Category Archives: debt

Space, Observation and Strike Debt

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In the past weeks since the Debt Assemblies began and led to the formation of the Strike Debt campaign, my relationship to this writing project and to OWS has begun to shift. For a long time, I wrote from the participant observer position. I was there, in the room, often in the square or on the march. But I was not taking decisions or influencing people very much, although I might make the odd comment here and there. Honestly, Occupy and direct democracy were quite a steep learning curve for an academic.

It’s also a somewhat comfortable position, of course, allowing the writer to perhaps imply criticism, although I have always tried to do the harder thing of trying to look for the optimistic or hopeful outcome. Over the past few months since I’ve begun working more closely with Occupy Theory and now Strike Debt, that safety barrier is gone. I find myself questioning whether I have the right to report certain discussions or issues, Or better put, whether I should, not from the point of view of this writing but from the point of view of the movement.

It’s not that I’m party to any secret decisions or that I’m in any way, shape or form a “leader” because there really are no leaders. It’s that I’m not sure exactly what my role is now. Some other writers I know call this “observant participation.” Key here is the acknowledgement that you are writing about the movement as you are also active in it. Unlike most of these people, I’m writing about things as they happen, more or less, rather than for a dissertation, article or book project. It’s not a moral question, although I do respect security culture within the movement and I don’t name people who have not made their writing public. It’s a writerly question: what’s my perspective on this now?

Two other developments impinge on this repositioning. One is that there are fewer people active on a day-to-day basis in OWS now than there were at May Day. A good deal of this is the summer diaspora from New York, and with the climate-changed 97 degrees it was today, no wonder. There are students back home or doing research travel and activists. Others have dropped out, burned out or moved on. So it’s easier to get a sense of the movement than it was when it seemed to be limitless. Perhaps that’s also a coming-to-terms with the sheer difficulty of actually changing this deeply entrenched system.

Finally, it’s the debt campaign itself, which is a re-orienting of my own position. We are all “in” debt, or I certainly am. Mortgage, credit cards, refinanced mortgage. It’s a place of some shame and embarrassment: isn’t a middle-aged, more or less successful person (in their field) supposed to be past all that? Maybe, but I’m not, given a commuting work situation that requires two households in one of the world’s most expensive regions. I assumed getting “out” of debt was a combination of personal discipline and professional success, a Houdini-like escape trick that has eluded me so far.

Now I can see that getting “out” of debt requires getting into public space. It means striking debt so that if a corporation is a person and must be bailed out, guess what, I’m a person as well. It’s realizing that if there are 5 million households still under threat of foreclosure, 27% of student debtors behind or in default, and $800 billion of revolving credit card debt, there’s a massive debt strike already taking place. We just haven’t dared to admit it. You are not a loan.

Mafia Capitalism

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During the course of some back-and-forth discussions over the past two days about the OWS messaging in relation to debt, David Graeber coined the phrase “mafia capitalism” to express the palpable element of violent coercion at the heart of financial globalization. The latter phrase sounds technical, even clean. The reality, as we see around the empire, is that the debt machine has responded to mild setbacks with a dramatic escalation of force.

In Empire, Hardt and Negri reminded us that what Marx had called “primitive accumulation” was always part of capitalism’s process. This violent disruption separated the producer and the means of production, while also accumulating basic raw materials from colonies. There is, then, a

relationship between wealth and command and between inside and outside.

That is, in the case of England, the wealth came from outside (from the empire) and the command arose internally. This process was reversed outside Europe, so that wealth was created internally and command came from the outside.

In 2000, it seemed that this model was giving way to one of immaterial production. Today we might suggest that the new form is rather one where the command is internal in order to preside over a forcible transfer of what internal wealth there is to those in command. The form of that transfer is legalized violence and the end of state concern for the welfare of its population. In short, if this trend continues, we are no longer in the period of governmentality in which the management of population was the prime concern of government, so much as in a moment of internal colonization.

The debt crisis of the 1990s was a sovereign debt crisis in which Heavily Indebted Poor Countries (as the IMF rhetoric has it) [HIPCs] were compelled to borrow in order to repay their existing loans. Today, Heavily Indebted People are being forced to borrow more and more to survive. Or not. And the difference now is that, like the Mafia, authority no longer cares what happens to you, it just wants you to pay. Or else.

In the US, the Supreme Court, having presided over an electoral coup in 2000, has now become the legislative branch. It has enabled corporations to legally buy elections in the manner of mobsters of old. Yesterday, it authorized police to become immigration officers on the basis of mere suspicion. And tomorrow it will overturn a Republican-inspired health care plan because any concession from corporations to employees is now seen as being not just unnecessary, but illegal. The radical right don’t need to win elections: it can just rely on the Court. There is no solution for this dilemma  in the present constitution, whereby the Court invalidates laws it doesn’t like, and then legislates things that it does. Here, the force of law, backed by the simple violence of its enforcers, has become whatever the Heads of the Five Families (aka the 5-4 conservative majority) says that it is.

In the UK, where the Conservative government (technically a coalition with the Liberal Democrats) has been shown to be the creature of Rupert Murdoch, it has responded not by toning down but ramping up its attacks on the welfare system. Prime Minister David Cameron proposes ending housing benefit for young people and limiting child benefit to three children. These are deliberately nasty policies, aimed at pleasing the older (and racist) voter, who believes that hordes of (non-white) benefit “scroungers” are getting away with something, just as the tabloids have claimed for years. With not inconsiderable audacity, the Old Etonians that lead the government have denounced a “culture of entitlement” in those qualifying for benefits, just after they cut taxes for the rich.

Finally, it is worth noting that Israel, so often the paradigm-shaper for its purported dominant partners, has also turned its tactics on its internal population, cutting and privatizing services, reinforced with a police force well trained in violence.

There might be a certain schadenfreude for Palestinians and their allies in watching (presumably) Jewish Israelis complaining about police violence. This is an old lesson: colonial authority will always use the force it develops in the colony, or occupied territory, at “home.”

Just as it has done since the 1970s, neo-liberalism responds to a crisis by intensifying its operations, as Gilles Deleuze would have put it. Indeed, the Israeli Defence Force now read Deleuze as a tactical guide to defeating Palestinian resistance. This resort to force is, then, not in fact a sign of strength but of the continued inability of capitalism to match its rhetoric of wealth creation with the reality of internal wealth transfer. Welcome to mafia capitalism.

Given Time: Debt and the Impossible

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“Let us begin by the impossible.”

A fourth Strike Debt Assembly today in New York found itself in a problem that it defined as organizational: what to do next? Or first? Or in what order? If you were there you would have heard people say many things related to time, such as “Time is of the essence.” Or, “We have no time.” There was a sense of repetition, we’ve been here before. It was experienced as frustration. I would suggest that it is, as befits an Occupy Theory project.  more of a theoretical problem.

Any economy is a distribution and a sharing of what there is, according to the law (nomos) within a household (oikos). In Roman law, the holder of authority is the auctor, precisely the person that decides this distribution. By definition, that person was a patriarch, the male head of the household, whose word controlled animals, slaves, women and children.

There is a certain frustration, then, in giving time to a leaderless association like Occupy that refuses authority and does so in part by refusing to meet inside (oikos) and by challenging the distribution of what there is to be seen and said. This is, then, a gift that cannot make itself present. Or a present, even.

And in the matter of debt, what is taken is also time. Debt is measured in time: a 30-year repayment perhaps, a monthly minimum, a daily calculation of interest. It is circular and it is  without end. In my own case, I have come to realize that the debts that I have will be resolved by my own death, the end of my given time. An uninsured chef suffering from leukemia, cited in a Times Op-Ed today, hoped for his own death so as to spare his family debilitating posthumous debt.

So we are faced with an impossible equation: we give time to something that cannot accept it in order to reclaim some of our given time. These are, then, the reasons for the impossible demands of Strike Debt. Debt has to be abolished, not forgiven. For if it is “forgiven,” an obligation remains on those so forgiven to live up to forgiveness. We see intense resistance to such apparently unearned gifts that were part of the formation of the so-called Tea Party, when a white guy from Chicago railed against people of color getting mortgage support. So there is now an automatic mediatization of radical right demands that no time be given to anyone who has not “earned” it.

Yesterday in Bed-Stuy we talked about abolition in terms of the abolition of slavery: how slavery appeared to be essential to the economy right up until the moment of its abolition; how Reconstruction reimagined the place of the public in ways that we still have not lived uo to 150 years later; and how Stop-and-Frisk continues to inscribe certain people as inherently criminal and part of the economy only on sufferance. We reminded each other that, just as enslavement was social death, so too is debt that treats lives as disposable but banks as eternal.

Today I am reminded of the means of “forgiveness” inherent to slavery. When a slaveowner died, he would sometimes free those of the enslaved he liked or had fathered. These emancipated folk had to carry papers at all times to prove that they had been freed, papers that were not always given credit. You do not make demands on systems like this, systems that discount people from their status as people to being chattel or criminal.

You recognize that impossible demands require a given time: a breaking, a fracturing of the normal course of time. It comes when you least expect it, as it did in Tunisia. Or it comes when those who are subsumed into the impossible category of chattel, debtor, criminal, strike that concept and step into a place in which they are not supposed to be. So the enslaved moved themselves from the slave states to the Union and became not free but “contraband,” or stolen property. They had, impossibly, stolen themselves. Impossibly, they had abolished enslavement.

 

Strike Debt: an emerging consensus

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For a long time, Occupy was a combination of radical affect, method and principle. It did not have a central subject. Readers will have noticed that debt has increasingly become a key theme in this project. And now it’s perhaps becoming the theme in OWS as well. A growing consensus is emerging that the next major day of action will be orchestrated around debt. This will be Black Monday, or September 17, Occupy Wall Street Year One.

In a sense, this is overdue. After all, OWS’s own David Graeber is the author the global best-seller Debt. But just as the 2011 protest lagged behind the worst of the bailouts, it’s only now that the full extent of the debt crisis is becoming apparent.

There are three main factors at work here. One is the exemplary resistance in Montreal to the privatization of higher education and the refusal of endebted futures. Here is a direct challenge to the idea that morality means debt. Quebecois consider that they have already paid for education via direct and indirect taxation, one. And, two, they see a moral society as one that educates its citizens as a public good.

“I fought nazism. I fought fascism. I detested Duplessis. I didn’t make it to 94 for this. NO to law 78.”

Next, and perhaps resulting from this rigor, is the new refusal of student debt that I’m seeing. I’ve met several graduates who are talking about going directly into default from graduation, confronted with apparently long-term unemployment. Many others have moved home with family to a very different future than the one they envisaged when matriculating.

Finally, the macro-economic picture continues to worsen. Spanish banks can’t even calculate how much bailout they need. And this, incidentally, is one of the many reasons why the parallel between family budgets and financial institutions doesn’t work. If the EU came to me with an offer to bailout my debt, I could work it out in about half an hour. Yet giant Spanish institutions with highly qualified staff offered a spread of between 20 and 62 billion euros. So the real amount needed is probably 120 billion.

Major US banks had their credit ratings cut on Thursday so that Citigroup and Bank of America are now two notches above junk bond status. The only upside for their customers is that these banks have so maximized their fees and penalties already that they have run out of room for more.

In his European travels, David Graeber has been saying that the question now is, not if there will be some form of debt abolition, but how it will happen. In Iceland, the state has decided:

to forgive [mortgage] debt exceeding 110 percent of home values.

This forgiveness has affected between 15 and 20% of mortgages to a cost of at least $1.6 billion (in a country where the population is only about 300,000) and has had a dramatic turnaround effect on the economy.

Here banks have moved to a new tactic to their own benefit alone: short-selling, in which a house is not formally foreclosed but the bank accepts a sale at a loss. A striking 233,000 homes were sold this way in the first quarter of this year, a quarter of all such sales. That’s a million people who have had the banks sell their homes for them. Thus the headline-making foreclosure sales are technically down, at just over 20% of the market. Banks still own nearly 700,000 homes and the same number are in some stage of foreclosure: over 5 million more people are confronting homelessness.

The housing crisis is an invisible reason the student debt situation has worsened, I suspect. Parents and other financial supporters no longer have home equity to draw on to sustain ever-rising tuition costs, as universities assumed they did until 2008. That’s me right there.

And next week the Supreme Court is going to overturn health care, which, as flawed as it is, represented at least a chance that medical debt might be contained. In today’s New York Times, a couple with two health insurance policies are reported to have found themselves with a $90,000 bill after a fall led to an unexpected set of surgery and nursing home stays. A consultant reduced the costs by $22,000–but charged 25% of that as a fee.

So when the Montreal solidarity march last night took the theme “Night of the Living Debt,” it really made sense to people. It might as well be zombies spreading the debt crisis because it would be no more out of control than it is now.

Night of the Living Debt

Today, a group called “Free Bed-Stuy” had a great Free University-style event in a lovely park in deepest Brooklyn (I forgot to take pictures because I was doing a teach-in). An urban farm next door housed chickens, pigs and vegetable plots: and also a serious sound system that was luckily far enough away from the event that we could hear ourselves talk. No cops. And a comfortable curious crowd, who were eager to hear our ideas about linking debt to prison, slavery and stop-and-frisk. Tomorrow, the fourth Strike Debt assembly in Washington Square Park, 12pm. I’ll report back.

 

Twas The Night of the Living Debt

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With apologies to whomever it was that wrote Twas the Night Before Christmas.

Max Liboirox, “Ceci n’est pas un riot 2”

Twas the night of the Living Debt

Twas the night o’ the Living Debt,  I know for a fact

Not a creature was stirring, not even a rat.

The man-traps were laid by the chimney with care,

In hopes that debt-collectors soon would be there;

Occupiers nestled all snug in the streets,

While visions of anarchy made dance in their feet;

And she with her tattoos, and I with my beard,

Had just settled down in the long summer weird,

When out in the park there arose such a clatter,

I sprang from the tent to see what was the matter.

Away to Zuccotti I went in civilians,

Tore down the barricades, exhorted the millions.

The neon shining on the new-fallen trash

Gave the shine of desire, as if it were cash.

When, what to my wondering eyes should appear,

But wandering debt zombies out in the clear,

With a nasty debt driver, so fetid and rank,

I knew in a moment it must be Big Bank.

More rapid than eagles his debtors they came,

And he whistled, and shouted, and called them by name;

“Now, Student! now, Medical! now, Housing; for shame!

On Credit, On Store, On Debit! You cards all know your name!

To the top of the ratings! down the credit ranking score!

Now debt away! debt away! debt away more!”

As bank notes that before the wild hurricane fly,

When they meet with an obstacle, mount to the sky,

So up to the houses the zombies they flew,

With a van full of writs, and Mr Big Bank too.

And then, in a twinkling, I heard first the banshee,

The roaring and sighing of each fierce zombie.

As I joined in the march, and was turning around,

Out the paddy wagon came Big Bank with a hound.

He was dressed all in black, from his head to his boot,

And his clothes were all tarnished with pepper and soot;

A bundle of debtors he had flung on his back,

And he looked like a slaver turning the rack.

His eyes — how they glittered! his frowns were so deep!

His breath was like Hades, his mind fast asleep!

His foul mouth displayed wide like a whirlpool,

And the beard of his chin grew grey and cruel;

The stump of a gas pipe he held tight in his teeth,

And the smoke it encircled his head like a wreath;

He had fat face and a huge round belly,

That shook when he howled, like a bowlful of jelly.

He was muscled and plump, the evil old elf,

And I cried when I saw him, in spite of myself;

The look in his eye and a twist of his head,

Soon gave me to know I nothing but debt;

He spoke not a word, but went straight to his work,

And took all my possessions; then turned with a jerk,

And laying his finger aside of his nose,

And giving a nod, across the city he rose;

He sprang to his van, to his team gave a whistle,

And away they flew, shredding judgments of dismissal.

But I heard him exclaim, as he drove out of sight,

“Night of the Living Debt, there is no good night.”

Night of the Living Debt

June 22

7pm Washington Square Park

Occupied New York City

Welcome to the Garbage Can University

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In the last few days, a coup at the University of Virginia (UVa) and a report on the mass exploitation of the part-time academic workforce have made it clear that the US university system has come apart at top and bottom. All that’s left is the middle, endlessly putting itself into debt to stay in these increasingly dysfunctional institutions. Welcome to the garbage can university. There’s garbage at the top, rubbish pay at the bottom, and people treated like garbage in-between. And the masterwork of the new Interim President at UVa is on, yes, garbage cans.

First, UVa. This is unbelievable, even by the messed-up standards of university administration. Out of a clear blue sky the Board of Visitors (i.e. the Trustees) simply fired the current President Teresa Sullivan. The email trail dug up by student journalists at The Cavalier Daily, and pursued by the online daily Inside Higher Ed, shows what was up. Board members were so taken by a mediocre  Wall Street Journal piece of hype about online courses that they felt they had to expedite removing Sullivan. Here’s what got them salivating:

Online education will lead to the substitution of technology (which is cheap) for labor (which is expensive)—as has happened in every other industry—making schools much more productive.

The sleight-of-hand that will not have escaped your attention is to transform education, which is a public good, into a private industry. Rather than create a well-informed citizenry, this manufacture can be quantifiably more “productive.”

Perhaps most telling is what the Board did next. Sullivan, an expert on work and debt, was replaced with the Dean of the Business School. What use could a university have for the author of As We Forgive our Debtors : Bankruptcy and Consumer Credit in America? Or The Fragile Middle Class : Americans in Debt? Interim President Carl Zeithaml, former dean of the McIntire School of Commerce, is the third author of Barriers to Corporate Growth (1981). That really tells you all you need to know. Except that Zeithaml wouldn’t make tenure in most places with that publication record. Oh, I’m sorry, I forgot his recent essay “Garbage Cans and Advancing Hypercompetition.” My mistake. What could possibly better summarize the current American university than that?

At the other end of the academic pay scale, we learned today from the Coalition on the Academic Workplace that the neo-liberal revolution has fully succeeded. Composed of 26 scholarly societies like the College Art Association, the American Academy of Religion, and the  Modern Language Association, the Coalition began from this starting point:

According to data from the United States Department of Education’s 2009 Fall Staff Survey, of the nearly 1.8 million faculty members and instructors who made up the 2009 instructional workforce in degree-granting two- and four-year institutions of higher education in the United States, more than 1.3 million (75.5%) were employed in contingent positions off the tenure track.

Rightly, the Coalition saw its responsibility as trying to learn more about the conditions of these workers. Their survey received over 30,000 responses, with 20,000 from self-identified part-time faculty/instructors. The conclusions are stark:

◆ The median pay per course, standardized to a three-credit course, was $2,700 in fall 2010 and ranged in the aggregate from a low of $2,235 at two-year colleges to a high of $3,400 at four-year doctoral or research universities.

◆ Part-time faculty respondents saw little, if any, wage premium based on their credentials.

◆ Professional support for part-time faculty members’ work outside the classroom and inclusion in academic decision making was minimal.

◆ Part-time teaching is not necessarily temporary employment, and those teaching part-time do not necessarily prefer a part-time to a full-time position. Over 80% of respondents reported teaching part-time for more than three years, and over half for more than six years.

It is in this context that we need to discuss the assertion that labor costs are too high at US universities. It is in this context of systematic impoverishment of part-time faculty and instructors that students and those who support them should discuss the value of the tuition being paid for these courses, which now amounts to over $40,000 per year at all the top-ranked private institutions.

The disgrace of all this has been realized in Quebec. CLASSÉ point out that state support for public universities has fallen from 87% of the budget to 71%. That’s a level no US public institution can now dream of receiving. And that’s why they are on strike: because they can see where they are going–a world of essays on garbage cans, garbage level pay and garbage universities. And they want none of it.

 

The King is Debt! Long Live King Debt?

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The original saying was “The King is dead! Long live the King!” That is to say, while individual kings may die, Kingship never dies and is eternal. This theological fiction preserved monarchy during contested successions and other periods of difficulty. Now the fiction that must be preserved is the integrity of sovereign debt: governments come and go but sovereign debt, the debt incurred by the nation, must always be paid.

Yesterday’s three card monte of overdetermined elections produced two coups and one wild card, all in the name of sovereignty. What remains to be seen is whether the fiction of sovereignty can sustain the very different outcomes in Egypt, France and Greece, a result that will be determined as much in the bond market as in any political process. Take away sovereign debt, however, and the world market fantasy comes undone.

Sovereign debt is debt incurred by a nation state. The modern financial system depends on the fantasy that nations will always repay their debts. Huge penalties are levied on any nation that dares to even suggest that it might not do so for fear of exposing the emptiness of sovereign bonds. Actual sovereigns quite often failed to repay their debts, leading in significant part to the revolutions in England (1642), France (1789) and Russia (1917).

Sovereign debt relies on the paradox that, while it will never be repaid, it will always be serviced, generating a “safe haven” for money to become capital. Thus we have seen huge recent flows of money to German and US bonds, as investors cease to trust banks but assume that sovereigns never fail.

Since the US ended the international gold standard in 1971, it has been able to operate a system that has been called “debt imperialism.” As David Graeber has shown, the massive US war expenditures are financed by the sale of treasury bonds, now purchased extensively by China. This “tribute” system continues to function fairly efficiently. It is the non-imperial sovereign debt system that is in crisis.

Since 2008, it has become increasingly common for sovereign debt of troubled economies to be held largely by the banks of that country, a circular system that is only underpinned by low central bank interest rates. While this system supports international debt repayment, it does nothing for economic growth, employment or social services in the nations concerned. This robo-economy lends money to sovereigns to repay their debt, thereby incurring yet more debt and ensuring the continued flatline of the lived economy.

Greece has experienced the full force of this non-quid pro quo. In yesterday’s repeat election, the full force of global authority was brought to bear to keep out Syriza, resulting in a narrow win for New Democracy. While the media attempted to frame the question as to whether or not Greece would remain in the euro system, Syriza had always been clear that it would.

The question was whether the so-called memorandum subjecting Greece to humiliating and devastating cuts in order to “repay” debt with borrowed money would have to be renegotiated. Now that Greece has acquiesced to the Troika, a game is being played in which there will be some modest “concessions” by Merkel and the debt crisis will be postponed until December. The hope is that some solution to the permanent instability of the euro will have emerged by then.

Meanwhile, in Egypt a military coup has been allowed to take place without comment from the G20, suggesting that it had been cleared in advance. Sovereignty is deployed here as force to prevent a transnational grouping of elected pro-Islam governments in the North Afica/Middle East from forming. Both the revolutionaries and the Muslim Brotherhood appear to have been outmaneuvered by the sheer cynicism of this realpolitik.

For a not-particularly-threatening but “Islamic” government in Egypt, like the existing one in Tunisia, would undermine the global binary of “democracy” vs. “terror.” As we have come to learn, this binary means Occupy must be terror, while the heavily-manipulated and hardly decisive election in Greece is “democracy” and a “mandate.” On the other hand, if Hamas wins an election, that is not democracy.

France voted for sovereignty, continuing the fantasy that sovereign nations determine their own future. Whether it will get it is an open question. Hollande has a majority across the French parliament, the first time the Socialist have had this strengh since 1981. At that time, the markets were able to contain any radicalizing tendencies by creating a run on the franc before the new ministers reached their offices. Ironically, the anti-sovereign currency union has provided cover, with the euro ending slightly higher on the day after the election and the French stock market only very slightly down. Will markets come after France once they’re through with Spain and Italy as some have suggested? To pose the question is to answer it: of course they will.

For the slow-motion euro crisis has continued to unfold as if nothing had happened. Interest rates on Spanish bonds climbed well over 7%, the rate that triggered crisis in Ireland and Greece, while Italian rates are moving steadily upwards. There is, of course, no particular reason that 6.9% is OK but 7% is not and the sky has not fallen. However, it’s clear that this new rule has been invented to try and keep things from collapsing too soon. What’s less clear is why this permanent instability has now affected even major economic powers. Some German banks were downgraded last week.

All of these “events” are determined by the young, greedy men who work in the bond markets and like to be thought of as Big Swinging Dicks. Their imagination, such as it is, is populated with porn, sport and video games. In their minds, these men are the sovereigns.

Peter Campbell (right) at Mad Men’s idea of a brothel

To visualize this, recall the scene from Mad Men (above), in which the arch-capitalist Peter Campbell is forcing a prostitute to seduce him. She does so by saying “You’re my king.” Sovereignty is porn, the bond dealer is king. Can these minds continue to sustain the idea that a contiguous geographical region designated a “nation” can never fail to repay its debts? Or not? And if not, what happens?

To learn to live, finally, strike debt

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It’s been a week of mourning since I posted here. I missed it. I missed being involved. It made me think about loss, about debt as loss and how we might move to losing debt. Perhaps because of the moment in which I’m working this through, I’m coming to think of these questions as being equally ethical as political. Or we might say, as creating a new division of the sensible in which the ethical is in the same domain as the political, rather than being separated from it.

On Sunday 10 July, Strike Debt held its second Education and Debt Assembly and the first NYC Debtors Assembly. In the latter event, people spoke about their debt, how they came to be in the situations that they now find themselves in and what they’re doing as a result. One OWS stalwart, Mike Andrews, tweeted that he was surprised how many of the speakers were in middle age, not their 20s. It’s then that the debt taken out in your younger years often returns to devastating effect.

My partner’s mother, Alice, who just passed was an example. Forced to take over her husband’s automotive business after his sudden death in the 1970s, she found herself in difficulties once the Reagan-era neoliberal recession began in 1980. An unscrupulous bank required her to sign her paid-off house as security for a business loan, breaching normal ethical practice, but giving the bank a chance to recoup some of what it suspected to be a bad loan. Sure enough, the business failed and the house was lost. The bank itself went down not long afterwards. But lives were permanently damaged.

So it was that, at the age of 64, the Algerian philosopher Jacques Derrida began his work on Marx and what he called “the State of the Debt” with this aphorism:

I should like to learn how to live, finally.

This is the education of education. It is, he notes “ethics itself.” It is to speak of

justice where it is not yet, not yet there, where it is no longer, let us understand where it is no longer present, and where it will never be, no more than the law, reducible to laws or rights.

Derrida says that this justice is a politics of inheritance, in the context of the state of the debt, so I think we need to open up that aphorism to read:

I should like to learn how to live without or beyond the state of the debt, finally.

I do not think this is so simple a thing to do.

What is the state of the debt? It can be said that the state is debt, the possibility of creating debt, of sustaining, issuing and guaranteeing debt. In that case,

there is something rotten in the State.

Originally of Denmark. Leading to Derrida’s mirroring of the ghost in Hamlet with the spectre of communism in Marx. Now we might write it tout court, the State is rotten. And that:

There is a spectre haunting Europe, the spectre of debt.

Behind that spectre, or its other face, is the older spectre, the spectre of communism, living beyond debt.

Let it be quite clear that this haunting has nothing to do with the Marxist-Leninist states that had just collapsed when Derrida wrote. In fact, there is no longer any point in trying to capture state power because there is none. That is not to say that there is not state violence, because that there most certainly is, and it is now the raison d’être of the state itself.

I do not set my life at a pin’s fee

says Hamlet as he confronts his father’s ghost. He acknowledges that he is

….bound to hear

Ghost: So art thou to revenge.

So while his life is not valued in monetary times, because to learn to live is finally to get beyond such accounting, this haunting is a matter of debt, something is owed. The King is the State in a monarchy, for Majesty adheres to him, whatever the weakness of the king’s own body. More precisely, Majesty never dies but is, as it were, transferred from one bearer to the next, a form of unpayable debt.

Hamlet has not inherited, that is to say, become King, despite being of age at his father’s death, because Denmark elected its monarch from within the nobility, as Hamlet acknowledges later in the play:

He that hath kill’d my king and whor’d my mother,

Popp’d in between the election and my hopes

There’s a new ambivalence here: does Claudius’s usurpation extend only to power or to Hamlet’s “hopes” in relation to his mother’s body? The state of the debt is not good. Not good at all.

For Derrida, the debt is one of the “ten plagues” that should conjure into being a “new International,” a grouping in the spirit of Marx:

The ‘New International’ is an untimely link, without status … without coordination, without party, without country, without national community, without co-citizenship, without common belonging to a class. … It is a call for them to ally themselves, in a new, concrete and real way, even if this alliance no longer takes the form of a party or a workers’ international, in the critique of the state of international law, the concepts of State and nation, and so forth: in order to renew this critique, and especially to radicalise it.

That sounds familiar now, doesn’t it? Are we, finally, in a place to learn the state of the debt? And to realize that undoing the debt is not the work of the State but of what will have to come after it, and has haunted it all along?

There would be mourning to be done, for lost dreams, lost hopes, for loss. Since the deployment of terror as justification for State expansion, the State has monopolized and militarized even mourning. To do this work of mourning against the State and against its violence, says Derrida, there will be the need for a certain language, a new way to speak of debt and loss. And that in turn will require

a certain power of transformation.

That power is not State power, the force of “power over” that would be known as poder in Spanish. It is rather the potencia, “the possibility to.” A suivre.

Collected Debt Posts

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Occupy 2012 is sadly sitting shiva from now until May 17 after sunset. In the interim here are the top posts on debt, many of which have been among the most popular posts in the project and are not always easy to find. Turns out there are a lot!

Endebt and Punish: an analysis of debt as punishment

Abolition (Free, Open) Education: what happens to education if there was to be debt refusal

The Out of Control Society: How the society of control went out of control via debt

The Student Debt Campaign Intensifies: Data from the Federal Reserve on student debt

The American Spring: Debt, Segregation and the Limits of the Unspeakable: on shame

The Debt-Prison System: On debt and slavery and its aftermath

Self-Killing and (the) Depression: debt, the crisis, depression and self-killing–ends optimistically!

1T Day: Waiting for the Debt Jubilee: How I missed the 1T Day march sitting delayed in an airport and was surrounded by discourse on debt nonetheless

On Hardt and Negri’s “Declaration” Including their discussion of debt

From Debt to the Land: Via the Farm and the Forest On the common, land and Occupy the Farm

Student Debt: Stage One Accomplished The public recognition of the debt crisis

Sovereigns to Students: Debt Enforcement as Law: The Montreal crisis and the law

Debt (new) media and academia: The interface of debt and visuality in academia

Debt Strike: Make Debt Public A manifesto for the new Strike Debt campaign in OWS

Hope you find this useful. See you in a week.

 

Debt Strike: Make Debt Public

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There’s a growing call in OWS for a debt strike. What does that mean? It means using the call to refuse debt as a means to make debt public. There should be a public discussion about how endebted we all are within the debt square that has replaced the public square. It means overcoming our shame at being locked in the debt square. And it means taking the debt public set people free. That last is not a demand because we all know no legislature at present is going to enact it. Look at Montreal, though: the government has not listened to the popular will and the people have not backed down. It’s public.

What is the debt square? It is the space defined by the four corners of modern US life:

  • student debt ($1 trillion)
  • mortgage debt ($14.6 trillion)
  • credit card debt ($800 billion)
  • medical debt (unknown)

Mortgage debt has declined slightly from $14.6 trillion in 2008 to $13.4 trillion at the end of 2011. The real change is in the amount of mortgage debt held by the federal government in various ways. From $725 billion in 2007, it’s now over $5 trillion. That means that the Feds control close to 40% of mortgage debt.

You hear less now about foreclosure because banks are short-selling houses and taking a loss:

All told, 233,299 bank-owned homes or those in some stage of foreclosure sold in the first quarter, making up 26 percent of all U.S. home sales in the period

As for credit cards, it’s what you already know: debt is rising, as are interest rates. Credit card debt snuck over $800 billion last year, even as interest rates rose to over 12% on average. The average credit card in households that have them is now over $15,000. Fewer people do have cards, as credit is being denied more often, but people who have credit cards have 3.5 each on average.

Increasingly, people are using credit cards to “pay” their medical bills, which is the third corner of the debt square. One in three households are struggling with medical bills and eighty per cent of those questioned for a PBS Newshour survey were having issues with financing health care.

If that seems a little abstract, here are some hard numbers:

As of 2010, 73 million people reported problems paying their medical bills or were paying off medical debt, up from 58 million in 2005. An estimated 44 million people were paying off medical debt in 2010, up from 37 million in 2005. (Source: Press release, The Commonwealth Fund, March 16, 2011.)

The least surprising news story of June 2012 will be the Supreme Court decision to revoke the Affordable Health Care Act, setting back even those modest improvements to health care affordability. But note that the Commonwealth Fund also found that

Sixty-one percent of those with medical debt or bill problems were insured at the time care was provided.

There is little available recent data on medical debt and no collated national figure that I could find.

Student debt has been the most widely discussed form of debt here. Today NYU President John Sexton announced:

Undergraduate tuition, fees, and room and board – For the 2012-13 academic year, we have budgeted an increase of 3.8% in tuition and mandatory fees, and 3.5% in room and board; the aggregate increase in the cost of attendance will be 3.8%.

So that $1 trillion of student debt is going to keep rising beyond the rate of inflation yet again.

The debt square defines the aspirations of most citizens: health, education, shelter, consumer goods. It defines them as things you need or want but renders the means of obtaining them into an object of shame. Who hasn’t stayed awake at night worrying about one or other of these debts? The answer to that question is now simple: the one per cent.

What is the answer to the prison of the debt square? To make it public. As we can see with mortgages, the so-called free market wants to move non-prime debt to the public sector anyway. With public money so cheap, the government could take on all private debt and have us reimburse them at the one percent rate it charges banks. Or it could just abolish the debt altogether.

That government is not this government that we have now. It is the government that the students in Quebec want. It is, more exactly, not a government at all but a means of enabling the possibility of autonomous citizens. To get there, we have to imagine not just a world without student debt, but one in which you are not a loan. A life to be lived rather than a credit rating to be lived up to: debt strike!