I thank Stephen A. Marglin and Rolf Steppacher for numerous discussions about previous versions of this article. The support of Isabelle Alexandra Ricq was key during and around fieldwork, including as an interpreter. I also especially thank Dr Afrizal, Eko Cahyono, Cecilia Yuliati Hendayani, Isriwal Putra Akhir, Farhan Mahfuzhi, Laksmi A. Savitri, Terry Scheller, Pak Selamat, Yaroslav Tenzer and Gunawan Wiradi. Two anonymous reviewers provided valuable comments. The Swiss National Science Foundation is acknowledged for its support.
The Hidden Consequences of Credit: An Illustration from Rural Indonesia
Article first published online: 1 JUL 2013
© 2013 International Institute of Social Studies
Development and Change
Volume 44, Issue 4, pages 839–860, July 2013
How to Cite
Gerber, J.-F. (2013), The Hidden Consequences of Credit: An Illustration from Rural Indonesia. Development and Change, 44: 839–860. doi: 10.1111/dech.12045
- Issue published online: 1 JUL 2013
- Article first published online: 1 JUL 2013
Interest in rural financial development has been booming, but often with a blind eye to the broader consequences. Very few studies have tackled the unintended economic, social and ecological outcomes of ordinary indebtedness, the inevitable other side of credit. This article explores some of the main ‘hidden’ side-effects of credit/debt relations, with special reference to the Indonesian plantation sector. I argue that widespread credit/debt relations are not only an important factor behind capital, land and labour control; they also generate constraints that foster market discipline and contribute to undermine traditional community bonds as well as environmental conditions. More generally, credit/debt relations represent a powerful mechanism of social selection that has, in the long run, crucially shaped the trajectory of capitalism at the household, firm and government levels.