Deductions and counter-deductions in South Africa

Abstract

The real economy as a concept has taken root not only in highly developed economies but also in those characterized by “the rapid growth of aspiration accompanied by massive incorporation of people into the current market economy, through the expansion of indebtedness and financial devices . . . [and] the impossibility to pay,” where plural and shifting scales coexist (Neiburg and Guyer, this volume), and where there “is interplay between different units of measure and scales” (Neiburg 2016: 82). This plurality, in the South African case, means official figures fail to capture the true extent of borrowing and lending and the way state salaries and grants serve as collateral for apparently informal loans. Attempts to regulate or improve the situation, aimed at controlling “reckless lending,” have problematized the debtor as unaccustomed to the idea of repayment. Rather than being excluded from the mainstream economy, however, debtors are in danger of being wholly incorporated into it—but with the disadvantage of having their finances under “external judicial control,” which enables creditors to exact repayment by making deductions directly from salaries. This essay explores the prevalence of these deductions, which have rendered the recent explosion of so-called “unsecured lending” profitable for South Africa’s big retailers and new microlenders alike. Nonetheless, debtors, and the legal and human rights practitioners who act on their behalf, do not unquestioningly accept such predations: this essay examines the various counter-deductions they have put in place.