Getting Out of Debt – And the Debt System
Sharon March 1st, 2010
A joint essay by Keith Farnish, Guy McPherson, Dave Pollard and Sharon Astyk
Indebtedness pushes us into a form of servitude, and in extreme cases, can leave us imprisoned. Consider, for example, current rates of interest, usurious compared to what savers earn on their savings in the same banks that charge that interest. Many religious organizations loath interest rates as immoral and criminal because of their human cost. According to all four gospels in the Christian bible, even the normally passive, peaceful prophet of Christianity got so worked up about usury in a temple he started acting like Bobby Knight on the sidelines of a basketball game. Jews were once prohibited from charging one another interest – it was something you could do only to people who you didn’t like very much anyway. In both faiths, the profound consideration that religious texts give to the implications of indebtedness is largely erased from discussion due to its ubiquity today – we worry a lot about who has sex with whom, but not at all about who owns whom.
Purchases by consumers (this awful word is used here only because that’s what we have become — involuntarily) drive the world’s industrial economy. And purchases by consumers depend on the confidence of those consumers, so that consumer confidence underlies commercial success. If a potential consumer has no confidence in his ability to purchase an item, then he won’t. If enough potential consumers lose confidence in their abilities to purchase and pay for any particular item, the sales of that item will plummet, causing the manufacturer and sellers of that item to fail.
Considering the current financial situation, which is likel to crash again and harder, we can help create a situation that will both change behavior for the better and prevent people from getting into financial trouble. The latter portion is vital to getting wide support, and will be a huge challenge for hopelessly optimistic, reality-challenged members of the industrial economy.
How do we convince people they definitely cannot afford to take out loans to buy things? More impact will be realized by targeting luxuries such as houses, cars, and appliances than small “goods.” The Obama administration recognizes this, and has therefore rewarded people for purchasing houses, cars, and — most recently – appliances, by giving them huge financial incentives (i.e., taxes on other Americans who might not even be tempted to play the “consumer” game). All of this has operated to keep us indebted – and to serve the stock market at the expense of the people.
Loans are required for most people to purchase these “durable goods” (which are often no longer durable or good). Loans traditionally are seen as safety nets, but it has become clear as our incomes decline and as we can no longer count on the myth of endless economic growth, that they really represent traps. Never mind the psychological or ecological implications of consumerism — there exists no evidence suggests anybody has minded them so far 
— the focus here is on the trap into which each potential consumer falls by taking out a loans that require us to pay many times the value of what we receive. Most loans are a bad deal for the borrower, although credit cards represent the largest trap (even with the new rules).
The system needs you to keep borrowing. If you stop borrowing, then who knows what could happen. What can you do to get out of debt, and to help others get out? Not all of these responses will be appropriate to everyone, and some of them involve some legal risk, so understand what the risk is before you do it.
No risk:- Don’t take out a loan for anything. If you need it — and probably you don’t — save your money and buy it, or barter for it.
- Encourage others to join you. Start by sharing your car, your garden, your yard, and your lawnmower. Pass stuff on. Give it away. You don’t need that loan, and neither do the people you care about. Caveat: Sharing leads to liability.
- If you already have loans, and most recent students and homeowners do, then seek deferral under economic hardship. Odds are pretty high you’re actually experiencing economic hardship, so this is no big deal. And even if you’re not, there’s no sense feeding the beast if the beast defaults down the road. Caveat: If you lie about economic hardship, your claim about hardship is legally fraudulent.
Low risk but more Radical:
- Start a “misinformation” campaign (from the point of view of the loan companies).
1) Via snail mail, send out false press releases from loan companies and banks to media outlets such as local radio stations, local press and even the nationals if you are brave enough. These press releases should discourage people from taking out loans because, after all, people don’t really need all the toys they buy on credit. If you make the “press releases” as complete as possible, and word them so that responses are not required, then there is a good chance they will be run without questions being asked.
2) Do a bit of subvertising, on the internet or (for a little higher risk) on billboards: focus on loans companies and banks changing the messages to emphasise the theft aspect of loans. Alternatively, just remove loan adverts entirely. For more information on techniques, read this post.Other potential actions along these same lines include:
Obvious satirical routines can be developed for a variety of venues. This strategy should hold particular appeal to artists.
Medium risk:Walk away from your mortgages, as suggested by Dave Pollard: Many Americans are now living in homes with mortgages that are greater than the value of their property. Why would anyone continue to pay a debt that is higher than the asset it secures, unless the home provides them with substantial other value? After all, big corporations view pulling the plug on unsuccessful ventures and sticking the debtholders and shareholders a key business strategy.
The whole idea of “risk capital” is that the interest and other fees you earn for lending to risky borrowers compensates you for the risk, so that if the borrower defaults you accept the loss and chalk it up to experience. Yet for some reason homeowners feel some moral obligation to throw good money endlessly after bad. This of course is exactly what the corporatists, who have no such moral compunction, are counting on, what economists call moral asymmetry. The logical response would be to tell the lender to write off the excess of the mortgage beyond the property value, and refinance the mortgage accordingly. Apparently in some US states (called “recourse” states) this moral asymmetry is institutionalized — that is, lenders can go after a mortgagee’s personal assets if they default. There is, of course, no recourse when the corporatists walk away from debts, offshore their operations, and stiff the taxpayers whose subsidies and bailouts paid for the corporatists’ ventures.
Where is the sense of outrage here? Have the education system and media so dumbed down the citizens that they can’t see this scheme for the cruel and criminal con it is? If everyone with a mortgage greater than the value of their home either walked away from it, or was legally empowered to require the excess to be written off as the “bad debt” it is, then of course there would be many bank failures and plunging profits. That’s how the market system is supposed to work. The lenders, of course, want it both ways, and Obama and the citizens consumers seem blithely willing to let them have it.
Walking away from your mortgage entails medium risk because it will damage your credit rating. Additional risks vary among states, up to and including loss of assets for every person named on the mortgage. Via electronic communications, send out false press releases from loan companies to media outlets. These press releases would discourage people from taking out loans because, after all, citizens don’t really need all the toys they buy on credit. This scheme requires technical expertise: The instigator will hide behind an alter-ego and fake domain.
High risk:
Taking a step beyond abandoning your underwater mortgage, don’t pay off your mortgage even if you’re not underwater. Simply default but continue to occupy your house. Ditto for other loans (but kiss your car goodbye when the repo man does his job). In many cases, lenders can ill afford to tell their stockholders about toxic loans, so — if you avoid undue attention and your loan is too small to “bother” with — the borrower gets the loan for no payments while the lender gets stuck. This point was viewed as radical as little as a year ago, but the idea has been receiving plenty of attention from the media, and even CNBC is on board.
These actions are high risk because they could bring criminal proceedings related to fraud. Probably they won’t. But stranger things have happened, so we issue the following disclaimer:
Recognizing that even civil disobedience is illegal, the authors and the host of this web site do not condone any actions that break the law under the jurisdiction where the described activity is taking place. But let’s be clear – this is civil disobedience, and in a system that is weighted, it deserves serious consideration.Which, of course, doesn’t mean you shouldn’t do them at your own risk – but understand your risk and do it with your eyes open.What we’re trying to do here is help bring down a house of cards: People feeling forced to pay debts far greater than the real value of the assets that secure them. People seduced into getting into debt needlessly. People paying usurious interest rates and fees because the banks own the politicians. It’s a debtors’ prison without locks and doors, and it’s immoral. Please help us bring an end to it.
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- Comments(63)
It’s interesting, evaluating the skewed structure of our debt-driven economy. However, I cannot buy into the notion that the bad behavior of others should dictate how we conduct our own business. Walking away from a mortagage that’s underwater if a person has the ability to pay is just as immoral as usurious interest. Often the mortgage outweighs the value of the home because additional loans were taken against it for “improvements”. You asked for a pool, you got it. All investments come with risk. There is absolutely no guarantee that a house will increase or even hold it’s value. There is gain by the occupant – it’s called shelter, and honoring agreement. In most circumstances, housing markets recover and blossom again, even when it seems unlikely. Encouraging people to vacate their responsibility in a climate of blame-passing isn’t civil disobedience. It’s merely exacerbating the very moral lack that created the circumstance in the first place.
There are many problems to address, admittedly, but stubborn refusal to accept our own destructive participation in the fantasy of overspending is not a solution.
And I forgot to add – the first low risk strategy, to not borrow, is brilliant and wise.
I think suggesting that someone who isn’t underwater stop paying their mortgage for “the heck of it” is extremely bad advice. Just because they’ve decided they no longer want to participate in the debt society doesn’t mean you can just walk away from your responsibility or sit in your house for free. Try deciding to pay off you loans nd then discontinue engaging in the loan process. BTW, people have been taking out loans to buy property for centuries and to act as though the process if faulty, when it is the only way most people can acquire a house is shortsighted. We all can’t roam off out West and claim a homestead anymore.
Hi Meg and Cottage Child
The “walking away” option is High Risk for a reason, and has to be a personal choice. I very much doubt anyone reading any of our blogs is going to be the kind of person who knowingly splashed out on a pool, sauna and games room and now wants to stick two fingers up at the lender; much more likely we are talking about people who have suddenly fallen into massive debt as a result of being sold a dream – and I use the word “sold” on purpose – and now they are in a dire situation. It seems only fair to offer this as at least an option, better risking fraud charges than suicide (and I’m not being overdramatic here, it happens).
This is a good video that sums the “selling” aspect up nicely:
http://www.youtube.com/watch?v=47E7agm9QwU
“Why would anyone continue to pay a debt that is higher than the asset it secures, unless the home provides them with substantial other value?”
Because they still have the means to do so and promised they would?
“After all, big corporations view pulling the plug on unsuccessful ventures and sticking the debtholders and shareholders a key business strategy.”
That doesn’t make it right. Show me, please, where else we’re supposed to look to corporations and their utter amorality to guide our personal decisions. This sounds like an excuse a second grader would come up with to explain their bad behavior: other kids were doing it too.
-This is disappointing, Sharon. I acknowledge that there is a deeply entrenched system here designed to screw the little guy. But as far as I’m aware, no one was signing mortgage documents with guns to their heads. I have no argument with those who default because they can’t scrape the money together – however foolish the loan amount they borrowed, and however much money they foolishly frittered away on non-necessities. But suggesting that those who *can* pay simply don’t is telling people that it’s fine and dandy to renege on their commitments, that a “good faith” promise means nothing, and that basically it’s okay to steal if you come to dislike the system you entered into an agreement with.
“But as far as I’m aware, no one was signing mortgage documents with guns to their heads.”
Not guns, just big promises, it happened in the UK and I’m sure it also happened in the USA:
http://www.independent.co.uk/news/inquiry-into-misselling-of-mortgages-1105132.html
Next time you see an advert for loans, Kate, ask yourself who it is targeted at – the answer will be obvious: those who are in the most vulnerable situations, and just can’t bring themselves to say “no”. When ethics is so screwed then I find myself easily justifying doing whatever I can to hurt the loan companies back; especially if it can get people free from their burden.
It would make sense for the reciprocal to be true as well: if by avoiding borrowing and helping others to do so we lessen the prison of debt for ourselves and others, then by avoiding loaning at interest to governments and corporations, we also hamper their ability to harm us. That would mean reconsidering the use of bonds and their interest income as an investment strategy. Perhaps loaning to each other at no or very low interest would help at both ends. It would entail the risk of being dependent on each other (instead of large institutions) … but we are already dependent on each other anyway, even if we don’t realize it.
I don’t believe that walking away from a mortgage is amoral. There is a signed document that stipulates what the mortgagee will do if the borrower defaults. It’s pretty simple. Businesses do this all the time, why are individuals held to a different moral standard? If one defaults, one is held liable for the stipulations in the contract. Period. Not moral, not amoral.
I do disagree with some of the other ideas (the misinformation ones). They just seem silly to me. I wouldn’t want to send out false information for any reason. That, in my opinion is amoral. People reading the press releases may not see the satire and be harmed.
Hello, Mr. Farnish – I don’t dispute the sales aspect of lending – there are now “financial advisors” in pediatricians offices who spell out for anxious parents “what the doctor would like to do” and “here’s a little loan we offer to help you pay for it”. The chasm between what is needed and what is wanted is ever widening, all while the moral delineation between earned and absconded is narrowing.
There are sadly many, many families who do indeed struggle to make the most humble of mortgage payments who need help and mercy, and the banks would do well to remember the meaning of “personal” lending. In those instances, if all charity has been exhausted, deed in lieu of foreclosure, or even foreclosure w/o recourse, is a navigable and manageble process, knowing that protecting your family is your first obligation. Part of that protection means not succumbing to the superficial, as you suggest – certainly no one suggests suicide or other self destructive behavior as answers. There are sadly many many families who have decided after the fact that they’ve made a series of bad decisions regarding their obligations, and are being invited to justify allowing the rest of us to pay for it. Ongoing bad decisions made from places of fear and anxiety are often just as destructive to one’s well being, once the smoke has cleared, and I would think renting would be superior to stealing, if one’s character matters.
That said, if we’ve lived in the western culture for more than five years, we’re all well aware of the upselling and created need that is our norm. It’s a choice whether or not to participate. I’m surprised that we’re all so quick to assume people are stupid – there’s a backhanded elitism that I’ll admit I have to curb myself. I think we have to recognize that human nature and victimhood are two different things. While I do not care to defend banks for their immoral behavior, it is not an excuse for my own. Living in a house I do not pay for, ignoring reality to suit my own sense of justice, isn’t much of a cause, as I see it. It’s selling something as unpalatable, to my sensibilities, as that to which you’re objecting.
Barbara, with respect, I think you are confusing amoral with immoral. You basically made the argument that mortgage dealings ARE in fact amoral.
Keith, I don’t see loan adverts because I don’t have a tv. However impoverished one is, one is never obligated to watch tv and be exposed to such predatory practices. If you don’t like the adverts, turn off your tv. If you’re concerned about their effect on your community, spread the word. 30 seconds of screen time on the boob tube doesn’t mean we should all walk away from our “good faith” promises.
I agree with cottage child. To cast everyone who’s down on their luck as helpless, oblivious victims who can’t possibly be expected to look out for their own interests does them no service and may involve a good deal of disrespect. Those that were victims of outright fraud in lending practices (and I don’t deny that there are some) have legal venues to pursue redress if their rights were violated. Like it or not, our culture is such that we all must read the fine print, and understand it, before signing on the dotted line. And this doesn’t only apply when dealing with corporations and loans.
I recently posted on my own blog about my favorite cousin who got himself a balloon mortgage from a whitewashing loan officer and still doesn’t quite understand how it works, nearly three years into the loan. Do I think he’s free to walk away? No, not while he can still pay. Do I think he’s a victim? Maybe slightly, but the responsibility was his to understand the terms of what he was agreeing to. He’s not off the hook, either in my book, nor legally. He’d be the last person to claim he was victimized, the last person to just walk away and do the easy thing, and the first person to own his own responsibility in the situation.
Hi Cottage Child
Just to address your last point, I am often surprised how much freedom of thought people think we do have – there is a very good reason why advertisements are run, because they work. If they did not then companies would not spend large chunks of their income investing in them. We talk about political lobbying in strident terms, but in relation to the amount of money spent on consumer advertising it is a pittance: the big bucks are in capturing the consumer Dollar (Pound, Euro, Yen…) – the mere fact most of us are comfortable with the moniker “consumer” speaks volumes.
So, no, I don’t think the average person is stupid: it’s just that the advertisers know exactly what makes people tick, and will keep exploiting that fact for as long as they can get away with it.
Best
Keith
The word “consumer” – as it is defined at wordnetweb.princeton.edu, “a person who uses goods or services”, doesn’t seem to be an awful word.
I think the awful part is the focus of marketing on discretionary spending, at the personal level. Being affluent in monetary terms means you have more money, or at least buying power (debtability) to expend on marketed items. Marketing – “engage in the commercial promotion, sale, or distribution of” – I think actually is an awful word. I view marketing as creating a demand for a product or service – which goes much beyond finding a need and filling that need.
Consumer products includes anything that gets consumed, from wheat and oats, to bread, oatmeal, squash, and eggs. And garden seed. And the conspicuous consumption stuff that causes real harm – the big house, the vehicle that goes way beyond adequate transportation, the biggest appliances – or unneeded appliances.
Does everyone need a manual grain mill for after the lights go out? Interesting, because right now, relatively few people have access to much grain (let alone non-GMO grain). Most of my seed catalogs skip right over where I look to find flax, wheat, and rye. I find I have to be careful about amaranth and sunflowers – to get actual food production, instead of purely decorative varieties. A grain mill – is that conspicuous consumption, now, that might be useful in the future? Maybe.
You mentioned banks. I wonder where that is headed in the consumer area. I have two accounts, in separate banks. One was recently purchased, and they voided all their debit cards. Then they issued the controlling bank’s cards, which are kind of debit cards. That is, they are debit cards that are stamped debit cards, and when processed are funded from my checking account as if it were a check. But to the merchant it is not a debit transaction, but a credit transaction. The bank clearly describes this, that it does credit transactions only.
Several merchants in town have stopped accepting checks. Others paid for the expen$ive check terminals, and checks are now processed as . . . credit transactions. This matters to the merchant – people trying to keep food on their own table – since with a credit transaction (i.e., that check you just wrote), the card company, Visa in this case, gets 3% plus $0.50 to $1.25 before handing the rest of the ticket amount to the merchant. That is, the merchant gets shorted – stiffed – robbed, of 3% of each sale. You may not care about WalMart – but what about your Ace Hardware store, the restaurant you like – or the company you buy seeds from?
If people resort to using cash only – doesn’t that create an opportunity for thieves and robbers?
Hopefully, this creates an atmosphere for a new bank that pledges debit-only debit cards and actually processes checks. Maybe someone will see a need for cook stoves, or grain mills – or broad forks! But then they would have to go looking for . . . consumers. Customers.
Discretionary income – the devil’s playground.
The Cottage Child and Jen said:
“Walking away from a mortagage[sic] that’s underwater if a person has the ability to pay is just as immoral as usurious interest.”
“Just because they’ve decided they no longer want to participate in the debt society doesn’t mean you can just walk away from your responsibility or sit in your house for free.”
I think this is flawed reasoning. Mortgages are a financial contract, not a religious commandment. Contracts are governed by laws, not morals. Neither party has a moral obligation to the other. If you break your contractual obligations, the other party to the contract is free to pursue you though civil action. Breaking most contracts is a civil issue, not a criminal one… this in itself should be a clue to the nature of contracts.
If your point is that society needs people who honor their word in order to function, I would suggest that you are engaged in wishful thinking. An objective reading of history suggests that only the lower classes are required to honor their commitments. Will your personal beliefs to constrain your actions; that’s up to you, but it is foolish to presume that your person beliefs are universal, or even that they should be.
I think this is an excellent essay and I agree with it, but I am too cowardly to translate my beliefs into action; I will continue to pay off the last few thousands of dollars of my modest mortgage.
Hi, Keith – is your beef with advertising? “Marketed to death” is certainly a real phenomenon, but continuing to participate is still a choice.
We recognize for all the luxury of vice we’re afforded (if we agree that debt and hyper-consumerism are vices, and I’m perhaps prematurely assuming we are), the only thing people have, ultimately, to call their own IS their freedom of thought. That means they own it, they either nurture it or they don’t, but laying the blame at the feet of the purveyors is tantamount to “the Devil made me do it”. It’s a lazy philosophy. There is never: you chose this – I’ll walk with you, but still there are consequences. The default seems to be: let’s give it right back to them. Echoes of many failed revolutions, in that.
I don’t like the analogy, frankly, debt=slavery. It diminishes those who have without recourse suffered at the hands of official oppression. Debt DOES equal bondage, but that is a choice to be made, and again, it smacks of elitism to suggest “the little guy” is helpless in that circumstance. He isn’t. To this day, for all the failings that need redress, he isn’t. I wonder if that isn’t the cause best suited to today.
If we don’t recognize the absolutely immoveable reality of fact, and of consequence, action begets reaction, then we are perpetuating the problem. That’s not something I’d care to be accountable for.
Thank you for a thoughtful and thought-provoking discussion. Very interesting, and I’m glad to know you.
Rachael Urban (the cottage child)
It may not be moral to walk away from an underwater mortgage, if you can avoid it, but it’s not “stealing.” Suppose that, following the housing bubble collapse you were told could never happen, your house is only worth $150K, but your mortgage lender insists that you pay $300K plus most of that again in interest for it. Well, if the house were really worth $300K, and you moved out and left them the house PLUS all the money you have paid them to that point, would they not be coming out way ahead? And what asset are you putting in your own pocket? You did not keep the originally lent money; it went to another corporation. You walk away with nothing, although if you can’t repay the mortgage, you’ll be taxed as if it were income. I don’t think it’s okay to stick corporations with all the losses just because they’re corporations, but the opposite view – that the sole burden of the housing bubble should fall on those who had the least influence on its inflation and the least ability to understand its risks – is equally extreme.
@ Edward Bryant … you pointed out “Mortgages are a financial contract, not a religious commandment” and you’re right. At the risk of being hopelessly cliche, we are a nation of laws, not of men – which means the financial contract usurps, in effect, all subjective reason, moral and otherwise. So we are bound to the contract we sign, regardless of our moral compunction. It’s not available to be walked away from just because we think differently today than on the day we signed it. It’s a legal matter. Mercy is a virtue of the moral component. If you want the moral, you engage at the moral level. When we walk away, for which there is legal provision, I don’t believe that’s stealing. Continuing to live in a place I am not paying for in defiance of my promise, is.
I am not suggesting that there shouldn’t be an advent of mutual “business is business” when it comes to bank lending. It is without doubt an incurious doctrine that when banks foreclose, it’s only business, while your/my inability to pay is a personal failing. My argument for the legality/morality/justification of not paying what we owe is simply that we cannot deny facts to get what we want, and then hope the facts will be different tomorrow. There was no force or coercion in the execution of the agreement. We played happily with the scorpion until it stung us. Shame as much on us as on them.
I found this post to be hard reading, it was way outside my understanding of what is right, proper and just.
In the UK you cannot walk away from a mortgage – after the house is sold you are still liable for any short fall on the original debt. Unless you were coerced/duped into signing for the deal you have no excuse and should take the consequences. Walking away from negative equity is like relying on others to pay for your health care.
My father had TB in the 40′s (1/2 a lung and 3 ribs removed under local anaesthetic) there after he couldn’t get life insurance – a great way to learn to take responsibility. As a consequence I have never borrowed money except to buy my house. I have never extended that mortgage. While I have had credit cards I have always paid them off, in full, each month.
I would also like to say that I found the phrase “normally passive, peaceful prophet of Christianity” offensive – the guy had a name, why not use it?
I don’t know who played the major role in putting this post together but I don’t think it was you Sharon, sad that you should have to take my flak.
Hi Rachael,
Thank you for your response. I pretty much agree with it, so I’ll choose only this part of your earlier statement to contend:
“Just because they’ve decided they no longer want to participate in the debt society doesn’t mean you can just walk away from your responsibility…”
There! That gets rid of that pesky “or sit in your house for free.” bit!
So in the words of the immortal Buckaroo Banzai: “yes to the first, no to the second”.
The second bit calls into question the whole capitalistic banking paradigm, and surely we wouldn’t want to go there, would we? If we did, we might have to wonder about the morality of banking, or who’s money is it anyway, or why we live in a system which privatizes profit but socializes risk. Unfortunately, that line of questioning really does tread into ethical and moral issues, rather than mere legal ones.
We might also wonder, if a citizen has duties to the nation/state as well as rights, and corporations have the rights of corporeal citizens, do corporations also have duties to the common weal? Sadly we are but Davids merely attempting to avoid being crushed by manifold Goliaths… would it truly be wrong to pick up our slings? Hmmm?
We can’t walk away either so it is with care that housing is bought and sold round here. I’m afraid no-one feels sorry for those who are foreclosed on unless the cirumstances are something weird. Our compassion is saved for those who are valiantly trying to make ends meet in a tough economy.
viv in nz
Edward, I was the one who said,
“Just because they’ve decided they no longer want to participate in the debt society doesn’t mean you can just walk away from your responsibility…”
There! That gets rid of that pesky “or sit in your house for free.” bit!
I made no moral or amoral claim about mortgages. My contention lies in the advice that even if one is NOT UNDERWATER on their mortgage they should stop paying anyway and just squat in their current and affordable home just to make some sort of misguided statement. I say good luck to you and your family who will be issued an eviction and thrown out on your backside.
Few people ever arrive at the point of moral development where they are competently able to decide what is right based on the weighing of conflicting values and goods, as opposed to based on what they are told to do or what they might get caught at. I don’t know what is right—but I know if I were ever to end up on a jury trying a person accused of illegally occupying a home they’d defaulted on, I would refuse to convict them. (Of course that’s not something you get the privilege of a jury trial for, I don’t think.)
What about folks who borrowed money to pay unaffordable medical bills because it was a choice between debt and death? Now they’re facing a choice between debt or food, debt or rent, debt or paying for more necessary medicines–How many would still be saying it’s their fault for borrowing money in the first place?
Our society in many ways equates houselessness with death. We let, we expect, unhoused people to die. For years we’ve been told it’s a sucker’s game to rent; all that money goes into a black hole and we get nothing in return except the privilege of occupying space. Everyone should have the right to occupy space as a consequence of being alive. No one should get a free 5BR/5BA mansion on the beach, but no one should be forced to work a 40hr week just to pay for the privilege of occupying space. We can see it’s a sucker’s game to be a renter, so everyone who has ever been a renter has wished to be on the other side. The game is set up so that renters lose and borrowers lose, and houseless people are punished brutally for refusing to play. I can’t in good conscience condemn someone for walking away from the game.
Have you heard of the Diggers? What they were doing—growing food for all in need on land that was nominally held in common anyway—was just as illegal and just as virulently opposed by the authorities, but some would say it was morally mandated in a time when poor people were starving because of sky-high food prices.
There are wrongs and there are wrongs. Breaking a promise to a bank to pay back money they shouldn’t have been lending you in the first place is wrong. Meanwhile, another one hundred and twenty species disappeared from our family today; extinct, dead, never to be seen again. That’s wrong. We need to get our priorities straight. Let’s please absolve one another of the wrongs that do no person any harm in order to focus on the wrongs that are ending lives.
My friends and I have been discussing the debt trap over on my blog at http://www.waldeneffect.org/blog/What_is_your_real_hourly_wage__63__/. My boyfriend was raised to think that debt was good — that you “build your credit” and that it’s better to buy a house even if you can’t afford it than to rent. I feel very lucky that I was raised in a more European mode of thinking that debt is bad — you don’t buy what you can’t pay for. I highly recommend the book Your Money or Your Life to help people realize how much of their time that plasma screen TV bought on credit really sucks up.
I find this a very frustrating topic. My husband and I (mid-20′s) are definitely opposed to debt; we lived very frugally to be able to pay off his few school loans soon after graduation, and we are debt free.
Now we are living with his parents to have the opportunity to garden and care for chickens, and ostensibly to save money towards our own place. However, with the very low paying jobs we were able to get in this economy (despite both having BAs) there’s no way we would be able to save enough to buy land/house without taking out a mortgage. Sure, we could just keep saving and saving (and living with in-laws, yay) for years on end, but since inflation easily outpaces the interest earned on savings and the future of our economy is so uncertain, I worry that our savings will just be lost.
What should we do?
I’m surprised at the number of readers who find default legally and morally repugnant, even when the mortgagee is underwater. Even the Wall Street Journal thinks it’s a good idea: “No, you shouldn’t feel bad about it, and you shouldn’t feel guilty. The lenders would do the same to you—in a heartbeat. You need to put yourself and your family’s finances first.”
Corporations are viewed as individuals, at least with respect to benefits, even by the Supreme Court. But when mortgage companies default on contracts that are losing money, it’s called good business. The moral asymmetry is ludicrous, yet some people here are on the side of corporations that default on contracts and take advantage of individual mortgage holders.
This culture’s influence is very strong. Probably lethally so.
I’ve been hard at work getting our family out of debt, and was excited to read this article. You make a great case for walking away from underwater investments like mortgages, as businesses do all the time. And of course not taking on debt if its at all avoidable is a great strategy – though there are times, as another commenter said, when your choice is debt or death.
I love the way you’re calling attention to the power structures inherent in our current system of borrowing. So little attention is paid to the actions of the big companies and the policies of the government. In our rugged American individualism, its so much easier to blame the individual debt holders, and the root of the problem really lies elsewhere.
Argh. Equating the occasional necessity of medical debt in life and death situations with taking on voluntary mortgage and credit card debt by deliberate, often careless choice is interesting, but ultimately is comparing apples to oranges. And somewhat macabre.
[...] SHARON ASTYK Getting Out Of Debt – And The Debt System [...]
I’m just coming back to the computer after a day away, and I’m pleased with the kind of discussion going on – that’s what we hoped most that this would get going.
I understand the “word is my bond” culture – I’m part of it, and I won’t be walking away from my mortgage (it is small and we are not anywhere near underwater) anytime soon. But I do think it is worth asking what happens when ordinary people feel themselves bound by a moral code that redounds to their disadvantage, and that larger institutions and individuals do not feel themselves bound to. It reminds me of the fealty system – it works, in some measure as long as those with power view their power as a measure of responsibility. The problem, of course, is that isn’t the case.
Cornish, I’m sorry if the language offended you – it wasn’t mine, but it was a collaborative writing exercise, and I’m as responsible as anyone else. So my apologies.
Sharon
I guess this is what it boils down to for me. Business culture contends that is is amoral – in other words, it exists outside of any moral system and is governed on a “strictly business” basis. Therefore, we should not judge banks and corporations harshly when they foreclose on family homes, or rape the environment for a quick buck. After all, they operate in a moral vacuum.
Obviously, most of us here disagree with that world view, as evidenced by the tone of this article and comment section. We don’t see corporate actions or business decisions as occurring in a moral vacuum, precisely because those actions and decisions have repercussions in the real world and on real people. We judge many of those repercussions to be unjust, unfair, and unacceptable.
My contention is that we can’t have it both ways. We cannot fault corporations and banks for hiding what we judge to be immoral and unfair behavior behind a facade of amorality, and then turn around and use the rationale of amorality to strike back at them. Either they operate in a moral vacuum and are perfectly justified in doing so, and so are we – OR the moral vacuum is false and wrong-minded, and so we should not operate under those assumptions either. Should all of us operate on “it’s strictly a business decision” basis, or not? If so, then we can hardly justify any criticism or complaint about the way things are.
I don’t deny that the system is deeply flawed. But we would undermine our own arguments – and cede the moral high ground – by following the behavior suggested in this article.
“It’s not available to be walked away from just because we think differently today than on the day we signed it.”
Sure it is, if you’re willing to accept the consequences stipulated in the contract (and the implied consequences that follow from those).
To add to e4:
“’It’s not available to be walked away from just because we think differently today than on the day we signed it.’
“Sure it is, if you’re willing to accept the consequences stipulated in the contract (and the implied consequences that follow from those).”
Including the remedies that you may have at law or equity, especially if the reason you think and understand differently today as opposed to when the contract was made is due to fraud, duress, misrepresentation, or discrimination in the making.
To comment upon Kate:
“Either they operate in a moral vacuum and are perfectly justified in doing so, and so are we – OR the moral vacuum is false and wrong-minded, and so we should not operate under those assumptions either.”
I don’t agree with this either/or distinction. A corporation is a legal entity, something beyond the sum of its individual human parts, created to shield individuals from the consequences of their combined actions. Individuals making up a corporation as officers, shareholders, and employees can make moral decisions and the sum of those decisions might end up in the corporation taking actions that reflect the morals of a particular group of individuals . I’m not sure the corporation (putting aside corporations that are really religions) per se can have morals (or for that matter truthfully avow “to do no evil.”)
Hm. Reading the comments, I can’t help but think that perhaps Nietzsche was right after all. The nobles and the slaves operate on different moral systems, and the slaves cleave to one that is custom-designed to keep them slaves. The ones getting screwed are the only ones playing by the “right and fair” rules, and we somehow believe that it makes us better people for doing so (and hey, maybe it does; I suppose if you’re getting screwed on every side, you need to find solace in something). Best option–first option on the list in fact–is to not play this game at all. But if you are playing (if you hold debt, you are playing) and you still want to make sure that your actions are right on some internal scale, then you are playing checkers and the banks are playing chess. You can stubbornly stick to your right and proper checkers rules, but don’t be surprised when the bank’s knights slice all your pieces into ribbons. Would it be better for everyone to play by the same rules, preferably ones that honor every person and their needs? Heck yeah. But we don’t. SOL. Or as one of the Coen brothers put it in a recent poem, “The drunk driver has the right of way.”
When I signed up for my $175,000 mortgage, I knew that by the end I’d would wind up paying upwards of $350,000 for that loan. I also knew the house would never, ever be worth that much money.
So what does it matter if my house is now worth $175,000 instead of $210,000? Overpaying by $175K vs $140K seems almost academic, as long as I can make the payments I originally agreed to.
Hey people,
I havent read all the resposes here, but I did cruise through the first dozen or so.
To the people who say that walking away from a mortgage is somehow immoral: You are completely off base. There is absolutely no moral metric, religious or other divinable or readilly understandable to the majority. The protestant ethic has imbued many with a sense of responsibility, a misplaced sense in this case, that would have us believe that our word has been given and a bond exists. Not true. A sense of responsibility is not a marker for a discernable morality. The sentiment is more of a reflex. A primeval mechanism.
What is a mortgage?
A translation of mortgage is “death pledge,” or “death grip.” Sounds innocent enough. Not. If we create the so called money that we borrow over the life of our mortgage by our labour, which we do in a fractional reserve banking system, then what is being walked away from? To whom are we being immoral? The bankers who make a living from our labour?
The financial/banking system must be redressed. There is an absolute need for utter reform, no question. Part of that change may come from those who walk away from their mortgages, who demonstrate that mortgages arent necessary or inevitable.
I think, moving forward, that we’re likely to see continuing mortgage defaults which will force this issue yet further into the minds of the avergage person. The notions that where once held as dear and true will be reexamined under the intense light of poverty and energy decline.
I like the ideas of subvertising and misinformation, or rather, using information in a way to get people’s attention. I don’t like at all the idea of defaulting on my student loans or other debt. I spent the money, now I need to pay it back. Though maybe I should only pay the principle and not the interest. I don’t own a home, but I know that if I did, the fact that it’s my HOME would be more important to me than the rather arbitrary dollar value. No one seems to value the fact that people live in their homes.
Kate, I disagree, because I think that civil disobedience is always a legitimate response to injustice – in fact, it has to be. If the law is wrong, civil disobedience is the single best tool ordinary people have in their hands.
Adrienne, I don’t wholly disagree – again, what interests me most is the conversation. But I think student loans, which are often undertaken by teenagers who don’t fully grasp what they are signing up for are particularly problematic.
Again, the whole point of Adapting-In-Place is to ensure that people can stay in their homes if they are of value to them – but I don’t think that means that everyone can or should. One of the operative questions is how much sacrifice you owe the company – it is great to assume that you will always be able to continue to pay the mortgage, but the odds are good that won’t be true. Maybe you knew that going in, and maybe you didn’t – but how much sacrifice should we make – because right now, more Americans are making those sacrifices – something like 60% of all new participants at food banks and pantries are homeowners – so how many meals should they not eat in order to keep the contract? This is a serious question – how far should we go?
Sharon
cavanaugh wrote: “[N]o one should be forced to work a 40hr week just to pay for the privilege of occupying space.”
Indeed. While we are debating morality, it is worth noting that most of us live in jurisdictions that require all housing to be, by world or historical standards, quite expensive. Just as my “choice” to see an expensive doctor is, in a state that has criminalized midwifery and herbalism, somewhat less than totally voluntary, my “choice” to take on a mortgage is influenced by the fact that residential buildings must not only meet basic safety standards, but be of a certain minimum size and “quality” and contain a range of modern conveniences. These requirements make it essentially impossible to build your own shelter in any zoned area, and ensure that no housing cheap enough to buy without a mortgage will be available. Construction industries and banks have handsomely profited from this.
Sharon,
Have you recently warmed up to the notion of civil disobedience? Eitherway, we’re in agreement.
Dewey’s argument is also incredibly pertinent.
Dewey wrote: “Indeed. While we are debating morality, it is worth noting that most of us live in jurisdictions that require all housing to be, by world or historical standards, quite expensive. Just as my “choice” to see an expensive doctor is, in a state that has criminalized midwifery and herbalism, somewhat less than totally voluntary, my “choice” to take on a mortgage is influenced by the fact that residential buildings must not only meet basic safety standards, but be of a certain minimum size and “quality” and contain a range of modern conveniences. These requirements make it essentially impossible to build your own shelter in any zoned area, and ensure that no housing cheap enough to buy without a mortgage will be available. Construction industries and banks have handsomely profited from this.”
I was thinking the same thing. I don’t fundamentally have any problem with people buying their home (shelter) OR renting. On a basic level, it’s no different than anything else you might procure by payment or barter. Someone has the materials and skill to build a shelter, you don’t, you either buy it from them or they allow you to live in it for a period of time for a fee (rent). Fine. But as you say, the “choices” for shelter have FAR surpassed anything most people can afford without incurring debt, and indeed are often over and above what many people would want. To me, this is the most criminal aspect of the whole thing. We only think it’s a free market economy, when in fact our range of choices is dictated by someone else’s need to make a profit. It annoys me that we’re treated like little children who can’t be trusted to manage our own welfare.
Sharon, I think there’s a world of difference between civil disobedience which says “my basic humanity is being denied, and I’m going to peacefully but persistently defy the very laws that formalize that denial,” and refusing to pay back money that one voluntarily borrowed when one is still capable of paying it back. I hope it’s clear that I’m arguing that we must only behave in good faith. I don’t consider it civil disobedience – or wrong – when one is genuinely unable to pay.
You might persuade me with a piece that argued that mortgage holders should pay back the principle only and screw the interest. I say “might” because you’re pretty persuasive and you have a mind better suited to examining arguments from more angles than I do. Still, refusing to pay back money one is capable of paying back does NOT look equivalent in my eyes to refusing to move to the back of the bus or monopolizing lunch counters. If you borrow money and promise to pay it back, you pay it back unless you absolutely cannot.
Should someone making $250k pa, with equity in their property of $100k and an outstanding principle balance on their mortgage of $425k stop making payments even though there’s money in the bank to make them? Because that person easily fits within this rubric, and probably has the most to gain by doing so. The richest of the rich would get the best deal under this suggested course of action.
Fwiw, my husband makes a comfortable salary by any sane measure. We bought in Nov 2006, pretty much the height of the bubble, and our equity:mortgage ratio (based on current estimates of our home’s worth) is about 2:3. (In other words, we’re far from underwater despite the “loss of value” in our property.) Our mortgage isn’t trivial, but neither is it anywhere near big enough to make us a major target in the current environment if we should default. There are plenty of bigger fish out there if our mortgage holder should decide to foreclose and start selling properties. What possible justification could there be for us to simply stop paying? How would it benefit others or challenge an unjust system? Believe me, I can see that there’s a fair chance that it would benefit *us* – we of the dwindling few who can yet afford to keep paying. I’m just not one of those who buys into the idea that whatever benefits me right at this moment is entirely justified.
Sharon, you’ve written reams arguing convincingly that we must not do what is only in our own short term interest, but must do the right thing for the sake of others, and for the sake of the future – even when it involves sacrifice on our part. I respect you deeply, which is why I’m still arguing. Please, help me see why people like my husband and me are justified in not paying back money we borrowed, even though we’re capable of doing so.
I just read a wonderful book, “Just Enough,” about the mostly sustainable economy of Edo-period Japan, written by a Western architect living in Japan. The author doesn’t gloss over oppression and social injustice, but argues that life worked pretty well for most people. Average commoners in Edo lived in “tenement” row houses of several apartments each with a dirt-floored entry room, where most cooking was done, and a nicely constructed tatami-floored single room, often only 9′ by 12′, where other living activities took place. Water and latrines were supplied outside each block of apartments, and individual sources of heating and light (hibachi, oil lamps) were pretty meager.
Now, I have stayed in conditions no better than this abroad, and for myself I would find such housing tolerable if well managed, though it would never be compatible with my DH’s unlicensed landfill operation. You could probably build something similar for $5K per unit – not so nice perhaps, no tatami, but for sure, it would be a hell of a lot better than homelessness. But you would never be allowed to build such dwellings today in any American city or town, or even in many rural areas. Under 200 square feet?! No electricity?! No sewer hookups?! Of course the fact that people living under the bridge down by the river also don’t have utilities is irrelevant to the permitting authorities.
Kate, I think you named the fly that’s in the honey – what we do affects others, all the rationalizations in the world won’t change it.
All decisions and actions are based in morality, whether it’s mine or someone elses. To suggest that a certain moral code should not be pressed upon a certain group because they don’t agree or care to pay, or whatever, by default presses upon me that alternate groups morals. What if I don’t agree, or care to pay, for that groups tenets? That is why contracts have to stand. The remedies are in them. Up to and including not entering into them.
As for the moral aspect, there really is no such thing as “amoral”, ultimately. A chosen restriction of my liberty (debt, in this case) is not an excuse for me to impose a restriction of liberty on others, buy unilaterally deciding to raise their civil burden, because that’s in effect what’s being suggested. Do I think charity and mercy have fallen short in this crisis, yes. But again, the moral, and the Judeo-Christian paradigm, are required to fulfill that. The socialist money grab can lead nowhere but to running out of other people’s money. If you have access to a computer or a public library, there is no good reason to have ignored what is an economic dynamic, the cycle plays out on a fairly regular basis. Changing it for ultimate advantage and abusing it for personal satisfaction are different quantities.
I think the best opportunity we have to change things, and still have a society worth living in, is to stop initiating new debts. If we don’t borrow, the lenders – by virtue of market force – either adapt or go out of business. Who says we have to take out a mortgage? Lots of folks lower their standard of living (relatively speaking, of course) rent, save cash for a small property, and cash flow their build or opt for manufactured housing. And who says a mortgage has to be 30 or 40 years of indebtedness? The underwater part of this whole equation is nothing compared to the accrued interest over decades. If someone can pay off a 40k car note in five years, why not a 120k house note in ten, if that’s the priority? If you like your home, get about the business of paying it off. And in 10 or 15 years when it has in fact recovered it’s entire value and then some, will we all donate that increase to someone who doesn’t feel like paying anymore, or who cannot continue to pay?
Cavanaugh, I appreciate the entire scope of your comment, and I wonder if I misunderstood your meaning when you wrote ” no one should be forced to work a 40hr week just to pay for the privilege of occupying space.” My question is, how much should we work? Is it only according to what we feel like contributing that week? Should I work a 40 hour week so that someone else doesn’t have to? I’m looking for clarification, not a fuss, it’s a genuine question.
Kate,
You’re an intelligent person. Intelligent people usually act in their best interests. It is obvious that in your family’s situation, it doesn’t make sense to not pay your mortgage, which is exactly why you are continuing to pay it. Sharon is advocating that people think for themselves and do what is right for them, she is not encouraging YOU to stop paying your mortgage if it doesn’t make sense.
When you say, “Believe me, I can see that there’s a fair chance that it would benefit *us*”, I feel that you’re kidding yourself for the sake of the argument here. You’ve done the math, calculated the risk, and you know it won’t benefit you and it doesn’t make financial sense for you to stop paying your loan.
I personally want you to do what is right for you, whatever that is. I believe that we operate in a corporate state where economic climates are manipulated and laws are designed to ensnare consumers, like yourself. You made a bad decision to buy a house at the peak, I don’t blame you, but I implore you to ask yourself why you made that poor decision. I would venture a guess you would find you were manipulated in some way, most likely in perception or thought, bubbles create manic and irrational tendencies often propagated by our corporate media. They created a insane climate of “buy before it’s too late!”
The ruling class in our country is malevolent. Their pursuit of other peoples wealth is financial warfare. I believe that is what Sharon recognizes. When there are forces intentionally meaning you economic harm I do believe in defending oneself by trying to damage the system that is the instrument of suffering, in this case the banks and mortgage lenders. To use a bad analogy, when someone is trying to kill you in war you don’t try to hold the moral high ground, it just makes you easier to shoot.
And there is arguably pristine moral high ground in working to defeat a system that means us economic harm.
Kind regards,
Jason
the cottage child
I think several things are wrong with you line of reasoning, but I will focus on the one which seems most glaring to me: your assumption of a universal moral understanding and that its basis is Judeo-Christian. I think individuals can really only decide on their own moral sense and it is that fact which demands secular law rather than some form of canon law.
All decisions have a moral dimension, but others will arrive at a completely different moral calculation than you would. Is your concept of morality correct and another’s wrong? If so, how do you know?
Jason, actually we bought at the peak because that was when we were ready to buy. Did I suspect there was a housing bubble going on? Yes, but I had no clue how long it would last and it didn’t matter to me anyway as I was buying a home, not an investment. I thoroughly reject the idea that I was manipulated. If you think I’m an intelligent person, then give me the credit for being clear-headed as well. We understood the terms of our mortgage, and the risk of real estate losing value. We got the home we wanted at a price we were willing to pay. I don’t think it was a “bad decision” as you say. Unlucky with our timing is as far as I’d go. Plenty of others have far more serious problems in life than bad timing with real estate.
Intelligence aside, I’ll stick to my claim that ethics matter – at least to me. If someone could convince me that it were truly in society’s best interest that I stop paying my mortgage, or that someone who has been unjustly treated would directly and unequivocally benefit by me defaulting, then I would have to seriously consider that choice. Would I sacrifice my home for such a cause? I don’t know, but I think at the least I’d have to honestly work my way through the ethical arguments. So I’d thank you not to pass judgment on my motives.
I outlined my situation because it’s precisely people like me who are being urged to stop making mortgage payments in the “high risk” scenario outline above. If it doesn’t make sense (or isn’t in my self-interest) for me, and it doesn’t make sense for others in similar conditions, then why would the authors of this article make such a suggestion? It seems to me that they’re making an argument that people like me defaulting is a good ethical choice, despite the fact that it’s not in the self-interest of that group to default. Sometimes ethics and self-interest do in fact collide, and that’s not an excuse to back away from the ethical choice. I just don’t see clearly why *voluntary* default would be the ethical choice in that case.
I read Sharon’s books and blogs precisely because she’s a voice of morality, social justice, and ethics. If ethics didn’t mean anything to me, there are plenty of other peak oil/climate change/economic meltdown writers I could read who just stick to facts and straight up doom. Frankly, if morality weren’t important to me I suspect Sharon’s writing would become tiresome rather quickly, because morality informs a great deal of her writing. I don’t claim that I’m a perfectly moral person. In fact my moral development has been lamentably slow in life, but perhaps we all get there eventually. I will say that Sharon’s work has had a significant effect on my growth as a moral being, and I’m grateful for that. So when it seems to me that there’s some incongruity between what she has written, and what she writes now, I’m going to question and probe and discuss.
I’m not here to win an argument. I want to understand where Sharon’s argument is coming from. I still don’t. And the fact that she has said (in comments) that she’s in the same camp as I am (not underwater, able to keep paying) and yet has no intention of stopping her mortgage payments only puzzles me all the more, given that this post ends with a plea to readers to help overturn an unjust system through voluntary default. I have not known Sharon to previously ask others to do what she herself is unwilling to do in the name of social justice. She has always seemed to me to walk the walk. So this is honestly puzzling to me.
Hi, Edward Bryant – I might argue with you that my position is the “right” one, but not for the purposes of this discussion –
I’m sorry we can’t agree that contracts shouldn’t be entered into if there is no effort by one or both parties to honor them, and that debt in general should be avoided in order to affect real change, my two main points. I don’t see how that logic is flawed, but that’s what makes for the discussion, I guess.
I’m not here to defend the current system, or win any arguments….I do think it’s important to be clear on our motives for doing what we do. Blaming faulty economic and social structures while we continue to initiate participation in them is buyer’s remorse, not altruistic activism. Foisting my bad decisions off on others in the name of social justice, isn’t.
Well the cottage child, I guess my understanding of contracts is biased by my experience with them in and out of business.
You said “I’m sorry we can’t agree that contracts shouldn’t be entered into if there is no effort by one or both parties to honor them” but I do not think most people enter into contracts with NO effort to “honor them”. People and business enter into contracts because they intend to benefit from the arrangement. Usually a product or service is rendered by one side to the other for some consideration; if the calculation of benefit is altered radically from the baseline scenario, continuing to honor the contract may no longer be to your benefit. If the consequences for violating the terms of the contract are too onerous, or the damage to your reputation extreme, then you eat your losses and plan more carefully next time. Unless you cannot honor the contract, then default is your only option.
All that is obvious and I am sorry to belabor it. Here is the question though: say you can continue to honor the contract in the short term, but you know you cannot ever successfully discharge the full terms of the contract, i.e., default is inevitable, but not imminent. How long do you continue to honor you obligation? At what point is it “morally” acceptable to default?
@cottage child
First, about my poorly thought-out comparison: Yes, you’re right, it was stupid, and I’d withdraw it if I could. Where I was going with that is that in many parts of the US, being without a home is as much of a death sentence as being without medical care. We routinely consign people who are without a home to death. I have watched apparently normally-functioning (I mean they didn’t seem sociopathic) people step around an unconscious homeless person’s body without a second glance–and this in one of the US’s most reputedly compassionate cities. We expect people who are homeless to die because of it. So if someone’s worldview is predicated on the belief that having a secure place to live, one where a landlord can’t turn you out on the street with a month’s notice, means owning a home, it might very well seem like a matter of life and death to take out a loan–much as if someone’s worldview assumes that the only way to care for a serious illness is to go to a hospital, it may well seem like a matter of life or death to take out a loan for that, or pay for it with a credit card. But it was callous of me to draw the comparison without pointing out the differences. As a society we can choose to keep being unhoused from being a death sentence; we can’t change the fact that many major illnesses will kill a person if not treated.
About wages and work: This valuable article has shaped my thinking on this subject. Our current system of tying the resources needed to survive to how much and what kind of work we do for the commercial system is exactly what is driving consumption, and thereby energy depletion and climate change. Our access to the resources we need to survive has been artificially bound, not to how we contribute to society, but to the commercial profitability of how we contribute to society. I know people who are devoting their lives to traveling from place to place and helping endangered edible plants propagate themselves. No one will pay them for this work, on which our lives may someday depend. They should be working to produce consumer goods and services to be purchased by other consumers of goods and services in order to continue to prop up the whole charade of wealth. The right to a house, the right to food, the right to health care, the right to clothing, the right even to interact with other people in society as an equal is withheld from those whose work is outside the system of consumption and wages, in order to force everyone possible to devote as much of our lives as we are willing to allow to be stolen from us to producing and consuming goods and services–most of which people don’t really need. That is WHY we’re continually being told that it’s our duty to buy things, to keep the economy strong–and if we have to buy with our credit cards so much the better, because then we have to pay for it twice and we support the credit industry as well as the producers of the goods.
So the answer to your question from my perspective is that I don’t know how much people should work. That’s not even a meaningful question to me. A person should work at whatever s/he finds to do that serves people (defined broadly), teaches her or him continuously, and does as little harm as possible. S/he should work at whatever this task is until it ceases to serve people or to teach him or her, or starts becoming harmful. If there is necessary work to do that can’t get done in this manner, the system ought to be redesigned so that it can. Regardless of their manner of work, everyone should have the freedom to occupy the space they need (and we’ll find that’s a lot less space when we aren’t trying to fill it with plasma tvs), the food we need to live healthily, and the basic medical care to keep us alive and free of avoidable suffering as long as we care to be. If we weren’t sinking all of society’s resources into propping up our failing capitalism, we’d find that is well within our means.
Thanks for linking to “The Ecology of Work”, Cavanaugh – it is a genuinely seminal article, and one that has greatly influenced my attitude to work, as opposed to wage slavery / submission to authority.
It seems to be the highest risk actions in the article that have induced the most debate, which sort of makes sense, but this also implies that most people agree with the lower risk actions: When I started the Monthly Undermining Task on The Unsuitablog, one of my personal caveats was that I would never suggest actions unless I was prepared to carry out at least the lower risk ones (I am not in a situation where the higher risk ones are necessary or feasible in most cases).
So, who’s up for a bit of misinformation, for instance?
P.S. Great debate, thanks for enabling it, Sharon.
Kate, I think we have genuinely different views of what a legal contract for repayment consists in. I’m not talking about theft – I signed a contract with an agreement to do something, and with explicit outcomes if I didn’t – that means all the participants knew that default was one of the possible outcomes, and went into this eyes open. It isn’t theft – the bank gets the property back and all the money we’ve paid them up until now. If the bank doesn’t profit on this exchange, well, that’s part of the risk – homeowners underwater are expected to bear that risk. The point here is that consumers can choose to bear the risk, or they can take the hit, and ask a bank to take a hit too. This reality – the point that either party might change the terms of the discussion (and banks do all the time, for example, by selling loans to companies with different insurance requirements, and leave the option open by allowing provision that permit them to call loans) is explicitly made. There’s an underlying implied good faith on both sides – and my argument would be that when the banks exhibit (as they have in a host of ways) bad faith, you are then exempted from showing them good faith.
I think this is civil disobedience in its clearest definition – the attempt to change bad social policy or law by refusing to obey either the literal law or the implied social contract. I would not, for example, advise people to trash their homes as they were departing, or if it were feasible, to put them up on trucks and steal the house. But the bank gets all the money you’ve paid in plus the house.
You are right, I don’t propose things, generally, that I wouldn’t do myself. And most of the things here, I would do (many of them I have done), if the circumstances were correct. I often do propose people do things that I don’t presently do, but would do. That is, had I been pressed into a mortgage that was impoverishing my family I would seriously consider defaulting. I might even consider it, if I weren’t living on a working homestead, and thus housing was somewhat fungible for me, as part of an organized mass protest default whose goals were explicitly civil disobedience. I see this as an alternative option for those who bought in places where adapting in place may not be feasible or for those who live in completely unsuitable housing, and for victims of predatory lending.
This is not a demand that everyone do this – I think most people won’t. But I do think that the option has to be conscious and on the table. There’s a lot of grey space between people who can totally afford their mortgage and people who could pay their mortgage but at a price and those who can’t at all. I think for many people in the grey, defaulting before you actually are forced into it is probably a wise strategy.
I sincerely sympathize with your objections, and I see the force of them. I think you are right about doing the right thing. I don’t think doing the right thing always means doing the legal thing, however. I do, however, respect your integrity, and I think what you are saying is entirely honorable.
I’m sorry if it seems to you I’ve advocated an immoral course of action – I don’t agree. I think that there plenty of tactics to bring down the banks that I would not advocate – but default on a contract that presumes default, that explicitly sets the parameters of the possibility of default, that seems fundamentally different to me.
Milo, my first civil disobedience arrest was when I was 16, so no, this isn’t a new policy for me
. I do think civil disobedience functions well in certain circumstances and not others, but it is always a tool that has to be in the box.
Sharon