Gift exchange and control of consumer credit in Russian Orthodox communities

Abstract

. This paper discusses factors how morally dense communities regulate the consumer debt of their members by enacting both financial and non-financial mechanisms. We rely on the gift exchange theory to demonstrate how communities with high social density morally regulate consumer behavior of their members. We use the data gathered during an empirical study of economic activities of the members of Orthodox parishes in four Russian cities and suggest the four-stage model of the influence of community on the motivation and behavior of potential borrowers. The four elements, in the order of importance, are regulation of wants, non-financial mechanisms of satisfaction of wants, gratuitous financial aid, and distributed solidary responsibility for consumer credit. In contrast to atomized individuals who act upon the moral principles of preserving independence and relying only on themselves, members of parishes are governed by different moral imperatives: they are encouraged to ask for help and to suggest it to others. This paper demonstrates that communities can operate as agents of natural social control over consumer credit by both inducing deliberation on financial decisions and distributing the risks associated with consumer borrowing.