Cruel Pessimism

A new book on debt reminds us that we have not left the time of crisis yet

House II: The Second Story, 1987

FOR a casual reader of the daily news, the economic crisis might seem to be a thing of the past. Next year will mark a decade since the 2007–2008 financial crisis that leveled almost the entirety of the U.S. banking system and brought global capitalism to a brink not seen since the Great Depression. Now, newspapers faithfully report each month that the economy has added jobs, that the housing market is booming again, and that the stock market continues to rise. They don’t mention that the economy has yet to replace all the jobs lost in the 2007–2008 downturn, that housing prices are at their highest peak since just before the crisis, and that any increase in the stock market is underpinned by the same sort of financial wizardry that brought the world economy to a standstill. We have not yet left the crisis, though it may seem otherwise. Annie McClanahan’s Dead Pledges: Debt, Crisis, and Twenty-First-Century Culture (Stanford, 2016) is then both timely and untimely, reminding us that the tools of debt, credit predation, and speculation that have plagued the lives of proletarians before 2007 have not gone away.

A certain Marxist understanding of the 2007–2008 crisis and its aftermath took the Italian scholar Giovanni Arrighi’s argument, first laid out in his book The Long Twentieth Century, as a centerpiece: the history of the capitalist North Atlantic world since the rise of the Italian city-states in the 14th century has alternated between periods of productive growth and expansion, and ones of financialization and decline–each period “governed” by an hegemonic center. In Arrighi’s account, the years between 1945 and 1973 were the years of U.S. hegemony and productive expansion as U.S. companies grew, invested in manufacturing, and spread across the globe. The years since, however, have been the period of decline of U.S. hegemony and have seen the switch of capital into finance, credit, and debt in a failing attempt to keep U.S. hegemony afloat. For thinkers who follow Arrighi, the crisis of 2007–2008 was yet another sign that the period of U.S. productive expansion had long since ended.

While Dead Pledges is not a work of political economy, these arguments form the background for its perceptive and urgent analysis of how credit and debt have changed the U.S. in the 21st century. McClanahan draws on Arrighi to argue that because no new cycle of productive accumulation has started, we remain in the period of failed financial accumulation and decline. However, McClanahan’s work pushes this argument further: the current crisis is different in that no new hegemon (say, for instance, China or Russia) will emerge and, as capitalism confronts brute material limits to its expansion and technological and computing revolutions throw more and more people out of work, no new regime of accumulation will begin. For McClanahan, the present instead “heralds something akin to a ‘terminal crisis’ in which no renewal of capital profitability is possible.”

Dead Pledges can be located among other recent attempts like Alberto Toscano and Jeff Kinkle’s 2015 Cartographies of the Absolute to read the present crisis of capitalism by means of culture. The entry point Dead Pledges takes is financialization, or the spread of financial forms of accumulation (such as credit cards, subprime mortgages, etc.) that emerged as a global crisis of production began in the 1970s and 80s. Financialization, or more specifically in McClanahan’s account, debt, becomes a supplement to workers’ declining wages and their structural un- or underemployment, and capitalists’ declining profits in the manufacturing sector.

For McClanahan, the post-crash present is the terminal crisis of this period of financialization, and it can best be read through the figure of debt. Through close readings of post-crisis cultural objects, such as novels, newspapers, films, and photography, Dead Pledges traces the deep transformations wrought by terminal crisis and unending debt on contemporary life. It shows the debt economy’s profound effect on two sites: subjectivity and property.

One of Marx’s original interventions against the bourgeois individualism of the 19th century was to argue that what might appear as free choice–for example, the “freedom” to sell one’s labor power on the open market–was, in fact, a situation produced through violence and structural coercion (in this case, the dispossession of peasants from their small land holdings). Contemporary explanations of the crisis and rise of personal debt have focused their attention (and blame) on individuals, not the conditions that produce them. McClanahan’s clarifying move is to bring back in the structural, impersonal level of capital that produces a situation in which we are “free” to choose from a menu of devastating options, like opting for an adjustable-rate mortgage to ensure we have a roof over our heads, taking out a student loan to go back to school after having been laid off, or signing up for a credit card to help pay for a doctor’s bill after our health insurance dropped us.

In her first chapter, McClanahan examines mainstream journalistic and novelistic explanations for the 2007–2008 crisis. Instead of seeing the crisis as the result of structural macroeconomic factors–such as the end of the postwar productive cycle and the switch of capital into forms of financial accumulation–these accounts blame individual consumers for their irresponsible behavior. McClanahan shows us how these explanations draw on a school of microeconomic thought known as behavioral economics, which first emerged alongside financialization in the 1980s, “as extreme market volatility began to cause economists to doubt the rationality of homo economicus.” In this theory, large macroeconomic fluctuations are the register of individuals’ microeconomic decisions. McClanahan demonstrates how this theoretical framework has underpinned a wide swath of popular journalism and novels written on the financial crisis, which blame the crisis on individual greed (of Wall Street investment bankers) or irrational exuberance (of Americans in love with credit and living beyond their means).

Following Marx’s intervention, McClanahan pulls out from her close readings of these texts a central contradiction of our time: as subjects in a time of debt, we are called upon to follow and act upon our desires and needs for shelter, sustenance, and security, but then are then turned into pariahs of unregulated desires once the moment of crisis hits. McClanahan demonstrates how, in these ideological explanations of crises, the structural level of capitalist macroeconomics always drops out. What Dead Pledges restores to our understanding of the 2007–2008 crisis is how capital accumulation depends on individuals taking out credit and debt; but explanations for the crisis have consistently misplaced the blame onto those of us who have been forced, by a declining productive sector, to turn to debt to reproduce ourselves and to survive.

While the first half of Dead Pledges draws upon a Marxist insistence on seeing the whole–and how this capitalist totality produces individuals’ conditions of possibility–the second half turns to another classic locus of Marxist thought: commodity. Marx’s Capital famously reveals how commodities come to be imbued with fantasies and desire. Drawing on this tradition of Marxist thought in which commodities are always more complicated than they first appear, in its final two chapters, Dead Pledges turns its attention to the subprime mortgages and the real estate bubble that were at the center of the 2007–2008 financial crisis, and traces the derivative social forms that emerge as housing shifts from being a valuable but staid commodity into a high-yield, speculative investment vehicle.

The mortgaged house, in particular, develops a “strange ontology,” which McClanahan explores through the category of the uncanny. The uncanny or Unheimlich was a term first developed by Freud. It is defined in opposition to Heimlich–to be secure or of the home–and is typically understood to refer to things that are “frightening, unknown, or dangerous.” McClanahan argues that the mortgaged house, or a house which one does not own but lives in and is indebted for, exists in a liminal zone. In the mortgaged house, the domestic space is not a place of “comfort and security” but one of “unease and alienation”–most acutely in a moment of debt crisis when at any moment the loss of a job can eject a mortgage holder from their home. McClanahan argues that we can find one example of this uncanniness of the mortgaged home in the very etymology of mortgage, which in the original French means dead pledge: “As collateral for a loan, property could be either ‘dead’ to the lender, if the loan was paid, or ‘dead’ to the borrower, if he defaulted.” McClanahan’s argument is developed in part through readings of photographs of foreclosed homes and their landscapes, where in the moment of debt crisis the antisociality of (or our alienation from) property as a commodity comes to the fore.

Dead Pledges brilliantly brings this antisociality home in its final chapter, which examines how housing and foreclosure have become a site of terror in contemporary horror films. Here, the credit economy of unpayable debt “produces not the balance and closure of justice but the ceaseless excess of retribution.” Credit is seen not as a beneficial good or a means to realizing life goals, but rather as a “dangerous toxicity.” The centerpiece of this discussion is Sam Raimi’s Drag Me to Hell, a 2009 film in which an ambitious young loan officer, Christine, is cursed by an elderly woman, Mrs. Ganush, after denying her an extension on a mortgage payment deadline. The curse leads to a series of increasingly campy and gross-out scenes, which culminate in a moment where Christine knocks over Mrs. Ganush’s coffin and her corpse tumbles on top of Christine, pinning her as a flood of unidentified liquid sprays from the corpse’s mouth into Christine’s.

McClanahan argues that the difference between cultural works of the present and those of prior moments of credit and debt turns on an equation of liquidity with toxicity: “[W]hereas Dracula is frightening because he siphons off the circulatory medium, Christine is thus frightening because she spreads it around. Far from imagining liquidity as economic vitality, Raimi’s film depicts liquidity as economic virality.” There is an epochal shift in the nature of credit here: where once credit was what helped some achieve long-term goals (like home ownership), credit and debt are now the source of our continuing immiseration–a virus that we should at all costs avoid catching. Contemporary horror films are one of the few places in public culture that are able to register debt as a destructive force because “risk and fear [have become] a source of profit.”

McClanahan’s most important contribution is how she brings out the dark side of the debt economy and crisis; that is, her attention to the hollow subjects and hostile objects that now populate our worlds. Dead Pledges illuminates the forms of structural coercion and social violence that accumulate around us, like wreckage no longer blown forward by any wind of progress. In these increasingly dark times, where or what might be a potential antidote?

McClanahan’s conclusion points to one possibility, which involves simply recognizing that the present is one of terminal crisis, and that what “unites us today is not the ‘good-life fantasy’ of upward mobility… but the universal knowledge of that fantasy’s historical end.” Against social violence and uncanny dominant affects, McClanahan counterposes “a canny, clear-eyes reckoning with the poverty of credit’s promises about the future” and a refusal to pay. This is a new kind of promise, “one made by a living indebted who cannot and will not pay their debts.”