The Violence of Municipal Debt

Authors: Caroline Ponder*, University of British Columbia, Mikael Omstedt, University of British Columbia
Topics: Economic Geography
Keywords: municipal debt, racial capitalism, urban crisis
Session Type: Paper
Day: 4/10/2018
Start / End Time: 12:40 PM / 2:20 PM
Room: Galerie 5, Marriott, 2nd Floor
Presentation File: No File Uploaded

With the rise of financialization few social relations have been left untouched by debt dynamics. At the same time, the debt relation can hardly be said to override other axes of socio-spatial difference, as some have argued (e.g. Lazzarato, 2012). Movements like Black Lives Matter have, for example, rallied against an urban condition under racial capitalism that is rife with socially differentiated state violence. Yet spectacular moments of urban violence are often underwritten by slower, more abstract forms of financial violence (LiPuma & Lee, 2004; Nixon, 2011). Using the financial insolvency of the Detroit Water and Sewerage Department (DWSD) as a case study, we seek to investigate the conjunctural moment of municipal indebtedness as a condition of financialized racial capitalism, illustrating the interplay between stretched spatio-temporal financial relations and spectacular expressions of social violence. We do this by interrogating a series of interest-rate swaps that pushed DWSD into budgetary crisis, tracking their ramifications across Detroit and Flint, MI, where municipal debt-induced hikes in water bills have engineered humanitarian disasters. Our aim is to go beyond mapping the connections between the abstractions of finance and their concrete violent manifestations, and further contribute to understandings of how financial risk embodies and rearticulates racial hierarchies. We conclude that (i) researchers of ‘austerity urbanism’ must engage the logics of racial capitalism in order to fully explain how financial relations reach across and coproduce economic and social circuits, and (ii) that engaging the socially differentiating process of financialization is necessary to explain contemporary urban racialism

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