A FRESH APPROACH TO THE PLACE OF CONSUMER CREDIT IN ECONOMIC AND FINANCIAL THINKING

Abstract

FEW AREAS IN THE FIELDS of economics and finance have been approached from such divergent points of view as consumer credit. Some prophets of doom have feared that the growth of consumer credit might prove to be the undoing of our whole economic system. On the other hand some of its most enthusiastic supporters have maintained that it is one of the most important of the factors responsible for our present high standard of living. Many shades of opinion between these extremes have also been expressed. Since the depression days of the thirties and especially since the publication of Consumer Credit and Economic Stability by Rolf Nugent, many economists have argued that consumer credit plays an important causal role in producing cyclical fluctuations and therefore should be regulated so as to control the amount granted during prosperity periods. As background for a somewhat different approach to consumer credit several of the past approaches will be summarized. The writers whose works are considered have not necessarily been chosen because they are the outstanding men who have written on this subject, but because their views represent different approaches to consumer credit which have had an influence on thinking and practice in the field.