This is the text of a talk I gave in October 2012, “Occupy, Debt, Finance, and Class Struggle”.
I was asked to talk about Occupy, the crisis and class struggle. I work on the topic of the Occupy movement as a form of social contestation within the context of the neoliberal crisis. In this talk I want to hone in on the movement’s recent organizing projects around debt, and to connect them to theory about finance and the financial crisis. The intention of this is to clarify some questions about political strategy in the current conjuncture. This is, as you will see, somewhat experimental, so I look forward to the discussion.
1 – Crisis
Finance – Debt – Labor
There was a very interesting text a few years ago called “Labor’s Location and Power in Finance”.1 In it, the authors argued that labor was responsible for the crisis. If I hadn’t known what the source was, I would have simply written it off as another expression of the verbal class war from above, with the usual statements about “living beyond our means.” But the argument was quite interesting. The authors argued that labor was in fact at the center of the crisis. They didn’t do this in a romanticized way, of imagining the incredible power of autonomous workers’ struggles, but rather in pointing out how the failure and weakness of labor produced the global economic crisis. How?
Well, if you look at the subprime mortgage crisis in the U.S., you know that it emerged as a result of a foreclosure wave, of increasing numbers of people unable to service their mortgage debt. This wasn’t simply the result of predatory lending (that’s another story), but of a three-decade long decline in wages. The mortgages were however turned into financial products, combined with other ones, and sold to global investors. These products were/are the frontier of investment and capital accumulation, in face of falling rates of profit from investment in production.
The source of incomes for these investors came from the mortgage payments. The default wave destroyed the value of these products. Their wide dispersal throughout the global economy, and the breadth of the foreclosure wave, caused major mortgage lenders, financial firms and insurance companies into bankruptcy, or they were rescued through state stimulus packages. This is not new information. But it is important to consider in relation to the questions of social power, leverage or social struggles today.
The new perspective that the text brought out was the role of labor in the crisis, and with it, the power of labor within it. They write, “History now shows that labour as an asset class – an asset class for capital expansion, that is – was not well risk-managed by capital or the state.” In other words, the incapacity for labor to reproduce itself – to service its mortgage debt – halted the capacity for capital to reproduce itself and expand.
Therefore, the authors want to point to the power of labor in finance. They make a parallel argument here with the power of labor in production, saying: “Just as the worker cannot be separated from their labour power – part of what constitutes labour as a distinctive and critical input into production – so the worker cannot be separated from the risks attached to their loan payments. With this inseparability comes political capacity. Unlike all other inputs into production or forms of asset, labour expresses the capacity to resist inside production and inside finance. Capital’s vulnerability to labour in production is also its vulnerability to labour in finance.”
So, for me, this raises a question: What does this relationship of interdependence between capital and labor in finance-dominated capitalism mean for strategies of capital and the state? And what does it mean from the position of the laborers and the indebted? I will return to this question at the end of this talk. Next, I want to discuss Occupy.
2 – Occupy and Debt
Now I want to talk about Occupy. But I will limit my focus to the topic of debt. Many participants ofthe movement, and of those playing leadership roles – and this is the case from Tunisia, Egypt, London, Israel, Quebec, and elsewhere – are the “graduates without a future” (Paul Mason). They are those masses of young people with college degrees and no chance of landing a job. In the U.S., this situation is intensified in a particular way because of student debt. The average student debtor owes $25,000. In 2010, 360,000 graduates were accepting public provisions.2 This is the dominant profile of the Occupier across the country and beyond.
If you look at the wide resonance the movement has beyond this group, you find victims of the mortgage crisis, who ask the Occupy Our Homes campaign to physically camp out in front of their homes to block their eviction. Yes, massive civil disobedience, though not so widespread as in Spain, nor in the U.S. during the Great Depression.
Other people who, as seen on the social media site http://wearethe99percent.tumblr.com, declare themselves part of the “99%” are people with enormous credit card debt, often the result of healthcare bills. This has a disproportionate impact on women and people of color.
To make it simple, the Occupy movement has to be understood in terms of these particular material crises, crises of basic material reproduction. It is therefore not a surprise that the first phase of the movement sought at least symbolically to reclaim the commons. No surprise that the general assemblies, planned by anarchist veterans of the anti-globalization movement, took the form of “coming out parties” for those in material distress, to find one another, to create bonds of solidarity and a collective identity. The assemblies acted as “consciousness raising” sessions. This was visible not just in the plazas but across social media. With the fragmentation of labor, the disappearance of the factory, where are the spaces for conversation about common material conditions and their decline, and the spaces for collective organizing and political strategizing? Fragmented and indebted labor needed/needs to create these spaces, to identify what their points of leverage even are.
It was also no surprise that the movement moved into community and labor struggles following the evictions of the squares, building bonds with unions and community groups fighting on the frontlines of the crisis. It is also no surprise that the democratic and communal-ist elements of the movement haven’t been seriously developed beyond the encampments. There was no clear attempt to think beyond the squares towards an “expansive politics of the commons” (Jodi Dean and Marco Deseriis).3 And the democracy of the squares was strongly limited by those who confined their focus to consensus-based small group processes or horizontal network structures for participation between groups. Don’t get me wrong. This was and is very important. The deficit was however in the lack of attention to how radical democracy and communal-ism could be developed as strategies for societal transformation.
The main challenge now seems to be to avoid fragmentation, to deepen involvement in particular struggles but to maintain a broad and common framework and to build a collective structure for coordination. That is where the topic of debt might come back in, so I will conclude with the Occupy Student Debt Campaign and the Strike Debt! Group that grew out of the New York City Occupy movement, and then to the topic of class struggle.
3 – Occupy, Debt and Class Struggle
Inspired by the Quebec student protests earlier this year, which fought off tuition hikes, under the slogan “We are all in the red!” (meaning, we are all in debt), New York-based debt organizing groups are on the move. First, it was the Occupy Student Debt Campaign, but now it is the effort to organize around debt in all forms. Their position: “Debt is the tie that binds the 99%”. They want to organize a debtors union and plan targeted strikes against particular creditors. They recently released a manual on the topic. They are holding public assemblies to discuss personal experiences with debt, debt as a structural issue, and how to organize around it.
At least when I read what David Graeber wrote in the last few months on the topic – a leading intellectual and activist of this milieu – I see that his position approximates the one I discussed at the beginning of this talk. In his “After the Jubilee“, He focuses on the close connection between the crisis of capital and that of labor. He recognizes the interdependent relationship between labor and capital, today through the structure of finance. From this angle, you could say the Strike Debt! Group implicitly recognizes that debt is not only the “tie that binds the 99%”, but also and in a different way, the tie that binds the “99%” to the “1%”. And this means a degree of leverage for laborers as debtors.
Graeber explains that the topic of a jubilee, of debt cancellation is not just a left-wing fantasy. It is actually being spoken about within the Federal Reserve Bank, to which he was personally invited to for a visit and conversation. That is, debt cancellation or modification is being spoken of not only amongst Occupy activists but within the hegemonic bloc itself. Graeber argues, and is probably somewhat correct, that some kind of debt cancellation is coming, and is necessary to save capitalism from deepened crisis.
In fact, the Fed is pushing Washington to pass massive mortgage cancellation and modification, and there are others in the business news columns arguing for student debt cancellation as the only way to save the system.
The critical question is, how much will be canceled and for whom? There is struggle over precisely this issue and it can be understood as class struggle.
Though I don’t have time to elaborate too much on this topic, I want to nonetheless sketch the argument, therefore connection the three threads running through this talk: debt, occupy/class struggle, and finance-dominated capitalism.
It has been argued that the crisis we are now experiencing leads to a struggle to determine whose capital will be destroyed. The political result the emergence of a new “government technology that is implemented in order to destroy capital strategically.”4 (We see this most clearly in Greece, where private pensioners, amongst others, fight it out with foreign investors.) If this is the case, the “future of political struggles” will be determined by this reality: “It will be a matter of determining who decides which money capital is destroyed in what ways: inflation, small savings, assets for the rich, speculation against developing countries”.
So, is this the question?: “Whose capital is going to be destroyed? Or, in the words of Strike Debt!: Whose debt is going to be abolished?
Now, in terms of political strategy, a debtors union5, promoted by the Strike Debt! Group, is not in itself sufficient to shift the losses onto the capitalists. It is not sufficient to shift power relations in order to force this political compromise. But it begins to think about the place of labor in the current configuration, and how the Occupy movement might harness its power for political gain. If that’s the question that spreads within the movement – and it is not only Strike Debt! Pushing this topic, there are also groups in other parts of the country, especially in California – then it will be an interesting path ahead, if the movement can keep up the momentum, and not recede into a single-issue campaign.
1Bryan and Rafferty, “Deriving Capital’s (and Labour’s) Future” in The Crisis This Time: Socialist Register 2011: 215-218.
4See Alex Demirovic, “Postneoliberalism and Postfordism – Is there a new period in the capitalist mode of production?” in Development Dialogue Jan 2009: 56.