[-empyre-] Debt Culture--types of debt

[Brian Holmes]

Annie, this is a good discussion and I'd be curious to read what you've 
already written on these topics. Are there some articles?

 > credit in
 > the current system plays the role of crisis manager (i.e. securitized
 > credit and the whole apparatus of financialization was deployed to
 > resolve intractable crises in industrial profitability) /but can only
 > play that role for so long/.

Well, I'm not so sure. Richard Duncan's whole point is that we have not 
been operating with "sound money" for the last forty years. Instead, 
fiat money created by the state has driven the whole vast machinery of 
globalization, the cabling of the world, the industrialization of Asia, 
the modernization of resource extraction in the Middle East, Latin 
America and Africa -- a gigantic capital expansion all told. Elites in 
the US adopted the strategy of the knowledge-based economy in the belief 
that they could manage all that very profitably, and to solve the 
lingering territorial problem -- that is, to provide for the consumption 
of the population and to continue profiting from that consumption -- 
they came up with the predatory solution of bank credit. For sure, the 
pyramid of credit is built on the idea that individual debtors will pay. 
When they don't, with $14.5 trillion of US mortgage debt outstanding in 
2008, then there is a crisis. But look what happens when people can't 
pay the banks: the Fed bails out the financial system (not the 
individuals), while asset prices (homes in particular) lose value and 
start to look worth buying again. Meanwhile Treasury bonds are still 
sold in record numbers and at very low yields, because none of the other 
state-capitalist regimes wants to see what happens when the house of 
cards actually falls. This has been going on since the summer of 2007 
when the banking crisis started. Now that the European Central Bank has 
started bailing out the Eurozone with its own freshly created fiat 
money, it seems like it could go on for quite a while longer. In a 
heavily industrialized world where there is a tremendous amount of 
productivity -- too much, in fact -- the mobilizing and organizing power 
of this illusion or "schein" called credit is very great.

All that said, we're still in a crisis. Institutions, among them the 
university system, are changing before our eyes. A crisis is a period of 
chaotic change where the outcome remains uncertain. There are 
undoubtedly new and dramatic episodes to come. I reckon the 
interstate-capital nexus will eventually find some solution that does 
not involve either a return to the discipline of "sound money" (gold, in 
short) or a collapse into rival blocs -- because the consequences of 
*that* were made all too clear to everyone by WWII. The question is 
which solution, and what kind of "new deal" for the people on the 
ground? The US emerged from the crisis of the 70s through Reagan's 
debt-financed military build-up, which led on to the tech boom and 
financialization. That solution has been disastrous. Souldn't we push 
for something much better today?

 > Might it not be the
 > case that we have knowledge and understanding in abundance, as the
 > financialization of everyday life turns us all into organic
 > intellectuals of a kind? In other words, I guess I'm saying that the
 > current crisis in capitalism is happening without us having to do much
 > to make it happen (i.e. it's a structural/systemic crisis) but it's also
 > a moment in which capital tends not to hide its face (i.e.  we actually
 > do already understand this system, in much of its complexity, because it
 > doesn't bother much anymore to make itself invisible--or to hide, for
 > instance, it's reliance on the state, whether by "state" we mean the
 > federal reserve or the cops who will come to evict you if you don't pay
 > your mortgage to the bank).

I think that's right, it's what makes this period so interesting. As a 
formerly middle-class person you now have to deal directly with kinds of 
violence that were formerly held at a distance by prosperity. Yet the 
system reacts to these crises, that's been its whole dynamic since the 
1930s. The study of earlier crises shows that great efforts will always 
be made to reintegrate the future middle managers. Exactly such a 
process of reintegration is what led to the neoliberal social consensus 
-- or hypocrisy -- which "tolerates" all kinds of horrible things. Well, 
now that consensus is finally breaking down and there is critique and 
unrest at every level of society. I think it's worth trying to subvert 
and transform the educational system before a new formula of crisis 
management is found, one that will pay relatively large numbers of 
people well enough to manage a society with yet greater levels of gross 
inequality, including unequal exposure to climate change. Because that's 
what we're headed for if nothing is done.

Of course, transformative influences can also come from other sectors of 
society, and I don't think it's really possible to become a force of 
change without getting out of your own skin and engaging in both direct 
action and cross-class solidarity. Yet there is a tendency for educated 
people to believe that the change must come from the other classes, from 
some raw revolutionary force of the dispossessed. That idea seems 
dubious to me in such a complex world, where both scientific and 
cultural knowledge translate so readily into power. I think that going 
beyond awareness of the system's ills, and towards an actual shift in 
the way society is articulated, would require taking over the existing 
institutions -- the ones we work in, however precariously -- and 
repurposing them. Otherwise I'm afraid there are always organizational 
and technological solutions for unrest. That is, if the middle managers 
who are charged with implementing those solutions can continue to 
"tolerate" them.

let's not, Brian