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Debt bondage or bonded labor is a means of paying off loans with direct labor instead of currency or goods. It is either a kind of indenture or truck system, and is a form of unfree labor. Historically, in the USA, it is also sometimes called peonage. (Note, however, that the word peon has broader implications and usage in Latin America.) Where children have to work due to debt bondage, this is considered a worst form of child labor.
Historical background to bonded labor Prior to the early modern age, feudal and serfdom systems were the predominant political and economic systems in Europe. These systems were based on the holding of all land in fief or fee, and the resulting relation of lord to vassal, and was characterized by homage, legal and military service of tenants, and forfeiture. Many historians have argued that this system was also established in some Latin American countries, following European settlement. A modernization of the feudal system was "peonage", where debtors were bound in servitude to their creditors until their debts were paid. Although peons are only obliged to a creditor monetarily, it might be viewed that this relationship reduces personal autonomy. Historical peonage Peonage is a system where laborers are bound in servitude until their debts are paid in full. Those bound by such a system are known, in the US, as peons. Employers may extend credit laborers to buy from employer-owned stores at inflated prices. This method is a variation of the truck system (or company store system), in which workers are exploited by agreeing to work for an insufficient amounts of goods and/or services. In these circumstances, peonage is a form of unfree labor. Such systems have existed in many places at many times throughout history. Historical examples Modern views According to Anti-Slavery International, "A person enters debt bondage when their labor is demanded as a means of repayment of a loan, or of money given in advance. Usually, people are tricked or trapped into working for no pay or very little pay (in return for such a loan), in conditions which violate their human rights. Invariably, the value of the work done by a bonded laborer is greater that the original sum of money borrowed or advanced." At international law Debt bondage has been defined by the United Nations as a form of "modern day slavery" * and is prohibited by international law. It persists nonetheless especially in developing nations, which have few mechanisms for credit security or bankruptcy, and where fewer people hold formal title to land or possessions. According to some economists, for example Hernando de Soto, this is a major barrier to development in those countries - entrepreneurs do not dare take risks and cannot get credit because they hold no collateral and may burden families for generations to come. Where children are forced to work because of debt bondage of the family, this is considered not only child labor, but a worst form of child labor in terms of the Worst Forms of Child Labour Convention, 1999 of the International Labour Organization. Despite the UN prohibition, Anti-Slavery International estimates that "between 10 and 20 million people are being subjected to debt bondage today." Modern example: prostitution News media in western Europe regularly carry reports about one particular kind of debt bondage: women from Eastern Europe who are forced to work in prostitution as a way to pay off the "debt" they acquired when they were illegally brought over the border. This form of debt bondage also takes place in other parts of the world. See article on the trafficking in human beings. Marxist analysis According to Marxist economists, debt bondage is characteristic of feudal economies, where families are considered the responsible unit for financial relationships, and where heirs continue to owe parents' debts upon their deaths. Fully capitalist economies are characterized by the individual taking all responsibility, and such mechanisms as bankruptcy and inheritance taxes reducing creditors' rights (while increasing the power of the state). Heirs are freed from the creditor, but at the cost of a drastically increased power accruing to the state itself. Debt bondage is often a form of disguised slavery in which the subject is not legally owned, but is instead bound by a contract to perform labor to work off a debt, under terms that make it impossible to completely retire the debt and thereby escape from the contract. See also | ||||||||
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