Calculating the Debt Gap

Using the debate over Scottish independence as a case study, this article analyses how calculating creditworthiness—or “sovereign risk”—has increasingly become the investment yardstick used by the political class to chart the limits to national self-determination. In considering other species of predatory lending—municipal debt and household debt-the article also charts the migration of the so-called “debt trap” from Southern countries to the North over the last decade. It assesses the progress of advanced societies towards a state of creditocracy, in which the goal of the creditor class is to wrap debt around every social good, generating long-term income streams and repayment obligations that are unsustainable in a functional democracy. The conclusion argues that debt refusal is a legitimate method of salvaging popular democracy.