Over the past nine years, the debt crisis has been primarily defined as a financial crisis. This is surprising, as it is precisely finance that has remained largely unscathed, while the repercussions for society and the state have been enormous and irreversible. We are witnessing an infinite piling of financial debts whose servicing requires ever more money, more loans, more speculation, more growth, and more risk. Both at the level of the state and at the level of private households, this has led to a rapid loss of sovereignty, as well as the destruction of finite hard assets and real productivity. States become more and more dependent on market finance and securitized credit, such that the distinction between public and private debt and the relation between indebtedness and the common good tend to disappear. Socio-economic life is increasingly subject to debt bondage, as we are becoming self-entrepreneurs with study debts, mortgage debts, consumer debts and credit ratings that compel us to keep digging and filling the debt hole ever faster.
Instead of a financial crisis, then, what seems to be at stake is a crisis of governability and subjectivity – in other words, a political crisis. Yet even if debt is at the heart of the crisis, being both its cause and its cure, it hardly ever appears as a political issue. When it does, as with recent parliamentary shifts in southern Europe, questions of political economy are quickly covered and subdued under an intricate blend of financial-economic ‘laws’ and archaic moralizations. The financialization of the global economy since the 1970s divides collective debt into increasingly asymmetrical relations between individuals, states, and financial bureaucracies, leading to ever-narrower margins in which political decisions are made. At the same time, austerity programs based on the restriction of welfare expenditures and the privatization of state property transfer public wealth to private shareholders, reinforcing the situation they are said to resolve.
Whereas of old philosophers and anthropologists have been emphasizing this inseparability of financial and moral aspects of debt (as reflected by the Germanic word for both debt and guilt, Schuld), contemporary public discourse does exactly the reverse. It obfuscates questions such as who controls institutions and structures and who has the power to create them or reshape them to their own ends. Instead it pairs an objective rationality with a subjective sentimentality, redefining social reality and citizenship in terms of precarity, private property, market, and the spectacle of inequality.
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