“Studying Democracy in the Age of Indebtedness”

On August 24, 2022, President Joe Biden announced a plan to cancel up to $20,000 in individual student loan debt, a policy that will provide relief to up to 43 million people and will substantially impact African-American borrowers. The decision intensified debates about the size and likely effect of the relief, the role of government in economic redistribution, and the justice and sustainability of current models for funding higher education. Dr. Andrew Douglas, Professor of Political Science at Morehouse, has given a great deal of thought to such matters, and he explored questions related to debt and democracy while a faculty fellow in the Andrew Young Center’s Institute for Research, Civic Engagement, and Policy during the 2021-22 academic year. Below you'll find an interview between Institute Director Dr. Frederick Knight and Dr. Douglas that explores his concern about the social and political barriers that debt presents to the just society and his vision of money as a public utility that can establish the grounds of democracy.

KNIGHT: How did you become interested in the problem of debt and democracy? 

DOUGLAS: I’ve always been interested in the history of capitalism, particularly in how racial inequality is reproduced through various phases of capitalism’s evolution. Into our own time, the era of “financialized” capitalism, we find that capital accumulation has become increasingly dependent upon the creation and expansion of credit—and therefore the creation and expansion of debt. This is also the post-Civil Rights era in the US, the postcolonial and post-communist eras on the world stage. This is supposed to be an age of liberation and racial integration. But it’s all been circumscribed by debt—financial extraction and dispossession, “predatory inclusion,” debt traps and structural adjustment across the Global South. Debt has become a key technology by which racial violence and inequality are reproduced. And any serious student of democracy has to reckon with this.  

A few years ago, I got to thinking about how the student debt crisis in particular might provide a generative opening for our undergraduates, a way of connecting our students to these broader historical and structural concerns. I developed a First Year Experience (FYE) course, “Debt and Democracy,” that begins and ends with student debt but along the way broaches a wide range of questions: How has the evolution of the global economy, in particular the consolidation of financialized capitalism over the past 40 years, affected ideas and practices of freedom and self-determination? What are the causes and implications of escalating sovereign debt crises? What do democratic citizens owe to one another and to society? What do democratic governments owe to their citizens? Why are poorer nations frequently indebted to wealthier ones? What do wealthy democracies owe to poorer countries, or perhaps to their former colonies or indigenous peoples whom they’ve massacred and displaced? How should we understand calls for debt cancellation and reparations for slavery? The class is a work in progress. It might work better as an upper-level class than as an FYE. But I think debt has become a crucial nexus for so many problems in our time, and our students need to be inspired and prepared to reckon with its complexity. 

KNIGHT: What have you discovered thus far? 

DOUGLAS: In studying debt, I’ve been introduced to modern monetary theory or MMT. I’m a theorist, so for me this counts as a “discovery.” MMT is a heterodox, loosely post-Keynesian school of economic thinking that has begun to enjoy some mainstream appeal. Folks may be familiar with the MMT economist Stephanie Kelton, whose 2020 book, The Deficit Myth, has become a bestseller.  

The gist is that sustained deficit spending is integral to how modern governments work. Monetarily sovereign nations such as the US spend money into existence and then tax some of it back to control for inequality or inflation. But they can never run out of money. Contrary to neoclassical economic wisdom, monetarily sovereign governments don’t rely on taxes to fund public expenditure. They are currency issuers and, as such, can always meet their obligations.  

Of course, it’s far more complicated than this. And I do have several criticisms of MMT, particularly in regard to assumptions about state sovereignty (including assumptions about US monetary hegemony worldwide) and implications for a global redistribution of wealth. But compared to the conventional wisdom, MMT gives us a much better descriptive account of how money and public finance actually work. And once we see it—“once you see MMT, you can’t unsee it,” the saying goes—it becomes clear that public debt operates very differently than household debt. We see more clearly that austerity and the dismantling of the welfare state reflect more of an elite class agenda than any economic or financial necessity. As a nation we can do so much more with public investment—including cancelling all that student debt and funding college as a public good.

KNIGHT: What are some of the assumptions that your work seeks to challenge? 

DOUGLAS: We certainly need to challenge the “private money” paradigm, including this belief that “taxpayers’ money” funds public services and provision. We ought to think of money, rather, as a kind of public utility. And in a more general sense, we ought to challenge how the public-private distinction has become so warped under neoliberalism. 

Over the last 40 years, as indebtedness and inequality have skyrocketed, the cheerleaders of markets and private capital have been allowed to dominate the discourse. Our thinking has become almost entirely circumscribed by a kind of privatization ethos, such that even nominally progressive parties and interests find themselves turning to private-sector entrepreneurialism or opportunities to expand private wealth capture as potential solutions to our societal ills. But innovations in private wealth capture (e.g., the “fintech” entrepreneurialism that has fueled the expansion and domination of credit markets) are more often the causes of our problems than they are solutions to them. Profit-seeking actors, systemically compelled to extract surplus from workers and debtors across global supply chains, are the drivers of inequality, not the basis for some kind of progressive redistribution. And if we blindly follow the neoliberal path and come to think of humanity through the lens of homo economicus (the self-interested individual) or homo probabilis (the speculative individual)—if, in other words, we’re encouraged to think of ourselves simply as entrepreneurial agents, private actors in competition with one another, individually responsible for bearing costs and rendering ourselves investment worthy and market ready—then we’re literally killing the collective imagination, reinforcing the very logic of a world torn between winners and losers, and foreclosing the prospect of collective movement building that might meaningfully challenge concentrated wealth and power. 

Studying debt really opens up a broad set of questions about how we think the public and the private, and how we might challenge neoliberal orthodoxy. I’m interested in what it would mean to rethink and reinvest in public goods, public investment, public care and responsibility. 

KNIGHT: Who are some of the thinkers who have paved the way for your work?  

DOUGLAS: Countless writers, intellectuals, students, colleagues, organizers, and activists have shaped my thinking on these matters. I’ll cite just a few who have made it onto the syllabus of my debt and democracy class.  

The heart and soul of the class is undoubtedly Thomas Sankara, the Burkinabè revolutionary who, 35 years after his assassination, still provides such remarkable moral clarity and courage in the struggle against neo-imperial debt bondage. Contemporary writers on the syllabus include David Graeber, Saidiya Hartman, Denise Ferreira da Silva, Destin Jenkins, Wolfgang Streeck, Jerome Roos, Max Haiven, Annie McClanahan, Ndongo Samba Sylla, Fadhel Kaboub, Aaron Sahr, Fred Moten, Louise Seamster, Lucí Cavallero, and Verónica Gago.  

And we spend some time discussing the work of the Debt Collective, a debtors’ union that is working to build the collective power of the indebted. The majority of us—and a rapidly increasing number worldwide—are forced to take on debt just to survive. We’re encouraged to take on so-called “good debt” like student loans or home mortgages as an investment in future growth. But then we’re ashamed of the debt we’ve been compelled to take on. There’s a stigma attached to it. We deal with it in isolation and feel powerless when that debt overwhelms us. This is how speculative creditors wield such tremendous power, which they often leverage in abusive and predatory ways. The Debt Collective has a slogan: “you are not a loan.” They want to get us talking about debt, this giant elephant in the room, and recognizing our collective power—so that we’re not alone. I’m learning a great deal from the collective genius of this burgeoning movement. It’s an organic movement of our time, this age of mass indebtedness. 

KNIGHT: You are a theorist and political philosopher. To what extent does your work cross disciplines or use empirical methods? 

DOUGLAS: Some of my work is informed by empirical studies, but I’m not an empiricist. I stay in my lane, which is the humanistic study of politics—the history of ideas, the analysis of logics of power, the critique of the ideologies and conceptual frameworks that shape public discourse. And political theory is a remarkably interdisciplinary field. My syllabus, for example, includes anthropologists, historians, philosophers, sociologists, economists, literary and cultural studies scholars, Black studies scholars, as well as informal scholars and intellectuals, like those organizers with the Debt Collective, who offer so much wisdom. 

KNIGHT; What do you see as the broader implications of your work?  

DOUGLAS: This work on debt and democracy has really brought me to a crossroads. On the one hand, it’s clear to me that we need to rebuild and reinvest in the public. It’s clear to me that we need massive consumer debt relief in the US and full debt cancellation across the Global South—a global debt jubilee, as it were. And it’s clear to me that this will likely have to be some kind of statist and internationalist project, likely a renewal or recreation of welfare state and developmental state models. On the other hand, I’m acutely aware that representative democracy is dying, that our institutionalized party apparatus in the US is incapable of representing the needs and interests of Black and working-class people, poor people, and that we need to explore new and different modes of democratic governance. On the world stage, the failures of liberal internationalism present a host of challenges.  

I don’t know where or how or even if we’ll find the kind of democratic energies that can transform how states serve their publics. In the US, I’m encouraged by the organizing work of the Debt Collective. I’m encouraged by recent grassroots organizing among workers at Amazon and Starbucks. I’m encouraged by the public-school teachers, as well as graduate students and adjunct lecturers, who are organizing all over the country. I’m encouraged by the public banking movement afoot in many US cities, and by organizers, such as those working on the Fed Up campaign, who are pressing to make our central bank, the Federal Reserve, more accountable to working people (ensuring maximum employment is, technically, part of the Fed’s mandate). Or those working with Morehouse alumnus Rev. Delman Coates on the Our Money campaign. So much of this work is tied to the activist legacy of Coretta Scott King, who in the 1970s and 80s fought to raise public consciousness around monetary policy and its impact on unemployment, particularly Black unemployment. I’m not sure what the next few years will hold, but I think we need to look to these movements, these efforts at community building from below, as an opportunity for renewal. 

KNIGHT: What else would you like to add? 

DOUGLAS: I’ll just add a hearty thanks for this opportunity to share some thoughts and ideas. The pandemic has pulled us away from one another. But I’m eager to rebuild the intellectual community of the campus. Would love to get together with folks, with students and alumni, to read and discuss and share thoughts about how we can address these issues.