Consumer debt crunch and division by two

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Sun Jun 7 21:07:51 PDT 1998

In the Florentine woolen industry of the 17th century, the wage earner was tied to his employer by debts and a whole set of laws was introduced in order to compel him to do overtime. With our culture of minimal math skills, many of us took on more and more consumer debt, even as the interest rate rose from 7 to 15% and beyond. Now in order to hold back the powers of compound interest, workers are finding themselves in no position to look for better jobs, to fight cuts or intensifications. The consumer debt crunch has not stabilized capitalism by propping up effective demand. It surely has not sacrificed savings for consumption (as Harless and Medoff bizzarely argue in The Indebted Society)--in order to pay off that debt, workers are saving ever more of their income. What the consumer debt crunch has done is induce the American proletariat to accept more social degradation; capitalism has thusly been strengthened as it always is by a higher rate of exploitation. best rakesh

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