The violence of municipal debt: From interest rate swaps to racialized harm in the Detroit water crisis

Abstract

Abstract 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. Movements like Black Lives Matter have, for example, rallied against an urban condition that is rife with racially differentiated state violence. Yet these spectacular moments of urban violence are often underwritten by more abstract forms of financial violence. Using the insolvency of the Detroit Water and Sewerage Department (DWSD) as a case study, we seek to investigate the American municipal debt crisis 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 swap deals that pushed DWSD into budgetary crisis, tracking their ramifications across the Detroit region and DWSD service area, 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 municipal finance rearticulates racial hierarchies and produces multiple forms of racialized harm in the American city. We conclude (i) that 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) engaging the socially differentiating dynamics of finance is equally necessary to explain contemporary urban expressions of racialized violence.