Capitalisms debt crisis Expropriate the billionaires

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the current global debt crisis is not a malfunction of capitalism that can be fixed by reformist measures like debt cancellation or jubilees, but an expression of the system's fundamental contradictions. The central thesis is that debt under capitalism is not a moral failing or policy error but a structural necessity that both enables the system to temporarily overcome its crisis tendencies and deepens those same contradictions. The only adequate response, therefore, is not debt forgiveness but revolutionary expropriation of the capitalist class and the abolition of the system itself.

Theoretical Grounding

The analysis draws on Marx's theory of money as developed in Capital, particularly the distinction between money's functions as measure of value, means of circulation, and means of payment. It rejects the reductionist approaches of bourgeois economics — whether monetarist or Keynesian — that isolate one function and treat it as the essence of money. Instead, it insists on money as a social relation, rooted in commodity production and exchange.

The argument is grounded in Marx's analysis of credit as a double-edged sword: essential for capitalist expansion but inherently crisis-prone. Credit artificially expands the market beyond the limits imposed by the exploitation of labour, temporarily compensating for the fact that workers cannot consume the full value of what they produce. This is the source of crises of overproduction, which credit both postpones and intensifies.

The article also draws on Lenin's theory of imperialism, particularly the fusion of finance capital with the state and the mechanisms of indirect domination over former colonies. The role of the IMF and dollar-denominated debt is analysed as a continuation of imperialist exploitation through financial means.

The theoretical tradition here is classical Marxism, explicitly opposed to reformist and neo-Keynesian approaches such as Modern Monetary Theory. The rejection of debt jubilees as insufficient is grounded in the materialist understanding that the morality of class society flows from the economic needs of the system, not from appeals to fairness.

Conjunctural Relevance

The article is written in June 2023, at a moment when central banks across the advanced economies were raising interest rates to combat inflation, following years of near-zero rates and quantitative easing. The conjuncture is defined by several specific features:

• UK public debt exceeding 100% of GDP
• The US debt ceiling standoff between Republicans and Democrats, posing the threat of sovereign default
• The existence of millions of 'zombie companies' kept alive only by cheap credit since 2008
• Rising household debt in the form of mortgages, student loans, medical debt, and payday loans
• The IMF's Kristalina Georgieva warning that 15% of low-income countries are already in debt distress, with nearly 50% approaching it
• Specific cases of near-default or default: Sri Lanka, Pakistan, Lebanon, El Salvador, Zambia
• The failure of the pandemic-era Debt Servicing Suspension Initiative, which left Zambia with a larger debt burden despite receiving $700m in relief, due to currency depreciation

The article situates these phenomena as a continuation of the same crisis that erupted in 2008, not as a new or separate event. The massive expansion of state debt during COVID is analysed as the socialisation of private debts — a transfer of the burden from the capitalist class to the working class.

Where the Argument Continues

The article is a relatively self-contained polemic, but its argument connects to several ongoing debates within the Marxist tradition:

• The relationship between credit, fictitious capital, and the tendency of the rate of profit to fall is gestured at but not developed. Readers should consult Marx's Capital Volume 3, Part 5, and the work of contemporary Marxist economists like Michael Roberts or Guglielmo Carchedi for a fuller treatment.

• The analysis of imperialism and debt is brief. Lenin's Imperialism, the Highest Stage of Capitalism is the obvious reference point, but contemporary Marxist work on dollar hegemony and the role of the IMF (e.g., by Radhika Desai or Samir Amin) would deepen the argument.

• The rejection of MMT and debt jubilees as reformist illusions is stated but not argued at length. Other IDOM articles on MMT and Keynesianism would provide the fuller theoretical critique.

• The question of how a revolutionary workers' government would actually manage the transition — including the practical mechanics of debt abolition and expropriation — is not addressed. This is a limit of the article's form as a short polemic.

Connections

• Marx, Capital Volume 1, Chapter 1: On commodity fetishism and the social character of value
• Marx, Capital Volume 3, Part 5: On credit and fictitious capital
• Lenin, Imperialism, the Highest Stage of Capitalism: On finance capital and the fusion of banks and industry
• Engels, Anti-Dühring: On the relationship between force and exploitation
• IDOM articles on MMT: For the fuller critique of neo-Keynesian approaches to money
• IDOM articles on the 2008 crisis and its aftermath: For the longer arc of the debt crisis argument
• Against the Stream episodes on inflation and interest rates: For conjunctural analysis of the current rate-hiking cycle

Key Quotes

1. "Under capitalism we are all, it appears, free to work wherever we choose: to buy and sell; beg and borrow. It appears purely accidental that as a product of these 'free' interactions, the worker is always immiserated while the capitalist is enriched. But this is the inevitable outcome of capitalism, a system based on exploitation and profit, where the worker is never paid the full value of what they produce."

2. "The most important point emphasised by Marx is that money, and exchange value, is fundamentally a social relationship. If you divorce money from the role that it plays in the circulation of commodities, in the social and economic interactions in society, then it necessarily gains a mystical power over us."

3. "Credit also allows the capitalists to artificially expand the market beyond its limits, by temporarily boosting consumption and demand through loans. This is an attempt to circumvent a contradiction inherent to capitalism: the fact that workers are never paid the full value of the goods that they produce."

4. "The ridiculous proportions of state debt we see today, therefore, reflect the socialisation of private debts, which become public debts – and are thereby transferred onto the shoulders of the whole working class."

5. "The morality of class society flows from the economic needs of the system – and, above all, from the interests of the ruling class. Those who do not pay their debts, who contravene the rules of ownership, must be disciplined. That is why countries that default on their debts find themselves economically isolated; and why individuals who refuse to pay bills or mortgages are cut off from access to energy, lose their homes, or have their credit ratings ruined. 'Fairness' has nothing to do with it."

6. "A programme of debt abolition in the current epoch would clearly be seen as a mass expropriation, and would be met with the full opposition of the bourgeois state, imperialism, and international finance capital. So why not take it all the way? Why stop at simply cancelling the debts?"