[-empyre-] Debt and the 47%

[Annie McClanahan]

Hi Bill--
I think you've actually answered your own question: that is, in addition to
staving off two looming systemic crises (a crisis of underconsumption
caused by wage stagnation, and a crisis of overaccumulation caused by the
falling rate of industrial profit), the creation of a kind of "debt-wage"
also prevented a political crisis within the working class.  The failure of
wages to rise didn't have to mean the decline in "quality of life" if the
latter could be purchased on credit, and thus wage-earners were lulled into
political non-engagement. (Of course there's other stories to tell here
about racial politics, the culture wars, failures within the labor
movement, etc etc etc but I personally find the economic explanation the
most urgent and compelling right now.)

To me the important question here is how all this affects (or should
affect) the ideological rhetoric around indebtedness: what this history
suggests is that the representation of consumer debt as a "cultural
disease" caused by greedy American consumers is materially wrong, since the
debt was largely used to allow households to pay for necessities, not
luxuries. (Indeed, as Andrew Ross has suggested perhaps it's not right to
refer to it as "consumer debt" at all, given where the money was spent.)
And this realization might, in turn, allow for the possibility of movements
around debt refusal (or debt forgiveness, tho I prefer the former,
personally!). The reasons that Rolling Jubilee is purchasing medical debt
are largely practical (it's cheap, it's unsecured, etc.) but there's also a
sense in which the massive increase in medical debt in particular shows us
something about where all this debt comes from in the first place.

Best,
Annie

On Tue, Nov 20, 2012 at 2:59 PM, William C. Leiss <wcl54 at cornell.edu> wrote:

>  Annie, Anna,
> Some  history is always interesting.  As of the turn of the last century,
> no one except the rich had access to credit, including mortgages.  (I saw
> the early phase of the change:  beginning in the 1940s, my parents, quite
> poor, had a small home mortgage with a tiny savings-and-loan firm in rural
> Pennsylvania; I remember the record book, in which were noted the $25
> monthly cash payments!)  Like everything else things worked pretty well, in
> terms of expanding consumer credit, in that remarkable quarter-century,
> 1947-1973, during which, as Paul Krugman recently reminded us, average real
> incomes doubled, the working rich had relatively modest incomes, wealth
> increases were spread widely across income levels, and consumer debt levels
> were manageable in relation to incomes.  A decade later the rot began to
> set in, with the first collateralization of debt and the deregulation of
> the savings-and-loan industry, and the great shift started in the US
> industrial sector, from manufacturing to finance.  As you have noted, the
> underlying driver was the effective freezing in real incomes of working
> people thereafter, forcing them to rely on accessing debt to pay for the
> "American dream/nightmare."  But why was this allowed to happen with so
> little resistance?  That's what bothers me.
> Bill
>
> William Leiss
> Society for the Humanities
> 211 A. D. White House, 27 East Avenue
> Cornell University
> Ithaca, NY 14853-1101
> Tel. 607-255-9279
> Fax 607-255-1422
> www.leiss.ca
> www.herasaga.com
>
>
>    ------------------------------
> *From:* empyre-bounces at lists.cofa.unsw.edu.au [
> empyre-bounces at lists.cofa.unsw.edu.au] on behalf of Annie J. McClanahan [
> ajm475 at cornell.edu]
> *Sent:* Tuesday, November 20, 2012 12:03 PM
> *To:* empyre at lists.cofa.unsw.edu.au
> *Subject:* [-empyre-] Debt and the 47%
>
>   In a pivot from last week’s discussion, we’d like to turn this month’s
> treatment of risk to questions of debt and indebtedness. To kick off this
> week’s discussion, we’ll begin by posing two related lines of questioning:
> 1.) how might we think about the risks of debt culture and 2.) how are
> particular subjectivities construed as indebted?
>
> ---
>
> As the very term “bond” already begins to suggest, the debt relation
> involves both mutuality and violence, both the positive force of social
> obligation or communal interdependence and the extremity of slavery,
> concubinage and dispossession. The fact that debt both limns the bondsbetween us and constitutes a form of coercive
> bondage is due in no small part to its relationship to risk. Much has
> been written—by historians, philosophers, cultural critics,
> anthropologists, and political economists—about the risks of credit:
> credit, it has been said, both depends on and produces social trust as a
> kind of hedge against risk. It requires confidence in one’s capacity to
> decide who is worth of credit; it requires trust in the promises and good
> faith of those to whom one lends; it requires belief in the capacity of the
> social order to enforce those promises. When we approach that final form of
> “belief,” it seems to me, we should pause to consider those modes of
> enforcement, and begin to wonder whether “trust” is really the way to
> describe an economic relationship built in the shadows of the courts, the
> gallows, and the debtor’s prison. More to my point here, though, none of
> this stuff about the creditor tells us very much about the risks of debt.
>
> For the purposes of sparking a conversation with Anna’s wonderful work on
> parasitism, dependence, and neoliberal politics, I want to encourage us to
> think together about the risks and consequences of indebtedness as a form
> of social mutuality. Perhaps most importantly, I want to wonder about how
> all this fits in with what we’ve learned, in the wake of the credit crisis,
> about the way debt has worked in the US in the last couple decades. How
> does the association of credit with trust square with the fact that 21st
> century creditors weren’t looking for borrowers they could “trust,” but
> often sought out the riskiest borrowers--and that because of the liquidity
> of securitized credit and derivative instruments like credit default swaps,
> most creditors had no incentive to keep borrowers from defaulting? How does
> the “obligation” to repay change when debtors are subjected to the kinds of
> economic violence we see functioning today? (Here I could post dozens and
> dozens of newspaper articles from the last five years--about dying people
> being harassed for medical debt, about credit scores being used as an
> excuse not to hire someone, about the racism of subprime loans and payday
> lending, about the massively profitable and growing private debt collection
> industry--but I think the very ubiquity of these stories makes further
> evidence unecessary--if we haven’t lived it ourselves by now, we probably
> know people who have.) How does our sense of debt as an economic force
> change when we know that the massive “consumer” debt which weighs on poor,
> working-class and middle-class folks in the US is largely due to the
> decline in social surpluses and a social safety net--that is, when debt is
> the only way to deal with decades of declining wages and the increasing
> cost of social goods like education, housing, and health care? More
> abstractly, we might ask: if we want to resist these forms of
> dispossession, exploitation, and economic violence, on what histories and
> rhetorics might we draw? Is there a way to refuse debt as an economic
> strucutre while holding on to ideas of mutuality, obligation, and
> dependence? Should we reclaim the language of debt--as a form of
> interdependence, as a kind of parasitism--or find a new language to
> describe our bonds, particularly the bond which goes by the name of
> solidarity?
>
> Anyway, these are some opening questions intended to bridge some of Anna’s
> interests with my own. Tomorrow or so I’ll hope to suggest that one very
> recent political project, the Rolling Jubilee currently being organized by
> the Strike Debt group of Occupy Wall Street, allows us to raise some of
> these questions about mutuality, the gift, dependence, and collective
> obligation. For now, tho, we both look forward to your thoughts!
>
> Annie McClanahan
> 2012-2013 Faculty Fellow, Cornell Society for the Humanities
> Assistant Professor of English, University of Wisconsin-Milwaukee
> mcclanah at uwm.edu
>
> -----
>
> If, as Annie convincingly demonstrates in her important work on our credit
> culture, debt structures social relations, how might we see this mutual
> bond--this power relation between creditor and debtor--as one of host and
> parasite?  Further, what political subjects are especially at risk at being
> treated as parasites: of facing not only the strains of financial debt but
> also of being constituted as intrinsically indebted?  And finally, how does
> the discourse of parasitism index a manipulation of the ways in which, in
> an age of interdependent use and circulation, we can all in some sense be
> construed as parasites?
>
> I take Mitt Romney's remarks about the so-called "dependent" half of the
> American electorate as exemplary for how the discourse of parasitism has
> been wielded as a weapon in our political field.  Romney was, as many of
> you will recall, filmed saying that 47% of Americans "are dependent upon
> government," "believe that they are victims," and "believe that they are
> entitled to health care, to food, to housing, to you-name-it" in a video<http://thecaucus.blogs.nytimes.com/2012/09/18/mother-jones-releases-complete-video-of-romney-at-private-fund-raiser/?hp>released back in September. This "gaffe," which made the rounds as a leaked
> video put out by Mother Jones magazine, has widely been read as merely
> the rare, public articulation of the open secret of the Republican party's
> war on women and minorities.
>
> “Parasite” has long been an epithet used to designate those subjects
> deemed unwelcome or without value: those who in a culture of credit have to
> pay “rent” to live on the host’s property and are thus forced to accept an
> existence of indebtedness as the condition for their survival.  Romney’s
> remarks merely index how the discourse of parasitism (i.e. dependence,
> entitlement) has been mobilized with increasing vigor to stigmatize
> subjects said to live at the expense of another or of society in
> general—targeting women and minorities in particular (e.g.
> “resource-draining” housewives, “welfare queens,” and “illegal aliens”).
> These claims betray a contradiction at the heart of neoliberal capitalism,
> which disavows the so-called minorities on which it depends. To be sure,
> the irony of Romney’s illocution has been the subject of much discussion in
> the press.  The twisted logic of “entitlement” in his campaign has found
> its objective correlative in the relatively little tax he has himself paid
> and been evidenced by his evasiveness about releasing his financial
> records.
>
> As we might discuss, it seems to me that the Occupy movement has
> internalized and subverted this discourse of parasitism, rendering it
> tactical by espousing and performing a politics of occupation.  Protestors
> have used mass demonstrations to call for wide-scale corporate divestment,
> denouncing the absurdity of a world system that has alienated the common
> from the commons and in which the 1% has effectively marginalized, not the
> 47%, but the 99%.  They have shown the economic oppression of a ruling
> class--for which Romney is (or had he won, would have been) but a mere
> figurehead--that exploits its workers while, at the same time, calling
> them parasites.
>
> Just this past Wednesday, news broke that Romney had struck again, saying
> that Obama had essentially bought the election by giving "gifts" to
> minorities: “What the president’s campaign did was focus on certain members
> of his base coalition, give them extraordinary financial gifts from the
> government, and then work very aggressively to turn them out to vote.” This
> time it wasn’t at a $50,000-a-plate private fundraiser, as in September,
> but during a call with his campaign donors.
>
> If the classical parasite is one who flatters his patron and the
> hypocrite, a politician who appeals to the people, Romney, it seems to me,
> was twice caught playing the parasite and the hypocrite at once.  He is a
> politican who was overheard by the people flattering his patron.  I offer
> this reading to suggest that we might take note of how Romney’s own
> parasitical relationship to his donors complicates the story he tells them
> about who the real parasites are.
>
> Looking forward to a lively discussion.
>
> Anna Watkins Fisher
> Andrew W. Mellon Postdoctoral Fellow
> Cornell University, Society for the Humanities
> awf37 at cornell.edu
>
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