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Household Indebtedness in the Context of the Financialization of Social Policies

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  • Basak Isil Alpar

    (Istanbul University, Faculty of Economics, Department of Labor Economics and Industrial Relations, Istanbul, Turkiye)

Abstract

Following governments and corporations, financial institutions and banks opened a new path for themselves through household indebtedness during the financialization process, which accelerated with neoliberalism and globalization and expanded the scope of inclusiveness. Regarding this mentality, this situation is related to the desire for control that emerged during the transition from natural philosophy to the scientific revolution. It is also related to developing an economic mentality that does not overlap with society and humanity by embracing capitalism’s theoretical foundations. In this context, quantitative and qualitative financialization strategies have emerged to cover people from almost every income group. Some of the people who are targeted by financialization through household indebtedness are also the people for whom these social policies exist. Therefore, this study aims to examine the transformative effect of the financial structure that provides income through household indebtedness on social policies and lending strategies developed for households. Result of the literature review reveals that welfare states and social inclusion are replaced by debtfare states and financial inclusion, respectively. Moreover, this situation is interpreted as the financialization of social policies. Financialization and lending strategies developed as part of financial restructuring strengthen market power while weakening the social state. Furthermore, households facing deficiencies in social state welfare provision and seeking individual loans to meet their basic needs constitute an indebted society.

Suggested Citation

  • Basak Isil Alpar, 2022. "Household Indebtedness in the Context of the Financialization of Social Policies," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 72(72-1), pages 1-38, June.
    • Handle: RePEc:ist:journl:v:72:y:2022:i:1:p:1-38
    DOI: 10.26650/ISTJECON2022-1122890
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    References listed on IDEAS

    as
    1. Lena Lavinas, 2018. "The Collateralization of Social Policy under Financialized Capitalism," Development and Change, International Institute of Social Studies, vol. 49(2), pages 502-517, March.
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    More about this item

    Keywords

    Social policies; Lending strategies; Household indebtedness JEL Classification: A12 ; F65 ; H53 ; G51 ; D14;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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