Like many others, I got involved in Occupy because of student debt. For several years, I was a graduate student researching first-generation collegians at the same that I worked as an administrator on a campus where most students relied on loans. One day, it hit me. I am an indebted graduate student researching student indebtedness at the same time that I am earning a salary financed by the debt being accumulated by those same students. As I began to unravel the web, I realized that student debt is only part of the equation. From predatory mortgage loans resulting in foreclosed homes to public service cuts rammed through to please municipal bondholders, debt affects us all. Many occupiers have also come to the conclusion that debt is a tool used by the 1% to extract wealth from the 99%. This assessment is now a major theme of Occupy and the growing Strike Debt initiative, which is developing long-term strategies to challenge the debt system.
The rich are afraid because they know that someday all of this," he gestured around us, "is going to end.
What is the debt system exactly? First, it is a concrete circumstance in which an individual owes money to another individual or entity. But debt is also abstract, an existential indebtedness that may or may not be tied to a monetary debt. It's the profound sense of obligation that many children feel towards their parents, or the gratitude a student feels towards a favorite teacher. It's also the deep commitment many of us have to our communities, to the world, and to the generations of people who will come after us. When it comes to debt, one cannot always separate the concrete from the abstract, which means that monetary debts can feel like moral obligations. Most debtors truly want to pay what they owe, and many people organize their lives around that goal. An economic system that revolves around debt affects, in particular ways, how people think about, act on, and perceive the world.
The social impact of debt is significant because, in the last forty years, economic elites have achieved nothing less than the restoration of a new Gilded Age. The vast majority of wealth flows to a small percentage of people at the top of the economic hierarchy. This siphoning of wealth from the many to the few did not happen accidentally. It was organized by business leaders and politicians to protect, not just profits, but capitalism itself.
In 1971, Lewis Powell was a corporate lawyer about to be nominated to the Supreme Court by Richard Nixon. He wrote a memo to the US Chamber of Commerce that marked the beginning of an era of unprecedented policy engagement by corporate America. Powell's memo was an early salvo in the effort to cast corporate chiefs as benevolent job creators who have a duty to cultivate and wield political power in order to challenge labor unions, social justice organizations, and (Powell's particular bugaboo) liberal college professors. His memo, entitled "Attack on the American Free Enterprise System," argues that business leaders must focus on more than just profits. "If our system is to survive," Powell wrote, "top management must be equally concerned with protecting and preserving the system itself."
That idea that capitalism must be vigorously protected from demands from below was taken up a few years later by a group of international business and political leaders. In 1975, the Trilateral Commission, which was founded by David Rockefeller, issued a report entitled "The Crisis of Democracy." The report argued that popular movements, or what the authors called "an excess of democracy," must be reined in to secure the survival of global capitalism. They recommended "some measure of [political] apathy and noninvolvement on the part of some individuals and groups." There are only two choices in the brand of democracy envisioned by the Trilateral Commission: stand with global capitalists in their quest to spread free-market ideology and capture wealth from every corner of the globe – or do nothing.
Powell and the Trilateral Commission were not explicitly recommending the creation of a debt system, nor were they advocating for debt as a means of social control. They were more interested in profits and in ensuring the expansion of capitalism. Their efforts mark the beginning of more aggressive tactics on the part of business leaders to tilt the game back in their favor after the gains of the civil rights movement. One outcome of greater wealth in the hands of a few was that more people had to take on debt to pay for basic services such as health care and education. In turn, higher levels of indebtedness have made it much easier for the 1% to profit from, and defend, the capitalist debt system.
The cycle of debt may be a side effect of lopsided political and economic power, not necessarily its end goal. Yet, the social effects of mass indebtedness are well known. The idea began percolating more than a century ago, fittingly, in the home mortgage market. The 19th century Sociologist Edward Ross stated that home ownership was a "prophylactic against mob mind." This is one reason industrial magnate, Andrew Carnegie, began providing home loans to steelworkers after a strike in 1892. The birth of the home mortgage market provided for the expansion of capitalism through debt. It also helped keep workers in line. As housing reformer Charles Whitaker noted, "[homeowners] won't leave, and they won't strike."
Social outcomes of the debt system are often perceived as evidence of individual preference. Many students report that their anxiety about being able to pay off their debts informs everything from career choice to whether to enroll in college at all. And research by Jesse Rothstein shows that indebted graduates are much more likely to forego public interest work in favor of careers that are more profitable. How many people would enter professions such as teaching or other public service fields if their choice did not mean a life of indenture? All of these life decision are easily framed as individual acts, isolated from social circumstances.
People feel the impact of debt on their most personal choices. Studies show that debtors are more likely to delay or forego marriage and children. Relationships are upended and dreams are delayed or deferred because debt reduces people's lives to the brute calculation of the monthly chit. From there, the political ramifications are obvious. "Once indebted," the scholar Tayyab Mahmud wrote, "debtors become subjected to normalization by debt and are less likely to claim nonconformist views, or indulge in nonconformist conduct." As a synonym for "guilt" and "sin," debt is internalized social struggle. It is a collective experience of domination rendered as individual failure, often resulting in, if not apathy, a feeling of powerlessness in the face of inevitability. In this way, the expansion of the debt system effectively forestalls its own critique.
So what can we do? How can we fight back as individuals and challenge debt as a system, especially when we're all affected by debt? This question represents a productive tension within Occupy and Strike Debt. It also further illuminates the dialectics of debt that have haunted me since I was earning a salary financed by student debt while researching and writing about students in debt. It may be that the solution is part of the crisis. As Richard Dienst wrote, "perhaps indebtedness can be a kind of revolt in itself, capable of filling the prevailing order with unrealized demands until it reaches a breaking point."
Pushing unrealized demands to the breaking point requires a long-term campaign of debt refusal followed by a mass cancellation of debts. This strategy is not without potential dangers. Debts owed by the 1% are cancelled all the time. Just ask AIG. That is why a debt jubilee must be carefully crafted as a means to ensure democratic authority over the money and credit systems, not just as a way to promote business as usual. By deciding, together, which debts must be honored and how credit markets based on trust and mutual aid might function, we reclaim democracy and equal access to common resources.
The 1% is terrified at the prospect of the 99% beginning to refuse unjust debts. To others, the contradictions of capitalism are obvious. Recently, I worked as a secretary for a billion-dollar corporation housed in a luxury Manhattan high rise. The professional staff was serviced daily by a small army of low-wage busboys, cooks, and janitors. One day, I struck up a conversation with one of these workers about office culture and about some of the tensions I saw there between the corporate 1% and everybody else.
"There is tension in the air because the rich guys here are afraid of….what is that Wall Street group?" he asked.
I answered, "You mean Occupy Wall Street?"
He nodded and smiled. "The rich are afraid because they know that someday all of this," he gestured around us, "is going to end."