Both within and outside the United States, it has become increasingly obvious that the need for wealth redistribution—“the issue that blocks the horizon,” as Frantz Fanon wrote in The Wretched of the Earth—is the central issue for any future era of progressive change. Wealth inequality has accelerated throughout the world over the past four decades in what many perceive as the triumph of neoliberalism: Individuals and nations are rewarded or punished according to their ability to accumulate wealth and participate in the financialization of all aspects of their existence.

When it comes to Puerto Rico, the questions of wealth inequality are central to both the everyday life and the colonial reality of the island, as Rocío Zambrana argues in her new book, Colonial Debts: The Case of Puerto Rico. The island’s status as an unincorporated territory and de facto colony has made it vulnerable to an extreme form of austerity imposed on it by the United States. But this austerity comes with high personal costs, too, undermining the very health of the island’s people.

In Zambrana’s account, Puerto Rico’s debt is symptomatic of both imperial practices—in that its agriculture, trade, and taxation have been refashioned to favor US interests—and a neoliberal colonialism of capital extraction through tax exemption and bond speculation. Offering an account that weaves together philosophies of debt, American exceptionalism, and a description of attempts by various coalitions of leftists, students, women, and workers to resist, Zambrana not only details the experience of economic exploitation in Puerto Rico but confronts its particular effects on an array of marginalized groups, thereby showing that debt knows no divisions between identity and class and that the inequalities it imposes or creates must be met by an equally undivided left.

In the United States, the politics of debt has mostly focused on personal debt and, in particular, student debt. Recent figures show that Americans owe just over $800 billion in credit card debt, and when you add in mortgages, car loans, and student debt, the total rises to over $15 trillion. Beginning in the years after Occupy Wall Street, activist groups like Andrew Ross and Astra Taylor’s Debt Collective have lobbied for aggressive student debt forgiveness—a policy that was originally part of the 2020 Democratic Party agenda but now seems to be flagging as a serious consideration for the Biden administration as it struggles to maintain the party’s majorities in Congress in the run-up to the 2022 midterm elections.

Yet debt has become a central engine of the US economy, not only for consumers but for cities and states. In the US, local municipalities take on onerous amounts of debt to keep functioning. Meanwhile, throughout the world, debt is employed as leverage that allows wealthier countries to extract concessions from poorer ones. This practice was evident in the United States’ “dollar diplomacy” interventions throughout the Americas in the early 20th century, justified under the Monroe Doctrine, and has been repeated in the 21st century through the International Monetary Fund, the World Bank, and the European Union in order to sustain a capitalist hegemony over most parts of the globe.

In Colonial Debts, Zambrana situates Puerto Rico’s current turmoil within the politics of debt. The island had accumulated $74 billion in bond debt and $123 billion in debt overall, with pensions included, which spurred Congress to create PROMESA, a law designed to restructure and reduce the level of debt so that Puerto Rico can eventually reenter the sphere of capital markets and resume borrowing in a supposedly more responsible fashion. On March 15, a debt restructuring plan approved by the PROMESA-mandated Financial Oversight and Management Board (FOMB) officially kicked in, ostensibly bringing Puerto Rico “out of bankruptcy,” but the plan’s austerity measures are still provoking protests and discontent. “Debt is an exchange that has not been brought to completion,” Zambrana writes. “During the time that the debt remains unpaid, the logic of hierarchy ‘takes hold.’” In Puerto Rico’s case, this hierarchy is embodied by the FOMB, which has had the effect of eroding democracy on the island.

For Zambrana, the story of PROMESA is really the story of colonialism reinventing itself. The debt crisis in Puerto Rico is not a simple case of an incompetent government borrowing beyond its means; it is the result of the many years in which the island served as a profit machine for US corporate interests, a dumping ground for US manufactured goods, and a tax shelter for businesses and, increasingly, individuals. Puerto Rico’s debt grew, Zambrana shows, because most of the profits generated there were siphoned off into US and offshore banks, not reinvested in the island, and because a series of laws allowed US interests to treat it as an American state when it was convenient and as a foreign country when it wasn’t. Unable to make autonomous trade arrangements with its neighbors, and subject to laws like the 1920 Jones Act, which made it overly dependent on US maritime commerce, Puerto Rico could never grow enough economically to create an adequate tax base and keep its government out of the red, even after it developed a manufacturing industry in the postwar years.

As an appendage of the US economy, Puerto Rico, which had enjoyed a period of prosperity in the 1950s and ’60s, ran into trouble with the economic convulsions of the 1970s, and it began to borrow in the form of bond issues in the millions of dollars just to pay for essential government services. The market for Puerto Rican bonds has grown rapidly since then as banking was deregulated and bond investment became more volatile in the 1980s, while in 1984, Puerto Rico’s status under Chapter 9 bankruptcy law was changed to that of a state, which had the effect of making it ineligible to declare bankruptcy.

As the island became increasingly shackled to its debt, Puerto Rican bonds became more and more attractive for speculators. Since 1917, with the passage of the Jones-Shafroth Act, the bonds have been triple tax-exempt, and as speculators jockeyed for position in the 1980s, they became a hot investment, especially for Wall Street underwriters and hedge and vulture funds, the latter always on the hunt for “distressed” economies from which to extract profits.

Zambrana tells this story of colonial manipulation and financial speculation, but she also does something else interesting: Fusing the theorist Aníbal Quijano’s idea of the “coloniality of power” with Saidiya Hartman’s notion of “afterlife,” she argues that Puerto Rico’s “decolonization,” ostensibly accomplished in 1950 with the creation of its “commonwealth” status, allowed its original colonization to have an afterlife in the form of this debt. It was more than just a way for Wall Street speculators to get rich, Zambrana notes; Puerto Rico’s debt was a means to reassert US dominance over the island “within and through the strictures of financialized neoliberal capitalism.”

Shifting from the past to the present, Zambrana then turns to the Italian sociologist and philosopher Maurizio Lazzarato to examine how debt and debt crises not only exploit and discipline Puerto Rico but also transform its everyday life. In his books The Making of the Indebted Man and Governing by Debt, Lazzarato argued that a new debt model emerged in the 1970s and ’80s that reversed the midcentury Keynesian model of deficit spending. This model created not only new states but new subjects: Instead of going into debt itself, the state began to pass that financial burden on to individuals. Individual life became a “site of value creation and extraction,” imposing on the people not just the guilt of living on an indebted island but that of being personally indebted, too. In this way, debt became “at once material and ‘affective.’”

As Zambrana shows, Puerto Rico’s debt has had many devastating effects on the average Puerto Rican. The 11.5 percent sales tax—the highest of any US state or territory—is one of the strategies that enable Puerto Rico to circumvent the limits in its Constitution in order to sell bonds, but it also overburdens consumers. A mortgage crisis exacerbated by the island’s economic woes has pushed realtors to favor wealthy Americans who want to buy property in places like San Juan, squeezing out the local residents. The privatization of the island’s electrical authority, airports, and toll roads and the breakup of its telephone company have allowed entities that were once administered in the public interest to be run in pursuit of private profit.

Zambrana examines how personal debt crises have taken a particular toll on women and queer people in Puerto Rico. Using the work of the Argentine activists Verónica Gago and Luci Cavallero, who wrote about how debt often “does not allow us to say no when we want to say no” during their own country’s crises, she shows how women’s bodies are threatened and subjugated by economic burdens and the imposition of patriarchal morality. The rates of femicide and violence against women have skyrocketed during the debt crisis, and there is currently a mass mobilization of teachers, most of whom are women, in Puerto Rico protesting ridiculously low wages and diminished pensions, both of which are concessions to the debt adjustment plan.

The debt crisis has also undermined the limited democratic control that Puerto Ricans did have. The privatization of the electrical authority was carried out with little public input, and the contraction of the educational system, with its numerous school closures, as well as the deterioration of the University of Puerto Rico system, has been widely condemned. Despite proposed legislation in the US Congress about the resolution of the island’s territorial status, debt has made Puerto Ricans’ desire for either independence or statehood less achievable.

So how can Puerto Rico escape from the debt trap? Zambrana’s answer is simple: politics. Soon after Puerto Rico’s debt was declared unpayable by then-Governor Alejandro García Padilla in 2015, a movement that brought together various sectors, from university students to labor activists, emerged demanding a forensic debt audit in order to expose the unfair conditions imposed on the island. As I reported in The Nation at the time, a preliminary investigation by these groups showed that much of the debt was illegal—violations of constitutional limits, which had been subverted by Wall Street’s machinations in concert with Puerto Rico’s government bank. The FOMB commissioned a report in 2018, but it fell far short of revealing the depth of the irregular practices that created the island’s $74 billion debt. The debt commission, which had been initiated by García Padilla, was disbanded by his successor, Ricardo Rosselló, just months into his term.

While the protests calling for a forensic debt audit did not achieve their goal, Zambrana argues that protest is still the most effective way to liberate Puerto Rico and its residents from debt—pointing as an example to the protests that pushed Rosselló from office in the summer of 2019, which also called for the removal of the Financial Oversight and Management Board. In the meantime, Zambrana adds, Puerto Ricans can take matters into their own hands in a multitude of ways: by occupying public beaches; by establishing mutual aid organizations like the Apoyo Mutuo centers, which exist in several municipalities; and by demanding that the debt not be paid until it is forensically audited. Given the island’s current status of “belonging to the United States, but not a part of the United States,” Zambrana writes, Puerto Rican activists can also lead the way in showing how all Americans can resist austerity. After all, what happens in the colony almost always has a way of returning to the metropole itself.