PAWNONOMICS

A book that opens the door to an industry particularly relevant to these difficult economic times–pawnbroking.

Krupnik weaves history and current events throughout this intriguing book on the pawn industry. From time to time, we might need some extra cash, and a loan from the local pawn shop is the only legitimate option. In placing our valuables in the hands of a pawnbroker as collateral, we show our intent to repay the loan. If we cannot do so, these items are sold to repay the loan. This form of usury, according to the author, has an extensive history that traces to the Bronze Age, with references even in the Bible. Despite such long traditions, pawn shops have become maligned for charging excessive interest rates and profiting from the poor. Krupnik argues that this perception is unfair. The borrowing terms are clearly outlined, and in some cases, traditional forms of usury–such as loans from banks or other financial institutions–charge more onerous rates and fees. He sometimes oversells this notion. It’s true that some credit-card companies overcharge their customers, yet the comparison of borrowing from a pawn broker to repaying a home mortgage is unrealistic–the overall scale makes it merely an attention-grabbing academic exercise. There are significant differences between these two markets. In addition, the author plays off the current populist attitude toward financial companies to make his case. In light of recent government bailouts and the corresponding public reaction this makes sense. Still, it’s unfair to malign all lenders because of the exploits of a greedy few, even accounting for the worldwide financial collapse. Still, Krupnik does an excellent job of detailing the inner workings of a pawn shop, and no one could fault him for championing their cause.

A fascinating, easy-to-read tale told with detail and passion.