The Making of the Indebted Man

by Maurizio Lazzarato

Cover image

Translator: Joshua David Jordan
Publisher: Semiotext(e)
Copyright: 2011, 2012
Printing: 2012
ISBN: 1-58435-115-2
Format: Trade paperback
Pages: 199

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This is a continuation of my effort to catch up on Marxist thought while pondering workplace governance, this time following the recommendations of a friend after a related conversation (about pension systems and basic income guarantee in a Usenet group — Usenet isn't dead yet). As opposed to Democracy at Work, which is a popularization, The Making of the Indebted Man has more of the density of a scholarly text. The version I'm reading is also in translation, which I suspect makes it even harder going in places.

The basic thesis, though, is clear: debt is far more central to the way that we construct not only economic systems but social systems and even internal models of our own nature than is often realized. We prefer to think of societies as structured around mutual exchange, but in practice they're more often constructed around concepts of debt and credit that have been fully internalized and used to construct a moral code for a responsible debtor. And this is not a neutral construction; rather, it is a key support mechanism of capitalism and of the financial and economic status quo, used (both intentionally and accidentally) to reduce uncertainty and to support exploitation and economic domination.

This is one of those perspectives that didn't occur to me prior to reading this book but which is startlingly obvious in retrospect. Once Lazzarato starts pointing it out, the prevelance and universality of debt as a basic structure of social and economic life is striking. The creditor and debtor concept extends not just to obvious examples, such as consumer credit or mortgages, but also to education (via student loans), law enforcement ("pay one's debt to society"), employment (most employers, particularly during economic downturns, have successfully inverted the natural direction of the creditor relationship and have made employees feel in debt to the employer for having a job), and social services (unemployment and welfare benefits come with significant, if often unstated, debt-like requirements). Debt is also the great leveller. It now cuts across race, gender, and social class. Apart from a small handful of extremely rich individuals and corporations, Lazzarato claims, convincingly, that nearly everyone is enmeshed to some extent in a network of debt, or at least in in attitudes and moral pressures of a debtor.

Nor is this a static situation. The role of debt in our social lives seems to be constantly increasing. The past fifteen years in particular have seen drastic increases in debt during a debt-funded economic boom combined with debt-funded asset bubbles. Even after the financial collapse, much of that growth of debt persists. Lazzarato, probably in part because he's Italian, focuses on national debt (more on that in a moment); as an American, I'd identify student loan debt as a more compelling example in the United States. Other countries probably have their own examples.

For a system to be this widespread, it must serve some social purpose. Lazzarato sees it as an instrument of control. Debt has been very effectively built up as a moral obligation, and (unlike a society of mutual support) it's a very one-sided moral obligation that strongly favors existing power. The debtor is held to a tight moral standard of repayment of debts, and is morally condemned by all of society, including their peers, for a failure to repay. But there is little or no corresponding moral pressure on the creditor: perhaps a half-hearted dislike of high interest rates or occasional pressure to not change previously agreed terms, but nothing like the moral pressure applied to the debtor. To be a creditor is to have an agreed-upon, one-sided right to dictate to the debtor the terms on which they must conduct a portion of their life, and the larger the debt, the larger the portion. The debtor is expected to realign their life, at least in part, around paying off the debt, including choice of profession, decisions about when to quit a job, about how to prioritize personal spending, and so forth. This is all so automatic and so deeply ingrained that, even while writing this, I'm nodding along and thinking "well, of course." Lazzarato offers an opportunity to take a step back and think about the implications, particularly of the deeply one-sided web of obligations this creates.

A Marxist analysis adds another level of consideration. One of the basic questions of Marxist thought is why workers put up with exploitation by capitalists. In a Marxist analysis, workers provide the productive output of society, which is then redirected and controlled by a relatively small capitalists. The workers massively outnumber the capitalists. Why would they be content for this situation to continue? Marx, of course, thought they wouldn't be, that the periodic crises of capitalism would eventually result in a socialist revolution by the workers. But by and large this hasn't happened. Why?

Lazzarato offers debt as a partial explanation. The profits redirected by capitalists are returned to workers to some extent, but as debt rather than payment. This allows workers to participate to some extent in the growth of societal wealth from constantly increasing productivity, while simultaneously entangling workers in a system of moral control. Company stores, starvation wages, and other confiscatory practices are clear mechanisms of external control that provoke directed outrage. Debt is something that the debtor has nominally agreed to (however much the situation is manipulated to make that agreement almost inevitable), and to which attaches a deep tradition of moral responsibility. The worker has respected grounds on which to object to inequitable treatment; the debtor is wholly responsible for repayment, and is rarely considered to have grounds to complain about the debt. Most of the historical attempts to balance those scales, such as laws and religious rules against usury or the historical Jewish rule of Jubilee, have fallen by the wayside.

This is a rather extended summary of what I got out of the book. I'm doing that in part because the book itself is somewhat heavy going. Lazzarato makes extensive use of specialized terms (often not defined) and fills the book with references to other works without much in the way of useful summary. It's the sort of book where, if you're not already well-versed in the field, you may need to just keep reading through some passages to find a point of reference that makes the argument retroactively make sense. I had a particular difficulty with "subjectivation," a term that Wikipedia tells me is from the writings of Michel Foucault (a major source for this book), which Lazzarato uses extensively but never adequately defines. Some external research indicates that this is a very difficult term to define, which explains why I was never quite comfortable with my understanding. I think Lazzarato is using it to get at the process of internalization of the morality of debt and the way that a debt society forces individuals into a mode of economic individualism in which many of their personal choices are bent towards making themselves better (more reliable, more trustworthy) debtors. But I'm not completely sure.

There are also places in which I think Lazzarato takes his argument too far, although one of those, I think, reflects a difference in national economic status. He makes quite a lot of national debt in this book, placing it in the universal position of the overarching debt that turns every citizen into a debtor even if they've avoided other debts. This is possibly true in countries whose national debts are held in other currencies, or in countries like Italy that are part of the Euro (which, if one is not Germany or France, amounts to much the same thing). It's a dubious assertion for countries like the UK, Japan, or the United States, where the national debt is held in their own free-floating currency and is largely owed domestically, and partly plays into some frustratingly incorrect political rhetoric.

One of the key dynamics of debt, namely the extreme power imbalance between debtor and creditor, is missing in countries with sovereign debt in their own currency, since those countries can always (if they're willing to pay the inflation price) simply print money to pay off national debt. Creditors know this, and therefore interest rates are much lower, the amount of leverage the creditor has is quite limited, and the sorts of debt crises seen in Italy and elsewhere in the Euro periphery are not seen. Lazzarato is understandably writing from the Italian perspective, but I think he weakens his argument by lumping national debt so completely into the same category as the other types of exploitative debt he discusses. The principle does feel universal to me, but the best examples of debt vary by country, so one has to be careful about generalizing specific examples.

Another place where I simply disagree with his conclusions is around some of the more dramatic presentations of subjectivation. Lazzarato talks, at one point, about how debt reduces debtors to mechanical components, and uses as an example an ATM machine, which he portrays as uniquely dehumanizing through the mechanical process that someone has to follow to withdraw money. There may be some point here about the dehumanization of debt and its subsumption into the foundation of day-to-day social interaction, but he lost me entirely with the unwarranted technophobia of the specific example. The idea that machines and automation make us less human is an old argument that's orthogonal to the thrust of his argument. It reminded me of old contentions that human relationships made on-line aren't real, which is nonsense.

Overall, this is a fascinating and insightful discussion hampered by a difficult and sometimes overly elliptical presentation, a bit too much drama and grand theorizing, and a few poor choices of examples. I found the basic idea extremely valuable, but the amount of work required to extract it occasionally irritating. (This could be partly due to the limits of translation, but I suspect most of the difficulty was present in the original.) I'm not sure that I would recommend the book, but I definitely recommend considering the underlying ideas.

Debt now works alongside the employment relationship as a primary means of reinforcing economic and social control and hierarchy. This is likely via accidental development rather than any grand plan, but it's now being actively exploited by the creditors of society, large corporations most notably. Viewed in that light, the explosive growth of student loan debt in the United States is particularly frightening. After Lazzarato's extensive examination of the distortive effects of permanent debt, not just on economics and society but on our own conceptions of our selves and our duties and roles in life, the idea of trapping a generation in debt from the moment of their financial independence is deeply troubling, even nauseating.

Rating: 6 out of 10

Reviewed: 2013-05-28

Last spun 2022-02-06 from thread modified 2013-06-01