 Welcome to all of you for coming this evening. We're very, very pleased to welcome Jonah Montgomery, Senior Lecturer in Economics and Deputy Director of the Political Economy Research Center at Goldsmiths to address us tonight at the Development Studies and Bloomsbury DTC for the Social Sciences Seminar Series. Jonah's published widely on financialization, debt, and the household, and is the lead author of The Politics of Indebtedness, a Public Interest Report, co-author of the book Financial Melancholia, Mental Health and Indebtedness, and her latest publications include A Feminist, Moral, Political Economy of Uneven Reform in Austerity, Britain, and Caring for Debt, How the Household Economy Exposes the Limits of Financialization. Her research interests are in all forms of household debt, mortgage, student loans, consumer credit, payday lending, and its relationship to Anglo-American financialization. If you would like to tweet this evening, the hashtag to use is SOAS Dev Studies and ESRC, and we're also very pleased to welcome Professor Ben Fine with us to provide some discussant comments on Jonah's presentation. He's a Professor of Economics here at SOAS. So without further ado, Jonah, I'll hand over to you. Thank you. Okay, so the presentation I have prepared is for an upcoming book project that I'm working on. So I was really just trying to complete the proposal that goes in next week for this Future of Capitalism series from Paleti, which is about kind of publishing short 25,000-word kind of pamphlet-style provocations that are future-looking in terms of what are some of the ideas that we can think of in a time of great global uncertainty. So this was my kind of proposal was about debt cancellation as a kind of cure for the never-ending crisis of financialization. Now this book project comes at the end of, well, a long period of study, beginning in my doctoral work on debt, but a more recent project that looked at the kind of crafting and alternative politics of debt, which was really about looking at, since 2008, all the different kind of organizations, community groups, policy organizations, think tanks that began to kind of recognize the role that debt was playing, not just in crisis, but also in the austerity period, and really working with them in the first instance to kind of begin to develop a common platform and later on to kind of begin to take a better account of the ideas that they were coming up with, the types of policies, politics, and social movements that were emerging as the kind of problem of debt became ever-present in the wake of financial crisis and as austerity set in. So really the kind of premise of this work is about looking at the central role that debt plays within financialization, not just the big global system of debt, rather than just pulling this one thread of household-level debt and looking at the lens, through the lens of the household, how debt is a kind of transformative force. The book proposal itself tries to make a very pragmatic case for debt cancellation in the sense that in this period of uncertainty when there is such division and in-fighting politically, I'm trying to track towards pragmatism as a way not to say that debt cancellation will cure all problems of a financialized system, but rather that pursuing a path of debt cancellation provides the means to begin to reignite a kind of new imagination about possible economic futures. So it begins with a kind of basic understanding of the debt economy, but importantly the way in which the debt economy and indebted society are not two separate spheres of kind of economic activity. So if we begin with the debt economy, what we start with is how money is made and the business of money-making under financialization. So I'll take the example of the UK because it is literally where we are right now, but again I'm interested in how the Anglo-American model, the kind of leading of the US and the UK is a global push towards finance-led growth, but also I would include Europe in here to various degrees and iterated through different national contexts. But generally the debt economy has a foundation that is in debt money. So this is the, I'm not sure how many of you read a lot about banking, but basically this is about the disintermediation of banking. So it used to be the case that banks took savings deposits and through a fractional reserve system would lend multiples of this savings deposit on to lenders. So the bank intermediated between savers and borrowers and that was their sort of bread and butter business. But what's happened which really has been traced to the end of the Bretton Woods Agreement but really becomes intensified with information and communication technology and the kind of digitalization of global banking is that effectively disintermediation has become the originate and distribute model of banking which means that creating debt is how you create money. So effectively when a bank issues a loan, let's say it's for £250,000 for a mortgage or it's £50,000 line of credit or a £10,000 loan for a car, that debt contract, making that contract actually creates money. So 95%, even estimates up to 97% of pound sterling actually exists as debt deposits, not as currency. So it exists as a claim, a debt claim and a debt contract. So that means that banks create money by issuing debt. So banks are literally in the business of making money which is why it's an incredibly profitable business. Now it's important to understand that just issuing that money does not in and of itself make the debt contract an asset. What makes the debt contract an asset is when present day income is paid on that debt in the form of interest. So has anybody ever had the wonderful experience that you'll give away that you're a homeowner if you do this, of having a pre-approved loan? Yeah, so a pre... Okay, there you go, maybe not. So a pre-approved loan, the bank sends you a notice saying you have 10,000 pounds, 50,000 pounds, 100,000 pounds pre-approved. So they say there's a loan already there for you. All you have to do is take it out. So this is the prime example of how that money, that 50,000 pounds can be made in an account waiting for you, but it doesn't actually exist until you draw down that money, engage in the contract and then begin to make your interest payments on it. So that's an important aspect of how debt becomes an asset, but it's also what makes debt different than money. So money doesn't grow, right? You have money, you have currency, it's fixed, but debt is intrasparing capital, so it grows by definition. Now what's important to understand is that central banks don't actually control the amount of money that is created through debt deposits. There is no base reserves, there are no ratios for controlling how much money is made. It's done entirely by lenders with a license to issue debt deposits. They control, the central bank controls the money supply only through interest rates, which is not much of a lever at all these days. And instead, when these debts are made by lenders, they just simply absorb. The central bank just simply expands its balance sheet. And that's important to understand when we internalize concepts like light touch regulation. So the central bank doesn't actually control the amount of debt it's created. What it does is adjust the interest rates between the value of the debt that they make available to those who trade in the discount window. So again, LIBOR, so the London Interbank Bank Rate, is a private interest rate. The Bank of England base rate is the interest rate between the central bank and the lending institutions. So it's important to understand that there is no one steering the ship. The banks are able to issue debt, they're able to charge the interest that they deem appropriate on whatever loan product and they have a legally enforceable right to enforce that debt contract. So that is an incredible amount of commercial power that is given to one particular group of institutions within the economy. This is the beginning of what becomes then the chain that then circulates of debt contracts through the global system. So this is the originate and distribute model. Banks issue loans, in doing so they create debt deposits, they make assets on their balance sheet, but then they take that legal claim to those interest payments and then they circulate it through the banking system through various different slicing and dicing of claims against the income that's paid on that debt. So it's really important to understand that this is a huge amount of commercial power, legal power, political power, in addition to a kind of economic monetary power. That's not really technically talked about a lot when we just look at strict kind of monetary theories of banking and how it exists in a context of a broader economy. Now, when we get to the story of 2008 debt crisis and austerity, the debt story is really the story of austerity. So how do you manage, how do you govern the debt buildup that occurs because of the originate and distribute model and this kind of debt economy based on this huge growth of debt across all sectors, I would add, and that is the kind of story of crisis and austerity. So I want to talk about austerity as a form of storytelling. So the graph on here is for the UK, the red line is the net public sector debt and the yellow line is just household sector debt. I've excluded the corporate sector, that's in the McKinsey graph next to it, but just to show you a kind of clear example of how austerity is about economic storytelling. So this is a quote from David Cameron. We're in this mess because of too much debt, too much government debt, too much corporate debt, too much personal debt. This is Labour's debt crisis and it becomes clear all the time that the scale of Britain's debts puts us in a much weaker position than other countries. So this is said in 2009. I don't know if you can see the graph out here. So we can see that from the financial crisis, the story of austerity as something of fiscal consolidation, of bringing us into surplus, of controlling the national debt is absolute fiction. The story of austerity is about taking on more and more and more public debt as the rate of private debt uptake stalls because the wider crisis in the economy makes it so that households cannot take on more debt or they're not taking on more debt. So it's just the government beginning to borrow instead of households. So I think that this is a really important way of understanding the nature of austerity as a kind of act of governance of debt. It's trying to tell a different story about debt than the logic of its own actions. Now the next graph over here, can you see it in the back? Is it clear enough? But it's from the McKinsey Global Debt Report. And this is showing in constant dollars the kind of rate of leverage or outstanding debt across the different sectors. So it's showing quite clearly that from 2007 to 2014 in constant dollars, the financial sector has a huge deleveraging. So they're holding less debt. But that is immediately taken up by the government who starts from a lower position of leverage into a much higher one. So this is again the government bailing out the banking sector. Now the household sector quite interestingly also goes through a deleveraging. As we can see here, they're not taking on any more debt. But it's important to understand that this also occurs because quantitative easing which is the central bank scrubbing clean the balance sheets of the banks and other lenders by taking fresh government bonds, again all that boring, giving them to the central bank to scrub the bank's balance sheets clean actually does benefit according to the Bank of England the top 5% of households benefited from this scheme. So they were able to kind of also deleverage as it's shown on a global scale in the McKinsey Report. But what we need to understand then is that the process of governance of debt is really one that is the defining feature of the post-2008 period. An inability to recognize that something needs to be done about this stock of debt. And the proposals on the table aren't any that actually deal directly with how are we going to get rid of this mountain of debt that sits on top of the economy that is taking present-day income all the while and paying it directly into servicing this debt stock. So in the 2008 period what we have is what begins with bank bailouts becomes the unquantified risk guarantee. So in Europe this is the bazooka option where anything will be done to protect the euro. This is the Treasury issuing an unquantified guarantee if there's going to be another bailout of the UK banking system. But then you add on top of that successive rounds of quantitative easing and artificially low interest rates. And we begin to kind of understand that since the financial crisis there has been a consolidation of financialization not that deliberately prevents systemic reform. What happens as a result is what I have kind of increasingly are developing this concept of financial melancholia, right? So this is what the debt stock is doing. So financial melancholia is not your run-of-the-mill Great Depression. So this is to kind of counteract the or offer a new way of thinking about are we in recession, are we in depression, is it a Great Recession, is it another Great Depression, is recovery, the fledging recovery happening. I want to say well actually it's none of those things what we live in is a period of financial melancholia in which the temporal displacement of debt, so the temporal shift of buy now, pay later becomes the organizing force of kind of the economic outlook at the same time as there is a shifting moral economy of debt. So with financial melancholia we have again this basic principle of debt in which you buy now and you pay later. And I know that kind of sounds very simplistic but when we imagine what the effects of that are across the household sector and over time on the scale that we saw here, this huge build up of debt especially at the household level we begin to understand how the long time horizons of debt create a kind of outlook in which the economy is defined as the whole entire future is defined as always paying for the past. So why this matters for debt cancellation is that we have to come to grips with the fact that when a debt contract is issued and that money is created economic activity is registered in that quarter. So when you get your mortgage and you buy your house that is registered in that quarter. When you get your car loan and you drive your car off the lot it's registered in that quarter. So the economic activity that debt generates is measured within the time period of when the debt is issued and when you spend it. What then happens to 5, 10, 25 years in the future is that income is being taken in the present day to pay for the debt of activities that was registered already in the past. So what we have today is that households are still servicing this enormous debt stock that built up before the crisis. So in effect what is continuing to drive the economy down is this concept of debt deflation, right? Every pound, euro, or dollar of present day money taken to pay back debts that were taken on during the good times when everything was booming. Long after the banks have been bailed out long after all kinds of experimental measures have been implemented is really a huge drain and ultimately what is kind of creating a wider economic malaise. Without any prospect of reform or change is that the entire future becomes colonized by a vision of just making it for the end of the month. Just managing your incomings and outgoings in such a way that you can remain solvent. But this does not a recovery make. Having huge segments of the population kind of living under the the yoke of a kind of melancholia that sets in when you cannot let go of the past, right? So that's the kind of concept of melancholia that's different than depression, right? So depression is a kind of acute phase in which you feel, if we just take the psychological definition in which you feel powerless over your circumstances but it's not a kind of generalized phase. Melancholia is like a morning for something that you feel you've lost irreversibly but you can accept that it's gone or for ever kind of trying to revive a sense of control in your life and I think that that's a better way of understanding the effects of debt than for example depressed investor confidence or stagnant consumer confidence because really what debt does especially at the household level is that it requires a great deal of management and I'll get on to that in a minute about caring for debts but when you're trying to imagine a time horizon of staying solvent so maybe I'll pay off my debts in 10 years or 15 years the time horizons are so far in the future that it stifles any sort of revitalization in the present and more importantly financial melancholia tries to make space for the real social, psychological, cultural effects that debt has within society so debt for example is the leading cause of family breakdown so financial trouble, insolvency potential bankruptcy, house problem this is actually causing family breakdown suicide, social unrest as a result of indebtedness these are all things that have been kind of qualitatively and measured in many different kind of studies so I want to propose that it's by recognizing both the economic effects of debt and their kind of sociocultural effects we can begin to understand that debt cancellation is a form of relief it is a reform of relief from always more of the same of a future that is entirely colonized by exactly the type of activity that households try to make every month so the kind of moral aspects of debt that financial melancholia tries to unpack as well not just the kind of temporal dynamics is really that there is a kind of moral economy lens that governs debt which really is about the kind of main economic institutions kind of creating norms that define the rights and responsibilities of debtors and lenders but how these norms are kind of legitimated or kind of through the moral behavior of central bankers, of the Troika and you know of the kind of British bankers association and the American bankers association these trade bodies so what's happened is we have this kind of elite technocratic governance structure that is managing the global financial system and national debt stocks using quite you know moralistic lenses around whose debts should be repaid and whose bad debts should be canceled and that really kind of and we saw probably most clearly in Greece in which you have this you know effective bailout of the banks using kind of government money and then it's the government that must impose austerity the people reject austerity but it's still imposed anyway so the idea that the Greek people must pay the debts that the banks couldn't pay is again the kind of shifting moralism that many people quite rightly recognize at face value as being unethical so what happens when you bail out banks and then enforce austerity is that you kind of you expose this really problematic aspect of the kind of moral sanctity of you must repay your debts when clearly this is only enforced on some debt contracts some actors some of the time and it is through that kind of moral lens that we really begin to see the power relations between creditors and debtors in the era of financialization and which debt is being governed so what I want to point out is that the problem with the debt stock is that it has to be cared for and it has to be so this is the kind of UK outstanding debts US outstanding debts you can see they follow a very similar trajectory like mortgage consumer debt everything is on a rocket upward the reasons for this are somewhat well established stagnating wage growth privatized debt safety nets education loans I mean everyone knows probably by looking in their own wallet and in their own financial statements how all this debt gets amassed there is more debt for everyone obviously it is how money is being generated in the economy this debt stock sits atop in a kind of metaphorical way the household sector and it must be cared for it must be managed through the household budget sheet incomeings and outgoings through cash flow so it's the prioritizing of some debts over others it's the prioritizing of debt over savings or the prioritizing of debt over investments or consumption needs it's how debt becomes a centralized preemptory claim against household income but importantly and the research that I've just finished doing looks at how debt is not managed by one borrower with one lender or one borrower with multiple lenders actually debt is managed at the household level debt is managed within a household and across households as a series of competing claims against what is usually a fairly fixed if not stable source of household income so you need to only look at the kind of segmentation within the labor market to understand that if you're getting a regular salary you're still living in a cost of living crisis but you're trying to manage that salary against mounting debt obligations but if you live but if you have a temporary or contract work if you're a small and medium sized business how you're managing to stay solvent is really an act that is done at the household level through both paid and unpaid work through care obligations through relationships of care and responsibility of obligation and responsibility across the household so therefore it really matters what type of household you come from so debts are not universally bad or good instead they are kind of mediated through class, gender, race but as well as space and time so it matters whether you have a mortgage loan in Southeast England or Northeast England for example right so how much debt you have you can have a much bigger mortgage in the Southeast of England but you would have access to a more vibrant labor market you might have access to real wage gains if you have a much smaller mortgage in the Northeast of England that geography matters you don't have a buoyant employment market you're likely to have declining real incomes so it might be a smaller amount of debt but it's actually the kind of income what kind of income what kind of job you have access to also are you a dual income family are you a single mother with children are you retired are you exited the labor market are you a student the composition of the household matters in terms of how debt is cared for and what its effects are on the wider economy so I want to introduce the idea of debt jubilee well I don't want to introduce it's an old idea lots of people talk about it but I want to take up the idea of debt jubilee as something that we can revive in the contemporary context drawing on all of these kind of different books and literature to kind of think through what would this mean in the context of Anglo-American financialization of debt crisis and austerity what would a debt jubilee today look like or what are some different possibilities for achieving it and I just you know there are just so many examples of debt cancellation that I kind of want to point out that especially with the rise of populism I want to point out that the right wing kind of populist movement I have no doubt will make it right with debt cancellation I have no doubt that the sanctity of you must repay your debts can easily be renegotiated if it's to meet particular ends and we have this example you know in history we can have a quite organized massive default like the end of the Bretton Woods you know when the US promised to give you gold for greenbacks or would promise to give you gold and instead gave you greenbacks you know that was a huge debt default but the economy went on we accepted it and changed or we can have the debt jubilee 2000 the highly indebted poor countries initiative in which it's negotiated piecemeal and only for the kind of most odious debts we can have a vile armor public style of just tearing up the debt contracts you know they can be done in many different ways in many different political contexts so really the this is where I come to a kind of pragmatism in which we need to see this as solving problems and building into a different political movement that captures a different economic imaginary rather than allowing the political movements on the rise to beat us to the punch as it were so one of the proposals is for a kind of basic debt restructuring and so this is I use the symbol that I love from the debt resistance manual that came out you were not alone I thought that that was probably the best capturing of my research done by somebody I've never met in my life but pretty much sums it up which is really about restructuring the household debt stock through a kind of range of different means but really that begins with a kind of household financial assessment if anybody's ever been household financial assessment by the way is a very standard practice you want to go to a personal financial advisor they're going to give you a household financial assessment you want to go to step change you get a personal financial assessment you want to get a mortgage you have to fill out a personal financial assessment the tracking of incomings and outgoings and an era of digitalized banking means that it's quite easy to get a very quick assessment of how much a household owes how much income a household has access to and what is the debt burden so we can begin with quite simple techniques that already exist but really this is about kind of looking at debt restructuring as a way of picking different paths to ultimately reducing the debt stock that fit each national context so there's not a one size fits all approach here because debt exists in a national regulatory framework and when we look at forms of debt resistance work within like southern Europe for example we can see that the legal frameworks of debt actually matter in terms of how we can go about restructuring debt but it's important this quote by the way a write down of debt on this scale would normally lead to an awful lot of losing homes this is actually from the IMF I probably should have attributed that properly but the IMF actually did a working paper that really kind of made the case that we should have household debt forgiveness simply because it would allow for a kind of to prevent a really bad mass scale restructuring the government should absorb some of those costs and implement household was it LTRO process so how would we do this well this is really about making cheap credit a public good so if we imagine that we live right now in a time of negative real interest rates for the big institutional lenders but rather than try to wrap your mind around what that might actually mean let's just take the base rate so if you want to borrow 50 million pounds you'll pay maybe if it depends on what kind of borrower you are just under 1% interest 50 billion not much more than that credit is cheap if you're a good institutional borrower you'll get it cheap you want to borrow 50 pounds on the high street you'll pay what 1500% 1200% at the payday loan your overdraft will cost you 38 48% plus charges and fees if you want to calculate that that's for 50 pounds so 50 billion pounds you can get for next to nothing over the long term but small amounts of credit the type of credit that households borrow at is much more expensive because the household sector is the kind of feedstock for the debt economy so what debt restructuring would mean and household assessment part of that would be a simple debt swap to say that households need to be able to access credit at the same cheap rate as everyone else so you swap high cost fringe finance products with low cost credit alright so this is to kind of prevent the subprime insolvency debacle in which very small scale mortgages were charging really high rates of interest leading to high default rates which then set off all kinds of benchmark indicators and led to a valuation problem so if we instead of allowing continuing to set off the alarm bells within the financial system instead we begin to take household sector debt and restructure it so that credit becomes a public good cheap credit flows to all the sectors of the economy equally another way of making credit a public good is to kind of eliminate the tax breaks that are given to the selling on of distressed debt so a key aspect of how non-performing loans are dealt with is that they're allowed to be kind of wholesale moved off the bank off the balance sheets of lenders and lenders get a tax break for their non-performing assets that's a loss on their balance sheet they get a tax break for it what happens then is they sell the debts on secondary markets so has anyone here heard of the rolling jubilee that they did so rolling jubilee was something they started out of Occupy Wall Street in the US in which they pooled together money bought these debts that were bought on secondary markets discharged debts and forgave debts of people who had been chased by debt collectors so what eliminating the tax break would do is we could say well and it just normalizes a process that the financial conduct authority in this country and in the US they do with Wells Fargo for example in which they're making one off settlements for borrowers you just make this on a mass scale so basically you say to lenders if you cancel the debt you get a tax break if you sell it on you get nothing so you incentivize the banks rather than to sell their debts for 10p on the pound or 5 cents on the dollar you tell them you sell that you cancel the debt you get the tax break you sell it on you get nothing so that we can eliminate this practice of that pushes people into insolvency of kind of buying and selling debt contracts that have already been written off so these are kind of this is what I mean these are kind of pragmatic simple policy based solutions of different paths to implementing debt restructuring but ultimately there will be a kind of level of so there's write down there's restructure write down but then there's write off so that is just cancelling debts how this would work in the property market could be something like if you're over leveraged on your mortgage and you accept some level of debt cancellation you will then be taxed when your house is sold to pay that back so you can't have your debt cancelled and then sell your house and keep all the asset value increased so you could do things like debt cancellation contingent debt cancellation or you can do like what they did with Wonga loans or Wells Fargo's loans you just cancel a whole loan book if it's deemed to be fraudulently obtained if people's interest rates were changed without permission you could also just have wholesale debt cancellation for various different products on various different conditions but if we took it together restructuring down to lower interest rates writing it down on different products and then cancelling or even just cancelling debt because the household is on the verge of insolvency right so rather than tipping them into the point of insolvency you cancel the debts you can speed up the bankruptcy process for example that could be another way some countries like Ireland didn't even have a bankruptcy law you were just chased forever for your debts in the UK for example we have full recourse mortgages that means that if your property sells for less than the value of your mortgage the bank can pursue you until you die for the outstanding amount it doesn't matter that the property is sold there's no downside risk for the lender in that respect I mean it costs the money to chase you up but they can still make that claim against you so debt cancellation can be a way of creating that sharing risk sharing I think is the word they like to use at the central bank risk sharing arrangements but ultimately the goal is not really to let the banks off the hook but rather to let the lenders off the or the borrowers off the hook by saying that listen the good times are over we've we had our day let's stop paying for debts that are 10 or 15 years old you know that the payment of them are draining present-day economic activity present-day household solvency and well-being and and cancel the debt so the reason I want to make these claims again is for this kind of to change the future oriented kind of perspective on alternative economic futures for me I just felt like the only way I could combat what started with the Brexit vote and the and the uncertainty that that brought about then was compounded hugely with Trump being elected president was that I had to start working towards something that I thought could reignite an imagination of a future that might be better than today a kind of imaginary that doesn't leave kind of all radical experiments to the central bank you know so when they start talking about you know quantitative easing is really radical experimental policy will the central bank have digital transfers to households and I thought if all the radical thinking is coming out of the central bank then I'm not doing my job because I need something more than that I don't think leaving debt governance to technocrats is is really enough anymore I think we have to start using concepts like guaranteed minimum income citizens dividend debt cancellation you know doing something about climate change you know these kind of big big existential problems that the world faces I look at the political leadership and I see nothing being done so this argument this kind of pragmatic case for debt cancellation is really about saying we can put some proposals on the table we can debate we can discuss we can disagree but ultimately this is one way that we can begin to work together to imagine a different future and that's really about changing the kind of flawed moral economy of financialization in general but neoliberalism that says you know you're responsible for your future all the risk is yours you're responsible for your own entrepreneurial self here's your loan make the best out of your life and then when everything goes wrong there is a blank check bazooka option given to everybody that brought us into this mess you know I think we really need to begin to challenge that moral economy head on by saying well we can we can make things better because ultimately what the bailout showed was that banks are not bankrupt anymore if that's the case why are households allowed to go bankrupt or if they are allowed to go bankrupt why is it such a bad thing why can't we have more bankruptcy more often right so there's many different ways we can go down this path that really is about exploring what a kind of more egalitarian or socially just moral economy would look like so it's about kind of changing the direction and some of the examples I kind of look to when I think about this future is things like debt audits like the one in Greece like the ones they do in Spain I'll be done a lot but also the kind of debt audits that I found in my research that individuals are doing so you know there's this kind of movement now towards these sort of debt free living debt free journeys there's several groups of debtors coming together to try to repair their balance sheet engaged in a kind of personal austerity of deleveraging these groups are coming together to say debt is actually causing real problems in my household in my life I don't want to live in debt anymore I want debt freedom and working together to try to imagine a future in which they're not living under the yoke of making their interest payments but also a kind of more public act of asking what is this great public debt we're all meant to be tightening our belts to achieve why is it that my belt has to be tightened again and really looking at the kind of auditing of debts both personal at the community level at the national level as a kind of democratic tool to again bring these more technocratic solutions into a broader political and social conversation about what the future holds because as of today I don't think anybody can really say what that will be so I want to take that moment to begin to start to think about a new imaginary so I do that basically by asking this question about everything I know about debt is that it is created as easily as a stroke of a keyboard right so and even the paperwork I always used to say as long as your paperwork is in order you can get a loan but then it turns out with the Wells Fargo Scandal in the US and the motor line debt cancellation in the UK it turns out that not even that's true you can get a loan without any paperwork or without the paperwork being in order at all so it really is that debt can be created as easily as just pressing enter on a keyboard and if that's the case then why can't debt disappear that easily if it's really that simple and that's the kind of the way I'm coming approaching it and so when we look at the other kind of proposals that are on the table about how we can what is the future one is towards a kind of fiscal stimulus directed at household so this is like debt cancellation work alongside these other proposals now this is the argument that we need wages to grow we need wage-led growth we need to inflate the debt away that's the kind of term but the problem is for me is that that is 20 years in the future even if we begin with no more negative real wages let's pump wage-led growth into the system allow incomes to rise and then that will pay down the debt it will happen so far in the future that it doesn't actually cure the kind of problem that has colonized our future it's not a bad idea it would have to work together with immediate debt cancellation the other one is QE for the people this is direct monetary stimulus for households the idea of rather than directing quantitative easing towards the bank we direct it to the household sector and I think there is some potential for that although it's still not clear how it would work but the central bank says it only buys assets it doesn't buy debt what is the assets they would be buying how would it be done I think it's an interesting question and certainly debt cancellation could be part work together with a form of quantitative easing for the people but I think what's most kind of interesting to think about proposals like QE for the people is really that in 2008 things like this were unthinkable absolutely unthinkable that we would have something like QE for the people helicopter money was laughed at that politicians would be talking about a fiscal stimulus and promoting wage-led growth I was listening to Radio 4 the other day and a guy from I want to say he was from a big consultancy firm maybe Capgemini or something actually got on the radio and said listen, why are we being blamed for the failure of globalization and austerity in the end stagnating wages has to do with unionization and that's up to the national government if people just organized in unions wages would go up I was like the guy from Capgemini said that how is it the case that this is the ideas that are being floated around that even in 2008 would have been unthinkable nobody would have said let wages increase no, let alone someone from Capgemini and I think that that's interesting now is the moment, it is this uncertainty it is the way in which we have to kind of combat fear with a different vision perhaps but yeah, that's all I have merry crisis and happy new fear I'm told I can be a bit of a downer so I've tried to lighten up the presentation a bit and you can kind of see some of the other stuff that's written by myself and other colleagues trying to talk about alternative economic futures financial melancholia and indebtedness here and elsewhere but yeah, I open up the floor now so I'd love to get your comments thank you thank you so much Jonah Ben, can I hand over to you for about 10 minutes to offer some reflections on that presentation for us okay, well thanks for that excellent presentation and I always find your work very challenging as well as theoretically and empirically informed with an eye to improving the lives of those particularly at the rough end of contemporary capitalism by chance I came across a quote from George Orwell's Animal Farm this morning to which I've added one word at the beginning, financial financial man is the only creature that consumes without producing he does not give milk, he does not lay eggs he is too weak to pull the plow he cannot run fast enough to catch rabbits yet he is Lord of all the animals he sets them to work he gives them back to them the bare minimum that will prevent them from starving and the rest he keeps for himself and this is quite an appropriate I mean very lucky that I came across it for Gianna's presentation and to some extent reflects her approach analytically and theoretically, she shared her synopsis for the book with me and what I gleaned out of there is that a position in which finance is seen as taking from poor people and in doing so traps itself in continuing recession to which paradoxically and perversely the policy response is austerity which merely makes things even worse this might reflect a deeper theoretical stance or general stance that wages are too low to sustain the capitalist economy and historically this currently takes the form of household indebtedness now this position if I'm getting it correct brings together two traditions over both of which I am very skeptical the first is underconsumptionist in the sense that the reason we're in the trouble we are is because wages are too low and secondly that's what might be called secondary exploitation by finance is one of the mechanisms for bringing this about I don't want to dwell on these I just want to say that I have my doubts about them and about their relation to explaining and remedying the crisis the one thing I do want to do and I've done this before is to raise the question of the empirical weight of the sorts of household indebtedness that we're talking about in terms of its explanation for contemporary capitalism especially if we move beyond this and especially given that the heaviest indebted households in fact you refer to this in terms of the North-South divide in this country are the wealthiest both within and between countries in fact they're the ones with the large mortgages like me however what Jana does do is to target the poor and imagines an army of officials a host of procedures to sort out debt cancellation for those who are worthy of this that is relatively worse off not the heavily mortgaged and rich homeowners a little bit tongue in cheek I want to suggest we already have this and indeed Jana referred to it in partial and diluted forms three ways one of which is actually only come about a couple of weeks ago one is bankruptcy that's one way of debt cancelling by the way if you get into debt declare bankruptcy make it very hard for them to collect interest and they'll leave you alone the second is social security social security is a form of providing for those who are unable to otherwise provide for themselves and the third one the new one which again I just came across by chance is Goldman Sachs I've lost it now Goldman Sachs has suddenly entered into the business of personal loans from $3,500 to $30,000 for terms of up to six years at average rates of interest 12 to 13% below credit card rates so here we have actually still as a rate of interest some degree of debt not quite cancellation but Goldman Sachs has never had anything to do with consumer credit before suddenly entering in a massive way in a massive campaign as it were to relieve you of your major debt burdens there is also the question this comes back to what happened in Animal Farm actually humans men were replaced by pigs who did exactly the same thing if you have your debt cancelled the first thing you're going to do is use that as collateral to get another debt so the question is whether we're going to recreate the same society that we've tried to get rid of however temporarily more significantly I think is to some extent puzzled by this because you've rounded up debt cancellation for countries and so on with that of households this seems to be a circuit to us and particular and select form of a very different sort of policy well perhaps not that different and that is big basic income grant so why not go for that which has certain strategic advantages in terms of possibly more readily mobilizing those for a basic income grant more appeal and probably more practicality in so far as it doesn't seem to involve all of the household assessments that you would see as necessary to get the worthy of debt cancellation now I personally am very skeptical about big as well but that doesn't mean I pose big as search or any measure into including those of debt cancellation that will alleviate the impoverished including debt relief but I would tend to go for other strategies for political, ideological possibly practical reasons as well and those are strategies of direct provision job creation and direction if not appropriation of finance towards providing jobs, services and so on which would appear to me to be more effective in current conditions and provide greater potential for both mobilization and transformation within and out of neoliberalism one million very popular one seems to have gone off the skyline for the moment one million jobs for climate change within Britain for example and I also think this takes away the stigma or shall we call it melancholia attached to indebtedness which may persist with the micro-assessed rather than be relieved with the micro-assessed debt relief that you're suggesting which is very much like social security in some some sense so without fundamental transformations which you begin to embrace but without fundamental transformations other than in the area of the indebtedness of the porous it will be the case possibly that financial man will reappear with pigs in his place fantastic thank you so much do you want to take a few minutes to respond to that before we open to the floor sure excellent comments so I think one of the points I should make more clear is about the connection between debt and wealth so I'm trying to say that debt and wealth are actually not separate entities but debt is wealth in many respects which is exactly to Ben's point that the most indebted are the most wealthy because debt and wealth have a particular connection under financialization which is that again who owns the claims on debt who's getting the fees and the bonuses associated with the spread of debt within society but also how debt is effectively an asset class and debt is intimately linked to the kind of rise of different forms of financialization so if we imagine that debt and wealth are actually the same flip sides of the same coin I don't want to use Keith's heart's famous metaphor but you see where I'm going these are very intimately linked in a way debt is not just a kind of a mechanism or a form of accessing wealth debt is a form of wealth and having debt is a indicator of how much wealth you have or can amass so precisely because you can get a big mortgage and the value of your house will go up higher and higher you then have the paper value to then borrow more against it but what that means is that because of that connection between debt and wealth in the sense that debt cancellation actually allows for which I'll get to your point those that are worthy but actually means that the effects of debt cancellation will be highly concentrated within the wealthiest households they will effectively be hurt most by debt cancellation but I think what I would say there is that this is a trade off we are going to have to relieve the debts of those and I wouldn't say the poor I mean I'm talking more like the 75th percentile down the 80th percentile down would be who I would target or kind of element of the household sector but what they gain through debt cancellation will be paid through the destruction of the wealth claims of those much higher up the income distribution 0.5% of wealth holders so in that respect you kind of spread the benefits widely across society but those left holding the bag are very concentrated at the top some might see it as a good thing but that's also what makes debt cancellation politically totally unpalatable because it's the wealthiest households that are sort of in charge at very least so I think that in that respect the connection between debt and wealth is one I completely agree with and it probably needs to be better unpacked as the book progresses now I think the concept of like those that are worthy is not exactly and it's precisely challenging that moral economy between good credit like credit is good but debt is bad so we saw this you know on a global scale in the 90s through the kind of debt jubilee campaign in which the global north was the great creditor nations of the world and the global south were the kind of debtor nations and we needed some sort of moral justice of debt forgiveness you know the way that it was sort of played up that you know through that language not even what 10, what was it 10 or 15 years later that we have Greece you know again right inside Europe saying no debt cancellation, no forgiveness austerity pay we begin to see that there is no shifting now in the sense that we can say these are the you know these are the creditor nations so what China the great creditor nation or the Gulf states you know China has its own debt problems right it's not a case that they are lending you know money is being generated by lenders by the people who have the ability to issue debt contracts so the idea of kind of credit is good but debt is bad is precisely the kind of moral framing that I'm trying to do away with rather to see it as a form of provisioning credit as a form of like you say direct provisioning so but I like the question and you're probably right about do you just does this just reproduce the system do you just take your debt cancellation and then consume wildly and still exploit the planet or do you take it and just borrow more use it as collateral for more loans although I don't think you really need much collateral for a loan these days I'd point out but you just need a pay stub if that that's an interesting question and I think that there is definitely a possibility that debt cancellation will do nothing to revitalize a kind of future a different future it could just provide a kind of nice little technical fix for the present I do believe that that is why debt cancellation will increasingly be taken up at a technocratic level to kind of provide a kind of band-aid fix to the problem so I'm trying to imagine it as part of something that works with a basic income so not instead of a basic income what I'm saying is that the basic income or a basic income grant or citizens dividend no matter what will be something that could only decrease debt over the long term decades even because it would have to be first implemented parsed out and you would still have to do a household assessment anyway to have access to a kind of basic income you would still have to register you'd still have to kind of provide that kind of details so I'm just saying and again I think of the household assessment as something that's a little bit more empowering than a kind of being counting exercise to determine whether you're worthy or not I see it more as like people and that's my again my empirical research with debtors is more that people feel so alienated from their own finances money goes in electronically they don't even send you a pay slip and it goes in electronically your bills come out electronically you can just sort of go ages without even looking all you're looking is to see is if you're an overdraft right you're just trying to is taking over people feel very distanced from their own their own financial state right there's no home economics anymore there's no which you're sort of managing the household you're just sort of told go out there work consume and you know if only a good financial citizen sort of gets software to do it instead I want to kind of imagine the household assessment as a way in which people would I guess I don't know what would be the parallel but would be what I would see it as a more empowering tool than than just to be assessed that you know passed on to kind of a series of procedures but you're right though that is exactly how it would have to be in practice so I think that the the fundamental question that you raise that I don't have an answer for but I need to work out is whether you'd have to be worthy and what would the conditions of that be because I wouldn't I would want to change the framing of that but also what is the radical potential if debt cancellation just becomes a mechanism for fixing a broken system and and I and that's why I would like to see it as part of something of a wider program of direct provisioning is how I would answer that Fantastic. Can we see who has some questions from the floor take a few together yeah please yeah at the back there oh yeah keep going yeah well link the two on housing and yeah so they I mean dealing with housing and debt cancellation around housing is again is a kind of tricky business because it depends on the kind of context it would be a real national context issue because you're right in the US they have non-recourse mortgages so you can just leave your keys on the when you can't make payments anymore you leave your keys on the on the in the house and you walk away and it's the bank has to accept the risk that you can't make your payments and that is precisely why there's such a sharp contraction the property market and the banks had all kinds of problems whereas in the UK because we have full recourse mortgages households still continue to even if they're underwater in their homes even if they can't make payments they really understand that if they sell their house for less than the value of their mortgage there's still people pursuing being pursued for endowment mortgage that they walked away from in the 90s so that kind of fear actually is precisely the kind of psychological effects that debt has that exists in different contexts but it's also why the UK didn't even though it had such a substantial property bubble as well didn't go down the same route as the US which was sharp contraction and then begin to try to claw back some of the you know price increases as if that was a good thing so I think the idea around housing provisioning and the state getting back into the direct provision of housing isn't really important aspect like you rightly point out about what would need to happen in order to prevent this kind of housing based welfare right so instead of actually relying on your house being your pension why don't you provide an actual pension or why don't you provide housing for pensioners because this is precisely the problem is that housing wealth has become the you know people's pension savings as the kind of demographic you know the supposed demographic bomb has meant that state pension provision hasn't been high enough but ultimately this is a one shot deal we don't have the type of and this is intergenerational quality we don't have the ability of one generation to use their house as a pension sell their house at a huge markup take that one off windfall of money to live off for the rest of their life that can only happen for one generation because what we found that's happening across Europe and in particular in the UK is that those people who had access to cheap and affordable housing in the 90s interest rates that were going down but property values that were going up like then is that you know effectively you have people that were buying houses cheap the value was only going up interest rates were only going down incomes were still buoyant they want to sell that house to a younger generation of people who have unstable unemployment real wage declines at a substantial markup those people will not earn enough in their lifetime to expect a 200% increase property value or whatever it is that the average household enjoyed in Britain is a one time deal it's a one off generational windfall for those that were born at the right time so the issue about sorry did I lose you there so basically what it is is that in the 90s in particular yeah people got cheap housing so we can only cancel the debt of those that are highly leveraged but now that doesn't again to Ben's point prevent another property bubble from forming if we still rely on housing wealth as the primary financial asset that all households own so if all households main financial asset is their home and that is their main pension savings then we will continue to stoke property bubbles because that's how every individual household will provide for their old age government provisioning for those who exit the labor market we begin to then eliminate all of the driving forces towards housing and debt based housing so again debt cancellation in and of itself alone would not address the issue in the long term of fundamentally reforming the housing bubble but it would in conjunction with other measures what I think would say though is that it is an important measure especially for those people who are struggling to get on the housing market or entered the housing market in the past about five to seven years when you know highly leveraged we need to eliminate some of that debt to make the outstanding mortgages on that housing more affordable and more manageable which isn't exactly debt cancellation but it's certainly restructuring now for the question about debt to GDP ratios and the kind of different picture I mean that's exactly right it's just that I don't use that measure because I'm trying to talk about household level provisioning rather than the entire value of household debt to the whole entire economy and the value added in the economy because I'm trying to show that it is the household sector that must provision must provide the necessary income and management of that debt stock and these are also the workers and the consumers and the carers and the kind of providers of the reproduction of the economy has to also sort of reproduce these debts and manage them so that's why I don't use that measure but you're absolutely right that even if we look at debt to GDP ratios or even debt to household income ratios I mean the funny thing is that the US and UK aren't even the worst the worst is the Netherlands Sweden Denmark but what makes these countries different than the Anglo-American countries is that these are countries that have direct social provisioning by the government these have highly elaborate welfare states that so that households don't mind being highly leveraged because they know they'll have a pension they'll never be homeless so it's that kind of psychological sociological phenomenon of living in a kind of Anglo-liberal country that really does make it's not the absolute level of debt it's what the debt is doing regardless of its level to the economy that is a problem but yeah being realistic about how possible debt cancellation is a huge issue I mean that's the rub for me right is that well we can have literally billions and billions of pounds you know approved regularly to extend quantitative easing to use government debt to pass it on to scrub the balance sheets of the bank clean without question without accountability I mean the new one I'm trying to work on is can we make quantitative easing at least as onerous as social impact bonds so you know you can kind of apply for quantitative easing as an institution if you kind of meet the same benchmarks that they laid out for social impact bonds I mean that would be something of a parody but it's totally unrealistic because there's no question that quantitative easing will be renewed again or that it will continue in some way shape or form because that is about providing for the banks which goes to your point about why can't we just let the banks go bankrupts and if we lived in a world where when banks went bankrupt your debt contracts were cancelled then yes but actually what happens is the bank goes bankrupt the outstanding debts are assets that are then sold off to the creditors of the bank so it would do nothing for the borrowers themselves if a bank went bankrupt they would just pass that debt on to another solvent lender which is what happened in the UK with Northern Rock I mean nobody who had a Northern Rock break on it they just said oh don't worry keep making your payments you'll just make it to someone else so I think that that's the kind of dynamic I'm trying to more say well if banks can't go bankrupt anymore then we need to begin to fundamentally rethink the morality of bankruptcy and I do think that the great thing about bankruptcy is that it does sort of draw a line under boom and bust right I mean it just creates a limit to and draws a line to say you know we're done now we have to in some way reset we have to start from a different position you know which is the point of debt jubilee to begin with and I think that that is really the appeal right when we live in a time of such uncertainty of so much fluctuation the idea that we could somehow draw some line under it to say okay the past is the past let's work towards a different future I think in this climate it has more traction than it would have even five years ago or even three years ago and it's about you know building that political argument because ultimately you know there is still a realistic argument about why it's a good thing there's cost benefits we just need to push hard for it I guess rather than imagine that the capitalist will accept it based purely on its logic and merit to fight like hell to get it absolutely and debt cancellation is a way of saying well if you do anything you want so can we you know if that makes flip it in the sense Alfredo you had a question I'm not good at predictions but yeah okay yeah sure well I think this kind of fits in nicely with kind of Ben's point about do we just does debt cancellation just provide a kind of does anything new come of it or is it just implementing the same system again so in terms of what happens to the financial system well number one I don't think it's Armageddon because ultimately much of the financial system in this day and age is about slicing, dicing, organizing, reorganizing various claims on on interest basically on income streams on interest payments so all debt cancellation would do is really to say well we're going to have a reduction in the outstanding stock of debt but it invites the kind of financial system to then reorganize, reconstitute re-slice, re-dice a different set of a different debt stock so what happens and in the end we have to remember that the global financial system is already incredibly unstable as it is right now rising default rates on any one of the thousands of different types of stock debt products that are pulled together, securitized whether they're covered bonds or securitized assets all the different standard debt products a rising default rate on any of them could trigger the next crisis so it is not already a stable supply size system it is already inherently fragile so there is another crisis coming sooner rather than later and in that respect debt cancellation plays a role in providing a different remedy to that crisis than the one that we dealt with last so what happens in the financial system is that effectively the receivables have to be restructured we have to have a new schedule a new asset profile for example if we took the pooling of credit so the debt swaps for high interest household loans for lower interest some sort of government pool that would just require again that would be a new securitized product these pools are replenished every six months every year anyway this would be about another round of kind of repooling claims slicing and dicing and charging fees all along the way no doubt which isn't actually a huge change from what happens now but it does provide temporary relief what debt cancellation would do in the long term though is precisely to introduce ideas of downside risk to precisely force lenders to accept that not every debt that they issue will be repaid in full and therefore they have to bear if debt is easily created it can easily be eliminated and therefore the game for them becomes different now I'm not a great believer I don't know if it's because of the kind of bankers I interact with because of the history of the city of London and Wall Street I think the idea that Armageddon that the financial industry would face Armageddon I just don't believe it I think they would just reinvent themselves as they do with every crisis to provide liquidity I mean ultimately my point is that financial re-regulation post-crisis even if it's implemented isn't going to prevent the next financial crisis so we already have a process of re-regulation recapitalizing the banks new what counts as collateral all these kind of initiatives right and even if they're implemented we'll do nothing to deal with the current debt stock and most certainly will not prevent what's coming now what debt cancellation does to reorganize the system is to kind of begin to introduce new time horizons so should we really have 30 year loans should we really have open-ended credit contracts like credit cards that can go on for 8, 9 years I mean they say for example bankers say that credit cards are short-term lending facilities well the research that I did into the securitized assets of credit cards where that 80% of credit card holders have a balance for longer than 5 years so if that's the case then do I imagine we say okay if you have a credit card balance for longer than 2 years you get moved on to a different product this is about restructuring the banking industry so that small institutions make small scale loans medium-sized institutions make medium-sized loans and large institutions make large loans that is a way of combating liquidity does debt cancellation achieve that no but can the banking my question is can the financial system be restructured in that way without debt cancellation I doubt it right so debt cancellation is about providing that kind of that movement to reform that necessary kind of structural change you know let the banks have a bit of structural adjustment for once but that I believe the liquidity will come after because again the reason why we have so much debt is because of how easy it is to create it really is about electronic registers of assets and liabilities who owes what to whom it doesn't sorry it doesn't require in the same way that intermediated banking did that people who had deposits now lose them people who had savings will not lose their savings nobody has savings anyway note to self not many people do anyway so that liquidity will be created because debt cancellation will enable the necessary structural reform of the financial system so that's kind of how I'm answering those three questions that's what I hope would happen because again the point is always that debt cancellation cannot be done in isolation it has to be part of other efforts at reform but what are the kind of macro consequences and the secondary consequences which again I think feeds into this are we just believing that debt cancellation will fuel another consumption boom and you know I certainly hope not right and that's not the point of this but again that's about asking a question about what do you do when you don't pay when you're not using that income to pay your debts do you go engage in a huge consumer boom or do you invest in green jobs or you know are the kind of tax implications of a debt write off could that be part of funding in green jobs I mean these are different questions that have to be done in conjunction with a kind of again a new radical imaginary of what kind of future do we build because there ain't no going back unfortunately and the idea of the next cycle is probably what I would tackle first is that we're not looking at funding the next cycle of credit and consumption and booming asset values we're looking at using credit as a public good to provide provisioning to provide not growth but basic reproductive functions again like I don't believe the average household economy or the average household within the kind of household sector actually wants to grow in the way a business wants to grow or a way in which the kind of logic of capitalism is of profit and growth the average household wants to reproduce itself right two households want to engage in by-to-let property markets of course they do but why right it's not an inherent profit-rent-seeking kind of behavior of individuals we see the rise of the by-to-let market coincide directly with cheap credit people who had access to cheap housing able to kind of create their nest egg by having two or three small properties big huge property owning companies having access to cheap credit to borrow 50 billion pounds in a go to buy up entire stock of council housing so it is credit itself that is driving the kind of consolidation of financialized assets so therefore through debt cancellation I believe we will as a by-product destabilize paper-valued assets in a way that would be good because ultimately if all liquidity does is pump up values in a boom and bust cycle then maybe the problem is too much liquidity not the fear of not enough that makes sense we'll take a few more questions and then for anything else maybe you'd like to join us for a reception in the senior common room in the main building for some wine and nibbles with Jonah and Ben afterwards so I'm going to take one two and then three okay okay hold it's probably true I don't quite know how actually I'll answer that one first because I learned a lot from the people doing the research into this kind of debt-free living I read all the self-help books we did some research into the consumer forums with these people engaged in debt-free living and at first I thought these were really just people who had sort of completely internalized the logic of austerity and debt repayment these were like all my fault I'm morally responsible for all of this I need to do whatever I can and what instead what I found in these kind of forums was really a kind of a rejection of consumerism and a rejection of a financialized way of life they have it they call it the light bulb moment right so they call it the moment you realize that your debts are so big it will destroy your life and it's totally pointless like the PlayStation you bought the holiday you know so there's this woman who's got this great she's one of the kind of gurus of this but she invites you to write a breakup letter with your debt and I mean that is just for me was reading that was I mean it really kind of typified to me what you're saying about the consumer culture you know you're supposed to say like dear debt we had a great run didn't we remember when we went to Thailand on that last minute holiday remember when we bought the kitchen extension I loved picking out those tiles with you you know it's like you write this really emotional you know letter to your debt and you kind of say but you're killing me you know you're destroying the family I'm up late at night like you're a pro you know and I need to be done with you now and you kind of and I thought you know in this way it's kind of a recognition of the temptation of consumer life and at the same time a kind of disavowal of ultimately financialized subject subjectivity like I'm prepared and then they talk these support groups are about them supporting each other to kind of not get into debt so my whole family hates me because I'm not going to my uncle's funeral but I can't afford it without putting it on a credit card and they won't understand right they don't understand I won't go into debt and everybody's like it's okay you know you have to make this commitment to your future you know like so they in which they this isn't just as simple as you give people money and they go out and spend it because people are kind of unthinking consumers it's actually that the material psychological emotional effects of debt reach so deep into the intimacies of life these days I mean if you imagine nowadays you're a 15 year old kid whether you have a bank account in your whole life you have to decide now are you going to go to university what degree are you going to take and will it be worth 50,000 pounds of debt slavery for the rest of your life I mean this is like we're asking little children you know who have very limited responsibility this is what they have to and I'm complicit in it as a lecturer which is something I have a really hard time with but you know we have to understand that you know one of the quotes I always use is the pregnant woman who's talking about trying to pay off her credit card before the baby comes because she has minimal maternity and so on and she's like you know I can't believe I can't pay off my credit card you know the baby's coming like debt is right there with the birth of a baby like this debt is going to live in our family it's going to keep getting you know and it's that way in which debt intrudes into these intimacies of life that I think actually is ripe for a kind of way in which debt forgiveness can be part of a push against consumerism in that respect because what does that debt kind of symbolize in a way is that it could potentially be part of that is what I would like to see but in terms of the kind of hierarchy of what's possible I quite like that I may steal it and I think what I mean by we can't go backward is that and I would say that about social provisioning as well is like I have no desire to kind of revive a job seeker's allowance that defines your access to social provisioning based on your full-time employment contract and this is what we have in other places as well you play a form of insurance how long you're in full-time employment is actually directly kind of related to your right to access unemployment benefits or something I would be looking more towards a guaranteed income more of a kind of direct provisioning for the household sector and your point is well taken that having a well-funded social security system is more radical a suggestion than debt cancellation I believe that because in this day and age it just seems totally unpalatable that for some reason the politics says that the state shouldn't be provisioning for the household sector who are also the main taxpayers in this country anyway I find that a little bit contradictory but is it possible I wouldn't want debt cancellation to be used to kind of reprivatize social security rather I would want debt cancellation to be a recognition that social security has been privatized through debt so medical debt debt taken on unemployment that those types of debt should be forgiven if you can show for example the research done by step change showed that 45% of their claimants who are in major financial distress were because they had a drop in income due to unemployment so they were unemployed they got a loan to plug the gap three months four months then they got a job and the debt burden that had to be serviced through employment meant that they were in still in huge financial distress so we have entire kind of welfare and employment policies that imagine a world where when you get back in employment you're back in solvency and the reality of debt is different that in deadness is reconfiguring what it means to kind of be financially precarious it's not just that you're unemployed you can be fully employed and still be financially precarious because of the debt that you carry that was incurred strictly in times of unemployment or have moratorium or something like that these kind of proposals already exist but I would hope that debt cancellation could be used in conjunction with a form of direct provisioning more importantly I would add that if we are to get rid of the good credit, bad debt, moral economy part of that is about asking can credit be used as a form of direct provisioning can for example if the government provided instead of a dividend it said okay well we'll provide you with 2,000 pounds free overdraft interest free like the social fund but you don't apply for it because you have need you apply for it as a kind of government sponsored overdraft so that you can make a shortfall is that not a way to deliver social security you know like is it that it's interest bearing that would be a problem could it be free credit, could it be like an overdraft do you see what I mean like the liquidity that kind of the contemporary financial system can offer through it's kind of through the organization of credit can credit not become something like a public good something that actually provides provisioning for the household sector not something that is purely always a bad thing I don't know that's the kind of question I would like to explore I guess yeah of course I'm not against provision based on need I'm against only provision based on need because those need requirements can be so easily determined through kind of very you know it's too easily manipulated to say well you need to be this desperate in order to qualify like for the social fund for example you would have to have maxed out all of your benefits all of your all the other entitlements you had before you could have made a hundred pound loan interest free from the government I mean why why do people have to jump through so many hoops just to access something that is literally can be created that easily you see the determining of need creates such a bureaucratic oversight that that is the kind of reaching down into the in which we are relying on technocrats to kind of determine what need is rather than actually acknowledging that then I see your point like what about the people who need it most they should get more is that what you mean of need but yeah I would be saying that you would have access to this overdraft in a time of need like you would have access to it or maybe you could use it all the time I don't know but I'm saying is that these shouldn't be just determined by those that are worthy because that's the part about Ben's comment that that's precisely what I wouldn't want is to kind of determine benchmarks of worthiness for debt forgiveness rather to say that we can all benefit from debt cancellation and we should all have access to or at least the bottom 80% of income earners should have household sector should have access to provisioning from the state rather than just the most over indebted I think that's more what I'm trying to say I think that's the perfect kind of topic for us to discuss further over a glass of wine I think I'll need 10 glasses of wine Exactly, a free glass of wine in the senior common room in the main building so if you'd like to all join me in thanking Jonah and Ben for sharing that evening with us