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Pawnonomics

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Pawnonomics

A Tale of The Historical, Cultural, and Economic Significance of the Pawnbroking Industry

BookSurge,

15 min read
10 take-aways
Audio & text

What's inside?

Pawnbrokers assume big risks and still make better loan deals than banks – plus lots more you don’t know about pawning.

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Editorial Rating

7

Qualities

  • Controversial
  • Innovative
  • Background

Recommendation

Throughout history, people have maligned pawnbrokers. The popular image of a pawnbroker is that of a heartless loan shark. According to 30-year pawnbroker and author Steve Krupnik, society has condemned pawnbrokers unfairly for thousands of years, when in fact they provide a vital service, particularly to the poor, as “lenders of last resort.” In his colorful, impassioned – and perhaps not entirely objective – book, Krupnik debunks the criticism leveled at his beloved yet much belittled industry and offers a spirited defense. getAbstract welcomes this iconoclastic, unusual report on an ancient but little-explored facet of economic history and commercial activity, and recommends it to industry insiders, curious outsiders and anyone who might consider pawning an old guitar or Granny’s tea set for a quick, helpful, few-questions-asked infusion of cash.

Summary

The History of “The Second Oldest Profession”

Pawnbroking – the securitization of short-term loans with collateral – has been with humankind since the ancient days of civilization. In Mesopotamia, the Bronze-Age Sumerians (4000 to 1200 B.C.) recorded “collateralized lending transactions” in cuneiform writing on clay tablets. The first written laws, developed by Babylonia’s King Hammurabi (1795 to 1750 B.C.), included information about “loans, interest, pledges and guarantees.” The Bible’s Old Testament states that people routinely submitted collateral for loans.

Early Jewish and Christian clerics warned their constituents against usury. They were not allowed to lend money for interest to their co-religionists. But they were allowed to lend money and charge interest to peoples of other faiths. Throughout its long history, the Catholic Church outlawed usury. However, since this greatly restricted its own affairs, the Church routinely developed loopholes. Church leaders circumvented usury prohibitions by referring to interest on loans as “administrative fees” or by turning to Jewish lenders.

The ancient Romans also used collateral for loans. Sometime between A....

About the Author

Steve Krupnik, a pawnbroker for three decades, is the founder and past president of the Indiana Pawnbrokers Association and a past board member of the National Pawnbrokers Association. He received that organization’s 1999 “Pawnbroker of the Year” award.

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