Money Beyond Sovereignty (Essay)

In her recent interview with the Money on the Left podcast, Lua Yuille offers a helpful critique of how Modern Monetary Theory (MMT) is often characterized by proponents as a value-neutral lens that describes the capabilities of a “monetary sovereign.” As a heterodox legal scholar and economist who focuses on race and property in the United States, Yuille immediately noted the urgency for MMT to acknowledge how its rhetoric about public power speaks differently to audiences whose qualitative experiences of public institutions like property are stratified by race and identity.

As Yuille puts it, “When you talk about, as MMT does, a set of reflections grounded in monetary sovereignty, you start with, ‘If you have power, then you can do what you want with it.’” Putting a finer point on it, she relates MMT’s under-theorization of public power’s differentiated meanings to racial politics. “If you go into places where there’s a lot of Black people, power has never been our friend. Power has never worked for us. So when you tell us all about the possibility of power, I’m not necessarily sure that’s making me excited.” 

Yuille’s objections cut to the problematic core of modern political sovereignty, within MMT and beyond. Since at least the European Renaissance, Western thinkers have relied on a particular version of the metaphor of a political head and body to describe politics as a relationship between a ruler and ruled. In perhaps the most cynical formulation of this head-body relation, Machiavelli argued that the head of state should care for his collective political body for reasons of pure self interest. Over time, Early Modern thinkers experimented with ways to adapt the head-body metaphor to less authoritarian ends, placing emphasis more on the body than the head. Thomas Hobbes famously described sovereignty as a contractual agreement between the will of a Sovereign and the discordant wills of a political body that wishes to act through a collective voice in order to avoid a violent state of nature. 

The more familiar story from here is that Enlightenment thinkers such as Locke and Rousseau sought to replace sovereign monarchies with sovereign institutions of self-governance, so that the nascent nation-state could be understood as a self-governing body. It’s still the head-body metaphor, but the head has been lopped off rhetorically and replaced with an autonomous collective body. 

While the idea of a self-determined body without a head may seem attractive for its democratic impulses, the premise of a sovereign will requires that its orchestra of legal boundaries and dictates structure the entire scope of how its body engages with the world. Dependencies beyond the bounds of the independent sovereign’s planning are systematically foreclosed. Whether it’s the underemployment of a type of worker whose skills were once acquired to participate elsewhere in the global economy, or it’s the snuffing out of a diasporic group’s shared cultural meanings and traditions, the subsumption of differences into a sovereign voice requires some mix of exclusion and assimilation to square the circle. 

It is precisely this problematic lineage of a sovereign democratic “body” that some of the less thoughtful presentations of MMT draw upon when they ground money exclusively in the “monetary sovereignty” of nation states. When one first researches MMT, they often encounter the phrase, “money is a creature of the state,” which is credited to the mid-century economist Abba Lerner. At the time, Lerner was pushing back against contemporary liberal theories of money that externalized its origins and exiled its potentials to the domain of private commerce. The US Dollar is a creature of the state because dollars are issued by the federal government ex nihilo. Such language should be empowering for the average person because we live in a democracy, so the logic went.

Except, of course, public institutions are not equally answerable to everyone. The figure of the “average person” that the more liberal proponents of MMT imagine will be empowered with supposedly value-neutral knowledge of how public spending works is in fact a particular group of people. It’s a group whose experience of civic participation is predicated on their relationship to white patriarchy, whose present articulation was largely constructed in the 20th century, through decades of large-scale fiscal planning directed towards white suburban uplift. Whatever else one could say about the post-war United States government that deficit-spent its way to segregated suburbs after World War II, it was aware of the possibilities of public power.

To the extent that the nation-state is associated with a positive ideological project in most people’s minds, it’s nationalism. And indeed, there are proponents of MMT who turn the language of “monetary sovereignty” towards explicitly conservative ends. In the U.K., MMT is largely associated with the economists Bill Mitchell and Thomas Fazi, who leveraged MMT’s institutional critiques of the European Union to argue in favor of Brexit and against an encroaching “cosmopolitanism.”

In a 2017 American Affairs article titled “Make the Left Great Again”, Mitchell and Fazi rehearsed a version of Angela Nagle’s argument in Kill All Normies, in which she blamed the excesses of the “Tumblr Left” for the increasing popularity of far right politics. “In a vicious feedback loop,” they write, “The more the working classes turn to right-wing populism and nationalism, the more the intellectual-cultural Left doubles down on its liberal-cosmopolitan fantasies [emphasis mine], further radicalizing the ethnonationalism of the proletariat.”

From an MMT point of view, this makes no sense. MMT is associated with the Job Guarantee because jobs can always be created with public money, so externalizing any group of people as competitors for a fixed pool of jobs is incoherent. And of course, this false opposition between “liberal-cosmopolitan fantasies” and an ethnonationalist proletariat has nothing to say about Black Lives Matter or the Black-led movements to defund and abolish prisons. To the extent that people of color are mentioned at all in the piece, they are the “competition” facing domestic workers. 

But the shape of the incoherence is nevertheless important, because we’ve seen it before. The giant public deficits after WWII were framed as investments in America’s Cold War national identity—a distinct suburban lifestyle whose traditions and norms set it apart from the Soviet Union. For the sake of national identity, the potentially infinite horizon of social provisioning through public money was anchored to a limited project of national conformity, which required criminalizing and pathologizing the very exclusions on which it was premised.

In the first episode of the Superstructure podcast, we read from a blockbuster twitter thread written by Thomas Fazi titled, “What the left doesn’t get about ‘social conservatism.’” Reflecting on Jeremy Corbyn’s 2019 defeat, Fazi accused “woke leftists” of denying the necessity of national identity for democratic politics. He writes, “Democracy, as the term implies, presupposes the existence of an underlying demos. The nation, in turn, constitutes the basis for the modern democratic state: still the best model of government ever created.” Fazi is referring to the “democratic” version of the head-body metaphor for governance. But the self-governing body here—what Fazi calls the “underlying demos”— might as well be the white nuclear families of the postwar American suburbs. Like the midcentury American planners who held the keys to American fiscal policy, Fazi is unable to imagine using the infinite organizing power of public money to cultivate anything other than a light ethnostate, where the only jobs that exist are culturally coded as British. 

For MMT to become widely accepted on the Left, the rhetoric of monetary sovereignty needs to be seriously complicated. As I’ve suggested, the historical tendency for public money to be realized only on the terms of exclusion is intimately related to how we conceive of the nation-state itself. Whether it’s a head of state controlling a political body or a political body controlling itself through heads of state, modern Western thought has conceived of law and money as emanations of a collective legal will. 

Within the MMT community, the “sovereignty” framing has been challenged before by Scott Ferguson, who suggests using the word agency in its place for many of the reasons I’ve laid out. Ferguson recognizes that inclusive political impulses and collective projects are often routed through this language, in spite of its limitations. The MMT economist Fadhel Kaboub, for instance, has worked for years within a monetary sovereignty framework to advance an internationalist vision of economic solidarity and cooperation. International campaigns for food and resource sovereignty have projected similar visions. Frequently, these projects wield the term “sovereignty” against its historical associations with ethno-nationalism and autarky. Still, because the language of sovereignty externalizes international responsibility from a more fundamental commitment to self-determination, it is vulnerable to cynical cooptation by those like Thomas Fazi, who want to subsume anti-colonial struggles into a right-left “national liberation movement” alongside Brexit. For this reason, the language of sovereignty ought to be replaced with a consciously social language of agency, participation, and actualization. 

To develop this critique further, I would like to do something a bit unusual and turn to feminist film theory. Film theorists spend a great deal of time thinking about the cultural meanings of films in ways that will be useful for us. Namely: they do not take what films say about themselves fully at their word. A documentary might claim to be presenting an unmediated view of reality, but it cannot erase its participation from the world that it’s filming. A horror movie might claim to be presenting ordinary people, but when the token Black character dies first, the social world behind the film is very recognizable. The most interesting films to me are the ones which are aware that they don’t have a full handle on their social meaning and choose instead to thematize their position in the world by implicating themselves in their social commentary or subverting popular tropes. One could think of Dziga Vertov’s Man with a Movie Camera (1929), or even Bong Joon-ho’s Parasite (2019).

I want to turn to the scholarly debate that surrounded a 1975 essay titled, “Visual Pleasure and Narrative Cinema,” in which feminist film theorist Laura Mulvey articulated a critique of the “male gaze” as a patriarchal structure in cinema. In that essay, Mulvey argues that patriarchy is tenuously organized around an imagined opposition between an acting male subject and a passive female object. Premised entirely on an inactive female figure, the male gaze shores up its anxiety over actually-existing women by variously fetishizing and punishing them on screen. Mulvey reads classical Hollywood film form through this existential anxiety, noting the ways in which narrativity and even the camera itself work to reinforce a male spectatorial position, which has full mastery over women characters. Spectatorial pleasure is created through a fetishizing gaze that reduces women to sexual objects, while Classic Hollywood tropes like the “femme fatale” are given agency only to be punished when it is revealed by the end that their autonomy was a ruse to trick male characters and spectators alike. 

In the decades since writing “Visual Pleasure and Narrative Cinema,” Mulvey’s argument has been variously challenged and elaborated by queer and Black feminist theorists. Most notably, bell hooks took Mulvey to task for her inattention to the implicit whiteness of Classical Hollywood Cinema, and of her own subject position as a white woman. For hooks, the fact that Mulvey ends her essay by gesturing towards a spectatorial awareness of the male gaze as the “possibility of resistance” gives away her unreflected position as a white woman. Nested in systems of white supremacy, patriarchy has a unique investment guarding white womanhood. And while there are some complicated and often unacknowledged benefits for white women in the “protection” of an objectifying system, for the Black female subject there is little pleasure to be had. For this reason, hooks assumes a consciously oppositional Black female gaze as her starting point, and goes on to positively theorize the counter-gazes that the male gaze necessarily excludes. 

My reason for going into this level of detail here is not to adjudicate a 30 year old intellectual dispute, nor to paper over it. Instead, I want to reflect on the common theoretical structure that hooks and Mulvey both rely on to make their arguments in order to situate my own reading of sovereignty. While the subtext of hooks’s engagement with Mulvey certainly makes a crucial intervention into a white feminist discourse, it is not a totalizing rejection of the shape of Mulvey’s argument. It’s the persistent failure of the male gaze to master its object in Mulvey’s schema that bell hooks repurposes to critique whiteness as a structure and even Mulvey herself. The shape of this structure can, in fact, be traced back earlier than Mulvey and complicated historically in all kinds of ways, but that is beyond the (already too big) scope of my argument here. 

Drawing on this structural analogy between hooks’s and Mulvey’s arguments, we can read the nation-state’s carceral governing logics and exclusionary fiscal policies in a similar way. Like the terrified male (white) subject who shores up his existential anxiety over the social contributions of others through violence and discipline, the nation-state directs the generative potentials of public money largely towards shoring up its feeling of absolute freedom to do whatever it wants. For a nation-state that sees itself as politically sovereign, accountability to the rest of the world can only be read as an external obligation placed upon an otherwise autonomous political body. Read through the lens of sovereignty, the prospect of internal accountability to those purposefully excluded from the nation-state’s planning is seen as an existential threat, and the symptomatic policy response to the consequences of exclusionary economic planning is carceral. This is true whether it is Black Americans who have been marshalled into slums and unemployment, or trans people who spend their time negotiating with healthcare providers to have their most basic needs met because the system as a whole isn’t planning for them.

But money is not solely an emanation of the nation-state, and the institutional levers of fiscal policy don’t have to be dealt with as if that were the case. The essence of money is not the infinite gaze of a sovereign will—it is the infinite horizon of possibility to abstractly cultivate and organize collective world-making. The nation-state participates in the abstract ordering of social life across many physical distances and many layers of social meaning, but “participates” is the key word here.

What is needed for a fully inclusive and left wing articulation of MMT to succeed is an approach to politics that does not take the nation-state at its word for how it relates to the world or where its levers are. While it is important to say that we do not need to wait for capitalism to “go into crisis” to make effective demands for fiscal agency, the covid crisis has forced the government to respond improvisationally in ways that can be taken advantage of in exactly this way.

More capacious foundations for monetary answerability are immediately visible, if you know how to look for them. As Nathan Tankus has written about at length, the Federal Reserve is experimenting with what it calls “municipal liquidity facilities (MLFs),” which allow for some municipal bonds to be exchanged for dollars. If expanded and made permanent, such a policy would effectively short-circuit the federal government’s “monopoly” on currency issuance.

Of course, local governments aren’t the only large fiscal authorities that stand to benefit from access to dollar creation. In the spirit of thinking beyond the conventional boundaries of the nation-state—and in the wake of covid forcing the creation of MLFs—one can imagine an organized Left pressuring the US government to open similar facilities for postcolonial governments who, like US municipalities, are forced to enforce underemployment and austerity through dollar denominated debt. In another provocative post, Nathan Tankus suggests that the International Monetary Fund is best positioned to facilitate this through swap lines between domestic currencies and its own credits, which are called “Special Drawing Rights.” 

A similar line of thinking animates my Money on the Left colleagues’ “Uni” proposal, which is a direct action proposal for universities and consortiums of universities to finance themselves with credits, avoiding layoffs and even allowing economic activity to expand. Referencing the shorthand “Munis” for municipal bonds, Unis would be issued first as “University Payment Anticipation Notes” whose value as circulating money is locally backed by the university’s willingness to accept them as payment for rents, tuition and fees. The fact that universities oversee such large regional infrastructures of economic provisioning means that their willingness to accept Unis as payment for their ongoing transactions is enough for the Uni to circulate locally as a complementary currency.

Importantly, the Uni also opens the door to new ways of interfacing with monetary institutions like the Federal Reserve’s municipal liquidity facilities. To the extent that these facilities allowed municipal bonds to be exchanged for dollars, these facilities effectively allowed local governments to traverse the vulgar MMT binary between “currency users” and “currency issuers.” Crucial for this approach to monetary experimentation is that it does not follow a logic of zero-sum fiscal prioritization between competing institutions. Recognizing universities as essential infrastructure with the right to provision itself into the future leads to similar revelations about every other part of our interdependent economy. If universities should keep operating because they employ lots of people, why not houses? Or state governments? Or even foreign governments whose dollar-denominated debts are wielded against them by international institutions to enforce austerity?

The Uni is one example, but we can read similar impulses in the experimental demands of subnational governments such as the Philadelphia City Council, which on March 11 unanimously passed a resolution calling on the Federal Reserve to provide no-interest, long term loans to the city for education funding. We can affirm the impulse to reclaim fiscal agency, and go even further to suggest that these not be loans at all, but something more like grants conditioned only on their intended use.

The democratic answerability of money and its potential to make and remake the world is a political horizon of possibility that belongs to all of us. The modern obsession with national sovereignty and independence obscures the underlying structures of interdependence in which such claims are grounded, but interdependence and vulnerability is not weakness. On the contrary, it’s the source of our power.

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Will Beaman

Will Beaman is the editor of the Superstructure publishing vertical and a co-host of the Superstructure podcast. He is a graduate student of Film & Media Studies at the University of South Florida.