Debt as power | openDemocracy

A debtors' strike is about using the power that debt gives to people to demand concessions.

There are, however, obvious difficulties. To begin with, the stigma that debt holds must be overcome. The idea of refusing to repay a loan seems offensive. If you sign a contract, it's your moral - not to mention legal - duty to pay it back. However, this misses the fact that debt is a political, and not a personal, issue.

Climbing private indebtedness is the outcome of a deliberate strategy on the part of banks and a wilful impotence on the part of government. Banks developed, sold, and lobbied against the regulation of corrosive debt instruments. They cannot, then, demand that the rest of the population bleed so they can maintain their practises. When the creditor-debtor relation is seen properly, as a socio-economic arrangement, negotiation becomes a fact, as well as an economic necessity.

The next problem is building a movement big enough. A one-man debt strike is as useless as a one-man labour strike, but the quest for a mass debt strike may actually be more plausible. Britain's service economy has fragmented the workforce as powerfully as the manufacturing economy once harnessed it; it's only across public sector unions where there is any coherence. Debtors, however, are much more concentrated. Personal finance is dominated by the five big high-street banks, and student loans even belong to a single company.

The most significant issue, though, is that in the era of securitised finance, the debts of one bank are the assets of another. Because of that, forcing a debt write-down could well throw a pension fund into trouble. Yet that need not be a bad thing. It would shine a torch on the murky behaviour of institutional investors who serve themselves far more effectively than they do their savers. It would also force governments into a position where they have to bail people out before banks. Successive governments have used Quantitative Easing to gift cash to the banks; the same strategy could be used for restoring people's pensions instead. 

via www.opendemocracy.net

Comments

[Alain]

I really like this idea. But I think it strategically misses something that capital has to yield as a weapon in response: Austerity. On the left, Debt and Austerity need to be explicitly linked as working together. And perhaps if default is a weapon for the masses austerity is the weapon of choice for the elite. Thus all the discussion of a "grand bargain" - enormous cuts to entitlements must be made in order to justify small increases in taxes for the wealthy. I think it is essentail that the left make this explicit - austerity and debt is being used to bludgeon us into submission.

[Alain]

I apologize - the word "yield" in the previous comment should read "wield."

[Swillsqueal]

Debt?

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 in DEBT, THE FIRST FIVE THOUSAND YEARS 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.

When a united left begins shouting for common ownership of the collective product of labour, we will see the event horizon of the social revolution. Until then, it reformist patchworks will erupt from the class struggle.