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At the moment, probably the most pressing need is simply to slow down the engines of productivity. This might seem a strange thing to say—our knee-jerk reaction to every crisis is to assume the solution is for everyone to work even more, though of course, this kind of reaction is really precisely the problem—but if you consider the overall state of the world, the conclusion becomes obvious. We seem to be facing two insoluble problems. On the one hand, we have witnessed an endless series of global debt crises, which have grown only more and more severe since the seventies, to the point where the overall burden of debt—sovereign, municipal, corporate, personal—is obviously unsustainable. On the other, we have an ecological crisis, a galloping process of climate change that is threatening to throw the entire planet into drought, floods, chaos, starvation, and war. The two might seem unrelated. But ultimately they are the same. What is debt, after all, but the promise of future productivity? Saying that global debt levels keep rising is simply another way of saying that, as a collectivity, human beings are promising each other to produce an even greater volume of goods and services in the future than they are creating now. But even current levels are clearly unsustainable. They are precisely what’s destroying the planet, at an ever-increasing pace.

A Practical Utopian’s Guide to the Coming Collapse

(via bostonreview)

I haven’t had a chance to read this essay yet, but it’s been so long since I’ve posted a David Graeber quote.

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Posted at 4:09pm
Reblogged (Quote reblogged from bostonreview)
Tagged david graeber debt

 


Debilitating medical and student debt are the result of a market approach to medicine and education. So if Strike Debt grows, we could see demands for free healthcare and free universities. Once people stop thinking of banks as entitled to interest and fees, then we may also decide as a society that public sector workers, pensions and basic infrastructures are more important than playing the bankers’ game.
Jodi Dean, in a discussion on Occupy Strike Debt with Mike Konczal, Pam Brown, and Peter Rugh for In These Times.


In April, the [Federal Housing Finance A]gency said that loan forgiveness would save about $1.7 billion for the companies, relative to other types of relief. At the time, the agency said that because the Treasury was paying to subsidize those write-downs, the relief would still cost taxpayers $2.1 billion, offsetting any savings to the companies.

But the latest analysis done by the agency found that such write-downs would generate $3.6 billion in savings for the companies, under certain assumptions, according to people familiar with the analysis. Even after subtracting the cost of the Treasury subsidies, the program would save $1 billion, these people said. As many as 500,000 borrowers could be eligible, these people said.

Nick Timiraos at the Wall Street Journal. Basically, the FHFA, which oversees Fannie Mae and Freddie Mac, is considering allowing write-downs for mortgages that Fannie and Freddie hold. Apparently, their latest analysis is that reducing the principal for some underwater mortgages will actually save the government money. Four years into the housing bubble’s crash, and we’re looking at the possibility of relief for 500,000 of the 11 million underwater mortgages in the country. But it’s a start at moving away from a system where the debts of the poor to the rich are treated as sacrosanct, while the capitalist class can always renegotiate their debts. Anything that gets thinking that debts actually can simply be forgiven.

(h/t: Jared Bernstein)



Crucially, in the dot-com bust there weren’t the same moral and political arguments that we see in the current one. Economists who demand to know why U.S. mortgages don’t stay with people who walk away from their homes didn’t demand to know why the equity holders of Pets.com didn’t have to dip into their personal savings to pay off the losses creditors took. Very Serious People wonder if debtors’ prisons are necessary for homeowners who would walk away from a mortgage or view bankruptcy as an exit strategy, yet no Very Serious People called for the mass imprisonment of Webvan or Flooz shareholders after those firms declared bankruptcy as an exit strategy. Nobody argues that the shareholders of the dot-com era received a gigantic government bailout through the law when they were not personally on the hook for sticking creditors with an 83.4 percent average loss. Meanwhile, efforts to allow for a cleaner way of allocating the housing bubble losses, from retaining value of the household through bankruptcy reform to local municipalities taking action through eminent domain, face a minefield of political and financial industry opposition that gives the impression that the banks “own the place.”
Mike Konczal, contrasting the debts of the rich investors in the Dot-Com Bubble with the debts of middle and working class homeowners in the Housing Bubble. Amazingly, when the debt is between members of the capitalist class, they can find a way to work something out. When it is a debt that the rest of proles owe to them, the debt is treated, both morally and legally, as a sacred obligation that must be repaid no matter what.




bostonreview:

Cage match: Harvey vs. Graeber. Read our recent interviews with both gentlemen.

It’s like a whole bunch of the things I always talk about on my blog all together.



I blogged about this video ages ago because I’m a bit of a linguistics nerd, and a fan of Steven Pinker on linguistic and cognitive science issues (let’s not get into his problematic views on evolutionary psychology and the like). He describes three “relationship types” common to people across all cultures (you can jump to 3:35 to get to the start of that part): Dominance, Communality, and Reciprocity. Mostly, he’s concerned with how we use different verbal strategies, such as politeness, to navigate between these relationship types.

A few months after posting this, I was reading David Graeber’s Debt: The First 5,000 Years, and noticed that he seemed to be talking about much the same thing. In chapter 5, “A Brief Treatise on the Moral Grounds of Economic Relations” he sketches out an anthropological framework that consists of “three main moral principles on which economic relations can be founded:” Communism, Exchange, and Hierarchy.

Communism, by which Graeber means “any human relationship that operates on the principles of ‘from each according to their abilities, to each according to their needs,’” is simply a more economic-focused way of describing what Pinker calls communality. Dominance, of course, implies the existence of its opposite, submission, which together are hierarchy. The fit between Pinker’s reciprocity and Graeber’s exchange isn’t quite as perfect, but they do seem to be talking about much the same thing.

I find Graeber’s way of describing it more useful to applying these ideas to other aspects of life, politics, economics, etc. But this video’s useful to get the basic idea for those who haven’t read his book. Mainly, I’m putting this here so I can refer back to this basic framework when discussing things where I find it relevant.



I once put out the idea that the best way to think about anarchism is as a combination of three levels. On the one hand, the sort of instinctual revulsion against forms of inequality in power; on the other hand, a reappraisal of what one is already doing in egalitarian relations; and then the projection of these principles on all sorts of relations. So those three moves making what you’re already doing self-conscious and trying to take those principles and project them to all sorts of relations… But that’s what I’m trying to do in the book and I hadn’t really thought of it until I just said that—when I say that what we’re already doing is communism. The first step we have to make is to realize that we’re already closer to it than we think. We don’t live in a capitalist totality. Capitalism couldn’t survive as a totality anyway. We live in this complex system and we already live communism and anarchism in a million forms everyday.

David Graeber, in an interview with Rebecca Solnit in Guernica. If you haven’t read Debt: The First 5,000 Years yet, this is a pretty good discussion to see how Graeber’s argument gets from anthropology at the beginning to political criticism at the end. They manage to touch on a number of the themes that he’s written about in various places.

(h/t: Aaron Bady’s weekly roundup of amazing links)



OK, this graph involves a bit of long-winded explanation. It’s from a new paper (PDF) by Josh Mason and Arjun Jayadev on household debt. As is common knowledge, household debt in the US has increased dramatically over the last few decades. That’s the black line in the chart.

The natural assumption would be that Americans have been borrowing substantially more than they had been previously. After all, more borrowing causes more debt, right? Mason and Jayadev decided to look into this assumption. They used the standard formula for government debt, which takes into account the interest rate, GDP growth, and inflation, and calculate what the chart would look like if those factors over the period since 1981 were the same as they had been over the three decades before 1981. That’s the red line on the chart.

In short, the borrowing decisions made by the American people since 1981 would have led to a decrease in household debt as a portion of GDP if the other economic conditions driving the debt had stayed constant. Basically, we didn’t go on a massive borrowing binge. We just had a shittier economy. Which means we probably aren’t going to be able to get out of the mess by decreasing our borrowing. We’re going to need to get back to robust GDP growth.

For those interested in more detail, here’s a bit more of an explanation from Josh Mason. It’s got a bunch of the math that I glossed over.





David Graeber’s Debt: My First 5,000 Words

Aaron Brady, who’s done some great blogging about Occupy Oakland at zunguzunguzungu.com, just started blogging for The New Inquiry. And his first post there is a nice big review of David Graeber’s Debt: The First 5,000 Years. Which I keep telling everyone to read. But if a 300+ page book is a bit much to ask, this review lays out the essentials of Graeber’s arguments quite nicely.


thenewinquiry:

In the final lines of his introduction to Debt: The First 5,000 Years, David Graeber writes that “[f]or a very long time, the intellectual consensus has been that we can no longer ask Great Questions.” And as he put it in a guest post over at Savage Minds:

The aim of the book was to write the sort of book people don’t write any more: a big book, asking big questions, meant to be read widely and spark public debate…[T]he credit crisis —and near collapse of the global economy in 2008—afforded the perfect opportunity. In the wake of the disaster, it was as if suddenly, everyone wanted to start asking big questions again. Even The Economist, that bastion of neoliberal orthodoxy, was running cover headlines like “Capitalism: Was It A Good Idea?” (my italics)

Debt is a “big book,” in other words, because he wants to re-open a set of questions that had come to seem closed “for a very long time,” the questions of “what human beings and human society are or could be like—what we actually do owe each other, what it even means to ask that question.”

To be more specific, Graeber’s starting point is the Grand neoliberal orthodoxy that regards Debt as the worst possible thing, the argument, for example, that austerity measures likean end to state subsidies of public libraries in California are preferable to the moral crisis of going (deeper) into debt. This has been a bipartisan consensus that dominated the Anglo-American political and media discourse up to somewhere around the beginning of Occupy Wall Street, and which still dominates – perhaps a little more quietly, now – our political class’s actions. It may not be desirable to cut pensions or eliminate what used to be essential social services – goes the argument – but it’s better than going into debt.

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As you might guess, the Liberty Fund is the sort of libertarian organization that has to remind you constantly that they love “liberty” and “freedom,” because they’re afraid that you’ll notice that their vision of “liberty” is basically just privatized class oppression. In any event, the sort of freedom that the Sumerian term amagi or amargi originally referred to wasn’t exactly “liberty” in the Hayekian sense of the word, but, well, let’s quote David Graeber in Debt: The First 5,000 Years, just because I love any excuse to do so:

Usury—in the sense of interest-bearing consumer loans—was also well established by Enmetena’s time. The king ultimately had his war and won it, and two years later, fresh off victory, he was forced to publish another edict: this one a general debt cancellation within his kingdom. As he later boasted, “he instituted freedom (amargi) in Lagash. He restored the child to its mother, and the mother to her child; he cancelled all interest due.” This was, in fact, the very first such declaration we have on record—and the first time in history that the word “freedom” appears in a political document.

Yup, that’s freedom. The god-king releasing the oppressed from the debt-peonage they entered into with private bankers. The ancient Sumerians understood the inherent coercion in market transactions; the modern libertarian looks directly at it and refuses to see it.
(h/t: Yasha Levine at The Exiled, complete with pictures of idiot libertarians with their amargi tattoos and a different David Graeber citation.)

As you might guess, the Liberty Fund is the sort of libertarian organization that has to remind you constantly that they love “liberty” and “freedom,” because they’re afraid that you’ll notice that their vision of “liberty” is basically just privatized class oppression. In any event, the sort of freedom that the Sumerian term amagi or amargi originally referred to wasn’t exactly “liberty” in the Hayekian sense of the word, but, well, let’s quote David Graeber in Debt: The First 5,000 Years, just because I love any excuse to do so:

Usury—in the sense of interest-bearing consumer loans—was also well established by Enmetena’s time. The king ultimately had his war and won it, and two years later, fresh off victory, he was forced to publish another edict: this one a general debt cancellation within his kingdom. As he later boasted, “he instituted freedom (amargi) in Lagash. He restored the child to its mother, and the mother to her child; he cancelled all interest due.” This was, in fact, the very first such declaration we have on record—and the first time in history that the word “freedom” appears in a political document.

Yup, that’s freedom. The god-king releasing the oppressed from the debt-peonage they entered into with private bankers. The ancient Sumerians understood the inherent coercion in market transactions; the modern libertarian looks directly at it and refuses to see it.

(h/t: Yasha Levine at The Exiled, complete with pictures of idiot libertarians with their amargi tattoos and a different David Graeber citation.)