Debt Peonage, Neo-colonial Style: The Video

The Renegade Economist website has a clever and instructive video animation on how banks, corporations and governments use debt to prey upon needy countries and stay on top. As “Billion Dollar Bill,” the superhero banker, candidly explains, “The cheapest, most lethal weapon in the world [is].....spreadsheets!” 

The ingenious tool for consummating enclosures around the world is debt – loans made to impoverished countries with coveted natural resources that can be acquired via corrupt or gullible leaders. It works this way: Bankers and the U.S. Government persuade the countries to put the natural resources in hock in order to finance loans for infrastructure development (with lots skimmed off to the middlemen bankers and politicians, and kudos for "helping" poor countries "develop.").

The loans intensify pressures to monetize nature in order to come up with funds to pay the loans.  Government aid programs then collude with multinational corporations to enclose shared forests, pastures, water and other resources used by commoners.  Land values rise, along with rents, displacing poorer people from their apartments and homes, swelling the ranks of the homeless and "informal sector."  As the Renegade Economist folks put it, "It is not conspiracy -- it's structural economic behavior locked into Western Foreign Policy and therefore the global economy.  It's branded aid but really it's neo-colonialism." 

The real kicker is the time-lapse deterioration of societies.  The enclosures produce poverty, reductions in public services, social destabilization and possibly terrorism – which conveniently justifies the need for U.S. military interventions and lucrative U.S. Government deals with defense contractors. A sweet deal all around.

For all the learned and complex commentary on debt, development and international banks, this two-minute video cuts through the obfuscations with a clean, darkly sardonic swipe.

There is a wonderfully insightful companion piece to this video that a friend alerted me to -- an oped in The Guardian (UK) by anthropologist David Graeber, author of the excellent new book, Debt.  Graeber offers an insightful commentary about Occupy Wall Street, the ongoing protests that are virtually blacked out in the news media, a protest that is now spreading to other U.S. cities.  Graeber:

Everything we'd been told for the last decade turned out to be a lie.  Markets did not run themselves; creators of financial instruments were not infallible geniuses; and debts did not really need to be repaid -- in fact, money itself was revealed to be a political instrument, trillions of dollars of which could be wished in or out of existence overnight if governments or central banks required it.  Even the Economist was running headlines like "Capitalism:  Was It a Good Idea?"

You see, debt peonage is no longer restricted to Asia, Latin America and the Middle East, each of whom has gotten wise to this game and, with varying degrees of effectiveness, expelled the predatory international lenders and government "aid."  Now debt peonage has "gone domestic," dismantling our natural resources and public services.  It's only a question of when the citizenry gets wise to the scam.  Occupy Wall Street may be the opening salvo.