Debtors can exercise power when they join together

22 August by Ann Larson , Laura Hanna , Patrick Saurin

Debt Collective

Interview of Ann Larson and Laura Hanna (Debt Collective), by Patrick Saurin (CADTM)

The Debt Collective, Strike Debt, and the Rolling Jubilee: How were these movements born and how are they related?

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The Debt Resisters’ Operations Manual

The Debt Collective is a culmination of organizing and activist work that grew out of Occupy Wall Street in 2011. Many of us who had participated in that movement shared an understanding that indebtedness, an experience that millions of Americans share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. , was a potential arena for organizing. After Occupy ended, we continued working together to educate ourselves and the public about the problem of mass indebtedness and to brainstorm tactics and strategies for building an organization that could help debtors exercise power against creditors. We formed Strike Debt as a way to conduct this research. We studied different debt types, including medical debt (millions of Americans are in debt because they got sick or had an accident), payday loans (short term loans with very high interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
), fines and fees and private probation debt (financial obligations that people incur in the courts and prison system). Strike Debt compiled its research into a book, The Debt Resisters’ Operations Manual, first published in 2012. Strike Debt also launched an initiative called the Rolling Jubilee to buy and abolish defaulted debts sold on the secondary market Secondary market The market where institutional investors resell and purchase financial assets. Thus the secondary market is the market where already existing financial assets are traded. . Defaulted debts in the US are often bought and sold very cheaply by debt collectors who then try to extract the full amount from the debtor. The Rolling Jubilee raised money via crowdfunding, bought $33 million of debt on the secondary market and simply cancelled it. Both Strike Debt and Rolling Jubilee were meant to debunk myths about debt, challenge austerity policies, and be a steppingstone toward debtor organizing. In 2015, as the Debt Collective, we launched our first pilot organizing campaign. We collaborated with former for-profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. college students to launch the nation’s first debt strike. Debtors demanded that the federal government cancel their student loans. The campaign won the support of several members of Congress and received national and international press coverage.


What have these groups accomplished to date?

The Debt Collective’s student debt strike campaign eventually won $600 million in debt relief for former college students. The campaign forced a change to federal law: student debtors now have a legal right to dispute their federal loans if they believe they were lied to or defrauded by their school. Unfortunately, the Trump administration is now trying to reverse those gains. The Debt Collective’s work so far has also contributed to a change in public consciousness that has taken place in the US over the last few years. Our members’ actions helped introduce the concept of debt resistance to the broader public and demonstrated in a concrete way that debtors can exercise power when they join forces and organize as a collective.


What is their relationship with other social movements in the US?

The Debt Collective is in the early stages of building an organization by and for people in debt. We act in solidarity with anti-capitalist, anti-racist, anti-imperialist organizations and are interested in solidarity economies. We are interested in developing collaborations with grassroots groups that focus on housing justice and on workers’ rights. For example, we are currently working on a plan to collaborate, starting this fall, with an immigrant workers’ organization in the south, a region where the interlocking problems of debt and racism are especially pronounced.

What links do they maintain with other anti-debt organizations outside the US?

We conduct our work in solidarity with anti-austerity activists and organizations outside the US. While we are a new organization that has focused so far within our own borders, we are definitely eager to learn from others and to collaborate internationally.

Has the Bernie Sanders campaign and the movement it inspired had an impact on movements against debt, and in what way?

Bernie Sanders’s presidential campaign transformed the political terrain the US. He openly identified as a “Democratic Socialist.” Before Bernie, calling yourself a Socialist of any kind meant opening yourself up to ridicule and derision. Millions of people, especially young people, have now been introduced to a form of Socialism and to the policy ideas Bernie promoted, including free college, universal health care, a higher minimum wage, and higher taxes on Wall Street. Bernie’s political project was a stark contrast to Hillary Clinton’s bourgeois liberalism. The failures of liberalism became clear to more and more liberals over the course of the Presidential campaign, especially after Trump’s victory. While we’ve witnessed and learned lessons from other parties like Syriza, Bernie’s unexpected popular success points toward new possibilities in the U.S.


In what ways is the question of debt central in the US today?

People who live in the US are required to debt finance their basic necessities. The state does not provide many social goods. Workers have not seen a wage increase in almost 40 years. Public services are being eliminated or privatized; the “welfare state” of the 1960s is no more. This neoliberal assault was also conducted via right-wing media campaigns that, over the last few decades, have succeeded in convincing many people that they deserve nothing that they can’t pay for themselves, out of their own pockets. The political right has also helped to convince some people to blame immigrants or other members of the working class for their financial problems. Debt is a symptom of these larger structural forces and we see indebtedness as a key site for educating ourselves about the real causes of our problems and building real leverage Leverage This is the ratio between funds borrowed for investment and the personal funds or equity that backs them up. A company may have borrowed much more than its capitalized value, in which case it is said to be ’highly leveraged’. The more highly a company is leveraged, the higher the risk associated with lending to the company; but higher also are the possible profits that it may realise as compared with its own value. against creditors.

What are the perspectives and objectives of the different groups that struggle against debt?

To understand what the struggle looks like in the US, it is important to understand that the political right has, for decades, dominated anti-debt discourse. It is the Republican Party that is known for railing against deficits and demanding balanced budgets (promoting austerity). Since the Democrat Party has surrendered to the right, many Americans are convinced that the US spends too much money and that we risk going broke. Part of the work of organizing around debt, then, is conducting public education campaigns and producing media to debunk right-wing myths about debt and deficits. One of our main objectives is changing people’s minds about economic rights and the need for public spending so that people don’t have to go into debt to finance basic needs.

What is daily life like for activists who organize against debt?

It can be difficult because most people with a lot of debt – those who are most interested in joining a debtors organization and organizing around debt – are poor. People struggle mentally, physically and emotionally against a relentless brutal system of extraction, neglect and disinformation.


Author

Ann Larson

is member of Strike Debt Collective


Other articles in English by Ann Larson (3)

Author

Laura Hanna

member of Debt Collective


Other articles in English by Laura Hanna (1)

Author

Patrick Saurin

He is member of the Truth Commission on Public Debt. Spokesperson for the bank employees’ labour federation Sud Solidaires de la Banque Populaire – Caisse d’Epargne (BPCE) - France.


Other articles in English by Patrick Saurin (3)

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

35 rue Fabry
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

cadtm.org