Cancelling debt or taxing capital: why should we choose?

Click here to access article by Thomas Coutrot , Patrick Saurin , Eric Toussaint from the Committee for the Abolition of Third World Debt.

This article reviews a recent debate between Thomas Piketty and David Graeber in order to clarify the position of this organization. Essentially, the authors conclude that both debt cancellation and more aggressive taxes on capital should be demanded.

I will immediately dismiss the position argued by the social democrat, Piketty, who is merely concerned about creating a kinder form of capitalism. However, because the original debate appears to be available only in French, I am unable to determine exactly what Graeber is arguing in this statement:

...Graeber stresses the fact that cancelling all or part of public or private debts has repeatedly occurred in the history of class struggles over the past 5,000 years. Considering that debt is a central instrument in capitalist domination today, he does not see why it should be any different in the coming years.

Surely, this can't be the basis for his position. I think the authors' description of the debate is very misleading. Graeber can't seriously regard debt cancellation as achievable under the system of capitalism since he argues here that it "is a central instrument in capitalist domination today" and in the future. I think he must be arguing for cancellation of debts as a political organizing strategy to build an effective revolutionary opposition to the system of capitalism. If my interpretation is correct, then this is a debate between a social democratic position versus a revolutionary position with regard to debts.

On the other hand, maybe their position (CADTM's) does actually see the ultimate necessity of revolution. A careful reading of the final paragraph might indicate that they differ from Graeber only with regard to which issue is used to revolutionize the people. They see both as useful, whereas Graeber sees only debt cancellation as effective.

Beyond our differences – less significant with Graeber, more profound with Pikkety – which we have just made clear, we are of course prepared to go along the path of illegitimate debt cancellation AND that of a progressive tax on capital. Once we come to a point where one of the paths indicates a way out of capitalism, we will have the choice, all together, to take up the discussion again in the light of the lessons we have learned.