Via Global Voices, I came across a post that got me thinking. At first I found myself agreeing with the sentiments, but then I began to reconsider.
The post, by Gil. C. Schmidt, was entitled Eager to Be Slaves, about Puerto Rican propensity for credit. The basic gist was that people buy too much on credit, and become economic units with scarcely more freedom than a beast in harness. I liked the excessive prose, such as Many people work, not to live, but to merely stay in the same place, running a daily treadmill of miserable despair, fearful that without this agony, their house of cards will collapse. Who owns their heart?, and Many people … consume to maintain “an image”? Who owns their mind?. The post didn’t really take the idea beyond the surface level that odious debt is enslaving.
However I began to disagree when it seemed to me that the notion of ownership was being portrayed as an unquestioned good. What is ownership? What is it to own something? All else being equal, it makes no difference if I own a car, or a car leasing company does. I get to use it. Buying into the blanket notion that success or independence means owning things is false – it’s part of the same enslavement mentioned above. Owning things is a responsibility, and in that sense is restricting of freedom. You either devote energy to protecting it from those who want to take it away, the wealthy imprisoned with and by their possessions in their gated communities, or devote energy to making sure its used properly, sharing it with those who could make better use of it at that time, or you shirk your responsibility and let the item go to waste, gathering dust in the garage. Either way, not owning it is easier.
The Cape Town community currency I’m involved with demonstrates the success of credit. Recognising that monopolistic, private ownership of the ability to grant credit is one of the factors behind poverty and inequality, it’s based upon the premise that the community grants credit. Everyone starts on zero, and can go into the negative, which I prefer not to call debt. Ideally, as long as the community recognises a person’s continuing contributions to the community, there is no problem with a negative balance. No one charges interest, further impoverishing those in the negative. No one earns interest on a positive balance, earning money without contributing, and rewarding hoarding. If there was no credit, there’d also be no one earning, and economic activity would come to a halt.
I’ve managed to ‘retire’ at 34. There’re a number of reasons I managed to do this. Mostly it’s luck, but it also helps that I don’t have any credit, and don’t spend very much. There’s no car to pay off, no house, no big bills. I don’t feel any sort of restriction on what I can or can’t do, but I also don’t tend to spend very much. A good day for me is walking in the mountain, not snorting R500 worth of cocaine after paying R100 entrance to an exclusive club. However, it was credit that allowed me to do this. I borrowed money from the private banks, helping to make them even richer, but it managed to help me to buy property I could never have afforded by saving. Now I rent these out, and that pays for my basics. Disregarding my qualms about property ownership (and that’s where, perhaps conveniently, it starts to get fuzzy if I try to get my head around everything), its credit that allowed me to do this.
So debt is not enslaving per se – it all depends how you use it.