[...] Although their victories have never been as decisive as those of ancient generals and golden-age imperialists, the rulers of our era do exercise a special kind of dominion. Above and beyond the monopoly of violence claimed by the major states, there has emerged a new kind of command, a monopoly of actuality, exercised on one hand through the power of teletechnology to shape the world in its own image, and on the other by the power of money to decide what deserves to exist. [...]

[...] the official version of this history will not be written by "the victors" but by the creditors, for whom every human accomplishment or aspiration becomes subject to henceforth interminable wrangling and hoarding. [...] Any expression of collective possibility and promise, beleaguered in the best of times, must struggle to make itself heard in an atmosphere filled with endless chattering in praise of immense wealth.

The turning point might be sought about thirty or thirty-five years ago, that is to say, somewhere in the mid to late 1970s, when an Anglo-American blend of neoconservative politics and neoliberal economics gained ascendancy and unbridled capitalist globalization took off. Whatever historical basis there may be for this periodization [...] it has the polemical advantage of treating the current crisis as a moment of truth for a whole passage of world history, up until now dominated by the triumph of the market model, the emergence of the US as the sole superpower, and the emergence of China as the biggest new engine of wealth creation and accumulation. [...]

There is one problem with this attractive story: the moment of truth never happened. Th ere has been no transformative revelation, no collective coming-to-our-senses, no realignment with reality, no Vergangenheitsbewältigung for the boomer generation. Th e passage from unhinged cries of panic to the restoration of confidence has been rather smooth, even while trillions of dollars of paper wealth were disappearing. The crisis of knowledge—as messy, confusing, and embarrassing as it was—did not turn into a crisis of faith. Capitalism could be declared saved from the brink of disaster precisely because its partisans and guardians cried out for a rescue without ever admitting any mortal danger.

[...] In Brenner’s account, however, the tech boom should be seen as only one component of the equity bubble of the late 1990s. That glorious surge was driven not by the advent of a new technological wave but rather by the codependent irrationality of markets intoxicated by the prospect of endless short-run returns and a Federal Reserve confident that it could make everybody feel wealthier (due to rising stock and real estate prices) without ensuring that some kind of underlying wealth was actually being produced. [...]

Yet it is important to remember that debts and obligations shape economic prospects and life possibilities in even more fundamental ways. In the most elementary sense, debts enable economic activity by liberating present resources from the most immediate pressures of productivity or profitability. Brenner’s account makes clear that this enabling capacity of debts, tapped ever more desperately throughout the long downturn, has been squandered: the mass of unproductive debts on the supply side has been greatly augmented by a new mass of unproductive debts on the demand side. Insofar as all those debts will be held and enforced by a class of creditors keen to preserve the prerogatives of free-ranging capital, the only economic trend that seems certain to continue is the ongoing transfer of wealth to those who already have a lot of it. Meanwhile the basic political function of public debt—channeling resources toward socially necessary investments—has been redefined as a subsidy program to increase the power of the private sector. [...]

By emphasizing the problem of debt in the present crisis, then, we can cut across many of the other explanations currently on offer, whether those highlight the hubris of financiers, the folly of borrowers, the irrationality of the institutional structures, or the imbalances rooted in the international system. It might be best to say that all of those explanations are somehow true, and more: we are living through a generalized crisis of the regime of indebtedness, that ensemble of structured, codified, and lived social relations upon which the reproduction of the system depends. That is to say, this regime comprises not only the financial and legal infrastructure that upholds capitalist enterprises and imposes market constraints, but also the interwoven expectations and responsibilities that put the whole apparatus in motion. The current regime of indebtedness operates on a rather different scale, and along a greater number of axes, than earlier ones. Today it is not just the “national debt” and the provision of industrial or commercial credit that is under pressure, but also new flows of international credit, as well as various deeply penetrated kinds of household debt. At the limit we may say that the collective that is now indebted to itself has become unbounded—perhaps it is itself what some theorists have started to call the global multitude. So we are witnessing today a crisis in the way structures of credit seize, partition, and exploit the productivity of the multitude, which finally owes its powers to nothing other than itself.

[...] they insist that the poor do not necessarily get poorer, so that one may express a cautious hope that some of the poor might sometimes become somewhat less poor than they used to be. Indeed, the only remaining moral justification of the current system hangs by that thread: as long as it can be argued that the poor do not always and everywhere get poorer, the rich should go ahead and keep getting as abundantly rich as they can, in good times and bad.

Th is small scruple—this impulse to justify the accumulation and concentration of wealth in the name of ameliorating, if not eradicating, widespread poverty—offers a crucial hint about the current legitimations of global capitalism and, indeed, about the weakening need to legitimate it at all. The prevailing discourse may be apologetic about the specifics but remains unapologetic about the overriding vision: even if the free markets do not function perfectly, everyone is supposed to agree that capitalist models of growth remain the only hope for rich and poor alike. The pursuit of wealth can represent the very essence and purpose of human civilization only because poverty has been recast as something left over from someone else’s history. In the face of metastasizing glass-box skylines and the endlessly televised worship of luxury, poverty appears to be the flawed and fallen condition of life without capitalism. The fact of poverty will be acknowledged only in order to make those wretched people somehow more pathetic or pathological, whether glimpsed from a distance or demonized as an immediate threat. Even when poverty is recognized as a persistent human problem, it will be explained in localized terms and addressed on a case-by-case basis, as if countries were poor because of their own particular disadvantages, and individuals because of bad habits they haven’t learned to break. State-of-the-art capitalism—the multilayered tangle of markets enforced by its biggest powers—can solve the problem (the story goes) only if everyone will see it as the cure rather than the cause of poverty. That is why the most optimistic plans for helping the poor scarcely mention the existence of massively concentrated wealth, let alone
suggest that such wealth is part of the sickness, too.

Yet it should be clear that there is no way to “fix” poverty without “fixing” the processes of accumulation. Without dismantling the top-heavy structures of the world’s economic architecture, poverty reduction programs and deficit-driven fiscal policies can do little to reverse the entrenched patterns of inequality. Moreover, entrepreneurial schemes to help the poor all too often follow the priorities set by the developed countries, thereby preserving the prerogatives of capital and launching another round of lopsided accumulation. As the current crisis has demonstrated once more, and with renewed ferocity, the global system has imposed deeper forms of dependency without cultivating stronger forms of reciprocity: the virtuous circle of commerce always turns vicious when left to its own devices, and unequal booms unerringly lead to even more unequal busts.

Instead of treating inequality as inevitable and poverty as some kind of immature condition, we should start by seeing both as the result of an ongoing process—actual impoverishment—that is systemically produced and maintained by the current arrangement of things. The basic mechanisms of impoverishment—expropriation and oppression, rooted in violence—have been at work for centuries, administered by a variety of social forms and political regimes in increasingly multilateral and overdetermined ways. In the course of this long history there has been a fundamental shift in the meaning of poverty: whereas it might once have been rooted in sheer scarcity external to social organization (and therefore would have seemed natural, local, and ineradicable) it is now permanently installed in the global functioning of the system, as the price a certain portion of the population must pay for the enrichment of the rest. Whether this shift from contingent scarcity to structural deprivation and exclusion occurred during the Mesolithic era or during postmodernity does not matter very much (that depends upon one’s conception of capitalism as a world system); what we face today is a thoroughly contemporary system for the production and maintenance of widespread poverty for the sake of stupendous wealth.

—In the US, the UK, and the EU, the ratio of household debt to GDP has been rising alarmingly since the 1980s. Even so, these broad measures conceal the very differences that the wealth and inequality figures revealed: debt means rather different things for households at different ends of the scale. For wealthier households, more debt is associated with greater ability to borrow for houses, durable goods, education, and so on. For everybody else, increased debt should be seen in the context of the persistent stagnation in wages, where borrowing against a house became the easiest and perhaps the only way to support consumption. In either case, those who took on debt in the form of mortgages and home equity loans are now seeing their equity flowing back to the financial institutions. And people will find themselves even more vulnerable in the downturn. (In 2007, household debt as a percentage of disposable income topped 130 percent in the US; the EU ratio was about 90 percent.)

This lesson seems especially apt for the good citizens of the West, many of whom tend to mistake their own moments of private repose for the final realization of peace on earth. Against those who assume that the planet has been working its way toward an eventual state of tranquil prosperity—except for some final pieces of humanitarian business to be tidied up, a few cases of unresolved ethnic unrest, some shocking atrocities, and an occasional multinational police action—one should point out that the fault lines of conflict keep spreading all over the place. The front lines of warfare may not be visible all at once, but they cut everywhere, across households and workplaces, down streets and over countrysides, around patches of urban turf and rural tracts, through overlapping jurisdictions and spheres of influence; they weave back and forth through forced migrations and acts of exodus, erased and overwritten by territorial seizures, armed threats, surgical strikes, and grand strategic zones. What was advertised as an era of peace, when war was finally confined to the hinterlands or carefully administered in calibrated doses, should instead be recognized as a generalized system of violence long in the making, a fraught world where peace remains a precarious and elusive exception—and that only by virtue of careful stagecraft . In the name of keeping the global peace, the strongest combatants have claimed permanent emergency powers with monopoly privileges.

[...] She tries to outsmart the bombers. But, Kluge notes, it is too late. Her only chance to develop an effective strategy against the bombers did not occur that morning or even the night before, or in 1939, or in 1933 . . . but in 1918, at the end of the previous war, when she would have had to join with thousands of other teachers, to organize and teach “hard,” in order to build lasting social relationships that might have blocked the rise of the Nazis. But Gerda learns the lesson of November 1918 in April 1945: Once upon a time, it would have been possible to turn history around.