John Ayer's Reading List

"Recall that bankruptcy is one piece in a larger mosaic. Bankruptcy is about debt, debt collection and debt forgiveness. Graeber touches on all these topics—he tries to paint them into a big and unified picture. His takeaway finding is that debt abides, that debt issues transcend mere bankruptcy and even transcend capitalism. Seen in this broader context, we come to understand how not merely is bankruptcy an aspect of debt, but debt is an aspect of sovereignty itself. Consider how many societies, throughout human history, consist of, one, a tightly knit core of oligarchs, and, two, a much larger mass of the faceless and voiceless. The oligarchs ‘own’ and the voiceless ‘owe.’ In an all too common version, those who owe just get further and further behind until they have two choices: suicide or slavery. You get a version of this world in the account of Sólōn, the pre-Classical Greek lawgiver said to have ended debt slavery in Athens. You get echoes of it in the Biblical discussion of debt relief through the institution of the jubilee. Graeber’s book seems to generate fierce partisanship among its critics and its defenders. They’re both right: it does have its shortcomings but he gets some big things right. I suspect a virtue but also a defect is that he was trained as an anthropologist in a field dominated by economists. He probably sets out to prove too much, and gets out of his depth. But I don’t know of any other author, ancient or modern, who tried to tackle debt as a whole."

"I have a friend in his 80s who has included on his bucket list the goal of reading all of Balzac. I have not (and do not plan to) read all of Balzac. But it’s a worthy objective, particularly if you want to understand what Marx would have called “bourgeois capitalism.” There are a lot of Balzac novels but César Birotteau is the only one I know of that directly addresses our topic. Birotteau is everything you might want in a bourgeois hero: vain and puffed up and almost absurdly proud of his success in the perfume game. Then he gets swept up in what we can call ‘the speculative mania.’ Balzac seems to appreciate him with a kind of wry but affectionate irony. I have known bankruptcy lawyers who think of their clients in pretty much the same way. Birotteau did indeed hold bankrupts in contempt, until he became one himself. Ι think it is part of Balzac’s greatness that he recognized and knew how to convey the all-too-human ambivalence—even schizophrenia—about the process and its place. Indeed. And I think these various points help us to understand why Marx thought so highly of Balzac—and why both Marx and Balzac might have countenanced César Birotteau with a mixture of compassion and amused contempt. US bankruptcy filings ran a bit under 800,000 cases in the most recent reported year. That’s a bit under half the peak, which was achieved back in 2010. An interesting question is how far that decline bespeaks a better economy, how much it’s about debtors with problems so severe that bankruptcy can’t help, or cases where debtors and creditors agree that it is more cost effective to cut a deal outside of bankruptcy than to submit to the rigours of the process itself."

"I’ve read a good many books about our recent financial market afflictions, many of them quite good, some excellent. But there’s an awful lot of overlap. Most build at least in part on the same story line: a cabal of libertarian ideologues deployed a washed-up second string actor in the service of an ideological agenda. Krippner is one who tells a different and in itself arresting story. I discovered this book just lately and I’ve learned a lot from it. She is trained as a sociologist and she sees things through a different lens. Support Five Books Five Books interviews are expensive to produce. If you're enjoying this interview, please support us by donating a small amount . Krippner argues that the standard narrative, while not entirely wrong, is misleading and vastly oversimplified. For starters, she points out, the great wave of deregulation, seen as the heart of our problem, can be understood not so much as a purposive story arc as a series of ad hoc decisions designed, first of all, to kick the can down the road. ‘Let the market decide’ often meant little more than ‘we really haven’t any idea what to do about it.’ We also visualized ‘let the market decide’ vaguely as freeing up the world for a whole new smorgasbord of invention and production. It didn’t, really. Rather, most of the can-kicking decisions generated what Krippner calls ‘financialization’—a world in which the techniques for raising or investing money become more important than the nominal product. It’s a world where you can without distortion think of a company like Toyota or General Electric as a “bank.” With a proliferation of debt, it’s no surprise that you also find a proliferation of non-payment."

"Elizabeth is, of course, at this moment, a candidate for the US presidency. Before she emerged in the political arena, she had a previous incarnation as a professor of bankruptcy law, in which guise she played a pivotal role in reinventing the agenda for bankruptcy scholarship. Specifically, she (with others) made it worthwhile and important to try to figure out just who filed for bankruptcy and why. In particular, there was (and perhaps always has been) a view that bankruptcy was mainly the result of debtor irresponsibility. Elizabeth made it her business to demonstrate that this account is bollocks: that most individual bankruptcies can be traced to structural failures for which individual debtors should not be held responsible. It’s a complicated proposition and it is possible to have reservations about some of her work while still recognizing that she has greatly changed the pattern of thinking about the issues (and has the right enemies…) Yes, if you mean the crisis of 2007-2008. That wasn’t even the first crisis. We’d already lived through other financial crises, not least the so-called savings and loan crisis of the 1980s, which spread like a prairie wildfire across the housing industry in its own time. The Warren-Tyagi book helps us to understand that the chain of events beginning in 2007 exposed systematic flaws that been growing more untenable for years. Do I agree that bankruptcy is not driven by the immoral debtor? Yes, it’s not. Certainly there are irresponsible debtors and some of them get away with stuff through the bankruptcy system. But they aren’t the heart of the problem. It’s more and more about debtors trying to maintain a secure and steady family life. That’s what Warren and Tyagi’s book argues and the mass of data supports them. “In particular, there was…a view that bankruptcy was mainly the result of debtor irresponsibility. Elizabeth [Warren] made it her business to demonstrate that this account is bollocks: that most individual bankruptcies can be traced to structural failures for which individual debtors should not be held responsible” I was never an intimate friend of Elizabeth’s, but I was an amiable professional colleague back in her academic life. We lunched out together a couple of times, she had the fruit box. For a short time, I had an office catty-corner across the hall. I remember overhearing her talking loudly and cheerfully into the telephone. She had her feet on the desk. I don’t think I’ve ever laid eyes on any of the other authors, but if there is an afterlife, I hope I get to do lunch with Balzac."

"Yes, it is. Superficially, this book might appear to be a clone of Warren and Tiyagi’s book—a drab technical story told with dramatic force by an author unsympathetic to high finance, now morphing into a political player. It isn’t, really. For one reason, it concentrates on real estate, particularly the residential housing market. Also, I don’t know of any book that does a better job of drawing the personal and the institutional together in the ritualized craziness of modern real estate finance. She interweaves the macro and micro—and explains the abstract financial structure while showing its effect on real people. Yes, but I don’t think it’s quite fair to say the decision prevents modification, as if to suggest it’s the court’s fault. It’s better to say the court was telling us what the legislatures meant when they wrote the statute. And note the decision was nine-zip. And if they’d asked me it would have been ten-zip. This was what the drafters of the relevant statutes intended. Could the drafters have written differently? Sure. Could they change the statutes now? Sure, but when you get into the weeds, you realize it’s not that easy to figure out exactly what kind of rewrite makes sense. In general, I guess I would although I might not frame it quite that way. Recall that bankruptcy is part of a larger system. If I were sovereign, I might monkey around with the bankruptcy system, but even as to debtors and creditors, there are other things I’d do first. I’d much rather work for ways to change the system such that so many insane deals just don’t happen to begin with. I don’t see any good reason for a system wherein 26 people together own as much wealth as the bottom half of the world population. I’d love a world where just about any adult can make a living such that s/he can support a family. I’d love to build a system that exists for some purpose other than the enrichment of bankers. Then I’ll worry about ‘overreaching creditors’ and ‘irresponsible debtors’ and I think that problem will be manageably small."