A Typology of Debt
Schematic for a Minimal Programme
By L. Luria
Consumer credit closes the gap between stagnant real wages and the consumption level required to realise social wealth. Were the wage to function as it did under classical conditions, this gap would close itself; the wage would be sufficient to purchase what production needs to sell, or the failure to do so would manifest as crisis and correction in the productive apparatus. In our period the gap has been closed administratively, by extending consumer credit to fund the difference, with the result that the consumption flow has become severed from the immediate productivity of the labour from which the wage is drawn.
If wages had continued to grow at their pre-2008 trajectory, real average weekly earnings would be £11,000 per year higher than they are at present, a 37% gap unparalleled in the modern industrial period. The OBR projects only 0.5% real wage growth per year in the medium term, with housing costs rising faster than general inflation since 2022-23. Against this stagnation, the Bank of England’s Money and Credit release reports net consumer credit borrowing of £1.6 billion in July 2025, of which £0.8 billion was on credit cards; The Bank's own Credit Conditions Survey notes that unsecured lending spreads widened across 2025, indicating that the price of consumer credit is rising even as the Bank Rate is cut; the spread, rather than the rate, has therefore assumed the role of determining variable for the marginal household borrower.
One objection to the way this stratum has been described is that it appears to treat the consumer credit crisis as independent of any deterioration in the productive apparatus, presuming that credit dynamics are in themselves autonomous from production. If the productive apparatus is understood in its classical form, as the set of firms and labour processes producing the use-values consumed in social reproduction, this conclusion would hold, however that is precisely the form which administered credit has reconstituted. The productive apparatus today is not merely the producer of consumed goods; it is the producer of credit-receiving firms whose creditworthiness depends on continuous consumption flows. The consumer credit circuit is not external to production; under administered credit it is internal to it. A 'crisis of consumer credit saturation' is therefore not autonomous but is the form through which the underlying productive contradiction (between increased technical capacity and the credit superstructure which prevents the reduction of socially necessary labour time) realises itself at the household level.
Regarding property, housing as property is held by the worker in two principal forms; as tenant in the rental sector, where rent is extracted by landed property as ground rent, and as owner-occupier in the mortgaged sector, where the worker holds title against a debt and the asset’s value is the capitalisation of an administratively imputed future income stream.
The rental case broadly retains its classical character; the landlord extracts surplus from the wages of the worker-tenant through rent, with the surplus then partly absorbed by the mortgage-holding bank where the dwelling is leveraged. The owner-occupier case is qualitatively distinct, however, from the classical Marxist schema: Here the worker holds an asset whose value is not the product of any tangible or identifiable share of surplus value produced by the dwelling itself (a house, on its own, produces nothing). The value is rather the capitalisation of imputed rent, the present value of a stream of housing services that the dwelling would yield were it rented out, discounted at the prevailing rate of interest, that rate of interest being administered at its apex at the central bank level, therefore rendering asset value ‘political’ in the proper sense rather than confirming to an autonomous or self-referential market mechanism.
The Bank of England’s own analysis has estimated that real house prices in 2014 would have been 25 per cent lower without quantitative easing; corporate and gilt purchases of £895 billion at peak underwrote this asset price effect through to the end of QE’s expansionary phase. Net property wealth now constitutes 40 per cent of household wealth in Great Britain (ONS Wealth and Assets Survey, April 2020 to March 2022, with the caveat that this dataset has had its accreditation suspended), private pension wealth 35 per cent, net financial wealth 14 per cent, physical wealth 10 per cent. The mortgaged worker is therefore, by a very large margin, more enmeshed in their housing asset than in any other property they own. The central bank, by setting the discount rate at which this asset’s imputed rent is capitalised, holds direct administrative power over what is, statistically, the worker’s principal form of wealth (more precisely, their share of an objectively generalised social wealth, given the determinacy of the central bank as organ of the state in the determination of asset value).
A given worker’s stake in the existing social order extends past the immediate wage relation, the sale of labourpower for a wage, through the (administered) asset relation. The mortgaged worker has been integrated into the credit system as a holder of capitalised value, this integration forming the foundation of the post-war settlement in Britain, elaborated romantically as ‘covenant’ or ‘compact’.
The function of student debt, despite its name, isn’t principally a means to recover the cost of higher education. That the student finance system only recovers only 25 per cent of its lending is, the system can’t be considered lending-proper, serving more-so as to channel state spending to prop-up a spiralling nominally for-profit higher education system. Another part of the real character of student finance is its role as an enclosure of general intellect, the socially produced reservoir of cognitive capacity which, under conditions of genuine subsumption, becomes an independent productive force. Student debt converts the development of the general intellect from a social investment (with social returns) into a personal income-contingent liability against future wages. This is the material foundation beneath the now-popular analytic claim of the student loan being a ‘graduate tax’.
By allocating the post-graduation labour of a credentialed strata into the sectors required to service the credit superstructure renders an objectively social investment in cognitive capacity into a form that registers, in administrative terms, as a private return on credit. The tightening of repayment thresholds (the 2025 Autumn Budget froze the Plan 2 threshold for three years) makes evident that the student finance regime is developing toward a more codified and apparent system of allocation.
The crisis form of student debt is less financial than it is structural/political. The share of UK First Class degrees rose from 16% in 2010 to 35% in 2022. Analyses published in 2025 suggest the marginal graduate premium (the additional earnings of the last graduate added to the strata) disappeared roughly two decades ago, when undergraduate participation rose past 30 per cent. Of the 2024 student intake of around 495,000, approximately 160,000 may not earn any premium at all; the graduate is being credentialed for a wage scale that does not, in aggregate, support the credentialing investment. The credential is being inflated to the point where its signal value approaches zero, demonstrating that the underlying cognitive capacity is therefore systematically misallocated.
The fourth type of debt, Sovereign Debt, is the apex, that the first three terminate in the fourth; consumer, mortgage, and student debt crises are all, in extremis, absorbed onto the sovereign balance sheet. In 2008, the peak cash cost of the UK interventions was £137 billion, with a net cost subsequently estimated by the OBR at £33 billion; UK government debt rose from 38 per cent of GDP in 2007 to 83 per cent by 2012, driven by the bailouts, lost tax revenue, and increased welfare expenditure. Subsequently, the response to COVID-19 produced a further outgrowth of sovereign debt. UK general government gross debt now stands at around 101 per cent of GDP, with debt interest payments at £126 billion in 2025-26, the third largest item of government expenditure after health and welfare.
Britain exhibits neither rising organic composition of capital nor accumulation of new productive capacity. Sovereign credit here is allocated to massaging the existing distribution of asset claims (QE and QT in turn) and supporting consumption (frozen tax thresholds, etc). Britain’s growth has been the worst of any major economy since 2008, and the OBR has been forced to revise productivity growth downwards repeatedly across reports.
While it ought to be noted that bond markets discipline sovereign credit, the PRA and FCA discipline private credit through capital and conduct rules, and the Treasury sets the fiscal envelope, the central bank still stands as the absolute threshold for tending to crisis for when fiscal, regulatory, and market discipline have all failed. The apex is not apparent during periods of relative stability because, in such instances, the lower-order instruments are sufficient to resolve crises. The material sovereignty of the Bank of England is affirmed at the expense of illusory forms of sovereignty in Parliament; clarification of these terms provides the base material for political agitation for a novel form of social organisation and a conscious, self-directed mode of production.
From all of the above we can sketch the outline for a minimal programme sufficient for the present period. Such a programme would, as has become increasingly popular in the spontaneous reactive demands of vast and disparate sections of the population, begin with debt cancellation plus the productive reorientation of sovereign credit. One without the other would ultimately serve to reproduce the dynamic that gave rise to the present arrangement.
Pursuit of consumer debt cancellation would, in theory, restore future variable capital to its prior position as the worker’s claim on social consumption, but would not fundamentally alter the productivity gap that necessitated the original credit extension in the first place; Mortgage debt cancellation in isolation destroys the capitalised asset value held by the owner-occupier worker, therefore risking mass political reaction, an attack on the vestigial remnants underlying the worker-citizen in its already atrophied condition; Student debt cancellation, the politically ‘lightest’ of the three, wouldn’t inherently disturb the object of the debt since the underlying asset is the graduate’s own cognitive capacity, engendering the possibility of a more immediate social return, yet a pursuit for cancellation would still necessitate thorough economic justification in the present ideological condition of the British public.
To mitigate adverse effects of the pursuit of debt cancellation in general, the decisive agitational wager would therefore be the demand for a redirection of sovereign credit toward expanded reproduction in concrete terms through physical capital formation, energy infrastructure, domestic manufacturing capacity, transport and freight infrastructure, and the productive deployment of cognitive capacity through reformed higher education institutions. In our period, this serves as the minimal condition under which the credit superstructure can be made to serve productive development rather than the reproduction of existing asset relations, all towards the ends of writing-out the system of administered credit altogether.
A reorientation of sovereign credit toward expanded reproduction makes possible the redistribution of social wealth toward the worker without forcing the destruction of the capitalised assets that ground the worker’s citizen-existence. The reconstitution of the former is the precondition for the retrieval of the latter, and the further integration of the latter underwrites the continuation of the former at higher and higher degrees of material prosperity.