Projections 1: Up for Grabs

In this first episode of Projections, Will Beaman (@agoingaccount) reflects on some recent comments from US Sen. Joe Manchin (D-W.Va) suggesting Democrats should prioritize inflation over Roe v. Wade in their campaign messaging in the midterms.

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

Place-Based Narrative Labor with Sonia Ivancic

Money on the Left 
speaks with Dr. Sonia Ivancic about the importance of regionally sensitive and affirmative storytelling in provisioning processes. Assistant Professor in organizational communication at University of South Florida, Dr. Ivancic is a community-engaged researcher, whose work on “place-based narrative labor” offers essential new tools for displacing prevailing scarcity logics and rhetorics of austerity with more capacious ways of thinking, arguing, and narrating.

Through embedded fieldwork with non-profit, rural Appalachian food distributors, Professor Ivancic has developed astute critiques of the narrative frames used by some grant-making non-profits as they paradoxically seek to address privation and hunger in Appalachia by perpetually framing privation and hunger in Appalachia as the region’s most salient and seemingly default characteristicsIn place of this “deficit-driven” characterization–which, owing to the ways that such projects depend on the grant cycle, is nearly always the dominant kind of characterization–Dr. Ivancic identifies and promotes an “asset-driven”mode of place-based narrative labor. With this asset-based approach, the provisioning process affirmatively calls attention to and works to expand the capacities and potentials of a given community, honoring the dignity of particular communities, while opening political imaginaries to include new metrics for collective flourishing and renewal.

In our conversation, we extend Ivancic’s theorization of asset-driven place-based narrative labor to rethink the challenges and potentials of a Federal Job Guarantee under a future Green New Deal. We also draw rich parallels between her account of narrativity in local provisioning and conceptions of macro political economy in Modern Monetary Theory and other heterodox traditions in political economy.

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

Scott Ferguson: Sonia Ivancic, welcome to Money on the Left!

Sonia Ivancic: Thank you for having me. I’m excited to be here.

Scott Ferguson: We’re excited to have you. To begin, could you tell our audience a bit about your personal and professional background? How did you come to pursue your present research and pedagogical work in Communication Studies and in organizational communication in particular?

Sonia Ivancic: I’ve been thinking a lot about that question and just in the context of what we’re talking about today, and how many different ways you can story, your experience or my experience or my way of coming to this. So that’s just a side note that that’s been something I’ve been thinking about. But for me, personally, I grew up in Seattle, my parents are actually from Hamilton, Ohio. So it’s not Southeast Ohio, but not too far from where I did a lot of this research. My mom was raised by a single mother and was a first generation college student, she grew up pretty poor. She worked in early childhood education, she ran a child care center, at one point, taught special education, helped support high risk mothers. And then my dad is an architect. And so this is one of those jobs that is very affected by the economy. 

The reason we moved to Seattle was because all the architects in Albuquerque were getting laid off. And so we had to find a region that was having a boom, and was doing a lot of building. And I was four when we did that. And then he also was laid off for a relatively long time, during our most recent recession. So this is all to say that, because of this, I think conversations about work, and child care and poverty, were kind of routinely talked about in my house growing up. And then a lot of my research is around food, I would say food is a major love language for my mom. But so with all of this in mind, I went into my undergraduate degree at the University of Puget Sound, which is in Tacoma, Washington, and thinking I would get an MBA eventually. I was very entrepreneurial child and I really enjoyed finding various ways of selling things as a kid like ice cream, or like garage sales, or coffee cake. 

And so it was kind of this creative outlet for me. So I was like, oh, yeah, I’m gonna get an MBA, because I have this sort of history or thing I like to do. But I sort of accidentally happened into a class in organizational communication. I took a class called “Work Discourse” by a professor who later became my advisor, her name’s Dr. Renee Houston. And that really kind of changed things for me. I found I was really interested in wading into conversations about how a communication perspective can help us think about organizational issues like voice, power, control, dignity, and so forth. So I found I was less interested in finding ways to effectively manage employees and maybe more interested in why people talk and act in certain ways in organizations, and what does this do to people and to communities? And then how can we do it better? How can we create a world that’s more just? 

How can we create work, or an understanding of work that is more edifying for people? So broadly, my research is guided by a question: how do the ways we talk or the stories we tell perpetuate inequities, or open up spaces to promote equity and center marginalized voices? So I do both organizational and health communication research, I would say maybe the central themes running through my work are food and community organizing, as one, two would be discourses about the body or about work. And then three would be equitable and inequitable workplace practices.

William Saas: In answering the first question, you’ve signaled or anticipated where we’re going to go for the second, which is to your theory of “Place-Based Narrative Labor.” You started by talking about being from Seattle and family from Ohio. I’d be interested to hear other versions of that story, or the way that you negotiated that narrative, finally, for yourself with regard to the places that that you’ve been based. But before we get to that, could you tell us a little bit about what you mean by “place-based narrative labor” and why it’s so important to you? 

Sonia Ivancic: Yeah, so I’m gonna think I’m gonna start by talking about the context for the term, and then I’ll kind of get into what it means. But I think first one of the things communication scholars talk about is how nonprofit organizations specifically have to do,  rhetorical work to achieve legitimacy. They have to make arguments about what they’re doing, why they’re doing it, how successful it is, what the impact is. And they have to some, to some extent, tell and sell the story to people who will fund them. So this storytelling involves often telling stories to others, or telling stories about others. Like those they intend to help, oftentimes without input or decision from the people that are being depicted in the stories or images, right. So think of those commercials you often see of childhood hunger, that really depict others, and ways that we might be all familiar with, you know? 

So I’m building off of someone named Sarah Dempsey and her term “Communicative Labor”, where she talks about how nonprofits can often marginalize or misrepresent their typically vulnerable stakeholders, because they’re trying to cater their stories to the people who funded them. And this is usually an audience of privilege donors. And so the premise of a nonprofit is always that they’re making some positive contribution. But a critical Organizational Communication scholar might remind us or ask us to think about how they’re also always political actors as well. And so we might ask questions, like what stories are promoted by these organizations and whose interests are served through their work and through their storytelling? So it is sort of through both this context of the literature, but also through my ethnographic fieldwork, that I came up with this term of “Place- Based Narrative Labor.” 

So after kind of deep involvement and engagement with this organization in Southeast Ohio, called… or that I will call “Collaborative Food Strategies”– that’s a pseudonym– But this concept really evolved from seeing how the people there, talk and tell stories at the organization, how do they tell stories about the people and the place that, that they exist, and that they, they serve people in? And so it’s kind of my attempt to name something that I saw them doing and explain it’s significance, really. So what is “Place-Based Narrative Labor”? So I call what they do “Place-Based Narrative Labor”, which is the work of creating, maintaining and propagating narratives, or in this case, often counter narratives of place. And I call them counter narratives, because there’s sort of a typical dominant narrative of Appalachia, that is negative, deficit based about the problems in the region, and they sort of want to flip that and talk about what’s possible, beautiful, prosperous about the region. So they use these narratives about place to positively impact the region and the people there. 

And then when I say positively impact, I mean, both materially and symbolically so how can they change how people think of the place and the people there? And, also, how can they literally change that place, people’s food access, the type of food that people eat, the food knowledge and food skills that people have? So it kind of creates this space for the community to imagine what kind of future they want to create together. But it doesn’t mean downplaying or ignoring struggles or hardships and I think that’s sort of an important component. It means actively engaging and confronting these hardships and struggles and kind of dwelling in them, but never losing sight of what’s beautiful or possible or powerful about the place that they… that they are. So they draw on things like communal responsibility and collective strength. 

They reframe wealth, away from money to think about the natural resources that are there. The knowledge that people have the fact that people have been saving seeds there for hundreds of years, and things like that. So it’s it’s sort of this embodied emotional-lived interactional activity. It’s, it’s not just branding, or how they market themselves on their website, I think the value of ethnographic research is that you can be there to witness to see to hear the kind of in person interactions that go on at the organization. And so I saw them really, in their workshops at the farmers market, at the produce auction, sort of living this and taking this on as a daily practice.

So one of the important questions that brings up is what is placed mean? Who gets to decide? And I think engaging these questions is an important ongoing tension for the organization. Right? And that it may matters for all these reasons, right? So it matters in this specific case, because it’s trying to flip the way that they talk about Southeast Ohio is one of my participants specifically said, they’re trying to change other people’s ideas. But also, in general, and nonprofit organizations, whether they’re aware of it or not, are constantly telling stories that frame places in certain ways. Nonprofit organizations are already doing this work. I think the question is, how aware or mindful, are they about how they’re doing it? And that these stories impact how people see themselves, they impact how places understand what is possible, right? In that space. 

So they’re not just a reflection of what is, their constitutive and generative and their chosen, right? So it’s important to be mindful and consider: what are these stories doing? How are they acting to some degree? And then the other thing I think this brings attention to is that this storytelling is work, it’s labor. People were asking questions about how to tell these stories and wondering what the impacts of doing it in different ways was, they were taking it on as part of their jobs. And so I think a lot of times, the communicative work that we do in our jobs is incredibly important. We all do it to different degrees and in different ways. But we don’t necessarily name it or talk about it or value it, you know, kind of in the way when we talk about emotional labor, that you’re not necessarily paid for that. It’s just something you’re expected to do. And I think communicative work is a lot like that at times.

Scott Ferguson: Yeah. And the term that sometimes gets thrown around: “immaterial labor”– somehow doesn’t, doesn’t cut it. What you’re up to is much richer, and it affords us a lot more understanding about what’s going on.

Sonia Ivancic:  I appreciate that. Yeah, it doesn’t feel like it quite cuts it right? I think calling it immaterial, almost takes away some of the force of it or something, right? So I think creating food systems that are more just and equitable and cooperative and environmentally responsible requires creatively telling new stories and thinking critically about the role that these narratives play in accomplishing some sort of social change.

Maxximilian Seijo: And so then, as you already alluded to right, along alongside right, thinking about these sorts of narratives, right? You you have a particular concentration, geographically, and a lot of your research focuses on the Appalachian southeast region of Southeast Ohio. For our listeners, how would you characterize this region socially, historically, environmentally? And what drew you towards studying this region beyond what you’ve already mentioned with regards to your background?

Sonia Ivancic: Yeah, so I’ll talk about where I was with Southeast Ohio, which sits at the foothills of the Appalachian Mountains. People often talk about Appalachia or Appalachia… it can be pronounced different ways. Which is actually a very large, diverse region of I think over 13 states. So I’ll talk specifically about Southeast Ohio, which is this very lush, vibrant, beautiful place with hills and caves. Unlike other parts of Ohio, it has a relatively large number of farms that grow diverse crops. So oftentimes, like my visits to Ohio, when I was a child, visiting my extended family, we’d see a lot of these flat landscape and mono crop cornfield farms. And that’s not what you find in Southeast Ohio, I guess, actually, because the soil is not as rich. So interestingly, the less rich soil kind of creates this opportunity for farmers to grow these diverse farms with lots of diverse crops. 

And Southeast Ohio land that’s a lot cheaper than many other places. So I think because of all these things, it has this very vibrant regional food scene of local food growers and local food producers. And then a rich practice of home gardening, home canning, individuals who have saved seeds, like I said, in their community for hundreds of years and in their family for hundreds of years. And then kind of in contrast to that, or in conjunction with that, it also has what people call a history of extraction. And so it has this history of companies coming into the region– So coal mining, and brickmaking are really good examples– And then they come into the region and they create what is maybe the backbone of the economy. And they create these towns that maybe were once these thriving places. But when the resources ran out, or became no longer profitable for the companies, or whatever various different reasons, they left, kind of leaving this large environmental damage and their weak, leaving people who had once had good jobs with no opportunities for other jobs. 

Because they, you know, it was one of those sort of singular economies where it’s not, it wasn’t diverse in terms of what kinds of careers you could have. So and then, because of all of that, and Southeast Ohio also has a rich history of labor organizing and resistance against these corporations. So it’s kind of, you know, multifaceted, it’s many things. There’s currently a big anti-fracking movement that’s being organized in Southeast Ohio that I was really surprised to find out about when I moved there. So and then in the midst of this vibrant food system, and because of these lack of jobs that don’t earn people living wage, and due to how rural the region is, you have very high rates of poverty and food insecurity. 

The county that I was in routinely had the highest poverty rates in the state. And that can fluctuate year to year. So I don’t know if it’s necessarily currently true, but was something that often happened in the region. So I happen to live there while earning my PhD at Ohio University. And so partially, what drew me to the research was I, you know, I was there and around the place, and I got to sort of witness and see what was going on. But I think more than that, what I saw was this community, and this organization, responding in creative ways to some of these large societal problems that we have, like hunger, or a food system that damages our environment, and places a lot of the control of our food resources in these very few corporate actors. 

So I saw them sort of responding to these things differently. There’s a lot of critiques that can be made of our current food system, and also how we organize food assistance, in ways that tend to mark people or isolate them rather than create connection or community or inclusion. So food pantries are a good example. And a lot of our programs like food pantries, kind of presume that food insecurity is this natural inherent state of being. And so we build infrastructure for programs around emergency food assistance, kind of presuming this is normal, natural, and we’ll always have it, right. So we build this huge infrastructure of charity and emergency food, because we kind of presume that hunger is just a natural state of being.

But there’s a lot of research that says we actually have plenty of food. So the problem is not necessarily whether we have enough, it’s about things like allocation, access, profit margins, right? So I was kind of interested… there’s a lot of critiques that can be made. And those are really important to do. And that’s important work. But I was like, Can I find an organization that’s taking a different approach, you know, planning for long term solutions based on maybe the possibility of equity and justice rather than presuming that we’ll always have a community where people are hungry. Plus, I have this commitment to community engaged research and so both contributing to but also learning from the work that people are already doing in our communities is something that’s important to me as a scholar.

 So doing this project, where I lived also allowed me to have a really deep commitment, and involvement to that work. So with this stuff in mind, I was kind of just witnessing and noticing what was going on. I did some research with a fundraising event, you know, that ended up leading more to critique because I saw them labeling. The event is very communal and inclusive, and everyone’s doing it all together. But the ticket prices were very high, right? It was really exclusive and really hard to get a ticket. It was a very public event that happened in the public town square, like one long community table yet, you know, a lot of people weren’t included or invited. 

And then the whole thing was raising money for food insecurity, yet that was forgotten, I think, in the process of the event. So in doing all of this, I was kind of like, well, what else can I find and what else can I see? And that’s what led me to this collaborative food strategies.

William Saas: So continuing with discussion of Collaborative Food Strategies or CFS, much of your focus on them and other regional nonprofits is on their unconventional, quote unquote, “asset-based narrative approach” to community engagement and funding. And this is in contrast to what you identify as the dominant deficit narratives. And you mentioned before of course, we are interested in deficit narratives here at money on the left. And these deficit narratives are interesting or important in your work, especially as they’re promulgated by most of the contemporary nonprofits that you look at. So can you walk us through both the asset-based and deficit based narratives? The strategies, how they differ and why these differences matter?

Sonia Ivancic: Yeah, absolutely. So, um, let’s maybe start with the dominant deficit narrative. And I’m saying dominant because I think our story in our story about Appalachia, that’s what we tend to think of that what that’s what becomes dominant, right? So this narrative is circulated in media. It’s used by nonprofit organizations to earn grants. And it’s what most people outside the region think of when they hear the word Appalachia, so things like poor or lacking resources. People are described as hillbillies or lazy are that sort of a thing. And then there’s all the data to back it up. So I mentioned the poverty and food insecurity data in the state, which is often the case that nonprofits used in order to garner funding, right? 

Like, look how poor we are, look how high of food insecurity we have, we need this funding, right? So deficit narratives can, for nonprofits, produce funding, legitimacy, proof of need. So they can be very fruitful in that sense, people are moved by stories about how poor or desperate or in need a place or group of people are. And then there was this talk that I noticed when I was doing my ethnographic work of competing for most food insecurity, or poorest or, you know, they talked about this almost as a discussion of a race to the bottom, because that was a path to resources, grant money, and so forth. So one of the board members explained this as pride in the race for last place. And that showing you could do a lot with very little are showing that you had the biggest struggles kind of bolstered the case for nonprofits as they apply for funding or legitimacy. 

So one of the issues that can happen is that when the grants you’re applying for and the funding sources become attached to this negative depiction of the region, right, in order to get money, you have to then be the poorest. So how do you ever see your way out of that? This money becomes attached or dependent on this lack on the deficit. And that makes it really difficult for a community to become something otherwise. So that leads me to this asset-based perspective, which stems from questions about potential. They redefine wealth to include a myriad of assets outside of financial assets, which they don’t have a lot of, right. So they talk about strength, resilience, abundance, the wealth of the region, that is the, you know, the trees that allow them to tap for maple syrup, the mushrooms that they can forage for, the people who have, you know, long histories of knowledge about farming and gardening and canning food and things like that. So it’s different in what aspects of place it draws attention to.

 It’s not, as the executive director said, it’s not delusional. It’s a story rooted and lived experiences, it is real. But instead, it says it looks different than maybe what you’re expecting. And they leverage these communal resources, like bringing people together to highlight what the wealth is. So I think one of the interesting things about  place-based narrative labor is that it takes this asset-based approach, continuing to circulate these deficit narratives to garner short term funding, which might be good in the short term because you get a grant, but it ultimately undermines the organization’s goals, things like building community resilience, or creating a strong local equitable food system. So in order to create community resilience you need to understand what makes or can make the region abundant, durable, adaptable, right? And that means letting go or reimagining those deficits to some degree. So CFS recognized, I think, the temporality of this–you can’t depend on the deficit. 

And part of what they’re getting at is: Why would you want to, when you’re rooting your reason of being and your image of the future’s place to always having a region where people are really struggling to access food? Long term? Where does this take you? Right?

So I think one of the things I emphasize is that we’re all telling stories all the time. And that, to some degree, these stories are chosen ways of viewing the world. So neither one is necessarily right or wrong. They’re both accurate to some degree, but they do different things in the world. The deficit mirror narrative is very much over simplified. And it also struggles to create a story of where to go in the future, right? Whereas the asset-based narrative allows you to create a theory of social change. An image of who you want to be and where you want to go. It helps you see possible ways of getting there, right, because it calls for possibility and potential instead of lack deficit, what we don’t have, how poor we are, how hungry people are. So I think those are kind of the differences. And also the reasons why they choose that asset-based approach.

Scott Ferguson: Seems like there’s a connection to between, you know, your critique of the infrastructures around food scarcity, that sort of presume, a kind of endless, natural state of hunger and poverty, and this asset versus deficit approach, right? So not only does the deficit approach, kind of reify, lack and a lack of not just wealth, but dignity and validity. But then also, it seems like in the same breath, it’s in our imagination, putting these regions and these communities into this kind of state of nature that, you know, we can try to as long as there are some rich, you know, wealthy donors who might put, you know, help you out for a few months, you’re going to be okay, but then you’re going to just sink back down to this natural state that we all assume.

Sonia Ivancic: And you never want to use those resources to take yourself to a place where you’re no longer poor, because then how do you get future resources, you kind of get stuck in that. And yeah, I think that’s absolutely the case. And with a lot of these charity models, we kind of build an infrastructure around the charity, and this idea of a charity model, and it creates this very short sighted vision in which we can’t see our way out of that, you know, I think most people, if you ask them– and this has a lot to do with the ways that we talk about poverty and poor people– but if you ask most people, they don’t want aid or assistance, you know, that makes them feel ashamed. It makes them feel embarrassed. Again, like I said, it has a lot to do with the ways that we talk about aid and assistance. But so I think we we commit to these models, where we then are not envisioning a way out of them, or something more just and equitable, and something that a lot of people I think, would prefer.

Maxximilian Seijo: I think this is a nice moment to shift into perhaps more of a longer question that that I’m going to read, and that I think is trying to then make some connections between what we do on this podcast and our intersectional MMT framework and your work specifically. And so one of the reasons why we invited you two on Money on the Left to speak with us is that your theorization here of the asset and place-based narratives, right, as opposed to this deficit as in a sort of deficit of people, right? Or in the sense of people having food scarcity or a scarcity narrative for this particular region that you’re discussing is that these ways of looking at places complements and also complicates some of thinking in the MMT movement about public spending. 

So particularly with regards to urgent projects we support like the Federal Job Guarantee, and the Green New Deal. So MMT economist Pavlina Tcherneva, for example, advocates for a job guarantee that routes federal funds through nonprofits, which already have local knowledge about the needs and values of particular communities. In your writing, however, you newly sensitize us to the very different ways in which this process can be mediated. So we at Money on the Left share your conception of language and narrativity as generative rather than as neutral or descriptive. We regularly extend this assumption to the words, images, and sounds that give shape to money, understood, not as private zero sum exchange, but as constitutive and contestable public spending. Before discovering your work, we have not yet adequately considered how deficit storytelling within particular organizations and communities could undermine what are otherwise robust public spending projects. 

So granting that your case study involves organizations or communities largely abandoned by federal and state legislators, right, which is where this deficit narrative that you’re discussing, right, comes into being.This sense of scarcity and abandonment. We’d love to hear, though, alongside how your research might contribute to this then progressive fiscal program that thinks of deficits in a different way, right? public deficit spending, so an MMT, right? The public deficit is the private surplus. And so there’s, there’s this sort of balancing of deficits or where the deficit narrative exists, and we’re wondering if maybe you could just, you know, weigh in and and see what, how your research might contribute to this vision?

Sonia Ivancic: Yeah. So I think, a couple of things, one of the things I just thought of, as you were talking was this idea that, you know, we, we presume, or name or categorize something as deficit, when we could be asking maybe other different questions like, what is there? What do we have and what can we create? And then the other thing my research talks about is because of deficit storytelling we undervalue the things connected to that. So we undervalue for example, in my case, the people in places attached to Appalachia or Southeast Ohio, we undervalue urban neighborhoods that we labeled blighted, right? So in some ways, I think, we should reconsider that and think about how these places are actually full of potential, and have a lot to teach us. People love their communities. 

Oftentimes, I think I had a participant say something to the great degree of, people don’t look at your neighbor and say, “what a pathetic life you have,” you know? But the experience of living and being in a place as much different oftentimes then an outsider’s perspective of what that is or what it’s like. And so if we’re not from those places, we need to be careful coming in and telling people what to do or how to fix things, or presuming that fixing is even what needs to happen. So an asset approach might focus on harnessing highlighting, creating, or illuminating, instead, maybe. 

So I would say that these community members and nonprofit organizations and in Appalachia, and I’m sure in other places as well have a lot to teach, you know, everyone about how we navigate different symbolic and material resources. People love the region, they want to stay, but people tend to really struggle to find work that is engaging, or allows them to feel a sense of dignity or purpose or pays them a living wage. And so that was kind of a routine conversation that happened when I was there, you know, I had, and this was both for people at the organization, but also the people that they serve. So I had a participant tell me we’re not creating the right kinds of jobs. And so she talked about how you know, you could easily get a job at Dollar General or fast food, but that doesn’t pay you enough to live on. And a lot of these jobs are part time, so then you’re also don’t have really enough to live on and you don’t have benefits, right? 

So I guess ultimately, I think investing money, and jobs and resources into these different areas to kind of lift up what they’re already doing and allow them to do more, could not only benefit the people inside the region, but also the people outside of it, right, because they’re doing a lot of creative, engaging things that we have a lot to learn from. But one caveat, is just that these resources have to be permanent and reliable. And when creating these programs, I think a lot of work would have to be done to gain trust. And this has a lot to do with the context of extraction in the region that a lot of people have experienced. 

So booms and bust, promises without follow through, the government is storing fracking wastewater in a national forest there. So things like that create this distrust of like, you don’t know if you can trust people to say what they’re actually doing, or that they have good intentions, or that something will remain or be consistent there. So I’ve heard of people in a town saying no to a grant, because they weren’t sure that the source of the grant was going to give them local control over the decision making. So I think it’d be interesting to think about. You can take an asset-based approach and creating these programs and doing this, but really do it in ways that create trust and give local people voice and control over the resources.

William Saas: The tendency toward the deficit narrative is, you know, usually in service of making a compelling argument for additional resources. And I’m trying to–as we’re having these conversations, or we’re talking through these different elements of your work–I’m wondering how much of it maps on to macro, national, federal-level policy discourses. I’m thinking right now about the inverse of what we’re talking about–where a program is working well, and the deficit narrative sort of disappears, but also there’s no sort of alternate asset narrative that appears and affirms a situation. If there’s not a problem, if there’s not a deficit, if there’s not a lack, then there’s a tendency to forget about and then take for granted that that is now the equilibrium state of a community. 

And that seems to be why that perpetual deficit narrative is maybe assumed by these organizations, nonprofits and things. And I’m thinking about it in terms of national policy related to, for example, public health responses, where as long as there’s a deficit of care, we will intervene. But as soon as we feel like we’ve addressed that we will disintervene or disengage and then only intervene again, when the deficit becomes unavoidable in our daily lives and consciousnesses. So the question is, do you feel like what you’re observing on the community level is abstractable, or applicable, or if there’s an analogy with the broader national federal policies and programs?

Sonia Ivancic: Yeah, I think that’s a really good question. And I think you’re, you’re right, right, that the deficit narrative almost shines a spotlight on what we need to focus on what we need to look at or fix. And then, you know, we allocate resources and then kind of turn away and ignore, right? I think, you know, I mean, there’s a lot of ways I guess you could think about this question, but it makes me think about how a lot of our funding and our projects are very temporary, you know? You might get a grant for three years to start a local seed saving company. And then after those three years, you know, does the company go under? Do you frantically try to write more grants to see if you can sustain that? What do you do? So, it just makes me think about how, to some degree, these things need to be categorized as permanent.

Food. Is food something that you profit off of? Or is it something people have a right to, right? Is food a public good that we should all have access to? And so I don’t really have a solution to your question, but it makes me think about how we write grants and how we write policy and the things like the time limits and conditions and those sorts of things on them, instead of maybe looking at looking at something as permanently important, and really investing it in it in that sense. Because what we have is a lot of these nonprofit companies or organizations constantly putting so much work and effort into just like getting money. That’s important work. And that is a skill that people honed over many years. But to some degree, is that the best use of their time? 

You know, could they be doing a lot more if they didn’t have to worry about that as much? I think proving that what you’re doing is valuable, and that it is actually benefiting people is important. So accountability is important and good. But just think about how much time they’re putting into  just maintaining this very low base of funding, and how much more people could do if they didn’t have to be concerned with that as much.

William Saas: Could it be that we have better ways of measuring and demonstrating scarcity, and lack, and deficiency, and deficits, than we do have for accounting for and affirming abundance and plenty? 

Sonia Ivancic: Yeah, like, how do you measure possibility? You don’t have a measurement of possibility and imagination. So I think that’s a really good point. We’re very good at measuring lack. Do we have low or very low or marginal food insecurity? What are people’s incomes? And a lot of these numerical categories drive a lot of our policymaking. And I think if you were to go on the ground, and interview people and talk to them about their experiences and what they want, and what is possible, I think we could create something much more fruitful.

Scott Ferguson: So I think what I’m hearing is that there’s a temporal dimension to this deficit narrative mode that’s naturalizing, right? So we presume lack over the long term. And then try to do something about it by writing grants. But we could actually start with different narratives, not only, you know, in the communities themselves, but right in our macro political economic talk, right? We could talk about rights, we could talk about food rights. One kind of wonky term, but I think I think it works here is what we on this show, and in Heterodox Economics, we’ll talk about automatic stabilizers, right? So we have automatic stabilizers, we just don’t have enough.

We have unemployment benefits go up when there are less jobs and that happens automatically. Congress doesn’t have to have a big battle about it, unless there’s a pandemic or something like that. And it just happens, right? So we could have all kinds of ways of allocating credit that mobilizes resources to employ people or to invite people to participate in the ways they want to in their own food abundance and security. What’s neat here is you’re teaching us and opening up connections between a lot of what we think about at the level of macroeconomic talk and yeah, these local levels. 

I want to circle back to a question that we actually just skipped, but I actually like how this is unfolded. Anyway, I want to come back to this organization that you’ve given this pseudo name to: Collaborative Food Strategies. Can you talk a bit more about this organization? Who are the people who are involved? Beyond just this asset approach, what’s their background? What are their values? And then also, as you’ve mentioned, you did over a year’s worth of participant observer engaged community research as a scholar, and you know, as a PhD student, so you’re sort of of the community but also studying it. 

Sonia Ivancic: Yeah, I’m happy to talk about it. So CFS is a really small organization. And they’ve been around for over 30 years. They currently try to create community food security and resilience by investing in the food resources that people grow and produce there and by making fresh, high quality food available to people who lack access. So we can talk a little bit about the history if you’re interested in that, but they started doing different things and this is kind of where they’ve ended ended up and what they do now. So they try to foster communities where everyone has equitable access to healthy local food. I would describe their work as connecting people to food resources and networks, and to individuals with food skills to increase food knowledge and food access. 

They do all kinds of stuff, so I’ll just list some of it. They host seed giveaways, where they give seeds away for free. And you don’t have to meet some sort of metric, you just sign your name down and put your email down. And you can get free seeds, free potato seeds. They host seed swaps, where local seed savers can trade or sell their own seeds. They run a workshop series, where they ask people in the community and sometimes the executive director, or one of the people who works there, or a board member, but a lot of times it’s you know, just someone in the community will run a workshop on how to inoculate mushrooms. Or how to tap trees for sap. Or how do you plant a pollinator garden or canned food or various different kinds of things like that. They run community school gardens. 

One of their main programs is called donation station. And they have a tent at the farmers market. And then there’s a produce auction that is run by a different nonprofit in collaboration with farmers, and a lot of them are Amish farmers in the area where they auction off produce. So they set up a tent at the farmers market and the produce auction and they collect money. You can donate money, you can donate food that you’ve bought at the farmers market or auction. You can donate food or produce from your garden. So people will come and have a bunch of extra, you know, zucchinis was a thing people often have excess of have a ton of extra zucchinis. “Do you want them?” 

Then they use that money to buy food from the farmers at the market or at the auction. So how can we help people who need access, get access to fresh foods, but also how can we do that in a way that invests in the farmers and food growers and producers that are here? So then they hold a distribution once or twice a week, depending on the time of year. And we would haul out all the food. And people from local organizations, whether that be pantries, schools, people would take food back to the library sometimes. Would take it back into the county we’re in and also four or five surrounding counties. So it gets at this idea of when you’re doing food access stuff in a rural area, you really have to think about how are you bringing the food to the people who need it, rather than expecting them to travel to you. So yeah, they also ran a small seed company when I was there, which I think that project is on pause now. 

But they’re investing in the regional food system. They’re uplifting it and highlighting it and expanding on it through education and these shared resources. So their vision is to create a resilient region in which everyone in our community has access to an equitable, inclusive, and thriving food system. 

So then you asked who was involved. It’s a very small organization, there’s maybe five to eight employees depending on time of year and type of grants they have. Many of these workers are AmeriCorps volunteers, probably about half. And so AmeriCorps volunteers are federally funded and receive a very meager stipend. And I don’t know how much the executive director makes, but it’s not a lot of money. And so the woman who ran it when I did my research there, said, when she first got her offer, she was trying to negotiate her salary, and learned through the process of that negotiation that the organization barely had enough money to survive and was in dire financial circumstances. So from what I understand, she got them to a better place. But the point is that the people who are there are people who care a lot about about environmental justice, food justice, growing food and food production, community resilience. They have a lot of skills and passion, but they’re not paid very well and so they don’t tend to stay very long. Maybe a year or so after this data was collected or less, the entire organization turned over. And so I no longer personally know anyone who works there and that seems to be relatively common. And I think it’s because, you know, they’re not able to pay people to stay very long. The AmeriCorps workers are there for a year or so and then move on. The Executive Directors may be there for a few years and puts their heart and soul and all of their time into the organization, and then usually needs to move on to other things. I remember the executive director talking to me in our interview about how long she could stay viably, you know. And I think that’s a pretty kind of common and routine thing. 

So that’s who the people at the organization are what they do. You’ll have some people in the region who do these AmeriCorps jobs kind of over and over again, and maybe at different nonprofits, a lot of the people are either people who live in the region and are from there, or are students who recently graduated. So that tends to make up who works there. And then I can talk about my experience doing research, which I would say was a really amazing and special experience. I have a lot of gratitude to the individuals for welcoming me into their organization and community and just for the work that they do. 

I got into the field or into the site through a friend of mine, who knew the executive director, and we scheduled a meeting. And we kind of co-created what the relationship might look like in terms of my involvement with the organization. And I was very intent on not conducting what they call “helicopter research” where you, you know, land down and collect your data and sort of use people and then move on and don’t contribute anything back. And this is really common in the region, because there’s a university there. And then it mirrors what people have experienced with the industries and extraction. And so that’s something to be really mindful of when conducting research there. 

There was a different project I wanted to do where I wanted to interview women Appalachian artists, and once I mentioned IRB and research, the woman was not interested anymore and wouldn’t connects me to the participants. And so I think this idea of the people are vulnerable to being researched a lot, and maybe not always in respectful ways–this was something I really wanted to be thoughtful about. So we talked, I talked to the executive director, and I volunteered a lot–over 200 hours. I went to every event that I could attend, and I wrote blog posts for them about their workshops, and, you know, took photographs to go with the blog post. 

And so I ended up being able to really develop relationships with the participants. And by the time I interviewed them, one on one, I knew most of them really well. And that was hugely beneficial just for their comfort, their willingness to talk to me, you know, or willingness to share things with me or be honest, you know? And then I gave a final presentation with a few of my findings at the very end. So, you know, in the work involved, all kinds of things that we don’t typically think of as academic work, like packaging dirty potatoes and like rotten vegetables that smell really bad and beautiful vegetables like huge cabbages and going to produce auctions and farmers markets every week, giving seeds away watering gardens and things like that. So yeah, it was a fantastic experience. And I’m kind of in awe with with what they do there.

Maxximilian Seijo: I’m reflecting on where this conversation has led to, and I think there’s some interesting themes that come out for me. Particularly in the way you describe how, you know, the the employees and and who runs this nonprofit, how that structure is working. And in a temporal sense to bring it back to that. Because right, the AmeriCorps volunteers, of course, there’s your federal policy that’s been actively mediating these types of investment and this labor that’s going into addressing, even in the model, the deficit narrative, and its own terms. But shifting to the more asset-based approach, as you have said and, you know, Scott mentioned automatic stabilizers. It reminds me of this macro discourse around the business cycle, which is this idea that, there’s boom and bust, as you said, and the economy’s going well, and then it’s not. And then that’s when people need to come in and address things. And that’s when intervention needs to happen. And we keep circling back to that, but it’s interesting to think about in ways that are really austere still, but, you know, potentially, that these AmeriCorps volunteers are, you know, there’s the kernel of a model there potentially, to think about what a type of permanent investment in the assets of a community might look like. And I think this is where we highlight the Job Guarantee and the Green New Deal as policies that do install a rights based approach. That, you know, eschew the model of business cycles in favor of a sort of permanent infrastructure approach. Which I think is aligned with this asset-based approach. 

So framing where we’ve gone in this temporal sense, that feels like a really important, both, you know, critique, but also positive articulation of what could be done through what is already being done. 

Sonia Ivancic: I think that makes perfect sense as you said it, thank you.

Scott Ferguson: In your writing you mentioned it’s not all hunky dory, right? There’s the asset-based narrative approach, and then the organization that variously employs it, and tensions come up. And I’m wondering if you could tell us about some of those tensions.

Sonia Ivancic: Yeah, so I named two of these tensions, named them “food dissonance” and “concurrently contending with hardships.” So this idea of community based organizing tends to be really romanticized and glorified. And that’s really common, I think, especially with community garden type initiatives that, you know, we kind of glorify that it’s automatically good without thinking about some of the complications of it. So communication scholars talk about how organizing, especially nonprofit organizing is inherently filled with tension. Because you have to simultaneously achieve some sort of goal where you’re fulfilling a good or need, while at the same time writing for funding and arguing for funding and that sort of thing. And that one is profitable or gets you funding isn’t necessarily always in the name of achieving your mission.

So, with the food dissonance, I talked about how there’s moments of dissonance between what food the organization provided or emphasized, and the food that was kind of discursively connected to the region or of the region. So, for example, the region has a very long history of hunting and things like that. The organization used to have a mobile chicken butchery unit, which I learned about through one of my interviews. But a lot of people got the impression that the organization was encouraging vegetarianism. And basically, they were like, we feel like you’re coming in from the outside, and telling us how to eat, you know? And this happened for a number of reasons, there was a different nonprofit that didn’t do that, that sometimes people would confuse them with. 

But then other cooking demonstrations were all produce. And most of what they provide is  produce, and they don’t provide meat to people. They do do eggs and things like that, but but it just sort of raised these questions about “what does place mean, and who gets to decide?” So this concept of place itself is riddled with dilemma. Because there’s no singular meaning of place, there’s no one authentic meaning of place. On one hand, you had people saying, you know, “‘no, meat’ is in another region. And we need to, you know, that needs to be a part of our programming, because that’s something that people in this area care about.” And if we want to have a better sustainable food system, we need to think about hunting and things like that, because that’s a more sustainable way of accessing meat. And vegetarianism isn’t of the place. 

On the other hand, you had people who worked there who are from another region, and were vegetarians and vegans. And so it’s this sort of complicated thing about like, who gets to decide and who gets to make these choices about what place is, and then that’s sort of an ongoing conversation. It’s not a static finite thing, and not everyone is necessarily going to agree, but you need to grapple with those tensions. 

Another food dissonance tension was about what foods CFI or CFS offered. Because they made the choices when they were donating food about what people had access to. So questions about choice and, you know, did people feel familiar with that food or recognize it or know how to cook it and that sort of thing. They didn’t just respond to what people wanted. But the organization itself was actively participating in cultivating certain habits, or making certain things available and not others. 

And sometimes this had to do with funding sources. So it sounded really good on their grant applications, if they could say, for every $1 you donate, we buy a pound of food. And so when we were making our purchasing at the market, or the auction, thinking about weight was something we did you know, and so can we buy things that were heavier? And then can we do that to offset buying some of the other things that people really like or want to eat, that maybe aren’t as heavy or more expensive? Strawberries or peaches are expensive and not as heavy. Whereas potatoes or watermelon, or something like that was very helpful for that ratio. So there are these tensions of the organizations grappling with. And I think there is also something to be said for being able to provide more food, right, rather than if you buy all strawberries, you’re not going to be giving away very much food, nor can you subsist on strawberries. So that was one of the tensions. 

And then the other one, I called “concurrently contending with hardships.” And this just talks about that tension of you’re taking an asset-based approach while you’re simultaneously working to address local challenges. So as you notice, just in my story of the organization and of the place, there are deficits there, like that turnover. Maybe it brings in creativity but ultimately isn’t serving the organization all that much. They would be better served if the executive director and all the employees had a living wage and, and felt they could stay if they wanted to. So they have to work toward this vision of a better world while accounting for what is there, and the injustice is that are there. And so hearing stories about food insecurity, or the struggle of accessing food, or getting a job was very routine part of the work. 

It’s not that those stories weren’t there, or were silenced. But one of the things I talk about is place-based narrative labor means a willingness to dwell in these dilemmas, and to sit with them, and look for the resources to transform the circumstances. So can you celebrate while grappling. People talk talk a lot about toxic positivity right now, you know? Or tyrannies of cheerfulness, where in this case, positive place-based talk is the only thing acceptable and that basically, I just want to say that’s not what was happening. 

But they’re trying to expand what’s possible and complicate that deficit narrative. They’re trying not to define the people in the region by the bad things. So they have to be contextualized in the history of the region and how people are actually already they’re organizing to solve the problems. They’re not just sitting around going, “there’s not enough food, and there’s no jobs.” And so I guess that’s sort of the main main challenges I saw or tensions that I saw within doing this work.

William Saas: In some of your other work, you think critically about the Org Comm issues surrounding sexual harassment. Maybe by way of rounding out our interview, could you sketch out some of of these claims and that work? And then maybe tell us whether you see in your own work connections between the sort of place-based narrative labor and organizational communication and sexual harassment issues?

Sonia Ivancic: Yeah, absolutely. So I think I said at the beginning that a question that kind of guides my research is how do our actions and ways of communicating, hinder or open up possibilities for positive social change? So the sexual harassment project I conducted with a colleague was asking sort of what happens when someone talks about their sexual harassment? So they tell a co-worker, they report it formally. You know, what happens to their personal experience at work? And how do people respond to that? And so one of the things we found is that voicing your harassment to the organization tends to have a negative impact on the people who who were harassed. 

So a lot of times, you know, you need to just tell someone or report. Report it is a thing you often hear all the time. But reporting your harassment actually tended to make people feel less resilient at work, or able to be less resilient at work. And so their resilience decreases when they formally report their harassment. And this is more likely, as we might expect to occur in organizations that are perceived by them as tolerant of sexual harassment. So that’s some of the work that we’ve done around these questions of resilience, and, you know, does is the organizational culture tolerant or hostile to harassment occurring? And then we have a paper that’s currently under review. So it’s unpublished, and I won’t talk too much about it, but it’s about how organizations support or harm targets or witnesses of sexual harassment. So we focus on how discourses tend to form around the target that are negative and harmful for them. About who they are as a person. 

And that support for them, is very unreliable, and paradoxical. But that some people do get a little bit of support, and a few people are able to create these collective networks of support as resistance to the organization. So kind of what we’re arguing is that organizations tend to create the conditions for harassment to occur or thrive. And then perpetuate this with low accountability, low transparency, wanting to avoid the issue or brush it under the rug. I would say that targets of harassment tend to get the impression that the perpetrator is somehow impervious, or outside of accountability. For various reasons, you know? They’re well liked, they are the CEO, they’re their manager. And then the organization often kind of response to the situation in that way. That it’s impossible to hold the person accountable. 

So I guess collectively, these articles sort of advanced recommendations for how we can better support people who are harassed with the hope of creating cultures that are less tolerant to harassment occurring. They complicate narratives that speaking up or reporting your harassment will automatically lead to justice, because often that’s not what happens. The process tends to be pretty unpleasant for people. So speaking up is not necessarily or reporting… it’s not necessarily what’s best for people who are harassed. So I think I mentioned, this is a project I’ve been doing with my colleague, Dr. Jessica Ford, and we’re starting a second sort of project on this that kind of asks the question of, well, now what? Now, what do we want to do about this? Are there any examples where people have felt this has been done well or you know, and how do we sort of think about it in that way? So I guess this project sort of connects back to my central research program, about how organizational strategies perpetuate inequity, or disrupt it. And it centers the experience of people who have been targets of harassment or we also talk about witnesses, because that’s something that’s not discussed a lot. 

So when you’re asked about themes connecting themes between this and my other work. You know, I think how we talk matters, how we label a place or an action, or a person impacts how we respond to them. And whether it impacts whether we can create spaces that are safe, just, equitable, or whether we sort of continue to perpetuate current issues. And also how we mobilize material resources like food and money, harassment policies, that those matter. They have real impacts on people. These material objects and places are also always communicative and symbolic. So what messages are we sending, you know, not just with words, but through objects as well. So policies are a good example. I brought up the example at the very beginning about the long table, communicating community and inclusion when the event kind of did the opposite. So if you’re giving away free food, what’s the quality of the food and what does that communicate to people? So guess those are sort of some overarching connections.

Scott Ferguson: That’s great. Well, Sonia, thanks so much for joining us on Money on the Left. It’s been so wonderful to speak with you about your work. Thanks so much for coming.

Sonia Ivancic: Thanks for having me. I really enjoyed talking to you.

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

Superstructure 32 – Know Your Allies

Cohosts Will Beaman (@agoingaccount), Natalie Tabb Smith (@orangeasm) and Maxximilian Seijo (@maxseijo) are back to reflect on some of the many things that have happened since their last episode. Mentioning Elon Musk’s tentative Twitter purchase, Russia’s invasion of Ukraine, Florida Governor Ron DeSantis’s feud with Disney, and escalating political attacks against LGBT educators and children, the cohosts reflect on how the US Left should account for its capacity in this new moment. Critiquing a recent NYMag article by Sam Adler-Bell from the Know Your Enemy podcast for its uncritical deference to right wing premises, the Superstructure cohosts suggests that the Left’s capacity is hiding in plain sight, on the front lines of the very infrastructures that the far right is contesting. To write off social media, the entertainment industry and critical pedagogy as non-political and nonstrategic is to abandon some of the most vulnerable people in our society.

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

Modern Movie Theory: Old Enough!

In this installment of the Modern Movie Theory series, Scott Ferguson explores how a complex aesthetics of omniscience raises important questions about dependence, care, and responsibility in the Netflix show Old Enough!. Recently repackaged by Netflix for streaming audiences across 190 countries, Old Enough! is, in fact, a long-running Japanese reality show titled, “My First Errand,” which began airing on television in Japan during the 1990’s. Each 10 – 15 -minute episode of the series follows the triumphs and tribulations of a small child (and occasionally two), as they venture out for the first time to complete a series of routine tasks without parental chaperones. A flurry of commentary about the show in Western media has worried about televisual claims to realism; the ethics of sending toddlers out into the world; the politics of cultural differences lost in translation; and the dangers of inadequate urban and suburban infrastructure. Shifting our attention to the abstract moving image forms that shape Old Enough!, Scott by contrast teases out how the series routes the collective pleasures, anxieties and responsibilities involved in creating mobile personhood through a subtle aesthetics of omnipresence, which dominant blockbusters and video games repress, and film and media theorists tend to jettison. Irreducible to all-controlling surveillance or to individual embodied action, this omniscient televisuality harbors important lessons about money, mediation, and coordination that we cannot afford to overlook.

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On the political force of MMT

From a non-sovereign perspective

By Andris Šuvajevs
A couple of days ago, the British economics commentator, Grace Blakeley, called people who advocate Modern Monetary Theory “naïve.” This was following a public radio appearance earlier that same day, in which she described tax breaks for the wealthy as taking money directly from those who claim public benefits. An MMT perspective objects to this line of argumentation since the actual or technical monetary process does not at all operate the way Blakeley describes it. Since what MMT calls a monetary sovereign, such as the UK, can issue currency without borrowing (or taxing the rich more), MMT proposes a policy that simply says ‘let’s provide more income to the poor’. The outcome is the same as in Blakeley’s approach, but the journey is different – MMT proposes to get rid of the conditionality that inheres in a policy position which rests on ‘let’s tax the rich in order to fund the poor.’ Importantly, MMT advocates tend to be wholeheartedly in favor of taxing immoral and abnormal levels of wealth – they just treat it as a separate policy issue.

It strikes me as surprising that people on the left become so heated and genuinely insulting toward each other in discussions regarding fiscal policy. There is often bad faith on both sides. Blakeley calling MMTers naïve is patronizing and quite simply arrogant, discarding the scholarship of many truly admirable thinkers. However, I often find that some MMTers are equally hostile when trying to make the point that taxes do not fund the government. Blakeley is obviously making a rhetorical rather than an academic point. She might (perhaps) agree with the technical analysis of the British monetary system that MMT provides, but her interest lies in formulating effective political arguments that resonate in British society. Thus, much of the online bickering between the British (Corbynist) Left and the global MMT crowd is often pointless as both sides speak on different conceptual levels.

Nevertheless, there is a conceptual disagreement between people who generally believe that public spending is in some way dependent on private savings and people who see it exactly the other way around. This disagreement concerns the issue of power. There is a reason why Blakeley disparages MMTers as naïve – her perspective is that MMT has no idea how the political world operates and that MMT is nothing more than a technical description of the monetary system. It is precisely on this point, however, that Blakeley—and the part of the British Left that she represents—demonstrates their worst short-sightedness and bad faith.

Namely, it cannot imagine a world where the metaphysics of trade-offs is not the basic principle of politics. I am all in favor of making effective political arguments that are not necessarily based on MMT, but arguments such as the one Blakeley is making are indicative of a fundamental world-view based on scarcity and zero-sum relations that unwittingly reinforce the very logics it supposedly tries to overcome.

In a way, MMT has a more advanced theory of power than contemporary British Marxists in breaking with the normative vision of societies that are discursively structured in classes and other forms of hierarchy. The British Left immediately (and in bad faith) accuses MMT of denying that classes or hierarchies exist. MMT, on the other hand, sees such blanket disavowals of monetary authority as entrenching structures of inequality. The worldview of the British Left is structured as a struggle. The MMT worldview tries to re-define the meaning of the struggle itself.

I suspect that one reason the British Left is explicitly antagonizing in its rhetoric has to do with it being continuously sidelined from power for the last, I don’t even know how many decades. The British ruling classes have been so overwhelming in their political victories that the British Left probably thinks it cannot afford to spend time on redesigning its conceptual toolkit. Admittedly, it is not easy to make public policy based on rather abstract ideas of power such as the one MMT professes.  However, it has been my own professional experience that political arguments based on MMT can be incredibly empowering. I live in Latvia and this is a country that has adopted the euro and thus has no “monetary sovereignty” as it is commonly defined. Latvia has no formal influence over the interest rate, bond-buying programs and whatever else the ECB is doing. It is a country for whom “MMT does not apply” as critics often suggest. In reality, MMT is the only way forward if Latvia is to achieve any meaningful socio-economic development.

Let me give you some examples of the political utility of MMT. To begin with, the neoliberal doctrine of the financially impotent state whose capability is dependent on the entrepreneurship of the private sector has been a central feature of the post-soviet macroeconomic consensus. It is useful to remember that MMT itself emerges in conditions where political arguments on both sides of the debate assume that the state is a secondary institution in the force-field of capitalism and the fundamental scarcity of money is a fact of life. It is precisely this assumption which enables financialization and privatization of social life and public goods – MMT emerges to challenge that, providing nuanced analyses of the monetary system which then form the basis for the political arguments against the privatization of the state. It is quite remarkable that the British Left fails to acknowledge this making one wonder who actually is naïve here.

In Latvia, as in other Eastern European, post-socialist countries this consensus has imposed heavy social costs. Since the restoration of independence in 1991, the country has lost nearly a quarter of its population and the decreasing population rate is projected to continue well into the next decades. The only public policy response has been nationalist-conservative exhortations about women needing to give more births and moral panics regarding same-sex partnerships. The lack of public policy is rooted in fear that surrounds any economic projects undertaken or supported by the state. The yearly reduction of debt-to-GDP ratio is de facto state policy even in conditions where Latvia enjoys a relatively small debt-to-GDP ratio. Even if Latvia can ‘afford’ to spend more, it will not do so if it increases debt by a few percentage points in the subsequent fiscal year. Meaningful public investment in social infrastructure that includes the wages, salaries or stipends of teachers, students, social workers, etc. is effectively unthinkable. The median wage in society at large after tax is 749 EUR. Latvia’s integration into the global market immediately turned it into a peripheral country that supplies low-to-medium value goods and services, and regularly posts a trade deficit. The austerity of the last decade has decimated its long-term prospects as the absence of social and industrial policy has meant the gradual evaporation of doctors and teachers alongside a discombobulated private sector that is left to its own devices without support or strategic guidance.

It is within this sorry mix of affairs that MMT provides a powerful political alternative. MMT helps articulate the view that public debt is a form of investment and thus does not have to be feared at all. MMTers often criticize the Eurozone for its harsh and nonsensical fiscal framework which countries like Latvia currently fully embrace. Yet, almost paradoxically, Latvia could enjoy more freedom of action if there was the political will to use the financial security afforded by the eurozone to small open economies. Latvia could invest in its social infrastructure without having to rely on its export earnings and without having to impose a heavier tax on its (very small) well-earning segment of the population. Latvia could create financial institutions like a state development bank with the mandate to provide credit to specific industries that carry out the objectives of the green transition if there was a will to do that.

Without an understanding of MMT, these policies are politically impossible. If public investment (in which I include salaries, stipends, and pensions) is made conditional upon tax hikes on the well-off, you may as well just fold and retire. Furthermore, MMT helps to advance the public discussion by suggesting a focus on available resources rather than ‘available money’ – if the gap between necessary and available teachers is recognised as a problem, policy has to be focused on bridging this gap rather than reducing public debt despite everything else collapsing.

At this point, the conventional arguments pop up – ‘Well, what about the interest rate?’, ‘What happens when the debt grows and the servicing costs increase? Won’t we have to sell our national assets to pay it off?’ These are legitimate concerns in a country whose politicians willingly sold its soul to the IMF in 2008. It is precisely because Latvia does not politicize its own monetary agency and reliance on financial markets that these arguments carry the weight that they do. Nevertheless, without MMT one cannot properly address them. It is MMT that points out that the interest rate set by the central banks (the ECB in this case) is a policy, not a market rate. It is this fact which lets one argue that increased debt will not be a burden on future generations because the interest rate set by the financial markets depends on the ECB – and if ECB increases rates in a recessionary environment, well that’s just stupid policy, isn’t it? Whereas if rates increase in a pro growth environment – well, then there’s no problems servicing the debt, is there? Even in the Eurozone there’s room for political decisions and pressures around the ‘super-independent’ ECB as the debates surrounding current inflation demonstrate.

So it can be seen why MMT is politically helpful in such an economic environment. If one can demonstrate to the public that spending can be carried out without extra taxation, and it will likely increase the overall productive capacity of society, they can begin to imagine a new economic model that is otherwise inaccessible. MMT provides the theoretical tools to infuse the public sector with a positive meaning emphasizing the ways it complements rather than contradicts the private sector.

However, an Eastern European setting comes with its own challenges. The society simply does not believe that public debt can be harnessed for good and it sees public money as dangerous and not particularly democratic. The experience of the 1990s and the corruption and theft of state resources has made many of us intuitively suspicious of large (or any) state projects. If direct public spending is proposed, the first thought for many will be that some well-connected individuals are about to be generously enriched.

This is probably where many on the mainstream British Left will triumphantly exclaim “I told you so,” reminding us that it is insufficient to simply ‘learn economics.’ In that sense they are right, and MMTers certainly should be cautious about appearing too arrogant themselves by reducing politics to their academic truths. Public debt and spending is inevitably going to be realized through and alongside the existing structures and hierarchies of society even as it, hopefully, tries to change them. Repeating the mantra that ‘the state cannot go bankrupt,’ even practically in the eurozone, will not get you very far. People have legitimate historical concerns and thus there is still work to do in developing MMT’s insights into an effective political rhetoric.

To briefly conclude, my hope in writing this is centered on the possibility that there will be less quarreling among people who are in broad agreement about their political goals. If more MMTers and non-MMT Marxists inject some good faith in their positions and arguments, that’s a chance for both to practice what they preach. Just because struggle is constitutive of politics does not mean that everything has to be seen as a refraction of one struggle. And just because one is technically correct about something does not mean they are correct in their political rhetoric, dependent as it is on their respective societies. 

The Visual Cliff: Eleanor Gibson & the Origins of Affordance

By Erica Robles Anderson & Scott Ferguson

Originally presented at Hidden Histories: Gender in Design, Design History Society Seminar, April 14, 2022.

Part I: TED Talks and Teapots

In a 2003 TED Talk titled “Three Ways Design Makes You Happy,” Donald Norman announced that “The new me is beauty.” Norman – a professor, design firm principal, and the first Vice President of User Experience at Apple – ranks among the most influential figures in the field of user experience design. Yet above all, he is associated with the concept of “affordance,” an invented term now widely employed to refer to the forms and features of any useful thing.

Norman brokered the term from psychology to design in his 1988 book The Psychology of Everyday Things. Citing J.J. Gibson’s 1979 book The Ecological Theory of Perception as his source, he offered this definition: “The affordances of the environment are what it offers the animal, what it provides or furnishes.” In the 1980s and 1990s, the medium of computing was taking form as a mass “personal” technology. Norman was part of a movement to constrain the material and semantic scope of personal computing through psychological principles of use.

The book cover of "The Psychology of Everyday Things" depicts a tea pot with a handle that is directly underneath the spout.
Donald Norman popularized the term “affordance” in his 1988 book The Psychology of Everyday Things, later re-titled The Design of Everyday Things. Norman’s original title self-consciously references the quotidian neuroses Sigmund Freund famously analyzed in The Psychopathology of Everyday Life. Norman’s book nods even more directly to Freud in the opening chapter “The Psychopathology of Everyday Things” linking daily experiences of frustration to the need for a new psychology of materials. Unlike the psychoanalyst who might help explore repressed desires and unconscious motivations, the designers’ task is to ease frustrations by generating immediate understanding.

A decade later, at the turn of a new millennium, in the aftershock of the Tech Bubble burst, Norman was now thinking about what feelings afford. He dramatized his thought process on stage:

“I really have the feeling that pleasant things work better, and that never made any sense to me until I finally figured out — look … I’m going to put a plank on the ground. So, imagine I have a plank about two feet wide and thirty feet long and I’m going to walk on it, and you see I can walk on it without looking, I can go back and forth and I can jump up and down. No problem. Now I’m going to put the plank three hundred feet in the air — and I’m not going to go near it, thank you. Intense fear paralyzes you. It actually affects the way the brain works.

That’s what fear and anxiety does; it causes you to be — what’s called depth-first processing — to focus, not be distracted. And I couldn’t force myself across that. Now some people can — circus workers, steelworkers. But it really changes the way you think.”

Donald Norman on-stage delivering a talk.
Donald Norman, “Three Ways Design Makes You Happy,” TED, 2003.

The pleasure of well-designed things has something to do with anxiety. In 2003, unease would have been a salient emotion. The United States was waging a so-called “War on Terror” and the national economy was just pulling out of a recession. A plank across an abyss affording safe passage to the skillful and the daring could be an allegory for neoliberal precarity. But Norman’s demonstration also surfaced a different moment and a history underlying affordance that seems, at first glance, to have very little to do with computing or design: Dr. Eleanor Gibson’s visual cliff

To the best of our knowledge, there are no citations of Eleanor Gibson’s work in design literature. We correct that omission. Eleanor played a foundational role in developing a paradigm that came to shape how we perceive aesthetic, technological, and political-economic possibilities.

We are currently writing a media history of affordance. The first sustained cultural analysis of the concept, we account for the term’s diffusion through networks of social scientists, designers, and technologists during a period marked by discourses about market growth and government constraint. We fundamentally reject zero-sum metaphysics. Our engagement with this history is an effort to revisit late-twentieth-century aesthetics in order to enlarge their critical possibilities toward more capacious ends.

Our analysis of Eleanor Gibson rejects additive models of gender history, with their fatal deferrals to “someday”, or “also”,  or “her or they too.” These logics reproduce inclusion as perpetual supplementarity and thus configure the project of history as an asymptotic climb toward completeness. Gibson’s visual cliff was always already a story of affordance. Our task is to critically interpret its world-shifting Gestalt.

The cover of Eleanor Gibson's memoir depicts the horizon. An overlay of lines converge toward a vanishing point.
Eleanor Gibson, Perceiving the Affordances: A Portrait of Two Psychologists (Routledge, 2002).

Part II: Baby on the Brink

In April 1960 Eleanor Gibson and Richard Walk astonished Scientific American readers with photographs featuring a baby boy crawling atop a sheet of glass laid across a checkerboard platform. On one side there appeared to be a drop-off of a few inches. The other seemed to give way to a small chasm several feet below. Although perfectly safe, the juxtaposition of opacity and transparency created the impression of a precipice, as vividly portrayed in filmed recordings of the experiments. The visual cliff staged the problem of affordance, although it was not yet named as such. Images of mothers beckoning infants to traverse the makeshift gorge entered popular culture through New York Times and Life features. They have been canonized in psychology textbooks for more than half a century. We are bringing babies back in order to think about what affordance affords.

The Cover of Scientific American shows a kitten staring over a precipice.
The “Visual Cliff” was the cover image for the April 1960 issue of Scientific American. Babies of all kinds – human, kitten, goat, rat, lamb, puppy – were placed on the apparatus.
Four images of babies on a visual cliff are depicted. In some, the mother can be seen encouraging the child.
Eleanor Gibson & Richard Walk, “The Visual Cliff,” Scientific American, April 1960.

Eleanor and J.J. met at women-only Smith College during the Great Depression. She was a student, he was an Assistant Professor. She completed her undergraduate and master’s degrees in psychology, before finishing a Ph.D. at Yale in 1938. The Gibsons spent decades at Cornell University where J.J. was a professor, but nepotism rules prohibited Eleanor from eligibility as a faculty hire. She worked as a contingent scholar, with no lab of her own nor license to apply for grants as a Principal Investigator. When J.J. retired, Eleanor became the first developmental psychologist in the Department of Psychology as well as Cornell University’s first female endowed chair. She was inducted into the American Academy of Arts and Sciences in 1977 and she received a National Medal of Science in 1992, which is the highest scientific honor in the United States. 

If mid-century psychologists were preoccupied with social attachments, stimulus responses, and mental associations, the Gibsons, together, developed a paradigm they called perceptual ecology and the visual cliff was a crucial experimental foundation. By isolating the child from its mother, they established an ontogenetic basis for “independent locomotion” and “discrimination of depth” untethered from the psychosexual dramas and ambivalent interiorities that riddled midcentury white middle-class prosperity. As unnerving as they are exciting, photographs of babies on the brink raise the question: What does the infant see? In the experiment, almost every toddler refused to venture over the cliff. For Gibson and Walk, this not only proved the babies’ perceptual fitness, but also established that mobile depth perception is a direct ecological “endowment,” not a matter of habits, associations, or institutions. 

Newspaper clipping depicting Dr. Eleanor Gibson, President George H.W. Bush, and Dr. Allan Bromley at the White House.
“Eleanor Gibson receives the U.S. National Medal of Science in 1992,” by Roger Segelken in Cornell Chronicle.
Scientific diagrams explain the visual depth cues in the apparatus designed as a "visual cliff."
First- and third-person views of the visual cliff featured in Eleanor Gibson & Richard Walk, “The Visual Cliff,” Scientific American, April 1960.


Cybernetics has long been narrated as the paradigm that shaped human-computer interactions. Perceptual ecology reveals another path, equally foundational but ontologically distinct. Perceptual ecology is not concerned with signals, feedback loops, or uncertainty. It theorizes a sensory-rich, ever-changing world inhabited by animate perceivers. The terrain is a substance. The ground is a surface primordially differentiated from the sky at the horizon. The atmosphere is an immersive, boundless medium. Animate perceivers do not receive bits of information through discrete channels. Instead, they register the constant flux of light on surface as an “ambient optical array.” Persistent sensory information is called “invariance” and it corresponds to the “solid angles” in a shifting world.

A line drawing of a landing field is shown. Arrows indicate multiple perspectival directions of view, which vanish at the horizon and at the point of aim.
Diagram demonstrating the underlying invariant structure of the optic array from James J. Gibson, The Ecological Approach to Visual Perception (Psychology Press, 1979).

Perceptual ecology, like other paradigms that shaped human-computer interaction, addressed the predicament of the soldier moving through the world in machines. During World War II, Eleanor took leave from teaching and research to raise children and J.J. led a U.S. Army Air Forces Aviation Psychology Program called the Psychological Test Film Unit. The Unit jettisoned the instrumentation of cockpits and radar screens to make motion pictures. The animated mobile point-of-view shots we associate with first-person shooter games and virtual reality experiences were developed to train pilots and to build a psychological theory of being-in-the-world that is perceptual and ecological at once. In 1947, J.J. wrote that “All spaces in which we can live include at least one surface, the ground or terrain. If there were no surface, there would be no visual world, strictly speaking.”

A gunner door on an aircraft is open and a plane flying nearby, likely a target, can be seen.
Point of view shot from Position Firing, an animated U.S. Air Force training film directed by an un-credited John Hubley and featuring waist gunner “Trigger Joe” voiced by Mel Blanc. The film was developed to teach gunners the basics of how to hit attacking fighters from bombers like the B-17 & B-24. Position Firing is one of many test and training films discussed in James J. Gibson’s previously classified text, Motion Picture Testing and Research, Report No. 7 (1947), written under the auspices of the U.S. Army’s Psychological Test Film Unit after the Second World War.
A room is drawn as if receding from inside the head of the observer. The nose appears close up, the feet appear further back, then the boundaries of the room, then the view out the window, all the way to the horizon.
The cockpit perspective comes home. The first-person view of the wartime pilot is transmuted into a mid-century view from a living room lounge chair. CIT The Ecological Approach to Visual Perception.
Two renderings of a house are juxtaposed. In the first every edge of the shapes composing the structure can be seen. In the second, only the edges that would be visible to an observer are in view.

Perspective views of solid objects modeled by Lawrence G. Roberts. Throughout the 1960s, Roberts drew extensively from J.J. Gibson’s Perception of the Visual World (1950) to formulate a highly influential theory of computer vision focused on surfaces, edges, and lines. The pictures above were featured in Ivan E. Sutherland, “Computer Inputs and Outputs,” Scientific American 215, no. 3 (September 1966). For a media archaeology of this image in computer graphics see Jacob Gaboury, Image Objects: An Archaeology of Computer Graphics. (MIT Press, 2021).
A hand reaches out, as if attached to the player, to punch an avatar on screen.
First-person combat view from Superhot VR, a virtual reality game designed for Oculus’s Quest & Quest 2 headsets.

The visual cliff brought surfaces and animate perceivers into the lab in order to prove that discrimination is a psychological, rather than merely a physiological, problem. Babies of all kinds – human, kitten, goat, rat, lamb, puppy – were placed on the apparatus to the same effect. Surfaces are meaningful in terms of an organisms’ proprioceptive sensory capacities within an ecological niche. Their perceptual thresholds act as optical footholds or levers for immediate responsive action: edge detection. Affordance names the frame-of-reference as organism-environment relationality. 

Donald Norman’s version of “affordance” channeled perceptual ecology into design. Norman explains, “Affordances provide strong clues to the operations of things. Plates are for pushing. Knobs are for turning…when affordances are taken advantage of, the user knows what to do just by looking: no picture, label, or instruction is required” (Norman, 1988, 9). “Good design,” he argued, “leads to immediate understanding” (Norman, 1988, 23). 

Good, here, means ease, not True or Beautiful. Norman’s “natural design” breaks with Beaux-Arts, Bauhaus, and Arts and Crafts traditions. The aesthetic of “immediate understanding” took hold through the language of “user experience.” In the moment when graphical conventions were being developed, affordances constrained interface functions and forms. Affordance diffused through training programs, professional organizations, and publications. It circulated through engineering, social science, business and marketing, the arts, and the humanities. In the process, terrestrial surfaces became digital media ecologies and affordance became a term for technology, writ large.

A hand pushes upward on a seat adjustment lever attached to the side of a car door.
“Seat Adjustment Control from a Mercedes-Benz Automobile” An example of “good design” as constraint mapping, from Donald Norman’s The Design of Everyday Things (Doubleday, 1989)
A small desktop computer with a portrait of a child's face on-screen is placed on a floating white background.
Macintosh Color Classic, an all-in-one Macintosh with color display targeted at educational institutions was released the year Donald Norman joined Apple as Vice President of User Experience.

At first glance, affordance seems to be a popularized social science term. It is capaciously relational, perhaps almost to the point of banality. Upon critical reflection, however, one begins to perceive how affordance-thinking contracts the view. When ‘what you see is what you get’, social difference, intermediaries, and ethical disturbances disappear from the schema of the given.

If these politics often evade notice, perhaps it has something to do with how elegantly affordance nominalizes the verb to afford. By focusing on “the complementarity of the animal and the environment” it omits political economy, by design. To afford is to provision, to bear the expense of accomplishing something. The Gibsonian neologism replaces the political-economic provocation ‘What is to be done?,” with the perceptual ecological question, ‘What is immediately given?’

Direct experience is a rather narrow and ambivalent mode of ease. It relies upon mediations and hidden labors that must go unseen. A gender history that adds specific figures to the canon can never go far enough. There is trouble with a model that takes what is seen as the limit of what can be given. If we are to reckon with affordance we need to promote the concept to the status of a metaphysical reckoning with being-in-the-world. Like I-Thou relations, a phenomenology for Dasein, a biosemiotic Umwelt, Kantianism, or Cartesianism, there is a big move underway on the visual cliff. But there is also a sensational melodrama of eyeballs on the brink, which Norman’s turn to emotional design brings to the surface.

By queering and expanding the term we could embrace perceptual ecology as political economy as design. We can openly declare that society is not condemned to forever teeter on the cliff, whether narrative, fiscal, or metaphysical. There are many worlds that we can, in fact, afford.

About the Authors

Erica Robles Anderson is a professor of media, culture, and communication at New York University. She is a cultural historian of network society interested in architecture, technology, and religion, as forms of collective life. She is a founding member of the OIKOS working group on kinship and economy, and the Editor of Public Culture.

Scott Ferguson is a professor of film and media in the Department of Humanities and Cultural Studies at the University of South Florida, editor for the Money on the Left Editorial Collective, and research scholar at the Global Institute for Sustainable Prosperity. His research focuses on money, media and aesthetics in Western modernity.

Economics as Discourse

Andrés Bernal and Natalie T. Smith critique the recent mainstream econ Twitter shaming of MMT, while vibing on left heterodox anti-racist & feminist economics. The conversation then turns toward Latin American politics and Andrés’ latest paper on inflation for the Global Institute for Sustainable Prosperity.

Read Andrés paper here:

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

Weimar Futurities with Engelbert Stockhammer

Engelbert Stockhammer joins Money on the Left to discuss the political and economic debates that shaped and ultimately devastated Weimar-era Germany. Professor Stockhammer is professor of political economy in the department of European and International Studies at King’s College London and has published widely on financial instability and Post-Keynesian economics. In this episode, we focus specifically on Stockhammer’s recent working paper, “Hilferding, Woytinsky, and the Fiscal Orthodoxy of Interwar Social Democracy,” published by the Post-Keynesian Economics Society in Fall 2021. 

In the essay, Stockhammer reconsiders the so-called “WTB Plan,” a union-backed public works program, which was tragically rejected by the Social Democratic Party (or “SPD”) on seemingly Marxist grounds. During our conversation, we explore the biographies and arguments of two key players in this historical drama: Vladmir Woytinksy, the Russian-born socialist economist responsible for drafting the WTB plan and Rudolf Hilferding, the Austrian-Marxist theorist and politician who turned the SPD against it. Along the way, we consider the stakes and fate of Weimar-era fiscal politics in light of a hegemonic gold standard that ruled across Europe and the United States, growing unemployment and suffering, and the German fascist movement that rose to answer such problems in violent and genocidal ways. Finally, we ponder how unrealized Weimar futurities in the past can help inform the struggle for public full employment today.

Read Stockhammer’s paper here:

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Music by Nahneen Kula:


The following was transcribed by Richard Farrell and has been lightly edited for clarity.

William Saas: Engelbert Stockhammer, welcome to Money on the Left.

Engelbert Stockhammer: Thanks for having me.

William Saas: It is a pleasure to have you. Could you start by telling our audience just a bit about your personal and professional background and how they inform your research and pedagogy? For example, you describe your approach as Post-Keynesian and your work as primarily interested in financialization and financial instability. Could you tell us about your background and how those terms come together for you in your work?

Engelbert Stockhammer: Yeah, I’ll tell you a story that hopefully leads to the Woytinsky paper that we’ll be discussing today. So when I say Post-Keynesianism, I mean critical heterodox macroeconomics and the tension between Keynes and Marxist ideas. It’s about, on the one hand, class struggle, on the other hand, effective demand and involuntary unemployment, but also financial dynamics, financial instability, and how you bring those together. So I’m originally from Linz, which is a medium, for Austrian standards, industrial but provincial town. The only historical significance of Linz is that, in 1934, the anti-Fascist workers uprising in Austria started in Linz. So it is a town with a certain leftist tradition. I should say the workers uprising was heroic. It was the only armed nationwide uprising in Europe against fascism other than in Spain. But different from Spain, our uprising lasted about three days until it was squashed. So while it was heroic, it was everything but successful. But it’s sort of an indication of the radicalism and the backbone of the Austrian labor movement in the interwar years. Indeed, it is in part fueled by Austro-Marxism, which we’ll talk a little bit about later.

So I’m coming from an intellectual family. My parents, essentially, were part of the 1968 generation. I grew up in a left environment, went to an antiauthoritarian kindergarten, and went to university in Vienna. By that time, I was already exposed to Marxist ideas, the Frankfurt School, and what leftist students in the 70s would read. And I would have regarded myself on the radical left. I studied philosophy and economics–economics on the encouragement of my parents that I should also study something useful. But I soon turned away from philosophy because I realized that when they say philosophy, they actually don’t mean Sartre and the Frankfurt School and Marx, but they want me to read Kant and Thomas Aquinas, and I have no patience for this. So I got into economics, but learned more about economics from the political science and history classes. At that time, universities were less commercialized. We were free to take classes from whatever the university offered. And politically, I was actually closer to the Greens, which were growing more radical in the 80s in Germany, Austria, and India. I was involved in student politics in the student unions and so on.

I went to the US to do my PhD. I went to the University of Massachusetts at Amherst, which is one of the strongholds of non-mainstream economics. In that way, they’re essentially for modern types of Marxism. In particular, that means that, at the time, we were excited about French regulation theory and social structures of accumulation, both of which don’t feature very prominently today, unjustly, I think. So when I got to UMass, it had this big internal divide between the postmodern Marxists or post-structuralist Marxists that were Reznick and Wolff, on the one hand, and on the other hand, there was Gintis and Bowles who you might think of either in the tradition of analytical Marxism or rational choice theories, game theory of social conflict, and all sorts of things, all of which was interesting, but it was not what I was coming for. It was not social structures of accumulation, that mixture of taking Marx’s ideas and embedding it in a historical institutional analysis, but using modern statistical and modeling techniques I didn’t quite find interesting because Bowles and Gintis were too much into micro for my taste.

So it’s under these circumstances that somewhat unwillingly I started to become a Post-Keynesian. At that time, I had this premise of what do I do for a dissertation. I was struggling with how to sort of reconcile my ambitions with feasible academic projects. At that time, I had a student subscription to The Economist. So you got the weekly propaganda organ of international capital. And they told me that the real problem of Europe are inflexible labor markets and eurosclerosis. That was the big issue. And the US was great because it has these flexible markets. And in case I didn’t get it, there was writing on the title page and in their headers that told me that the real problem of Europe was the inflexible labor markets.

Scott Ferguson: What year was this?

Engelbert Stockhammer: We’re talking mid to late 1990s. So at some point, I realized they are actually saying there’s a dissertation topic for you here. Let’s take the current mainstream theories of European unemployment. And that was the NAIRU theory, or the non-accelerating inflation rate of unemployment. It was sort of the theoretical underpinning of the whole discourse. And in my view, it was clear they were going after European welfare states in order to break them up. So to me that was part of a neoliberal agenda. And when I talked about these ideas, my Marxist friends told me, “Yeah, it’s a good idea to write about unemployment.” And you have to make clear that unemployment is a systemic feature. In capitalism, it’s unavoidable. And then, depending on how economically oriented they are, you need the industrial reserve army to maintain a certain profit rate for them. I thought that’s crazy. I mean, these guys are going after the welfare state and offering the analysis that unemployment is unavoidable. It’s not unavoidable. Sweden and Austria, which had relatively good welfare states at the time, had lower unemployment rates than the rest. So apparently, you can manipulate it.

In that sense, I became a Post-Keynesian, because the Keynesian framework with effective demand had a specific story about unemployment and testable predictions. I was interested in what Post-Keynesians call conflict theory of inflation, that inflation is the outcome of ultimately unresolved distributional struggles. Initially, it actually was partly developed by Marxists, in particular, by Rowthorn and also by later American structuralists. But it’s one of these heterodox economic theories that you can also use for empirical work. So that was my entry point into this. That is how I drifted towards the Post-Keynesians. And the second entry point also in that story is that effective demand essentially determines unemployment. It’s what the Marxists would call the rate of accumulation, but for the Keynesians it is capital investment. So if there is to be a substantial story that, no, it’s not about labor market institutions, but it’s about demand, then I need a story about demand. That is where financialization became important for me. To me, it was essentially around structural changes in the economy, the shareholder value revolution, or corporate governance changes, and the reassertion of shareholders on higher dividend payments.

But what I emphasize is that that’s not only an outside pressure on firms. The shareholders say, “Hey guys, we want higher returns, we want higher payouts.” But with the fact that firms are regularly reporting to the shareholders, there are organizational changes. So in other words, for me, it was also a way to bring in class struggle into the firm, but not in the Marxist industrial sociology, Braverman-type of analysis of the labor process, but in terms of corporate governance. How do you operationalize what the firm wants? With whom do managers talk to? Who do they report to on a regular basis? And as a side effect, non-financial firms start to become more active on financial markets. Now, part of that is hedging because the exchange rate becomes more volatile. But part of that is they start holding other financial assets or shares in other firms and theories that firms think of themselves as profit centers. And their own investment, whether they are producing shoes, wine, or cars only becomes one branch, and then you branch out, and if government bonds are a higher return, you hold government bonds. So it’s in that sense that I thought of financialization as a change in what firms are doing in terms of taking advantage. 

What I’m telling you, essentially, are chapters of my dissertation. The second one that came out in the Cambridge Journal of Economics on financialization is still one of my most cited papers. So that was my entry into financialization. I then went back to Austria and worked for 10 years at the university in Austria. We actually have a relatively broad heterodox economics program that was quite popular with students and a very lively atmosphere. And I continued to work on these Marx-Keynes tensions. At that time, what was important for me was what we now call the wage-led versus profit-led demand regimes. The Bhaduri-Marglin model, these are essentially synthesis models, where they say the Marxist argument emphasizes that investment is profit driven. The Keynesian-Kaleckian argument is emphasizing that higher wages mean higher consumption does higher demand. In the Marxist world, it’s an under-consumption crisis. These two are brought together in the Bhaduri-Marglin model. I was part of a literature that tried to empirically estimate these models and see how much mileage we got out of them. That literature then started out with those Marx-Keynes synthesis arguments, but eventually became more applied and asked, “Now that we’ve estimated whether the demand is wage or profit-led, how important is it?”

That led us to thinking about neoliberal demand regimes as either expert driven or finance-led. So in neoliberalism, you have financial deregulation, but also if you want anti-labor distributional changes, you have rising income inequality. Now, in a hippie-Marxist world, you would expect an investment boom to follow because you got lots of profits. If they get reinvested, you actually would have investment. That’s not what happened. So we’re saying that, actually, the economic structure, the demand regime, is still wage-led. But you have those distributional changes that, in a way, are integral, so you need other growth drivers. Then, the argument is, in some countries, finance, which initially was associated with stock market booms. But as we saw, there were more important housing booms, because they come with much larger wealth effects and much larger spillover on consumption expenditures and they also have powerful effects on investment. But there was only one group of countries. So in a way, you get a financialized form of neoliberal growth model. But in other groups of countries, say Germany, you get a much more industrial version of neoliberalism, where you also suppress wages, but you don’t have the same financial dynamics. In a way, you rely a lot more on export growth.

So the finance-led versus export-led distinction was an important one here. And that is an analytical framework that recently in comparative political economy, meaning outside economics, has gained a lot of interest. But you see again, it is that Keynes, Kalecki, Marx, and Woytinsky tension that’s often lurking in the background of this. In 2010, I moved to London. Unfortunately, the heterodox economics degree was shut down in Vienna, essentially because there was a university restructuring and the neoclassical wing of the department used that to clean the house. But anyways, for me, a big part of the reason was personal because we were looking for two academic jobs in one city. In Europe, it’s easier in London than elsewhere. As I moved to London, and essentially continued along the lines of work, following up on that, I’ve worked a lot on the Euro crisis. Again, there were neoliberal growth models interacting, but then the question arose as to how does the state react? And what’s the role of the state in particular in the Euro crisis? To what extent is that equation of different development of unit labor costs in different parts of Europe? To what extent are there real causes behind the Euro crisis? To what extent is it ultimately financial issues?

There was the real estate boom in southern Europe and the fact that the ECB does not support the member states. So with both on the left and right, you get debates about the real financial factors, the driving forces behind the Euro crisis. Finally, I became a professor at King’s College where now I am a Professor of International Political Economy. Funnily enough, I’m not an economist anymore. Again, there was a university restructuring at Kings. The program I was involved in got decimated. But it was also good for me to move out of economics, sort of half because conditions weren’t good, and half because I was actually happy to get out of economics and talk more to social scientists. So while the Woytinsky paper that we’ll be talking about is a side of my research, it actually ties back to what I’ve been thinking about for quite a while.

Scott Ferguson: That’s fantastic. Thank you for that elaborate introduction. So as you’ve begun to flag, we’ve invited you on the show specifically to discuss your fascinating 2021 paper that’s titled, “Woytinsky, Hilferding, and the Fiscal Orthodoxy of Interwar Social Democracy.” In the essay, you reconsider Wladimir Woytinsky’s WTB plan, and we’ll unpack what that is, which, just to quickly gloss over, is basically a union-backed and debt-financed public works program, which was tragically rejected by the Social Democratic Party in Germany in the Weimar period. And it was done so on seemingly Marxist grounds by some of the leaders of the SPD. So I think you’ve already begun to answer our kind of leading question, but I guess we want to know what initially piqued your interest in this particular episode in the history of Western Europe, social democracy, the struggle for socialism, etc? And then, what would you say your key claims are in that paper?

Engelbert Stockhammer: Yeah, I am delighted that someone finds the paper interesting. I’m totally fascinated by this episode and by Mr. Woytinsky, specifically. So first, what piqued my interest. Part of the interest is, actually, politically and not directly related to my research, and that’s the Austromarxist tradition. When I left Austria, I actually wasn’t particularly intrigued by the Austromarxists. As I became more social democratic while in the US and started to more appreciate what the Austrian social democrats had achieved, I, at some point, started to read what they did. And as I was working on finance, Hilferding’s Finance Capital, of course, is one of the big early Marxist works on finance. It’s a fascinating book. I presume we’ll have some chance to talk a little bit more about it. So Hilferding is trying to restate, in Finance Capital, Marxist theory and thinks about what it means for finance and banking. He will restate, in a way, a commodity theory of money, which I will argue leads to the gold standard. But the Austromarxist movement was much older. Hilferding was one of his most famous proponents, but the Austromarxists were, probably next to the Russians, at that time the most dynamic.

That time is very early 20th century, around the first World War, one of the most dynamic and innovative parts of Marxist thought. It sort of anticipated some of Gramsci’s ideas, in particular, on power, democratic ways to socialism, and notions of cultural hegemony. And Hilferding tried to conceptualize what he called organized capitalism, shifts in capitalism, and a changing role of the state in capitalism. They were also very deeply rooted in society and the working class movement. So let me give you a banal example of that. When I was 13 years old, I used to play quite a bit of chess. So for a nerdy young boy, the obvious thing is to play strategy games, and before computer games, one would play chess. So in Linz, some Austrian town, there would be the Linz chess club, which effectively turns out to be the bourgeois, upper-class, and cultivated one. There was a worker’s chess club, which essentially was the Social Democrats. And there was the chess club which was closer to the Communist Party. And despite the fact that at that time I had very little ideas about communism, I was part of it because my parents have connections to it. What I’m saying is even something as trivial as chess was organized along those big political lines. Imagine what that is like for football or for the things that take much larger constituents.

So they were deeply rooted. These were some of the best organized working class movements that the world has seen. And they were in a way quite down to earth. Vienna had those massive public housing projects, they did all sorts for schooling, and so on. But they also were intellectually leading. Hilferding comes out of that. And that movement gets essentially smashed by fascism. In the 1930s, you have this weird episode where Hilferding, who in some ways I admire, becomes the major economics spokesperson for the Social Democrats. He rejects a proto-Keynesian public employment program that Woytinsky has developed. And initially, it’s very odd. Why would you do that? Why would the forefront of the reformist, but still socialist movement, why wouldn’t they pick up on Keynesian ideas? On some level, that’s very odd.

And then, at some point, in reading about it, I came across this passage in Woytinsky’s autobiography, which is a fascinating thing. I think you’ll have a question afterwards about Woytinsky so I won’t go fully into that. But this guy is fascinating. He became the main author of that employment program for the unions. He’s one of the major economists for unions. But if you go back, he was a Russian socialist student in 1905 when the first Russian revolution took place. He was one of the student leaders of the Petrograd uprising. And I don’t kid you, he became the leader of the Petrograd Soviet of the unemployed, which of course, today no one knows about. And what did he try to do for them? He tried to implement a public employment program. So in other words, you have a socialist Keynesian, or proto-Keynesian, in 1906 in Petrograd at the height of the first Russian revolution. So once I had that, it was irresistible. You also asked me to briefly sketch out the main conclusion. So the WTB program that Woytinsky developed…

Scott Ferguson: Can you define why it is called the WTB program?

Engelbert Stockhammer: WTB stands for the three main authors: Woytinsky, Tarnow, and Baade. Tarnow and Baade were a union leader and a SPD member of Parliament. So essentially, Tarnow is the union support for that because the unions eventually supported the program, and Baade enabled the Social Democratic parliamentary faction such that it could get a hearing there. They essentially wanted to create a million jobs and have a magnitude of three percentage points of GDP. In other words, not completely off the scale, but something that we would recognize as substantial. So I’m investigating two things in the paper. One is how does Hilferding’s rejection of that program relate to his way of perceiving Marxist economics? Now, I purposefully don’t want to get into the debate on whether it’s proper Marxism. It’s his Marxism and he was an important Marxist at the time. And the conclusion will be, actually, his version of the labor theory of value ultimately endorses, or regards as completely normal, a version of the gold standard. Now, that’s a completely non-trivial statement.

Once you’ve read Polanyi or any contemporary economic history debates, the gold standard is interpreted as a mixture of an exchange rate regime, but also it comes with a policy package. The target is to meet the exchange rate to gold. You have to subordinate monetary and fiscal policy, ultimately, to the goal of maintaining that exchange rate. So the gold standard is a shorthand for orthodox economic policies. And Polanyi, of course, in The Great Transformation, is most outspoken on that. But it’s also clear in Barry Eichengreen, one of the most eminent economic historians. He was essentially saying the gold standard was inconsistent with parliamentary or modern democracies. The gold standard could run as long as you had an elite or census-weighted election system where the elite could make up their minds. But if you want to justify your policies with respect to the entire population who might be affected by unemployment, it becomes unsustainable. So for Eichengreen, there’s a fundamental tension between democracy and the gold standard. And for Hilferding, not realizing that will be, in my view, a devastating failure. So the argument here is that it is rooted in Hilferding’s Marxism.

But then, in a way replying to some other debates, I’m also asking, how much was German democracy an outlier? That is particularly replying to a very interesting book, I should say, by Sheri Berman, The Social Democratic Moment, where she contrasts Swedish and German Social Democracy. The Swedes are interesting precisely because they were the ones that endorsed Keynesianism. They were divided on Marx, but were quite leftist still on a lot of scales. And of course, they were then leading in establishing the most developed welfare states. But early on they endorsed versions of Keynesianism that got off the gold standard and did deficit spending. Berman is essentially arguing the German Social Democrats were too Marxist. They were too orthodox both in their theory of the state and in their theory of how the economy works. Now, the flip side of that, which she doesn’t fully draw out, of course, is that the less Marxist the Social Democratic Party is, the more you would expect them to be open to Keynesian policies.

So then, in the final part of the paper, I look at Britain, where you find the exact same problem that Hilferding and the Social Democrats have: what should you do in a recession? Should you do deficit spending? Should you stay orthodox? Britain is almost the opposite of Germany because they did not have a Marxist tradition. Ramsay MacDonald was all sorts of things, but he was not a Marxist. But you also had Keynes and you had the liberals who Keynes supported, who were campaigning explicitly on a public spending platform for the election. So why is the situation in Germany very politically difficult? In terms of implementing such a program, the Labour Party actually could have done it because that’s what the liberals had campaigned for. But they essentially did the same as Hilferding. So I’m saying it’s not just about Marxism. Marxism was distinctly unhelpful with the Hilferding version there. But the roots ran deeper. In part, it is the pressure group mentality of parts of the labour movement. In particular, the unions and the inability to develop an appropriate theory of socialist reform and transformation of the capitalist system, but also specifically the capitalist state and how we can use the state for our purposes.

William Saas: This is excellent. As you’re talking about Woytinsky and Hilferding, it’s hard for me not to see your story in Woytinsky’s story a bit, going back to your description of looking at the theories of unemployment in European countries, and encountering the Marxists who were like, “Well, unemployment is inevitable.” It’s almost a law of capitalism. And you go back and look at Woytinsky encountering him making what seems to be a very reasonable, sensible, and important suggestion and policy proposal, and encountering again, another kind of unexamined assumption that the commodity theory of money is an obstacle. So I don’t know if you see that reflection of your own experience in the experience of Woytinsky and maybe that’s a part of the draw of yourself to his work? But in addition to that, I wonder if you could help us better understand the context into which Woytinsky is making this proposal? What was the situation in Germany? How did they get there? What was economic life like after the Treaty of Versailles and following the German defeat in the first World War? What else was happening in Europe?

Engelbert Stockhammer: Yeah, I think it’s important to get some bit of historical context. Now, on the economic side, it’s important to realize that, for Europe, the interwar years, by and large, were an economic disaster. It is quite different from the US where you often speak of the roaring 20s, where you had a boom and rapid technological progress. You also had financial bubbles developing and so on, but you had very strong growth. In Europe, it was a mess. It was a mess, politically. It was a mess, economically. It was a mess, financially. I started with the finances and that of course brings us to Keynes and his economic consequences of the peace. The Versailles Treaty, essentially, signed culpability for the world to Germany, which isn’t entirely wrong, but probably a bit overstated. They also imposed reparations on Germany. And while reparations morally make sense, or may make sense, Keynes, of course, pointed out and resigned. He was one of the negotiators on the British side advising the finance ministry for the Versailles negotiations. Keynes was pointing out that, if Germany were to pay these reparations, it first of all would require massive export surpluses.

Now, these export surpluses would require other countries, such as Britain, the US, and France, because who else would Germany trade so much that it has massive foreign exchange from that? They would have to have massive current account deficits. In other words, employ less people because they’re producing less. So he says, that’s not gonna work and then there is the issue of scale. The European countries at that point are settled, overburdened with debt, and that debt is sovereign debt, but it’s essentially related to the war and it’s to the US. So we are in a situation where Britain, while still, in a way, the major empire, and London and the Bank of England is the financial center, actually, in terms of its balance sheet, is in no position to play the role of informal lender of last resort. And while we talk about the gold standard, of course, you can make a good argument that, actually, it was always a very managed gold standard. It was really a gold plus sterling standard, because the Bank of England, to some extent, was managing things already in the 19th century. But Britain, at that time, was not in a position anymore to do that. But all the countries tried to get pegged to gold because that was the normal. That was proper economic policies and structures, both in the Ricardian commodity money theory, but also implicit in the Marxists.

Although, they don’t usually like to point it out. Because money is also a produced commodity. I mean, if you get through the first 200 pages of Marx’s Capital, gold is taking the role of the general equivalent, i.e. money, precisely because it is a produced commodity, which embodies value and thus can represent value. For the Marxists, that is important because if that were not the case, if the money was just a piece of paper or accounting entry, you essentially have a massive case of unequal exchanges because you’re all the time exchanging goods against things that are intrinsically worthless, in which case, there’s no change of equivalent. Now, for the Ricardian, or the Liberal tradition, there’s other things, other reasons why that’s important. It’s essentially to simplify the barter economy. All the countries try to get pegged to gold, but that implies austerity policies when you have a crisis. So whether it’s Britain that enters gold with an overvalued exchange rate, which Keynes was critical about, or when Germany tries to get on gold, and at the same time, pay the debt, the debt creates permanent tension and permanent capital shortage. And by capital, we really mean US dollars shortage because they are indebted in dollars and that creates tension throughout the period.

So in Europe, we have high unemployment in most countries throughout the 20s, and thus social tensions remain high. You have a quite fragile–I am talking about Germany, here–you have a very fragile political system. You have a massive social democratic movement that’s deeply rooted in society, but only in certain segments in society. It’s essentially the industrial towns. They made very little inroads on the countryside. You have old elites still being important in Germany. That means the old landlords of the second serfdom in Eastern Europe, in Prussia, that are still dominating part of the state apparatus, in particular, the military, and they were the ones that initiated the first World War, or contributed to it, and they are still in power. You have a strange alliance of industrial capital and heavy industry with those reactionary landlords, the reactionary countryside, that this market had forged, but it maintains its way into the 20th century. And initially, you have quite marginal the rise of what would later become fascism. Now, the labor movement is this tragic divide with the Russian Revolution and it essentially cuts right through the Social Democrats.

In Germany, that takes particularly nasty forms, because it’s essentially under a German right-wing chancellor in the Ministry of Defense, Noske, that did the Freikorps, which are essentially proto-fascist military units that are not under military command when they act. They executed Rosa Luxemburg and Karl Liebknecht, who are the leaders of the young generation of the radical left. Now, that’s before we have communists. That’s the Spartacus League, which gave the name to my chess club in Linz. They were not at that point communists because the Communist Party only gets founded later. But they’re still Social Democrats, or the radical wing of the Social Democrats. Hilferding, as we’ll see, is part of the independent Social Democrats that split because of support of war credit from the majority Social Democrats. So you have an environment rich in social, political, economic, and financial tensions. It’s brewing up. You have these tensions maintained through the 1920s. Then, from 1929 to 1931, the global financial crisis hit. In Germany, you get bank failures from 29 to 31. In a matter of months, the third largest German bank goes bankrupt and unemployment is then rising sharply in a matter of over a year from two to six million people, if I remember the numbers correctly. I’m not sure that I fully addressed your question.

Scott Ferguson: Yeah, you did and it really puts into sharp relief what a massive union-backed public works proposal and program would mean in an intense situation like this. I think you made that really clear and vivid. I’m wondering if we can circle back and talk a little bit more about Wladimir Woytinsky and his fascinating autobiography. So you told us a little bit about his origins, but maybe you can go a little bit more deeply into his story and where he comes from and where he goes? It really is fascinating.

Engelbert Stockhammer: Yeah, I think he’s brilliant. I think someone has to make a movie about him. So Woytinsky is a Russian Jew. He comes from an intellectual background and became a student leader in the uprising, the first Russian revolution, in 1905 and 1906. He gets involved in that and he’s, at that point, actually working with the Bolsheviks. I have to say I was surprised that he didn’t mention the Bund at that point. Now, we of course nowadays think of the Russian Social Democrats in terms of Bolsheviks and Mensheviks, because that’s what matters in the Russian Revolution. The Bolsheviks in 1905 and 1906 were a non-category. Even Trotsky didn’t know that he was a Bolshevik or would be. But what you have is the Bund, which is a Jewish socialist organization that is much more along the lines of European social democracy, meaning that they are a mass organization. They are not clandestine, avant garde, or revolutionary organizations like the Bolsheviks would be later. Also, they, like the Austrians, would sort of have organizations throughout society and they play in the open. They’re not clandestine, conspiratorial organizations. And they’re a main driving force of the revolution.

But I actually don’t remember Woytinsky mentioning them. They are mostly Jewish. And they would become a wing of anti-Zionist Jewish international socialists. In Britain, the Jewish Voice for Labour, is still an echo of it, and that may not concern you, but it was important for us in Britain because the right wing went after Corbyn under the heading of he is an anti-Semite. And the Jewish Voice for Labour, of course, was up in arms against it, because for them being a Jewish socialist, never meant fully endorsing Israel, necessarily. So he is part of that radical tradition. He works with the Bolsheviks. He’s in some ways very pragmatic and wants to help and start building work around the Petrograd Soviet and unemployment, which I understand he helped to set up. To do a little bit of public employment, but mostly they provide public food kitchens and other things. So they’re doing actual work on the street. But of course, this whole thing doesn’t live long enough to make much of a difference, because that revolution gets squashed and it gets squashed brutally. Essentially, the tradition of the Bund gets almost wiped out because the mass organization and the internal democratic structures are just no match for the authoritarian Tsarist regime that we have afterwards. And that creates an environment where the Leninist organization actually becomes effective and it will then later become important in the Russian Revolution.

So Woytinsky was sent first to prison and then to Siberia for 10 years. And in Siberia, in spring 1917 with the bourgeois phase of the Russian Revolution, he and tens of thousands of other political prisoners get released from Siberia, and he goes back to Petrograd to work for the Petrograd Soviet again. Now, we are in spring 1917. So when I say Petrograd Soviet, we mean Mensheviks, we don’t mean Bolsheviks. The Bolsheviks become strong in autumn and their rise is rapid. And Woytinsky, in his autobiography he can be a little bit self congratulatory at times–he has a life that’s worth aggrandizing, I have to say. So it’s not always fully clear where his interpretation kicks in. But initially, he seemed quite indifferent to work with the Bolsheviks and Mensheviks because he’s not ideologically committed enough. Although, I don’t know whether that was true of his younger self at that point. He gets involved with the Soviet. He works with them in various administrative capacities. And when the Bolsheviks got to power, essentially, he and the Mensheviks had to flee because the Bolsheviks were not very forgiving. It’s clear that he’s coming out of social democracy, that he has a broader notion of democracy than the Bolsheviks.

So he flees to Georgia, which for two years or so is an independent socialist republic. It’s dominated by the Mensheviks. He joins, but wants to be in the diplomatic service of Georgia and is sent abroad to essentially advertise the existence of Georgia to other states, such that they will recognize it. So he is sent to Italy. There’s only two problems here. One is that the Bolsheviks take over Georgia and Mussolini takes over Italy. He has to leave Italy and eventually comes to Germany where he works as an applied economist. In economic history, he is cited because he has a very descriptive book, Die Welt in Zahlen, which is essentially a statistical compendium that economic historians cite quite a bit. So he’s a pragmatic applied economist. If you read his work around the WTB plan, it’s essentially driven by the urge to do something. You won’t stand by when you see the working class being unemployed. He has, on the one hand, human empathy, but also political aims. For him, as long as you have mass unemployment, you may get rebellion out of desperation, but you will not get it properly. You don’t get on the offensive as long as you have mass unemployment. You need to offer specific things to those people in it, as opposed to…

Scott Ferguson: So he’s not an accelerationist.

Engelbert Stockhammer: No, not at all. He’s the opposite. You need to give something tangible to them, as opposed to the promise of a socialist utopia. And his work, then, when you read it, it is quite empirically driven. I mean, there’s a lot of data in there. When he discusses the employment effect and the costs, what are the average costs of most of employment, not very surprising, it would be in construction, housing, roads, and bridges. If we are talking 2008, it is all in there. He looks for the sectoral hourly wages of workers, of bricklayers, of people in the construction sector. What is the state currently paying for unemployment insurance and benefits? He wants to get his data on that straight. What he’s doing there is very clearly proto-Keynesian. He makes a sustained case that you should do that even if it is deficit financed. Analytically, he is not quite Keynesian. There’s no well understood theory of the multiplier. I mean, he was aware of Keynes. He read him. He also had a letter exchange with Keynes. He was writing in 1929, well before The General Theory of Employment, Interest and Money, way before Keynes had the theory of the multiplier straight. So my ask here is high, but in that sense, theoretically, it wasn’t fully advanced. But in terms of economic policy, he was there and that’s also recognized in economic history literature.

The earlier version of the WTB plan was much more monetary financing. It was much more tweaking around the gold standard, the reserves that banks would hold, and thus were vulnerable politically in that you couldn’t quite do that without the consent of France and the US. So initially, he wanted an international program, not just a German one. As it became clear that that was not forthcoming, he more and more moved towards domestic financing where there would be, if temporary, financing by the German central bank. So in other words, it is to some extent a central bank financed public employment program. Woytinsky then tries to get it through with the Social Democrats. He manages to convince the German trade unions, which is non-trivial. It’s non-trivial in the sense that, in the division of labor between the party and the unions, and they were closely intertwined, the division of labor essentially was that the unions do the workplace organizing, they strike for higher wages, but legislation is by and large the business of the party, and thereby also macroeconomic policy. And certainly, whatever international currency arrangement is not traditionally the territory of the unions. But in a way, they got desperate because it was their members that got unemployed, and they were losing members when unemployment was spiking, both to the communists but also to the Nazis. So they felt the need for action, but they’re also, in some ways, more pragmatic and less ideological than the Social Democrats.

Now, in some ways, they were more to the right politically than the Social Democrats. But in this case, they were more Keynesian. Hilferding, he was the main spokesman. He was twice finance minister and, after Finance Capital, was sort of the Marxist authority, and then followed in the footsteps of Karl Kautsky as the main ideologue of the German Social Democrats. He essentially was blocking it. He was shooting it down both in the front but also behind the scenes in the Social Democrats parliamentary faction. I presume we’ll talk a bit more about Hilferding. So it doesn’t go anywhere. The Nazis will pick up on it, but mind you all this is happening in 1931 and 1932. So this is literally a year before the Nazis take power. And then, in 1933 Woytinsky of course has to leave the country. I mean, if you’re a Russian Jewish socialist, you couldn’t be much further up on the hit list of the Nazis. So he gets out just in time and goes to Switzerland, to Geneva, and works there for what would become the ILO, the International Labor Organization. And what he does for them is he develops public employment programs. He doesn’t get a permanent job there because the Soviet Union is blocking it. Because they don’t want a Menshevik counter-revolutionary in the ILO. So he doesn’t get a job and individually goes to the US. In the US, he starts working for the Roosevelt administration. He works for the Bureau of Labor Statistics, and labor statistics is exactly his home territory. On the BLS webpage, you’ll still find links to some of his work.

However, I have to say that the story that I’m telling you gets tarnished. I mean, he’s a Menshevik. A lot of his comrades get killed by the Bolsheviks. So understandably, he turns anti-communist. But he goes further. He endorses American liberalism, and at the end of his life, in the 1950s and 1960s, goes to Latin America and to East Asia to preach the advantages of liberal capitalism. So this guy ends up going to, I don’t know, Brazil and Vietnam to tell him how great it is. So it’s a bit painful if you read the biography, but it’s a fascinating story. But ultimately, the reason why I’m so fascinated by it is you glimpse the possibilities of a socialist Keynesianism there. We tend to associate Keynesianism, and my Marxist friends would say this, as an attempt to save capitalism, saving capitalism from itself. There’s no question that this is what you can use Keynesianism for. And this is effectively what has happened with the global financial crisis of 2008. I would argue, with the New Deal, it was more about transforming capitalism than about saving it, or at least as much. So in my view, you can use Keynesianism for all sorts of things.

But when Woytinsky was doing what he was doing, you didn’t have Keynes yet. I mean, he hadn’t written The General Theory of Employment, Interest and Money yet. It wasn’t necessary to associate Keynesianism with the Liberal Party in Britain. Unknown to everyone else because he was writing in Poland, you had at the same time, Michal Kalecki, developing big parts of Keynesian analysis, the multiplier effect, in particular, very keenly already in there with a much more Marxist background. You have Woytinsky, who, whatever he does after, is clearly a serious, social democratic reformist, as the Austromarxists at that time were. So at that time, history was a lot more open. If you could imagine, if Hilferding had fully endorsed it, and then said, actually, this is complementary to the state theory that he and Otto Bauer had been developing. If we wanted to endorse bourgeois parliamentary democracy and the Social Democrats, of which Germany was the only party who was unreservedly in favor of parliamentary democracy, and if you paired it with a Keynesian socialist agenda, then actually that could help us to do what we’re doing. So it’s that moment of openness that to me is so fascinating. Instead of having the firm association of Keynesianism as something pro-capitalist, it’s about having it as part of a socialist agenda.

Scott Ferguson: I’m curious, in his writings, did Woytinsky cite precedents? Did he cite Louis Blanc and the French workshops or anything like that?

Engelbert Stockhammer: I’m not aware of that at all. There’s, of course, big parts of his Russian writings that I can’t read. But that’s not his style. Woytinsky is not an ideologue, I think, both in his own mentality, but certainly in the way he wanted to come across. I mean, he is also a proto-Keynesian in terms of the technocratic attitude. He wants to say, guys, here are the numbers. There are 6 million people unemployed. It’s not going to lead to inflation if you do public employment, because there’s 4 million more unemployed people than you had two years ago. So you can employ up to 4 million without inflationary pressure. And these are the costs that you will get given the wages. So that’s his discourse. It’s much more technocratic. And it’s also the discourse, across the political spectrum, that a lot of the Keynesians would adopt in the coming years in the US and Britain.

William Saas: Why didn’t Rudolph Hilferding see Woytinsky’s work as complementary? What conclusions do you arrive at in your read on the biography of Hilferding?

Engelbert Stockhammer: That’s a very good and fascinating question. My short answer will be it’s deeply rooted in his Marxist theory. But let me give you the long answer, just because it’s so fascinating. So Hilferding is part of the Austromarxist movement. So he’s coming out of the Austrian social democracy and, in particular, a fascinating group of essentially young, radical students in Vienna. At that time, it’s Otto Bauer, Karl Renner, Max Adler, next to Hilferding, and they will have their own journals. And Vienna, at the time, is an intellectual hot house. I mean, you have the grand guys of the Austrian school there. You have Böhm-Bawerk there. You have von Mises there. You even have Hayek there. I’m not even getting started with the philosophers and artists. But so, Hilferding and those young Marxists, they sit in the seminars of the Austrians. And one of the first things that Hilferding writes is a reply to Böhm-Bawerk’s criticism of Marxist theory. And it’s still widely cited. I actually don’t think his writing there is particularly good. But it’s still impressive. It’s sort of good Marxism. While Böhm-Bawerk, of course, is very polemical and critical, he has some serious points, in particular, around the transformation problem.

The tension between what the Marxists call prices of production, where you have uniform profit rates, and the labor values, where you don’t have uniform profit rates, where it’s all about labor values. That is a real problem for Marxist economics. That would become a big issue in the 1970s and lead to all sorts of value theory wars. But Hilferding essentially says Böhm-Bawerk is too much concerned with explaining relative prices. But as Marx says, we’re really interested in exploitation. It doesn’t settle it. It’s correct, but it doesn’t settle the criticism that Böhm-Bawerk raises. But Hilferding, he studied medicine. He’s a doctor. This is intellectual enthusiasm and a political commitment that gets him and others into these debates. And it still is substantial and widely cited work. But then he writes Finance Capital, and that is really an impressive work. Again, it’s outside his own studies. It’s not that this is his PhD. He does it beyond learning about bones and muscles and the like. What he does there is a restatement of Marxist theory, but it takes finance very seriously. He takes finance seriously because, in the German experience, finance banks are much more important than in the Anglo Saxon countries, in particular, because Germany is late industrialized.

The banks are used to finance heavy industry and pharmaceuticals. They need lots of capital investment, so they need big things. So they become important. But because that’s important, he has to go back and ask, where does money come from? What is the role of money? What’s the role of things? And a lot of what he writes there is very, very sharp and innovative. You can read discussions of options and option pricing there, net present value calculations, it’s all in there. We all had to read up around the global financial crisis. He also has a theory of endogenous money in there. In his case, it’s around bills of exchange. And with bills of exchange, actually, more of them are issued in a boom, because then there’s more demand for them. And more of them are issued, because, and here comes the Keynesian element, because the business outlook is more positive and, therefore, the liquidity preferences decline. But for Hilferding, that is the action around the supply side fundamentals that are given by labor values. So there is a dynamics of the financial sector, and it’s procyclical, it intensifies the boom, and consequently, the crisis. But it is if you want a cycle around the labor values and the production side.

Ultimately, in his story, you need gold, because you need the real stuff that has changed in value to represent money. And where you see that is in international transactions. In other words, it’s the gold standard. So he explicitly says what we have here is the experimental proof of the labor theory of value, an objective value theory. It’s that, internationally, you need gold for transactions. So the Keynesians say this is a policy regime that has all sorts of complex implications. Hilferding says, no, that’s the true nature of things of the capitalist relations of productions. And his crisis theory, I have to say, is, unfortunately, quite disappointing to read. Because it’s essentially a restatement of Marx’s analysis of the contradictions of capitalism that essentially say there are unresolvable contradictions, and eventually, they will be so bad that there will be a socialist revolution. It’s not the crisis theory that gives you any entry points for economic policy. It’s not a crisis theory that would help you if you’re the finance minister in 1929. They won’t guide you to what you can do. It’s essentially a story of capitalist doom and self destruction, that you can watch and then afterwards do the revolution and take over the ruins. 

But then, he also has a fascinating analysis of international aspects, and that’s an implicit reply to Bernstein and to the revisionists, where he emphasizes that those finance capitalists, because they also get tied up with the state, will give rise to dangerous imperialist dynamics. Of course, Lenin would draw very heavily on that later. So in other words, this is, at a time, really cutting edge Marxism and really cool in terms of what it weaves together. Hilferding then goes to Germany. He leaves Austria and works closely with Kautsky. During the first World War, he keeps party discipline but he is highly critical of the Social Democrats support of the work, precisely, because of what he had written in Finance Capital. And he eventually, with two handfuls of other social democrats, gets kicked out of the Social Democratic Party because they are too critical of the SPD’s support of the war credits. So Hilferding, and ironically, also Bernstein, the main revisionists, are then part of the independent Social Democrats. They would exist until, I think, 1922. And in the last elections they ran, they were almost as strong as the Social Democrats. They were, essentially, the antiwar and more radical faction. They would then split over their position with respect to the Soviet Union and over communism. And they would split halfway through, in part joining the communists and part joining the Social Democrats. 

Hilferding also develops the concept of organized capitalism. So he keeps up with what’s going on, and notices that the state is becoming more and more important and involved. In particular, during the war, but he says it also goes on afterwards, precisely because you have to those big trusts and industrial groups organized by finance capital. They get so big that they start cooperating with the state. And that, for Hilferding, is an entry point. Because, at some point, he says, nowadays, essentially, if you nationalize the leading banks, you have nationalized half of the big industry. So for him, that’s an entry point for socialist policy. Economically, this is stabilizing. The concentration is stabilizing capitalism because it stabilizes prices and gives more if you want a rational planning aspect to prices. Hilferding, because he’s a reformist, is one of those that advocate for the Social Democrats to reach out beyond a blue collar working class. And that in interwar Germany, but all over Europe, means reaching out both to white collar working class but also to the countryside and to the peasants. Other than in Sweden, that remains a big unresolved issue for all social democratic parties, that they’re essentially not getting into the countryside, which, at that time, electorally is a big problem.

So in some ways, he’s very open and supports parliamentary democracy and argues for a parliamentary role to socialism. In a way, his state theory is advanced, or it goes beyond orthodox Marxism. But his economics doesn’t. And then, when he finds himself in these debates in 1929, 1930, and 1931, he essentially can’t understand how you want to get rid of all this without the gold standard, because that’s ultimately the natural thing. And you can’t solve the fundamental contradictions of capitalism with a bit of government spending. So in that sense, the Marxist theory here, rather than enabling sort of creative strategies, becomes a big stumbling block that essentially allows them to not see that possibility for Keynesian policies, or instrumentalizing Keynesian strategies for a socialist agenda. And when he comments in the main social democratic newspaper before that, on the breakdown of the gold standard in Britain, he uses that as an argument to say, “Well, you see, it only leads to disaster if you try to do funny things. You first of all need to get back to gold to do anything.”

I have to say two things about the gold standard. From an economic theory, but also from a sociological theory of money, it’s fascinating how the gold standard goes down in Britain. It’s a strike in a military base. It’s the naval fleet that goes on strike against their wage cuts. Now, these are not regular workers. These are soldiers. They are not allowed to strike. So what you have here is a mutiny. It’s not just a strike. It’s a mutiny. And with all the debates that happened, all the Keynesians that told you that the gold standard is actually a bad idea, it’s when the soldiers start a mutiny that the gold standard breaks down. So think about it. Doesn’t it tell you something that international money and exchange relations has something to do with class struggle? They’re striking about wages. But also, they have a deep relation to the state. It is once the military operators go on strike that the gold standard breaks down.

Admittedly, going off the gold standard in Sweden or the US is a different story, but it’s hard not to see that, once you’ve thought a little bit about what money is, that this is something very deep to do with the state. But there’s also a class conflict dimension to it. But Hilferding doesn’t see any of it. The gold standard is the natural order of things because money needs to be backed by value and gold is a produced commodity, thus it’s okay. That then blocks the WTB plan for the Social Democrats. The Nazis are not shy. They take it over, partly because they’re interested, partly, because they see that this can drive a wedge between the unions and the Social Democrats. At that moment, the Nazis tried to flirt with the unions. A few months later, they put them into the prisons and concentration camps, of course. But at that time, they used that. Essentially, the Social Democrats don’t go anywhere with it. And within a few months, they are also in the prisons. And, of course, Hilferding dies in a Gestapo prison in 1941.

Scott Ferguson: And the Hilferding argument, on behalf of the party, was that we cannot do anything. We must let the crisis play out. And that’s what happened. I mean, maybe this clearly wasn’t the only causal factor but it is tragic and haunting to think of what support for this program might have led to instead.

Engelbert Stockhammer: What you said is perfectly correct. There’s two complications that I would want to add there. I mean, it’s very clear in Hilferding and his close collaborator, Naphtali, there is an understanding that you have to let the crisis run its course and afterwards you can do something. Naphtali explicitly says it’s in the boom that you can try to do reforms. You don’t fix the capitalist crisis, you let the market forces work itself out. But there’s two complicating factors. The first is hyperinflation. Germany, of course, had experienced, as part of its monetary troubles, hyperinflation in the early 20s, which was devastating, I would argue, more for the middle classes than for the working class. But of course, it led to big scars. So that argument gets rehearsed. It gets rehearsed at a time when it becomes patently absurd. So Naphtali is literally warning in late 1931 against the danger of public employment because it would be inflationary. In 1931, I looked up the numbers for writing the paper, you already have minus 10% inflation. You have serious deflation. So the deflation is already fully biting. It’s clearly not the issue.

The other issue is foreign policy and the war reparations. The Social Democrats did accept the Versailles settlement. So in principle, meaning with the qualification it has to be bearable for Germany, they were committed to war reparations. And going off the gold standard, or giving up on austerity in that context could also be seen as an international affront against France, in particular. So it is more complicated, but at the core is this idea that capitalist crises will fix themselves. It’s very different from Woytinsky. Woytinsky is clear about the debt deflation theory that Irving Fisher would formulate. That is, in the current situation, when Germany is over indebted, you want more inflation, not less. It’s part of getting out. You also don’t want 1 to 5%, you actually need serious inflation to help firms deleverage.

William Saas: So previous historians, and people who’ve studied this moment and the WTB plan, have interpreted it differently than you have. Can you talk about those interpretations and where they might have gone off course? What are they missing?

Engelbert Stockhammer: I’m not sure there are a lot of substantive differences. Because I’m interested in the possibility of a socialist Keynesianism, I have a different angle and a different context. But the WTP plan is not widely known outside a few professional economic historians. I mean, once you’re sensitized to the term, you essentially see it in all discussions of the Great Depression in Europe. If you look at Kindleberger and Eichengreen, it’s there and they would essentially all agree, if there was any serious German Keynesian plan, it’s the WTB. It wasn’t quite the only one. There was also a somewhat less important one that was coming out that goes in a similar direction. So that’s there. If you read Harold James and others, they all essentially regarded it as, in principle, economically viable. There’s big debates on whether it politically was ever viable. But it was an economically plausible, proto-Keynesian strategy. It’s also clear with the authors, Eichengreen, for example. I mean, these are Keynesians. They’re coming out of the technocratic traditions. And for them, in a way, the puzzle is like, why didn’t the Germans do it?

Where I’m different is, I want to say that there would have been a specific socialist route to that, that comes as part of a grander, socialist strategy, and in particular, one that would have complimented the Austromarxists. The Austromarxists tried to formulate a radical socialist but democratic parliamentary strategy. And Otto Bauer, for quite a while, was heading what is often called the Internationale 2.5. They just didn’t want to accept the split between the communists and the Social Democrats, which in 1920 or 1921, is very honorable, and actually not completely absurd. Of course, a few years later, it is a futile attempt. But if you want to do such a socialist transformation, your problem is what do you do with the state? How do you instrumentalize it? That was a big problem for socialists at that time, and for good reason. I mean, their experience of the state has been a very nasty one. In the 1880s, with the late Bismarck, the Social Democrats were outlawed. They actually weren’t fully outlawed, because there were some states where the Social Democrats weren’t outlawed, except for the national elections. But the regional elections, they were allowed and so on.

So the details are complicated, but it was clear that there was repression. It was clear that the old aristocratic elite had not only no sympathy, but also no tolerance for socialists. And in that sense, of course, it’s difficult how you can think of the state as something positive that you can use. And initially, that’s, of course, a critique of a lot of the Marxists. A lot of the reformists of the Social Democrats were mostly ad hoc. I mean, it was collective bargaining and unemployment insurance and state pensions, but it wasn’t really part of a reformist strategy other than the Bernstein version, which essentially says the state is relatively neutral, which obviously doesn’t do justice to the complexity and nastiness of actually existing and capitalist states. If you are Charles Tilly and Michael Mann, states historically have been war making machines. And they essentially incorporate other social groups, because they need them for more effective war making, and in particular, for more effective financing of the wars. Initially, the British state needed the merchants and then, with conscription and mass armies, you needed the local population. The state makes concessions that then takes on a life of its own. That’s the problem our socialists have: how do they do that?

And ultimately, the Austromarxists were not successful in that because they were Marxist radicals in theory, but quite skillful reformists on weekdays. There was a big unresolved tension between them. Keynesianism would have offered a quite specific entry point there. It would also have allowed socialists to develop a more meaningful theory and narrative of finance and financial crisis. Because, as I said, for Hilferding, and essentially for a lot of the other Marxist literature, finance is something that comes on top of those class conflicts and exploitation, and then complicates things. But whatever you do, finance can’t fix the basic problems. Now, from a Keynesian perspective, it’s not clear why finance is less fundamental. I mean, that doesn’t take away that you can’t regard class conflict as being very important, but finance is very much built in there. And in Marx’s M-C-M’, the circulation of commodities, of course, money is also important. So, if you think of people like Jim Crotty, there are attempts to build Marx further in the direction where finance and money have a quite fundamental role, but it would have allowed the socialists to appreciate more how important that financial crisis is, and that once you have a full blown financial crisis, that’s not something that’s going to go away quickly.

Once you have a debt overhang, once you have a lot of bankrupt firms, that’s gonna leave long lasting scars on your economy. In that sense, you need entry points. Of course, analyzing and discussing finance, coming up with specific proposals for financial reforms, takes a lot of energy, because it comes with its own language. You have to understand things that are complicated. I mean, think of the only financial instruments that we discussed in 2008. Now, these are things that are quite remote from a lot of people’s lives. It requires some effort. But the effort, to some extent, also comes with new instruments and new areas of maneuver if you realize that there’s something you can do in that area. You can use the central bank to either finance governments or to finance development banks that then have a specific agenda, say, decarbonizing the economy. So, in other words, it requires quite a bit of effort, but it increases the state of your economic weaponry to some extent. So in that sense, I think it’s very important that the socialists engage with it.

Scott Ferguson: So you’ve walked yourself into our last question, which is, and I’m sure there’s not one simple, straightforward answer to this. We have to think about various contexts, whether we are talking about Europe, we are talking about the United States, or we are talking about the global south. But that said, what for you are some of the deep lessons of this story for a contemporary left moving forward?

Engelbert Stockhammer: I guess the short version is that socialists have to take finance seriously, because it’s not just a minor complication. It’s a big part of the capitalist system. So any systematic strategy of socialist transformation needs to think about what you do with corporations, how you structure the workplace, economic democracy, whatever you want to talk about there. But it also needs to think about the financial sector, because this is where a big part of the mess is coming from. Circumstances, of course, are quite different now. Not only is finance very different, but also Keynesianism has a very different state than in 1930. So let me start with Keynesianism. In 1930, initially, no one was doing Keynesianism. I mean, it was sort of a revolutionary mindset for all sorts of people. Even Keynes struggled to convince the Treasury, where he had a quite prominent role, to go in that direction. And when Roosevelt did it, it was trial and error. Until very late, Roosevelt talked about balancing the budget. Thankfully, he wasn’t doing it. His policy was different, but the theory–sounds quite horrible sometimes what he’s saying there. Roosevelt compensated for it by activism. He just wanted to do something in a way like Woytinsky. And because he was so much an activist, he didn’t care that much about the balance sheet ultimately. But it was quite late that the Roosevelt administration actually rhetorically endorsed budget deficits. So at that time that was all very new.

And in that sense, there were some Social Democrats. When you go to Sweden, Woytinsky, or to Kalecki, there were some socialists that were there. We’re talking about Keynesianism, and afterwards, it is deliberately fully incorporated. Nowadays, it’s very different. I mean, Keynesianism is much more regarded as a toolbox, and as we’ve seen, is sort of in a piecemeal way appropriated by all sorts of different political directions. And as much as we can have a socialist Keynesianism, you can have Keynesianism of the financial elite. To some extent, not the full extent, I should say, but to some extent, we’ve seen that after 2008. If you read Keynes, there is not a single road, I think, on bailing out banks. The focus is on fiscal policy to stabilize employment. Along the way, if it’s useful, you can do something with the banks. It’s probably not useful if they go under. But that’s not the focus. But in 2008, it was a very big part of the focus. Now, to be fair, there was also quite a bit of Keynesianism there. I mean, in the sense of employment, but not all the way and certainly there was not any sustained commitment to full employment.

Scott Ferguson: Full Employment of the banks.

Engelbert Stockhammer: Yeah, but in that sense, they don’t care about employment. They care about balance sheets…

Scott Ferguson: No, I know, I was making a joke. They wanted to make sure the bankers were fully employed.

Engelbert Stockhammer: In that sense, it’s clear that you can do lots of different things. It’s a lot less revolutionary. But there’s a certain legacy on the radical left to downgrade Keynesianism as reformism. My point is, yeah, sure, this would be reformism, but there’s all sorts of different types of reformism. Of course, the role of finance has also changed quite a bit. The gold standard doesn’t have the same role. It’s not a reference point. But I guess there’s two or three areas where it becomes immediately important. One is the whole role of the central bank now. And one of the things where we’ve seen it is in the Euro crisis. The Euro crisis was the echo of the global financial crisis. But different from the global financial crisis, it was mostly played out, not on private debt, but on public debt. So it was the Euro area member states, or the southern periphery, that got into trouble. And they got into trouble, to a large extent, because the ECB did not say, okay, you are member states of the Euro area, thus, in the case of need, I will support my governments, which is what the Federal Reserve has done in the US, what the Bank of England did in Britain, and what the Bank of Japan did in Japan. The Euro area, for a long time, did not say that. Quite on the contrary. They said to Greece in the run up and when things were escalating, you really have to balance your budget, which of course, is a signal to the financial market, they’re gonna let it drop the value of Greek sovereign debt further. Therefore, let’s speculate against it.

With Draghi, his famous words were that the ECB will do everything it takes to maintain the Euro. They had the Outright Monetary Transactions facility, which they actually never used because the words were enough. Because financial markets knew from the US and Britain that if the central bank wants it, it can have it. And then the government spreads declined and things were relatively stable. And then, during the COVID crisis, the ECB essentially preemptively set up these funds to make clear that they will not want a replay of the Euro crisis. And related to that is the question of should the central bank fund governments? Should they fund it directly? Should we use monetary expansion to finance public programs? And the answer to this is that it depends on circumstances. Of course you can, there’s nothing wrong with it. That’s how we fix whatever fixing we did with the global financial crisis. And that is, again, what happened during COVID. Once the government does substantial expansion because of their social needs, whether that’s because of the crisis or because of a pandemic, of course, you can do it and it does not cause inflation or any other horrible things.

Now, that said, there is a bit of a delicate thing if you open those floodgates, because then essentially, every politician could potentially take the central bank for whatever interests they have, which often would not be progressive. So it is clearly delicate. But economically, it depends on how big the social problems are, how big unemployment is, and whether that works or doesn’t work. So if you think of decarbonizing the economy, we need a massive investment program beyond the scale of what we’re currently making. If we want to meet climate targets, of course, you should use central bank funding. In a way, it’s a no brainer. I mean, if there are massive needs, you can do it unless you’re at full employment, which is very clearly a point where it would crowd out other activities. But if we are reaching full employment, and we are not on track of the decarbonisation of the economy, you have to shift employment. So even under these circumstances, I would support it. If inflation is the price of shifting away from fossil fuels, then so be it. Okay, that was the point about central banks and that is probably most important. I could also talk about changes in the financial sector, but I think in the interest of time, I will not do that. But trust that this was interesting enough,

William Saas: We would probably love to talk to you for a few more hours. This has been amazing. I wonder if you could close us out with maybe a word to our comrades, the Marxist folks who may remain resistant to the idea that these ideas and insights that Woytinsky and you talk about, in terms of the positive role of the state, potentially work. I think part of the ongoing skepticism, and you acknowledge this as part of the constraint at the time when Woytinsky and Hilferding were operative, was the political constraints. And to represent the Marxist position in a way that I think is as full and fair as it can be, it’s informed by a profound skepticism of the sort of ability or willingness of the political class elites and capitalists to go along with it. And then, in fact, that public employment programs along the lines that we’re talking about here, and that Woytinsky was advocating for, some people may have seen that clearly, or may see that clearly today, as something that could result in something more socialist and oppose it on those grounds, articulated or not. For our Marxist friends, a note of hope and, I don’t know, optimism. If you could leave us on that note, that would be excellent.

Engelbert Stockhammer: I guess the entry point there is Kalecki’s famous 1943 paper, “The Political Aspects of Full Employment,” where he’s essentially making the argument that if you want, you can create full employment. In that sense, he’s fully learned the Keynesian lesson. And he says, technically, it’s not a problem. We know how to do it. The constraints ultimately are political. Politically, the ruling classes will not want sustained full employment, essentially, because it shifts the bargaining power too much to workers. And there’s certainly some truth to that argument. And to some extent, you may argue that was hidden in the course of the long boom of Fordism where some sections of capitalists got increasingly skeptical. I would still even argue the other. Actually, it wasn’t so much industry. It was finance that wanted to move away from Fordism and Keynesianism. The big companies, in particular, the ones going from mass consumption, actually weren’t that hostile initially, but could also live with neoliberalism. That’s a digression. The important point is Kalecki infers from that, once you’ve reached full employment, you need further institutional change. And I think that’s the crucial point: what is the change that we need? For a lot of Marxist comrades, they come with the Kalecki paper as an end of the debate. They come and say, we already told you the capitalists aren’t gonna like it. That’s why it’s not gonna happen.

William Saas: 100%.

Scott Ferguson: So let’s give up.

Engelbert Stockhammer: If that’s what they say, then they have to own up to what Hilferding said. Then, you have to let the crisis play out. Otherwise, you need a rather, I’m tempted to say, almost naive picture of the revolution that you could clear the table from all the institutions that we have here. When we do a revolution–maybe I should say if–we will have to work with the institutions that we have to some extent. Some of them will be fully replaced, but a lot of them will not. Yeah, we have to. So in a way, in my view, the circumstances for revolution are based in a situation that you hit in the late 60s and early 70s, with relatively full employment and strong labor movements. It’s there where you need further institutional change embedded in society that will require changes in the workplace, economic democracy, and what have you. But it will also involve a lot of changes in the financial sector. It obviously will also require changes in state structures. But that is where we have to get. Because if you think that you can really change the power balance and take state power away from capitalists, you can also do that within these structures that will anyways not magically disappear. Even with neoliberalism after 30 years there are bigger states than before. With the revolution, that will not go away. We will be left with massive state structures. And socialists, a strategy on how to deal with it is not say, “Oh, it’s capitalist, we’re not going to deal with it.”

William Saas: Engelbert Stockhammer, thank you so much for joining us on Money on the Left.

Engelbert Stockhammer: Great, that was fun!

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

The ECASH Act with Rohan Grey (New Transcript!)

In this special episode, Rohan Grey (@rohangrey) joins Billy Saas  (@billysaas)  and Maxximilian Seijo  (@MaxSeijo) to discuss the “ECASH” or “Electronic Currency and Secure Hardware” Act. Introduced by Rep. Stephen Lynch (MA-08), Chair of the House Committee on Financial Services’ Task Force on Financial Technology, and based on Grey’s research on electronic currency, the ECASH Act directs the Secretary of the Treasury to develop and pilot digital dollar technologies that replicate the privacy-respecting features of physical cash. Recognizing the United States Treasury as an institution ideally suited to managing a digital U.S. dollar, the Act treats monetary inclusion and privacy as a political rights and public goods, while at the same time eschewing the exclusionary and ecologically destructive effects of crypto currencies that rely on blockchain technologies.

The ECASH Act is co-sponsored by Rep.’s Jesús G. “Chuy” García (IL-04), Rashida Tlaib (MI-13), Ayanna Pressley (MA-07), and Alma Adams (NC-12) of the Committee on Financial Services, and endorsed by Americans for Financial Reform, Demand Progress, the Action Center on Race and the Economy (ACRE), and Public Money Action.

Rohan Grey is Assistant Professor of Law in the College of Law at Willamette University.

Full text of the E-CASH Bill

E-CASH website

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Music by Nahneen Kula:


Maxximilian Seijo: Rohan Grey, it’s great to have you back on Money on the Left.

Rohan Grey: Thanks for having me.

William Saas: So last time we spoke in fall, a lot was going on, and particularly around the debt ceiling debates. We discussed the trillion dollar coin proposal, which you’ve done a lot of work and research on, and which entails the US president animating and channeling the money creating authority of the US Treasury to avert financial apocalypse. This time, we’re having you back to talk about an exciting new proposal. And that is the Electronic Currency and Secure Hardware (ECASH) Act (H.R. 7231), which was introduced today by Representative Stephen Lynch of Massachusetts, who also serves as chairman on the task force of financial technology. So I think in a way, like #MintTheCoin, Congressperson Lynch’s ECASH proposal entails recognizing and using the money creating authority of the Treasury, motivated this time toward less spectacular and very different, very urgent ends. So can you tell us a bit about your work on the bill and how you understand the nature of the US Treasuries claim on the digital dollar? And what does this proposal have to offer users of US dollars?

Rohan Grey: Yeah, I mean, there’s actually an interesting additional connection to the #MintTheCoin story, which is that one of the probably first very vocal advocates for a treasury issued cash-like version of a digital dollar was the former director of the US Mint, Philip Diehl. And he made that proposal not in the last five years, but back all the way in 1997 in a congressional hearing on the future of money, where he was essentially arguing that we need to look to the future of money. We’ve just done big internet regulation bills, like the Telecommunications Act of 1996. And now we need to look at what the future of money is going to look like. And he made the argument at that point and in that committee that the Mint is the agency that has historically made hardware-based forms of a privacy respecting dollar. The coin is the most privacy respecting form of money we’ve ever created. You can hold it in your pocket, it doesn’t have a barcode, there’s no identifying features, and you can carry it wherever you go. 

The idea at that point was that we could use prepaid debit cards, magnetic chip-and-pin card technology, to hold balances of currency directly, like we do with coins in our wallet. Today, that’s the similar kind of logic that we’re bringing back to the conversation. Right now, around the world, the debate over how to create a government digital currency has been almost exclusively defined in terms of a central bank digital currency, or a CBDC. That term sounds very technical, it sounds very wonky, but it says nothing other than the central bank is going to issue it. It doesn’t tell you how it’s going to be designed. It doesn’t tell you who it’s going to be for. It doesn’t tell you why it’s being issued. All it says is: we’re in charge. But it creates this very perverse dynamic because the central bank says, “We don’t know what it’s going to look like, but we’re going to issue it.” And then, in the next breath, they say, “Well, when it comes to the design, we don’t have any experience doing retail services. We don’t work with the public so we probably shouldn’t design it that way. And, of course, Congress gets to make the decision on how it should be designed, but we think it shouldn’t have these features, XYZ, like anonymity.”

So suddenly, by the simple act of calling it a CBDC, even though that term has no content whatsoever, you’ve already narrowed the ideological, imaginative space around what we’re trying to do with a digital dollar. So what this proposal is doing that is different from the conversation we’ve had up until now is to say, let central bankers continue their conversation and we’re going to have a separate parallel conversation. We’re going to have a conversation around a form of digital dollar that is like physical currency, it’s like coins and notes, and it works differently to the kind that central bankers are really interested in. Not in competition, not in some sort of zero-sum fight to the death, there can only be one, like Highlander, but in the sense that we’ve always had multiple forms of money. They’ve always existed in parallel. You open your wallet right now, you might have some cash, debit cards, credit cards, and maybe a prepaid gift card or a Starbucks card. We’ve always had different options.

This is simply preserving that kind of pluralism and institutional, ecumenical approach to government currency design as we go into this digital dollar debate. But the Treasury, historically, has the capacity to do hardware security technologies. Coins and paper currency have existed for a long time before the Federal Reserve was ever established. The Federal Reserve manages accounts, but the Treasury is responsible for anything that is designed to go directly to the public held in your hand and in your pocket. That’s true of both coins, which the mint was established very shortly after the Constitution was ratified. Then, the Bureau of Engraving and Printing was established in the 1860s, 50 years before the Fed. More recently, the Treasury does prepaid cards. It sends out snap cards, EBT cards, and all that kind of stuff. So if you were being objective, and you hadn’t already had your ideological blinkers narrowed by the CBDC discourse, you would say, “Hey, we want to issue a form of digital cash. Who’s best positioned to do that?” I think, objectively, you would end up at the Treasury. So the question of why the Treasury, I think, is always kind of backwards. Why shouldn’t we be doing it with the Treasury? It’s the obvious place to start. The only answer to why not would be central bank ideological dominance, frankly.

Maxximilian Seijo: Perhaps we can dig into a little bit of these details of what the Treasury would be doing under this proposal. We have in our notes here that only one of the three pilot programs in the proposal uses anything like a distributed ledger. So I guess, maybe as a way of getting into that, why so little love for the blockchain in this ECASH Act?

Rohan Grey: See, I would have said, we’ve actually given a lot of love to the blockchain, because we’re even giving one option to be blockchain-based, when in fact, this technology, and the use cases that we’re trying to establish, shouldn’t be using any ledger at all. If you think about cash, there are a lot of different reasons why people like to use cash. They like the simplicity of it, the resilience, you can use it offline, you don’t need an internet connection, it’s not going to run out of battery, you don’t need permission, and it’s not keeping a record. But I think one of the things that defines cash is that there is no third party involved. There’s no permission you need to ask once the cash gets issued. We’re not talking about a private cryptocurrency, where the issuance itself is based on some pseudo gold standard, mining logic. We’re talking about a publicly issued dollar, where the amount and who it gets issued to is still a matter of collective governance. But once the money is out there, once it’s issued, it has its own locus of gravity.

You can’t have the government back door shut it down afterwards. Once it’s out of your mouth, it takes on its own life, so to speak. And in this situation, in order for that to exist, you need to think about how to not simply distribute a ledger, but have no ledger whatsoever. I forget who it was, but one of the poets said, “Silence is the most beautiful language.” Because everyone else has to compete against the most perfect language where you can say things without any words at all. And this idea of a centralized ledger versus a distributed ledger is a question of, well, we need someone to keep the records. Who do we trust? Do we trust Big Daddy’s central government? Or do we trust the wisdom of the crowd or something? And the reality is that that’s an interesting conversation. But there’s a whole separate conversation, which is, what if we don’t want a record at all? What if we want to go dark? What if we want to actually just have this transaction to exist ephemerally in the moment, and then it’s done. And the only record is that the ownership of these instruments has changed on the other side.

Maxximilian Seijo: I think what’s so interesting about what you’re saying, too, and something to highlight, because I can imagine a lot of people getting really mad at this for a lot of different reasons, that maybe they don’t even really fully know why they’re mad at it, but the thing that stands out to me when you describe it is the pluralist approach. This necessity for having multiple forms of money that have multiple structures, that have a ledger attached, or even not attached to them. And how with certain aspects of society, there’s something necessary about providing space in different forms of money, and different ways of securing the hardware of the currency. I was wondering if maybe you could talk a little bit more about why that’s necessary?

Rohan Grey: Yeah, and we designed this initially to be a pilot, because this is still very early days. We need to actually have a conversation as a public about this. And one of the things is that, because central banks have dominated the conversation up until now, they’ve sent a pretty clear message to the industry about what they’re looking for. So when you’re looking at people out there who are proposing technologies to sell to central banks, to provide services to central banks issuing digital currency, interested in digital currency, right now, most central banks have said we want something that’s likely to be account based. It’s likely to involve intermediaries, it’s likely to be a two tier system where we’re not going to manage the last mile service, that’s going to be someone else. And the technology companies have heard that, and they’ve responded and marketed accordingly. But one of the things about this pilot program is essentially to say, look, there’s a whole separate segment of the market that we’re interested in supporting. There’s a whole separate segment of production. Take markets out of it. We want this kind of technology. If you’re interested in building it, then we’re interested in buying it, essentially.

And to open up this space for technologists to know that there’s interest in it for them to pursue. But we did keep it relatively agnostic at this stage, because there are different models. For example, prepaid cards have a different threat model than cell phones. They have a different set of use cases with a prepaid card. It’s a single-use piece of hardware. With your phone, you may be using the trusting environment on the phone or the SIM card, whatever it may be, but you’ve also got all these other applications and other ways that your phone can have your hardware security compromised. So we’re being ecumenical at this point by saying, let’s let the tech companies and let’s let people who’ve got interesting ventures on this front. I hope nonprofits and open source collectives will be a huge part of that. Let’s let them come up with things. Let’s fund it. Let’s see what the variety is. And this is why, even though I think at a kind of technical specs level, it’s almost antithetical to have a blockchain or ledger. We’ve even kept the option that if somebody can demonstrate a use case or a model where that could work, we’ll keep an open mind about it here.

But the goal is to be very clear that this is supposed to have the features of cash. There are account based technologies that are important. They should be pursued in other contexts, and certainly in the CBDC conversation. But here, we’re specifically looking for something that can have the functional specifications as close to cash. The other thing is that all technologies are vulnerable. There’s no perfectly secure system. So we’re not trying to propose here that hardware security is perfect or flawless. There are well known risks. But one of the elements here is that, if you design it with quantitative limits on each device, like we have with denominations of physical currency–we don’t have $100,000 Bill anymore–even though I might want a trillion dollar coin, I’m not suggesting that we’d be using them at the vending machines. So there will be some baked in limits to how bad counterfeiting could get at scale.

You would still need 10,000 cards shipped in big boxes and crates, or prepaid cell phones by the dozen, to benefit from counterfeiting at scale. But I think the other thing is that, when we’re talking about the scale of the political risks and political stakes at play here, that is to say, privacy, civil liberties, respect for tolerance, respect for dissent, those are such important values that, if we have to deal with a little bit of risk of counterfeiting, that’s fine. We’ve been doing that for centuries. The Secret Service protects the currency first and the president second. So I think the idea that we need to have a perfectly secure currency to be worthwhile is that technical model is not true. And that as long as we can keep the risk profile from being absolutely catastrophic, then the privacy benefits are worth pursuing this as one option.

William Saas: So the proposal is motivated by two moves that are, I think, going to strike a lot of people as immediately counterintuitive. One is that it should be the Treasury rather than the central bank. And then, two,  there would not be a preference for, or prioritization of, or even special consideration of, the blockchain or distributed ledger over something else to make counterfeiting impossible and to guarantee security, which is illusory, right? So I love that we’ve gotten quickly into the weeds. And we’re going to have a link to as much information about this proposal as we can in the show notes. But I think it would be really useful for us and for listeners to have a bird’s eye view of what this proposal will look like if it is enacted, and from the pilot stages to that final moment of secure hardware. You talk about cards and then prepaid cell phones. Maybe take us from the legislation to the hands of consumers.

Rohan Grey: Yeah, sure, thanks. So the first thing is, due to your original observation, I think when we look at policy constraints that are also political or technical, we often take one particular constraint as the starting point for our inquiry, and then everything else is assumed to be less important than that constraint. So to give an example from a world we’re all familiar with, politicians will say it’s really hard to sell deficit and budget politics, so I don’t want to do it. And then, you end up having all these incredibly complicated conversations about how we’re going to get pay-fors, how we’re going to get the taxes, etc. And it may be that half of those political challenges are even more complicated than simply teaching people about deficit politics. But because you started from the idea that that was too hard, you end up doing things that are much, much harder to compensate. So in this debate, we often have a situation where people say, well, anonymous cash is impossible, politically. We can’t sell it. And then, we end up having these extremely convoluted conversations about how to balance privacy and national security and all these different interests that are often much more complicated than if we had just started from the outset and said, “Look, it is going to be hard to fight for this, but it’s actually really important.” 

So all of that is just to give a precursor of the reason why this bill feels so different to everything else. It is because we aren’t making that initial political compromise that then makes all the other decisions really bad or really difficult. They say hard cases make bad law. Well hard compromises make bad further down the road policy decisions. But to go in the bill itself, first of all, the bill would be funded directly through money issuance. There’s no taxes funding it and there’s no national debt. The Treasury would spend the money, the funds would come out of a special account established at the Fed that would basically be like a permanent overdraft account. Any overdrafts incurred by the Treasury would not count towards a national debt. It would be at the Treasury’s discretion how much to spend, and the Federal Reserve would book any losses on that account and any overdrafts that it maintains for the Treasury, separate from the rest of its budget. So it wouldn’t affect any remittances back to the Treasury and it wouldn’t affect the net operating surplus that it returns. So that money would then go towards funding pilot programs. 

Those pilot programs would be overseen by a new position, which is a director of what’s called the Economic Currency Innovation program. That director would have relatively wide authority under the Treasury Secretary. They would coordinate with a larger digital currency group that consisted of other agency heads and other important government officials across the government, including chief technology officers and things like that. There would also be, in addition to the Economic Currency Innovation program director, a monetary privacy board. And essentially, independent privacy experts would oversee the process and periodically conduct audits and reviews and release their findings to the public. Their job would be to essentially keep the system honest and oversee it from a privacy and stakeholder-oriented perspective. The bill itself, in addition to establishing pilots, defines what a digital currency would be. So it says what ECASH would be as a specific form of digital currency. So it’d be legal tender.

It would be a bearer instrument, which means whoever holds it, is the owner of it considered legally. It would be not based on a ledger so that the value would be stored on the physical instrument, on the physical device. And it would be capable of being held by the public without any fees, fines, and things like that. And merchants would be required to accept it to the same degree as they’re required to accept physical currency. So they couldn’t unfairly penalize people who were trying to pay with this instrument. The pilot program is set up in two phases. There is an initial phase, which is a proof of concept phase, where the Treasury would select three pilots of which two, at the very minimum, would involve some sort of debit card or prepaid chip card capacity. And then, at least one would require phone based capacity. So we left the option open for someone to come up with a ledger based system if they really can show how it can meet the broader specification needs of cash, i.e. offline capacity.

And then, after that initial set of pilots that would take place, I think, within about a year, there would be a write up, a report, a review of what went right and wrong, and then there would be a larger scale rollout pilot, presumably in collaboration with another government agency, or a state or local government, something like an EBT card program or an economic cash program. For example, you could imagine, not that I support it as a policy, but Gavin Newsom’s gas tax rebate card could be a good example of how you might pilot something like this. And that’s the sort of second phase pilot. And the idea is to keep a relatively tight timeframe on this. Obviously, if things need to be stretched out, because of technical considerations, that’s fine. But the goal is to not have this due in 2035 or something, but to be relatively soon, because in the world of technology, five years is infinity.

Maxximilian Seijo: So now that listeners maybe have a sense of not only what’s in the bill, but also like the certain considerations that went into drafting it, I think, a question that comes up is, who are the political coalition’s involved? And how is this gonna play out? Maybe you can talk a little bit about the stakeholders and where the political will for passing this might come from?

William Saas: Anyone can create an ECASH Act, the problem is getting accepted.

Rohan Grey: Yeah, from your mouth to God’s ears. I think this is a really interesting part of this bill. In addition to this institutional move, where we took it outside of the CBDC conversation to start a whole separate conversation to say, “Look, you’ve done a really great job as central bankers around the world defining this term CBDC to be exactly what you want it to be while still giving the appearance you haven’t made any decisions yet. We’re still considering every option as long as they’re black. And you’re in charge of creating an instrument that we’ve defined the parameters of.” This kind of debate. But in addition to that institutional move, there is also a political move, which is that if you look at the broader crypto conversation right now, a lot of it is taking place on this vector that I find to be very problematic, which is that a lot of the kind of industry people–the liberal crypto advocates–have positioned themselves as the only ones doing anything. They’re the only ones doing something new. We’re the ones trying to fix problems. Have you tried to use the payment system? It’s slow, it leaves people out. It’s exploitative, blah, blah, blah, blah, blah. Look how much better the things that we’re trying to create are going to be.

And then, the progressive response is, you’re lying. You’re a fraud. You’re a charlatan. You’re making it up. But it comes across as a combination of sour grapes and being the party of “No!” William Buckley talks about standing on top of history shouting, “No!” or shouting, “Stop!” There’s almost that vibe. It’s a bit reactionary in its opposition. And I think part of that is because you’re trying to fight something with nothing. Unless you actually have a progressive vision of the future that’s stronger, unless you want to own the future of technology, of where we’re going, then you sound like somebody that thinks the status quo is okay. Even if you don’t, that’s the dynamic. So I think it’s been really problematic that the only vision that people have at a mass level for the future of money in an exciting way is this crypto vision. And one of the big ways that that gets justified is that the government alternatives are pro-surveillance. They’re not your friends. You’re putting a dangerous device in your pocket, just like we had now come to realize with Facebook and Google and things. What we thought were more benign turned out to be malicious.

So this coalition, I think, is a combination of people that recognize that the ability to use cash or cash, like transactional freedom, is really important for marginalized populations. So sex workers, marijuana businesses, people in the gray economy, undocumented people, people working in the informal economy, all of those kinds of people, but also political dissidents. Palestinian activists who don’t want Venmo to shut down their donations. People who are trying to engage in political dissent, who don’t want the racist governor of Alabama getting the list of all of their political donors to the NAACP in the 1950s, which was a real Supreme Court case. So those kinds of things, where we don’t want the money to be a tool of oppression, I think brings or should bring progressives to the table. Then, you’ve got privacy advocates. You’ve got people that care about tech privacy in general. The ACLU and civil liberties groups who should have been on this for a long time, but have not been because money has been scary as a topic–it’s hard enough to get your head around technology to get your head around money as well.

But then, interestingly enough, and God forbid I would ever say I want to have a bipartisan coalition, you have the kind of libertarians who are true believers. Now, I think they are a vanishingly small subset of the community, but those for whom they definitely prefer private sector solutions, they definitely prefer crypto. But if they were going to have to have a government digital currency, they  would probably prefer one like this. So they understand that from a pro-privacy point of view, that cash is very important. And even if they don’t like the government, they like having more privacy in their money than not. So I think you’re going to get some people on that front. Then, the last group of the people are those who’ve been opportunistically opposing other government options, who have been using the surveillance talking point as a stalking horse, as a way to bash CBDCs, which I think is a valid criticism. Now, whether they’re actually serious in saying they would prefer a privacy respecting alternative, I’m not very confident about, but this will at least give them an opportunity to show that they were something other than cynical, duplicitous liars. So we’ll see. But I think there could be a relatively wide coalition here of people who oppose government domination, or corporate domination, who believe in privacy and the ability of using money in ways that authorities might not approve of as being an important form of political freedom.

William Saas: So in terms of actual members of Congress who might be in support of this, we have Stephen Lynch. We also have Chuy Garcia?

Rohan Grey: Yeah, notably, Stephen Lynch is a moderate. He represents a relatively blue collar district, but he intuitively understands the benefit of opening up a conversation around the Treasury, rather than the Fed. He intuitively understands the value of preserving cash. He knows that this isn’t radical in the sense of a departure from the status quo. This is protecting freedoms that we’ve had for thousands of years so that they don’t get crushed in a sociological transformation towards a more digital society. So we’ve got moderates there. The original ECASH proposal that was in a much shorter form was actually the ABC ACT that I worked on as well with Congresswomen Rashida Tlaib and Pramila Jayapal. And about 19 other progressives signed on board, including Chuy Garcia and others. So Congresswoman Tlaib is a co-sponsor of this bill. Congresswoman Presley is a co-sponsor. I think other progressives are going to get on board. There have been other people in the Senate side who are supportive as well, who care about privacy and care about a public option.

In my experience, when we talk to progressives, they often haven’t considered this issue. But when we explain it to them, they go, “Oh, that makes sense, we should definitely have that.” Now, the way you’re going to lose people in this coalition are going to be those who care a lot about surveillance, who care a lot about anti-money laundering and KYC, and who see this as a step backwards. Because for them the War on Cash is a positive development. It’s a good thing that we have more surveillance, that we have the ability to create backdoors, to freeze accounts, and all those kinds of things. So they see the current inertia, which is towards the inevitable death by attrition of cash, as a good inertia. And anything that arrests that inertia is bad. So the opposition is going to come from people who are quite comfortable with the fact that cash is dying and don’t really want to resuscitate it.

William Saas: Because it’s dirty and can be used for dirty things.

Rohan Grey: Yeah, bad people use bad money. If you’re a good upstanding citizen, you’ve got nothing to hide,

William Saas: There’s nothing wrong with that logic.

Rohan Grey: No, famously, societies where every political leader is expected to have no vices at all never have their own political vulnerabilities.

William Saas: So I’m trying to imagine the scene of the dissident using this digital dollar, or ECASH electronic currency. What is the hardware that they might be using? I know there’s going to be lots of experimentation.

Rohan Grey: They could be using a prepaid card that might have an E-Ink display. It might have a few really basic buttons on it like something that looks like the remote that you might program your air conditioner with or something.

William Saas: Hopefully, a little more sturdy.

Rohan Grey: But yeah, there are already versions of those kinds of chip cards in China, and elsewhere, all the way back to the 1990s were the earliest forms of government pre-stored value cards. We also see similar kinds of stored value card technology with transit cards, things like that, currently in operation. But you could imagine something where you essentially tap that card using some sort of near field communication. You could maybe put some numbers into the card to say I want to send $25. The card then produces a unique 10 digit code. You can then type that code into someone else’s card and it will receive the funds. That’s one option. You could also have essentially an app on your phone that integrates an ECASH wallet on the phone with accounts that are managed remotely and in a ledger-based system somewhere else in a server. So that you pull up the app on your phone. It’s called your money app, and it has a checking account, credit card account, and a cash account. And if you want to transfer balances to your ECASH account, in a cash wallet, you simply go withdraw $100 from my checking account, your bank debits your account, and it’s the equivalent of if you walked into the bank and asked for a $100 note. They take it from their E cash balance. If they need more ECASH from the government, they buy it, the government debits their reserve account, gives them the equivalent of pallets of cash, and the armored truck comes and delivers them to the safe. This is all just happening remotely with software now.

William Saas: Can they animate a Brink’s truck on your card, maybe?

Rohan Grey: Yeah, that’s right. You see a little armored truck go from your bank app horizontal bar down to your cash app horizontal bar, and then the value appears there. And then, if you want to make a transaction to someone else’s phone, you can either send them a text message with the code, or you can tap the phone next to each other or whatever else. Merchant point of sale terminals, we demanded that the bill require the technology to be interoperable. So in the future, it would be simply you have a terminal and it says, would you like to pay with checking, credit, or ECASH? You press ECASH and it taps your balance, etc. And that can happen offline. It can happen with something that has no battery other than kinetically powered. There are wearable tech now things where the low powered chips get powered by movement and by you touching it, those kinds of things. So you can imagine all sorts of ways that that low powered hardware can continue to function without a battery or something like that.

William Saas: Speaking of low powered hardware, how many Nvidia graphics cards are going to be needed for the Treasury to roll out this program?

Rohan Grey: Yeah, I mean, this is one of the funny things. If you go back to that 90s moment, when I was saying before with Philip Diehl was testifying in Congress in the mid 90s, you had initiatives like Mondex, which was a bank initiative to create a stored value card. You had initiatives like Avant card at the Central Bank of Finland. But I think it was one of those moments where it’s wrong to be right too soon. So the conversation around money hadn’t caught up to the conversation around the internet, essentially. So when people were experimenting then with stored value cards, there just wasn’t that much government interest in them. And eventually, the technologists said, this isn’t going to work for us, we went a different direction. And the way that they went, because a lot of them were kind of libertarian, oriented in the Cypherpunk movement, unfortunately, they went into we’ll create our own money. Up until that point, it was we’re going to use the public money, but we’re going to create privacy respecting payments technology. And now it was, well, the government’s not going to meet us halfway. So we’re just going to create our own private money. And then, that way, we’ve closed the loop where private money and private tech can do the whole thing.

Now, of course, the problem is that you then need a theory of decentralized issuance. You need a kind of theory of fiscal and monetary policy to go with your payments theory. And that’s where you end up in these incoherent libertarian, we can do it in the private sector, there is no collective governance, bullshit. And it creates a technical problem, because you now need to solve not only decentralized payments, but decentralized issuance, and that’s where you get to mining and all of that kind of stuff. But if you have a public hardware based system, then you can have trusted issuance, and then the hardware is only doing the payments processing. It’s actually a much smaller technical problem to solve when you’re not simultaneously trying to solve the money problem as well as the payments problem.

Maxximilian Seijo: And from a technical perspective, too, I think, as you’re saying, this is interesting as a way of connecting up these ideological presuppositions about money and opening up a conversation to the design of money and the creation of money around a public and democratic ideals-based paradigm. And opening up what it means to have political freedom, as you said. And it’s interesting to see that in line, historically, with the moment of politicizing money, generally speaking. It feels like an important theoretical step in connecting up some of these problems.

Rohan Grey: Yeah, I mean, you all have done a great job of talking about queering money and the way that money can be a site of people to provide alternative modes of being, to demonstrate, and to experiment. In order for that to happen, the money itself needs to have some degree of tolerance for pluralism. We created the public money to serve these collective and social goals. But separately, it can also serve these goals that no one expected, no one planned for, but we’re improvising because we’ve got a few minutes in between rehearsals and that kind of stuff. As long as the studio isn’t shut down and we haven’t been kicked outside, then we’ve still got access to the materials. We can still play the instruments together while we’re in the room waiting. So this kind of technology is a way of saying, look, it’s still public, but it’s public with a little bit of space for you to define that around the edges. You, as an individual, all the way down to the individual node in the social organism, you can have the freedom and autonomy to offer a contribution to how you think this thing should look like, even if it’s different to how we have collectively decided up until now. It’s that balancing of the consensus versus the individual editor on the Wikipedia page.

And in that respect, I think, not to sound like this is super nuanced, but up until now, we’ve been having this conversation where the dichotomy is public money and private money. And we have confused the word private money there with privacy money. We think they’re the same. But really, at the very least, we should be thinking of a four box, two dimensional kind of thing, where you’ve got public money and private money, and then privacy respecting money and non-privacy respecting money. And as long as the public, the cultural imagination, is stuck between a public surveillance coin, and a privacy libertarian coin, I think we’re fucked. I think we’re in a bad place. I think we’re gonna continue to go in a bad direction for the future of money. But if we can get the conversation up between a privacy respecting public money and the other two, then we can see how privacy respecting public money is better than a government surveillance coin. And privacy respecting public money is better than pseudo-privacy respecting private money, and in fact, may actually be better at serving that privacy function, because of the features of public money, not despite them.

Maxximilian Seijo: That point about the construction of the antagonism between public and private in a vacuum without these other complex variables for thinking about the way we participate with money is so key. So yeah, thanks for the work that you put into opening up this conversation, both theoretically, and then, obviously, also technologically.

Rohan Grey: I think, obviously, none of us are so naive as to think that writing a piece of legislation is the same as making social change, but this is a form of intervention. And I think it’s a show don’t tell kind of model, because we’ve been trying to explain this idea to people for years, but sometimes you just need to really articulate the future. I mean, my wife loves The Dispossessed: An Ambiguous Utopia by Ursula Le Guin. And one of the reasons she loves it so much is just because she’s so good at explaining a whole world and making it actually seem viable, that something so fundamentally different could work. It’s not just once upon a time, there was a wood cutter and you’re like, well, wait a second, does he have healthcare? Does he see his relatives in other places? Is there a train line to the Sleeping Beauty story? But if you tell a story with enough detail, suddenly, that imagination can become real. So something like this bill is a way of saying get over that imaginative hump. This can happen. It’s a viable future. We just have to choose it.

Maxximilian Seijo: Not to go too far down a digression about The Dispossessed, but I read it again recently. And for fans, I was taken by Anarres, one of the more utopian planets. In the book, there’s so much, I guess you could call it, money in that utopian space in a way that I think is counterintuitive to people. But it’s because it’s money in a different way than we understand money operating in our world. So yeah, I like that you brought that up. It’s a great example.

William Saas: For sure. So I’m looking at the fact sheet that folks can also look at, I presume. And I’m seeing some great stuff here. We’re talking about the possibilities of something like this for achieving something maybe not utopia, but a more just order. So we have on this list of the features of ECASH, legal tender, which we’ve talked about, financial inclusion, and an emphasis on prioritizing technologies that promote universal access and usability, especially for folks with disabilities, low income individuals, and communities with limited access to internet or telecom networks. Privacy, we’ve talked a lot about that. Consumer protection, some regulatory details, and then some transparency and oversight functions. I don’t see anything here about fighting inflation or winning the war with Ukraine. So I’m joking, but at the same time, this is the context that we’re entering into.

Rohan Grey: Yeah, I think the first thing is that, in terms of the actual spending on the bill, we’re going to be talking about, maybe in the wildest dreams, a few 100 million dollars for these pilots and things. I mean, it’s a rounding error when it comes to actual real resource costs. What we’re going to be having and subsidizing like 15 computer programmers and a couple of computer manufacturers. But on the Ukraine question, I think it’s a really interesting moment, because there is this duality or tension with how people are understanding the role of things like crypto and financial sanctions right now. Because, on one hand, it’s nice to know that we don’t have to start nuking Russia to impose some warfare on them. If we have to go to war with someone, God forbid, the idea that we’re doing that with these soft financial means, rather than literally destroying the planet, seems like at some level a kind of relief. But on the other hand, what are economic sanctions? Every progressive has known for years, they’re painful, they hurt the most vulnerable, they don’t necessarily work, etc.

So, on one hand, it’s like, well, thank God, we’re not sending in shock troops. On the other hand, it’s financial warfare forever. That’s a terrible, bleak future as well. And then, conversely, people are saying, isn’t it amazing that people are supporting the people of Ukraine with cryptocurrency. So suddenly, the ability to subvert financial sanctions is also a good thing right now. We like financial sanctions against Russia, but we don’t really. And then, we like evading financial constraints with crypto, but we also don’t really like crypto. So it’s a very weird moment where I think the public is having to deal with a lot of ambiguous conflicting feelings. And that’s a productive space to be in because it problematizes a lot of these very morally clean binaries between criminals and average people, or the cops and the robbers and this kind of stuff. The reality is that there are bad uses of cash and there are good uses of cash. And there are downsides to having political freedom and there are good sides.

But if you think about it like a pen and paper, pen and paper in the wrong hands can be extremely dangerous. And in the right hands, it can be extremely liberatory. I think the question is, do we want to start from a world where we assume that access to a pen and paper can be controlled by somebody else? Maybe that’s not actually a question we want to ask ourselves, because how do we want to control people’s access to pen and paper gets us in a very dangerous headspace. So I think the Ukraine moment is at least going to be a more interesting context for having this conversation than the traditional four horsemen of the apocalypse, of the internet, that everybody loves to talk about, which is money laundering, terrorism, child pornography, and drugs. So if people think of censorship resistant money, and they immediately go to political dissidents, that’s probably a better starting point than what would have happened before all of this.

William Saas: Did I just hear you say that the ECASH Act might help to highlight and resolve the contradictions of late, imperial capitalism?

Rohan Grey: Well, yeah, maybe heighten. I’m not sure about resolving, but it certainly brings them into relief. And I think, just like with climate, it takes a climate apocalypse being literally on the doorstep for people to start thinking what a better world might look like at scale. I think the idea that we’re standing on the doorstep of a totalitarian surveillance dystopia with our digital money gives us a bit of space to imagine just what we really need and what’s really important for a future monetary system. And it’s this idea that we’ve actually been losing the war on cash for a while, I’d say since the 70s. It’s been a slow drip, drip, drip, war of attrition, that they’ve been winning. And I’m not happy that we seem to be on the precipice of building a surveillance panopticon that’s going to be the future of everything. But it’s also at least not drip, drip, dripping all the way to extinction.

And I don’t think I consider myself an accelerationist in general, but I think it’s one of these moments where, I didn’t choose accelerationism, it’s been chosen for us. And this is the kind of moment we get to deal with that. But after the last decade of watching how people’s thoughts changed after the global financial crisis, how the debate around crypto changed the debate around FinTech, how the debate around stable coins got changed by Libra, and now how the debate around privacy may be changed by this, I think there is a sense in which these antagonistic trends can open up space for new vectors for political organizing, consciousness building, and things like that. I think whatever else is gonna come out of this, a lot of journalists, a lot of commentators, and a lot of people thinking about digital currency, are now going to know that there’s another battlefront to fight here.

Maxximilian Seijo: Well, Rohan, thanks again for coming on Money on the Left. And I’m sure we’ll have you back on sometime for some other thing that you’re working on. Because you’re certainly working on a lot of things.

William Saas: Well, hopefully, we’ll talk about this, right? It’s a live thing.

Rohan Grey: Yeah, we’ll talk about the pilots and how they’re running, etc.

Maximilian Seijo: But yeah, thanks so much. And for listeners, we’ll have links to everything that we’ve discussed in the description.

William Saas: And listen to Rohan on the upcoming Odd Lots episode.

Rohan Grey: Thanks a lot, guys. It’s always a pleasure. Take it easy.