14. Student Debt and the Crisis of Capitalism

The student loan crisis, in many ways, embodies the general crisis of capitalism, and ultimately of a society that has lost all sense of grounding in justice and worthwhile existence.The student loan situation is simply one more symptom of the illness of greed and the pursuit of profit above all other concerns. Ultimately, the crisis embodies the broken promises of capitalism, the transformation of the American dream into the American nightmare.

Currently, in the United States, something in the area of 60 percent of all student loan debtors are not in in good standing with their payments. They are either in default, deferment, or behind in payments. The outstanding student debt has now reached 1.2 trillion dollars, and has surpassed the total amount of credit card debt.

From an economic perspective, it’s obvious that a serious crisis is brewing, and that the catalyst for economic collapse is beginning to form. Indeed, a financial crisis on par with, or worse than, the 2008 Financial crisis hangs like a Sword of Domocles over global capitalist society. These crises will continue to happen because capitalism itself is an outmoded system that we continue to cling to out of fear and cynicism.



Capitalism and a debt-based monetary system (one in which money is created through interest bearing loans), require firms, business, and individuals to increase profits in order to survive in the competitive-market economy. (I say “competitive-market” economy, because I believe that a market economy is possible, but not one that is as cut-throat as our current one. It’s one thing to have two ice cream shops competing to make the best product, it’s another to have the “loser” in the situation lose a home or starve to death.)

The first and most obvious problem with a debt based monetary system is that in order for it survive, the economy must create more and more profit, and therefore must colonize more and more resources. In terms of the service sector economy, this means that more and more forms of human interaction must be colonized by the market system. And of course, in terms of industry and manufacturing, more and more physical resources must be extracted from the Earth. Ignoring the obvious ethical concern of whether or not it’s good for human beings to have all of their interactions turned into commodities, or whether or not the Earth should simply be treated as a commodity itself, whose only function and value is as a source to pillage from, there remains the very simple fact that a system which requires infinite growth can’t survive on a finite world.From global warming, to deforestation and mountain-top removal, to the mundane alienation from nature in which most “civilized” people find themselves, the symptoms of this problem are obvious to anyone who is willing to look.



And then of course there’s the inherent crisis in the wage system of capitalism which Marx, for all of his flaws, pointed out over 150 years ago. One of the biggest obstacles to profit is the cost of labor. Firms and businesses must constantly lower the cost of labor. They do this by paying workers as little as possible, laying them off and increasing productivity (requiring more work for the same pay), and by automating labor, eliminating the need for human workers (wage earners). The inherent problem here is that in the overall closed loop economic system, wage earners are the ones who purchase the goods they manufacture. Ultimately, the firms impoverish their own customer base, leaving an economy with tremendous productive capacity but with the vast majority of the society unable to access it. Sound familiar?

The story of capitalism has ultimately been one of the ruling (owning) class finding ways to put off this crisis until a later date. During colonialism, geographical expansion was the method used to keep the system going. Now that capitalism has truly become global, it has invaded and colonized virtually all of our spheres of human interaction, turning what were once free relationships into commodities. Finally, the last stop-gap measure, used to buy time and stave off the impending collapse has been the use of debt. From the 1950’s to the 1970’s, because of efforts from labor unions, as well as concessions made by the Western capitalist class, who were fearful of a worker’s revolution inspired by those in the Soviet Union and in other parts of the third-world, the working class in the U.S and Britain earned relatively decent wages. The system began to falter under the weight of the high labor costs, and various crises emerged. The ruling class began implementing a set of policies known as Neoliberalism. Manufacturing jobs disappeared, being shipped overseas or automated. Real wages stagnated, but were hidden by inflation. On paper, workers seemed to be making more money, but their overall purchasing power remained the same or lowered. The main economic growth came from the growth in the financial sector, making money from money, while not creating anything of actual value or use. As real wages stagnated, the cost of living continued to increase. This was palliated by, among other things, the introduction of women into the workplace. Women’s liberation was used to disguise the fact that two incomes were needed to support a household, rather than one. The great strides made by the feminist movement were colonized and co-opted by capitalism, convincing women that wage slavery was the ticket to freedom.

Lastly, and most importantly, the availability of credit was increased. People were able to mask their stagnating wages by going into debt to purchase consumer goods and to maintain the lifestyle promised by capitalism. Credit cards became common-place, no longer relegated to en elite class of traveling businessmen. Additionally, people refinanced homes, using their equity as an ATM machine. In Europe, the same process occurred, but with welfare states in place of the credit card as the social safety net. This was a somewhat more noble and enlightened effort, but equally as unsustainable within a capitalist system.

The system continues its march forward, destroying both the human and natural ecology and replacing them with a dreary, alienated consumerism. Just as strip malls, highways, and cookie cutter houses decimate the natural environment in their relentless sprawl, so has consumer culture replaced a sense of actual human community and culture. Furthermore, the above crisis continues to grow, as income disparity continues to grow throughout the world, leaving more and more people impoverished and with wealth accumulated into the hands of a disconnected, walled-off, and decadent few.

The point is, we stand at an impasse. Capitalism has helped human society to develop the tools and technology for abundance. The scarcity of the system served as fertilizer rocket fuel to propel us forward, but now it threatens to burn us alive. The automation of production and services would, in a rational world, be heralded as the great liberator from mundane toil. However, human society remains chained by the fetter of an out-moded scarcity mentality, while the tantalizing prospect of a world of abundance and freedom remains inches away from our grasp. The tools are lying there, if only we would trust ourselves and take them.

Ultimately, the greatest battle is within ourselves. It is spiritual and psychological. We must overcome the deeply rooted scarcity mentality that haunts us from the deepest parts of our reptilian brains and accept the reality of potential abundance that lies around us. We must face the reality that a society in which the potential for abundance exists, but is given only to a select few based on their circumstances of birth, is an unjust one and should be burned away, replaced by a sane, just and sustainable one.

The student debt crisis has the potential to be a revolutionary catalyst. The idea of debt itself points to the fact that material abundance is around. Everything from food, to housing, to college classes, to notebook computers are all paid for by an exchange of credits, by the promise of future abundance. Why must the system work in such a way that channels more and more of that future abundance into the hands of a wealthy few and away from everyone else, whose future promises only scarcity and slavery.

For such a system to make sense, those who accumulate the wealth at the top should be the wisest, the ones who are best able to guide the society. They would need to be paragons of humanity. And of course, this is clearly not the case. Cocaine and prostitutes aside, any man (and yes, they are virtually all men) who would require another to go homeless, to go without food, in order to maintain his wealth, particularly in a situation of such potential abundance, is truly without something, without that thing we call the heart, that deep part of us that is what ultimately makes us human, that makes life worth living. That, or he is ignorant. In either case, he is utterly disconnected from his fellow human beings. To have such a person maintain economic control over the whole of society is the height of insanity and repugnance.

And yet, we continue to toil, working in meaningless jobs and barely surviving in order to give this tiny class of sociopaths more and more control over our lives.

We are indeed in a bind. And yet the most treacherous and difficult part of the path to freedom is overcoming our inner psychic shackles that bind us to this system. We must first come to truly understanding that the justification for the maintenance of a debt system is based on falsehood and illusion, that not only is debt unnecessary for the promulgation of material abundance, but that it is utterly antithetical to it. More importantly, we must come to understand that our lives have an inherent intrinsic value and that there is nothing inevitable or noble about spending most of our lives toiling in meaningless and destructive jobs, selling our souls, our life itself, piecemeal so that a group of disgusting, corrupt men can maintain their lifestyle of a quest for ever more power and pleasure.



When we come to truly understand this, when we come to know that our lives are our lives, that not only is serving our system a matter of choice, but that choosing to support those who try to own us is the grossly irresponsible one. When this idea becomes real to us, then we set out on the road of setting ourselves free.

Remember, in comparison to the small group of people who direct the economy for their sole benefit, at the expensive of their people, we are legion. Ultimately the only control they maintain is psychological, it is spiritual, for even the armies and police they control are their slaves. Make no mistake, they know this, and they are terrified. They pour more and more money into trying to maintain a system that no longer works. The continued investment into the police state is one of diminishing returns.

And so the choice is as simple as it is difficult. It is frightening and painful. It is not easy. The choice is resistance. The choice is a simple refusal to comply. First psychologically, and then slowly, physically. It is absurd to consider that the system continues because we choose to go toil at meaningless jobs, we choose to mail the check to Sallie Mae every month. But of course, the more we think about it the more we realize that we have no choice. And as painful as that realization is, ultimately the realization that we have no choice is what gives us the power and the courage to make the other choice.

Choose resistance.

Find a way out. Quit your job. Pursue your dreams. Be the change you want to see in the world. It’s scary and difficult and painful and it requires a lot of difficult decisions. For those of us who choose to resist first, it is especially painful and scary to be the tip of the spear. But the more people who do it, the easier it is for others to join. We must be pioneers who brave the stormy seas of the current system in search of the new world beyond her dark horizons.

There will come a day when the deprivations and injustices of the system will become too apparent to ignore. The palliatives of ignorance, easy comfort and alienation will no longer suffice, and then all of humanity will come face to face with the crisis, not just the brave few who chose to see the world as it really is. We will have to choose to get to work building a new world, or perish, losing a deep part of what makes us human along the way.

Physical death comes no matter what. The choice of resistance has intrinsic value, regardless of the outcome, whether or not it’s successful or it could ever work. Because although death darkens the doorway at the end of all of our lives, through resistance, through choosing to actually live while we’re alive, we avoid spiritual death. What was it that Jesus said about gaining the world but losing your soul?

You may notice that I don’t prescribe a solution to the problem, I don’t promise a detailed model of an alternative society. This isn’t because I don’t have any ideas. It’s not because I’m a naive dreamer, or a complainer who likes to criticize but offers no solutions.

Make no mistake, I certainly do have ideas about what such a post-capitalist world might look like. But to share it too soon would be a mistake, because the point, dear reader, is for you to begin to imagine for yourself what it might be. Imagine what your life might look like in abundance, free to travel and dream and love and live and work on your own terms, in ways that are meaningful for you. Such rebellious daydreams are the sprouting seeds of the new world. Don’t let the world stamp them out.

And so, the best solution I can offer is simply this, to take the bold steps individually and as a society to move past this broken system. Humans simply need to be free, and trying to prescribe a detailed plan to force others into is non-productive, indeed its partly why we’re in this mess in the first place. Let’s not make the same mistake this time around. When we are free to associate and live as we please, not as dictated to us by inhumane systems, not only will we survive, we will thrive. Can you imagine the kinds of technology, and poetry, and music, and art, and love, and food, and work, and sport which will come from a world where everyone is free to find and pursue what they love? I believe that in such a world we will discover the inherent abundance of nature, and we will learn that all of our worst fears exist mainly in our own minds, in our nightmares.

“Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.”

― Arundhati Roy