One of the defining features of this economic crisis is massive debt: student debt, medical debt, credit cards and underwater mortgages. The last thirty years have seen a stagnation of actual wages, which, combined with government cuts, outsourcing and off shoring, has meant a stagnation of the real purchasing power of the American people (alongside many more destructive results). To offset this lag, America has turned to debt, which can only paper over the lack of real capital for so long. The current crisis has seen millions devastated by the bursting of these credit bubbles. What solutions can help get people out of these debt traps?
One idea that's received much atttention lately is the Rolling Jubilee. The strategy, developed by Strike Debt, an offshoot of Occupy Wall Street, involves the abolition of private debt through totally legal market practices. The method is graceful in its simplicity: banks that are holding debt they can’t collect sell that debt really cheap on a secondary debt market, almost always to debt collectors. What Rolling Jubilee does is purchase this debt, and then cancel it, freeing the debtor from the claims of the bank and the debt collection agencies. As of this writing, the Rolling Jubilee has raised almost $350,000, which will abolish just under $7 million of debt, a very impressive achievement.
Mike Andrews is a member of Strike Debt, the organization that helped bring the Rolling Jubilee to fruition, and has seen the Rolling Jubilee develop from its first stages. I sat down to talk to him about Strike Debt, the Rolling Jubilee, and larger term strategies for combating debt in America.
Willie: What is the genesis of the Rolling Jubilee idea? How did it get started?
Mike: I don’t actually know who precisely within Strike Debt proposed the idea, but my understanding is that it had been the pet project of one or two people for some time, and that Strike Debt presented an opportunity to try to make it happen. There was lots of conversation about it for a long time. I heard the phrase Rolling Jubilee mentioned a lot at meetings, and at first didn’t know exactly what it was.
Then research started happening: there was a lot of investigation into the legality of buying this debt from the secondary market, what the tax implications would be for the people who bought it, and for the people who had it bought for them. Lawyers were consulted. We have moles in the debt collection industry who have been helpful. So there was a lot of cautious research that went into exploring the idea: a non-profit entity was created to purchase the debt and then eventually there was a ‘test buy’, where about $4,000 was spent to buy this secondary debt, which amounted to something like $20,000 dollars worth of debt, and it went through fine.
Willie: So what are the mechanics of the Rolling Jubilee? How is this debt bought, and how is it cancelled?
Mike: This debt exists in a secondary market. The money raised through the People’s Bailout, the telethon, will go to buy medical debt. [The People’s Bailout took place last Thursday. More info here] The people whose debt we’re buying, their lenders have given up on them, they’re in default. So the lenders, the banks sell their debt into this shadowy secondary market, where it may go through an intermediary or two, but it usually ends up in the hands of shady people, debt collectors, who buy this debt for pennies on the dollar thinking they can collect on it. And even if they don’t collect on the full amount, they may make some profit. Individuals will know that their debt has been purchased, and been cancelled. We will notify people that this debt has been purchased in the spirit of mutual aid, and this is an activist project and not just that the lender has given up on them.
The rolling part of the Rolling Jubilee- this is a gesture of mutual aid, and if you benefit from this gesture of mutual aid, you can maybe do what you can to help other people benefit, whether that means giving a few bucks or organizing a benefit concert or something where you live. The idea is to pay it forward.
Willie: Let’s talk about that Rolling part of the Jubilee. One way you can use paying it forward is to build a network: you help someone with the idea that the person who is helped will provide aid to others, and so you slowly build this network of people in that way. How do you think Rolling Jubilee is going to roll, is it related to these processes?
Mike: Historically, the jubilee is where the king or whoever abolishes all debts. And the idea of the Rolling Jubilee, instead of all debts being abolished at the stroke of a pen or a declaration of a king or something, is debt would be abolished in segments. That’s the kind of governing idea. There are two aspects in which this could be rolling. It’s rolling in the sense that you just described, where the people who benefit from it then organize themselves or even contribute money to other people benefiting from it. The secondary debt market makes it impossible to know who's debt you’re buying before you buy it, in order to avoid people buying up their own debt for cheap. But you can buy a specific kind of debt for a specific region, like, say, medical debt in New Jersey, and then, after you make the purchase, you get the debtors’ contact info, since a debt collector would need this info to hound people. We're going to use this info to call or send letters to people informing them that Strike Debt has abolished their debt.
The other sense in which this is rolling, the kick off event, the People’s Bailout, is just to demonstrate that this can be done. The idea is for other groups, other people to hold fundraisers so they can then buy debt. So that’s another sense in which it’s rolling. I know that already Michelle Shocked is holding a benefit concert in New Orleans soon for buying debt and abolishing it. So it seems to have started, in a small way, the rolling idea.
Willie: How do you conceptualize this, or how has it been conceptualized at least, as transforming or politically attacking the ethos of debt? I know that Strike Debt is about more than just getting people out of debt, so how does the Rolling Jubilee fit into Strike Debt’s view about how to change debt?
Mike: One of the first things that Strike Debt did to try to alter the framework around debt is to reject the language of forgiveness, the moral language that surrounds debt. So in the things we’ve produced, whether it’s propaganda or the Debt Resistors Manual [http://strikedebt.org/], we avoid calling for debt forgiveness, we avoid the word “debt forgiveness”. Similarly, with the Rolling Jubilee we’re not saying that we’re “forgiving” the debt we’re buying, we’re cancelling it or we’re abolishing it. So we’re trying to reject the morality around debt, and part of that is saying that these debts are illegitimate. Today we all have to go into debt just to meet our basic necessities whether its going to college so we can get a decent job or seeking medical care or anything like that. So the idea is that these debts that we incurred are not legitimate, we don’t owe, we don’t actually owe you, we reject this debt both monetary and moral. But figuring out a strategy for how to connect debt to a larger anti-capitalist program, it’s difficult to really think through those steps, so I think as a group we’re just experimenting with something we have the capacity to do, to see what happens, and then depending on the results decide what to do next. So the grand idea behind the Rolling Jubilee is to relieve a lot of people’s debt initially as a gesture of mutual aid, to make day to day survival easier for people who have a lot of this medical debt. But if this spreads widely it actually might cause some havoc. Some people have been critiquing Rolling Jubilee by saying: ‘well if lenders or the secondary debt market catches wind of it they’ll just stop selling debt. ‘ Yeah, you’re right! And that would be an amazing victory, if this spread widely enough that this shady secondary market were altered. It would just show we are doing the right thing.
Willie: I think also there’s an interesting confrontation where the banks could refuse to sell the debt to Rolling Jubilee once they know who it's going to, showing what they actually they want is the immiseration, because they’re getting the money anyway. I don’t know if that’s been talked about by Rolling Jubilee folks, or if that’s a possibility that they wont sell the debt.
Mike: I think what's been very, what’s distinguished the Strike Debt conversation from a kind of Occupy conversation is that there have both been conversations that are practical about actions and things, but also theoretical, complex and rigorous discussions. But yeah, the banks in a lot of cases don’t actually need to be repaid, they can write it off, it may even be more trouble than its worth for them financially to be seeking this debt. But what’s intolerable to them is the refusing of the moral obligation to pay debt. The idea that the debtor says: “this debt is actually not legitimate, morally I don’t owe you”, is far more threatening. The idea that that could spread, we don’t owe, we wont pay, is far more threatening than not receiving a certain amount of money.
Willie: So you mentioned you’re sort of throwing stuff against the wall to see what sticks. Is there a longer term strategy or goal out of Strike Debt or Rolling Jubilee?
Mike: It’s a debt strike, ultimately. In the sort of embryonic stages [of Strike Debt], when people were trying to come up with the name, and this was before I got involved, there was lots of conversation about reversing this phrase “debt strike” to “strike debt”, making it more of an active thing. Rather than just “we’re gonna stop doing something, withhold something” we’re gonna actively try and destroy something, destroy a certain system. So yeah, it’s there in the name, a widespread debt strike. But we all know that that is a very lofty ambition, something that’s very difficult to organize and something that doesn’t have much modern precedent.
But we think there are ways to do incremental debt strikes that lead up to it. There’s a lot of talk about starting a debtors’ union. One of the ideas there would be to connect people who, for example, all have student loan debt to the same lender. And do something that starts small, say you get 50000 people to pledge to withhold their student debt payment for one month. And it’s modest because, for the most part, if you’ve been paying regularly there’s no penalty for missing a month’s student loan debt. But just the shock of not receiving that much money and seeing: “oh wow all our debtors are in communication and are coordinating” is a threatening gesture. And it’s something down the line, and we know this is a multi-year project, but you could actually have lots of debtors refusing in a way that gives them leverage to do practical things like negotiate down their interest rate or do more radical things like try to bring down a bank. So that’s the horizon.
Willie: How does Strike Debt see itself as attached to notions of alternative economy? Producing a positive alternative economy situation, how do you see that attached to the Rolling Jubilee project in specific and Strike Debt more generally?
Mike: We’re definitely interested in certain forms of solidarity economy. Being in default is no picnic. You’re hounded by debt collectors, they can garnish your wages, there are lots of ramifications that can make your life hell. So in a lot of ways you may have to partially if not fully withdraw from the formal economy. And because Strike Debt is calling for people to stop paying their debt, we know that there has to be a corresponding increase in mutual aid, solidarity networks, so people aren’t facing the consequences of default alone. Part of our ethos is to connect people who are in debt in a similar economic condition and have them be conscious of each other as debtors. So, similarly we need to connect people to support each other when they default either voluntarily or involuntarily. On a couple of occasions [in meetings] we’ve actually gone around and people have said how much debt they have. A lot of people involved in Strike Debt have a lot of debt, so they’re very very personally motivated in this project.