There is nothing wrong with having debt, or with borrowing and lending. I may lend you a tool that you need today, knowing that I will likely need something from you in the future. We can have a mutually beneficial exchange.

But if one owns all the tools, there is a problem. Nothing is mutual then: One party alone can now set the terms of our exchange because the other is always needs to borrow.

This is our current political economy.

The vast amounts of debt accumulated globally, far from being the result of fair and free choices of mutually beneficial exchanges, are a form of structural violence. According to some estimates, the 8 richest men own as much as half of the planet’s population. The owners of capital dictate the terms of access, and others can only take it or leave it — if leaving it is even an option at all.

Individual holders of personal debt around the world — whether they have mortgaged their homes, borrowed on a credit card, incurred student loans, taken out microcredits, or accrued informal debts — all share the lived experience of having borrowed to fulfill a need, with the hope that they will be able to pay for it later. They have shared interests. Many are already in permanent cycles of indebtedness, and the economic and social fallout of COVID-19 threatens to push some into permanent indenture and debt servitude.

Can we imagine a world without such super exploitation? How can we get there?

Some of the most viable radical strategies to end this exploitation are being pioneered by people who live with personal debts in Africa, Latin America and Asia. Their movements to repudiate debts demonstrate that challenging both debts and the wider debt regime itself is possible through collective action. Like when the trade union movement began to mobilise workers for strikes in the past, these movements now signal a discovery of collective debtor power deployed toward creating economic justice.

These movements are spearheaded by people who borrowed from the global microfinance industry. Microcredit (now part of the wider global ‘financial inclusion’ agenda) was once claimed to liberate and empower poor people. In reality, it was a form of global debtfare that ruthlessly financialised poverty. Microcredit’s supposed beneficiaries, the borrowers, have seen through the neoliberal charade all too well and some of them have taken up the fight against exploitative microlending.

Their strategies center around one simple and powerful tool: outright refusals to pay. In the year 2000, thousands of borrowers in Bolivia joined a wider social protest wave and forced the world’s largest microlending industry to the negotiating table; they gained partial debt relief. In 2008, when microlenders threw borrowers in Nicaragua into prison, protests under the banner “No Pago” (“I’m not paying”) rocked the country. The people were released from prison and many debts never repaid. In India, in 2010, protestors outraged and despairing over a wave of suicides among microfinance clients forced the Andhra Pradesh state government to regulate against abusive lenders. More than 1 billion dollars in loans were written off. In Morocco, the Arab Spring unleashed a women’s movement, “Victimes du Microcrédit”, which challenged exploitative microlending, but the state responded with repression, and the movement’s leaders faced jail time.

When borrowers and citizens become defiant debtors and radical activists who challenge economic inequities, they can shake the moral and economic foundations of the global financial system. What EP Thompson called “moral economy” — the insistence by ordinary people that they should be treated fairly rather than exploited by market forces — underlies the seemingly unconnected defiant debtors’ movements in different countries. They aim at restoring a sense of moral equilibrium and justice in the economic system. And they are incredibly effective. We can learn from some of the very poorest people about how to challenge the international debt regime.

Internationalism is critical: movements like these should not have to fight alone. Their opponents may be specific lenders in national contexts, but the capital markets and the debt regime are global. The borrowers also understand this. We must work with them. This suggests three priorities for action:

1. Work with anti-debt movements which have arisen spontaneously and help incipient ones to grow. Use coordination to make them stronger than the sum of their parts. To declare some debts illegitimate, and therefore irredeemable, is to strike at the heart of financial capitalism. Done collectively and internationally, we may well find that global finance is both overweening and exceptionally fragile.
2. Look beyond the surface of debt defiance movements to see the visions of justice they espouse. They may use tactics that are hard to understand, may be fallible or opportunistic, or may become politically instrumentalised. Establishment actors often portray them as repugnant, ignorant financial Luddites. But they speak a universal truth. As an international movement for debt justice we should pay attention to debtors’ moral economy –the visions of fairness and justice they espouse, whether fully formed and articulated or not – and make it part of our alternative economic blueprint.
3. Work with defiant debtors to achieve tactical victories such as debt forgiveness, strong legal consumer protection, and financial accountability, as well as strategic transformations in the form of building solidaristic alternatives that liberate borrowing and lending from structural violence. Global wealth, socially owned and democratically managed, could be used in ways that do not exploit anyone and that empower all.