Automating Eden (Essay)

by Geoff Coventry

[Note for readers: This article contains spoilers]

Shawn Levy’s Free Guy is the latest cinematic attempt to manage social problems through self-conscious artificial intelligence (AI). In doing so, it tumbles right back into fanciful utopian imagery while wishing away the complexities of human care. As this virtual redemption story reaches its climax, the AI-created world resembles a moneyless and bodiless bliss where only the nice get to stay, and no one needs to be responsible for social provisioning. In the parallel reality of planet earth, humanity cheers the downfall of a greedy capitalist while simultaneously looking to a new generation of Silicon Valley heroes and the market-economy to produce a better future within the exact same institutional structures that gave rise to the story’s existential crisis. Rather than imagining the boundless ways AI could support human and planetary care while challenging the zero-sum economics that fuel greed and violence, Free Guy tries to charm its way to hope within the logics and institutions of zero-sum austerity.

Free Guy casts the endearing Ryan Reynolds as a non-player character (NPC) in a video game whose two genius creators (Jodie Comer as Millie and Joe Keery as Keys) originally set out to design a virtual world called Life Itself, where characters would “naturally evolve” in a “real life” environment. The title Life Itself grants an immanence to the game platform that obscures the wider mediation of the virtual world by a whole team of employed staff within a corporation, positing their creation of virtual “life” as a self-standing, self-contained environment, where good things can blossom if only left to itself.

Tragically for the duo, their core artificial intelligence source code was stolen by Antwan (New Zealand actor Taika Waititi), the CEO of game developer Soonami, who uses it to power a violent massively multiplayer online game in the genre of Grand Theft Auto. Soonami portends an unstoppable wave of capitalistic destruction. In doing so, the filmmakers ignore the legal and public mediation that created and continues to support the system being critiqued, refusing any alternative that could restructure markets and the public sphere into a mutually regenerating force. Although deterministically coded as a zero-sum game, the “platform itself” is actually subject to powerful non zero-sum influences, both positive and negative: Millie entering the game to find the lost code and helping Guy “come alive”; Keys coding game enhancements; Antwan rebooting the game and destroying its servers. In reality, both the virtual and non-virtual worlds are locked in a co-dependency and co-determination that is never fully acknowledged, let alone explored for its possibilities. 

As the young AI creators battle to prove the theft of their source code, NPC Guy begins to “come alive,” gaining self-awareness and deviating from his routine as the friendliest bank teller you’ll never meet. Initially programmed to be the handsome nice guy in town who can’t find true love, Guy begins to look for more meaning in life and to participate in the game as the good hero who stops violent criminals and saves his NPC friends. Discovering that their code may have just created the world’s first real artificial intelligence, Millie and Keys must now save Guy and the other NPCs from destruction at the hands of a ruthless capitalist who would rather see everything destroyed than face financial loss and diminution of his ego. Hollywood remains entrenched in the formula of larger-than-life heroic individuals responding to, but never truly reforming, societal and existential threats, providing the conditions for rinse-and-repeat series. This may make entertaining and profitable cinema, but when seeking to take flight as an aspirational future for human potential, it can’t break free from the gravitational pull of its predetermined economic and relational limits.

As the movie reaches its climax, Guy, with the help of Millie and Keys, reaches the original Edenic island world of Life Itself, a garden-city paradise explicitly defined by the absence of banks, jobs and guns, where he is eventually reunited with all his friends. In this new world, and now evolved from their programmed roleplay of menial work and innocent victims of violence, the NPCs are free to “do whatever they want”. No “bad” characters enter this world from outside. Only the nice remain; however, neither do they need to do any work of caring for the world they inhabit or the people they share it with. Life Itself closely resembles a common Christian conception of “heaven” more than anything that might shed light on the real world inhabited by humans: its selectively-limited inhabitants magically “perfected” while the masses of less-than-perfect humanity are kept away. This perfected AI platform codes its idealized life  much like racialized urban planners coded white suburbs: by defining-away most of humanity and ignoring environmental interdependencies.

And herein lies the problem. The hope for a better world as modeled by an innocent artificial intelligence leading us back to Eden fails before it starts. Such a binary worldview filled with coded outcomes has no bearing on reality and ergo provides no guidance for humanity’s struggles and no inspiration for its potential.

Similar to how nostalgia is a killer of truth, niceness is a killer of care. Niceness is an individualistic construct that renders unnecessary the challenging choices needed to reorganize society in ways that provide mutual care. Niceness inverts care’s others-focused accounting structure into transactions of feel-good self interest; each smile, wave or act of kindness recorded to the social credit of the “good” person. Nowhere is this more encapsulated than during a Christmas holiday, where, for a few days, those with means placate the subconscious trauma of participation in a zero-sum game by mutual gift giving and token charity, only to return Monday morning to the brutalization demanded by winning the game. Care in the real world rejects scarcity and exclusion, wrapping all into interdependent, unending, difficult, and imperfect relationships of service. The logic of care is universally inclusive since all are simultaneously providers and recipients. No one is altogether nice or irredeemably bad. Relational, not transactional, care’s accounting seeks to explore the unknown and unmet needs within and beyond every community. The society-wide capacity to care remains unbounded by exclusionary categorizations of people (or other life forms), refusing to accept arbitrary limits of affordability and existing resource availability. When seen in this light, Hollywood’s Guy is the dreamy nice dude who saves the day only because this AI Guy is really not at all like a human nor lives in a human-like world.

Free Guy wants us to believe the world can be changed by nice artificial intelligence produced by nice human intelligence, even as it wishes away the need for any deliberate collective work to bring about structural changes to social, political and economic systems. Niceness is self-centered, privileged, and ultimately protected by violence in order to pretend the “nice” can avoid problematic intrusions into their perception of bliss. Violence in the service of niceness is still violence against other people. Meet the new boss, same as the old boss. 

In contrast, care is a conscious social engagement that seeks out and serves the needs and wants of all within an inclusive community, while recognizing and rewarding the provisioning of care in dignifying ways. Care doesn’t preclude unpleasantries, injustices, and human vices, but dives into the complex and unending work of listening, problem-wrestling, healing and building. Such an inclusive logic of care sees the 22 year old gamer Keith, still living with his mother and venting his anger over frustrated desires, societal rejection, and economic exclusion, as a person deserving of meaningful social and economic participation in the community. The exclusionary logic of Hollywood can only mock the gamer, defining him as a villain to be vanquished from the promised land along with all the other “bad guys”, and relegating him to perpetual torment at home. 

Free Guy seeks to contrast greed and care, yet retains a field of limited agency within a dualistic and simplistic vision of humanity and socio-economic possibilities. The fallen-world dystopia of greedy capitalism foments wanton violence on the city streets where innocent victims are killed and workers are trapped in soul-destroying jobs. Redemption of the virgin innocence of this lost paradise comes when the nice people resist their oppressors. This comes in the form of an organized and unanimous strike from their jobs that lasts just long enough to buy time for the caring geniuses, Millie and Keys, to heroically expose the capitalist greed, remove their control, and finally prevent any more “bad guys” from entering paradise. The NPCs’ only agency is to stick it to the boss and walk off the job, and the only qualification to participate in this society is to be one of the “nice people”. The co-dependence of these interconnected worlds is largely ignored, along with the real work being performed by an army of hidden figures who literally build their houses and streets and keep their lights on.

What is so obviously missing from the bliss-filled ending is that the world Guy and his NPCs inhabit was entirely constructed by the code of the earnest protagonists, whose new creation for innocent NPCs remains dependent upon real people who need to work, eat, live, earn wages, and own companies. In Guy’s new Eden, there is no concept of the need to develop and share their world’s resources in ways that will create a cohesive social order to care for the city and land they inhabit. Nor is there any recognition of their existential predicament: how to maintain the energy, money and labor needed to keep their world online. Their entire existence relies on the continued aspiration and organizational skills of its young “gods” from another dimension and remains as precarious as a power outage or corporate bankruptcy, and yet we are expected to view this heavenly virtual locale and the lack of banks and jobs as a picture of human freedom.

Fast forwarding to the future, we see that Millie and Keys have stepped right back into the same Silicon Valley startup world they were just fighting, running a company, relying on banks, investors, and keeping a hopeful watchful eye on their customer and revenue growth in order to keep the dream alive. The NPC Eden now exists, not as an independent and self-sufficient alien planet, but as a Twitch channel dependent upon entertaining its viewers. The only apparent change from the old regime is in the values of the company leadership. Along with the heavenly bliss of nice AI, Silicon Valley wants to sell us on an evangelical worldview for humankind’s master coders. Government regulators and legislators should leave the smart techies alone to invent the future in their image, just so long as they try to have nice people in charge. Of course, Google’s “Don’t be evil” code of conduct falls far short of preventing ongoing systemic concerns. It is telling that the film has no vision for changes to the status quo. There is no hint of public funds being available to help protect and fund this new AI “life form,” no changes to corporate ownership structure or employment relations, and no public engagement in how best to care for either newborn AI or real world human life to ensure extinction is no longer an imminent risk. 

The neoliberal blockbuster has yet to imagine its way out of the corner of zero sum economics and the resulting combination of violent and exclusionary solutions to the imagined inevitability of greed and exploitation. Dualistic metaphysics still dominate: good and evil; Eden and Dystopia; heaven and hell; Life Itself and Soonami.

Major Hollywood studios and Silicon Valley often struggle in portraying human-like artificial intelligence in part because of their flat and cartoonish portrayals of humankind, societal structures, and economic possibilities. Heroic battles and utopian endings do nothing to suggest a path forward for a sustainable world and care-filled creative societal order. In a real way we humans are the AI we wish to create. If we still haven’t found the imagination to care for humankind (all humankind) and the complex life systems we exist within, we should be skeptical of those claiming to have imagined human-like AI and a path to a heavenly future. Until we develop the right framework for human flourishing, our dreams of an Edenic AI future will only serve to immerse our imaginations in an entertainment-induced trance that prevents us from fully seeing and caring for all.

Chaplin’s Modern Times: Pretty Pro-Communist (Essay)

How awful the thought of oneness… One merging into all and all merging into one. Just think of merging into Herbert Hoover.

-Charlie Chaplin

In 1952, facing harassment from J. Edgar Hoover’s FBI, Charlie Chaplin left the United States and moved to Switzerland. Chaplin shared personal tragedy with thousands of suspected communists across American society, swept up in the blacklists and persecutions of the McCarthy era. Perhaps more so than many of the “subversives” whose nonidentity with white middle class culture earned them the communist label, Chaplin’s social criticism really did take on the monopoly capitalism of his day. It’s not difficult to read Marxist themes into Chaplin’s slapstick depictions of Taylorism and “scientific management” in Modern Times (1936). But to honor the creativity of Chaplin, it is important not to conflate his respectful willingness to think alongside Marxist problems with a dogmatic commitment to thinking exclusively within them. 

Charlie Chaplin’s Modern Times is an ambiguous meditation on the political economy of his day. Though Modern Times speaks most recognizably through a Marxist lens, it gestures beyond Marx in its ambivalent depictions of the social roles played simultaneously by various institutions. While Chaplin’s “Tramp” is dehumanized by the factory’s reduction of his individuality to an appendage of private profit, his work advances the narrative in ways that outstrip profit.

At points, Modern Times does feel like a dramatization of Marx’s descriptions of capitalist industry in the Communist Manifesto. In the first part of the Manifesto, Marx writes that the modern factory worker “becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him.” Marx describes this enslavement of men to machines as “alienation,” in the sense that their labor becomes directed towards alien ends rather than their own. Chaplin portrays this zero-sum formulation to comic effect in the opening factory sequences, in which The Tramp disastrously switches his attention back and forth between the assembly line and his coworkers, losing track of both.

However, this Marxist formulation is complicated and undermined at the level of narrative. Even as this opening scene manifestly depicts a contradiction between The Tramp’s labor and attention serving his own ends and those of capital, both cohere narratively in maintenance of the society more broadly. Events outside of the factory—on the street, at home, and in prison—work in tandem with those inside the factory to produce a narrative that contains each of these settings. While prison seems to serve the capitalist class structurally as an institution to discipline troublemakers before they are sent back to the factory, The Tramp also finds that within prison he is self-directed. This is played for laughs, but the irony of prison being a place for self-directed behavior belies a paradox of Marx’s critique of alienation: that self-directed collectives require institutional mediation beyond their immanent boundaries.

Of course, Marx would be the first to admit that factories rely on other parts of society for maintenance and reinforcement. “No sooner is the exploitation of the laborer by the manufacturer, so far, at an end, that he received his wages in cash,” Marx writes, “than he is set upon by other portions of the bourgeoisie, the landlord, the shopkeeper, the pawnbroker, etc.” While Marx here is allowing for events beyond the factory to be socially meaningful, the social whole in which they cohere is conflated with the social goals of the bourgeoisie. And to be sure, Modern Times does clearly critique the prison and the factory for working in tandem. But contra Marx, it does not necessarily follow from the film’s critique of wage labor that every institution under capitalism serves capital as its ultimate end.

We see a similar polyvalence in the café that The Tramp and his love interest (“the Gamin”) work at, where management’s discipline of the employees does not fully define the terms by which the café can be engaged. The Tramp’s job in the café is waiting tables, and at first this seems to resemble his stints at the factory, in which he is unable to conform his body to the rhythm and pace of work. This seems to culminate in a diner’s roast duck being thrown across the room, but at the moment that this happens, it is caught by a group of athletes and the scene breaks into a performance of a rugby chase that destabilizes the clear division between diners and servers. The diners are folded into a theatrical production, not as a negation of their respective class positions, but as a social valence that was always there to be read.

Later, when The Tramp loses the lyrics to the song he is supposed to perform, he makes up his own song that wins over the audience. Unlike in the factory, The Tramp’s creativity and deviations here are rewarded. The café offers many analogs of social mediation at once, insofar as its social valuation is figured as multidirectional and polyvalent. Whether The Tramp’s mimetic creativity is allowed is a social decision that implicates more than just management. The diners, wait staff, and management are responsible in different ways for the social meaning of The Tramp’s performance. 

Leftists today who are anxious to unify around a single mass organization or “theory of change” would do well to study Chaplin’s non-identical engagements with the problems and themes of Marxism. At a 1942 dinner held in Chaplin’s honor, Chaplin frustrated an FBI informant in the audience with this exact maneuver. “I am not a Communist,” Chaplin declared, “but I am proud to say that I feel pretty pro-Communist.”

Modern Monetary Theory and The Trans Agenda (Essay)

By Nia Cola

To be trans today is to be treated as a political agent at all times, but afforded no  substantive political agency. Everything you do is scrutinized, as your right to exist remains under constant review. In response, trans liberation means actualizing authentic ways of being, without waiting for the sovereign judgment of cis society. The question of how to achieve this will always be open-ended and multi-faceted. Whatever our focus, however, trans liberation requires a gender framework that expands the present bounds of possibility, in excess of the limited forms of life that have been previously afforded space. Modern Monetary Theory (MMT) gives us just that framework. 

MMT allows space for limitless social rearticulation through public spending and employment. In positing money as an infinite public resource, MMT provides a viable counter-narrative to dominant theories of “commodity money,” which account for human differences as economic costs and potential liabilities when it comes to building a mass political base. And while the prevailing economics casts money as an unproductive and symbolic veil over finite resources, MMT’s insistence on money’s active role in directing production allows us to see the affordance of difference as a policy variable. MMT also serves as a powerful analogue for the trans struggle against what could be called “sound gender” ideology—the assertion of a strictly material gender reality that the introduction of new pronouns can only debase. 

Grounded in such materialist reductionism, the stigmatization of trans people is implicit in the hegemonic gender binary system, which is part and parcel of colonial systems of knowledge and control. The patriarchal family, as an “independent” driver of social reproduction, stands in for the Western nation-state’s self image as necessarily profit-seeking and extractive. And Western anxieties about queer and trans forms of life allegedly “replacing” traditional lifestyles are in some ways a projection of the West’s own justification for settler-colonialism, whereby the existence of colonizers required the genocidal “replacement” of indigenous populations.

The sweeping social identities that Western thought derives from the ideology of biological dimorphism, however, are by no means universal. Despite sexual dimorphism, not all cultures have held to a strictly binary view of gender. There are, in fact, many ways for sexual reproduction to be folded into social reproduction, and so the supposedly “practical” and “material” bases of gender identity are in fact socially constructed and essentially contestable. What is more, because the archetypal reproductive household is socially constructed, the very fact of trans existence holds open space for rearticulation and reconfiguration. Trans existence, in other words, belies the falseness of cis society’s claims about itself. If trans existence is so destabilizing, what we’re dealing with are the symptoms of repressed truths about gender—namely, that there are no fixed truths. 

A rigid gender binary restricts individuals from acting outside of a narrow scope of social norms and becomes the basis for social and economic exclusions predicated on one’s performance of gender. While there is nothing evil about trying on binary gender roles, the politics of performance must be self-consciously nested in a contingent and playful non-binary spectrum. This essential space to play and experiment with gender cannot be conceived merely as escaping coercion. It demands ongoing cultivation and maintenance by way of an MMT-based political economic “agenda” that aims to secure trans agency in myriad urgent ways.

The Trans Agenda

As a function of a repressive cis gender binary regime, trans people must daily confront tremendous hardships and challenges. They face extraordinarily high rates of unemployment, for example, often recorded at around three to four times the rate for cis people. Trans persons also suffer from meager wages, lower levels of college attainment on average, and extremely high rates of poverty. Due to social and institutional discrimination, a large proportion of trans people are involved in the Sex Work (SW) industry. The criminalization and stigmatization of this precarious line of work exposes trans people to high degrees of financial and bodily risk, contributing greatly to the high rates of violence perpetrated against the trans community. 

For this reason, decriminalizing SW is an essential part of any trans liberation agenda. It is undeniable, however, that a significant portion of trans participation in SW is tied to discrimination elsewhere, and so justice for trans sex workers cannot be taken in isolation. If trans people are going to achieve liberation, it will mean provisioning lives we want to lead—including those of us who happily participate in SW. 

The issue of discrimination at the point of access to social goods can be viewed as a matter of equal protection under the law, and for this the solution is simple: pass statutes that make it illegal to discriminate on the basis of gender identity. While this is of course a long Civil Rights fight, a good start would be passing the Equality Act, which would immediately alleviate explicit discrimination as a concern by making it illegal at the federal level. The Equality Act was passed by the House for the second time on February 25, 2021 and is awaiting a vote in the Senate. 

Still, the trans agenda must go further. A comprehensive policy platform could fill a tome, of course, and it would be good to develop such an agenda in the future. Here, however, I would like to focus on two key policies–a Federal Job Guarantee (FJG) and, below, Medicare for All–which are only realizable if we embrace the radical implications of MMT. 

The MMT lens implores us to look at the world in an expansive and generative way, rejecting binary and zero-sum thinking at the level of fiscal provisioning. The fundamental insight of MMT is that money is not a private commodity that must be taken from the market via taxation in order to fund the public sector. To the contrary, governments create money to finance their operations, and taxation is simply one tool among many to manage the shape and distribution of monetary demand (as well as ensure a common denomination. Money’s role in mediating access to and participation in social provisioning is a limitless public resource, which can be used however we want and across any time horizon. 

For this reason, the monetary agency of the Federal government to name and finance public priorities can be mobilized at any time to create a public option for employment. If designed and fought for as a fully inclusive and trans affirming program, a FJG would not only establish a wage-and-benefits floor for the entire economy and begin to challenge and change the social meaning of work. It would also create an inalienable foundation to both support and further facilitate trans liberation, while buttressing trans resilience against hostile employment authorities. 

Building a trans positive FJG, meanwhile, would build union power by diversifying and expanding the traditional white cis culture of union membership. As a unionized public works system, the FJG will no doubt irreversibly alter the balance of power between unions and employers throughout the economy. Yet while unions have in the past proven to be crucial countervailing forces against employers, traditional unions are far from perfect and insufficient on their own. Indeed, even in their heyday, large unions predominantly shaped and supported a repressive and exclusionary mid-center social order. 

A diversified FJG union, by contrast, will not merely boster trans life. It would also strengthen the bargaining power of public and private unions alike by preventing them from holding minority groups hostage to exclusionary majorities, or even corrupt alliances with management. A FJG union, moreover, would allow workers to refuse to work in striking sectors, providing an expansive foundation for industrial solidarity that transcends the false opposition between living for one’s self and living for one’s class. 

Too Many Pronouns Chasing Too Few Genders?

As with any expansion of government spending, the standard objection leveled against the FJG is that it will cause runaway inflation. Behind this explicit argument looms an implicit and quite violent social implication: If paying everyone to work increases the rate of inflation, as might be alleged by mainstream economists, the implication is that some of those people are being paid above what they’re worth. Or to paraphrase the economists, it is too many dollars chasing too few socially legitimate goods. Setting aside other critiques of mainstream economics, this is a startling statement about the value of the work of women, queer people, and people of color. It’s a declaration that we are not capable of producing work valuable enough to justify a living wage.

If one outright rejects the possibility that marginalized people can make social contributions that justify a living wage, then it follows that they either should live off the goodwill of “the productive” through redistributive policies, or that they don’t deserve to live at all. While few people will state the latter openly, the former view is highly patronizing and built to fail under pressure. Buttressed by such toxic logics, the work of marginalized communities has therefore long been under-valued, and the expectation that their employment will result in inflation reflects this legacy. 

Perhaps unsurprisingly, the inflation bogeyman is also wielded against trans people through opposition to trans healthcare. Medical interventions allow trans people to assimilate into cis society to the extent that they desire, or equally to challenge the gendered expectations that are hurting them in the first place. We can hear echoes of the inflation panic about illegitimate jobs in objections to trans inclusion in universal healthcare policies such as Medicare for All. According to this reactionary logic, gender affirming care is superfluous and cosmetic rather than “material” in some fundamental sense. The suggestion that there is a tradeoff between trans and universal healthcare implies that provisioning healthcare services for trans people is beyond the capacity of our economy to manage. But this is a demonstrably false statement. The expansion of trans healthcare would likely be a one-off event in terms of increased capacity needs. 

It is reasonable to expect the amount of trans people who would need to be served would increase as stigma falls, more people decide to transition, and healthcare provisions become more available; however, there is scarce evidence that provisioning such a future is somehow beyond our economy’s ability to adapt to these increased needs. It can be hard to shake the feeling that many of these detractors are opposed to trans healthcare not because they genuinely believe in a resource constraint, but simply because they do not wish to see trans people exist in public life. 

Queering Money

To guarantee adequate jobs and healthcare to trans people—and build coalitions around such struggles—we need a fundamental shift in thinking when it comes to government budgeting. When money is imagined as fundamentally scarce, social change is routed through the problematic language of redistribution and replacement rather than creation. This in turn creates an “any port in the storm” mentality when it comes to building coalitions, as the variegated experiences of trans people are reduced to a representative “average” trans person who can be more simplistically advocated for. And as we see, the impulse to reduce and assimilate what is particular into what is imagined as universal for the sake of “widening the coalition” is observable in class reductionist calls to not discuss trans healthcare at all, in favor of supposedly “universal” healthcare services.

MMT, by contrast, provides a different foundation that allows us to articulate a comprehensive trans agenda on generative rather than zero sum terms. In the MMT story, when public money is motivated toward some end, fiscal authorities create it. Because money is created rather than found, spending precedes rather than follows taxation. Creation does not need to be “paid for” by destruction, and the trans agenda does not need to be routed through such zero sum logics. Money creation authorizes public job creation at the same time that it authorizes private purchasing power.

In the dominant economic view, money creation is inflationary because it is imagined as abstract bids on fundamentally scarce goods. In contradistinction to this view, MMT sees public spending, not as subtracting from a fixed pool of public resources, but instead directing its expansion. This is because, as any heterodox economist will tell you, resources are as socially constructed as gender. The flow of inputs at every point of production is linked to the flow of outputs at another. Capacity is therefore created rather than given, and when the government invests properly it can create new capacity over time.

The policies discussed above are possible only with an MMT framework that speaks in the register of rights and guarantees, rather than goals and aspirations. A FJG will require large variations in spending, and any method of ‘paying for’ the program would have to be just as flexible. And while Medicare for All would likely entail more stable spending patterns, it’s too great a budget item to tie to taxation, dollar for dollar. The last thing we need is policy that analogizes gender affirming healthcare services to zero sum redistribution. A proper budget in an MMT framework would deliberately target resource bottlenecks and invest in expanding production where necessary. 

If properly wielded and understood, public money harbors radical potential to reshape society for the better. These two policies would vastly improve life for trans people, but there is no final word in what makes the trans agenda, any more than there is a final word in what makes a trans person. It is imperative, however, to go big. Putting a Federal Job Guarantee and Medicare for All into action for this trans agenda would be a great start.

* “Money” by free pictures of money is licensed with CC BY 2.0. To view a copy of this license, visit https://creativecommons.org/licenses/by/2.0/.

The Mark of Fascism: Lebensraum for the Left (Essay)

By Maxximilian Seijo & Scott Ferguson

A thought that stands outside subjectivity, setting its limits as though from without, articulating its end, making its dispersion shine forth, taking in only its invincible absence; and that, at the same time, stands at the threshold of all positivity, not in order to grasp its foundation or justification but in order to regain the space of its unfolding, the void serving as its site, the distance in which it is constituted and into which its immediate certainties slip the moment they are glimpsed—a thought that, in relation to the interiority of our philosophical reflection and the positivity of our knowledge, constitutes what in a phrase we might call “the thought of the outside.”

Michel Foucault, Maurice Blanchot: The Thought from Outside

Anti-fascism has always been central to critical theory. Yet in resisting fascism, critical theorists have too readily taken fascist projects at their word. When fascism asserts itself within a polity, for instance, or imposes order on another community, it posits territorial rule over and against what is tacitly framed as an external and pre-political commons. Crucially, such a commons is imagined to exist beyond any particular territory, somehow belonging to no one and everyone at once. From this initial commons, fascism decides who is permitted to exist inside the ethno-nationalist state and who must be pushed out. The very act of exclusion, then, strategically defines the ethno-nationalist state at the same time as it shores up its legitimacy.

One finds critiques of this formulation in numerous works, including those by the likes of Walter Benjamin, Siegfried Kracauer, Gilles Deleuze, and Giorgio Agamben, and others. All of these authors opt variously to counter fascist territorialization with a version of what Deleuze and Félix Guattari call a logic of “deterritorialization.” Deterritorialization seeks to undo fascism’s expulsive territoriality so as to carve out extra-territorial room for life. Such seemingly critical gestures are right to contest territorialization. We will argue, however, that they err by problematically repeating, even romanticizing, the appeal to a pre-political commons that drives fascist logics in the first instance. In this brief essay, we wish to not only challenge metaphysical appeals to a pre-political commons, but also set forth a far more capacious and anthropologically-grounded critique of fascist territoriality.

It is instructive to return to one of the relatively unknown architects of fascist theory, the Nazi linguist Jost Trier. An important influence on both Martin Heidegger and Carl Schmitt, Trier argued that the origin of politics must be postulated through the question of terrain and the central problem of what he terms the “fence.” As he intones, “The fence marks the beginning. Deep and thoroughly defining, the fence, the border, nurtures [Hegung] the world formed by humans.” For Trier, the fence does more than establish a territory. It demarcates the political as such. And the political, on Trier’s reasoning, is nothing other than the function of an inherently exclusionary care.

Construed as a line of division inscribed on a blank slate, such logics borrow from Rene Descartes’ planar geometry, Thomas Hobbes’s state of nature, and John Locke’s extension of such logics to theorize the origins of the human psyche as a tabula rasa. Reducing the political to a foundational enclosure, Trier relies upon and gives voice to the metaphysical bedrock of modern Liberalism and its justifications for the private seizure of common forests, fields and waters in early modern England. Yet he also radicalizes Liberal metaphysics, carrying their suppositions to their implied logical and political ends. As a result, he reads the relationship between inside and outside through a univocal prism of absolute opposition.

In order to undo this violence, the critics we mention above respond to Liberalism and fascism alike by attempting to reclaim an original, external commons, which supposedly precedes and exceeds enclosure. Critics affirm “lines of flight,” to again borrow from Deleuze and Guattari, which would seem to defy and escape any sovereign interior. Against the univocal violence of enclosure, then, they picture a pre-political commonality or commons, where humanity and nature exist together in open and unbounded relations teeming with repressed social and ecological potential. In place of enclosure, modern critics construct a politics of exteriority and difference, which frequently appears to mirror, or simply invert, the absolutism of their fascist interlocutors. In the face of fascist efforts to secure a passive environment for a chosen people, these critics call upon a pre- and, in certain iterations, post-political commons to accomplish something disturbingly similar. As a consequence, such critics often naturalize the ontological core of fascistic violence and let Liberalism’s comparatively mild operations too easily off the hook. 

We in the Money on the Left Editorial Collective begin from wholly different premises. Rejecting the ontological exclusion of the fence, we regard the political and, with it, money as an originary multi-scale interdependence. In this way, we turn the entire edifice of Western political philosophy outside-in. Proceeding from heterogeneous institutions and forms of decision making that know no absolute exteriority, we refuse the figure of the fence as politically constitutive, as well as the illusory commons upon which it is based. Demarcations of course differentiate social and material relations in meaningful ways. But any demarcation, we contend, remains forever nested within and relative to broader domains of social and ecological mediation. Put another way, demarcation can never be said to intervene in an untrammeled or pre-political field free from integrated social coordinations and meanings. Eschewing an absolute commons or state of nature, we maintain that there is no legible or legitimate outside to the problem of mediating social and ecological dependence, no matter which side of demarcation one considers.

Crucially, such inclusivity is decidedly not spatialized, or at least not in any Cartesian sense that would imply linear partitions over an infinitely extended plane. Inclusion is instead a qualitative relation interior to infinitude, which relies on overlapping and vastly different proximities to particular centers of mediation and indicates no unaffected outside. Particulars necessarily participate in this ubiquitous inside which, despite their irregular differentiations, nevertheless manages to reach all. As such, the “externalities” and “marginalities” that so flummox neoclassical economists and delight continental philosophers endure always-already inside a broader human and ecological condition, even and especially when it comes to apparatuses of expulsion.

For this reason, Liberalism and ultimately, fascism fail in positing as origin the opposition between fence and commons. In contradistinction to Siegfried Kracauer’s self-conception as “extraterritorial,” what we have elsewhere called the inextricable “intraterritoriality” of existence undermines the modern metaphysics of expulsion. The failure of fascist demarcation to fully externalize those who it identifies as enemies does not, to be sure, make such regimes any less brutal. On our reading, it doubles their brutality, secreting away a clandestine ontological violence under cover of the manifest horrors of genocide. Fascism’s overt violence of course owes to its destructive practices, which perpetuate psychic and social terror in the name of an impossible, pure interiority. Yet what has hitherto been overlooked by fascism’s most trenchant critics is Western modernity’s violent externalization of naming, which surreptitiously legitimizes fascism’s spectacular failures. This violence does not derive, as critical theorists regularly argue, from the supposed imposition of nominalization on reality. It arises, instead, from the metaphysical delusion that nominalization penetrates Being from the outside.

Repudiating an absolute inside and outside, our claim is that designation and, specifically, designation through money always involves contestable analogies. Analogies are nothing but patterns of dynamic relation, entailing diverse spheres of obligation and need. On this view, analogies may partake of homology or likeness, but cannot be reduced to isomorphic sameness. Presuming a shared interiority, analogies forge difference within sameness, with sameness in this case understood as the heterogenous background of Being as such. Analogies at once disclose and shape not only power and its ongoing problematics, but also interdependence and the ongoing difficulties of care. They do so, not from some Archimedean point of mastery, but rather through partial and participatory articulations of nested relationality.

We draw regularly on chartalism and related traditions to show that the analogical conditions of moneyness represent a relative constant throughout much of human history, despite great variations in social and material life that comprise said moneyness. Diverse, multiple, and ubiquitously visible, such histories demonstrate that the conditions of moneyness are as generalizable as they are particular. They also harbor endless lessons for anti-fascist politics.

Take historian Robert Gates indispensable insights into Weimar-era struggle over the nature of money and its political capacities. While Germany’s Free Trade Unions supported a program of massive public works funded by direct public money creation, the Marxist leaders of the Social Democratic Party (SPD) such as Rudolf Hilferding rejected the program as unrealistic and “un-Marxist.” Preparing for a nationalization program projected into some indefinite future, SPD Marxists actively worsened the catastrophe by calling on the party to permit the ensuing economic crisis and joblessness to run its allegedly natural course. Although certainly not solely responsible for the subsequent nightmare, they nevertheless unwittingly assisted in hastening fascist scapegoating of Jews and other minorities along with the meteoric rise to power of a once-beleaguered Nazi party.

Unexplored by Gates, SPD’s disastrous incapacity to approach monetary mediation otherwise relies upon a tacit externalization of inscription. According to the SPD’s logic, the capitalist mode of production and its countless contradictions appeared to operate as a univocal imposition of private property onto unbounded nature. In the face of private property’s total imposition, the SPD could only concoct an antithetical, yet equally univocal project of nationalization that would socialize private industry as part of an eventual dialectical movement toward what the young Marx once referred to as “lower-stage communism.” Far from effectively combating fascism, however, the SPD reified the metaphysical exteriority upon which fascism thrives. The result not only deepened a political and economic calamity the Nazis could exploit, but also paved the way for fascism to wield state money as a weapon of exclusionary uplift and mass extermination. 

Hardly isomorphic to present conditions in and beyond The United States, the work of revealing such historical possibilities and blind spots nonetheless offer haunting analogies for the fallout of persistent neoliberal austerity and the resurgent ferocity of ethno-nationalist violence. And yet, there is still so much more work to be done.

We need historians across disciplines and fields to assist us in tracing the possibilities and limits of the many analogous human attempts to thematize our inalienable dependence on monetary mediation in myriad and unpredictable forms. Through this expressly analogical practice, historians can enable us to envision money’s previously untapped potentials, as well as expose reactionary logics and practices we wish to avoid and struggle against. In doing so, the critical historian must prioritize the vast and heterogenous interiority of monetary inscription, while jettisoning the fascist mirage of exteriority that the Nazis notoriously hailed as “living room,” or Lebensraum.

Long held at arms-length by leftists as a noxious fiction belonging to the far right, the lure of Lebensraum in actuality looms as a powerful temptation for critical theorists as well. Echoing Michel Foucault’s meditation on Maurice Blanchot’s “thought from outside” quoted above, contemporary art critic and media theorist Boris Groys, for example, recently published an avowedly leftist ode to Western philosophy’s dream of immanent exteriority in the journal e-flux. Groys aches for the philosopher’s historic “meta-position” in a non-locatable elsewhere, criticizing the “politics of inclusion” as a form of univocal domination that miserably abets “a comfortable life of consumption.”

“[A] politics of inclusion,” Groys explains, “which presupposes the improvement of the living conditions of the excluded, is precisely directed towards the elimination of the meta-position that is occupied by the excluded. The politics of total inclusion aims to get rid of the space outside of society, to eliminate any external, potentially critical position towards society as a whole. This politics calls for everybody to play by the same rules, to obey the same laws, to pursue the same goals, to be seen and treated like everybody else and to see and treat everybody else in the same way.” Later, he surmises, “The truth is always on the side of the excluded. To recognize the excluded means not to include the excluded, but precisely to recognize this truth—to accept the dignity of the slave by rejecting all property and working hard (Christianity), or to accept the dictatorship of the proletariat (communism). It would not make sense to give a saint or a revolutionary a regular income and a comfortable life of consumption.”

Although he would surely bridle at the accusation, Groys in this piece seems to pine for a kind of living space, or Lebensraum, for the left. Such a realm, to Groys’s mind, would align free-thinking philosophers with the dejected. It would also furnish philosophy with a critical vantage point from which to evaluate society in its existing totality.

As enticing and, perhaps, well-intended as these twisted judgements may be, in truth Groys’s conclusions only further entrench the mark of fascism in the guise of its apparent opposite. Equating inclusion with punishing sameness and transformation with capitalist expansion, such reasoning explicitly flattens the path to justice to an impoverished common denominator born of subjugation. Dignifying the externality of slavery, propertylessness, and a dictatorial party, Groys’s left utopia looks just as univocal as his characterization of capitalist dystopia. Implicitly, moreover, Groys belittles, if not outright forecloses, profound political movements that confront money and mediation head on. Abolitionism or the Black Freedom Struggle for full employment, from this contorted purview, are predestined to conformist complicity.

The allure of what we are calling a left Lebensraum is a fascist trap that critical praxis must abjure. There is no place external to interdependence. Politics are never univocal. And neither care nor critique are micro-level affairs. Only by circumventing the false appeals of “thought from outside” can we begin to radically reconstruct the world we actually inhabit.

Postmodern Money Theory! (Part 2)

In Part 2 of Superstructure’s “Postmodern Money Theory!” series, Rob Hawkes and Scott Ferguson explore B.S. Johnson’s postmodern novella, Christie Malry’s Own Double-Entry (1973), which self-consciously weaves money and accounting into the very fabric of literary form. Regarded as brokering a broader transition between modernism and postmodernism, Johnson paradoxically conceded that “to tell stories is to tell lies,” while remaining committed to the revelatory “truthfulness” of literary form. In Christy Malry’s Own Double-Entry, Johnson tells the metafictional story of a disaffected young man, Christie Malry. Throughout the book, Malry applies the principles of double-entry bookkeeping in response to injustices in his life, “crediting” himself against society in an increasingly violent manner for perceived “debits.” 

Our co-hosts trace Christy Malry’s multifaceted approach to accounting, which cuts across questions of money, narrativity, enumeration, and reckoning in economic, ethical, historical, and even biblical senses. Affirming the text’s defamiliarizing insights, Rob and Scott unpack how Johnson’s satirical and estranging use of language unsettles dominant visions of money as a merely finite and located particular. At the same time, however, they also weigh the book’s problems and limits, flagging Johnson’s unquestioned white masculine framing of accounting, for example, despite his socialistic aspirations and attentiveness to form’s social restrictions. Stay tuned for the third installment of “Postmodern Monetary Theory!,” in which Rob and Scott further plumb Christy Malry’s Own Double-Entry for its postmodern lessons about the aesthetics and politics of credit and debt.

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Mikhail Bakhtin Pt. 1 – Carnival Laughter & Grotesque Realism

Will Beaman (@agoingaccount) inaugurates the first of a lecture series on the work and ideas of Mikhail Bakhtin. Drawing parallels with right wing attacks on contemporary drag performance and ballroom traditions, Will discusses Bakhtin’s analysis of the Medieval carnival humor, its manifestation in Renaissance literature, and its unique aesthetics of what he terms “grotesque realism.” Quotations are drawn from the Introduction and first chapter of Bakhtin’s text, Rabelais and His World (1965), with additional references made to Siegfried Kracauer’s 1927 essay “The Mass Ornament” and Marx’s Capital


Music: “Lilac” from “This Would Be Funny If It Were Happening To Anyone But Me” EP by flirting.

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Never Let a Crisis Go to Waste w/Rohan Grey (Bonus Episode)

In this bonus episode of Money on the Left, Rohan Grey joins co-hosts Scott Ferguson and Billy Saas to assess the epistemological and political implications of the Silicon Valley Bank (SVB) failure. While orthodox economics and law tell us that economic crises are essentially matters of private risk and market discipline, Rohan, Scott and Billy argue that blatant federal mediation throughout the ongoing SVB crisis exposes money’s public and contestable nature. Rather than another story of capitalist contradiction or bankers behaving badly, then, the SVB crisis opens contemporary money politics to a host of invaluable tools for a stable, just, and green transition: democratic state and municipal credit issuance; public digital banking; focused credit regulation and demand management; and full deposit insurance without arbitrary and destabilizing caps. 

For more on the significance of the unfolding crisis, see Nathan Tankus, “Every Complex Banking Issue All At Once: The Failure of Silicon Valley Bank and Five Quick Implications.”

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Music by Nahneen Kula: www.nahneenkula.com

Postmodern Money Theory! (Part 1)

Launching a new Superstructure series, Rob Hawkes joins Scott Ferguson to explore the ins and outs of “postmodernism.” Postmodernism is a heterogenous and disputed regime of aesthetics and theory that arose in the second half of the 20th century. Dated to midcentury, but promulgated as a discourse from the 1970’s to 1990’s,  postmodernism is known primarily for its preoccupations with multiplicity, difference, surface, language, image, constructedness, reflexivity, and the integration of art and everyday life. Decades past its heyday, postmodernism today frequently serves as a pejorative for reactionary critics of social and ecological justice and aesthetic diversity. In their conversation, Rob and Scott critique noxious voices both outside and inside of today’s Modern Monetary Theory movement, who similarly wield postmodernism as epithet to discredit and police money’s contestable public capacities to provide for all. Our co-hosts dismantle such false zero-sum invectives by weighing the historical nuances and semantic surfeits of terms including modernity, modernism, postmodernity and postmodernism. As a result, this episode prepares the groundwork for a forthcoming engagement with B.S. Johnson’s postmodern novella, Christie Malry’s Own Double-Entry (1973), which self-consciously weaves money and accounting into the very fabric of literary form. Check out the second installment of this series here.


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Gramatneusiedl’s Job Guarantee w/ Thomas Schwab

This month, Money on the Left is joined by Thomas Schwab who, as mayor of Gramatneusiedl in Lower Austria, oversees a promising Job Guarantee pilot program. Seeking to eliminate long-term unemployment, the program guarantees public jobs to anyone in the community who seeks them. In our conversation, we explore the philosophy and structure of Gramatneusiedl’s municipal employment service. We also discuss a key inspiration for the program: a Depression-era study of the effects of unemployment conducted in the same region as Gramatneusiedl. Titled “Die Arbeitslosen von Marienthal” (or, “The Unemployed of Marienthal”), the report detailed the deleterious effects of systemic unemployment in wake of a severe economic downturn and soon became an early classic of European sociology. Decades later, Schwab wrote a master’s thesis about the report, aiming to revive its findings in defense of public employment today. The Gramatneusiedl program is presently being studied by Jörg Flecker, a sociologist at the University of Vienna, as well as Lukas Lehner and Maximilian Kasy, economists at Oxford. The pilot is set to expire in 2024. Thereafter, however, Schwab and his allies anticipate leveraging current academic studies to renew and potentially scale up Gramatneusiedl’s public employment program.

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Transcript

The following was transcribed by Mike Lewis and has been lightly edited for clarity.

Scott Ferguson:  Thomas Schwab, welcome to Money On The Left!

Thomas Schwab:  Hello, thank you for the invitation. I’m very excited and look forward to an interesting conversation.

Scott Ferguson:  You are presently Mayor of Gramatneusiedl, a small town of roughly 3,000 people in Lower Austria. We’ve invited you to speak with us today about a municipal employment program you currently oversee that guarantees public jobs to anyone in the community who seeks them. Before getting into the details of the program, would you mind telling our audience a bit about your personal and professional background? How did you become Mayor of Gramatneusiedl?

Thomas Schwab:  Before I tell you something about myself, I would like to introduce Gramatneusiedl to your audience. Gramatneusiedl is about 15 kilometers away from the city limits of Vienna. As you probably know, Vienna is the capital of Austria. Due to its proximity to Vienna, the population of Gramatneusiedl has risen relatively sharply in the last 20 years and today – you mentioned it – we have around 3,700 inhabitants. In Gramatneusiedl itself there are not too many jobs. Many people commute to work in Vienna or other communities in the area every day. Therefore, Gramatneusiedl is close to the city, but still in the country. We still have a few farmers in town who cultivate the fields around our community. Many young families have moved to us in recent years. Mainly because we can provide good care for children and young people in Gramatneusiedl – with kindergartens, an elementary school and a middle school. We have very active organizations and clubs that shape life in our community. For example: a volunteer fire brigade, a brass band and of course a soccer club. From my point of view, Gramatneusiedl is a livable small town with many advantages that make this place very attractive to live. Now about myself. I’m 52 years old. I’m married and have two children who are now 19 and 17 years old. I’ve lived in Gramatneusiedl my whole life. After kindergarten, I went to school here. After compulsory school, I completed a high school with an economic focus in Vienna. At the beginning of my professional life, I worked at Vienna Airport and for a company that manufactures safe systems. For around 30 years, I have been employed by a supplier for the automotive industry in a neighboring community of Gramatneusiedl. I worked in accounting for this company for many years. I’ve been on the works council for around 20 years, which is currently my main job. I work full time in this company – that means at least 38.5 hours per week.  From 2005 to 2009, I studied beside my job in Vienna. At the end of my studies, I wrote a master’s thesis that dealt with the world-famous study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal” – but maybe more on that later. I have been involved with politics in Gramatneusiedl practically all my life. My father was active in the municipal council of Gramatneusiedl for many years. As a child, I learned how to shape and positively change the lives of people in our community. I myself have only been active in local politics for around 13 years. In 2020, I was the lead candidate for the Social Democratic Party in our community. We won the elections and achieved an absolute majority of mandates. In our federal state of Lower Austria, the Mayor is elected by the municipal council in a constitutive session. I was elected Mayor of Gramatneusiedl with 15 out of 21 votes from the mandataries. My group, the Social Democratic Party, has 11 seats on the municipal council. The next municipal council election will be held in 2025.

Billy Saas:  Very cool, and we became aware of your work in Gramatneusiedl through a — Did I do okay?

Thomas Schwab:  Yes, it’s fine.

Billy Saas:  Okay. We became aware of your work through The New Yorker article [by Nick Romeo], which was published in December, and it was titled, “What Happens When Jobs Are Guaranteed?” Can you give us an overview of your experience with that, with being interviewed for that piece and talking to the folks for The New Yorker and a sense for how this story came to be?

Thomas Schwab:  I think a reporter of The New Yorker also was informed that there is a new kind of program for long term unemployed people, and he visited Gramatneusiedl and wrote this article. The idea of the guaranteed jobs program was developed by the Public Employment Service of Lower Austria. This organization wants to show a new way in the labor market policy. Today, it is usually the case that the Public Employment Service tries to find jobs for the unemployed. For unemployed people, this can sometimes mean that they are unemployed for a very long time. This system turns those affected into supplicants and can lead to different difficulties for individuals.  After deciding to carry out this experiment, the Public Employment Service of Lower Austria looked for suitable municipalities. Essentially, a community was sought whose long-term unemployed corresponded as closely as possible to the average for Lower Austria in terms of the age of the unemployed and the duration of unemployment. Apparently, Gramatneusiedl met these criteria best. The historical reference to Marienthal certainly also plays a major role, because Marienthal is inextricably linked to the term unemployment through the study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal”. After Gramatneusiedl was selected, there were initial talks with the head of the Public Employment Service of Lower Austria, Mister Sven Hergovich, who presented the project to our community. I wasn’t mayor back then, but my predecessor involved me in the discussions and in that way in the project.  Overall, the Public Employment Service of Lower Austria asked three potential organizations to develop this project for the long-term unemployed and to present the possible implementation. I don’t know the individual concepts. The fact is that the organization named “itworks” was entrusted with conducting this experiment.  As a municipality, we have supported “itworks” from the start, for example in finding suitable premises. The cooperation with the people involved worked immediately. Since the start of the Guaranteed Jobs Program, we as a municipality have been awarding contracts to “itworks” in order to enable the project participants to do meaningful work for the community.  Through the work in the community and making people visible, this project did not encounter any resistance that I know of, on the contrary, there were many positive reports – especially about the quality of the work done. I think that was also part of the article in The New Yorker, where the reporter interviewed the participants, and I think, more or less, he gave that picture to the readers of The New Yorker. And that’s why we talk to each other today.

Jakob Feinig:  Thank you for this. How would you describe the philosophy behind the program? How does this philosophy shape the program structure, its rules and also its operations?

Thomas Schwab:  It is clear to me that the market does not solve the problem of unemployment. Because just reducing the price of work – people’s income – until a company offers work cannot be right. On the one hand, we want an income from which we can live, on the other hand the working conditions have to meet our standards. Unfortunately, there are not always enough jobs in a region. A company will not hire anyone if there is no work. We saw that very clearly if we look back in the 1930s, when people didn’t want any wages at all, only food for their work and still couldn’t find work. For this reason, for me, the neoliberal economic approach is wrong!  In my view, the idea of the Guaranteed Jobs Program was developed precisely to refute this approach. This program tries to respond very individually to each person. There are usually reasons why people become unemployed and unfortunately sometimes cannot find a job for a long time. The philosophy behind the program recognizes that each participant has strengths and weaknesses. For example, someone may not be sufficiently qualified to find a job or may be too old to be hired. From my point of view, people often become desperate after a long period of unemployment and do not even try to find work anymore because they have the feeling that they are not needed. In the Guaranteed Jobs Program, an attempt is made together with the participants to find a job that is suitable for the individual. The wishes of the project participants are also taken into account, as is the extent of the possible working hours, for example. I think it is very important that participation in the Guaranteed Jobs Program is voluntary. If a participant decides to take part in this program, they will receive an employment contract and will not be unemployed any longer. With few exceptions, all of the long-term unemployed have accepted the offer to participate in the Guaranteed Jobs Program. It is the task of the program to find a meaningful activity. There are job opportunities in the program, but also public contracts, for example from the municipality of Gramatneusiedl. We have also established contacts with companies that have now placed individual orders with the Guaranteed Jobs Program. For example, apartments are renovated by the project participants and prepared again for the next tenant. You have to be unemployed for at least a year to be able to take part in the program. About 150 people have decided to participate so far. I know many participants who have found a job in a company again. I think that’s the most important thing: to be ready for the job market — to be ready to be able to get a new job in the primary job market. That’s the goal of the whole program.

Scott Ferguson:  So we’ve been mentioning a few times in our questions and answers so far, the fact that this program has been subconsciously inspired by history, and in particular, this depression era study of the effects of unemployment in this very region. The English title, as you suggested, for this report, was called “The Unemployed of Marienthal”. And the report became an early classic of sociology. Decades later, you wrote, as you said, a master’s thesis about the report. Can you tell us a little bit about the report? And why was it worthy of a master’s thesis, however many decades later, and how has it helped inspire you to engage in what you’re doing today?

Thomas Schwab:  Yeah, I think The historical study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal” is quite rightly a standard work in social science. Essentially, the fate of people who became unemployed overnight after the closure of a textile factory and unfortunately these people did not find work for a very long time.  You may now be wondering what Marienthal has to do with Gramatneusiedl. Marienthal was never the name of a separate community, but only the name of this textile factory and the associated workers’ settlement. Most of Marienthal is in Gramatneusiedl – for that reason the connection.  In my view, this explanation was necessary at this point.  From my point of view, the most important chapter in the study is entitled “Fading Resilience”. This chapter clearly proves that the long-term unemployed have lost all drive and motivation. Even though they had all day, they didn’t do anything. While the women had to take care of the children and the household, the men were completely lost. Before unemployment, there was a rich cultural and sporting life in Marienthal. During the period of unemployment, people were not interested in these activities. It was similar, for example, with borrowing books or other leisure activities. The study shows very impressively how long-term unemployment changes people. This is exactly where the Guaranteed Jobs Program comes in. The Guaranteed Jobs Program enables project participants to use their time wisely and gives structure to the working day. The social contacts with the other project participants are also very important – just as working people have these contacts in their companies.  In my master’s thesis, I tried to compare the Marienthal of the years 2008/09 – there was an economic crisis at that time – with the historical Marienthal. For that reason, the title of my work was “Marienthal – 75 years after the publication of the historical study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal”.  The link was, of course, the crisis situation, but you can compare the 1930s with the financial crisis at the end of the 2000s. The decade 2008-2009. Of course, in the historical study you had a situation in our community that was like a laboratory. Nobody has a car. The people were used to walking in our village and they don’t have the possibility to go to another community where they can work. And also, of course, there was a global crisis with horrible figures of unemployment. And therefore, I tried to ask the same questions as the scientists did in 1930. But of course, I was alone, it’s only a master thesis and not this study with 17 scientists. They spent months, approximately half a year here in Marienthal. And of course, they had much more experience with all these things. But at the end of the day, I wrote the study and a lot of literature connecting with this study. Therefore, I think I know quite well how the people live and what’s going on in Marienthal at that time. Therefore, for example, we had a small museum here in our village, and we did some tours with interested people. I really appreciate that each time because a lot of people are interested in that topic, of course, because unemployment is, unfortunately, a topic all the time because people will be unemployed also in the future. Therefore, it is also very interesting that the people today have the same problems as the people in the 1930s. As I mentioned before, the problem is that they had a lot of time, but they had nothing to do in that time. After a long period of unemployment, we know that people are frustrated. And they stop searching for work because they don’t think there is somebody or company who needs their work. Therefore, I think you can compare the feelings of the unemployed people from the 1930s to today. It’s the same situation, of course, the work itself is another work with the textile industry completely changed. Most companies are not in Europe anymore. But of course, if you’re unemployed, you have the same problem as the people in the 1930s, and the only huge difference from my point of view is that you are more mobile. That means you have the possibility to go from, for example, Gramatneusiedl to Vienna, it’s no problem. You can also go to other places in Europe because of the European Union. That was not possible in the 1930s. But I tried to figure out in my small work that there is something you can compare, and there are things you can compare at the end of the day. But I can only recommend the historical Marienthal study to your audience. Unfortunately, I think we cannot discuss the study for a long time because we will have a lack of time, I think. But I hope that some people will know that the historical study is quite small — not too many pages to read, but very, very interesting. I’m sure that people will understand that the problems are more or less the same. The times are changing but the problem of unemployment, especially long term unemployment, is the same as it was in the past.

Billy Saas:  So how have community members, people living in Gramatneusiedl, responded to the jobs program? How is it affecting the community and individual lives within the community? And then I guess finally: would you call it a success?

Thomas Schwab:  Yeah, I have briefly indicated before that the response from our community members has been consistently positive. Of course, in a small community, it matters a lot if about 150 out of 3,700 residents are or have been participating in this program. Every project participant has his family and his friends and talks about this program. Of course, there are also very isolated negative voices, but that’s life. Generally speaking, the individual project participants are part of our public life. On the one hand, when they work in public within the framework of the project, but on the other hand also as self-confident community citizens. The positive coverage in numerous domestic and foreign media certainly contributed to this. In these reports, project participants were often shown or quoted – whether on television or in print media. Some former project participants have even found new work in Gramatneusiedl.  From the mayor’s point of view, the citizens of Gramatneusiedl like that more can be done for the municipality through this project. We cannot do all the work that we should do ourselves. For this reason, the project participants help to keep Gramatneusiedl nice and well maintained.  I have the impression that the Guaranteed Jobs Program is a great success. At the end of the project period, the results will be scientifically evaluated. The previous interim reports of science give hope for this result. I think these reports or the media: it looks fine, it looks perfect. It seems that it will be a success, and I’m sure that we will see the results in a very positive way after the period of this project. I’m looking forward to it.

Billy Saas:  Would you say there’s anything particularly special about Gramatneusiedl that makes a jobs guarantee program especially suited for it? Or do you think that other communities, say in Austria or smaller cities, towns, villages or maybe bigger cities could use this, could do this program and could follow this model that you’re setting with the program in Gramatneusiedl?

Thomas Schwab:  I’m sure that it would be possible to do this program in other communities, as well. But I’m sure that it makes sense to start with this program in a quite large community because there you have the possibility to make it visible. That means they do work for our community. That was in all the discussions with Sven Hergovich and the Public Employment Service. One of the goals that we should or would like to give the people the chance to work for us because we would like to use the resources of this program, as well. But in a smaller village it makes no sense, I think, because there are not enough long term unemployed, thank God. We had a significant number of more than 100 long term unemployed people before the program as we know it started and we had a lot of people who were unemployed for more than three years or a longer period of time. That means, of course, the research work before starting this project and selecting Gramatneusiedl was more or less to find a community who is in a range that is able to manage that. If they studied, for example, in Vienna, Vienna has 2 million people. It makes no sense because there is no organization from my point of view in Austria who can manage this. Therefore, they had to find an organization who is able to do that in a smaller town like Gramatneusiedl. At the beginning, approximately 100 people split into two groups. They started with the program in October 2020, three months later, the next 30 people started with the program and so on. Therefore, it makes sense to do that in these steps, and you have to also think about, maybe we’ll talk about that a little later, that you need, of course, new participants for the program as well. It makes no sense if you had a project period of three to four years, and then there is nobody, not any unemployed in the village anymore. There needs to be some size, but not too much. I think all these thoughts were made before they started to select because they had to know how many people can be part of this project and who can do this job for the Public Employment Service.

Jakob Feinig:  Yes. So I have an additional question, which would be: given that there was so much positive media coverage, and that there does seem to be very few critical comments, what do you think about the political possibility of scaling this up to Lower Austria, to the entire country, maybe beyond the country? What’s your take on that?

Thomas Schwab:  Yeah, I think, of course, there is a political chance there. But as you know, the mainstream of political thinking in Europe, also unfortunately in Austria, is more or less I would say a conservative approach. That means all these programs are hard to roll out to the whole country because you need the government of, for example, our province Lower Austria, as well as you think bigger of the whole country. Therefore, of course, you need the political will because unemployment is a sensitive topic in politics. That means you always have the discussions: why do people get money, and they don’t work? And maybe, for example, in that case, a lot of companies are searching for workers or for people who can work, and there are some unemployed, and it’s easy to see why they don’t work. We know that there are a lot of different reasons. That’s why I’m really glad that we have the possibility in Gramatneusiedl because now we have no long term unemployment in our village. I think that’s one of the first things that is really really positive, especially of course, for the people. On the other hand, it shows that there is a possibility to manage the topic of long term unemployment. If there is a will. I think there is a political chance there. But you need all the politics for doing that and bringing that in a wider range and then a larger area. I think that is not a huge problem. I’m sure that if the results of the program will be ready after ending the program, the political discussion will be harder. Then we have the results and it is connected. That’s also a fine situation for us with scientists from the University of Vienna and the University of Oxford. Therefore, a lot of media coverage came out of these scientists. They told the story, they wrote reports, and a lot of people are interested in that in the perfect world, I think.

Scott Ferguson:  So you are getting so much positive feedback from the community, from researchers close and far, and also the press, and even the international press. But you’re also very cognizant of the fact that this very much pushes against, both in its philosophy and its implementation, is very much against the reigning neoliberal and conservative ideology. So are the people, the organizations, the institutions who hold up this conservative ideology, are they just letting this fly under the radar? Are they worried? Are they speaking out against it? Are you playing out a happy utopian experiment and no one seems to know or care who might be politically rattled by it?

Thomas Schwab:  I think it is discussed, and a lot of colleagues, a lot of mayors contacted me, or we talked about this program. Everybody would like to have this program in his community, of course, because the results are positive. But on the other hand, politics is more or less a game. You would like to find voters, and I have to be careful, but I think it’s more or less a game. You try to find out where you can catch as many voters as possible, and the group of unemployed people does not have a large pressure group behind them. There are no unemployed people in the Houses of Parliament in Vienna, for example. There is nobody fighting for them. Of course, political parties do that, but in Austria, on one hand, we spent a lot of money in COVID times for all measurements for the people, and much more for the companies. On the other hand, we discuss unemployment payments and all other social payments for people. They do not have the highest income, to say it very carefully. That means it’s easy to fight against them, to say that’s not the best way because they do nothing for the community. On the other hand, we know it is not their goal to be unemployed in a high percentage of cases. I think that’s also one of the positive things in this guaranteed jobs program because most of the people who were invited to be participants of this program said: yes, I would like work. Of course, with the different possibilities they have. At the end of the day, only a handful of people have joined the program up to now. I think that’s one of the reasons why we can say to the people that if an unemployed person is offered a job, then he will do the job if it fits more or less to his qualification or other things if he is not. If it’s in our region, of course, because it’s not possible in Austria, compared with the US, you move from your home village to 500 kilometers away for work. Not very usual in Austria at that time. But, of course, there are some challenges in the program. Challenge for the program is, as I mentioned before, the number of possible new project participants, and a lot of discussions will take place after the end of the jobs program because then we have results from scientists, and nobody from politics can say this is all nonsense, I think. Therefore, I’m quite sure that the discussions will be harder and will be more direct to the topic if the program is over, when the project period is over.

Billy Saas:  You mentioned that the project and the program itself is being studied, and the data is being analyzed by researchers at the University of Vienna and Oxford. Could you tell us a little bit about what you understand to be their preliminary findings? What are they discovering and how are they contextualizing what y’all are doing alongside other kinds of contemporary debates about things like public investment, unemployment, automation, and so on?

Thomas Schwab:  I think the accompanying investigations of the addressed scientists are a very important part of the project. Sven Hergovich, head of the Public Employment Service in Lower Austria, put forward the thesis that the Guaranteed Jobs Program costs about the same as the costs for an average unemployed person. We’re talking about costs at the start of the project in Austria of around 30,000 euros per year. Since no final results are available yet, there is currently only a debate about whether a job guarantee is a sensible solution or whether the current system should be retained. I am convinced that the results will show that the Guaranteed Jobs Program will be the more sensible and cheaper solution for society. The fact that long-term unemployment can be avoided or, so to speak, defeated by this model, is an important finding so far.  From the point of view of the mayor of our community, of course, I also see the support for the well-being of the community citizens. Thanks to the work of the project participants, our community has become even more livable and some of the citizens – the project participants and their families – are happier. I think we see the positive influence today: we see the positive influence since the project has started, and I’m sure that we will see that also in the future. For me, this is a great success. From the point of view of a citizen of Gramatneusiedl, we see also the people — they work now, they are more part of our community because they stayed at home and are frustrated because they have no money, they have no job. The major point is that they understand money for working now within this program as if they would sit at home and receive their unemployment payment. That means they have no positive influence from the income side, but on days that they have the chance to find work they see that they have useful work for themselves and they have the possibility to create their own job, more or less. If they would like to do something new, for example, they will have the possibility to try that. It’s not possible if you go to a company and you have no experience to say I would like to do the job, you will have troubles to get this job in normal times. Maybe sometimes it works, but normally you have no possibility to do completely new work without any experience, and in the job guarantee program, you have the possibility to learn new things, you can change your professional life a little bit, and with this experience out of the program, you will have better chances on the primary job market.

Scott Ferguson:  Can you give us a sense of some of the particular jobs that have been created or filled in the program? And what kinds of services or goods or forms of maintenance are they involved in?

Thomas Schwab:  For example, for our community, they do a lot of gardening work. We had a lot of things to do in that way. For the community itself, it makes sense that they had a lot of people. They have a lot of time and they do this work. They have instructors in different kinds of work. They do some renovation work for apartments as well as furniture; they have their own workshop there. It depends on the instructors, what they can do on a more or less professional basis. On the other hand, they do some creative things. They do all the things with textiles or something like that. They produce some goods, and they sell it on the weekly market in Gramatneusiedl. Also, they have their own market within the, that’s also an interesting point, they are located with their workshop and with their meeting rooms and the offices of the project within the historical textile company building, more or less. In former times, the director of the textile company lived there. After this period of time in the next company, which was located in that area, there was the office building. They are located in the same area as the historical textile company. They had a lot of interviews with the participants before they started to work, and they had the possibility to tell them what they would like to do as they try to find a way to give them the possibility or to give them the chance to try these things. Therefore, it’s easy for some of them to learn new things. On the other hand, of course, companies in our area are looking for workers or for employees, and they contacted me in the past, asking: “how is it possible to get workers out of this program?” And we tried to bring them together and yeah, a lot of people had the chance to start working in a company and I think they are happier.

Scott Ferguson:  Can we hear a little bit more about the instructors? Where are they sourced from? Are they permanent employees of the Public Employment Service? Do they come from elsewhere: do they have other jobs and they volunteer? I’m curious to hear about the details of that part of the system.

Thomas Schwab:  As far as I know, they come from the organization “itworks”. The organizations I know are familiar with working with unemployed people. They have a lot of activities in Vienna, and an instructor normally comes out of Vienna to Gramatneusiedl or we work there for the whole time. But they are employees of the organization itself, and they are trained, they are familiar with these kinds of people because they also have their projects in other communities, especially as I know that in Vienna. In Gramatneusiedl, the responsible people try to find out with the participants what they would like to learn, what they would like to do, which possibilities they have, which opportunities they can fix with them. Then, they come to our village and work with them.

Jakob Feinig:  Could you maybe explain what “itworks” is? What kind of organization, what kind of history, trajectory, and experience they have?

Thomas Schwab:  As far as I know, they are specialists for social projects themselves. They do a lot of work with the unemployed as well as with elderly people. They do that on a professional basis. They work together in Vienna also with the Public Employment Service. As I explained before, three of such organizations were invited to find a solution, to find a concept for these long term unemployment projects in Gramatneusiedl. They are well known in this scene for the public employment service, they will know them. I didn’t know them before, I have to tell you that. But I think in Austria, a lot of organizations work with people, and they get their employees from the market and the jobs they are looking for should fit the employment programs. If they work with old people, for example, they need other qualifications as here in Gramatneusiedl. But I don’t know them really well because we are glad they are here and we didn’t talk about their other work, more or less.

Billy Saas:  Are you aware of or have you become aware of, since the increased media attention on your program, of any other similar programs that are either sort of in proposal stages or being developed? Or maybe in fact, are underway? I’m not, but I wonder if you might have become aware of other programs? No?

Thomas Schwab:  No, unfortunately not. I think that’s why we get the whole coverage of the media.

Billy Saas:  Yeah.

Thomas Schwab:  Because it’s unique. Of course, there is a conservative government that rules Austria at the moment. Despite this, the Public Employment Service managed to get this great project and the financing of 7.4 million euros, I think, off the ground. I think that’s a huge amount of money. On the other hand, Mr. Hergovich and his colleagues had the idea, and now we have this experiment. We will see how positive the results are at the moment, if there is a possibility that the politicians will use that as an example and find a way to implement it in, for example, the region of Lower Austria or in the region of Austria or somewhere else in Europe. I’m sure it is possible all over Europe because we had similar systems in some countries, therefore, it should work in that way. That can be an example for a lot of people that it is possible to do something against long term unemployment, and I’m looking forward to that. As I said before, Marienthal is not only linked to unemployment. Maybe in the future, also well known as a village to find a solution against long term unemployment with this guaranteed job program.

Billy Saas:  Part of the reason I asked that is that, yeah, I’m not aware of any others either. In the early 2000s, there was a similar sort of program the Hefe y Hefas in Argentina, which has gotten some attention and comes up every now and then. There have been, in recent years, more experiments in cities and municipalities, towns, villages, experimenting with a universal basic income where they just cut a check to people. I wonder: what would you say to those who might come to you and say: “Why induce people to labor in the first place? Why not just cut a check to those who are long term unemployed?” And I think you’ve given us a sense of what your answer would be in terms of like the social and sort of mental, physical health, and well being benefits that come from working. Would you have any other answers? Or what else would you say to someone who said, maybe just do a universal basic income with those 7.6 million euros next time?

Thomas Schwab:  I think, if you have a basic income, it’s another kind of discussion, for me, because that’s more or less another approach because everybody would receive the same amount of money. And if you do some work, you will earn more than other people. Yeah, I’m not sure if that is the solution for unemployment. Because if you receive, for example, 1,500 euros per month, and you are fine with that, you will not work. Then we have the same problem. You will not be part of the society, you will stay at home, you have no social interaction with your colleagues, for example, in a company. You will be fine, you will be able to pay the rent for your apartment, the energy, and you can buy some food. I think that’s a fine approach, but I’m not sure if this will help in every case. In Austria, you don’t have an income for all, but you have a minimum standard of income that’s not enough for living, but it’s also a possibility to increase the demand. Therefore, it would not be a huge problem, but I think it’s another kind of solution. It makes sense to me. I think in Sweden, or somewhere, they tried it. As I wrote in the newspaper, they were not 100% happy with that, and I think we have to try another approach. Maybe in that direction, but not in the same process, because the results will be the same. Here we are in another topic: employment, unemployment is more or less living. If you sit at home and do nothing, and you have enough money, the chance that nobody does anything is quite higher. We live in a time where a lot of people, even though they are neighbors, don’t know more than 10 people in their surrounding. Of course, a lot of social interaction happens in a company or university, for example, if you go out of your flat. Therefore, I think it’s an interesting discussion and basic income is also a good approach, but it’s another topic. I think it would help us in some cases, but I’m not sure if this is completely the best solution. A job guarantee program for long term unemployed is the solution to help the people come back to the society, come back to work, in a positive way or help the people to do something where it’s no pressure because working in a company, something is another work as if you work in the program and you don’t go out of the program because you are not ready for the job market. Therefore, it’s different to other things because you have the possibility to choose if you would do something more or not, it depends on the personal condition and on your personal behavior and on your possibilities. Do you have the possibility to go to another village because you have no driving license, for example? When I started work in my company, the first shift started at 5am in the morning. There is no public transport. You cannot come to the company, and all these things are very, very different. If you have such a program, you also have opportunities that the people will do their work. Maybe within the program, maybe for the community, but not for a company. There’s no pressure on it. You are also fine if you work only 10 hours a week there; you’re not forced to work 40 hours a week because if you work 10 hours a week in a company you only earn a few euros of money. As much time as you work, as much money will you receive from your company. In that case, you have the possibility to find solutions for people who are not in the condition to work, for example, the whole day or the whole week.

Billy Saas:  We’ve talked quite a bit about the jobs guarantee program being a solution for long term unemployment. I wonder, one of the things that excites me about the idea of a larger scale job guarantee, perhaps, is the notion of what it offers for those who are currently employed in work that is not good or rewarding or who might be short term unemployed, but would like to try something new. Could you say something about how you imagine a program like this, if it scaled up, what it might do for those who are, say, in jobs that they don’t like, doing work that they do not find meaningful. Do you have thoughts about that?

Thomas Schwab:  Yeah, I think at the moment, we have a quite good time for people who would like to change their jobs. We have large amounts of fluctuation in Austria, also in normal years, but now a lot of companies are looking for new employees. Now, people have the possibility to quit their job if they are not glad with the working conditions or with the salary or something like that and find another job. At the moment, it’s easy to do that. That’s maybe a difference to the US. In Austria, we have unemployment payments. If you’re unemployed, you receive money from the government. You will always have people who change their jobs or they are short term unemployed. I think the one year period of time you have to be unemployed, that you are more or less a long term unemployed, is connected with the period of time you can receive some money from the government out of the unemployment payments. It’s not a good deal in Austria because, unfortunately, you receive only 55% of your income as an unemployment payment. That’s not the best percentage in Europe. In Belgium or other countries in Scandinavia, the people who are unemployed receive much more money. But at the end of the day, I think the problem is if you try to implement a guaranteed jobs program for all unemployed, it is not possible for any organization in Austria to deal with that. Therefore, it makes no sense to try that. Of course we have the Public Employment Service whose job it is to find a job for the unemployed. Of course, it’s easier in one case, and it’s more difficult in another case because the jobs are different, the qualifications are different. It is necessary to look where the jobs are needed, in which region they are needed. For example, as you probably know, in Austria, tourism is a strong economic factor. But tourism is more or less within the Alps or in cities, and the people are not there in that amount of necessary employees. As I mentioned before, nobody from Gramatneusiedl would go to Kitzbuhel to work in a hotel. If he has a family, if he has a house or an apartment here, why should he do that? That’s also an end point within the discussion: what is possible for the unemployed and what will the government force them to do? And that’s a huge discussion all the time because, of course, you have other kinds of unemployment in Austria as you have in the US. There is another culture connecting with work, as we have it, here in Austria or in Western Europe. There are a lot of people, and it’s growing more and more. They are traveling around the world all day, but a normal worker with not that much skill is more or less fine if they are in their community. They don’t want to go away from home in most cases. Therefore, it is a problem. On paper, it’s easy. You have at the moment 300,000 unemployed people in Austria. We need 200,000 employees somewhere. Why are 300,000 people unemployed? That’s the argument of the right wing parties, especially. They argue in that way.

Billy Saas:  Perhaps there’s no agency or institution in Austria yet that could handle a universal guarantee of a job. But thank you so much for being so generous with your time, Mayor Thomas Schwab. Thank you for joining us on Money On The Left.

Thomas Schwab:  It’s a pleasure. I enjoyed it a lot. Thank you for the invitation, once more. I wish you all the best. And I hope that we will see that this program we discussed will be a part of the programs all over the world to get rid of long term unemployment. That’s my hope. I hope you will hear a lot about this program in the future because I think it’s a wonderful idea. In our small village works, more or less. Very, very good from my point of view. Thank you, also for your time. I’m looking forward to hearing the podcast.

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mike Lewis (transcription), & Emily Reynolds of The Buffalo Institute for Contemporary Art (graphic art)

Money & Solidarity in Latin America w/ Andrés Arauz

Money on the Left is joined by Andrés Arauz, recent candidate for the Ecuadorian presidency, heterodox economist, and outspoken advocate for the creation of the “Sur.” The Sur is a complementary currency for use in intra-Latin American trade and cooperation. Dismissed by New York Times blogger, Paul Krugman, as a “terrible idea,” Brazilian President Lula De Silva’s proposal for development of the Sur as a tool for encouraging economic and political integration between Latin American countries has stoked the imaginations of progressive leftists within and beyond the region. As he makes clear in our conversation, Arauz is among those who see in the Sur urgent opportunities to build plurinational solidarities among countries like Ecuador, Colombia, Brazil, and Peru, as well as to diminish the hegemony of the U.S. dollar and financial institutions over Latin American economies and politics. Arauz offers an astute and defamiliarizing perspective on the Sur for anyone who may be committed to or uncertain about the political economic potentials of a SUR-driven future for the Latin American Left. 

In our dialog, we speak with Arauz about his time serving as director of the Ecuadorian Central Bank. Remaking an orthodox organization with heterodox tools, he not only oversaw the Central Bank’s transition from a neoliberal handmaiden for corporate interests to a robust public institution in Ecuador’s complex “dollarized” economy, but also empowered and secured the country’s network of local credit unions by integrating them into the Central Bank’s federal payment system.

Money on the Left is proud to present transcripts of this important conversation in both English and Spanish.

Andrés Arauz on Center for Economic and Policy Research (CEPR): https://www.cepr.net/staff-member/andres-arauz/

Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Music by Nahneen Kula: www.nahneenkula.com

English Transcript

The following was transcribed by Mike Lewis and has been lightly edited for clarity.

Billy Saas:  Andrés Arauz, welcome to Money On The Left.

Andrés Arauz:  Thank you very much for having me. I’m excited to be here. I’ve been following your work for the last few months and years, and I’m happy to be here.

Billy Saas:  Oh, that’s exciting to hear. We’re excited to have you here with us, especially now, because these are some pretty historic times in Latin America with six now (very recently, seven) of the most populous countries, including for the first time Colombia, run by leaders with progressive left politics. How would you characterize this moment and its importance for the future of the region?

Andrés Arauz:  Well, this is a very exciting moment for progressives, especially people in Latin America that already lived through the first pink wave, the first progressive tide in the region. Of course, now there’s a bit more maturity in the progressive space, in general, and I think we have learned a few lessons. One of the most important issues that we have learned is the importance of regional integration. Right? So we know that one country by itself will not change the world. One country by itself will not change the major dynamics of the world system, or come out, in a sustainable way, out of poverty and transform its economy, its industrial base, and so on. We know that that can only be achieved with a regional plan or integration. And I think that has definitely been incorporated into the left’s agenda. That’s why this is a critical moment in history, because now we see that President Lula, who just arrived to power only 10 days ago in Brazil, and has already faced the first putsch attempt, has said that regional integration, specifically with South American countries, is one of his key priorities in his foreign policy. So this is exciting for us, with the leadership of Lula, of course, the situation in the region changes completely. We see that the sort of extra regional forces like the US have also taken note of this shift towards the left, and that has implications for the entire region. Hopefully, we will overcome all these putsch attempts and violent threats against progressive forces. And this can be not just a reaction, a resistance in opposition to the forces of Empire, the forces of Neocolonialism that threaten progressive politics all over the region, but that we are able to actually build something. And I think the monetary, the financial issue is definitely something that we can achieve in a short timespan. Because of the electoral dynamics in the region, I would like to insist that for Latin America and progressive politicians and those who are leading the countries, we don’t have an infinite timespan. We have a very limited window of opportunity, which is exactly this year, 2023. If we go beyond that, it will probably be much more difficult, because of the domestic political junctures, the correlation forces, and so on. So I think this year is the year of hard, hard work, and to put things in order and get them rolling.

Scott Ferguson:  So how would you understand Ecuador’s place in this particular historical moment? And I’m wondering, in your experience, taking advantage of this particular historical opening, how have you pursued speaking about money and public financing from a heterodox point of view and communicating that to everyday people?

Andrés Arauz:  Okay, so let’s begin with Ecuador’s role in all of this. Ecuador, unfortunately, right now is headed by the antithesis of progressive money with policy, which is a banker. A neoliberal billionaire banker, who has completely sided with the IMF in their conventional, and old school, and effectively-demonstrated false and incorrect policy advising and policymaking, and he’s leading the country into a major economic crisis. The country of Ecuador is probably the country that has least recovered after the pandemic. So it hasn’t grown, really, because of very restrictive monetary policy and fiscal policy, in general. He is promoting capital flight as part of the government policy. Just yesterday, or I don’t know when this will air, but very, very recently, he just announced that he will scrap the money outflow tax that we have in Ecuador. It has been there for a while. So that will promote capital outflow. But the thing is, his main line of business as a banker is actually to own an offshore bank based in an offshore center in Panama, whose approximately between 80 to 85% of all deposits actually come from rich Ecuadorians. So it really is very messed up for any country, in general. But for my country, it actually hurts, you know? When you have a president whose main line of business is to actually promote capital flight to his offshore bank based in Panama. And of course, all the policy is changed to fit his line of business. And it’s actually quite absurd, but also a bit disgusting, because he has not quit the bank, he has not put his shares into a blind trust or whatever. No, he has been explicit about holding his property, and that’s very sad. Also, because if you extrapolate this or you zoom out a bit, you’ll see that this is the type of character that will oppose a proactive role that has always been Ecuador’s foreign policy, except for this government, to be a part of a regional force. To be part of a regional bloc. So he will most likely oppose all these initiatives, and it is very sad because until very recently, Ecuador was the capital of UNASUR: it was the head seat of the headquarters of the South American Union. The former President Moreno, who betrayed his program, and now Lasso, have resigned, have renounced the fact that Ecuador was the Capital of South America, the city of Quito. Fortunately, on the other hand, Ecuador’s population is markedly progressive. So in the last elections, where I ran, Ecuador’s population voted around 70% for progressive parliamentarians. The presidential result was not exactly the same: I lost by just a bit. But the parliament is overwhelmingly progressive with social democrats, with progressives with what we call the indigenous movement of plurinational national forces. They are over two thirds of the parliament. And the population, in general, is fairly progressive, as well. So this means that sooner rather than later, Ecuador’s population will step up, will start exerting their democratic rights, and will probably have a changeover in the administration. It is very unlikely that the current president would be reelected. And we will have a progressive government in place to align themselves with the regional integration project. You also asked me about how to approach heterodox money and heterodox economic policy in this context, and I have several hats that I wear all the time. In the context of my own country, I am predominantly a political actor within my country. Ever since the election two years ago, I am now seen as a political player, so it’s a chance to be in the media quite a bit. It’s a chance for my social networks to have plenty of followers, and it’s important to try to relay the message adequately. I tried to share my knowledge in very lay terms and with fairly easy vocabulary, but mainly showing contrasts. I think that’s been a very effective way of communicating to people, to large segments of the population by contrasting either policy recommendations or policies from orthodox money, monetary policy or in general economic policy, with what can come about with a heterodox approach. That’s my hat that I use within Ecuador, but outside of the country, I have, perhaps, still more of an academic hat on. I use my knowledge to communicate to specialists and specialized media, to those, perhaps, that are monitoring the international financial institutions, in general, and try to use that sort of language to reiterate and to insist on my academic credentials, which I think is also important in terms of legitimacy building. That’s more or less what I do. I work in several spaces, always around issues related to money and technology. I’m pretty happy in that space and trying to change the world with my knowledge, my brain power, with the networks that I can try to build. Hopefully, we can also leverage that to further develop and transform my own country.

Billy Saas:  As you’re doing this communication work, are there any other thinkers who model the kind of communication that you aspire to? And then under the broad banner of heterodox economics, are there any schools or perspectives that you find yourself more consistently drawing on?

Andrés Arauz:  I haven’t had any specific person in mind in terms of how to model the communication. I have been exposed to many leaders and to many economic thinkers. I can’t deny the incredible and important role model that, for example, Rafael Correa has been in terms of economic policy communication. He used to have a weekly radio program where he explained the economic policy and government policy to the entire population. It was a program that lasted between two and four hours every Saturday. And then, of course, making issues easy and communicating them to people using PowerPoint slides and so on was also, I think, something that did not only affect me, but it was a style of communication that everyone in my country got to be familiar with. In terms of economic thinking, though, I definitely recognize the influence of many Latin American economists that have been around ever since Raul Prebisch; structuralists and dependency theory thinkers. More recently, I think the influence of Post-Keynesians has been very explicit in my economic thought and practice. I would say that I would ascribe to the broader Post-Keynesianism, and then there are many smaller groups within that broad school, and I like to gather elements from all of them. I have really grown to like some of the main elements gathered by the separatists, the French separatists school with some Italians in there as well. My PhD work includes a lot of their work, as well. Specifically, Augusto Graziani because I specialized in payments systems, and in money dynamics, and the role of banks, and so on. And I like to consider that as well. But also, and this is perhaps something that is related to more of Latin American context, is what I call the Solidarity Economy school; economia solidaria in Spanish. The Solidarity Economy is very important in our region because we are a late comer to industrialization. We’re a late comer to capitalism, itself. We’ve been under basically feudal economies well into the last century, the 20th century. Solidarity Economy is important because it is a way of including those who were excluded by the capitalist system. If you analyze my country, or my neighbors, between 70 and 80% of the working age population is not a formal worker. They’re not under a capital-work relationship. They are basically survivors in a system where they have to find a way to survive every single day. That doesn’t fit into any neat economic theory, so Solidarity Economy tries to say: okay, what can we do as people that have been excluded from the system? Let’s save each other. Let’s cooperate. Let’s build community. Let’s build a cooperative economic system where we can recognize that we are partially excluded from capital and capitalism, but we have to talk to capital and capitalism. We’re partially excluded from the state, but we have to interact with the state, as well. We are divorced from our own realities because we have to survive. We also have to work together. We have to become cooperatives, we have to get together into associations. Even though we’re not a union, or a Workers Union, we have to come together so that we can negotiate in better terms with the forces that be. Solidarity Economy, I think, has a very important and marked influence in how I think about development. Yeah, there are probably many more that I’m missing right now, but definitely some of these that I’ve mentioned.

Scott Ferguson:  When you ran for and nearly won the presidency of Ecuador in 2021, the press liked to note that you would have been the youngest president in the country’s history. But we find it just as remarkable, if not more remarkable, that you already served as Director of Ecuador’s central bank when you were just 24. How did this situation come about? What drew you to that work in monetary policy in the first place?

Andrés Arauz:  I would have to definitely mention my Masters thesis director Pedro Paez Perez. He was a very important person in my early stages of professional development. I actually got my Bachelor of Science degree at the University of Michigan Ann Arbor in both math and economics, and then I went back to Ecuador and started doing a Masters in Ecuador. The order is usually the opposite: people get a local degree, and then they get a Masters abroad. I did it the other way around. Actually, it was very, very helpful because when I enrolled at FLACSO, which is a Latin American university that has offices in different parts of the region, in my case Ecuador, all my professors were going to become ministers of finance, planning, development, central banking, and so on. My thesis director, Pedro Pais, had been a central bank researcher, so when he became Minister of Economic Policy, I became his advisor.  I was actually 22 when I was advisor to the Economic Policy Minister. I was in charge of what we called the new financial architecture, which is basically proposing a transformation of the domestic financial system, but we were also working on transforming the South American financial system and their institutions. I worked with him on a lot of those issues, and I got to know the central bank from the outside. I was an advisor to the ministry, but most of my work had to do with the central bank. So I was able to criticize it all the time and to push them to make changes and so on. It’s important to mention that before all of this, I had worked at the central bank. I was a statistician at the balance of payments statistics area, and my job allowed me to see the individual transactions of money that went in and out of the country. I got to see names of people, names of companies, and that knowledge has always been valuable to me because when an economist goes and finds the statistics, you see a bunch of numbers, you see a bunch of aggregates, you try to build a story in general terms, in general concepts. Well, when I see statistics, and when I see these numbers, I don’t see general stories and general concepts. I see people. I see the companies. I know their behavior. I know their patterns. I know exactly who we’re talking about because of that experience that I had failed more than 15 years ago. So that’s definitely a plus when you build the policy, when you know what makes up the statistics, and how much of it is also just hot air and how much is actually rigorous statistics building. I always thought that statistics, and therefore accounting, were absolutely crucial if you really want to do rigorous economic analysis. That’s also why I sometimes laugh when I see colleagues putting out all these nice, econometric models and using numbers as if they were some sort of physics and hard science when a bunch of these statistics are absolutely made up and have very strong deficiencies, or very large, significant deficiencies. I’ve actually written quite a bit about problems about monetary and balance of payments statistics Anyway, to come back, I was an advisor to the Economic Policy Ministry, and we had a major issue because the central bank of Ecuador had been ran, perhaps over two decades, by the most conservative, Orthodox people in the country, and with clear links to the more powerful bankers. So in 2008, under Correa’s government, we had a new constitution of Ecuador, which was a very interesting process of democratization of lawmaking. We had thousands and thousands of people propose amendments, and changes, and wording, and so on, for the Constitution. And eventually, I really think it’s a piece of artwork, the Ecuadorian constitution. It is very progressive, it is forward looking, and one of the things that the Constitution did was to change the nature of the central bank. It said that the central bank would no longer be independent. It will no longer be autonomous, that it would be democratically accountable to democratic forces, and therefore be part of the executive branch. Now, we’re also a dollarized country, but with a non-independent central bank, that was run as a branch, effectively, of the executive government, and the President was a PhD economist. Okay, so this was a very particular moment in time. And if that guy wanted to have the central bank also comply with the new constitutional mandates, which also changed for the central bank. For example, we have financial inclusion as a constitutional objective, not just inflation or whatever. You have a list of constitutional mandates for the central bank. You wouldn’t find anybody in the central bank staff that would even understand much less so be aligned with the new constitutional objectives. So since I had a monetary background and I specialized in those issues, and I knew the central bank both from the inside, and the outside, because I had been able to live within its framework, but also to criticize it from the outside. I became the general banking director, which is basically the one in charge of the central bank’s operations. It was a very happy moment for me because I was fairly young, but I already, perhaps, could be considered an expert in central banking affairs. And I knew the workings of the payment system, the reserve management areas, the international payment systems, and financial institutions. I knew accounting very well, and it’s key to know that if you’re running a central bank. And I had the correct political orientation as to what were the key transformations that I had to achieve within the central bank, so as to instead of destroying the institution, leveraging the institution to fulfill these new constitutional roles. So I had a key role there in transforming the central bank into what it still is today, even though we now have, again, a conservative government. But because we had very important changes in place, even in the culture of the central bank, I think it’s difficult for them to revert all of that. So that’s how it all came about. It’s a really nice story, and I think it’s not easily replicable elsewhere in the world, unfortunately, but there are many things that on the margin can be done to use an immense power that any central bank has in any society to democratize that society, to democratize its economies.

Music Break – “This is Not America” by Residente

Billy Saas:  So moving from critic of the central bank’s activities to someone who’s effectively directing them, were there things that you learned or surprises that you encountered in your new position on the inside? Did anybody take your place as the critic from the outside? And what was that criticism of your work like?

Andrés Arauz:  Well, to be honest, no. There was no strong criticism at the time because, like I said, we were moving really fast.

Billy Saas:  Yeah.

Andrés Arauz:  This academia in Ecuador had been dominated by neoliberal thought by neoclassics and no real thought about heterodox monetary policy, and so on. The payment system was something that was completely out of the discussion, out of the debate. None of that. The central bank’s proactive role in the economy had been forgotten for the last 20 or 30 years, and so on. So the people in academia, even the right wing academia, had no idea what we were doing. They looked at the balance sheets, and they just couldn’t figure it out. They didn’t even know how to read the balance sheets, because they had excluded that sort of training for a long time. So the first few years, there was really no criticism, not because they didn’t feel like something was wrong, but because they didn’t know what to do about it. We had also kicked out the IMF and the World Bank from our country. We had expelled the World Bank from Ecuador. The IMF was still in the country; they used to occupy a large office at the central bank, and they didn’t pay rent. So we said, “no, if you don’t pay rent, you get kicked out of the building.” And of course, they didn’t have as much access to what was going on within the central bank, either. So there was really nothing that they could do or say during that time because we were making changes in the plumbing of the system. We were working on, for example, democratizing the payment system by something so simple as retrofitting the telecommunications requirements for connecting to the payment system, and for making a light version of the software available for credit unions. In Ecuador, we had over 600 credit unions that were operating, but were not included in the payment system. So they weren’t able to offer the same kinds of financial services, transactional services, payments of government wages, and so on, like big banks were able to. So just by democratizing the payment system, we had a revolution at the base of the pyramid where rural credit unions all of a sudden became a major force in the economic system. These guys were part of the Solidarity Economy, so they had another value system in there as well. Not just capitalist banks, right? Just by democratizing the payment system—something that we did out of the mainstream or the media’s radar—we were able to make major changes. Now, when did they start to pick up when they, by then, I mean basically right wing academics, opposition pundits, and so on, was when we started the launch of what we call the mobile money system. Ecuador was the first central bank digital currency. Now it’s a fad. But we did this 10 years ago, and the project started in 2009. So this is like 15 years, 14 years ago. We changed the regulations so that citizens, any citizen, all they had to have was a national identification number, so their ID, and that was the only requirement to open an account at the central bank. A central bank digital currency, we called it mobile money then. It was designed in such a way that was perhaps another tenant of my way of thinking about technology, its appropriate technologies, rather than vanguard technologies, or the latest thing. You need to make technology appropriate to people’s needs, not to just…

Scott Ferguson:  Disrupt.

Andrés Arauz:  Right, so we had this mobile money that would work with the most basic feature phone, without the need of having a smartphone, without the need of having a data plan. All you needed to do was dial a shortcode, and you will get access to an entire system to transact. And that’s when the right wing opposition started to criticize. I had been out of the central bank by the time it actually launched, but that’s when they started to pick up on some of the major issues. In part, because one of the main people that they recruited was a former central bank guy, who then went to work for the private bankers association, and is now working at the IMF. So this person is perhaps the only one that was able to educate the right wing as to what was actually happening. And now it’s only about 10 or 14 years later, writing about what we did in 2009, 2010, and 2011 with a critical perspective. I think it took them a while to understand what was going on. People, when they think about a dollarized country, they usually say, “you lost your monetary policy, and you’re screwed,” and so on. That’s not true because when we went into the central bank, and when I was an advisor at the Economic Policy Ministry, we said look, sure an Orthodox dollarization removes all of those tools and possibilities and policies and you just sort of quit and say: I renounce everything and let the markets dominate. But in a heterodox dollarization, it forces you to be creative. You will have an advantage, which is that you have a stable unit of account, which is actually a challenge for many developing countries that try to apply heterodox economic policy. You get these devaluations, depreciations, people lose faith in the currency because of the pundits and the markets react quickly. But when you have a dollarized economy and a stable unit of account, you can be a bit more creative without worrying about these speculative attacks, because they have nothing to attack. So then you really start to play with actual issues that depend on credit creation, and the role of banks in society, and the workings of the payment system, and the velocity of circulation of money, and how the securities market operates. You can be more creative without worrying about issues like speculative attacks. For example, we have a neighboring country, Colombia. President Petro is also an economist. He’s pursuing a heterodox policy. But of course, the speculative attacks against the Colombian currency are there, and you have an Orthodox central bank that is not aiding or helping or contributing in that same heterodox orientation. So it’s much more difficult to be heterodox when you don’t have all the pieces aligned.

Scott Ferguson:  So do you still have a critique of dollarization, despite having a more nuanced, creative, heterodox, experimental approach to moving and creating institutions, and developing forms within a dollarized country?

Andrés Arauz:  Absolutely. Yeah, I’m critical. First, we have to understand that there are many dollarizations, right? I’m critical, absolutely, of dollar hegemony, for example. So this is geopolitical. This is a colonial thing. The south does not have to use a New York or Miami account to make payments between Uruguay and Peru. Why, right? So dollar hegemony, and the fact that dollar hegemony contributes to imperialist measures like economic sanctions, unilateral coercive measures that are destroying entire countries. Furthermore, if you put dollar hegemony together with transactional systems such as SWIFT that are a global monopoly, and if you cut them off SWIFT, you are also effectively cutting them off. And it’s basically being weaponized. Money as a weapon, and the plumbing of the system used as a weapon, I’m absolutely critical of dollar hegemony. I will continue to be so, and I will try to build alternatives because I don’t think the world has to subject itself to one country’s currency. I think that it has to be a global system, and that means going towards a more democratic, multilaterally-based economic monetary system. Just like it was dreamt decades ago, almost 100 years ago, by key thinkers such as Keynes: you have the Bancor, a global monetary asset. Of course, there are key power players. We cannot deny that, but let’s have a more balanced approach. Now, that’s one issue that has to do with dollarization. For example, dollarization of international transactions, of international trade, and so on. Then there’s the issue of domestic economies and adopting the dollar for domestic means of payments. Like I said, one thing is the dollar as a unit of account. Another is the dollar as the actual physical means of payment that people use on the street. I think that even if you’re dollarized de jure like my country is, it’s best to try to replace the physical dollar used for means of payment domestically with electronic means of payment, and keep the physical dollars as international reserves for the current international system that requires that you use the US dollar. That way you free up dollars that you’re using for domestic payments that you don’t really need to better import equipment, technology, and resources that you don’t have available in your own country. So I think there are nuances to all of this. And while I’m a critic of dollar hegemony, I think we have to recognize that until that changes, the dollar plays a key role in Latin America, and basically 99% of international transactions in the region. Many domestic prices in the region are pegged to the dollar de facto like real estate, in cars, of course imported technology, and then that sort of creeps into the rest of the prices in the economies. So the dollar is there. Now, how do you optimize that? How do you gain degrees of freedom? How do you get some policy space, a bit of sovereignty in that context, is what it’s all about. And that is independent of whether you’re a de jure dollarized country, or just a normal market economy with a domestic currency. But that has to comply with the rules of dollar hegemony. So I think there are many similarities in both approaches, and I think you can be a critic, and as well, be a proactive thinker, and policymaker, in that context.

Billy Saas:  So you are making the best of the situation, working in the dollarized economy, but it clearly was not the case, when Ecuador’s economy became dollarized, that they had these sort of advantages in mind. So can you talk a little bit about, you’ve been a critic before of President Jamil Mahuad’s decision, the administration’s decision in Ecuador, in 2000, and into 2001, to give up the Sucre and adopt the dollar as the state currency. Could you sort of tell us, what was their motive as you understand it? And why was that a particularly bad idea for Ecuador at the time?

Andrés Arauz:  It was a bad idea because it was a conspiracy. Now that Mahuad just came out with a book, and there are people that are doing a bunch of research. Marco Naranjo has also come out and said this was a conspiracy. He was the one guy who was planning dollarization five years before. You have declassified reports from the United States government saying that they actively pursued the dollarization of several economies in Latin America. It is not a coincidence that Ecuador accepted a US military base in Manta in 1999, and Ecuador was dollarized in the year 2000. There were only four months between both decisions., and, unless you believe in fairy tales, that’s fairly easy to link up in terms of the international political economy. Now, Mahuad was a terrible president, predominantly for what he did to the people of Ecuador. He was bankrolled and financed by bankers. He put bankers in the ministries, in the central bank, and everywhere. Private bankers, who did not quit their jobs as bankers while they were being government bureaucrats at the same time. So just plenty of conflict of interest, nasty policies, and so on. He started basically bailing out banks when the crisis came, which was not an accident. Again, crises are not natural disasters in the sense that there’s an unforeseen circumstance. Financial crises are anthropogenic in nature; they are manmade, they are engineered, if you will. And there is enough research into financial crises, especially from Hyman Minsky, and all of his disciples, and people that have studied him, we know how crises come about, and how they play out, and then how they eventually get resolved. So instead of preventing the crisis, instead of solving the crisis, Mahuad basically started pumping all this amount of money for the bankers, but at the same time, didn’t close the capital account or didn’t put exchange restrictions. So what the bankers immediately did was they got all this bailout money in Sucres and they literally just went through the revolving door of the central bank and came back with the Sucres and bought Dollars. Now if overnight, you have this increase of demand for dollars because of the huge supply of Sucres, that without any exchange rate restrictions, without any capital account restrictions, of course, you’re going to have a devaluation, depreciation of the local currency immediately. But this is not something that requires a genius mindset. This is sort of very, very basic. And they did it anyway to purposely weaken the local currency and justify the dollarization measure, which had been in the workings for quite a bit. So now, Mahuad 24 years later is trying to come out and say, “Oh, look, I wanted a dollarized economy. Look what would have happened if the Sucre kept devaluating,” and so on. But they did it on purpose. It’s not like it was an accident, and he cured the illness. It is that they created this crisis to justify the measure, so they weren’t thinking about the creative uses of dollarization. They had no idea about the actual workings of the dollarized economy or the balance sheet logic that you can apply. They were working on, basically, assumptions that you would renounce monetary policy, and that it would be a hard restriction on fiscal policy, as well. Basically, they said, if you have dollars, then the central bank cannot lend to the government anymore. And then, we’ll starve the beast, and then we’ll justify our privatization program, and so on. It was very purposely a neoliberal agenda. The law of dollarization was written, not in Ecuador. It was written in DC at the IMF, and then sent via fax to Ecuador to be copied and implemented. It’s a very long story, the story of how dollarization was implemented. But they didn’t see that we were going to be smart enough to find loopholes and creativities and creative solutions to that. For example, and I will mention this quickly, but starting in 2009, the central bank of Ecuador started to lend to the government, even though we’re dollarized. This completely blew their minds because it was like, “Isn’t dollarization supposed to forbid the central bank from creating money out of thin air?” No! You can still create dollars, right? You can still create dollars on a central bank’s ledger. They are just accounting dollars, right? Of course, you can’t go and print physical dollars, but you can still create dollars on the ledger, and then have them be transacted in the domestic economy. Sure, that creates an issue then later with a balance of payments, international reserves, but then you have to have a proactive balance of payments policy, like any developing countries should, in fact.

Scott Ferguson:  Isn’t this the case with Eurodollars, as well?

Andrés Arauz:  Yeah, I mean, that’s exactly. The thing is, when it’s private banks doing it, nobody has an issue with them creating dollars in their banks, and in the ledgers. That’s how offshore dollar banking systems also work, in general. I use the term “xenodollars” to be more etymologically correct. But yeah, that’s exactly how it works. What they didn’t like is that now a state institution, which was the central bank, was doing exactly the same, perhaps with even more care, with more oversight, with clearly defined parameters under a democratically accountable system than what private banks were doing, which was creating Ecuadorian dollars when they lent. That’s definitely something they didn’t have in mind in the year 2000. When the economy was dollarized, there was a huge crisis in terms of prices. Relative prices just got really messed up over the next year or so. Many economic activities became non-competitive overnight, and Ecuador could have collapsed, even as a country, except for one thing, which was that the crisis of the late 90s and dollarization created a mass migration of millions of Ecuadorians. We lost almost 15% of the population that went to live in the States, in Spain, and Italy, and then started sending remittances home. So it was this hard currency that was coming from abroad that basically saved the country from catastrophe.

Scott Ferguson:  You’ve been a vocal advocate for the development of a regional currency in South America called the S-U-R, the Sur. And this currency would be used instead of dollars in international cooperation and trade. Could you share with our listeners a little bit about the Sur currency and what its adoption will mean for member countries like Ecuador.

Andrés Arauz:  So the Sur is actually an initiative by President Lula, by former presidential and now Minister of Finance, Fernando Haddad, and his team. The Sur is not a currency like the Euro that wants to replace the national currencies. That’s something that I have to insist from the start: it is not a currency intended to replace national currencies. It’s a complementary currency. It’s a regional complementary currency that wants to contribute to the dynamics of intra-regional trade. Okay. So, right now a country like Argentina, in order to buy staples or equipment from Brazil, has to have Dollars in their reserves, and then it has to transfer those dollars to a Brazilian bank in order to get the equipment, the machine, or whatever, from Brazil. Why? Why? Then, of course, the logic of that is that the dollars aren’t in suitcases or wherever. The dollars are just accounts in US banks abroad. The dynamic of that is creating institutionalized capital flight because you have to have a liquidity pool, a bunch of money basically deposited abroad, that you cannot use for your developmental needs. So, by having the Sur, we’re basically setting up a payment system with a regional unit of account, the Sur. We have to still talk about how we’re going to value it, but most likely, it will be pegged to the SDR, the Special Drawing Right. And the Sur will avoid having to require US dollars for these international transfers, for these intra-regional international transfers. We can just use this unit of account for our purposes. Again, it does not resemble the Euro in the sense that it replaces national currency. More likely it resembles, even though I don’t like to use this example that much, the European Currency Unit, the ECU, which was an ancestor of the Euro. So you have a unit of account composed of a basket of currencies whose idea is: let’s avoid using an extra regional currency for inter regional trade. I think that will definitely create some flexibility and policy space for countries so that they can free up some of their reserves, and use those for technology and equipment that’s not available within the region; stuff that we may need to import from the US, Europe, or Asia. At first glance, it does not seem so ambitious. I am proposing to the working group that we start with a bit more ambition, which is allowing payments in Sur from any bank account in the region—twenty other bank accounts in the region—in real time, like the Brazilian Pix payment system is working. We already have the technology. We don’t really have to make anything up. All we have to do is connect the softwares, and the pointers, and the parameters, and we can get that rolling overnight. Why is this very important? Because in South America when people think about regional integration, sometimes they think it’s a thing about politicians, and presidential summits, and they gather once a year, all the flags are put together and they hug each other, and so on. But we need to make this very tangible and to build regional integration in such a way that it’s actually existing in people’s lives. And the way to do that is, I think, by making a democratic payment system where you can actually make transfers within the region, denominated in Sur in real time. That will be a big, big competitive leap compared to the legacy system, dollar based, SWIFT-based system that runs today.

Billy Saas:  That’s super helpful. Thinking a little bit more in terms of on the ground in Ecuador, there have been major indigenous uprisings over the last several years, indeed going back to the 1990s. Then, there was recently a call this past week by the Confederation of Indigenous Nationalities of Ecuador, or CONAIE, for more protests after one of their leaders, the chairman of CONAIE was arrested and detained. The CONAIE endorsed your candidacy and 2021, and I imagine you might like to have that endorsement again. Could you talk to us a little bit about your vision for the newly created Sur, and a reinvigorated Unasur, and how those will serve and advance the interests of Ecuador’s indigenous peoples? So thinking about on the ground, in material terms, how does this complimentary currency improve the lives of Ecuador’s indigenous?

Andrés Arauz:  First, CONAIE is an organization that I really respect. I think they have decades of political organization and work. They were, unfortunately after 2003 specifically, infiltrated and contaminated by different intelligence agencies—Local, neighboring, and foreign intelligence agencies—to try to break it apart because it was becoming a very powerful force, and they clearly had a left wing agenda. During the left wing progressive government of Correa, there was a lot of tension with CONAIE, but during my candidacy, we were able to find common ground, and to admit some of the historical mistakes that progressive forces had made, which allowed these foreign interests to penetrate such a valuable movement. Now, I didn’t have the endorsement of the entire CONAIE. I had the endorsement of the President of the CONAIE at the time, and let’s just say good relations with the rest. But specifically with the Amazonian indigenous peoples of Ecuador, which is the Confeniae. This year, we had protests in 2022 over several issues, among them, importantly, the price of gasoline and fuel. Of course, there was a packet or package of agreements that the government reached with CONAIE, but the government has, of course, continued their neoliberal agenda, because that’s what a private banker is there to do. There will probably be more protests. Now with the government, Lasso’s rampant banking corruption will probably come out in 2023, and we’ll see a change there. So that’s what’s happening in Ecuador. In Ecuador, what has always been my proposal is we need to build what’s called the historical block, which is reiterating the same forces that supported the new constitution of Ecuador in 2008. That sort of waned over time. We need to rebuild that and have that be strong again. So that involves an agreement, a political, social, and economic agreement with the indigenous movement and the Citizens’ Revolution which is the political space that I belong to. Now, the Unasur that is now in zombie status, but will not be for long because in the next few days, we’ll see Unasur have a rebirth, especially with Lula’s leadership. One of the reasons that I think Unasur failed—and I want to emphasize this is my perspective—was because it did not have a material or tangible effect on people’s lives. It remained as a general idea that was mostly around political circles. It was not a culturally ingrained concept. I see that Unasur cannot just be an integration of politicians or of states, it needs to be an integration of the peoples. And I use that term on purpose. The peoples of South America need to perceive that this thing is actually something that is useful to them. I think the way of doing that is, first, having the Sur allow all these transfers like I mentioned, in real time, denominated in the unit of account, which will be a thing that would materially impact trade in the region. You will get businesses, small, medium, and so on, to support this. You would also have an education pillar that would allow for students to have an exchange program; a year long exchange program in any of the countries in the region, both high school students and university students. That would also make it very concrete. The third thing is the thing that Evo Morales, former President of Bolivia has started, which is called Runasur. Runa, in other indigenous languages, means person or lay man, and it is, of course, a reference to an indigenous integration of the South. I think we have a key opportunity there in terms of the urgent needs for climate change, biodiversity, and above all, the respect of indigenous peoples. So I think that also will be a key pillar in strengthening the integration of the peoples. Hopefully, that can also become an integration of social movements. Why not, instead of having 12 different workers unions, for example, in a specific economic sector, just have a regional workers union with 12 chapters, or with local chapters. Just like a big organization, because transnational companies all work in that way; they operate in different countries, but they all respond to the logic of the headquarters. This is what we should do in terms of workers unions, women’s movements, students movements, indigenous peoples, and in general, the organizations that respond to the majority of people and our capital. So hopefully, not Unasur per se, because it’s more institutional space, but Runasur, which is the space of lay people, can also have a political union going forward. That’s why it’s important for the indigenous peoples of Ecuador to support that initiative, as well.

Scott Ferguson:  Are there critics of these complementary currency systems, either on the right or left or center? And if there are, what do you say in response to them?

Andrés Arauz:  Yeah, of course there are critics. People that think and believe that we should always just comply with the dollar hegemony and base all of our economy on the needs of US interests, and who are happy to have their double residence in Miami and another Latin American country. Unfortunately, this sounds caricature-esque, but this is what it is. Bolsonaro was a supposed nationalist and supposed Brazilian Jersey fan. Even before leaving the presidency, he went to live in Orlando, Florida and put on the Mickey Mouse hat. I don’t know if you saw it, but he also wore the US Soccer Jersey.

Scott Ferguson:  Oh yeah, we saw.

Andrés Arauz:  I mean for Latin Americans who are football fans, and we just had Argentina win the World Cup, it’s really symbolic. It’s pretty bad. That shows how these fascist nationalisms in Latin America say that Latin American Integration is bad, but somehow wearing the US Soccer jersey is good. It makes no sense whatsoever, but this is how they think. This is what’s in their mind. And that’s also where their wallets are, and what their bank accounts are, and where the property is. Lasso has 140 properties in Broward County and Miami Dade County, in Florida, so this is who they are. The elites, unfortunately, are more Miami-based than Latin American-based, and we will have to face that struggle, show these contrasts, and make that transformation happen.

Scott Ferguson:  Yeah, it’s a big middle finger. What about the center left and left? Because I think we’ve come up against many critics and oppositional forces, whether it’s in the British Labour movement, British Labour economists, or left wing media folks and activist in the United States who are not thinking with Post-Keynesian theories of endogenous money, are really thinking in these old fashioned, even classical hydraulic models of finite money redistribution. Do you come up against those kinds of criticisms from center left and left interlocutors?

Andrés Arauz:  Yeah, unfortunately, there is not enough education as to how money works. You have covered this extensively in the past, and yeah, we all have to face not just a radical idea, but then we have to also deconstruct the previous theoretical assumptions that even our peers or comrades are having in their day to day. A logic of understanding policymaking, or economics, or money to sort of rebuild from scratch and say, “Okay, now forget everything you know about this and let’s start all over.” Yeah, there’s that. Fortunately, I think, the pandemic and then before that the financial crisis, were lessons in what is scarcity? What is scarce money? What is money, where does it come from, and so on. Now, it’s very easy to point to that. All you have to do is show a graph or even show examples. It’s much easier than before. You know what else, actually? The crypto space, even though it doesn’t understand or doesn’t want to understand endogenous money, has at least opened the minds of people in terms of the discussion about money. So what they have done is popularize the issue of money to the point where now people are just more open minded, in general. And that’s also important, and it has also been key in opening the doors for these heterodox approaches, endogenous money, MMT, Post-Keynesianism, and so on. I think, also in academic circles, you’ve had key people and gatekeepers admit to the fact that that is how money works. The famous Bank of England paper, and so on, and we’re getting there. I still think we still have a lot of work to do in terms of how the formal education system talks about money and textbooks and stuff. If you go to a classic Econ 102, an introductory course in university, you still get brainwashed with other kinds of things. We still have to do a lot in terms of the curriculum and universities, especially in developing countries, which need to know this more. But I think we’ve definitely gone forward a lot, including with center and center left people in the region. That, by the way, the Post-Keynesians are pretty strong in Brazil, and that’s also a big one.

Billy Saas:  Awesome, I think one other area of concern for some people who might be interested in the Sur but worried is: what happens when the political tides change again? Hopefully they don’t ever, right? But say the Sur is built, implemented, and the gains of the left are lost over the next several years. Could the Sur not be weaponized against the countries in the region? What do you say to those folks who might have that kind of concern?

Andrés Arauz:  So my approach to policy making is, of course, planning. When I want to make these major transformations, such as when I was in the central bank or in other spaces, like the developing ministry, planning is central. Improvisation is bad. You need to plan. You need to make a short, medium, long term plan. You need to have the risks involved in there as well as plan for the risks, as well. And then something that most technocrats forget is, what those of us that have a bit of Marxist influence, is the correlation of forces. So how is the political economy? What’s the political economy for this? It’s thinking about sustainability in terms of political economy. Is this going to be reversible or not? Right? So that’s when we start having some implementation issues with some peers and colleagues on the left, because we just assume that we’re going to have power, and we’ll keep power forever, or for a very long time, and then people just get used to this somehow or another. That’s not how it works. We need to make sure that the political economy of this is sustainable over time so that the forces, the political and economic forces, sustain it over time. Like the example that I gave you with the credit unions, I can’t imagine Lasso, the banker, President of Ecuador, even after coming to the central bank, trying to turn off the switch, which disconnects 600 credit unions from the payment system. He will get sort of a massive push back and strikes, and it won’t happen, right? So we need to achieve that point of irreversibility in terms of the political economy, but also in terms of the usage of the system. So if three or four people use the system, whatever, they’ll disconnect it, and that’s it. But if you get many people using it, this is why I think it should be part of the regional payment system and get businesses, small and medium enterprises specifically, using the Sur payment system. We need to have a dynamic sector. We need to have even capitalist forces support the system saying: this is much cheaper than using the dollar-based SWIFT system. And have that incentive in place, as well. We need to sort of create incumbents that will defend the system, even when the left wing politicians are out of the game. That’s the kind of process building that we need to achieve, both in terms of the Sur and the Unasur. That’s why the economic pillar has to be in place, as well, and not just the other pillars of integration that happened in the past, such as the military union, or the health union, or the democracy union, or whatever. All of those can be stripped away as soon as the politicians are gone. When you have the fabric of society, an economic and productive fabric, that needs the regional system, then it’ll keep moving forward and it’ll become the incumbent. It will become a long lasting, sustainable project.

Scott Ferguson:  In December, you published a significant report for the Center for Economic and Policy Research (CEPR) titled “Putting Climate At The Core of IMF Governance.” To close out our conversation, would you mind giving our listeners a sense for what you are arguing for in that project?  Well, first, I’m really thankful to CEPR for opening the doors to my contributions, to my thoughts, to whatever I can do to coincide in terms of our priorities in an economic and policy arena. I’ve been studying the IMF for over a decade now. I’ve seen the IMF face to face, and I’m strongly versed with some of its policymaking, which strongly coincided with some of their issues like SDRs. I think SDRs are a very important instrument that, even though they’re not perfect, we should continue to push for them.

Billy Saas:  Special Drawing Rights, could you say just a little bit about the Special Drawing Rights?

Andrés Arauz:  SDRs, or Special Drawing Rights, are international money, international currency, that is created out of thin air. It’s endogenous money. And it’s political money: it was created as an international treaty to replace gold and the US Dollar as a reserve asset in the 60s. So it’s the thing that mostly resembles an international currency even though in the SDR basket, the US dollar has a large weight, like 40%, or something like that. It’s okay because it will have to recognize the realities of world power players. And hopefully one day, the Sur will be part of the SDR basket. That’s actually something that I am proposing should be one of the long term objectives of the Sur. We’ve been working with CEPR on promoting SDR use. Also with other organizations such as Latindadd, the Latin American Network of Economic Justice. Other organizations around the world like Oxfam, Arab Watch, and so on. Really, a large coalition has been built in civil society, and people who think and propose economic policy issues use SDRs beyond the narrow monetary reserve asset quality of them. I wrote a handbook for Latindadd saying, look: SDRs can actually become an instrument of fiscal policy. Then, that opens the door for central bank-Ministry of Finance coordination even though it’s taboo that many want to hide and not speak about until after the pandemic. Anyway, I really like SDRs, and I want to keep exploring and writing and mainstreaming them. But this other thing, this paper on putting climate at the core of IMF governance comes about because I started to read a lot of greenwashing from the IMF, especially in the RST, the Resilience and Sustainability Trust. They put out a climate strategy, and so on and so forth. Most of it is, unfortunately, sort of greenwashing: just basically saying that they’re going to work on climate issues, but not really incorporating that into the main logic of the functioning of the monetary system like they could. For example, they don’t mention the fact of the Petrodollar, the exorbitant privilege of the dollar issuer that can acquire extrasomatic energy needs from Petrostates just by printing their own money versus the rest of the world, and how that relates to historic CO2 emissions on behalf of the United States. So there are many issues that are systemic in terms of the relationship between climate and money that the IMF is not even touching with a stick. I thought that it would be interesting to say:  well, if you’re serious about climate change, if you’re serious about having systemic structural change with regards to the climate, let’s talk about how IMF governance has an incidence in that. I don’t know if you’ve seen this, but the Bridgetown agenda, which is basically being promoted by Prime Minister Mia Mottley of Barbados. She’s saying we need more SDRs so we can invest those SDRs in climate because if we just wait for the rich countries to give us money, that’ll never happen. Poor countries don’t have money on their own to do this, because you need hard currency. The next best thing to hard currency are SDRs, and they can be created out of thin air. Hey! We have the money to invest in fighting climate change. Let’s do it. And of course, then the rich countries are saying: hahaha, no, maybe later, let’s think about it…And they pretend not to hear. That all could happen if the IMF governance system could change a little bit. Right now, at the IMF, there is only one country that has veto power over the decision to create more SDRs, and that country is the United States. You can have veto power with 15% of the vote, and the United States has 17%. So you need to change that. You need to have more weight for developing countries, and especially for the countries that are vulnerable to climate change because they are the ones most desperate to actually make things change and make things happen. So in this paper, with my co-authors, we propose changing the formula of how the IMF voting share is distributed. How the votes are allocated within the IMF, among the different countries. All we do is very simple. There’s a formula with five variables: GDP, reserves, openness, amount of trade, and so on. And they have a weird variable called variability of capital flows. I have these five variables, and sure the biggest countries get the biggest voting share, but we just add one more variable, which is historic CO2 emissions. We say keep the same variables and divide the openness variable by the cumulative, historic CO2 emissions of that country so that we can include their degree of responsibility to climate change as part of the IMF form. We use non-ambiguous, objective metrics published by the Potsdam Institute for Climate to measure the country’s contribution to climate change via cumulative CO2 emissions. Of course, as you would expect, the United States voting share at the IMF falls from 17% to somewhere like 6%. China’s also falls significantly to somewhere like 6%. Rich countries, in general, all fall significantly, and developing countries, in general, increase their voting share significantly, especially small island developing states. So those that risk being destroyed, those at risk of disappearing from rising sea levels, are actually the ones that increase the most, from around 2% to around 20% of IMF voting share. That would have a significant impact on the entire monetary system, the practices of IMF lending, the logic of power within the institution, and they would actually have a transformational impact on how the world, how the planet, deals with climate change. The IMF is a powerful institution with a trillion dollars of lending power. That’s not counting how much money it can create via the SDRs, and it’s not counting the influence that it has over financial markets, and not counting the influence that it has over local policymakers in terms of the ideas of money, the ideas of policymaking, the ideas of fiscal management, monetary policy, and so on. I think if we start from the core, then we can have far reaching effects. Of course, I’m not naive to think “oh, wow, how could we not think of this and have the US accept this change overnight?” That’s not gonna happen. But at least we’re putting the discussion forward so that we can understand the true magnitude of this reality.

Billy Saas:  We will, of course, link to that on CEPR and your other work there. Andrés Arauz, it has been an absolute pleasure talking with you. Thank you so much for joining us on Money On The Left.

Andrés Arauz:  Thank you all! I hope we get another chance to share some more stories about CDBCs and what’s happening in that space, as well. I’m quite involved in that area, as well. I’m advising a tech company called Nym on that issue. I would also like to talk about creating unions, financial inclusion in the solidarity sector and the role that money plays there. So yeah, in general, I’d love to share this on another occasion with you and it’s been a pleasure talking to you all.

Spanish Transcript

The following was translated by Sisa Pacarina Tixicuro Duque and has been lightly edited for clarity.

Billy Saas:  Andrés Arauz, bienvenido a “Money On The Left”.

Andrés Arauz:  Muchas gracias por recibirme. Me complace estar aquí. Vengo siguiendo su trabajo desde hace unos meses y años, y me alegra estar aquí.

Billy Saas:  Oh, qué emocionante saberlo! Estamos encantados de tenerte aquí con nosotros, y más ahora, que estamos viviendo un momento histórico en Latinoamérica, puesto que seis (hace muy poco, siete) de los países más poblados, incluida por primera vez Colombia, están siendo gobernados por líderes con ideas políticas progresistas de izquierda. ¿Cómo calificarías este momento y su importancia de cara al futuro de la región?

Andrés Arauz:  Bueno, este es un momento muy emocionante para los progresistas, sobre todo para la gente en Latinoamérica que ya vivió la primera Marea Rosa, la primera corriente progresista en la región. Desde luego, ahora hay un poco más de madurez en el entorno progresista, en general, y pienso que hemos aprendido un par de lecciones. Una de las más importantes que hemos aprendido es la importancia de la integración regional. ¿Verdad? Así pues, sabemos que un país por sí solo no cambiará el mundo. Un país por sí solo no cambiará la dinámica fundamental del sistema mundial, ni saldrá, de manera sostenible, de la pobreza, ni tampoco transformará su economía, su base industrial, etcétera. Ya sabemos que eso sólo puede lograrse con un plan regional o de integración. Y creo que definitivamente eso se ha incorporado a la agenda de la izquierda. Por eso este es un momento crítico en la historia, pues ahora vemos que el Presidente Lula, que acaba de llegar al poder hace sólo 10 días en Brasil, ya se ha enfrentado al primer intento golpista. Él ha declarado que la integración regional, concretamente con los países sudamericanos, es una de sus prioridades clave en su política exterior. Así que esto es emocionante para nosotros, con el liderazgo de Lula, desde luego, la situación en la región cambia por completo. Observamos que fuerzas extrarregionales como Estados Unidos también han tomado nota de este giro hacia la izquierda, y eso tiene repercusiones para toda la región. Esperemos superar todos estos intentos golpistas y amenazas violentas contra las fuerzas progresistas. Y esto puede ser no solamente una reacción, una resistencia frente a las fuerzas del Imperio, las fuerzas del Neocolonialismo que amenazan la política progresista en toda la región, sino que realmente seamos capaces de construir algo. Y pienso que lo monetario, la cuestión financiera, es sin duda algo que podemos conseguir en un corto período de tiempo. Dada las dinámicas electorales en la región, quisiera insistir en que para Latinoamérica y los políticos progresistas y quienes dirigen los países, no contamos con un lapso de tiempo infinito. Disponemos de una brecha de oportunidades muy limitada, que es justamente este año, 2023. Si traspasamos ese plazo, probablemente será mucho más difícil, debido a las coyunturas políticas internas, las fuerzas de correlación, etcétera. Así que considero que este año es el año del trabajo duro, y de poner las piezas en orden y echarlas a andar.

Scott Ferguson:  Entonces, ¿cómo interpretarías la situación de Ecuador en este momento histórico en particular? Y yo me pregunto, según tu experiencia, aprovechando esta peculiar apertura histórica, ¿cómo has conseguido hablar sobre dinero y finanzas públicas desde un punto de vista heterodoxo y comunicarlo a las personas comunes y corrientes?

Andrés Arauz:  De acuerdo, empecemos con el papel de Ecuador en todo esto. Ecuador, por desgracia, ahora mismo está dirigido por la antítesis del dinero progresista con la política, es decir, un banquero. Un banquero multimillonario neoliberal, que se ha alineado completamente con el FMI en su asesoramiento y formulación de políticas convencionales, y de la vieja escuela, y demostrado eficazmente que son falsas e incorrectas, y está llevando al país a una gran crisis económica. Ecuador es probablemente el país que menos se ha recuperado tras la pandemia. En general, realmente no ha crecido a causa de una política monetaria y fiscal muy restrictiva. Él está promoviendo la fuga de capitales como parte de la política del gobierno. Ayer mismo, o no sé cuándo saldrá al aire, pero muy, muy recientemente, acaba de anunciar que eliminará el impuesto a la salida de divisas que tenemos en Ecuador. Existe desde hace tiempo. Así que eso promoverá la salida de capitales. Pero la cosa es que en realidad su principal línea de negocio como banquero es poseer un banco offshore con sede en un centro offshore en Panamá, en el que aproximadamente entre el 80 y el 85% de todos los depósitos proceden de ecuatorianos ricos. Así que es realmente muy complicado para cualquier país. Pero para mi país, es realmente doloroso, ¿sabes? Cuando tienes un presidente cuya principal línea de negocio es promover la fuga de capitales a su banco offshore con sede en Panamá. Por supuesto, toda la política se cambia para adaptarse a su línea de negocio. Y es bastante absurdo, pero también un poco repugnante, porque no ha abandonado el banco, no ha puesto sus acciones en un fideicomiso ciego o lo que sea. No, él ha sido explícito acerca de mantener su propiedad, y eso es muy lamentable. Además, porque si uno se aleja un poco y amplia la visión, verá que este es el tipo de personaje que se opondría a un rol proactivo como lo ha sido siempre la política exterior ecuatoriana, salvo este gobierno, para ser parte de una fuerza regional. Formar parte de un bloque regional. Así que lo más probable es que se oponga a todas estas iniciativas, y es muy lamentable porque hasta hace muy poco, Ecuador era la capital de UNASUR: era la sede de la Unión Sudamericana. El ex Presidente Moreno, que traicionó su programa, y ahora Lasso, han renunciado, a que Ecuador fuera la Capital de Sudamérica, la ciudad de Quito. Por fortuna, en cambio, la población ecuatoriana es notablemente progresista. Así, en las últimas elecciones, a las que me postulé, la población ecuatoriana votó alrededor de un 70% a parlamentarios progresistas. El resultado presidencial no fue exactamente el mismo: perdí por poco. No obstante, el parlamento es mayoritariamente progresista con socialdemócratas, con progresistas de lo que llamamos el movimiento indígena de fuerzas plurinacionales. Representan más de dos tercios del parlamento. Y la población, en general, también es bastante progresista. Por tanto, esto significa que, más temprano que tarde, la población de Ecuador dará un paso al frente, empezará a ejercer sus derechos democráticos y probablemente se produzca un relevo en la administración. Es muy poco probable que el actual presidente sea reelegido. Y tendremos un gobierno progresista que se alineará con el proyecto de integración regional. También me preguntaste sobre cómo abordar la política financiera y económica heterodoxa dentro de este contexto, y tengo varios, digamos sombreros que me pongo todo el tiempo. En el contexto de mi propio país, soy principalmente un actor político. Tras las elecciones de hace dos años, se me considera un actor político, lo que me da la oportunidad de aparecer bastante en los medios de comunicación. Supone para mis redes sociales la oportunidad de contar con muchos seguidores, y ahí es importante procurar transmitir el mensaje adecuadamente. He intentado compartir mis conocimientos en un lenguaje sencillo y con un vocabulario bastante fácil, pero principalmente mostrando contrastes. Pienso que ha sido una forma muy eficaz de comunicarse con la gente, con amplios segmentos de la población, contrastando las recomendaciones políticas o las políticas monetarias ortodoxas, la política monetaria o la política económica en general, frente a lo que se puede conseguir con un planteamiento heterodoxo. Ese es el sombrero que uso dentro de Ecuador, pero fuera del país, tengo, quizás, más reluciente el sombrero académico. Empleo mis conocimientos para comunicarme con los especialistas y los medios de comunicación especializados, con aquellos que, tal vez, hacen un seguimiento general de las instituciones financieras internacionales, y trato de utilizar ese tipo de lenguaje para reafirmar e insistir en mi acreditación académica, lo cual creo que también es importante en términos de construcción de legitimidad. Más o menos eso es lo que hago. Trabajo en varios espacios, pero siempre en torno a cuestiones relacionadas con las finanzas y la tecnología. Me siento bastante feliz en ese espacio y trato de cambiar el mundo con mis conocimientos, mi capacidad intelectual, con las redes que puedo tratar de establecer. Espero que también podamos aprovechar eso para seguir desarrollando y transformando mi propio país.

Billy Saas: A la hora de realizar esta labor de comunicación, ¿hay otros intelectuales que modelen el tipo de comunicación al que aspiras? Y dentro del amplio espectro de la economía heterodoxa, ¿hay alguna escuela o perspectiva a la que recurras más a menudo?

Andrés Arauz: No he tenido en mente a ninguna persona en concreto como referente de comunicación. He estado en contacto con muchos líderes y pensadores económicos. No puedo negar el increíble e importante modelo que ha sido, por ejemplo, Rafael Correa en cuanto a comunicación de política económica. Él solía emitir un programa de radio semanal en el que explicaba la política económica y la política gubernamental a toda la población. Fue un programa que duraba entre dos y cuatro horas cada sábado. Y luego, por supuesto, explicar los temas de forma sencilla y comunicárselos a la gente utilizando diapositivas de PowerPoint y demás también fue, creo, algo que no sólo me afectó a mí, sino que fue un estilo de comunicación con el que todos en mi país llegaron a familiarizarse. En términos de pensamiento económico, sin embargo, reconozco definitivamente la influencia de muchos economistas latinoamericanos que han existido desde Raúl Prebisch; estructuralistas y pensadores de la teoría de dependencia. Más recientemente, la influencia de los post-keynesianos ha sido muy significativa en mi pensamiento y práctica económica. Diría que me adscribo al post-keynesianismo más extenso, y dentro de esa amplia escuela hay muchos grupos más pequeños, y a mí me gusta recopilar elementos de todos ellos. Realmente me han llegado a gustar algunos de los principales elementos recopilados por los separatistas, la escuela separatista francesa junto con algunos italianos también. Mi trabajo doctoral abarca muchos de sus trabajos. Concretamente, Augusto Graziani porque me especialicé en sistemas de pagos, y en la dinámica del dinero, y el papel de los bancos, etcétera. Y también me gusta tener eso en cuenta. Pero además, y esto es quizás algo que está más relacionado con el contexto latinoamericano, está lo que yo llamo la escuela de la Economía Solidaria. La Economía Solidaria es muy importante en nuestra región porque nosotros llegamos tarde al proceso de industrialización. Llegamos tarde al capitalismo mismo. Hemos estado bajo economías básicamente feudales hasta bien entrado el siglo pasado, el siglo XX. La Economía Solidaria es importante porque es una forma de incluir a los que fueron excluidos por el sistema capitalista. Si analizas mi país, o mis vecinos, entre el 70 y el 80% de la población en edad de trabajar no es trabajadora formal. No están bajo una relación capital-trabajo. Son básicamente sobrevivientes en un sistema en el que tienen que encontrar la manera de sobrevivir cada día. Eso no encaja en ninguna teoría económica definida, así que la Economía Solidaria trata de explicar: vale, ¿qué podemos hacer las personas que hemos sido excluidas del sistema? Salvémonos los unos a los otros. Cooperemos. Construyamos una comunidad. Construyamos un sistema económico cooperativo en el que podamos reconocer que estamos parcialmente excluidos del capital y del capitalismo, pero tenemos que dialogar con el capital y el capitalismo. Estamos parcialmente excluidos del Estado, pero también tenemos que interactuar con el Estado. Estamos divorciados de nuestras propias realidades porque tenemos que sorbrevivir. Además, tenemos que trabajar juntos. Tenemos que convertirnos en cooperativas, tenemos que juntarnos en asociaciones. Incluso sin ser un sindicato, o una Unión de Trabajadores, tenemos que unirnos para poder negociar en mejores términos con las fuerzas que nos gobiernan. Considero que la Economía Solidaria tiene una influencia muy importante y marcada en mi forma de concebir el desarrollo. Sí, probablemente hay muchos más que me estoy saltando ahora mismo, pero desde luego algunos de los que he mencionado.

Scott Ferguson:  En 2021, cuando te presentaste a las elecciones presidenciales de Ecuador y estuviste a punto de ganarlas, la prensa destacó que hubieras sido el presidente más joven de la historia del país. No obstante, para nosotros resulta tanto o más extraordinario que hayas ocupado el cargo de Director del Banco Central de Ecuador con tan solo 24 años de edad. ¿A qué se debe esta situación? En primer lugar, ¿qué te llevó a dedicarte a la política monetaria?

Andrés Arauz: Sin duda debería mencionar a mi director de tesis de maestría, Pedro Páez Pérez. Él fue muy importante en mis primeras etapas de desarrollo profesional. De hecho, obtuve mi licenciatura en Ciencias en la Universidad de Michigan Ann Arbor, en matemáticas y economía, y después volví a Ecuador y empecé a cursar una maestría en ese país. Por lo general, el orden suele ser el inverso: la gente obtiene un título a nivel local y luego hace una maestría en el extranjero. En mi caso, lo hice al revés. En realidad, fue muy, muy útil porque cuando ingresé en la FLACSO, una universidad latinoamericana que tiene sedes en distintas partes de la región, en mi caso Ecuador, creo que todos mis profesores iban a convertirse en ministros de finanzas, planificación, desarrollo, banco central, etcétera. Mi director de tesis, Pedro Páez, había sido investigador del Banco Central, de modo que cuando se convirtió en Ministro de Políticas Económicas, yo pasé a ser su asesor.  De hecho, tenía 22 años cuando fui asesor del Ministro de Políticas Económicas. Yo estaba a cargo de lo que llamábamos la nueva arquitectura financiera, que básicamente proponía una transformación del sistema financiero nacional, pero también trabajábamos en la transformación del sistema financiero sudamericano y sus instituciones. Trabajé con él en muchos de esos temas, y llegué a conocer el Banco Central desde fuera. Fui asesor del ministerio, pero casi todo mi trabajo tenía que ver con el Banco Central. De modo que pude criticarlo constantemente y presionarles para que hicieran cambios, etcétera. Cabe mencionar que, antes de todo esto, yo había trabajado ya en el Banco Central. Trabajaba como experto en estadísticas de balanza de pagos, y mi trabajo me permitía ver las transacciones individuales de dinero que entraban y salían del país. Pude ver nombres de personas, nombres de empresas, y ese conocimiento siempre ha sido valioso para mí porque cuando un economista va y encuentra las estadísticas, ve un montón de números, ve un montón de agregados, intenta construir una historia en términos generales, en conceptos generales. Pues bien, cuando yo veo estadísticas, y estos números, no veo historias generales ni conceptos generales. Veo personas. Veo empresas. Conozco su comportamiento. Conozco sus patrones. Conozco exactamente de quién estamos hablando gracias a la experiencia que tuve hace más de 15 años. Así que eso es definitivamente una ventaja cuando se construye la política, cuando se sabe lo que compone las estadísticas, y en qué medida es también sólo palabrería y cuánto es en realidad la construcción de estadísticas rigurosas. Siempre he pensado que las estadísticas, y por tanto la contabilidad, son absolutamente cruciales si realmente quieres hacer un análisis económico riguroso. Por eso a veces me río cuando veo a colegas que presentan modelos econométricos muy bonitos y utilizan números como si fueran una especie de ciencia exacta y pura, mientras que muchas de esas estadísticas son pura invención y tienen grandes deficiencias, o deficiencias muy grandes y significativas. He escrito bastante sobre los problemas de las estadísticas monetarias y de balanza de pagos. En fin, retomando el tema, yo fui asesor del Ministerio de Políticas Económicas, y ahí tuvimos un gran problema porque el Banco Central de Ecuador había sido dirigido, quizás durante dos décadas, por la gente más conservadora y ortodoxa del país, y con claros vínculos hacia los banqueros más poderosos. Así que en 2008, bajo el gobierno de Correa, redactamos una nueva Constitución de Ecuador, que supuso un proceso muy interesante de democratización legislativa. Tuvimos miles y miles de personas que propusieron enmiendas, y cambios, y redacción, etcétera, de la Constitución. Y al final, realmente pienso que la Constitución ecuatoriana es una obra de arte. Es muy progresista, está orientada al futuro, y una de las cosas que hizo la Constitución fue modificar la naturaleza del Banco Central. Dictó que el Banco Central ya no sería independiente. Ya no sería autónomo, que sería responsable democráticamente ante las fuerzas democráticas, y por lo tanto formaría parte del poder ejecutivo. Ahora bien, también somos un país dolarizado, pero con un Banco Central que no es independiente, que estaba dirigido como una rama, en efecto, del gobierno ejecutivo, y el Presidente era un economista doctorado. Bien, así que este fue un momento muy especial en esa época. Y si ese sujeto quería que el Banco Central también cumpliera con los nuevos mandatos constitucionales, que también cambiaron para el Banco Central. Por ejemplo, la inclusión financiera es un objetivo constitucional, no sólo la inflación o lo que sea. Existe una lista de mandatos constitucionales para el Banco Central. Entre el personal del Banco Central no habría nadie que entendiera, y mucho menos que estuviera en consonancia con los nuevos objetivos constitucionales. Así que como yo tenía formación monetaria y estaba especializado en esos temas, y conocía el banco central tanto desde dentro como desde fuera, porque había podido vivir dentro de su marco, pero también criticarlo desde fuera. Llegué a ser director general de la banca, que es básicamente el encargado de las operaciones del Banco Central. Fue un momento muy feliz para mí porque era bastante joven, pero ya se me podía considerar, quizás, un experto en asuntos de la banca central. Además, conocía el funcionamiento del sistema de pagos, las áreas de gestión de reservas, los sistemas de pagos internacionales y las instituciones financieras. Poseía excelentes conocimientos de contabilidad, algo fundamental para dirigir un banco central. Además, tenía la orientación política correcta respecto a cuáles eran las transformaciones clave que tenía que lograr dentro del Banco Central para, en lugar de destruir la institución, potenciarla para que cumpliera estas nuevas funciones constitucionales. Así que desempeñé un papel clave en la transformación del Banco Central para convertirlo en lo que sigue siendo hoy, aunque ahora tengamos, de nuevo, un gobierno conservador. Pero como introdujimos cambios muy importantes, inclusive en la cultura misma del Banco Central, creo que es difícil que puedan revertir todo eso. Así es como surgió todo esto. Es una historia muy bonita, y por desgracia creo que difícilmente podrá repetirse en cualquier otra parte del mundo, pero hay muchas cosas que, al margen, pueden hacerse para utilizar el inmenso poder que tiene cualquier banco central en cualquier sociedad para democratizar esa sociedad, para democratizar sus economías.

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Billy Saas: Pasar de ser un crítico de la gestión del Banco Central a alguien que, de hecho, lo dirige, ¿te ha traído sorpresas o lecciones aprendidas en tu nuevo papel dentro del banco? ¿Hubo alguien que ocupara tu lugar como crítico desde fuera? ¿Y cómo fueron esas críticas hacia tu trabajo?

Andrés Arauz:  Pues, sinceramente, no. En aquel momento no hubo fuertes críticas porque, como he dicho, íbamos avanzando muy deprisa.

Billy Saas:  Claro.

Andrés Arauz: La academia en Ecuador estaba dominada por el pensamiento neoliberal de los neoclásicos y no se pensaba realmente en una política monetaria heterodoxa, entre otras cosas. El sistema de pagos era algo que estaba completamente al margen de la discusión, fuera del debate. No había nada de eso. El papel proactivo del Banco Central en la economía había quedado en el olvido durante los últimos 20 o 30 años, y así sucesivamente. De modo que los académicos, incluso los de derecha, no tenían ni idea de lo que estábamos haciendo. Examinaban los balances y no podían entenderlo. Ni siquiera sabían cómo leer los balances, porque durante mucho tiempo habían dejado de lado ese tipo de formación. Así que los primeros años no hubo realmente ninguna crítica, pero no porque no sintieran que algo iba mal, sino porque no sabían qué hacer al respecto. Además, habíamos expulsado de nuestro país al FMI y al Banco Mundial. Expulsamos al Banco Mundial del país. El FMI seguía en el país; ocupaban una gran oficina en el Banco Central y ni siquiera pagaban alquiler. Así que dijimos: “no, si no pagan alquiler, los echamos del edificio”. Y por supuesto, tampoco tenían mucho acceso a lo que ocurría dentro del Banco Central. De modo que no había nada que pudieran hacer o decir durante ese periodo porque estábamos haciendo cambios en las cañerías del sistema. Por ejemplo, estábamos trabajando en la democratización del sistema de pagos mediante algo tan sencillo como la adaptación de los requisitos de telecomunicaciones para conectarse al sistema de pagos, y para poner a disposición de las cooperativas de crédito una versión ligera del software. En Ecuador, teníamos más de 600 cooperativas de crédito que funcionaban, pero no estaban incluidas en el sistema de pagos. Por tanto, no podían ofrecer el mismo tipo de servicios financieros, transaccionales, pagos de salarios públicos, etc., que los grandes bancos. Así que, simplemente democratizando el sistema de pagos, se produjo una revolución en la base de la pirámide, donde las cooperativas de crédito rurales de repente se convirtieron en una fuerza importante en el sistema económico. Estos sujetos formaban parte del sistema de Economía Solidaria, por lo que también integraban otro sistema de valor. No solamente bancos capitalistas, ¿verdad? Sólo democratizando el sistema de pagos -algo que hicimos al margen de la opinión pública o de los medios de comunicación- pudimos introducir cambios importantes. Ahora bien, cuando empezaron a darse cuenta, me refiero básicamente a académicos de derecha, expertos de la oposición, etc., fue cuando iniciamos el lanzamiento de lo que llamamos el sistema de dinero móvil. Ecuador fue el primer Banco Central de moneda digital. Hoy día es una novedad. Pero nosotros hicimos esto hace 10 años, y el proyecto empezó en 2009. O sea que esto fue hace como 15 años, 14 años. Modificamos la normativa para que los ciudadanos, cualquier ciudadano, solo necesitara un número de identificación nacional, su cédula de identidad, como único requisito para abrir una cuenta en el Banco Central. La moneda digital del Banco Central se llamaba por aquel entonces, dinero móvil. Se diseñó de tal manera que, quizás, fue otra muestra de mi forma de concebir la tecnología, las tecnologías apropiadas, en lugar de las tecnologías de vanguardia o lo último en innovación. Hay que hacer que la tecnología se adapte a las necesidades de la gente, no…

Scott Ferguson:  Interrumpa.

Andrés Arauz: Exacto, entonces contábamos con este dinero móvil que funcionaba en los teléfonos más básicos, sin necesidad de tener un smartphone, sin necesidad de tener un plan de datos. Basta con marcar un código corto, y tenías acceso a todo un sistema para realizar transacciones. Y ahí fue cuando la oposición derechista empezó a criticar. Yo ya estaba fuera del Banco Central cuando se lanzó, pero fue entonces cuando empezaron a darse cuenta de algunos de los principales problemas. En parte, porque una de las figuras principales que reclutaron fue un antiguo miembro del Banco Central, que luego pasó a trabajar para la Asociación de Banqueros Privados y ahora trabaja en el FMI. Así que esta persona es quizás el único que pudo educar a la derecha en cuanto a lo que realmente estaba sucediendo. Y ahora está solo unos 10 o 14 años después, escribiendo sobre lo que hicimos en 2009, 2010 y 2011 con una perspectiva crítica. Pienso que les llevó un tiempo entender lo que estaba pasando. La gente, cuando piensa en un país dolarizado, suele decir: ” perdiste tu política monetaria y estás arruinado”, etcétera. Eso no es cierto porque cuando entramos en el Banco Central, y cuando yo era asesor en el Ministerio de Políticas Económicas, dijimos mira, por supuesto que una dolarización ortodoxa elimina todas esas herramientas y posibilidades y políticas y uno simplemente renuncia y dice: “Renuncio a todo y dejo que los mercados dominen”. Pero con una dolarización heterodoxa, estas forzado a ser creativo.Tendrás una ventaja, y es que dispondrás de una moneda estable, lo que en realidad supone un reto para muchos países en desarrollo que intentan aplicar una política económica heterodoxa. Se producen devaluaciones, depreciaciones, la gente pierde la fe en la moneda a causa de los expertos y los mercados que reaccionan rápidamente. Sin embargo, cuando se tiene una economía dolarizada y una moneda estable, se puede ser un poco más creativo sin preocuparse por estos ataques especulativos, porque no hay nada que atacar. Entonces se empieza a jugar con cuestiones concretas que dependen de la creación de crédito, del papel de los bancos en la sociedad, del funcionamiento del sistema de pagos, de la velocidad de circulación del dinero y del funcionamiento del mercado de valores. Se puede ser más creativo sin preocuparse de cuestiones tales como ataques especulativos. Por ejemplo, tenemos un país vecino, Colombia. El Presidente Petro también es economista. Está llevando a cabo una política heterodoxa. Pero, naturalmente, los ataques especulativos contra la moneda colombiana están ahí, y tienes un Banco Central ortodoxo que no está ayudando ni contribuyendo en esa misma orientación heterodoxa. Así que es mucho más difícil ser heterodoxo cuando no tienes todas las piezas alineadas.

Scott Ferguson: Entonces, ¿continúas criticando la dolarización, a pesar de tener un enfoque más sutil, creativo, heterodoxo y experimental a la hora de mover y crear instituciones, y desarrollar distintas estructuras en un país dolarizado?

Andrés Arauz:  Por supuesto. Sí, soy crítico. Para empezar, hay que entender que existen muchas dolarizaciones, ¿no? Soy crítico, rotundamente, por ejemplo, de la hegemonía del dólar. Así que esto es geopolítico. Se trata de una cuestión colonial. El sur no tiene por qué usar una cuenta en Nueva York o en Miami para hacer pagos entre Uruguay y Perú. ¿Por qué? Pues por la hegemonía del dólar, y por el hecho de que la hegemonía del dólar contribuye a medidas imperialistas como las sanciones económicas, medidas coercitivas unilaterales que están destruyendo países enteros. Además, si pones la hegemonía del dólar junto con sistemas transaccionales como SWIFT que son un monopolio global, y si les cortas SWIFT, también estás cortando de manera efectiva. Y básicamente se está convirtiendo en un arma. El dinero como arma, y la cañería del sistema utilizada como arma, soy absolutamente crítico con la hegemonía del dólar. Seguiré siéndolo, y trataré de construir alternativas porque no creo que el mundo tenga que someterse a la moneda de un solo país. Pienso que tiene que ser un sistema global, y eso significa ir hacia un sistema monetario económico más democrático, de base multilateral. Tal como lo soñaron hace décadas, hace casi 100 años, pensadores tan importantes como Keynes: tienes el Bancor, un activo monetario global. Desde luego, hay actores clave del poder. No podemos negarlo, pero adoptemos un enfoque más equilibrado. Ahora bien, esa es una cuestión que tiene que ver con la dolarización. Por ejemplo, la dolarización de las transacciones internacionales, del comercio internacional, etcétera. Luego está la cuestión de las economías domésticas y la adopción del dólar como medio de pago doméstico. Como he dicho, una cosa es el dólar como unidad de cuenta. Otra es el dólar como medio de pago físico real que la gente utiliza en la calle. Creo que incluso si se estás dolarizado, como mi país, lo mejor es intentar sustituir el dólar físico utilizado como medio de pago interno por medios de pago electrónicos, y mantener los dólares físicos como reservas internacionales para el actual sistema internacional que exige el uso del dólar estadounidense. De este modo se liberan dólares que se utilizan para pagos internos y que realmente no son necesarios para importar equipos, tecnología y recursos de los que no se dispone en el propio país. Así que creo que hay matices en todo esto. Y aunque soy un crítico de la hegemonía del dólar, creo que tenemos que reconocer que hasta que eso cambie, el dólar juega un papel clave en América Latina, y básicamente en el 99% de las transacciones internacionales de la región. En la región, muchos precios internos están vinculados de facto al dólar, por ejemplo los de la propiedad inmobiliaria, los automóviles y, por supuesto, la tecnología importada, y eso se extiende al resto de los precios de las economías. Así que el dólar está ahí. Ahora, ¿cómo optimizar eso? ¿Cómo ganar grados de libertad? De lo que se trata es de conseguir cierto espacio político, es decir, un poco de soberanía en ese contexto. Y eso es independiente de si eres un país dolarizado, o simplemente una economía de mercado normal con una moneda nacional. Pero se tiene que cumplir las reglas de la hegemonía del dólar. Así que creo que hay muchas similitudes en ambos enfoques, y creo que se puede ser crítico, y también un pensador proactivo, y un responsable político, en ese contexto.

Billy Saas: De modo que estás sacando el mejor partido de la situación, trabajando en una economía dolarizada, pero es evidente que, cuando la economía ecuatoriana se dolarizó, no tenían en mente este tipo de ventajas. Has criticado la decisión del presidente Jamil Mahuad, la decisión de la administración ecuatoriana, en 2000 y en 2001, de abandonar el Sucre y adoptar el dólar como moneda del Estado. ¿Podrías explicarnos cuáles fueron, en tu opinión, sus motivos? ¿Por qué fue una mala idea para Ecuador en aquel momento?

Andrés Arauz: Fue una mala idea porque se trataba de una confabulación. Ahora Mahuad acaba de sacar un libro, y hay gente que está investigando mucho. Marco Naranjo también ha dicho que esto fue una conspiración. Él fue el que estuvo planeando la dolarización cinco años antes. Hay informes desclasificados del gobierno de Estados Unidos que dicen que buscaban activamente la dolarización de varias economías en América Latina. No es una coincidencia que Ecuador aceptara una base militar estadounidense en Manta en 1999, y que fuera dolarizado en el año 2000. Sólo hubo cuatro meses entre ambas decisiones y, a menos que se crea en cuentos de hadas, eso es bastante fácil de vincular en términos de economía política internacional. Ahora bien, Mahuad fue un pésimo presidente, sobre todo por lo que le hizo al pueblo de Ecuador. Él fue financiado por banqueros. Colocó banqueros en los ministerios, en el Banco Central y en todas partes. Banqueros privados, que no dejaron sus cargos de banqueros mientras eran burócratas del gobierno a la vez. Por lo tanto, un montón de conflictos de intereses, políticas repugnantes, y así sucesivamente. Él empezó básicamente a rescatar bancos cuando llegó la crisis, lo cual no fue un accidente. Nuevamente, las crisis no son desastres naturales en el sentido de que existe una circunstancia imprevista. Las crisis financieras son de naturaleza antropogénica; son provocadas por el hombre, son diseñadas, por así decirlo. Y existe mucha investigación sobre las crisis financieras, especialmente de Hyman Minsky, y todos sus discípulos, y las personas que lo han estudiado, sabemos cómo surgen las crisis, y cómo se desarrollan, y luego cómo se resuelven finalmente. Así que en lugar de prevenir la crisis, en lugar de resolver la crisis, Mahuad básicamente comenzó a bombear toda esta cantidad de dinero para los banqueros, pero al mismo tiempo, no cerró la cuenta de capital o no puso restricciones de cambio. Así que lo que los banqueros hicieron inmediatamente fue recibir todo este dinero de salvataje en Sucres y, literalmente, pasaron por la puerta giratoria del Banco Central y retornaron los Sucres y compraron dólares. Ahora bien, si de la noche a la mañana se produce este aumento de la demanda de dólares debido a la enorme oferta de Sucres, sin ninguna restricción del tipo de cambio, sin ninguna restricción de la cuenta de capital, por supuesto, se va a producir una devaluación, una depreciación de la moneda local de forma inmediata. Pero no se trata de algo que requiera una mente brillante. Esto es algo muy, muy básico. Y lo hicieron de todos modos para debilitar a propósito la moneda local y justificar la medida de dolarización, que había estado en marcha durante bastante tiempo. Así que ahora, Mahuad 24 años después está tratando de salir y decir: “Oh, mira, yo quería una economía dolarizada. Miren lo que hubiera pasado si el Sucre se seguía devaluando”, etcétera. Pero lo hicieron a propósito. No es que fue un accidente y curó la enfermedad. Es que ellos crearon esta crisis para justificar la medida, por lo que no estaban pensando en los usos creativos de la dolarización. No tenían ni idea del funcionamiento real de la economía dolarizada ni de la lógica de balance que se puede aplicar. Estaban trabajando, básicamente, asumiendo que se renunciaría a la política monetaria, y que sería una dura restricción a la política fiscal, también. Básicamente, dijeron, si tienes dólares, entonces el Banco Central ya no puede conceder préstamos al gobierno. Y entonces, vamos a matar de hambre a la bestia, y así justificaremos nuestro programa de privatización, y así sucesivamente. Fue una agenda neoliberal muy intencionada. La ley de dolarización se escribió fuera de Ecuador. Se redactó en Washington DC, en el FMI, y luego se envió por fax a Ecuador para ser copiada e implementada. Es una historia muy larga, la historia de cómo se implementó la dolarización. Pero ellos no se imaginaron que íbamos a ser lo suficientemente inteligentes como para encontrar vacíos legales y soluciones creativas. Por ejemplo, y voy a mencionar esto rápidamente, a partir de 2009, el Banco Central de Ecuador comenzó a conceder préstamos al gobierno, a pesar de que estamos dolarizados. Esto les dejó completamente atónitos porque era como: “¿No se supone que la dolarización prohíbe al Banco Central crear dinero de la nada?”. ¡No! Aún se pueden crear dólares, ¿verdad? Todavía se pueden crear dólares en el registro contable de un Banco Central. Son sólo dólares contables, ¿verdad? Desde luego, no se pueden imprimir dólares físicos, pero sí se pueden crear dólares en el registro contable y hacer que se muevan en la economía nacional. Por supuesto, eso crea un problema con la balanza de pagos, las reservas internacionales posteriormente, pero entonces tienes que tener una política de balanza de pagos proactiva, como, de hecho, cualquier país en desarrollo debería.

Scott Ferguson: ¿Acaso no ocurre lo mismo con los eurodólares?

Andrés Arauz: Sí, eso es exactamente. La cuestión es que, cuando son bancos privados los que lo hacen, nadie tiene problemas con que creen dólares en sus bancos, y en los libros de contabilidad. Así es como funcionan los sistemas bancarios de dólares offshore, en general. Yo uso el término “xenodólares” para ser más etimológicamente correcto. Pero sí, así es exactamente como funciona. Lo que no les gustó es que ahora una institución estatal, que era el Banco Central, estuviera haciendo exactamente lo mismo, quizás con más cuidado, con más supervisión, con parámetros claramente definidos bajo un sistema democráticamente responsable que lo que estaban haciendo los bancos privados, que era crear dólares ecuatorianos al hacer préstamos. Eso es algo que sin duda no tenían en mente en el año 2000. Cuando se dolarizó la economía, se produjo una crisis enorme en materia de precios. Durante el año siguiente, los precios relativos se alteraron mucho. De la noche a la mañana muchas actividades económicas dejaron de ser competitivas, y Ecuador podría haber colapsado, incluso como país, salvo por una cosa, y es que la crisis de finales de los 90 y la dolarización crearon una migración masiva de millones de ecuatorianos. Perdimos casi el 15% de la población que se fue a vivir a Estados Unidos, a España y a Italia, y luego empezó a enviar remesas a casa. De modo que fue esta moneda fuerte que venía del extranjero la que básicamente salvó al país de la catástrofe.

Scott Ferguson: Has sido un firme defensor del desarrollo de una moneda regional en Sudamérica llamada S-U-R, el “Sur”. Esta moneda sustituiría al dólar en la cooperación y el comercio internacionales. ¿Podría compartir con nuestros oyentes un poco sobre la moneda “Sur” y lo que su adopción significaría para países miembros como Ecuador?

Andrés Arauz:  Entonces, “Sur” es en efecto una iniciativa del presidente Lula, del ex presidente y ahora ministro de Finanzas, Fernando Haddad, y de su equipo. El “Sur” no es una moneda como el euro que quiera sustituir a las monedas nacionales. Eso es algo en lo que tengo que insistir desde el principio: no es una moneda que pretenda sustituir a las monedas nacionales. Es una moneda complementaria. Es una moneda complementaria regional que quiere contribuir a la dinámica del comercio intrarregional. Bien. En este momento, un país como Argentina, para comprar productos de primera necesidad o equipos a Brasil, tiene que tener dólares en sus reservas, y luego tiene que transferir esos dólares a un banco brasileño para obtener el equipo, la máquina, o lo que sea, desde Brasil. ¿Por qué? ¿Por qué? Entonces, claro, la lógica de eso es que los dólares no están en maletas o en cualquier lugar. Los dólares son simplemente cuentas en bancos de EE.UU. en el extranjero. Esta dinámica está creando una fuga de capitales institucionalizada porque tienes que tener un fondo de liquidez, un montón de dinero básicamente depositado en el extranjero, que no puedes utilizar para tus propias necesidades vinculadas al desarrollo. Por tanto, al crear el “Sur”, básicamente estamos estableciendo un sistema de pagos con una unidad de cuenta regional, el “Sur”. Aún tenemos que hablar de cómo vamos a valorarla, pero lo más probable es que esté vinculada al DEG, el Derecho Especial de Giro. De este modo, el “Sur” evitará tener que utilizar dólares estadounidenses para las transferencias internacionales, es decir, las transferencias internacionales intrarregionales. Podremos utilizar esta moneda para nuestros fines. Repito, no se parece al euro en el sentido de que sustituye a la moneda nacional. Más bien se parece, aunque no me guste tanto utilizar este ejemplo, a la Unidad Monetaria Europea, el UME, que fue un antecesor del euro. Se trata de una moneda compuesta por una cesta de divisas cuya idea es evitar el uso de una moneda regional adicional para el comercio interregional. Sin duda, pienso que esto creará cierta flexibilidad y espacio político para que los países puedan liberar parte de sus reservas y utilizarlas para tecnología y equipos que no están disponibles en la región; cosas que quizá necesitemos importar de Estados Unidos, Europa o Asia. A primera vista, no parece tan ambicioso. Lo que yo propongo al grupo de trabajo es que empecemos con algo más ambicioso, que es permitir los pagos en el sistema “Sur” desde cualquier cuenta bancaria de la región -otras veinte cuentas bancarias de la región- y en tiempo real, como está funcionando el sistema brasileño de pagos Pix. Ya disponemos de la tecnología. En realidad, no tenemos que inventar nada. Lo único que tenemos que hacer es conectar los programas informáticos, los indicadores y los parámetros, y podemos ponerlo en marcha de la noche a la mañana. ¿Y por qué es esto tan importante? Porque en Sudamérica, cuando la gente piensa en la integración regional, a veces cree que se trata de un asunto de políticos y cumbres presidenciales, que se reúnen una vez al año, se juntan todas las banderas y se abrazan, etcétera. Pero tenemos que hacer esto más tangible y construir la integración regional de tal manera que realmente forme parte de la vida de la gente. Y la forma de hacerlo es, en mi opinión, creando un sistema de pagos democrático en el que se puedan hacer transferencias dentro de la región, expresadas en “Sur” y en tiempo real. Eso supondrá un gran salto competitivo en comparación con el sistema actual, basado en el dólar y en el sistema SWIFT.

Billy Saas: Eso es muy útil. Centrándonos un poco más en la situación local de Ecuador, en los últimos años se han producido importantes levantamientos indígenas, que de hecho se remontan a la década de 1990. Además, la semana pasada la Confederación de Nacionalidades Indígenas de Ecuador (CONAIE) convocó más protestas después de que uno de sus líderes, el presidente de la CONAIE, fuera detenido y encarcelado. La CONAIE respaldó tu candidatura y la de 2021, e imagino que te gustaría volver a contar con ese respaldo. ¿Podrías contarnos un poco sobre tu perspectiva de la recién creada “Sur”, y de una UNASUR revitalizada, y de qué manera servirán y promoverán los intereses de los pueblos y nacionalidades indígenas de Ecuador? Pensando en términos tangibles, ¿cómo mejorará esta moneda complementaria la vida de los indígenas ecuatorianos?

Andrés Arauz: Primeramente, la CONAIE es una organización que realmente respeto. Pienso que tienen décadas de organización política y de trabajo. Por desgracia, a partir de 2003, concretamente, se vieron infiltrados y contaminados por diferentes agencias de inteligencia -locales, vecinas y extranjeras- para tratar de disolverla porque se estaba convirtiendo en una fuerza muy poderosa, y claramente tenían una agenda de izquierda. Durante el gobierno progresista de izquierda de Correa, existió mucha tensión con la CONAIE, pero durante mi candidatura, pudimos encontrar puntos en común, y reconocer algunos de los errores históricos que habían cometido las fuerzas progresistas, que permitieron que estos intereses extranjeros penetraran en un movimiento tan valioso. Ahora bien, no tuve el respaldo de toda la CONAIE. En aquel momento tenía el respaldo del Presidente de la CONAIE, y digamos que tenía buenas relaciones con el resto. Pero en concreto con los pueblos indígenas amazónicos de Ecuador, que es la CONFENAIE. Este año, tuvimos protestas en 2022 por diversos temas, entre ellos, de manera importante, el precio de la gasolina y el combustible. Por supuesto, hubo un paquete o un paquete de acuerdos que el gobierno concertó con la CONAIE, pero el gobierno, por supuesto, ha continuado con su agenda neoliberal, porque para eso está un banquero privado. Probablemente habrá más protestas. Ahora con el gobierno, la corrupción bancaria rampante de Lasso probablemente saldrá a la luz en 2023, y veremos un cambio allí. Así que eso es lo que está pasando en Ecuador. En el caso de Ecuador, mi propuesta siempre ha sido construir lo que se llama el bloque histórico, es decir, consolidar las mismas fuerzas que apoyaron la nueva Constitución de Ecuador en 2008. Eso fue decayendo con el tiempo. Necesitamos reconstruirlo y que vuelva a ser fuerte. Entonces eso implica un acuerdo, un acuerdo político, social y económico con el movimiento indígena y la Revolución Ciudadana que es el espacio político al que yo pertenezco. Ahora bien, la UNASUR que ahora está en estado zombi, pero que no lo estará por mucho tiempo ya que en los próximos días, veremos a la UNASUR tener un renacimiento, sobre todo con el liderazgo de Lula. En mi opinión, una de las razones por las que la UNASUR fracasó -y quiero subrayar que ésta es mi perspectiva- fue porque no tuvo un efecto material o tangible en la vida de las personas. Se quedó en una idea general que rondaba sobre todo los círculos políticos. No fue un concepto enraizado a nivel cultural. Yo considero que la UNASUR no puede ser sólo una integración de políticos o de Estados, tiene que ser una integración de los pueblos. Y utilizo este término a propósito. Es necesario que los pueblos de América del Sur sientan que esto es realmente algo útil para ellos. Creo que la forma de hacerlo es, en primer lugar, que el SUR permita todas estas transferencias que he mencionado, en tiempo real, denominadas en la unidad de cuenta, lo que tendrá un impacto material en el comercio de la región. Las pequeñas y medianas empresas apoyarán esta iniciativa. Además, habría un pilar educativo que permitiría a los estudiantes participar en un programa de intercambio de un año de duración en cualquiera de los países de la región, tanto para estudiantes de secundaria como universitarios. Eso también sería muy concreto. Lo tercero es la iniciativa de Evo Morales, ex Presidente de Bolivia, denominada “Runasur”. Runa, en Kichwa y otras lenguas indígenas, significa persona, y es, por supuesto, una referencia a una integración indígena del Sur. Pienso que ahí tenemos una oportunidad clave en cuanto a las necesidades urgentes del cambio climático, la biodiversidad y, sobre todo, el respeto a los pueblos indígenas. Así que pienso que eso también será un pilar clave para reforzar la integración de los pueblos. Ojalá pueda convertirse también en una integración de los movimientos sociales. Por qué no, en lugar de tener 12 sindicatos de trabajadores en un sector económico específico, simplemente tener un sindicato de trabajadores regional con 12 secciones, o con secciones locales. Al igual que una gran organización, ya que las empresas transnacionales funcionan todas de esa manera; operan en diferentes países, pero todas responden a la lógica de la sede central. Eso es lo que deberíamos hacer en cuanto a los sindicatos de trabajadores, los movimientos de mujeres, los movimientos estudiantiles, los pueblos indígenas, y en general, las organizaciones que responden a la mayoría de la gente y de nuestro capital. Entonces esperemos que, no necesariamente la UNASUR porque es un espacio más institucional, la “Runasur”, que es el espacio de los pueblos pueda tener también una unión política hacia adelante. Por eso es importante que los pueblos indígenas de Ecuador también apoyen esa iniciativa.

Scott Ferguson: ¿Existen detractores de estos sistemas monetarios complementarios, ya sean de derecha, izquierda o centro? Y si los hay, ¿qué les responderías?

Andrés Arauz: Por supuesto que hay detractores. Gente que piensa y cree que siempre debemos conformarnos con la hegemonía del dólar y basar toda nuestra economía en las necesidades de los intereses de Estados Unidos, y que están felices de tener su doble residencia en Miami y en otro país latinoamericano. Por desgracia, esto suena caricaturesco, pero es así. Bolsonaro era un supuesto nacionalista y presunto hincha de la camiseta brasileña. Incluso antes de dejar la presidencia, se fue a vivir a Orlando, Florida y se puso el sombrero de Mickey Mouse. No sé si lo vieron, pero también se puso la camiseta de fútbol de Estados Unidos.

Scott Ferguson:  oh, sí. Lo ví.

Andrés Arauz: Quiero decir que para los latinoamericanos que son aficionados al fútbol, y acabamos de ver a Argentina ganar la Copa del Mundo, es algo realmente simbólico. Es bastante malo. Eso muestra cómo estos nacionalismos fascistas en América Latina afirman que la integración latinoamericana es negativa, pero de alguna manera llevar la camiseta de fútbol de Estados Unidos es positivo. Carece de todo sentido, pero así es como piensan. Esto es lo que tienen en la cabeza. Y ahí es donde están sus billeteras, y sus cuentas bancarias, y donde están las propiedades. Lasso tiene 140 propiedades en el condado de Broward y Miami Dade, en Florida, por lo que esto es lo que son. Por desgracia, las élites son más de Miami que de América Latina, y tendremos que afrontar esa lucha, mostrar esos contrastes y hacer que se produzca esa transformación.

Scott Ferguson: ¿Y qué pasa con el centro izquierda y la izquierda? Porque pienso que nos hemos topado con muchos críticos y fuerzas de oposición, ya sea en el movimiento obrero británico, economistas obreros británicos, o gente de izquierdas de los medios de comunicación y activistas en Estados Unidos que no piensan con las teorías poskeynesianas del dinero endógeno, piensan realmente en estos modelos hidráulicos anticuados, incluso clásicos, de redistribución finita del dinero. ¿Te enfrentas a ese tipo de críticas por parte de interlocutores de centro izquierda e izquierda?

Andrés Arauz:  Sí, por desgracia, no existe suficiente educación sobre cómo funciona el dinero. Ya has abordado este tema ampliamente en el pasado, y sí, todos tenemos que enfrentarnos no sólo a una idea radical, sino que también tenemos que deconstruir los supuestos teóricos previos que incluso nuestros compañeros o camaradas mantienen en su día a día. Una forma lógica de entender la elaboración de políticas, o la economía, o el dinero para de alguna manera reconstruir desde cero y decir: ” Bien, ahora olvida todo lo que sabes sobre esto y empecemos de nuevo”. Sí, eso existe. Por suerte, creo que la pandemia y antes la crisis financiera, dieron lecciones sobre ¿qué es la escasez? ¿Qué es la escasez de dinero? ¿Qué es el dinero, de dónde viene, y así sucesivamente. Ahora, es muy fácil señalar eso. Basta con mostrar un gráfico o incluso mostrar ejemplos. Resulta mucho más fácil que antes. ¿Y sabes qué más? El criptoespacio, a pesar de que no entiende o no quiere entender el dinero endógeno, al menos ha abierto la mente de la gente en términos de la discusión sobre el dinero. De modo que lo que han hecho es popularizar la cuestión del dinero hasta el punto de que ahora la gente tiene una mentalidad más abierta. Y eso también es importante, y también ha sido clave para abrir las puertas a estos enfoques heterodoxos, el dinero endógeno, la TMM, el poskeynesianismo, etcétera. Pienso que, también en los círculos académicos, gente influyente y expertos han admitido el hecho de que así es como funciona el dinero. Por ejemplo, el famoso documento del Banco de Inglaterra, y así sucesivamente, y estamos llegando a ese punto. Todavía creo que tenemos mucho trabajo por hacer en términos de cómo el sistema de educación formal aborda el tema del dinero y los libros de texto y demás. Si vas a un clásico Econ 102, un curso de introducción en la universidad, todavía te lavan el cerebro con otro tipo de cosas. Aún nos queda mucho por hacer en cuanto a currículos y universidades, sobre todo en los países en desarrollo, que necesitan saber más de esto. Pero pienso que definitivamente hemos avanzado mucho, inclusive con la gente de centro y centro izquierda de la región. Que, por cierto, los poskeynesianos son bastante fuertes en Brasil, y eso también es importante.

Billy Saas:  Impresionante, pienso que otro aspecto que preocupa a algunas personas que podrían estar interesadas en el “Sur” pero preocupadas es: ¿qué ocurrirá cuando las mareas políticas vuelvan a cambiar? Esperemos que no lo hagan nunca, ¿verdad? Pero supongamos que el Sur se construye, se pone en práctica y los logros de la izquierda se pierden en los próximos años. ¿No podría ser la “Sur” un arma contra los países de la región? ¿Qué le dirías a la gente que podría tener ese tipo de preocupación?

Andrés Arauz: Mi forma de abordar la elaboración de políticas es, por supuesto, la planificación. Cuando quiero llevar a cabo estas grandes transformaciones, por ejemplo cuando estaba en el Banco Central o en otros espacios, como el ministerio de desarrollo, la planificación es fundamental. Improvisar es malo. Hay que planificar. Es necesario hacer un plan a corto, medio y largo plazo. Es necesario tener en cuenta los riesgos y planificarlos. Y algo que la mayoría de los tecnócratas olvidan es, para aquellos de nosotros que tenemos un poco de influencia marxista, la correlación de fuerzas. ¿Cómo es la economía política? ¿Cuál es la economía política dentro de esto? Se trata de pensar en la sostenibilidad en términos de economía política. ¿Será esto reversible o no? ¿Verdad? Ahí es cuando empezamos a tener algunos problemas de aplicación con algunos compañeros y colegas de la izquierda, porque simplemente asumimos que vamos a tener el poder, y vamos a mantener el poder para siempre, o durante mucho tiempo, y luego la gente simplemente se acostumbra a esto de una manera u otra. Esto no funciona así. Tenemos que asegurarnos de que la economía política sea sostenible en el tiempo para que las fuerzas, las fuerzas políticas y económicas, lo mantengan en el tiempo. Como en el ejemplo que les di de las cooperativas de crédito, no me imagino a Lasso, el banquero, Presidente de Ecuador, incluso después de llegar al Banco Central, intentando apagar el interruptor que desconecta a 600 cooperativas de crédito del sistema de pagos. Él recibirá una especie de rechazo masivo y huelgas, y no va a suceder, ¿verdad? Por tanto, necesitamos alcanzar ese punto de irreversibilidad en términos de economía política, y también en términos de uso del sistema. Así que si tres o cuatro personas utilizan el sistema, como sea, lo desconectarán y ya está. Pero si consigues que mucha gente lo utilice, por eso creo que debería formar parte del sistema de pagos regional y conseguir que las empresas, las pequeñas y medianas empresas en concreto, utilicen el sistema de pagos “Sur”. Necesitamos un sector dinámico. Necesitamos que incluso las fuerzas capitalistas apoyen el sistema diciendo: esto es mucho más barato que utilizar el sistema SWIFT basado en el dólar. Y tener también ese incentivo. Necesitamos crear una especie de agentes que defiendan el sistema, incluso cuando los políticos de izquierdas estén fuera de juego. Ese es el tipo de construcción de procesos que tenemos que lograr, tanto en términos de “Sur” como de la UNASUR. Por eso el pilar económico también tiene que existir, y no sólo los otros pilares de integración que se dieron en el pasado, como la unión militar, o la unión sanitaria, o la unión democrática, o lo que sea. Todo eso puede desaparecer en cuanto se vayan los políticos. Cuando tienes el tejido de la sociedad, un tejido económico y productivo, que necesita el sistema regional, entonces seguirá avanzando y se convertirá en el sistema dominante. Se convertirá en un proyecto duradero y sostenible. 

Scott Ferguson:  En diciembre publicaste un importante informe para el Centro de Investigación Económica y Política (CEPR) bajo el título “Putting Climate At The Core of IMF Governance”. Para concluir nuestra conversación, ¿te importaría dar a nuestros oyentes una idea de lo que defiendes en ese proyecto? 

Andrés Arauz: Bueno, en primer lugar, estoy muy agradecido al CEPR por abrir las puertas a mis contribuciones, a mis pensamientos, a todo lo que pueda hacer para coincidir en cuanto a nuestras prioridades en un ámbito económico y político. Llevo más de una década estudiando el FMI. He visto al FMI cara a cara y estoy muy familiarizado con algunas de sus políticas, que coinciden en gran medida con algunos de sus temas, como los DEG. Creo que los DEG son un instrumento muy importante que, aunque no sea perfecto, debemos seguir impulsando.

Billy Saas: Derechos Especiales de Giro, ¿podrías hablarnos un poco de los Derechos Especiales de Giro?

Andrés Arauz: Los DEG, o Derechos Especiales de Giro, son dinero internacional, moneda internacional, que se crea de la nada. Es dinero endógeno. Y es dinero político: se creó como un tratado internacional para sustituir al oro y al dólar estadounidense como activo de reserva en los años sesenta. Por tanto, es lo que más se asemeja a una moneda internacional, aunque en la canasta de los DEG, el dólar estadounidense tiene un gran peso, como el 40%, o algo así. No importa, porque tendrá que reconocer las realidades de las potencias mundiales. Y esperemos que algún día el “Sur” forme parte de la canasta de los DEG. De hecho, eso es algo que yo propongo como uno de los objetivos a largo plazo de “Sur”. Hemos estado trabajando con el CEPR para promover el uso de los DEG. Asimismo, con otras organizaciones como Latindadd, la Red Latinoamericana de Justicia Económica. Otras organizaciones de todo el mundo como Oxfam, Arab Watch, etcétera. Realmente, se ha creado una gran coalición en la sociedad civil, y las personas que piensan y proponen cuestiones de política económica utilizan los DEG más allá de su estrecha calidad de activos de reserva monetaria. Escribí un manual para Latindadd diciendo, mira: Los DEG pueden convertirse realmente en un instrumento de política fiscal. Entonces, eso abre la puerta para que exista una coordinación entre el Banco Central y el Ministerio de Finanzas, aunque sea un tabú que muchos quieren ocultar y del que no quieren hablar hasta después de la pandemia. En fin, me gustan mucho los DEG, y quiero seguir explorándolos, escribiendo sobre ellos e incorporándolos a las discusiones generales. Pero este otro asunto, este artículo sobre situar el clima en el centro de la gobernanza del FMI, surgió porque empecé a leer mucho sobre el lavado verde del FMI, especialmente en el RST, el Fondo para la Resiliencia y la Sostenibilidad. Han sacado una estrategia climática, etcétera, etcétera. Desgraciadamente, la mayor parte es una especie de lavado verde: básicamente dicen que van a trabajar en cuestiones climáticas, pero no lo incorporan realmente a la lógica principal del funcionamiento del sistema monetario como podrían. Por ejemplo, no mencionan el hecho del petrodólar, el privilegio exorbitante del emisor del dólar que puede adquirir necesidades energéticas extrasomáticas de los petroestados simplemente imprimiendo su propio dinero frente al resto del mundo, y cómo eso se relaciona con las emisiones históricas de CO2 en nombre de Estados Unidos. Así que hay muchas cuestiones que son sistémicas en términos de la relación entre el clima y el dinero que el FMI no está tocando ni siquiera con un bastón. Me pareció interesante decir: bueno, si nos tomamos en serio el cambio climático, si nos tomamos en serio un cambio estructural sistémico en relación con el clima, hablemos de cómo la gobernanza del FMI incide en ello. No sé si han visto esto, pero la agenda de Bridgetown, que básicamente está siendo promovida por la Primera Ministra Mia Mottley de Barbados. Ella dice que necesitamos más DEG para poder invertirlos en el clima, porque si nos limitamos a esperar a que los países ricos nos den dinero, eso nunca ocurrirá. Los países pobres no tienen dinero por sí mismos para hacerlo, porque se necesitan divisas fuertes. La segunda mejor alternativa son los DEG, que pueden crearse de la nada. Tenemos dinero para invertir en la lucha contra el cambio climático. Hagámoslo. Y por supuesto, luego los países ricos dicen: jajaja, no, quizá más tarde, pensémoslo… Y hacen como que no oyen. Todo eso podría pasar si el sistema de gobernanza del FMI cambiara un poco. Ahora mismo, en el FMI, sólo hay un país que tiene poder de veto sobre la decisión de crear más DEG, y ese país es Estados Unidos. Se puede tener poder de veto con el 15% de los votos, y Estados Unidos tiene el 17%. Así que hay que cambiar eso. Es preciso conceder más influencia a los países en desarrollo, y especialmente a los países vulnerables al cambio climático, porque son los que están más desesperados por hacer que las cosas cambien y sucedan. Así que en este artículo, con mis coautores, proponemos cambiar la fórmula de cómo se distribuye la cuota de voto del FMI. Cómo se asignan los votos dentro del FMI, entre los diferentes países. Todo lo que hacemos es muy sencillo. Hay una fórmula con cinco variables: PIB, reservas, apertura, cantidad de comercio, etcétera. Y tienen una variable extraña llamada variabilidad de los flujos de capital. Tengo estas cinco variables, y seguro que los países más grandes se llevan la mayor parte de los votos, pero simplemente añadimos una variable más, que son las emisiones históricas de CO2. Decimos que mantenemos las mismas variables y dividimos la variable de apertura por las emisiones históricas acumuladas de CO2 de ese país, de modo que podamos incluir su grado de responsabilidad ante el cambio climático como parte del formulario del FMI. Utilizamos métricas objetivas y no ambiguas publicadas por el Instituto de Potsdam para el Clima para medir la contribución del país al cambio climático a través de las emisiones acumuladas de CO2. Por supuesto, como era de esperar, la cuota de voto de Estados Unidos en el FMI cae del 17% a un 6%. La de China también desciende significativamente hasta el 6%. En general, todos los países ricos disminuyen significativamente, y los países en desarrollo, aumentan significativamente su cuota de voto, especialmente los pequeños Estados insulares en desarrollo. Así que los que corren el riesgo de ser destruidos, los que corren el riesgo de desaparecer por la subida del nivel del mar, son en realidad los que más aumentan, de alrededor del 2% a alrededor del 20% de la cuota de voto del FMI. Esto tendría un impacto significativo en todo el sistema monetario, en las prácticas de préstamo del FMI, en la lógica del poder dentro de la institución, y realmente tendría un impacto transformador en cómo el mundo, cómo el planeta, se enfrenta al cambio climático. El FMI es una poderosa institución con un billón de dólares de poder de préstamo. Eso sin contar la cantidad de dinero que puede crear a través de los DEG, y sin contar la influencia que tiene sobre los mercados financieros, y sin contar la influencia que tiene sobre los responsables políticos locales en términos de las ideas del dinero, las ideas de la formulación de políticas, las ideas de la gestión fiscal, la política monetaria, y así sucesivamente. Pienso que si arrancamos desde el núcleo, podemos tener efectos de largo alcance. Por supuesto, no soy ingenuo al pensar “oh, vaya, ¿cómo no se nos ha ocurrido esto y que EEUU acepte este cambio de la noche a la mañana?”. Eso no va a ocurrir. Pero al menos estamos planteando el debate para que podamos comprender la verdadera magnitud de esta realidad.

Billy Saas:  Por supuesto, incluiremos un enlace sobre el CEPR y sus otros trabajos. Andrés Arauz, ha sido un absoluto placer hablar contigo. Muchas gracias por estar con nosotros en Money On The Left.

Andrés Arauz:  Gracias a todos. Espero que tengamos otra oportunidad de compartir más historias sobre los CDBC y lo que está ocurriendo en ese ámbito. Yo también estoy muy involucrado en ese campo. Estoy asesorando a una empresa tecnológica llamada Nym sobre ese tema. También me gustaría hablar de la creación de sindicatos, de la inclusión financiera en el sector solidario y del papel que el dinero desempeña en él. Así que sí, en general, me encantaría compartir esto en otra ocasión con ustedes y ha sido un placer conversar con todos ustedes.

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mike Lewis (transcription), & Emily Reynolds of The Buffalo Institute for Contemporary Art (graphic art)

Superstructure 34 – Italy and International Fascism

Co-hosts Naty T Smith (@orangeasm), Will Beaman (@agoingaccount), and Charlotte Tavan (@moltopopulare) discuss the rise to power of Italian Prime Minister Giorgia Meloni near the 100th anniversary of Mussolini’s March on Rome to frame the international moment and the ascendance of red-brown tendencies, the urgencies of anti- fascism, and the shape of contemporary reaction. Through the example of Meloni’s election, they explore how monetary austerity, anti migrant tactics, fascist nostalgia, and other ideologies of replacement, are at stake in this global conjuncture.

Link to our Patreon: https://www.patreon.com/MoLsuperstructure

Music: “Yum” from “This Would Be Funny If It Were Happening To Anyone But Me” EP by flirting.
http://flirtingfullstop.bandcamp.com
Twitter: @actualflirting

Can The Little Mermaid Speak?

Will Beaman and Scott Ferguson tease out the multiplicity of voices that shape The Little Mermaid (1989) in order to problematize racist outcries against Disney’s forthcoming 2023 live-action version of the film starring singer Halle Bailey. The co-hosts answer and invert an imperative promulgated by a reactionary meme circulated on social media: “Don’t take away my history” (see below). The meme falsely imagines Disney’s 2023 reboot displacing and replacing a past white heterosexual monoculture. This episode, by contrast, explores the genuinely heterogeneous and contestable legibilities that inform The Little Mermaid’s historical production and reception. Developing Mikhail Bakhtin’s notion of “dialogism,” Will and Scott trace the film’s significance across several registers: (1) gender representation in relation to Disney animation history and 1980’s Hollywood; (2) Disney’s imperialist expansions as a multinational conglomerate in the context of a zero-sum neoliberalism and expiring Cold War; (3) abstract animation aesthetics in light of an increasingly physics-oriented blockbuster cinema; and (4) queer culture’s fraught popular expressiveness in the midst of an HIV/AIDS crisis dismissed and repressed by U.S. authorities.    

Meme: 

Note to Animation and Broadway Aficionados: In this episode, the co-hosts refer to “Someday My Prince Will Come” in Snow White and the Seven Dwarfs (1937) as an original example of what has come to be called an “I want” or “I wish” number in musical films and plays. Here we add a small proviso: Snow White’s “I’m Wishing” song precedes “Someday My Prince Will Come” and thus represents the original “I want” or “I wish” number in the film in a very literal sense.  

Related Viewing:

Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Music: “Yum” from “This Would Be Funny If It Were Happening To Anyone But Me” EP by flirting.
http://flirtingfullstop.bandcamp.com
Twitter: @actualflirting

Making Digital Public Spaces w/ MUSICat

This month Money on the Left is joined by the folks behind the MUSICat project, an online music streaming service for public libraries designed to share heterogenous local music with local community members. We speak with Preston Austin and Kelly Hiser from Rabble, the company behind MUSICat, as well as with Racquel (“Rocky”) Mann, who coordinates the MUSICat service with Edmontonians as Digital Initiatives Librarian for Edmonton Public Library

Launched by the Madison Public Library in 2014, MUSICat has since been adopted by public libraries, including in Pittsburgh, Nashville, Fort Worth, New Orleans, Edmonton and elsewhere. Artists who share music via MUSICat are paid for their work with library funding and are granted other substantial forms of support through the library system. 

MUSICat serves as an inspirational model for mobilizing public institutions and forms that can provision communities in diverse and locally sensitive ways. Exploring what we at Money on the Left have called a hermeneutics of provision, we affirm public libraries’ critical function as creative stewards and producers of regional public cultures. 

Special thanks to Edmonton artist Jill van Stanton for the album art used in our episode graphic. Thanks also to the Edmonton musicians, whose work is spread liberally throughout this episode. Featured tunes include: Shout Out Out Out Out, “Never the Same Way Twice”; Souljah Fyah, “8 Days of Summer”; Farhad Khosravi, “Escape”; Denim Daddies, “Roadrunner”; and The Tsunami Brothers, “Stink Bug.”

Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Transcript

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

William Saas: Rocky Mann and Preston Austin, welcome to Money on the Left.

Rocky Mann: Thank you. 

Preston Austin: Good to be here.

Rocky Mann: Great to be here.

William Saas: We’ve invited you on the show today to talk about your MUSICat project, which as we understand it, is an online music streaming service for public libraries. Which is an unconventional way for collecting, curating, and distributing music. Could you start off our conversation by telling us a little bit about yourselves and how you came to the MUSICat project and what the MUSICat project has become and where it might be going?

Preston Austin: Sure, I’ll start. I’m the co-founder of Rabble, a company that actually writes the MUSICat software. So I work as a web technology guy in Madison, Wisconsin and my history includes a lot of working with both higher ed and mid-tier media production for the web. So producing audio-video things that work on webpages, especially back when putting audio and video on a webpage was difficult and involved all sorts of plugins and browsers, we didn’t know how to do things. So I had a background in that tech and built a framework for doing things on web pages that was called “media landscape.”

And that mostly had to do with actual stuff like what we’re doing today recording meetings, or presentations to classrooms and producing multimedia from it. That led to me working in a startup that had to do with publishing music for people to consume music collections. And while I was working on that, word got around that I was the music guy for web pages for one of them in Madison, and a music librarian from Madison Public Library approached me and they wanted us to work on a project called the “Yahara Music Library.” 

And I said, “no, it was a cool idea. But I’m really, really busy.” But it remained a cool idea. And so over a period of about a year, I ended up talking to a guy, Hank, the music librarian from Madison. And eventually we said, “let’s do this” and built a prototype. This was based on Iowa City’s earlier music collection online. We built a prototype, and that became the Harlem music library. And that project involved a business partner who will be on the program later, Kelly Heiser, and that all formed a foundation. And we said, this is interesting. Libraries, in general, are going to be interested in this, this is not a one-off product, do you want to start a company to build a platform to make this thing practical? That platform is what became MUSICat. 

And that company has Rabble as the first library partner, and it was really formative. And working with us on that platform was Edmonton, thus the connection with Rocky.

Scott Ferguson: Can you give us a sense of the years here? When did these initial experiments take place? And when did you found the company?

Preston Austin: I’m terrible at this sort of thing. But, I think the initial conversations were happening in 2013, possibly as far back as late 2012. And I think we founded the company in 2014. It’s possible it was legally formed in 2015 as an entity. It was originally in a partnership with a startup that I was in at that time, but we purchased their interest in it. I exited that venture and became full-time focused on Rabble shortly thereafter. Within a few years, we were a completely independent venture. And so currently, Rabble is a company that’s closely held and slowly works with libraries. We have no external investors and we’re not a grantee of any foundation or anything like that.

Scott Ferguson: Rocky, you want to tell us about your background? 

Rocky Mann: Sure. I came to the project in 2016 as part of getting this new position with Edmonton Public Library, the Digital Public Spaces librarian. Prior to that, my background was in music. Before moving to Edmonton, I was pretty heavily involved in the music scene in Victoria on Vancouver Island. I was doing, you could call it “participatory video” or “participatory media,” community-based research with the UBC Okanagan with Indigenous communities on Vancouver Island and all over BC.

The concept of collaboratively built infrastructure online and how to share, distribute, and ensure authority and authenticity with communities when sharing content has always been something I’ve been very interested in and in working on. I started in this role in 2016, which was one year after we launched our collection with MUSICat. But this project with Edmonton Public Library started as part of an internship in 2013 with my predecessor, Alex Carruthers. 

She was looking at: what’s the digital public space? What are other libraries doing? And she came up with a really great trend-spotting report. And through community discussions and things like that, we identified that of all the different types of digital public spaces, people wanted something about music. We’re generally thought of as a blue-collar working-class city compared to Calgary–I don’t know if you should put this on!–Calgary is the Texas of Alberta and Edmonton’s the Austin. 

Scott Ferguson: That’s helpful.

Rocky Mann: We love our arts. Edmonton loves their arts: theater, music, the community is quite tight-knit. She embarked to do an environmental scan of what technology is out there. And from that process, she chose to work with Rabble because it was really important not to work with something that was proprietary. The fact that it was open source, the fact that it was community-based and collaborative, and we can work together to build it. 

Because things change, having that type of relationship was–from what I’ve read from her reports and in talking with her– a key factor. When I was onboarded, I remember the introduction from her and my supervisor, “oh, we’re gonna work with this tiny startup and there’s some challenges, but it’s really great.” I’ve loved every moment of it. And then in 2014, I think our initial feedback–and I wasn’t there yet– was from an “unconference” called YEG, which is our airport code. YEG Band Camp, where we brought in musicians, artists, nonprofits, all the businesses and people who are really active in our music community to talk about what they would like to see in a platform and initiative. So there’s the technology side and then how it branches out in real life. That fed into our early discussions with Rabble: What should this thing look like? What’s our community saying?

Scott Ferguson: That’s so fascinating for a number of reasons. I’m a media studies scholar, among other things. And very often, media studies scholars want to understand social and cultural change in terms of tech as disruptors. What I hear you saying is that, of course tech is playing a big role, but that actually culture and a culture of participation and aesthetic construction is side by side with tech. Could you speak a little bit more about that?

Rocky Mann: Sure. Coming from my background through Indigenous research methodology and the concepts of OCAP, which is ownership, control, access, and possession. Personally, those are really important. And my other portfolio is building an Indigenous digital public space. Similar in the way that we’re working to build it for indigenous content here, but I really see the music community and artists. 

The industry has a historical background that is quite exploitative in many regards. You could really describe artists, upcoming artists, or generally that group, as vulnerable in that sense. So the need to share, the need to be exposed, the need to get your creative works out there often supersedes protecting, ensuring that the standards of who you’re working with are ethical, of a high ethical standard. So my background was coming from that previous research background. 

And every step along the way Rabble’s values seemed to match my personal ones, and the library’s vision of being community-led, which is one of the appeals, foundational philosophies about how we deliver and develop programs, identify barriers, your community discussions, and then, with our communities, find a way to attend to those and reduce those gaps. So it’s a civic gap, participation in your creative community, in your profession, access to technology, access to being a creator and participating in our civic society.

William Saas: Let’s run with that. You mentioned the history of music as an industry, music publishing as having been, well, straight-up exploitative. MUSICat seems to be coming at music making and publication from a very different direction, which seems like it’s probably informed by critiques of some of the larger streaming platforms. How would you articulate your criticisms of the platforms that exist and have existed around music circulation and publication? And how is MUSICat different?

Preston Austin: Who wants to go first?

Rocky Mann: I think I’ll throw that to you.

Preston Austin: MUSICat’s thesis, Rabble’s thesis with MUSICat is that empowering public institutions to invest in artists and with artists together to invest in collecting is valuable, full stop. I want to start there, that the public investment in artists is a thing unto itself. And if you send an artist a $200 check to license their work into a library collection, on very clear terms that are artist-friendly, and leave them able to continue to use their work the way they want to, where they want to, this is a good thing to have done. Somebody gets 200 bucks, and that respects and supports them.

We wanted to build a way to focus on building value. Communities being able to build value and technology that is not disruptive technology really, it’s supportive technology. And I’m not trying to break up the dynamic of how people listen to music and create some new thing that changes the world and deflates the costs and disintermediate people, etc, etc. That gets a little frustrating. So we didn’t build it to compete with streaming services or to replace them or even really to contemplate them. We built it to complement them, we really built it with the idea in mind that it is its own thing. Public spaces for music, a concept that I wasn’t calling it then and had a different notion of before the work with Edmonton. But I really liked Alex Carruthers’ work and Kelly contributed to that. That was a good conceptualization, and we absorbed that value or more of those values. 

What we did is we said, let’s focus on this question of power, local control, local power, artists as real participants in the process, the library as a convener. What is appropriate within that in terms of technology? And what we did was, instead of building a leanback music experience that tries to create an adhesive listening, okay, you’re in there, and now you’re stuck to it. And you’re playing that playlist for a long, long, long time. And we’re trying to get everybody in the world’s music available to every listener in the world, and everybody’s going to pay eight bucks a month or something like that–I just picked that number out of the ether. 

And instead of creating that all to all process, which critically in its incentive structure means that whomever is collecting that money and paying for that streaming is trying to minimize the amount of those monthly revenues that go to the creation because they’re trying to get all the music in the world to all the listeners in the world and they want them listening all the time. So this structure is fundamentally minimizing the return to artists. We designed on the other side of it, we designed on maximizing the public’s ability to invest in their artists. 

And those artists’ ability to invest in their public via the collecting and the community formed around it. And it’s all via invitations, everything is understood upfront, the relationships are personal, the fact that the relationships happen in this public and safe space is important. 

So what’s my criticism of the streaming universe, which I think is what you’re actually asking me to do? It creates a world within which the technical intermediary or the licensing intermediary who licenses art from artists and licenses it to either listeners or downstream services, where those intermediaries’ motivation is to take a piece of that pie. And it does so in a way that really abstracts music into a commodity to be listened to that is valued primarily in terms of listening, and then it turns everything else in the musical community into something around that commodified listening. 

Here we’re saying “no, no, no.” The process of collective involvement in building this collection, building with the library, that these are all part of it. And we actually want the technology to be more part of it, we’re not as open as we want to be. We’re open-source to our library customers, but there’s not a distribution. And getting to that ethos of everyone being able to invest with everyone else around these local nuclei is what we want to do, in terms of the experience created, these collections, we call it “lean forward”, it’s a terminology that I’m not sure if I made it up or picked it up from somebody, but I haven’t been able to track it down. But you have “lean back” listening experiences, you hit a play button and music comes out forever. 

MUSICat and the library collections are leaning forward. It is a collection. It’s more like being in a listening room and being able to look at titles and pick one off the wall and play it on a fancy old-fashioned turntable there and interact with information about the artists, use it as a jumping off place to find their other material online. So we’re not trying to solve the problem of, how on earth would I get music into my ears right now? We’re trying to solve the problem of how would I become a participant in starting as a listener, but possibly in other ways, my local community, my local music community, and were can I make the technical supportive choice in doing that, where can I do that knowing that there aren’t money grabbing assholes, let’s say, in the middle. 

All of that said, it’s a long project, I think we’re about halfway there. So in the aggregate right now, of all the money that libraries spend on artists’ licensing direct to artists, plus Rabble MUSICat fees, money that comes to develop the software platform, we’re not on a very large base of libraries yet. And so the cost of maintaining the software platform is still quite high. When we started, we were probably getting actually two thirds of the funding, there were almost no libraries, and most of the money was going into developing software. 

We’re now at a point where maybe 55% or something in aggregate of the money is going directly to local artists from their local public library if you look at that combined budget. There’s other budgets.That doesn’t include internal budgets at the library and things like that, we’d like to be in a position where more than 80%, possibly 90% of the total spend, inclusive of platform costs, goes to artists, and that’s getting the technology part of it to where it’s just tech that different vendors can compete to do this sort of thing. And then it’s a fairly straightforward and deflated technical process. We’re a few years away from that goal.

Scott Ferguson: That’s so interesting. So can we talk about how, from an artist point of view, how does submission work? And then from a curatorial point of view, how does the review process work?

Preston Austin: Rocky, do you want to take this from the perspective of governing that process? Because from my perspective, it’s a little bit reductive. I can talk about our publishing chain, there’s the artist’s submission and a jury, but I feel like in terms of what it really means for the community, you speak to it better than I do.

Rocky Mann: So I’d say before the submissions, I think the jury and the curators and the terms of reference are the goals, criteria of the collection, which are word for word, but the criteria of the collection being something that a collection that is representing diversity in terms of demographics, genre, and contexts. And perspective, which really matches our Public Library’s collection policy anyway. It’s really important to have representation on the jury that can also speak to that diversity. The balance between ensuring that you have a quality collection, that is of value to be in for an artist. So you don’t accept everything because you need it to maintain a certain standard, but also something that captures all of our niche existences in our community. 

So, for example, when the initial jury came on, it wasn’t a call out to who was invited… members of the jury were nominated, basically, through discussions with the community. Who does the community respect, celebrate? Who does the community think can make really rich decisions on what music is important here and important to represent? So then we would invite those people that were named to those discussions, then what happens is, as submissions go through the years, and through holding open calls, each time we assessed the collection. What’s missing? What are the gaps, what do we have a lot of and what do we not have a lot of and why? 

For example, Edmonton has a very, very active and large indigenous population, and we weren’t seeing music from that community in the submissions. And there wasn’t really representation in our curators group. So reaching out actively to that community to find somebody who would be interested and also a really good fit. And then for the subsequent round, that curator or jury member, I know two different terms are used. We’ve always used jury, but we’re considering going to curator for our refresh in 2023. I’ll stick to the jury for the purposes of this discussion. I do really like “curator”, but there’s something about “jury” that’s exciting during this admissions process.

Scott Ferguson: I had no idea when I was using that word, “curatorial”, that I was walking into a minefield of semantic complications.

Preston Austin: It’s a nightmare, where we’re at right now, to the degree that we have an official line on it, the role is curator, which is both a public role and an internal role and the process and the group formed is jurying and the jury with respect to a round of submissions, that’s how…

Scott Ferguson: That makes a lot of sense.

Preston Austin: That’s how I try to clarify it. However, there’s a long history of discussion around this. And so that is far from normalized language across all of MUSICat. 

Scott Ferguson: Did you want to keep going?

Rocky Mann: Sure. I’ll save that other rant for later. Then those jury members or those curators are active in their community. So they’re reaching out and they’re connecting with other musicians and artists, and encouraging their submissions or just by being present. I think their presence can encourage groups to submit. So on that end, I think the representation and the participation in the community by each jury member is really significant for what it has an impact on what submissions that we receive. 

The submission process, we’ve been through a few practical iterations of it, I think initially, we were going for four times a year. So accepting 100 albums per year. And really quickly… There was one before I came on board, and I think 50 albums were added. There were some big celebration concerts in the city. It was really exciting. And then, after going through that process, I did the next one and realized, well, it takes three months to prep our marketing and communications department to be sending out the message encouraging people, notifying people that the call is open, then it takes a month for that submissions period to be open, then it takes a month or two, depending on the support needed by the jury or lives are busy to select. 

And there’s also always like, Oh, this album or this track didn’t upload. So there’s always technical support needed. So another month, maybe a month and a half for the jury to go through the submission, then another month to support artists who have been invited to the collection, and uploading their submission, uploading their album, creating their profiles, and then another month or two, to celebrate the new additions to the collection. So that’s a six-month process. So I think now, our model is once a year, and to have up to that full amount. So 100 albums a year is what our collections budget has been set aside for. 

Which I’ll say, too, in the submissions, what I really love about Edmonton Public Library’s model– is they have permanently integrated the budget for new albums through capital city records into our regular collections management and access budget. So it’s not with digital initiatives, my department, which is always exploring new technologies. And some things live for a long time, some things fade out, it’s with our permanent collections budget, just like any other type of collection that we have, physical or digital, which I very much appreciate. So it does give that sense of commitment and sustainability. 

With artists’ admissions, too, I do a lot of active work on the ground, we really want it to be inviting. So I’m part of, I don’t know, 20 local music community Facebook groups, I’m going to events, I’m talking to people and making sure that everybody who might be interested is aware, I keep a list of artists who email me through the year with inquiries and I make sure to add them to this list of those who wish to be notified every time something happens just so things don’t get lost in the very overwhelming fear of internet and communications. So it is a very supportive thing. 

If a submission isn’t quite working, or I’ll reach out personally to say, “hey, your track, the quality isn’t so good. Do you have another one?” I would not like to see somebody not be recommended because of a technical barrier, for example.

Scott Ferguson: Is the basic unit of submission an album? That’s what I thought I heard you saying or can a band submit a song or a few tracks?

Preston Austin: Let me speak to what’s possible first, and then the library-ality maybe. So the submit form, the initial process entry point into the technical layer of publishing is a short form and it gathers very basic metadata. And metadata is going to come up later probably in the conversation because it’s so important. But we gather very basic metadata; the album title, or the work in question, the artist’s name separately from the act, so the name of the individual versus the act, which are often not the same, some very basic high-level genre information. 

And then the library administering the collection has control of additional meta information that they might want and ensure and process. And what that includes is how many tracks that are going to collect. So they could collect just one or they could collect many if they want to make many tracks available. And that does vary across collections. So some libraries, for example, they only collect albums, they have minimums and how many tracks they want. And they want to see three tracks presented to the jury so that they can make a judgment across that. So that’s like a very high investment, both for the submitting artist and for the jury in terms of how much is involved there. 

We try to remember all that later, so that nobody ever has to redo any of that data entry, or uploading. But they can also ask other questions. So if they just want to ask a question of the artists they can, and two questions that have become standardized, and I think these actually didn’t both come from Edmonton, but I can’t remember right now where they came from the two questions that have become standardized are basically where have you been playing out? And then how would you describe your connection to the musical community? And so they were these two long-form questions in the submission that are basically like, tell us why you are connected locally. So that’s the technical layer of the process. And that produces a package that you get many, many, many pending submissions that the jury can work with.

Scott Ferguson: That’s so fascinating. I was thinking about comparing that process to what used to be the process of getting verified on Twitter. Which is like, show us your numbers, show us your raw numbers … this is totally different: write us some, give us some language about how you’re connected to the community. It’s so different.

Preston Austin: Sorry, go ahead.

Rocky Mann: I was just gonna say, it’s really important not to restrict what it means to be part of a music community. So our criteria we asked for, I think we have a field for a postal code, but it’s a greater Edmonton region. So it can be you either are born here, produce your album here, or have significant activity within the community here. So we want it to be local, it must be local somehow. But there is always room for that gray area for that one-off or that person who is really important, or that group that is really important to this community, based on their description, so we don’t want it to be a hard line of territory or region.

William Saas: Rocky, when you were talking about the process for soliciting submissions, it sounds to me a lot like canvassing, political canvassing. And the community organizing that you’re doing resembles workplace organizing. A couple of questions. One is: did your background that you were describing before, coming to the Edmonton Public Library, seem to entail some of that organizing work? How did that inform your approach to the submission process? Was it a one-to-one? What’s different about it? And then also, as you’re doing this work, I wonder how often local political community issues come into the conversation? And do you see potential within this territorial juried process, the community music community building that you’re doing there? Is it just inevitably also a political project?

Rocky Mann: It’s interesting the words you select. I would say that it’s more outreach. There is an organization part. But the public library, Edmonton Public Library, first and foremost, is really about outreach. So before this role at EPL, I was a community librarian. Basically, my job is to drive around, look at what’s there, and talk to people. So I might drive by a building and see a sign. Some group or organization that I’ve never heard of that might not even have a website or be in the phonebook. And I’ll try to connect to see what, what they’re up to. 

And the question of, what are you up to? What are your goals? What are your visions? And how can the library support you? So what are the barriers to doing what you want to do in this community and for yourself? And then from those, from that “discovery interview” to use traditional library terms, we try to find ways the library can support. Versus I would say, and I think the platform supports this as well, because it’s collaboratively developed, this community based feedback. We bring that to Preston and Glen, and try to see it technically applied in that in a technical way, how can that technology support that need? 

So we take what they’re saying… This is opposite, I think, of a corporate model where a business says “we’ve built this amazing thing. Now, you should probably want to use it and this is how you can use it.” That, to me, is very like if you build it, they will come where the focus is on the company or the product versus the process. My background is really, process is just as important as product. When I’m reaching out during the submissions process. I’m trying to build a relationship. Everything is about relationships. 

Everything is about trust. I think Capital City Records and the MUSICat platform is the foundation of a safe place for sharing creative works, not just for the artists, but also there’s a gap of access for our Edmontonians, for example, and the world to access local content. A lot of this stuff may exist elsewhere on Bandcamp, or SoundCloud, or other things, but to be part of this collection, that is recognized by the library that is seen as this something that has value in that sense. There’s almost that, for lack of a better word, there’s an authority there, people trust the library, people know that there is very, very strong values, ethics process behind selection, and a historical commitment to intellectual freedom and things like that in a way that, there’s a lot of hot debate around those subjects as well.

And there will never be a clear answer. But the library is the appropriate place for those decisions to be made, as I’ve discussed before. So how do I recruit, how does that all work into it? Relationships are of the utmost importance, whether it’s an individual or group, making people aware of what’s available, but in that talking to people to learn what they need, and then feeding that into creating something available. So it’s ground up that way. And that’s powerful. It’s wonderful, I can reach out to an artist I maybe connected with once and it’s always a pleasant interaction.

I see them in my community on the ground, I really see the technology in the platform as the foundation for that. It’s the foundation for education, artists’ education, artists’ awareness, organizing around it, connecting people in real life on the ground, building those communities between artists and the rest of Edmonton and celebrating the culture and identity here, which in turn, those strong communities helps for that mutual support. That identity of what we are historically and now is really important to this global divide in places. I know it’s so strong between political views, you talked a lot about politics. 

The politics that are thereI hope that this project can help curb that socio-economic gap between access to equitable distribution sharing and representation through the technology and the initiative. But it’s also about taking the politics out in a way that’s about–it’s first and foremost, the people and their works, and the perspective that might encompass politics, but it’s never neutral. But we strive for equity. Long-winded answer.

William Saas: Solidarity maybe?

Rocky Mann: Solidarity and strengthening community access, it excites me so much. And I know the biggest needs because I constantly get feedback. I’ll tell you how the artists really influenced two parts of the submissions process and how we do things, but I constantly get feedback and ask for feedback. What do they need now? What is of interest? So music business industry education, embedding metadata, we could get into that, too.

There’s so many overwhelming aspects to participating in these creative new industries that really important things like having proper metadata to protect your creative works is something I don’t think most artists know how to do or really are informed about. And so there’s that and even in our honorariums, I would say originally, I got some feedback being like, “hey, I’m an experimental artist and my album is two tracks and 40 minutes long.” 

But we have tiers for honorariums. You asked before, can people submit one song or is it albums? It’s not just one track. We don’t have submissions for if you have a single, although I was just asked about this, and maybe that needs to change because singles are a very important thing these days. Maybe that’s a future discussion. But it is an EP, so originally, it was three tracks as an EP and above six tracks is an album and 12 or 10 plus gets the highest honorarium because we do want to attribute work somebody who’s invested in an album-length work, we want to compensate them for that contribution for maybe for an EP length or something. But we were doing by number of tracks, and that really wasn’t equitable. 

So, upon that comment, I further reached out. I did a survey of all 300 artists. Tell me about your work. Tell me about what you consider. So now it’s an either or. So if you’re out and I based it on LP length, so a 7 inch how many minutes of music can that hold? 10 inch how many minutes of that and an LP–12 inch–how many minutes? And everybody agreed, that seems fair. So now the honorariums are based on either this amount of minutes, or this many tracks, because a punk or country album, which might have 12 short songs, but still be 15 minutes long.

Like my album is a full album, but it’s not as long as other genres. So out of all my creation trends, genres, and these works was all through those conversations, and then they result in our submissions process. And how we compensate. Two rants.

Scott Ferguson: Can you discuss a specific example of how artist participation changed the tech?

Preston Austin: Sure. There’s really a bunch. I’m trying to think of some that are odd and core to it. My mind is still on this question of album lengths right now. So which has ended up by the way being a constant area of work? So we’ve revisited again and again and again and again and again. So I think a key area where artist feedback changed the tech that I want to talk about in terms of responsiveness and the fact that this is a public platform and stuff like that. We’re in the middle of a worldwide pandemic, or not, depending on who you ask. But if you’re asking me, it’s still going on. 

And at the beginning of that, we had a situation where everybody whose work was not considered a societal priority, and whose work depended on getting a bunch of people in little venues and rooms together just went away, all over the place. And so, we saw this situation where people who wait tables and artists who play in the venues where people who wait tables, and artists who play in small venues and cities and venues themselves, and we’re all just saying, “oh, we used to do things, and now we sit around at home, and this is ruining us. What should we do about that?” 

There was push-back in a lot of spaces that were non-commercial, to say, “okay, how can we support each other?” So our libraries, we’re hearing from artists, a little bit of, “hey, basically can we do more to link out to places where we can generate revenue?” And so our reaction to that was twofold at Rabble… actually threefold, we did three things. One, we put up a product, which actually I need to take down on the webpage because we can’t afford it anymore. But we put up the product which we said, okay, for the duration of the pandemic, if you will support your local artists, if you have a budget for artists, we will bring up your MUSICat collection rate. And we actually still have one, I’m not going to say who because I don’t like to reveal who’s paying and who has not. 

But we have a city that actually does not pay anything for MUSICat for a major urban market because they wanted to support their artists. And we said “fine, we won’t charge you anything, get a budget worked out when you can when there’s money.” That was one thing we did. Another thing we did though, and this is changing platform in reaction to artists, we added the ability for participating libraries who want to do it to offer their artists the ability to put up links to peer-to-peer payment platforms as part of the artists page that did not exist as a feature. And we just straightforwardly said, if people want to be able to jump off to give the artists money, we’re going to make that an aspect of the artist page. 

So somebody in Rocky’s role can turn a feature like that on or off and an artist can opt into it. And if they want to put in links to things like CashApp, or Venmo, or Paypal or whatnot, we recognize those and offer those links on the page. And that was just one of the ways people are supporting each other during this pandemic, artists in particular are being hit hard by these, small local artists are being hit harder than artists in general, we’re just going to do this. So that’s a durable change to the technology that was just completely in response to that. And then the final thing we did is for two or three months as a company, we put down all of our work at MUSICat completely. 

We built a separate platform for people to simply give money to local servers at restaurants. So we just built something called tipyourserver.org. We built it around a simple spreadsheet driven product that somebody named Emil Wimmer had built, which was cool, we thought that’s awesome. Let’s build a way for people to just give money to people during this pandemic, who were working at restaurants who they normally tip. I don’t think by the way that there should be a tipped minimum wage, I don’t think anybody should be paid in tips. I think that that’s all crazy. But that’s the reality of the world. And we knew there were social relationships there that would support people. So we built tipyourserver.org, which basically leveraged the same approach. Let people say what restaurant they worked for in what city and then jump off to a Venmo, or CashApp or whatever. And we don’t track things in a way that would allow me to know who does what. We’re very anti-surveillance. 

But we did do a little bit of basic logging of how much that got used. And we did some analysis of some of that use from users. Basically, these platforms helped early in the pandemic move, tens of thousands of dollars a week at the scale of a city like Madison into the hands of people who needed the money to buy groceries. So these are reactions in technology. I’ve gone a little afield maybe from when we’ve started. But I think it’s an important aspect of where we’re at and how we’re trying to react to library values. We work with libraries. When the pandemic came, libraries dropped everything in order to become local support institutions for their communities, because they have a public mission. And so they do what’s important if they can, they don’t… this gets to Rocky’s point. They’re not trying to sell their product, they’re trying to react to their community needs. We have to do that, too. So that’s what we tried to do in that case.

Scott Ferguson: So we had a question that I think the language was spin “spin off projects.” But I almost feel like that question is wrongheaded. Because from your answers, it’s clear that the tech and the community and creating values and it’s all related, and everything spills into everything. This is as much about streaming local music as it is about local outreach as it is about supporting people during a pandemic who are restaurant workers. 

But I guess maybe to ask this question in a slightly different way. Clearly, this is a project that goes beyond just a streaming service. Rocky referenced a concert that had happened. What kinds of other projects that are music based, have spilled out of this music streaming project?

Rocky Mann: A lot, so many. I guess I’ll start. Concerts were always part of the goal. And also part of that community building aspect. We started with concerts, every open round we’d have a concert and then there was this thing we were seeing that Capital City Record artists were really excited to be in Capital City Records together and wanted to put on their own Capital City Records events. 

Which is usually they’re hosted by the library or a partnership with an organization or, or venue or something. So that was really cool to see.

William Saas: When you say “in Capital City Records,” do you have a physical space in addition to the catalog?

Rocky Mann: We do. We have a theater and a stage in our downtown library. I think our initial concerts were held in the park beside one of our other libraries, but also in other local venues. It’s really important to be supportive. Those music venues. And those local businesses aside from nonprofits and organizations are the heart of our music community. And especially during the pandemic that was really tough on our venues, who are the most… they’re really actually our pubs and our bars, who put on live music are really trying to be identified as culture hubs versus pubs or bars for funding and other reasons for their contributions. 

So we like to work with those groups, those businesses as well. Concerts can happen anywhere. We started partnering with festivals to have a Capital City Record stage where if you showed your library card, which is free, you could have free access to the Capital City Record stage, because a barrier to participating in local culture is access to music, festivals and events. All our events are free. We don’t charge for anything when it comes to the community accessing Capital City Records work or events. So concerts were one. And they really spread the gamut of what kinds of events are shared.

Sometimes we just support another group if they want to use Capital City Records artists, so we’ll recommend and we’ll make that relationship connection for them as well. The second thing was a podcast with our local radio station here, CKOA Songs of the Week, which was so cool, because it was starting to connect other local celebrities with the collections. So they come and pick their favorite artists or track, and there’d be a five minute mini-podcast about why they love it. We’ve had the mayor on there. It could be anyone. So that was really great. We had two seasons of the podcast. So it was a partnership. 

The technology when Rabble created the playlist, so getting other record stores or local music enthusiasts to also share their picks and playlists just like in other aspects of the library. We have people give book lists and things like that. So that was really important, Matt has been really great for little projects. Then, there’s the Posters Archive Collection, that was a side project or not a side that was always built in. It’s something that I really hope to have the resources to expand. 

I love that as a piece to the site. So I know in Alex’s notes from that original report and transcending that it’s not… There’s the contemporary music collection, which is the submissions process, but it was really important that the platform also celebrate Edmonton local music history, as well. So it’s not just what are the albums in the last five years or that a part of submission? It’s what’s the history that feeds into what makes the community today. So the Gig Posters Archive is part of that. 

Then we had a group of protest, the community group called Legends of Edmonton Music Scene Society, who have probably spent thousands of hours passionately collecting information and media about Edmonton music life. So it started off from the Shoebox Radio Show where Pete The Rocker was interviewing local legends. It’s quite amazing. He’s very passionate about it. These legends are here right now and he wants to celebrate them and make sure that they have a name and he will cry. 

He has a lot of emotion talking about it because it is important. It’s important to those artists themselves, their families, and the community. It’s been a long… It’s an intensive process, but immediately Rabble said, “okay, let’s build a showcase.” We need something on there that can offer the opportunity for libraries to build other types of collections. There’s five categories, musicians, bands, venues, media (media is really important for a thriving music community). Who are those players in media who have really boosted artists in the past? And what are their stories? Builders. So who’s the music community builder that’s a category in the Legends of Edmonton Music Scene Society collection. 

We’re trying to support a volunteer-run group to build a really beautiful collection, celebrating Edmonton music history, with old archive radio shows and other things. That’s another not side project, but that has come from those relationships and that has also fed into new aspects of the technology and platform. And there’s music videos, the video feature that Rabble implemented, we were getting requests to showcase music videos or other projects in the community, there was one called Northern Sessions or the Dead Venues Documentary that was all about our historical venues. So I think originally, we made a separate page that was linked in to MUSICat. 

But then they built it right in. So now it’s part of the product. It’s part of the platform, which is awesome. And now it’s being used in so many different ways by all the libraries who use MUSICat. So I love going on to all the different libraries that are using the platform and seeing what they’re doing with these features and what their other projects are. Because the ways that you can use the technology are endless. There’s so many ways you can represent the community. Aside from the album and submissions collection, then one of the more excited ones was… I think we’re maybe the first public library to press a vinyl compilation. 

So we’ve been building as makerspaces. And making becomes part of a lot of public library services, as it’s seen as another type of literacy and route for civic participation. We built living recording studios, we’ve had them for a long time. And when our downtown library was going into renovations and revitalizing it, we really set up and so we were doing fundraising. It was part of a fundraiser for these new recording studios that are complete and in full use. Very beautiful. But also it was from one of our members on the City Council at the time, who was very passionate about the arts community and he said let’s press a record and I said “well, that’s my idea, too.” 

Councilor Scott McKeen was really wonderful on that. So he just rallied, helped us rally a bunch of players. We had somebody who was an expert in working with visual artists to help us with the artwork. Long story short, Edmonton Arts Council also came on board to fund it. We had a separate jury onboard of very… they didn’t have to be in Edmonton, we had Cadence Weapon from Edmonton, but like a huge mentor and celebrated artists here in Canada, on the jury, so we had a separate jury, we invited artists to really submit tracks previously unreleased in physical format, because again, we didn’t want to limit the ability for artists to be sharing through this long year, wait a whole year for this album to be pressed before they could continue on with their business. So that was awesome. 

We worked with the radio station to curate the record once the submissions were selected. Everything was local, we had a local press here, press the vinyl. The artwork was from a muralist from Edmonton. So that was a really exciting project, you can see the artwork from behind me.

William Saas: I’ve been admiring most of the entire show, our conversations… that’s awesome.

Rocky Mann: There’s… she calls them easter eggs that are inside jokes and the music community you can find in the artwork. But I’ll say that through that process, the feedback from that project was, it’s so expensive, some artists, there was such a range of people present on there like Juno Award winners, and people who maybe recorded that track in the basement, who would never be able to access or afford to have at that time, their music pressed on wax. So it was just really exciting. 

And a challenge to make a compilation across genres. We have the north side because Edmonton is split by a river and there’s a joke of like the north side of the south side. So all of it really celebrates the city. So we’ve pressed a record, we’re hoping to do a volume two. We’ve also had projects during the pandemic through Capital City Records for virtual concerts. So we were holding interactive people on Valentine’s Day and other concerts and streaming them in hospital wards and long-term care facilities where the artist would share messages from between loved ones. So we were making connections between those artists and different kinds of community groups. 

Which led to another realization that not everybody can attend a physical concert I have to say a positive thing came out, the platform and these spin off quote “spin-off” projects that come out of it help us realize other barriers that music lovers and music makers face in connecting their art with local art and culture. And that was one. So we’re continuing to do those even if live venues are open again.

William Saas: How long have you been doing the MUSICat project? That sounds like 10 years.

Rocky Mann: That’s how I started in 2016. Oh, and we started a physical collection of CDs, which is interesting.

William Saas: Amazing.

Rocky Mann: So hoping to represent physical works from the digital collection, alongside local authors and things like that. But, 7… 6 years. And now we’re partnering with the Juno Award. So I’m hoping that can become a thing, too. We’re talking about a song… a music expert, or musician residents like the local poet laureate. So that’s very new. I don’t know where that will go. 

But it’s something that the education artists education and support through the initiative, all founded through the platform and the technology that is the base for all of these other things. It opens up so many opportunities to bring people together. And I think that’s why we determined a digital public space, is because this technology is so deeply entwined into all the ways that we can connect and support artists and Edmontonians. That was a long rant, but there is so much.

Scott Ferguson: Beautiful, it was so beautiful. This is all just so glorious. I think it’s wonderful. Maybe we can have a bit of a meta-conversation about what else we want to get on record. So we’re holding maybe some of the technical discussion for when Kelly arrived. Do we want to do some of that? Preston?

Preston Austin: I’m absolutely happy to. Kelly started this project as the representative. She was doing a public humanities fellowship during her PhD in musicology at University of Wisconsin Madison, she went to work at the library during that and built in the way that a super high-end intern can do moving freely in an institution built the foundations of a few things. One of them was everything internal to make possible the collaboration. So we’re one week into that process of working with her and I go talk to one of my business partners, and I’m like, “wow, like this Kelly Heiser person, holy shit. Is she good at absolutely everything?” So she’s getting her PhD in musicology. 

But she’ll be like, “well, how does the tech work on this?” Then two days later, she comes back, and she’s gone and read StackOverflow, or whatever. It’s not magic work. But she just puts in the work and brings it back and is unafraid to try things. And so I think we were probably less than a month into this collaboration with Madison, when I was like there’s gotta be a way I can work with Kelly in the future on something. I don’t want this to end with this fellowship. And so that’s a little bit of a history of how they came to be Rabble. And I think actually, when she first invited us, when we first said to her, “hey, do you want to start a company or something like that?” 

I actually think that is much like with the art music library project. I mean, I’m pretty sure the answer was no. And I was like, well, I won’t bother. But then opportunity opened up. So as a musicologist and as a scholar and as a participant from the library side, initially, she brought an abundance of theory to this. A thoughtfulness around sound, we can talk for two hours about sound. What is sound? Kelly and I used to go on at great length about how annoying it is to deal with people in technology who are obsessed with fidelity, with linearity, with the reproduction of objectively perfect sound. What the hell does that even mean? I’m not going to do that on your program.

Scott Ferguson: Oh, please.

Preston Austin: Not without Kelly. I have somebody who actually knows what they’re talking about and conversation. Otherwise, I’ll go too far out of land of some bullshit exposition on a topic. So anyway, there’s no aspect of the history of building Rabble MUSICat that I’m not also a party to. It’s just worth understanding that she founded this company, and I worked for her during the period of time prior to and the first few years of Rocky’s work in Edmonton and the establishment of the core values and all of this. There’s never a point at which that’s not under Kelly’s leadership. And I just think that’s important. And there’s Kelly!

Scott Ferguson: There’s Kelly!

Preston Austin: I have invoked her into the conversation. I was singing your phrases here.

Kelly Hiser: I know I missed you. It’s been way too long. 

Rocky Mann: Preston just said that you just miss the good five minutes…

William Saas: It was as though his job was to introduce you before giving an amazing talk. So you’re up.

Scott Ferguson: No pressure.

Preston Austin: No pressure, Kelly. I’m pretty sure that I just said that you can do anything at all.

Scott Ferguson: We’ve taken quite the tour, all around MUSICat. But we’d like you to talk a little bit about the initial challenges with the technology and what the design process was about, especially initially, and then Preston has suggested that because of your musicology background, you have some things to say about music theory or music fidelity or non-fidelity.

William Saas: What is sound? 

Scott Ferguson: What is sound? You take this, however, wherever you want to take it.

Kelly Hiser: In terms of thinking about sound from a more philosophical standpoint, I have always had this stance that being an audiophile is more about status than any real quality in music. So I was always… just make it work, I don’t care. As long as it… once you get to a certain point, people will say they can tell the difference between different levels of fidelity. But in most cases, that’s just not how people are actually using music in their lives. 

And it just ultimately, that’s not what these collections were about at all to me. They are more about building community demonstrating the value of music in a community. And I don’t think the value of that music is in any way tied up with some technological fidelity to sound quality.

Preston Austin: Agreed. That said, the sound quality is perfect. I can speak a little bit to some of this, too. So one of the things that was a question basically, is what formats are accepted. And so what we targeted was making it basically anything. And we encourage these days artists to upload WAV for 4.1 kilohertz 16-bit so that they have a baseline standard that is equivalent to what was used to offer CDs. When you run into all the problems and talk about dynamic range, and loudness, and compressing everything into the upper end of that, artists are going to do what artists are going to do. But if they have mastered tracks in WAV, we’ll use them. But there are other people who are doing their entire workflow in mp3 tools, and they want to upload an mp3 and we’re not going to be like, “oh, it’s 120 kilobit mp3 that you made five years before the first collection was done, and we’re not going to take it because that’s not master quality or whatever.” F that. 

Kelly Hiser: That’s a good point, too, because those differences are very much tied up in genre and race. Fidelity to some audio quality can be a white male status symbol. And a lot of the time when folks are creating stuff in mp3, it’s Black musicians who are working in their local hip hop scene. So another reason to really question audio quality as a marker of value or goodness.

Rocky Mann: I’ll agree and I’ll just say even when on that vinyl record, even on wax, which is “oh gosh, you must have spent $10,000 to get a master to sound good enough for a pressing,” we had such a range of file types, compression, quality. They all sound great somewhere like basement recordings and submitted on mp3. And they sound equally good on wax as they do on the platform. So that to just follow up on what Kelly said.

Kelly Hiser: Rocky, I’m sorry, I have to take a tangent. I have that print of the vinyl hanging in the entryway of my house downstairs. It’s framed. The exact same thing is right underneath me before.

William Saas: Are copies still available? Now I feel like I want in. Can people outside of Edmonton get a hold of it?

Rocky Mann: You can just email me after. We can mail one.

William Saas: Well, I was gonna say, we could also put it in the show notes and invite listeners, if that’s something that you have copies to sell. Awesome. I’m definitely intrigued.

Preston Austin: I need to get in on that as well. So we were going to make our poster that you sent us as a gift for Mark Bracken, who was one of the interface developers who was instrumental in your first submission round. Mark Bracken killed himself to make it possible for Edmonton to get through the jury process. We were literally writing every interface a couple of days. And Kelly was presiding over that process. 

And I was making sure that the servers worked. And Mark, we were going to frame your poster, put a little plaque on it, a little brass plaque. And so it was a framing shop when the pandemic hit. And between one thing and another, it has been lost to the world of framing. So if I can get another poster, that would be great. I want to but I still want to give Mark that gift if I can.

Rocky Mann: No we can get that. I’d have to say that’s another example. We wanted to do this thing, we needed a different type of submission process, we needed the technology to work differently than the regular round. And again, something was created that could support what we need to do. 

Kelly Hiser: And that goes to that question about what was the design process like? Preston says I can do anything. I had zero tech, or UX, or product management experience when I came into the role. And really what I did instinctively, and what was Preston’s philosophy as well from the beginning, was we just worked incredibly closely with our library partners, so that the design process was really working with them and not for them. 

We talk a lot about designing with, not for and that was really what we did. We had librarians in our GitHub repo actually in the code with us checking things out and testing stuff as we went. And it was… there were no mocks, there were no requirements, it was very messy and chaotic. It was a chaotic collaboration among a couple of really talented developers who put in a lot of backbreaking hours for us, which I have sworn I will never ask another developer to do again, if at all possible, because it was not fun for him. 

But he cared about the work and believed in it. And we all did. So I can’t speak to there being some actual process, it was very much more just let’s have some meetings and put some basic requirements together and have Mark go off and build a thing and just keep that circle going.

Rocky Mann: And then I’ll show it to you. So that’s the thing, it opens and then it was even on color, which was a whole thing.

Scott Ferguson: That’s awesome.

William Saas: Blue vinyl.

Rocky Mann: It’s so pretty.

Kelly Hiser: It’s really pretty. It’s really good, too. It’s such a good album.

William Saas: So Rocky, I imagine in the context of Edmonton, the pitch to artists is pretty easy now, after you’ve done this work for over six years and built this community out. I’m wondering, for newer or aspiring libraries who would like to join the network and become part of and have MUSICat. What does the early pitch look like? How do you get artists involved? Is it the honorarium? Is that what you lead with? Or do you lead with the mission of MUSICat and the mission of the platform and the sense of community? You have all of that in Edmonton. And I think that it would be implied in your approach, or at least you could point to it. But in places where that’s not established yet what does the pitch look like to artists to join the network? 

Rocky Mann: To artists… Because there’s a pitch to artists, there’s a pitch to libraries. And there’s a pitch internally to continue. So I’d say to artists, the honorarium is part of what I call this is a safe space of integrity. This is so aside from just sharing music, there’s so much more to part of it. It’s supporting their career, their civic participation, as we say. So all these aspects to be in this archive collection to have… Preston and I were talking last night about the Marc Record, what it means. 

What it means to have a historical authority that applies to your work, so it’ll be discoverable. And as a snapshot of a place in time, and a culture in time, historically is so important. It’s very different than the… I will say it here, but in a sense, it’s part of a community question. It’s something that we talk a lot with the university and there are researchers there and how can we make this something of value into the future to long beyond, which gets into other interesting conversations about forms of technology, how people might want to be not identified the same way, all through history all through time, moving forward, but the value for artists, one, what I call a safe space, that means a lot, it means a supportive space, that means something that strives for an ethical standard. 

Strives from a different agenda, it comes from a different agenda, that they know that we might not always be fluid will be changing. A $200 honorarium is a lot for some people. And maybe for other people, it isn’t so much. If we could pay more we’d love to, but that being paid something to share your work, instead of having to pay or having to have something cut out of your work. Just the idea of that is really meaningful. Then there’s the opportunities on the ground, and not opportunities in the way, if you join us, a corporate mentality, something that’s trying to sell a product might communicate, there’s so much opportunity if you join our organization, or our business or our thing, it’s not like that, it’s let’s connect you. 

There’s other people who have similar interests as you and there’s other knowledge out there in our local community that is exciting. So, that’s the piece. I have a whole paper right or document right here, we come back all the time with quotes from artists and for example, say the Denim Daddies, who are a local country group, I’ve written letters of support for grants they’re applying for. I help with some of those quality files, I’ll help share knowledge. And then if I know another artist, then I’ll connect them to that artist who might have that knowledge to share. 

So that’s part of it. I think it’s the community and being attached to the library, for all the value the library has in society is what’s meaningful. So they say, “the Denim Daddies are excited to be part of this unique project that connects Edmonton talented artists with the library community. It gives the public access to local musicians whom they may not have heard, and gives them an accessible way of discovering artists from Edmonton. DCR is writing an ongoing history of Edmonton’s ever growing and always talented community.” So I think in that quote, it’s the greater importance in place of a public library including accessibility, not just for artists, but for music lovers and for those who need to connect to local culture.

Scott Ferguson: So to close us out, I wanted to explore with you all, a federal policy proposal that we at Money on the Left are very much advocate for, is the Federal Job Guarantee. This would essentially guarantee everyone who is willing and able a public service job to participate in their community, whether it’s in the arts or working in any number of communal senses, and one of the reasons we’re so inspired by your project, is that it seems you’re already doing the work that we imagine would be done across scales, and would be guaranteed by federal spending through a Job Guarantee.

So we were wondering if you feel like your experience in doing what you do… Well, we’re sure that you have things to teach us who are advocates for the Job Guarantee. But what might a Job Guarantee program of public service employment mean to you all and what you do?

Preston Austin: I can speak a little bit to this, or maybe a lot, but I don’t have time. So I assume when you’re talking about looking at this as a federal policy proposal that you’re basically talking about Sandy Darity and Derek Hamilton’s version of this concept.

Scott Ferguson: There are multiple versions of it. And we are in solidarity with…

Preston Austin: Okay, sure, fair enough. So that’s the recent discourse that I’m familiar with. So one of the things I want to say is that, if we’re going to use an Employment Guarantee as a way of creating economic security and economic justice, one of the questions I have is where does being an artist stand in public employment? Is it a public value that can be funded from a public budget? And I think that building a skeleton towards that, with material payments and relationships between public entities that act as a qualifying enterprise for eligibility, and that build the relationships along which funds can flow, I think is important. 

And I think that while it is not… it prefigures something very thinly. But I also don’t want to overstate what’s happening here, like getting a single $200 check from your Public Library is where a $300 check is great, respectful and material. And that’s what we want it to be respectful and material, straightforward, artist friendly terms upfront, no bullshit. But we don’t want to pretend that this is lots and lots of money. Not right now. However, we do want it to actually become lots and lots of money. 

So we’re trying to validate direct public funding of artists’ work. And I think that connecting the throughline from there to direct public funding of lots of people’s endeavors in a Job Guarantee program is not that hard to draw. So I’d like to see that become $200 a month for the duration of work on the collection. And I’d like to see it become more than that. I’d like there to see fellowships within this where artists are really a city’s artists and residents are one of a collection of and then that group gets expanded over time.

This is really, really important. And again our philosophy is not, “hey, let’s find a valuable work.” Our philosophy is “let’s invest in the valuable activity of people producing art and working with very local public institutions to collect and celebrate and share that.” So that’s what I’d like to see funded, I don’t want to construct an increased purchase of your work, I’m not particularly interested in metering or something like that. Instead, it’s increased support for the activity of those who produce these valued local works. I’ll stop there.

Kelly Hiser: I can hop in, too, and just say that I think when you’re imagining other possibilities than the ones we live in, it’s great to have big theoretical frameworks. But it’s also crucial to have real work happening within the cracks of the system. And I think that’s what we’ve been able to do really successfully. I think we heard a lot of doubt about how you can do this with the way copyright is and the way libraries are constructed. And we just pushed and we’re able to create a model that’s been replicable in a lot of different kinds of communities. 

I agree with Preston, we don’t want to pretend that we’re revolutionizing the world, but at the same same time, this is a radically different prospect than the commercial music industry. And it’s one crack in the fortress.

Rocky Mann: What really hits home for when you said validate direct public funding of artists’ work, I can see that happening. I just have never really thought about it that way. For example writers and authors and books are really the traditional content in a public library. So we have a writers-in-residence program, they get paid for a year to be a writer-in-residence. And now, as I mentioned earlier, especially now that we have recording studios and other things, other aspects, and it’s become recognized that this content is also important in cultural content, that the library is a really valid and important piece of our collections. 

And how do we represent that? So a music expert, or musician, or songwriter-in-residence is on the table. Same with the fact that a lot of the artists who… that validation piece, I know artists in the collection who’ve been able to get CVC spotlight, national spotlight, funding or have gotten big awards through being through… I think it’s supported, I’m not gonna say directly influenced, but I will say that being part of this collection or that validation by a public, not just institution, because CCR is funded here in Canada by residential taxes. 

So basically, that image in public libraries, saying that the community who is paying taxes has determined that this is a value to them. So that money from the pockets of the community is supporting those artists’ work. And being in the collection is indirectly saying to these other ways that an artist can survive and make money and continue to subsist that our civic community has identified that this is of value, and therefore programs are being created that can allow them to maybe make some of a living by what you said… I don’t know… I think the education piece and the whole licensing royalties here is so different than the states. 

But to me, that’s a huge part. When artists come in, some are aware, some don’t know how to properly also receive royalties. And we have several complicated CMOs and PROs. But that’s a piece that we can help with. So that can also play into that income to subsist and continue to provide the public service of culture production and connection.

Preston Austin: Real quick, I want to expand on a point that Rocky made if there’s time. So one of the things Rocky mentioned earlier in the conversation was Marc Records. So Marc Records, M-A-R-C Records are basically catalog card digital records. So if you imagine your old school card catalog with a little… So one of the things we do that feels like a dry library world concern is we export Marc Records of the collection was actually a big hassle. It’s hard to do. And libraries have different standards for it. And we thought it was really important. And the reason why is because for a lot of these works locally, it’s the first cyclical existence of the work and possibly the act, the artist as a band that they can point out that goes into durable institutional memory. 

And I don’t know quite how to tie this together. But I think that this is one of these things that connects to the value that leads to flows of money as is like existing to institutions, as a record, in a good way… Is really, really important and not trivially accessible and being citable isn’t just an academic concern. It’s a validation for all sorts of things. And collectively, it’s the validation that allows things to be counted. 

So for example, Austin Public Library, when they take artists off the collection after the period that they’ve licensed their work for, they’ve ended up using the features that we helped write with Rocky that Legends of Edmonton Music is based on the showcase feature, to keep the artists represented as one of the people who built this collection by making a showcase record for them so they’re no longer an artist page because that’s connected to the published album and that’s not fair after three years. 

They keep 300 albums at a time on the collection. But that showcase page again, it’s part of keeping excitability alive and acknowledging contribution and respecting in a way that has more permanence and I think that that’s going to, as this goes forward, play more and more a role both individually and collectively and why it matters to artists.

William Saas: Well, Rocky Mann, Kelly Heiser, Preston Austin, thank you so much for your excellent, amazing, tremendous work on this. I think revolutionary technology MUSICat and thank you so much for joining us on Money on the Left, it’s been really amazing talking to you. 

Rocky Mann: Thank you.

Scott Ferguson: We did it! Amazing.

William Saas: That was so fun.

Scott Ferguson: Thank you so much. Wow. So I know Billy has a hard out.

William Saas: Gonna get a hard knock on the door here in a second.

Scott Ferguson: But we want to talk about securing permission for using the art in our art… we also and we were talking to Preston before about this. Rocky if you could potentially secure permission to use some clips from local music.

William Saas: Gotta be The Denim Daddies… gotta be.

Scott Ferguson: And we can splice them in as interludes throughout our conversation if that’s possible and we’ll just be in an email contact with you about that.

William Saas: This is awesome. I hope we can talk more in the future. Bye, guys.

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mercedes Ohlen (transcription), & Emily Reynolds of The Buffalo Institute for Contemporary Art (graphic art)

The Descent of Money w/ Rob Hawkes

The Descent of Money: Literature, Inheritance, and Trust in Edith Wharton’s The House of Mirth (1905) and John Galsworthy’s The Man of Property (1906)

Rob Hawkes’ paper argues that Edith Wharton’s The House of Mirth (1905) and John Galsworthy’s The Man of Property (1906) foreground, interrogate and enact questions of trust, both in their engagements with and departures from literary realism/naturalism and in their preoccupations with the value and power of money. Wharton’s novel is saturated with the language of costs, payments, investments, and debts, while the first of Galsworthy’s Forsyte novels presents ‘Forsyteism’ as an inescapable set of hereditary traits. Both texts, furthermore, implicitly associate money with nature and imagine a ‘sense of property’ as inherited in more ways than one, whilst simultaneously offering glimpses of a different understanding of money altogether: one that reveals surprising connections between literature, money, and trust.

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