The Vengeance of Unpayable Debts: Art, Activism, and Agitation in Puerto Rico and the United States

The following forum represents an expansion on a conversation held on April 23, 2021, moderated by Catherine Cumming, and which also included Denise Ferreira da Silva and Max Haiven. A recording of that conversation can be found here:

Let us begin with the question of the way unpayable debt functions to perpetuate oppression, exploitation, and extraction in our moment. Can you offer an illustrative example of how you see this working and what it reveals about those broader systems that mobilize debt (in particular, unpayable debt) in punitive ways?

Hannah Appel: I’d like to present a single map that illustrates the history and present of white financial supremacy. This map depicts Standard & Poor’s Foreign Credit Risk ratings from 2019. Note how the world’s mightiest settler colonies—Canada, the United States, Australia—enjoy the highest ratings alongside Sweden, Norway, France, Germany, and Finland. Countries in South America, the Middle East, and Africa disproportionately occupy the other end of the spectrum, with thirty-three of Africa’s fifty-four countries not even rated. In other words, they’re deemed so risky as to be illegible for categorization. This is a map of the financial infrastructures of racial capitalism: a map of the discriminatory way that interest rates shape the destiny of nations and peoples; a map that points towards the extractive contract terms that these governments enter into when they seek foreign investment; a map of hierarchies of monetary sovereignty. Which countries have the “hard currencies” here? Where are the “soft currencies”? Who borrows in whose currency? Since almost everyone borrows in US dollars and has to pay back in US dollars this is also a map of the imperial power of the US.

But this is also a map of global intimacies. It’s a map about debt as a form of intergenerational kinship, debt in households and communities. It’s a map of intergenerational wealth transfer to the white world. These include the debt that France imposed on Haiti in 1825 in the wake of that nation’s revolution, or the debt that departing British colonists (aided by the World Bank) imposed on Kenya, in both cases to compensate colonizers for lost “property” in both persons and land. This is a map of intergenerational wealth theft and intergenerational land theft.

Here in the United States, where I organize with the Debt Collective, the patterns of household debt also reveal the intergenerational intimacies of racial capitalism. We organize around student debt, carceral debt, housing debt, and medical debt, and across all of them it is disproportionately Black women who owe.

The question we have to ask is, who really owes what to whom?

Frances Negrón-Muntaner : In the region that I focus on—the Caribbean—to speak about debt “in our moment” is complicated. Debt has been a form of punitive colonial governance since European colonization began in the region, and the current juncture is no exception. The most documented example is, as Hannah notes, Haiti. There, debt was imposed as a form of revenge to punish the audacity of a victorious enslaved-led revolution (1791-1804) and the founding of the first Black republic of the Americas. Under the threat of gunboats, in 1825 the Haitian government agreed to pay a 150-million-francs indemnity (at least 270% of its GDP) to France. Framed as an exchange where Haiti compensated the former slave owners and France recognized its independence, what the French ultimately did was convert a nefarious indemnity into an odious debt. This transaction made it impossible for Haiti to invest in basic national services or be entirely free of French power, much of which eventually passed into the hands of the United States. One could say that Western banks have ruled Haiti for hundreds of years.

But these dynamics are present across the Caribbean. A less known example is the Dominican Republic. In 1869, the government incurred the infamous Hartmont loan, through which the state borrowed $250,000 from a British lender and repaid 7.5 million in the subsequent twenty-five years. In the early twentieth century, the Dominican Republic again became subject to odious debt, this time by the United States. During this period, the US tested on the Dominican Republic a new strategy termed dollar diplomacy to assert its political dominance in the Americas through debt control. From 1905 to 1907, the United States placed the Dominican Republic in receivership, took over its custom houses to administer debt payments, and recruited Wall Street to provide loans to the government. Less than a decade later, the US occupied the Dominican Republic militarily (1916-1924) to collect debt payments for European lenders and clamp down on dissent or what President Theodore Roosevelt called “the nuclei of revolution.” As a result, the US became the country’s sole creditor, and the dollar substituted the peso for decades. Stunningly, the US receivership agreement in the Dominican Republic did not end until 1940. Today, the Dominican Republic’s public debt is sixty-nine percent of its GDP and projected to top 81 billion dollars by 2026.

The seemingly more recent example of Puerto Rico further illustrates that the past is not past. There, debt also has a long history as a form of capitalist extraction and colonial governance. In addition to the continental processes of enslavement and Indigenous dispossession, the Spanish government imposed “el régimen de la libreta” (1849-1873), so named because laborers had to carry a notebook detailing their personal characteristics, for whom they worked, and what work they performed. In addition to extracting labor, the regime sought to minimize labor organizing and personal mobility and impose political obedience through debt.

Under US colonial rule (1898-present), debt has been used to remove, punish, and impoverish. Initially, capital imposed debt to pressure Creole landowners to sell their land and expel peasants from their homes. In the second half of the twentieth century, however, neoliberal debt held mainly by US banks slowly became the new form of colonial capitalist extraction in Puerto Rico. During the 1970s, when most Puerto Ricans had low incomes but were a captive market for US goods, the finance industry began to extend credit to virtually everyone to generalize commodity consumption. The result was not only indebted “individuals” but also an indebted society where people began to live essentially to pay debt. Two decades later, US finance capital began to target the government of Puerto Rico with cheap loans. The result was a “debt nation” that by 2015 had accumulated a debt of such magnitude—72 billion, plus 54 billion in pension obligations—that the government deemed it “unpayable.”

For many Puerto Ricans, this debt regime is a death regime. It has resulted in increased poverty, hunger, and loss of life due to outright neglect and the deterioration of infrastructure of all kinds, including health, housing, and education. It has also eroded already limited and hard-fought self-governance institutions, and unleashed the largest mass migration in the archipelago’s recent history, which has disproportionately expelled the young while attracting an unprecedented settlement of white US millionaires. The presence of white settlers has resulted in the near impossibility to live in Puerto Rico due to the dramatic rise in the cost of living and real estate. In the near future, just living in Puerto Rico may be a luxury that mostly non-Puerto Ricans enjoy.

Either in relation to the examples you just noted, or more broadly, can you explain how weaponized unpayable debt came to be? What forces converged to institute and enforce it?

HA: Channeling the work of K-Sue Park and Joanne Barker, we can think about the mortgage as a debt instrument used to dispossess Indigenous peoples on Turtle Island. The archives show an explicit settler strategy of using mortgages to collateralize Indigenous land as a licit way, a legal mechanism, through which to dispossess. For instance, in February of 1803 Thomas Jefferson wrote a letter to William Henry Harrison, then governor of the Indiana Territory. In this letter, Jefferson strategized about how to take legal possession of Native American land. He wrote: “To promote this disposition to exchange lands, which they have to spare and we want, for necessaries, which we have to spare and they want, we shall push our trading uses, and be glad to see the good and influential individuals among them run in debt, because we observe that when these debts get beyond what the individuals can pay, they become willing to lop them off by a cession of lands…. In this way our settlements will gradually circumscribe and approach the Indians, and they will in time either incorporate with us as citizens of the United States, or remove beyond the Mississippi.”

This is the licitness of “whiteness as property” that Cheryl Harris has taught us so much about. She cites De Tocqueville, who in 1835 (just 30 years after Jefferson!) wrote, “The United States has accomplished this twofold purpose of extermination of Indians and deprivation of rights legally, philanthropically, and without violating a single great principle of morality in the eyes of the world.”. Settler dispossession of Indigenous people via the mortgage is a foundational moment of the weaponization of debt.

Neoliberalism has been a sick renaissance of racialized debt. I’m thinking here with the tragedy of Daunte Wright, or of Ferguson, Missouri, where Michael Brown was murdered and the Movement for Black Lives was born. Look at the municipal court system in Ferguson, where, after decades of state-subsidized white flight, you see a majority-Black city with a radically diminished tax base. How is the city making up that money? Essentially through debtors’ prisons: court fees and fines, probation fees, ticket fees all become essential revenue streams. And they’re fucking arresting people who can’t pay their municipal debts. The revenue pays the salaries of court employees because taxes no longer cover the salaries of lawyers, judges, clerks. After the Ferguson uprising, the US Justice Department published the Ferguson Report, upbraiding the city’s “legal” system for targeting residents who were the least able to pay. And then? Moody’s Investor Services (one of the major credit ratings agencies) read the report and promptly downgraded Ferguson’s credit rating. After years of relying on the bond market for loans to stay afloat, the municipality found itself relegated to “junk” credit status overnight. Why did Moody’s make such a move against a city that had virtually no other way to survive? Citing the justice department’s report and the exploding costs of litigation after Michael Brown’s murder, the agency used Ferguson’s racist policing practices as a pretext for cutting Ferguson out of the bond market. (For more see here and here.) Destin Jenkins has also written about this in Bonds of Inequality—how Black uprising consistently affects the cost to borrow.

FNM: In Puerto Rico, one of the few remaining formal colonies in the world, debt continues to be a weapon of dispossession and capitalist accumulation. The how, what, and who, however, have shifted over time. Upon invading, as noted earlier, the United States deployed debt to expand agricultural interests and incorporate the region into the American military-industrial complex. In the post-World War II period, manufacturing displaced agriculture, modernizing the economy. At that point, the US still valued Puerto Rico as a military bastion. But after the “Peace for Vieques” social movement expelled the Navy from Vieques in 2003, US capital appeared temporarily disorientated. For a moment, it seemed the US elite no longer knew what to do with its colony.

Finance capital solved this by extending debt as the primary form of colonial capitalist extraction. The trigger was the ten-year phase-out (1996–2006) of Section 936 of the US Internal Revenue Code. Congress passed the measure in 1976 to generate high-profit margins by extending tax breaks to American corporations that operated in Puerto Rico. But in 1996, Congress abolished the tax exemptions to fund an increase of the minimum wage stateside, inducing a wave of plant closings, the loss of over 100,000 jobs, and a deeper recession in Puerto Rico than the one experienced in the United States. Not knowing how else to keep services and patronage going, all-island administrations turned to another tax option: to sell “triple-exempt” bonds issued by Puerto Rico’s principal public utilities and municipalities. These are not subject to local, state, and federal taxes and are held mainly by US financial investment firms and so-called “vulture” hedge funds.

Although this type of investment would appear risky, it was a sound proposition due to the archipelago’s colonial legal infrastructure. Puerto Rico’s 1952 constitution states that the island cannot declare bankruptcy and requires it “to service its debt above all else,” including social services such as education and pensions. Equally important is that, in 1984, the US Congress amended the bankruptcy code so that Puerto Rican municipalities could no longer declare bankruptcy under Chapter 9, although this option had been available since 1933. Underscoring that the process is broadly political rather than narrowly economic, on June 30, 2016—one day before the island failed to make a bond payment—Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). This federal law appointed a seven-member fiscal control board composed of individuals with deep ties to the banking and investment world—among them people involved in generating the debt crisis. Moreover, it granted them broad powers over Puerto Rico’s elected government to assure that the government would pay creditors.

Expectedly, the debt crisis produced an enormous wave of foreclosures. According to a 2018 Center for Puerto Rican Studies report, one out of five homes in Puerto Rico was empty, mainly in the capital of San Juan. This finding is consistent with prior studies that found that nine families lost their homes every day because of foreclosure and that the number of homeless people increased by 35% during this period. As political ecologist Gustavo García López, observed, the “emptying” of desirable urban land led to the expansion of a predatory luxury real estate market.

Lastly, it is important to say that the neoliberal colonial project was able to move so fast and swallow so much because sectors of the Puerto Rico’s governing elite supported the transition. Since at least the 1990s, this group has adopted neoliberalism’s logic as its common sense to reproduce their class privilege and have served US capital well. At one level, this group has facilitated lucrative contracts and access to prime real estate, such as historic buildings and ocean-front property, on the cheap. At another, in exchange for a small piece of the pie, they have passed legislation that favors US capital, such as Laws 20 and 22, which exempt companies that settle in Puerto Rico from paying certain taxes, such as capital gains and dividends taxes, and only a 4% of taxes. Significantly, while social movements frequently use the slogan “Puerto Rico no se vende” to repudiate this state of affairs, the truth is that a portion of Puerto Rico “ya se vendió.”

How has unpayable debt, in the specific case you have noted or more generally, been resisted? (How) have these modes of resistance been effective?

FNM: As is fitting for fighting a death regime, in Puerto Rico, people resist austerity and neoliberal debt with a politics of life that takes various, often overlapping, political forms. A salient approach is autogestión, or self-managed action, that promotes solidarity and communal governance. This is a direct response to the state’s withdrawal of social services and indifference to people’s needs, including in life and death situations such as the aftermath of Hurricane Maria, where neither the federal nor island governments provided adequate and timely assistance. People have have and continue to organize themselves to meet present and future threats to their lives.

Within autogestión, people are also adopting various styles and histories. One is a contemporary marronage. Some groups are abandoning state and political status-centered struggles to create community-based organizations, often located outside the capital, that focus on fundamental needs such as food and housing. This modality is particularly clear in the agroecological movement, which focuses on improving food security and lessening Puerto Rico’s dependence on elow-quality food imported from the United States.

Another line is “infrastructure disobedience.” This is evident in the taking over of abandoned buildings and schools to reverse dispossession and redirect resources. Well-known examples are the Taller Comunidad-La Goyco, a community center in Santurce housed in a closed elementary school. It is also present in the Proyecto de Apoyo Mutuo in the Barrio Mariana of Humacao, which also took over a school and prioritizes providing meals, small scale agriculture, and shelter in times of need.

Organizations have also developed targeted campaigns. A key example is the Citizen’s Front to Audit the Debt, whose goal is to create a citizen’s commission to audit the debt. The Colectiva Feminista was one of the various groups to organize mass mobilizations such as the successful “Ricky Renuncia” campaign that forced Governor Ricardo Rosselló (2017-2019) to resign. While the core reason for the protests was the government’s corruption, callousness, and mishandling of the Hurricane Maria recovery supplies, these were also anti-debt protests. As the slogan went, “Ricky Renuncia, y llévate a la Junta” (Ricky Resign, and take the fiscal control board with you).

In the aftermath of the successful Ricky Renuncia campaign, several left groups also collaborated with neighborhood leaders and community organizations to coordinate island-wide people’s assemblies. These community gatherings sought to produce knowledge and design alternatives to the austerity crisis from the ground up. Even though they did not last long, the assemblies planted the seed for a broader future assembly to reconstitute Puerto Rico’s body politic beyond colonial capitalism.

Equally important, these forms of resistance may not have been possible without the robust presence of “artivism” and independent journalism. Groups such as the Center for Independent Journalism (CPI) and the arts organizations BetaLocal and AgiTarte have generated critical information on the politics of the debt crisis and who is responsible, as well as a verbal, visual, and performative vocabulary to name and grasp the current juncture. It was, for instance, the CPI that leaked the chats revealing the level of callousness and corruption in Ricardo Rosselló’s government.

Although these political acts have not been entirely successful in deterring the Junta, preventing the government’s corruption, or furthering debt abolition, they have achieved something fundamental. They have generated frameworks to produce a “desendeudada” subjectivity that refuses debt and rejects the idea that the people owe anything to the colonial state and its capitalist class. This knowledge will continue to feed a vision for a decolonial, post-debt Puerto Rico.

HA: At the Debt Collective, we organize debtors’ unions. Alone, our debts are isolating, shameful, even terrifying. We’re afraid to pick up that phone because we know it’s a debt collector; we’re afraid to open the mail because we know it’s a bill that we can’t pay.

But together, our debts make us powerful. Organizing together into debtors’ unions is an emancipatory activation of household debt under finance capitalism. How? Because capitalism shapeshifts. Workers often no longer share factory floors, but we do share (unequally, and with different consequences) so much household debt that, counterintuitively, we have a tremendous amount of potential leverage over finance capitalism. Midcentury oil magnate J. Paul Getty once said, “If you owe the bank one hundred dollars, that’s your problem. But if you owe the bank one hundred million dollars, you own the bank.” This is how wealthy people and corporations understand debt. Massive debt is leverage; it represents political power and can be wielded as a tool. But in whose hands and to what ends?

Carceral debt, student debt, medical debt, utility debt, housing debt, credit card debt can be leveraged collectively in the threat of a debt strike. This generates the collective power to remake contemporary financial relationships. Our first debtors’ union has won over $8 billion in debt abolition for people holding debt from for-profit colleges in the United States, which even included refund checks from the federal government. That union was also successful in getting a federal law proposed that would provide College for All. So has this mode of resistance been effective? Yes.

At the Debt Collective we aim to put the power of debt in the hands of debtors. The collective power of debt leverage, the power of a debtors’ union, is not only the power to abolish debt. It is the power to make demands on the system. So as folks refused to pay their debts to for-profit colleges they also, at the same time, demanded public college be made free again, but not just for white men. I teach in the University of California system, and I always say that I work in a formerly-public university system. The debtors’ union model is seeking to change that.

Finally, going back to the map I shared earlier, it is important to recognize that financial institutions work across national lines. Imagine transnational debtors’ unions organized by creditor—a union that organizes, for instance, against J. P. Morgan Chase in all or many of the places that bank operates around the world. Some people could withhold mortgage payments, nations could withhold sovereign debt payments. These institutions are diversified and we, too, can proliferate our sites of struggle as debtors. That’s the horizon of possibility for debt activism.

What is the promise (and what are the perils) of movements for liberation insisting on the recognition or restitution of unpayable debts owed to them? Is this playing out in the example you offered? Can the books be balanced?

HA: As capitalism shapeshifts, fewer and fewer of us share physical workplaces, and where we do those workplaces are extremely surveilled. The result is, it’s harder to organize economically as workers in traditional ways. But more and more working people share creditors, especially as financial giants consolidate – from health insurance companies to corporate-owned housing to the federal government owning student debt to the bank themselves. These are increasingly concentrated targets and debtors’ unions represent a tremendous power waiting in reserve. And to me, when I think of promise, I think of building power. I do not want to fuck around. I want to build anti-capitalist, anti-racist counter-power today. Debt gives us a terrain on which to do that. Debt abolition is a demand we make along the way and helps us generate that power, but as this discussion makes so clear, many debts are unpayable. So only part of this is about getting money back in the pockets of poor and working-class people, who are disproportionately Black, Brown, and Indigenous. Another part of it is the idea that a struggle to build leverage with collective debt helps us to build power to do what we actually want to do: reimagine, reinvest, and recreate together.

But there is peril in this promise. At the Debt Collective we often talk about what occurred in the aftermath of the 2008-2009 financial crisis. Imagine, as a counterfactual, that there had been a mortgage holders’ union at that time. Imagine that subprime mortgage holders—disproportionately Black, Latinx, and Indigenous families—started reaching out to their debtors’ union representative: “my adjustable-rate mortgage just ballooned. I can’t pay.” Or, “my home is underwater.” Union reps across the country would start hearing about this even before the financial markets started realizing that the mortgage-backed securities markets were looking shaky. Then we, the union, could threaten to withhold all mortgage payments until banks cancelled or wrote down every single one of those extortionate mortgages and got rid of all the racist lending terms that enabled them.

This counterfactual reveals the huge promise of these movements. But there is peril here too. Notice that I was talking about a mortgage holders’ union, one of the primary financial mechanisms through which we manage privatized housing and shelter. Private property is a cornerstone of capitalism and here, a debtors’ movement would remain in thrall to that logic, trying to make it “more just” or “more equal.” This cannot be the horizon. The peril, to me, is the difficulty organizing a debtors’ union when capitalism has its tentacles so deeply in our minds and communities, whether that comes in the form of our fears for our credit scores or the fact that the only way for some of us to build any kind of intergenerational wealth is the hope of home ownership and ever-rising property prices. The challenge is, on the one hand, trying to build power and make meaningful, material change in all of our lives through challenging actually-existing debt relations while, on the other, cultivating an unrelentingly radical post-capitalist, post-growth, post-property horizon. Holding those at the same time is the nexus of potential and peril.

FNM: In most ways, one cannot balance the books. Debt and austerity rob the future of young people and cost lives. There is no way to restore these lives. Given the current power imbalance, focusing on the notion of balancing the books may be perilous in various ways.

In other words, revenge and other forms of widespread outrage have had an important role in challenging debt regimes in the Caribbean and will not disappear. Yet the extent to which power meets these forms of action with more lethal and devastating violence suggests their limits and high cost. The potential force of this violence is one of the reasons why in Puerto Rico, marronage, infrastructure disobedience, and other forms of the radical imagination have taken a deeper hold at this moment. People know that as important as fighting the banks or the state is, nurturing what makes life meaningful is even more so. In her beautiful book Deuda Natal (2020), poet Mara Pastor has put it eloquently: “Isla pequeña tendré/Dinero no tendré” (Small island I’ll have/Money I won’t have).

At the same time, while balancing the books is painfully impossible, social movements and everyday forms of resistance to the violence of neoliberal debt can and do contribute to richer lives. Pressing for debt abolition, reparations, and guaranteed access to health care, education, and pensions will not bring back who we have lost. Advancing these measures enacts a degree of justice that also creates different conditions for the present and future generations. Ultimately, in facing a regime of debt death, refusing to die and living joyfully may be the greatest revenge of all.


Hannah Appel

Hannah Appel is an associate professor of anthropology and global studies at UCLA where she teaches, researches, and writes about the daily life of capitalism and its immanent alternatives. Hannah is also the associate director of the Institute on Inequality & Democracy at UCLA, where she directs the Future of Finance research stream. She is the author, most recently, of The Licit Life of Capitalism: US Oil in Equatorial Guinea (2019), and a co-author of Can’t Pay Won’t Pay: The Case for Economic Disobedience and Debt Abolition (2020). Hannah co-wrote the latter with her co-conspirators at the Debt Collective, a militant, debtor-powered activist group that builds debtors’ unions.

Frances Negrón-Muntaner

Frances Negrón-Muntaner is an award-winning filmmaker, writer, curator, scholar, and professor of English and comparative literature at Columbia University. Among her publications are Boricua Pop: Puerto Ricans and the Latinization of American Culture (CHOICE Award, 2004) and The Latino Media Gap: A Report on the State of Latinos in U.S Media (2014). She is also the editor of several books, including Puerto Rican Jam: Rethinking Nationalism and Colonialism; None of the Above: Puerto Ricans in the Global Era, and Sovereign Acts. From 2016-2019, she served as the director of Unpayable Debt, a working group at Columbia University that studied debt regimes in the world. During her tenure, she co-created “Caribbean Syllabus: Life and Debt in the Caribbean,” and in 2019, she launched Valor y Cambio, an art, digital storytelling, and just economy project in Puerto Rico that is currently on tour (