On Contact: Economic disobedience and debt abolition

CH: Most people in the United States are burdened by staggering amounts of debt.  They accrue mounting debt because they are forced to debt finance, healthcare, education, housing, and even the cost of their own incarceration.  When they fall behind on payments, banks, credit card companies, and collection agencies impose steep penalties, exorbitant interest rates and loan denials along with decimating credit scores, forcing the destitute into the arms of payday lenders who charge as much as 800% on short-term loans.  Student debt is over $1,700,000,000,000.  Personal debt is over $14,000,000,000,000.  At least 87 million US residents lack adequate health care coverage, meaning a medical emergency plunges them further into debt, especially since 40% cannot afford an unexpected $400 expense.  Sixty-two percent of personal bankruptcies in the United States are linked to illness and health care costs.  Over 40 million US citizens live in poverty, including more than 40% of all children.  Half of all workers live paycheck to paycheck.  Twelve percent experience food insecurity and hunger.  Nearly one in five renters were unable to pay their landlords regular monthly installments in 2017.  And with the pandemic, an estimated 10 to 14 million households are so far behind on their rent payments that they face the danger of being evicted.  This debt peonage is not accidental.  It is by design, an effective form of social control by a ruling elite that sees $8 out of every $10 we produce go into the pockets of the richest one percent.  The result of wages that have been ruthlessly suppressed since the mid-1970s, the destruction of labor unions, deindustrialization and offshoring of jobs, a gig economy where workers do not have benefits or job protection and austerity programs that have decimated the social safety net.  This is the bad news.  The good news is that there is an organized effort to fight back.  Joining me to discuss the effort to form a debtors’ union that engages in economic disobedience and debt refusal is Thomas Gokey from the Debt Collective.  So, let’s talk first as you do in the book about the use of debt peonage as a form of social control, because this goes all the way back to sharecroppers, for instance, after--during the period of reconstruction after emancipation, it’s always been an effective form of social control.  It’s not simply a result of, you know, the natural process of an economic system.  So, can you lay that out for us?

TG: Yeah.  When we were researching the book, one of the things that I find most fascinating was the way that Henry Ford was policing his own workers and really wanted them to have mortgages, because if you could put your workforce into debt, it meant that you could control them and it wasn’t just that they were at risk of losing their job, you could put them at risk of losing their shelter as well.  And, you know, today, you know, one of the statistics that just kind of blows my mind is that eighty percent of people who enter elite law schools say, “I want to become a lawyer to practice law in the public interest.”  And then by the time they graduate law school with six figures of student debt, eighty percent of them end up taking jobs in corporate law.  And, you know, I think that people genuinely want to be good, they want to take care of other people.  They don’t want to hurt other people.  But most people are not allowed to be as good as they would like to be because they’re forced to, sort of, take jobs that hurt the environment, hurt other people in order to make ends meet and pay the debt.  You know, military recruitment is massively aided by the idea that it’s a way of avoiding student that the military was able to meet their recruitment goals and sided student that--as the leverage that they had.

CH: Well, you have a quote in the book, I don’t know where it is, but it’s from a military recruiter where they target people who have heavy student debt quite consciously.

TG: Yeah, and it, you know, it comes down to what does it mean to genuinely be free if all of our choices are determined by a form of economic coercion, whether it’s at the workplace or in our daily lives?  Can we genuinely say that we have any meaningful freedom?  So I think, not just being free from debt, but having liberating wages is--and having some kind of democracy in the workplace is key to any, like, genuine, meaningful sense of freedom.

CH: The New York Times ran a piece a couple months--a few months ago where they talk precisely about the stagnation of wages, and said that if wages have been tied to productivity, which since the 1970s had--has gone up by about 77%, if I remember, the minimum wage would be at least $20 an hour.  But wages, of course, have been suppressed.  This is also an issue you address in the book by design, because the financialization of the economy with offshoring and deindustrialization has been the key mechanism by which large financial firms and banks are able to amass these profits.  And just speak about that before we go into the nature of resistance.

TG: Yeah.  Part of what we really want to punch holes in and dispel is the idea that if you’re in debt, it’s because of your personal moral failings, that you didn’t work hard enough or you made poor choices.  Granted there are some people who do make poor choices, but the vast majority of us are forced into debt because we’re denied the means to live, not because we live beyond our means.  Since World War II, wages have stagnated, even though for a whole host of reasons.  The wealth that we’re producing has increased rapidly, but that wealth has been captured by the one percent.  And instead of paying us for our labor, we’re forced to go into debt to meet our basic needs, because even though our wages have remained stagnant, the cost of our basic needs like health care, housing and education, have gone up and up and up and up.  So, you know, buying a large flat screen TV, the price has gone down significantly.  But if you need to see a doctor, the price has gone up quite a bit.

CH: Well, you have--this is from the book, more than 40% of indebted households use credit cards to cover basic living costs including rent, food, and utilities, some 62% of personal bankruptcies, as I mentioned in the opening, are due to.  So what you created is a system by where in order to survive subsistence level, meeting your most basic needs, requires you to go into debt for the majority of American households.

TG: Yeah.  A lot of people are very sympathetic when we say that we should cancel all medical debt or we should cancel student debt because they see that it’s obviously obscene and cruel to force people into debt for medical care.  But there’s more resistance when we say no, we should also be looking at credit card debt because when you look underneath the hood, a lot of credit card debt is just transmuted medical debt where people couldn’t pay their medical bills so they put it on a credit card.  It’s people who are putting diapers on their credit card.  You know, if you look at Walmart workers, a lot of them, because they’re paid poverty wages, have to use the Walmart credit card to buy diapers at Walmart for their kids.  If you’re working a full-time job, one job should be enough, you should be paid a liberating wage and you shouldn’t be forced into debt for basic needs.  If you want to buy a yacht, and you need to borrow some money to buy a yacht, that’s one thing.  If you’re just trying to pay your utility bill, you shouldn’t be forced into debt to do that.  And it seems like we ought to be able to differentiate between those two.

CH: And if you can’t pay, you’re immediately criminalized of interest rates jump, what?  Eighteen, nineteen percent when you’re late on payments, your credit score is trashed.  And collection agencies, I think there was a--I can’t remember, there was a case you quoted in the book of some poor woman being called I think it was eighty-one times in one day or something.  But talk about what happens as soon as you can’t sustain yourself, as soon as you can’t stay afloat and pay the interest on the debt, what do they do to you?

TG: Well, there are many things that you can do, but the credit score is a big part of that, right?  A credit score is this enormous surveillance system that puts a number on each one of our heads for how valuable we are to investors who are going to put us in debt.  And, you know, the credit score becomes a backdoor mechanism for all kinds of racial discrimination in the United States.  It is illegal to discriminate in the workplace based on the color of skin.  But for--because our racist economy, you know, correlates credit score with a sort of permanent underclass in the United States, you can use credit score in the hiring process and it becomes a backdoor to allow for legal racial discrimination.  The same is true for your ability to get housing.  And when you say it gets--your inability to pay gets criminalized, sometimes that’s quite literal.  We--it’s supposed to be illegal to have debtors’ prisons in the United States.  But that’s not really the case.  There are some people who have been arrested simply because they haven’t been able to pay their credit card bill.  And that can happen in a couple of different ways depending on the jurisdiction you’re in.  In some cases, the creditor will sue you, but not really serve your papers properly so you don’t know you’re supposed to show up in court.  And then failure to appear in court, you can be arrested for and then sometimes they’ll set bail for the amount of money that you owe.  So paying bail essentially means forfeiting that money to the creditor.  But there are all kinds of other ways that this happens.  Criminal Justice, that is another factor.  In certain states, people are forced to pay for their own probation.  And if you can’t make a payment, that’s considered a violation of probation and you suddenly become at the mercy of a judge who can decide to send you to prison just because you can’t pay your probation debt.

CH: Well, once you lose access to credit, if you’re dependent on credit to pay your rent or your utilities, then, of course, you can’t then you’re evicted.  So there is a kind of spiraling--downward spiral that comes once you’re locked out of that credit system.  I mean, your life can completely unravel.  When we come back, we’ll continue our conversation with Thomas Gokey from the Debt Collective.  Welcome back to On Contact.  We continue our conversation with Thomas Gokey from the Debt Collective.  I want to just talk a little bit about mass incarceration.  I teach in a prison and increasingly, my students are getting out of prison owing literally thousands of dollars, although they have been incarcerated sometimes for decades.  This comes from fines that are imposed on them at the time of sentencing.  In New Jersey, they earn $28 a month, they have a few dollars garnish--take--a garnish taken out of their prison wages to pay these fines, but they still finish owing thousands of dollars.  Of course they are charged all sorts of fees inside the prison and then when they get out, if they have old traffic violations or child payment supports, these accrue interest.  And so immediately, they get out and they are oftentimes facing mountains of debt and then we are seeing people getting out especially out of county jails, where they are charged for “room and board” for being in the jail.  And I think this is an important aspect, because we’re talking about the poorest of the poor, people who come out in that criminal cast, they can’t get into public housing, they can’t get public support, their felony records often preclude them from employment, which you do talk about in the book.  Talk about that issue of that onerous debt that’s imposed on people who are incarcerated.

TG: Yeah, I think this is where the debt--abolition movement, and the, sort of, broader prison abolition movement really overlap.  It is--it is a form of social control after you get out of prison, sort of stacking the deck, making sure that you can never get your feet underneath you, never have some semblance of just a human life.  But, you know, one of the things that we always want to do is sort of flip the script about who owes what to whom.  The vast majority of, you know, you know, what counts as a crime in the first place?  Who’s being put in prison?  Should prisons exist at all?  And do we, as society, owe something to formerly incarcerated people to pay for what is a deeply dehumanizing and racist criminal justice system?  But that really should be flowing in the opposite direction here.  And, you know, when you--when you look at any one part of our system, it’s sort of all connected, right?  Wells Fargo is the largest investor in for-profit prisons.  We see all of the same players charging money from making a phone call in prison to a loved one, to the--as you said, privatizing and forcing them to pay for room and board.  Meanwhile, if you’re on Wall Street and you commit a crime, you can be virtually guaranteed that you’ll face no consequences.  So even what counts as criminal, I think should be interrogated and exploded.

CH: One last issue which you raised in your book, and that’s how counties like St. Louis County, where Ferguson, Missouri is, will fill budget shortfalls by imposing all sorts of fines on people, which they often can’t pay.  I mean, these fines are exorbitant hundreds of dollars for a really invented crimes, standing too long on a sidewalk, or Eric Garner being choked to death on a city sidewalk in New York for selling--allegedly selling loose cigarettes although he wasn’t selling loose cigarettes.  But that’s also an important way that the poor are thrust into deeper debt peonage.

TG: Right.  And these are all backdoor ways of making sure that we never tax the rich, right?  So because we don’t tax the rich…

CH: Yeah.

TG: …our cities are forced into debt.  And because our cities are forced into debt, it means you have to be really hyper aggressive about collecting water bills and shutting off people’s water if they can’t pay their water bill.  And when that doesn’t make the shortfall, you need to stop and find people for any trivial reason, just as a--as a way to raise revenue.  So I think this connects to the need to start defunding the police because the--in many places the police are, sort of, tax collectors, but collecting the tax from the very bottom.

CH: So let’s talk a little bit about what’s going to come with the pandemic.  The figures are very dire.  The Washington Post did a story that many 70 million people could face the possibility of eviction.  And then let’s talk about resistance.  But things are obviously going to get worse.

TG: Yeah, the pandemic, it’s exposing sort of the pre-existing condition of our economy to begin with.  It’s also all kinds of things that we were told were always impossible.  Suddenly, they’ve become possible.  These things that we could have done a long time ago, you know, paying for COVID testing, saying that this health care should be provided for free.  We always could have done that.  We always could have made sure that everyone got health care.  Suspending student debt payments, or foreclosures, we always could have done that.  All these things that we were told were just completely impossible high in the sky with it--the veil has been pierced that those were always lies.  At the same time, the suffering is so immense right now, it’s hard to wrap your head around and we spend all day every day speaking to people in debt, who simply cannot pay their bills are being forced to max out their credit cards, take payday loans, are facing foreclosure, are, you know, terrified of what’s going to happen, and they pull their parents out of nursing home and are now fulltime care workers.  But things are compounding.  We know that the pandemic is going to change everything.  There’s really no part of our society that is going to remain the same.  So there’s a huge opportunity for us to ask what kind of society do we want to live in.  If everything is up for renegotiation right now, we should negotiate from a position of power, and we should decide what kind of world we want to live in, and which debts should be paid and which debts shouldn’t be paid and maybe the obligation that I owe you is that, if you get sick or hurt, you should get health care.  If you want to study and get an education and get--reach your full potential, you should have an education that is fully funded so you’re not forced to mortgage your future.  We’re seeing 40 million American households facing eviction, in which case, we’re going to have all of these vacant apartments and mass homelessness that certainly there’s a better way to do this than evicting millions of people in the middle of winter during a whole--a global health crisis.  And, you know, this--these problems are not being faced in other wealthy societies, right?  None of this has to be this way.  It can all be different.  These are all choices that are being made.  And if we get organized, we can force other choices and other conclusions and other ways of being together.

CH: So we have five minutes left, and I want you to lay out what you’ve been doing with the Debt Collective and the forms of resistance, including the debtors’ union that you formed.

TG: Yeah, so the basic idea behind the Debt Collective is that there is power in our debt if we unite, right?  Alone individually, the banks and the government have enormous power over us.  But as the old saying goes, “If you owe the bank $1,000, the bank owns you.  If you owe the bank a trillion dollars, you own the bank.”  And collectively, we can own the bank.  Collectively, we can own our government and govern ourselves.  So we’re focused on all kinds of different debt, but if I could just use the example of student debt to show the power of a debtors’ union, back in 2015, we organized former students at a predatory for-profit university to go on a student debt strike in order to compel the Obama administration to start enforcing the laws that were already on the books to protect students in this situation.  We had laws that said in this situation, students have a right to get their debt discharged.  Those laws just weren’t being applied.  So we organized, we went on strike, and today we’ve won a billion dollars’ worth of debt discharged as a direct result of that strike.  But now, again, we’ve been doing research into the legal authorities that exist, the incoming administration has the authority to cancel roughly $1.5 trillion worth of student debt with just a few signatures, there’s really no excuse not to do that.  There’s a huge economic stimulus impact that we badly need in the current pandemic.  And so we’re organizing chapters all across the country, you can go to debtcollective.org In order to join.  We want to cancel medical debt and win Medicare for all.  We want to fundamentally change how our economy is working so that--because it’s not that we have a shortage of wealth, right?  We’re the wealthiest society that has ever existed in human history.  It’s that that wealth is concentrated in the hands of a small group of people.  And we have enough wealth to make sure that everyone’s basic needs are met with dignity.  So it’s--if ever a debtors’ union is going to form and take off, it seems like this is the moment.  So millions and millions of people can’t pay if we can convert that into won’t pay, we can win.

CH: Talk a little bit about evictions.  I mean, so you have people facing evictions, you have--they will send the sheriff.  I mean, they’ll send armed law enforcement to literally--along with these eviction companies, to haul your furniture out and throw you on the street.  What is the response?

TG: Well, we’ve been very inspired by the tenants’ unions that have been forming organically across the country, and indeed, across the world.  These organic rent strikes that are taking place and the eviction defense that is being mobilized, that’s absolutely essential.  One thing that we are currently working on and working very, very hard on it, to get it ready, it--it’s complicated because we have a patchwork system where the law is literally different in every single county.  But we are trying to make it simpler to gum up the--or to file the paperwork to prevent evictions because there are steps that people can take.  It’s just that the bureaucratic system is very difficult.  So one thing that debtors’ union can do is to simplify and  --shepherd people through the process of just putting a halt to it.

CH: Great.  Give us again where people can go to connect with the Debt Collective.

TG: You can go to debtcollective.org and our new manifesto, you can go to Haymarket Books.  It’s called Can’t Pay, Won’t pay.

CH: Great.  That’s a good read.  Thank you very much.  That was Thomas Gokey from the Debt Collective.

TG: Thank you.