What Is Debt Peonage?

by Devra Gartenstein - Updated June 29, 2018
Court Gavel With Money

Slavery takes a variety of forms, including debt peonage, or forced labor as a consequence of money owed. Some forms of debt peonage, such as the sharecropping that became an institution in the American South after the Civil War, are relatively easy to identify. Other forms of debt peonage are more subtle and difficult to define. For example, debilitating credit card debt can force people into demeaning work situations that offer little hope of repaying the sums owed. Historical perspective on debt peonage sheds light on how contemporary situations are similar to this outlawed practice, and how they differ.

Some Historical Examples of Debt Peonage

Although nobody knows precisely how and where debt peonage began, it has clearly been around since at least classical times. The Greek lawmaker Solon instituted anti-slavery reforms, some of which targeted practices related to forced labor and debt. It was practiced in Rome, as well. Debtors, or 'Nexus', retained citizenship rights but still had to work for no pay. More recently in New Mexico, debt peonage became a social and economic institution while the area was still part of Spain and the practice continued after the area became part of the United States, causing some observers to compare it to the slavery of the American South. After the Civil War, many freed slaves became sharecroppers due to lack of economic opportunity. The sharecropping system relied on a system of debts to landowners that were nearly impossible to repay, requiring ongoing labor to maintain.

Outlawing Debt Peonage

Congress passed the Peonage Abolition Act of 1867, aimed specifically at ending the long entrenched practice of debt peonage in New Mexico. The legislation followed on the heels of the Civil War, and was sparked by obvious comparisons between the work conditions in the Southwest and the practices that had just been abolished through the Thirteenth Amendment, which outlawed slavery or peonage.

Video of the Day

Brought to you by Techwalla
Brought to you by Techwalla

Debt Peonage Today

Although debt peonage has been outlawed in the United States and is commonly thought of as an archaic and barbaric practice, it still exists in some forms today. The legal system slaps fees onto defendants facing criminal charges. Penalties for failure to pay can include community service, a form of unpaid labor, and prison sentences which often include work requirements where prisoners are contracted out to private for-profit companies. Some industries, such as poultry processing, rely disproportionately on immigrant labor and practice a modern form of debt peonage. Undocumented immigrants face the threat of deportation, making them vulnerable to unfair labor conditions and below market wages. Like the recently freed slaves after the Civil War, their precarious status forces them to work at unfair rates.

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.

Cite this Article A tool to create a citation to reference this article Cite this Article