Crowdfunding Our Problems Away

Rolling Jubilee, a project of Strike Debt!, is one of the concrete projects to come out of Occupy Wall Street that is currently making headlines. (Though it is not the only concerete project of Occupy, and anyone who says so isn’t paying attention. Have you heard about Occupy Sandy, for example?) When I first heard about it, it sounded like a creative idea. The gist is that individuals can contribute to a fund which will then be used to buy up bad debt and cancel it.

Certainly focusing on debt is a logical continuation of Occupy’s concerns. But there are some major problems with the whole concept. I’ll let Doug Henwood explain:

According to the FDIC, there was $664.3 billion credit card debt outstanding in the second quarter of 2012. Of that, $16.5 billion was 30 days or more past due. Banks had charged off $8.5 billion. They’re required by regulators to do that once an account is 180 days past due, but that doesn’t mean the debt is extinguished. Though the bank removes the asset from its balance sheet and takes a (tax-deductible) loss, the debt still exists. The bank can try to collect it on its own, or sell the bad debt to the vultures described above.

Let’s think about that $8.5 billion. The people who owe that money are probably getting threatening communications from the banks or whoever now holds the claims. If RJ could raise $1 million—they’re more than 1/8th of the way there now—they could buy $20 million in debt, or 0.2% of what’s been charged off. To buy all the charged-off debt at five cents on the dollar, they’d need to raise $423 million. But of course if any more than notional amounts of money were put to this task, the price of the debt would rise dramatically. To buy a tenth of it at ten cents on the dollar they’d need $85 million. In other words, given those sums, the monetary angle for RJ is purely symbolic.

The basic flaw of Rolling Jubilee is that it’s attempting to crowdfund a solution to a problem well beyond the means of the crowdfunders. This is the same exact problem you run into, for example, with demands for people to change their shopping habits in order to help the environment. Yes, it’s better to drive a hybrid vehicle, buy organic, and reuse plastic bags than it is to do the opposite, but such consumer choices, at the end of the day, do very little to actually stop global warming.

This is the problem with crowdfunding culture in general. When individuals give their own money to causes they like or believe in they will will, occasional, allow certain projects to get off the ground or have some success. But usually not. And usually that success is very modest. This is not a reason not to support small, often local endeavors, but it is reason enough to understand that Kickstarter or IndieGoGo or self-publishing (yup, I got there eventually) will not be the salvation of the arts, just as Rolling Jubilee will not be the answer to America’s debt crisis or #Kony2012 will not be the solution to political problems in Uganda.

Does this mean we, as private citizens, simply give up and let massive corporate conglomerates or the State’s military-financial-industrial complex lead the way? Of course not. It just means that people need to build and support the institutions (e.g., unions, non-profits, progressive government coalitions) which can counter these larger institutions and therefore develop solutions for real change. But focusing on individual consumer spending, especially in the form of donations to very specific causes, will never be enough. It will only create the illusion of agency and change.

Sidebar related specifically to publishing: The entire self-publishing phenomenon, furthermore, is built with the explicit support of a large and powerful corporation: Amazon. This gives it even less credibility than other “crowdfunded/consumer supported” indie phenomenons, since the moment Amazon decides to change the rules, it’s all over. Even if they choose to maintain their current arrangements with self-publishers, the whole thing is a sham: they have no interest in promoting good books because they can make as much money selling a couple copies of several thousand lousy books. The few (very few) self-publishing success stories out there only help the lie go down easier. This is why you should support smaller publishers who will actually publish good material and then work to get the word out about that material. These books may never sell as much as Fifty Shades of Gray, but they will actually be worth reading, talking about, returning to, and remembering.

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