices had to overcome significantly greater resistance to attain social legitimacy. Trumbull’s explanations for this divergence, which focus less on cultural differences in consumption but instead on the lending institutions and the interests that support them, offer many valuable insights. In two chapters, Trumbull sketches the role of commercial banks as lenders as they entered the consumer credit market in both countries over the course of the twentieth century. U.S. banks began to see consumer loans as a reputable and potentially profitable market by mid-century, offering installment loans and eventually universal credit cards. French bankers, by contrast, viewed consumer lending as not all that profitable, and generally suspect, well into the 1980s and they refrained from attaching revolving credit accounts to the cards they issued. Instead, as the subsequent chapters document, sales finance companies such as CETELEM and Sofinco, affiliated with retailers who sold household durables emerged as the driving force in expanding consumer credit in postwar France. In the United States, as well, retailers had early on been a leading force of innovation in the credit sector until they were ultimately crowded out by increasingly ubiquitous universal bankcards in the last quarter of the twentieth century. Much of this story is already known from existing national histories of the development of the credit sectors in France and America, but Trumbull provides the reader with concise narratives buttressed by an impressive amount of archival research on both sides of the Atlantic.
The real strength of the book lies with its attention to the underlying policy coalitions that have supported or hampered the growth of credit. Labor unions rarely play a significant role in accounts of consumer credit, yet Trumbull indicates how vigorously American unions fought for credit availability while the French labor movement counted among the fiercest critics of credit financing. While the American state pursued postwar growth policies largely compatible with consumer debt, French regulators worried about inflation and capital for industrial investment. Perhaps unexpectedly, the French state pursued a much more flexible, and in some ways, market friendly approach to usury caps. Whereas the United States continued to have a multitude of restrictive state-level usury laws well into the 1970s, which were supported by religious conservatives as well as pro-welfare liberals. The reason for this anomaly, Trumbull suggests, rests with different social expectations regarding the role of consumer credit in both countries. While French regulators, though reluctant about expanding credit, saw usury caps primarily as a tool of macro-economic regulation, credit in the United States had assumed a larger social significance, which demanded constraint to ensure it remained socially just.
Trumbull’s subtitle implies a larger thesis. Credit had early on been regarded as a tool for social welfare in both countries, providing temporary financial assistance in times of need to the poor and to working class citizens. In France, the link between credit and welfare dissolved somewhat as welfare institutions expanded, whereas in the United States, it was transformed into a social right during the second half of the last century. Credit promised access to America’s “Consumer’s Republic” (Lizabeth Cohen) and numerous social groups from African Americans to women and welfare recipients successfully fought for credit access, culminating in the Equal Credit Opportunity Act of 1974. To Americans as citizens and regulators, as lenders and borrowers, credit came to be seen as “socially progressive and economically virtuous” in ways that remained alien to most French. As Trumbull shows by contrast, throughout much of the twentieth century the French tended to view credit as socially inefficient, too costly for working class consumers or not profitable enough for lenders.
The individual over-indebtedness of American households and the systemic liabilities of overextended consumer debt that have recently commanded so much interest can therefore not simply be traced to a hedonistic consumer culture or to the dramatic deregulation of the lending market since the 1970s. Trumbull suggests the answer is more complex and includes widespread liberal aspirations for credit access as a tool for social improvement. The comparative perspective also reveals that over-indebtedness and unsustainable household debt levels are no longer solely an American phenomenon. Yet, the American case and its development remain unique in many ways. Trumbull could have expanded his comparative perspective to include other European countries such as Germany or industrialized nations in Asia, such as Japan. Both of these countries, recent studies have shown, share much with France regarding their experience with consumer credit in the twentieth century and neither fully embraced the American vision of credit—or of market mechanisms more generally—as a tool for social policy.
