DOC TAYROC'S [UNSOLICITED] BOOK REVIEW - DEBT OR DEMOCRACY by Mary Mellor

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'There is no society' and 'money doesn't grow on trees' these are two platitudes that come straight to us from the Thatcher's mouth, things she said either in interviews or during the Prime Minister's Questions (PMQs) on the floor of the House of Commons. These could also be the mottos of the neo-liberal era, set in stone and placed lovingly on the desks of every Tory and post-Blair Labour MP in all of Britain and their counterparts globally. When one leads with 'there is no society', one can't help but feel a bit of bitter scorn when they read consistently about a 'loneliness' epidemic in The Guardian, The Times, or The Telegraph, especially knowing that all of these papers pushed the kind of policies and rhetoric that led us to this loneliness epidemic, and have never once questioned their role in this catastrophe. 'Money doesn't grow on trees' certainly never became an issue when invading Iraq and Afghanistan in 2003/2004, nor when the banks needed to be bailed out in 2007/08, nor again when the RAF had to enforce a 'no-fly zone' over Libya, nor any of the many other military actions Britain routinely carries out, or when Virgin Airlines needs a bailout. Since the Thatcher era, there sure does seem to be something of Schrödinger’s budget. Britain is simultaneously broke but also has never had such a steady stream of capital ready on demand. It all depends on the people asking for help.

Of course, in this regard, amongst the nation-states, Britain is hardly unique. There's more than a good chance that non-British readers are reading this and seeing their own country's politics played back to them. As covered in my review of Crucible of Resistance this is happening in Greece. This was largely pushed into Greece in the present form by then German Chancellor Angela Merkel, and so it's not difficult to infer this is also happening in Germany. French President Macron has been compared (favourable and unfavourably) to both Tony Blair and Barack Obama, so we can infer it's happening in France. Of course, with the mention of both the Afghanistan and Iraq wars above, as well as this new inclusion of President Obama, I think it's safe to infer that this is also happening in the US. In all these countries it is brought with another simplistic slogan, 'There is No Alternative' (TINA). The poorest of the country must tighten their belts for the good of the nation, the government can't do hand outs any more, and frankly having received a hand out is a sign of moral failure, not of correcting larger systematic failures. 'There is no society' means that to live and to die is entirely on the individual, history and larger institutions be damned. After all, critiquing history and material reality is Marxist, and we wouldn't want to be Marxist, would we?

Of course, as has been frequently written by me, and more established Keynesian and Marxist economists, there is a great deal shoddy maths behind the economics of austerity, but also a perhaps unsurprising amount of hypocrisy. A mindset that in previous blog entries I've referred to as 'socialism for me but not for thee', but has also been referred to as 'corporate welfare' and 'socialism for the rich' by other economists. A perverse form of socialism designed to maintain the wealth of a small segment of the population, at the expense of the rest of the population, with the promise that wealth will trickle down when those fortunate enough to be in this small segment deign it responsible to invest in the rest of us. Said responsible is not based on the safety or well being of the rest of society, as is seen in crumbling infrastructure and a decreasing percentage of wealth going into public healthcare, but rather measured entirely by the metrics of Return On Investment (ROI), which of course in the current era don't even need to benefit consumers of products, since the largest monopolies have moved beyond profiting off of consumer retail, and instead rent-seek on what little infrastructure there is left.

This has seen an increase in monopolisation of the press, both academic and popular, and has seen the press bend to suit the narrative needs of these monopolistic powers. This, mixed with a near continual decline in education spending since the 1980s, has continually undermined the capacity of those outside of the bourgeois class to properly mount any form of resistance to these constant assaults on the proletariat by the bourgeois, with the bourgeois increasingly using the popular press monopolies to divide the proletariat, and convince groups within to vote against their best interests repeatedly, a feat made easy by the aforementioned gutting of the universal education systems. This monopolisation of power, money, education, communication, etc., it all feels terribly undemocratic, doesn't it? Maybe the freer the markets, the less free the people? Also, with all this talk of responsibility over the sovereign debt, why have levels of personal debt reached record highs? Especially if we're living through a cost of living crisis and yet wages remain painfully stagnant, and our government keeps assuring us there is no money to do really much of anything about it.

A rat done bit my sister Nell.

(But Whitey on the Moon)

Her face and arms began to swell.

(And Whitey's on the Moon)

I can't pay no doctor bill.

(But Whitey's on the Moon)

Ten years from now I'll be paying still.

(While Whitey's on the Moon)

-- Whitey on the Moon by Gil Scott-Heron

Debt or Democracy by Mary Mellor examines all of this at length, from the central argument that the end of government welfare programmes in the name of 'shaving the national debt' has instead spread the debt burden onto the poorest in the form of rampant unchecked and under regulated personal debt. Credit cards, subprime mortgages, student loans, auto loans, PayPal pay in three, Klarna, etc., etc, etc. You've likely come across the recent capitalist hell-scape that is Klarna on Deliveroo. Going into debt to get some McDonald’s delivered by a man who is also in crippling debt. This ever increasing level of personal debt is, unsurprisingly less sustainable than any sovereign debt crisis was perceived to be, since the average poor person can't print their own money, can't raise an army, can't levy tax, or do any of the many other things that a nation-state can do. The Thatcher and broader neo-liberal impulse to compare a nation-state's budgeting to the maintenance of a personal or even corporate checking account is laughable when one considers what the nation-state actually is, and that it is a great deal more than a household or a corporation. Of course, this obfuscation was the point all along. If the nation-state becomes just another private entity, then it is considerably easier to extract capital from, which is of course capitalism's end game. Nothing is sacred, everything should be commodified, even the state.

It is in the express interest of capital that the capacities and the nature of the state be continually undermined in order to sell the advantages of the free market. In no place is this more apparent than in the treatment and funding of primary and secondary education. For decades, we have been critically undercutting funding to primary and secondary schools. This started with Thatcher's diminishing funds for local schools in the 1980s, pinning the responsibility for funding local schools on local authorities. Whilst this is sold as empowering local communities to make decisions, in reality this encourages education and wealth disparities between richer and poorer post codes. Indeed, in current data we see a regional trends emerge in educational outcomes, with, surprise surprise, richer regions out performing poorer ones. This is then further compounded by a push, starting with the Cameron government, back to highlighting Grammar Schools and other private schools in the UK over state schools. Pushing poorer families into debt to send their children to grammar school for any hope of a future outside of the 'working class'. This is the modern Tory play-book, under fund the state asset, point out how inefficient it has become, and then push the private market alternative as 'the only way', rallying the base against the perceived inefficiencies of the state. Of course, the whole time, encouraging the state asset to be more fiscally responsible by contracting out valuable services to third-party 'private-public partnerships' which further milk the state for capital whilst providing less and less efficient services, and pining the inefficiencies on the state, rather than the 'private partner' that the state entity was forced to farm the service out to. Of course, once the service is outsourced to the private market, there can become a discrete disparity in the quality of products delivered to consumers, with poorer people only able to afford poorer quality. 'You get what you pay for' becomes the law reinforcing class. This is beneficial for those who enjoy the perks of British classism rather than find their lives oppressive living under its increasingly dead weight.

Mellor reminds us that debt is, at the end of the day, just a social contract. Here, you could supplement this book by reading (or rereading) David Graeber's Debt: The First 5,000 Years or Eric Toussaint's The World Bank: A Critical History, one of which I have previously reviewed. Debt is, ultimately, an expression of control. The debtor yields control over the indebted. This control can come in a myriad of forms, and most potently expresses itself in the informational asymmetry present in most debt arrangements. The bank itself might hold considerable debt to other institutions, but will not disclose this, but will trap the potential debtee in a contract that makes the continued extraction of capital, with interest, impossible to avoid. The modern economy is almost designed to lure as many people as possible into this debt trap, with an understanding that most will never pay off the debt. Largely because paying off the debt is not profitable, whilst continually charging interest is. Of course, as wider swaths of the public find themselves with uncontrollable debt, the banks roll out the old Thatcher classic, there is no society, and it is the fault of those in debt that they are in debt, regardless of what may have driven them into debt in the first place, and regardless of these banks having been bailed out at considerable expense to the tax payer in 2007/08 for peddling volatile forms of this debt.

But of course, if we begin relieving for cancelling personal debt, won't the nation-state have to absorb it? I've been told my whole life that national debt is bad!

First, you have to examine who told you that sovereign debt is bad, and again Mellor does a great job of examining that, as does Mr Toussaint. Second, of course, it is worth interrogating, if Britain is indeed in such terrible debt, who holds British debt? Of course, the answer is the British people. Present budgets are based on debt incurred based on future tax that will be collected from the British people. If debt is a social contract, this ought to be a contract then with the British people. However, since the operating capital is sourced through the banks, yes largely British ones, then instead it becomes a contract with Barclays, HSBC, Royal Bank of Scotland, et al. But of course, since the nation-state is more than just another firm hanging out, we have other ways of structuring national debt. We can, for example, nationalise the banks (Godforbid) or structure the debt to better ensure that the people the debt is owed to, the public, don't get misrepresented by the banks as intermediaries.

We can acknowledge that a country and public resources are not businesses and do not, in fact, need to run for profit. We can knock off the hypocritical dog and pony show of 'balanced budgets' and 'fiscal responsibility' from the same people that keep bringing us speculative bubbles and economic crashes.

In the end, the way a society structures debt says everything about that society. In the Judeo-Christian Bible, it is made extremely clear at multiple points in the old and new testament that 'responsible borrowing' comes with jubilee years where all outstanding debt is wiped clean. An idea that modern right-wing Christians who believe in Biblical inerrancy remain shockingly quiet about. I guess gay and trans people are easier targets since they tend not to control capital. I don't want to say these Christian leaders are cowards punching down instead of speaking truth to power, but you know...

The way we presently structure debt in the UK puts the majority of financial pressure for the running of the country on the shoulders of people who already can barely afford to live in the country. Meanwhile, the people collecting the debt get millions of pounds even when they fail as 'golden parachutes'. Discussions of sovereign debt are then intentionally clouded by making China into a big scary boogeyman, despite China not holding enough of British sovereign debt to make a difference. (Of course, as Toussaint points out, Britain and America also calling out China for this tactic is rich, since Britain and America invented the tactic in post-colonial Africa and Asia, a nice example of accusing another of the crime you're committing).

China isn't after you. It's not benign either, and God knows I'm no fan of Xi Jingping style fascism creeping in and undermining Communism. A fact I'll write more about in the future, I'm sure, since these days the CCP is the elephant in the room that modern Marxists inevitably tangle with, the way the USSR was in days of old. But, it is important to remember two things about China, regardless of any legitimate criticism: 1) When it does play empire it borrows from the play-book of the UK and US. 2) When the USSR was around, it was accused of doing far more than it was actually capable of, something we're now aware of thanks to its collapse and the declassified documents.

Either way, when it comes to debates about sovereign debt, if the person involved brings up China, rather than the very real threat of domestic banks, you can assume they're knowingly or unknowingly covering for crimes visited domestically by the banks, and resorting to xenophobic scare tactics to ensure you're looking out for the foreign boogeyman and not Barclay's as Barclay's actively picks your pocket. Barclays, not only having been a historic funding of apartheid and other British atrocities abroad, has always been a bigger threat to the average Briton's lifestyle than Johnny Foreigner.

Mellor spends more time and energy outlining how the way we currently structure debt is oppressive to the majority of people in society, and alternative routes we can, and should take to build a better future that doesn't crowd out so many people. I sincerely recommend reading it, because to understand debt is to understand the way power itself is built in neo-liberal capitalism.