Own the Bank

If you owe a bank a hundred thousand dollars, the bank owns you; if you owe a bank a hundred million dollars, you own the bank.

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Debt: A panel discussion

A panel discussion held at the Occupy! Gazette‘s Occupy Onward Conference, December 18, 2011, at the New School for Social Research, New York City. Transcript from Occupy! Gazette Issue 4.

David Graeber, Debt, The First 5,000 Years
Mike Konczal, The Roosevelt Institute
Brian Kalkbrenner, Occupy Student Debt
Sarah Jaffe, AlterNet
Moderator: Astra Taylor, Occupy! Gazette
Transcribed by Elisabeth Asher

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I think that we have to think of the system in a global context, absolutely, and we haven’t been emphasizing that here but I think all of us are well aware of that. We have this paradoxical situation, where you have what some refer to as debt imperialism. Well there’s an old joke: If you owe a bank a hundred thousand dollars, the bank owns you; if you owe a bank a hundred million dollars, you own the bank. It’s sort of the same thing: If Mozambique owes money to the US, Mozambique is in trouble. If the US owes money to Japan, Japan’s in trouble. It really depends on who’s got the guns. I’ve actually traced it out—you can look at the increase of the US deficit, the increase of the proportion of it that’s held abroad, and the increase in US military spending. It’s exactly the same curve. So basically what’s happening is that foreigners are paying for the US military that sits on top of them by making loans that are never paid, and just rolled over at a loss, and through Treasury bonds which act like gold and replace gold as the reserve currency of the world banking system, mainly spearheaded first by West Germany, when they were occupied by the US Then Japan, Korea, the Gulf States. Japan, China, even countries like Brazil are getting in on the game. (Of course it’s complicated. China seems to have a long-term strategy to hollow out the US and turn it into a military enforcer for East Asian capital.) We have this curious system whereby the US has this gigantic empire, which we can’t call an empire, the places that we occupy are sending us money, which we can’t call tribute so we call it a loan. And somehow we’re supposed to think this is just a problem with the balance of trade, that these guys are just sending us more stuff than we’re sending them, and, “It’s a real problem, isn’t it? We need to really do something about that!” It has nothing to do with the fact that we have this gigantic army sitting on top of them. If you suggest ways that it might, you’re a wing nut. We need to really make those connections—the whole money system has been linked to military systems for at least since the foundation of the Bank of England in 1694 and really much further back. That’s one of the things that an analysis of capitalism hasn’t really adequately addressed, how all those things are interlocked. I think that system is in crisis right now—that link between the military, what they call seigniorage, which is the term they make up for the economic advantage you get for being the guy who decides what money is. Which is essentially one of the big bases of American global power. It always seems to accrue to the guy with the biggest army. There is a crisis of that. We tried to pass off the crisis of the ’70s onto the third world. I think they fought back relatively successfully—the IMF has been kicked out, has come home. What we’re really witnessing, I think, in all of these social movements—and this is really a cheap cartoon version—is the struggle over the dissolution of the American empire and what’s going to replace it. I think we have reason to be optimistic. Because look at Europe! They lost their colonial empire; it’s not like the rich grabbed all the cookies. They ended up with health care and social security and welfare state.

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