The burden of unpayable debt is rising rapidly worldwide. In the U.S., household debt leaped from 65 percent of income in 1975 to more than 100 percent in 2001. Bankruptcies, individual and corporate, are near records.
Seeking security for their bankrupt system, billionaire lenders are trying to deepen debt bondage. A “bankruptcy reform” bill they are now pushing through Congress would leave “people … in economic slavery for five years,” warns Rep. Bobby Scott (D-Va.). Under this bill, families’ top priority will be debt service, not food, shelter or education.
“The Pennsylvania Act of 1785 allowed the flogging of convicted bankrupts who were nailed to the pillory by the ear, and afterwards the ear was cut off,” the Cato Institute recalled recently. Cato is not advocating clipping ears, but it does not challenge the sanctity of debt.
Hundreds of thousands of indebted immigrants in the U.S. – a high proportion undocumented and women – labor today in conditions of indentured servitude. Youth face another form of indenture: bankruptcy laws already exclude forgiving student loans, while millions of young workers are condemned to unemployment or poor-paying jobs.
What does the future under capitalism have to offer? “Workers in Bondage.” That’s how Business Week headlined the life of hundreds of thousands of indebted immigrant workers in Western Europe. Conditions ranged from imprisonment in industrial sweatshops to outright sex slavery. And that was in 2000, when capitalism was ostensibly booming.
“We are just seeing the tip of the iceberg,” UN official Pino Arlacchi told Business Week. “It’s the fastest-growing criminal market in the world.” Arlacchi is the author of Slaves: The New Traffic in Human Beings. Children of indebted parents, some as young as 11, are forced to work as much as 20 hours a day, seven days a week.
The business journal Fortune recently drew a horrifying picture of debt bondage in Asia. “For the privilege of working 12-hour shifts seven days a week in a [Taiwan] factory where she makes plastic casings for Motorola cellphones,” Fortune reported, “Mary, 30, will be in debt for years to come. Mary already owes every penny she earns. In the circular, crazy logic of the global labor economy, she owes the money precisely because she has a job. And she is bound to her job as a result of her debt. Once it would have been called indentured servitude. Today, in some parts of the world, it’s called standard hiring practice.”
The article documents widespread debt bondage in factories in Taiwan and S. Korea. The factories draw on desperate workers from the Philippines, Thailand, even Vietnam. “With so many independent monitors now assessing labor rights and working conditions in manufacturing plants, it’s hard to believe that [Motorola, Nike, Ericsson and other imperialist contractors] would be completely ignorant of debt bondage in their supplier companies,” Fortune writes.
Debt represents the terrible weight of the past, of a failing capitalist system, bearing down on the present and the future. Japan, and now the U.S., are rapidly headed into a Brazilian’ situation, where debt service stands in the way of every human need. Already, state and local governments in the U.S. are starving education, even homeless shelters, to service massive debts.
Because of capitalism’s instability, most third world debts currently owed a few multibillionaires will never be repaid. As Brazil and others have learned, postponing repayment – a so-called debt moratorium – only sets the stage for greater problems.
The real alternative is whether these debts will be repaid on the terms of the capitalists or the workers. Millions around the world already know that the capitalists’ terms only lead to bondage, looted pensions, misery.
On the workers’ terms, all debts to the billionaires and their agents will be canceled. But debts owed to workers, small businesses, the self-employed – such as back wages and pensions – will be honored. The struggle to cancel debts on workers’ terms points to the day when humanity, rather than being crushed by the past, thrives on its accomplishments.
The author can be reached at pww@pww.org
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