Garnethill Multicultural Centre 21 Rose Street, G3 6RE Glasgow
That austerity is somehow related to how the state finances itself is well known. It is however a bit of a riddle how something with the power to raise taxes – i.e. choose how much money to earn – can be in trouble with paying the bills. Indeed, one response to austerity – by groups like UK Uncut and beyond – is to remind the state of its tax raising powers and to demand “tax the rich” to plug the hole in public finances; so why isn't this happening?
To answer this question we have to look at what taxes actually are. The state collects taxes in the form of money which its citizens earn in motley competition against and with each other. This – we claim – expresses that the state rules over a rather peculiar society. It wants its subjects to compete against each other – following their own economic calculations – and it wants to provide them with the conditions to do so overall successfully. This presents a comfortable dilemma to the state: to provide the conditions of national economic success it has to deprive the competitors of the means and purpose of their economic activity, i.e. their money.
Yet, states found a way out of this self-made dilemma: sovereign debt. Contrary to popular belief the growing mountain of debt is not a result of incompetent politicians and frivolous spending. Instead, with sovereign debt states made themselves independent from the confines of wealth already earned in their societies to provide the conditions of future growth.
For many years this worked. States owe debts, lots of it and on an increasing scale. Now, sovereign debt is in crisis and countries compete against each other to convince investors that their respective national economies are still worthy and secure investments.
In this workshop we don't want to focus directly on the current crisis but ask what is it that is in crisis. We want to present and discuss what sovereign debt is, how it works, who the investors are and what makes sovereign debt an interesting investment to them.
Based on this we want to critique two common misconceptions. The first one is the notion of an “objective constraint” which posits that states have no choice but to fulfil the demands of finance capital against them. This notion misses that the premise of these demands is that states furnish and maintain a world where such demands can be made. Secondly, we want to show that criticising sovereign debt and bailouts as a redistribution from the bottom to the top trivialises how our lives are subjected to the calculations of profit – in and outside the financial sphere.