Surviving Capitalism (Not) : Who owns the public debt? [commentary updated at 4:45 PM Seattle time]

We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Sunday, July 19, 2015

Who owns the public debt? [commentary updated at 4:45 PM Seattle time]

Click here to access article by Jonathan Nitzan from Real-World Economics Review Blog.


Correlation of debt ownership and 1% wealth

Nitzan provides a brief introduction to what looks to me like some very significant research focusing on the owners of public debt undertaken by "Sandy Hager, a postdoctoral fellow at the Harvard Weatherhead Center for International Affairs." This introduction makes reference to three works by Hager: his doctoral dissertation and articles by him published in two academic journals, New Political Economy and Socio-Economic Review. I have downloaded and printed out the 22.3 page article from the latter journal which I intend to study.

I, too, have long noticed that very little has been written about the owners of public debt. Instead the overwhelming emphasis has been about the debtors. This, I believe, is no mere happenstance. It illustrates once again the power of the ruling capitalist class to divert the public's attention away from them, because to do so might call into question some disturbing questions about the way the system has been functioning to create concentration of wealth and power in the hands of a few in the capitalist ruling class while diminishing the influence of ordinary people (non-capitalists). Hager's findings corresponds to the revelations of economist Thomas Piketty whose research concluded that capitalism causes inequality. With my hurried perusal of the report, I found the following revealing statement on page 3.

Over the past three decades widely owned pension funds have seen their share of the public debt fall drastically, while mutual funds, which are heavily concentrated in the hands of the top one percent of US households, have seen their share increase. The findings therefore point toward the emergence of a new aristocracy of finance, composed of giant money managers and wealthy households.