Thinking About the Economy: Debt Forgiveness

I never managed to finish David Graeber’s Debt: The First 5,000 Years. First, I don’t enjoy the attempt to grab onto a single concept and use it to explain absolutely everything in the world. Debt is a rich topic of research as it is and I see no need to try to create some sort of a grand narrative du jour out of it. I thought we were past grand narratives anyway.

Another problem I had with the book is that it is obsessed with proving that there were matters on which Adam Smith was wrong. I don’t know whether it’s a regular thing to do among economists to argue so passionately about a theory created in the XVIIIth century. I mean, the guy’s been dead for a very long time, so how is it a big breakthrough to assume that he was wrong on occasion? I can’t imagine publishing a book in my discipline arguing earnestly that Francisco Mariano Nipho, an XVIIIth century literary critic, was not entirely right. Well, duh. This would make me look like one of those weirdos who claim that psychoanalysis is useless because Freud fucked up often enough. As if nothing happened in the discipline since then.

The main reason that I disliked Graeber’s book, however, was that it became pretty obvious quite soon that the guy had an agenda that he tried to sneak past his readers in a very inelegant way. In his recent article “Can Debt Spark a Revolution?” published in The Nation*, Graeber proves that I was right from the start. His hope for the future is debt forgiveness:

 A debt jubilee, after all, affords the possibility not just of economic renewal, but of intellectual and spiritual renewal as well.

There is, of course, absolutely no proof that any spiritual or intellectual renewal will come from debt forgiveness. Evidence to the contrary, however, abounds. Graeber admits that a form of debt forgiveness has already been put in place when the taxpayers saved the failing companies from imminent ruin. So have the banks and companies we bailed out been spiritually or intellectually renewed? Obviously not. To the contrary, they pursued the same practices that led them into trouble with even greater abandon than before. They messed up, saw that there were no consequences attached to messing up, and continued doing exactly what they were doing before. There is no doubt in my mind that any further attempts at debt forgiveness will very soon lead to even greater portions of the population being even more indebted than they are today.

Graeber demonstrates exactly why the #Occupy protests have failed so miserably when he says the following:

Occupy was right to resist the temptation to issue concrete demands. But if I were to frame a demand today, it would be for as broad a cancellation of debt as possible, followed by a mass reduction of working hours—say to a five-hour workday or a guaranteed five-month vacation.

Here the article ends without any explanation of who will pay for these five-month vacations or forgiven debts, mortgages, auto loans, etc. The Treasury? Well, we all know it’s empty and up to its non-existent ears in debt. Of course, everybody wants a guaranteed five-month vacation and no debt. As well as world peace and wonderful weather all the time. But what’s the use of engaging in these silly fantasies if you are not ready at least to begin considering how they could be made reality?

* You have to be a subscriber to access the article.

Protester, Where Art Thou?

We all remember how the anonymous protester was declared the person of the year. Today, however, we can see that the wave of protests that was witnessed by a variety of Western societies recently fizzled out without achieving anything of value.

The Spanish Indignados brought the Conservative Partido Popular to power and will now see their country subjected to a massive dose of PP’s austerity measures.

The Russian protest didn’t do any damage to Putin’s regime and has now turned to clownish support of the useless Pussy Riot.

The #Occupy protests in the US haven’t managed to become any sort of a force to be counted with in the current US elections. Just as many people support the party of the 1% as would have done had these protests never happened. If you don;t believe me, look at the stats for the 2008 elections and compare them to the 2012 presidential race.

So what can we conclude from all this?

First of all, that protests whose only platform is “let everything be good and nothing be bad” will never achieve any lasting change.

Second, street protests are useless. As I’ve been saying this entire time, if you want change these days, don’t go into the streets. Go to the Internet. Social networks and blogs have managed to do a lot more in the past year than all these street hullabaloos combined and multiplied by eleven. And you know why that happened? Simply because when you gather for a street protest, you don’t face the need to articulate any actual message. All you have to do is come up with a short meaningless slogan like “Greed = bad, compassion = good.” Online, however, you are forced to verbalize your grievances and list your demands. The streets are a great place to chant and to moo, but try doing that on a blog, a website, or even on  your Facebook page. You will lose all readership within days. Hell, even Twitter requires a greater capacity to articulate your thoughts than any street protest.

In the end, street protests nowadays are counter-productive because they allow people to let off steam, feel better about things, and return home prepared to accept much worse things than the ones they originally gathered to protest. It is not surprising that the protests in both Russia and Spain culminated in producing much more oppressive regimes than the ones the street protesters denounced. I only hope that we don’t end up in the same situation here in the US.