Debt as power
Against the backdrop of the night of New Year’s eve, before the reunion dinner starts and night falls, people back home from all directions, and I pass by several homeless who hotpots in tins, pots and trinkets, cheerfully, on the sides of streets where ostentatious cars drive fast by. I wonder, how economic growth makes the poor even poor, the vulnerable even vulnerable? Professor Muzio and Robbins in their co-authored book Debt as power raise a theory that debt, as a capitalism-derived tool, perpetuates economic growth whilst redistributing the wealth of the 99% to the 1%. Therefore, in this review, I will focus reflections on how debt — a technology of power (as what is termed in the book) — aggravates poverty and inequality.
Muzio and Robbins start the whole book by providing a conflicting explanations of debts whereby, on one hand, capitalism is thus accumulated, the rich richer and inequality severe. They even primed this phenomenon a hilarious name “technological power” — literally hints the total lack of sympathy and empathy. Interestingly, on the other hand, they argue debt could also be a functional mechanism in contributing financial market stabilization.
Structurally, the book can be divided into two general parts, each with two chapters. The first part composed of chapter 2 and 3, as a background, introduces how capitalism debts occurred; and the second part made up by chapter 4 and 5, mainly explain how debt is a technology of power. Specifically, this book involves total five chapters and four major themes. Chapter 1, as an introduction of the book, revels a veil nature of capitalist debt by depicting how it traps and transforms one’s life altogether with surroundings into a “wilderness” (p1), shaping social inequality. In chapter 2, they trace back to the origins of capitalist debt and how it evolves into modern capitalism debts. Chapter 3 also focuses on the history of capitalist debts yet specially on the formation of national debt, exemplified by British capitalist accumulation by conquering and exploring world market, in order to underlie its archetype of today’s multinational corporations, and its extension to debts in modern capitalism. Here they also hint capitalist debt will transform from public sectors to private ones. Chapter 4, in essence, introduces what is “debt-growth capitalism” and illustrates its conflicting nature: on one hand, it continually pauperizes 99% of populations and devastates the environment, on the other hand, without which, growth slows, credit crisis ensues and capitalist system falls apart. In the last chapter, authors unpack their positive visions by raising possible solutions for current capitalist system featured by debt-growth.
“Debt as power”, as the overarching idea of the book, is throughout from the outset to the offset, yet is fully presented and argued in the Chapter 4. Here Muzio and Robbins provide a clear, lucid and visceral argumentation that what, in essence, is the debt capitalism? Secondly, how it operates and how it affects people, life and economy? And lastly, why is it bad and why such consequences significant?
In answering those questions, they point out the first feature of debt as a power, in a clear and brief way, that debt is a stimulation for perpetual economical growth, without with, surplus couldn’t cover debt and the whole economy will collapse (for example, financial crisis or credit crisis). Therefore, economy operating with debt-money must grow exponentially. Based on this assumption, they point out debt is also a detrimental power for environment, because companies have to incessantly exploit nature resources to maintain that growth, causing irrevocable damages to the environment.
The most wisdom part, from my perspective, is they point out, not only why debt is bad, but also why debt capitalistic economy is impossible. First all of, those natural resources such as lumber, oil and gas — the main drive of capitalism, are not renewable, which means they will be run out of sooner or later, and those industries such as lumber company, automobile and real estate will hardly maintain that growth. secondly, they consider another factor, competition, which will make exporters impossible to gain profits and even enmeshed in debts.
I appreciate, most of all, a sense of injustice they try to send through the book, either between different classes within one society, or between countries. For example, they take coffee manufactures as an example. Because of competitions among them, the price is lowered, then capital is transferred to importer countries away from exporter countries. And in this case they are very often developing countries such as African and South American, which means they “take away the investments in education, health and poverty alleviation” (p103).
In this light, I rather hope authors could explore deeper into this realistic implication, because this part really differentiates this book from any other scholarly works to render debt an unprecedented definition that “debt is technology of power”. This idea is brilliant, to the extent that through the phenomenon (social injustice and inequality), they dig into the underlying nature of debt in terms of how it affects modern people’s life, market operation and wealth redistribution — things they learn in a brave-new type of economy, capitalism. Yet it has been only fully explored in Chapter 4.
Accordingly, I also wish authors could cut the passages for chapter 2 and 3 which focuses on the origin of capitalist debts. I can understand, though, quiet different from traditional researchers who hold debt and capitalism in a separated way, they see debt as a close production just under capitalism to highlight its strongly association with capitalistic market. Therefore, they need to bring up the origin of capitalism and debt to illustrate how the changes of market (such as oil-driven economy) make debt-featured capitalism hard to maintain. However, not until readers read upon the last two chapters that can they understand the intention of first two chapters.
Nonetheless, it is such a wonderful piece of scholar work written by Muzio, as a professor in International relations and political economy in collaboration with Robbins, a world-eminent anthropologist, injecting a holistically historical, economical, and moreover ethical perspectives into social science. Therefore, I highly recommend this book as an important scholarly and pedagogical resource.
