NOVANEWS
By Ziad El-Hady
Ziad El-Hady argues that although superficially Western societies are free, in reality people in the West are enslaved to debt through a relationship with financial institutions that “mirrors many of the attributes of an oppressive master-slave relationship: ownership, obedience, burden and severe punishment”.
There is a call for “freedom” in the Middle East, both from citizens within its troubled borders and from people in the West. Although this call is well intentioned, it is remarkably simplistic.
There is no doubt that political freedom in the Middle East is miserably limited. But are people in the West really as free as they think they are?
The philosophy of freedom
In a civilized society freedom is constrained by the imperative to do no harm to others. For example, we do not value the freedom to discriminate, abuse or pollute.
Freedom is generally understood and defined as the ability to choose according to one’s own free will, without coercion. The modern emphasis of freedom is almost always on choice.
In the West, this is typically celebrated in people’s freedom to say, do, elect and pursue what they want. The surface appeal of this type of liberalism is strong, especially to the citizens of dictatorships in the Middle East.
But there are a couple of crucial factors, manifested in the Western socio-economic and cultural systems, which are almost entirely neglected in this understanding of freedom.
First, freedom is not only about choice; it is also about the options from which people can make their choice. Who decides and gives us these options? There doesn’t seem to be anything especially democratic, for example, about being given two options to choose from, especially when you had little or no say in what those two options are in the first place.
Second, to what extent do the values of our society influence the options available to us? We might find that these, as well as external influences, are often more fundamental to freedom than the static notion of choice alone.
I will try to outline some basic realities that are immediately relevant to us as individuals, specifically in our daily lives.
Banking system and debt slavery
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Let us start with the role of the banking system in creating the national debt. The root problem here is what is called “fractional reserve banking”. What this means is that all the money which the banks actually keep in their accounts is only a fraction of the much larger amount that they lend out. This allows for more loans to be issued, putting more and more people in debt. But where does the extra money that has been lent come from if it did not come from the banks’ reserves? Well, the banks create it from nothing through a leverage principle called the money multiplier. This means that the loans we take out from the banks are typically based on nothing with an inherent value.
When you take out a loan from a bank, the bank transfers a digital number to your account. There is no actual value to what is transferred; it is just an electronic number. In return, you are compelled to repay this “loan” with tangible work, often doing a mundane or unpleasant job for what feels like most of your waking life. And if you cannot repay, in the case of a mortgage your home, car or any other items put down as collateral, which do have value, will be repossessed; or in the case of a standard loan you will be prosecuted or have your possessions forcibly taken away from you by bailiffs. The addition of interest to your repayment not only tightens the noose, but prolongs the repayment indefinitely – typically, for a lifetime and beyond.
According to the charity Credit Action, the total UK personal debt at the end of December 2011 stood at GBP 1.451 trillion, with the average debt of every UK adult being more than the average national wage. The alarming truth is that there is not enough money in existence, in the form of attainable income, to pay for our average spending, bank loans and their accrued interest at any point in time. Consequently, every day at least 300 people a day are declared bankrupt and around 100 properties are repossessed by the banks (this is a far greater concern in the US).
In addition, research published in both the Economic Journal and the Journal of Health Economicsrepeatedly confirms a link between debt and stress, depression and mental health problems, while according to an article published in USA Today, psychologists have established a link between debt problems and marital breakdown, domestic violence and even suicide – a high price to pay for the unjust principles of our economic system.
Of course, no one is strictly speaking forced into these economic situations, but getting a mortgage and a /or a car loan are practical necessities in the modern age. Ordinary folk are lured into taking on these burdensome responsibilities through seductive advertising that glosses over the potential difficulties. Sophisticated hard-sell tactics are employed by financial salesmen to “sell products” (i.e. loans) and are paid commission for doing so. Thus, ordinary citizens, few of whom are taught the basics of finance in our state schools, are subtly pushed into a situation that leads them straight into debt.
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