More public debt, please

The only reason the ruling class says we must reduce debt is because that’s how they consolidate more power to themselves, and in so doing, they undermine democracy and civilization

by Kevin Potvin <kpotvin@republic-news.org>

The Conservative Party of Canada was originally the Reform Party, founded in 1987 (on Hallowe’en Day of all things) out of a deeply felt urgency, especially in Western Canada, to reduce the federal debt. Inspired by reigning ultra-conservative parties in Margaret Thatcher’s United Kingdom and Ronald Reagan’s United States, the Reform Party pressed hard on Canadian public opinion to establish a very negative view of public debt.

Soon centrist parties—Labour in the UK, Democrats in the US, and the Liberal Party in Canada—regained power in large part only by taking up the mantra that public debt is bad and debt reduction was not only good, but now a top priority to be achieved at nearly any cost.

There has certainly been no popular electoral room in any country for anyone to argue that public debt is actually good, and there has scarcely been anyone who would have conceived of such a seemingly nonsensical argument in the first place. Instead, parties across the spectrum in every jurisdiction in every western country quibbled over how rapidly debt should be reduced, and what essential public services and enterprises should be first up for sacrifice to this new god.

But public debt, far from being the scourge of societies and the vice of their undisciplined governments, actually comprises not only the democratic legitimacy at the foundation of those governments, but is found deeply planted at the very roots of society nourishing civilization itself. And the more public debt taken on by a government, the better, more advanced, and more democratic, the host society is.

The history of public debt is the subject of the fascinating book entitled A Free Nation Deep in Debt: The financial roots of democracy by James Macdonald (Farrar, Straus and Giroux, 2003). The common historical account is that our modern form of democracy is rooted in ancient Greece. But there is no direct line of descent connecting the emergence of our modern democracy to that of Greece. Until documents in Arabic were discovered in Spain in the 12th Century, Europe did not even know there was a great civilization predating them by 1600 years. Modern democracy sprang up on its own quite independently of the ancient philosophers.

It was not those in togas who conceived of the democracy we enjoy today. It was medieval merchants interested in backing with their investments the plans of local municipal governments to improve the common good of citizens. Local princes and kings needed to raise more money to man and equip an army for defence than they themselves, squanderers all, could put up. With ruined princes and kings begging for money, merchants only felt assured handing it over if they were granted some control over how the money was used. Of course, kings could simply take the money and merchants could try to hide it. But those who peaceably coaxed investments from wealthy citizens always did better than those who violently stole it. Since most wars are won and lost based on who runs out of money first, those who stole largely died out, leaving mostly those who coaxed.

Soon funds were raised with this kind of public bond regularly to cover public items well beyond mere defence, like shipping ports and roads. And control over the spending of those funds evolved into a representative board of the multiplying number of investors who chose among themselves by election who would sit on these boards for limited terms of service. The more representative and the more fairly elected those boards became, the more citizens participated in investing their wealth in public projects, so that those jurisdictions with the broadest and most effective emerging democracies were those able to raise the most funds.

Equally important, those jurisdictions enjoying the broadest participation in this form of intimate involvement by their citizens in matters of the state were also those with a citizenry most willing to sacrifice in times of need, since everyone was deeply invested in the fortunes of the state.

Those kings and princes who did not need to raise funds from their wealthy investment classes of citizens, either because they were wealthy enough themselves or their states were not highly evolved enough to require much spending, did not need to share control over affairs of the state with their citizens. Thus, those states, like modern oil-rich countries today, remained tyrannies.

So there is one element present at the birth of all modern democracies: a ruling class with not enough resources on its own to effectively operate its state. Where the cost of operating a state grew higher than what the ruling class was able to manage on its own, debt was required, and since democracy follows debt, in the bountiful tide of debt arrived all the goods of democratically-inspired advanced civilization.

But why does advanced civilization come only to democracies? If democracies can only form where public debt has been incurred, a state that does not incur public debt does not become democratic. Such a state would likely remain simple and inexpensive to operate. Without public debt for financing, such a state could not create expensive arts and culture. A state with plenty of arts and culture and other broadly available amenities and services for all citizens—a highly evolved civilization in other words—is one unavoidably requiring a lot of public debt. Such a highly civilized state will therefore give rise to broad and deep forms of democracy. And such a state, expecting to draw on the wealth of the broadest section of its citizens, therefore needs to serve the widest number of those citizens in the deepest, most meaningful ways possible, by perhaps delivering ever more enhanced civilization to them. Only then will enough citizens participate in carrying the public debt such a state incurs.

If we wanted to fix a tyranny by plunging its society deep into public debt, to do so, that society would have to quickly deliver civilization and offer democracy to the broadest number of its citizens as possible. But this would mean the ruling class of that society must share its governing power with those citizens much more than it may like to. This may be the reason why the ruling classes in our own societies today, found usually in corporate boardrooms, oppose more public debt and strive to have governments pay their existing public debts down, or to pay them off completely. Such a policy would only enhance their own power at the expense of democracy.

But in doing so, they not only purposefully diminish democracy, but they also (perhaps unintentionally) undermine the foundations of civilization itself. To reduce debt is to risk collapse of democracy into tyranny and civilization into barbarism. But it does offer the illusion of greater power to those already possessing it. And so, they are tempted.

This is why it is important for citizens to oppose the corporate ruling class and to resist the over-simplified logic of their plan to reduce public debt. In the sense that they threaten to dissemble the goods of civilization, the ruling classes ensconced in corporate boardrooms today are the equivalent of the barbarians pounding down the doors of Rome. Some have even got inside our gates and stand up on their hind legs to campaign in this election under all party’s banners, bleating still about the necessity for debt reduction.

What we the citizens who enjoy the fruits of civilization require is political representation able to make the case for taking on much more public debt for the sake of debt itself, and to spend the proceeds of that debt on civilization, like arts and culture, in order to spread out both the burden and the benefits of that debt to a wider number of our fellow citizens, which in turn will enhance democracy by simultaneously pulling and pushing more people into direct participation in politics.

Note that Alberta, with no public debt, has the lowest voter turnout in the country. To avoid that fate nationwide, we need a pro-debt party.

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