Down with illegitimate public and private debt

Opening address at the 5th summer university of CADTM Europe on 30 June 2017

4 July 2017 by Eric Toussaint

What we are fighting is a capitalist system that destroys nature.

We have to fight a capitalist system which, within the two centuries since the so-called Industrial Revolution, has accumulated enough greenhouse gases to trigger climate change.

It sees nature merely as resources to be extracted, exploited and traded for maximal 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. .

A capitalist system that confines the inhabitants of many countries to producing raw material to be exported at the lowest possible price.

A system that drives people to produce food they will not eat and to eat food they have not produced.

A system that sets up and maintains nuclear plants which must urgently be shut down.

A capitalist system which perpetuates or even strengthens the oppression and exploitation of women.

A capitalist system which goes hand in hand with the debt system.

Illegitimate private debt

The debt system existed long before the capitalist system (see Breaking the Vicious Cycle of Illegitimate Private Debt - Part 1) but it has thrived under capitalism (see part 2).

Private debt has been used for millennia as a way of depriving peasants of their land, craftsmen of their tools. Slavery for debt was common during Classical Antiquity.

The system of illegitimate private debt usually involves imposing conditions of loans and repayment that make the latter impossible. This results in seizure (of housing, land, working tools) and/or in the need to consign long years or indeed decades to repaying debts.

History is littered with uprisings against the burden of illegitimate private debt, whether in Ancient Greece or in Northern Europe during the Middle-Ages.
Those struggles against illegitimate debts are once more in spate:

Zoe Konstantopoulou, Éric Toussaint, Christine Vanden Daelen, Antoine Deltour and Lucile Daumas at the opening plenary of the CADTM Summer University, June 30th 2017

Illegitimate public debt

The system of illegitimate debt is also used by the capitalist system to subject public policies to the demands of Capital. While public debt could be used to finance an ambitious programme of ecological transition… it is actually used to enforce anti-social, extractivist and productivist policies, policies that increase competition between peoples.

Public debt is not bad in itself. Governments can contract loans to finance the ecological transition:

  • to finance the complete shutdown of nuclear plants;
  • to replace fossil energies with renewable energies which respect the environment;
  • to drastically reduce road and air transport and replace them with collective transport by rail.

Public borrowing can thus be legitimate if it is used to finance legitimate projects and if those who contribute act in a legitimate way.

The CADTM believes that big companies and the richer households should contribute to non profit-making government loans, i.e. with zero interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. rate. Most households could make voluntary contributions with a positive interest rate.

The opposite happens: governments and local authorities mostly borrow to finance illegitimate policies such as:

  • armaments expenses;
  • white elephants;
  • nuclear plants;
  • public-private partnerships;
  • repayment of former illegitimate debts;
  • bailing out banks.

Public debt is thus used to finance illegitimate expenses. The way repayment of the debt is financed is illegitimate too: big companies and the richer households pay little or no taxes. Those on limited incomes have to tighten their belts to repay the debt. Private banks grant loans to governments at profitable rates for themselves while they borrow at a very low rate from the central bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

as is the case in the Eurozone or in Japan.

We can draw a straightforward conclusion: it is time to end the system of illegitimate public and private debt.

The CADTM is radically committed to fighting at local and international level with social movements and citizens toward the repudiation of illegitimate debts, whether public or private.

If public authorities wish to get involved, the CADTM is available and ready to help, for instance in the organization of citizens’ audits, as happened in Ecuador in 2007-2008, Paraguay in 2008 and Greece in 2015.

Translated by Christine Pagnoulle and Vicki Briault

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.



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