Sean Coyle. Is a truly autonomous choice possible for the borrower?


The image at the heart of Bentham’s tract is deficient for a number of reasons. By associating autonomy above all with ‘freedom’ of choice, the dominant conception pays insufficient attention to situational factors (vulnerabilities of the chooser) that impact upon the underlying premise of autonomy: self-determination. In one sense, parties to predatory loan agreements are not ‘self-standing’, in command of their own situation. They require outside assistance to meet their existing obligations, or to meet basic needs. Furthermore, payday loans target the uneducated and those in poor communities who do not have access to other cheaper sources of credit. Indeed most payday companies offer credit explicitly to those turned down for credit elsewhere. In such situations, a truly autonomous choice is not possible to the borrower, even if the borrower is acutely aware of the likelihood that the loan agreement will compound debt problems further down the line. The ‘help’ or ‘respite’ that is being offered equates to throwing a life-line to a drowning person, when both parties know the rescuer intends to tow the drowning person further out to sea. Most people would, I suspect, take any life-line that is offered. Immediate threat of drowning is always the main priority that has to be addressed, and one’s actions and decisions will tend to be structured around that above any other or farther-off consideration. In addition, typical users of payday loans will include those who need the money to cover gambling debts, drugs or the costs associated with other addictions.

Such examples stand starkly against the model of personal autonomy, especially as that concept is presented by the philosopher to whom modern individualists defer above all others: Kant. But the fact is that Kant himself, time and again, warned that genuine autonomy (a condition in which the will is not determined or shaped by outside forces) has nowhere been truly manifested. Should this not lead us to consider the appropriateness of a politics built on such a persona?

Aware of the issues surrounding payday loans, and the way in which they are administered, the OFT subsequently launched an investigation into payday lending practices . Among the concerns to which the investigation responds are the following:

(i) the adequacy of checks made by some lenders on whether loans will be affordable for borrowers

(ii) the frequency with which some lenders roll over or refinance loans

(iii) the lack of forbearance shown by some lenders when borrowers get into financial difficulty debt collection practices

(iv) using continuous payment authority (CPA) without the informed consent of the borrower, and trying to take payment where there is reason to believe that there are insufficient funds in the account.

Some of the OFT’s findings are published in an interim report dated November 2012 . Taken together, the concerns highlighted suggest that autonomy in Bentham’s sense is not the absolute, or even the highest, consideration in relation to practices of contracting. But the report does not raise systematic questions of the kind that would lead to a reconsideration of the autonomy model. It is not difficult to regard predatory lending practices as exhibiting, and indeed reinforcing, a ‘structural tilt’ which places privilege and resources into the hands of the well-off, at the expense of those with comparatively little. The model of contracting which permits such practices to flourish is centred upon the issue of commutative justice: the determination and enforcement of those obligations that are owed by, and often between, specific individuals. But I would like to argue that the commutative obligations arising under contract need to be linked to considerations of distributive justice. These are not separate issues but dimensions of a single issue: social justice. Conventional interpretations of contract law exclude the dimension of distributive justice, and thereby exhibit a clear structural tilt, by privatizing vulnerability and its consequences.

Further useful links:

Autonomy, Obligation & Virtue: An overview of Kant’s Moral Philosophy

Bentham, Kant, and the right to communicate

Image: Virtue: Paolo Veronese [Public domain], via Wikimedia Commons

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