There is something that those who lend money have learned over the years. If you physically punish someone who owes you an outstanding loan, you severely restrict their ability to pay it back. This is why certain measures in society were done away with like poorhouses and debtors prisons. (Interestingly the mafia never came to this conclusion and continues to break people’s legs.) Because such measures don’t actually work, alternative means were developed instead. Bankruptcy procedures were created, its also why collection agencies were developed. (I think its important to note that all these measures make people’s lives miserable.)
Lessons leaned in the development of capitalism has taught the capitalist class that there is only so far you can impoverish people. If you press social conditions and wages down low enough the working class cannot consume nor pay back debts. If they can’t consume the capitalist class can’t generate profits through sales. This is what leads to things like “welfare” programs so that working class/poor people could still consume and allow the capitalist mode of consumption to continue.
It seems now with the austerity policies that so many among the ruling class have forgotten about these lessons. Too many of them have been thumping their copy of the Wealth of Nations and have forgotten the lessons learned since then. This attack on the working class seeks to brutalized the population that will eliminate their ability to recover, thus undermine their ability to consume and pay back outstanding debts. This situation is made all the worse now as jobs are shipped overseas eliminating those jobs from being given to workers here to begin the recovery.
The lessons seem to have been lost.