Some Quick Thoughts on the Notion of a Debtors’ Strike | Rortybomb via MRZine

Posted on November 9, 2011

Sarah Jaffe has a story at Alternet about kick-stopper, one of the four winners at a conference hosted by Douglas Rushkoff’s ContactCon.  Kick-stopper is a program being created to try and coordinate debtors’ strikes, especially student debt strikes.  You should check it out.

I also noticed, in this Nation story by Gordon Lafer that student debt strikes are mentioned in passing: “If the movement moves beyond the occupied squares and into foreclosure defense (as has already begun in Los Angeles and New York) and student debt strikes…”

To expand on Jaffe’s article, there’s two large, interesting problems with debt strikes, student loan strikes in particular, that I’d like your opinions on.  The first has to do with the opponent’s enforcers.  Let’s put up an image of the Pinkerton National Detective Agency escorting scabs across strike lines in Buchtel, Ohio, 1884:

You can bet if you were fighting against management and got in their way you’d be lucky to just get the butt-end of one of those rifles in your nose.

But let’s go beyond that.  Let’s say, instead of the butt-end of a rifle in your nose, if you fought management the Pinkerton Boys could walk – wait, walk isn’t the right word, teleport instantaneously – to every potential source of credit you could get and tell them to lock down.  Then they go to every single employer in the country, and flag you as someone they shouldn’t hire.  Then let’s say they could teleport to every insurance company in the company and tell them to start charging you and other strikers more money.  And, why not, they zoom over to every utility company in the country, and get them to start demanding deposits and higher rates for things like gas and electricity in the homes of those who are trying to strike.

The Pinkerton Agency couldn’t do that, but the algorithms floating behind the credit reporting agencies can.  And credit reports are one of the things that debt strikers would have to face down in order to make these strikes work.  As the think tank Demos pointed out in their recent report, Discrediting America, credit reports have had “mission creep” so that those reports factor into employment, insurance and utility decisions even though there is little empirical basis to justify this broad sharing and use of personal credit information.

I have a few quotes in Jaffe’s piece, including this one:

Konczal warned that it’s also very hard to win a battle with the government, which backs the student loans even if they are held by private banks. “The way game theorists think about bargaining is that it’s very important to understand how patient each side is. The side that’s more desperate will lose out. In theory the government has an infinite amount of patience. It has no kind of fidicuary cash logic, it also has people with guns and boots and jail cells and the ability to literally take out of your paycheck,” he told me.

There’s something important to realize about the other side in a student debt strikes, and it’s the flip of the advantages of the State for social democrats.  Social democrats like the State to provide certain goods because it has powers and abilities that the private market doesn’t.  Take single-payer health insurance. When it comes to providing health care the social democratic government has compulsion (everyone has to get health care and pay for it out of taxes), an indefinite timeframe (those who pay in early will be certain it’ll be there when they are old), no cut-throat profit motive (so costs can be contained, patentable information shared, pre-existing conditions ignored and health care universalized).

Interestingly, those same abilities are put into play in the nightmare scenario where the State is acting as the ultimate debt collector instead of the legal framework where debts are managed, as it does for student loans.  It gets to have compulsion (loans will be repaid out of whatever income the State can see), an indefinite timeframe (it can wait out any group of debtors), no profit motive (so it has little incentive to apply cost-benefit analysis to secure whatever someone could pay), and the ability to write laws (it writes itself out of bankruptcy and give itself the ability to take from old age pensions).

By the way, the game theory model I alluded to is the Rubinstein Bargaining Model, which is still one of my favorites.  And there the patience of the relative agents is important.  If the other side doesn’t have a huge timeframe – say it needs the factory to be running ASAP, or the costs of the bank foreclosing and having to sit on property in a bad market doesn’t outweight the bargain of some level of payments that can be reached – the strikers have a stronger hand.  If the other side thinks of itself as having an indefinite patience and little need to think through cost-benefit analysis on any individual action – as the government does – the strike will likely lose on the material battle.  So any type of student debt strike will have to be targeted to both the public’s sympathy and opinion rather than material ends of shutting it down.

In general, I prefer it when the government uses its powers to provide insurance and public goods (like college) that enhance autonomy.  I don’t prefer it when it takes on the character of the shadiest debt collector.


One thought on “Some Quick Thoughts on the Notion of a Debtors’ Strike | Rortybomb via MRZine

  1. How to reverse boycott debt collectors.

    When a debt collector/debt collection/debt buyer company can repeatedly call with the intent of getting money their customers can repeatedly answer or call back with the intent of not giving them any. They need people to pay with as little talk as possible. They don’t want to talk with people who know they are never going to pay. Be all talk and no pay. Answer when convenient. Call back. Give no information. Verify nothing. Ask as many questions as you can. Answer none.

    Don’t ignore/block/report them. It doesn’t work. These folks want you to ignore them for as long as you can stand to or until you give them something valuable like money or information. Ignoring them is being their good customer. Sending a cease and desist is giving information. It lets them know you are still alive and remain their good customer. Preparing to initiate unlikely individual legal battles is being their good customer.

    Be their bad customer. Make them talk to you fruitlessly for as long as they can stand to or until they stop selecting you as their customer. These companies cannot spend seconds much less minutes on the phone with every person who will never send them a dime. But they don’t know who that is. You do. That knowledge is power. Every second you can keep their staff on the phone will render their business less profitable giving them a reason to never call you again.

    Calling will not reset your SOL. Making a partial payment will.

    One person who does this likes to ask general questions they should but usually won’t answer, “May I have the name and address of your agent for service of process?” Calmly and slowly ask them to spell every word in the address. Read it back for verification. Control the pace. If they are rushing then politely ask them to slowly repeat. “Are you a corporation and if so in which state are you incorporated?” Repeat your questions when you don’t get direct answers. When they won’t answer a question ask, “Would you like to comply with the business and professions codes of your state?” That is usually the point when they hang up on me but if they say they want to comply then begin your questions again.

    Repeat while you have the spare time. These folks have many victims and few operators. If everyone calls back but pays nothing the mass auto-dialer business model becomes unprofitable. Don’t aid and comfort the enemy by ignoring them. Call! Have a nice long slow friendly chat! Make them hang up first.

    Press 2 for Spanish.

    There are certainly enough victims to take down this company so ignoring/blocking seems downright Orwellian to me. Really? We’re just going to passively submit and go with a block list or however we manage ignoring an endless stream of unwanted phone calls day after day? No! Unite or remain conquered. Answer/return every call – become well practiced at keeping these folks on the phone – or count yourself not amongst the free.

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