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Debt bondage

Debt bondage or bonded labor is a means of paying off a family's loans via the labor of family members or heirs.

According to Anti-Slavery International[?], "A person enters debt bondage when their labour is demanded as a means of repayment of a loan, or of money given in advance. Usually, people are tricked or trapped into working for no pay or very little pay (in return for such a loan), in conditions which violate their human rights. Invariably, the value of the work done by a bonded labourer is greater that the original sum of money borrowed or advanced."

Debt bondage "has been defined by the United Nations as a form of modern day slavery" [1] (http://journalism.berkeley.edu/projects/asiaproject/Gupta) and is prohibited by international law. It persists nonetheless especially in developing nations, which have few mechanisms for credit security or bankruptcy, and where fewer people hold formal title to land or possessions. According to some economists, for example de Soto[?], this is a major barrier to development in those countries - entrepreneurs do not dare take risks and cannot get credit because they hold no collateral and may burden families for generations to come.

Despite the UN prohibition, Anti-Slavery International estimates that "between 10 and 20 million people are being subjected to debt bondage today."

News media in western Europe regularly carry reports about one particular kind of debt bondage: women from Eastern Europe who are forced to work in prostitution as a way to pay off the "debt" they acquired when they were illegally brought over the border.

Marxist analysis

According to Marxist economists, debt bondage is characteristic of feudal economies, where families are considered the responsible unit for financial relationships, and where heirs continue to owe parents' debts upon their deaths. Fully capitalist economies are characterized by the individual taking all responsibility, and such mechanisms as bankruptcy and death taxes reducing creditors' rights (while increasing the power of the state). Heirs are freed from the creditor, but at the cost of a drastically increased power accruing to the state itself.

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