Tuesday, February 05, 2013

Debt Peonage

The last weekly installment columnist Chris Hedges has posted on truthdig.com offers an insightful criticism of social inequities in a world increasingly reliant on borrowed money:
Miss a payment on your credit card and your interest rates jumps to 30 percent. Fail to pay your mortgage and you lose your home. Miss your health insurance payments, which have been spiraling upwards, and if you are seriously ill you go into bankruptcy, as 1 million Americans who get sick do every year. Trash your credit rating and your fragile financial edifice, built on managing debt, collapses. Since most Americans feel, on some level, as Hudson points out, that they are a step or two away from being homeless, they are deeply averse to challenging corporate power. It is not worth the risk. And the corporate state knows it. Absolute power, the philosopher Thomas Hobbes wrote, depends on fear and passivity.
As a Canadian, I am told by government and corporate analysts (usually on CBC's Power and Politics or The Lang and O'Leary Exchange) the situation north of the border isn't quite so dire. I am inclined, however, to take any such claims with a healthy dose of skepticism. The fine art of economic prognostication only ever rarely attains the exacting standards of accuracy for a scientific statement, and this is only determined in hindsight. Each time I hear the phrase 'Going forward...' or 'Looking forward...' fall from a person's mouth, I make a mental note to myself that this must be another graduate fresh from the Hogwarts School of Business.

I more than sympathize with Hedges' account; in fact, I very much identify with it. A low, but persistent, level of anxiety clings to my every financial calculation; a holdover, I think, of memories growing up in a family whose agricultural livelihood was directly exposed to the violent disruptions of the market. Will there be enough money to pay rent next month and make my other bills? the month after? are questions I must ask myself every two or three months... My wife, Sabrina, worries about me when I get anxious, but keeps a cool head herself. Our different reactions seems to come from our differing experiences growing up, as she grew up among people who managed the ups and downs of the marketplace, rather than being immediately exposed to them. (A real wrong-side of town romance, if there ever was one.)

Divergent perceptions, however, do not cancel out the reality of things. And that would would be..what exactly? Hedges makes an able case, I think, for the reality of 'debt peonage'. Despite all the anger and stress created by a economic system designed to extract ever last penny, compliance is enforced by the amount of debt persons are forced to take on, to gain access to the system in the first place. It appears a vicious circle; and all the more so because there is no real option to opt out.
There are no impediments within the electoral process or the formal structures of power to prevent predatory capitalism. We are all being forced to kneel before the dictates of the marketplace. The human cost, the attendant problems of drug and alcohol abuse, the neglect of children, the early deaths...is justified by the need to make greater and greater profit. And these costs are now being felt across the nation. The phrase “the consent of the governed” has become a cruel joke. We use a language to describe our systems of governance that no longer correspond to reality. The disconnect between illusion and reality makes us one of the most self-deluded populations on the planet.
Corporations are disempowering citizens, which only seems to be confirmed by the fact that corporations, through a legal farce, are now defined as persons. The winner takes all in a game where corporations both deal the cards and sit at the table as an active player.

And that, it seems to me, is the problem with Hedges' otherwise insightful column. He buys into the corporate nonsense about corporations being persons by personifying them in his criticism of corporate America. All of what Hedges has to say about the contemporary economic situation may be true, but none of that is to suggest there is actually a conscious entity willfully extracting wealth from the downtrodden. I say this even if advertising campaigns are all about separating the customer from their money.

The easiest way to demonize something is to personify it. More likely, the employees of corporations, from the CEO on down, are fulfilling the mission of the corporation to provide a better product or service, and make a profit doing it. In their interactions with governing officials, they will no doubt seek certain advantages to assist in the achievement of that aim. But this is still a long way from a conscious, explicit intention to enslave the greater portion of the citizenry.

Once a system is personified, it becomes all the more difficult to reform it. Hedges' talk about debt peonage sounds quite medieval: there is nothing redeemable in it. But debt has been and still can be a powerful financial tool, one should keep well in mind, giving access to capital to persons who would otherwise be left outside.

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