That is a good question.  Most people don’t think of debt in terms of slavery, but in some circumstances, that is exactly what it is.

What is Slavery?

According to Wikipedia, slavery is a form of forced labor in which people are considered to be, or treated as, the property of others.  The “forced” part is important, because if you enter into an arrangement contractually and voluntarily, it is not slavery.  In certain forms, debt is slavery.

When You Borrow, The Lender Owns a Portion of the Borrower

If you borrow money, the person that lends it to you owns that much of your time.  Let’s see how this works.

Case 1: Bill Borrows $100 from Bob

Bill freely borrows $100 from Bob and agrees to pay him back.  Let’s say that Bill earns $10/hr.  This means that Bob now “owns” 10 hours of Bill’s time, because Bill must work for 10 hours to pay Bob back.  Is this slavery?  No, because it is an arrangement voluntarily agreed.

In other posts we’ll look at other forms of debt.