2013 Articles

Democracy and Debt

Ross, Andrew

"Another sign of a failed democracy is when a supranational body is allowed to bypass the power of an elected government in order to dictate policy, either directly or through setting terms that circumscribe choices. Most recently, sovereign debt crises have placed several Eurozone nations in this quandary; their economic affairs are largely determined by the European Union’s so-called troika—European Commission, European Central Bank, and International Monetary Fund (IMF). The IMF has a long history in this regard as an enforcer for foreign bondholders, especially in imposing structural-adjustment policies on indebted nations in the global South. ...
But what do we call a democracy that permits its financial elites to hold the citizenry in near-servitude through usurious debt contracts? Can a democracy be considered healthy when household debt so constrains populations that their life choices are effectively voided, and when the monopoly of creditors extends beyond the economic realm to the political control over lawmakers? These were the circumstances under which activists gave birth to Occupy Wall Street (OWS, Occupy) in the fall of 2011. In the four years since the collapse of Lehman Brothers precipitated the US financial crash, the asymmetrical treatment doled out to debtors and creditors had become so familiar and routine that the ubiquitous Occupy street slogan 'Banks got bailed out, we got sold out!' required no explanation. In Europe, where elites tried to pass on the costs of their sovereign-debt crises to the most vulnerable populations—the young and the poor—marchers favored a more defiant posture: 'We won’t pay for your crisis.'"