It’s been ten years since the Occupy Movement filled streets across 82 countries with protesters decrying the rampant political and economic inequality exposed in the aftermath of the 2008 financial crisis. Davep, of the Public i editorial collective, looks back at his own long path to Occupy in this multi-part contribution.
Life in Late Capitalism: Freedom of Choice or Panic and Emptiness?
Prepare yourself: this isn’t a neutral, scholarly exploration of the most important social movement of our era. I am not an economist, or a business person, or a mathematician—I have a background and education as a musician, composer, poet, artist, anarchist and activist going back to the 1980s. I am also firmly in the 99 per cent that the Occupy Movement represented. I was born poor and remain poor, a fact I am not the least bit ashamed of, perhaps due to my ability to see my own history in light of a larger picture. It is that micro-macro perspective that I want to share with you now.
Growing up in Gary, Indiana, I was always acutely aware of what was happening to me and those around me as living conditions eroded. I watched how the switch to automation in factories devastated manufacturing jobs and, during the long hot summer of 1969, I got a close-up look at activism when family members were arrested during wildcat strikes.
By my teen years in the Thatcher/Reagan ’80s, the decline became exponential and I struggled to understand the world around me. Neither amerikan-style kapitalism, nor Soviet-style, centrally-planned state kapitalism provided any hope for the future. Despite the oppositional rhetoric of the dastardly “Cold War binary” driving history, it was clear that both poles were complete failures. Even as a teen I could see that.
My intellectual explorations were both literary and musical. Punk led to anarchism, which in turn led me to the Italian autonomist marxists of the ’70s and ’80s. My reading branched into Situationist cultural theorists like Raoul Vaneigem and Guy Debord. These were unbelievably “dark times” for those of us at the bottom of the American dream, and it’s not surprising that I found solace in the screams of Johnny Rotten, who snarled sarcastically as he predicted, “No Future!!” And he was right.
Ticks and Leeches: Debt Trap!
I didn’t really think it could get any worse, but during my college years it did. As wages and employment conditions declined through the ’80s (a decline which began in the ’70s, but accelerated under “the Gipper”) and the cost of living rose, kapitalism needed a fix. It needed a way to keep consumer spending stable despite shrinking incomes, and its answer was debt. For kapitalism, consumer debt was a magic pill; it protected industries from pressure for higher wages as it hid the inadequacies of salaries behind a personal line of credit that could be used for groceries, new school clothes, or a television. Why strike for a higher wage to buy ever more expensive groceries, or to pay utilities? Simple—just put it on the card!
The personal credit market was a “shell game” of the highest order, that shifted workers’ reliance on wages to reliance on debt to meet even basic household needs.
In fact, credit worked so well at preserving consumption that the same scheme appeared nearly everywhere. Appliances! Department stores! Cars! … Debt kept spending up and wages low, and high interest made the personal credit industry a lucrative market in itself.
By the 2000s, consumer credit had become the most lucrative sector in banking, yielding an industry average of 8.5 per cent on the dollar. But in the markets available to “sub-prime borrowers” (a clever phrase to denote those most economically vulnerable), higher interest rates, fees and penalties yielded profits up to 28 cents on the dollar. And it was a mammoth market. In 1980, credit card debt in the U.S. was at $54 billion; by 2018 it stood at over $420 billion—all as real wages declined. The poor were a captive and lucrative market.
Of course, behind these industry profits were households struggling to survive. But debt also helped shift the blame for poverty—if a family ended up in credit card debt hell, it felt, and was portrayed, as a personal moral failing, not a reflection of a collapsing job market that could no longer provide a living wage. Families felt the shame and the squeeze from both sides: pressure to live up to the consumer expectations of middle-class life in a society oriented towards prestige display, and pressure from the financial extortion of predatory lending. Ironically, having personal debt brings less disgrace than appearing poor in consumer capitalism.
Candide Gets F****d
Student loans were barely existent in the early ’80s—I didn’t even know there was such a thing. And then, in the spring of 1985, the consumer credit economy hit me when I had to go into the financial aid office at Indiana University. “Because of changes in the budgets and funding, you will need an estimated $8,000 to $10,000 a year in loans to finish your degree,” the woman said calmly. “What!?,” I responded in shock. “Just go to a bank and apply,” she said, like it was nothing. “You can get the loan, but depending on your family’s income, which bank it’s through, and other factors … the interest might range from 15 to 25 per cent. Here’s a brochure—so choose wisely.” How she said that with a straight face, I’ll never know. And the last part, “choose wisely,” had to be one of the bullet points from a memo straight from Reagan’s desk. How were uneducated young adults supposed to choose wisely in going up against slick financial marketing?
Luckily I was a street kid, and my “bullshit detector,” as The Clash called it, was excellent. “F**k that shit!!,” I caterwauled like Mr. Rotten, and stormed out—slamming the door behind me and making myself scarce before the campus police arrived.
The spring of ’85 was the end of my first “college experience.”
I didn’t know it then, but my experience was part of that shift to a debt economy in education. The government entered the subsidized loan business in 1965, but that didn’t mean that all students were getting lower interest loans; it did mean that universities increasingly expected students to fund their education by borrowing, and that included students like me, who were told to walk over to the bank. And even under the Guaranteed Student Loan Program, the only thing actually “guaranteed” is bank profits, as the bank gets all its money back in a lump sum if the student defaults. The Feds made it easy for the banks by taking over the job of enforcing the loan through the Department of Education, like the IRS does for back taxes. There is no declaring bankruptcy either—student debt is FOR LIFE! With no escape, plus interest and fees of course.
By 1986 student loans had “skyrocketed to $10 billion,” which shocked naive experts at the time. But by the crisis of 2007–08, student debt was at $600 billion, and as of the latest 2018 figures the level is now over $1.6 trillion—and rising fast. In 2012, 20 per cent of all households in the US were burdened by student debt payments. That includes 40 per cent of the population under the age of 35—those entering “prime earning years,” in the Old World paradigm.
The Occupy Movement was part of a global reaction to the collapse of 2008 and the way the responses contributed to economic inequality, but, in the U.S., anger over the student loan and personal credit industries became the focus for the protests. The September, 2011 sit-in at New York’s Zuccotti Park on Wall Street resonated with a generation drowning in personal debt amidst the collapse of wages and social services, while being blamed for their failure to “manage their finances.” “Occupy” was a refusal to accept that blame.
From the Temple of Extraordinary Madness—Champaign, Illinois… on Turtle Island… planet Earth… 3rd rock from a random star… in the Milky Way galaxy… of an arbitrary universe… in an unbelievably minuscule and immeasurable point in time… towards the end of an indifferent Yuga, and the beginning of one glorious monster of a crack-up.