Student Debt and The Spirit of Indenture

When we think of the founding of the early colonies, we usually think of the journey to freedom, in particular of the Puritans fleeing religious persecution to settle the Massachusetts Bay Colony. But it was not so for a majority of the first Europeans who emigrated to these shores. “Between one-half and two-thirds of all white immigrants to the British colonies arrived under indenture,” according to the economic historian David W. Galenson, a total of three hundred thousand to four hundred thousand people. Indenture was not an isolated practice but a dominant aspect of labor and life in early America.

Rather than Plymouth, Jamestown was a more typical example of colonial settlement, founded in 1607 as a mercantile venture under the auspices of the Virginia Company, a prototype of “joint-stock” corporations and venture capitalism. The first colonists fared badly because, coming primarily from gentry, they had little practical skill at farming and were ravaged by starvation and disease. In 1620, the Virginia Company shifted to a policy of indentured servitude to draw labor fit to work the tobacco colonies. Indenture had been a common practice in England, but its terms were relatively short, typically a year, and closely regulated by law. The innovation of the Virginia Company was to extend the practice of indenture to America, but at a much higher obligation, of four to seven years, because of the added cost of transit, and also because of the added cost of the brokerage system that arose around it. In England, contracts of indenture were directly between the landowner and servant, whereas now merchants or brokers in England’s ports signed prospective workers, then sold the contracts to shippers or to colonial landowners upon the servants’ arrival in America, who in turn could re-sell the contracts.

By about 1660, planters “increasingly found African slaves a less expensive source of labor,” as Galenson puts it. An economically minded historian like Galenson argues that the system of indenture was rational, free, and fair—one had a free choice to enter into the arrangement, some of those indentured eventually prospered, and it was only rational that the terms be high because of the cost of transit—but most other historians, from Edmund S. Morgan to Marcus Rediker, agree that indentured servitude was an exploitive system of labor, in many instances a form of bondage akin to slavery. For the bound, it meant long hours of hard work, oftentimes abuse, terms sometimes extended by fiat of the landowner, little regulation or legal recourse for laborers, and the onerous physical circumstances of the new world, in which two-thirds died before fulfilling their terms.

College student-loan debt has revived the spirit of indenture for a sizable proportion of contemporary Americans. It is not a minor threshold that young people entering adult society and work, or those returning to college seeking enhanced credentials...