3. The Rule of Finance

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Liquified Capital

From Chicago to Puerto Rico to San Francisco, debt is a terrain of struggle within and against America’s racialized empire of indifference.

The Debts of the American Empire — Real and Imagined

Featured illustration by Mirko Rastić.

We are used to speaking about debt as an individual experience, one of lonely insomnia, and of grinding, inescapable worry. Authors like David Graeber or Maurizio Lazzarato have taught us that debt functions so perniciously because it merges economic obligation with moral condemnation: debt and guilt are intimately connected. All the more so in neoliberal societies where free-market individualism not only sees the growth of personal debt levels but also hides or obscures the sociological and common roots of those debts, making them appear solely the fault and responsibility of individuals.

Puerto Rico smallBut what about debts experienced not as an individual, but as a collective, through institutions, nations and cities? In our ongoing research project, we are examining the relationship of these forms of collective debt and the imagination. Debt is, after all, everywhere and also nowhere at all, unavoidable and yet ephemeral. In this project, we want to engage with the unconscious of debt within what the late theorist of financialization Randy Martin called an “Empire of Indifference,” where it is fruitless to make a distinction today between the make-believe economies of debt and credit and the “real” economy of goods and services: finance rules and is, indeed, reorganizing the world in its image, transforming everything from education to health to personal relationships into “investments” to be leveraged and risks to be managed. The result is a global empire of liquified capital, coursing around the world at accelerating speeds and seeping intensively into our daily lives, our social relationships and our sense of self.

Unavoidably, this empire’s heart is the United States, the world’s unrivaled superpower, home to Wall Street and other financial forces that, in spite of recent rivalries and setbacks, still dominates global trade and the orchestration of global capitalism. Thus, in this project, we wanted to study three crisis zones at the heart of the empire, three spaces of collective debt that might reveal the complexities and characteristics of our moment. In all three cases, debt is the product of vast and entrenched economic inequalities rooted in systemic and structural oppression, violence and exploitation. Those injustices made the emergence of the debt inevitable, and the debt, in turn, reinforces and re-entrenches the injustices, locking them into the future. Yet underneath, other debts — deeper, unseen and often unacknowledged — move like subterranean rivers, cracking the pavements and threatening to erupt in resistance and revolt.


Walking around Chicago’s South Side I’m shocked at how little the infrastructure has been cared for. The streets, streetlights and metro stations are in total disrepair. Sidewalks sometimes just disappear into broken glass and yellowed grass. Schools and stores are boarded-up. We’re only a few blocks from Obama’s house. The infrastructure is speaking for the city, and the message is: “fuck you, get out.” I know that as a white person from the suburbs, the message is not meant for me.

Chicago’s school board (CPS) is over $6 billion in debt to Wall Street banks and other corporate bondholders. These sharks have, in turn, laced the debt into the investments and savings of small retail investors like pension funds, insurance companies and mutual-fund holders. Years of neoliberal cuts to taxes at both the city, state and federal level have led to conditions in which, over the past 20 years, CPS was compelled to borrow ever-increasing amounts at increasingly extortionate rates just to keep the doors to the schools open in America’s third largest city. While the city’s corporate media has been quick to blame the fiscal situation on the greed of unionized teachers, the reality is more complex and involves the invisiblized histories of racism in the third-most segregated city in the United States.

From 1905-‘70, the Black population of Chicago grew from 2 percent to 35 percent of the total as migrants fled the deadly institutionalized racism of the US South. But thanks to decades of explicitly or implicitly racist housing policy in Chicago, most of that population was restricted to a small selection of neighborhoods on the outskirts of the city’s thriving downtown. In spite of decades of struggle, the city remains deeply unequal: since 1990 white families have seen their income rise by 30 percent on average, not even remotely keeping pace with inflation, but Black families’ income has actually declined by 4 percent.

The subprime mortgage racket decimated many Black communities who were explicitly targeted for predatory loans and foreclosures. Meanwhile, in the wake of protests against the police shooting of unarmed Black men, a task force appointed by the city’s mayor was unsparing in its criticism of Chicago’s police department, charging them with pervasive and systematic discrimination and violence against the city’s Black population as well as ignoring or burying decades’ worth of complaints.

As Paula Chakravartty and Denise Ferreria da Silva have shown, today’s debt empire depends on reproducing racialized subjects who are financially sabotaged by a grid of systemic and structural injustices. Indeed, these subjects become opportunities for speculative wealth extraction as private school providers, private prisons, sweatshops, subprime lenders and other industries blossom while the neoliberal state retreats from any commitment to social care, instead encouraging the militarization of everyday life.

I bike 30 minutes north along the luxury waterfront highway for cyclists, pedestrians and runners to arrive on a downtown concrete platform reinforced to hold 120 tons of seamless steel and wood — a huge silver bean, 10 meters tall, surrounded by tourists and locals. Photograph yourself in front of this huge shiny warped glowing city of skyscrapers, surrounded by concrete and business suits. See yourself in your city, which is also every city, a magic city, a quicksilver bubble of opportunity and financial anxiety. But you can never enter it — it’s nothing but endless, reflective surface. “Cloud Gate,” the 2006 sculpture by Anish Kapoor, was inspired by liquid mercury, the toxic plasma that is released from power plants and gold mines. A monument to the convergence of modern money and the postmodern city: a bubble of financial liquidity itself.

The history of systemic and structural racism is important to understand to fathom the complexities of the Chicago Public School debt crisis. While whites, Latinxs and African-Americans represent roughly 30 percent of Chicago’s population each, only 9 percent of white parents send their children to the city’s public schools (mostly in wealthy suburbs). The systematic economic abandonment of the Chicago Public Schools has actually amounted to society’s abandonment of racialized children. For instance, in response to the debt CPS incurred to make up for shortfalls in revenues, in 2013 it closed 49 schools, the vast majority of which were in highly racialized neighborhoods.

34. Cloud gate portrait orientation SMALL

Photo by Clark & Kim Kays, via Flickr

In an age of neoliberalism when all societal problems become seen as personal responsibilities, racialized families and children are constantly told to “invest” in their education to gain access to opportunities and a chance to escape poverty and oppression. Yet even if these myths matched reality (they don’t: Black people with university degrees typically earn less and pass on less wealth to their children than whites without), the possibility of “getting an education” has been fundamentally sabotaged. Worse, it has been sacrificed on the altar of high finance: today, 40 percent of the CPS budget is dedicated to debt repayment, which goes directly into the pockets of banks and corporations whose executives and shareholders are disproportionately white.

The $23 million it cost to erect “Cloud Gate” was, allegedly, privately raised. But it feels like the South Side and the West Side have been squeezed until the gold came out, squeezed until the paint fell off the walls, and the cement cracked. And all of the energy that would repair those breakages and ruptures has been stolen, and pumped into this useless toy, this growthless seed. It holds hostage all the resources and attention that is missing.

The intersections of debt, race and education are hidden in plain sight in an American media landscape dominated by sensationalist headlines about criminal violence. But it is precisely this dense knot of oppression, exploitation and inequality, which traces its roots back to the institutions of slavery, that drives the perpetuation of exploitative racialized poverty in Chicago and belies the meritocratic mythology of white supremacy. It also animates the righteous and stalwart rage so powerfully expressed by the Black Lives Matter movement, which has manifested in Chicago in massive street demonstrations led by high-school students. It also inspires the generative and optimistic occupation of a park across the street from a once-secret police facility that, after years of community activism, courts have affirmed was used essentially as a torture chamber.

That activism successfully won monetary reparations for survivors of the facility, but Black Lives Matter and its allies also have other, more profound debts to settle. As Ta-Nehisi Coates made clear in his provocative 2014 article in The Atlantic, “The Case for Reparations,” the unspoken and unspeakable debt owed to Black Americans is not merely for the wealth extracted from their ancestors under the institution of slavery, wealth that quite literally built the nation and its institutions. It is also owed for the multiple and persistent processes of land theft, institutional exclusion and economic sabotage since the Civil War, up to and including the subprime mortgage meltdown which hit Black families targeted by predatory loans disproportionately hard. Yet others argue that the depth of the damage is unfathomable and the scope of the debt is incalculable. The only remedy that will suffice is a revolutionary transformation that fundamentally unseats white supremacy, abolishes racial privilege and radically redistributes the empire’s ill-begotten wealth.

Puerto Rico

An hour west of San Juan, the capital of Puerto Rico, we are standing in a gravel parking lot at dusk, looking up at a newly assembled bronze sculpture of Christopher Columbus, slightly taller than the Statue of Liberty. The “Birth of the New World” was meant to celebrate the 500-year anniversary of Columbus’ blunder into the Americas, but since 1991 six other US cities have declined the opportunity to host the statue due (according to the Economist) “to its monstrous size, ugliness and the prohibitive cost of installation.”

But the mayor of the economically depressed Arecibo, which has been steadily losing population for the past two decades, likely believed in the power of culture and tourism as forces that might offer a road to financial survival for the city. Fifty-two percent of the population and 64 percent of children live in poverty — a rate that is about 10 percent higher than Puerto Rico as a whole but more than double the rate in the United States.

The shadow of Columbus looms over Puerto Rico. When the Genevan mercenary arrived on his second voyage to the so-called New World, he rapidly sought to enslave the local Taino indigenous people to hunt for gold. While the Taino were to put up decades of militant resistance, eventually all that remained was a genetic trace within a mixed Puerto Rican population, which also inherited a legacy from poor European proletarians and enslaved Africans. At the close of the Spanish-American war in 1898 the United States arrived claiming to be liberators, but it quickly became clear that they saw the tiny Caribbean island as a possession.

Though today its residents enjoy American citizenship and its government proclaims itself a “commonwealth,” Puerto Rico remains essentially a colony of the world’s largest superpower. Odd and unique laws apply here that would be unacceptable in either a sovereign nation or a US state: the Puerto Rican constitution is essentially observed at the pleasure of the US Congress and many key legal and financial policies and decisions occur outside their control. These include a bevy of laws that have led to the fateful situation in which an island with a population of 3 million owes a debt of at least $76 billion — with special provisions stipulating that bondholders must be paid out first from government revenues, before pensioners, teachers or police are; that Puerto Rico cannot declare bankruptcy; and that the bonds are triple tax-exempt. In sum, through the complicity of local elites, American politicians and Wall Street investors, the island has been made into a tax haven and a utopia for financial speculators.

Standing just off the parking lot with our video camera, a middle-aged man yells a warning from the porch of his mother’s house. We are just making a funny video about Christopher Columbus, I tell him, but he orders us to stop: “he was a bad guy but he gave my people jobs.” The man says he found three months of work helping to assemble the statue, and now that it is completed he offers tours. “If you could go back in time and talk to Columbus, what would you say?” Max asks. “I wouldn’t say anything,” he replies. “I would kill him. He was terrible. He doesn’t deserve to be there. But God put that sack of shit there for some reason. He gave work to Puerto Ricans. So I am his bodyguard.”

Haiven Thornton TimelineAs with so many countries in the Global South, the hot financial money that flowed into Puerto Rico since the 1980s and that today haunts the island like the spirit of Columbus, did little to improve the quality of life for the island’s working class or the nation’s infrastructure. Puerto Rico remains substantially poorer on a per capita basis than the poorest US state, Mississippi. Partly this has to do with the fact that the islands are compelled to import almost everything from US corporations. Walmart and Walgreens (Puerto Rico has the highest concentration of both per square mile anywhere in the world) dominate consumer markets and employment. Even the branch-plant pharmaceutical industry, which once produced most of the prescription drugs sold in the US, has left for greener pastures since a lucrative set of incentives was ended in the 1990s.

In 2015, the Governor of Puerto Rico was forced to take the remarkable step of declaring publicly that his government could not repay its swelling debts, triggering a series of Congressional hearings and backroom deals that led to the passing of the PROMESA bill in the spring of 2016. Among other things, the bill forestalls the vulture funds that bought up Puerto Rico’s bonds at a huge discount; eager to reap the rewards of the US fiscal intervention they knew would be inevitable. But Puerto Rico will now be forced to repay the odious debt for generations to come, and the bill allows for the establishment of a fiscal control board that essentially strips (already minimal) economic autonomy from the nation’s government and opens the door to even deeper cuts to education, pensions and the civil service. It also threatens the privatization of the island’s natural bounty: its forests, urban spaces and beaches that are so beloved of the people and that have attracted the appetites of developers and resorts. Meanwhile, Puerto Rico is currently seeing the largest emigration of people (especially young people) to the United States since the 1950s, leaving cities like Arecibo behind as ghost towns.

It is the ecological threat that has most catalyzed the resistant spirit of Puerto Rico in recent years. Since the US claimed the colony almost 125 years ago it has brutally repressed nationalist and independence struggles, using tactics that have included the bombing of US citizens, the torture of prisoners, illegal incarceration, police entrapment and extrajudicial assassination. Yet we may be seeing the rise of a new generation of non-violent revolutionaries with a strong anti-colonial philosophy, a populist approach and a profound ecological consciousness. Recent victorious struggles have included forcing the US military to abandon its ecologically catastrophic munitions testing on the paradise island of Vieques, the prevention of the spraying of NALED insecticide to control the spread of the Zika Virus, and the reclamation and re-wilding of a beach in the hyper-corporate tourist district in San Juan. These coalition struggles are waged with a profound love for the land and a sense of debt or obligation to the gentle tropical beauty of the islands and their fertile abundance. More deeply still, they are emerging from a realization that the American Dream of boundless consumerism is, in reality, an alien nightmare for which Puerto Rico’s land and people will continue to pay the price.

These movements often ground themselves in the profound debts owed to Puerto Rico by the United States, for instance for decades of ecological damage caused by the presence of the US military and US industry. As Franz Fanon illustrated over sixty years ago, the psychic life of colonialism operates by insisting that the colonized owes the colonizer the debt of civilization. But as Aime Cesaire noted in his furious Discours sur le Colonialisme, the debt is actually owed to the colonized, whose land, labor and resources have been stolen to build the metropole’s cities and reinforce its self-aggrandizing mythology.

San Francisco

When I moved to the Bay Area in 2010 to go get an $80,000 Masters of Fine Art degree I found a big room in an apartment in the Mission with a local writer for $640 per month. Even back then they were drilling for truffle oil in the cracks between the buildings. My roommate had a strict weekly schedule of events that had nothing to do with money, competition or productivity: swimming in the ice-cold bay, hitting up the free farmers’ market and free meditation, the by-donation yoga, the sliding-scale acupuncture and clothing swaps. Art galleries or poetry readings existed in parks and in the backrooms of bookstores. I have nostalgia for a time I barely witnessed. But these facts feel like ancient history and I feel like a living fossil, though I’m a comparatively recent invasive species.

According to the popular landlord rental website Zumper, the median rent for a one bedroom apartment in San Francisco in 2015 was $3,410 per month. A worker earning the city’s $13-per-hour minimum wage would need to work at least nine hours all seven days of the week to earn that much and have nothing left. Last year the asking prices for homes across the Bay in Oakland increased 14 percent and rents increased by 21 percent, only to be outdone by Berkeley to the north at a 32 percent increase. Reports from the San Francisco Rent Board indicated that, in the five years prior to 2015, the eviction rate increased by 54 percent.

The racialized effects of what is all too often termed “gentrification” are staggering. According to census data, in the 40 years leading up to 2010, the Black population of San Francisco diminished by half. A recent report from the Oakland-based grassroots advocacy group Causa Justa indicated that between 1990 and 2011 the proportion of Black residents in Oakland fell by nearly 40 percent and the proportion of homeowners who were Black diminished by half. Last year, San Francisco’s Mission district lost over 1,000 Latino families and has seen an influx of 2,900 white households.

When my roommate left for NYC in 2012 I filled the apartment with other students, people new to SF with big futures and lots of debt. We were all broke and we used the apartment to scam money to live on so we could buy organic vegetables. We were paying $1,300 a month but we could rent out our apartment temporarily for $4,000 and I slept better knowing that I could always cash-in. One Christmas break when I needed money I collected all the glass shards in front of my house on Folsom Street and hot-glued them to some old jewelry. The owner of the vintage steam-punk store handed me $400 for the junk I dumped on the counter with shaky hands, figuring, I guess, that he could turn a profit. That place is now closed — the rent was too high, probably.

33. Bay Are Skyline screenwide

The story is well known. A city once famous for its artists, academics and working-class manufacturing and transportation jobs found itself home to the burgeoning corporations like Apple and Google and a thriving “tech boom” of start-ups driven by highly-leveraged venture capital. Thanks to decades of countercultural, queer, Black and Latino arts and activism, the city had gained a global reputation as the home of creative thinking, diverse acceptance and anti-establishment thinking — all things that attracted the pioneers of Silicon Valley. But the influx of wealth drove up prices and rents in ways reminiscent of the city’s origins in the 1849 gold rush, which in the span of a decade nearly obliterated the indigenous population. Today, those renegade souls who built the city’s “cultural capital” have been forced out or underground, or have seen the rich fabric of their cooperative lives commodified and resold in the form of live-work lofts, hip urban styles or new apps that aim to monetize every human experience.

When my landlord raised our rent to $4,000 we tried to avoid him, but eventually my roommates and I decided we didn’t want to fight. At viewings of one-bedroom apartments where paint had been used to disguise crumbling walls I waited in line with men in suits with their sterling credit reports displayed on their iPads. Denied time and again, I wrote my own credit report in which I tried to explain that I deserved housing as much as someone who was rich and employed full time. Landlords giggled when they saw that I had manufactured my own narrative, that I considered myself trustworthy. But I started to do this for others in the Bay for a year or two, and sometimes it helped.

It has become cliché to note this process occurring in the Bay — the process is so hyperbolic and rapid it hardly needs comment, brought to light by recent high-profile protests at the AirBNB headquarters or against the private-bus Google charters to shuttle its employees from their gentrified downtown Oakland lofts south to the corporate campus in Palo Alto. What perhaps needs more parsing is the politics of debt that so vastly and profoundly transform the city. In part, the rapid gentrification of Oakland was enabled by the waves of racialized foreclosures that occurred around the 2008 financial crisis. Meanwhile, the massive buy-up of homes in the whole Bay Area in the past decade was enabled and exacerbated by, on the one hand, large hedge funds and investors backing highly leveraged speculators and property management firms and, on the other, the enthusiasm with which banks made loans to (prospective) landlords eager to cash in on rising rents.

What’s more, in a city being taken over by highly educated tech-workers and those who service them, debt is the unspoken link between of a generation of so-called “young professionals” and precarious workers (denied the right to make a living from the arts and relegated to slinging espresso or performing sex work), most of whom have emerged with compulsory expensive university degrees. Many people are borrowing money (on credit cards, for instance) merely to afford living in the Bay, in the hopes their fortunes will turn. Others survive on student loans. Worst of all, the tech industry, powered largely by a culture of smug free-market libertarian self-congratulation, has seen fit to revolutionize personal debt under the banner of “financial technologies” (or FinTech), including horrific schemes for peer-to-peer lending and human-capital financing that take the worst aspects of the so-called “sharing economy” and apply them to the realms of debt and credit.

At an overpriced café near my room in the Mission I was asked out by a guy in a Lamborghini wearing Google Glasses. The men at the next table, all in Spandex — designer bikes locked up nearby — were having a group therapy session. The city had evicted my friends, and this was who was left, enjoying what we helped create. I’m leaving. Seven years in and I’m a young veteran. Most of the people I knew trying to live outside of capitalism have left, unless they’ve capitalized on their anti-capitalism by selling it, getting paid to pursue it as a PhD, or teaching it at an art school debt factory. The new, crisp white art museums popping up around the Bay, built on borrowed money or the largess of the tech industry, are monuments to this process. They’re the cultural version of investment banks with 24-hour security, built to preserve in the Bay’s cultural capital and social dynamics in climate-controlled rooms for the pleasure of those who can pay the ever-increasing admission. These frozen zones are, in fact, incubators for the next (and final) invasive species to occupy the city: wealthy, (half-)dead white men, whose artwork is here exalted, with only a very special area set aside for the living artists, the non-white people, the women and children.

The American Empire, built on colonial land theft, genocide and slavery, is today an empire of debt that is rotting from the inside. Its self-aggrandizing culture industries and chauvinist politicos insist otherwise, braying about freedom, fairness and a new American century. Bullishly militaristic in both financial and foreign policy, this heavily indebted country is also one of the world’s most unequal. It uses the individualizing punishments of debt, rent and prisons to enforce highly racialized forms of injustice that still sometimes bubble over into open revolt.

While weaponized debt rages like a river on the surface, underneath subterranean streams run in other directions. The debts owed to the survivors of racist history, of colonialism, of ecological destruction, of displacement and of exploitation gather momentum and sometimes break the surface, geysering up with righteous vengeance. The question of whether many isolated movements will converge around the common theme of the debts owed to them by this empire of debt is an open one. What is undeniable is that the empire is near its breaking point. Barbarian, thug, hooligan, terrorist: these are merely the names that empires give to those who come collecting the debts they are owed. The real barbarians wear suits in fortresses made of glass, data and hubris.

Cassie Thornton

Cassie Thornton is a US-born artist and activist now residing in Canada and the founder, current caretaker and coordinator of The Hologram project.

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