Introducing Medium: Femme

Co-hosted by Natalie Smith & Charlotte Tavan, Medium: Femme explores under-appreciated feminine and queer modes of knowing in left culture and political economy, carrying the broader project of the Money on the Left Editorial Collective into quotidian relations, meanings, and practices.

Crowdfunding Christmas (Essay)

by Scott Ferguson

It’s a Wonderful Life has long been a holiday classic. A 1946 Christmas fantasy by director Frank Capra, the film is a sentimental portrait of communal altruism in the face of economic crisis and existential despair. Every Christmas, millions of viewers ritually revisit the movie to reflect upon the season’s spirit of giving.

From the perspective of Modern Monetary Theory (MMT), however, the film’s yearly returns seem more like a perennial nightmare. Whereas MMT insists that money is a limitless public instrument and that private sector production depends on centralized governance and fiscal spending, It’s a Wonderful Life imagines that the state has little to do with American money or production and romanticizes the practice of gathering large sums from many small private donations, or in contemporary parlance, “crowdfunding.” The story in It’s a Wonderful Life is set against the backdrop of a tumultuous period in American history, stretching roughly from the end of World War I to just after the Second World War. Instead of thematizing the turbulent politics of provisioning and privation that shape this period, the film treats money as a private and largely alienating relation. It then holds up crowdfunding as a supernatural salve for working people.

In this sense, the film remains surprisingly relevant to present viewers. As thousands turn to crowdfunding platforms to shore up neoliberalism’s structural failures in everything from healthcare to the arts, It’s a Wonderful Life’s improbable fable of community-funded uplift stokes contemporary desires for digitally mediated miracles.

The film’s dismal economics become clearest in the two key miracles that frame its narrative. First, an angel named Clarence is sent from Heaven to save protagonist George Bailey, the now suicidal head of an insolvent Building and Loan Association in Bedford Falls, New York. Clarence convinces George to embrace life by showing him a dystopian version of Bedford Falls in which he never existed. This theological intervention into the secular realm suggests that any mediation or assistance from above is to be strictly personal, moral, and existential. It also falsely implies that collective life is wholly contingent upon the actions of individuals, as in most Hollywood fare.

The film’s second miracle occurs at the story’s conclusion. On Christmas Eve, the townsfolk of Bedford Falls pool together heaps of their own hard-earned dollars, at once redeeming George’s decision to remain alive and rescuing the Building and Loan on which they, too, rely. Indeed, because the Building and Loan provides Bedford’s downtrodden with decent housing, when the community aids George it is also helping itself. In reality, of course, the New Deal and World War II saw the US government spend like never before or since, and midcentury suburbanization was an overt governance project. But It’s a Wonderful Life envisions money as a slippery private substance, which is monopolized by capitalist slumlord Henry F. Potter. It then dramatizes quality social investment and housing as marvels of bottom-up cooperation.

In the end, Clarence’s and the community’s extraordinary actions snowball into one big Christmas miracle. The result glorifies crowdfunding as the only antidote to systemic breakdown and imbues this antidote with a schmaltzy sense of divine justice. In doing so, It’s a Wonderful Life not only misconstrues political economy and makes a mockery of American history. It also naturalizes so-called “secular stagnation” and renders long-lasting transformation unimaginable.

In response, one might wish to organize a mass boycott against It’s a Wonderful Life this Christmas season. Yet why forsake the charms of a great Hollywood tearjerker when we can build a political movement that turns our shared pangs into miracles that really deliver the goods?

So, happy viewing, everyone. Only, this year let us look askance at It’s a Wonderful Life’s crowdfunding reveries and fight to realize the money form’s still-untapped public powers.

Originally published on Naked Capitalism

The Neoliberal Blockbuster: Jurassic Park (Preview)

This Money on the Left/Superstructure teaser previews both our tenth and eleventh premium releases from Scott Ferguson’s “Neoliberal Blockbuster” course for Patreon subscribers.

For access to the full lecture, subscribe to our Patreon here:  

If you are interested in premium offerings but presently unable to afford a subscription, please send a direct message to @moneyontheleft or @Superstruc on Twitter & we will happily provide you with membership access.  

Course Description

This course examines the neoliberal Blockbuster from the 1970s to the present. It focuses, in particular, on the social significance of the blockbuster’s constitutive technologies: both those made visible in narratives and the off-screen tools that drive production and reception. Linking aesthetic shifts in American moving images to broader transformations in political economy, the course traces the historical transformation of screen action from the ethereal “dream factory” of pre-1960s cinema to the impact-driven “thrill ride” of the post-1970s blockbuster. In doing so, we attend to the blockbuster’s technological forms and study how they have variously contributed to social, economic, and political transformations over the past 40 years. We critically engage blockbusters as “reflexive allegories” of their own technosocial processes and pleasures. Above all, we think through the blockbuster’s shifting relationship to monetary abstraction and the myriad additional abstractions monetary mediation entails.


2001: A Space Odyssey (Stanley Kubrick, 1968)

Jaws (Steven Spielberg, 1975)

Star Wars (George Lucas, 1977)

RoboCop (Paul Verhoeven, 1987)

Toy Story (John Lasseter, 1995)

Jurassic Park (Steven Spielberg, 1993)

The Matrix (Wachowskis, 1999)

Avengers: Infinity War (Joe & Anthony Russo, 2018)

The Metaphysics of Accounting with Paolo Quattrone

Paolo Quattrone (@PaoloQuattrone) joins Money on the Left to discuss the metaphysics of accounting and the significance of accounting’s repressed history for political economy today. Professor of Accounting, Governance & Society at The University of Manchester, Quattrone insists that, while often seen as a positivist and merely technical skill for recording extant data, accounting in truth represents a rhetorical and quite generative engagement with the “mystery of value.” This mystery, Quattrone reminds us, informs nearly all aspects of collective life. Genealogy is central to Quattrone’s work and, in our conversation, we explore how numbers, figures, and visual arrangements used in contemporary accounting trace complex and often surprising lineages that have a lot to teach us about accounting’s still untapped possibilities. Along the way, we touch upon two of Quattrone’s most important case studies. First, we delve into the Jesuit order’s rich contributions to early-modern accounting, including its development of double-entry bookkeeping. Then, we turn to the more recent history of “I.R.I.,” the Italian “Institute for Industrial Construction” which, even as it served as administrative arm of the Marshall Plan, underwrote the midcentury period of prosperity known as la dolce vita by precisely rejecting the ideology of “profit maximization” promulgated by The United States. We conclude, finally, by rethinking money’s futurity through Quattrone’s approach to accounting. If spending tomorrow is never flatly predicated upon yesterday’s inert data in the form of receipts or revenue, we suggest, then it instead derives from mobilizing accounting practices in the present to create new credit and debt relations “endogenously” in response to shifting circumstances.

You can find Quattrone’s publications here:

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Music by Nahneen Kula:

Scott Ferguson: Paolo Quattrone, welcome to Money on the Left. 

Paolo Quatrone: Thank you, Scott. Thank you, Maxx. 

Scott Ferguson: Thanks so much for joining us. I was hoping that we could begin by asking you just to tell our audience a little bit about yourself, your background, your training, and how you came to this question of accounting.

Paolo Quattrone: Maybe we can start from how I came to become an accountant. I’m actually a qualified accountant. Of course, the answer is by mistake. Because until the age of 17, I wanted to become a medical doctor. And then, because my father was an accountant and he had a small practice, I said, “Why do we have to waste all of these clients that you have?” And so, I wanted to become an accountant too. He discouraged me with all of his power, but because of course kids never do what their dad tells them to do, I started to study economics and management. 

Then, when I was in my last year of my degree, my father was not very well. I started to help in his business. I took a year off from university. And I understood that that was not what I wanted to do. Then, I decided to do a PhD and I was very lucky to have a great supervisor, Professor Claudio Lipari, who’s still alive and well. He viewed accounting as a theory of knowledge, not as a stupid technique. I started to study accounting with him, he became my PhD supervisor, and then also by chance, we started to get interested in the Society of Jesus, the Jesuits. Also, because the first college of the Jesuits was opened in Messina in 1548. I’m Sicilian from Sicily. I’m from Palermo, and the first college was opened in Sicily. So we started to discover this huge, new world of relationships between religion and accounting, rhetoric and accounting, pedagogy and accounting, and various other things.

Maxximilian Seijo: Accounting in the dominant reading is often seen as a positivist and merely technical skill for recording extant data. However, in your work you make a passionate case for accounting’s generativity and uncertainty which, you remind us, inform nearly all aspects of collective life. I suppose for starters, what is accounting in your view? Why is it so important? And why is accounting, as you would say, “rhetorical” and not simply boring?

Paolo Quattrone: First of all, accounting is important because it deals with the production and distribution of value. It is very meticulous about how value is produced and distributed. There are a couple of things that come to my mind. In the production and distribution of money, one important thing is the way in which you do that. Not many people know the word “rationality” has an interesting genealogy. It comes from Latin ratio. When I teach my students, I always tell them, “Look, at the end of this, you may not learn anything new about accounting or program management,” which I teach a lot, “but you will learn a lot about Greek and Latin.” This is my first Latin etymology class. The word rationality comes from ratio. Ratio, in Latin, means two things. One is ratio, so proportion. In order to be rational, you have to be balanced, you have to be proportioned. Two is account, because account gives the idea of symmetry and balance. So if you want to be wise, you have to be balanced. 

Accounting is interesting because it emerges and was designed as an instrument to seek for this wisdom and for this balance. It did that thanks to a lot of rhetorical techniques, and we can talk about them if you want. One thing that is interesting is also that in the first accounting treatises–let’s say early, modern times, late medieval times–to explain to those who are reading these treatises what accounting was about, an example that was used is the metaphor of the mirror. When it is asked: “Why do you use the accounts?” It is because you will see the state of your affairs, you will see yourself, you will reflect on your morality as if you are looking at yourself in a mirror. 

This brings us to the second important Latin etymology behind contemporary accounting discourse: speculation. Mirroring in Latin is speculatus. Sorry, my Latin is a bit rusty. My father would be ashamed of me. The idea is you create a distance between you and yourself and you reflect on your behavior by looking at yourself in this mirror which, in accounting terms, is the financial reports that are produced at the end of the year, or when you close the books and you open them again. Interestingly, this speculation was a moment of reflection, a moment of reflecting on your morality. In modern times, this has devolved into a degraded sense of speculation, however. “I don’t even care about who I am and why I’m here, I just want to make money.” Then, you’re in the world of high frequency trading and algorithms where no one stops and reflects. 

One other thing: at the moment we teach a lot from home. When I’m at home in my study, I have all my books around me, including one on my left on the history of balance. But next to that, I have a few books on labyrinths and mazes. It’s the same idea. I’m interested in labyrinths and mazes, because the maze is made up of moments where you have to stop and think. So do I go right or do I go left? Then, you make the decision, you deal with the uncertainty and the mystery of life, you decide to go right. Then, you stop and you face another wall. Again, you have to make a decision. If you make all of these decisions right, you are amazed, you are out to the maze and you see the light.

So accounting is all about speculating about what you do not know. It’s about creating

spaces in between opposites. In that sense, it’s rhetorical, to make sure that you interrogate the unknown. There is a link between Latin rhetoric and accounting as well. I mean, if you think of a couple of words like data, or fact, fact is possibly the most interesting, but data as well. Fact comes from factum, which means made. Data comes from datum, which means given, but also attributed. So the meaning of data is never given, it’s always attributed. The truth needs to be in the middle, in that middle space between the two opposites. Accounting is about creating two opposites in order to speculate on the mystery of value, in order to speculate on what is in between these dichotomies, expenses and revenues, assets and liabilities. You create figuratively in order to deal with the mystery of value, with uncertainty, with the unknown, so forth and so on.

Scott Ferguson: What it seems like you’re starting to explain here, and what so much of your work is criticizing, is a certain modern and even more contemporary reduction of accounting to a series of terms. I wonder, if you had to spell out a critique of the key terms in contemporary accounting, or maybe even just popular conceptions of accounting, what would they be? What bugs you about our approach to contemporary accounting that your genealogical method seems to work in the opposite direction of in a movement of opening up, of expanding meanings, which are maybe hiding in our contemporary language, but that we only treat in a reductive way?

Paolo Quattrone: I had a meeting yesterday or the day before yesterday with some people who were working on an initiative on the future of environmental accounting, and there are various, different initiatives. At one point, one of the people said, “I know you want to measure nature. I know you want to count how many bees are being killed or how many bees have been saved, the stock of natural capital that we have and how much we are consuming.” And I said, “Look, I think you’re completely wrong in the sense that it’s the idea of measure which is wrong. You cannot really understand the stock of nature that we have available. But we can reflect on what we do when we consume natural resources and what trade offs we have.” Another example is this idea of believing that you can define targets and measures in these targets. So you’ve got this target and that target becomes the “truth,” or it’s affirmative in a sense. It defines what is the right objective of a corporation, maximizing profit or whatever. In doing that, you lose sight of what, in economics, would be the opportunity costs. But in other terms, it would be the trade offs. In order to pursue profit, what is it that you are killing? In order to make sure that you deliver your target sales this year, what is it that you are losing?

I think accounting has, until very recently, always been about reflecting about these trade offs. So it’s about making sure that you use what you can count–money–in order to reflect about what you cannot count, which is the purpose of the organization, your morality, what you need to do next year, and so forth, and so on. While we tend to, nowadays, reduce everything to numbers in the false belief that numbers will produce objectivity and generate rational choices, that was just the first movement that accounting did. Accounts indeed reduce the complexity of the world that is around you which cannot be reduced to numbers in order to augment your understanding of this complexity. However, numbers were excuses, they were not final objectives. They were means to explore the ambiguity of life. They were means to explore the mystery of value. They were means to explore how we always deal with uncertain situations. They were never instruments to eliminate the mystery, eliminate the uncertainty and eliminate the ambiguity. That would have been a stupid way of using numbers. Yet this is exactly what we’re doing in contemporary time. We are using accounting as if accounting can provide more certainty through answers, while instead, the only thing accounting can do is to point us towards the right questions. 

I always make this point to my students. I mentioned Professor Lipari, my supervisor. He was also my professor in accounting 101, the first accounting course that I ever took in my life. I did Classics in my high school, so very little math, very little anything that was merely practical. At that time we had oral exams. So you do the written part, and then you sit in front of 30 people who ask you questions all the time. And if I told him, “Accounting is about truth,” he would have taken me from the ear and kicked me out of the group saying, “You have not understood what accounting is about!” This is 1980. So it’s actually quite recent. It’s only with the financialization of the world and the belief in the power of markets as a mechanism to substitute accounting in the valuation of basically understanding how value is produced, distributed, and allocated that we lost sight of the power of accounting. In a sense, it’s the victory of finance versus or against accounting. 

This reduces everything to cash, as if cash is the ultimate goal in life. Of course, it isn’t the ultimate goal in life, it’s a means to pursue an end.  This is why the Jesuit cash box had two keys. One was kept by the accountant, the appropriator of the college. He was the spokesperson for financial matters. He needed to take care of the money. But the other one was kept by the Rector of the college, who was the spokesperson for anything else that was not financial. So yeah, the means, the key of the appropriator to interrogate the end, which is the key of the Rector. You can count the money, but you use the money to speculate about what the Jesuit Order was about without pre-defining what is right, without fixing targets. Because that would have been too stupid to deal with managing a complex and large organization like the Jesuits.

Scott Ferguson: What is so fascinating, and I think it’s such a nuanced point that you’re making, which is that this kind of reduction of accounting to non-accounting becomes a function of what we call “neoliberal financialization” or “marketization,” on the one hand. But on the other hand, even those who are thinking about the environment or thinking about ecology get stuck, too, in this reductive epistemology and the ontological assumptions involved, right?

Paolo Quattrone: I would say they’re trapped into this idea of measurement. We can measure finances now. We have to measure what happens in society and we have to measure what happens in the environment. Yet, we forget that, as much as measures are wrong for understanding how value is produced and distributed, they will be wrong in terms of how we understand societal matters and environmental matters. But those who designed double entry bookkeeping knew this very well. There is another interesting issue here. I would say, since the 16th century, from a technical point of view, in relation to double entry bookkeeping, there has not been any groundbreaking innovation. I mean, with the accruals, you basically, from a double entry point of view, you have more or less everything that you need to keep the accounts. 

So it’s the same double entry that can be used in different ways depending on what kind of epistemology orientates you. So are you driven by positivism? Then, you screw with the beauty of accounting. Are you driven by a very, I would say not even relativist, I would say, very pragmatist approach? Then, you start to see that things are much more complex than what measure can tell you. In that book that was mentioned, it’s one of the first accounting treatises where the rules were described. It was published in my hometown in Palermo in 1636, by Lodovico Flori, a Jesuit. 

In the preface, it says accounting is a scientia prattica, it’s a pragmatic science. It’s not about truth. I’m not a theologian. So it’s about solving problems. In order to solve problems, you know, truth is almost irrelevant. You want to reflect on what may be true in Rome is false in China. What is true in Rome at one point in time will become false in a different point in time. What is right in a certain network of relationships in Rome will be false in another network of relationships. Accounting helps you with that ambiguity. It helps you to manage that ambiguity, helps you to manage that continuous malleability of what counts as right.

Maxximilian Seijo: You’ve mentioned the Jesuits a few times now, and they are an animating feature of your work, specifically with regards to their particular accounting forms. One term we would ask you to explicate from this lineage is the meaning of “inventory. Your genealogical approach really does a lot of work to defamiliarize how accountants, and perhaps lay people, might understand what inventory means and how they fit into accounting practices, and particularly, the alternative practices that you locate in this 16th century Jesuit context. But before you do that, could you say for our listeners, who are the Jesuits and a little bit about how they came to transform accounting?

Paolo Quattrone: Yeah, the Society of Jesus is still a Catholic order. It was founded in 1540 by Ignatius of Loyola. The first college was opened in Messina in Sicily, because Messina was the port. It was the kind of door, along with Venice, towards the east. The Jesuits were interesting because they mainly did three things. They did many things, but let’s say three main missions. One was, of course, evangelization. So they had missions. Another was they had colleges and schools. So if we teach in classrooms these days, it is because of the Jesuits and their Ratio Studiorum, the first treatise of pedagogy. It was a Jesuit treatise. And they were crazy about double entry bookkeeping. They were using double entry bookkeeping, or they loved double entry bookkeeping, as much as we love artificial intelligence these days. So for them, it was a fantastic innovation. What is interesting in the Jesuits is that, in every single activity, even in the arts, think about the Baroque and the Fall, and the work that Deleuze has done on the Jesuits to explain how it was impossible to find a true representation of the world in a sense, and it was open to difference, but anyway, in every activity that they did, they dealt with the unknown. So in pedagogy, it was the mystery of knowledge, in the missions, it was the mystery of the unknown. You go to lands where you don’t have the maps, you would not know what animals would kill you, you would not know what kind of people you would find, what culture they had, and still, you needed to establish a connection with them. 

They were pioneers in accounting, because they understood the mystery of value. For them, value was not something that is easy to represent but it was something that it’s quite difficult to represent. It’s contingent and it varies depending on where you are and what you do. So my interest in the Jesuits emerges from their interest in the mystery, and also, spiritual exercises and the mystery of God. They never define what God is, but they give you instruments to make sure that you search for it. 

This is why I was interested in them, because in contemporary terms, I would say they were at ease with the idea of dealing with “unknown unknowns,” the infamous word, or collection of words, that Rumsfeld discussed. It’s their daily business. It would have been very stupid for them to define what is right, because as I said before, what is right in Rome, will not be right in China, will not be right in Latin America, will not be right in India, will not be right in Rome in different times. It’s interesting also how I use this stuff when I teach major program management, or when I teach people who run very large projects. This could be large infrastructures like airports, defense, or nuclear plants. And these projects are so complex that you cannot really say what they are about. There’s a famous phrase that I use from the program director of HMS Queen Elizabeth II, one the new aircraft carriers of the Royal Navy. He has a very nice line where there’s a picture of the warship and then the heading is, “This Is Not a Warship.” 

So if you think that this is a warship, you have not understood what my job is about. So if you fit the target to believe that I have to deliver a warship, you are adrift in the very first moment in which you do that. And you are adrift because the warship is many different things at once. It’s an airport, a small village. If it were a nuclear submarine, it would also be a nuclear power station. It would be many different things. But also, most importantly, it’s a very dynamic object. It has the tendency to become what it was not, I would say. So he said, “No one told me when I took this job that this program would have been used to keep Scotland in the United Kingdom because the shipyards are in Edinburgh in five.” During the Scottish referendum, the UK Government said, “Okay, you can leave the United Kingdom, but be careful that you will lose 12,000 jobs because this shipyard will be moved down to England.” Forget the warship because this thing will never go to war. Forget the other things. At one point in time, in a certain network or relationship, this thing was about jobs and votes in order to keep the United Kingdom together. That creates a quite serious challenge to modern management, which is based on positivity. “This is a warship, this is not a warship.” So a negative attitude towards the warship is actually much more useful than a positive attitude towards the warship. The Jesuits understood that in the 16th century.

Scott Ferguson: Just to circle back to Maxx’s question, the term “inventory” seems to be the place where accounting practices are supposed to begin, but you point out in your genealogy, that an inventory, as we’ve been saying so far, is not just in a positivist recording of inert items. It’s something more. So maybe you can tell us where that word comes from? 

Paolo Quattrone: When people think of the word “inventory,” they think of accounting, of course. They do not know that the term originates from the first canon of rhetoric, which is inventio. And inventio is about classifying things in spaces, in Greek, it would be topos. They would become topics of conversation, for instance. Then, the first canon of rhetoric is about doing this classification, or doing this de-finition. So an asset becomes certain things and expense becomes other things. But again, because of the richness, I would say, of the Latin word, Romans understood very well that every classification, every de-finition–and we can think of the word definition as well–it’s always contingent. 

That classification valuementary was functional to actually be reclassified, that is the second canon of rhetoric, ordinatio e dispositio. And, not by chance, that book that I mentioned before by Flori was organized in three parts. The first part, “Dell’inventario,” is about the inventory. How do you do the classification, how do you do your chart of accounts? But the second part was about the ordinatio e disposizioni dei conti, or the ordination and disposition of the accounts. Once you have the classification, you start to mix them around in order to invent solutions to problems and issues that you have not thought about. So the inventory was not there to measure things or to represent them. It was there to prompt imagination, to prompt creativity, and to prompt the possibility of finding new solutions. 

So the inventory, which is a definition with the emphasis on the word finis, or boundary, opens up the possibility of taking those boundaries away, knowing that the moment in which you make a definition, some people will agree and some other people will disagree. So you always get, as a good rhetorician, to be open to the possibility that you are wrong. Never fixate on things in a way that you believe you’re right. That would be the greatest sin that you can commit. And in that sense, accounting is rhetorical and pragmatic. Because the ultimate end is not to deal with and understand what is right, what is true. But actually, to deal with the unexpected circumstances in which you can find yourself, and that the belief that you have is actually put in question by something that you had not thought about. 

This is why I talk about the procedural rationality of the Jesuits. That example of the two keys that I made earlier exemplifies the fact that they never defined what is right, but they defined procedures through which you understand, in every single circumstance, what is right and what is wrong. You do that by establishing a tension between two opposites in order to explore the ambiguity of them, which is symbolized by the space in the middle.

Maxximilian Seijo: Moving from this attention to genealogy and language, your work deals quite a bit with accounting’s visuality. This might be counterintuitive so I’m looking forward to you explaining this, but instead of treating visual arrays, like the double entry grid, as transparent mechanisms for conveying the underlying facticity of the data–this measuring process and reduction that we’ve talked about–you compare accounting’s visual representations to paintings, and explore them rhetorically, if not in almost a metaphysical sense. So with that, can you explain how accounting can be like a painting and what attending to accounting’s visual aesthetics might mean for the future of accounting?

Paolo Quattrone: Yeah, there is a need for a step back first, and maybe an example helps. I always make the same example so some of the people who will listen to this, if they are my students, they will have listened to this already. Think about a classroom, also talking about the Jesuits who invented the classroom in the first place. Depending on how you lay out the desks in that classroom, you would have a different kind of social interaction. So in a conventional way, you’d have the teacher sitting and then a series of rows opposite to the teacher. And the idea is that the teacher conveys knowledge to a passive audience. Organize that classroom as a Harvard style lecture theatre, so you have an amphitheater, you have a space in the middle which is empty, and then you have the lecturer who orchestrates the debate amongst the participants in that classroom.

Typically, that architecture symbolizes the fact that a good Harvard case study does not have a solution. It’s a rhetorical device to investigate the ambiguity of management and the empty space in the middle signifies the fact that the case study does not have a solution. So knowledge emerging from the debate will not be conveyed by the lecturer. Or think about an executive session classroom. The layout is organized in Cabaret style and the knowledge emerges from the tables, because people are really experienced. 

So I’ll translate that into an account, and an account is also space. Physically, it is a space. Depending on how you design that space, depending on how we design that data visualization, you would have different kinds of social interactions. Depending on how you design the income statement, you will have different kinds of social interactions. So when I was a student, I was taught I think 6 or 7 different formats of income statements. Now, we teach students only one, which is the one that everyone knows that starts with revenues, cost of goods sold, gross profits, then operating expenses, operating profit, financial income or expenses, profit before tax, and tax and dividends. That is not, I would say, an income statement. That is a political statement. It tells us that the most important thing on earth is the shareholder, and the dividends that need to be distributed to them.

But you can organize the income statement in different ways where there is no one single perspective then there is taking into account. Think about value added accounting, for instance, where you have reduction augmentation, you have the production of value, and then the distribution of value amongst peers. Interestingly, you would distribute this value between workers, labor, shareholders, capital, banks, the state through taxes and the firm where the mediation amongst these different stakeholders would happen. That is a statement where there is no perspective. So this is the link with his theory of art. Because in most modern forms of visualization, there is a clear perspective. So we tend to represent things from a clear perspective, normally the perspective of the owner. Instead, you can design dashboards, for instance, which do not have perspectives. In another paper, I analyzed one of the dashboards utilized for a program managed delivery for one of the London Heathrow terminals, one of the few that actually had been delivered on time and on budget. I used medieval aesthetics to explore how that artifact works because the artifact by design does not want to privilege one target versus the others. 

Because if it did, you would think that visually that that target would be building the warship, or building the airport, as if that program is about building the airport only. Well, that problem is much more complex. So you need to create spaces where you debate what is important at one point in time or another point in time. That dashboard does not have one single focus and does not have one simple perspective. It does have multiple foci and multiple perspectives exactly like medieval art where the technique of perspective was not invented. And therefore the viewer, and the eye of the viewer, was asked, and even forced, to go around the painting and not focus on the vanishing point, which is instead what happens with modernity. 

So there are lots of links between accounting, its spatial nature, but also it’s, I would say, artistic nature, in the sense that it embeds intrinsically in ways that are very pervasive and work without being seen, notions of perspective. Which become ways to make certain forms of capitalism work, for instance. Without those, without accounting and the income statement done in a certain way, you will not be able to think about the maximization of profit. You will not be able to do certain things. Of course, Keith Hoskin who reminded me how double entry cannot be an Italian invention, because the Italians did not have zero in their numbers. So it needs to be an Indian, Persian, or an Arab invention. These things had an agency. The structure of the data visualization, the structure of the income statement is not a neutral, banal technique. It embeds certain forms of seeing societies, certain forms of seeing the world, certain forms of seeing the economy, and who counts in that economy and what counts in that economy.

Scott Ferguson: That’s so fascinating. It also really defamiliarizes Excel spreadsheets, which is what mediates so much money in our world today. Whenever I hear you talking about and affirming dashboards or accounting visual matrices that walk our eyes around, it makes me think of certain cinema theories, actually. André Bazin, the French film critic and writer from the 30s, 40s, and 50s, he famously argued for the value of a certain kind of cinematic aesthetic that he deemed “realist.” But he didn’t mean it in any kind of positivist sense, he had a kind of a mystical articulation of this aesthetic. And it precisely, for him, asks our eyes to wander about the frame. And even though cinema is based on photography, and photography on the camera obscura, and these kinds of optics that go back to Renaissance perspective and before that have a tendency to focus us in a very monocular way, even using, to go back to your example, what we account for, what we say it is, isn’t necessarily all that it is. What Bazin is doing is he’s telling us that this monocular, single perspectival technology actually can be non-identical to itself and can produce a different relationship to the world, to visuality, etc. It just strikes me that there’s probably a lot more work to be done interdisciplinarily thinking about the history of art, the history of different media, how they’re used, and what that might mean for accounting and vice versa.

Paolo Quattrone: Absolutely. Also, a couple of things come to mind about what you just said, Scott. One is that in pre-modern times, let’s say in early modern times, you would use numbers to reduce the complexity and interrogate what cannot be actually seen by and through the numbers. While with modernity, we stopped at the moment of reduction. So we believe that what the numbers tell us is actually the truth. We forget that by focusing on certain targets rather than others, I see only certain things and not others. So it misses the second point of that rhetorical technique, which is reduction argumentation. 

Historically, and also, in genealogical terms, if we look at all the business visualizations, or most of the business visualizations, that are used nowadays, you mentioned Excel, Excel is a rhetorical grid. It was a rhetorical machine, una machina rhetorica, because in the Latin machina means “crane.” So that is the way in which you build and rebuild knowledge. The basketwork is a rhetorical wheel. This is why I guess in English you say, “reinventing the wheel.” Because all of these things were not there to represent things; they were there to make you invent new things. They were not there to focus on what you can see, but to make you focus on what you cannot see, what you have to speculate about. 

If you’ve got time, it is up to you, we can pick this up later if you want. The example of the grid is fantastic. Because if you’re a good orator and you’re paid well because you speak well in public, you may accept to speak in public even for things that you do not know very well. So the good rhetoricians, they had a series of techniques to organize their speeches. And there were all these visualizations that we use nowadays. So the grid, the modern version would be Excel, rhetorical wheel, balanced scorecard, Instagram, and things like that. But the grid is very interesting, because the idea was, let’s assume that I have to give a talk about something that I do not know. Okay, whatever, so the unknown. I have to deal with the unknown, with the mystery of the object. Let’s assume it’s this iPhone, and I know very little about this iPhone. So what was the rule? The first one is to take a piece of paper and write a certain line vertically, and horizontally, and then assign to each of these lines a grammatical value. So who, what, when, why, whether, how, and so forth and so on. 

Then, take the object, the topic of your conversation, okay. Make it float above the grid, and then you start to interrogate the unknown. You say, “Who built this? Apple.” Okay, then you take note, and write Apple. “When is it used? In how many different ways?” Then, “Why is it used?” God knows, for many different reasons. “How is it used?” In many different ways, and you take notes, you start to interrogate the unknown and start to build your speech, 

Then, the third rule was be careful, never let the object fall into one of the cells, into one of the places, or into one of the topics there. Because otherwise, this becomes a commonplace. You believe that this is actually a phone, you lose the opportunity to understand that this is actually not just the phone. To understand this technology, which everyone has got in his or her pocket, it’s much better to think in negative terms. Again, this is not a phone, this is a bank, this is a cinema, this is a camera, this is a church, this a square, this is a matching agency. It’s whatever you want this to be, to become, but never let it fall into the grid because otherwise this becomes a commonplace. 

What do we do nowadays? We concentrate on the numbers which are on the grid rather than using those numbers to interrogate what cannot be representing the grid. This goes back to this idea on means and ends. The Jesuits said very clearly that accounting has always said very clearly that you use numbers, the means, to interrogate the ends. It’s when means and ends become the same thing that it’s the end of the world. In a sense, it is when the means becomes an end in itself, when speculation becomes speculation. “I want to make money,” that is my end. So means and ends began isomorphic, and that is the end of the world. And I say that is the end of the world because you mentioned that film director and I mentioned another film director, which is Paolo Sorrentino and his film on Giulio Andreotti. At the end, there is a wonderful monologue in that film. If you’re not familiar with Sorrentino’s films, he won the Oscar a few years ago. 

But in many of his films, he interrogates the mystery, the mystery of power, beauty, love, and the mystery of life. And at the end of Il divo, there’s this wonderful monologue. Andreotti is the most important Italian politician of the 20th century. He has been charged with all kinds of crimes including being a partner with the mafia and having asked people to kill some of his friends as well, like Aldo Moro. At the end of this monologue, he calls all these people that he asked to be killed, and he says, “Aldo, Carloberto…” All of these people who are in love with truth, they don’t understand that truth is not the end of the world. If you believe in truth, if you believe that that target is truth, that it is the end of the world, then there is no room for mediation, there is no space for discussion. This is why I teach my students to forget about alignment. Alignment is epistemologically, politically, and practically impossible. What you need is tension. What you need is to use rhetoric to create opposites and explore the ambiguity of what is in the in-between. That brings wisdom. The rest brings, I would say, atrocity. 

Maxximilian Seijo: It’s really remarkable how you draw out this rhetorical, logical and analytical schema with means-ends. And it reminds me, to sort of make the connection that I think is already hovering there and make it explicit for our listeners, of the way throughout the history of economics people study money. There’s the sense in which the vast majority of it is the study of the commodity that represents money. And it’s the way that it behaves within a system. We could look to Marx and Smith and a lot of others, especially in the classical tradition, who do this. But in some sense, in studying the object of money, even if you know it goes beyond gold, as such an object without letting it hover over the grid, as you said, by “submerging it into the fixity of that systemic process,” you perform that means-ends analytical structure. But not just at the level of diagnosing the fact that money becomes the means and the ends at the same time. But in the sense of, in how to fix the problem of money becoming means and ends at the same time, you submerge money analytically into that status. So that doesn’t allow for an alternative reprocessing of the accounting medium of money in that particular logical schema. And I think it’s just so fascinating how you, in such a lucid way, put that together as a matter of rhetorical argumentation.

Scott Ferguson: I’ll just piggyback here and say that, I think, for us on this show, and the work we do as scholars and public intellectuals, I think we have a different understanding of what Marxism calls “reification.” We see money as being reified and we make criticisms of how Marxist analyses often don’t interrogate their own reifications of monetary mediation and as accounting. And your work helps, I think, flesh out a language that is new to us and really helpful and illuminating.

Paolo Quattrone: I hope it does. But that means and ends separation and tension, for me, it’s a really important thing to wisdom. Because what it does is to ensure that you never reify things. So that reduction is what we have talked about during the whole of this chat. In order to avoid that reduction, you need to make sure that means and ends are always separated. I have another TEDx talk where I talk about my college at Oxford. I didn’t study at Oxford, I was employed by them. So it was a lecture in accounting at Saïd Business School and Christchurch. And it’s interesting how the layout of the room where the governing body in Christchurch, it’s telling, of how that basically still medieval institution defines good governance. You have the seat of the Dean. There are some signposts so the Dean always sits in the same seats. The Dean is appointed by the Monarch who was chosen by God. That is the idea. So the Dean is the spokesperson for celestial matters and wisdom, and who sits opposite to the Dean in a clear opposition is the Treasurer.

The Treasurer, the person who deals with dirty stuff, money. Because the Treasury is the means. And the Dean is the spokesperson for the purpose and the end of that institution. It is in that space between the two that they have to find that compromise–compromise, another wonderful word. And the college collapses in a sense, either when there is no dialogue between the two or when the two collude. The college would go bankrupt if you pursue your ends without thinking about your means. You would be corrupt if you pursue your means, so if you pursue money, but not the celestial matters that bring us close to institutions. This is why, for instance, universities are losing their power, because it’s all about money. So it’s not about education. It’s not about the role of the university in keeping democracies together, or in keeping the nation-state together. It’s all about making money. The moment in which money is no longer a means to pursue a bigger and greater end, then institutions collapse. When you have states where the Treasury is much more powerful than the other departments, then the state and democracy is at risk.

Maxximilian Seijo: I think moving now to perhaps a case study, which you sort of already gestured at a little bit there, in your work, you talk about how accounting is vital for governance in the sense that you just explicated. Specifically, in one instance, you study the history of the IRI, or the Italian Institute for Industrial Reconstruction, which served as an administrative arm of the Marshall Plan. And as you suggest, it underwrote the mid century period of prosperity known as “La Dolce Vita.” So for our listeners, could you perhaps say what is the IRI’s history? How did it approach planning and budgeting? And how did IRI’s approach to “rationality” conflict with the ideology of profit maximization promulgated by the United States?

Paolo Quattrone: So IRI first of all was established by Mussolini during the fascist regime in 1933. But then, before the war, he changed its mission. It was set up for saving the banking system, or restructuring the banking system, after the crisis of 1929. But then he changed its nature and it became an instrument of industrial policy for the fascist regime. Already in 1940, the Vatican understood that Mussolini entering the war was a big mistake. And they started to understand what they had to do in order to build what came after the fall of Mussolini. And IRI was particularly important in this strategy also, because quite a few leaders of IRI in the 40s were very strong Catholics, and in particular a couple of guys, Pasquale Saraceno was a professor of Industrial Economics in Bocconi University in Milan. Also, Sergio Paronetto was an adviser to the Vatican, to Einaudi, and a very close friend of Giovanni Battista who then became Pope Paul the Sixth.

So when Italy gets out of the Civil War, which followed the end of the Second World War, the Americans come to Europe and come to Italy and tell the Italians, “Okay, we will give you money. But we will also help you to turn the companies that you have, and then sell them on the market. And in order to do that, we will also give you accounting and business techniques and knowledge.” The idea was to add efficiency as the main criteria for the allocation of resources. So this is the Marshall plan. Now, if they followed efficiency as a criterion for the allocation of the resources of the Marshall Plan, all of the resources in Italy would have been invested in Lombardy, which was the very industrialized region of the North. But the people of the country at that time were Catholics. The Vatican understood in 1940 that things would have not played well for the fascist regime. They started to organize a series of meetings where the Catholic intelligentsia met to define the contours of what would have been a modern social democracy. People like Aldo Moro, Giulio Andreotti, Paronetto, Saraceno, Ezio Vanoni, and some others started to meet in Paronetto’s house, Via Reno.

Then, after a few years, they issued that code to a what’s called the “Camaldoli code.”  In the Camaldoli code, they defined what a good Catholic would have done. They were the principles to drive the good Catholic. The core principle of that code, of the Camaldoli code, was the idea of “common good.” So in everything that you do, if you’re an accountant, if you’re a lawyer, if you’re a politician, if you’re an administrator, you have to pursue the common good. But they define the common good in a very interesting way. Because it was defined in this very ambiguous way where the common good was the series of conditions that allow individuals to pursue their personal interests. So in pursuit of the common good, inevitably, you have to compromise and you have to mediate with others. You have to allow the others to pursue their individual interests, which means that you have to constrain yours, but the others had to constrain there’s for you to pursue yours. That was the basis for the typical Catholic mediation and compromising attitude. 

Now, they managed to translate that into accounting terms, because as I said before, the Americans came and said, “Okay, we give you the money with the Marshall Plan, but we also give you instruments and techniques through which you can make this money work.” Not lastly, principles like efficiency, but also accounting techniques to measure this efficiency and to pursue this efficiency. The Italians of that time were a bit smarter than the Italians that we have recently, I would say. And they said, “Hmm, that is not what we like.” Because an income statement where you have profits and dividends at the bottom line, it’s indeed a political statement that tells you that the most important institution in the economy and society is the corporation and the shareholder. For us, the most important issue is the family and possibly what drives our activity is not profit or efficiency, but common good. 

So after a few years of negotiation, they managed to tame the Americans. And towards the end of the 50s, they started to define planning and budgeting not based on the idea of profit, but based on the idea of value added. So how value is produced is by selling goods and services and then acquiring raw material and basic production factors that creates a bunch of, or a basket if you like, of value. And that value then is distributed amongst the equals, including the workers. Interestingly, you see how we got back to the idea of the account being a space for social interaction. The worker in this new format of the income statement is no longer a resource to be utilized, but is actually a resource to be remunerated in the same way in which capital is. It’s an interesting story because the people who came out with this form of budgeting, not only for IRI, but also for the state, were Pasquale Saraceno, a professor of Bocconi, Paronetto and Ezio Vanoni. Three people from the same village in the north of Italy, Morbegno, all relatives. 

So Saraceno was married to Vanoni’s sister, and Vanoni and Paronetto were relatives. Vanoni became Minister of Finance and he organized planning and budgeting based on value added at the national level. Saraceno had various roles within IRI and he was called the architect of the planning era within IRI. That planning was organized according to the idea of value added so that value added could work all the way up and down, from the state down to the subsidiary where it was owned by one of their holdings that IRI was made of. IRI was also an interesting solution, an interesting model that was apparently copied in many other countries, because the holding was a public holding, so full in the end of this of the state, but the subsidiaries operate in the market. 

Again, you have that need to balance a trade off between the need for pursuing profit and efficiency but also the need for pursuing social equality and welfare. The two things add to balance. That is the key to wisdom. So being Catholic, these people understood it very well and they reached a compromise. And it is since the very beginning of this chat that I wanted to tell you the etymology of the word compromise. It is compromisum, or “with the promise.” The com means “with” and “promisum” means “promise.” So with the promise that eventually we will agree, but we know that we can never be aligned, that is impossible, and it’s actually counterproductive. It’s much better to be misaligned and have an instrument of mediation. The key instrument of mediation in contemporary times, or in financial times as the newspaper would say, is indeed accounting.

Scott Ferguson: You have this lovely way of painting the picture of “La Dolce Vita,” this mid century prosperity moment. Maybe you can, for our listeners who know nothing about the history of Italy and what was happening, what was it like? What was it like to really benefit from this?

Paolo Quattrone: In relation to this, there’s a five or six volume of the history of IRI that we have a chapter in. There is also a chapter that begins in this way to give you an idea of how important IRI was, and then I’ll give you some anecdotes on what the 50s, 60s and possibly the early 70s allowed. So the story of that chapter begins in this way. If in the 60s you were a tourist and wanted to go to Italy or you wanted to travel to Italy, you would fly there or you would take a boat. If you fly, you would possibly go with Alitalia, which by the way now has disappeared. With Alitalia, my friend told me, “Paolo, do you know what Alitalia stands for? It stands for ‘Always late in taking off, always late in approaching.’” 

So you would fly with Alitalia or you would take one of the wonderful transatlantic boats, the Michelangelo. Alitalia was owned by IRI. Michelangelo was built by Fincantieri, and it was owned by IRI. Then, you’d get to the airport or the port. You’d rent an Alfa Romeo Duetto, which was then owned by IRI. Then, you’d take the first and longest motorway in Europe that was built by Autostrada. Autostrada was owned by IRI. Then, you get to Milan. And after having survived Italian traffic, you’d get to your hotel, you’d make a phone call with SIP. SIP was owned by IRI. And things started to become a bit complicated in terms of striking a good compromise when you’d go downstairs to buy a Panettone, the typical Christmas cake in Milan and Malta. The manufacturer was also owned by IRI. So IRI exporting became too big to be managed. The history, I don’t know, I was not there. I can tell you that Italy during the 50s and 60s must have been an interesting country. First of all, it allowed a lot of social mobility. My grandmother was born in 1900. She only did the first three classes of the elementary school. I began in the faculty at Oxford in the span of two generations. My mother didn’t have a high school qualification. She stopped after the second cycle of school. I made it into Oxford. 

The sisters, no, her brothers all became doctors, lawyers, very successful entrepreneurs in the span of one generation. We had a wonderful system of state schools in Italy. And for me, that is “La Dolce Vita,” the fact that you can actually aspire to a better life while enjoying yourself rather than putting effort into what you do. I think that is gone somehow in Italy. Okay, I would say that the state schools are still good, but you have this emergence of private English speaking schools. Because the idea is that your kids will not find a job in Italy and that they will have to be ready for the international market. That is a bit sad, it is no longer dolce. It’s actually quite bitter, I would say. Dolce means sweet in Italian.

Maxximilian Seijo: So before we wrap up, we wanted to perhaps speculate a little, to use your refrain there, about Modern Monetary Theory, which as listeners will know is what is the sort of guiding framework for this podcast. While recognizing you’re no MMT expert, I do want to go through some of the assumptions and then see perhaps if we can reflect on them. So for MMT, money is not private, or a finite chit of circulating value which governments can tax or borrow away from the private sector. It’s a political and thus public system of accounting, credit and debt, in which private firms variously participate. So on MMTs analysis, money’s “futurity” is not flatly predicated upon inert past data in the form of receipts or revenue. Money’s “futurity” then derives from mobilizing accounting practices, as we’ve discussed, to create new credit and debt relations endogenously in response to shifting circumstances, perhaps different ends that we might want to pursue. So for us, this is where MMT as an economic discourse stops, and your work precisely begins. What we’ve said is how much we appreciate that your work gives us this rich and non-positivist language for reimagining money as endogenous accounting. We’re wondering if you could reflect on that and perhaps talk about how you see accounting and going forward as a discipline but also a practice for pursuing just ends?

Paolo Quattrone:  First of all, let me say I’m not an expert in MMT, although I do know where you’re coming from. I would say, yeah, definitely money is not a finite resource. The beauty of double entry bookkeeping since the Middle Ages is that you can create money with a stroke of a pen. I’m actually quite surprised that there is all of this enthusiasm about blockchain to create new money. Creating money was so simple with double entry that you did not need all of this fancy technology, costly and environmentally unfriendly, to create. You can create it in a much, much easier way if you have strong institutions that make sure that relationships are managed wisely. 

Then, it goes back to the point that we’ve been discussing for this entire chat: it’s means and ends. I guess that if you treat money as a scarce resource, it becomes an end in itself. If instead it is a means that you can create as, in fact, it happens in banks–banks create money with a stroke of a pen, with the financial multiplier–if you instead think of money as a means to pursue different ends, then the issue is to make sure that you balance the two things and you do not create too much money and too little money. And it depends on what you want to do. 

But of course, that requires a strong governance around this relationship between the creation of money and the use of money. At the moment, I don’t see that happening. I don’t see that happening at the state level. I don’t see that happening at the company level. I don’t see that happening anywhere. I don’t see that happening in any kind of modern institution, which led to a century of prosperity, at least in the Western world. So I think there is a lot of work to be done. Maybe we can have another chat on the reform of the auditing profession and the need to rethink the relationship between auditors and auditing, because that is also part of the lack of proper institutional arrangements to make sure that this relationship between means and ends is governed properly.

Scott Ferguson: Absolutely. One final thought that I am curious if you would want to reflect on with us is you draw on this word and this notion of balance a lot. And this is the promise of ratio in its deepest, genealogical sense. But in the predominant discourse around governance, we hear a lot about balance, we hear a lot about balancing budgets and balancing state budgets. And this becomes the foundation, the unquestioned foundation, for bad governance, for austerity, for destitution, for systemic abandonment and exclusion. So I was wondering, if you have thoughts about these two different understandings of balance. Because I don’t think that that’s what you mean when you talk about the rhetorical machine of the grid allowing for a kind of balance.

Paolo Quattrone: Now, as I said before, it is the same word, speculation, it is the same technique, double entry, but it is for completely different reasons. So the balance does not have to be done in the interest of money. The balance has to be done in the interest of the various interests that rotate around the idea of money. If you reduce everything to money, then that is not balanced. It’s a reduction. I don’t know whether that helps, Scott. Money and finances are one of the different interests that need to be balanced. It’s not the thing in which the balance has to be achieved or pursued. So that is, I believe, what makes the difference between the contemporary forms of governance that are based on that equilibrium and the medieval forms of governance that were based on balance. Balance was a much more poly-focal, poly-vocal issue than to be made or be pursued in the interest of one thing only, which is financial capital.

Scott Ferguson: I think with that, we’re going to close out this beautiful discussion. Thank you, Professor Quattrone for joining us on Money on the Left

Paolo Qauttrone: Thank you Scott, thank you Maxx. Thanks also for the wonderful pronunciation of my surname.

Scott Ferguson: We try, we try. 
Paolo Qauttrone: Okay thank you guys. Perfect.

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

Introduction to Theory: Karl Marx

In this podcast, Scott Ferguson presents an introduction to key theoretical writings by Karl Marx: Economic & Philosophical Manuscripts of 1844Manifesto of the Communist Party; and Capital, Volume 1. Drawn from a semester-long university course titled “Theory for Film & Media Studies,” the recorded lecture takes up three distinct texts in order explore continuities and divergences in Marx’s complex contributions to modern thought and politics. Framed as an advanced introduction that is hardly exhaustive, Ferguson’s lecture strives to orient students to Marx’s contested historical significance and to model forms of situated close reading that resist reductionism.

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Radical Heterodoxies & Parallel Institutions w/ Mat Forstater

Mat Forstater joins Money on the Left to discuss the origins of Modern Monetary Theory (MMT), the vicissitudes of heterodox economics, and the challenges of building alternative institutions in and beyond the academy. As one of the principal architects of MMT, as well as teacher and advisor to many of the more recognized MMT scholars and advocates today, Forstater is perhaps the best equipped heterodox economist to give us the details on the innovative assumptions and arguments that created the firmament for what we now know as Modern Monetary Theory. More importantly, how Forstater came to shape the project greatly defamiliarizes popular assumptions about MMT, which tend to reduce what is in truth a rich intellectual and political movement to a narrow and technocratic set of truisms and just-so stories. From experimental poetry and Black political economy to the problems of futurity and invention, Forstater’s circuitous path reveals MMT’s origins to be far more interdisciplinary and heterogeneous than it is often understood to be by opponents and advocates alike.

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Music by Nahneen Kula:

William Saas: Matt Forstater, welcome to Money on the Left.

Mathew Forstater: Thank you. It’s great to be here.

William Saas: It’s so wonderful to have you finally with us. To get us started, we’d like to ask a bit about your professional and personal backgrounds and how they kind of end up leading our guests to what they became. Can you do that for us and tell us how you came to be involved with heterodox economics, maybe what brought you down that path, and what maybe influenced you the most along the way?

Mathew Forstater: So I guess, at some distance, I can say that I was something of an unusual kid. I was a big reader growing up, and I was very interested in Black history in elementary schools, finding books about Martin Luther King, Harriet Tubman, whatever you could find, and all that kind of thing. Actually, all the way up until I went to college, people thought that I would go into the humanities. I won an English award in junior high school. I wrote, I was not a math and science person. I certainly wasn’t taking any personal finance courses or anything like that. A big moment in my development was when I had gone to public school from kindergarten to the end of 10th grade, and I had been not doing well in school in 10th grade–I always did well in school. So anyway, long story short, I went to an alternative high school for my last two years. And I’m sort of the generation that was alive during the 1960s, but not old enough to participate in it, but old enough to be aware of what was going on. I have older brothers and I watched the Watergate hearings with them.

So I went to an alternative school. It was run by very progressive minded people, you call the teachers by their first names, and there’s no rules practically or whatever. I looked at the classes that I was going to pick from my first semester, and there was communism, eastern religions, and transpersonal psychology. I was just in heaven. This was just like the greatest thing. A course that I ended up taking for two semesters that maybe had the biggest influence on me was conceptual art. It just opened up a whole world for me of art, theater, poetry, the borders between fantasy and reality, audience and performer, and all these kinds of different issues. I was always motivated by social justice issues. I was very concerned about the world, especially after Reagan was elected and was talking about the Soviet Union as an evil empire. It seemed very scary. It really was for me. So I decided, instead of going to college, I moved to a farm. It was actually like a Homestead School.

So there was a group of us on this property. We were growing organic food and learning about solar energy. Our goal was to try to be as self-sufficient as possible. Then, the Three Mile Island nuclear accident occurred. It was just 11 miles away from the farm. It was a big deal, because the radiation doesn’t stop at the gate of the utopian commune. The message that I realized was that you can’t separate yourself, or at least I didn’t feel that you can just go and find some place to make your imaginary utopia. There are still these problems in the world, and you’re not going to be able to fix them here. So after that, I left the farm. Then, I lived on the west coast for a couple years and pursued poetry. Finally, I made my way back to the east coast and registered for my first college course. It was “Introduction to the Black Aesthetic,” taught by Sonia Sanchez, who was a well known poet, certainly in the Philadelphia area. She’s like an institution, but she’s someone who was not as well known as Nikki Giovanni or some other young poets that were part of the Black Arts Movement. But now she’s pretty recognized. In any case, it was just fantastic.

I was able to develop a nice relationship with the professor and we all did some type of performance at the end. This course, at that time, was being offered in the department of Pan African Studies. The department at that time was a very interesting department because one of my professors was Vietnamese. There was a very global, third-worldist view and a lot of emphasis on the connections between Africans in the diaspora and on the continent. So I just started taking different courses in Pan African Studies. In the meantime, I was taking introduction to this, that, and the other thing because I really didn’t know what I wanted to major in or what I wanted to do. Finally, I settled on Pan African Studies. The name changed in the middle of my time there to African American Studies, and some of the faculty changed. Temple University became a center for Afro-centric thinking and an African-centered worldview, laying out the methodology and philosophical foundations, and, of course, the critique of Eurocentrism was a big part of the curriculum and what my focus really became. I started to look at issues both in the US and the anti-apartheid movement, which was also going on at that time. 

So the relationship of race and class is what I was grappling with. How much of what we see is due to class and how much is due to racism, and what’s the relationship between capitalism and racism? Then, I also tried to bring gender into the analysis and the picture as well. So I was introduced to political economy by an anthropologist, actually. I only had two economics classes as an undergrad. There were one or two heterodox professors at Temple, but not anymore, one left. I only saw a little bit of mainstream economics in my introductory class. The teaching assistant had to take me aside, I think, after the second day and say, “You’re right about everything you’re saying, but I have to get through this material. Here’s a bunch of professors, you might like their classes.” I’ll tell you, I took a lot of his recommendations and they were all just fantastic. I was very fortunate to have some fantastic professors even just in these introductory courses. They have a required course for all undergrads called “Intellectual Heritage” at Temple, and it’s taught by dozens and dozens of different people. But somehow, just picking a section because of my schedule, I ended up having some wonderful teachers as an undergrad. I was getting into studying, the library, and researching things just on my own.

So I felt like I wanted to systematically study political economy. Somehow I heard about The New School and saw their course descriptions and said, “Okay, I can go there. I can try to catch up on the technical stuff that I don’t have a background in–the stats, maps, and all that. But I can also take these courses in economic history, the history of ideas, and political economy.” In those days, you had three courses that were all Marxian economics, two introductory, one advanced, and then there was another advanced one that was not required. But we really delved deeply into it. This was the time when the mode of production controversies were going on. I got really interested in that because I was interested in economic development, and I was interested in Africa, but sometimes things affect the trajectory of your career where it can seem somewhat arbitrary. At The New School, the faculty is very small. There’s only really one faculty member for each field area. So there’s one person in international trade, one person in labor economics, and maybe one person in money and banking. If we were lucky, we had all these covered, but if a faculty member would leave–which is what happened, the development economists left–then it took them two years till we had a replacement. And by that time, you had to keep moving on.

I was very fortunate because even though development wasn’t available, race and class was being taught by Rhonda M. Williams. And it turns out that she was only at The New School for two years. I used to say I’m the last person who did a field in race and class with Rhonda Williams. It might have been the first and last. There were maybe three people who actually were able to do it. But in any case, she was doing a lot of really exciting work. One of the things about heterodox economics is that there’s different ways of being heterodox and there’s different ways of being orthodox. So we had some heterodox economists who methodologically were extremely conventional, like almost the crudest type of positivism in terms of just their view of science. It wasn’t really any different from mainstream economists saying economics is a science. People who are heterodox in content, but not method, maybe we could say have a very similar idea of–and we see this in some brands of Marxism–the idea of science and so on.

So there was Rhonda Williams, and also another newer professor, Will Milberg, who is now the dean of graduate faculty, but he was a new faculty member then. Both of them were very early explorers of kind of postmodernism in economics. This was the aftermath of Deirdre McCloskey’s book, The Rhetoric of Economics, which raised a lot of methodological issues and kind of reinvigorated a reflection on methodological issues. So that resulted in all of these different cottage industries opening up in different aspects of methodology. That was very important for me. And the professors, despite the remarks I’m making about methodology and so on, were brilliant. I learned a ton. Before, when I heard things from out of economics, I had a gut feeling that something was wrong with these arguments, but because I didn’t know the language, the models, the terminology, and all these things, I really couldn’t engage with it in a very strong way. So this is what I was doing there. I was learning the language.

At the same time, African American Studies is, by its very nature, interdisciplinary. It is very historical in its approach. The critique of Eurocentrism, I would say, is another part. So anything that would come up, if I would see reference to sociological economics or economic anthropology or whatever it was, and then out of this sort of postmodern turn, finally, reaching economics, that also opened up. With Marx and political economy, there were a lot of ways to engage in cross disciplinary thinking, collaboration, and so on. In the end, I had taken a job for one thing, without even having my dissertation topic approved yet. I was at Gettysburg College in Pennsylvania, and there was a fellow from Malawi, Derrick Gandwe, who was in that department. He had got his PhD at Manitoba which still does kind of have a heterodox PhD program way up north in Canada. So he kind of became like a mentor of mine. But you’re working full time and you’re trying to finish your dissertation. So a lot of my motivation for starting the institutes was to provide students with PhD funding so that they didn’t have to work and do the dissertation at the same time if possible, because it’s important for students to have  at least one year to devote to their dissertation.

What I’ve always wanted for students was for them to have the same opportunity that they do in the mainstream departments. I would say it’s pretty unheard of for people to pay their own way through a PhD program. Most of the time, if you’re getting to that point, there’s a good chance you’re going to be offered some type of support. So heterodox economics has never really had that, except on a very, very tiny basis. I really began to see how it was going to be necessary to talk about institution building in heterodoxy. This was also a time when there was a debate about “big tent” heterodoxy versus all these different subfields or paradigms. You have Marxists over here of one type, and Marxists there of another type, and post-Keynesians of one type here, and post-Keynesians of another type there. And some really felt strongly that you couldn’t mix schools of thought. Heaven forbid, we should do something like that. I mean, it really was kind of incredible thinking about it now, because how else do we move forward unless we are grappling with, improving, and modifying? That means learning from other insights and so on.

William Saas: What years are we talking about right now?

Mathew Forstater: In the 80s. I was at The New School physically from 87 to 92. The word heterodox, you never even heard that in the beginning part of that time period. Maybe just toward the end of that time you started to hear it because Fred Lee was over in England, and he was starting the Association for Heterodox Economics and other things. Before that, post-Keynesianism kind of served a similar purpose in that it was, with some exceptions, less dogmatic and more open. People have made these arguments, and there was a big period where critical realism was all the rage in post-Keynesian economics. It’s this idea of open ontology. In any case, it was more open, and therefore, of a certain humility, because I never saw any one of these schools as having all of the answers. Feminist economics and ecological economics started to emerge. You already had Black political economy back from the 60s and so on. You had these different heterodox professional associations, like social economics, evolutionary economics, and the others.

Post-Keynesians never had a professional organization, which did have some repercussions, because, for example, at the big meetings, in order to sponsor sessions, you had to have an organization. So the social economists, the evolutionary economists, the feminist economists, and historians had their sessions, but post-Keynesians, because they didn’t have a professional organization, they would have their own conference. Those became very important for MMT, because UMKC started sponsoring these conferences. And they were very international and very well attended. Very early on, before the term MMT even came out, a lot of these ideas were being debated at these summer schools. There weren’t just conferences. We would have graduate students and young professors, or people early in their careers, who would come, and do three to five days of hearing from all different speakers. Then, at the end, there would be a full two or three day conference. So these are great experiences, and the Institutionalists started doing one as well, which we also sponsored, and some of these were explicitly interdisciplinary.

William Saas: How did you get from Gettysburg to UMKC?

Mathew Forstater: Yeah, so I wrote my dissertation with Robert Heilbroner. Then, I had my third year review. These days, forget it. If you’re getting one year to finish, that is it. I haven’t heard of people getting more than that these days. So for me to go three years, I mean, really… Anyway, I got done in time for my third year review, but I spent all my research time writing my dissertation. So I felt like I needed to focus on some research and publications, and I applied for a research scholarship or whatever with the Levy Institute. It turns out now, Pavlina Tcherneva, who had been an undergraduate student at Gettysburg, obtained a prestigious fellowship with the Jerome Levy Forecasting Center, which is no longer associated with the Levy Institute, but in those days it still was. So she came to Levy and then Randy Ray had a long time association with the Levy Institute, because Minsky had been his teacher and Minsky was the chief kind of face of the early years of the Levy Institute. His former student, Stephanie Kelton, then Stephanie Bell, had been doing an MPhil at Cambridge, and the Levy Institute and Cambridge had an exchange program. So she came as a Cambridge scholar to Levy. So we all converged on the Levy Institute.

Wynne Godley was there as well. His name isn’t brought up so much these days, but sectoral balances was really kind of elaborated by Wynne Godley, and he was a big supporter of ours in terms of all the stuff on money and everything. He was not as enthusiastic about the job guarantee, but he was on the money and budgeting side. So Randy was on leave from the University of Denver, I was on leave from Gettysburg College, one year turned into two years, and all during this time, we were organizing sessions at conferences and had visitors. Bill Mitchell came from Australia and some others. Basically, we were talking to everybody we could possibly talk with. We were submitting papers to the heterodox journals, of which there are many. And we were going to various meetings. We were sponsoring our own workshops and conferences. We used to call them workshops, but if you look at the lineups of our conferences, it’s unbelievable what we brought together. What we had was funding. So we could say we will bring you here, we can fly you from Europe or Australia, we can put you up, and all that kind of thing, and even for US-based people.

Each conference would have a different theme. We had one on Social Security. Several of the people from the National Jobs for All Coalition we invited participated in that–Trudy Goldberg, Helen Ginsburg, and Sumner Rosen. I hate to say it, but unfortunately, and now I can say for myself as well, heterodox people are not getting big invites all around the world to present their work, share their ideas, and so on. I soon figured out that heterodoxy has created a kind of parallel institutional structure. You won’t let us into your journals? We’ll have our own journals. At one time, there was concern that people’s careers could be affected, because if you only published in these heterodox journals, they weren’t ranked as high. Well, I’ll tell you this, it’s not like I’ve been at Ivy League schools or whatever, but I have never seen a non-economist, Dean, provost or anybody question the journals. They’re refereed journals. A lot of them have been in existence for decades. They have editorial boards, people with prestigious records, and so on. But that’s not a completely satisfactory solution. 

Scott Ferguson: It’s a strategy. So you’re talking a lot about this institutional coalescing around the Levy Institute and everyone sort of on leave, and it’s an extended summer camp, maybe. Then, you’re talking about the way you start inviting people and staging these events, and it’s all very exciting. Is this all “big tent” heterodox? Where is so-called MMT emerging? How is that coalescing? Are there certain topics, problems, and shared social values that are coalescing here as well? Or is it just, “Well, we’re all in the same place and we’ve all got different ideas?” What was that kind of primordial soup like?

Mathew Forstater: So that’s a great question. In some ways, there was a certain kind of iterative process to it. But I used to jokingly say, in the early years, I should be writing a book or an article on the socialization of professions, or the sociology of knowledge, like introducing a new paradigm, what that entails, all the different things that happen, and what are the tipping points or whatever. So we did not all just go to the Levy Institute and say, “Oh, we’re all kind of post-Keynesian,” and then next thing you know, MMT happens. It was an organized thing that we would all converge on the Levy Institute. Pavlina had done an internship with Warren Mosler between her junior and senior year. And as a result of that, she did a crash course in post-Keynesian monetary theory. Her assignment was to write a critical review of Mosler’s “Soft Currency Economics.” She did that, and then she also worked on another paper, which was like a math model type paper.

She was able to participate in the 50th anniversary of the Bretton Woods Conference. There were only three economists at that conference, Randy Ray, Charles Goodhart, and Basil Moore. Everybody else was from the world of finance, hedge funds, or something, but Goodhart was working on the paper that became the two concepts of money. He introduced chartalism and metallism and that whole thing. He was working on that paper, and he even incorporated some of the African Studies references about the colonial tax and that stuff into at least some versions of that paper. Then, Randy had started to work on the book that became Understanding Modern Money. That was published at the very end of 1998, I believe. He and I both had working papers starting in 1997. He had one on the government as the employer of last resort, one “Money and Taxes: The Chartalist Approach,” and then one on functional finance.

I forget what it was called, but basically, he covered what at that time we saw as the three main areas: the history of money and the nature of money, different contending theories of money, the government budget, deficits, national debt, and all of that, and then full employment and the job guarantee, which then was referred to as the employer of last resort, or public service employment, you’ll see that as well. So some of these things had different names for a while. With chartalism, some people really didn’t like that name. I never really saw what the big deal was, but in any case, the bottom line is, we were introduced to “Soft Currency Economics” in the summer of 1996. Then, when Pavlina came back from her internship when she was a senior, she took my seminar in macro and monetary theory, and she did an honors undergrad thesis on these ideas.

There was this post-Keynesian email listserv. Instead of blogs or podcasts or whatever, in those days, it was listservs. And a lot went on on those listservs. There were incredible discussions and debates and dramas. Warren Mosler found his way there. That’s where I first saw his name. That’s where he saw my note that I had a student who was looking for an internship. Randy, and then Bill Mitchell, that’s where I first saw his name as well. These ideas, like tax driven money, that the deficit is just accounting information, and these basic sort of cornerstones or whatever of modern money, I mean, each one had to be completely unpacked and thoroughly examined. And what we started to find out is that these were not completely unique ideas. There was a long tradition in each of these areas. Now, maybe finding them all together in quite that way was new.

But one of the things that I did was look for evidence in the history of economics, and beyond economics, to find evidence of people who had recognized that money could be tax driven, because at the beginning, one of the things that people always assumed is that we were arguing that all money that there ever has been, or ever could be, was tax driven. Or our critics would exaggerate our claims. Instead of saying that in a certain institutional context, then, the monetary system or the budgetary system can be managed in this way. But not saying that under any possible imaginable institutional arrangements this is how it is. That gets into a lot of things about what is money and there were plenty of discussions about this.

Maxximilian Seijo: I was thinking, before we perhaps open up that rabbit hole, I wanted to hover on what you briefly mentioned there, which are your contributions. Because, I think, if listeners haven’t already heard, your background in Black studies and poetry and then coming to economics later offers perhaps a bit of a unique intellectual background that led you to this point on these listservs, and then, importantly, as you mentioned in the institutional context of post-Keynesianism and heterodoxy more broadly. So with reference, perhaps, to this sort of lingering background, what do you feel like your primary contributions to this moment and to this coming to be of MMT were, and how did your background inform the shape that they took?

Mathew Forstater: Right, that is great. So I came to the Levy Institute. My stated proposal was to conduct a historical and interdisciplinary analysis of employment and budgetary policy. In fact, I’m still a research scholar on the website of the Levy Institute. And if you click on me, it still says that that’s what I’m doing, which is fine. My colleagues were taking a super macro look at the economy, and you could state all of the main things about money and so on in these kinds of sectoral balances levels. There are three sectors: domestic, government, and the International sector. But I came out of a tradition within post-Keynesian economics that is sometimes called structural post-Keynesianism, institutionalist post-Keynesianism or post-Keynesian institutionalist. Basically, instead of only looking at things in the super aggregated way, the economy is looked at as a set of linkages among industries. Let’s take labor. Movements of workers between different firms and industries, and the different amounts of activity in different industries and so on, was part of both unemployment, and also that understanding, or that level of analysis, had to be part of full employment policy.

So I did a paper on how full employment policies must consider both effective demand and structural and technological change. And this was actually a little bit controversial among my colleagues, but where one of the interesting parts of this comes in is that what was behind me going into this work was the constant bringing up of the Kalecki article about full employment and why full employment could never be in capitalism. I thought that what was kind of missing in a way from the post-Keynesian tradition, or Keynesian tradition, that you had with Kalecki and Marx was recognizing the functionality of unemployment and excess capacity. So this is the ironic thing, the job guarantee actually addresses those issues, whereas, if you just try to have generic government spending, deficit spending, to pump the private sector up to something close to full employment, if you could even get there, then it would create all kinds of problems because of the loss of the functionality of unemployment and excess capacity. So I did publish a couple papers in this area, but my main interest has always been what we could do with this.

And for myself, like you were saying in your question Max, what are the implications for the goal of environmental sustainability? What are the implications of this knowledge that we have now, of how money works, how the budget can work, how a job guarantee program, looking at all the different programs, what their obstacles are? What if all these jobs were helping the environment? What I came to was the first point is that public sector activities should not be judged on the same criteria as private sector efficiency criteria. People, politicians, or the media are always saying how inefficient the public sector is, and that we should have the private sector do it because it’d be better. Private companies seek to maximize profits and minimize their internal costs, but sometimes, we have other goals that are broader social and macro goals. So the public sector activities are not for profit, and therefore, minimizing internal costs is not the goal. The goal is to perhaps find a cost effective way of achieving independently given goals, or goals that are the outcome of a political process.

That means that we don’t do a cost benefit analysis and say, “Oh, well, guess what, slavery is really efficient,” or these kinds of things. Sometimes something is done because it is the right thing to do. And that is independent of cost in just purely dollars and cents. Open things up. Public sector activities should be geared towards other things. That led to green jobs stuff, functional finance, ecological tax reform, and the idea that people have all these different definitions of green jobs. A green job is a job that is not harming the environment. It doesn’t have to be explicitly performing an environmental service. Of course, some jobs will perform an explicit environmental service, but some like caregiving and the library or whatever it is, practically pure services that use very little natural resources and don’t pollute, they’re not producing carbon. So there’s that piece.

Then, with race and class, on the one hand, I got into the colonial tax and colonial money topic using the example of Africa under colonialism and the way that the colonial monetary system, and how the government used the monetary system to promote the growth of market activity to the wage labor, and all those kinds of things. And on the other hand, I did some stuff on African American issues, rediscovering Martin Luther King’s writings on the job guarantee, Bayard Rustin, the A. Philip Randolph Institute, the freedom budget, and so on. I was like, wow, this is great. In the last few years, one would think that MMT was all about social justice and the environment. But it really wasn’t always that way. So I feel like I was able to, first of all, show how we could be thinking about the use of these policies and this knowledge, and opening up some different lines of research.

The one other part was going back and finding all of these statements that are clearly about tax-driven money in writings by like Adam Smith and all the neoclassicals. It’s unbelievable. And, of course, in Marx I found that stuff in there as well. The thing that became clear was that they all were emphasizing how it’s in a specific institutional setting rather than how a government money can be managed. That part started to come through. Of course, there’s a million more discoveries. All the time, people were sending me things like, “Tolstoy was a chartalist!” But the crazy thing is that there’s a lot more awareness, both within and outside of economics, of tax-driven money than previously thought. And there was a lot more support for a job guarantee type program in history than we knew about. The interesting thing about working with a small group of people on something that seems like new is that you’re talking all the time, discussing and debating, somebody says something and somebody else picks up on it or whatever. It’s really difficult to exactly pinpoint the origin of a certain notion. People like Randy often say at the beginning of their books that this is the result of a group, the research of many people, and the work of many people. It really is true.

So our first real target was to thoroughly introduce these ideas, present them, get them discussed and debated among all the different heterodox groups, and to publish our work, for it to go through the standard refereeing process and all that. Then, the opportunity at UMKC opened up toward the end of our second year at the Levy Institute. And basically, we all went to UMKC. They had a PhD program–an interdisciplinary PhD program. It was very successful. We had to show that our students were going to be able to get jobs. So many wonderful colleagues that we have had came out of UMKC’s program. I’ve said this quite a bit, but when I was younger, I always thought education was one of the greatest sources for peaceful social change, but it takes so long. But now that I’m older, I realize that you can have a tremendous impact over a 20-30-40 year career of supervising students. We’ve got dozens of students around the country who are teaching, publishing, organizing, and leading. We’ve got Pavlina, Fadhel, and Stephanie. They’ve gone beyond, but they started out as our students.

William Saas: So the capsule version of your contribution early on was the question: “what can you do with this?” Underscore under the “do.” That’s something that, I think, a lot of us in the editorial collective have connected with MMT over the years. What are the possibilities that are presented by it? I love hearing every time you talk about the history of MMT and tell this story. But I think that I’ve also encountered other versions or angles on it, thinking specifically about Fred Lee’s History of Heterodox Economics posthumously published in 2009 with Routledge. That “what can we do with this?” as a question is interesting, then you run into “how do we do it?” as a supplement or a second order question, and that’s where you seem to run up against institutions and the limits of one’s own capacities at that moment. Returning to Lee’s book, one of the things that I’ve found interesting and also a bit confounding, is where he ends up–and of course, this is 2009, published posthumously–which is we need to basically win out in the academy and that will be our most direct path to potentially affecting policy in a way we heterodox economists have not been able to get to at this point. And we do that by making sure that our journals count equally with mainstream journal publications and things like that. And we build PhD departments.

And really, a lot of it is institution building within the confines of conventional institution building. So it’s almost as if the theory is that we need to match and overcome what orthodoxy has accomplished, but through the very sort of means that they have accomplished what they’ve accomplished. The part of what continues to be compelling about MMT, and you’ve alluded to this by referring to the students, the second generation, is that it seems to me that transcending, operating, or building institutions outside of conventional institutions has become maybe a bit more part of the story, and especially in the recent decade and a half. I don’t know if you could say a little bit about how you understand after we’ve got the heterodox conferences, we’ve got the heterodox journals, we’ve got Levy, and we now have a PhD department, and then, in the last 15 years, how do you sort of see the institutions of MMT having taken shape and evolved, and maybe in a way that people wouldn’t have expected back in 2000?

Mathew Forstater: Right, I think one thing that has to be brought into it is that, as we were focusing on getting the ideas out there and publishing and establishing the department and those things, the real economy continued to make people’s lives miserable. So the global financial crisis and Occupy Wallstreet, I mean, that was huge for MMT. That’s how this patchwork of chartalism, the job guarantee, functional finance, and sectoral balances became MMT. It is really because of the global financial crisis, the most recent pandemic crisis, and so on. And especially, think about the impetus to MMT just as a result of people seeing the amounts of money that were spent during the bailout in 2008, and then with the pandemic, and the impact that even giving people a couple thousand bucks has on their lives and all the other issues. It connected the academic work with the activism. I really feel like social media was important.

We had the proliferation, at the same time, of Facebook and Twitter groups emerging in this way. I would say the Modern Money Network was a total surprise. We’ve got some law students who are interested and started to hold some events at Columbia. Because the thing about the law schools is that Harvard and Cornell have heterodox people in their law schools. So they have a platform. They’ve got the prestige behind their messages. That was a very important piece as well. Then, you had the activism. You had Alexandria Ocasio-Cortez and the Sunrise Movement with “Green Jobs for All” shirts on in front of Pelosi’s office. It’s crazy, I couldn’t believe it. And Stephanie was working with Bernie Sanders and all that brings–lots of media coverage. Things start to have a life and a momentum of their own that propels things. Of course, you get in all different directions and things as well. I feel like it’s great. I have the opposite feeling of anyone who wants to keep…

William Saas: Keep their cards close to their chest?

Mathew Forstater: Yeah, keep a secret to myself or something. If I insist that I’m going to converse with people who agree with me 100% of the time, I would be sitting alone in a room. Are we going to try to find places where we can build alliances and bridges? There were always some people who had sympathy with part of our project, but not necessarily all of it. And I never viewed this as a problem. That’s just the way things are. We’ll continue to have conversations and so on. You should want to have a pretty broad MMT tent. That is what is healthiest for moving things forward. With the doctoral dissertations, I feel it’s great when students do something different with the material. Zdravka Todorova took feminist approaches on household debt with sectoral balances, chartalism, and post-Keynesian and came up with a very great piece of work. There are dozens of examples like this, such as applications to certain time periods. The amount of work that remains to be done is just so much. We just scratched the surface. And you see now you have got to get to work. That’s why it takes resources. This is where funding students is so important. Of course, we’re not like a department of MMT. We do a variety of things, but they’re mutually supportive of one another.

Scott Ferguson: One of the many reasons why we wanted to bring you on the show is this idea you’re very much playing out, which is, in the name of getting certain MMT lessons out there, there’s been an effort to streamline them and to make them into idioms or easily repeatable sayings. And that’s fine, that work needs to be done. Then, there’s the inevitable misconstruing of all of them and things like this. When I see certain resistances to MMT on the left, and in a certain kind of intellectual left that is in some ways in and out of the academy, or working in like literary magazines or whatever, is they don’t have any sense of this kind of rich interdisciplinary history, which includes the present. There are PhD students, Sunrise organizers, and all these people taking up what I often like to call a shared problem space in different ways, going to work on it, and being like, “Yeah, but we haven’t thought about this deeply important feminist problem of the organization of domestic labor under patriarchy.” I really appreciate the way you’re bringing that sense of richness and heterogeneity that often gets lost in certain more dominant discursive spaces to the table.

Now, I have a question to maybe help wrap us up. So you gave a talk that we invited you to give, a keynote, at our first Money on the Left conference. This was a few years ago back at the University of South Florida where I teach, and you did a lot in that talk. It was kind of performative. It was multimedia. You played a lot of hip hop music clips and you yourself engaged in some poetic practice. I don’t want to put you on the spot, but I’m curious if you could revive some of the ideas and impulses of that talk. Ultimately, at least conceptually, could you talk about what you were doing with what I would call futurity, or a kind of practice, research, a method, a modality, a social dynamic that is oriented toward the future in a particular way?

Mathew Forstater: Yeah, first of all, I appreciated coming down to your university and meeting your students and colleagues. It was a fantastic conference. Your colleagues’ presentations and students’ presentations were incredible. You’ve got a fantastic program going on down there. I’m a big fan and supporter of everything that you’re doing with the podcast and the movement. So the methodology for public policy that I worked on in my doctoral dissertation, and that I’ve published some stuff about, approaches policymaking from this idea that we have to begin with a vision of the sustainable and just society that we want to create. And that, analytically, we work backwards from the vision of where we want to go to find a path that connects that future with where we are now. So the idea is that this kind of working backwards invites the imagination to discover policies that would move us in the direction that we seek. That has always been an important part of how I view things. Adolph Lowe, who was Heilbroner’s teacher, and whose work I was examining in my dissertation, he promoted this idea he called instrumentalism, instrumental inference, this working backwards idea. One of its most appropriate applications is when it comes to the environment, because if we know that the assimilative capacity of the environment has the ability to deal with, say, X tonnes of a certain emission per year, then that gives us the strain, in a sense, that we cannot go beyond. Our goal, then, is given to us by that scientifically informed political process. If we would have just worked forward, then there’s no telling if the amount of emissions would be consistent with the sustainability,

Scott Ferguson: We might work through cost benefit analysis instead of this, right?

Mathew Forstater: Yeah, cost benefit gives the goals. That’s how the goals are determined–if there are even any goals determined and we’re not just wandering aimlessly or whatever. That opens up the whole envisioning aspect of things. And because I draw from outside of economics there’s so much rich material that we can engage with. It turned out that Abba Lerner, because he was also at The New School and a colleague of Adolf Lowe, he participated in this conference that was evaluating Lowe’s argument. Basically, Lerner stated that functional finance was perfectly consistent with Lowe’s idea. It also works very well with what I was talking about earlier with a slightly disaggregated analysis from the super macro level stuff. So part of what the methodology work that I did and that I’ve used, it examines things like following a hunch or guessing things that don’t appear in scientific papers. They sit uncomfortably somehow in a scientific paper, but if you go to scientist’s diaries, letters, autobiographies, and journals, then they’re talking all about this kind of stuff.

So the role of the imagination–C. Wright Mills’ sociological imagination–that fits very well with this kind of thing. The economic imagination, the ecological imagination, however you want to describe it. That took me to all these literatures which are about discovery. And even in the presentation down at University of South Florida, I brought up a Sherlock Holmes quote or whatever, because he’s talking about working backwards. Then, I discovered a few other little interesting things. In the appendix to The Sociological Imagination, C Wright Mills talks about the researchers file. It’s not just a file cabinet full of articles, or now files on the computer, but it’s snippets of conversation that you heard, something you read in the newspaper, a dream you had, etc. All of these things can be part of the discovery process. So the whole process of discovery, of diagnosis, of detection, the main kind of issue that came out of it is that a lot of times we feel things are presented as though it’s just by chance.

Like the eureka moment comes because you poured the wrong liquid into the thing. Those things can and do happen, and we can look out for those happy coincidences or whatever, but the part that I was focusing on was there are things that we can do to enhance our powers of discovery. I got really interested in that and sought to apply it, because, in a lot of ways, there is more than a certain content of heterodox economics, or even interdisciplinary heterodox economics. More than a certain content, for me, it was how do I go about investigating a problem or identifying a problem worth solving, to be able to consciously and intentionally make everything a potential source of reflection or consideration? With all these literatures about entrepreneurs and their powers of discovery in finding profit opportunities or whatever, I see no reason why policymakers shouldn’t be able to use the same powers of discovery to come up with innovative ways of dealing with the most vexing problems that we’re facing. It’s hard to get up every day, it’s so overwhelming. It is part of my lifelong grappling with certain core questions, the relationship between materialism and idealism, and some type of rapprochement or whatever in terms of recognizing material and ideological aspects of society, or what the Germans called the problem of freedom and order.

We can have a sustainable world. We can have eco-fascist people on every corner making sure you recycle or whatever. Well, that’s not satisfactory. And now, with the word freedom, people think it is a violation of their freedom to be told to wear a mask during the pandemic or something like that. But inspiration is so important to me. I find the arts and the humanities very inspiring, especially music and performance. So I’ve had some fun over the years. We kind of had a tradition where I would do poems at the end of the summer school. When you get tenure and promotion, then you can go up to the lectern with your guitar or whatever.

Maxximilian Seijo: I’m sure the expansive grappling will continue. But I can’t think of a better place to sort of conclude this conversation. Matt Forstater, thank you so much for coming on Money on the Left.

Mathew Forstater: Thanks so much for having me.

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

28 – We Have Never Been Neoliberal, What Now?

In this episode, co-hosts Natalie Smith and Maxximilian Seijo argue that the pandemic not only killed neoliberalism as a tacit ideological formation; it also revealed how neoliberal truisms have never captured the actual causal mechanisms and potentials that defined the past 50 years. Fleshing out these claims, Naty and Maxx journey through the work of rockstar economic historian Adam Tooze, focusing in particular on his widely-hailed recent book, Shutdown: How Covid Shook the World’s Economy (2021). Naty and Maxx affirm Tooze’s characteristically thorough demonstration of the myriad ways that the world-wide response to the pandemic, however inadequate, dismantled the pillars of neoliberal governance. Yet they also critique the elitist complicity of Tooze’s methodological commitment to historical immanence and inevitability, tracing such impulses to back to John Maynard Keynes’ fatal dismissal of Abba Lerner’s proposal to do away with balanced budgets and revenue-constraints. For the Superstructure crew, by contrast, proceeding “in medias res,” as Tooze puts it, requires an abolitionist attunement to genuine conditions of injustice and possibility, from #Defund and ongoing labor strikes to contests over #MintTheCoin and the Green New Deal. During the conversation, wisecracks and burns abound, per usual. This one, too, is packed with citations, including loving shoutouts to David Stein, Jakob Feinig, Mariame Kaba, Dan Berger, Emily Hobson, Alex Yablon, Nathan Tankus, and Rohan Grey.

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Music: “Yum” from “This Would Be Funny If It Were Happening To Anyone But Me” EP by flirting.
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Mint After Reading: Philip Diehl Talks with Rohan Grey

In this bonus episode, Rohan Grey speaks with Philip Diehl about #MintTheCoin in the wake of this season’s debt limit showdown. Director of the United States Mint under President Bill Clinton from 1994 to 2000, Diehl is best known today as the person most responsible for 31 U.S. Code 5112(k). The law permits the Treasury Secretary to “mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.” This clause charts a completely constitutional path to avert recurrent debt crises and furnishes a ready framework for a new kind of radical financial literacy. No wonder why much ink has been spilled and many hands have been wrung trying to explain away or dismiss its radical implications. Grey’s conversation with Diehl explores the history of the platinum coin, offering a fascinating and unprecedented behind-the-scenes glimpse of life in the U.S. Mint.

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The following was transcribed by Rohan Grey and has been lightly edited for clarity.

Transcript of #MintTheCoin! – Interview with Former Mint Director Philip N. Diehl by Rohan Grey[1]

[1] Assistant Professor of Law, Willamette University & Director, Public Money Action.

Grey: Well thank you so much for joining me. My name is Rohan Grey, and I’m an Assistant Professor of Law at Willamette University in Oregon. I’m also a Director of Public Money Action, a 501(c)(4) that promotes public education and tries to improve our public policymaking process around money and financial issues.

And I’m joined today for this very special one-on-one interview with Philip Diehl, the former Director of the United States Mint, appointed by President Clinton, and currently President of U.S. Money Reserve, to talk about this idea that’s been taking the world by storm, and getting into the press, about how we could potentially resolve the ongoing and recurring debt ceiling crises that we’ve been experiencing through a provision of the Coinage Act, that authorizes the minting and issuing of platinum proof and bullion coins of whatever denomination the Treasury Secretary determines to be appropriate.

So we’re going to go into some detail about the history of that law, and some of the sort-of edges and boundaries of it. But before I get into that, I’d like to let everybody get to know you a bit more, because you’re the sort-of architect behind this in many respects, and have had a pretty incredible and unusual career. So would you mind telling us a little about what got you to be the Director of the U.S. Mint, where you were beforehand, and what that journey was like?

Diehl: Well, I went to Washington D.C. when I was thirty-nine years old, so I had a long career before that in government, some in politics, but mostly in government and the private sector. I went to Washington to be Legislative Director to Senator Lloyd Bentsen (D) of Texas. And I served in that role for almost two years, until he appointed me to be Majority Staff Director of the Senate Finance Committee. And I was probably the shortest-lived Director of Senate Finance, because within three months Bill Clinton was elected, and a few weeks later Bentsen was chosen as Secretary of the Treasury, and then I went in as his Chief of Staff at the Treasury Department on the first day of the Clinton Administration.

I was in that job – a thankless job, my kids never saw me, I had young kids at home – and after about six to nine months, I felt like I had helped the Senator, and now Secretary, transition into the job. And so I decided that I was ready to go home back to Austin, Texas. And he said, well, why don’t you go look at the United States Mint, that’s a turnaround situation, I know you want to run a company.

And I was never a collector. I knew hardly anything about the U.S. Mint. But you don’t tell the Secretary of the Treasury, “No.” So I went over there, and I was very fortunate because a fellow by the name of David Rider was Director at the time, and he was a Bush Administration – H.W. Bush Administration – holdover. And he and I really made a connection. He gave me a great orientation to the U.S. Mint.

So I went back to the Secretary after three weeks and told him, “Yeah, I am interested. This looks like a real good opportunity.” And that’s a very unusual move for someone who came to Washington because of his policy interests. And this really isn’t a policy foundation, it’s a manufacturing and marketing operation. But I saw it as a diamond in the rough, and I thought, “I could do something with it.” And one of the things that really animated me, and animated the team around me at the U.S. Mint, is we had, and have, a very strong commitment to demonstrating what government – well-led government agencies – can do for the American people. That there’s a real role for an active government.

And I really liked this particular audience that I was playing to – the U.S. Mint customers on the bullion and numismatic side of the business – who are, I used to say, white, male, and over fifty, conservative, Republican. And I said the white male over fifty thing was something I aspired to – now I’m well into that demographic – and I think we really had an impact on them, surprising them in what we were able to accomplish in a whole lot of areas.

Grey: Yeah, it’s incredible, you would think that sometimes people come up through the ranks of the Mint, or they come in thinking that their job is just to keep the lights on, and not make waves. But as you said, you came in thinking of it as almost a turnaround, and you had had experience both on the hill, and in the heart of the Treasury, and seen a sort-of bird’s eye view, and saw what this agency could do and what it could become. And not only a vision for active government, but a vision for how to take an agency and to make it bigger than what it might have been. And history is full of people who’ve really kind of had a vision for making something bigger than what it was when they came into government, and to be creative about that.

So do you mind going into a bit more detail about what your sort of vision was for the Mint, what your agenda was? I know you were there for quite a while, but sort of looking back, what would you say your kind of priorities were, or how do you feel your legacy of what you left the Mint, what shape you left it in versus where it started?

Diehl: I started well, what I thought was small, and ended up being pretty big, and with three priorities that I, in my confirmation hearing, I called those out. And one of them was the financial situation at the Mint – both performance and in terms of the whole financial structure – was a terrible mess. And we were one of the first agencies – because we had private sector-like functions – we were one of the first agencies subject to a new federal law that subject government agencies to outside audits. And eventually that spread to every agency. And our first audit, the U.S. Mint failed. And for any number of reasons. So I said we need to fix that.

The second thing was we had a real problem with customer service to our numismatic customers.

Really all three of our customers: bullion, numismatic, and then circulating coins, where the Federal Reserve is the U.S. Mint’s customer. And I said we needed to fix that, that was a big problem with just performance, morale at the agency, the tremendous criticism from outside the organization because of that failure of performance.

And then the third thing was there was – there is – this commemorative coin program, in which the U.S. Mint produces, upon a mandate of Congress, a series of commemorative coins. And Congress mandates every one of those programs. And this is a way of raising funds for organizations that have access to very powerful members of Congress, and it’s a way of circumventing the appropriations process. So there grew to be a feeding frenzy for these programs, and as a result, by the time I became Director, the market for these coins had collapsed because of abuse, really, by Congress. And so getting that program under control was my third priority. And I could only do that with the help of Members of Congress, especially a couple of committee chairs, to reign in that program.

So that’s really where I started. But as we built our capabilities and our confidence in our capabilities, and there’s a psychological element to that, there’s a personnel element to it, there’s a structural element to it, there’s a financial element to it—

Grey: There’s a precedential element, yeah.

Diehl: Yes, yeah. So we grew in confidence and capability in what we could do. Which ultimately led to a series of highly innovative, entrepreneurial programs, that we had Congress enact, and that we built on to build our credibility and our capabilities. And the first one of those programs was the Platinum Eagle program. And I wanted to—first of all, I’d begun to build a relationship with the new Republican Chairman of our Banking Committee, Financial Services Committee, Oversight SubCommittee, Michael Castle from Delaware. And so I went to him and said we have this idea for a brand new platinum coin, that allows us to – will allow us, if we structure it correctly – to compete in international markets. And we had never competed in international bullion markets before.

And so I asked for a blank slate. Completely unprecedented in U.S. Mint and U.S. coinage – two hundred years of U.S. coinage – history. Where in the past, Congress mandated every little detail, and the Mint could not deviate from those details, had no discretion. And I asked for virtually total discretion to design a coin, based on market research and building a relationship with the person, the company, and the patriarch of the company in Japan – which along with North America are the two big international platinum bullion markets. And so that included everything from design to denomination.

And that’s what we were granted. I drafted that bill, he got behind it and carried it to fruition. It got embedded in a much larger Coinage Act that was designed to fulfill one of my promises, and that was to get the commemorative coin program under control. To limit it. So that’s relevant to the issue of the platinum coin, because it has been described as our intent, and Congress’s intent, to create another collectible. And that was not the intent. The intent was to authorize a bullion coin. And as I sidelight of that, it also allowed us to produce a proof coin, which is a collectible coin. It was never intended to be a commemorative coin of any kind.

So that’s sort of how we got started. And that program was immensely successful. Within six months of launching the bullion version of this coin, we had taken sixty, sixty-five percent of the Japanese market away from another competitor. And we’d also, of course, taken the American market away. And that success laid the groundwork for Congress to pass the Fifty State Quarters Program. We demonstrated our ability to perform on an entrepreneurial project.

Grey: So I want to just take a step back – I want to get into the platinum coin provision in particular, but two things that you mentioned were interesting to me. One is you were talking about the idea that Congress had previously micromanaged all of these different coin programs, and you wanted more discretion. One of the things that I traced out in my research on this issue was that if you look at the debt ceiling – before the debt ceiling existed, Congress would micro-manage the issuance of Treasury debt. You have to issue this amount of this kind of duration for this spending program, and this amount for this program, et cetera.

And in the earlier twentieth century that became increasingly unwieldy as the government got bigger. And one of the goals of the original debt ceiling, if not the primary goal, was to give more discretion to the Treasury to choose how to finance, right? You tell us how much to spend, and we will work out how to do it. In fact, I think it was Secretary Mellon in the thirties that said we [the Treasury] should have complete discretion – using similar words to you – in what kinds of securities we issue, in what denominations, to meet our needs. Get Congress out of it entirely.

And it seems like there’s that trend in general, as the government gets bigger and more complicated, to put more discretion on the executive branch. Not to make the important political decisions, but to execute on the sort-of priorities and commitments. And it seems to me that’s kind of consistent with – that there’s a sort of parallel there – with you getting more of that discretion within the Mint’s sort of authority, the way that the Bureau of Debt Management, or Office of Debt Management would have done with Treasury securities.

Diehl: Yes. Yeah, that’s exactly right. And there’s another element to this, and that is that Congress has delegated more authority to the executive branch as it has become more politicized over decades. And a great example of that is the Base Closure Commissions, in which – because it is so politicized, in terms of who are the winners and losers – that Congress in the past was paralyzed in its ability to make the Defense Department more efficient by closing down bases that had outlived their usefulness. And so what did it do? It turned over to the executive branch a process by which it presented a package of bases to be closed and consolidated, and then that package went to Congress, and they could vote it up or down. They could not amend that package whatsoever. So basically what Congress did was said “put these handcuffs on us, and then, you know, just give us a simple option.”

That’s also what they did with that whole Commemorative Coin Program. I basically put together a Base Closure Commission for these coins, so that there was a committee that was formed that would make recommendations to Congress. And Congressmen would make recommendations to us, but they didn’t have to say no. They could say, “Oh, the executive branch committee over here, they said no.


Grey: Mhm. And you can see a clear parallel with the debt ceiling today, where everybody knows it needs to be increased or abolished, but nobody wants to take political responsibility.

Diehl: Yes.

Grey: And so, for the executive branch to step into the breach and say: look, we’re going to do what everybody knows needs to be done–

Diehl: Yes.

Grey: …but may be politically unpalatable, and that might be to use authority that you’ve clearly given us, you know–

Diehl: Yes.

Grey: …in ways that maybe you want to be able to say, hey, you didn’t want this–

Diehl: Yes.

Grey: …and that’s useful political theater, because you can distance yourself a little bit, but it allows us to keep doing what needs to be done.

Diehl: And that is part of the magic of the trillion dollar coin, is it takes – it depoliticizes the whole issue. After you bite the bullet – or bite the coin – and do it, it takes that issue out of the hands of Congress. Everybody is off the hook, except the Secretary of Treasury and the President. And actually, I think what happens – right now what’s happening – is the trillion dollar coin, and also the Fourteenth Amendment, serve as a failsafe–

Grey: Yes.

Diehl: …on the coin. So everybody can play games with the politics of this, knowing that in the end that there are outs to this. And to sort of settle markets down as they pretend to approach this disaster of the economic collapse of default. And I, you know, I think that’s part of what’s happened this week, when all of a sudden, you know, Senator McConnell decides that, well, let’s put this off. Because there were escape hatches.

There were other things that were going on too, like, you know, the Department of Defense intervened, and said–

Grey: We need to keep the lights on, this is a national security issue.

Diehl: Yeah, we need to pay our people. And so there were other things at play too. But the timing of the article that was written by Felix Salmon, that said, you know, that quoted me, saying, Oh, the Treasury Department could–

Grey: could be done in hours.

Diehl: Yeah, can produce this coin overnight, virtually, if they set up a couple of ducks in order. And that’s the first time, I don’t think that had ever been said.

Grey: No, it hadn’t.

Diehl: And so – and it got tremendous play. As you know, Drudge put it at the top of their page, and then gave a spin to the title that suggested it was already–

Grey: They’re going to do it, yeah.

Diehl: …They’re doing it right now. So–

Grey:  The hyperbole helped bring it further into reality.

Diehl: Yes, yeah, yeah. It certainly blew up the whole story.

Grey: Yeah, and I want to just go and take a step back also. Because you were just talking about taking this out of – about depoliticizing this. But of course, this isn’t about depoliticizing the budget itself.

This isn’t about depoliticizing spending itself.

Diehl: Exactly, yeah.

Grey: That’s still an incredibly political process. In fact, maybe the most central political process for Congress. This is just about honoring that spending once it’s already been committed, and not saying we’re going to ignore Congress, or go back on our debts and things. And I just to sort of connect that, because one of the things that you haven’t mentioned about your legacy – and correct me if I’m wrong about when this, the timing of this – but my understanding is that you were also the Mint Director when the Mint really sort of separated its own budget from the rest of Treasury, and became a nonappropriated fund instrumentality, which means essentially that it funds itself through its own operations. You know, the CFPB [Consumer Finance Protection Bureau] does this with fines, other agencies do this with fines, the Fed does it with its own money creation powers.

But you essentially sort of elevated the Mint back up to an equal status with the Fed in terms of being, kind of, off balance sheet from the rest of the government. Which, when you combine that with the Mint’s sort of, internal powers, makes it a very very, you know, powerful institution. As you said, the Mint has been around for two hundred years, it’s the oldest monetary institution in the U.S. government. But that seems to have been a pretty key moment in making the modern Mint what it is today. Do you have any thoughts?

Diehl: Yes, it absolutely was. And when I proposed this to Treasury I got laughed at. They said, how are you going to get Congress to let go of the purse strings on your agency. And I said, I’m going to do it through the Appropriations Committee. Which made them laugh harder, because of course the Appropriations Committee is where that power is exercised. But I already know at the time that the Chairman of my Appropriations Sub-Committee was going to back it, because he and I had talked about it, and he really–

Grey: You worked on the hill, you know how this works.

Diehl: Well, yes, exactly. But also I was very fortunate, because the new Republican Chairman of the Committee – this was in ‘95, so right after the Gingrich revolution – the new Republican Chairman of the Appropriations Sub-Committee was a conservative – very conservative – Republican. But he and I hit it off on a personal level. And he really liked the idea of what I was doing at the United States Mint, of turning it into an entrepreneurial, you know, business-like agency.

Grey: Believing the government can do something, ironically.

Diehl: Yes, yes. This was before there was this commitment in the party – his party – that the best way of showing the government could not perform was to sabotage it. And so he was not like this at all, a guy by the name of Jim Lightfoot from Iowa. And so he said yes, you know, and I explained that all these things that we need to do, I need to have this flexibility. And so I need to operate off my own profits. The U.S. Mint is a profit-making enterprise for the U.S. government. Our profits go directly into the general fund of the Treasury. And I told him, you give me this flexibility, and I’m going to send a lot more money into the General Fund.

Grey: Which means less government debt, right? Less borrowing.

Diehl: Exactly. I mean, that’s exactly right. The money from the United States Mint, part of it, is exactly the same as tax revenue. And the other part of it, which gets to the trillion dollar coin, is very much like the issuance of interest-free loans, uh, bonds. So the combination of that, you know, really was compelling to him. He carried the legislation. Not only did we get completely off the appropriations process, but we also got the FAR, the federal procurement regulations, were lifted from us. So we took a document that was like *this* thick, and turned it into a pamphlet, to describe to outsiders what our acquisition process was.

Grey: So once again, it’s the story of more flexibility, more discretion.

Diehl: Yes. And I will say this: later on, we went to OMB [Office of Management and Budget] and asked for flexibility around the personnel rules. And I had such a good relationship with our unions that I actually had the endorsement of our unions to lift the personnel rules from us. And when my Deputy Director and I went in, we explained what we wanted to do, and pointed to our success on the procurement and on funding. He said, “you don’t understand. It’s not failure we fear, it’s success.” So we realized, okay, we’re at that point of hitting the Catch-22.

And the concern was, and he said – we said, what’s that mean? – and he said well, if you achieve this kind of flexibility, every other government agency is going to want it. And we said, our response was, “well, if they earned it, why wouldn’t you give it to them?”, knowing that is a very high bar to reach, and not very many government agencies are going to do that. One of the reasons they wont do it is because the professional risk – and therefore the financial risk – that leadership in Washington D.C. takes if it wants to make a significant change in how things work in Washington, and in the performance of an agency.

So there were a lot of things that, sort of came – and we got really lucky. We had friendly Republicans in key positions. But it is, yeah, it is hard to get that kind of flexibility.

Grey: It’s just incredible to hear this story in detail like this, I mean I feel like it needs to be a book or a movie, or something. I’ve spent a fair bit of time studying the origins of the Federal Reserve, and it’s incredible to hear this story – that you sort of almost did single-handedly – when you think about the Federal Reserve’s origins as this sort of confluence of massive banking interests in the heart of a crisis. And you’re just behind the scenes, sort of quietly doing something that ends up creating a level of budgetary and legal autonomy that’s sort of comparable within its own space.

But a couple of things were sticking out to me. One is the Federal Reserve also has budgetary independence, but doesn’t have the same kind of independence with its employees, for maybe a similar reason. So there are court cases and things where they say, look, in one sense the Federal Reserve System is clearly a government agency, but it’s got its own separate budget process, but in certain circumstances employees will be considered government employees.

But your point about the seigniorage revenue being a source of income similar to interest-free loans: at the Fed, of course, they create Federal Reserve Notes; they create reserves, which banks use as money. And the profits that the Fed returns from the assets that it buys by creating those dollars, when it returns it to the Fed, at least very recently, it was booked in accounting terms as Interest on Federal Reserve Notes. So the whole thing was, we can create this one kind of currency, and anything we do within our agency will be sent back as the sort of seigniorage profit, or the charge that we pay on what we earn on creating these instruments.

And so it’s sort of interesting to me that we have this moment where, you know, when the Federal Reserve returns eighty billion dollars a year in this revenue, we say this is great, you know, this reduces the need to borrow, thank you so much. This isn’t against Federal Reserve independence, this is good for, you know, statutory agency independence. But nobody kind of notices that the Mint’s also been doing that, often because the numbers are maybe an order of magnitude smaller. But as you noted, in your tenure they went up. And they could have kept going up. And there’s never been a limit historically on the upper limit. It’s only been, sort of, how visionary the Mint Director has been, it seems like.

Diehl: Yes, yeah, those are good points. And it gets to one of the points I like to make, [which] is: the trillion dollar coin is nothing novel. I mean, it has been made out to be this gimmick. And as you say, you know, it’s [an] everyday occurrence at the Fed, and at the United States Mint. Creating seigniorage – seigniorage being the difference between the face value of a coin, in this case, and the cost of production. And that represents sort of a profit, but really it represents more of a loan in this case, because the U.S. Mint sends a coin – a quarter, let’s say – to the Federal Reserve. The Federal Reserve purchases it for the face value – twenty-five cents. Let’s say the Mint produces it at a cost of eight cents. So that’s seventeen cents, margin, that the Mint makes on that coin. Well, you add up all of that in the course of the year, and that acts as – the U.S. Mint moves it over to the Treasury Department – and that seigniorage acts as a means of funding the government, just like a bond does.

And so the only difference a trillion dollar coin represents, is it has more zeroes on the end of it. And, yeah, that’s a huge thing. But it’s not a different process. It’s not a different concept. In fact, this is a concept – seigniorage goes back, you know, I don’t know–

Grey: Yeah, Founding Fathers.

Diehl: …two hundred years.

Grey: Pointy hats–

Diehl: Yeah.

Grey: …and tin whistles, and, you know, the HBO mini-series.

Diehl: Yeah.

Grey: It’s as American as apple pie.

Diehl: [Chuckling] Yes. Yeah, yeah. And it’s because governments have used seigniorage to fund their operations – the King’s operations – for hundreds and hundreds of years. And Mint Directors in the past, if they shaved too much – if they shorted the amount of metal that was in a coin beyond what the Crown had authorized – they were hung, you know. 

Grey: It was a big deal.

Diehl: It was a really big deal, yeah.

Grey: Isaac Newton was the Mint Director in the U.K, took his job very seriously. Yeah, I mean, two things on that. One is, you know, you say it’s sort of like issuing government debt. But it’s important, and this is where, again, being very clear about statutory language – as a law professor I love this whole moment because it’s forcing people to learn how statutes work – but the public debt limit is quite narrow. It’s for things that have interest and principle, and it includes only a certain group of instruments. So for example, Federal Reserve Notes and coins have never been counted in the national debt. If they did, then we’d have probably accidentally violated the debt ceiling a number of times already.

Diehl: Yes.

Grey:  But not only that, there’s actually been instruments that the Federal Reserve issues – interestearning term deposits, which they started issuing in 2009 – that pay interest, are a legal obligation of the government, but are not included in the debt ceiling. And so there’s a lot of instruments out there – including the Greenbacks that Lincoln authorized, that are still legal on the books at the Bureau of Engraving and Printing – that are not included in the debt ceiling. We could call them debt, we could call them a means of financing, but they are no “Debt Subject to Limit” in the same way. And this coin would be very clearly in that category, not in the category of debt subject to the debt ceiling, because that’s a very narrow category. And that’s sort of one of the other confusions. People say, “oh well this is basically violating the spirit of the debt ceiling law.” Well, no more than issuing a quarter is, right?

Diehl: Yes, that’s exactly right.

Grey: And you mentioned, you know, that this was a sort of bullion coin program initially. And I think this is one other confusion – we were just talking about this earlier – people often think, well, bullion coins have to represent the underlying metal value and nothing more. And the reality – correct me if I’m wrong – is that a lot of bullion coins are sold, you know, over their face value because the metal is more expensive.

But there’s nothing that says the face value couldn’t be more than the metal, and we certainly aren’t on a gold standard, or a metal standard in general. And it’s the face value of the coin that matters. In fact, I pulled up a couple of statutes – 31 U.S.C. § 5112(q)(4), which concerns the sale of $50 denominated gold bullion coins, says that the bullion coins shall be sold for an amount the Secretary determines to be appropriate, but not less than the sum of the market value of the bullion, and the cost of designing the coins, including labor, materials, machinery, et cetera.

So even with regular bullion coins – and there’s another one for § 5112(o)(4)(A), which governs the sale of $10 denominated commemorative gold coins, that says that bullion coins shall be sold at a price that is equal to or greater than the sum of the face value and the cost of designing the coins. So even when we think of bullion coins, we’re not thinking of something that can only ever be the value of the metal. That might be a floor, but it’s not necessarily a ceiling. Does that sound correct to you?

Diehl: Yes, that’s exactly right. And it’s only by practice, and sort of practicality, that the U.S. Mint sells bullion coins at a small premium over the spot price of gold, that represents those costs of production, of marketing, sales, and all that. And that’s because the purpose of the coin is to compete in marketplace with other bullion coins. And so those sorts of price constraints apply because of the intent, and the intent of the product, and the circumstances in which the product enters the marketplace. None of that applies to a trillion dollar coin. Its purpose is very different. And so it wouldn’t make sense for it to follow that model, because it is so different.

The other thing that’s important is there is no language in that provision of law that authorizes the platinum coin that says anything about pricing.

Grey: That’s right – other than that the Treasury Secretary has absolute discretion, right?

Diehl: Yes, yes. So the restraints that are in the statute, that apply to gold and silver bullion coins, aren’t there for platinum.

Grey: And I believe it was Harvard Law Professor Lawrence Tribe that talked about this. He said, you know, if you look at all the other statutes, and they have constraints. And then you look at one that doesn’t. And it was intentionally written to not have the same constraints as the others. Then you have to take that seriously as a matter of statutory interpretation. You can’t say, “oh, they meant it to have similar constraints, they just forgot.” You wrote it! You didn’t forget. You made it.

Diehl: [Chuckling] Yeah, no, it’s a feature not a bug.

Grey: That’s right, that’s right. That’s exactly right. And you mentioned also, you know, there was also this other language for “proof” coins in the statute as well. And there’s been some sort of debate around this. People say well, proof coins means they have to only be entered into as collectibles. And obviously, most proof coins are collectibles. But my understanding – correct me if I’m wrong – is that the word “proof” there refers to the method of production. Can you describe that for people that aren’t that very familiar with the minting process, what proofing is?

Diehl: Yeah, so proof coins are produced in a very different way from circulating coins and bullion coins. And they are produced to much higher standard. Also, they look different. They have a frosted image, typically, and a marred background. They are sort of a fine art of coin production. And so those coins are typically sold to collectors. But there’s no restriction. They could be sold as bullion coins. They could be produced and put into the Fed as circulating coins.

Grey: You wouldn’t do it because it would be a waste of money and high production grade, but you could if you wanted to, right?

Diehl: Exactly. I mean, you could do it – and we actually talked about doing something like this – to put a very small portion of, like, a State Quarter,into circulation through these huge ballistic bags that we send to the Federal Reserve, and they put into rolls and they ship to banks. And we decided that there was enough interest in the 50 State Quarters when we launched it without doing something like that, there was–

Grey: Sort of like Charlie and the Chocolate Factory and the golden tickets.

Diehl: [Chuckling] Yes, yeah exactly, yes. And so, yes, we completely had the authority to do it. The economics of it does not work if you’re doing all the coins like that. If you took a very small, you know, percentage and did it like that, then the accelerant would easily pay for itself, because all these other coins would be collected hoping to get those. And you get all the seigniorage profit on that.

Grey: In fact, I believe it was Andrew Jackson who issued a Gobrecht Dollar that was a proof circulating coin. And you might know the history better than me, but my understanding was that it was the sort of reintroduction of a dollar coin. And so it was a sort of, as you say, an attempt to drum up interest, and to make a big show of it. And so the reason that you used this higher production grade quality was precisely to get the marketing and the attention, more than you might for a regular coin. And that was a proof coin that happened to circulate. So there’s no kind of inconsistency there.

Diehl: Yes. There’s a similar situation that as far as I know was an accident. I was not aware it was happening, I don’t at all know it was intentional. But when the Sacagawea coin was launched, there were some of them that were produced on a more highly refined blank, and those coins became especially valuable collector items once they were discovered, and–

Grey: Semi-proof, huh? Quasi-proof?

Diehl: Yeah, but it had a better strike to it. And as a result we had a similar kind of effect that you’re describing.

Grey: And the idea of, kind of, having a high – you know, you call it the [high] art of of coins – seems to be pretty appropriate for a trillion dollar coin. You know, I’ve always said, people say “what happens if it gets stolen?” or something, and its sort of a funny joke. And yeah, we all get to laugh about it. Of course, if you steal a trillion dollar coin and then try to use it, there’s going to be a pretty strong legal presumption you didn’t get it legally, right? But I’ve always thought it would be great to have some ritual and symbolism around this, especially if it was to save the government from itself and this insanity of the debt ceiling.

When you think about the Federal Reserve and its announcements – you know, the ritual of these Federal Reserve pronouncements – when you think of courts and them wearing robes, when you think of military service and the, you know, the music they play, and the folding of the flag, ritual is very important to our government. And if we were to going to mint a trillion dollar coin, having it to be beautiful quality, and then, you know, having a child walk it from the Mint to the Fed–

Diehl: Yep.

Grey: …and say, you know, here we are, I’d like to hand this over, and then “I accept this on behalf of the American people,” you know.

Diehl: Yes.

Grey: And then maybe on the other side it ends up at the Smithsonian, and everyone can tour it in schools as part of their, you know, American history education. It seems like proof coin, there, is sort of the appropriate one. Even if the law had said “bullion, proof, or circulating coins,” if you were going to create a trillion dollar coin, you’d probably want it to be proof.

Diehl: Yes, yes. Well, not only would you stand out if you carried a trillion dollar coin and tried to use it in commerce, but hard to make change for it to. But yes, sitting at the Smithsonian, obviously you’d have to have it well guarded, but the–

Grey: Alongside the Declaration of Independence, or something.

Diehl: Exactly, yes. But the key to this – and to address another knock that we hear that is fallacious on the coin – the key is that the coin does not, and of course, can not go into circulation. It has no impact on the money supply. And that is the wrap, is that all of a sudden, it’s going to be like Venezuela. All of a sudden, you’re increasing the money supply by a trillion dollars, and you’re going to have all of these disasters and consequences. You know, it never goes into commerce. It’s not like other coins, or currency, or QE [Quantitative Easing] for that matter, in which money is being inserted into the economy. This coin is produced at the United States Mint, goes to the Federal Reserve, stays in a vault. There will be, when sanity prevails and the debt limit is increased, that trillion dollar coin can come back to the U.S. Mint, just like any other coin. That seigniorage is taken off the books, and the coin is destroyed.

Grey: Right. The only spending that would happen is the spending that Congress has already said needs to happen, that should be happening anyway, and in fact is constitutionally required under the Fourteenth Amendment.

Diehl: That’s exactly right.

Grey: The money going out of the Treasury’s account into people’s pockets should have kept going anyway, but for the insanity in Congress, and these misunderstandings that the debt ceiling is supposed to stop us from being able to continue honoring those obligations.

Diehl: Yes, yeah, exactly.

Grey: So, one question – you mentioned there, you said the coin doesn’t need to go into circulation. Usually, my understanding – and correct me if I’m wrong – is that coins are sold to the Fed, and that the Fed sells them on to banks, who then, you know, get it out into the public. But the Fed isn’t the only actor that has bought coins directly from the Mint, apart from collectors and bullion investors, right? There are other ways that coins do get into circulation. Do you want to tell us a little bit about some of that history?

Diehl: [Chuckling] Okay, yes. It’s sort of notorious. So we were given a mandate by Congress to produce a new dollar coin to replace the Susan B. Anthony, which was an utter failure for a number of reasons. And this is something that Congressman Castle and I worked together on as well. And we were given discretion in this case too, but only over the design of the coin. And it was through a design competition that the United States Mint executed, that the image of Sacagawea and her infant Jean Baptiste on her back, during the Lewis and Clark expedition, was chosen for that coin.

And so we did a lot of market research – part of the entrepreneurial basis. The United States Mint hadn’t done that before to any significant degree; certainly hadn’t with the Susan B. Anthony. And part of the market research was to go the banks and the Fed, and say, you know, to make a pitch: you should get this coin, it’s going to be much more popular than the Susan B. Anthony, and they won’t be in the vaults forever. Here’s the market research of consumers that shows there will be this demand. And the response from the banks and the Federal Reserve was, “well, you have to demonstrate to us – actually demonstrate to us – that there will be demand for this cause.”

Well [it was] the ultimate Catch-22, because if we can’t get through the Federal Reserve into the banks, how do you demonstrate the public is going to want it.

Grey: It’s almost like they just didn’t want it.

Diehl: They didn’t want it, yeah. The coins and the Federal Reserve – I mean, the banks and the Federal Reserve, they don’t like coins. And for–

Grey: It’s an unpleasant reminder that there’s other monetary traditions other than theirs, right?

Diehl: Yes. And coins are more expensive for the Federal Reserve: they’re heavier, they’re–

Grey: They have to pay face value, not the paper cost if they buy paper notes.

Diehl: Exactly, yes. And a dollar coin that was highly popular, the banks in particular didn’t like. Because what happens if you have a really popular coin? Customers come into the bank, they ask for it, they come to the drive-through. That imposes a cost on the banks they don’t want to incur. So no way, they weren’t going to do it, we couldn’t persuade them. It wasn’t a big enough issue for the Secretary of the Treasury or certainly the Chairman of the Fed to get involved in–

Grey: Small change for them.

Diehl: Yeah, exactly. Doesn’t matter. Penny-ante. And, so–

Grey: In fact, I believe I’ve read some Government Accountability Office reports saying, you know, it would be much better for costs and things to have less dollar paper notes and more dollar coins, but it’s very hard to get people to use it, and it would certainly be hard if the banks are not actually on board with helping people use it, and actively resist.

Diehl: Yes, yes. So, being entrepreneurial, we decided we’d go around the Fed and the banks. And I had a lunch with the brand new lobbyist for Walmart, who’d never done any lobbying before. He didn’t know this kind of entrepreneurial stuff wasn’t smart in Washington, D.C. So I said, what I want to do is I want to launch this coin on the same date in three thousand locations, Walmart locations across the country. And we will direct ship, you know – and it was, my recollection was it was two hundred million coins over the period of those two months – to all those locations. A huge number. They wanted as much as we could produce, well we couldn’t produce more than that. And so none of the banks ordered it, Walmart ordered it, and we did a marketing campaign, and at the end of January 2000, that coin was launched.

People lined up. People think the Sacagawea coin was a failure. And it ended up being a failure for a couple of reasons – one is hostility in the banks and the Federal Reserve. But when we launched it, people lined up at the stores. They were out of the coins by the end of the first day. They wanted to order more, we were on a production schedule. But when people couldn’t get the coin that they wanted at Walmart, they went to their banks, and the banks didn’t have them. And so they were embarrassed.

And so what did they do? They don’t say, “oh, you know, we made a mistake.” They call their contact at the Federal Reserve. And the complaints all come in to Greenspan, Greenspan calls the Secretary of the Treasury, I get a telephone call, and I explained why we had done it this way, and it faded the heat. But what we ended up doing was, we went back to Walmart and said, “we’re not going to be able to provide the second one hundred million coins.” It’s a government contract, and also they had achieved their objective.

So we took that hundred million coins, and direct shipped them to the banks based on orders they made online.

Grey: On the day.

Diehl: Huh?

Grey: On the day.

Diehl: Yes, yeah. And we direct shipped it because the process of getting coins from the Mint through the Federal Reserve to the banks was so slow that we, you know, it frustrated the demand. So we bit the bullet and direct shipped it to them, and so it kind of ended the controversy.

Grey: It’s an interesting story on two levels, because on one level it’s showing that – you know, people often say well the Fed wouldn’t accept the coin – well, maybe there are other people that would accept, maybe not a trillion, you know, not everyone’s looking for a trillion in cash, but there are certain investors and things that are looking for, you know, a billion dollars in liquid cash and things. And if you could say, “hey, you know, we can’t sell any more T-Bills this month, but we can sell some coins that you can store, and they’re legal tender, and they will satisfy your fiduciary responsibilities to invest in safe assets, you know, I think there could be people that’d be interested.

But the other part of that story is that, you know, we often think that, “oh the Fed said it can’t be done, so it can’t be done.” But the reality is that’s just one opinion of one agency within the government, and there’s other agencies with other opinions, and who ends up winning that battle when there’s a difference is often about who’s more creative in putting pressure in the right way. And the story you just told is about precisely putting the pressure. And you mentioned a similar story in the past about the 50 State Quarters, where the antagonist was the Treasury in that situation, if you want to share a little about that story.

Diehl: Well, opinions are a dime a dozen. And so of course, you have to look behind the opinions at the facts. And on all of these monetary issues, they’re very complex. So it’s hard to sort through, and usually you have to rely on somebody whose judgment and independence you trust. But the other thing is it’s crucial to look at what is the motive behind – the economic motive, the emotional motive, whatever–

Grey: The partisan, the political motive.

Diehl: …the power motive behind an opinion. And also, what is the strategic situation. For example, we are hearing from the Treasury Department and the White House that “no, no, we won’t do the dollar coin, I mean the trillion dollar coin. It’s a gimmick.” Well, okay, that may be a sincere expression of their intent, or their adamant commitment not to do it. But also it’s very clear that the White House and the Treasury Department wanted a particular outcome, which they got by standing firm. And to say, “yeah, you know, the trillion dollar coin is an option” releases the pressure, the negotiating pressure, to get the outcome they really wanted. And–

Grey: It was Margaret Thatcher that famously popularized “There Is No Alternative” as a justification–

Diehl: Yes.

Grey: …for doing anything. And often there was. But–

Diehl: Yup.

Grey: …it was a useful line. In fact, I remember speaking to some senior Treasury officials back – about the situation in 2011, and they said that. They said, “we didn’t want there to be another option,” because–

Diehl: Yes.

Grey: …we wanted to force the Republicans to come to the table.

Diehl: Yep.

Grey: And so anything that showed that this could be resolved on our side–

Diehl: Yeah.

Grey: …was inconvenient for us.

Diehl: And it’s easy to frame that in partisan terms. That, okay, the Democrats were smarter, tougher, stood hard this time, as opposed to last time; they prevailed. But it’s crucial to rise above that partisan – you know, it’s really a partisan dismissal of what’s really at stake.

Grey: That’s right.

Diehl: What’s at stake here is using the debt limit as a cudgel by threatening the country with default. And now it’s happened three times. The first two times, the Democrats compromised. They were the responsible party. And what did that do?

Grey: Yep.

Diehl: That just laid the foundation for the next time that–

Grey: Yep.

Diehl: …you know, that their opponents would push them to the wall. And this time, they took a stand and the prevailed.

Grey: And, you know, Mitch McConnell managed to get, what? Ten Senators, or something, on board with this, or to vote to change the rules to extend it for another two months? But–

Diehl: Very difficult.

Grey: …all you need–

Diehl: Very hard.

Grey: …all you need is a slightly more radical, you know, opposition party, or maybe not three branches, where there’s enough, you know, members on one side or the other. And yeah, I’ve described it as putting a gun to the head of the American economy–

Diehl: Yes.

Grey: …and saying, “we’ll pull the trigger if they don’t come to the table.” And, you know, even if they’re being unreasonable by not coming to the table, the fact that you’re putting a gun to the head of the American economy is its own form of, kind of, degradation of the process, and what the public understands, because you’re telling them something that isn’t true–

Diehl: Yes.

Grey: …to achieve an outcome–

Diehl: Yes.

Grey: …and in doing so eroding that trust in government, and in the fact that you can, that your politicians are actually telling you what is going on. And they’re doing so in a way that is playing with fire. And if it gets burned will affect everybody. And–

Diehl: Yes.

Grey: …we’ll go, “I can’t believe this happened,” you know?

Diehl: Yes, yeah. And in – I think in the past, when it came up in 2011, 2013, this became increasingly difficult to believe. But, there are some who believed – and some very smart people, savvy people, who believed – that this was only traditional politics: using leverage to – in a negotiating situation – to get an advantage over your opponents. I think we’ve increasingly come to realize – not just because of previous debt limit fights, but from other political situations – that there are people in the country who believe that they benefit, in terms of power and–

Grey: Disruption.

Diehl: …political organization by damaging the economy of the country when the opposing party will be held accountable for it. And it’s a form of economic sabotage. And there is still a group of people who would benefit from that. Or who could sustain their position for a period of time in those circumstances. But the vast majority of us would be losers.

Grey: And we saw that, almost, with some of the – some of the people motivated behind Brexit, for example.

Diehl: That’s right.

Grey: Now they might have been quite aware of how damaging it could be to their economy, but they didn’t care.

Diehl: Yeah.

Grey: So I don’t know if you don’t want to talk about the 50 State Quarter Program and the Treasury experience there, if you – we can move on on that one. But the other thing was, you know, people have been saying, “well, the Fed could just refuse to accept the coin, and it wouldn’t be booked as legal tender until it was sold. And so it’d have to be sold to someone first, and if the Fed refused to accept it then that would be that.” And you were telling me earlier about, sort of, the difference in the legal rules around when something gets counted as, you know, legal tender – when it leaves the Mint, versus when it gets to the Fed.

Diehl: Yes.

Grey: And it reminded me a little bit of when I teach in Contracts. You know, people talk about the Mailbox Rule, you know, when you accept a contract. You send it in the mail versus when the other person receives it; it’s a question of, kind of, when was it accepted. But can you tell us a little bit about that rule, and how it’s changed, and, sort of, what you think about it?

Diehl: You bet. First of all, I think this is a highly unlikely–

Grey: Right.

Diehl: …  theoretical scenario, where–

Grey: …the Federal Reserve would have to be refusing to go along with the Treasury, and saying, “we prefer default in this eleventh-hour moment”–

Diehl: Yes.

Grey: …we will be the ones putting our hand up, saying–

Diehl: Yes.

Grey: …‘we’re willing to cause this default–

Diehl: [Chuckling] yes.

Grey: …in the name of Federal Reserve independence, which, by the way, we hope will still be around tomorrow–

Diehl: That’s right.

Grey: …if we do this.”

Diehl: [Chuckling] Yes, yes. That’s one half of the equation that makes it virtually impossible to happen. The other half of it is just politically, the President, and the Secretary of Treasury, and the Chairman of the Federal Reserve are going to have to agree on doing this beforehand. It’s just, it’s inconceivable that the White House would try to jam this into the Fed. But, I mean, there are scenarios you can conjure up where something like that may happen. So–

Grey: I had a colleague remind me that it’s still on the books that the Treasury Secretary can remove the Fed Chairman for cause, and–

Diehl: Yes.

Grey: …maybe this would be moment–

Diehl: Yes, yes.

Grey: …that unthinkable moment where you might actually be able to remove the Fed Chairman for cause, because they’re standing in the way of preventing unconstitutional default.

Diehl: [Laughing] Yes. I definitely think that would be cause.

Grey: As far as stakes go, you would hope–

Diehl: Yeah, that would be cause.

Grey: …that would be high enough. If the President said, “it’s my sincere belief that–

Diehl: Yeah.

Grey: …this Fed Chair is standing in the way of us, you know, preventing default, I can’t imagine the Supreme Court getting in the way and reversing it. So, you know [shrugs].

Diehl: Yes, yes. And I can think of at least three members of the Senate who you could move into the Chairmanship of the Federal Reserve [clicks fingers] that would accept a trillion dollar coin that fast.

Grey: I won’t ask you to name their names right now.

Diehl: Yes, I’m not gonna name them. But they – and not just because it avoids default, but because there are a whole set of other policy issues that come together in the trillion dollar coin that people don’t talk about because they’re complex. Very complex. And they are downstream from what we are talking about here today.

So this caveat here, to answer your question – this is my recollection of what happened twenty-plus years ago at the United States Mint, and why it happened. And I do not know whether it has changed since then or not. I’d be very surprised if it changed because of the reason why it changed.

So during my term and before my term – during most of my term – seigniorage was booked when coins left the Mint loading dock, on its way to the Fed. So in the case of the trillion dollar coin, we, you know – the U.S. Mint strikes it, they send it to the loading dock, a truck takes it over to a helicopter, which flies it over to the Federal Reserve in New York City in an hour. So under that scenario, boom. The seigniorage would be booked immediately.

There was a point late in my term, when it was the OMB (the Office of Management and Budget), I believe – it could have been Treasury, but I think it was OMB – that changed that booking procedure. And changed it so that the seigniorage wasn’t booked until the Fed had accepted the coin. And – a quarter, whatever coin. And the reason – and it might have happened during the Fifty State Quarters Program (that would make sense) which was launched in 1999 – [was] because we were shipping so many coins to the Federal Reserve, that OMB looked at that and said, “oh, we need to change the incentives for the shipment of coins to the Federal Reserve.”

Grey: You’re too successful. You’re getting to many out the door.

Diehl: Well, it was just the concern that some time in the future the U.S. Mint would produce a whole bunch of coins, send them over to the Federal Reserve – or the Administration would order it to happen – and then inappropriately book – “inappropriately” [inverted fingers] book – all the seigniorage.

So – and this is ironic, because – when I got to the [Mint], there was this boom and bust cycle of the production of coins. And as you can imagine, the demand for coinage depends on the economic activity in the economy. More coins are needed when there’s more economic activity.

Grey: We had a coin shortage last year. I think it’s still enduring, because–

Diehl: Exactly.

Grey: …of the pandemic.

Diehl: Yes. And so – and this was magnified by the Fed’s terrible model for projecting coin demand. And so I had a very smart young economist, who I brought in and said, “uh, we gotta fix this.” Because what happens is we fall way behind in production when all of the sudden all of this demand comes in. And then so we’re so slow in cutting off production, the Federal Reserve vaults fill up with coins. Then those back up into – we had them not in vaults, but in hallways back in those days.

And then when demand comes back up, all that flows out; we have to crank up production. And so the irony of this is that we [the Mint] were responsible for changing the model that the Fed used in cutting down this shipment of excess coins and seigniorage and everything.

But – so, that change occurred. And that would obviously affect the trillion dollar coin, because if the Fed refused to accept it, then the seigniorage wouldn’t be booked. But as we were saying, that’s a highly unlikely situation for all kinds of reasons. It, you know, it would only be done as a failsafe measure. And –

Grey: And the rule that the OMB set could just be changed, right?

Diehl: Well that’s the other thing. Yeah.

Grey: It’s not legislative, it’s not statutory. It wasn’t Congressional intent. This is all within the executive branch, this is all internal baseball between different agencies and internal politics, right?

Diehl: [Nodding] It wasn’t even a regulatory rule change–

Grey: Right, so it wouldn’t need to go through the–

Diehl: …that required public notice and all that stuff. It was just [snaps fingers] you know, they’re just done.

Grey: So if Biden needed to change that rule five minutes before that coin got struck, he could, potentially.

Diehl: Yeah. Absolutely, yeah.

Grey: So I know we’ve been going – we’re [at] the end of time, but I’ve got one last question, sort of. You mentioned all of these downstream, second-order implications of the coin. One of the things that I was writing – and found this, you know, whole issue so fascinating – is because, you know, I was an elementary school teacher. I like social myths and public narratives – about how our government works, that provide the basis for us to understand the world we live in – that are accessible to people.

A colleague of mine – a sociologist named Jakob Feinig – talks about this term “monetary silencing:” where average people are taught to, you know, “you don’t need to know about this stuff. It’s very complicated. There’s people in the room – you know, who wear suits, who have finance backgrounds – they understand all of this stuff. You shouldn’t try to understand it at all, you know?

Diehl: Yes.

Grey: We need economic literacy and monetary/financial literacy in schools, but what we really mean is you,you know, you should balance your checkbook. You shouldn’t learn how the government actually works, and how this sort of ‘veil of money’ works.

And even, you know, very respected scholars who I otherwise respect, you know – there was an op-ed in the New York Times by Peter Coy, just recently, about this – they would say, “look, yes, it’s a Noble Lie that we can’t make money out of thin air, and things like that. But, you know, even if Noble Lies aren’t great in some situations, we shouldn’t probably be drawing attention to this too much right now.” And at least to me, if you look at the alternative, it’s this catastrophic debt ceiling that we keep coming back at. It’s politicians saying we can’t afford to deal with climate change, we can’t afford to deal with poverty, because we don’t have enough money.

And as you said before, it’s a useful political kind of rhetoric, to say, “oh, there’s no alternative to austerity. There’s no alternative.” But if there is an alternative, then these myths are not just things that keep the lights on – they are things that actively harm us. And maybe we could be looking to a new set of myths. Something that meets our new moment and our new needs.

And if we’re in a world now where – you know, bitcoin, and dog[e]coin, and all these things – people have embraced the idea that you can coin an asset out of thin air. It could literally be made of zeros and ones on a computer.

Diehl: [Chuckles] Yes.

Grey: And the value is: how people accept it, how people use it, what’s backing it, has it got the force of law behind it, et cetera. That, if we think about coins, there’s actually maybe a time for a renaissance of coins as a sort of symbol of the money power–

Diehl: [Nodding] Yeah.

Grey: …and going back to that two hundred year history. And one last little point on that before I get your thoughts is: I know that we’re in now this world of government digital currencies – we’ve been talking about, you know, they say a “central bank” digital currency.

Diehl: Yes.

Grey: And I’ve testified to Congress, saying “why don’t we talk about coinage? Why don’t we talk about digital coinage?” Because if you think about a bank account, there’s a third party in the middle. There’s not as much privacy. In fact, there’s a whole third-party legal doctrine that says you don’t have privacy if you put your money with the bank. But even paper currency has a barcode. Coins are the original, anonymous money. If it’s in your pocket, it’s yours.

And one of the earliest forms of digital currency that was tested by a government was Canada, and it was the Royal Mint. They created the “Mint Chip” program–

Diehl: Yes.

Grey: …and it was an attempt to create a digital coin. So maybe, you know, I’d be curious to your thoughts – as we’re entering a digital world, as we’re discussing how to create a whole new form of currency, that maybe the Mint should be in the room. Maybe we should be thinking about this beyond just the Federal Reserve. Beyond just a better bank account. And what lessons we can learn from the history of coinage – and from the design of coinage – even if it will be, you know, a digital equivalent.

Diehl: Well Mike Castle – Representative Mike Castle – back in, probably, ‘96, ‘97, had a Congressional hearing on the future of money. And I testified at that. And all these issues sort of came up in a primitive form.

Grey: You were talking about stored value cards at the time, if I remember that correctly.

Diehl: Yes, yeah, that’s exactly right. Stored value coins. And this is one of the things that I was – you raised one of the issues I was really intent on at the time – was that coinage is the ultimate private exchange. Cannot be traced.

And that – in those days, people weren’t concerned about privacy. I mean, it was amazing to me how nonchalant people were about privacy. And then we saw all that take off with social media. Where people told their life stories, and said things online that inevitably would come back to haunt them. And people just sort of didn’t care about it.

Well now, especially after 9/11 and the surveillance act–

Grey: The Patriot Act.

Diehl: Yeah, Patriot Act. People woke up to what that meant. And so, you know, it’s begun to sink into the culture. And I think you’re absolutely right.

You know, coinage is the physical embodiment of that set of privacy values, which are being expressed in what I believe is a highly-dangerous-to-individuals-form in crypt[o]currency. And also, you know, has the potential of destabilizing the larger economic system. So–

Grey: If the only kind of privacy we get is these volatile crypto private-currencies–

Diehl: Yes.

Grey: …then it will be a very bad day for privacy, because–

Diehl: Well, if we–

Grey: …it doesn’t have the full faith and credit of the United States. It doesn’t have that whole infrastructure. You can’t use it at a store, necessarily. All those kinds of things. 

Diehl: Well we’ve lived through that before too. Leading into the Civil War, when before there was the American Greenback.

Grey: Greenback, yeah.  

Diehl: And so you had all these banks issuing their own currency. And yeah, you know, if you were using it locally you knew something about the stability and reputation of that bank. But the further you got away from that bank, that note would still be used, and people didn’t know, you know, what was the providence behind this note. And–

Grey: I remember someone saying it used to be better to get a counterfeit note on a good bank–

Diehl: [Chuckling] Yes.

Grey: …than a good note on a bad bank.

Diehl: Exactly right, yes. And the U.S. could put up with that, economically. And there wasn’t the political will to do anything about it until the Civil War. And then the U.S. federal government – number one – had the ability to do it because half the nation who opposed doing anything about that left Congress. And the other was: we need to finance, you know, the war.

So necessity bred a change. And unfortunately that’s how the government works; our government works. It reacts. So there will have to be some disaster that occurs around cryptocurrency that will drive Congress, the Federal Reserve, the regulators, to do something about it. Hopefully that occurs somewhere else, not in the U.S., and we learn the lesson from somebody else.

But let me address the assumption that underlies this question. And that is that people don’t really understand fiat currency. I think that may have been true in the past. Probably was true in the past. But people have driven into their minds, over and over again – certainly since 2009, with the QE, and the, you know, and the opening, basically, of the flood of the money supply into the economy to save the economy (not just the U.S. economy, but the world economy) – people came to understand that what fiat currency means.

And they don’t necessarily understand what it means: the “full faith and credit of the United States Government.” What that means. But – especially when you’re threatening to default on your, you know–

Grey: Especially when it doesn’t mean as much as it used to, maybe.

Diehl: Yes, yes. So I think people are getting that. The other thing, why people are being educated on that, is that a conservative mantra has been against fiat currency [and] for the gold standard. And, you know, that’s been the case since, you know, ‘33? Since FDR got us off the gold standard. And – well, informally–

Grey: They’ve been predicting the–

Diehl: …and then Nixon took us off. But – so I think the predicate has been laid for the trillion dollar coin. People just don’t – it looks like a gimmick. And when you think about it, this is a branding problem.

Grey: Yep.

Diehl: Because “QE” (Quantitative Easing), it hides what it does. Those words, it sounds really complex. Beyond our comprehension. Whereas a trillion dollar coin sounds ludicrous, you know? Grey: Yep. What we’re doing is we’re easing, quantitatively–

Diehl: Yeah.

Grey: …with a trillion dollar coin. Let’s just, Mint Quantitative Easing. Yeah. And you’re absolutely right. You know, there were newspaper headlines: “oh trillions of dollars have been created.” If that was going to cause a panic in the streets, where was it? Where was it the last ten years? When the last debt ceiling crisis happened, even Standard & Poors downgraded the U.S. credit rating. And what happened? People flooded into Treasuries, not out of them.

And I remember Neel Kashkari, last year – the President of the Minneapolis Fed – said, “we have an infinite amount of dollars that we can use to save us from this crisis.” I’d never heard a Federal Reserve person use the word –

Diehl: [Chuckling] No, that is pretty good.

Grey: …“infinite” in public before. Maybe in private, but not in public. And the New York Times had an op-ed headline saying, “the Coronavirus money is being pulled out of thin air.” And if that’s not going to cause a crisis, you know, I think you’re right. The idea that the public can’t handle this truth that it’s too big, it’s too scary – even if that had some credibility in 2006, it doesn’t have the same credibility in 2021.

But maybe you’re right. Maybe it does take necessity to breed government action. And maybe we do need to get even closer to that debt ceiling cliff, you know, before we will entertain the unthinkable.

Diehl: If I could–

Grey: Sorry.

Diehl: If I could make one other point, that has really been impressing on me under these current circumstances. There will come a day when it’s inevitable: what comes down must also go up. And I’m talking about the inflation rate. And all know this in the back of our minds, that once the inflation rate goes up, and the federal government is no longer paying what is essentially zero-interest on an inflation-adjusted basis for, you know, on its bonds. When inflation goes up and we have to pay more, and we have thirty trillion dollars in debt, then we are going to see interest payments – the financing of that debt – devouring larger and larger sections of the federal budget.

Grey: Yeah.

Diehl: And coinage – and seigniorage – is one of the ways to think conceptually about how to deal with that. And this is particularly relevant in terms of the whole starve the beast strategy, [which] is that we will build all these deficits, at some point the government will have to face reality, and will have to start cutting social security, and killing all the old New Deal and Great Society programs. And Obamacare, now. All that will have to die, and there won’t be any choice.

Well, there are choices. And we just need to be aware that that day is gonna come.

Grey: And we need to be preparing pre-emptively to do that marketing work, and do that public education, and building the institutions. And I know I speak to people, and they say well, you know, even if the Treasury issued zero-interest financing, the Fed would pay interest on reserves if it wanted to raise the interest rate. So it doesn’t matter, which way.

And I say to them, “but you know it’s very different in the public mindset if this is the cost of ‘borrowing’ or the cost of government spending on one hand, or if it’s the Federal Reserve choosing to pay money – for free – to people because it wants a higher interest rate. If the Fed wants to do that – if it wants to take responsibility for paying, you know, hundreds of billions of dollars of interest as part of its monetary policy – it can take responsibility for doing that, and see whether or not that’s the best way to actually limit inflation.

There were debates in the ‘70’s, in the ‘50’s, about using other forms of qualitative and quantitative credit regulation, and other ways to limit, you know, investment in the economy – to cool the economy down – that didn’t require raising interest rates through the roof like Paul Volcker did. And my guess is when it’s easy to blame the Treasury for those interest payments, then it’s a lot easier for the Fed to raise rates. If the Fed had to own the politics of raising rates like that – and giving free money to interest-earning, you know, people who hold interest-earning reserves, or other assets issued by the Fed – and had to take responsibility for that on their balance sheet, my guess is they would be a little more creative about finding other ways to manage inflation.

Diehl: Yes, yeah. Yes.

Grey: Well thank you so much. It’s been an absolute pleasure, Director Diehl. I honestly feel like this is the kind of conversation that will hopefully go into the history books. Because I’ve never heard these kinds of stories from within the government before. So thank you so much for taking the time with me, and for your voice and for your courage in speaking out. And I hope I don’t have to see you again because we don’t have this problem recurring, but–

Diehl: [Chuckles] Yes.

Grey: …maybe we will, and I look forward to connecting again in the future. Thank you very much.

Diehl: My pleasure. Thank you.

End of Transcript

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


We are thrilled to present the very first Superstructure episode rereleased with a brand new transcript, brought to you by the generous effort of friend-of-the-show, Mike Lewis.

Framed by a cold open from Chapo Trap House’s recent Bernie retrospective, hosts Will Beaman and Maxximilian Seijo inaugurate the Superstructure podcast with a discussion of the failures of a reified left wing imagination. To chart a path forward for an MMT-informed leftist praxis, they critique reductive castigations of spectacle, damaging affirmations of scarcity and zero-sum politics as well as a burgeoning ‘anti-woke’ left-right coalition.

Transcript: Mike Lewis

Link to our Patreon:

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

Superstructure: Critique After Bernie Transcript

Amber A’Lee Frost  00:00

You’re trying to convince people that the media is just a bunch of fucking spectacle and to ignore and not let them psych you out.

Will Menaker  00:08

Well, I mean, but that didn’t happen. And it didn’t happen here either.

Amber A’Lee Frost  00:10

No it didn’t happen. But it didn’t happen here either. But you know what, that’s going to have to be the thing that we do. Like, sorry it didn’t happen last time. Sorry it didn’t happen this time. But that’s the thing. Yes, it didn’t work that time. It didn’t work this other time. But that is the challenge. It’s going to be hard. And we’re not going to succeed at it most of the time. But, you keep doing it.

Will Menaker  00:27

Oh, the question I just have is, who are we talking to? Are we talking to like—and let’s talk about America specifically—clearly, an absolute majority of Democratic primary voters, the people who vote in democratic primaries, if they didn’t believe what the mainstream media was saying about Bernie, they took the message from it that he was unelectable. In either way, he was not an option for them no matter what he said. And then there’s the other group of people who we were hoping to get; the people who are not taking their cues from the media, either by believing what they say or taking their attitude toward Sanders as, like an indication of his viability. And not enough of them were reached to be mobilized to vote for him. So where? Because your rhetorical attitude is going to be different depending on which group of people you’re talking to.

Amber A’Lee Frost  01:23

Yeah, obviously. But…

Will Menaker  01:26

So I guess the question is which one, which group of people is the one that maybe in retrospect, should have been addressed more explicitly with a specific message? Or in the future should be?

Amber A’Lee Frost  01:38

I think the latter, just because, and I’m not saying this is a moral position, just because I think they’re the bigger group of people.

Will Menaker  01:45

Right, but we’ve seen that even though they’re a bigger group, they are harder to reach.

Amber A’Lee Frost  01:48

Well, we’re trying for a harder task.

Will Menaker  01:51


Amber A’Lee Frost  01:51

We’re doing something hard.

Will Menaker  01:53


Amber A’Lee Frost  01:53

No one wants to hear that. Like, you’re going to fail like nine times out of ten. Because this is very hard.

Will Menaker  01:57

People do want to have…they need some sort of I mean…Yeah, they might know they’re gonna fail, but they need to know that they could win.

Amber A’Lee Frost  02:03

Well, I’m telling you: we can win.

Will Menaker  02:07

Alright, but I guess … how do you get to the people who have decided that politics is not real for a good reason? Who saw the Sanders campaign and were completely unmoved by any part of it.

Amber A’Lee Frost  02:21

I don’t have like that kind of alchemy.

Maxx Seijo  02:27

Will, what did we just listen to?

Will Beaman  02:31

So that was Chapo Trap House reflecting on Bernie dropping out of the race.

Maxx Seijo  02:37

“Reflecting” might not be the right word.

Will Beaman  02:39

Basically, reiterating everything that they believed before the race is probably a little bit more accurate. This stood out to me as a kind of paradigmatic example of what a lot of the reactions from Marxist left that I’ve been seeing have been. It’s just they disagree, but there is consensus on a kind of a hopelessness, and Amber just kind of takes a different, you know, attitude towards that, which is basically that leftists need to just toughen up and keep going.

Maxx Seijo  02:57

It’s interesting, because I think what you said just there sort of crystallizes, you know, pun intended, perhaps crystallizes the why we’re talking to each other right now, which is that it seems like the guiding response to Bernie’s loss, you know, if we can call it that, has been hopelessness and a real inability to articulate a theoretical and political path forward for the left in the US that isn’t a sort of retrenchment or reduction of its scale and aspirations.

Will Beaman  03:54


Maxx Seijo  03:54

And on Superstructure, you know, which, I suppose we could take a bit to explain the title as well. We reject that vision, and we think that it’s one which, because politics never stops, it’s one which will actually condition and produce a set of outcomes that are radical but quite destructive.

Will Beaman  04:22

Right. The name Superstructure: it’s something that for Marxists, I think, probably immediately sounds like a huge self-own, but that’s kind of why we’re doing it because I feel like what’s guiding this response is the idea that ideas are the problem, or they’re a distraction. And the media is basically it’s a distraction that you need to ignore. Yeah, right. And everything that isn’t a grind basically is a spectacle. And this is actually something that goes pretty deep into the core of Marxism, which really is this skepticism of ideas, of thought, of communication, of everything that is not this sort of class struggle by sheer numbers and force that there’s no way around it except, you know, having exponentially increasing our, you know, number of people that we have phone banking and things like that. And, you know, none of those things are wrong or bad to do necessarily, but it does create this reaction to what I think should be looked at as an ideological loss, as well as a literal loss. It creates a reaction to it that’s sort of like, well, that was our one chance after these 30 year cycles where the left gets a chance to win, basically, by doing the same thing. And if there are lessons that they want to take away from it, they’re are going to be you know, kind of slight adjustments. No new theory creation is on the table. And Maxx, you and I come from, you know, different backgrounds a little bit, but we’re in the same milieu which is, you know, Modern Monetary Theory. And basically the idea that this is a new paradigm that actually opens up a lot of new, a lot of new political opportunities that we wouldn’t see before.

Maxx Seijo  06:28

The spectacle. Another way of putting it is it opens the left to alchemy, right? It opens the left to a sort of magical thinking, but I don’t use that in its reductive, like negative terms. I think it opens the left to the possibility of creating things out of thin air, which is what money, right, is and it’s a political creation throughout. And so yeah, it’s interesting to hear and to have so clearly encapsulated in the discussions around Bernie’s loss, this sort of, “well, you know, we’re gonna lose, and we’re gonna lose most of the time. But we need to ignore the spectacle, and we need to keep…”

Will Beaman  07:17


Maxx Seijo  07:17

I mean, it’s essentially, I mean, it deconstructs itself, right? The reason why we lose is because we ignore the spectacle. We’re trying to reject alchemy, and if we think of it along those terms, and if we think about, you know, the ability to actually exert political power over the spectacle, and to actually reject the very concept of the spectacle in the first place, which is what I mean, we could easily call this podcast The Spectacle as well as, you know, rather than Superstructure, which is to say…

Will Beaman  08:00

Maybe we should, we haven’t released this yet. Yeah.

Maxx Seijo  08:03

Which is to say, ultimately, that the new paradigm has to be, we have to be immanent, right? And I’m normally someone who in my work, in my thinking, rejects philosophical immanence. But, the left lacks a real immanence to the spectacle, and to the “superstructure” is that it assumes the solutions, this sort of utopian aspirations, or even just pragmatic aspirations of a left political project, is about getting outside of money, getting outside of the social relations that we all share and participate in on a daily level. We have to just ignore the media. We have to, you know, we have to ignore all that stuff and go to the place where power rises from, right? And this is, like, on the other end, a sort of critique of this sort of philosophical category of immanence, which would posit that they’re reducing it down, the source of being as such is not just the material, but it sort of reduces down to this sort of fundamental level with which power rises up, right?

Will Beaman  09:30


Maxx Seijo  09:30

Ground up. And everything else on top is pure domination. It’s bile politics. It’s all these things, and we can talk more about that at length, but I think it’s important to frame what we see this podcast being as an intervention into the realm of praxis and what a left political praxis means for the aesthetic level, at the economic level, at the level of struggle to say that we ignore our leverage, and the capacity to build just, inclusive structures, social structures at our own peril, because we can’t ultimately get outside of them. Right? I mean, that’s the sort of the lamenting history of critical theory is, we can’t get outside them, so we have to work through them. And it’s one thing to pay homage to, well, we can try to work through them, or to set up these like binaries of electoralism versus immediate class struggle, but ultimately, electoralism, or a media class struggle. It’s all political. And it’s all inside the structures of society as such, and so strategically, we have to work with ideas, and we have to work with material struggle. They have to be linked and strategically leveraged. And so what Chapo and the sort of ChapoJacobin-left lens has done is set up this imagination that Bernie was it because Bernie leveraged our only theoretical apparatus to its nth degree, and it failed.

Will Beaman  11:39


Maxx Seijo  11:39

What is there to do now?

Will Beaman  11:40

Yeah, and the failure, basically, it takes the form of, you know, like a sand castle getting knocked over or something, you know? Like it, it really is, like, we have to start all over, you know, with this kind of building this like Katamari ball of working class power, that the reason that, you know, they use visuals, like, you know, “Rising” and, you know, “bottom up” and these things is because there are appeals to, you know, to physics and things that don’t involve ideas.

Maxx Seijo  12:12


Will Beaman  12:13

You know, ideas, the reason that they think ideas are spectacle is because they believe that power, essentially, is totally immanent, and the ideas are secondary, you know, like, whoever’s the biggest guy on the block is gonna get to decide what all the ideas are, and then we’re all going to be kind of consuming them or something. But until we kind of, you know, take over through this mindless and demoralizing thing that we try again every three decades when there’s an opening.

Maxx Seijo  12:36

Yeah yeah. Yeah, yeah. And I think it’s also important to say, like, we’re not Hegelians. We’re not trying to retrench and say, well, ya know, we reject materialism and blah, blah, blah…I think another way to put this, which is to say that, if Marx wanted to keep the dialectic, and essentially keep the idea of universal particularity, what we’re trying to do is to take what materialism is, and sync with how the material and the idea, constitute and mutually constitute one another. Which is sort of in the spirit of Marx, right? It’s in the spirit of Marx, but it’s important to say that, fundamentally speaking, there’s a anti teleological core to this project that we share, and obviously, we’re not in any way the sort of origins of this. But there’s some…

Will Beaman  13:58

Yeah, and by anti teleological, you mean that we’re against the idea of a predestined path that we’re on a gravitational drift toward.

Maxx Seijo  14:10

That’s right, right?

Will Beaman  14:11

And a way that erases the kind of conscious world-making that we do through, you know, not literally just through coming up with ideas, anybody can come up with an idea, but it is nevertheless ideas that tell people what, ideas that condition what people believe is materially possible.

Maxx Seijo  14:32


Will Beaman  14:32

And so the ideas are organizing the material world. Ideas in a certain sense, you know, once they’re established and become going concerns that are, you know, reproduced along with the rest of society, you have something where, what Marxists believe is the superstructure: this kind of passive reflection of our material circumstances. You know, some of those things should constitute the base, as well. The superstructure is the base. I guess is another way of putting it.

Maxx Seijo  15:08

The superstructure is the base and you know, unless we realize that and invert that structure. I mean, and again, we’re being perhaps a bit cheekily immanent here. We might even reject binary as such, but until we leverage political agency through an ideological formation as a process of political creation on all fronts, right? On all fronts. We won’t have a cohesive and universal project. Right? I mean, that’s been the left’s fracturing problem since the beginning. But I think we’ve opined on this enough, and, you know, it could be useful then to go into a few examples of how this sort of idea is manifesting that this one that we’re critiquing that is sort of encapsulated in that Chapo clip throughout other facets of the sort of dominant left media structure.

Will Beaman  16:18

Yeah. So part of what I wanted to do is survey the landscape a little bit, just because it seems like we’re at a breaking point now where they feel like “okay, the left have lost, we need to look around ourselves materially and see, you know, who’s there that we can build a coalition with.” You know, being real politic and pragmatic, and all of that kind of thing. And what you end up with basically is well, it’s all the Trump people, right? Like, it’s, you know, and maybe not literally diehard MAGA people, but there is an idea that to the extent that it’s successful to rail against identity politics and “wokeness”, then that’s something that the left should do if it wants to be relevant, because that’s just kind of how everybody is thinking already. And I don’t think that there’s really a better example of that right now. The most advanced case of this sickness I guess, I would say is Rising, the show on Youtube from The Hill TV; seems to have tapped into a lot of like The Young Turks audience, some Bernie people, some conservatives, but mostly it’s like a Crossfire-esque show that has a “left wing populist” and “right wing populist” debating for a mostly pro-Bernie audience that is basically being warmed up to the idea that the real, necessary discourse in order for the left to have any power is going to be debating in good faith with “right wing populism.”

Maxx Seijo  18:02

Who hosts that show again?

Will Beaman  18:04

So Krystal Ball is a former MSNBC person. She is the left populist, the right populist is Saagar Enjeti who is a former Daily Caller person. The Daily Caller is the media outlet that Tucker Carlson founded. They’ve had a couple of official crossovers with Tucker Carlson now where Krystal will go on Tucker’s show and kind of do like, you know, “I’m just at my wit’s end with the bad parts of the left.” And then they’ll you know, kind of commiserate on, you know, the anti identity politics or hating corporate democrats or something like that. And, yeah, I mean, it’s just, you know, you can hear the basic structure of what Saagar says, a lot representing right wing populism, you know, is this sort of idea of economics being about trade-offs, and that mapping onto something like immigration where you can’t let migrants into the country because they’ll drive down wages and harm the working class. And then of course, there’s a long history of leftist kind of flirtations with this sort of idea.

Maxx Seijo  19:28

It’s important to say that Bernie is not outside of this, right? Bernie is also culpable on these terms, too.

Will Beaman  19:33

Yeah right, completely. Yeah, he said open borders was a Koch brothers proposal, you know, blah, blah, blah. And to the extent that Bernie is better on it, it’s because he stakes the entire claim that it’s possible to have open or almost open borders during times when it is possible, because we’re just doing so well economically that it’s not going to be like, you know, a big loss for us. So Jacobin had a review of their show, which I think just kind of encapsulates what I’m concerned the kind of institutional left’s reaction is going to be to these kind of flirtations with with Red-Brownism. So he, the reviewer talks first about Krystal, you know, then about Saagar. He had nothing but good things to say about Krystal. And then Saagar, he says: “Repeatedly [Saagar] warns us that the ‘electoral failure of the American left will be economic progressives kowtowing to woke identitarians.’ I agree with him — but what’s maybe more important is that I agree because (like Saagar, I suspect) I want the Left to win. Is Enjeti a secret Bernie-bro receiving late-night directives from Jeff Weaver in undisclosed DC parking garages?” You know, and then goes, “I think not” but you can’t figure out why this guy who keeps you know, sprinkling in that he’s a Republican who used to work for Tucker Carlson is sounding a lot like a Marxist to him. And it’s, it’s bad. And then later in the review, he says, talking about Krystal Ball again, and the consensus between them: “Ball’s arms-length relationship with “socialism” might have something to do with one area where she and Saagar agree most — not on markets nor the role of government, but on the invidiousness of identity politics. Unlike many millennial left wingers…” Notice the word ‘millennial’ is always used as a modifier…

Maxx Seijo  20:41


Will Beaman  20:52

… to go by that, you know, these are university students. Yeah, their children, basically, they’re superstructure. “Ball is completely uninterested in identitarian pandering. She loathes it. And part of Rising’s successful formula is that the hosts reject the “woke” culture-war approach to politics that so many on the…” oh god…”is that so many on the young, hip Brooklyn-by-Oakland left mistake for politics.”

Maxx Seijo  22:06

Brooklyn-by-Oakland is one of the most heinous…Ughhhh

Will Beaman  22:09

Yeah, I mean, it’s brutal. It’s also just really funny whenever Jacobin, you know, kind of does. It’s just you can just feel the self-loathing.

Maxx Seijo  22:19

Yeah the Cosmopolitan. We are the Cosmopolitan elites. Like, that’s the ooo…yikes.

Will Beaman  22:24

Yeah, we have to check ourselves that we’re not, that our globalist roots aren’t gonna betray the working class.

Maxx Seijo  22:32

It’s so funny, because this actually reminds me and it’s something that the left spent so long making fun of is this, like, this really reminds me of the sort of JD Vance kind of Hillbilly Elegy in reverse, right? So after 2016, the liberal wing of the Democratic Party really thought, “Oh, well, we haven’t been listening to these, you know, these white working class voters in Pennsylvania and in Michigan, and in Ohio, and we have to go on the ground. And we have to give them a voice.” Right? “We have to look at them with nuance, and really take into consideration why they hate Black and brown people so much.” And, you know, obviously like this is all not to say that we shouldn’t take everyone into consideration, and that symptoms and racism isn’t filtered through an entire social structure of scarcity and ideology that can be addressed at its roots. Right? Which is not–that’s not what that is. It’s about naturalizing and reifying the ideological and economic “realities” that a left political movement has to address.

Will Beaman  23:18


Maxx Seijo  23:53

And to say that “Oh, okay, the Brooklyn and Oakland, left woke identity…”

Will Beaman  24:02


Maxx Seijo  24:03

Brooklyn-by-Oakland – excuse me for not paying homage to the literary sophistication. The Brooklyn-by-Oakland elite, the Brooklyn-by-Oakland sort of woke identitarian left needs to take a backseat like I don’t know, I mean, it’s one of those things that as you’re suggesting, if The Daily Caller and Jacobin are agreeing, and if you really can’t see why that’s a problem, I really, that’s a bad sign. And it comes down to this question of the spectacle and ignoring the superstructure and ignoring identity politics, and the alchemy associated with a non-class base, reductively class-based vision, what dependence and what inclusion and what a sort of unified or universalist lens brings. Because the moment we start reducing to class, we start excluding.

Will Beaman  25:19

Right, and they have a way that they talk about identity itself, even though they believe that identity is bullshit, they also seem to believe that it is scarce and that you need to protect the identities of everybody that you need in order to win. And therefore, you know, you shouldn’t alienate them with woke identity politics, and, you know, blah, blah, blah. And, of course, it all comes back to, you know, denying the ability to just like, they deny that you can create money and give it to people to you know, build something new, they, they similarly deny that you can paint a new picture of the world that includes everybody, you know, and there’s a connection, you know, between the fact that they think that, that the world and everything in our lives is a scarce thing that we’re fighting over. And that therefore we all need to make make sacrifices for each other’s interests, which are opposed to each other. But ideally, you know, there’s like some kind of a happy medium that we could find. And the idea that politics itself is just kind of redistribution through either, you know, the dispersion between wages and salaries at the point of production, or through taxation, basically. There’s just no discussion on the left about building a new world, it’s just fighting over the world that has already been created solely on the terms of people who had no intention of including everyone.

Maxx Seijo  27:02

Yeah, it’s such a great lens to think through it. I mean, one gets this sense that, like, the majority of the last sort of five years of US politics has been a debate over whether we should be taxing whiteness, to pay for, you know, a space for Blackness, or taxing Blackness to pay for a space for whiteness. And, obviously, we need to shatter that entire structure. And I think, you know, something that probably is going to come up on this show, as we move on more is gender and the question of, really the malleability of identity forms, and how that actually can be mapped back on to economic formulations, in a non-zero sum way. And I don’t want to get too far ahead, but that’s just a sort of signpost for listeners to think about what we can expect on this show. And I think now would perhaps be a good time to move to another example of this sort of thinking.

Will Beaman  28:07

Yeah, so it’s not even just the Marxist left. I mean, don’t get me wrong, like it is the Marxist left. You know, you have other podcasts like Red Scare, you know, that just had Steve Bannon on. You know, things like that, but even among people who are, you know, interested in fiscal policy as something that’s constructive, and not just redistributive, it’s, you still get this refrain that is basically this kind of the same sound finance logic, you know, that they’re applying to just culture and identity instead. So I wanted to read something from a really big Twitter thread that Thomas Fazi had a couple of months ago now. I think this was right after the big labor wipe out when, you know, kind of similar to what’s happening in the US, you know, what was happening there is you have basically a bunch of Marxists who had kind of dug their heels in on defending zero sum terms. And actually, before I even get into Thomas Fazi, I guess I should set it up with an article that James Medway wrote. James is a policy adviser to John McDonnell.

Maxx Seijo  29:29

Former policy adviser John McDonnell.

Will Beaman  29:31

Former policy adviser

Maxx Seijo  29:32

Shadow Chancellor for Corbyn’s opposition.

Will Beaman  29:36

Right. Yeah, and so I won’t read the whole thing, but there is a section that starts literally with “the economy is a zero sum game.” “The economy is a zero sum game. This is the starting point. Understanding this was critical to the success of the 2017 Manifesto. Failing to understand it was critical to the failure of 2019. The economy has grown weekly since 2008. Real wages have not, and public services have disintegrated. An economy that behaves like this in which some people get richer, but most very visibly not, is one in which the broad promise of growth is broken down. Many people perceive the economy to be, broadly speaking, a racket in which a minority at the top are doing well at the expense of others. And they are broadly speaking, correct.” So we have growth in this finite world, but for some reason, we’re getting all this economic growth, and we’re still, you know, just producing this shit world. So what he then gets to is where we would just be like, okay, well, maybe we should talk about growth differently in a way that’s, you know, inclusive, he says, “To see the economy like this is to see it as a zero-sum game whose brutal logic is this: I can only do better if somebody else does worse. If I want to be better off, someone else must be worse off. The political logic that follows from this is equally simple: to talk about winners, you first have to talk about losers. You will get a license to describe the new world you want to build if you first describe, to be blunt, how it will be paid for.” Which is basically like, you know, you only get to talk about the new world that you want to see if you put as a disclaimer that we’re really just moving things around in the old world and not building anything new.

Maxx Seijo  31:30

And it’s so just mind bogglingly, like, upsetting about this is the fact that this is how Nancy Pelosi views the world.

Will Beaman  31:39


Maxx Seijo  31:40

This is the Nancy Pelosi vision of the world. That’s why you need PAYGO. Right? I mean, it’s so interesting to think about it in these terms. Because how do you then go to an electorate and say: we want to, for example, build houses for the homeless, and just do that, and give people who are “rough sleepers”, as it’s called in the UK, a place, a space to live.

Will Beaman  32:24

Yeah, in order to talk about that, you have to first say whose space you’re taking away.

Maxx Seijo  32:29

Exactly, right?

Will Beaman  32:29

So you have to tie the existence of homeless people to parasitism.

Maxx Seijo  32:36


Will Beaman  32:37

The non-existence of someone else.

Maxx Seijo  32:39

And we have the space!

Will Beaman  32:40


Maxx Seijo  32:41

We have the space! I mean, isn’t that obvious? And so, it’s one of those, you know, I mean, I think there’s gonna be a sort of theme, which is just: I am angry. I am angry about the world and about these naturalizations of scarcity, and that’s gonna come out because you know, what? The left, you know, sure, the right, they’re reactionary, they’re racist, they’d much rather kill half the earth than cede any ground and have to be defeated. But the left is reifying that worldview. And that is deeply, deeply upsetting for anyone who believes any sense of universal justice and universal inclusion.

Will Beaman  33:30


Maxx Seijo  33:31

And it’s one of those things that played out in the Labour election, and, you know, there’s a way in which, to be nuanced about it, it’s sort of understandable, you know. You tell a precarious polity that someone has to lose. Someone has to lose. Of course, they’re going to think that it’s them. Right? And these are people like, and that’s not to say that the polity as such, are this sort of middle class, white cosmopolitans, right? I think we even saw this playing out in Biden’s popularity in the South, and I’d be interested to bring on more perspectives on this, but there’s a lot to lose. Even for people who are marginalized, people have a lot to lose, and to tell them that we can’t do anything better, unless we lose.   

Will Beaman  34:29

Right. Or that you’re not really going to lose because there’s this global financial elite that actually has all of the money. It’s very easy then for that to, you know, obviously it begs the question of why aren’t we retrenching into nationalism, and national identity?

Maxx Seijo  34:47


Will Beaman  34:48

If the core of all people can more or less be okay, which is what the left is basically arguing, then, we’re supposed to still be giving things up to external actors? Like the whole thing is, yeah, and it just paves the way for people to critique the Meadway position on the ground, basically correctly pointing out that it’s weak.

Maxx Seijo  35:20


Will Beaman  35:21

But in a way that affirms some sense of expansion, but only on the terms of the Nation. And one big example of this that we saw is this guy, Thomas Fazi, who is, you know, a prominent MMT-adjacent person. I think he would definitely identify himself as MMT, but we want to be clear that there’s a distinction that we’re drawing here which is basically: if you accept that money is boundless and abstractly mediated creation of society is boundless, then you can’t keep talking about everybody’s place in the world, as if it’s not also, you know, like that also turns on whether or not we’re choosing to use our boundless potential to give everybody space in the world. And Fazi is a really good example of somebody who, you know, kind of mobilizes the rhetoric of, you know, the government could just deficit spend, but we’ve had that ability taken from us by the EU, which is, of course, true, in a sense. But the narrative that comes out of it, basically, is that we’ve been alienated from our own sovereignty by the global elite, and what we need to do is unlock the power of the nation-state, but realize, then—and this was kind of his sleight of hand—realize then that the nation-state is dependent on a culturally-fixed subject, if that makes sense.

Maxx Seijo  37:16

And territorialized, as well.

Will Beaman  37:17

Right. Yeah. So in this Twitter thread, he says, “The woke left likes to vilify the nation-state, but all the major social, economic and political advancements of the past centuries were achieved through the institutions of the democratic nation-state, not through international, multilateral or supranational institutions.” Which, you know, I mean, there’s, I’m pretty sure I can think of some examples of internationalist movements and internationally-coordinated.

Maxx Seijo  37:48

No, no, no: we’re just gonna, we’ll pass right through that one.

Will Beaman  37:52

Yeah, actually, let’s just skip over that counterfactual. “Furthermore, modern concepts of “natural identity” of national identity…” You see a little Freudian slip, there.

Maxx Seijo  38:04


Will Beaman  38:05

“…are incredibly ‘progressive,’ based as they are on transcending individual particularities – sex, race, biology, religion, etc. – to create cultural-political identities based on participation, equality, citizenship, representation.” I just I love how kind of paradoxical this little line is, you know, that we’re transcending individual particularities in order to create a universalism that’s exclusive.

Maxx Seijo  38:35

Yeah, well, it’s just yeah, it’s an individual identity-particular social relation. That’s what the nation is. You critique a internationalist vision that seeks to sort of take these given forms, which are ambivalent these nation-states, and sort of create some sort of universalist project in order to transcend them in order to just round down that same logic as a mode of justifying the exclusion which you ultimately want to conduct. And it’s so funny to me, and this also comes back down to the sort of Meadway, like, essentially he’s teeing up fascism here.

Will Beaman  39:22


Maxx Seijo  39:23

Which is to say that you’re not going to out-exclude the right. You’re not going to out-scarcity the right. I’m sorry.

Will Beaman  39:34

Right. Because they’re the ones who believe in Manifest Destiny and believe that you should take maximally in a zero sum situation. So of course they’re going to be the ones who are making a more compelling vision than your fully-costed.

Maxx Seijo  39:48

Yeah. Fully-costed, fully-automated luxury communism. I mean, I’m sure there’s many ways to metaphorically like render this just complete absurdity of this vision. I mean, essentially what the left has been trying to do is walk on to the field, right? And Meadway talks about, you know, the economy as a zero sum game, and it’s to accept that this thing called the economy is this sort of thing, right? Not a social relation that we have agency at varying levels of the process over. And to then say, “Okay, well, we’re gonna play your game on your your field. We’re gonna play your scarcity struggle game, and on your terms, and we’re going to try and beat you where you have the advantage and the upper hand. Because, yeah, sure we have these morals that they hamper us. They make us strategically less effective. They make us worse at the game.”

Will Beaman  40:59

Right. Which is such a repeating trope that you hear in all the postmortems about Bernie.

Maxx Seijo  41:05

Yep. We’re worse. We’re not as we’re not as ruthless, right?

Will Beaman  41:09


Maxx Seijo  41:10

Chapo has gone on about this about Hillary Clinton, just how ruthless she is. “We’re not as ruthless. We can’t win this game. We lose most of the time because we don’t have the alchemy that the right does.” But you know what that alchemy that the right has is? It’s the full embodiment of the commitment to scarcity that the left is just is dabbling with and hoping that it can, you know, have a little exclusion as a treat. Instead of rejecting the logic of exclusion in the first place, and really taking on a non-zero sum vision that calls into question—it really calls into question. This is unsettling. And I understand how unsettling this is. The fact that all of these forms—what constitutes the economy, what constitutes growth, what constitutes identity—these are malleable; these are up for debate; these are not biological forms.

Will Beaman  42:06

Yeah. Well, I would stop you there and continue reading from Fazi because he actually has a theory of national biology that I want to get into.

Maxx Seijo  42:18


Will Beaman  42:19

Yeah, he says, “While national identity is, of course, constantly evolving, the pace of the change is everything.When the national community perceives the pace of change to be too fast (for example a too-rapid inflow of immigrants with very different cultural and social norms), it naturally, instinctively…” like white blood cell, no I’m just kidding. “…instinctively reacts against the breakdown of social cohesion. To equate this with racism is absurd.” Yeah, and in case any of us were thinking about racism, for some reason, while he said that.

Maxx Seijo  42:55

Yeah, yeah, yeah, no. Famously “borders,” they’re good for the left! They’re good for, you know, communities of color. You know, it’s funny that there’s one thing like, we’ve been shit-talking a lot of the sort of established left, but there is a segment of the American left that has a sort of nuanced understanding. And, you know, and most importantly, a historical understanding of…

Will Beaman  43:08

Right, yeah.

Maxx Seijo  43:30

…the forces that have been at play here. And I’m thinking as well of the likes of, you know, some like Daniel Denvir, who hosts The Dig podcast. In his book about how the American border and the struggle for not only immigrant rights, but also indigenous rights as a sort of function of, of borders, and territorialization has been the crux of the left’s fight for justice. And it’s been the crux of the right’s project. And you mentioned Manifest Destiny, and I also think Greg Grandin despite a lot of problems that I have.

Will Beaman  44:09

Future friend of the show, Greg Grandin. Yeah.

Maxx Seijo  44:11

Future friend of the show, Greg Grandin. A lot of the problems I have with his framing, also, like historically captures this is that, you know, Fazi is not your friend. Blue Labour is not your friend. Amber A’Lee Frost. Red Scare. They’re not your friend. Right? These are people who represent a segment of “the left” that will capitulate to The Daily Caller. They will. They will sacrifice. They will make pragmatic sacrifices.

Will Beaman  44:48


Maxx Seijo  44:48

In order to “attain power”. And you know, historically speaking, you know, if you look to the Weimar example, if you look to other examples, this is a sort of mode that has not turned out to be one that forwards the inclusive vision of what the left needs to represent and what we will posit⁠—this sort of non-zero sum MMT-inflected ideological project⁠—needs to represent.

Will Beaman  45:21

Yeah, I mean, it’s just put simply, it’s a lot easier to defend your humanity if it’s not on zero sum terms, you know? If it’s not on the terms of I have a right to exist even though that’s going to bring down wages a little bit. You know, which is, it’s the position that really good people on the left, and you know, the reason why I strongly identify with the left even with people who I don’t think are MMTers yet is because I think that we do, nevertheless share values. And I just think that MMT is, you know, you need that non-zero sum vision in order to realize them, and in order to not just be plunged into a huge kind of pessimism, you know? And you saw that kind of like, when we opened with the with the Chapo clip, you know, I mean, Matt Chrisman was just extremely, extremely pessimistic. You know, Amber was in the acceptance stage of grieving already and was ready to move on to newer and better anti-woke alliances.

Maxx Seijo  46:31


Will Beaman  46:31

Yeah, coalitions. Right. Yeah, just another good member of my coalition that I need to win.

Maxx Seijo  46:36

Yeah, and it’s funny, because this is a sort of nice way to actually think about what came of Bernie’s campaign that was actually quite, quite inspiring, which was. And I think, the impulses are there too, even within Chapo Like, there’s a lot of things that they talked about, and did that was, that was really moving. And important. But the Brooklyn rally with AOC, when Bernie said to, you know, look around to your left and right, and really see the shared humanity of everyone, it really foregrounds the fact that, you know, I’m sure people look to their left, and they look to their right, and there were people in the top 5% of the tax bracket.

Will Beaman  47:23


Maxx Seijo  47:24

I mean, which is not to say that people in the top 5% of the tax bracket aren’t privileged in some sense, or don’t have more power or don’t have far too much power over the political process. That’s not the point. The point is, is that you don’t need their money. We don’t need their money.

Will Beaman  47:41

Yeah. We shouldn’t be hearing from that “Are you willing to pay higher taxes for somebody that is different from you,” you know, or something.

Maxx Seijo  47:49

Right! And that’s not what Bernie was saying either.

Will Beaman  47:52


Maxx Seijo  47:52

Right, then that’s important. And that’s one of the things that, you know, which is why Bernie is so important for the left. But it’s one thing to say “Bernie is all we have and ever have. And his ideas are all we have are all we’ll ever have.” And it’s another thing altogether to say, “There are kernels of a path here. We need to hone in them. We need to develop them. We need to build a cohesive vision out of them and leverage every site of power we have over the political process along the way.”

Will Beaman  48:35

Yeah, I mean, it’s profoundly pessimistic to look at this situation where because Bernie lost, even though we are now completely throwing paying for Coronavirus relief out the window, the first time we’ve done that for anything, like ever in decades, you know.

Maxx Seijo  48:59

Except for wars.

Will Beaman  49:00

Right. Yeah, except on the terms of, you know, righteous exclusion that we’re gonna need to do.

Maxx Seijo  49:06

Wall Street, wars, righteous exclusion.

Will Beaman  49:06

Yeah. But no, like, this really is the first time in a while that, like, there is an ideological paradigm shift. And, you know, I mean, there’s Ross Douthat was just on on The Daily, you know, the other day. Ross Douthat, The New York Times columnist…

Maxx Seijo  49:20

Yeah. You have to listen to that? I’m sorry, Will.

Will Beaman  49:27

Yeah, well, you know, living at home during the summer has its perks. And then it’s not so perks. But yeah, I mean, even he was saying he thinks that, you know, now social democracy is on the table, more or less. So he’s more optimistic than the left is.

Maxx Seijo  49:46

Ugggh. I mean, we could critique even what his conception of social democracy is, but I think…

Will Beaman  49:53

Yeah, to the extent that he wasn’t lamenting it, it’s probably because it was just like some kind of a Herrenvolk like. You know, Scandinavia, for white people.

Maxx Seijo  50:04

We can have a little bit of Scandinavian racism as a treat.

Will Beaman  50:08

Yeah. So like, I just want to cap off the reading from from Fazi with, you know what, what, what it all leads up to for him. “This is not an argument against the evolution of national identity. It is an argument for respecting a national community’s right to have a say in the pace and form that such evolution takes. To ignore the latter is, quite simply, political suicide.” I just I love the use of the word suicide here because it just…

Maxx Seijo  50:39

Oh yeah.

Will Beaman  50:42

It just completely gets across that creation is not an option: if things change, it’s because we’re dead.

Maxx Seijo  50:48

That’s right.

Will Beaman  50:49


Maxx Seijo  50:49

It’s only a death drive.

Will Beaman  50:50


Maxx Seijo  50:51

That’s all there is.

Will Beaman  50:51

So he says “We are now in a position to offer a different explanation of “social conservatism”: this is simply society’s self-defence against those factors – internal or external – that are perceived as threatening its members’ need for community, belonging, rootedness and identity.”

Maxx Seijo  51:09

Signed Carl Schmitt.

Will Beaman  51:10

Yeah, I mean, that is just like, holy shit, the math is off.

Maxx Seijo  51:14


Will Beaman  51:15

Yeah, I don’t know how you have internal, setting aside the problematic external thing, but like the fact that they’re internal, you know, that there are people who are internal to our society who really are external to it, because they’re not part of the program. You know, it’s the nationalist conception of the Marxist idea of what the economy is, you know, which is, you know, this is the material world the way that it is, you know, this is the material political body the way that it is.

Maxx Seijo  51:47


Will Beaman  51:47

And all we can do really is…

Maxx Seijo  51:51


Will Beaman  51:52

Yeah! Very, very slowly improve things, but not too quickly. And it’s really interesting also, that this is basically how Krystal Ball will talk about anti-racism or transgender issues or anything like that, you know, where she will kind of say, you know, “of course, I’m on your side, you know, on this one leftists, but you have to understand that these things are going to take time.” She talks about, you know, managed progressivism in the same way that that people like Fazi are talking about managed migration, as well as manage progressivism.

Maxx Seijo  52:28

Yeah. And I mean, we’ve been going for a little while here, but I do think as we’re sort of starting to wrap up this first episode and think about the way we move forward, it’s important to say that at some level, right, we here are wholehearted proponents of a non-zero sum material vision for the left. But at the level of ideas, this is not a view that should be tolerated.

Will Beaman  53:04

Yeah, we’re not interested in a debate with Krystal Ball.

Maxx Seijo  53:07

No, we’re not. We’re not interested in debate. She represents a reactionary anti-left trend. And that’s a trend that has to be stamped out. And we have to win that debate. And so it’s important to say, like, non-zero sum is not a sort of participation trophy for all the competing intellectual approaches to left wing progress. No, no, no, no, don’t confuse the fact that we allow a space for all people, for all life to flourish, and we demand that space, as allowing a space for ideas that…

Will Beaman  53:55

That are predicated on the opposite of that.

Maxx Seijo  53:57

That are predicated on the opposite of that.

Will Beaman  53:59


Maxx Seijo  54:00

And that is the central gambit, I think, of this podcast. And ultimately, I think that the rise of the MMT project, and the MMT movement or things like the Modern Money Network, has been through the insistence on that non-zero sum vision as a matter, not just of a sort of intellectual fancy or we would like it to be this way, but as a matter of the technical facts. A matter of the technical operations themselves. And that’s the vision.

Will Beaman  54:01


Maxx Seijo  54:01

I think this is a pretty good place to leave it, as well.