Can Debt Spark a Revolution?

Can Debt Spark a Revolution?

By David Graeber
The Nation
October 31, 2012

The idea of the “99 percent” managed to do something that no
one has done in the United States since the Great Depression:
revive the concept of social class as a political issue.

What made this possible was a subtle change in the very nature
of class power in this country, which, I have come to realize,
has everything to do with debt.

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 anti-colonial 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 De-Legitimization:

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 cancellation 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.



Mr. David Graeber, is a reader in social anthropology at Goldsmiths,
University of London, is the author of Debt: The First Five Thousand
Years.

http://www.thenation.com/article/169759/can-debt-spark-
revolution#