Book Review: Karl Polanyi’s Political and Economic Thought: A Critical Guide

Toussaint’s accessibly written book can be read as a forceful call to search for ways to make repudiations work to the benefit of people. Current loan markets work insidiously, making it more challenging to identify illegal debts and separate them from others. One can consider the example of debts accumulated through public–private partnerships across various geographies. While some of the piled-up burdens might arise from reasonably priced infrastructural investment, in some countries, a considerable part of conditional liabilities, which find their way into the public debt gradually, come from projects that enrich the contractors and local intermediaries. It is evident that given the lack of comprehensive reforms in the international financial system and persistent relations of dependency, suspending payments through debt audits and disowning illegal debts can only provide temporary relief. In this context, unless a part of a compelling transformation targeting various exploitation forms, even the successful debt repudiations are short-lived victories. Nevertheless, each case serves as a steppingstone to illuminate the inequities permeating international loans and the global economy. The main creditors within loan contracts and the sovereign debt structure have changed several times throughout the history of modern capitalism. As it is apparent in the trajectories of sovereign debt crises of previous centuries, by extending loans with extremely high-interest rates and cutting hefty commissions, creditors were directly responsible for undermining the financial independence of debtors. In recent decades, nation-states from the global South are borrowing from the international financial markets at low-interest rates, and fine prints of debt contracts are constantly updated to minimize debtor states’ room for maneuver. Still, the increased number and variety of creditors might be converted into an advantage for a country repudiating odious debts. Toussaint’s book serves as a fundamental resource for those who want to have a comprehensive grasp of the history of sovereign debt repudiations and explore alternatives to remove the noose of debt around the neck of the global South.