Cooper Union is now occupied by students protesting the end of free education at the famously tuition-free school. Follow them at www.cusos.org and at @FreeCooperUnion. Remember that the introduction of tuition at CUNY in the 1970s enabled enormous tuition increases once that one foot was in the door. The stakes of this protest are very high.
Of the organizing strategies emerging from Occupy, few have the momentum of Strike Debt. Organizers believe that debt is what Americans hold in common; debtors must be the class that unites and fights for a fair economy beginning with the elimination of medical, housing, education, and credit card debt. It reflects the widespread attitude that made David Graeber’s Debt: The First 5000 Years so popular and the conditions that made the 99 percent Tumblr a catalog of loans and unpaid mortgages.
But is debt the most powerful category around which to organize? Why organize around debt, rather than class, occupation, grievance?
As we speak, Wal-Mart workers are organizing warehouse strikes and teachers unions in Chicago, Wisconsin, and beyond are engaged in labor struggles to fight back austerity. They have shown startling successes in the last year. Why not start by supporting these workers, who seem to have leverage with state governments and their workplaces, where debtors have none with their banks?
As post-Occupy activists strategize and build, these questions will be paramount. There is nothing more important now than picking out points of leverage and collective effort. Success rides, to an unusual degree, on how we grapple with new analyses regarding debt and labor.
Our job at Dissent is not to cheerlead this or that strategic development per se, but to explore what these movements can do and think critically about their strategies and goals. To this end, we invited Andrew Ross, an organizer with Strike Debt and a professor at NYU, to engage in an email dialogue with Seth Ackerman, an editor of Jacobin.
Our readers should also be aware that the Strike Debt telethon is kicking off on Thursday, and you can read more about this epic endeavor right here.
I’m looking forward to the dialogue with you—here’s a start.
Strike Debt arose from a coalition of Occupy groups at the beginning of the summer—Occupy University, Occupy Student Debt Campaign (OSDC), and Occupy Theory. We called some assemblies on debt and education in Washington Square Park, and they grew into weekly Debtor Assemblies in the parks of Manhattan, Queens, and Brooklyn. All assemblies included a public forum for debtors to speak openly about their own debts, which became an emotionally intense rite of passage into the debt resistance movement that we were hoping to build. This process of “coming out” about personal debt had been going on since the early days of the Occupy encampments.
In the OSDC, in which I had been active since November, we had decided that these public confessions were indicative of a politically ripe moment. By the early summer, the OSDC folks felt it was time to link student debt to other kinds of debt—they are all interconnected through household economies—and so Strike Debt was born, aimed at four types of debt primarily—medical, housing, education, and credit card debt. We adopted the red square from the Quebec student movement to symbolize the four corners of indebtedness, and joined with All in the Red student protesters on New York City’s summer casserole marches.
By S17, the weekly Strike Debt assembly had emerged as one of the strongest Occupy tendencies, with aspirations and a sense of momentum that did not rest on, or simply look back to, the achievements of the Zuccotti Park phase.
On S17, and building on the summer’s research, we launched the Debt Resistors’ Operations Manual, a mutual aid project designed to offer advice to debtors of all kinds about how to escape or minimize their debts. Some of the advice comes from industry insiders (consumed by guilt about their day jobs!), and much of it leads the reader toward the pathways of collective action. It seems to have been a big success; it is being translated into other languages, and there are plans to produce customized versions to suit the debt economies of other countries.
Our next project is called the Rolling Jubilee, crafted to buy out quantities of debt for pennies on the dollar, and abolish it. The first buy is a small demonstration project, but we have plans to scale up the fund if it is successful…
One of the things Occupy has been criticized for—and I’ll admit, I’ve been one of the critics—is a lack of focus on strategy or organizing. The debt campaign seems like a real effort to grapple with those problems—to figure out how the movement can expand its numbers and strength so it might force some material changes to the social balance of power. Occupy is often tarred as the mountain that birthed a mouse, all spectacle and no substance; and there’s been more than a kernel of truth to that critique in the past.
But Strike Debt shows that there’s a real will among many activists to create something serious and lasting. To me, the greatest point in its favor is that it’s based on the fundamental principle of mutual aid—the motive force behind every successful mass movement.
That said, I have to admit I’ve watched the emergence of the campaign so far with some trepidation.
We’re faced with enemies far more powerful than us. We need to figure out where in the system we have some leverage, and where the system’s weakest and most vulnerable points are. I might be missing something, but consumer debt seems like the least hospitable terrain imaginable. It is, obviously, a highly atomized and dispersed form of social domination—a point that Strike Debt is well aware of, given the debt speak-outs it’s organized. It’s a social relationship mediated entirely by money, which they have lots of and we mostly lack. And the net result is that it’s a field of struggle where our leverage seems extremely slight.
Think of it this way: suppose 50,000 people did the unthinkable and organized a real debt strike: they linked arms, swallowed hard, and defaulted on, say, $10,000 in consumer debt each. As an organizing feat, it would be a spectacular coup. But while the personal consequences for the strikers would probably be dire, the total losses for the banks would be only $500 million. To put that in perspective, JP Morgan’s losses in the infamous “London Whale” trades this year have come to about $6.3 billion—and the company subsequently made up most of that with their third-quarter profits alone. Even worse, that’s just one company: our $500 million would be spread out over many different creditors.
I have other concerns that we might get to, but I guess the first basic question I have is: what exactly is Strike Debt threatening to do to the system, and what does it hope the result will be?
To paraphrase Marx, you don’t get to choose the conditions under which you can make a little history. The massive level of household indebtedness and the entrenched power of the creditor class are the given conditions, and so you have to act on that terrain. It’s clear that the government is not going to provide debt relief, so people are going to have to do it for themselves, by any means necessary. I wouldn’t class it as “consumer debt,” by the way. Housing, health care, and education—the main sources of household debt—are indispensable social goods, not consumer commodities.
Strike Debt’s long-term strategic goal is to build a debt resistance movement, but that will require a lot of organizing and even more public education. So we started out with some small-scale tactics that could be scaled up.
Take the Rolling Jubilee. While the debtors to whom we bring relief are under no obligation to respond, we will ask if they want to kick in something to the rolling fund so that we can buy out others. If the project captures the public imagination and funds roll in, then we will be able to buy up a significant amount of debt. Of course, this won’t bring the system to its knees, but part of the project is to publicly expose how banks sell debt on the secondary markets, and how collection agencies acquire it very cheaply. Hopefully it will inspire other, even more ingenious, ideas about how to intervene effectively.
Along the way, actions like this help to change the psychology of the debtor, and that’s a necessary part of building any movement. More and more, people are beginning to understand how money is created as interest-bearing debt. It doesn’t preexist the loan, least of all as the creditor’s asset. Money is lent into existence at the moment the loan contract is signed, and so the lenders need borrowers to perform this magical act. Understanding this process really does help to change the way people think about their obligation to repay.
Equally important, of course, is what we have we have all seen in the wake of the financial crash—banks that never have to pay off their debts expect the little people to honor theirs. Exposure of this double standard has also helped to erode the belief that debt repayment is a moral test of personal responsibility.
The Debt Resistors’ Manual has prompted folks in other cities to start up their own Strike Debt chapters, and we are helping to seed these. One of our aspirations is to build a national network of affiliates, which would include already existing groups with their own identities. If we reach some kind of critical mass nationwide, that might be the time to seriously discuss strategic actions like debt strikes, or alternatives like a socially productive credit economy. It would be folly, of course, to go up against a major bank, but smaller institutions are vulnerable.
If I understand you correctly, a real debt strike—a mass, simultaneous default—is Strike Debt’s ultimate goal, but it’s a long-term objective that might take a while to realize. Until then, the agenda is about patient education and organizing. Now, raising consciousness about the iniquities of the debt system might be a valuable thing to do, but in the meantime debt is still accumulating. More to the point, the causes of indebtedness are still ticking away—and as you rightly point out, those causes are mostly about housing, health care, and education. In other words, people are going into debt because states are raising college tuition; because health care is a privilege you have to purchase (a reality that won’t change under Obamacare); because vastly unequal school districts force people into unaffordable housing; and maybe most important of all, because more and more of the national income is being siphoned off to the 1 percent.
If the threat of a mass debt refusal could give us the leverage to force changes to those systems, it would undoubtedly be the ideal weapon. But as I said last time, it’s hard to conceive of such a feat actually being pulled off—a point you seem to accept, at least for the time being. (I take your point about the possibility of debt strikes that target small financial institutions, but smaller banks fail all the time—six just in the last month—without anyone even noticing.)
A campaign by students demanding free tuition, or a national solidarity campaign with workers fighting to take power from their bosses—like the Wal-Mart employees threatening strikes on Black Friday—could physically disrupt powerful institutions, with clear targets (college administrators, state legislators, store managers, corporate executives) and clear objectives.
By contrast, Strike Debt essentially takes the form of an open-ended propaganda campaign, with no defined end-goal.
And I have to confess to being a little unclear even about the fundamental message of the propaganda: is all debt illegitimate, or just some debt? Should only some debts be cancelled, or should all of them be—in which case, wouldn’t we also lose most of our savings? Should there be a permanent end to the existence of debt; if so, what kind of system should replace it?
Of course, the future is unwritten—Strike Debt might end up evolving in unforeseen ways that address all those concerns. But for the moment, I don’t see the answers. What am I missing?
There are some days when I share your sense of impatience, but it’s the flipside of despair—that other debilitating left-wing tradition!—and neither is all that helpful to the task of organizing, especially organizing on new terrain like debt, where debtors are usually quite dispersed.
It’s important to remember there is a rich history of debt resistance, some of it buried in dusty archives, much of it cataloged under different names, all of it undertaken by ordinary people who were denied relief by those who could and should have delivered justice. Arguably the more successful examples come from people who share the same geographical location or the same creditor—this is especially the case with rent strikes.
But there are some spectacular examples of resistance on the basis of shared class—like the Shays Rebellion in New England in the 1780s, or the El Barzon movement of small farmers in Mexico after the peso devaluation in the 1990s. So, too, we have seen a pattern of sovereign countries—from Argentina to Iceland—default on their obligations to foreign bondholders. These all occurred in moments when indebtedness was so crushing that the response was one of collective unity, transcending the more typical atomization of individual defaulters.
It’s apparent that this critical point has been reached in many Eurozone countries, where the policy of passing on the costs of sovereign debt to the citizenry has prompted mass organization and action (viz the general strikes against austerity and debt called for November 14). These are failed democracies, whose elected officials are powerless to protect the population at large because policy-making is dictated by the EU troika. Because of the almighty dollar, U.S. sovereign debt doesn’t matter in the same way as elsewhere but the levels of household debt are higher, and it’s clear they will never be paid off. Indenture is a strong word to describe student debt, but people are using it anyway to describe the extremity of the situation. Seventy-six percent of American households are in serious debt, one in ten are being pursued by debt collectors.
So to me, the question is not, “Why organize around debt?” so much as, “How to organize around debt?” The struggle over debt will be the front-line conflict of our times, just like the struggle over wages in the era of high industrialization. That’s not to say that wage conflict is over (it never will be), but that debts are the wages of the future, and the debt profits extracted by the finance industry are the equivalent of wage theft.
Of course, people who are geographically disconnected are the toughest targets, though the new wave of labor organizing initiatives among independent and/or immigrant workers show that it can be done, and we’re working on some of our own ideas. But it’s always easier to organize on a local basis where folks have shared community ties. Case in point is the current re-energizing of Occupy networks around hurricane relief. Occupy Sandy has revived and radically extended the kind of mutual aid that OWS specialized in. Sandy is also shaping up to be a story about debt. The banks are circling around their prey, offering “relief” loans that will push people further into insolvency. Disaster capitalism in its most blatant form.
Does Strike Debt engage in “open-ended propaganda?” That’s not inaccurate, though I’m not sure we would put it quite that way. Public education is an indispensable part of any movement, especially one that does not have a strong prior foothold in popular consciousness. It’s all the more necessary when a prerequisite for change is eroding the payback morality that the finance industry depends on to extract its predatory profits.
As for “open-ended,” that might just be another way of describing what is primarily a mutual aid initiative. It doesn’t have the flavor of strategic planning that some parts of the left are more comfortable with. Ultimately, it may devolve to your own dim view of the Occupy mentality in general. I’m more inclined to see this as a test of whether anarchist principles can carry their weight beyond the Occupy core.
There are some in Strike Debt who think history is on their side because debt forgiveness in some form is inevitable. I think they’re absolutely right.
In fact, debt relief is an integral and recurring part of capitalism. Every so often, the burden of debt gets too high for the good of the creditors themselves, or for the interests of business as a whole, and with clockwork regularity debts are written off and forgotten.
You just have to look at Europe, where this year the Troika strong-armed bondholders into agreeing to a 50 percent write-off on Greek debt. Or Obama’s mortgage modification policies, and the much bolder plan from Glenn Hubbard, Mitt Romney’s economic adviser, that would have required banks to forgive mortgage debt for underwater homeowners. In fact, American history is littered with episodes of state-sponsored debt relief. Debt forgiveness would be welcome news, and if Strike Debt gathers enough momentum it might help the process along. But it would still leave all the old power relationships intact. People struggling with student loans could wake up tomorrow and learn that their debts were forgiven, but their younger brothers and sisters would still have to take out the same giant loans all over again—that is, unless something were done about the way we finance public higher education.
So the question again comes back to how we can build power from below. Part of my skepticism arises from some of the same facts you cite. Take the modern cases of mass default and resistance you name—Argentina, Iceland, Mexico. As you say, “these all occurred in moments when indebtedness was so crushing that the response was one of collective unity.” Indeed, each of them occurred in the wake of unexpected, massive increases in the value of debts due to the shock of a collapsing exchange rate. Here in the United States, a somewhat similar crisis has happened in the special case of mortgage debt, because of a crash in the value of the collateral behind those loans (the houses). And sure enough, in the wake of the housing crash mortgage relief immediately became a mainstream political issue.
But when it comes to household debt more broadly, the surge of recent decades has been cushioned by falling interest rates, causing the actual burden of payments to rise only incrementally. In the last twenty years, the median family’s debt service has risen from 15 percent to 18 percent of income. Families paying more than 40 percent of their income in debt service rose from 10 percent to 14 percent of all families. And the share of families with debt more than two months past due is up from 7 percent to 11 percent.
Thus, most of the pain of indebtedness is concentrated among a relatively small group of highly indebted people. Their struggle is real and urgent, and the Rolling Jubilee will rightly elicit support and sympathy from across the spectrum. (There will no doubt be right-wingers praising it as an admirable effort at private charity.) But if it is, as you say, “a test of whether anarchist principles can carry their weight beyond the Occupy core,” my fear is not that those principles will yield something too radical, but rather something that avoids a necessary confrontation with power.
The belief that debt is only a problem for a small group of people is unfounded, though it is quite prevalent. Strike Debt faced some criticism from within Occupy that debt was an elite target. The evidence suggests otherwise.
One of the more revealing sections in the Debt Resistors’ Operations Manual is about the vast scope of fringe financial activity—the range of loans extended to the unbanked or underbanked that carry the most venal rates of interest. Payday loans, for example, at 400 percent interest (or up to 1000 percent for online loans), check cashing, prepaid credit cards, auto-title and pawn loans, rent-to-own ﬁnancing. Through these subprime operations, the finance industry extracts an average “poverty tax” of $2,500 from each of the 40 million households that survive on $30,000 a year or less.
Likewise with education debt. Media producers feast on the stories of the poster child of a middle-income family who is enrolled at a pricey private college. But student debt takes a disproportionate toll on those from low-income families, and the racialized groups who are most indebted are African American and Latino, drawn more and more into the debt trap laid by the for-profit college sector.
Forgiveness is not a term we use—it implies that debtors have done something wrong–but it has a broad appeal, especially to people of faith who are being drawn toward the Rolling Jubilee. And, I agree with you, it will do little, in and of itself, to change the relations of power.
That is why our Occupy Student Debt Campaign ran on several radical principles for transforming higher education away from debt-financing. It’s also why Strike Debt advocates a range of commons-based initiatives aimed at building an alternative economy. While we want to neutralize the lending industry, there also has to be a constructive side of the project. Nor is the Rolling Jubilee intended to be anything like a large-scale solution to the debt economy. Its primary purpose is to expose the depravity of the system while doing some good too. Based on feedback we’ve received, there are lots of people who get it, in that sense. Many others misinterpret it as a serious, potentially scalable effort to provide mass debt relief. We don’t have the resources to do anything like that, and, besides, we have more radical aspirations. Join us.
Andrew Ross is a professor of social and cultural analysis at New York University. His latest book is Bird on Fire: Lessons from the World’s Least Sustainable City. He is also a member of the OWS Strike Debt Assembly.
Seth Ackerman, a doctoral candidate in History at Cornell, is an editor at Jacobin. He has written for Harper’s and In These Times, and was a media critic with Fairness & Accuracy In Reporting.