There is a man I know who is a CEO. He makes well into the six figures. For his anniversary his wife bought him a $12,000 watch, on credit. This man loves this watch. This watch for him is a sign that he has succeeded, that he is what he thinks he is. The worth of the watch is his self worth. This is to say that by spending this money (credit) he affirms his position in the world and affirms his belief that the order of the world is such that this decision will not negatively impact him. It is a statement that he believes the present will lead to a certain future in which he is able to pay for and enjoy the watch. This man has no savings. This man largely lives hand to mouth, because of purchasing decisions like the watch. How is such a decision possible?
I think most of what has been said so far is on track. Indebtedness (of the consumer debt type) is a product of the slippage between expectations and realities. In this way it is a neat expression of the structural conditions of neoliberalism and subjectivity under these. But the relationship is complicated.
As the original post pointed out, compensation has stagnated, yet there has been a constant growth of productivity. Under such conditions debt is the means to keep production going. But the subjective element is crucial here. At the point where wages and productivity diverge, two options are available, to press for the re-establishment of parity or to find other means to partake in society’s wealth. Workers, have, for the most part chose the latter. I think that Walker’s follow-up point that “Capitalism's seemingly automatic self-expansion (except for periods of crisis) is fundamentally what makes this kind of thinking plausible,” goes a long ways towards explaining this. Debt is a manageable prospect so long as one continues to anticipate a maintenance or increase in wages and worth. So the idea seems to be that workers conflate ongoing self-expansion at the level of capital with their own position within the the system, that is, the expansion of their own means of consumption. This seems to hold at the level of history -- increasing standards of living over time (in material terms), and holds in so far as individuals do see their wages go up over time, usually through promotions. In other words, the prospect of successfully participating in the process makes debt a reasonable choice. The ability to refinance and take second loans out on homes is a perfect expression of faith in the constant expansion of capital. These loans make sense in so far as the worth of one’s home (like one’s own worth on the job) is constantly on the up and up. The ugly reality that capital does not need you to be employed to continue to grow does not enter into the picture for most people. Afterall, there are always jobs. Therefore, when crisis occurs, what should be a critique of capital becomes a critique of the individual. Another way of thinking about this, is that in so far as capitalism is understood as a system of individual possibilities and individual actions, not as a social totality, individuals will continue to conflate the trajectory of their own lives with the trajectory of capital.
But none of this explains why people want to go into debt. The CEO cited above also has a million-dollar home currently “under water.” And yet, his wife buys the watch. Here, I am more speculative. My sense is that it has to do with the truncating of species capacity that takes place under capital. Or to be more Smithian, it is because we become more stunted as individuals. Both Marx and Smith observed that under capital our abilities, our self-understanding, our practices as human beings become more and more narrow. Not only in the work place, but also outside of work, in recreation. Now, I believe the majority of consumer debt (other than medical expenses) is related to recreation. By recreation I mean all those activities that are not work, in which we try to experience our lives as enjoyable. Of course, under neoliberalism, recreation, that is consumption of goods and services beyond that required for subsistence, became the major marker of self. (Now, with the fetish for all natural, all organic, all local food, even subsistence is becoming an means of neoliberal self-expression. ) Here I am even reading the home as recreation. Its role has evolved beyond that of shelter to an expression of lifestyle fantasies, and yes, fun. I am also reading self-fashioning (clothing, make-up, hair styling, tattooing) as recreation. Of course, all recreation -- bowling or home decorating, time at the make-up counter, or at the gym -- requires expenditures. These are narrow expressions of ourselves as human beings because they are all confined to a single activity -- purchasing. Physical activities, like bowling or exercise, may be more than purchasing as they involve the use of our bodies, and in the case of the former, camaraderie. But they are also purchasing. We spend in order to enjoy. And the more rarefied our enjoyments become, the more we spend. It is a treadmill effect, in which what was sufficient before is no longer. And why should it be when society is continually producing more and better?
How to make sense of this? At the level of structure, I am struck by the parallel in the escalation in our expectations for spending and capital, which needs ever increasing value to sustain itself. Indeed, the two form a self-reinforcing circuit. At the level of subjectivity, the problem seems to be one of self-understanding. If under Fordism, our sense of self became deeply tied to our work, it remains so today, but manifested in a mirror image. Our sense of self is tied to how and what we spend. In so far as work enables one to spend at the desired level, debt is avoidable. But we increasingly desire more. Not necessarily in quantity, but in quality. And to tell someone not to spend is to attack their sense of the order of the world and their place in it.
To illustrate this last point, I want to come back to the CEO. For him to reject the watch would have meant admitting that he was in a precarious financial position. That the income he has today might not be the income that he has tomorrow. That the future might hold uncertainties for which he should be planning (saving) today. He would have to recognize that some CEOs don’t have $12,000 watches, that frugality is not a mark of failure, and spending is not a mark of success. But for such realizations not to completely shatter his sense of the world and place in it, he would need to have non-material measures for failure and success. He would need to separate his life’s trajectory from that of capital. He would need to have a broader sense of human capacities and the ability to enjoy life through them. That is, he would need to be able to put into action the idea that we can do more than produce and consume value.