Debt peonage—worse than slavery?

Of all the social crimes, debt peonage is the most evil surviver.  While there are technically differences between actual debt peonage as practiced in ancient Greece or modern India and simply being in debt, this tends to be a distinction without much of a difference.  And while the classical practices of debt peonage have been largely reformed away in most civilized lands, the extraction of a "pound of flesh" is still a very common practice among the creditors.  In fact the modern austerians are simply updated muscle of the modern loan sharks.

The current crises where governments cannot even undertake the necessary repairs to the public infrastructure can be traced back to the undoing of the various forms of debtor's rights legislation (including usury laws) that began in the late 1970s.  Up until that time in post WWII USA, a reasonably diligent person could be largely debt-free by their middle age.  Now it is almost impossible.  Yes it is still possible to avoid the debts that come from living a lifestyle more lavish than one's income will allow.  But now there are so many debt traps that even the most cautious and hard-working person cannot avoid all of them.  These traps include absurdly-priced higher education, the criminal exploitation of the sick, and most importantly, the failure of the minimum wage to keep pace with the costs of living.  But even IF folks manage to avoid these traps, their governments and employers have sold them into debt—with or without their approval.

Here Chris Hedges takes on the problems of debt slavery using the theological approach of crying for social justice.  This makes perfect sense because not only was he trained as a Protestant clergyman, this subject has been covered in depth by Christianity.  Not only are there at least 50 places in the Bible where the subject of creditor-debtor relationships are discussed, the most famous prayer in Christendom (The Lord's Prayer) contains the line "And forgive us our debts, as we forgive our debtors."  So he is on sound footing here.

And if you need a good homily this Sunday, make sure you follow the link over to Truthdig.  This may be Hedges' best subject and it is obvious he has thought long and hard about it.  The whole thing is about six times longer than this clipping.

Breaking the Chains of Debt Peonage

Posted on Feb 3, 2013
By Chris Hedges

Chris Hedges gave this talk Saturday night in Brooklyn at the People’s Recovery Summit.

The corporate state has made it clear there will be no more Occupy encampments. The corporate state is seeking through the persistent harassment of activists and the passage of draconian laws such as Section 1021(b)(2) of the National Defense Authorization Act—and we will be in court next Wednesday to fight the Obama administration’s appeal of the Southern District Court of New York’s ruling declaring Section 1021 unconstitutional—to shut down all legitimate dissent. The corporate state is counting, most importantly, on its system of debt peonage to keep citizens—especially the 30 million people who make up the working poor—from joining our revolt.

Workers who are unable to meet their debts, who are victimized by constantly rising interest rates that can climb to as high as 30 percent on credit cards, are far more likely to remain submissive and compliant. Debt peonage is and always has been a form of political control. Native Americans, forced by the U.S. government onto tribal agencies, were required to buy their goods, usually on credit, at agency stores. Coal miners in southern West Virginia and Kentucky were paid in scrip by the coal companies and kept in perpetual debt servitude by the company store. African-Americans in the cotton fields in the South were forced to borrow during the agricultural season from their white landlords for their seed and farm equipment, creating a life of perpetual debt. It soon becomes impossible to escape the mounting interest rates that necessitate new borrowing.

Debt peonage is a familiar form of political control. And today it is used by banks and corporate financiers to enslave not only individuals but also cities, municipalities, states and the federal government. As the economist Michael Hudson points out, the steady rise in interest rates, coupled with declining public revenues, has become a way to extract the last bits of capital from citizens as well as government. Once individuals, or states or federal agencies, cannot pay their bills—and for many Americans this often means medical bills—assets are sold to corporations or seized. Public land, property and infrastructure, along with pension plans, are privatized. Individuals are pushed out of their homes and into financial and personal distress.

Debt peonage is a fundamental tool for control. This debt peonage must be broken if we are going to build a mass movement to paralyze systems of corporate power. And the most effective weapon we have to liberate ourselves as well as the 30 million Americans who make up the working poor is a sustained movement to raise the minimum wage nationally to at least $11 an hour. Most of these 30 million low-wage workers are women and people of color. They and their families struggle at a subsistence level and play one lender off another to survive. By raising their wages we raise not only the quality of their lives but we increase their capacity for personal and political power. We break one of the most important shackles used by the corporate state to prevent organized resistance. more