[Editor’s note: A few months ago, I wrote enthusiastically about the possibilities of Strike Debt, Occupy Wall Street’s new initiative that seemed to promise a shift in the conversation to the dynamics of the neoliberal political economy, and a greater class consciousness. After releasing a Debt Resistor’s Operation Manual, the main focus of Strike Debt has shifted to a Rolling Jubilee, an anarchist-inspired “mutual aid” fundraiser that claims to have raised over $87,000 in donations in order to buy up and cancel distressed debt. While The North Star has been strongly supportive of Occupy, this current direction raises some new questions. The following article is reprinted to give an overview of the current initiative and encourage discussion – BC]
Originally posted here.

A bailout of the people by the people.
We buy debt for pennies on the dollar, but instead of collecting it, we abolish it. We cannot buy specific individuals’ debt — instead, we help liberate debtors at random through a campaign of mutual support, good will, and collective refusal.
David Graeber, for example, has been tweeting about this enthusiastically and the Rolling Jubilee Facebook page has a picture of Slavoj Zizek holding the linked “Strike Debt” logo and a statement claiming that he too supports the campaign. My initial reaction to the plan was open-minded bemusement and a question which I see keeps recurring on the Rolling Jubilee FB page: “How does this work?”.
I think this is a question the people involved need to address, because investigations of their minimalist literature and promo video suggest that some of their own people are not very sure either. Some of the statements about securitization, bundling of assets, and hitting Wall St., indicate this confusion and frankly mislead interested parties. After several wrong turnings I think I have worked out what Rolling Jubilee are proposing to do, but it is guess-work so bear that in mind.
I think some people are confusing a specific kind of debt syndication in the U.S. with international financial syndication and securitization. The U.S. debt “syndication” Rolling Jubilee seems to be referring to, occurs with respect to unsecured debts that are distressed, i.e. the creditor thinks it won’t get its money back, or at least not much of it. What happens is that the creditor decides that pursuing the debtor will cost it more money than any eventual recoveries and so dumps the debt on a grey market for distressed debt populated by debt collection companies and small speculators. There are distressed debt brokers that make these markets. Now either the dumping creditor bundles up distressed debt and then unloads it on the market, or the debt brokers do. This is the meaning of “syndication” in this specific case. Another more usual meaning is where banks group together to lend money to a borrower — they are a syndicate. See also insurance syndicates. Securitization is more interested in revenue streams from debt (interest). Securities from these schemes are not the debt themselves.
In light of the above, it seems to me that the Rolling Jubilee will be entering the grey distressed debt market in the U.S. to buy bundles of distressed debt, at which point they will waive the debt, which creditors are entitled to do. While the debtors affected will be random according to the market, it should be noted that Rolling Jubilee still have to choose the classes of unsecured debt they will be buying. Their trial run featured loans related to medical costs. I suspect they won’t be buying U.S. student loans which are generally better performing, but I do not know the market.

Some technical quibbles can be and have been raised:
- The test run used US$500 to buy US$15,000 of debt. This is a great write down, but this differential is beholden to market forces. As soon as Rolling Jubilee start buying great chunks of distressed debt the price must surely rise, if not before as market participants mark up. After all, they want the best return for their debt. This might produce a rather strangely shaped return curve on the investments, with the worst debt actually getting x cents in the $ return as better debt is written off. Rolling Jubilee may well start getting less bang for their buck over time.
- There is a possible tax issue, in that in the U.S. the waiving of debt counts as income in the hands of the beneficiary. A cursory reading of the tax law suggests there is an exemption for donative waivers, but let us hope the IRS don’t require any special forms to be filled out or beneficiaries may be caught out. I hope the Rolling Jubilee makes this issue clear to beneficiaries.
- This isn’t really hitting Wall Street. This is more about consumer credit companies and debt collection agencies. Even if JP Morgan originated the debt in question, their whole model relies on being able to offload even before money has been transferred. If there will be an effect with respect to Wall St., it will derive from the wider social results of the Rolling Jubilee in liberating debtors. Some activists may feel that this just turns the Rolling Jubilee into another charity, mitigating capitalism and so upholding the status quo. That depends on the efficacy with which debt forgiveness raises consciousness (see below).
- Matt Yglesias at Slate Magazine has stated that it would surely be easier just to give this money to the poorest directly, so that they could pay debts or better essentials. It seems to chime with a Keynesian argument that money in people’s hands is what will get the economy going again, combined with the view that cash should not be going to creditors who should be forced to write off and take the hit. I agree with Strike Debt that this misses the point about the way in which debt shackles human freedom and is a significant part of social control, but more on this later.
- Moral Hazard I — that waiving debts just encourages people to get back into debt believing wrongly that they’ll be saved again. This is a red herring; the debts the Rolling Jubilee are targeting tend to be of the type (medical care) which people don’t whimsically take on board, and are in any event distressed such that the debtors are already being pursued as defaulting and have a bad credit rating.
- Moral Hazard II — the Rolling Jubilee will just be buying distressed debt taxi rank style. I see no evidence that they have considered whether any of the debt is void. For example, if debtor was mis-sold a loan by creditor, then a court might hold that the loan is void, especially if the capital that has been repaid but the debtor is labouring under usurious interest payments. If Rolling Jubilee pay off the wrongfully acting creditor when they could have funded legal advice and action, are they encouraging mis-selling of loans?
A bigger issue, which has been raised by several people, is the question of possible anonymity. Debts are waived at random, but will the beneficiaries know that the Rolling Jubilee was responsible and more importantly, why they were waived — what were the political reasons for this act of solidarity and mutual aid? I think this is a very important issue as it links in to why the Rolling Jubilee is a good idea.
David Graeber’s Debt: The first 5,000 years (Melville House, New York 2011) broadly aims to show how the fabric of social structures are built on debts in the broad sense and that there is an unhappy conflation between owing someone a favour and owing a bank a specific sum of capital. Graeber, drawing on the foundations of Modern Monetary Theory, shows how debt relations already can be found in the first agricultural civilisations and constitute the basis for exchange systems and subsequently money.
It is instructive to oppose this analysis of the origins of money through debt with certain Marxist views that it is the abstraction of reason in ancient Greece which leads to the creation of money and it is this latter moment that is omphalos of human economic history. Graeber makes a good case that it is debt that creates money, not vice versa, and that in the earliest cities the debt was constituted and governed by the temple, which held a precious metal that formed the reference point but not actual object of exchange. Farmers paid their dues in the form of grain but by reference to the metal price, and this grain could be recirculated as needed. The duty that constituted the “dues” came from the function of the temple itself in ensuring good governance, the planning for the flood, and divinely secured fertility. They are hypothesised as originating in earlier social interactions of varying formality in which obligations such as good will, recognition, marriage were the glue that bound people and groups together and prevented conflict.
One can see how this social obligation would become an enforced legal obligation, and farmers whose harvest failed were still expected to submit tithes, this time determined in absentia as a debt, payable within the year or if not than by giving up goods, slaves, land, children, and ultimately one’s own freedom. On this analysis, Graeber treats the Greek invention of money as secondary to the invention of a demand for taxes which must be paid in a specific money form. The tax debt, enforced, creates the circulation of the money form.
The study of early agricultural civilisations is instructive as has been noted on these pages before. Graeber informs us that in the years of general drought or similar calamity great numbers of farmers would default on their dues, and over time more and more members of a society would fall into debt peonage, while many others would simply run away, perhaps joining the Scythian nomads in central Asia. In short, the burden of debt became so great that cities would collapse into revolt or simply wither like modern Detroit as economic activity ceased and the population migrated. To prevent this, over hundreds of years, the Mesopotamian peoples developed the jubilee — a great forgiving which undid all the harm caused by debt and restored social bonds to zero. The Babylonian practice of jubilee was extended to the Hebrews by a courtier named Neremiah, who had been sent to rebuild Jerusalem (then part of the empire).
It is the idea that debt founds social structures and more deeply social consciousness, but that institutionalised and enforced debt can (will) over time build up and strangle that very same society, which is the principal mischief that the Rolling Jubilee is trying to remedy with its campaign of mass debt liberation. It is not just a question of setting another person’s net debt to zero, but of setting the distortion of their perceived onerous obligations to our warped, over-leveraged society to zero so that person can help refound their society again. I see the greatest merit in this intention.
What strikes me, however, is this question of possible anonymity: will Rolling Jubilee be telling individuals that it was they that have waived the debt, and if so, the reasons for this act as it arises from within Occupy. If one follows Graeber’s logic about the width of the debt concept in society, then one can readily see an analogy between the kind of socially positive, informal obligation that arises from helping one’s neighbour — a debt need not be repaid save in amity — and the donative mutual aid of the Rolling Jubilee. In short, the Rolling Jubilee is not really cancelling debts; it’s converting them into a new kind of social debt which binds the beneficiaries to Occupy but which need not be repaid save in solidarity. It is ironic to me, as someone researching finance, that the Rolling Jubilee has set up a special purpose vehicle which attracts outside investment so that it can purchase assets (debts owed), bundle them up and convert them into a dividend stream of political good will. It is, dare I say, mutual aid securitized.
I have said for many years that effective political activity starts on the ground —To The People as it was called in C19th Russia — building networks of support and a wide base of people who know from personal experience that political activists are nothing like the media caricatures they are fed. A problem has always been the supply of unconditional funds to provide the necessary support (education, healthcare, fixing someone’s roof, legal advice) as volunteers can only do so much. In one stroke the Rolling Jubilee may have found both a solution and a way of applying that solution directly to a pressing social problem.
But these comments are irrelevant if the beneficiaries of the Rolling Jubilee were to remain ignorant of the work being done and the reasons why: both how we got here and where we want to go. I think only the most Stirnerian of anarchists would want to cancel debts in a complete information black hole in the hope that no bonds of social obligation be felt by anyone. I do not sense this is Graeber’s flavour of anarchism and the “mutual aid” watchword of the Rolling Jubilee suggests that the spontaneous voluntary coming together of people in free organisation is at the heart of this important extension of Occupy’s work.
[Update: A comment posted on the original article by David Graeber reads: “Of course the idea has always been to alert those whose debt is canceled. First of all, you acquire the names and basic contact info so it’s quite possible. Second of all, how could anyone not want to be able to call and say “hi, Mrs, Fenwick? We’re OWS and we just canceled your debt…”]
{ 15 comments… read them below or add one }
Of the objections I have to this recent direction, I am particularly puzzled by the term “rolling”. As Charles Eisenstein (the ‘gift economy’/’Sacred Economics’ guy) writes glowingly in The Guardian: “The hope is that the liberated debtors will themselves contribute to the fund, ‘rolling’ the jubilee forward.”
http://www.guardian.co.uk/commentisfree/2012/nov/12/occupy-plan-cancel-consumer-debt
It seems to me that “Pay it Forward” is a dubious tactic at best, and particularly lacking when the subjects in question are bankrupt.
Further troubling is Eisenstein’s assertion that this “transcends politics”, and that it returns “Occupy to its origins as an advocate for the wellbeing of ordinary people, neither leftwing nor rightwing”. Little wonder then that writers at Forbes are getting behind it: http://www.forbes.com/sites/timworstall/2012/11/10/links-10-nov-finally-an-occupy-wall-street-idea-we-can-all-get-behind-the-rolling-jubilee/
However, David Graeber seems to view this more radically, analogizing this on twitter to a “union strike fund.” Of course, the debtors in question here are not unionized, apparently random, thus not even politically conscious. However, Graeber’s argument appears to be that merely by having defaulted, these debtors have committed an act of civil disobedience, and thus should be aided to encourage such default: “We’re not going to wait till they’re ‘properly’ organized. This is the 1st step toward organizing”
Given all the energies behind this, I imagine SD/RJ will raise a fair sum of money when all is said and done (i.e. $1M+). I can’t help but think that there must be better ways to use that sum of money to organize for debt resistance. If that initial seed money somehow snowballs via “pay it forward”, I will be happy to admit I am wrong – but it seems to me that the far more likely outcome is simply a one-off charitable fundraiser that generates some positive press.
A much shorter article could simply mention that this is merely one of the most spectacularly weird examples of the
bizarre ideas about money, debt, banking and capitalism that have flourished around Occupy.
On the other hand the financially insignificant amounts involved confirm that these ideas are not actually taken seriously but merely something that floats in the milieu.
Serious study of how the world actually works and must develop is required.
Amen to this. This is, as an organizing/political tool some of the dumbest shit I have every come across.
David Berger
Arthur and David, I agree with your general dismissal of the efficacy of this project. Nevertheless, perhaps we could elaborate on why this is “spectacularly weird” and “some of the dumbest shit I have every come across”? Assuming this fails to take off (as seems likely), what would be more effective suggestions for collective debt action that are grounded in “how the world actually works” (i.e. a Marxist perspective). Or is collective debt action so difficult to pull off, that we should set our sights elsewhere?
Set sights elsewhere.
Collective action is required to actually take over and run entire world economy. This is also “difficult to pull off” but financial schemes are just fantasies for people who won’t face up to that difficulty and somehow imagine it can be avoided by magic.
Finance IS the way the world economy is run. THAT is what needs change.
Attractive as it seems to be, I don’t think that any kind of debt action is possible. If you walk away from crazy utopian schemes as above, how are we going to organize around debt? In fact, even if the above scheme had some reality to it, how would we organize around it? It would end up as some kind of an NGO-type project that would go the way of all such groups.
As a member of the Labor Outreach Committee of Occupy Wall Street (a group that, unlike Pham Binh’s nonexistent Class War Camp, actually functions), we are constantly involved in labor actions ranging from supporting local actions such as that of the Hot and Crusty workers to support for the striking Chicago teachers.
Currently our members are involved in relief work in the aftermath of Hurricane Sandy. However, we are constantly striving to relate this work to a larger perspective and are preparing for a joint relief worker/labor meeting in a few weeks.
That’s what I’m talking about!
David Berger
There is no doubt that the classical Marxist worker-capitalist class conflict will play a role in any broad-based left movement. And as things start to pick up, labor movements will likely play an increasingly prominent role. However, at this point we are at the very early stages of the struggle, and it is worth considering the role that other non-labor challenges to capital could play in the broader struggle. For instance, a mass student resistance to student loans could strike a major blow to finance capital. Similarly, Doug Henwood’s comments posted below concerning bankruptcy seem intriguing (I imagine mutual aid to encourage bankruptcy would be more effective than this “Rolling Jubilee”). Other consumer-side things such as closing bank accounts and other lifestyle choices should not be immediately dismissed – sure, they are not revolutionary, but if they are oppositional to capital accumulation then they could have a role to play in a much larger struggle.
Organized labor plays an essential role in a Marxist account of class struggle, but that is no guarantee that at all times organized labor must be in the lead. Indeed, the Occupy movement was started last year by the strangest of all things – a group of two hundred anarchists sleeping in a park. Somehow their activities emboldened other segments of society to step up their struggles, including labor. Similarly in Quebec, predominantly middle-class students fighting something seemingly minor (a $1300 tuition raise) were able to galvanize an entire society. Thus, while we don’t want to be foolish (and I do think this RJ is foolish) we should still be open-minded to a role that might be played by non-labor forces in the broader class struggle, particularly as they might relate to the novel features of neoliberal financialized capital (e.g. debt).
I agree that this particular scheme sounds futile.
It seems to me, however, that the issue of mutual aid is one that the left must address if a mass movement is going to get traction. Both socialism and anarchism, historically, have done this far more than any contemporary movement–at least in the United States–is now doing.
There is perhaps a certain “austerity” tropism on the traditional Marxist left–frequently associated with third-worldism and ‘sixties-style anti-imperialism, but not limited to them. This sees a primary virtue in workers’ sharing a sub-minimal standard of living and prefers large doses of dialectical castor oil to any form of actual assistance, mutual or otherwise.
Many of those involved in this tendency respond with glee to the perceived punishment of the “labor aristocracy” and their fellow parasites.
But where there is real distress, there can be no organizing without mutual aid, whatever form that may take. Leaving aside the Democratic Party horseshit about “pragmatism” and Just Folks Getting Together, it remains a fact that no mass movement will succeed if it offers its followers only a correct party line and a table full of difficult literature.
In my reading, both Berger and Binh understand this, so I regret seeing the two of them at daggers drawn over the details–if that’s where they actually are.
There is a very long tradition of militant working class ( and peasant) struggle against debt – in particular against the enforcement of it. Resistance to evictions, bailiffs etc. This was one of the most successful campaigns of the Scottish Socialist Party in its hey day 10 years ago – linking mass action in the communities with initiatives in parliament against “poinding” (enforced sale of goods to repay debts). See http://en.wikipedia.org/wiki/Abolition_of_Poindings_and_Warrant_Sales_Act_2001.
Resistance to evictions was also an important move of the Indignados in Spain once they moved on from occupation of public spaces.
I don’t know how the enforcement of debt plays out in the US, but this the sort of community- based organising should be a relevant there in one form or another as everywhere else.
Debt acts as the isolator of the individual from the mass and as the source of legitimacy of ruling class power, and is the vehicle for the terrible punishments of homelessness, disease, starvation, and police action that threaten every debtor with every missed payment, every threat to employment, and every stain on the credit rating.
This is not as divorced from the topic of mutual aid as one might think: if socialists and the more thoughtful anarchists can create mass movements that free people to any extent from the isolating tyranny of debt, they increase the potential for revolutionary action by the people so freed.
Here is a conversation/debate between Strike Debt organizer Andrew Ross and a skeptical Seth Ackerman. Worth a read:
http://www.dissentmagazine.org/online_articles/strike-debt-the-debate
Doug Henwood weighs in: http://lbo-news.com/2012/11/13/rolling-where
In a nutshell: “it’s not going to do much more than generate some publicity.”
This is a very good critical review of the Rolling Jubilee initiative but I think some of the critical points should be reinforced.
On the one hand, this is a clever idea and could provide a tangible focus for the wider Strike Debt campaign. As Matt Iglesias argues on Slate “almost all charitable undertakings are organized around some kind of gimmick or other … If the peculiarity of the distressed debt situation and the concept of a jubilee happens to inspire people and motivate them to be more generous with their time and money than would otherwise be the case, this is a perfectly good idea.” BUT –
I am not familiar with the workings of the US secondary “distressed debt” market, but I assume it is centred around brokers who buy up large volumes of nonperforming consumer debt from financial institutions and sell it on in smaller packages to collection agencies and the like.). I imagine that some cherry picking and grading goes on in this process to establish different discount rates for different debt bundles. The Jubilee seems to be dealing in the area where only 5c/$ is being paid. This must be the fag-end of the trade, where demand even from the collection agencies is low.
First, this raises the question – how much help is really being provided here, since these are debtors who no one seems to expect to be able to pay and who may well have already used personal strategies to slip through the system?
Second, this market is one of the worst examples of the sort of evil traffic the capitalist “financialisation of life” can produce. Won’t Jubilee be providing demand in the weakest section of this market? Does Occupy really want to get involved in this dirty business? OK – maybe it will keep some people out of the hands of the most unpleasant agencies (both by buying up debts and by pushing up the price in the “no hope” area); but it will do so at the cost of boosting the market as a whole, with the main beneficiaries being the brokers.
The third – and in my view fatal – flaw is that it is an essentially “charitable” model that leaves the beneficiaries in a passive position – the only political mobilisation is of middle class donors.
Strike Debt has produced a really excellent resource in the Debt Resistors’ Manual – surely a better initiaitive (at the very least least an essential companion one) would be to channel resources into promoting self-help groups in poor communities to provide information and support for implementing the excellent strategies outlined in the Manual.
So Doug Henwood got into a bit of a back-and-forth with the left-liberal Mike Konczal today over Strike Debt and Rolling Jubilee. The exchange itself isn’t worth going into, but it prompted this concise reply by a “Jcl Sismondi” on Facebook:
—–
I will make, once again, the point that is resolutely missing from the back’n’forth between Henwood, StrikeDebt!, Konzcal, etc. It is
• entirely salient
• has yet to be refuted in any serious way
• and yet people keep pretending it is not the case, because they don’t like the implications.
It does NO GOOD to “connect” the debt struggle to ideals of free education, health care, and all the other forms of the social safety net. The question of whether or not Strike Debt does this, or should do this, is ENTIRELY EMPTY.
If people can’t get what they need to live through the wage they fight back hard. This became a major problem earlier in the 20th century. Social Democracy developed as a way to purchase social peace.
The current regime of debt arose precisely because capital could no longer afford to purchase the social peace via such programs. It still needed to cover the gap between wages and the cost of staying alive; it also needed new revenues. Debt and financialization were its solution to this problem. It was a real problem.
We cannot simply go back to social democracy. If capital could purchase the social peace that way, it would. It can’t. The current debt regime is not a bad idea somebody had that they can just fucking re-have given adequate pressure. It is not an option.
The missing part to a struggle against debt IS NOT A STRUGGLE FOR SOCIAL DEMOCRACY. You might like it to be, because that seems doable, because you have some memory of it, or have heard great things about Sweden. Stop it. It’s not going to happen. And it’s not going to happen regardless of whether our politicians are good or bad, and regardless of how much “pressure from below” is applied. They abandoned it for a reason and that reason hasn’t changed. Get it?
The missing part of the struggle against debt is the struggle against the very arrangement where you can only get access to what you need to live through the wage. There is nobody out there or in here, capital or labor, who can suddenly pay more wages or provide more services and stay profitable, —and if you can’t stay profitable, you dont do anything.
The struggle against debt — at THIS particular time, in THIS particular historical situation, HERE, in REALITY — the struggle against debt is the beginning of a struggle against the wage form. I don’t care if you don’t like this fact or think Marx was a bad guy or feel like revolutions pretty much go wrong. Fine to all of that, grand. DOES. NOT. MATTER.
The struggle against debt is the beginning of a struggle against the wage form or it is nothing.
Doug Henwood, Amin Husain and others discuss the Strike Debt initiative on MSNBC:
http://www.msnbc.msn.com/id/46979738/vp/49860548#49865405
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