The debt obsession
As I was electronically discussing my comments on the Rolling Jubilee yesterday, I got an email from Fix The Debt, the deficit-obsessed austerian group founded by Erskine Bowles and Alan Simpson. Bowles and Simpson are, of course, the deficit scolds who led the failed commission created by Barack Obama in 2010 whose mission was to lead the U.S. back to the path of fiscal rectitude.
And though the StrikeDebt! people have little in common with that gang of ghouls who want to cut Social Security and Medicare, they do share one feature: an obsession with debt. (I want to say again that I like and admire the people who conceived this project, and I offer these criticisms in a comradely, not hostile, spirit.) Instead of talking about the challenge of recovering from the after-effects of the Great Recession, of thinking how to provide people at all stages of their lives with material comfort and security, of how to humanize our mad systems of health care and education finance, of how to deal with climate change, both parties focus on debt as central to everything.
There’s an old saying in the public opinion business: we can’t tell people what to think, but we can tell them what to think about. The orthodox are constantly telling us to think about debt. But aren’t radicals supposed to challenge that discursive tyranny?
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Nice start, Doug, but dig a bit deeper. StrikeDebt is not debt-obsessed, but solutions centered. Consider it a form of “Barnraising” where people chip in time, money and labor to help out an unfortunate neighbor. And, you are correct, this is work worth admiring. My own take on it: http://www.huffingtonpost.com/jerry-ashton/strange-bedfellows-occupy_1_b_2122400.html
well ..i read yerstoday your blog about THE ROLLING JUBILEE. i did not make a coment because i feeled ..”ok this is the normal way to every one to say something”
we are ”MARTIRES” in this world for good and bad happening ..i don’t say this is absolutly right but is not good to the GV (not for just USA) BUT EVERYWERE the people who you give this trust to use for privilege in life ..
for my personal opinion ..this sinithia can change ..ofcours if they wanted ..
every were i her one story .my son have this health problem .my mom this and non finish ..
for every state needed health system care ..to be free (and this is responsibility to gv) to have in plan and project plan budget for health care
for education too . others nomiclatura is second hand .example for administrative to have so much privilege ..IS NOT RIGHT
who is poor is not him/her choice ..but needed to takecare tham to be les poor ..and this is GV responsibility
i don’t charge all the gv for waht happening BUT i charge the system we creat to happening this big big despropotion ..
we don’t leave in feudalisme ..the sclave have to be sclave because they needed NO we are in world with very highe education totaly and the people have change for good (progress ) because the technology help tham BUT …sorry IF you make one muchine to help your self for better cundination and profit too this profit don’t use for your self 99% and 1 % for me ..this is not right ..
the world have change THIS IS FACT NOT NEWS..
AH..1 rich man or women or company make philanthropy .
but this philanthropy doesn’t have limit? every day new
this is seriuse problem for the political world everywere ,…THEY HAVE TO FIND SOLUTION ..
THANK YOU
Sure, but it’s not just the conversation about debt that’s crippling people’s recovery (moralized debt, the burden of shame and all that). The actual debt itself is a pretty big deal! I’m not sure how your question here amounts to more than concern-trolling—basically saying, “Sure guys, this is a great idea, but I’m worried that we should be talking about something else too!”
Why frame it as an either/or? Encourage Strike Debt and the Jubileers to dismiss actual debt AND try to reframe political/economic conversations!
I’m going to repost something I wrote as a Facebook comment in response to a friend with a workplace organizing background who is critical of the Occupy focus on debt:
“I see debt as a tool of workplace control. Bosses demand more and more (expensive) education for even low-paying jobs–I don’t think it is lost on them that this means they will have employees who are more indebted and who have fewer options.
Debt and workplace control have always been deeply intertwined. Think of the days when company towns made sure workers stayed in debt to their employers for rent and food, or the “job sharks” who extracted money (or the promises of money) from unemployed workers using false promises of good jobs, knowing that once the workers were indebted they’d have no choice but to take whatever job was available.
It may be rarer today that the worker’s debt is owed directly to the employer, but that doesn’t mean that that indebtedness is less effective as a means of enforcing workplace discipline. In fact, you could argue that the situation we have today is even better for the employer: because the employees’ debts are seen as private, individual problems, they are not seen as a valid target for workers’ collective action.
I dropped out and didn’t go to college so I am not directly affected by student debt–but I’m absolutely affected by being part of a generation that is entering the workplace with unprecedented levels of indebtedness, because that indebtedness determines the kind of workplaces that we are going to face and the kind of organizing that can happen in them. So I think debt is not a bad thing for Occupy types to organize around, although it shouldn’t be anyone’s exclusive focus.”
I’m going to repost something I wrote as a Facebook comment in response to a friend with a workplace organizing background who is critical of the Occupy focus on debt:
“I see debt as a tool of workplace control. Bosses demand more and more (expensive) education for even low-paying jobs–I don’t think it is lost on them that this means they will have employees who are more indebted and who have fewer options.
Debt and workplace control have always been deeply intertwined. Think of the days when company towns made sure workers stayed in debt to their employers for rent and food, or the “job sharks” who extracted money (or the promises of money) from unemployed workers using false promises of good jobs, knowing that once the workers were indebted they’d have no choice but to take whatever job was available.
It may be rarer today that the worker’s debt is owed directly to the employer, but that doesn’t mean that that indebtedness is less effective as a means of enforcing workplace discipline. In fact, you could argue that the situation we have today is even better for the employer: because the employees’ debts are seen as private, individual problems, they are not seen as a valid target for workers’ collective action.
I dropped out and didn’t go to college so I am not directly affected by student debt–but I’m absolutely affected by being part of a generation that is entering the workplace with unprecedented levels of indebtedness, because that indebtedness determines the kind of workplaces that we are going to face and the kind of organizing that can happen in them. So I think debt is not a bad thing for Occupy types to organize around, although it shouldn’t be anyone’s exclusive focus.”
We could all read Graeber’s Debt (again?) and remember how central it has been to our way of conducting our political and social lives. I take it buying up and canceling debts is meant to remind us of the buying and freeing of slaves, one by one, before the Civil War, and I fear it will be about as effective. But someone has to do something. Too many people owe their soul to the company store.
All depositors’ money held by banks is a debt the bank owes to its depositors. Bank failure is the inability to repay its debt to its depositors.
Banks issue loans which become its asset and provide its revenue stream. The inability of debtors to repay bank issued loans results in an inadequate revenue stream from which banks repay their debt to their depositors.
Endogenous money is debt, and so the name “debt system” is appropriate.
Exogenous money created from nothing but the legal authority of the issuing government need not be debt, and is the source of the fraudulent fiscal cliff and calls for austerity.
The failure of bank’s endogenous debt money, the failure of banks to recognize as valid each others alleged financial solvency, left only the exogenous government money, in the amount of 16 trillion, to restore mutual trust.
Please interview Michael Hudson, or Steve Keen, or Stephanie Kelton for a perspective on debt beyond the Krugman model.
Harry Shearer (Le Show) interviews Stephanie Kelton here:
http://www.kcrw.com/etc/programs/ls/ls121028le_show_-_october_28
I interviewed Steve Keen. I am not super-impressed by all that MMT stuff, I must say.
Money derives its value from what it can purchase. The fear of “debt” money reminds me of the gold fetish.
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Debt? Graeber?
Sure. But what is debt, if not the promise to pay in wealth and where does wealth come from?
For Marx there are only two sources of wealth, labour and nature.
Debt is expanded beyond economic transactions to include sin and other moral questions and while these are cogent observations, Graeber’s emphasis on them turns our attention away from what is being asked of those who are indebted. And what is that but their labour time and giving up their free time in some way shape or form up to and including becoming chattel slaves to those to whom they owed their debts. Labour time is the source of exchange-value which is wrapped up in the social relations between those in debt and those to whom debts are owed. And this is precisely what Graeber misses and or dismisses when it comes to his analysis of debt and his continual mystifications regarding money. For Graeber, money is not based on embodied labour time but on the trust people have in the authorities. Sure, there is trust; but as the old folk wisdom goes, “Where’s the beef?” Graeber’s rulers seem to just decree what the value of money is as opposed to money being a universal equivalent used to trade objects with exchangeable labour time embodied in them.
So, what is value? What is price? What is profit? Graeber continually mixes up exchange-value with a sense of debt which is based on being beholden to another person in some honourable way. I see the connection; but I find his anecdotes confusing the issue. Exchange-value is based on socially necessary labour time (snlt). Humans perceive their own labour time thusly, their own life expenditure in the exchange of commodities. This social perception is born of haggling around price until a sense of ‘this is right’ is established. But why is it, ‘right’? It’s the perception of life’s labour time in the object or service which is based on the material reality of socially necessary labour time embodied therein.
I see Graeber’s book as a sort of prolegomenon to a much wider discussion, rather than a scripture full of answers, which it clearly is not.
Use value is something that exists in someone or something’s mind. Exchange value is something that arises in a market. I don’t see how either of these rather fluid qualities can be embodied in, become part of, a material object. Rather, it seems they are external to objects and are attributed to them by evaluators, often perhaps in an arbitrary manner. The purest case of this attribution would be those forms of money which have no inherent use or exchange value apart from the relations imposed on them by their users, or by their authorities. To parody chairman Mao, the value of money grows out of the barrel of a gun.
I think the embedding of labor time in money would be a very desirable and very different substitute for what we have now.
When the government demands money in payment for taxes, and the grocer demands money in payment for food, the duress of obtaining sufficient quantities of money maintains its primacy and no question arises as to what the required money is backed by.
Money (along with the enclosure of the commons) is the great workforce organizer: get money and pay taxes or starve and lose your home. Taxes are debts owed to the government that commands one to either pay it or face severe consequences.
The personal experience of money is dependent upon the quantity of it you own. The quality of capital varies with its quantity, says Marx. This holds for money capital, as well as money itself.
Debt is a major problem for a millions of people with mortgages, health problems, student loans, etc. Because the two business parties recognize and use debt propaganda to great effect does not mean it can or should be ignored.
Stud Terkel, when being red-baited, asked if he should be against curing cancer if the Communist party is for curing it. The problems presented by debt and cancer will not disappear by declaring these issues off limits for discussion while distorted, manipulative arguments that confuse the issue are presented by owners of debt instruments in the interest of maintaining the present state of affairs.
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Doug — I wonder what you would make of a new book from Italian-French Marxist Maurizio Lazzarato: http://www.amazon.com/dp/1584351152/ref=rdr_ext_tmb
Although he may fall into the debt obsessive school, the argument is a lot more worked through and put in the context of a history of ideas. For instance, he talks about the productive role of finance in the economy, both historically and today. That doesn’t mean he overlooks its corrosive effects, but he does acknowledge that role, citing both Marx and Lenin on this.
Hi Doug,
What about the idea of creating a fund, and instead of using it to buy off debt for pennies on the dollar, using it as a source of credit for poor people who have declared bankruptcy?
Doug, this is getting genuinely embarrassing. Over and over again you say that I have a “transhistorical view of debt.” Over and over I point out that actually, the book argues that while there are certain constants, the actual meaning of money and therefore debt change profoundly from period to period – such that debt in what I call “social currencies” is utterly different than it is with commercial currencies, and the meaning of debt when there are commercial currencies has constantly shifted. Much of the book is precisely concerned with how the meaning of money and debt changes from period to period. Instead of replying to this, you simply go on asserting that I have a timeless view of debt anyway.
Similarly, over and over you say I don’t recognize that money and debt are different under capitalism because of the role of wage labor. Over and over I reply I point out that I do say that money and debt are profoundly different, but that these changes – the emergence of public/private central banking systems recycling war debt as the credit money used to fuel capitalist enterprises, stock markets, bonds, etc, etc, emerged before the dominance of wage labor and did not change when wage labor did emerge as the major form of productive relations. I challenge you to account for this. Your response? You simply ignore me, refuse to engage with my actual points, and once again say that I don’t understand that money and credit are different under capitalism but you don’t feel you have to specify how.
I really thought you were smarter and had more intellectual integrity than is revealed by this behavior.
One last time, Doug, I challenge you: instead of simply asserting that my supposed misunderstanding of the way credit and debt function under capitalism *somehow* takes my supposed followers down the wrong political track, tell me, for once, what is it I am missing about capitalist money forms, and EXACTLY HOW does this mistake lead to false political conclusions? You have never been able to explain this. You have never even attempted to explain it. You just assert it over and over again with zero evidence, apparently because you figure there’s a cadre of people out there who are just going to assume it must somehow be true, and you don’t need to actually make a case why it should be.
oops, garbled sentence:
“Over and over I reply I point out that I do say that money and debt are profoundly different….”
should read
“Over and over in reply I point out that I do say that money and debt are profoundly different under capitalism…”