Spacing sovereign debt

In Spacing Debt, Christopher Harker examines personal debt through the bonds of family and community. His major intervention is a concern with the spatiality of debt, where its temporal effects have been at the centre of philosophical thinking from Friedrich Nietzsche (1985) to Maurizio Lazzarato (2011). For thinkers like Michael Hudson (2012) and David Graeber (2011), moreover, the deferment enabled by debt undermines the entirety of modern economic theory with its fetish for exchange. While spatial considerations have been present in both historical and contemporary analyses of debt, Harker's approach is novel in that it develops a critique of the overemphasis on the temporal, makes space the explicit and principal lens of analysis, and engages with debt's spatiality at multiple scales and through multiples webs – or ‘topographies’ and ‘ecologies’ – of debt. He is concerned with speaking to and working from postcolonial thinking on debt, and thereby challenging (recent) work on debt that has taken a particular focus on high income countries (HIC), sometimes with universalist ambitions – particularly Lazzarato (2011). In an effort to speak to and complement Harker's contributions, I explore the relationships and commonalities between sovereign and household debt – often treated as distinct (e.g. Bear, 2015), and what this might contribute to thinking spatially about debt.

Most recent work focusses on personal debt, with increasing concern for experiences in HIC since the 2008 banking crisis. This marks a sea-change from the scholarship that developed in the lead-up to and aftermath of the multiple debt crises of the 1980s and 1990s. Then, most scholarship focussed on sovereign debt and on the experiences of low- and middle-income countries. Of course, there were always exceptions. Janet Ford; (1988) study of the struggles of poor and indebted households in England in the 1980s, for example, presages many of the findings of the post-2008 literature, particularly the importance of the profound stigmatization that comes with personal debt and default. In contrast to Harker, she finds that narratives of ‘personal responsibility and personal failure’ (9) prohibit people from seeking help even when they recognize that their situation was precipitated by circumstances beyond their control. These circumstances – like job loss, illness, and divorce – are those that make up Lauren Berlant; (2011) ‘crisis ordinary’. In contrast to the family networks in Ramallah, this sudden precarity engenders a deep personalization of debt. This concords with other studies that find that household debt traps people in low-quality housing but also restricts their lives to these limited spaces with little or no supplementary income to go out, meet friends or engage in recreational or cultural activities (Bondi and Christie, 2000). The alienation, isolation and fear experienced by those living with unmanageable debt came to haunt the middle-classes in post-2008 Europe. For García-Lamarca and Kaika (2016: 323) in Spain, ‘mortgage defaults and evictions became a form of the “invasion of the real” (Rancière, 2004): the realisation that they had never really been homeowners or middle class, just a proletariat indebted for life to their creditors’.

Interestingly, Clara Han (2012) work on household debt in low-income neighbourhoods in Chile is more in keeping with Harker's findings. Han likewise finds that debt constitutes both the means to a better quality of life and the harbinger of precarity under neoliberal financialization (see also Roy, 2010). Debt helps families to support their most vulnerable members, but can ultimately lead to definitive breaks as households struggle to stay afloat. Harker takes these themes further, emphasizing the endurance of people in the face of ‘financial crisis ordinariness’. This is in contrast to much of the literature, which privileges the grinding and domineering nature of debt. Harker, in fact, expresses his own political reservations about endurance. Still, he is not entirely alone. It is echoed in the work of Cavallero and Gago (2019) at the level of the collective. Like Harker, these authors seek to build a feminist and post-colonial critique of debt and are particularly disparaging of Lazzarato (2011) for universalizing his indebted-man, blind to the experiences of women and particularly women in the global South. Still, Lazzarato does draw interesting insights that find echo in work conducted from a southern perspective. First and foremost is the idea of how debt constrains choice in the present, especially around things like one's labour. For Cavallero and Gago (2019), this insight is entwined with the feminisation of poverty as well as part of the spiral of debt accrual; under neoliberal financialization, ready access to microcredit has replaced a living wage. Like a drug, microcredit is pushed on low-income women turning them into interest-payers, indebted through topographies of debt to banks in the domestic and global economy.

Second, and here Lazzarato is borrowing from a wealth of pre-existing research, the burdens of sovereign debt are borne chiefly by the poor through higher taxes, poorer services, job loss and a weaker social safety net (e.g. Honeywell, 1983), to this can be added higher utility fees, service debt and disconnection (Furlong, 2020) as well as generalized infrastructure decay leading to poorer roads, schools, energy supply and so on (Trovalla and Trovalla, 2015). Thus, while Bear (2015) argues that household debt and sovereign debt are distinct phenomena that must be theorized differently, the many links between them and the everyday working lives of people – which she herself demonstrates – merit consideration. These links are evidently spatial, literally transforming spaces, how they can be used, and the dangers they present as infrastructures decay and workers are forced into ad-hoc solutions (Bear, 2015). For Cavallero and Gago (2019), moreover, debt translates the spaces of the home, the neighbourhood and the city into ones that are rife with the potential for violence.

Indeed, as Harker's work shows, the spatiality of debt is not limited to that of the home. Debt reconfigures not only the household, but local and regional space as well. Here, Ramallah itself has become the locus of debt and thus of investment and growth, that lives not only on ‘borrowed time’ but on ‘borrowed space’ (9). An engagement with sovereign debt can take these spatial considerations further. My own recent work on infrastructure debt shows how this type of sovereign debt fuels the construction of large infrastructure projects, with major implications for both rural and urban space (Furlong, 2021). This is because – just like individuals who get into debt – utilities and governments often find themselves in a cycles of paying for debt with new loans, in what Payer (1973) refers to as the ‘debt trap’. Under debt-led development, getting a new loan to service existing debt meant justifying that loan with a new big infrastructure project. Often, once the bounty of credit was converted into the tyranny of debt, utilities in southern cities were criticized for their irresponsible debt accumulation as well as their infrastructural overbuild (Furlong, 2021). Paying back these debts has translated into reduced service access and increased utility debt for the poor, in what I have called ‘trickle down debt’ (Furlong, 2020). Like the post-2008 extension of household debt problems to include the middle classes, these issues have recently come to haunt deindustrializing cities in the North (Peck and Whiteside, 2016; Ponder and Omstedt, 2019).

For scholars of both sovereign and personal debt, North and South, pre and post-2008, the morality of debt that empowers creditors over borrowers is a central concern. For personal debt, the centuries old condemnation of the indebted feeds the feelings of shame and alienation discussed above, whereby individuals continue to service interest on debts they can never possibly repay. When it comes to sovereign debt, a similar morality applies although it is often couched as a reputational issue (see Roos (2019) for a critique). Odette Lienau (2015) examines the gradual solidification of what she calls the ‘statist’ approach to sovereignty over the course of the 20^th century whereby debts must be serviced irrespective of the conditions under which they accrued. This contrasts ‘odious debt’, whereby debt incurred under dictatorships – employed for repression and the personal enrichment of a ruling elite – would not be honoured. Still, even in this limited set of circumstances, creditors are to assume no risk for their lending practices. For Jerome Roos (2019), however, this morality is but the discursive expression of the power that international creditors garnered through their consolidation since the 1970s. Tellingly, Argentina was only able to default (partially) on its debts in the early 2000s once major creditors had dumped their liabilities on Italian pensioners (Roos, 2019).

Further, it may be our critical thinking that can’t escape such moralizations. In what is the most compelling (and sympathetic) critique of Graeber's Debt: A 5000 Year History, Daromir Rudnyckyj (2019) signals that in invoking debt forgiveness through the jubilee framework, Graeber himself looks to religious philosophy for responses to the problems of debt. But that such responses do not question how debt functions; by simply seeking debt cancellation in particular circumstances, they leave its premisses intact. Rather, Rudnyckyj (2019) argues that Islamic finance's promotion of equity-based as opposed to interest-based lending, whereby lenders share in either the profits or losses of a venture but are not guaranteed a return on money, offers something that – while struggling to actually be different (in a complex world dominated by existing financial networks and infrastructures) – actually constitutes a philosophically distinct alternative.