Democratizing University Finance

Benjamin Wilson and Scott Ferguson join guest-host Jakob Feinig to discuss their recent article about Money on the Left’s “uni” project to democratize university finance. Titled “Stop Trying to Find the Money–Create It!,” the article argues that the Public Banking Act can empower universities to issue new forms of public money that serve democratic communities and repudiate austerity. The text will appear mid-October 2022 in the American Association of University Professors’ publication Academe Magazine as part of a special issue edited by Scholars for a New Deal for Higher Education. In this conversation, Ben and Scott recount the evolution of the uni project from its original politicization of emergency Federal Reserve facilities early in the Covid-19 pandemic to its most recent iteration joining bottom up learning-by-doing with top-down federal legislation. Along the way, the conversation turns toward the project’s commitments to democratic pedagogy through participation, the need to recognize universities as powerful economic provisioners and anchors, and the uni’s role in challenging the current dollar system from within.  

*Special thanks to Scholars for a New Deal for Higher Education for inviting Money on the Left to collaborate and for inviting us to contribute to their issue for Academe Magazine. 

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Music by Nahneen Kula: www.nahneenkula.com

Transcript

The following was transcribed by Mercedes Ohlen and has been lightly edited for clarity.

Scott Ferguson: Welcome to a very special Money on the Left episode. This is an unconventional episode in that I am being joined not by my regular co-hosts, William Saas and Maxximilian Seijo but by our beloved colleagues, Assistant Professor of Human Development at SUNY Binghamton, Jakob Feinig, and Associate Professor of Economics at SUNY Cortland, Benjamin Wilson. Thanks for joining us.

We’re convening this irregular episode to update our listeners about and discuss the project that we and others in our Money on the Left Collective have been variously working on: University financing using a Modern Monetary Theory and endogenous money approach. We call this project, if you’re not aware of it yet, the Uni-Currency project. We’ve been developing it over the course of several years–it started during the early pandemic moment when austerity was being threatened and sometimes enacted in all kinds of unjust ways. And we developed it to provide an alternative, and hopefully not just a financial alternative, but a just and new direction for university expenditure and governance.

We’ve published many papers on different platforms over the past couple of years. Last year, we were invited as a group to join and begin collaborating with an exciting group that’s been doing important advocacy and politicizing around University financing, the Scholars for a New Deal for Higher Education. We were aware of what they were up to and we were excited about it. We also felt that they were missing the MMT approach that we brought to the table, and they invited us to the table. They’re all really great and nice–we had some meetings and we taught each other about what we were up to. 

Next thing we knew, a subcommittee on university finance in that group was invited by the American Association of University Professors’ Academe magazine to put together a special issue which would eventually be titled “Revolutionizing Higher Education Finance for the Public Good.” A couple members of our team, Ben Wilson and myself, took up the task of writing what is essentially an updated version of the Uni project that we had been developing. The purpose of this particular episode is to work through the latest iteration of the Uni Project that is being published in the October issue of Academe magazine, but also to reflect upon where we’ve been and how this project has unfolded over time. 

We have published a lot about the Uni, we’ve talked about the Uni in different episodes, like our episode with Ben Wilson, but we haven’t dedicated a whole audio conversation to the Uni. That’s what we’re up to today. Jakob has been in the wings the whole time–he hasn’t been part of the core team but he’s been a trusted advisor and editor in the background. And we thought what better person, given his own interests in moral economies of money, to reflect on this project with us. We’ve given him the job of moderator. He’s written up a list of questions for us that we’re going to use to catalyze the conversation as we move forward, but it can also be an open, free-flowing kind of thing. 

Jakob Feinig: My first question would be: What does the crisis of higher ed today look like from other critical lenses, and how is that different from your approach to improving the lives of people on campuses, but also the people who live adjacent to campuses? 

Benjamin Wilson: That’s a great question. And I think it moves through various iterations, depending on the timing of when you talk to people, having started in higher-ed just after the financial crisis, and then seeing the COVID-19 pandemic unfolding and seeing many of the same struggles and questions arising again. The thing that comes up in our union meetings, for example, is people complaining about being overworked and not being compensated. Being asked to do more than what their job actually entails. This is real utilization of us as care workers by the administration, to get us to do more with less, because as a faculty member, my priority is always my students. Even if I’m getting less, I’m still putting out the same efforts and care toward my students. 

And this way of discussing the problems that we’re facing, often just devolves into this complaint, soapbox section, where we’re all sharing the various ways in which we’re being exploited without really being able to articulate how to solve that problem. And the only way the current paradigm presents for us to solve those problems is either the state has to provide more money for universities, or the federal government has to do that. There’s this helplessness in that idea, because it’s just so distant and far off from where we are at the table and where we are in our day-to-day working to try to get through a pandemic higher education year. So, for example, the SUNY system hasn’t increased the state budget since the financial crisis. 

In fact, recent estimates by our Faculty Senate say that we’ve actually had a real reduction in the funding of higher education in the State of New York by approximately $440 million since the financial crisis. We have been asked to do more with less for a very long time. And that presents great challenges for trying to ask for more, especially when we fell short (at my university, apparently, in budget terms by $10 million last year). So there’s this dread and hopelessness, that there’s no way that we can do better. And in fact, we are again being asked to do more with less. 

I would say the objective of this project is to allow us to move beyond these narrow confines, and to relieve the students as the biggest bearers of the financing of the university through tuition and fees, rent, and so on. Imagine what higher-ed would look like if it was able to sell finance and create its own credits, and model the behavior that MMT has made so clear that is available to the United States government through the creation of the dollar and its relationships with the banking sector to mobilize resources that our community sees as valuable and necessary.

Jakob Feinig: Terrific. Maybe you could just spell out for listeners how that would work in practice–maybe outline the basic architecture of the Uni?

Benjamin Wilson: This is a complicated question because I think there’s really two distinct paths that we’ve been talking about as the development of the Uni has advanced. In the case of Modern Monetary Theory, the US government issues the dollar. It’s the sole issuer of the dollar, the monopoly issuer, and all these stories that I think most of our listeners are familiar with. But why stop at the US government? What would it look like if sub-national or nested institutions within the system were given that sort of freedom, and we [already] have a model of that with the banking sector. I think the crises–in particular, the Great Financial Crisis, and then again with COVID–really exposed the connections between the banking sector and the federal government through the way the Federal Reserve backstops the creation of their instruments. What would it look like if universities were able to issue credit to mobilize resources the same way that the banking sector did, what would that backstop look like from a macro perspective? That’s one approach to the Uni.

The other approach to the Uni that we’ve been advocating for is one that’s familiar to those who have studied at places like UMKC, Denison University and Bard College where, in order to demonstrate how the issuer of the currency works and acts, how tax-driven reciprocal obligations operate, we’ve run this program in our classrooms to demonstrate the possibilities of full employment and a Job Guarantee, and the reality that spending creates the space for taxation, and the taxation-based demand for the currency. 

In those humble beginnings, the Uni Project could begin to build a grassroots understanding of how currency operates, and then leverage up to larger institutional legal levels. A learning-by-doing process that would gradually step the reciprocal obligations from say, a certain percentage of the grade in the classroom, to tuition, or the payments on campus for fees. And when we’re doing public goods production through our classrooms and learning-by-doing projects, connecting those to the municipality in various ways through, potentially, acceptance through property taxes and things of this nature. 

These are some ways that we could create the political momentum and pressure to start utilizing this in bigger and bigger spaces rather than simply thinking of it from this top-down perspective that is admittedly a very hard thing to teach, and for people to grapple with. I think this ground-up, grassroots approach is one of the things that’s really exciting about the Uni but it can also cause a little bit of confusion for folks.

Jakob Feinig: That’s fascinating. It sounds like you think of the Uni as a multi-level pedagogical project. That is, you’ve started to implement a classroom currency that actually works. Together with many others you have begun teaching about how public finance actually works, and what the implications are for how we think about our lives together, and how we want to organize our lives together. And now you’re adding intermediate layers between the classroom currency and the federal dollar. There is something that goes beyond the classroom but doesn’t aspire to have the reach of the federal dollar. And each of those levels teaches people about monetary life in different ways. Would that be fair to say? 

Benjamin Wilson: I think that that’s absolutely the objective here, or one of the many objectives. Money is curriculum, so to speak. It really is a new way of understanding and thinking about how the world works, and how we can use money not as the end but a means to an end as you so eloquently put in your chapter for the edited volume that just was released. I think that’s one of the most rewarding things about teaching these things in the classroom: it really does take the process of them receiving the money in class for doing work, and then realizing: Well, I couldn’t have paid the taxes until after payday. 

The lesson there is fundamental and important. And the practice of a new monetary politics is not as simple as just waving a wand and spending more money into the economy. It’s really about connecting that money to the real resources that are needed to address the systemic crises that we face, in higher education, climate, public health, etc. And so the micro-level issuance process really helps people see just how much work we really have to do and how many resources are sitting around and are not applied to those sorts of problems, because we’re so busy trying to find the money, instead of simply creating it and creating the relationships that we need to mobilize the resources to make the world safer, stabler–the resilient, happy, amenable, inclusive place that I think we would all prefer to live in.

Scott Ferguson: I want to say a little bit more about how our approach contrasts with, but also complements, some of the important critical work around university politics and University Studies. An important contemporary figure in this field is Davarian Baldwin and his really important book In the Shadow of the Ivory Tower. He’s tracing a whole interconnected system of political economy in higher ed structured around perverse incentives and pressures that are the result of states not keeping up their commitment to finance public higher ed and basically turning these supposed nonprofits, with these tremendous public authoritative powers, into quasi-private entities who have to scramble for revenues, go into debt, and speculate on the stock market. This has tremendous consequences, as Baldwin tells us, across issues of land, housing, labor, policing, and healthcare. 

While Baldwin teaches us a lot, and I so appreciate his work, it seems like that analysis only goes so far because it doesn’t question the “having-to-find-the-money” incentive. Having to find the money through the taxpayers doesn’t break out of the paradigm enough. And I think there’s a little bit of an implication that money is this necessary evil in this process. Then the analysis, I guess I would say, ends up feeling like a list of indictments. And then those indictments become the ground from which you mount an opposition. 

I think, what turning off the “where we’re going to find the money” question and turning on the endogenous credit creation frame, does is this: It allows us to see universities as complex public authorities who are doing collective care work–but often very badly, often very selectively. I wouldn’t say that we would want to soften the kinds of critiques that Baldwin is making–making visible systematic exploitations, and politicizing them, is very important. But I think we’re recognizing that, nevertheless, universities are community leaders in provisioning. Not just fallen angels or terrible institutions. And as these complex collective caretakers, they can reorganize themselves.

Jakob Feinig: And can you maybe say, two or three words about what that would look like concretely? Maybe give listeners an example of how the lives of people on the campuses, but also beyond would change were we to introduce Unis?

Benjamin Wilson: So when I read Baldwin’s book, I was really excited. Because when I read it, I see it through a chartist/MMT lens. One of the things that I’ve been wrestling with or thinking about in terms of the long legacy of the Land Grant Institution and the University, in particular, is its 501(c)(3) status. They were given all this property in all these communities and very decentralized ways across the United States.

Scott Ferguson: Stolen from Native Americans. 

Benjamin Wilson: Yes, thank you. 

Universities don’t pay any residential property tax. One of the ways that I’ve been thinking about how to diversify the circuit of the Uni: The initial idea was that the Unis would be spent into existence and people could use the Unis to satisfy their tuition liability. And that would be the reciprocal circuit. And, like my classroom currency, that runs into some limitations as students are graduating–they have no use for it any longer. How much labor and resources are you really going to be able to utilize with this limited space for reciprocation? It also may or may not do much to change the tuition model. In order to diversify the circuit, one of the things that I’ve imagined is that the University, instead of paying zero property taxes in their local communities, would pay some portion of those property taxes directly to their host communities–in Unis. And if the city is willing to accept the Uni in property taxes from the University, then they would be willing to accept it from anyone. 

In Ithaca, where I live, Cornell University is by far the largest landowner. They pay zero property taxes, and they give an annual gift of $1.2 or $1.3 million to the city. A couple of years ago, a group did a study of just how much property taxes Cornell would pay if they paid the full amount. In the interview, the then-mayor Svante Myrick said if Cornell paid their entire property tax bill, the property taxes for the other Ithaca residents could be cut in half. That’s an enormous amount of value that would be made available. So if you think about cutting your property taxes in half and thinking about the cost of homes and housing, this is an opportunity to really transform what that looks like. 

Davarian Baldwin’s book points out are all these spaces where universities use not only their property and their tax exempt status, but they use it in such a way that they’re supporting the balance sheets of corporate partners, either new research in pharmaceuticals, or, in Arizona, to create new mixed-use residential properties that also contribute to the university objective of connecting with community, and maybe there’s some classrooms there. But at the end of the day, the [universities’] corporate partner gets financing because the bank is confident that they’re going to be able to generate enough revenues because they won’t be paying the full tax liabilities on those commercial properties. So we’re already booking that tax-exempt status as future wealth, just in a very narrow way, where we could be issuing the currency to book future creation of, say, carbon sequestration or diversified farming systems that better connect people to local foods, or training large groups of people to help students with reading disabilities in middle schools. 

There’s a significant amount of work that’s not being done to address the problems we have. And the reason why we’re not doing that is because we can’t find the money to do it, when the money is really sitting right in front of us: as a design problem. And we can’t see the ways to design an experiment in those spaces, because we’re spending so much time trying to book future earnings and revenues that are just turning the money into more money instead of turning it into meaningful goods and expanded capacity for communities.

Scott Ferguson: I think there’s not one answer to that question, as I think Ben’s answers are beginning to suggest. A Uni, a Uni project, a Uni system–from the classroom to the federal government–can transform relations all the way up and down and back and forth. So you know, we can talk about Unis administering Green New Deals in cities and counties. We can talk about community, staff and faculty governance, we can talk about participatory budgeting. And all of these possibilities, of course, are available to be thought, to be fought for, to be theorized, to be developed. But I would argue that when they are all brought together in a project that is not zero-sum, and that is not oriented around finding the money, they all take on a new kind of capacity. 

This doesn’t prevent neoliberal governance practices, nasty administrators and university leaders with nasty politics, it doesn’t prevent any of any of that from continuing to do what it does. But that nastiness is usually justified by not only the naturalized austerity, but the naturalized necessity to find revenue such that even the critics of that nastiness can’t see beyond that horizon. It would open up these opportunities for contestation. And the old excuses will not no longer resonate in the same way they do now, and have for years and years.

Jakob Feinig: Those are great answers, thank you–I’m really starting to get a sense of the breadth and potential of the Uni project.

Scott Ferguson: When we first began the project, as I think Ben might have referenced previously, this was the beginning of the pandemic, and the Fed, unlike Congress, was willing, at least at first, to really act boldly and to experiment. They opened up their balance sheets and created all kinds of new facilities and new ways of responding to the financial crisis. Now, there’s much to be critiqued in how they did that, and how some of those programs ultimately played out. But in 2020 and into 2021, the Fed became a site of such bold paradigm-breaking that it became a site of politicization. So at first, we’re thinking, well, we can recommend for university communities, activist organizers, and intrepid faculty and leaders to lead a movement to issue their own currencies and then demand, or ask, or dare, the Fed to backstop the liquidity of those currencies, using a new facility they had opened up, the Municipal Liquidity Facility (MLF) that was mostly for municipal bonds. Ultimately, the way that was designed was terrible. And the way it was administered was terrible, because it was ultimately just about so-called propping up the confidence of the bond market. They didn’t actually really want to purchase any of those. They just wanted to show that they were ready to purchase them so that the bond investors would feel comfortable enough to invest more. Anyway, that situation called for an intervention, we thought. 

In the meantime, we’ve turned our attention to another intrepid thing that has happened at the federal level: the drafting of the Public Banking Act, which some of our friends helped to draft. The Public Banking Act is what it sounds like: It has not gone to vote, but it is an act that is designed to explore, support, and create a system of public banks in the United States. And it provides all kinds of support for doing so. 

Our reading of the Public Banking Act is: It’s worded in such a way that universities could count as nonprofit organizations that would fall under the Public Banking Act, they could be given what we call the finance franchise, the capacity, the legal ability to issue credit on behalf of the US government. We also argue in our forthcoming piece that we might want to work for an amendment to the Public Banking Act, just to make it clear, just to stipulate that universities are included, rather than arguing about the given language, maybe before it’s put to vote. In any case, we now see it as part of a potential public banking fight that would frame the Uni in this broader conversation about who has the finance franchise in the United States. 

That’s how some of our thoughts about the projects have shifted over time: We have moved from politicizing this emergency facility at the Fed as a kind of lender or purchaser of last resort to a more active provisioning as part of public banking at the federal level. Not to say that that’s the only path: We talk about “bottom-up” and “top-down” always having to work in tandem and speaking to one another. But that’s the federal path that we’re seeing right now.

Benjamin Wilson: I think that that’s a really good point. What does a public bank look like? How does a public bank operate? How does it make decisions? What is it investing in? The language around the bill is pretty vague. AOC says that it’s an opportunity to ameliorate systemic crises. What specifically does that look like? And these are the questions that also come up when we talk about the Green New Deal and a Job Guarantee, what are people going to do? What are these interventions? How does this impact my daily life? And I really see universities as being a great place for experimenting and imagining what that looks like. 

I think lots of people have a really nice idea of what public banking looks like at the retail level, through the post office, for example. But what does the investment arm of a public banking sector look like? How does it operate? How does it assess the quality of the financial instruments and what it is that it’s executing? What are the returns that we’re getting? David Freund’s work in particular really has been inspirational for me here. The United States really reformatted the housing sector after World War II to greatly enhance the availability of mortgages and extend the timeframe for repayment. In that process, they had to really reinvent and create an entirely new sector of appraisal and thinking about who’s going to make these decisions where organizations are licensed and accredited to establish that a house is worth X amount of dollars. 

This is what we need to be doing and thinking about. This is an intervention into climate change that is going to relieve us of so much carbon output and sequester so much carbon, and these are the impacts that we’re predicting and forecasting will occur. Very much a grant model of understanding impact and outcomes and whether or not we’re really reaching success in our projects, I think it is a space where universities are really well suited to start building that sort of infrastructure and a learning-by-doing, ground-up approach to these problems.

The language in the bill, both in the Public Banking Act and in the E-Cash Act, outline that we need participation and experimentation to ensure that we’re creating secure, privacy-respecting and inclusive monetary systems that are, in fact, functional and operating. I would much rather us experiment with these technologies at small scales in different communities and being able to share successes and failures in an open and honest way, than, say the monetarist experiment from the 1980s (that we seem to be pretty intent on reliving) to quell price overheating with a recession. That doesn’t seem to be the way that we should be experimenting with monetary theory, it should be done in much more controlled and smaller spaces so that we can reduce the ill effects and the devastation in real lives that that type of macro-monetary experimentation entails.

Scott Ferguson: What I’m hearing you say and I want to develop is: This really rethinks what banking is and what it can be. We are saying: Extend credit creation functions that have been relegated to a private banking system to universities. But we don’t stop there and what we’re up to really unsettles what a bank even is, or could be. 

One of the threads I want to pick up here is: We have this sense that investment and production gets separated through this private banking system–that the banks have the money, and they decide who gets it, which firms are going to get it and are going to do the production. There’s a division of labor there now, is it in fact, actually much more complicated and, and entangled? Of course, it is. But I think we have this idea that there is this separation, whereas universities are productive centers, in addition to investment centers. And I think universities–as problematic as they can be–being the hubs of cities, of counties. of communities, and imbricated in them, much better situates them for doing the investing, rather than the investing being something that we’re farming out to Chase or other Wall Street banks.

Benjamin Wilson: Community banking is effective, and a good way of running small businesses. You know, the disconnect in the mortgage industry, where you can get a mortgage on your phone–that doesn’t do much for “know-your-customer.” And when they immediately sell off your mortgage and 100 others in one fell swoop. They have no incentive to see that those are paid back in a timely or meaningful manner. The creation of the investment products or systems, the public provisioning that I envision is an interdisciplinary, transdisciplinary connection of the people that are living and doing the work. 

One of the projects that my classroom Uni is helping to finance or mobilize the resources for is an edible park. That is going to be a public space where people will reconnect with nature that is celebrating indigenous culture and past of the area with the revival of plants that have been exterminated by weed killers and things of this nature, that have strong medicinal [properties] and flavors that we’ve forgotten about that previous cultures really understood as a meaningful connection to nature. This re-embedding of the connections between people and ideas, the environment, all start to melt away all the ways in which higher education has been morphed into our different silos where we’re all our specialists, and we’re all competing over scarce resources. And that would really give us an opportunity to branch out and to collaborate across the university with other nonprofit actors in our communities. 

The SUNY system is a 64-campus institution across the state of New York. There’s really not a community that isn’t within easy driving distance of one of these spaces. So we’re talking about projects that would cover the state. And if you start to think about questions of transportation and the movements of students, and people being able to work at multiple SUNYs, then it starts to become a system. (In healthcare, I was always so very frustrated during the time mom was sick that all these doctors–none of them talked to each other, none of their accounting, or their charts, or any of that stuff was connected in any meaningful way. It was just, they all happened to be marketed with the same hospital system). 

[Similarly, in the case of] SUNY, I feel like in our competition across our campuses, for students, and scarce resources and things like that, we’re not leveraging the full power of what it would be to be coordinated and collaborating, and tackling the problems that the state of New York so desperately needs to be addressed.

Scott Ferguson: And we can run small programs and justify them as small programs, rather than in the credit creation model, rather than putting these programs on the chopping block, because oh, well, you know, demand is down. And so they’re not bringing in revenue. And so why even have them? If you’re not chasing scarce dollars, you can proliferate little experiments here and there.

Benjamin Wilson: It changes all of our research questions, fundamentally.

Jakob Feinig: It also changes how people think about money. Just to go back to that, because when you say, the doctors are separated from the accountants and we come to experience ourselves as passive victims of a monetary system that’s out of reach, it’s outside of our lives. And that contaminates the university or makes it work in ways that we don’t like. And I think what I hear you say is that, if money creation and the other things that we do are no longer seen as separate, we experience them as intertwined and inseparable, necessarily going hand in hand, then that becomes a very large-scale classroom for reimagining society in the sense that it’s always something that is in the process of being coordinated. We are the ones who can do that.

Benjamin Wilson: I’ve always seen it as a little bit arbitrary that we go to college from 18 to 22. I think there’s a lot of Americans in the later stages of life that would really benefit from having access to coursework and education and re-engaging in new literatures. Part of the reason I think we’re in so much trouble economically is that you can see when a politician is talking about the economy, the scissors moving in their head from their Econ 101 class 40 years ago, and the textbook hasn’t changed. And that robotic understanding of how things operate is detrimental. The university [could become] this lifelong learning social fabric, where any and all age groups, or people that have been to college before, would just enrich the experience in ways that are fun to imagine.

Scott Ferguson: We can reintroduce open enrollment, we can have multiple kinds of programs that differentiate the traditional four-year degree.

Benjamin Wilson: Which in some ways, they’re already trying to do with all these certification programs and your news types of master’s programs, but they’re all structured in a way to generate revenue. You go to a master’s program, you’re not going to get funding to be a TA. Lots of colleges love big masters programs so they can break in that revenue, and maybe get a TA in the process. 

So we don’t have to do that anymore. Students won’t have to, for example, spend their whole summers working as free laborers for a corporation because they have to get an internship in order to get a job at that particular institution when they graduate. We will be affording them learning by doing, real world experience throughout the year that will help supplement both the costs of their day-to-day life and their education, so that they don’t have to leave the university straddled with massive amounts of debt.

Scott Ferguson: I think another major, maybe theoretical, point is: turning around the causal relationship that is often understood between a university and financing the private sector. I guess the expression to use is: “the tail is wagging the dog.” “The university is just so dependent on the bond investors and their hedge fund and that whole world and all the private contractors, the university, it could do these good things. But you know, really, where’s the power? All the private contractors run everything now.”

Whereas, I think what we want to say is no, it’s very similar to what MMT argues about the federal government, where we imagine that the tail is wagging the dog. The federal government is “always too broke” or “spending too much,” it’s always riding the waves of this force that’s outside of them. So we’re saying, like the federal government, the universities and university systems are at the center of authority and provisioning–they set wage floors, they implement wage ceilings, as (often) the largest employers in cities and in counties. If they raise the wage floor, which actually my university just did a little bit, not enough, but they’re bumping everybody up to $15/hour. That tremendously affects other wage ratios in the rest of the city and surrounding areas. 

The university has to fess up to its power and fess up to its capacities, and fess up to its causal centrality for us. That’s another thing the Uni Project does, and that’s part of the pedagogy.

Jakob Feinig: That is very different from other types of community currencies. Maybe, since you live in Ithaca, Ben, could you maybe say two words about the difference between the Uni and previous experiments?

Benjamin Wilson: I think the community/complementary currency literature and experiments are modeled not on the MMT framework, but on the fictional narrative of the barter economy–if we add more currency into the system, we’ll facilitate the exchange of goods and services. Very much like Bitcoin, it can be this decentralized thing that circulates and solves these problems. And what’s fundamentally different here for us, is: we’re trying to downsize the idea of MMT to local communities. How do we leverage the knowledge of a tax-driven circuit, at smaller scales, such that the tax-driven circuit is even maybe too obligatory, too coercive. Maybe the threat of incarceration for not paying your taxes is not necessary. How do we structure reciprocal obligations so that it allows a currency to continue to circulate while also highlighting the fact that money is a collective endeavor? That is a public instrument that should be designed and created through public discourse in a way that it’s just not in our society. 

And I think that that’s one of the really beautiful things in your book Jakob, and I’m curious in your studies of moral economies and money in these colonial systems, were there similar experiences in these communities that brought people together to question money? What was the catalyst to say, “Hey, we can do this in a better way, let’s start organizing our tobacco as a form of reciprocal payment” –maybe you can speak a little bit to that. 

Jakob Feinig: I think in many periods of US history, it was clear to quite a few money users that there are different levels of money and different levels of money creation and that municipalities or states or individual provinces can create acceptability. This [the uni] is, in a sense, reconnecting with earlier (in many respects, deeply problematic, but still real) monetary systems, where colonists had this experience of paying taxes either in kind or in labor or–which was their preferred way–in bills of credit. When the provincial government of Massachusetts was longer allowed to issue bills of credit, [they said] we’ll just do it at a local level. And maybe five or ten towns decided to accept that in payment of taxes. So they started knowing that that could work. 

It also worked in eighteenth-century New York City, when they created water works, just before the War of Independence. They put together what was then a high-tech water system by issuing municipal bills of credit–by issuing municipal money that worked only because the university, I mean, the municipality, accepted it in payment of taxes. All those different levels of acceptability and of organizing collective life were, I think, a lot more visible. 

And I think what the two of you talk about is structurally similar, in the sense that different levels of society become more legible. As you understand what’s going on in the classroom, you understand the federal government better. If you already have the MMT understanding of the federal government, then Unis will be more plausible. There is no reason for not multiplying those layers and exploring possibilities for democratization and inclusion, at all those different levels. And if one of the levels fails, maybe the other one is ready to jump in, maybe if one level cannot provision people, then we have something else to fall back on. There is no longer this monoculture of just one possible source of money.

Scott Ferguson: That’s really great. And I think it gets at another way in which what we’re up to is different from certain traditions of complementary currency. I don’t want to say all of them, but certain traditions. The instrument is called complementary because it’s not the main currency, but it’s one that is situated seemingly on the outside. So there’s an inside/outside on a spatial, cognitive map. And the outside, it’s precarious, it’s only as good as people are willing to barter with it on an individual level. I think it has an evil twin, which is the company script model. The company town that gets workers into debt, and makes it so that they get paid in their own currency and can only use that currency at the company’s stores and buying company newspapers, we’re all familiar with that. 

But all the good and evil versions of that inside/outside model are being challenged here with our Uni project. Because yes, like the histories that Jakob has studied, that doesn’t exhaust what is actually going on. And that there isn’t just one currency. Even the US dollar is a heterogeneous hierarchy of multiple instruments. We have dollars that are created by fiscal appropriation, we have dollars that are created in the Federal Reserve System. And then we have all kinds of dollars that are created in our wild, digital financial system and shadow banks and things like that. 

And yet we call most of those things the dollar even though they’re a heterogeneous collection of institutions that have different design models–the fiscal appropriation model is not the same design model as the Federal Reserve system model. So I think when we were first working on this project, we got some negative feedback that suggested: Oh, well, this is weak, it’s like a complementary currency or worse, it’s evil, like company script, but either way, it’s outside the dollar. 

And we want to be helping people, and we want to really be giving them the dollar. I think one way of answering this is to say: Not only is the dollar this heterogeneous hierarchy of contested designs and claims, but I wouldn’t necessarily even say that the Uni isn’t the dollar. We could say it’s a mode of the dollar. It’s one iteration of the dollar in the dollar system. Now, if it’s just Unis in one of our classrooms, it has a limited function in the dollar system, in a similar sense that Starbucks gift cards are denominated in dollars. A “$5 gift card,” right? But they have limited receivability, they have a limited circulation power. So this to me, is how we’re conceiving the Uni and trying to get out of this inside outside weak strong way of thinking about currency creation and currency circulation.

Jakob Feinig: That’s really excellent. To see it not as complimentary, as outside, but as part of a hierarchy. I do have another question: The people who told you you’re trying to reintroduce company script, they might have thought about something that I was also thinking about, which is, who has to accept Unis? When probably in any local setting, most people would still prefer the dollar or some people might still prefer the dollars because I have a hard time seeing faculty and staff overnight switching to “tomorrow I’ll accept 80% of my salary in Unis.” How would that work?

Scott Ferguson: I think there’s multiple ways of answering this. One is at the level of language and packaging. So like I said, you can buy a $20 Starbucks gift card, and you have 20 American dollars in Starbucks gift cards, and I think rhetorically I would want to pursue a similar strategy that you have. Here’s an amount of $200 of Unis–rather than rhetorically making sense of the Uni as it’s just its own weird thing.

Jakob Feinig: Perfect. Okay, that’s exactly what I needed to understand it because it’s like, I have $500 in my bank account, right? That’s not the same thing as Federal Reserve notes, it’s lower in the hierarchy. And yet I’m convinced I have $200 and no one will dispute that I do have $200. 

I love the way you put it, and it really makes me understand that I was still thinking of the Unis as complementary, when in fact they’re not complementary. It’s one way of implementing credit money creation within the dollar system. For me, it was very tempting to think of it as complementary, but actually, no, it’s not. You know, it’s $20, period. So I really thank you for that– I really needed that!

Benjamin Wilson: And I think when you start to think about the gift card and all the other ways that we change our US dollars into less receivable instruments, it starts to make it seem a lot less weird. Especially when it comes to paying for higher education. I’ve got special savings accounts for my children. I can’t use any of that money, but it’s still US dollars. It’s US dollars that can really only be used to pay for higher education by me without being taxed, but that money has been sent to Wall Street and hedge funds to grow. 

That is buffering and creating another stream of revenue that is outside of the university system. It seems a little strange to me that we invest in sending our kids to college, in places that aren’t directly improving the places we want to send our kids to get educated. Why aren’t our savings accounts expanding the resources and educational opportunities in these places? The Uni could be that instrument. You don’t have to save for college in Wall Street funds, you can save for college in Uni funds, and you can design those in all sorts of different ways. 

So from the classroom to the Public Banking Act, these are all just part of peeling away the layers of an onion that has been decades in the making: This revenue-driven higher education model. And there’s just so many places where things could be done differently, that I think do a better job of organizing public provisioning to do the things that we really want it to do, from the university mission statement to questions about what education is as a public good, to the provisioning and creation of all of our public goods from healthcare to public spaces, our parks and where we recreate, I am also thinking from the perspective of an urban planner and designer. The amount of possible reductions in heart disease from having adequate shade in your community and things of this nature, allow us to plant trees and do things that are nice for people that right now just seem unaffordable, or undoable.

Scott Ferguson: And we don’t have to outsource to for-profit corporations, we can build up provisioning capacities within the university, as we are learning from, collaborating with, listening to, and partnering with communities that have been policed and not served, and are being displaced by for-profit university administration.

Jakob Feinig: We could start in-sourcing stuff like food production, or provisioning or kitchens, or all kinds of things.

Scott Ferguson: Simple examples from my own life: On the campus at UC Berkeley that I was at, which has its problems, there were several food establishments that had been there for a long time and were local businesses, and were a part of the community. The campus that I’ve worked at for the last decade plus, it’s all Subways and Chick-fil-As. Of course, all of it is actually Aramark, the firm that is licensing all the logos and the food supply chains and all the stuff for these subcontracted workers to come in and do the work. We could rethink that if we’re owning up to our authority and responsibility as community provisioners.

Another part of this project that I want to flag is, yes, it’s a proposal, and it’s an evolving proposal. But it’s also what I’ve come to call a “problem space” that invites participation. So what we’re offering is not “the Uni–one thing” and that’s going to be the solution, but rather an ongoing participation in a paradigm that opens up new questions, new fights, new possibilities, new responsibilities.

Benjamin Wilson: That’s what we’re in now. Neoliberal austerity didn’t just explode on the scene, right? It’s been a slowly evolving thing, closing off more and more possibilities for decades.

Scott Ferguson: While opening up all kinds of private and precarious ones.

Benjamin Wilson: Absolutely–I love the idea that it’s a problem space, it’s an open invitation. I think the conversation that Erica and Will had was dead on and thinking about debt as this unifying rallying call. This calls into question university debt, it calls into question student debt, it calls into question public debt at large, and we can experiment with really new ways that are nowhere near as limiting as what we’re currently facing.

Scott Ferguson: We should mention that we have the goal of making higher-ed free again. In the problem space of the Uni that is contingent upon what level of receivability any given Unique project is working at. If we have a Uni based on the Public Banking Act, then that is probably the most capacious, authoritative and powerful Uni that we can have as long as it is participatory all the way down. And in that case, we can absolutely not only abolish all student debt, but also all tuition and fees. If we’re talking about local experimentation in a classroom or a program, or even just one university, then we have to move more slowly toward reducing tuition. We have big dreams and a big goal. But achieving that goal is going to have to be connected to which part of the fight or which part of the build-out are we investing in at any given time.

Benjamin Wilson: And the more people that participate in various ways, either through advocacy, at federal and state-level policy-making, to sharing successes that they’re having in these classrooms, the more evidence, the more power, the more buy-in, the more people get involved in, the better the process will be, the more informed, the better trained people will be to be the administrators of a Public Banking Act. It’s not going to be an easy job, just like being the head underwriter for Bank of America isn’t an easy job. But it’s a better job, I would argue.

Scott Ferguson: Less so in the humanities, but primarily in the sciences and social sciences, we have big grants, and then big initiatives and research programs and labs that are granting and provisioning and keeping track and doing that already. I want to get to the point where we’re not simply defending this proposal for the Uni. I want to get to the point where other people are teaching us about what the Uni is and what it can be. That’s where I want to get.

Benjamin Wilson: That would be magic. That would be phenomenal.

Scott Ferguson: And it’s a big hurdle, because it’s a very different way of imagining. It’s a different emotional relationship to the world. It requires a different emotional stance.

Benjamin Wilson: It’s hard to be optimistic sometimes. But this would make that a lot easier and end the “you’re alone” narrative and all that stuff.

Jakob Feinig: How do you make the switch of thinking of yourself as a money issuer?

Benjamin Wilson: Well, doing it helped! Creating “Benjamins” [Wilson’s classroom currency] and I talked to touch base with Michael at EnergyWeb and said that I’m presenting it again, hoping to recruit more faculty to join me at Cortland. And he was like, yeah, the more the merrier, scale is not a problem for us. Like, if you’ve got people at other universities that want to use the system, we can get to work on trying to think through all the different technological dynamics of allowing your currencies to be measured and understood and how many are circulating and how much of the tax liabilities are being extinguished. And all that stuff on like a very large scale, which is super exciting. 

Jakob Feinig: I have mine right now on paper. Students named them “Googly Shallaghs.”

Scott Ferguson: I think too, there’s a double move, which is inviting people and teaching them about how this could work: How you can be a currency issuer and provisioner in your classroom or in a larger program or working with community outreach organizations on your campus and things like that. But there’s also the flip of the switch, which is just a mental one. Which is coming to realize that, if we’re talking about instructors, you’re already doing it, you already are in a system of credits. And you have students who work for credits. And you assess those, you assess their performance, through, usually, grades. Not everybody does that. But my campus does that. And those grades are receivable as part of the university system, right? That leads to a diploma but also when you graduate, and when and when you leverage your degree toward a job or toward another degree. Those grades might matter and be receivable and valuable for different reasons. So we’re already doing it. We just think that we’ve just so naturalized it that we don’t know that we’re doing it.

Jakob Feinig: And when you do it for the first time, it’s like the similar shift from just being a receiver of grades to all of a sudden–the creator of grades.

Scott Ferguson: That’s true, that’s true.

Jakob Feinig: And I hated it. And I still hate it.

Scott Ferguson: You feel this responsibility. Yeah, absolutely.

Jakob Feinig: But this is not something I would hate. It’s different. It’s a different kind of credit. I hate issuing those credits, but I don’t have to hate it. I mean, I don’t think I would hate issuing Unis, that’s different.

Scott Ferguson: I mean, whether they’re like traditional grades, like A, B, C, D. I mean, we could imagine all kinds of different evaluative modes. I mean, they can be just qualitative or whatever. But I think you would feel less bad about that if it wasn’t in the context of an austere punitive cutthroat system where there’s not enough to go around. Different people have different views on grading, but we might not feel as bad even using traditional grades when lower grades don’t mean abjection.

Benjamin Wilson: If you’re known as a hard grader, students will still take your class, because they know they’re getting a really good education rather than avoiding it just because they can’t take that risk in their GPA. It’s amazing. People definitely avoid my classes, because I have a reputation of being hard.

Benjamin Wilson: But I’m not.

Scott Ferguson: So you say. 

Benjamin Wilson: I’m really just a snuggly teddy bear. My mission post-sabbatical, this next phase of my career, is to soften that a little bit. I think part of that is just being new and not wanting to be taken advantage of, knowing that you’re doing it right, and not letting people slack off. I think it’s just part of the mindset, maybe. But I’m not nearly as scared of that anymore. 

I really see education as an opt-in. Some students are going to opt out, and that’s okay. And I’ll do my best to keep you there. But if you’re not opting in, then I’m going to continue to focus on those that are really buying in and ready to take it on. I think the Uni gives us the freedom to do that too. You don’t have to issue Uni to a student that’s not doing the work, just like in the Jobs Guarantee.

Scott Ferguson: The Uni can be a part of the Job Guarantee. I co-authored a piece with William Saas a year or two ago that was published in the journal Liminalities. I will give credit where credit is due: This was Billy Saas’ idea that I supported and co-wrote with him, but this was very much his idea. He came to me with this idea for a Green New Deal-driven and university-focused academic job guarantee which would leverage federal funds to extend security and benefits equivalent to tenure to all workers on public college and university campuses. 

We call this the SBET or SBET: Security and benefits equivalent to tenure, where essentially termination has to be for cause rather than at will. Coupled with a robust unionization effort and legislation, this would make worker power much, much greater. And it would create a collective safety net for expanding not just worker power but the provisioning powers of the Uni currency project.

Jakob F: Wow, I have to read that!

Scott Ferguson: The title of the paper is “Performative Public Finance for Higher Education, Academic Labor and the Green New Deal.” 

Jakob Feinig: I want to read it right away. I wanted to ask maybe as a last question, how do you see the project unfolding in the next years and months? What do you think the next steps should be?

Benjamin Wilson: First, I hope that this discussion, and the piece in Academe magazine, sparks larger discussions. And really the Uni project is something that is evolving and changing and it’s not really this, you have to do X or Y in order to be involved, but really be open to any sort of suggestions or ideas and participation. For me, the next iteration of the Uni is going to take place in my urban class–I am hoping to build an edible park. I’m hoping to expand it up into the Adirondacks where I’m working with some great community folks to ameliorate food security, clean water, and access to health care. 

I’m hoping that as more people get involved, either on my campus or across SUNY campuses, or from other places, we start putting together a database of all the beautiful things that we’re getting done by mobilizing student work, and the production of public goods in all different fields, from public art spaces to food systems to in-stream habitat interventions. Whatever you think is a way of ameliorating the climate crisis or social inequities, I would be super excited to collaborate and hear more. And at the other end, hopefully folks will start advocating for the Public Banking Act and writing letters for state level policies for public banks, the Job Guarantee, the Green New Deal, the E-Cash Act, all these amazing federal legislative projects that would all contribute to moving beyond the austerity model that we’re living in today.

Scott Ferguson: And just to close, we’re also imagining this as an alternative to a lot of the frantic and excited activity around blockchain and other forms that bill themselves as private currencies, from crypto to NFT’s and this kind of thing that have proven to be insecure and volatile, and certainly not serving public purposes. And even after all of these market crashes, companies like Facebook or Meta are still investing millions if not billions of dollars in propping up a vision of the future in which these private monies are supposed to play a central role. 

The notion that people can start participating in money creation is actually everywhere. It’s in headlines. It’s on social media. It’s just that that’s such a terrible model. It’s such a horrible model. But if we can harness some of that energy toward public purpose, then we’re talking. 

I think with that, we can end. Thanks so much for joining me for this great conversation, Ben and Jakob.

Benjamin Wilson: That was so much fun! Thanks for organizing. 

Jakob Feinig: Thank you!

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mercedes Ohlen (transcription), & Meghan Saas (graphic art)

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2 thoughts on “Democratizing University Finance

  1. […] We’re joined by Jennifer Mittelstadt (@MittelstadtJen), professor of history at Rutgers University, to discuss her involvement with Scholars for a New Deal for Higher Education. We speak with Mittelstadt about how Scholars for a New Deal for Higher Education is organizing to address the most pressing threats to US public higher education today, as well as about how her own scholarship on publicly-provisioned welfare systems in the United States shapes her political organizing and advocacy. We also consider the role of Modern Monetary Theory in the struggle to democratize university finance, including Money on the Left’s controversial proposal for a federally backed university currency called the “uni.”  […]

  2. […] We’re joined by Jennifer Mittelstadt (@MittelstadtJen), professor of history at Rutgers University, to discuss her involvement with Scholars for a New Deal for Higher Education. We speak with Mittelstadt about how Scholars for a New Deal for Higher Education is organizing to address the most pressing threats to US public higher education today, as well as about how her own scholarship on publicly-provisioned welfare systems in the United States shapes her political organizing and advocacy. We also consider the role of Modern Monetary Theory in the struggle to democratize university finance, including Money on the Left’s controversial proposal for a federally backed university currency called the “uni.” […]

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