Freedom Is Meaningless Under Insurmountable Debt

December 1, 2019

Advocates are arguing that the Thirteenth Amendment prohibits usurious loans.

I wonder: What would Timothy Howe, a Reconstruction-era congressman who opposed slavery, have made of the story of Raedell Piaso?

A few years ago, Piaso was making a little less than $23,000 a year as a receptionist in Albuquerque when she couldn’t make her rent for her apartment.

Facing eviction, she took out a loan. She signed over the title to her family’s 2004 Ford F-150 as collateral and agreed to an annual interest rate of 300 percent. She thought she could make it work by cutting back—from macaroni and cheese, say, to ramen noodles.

Her payment history shows her trying to keep up. Over 13 months, she gave more than a quarter of her take-home pay to the lender—$5,617—on a loan of $1,971. But the lender applied less than $2 of that to the loan principal; the rest vaporized in fees and interest.

She fell behind, and the lender threatened to seize her truck. She drove west and left it with her parents on the Navajo Reservation, where the lender couldn’t reach it. And after that, she took the bus to work.

Piaso is one of millions of low-income Americans who use high-cost loans to bridge the gap between stagnant wages and the cost of living, and who live months or years trying to pay off loans they cannot afford—and so remain in debt.

The condition of their lives raises the question: Are these Americans fundamentally free?

Howe and his colleagues in the Reconstruction Congress grappled with this question after the Civil War. Howe was a Whig cum Republican, educated in a Methodist seminary, and trained in the law. He sat as a justice on the Wisconsin Supreme Court before winning a U.S. Senate seat in 1860. He was one of the Senate leaders who voted for the Thirteenth Amendment before Abraham Lincoln had even committed to it. And he was there for the rich aftermath following the amendment’s enactment: when the Reconstruction Congress contended with what it meant to ban slavery, and did so by defining its opposite—freedom.

As the historian Eric Foner and others have described, the Reconstruction Congress adopted a core view of the new Republican Party: that central to freedom is the right to enjoy the fruits of one’s own labor. In his final debate against Stephen A. Douglas, Lincoln cast the idea of free labor as “the common right of humanity” versus “the divine right of kings … the same spirit that says, ‘You work and toil and earn bread, and I’ll eat it.’”

To many northern Republicans like Howe, that aspect of freedom was woven in with other fundamentals of liberty: the ability to come and go as one pleases, to own property, and to be educated.

So how to define the labor part of freedom—especially for people whose only property was their own body and what that body could produce through work?

One of Congress’s early efforts to answer that question was the Civil Rights Act of 1866. It declared that “all persons” born in the United States were entitled to be citizens, with all the rights of white citizens. The first right to be enumerated was that to make and enforce contracts, which is an essential part of being able to use or sell one’s labor freely.

Even so, the freedom of contract can be a hollow thing, if one side holds the bargaining power and the other side only its labor.

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