Just as calls for dismantling the institution of policing have grown louder and moved into mainstream spaces, calls for debt cancellations of various sorts are increasingly difficult for politicians and leaders to ignore. Debt resistance against both sovereign debt and household debt is an important part of today’s social movement struggles. This includes the U.S.-based movement to cancel the $1.5 trillion student debt, an idea that has finally reached the mainstream electoral arena.
Household debt is not a stand-alone issue. As levels of indebtedness have skyrocketed in many societies in recent years, debt has been associated with great suffering as well as tragic events from depression to suicides, the selling of one’s organs, and gender-based violence. Like other forms of economic inequality, debt has unique effects on racialized minorities who face greater precarity in employment and tend to be more often subjected to predatory forms of lending. Debt is intimately tied to systemic racism, as it feeds on it and nurtures it at the same time.
My own work on debt has been in Telangana, India, where I have focused on informal lending and the debt experiences of racialized, subaltern Muslim minorities and Dalits. The individuals I interviewed and families I spent time with lived in precarious conditions, with unstable incomes, no labor protections, and no savings. Informal and illegal finance is their only real safety net, as financers lend to them with no collateral but at high interest rates. For these families, a single emergency—the death of a husband, a child’s illness—could lead to long-term indebtedness. I have seen many women take on highly exploitative piece-meal work, earning a few cents an hour, just to keep up with their interest payments. Although debt can open up certain avenues and life opportunities for people, in my work I have seen it exacerbate gender oppression, strengthen patriarchal social institutions, and cause family conflict. It also limits people’s time horizons. When full repayment of one’s debt becomes a distant fantasy, the very sense of having a future diminishes. Yet many families continue to take loans in the hopes of securing a better future for their children.
To understand the connections among debtors in very different national and local contexts and to build solidarity among them is critically important. One of the most insidious aspects of indebtedness is the shame it instills. Individuals tend to blame themselves for being unable to pay off their debts rather than faulting their governments or the injustices of the capitalist system itself. An internationalist approach would strengthen debt resistance movements by helping debtors understand their situations as part of a global phenomenon that must be overturned and not as a result of their individual choices or “consumer desires.” Seeing debt as a shared condition under contemporary finance capitalism is a critical step toward developing a global political consciousness around the concept of debt justice.
Drawing on my observations in India and the U.S., three (out of many possible) related principles guide my thinking about debt justice. First, the problem of household debt must be continually tied to a larger critique of capitalism and the root causes of indebtedness, such as the lack of public goods and social welfare. Local level solutions like low-interest micro-credit programs and financial-inclusion based schemes might ease the burden on debtors and poor families; but they fail to challenge the conditions that drive people into debt in the first place. Therefore, proposed solutions that are short-term and that ultimately reproduce capitalist exploitation must be acknowledged as fundamentally inadequate in terms of debt justice.
Second, movements for debt justice should dialogue with advocates of alternative banking as well as non-hegemonic economic traditions such as Islamic finance. The latter has long questioned the practice of charging interest, for example. Activists in this tradition have vigorously debated the meaning of exploitation in the context of finance and engaged with communities on the ground in many countries. Building dialogue across diverse movements will enrich the conversation about solutions to debt and strengthen the cause of debt resistance.
A third guiding principle is that universal policies around debt negotiation and cancelation are more desirable than means-tested policies. Policies that apply to only certain categories of “qualifying” individuals not only fuel already complex bureaucracies but also might ignore or exacerbate racial inequalities among debtors. Moreover, means-tested approaches only muddle the ethical principles at stake, whereas universal approaches keep them front and center of the debate. No one deserves to spend their lives paying interest on loans they took to save a family member’s life or to pursue education or feed their children. The time is ripe for a truly internationalist solidarity movement that clearly reveals the connections between debt and (racial) capitalism and that aims for justice and not merely relief.
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