21 – Film Theory of the State

In this episode, cohosts Natalie Smith, Will Beaman & Maxximilian Seijo reflect on some ill-fated responses to the right-wing insurrection at the Capitol, utilize feminist psychoanalysis to articulate a film theory of the state, and meditate on the mental health side of an MMT-informed left-wing praxis.

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

Historicizing the Neoliberal Blockbuster (Preview)

This Money on the Left/Superstructure teaser previews our second premium release from Scott Ferguson’s “Neoliberal Blockbuster” course for Patreon subscribers.

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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.

Blockbusters:

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)

Money as a Constitutional Project with Christine Desan

The Money on the Left Editorial Collective presents a classic episode from our archives along with a previously unavailable transcript & graphic art. In this episode, we are joined by Christine Desan, Leo Goettlieb professor of law at Harvard Law School to discuss her excellent book, Making Money: Coin, Currency, and the Coming of Capitalism. Desan argues that money is a constitutional project, countering the dubious “commodity” theory common to contemporary economic and legal orthodoxies. Desan develops her constitutional theory of money through rigorous historical examinations of money’s evolution, from medieval Anglo-Saxon communities to early-modern England to the American Revolution and beyond.

Theme music by Hillbilly Motobike.

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Link to our GoFundMe: https://charity.gofundme.com/o/en/campaign/money-on-the-left-superstructure 

Transcript

Scott Ferguson: Christine Desan, welcome to Money on the Left.

Christine Desan: Thank you.

Scott Ferguson: It’s great to have you here. Can you tell us about your scholarly training and intellectual influences? Do you situate your work within a particular school or tradition within legal studies?

Christine Desan: I think I do situate my work within a particular school. I’m probably most closely affiliated with critical legal studies (CLS). For me, that affiliation began when I was in law school. I took a course called “Death of the Law,” which was taught by Owen Fiss and Tony Kronman at Yale Law School. It explored the difference between liberal approaches to law and the critiques of liberalism that were developing in the late 1980s. The seminar was formative for me because, on the one hand, Fiss and Kronman were deeply invested in the liberal project that was a rights based defense of progressive social change–and I was sympathetic to that project. At the same time, the critiques that they wanted to understand were more persuasive to me. Those critiques were mainly based in critical legal studies, and to a lesser extent, in some allied approaches, such as the normative work of Robert Cover.

The CLS critiques really evoked for me an older influence, which was social theory and cultural anthropology. I had studied that work as an undergraduate when I majored in religion and sociology of religion. I would say, going way back to that moment when everyone was taking the cultural turn in the earlier 1980s, I was thinking through that work, which was itself critical. This is work that taught us the complexity of reason and knowledge–the kind of layered nature of those conclusions and practices, or the way they depend on different strata of learning, contexts, assumptions, and experiences. Later in law school, when I stumbled into this course, it seemed to me that critical legal approaches were in some ways developing those earlier insights and applying them in the legal field. So that set of approaches was very influential for me.

Later, I started doing historical work. When I did historical work, I found the early institutional historians of the 20th century really fascinating. I thought their work was very important. This was a set of historians whose work in many ways had been set aside in the late 20th century as people were more interested in, and following themselves, the cultural turn–they we’re doing cultural and social history. I was finding that with earlier progressives, people like Beard and later people like Jackson Turner Main and Jack Green, who were fascinated by the importance of institutions and the way practices within institutions changed, their work illuminated power structures in a way that I wanted to understand. The institutional histories of the 20th century became a place for me to learn and explore power structures. People in the 80s and 90s were also doing a lot of interesting work about ideological history. And so, for me, the practice of authority within governance structures became a focal point. I wanted to be able to use both institutional and ideological histories to understand this practice of authority.

William Saas: Thank you. I wanted to ask, given the narrative of your intellectual history and the fact that you sort of arrive at an interest in authority structures and the role of institutions, it’s not so surprising that you end up at money. But it probably is a little bit surprising, I’m guessing. Was it a straight line from that interest in institutions to money, or what brought you to the question of money?

Christine Desan: It was not at all a straight line. I think I spent a lot of my life avoiding money. That is to say, I spent a lot of my life–and I think I’m not alone in this, I’m in very good company–avoiding the economy. I was someone who really thought that the economy and commercial matters were not as important as other human drivers of experience and existence. I was more interested in other aspects and was kind of emphatically avoiding economic and monetary matters. In some ways, I think, this is a disciplinary instinct. Many of us went to law school or went to history graduate school in order to avoid going into economics, or going into some other field that was focused on commerce, trade, or finance. In the early work that I did, I remember skipping the references to money. I was doing historical work on early colonial legislatures. There, I kept tripping over these references to money. And like many historians and legal scholars, I kept skipping them because it seemed like a technical detour, and one that I didn’t really understand. I also didn’t completely appreciate that they were spending so much time arguing over this technical detour, so I kept skipping it.

Belatedly, I came to the recognition that legislators, commentators, and lay people who are arguing over power and authority and making claims–all of the things I talked about when we try to understand how law works–they were always talking about money. Money was all over the records that I was looking at. I realized I had to confront and face it and that, in fact, it would be the way into the market for me. When I spoke about property and how critical scholars want to understand property not as a kind of one off concept that you either have control of or you don’t, but as some kind of complicated, negotiated phenomenon, I wanted to do the same thing with the market as a whole. Instead of assuming that it was just a natural entity or something that was somehow clear, universal, and rational, I wanted to understand it. After having avoided money for several years, I realized that money was actually the way into the market. If I could understand the way money worked, then I would basically be understanding the medium for the market. It seemed to me that maybe money was the institution that would allow me to understand the market as a legal project and to take a critical approach to the market itself.

William Saas: Was there one moment, text, or set of ideas you encountered that really made it most clear to you, or was it more of a gradual realization?

Christine Desan: Yeah, there was an arresting moment. I did all this work about early America while avoiding money but immersing myself in the discourse and the way people were speaking about governance. Then, about a year later, I started looking at the famous late 18th century debates between Hamilton and Madison. Here, I realized that the whole discourse of governance had changed, or was changing, and was dramatically different from the way that people had been talking 100 years later. The grounds of their debate and the change was monetary. The way that people were talking about the market was dramatically different. That was the moment where it struck me that I had to understand what money was as an institution. I really desperately wanted to understand what had changed and why the debate was so different between the early and late 18th century. And just to get to the punch line, it turned out that they were basically debating, in my view, the transition to capitalism. Hamilton and Madison were right on the cusp of a new approach to money and the monetary as a mode of governing. By contrast, their peers in the early part of the century had been talking about money in a completely different way. They’d been working towards a different form of governance around money–that is, money as this medium was creating for them a different kind of governance experience than it would be for Madison and Hamilton. So it was very arresting seeing the difference in the character of their discussions about money.

William Saas: While it was arresting, how did it feel, given the common experience of a lot of people having studiously avoided money for so long, coming to the realization that, “Oh, no, this might be the key to what I want to do?” How did that feel and what was the next step that got you doing what you wanted to be doing?

Christine Desan: It’s such a great question. It felt like falling into a black hole. It felt really scary. It was frightening because I really did not understand their debate. And I understood that I didn’t understand their debate. It has been a series of black holes ever since. I spent probably four or five years trying to understand the early American transformation. After that time, I thought, I really can’t understand what money is. And so, it was another cliff that I fell off and I went even further back to try to understand what money was in the English experience. I really felt like I couldn’t understand what the colonists were actually doing. I wanted to understand where they got their ideas from. I had figured out some things about money and had more reference points. I had a compass by then, which was a little bit of a comfort, but the compass was taking me further back. So yeah, there were a series of cliffs that I fell off. But, on the other hand, I was so fascinated and became more and more convinced that these were extremely important debates and that people like me had been ignoring them for years. At the same time, other people who I wanted to understand, like Madison, Hamilton, and their predecessors, had not been avoiding them. They’d actually been focusing on monetary matters.

Just to leap forward, I think that’s also part of a historical transition. I think we’ve learned to ignore money and that that’s an important part of our current modernity. We’ve learned to ignore how it actually operates. We worry about it, we obsess over it as a thing, but we don’t try to get inside of it and understand it. Whereas, in earlier generations, people did actually try to manage, understand, recreate, and reimagine money more than we do. So all those people who had been immersing themselves in money and money creation, they were kind of an invitation to me. In trying to understand money, they were at least an inspiration that I should try to retrace their steps and figure out what they were arguing about.

Maximilian Seijo: So let’s dig into it. In your book, Making Money: Coin, Currency, and the Coming of Capitalism, you do just that. You argue that the 17th century sees a revolution in money’s design that obscures its underlying social structures, or institutional and constitutional power. I am wondering if you could sketch that history for our listeners and explain why it’s so important to discern?

Christine Desan: Yeah, so the book really does try to tell the story of this great transformation. It argues, basically, that money can be designed in different ways, that communities have designed it in different ways, and that politics and social life change with those changes in design. In a nutshell, at the end of the 17th century, and in the 18th century, the British improvised a series of changes in the way their money worked that put private investors in charge of money design and that change had huge ramifications. On the one hand, it broke through old constraints on the amount of money in circulation. At the same time, it elevated the rights of creditors in new ways. And that really restructured governance and the economy.

Just to dive in and clarify why we could understand this as lawyers and historians, money, it turns out, really is a contract. It’s a kind of credit contract. And contracts for credit, for things owed, can be made in different ways. The reason money can be designed in different ways is that you can make an agreement to pay in different ways and with different conditions and characteristics. And changing that kind of monetary contract is what communities do when they’re redesigning money. To get really specific, what the book does is take a trip back in time to understand early kinds of money as a contract and then compare them to the new modern design. The early design, the design that’s kind of iconic and that we all think we understand, is commodity money, or the silver penny. I thought I really needed to understand what the silver penny is because, according to economists, it’s just a thing. It’s a slug of metal that has value because it’s silver. Intuitively, that seems so appealing, but we’ve not asked whether that’s really what a coin is. In fact, when I dove into it, it turns out that is not the way coin works. The fact that it contains silver was only one of its characteristics and not the one that made it operate particularly as money. Maybe I should just tell a story about how silver pennies got going. This story, I hope, will make it clear about how money operates, and then we can play with the story and make it modern.

The old story goes something like this: there are communities in which everyone’s contributing. That’s how they survive as communities. We have labor that everyone contributes to the center and, let’s say, everyone gives a day of labor every month. At a certain point, the community faces some kind of emergency where they can’t just rely on the routine contributions of the ten or so people who happen to be on call that day. Instead, they have to enlist more people to work that day to repair a dam that breaks or repel enemy invaders. And so, they enlist all those people. When the enemy’s repulsed or the emergency is over, the stakeholders for the community give those people who worked early before their time of contribution, who contributed their labor before it was actually due, a token or an IOU. This token or IOU says that we recognize the next time we come around asking for your contribution, you’ve actually contributed early and you can just give back this token. It will represent your contribution and we will accept it as such. That kind of IOU is now a unit that holds value that everyone recognizes, which is the value of the tax contribution given early. One more twist makes it money, which is if the stakeholder will accept that token back from anyone, then the people who contributed their labor early can use it and trade with each other. It represents a certain amount of value, which is the tax contribution. Everyone is willing to take it because they can use it themselves to pay off their taxes.

This story, which I’ve told before, and for people who’ve read the book, they’ll recognize it as the stakeholder story, explains money as an IOU given from the center to people who have contributed their own labor early. And they’ll also see that, if you have these kinds of tokens and you allow them to travel between individuals, then people can use the token as a medium of exchange. In the medieval world, pennies functioned in that way. The question then becomes, why would you make this token or IOU out of silver? It turns out there were many reasons. In a primitive and sort of rough world where there’s not a lot of administrative capacity, to make money out of silver was durable. You don’t have to worry about it falling apart while people are holding it, which is something that would make the people who had contributed early very unhappy if you gave them a token that then fell apart, such as one made out of wood. It was also hard to counterfeit. For people who had the silver, it wasn’t easy to refine or to mint, and only the authorities at the center who could control the mints might have that capacity in order to control the number of tokens out there. And finally, you actually had created a token that contained collateral. People had something with value that they could trust more than they might if you just gave them a written promise.

When we actually think about how money came about, or the incentives for a public to make money and for people to hold and pass around money, we sort of flip the story of the penny. Instead of the penny existing because it is silver, we have silver acting as collateral for a money that actually comes about first for a kind of credit agreement with people. If you think about that kind of money design, it makes sense of many things, like the control of medieval sovereigns of the mint and their claim over money. It also makes sense of conditions of the market. The market was a difficult and not very liquid place in which money was hard to come by because silver was hard to come by. We can also understand other things. For example, and this book tells this story at more length, the mints had this very interesting capacity in which they’d actually charge people for money. The king of the sovereigns could set up a system in which they are actually taking silver for people and creating coin for them. You could, in other words, buy money at the mint for all the kinds of exchange you wanted. You could buy coin for private purposes as well as buy the kind of coin you needed to pay your tax obligation, because increasingly kings were going to tax in coin and not in kind or in labor.

We could talk more if you’re interested about this old world kind of money, but the point is that it was a very carefully structured system of political obligation in which sovereigns had converted in kind political obligation into tokens that were made in a material that was durable and hard to counterfeit and provided people with collateral, and even allowed them to buy more money at the mint for their own private use. It was a very interesting, sophisticated system. I’ll add one other thing: sovereigns also supported this system by enforcing deals made in money insofar as they agreed with those deals. Common law, or the law of contract, property, and torts, were forms of public enforcement made in money. The early English common law only enforced contracts that were monetary. The early Roman law enforced contracts that were monetary. So you could pay off a debt only in coin–not in silver. An interesting part of this is that sovereigns are actually writing their own systems for law and order into their agreement to enforce obligations for people. I could go on about that, but it’s worth noting that the law we think of as kind of existing on its own terms is actually written in the enforcement of money. So as money penetrates society, that is the channel that sovereigns are using to determine which things they’re going to enforce and therefore write their own system of order into the social world.

Maxximilian Seijo: This is such an interesting story because in your book, you then tell the story of how the public institutional construction of money gets reinvented in a way that eschews its public origins towards private commerce origins. I am wondering if you could talk about the specific moment in which that reinvention happens and how it skews production in favor of the profit motive as opposed to broader public social processes?

Christine Desan: This is the critical moment, in fact, and now that we have an example of the way money works as a contract, we can see that it could be made of anything. We’ve talked about why societies in early worlds might make it out of silver, but really there’s no reason that money would have to be made out of silver. Many different communities have made money out of many different materials, as you know, such as with shells, paper, wooden sticks, and all sorts of things. What the English do, as one of these series of experiments, is decide to make money out of the promises of investors. The catalyst for this new monetary adventure is war. In the 1690s, the British were fighting against the French, as they often were in those days, and the government was very short on funds. The silver currency was going through one of its usual periods of disarray. Often, silver coin, which seems so stable to us, is actually a really hard medium to keep in circulation because it wears down and people begin to hoard or export it. And so, the British were experiencing all these problems in their silver money supply at the end of the 17th century for various reasons.

Then, the British government decides to experiment. It agrees with a set of wealthy investors to take their promises. It invites them to lend to the government 1.5 million pounds and it will pay it back over a long period of time. The kicker or innovation is that the government agrees to take the 1.5 million pounds from the investors in written promises to pay–in banknotes. And those banknotes promised the bearer silver. So instead of the government needing to have silver, the wealthy investors would have the silver. They make the contract, the bankers hand over the 1.5 million pounds, mostly in banknotes, the government spends the banknotes, and then at some point in the next years, it starts taking back the banknotes in taxes. If you think about it, the government really has to take back the banknotes because it spent them. It has to stand behind them and recognize them as valuable just as it paid people. It will accept the written promises of the bank back in taxes, but once the government does that, it has set up the same kind of credit issue and credit redemption that it set up with the very first tokens, and in turn, with coin. It has set up a loop of credit in which it’s issuing a unit de facto and taking back a unit. In other words, it’s created money without using silver or gold.

The striking thing here is it’s not clear the British understood exactly what they were doing. People had theorized different bits and pieces of it. But what’s not clear is if they realized that if they set up such a system, then nobody really needed to cash the banknotes, because the banknotes held as much value as the government would give for them as long as the government was taxing, was a serious, viable government, and people had to pay their taxes in something. They might as well pay it in paper as in silver. There was no need to go to the bank to cash the money. So this is an amazing moment where we see this innovation, which is de facto the government creating credit money out of paper through the intermediary of a group of investors in a way that will liberate the government to spend much more paper into circulation than the amount of silver coin that is in existence. The other thing that’s striking about this moment is that there’s no reason you actually need the investors in the middle of the relationship between the government, its taxpayers, and its citizens. In fact, at the same time that the government is borrowing from the Bank of England, it’s also experimenting with just direct issue bills, where it spends English money into circulation and taxes it back. With both of these things, whether you spend the government’s promises into circulation and tax them back, or you spend the bank’s promises into circulation and tax them back, the government’s basically supporting and creating money that depends on its own credit loop.

Yet, the system that takes off, for many different reasons, is the bank structured system, perhaps in part because the government finds it useful to assimilate and channel the legitimacy of the investors who nevertheless are holding a silver reserve, and perhaps also because the investors are a politically powerful group who find this to be a really lucrative profit making opportunity. And so, over the 18th century, the English basically started developing this relationship with this group of investors who are the Bank of England. The Bank of England is the first really robust national bank that issues what becomes the everyday currency, although it takes a long time. At first, there are only large denomination bills, but over time, the Bank of England will be issuing the money that becomes the English paper sterling. And there are many governance changes we could talk about that are wrapped up in this innovation. For example, the government is for the first time delegating its public power, or its sovereign monopoly over money creation, to investors who will make decisions about when to issue money. Those investors will also have the incentive to police taxation, so they’ll be pressing the government to tax in a disciplined way in order to get repaid. It’s the bank investors who will now profit from this funding technique that allows them to issue many paper promises on a much smaller silver reserve. Anyway, what we’ve done is see that the government, working with wealthy investors, have created an intermediary, a set of creditors, who will now intermediate the relationship between the government and taxpayers.

Scott Ferguson: In your book, you triangulate this revolution in money’s design, this story of political economy, between, on the one hand, an emerging liberal philosophy by the likes of John Locke, probably Newton, and others, and on the other hand, with a specifically legal story centered around this case of mixed money. I am wondering if you could talk about those two poles of this story?

Christine Desan: John Locke’s intervention into this moment of experimentation exposes in a really valuable way the changing philosophical bases of money, the market, and the economy. That is to say, he shows us how the old way of making money and the new way of making money are based on and perpetuate very different ways of thinking about the market and the economy. To leap to John Locke in particular, what he articulates and captures about the new method is that it’s based on the notion that individuals determining their own profit will be, in his view, the best agents for the economy and are the way to understand the economy. That is, we should understand the economy as an aggregation of individuals acting for their own profit. The reason that he comes to encapsulate this view is that he understands money–when you go back and look at his work–as something that people all converge upon for their own interests. Let me just connect that to the new monetary form and then we could talk more about Locke and the specifics about the way he tells the story.

Now, if you think about the new institutions, the device that is supposed to run, this new money making machine, is based on an individual incentive to profit. In particular, the investors have the incentive to lend to the government for their own profit. By calculating the amount that they’ll benefit, they’ll determine how much to lend to the government. So instead of thinking about money as something that is a public medium which the sovereign is controlling, we’re now thinking about money as a medium in which the device that’s calibrating the supply will be the incentive of investors to create money when it’s beneficial to them. This is a very unusual way of thinking about money, or thinking about individual profit, because, as you know, in the medieval world, usury, or making money for profit and making profit on money, was considered a vice and a sin. Greed was a sin. It was the office of the church that tried to suppress human motivation for greed and self serving profit. 

By contrast, and what seems to me so important in terms of understanding the governance aspects of this, what the British are doing is they’re institutionalizing the motive for profit and individual self interest at the heart of a public project, which is money making, and they’re understanding that incentive as therefore beneficent. Instead of identifying self interest and the drive to self interest as a sin or as a problem, they’re identifying it as a benefit. You can also see this in the era more generally. Another kind of monetary move that they make that’s very closely related to this is they’re creating circulating public debt. They’re convincing people to lend to the government for their own profit. And so, they begin to issue public bonds. And the way public bonds work is that anyone who lends to the government will be creating a public good, because they’re lending to the government, but they’ll also be doing that for their own profit, because they’ll get interest on the public bond. Now, that’s before sovereigns had borrowed from big financiers, but they hadn’t tried to popularize the incentive to act for your own interest. And they hadn’t identified that as something that would actually be beneficial to the public. So they’re kind of identifying public good and self interest.

This is all to get back to Locke, which is to say, he understands self interest and the drive to individual profit as something that can be beneficent and can act as a driver in the aggregate of good things. That’s how he understands money in the economy. It’s a way of thinking about the market as private decision making that, when practiced collectively, will lead to good outcomes. And part of what’s fascinating to me is that this new theory about the way the market works really emanates from these institutional experiments as well as other influences that allowed us to get to the institutional experiments in the first place. But the institutions, if you see what I’m saying, are actually creating practices that invite theories that really change the way we think about profit or change the way that early modern thinkers considered profit and greed. It rehabilitates them, if you will, or habilitates them for the first time. By contrast, in the earlier world where we had commodity money circulating, there’s no group of private individuals who have a controlling interest and whose interests are themselves driving the system. Instead, we have the sovereign and public officials tasked with making determinations that are for the good of the whole.

I don’t want to idealize or romanticize the medieval world. It is not a democratic, populist order by any means. But the way people are understanding the sovereign’s role is that the sovereign should act, maybe for religious reasons in terms of divine right, for the good of his realm and the people in it. That produces a different way of thinking about money and the market. You asked about the case of mixed money, that’s a case in which the decision makers in the court faced and articulated this different kind of theory. In particular, what happens in worlds with coin is that sometimes you have to expand the money supply either because money has worn out and it needs to be re-minted or because there’s some kind of, in this case, military demand and sovereign’s want to greatly expand the money supply. My point is that the way you recalibrated a money supply that was metal was by changing the amount of metal in the coin. Usually, that meant debasing it, or diminishing the amount of silver in the coin, either to get all coins to be backed with a certain amount of silver in them, or because you wanted to create more coin to pay for military expenses. And while we might not think military expenses are in the public interest, and certainly many of them aren’t, in the medieval world, the question that often arose was: could a sovereign expand the money supply or change the amount of money and coin for what they consider the public good, such as the defense of the kingdom?

Well, Queen Elizabeth had done that. She debased the money supply to put down a rebellion in Ireland. This is part of the oppression of the Irish by the English. And so, the question that came up to the British court was: was that exercise by the sovereign, that refiguring of the money supply, something within the power of the sovereign? Despite the harmful ends of military action, the court confronts the issue of public power over the money supply and confirms it by emphasizing the need for the sovereign to protect the realm, to protect the money supply, and to be able to manage the money supply and create additional money when it was necessary to defend the people. What the court does in the case of mixed money is elaborate a theory of money that understands money as a contract between the people and sovereign for the public good that has to be managed in the public’s interest. And you might disagree with the ends here of the use of money, but there’s nothing in the decision about individual profit and that understands the market as an aggregate of people acting in their own self interest. Instead, it’s a decision that understands the market, the economy, and the use of money as completely for public ends and within the control of the public–in this case, the sovereign–not in the control of private individuals or creditors. So the contrast between that way of thinking about money and 100 years later, or Locke’s way of thinking about money, is really dramatic.

William Saas: Now, a critical listener might hear this story about money’s revolution in terms of these experiments, this improvisation, and then Locke’s intervention, and hear the words profit and self interest and sort of come to understand them as baked into the cake of the modern money form. And then, they may conclude that, yes, modern money is critical to capitalism, it’s somehow not redeemable, and we can’t go back to that moment where it’s serving the public. To what extent do you think that self interest remains sort of at the center of the story? And do you think that there are other encouraging ways to think about what modern money is and how it works, not just based on self interest?

Christine Desan: I think that self interest remains baked into the cake in important ways and that is not the same thing as saying we need to leave the cake that way, to play with that metaphor. Let me give one example of the way it’s baked into the cake and then maybe we’ll figure out if we would want to redo or rethink the recipe. One thing we haven’t talked about that seems important to add here is that every community I’ve looked at that makes money, they’re all different. Each time that I see money, what I see are communities creating different ways to issue credit and take it back in–sometimes through these investors and sometimes in other ways. In each case the community does that, the people who are engaging in everyday exchange want more money than the government makes for its own purposes. One thing to take away from understanding the stakeholder story is that the public is doing this for its own reasons, such as to mobilize an army in the case of Elizabeth, to build a road in a more beneficent world, or to create a welfare system in another world. The government’s working to create a medium for reasons that are publically oriented. In each of these worlds, people want to exchange with each other, but there’s not always a correlation between the amount of money that should be in circulation from the government and the amount that people want for their own uses. And so, in each of these communities, people are looking for and are working with public authorities to amplify the money supply.

In the old world, we already talked about the way they amplified the money supply, which is the mint would sell people more coin than was needed to pay your taxes, would sell people coin for silver, and people would go buy it at the mint in order to be able to make exchanges with pennies. The reason I mention this is to get to the baked into the cake point. In the new world, and that is to say once we had the Bank of England creating a money supply at the center for the government, there were a whole set of other modern banks. There were banks in the medieval world that were run by and in response to merchants that facilitated merchant trade and cleared accounts between merchants. Modern banks, however, don’t act that way. Modern banks came along sometime after the Bank of England in the 18th and 19th centuries. Joint stock banks and country banks set up shop using a model that was very much like the Bank of England’s model. In some ways, they’re echoing the logic of the Bank of England. And they would, and still do today, just as the Bank of England took promises from the government and issued promises, take long term promises from individuals and then issue notes against them, atomizing the agreement by individuals to pay back eventually. If that is a long term promise by a person, then these commercial banks would issue little notes to the people who were borrowers allowing them to use those banknotes to go off, do their projects, and pay back the bank eventually.

What I’m saying is that these commercial banks are amplifying the high powered money of the Bank of England. And the Bank of England began to support these little banks in various ways by helping them clear their accounts against each other. We won’t go into the technicalities. The point is that this kind of supplemental money that goes into circulation has become enormously important today. Probably 90% of the everyday money supply is money issued by commercial banks now in the form of deposits, not in the form of banknotes, but deposits and banknotes are the same thing. And if we think about that form of money, then it’s also built on the self interest of commercial bankers. We’ve institutionalized self interest into the retail money supply in a way that penetrates everyday life. And governments, both the Bank of England and the Federal Reserve, support that structure. We could think of the banks as delegates. Some scholars call the commercial banks franchisees of the government because they’re basically producing private money authorized by the government. They represent the dollar. This is all to say your question really goes to the core of a capitalist world in which the money supply is made through both central banks and then through a network of commercial banks supported by the central bank. 

Now, having said all that, are we stuck with this recipe? I don’t see any reason that we’re stuck with this recipe. There are advantages to the recipe. Again, I don’t want to romanticize the medieval world. But let me just point out that, what central banks and commercial banks do, is make liquidity available. They make the ability to exchange with one another through money available in new ways that have facilitated all sorts of productive enterprises. In the medieval world, you had to have silver before you could get money. In other words, you had to have capital before you could go out and do a project. In the new world, you come with a promise that you’re going to be productive and you get banknotes or you get bank deposits. And so, this new monetary system facilitates exchange and projects that are supposed to be productive in ways that have broken through old strictures and ceilings on production. I think we need to recognize and respect that and understand that there are great advantages that come with understanding that money is credit, and move beyond a world in which it was restricted by some arbitrary ceiling, like the amount of silver that people had.

Even as I try to abstract the logic, thinking about this credit money that is independent of the requirement of silver collateral attached in the old world, we can see that it doesn’t need to be attached to commercial bank calculations of profit. There are many ways to create credit and to circulate promises. We don’t need to have a world in which the only recipe for money production are the lending decisions of commercial banks. Right now, the only way that we engage money creation in the modern world is through commercial bank lending to individuals. That’s the engine of money production in the modern world. And that engine is attached to commercial bank calculations of profitability. In fact, we know that many projects that will not be profitable to a commercial bank lender would be profitable for us as a society. So I think what we need to do is think about how we want to innovate and improvise new modes of creating credit and extending credit to people outside of the strictures of commercial bank lending.

Maxximilian Seijo: Before we get to the end of this podcast, I actually wanted to touch on something that seems to be a bit of a recurring theme on this show, which is the relationship between war and money. I was particularly taken while rereading the introduction to your book last night of this quote where you have a 12th century account from Exchequer. You quote this account by writing, “Money is necessary, not only in time of war, but also in the time of peace. For in the former case, revenue is expanded on the fortification of towns, the payment of wages to soldiers, and in many other ways. And when the end of the hostilities arrived, “weapons of war are laid aside, churches are built by devout princes, Christ is fed and clothed in the persons of the poor, and the Mammon of this world is distributed in other acts of charity.” And so, what I think you’ve been alluding to, especially with the question of the cake, is that the way money is structured is both different now than it was back in the 12th century, where it was used not just for war, but for the public good in many ways–housing, feeding, infrastructure, employing, etc. But now, those aspects of money remain, the potential is there, and it remains for the cake to do those things again. This is not much of a question, I guess. I just wanted to make clear that I think what you’re saying about the cake now is so vitally important to the question of modern public governance, and your book does a really good job of teasing out the origins of those stakes. 

Christine Desan: Thank you for the question. I want to just talk about early America for a moment in response to it, because it seems to me we are still early America in many ways. When I first got sucked into studying money, when I fell into the black hole, it was in a world in which people had no money because the coin they had kept going back to England. The things they bought from England cost more than the things they sold to England, so they never had money stay on the shores of America. And so, they invented these forms of money that were not commercial banks, where they basically just created IOUs, first to pay soldiers. War is often the existential moment. If you can’t defend yourself, then you need money for that, because you won’t be around to then philosophize about other uses of money. But once they realized that they could pay the soldiers with IOUs and tax them back, which is how it started–they paid the soldiers with it, taxed it back, and therefore made a local currency–they realized they could make local currencies for their own economic development. They could really push out the boundaries of what was possible by inviting farmers to borrow from the legislature to mortgage their land and pay them back. They created these little pockets in which they’re circulating credit. 

Then, farmers could borrow in order to improve their land, make more exchange with each other, and start their own manufacturers and industry for that matter. They started understanding that, as communities, they could plot their economic development. Even in things like how much they lent to each person, they were making distributive decisions. They put a ceiling in each province on the amount they would lend to each farmer, which was 200 pounds. They thought to spread this money widely and understood that they were making distributive decisions when they taxed. They understood that they were basically engineering the way they wanted their local political economy to function and look, and that they were really building a world as they did so. And we know the end of the story. In many ways, that experience led them to understand their provinces, and eventually their entire coast, as a different world from the British world.

So in many ways, this experience of creating local money, and then trying to chart their own courses and create communities of political economic development, split them from the British Empire. It convinced them that they were a different world and different communities. And it just strikes me that it goes to the point you were making about both war and peace, because they actually innovated and stumbled into these monetary experiments because of war. But they understood quickly that they could and should use them in times of peace. Peace, economic development, and political development, were their own kind of exigency and public need. Peacetime was the period in which they could flourish and concentrate on human development. And so, it’s really an inspiring story of the possibility of creating communal flourishing, strength, growth, and productivity, and thinking outside the box, but monetarily.

This was a monetary adventure, but it was one in which people were acting in concert and collective ways with each other to try to build, for the first time, a prosperous world. They made a lot of mistakes. We know about their flaws, but we also could learn from the way they were trying to engineer their own development, and to do so in ways that went beyond the kind of commercial calculation that we have today. We have actually used money in many productive ways to build a state that is stronger, that actually understands how we need to prioritize education, infrastructure, and healthcare needs, and that there’s no reason why we can’t create money towards those ends. Understanding monetary theory and the way money works helps us enormously. Once we understand that money is basically this kind of credit loop and a public medium, and that is fraught with all kinds of distributive decisions, we can use it towards all those ends and be creative about the devices. There’s no reason that we should be stuck with one channel or one device for money delivery once we understand the way money works.

William Saas: So your constitutional approach to money, looking at it as a governance project, shares some key assumptions with a chartalist approach that’s been developed by Modern Monetary Theory, which is a theory and movement that a lot of our listeners will be familiar with. How would you say your work converges with and diverges from MMT?

Christine Desan: Yeah, I’m happy to talk about that. I think, in many ways, we’re fellow travelers. For centuries, some groups of people have understood money as an issue of credit. In that sense, for centuries, there have been what you called chartalists. Both my work and MMT are within that tradition. To me, it’s the most persuasive way of understanding money and it makes a break with the orthodoxy. Both my work and MMT approaches make a break with the orthodoxy in recognizing the critical role of the public, recognizing money as debt, and recognizing money as a public medium, ideally used for public welfare. Some areas of divergence, I think, are areas of emphasis. I am really interested in how money has been redesigned. It’s been redesigned, it’s been improvised, and it’s been engineered in many different ways in many different communities. I’m fascinated by the diversity in design. I think that monetary design profoundly affects both governance and knowledge in society. That is, it affects both the way we structure and allocate power and the way we think about what the market is. For me, there is a pre-capitalism, whether we’re talking about medieval coin or we’re talking about early American paper money. Also for me, there are many different kinds of capitalism. There are changing assumptions about human nature and about governance that seem to be intimately connected with the kinds of monetary structure and governance that’s going on. I think that is less of a focus for MMT scholars.

To give a very concrete example, there’s a lot of great MMT scholarship about the role of public debt in absorbing or expanding the money supply. That is to say, the management of public debt and open market operations are an important lever of policy in the modern world. For me, the advent of circulating public debt is a critical moment in which we change the governance structure of a community and begin to prioritize creditors, use investors as an intermediary, and basically delegate great political power to that group. Along the way, the innovation of public debt underscores and reinforces different ways of thinking about individual self interest and the way the individual connects with the government. Just as an example, I’m interested in things that are more about the kinds of governance decisions that are wrapped up in monetary design. I would say, at a technical level, MMT scholars have unparalleled expertise in current institutions of modern money. They are focusing on the prescriptive use of monetary theory. Also at a technical level, my own expertise has been trying to understand this historical change that has led us to a certain repertoire of money design. I also focus more on the legal attributes of money and why they matter. The character of money as a kind of political obligation, the aspects of monetary value that are embedded in the details of what we enforce, are what I call the cash premium. And so, I’m focusing, in some ways, on the elements of the repertoire. I think MMT scholarship is, in some ways, focusing on how to use the repertoire that currently exists and prevails.

William Saas: That makes sense.

Christine Desan: Yeah, I think it’s been a really productive dialogue, actually, between the constitutional approach to money and MMT. The last thing I’d emphasize is that these approaches to money as a kind of credit that’s circulating are ancient as well as modern. There have always been these approaches to money. People have been theorizing money for centuries. And so, we’re not the only two kids on the block. There’s a lot of really interesting work out there from ancient, medieval, and early modern thinkers who also saw money as a public medium and understood its potential. So this is, I guess, an invitation to people to think broadly along whatever lines that makes sense to them to try to understand and grapple with this public medium, because it is so incredibly important. It’s something that penetrates our daily life and basically creates material governance in our world.

Scott Ferguson: Well, this has been hugely illuminating. Can we close by asking you to talk about what research projects you’re working on at the moment?

Christine Desan: Yeah, so I have three that I’ll mention. One is an attempt really to take apart and to understand the change that occurs in a society when it goes to money. That is, it considers that first transformative moment, the moment from going to political contribution that’s made in kind to a world in which a community decides that they’re going to convert the in kind contribution into tokens and then use those tokens as a medium–going from an income world to a market based world. I’m working on one essay that really tries to understand how it changes political capacity and personal orientation to move from an income world in which everyone’s contributing equally to a world in which there’s actually money circulating, and to consider what the advantages and disadvantages are of that moment. That essay also thinks about how the law works here, how the government is actually projecting its power when it’s enforcing monetary decisions, and how it’s curating the market when it’s deciding which property, contract, tort, and damages to recognize monetarily–how it’s actually building the market. So that’s one project. 

The second project I’m thinking through is an essay that looks at the stubbornness of our myths about money being private. One thing we haven’t talked about is that we have strong intuitions that money is private. People will often mention that money comes from barter and that private exchange produces money, or they’ll mention old stories about POW’s using cigarettes as money. A recent occurrence of this kind of idea that money could be private is Bitcoin, or that maybe money can exist outside the government. I’m interested in trying to understand why we intuit money as private. I think this is because of our experience with private institutions, such as commercial banks, and the dominance they have in our society. But I’m interested in trying to interrogate that and understand what the form of our intuition is, and why we keep thinking of money as private and therefore the market as private.

In the last thing that I’m working on, I’d really like to resurrect this old work about early America. I started this whole project about early America. I mentioned that I kept falling over cliffs and ended up doing the book about the medieval and early British world. But I’d really like to go back to that early American world and finish it. There are great stories about the adventures the settlers were having in the way they tried to work out money–the conflicts they had among themselves, the things they did right, the things they did wrong, the Revolution, the Constitution, and the dramatic kinds of debates that Americans had over what money was and how they should make it. That’ll be my next project.

Scott Ferguson: Christine Desan, thank you so much for joining us. This has been incredible.

Christine Desan: Great, thank you so much for having me.

20 – the Fascist Analogy (with Daniel Bessner)

In this episode, Natalie Smith & Maxximilian Seijo host Daniel Bessner (@dbessner) to debate the pertinence of contemporary leftist efforts to analogize Trumpian neoliberalism to 1930s fascism. The conversation also takes up matters of left strategy & media, including the role of theoretical provocation and the politics of online culture.

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

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

Why Do We Fall?: Introduction to the Neoliberal Blockbuster (Preview)

This Money on the Left/Superstructure teaser previews our first premium release from Scott Ferguson’s “Neoliberal Blockbuster” course for Patreon subscribers.

For access to the full video lecture, subscribe to our Patreon here: https://www.patreon.com/MoLsuperstructure

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.

Blockbusters:

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)

19 – Close Encounters With The Dirtbag Left

Cohosts Will Beaman and Natalie Smith are joined by Scott Ferguson and Andrés Bernal to reflect on a recent “close encounter” with the Dirtbag Left. They diagnose the perverse comfort that the Dirtbag Left takes in contracting political economy around fixed points of “leverage” over political elites. Touching on the Jimmy Dore controversy and a recent Chapo episode on Avatar, the team compares the austere physics metaphors that structure the Left’s hopelessness to neoliberal action cinema’s preoccupation with what Ferguson has called its “Hyper-Newtonian Aesthetics”.

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

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

New Laws of Robotics with Frank Pasquale

Frank Pasquale joins Money on the Left to discuss the legal and monetary politics that will determine the future of automation. Professor of Law at the Brooklyn Law School, Pasquale is author of The Black Box Society: The Secret Algorithms That Control Money  and Information (2015) as well as recently published New Laws of Robotics: Defending Human Expertise in the Age of AI (2020)both with Harvard University Press. He is a leading thinker in the law of A.I., algorithms, and machine learning and, as he makes clear in his recent book, a committed advocate for a public-money driven just transition from the current paradigm of “equality before the algorithm” to a brighter future replete with ethical, complimentary robotics. Our conversation with Pasquale covers these and a number of other surprising components of his project, including his critique of post-structuralist, post-humanist, and accelerationist discourses. There is something for everyone in this conversation–whether you’re interested in the future of robotics, the present of machine learning, the history of money, or the promise of critical theory in our post-COVID world.

See Pasquale’s latest piece in The Guardian for a sample of his recent work.

Theme music by Hillbilly Motobike.

Transcript

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

William Saas: Frank Pasquale, welcome to Money on the Left.

Frank Pasquale: Thanks so much, Billy, it’s great to be here.

William Saas: We are so thrilled to have you with us on the show finally. So we’ve asked you to join us to speak about your new book, New Laws of Robotics, which is out now with Harvard University Press. To get things started, we typically like to ask guests to introduce themselves and say a little bit about their scholarly, intellectual, and personal background. Could you start us off by telling us a little bit about who you are, your training, and your research agenda?

Frank Pasquale: Sure, and I really like this question. I may even go back a little bit further than research training. Just to say that I’m someone that grew up in Oklahoma and Arizona. And part of the reason for mentioning that I grew up in those areas is because my parents were sort of the victims with a lot of the economic upheaval of the 70s and 80s. And so, when I went to Harvard in 1996, I was really interested in the idea of how economics affects people in their day to day lives. Because, growing up, I’d seen my father being laid off from the steel plants, and then working in this very precarious position delivering pizzas and in convenience stores, and then being a clerk at Walgreens, and then working up to a sort of bad position between manager and worker there. It was very interesting for me to think about. Something just so close to my mind was: how does work happen? Who gets to work? How do they get to work? What are they paid for? Those were always concerns of mine.

And this resonated in watching my mother’s career as well, who moved from being a receptionist at a car rental company to working in insurance and customer service. As I went through college, grad school, and law school, these ideas about work we’re never far to hand. I remember reading Foucault and some of the essential work he did on the panopticon–some of the classic stuff he’s always cited for. I just remember thinking, “Wow, that’s a lot like when my mom was a car reservationist and the managers could be listening to her at all times.” But they had no idea when they were being listened to–this sort of techno-panopticon. It was something that led into some of my later work on reputation and privacy in the book, The Black Box Society. I got a law degree as well. I worked in law for a few years as a clerk for a judge at a law firm and saw some of the insides of “big law,” as it’s often called, or some of the ways that large companies interact with each other and the government. Then, I began teaching. I’ve been teaching in law for 15 years. I love the job. I think it’s a great opportunity to both try and deeply understand law, to reform it, and to have the time to give impartial advice to folks in Congress and the executive branch. In that capacity, I now serve on the National Committee on Vital and Health Statistics, which has been a very interesting journey during this whole controversy over COVID-19 data. And so, that’s sort of where I’ve come from and where I’ve landed. Along the way, it’s just been a wonderful opportunity to learn a great deal about different intellectual movements, such as MMT. So I’m just thrilled to be on the podcast today.

Maximilian Seijo: Awesome. I think before we dive into your new book, we want to dig into your previous book that you mentioned, The Black Box Society: Secret Algorithms that Control Money and Information. For those unfamiliar with that work, what is the argumentative thrust of the book? And how did the book intervene in these ongoing debates about automation, when it first came out?

Frank Pasquale: It’s good to get to the roots of this book as well, because it was about my fifth or sixth year of teaching in 2008 or 2009. I wanted to write a book and was referred to some editors. My coordinating editor at Harvard University Press said, “Hey, send some ideas my way.” And I said, “Well, I’ve been doing all this work on search engines and Google. I could write a big book about search engines and just say, here’s the search engine book.” Then, I said, “But I’ve also got some side interest in privacy and financing. Here’s where I think they all come together.” The idea I had was that, essentially, more and more of our lives are an open book to large corporations and governments. But their dealings are more shrouded in secrecy, either due to trade secrecy for businesses or state secrecy for the government. And the idea of the black box society was this metaphor of the black box. Actually, the metaphor of the one way mirror is even better in a way–the idea is that they’re sort of watching us from behind a one way mirror, but we can’t see what they’re doing with our data. And so, I got really interested in that idea about secrecy and information asymmetries in different fields.

The way I divided up the book was between reputation, search, and finance. Reputation is how we are known and how the scores, and other data dossiers that are on us that we don’t know about, are being constructed. Search is how we increasingly know the world, including newsfeeds, Google, YouTube, and all these sort of entities. It’s about how the world is being presented to us. We often have no idea how the algorithms work or what data is being used. And finance was really important to me, because as I started the book, the financial crisis was happening. I just thought it was remarkable that there were these firms that have these massive liabilities that nobody seemed to know about or to be able to estimate. There’s lots of detail in the book about Goldman Sachs, AIG, and how financial regulation could allow there to be these systemic, structural black holes where things will be going on but no one would understand them. Using the concept of derivatives and secret liens, which I draw on from Mike Simkovic, we should know what debt companies are in and be able to assess that. But instead, often using derivatives, they can hide the degree to which they’re indebted. And that leads to systemic instability, etc. So that was where that book went.

It was sort of all about information and asymmetries. It said, if we don’t address them, we will just become more and more of a blackbox society. And the black box is two metaphors. One is, like on a plane, how a black box is watching everything you’re doing. And so, we’re gonna be watched in everything we do by these large firms, corporations, and governments. And then, the other is the black box, where an input goes in, an output comes out, and yet we have no idea how they were transformed. That happens with credit scoring. It happens with lots of other areas in finance where information goes into the system, it’s algorithmically transformed, and there’s an output that gives someone a score or likelihood of being good credit, risk, etc. But we don’t know how it happened. I am reminded of this contrast I drew between Larry Summers, on one side, who was really into algorithmic lending, saying, “The secret to getting more and more financial inclusion is by having more and more data about people. That way, we can better assess how likely they are to be good credit risks or not, and the system will be more advanced than the current credit scoring system.” And Derek Hamilton, on the other side, saying, “Look, these algorithms are so important. They should be public, right? They should be public and a matter of governance as to how the algorithms allocating credit operate.”

I think that the black box book pushes us in Derek Hamilton’s direction, but it took me a few years, even after publication, to really bite the bullet and say, “Yeah, these things really ought to be public.” And we’ll talk further about the monetary system being more public, but the systems by which credit is granted should also be more public in their disclosure and also in terms of people being able to give input. An example that just really struck me as I was researching the book was, after Hurricane Katrina, some in Congress said, “For credit scoring purposes, for those who live within an 80 mile radius of New Orleans or the epicenter, don’t allow late payments on bills to affect their credit score. We don’t want that to hurt because it’s a natural disaster. Everybody deserves a break.” And to that, the credit bureaus were very opposed. They said, “No, don’t ever bother with what we’re doing because it’s an objective science and we have no room for morals to enter into this.” And of course, all they do is entirely informed by moralistic decisions about what’s counted, what’s not, etc. And so, that’s where I see us going. As we talk more about New Laws of Robotics, I can discuss further where that credit granting and those authorities went–the directions they’ve gone toward algorithmic lending and more and more AI driven and blackbox systems.

Scott Ferguson: Yeah, let’s pick up on that. Let’s try to shift the conversation to New Laws of Robotics and maybe draw out the specific question of automation. It seems to me, and correct me if I’m wrong, that the black box has these two dimensions that you’ve identified. But another dimension is the algorithmization, essentially a kind of automating, of these moral decisions that are actually about governance and very political, but are being privatized and foreclosed from contestation and visibility. So it seems like that’s one of the stakes of The Black Box Society book. And then, you take that to another figure of automation–robotics. Maybe we could talk about that connection. And I think it would be helpful to just have you sketch out your sense of the history of robotics, and why you turn to that in particular.

Frank Pasquale: Great question. I really appreciate all of these angles on how we got to where we are today. With this project on robotics is, if you go back to what Aaron Benanav calls the automation discourse of the early 2010s, there are these books like Martin Ford’s Rise of the Robots or Brynjolfsson and McAfee’s Race Against the Machine. There’s a book called Humans Need Not ApplyFuture of the Professions is another one. There’s this whole cascade of books that came out, and Farhad Manjoo actually has this five part series in Slate, essentially writing, “Lawyers, guess what? AI is going to take your job. Pharmacists, bye bye. No more job for you.” This was a really popular idea in the early 2010s–that automation, robotics, and AI we’re moving beyond the factory floor to take over all manner of professional human services jobs. And the idea of the self driving car, I think, was at the very vanguard of that. It’s the sense of, “Forget it, that’s certainly gonna be all over by 2020. We’ll all be in self driving cars. That just seems like a very easy computational problem to solve.” This is obviously an automation discourse that’s broadly neoliberal.

There’s a counter discourse called the fully automated luxury communism school that would say, “Well, maybe we should automate the automators too, make the managers robots, or tell the managers you’re not that special either. We can actually compute your role as well.” And I felt I couldn’t really go in that direction, because first of all, one of the main reasons why automation and robotization was going poorly in so many areas was that the value judgments were not being acknowledged. Also, shadow work was being forced onto people. One easy example of that is with physicians where they were required to do electronic health records and to gather far more data about what they’re doing, and that should lead to a better healthcare system overall, but they were not really being compensated for that. So there’s a lot of burnout among physicians. There’s a lot of extra work being created and it was just being shoved down to people. I recently read this wonderful article by Leslie Wilcox saying that, in fact, we shouldn’t be worried about how there’ll be no work for humans to do. In fact, there’s an exponential generation of work by the increasing amounts of data that we have and the more information we have about the world. And so, I think that’s where I was concerned that the automation discourse was being met by a sort of left and somewhat more progressive and hopeful discourse of fully automated luxury communism. Aaron Bastani recently published on that.

But I wanted to find something that would take the best out of both of those traditions and that would emphasize the importance of governance, and governance beyond the sphere of government itself, to say that there are professions whose purpose is to delegate power over working conditions, over a craft, and over a service to people on the front lines. For example, with a teachers union, rather than saying to teachers, “Look, next year you’re going to use Proctorio software so that you can watch your students when they’re taking exams.” Or there might be another software system. There’s one that I described in the book called Hikvision from China that takes a picture of every student’s face every second and analyzes it for its expression and attentiveness. The ideal to me is that the teachers union can push back against that, both because it doesn’t want all that surveillance. I wouldn’t want to be a teacher in a classroom because it can take my face too. And also, because ideally, it’s acting on behalf of those that it’s serving. And ideally, I think that professions and unions will be uniting over time over the next several decades with the idea that, the reason why it’s important to have labor have an important governance role over corporations and its terms of work, is because you want to have that governance function by people who are on the front lines and who can speak up on behalf of their clients, their students, the people they work for. That’s the vision that is driving me.

And I know it’s a wide ranging answer. Part of where I think that we could stop is with the ideal of robotization. There’s plenty of work out there saying that robots don’t work very well, and that’s good work too. But in some ways, I don’t even think it should be an ideal. I don’t think we should have an ideal of the robot. Because there are so many important ways in which the communication of the fundamental data about how well something is being done is something that could only be done human to human–by a human being with certain human abilities, and to a human who can conversationally and open-ended-ly engage with the people with whom they’re dealing. I think about that a lot from my perspective as an educator. There are so many ways in which my students have taught me. Here, I’m thinking of conferences I’ve held where we’ve had recent law school graduates or people in law school that raise really interesting questions. Or even my own experiences as a student sometimes asking questions that people thought were really weird, but then later on, they’re accepted. I think this is something that is really helpful in terms of shaking up the discourse that we’re all on this track toward automation and AI just watching us and then reproducing what we do in response to the stimulus that they’ve also watched us respond to.

Scott Ferguson: This is a quick follow up. I’d like to hear you talk a little bit about the history of robotics, our kind of cultural imagination around robotics, and how that has changed over the course of modernity. But I’m also curious, and I’m asking you two gigantic questions so take them as you will, but I’m also wondering about a little sketch of the history of professions and expertise and what neoliberalism has done to that, especially in this moment of the Trump Republican Party and a right wing backlash against expertise. I’m curious if you have thoughts about the history of professions and expertise in that sense.

Frank Pasquale: I have one really concrete and compressed response about an example that I think implicates both of your questions, and then I’ll try to expand out from that as to the history with respect to professions and robots. If you watch the Chicago School, in terms of law and economics, one of the big pushes in the Chicago School, if we’re going to write a really broad, high level intellectual history of the mid to late 20th century US, is a push by those in economics and law at Chicago and their fellow travelers in many other fields to displace bureaucrats, politicians, lawyers with quantitative experts. That can be done in many ways. You can say, “Look, when we decide a tort case, we’re not trying to decide the morals of the situation–whether someone did something morally wrong or morally right. All we’re trying to decide is what are the optimal incentives to try to avoid a harm that is preventable.” Or something along those lines. It’s their equations–with enough data, we can fill out these equations and we’ll know which way to go.

The genius of Richard Posner, one of the leaders of this field, was to say, “Really, you could retrofit our model to the past of tort cases, and anything that doesn’t fit our model, that’s just bad tort law. In the future, we’re going to apply these models. And that’ll be the way we decide torts.” He even has a collection of essays called Overcoming Law. The idea is that law can be left in the past as this kind of antiquated humanities oriented profession, while the quantitative and data driven will be the saviors of systems of order. They will ultimately provide order. They’ll ultimately do things much better than law can. Of course, all the infirmities of that came to a head or to sudden exposure in the financial crisis. Even Posner himself wrote a book after the crisis called, A Failure of Capitalism, where he was saying sorry. Of course, once you try to actually reform capitalism as well, then he becomes like a concerned troll. It’s like, “Well, I’m really sorry about capitalism, but what you’re trying to do, it’d be far worse.” So they used to be sort of besotted with the economists; now the economists are a bit discredited.

Now, what’s coming up instead is AI. AI is gonna do it. And so, one paper, and one of the co-authors is from Chicago, is on micro-directives. It says we have this debate and law of rules versus standards. The rule is to be very clear and have general applicability. And then the standard is more flexible. Well, fortunately, now that we have AI, we could personalize law on everybody. So rather than just having a rule that says 55 miles an hour on the freeway, we look at Frank, who is a relatively new driver. He doesn’t drive very much. He’s from New York. He rides the subway. So we say he can only go 40. But we look at others and say, Scott, you can go up to 75. You are a fantastic driver. Of course, that sounds silly. But then they say, “Well, imagine if we had a million variables about everybody. If we knew Frank’s health record and what he’d had for dinner.” So it’s this idea of personalized law. And it’s been tried in many different areas. One person there writes in terms of big data attributions to people where, for example, if someone dies without a will but they are of a certain number of demographic groups, and we have wills from those demographic groups, we can attribute those person’s preferences onto that particular person. So there is this idea that you can make the law a bit of a machine that goes with itself. And I think that’s behind some research and computational law as well.

In watching this, my general suspicion has found, and this is a real stretch but I think what [Phillip] Mirowski has done for a lot of social science and law, I’ve tried to do by being a guardian or watchdog at the gate in terms of looking at things that are brought in that are supposedly making our field better, more determinant, and more scientific. I just bark at it and say, “Wait, I don’t think it is!” That’s what my impression of AI has been. To get into your question of the professions, professions have been under attack for a long time. Just to do the recent intellectual history, a lot of people on the left justifiably said, “Look at these professions. They’re these privileged members of the community looking down on people–doctors looking down on patients, lawyers looking down on clients, etc. We need to level the playing field.” And that was behind a lot of the Ralph Nader stuff as well, in terms of Nader trying to be such a consumer activist, privileging consumerism over producerism.

But you also simultaneously had people on the right saying, “Ah, these professions are trying to order labor beyond the market. That’s really suspicious.” You see both of those sides come together with, for example, attacks on occupational licensing. Both sides come together to say that–not necessarily the left, it’s more of a liberal critique. With that, there’s more right attacks on occupational licensing. And there’s some that’s certainly unnecessary, but we have to realize, one main major reason it arose was because union density went down so low that people needed to fight back in some way to maintain wages and living standards. And one way of doing that was to say, “Well, we’re going to be occupationally licensed.” But another purpose of it is to actually bring in people that are qualified, that know what they’re doing, and that can be part of an ongoing labor organization that decides what standards are in the field. This is about deepening democracy and democratization. It’s not just that there is an election every two or four years, but it’s also about democratizing your workplace and what the terms are under which you work. And so, that is coming together in my book.

In the first chapter, I have sections on crises of expertise that are happening presently and how it really is time to rally behind a new concept of expertise rather than just saying we’re all going to be citizen journalists, or all information is gonna be democratized. That’s not really true. People don’t have the time to do that themselves. We’re always going to be trusting experts and professionals for some things. Then, the question becomes, how do you make those experts and professions more amenable and more open to democratic dialogue, and more responsible and accountable to the people that they serve? Those are deep questions, but I wouldn’t get rid of experts. And so, to really answer your question, the problem that I’ve been dealing with is there are these folks I call meta-experts, especially economists and engineers, who think they’re experts about how other experts should run their lives. And because I see the meta-experts in the economics and engineering field turning from quantitative analysis to AI and robotics as things that will replace the other experts, I wanted to develop a counter-narrative that says, “Actually, your meta-expertise does not support the substitution of AI and robotics for many members of unions, many members of professions, and many of the services fields that I talk about.”

William Saas: More democracy at work, that’s a lot less sexy than the techno-utopian and techno-dystopian narratives that are so attractive. I wanted to go back to the beginning of your book where you start with a couple of very evocative epigraphs, one from Hannah Arendt pertaining to education, and then another from Lawrence Joseph concerning the relationship between law and phenomenology. Can you help us stitch together and unpack these quotations and how they frame your book?

Frank Pasquale: Yes, and actually, let me just get my copy of the quotations so if I need to quote them, I can do so precisely. I think poets are particularly very concerned about being quoted precisely, which is more power to them, they spend hours and hours trying to find the exact right words. So I’ll start with Arendt because her epigraph is really the most accessible way of thinking about what I’m trying to do with the book. She says, “Education is the point at which we decide whether we love the world enough to assume responsibility for it and by the same token save it from that ruin which, except for renewal, except for the coming of the new and young, would be inevitable. And education, too, is where we decide whether we love our children enough not to expel them from our world and leave them to their own devoid devices, nor to strike from their hands their chance of undertaking something new, something overseen by us, but to prepare them in advance for the task of renewing the common world.” I love this quote because I feel like there’s something about it that is both acknowledging the importance of institutions of the past, of knowing about your past and of tradition, while also saying that there we are always going to be tempted to just force the youth into what we’ve always known. And that delicate balance between trying to recognize and value the old versus trying to find what kind of play in the joints and freedom we need in the news is critical to me. What’s also interesting is that latter point about trying to ensure freedom for upcoming generations.

Both sides of the quote counsel in favor of regulating robotics and AI. The first part is easy: value tradition. So if the fact that we’ve had humans be teachers and humans be doctors and humans take on all these certain roles for so long, then that does count in favor of that, and in some ways, we should understand why we’ve done that for so long. That’s the sort of respecting tradition aspect of it. But the element of freedom is also something that we need to really be sure to have as part of the automation discussion, because so much of what happens with surveillance now, and with the ability of robotics and AI to watch our every move in the name of creating this better future, is in fact locking us into the past. For example, imagine a company that just decides to hire people who talk and write like people they’ve hired in the past. There’s already companies doing that. There are companies selling these algorithms to firms saying, “Oh, you’ve got 1000 applicants and 20 positions? No problem. Have each one of them record an interview on our video screen, write up a 100 word document, and we’ll do a massive pattern recognition exercise. I think this is awful. It’s a way of freezing people into the past. It’s a way of saying, “Well, we have this group of people that did well in the firm. Now, that data is gonna be the template for everybody else.” So I think that speaks to both sides of Arendt’s quote–counsel in favor of regulation and democratic control of technology.

The Larry Joseph one is difficult. His poems are often difficult. He is a brilliant poet. He was writing about money and finance and debentures in the 1980s. He was like a poet and a lawyer at Shearman and Sterling and put the two together as a law professor. His collected works were just published this year and got pretty good reviews–he’s a very well recognized poet. One of the things he says toward the end of one section from this poem called “In Parentheses,” is “The analog is what I believe in, the reconstruction of the phenomenology of perception not according to a machine, more, now, for the imagination to affix to than ever before.” I love this ending because a lot of the rest of the poem is about the horror of mechanized war. And that certainly makes a lot of sense in terms of what I talk about in the military chapter of the book.

But this ending where he says, “The analog is what I believe in,” it’s so interesting to say that in the midst of digitization. And it really is a metaphysical and ontological point. It’s a point about the importance of the integrity of the human as a sensing agent. A lot of what robotics is, is putting together sensors, information processors, and an actuator. And if you believe in the idea that we are just algorithms of selves, that our brains are just transducing one electrical signal into another, you could ultimately binarize everything. You could reproduce people as machines, as Ray Kurzweil has hoped for in terms of the singularity. And part of what I think is brilliant and beautiful in this expression, “The reconstruction of the phenomenology of perception not according to a machine,” is that it’s warning us to not think about machines as the model of human cognition or something we should aspire to. In every age, the dominant new technology becomes its model of cognition to which it tries to get everyone to aspire to. In ours, it’s the brain as a computer. There are other examples in past epochs.

In Jeanette Winterson’s book, Frankissstein, she tells the story of the writing of Frankenstein by Mary Shelley, and she contrasts it with this transhumanist convention that’s happening, I believe, in Arizona at the present time. And a lot of what she writes about is the ways in which people are trapped by their current conception of technology as thinking of what the mind is and should become. What Joseph does in the poem is to say, “Nope, I don’t think digitization is where we’re all going and where it’s all heading. In fact, I think that the phenomenology is important in contrast with behaviorism.” And to understand this poem, the key is to see how each of these keywords has a shadow side. So he says, “The analog is what I believe.” He’s critiquing the infirmities of the digital. When he talks about reconstructing phenomenology of perception, he’s contrasting that with behaviorism. And so, much of the book is a critique of efforts to model the mind in terms of behaviorism–our mind as a black box–and how we can get beyond that and move away from the idea that all the world is just a series of stimuluses and responses to time, space, and effort, to one that processes conversationally and non-algorithmically ways of dealing with the world.

And I’ll say one last thing about this is because I’m currently writing this project that’s on algorithmic accountability and law. One of the commenters on the paper said to me, “Isn’t all thought algorithmic? Are you just saying that you want irrationalism and not thinking?” And I’m like, no, that’s not what I want. It’s easy to think that all thoughts should be algorithmic if you’re not familiar with humanistic modes of thought and if you don’t think of fiction as a structure of experience of the imagination, as James White puts it, but instead as just a lark. We’re just having fun in fiction, there’s nothing really good there. That last point is so important because I’ve noticed that sometimes there are commenters that say, “Oh, education does nothing for people. It’s just signaling. It’s just an added hurdle for labor market credentialing, etc.” No! And these are people at universities saying this. Give up your post then to someone that believes in an educational mission. Education is really important and the humanities are important. These are ways of knowing. They’re not just effective, mangled, folded, spindled,or mutilated forms of algorithmic thought. They’re entirely distinct, valuable forms of thought that need to be at the core of policymaking.

We need to have councils of social science advisors, humanistic advisors, and other forms of advisors, to complement the council of economic advisers. And we need to simultaneously be working on making economics itself more reflective on it’s narrative foundations, and not in the way that Bob Shiller is doing by saying, “People are sometimes irrational and tell stories about the economy” But instead through what Deirdre McCloskey, Jens Beckert (Uncertain Futures), and others have been talking about. They’re talking about imagining futures that are better. There’s also social science fiction. William Davies edited a volume called Economic Science Fictions. Those essays are wonderful. They’re forms of scenario analysis and ways of ritually describing better futures that are just as important, if not more important, than quantitative models of the economy. So sorry about that long response to that question on the epigraphs. But I’m so glad you asked about them because they’re still evocative to me. I never feel like a book project is over until I have the right epigraph or epigraphs. I had the Joseph one in mind for a long time. When I found the Arendt one, I thought, this is it.

William Saas: Would it be fair to say that your artful summary of the Larry Joseph bit functions as a kind of rejection of the meta-expertise discourse that you’re engaging with?

Frank Pasquale: Yes. And by the way, for full disclosure, meta-expertise is not in this book. It’s actually something I’m working on now for the Oxford Handbook on Expertise. A sociologist of expertise is running that project. This idea of experts on experts is so interesting in the academy. And you can think of STS as that field–science and technology studies. It’s a really interesting area and it can go in all sorts of bad directions, as Bruno Latour has noticed recently with climate change denial, and other things. But to come back to your fundamental question: absolutely. The argument is that you’re not going to be able to come in as a meta-expert and just put a million cameras in a hospital watching everything that the surgeon does and replace that person. Something that’s now being tried even more and more is with therapy. You’re not gonna be able to have a recording of every therapy session, and then have a recording of a potential response to every complaint or idea, as automation. However, and this is another really important point of the book, you should expect the people that can make money off of the meta-expertise involved in AI and robotics to continually push for a reconceptualization of every field as a field that fits their model of reality.

So for example, if you believe in cognitive behavioral therapy, that makes psychology and psychiatry, or any sort of counseling service, much easier to automate. Similarly, with law, if you get rid of all appeals, if you get rid of all narrative explanation in law, it becomes much easier to just have everything be like a red light camera–you were either under the light when it was red or you were not. And sometimes that can be a good thing. I was happy to see in the US that we moved from a first to invent to a first to file standard for patenting, because the old standard led to lots of litigation over who was first to invent. But there’s so many areas of law where people that are behind AI in law and legal tech want to reconceptualize law and rewrite law as something that gets rid of human discretion, human conversation, and is just something that can be automated. And there’s value in the field as it stands with respect to its openness to forms of conversation, disputation, and interpretation.

William Saas: Equality before the algorithm doesn’t have the same ring.

Frank Pasquale: It’s interesting though because equality of the algorithm is behind a lot of legal reform. And a lot of legal reform that’s had unexpectedly bad consequences, like for example, sentencing guidelines. You might say, “Thank goodness that we now have these sentencing guidelines so we won’t have racial disparities in sentencing.” But then what if the racial disparities just move to who we arrest? And what if the sentencing guidelines become really harsh? Then, the algorithmization of sentencing from something that would involve some level of judgement and narrative description of why the person deserved a certain sentence. It may get rid of a narrow form of bias while reinforcing the strength and power of a fundamentally illegitimate system.

Maximilian Seijo: So speaking of telling stories, and perhaps to hone in a little bit on this humanistic mode of thinking as a rhetorical crux here, the title and hook of your book takes us back to science fiction writer, Isaac Asimov, and his 1942 short story “Run Around.” The story includes a reference to a fictional handbook of robotics, 56th edition from the year 2058. In that handbook, we discover three basic laws for ensuring an ethical practice of robotics. Can you briefly enumerate these laws and then tell us why you felt compelled in your work to develop four new laws of robotics for our contemporary moment?

Frank Pasquale: Great, thanks, Max. I think that’s a good way to really set up the transition and hook of the book. Writing a book like this, in thinking about it midway through after getting reviews of it, at least one of the reviewers was saying, “This book is about a lot more than robotics, you should really change the title.” And it’s true. I think the subtitle does a little bit of the work there. But I think it was critical because I’d seen these laws of robotics from Asimov in so many places. And I also see the way in which a very well told science fiction tale can really grab people’s interest, especially technologists, because a lot of technologists are just taking engineering, math, and science courses. They need to have something they can relatively grasp on to, as almost algorithmic in itself. And so, I thought to myself, Asimov was so successful with these three laws, why don’t I try to devise a few laws that reflect wide standing consensus among ethicists about where robotics should be going in certain respects, while also putting my own political economy spin on them.

So to start with Asimov, the three laws of robotics in the 1942 story are first, a robot shall not harm or injure a human being. I think the word injury is very interesting, because it reminds me of the ways in which standing to sue gets narrowed. So if you say injury as opposed to all these other ways in which the world could be harmed by robotics and AI, that is an injury to a one particular human being–it’s narrowing. So you cannot injure a human being. Second is that a robot must obey a human’s commands, except when that conflicts with the first law. So if I told someone to tell a robot to go kill somebody, it shouldn’t obey me. And the third is that a robot shall protect itself unless that violates the first two commands. I think these have resonance with lots of folks in technology because of the elegant recursion. They’re sort of nested. You’ve got this fundamental directive, and then a secondary directive, and then a tertiary directive. But the problem is that they’re really vague. I mean, what if two people approach a robot and both tell it conflicting things to do. What do you do then? There’s all sorts of other issues that arise from them, which he realized. These conflicts became sort of the foundation of his science fiction.

I felt like there needed to be new laws. First, because of those ambiguities, and also because there’s not much of a political economy or institutional analysis behind this. There are laws and they’ll be programmed in, but who’s doing the programming? And who’s doing the enforcement of that? And how are we going to durably and equitably distribute power over AI and robotics? Those are questions coming out of a tradition from the work of people like David Noble, who wrote about the role of machinery and workers governance, or lack of governance over machinery. Those questions really motivated me. And so, I articulated these new laws, and the first new law is that robotics and AI should compliment professionals, not replace them. There, I tried to divide it to develop a line between the type of labor that we just want robots to substitute for versus situations where we think that robots and AI could make existing labor more valuable. And I realized that the profession line will be controversial, but I was inspired by a 1964 article by Harold Wilenski, which was called, “The Professionalization of Everyone?” Ultimately, the labor and work that will be remaining, and there’ll be lots of it as AI and robotics advance, will be seen as professional work and will be treated in that way. The type of prerogatives, the type of job security, the type of education, and the type of responsibility that you see professionals now having in their fields will be that of, ideally in my view, the work that endures over time.

The second law of robotics is something that gets a little more cultural and metaphysical. And that is to say that robots and AI should not counterfeit humanity. My idea there is that we all deserve to know if we’re dealing with a robot or AI or not. So if I see a bot on Twitter that has an AVI that’s been constructed–we now have AI that can just construct fake faces–and it has one of those fake faces, and it has a name underneath it, and it says, “Hey, check it out,” I should know that that’s actually a bot. Whoever put that up, I should know that’s a bot. My fourth law of robotics says that any entity out there that is a machine or AI put out by someone should be attributed back to the person or control group who created it and controls it. So we need to know those two things. The second and fourth new laws of robotics fit together in that way, in that we need to know what’s an AI or robot, and we need to be able to know who owns or controls it. And my third new law is to say that robotics and AI should not contribute to zero-sum arms races. The clearest example of that is in the military. We really need to stop the development of killer robots and AI. It’s begetting the use of AI and robotics for immense, destructive capacity, both in militaries and in policing. I feel like we need to stand that down.

The power of the legitimacy of violence is that the human beings who inflict it take on some role or some danger themselves. And if they don’t do that, for example, when you see President Trump putting giant walls around the White House, it’s bizarre to have people putting up such massive walls between themselves and others, where they can have a remote control war. I think that leads to things like one side having robotics and AI, the other side feeling like they have to invest in them, which makes the side that started it feel like they have to invest more. That’s problematic. And just to gloss that final new law of robotics a little bit more, I think that needs to extend in a political economic sense to all sorts of arms races. And so, in terms of all sorts of arms races, you might see AI that can file 1000 lawsuits at once. We already have a gig economy platform for evicting people where people are trying to draw in people to accelerate evictions. Imagine that there’s another firm that automated paperwork to evict people or to sue tenants. Imagine we have AI for that. Well, some people would say the answer to that is to develop a tenant bot that can immediately process the letter from the landlord and write back a return letter. You can see how fast that could turn into an arms race. In one of the more convincing parts of a pretty terrible movie called Jupiter Ascending, there’s a vision of this as the future of the legal system. Essentially, it’s just robots spitting out papers at one another. I think that’s problematic.

You also see that in finance with high frequency trading. Like one firm says, “My bots need to go faster than the other’s bots. I’m going to dig a tunnel under the Allegheny Mountains between New York and Chicago so that I can be 30 milliseconds faster than the other side.” No! This is something that a reasonable regulatory regime would just say, “Look, if you both come in at the same millisecond, then there’s another way of allocating it. We don’t just give it to the entity that’s fastest.” And so, I think the reason why these new laws are really important is because they are drenched in political economic judgments about what’s productive and what’s not. What type of labor should be made more valuable by technology, and what type of labor should be replaced by technology? And what are the institutions that can make the hard decisions about the dividing line? One hard thing brought up by the laws would be to imagine that we have people investing in robot hotels. And I’ve heard that in Japan, there has to be at least one human person at a hotel. I’m not certain of this law, but it was in an article on a robot hotel called Hotel Henn-na.

So at Hotel Henn-na, they would have a robot who checks you in, a robot who would bring your bags to your room, a robot who cleans all of the rooms, etc. And we face difficult decisions as a society. First of all, do we maintain the rule that there has to be at least one person? Do we say that maybe there have to be two or three people so that one person isn’t overwhelmed? It reminds me of the staffing standards for hospitals under the Emergency Medical Treatment and Active Labor Act. There are certain staffing standards of what a hospital has to have in an emergency room and how they staff it. Do we do that for hotels or not? What are the reasons for doing so? Do we think that hotel management schools and other things like that, that are really valuable and producing valuable research, should in turn be part of a human profession of hospitality? Or do we think that this is all going in the direction of Ubik, the Philip K. Dick story where you have to just put a credit card in to get into any door in the society? There’s no people behind the doors, you just have that. Or in Altered Carbon, another science fiction story, where you’d have that same sort of vision. And I don’t have an answer there. Each society should be able to answer differently. Maybe some societies will be like, “We’re going all out for the robots. Our next generation AI development plan is just an all out robotized hotel sector.” Another society may say, “Look, we have unions at hotels. They’re good paying work. There are people who have local knowledge that want to give more advice to people that are coming into the hotel. There are ways of arranging conferences and other events at hotels that require human judgment and expertise.” You can go in that direction, too.

What I’m trying to do with the book is to set up a framework where that’s the conversation we have, rather than the conversation of how do we take every person in the hotel and have surveillance record everything they do, record every stimulus that caused everything that they do, and then transplant that into a machine that can be them. And I hope the first conversation is a more interesting one about the structure of the future of labor and the structure of ensuring worker governance and contributions to the ongoing operation of certain facilities. That’s what I hope the book is pushing for. I think it’s a much easier case in health and education. And that’s why I have whole chapters on health and education. It’s really an easy case to be made that these are professions. Rather than having apps teach your fourth grader, you want to have a teacher there who’s going to exemplify certain ways of being in the world, but who also is going to give you good advice on what’s a good app and what’s a bad app. And that’ll be a bigger part of teachers, doctors, and others roles. They’re going to have to take on more and more of a responsibility for saying, “Hey, these are good apps that will really help your children or help the sick. And these are bad apps. Don’t trust them. They’re problematic and not effective.”

William Saas: And because of unions, they’ll have better pay. Health and education are two of the only sectors in Louisiana that the state can cut the budget of in times of austerity. So there’s a concerning alignment there.

Frank Pasquale: In terms of your point, Billy, about the health and education sectors in Louisiana, and that being caught in austerity, I think that’s really critical because there’s this whole discourse about the “cost disease,” where economists say, “If only health and education could be more like manufacturing. If only we could make it more and more like manufacturing, we could make it faster and faster and cheaper and cheaper.” My worry is that it is billed as a way of helping consumers and patients and students getting everything cheaper. To me, the answer is to have the state pay for it and recognize that these are quintessentially human roles. They’re gonna need humans indefinitely.

Scott Ferguson: I definitely want to move us into that question of the state paying for it and money and some of your discussion of Modern Monetary Theory in the book, but I wanted to bring up something along the way, which is a slightly different question. I came up in the high, heady moment of 90s theory and poststructuralism and all of its varieties. And I think one of the deep lessons of poststructuralism and related discourses is that mediation, signification, and technology are not somehow just inert external tools, but rather constitutive of human relationality. And I think I still hold on to that thesis. But there’s another element in poststructuralism that takes shape in different forms, writers, and discourses, where there is a kind of automaticity that is often ascribed to the functioning of signification, or techne, that is kind of bigger than the human or is out of our control. And that in order to have an ethical relation to technology in the world, we need to somehow be open to the play of différance, in one version of it. It’d be open to that uncontrollable automaticity. I have problems with that reading now and I’m sensing that you do, too. I’m wondering, from a certain point of view, your laws of robotics really just fly in the face of this kind of thinking. But I don’t think that you’re doing so in some kind of untutored naive or Luddite kind of way. And I’m curious how much you’ve thought about what you’re doing in relationship to that? Does that framing make some sense to you? Has that been something you’ve wrestled with?

Frank Pasquale: Yeah, I mean, I’m not in dialogue with that as much as I want to be in this book, because the book is a trade book. So I couldn’t really get into the details of posthumanist discourse, but certainly posthumanist discourse builds on a lot of the poststructuralism that you’re discussing, and accelerationism as well. I think the idea there is that it’s appealing because we want to be able to understand how social forces, how technology, how various aspects of our economic, social, and natural environment, affect people. On a critical theory account of emancipation, part of it would be being able to lift yourself above your current circumstances and say, “Wow, I have been conditioned to think in all these various different ways.” Then, a problem comes in when people say, “Well, even your effort toward reflection is itself conditioned.” That’s maybe the sort of dead end that Dialectic of Enlightenment was going toward, but that also just seems to be continually done afresh. There’s been some wonderful recent incarnations of the critical theory tradition. Bernard Harcourt’s Critique and Praxis is a really good example, where he’s really struggling with this idea. He’s just a brilliant theorist who can read so widely, and he’s struggling a lot with the idea of, I see that I’m getting above my social situation and critiquing it, but wait a second, I’ve got to always be open to the fact that I am just talking from particular position of privilege. And I have to step behind that or step beyond that.

I see that, particularly, when I debate with or get critiqued by people that believe in robot rights, because there’s this discourse of robot rights that says things like, “Look, you are privileging your perspective as someone that is a carbon based life form. If you really opened your mind, then you’d see that the robot that says I am hurt when you kick it, you should respect it. It should have rights just as you do.” And I think that’s where I draw a line. I say, “No, I don’t think that’s true. I think the type of sensors and actuators and information processing going on in that robot is fundamentally different than what’s going on in me or you or anybody in the audience, unless maybe there are listening machines listening to us. I’m sorry if I offend you listening machines. And particularly, we need to draw a line because some of the discourse in this posthumanist direction tries to parasitize emancipatory struggles of women, minorities, and other groups and says, “Just as the polity didn’t treat African Americans in the US well, now it’s treating our machines very poorly. We need to learn from that, treat machines better, and treat machines as our human co-governors or as partners in this world.” Ultimately, that is really insulting to those that have worked and are working in those emancipatory civil rights traditions, because it’s drawing an equation that doesn’t hold. It’s drawing an equation between persons and machines that just doesn’t hold.

There’s similarly something going on with nature, where there’s this emphasis to say, “Well, if you respect nature, then you should respect our robots, because that’s something that’s highly valued in your technical world and environment.” I don’t agree with that either. Because I think that there’s something that is of higher value in nature than our machines. The world would be really irrevocably harmed if we were to sort of pave it over with human techne. Part of what I would come at that with would be religious values, but part of it would come out of values of the natural world as being part of nature, and seeing that it’s the ground of my being, and technology not necessarily nearly as much the ground of being. And so, those would be some of the divides that I make. But I think the poststructuralist attack on foundations is something I really worry about. The last example I’ll give with respect to robot rights, which is maybe an accelerationist and singular view that, in the end, we’re all just evolving toward robot status. It’s going to be like Westworld. Eventually the Dolores’s of Westworld are going to be much more adept at surviving in this universe than we are. I can’t see that. I don’t think that’s right.

In the end, that push is much more symptomatic of and aligned with Citizens United. Like when I see people pushing for robots rights, I also see something very similar to corporations getting rights. The robot right now is almost always created by a corporation. And it’s about creating a force multiplier for the technical reasons to claim as many resources and rights as human beings have. But who owns those technical resources? So perhaps I should close out by saying, if I were to just get rid of all metaphysical foundations, if I were to get rid of all the humanism–I’ve been called an old fashioned humanist by some and I wear that badge proudly, actually–but if I could get rid of the foundations, I could then simply say, if we gave robots rights equivalent to human rights, if, for example, bots on Twitter had a right to speak and the government couldn’t regulate bots there or anywhere else, who would own most of them? Who would be creating most of them? I don’t think it would be me. And I don’t think it would be many people that are underprivileged. I think it would be just like Bitcoin where most of Bitcoin is owned by a small group of people. I think most of those robots and AI would be owned by a very small group of people. They would be putting them out there. The power differential that comes out of that is just immense, and it really is something that I wouldn’t want to see as part of a future.

Maxximilian Seijo: I really like where you went with this, Frank, because I think it brings up a lot of questions related to critical theory and what you discussed as sort of like the dead end of critical theory. And as that dead end, we could say, dialectizes into posthumanism and accelerationism, I think you’re right to pare back to these questions that ultimately center law and creation–who’s creating and who owns. And these are sort of questions of agency in the creation. That’s the political economic point, isn’t it? Like who is actually putting in the labor to create these structures and keep maintaining these structures? I also wanted to point to what we’re calling the Superstructure project, which is a spin off of this podcast, which is to say that, there’s an identity or non-identity that is assumed at the baseline from within the metaphysical foundations that you’re critiquing. And what we would want to say, along with you, and perhaps I’m inviting you to come along with us here to join in, is foregrounding these political and legal questions first and foremost, because that’s perhaps where the agency in this renewal lies, to harken back to the epigraph from your book, as we move forward into the future. I wonder what you think of that?

Frank Pasquale: Yeah, I really like that idea. Agency for renewal and thinking about structure and agency and saying that we can create a structure where far more people have agency. That resolves the contradiction in a way. I really appreciate that way of framing and clarifying the direction there, because it’s too easy to say we’re fragile and we’re mortal. We’ve got to look beyond the human form in human life and just create something better. We have people at the very top of the economy demanding that sort of thing. Ultimately, if the economy were more democratic, there would be far richer and more diverse visions out there for what society should look like 10-20-50-100 years from now. There’s this wonderful clip of AOC describing what the Green New Deal would look like. She talks about taking the train from the city to another city and walking through these beautiful public gardens, because we’ve had a job guarantee. That to me is just such a more grounded and positive vision than the stuff that’s coming out of our professional futurists, which is so often being rooted in a really disconnected idea of a far flung speculative future. To have a structure where more people have agency, I think creates the conditions for really advancing human well being, as opposed to expecting some deus ex machina from technology to just deliver us.

You see that with COVID, too. I just saw an ad for the Pharmaceutical Research Manufacturers Association of America on the Washington Post front page that said, “Science will get us back to normal.” It had like a picture of a vaccine. And I thought, Taiwan is back to normal and it wasn’t science that did it. It was about having a government that actually is connected to its people, that is competent, and that can massively mobilize public funds for mask creation and deployment. I think it’s the second largest mass manufacturer in the world now. It can invest in public health and basic human needs rapidly, nimbly, and effectively. Just to put it in a nutshell, the PhRMA vision, which we may be waiting for for years–who knows when a vaccine will come? If it comes, it might be 30 to 40% effective, versus the strong, creative, and nimble entrepreneurial state that Mazzucato describes that was able to put into place a COVID response. And it’s not just Taiwan–South Korea, Vietnam, China, New Zealand, and Australia, are all doing very well. And so, thank you for that clarification. I think that really helps focus us on where political and social thought should be going.

William Saas: And also very nicely brings us to the portion of your chapter on political economy where you talk about Modern Monetary Theory and what MMT means for the political future of robotics. Could you summarize that argument for us?

Frank Pasquale: Sure, sure. A lot of the book boils down to an argument for more investments in AI, robotics, and especially labor in the human services fields, like health care, education, journalism, design, the arts, and many other fields, and for less investment in the zero-sum arms race fields, which I would include a lot of guard labor and military policing. Jayadev and Bowles have an article that provides insight on corporate guard labor investment that could certainly be repurposed to much better ends. This holds for private finance as well. And so, when you make an argument like that, you just run into the buzzsaw of economists saying, “Well, actually, health and education are the worst sectors. They are the stagnant sectors. In productive sectors, we see more and more output for less and less money.” And I say that’s really not true. And even one of the founders of this cost disease theory, Baumol, in his 2012 work said, “Look, a lot of the reasons why these productive sectors are so productive is because they create massive externalities in the way of pollution and other matters like that.”

I bring in Keynes as well, because if we were to just try to cut costs in these very large sectors of society, that could be a downward spiral. It’s the classic paradox of thrift. To get out of the paradox of thrift, which I foresee as a clear and present danger now that we’re seeing the election results this year. Even though we’ve avoided authoritarianism, we have quite a setup for austerity. To avoid that, what I tried to say is that we should be taxing, but that tax should be primarily focused on solving problems of inequality. The real idea here is to have sovereign currency issuers issuing more of the money in order to make sure that we are properly focused on the quality of healthcare. We had an affordable care act in 2010, let’s have a quality health care act in 2022 that’s going to invest in high quality and create more options for people that are doing unpaid caregiving. Either pay them for caregiving or provide them the option of having professional caregivers come in. Let’s provide long term care insurance. There are endless examples of undone work in health care. And here I can again speak from personal experience as someone who was a caregiver for two parents that needed a lot of help toward the end of their lives. That was a ton of work that I did that was never compensated. We shouldn’t buy into this idea that it is noble work. It was work. I liked being in their presence, but it was work. And I would have liked to have had the option, at least for some things, to have a professional to do it, have the state pay for that, and get past this idea of, if there’s a deficit of a certain level, we’re all doomed or something along those lines.

And so, the Modern Monetary Theory shift away from thinking about a debt constraint to an inflation constraint was just enormously empowering for me, because then all of a sudden, you didn’t have to continually be worried about how am I going to take money from one part and give it to the other part. What are our priorities? We can really prioritize a lot as long as we develop modes of understanding where inflation is happening and where it’s bad. And maybe some areas of inflation would be good. Maybe we don’t care if the price of Fabergé eggs goes up. Maybe some things should cost more because they are affirmative bad’s. But there are other areas of inflation where we should be deeply concerned. And so, I think the MMT shift from thinking about a debt constraint to an inflation constraint is entirely the way the dialogue has to go. And it’s particularly valuable in the context of our automation discussion. Because there are so many people out there that want to push deflationary cryptocurrencies, which to me are just the worst kind of speculative instrument. And to think that that is being put forward as the future of money when there is such a more public spirited, open ended, and productive alternative, that to me adds the urgency to it. I had to put in a big knock on Bitcoin in my last chapter, because in part, to say MMT is just a much better way of thinking about what the future of money and value creation and measure is going to be.

Maxximilian Seijo: Also just to say how the way algorithmic thinking influences the way we even define inflation. I just wanted to make that point explicitly.

Frank Pasquale: Yeah, I have a quote in one of my articles–maybe it was in the review of the books by historian Finn Brunton–where I think Milton Friedman said at one point, “Replace the Federal Reserve with a computer.” We just want a computer. With the money supply, just dribble it out by an algorithm. The Taylor rule suggests that I think. There’s just all these ways in which that algorithmic thinking is quite destructive. I just heard a great podcast with Dan Denver on The Dig with Wendy Brown talking about the problem of algorithmic monetary policy in the EU. And Wendy Brown was saying, “If you govern your monetary policy with an algorithm, or within very narrow bounds, you’ll never be able to take on the challenges of our age.” The challenges of our age are so profound in terms of climate change, the COVID pandemic, and other areas that you will never dig out from those holes. And when I see the output gaps that are now being projected, first from the global financial crisis, and now from COVID, it’s terrible. These are huge amounts of money and productive capacity and production that we’re all losing out on every day of our lives if we don’t find ways to marshal resources and pay for them with sovereign currency,

Scott Ferguson: I think not only as a positive reframing and answer to the kind of deadlocks in the debates and discourses that you’re working through, the inclusion of MMT with your project also opens up a kind of symptomatology, or a way of reading certain discourses of automation and robotics symptomatically. I’ll spell that out. With zero-sum arm races in military technology, or the algorithmic trading itself, these are all digging into and naturalizing a world of austerity, saying, the only way I can get mine is by leveraging the particular conditions right now, in a narrow, private way, whereby I deepen those conditions. So it’s not just that those are bad, antisocial, and antidemocratic. It’s that, from a MMT point of view, when you can see that these are actually all governance decisions in the first place, and that we have a nominally infinite capacity to spend as needed, given our current constraints, you can then turn that to all these problematic impulses, these accelerationist impulses, and say, they’re a kind of sick result of our system itself. And it’s reifying that system along the way. I don’t know if that’s making some sense.

Frank Pasquale: Yeah, I agree completely. As I was reading about the Allegheny cable between New York and Chicago that cost $300 billion so that people can micro arbitrage a little bit better, simultaneously, Chris Christie in New Jersey was destroying the ARC tunnel that would be this incredibly needed capacity between New York and New Jersey–between, basically, the whole Amtrak line and all of the Jersey transit. I spent a lot of time on New Jersey transit when I used to teach at Seton Hall. It was getting worse and worse in terms of morning rush hours with people just packing on–very unsafe and slow conditions. I remember one time things had malfunctioned, so basically, there was a crush of passengers because there were so many delays in the trains. People couldn’t move. The escalator was still moving. So I had to like body surf over people that were stuck. It’s just absurd. When you think about the way in which this is happening in the US, in terms of this ridiculous situation of under capacity with respect to our basic infrastructure, while you have a financial sector where money is no object because of the privilege of what [Saule T.] Omarova and [Robert] Hockett have called the private “franchise” of money. It’s something we really have to focus on.

And I think that the accelerationist idea feeds into it. Because the idea is, in a world of massively limited resources, opportunities, and things, I have to be as agile as a machine. I have to make all the right moves and make everything perfectly algorithmically calculated. Only then I can survive, because there’s so much competition for this limited set of resources, when in fact, there’s a lot of abundance we could create. It is abundance, of course, within the bounds of nature, but I have a lot of hope. I’m not a cornucopian-ist, but I do think that there’s going to be ways in which if we’re investing in the right technology, a lot of the trade offs that we see are not going to be as severe on many levels.

William Saas: That seems like a good place to end. Is there anything that you’d like to plug before you leave us?Frank Pasquale: Yes, I am part of a group called the Association to Promote Political Economy and Law (APPEAL). And we’ve had a lot of great conversations about the future of both monetary policy and financial regulation there. So if anyone wants to go to politicaleconomylaw.org that’s a place where you can see some of our past and future events. We’re doing a lot of stuff on Zoom now because of COVID, but we hope to eventually have in person events in the future. It’s an intellectual community of lawyers, economists, those in social sciences, those in the humanities, historians, and many others, who’ve done a lot to rethink the nature of commercial and economic life, and how the law can be more conducive to more human flourishing, generally. And with our methodological diversity, we really welcome a lot of folks in it and I just want people to check it out.

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).

17 – Abolitionism: What Is and What Could Be with Dan Berger

Cohosts Will Beaman, Natalie Smith, and Maxximilian Seijo are joined by historian Dan Berger to reflect on the political economy of abolitionism and its critical importance for the Left.

Dan Berger (Twitter: @dnbrgr) is an Associate Professor of Comparative Ethnic Studies at the University of Washington at Bothell.

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