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Forum Post: Can Debt Spark a Revolution?

Posted 11 years ago on Sept. 16, 2012, 11:16 p.m. EST by PeterKropotkin (1050) from Oakland, CA
This content is user submitted and not an official statement

David Graeber

As a member of the team that came up with the slogan “We Are the 99 Percent,” I can attest that we weren’t thinking of inequality or even simply class but specifically of class power. It’s now clear that the 1 percent are the creditors: those who are able to turn their wealth into political influence and their political influence back into wealth again. The overriding imperative of government policy is to do whatever it takes, using all available tools—fiscal, monetary, political, even military—to keep stock prices from falling. The most powerful empire on earth seems to exist first and foremost to guarantee the stream of wealth flowing into the hands of that tiny proportion of its population who hold financial assets. This allows an ever-increasing amount of wealth to flow back into the system of legalized bribery that American politics has effectively become.

When we were organizing the Wall Street occupation in August of 2011, we really didn’t have any clear idea who, if anyone, would actually show up. But almost immediately we noticed a pattern. The overwhelming majority of Occupiers were, in one way or another, refugees of the American debt system. At first, that meant student debt: the typical complaint was “I worked hard and played by the rules, and now I can’t find a job to pay my student loans—while the financial criminals who trashed the economy got themselves bailed out.”

What was remarkable wasn’t so much the fact that the camp began to fill with so many debt refugees, but how much their plea resonated across the political spectrum. In the 1960s or early ’80s, the plight of a college graduate juggling loans wasn’t the sort of thing most likely to wring the hearts of transit or sanitation workers. But Occupy received warmth and solidarity from organized labor. Something clearly had changed. We had come to see ourselves as members of the same indebted class.

This was possible only because of a number of changes in the very nature of American capitalism. For decades now, we’ve been hearing about the “financialization of capitalism.” But this is always framed as an abstract process, almost akin to magic, whereby Wall Street no longer needs to extract most of its profits from the fruits of commerce or industry because it has figured out a way to produce wealth from sheer speculation. Meanwhile, the financial industry actively discourages us from scrutinizing the actual social relations on which its wealth is based. What happens on Wall Street is supposed to be too complicated and advanced for regular people 
to comprehend.

The rise of OWS allowed us to start seeing the system for what it is: an enormous engine of debt extraction. Debt is how the rich extract wealth from the rest of us, at home and abroad. Internally, it has become a matter of manipulating the country’s legal structure to ensure that more and more people fall deeper and deeper into debt. As I write, roughly three out of four Americans are in some form of debt, and a whopping one in seven is being pursued by debt collectors. There’s no way to know just what percentage of the average household’s income is now directly expropriated by the financial services industry in the form of interest payments, fees and penalties. What statistical information is available suggests it is somewhere between 15 and 20 percent—and, of course, if you factor out the quarter of the population who are either too rich or too poor to owe anything, it becomes considerably more. “Financialization,” then, is not just the manipulation of money. Ultimately, it’s the ability to manipulate state power to extract a portion of other people’s incomes. Wall Street and Washington, in other words, have become one. Financialization, securitization and militarization are all different aspects of the same process. And the endless multiplication, in cities across America, of gleaming bank offices—
spotless stores selling nothing while armed security guards stand by—is just the most immediate and visceral symbol for what we, as a nation, have become.

Most revolutions, revolts and insurrections in world history have revolved, at least to some degree, around debt, from the uprisings that created the Greek democracies to the American Revolution—or pretty much any other anticolonial revolt. We may be standing on the brink of a similar juncture. Yet history shows it’s notoriously difficult to assemble debtors into a coherent movement; indebtedness is isolating by nature, and the very feelings of anxiety and humiliation it sparks have made it a potent ideological tool. But history also reveals that when such movements do form, the results tend to be explosive.

What are the prospects for Occupy if it evolves into an explicit movement of debt resistance? If that happens, the battle will not be won by proposing policy changes. The power of Occupy was always that of delegitimation: an appeal to the profound feeling, shared by so many Americans, that our political class is so corrupted that it’s no longer capable of addressing the problems faced by ordinary citizens, let alone the world. To create a genuinely democratic system could only mean starting over entirely.

The financial system isn’t really any different. The first step is to state the problem clearly: our current economic arrangements can barely even be called “capitalism,” unless it’s some form of Mafia capitalism based on loan-sharking, extortion and fixed casino games. The second is to hammer home just how much the system’s illegitimacy undermines the moral force that debt still holds over so many Americans, thus fostering a gradual withdrawal of consent from the system. Increasing numbers of us are already doing this by refusing to pay our debts, whether out of necessity or by choice.

Even those at the top are increasingly willing to admit in private that the current situation is untenable. Debt cancel-lation of some sort is going to take place (as we’ve already seen with the bailout of the big banks). The real struggle will be over the form it takes—above all, whether it’s a last-ditch attempt to salvage the system of Mafia capitalism or an effort to move us sharply in the direction of something else (perhaps taking a cue from Iceland’s forgiveness of loans held by more than a quarter of its population). A debt jubilee, after all, affords the possibility not just of economic renewal, but of intellectual and spiritual renewal as well. Even imagining such a possibility opens the door to an understanding that debts are simply a kind of promise we make to one another, and that a true democracy is one in which everyone weighs in on the broader questions. What kind of promises do we want to make as a society? Seen in this light, the problem economists like to call “debt overhang” (when debt levels are too high to permit access to credit even for smart investments) is far more profound. The debt we collectively hold obligates us to make promises we cannot keep. We continue to increase the rate of production, the level of exploitation and hence, as an inevitable consequence, the pace of ecological devastation at just the point where even present levels are clearly 
unsustainable—all to pay interest to the creditor class. At this moment, what could be more obviously insane?

This is why organizing a movement of mass resistance is so important. Our leaders have long since demonstrated that they are no longer capable of thinking big. Technocratic tinkering will get us nowhere. Only a social movement can change our moral and political horizons of possibility—and those horizons desperately need to change.

Occupy was right to resist the temptation to issue concrete demands. But if I were to frame a demand today, it would be for as broad a cancellation of debt as possible, followed by a mass reduction of working hours—say to a five-hour workday or a guaranteed five-month vacation. If such a suggestion seems outrageous, even inconceivable, it’s just a measure of the degree to which our horizons have shrunk. After all, only fifty years ago many people assumed we would have gotten to such a point by now. It is only by breaking the power of the engines of extraction that we can once again begin to think on a scale and grandeur appropriate to the times.




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[-] 2 points by beautifulworld (23744) 11 years ago

IF our government governed for the benefit of the people a debt jubilee would be considered.

[-] 1 points by DebtNEUTRALITYpetition (647) 11 years ago

If you want to fight back against the bankers and wall street, then focus on this one thing first and foremost.

Any Debt Restructure first requires a default.

Unless of course one is a wall street banker who engages in strange investment schemes, they get free do overs courtesy of our government.

Change debt restructuring first requires a default to, Debt Restructure DOES NOT require a default, and you bring power back to the people.

[-] 1 points by DebtNEUTRALITYpetition (647) 11 years ago

Yes, consumer debt is the number one issue. However, every time someone is foreclosed upon, or is unjustly screwed over by a heartless, lobbyist manipulated system, somebody else benefits.

[-] 1 points by TheRoot (305) from New York, NY 11 years ago

Excellent Post!

[-] 1 points by Wallgeist (8) from East Orange, NJ 11 years ago

Money is debt by definition. So the problem isn't debt. It is the wrong Gini coefficient for an advanced society.

[-] 2 points by geo (2638) from Concord, NC 11 years ago

money is potential, not debt. currency is just an exchange unit. fractional reserve banking is debt creation. bank products are debt instruments, like credit cards and loans.

the problem most certainly is debt vs savings. debt enriches others, savings enriches the private citizen.

[-] 0 points by TheRoot (305) from New York, NY 11 years ago

Hear, hear. The 1% and their system have destroyed incentives to save. In the old days, savings was capital. People scrupulously guarded and invested both because no one was there to bail them out if they made decisions that ran counter to the demands of the sovereign consumer. The 1% create capital out of debt and their debt out of nothing. Along the way, they have made morons out of debtors (me included). Easy credit created the housing bubble which destroyed millions of acres of land in the US that would have been saved but for their system. But millions of the moronic bought into their scheme (me included). Save the planet and save the economy by destroying their system. Debt is not money. But we have been living in their system so long that we simply believe that it is.

Many are refusing their Kool Aid to ask what is money. The history of money is complete with the answers illustrating good choices and bad. We are blasting their chains that shackle us. Maybe, it's time to brush off the history books to study money because when we blow up their machinery, we're gonna need to put something real and workable in its place.

[-] 1 points by TheRoot (305) from New York, NY 11 years ago

Wallgeist: Money is debt by definition of the 1%. Look at the history of money, if you would. You'll see that it took the 1% a long, long time to corrupt it.

[-] 1 points by throaway (57) 11 years ago

Yes...If I don't get my money back I am going to get REAL Revolutionary!

[-] 1 points by JustinDM (251) from Atascadero, CA 11 years ago

great article, thanks for the post :)

[-] 0 points by TheRoot (305) from New York, NY 11 years ago

My Great Grandfather would roll in his grave if he thought that I was advocating debt cancellation. He believed that if you incur debt then you work to pay it off. But if he knew the extent of creditors' robbery on a WW scale, he'd be first to lead the charge against creditors. I am all for rallying for these- (1) We're staying in the houses you're phony credit gave us the wherewithal to buy and we're not paying a dime more for them. (2) We're keeping the educations that your phony credit gave us the wherewithal to buy and we're not paying a dime more for them either. And (3) we're keeping everything else too as our just measure for your repeated attempts to make us into your indentured servants. Your scheme may have worked for forty years (or 5000) but the jig is up and we are the fiddler that you'll have to pay.

[-] 1 points by MattLHolck (16833) from San Diego, CA 11 years ago

the creditors get money for nothing

[-] 1 points by TheRoot (305) from New York, NY 11 years ago

yep. and their "chicks for free". I am with you.

[-] -1 points by Orwellwuzright (-84) from Lockeford, CA 11 years ago