! 7/19/14! 1! Vulnerable)due)to)hope:)aspiration)paradox)as)a)cross4cultural)concern) ! Eric!Palmer! Department!of!Philosophy! Allegheny!College! Meadville!PA!16335!USA! ! Eric)Palmer)is!Professor!of!Philosophy!at!Allegheny!College.!He!is!coBeditor,!with!Sirkku!Hellsten,!of! Journal(of(Global(Ethics,!and!President!of!the!International!Development!Ethics!Association.!His!recent! research!in!development!ethics!concerns!multinational!corporate!responsibility!in!light!of!practices!of! resource!extraction!in!developing!nations,!and!vulnerability!and!finance,!which!is!the!topic!of!his! presentation!at!IDEA.!Recent!publications!include!an!edited!guest!issue!of!Journal(of(Global(Ethics! (2013,!10:3)!and!"The!Andhra!Pradesh!Microfinance!Crisis!and!American!Payday!Lending:!Two! studies!in!vulnerability,"!Révue(Ethique(et(Economique(/(Ethics(and(Economics!(10:2,!2013).!! ! Abstract) Vulnerability!concerns!sensitivity!to!shock,!or!the!inability!of!an!individual!to!rally! in!the!face!of!setbacks.!It!pertains,!in!its!most!familiar!use,!to!health,!to!healthBrelated! emergencies!(such!as!epidemics)!and!to!healthBrelated!social!and!environmental!conditions! (such!as!famines!and!climate!change).!This!presentation!considers!economic!vulnerability,! exploring!the!risk!of!deprivation!of!necessary!resources!due!to!a!complex!and!rarely! discussed!vulnerability!that!arises!from!hope.!Pierre!Bourdieu's!sociological!account!of! French!petitBbourgeois!aspiration!in!The(Social(Structures(of(the(Economy!has!recently! inspired!Wendy!Olsen!to!introduce!the!term!"aspiration!paradox"!to!characterize!cases! wherein!"a!borrower's!status!aspirations!may!contribute!to!a!situation!in!which!their! borrowings!exceed!their!capacity!to!repay,"!leaving!the!individual!much!the!worse,!due!to!an! aspiration!to!betterment.!! The!overextended!homebuyer,!the!family!that!takes!vacations!on!credit,!and!the! entrepreneur!who!strives,!fails,!and!falls!back!into!worse!circumstances!are!three!examples! of!failed!aspiration!noted!in!Bourdieu's!observations!of!the!French!middle!class.!Olsen! extends!Bourdieu's!discussion!to!a!detailed!case!study!among!poor!women!of!rural!India,! displaying!the!significant!hazards!that!accompany!"cow!loans,"!which!are!loans!for!livestock! that!may!or!may!not!lead!to!improvement!in!women's!selfBesteem,!status,!financial!position! and!financial!stability.!For!this!presentation!I!add!two!of!my!own!cases!to!the!survey!of! aspirational!vulnerability:!vulnerability!that!attends!microcredit!lending!generally,!most! notably!in!India,!and!vulnerability!in!the!context!of!payday!loans!and!credit!cards,! particularly!in!USA.!If!such!financial!opportunities!were!not!made!available!to!these!people!–! if!some!were!denied!loans!due!to!a!careful!assessment!of!their!vulnerability!–!would!they!be! better!off?!We!should!seriously!consider!that!they!might!be.!! Addressing!the!paradox!of!aspiration!for!just!social!planning!and!for!just! development!may!require!us,!first,!to!distinguish!factors!within!an!analysis!of!aspiration.!The! antecedent!attractions!of!aspiration!are!distinguishable!from!the!advantages!that!come!as!a! result!of!aspiration,!and!we!may!also!consider!the!risks!(the!vulnerability)!that!attend!the! latter.!To!accompany!this!analysis,!second,!we!must!consider!separately!the!place!of! ! 7/19/14! 2! individual!selfBdetermination!within!just!social!arrangements,!in!cases!in!which!selfB determination!leads!to!poor!outcomes.!Familiar!philosophical!discussions!of!adaptive! preference!touch!on!related!concerns!regarding!the!relation!of!individuals'!agency!to!other! aspects!of!their!flourishing.!! I!will!hazard!the!straightforwardly!paternalistic!suggestion!that!limiting!access!to! lending!to!those!who!are!vulnerable!to!their!aspirations!can!be!a!just!policy.!Because! aspiration!paradox!is!a!crossBcultural!phenomenon,!and!because!lending!frequently!involves! asymmetries!in!mathematical!education!between!borrowers!and!lenders,!I!hope!to!elude!at! least!some!of!the!charges!of!colonialism!that!have!gained!a!stronger!purchase!on!adaptive! preference!arguments.! ! ! 0.)Introduction) My!focus!is!vulnerability,!which!concerns!"individual!susceptibility,"1!insecurity,! sensitivity!to!shock,!or!the!inability!of!an!individual!to!rally!in!the!face!of!setbacks.!It! pertains,!in!its!most!familiar!use,!to!health,!to!healthBrelated!emergencies!(such!as! epidemics)!and!to!healthBrelated!social!and!environmental!conditions!(such!as! famines!and!climate!change).!I!take!its!opposite!to!be!resilience:!a!concept!that!may! differ!from!robustness,!or!stability.! Vulnerability!is!a!muchBused!term!in!health!care!and!in!social!studies!of! development.!But!it!is!only!lightly!used!in!philosophy;!its!use!is!nevertheless!on!the! rise.!It!was!perhaps!introduced!into!late!20th!century!development!ethics!by!Denis! Goulet,!in!part!of!an!interesting!and!radical!theory!of!human!development,!but!I! think!its!rise!is!more!clearly!traced!to!broader!philosophical!currents!in!ethics.!It!has! found!its!way!into!current!discussion!through!the!ethic!of!care;!and!in!Judith!Butler's! term!"precarity,"!which!might!be!taken!as!a!synonym!of!vulnerability.!Today,!alas,!I! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 2008, Springer, Encyclopedia of public health: Individual Susceptibility Definition "Individual susceptibility is diversity in responsiveness among individuals to occupational and environmental exposures. It makes it difficult to determine actual risks, particularly at the low levels to which most people are exposed. The individual susceptibility is largely determined by genetic factors, which are very complex in nature. For example the toxicity of a number environmental and workplace chemicals is determined by a complicated balance of its toxicity and metabolic biotransformation. These processes are largely influenced by individual genetic factors, which are crucial in individual susceptibility. So, effects of exposure to a certain chemical are related to its toxic effects, intensity of exposure and individual susceptibility." ! 7/19/14! 3! don't!have!the!time!available!to!visit!these!theorists!much!further:!this!presentation! won't!be!a!thick!accounting!of!vulnerability.! My!broadest!reason!for!focusing!upon!vulnerability!–!a!claim!that!I!also!won't! articulate!further!today!–!is!that!consideration!of!the!concept!might!promote! different!intuitions!that!the!terms!used!more!frequently!in!egalitarian!and!Kantian! ethical!theory!cannot.!I!suggest!that!vulnerability!is!a!particular,!ethically!salient! marker!of!what!Thomas!Nagel!calls!"the!distinction!between!persons":!it! characterizes!a!feature!of!differences!between!persons!(or,!of!persons!in!transient! states...)!that!we!would!wish!to!take!account!of,!one!that!is!distinct!from!equality!of! persons!and!respect!of!persons.!We!need!to!take!account!of!what!people!need,!and! this!is!different!from!treating!them!equally.!Vulnerability!presents!one!important! aspect!of!need!that!requires!attention!in!ethics.! Arguing!such!a!claim!would!exceed!the!short!time!available;!so!I!will!zero!in! on!a!particular,!unusual!variety!of!vulnerability!that!might!be!illustrative;!one!that!I! think!has!surprising!and!farBreaching!relevance!for!ethical!discussion!–!linking!it!to! the!vexed!concept!of!adaptive!preference,!for!example.!The!species!of!vulnerability!I! will!highlight!is!the!vulnerability!that!accompanies!hope!for!improvement;!the! variety!of!this!species!will!be!economic.!I!will!explore!the!risk!of!deprivation!of! necessary!resources;!a!deprivation!that!arises!due!to!hope.!We!hazard!burdens!and! risks!to!produce!better!lives!in!the!long!run;!but!risks!may!not!ultimately!pay!off,! and!may!not!turn!out!well!for!us.!Aspirations!may!set!us!back.!Wendy!Olsen,!a! development!sociologist,!introduced!the!neat!term!"aspiration!paradox"!to! characterize!such!cases.!In!her!words,!"a!borrower's!status!aspirations!may! contribute!to!a!situation!in!which!their!borrowings!exceed!their!capacity!to!repay,"! leaving!the!individual!much!the!worse,!due!to!an!aspiration!to!betterment.!! Passing!from!sociology!to!ethics!and!policy,!this!leads!to!the!question:!should! sensible!people!be!encouraged,!or!even!allowed,!to!hazard!all!the!risks,!and!so!the! vulnerability,!that!they!think!prudent?!(I!expect!that!many!of!you!can!already!see,! with!that!question,!the!link!to!discussions!of!adaptive!preference.)! ! 7/19/14! 4! ! 1.)Aspiration)paradox) In!"Aspiration!Paradox!in!Indian!Microfinance,"!Wendy!Olsen!explores!women's!selfB help!groups!in!Andhra!Pradesh,!India,!and!she!particularly!focuses!upon!the!efforts! by!many!rural!women!to!purchase!and!keep!a!$200!cow,!through!installment! lending.2!A!standard!lending!support!for!this!venture,!called!a!"cow!loan,"!has! become!readily!available!in!some!villages!through!the!efforts!of!nonprofits!and! government.!These!loans!can!and!regularly!do!lead!the!families!of!the!women,! already!low!in!income,!to!significant!financial!loss.!The!cow!itself,!which!may!not! survive!the!loan!period,!at!best!generates!a!stream!of!income!at!about!the!same!level! as!the!cost!of!keeping!that!same!cow!during!the!nearly!two!year!period!of! repayment!for!a!cow!loan.!If!the!risk!is!surpassed!and!the!cow!survives,!it!is!likely!to! be!'budget!neutral'!during!the!repayment!period,!and!a!good!value!thereafter.!But!of! course!financial!value!should!not!be!considered!the!only!relevant!value,!in!this!case:! it!is!clear!that!the!process!of!gaining!and!paying!back!such!loans!produces!selfB esteem!and!community!esteem,!and!the!cow!loan!scheme!is!seen!as!of!great!value! for!personal!development!and!social!improvement!for!women!in!society.!! But!there!is!more!to!consider!on!the!economic!and!social!fronts.!For!the! woman!raising!the!cow,!roughly!ten!days!per!month!that!might!have!been!spent! earning!cash!through!labor!is!occupied!in!tending!the!cow.!In!some!areas,!local! overgrazing!and!increased!water!demand!for!cattle!also!leads!to!environmental! degradation!for!the!greater!community.!!The!group!interactions!and!selfBeducation! that!accompany!and!support!these!cow!loans!within!the!womens'!Self!Help!Group! organizations!that!distribute!the!loans!are!considerable,!wellBdocumented!rewards! that!women!discover.!We!and!they!may!hope!that!this!will!also!provide! improvement!in!women's!status!over!the!generations.!But,!Olsen!argues,!frantic!reB !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2 Wendy Olsen, "Aspiration Paradox in Indian Micro-Finance: A Difficulty and an Opportunity for Debate," University of Manchester Brooks World Poverty Institute, BWPI Working Paper 42, 2008 2-5. http://www.bwpi.manchester.ac.uk/resources/Working-Papers/bwpi-wp-4208.pdf. And see Jamie Morgan & Wendy Olsen, "Aspiration Problems for the Indian Rural Poor: Research on self-help groups and microfinance," Capital and Class 35(2) 2011, 189-212. ! 7/19/14! 5! borrowing!to!pay!the!demanding!loans!and!increased!suffering!for!the!woman!and! her!family!frequently!accompany!these!rewards.! Olson!has!not!completed!sufficient!survey!work!that!might!lead!her!to! conclude!that!her!"suspicion!of!a!problem"!with!the!loans!is!in!fact!a!serious! problem:!family!finances!are!difficult!to!study!so!carefully,!and!she!did!not! document!failures!to!repay!loans.!Is!the!increase!in!vulnerability!worth!it?!In!Sen's! language,!does!the!institution!of!cow!loans!serve!for!"expanding!the!freedoms!we! have!reason!to!value,"!or!is!it!a!paradoxical!aspiration,!one!that!is!desirable,!yet!all! too!likely!to!produce!more!bad!than!good?!I!am!not!about!to!make!the!mistake!of! suggesting!that!it!is,!or!that!it!is!not;!that!the!aspiration!to!a!cow!loan!is!or!is!not! really!problematic,!overall.!I!am!not!highly!familiar!with!the!case,!and!I!am!not!an! expert!in!measuring!capabilities!and!environmental!impacts.!I!am!too!familiar!with! the!thorny!issue!of!colonial!attitudes,!and!I!am!too!much!the!skeptic!to!be!tempted! to!reach!an!answer,!myself.!But!I!suggest!that!this!is!an!example!that!helps!us!to! consider!the!possibility!that!reasonable!people!can!aspire!to!what!isn't!good!for! them.!And,!I!think!I!have!a!good!idea!of!an!important!root!of!the!problem,!if!there!is! a!problem.! ! 2.)The)landscape)of)lending) !!I!think!I!see!a!similar!problem,!a!possible!paradoxical!choice!for! improvement,!in!the!uptake!of!microcredit!by!the!poor,!when!lending!conditions!are! not!advantageous.!Another!such!case!is!the!rise!of!forBprofit!microfinance!in!India,!in! which!the!lending!conditions!are!tuned!by!market!forces,!and!tuned!less!in!favor!of! the!borrower!than!in!the!past,!so!that!the!lender!might!endeavor!to!do!well! financially!as!well!as!socially.!And!lending!in!USA!through!the!mechanism!of!payday! loans!presents!similar!concerns.!The!recent!history!of!the!uptake!of!mortgages!in! the!US!markets!is!also!similar.!In!each!of!these!lending!cases!that!I!will!not!discuss!in! detail!here,!more!clearly!than!in!the!case!of!cow!loans,!many!people!are!very!likely! to!get!what!they!bargained!for,!but!not!what!they!expected.!And!this!is!because!they! ! 7/19/14! 6! did!not!really!know!what!to!expect:!instead,!they!got!less!than!expected,!and!their! vulnerability!is!realized!as!a!dramatic!decrease!in!living!standards.!! Do!people!understand!what!they!aspire!to,!in!finance?!I!will!switch!away! from!Olson's!example,!now,!to!consider!one!closer!to!my!home:!U.S.!perceptions!of! wealth,!and!American!understanding!of!the!finance!of!mortgages.!Thomas!Diprete! has!studied!the!results!of!a!2005!Gallup!poll!of!United!States!opinion.3!The!survey! straightforwardly!indicates!that!over!50%!of!Americans!age!18B29!believe!that!they! will,!at!some!point!in!their!lives!"be!rich."!Diprete!teases!out!what!they!mean!by! 'rich':!he!expects!that!they!hold!it!corresponds!very!roughly!to!a!household!income! of!about!$120,000!per!annum,!which!represented!about!the!top!10%!of!income!at! that!time,!as!it!does!now.!While!it!is!possible!to!fit!50%!of!people!into!that!bracket! for!a!brief!portion!of!their!lives,!so!that!people!'take!turns'!at!being!rich,!I!think!it's! reasonable!to!say!both!that!that!is!not!how!it!works!–!there!is!not!so!very!much! mobility!in!the!U.S.!system,!I!could!show!you!this!BB!and!taking!turns!is!not!what!the! young!adults!intended!to!suggest,!anyway:!they!aspired,!and!expected,!to!become! rich,!and!probably,!to!stay!there.!Many!other!surveys!point!to!a!complexly! structured,!but!very!robust,!mistaken!belief!in!opportunity!for!young!and!old.!! Those!are!aspirations;!consider!also!the!results!of!our!aspirations.!Recent! experiences!with!credit!in!the!housing!market!of!the!United!States!strongly!suggest! that!a!great!proportion!of!the!population!whose!finances!indicate!middle!class! status!show!limited!ability!at!successfully!managing!financial!risk!under!the!lending! conditions!that!prevail!there.!Careful!surveys!show!that!they!do!not!understand! what!"compound!interest"!actually!entails,!for!example.!!And!a!good!proportion!of! households!are!quite!vulnerable!to!the!demands!imposed!by!emergencies:!One! credible!survey!indicates!that!half!of!all!American!adults!would!agree!that!they! definitely!or!probably!could!not!come!up!with!$2,000!to!meet!an!emergency!within! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3 Thomas Diprete, "Is This a Great Country? Upward Mobility and the Chance for Riches in Contemporary America," Research in Social Stratification and Mobility 25 2007 89-95. ! 7/19/14! 7! the!space!of!a!month.4!!This!is!the!precarious!space!in!which!even!the!middle!classes! live,!in!one!of!the!wealthiest!of!nations,!facing!financial!tides!that!they!cannot! predict,!with!an!optimism!that!isn't!borne!out!by!the!evidence.!And,!by!the!way,!they! also!don't!realize!their!ignorance:!when!asked!to!rate!their!confidence!regarding! their!grasp!of!finance,!they!will!express!high!confidence,!and!they!will!estimate!that! they!are!clearer!about!it!than!their!neighbors,!generally!–!so,!not!only!do!they!not! know,!they!don't!know!that!they!don't!know.! ! 3.)Adaptive)preference) At!this!point,!perhaps!my!voice!sounds!rather!paternalistic!as!an!American,! or!neoBcolonial,!as!a!development!ethicist.!I!may!be!taken!to!be!suggesting!that!I,! armed!with!the!work!of!economists,!understand!these!people's!situations!better! than!they!themselves!do.!I!haven't!quite!argued!that.!But!their!own!choices,!when! seen!in!the!aggregate!of!populations!of!people!like!them,!are!likely!to!harm!them,!or! constrain!flourishing.!I!am!suggesting!I!can!see!something!about!them!that!they! themselves!can't.!I!am!arguing!that!they!cannot!pass!the!tests!that!I!see!as!relevant! for!appropriate,!or!rational,!choice.!And!I!would!argue!that!it!is!not!necessary!for!me! to!make!those!reasons!their!own!reasons!as!well,!for!a!concern!like!mine!to!be! promoted!legitimately!in!public!policy.!I!would!make!claims!on!behalf!of!expertise! that!could!infringe!upon!individual!freedom.! The!terrain!I!am!entering!here!has!clear!resemblance!to!that!in!which!we!find! the!development!ethicist!who!argues!that!some!widely!and!firmly!held!subjective! preferences!and!aspirations!are!not!worth!having.!Martha!Nussbaum!directly! challenges!the!individual's!preferences:!she!writes,!"embraced!as!a!normative! position,!subjective!welfarism!makes!it!impossible!to!conduct!a!radical!critique!of! unjust!conditions."!(Women!and!Human!Development,!117)!She!argues!for! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 4 Annamaria Lusardi, Peter Tufano. "Debt Literacy, Financial Experiences, and Overindebtedness," National Bureau of Economic Research Working Paper No. 14808 (March 2009). Available at: http://www.nber.org/papers/w14808. Annamaria Lusardi, Daniel Schneider and Peter Tufano, "Financially Fragile Households: Evidence and Implications," National Bureau of Economic Research Working Paper No. 17072 (March 2011). Available at: http://www.nber.org/papers/w17072. ! 7/19/14! 8! tempering!individual!choice!with!a!reBassertion!of!regard!for!development!in!social! policy.!In!one!example,!she!notes!that!women!in!impoverished!circumstances!who! have!the!charge!of!their!children's!care!may!have!to!choose!concerning!which!of!two! children!to!send!to!school,!or!to!educate!the!furthest.!In!many!societies,!the!women! will!routinely!choose!sons!over!daughters.!Nussbaum!proposed!an!explanation!for! this,!and!in!1999!she!laid!it!down!to!women!"internaliz[ing]!their!secondBclass! status!and!not!striv[ing]!for!what!is!out!of!reach."!They!have!adapted!their! preferences!to!unjust!circumstances,!she!argues,!and!they!are!reBimposing!those! circumstances!on!their!daughters.!!And!so,!she!finds,!"we!have!good!reasons...to! support!public!investment!in!female!literacy,!even!in!the!absence!of!young!girls'! demand!for!such!programs."!(Nussbaum,!Sex(and(Social(Justice!1999,!151)!! Put!too!crudely:!the!women!know!what!they!want,!but!Nussbaum!knows! what!they!need;!or!at!least,!an!element!of!what!they!need,!for!development!and! justice.!Otherwise,!women's!own!preferences!may!"internalize"!and!perpetuate!the! conditions!of!their!own!oppression.!Critics,!such!as!Alison!Jaggar!and!Uma!Narayan,! have!replied!that!Nussbaum!produces!a!reconfigured!colonial!perspective,! perpetuating!the!tendency!to!see!poor!women!as!unthinking!victims!of!patriarchal! cultures.! Does!my!discussion!hazard!similar!dangers?!Certainly.!But!with!respect!to! most!of!the!cases!that!I!have!noted,!I!think!the!charge!of!colonialism!can!be! effectively!deflected,!by!steering!away!from!psychological!explanation!of! preferences,!and!towards!the!details!vis!a!vis!justice!for!the!social!situation.!So,!on!to! my!closing!deflection.! Vulnerability,!like!dependence!and!care,!is!very!much!constructed!within!a! social!context.!Some!vulnerabilities!are!rather!robust!across!widely!varied!social! contexts!–!for!a!simple!example,!babies!will!die!when!not!attended!to,!for!whatever! social!reasons!there!are!that!lead!to!them!being!neglected.!Other!vulnerabilities,!by! contrast,!are!very!sensitive!to!such!context:!Babies!will!be!fed!perhaps!too!little! clean!milk!in!some!circumstances,!but!they!won't!as!frequently!die!from!drinking! ! 7/19/14! 9! polluted!water,!if!their!parents!aren't!encouraged!by!authority!figures!in!lab!coats!to! buy!nutritious!baby!formula.!! Some!troubling!aspects!of!financial!decision!are!also!robust!across!varied! contexts.!Perhaps!the!tendency!of!U.S.!residents!to!see!theirs!as!a!land!of! opportunity!is!evidence!of!one!such!case.!But!much!that!is!troubling!about!financial! decision!in!the!cases!I!have!reviewed!here!is!very!sensitive!to!context.!These!choices! are!built!into!a!particular!social!context!of!contracting!individuals,!some!of!whom! know!the!business!of!finance!far!more!thoroughly!than!others.!The!landscape!of! lending,!for!all!these!cases,!with!the!possible!exception!of!the!cow!loans,!is!inhabited! by!wolves!and!sheep.!It's!not!that!the!sheep!don't!know!what's!good!for!them;!they! simply!aren't!sufficiently!aware!of!the!presence!of!wolves,!and!they!can't!be! expected!to!be!aware,!either.! These!sheep,!as!I!have!characterized!them,!are!not!fools:!the!poor!of!the!globe! are!adept!at!maintaining!complex!financial!arrangements,!and!their!finances!have! never!been!simple.!To!manage!their!businesses,!save!money!for!various!purposes! along!varied!time!scales,!and!to!ensure!funds!for!emergency,!they!themselves!have! devised!a!broad!variety!of!strategies!across!the!globe!that!economists!have!noted.! Lending!circles!and!lottery!groups!have!been!found!to!be!indigenous!economic! systems!that!have!long!worked!for!the!people's!benefit.5!But!human!psychological! bias,!naïveté,!and!exploitation!are!also!features!that!can!be!found!in!the!landscape!of! lending.!Those!who!are!naïve!in!particular!financial!practices!are!at!a!disadvantage.! If!the!practices!are!carefully!designed!to!capture!their!attention!but!only!partially!to! address!their!needs,!then!those!who!have!dedicated!their!time!and!education!to! designing!such!attractive!lending!offers!are!at!an!advantage.!! How!do!I!avoid!charges!of!paternalism,!then,!if!I!will!not!straightforwardly! deny!that!people!may!not!know!what!is!good!for!them?!First,!where!practical,!avoid! the!trap!of!psychological!theorizing,!avoiding!the!psychological!explanation!that! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5 See Daryl Collins, Jonathan Morduch, Studart Rutherford and Orlanda Ruthven, Portfolios of the Poor (Princeton, N.J.: Princeton, 2009); Abhijit K. Banerjee and Esther Duflo, Poor Economics (New York: Public Affairs, 2011). ! 7/19/14! 10! enmires!Nussbaum's!justification.!Much!is!gained!by!providing!the!ethical! justification!for!criticism!of!people's!choices!simply!by!relying!on!other!ethical! materials!that!are!readily!at!hand.!! In!this!case,!a!relational!vulnerability!that!results!from!a!differential!in! education!–!for!example,!in!finance!specialists!attempting!to!sell!unfamiliar!products! to!those!less!educated!–!this!is!not!a!case!in!which!ignorance!is!the!most!ethically! salient!characteristic.!Rather,!this!is!a!case!of!exploitation.!Restricting!access!to! borrowing!may!be!appropriately!justified!within!a!society!due!to!paternalistic! concerns!(we!don't!want!people!getting!in!over!their!heads).!But!the!ethical! justification!for!restriction!in!these!cases!–!perhaps!with!the!exception!of!the!cow! loans!–!is!based!not!on!paternalism,!but!rather,!on!duties!to!protect!against! exploitation.!Nussbaum!also!is!on!her!firmest!ground,!I!think,!when!she!most!clearly! separates!the!psychological!explanation!for!dubious!choices!from!the!ethical!ground! for!the!justification!of!criticism!of!that!behavior.!! The!criticism!in!this!case,!then,!is!of!the!ethics!of!the!lender!and!the! permissiveness!of!the!social!order,!which!allows!exploitation!to!take!place.!I!need! not!know!what!the!borrower!needs,!I!need!only!know!that!the!lender!is!setting! people!up!for!a!fall.!The!ethical!criticism!is!not!of!their!choice,!actually,!it!is!of!the! lender,!and!of!a!society!that!does!not!provide!opportunities!to!borrow!or!save!that! do!not!so!seriously!increase!vulnerability.! MalBdesigned!opportunities!yield!vulnerability;!other!opportunities!may! yield!freedom.!Borrowers!go!to!loan!sharks!and!see!their!debt!double!once!a!month,! when!no!better!option!is!available.!They!go!to!American!payday!lenders!and!see! their!debt!double!every!4!months,!when!no!better!option!is!available.!For!some!of! these!cases,!we!need!not!broach!the!subject!of!paternalism!in!policy!choices!that! deny!poor!opportunities!to!the!poor,!if!people!instead!have!access!to!more! appropriate!options,!both!suited!to!their!understanding!and!absent!exploitation.!! But!exploitation!is!not!the!root!concern!for!all!such!cases:!the!cow!loans! continue!to!trouble!me.!