“my country is the colony of a larger colony”

Debt society: The power of morality and the immorality of power

Yannis Stavrakakis


In the heated public debate taking place while Greece falls deeper and deeper into the abyss of a prolonged economic and social crisis, moralistic and therapeutic arguments have prevailed from the beginning. On the one side, the dominant, one encounters self-flagellation. The Greek “particularity” is castigated as the only dissonance within the European “family”, with Greece being portrayed as a deviation from an idealized norm of European regularity. We have to do with the symmetrical reflection of a representation that initially dominated the international public sphere: the Greek crisis as a spreading virus, threatening to infect an otherwise healthy European organism. On the other side, blame is cast exclusively on foreign influences plotting to colonise Greece and induce its fall. Here, viral agents invade from the outside, posing a threat to the survival of a morally impeccable and clinically healthy national body.

It is evident that, especially when it comes to their most extreme formulations, both of the above interpretations suffer from the same selective targeting: they ignore or understate the deep and complicated relationships connecting the inside with the outside; relationships existing for decades, even centuries. Let us not forget the obvious: Greece has been a country integrated into the international capitalist system, the European Union and the Eurozone in a, more or less, functional way; a fact about which both Greek and European elites have been boasting up until very recently. Besides, that is why, in most cases, misconducts attributed to the Greek “particularity” did not occur in absentia of “normal” Europe, but rather with its active involvement. For example: By imputing the corrupt interplay between political structures and corporate interests to the moral and political deficit of Greek political culture, we fail to acknowledge that state suppliers – European corporations and the governments often acting as their sales representatives – have profited enormously from it. Furthermore, we also fail to acknowledge the fact that the European model itself has been involved in a process of transformation towards institutionally accepting the symbiotic linkages between political and financial interests, with popular sovereignty and vibrant democratic representation having largely been replaced by a post-democratic system of domination. A system in which, according to British sociologist Colin Crouch, while the formal aspect of democratic institutions remains more or less in place, elections are transformed into a “tightly controlled spectacle”, managed by professional experts and restricted to a set of issues selected by them, with most citizens reduced to a passive, apathetic role. Behind this façade – but not beyond the terrain of visibility – “politics is shaped in private by the interaction between elected governments and elites that overwhelmingly represent business interests”.

If indeed there is an “endemic disease” present here, it is no other than the multi-organ failure from which the European edifice itself is suffering, a disease presenting a different symptomatology depending on the member (state) under examination and the distinct, contingent course of its incorporation into the European architecture. The choreography of the crisis, which was not contained to the Greek case, not even to so-called PIIGS, and is now affecting the core of the Union, confirms exactly that. In other words, the disease has affected all the members of the supposedly healthy body, with European institutions – already incubating the notorious “democratic deficit” – functioning as its main host. To use the colonial/post-colonial vocabulary that has become fashionable once more – with a Habermasian twist –, if there is indeed some kind of colonisation going on here, then it affects the whole European lifeworld. In that sense, the claim that Greece is turned into a colony of a German Europe is clearly insufficient, to the extent that it fails to grasp the fact that Europe as a whole (including Germany, from where the enforcement of austerity has begun and to where it will eventually return), seems to have been turned into a “colony” of the most morbid neoliberal zealotism and its post-democratic, if not antidemocratic, dynamics. In other words, the (prophetic) lyrics of the Greek electronic music band Stereo Nova from 1992 ring true today more than ever: “My country is the colony of a larger colony”.


Paradoxes of debt

More than anything else, Greek sovereign debt has been highlighted as the main proof of the Greek “particularity”, as the core symptom of the Greek disease. Accordingly, over-indebtedness, the accumulation of debt, is being used in an orchestrated attempt to diffuse and individualise blame, aiming at legitimizing the enforced, unfair as well as ineffective, policies. It is here, however, that some really puzzling paradoxes start to emerge. Firstly, we must not forget that, up until a few years ago, the main proof of misconduct itself – over-indebtedness – constituted a social obligation for every self-respecting citizen and for every state entity as well – with the Greek state rushing to profit from the low interest rates made accessible through Eurozone entry. Secondly, how is it possible that the policies imposed to remedy this problem – the economic and moral failure of excessive debt –, while bringing the deficit very quickly under control, only promise to “stabilise” debt in 2020 almost at the same level it had in 2008-9, at the start of the crisis? Isn’t that revealing of the fact that, at least during this delicate phase, debt functions both as a failure and a pathology to be remedied but also – and most crucially – as a controlling mechanism to be sustained and utilized in the “proper” ways? 

This is, then, the paradox in which we find ourselves in. On the one hand, debt is declared unethical après coup, despite the fact that it functioned for decades as the central moral imperative of late capitalist consumerism. Subsequently, “divide and conquer” begins: blame for it is retroactively individualized –ownership is ascribed to particular states (first Greece, then the PIIGS), specific groups of people within states (first public sector workers feel the pressure and then private sector workers get steamrolled as well), and individuals (here a member of the loathsome trade union meets the immoral golden boy, the only difference being that while the first one loses even the very ground he had been standing on along with his “privileges”, the second continues to be rewarded, even today, with his notorious bonuses for his monumental mistakes), largely ignoring broader systemic inequalities. At the end of the day, a “pound of flesh” is demanded from all – with the normal exclusion of the elite of the super-rich, of course. On the other hand, debt is accepted as something that is here to stay, as something that needs to be somehow stabilized and protected – even “cultivated” – in order to be used as a tool to threaten, subject, control. 

How can we interpret this dual function of debt? Is it a “privilege” of countries put under troika “guardianship” and their citizens or does it constitute a generalized mechanism indicating the broader colonisation process mentioned above? We ought to perceive the general context, breaking free of obsolete polarities. Is it possible that it primarily constitutes a symptom of the neoliberal, post-democratic hegemony? A symptom that is, currently, skilfully converted into a tool allowing the reproduction of that very hegemony? A highly effective tool indeed, since it acts not only on the level of economic cycles but also on that of social control and subjective compliance?


The rise and fall of democratization?

The recent study by Maurizio Lazzarato, The Making of the Indebted Man, helps us provide some answers to the questions posed above and reflect once again on our recent experience, placing it into its wider context. Lazzarato cogently captures the ways in which debt functions as a technique of domination, as a technology of power, combining financial management with control over subjectivity. It is indeed a “multi-tool” the handling of which assumes a variety of forms throughout history, in order to capture, in a quasi-universal manner, a multiplicity of institutional entities and subjects. Indeed, no one can escape today the web of indebtedness, from states that are obliged to bail out their collapsing banks (transforming private to sovereign debt), to students, who, instead of scholarships now receive loans so that their life starts over-determined by a huge burden.

This is only the final act in a long historic drama. We know that the “bumpy” passage from early to late modernity has generally been associated with a process of gradual and relative democratization, which operated both in the political and economic realms. Politically speaking, representative democracy has enjoyed an unprecedented global spread; in the west, especially, political and social rights seemed to have flourished up to quite recently. Economically speaking, we have witnessed a “democratization of consumption” with the gradual spread of a consumerist culture of “luxury”: having emerged with the “conspicuous consumption” typical of Court Society, this ethos gradually colonised the bourgeoisie and then the lower classes, creating a predominantly consumerist society. Up to a certain point both processes progressed together and this is how the system managed to co-opt popular pressures and social movements and create relative stability.

However, the establishment and consolidation of neoliberal hegemony from the 1970s onwards, has brought the aforementioned process to an end. At first, this attack had targeted the democratic aspect of liberal democracy, the one associated with principles like popular sovereignty, political participation and equality: since the 1970s and 1980s, decision making has been gradually de-politicized and, to a large extent, entrusted to supposedly neutral organizations and authorities (such as “independent” central banks), market regulation has been abandoned or severely limited within an increasingly globalized horizon, business principles have invaded all aspects of public life, and centre-stage politics has entered the “post-political” era of professionalized “governance” beyond left and right. As for citizens, they mostly adopted a cynical and indifferent attitude, while losing many of their labour and other rights.


Neoliberal strategies

How did this post-democratic mutation achieve hegemonic status without the development of significant resistance?It is important to note that, at first, the post-democratic dynamic did not affect the “democratization of consumption”, although it signalled a significant increase in inequality. This delicate balancing act was accomplished through the accumulation of debt. The loss of political and social rights went largely unobserved to the extent that the lower strata could still function as consumers by getting more and more loans. As Lazzarato describes it, the neoliberal strategy was quite transparent: No to direct or indirect wage hikes, yes to the development of consumer credit that was lavishly granted to everyone: “You don’t make much money? Not a problem! Take out loans to buy a house, its value will increase, and that will serve as collateral on new loans” (p.110). Who can forget the offers for vacation and holiday loans with which banks bombarded consumers, even in Greece, where consumer credit was introduced comparatively late and where the elusive promise of redistribution involved mainly the public sector, thus affecting sovereign much more than private debt? At any rate, this was just the beginning of the story.

When this system reached its limits and the bubble begun to burst endangering the whole banking/financial edifice, the post-democratic political class declared banks “too big to fail”, thus giving to a wholly discredited system the opportunity to reorganize itself, turning its Achilles heel into a comparative advantage and a leverage. While the virtual and fragile “redistribution” of income through loans collapsed, the assumption by the states of the risks created by the banking sector allowed the initial blow to the neoliberal hegemony to be quickly transformed into a “a victory for the universal debt economy” (p. 122). Either because of being caught in the trap of consumerist over-indebtedness - living up to the moral imperative of the second spirit of capitalism – or because of being a citizen of a state eagerly having bailed its banks out, everyone is considered now to owe his own share of debt, “everyone is a ‘debtor’, accountable and guilty before capital. Capital has become the Great Creditor, the Universal Creditor” (p. 7).

Individualizing and moralizing debt turns it into “a universal power relation, since everyone is included within it” (p. 32). This does not, of course, refer solely to “guilty” and widely criticized Greece; it constitutes a universal formula: “Economists tell us that every French child is born 22,000 Euros in debt. We are no longer the inheritors of original sin but rather of the debt of preceding generations”  (p. 32). The sleight of hand here is evident: whether directly indebted due to his response to the consumerist call of the markets, to the moral imperative of commanded enjoyment, or indirectly, through the public financing of the banking sector, the citizen is on the losing end of the equation.

Now the burden of sovereign debt is used in order to threaten her with bankruptcy and credit-rating downgrade, as a scarecrow enabling the neoliberal side “to follow through on a program it has been fantasizing about since the 1970s: reduce wages to the minimum, cut social services so that the Welfare State is made to serve its new ‘beneficiaries’ –business and the rich– and privatize everything” (p. 10). If debt accumulation, creating and developing a power relation between debtors and creditors, was placed from the beginning at the “core of neoliberal political strategy”, if neoliberalism –since its emergence – had been founded on a logic of debt (p. 25), most crucially, it has also “seized on the latest financial crisis as the perfect occasion to extend and deepen the logic of neoliberal politics” (p. 29). Having initially facilitated our access to a “democratized” luxury in an increasingly unequal society, democratizing the Courtly ethos of “conspicuous consumption”, debt is suddenly revealed as a Trojan horse, reducing the “indebted man” from a virtual “aristocrat” to a “serf”, as Jean Baudrillard had predicted (p. 13).

What allows debt to function in such a flexible and effective way? Reconstructing its theological genealogy and revisiting the way it has been addressed by philosophy (especially Nietzsche, Foucault, Deleuze and Guattari), Lazzarato highlights debt’s capacity to surpass any ordinary economic relation. Apart from functioning as an instrument of macroeconomic control and redistribution, it primarily functions as a mechanism producing and controlling subjectivity (p. 29): “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” (p. 34). Cultivating particular types of morality, commitment and guilt, “debt breeds, subdues, manufactures, adapts, and shapes subjectivity” (p. 38-9). 


From indebtedness to responsibility

However, one should not assume that, in their function as a technology of power, relations of indebtedness are invincible. Debt commands great social power, but is also subject to the forces of temporality, as well as to resistances developing against neoliberal hegemony. What are the options available at this point? At any rate, Lazzarato warns us that cancelling the debt or rallying for its annulment is not enough. Albeit useful, it has, nonetheless, to coincide with a traversing of the morality of debt and of the discourse in which it keeps us hostage (p. 164).

Why is cancelling the debt not enough? Lazzarato does not refer to that, but I believe that his rationale prompts us to examine the operation of debt cancelation as a virtual technique of domination as well. Both enforced accumulation of debt as well as stigmatization and punishment of indebtedness constitute internal if antithetical moments of the same mechanism, utilizing subject construction in the service of social hierarchy. And what happens when the loop between the two fails? (Partial) debt cancellation and debt forgiveness, the so-called “haircut”, is called for to restore the dominant order. Let us not forget that even during the recent Greek adventure, we have already experienced a partial restructuring of sovereign debt, even though it did not actually improve the situation for the Greek “indebted [wo]man”. In fact, it seems that a new “haircut” is already underway, ready to take place after the German elections, serving as a reward for compliance. Isn’t it the case, however, that every “generous” debt-reducing gesture on behalf of the creditors is, in effect, eternalizing our obligation towards them, maximizing their moral and political lead, deepening thus the shadow of their dominance upon us?

We know that, historically, all three options (encouraging over-indebtedness, stigmatization/punishment and lastly, partial debt relief) have alternated in the service of power. Even debt cancellation has been used by pharaohs, kings and dictators to (temporarily) gain popular support. Thus the annulment or minimization of debt may indeed emancipate, but only to the extent that it manages to alter the ethico-political relation of domination and subjection operating at its very core. To use a familiar example, Solon’s Seisachteia, with its substantial contribution to the development of Athenian Democracy, introduced a new, more egalitarian ethos into political relations, responding to the demands of the demos, by granting rights as well as by assigning responsibilities



At this hypothetical point, of course, arises the fundamental question of the high and permanent responsibility emerging for everyone at the very moment s/he becomes emancipated from such alienating indebtedness. Freed from a restraining relation of debt, this “everyone” – together with hers/his co-citizens – will have to bear a more or less full responsibility for the future. No doubt a tough decision, with an unforeseeable cost and an uncertain outcome. Is this “everyone” prepared to withstand the heavy burden and successfully face the challenge?


PS. Drawing inspiration from The Making of the Indebted Man, by Maurizio Lazzarato, New York: The MIT Press/Semiotext, 2012.


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