Who Sold the World: the Man

In September of next year, thousands of young people from across England will follow in the footsteps of their older siblings and previous generations by moving out of home and starting university courses. The yearly student exodus has for decades been a familiar calendar event, but 2012 will mark a break from tradition at the expense of young people – as tuition fees rocket to new heights.

Deputy PM Nick Clegg’s infamous U-turn on the cost of studies has helped to give higher education institutions across England the green light to ramp up fees from the 2011/12 cap of £3,375 to up to £9,000 a year for undergraduate courses. The move will result in thousands of graduates starting their adult lives with individual debts far surpassing those of previous generations. But far from being a new development, tuition fee hikes are indicative of a wider, questionable trend in our society to offset the payment of transactions as the debts we carry into the future.

Shortly before Lehman Brothers bit the dust and sparked concerns that would lead into the global financial crisis in 2008, the amount of money owed by UK consumers broke through the £1 trillion mark for the first time. UK property prices had climbed 200% in little more than the preceding ten-year window, ramping individuals’ mortgage commitments ever higher in the process. Despite a predictable wavering in the initial crisis years, statistics from the Council of Mortgage lenders show that in the third-quarter of last year, new home-buyers were paying a gigantic 94% of their income as a deposit on their house prices alone.

Earlier this year, research revealed that credit card debt in the UK had reached £61bn, with forecasters warning that this was only going to get worse. In October, total lending to individuals rose to £1.3bn, marking a further increase on the previous six months’ lending growth rate. Today, these escalating notches on the bedpost of our debaucherous courtship with debt have raised the average household dues to more than £55,000.

Dreary statistics and Mills & Boon meanderings aside, there is an underlying story at play within the kind of debt-oriented transactions engulfing our lives: the extension of the role of debt commitments on both the individual and on wider society. Unlike the tangible coins and notes we pass back and forth over counters, bars and across the internet, the money involved in these transactions – mortgages, credit cards and student loans – represents an agreement by the consumer to honour these commitments throughout the course of their lives. Considered in this light, debt can be seen to be a part of the environment of our future.

Economists of the status quo pay no attention to concerns raised with this debt-heavy model, as the privatisation-friendly, lassez-faire economic agenda in the western world has remained relatively constant since the emergence of the Euromarket in the late 1950s. But despite the fact that this model has played such a dominant role in our financial lives for so long, cementing itself in the status quo as much as any contractual arrangement, the practice of debt ‘offsetting’ remains questionable and riddled with potential pitfalls for future generations.

To date, our government has responded to the debts emerging in the wake of financial collapse with the imposition of greater capital commitments from the public sector and from taxpayers, and the creation of more debt. Staying true to the unwatched free market edifice that sailed the crest of capital in the boom years (now carried on taxpayers’ shoulders in the reality-check years) the plan emerging from Westminster is to attempt to stimulate growth in the private sector through debt-financing: cooking up capital with the ingredients of anti-capital!

The outcome of this move hinges, in one sense, on a gamble on the prospects for financial growth in the future – the likes of which, the plan’s proponents would hope, will work to pay back the gargantuan debts at the base of our society. If this gamble fails, the implication is for further debt offsetting upon the shoulders of future generations – a potential outcome that serves to underscore the injustice of the entire endeavour. This plan is indicative of a pre-occupation with the narrative of tradition; of an economic model which takes as a given the notion that government remit on finances spans far beyond the horizons of the present to land, as it were, upon on the shores of the future. With through-the-roof figures of tangible capital coursing through the veins of various sectors in the present, Westminster’s gamble can be seen as an unnecessary burden on generations to come. In light of the risks of this gamble, the government should give serious consideration to the alternative solutions to plug the deficit and build a more sustainable society in discussion, night and day, at Occupy London.

By Mark Kauri