TAP Equality of health campaign BLOG 2.People’s money management good;State creates problem debts for the vulnerable

17 February 2017

TAP Equality of health campaign BLOG 2.  The people’s money management skills are good; the State creates problem debts for vulnerable individuals and families, which are linked to the most profound anxiety, anger and suicide.

Carl Walker, co-founder, Psychologists Against Austerity, suggests  that the central idea that there is value in improving people’s money management skills appears to be the political solution to the increasingly upward national and global trends in personal debt. The twin disciplining ideas of religious morality and neoliberal personal responsibility contribute to misrecognition of debtors as personally responsible for their own consequences in a financialised world.  

Hunger and acute poverty are growing problems in the liberal democracies of the global North. The experience of problem debt is frequently associated with the most profound subjective suffering in the form of depression, anxiety, anger and suicide.  Some have gone as far as to suggest that the technocratic and bureaucratic debt processes that harm certain vulnerable groups of people as a matter of course can be understood as forms of systemic violence. He suggests that the very term ‘personal debt’ is a misleading misnomer that exonerates sanctioned, industrialised bureaucracies of economic violence.  Inequality, like debt is not a personal quality, rather it’s a quality of a nation state and so is largely determined by political, economic and ideological activity.

 

Managing at the margins - life beyond the financial capability paradigm

Carl Walker, co-founder, Psychologists Against Austerity

  • "..another thing we do is once the customer has got a loan we have to phone them once they’ve done six payments, between six and twelve months and do a loan review but really what the bank is trying to do is try and sell them another loan". UK bank worker

  • "Since last November my husband’s started having anxiety attacks and he would sort of start retching and he’d have a nose bleed… he’s now been on anti-anxiety tablets for over a year and he’s still retching because of the communications from collectors". Debt client

 

It’s difficult to avoid the conclusion that the recent trend to address the fallout of neoliberal globalisation via the political elevation of authoritarian hyper-capitalists is akin to throwing petrol on a barbeque to put the flames out. I have been reminded of this in recent weeks as I reviewed various financial capability programmes for vulnerable children and young people. This financial capability paradigm is organised around the central idea that there is value in improving people’s money management and it appears to be the political solution to the increasingly upward national and global trends in personal debt. Recently we have seen reports of the return of the formerly common trend of imprisoning poor and working class US citizens who are not able to pay their debts. The UK is currently witnessing a steady growth in both personal debt and income stagnation which appears to show little sign of abating. Indeed this increase in personal debt is a growing problem in a number of countries.

It has been suggested that debt has come to be the governing principle of modern societies by taking the form of what has been referred to as ‘debtfare’. Debtfare is the prolonged interlocking payment obligations experienced when debt institutions lock people’s current and future life choices and possibilities into unequal, unfree and mobility-limiting capitalist relations. In the many countries experiencing debtfare, debt is culturally mapped by the twin disciplining ideas of religious morality and neoliberal personal responsibility that contribute to a misrecognition of debtors as personally responsible for their own consequences in a financialised world.

Hunger and acute poverty are growing problems in the liberal democracies of the global North. In many countries we have seen the rise of the phenomena of rapacious credit selling with few regulatory restrictions as well as increasingly brutal debt collection regimes for the growing number who find themselves unable to service their debts. The experience of problem debt is frequently associated with the most profound subjective suffering in the form of depression, anxiety, anger and suicide. Some have gone as far as to suggest that the technocratic and bureaucratic debt processes that harm certain vulnerable groups of people as a matter of course can be understood as forms of systemic violence. However debt has become highly profitable for banks seeking to deliver ever more elusive profits and it has been extremely useful for governments seeking to find the elusive solution to balancing  sustained wage suppression and economic growth.

I would suggest that the very term ‘personal debt’ is a misleading misnomer that exonerates state-sanctioned, industrialised bureaucracies of economic violence. There is very little that is personal about personal debt. Rather, it is the outcome of the ways in which neoliberal economies around the world have cohered in order to industrialise a systemic and prolonged asset extraction from a growing number of people who live in these countries. Personal debt is a chimera that functions to personalise profound income inequalities. Deregulation and privatised money systems have allowed for the emergence of a finance capital with the enhanced capacity to exploit and to extract profit from people. To focus on financial capability in isolation from these industries is to misunderstand the collective and systemic nature of suffering and human indignity routinized through debt industries. 

There has been a clear congruence in the way that successive governments have nibbled at the margins of the problem of rising personal debt. We have seen very substantial investment in the various projects oriented toward making people financially capable to meet the daunting economic challenges that they face.

However such an approach wilfully obscures the fact that no amount of tutoring in budgeting, saving and on decoding the labyrinthine terms of modern financial products will equip people to cope with the politics of wage suppression that has deflated real terms wages. It won’t help people to address the lack of rent controls or the restriction of affordable housing by property developers hoarding development sites. It won’t meaningfully help them to address the fallout from years of irresponsible financial regulation, the increasingly predatory behaviour of financial institutions and the brutality of the collection regimes for those unable to keep up with repayments. And most obviously, it will not equip people to cope with health and income inequalities which show little sign of abating.

Inequality, like debt is not a personal quality, rather it’s a quality of a nation state and so is largely determined by political, economic and ideological activity. Woven around the tapestries of inequality are ideologies and institutions whose insistence on personalising an increasingly economic problem look for all the world like a dog chasing its own tail. The collective will to deny the simple fact that the vast majority of the people experiencing problems debt don’t manage their money badly speaks to something beyond a simple set of misunderstandings. Richard Wilkinson (2005, 18) suggests that ‘we should liken the injustice of health inequalities to that of a government that executed a significant proportion of its population without cause’. One of the many paradoxes of the problems of inequality and ‘personal’ debt are that its solutions are generally organised by the institutions that most benefit from it. Until this changes it is difficult to envisage a meaningful challenge to problem of consumer debt.  
 


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