Debt bondage

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Debt bondage (or bonded labor) is an arrangement whereby a person is forced to pay off a loan with direct labor in place of currency, over an agreed or obscure period of time. When a debtor is tricked or trapped into working for very little or no pay, or when the value of their work is significantly greater than the original sum of money borrowed, some consider the arrangement to be a form of unfree labour or debt slavery. It is similar to peonage, indenture or the truck system.


Legal definition

Debt bondage is classically defined as a situation when a person provides a loan to another and uses his or her labor or services to repay the debt; when the value of the work, as reasonably assessed, is not applied towards the liquidation of the debt, the situation becomes one of debt bondage. See United Nations 1956 Supplementary Convention on the Abolition of Slavery. This was very common in Ancient Greece. In Athens debt bondage was terminated by Solon .

Historical background to bonded labor

Prior to the early modern age, feudal and serfdom systems were the predominant political and economic systems in Europe.

Historical peonage

Peonage is a system where laborers are bound in servitude until their debts are paid in full. Those bound by such a system are known, in the US, as peons.[citation needed] Employers may extend credit to laborers to buy from employer-owned stores at inflated prices.[original research?] This method is a variation of the truck system (or company store system), in which workers are exploited by agreeing to work for an insufficient[original research?] amount of goods and/or services. In these circumstances, peonage is a form of unfree labor. Such systems have existed in many places at many times throughout history.

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