Good Debt, Solidarity Networks and the Return of the Gift: The Possibility of an Alternative Financial Practice in the Edges of Debt Capitalism

Contemporary debates on financialization reveal a story of individuals, households or corporations becoming increasingly embedded in the debt economy. In critical finance studies or neoclassical economics literature debt is mostly taken for granted as a univocal concept, this paper argues that there is no singular and homogeneous nomenclature of debt and that the meaning of the concepts of debt has contextually different manifestations. It becomes clear in the formation of distinctions between different ethnic, religious, economic classes, and these various dispositions multiply an ambiguous meaning for a universal definition of debt.

This study discusses how an alternative interest-free debt economy is theoretically and empirically constructed by micro-level reproduction of religious life through personal debts. How can debt be considered a new ground for social solidarity in Islamicate societies, specifically through good debt (qard al-hasan), as part of a Maussian relationship of gift and reciprocity, in contrast to the debt economy of credit within the institutional economic structures and social relations of capitalism?

In Turkey, following the advanced financialization that emerged after the 2001 crisis at the household level, the practices of constructing interest-free debt networks, rooted in Islamic economic imagination and solidarity, have become increasingly widespread. This study primarily focuses such “good debt” communities, which are shaped by groups of 20-30 people whose close relationships are formed through weak ties, as noted by Granovetter, and who lend their regular savings as interest-free, term loans to their friends or relatives in need, in the face of institutionalized economic structures. Then it empirically demonstrates that finance, money and debt as social relations can be rethought through religion and an alternative trust-based financial mechanism to capitalism can be reproduced on micro levels.