Superstructure 33 – Mediation is the Fourth Estate

Analyzing recent events at The Washington Post, Will Beaman (@agoingaccount), Natalie Tabb (@orangeasm), and Maxximilian Seijo (@maxseijo) develop a theory of media accountability in which heterogeneous institutions and social infrastructures are variously implicated as political participants.

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

Superstructure: Bitcoin in El Salvador (NEW TRANSCRIPT!)

Ricardo Valencia joins co-hosts Andrés Bernal and Scott Ferguson to discuss recent protests against Bitcoin in El Salvador. Adopted as legal tender by the authoritarian President Nayib Bukele in September 2021, Bitcoin has become an emblem in El Salvador for U.S. corporate imperialism, public mismanagement, and anti-democratic rule. Whereas mainstream accounts of cryptocurrency tend to flatten stories in Latin America to matters of success and failure, Ricardo draws upon rich critical approaches in Cultural Studies developed by the likes of Stuart Hall and Paul Gilroy to situate current events in El Salvador within histories of global governance, political conflict, and cultural identity. During the conversation, Ricardo weighs the fraught legacy of left politics in and beyond El  Salvador. He analyses the conspicuous convergence of “tech-bro” boosterism coming from the U.S. with right-wing regimes in vulnerable countries across the Global South. He considers tensions between imperial domination and quotidian safety that attend El Salvador’s dollarization in 2001, including the large role that remittances play in the everyday lives of the Salvadoran people. Finally, Ricardo contemplates the future promise of left politics in El Salvador. This promise, he explains, hinges upon feminist, queer and environmental movements, which are now demanding democratic and just uses of public money. 

Dr. Ricardo Valencia is an assistant professor of public relations in the Department of Communications at California State University, Fullerton. Between 2010 and 2014, Dr. Valencia was the head of the communication section at the Embassy of El Salvador to the United States. He has also worked as a reporter covering international and domestic politics for Salvadoran and global media outlets such as La Prensa Gráfica, German Press Agency (DPA), and El Faro. Follow Ricardo on Twitter @ricardovalp.

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Transcript: Mike Lewis

Andrés Bernal: Hello Money On The Left listeners. This is Andrés Bernal, and as you may know, cryptocurrency has been a recent hot topic in our culture. Whether that be its presence across media, led most notably by celebrities, or the crisis that it has undergone given its major drop in dollar-denominated price. We recently provided a lens into the politics of crypto at the city-municipal level, more specifically, the resistance and the alternatives that have been cultivated in places like Austin, Texas. In this episode, Scott Ferguson and I take a look at an international case and speak to Professor and journalist Ricardo Valencia about crypto in El Salvador, given President Bukele’s adoption of Bitcoin as its national legal tender. There’s a few things that stood out to me personally that I think can help provide some context for our conversation and its connections to a broader set of political conditions. For one, Ricardo’s insights reflect a Latin American, or more Global South experience, that destabilizes political categories away from neat, conventional definitions of left and right, reminding us of the importance of values and ideas if we are to advance the project of a just democracy. Also, contrary to the cryptocurrency industry’s branding, which presents a technology driving liberty and freedom, we see its explicit association to colonial authoritarianism. Then there’s the vacuum created by a crisis in macro economic thought which has left fertile ground for agendas like cryptocurrency to move in and take hold of seemingly forward-thinking propositions. Lastly, we take a look at the protests against cryptocurrency and their alignment with a rising wave of heterogeneous and intersectional progressive politics in El Salvador and Latin America, more broadly. Without further ado, here’s our interview with Ricardo.

Scott Ferguson: Ricardo Valencia, welcome to the show.

Ricardo Valencia: Thank you. Thank you for having me. Greetings from sunny California.

Scott Ferguson: So I’m here with my colleague, Andrés Bernal, you should probably say hi, Andrés.

Andrés Bernal: How’s it going, everybody?

Scott Ferguson: And we reached out to you because we were seeing some reports about the political situation in El Salvador, and specifically, the way that an increasingly authoritarian government is backing and working with cryptocurrency and Bitcoin in particular, is that right?

Ricardo Valencia: Yes.

Scott Ferguson: And we were interested in what’s going on. And we did like anyone does nowadays, and we searched Twitter. And we found that you had what seemed to be the most informed, critical account that was tracking what’s going on, and providing important context and analysis. And that’s why we brought you on the show. So thanks so much for joining us.

Ricardo Valencia: Thank you very much. Thank you for those words.

Scott Ferguson: I guess maybe to begin, it would be helpful to start with you telling us and our listeners a little bit about yourself: Where do you come from? What’s your what’s your background? Where have you worked? Where have you trained? What’s your research all about?

Ricardo Valencia: Yes, right now I’m an assistant professor of communication, Cal State Fullerton, California State University of Fullerton. I teach classes on global media, public relations writing, and multicultural communications. I mean, I teach a lot of those screens as I’m interested in looking at specifically the race and class globally, and the connections with globality, pretty influenced by Stuart Hall and the great work of I don’t remember his name, but the Black Atlantic, which is a great book about describing African heritage in the flat Lake and in the world, that will be very influential in me. And also, what to do, right? I’ve been trying to look at those, those theories. through examples of communications, public relations, public diplomacy, strategic communication. I’m trying to understand why those organizations, why movements use the type of strategy they use, and how that reflects larger trends in the economy, politics etc. I’ve been trying to use the tools of cultural studies, but a lot of history. I love history and I think it explains a lot; more than people give credit. And if you want to understand what’s happening now it’s super important to go to the past and understand it. And also I’ve been a journalist. I’m very involved in the world of journalism related to Latin American journalists, Central America journalism. I was a reporter for El Faro for many years, one of the first reporters they have, and then I was working for the La Prensa Gráfica, one of the most important newspapers in El Salvador. And it means, when I talk about crypto, money, and El Salvador and Bukele, I always look at it from the communication aesthetic; why that communication reflects, what are the larger trends that are reflected. I have a PhD in Communications from the University of Oregon where I had the pleasure to meet great political economists, especially political economists of the media, like Janet Wasko, who was my teacher. And, before that I was a diplomat for the El Salvadoran embassy, I was involved in public diplomacy between 2010 and 2014. And before that, I have a Master’s from the University of Hamburg, and I have always been writing about things, right? But I tried to look at the connection within politics, global issues and now the relations with the United States. And that’s what I came from. I was interested in crypto not because of crypto itself, but what it means, right? Especially for a poor country, like El Salvador, and especially why an authoritarian who comes from the left, we don’t have to have to forget that, right? Bukele comes from the left. He’s using a tool that is closer in ideals from cyber libertarian, right? Why does that make sense or doesn’t make sense, right? That’s why I encountered crypto and I started understanding it. And a lot of things happened, also. After the legalization, the making of Bitcoin as legal tender in El Salvador in 2021, in September, and after that, a lot of demonstrations and how Bitcoin has also become a symbol of, in a lot of ways, authoritarianism in El Salvador. And also a symbol of poverty, a symbol and inequality, a symbol of colonialism. And that’s why I think, I believe we have the first anti-crypto demonstrations and protests in El Salvador in 2021 in September to celebrate the independence of El Salvador from Spain. All the speeches are addressing activism, policy, public diplomacy, and especially for Bukele, who has a really global communication machine, right? And he doesn’t want to be only a president of a Third World country; he wants to be known globally as a hero.

Andrés Bernal: So before we kind of dive deep into the geopolitics of Bitcoin and President Bukele, can you tell us a little bit more about your connection with El Salvador and maybe situate and historicize El Salvador’s place in Central America and in Latin America, more generally? What is kind of leading up to this moment?

Ricardo Valencia: Perfect. At first, I was born and raised in El Salvador. I went to school in El Salvador. I got my bachelor’s in journalism from the Central American University, a Jesuit university, who, very contradictorily, are the ones fighting directly to Bukele, because the National University, that’s kind of been co-opted by Bukele. And then the Jesuits are fighting a new government again, in El Salvador, which, as you know, six Jesuits were killed in El Salvador in 1989 by the army. I was born during the war. All my childhood was happening during the war, the Civil War 1980-1992. But when I became a teenager, it happened through what we call the post-conflict. Then I was the first generation who got the police who weren’t militarized police. It was a civil national police, who I never really personally encountered violence from the police. They were very, in that time, heavily influenced by human rights. They were really training human rights, and part of the police at that time — a third came from the military, a third came from the civil side, and a third came from the FMLN, from the former guerillas. It means I was able to see how this very limited democracy improves daily life of people in terms of being able to say whatever they want, publish whatever they want, and have any political party they want, which is very contradictory. And I say it before: the left has always been trashing democracy until you have a government that is close to fascism, right? Then you kind of appreciate democracy because in El Salvador, that tiny small democracy was built by 12 years of war, but also years of oppression and political repression, right? And I think that is coming now is when I have this grandiloquent vision of trashing democracy, especially from the left, I always put it in context of El Salvador. Because sometimes when you focus when you are trying to dismantle democracy, what you find at the end is not democracy bad. Not a better democracy, as the left thinks, but fascism, right?

Scott Ferguson: It’s really fascinating, then. So your own career, your own interests in communication, and the politics and the cultures of communication seem to come out of your own experience of this burgeoning El Salvadoran democracy?

Ricardo Valencia: Yes, because in a civil war, you have family from both sides. I have family from close to the left. Guerrilla, very close, very militant, but I also have family who are close to the right wing, government and with the army, right? Then you find out, democracies are sort of the better way to deal with issues, rights and problems and instead of people killing each other. And that’s something for me very functional, and good. Of course, the reason that Bukele is in power is because that answer wasn’t enough after thirty years, right? The answer of just dealing with political peace wasn’t enough. And in a lot of ways, one of the ones who had to be blamed by the emergence of Bukele is the left, because they empower figures like this to win elections. And at the same time, people were expecting a lot from them, right. And in a lot of ways, we have to understand that the generation of people who got into power by the left wing party between 2009 and 2019, was a generation who was very cautious. And I think Andrés can know about what happened in Chile in 1973, which, I believe is a collective trauma for the Latin American left still. I think Boric is moving beyond that, but even Petro is part of that generation that they have to be so cautious and afraid of their army, that they prefer to agree on something practical, like political openness and democracy and they forget what people wanted to do is more economic reforms. And I think that’s what happened. That’s where we are here. That the answers that small democracy, limited democracy wasn’t enough for many people in El Salvador, and the system falls apart. The political system falls apart. It didn’t happen like in Brazil. Like, yes: Bolsanaro won, but the PT put up a big fight, right? I mean, they might win. Lulu might win again. It didn’t happen. The left imploded in El Salvador, which, that’s another thing if you want to talk for another show, but that’s why it’s happening now. Right? The small democracy that we have — talking small “d” democracy — very basic things, the beginning of any political discussion is in jeopardy and it cannot only be explained by the forces of reactionary right. It should be also understood as a consequence for one part of the left who was complicit, pleasing just electoral gains over values. And other things like I think, in the case of Chile, brings a new left that is trying to talk about human rights abuses in Cuba and Venezuela. You cannot ignore that. Maybe a generation before, you can be able to get away with it. But now, right, you have to have a position on that. Because beyond ideologies are basic things like protest. And that’s where we are.

Andrés Bernal: Yeah, I think that’s really fascinating and really important because sometimes in the United States, people, especially either academics or activists have an idea of left and right politics that’s very neat. Neat categories. And the story of Latin America over the last 100 years kind of throws that into disarray. It’s not very neat. It’s very complicated and complex. Can you unpack that a little bit? Because I think, kind of working through what is complicated about this left then the critique that I think you’ve been, from a progressive perspective, and as somebody that is obviously very critical of reactionary forces in El Salvador, you nonetheless put a lens into a left that failed, in many ways, to meet what it was what he was proposing for the public. Can you briefly touch on some of that lineage of this left that you’re critiquing?

Ricardo Valencia: Yeah. First, I believe it was a left coming from too constrained by Leninist politics and ideas of the party of cameras. That means they never allow people to participate. But at the same time, it’s like a Vanguard party theory, right? There’s only one body who can advance everything, and then we have to kill all the competition. And they kill, and these bitter feuds between the left. Which I find fascinating because many of the people who were called the Social Democrats are the ones who are fighting for democracy and social justice. And while all these super radical revolutionaries are with Bukele, right? And I think that’s why it’s contradictory. That’s the left that inherited, that gave birth to Bukele, right. The left was trapped in the 70s. And that’s another thing that you realize is that the same people who in the 70s were super open, super advanced, they become bad when they turn 60 and 65. And we tend to think they become more conservative. I would love them to become more liberal, maybe more conservative than ultra blind authoritarianism, right? I think Pepe Mujica, the former President of Uruguay, used to say he prefers kids to be involved in conservative politics than not involved in politics at all. And that is the theme that we inherited. That kind of vision of only having one foreign policy vision of being completely aligned with being friends of Daniel Ortega, being friends, and saying yes to everything that happened in Cuba. The same is saying yes to everything that happens in China. And that is something that we inherited, like in El Salvador, and Bukele took advantage of that. That’s why he created a big division because he was able to criticize Venezuela. And criticize other countries, right? At the same time, criticize Peña Nieto in Mexico. The left in El Salvador wasn’t able to have a new breed of people or minds and ideas. And I’m not talking about ages. It’s more we change, reshape, transform our thinking and thinking beyond the party and just thinking that the party can solve everything and heal social movements because it can be critical of politics, electoral politics. I think that’s where we came from, exactly from that. But, good or bad, that was the time to discuss a lot of things right. Now is the time to be less constrained with that left and being able to say other things that were unable to be said. And also, the fear, I think there was a lot of fear from the Tankies we call it the Tankies Left.  Exactly. They stop basic weaning discourses like social democracy, like welfare state, all those basic things. Remember the Social Democrats in El Salvador, they believed social democracy was a revolutionary thing. Right? It was! Calling clean elections in the 70s, right? And calling for a welfare state and subsidies and unions, autonomy, and all those kinds of things were revolutionary in the 70s. But the whole point with the left is they weren’t able to transition from a social democratic message, for the big apprehension from the past, but at the same time, they get stuck in the past when the Soviet Union existed, right? And I agree with a strong criticism against social democracy, European social democracy failures, and social democracy as a movement, the Socialist International, but I mean, the left was unable to move beyond all statements that means nothing for a generation, and that don’t bring people’s daily life improvements, economic improvements, if you want to call it. Security, safety, all those kinds of things.

Andrés Bernal: The Tankies, yeah.

Scott Ferguson: Tankies, yeah. Stalinists. So we usually think of Bitcoin as this kind of high tech, Cyberlibertarian, Global North project. How does Bukele rise to power? He has an interesting story, right? I mean, he’s mayor and then he’s trying to run with certain parties, but then those parties are dissolved. So he’s taking this kind of zigzag pattern. And then at what point do the crypto folks get in touch with him? And how does he even frame or leverage that rhetoric for his political platform and political gain?

Ricardo Valencia: Perfect, we have to understand where he’s coming from. He’s a rich kid. Rich family. Went to a bilingual University, a school in El Salvador, who dropped out of college in second year. But his father was close to one of the members of the Communist Party. And then that’s why he was able, with these resources, to fund his first campaign as a Mayor of a small municipality in El Salvador, right. That’s why he tells you pretty much the importance of relations of ideas between the United States and El Salvador. All of this. The Crypto thing is a great example of how ideas what happened in United States happen in El Salvador. But also the relations between elites. Between economic elites in El Salvador and economic elites in the United States. And that’s why he came to power after he was moved to San Salvador, the largest municipality, by the left and he won. And then he wanted to become a President, but the left didn’t want him to become a President because he was always his own mind before, criticizing the left, the FMLN leadership, the Frente Farabundo Martí para la Liberación Nacional, Farabundo Martí National Liberation Front, the inheritors of the guerrilla. And then he had an issue with one of the councilwomen, and then he was expelled from the party. He tried to run with a different party and he was rejected, the party was indeed canceled. And then he ran for this right wing party who was founded by people from the right wing party ARENA; the conservative anti-communists. He never mentioned crypto in his platform, but he has been flirting with the idea since 2018. And what we know is that the one who was into crypto was his brothers, because the way Bukele governs is like a clan. His friends from high school, and his friends and his brothers are part of the small group of people who are close to Bukele. And I know his friends, one of his brothers, was got a BA in economics. Indeed, if you read his brother’s thesis, BA thesis, he talks plenty of Marxist economics. Then you see how complex it’s becoming. How contaminated the whole ideological concepts are becoming. And then what happened is that not only–because people think it’s only because Bukele is a cultist, that he’s into the cult. I think now he has to pretend or at least pretend. But I think it was a n accumulation of three things that makes crypto happen. One is his relationship with the United States. El Salvador relies on the United States: the largest income we got is from remittances from the United States. The major exporter to the United States and the major importer from the United States. I think the exports are going more to Central America than to the United States. But, in general, politics, culture, and EV technology depends on the United States. Right? Then he fights with the United States, he has a big strong feud with the Biden administration, as they’ve been super loyal to Trump. Well, said that Trump can sell the TPS, Temporary Protection Status, of Salvadorans. And also he can sell foreign aid. But for whatever reasons, Bukele feels himself reflected in Trump, right? Then after a deal with the IMF failed, Buekele started getting more worried about what to do. He can’t print dollars. He can’t print his own coins. Then, the only option, what I think was a Hail Mary, was seeing if this whole Bitcoin thing happens and works. And that’s when he adopts Bitcoin. And that’s why you see his Twitter account, when he tweets in English, it’s mostly to talk about crypto. And when he tweets in Spanish, it’s to talk about gangs and trashing people and against human rights organizations. And that’s what I think set the stage. Also the majority. He won the supermajority in Congress, and he can do whatever he wants. That is an accumulation of the things, I think. I don’t know if I’m answering your question. But yes, that’s what happened. That’s what allowed crypto…My argument is always that crypto adoption, mass adoption, can’t happen in democracy. It has to happen in authoritarian regimes. Weak states. Because in a healthy democracy, we will be able to discuss this. When authoritarianism, you just impose it right? And you fail! $425 Million at least spent on that failed Bitcoin adoption. People only focus on the coins he allegedly buys. But that’s only a quarter of what he has invested in a country with a national budget of $7.9 Billion, and GDP of $24-$27 Billion. It has been criminal.

Andrés Bernal: Ricardo, you mentioned that before this Hail Mary move to adopt Bitcoin as the official currency. Right? He couldn’t issue US dollars, and he couldn’t issue Salvadoran currency either. Can you say a little bit about the kind of macroeconomic conditions around their monetary system before Bitcoin? I mean, were they pegged to, for our viewers right, what was what was going on in El Salvador before, in terms of their currency?

Ricardo Valencia: 2001, at the beginning, was sold as a monetarism, a colón, are like the national currency and the dollar. But eventually, they take hold of the dollars. The dollar became the de facto national currency in 2001. The idea behind that was the relationship with the United States, but also prevents inflation and takes advantage of a free trade agreement that was later approved, and allows the possibility of increased revenues through Exports-Imports. But that has, for some, advantages of keeping inflation, which even Bukele has benefited from. I think El Salvador has one of the lowest inflation. But at the same time, it’s a big, complicated issue. It ties your hands. And they have been always discussing the benefits of dollarization. The left, in 2004, promised to banish the dollar and bring back the colón. Year by year, it’s becoming more complicated, right? And especially because there’s a cultural element with the dollar. Whatever we want to say about the United States, people prefer to have a dollar than having any other coin. And in a lot of ways, Bitcoin is like a shitcoin for many Salvadorans. Why do I have to have shitcoin? I don’t need an intermediary to have dollars because my family sends me dollars, I get dollars, and with dollars, you get the money in remittances in seconds. It’s a lie that it takes three days. I send money to my family and they have it in three seconds? And they don’t need to have a bank account. Yes, but Bukele sewed with Bitcoin an excuse to try to print money. Then, he created the Chivo Wallet. The Chivo Wallet was a token used that the goal was that everybody has Chivo Wallets, and then people don’t have to use anything more. And they can be only electronic payments and things like that. They say it was backed by Bitcoin. They were created at the same time…I don’t know how to say it in English. It’s a change box exchange mechanism, in which $150 million were used to exchange Bitcoins to dollars and dollars to Bitcoin. But the goal, and also the Bukele administration thought we were going to create, perhaps at the beginning, they were thinking of creating a stable coin. But I think stable coins are a complicated concept because of the reason I’m telling you. When you talk to people who are in the political economy in Venezuela and Argentina, they tell you, once you take the local currency out of the equation, it doesn’t make sense. Because all these people in Venezuela, in Argentina and high inflation countries, they want the dollar, right? Everybody’s fighting for the dollar. In Mexico, my family lives in Mexico, and they want dollars, right? They want an account in dollars because it’s more stable. And then what he thought was, well, we’re going to create this token called Chivo Wallet, which is a private company funded by public money. But they are not accountable for the procurement loss. Then, we will be able to print money by buying Chivo. Then the tokens become the de facto currency. What happened is nobody used it. But the goal was that eventually they will be able to pay wages, and they were able to pay contractors and people can pay pension through the printing tokens without any back. Backed by nothing. More than as Athena Bitcoin revealed in this SEC Form, they revealed that they were backed by just the word of the President. They weren’t even backed. Chivo Tokens weren’t even backed by dollars. Thankfully, for Bukele, nobody really cares. Then he didn’t have a bank run. It wouldn’t have happened, what he planned with a crypto crash, it would have broken the government completely because it would have been a bank run. Because every Salvadoran was entitled to get $30 bonuses that you can use in this wallet. Now that’s worth $11, right? But it didn’t work. People don’t care. They don’t really want and they never use it. What I can tell you is it’s trapped in this dilemma. And now you see how macroeconomics is connected with your politics. He doesn’t have a political back. You can say whatever you want about Ortega, but he has a political back. Maduro has a political back, a geopolitical back. He has a place to ask for help, economic help. Bukele is trapped by himself, isolated from the world, and he doesn’t know what to do and then they only Hail Mary was Bitcoin and crypto. But it doesn’t work now. The next step is short term loans to local banks, which eventually might break the banks. I think he’s in a bank conundrum that there’s no way to go out with an agreement with the IMF, who he doesn’t want to agree. But, eventually, that situation is so complicated. It’s like he built his self-fulfilling prophecy.

Scott Ferguson: What is El Chivo? Is there a translation for El Chivo?

Ricardo Valencia: Chivo is Cool.

Scott Ferguson: Yeah, that’s what I thought. It’s just cool, right?

Ricardo Valencia: Chivo is equivalent to Chido in Mexico. Something chivo is something cool.

Scott Ferguson: And so it turned out not to be the least cool thing.

Ricardo Valencia: The least cool. Because Bukele thinks it’s cool, right? And now that’s what happens when he has bad press, and he’s not cool anymore in the United States. He suffered a lot. He’s very thin-skinned. But he wasn’t cool. Because if you are upper middle class Salvadoran with all these tech jargon, you think why is the solution. Like the Cyberlibertarians and crypto people in the United States, but people don’t want that. People don’t want tokens in general, they want money. They want dollars that they can spend. In El Salvador, it doesn’t make sense. But all of that was obvious, and he was warned. And that’s when you have all the power. You can do whatever he wants. He has that power center and a person and five more people around him.

Scott Ferguson: Who are some of the key players or companies that Bukele is attached to here?

Ricardo Valencia: Good question. First, Jack Maller’s from Lightning Network. He was, at the beginning, the one who’s supposed to work in the Chivo Wallet, to create a governmental wallet. But what happened is still a mystery, why they decided that the government should build instead of loan a network. Yes, and that they decided to make their own base created mostly for…the whole Chivo adoption is a constellation of companies. The one who has since created the app was Athena Bitcoin. And there’s a video about when they launched, and it’s known that Bukele never hired Salvadorans. They hired foreigners who have big NDA signed with them. The second part of that was the launch, the electronic part, but also the people who do people’s explanations. He hired teenagers to recruit people for Chivo. And that strategy was mostly driven by call centers. Many people who came, some of the people who work in crypto companies in Venezuela, and they moved to El Salvador to try to replicate the success that they have. There’s a constellation of people. Now with the Bitcoin bonds, a great idea — another Hail Mary — is Bitfinex. Bitfinex, through Blockstream. Samson Mao is involved with that, in the design of Bitfinex. Then, the people who are involved with Bukele are the Bitfinex people: [Max] Keiser, Stacy Herbert, and the guy Michael Peterson, who was the idea of Bitcoin Beach. An American from San Diego. He used to sell sausages here in the United States, who wanted to build a stable coin from Bitcoin Beach in El Salvador; he was more aligned with Jack Maller’s. But Jack Mallers went out from the project for reasons that we don’t know. And Bitso. It seems that Bitso is involved with crypto in El Salvador. I don’t know if they provide the service of buying the coins that Bukele says he buys. And Bukele is really upset with Biden but he loves American technology. And he loves American crypto people, which I find amaze, like a guy who seems very aware of geopolitics, builds all this infrastructure based in the United States that you just need a subpoena from the Department of Justice and all the things will be revealed. Because I don’t think these people will fight for Bukele. You know that right? If that affects the bottom line, Bukele is gone. Simple as that. And that is the constellation of people behind all the big experiments. And what’s happening is the Bitcoin experiment affects the traditional bond market for El Salvador. Since El Salvador approved making Bitcoin a legal tender, the risk went out. The default risk went up, exponentially. It’s the largest or second riskier country in Latin America that’s closer to the fold after Venezuela. And it’s completely correlated. And maybe there’s no even correlation is a causality that the Bitcoin approval caused the bond markets of El Salvador, the bonds are depreciated fastly. While he tries to solve with one hand what has been struggling for years is the yield they get from the bonds, right? And, that’s why we are in this conundrum. There was a good article in the Wall Street Journal that said that even the hedge funds are not given any hand to Bukele. I think he thinks Bukele is too crazy for them. Hedge funds! These are not human rights people who we all understand. That he’s too…And the ratings have been going down now. They’re lower than junk bonds. Right? And I don’t believe it’s only the microstructure of things. I think these agencies believe you have a little chip who’s unhitched, that they don’t have any freaking idea of running the country. And El Salvador is not Saudi Arabia or a country with more political, geopolitical power or oil. That means that they don’t, I don’t think they’re going to save anything. I mean, it’s very marginal what they can make out of El Salvador. It’s not like the relationship that they might have with Mexico, or even Colombia, or even Venezuela, which has the power of perfect consciousness, efficient in terms of energy. And I think that is, that is a constellation of people around El Salvador. Yeah, the weakness, geopolitical weakness of El Salvador doesn’t allow them to do more than at the end, getting us saved by the IMF. I don’t see any other option, right. The IMF, in the end, will do the same that they haven’t done until now.

Andrés Bernal: It almost sounds like what you’re saying is, amidst this kind of political, ideological crisis, this rich, spoiled kid from an elite family takes power and through his kind of connections with all the weird crypto bros in the United States tries to circumvent the complex macro and structural issues that El Salvador has

Ricardo Valencia: Exactly.

Andrés Bernal: And kind of forced this new approach. I was gonna ask, how was cryptocurrency marketed to the public? And you kind of answered that when you mentioned, right? Like, they tried to make it like a cool thing. On one hand, on the other hand, it seems as though they really didn’t try to win public appeal, they just forced it. Is that correct?

Ricardo Valencia: They forced it, and they will run it like a bad company, like a marketing company. They started giving vouchers, discount vouchers for gasoline. They couldn’t get people over. The whole point is, there were a lot of transactions at the beginning because people wanted to get the money out of Chivo, right? And there was a big…it was a haven for scammers. I have never even used a Chivo Wallet, even though I’m Salvadoran. I am entitled for the $30, which are now $11. But I wouldn’t be surprised that somebody else took the money from me. And there has been a lot of fraud that has taken the money from people. They tried to get the money, and there’s nothing there. And they tried to do that, like use it by giving you a $30–you can use it and pay things. But it didn’t work. Because people don’t want to have it. People love cash. And they want to have it in their hands. And that’s why in a country where people love cash, they didn’t see anything useful. Why do they use it? Why do they have to use it? Very basic questions, even from the business perspective, right? Is it sustainable or not? He wants to build a whole infrastructure in three months. The transformation of our society in three months, that won’t work. I think I heard that it took two years to change from the European national currency to the Euro. Three years! I mean, it was a cheap effort. And I think they didn’t see the point. I always try to understand the view of Salvadorans from how my grandmother, who’s now deceased, would see it. Like my mother. Why would she use her cell phone instead of getting the money out of the bank? When everything they can buy in the public markets is in cash. Happening in cash. Doesn’t make sense. I think that’s why it’s never appealing. It was at the end, used as a reward card, not as a payment system. I don’t know if that answers your question.

Scott Ferguson: Can we talk a little bit more about the details of Bukele’s authoritarianism, and what shape is it taking? And how is it related to the history of El Salvador? But then specifically, contemporary issues around gangs, I know, and also Bitcoin?

Ricardo Valencia: Well, the shape is a personal authoritarian. Which, aiming at what I think political scientists call authoritarian electoralism. Pretty much what is closer to Bukele, I think, is Fujimori. In Peru, in the 90s. Power is based on one person in which surveillance increases and the harassment of journalists. But at the same time, as Fujimori used terrorism in the 90s as a scape goat. The Shining Path, Sendero Luminoso, and MRTA, the other Peruvian rebel organization, Bukele is using the gangs as a scapegoat for things. Losing the battle of Bitcoin, he is focusing on that. The whole contradiction again, as you know, you love contradictions, as I love because it explains everything. The big contradiction is: for this authoritarian government to work and reduce the numbers of homicide, it has to arrest as many people as possible, but at the same time, they have to negotiate a deal with the gangs. And that’s what he’s working on now. These big contradictions between arresting people without any judge order. But at the same time, negotiating under the table with gangs. And that’s what I think the shape is happening. It’s a heavily authoritarian government that has increased internet and electronic surveillance, but at the same time, using the regular controls of political repression, which is arresting as many people as possible, and sending a lot of people into exile. And I think that’s the shape it’s going to take. And every time, I believe, the electronic jargon is a way to just show you are a typically authoritarian government, which is pretty similar to what happened in Peru. An increasing public relations and propaganda machine, right? And, that’s increasing, but also at the same time, Bukele is getting more paranoid because people might be finding him popular, when you ask them if they like the President. But if you look at his policies, some of them are very unpopular, right? And eventually, it will go down because nothing stays forever up. And that is the big fight, he has to keep popularity up. And the big first way to do it is to, perhaps, get reelected illegally because the Constitution prohibits re-elections by his people around wanting to run again. But I don’t know. That is a poison candy, because he’s gonna face a lot of issues after 2024. The experts said that they might be able to pay the debt by 2023, but they are way more skeptical about El Salvador paying the debt by 2024 or 2025. That’s the shape that has a very strong popular, but at the same time with interest of an international actor which has now privileged their relations with the hardcore right wing politicians in Washington DC because he doesn’t have any connection. But the thing is that even Breitbart has been critical of Bukele. He loves Brietbart now. What else does he have? Even Cuba has more friends in Congress. Yeah, even Russia. But that is the shape, the political shape there, and also shows you that authoritarianism makes things worse economically. It doesn’t solve anything. Now he’s been exploiting the pay that people have to traditional political parties. But eventually, that fades, right? You can forget things.

Andrés Bernal: A lot of people in the United States, a lot of the public hear in the media about the gangs and, you know, crime in Central America right now. And this led to mass migration. Can you spell out where the formation of many of these gangs and whatnot, kind of all originate from in El Salvador, and maybe tie that back to what you were mentioning earlier about some of the war that was experienced in the late 80s, early 90s?

Ricardo Valencia: Yeah, I think gangs are really a great product of the, in a lot of ways, from the American culture. All these people who left this country in the 80s, went to very disadvantaged, low income communities in LA, in Washington DC. And then they enter a culture that was a gang culture here in California. And then they form the first gangs here in the United States. Eventually, the United States started deporting people back to El Salvador, and they began to flourish after the Civil War, because of the situations of inequality, lack of opportunities. And also the United States conducted a high level of deportations. For El Salvadorans, many of them were in gangs. I mean, that is also producing mass immigration to the north now, right? That is like a circle happening again. The United States, these kids in the 80s came to the United States, they joined gangs, they enrolled in gangs, they participated in gangs. They are deported out of the United States, they are destabilizing the situation in El Salvador, and now all mass immigration, in large part, is due to gangs in El Salvador. I mean, it’s a circular situation that is happening again. And the problem is, it has a solution, but politicians don’t want to deal with long term solutions, right? And also, there’s a big resentment from the population against gangs and the ability of the extortions they are having, and they extort small business, but there’s no solution. And the only solution that Bukele is selling them is pretty much wiping them out from existence. The problem is they are taking a lot of people who are civilians, right? And also, they are vulnerable, like they are breaking human rights. Human rights were important in El Salvador because it prevented people from finding violent solutions, right? And that’s what happened this time. How do you solve a long term issue when politicians are only looking to win elections in three years. And Bukele started with this speech that was based more on prevention, but after the spiking homicides, he went back to stress in highlighting his strategies; an iron fist strategy that depends on a secret deal with the gangs. But in the United States it’s pretty important to understand El Savador, you cannot understand El Salvador without the United States, for better or for worse. And what you see in macroeconomics, and the debt issue in El Salvador is the same that happened in terms of safety. Mass migrations, increase in immigration. In the 80s, also, the diminishing of many…I think a lot of the things are also inherited from the 80s when all this political violence indeed destroyed a lot of social institutions and created a society where there is very little safety net. And that is something that has to be in a way responsible for the United States. The United States has some responsibility for what happens. Not all the responsibility, but a strong responsibility to what happens with El Salvador and Central America, generally.

Scott Ferguson: So you’re also tracking the geopolitics of crypto and Bitcoin elsewhere, and making connections not only from El Salvador to the United States, but all around the world. Can you talk about the role that crypto is playing in other countries right now?

Ricardo Valencia: I believe that crypto is playing a role in the way that they are. I think in terms of Latin America, they’re focusing on countries with high inflation: Venezuela, Mexico, perhaps Argentina. I think that Latin America would be the most important country to provide upper middle class people that ability or middle class people the ability to think they have money in dollars. Remember that’s the most important. They won’t change. They want to give the impression that money’s in dollars. But at the same time, I believe crypto has given authoritarian governments the ability to bypass sanctions. And also it’s becoming the usual Hail Mary that they are doing. In the case of Russia. In the case of Cuba, for example, in Cuba you can use crypto, but at the same time, you have to register in a database. The same is happening with Venezuela. And now in countries in Africa, it means because I think, they’re trying to achieve two things, geopolitical and global, to be used by authoritarians, and weak states, as a way to provide money for the states and getting money and liquidity. And at the same time, provide a service for upper middle class rich kids and people in those countries, right. That, I think, is the goal. And the third goal is producing a larger number of customers in the global north, that can help to replace the users they have lost in the United States, right? I think it’s about finding, in short, it’s finding globally new money, fresh money, that keeps the world running. And that’s why El Salvador is an example. You’re gonna see all the same people who are working in El Salvador working in other places like Samson Mao, the Mallers, Bitfiniex. All these people want cash. $30 Fiat, that’s what they want. But it’s not enough in the United States, because I believe they see the regulations that are coming. But you cannot go through El Salvador where people make only $300 a month. You need the states because the states are what Bukele shows, the state can invest half a billion dollars in whatever scam. And then these keep the wheel running and running and running.

Scott Ferguson: It reminds me as a kind of second time as farce version of the Chicago Boys, the economists out of University of Chicago, coming in and advising the Pinochet regime, right? You can only do neoclassical, neoliberal free markets with dictators backing them.

Ricardo Valencia: Exactly.

Scott Ferguson: But in this case, it’s not even using the powerful tools of the state, but rather it’s about, you know, startups and private enterprise. Yeah.

Ricardo Valencia: Exactly. Which, in a lot of ways, reduces the scope and makes it so weak. The Chicago Boys have the United States, right. And their geology and their theory, but I believe the whole crypto thing is that a lot of people want to make money fast. Not the dedicated neoliberals of the 80s, because I don’t think those authoritarians, the authoritarians of the 70s were not per se neoliberal, right? They were authoritarians, and close to fascist, but they were not neoliberals. Right? Velasco in Peru was a kind of social democrat, economically. Authoritarian as hell, but I think when they convinced Pinochet, it ruined a lot of things. But in this case, the scope is smaller. It’s pretty much cash. In that way, what’s happening now is the crisis with Ukraine makes everything be read through the eyes of geopolitics, and crypto is in a very difficult position. Binance is not judged by how many people are losing the money, but because they’re making deals with Iran, and Russia, and that’s why Bukele got trapped with the Bitcoin bonds, right? He thought, oh, man, I’m gonna have Bitfinex, who’s not allowed to make business in the United States, then maybe we can have some money from Russia and the Ukrainian crisis came! Where are you going to sell the Bitcoin bonds? You can’t sell it in the United States, with the largest market being three times larger than any other market. Then you’re going to sell it to Russia? Then you’re going to get sanctioned? That’s from the state perspective. From the startups, crypto companies, they just want the money that Bukele gives them. They provide an exchange scheme to exchange crypto to dollars, which I think, at the end, is one of the goals of these companies. Having a pile of cash, and places they can exchange what they have for the currency. And El Salvador is precious because it’s the dollar. But that amount of dollars that Bitcoin is costing, that crypto is costing El Salvador is making the whole public healthcare system falling apart like this education system.

Andrés Bernal: So in a way, what’s making El Salvador particularly vulnerable to this culture of crypto vultures is its dollarization in the first place.

Ricardo Valencia: The dollarization and having a President who has a pile of money, public money, available. Yeah, dollarization. Yeah, but I think why now the whole situation is making it more difficult even for crypto influencers to deal with Bukele because Bukele is in a big problem and crypto won’t solve it. But I think it’s so attractive, having a country with the dollar as a legal tender, because it provides you an automatic exchange without question asked. And that goal, the goal of the Bitcoin adoption law in the US Congress, right? The, again, the Salvadoran Bitcoin adoption law in the US Congress, which is gonna focus pretty much on money laundering. But that’s what happened. You can ask who wins in this deal? The people of El Salvador? No. The national state? No. Bukele paid $425 million in a PR campaign that made him popular among cultists about the Bitcoin cult. But that won’t solve…The deal, as you were mentioning before, the deal is systemic issues. They won’t because they are not made for that. They don’t, I mean, you’re asking crypto too much. Even if you believe that crypto has a utility, you’re asking too much. Yeah.

Andrés Bernal: So to kind of wrap it all up, so many critical insights. Tell us about the protests that are going on right now in El Salvador, and where you see pathways leading and what the potential of these protests presents both for El Salvador and then also for a kind of a resistance to private money or crypto politics in general?

Ricardo Valencia: Well, crypto provides a symbol for a very large number of grievances. Right? Bitocin summarizes the position of authoritarianism and also using scarce public money to fund something that people find exotic and strange. And that’s why it was the perfect example to, in a lot of ways, exert and call for a more nationalist tone of those protests, right? Before, for the people in the 2000s, it was against the dollar. Now, the protest is against Bitcoin. Like this foreign money that tries to own the country and impose an authoritarian regime. And it has a symbol and a logo. That’s amazing, right? What else do you need? That creates the possibility to frame the discussion, annoy the precedent and build a coalition between people. Why social movements go from people who are environmentally, women’s rights, LGBTQ rights…LGBTQ has been one of the most militant elements of El Salvador, right? They have been fighting for democracy since the beginning. Womens, too. The feminist organizations. But at the same time, maybe the more traditional unions, and more traditional social justice in El Salvador, and along with Catholics, and progressive Christians. That was the ability, the symbol that we’re able to find was the anti-Bitcoin. And that’s why they crystallize it. It allows us the interaction between young people with all people to change repertoire of strategies and tactics. Yes, and that’s why it became so important: the symbol of anti-Bitcoin was a symbol of pro-public money. We need the money to be for the public. You cannot invest the money in something that is not for that. You cannot privatize money. That’s the symbol. The dollar was not. We cannot rely only on America, on the United States policy. The script is we don’t have to rely, we don’t want our money to get privatized. And that is a powerful symbol, that there’s a lot of meaning behind. Yes, it’s a diverse coalition. Contradictory as always. But it was very symbolic that the protests happened exactly during Independence Day in El Salvador, September 15. Independence from crypto. Independence from Bitcoin. And the power of the state. Then, what do I think the demonstrations, the first demonstration against crypto in the world, perhaps? I think there have been more people doing that. But on a national scale, perhaps. What it’s showing you is the uncomfortable reality that any democratic movement in El Salvador needs to go beyond going back to the past. You can’t go back. Bukele destroyed the past already, right? Anything that needs to be built is in the future. And that’s the question that hasn’t been answered. And it will be complicated. And it wouldn’t be easy, it would be contradictory. And that is what is happening now. Some people are worried that the parties, they are very weak parties that can fight for democracy in El Salvador. And some of us, like myself, think it’s very healthy that this starts as a movement. Because many things that become parties later start as a movement. And also it has begun to think, a kind of a national message beyond polarization. And I think there’s a lot of people in both conservative circles and lefty circles in El Salvador, progressive circles, to think that the country is more important than our ideological difference. And that is something that has been really found in the last years and reevaluation of the word democracy, but at the same time, the word of unity. And that’s difficult for many in very extreme positions in both left and right. Like how you can build a national movement that goes beyond those differences and deals with a new reality. That’s a lot to ask. Right? And I don’t know if even the United States has it, but that’s the thing, how you move forward in the future. You cannot be stuck. You cannot be stuck with the past. You cannot be stuck with a generation who did the work and you have to move forward in a way that people in El Salvador have a solution until now they find there’s no other alternative than Bukele. And that is the reality. But I believe El Salvador always surprises me, and there will be a way that we will build a more democratic future with more inclusion, and sometimes you don’t see it until you see it. And you think sometimes that you’re going to lose the game, and in the ninth inning, you hit a homerun, you never know.

Scott Ferguson: Oh, Ricardo, thank you so much. This has been so illuminating. We hope to keep in contact with you and have you back on and keep us informed. 

Ricardo Valencia: Yes, thank you very much. If people want to follow me, I’m on Twitter, too. @ricardovalp is my Twitter handle, if you want to follow me. Thank you very much. I really appreciate this time. For trying to complicate the situation because I believe the whole discussion of Bitcoin and crypto in El Salvador has been focused on if the people are using crypto, or if the people are not using crypto and the default, economic default. But nobody is trying to arrange that crypto is just a byproduct of authoritarianism. That the only way that Bitcoin could be established there is through authoritarianism. It couldn’t happen in a functional democracy. And because they don’t want public legitimacy. They want power legitimacy to allow them to do whatever they want.

Scott Ferguson: Great. Awesome. That was fantastic.

Andrés Bernal: Great.

Ricardo Valencia: Thank you very much.

Monetary Austerity as Social Conflict

By David M. Fields

Monetary austerity, like fiscal austerity, is a top-down offensive. A monetary assault on working people is being waged in the name of fighting inflation. In similar fashion to the demagoguery that surrounds government expenditure cuts that lead to significant losses in social provisioning, a political climate of inflation hysteria has engulfed the US Federal Reserve, engendering a reactionary policy stance of protecting the wealthy at the social cost of maintaining a precarious working class.

The Fed has concluded that inflation is now its biggest challenge, but admits having no control over the actual factors underlying the current inflationary surge. Nonetheless, it defends raising interest rates as necessary “preemptive strike” to excessive price distortion, whereby severe “market imperfections” in the long run could undermine the dual mandate of price stability and maximum sustainable employment. In central bank jargon, such so-called forward-looking acumen conveys the message that anchoring inflationary expectations is the primary means to ensure market confidence or “credibility” for effective macroeconomic balancing.

The notion of an independent and knowledgeable technocratic Fed constitutes naïve faith. Monetary policy choices support some interests over–even against–others. So, contrary to what we are told, contractionary monetary policy is NOT a conventional tool to soothe market confidence in light of unpredictable inflationary expectations; it is an embodiment of social conflict, a coordinated attack on the working class to protect and maintain profit extraction. Raising interest rates, thus, is not “sound” policy in the truest sense of the term; it reduces consumer spending and economic activity at the behest of the rentier to insulate this social group from any possible unsavory transgression that may arise from economic uncertainty.

I am sure this seems like heresy to many, but let me try to convince you. The economy, as determined by the need to expand output depends on banking; the capacity for firms to purchase necessary amounts of labor and material inputs necessary for satisfying expectations of profit and for workers to receive wages is assigned by the availability of credit. Without banking, economic growth comes to a halt, since business investment expenditures stem from the need to borrow in excess of any pre-existing amount of financial resources. Credit provides deferred payment, which allows firms to manage sales, and, thus, facilitate long-run operational expansion. If there is a restriction on credit, as a matter of course, any attempts for increased production are futile.

Credit allows firms to pay out money for materials and wages to keep production and distribution going in advance of receiving profits from expected sales of goods. The implication is that firms will have to deduct interest payments from profits, which will be relegated to the banking sector. The cost of available credit from the banking sector is set by the rate of interest, which is determined by the Fed; this, by definition, determines the parameters of firm profit. A high rate of interest, for instance, would induce firms to forgo productive investment because access to credit is expensive. This would encourage firms to suppress wages, e.g. layoffs, which triggers recessionary pressures resulting from decreased production — this raises the level of unemployment, which is antithetical to working-class interests.

The decision by the Federal Reserve to raise interest rates by the largest percentage point since 1994 is, therefore, quite treacherous for working people. US Economic growth is well below full employment. The economy confronts headwinds from developments that constitute cost-push-markup inflationary processes, so we are not seeing the manifestations of so-called demand-pull inflation, that is, too much money chasing too goods, or too much wage growth, resulting from an overheating economy or overspending for which monetary austerity is requisite. There is an economically destructive rationale at play, wherein interest rates are hiked to the point that they depress wages to compensate for causes outside of the direct reach of the Federal Reserve, to put a stop to workers from taking advantage of unique historically-specific social circumstances to effectively bargain for receiving their fair share.

***This post is heavily drawn from my entry on ‘Credit Money” in the soon to be published Encyclopedia of Post-Keynesian Economics, edited by Loui-Phillipe Rochon and Sergio Rossi, see here.***

***Republished from the Monetary Policy Institute Blog***

Superstructure: Plato’s Republic (Part 3)

Historian and philologist Brendan Cook joins Scott Ferguson for the final installment of their 3-part mini-series devoted to Plato’s Republic. (See Part 1 and Part 2, if you are new to the series.) In Part 3, Brendan and Scott take up the vexed and largely maligned role of money in Republic. Weighing the fact that there is no linguistic equivalent for the modern English term “money” in Attic Greek, Brendan and Scott nevertheless align the text’s negative treatment of money-related activities with Plato’s impoverished univocal thinking. Next, they consider the limits and potentials of Plato’s well-known taxonomy of political regimes in Book 8 of Republic, noting how unfavorable invocations of “money loving” throughout the text’s latter sections abet a fatalistic and anti-democratic politics. Brendan and Scott then ponder the ironies of Socrates’ second paradoxical argument against poetry. And lastly, they explore the celestial “myth of Er” that closes Plato’s Republic. On their reading, this concluding myth not only implicitly betrays Socrates’ injunction against poetry, but also encapsulates the text’s key contradiction between expansive provisioning and zero-sum trade-offs.

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Varn Vlog with Scott Ferguson

Scott Ferguson joins Varn Vlog to discuss his approach to critical theory, aesthetics and politics. Special thanks to C. Derick Varn for permitting Money on the Left to re-publish the interview here.

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Money on the Left: The Journal featuring “Food, Money & Democracy”

Benjamin C. Wilson, Taylor Reid, and Max Sussman join the podcast to discuss their forthcoming co-written essay, “Food, Money, and Democracy: Cultivating Collective Provisioning for Resilient and Equitable Communities of Work.” Inaugurating our new journal, Money on the Left: History, Theory, Practice, the article politicizes what Sanjukta Paul and Nathan Tankus term “coordination rights” across monetary and production sectors and focuses on the coordination of food systems, in particular. Coordination rights are fundamental to the process of building resilient communities, our guests argue, determining whether social provisioning systems are “collective” or “concentrated.”

In our conversation, Wilson, Reid, and Sussman consider several promising cases of collective provisioning, which prioritize democratic participation and ecosocial stewardship over the austerity and profit-maximization associated with concentrated industry. Such examples include La Via Campesina movement for Food Sovereignty, the Black Cooperative Movement in the U.S., and restaurant reactions to the early days of the COVID-19 pandemic. Lamenting the failures of such models when faced with systemic illiquidity, our co-authors also importantly extend collective coordination principles to monetary systems, exploring small and medium-scale monetary experiments that use food systems as a way to build community capacity.

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Music by Nahneen Kula:


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

William Saas: Max, Ben, and Taylor, welcome to Money on the Left

Max Sussman: Thank you. 

Ben Wilson: Great to be here. 

William Saas: We’ve invited you all on the show this month for a very special reason. You three have collaborated on the very first– the inaugural– peer reviewed article to be published in Money on the Left, the journal, and the title of that article is “Food, Money and Democracy: Cultivating Collective Provisioning for Resilient and Equitable Communities of Work”. So first of all, thank you all so much for this really great article. And congrats! This was an anonymous peer review process. There’s probably nothing wrong with saying that the anonymous reviewers were very impressed with the piece and I think the editorial team was as well. 

We can’t wait for listeners to read your piece. While we don’t want to spoil it exactly, we do want to give a sense of what’s coming. And I don’t know if there are– and maybe listeners or anyone else on the call can correct me– existing journals that do this sort of thing. So we’re experimenting, and we’re glad that you’re experimenting with us. But to kick things off, would each of you mind telling us just a bit about yourselves; your professional and personal backgrounds in ways that may be relevant to the stuff that we’re discussing via your article? 

Ben Wilson: Oh, maybe I’ll go first. 

William Saas: We know you. Then you’re the easy one. You’ve been on twice, right?

Ben Wilson: So yeah, this is my second appearance on Money on the Left. So I’m really excited about that. I am an economics professor. Currently at SUNY Cortland in the Finger Lakes region of New York State. I study food systems and monetary systems and I’m always looking for ways that I can teach students doing– creating learning by doing opportunities supplied and service learning and things of this nature. 

This paper is kind of the confluence of all the things that I really enjoy– about the academy, about teaching, about learning, and about trying to make the world a better place through public provisioning and education, etc. So maybe I’ll pass it on to Max next.

Max Sussman: Well, let’s see where to start. I’ve been a chef my whole life. And that is primarily what I’m doing here. I started cooking when I was in college, I was studying American Studies at the University of Michigan. And I got into cooking, because I really enjoyed it and as a job in college to make some money, and I basically just never really stopped. I worked in Ann Arbor, Michigan for a good seven years or so and then moved to New York and cooked there. I’ve always been interested in food and everything that goes into it. 

When you’re a chef, you pay attention to where your ingredients are coming from and you pay attention to the farms that grew them, the seas that produce the fish that you’re eating, and the people that grow the food– I should say, not all chefs do that, but they probably should. These things were always super important to me. As I started to kind of go further in the career, I ended up working with a group of like minded chefs in New York, and helped found a group called FIG, which stands for “food issues group”. Catchy name. 

And we formed this group as a sort of education and action group for chefs and restaurant professionals who were interested in some of these social justice issues, environmental issues, workers rights issues that aren’t commonly considered part of the food media landscape. That was a big part of what I’ve done and then I moved back to Michigan just before the pandemic. Then I left being in a day to day restaurant environment. 

I started basically working for myself in that environment. I made pizza as a pizza pop up, took my pizza operation, my mobile pizza operation around to different bars and coffee shops in Ann Arbor. And I’m also currently working as a private chef for a family. I also own a fast casual restaurant with my brother in New York City where he is the managing partner. So he’s there on a day to day basis and I’m still a partner. So there’s kind of a lot of– that’s kind of a little flash background of my professional career. I think it was probably two years ago, I don’t know exactly the date, but it was around two years ago, where I actually heard Ben on Money on the Left talking about the Uni proposal. 

And as well as talking about food systems and food justice, and how to tie all these issues together. And I just kind of stumbled upon MMT in that moment and heard the podcast and I reached out and we started the conversation that kind of led to– I think led to us all being here today. So roundabout answer to that question. Told us not to be brief. So there you go.

William Saas: Don’t be afraid. Yeah. Also your mic sounds amazing. What are you rolling with there?

Max Sussman: It’s an Audio Technica mic. I’ll send you the link after if you want. I’m glad I got it in the right spot, too. So that’s good.

Taylor Reid: Hey, I’m Taylor Reid. I’m an associate professor of Applied Food Studies at the Culinary Institute of America. And I always have to tell people that even though I work at the Culinary Institute of America, I am not a chef. I teach farming and food systems, farm to table. I teach a lot about the connections between the restaurant and the rest of the world. I teach topics like climate change, food waste, and my research interests I think, my background are pretty eclectic. I’ve studied beginning farmers and organic farming standards. I’ve also done some work on farming and foraging and food insecurity in the zombie genre. More recently, I’ve been pretty interested, since coming to the Culinary Institute four years ago, I’ve been really interested in thinking about what chefs do and why they do the things that they do. 

And we can talk about this in a little bit, one of my initial interests that we were originally going to study was chef’s motivations for including foraged foods on their menus. I’m really interested in foraging. I love that there’s this new kind of resurgence of interest in foraging. I think that there are a lot of interesting economic questions around that too. Because while it’s simultaneously this free re-democratization of the food procurement process it also, within the restaurant world can have an element of elitism and tends to be the purview of some of the higher end restaurants that you might pay $400 a plate to eat at. 

So I’m still really interested in that question. But we kind of drifted toward COVID. Because I guess when we first got together, we were going to ask that question and then this pandemic hit and it just didn’t seem appropriate anymore. It seemed there was another much bigger question that was a lot more pressing because not only was the pandemic the dominant piece of the news cycle at that time, but we were all seeing what it was doing to the restaurant industry, and calling up chefs and talking to them about something other than COVID, it just didn’t seem right. It didn’t feel right at the time.

Scott Ferguson: So maybe this is actually a good moment to pivot to our second question, which is, I think some of you have already started to answer, but essentially, how exactly did you all come together? What shape or shapes has this collaboration taken? What do you guys talk about? What do you guys think about together and how are you learning from one another? Just tell us about this kind of process and how it’s unfolded.

Ben Wilson: Taylor and I have known each other for quite a while now. I think I met Taylor early in my family’s relocation to Ithaca. Through our children’s friends and friends’ networks and birthday parties and those sorts of things. I was immediately drawn to Taylor and his work because it dovetails with so many of the questions that I’m asking them politically, economy and you know, the foraging question in particular. So, to give a sense of where the conversation’s going, Taylor just assisted me in the delivery of my Political Economy of the Adirondacks class up at Raquette Lake, where we hiked this peninsula that was originally owned by the Durant family, which is the Intercontinental railroad robber baron family, massive Gilded Age wealth. 

And this property kind of represents this weird space where they were using local materials and labor and work that kind of on the surface might look like an ecological decision, but it was really just this colossal amount of wealth and power that allowed them to mobilize all those resources. But today, now, the property is a teaching resource. It’s a property of SUNY Cortland, it’s a National Historic Site. So on that site, we were trying to transform it from its Gilded Age exploitation origins to this teaching space, where we’re exploring the possible measurements of carbon sequestration on the property, and we’re exploring what types of food are maybe able to be forged or grown on the property based on soil contents, lake, and all the environment around it.

And it was really interesting to see my students wrestle with the eating of a dandelion on the property. Not only the lack of bitterness in their regular diets, but this idea that food isn’t just coming from the kitchen or the grocery store. These other places, and how we define food culturally, was a really interesting thing to watch them wrestle with in real time. So yeah, I think the forging question will be an interesting one as we move forward in terms of anarchy and exploitation, and all these different ways that we might feel to process it. And on the other side, Max introduced himself to me via– I think it was you, Scott, who introduced us over DM or something along those lines through the Twitter verse. And Max, and I started talking and reading an awesome essay that he wrote about third spaces.

Scott Ferguson: And what are the third spaces?

Ben Wilson: Max, do you want to?

Max Sussman: Yes, I definitely– I think I just sent you a DM somewhere and said, “Hey, you have no idea who I am. Would you want to talk about stuff?” 

Scott Ferguson: That’s often how it goes. 

Max Sussman: Yeah. So thanks for not thinking that that was too weird, I guess. 

Scott Ferguson: My pleasure, and thank you.

Max Sussman: But let’s see. So I was thinking a lot about restaurants, having spent probably 20 years of my working life in them a lot and thinking about some of the– what are some of the wonderful things about them and what are some of the things that we could probably stand to improve on them. I think one thing that struck me in the early parts of the pandemic was in a lot of other areas, a lot of the changes that happened in the restaurant world were underway beforehand and then were somewhat accelerated by what happened during the Coronavirus pandemic in the early part. And so, we were thinking about what is the social role that restaurants play in communities? And what are some of the essential– how are restaurants part of the essential fabric of communities and in the way that people use them as gathering spaces?

And the idea of food as being this natural way that people are connected to each other, and to the land, and to big, broader parts of society without even realizing it. And so, in that moment, when restaurants were facing this huge challenge of being cut off from their customer base and separated from the people that support them, at the same time you have people cut off from each other and unable to connect, you know, be near each other physically. And so we were thinking about what is something that a restaurant could be imagined as in the future? Or in that moment, without some of those pre-existing ways of people connecting to restaurants? So you know, how can a restaurant support people in the community without having a dining room? How can customers or people connect to each other without having that space to go to? And that’s some of the ideas we’re playing around with, as this project developed.

Scott Ferguson: And so what is the definition of a third space? Why is it third, rather than second or seventh?

Max Sussman: So there’s the idea that it’s a space outside of work and home, that can serve as a gathering place, and where these spontaneous interactions can occur between people. So the third place could be a restaurant, a cafe, it could be a park. Any sort of community, you know, other community space. But we have, in this day and age, there’s not very many spaces that are totally de-commercialized, where you can just sit and get together with people.

 And so restaurants and especially cafes that are a little bit less of the fine dining type place, it’s a place you go to get food, but you could eat food at home, right? You could always just eat food by yourself somewhere. So I guess the idea behind the third place is that beyond just providing sustenance to people in the form of food that you eat, it also provides a really important social role to communities for people to be able to gather with each other around food.

Scott Ferguson: Beautiful. Taylor, do you want to talk about maybe more specifically how this particular project that became the article that’s forthcoming with the Money on the Left journal came about? How did you pivot from foraging to what you’re up to here?

Taylor Reid: Yeah, yeah. I mean, it really started with Max’s essay. And we originally met to talk about foraging. And then as we were looking at that essay, one of the things that came up for us was that I was at the time, I was just for a class project, I was trying to figure out how to teach online. I had a capstone project class, and I had my students interviewing chefs and restaurant owners about their experience with the pandemic. That’s what seemed appropriate at the time. And we really started to develop this incredible dataset of these in depth interviews. And a lot of the things that Max was talking about in his essay were things that were coming out through this data. 

So I honestly don’t remember how it happened. But it transitioned into the process of all of us going through these interviews and trying to figure out what was there and how it linked with our ideas about the importance of the restaurant industry, and what was lost. When people couldn’t meet that way and we were seeing all of this– people were predicting that emerging from the pandemic, it was just going to be ghost kitchens. What ended up really happening through the process of us looking at this is that it really became apparent that restaurants are really important for other things besides just providing people with delicious food. 

A lot of that came out in the interviews as well as we started looking through the interviews. And then all of this other other stuff started to emerge too, like the way that despite– I mean restaurants pre pandemic, it was clear to everybody in the restaurant industry that restaurants were– there were so many restaurants and they were so competitive in a way that often they’re on the same street in the same building. They’re competing for customers on a daily basis. And there’s a lot of failure in the restaurant industry. And one of the things that we saw from the data is that you would expect, when an industry is hit hard like that, from the classical model of thinking about business competition, that they would become more competitive and cutthroat. But what we saw was exactly the opposite. 

There were at least four specific instances where restaurant owners were intentionally collaborating, sharing recipes, getting together to talk about business strategies, thinking about ways to overcome the challenges of the pandemic, and sharing information, collaborating with growers. Supporting growers and customers too. It just became a much more collaborative and cooperative space, the restaurant industry, at least from what we were seeing in this data than it was before it had this huge shock. And that really led to a lot of Ben’s thinking about cooperative provisioning. Maybe Ben, you can talk a little bit about how the theory developed from those conversations.

Ben Wilson: Sure. I mean reading those long form interviews was really powerful. Because so much of our lives were really kind of following the same pattern. So we were all trying to solve problems, and re-figure out our lives on getting our kids to school, and the dining room, and all these really strange things that occurred and worrying about restaurants and our communities, and what the future was going to look like. But we’re really started to stand out to me, right, because the restaurant, specifically the neoclassical or orthodox economics is kind of always used as this perfect example of the competitive firm. 

It became pretty obvious to me that it doesn’t really work that way. And it always bugged me in neoclassical economics textbooks, when they make the jump from the consumer that is an independent decision making entity, that as long as it’s doing it rationally, and then the aggregation of all those optimal decisions, least optimal outcomes. But if they made this jump to the firm– the firm is this coordinator of resources and that most of the textbooks will use that word, is the coordinator of labor and capital without really talking about what is doing that coordination. And I’ve heard Sanjukta Paul on your guys’ show and delved into her “Antitrust as Allocator of Coordination Rights”, along with the co-authored piece of Nathan Tankus on “The Firm Exemption and the Hierarchy of Finance in the Gig Economy”. 

And I really felt like this was something that was gluing all this stuff together for us that restaurants were seeking to coordinate, but they didn’t really have the rights to do so in ways that other organizations might. And the same sort of pattern, I think, was also emerging in my studies of Black cooperative movements in the United States where they were organizing these collaborative, cooperative structures for both consumption. So they began with large buying practices of grains and dairy and things of this nature to drive down costs and allow them to feed more people that emerged into more finished goods production and things like this that allow for them to coordinate on much larger scales. 

What neoclassical economics does in obscuring this and just defining the firm as a coordinator is that it doesn’t allow us to really think about law and institutions and decision making practices and how we arrive at those sorts of decisions and those practices. And I felt like this pattern is not only part of the firm structure and its problematic nature. But you know, it’s very much plagues the way we talk about money as well. Right? So where does money come from? Who gets to make decisions about when it’s created and for what purposes? Even in Modern Monetary Theory, the use of the terminology, “the monopoly producer”, I think, is problematic and part of this obscuring of the coordination that’s required from money to get where it’s supposed to go. And that was the other really big pattern that we saw in the restaurant data was that, no matter how big the relief package was, it wasn’t designed to help the small independent producer.

And so the restaurant owners kept talking about how they don’t– how they’re not heard, they’re not seen, the government doesn’t understand them. So this fit really nicely into this bigger question that I’ve always been interested in since my time at UMKC and studying Modern Monetary Theory, and the jobs guarantee is maybe coordination rights, when we start to break this down, can really contribute in the way that we understand something like the jobs guarantee in a more tangible way. 

You know, Randy Ray and others have written about social enterprises as being the vehicle for creating the jobs in that space. But what exactly are those jobs? And what’s the connection between the federal government and social enterprise that allows those funds to flow in such a way? I’ve always thought that there’s a gap– there was something missing and the coordination rights kind of create that legal infrastructure for starting to think about the connection between money resources and real resources, and how we define those things and how greatly they would change if credit provisioning was done in order to facilitate coordinated production for collective provisioning rather than the concentrated provision that we talked about in the paper.

William Saas: So let’s roll with that. What possibilities become possible in that context?

Ben Wilson: So I think– Max, do you want to talk about your friend’s restaurant group in Ann Arbor? I think that’s kind of a nice vision to get that conversation started.

Max Sussman: So in Ann Arbor, there’s a very well known and beloved group of restaurants called Zingerman’s. So it’s founded over 25 years ago, started as a small deli. And then they realized that they could– that they wanted to make better bread than they were getting. So they started a bakery, and then they decided they wanted to source better dairy than they could find. So they started a creamery. And then they wanted to open another restaurant, and they started roasting coffee. And now there are multiple businesses that are all supporting each other. They’re all each other’s customers, and they are– they raise the profile of each other and support each other. 

They can get a lot more done as a bigger institution than as any of them could get done as an independent restaurant on their own. And when I say get a lot done, I mean they have purchasing power, so they can support smaller local, more sustainable farms in more significant ways than a small independent restaurant could. They can support initiatives, like providing workers health care more in a greater way than the small independent restaurant could. So it’s a really interesting model for them to have pursued. In addition to all that, they’ve basically expanded horizontally, I guess, and created this self-sustaining network of businesses. So the bakery, it sells bread to the restaurants. 

So now the restaurants don’t buy bread from another bakery, they buy from their own bakery, and they can also participate in conversations about quality control, and sourcing, and all the workers talk to each other as well. So there’s just a lot that can become possible through getting organized in that fashion. That I think is– there’s a lot to look to for them to aspire to certainly from the perspective of restaurant owners, and I think from the perspective of workers as well as the perspective of the producers. 

Taylor Reid: Yeah, well, I was just going to add, this is something that’s come up in our conversations, because I have a background in ecology. And I think in academics in general, we tend to emphasize competition over cooperation. And there was a study that came out a few years ago looking at the number of papers in ecology that are emphasizing competitive relationships over cooperative relationships and it’s astounding the difference. But in nature, cooperative relationships are actually more important. 

The more diverse an ecosystem is, the more total productivity there is because its cooperation and actually is the dominant mode of interaction. And I think that we see the same thing in economics, we see the same thing in the restaurant industry, even when there isn’t the intentional setup cooperation like Max is talking about Zingerman’s. There’s cooperation that happens all the time. That’s really important. And we don’t recognize that when we study these things, we’re always just talking about competition. I’m not sure why that is. But maybe that’s another paper for some point.

Scott Ferguson: From here I’d really like to have you guys elaborate your critique that frames your paper. I think you’re doing a lot of positive work and work with counter examples that I want us to get into. But you also level a pretty strong critique at, I guess we could say, dominant models– the firm model and the firm exemption, which Ben has already kind of spoken to, but maybe we can say a little bit more about that. And then what Ben brought up and what you call in the paper, a concentrated provisioning system. 

So I think I get the sense that you’re calling out entities in the world, that actually are concentrated systems. Concentrated provisioning systems. But then you’re also critiquing the models by which we understand them. So what’s going on with these two terms, and maybe you can give us a little taste of some of the industries or histories that you critique in your paper.

Ben Wilson: So I think I’ll start. I’ll give the basic idea behind it. And then I think I’ll pass it off to Taylor to talk a little bit about industrial agriculture, because he really captures the dangers and the problems that are created when we concentrate provisioning, specifically in our food production system. But the neoclassical story that I was critiquing before, it wasn’t always that they just assumed that this coordination would occur. One of the more seminal articles by Coase in 1937, “The Nature of the Firm” asked a very specific question: why do firms exist? 

Because it is an ontological inconsistency to go from the individual to this, the thing that they just call “the firm”. And he comes up with this interesting definition that the firm may consist of a system of relationships, which comes into existence when the direction of resources is dependent on an entrepreneur. So he goes through all of this jujitsu to arrive at the fact that we have to have firms because we have this entrepreneur and the entrepreneur, we need to give them the freedom or the authority to direct resources in efficient and productive ways. And it’s interesting in that piece, he references somebody named Batt, B-A-T-T, who doesn’t use the word entrepreneur, but he uses the word “master”. So it’s a master-servant relationship.

And the master determines what the work is that the servant is to be doing. And when the servant is to be working, and for how long, and for how hard and all these sorts of things, which, you know, the lineage of this is a quick jump to slavery, and white supremacy, and patriarchy and all the things that are really pretty disgusting about the idea that the firm just spontaneously emerges out of nowhere. So we’re not really thinking about the firm as this hierarchical structure, then that allows them to produce and reproduce themselves as hierarchical structures over and over again, and the decision making process becomes increasingly anti-democratic. 

And Alfred Marshall and classical political economy really wrestled with this and argued that this is dangerous, right? Because there is the possibility that we would have bad masters that aren’t treating their workers very fairly. And if the workers aren’t afforded collective bargaining rights in their own right, then the exploitation is just going to continue to be exacerbated. And I think industrial agriculture really epitomizes this both in the way that the transformation of the farm has occurred over the 20th century. 

The directives of production on the farm, and then the corresponding community and the way that the community engages with farming, based on this concentrated provisioning system. The use of larger and larger scale production systems. And also has really taken nature out of the conversation as something that we should be reciprocating our relationship with in order to cultivate healthy diversity and all of these sorts of things that, like the worker, it is really left out of the conversation, the decision in meaningful ways. So that’s really where the hierarchy and concentration comes in. If we’re prioritizing an entrepreneur, then we’re disenfranchising those that are going into the production process and part of these communities of work.

Taylor Reid: There’s lots of things to talk about with industrial agriculture. But one of the things that we look at in the paper, there’s, I think, this myth that– farms are getting bigger and bigger. That’s clear. That’s happening. And you can see the graph over the last 100 years– cycle kind of accelerated in the 1980s. The myth is really that they’re getting bigger because they’re getting more efficient. It’s the idea that farms, bigger farms are more efficient. One of the things that we talk about in the paper is this research that’s been done by agricultural economists showing that once– when there’s consolidation in the industry, it forces farmers to get bigger. 

And so they’ve developed this measure that shows that basically, once the four largest firms have at least 40% of the market, they’re basically able to set price. And so concentration in the meatpacking industry is way above that, I think it catalysts like in the 80%, or something like that, and import gets in the 60s. And chicken, it’s up there as well. And so what’s happening is that, when the firms are able to set price, they’re always going to push price down, because then they’re able to sell more. So farmers that– and I’m making these numbers up– maybe they were making $1,000 per beef cattle before and now they’re making $100, they’re forced to get bigger, there’s no other choice in order to make the same amount of money that they that they had been making before from a smaller number of cattle. And so there’s this that we’ve been told is that farms are getting bigger, in order to increase efficiency, but they’re really getting bigger in order to maintain their meager profitability.

 And that’s just one of the things that we talk about in the paper. I think the bigger idea goes back to the complexity that we were talking about before. Farms have been increasingly forced to specialize, there’s no way to be– it’s hard to be a huge farm. Equipment is so expensive, and so specialized, and do a lot of different things. And I think that we see the breakdown of cooperation within rural cultures, when the farms get so big, that basically towns can’t exist anymore. 

You can’t have a school district within the county because all of the landowners have thousands and thousands of acres. And there are lots of pieces to it like that. The less cooperation that there is, the more dysfunctional the biological system is, and the more dysfunctional the social systems are.

Scott Ferguson: Max, what’s your experience in the industry? And can you can you flesh out some of that?

Max Sussman: Yeah. And I just wanted to go off of that, and say that we’re accustomed to thinking of consolidation as being something that inherently causes a lot of these problems. But if you go back and look at the restaurant industry, it’s definitely an industry that’s by and large, pretty unconsolidated. It’s a collection of many, many, many independently organized entities. And so then you realize that, well, that doesn’t necessarily inherently solve any problems, either. Because regardless of the size of the organization, there’s all these problems that are being caused to the environment and bad working conditions, and et cetera, et cetera. 

So I think that thinking about the coordination rights framework is so important, because it doesn’t necessarily refer strictly to things like size as the determining factor as to what things are going to be. It allows you to really think about things more qualitatively. Going back to I think, the question you asked before about what does this allow us to envision? What new possibilities does this allow us to envision is rather than, say, a relief package that’s based on a certain dollar amount, we could imagine a relief package that has the creation of new institutions that would help us create food based solutions to climate change. 

There’s any number of ways to [approach] the climate crisis. You know, there’s so many ways that we can imagine working together to solve those problems. It’s hard in a lot of ways, because restaurants are generally so discreet, they’re oftentimes separate. Maybe you have a couple of chef friends that you know or you’re a big chain. And that’s a whole other type of relationship there. But I think by and large, when people interact with food, it’s at the end of the supply chain. 

Most consumers are not seeing all these things. So I think that’s why, for me personally, it was really incredible to be discussing these issues with Ben and Taylor, because I, my whole life, I’ve been seeing things at the end of the supply chain, being like, well, how can I impact the world in a positive way? And it’s like, well, it’s actually really important to go up the supply chain, learn about more about the institutions that exist, that are impacting things that create the conditions that you’re facing, instead of necessarily, instead of just– it’s at the end of the supply chain, you’re just kind of tinkering around at the margins, and there’s not too much you can do in terms of impacting the bigger picture of the food provisioning system. 

I think that’s not to belittle any of the really incredible work that’s happening right now around workplace democratization, which is something that we’re seeing a lot of which is really, really incredible and should be celebrated.

William Saas: In the workplace democratization vis-à-vis, the need to go up the supply chain and think about coordination is interesting. In the context of a restaurant, I feel like where it seems like the default, at least in terms of stereotypes of how restaurants work is hierarchy, right? There’s a chef and there’s a vision and everyone executes on that vision. And others support that. I guess I’d just be interested– and maybe we don’t spend too much time on this– But maybe Max, your kind of observation about how a restaurant works, if there’s anything that we can abstract or or pull from that to help us understand better what– the benefits of coordination, how that might be more efficient than something like executing on a single entrepreneur, restaurant group, like Brinker International or something. 

Chili’s, shout out. I was a busboy there– first job. But yeah, I mean, it seems your experience in the restaurant space as a third space, which interestingly, I think also functions importantly, as you’ve talked about it as the second, as a place where second shifts are carried out where people come and do their interpretive labor about what’s going on at home. There’s also, having worked in restaurants, the people who are there have to frequently find their own third space, right? Whether it’s the bar next door, or down the street or whatever. A lot, a lot of stuff to chew on there. But what might you be able to pull from your experience in the restaurant space to help us understand coordination rights, I think?

Max Sussman: Well, I mean, I think we could probably talk about, we could talk about restaurants for as long as you want. But I think that there are restaurants– there’s a lot of different kinds of restaurants, there’s a lot of different kinds of people that work in restaurants by a very large caveat, but I think we can see the usefulness of structure in terms of a hierarchy in a lot of restaurants. And then at the same time, the potential for that structure to become toxic, and to help facilitate exploitive relationships and create situations without any accountability whatsoever. And I think those are– that’s the flip side of the structure and of the hierarchy there.

And right now, I think that something that we talk about in the paper is how to create more positive structures and relationships that are intentional and that we’re trying to see positive outcomes from. And I think where a lot of that work gets sidetracked or gets taken off the path is when there’s this intense focus on profitability in the restaurant world and how that becomes the main and the only goal that a lot of the people that are involved in the decision making pursue. And they aren’t even achieving it, but they think that they think that that’s the only thing that they need to be doing and focusing on. And once those two things clash in the current system, there really isn’t much to talk about. If you have a great idea, then oh, that’s cool, but oh, it’s gonna cost too much money. 

So, we explicitly talk about financing. And realize that in order to achieve some of these more positive beneficial outcomes, we need to figure out different ways of funding these projects, rather than these private investors, who are only looking for a return on their investment. And we need to figure out different ways to fund these projects and finance them, so that we can achieve more social outcomes. Otherwise, it’s just going to be, oh, you know, run this special and keep your food costs below 28%. And send the dishwasher home because it’s slow. And it’s the same old stuff that is going to be happening all the time, if all we have to go towards is some artificially constructed bottom line on the piano.

Scott Ferguson: So what’s the composition of private investment in the restaurant industry? Do you guys have that data? How often are banks investing? How often is it just individual investors? How often is it groups? If you don’t, that’s fine. We can skip this question. 

Max Sussman: I don’t know the answers.

Scott Ferguson: Okay. 

William Saas: And the context of the supply chain, you know, people interact with food, at the end of it. The restaurants are very close to the end of it. And that’s, I think what you’re talking about, Max. It’s natural that the squeeze of those if we had four groups that are at 40%, setting the price, like they own 40% of the farms are setting the prices that squeeze is shaping and determining what’s happening to that dishwasher at nine o’clock when it slows down. And the dining. Right, so–

Max Sussman: Yeah, and I just think that it’s such an important piece to the puzzle for people that are in restaurants to make those connections to realize what’s happening. I guess further up the supply chain is the way that I think about it, I’m sure there’s other ways to frame that. That’s impacting their ability to do the right thing. To do what they want to do is the right thing, and to make demands on those other institutions in our society that are affecting those conditions. Not just to be like, okay, well, what do we do? Do we charge a little bit more? Do we educate our customer base? Do we pivot? Do we do this through that? 

It’s like, wow, there’s all this other stuff, there’s a whole. There’s bills that determine what we subsidize in the agricultural industry. There’s laws like Taylor was talking about that govern how much consolidation there is in industrial agriculture. And all those things go into how much a case of cauliflower costs and doesn’t even kind of go into all the issues around sustainability and biodiversity and climate that we’re facing now that are also super, super important.

Taylor Reid: I think one of the other interesting things that we saw in this restaurant research is that during the pandemic, a lot of restaurants, a lot of the chefs and restaurant owners that we interviewed, use the pandemic as a moment to address some of the inequity issues, disparity in pay between front and back of house, toxic restaurant culture. 

And it seemed to me from that what was limiting their ability to do that wasn’t actually margins, because if anything, they were squeezed more during the pandemic was just not having the time to think about those kinds of issues and we saw that change. You know, at a time when restaurants were really struggling, in a lot of cases.

William Saas: If you’ve got time to lean, you got time to clean, but what if everything’s already cleaned?

Ben Wilson: One of the things that we heard was that it’s really expensive to do what’s right. And it’s just really– that’s one of the questions that we’re trying to tackle is, why is it so expensive to do what’s right? And part of that Max I think hit on really well was that this narrow objective of profit maximization is just not a good way to organize your society. Not a very good way to organize your food system. Certainly when Taylor’s talking about industrial agriculture and the ability to set prices, part of the price that they’re setting is the costs that it’s going to take to change all of this, right? The cost of water that we can’t drink. The cost of soil that is not going to produce food anymore, right? 

The dietary changes that this monoculture growing techniques create across our country. The pandemic really exacerbated these hotspots of food deserts and access to unhealthy foods and how these patterns overlap with bad access to public health care and limited resources and budgets in your education system and squeezing public universities in all these ways that, you know, when crisis happens, it’s the the actors that are working to solve public provisioning problems that get squeezed the first. 

Immediate response to the pandemic from our leadership was the Federal Reserve reenacted all the same tools it used in the financial crisis to stabilize the sheets on Wall Street and then the big banks. While our leaders in Congress debated and considered and thought about all the ways in which maybe they could halt the pandemic and arrived at really some answers that weren’t really all that beneficial. So how do we diversify those decisions about who gets their balance sheet saved? And how do we continue to foster environments where the Zingerman’s group is enabled the freedom to expand on and share the knowledge that they’re gaining through their cooperative enterprise behaviors? 

How it’s coordinating geography, how it’s coordinating price, how it’s coordinating where it’s getting its resources from, how much it’s investing in research and development. Right, how it’s sharing that information and teaching others, I think, is a big part of what we’re trying to figure out here is how do we help these successful coordinating systems continue to do the business of good work? In a way that doesn’t seem like it’s so expensive anymore? The folks that I work with up in the Adirondacks. I think the minimum number of jobs any one of them is holding right now is three. 

Three jobs to live year round up in a place that they love and they care about plus the volunteer work. The task force work is volunteer care work where none of them are getting paid to do that. And so how do you enable that sort of effort and care for a place where there’s just no monetary device right now to stabilize that other than constantly applying for and hoping that you get grant funding. Which, you know, if you’ve written grants, you’ve been turned down for grants. It’s far from a sure thing. And it’s super competitive because of the way that we structure it right? 

Money and finance that preferences profit driven activities over those that are gonna stabilize the environment, build climate resilience, educate folks, and rectify some of the ills that come from the development of an economy based on a master servant sort of relationship in our most dominant economic thinking.

Scott Ferguson: So I want to tee up a question about the Positive Alternative Financing Model Public Provisioning of Money of Liquidity model that you all are proposing. That’s really, I think, the heart of this paper. But I want to do so by maybe regrouping and flagging some really important points that have been made in the last few minutes. So one is while the various industries, the agro industry and the restaurant industry, may be driven by greed. 

What I also am hearing from you all is that an equal problem, if not worse problem from your all’s perspective, is the austerity of a profit driven model. And it’s the austerity of the profit driven model that makes everything so quote unquote, “expensive in a relative sense”, that often can feel absolute. And then that austerity creates a number of what feels like forced choices down the supply chain that– while as Taylor says, none of it is absolutely determinative, because in the midst of an economic crisis, we see the restaurant industry actually making things better. Nevertheless exerts all kinds of pressures, that might feel actual but might just be ideological or emotional. And that kind of thing. 

And then I guess another thing that I’m hearing you all saying is that as we think about whether we want to use the vertical metaphors or not, we can obviously use other ones as Max is saying, we think about up and down the supply chain. It’s absolutely necessary to think of not just the first kind of material producers, but to think about liquidity and to think about money at the apex of the supply chain, which doesn’t mean that it’s the only causal force, but it is certainly a major one. So I guess with all of these aspects of the problem in mind, what are you proposing would be another way forward that wasn’t profit driven, that wasn’t austerity grounded and wasn’t passing along these unhealthy forced choices and antidemocratic forced choices down the system?

Ben Wilson: So you guys want me to take this one? Well, the way I see it is we’ve got to really learn how to use money. And one of the things that we hear in the media right now, especially around the question of inflation, is that money needs to be tied to real resources. What better way to tie money to real resources then and to our food system? To start with specific spaces of production, where we can more closely link those resources to the money creation process. And so in order to help really learn how money works and operates, I think we need to enable people to set up and design and experiment their own monetary systems, especially around things like the restaurant group that Max talks about, La Via Campesina and its food sovereignty. 

Efforts to explicitly declare a set of production goals and objectives that are beyond profit and really don’t even include it. Like I think the triple bottom line narrative of social enterprises is a dead end, right? You know, whenever you have this triple bottom line, where you include profit, community, and environment in a crisis, you’re always gonna have to fall back toward keeping your doors open kind of thing. And then you spend all your time trying to find the money instead of actually doing the work that you would like to be doing. So allow these folks to find community organizations. We target anchor institutions, even though they’ve kind of received a little bit of a pejorative kind of connotation and other writings. 

I think universities, hospitals, hospital systems, these are big things in communities that aren’t just going to pick up and move at the drop of a hat, that have a relationship with our community that are already connected to all sorts of different production systems. That makes sense to be issuers of these sorts of credit provisioning opportunities to emphasize environmental production, emphasize mental health initiatives, education, school districts, all of these things, because they’re designed from the get go not to be profit driven, but our provisioning institutions. And so how do we begin to create goods and services outside of the profit driven motive is something that we’ve got to learn how to do. 

And learn that there is another way of producing and doing things for each other that makes life easier and not so expensive. And we’ve given banks the run of this experiment for 100 years now. With the idea that we will finance it infinitum, these profit driven activities and will underwrite this activity. For anybody and everybody to the point where they’re now underwriting activities that aren’t producing anything, right? It’s the shadow banking and the invention of the secondary markets and shadow markets and all these things that aren’t really driving actual production. So maybe it’s time to start reorganizing this different way to allow folks the opportunity to produce robust, healthy food systems locally to figure out how it is they want to make sure their kids are all feeling healthy and getting the care that they need, and so on and so forth.

Scott Ferguson: So you talk about in the article, some kind of possibilities that exist in some fairly recent legislation that’s been proposed, but hasn’t been passed, per se. And then you also talk about kind of bottom up community complementary currency options. Can you potentially speak to those two models?

Ben Wilson: Yeah, so, you know, La Via Campesina, I think we start with that as our example of food system change. Because it’s international in scale. And it sets forth a goal and an agenda that is sort of macro, right, so culturally appropriate foods for everyone. And I think the Green New Deal, the Public Banking Act, the Stablecoin Act, the E-Cash Act, these really large forms of legislation, kind of give us a vision for what people want, in terms of a democratic society, a sustainable economy, these sorts of things. So the basic idea is there. 

The question is, how do you enact a Green New Deal, right? What does it look like in our neighborhoods? And I think lots of people are already doing that work right. The Seven Valleys Health Coalition here in Cortland, New York is working tirelessly to solve food access issues– the Community Task Force is trying to do similar things. They just don’t have the resource connection and liquidity provisioning necessary and those acts– those bills all kind of give us the beginning pieces of that infrastructure on what it would look like in order to do that. 

So the Public Banking Act, in particular, I think, could be used to license things like universities and hospital systems and school districts to provision for themselves to ensure that we don’t go through this sort of austere terrible decision making crisis where we’re sending kids back into a classroom too early or we’re not supporting teachers adequately enough. Just the shortage of the provisioning of health care such as some communities are just so much harder hit by a pandemic than others, because they just don’t receive the standard of care that others do. We really don’t have to experience that sort of inequity if we are designing public provisioning of monetary systems with the idea that we don’t have to engage in that sort of behavior anymore.

Max Sussman: And I wanted to, Scott, I wanted to go back and answer a question that you asked earlier, and that might fit in at that point, but you asked how restaurants are financed? And I think it’s relevant. I think it’s a really important question. So, generally speaking, small restaurants are financed through smaller investors. They’re called friends and family for the most part. So they’re people that are connected to the people that are going to be the operators of the restaurant. And it’s through networks that already exist, which tend to favor power structures that already exist around race and class and gender and other hierarchies.

And as the restaurant itself gets bigger, then you would tend to also, comparatively, start to source your financing from bigger institutions as well. So you might then go to an investment group, or if you’re going to be a multi unit operation might be private equity that’s financing it, and then at some point, you might get a bank loan, but it’s not really a common thing, I think, probably due to the high failure rate of restaurants. It’s not really an exciting thing to give a loan for. But a lot of restaurants will have lines of credit at the bank after they’re operating. 

So just to tie it all back into that, I think the one way that we can make it easier for people to do more good things with food projects, is to make it easier for them to access credit and capital to make these projects happen. And that can happen in a lot of different ways. That could happen through changing laws, that can happen through– as we know, banks are licensed agents of the government that make decisions based on certain sets of criteria. So it’s been something that people have been calling for and in the wide– in all areas, right, like, make access to credit easier for businesses, people of color run businesses, for example. 

So we could also similarly call for access to credit to be made easier for restaurants that fit a set of criteria about how they treat workers and how they’re organized internally, and how they relate to their local economy and how they source their products and all that kind of stuff. And then the other thing I wanted to mention was that– so like Ben was just talking about, the interrelatedness of institutions, especially anchor institutions and the role they play in their local economies. Not just not just hiring workers, but making their own procurement decisions. 

And so one thing that is important in the food, and the food world is for schools to be changing how they source their product. And they have contracts that they signed with, you know, big, often really institutional food service suppliers, that are definitely not thinking about sustainability, not thinking about workers rights, and not thinking about a lot of these issues. And so applying pressure there, which is something that, say parents could do if they have if they have kids in a school, or students could do if they’re at the school and applying pressure for these institutions to make their purchasing decisions more responsibly and to not. 

So that’s something that’s always been happening, but also to apply pressure to perhaps create new institutions that are interrelated and connected and can make these decisions together and in local and regional economies can happen.

Scott Ferguson: Yeah, that’s wonderful. I just want to add something that I think is, I think we’re all assuming, but no one’s actually said it aloud, which is: if we saved through the Public Banking Act, establish all kinds of different bank licenses in banking and financial institutions in the public interest that have certain kinds of criteria, and that some maybe are specially designated for regional and local restaurants, or maybe they specialize in a host of similar kinds of services like that, I mean, I’m not an expert, I’ll let the experts take it from here. But crucially, right, this access to credit, A) need not be something like a traditional loan, where precisely one has to drive the business forward through the motive of profit in order to repay the loan. 

So that’s the first thing. Maybe some of it is a loan, some of it is a grant, maybe all of it is a grant, as long as your obligation is a social, qualitative and ecological obligation rather than merely a quantitative one. And then I think, secondly, thinking about the public banking system itself, as being what we might call using conventional language perpetually in deficit. Perpetually in debt to the society that it is serving. And that way you reverse the kind of drain that the private banking system creates, right? The private banking system says, “no, feed me. Feed me or we’re going to die and everyone has to feed everybody else, or else everyone’s going to perish”. 

Whereas if you have a bountiful– like the Fed is right– a bountiful source that says, “no, are we meeting the eco-social goals that we’re after here?” Then you’re really putting– I love water metaphors– you’re really putting a plug on that drain.

Max Sussman: I mean, it makes me think of the line that the public deficit is the private surplus. And it’s like as Ben was saying, we need to figure out ways to use the monetary framework to do good things and to create public things that have public purpose in society, as described.

Ben Wilson: And then we need to– I love calling money an IOU, right. And I think more than just being a promise to pay, it should be a promise to do. And the more you gather folks like the Seven Valleys Health Coalition or the restauranteurs that we studied– when you are bringing together collective effort to feed your community to stabilize employment, all of that work is unpaid care, labor for your community, that you are taking on more, and you should be receiving the credit for those efforts and that work, so that it can continue and grow and expand. So what are we prepared to promise one another? How are we willing to promise each other an ecological culturally appropriate food system on a global scale? And if so, where are the resources that we need to do that? 

And this is really just a change in the underwriting practices, right? Max keeps bringing up standards or criteria. We rewrote the book, all the books and created all sorts of coursework on underwriting when we changed mortgage lending laws. So that soldiers returning home from the war could buy new suburbia, tracts of land and houses, right? This is the same sort of work that needs to be done.We need to figure out how to underwrite and to provision a healthy, sustainable and culturally appropriate food system at a global scale. And that starting there is a good place to expand into other areas – a culturally appropriate and sustainable arts culture and healthcare and all the things that make life meaningful and useful and wonderful, and that tends to get crushed by other things. 

I think something that really captures this was on Twitter not too long ago, there was this kerfuffle about whether or not restaurants would exist under socialism. It’s like: Where is your imagination, right? What? You know, why would people stop wanting to prepare foods and to do it in an interesting and artistic and opening and grateful way for one another? Why would that experimentation and that desire to do things for one another disappear? I think McDonald’s would disappear under this sort of public banking infrastructure, but I think we would still have wonderful arts and culture experiences in our society. 

Maybe more so and more readily available, instead of having to sit by ourselves or on the couch in the dark watching Netflix. We will be out in the public space watching performances and have a much greater and larger third space for all of us to enjoy.

Scott Ferguson: Can I ask just– Taylor, how much has the work you’re doing in collaboration here informed your pedagogy?

Taylor Reid: That’s an interesting question. I mean, wow, I’m gonna have to think about that. I think, in so many ways, I think we artificially segment economics and biology and in agriculture is one of the places where they come together. Restaurants is one of the places where they come together. I spend a lot of time talking to my students, especially my young students, about the interconnections between these things. And for example, healthy soil. Healthy soil is really important for having good tasting, nutritious food. 

That’s obviously really important to a chef. It also has the added benefit of helping us to store carbon, which addresses the climate crisis. And we’ve seen from agricultural economics, that it’s also the best indicator that we can find, for the financial success of farms. There’s an almost direct correlation between the percentage of organic matter that you have in your soil, and the financial viability and resilience of the farm. 

And so I’ve been thinking since having these conversations a lot more about the artificial duality that we create between the various silos in our institutions. And I think food is a perfect place to start breaking those apart and making these connections. Because there are some very obvious and intuitive connections in the food system that challenge this notion that these are all separate ideas and entities. And I think that’s something that I’ve been able to bring to my classes and bring to my students in a richer way as a result of our conversations and as a result of our collaboration. 

Ben Wilson: Yeah, I think that’s absolutely true. You know, the siloing and academics’ work is really detrimental. And so hopefully, this paper and some of the things that we’re thinking about foods, can help us to start to break down some of those false barriers between our intellectual pursuits. And that’s, frankly, why I was so drawn and interested in submitting the paper to you guys, because I think you and the Money on the Left is really at the forefront of pushing the boundaries of interdisciplinarity and transdisciplinarity. 

And really creative in amazing ways. And if you scan the references here, it’s a who’s who of people that have been on this show. So, yeah, in terms of teaching people, I think as a counter example of what not to do, Bitcoin serves as a point of reference in the paper. Like, here’s a philosophy grounded and scarcity exchange that is just gross. It’s not working, it becomes a speculative asset, right? It’s burning all sorts of energy for the production of nothing– except like, Twitter followers, you know.

Scott Ferguson: That’s something!

Ben Wilson: So, we can design monetary systems and we can implement them and all sorts of scales. And so, don’t be afraid to try to set up a monetary system in your community or your classroom. And use design principles that you’ve learned about in this podcast and from people that think about money and monetary sovereignty and how it needs to be dissolved from a narrow borders sort of perspective to be more likely La Via Campesina and inclusive and beyond boundaries, sorts of ideas. 

And so yeah I’m trying to teach my students by running monetary systems in my classes to promote nonprofit  work, and they seem to get it. And they like the idea that money isn’t the root of all evil, but could be something more productive and as a means of connecting folks, rather than segregating them and separating their interests.

Scott Ferguson: Max, what’s it like to be an MMT Chef? In whatever resonance you hear.

Max Sussman: Weird. I mean, one thing I wanted to say quickly was how important I think it is to take the MMT insights and apply them in areas where they’re not traditionally, or rather, just where they have not necessarily been applied yet. And I really think food is super important. And I think it’s something that we have to do moving into the future. Things are gonna get not great in a lot of ways. In terms of the climate, there’s some things that are kind of, there’s changes that are going to occur that despite our best efforts will probably result in things getting tough for farmers and for our food system. Coming from the land and from the sea. And it’s going to change things a lot. 

So I think that we’re going to find that communities that have  taken a lot of the MMT insights and figured out how to translate them into local and regional levels, it’s going to be such an important development. And it’s not going to be all “oh, well, the federal government can do anything– can pay for anything.” Because if it doesn’t, then we still have to fix problems and take care of each other. We can’t only be just waiting for that to happen there. And food systems, they work regionally. So it’s a natural way to  take a lot of this learning and figure out ways to apply it. 

And I like, would again, I would echo what Ben was saying, to encourage people to try to experiment in their communities and work with each other, to build these systems that are resilient, that use money, and that take care of each other because it’s important now it’s going to only become more important, for sure.

Ben Wilson: And just to build on that for a second. One person who is not with us, but was really instrumental in the development of this paper is Jakob Feinig, who really helped with an earlier draft of the paper and his Moral Economies of Money really served as inspiration for a lot of the ideas here. And that book is full of real world examples of how we have come together as communities to create monetary systems and to change the provisioning, not just of agricultural products but build entire public waterworks systems. So definitely familiarize yourself with his work if you haven’t done so already. 

Max Sussman: And I love that you brought up that Twitter moment about whether there would be restaurants in some unspecified post revolutionary future, but I really hope that we– which is a really silly premise– but I really hope that restaurants change in the future. I think that we can all together envision ways of creating social spaces that benefit communities that feed people. And that don’t replicate these harmful systems and these harmful hierarchies and these toxic work environments.

 I think “culturally appropriate” is a really important phrase, and I think that a restaurant– places where you can get food in a community should serve the community and there should be a relationship there. And yeah so there’s plenty of imagining that we can all do, and if any other chefs are listening, get in touch. We can imagine together and hopefully build something.

William Saas: Any additional closing thoughts or reflections?

Taylor Reid: Yeah I mean, I really think that we’ve covered a lot of ground here and that’s been one of the really nice things about this collaboration is that because we come from different perspectives, a lot of the things that Max was saying about the restaurant industry goes for farming as well. It’s very clear that we need to change our farming system, and you know the environmental reasons are very clear and the food security reasons are very clear. The economic reasons are very clear. The crumbling of our rural communities. I don’t think that we are as explicit about that in the restaurant industry. 

I think that critique has been made more powerfully about agriculture, but I think we also need to think about the connection between the two. I tell my students all the time, restaurants drive the agricultural system that we have. Because restaurants are the end users. And we’ve told farmers for the last hundred years that what’s important to us in restaurants is cheap food, and I think that we need to start changing that conversation and thinking about how to send farmers a different message. Because farmers will respond. 

If what’s actually important is flavor and nutrition and a healthy environment and healthy water– sorry Scott– then farmers will respond to that. And so I think we got to keep in mind that that connection within the food system, these aren’t isolated enterprises. Food is one interconnected web of activities and people and culture.

Scott Ferguson: Well that’s a beautiful place to stop. Ben, Max, Taylor thanks so much for writing this piece. Thanks so much for joining us for this wonderful conversation.

Ben Wilson: Thank you, it’s been fun.

Taylor Reid: Thanks for having us.

Max Sussman: A great honor to be here and to be working with you all.

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

Projections 5: In Social Medias Res

In episode 5 of Projections, Will reflects on how recent editorial decisions at The Washington Post and New York Magazine have opened both institutions to public pressure and contestation during a period of right wing media campaigns against feminism and so-called “wokeness.”

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

Superstructure: Plato’s Republic (Part 2)

Historian and philologist Brendan Cook joins Scott Ferguson for the second installment of their 3-part mini-series devoted to Plato’s Republic. (See Part 1, if you are new to the series.) In Part 2, Brendan and Scott turn their attention to the education of the guardian class that occupies Republic’s middle books in an effort to examine how the text’s zero-sum or “univocal” metaphysics of mediation variously undermine its commitments to abundant provisioning. Along the way, our co-hosts investigate Republic’s elitist critique of democracy, contradictory endorsement of the so-called “noble lie,” and much-discussed analogies of the sun, divided line and cave. 

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Municipal Money After Crypto: Austin Edition

Mike Siegel and Mike Lewis join Money on the Left to discuss municipal currency politics. The conversation focuses, in particular, on our guests’ recent success in Austin, Texas, where they helped critically rewrite anti-public and anti-environmental crypto legislation to open fresh possibilities for public banking and payments that support local communities and ecologies. 

A former public school teacher, Mike Siegel is a civil rights attorney, a co-founder of the progressive non-profit Ground Game, and a former Democratic candidate to represent Texas’ 10th Congressional district in the US House of Representatives. Mike Lewis, meanwhile, served as communications director for Siegel’s 2020 campaign, works regularly to advance Ground Game’s commitment to progressive electoral politics, and remains a prolific advocate for public money. 

In early 2022, Siegel, Lewis and Money on the Left Collective member Andrés Bernal mobilized an effort to block the development of an official cryptocurrency in the City of Austin. Initially, they appealed to the Austin Chronicle opinion page to reshape public opinion. Next, Siegel, Lewis, and Bernal persuaded and then worked alongside Austin City Council members to amend recently-passed crypto legislation. Impressively, these amendments introduced new language into municipal law, warning against the eco-social dangers of crypto, on one hand, and articulating a broad-based need for robust public banking and payment systems, on the other. Woefully underreported in comparison to news about all things blockchain, the story of municipal money politics in Austin represents a powerful model for local public money action worldwide, particularly in light of the recent catastrophic crash in crypto markets.

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Music by Nahneen Kula:


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

Maxximilian Seijo: Mike Lewis and Mike Siegel, welcome to Money on the Left.

Mike Siegel: Right on. Thanks so much for having us.

Mike Lewis: Hey, thanks for having us.

Maxximilian Seijo: We’ve invited you two on the show today to speak about your efforts to redirect some… what we could say, misguided attempts around cryptocurrencies and municipal politics. Moving it more towards a movement for public banking and public payment systems. And so we’re especially interested in hearing about your organizing in and around the city council in Austin, Texas. We feel strongly that this still relatively underreported story can serve as a powerful model for local public money action worldwide, particularly in light of the recent catastrophic crash in crypto markets, including certain stable coins. 

Before we launch into this conversation, though, we’d like to give you each a chance to tell us a bit about your professional and personal background. Let’s begin with Mike Siegel. Mike, can you say a bit about yourself for our listeners, who might be unfamiliar with your previous congressional campaign or your organizing efforts with ground campaign Texas?

Mike Siegel: Well, thanks again for having me. Great to be on Monday on the Left. I’m Mike Siegel, I’m a former public school teacher, union organizer, and civil rights lawyer. In 2018 and 2020, I was the Democratic nominee for Congress… challenged this guy, Michael McCaul, one of the most wealthy and most corrupt members of Congress. And, you know, it was endorsed by Bernie Sanders and Alexandria Ocasio Cortes and labor and progressives and environmental groups. With the help of a really broad coalition, you know, ran a campaign that was probably the strongest pro Green New Deal campaign in the South among congressional candidates. Built a really strong base of organizers and volunteers and turned what was previously a safe Republican district into a national battleground race. 

Despite being for the green New Deal Medicare for All and endorsed by Bernie, I also was a D-Triple-C candidate. So somehow was able to thread that needle of getting both mainstream and progressive support. After 2020 I didn’t want to keep running for Congress every year of my life. I stayed in the fight and politics. I joined together with another progressive Democrat, Julie Oliver, we founded Ground Game Texas. The basic idea is to fund year round work in politics, not just getting out the vote for a candidate on the eve of the election. But working year round, focusing on places that don’t get enough investment, and focusing on progressive issues. We know that the Democratic Party in many parts of the South is not popular, but our issues are. I would include what we’re talking about today, you know, the idea of public banking. I mean, these are issues that really appeal to working class people. 

What Ground Game is doing, you know, we’re basically based on 2020. Joe Biden was outperformed in many states by progressive issues. Florida, 60% voted for $15 an hour, but voted for Trump. South Dakota legalized marijuana and voted for Trump. We’ve got a set of issues we call workers, wages, and weed. The idea is to lead with these populist, popular issues, and then use that as a way to engage more people in the political process. Long story short, right now, Ground Game Texas is running ballot measure campaigns in 10 cities to get issues like these on the ballot as a way to excite more voters.

William Saas: Mike Lewis, you are a great friend to us at Money on the Left,  having transcribed some of our important back episodes. Could you say a bit about your own roles that you’ve played in Austin politics and how you might have collaborated with Mike Segal in particular?

Mike Lewis: Absolutely. Thanks for having me, Billy, Max, and the Money on the Left crew. I’m Mike Lewis, I’ve been a volunteer activist since the Bernie 2016 campaign. Prior to that, I was kind of passively aware of politics. I kind of identified loosely as a “Ron Paul libertarian” as folks do who grew up in rural Texas. Turned around thanks a lot to my Mom who started organizing against a sinister landfill company. She was posting Bernie memes on my Facebook wall. I got into organizing and showed up at a Fajita Phonebank for Bernie in January 2016. I’ve been working on various campaigns and issues ever since. 

I worked on Mike Siegel’s campaign in 2020 as comms director, really helping kind of develop and organize around the green New Deal. We actually organized the first major Green New Deal town hall in Texas. Built that into winning over the labor support in Texas with AFL CIO across a bunch of different labor unions. Building their trust around the programs just transition and whatnot. I’ve been working also as a volunteer research assistant for different projects in the MMT space as well. Helping Andrés Bernal publish a paper as a research assistant on inflation. Then we have an upcoming paper that we’re working on around MMT for local government. Really helping progressive candidates up and down the ticket, especially around messaging public finance approach, the classic “how do you pay for it” question that we all love.

Maxximilian Seijo: Thanks so much, Mike. Maybe to set up this narrative for a bit, can you all explain what’s been going on with the crypto industry at this sub-federal level, both in Austin and elsewhere? As you do so, maybe try to provide some basic definitions and context for our listeners who are not closely following this space? So for example, what for instance, is meant by the term “crypto”, “blockchain” or “web point three”? Who are the big players in this world and what are they trying to accomplish? How is the crypto industry strategy and rhetoric been changing as of late, at least prior to the recent crypto market crash? By contrast, where do orthodox municipal commitments to bond and tax financing fit into crypto’s advance? 

And how are you all working alternatively, to transform Municipal Finance, guided by the insights of MMT? Most important, finally, how do you all see municipal public money politics affecting various struggles for social and environmental justice? There’s a lot there, but maybe we can wait into some of these questions.

Mike Siegel: Mike, you want to start? I feel like you’re more of the expert on these issues.

Mike Lewis: Sure, right on. Yeah, I guess I’ll start with the definitions. Cryptocurrency is, you know, it says it’s a currency, right? But it’s a private token on what’s called a “blockchain,” which is a line of code that has a consensus mechanism. There’s proof of work, proof of stake, different consensus mechanisms out there. All the popular cryptocurrencies operate on a proof of work blockchain, which is basically a justifiable rage at private banks. Bailouts from the 2008 financial crisis kind of led this this project of cryptocurrency on a quest to create this, quote, unquote, “trustless money system”, where not only is code law, but apolitical laws, as Ron Gray recently pointed out responding to one of the Winklevoss tweets, that was talking just about how, you know, there is no politics here. It’s a trustless money system, you don’t have to have any kind of mediation between parties, but you can basically trust in a line of code. 

It’s kind of a deeply libertarian ethos that’s built into the technology itself. It’s basically, you know, a cyber collectible asset priced in dollars. It uses money aesthetics, to prop up a revolutionary technology narrative. It’s most likely… it’s an unregulated security. It’s something that is kind of imagining money as a scarce object. That is, you know, finite. Of course, most people really only buy into this stuff because it’s going to increase in value, in dollars. It really kind of defeats the purpose of what money is, which is the things that price, things are priced in the actual unit of account. That’s kind of the basics. You know, Web3, is basically just imagining the internet. If we’re in Web 2.0, right now, which evolved out of Web1, Web2 being the platforms, you know, Facebook, the different kind of centralized platforms. This kind of venture capital backed project around so called Web 3.0 imagines putting the internet onto a blockchain. Just to make sure to zoom in on what a blockchain is really just think of that as a distributed ledger that is append only. It’s imagined to be something that’s immutable, that can’t change. 

But of course, there’s many examples throughout crypto history of exactly the opposite happening. I think one of the things to really understand about the crypto space as we get into this conversation has to deal with stable coins which when you walk into a casino and you get casino chips, you trade your dollars for an official casino chip, and that’s supposed to have exact value to the the amount of dollars that you put in. So the way that the crypto space works– the way that people on ramp and off ramp out of these crypto tokens is they convert their dollars into these so-called “stable coins”. What we recently saw with this huge crash, with the Terra stable coin, the fourth largest crypto token that was out there about $18 billion in market valuation, we basically saw the value proposition of the crypto space kind of contradicting itself and failing as it has repeatedly again and again. 

There’s been so much money pouring into culture and the politics from the crypto space. It seems like they’re kind of desperate for new suckers, new liquidity, so that they can kind of exit from their initial investments. We’ve seen, of course, massive amounts of celebrities endorsing everything. Maybe that that kind of leads into where we picked up with things here in Austin, I’ll kind of pass it over to Mike.

Mike Siegel: Right on, yeah. To be clear, I don’t promise to be an expert in any of this. Mike Lewis is kind of my translator for a lot of this new financial technology. He turned me on to Stephanie Kelton and an MMT. I think what I’ve been trying to do the last several years as a relatively high profile kind of political figure on the left in Texas, is like how do we translate these ideas into political campaigns and action? And how do we build coalitions that kind of understand these concepts and combat the status quo in Texas? I would say, the way this issue came up in Austin is essentially… I mean, first of all, think of Austin– all the big tech companies are ramping up more and more. Google just bought 50 stories of commercial office space on a riverfront property, like the most beautiful building in Austin. Facebook, Oracle, everybody has these huge footprints… Amazon going down the line. 

That’s often an extremely booming city that is unaffordable for even working class, middle class people at this point. And you have the Super Bowl, where everyone knows that there’s all these pro-crypto ads in the Superbowl. That’s followed up by our annual festival in Austin, South by Southwest. And I think most your listeners are generally aware of what South by Southwest is. But it started out as this kind of cute Music Festival, Film Festival, and has now become this major cultural moment where all these big venture capital folks, tech bros, and what have you are coming to Austin, spending 1000’s of dollars for tickets to the festival, spending all this money and hyping up their various pitches and proposals. So this year, South by [Southwest] was bigger than the last couple years because of COVID. 

There was kind of like a big push to make South by [Southwest] this huge event. It seems like in concert with that, the crypto money came to town, and particularly the crypto political money. And this is something that I’ve been very aware of that there are now, you know, super PACs trying to influence candidates on crypto issues. Trying to give congressional candidates millions of dollars. Trying to influence city council candidates. So what seems to have happened in Austin is it in concert with South by Southwest, the crypto lobbyists started reaching out to city council members in Austin and other local political figures to try to get some sort of symbolic win in Austin, timed with South by Southwest. And it seems like their goal was to push Austin to adopt a coin similar to Miami, or some of these other places– an “Austin coin”– that would be this blockchain style currency.

 That was kind of the move they were making. I got word of this because through my political work, some of my labor allies who happen to work in City Council offices, they pinged me, “hey, you should take a look at this draft resolution circulating”. It was basically… it was going to be a city of Austin official action that endorsed blockchain and crypto, and basically offered the services of the city bureaucracy to advance the local so-called Web 3.0 movement in Austin. And there were two or three draft policies. Some of them were extremely supportive. My immediate concern was that these folks, what they were basically going to do is get the city of Austin to endorse this get rich quick pyramid scheme, as Mike Lewis described it. And that a year or two from now when crypto crashes, all these working class people would invest in crypto because the city of Austin put their reputation behind it and they would be screwed.

 I’ll pass the mic back to you in a second, but long story short, what happened was once we got word of this move that was happening in the Austin City Council, Mike Lewis kind of gathered some experts. We created basically an educational guide for the City Council staff and officeholders so they understand what these different terms mean. Because a big part of this is all these crypto advocates come in and they use all these terms of art that most people have no clue what they mean. They were basically starting to convince the city council that, oh, what’s the harm in supporting local business? You know, that’s how it’s being framed. These are just local business people in Austin, so let’s support them. We produced an educational guide that kind of showed the risks, the history of Bitcoin, that the fluctuations, how it’s basically a scheme to transfer wealth from late adopters to early adopters. We started lobbying individually, with council members and council offices.

 Then as it progressed, we realized that even though we were kind of raising these flags and bringing up this history, that the council was going to move forward. In particular, the mayor of Austin, who I consider a friend of mine, and another council member, did this big press conference right before South by Southwest launched that they were going to introduce these two resolutions. And that’s when we kind of mobilized even more, we’re like, oh, no, this is about to go through, with almost no debate. 

Together, we wrote an op-ed, in the local paper, The Austin Chronicle, which got a lot of circulation. That created this opportunity where multiple council offices were willing to work with us to say, okay, hold on, let’s put a brake on this pro-crypto stuff. Then that’s when we introduced the concept of public banking and complementary currencies. I guess this is kind of giving away the end game, but ultimately, we’re able to get these resolutions amended. So now technically, even though they passed something that was ostensibly, pro-Web 3.0, they also passed a resolution that’s pro-public banking.

William Saas: Could you say more about– either Mike or Mike– about the particulars of that proposal? That sort of “wolf in sheep’s clothing” of something for small businesses that’s actually about the transfer of wealth from late adopters to early adopters? We particularly understand that y’all were troubled by and I think we share that concern, the potential tax receivable ability of this Austin coin. Could you talk about the particulars of the proposal and your critique of it in that op ed and other forums?

Mike Siegel: Well, I’ll start Mike, and then pass it to you to fill in. The most extreme version was going to allow city workers…  the city of Austin employs 13,000 people, right? It’s not just cops. It’s a whole class of the city is employed by the city. So people were gonna be able to receive their salaries and crypto, people were gonna be able to have their retirement get transferred to crypto, people were gonna be able to pay their water bills and their electric bills in crypto. It was basically like fully using this as a quote unquote, “currency” were some of the proposals that were out there. I’ll never forget, while Mike and I were working on these issues, going to my barber– I go to a black barber in kind of far North Austin– And I’m like, I’ve got all these kinds of blockchain questions on my mind. 

And in the barber shop, I’m hearing one of the barbers talk about how his son has $15,000 invested in crypto. Like basically instead of a college fund, this working class family has put $15,000 in the crypto. What the guy said was like, we can’t touch it until he gets to college. So not only are they invested in it, but they can’t get out even if things go wrong. To me, it just seemed like hucksterism. That these extremely wealthy donor types had convinced the mayor and these other politicians, oh, there’s no harm in lending the city’s name to it. This is all… this is all good. And there was no discussion of the drawbacks. Basically, this op-ed we put together… I forgot how many words… 600 words or something, but basically just introduced the real high points of how risky this investment is and how disastrous the Miami coin has been. But yeah, Mike, how would you flush out what we were going through?

Mike Lewis: Sure. We saw how the whole purpose of the resolutions were to A) get support for cryptocurrency, generally speaking, and all of the tax perceivability especially on the most extreme end. And then also kind of using the mysteriousness or possible, magically innovative potential of blockchain technology in a separate resolution as being kind of two separate things. We kind of saw that there were some folks on council who said, I’m skeptical of crypto, but I’m interested to see what all types of use cases there are at the municipal level for blockchain technology. The crypto industry is very interested in getting that narrative out there  because they want to be able to say that there’s a whole lot of use cases for this distributed append only ledger and whatnot. 

I guess there’s a lot of problems with tha though, from a privacy standpoint that folks who’ve had on Money on the Left, like Rohan, I’ve written about. There’s also just the aspect that it’s a predatory financial scheme and that there’s folks that are pushing massive returns when they’re basically left holding the bag. The whole system is riding on this whole stable coin industry that’s kind of a ticking time bomb in terms of… its basically shadow banking or 19th century “Wildcat Banking”… kind of all the reasons we have modern banking and finance regulations is what the crypto industry is kind of speed running through the last couple of years. So, I think that at the local level there was organizations like CityCoins that were trying to push their agenda to get Austin to adopt a CityCoin. Basically, how this scheme works is a Peter Thiel acolyte-run organization. Basically, the idea is they allow… once the city announces that they’re willing to allow a CityCoin to be created, they allow the mining to start. 

Miners mine the cryptocurrency with their computers using a bunch of computing power. Then people gain those tokens and then you can sell them or buy them on… there’s one exchange for just for CityCoins, for MiamiCoin, in this one use case. What’s interesting about that is the mayor of Miami was pressed on the fact that this one exchange, Okcoin, he was pressed by a reporter from CoinDesk, that they were advertising 430% returns on investment annually. This is a token is now down like 98%. The idea is the mining reward… 70% goes to the miners, 30% goes into a wallet that basically belongs to the city and they’re just the beneficiary of it. So, it’s basically kind of a bribe, if you will, to the city to kind of put the cities and perimeter on this speculative token that doesn’t have any use cases for payment system, for banking the unbanked, all the different narratives that they put out there. It’s just a speculative coin and it’s lost a lot of people a lot of money.

Maxximilian Seijo: You’ve both narrated some of the aspects of the problems with these resolutions, and obviously as well touched on the sort of rapid advance the crypto industry is making towards politics. Before we move to some more general questions though, I want to ask specifically about the resolution amendments that you all lobbied and had introduced. Particularly maybe some of the language that describes some of the limits and problems of crypto that you’ve been outlining, as well as the language that legally enshrined support for public banking, complementary currencies, and public payments platform.

Mike Lewis: Sure, I can go ahead and read those. I’ve got our after action report pulled up. On the cryptocurrency resolution, the first one we got added into their awareness statement that basically pointed out that cryptocurrencies present notable consumer risks including volatility scams, lost encryption keys, the inability to reverse transactions, and privacy issues. And then we also got added to that, whereas existing and potential public payments, currency and banking technologies and infrastructures that exist for the city of Austin should be also considered for broader investment, creation of a digital wallet based payment platform that’s public, administered by the city as well as the creation of a local complementary currency issued and accepted by the city. Then on the blockchain and Web3 resolution, we got a whereas statement that pointed out that blockchain technologies have known power consumption challenges that should be researched to determine the environmental impact. 

Just pausing for a moment there, one of the whole reasons that the cryptocurrency industry professes that they can create this trustless environment for peer to peer transactions and things like that, is that we can trust in this line of code. But we can also trust in the fact that there is a sea of computers that are running calculations to guess at numbers. Basically, that’s what we can put our trust in versus people. It’s putting our trust in that kind of that waste of massive amounts of energy. Bitcoin alone wastes as much energy as the entire country of Argentina consumes, or the Netherlands. Then lastly, we got added into the resolution in the be it further resolved, supporting the creation and development of any financial innovations that could benefit Austinites and city governments, and applications that could include public payment platforms, public banks, or local complementary currencies.

Mike Siegel: And to just add a little color to that, the frame for our critique of what the crypto lobby was trying to do was equity. That was really resonant for the politicians and community groups. Who is this serving? To really clarify, for the office holders that this is serving the early adopters, the crypto proponents themselves. But you know, something Mike said earlier about Miami, really goes to the heart of why the crypto lobby was able to get as far as they did. It’s this bribe that they’re essentially offering. I mean, here in Texas, where a progressive city like Austin is operating in extremely challenging financial environment, where the state has basically constrained sources of income. We have no income tax in Texas. And beyond that, the city is constrained from even raising local taxes. 

But by state law, such that you actually have to have an election, if you want to increase taxes, or sorry, increased spending above a certain amount each year by, I think it’s 4%. We can’t even to keep up with the cost of living. We can’t even keep good staff working for the city, where they’re talking about lawyers or engineers, or all sorts of specialists. There really is this overall feeling of financial desperation. How do we fund the bare minimum? I mean, we have a housing crisis, but we can’t afford to pay for housing. We’re in a climate crisis, but we can’t afford to shut down the coal plant that powers the city. And so I think the promise of this crypto money is so tempting for the politicians. And that’s where Mike and I talked about… as we were doing it we tried to kind of perform a little bit of judo energy transfer, like, okay, the crypto lobby created all this energy and momentum. But can we somehow turn this moment and shift it towards complementary currency and public banking? I think we did like really establish a foothold here. Were multiple council members at the council meeting, when all this was decided, spoke in favor of public banking. And now we’ve introduced this concept to the city that presents an opportunity in the years to come. Oh, well, you know, we might be able to pay for that housing that we need, if we set up a public bank, we might be able to generate additional local income if we have a complementary currency and introduce these progressive financial technologies as an alternative to crypto.

William Saas: As a sort of, several years ago, as a recent transplant to Louisiana, we had a new governor replaced Bobby Jindal– John Bel Edwards, a Democratic governor. There was a lot of hope and excitement around that. And he came in saying, basically, that we’re going to move forward putting Louisiana first. I was pretty new to MMT and interested in public banking at the time, and wrote an op-ed in The Advocate, which is the Baton Rouge paper, basically advocating for public banking. The responses to that op-ed– they made it a letter to the editor– were shocking enough for me to just be like, I’m not gonna look at those again. Could you share a bit about… and there were some good ones and I actually made some good connections with folks as a result, but it was illuminating. Could you share a bit about the reception of y’all’s work and y’all’s op-ed? And I wonder if there’s any overlap between the constituency that is sort of is interested in weed wages and money or–

Mike Siegel: Workers, wages, and weed?

William Saas: Workers, wages, and weed and crypto. So what sort of conversations have you had? How are people receiving this work?

Mike Siegel: I think… Do you want me to go first, Mike, or do you want to go?

Mike Lewis: Yeah, all I was gonna say is we’ve basically kicked off a conversation and it’s picking up across a bunch of different kind of intersectional bases of the grassroots climate organizers, racial justice organizers, folks that combat predatory payday lenders and whatnot. There’s a whole lot of different sectors that should have a major interest in public money and what it can do and how it applies to what they’re trying to accomplish. Go ahead, Mike.

Mike Siegel: I think there was a lot of interest. The local DSA chapter, there was a lot of interest. An Austin interfaith that deals with workers with working class. Faith communities, they’re interested, Austin Justice Coalition. I think the challenge for the activists was like, this sounds good. But how do we do it? I think, overall, in Texas, I mean, shit, we’re recording this couple days after the horrible Uvalde shooting. I mean, they’ve banned abortion in the state. I mean, we are under such immense pressure on so many fronts, that a lot of the good organizers are completely maxed out. So, I think the reaction was from some of the key folks, that sounds great, but where do we come up with the resources, the leverage to actually make this real? Then the other concern is that basically, even if Austin does this, will the state of Texas just preempt it? 

There’s this long standing struggle with Democratic cities in Texas, especially in Austin, where you do something progressive, you lead the way– we pass a paid sick leave ordinance. We pass protections to ban the box for formerly incarcerated individuals. And then the state at the next session of the legislature passes a law that preempts or overrules what we’re doing locally. Some folks feel not only are am I overwhelmed and don’t have enough capacity to take on this project. But also, if we win, isn’t the state just going to overrule us one year later? I think part of where we’re at right now with this movement, is people understand the idea. And in particular, it’s the Bank of North Dakota, right, Mike, that is a great example? I think the two stories where we were able to tell really effectively is one, the Bank of North Dakota is an amazing example of a public bank, like you wouldn’t expect this amazing… you know, socialist, progressive institution to exist in North Dakota. But it does, it was extremely successful. 

During COVID, it was able to get more PPP loans for small businesses in North Dakota per capita than any other state. It’s a bank that’s actually fighting for the people. And so that example, teaching the story of the Bank of North Dakota, really got a lot of people excited, including some like, relatively conservative, Austin City Council members, they’re like, wow. And so like the record of the Austin City Council meeting, there’s a lot of discussion in the Bank of North Dakota. And then from the organizer point of view, we were pointing to the successful campaign in Philadelphia, to take major steps towards the public bank. I think where we’re at right now is, we’ve established this concept, it’s enshrined in city law. If we work on this as a movement, the city manager and city staff are obligated to help us under the resolution. Now we just need to get like another wave of momentum to push the project forward more.

Mike Lewis: Yeah, all it took in Philadelphia was one, really active city council member, Derek Green, activating the Black community in Philadelphia, especially around the fact that historically denied access to credit, and how this could help Black entrepreneurship, small businesses, but also people who are unbanked, underbanked, low income, as well. And then, just a handful of volunteers. I think the important other thing to point out about Philadelphia is,  they just passed last… or in March, 15 to 1 passing the creation of the Philadelphia Public Financial Authority. So that’s not quite a bank. They don’t have a charter yet. They’re on the way to, they’re the first city in the US that is on its way to a public bank charter. But there are things that can be won between no bank and bank. 

And I think that’s important to point out, just in the fact that, it’s not all or nothing. The PPFA is going to be able to establish letters of credit to help provide more loans to low income folks and folks who had been historically denied access to credit and other other financial services that it can offer. Just wanted to make sure to point that out. There’s a huge movement across the country for public banking. California. 10 different cities looking at it there. LA, San Francisco, New York– there’s a huge movement going there. But even like New Mexico, New Jersey, there’s other places like that too. 

And, of course, North Dakota. If you can point out the fact that… and one of the organizers on the Philadelphia campaign told me that they kind of appeal to that local pride by pointing out, like, hey, if these Republicans over in North Dakota, who are running this socialist institution… it was won by socialists between 1907 and 1919 and it’s been around for 100 years successfully running, it’s like, if they can do that, and has 7 billion assets under management we can too. So that’s definitely been kind of the rallying cry.

Maxximilian Seijo: Then, as you’ve both already said and started getting into, there’s latching into this movement nationally for public banking seems to be a part of these steps that you all are suggesting. And I guess I wanted to ask, in framing and linking together the political work that you’ve both been doing on public banking and complementary currencies, with the contextual environment of crypto finance and the recent crash. I guess I’m wondering if you all had particular thoughts about how public banking organizers such as yourselves, but also around the country, can take advantage of… I heard Judo mentioned? Take advantage of the context and some of the news coverage of this kind of the crypto crash, and as well as the real losses that people as you said, who are not always like high class investors who that are taking, in light of some of these particularly smaller– smaller than Bitcoin, at least, but not at all small coins collapsing.

Mike Lewis: I think that’s a huge moment for public education. Being able to help organizers, help policymakers, help the public generally better understand that there is an alternative from the horrible situation that we got into with the global financial crisis. And the response to that of crypto, which doesn’t appear to be any better, if not massively worse than what got us into the financial crisis. That there are better alternatives to that involving our public institutions, having better governance, having better accountability for the system that we rely on for transactions, for money, for our economy, for care, and for taking care of each other. I think that when it comes to just providing that alternative to kind of a private offering, with what we can have under public institutions that benefit everyone. 

That’s that’s kind of the moment we’re in I think, is is really around public education, and then getting folks to act on that, because they have to realize that, at the municipal level, the the revenue model, the taxpayer model… the idea that, you know, our cities are funded by taxpayers, the wealthy. Of course, we know this is a deeply racist, sexist, classist institution deeply embedded in American white supremacy. We know that that institution has led to the status quo that we’re at. It’s led to the status about the crisis of public education finance, like our local public schools. We know that setting that up with property taxes to pay for it was a product of systemic institutional racism, to drive segregation. We’re understanding the foundation that we’re on, how money relates to what we’re trying to accomplish, and then how public money is going to get us to where we want to go.

Mike Siegel: Yeah, just to add to that I agree. This is a huge opportunity this moment. Unfortunately, what’s missing as a movement is our capacity to do the organizing and do the outreach. I think the idea of a public bank really appeals to a lot of people’s ideas, especially Texans’ ideas of self determination and self sustainability. In Austin right now on our tax bills, for every $8 that were tax for school’s finance, $7 actually doesn’t go to our local schools, it goes to the state of Texas to use in all sorts of ways–good and bad. People here really do feel trapped. They’re looking for answers for how we can fund the schools we want, how we can fund green infrastructure, how we can fund housing. I think the moment is really here, because crypto has people thinking about money or… fake money, obviously. But so what’s the real alternative? I think my thing is, from an organizing point of view, we need infrastructure. Y’all have this wonderful show, Money on the Left, y’all are educating the people doing the Lord’s work, right? Extremely important. 

But how do we get a major national union for example to realize that public banking might be the way for their members to have better quality of lives? Better health care? How do we get national political groups to invest in public banking or national foundations to fund it? Because, unfortunately, we’re operating in this market economy, this capitalist context. This movement requires a lot of public education. It requires a lot of nuance in terms of how we communicate the message to the people, how do we build the coalition? Part of what I’m looking for, and maybe all the hosts of the show have some ideas, but, how do we make this more of a mainstream concept? I mean, think about Medicare for All. 

 When Bernie ran on Medicare for All, he educated a ton of people about it. But now you’ve got, you know, the National Nurses Union that spends millions of dollars every year organizing for Medicare for All, 15 an hour, the SEIU National Union has an entire program that’s been going for 10 years at this point, “Fight for 15”. How do we inspire folks to develop similar infrastructure for this essential tool, which is a public bank?

William Saas: You talked about capacity and infrastructure. And earlier you talked about, and I hadn’t really realized that there was a crypto lobby, but it makes absolute sense. You’ve got millionaires and billionaires investing in this speculative asset, of course they would hire some of the best lobbyists to look out for that asset and tt’s continued existence. So you got the crypto lobby on one hand and then you also have in terms of like state banking and state finance, you have the financial industry itself, which is, in Louisiana, I think that our state revenue goes into Chase Bank. If it still does, right? And is that the same for Texas? 

Mike Lewis: Austin banks with JP Morgan Chase.

William Saas: Okay yeah, they probably have a lock on the South, maybe even more. But they also have armies of lawyers and lobbyists that are arrayed against something like this. So the capacity and infrastructure argument is just tremendously important. I mean, daunting, right? I guess one of the things that I can think of an immediate example from this morning actually as we record this, a very qualified and unsatisfactory, and maybe it’s not a win, but the announcement, sort of, in a roundabout way that the Biden administration is thinking about canceling $10,000 in student debt. And this is not the first time we’ve heard this, but the work of the debt collective, which is pretty… they’re not a huge organization.

Right? They are a posse, they are lots and lots of people who are– myself included– who count themselves as like somebody who would be a member. I guess we can, I don’t have… you can pay dues and be an actual member of the Union now. But something along those lines, they’ve been very, very successful on a small… with a small team and infrastructure relative to what they’ve been up against, with the student loan industry and the medical loan financing industry to get student debt cancellation at front and center. Presidential politics and making it something that Biden cannot ignore and get away from… and is probably very annoyed by, but I mean, that would be an example. I don’t know how you would replicate that energy and effort. But I think it would maybe some inspiration there for a small team doing big things.

Mike Lewis: Yeah. Just to piggyback off that, like some other examples– Chicago’s bailout for the many that Rohan Grey worked on. Back to Philadelphia beginning of COVID, they passed a unanimous resolution calling on the Fed to create a facility for municipal loans at zero interest, you know, we got the Municipal Liquidity Facility, but the it was completely unusable. The rates, which were a total policy choice… could have put cities, you know, balance sheets and a lot better position. And that’s all a policy choice. Of course, we know. 

Maxximilian Seijo: Yeah. And it makes me think, too, that in the coming months and years as there’s more crypto volatility, which there no doubt will be. I think that’s the one thing that is we can say for certain, there’s gonna be a lot of people that have lost a lot of money in this space. And we’re promised like you mentioned with the MiamiCoin, we’re promised returns. We’re promised a certain kind of path to flourishing and amidst, you know, all the hardship that we see around the country in the world, it’s some level understandable when the culture is speaking those potentials. 

People are making money around you to want to get in on that. I do think that will present some opportunities for maybe bringing some people on board into the public money, space, and just politicizing money more so on these terms and you know, it’s not always a happy story, but same goes for after the financial crisis in 2008. That this was an impetus to politicize a lot of different aspects of financial malfeasance, and then bailouts as well, and the political capture. So, it’s not exactly hope, but it’s… there’s certainly paths that these sorts of things might go down where there will be potential to make some gains. 

Mike Lewis: I was gonna say, Hamilton Nolan wrote a piece in In These Times, it was about kind of after crypto’s crash, what happens. And in exploring the high potential that he sees and folks going even further right, more fascist and whatnot. I don’t think any of that’s inevitable or deterministic. Of course, we have… it’s kind of our job to make sure it doesn’t happen.

Maxximilian Seijo: Yeah, and then I think the last thing I’d also add too is this environmental component that you both brought up is really important, too. Because, particularly for these municipalities, who all variously have commitments to environmental sustainability. I know in California, for example, there are often municipalities that pass ordinances right to… moving towards environmental sustainability, and that’s in a state where we have a commitment to net zero carbon emissions, but on the table sometime in the future. Thinking about the ways that perversely crypto is kind of a perfect storm, to move against that sort of commitment or those sorts of values. Potentially that’s another angle that it seems like y’all are pursuing so I appreciate the work.

Mike Lewis: I was gonna say, Texas has 40% of Bitcoin mining. Of course, we all know that we have the best power grid here. And I’ll let Mike take it from here.

Mike Siegel: I think unfortunately if you look at future opportunities, if we’re analyzing the opportunity for this movement, we not only look at future crashes of crypto, but we also look at future failures of the Texas grid. We had the terrible freeze I guess about a year and a half ago at this point. And right now, our grid is not stable enough to survive the summer. We’re most likely going to have blackouts this summer, hopefully not long ones. But it’s extremely likely and the fact that crypto mining is such a huge load on the grid could be a potential turning point. 

Right now, there’s a governor’s race for Beto O’Rourke. I wouldn’t say he’s a longshot, but he definitely not the favorite to beat the Republican incumbent Greg Abbott. But when he launched his campaign, there were actually only two issues he was highlighting: fix the grid and legalize weed. And you gotta know, I loved it when I heard him talk about marijuana on the first day of his campaign, because this is one of these popular wedge issues that can change politics. But in the history of Texas politics, actually, grid failures and electrical failures have led to major restructurings in the state politics. There was a major series of breakdowns about 60 years ago at this point, that actually led to municipal electric utilities being formed. So, right now in Texas, it’s not the majority of cities. 

But, for example, Austin controls its own electric utility. San Antonio has a quasi-public electric utility. So you don’t want to root for a grid failure. But it’s possible that if we have 100 degrees in a row for 60 days in a row, as we often do in Texas, that there could be major failures that are then politicized through this governor’s race. That can create another opportunity to fight back against crypto, because what are they doing for the people of Texas other than taking away our electricity that’s life sustaining for so many others?

William Saas: I guess I’m not familiar with the Texas grid in the same way that y’all are but, I know that in Louisiana, very close to y’all, our own grid and our own sort of energy infrastructure, and then our sort of environmental situation are both precarious and made then more so by lack of public investment. And wondering, seeing I guess, as you’re talking about that, Mike and Mike, the opportunity for even more intimately interweaving the the grid and the public bank as public infrastructures that ought to be managed by public officials. Which is a tricky thing, I guess, probably in Texas and especially in Louisiana, where it’s like, okay, so we’re going to make these public things. And then we’re going to hand it over to the politicians? We got to make sure to develop these robust and durable democratic structures at the same time as we’re advocating for these things. 

So yeah, no shortage of work there. I wanted to maybe ask y’all to close by sharing any sort of major takeaways that you have from your experience here. Thinking about your… maybe your experience with developing your own arguments in the face of the sort of swarm of Web 3.0 crypto bros. Anything you learned from tangling with them that you might share with others who might be interested in fighting that swarm when it comes to their city next. Maybe what you might have learned from collaborating with or learning from organizers in Philadelphia, and any through lines you see, or possibilities for developing a more national movement as they’re emerging right now? 

Mike Lewis: Want me to go first, Mike?

Mike Siegel: Sure. 

Mike Lewis: Cool. Yeah. I think that my final thoughts, I definitely want to make sure to give a shout out to local complementary currencies, too, we didn’t get to chat too much about that. But the idea that below the federal level, cities, states, any level of government can use its role as an active legal agent in the community. It’s taxing power, fees, fines, the settlement of legal disputes, all sorts of different ways, you know, granting of landlord licenses and things like that. We have the ability to increase the capacity of liquidity fiscal capacity at the local level, with local complementary currencies. Then bravo to the UNI proposal doing that exact thing at the university level as well. 

Really just being able to use local complementary currencies, like, you know, it could be an AustinDollar, for instance, or something like that. It could be issued with a digital wallet or a digital payment card or something like that. And really being able to… you could directly spin that into the local economy with direct job creation. Tenino, Washington did that with Tenino-bucks printed on wooden dollars, which is how they did it during the Great Depression. The mayor there busted out this printing press from the local museum, and during the beginning of COVID, started creating local complementary currency in Tenino-bucks printed on these wooden wooden pieces… a piece of wood, excuse me, and helping with local stimulus and care at the local level. 

That’s something that we can do at the local level. I think that there’s a lot of different steps that are involved with getting that accepted, of course, but it is definitely something that could be used to increase the spending in public housing or increase the spending on local arts and local community care and things like that. So just want to make sure to give a shout out to local complementary currencies. I think that the big takeaway from all of this is that the crypto industry is very wisely and cleverly utilizing the spectacle of culture to advance their project. I think that we would be very wise to understand why Austin is covered in billboards that say crypto is a peaceful revolution, or I don’t know, they say all kinds of wacky things. But you know, the point… or why they’ve put their name on all kinds of sports arenas and things like that. 

So. it’s really important just to understand that in order to push back against that, we have to have a counter mobilization, that does include how we make an impact in culture to get our project in advance of public money, and public institutions for care.

Mike Siegel: Right on, Mike. Yeah, I mean, I think for me a couple reflections. One, it’s actually pretty daunting. As a layperson, that’s how I would consider myself, to get involved in organizing in the space, because there’s so much terminology. And even when I would… after we wrote the op-ed, and I would talk to family members and friends. And there’s all these assumptions that blockchain is good and it’s better to move away from fiat currency. I mean, there’s all these kinds of arguments in the ether, that are hard to refute. I’m here with Mike Lewis, my friend, and he is pretty expert on this. It takes a lot for him sometimes to explain to me the different rebuttals for some of the bullshit arguments out there. So I think, first of all, we have to acknowledge that these things are complicated and daunting. 

It’s hard for people to engage with these ideas. So unfortunately, a lot of people probably just turn off their brain and be like, oh, that crazy crypto stuff. It doesn’t have anything to do with me. We have to somehow improve our public education, our outreach. Let people know that it’s not as complicated as they think it is. And it’s actually a bad idea overall. But the second idea, and to me is more optimistic, is that I think public banking has huge potential. Because basically it’s a different worldview. It’s not a worldview of scarcity. It’s a worldview of abundance. Right? So much of what we’re being told is that we can’t afford it. We can’t pay for it. But public banking makes sense. Like, here we are in this ultra wealthy city in Austin, Texas. Why can’t we afford enough housing? Why can’t we afford environmental programs? And even Texas? Probably Texas is more wealthy than most of the nations in the world. Why can’t we afford a good grid? 

Why can’t we afford public education? And so to me, public banking as a demand just makes a ton of sense. Like, why should we be letting JP Morgan hold our money? Why can’t we hold our money? And we decide who gets loans, and we decide where the investments go. And so to me, there is this overarching argument that that public banking kind of fills a void. And if we can get more people to embrace the demand, I think that’s really exciting. And then the last note, I just want to raise the specter of Elon Musk, who has moved to Austin, unfortunately. Has relocated Tesla from California, because he has so many racial discrimination and sex discrimination lawsuits in California, that he wants to move his terrible business to a different state. 

Now, Elon Musk is sitting in my backyard, threatening to take over my city here. We need to fight back. I do think this is going to come down… I don’t know how much y’all talk about class war on this podcast, but I really do think this is coming. We have this guy, that’s Twitter billionaire, whatever he is, and he’s selling this crypto and playing with the DogeCoin. Because he knows he’ll make money if he can trick everybody to buy some. I think all of these issues could come together in a major movement, because Elon Musk is on the wrong side of environmental issues, whether it’s through his support of Bitcoin, or what he’s doing with SpaceX, down by the Mexico border in Texas ruining a rare local ecology for his ships. If somehow we can unite these struggles– the environmental movement, public banking, even public education, and how do we pay for it? I think there is a lot of potential. So that’s what keeps me animated and excited about this. Even though it’s a steep learning curve to understand the issues.

William Saas: Austin is getting weirder and weirder in all the wrong ways. 

Mike Siegel: That’s right. 

William Saas: Mike Lewis and Mike Siegal, thank you so much for joining us and sharing about your work. The good work that you’re doing in Austin with us on Money and the Left.

Mike Lewis: Thank you all so much for having us.

Mike Siegel: It was great to be with you, thank you.

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

Projections: May ’22 in Review

Catch up on the May 2022 episodes of Projections, a new series from the Money on the Left Editorial Collective hosted by Will Beaman (@agoingaccount). Projections offers short readings of current events that destabilize and contest mainstream conservative narratives on behalf of an inclusive progressive politics.

1. Up for Grabs
2. The Calls Are From Inside the House
3. Grab-bags & Constellations
4. Cops Don’t Care

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