2014-11-14 debts-inc

The development of tar production is often presented as a success story of pre-industrial Finland. According to this story, demand for tar in European naval powers integrated Finland into global market creating "a land of black gold". Tar created wealth and modernized even the backwoods. For a tar producer the reality was different. They got into debt.

In Northern Finland one still occasionally hears expression "run into debt like a tar rower". It means being in debt up to one's eyeballs. The expression in itself is humorous but it is based on darker historical side of tar trade.

It took a couple of weeks of oar pulling for a tar rower to get from Eastern villages of Kainuu to the tar town of Oulu. When he finally got there it was often the case that his expenses were greater than the income he got by selling tar to an intermediary trader. A debt relation was born: the rower had to loan money from the trader.

Following trips did not necessarily improve the situation. Debt accumulated on debt and soon the rower could owe money to both the intermediary trader and the crown in form of back taxes. At the end it was often the case that property and house were put into bailiffs and distrained.

Tar rowers do not exist anymore, but debt is here to stay. Previous story reveals that debt is always a power relation maintained by force at the end.

Debt also structurally binds people into dynamics of the economy. Back in the days of tar economy, people could be more motivated by traditional means of living such as agriculture and hunting than they were by tar, which was not a good source of income. Burdened by debt and taxes it was however necessary to produce tar to get financial gains. Thus early Finnish capitalism did not follow the ideals of free market but was powered by compulsion born from debt. This is also the case with modern capitalism.

Documentary film Debts Inc. by Austrian filmmaker Eva Eckert reveals the harsh ontology of debt. Nothing is sacred when collector agencies and private detectives threaten debtors and collect credits that have multiplied compared to the original debt. For these collectors best client is not the one who regularly pays off his debts but the one with payment defaults. When payment difficulties emerge banks, credit firms and collector agencies start attacking and making high profits by usury.

Philosopher and sociologist Maurizio Lazzaro emphasizes in his book The Making of the Indebted Man (Finnish translation Velkaantunut ihminen, Tutkijaliitto 2014) that the social relation of debtor-creditor lays at the very core of neoliberalist economy along with the relations between work and capital and consumer and producer. Lazzarato also claims that this debt economy of our time will finally engage workers, the unemployed, consumers and producers of both public and private sector services and makes them all debtors – "guilty in the eyes of capital".

Debt and moralism have always been connected. Debt, laying the guilt on someone and sin are closely related in modern society's moral codex, too. Debts must be paid, in one way or another. It would be a sin not to pay. No matter there once was a revolutionary who said: "And forgive us our debts, as we also have forgiven our debtors." Debt relation does not however have to include any golden law of morals about always paying back. Debt is a social relation that should be open to negotiation. The solution for the maelstrom of debt economy is not squeezing households and entire nations to near death but cancelling the debt.

Anthropologist David Graeber describes in his book Debt – First 5 000 Years the way debt has brought about revolt and revolutions since early history. Debt created economic instability, concentrated power into the hands of few and eventually heavily burdened the majority of population. Following revolutionary movement however pressured the rulers into debt amnesty. For instance the Sumerians set free farmers driven to slavery at regular intervals. Jewish tradition in the Old Testament advises to have a Jubilee and cancel all debts, release slaves and restore inherited lands to their original owners once in fifty years.

So debtors have always been inventive in finding ways to defend their rights. How could they collectively rebel in a neoliberalist debt economy? One example of this is the American Strike Debt movement. Their Rolling Jubilee campaign aims at concrete means of struggle against the creditor power relation. Rolling Jubilee utilizes financial market by inverting their logic.

They have collected more than 700 000 dollars by crowdfunding to be used to buy debts from secondary market. Loans in the secondary market can be bought at a fraction of the original price, because financial enterprises only dump their loans there when they have serious doubts about repayment. Rolling Jubilee buys these loans but unlike speculators they do not wrap these loans together to make more business out of it but abolishes these debt relations and liberates debtors who have accidentally run into debt. Through a campaign of "mutual support, good will, and collective refusal" they have managed to abolish more than 18 million dollars of debt.

Rolling Jubilee cannot by itself solve the rat race of global economy, but it may bring people together by an old and simple yet radical motto: Debts that cannot be paid back won’t be paid back.

 

Translation by Eija Pohjansaari

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