Debt Crisis and Class Struggle

by Ben Campbell on July 17, 2012

Inspired by the Quebec student strikes, the Occupy movement will be focusing in on the issue of debt over the coming months. Yates McKee at Waging Nonviolence:

The Night of the Living Debt march was just one sign that debt is emerging as a connective thread for Occupy Wall Street organizers and their allies as they begin to build toward the movement’s one year anniversary of September 17, variously known as S17, Black Monday and Occupy Year One. More than just a commemorative ritual or one-off day of action, many organizers in OWS plan to use the media spotlight surrounding the day and its buildup as what Sandra Nurse calls a ”launching pad” for a new kind of political movement in the United States — a movement of debtors identifying themselves as such.

While the movement has in the past been criticized for its lack of a coherent message (often rightfully), this new focus on debt shows the signs of a growing political and economic maturity. This is because debt is essential to understanding the current capitalist crisis, and such an understanding can lead only to radical conclusions.

We are in an unprecedented global debt crisis, with debt piling up everywhere you look. Personal debt has been skyrocketing for decades. The ballooning student debt that was the impetus the Quebec “casseroles” movement has reached new levels of indentured servitude south of the border – just as opportunities for gainful capitalist laboring have vanished. Even the Wall Street Journal can’t help but note it:

Of course, the student debt is couch-change compared to the debt-fueled housing bubbles witnessed over the last two decades. Yet even after an extreme economic downturn and five million foreclosures in the United States, this has barely made a dent in private debt levels. Australian Post-Keynesian economist Steve Keen has done much empirical work on the debt bubble:

Importantly this debt phenomenon has been truly global, and several national housing bubbles appear to remain (e.g. Canada, Australia), threatening to throw entire countries and the global economy back into what even econo-shills could not deny is a “recession.”

Far from being a mere personal matter, war and the capitalist pillaging of the U.S. Treasury has led to an explosion of government debt at all levels in the United States, which has been greatly expanded by the collapse of the housing bubble and with it the entire global economy. This has given the most reactionary political forces the unprecedented opportunity of fulfilling their long-held ambition of destroying even the Dickensian American social safety net. The Tea Partiers and bipartisan corporate sock puppets are joined in this ambition by the most rapacious Euro-crats and the comparatively kinder, gentler pillaging of the Camerons and Harpers of the world.

As I discussed previously, we are now in a regime of absurdity where capitalism attempts to manage a “recovery” by shifting debt around from one location to another. The predictable result is trickle-down debt, with the bill eventually to be footed by the working class, who will pay it by selling the only thing they have left – their labor power.

By shifting the conversation to debt and these basic facts, two conclusions are inevitable:

  1. The problem is systemic. When there is debt everywhere, the “progressive” focus on greedy bankers, corrupt regulators, and corporate lobbyists must be seen as insufficient. It’s not that these things are not true, but there must be something else causing this seeming defiance of the laws of gravity. This is, of course, capital accumulation.
  2. A debt bubble is, by definition, a class struggle. At its most simplistic, it is a struggle of creditors against debtors, but such a reduction is insufficient.

Even the wealthiest capitalists have debt (while being net creditors), and even the poorest tend to be owed something by somebody (while being net debtors). Thus, if you analyze the debt crisis solely as a debtor-creditor struggle between “99%” and “1%” you are missing the fact it is capital accumulation itself that is the creditor, and the class struggle is a determination of who should be sacrificed to its vengeance.

This is a topic that deserves far more detail, but for now I will simply quote from a Brendan Cooney criticism of Occupy’s corporate personhood focus:

Marx tackles this very argument of Smith’s in Vol. 2 of Kapital. He shows that there is a rather significant part of capitalist production that does not resolve itself to wages, that does not go to serve workers at all. It does not exist to enrich the capitalist. It is merely self-perpetuating accumulation of capital for its own sake. This is the real nightmare of capitalist production, a greater nightmare than wealth disparity or deferred investment.

It is this “self-perpetuating accumulation of capital for its own sake” that has been running on credit for decades now, and it is the relentless engine to which everyone is indebted. Hopefully, those with an understanding of this will engage more fully with the Occupy movement this time around, to help create a mass movement that is truly conscious of capitalism and the ongoing class struggle.

{ 3 comments… read them below or add one }

Pham Binh of Occupy Wall Street, Class War Camp July 17, 2012 at 4:42 pm

A debt strike could be profound depending on its execution. Personally I don’t see millions of people refusing to pay student loans and credit cards period; however, a “strike” for 2-3 months on student loans on a big enough scale would crimp the cash flow of major lenders and affect the securities that are tied to those loans. The number of people who do this is probably less than 5% of debtors but if we could up that by a few percentage points it would hurt them for sure.

As for corporate personhood, I like this chant that I first heard from anarchists in the Bay Area:
“No borders, no nations, no private corporations!” Get rid of corporations instead of focusing on their “personhood.”


Louis Proyect July 17, 2012 at 6:11 pm

This is a very important article. Debt is the cutting edge of the class struggle today, just as the right to form unions was in the 1930s. My own take on all this is here:


Brian S. July 19, 2012 at 8:48 am

As the article above notes, financial processes are at the centre of the current (and growing) systemic crisis.To me it reflects a qualitative shift in the dynamic of the system under the influence of its hyper-trophic financialisation. This is not just about the unending bank scandals, but includes the increasing dead-hand of the finance function and financial calculation over the productive sectors of the economy (including high-tech industries).
Private debt is one manifestation of this, and an important one because it allows linkages to be built betwen popular everyday needs and systemic issues (and, potentially, system-transforming politics). Its important that we start making clearer and more concrete connections between our theoretical analyses and the world of lived experience.
As Pham says, a debt strike at this point might not gain mass support, but it does seem like a good device for dramatically highlighting the issue, and planting the idea in people’s minds as a possible response once personal debt begins to bite into their lives. Its something that could build steadily (and generate a stream of ancillary forms of resistance, around debt collection, repossessions, etc.)


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