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Occupy debt

Can buying up the crisis' bad credit and chucking it away really liberate us from debt?

For something that started as a discussion group less than a year ago, Rolling Jubilee has made a big impact. The initiative by Strike Debt has raised $595,446, enough to abolish $11,909,078 of debt. Its organisers hope their success can spark a debtors' movement to challenge America's corporate elite. But does their model of consumer activism really help that goal?

“Since the beginning the aim has been twofold,” explained Sandra P, a member of Rolling Jubilee's team. “Firstly, to change the conversation around debt. Rather than seeing debt as a personal problem and a personal failure, it becomes a structural problem and an issue of social justice. Secondly, it should build towards something that would be a debt resistance movement.” 

The Jubilee works by collecting donations to buy distressed personal debt (money that banks have given up trying to collect) at discount on the secondary debt market. Instead of allowing it to fall into the hands of unscrupulous debt collectors, the group steps in, buys the debt and writes it off. Those who have had their outstanding loans cleared are then encouraged to donate to keep it moving.  

Debt is the agenda-setting issue of contemporary politics. America and Britain's fortunes pivot on public, corporate and personal debt and that opens up new possibilities for activists. It is worth remembering that a time when working class America could not seem more marginalised from the country's wealthy core, it was actually their inability to repay debt that froze global capitalism in 2008.

Charity is a vertical relation that leaves the recipients in the role of victims whereas mutual aid is a horizontal relation based on trust, cooperation and mutual empowerment

Most activists are clear about the problems debt causes. If people must take loans to pay for education, healthcare and basic needs, it leaves them perpetually insecure. Yet what many critics struggle to articulate is just how pivotal debt makes the mass population to the workings of the economy. In the way the assembly line made explicit the importance of labour power to economic success – and in doing so empowered labour unions – so the chain of financial relations emphasises the importance of debtors. Movements based upon debt are enormously potent as a result. 

It raises the question of whether Rolling Jubilee's 'people's bailout' is really radical enough. While it shows the potential that mass consumer movements hold, it reinforces the idea of the 99% as the victims – rather than wealth creators - of capitalism. Instead of challenging the top-down power exercised through credit and debt, it risks reinforcing it. After all, isn't buying distressed debt from the banks that issued these loans the equivalent of paying a thief to return the belongings they stole from you? 

“There is a misconception about this project,” argues Sandra P. “RJ is not a political movement in itself and it was never meant to be one. RJ is about mutual aid, not charity. Charity is a vertical relation that leaves the recipients in the role of victims whereas mutual aid is a horizontal relation based on trust, cooperation and mutual empowerment. It needs to be considered within the larger work of Strike Debt, where it is but one out of several strategies that we are using to strike at the debt system. What we want to do is spur conversations around the issue of debt.”

It that sense Rolling Jubilee is a success. Building any kind of debt movement relies on shifting the idea of debt from personal finance to broader political economy. And by raising the profile and common interests of debtors, it helps tackle the deep-seated view that people have ultimate individual responsibility for their own finances.

But building political identity takes more than clever framing and an expose of immoral financiers; it needs political economic weight. The 'working class' identity was most significant when it was supported by labour unions who knew they represented an economic factor upon which capitalism rested. A debtors-based politics needs something similar.

To become deeper, Strike Debt has to move beyond consumption-led ideas of political participation and recognise the financially productive power of debtors. It may seem antithetical to those demanding a move away from finance, but modern financial tools could be harnessed radically.

Rather than using a pool of donated capital to buy up and abolish debt, Rolling Jubilee's funds could be levered and invested to buy, say, an affordable housing project. The rents could then be used to write off personal debts as well as providing collateral for further leverage. Those whose debts get written off can be encouraged to join credit unions that offer socially productive models of finance and ownership.

It remains to be seen whether Strike Debt can develop and export its ideas as successfully as the more conventional Wall Street inhabitants. In the UK, though, there are murmurs of a movement emerging. Its potential should not be ignored. A debtors' union could reinvigorate radical politics at just the time it is needed most.