Reading: “The New Debt Colonies” by Jerome Roos

This reading is part of the Imperialism Study Series put together by DSA Los Angeles and used in our own Socialist Night School study sessions on imperialism. The reading comes from module 2, “America’s Ascent Into Power.”

Our Socialist Night School session is reading an excerpt from “The New Debt Colonies” by Jerome Roos. The excerpt, available as a PDF download, is about 4,700 words with an estimated read time of 17 minutes. Or you can read the full article (8,800 words, 32 minute estimated read time) on Viewpoint Magazine‘s website.

Beginning:

Today we are witnessing the resurgence of an old phenomenon: the debt colony. A decade after the collapse the U.S. housing bubble and the onset of the worst capitalist crisis in living memory, governments around the world continue to bear the burden of historically unprecedented public debt loads. In some cases, most spectacularly in the peripheral countries of the Eurozone but also in a number of emerging markets, these mounting financial obligations have led to crippling sovereign debt crises – which have in turn impelled the dominant creditor powers to intervene aggressively on foreign bondholders’ behalf, imposing highly intrusive regimes of international financial supervision on distressed borrowers in order to ensure continued debt servicing. The fiscal autonomy of Greece and Puerto Rico, in particular, has now been abolished in all but name, although similar processes have long been afoot elsewhere as well.

This contemporary experience in turn carries strong historical echoes. A century and a half ago, Karl Marx already observed how the emergence of the national debt in early-modern Europe constituted one of the “most powerful levers of primitive accumulation,” leading to the “alienation of the state” by private financiers and “giving rise to stock exchange gambling and the modern bankocracy.” These dynamics intensified during the Age of Imperialism in the late 19th and early 20th centuries, when the export of European and U.S. capital to the newly independent countries of Latin America and the Mediterranean added an international dimension to this long-standing process of dispossession through debt. During this period, the dominant creditor powers regularly subjected distressed sovereign borrowers to external financial control – often under force of arms. The British invasion of Egypt in 1882, the German push to establish an International Financial Commission in Greece in 1898, and the appearance of European gunboats on the Venezuelan coast in 1902 are but some of the most prominent cases in point.

Today, such long-standing processes of financial subjugation continue in a new form – through what has euphemistically come to be known as “international crisis management.”

Keep reading (PDF)

Want to Know More?

The full article can be found at Viewpoint Magazine.

Roos also has a book available from Princeton University Press: Why Not Default? The Political Economy of Sovereign Debt