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Creditocracy and the Case for Debt Refusal

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Creditocracy (n.)
1. governance or the holding of power in the interests of a creditor class
2. a society where access to vital needs is financed through debt

It seems like pretty much everybody – homeowners, students, those who are ill and without health insurance, and, of course, credit card holders – is up to their neck in debt that can never be repaid. 77% of US households are seriously indebted and one in seven Americans has been pursued by debt collectors. The major banks are bigger and more profitable than before the 2008 crash, and legislators are all but powerless to bring them to heel.

In this forceful, eye-opening survey, Andrew Ross contends that we are in the cruel grip of a creditocracy – where the finance industry commandeers our elected governments and where the citizenry have to take out loans to meet their basic needs. The implications of mass indebtedness for any democracy are profound, and history shows that whenever a creditor class becomes as powerful as Wall Street, the result has been debt bondage for the bulk of the population.

Following in the ancient tradition of the jubilee, activists have had some success in repudiating the debts of developing countries. The time is ripe, Ross argues, for a debtors’ movement to use the same kinds of moral and legal arguments to bring relief to household debtors in the North. After examining the varieties of lending that have contributed to the crisis, Ross suggests ways of lifting the burden of illegitimate debts from our backs. Just as important, Creditocracy outlines the kind of alternative economy we need to replace a predatory debt-money system that only benefits the 1%.

282 pages, Paperback

First published February 20, 2014

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About the author

Andrew Ross

142 books44 followers
Andrew Ross is Professor of Social and Cultural Analysis at New York University, and a social activist. A contributor to The Nation, the Village Voice, New York Times, and Artforum, he is the author of many books, including, most recently, Bird on Fire: Lessons from the World’s Least Sustainable City and Nice Work if You Can Get It: Life and Labor in Precarious Times.

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Displaying 1 - 4 of 4 reviews
Profile Image for Lucas.
24 reviews28 followers
January 3, 2015
After reading some poor reviews on this book I thought I should clarify some things. Creditocracy introduces the concept of oppressive lending not only from the perspective of American debtors but also delves into the history of the Global North exploiting the Global south through loans. Andrew Ross pushes for a collective default on loans in order to resist debt that realistically society will not be able to pay back which could result in yet another economic catastrophe.

Regarding the reading level of this book, it is mostly college level reading. Andrew Ross does cover important political and economic issues. However, Ross does take the time to explain what he means and expresses his thoughts clearly throughout the book. Unlike other books on the debt crisis Ross presents the facts and statistics up front and does not spend chapters trudging though theoretical and philosophical arguments.

This book is a fascinating and thoughtful look into one of today's most pressing issues and is accessible to a large audience. I highly recommend to those who want to learn more about the extent of debt crisis.
Profile Image for Malcolm.
1,767 reviews433 followers
August 31, 2014
One of the more interesting off-shoots to emerge from the Occupy phenomenon of 2013 was Occupy Debt, a trajectory based principally in the USA and centred to a large degree on student debt but with debt gaining profile in association with opposition to mortgagee sales and householder evictions by banks that had provided the loans that have now become known as toxic. Occupy Debt set out to get those with unsustainable student loans to pledge to refuse repayment, citing among other things changes in jobs and levels of wages that meant student debt was not sustainable (it is worth noting here that student loan related debt is explicitly excluded from US bankruptcy provisions: the debt never goes away, even with the debtor’s death). The effort to get former-students to sign up and pledge was largely unsuccessful, even though more students defaulted on their debt in 2013 than the target for pledges.

Andrew Ross was one of the most high profile academic supporters of Occupy Debt, as well as active in OWS; he is also one of the major US activist academics on these issues and a significant public intellectual both in his scholarship and in the use of his scholarship in public debates. In this extremely good piece of academic activism he sets out to act as an advocate for debt refusal. Note: this is not debt forgiveness (that implies many of the debts are legitimate) but a refusal to repay illegitimate debt. He builds the case around three principal forms of debt pervasive in the US and other late capitalist economies: housing, education and health. He highlights the emergence of debt as a major force in late capitalist economies (even though at a personal level we do not call it debt but credit – cards and store: this is one of the great sleights of language in contemporary finance and banking). Debt, he argues, is now so pervasive that we are revolving debtors, borrowing to pay debts and seldom if ever paying off all our debts (to the extent that banks take as a sign of pending malpractice someone who clears all credit card debt in a short period).

This exploration of the presence and development of debt in the US is a powerful complement and supplement to Maurizio Lazzarato’s The Making of the Indebted Man and provides some of the specific evidence that essay needs to build a more compelling case. Ross enhances Lazzarato’s work by also adding flesh to his case that those who fund the debt economy and provide the underpinning of and benefit from the creditocracy also actively undermine the basic principles of the forms of government we take to be democratic.

The fourth strand to the analysis, and for me as a non-US-based reader the most useful, deals with climate debt; the debt owed by the global North for the extraction by imperialism and colonialism of the resources of the global South (people, raw materials and so forth) that sustained economic growth. This strand highlights the imbalances in the global economy, reminds us that business as usual (what some critical economists call the BAU model of practice) cannot continue, which leads to his closing argument that the linkage of debt and growth must be broken, and that growth in the form we have come to expect as a basic premise of capitalism cannot continue.

The case for debt refusal is powerful: debt is a form of wage theft in Ross’s analysis comparable to unpaid internships and the use of prison labour – both of which have grown along with debt – and the structural reliance on revolving debt means that much of our debt burden is immoral and hence refusal is legitimate. Ross favours the sorts of horizontalist responses we have seen associated with Occupy; as useful as they are, and as potent as they may be as pre-figurative politics, the challenge in an internationalist campaign, as debt refusal requires, is one of scale. So far, horizontalism has shown some power as a local organising form – in city squares, occupied factories and business and so forth – but we have yet to work through the forms we need to make it work in larger settings, contexts and struggles.

The US focus and its specific evidence made the book more remote from my work (meaning that we need the sort of evidence Ross has gathered to be built up in other national and supra-national contexts). That said, this is a powerful piece of advocacy, it highlights the problem of debt not as an individual phenomenon but as a structural economic force and as power system, creditocracy. This is valuable and important reading that fills in gaps in some of the more conceptual writing about debt and credit, adds depth to some of the more journalistic and individualistic stories that circulate, undermines conventional economic approaches, provides a powerful justification for debt refusal and highlights areas where the struggle can and should be developed. An import piece for activists concerned that there is more to the struggle than shouting against austerity.
Profile Image for Tony.
154 reviews44 followers
December 29, 2014
I'm very confused as to who the expected audience for this book is meant to be. It's been described as a “movement book”, that is “lucid and accessible”, but it's the densest book I've read in quite some time. (HemingwayApp gives the first chapter's reading level as Grade 18, with 55% of sentences at post-college-level “Very Hard to Read”, and a further 20% at college-level “Hard to Read”. The remaining 25% of ‘simple’ sentences are either quotes, or tend towards “This reshuffling of the merits attached to citizenly conduct is quite telling” or “The first structural adjustment loan was made shortly after Volcker’s monetary shock therapy.”)

The book claims to be “a work of moral commentary and political advocacy, not academic analysis”, but unless it's trying merely to persuade his fellow university professors, I'm far from convinced it'll make much of a dent at all.
Profile Image for Gabby.
9 reviews
April 2, 2015
Very interesting argument on Credit in America. Was required reading for one of my college courses. A bit dry, but most non fiction is. Only was assigned to read a few chapters, but plan to finish this upcoming summer (2015).
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