Understanding Debt as the Basis of Social Life


‘Understanding Debt as the Basis of Social Life’ The Indebted Man ( ) 13-


“With the explosion of “precarious” work (short-term, occasional, seasonal, temporary) advantageous to business, the compensation system is now “structrually” in the red.


The deepening national debt is one of the principal results of neoliberal policies, which have sought, since the mid-1970s, to transform the financing structure of Welfare-State spending.


This is what is called “Central Bank Independence,” which, translated into normal language, means in practice a dependence on markets, since these laws make it necessary to turn to private creditors and submit to the conditions dictated by shareholders, bondholders, and the other owners of securities.


The “capture” of value also affects businesses. Neoliberal policies have transformed them into mere financial assets as they “pay more money to their shareholders than their shareholders pay out.

In the US and the UK, the level of household debt relative to disposable income is, respectively, 120% and 140%.


Through consumption, we maintain an unwitting relationship with the debt economy. We carry with us the creditor-debtor relation – in our pockets and wallets, encoded in the magnetic strip on our credit cards.

Indeed this little strip of plastic hides two seemingly harmless operations: the automatic institution of the credit relation, which thereby establishes permanent debt. The credit card is the simplest way to transform its owner into a permanent debtor, an “indebted man” for life.

Through the simple mechanism of interest, colossal sums are transferred from the population, business, and the Welfare State to creditors.

The so-called “real” economy and business are but aspects of the capitalist process of valorisation, accumulation, and exploitation: “On closer examination, the financial system is perhaps the most oppressive.” [Gabriel Ardent]


Credit is “one of the most effective instruments of exploitation man has managed to create, since certain people, by producing credit, are able to appropriate the labor and wealth of others.”


What the media calls “speculation” represents a machine for capturing and preying on surplus value in conditions created by modern-day capitalist accumulation, conditions in which it is impossible to distinguish rent from profit.

The process converting control over capital production and property, which began in Marx’s time, is now complete. The “actual functioning capitalist”, as Marx noted long ago, is transformed into “a mere manager, in charge of other people’s capital,” and “the capital owner” into a financial capitalist or rentier.

We must therefore remove all moral connotations from the notion of rent. The euthanasia of the rentier, his eviction from the economy, contrary to what Keynes had in mind, which was that it become the watchword of capitalist restructuring following the 1929 crisis, would not mean the euthanasia of “speculation” but of capitalism itself. It would mean that the death of private property and patrimony, the two political mainstays of neoliberal economies.

All of modern-day capitalist accumulation is, moreover, comparable to rent.


The real estate market, the continual rise in housing prices, constitutes a kind of rent […] in the same way we pay a rent for intellectual property each time we buy a product covered by copyright.


Reducing finance to its speculative function neglects its political role as representative of “social capital” (Marc), which industrial capitalist will not and cannot concede, as well as its function as “collective capitalist” (Lenin, which, through governmental practices, bears on society as a whole. It also neglects the “productive” function of finance, its ability to make profits.

Moreover it is impossible to operate finance from production, since the former in an integral part of every sector of the economy.


Neoliberalism has pushed for the integration of monetary, banking, and financial systems by using techniques revelatory of its aim of making the creditor-debtor relationship a centrepiece of politics.

In the current crisis the relation between owners (of capital) and non-owners (of capital) has expanded its hold over all other social relations.


We do not intend here to analyse “finance”, its internal mechanisms, the logic guiding traders’ decisions, etc., but rather the relation between creditor and debtor.

In other words, contrary to what economists, journalists, and other “experts” never tire of repeating, finance is not an excess of speculation that must be regulated, a simple capitalist function ensuring investment. Nor is it an expression of the greed and rapaciousness of “human nature” which must be rationally mastered. It is, rather, a power relation.

Debt is finance from the point of view of the debtors who have to replay it. Interest in finance from the point of view of creditors, security-holders who guarantee they benefit from debt.


Now that we have established that the current crises are not the result of some kind of uncoupling of finance and production, of the so-called “virtual” and the “real” economy, but are instead indicative of the bank of power between creditors and debtor, we shall now examine the growing hold of debt on neoliberal politics.

If debt is indeed central to understanding, and thus combating, neoliberalism, it is because neoliberalism has, since its emergence, been founded on a logic of debt.


States have not stopped at opening up financial markets, however; they have assisted in establishing the organisations and structures needed for them to thrive.


Monetary policies, wage-deflation policies, Welfare State policies (reductions in public spending), and fiscal policies (transfers of several points of GDP to corporations and the populations wealthiest in all industrialized countries) have come together to create enormous public and private debt.

Debt reduction, which is now the order of the day in all countries, does not run counter to debt creation, since debt serves to prolong and expand the neoliberal political program.

On the one hand, it means taking back control of “social issues” and Welfare State spending through austerity measures, that is, taking back control of revenue, time (of retirement, vacation, etc.), and the social services that have been wrested through social struggle from capitalist accumulation.


On the other hand, it means pursuing and expanding the process of privatisation of Welfare State services, that is, transforming them into a sector for accumulation and profitability for private enterprise.


The privatisation of social insurance mechanisms, the individualization of social policies, and the drive to make social protections a function of business constitute the foundations of the debt economy.

Debt acts as a “capture,” “predation,” and “extraction” machine on the whole of society, as an instrument for macroeconomic prescription and management, and as a mechanism for income redistribution. It also functions as a mechanism for the production and “government” of collective and individual subjectivities.


[Orléan]: “ We have moved from Fordist regulation, which privileged the industrial and debtor side, to financial regulation, which prioritizes the financial and creditor side.”

The creditor-debtor relationship encompasses capita/labor, Welfare-State services/users, and business/consumer relations, just as it cuts through them, instituting users, workers, and consumers as “debtors”.

The “morality” of debt results in the moralisation of the unemployed, the “assisted”, the users of public services, as well as of entire populations.


The power of debt in inscribed as if it were exercised neither through repression nor trough ideology. The debtor is “free”, but his actions, his behaviour, are confined to the limits defined by the debt he has entered into. […] You are free insofar as you assume the way of life (consumption, work, public spending, taxes etc.) compatible with reimbursement.

The creditor’s power over the debtor very much resembles Foucault’s last definition of power: an action carried out on another action, an action that keeps the person over which power is exercise “free”.


Neoliberalism governs through multiple power relations: creditor-debtor, capital-labor, welfare programs-user, consumer-business, etc. But debt is a universal power relation, since everyone is included within it.

We are no longer the inheritors of original sin but rather of the debt of preceding generations.

The concept of speculation only covers one aspect of how debt works and prevents us from seeing how it produces, distributes, captures, and shapes subjectivity.


Viewing debt as the archetype of social relations means two things.

On the one hand, it mean conceiving economy and society on the basis of an asymmetry of power and not on that of a commercial exchange that implies and presupposes equality. It introduces power differentials between social groups and redefines money, since debt is immediately present as a command, as the power of destruction/creation over the economy and society.

On the other hand, from this perspective debt means immediately making the economy subjective, since debt is an economic relation to which, in order to exist, implies the holding and control of subjectivity such that “labor” becomes indistinguishable from “work on the self”. Throughout the present essay we intend to corroborate, in light of debt, a truth concerning the entire history of capitalism: what one defines as “economy” would be quite simply impossible without the production and control of subjectivity and its forms of life.


The production of subjectivity, of forms of life, of forms of existence, is not part of a superstructure, but rather of an “economic” infrastructure. Moreover, in the current economy. the production of subjectivity reveals itself to be the primary and most important form of production, the “commodity” that goes into the production of all other commodities.


With regard to money, the authors [Deleuze & Guattari] maintain that it does not derive from exchange, from mere circulation, from the commodity; nor does it constitute the sign or representation of labor. It is instead the expression of an asymmetry of forces, a power to prescribe and impose modes of future exploitation, domination, and subjection.

Money is first of all debt-money, created ex nihilo, which has no material equivalent other than its power to destroy/create social relations and in particular, modes of subjectivation.

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