Wednesday, December 1, 2010

Marx on Public Debt

The national debt, i.e. the alienation of the state -whether that state is despotic, constitutional or republican - marked the capitalist era with its stamp. The only part of the national wealth that actually enters into the collective possession of a modern nation is -the national debt.
The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter's wand, it endows unproductive money with the power of creation and thus turns it into capital, without forcing it to expose itself to the troubles and risks inseparable from its employment or even usury. The state's creditors actually give nothing away, for the sum lent is transformed into public bond, easily negotiable, which go on functioning in their hands as so much hard cash would. But furthermore, and quite apart from the class of idle rentiers thus created, the improvised wealth of financiers who play the role of middlemen between the government and the nation, and the tax-farmers, merchants and private manufacturers, for who a good part of every nation loan performs the service of capital fallen from heaven, apart from all these people, the national debt has given rise to joint stock companies, to dealings in negotiable effects of all kinds, and to speculation: in a word, it has given rise to the stock exchange gambling and the modern bankocracy.

The public debt is certainly being used as a lever for increased accumulation, with the demands to drive down living standards by the IMF, ECB, the Deficit Commission, and the like. In other words, the modern bankocracy and its political representatives.

Capital, page 919- (Penguin Ed.)
Emphasis mine.

1 comment:

The Arthurian said...

Marx is so hard to read.

Since the time of Lincoln, the U.S. dollar has been backed by federal debt. So if we wipe out the federal debt, we can have no money (under the present system, of course). (Maybe that's the plan.)

It is not public debt, but private debt that holds our economy down.