What Could Be Wrong with a Mortgage? Private Debt Markets from a Perspective of Structural Injustice

In many Western capitalist economies, private indebtedness is pervasive, but it has received little attention from political philosophers. Economic theory emphasizes the liberating potential of debt contracts, but its picture is based on assumptions that do not always hold, especially when there is a background of structural injustice. Private debt contracts are likely to miss their liberating potential if there is deception or lack of information, if there is insufficient access to (regular forms of) credit, or if credit is overly expensive. Markets for private debt can be mechanisms of structural injustice: rather than playing a neutral role, they reinforce injustices, because the failures of debt to be liberating disproportionately hit individuals in disadvantaged positions. By individualizing what are in fact structural problems, private debt can contribute to stigmatization, social exclusion and oppression. What is at stake, from a perspective of structural justice, is not only the distribution of income, but also the distribution of risk. The problems of private debt markets therefore require political attention. In addition to fighting the structural injustices that form the background condititions of private debt, it is also worth addressing private debt markets themselves.