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For over twenty years, India’s national rural jobs program provided a legal right to work for over 265 million people–the majority of them women–serving as a vital lifeline against poverty and a global model for social security. Tragically, however, that lifeline is now being cut.

In this episode, we speak with Khush Vachhrajani, writer and national coordinator at the Social Accountability Forum for Action and Research in India, about his recent article in The Wire, “How to Kill a Golden Goose: MGNREGA Repeal Reveals More than it Hides.” Vachhrajani contextualizes the sudden 2026 demise of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and its replacement by the new Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (VB-G RAM G). As he explains, this shift effectively “kills the golden goose” for millions of rural workers by replacing a demand-driven legal guarantee with arbitrary budget caps and centralized control. We discuss the neoliberal money politics behind this move: a calculated transition from a rights-based framework that empowered workers to a supply-led scheme that prioritizes fiscal austerity over human dignity.

Still, our dialog is not merely a post-mortem of a fallen policy. From the “Save MGNREGA” nationwide agitations to defiant resolutions passed in thousands of Gram Sabhas, the people of India are actively fighting to reclaim their right to work. This episode explores both the devastating effects of the repeal and the growing movement of workers, unions, and activists who refuse to let this Golden Goose go quietly, proving that the struggle for democratic accountability is far from over.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript forthcoming …

* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

In this episode, we speak with Tyler Creighton about the ongoing struggle to save the Consumer Financial Protection Bureau (CFPB) from defunding and closure at the hands of Russell Vought in the second Trump Administration. Creighton is a lawyer at the CFPB and a member of the National Treasury Employees Union (NTEU), Chapter 335. Before joining the CFPB, Creighton clerked for the Massachusetts Appeals Court and, prior to that, he was an organizer for pro-democracy reforms at Common Cause and ReThink Media. We talk with Creighton about life at the CFPB under the leadership of Vought, central architect of the notorious Project 2025 document and avowed opponent of the agency he now directs. 

During our conversation, Creighton details how, in spite of Vought’s attempts to defund and close the agency, the CFPB continues to survive. In Creighton’s telling, the agency’s endurance owes in no small part to the continuous labor actions undertaken by the NTEU and its members. In February 2025, for example, the union sued the Trump Administration, securing an injunction against Vought’s efforts to close the agency. (Read the judge’s extraordinary Memorandum Opinion here.) Then, in late December, a federal district court judge ruled that the Trump administration must continue to fund the CFPB through the Federal Reserve, contradicting Vought’s absurd claim that the CFPB can no longer seek financing from the Fed because the nation’s Central Bank is operating at a loss.

Despite the NTEU’s string of successes, the fate of the CFPB still remains to be determined. The good news, however, is that there are ways that you can support the bureau as it rounds into its second year of the second Trump Administration. Learn more about the fight to save the CFPB from the CFPB Union website. Follow and share news from the NTEU account on Bluesky. Join the union’s public demonstrations, if you live near or find yourself visiting Washington D.C. You can also help fund the NTEU’s activities by purchasing any number of cheeky items in their online merchandise shop. 

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Billy Saas

Tyler Creighton, welcome to Money on the Left.

Tyler Creighton

Thank you. Glad to be here.

Billy Saas

It is a pleasure to have you. We are looking to talk to you about a lot of things. You work principally now as a lawyer with the CFPB, the Consumer Financial Protection Bureau. Could you just maybe kick us off by telling us a little bit about what that’s like now in January of 2026?

Tyler Creighton

Yeah. The past year at the Consumer Financial Protection Bureau has been just a little bit different than my prior few years at the CFPB. I will say, I am an attorney at the CFPB. I’m here just talking in my own personal capacity. Nothing I say can be attributed to the bureau, representing my public sector union: the National Treasurer Employees Union.

But, yeah, it’s been an interesting year. I joined the bureau in 2022, so I’m actually a relatively new employee compared to a lot of other people that have been there since the start. When Trump got elected, it was a little unclear exactly what was going to happen to the CFPB.

It’s kind of been a little bit of a political lightning rod for its entire existence since 2011. But we didn’t really know what to expect. Oddly, we kind of flew under the radar for the first month. Our former director who had been appointed by President Biden, Rohit Chopra, stayed on until the end of January, and into the first week of February before he was finally fired by the president.

That’s when everything really changed. Trump appointed the architect of Project 2025, Russel Vought, as our acting director. Within days of him being appointed, he had closed down all of our office buildings and kicked everybody out and had sent an all staff email saying, “stop performing any work task, whatsoever.”

Everything just kind of came to a crashing halt and a lot has happened since then. They have been trying to close us down since that first week in February and, although they have really mucked around with the operations of the bureau – despite the best efforts – it is still standing.

I think this is largely in part due to a lot of dedicated workers at the bureau who have been organizing through our union and using litigation to keep the bureau alive as Congress intended.

Scott Ferguson

Can you tell us a little bit about just your own personal history? How did you come to the CFPB? You’re a lawyer. What’s your background? What’s your specialty? What do you do at the CFPB in particular?

Tyler Creighton

Yeah. So, I’m actually a relatively new lawyer. I graduated law school in 2021 and I clerked for a year on the Massachusetts appeals court, and then went directly from there to the CFPB in 2022. I work in our Office of Supervision. I’ve primarily focused on the mortgage market, although I’ve also done some work on student loans and auto loans.

I think a lot of people don’t really know what “supervision” means at the CFPB or “supervision” across other financial regulators. But, at the CFPB, in terms of compliance, we kind of have our enforcement division, which is, I think, what people generally think of when they think of regulators. These are the folks that are running investigations and suing bad actors when they find potential legal violations.

That’s all very public. These lawsuits will be on the public docket and you can read the complaint and you can see all the details. Supervision is very different. It is a confidential process. This is an authority that was granted to us by Congress and the Dodd-Frank act, which established the CFPB and gives us authority to conduct periodic examinations of certain financial companies that are under our authority.

What that means is we request a bunch of information and documents from an institution, and then we have teams of expert examiners who are looking at the information and making sure that policies and procedures of the companies and their functions are all complying with our various federal statutes and regulations. If we identify any problems, we try to resolve the issues in a collaborative process with the companies.

It all remains confidential. For the most part, everything is kind of resolved in that confidential space. It only kind of comes out later if companies are disagreeing with our assessments, or it seems like the conduct is particularly egregious or intentional in which case the issue might end up getting into the enforcement side and then leading to litigation.

I’ve been doing that work since 2022. Unfortunately, as public reports show, that work has more or less not existed since February of 2025. Just hoping that we can kind of get back to actually supervising the companies that Congress intended us to.

Billy Saas

And so that’s just a function of companies, I guess. What side is that lack of continued supervision activity most attributable to. Is that a function of the top down directives from Russ Vought, or is it companies not feeling like they need to participate any longer? Can you talk to us a little bit more about that?

Tyler Creighton

It is directly attributable to Russ Vought stop work order in February that, for all intents and purposes, really hasn’t fully disappeared or really been rescinded.

Scott Ferguson

So what determines what is actionable work versus what must be stopped?

Tyler Creighton

You know, we are civil servants. We don’t go off and sort of just do our own thing. We are directed by political leadership on what our priorities are and what the work is. We have not been authorized or directed to do the supervision work that we had previously been done.

Billy Saas

It’s similar on the enforcement side, I would presume as well.

Tyler Creighton

Yes. I’m not on the enforcement side, but yes, I think public reporting shows that there isn’t enforcement going on. Investigations are not continuing. And you’ve seen publicly that a lot of open litigation has either been dismissed or settled, including a number of open consent orders that companies and the CFPB had already reached and had not yet expired have been terminated prior to the expiration date in the consent order.

Scott Ferguson

We’ve started to talk about the division of labor and the division of the institution a bit. But I was wondering, to the best of your ability, I know you haven’t been there from the beginning, but can you give us a little more detailed sense of when the CFPB arises? Under what circumstances? The specific things it was tasked to do and what it has been doing ever since.

Tyler Creighton

Yeah. So, the sort of neat and tidy story of the CFPB’s founding is that it’s really a product of the subprime mortgage mortgage crisis that triggered the 2008 global financial crisis and then the Great Recession that followed, which, as many people remember, there was kind of rampant fraud in the mortgage markets.

There was a lot of predatory lending that led people to default on their mortgage and then massive foreclosure crisis. And in the wake of that, or really in the in the midst of it, Senator Elizabeth Warren, but then-law professor Elizabeth Warren, wrote a couple of journal articles in like 2007, 2008, that talked about or envisioned a new federal agency that would really be charged principally or entirely with regulating consumer financial products with the eyes of the consumer in mind or the benefits of the consumer in mind.

She kind of analogized, saying “we have agencies to stop unsafe toys and toasters. But we don’t really have that for financial products.” And so she envisioned this agency as kind of being analogous to some agencies that already existed. Those articles resulted in Congress passing the Dodd-Frank act in 2010, which is one of then President Obama and the newly elected Democratic majorities in Congress first major bills.

The idea there was to essentially consolidate a bunch of split and overlapping authorities that are then split across a bunch of agencies and consolidate that all into a single agency that could take a more holistic and dedicated approach with consumers that would be front and center. Then it also added some  new authorities as well.

At this point, I already talked about the enforcement and supervision aspects of the bureau. There’s also the consumer complaint database, which some listeners might have used before. I think there’s been like 5 million consumers who have filed a complaint since 2011 when that started. That’s been a tremendous tool to quickly resolve individual problems between consumers and companies where previously, maybe the company didn’t feel like they needed to do anything, but now there’s kind of this public record out there when consumers are complaining and they feel more compelled. Then, at the bureau, there’s also a lot of market research that folks are doing to identify potential risks and hazards and new products, new financial markets. Then there’s a lot of consumer education resources that the bureau puts out.

In my mind, some of the clearest, concise information on what you should be thinking about when you’re getting a mortgage. Like, here’s step one here, step two… I was working at the bureau at the time, I think it was right before I started working there and was buying my first home and was just like all over the website using the resources, which have been, I think, a huge help for people.

It’s not just mortgages, it’s auto loans, or if you have problems with credit reporting, just a ton of great information.

Scott Ferguson

Is that all still up?

Tyler Creighton

It is all still up. Yeah. I definitely was worried in the early days about a lot of that stuff going away in some way. 

Scott Ferguson

It’s not too woke.

Tyler Creighton

Yeah, it’s practical enough. We haven’t gotten into a lot of the litigation that has been going on, but there is an injunction that’s still in place that is preventing the kind of full shutdown and wrap up of the bureau.

I don’t know to what extent that injunction is planning on keeping up a lot of these existing resources that the bureau has put together over the years.

Scott Ferguson

Can you tell us a little bit more about how the consumer complaint database works? I mean, I’ve never used it, so I have no idea. Is it like a Yelp review? You can just like, have an account log on or is it a little more formal? Do you need a lawyer or something like that?

Tyler Creighton

I don’t know if it’s quite Yelp-review status, but it’s closer to that than like a formal thing where you need to write out a very legalese complaint. It’s very accessible. You can log in and you put the company that you have issue with, you write a narrative about what happened and on the public facing side, if you put in any personally identifiable information that will not appear on the public side of the consumer complaint database, but other people can see what you wrote about, even if they’re just like your neighbor or whatever. There is a rule in Dodd-Frank that the companies have to provide a response.

It doesn’t necessarily say it’s got to be a substantive response or it has to rectify or agree with the consumer. I mean, the consumer can be potentially wrong, but they have to provide a response. By and large, if the consumer has raised a legitimate issue, you look at the company response and the company will have provided some kind of remedy, whether it’s erasing a charge on the person’s credit card that shouldn’t have been there or fixing some inaccurate information on the consumer’s credit report or whatever it is.

Oftentimes the complaint, if it’s legitimate, will result in some kind of action that benefits the consumer. On the bureau side, all of those complaints are taken into account when you’re thinking about enforcement and supervision. Where’s the risk? Sort of like an early kind of warning system to the regulators of where there’s risk, where there’s problems, because obviously the consumers are on the front lines. They know where the issues are and so it’s a great resource for the CFPB to figure out where to dedicate finite resources.

Scott Ferguson

Obviously, the CFPB has a history of contestation around it. This is maybe the most life threatening, so to speak, battle that the institution has faced thus far. It’s not like the first Trump administration was very happy about this institution either. So I was curious if you have a sense of the history of largely Republican challenges before this particular present moment.

I know from doing a little bit of research that there was a court case that had to do with how the director was appointed and the reasons that the director could be removed. So any of this that you can speak to, to just contextualize what’s going on now.

00;17;36;10 – 00;18;08;14

Tyler Creighton

Yeah. There’s a lot of history there. You know, it’s no secret that most politicians on the right and Wall Street banks have not been the biggest fan of the CFPB, and have tried various ways to reform it or get rid of it in whole. There have been two very high profile Supreme Court cases challenging aspects of the CFPB structure.

The first one, which you mentioned, was about the ability of the president to fire at will the director of the agency. If folks been following any of the legal cases going on in the current era, this will be very familiar to people, because we have Supreme Court cases about this very issue with regard to the FTC commissioners (Federal Trade Commission) and also potentially down the road, the Federal Reserve, and the ability of the independence of the fed and whether or not the president can can get rid of fed chairs.

So anyway, back in, I think it was in 2019, there was a challenge to the provision of Dodd-Frank, which said that the director could only be removed for cause. That was challenged. And the Supreme Court struck down that provision. Since that time, the director has been essentially removable at will by the president.

Since that happened, the presidents have used that power. So, when Joe Biden came in 2021, he used it to get rid of the existing director who had been appointed by Trump during his first term. Then when Trump came in in 2025, he used it to get rid of Chopra, Biden’s director.

The kind of more existential case was in 2024. That one challenged the constitutionality of the CFPB funding structure, or funding mechanism. We are a little bit distinct, not entirely unique, but different from a lot of other federal agencies and that we are not part of the Congress’s annual appropriations process. So, you know, all this talk of government shutdown last year, and currently they are trying to get the funding bills together so we don’t go into another shutdown at the end of January here, but the CFPB is actually not part of that. We have a dedicated funding mechanism. Where the director is required to request money from the Federal Reserve who gets money from interest payments and fees, paid by their member banks.

Our directors are required to request money from the fed to carry out our functions. Congress has tapped the total amount of money that we can request, but that funding is just always there. It doesn’t require Congress to pass a new bill each year saying like, this is how much money is available for the CFPB.

The constitutionality of that mechanism was challenged by an industry trade group. Ultimately they lost pretty bigly, in terms of our president, and I forget the exact breakdown, but it was like 7-2 or 8-1 in terms of the breakdown of the Supreme Court justices. They were not able to convince many of the justices, including some that are very far on the right and sympathetic to these types of arguments, that the mechanism was unconstitutional.

We survived that. Then, obviously, more recently we’ve come under the attack of just trying to shut down the whole place by pure legal fiat. Congress hasn’t repealed the agency or anything, but we’re just going to try to shut it down because we want to.

Billy Saas

Well, thanks for that. It brings us nice and up to date. There’s more that we can say about those current court cases. And I want to talk about the union’s efforts, and advancing those cases, and defending the CFPB from those attacks. I want to step back just a little bit.

We mentioned the complaints division or the complaints process that consumers previously had available through the CFPB. In addition to the enforcement supervision, for the complaints, I understand that those would sort of become the grounds for action. Is that correct? Like, on behalf of enforcement or from the CFPB, there could be efforts taken to address those complaints.

Tyler Creighton

Yeah. I mean, so obviously we have finite resources over a rollover of these massive markets with hundreds of hundreds of players, and we have to take in whatever information we can to help focus where we’re going to use those resources. So complaints are one of many different data streams, whether it’s enforcement or people in supervision, that we are using to help identify which companies we should be looking at, which practices we should be looking at.

Sometimes what you get with the complaints is maybe that individual consumer’s complaint was rectified. So they were charged an illegal late fee on their mortgage and the company said, “Okay, great. Yes, we did that. Sorry. We will credit your account,” but they don’t really say anything about if this affects other people or is this a one-off thing?

Was it a systemic problem? You don’t necessarily get that information. The other divisions can kind of use, “oh, there’s this one consumer, maybe there was a couple,” and it sort of indicates, okay, maybe this is more a systemic problem that requires additional looking into and ensuring that it wasn’t just this one consumer who got their issue rectified, but actually all of the impacted consumers got the issue rectified.

Billy Saas

Yeah. So in any case, it’s a line of communication between everyday citizens, consumers, and the government. That’s a highly valuable thing. I wonder if you could say something about where we’re at now with the stop work order and, it is my understanding that the closest equivalent to the complaint line is like individual state attorneys general, right?

If there are bad actors in the financial sector, and maybe you can tell me if there are others, the most charitable reading of the perspective on the argument for closing the CFPB would be like, “there are already enforcement mechanisms in place at the state level.” What exists and maybe help us see through that argument.

Tyler Creighton

Yeah. The consumer complaint database is a very, very powerful tool. I highly recommend that consumers continue to use it even in this time, because I think companies are continuing to respond to it despite the CFPB’s kind of beleaguered status at the moment.

In terms of other regulators out there, if the CFPB’s current trajectory continues and it is not operating at anything close to what it was doing in 2024 and before that, the states will step in to a certain degree. But the attorney general’s offices are already overtaxed on other things.

They also are only responsible for the actions and the residents of their own state. So, you know, if the AG of Massachusetts brings a case because they’ve noticed that some mortgage lender is selling predatory loans, that’s not necessarily going to help the person that is in Mississippi that is also getting predatory loans from the same provider.

It creates this real patchwork where, depending on where you live in the country, you’re going to be given more or less protection from these companies. The bureau has this kind of national outlook and has a lot more resources in terms of lawyers, but we also have economists and people that are familiar with the market and data technologists and all these other people that a lot of state regulators don’t really have. It really helps to identify these new products that are complicated. It’s not necessarily obvious how they work or how they might be harming consumers. I think that’s been really important to have at the CFPB. There’s been a lot of innovation in financial services. And then also, a lot of these states have just come to rely on the CFPB expertise and that they’re going to be there.

So, yeah, again, they’ll adapt, but I think, in the end, consumers will be the ones paying the price.

Billy Saas

If the CFPB continues down the way it’s going, they’re probably not going to rechannel that direct fed funding to the individual states attorney generals.

Tyler Creighton

No. Yeah. Probably not, probably not.

Billy Saas

And so those resources go away and I think it would increase the burden on those states individually, who are, under the current regime, limited to tax revenue and local politics. 

Tyler Creighton

This just reminds me of how kind of nonsensical getting rid of the CFPB is. You know, it all started when Elon Musk’s DOGE (Department of Government Efficiency) folks came in trying to eliminate fraud and waste, or purportedly trying to eliminate fraud and waste. The truth is that, at the CFPB, prior to the current administration, we had returned something like $21 billion or more to consumers through our efforts.

If you break that down in terms of how much money is going back to consumers versus how much money is going to pay for the CFPB’s operating cost, it’s like almost a $3 return on investment for every dollar that goes to the bureau is going to result in nearly $3 going back out to consumers, because we’ve identified some illegal practice and gotten refunds.

So, there’s obviously bloat in the government, and probably some bloat at the CFPB, but like, by and large, the consumers and Americans are benefiting greatly from the relatively small amount of money that was going to the Bureau to keep it running.

Scott Ferguson

So I’m chomping at the bit to hear the story of the DOGE occupation of this. But before we do, I guess I wanted to ask one more preliminary question. I have not studied this document closely, maybe I should have, but Project 2025, which is Vought’s little brainchild. As far as I’m aware, it includes language about what the intention of this administration was when it came to the CFPB. Were people in the agency reading Project 2025 and sort of like, I don’t know, bracing themselves for this or strategizing or not really.

Tyler Creighton

I don’t remember that so much. I mean, there were probably some conversations here or there of people who had taken a peek. I mean, honestly, I don’t. I don’t know if you have looked at it recently, but it’s pretty sparse on the CFPB. There’s not a lot of meat on the bones there. I mean, it kind of gestured that, “Oh, yeah, we should just get rid of this whole thing,” but then it ultimately has like a few bullets that are much less than that. It seems fixated on a completely fabricated idea. I honestly don’t even know where they got this idea from. The civil penalties fund, which is the fund that the bureau operates when we do enforcement litigation and the companies have to pay some kind of penalty to us, and then that gets redistributed back out to consumers.

They have this completely fabricated idea that the penalty fund was just the slush fund for like liberal advocacy groups. That’s like the main thing that it’s focused on in the Project 2025 document. Honestly, I just don’t even know where that comes from. It sounded like there was a minimal amount of consumer education that’s been funded through the penalty fund, absolutely tiny compared to the amount of overall money.

Maybe that went to some groups that are involved in that consumer education. But like to say that it’s just this slush fund for liberal groups and that’s the reason why we got to get rid of the whole thing, it just struck me as really grasping at straws there. 

I don’t think we talked about it too much, but there was a lot of waiting. Elon and company have been talking about taking the chainsaw to the government, and it was unclear what was going to happen because a lot of people at the bureau have been there since close to the start.

They went through Trump one. They thought, incorrectly – now we’ve all learned – that it wouldn’t be something similar to Trump one in that, things changed, things slowed down a little bit, but after some initial kind of bumpy-ness that happens with any change over administration, from what I’ve understood, I wasn’t there so I can’t speak to it from personal experience, but like they were doing similar work to what they had been doing before. Priorities changed a little bit. Maybe they weren’t using some legal theories that they had been using before. But, you know, they were doing good work. I think people kind of thought that something similar would happen, and were obviously proven wrong by that.

But, I think in those first couple of months after the election, while we waited to see what was going to happen, that I think that was sort of the optimistic take.

Scott Ferguson

So walk us through this early timeline of Musk and DOGE first. Is that prior to Vought?

Tyler Creighton

It’s concurrent, really. You’ll have to forgive me a little bit because at this point, it’s been almost a year and a lot of this was like moving quickly. I wasn’t personally one of the people who was in the building when this was all kind of going down. Musk and his folks have been infiltrating other agencies in the lead up to us.

So we had kind of already seen the USAID (United States Agency for International Development) playbook: go in there, take control of all of the computer and data systems and then just start quickly closing up shop.

The exact tick tock of this was, I think it was January 31st or February 1st, Cobra gets fired. Initially, Trump appoints Scott Bessent, the Treasury secretary, as acting director. But on the president’s first day, he sends a message to all staff with six bullet points or something like that, of the work that should stop including enforcement, oddly not supervision.

So we continued to do that.

Scott Ferguson

Is that because he didn’t know about it?

Tyler Creighton

That’s my speculation. But I don’t know for sure. So we continued and then, by the end of that first week of February, the first DOGE people started accessing the building, which is right across the street from the White House in DC. Then Trump appointed Vought right at the end of the week.

He sent out an email saying, “you can’t come into the building anymore,” and then on that following Monday sent an email saying much more explicit things, expanding on the six bulleted things that Bessent said we weren’t allowed to do and just said, “don’t perform any work whatsoever.” Then it was really in that first week under Vought when things were moving very, very quickly, we had been kicked out the building and told not to work.

The union actually organized a very quick action at the building, like that, I think even before it was officially closed. So folks were picketing out front and then Vought used that picketing as the pretext for closing the building, saying that, “my employees feel unsafe coming to the building because a bunch of folks are chanting and holding signs…”

Scott Ferguson

Who are also employees.

Tyler Creighton

Who are also employees, yeah, exactly. In that preceding week – this all kind of later comes out in litigation, we were not totally privy to it at the time – but basically there starts being leaks to members of the union that folks in H.R. are racing to fire everybody, to just completely axe the place in the same way that they did with USAID. Running just exactly the same playbook.

So as that information is trickling out through union members and colleagues, we are getting legal counsel through our national union to figure out what to do about that. They file a lawsuit very, very quickly in that first week and are able to get a temporary restraining order by that Friday immediately following Vought’s appointment and it later comes out when we are arguing for a preliminary injunction. A temporary restraining order is very temporary and so we’re filing for a preliminary injunction, which would hopefully stop firings, stop the shutdown going while the litigation that our union had filed precedes. While we are gathering evidence, while our attorneys are gathering evidence for that preliminary injunction, we get all of the details about what was happening in that first week. I encourage people, if you have a minute to go look at the district court’s opinion when the chief finally granted the pulmonary injunction, that’s just like documenting all of the emails and the meetings and everything that’s happening. They are just absolutely racing to fire 1700 people. It’s up until like the moment on late Friday, there are attorneys in court with the DOJ trying to argue for this temporary restraining order. H.R. is getting emails that there’s this court proceeding happening right now, and they’re like, “no, just get it done. Get the firings out the door, like we need to get them done before the court acts.” It’s like Friday afternoon. They’re trying to race to get them out. The court just got it under the wire to get the temporary restraining order in place before everybody at the agency was fired.

Scott Ferguson

Can I ask a potentially sensitive question which you may not be able to answer, but are the HR folks, they’re people in the agency who do HR? So they’re just sort of following instructions in doing all this?

Tyler Creighton

Yeah. So I mean, DOGE was a small-ish operation. They needed actual people who had expertise and some experience actually working in government and know how things work to effectuate what they wanted to do. So in the government, we have these things called reductions in force, which are effectively like mass layoffs when an agency director wants to change priorities or Congress has cut funding again. None of that happened here.

But like, they were trying to use these reduction in forces to get rid of everybody. They’re using the H.R. people within the CFPB to get that done. You can look at the litigation. A number of people filed anonymous declarations and actually then testified in court about what was going on in these meetings that they were being brought into about, where they were just trying to quickly fire everybody before the court was able to get the restraining order done.

And actually, I forgot an important detail with some of my fellow employees who were actually fired during that first week, because it was horrendous and more uncertain for them. But, yeah, there were successful firings of about 200 of our term and probationary employees in that week of February, while they were racing to get rid of the rest of us.

Fortunately, those folks were reinstated through our litigation. But it was obviously unexpected from them and there was one employee who has a big profile in the Atlantic. She was in her doctor’s office getting a cancer diagnosis when she was illegally fired, or when she received an email saying, “you’re fired.”

It’s not the worst part about it, but just kind of an insult to injury, with these notices, because they were trying to get them out so quickly, they failed the mail merges. It just said, “dear [first name, last name],” instead of like “dear, ‘the actual person’s name,’ you’ve been terminated because your skills and needs are no longer relevant to the work that we do.”

So, yeah, it was a horrendous week, but fortunately, we are still here a year later because a lot of people moved quickly to get into court and stop this.

Scott Ferguson

So what’s been going on this year after the first week?

Tyler Creighton

Yeah, it’s hard to think back on it all. In those first few weeks and months, it was very frenetic and really all-hands-on-deck with people really stepping up to make these declarations to the court where they’re essentially being whistleblowers to talk about what was going on on the inside with these firings.

The union is organizing weekly pickets out in front of our building. We had a number of court dates where we’re organizing events out in front of the court. Everyone was very fired up and working together to kind of support the litigation that was going on inside the courtroom. We weren’t the attorneys involved in it, but the rest of us were outside, telling the public the story about what was going on and why this was important.

I think that slowed down a little bit as the litigation dragged on, but we’re continuing to organize and get our message out about why the bureau is important and why we should be able to get back to work and also about workers rights. These are good working class, well-paid jobs and there’s something to be said about how we’re in the middle of an affordability crisis, and they’re trying to get rid of these jobs that are very secure for people who are in the middle class.

So we’re continuing to fight on against the immediate shutdown. One thing that Congress was successful in doing last year was actually lowering our funding cap. They cut the max funding that we can get almost in half. So we’ve been continuing to work with our legislative partners to hopefully get that reversed and get the cap back up.

Then we’re pounding the drum to get Vought impeached, which is another priority for us as a union.

Scott Ferguson

I have another question. How has the press been in your experience and the collective experience of the union? Does the press ask the right questions? Does it tell the right stories? Does it care enough? Does it focus on what’s going on enough? I’m just kind of curious to hear you talk about your experience precisely with publicity and, like, the politics of publicity around this crisis.

Tyler Creighton

I think publicity around these kinds of major rule of law, democracy stories can be tough for the press, but by and large, I think they have covered this past year of the bureau well. There obviously is the day to day of what’s going on in the litigation. But there’s also been a number of great pieces about what this means more broadly to consumers.

A lot of good consumer snapshots of people who had been helped in the past by the bureau and the fact that if we ceased to exist, that person who was facing foreclosure and was able to grab this lifeline to keep them and keep their family in their house, that won’t be there anymore.

There’s been a lot of good reporting on that front. There’s a lot going on in the Trump administration right now, it’s hard to keep anything focused. Where does the CFPB rank in the list of the many, many other things that are happening right now?

Is it the most important thing? People have disagreements about that. I think I’ve generally been impressed with the coverage. I think one difficulty is like, how do you tell the next part of the story?

It’s like, there’s only so many times you can say, “oh, here’s this consumer who was helped by the bureau, and that help won’t exist anymore,” right? Only so many people can write that story. So what’s the next page in the story as we continue. We’re coming up on the year anniversary of this whole saga.

That’s nothing unique to this particular fight. It’s true for any kind of advocacy policy fight that you’re going to have. Before I became a lawyer, I did communications advocacy for issues around campaign finance and voting rights and we had the same kind of issues on those topics as well.

Billy Saas

Journalists love a news peg. Perhaps the year anniversary will generate some additional impetus for coverage here.

Tyler Creighton

I totally agree with you. It’s something I’ve been thinking about because this conversation’s a good impetus for it. It’s been almost a year since Elon Musk tweeted “R.I.P. CFPB,” a year ago and we’re still here. That can’t necessarily be said for some other agencies that got targeted.

What’s the difference? I think the existence of our union and the organizing around that has actually been pretty key to that. There’s been some allusions in some of the reporting to that effect, but I think it’s a little bit of an untold story that the organizing of the workers themselves has been pretty critical to preserving this agency that Congress created. It might not exist if the union hadn’t been as organized and kind of jumped on the issue as quickly as it did.

Scott Ferguson

Something you told us before we started recording was that Vought is this kind of spectral presence who never shows up. You said you’ve never seen this man, who is your boss. Has anybody seen him at the agency? Presumably Musk actually showed up into the building to occupy it, and people saw him, but, has anybody had direct communication with Vought?

Tyler Creighton

Not sure. Yeah, I have not. Initially we were 1700 people. We’ve lost a lot of people. But like, you know, with organizations of that size, you’re going to get email communications talking about organization priorities and what we’re doing and have broad staff meetings to kind of keep everybody on the same page. That has not been a thing that is happening at the Bureau.

So, yeah, he is the director, but, I can’t say I’ve had any direction from him.

Scott Ferguson

So there’s been more recent litigation and litigation that has gone in the agency’s favor. Back to this funding question, maybe you can tell us about the arguments made on both sides and how this has all played out.

Tyler Creighton

Yeah. It’s funny when you said, “in the agency’s favor,” it actually technically went against the agency, if you think about the agency and who currently runs it. But, yeah, it went in favor of keeping the agency alive and protecting consumers down the road. We secured a preliminary injunction back in March against firings, against contract cancellations, against closing up shop essentially, or to kind of generalize. But, while that injunction has been in place, Russ Vought has not requested any additional funding from the Federal Reserve since he took over. The agency happened to have quite a large balance when he took over, so that wasn’t a problem for a while.

Scott Ferguson

Does that tend to be a regular periodic request, or is it just sort of as needed, whenever?

Tyler Creighton

It’s a little slightly out of my expertise on this, but I think it’s generally been quarterly. I’d have to look back at the statute on whether or not it actually needs to be quarterly or it can kind of be as needed. I think, in effect, it kind of acts as needed.

Prior directors have planned out the year and have a sense of how much money it’s going to be required and then make quarterly withdrawals for that money. But anyway, Vought hadn’t requested any money, so while this injunction against firings existed, we were quickly dwindling our reserves. It was getting to the point where he was saying that the agency wasn’t going to have any more money at some point in early 2026.

The position he was taking was this, novel and fairly ludicrous legal argument that Congress created this dedicated funding for the CFPB by allowing it to withdraw money from the Federal Reserve’s revenue. But, the language that that Congress used was the Federal Reserve’s, quote unquote, combined earnings. To date, that has been understood as the Federal Reserve revenue. So any money that it earns. He took the position that, “Oh, no, actually combined earnings is referring to profits,” which is a weird construction for a government agency that isn’t a for-profit enterprise that’s trying to make profits. But, you know, putting that aside, he took the position that it is the feds operating revenue minus their expenses.

Since sometime in 2022, if you do that calculation, it’s actually a negative. So it’s been losing money, if we were to analogize it to a for-profit institution, which it’s not. So he said, “I’m not permitted to request additional money because Congress hasn’t provided any set aside.”

Why would Congress have said, “okay, we’re going to have this dedicated funding mechanism, but it only works if the fed has profits.” But if it doesn’t, then this agency just disappears for that time. You know, it doesn’t make a lot of sense. But, our lawyers went in and filed a motion to clarify that this novel interpretation, that had not been used before, wouldn’t let the agency off the hook for complying with the preliminary injunction against firing staff, against canceling contracts, against shutting down the agency.

In late December, the district court agreed and said, “yeah, this interpretation of the statute of combined earnings makes no sense. You, Vought, have manufactured this funding crisis, and I am not going to allow this thing that you’ve manufactured totally on your own accord to take you out of the injunction that is still in place.”

Essentially, they are setting up this scenario where you could either request money and comply with the injunction or you could continue to drive the CFPB into bankruptcy and therefore be out of compliance with the conjunction and face the consequences of that. Just last week, Vought  ended up saying, “Okay, although we disagree with your opinion, federal judge, we will request the money.”

So he requested enough money for, according to the letter to the court, for this quarter, which I guess will go until March. So that’s where we’re at now. Concurrently, the preliminary injunction that started this whole thing is under appeal to the full D.C. Circuit Court of Appeals, which will hear arguments in that case in late February.

Billy Saas

We have seen a lot of things over the last year, but administration officials complying with judicial orders is not top among those. Do you have any sense for why Vought  would have proceeded or honored this? I don’t know. Do you have any ideas why?

Tyler Creighton

I don’t really, I haven’t really seen any theories put out there. He obviously didn’t do it happily. He made it very clear that he wouldn’t have done this, if he was able to act on his own accord.

Billy Saas

Well, I’ll say kudos to Russ Vought in this one instance. Compliance. Do more. He could do more.

Tyler Creighton

Yeah. Doing the bare minimum.

Billy Saas

I wanted to maybe return to the point that you mentioned, you’re here as a member of the union. The CFPB is not even 20 years old, but the union that y’all are a part of now, chapter 335, has been around for at least 100 years.

It’s associated with the Treasury. Could you talk just a bit about the union and maybe, by way of wrapping up, give our listeners some sense of what we might or what they might be able to do, and to support the union’s efforts.

Tyler Creighton

Yeah. I won’t be able to speak to the 100 year history of the union.

Billy Saas

Understandable. Yeah.

Tyler Creighton

A bit beyond my knowledge, but we’re a local chapter, 335, of the National Treasurer Employees Union, which represents employees at a number of different agencies across the federal government. As I was saying before, I came to the bureau in 2022. So, I don’t have personal experience with the union’s early days, but as I understand, it was formed towards the end of 2012.

So a little over a year into the existence of the bureau and the history between 2012 and 2020, I don’t get the sense that there was like a ton of agitation going on. You know, it was helpful for workers, but has really kind of transformed, I think once Covid was like dramatically changing workplace norms for the federal government, but also for workers in every sector of the economy.

There were a lot of open questions like, “what are the expectations around work from home?” Making sure that people had correct set-ups at their home offices as they had to quarantine and such. I think there’s just been a lot of good organizing and build-up since then. So there was a lot of work being done. 

This is kind of the tail end of when I’m coming in. So again, I’m speaking primarily from reports from other people, not my own personal experience on this, but, after Covid, as with all companies, it was like, “so what are the rules around working going to be as we kind of get back to a quasi-normal life?”

There was a lot of union organizing around the contract around remote and work from home policies and all that. I think that was a stepping stone to a bigger internal fight around pay and pay equity at the CFPB, which I think one reason why our union has such good strength is that we actually can negotiate on pay and benefits, which is, as I understand, not something that is universal across other federal agencies where their pay is set by the GS (General Schedule) scale and Congress. Our pay is not. It says something to the effect of, “we will be paid in comparable levels to people at the Federal Reserve,” which also has its own payment structure. Despite that language, our pay scale had not changed since the founding of the bureau. Meanwhile, the Fed’s pay scale kept going up.

There was this increasing disparity between the workers at the Fed and the workers at the CFPB, even though the statute said that we should be paid at a comparable level. There was a very big campaign spurred by the union that was very galvanizing for people around rectifying that issue.

Updating the pay scale to bring us closer in line. We didn’t get as far as we were intending, but closer in line to what the pay scale at the fed is, and also to help decrease disparities among similarly situated employees at the CFPB, where there were just these kind of arbitrary pay differences between people who had very similar experiences or had very similar responsibilities.

It was coming out of that that I think just set the union up very well. There were structures in place like good leadership and trust among workers that, when all of this most recent mess started in 2025, we kind of had some communications infrastructure in place to quickly gather intel about what the heck is going on at the CFPB and get in touch with appropriate outside counsel, get them the intel that all the workers are providing and then also get out into the streets and have mechanisms for getting information back out to the workers. Those kinds of early internal organizing efforts, I think, really set us up, even though the current fight is so radically different. There’s also been a lot of bumps in the road as we’ve tried to turn a union infrastructure that was mostly focused on applying pressure to our internal leaders who had their own interests, but at least were listening and receptive and we could sit at the same table with them, to, now, really focusing outwardly because our current leadership doesn’t care about the work life is like. I’ve been trying to get other people outside of the bureau to understand what’s going on and why this fight is important.

But I think it’s been pretty impressive. And I don’t think there’s any doubt in my mind that if the union didn’t exist in the way that it did in February 2025, that we wouldn’t be having this conversation about what the future of the CFPB is going to be. The future remains very uncertain, but it’s still here.

Every day that it continues, it increases the odds that it will continue to exist in the future. I give a lot of props and kudos to the leadership of our chapter to really inspire people. We had pretty good membership going into this.

Just in terms of the percentage of workers who are in the bargaining unit who actually pay membership dues and are considered members of the union, but it just went through the roof, like everybody joined. We’ve opened the merch shop. That’s a very, very long winded response to your question, but in terms of one way that you could support and get involved is we have a merch shop which has some great sweatshirts, hats, shirts, that I see all the time on people that are not from the CFPB. All that money goes to support the union in various ways. In the past, we had used it as resources for employees who had been fired and then don’t have income and were facing other kinds of hardships. So, that’s definitely one way to support the group.

As I mentioned earlier, we are advocating in Congress to increase our funding, cut back to where it was prior to the big beautiful bill, which decreased it. And then I think, most importantly, we got to get Russ Vought out. You know, he’s been terrible at the CFPB and he’s been terrible across the whole government as the head of OMB (Office of Management and Budget). So, you know, we’re continuing to beat the drum for impeaching him.

Scott Ferguson

What would be the legal grounds for impeaching him?

Tyler Creighton

The legal grounds? Well, remind me what the Constitution says about…I should know this as the attorney on the call, but he did the bare minimum by requesting funds back in January. But, you know, for the past year, he’s just been blowing through every legal safeguard around, like, around how you treat workers and firing them and withholding money that had been appropriated by Congress. I think there’s plenty of grounds to say that he’s been derelict in his duties.

Scott Ferguson

For sure. You know, I think one of the biggest revelations for me that’s come out of this conversation is, I became aware of the union and appreciating the work of the union, but not really knowing the extent of it. I don’t think I had a strong sense, and I certainly didn’t know anything about the history of the union, but I didn’t have a sense of the way that union organizing and infrastructure and activity has been constitutive for the survival of this agency.

That’s really inspiring to hear. Maybe sometimes we hear these stories like, “well, you know, one judge made a decision and it’s either good or bad or some crisis happened and people responded,” but I really appreciate this backstory too. It’s really great to hear that y’all were organizing around actually different issues, right?

Like, you were building capacity for a crisis that you didn’t even know was coming, but because you had built this capacity and taken on at least two major problems, when this major, major crisis hit, you were ready. That’s just such an inspiring story and lesson.

Tyler Creighton

Yeah. Yeah. I couldn’t agree more. At the same time, I shouldn’t forget to say that obviously other people have been involved in this outside of the union, which has been very integral. The legal counsel that NTAU (National Treasury Employee Union) retained for this case has been just like some of the best attorneys work I’ve seen.

So, you know, yes, the union’s been very integral in getting the information and doing the outside organizing and getting the message out. But inside the courtroom, our attorneys have been absolutely great. There’s been a number of other advocacy groups, whether it’s the Student Borrower Protection Center or NCLC (National Consumer Law Center) or Public Citizen who have also been involved in the litigation in various ways and then also activating their own members and doing public education around the bureau as well.

So we are not, by any means, the only folks that have been important in this fight. But, I do think it has been a very integral piece of the story and as you’re saying, kind of hidden, I think, in terms of the role that the union has played.

Billy Saas

We’re going to be sure to include a link to the union page and then also to the union merch shop. And speaking of that, I brought up a window here, and I’m going to do something I don’t think we’ve done in any show so far, but your merch is so great that I want to share it and talk about it. This Skully 335 hoodie. Yeah. Tremendous. No artist is credited, but listeners, I would encourage you to go check it out. I’m pretty sure I’m going to get one here as soon as the calls are over. But you have it.

We have some pretty provocative imagery. Can you talk to us about this, to have any context for us? 

Tyler Creighton

I’m, unfortunately, the wrong person to answer this question, because I really was not involved in it, in any way. But the folks that were. Yeah, I don’t know where they came up with the art and who did it. We honestly should make that public on the site, but yeah, it’s not what you’re going to expect from the union merch stuff.

You’re talking about the Skully hoodie, and I don’t know if it’s this specific one, I think there’s a couple of different versions, but my father-in-law has one. He lives in a town up in rural Maine and there’s weekly actions on the bridge over the water in Maine where people gather to protest whatever insanity Trump is up to that week. He’s just wearing his skully sweater out on the bridge with all of the other folks in Maine. So, yeah, there’s a lot of great stuff in there. There may have been more and some of it has been dropped over the times, but there’s also all just a lot of like inside joke type stuff that, if you were following the litigation closely at the time when we were getting all of these revelations about what was going on behind the scenes in these emails and such, there’s a lot of, good content around that as well.

Scott Ferguson

So, I saw a “Fed Up” shirt. Is that actually connected to the organization “Fed Up”, or is that just a slogan that you all came up with on your own?

Tyler Creighton

Again, I don’t know. I’m the wrong person to answer that question. My assumption is that it’s a very common slogan that if you were to be in DC with all the other federal workers, you would see that as a common sign. My guess is that we have just done it because of that. But, there might be more of a backstory to it.

Scott Ferguson

Yeah. Then something else again, we can keep this in or not, but like, I actually think it would be cool to include some of this merch in the art in our episode graphics, you know?

Billy Saas

Yeah. So in that case, we would definitely want to know who the artist is and see if they are down to share for the cover art’s collage work. But, anyway, we are having too much of a blast looking at all this stuff. It’s really great merch.

Tyler Creighton

Yeah, it’s too bad we didn’t do this before Christmas. It’s a great holiday gift. I know a lot of people that were giving it for holiday gifts.

Billy Saas

Yeah, well, there’s all sorts of great occasions. And, you know, you just want to support unions all year round, right?

Tyler Creighton

Exactly, exactly. So yeah. And it says here 100% of the proceeds go to the CFPB Solidarity Fund, which has, as I said, in the past, been used to help workers who’ve been illegally terminated and are facing various financial hardships because of that.

Billy Saas

Well, I just found the Skully 335 bomber jacket, and I’m just even more excited. This is a super, super high note to end on. Tyler, is there anything else you wanted to say before we say goodbye?

Tyler Creighton

No, I don’t think so. We covered a lot of ground today. I hope I didn’t ramble on too much and go into too many rabbit holes, but I appreciate it. I appreciate the time and the focus we could put on the union’s efforts and on keeping the CFPB alive. You know, Congress created the agency before for very specific reasons.

We went through a huge mortgage crisis. A lot of people lost their homes and it’s been doing great work since then, and there’s really no reason to get rid of it. So, we’ve kept it alive for the last year, but obviously we need people outside of the union to help us. So encourage you to get involved in whatever way that is, whether that’s buying some merch or calling Congress and telling them to make sure they don’t let Vought win and kill the agency.

Billy Saas

Excellent. Thank you so much, Tyler Creighton, for joining us on Money on the Left.

Tyler Creighton

Thank you.

* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

We are joined by David I. Backer, associate professor of education policy at Seton Hall University, to discuss his new book: As Public as Possible: Radical Finance for America’s Schools (The New Press, 2025). The right-wing attack on education has cut deep. In response, millions of Americans have rallied to defend their cherished public schools. Backer’s incisive book asks whether choosing between our embattled status quo and the stingy privatized vision of the right is the only path forward. In As Public as Possible, Backer argues for going on the offensive by radically expanding the very notion of the “public” in our public schools.

Helping us to imagine a more just and equitable future, As Public as Possible proposes a specific set of financial policies aimed at providing a high-quality and truly public education for all Americans, regardless of wealth and race. He shows how we can decouple school funding from property tax revenue, evening out inequalities across districts by distributing resources according to need. He argues for direct federal grants instead of the predations of municipal debt markets. And he offers eye-opening examples spanning the past and present, from the former Yugoslavia to contemporary Philadelphia, which hastens us to envision a radically different way of financing the education of all children.

Backer’s book is thus a must-read for anyone interested in building a robust and democratic public education system today and in the future.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

David Backer, welcome to Money on the Left.

David Backer

Hi there. Thanks so much for having me. I guess I’m a longtime listener, first time caller.

Scott Ferguson

We are so overjoyed to have you. So we’ve invited you onto the podcast, finally, after many years, to talk about your forthcoming exciting new book, As Public as Possible: Radical Finance for America’s Public Schools that is set to be published December 2nd. Do I have that correct?

David Backer

That’s right.

Scott Ferguson

Cool. We want to dive into this book, but per usual we’d like to invite you to introduce yourself to our listeners a little bit. Talk a little bit about your intellectual, academic background and work and what brought you to this book. I think we’d also love to hear something about your history as an activist and an organizer in educational spaces and potentially beyond. So, the floor is yours.

David Backer

Thank you. Well, thank you again for having me. Again,  I’m a fan of the pod, and I’ve learned a lot from it and a lot from you, Scott, in particular over the years, so it’s great to be with you and with your listeners. About me, I started studying philosophy in undergrad. I guess I’ll start there. I was really into the philosophy of mathematics, logic, that kind of stuff. I don’t know what it was.  I was a terrible math student growing up. I guess I hated math and not only that, one of the reasons I hated math was because if you weren’t good at math, you weren’t smart. I wanted to be smart. Everyone wants to be smart, right? I was made to feel like I wasn’t because I wasn’t so good at math. I hated tests. I hate practical jokes and it really felt like one big practical joke. Like, what’s the answer, you know? So, I really hated it and I hated all the emphasis that my parents put on it growing up.

Scott Ferguson

Were they big math people? Did they work in mathematical professions? My father was an accountant, by the way. Big math and incredible penmanship.

David Backer

Yeah. My grandfather was actually an accountant and my whole family’s from South Brooklyn and, I found out recently, worked in the Empire State Building in the 40s and 50s, but he was actually the nicest in terms of all this stuff. He was the most understanding of all of it somehow. My parents, I don’t know. They had sort of reformed Jewish middle class types of anxieties about having a successful son and being good at math is just such a badge of success that there was a lot of pressure. I don’t know what it was, but I got that from teachers. You get that from everywhere too. 

So by the time I got to college, I took a logic class for a language requirement and the professor said I was really good at it. She ended up being my advisor and I ended up taking a course with her over and over again where she just created her own sort of graduate seminar in lieu of a graduate program in philosophy of math and logic. I also studied continental philosophy and I had a real hatred of the continental analytic divide. I really didn’t like it. I didn’t understand it. We had a little group as undergraduates and we tried to name ourselves. We were in Washington DC, so we called it the Washington Circle. We tried to really do it up, you know. We called ourselves the “New Positivists” because we were positive about all philosophy. We’d get together and have these reading groups, people would give papers on Heidegger and the empty set, or things in philosophy of law. I just really hated how some of these professors on both sides, frankly, were so dismissive of the other when I felt that there were tools on each side that were really great. After that I found I really had a flavor for teaching. I also thought philosophy was great to do with young people and so I was a part of the Philosophy for Children movement.

Scott Ferguson

You were? Get out! Oh my goodness. For years I was intrigued by that. I never joined it, but oh my goodness. We’ll have to talk in more depth about this later. But anyway, go ahead. Go ahead.

David Backer

I think it’s all relevant because I really thought these ideas were liberatory, and I felt like thinking this way could have helped me as a younger person before I got to college both personally and intellectually. We had a high school philosophy seminar where we set up relationships with schools and we had students in the philosophy department go out to the schools and lead discussions about whether or not you’re awake and stuff like that. I got really into teaching and I had a background in the youth movements and the Reformed Jewish movement and I’d gotten a taste for facilitating discussions and learning in a very horizontal way. I really like being in the classroom. My grandmothers were both teachers and so after I graduated, I became a high school teacher. 

I was at a Catholic school in Washington, D. C. for two years and I really loved it. After that, I got a job in Quito, Ecuador, teaching at the American International School there. In South America I really “got” left politics. I didn’t really have a left analysis until I moved to Ecuador in 2008. I’ve been relatively lucky. Speaking of activism, I’ve been thinking about this, and maybe this would be an appropriate place to recount my own background in this way. I have been lucky world-historically. That is to say, when I went to college in Washington DC, I went in 2002. Then, in 2003, there were the marches against the war in Iraq. I moved to Ecuador after that and that was Rafael Correa’s first term. Technically it was a second term, but they passed a new constitution that gave rights to nature and everything. It was really far out. I moved there right during that vote in 2008. So, I was in Quito for a while. I taught high school there. I read Paulo Ferrari for the first time and that really opened my eyes to the space of the classroom in the wider social structure and what I was up to in this sort of neocolonial project. The longtime Ecuadorian teachers at the school getting paid half what I was getting paid as a twenty-something from the States. I was trying to make sense of all this. 

I read Capital for the first time with David Harvey’s videos along with a friend of mine who was an anarchist but also working for the UN as a speechwriter. It also happened at that time in Quito, Dan Denvir and Thea Riafrancos were there. It was cool. I felt I kept wanting to read more and study more and I thought I was gonna be a high school teacher the rest of my life, but I’d been rejected from philosophy graduate programs in my previous attempts to apply to them. I just thought, “well, is there anyone that does philosophy and education? I really like teaching and I like education, but I really like philosophy. Like, can I do both?” There’s a program at Teachers College Columbia. One of maybe two or three in the country. I’ll apply and if they say yes, cool. If not, I’m just gonna teach high school in New York City and figure it out from there. 

They let me in and then I started doing my doctorate from there. But in a continuation of world-historical luckiness, I moved back to New York City in 2010 and then Occupy Wall Street happened in 2011. I became very involved in Occupy Wall Street and the education working groups. I was mostly in Occupy University, but a lot of my closest friends were in the Occupy Student Debt campaign, which then became Strike Debt!, which then became the Debt Collective, which is one of the more powerful, successful kinds of movement groups we’ve seen in the last couple of decades. I was really, really into Occupy. I mean, hours and hours and hours. I never slept at the park because I had a bed in the apartment, but I was there when it got evicted but we kept going. The thing I was most active in was a thing we called the horizontal pedagogy workshop. We held it in Trump Tower, in the private public space of Trump Tower in 20011 and 2012. We met for a full year. We’d meet every Thursday for a couple hours and we came up with a set of protocols that we thought were good like learning and studying methods that were consistent with the Occupy movement. We were there in Trump Tower because we thought Trump represented everything that was wrong with the country. 

Billy Saas

For a little color, where in Trump Tower? Like the lobby? 

David Backer

In New York City, and this was very important to the Occupy movement, there were things called privately owned public space (POPS). Privately owned public spaces are designated by regulation that says if you’re gonna have a big building that you have to have a certain space, like an atrium or a sitting area, that the public can go and sit. I don’t know if it still is part of the building codes. I’m not as familiar with the building codes, but that was the Occupy Wall Street movement’s strategy for occupation, to use this kind of quirk of the building regulations to find these spaces and then just go and never leave. We didn’t occupy it properly because we would leave, but we would come back every week. There was an atrium at 57th and 7th Street in Trump Tower that was privately owned public space. We would just sit in there and do our thing. There were privately owned public spaces all over the city. The Occupy movement had maps where they could direct you to POPS and they encouraged people to go to those different spaces to get the embers of the occupation flowing in other places. 

Scott Ferguson

Did you get harassed? 

David Backer

We were never harassed. We made friends with the kind of cop or the security guard who was on beat. He thought we were just a bunch of weirdos.  No one ever gave us too many problems. I mean, we were sitting there in a circle talking. It was a bunch of nerdy anarchist types. We came up with a set of protocols. There were a bunch of us from different places that were coming at this from different angles; a psychoanalytic angle, Latin American particularly, philosophy for children, a Brazilian angle from my friend, Jason Wozniak, poetry and interpretation angle. We just sort of brought our interest in teaching, studying, and learning. We kind of thought, “well, how can we do this for the movement?” We opened it up to the movement. We said, “if you want to come and study anything or whatever, just come.” We were basically doing the same thing every week. Someone chooses a text, one time the text was the atrium itself, so we just wandered around the building.

Scott Ferguson

Nice. Like Fred Jameson. 

David Backer

Yeah, yeah. Our protocols were very simple. You check in, you say how you’re feeling, and then you write a question for discussion about whatever the text is. Or you examine a text, whatever the text is, then you write a question for discussion. Then we made a list of all the questions. We read the questions out and then we see what happens. We just did that over and over again for different texts and it was transformative for me. I made so many networks, it was my first organizing experience, and I had the first energies of a young person in a movement in a country that hadn’t had a big movement moment like that in a long time. And I still use those protocols today. I still teach with that kind of thinking in mind. This is a really long answer. But you said I could speak at length, right? 

Scott Ferguson

No, I love it. It’s great. This is perfect.

David Backer

The next way in which I was world-historically lucky was, I got my first job after I’d defended my dissertation, which was on the ideology of discussion facilitation. I had used that horizontal pedagogy experience as one case of a series of cases. I did a sort of Marxist psychoanalytic workup on classroom discussion. I got my first gig after defending in Cleveland, Ohio. And it just so happened I was living just a few blocks away from where Tamir Rice was murdered. The Black Lives Matter movement that was emerging at that time in 2014 and 2015, Cleveland was a node of that. They actually had their national conference that next year at my university, Cleveland State University. Now, the way that Black Lives Matter worked, at least in Cleveland, is you really organize with affinity groups, and at that time you call them ally or accomplice groups. There were a bunch of interesting Catholic worker types who were there in Cleveland and I was teaching courses in social foundations of education and also doing teacher-student teacher field evaluations. I would go to the schools and I would observe someone who was learning to become a teacher as they were working with a mentor. I would be the faculty contact. I would meet with the mentor, I’d meet with the student, I’d make sure that they met all of their certification requirements, but also I got to get into these schools and see what the Cleveland schools were like and what Cleveland was like. There was one thing I wanted to mention too, there was this project where I met up with some anarchists. At that time. I was coming out of Occupy, but Occupy, by 2014, had been metastasized into different things. I found some kin who were former Bread and Puppet alums. 

They had bought a house for nothing in this neighborhood of Cleveland called Buckeye. They were calling it an urban homesteading  organizing project where they would go to this house, they’d work on it, but they’d connect with their neighbors. They were white, right? But this neighborhood is like an all black, working class type of place. Buckeye did not appear on city maps. It was literally a disappeared-neighborhood in the city. In my last semester at Cleveland State I was like, “oh, this would be a great thing to do with a class.” So I had a class and I made the class project mapping Buckeye and the educational reality of Buckeye. At first, I was like “everyone has to,” but then the pushback was so immense that I had made it optional. I wanted people to go to the house and meet me at the house and have just a discussion in the house and go to the neighborhood. 

I was thinking of the Black Lives Matter movement while doing this because I had mostly white middle class Clevelanders training to be teachers training to be elementary school teachers. There were young white conservative type women, and I was asking them to go to this sort of township/apartheid area of their city. I literally had a mother of one of these students meet with me and say that this assignment was endangering her health as a mother. She had had brain surgery and she thought that she was so worried about this that she was gonna have a relapse. I had another parent who followed his daughter in a car behind her car when we went to this neighborhood. There were parents who were worried about their students being trafficked by the neighbors, you know just wild stuff. 

Scott Ferguson

They lived in the city?

David Backer

They lived in the city. They were training to be teachers in Cleveland.

Scott Ferguson

Because you hear about this, the people who live in rural small town areas or exurbs where they’re paranoid of the city, but people who live in the city are afraid of having brain disease relapses.

David Backer

The parents live outside the city and the kids are going to Cleveland State. The kids are living in the city because they’re going to Cleveland State or maybe they’re living with their parents and commuting. It’s in and out. There’s cities and then there are cities, right? There are places in every city where you say, “well, we don’t go there.” I haven’t written about that, but I really would love to someday. I was in Cleveland for a while and then I got lucky again because in 2016, while I was in Cleveland and in the dead of winter, I was watching the presidential primaries, and I heard that Bernie Sanders was gonna run. I had read a piece about Bernie Sanders in the New York Times magazine in 2006, and I was impressed with him then.  I remember the kicker to the piece was about how he was concerned with teeth. I don’t know why I remember that, but this was a senator who was concerned with teeth. I was like, “well that sounds cool.”

Kshama Sawant had run and won in Seattle, and it was feeling like a turn. In Occupy, we were not concerned with electoral politics. We were concerned with prefigurative politics. We didn’t want a truck with the state apparatus at all.  We were gonna make the world we wanted and then see what happened. I always remember the story from Denver. I don’t even know if this is legend or if it actually happened, but the occupation there got a request from the mayor’s office to negotiate demands from the occupation. Apparently the occupation agreed to the negotiation but sent a dog as their lead negotiator. That was our attitude. But when Kshama Sawant won I was like, “Oh, that’s cool. Maybe we should get elected too. Like why not?” I feel like that would probably be important.” 

Then Bernie Sanders started running and that was cool, and then Trump was running and that was terrifying and then by the time 2016 came around, we moved to Philadelphia for my first tenure track job. The reason why I feel kind of world-historically lucky to be in Philadelphia in 2016 was that Philadelphia had one of the biggest and most active Democratic Socialists of America chapters. It had about a hundred people, and at that time the DSA was probably about like a thousand members or something. I’m looking for a movement, looking for a place to get involved because, at this point, starting in Occupy, I really wanted my research and academic work to be with the movement, to help the movement, to be part of the movement. It wasn’t going to be about the movement and it wasn’t gonna be from the side, it was gonna be in it. I was gonna try to help if I could.  I was like, “well, this seems like an interesting organization.” Cornell West is on the board and I don’t know, I guess I’m a socialist. I don’t know. But I felt like electoral stuff was cool. They were endorsing Bernie Sanders and they were out on all these strike lines. Verizon went out on a big strike that summer. 

I joined and that was in the spring of 2016 and I actually went to a Brooklyn DSA meeting. We spent a summer back in New York City on our way from Cleveland to Philly and I went to a Brooklyn DSA meeting that was twenty people in a basement of a school. Now I think it’s thousands and thousands of people, right? We’ve just elected a mayor so just thinking about that experience is sort of amazing. But being in Philly and DSA, I had a period of several years of intense factional socialist work. It was oppositional factionalist work, which was unpleasant and I thought it was important, but I caused problems. There were a group of us who were causing problems and we were fighting over what we thought socialism should be and a lot of the lines of that were race class lines. Philly is just a really interesting place to be doing organizing. I did a ton of work there, that brings us up to today. 

When I got to Philadelphia, I wanted to be with the movement and I got a job at Westchester University doing policy and law and education. I was like, “what policy law thing would be great to apply my framework?” At that point I was completing my second big project after the discussion project, which was a rereading of Althusser’s educational theory, which I thought had been severely misinterpreted in the tradition of critical education, and maybe more widely in cultural studies. I was like, “well, it would be fun to apply that framework to what I don’t understand. What do the movements seem to be focused on in Philadelphia?” 

In Philadelphia, they were focused on the school buildings. The school buildings were toxic. There was a teacher who had been diagnosed with mesothelioma, a longtime elementary school teacher, and they attributed it to the untreated asbestos in the school building. The working educators, which at that time were a left caucus of the teachers union, had made toxic schools a campaign priority in their organizing. A lot of the demands were like, how do you get money for the school buildings? We need money for these school buildings. How do you get that money? I thought to myself, “I have no idea. I have no idea how that works and I’m a professor of education. I should understand.” So I started teaching about school finance around 2017 and studying it more closely and then I encountered the bond market for the first time. 

Scott Ferguson

I’m sorry. 

David Backer

Yeah, I know. It’s when you meet the reaper, right?  The last thing I’ll say, and this brings us to when we met, Scott, was in Philadelphia during the pandemic shutdowns in 2020. I would say the most recent very radicalizing moment for me was understanding the possibilities of the municipal liquidity facility and reading more and more about MMT. I had been reading Naked Capitalism and Nathan Tankus since Occupy, really. They were critical of Occupy in various ways, but it was important, because that’s where I got my news. I had been reading about MMT and the blogosphere and all that, but suddenly now to have an interest in school finance, to be focused on the project of school buildings, and the school building financing tied up in this municipal bond market and then have the municipal liquidity facility burst into existence like that  was quite a moment for me. 

I made connections to you and Robert Hockett and Nathan and we started a campaign with our little organizing group, which at that point had actually broken off from the DSA. The campaign was to push the Philadelphia Fed president to advocate for  school districts to be eligible for the municipal liquidity facility to issue low-cost long-term loans directly out of the Fed, backed by the Treasury. We had a call and he got flooded with emails and he took a meeting with us. We didn’t advance because, in 2020, Pat Toomey killed the MLF and salted the earth to some degree. That sort of brings us up to today. I started a newsletter. I’ve gathered all of these experiences in my life, education, philosophy of mathematics, Marxism and now I’m training them on school finance and trying to make it more movement oriented.

Billy Saas

Maybe we can pull back. It seems like from your own personal experience in your long term study, in this book you provide a framework or a sort of diagnosis of how financing for public schools works currently. So can you give us a picture or a sketch of the mess as it is by way of getting us into your very helpful and exciting proposals to fix it.

David Backer

I’ll just add one other thing to my answer, which is that now I moved back to New York City in 2023 and who gets elected mayor? Hey hey! So I’m very lucky.

Billy Saas

You had a rabbit’s foot in that back pocket or something.

David Backer

No, seriously, I was like, “oh, we’re moving back to New York.” I don’t know what’s gonna happen now and look at that. I mean, I’ve got to be able to do it. 

Scott Ferguson

Have you ever inverted the causality? Maybe you’re the causal force. I’d like to invite you to move to my city, if possible. 

Billy Saas

New Orleans, next.

David Backer

This is the justification for a book tour, I suppose.  So, school finance and how it works. It’s not irrelevant to that Mamdani thing because I’ve been in touch with the campaign. I’m sort of peripheral to the campaign, I wouldn’t say that I’m working with it, but because I was involved with it early on on the ed policy side, if the DSA is running a candidate, I just get involved. If people want help with school funding, I just I’m like, “yeah sure, whatever. You want me to write something, I’ll have ideas.” I did that with Nikil Saval’s campaign too, when he was first elected in Pennsylvania. Okay, but you asked about how school finance works and what we should do about it.

Billy Saas

We’re looking for as public as possible. Currently it is not very public. Is that right? 

David Backer

Well, it depends who you ask and what “public” means.

Billy Saas

I’m asking you from New Orleans, the belly of the neoliberal education beast where we have CEOs as principals and whatnot.

David Backer

That district got fully charter-ized by Paul Vallas in the wake of the terrible hurricane.

Billy Saas

Mm-hmm.

David Backer

It’s the only district that’s fully charter-ized. Philadelphia’s the next biggest with a third charter-ized, and guess who was leading Philadelphia schools, Paul Vallis, before he went to New Orleans. School finance and the image that I use in this Baffler piece, which was inspired by reading Scott’s book and teaching it over the summer, school finance is in a straitjacket. The threads of this straitjacket, the belts and the buckles and the sleeves of this thing are made of a a hard-to-comprehend-in-it’s-totality set of government regulations and revenue streams through taxation, borrowing and repayment. In between studying philosophy and mathematics, I think about infinity sometimes. Between every two numbers, there’s an infinity of numbers. It’s like between any two governments, there’s an infinity of governments. Governments, particularly socialists, who over the last ten years have been interested in electoral power, since Socialist Alternative and Kshama Sawant sort of led the way on that.  These governments are essential to understand, but no one understands them in a comprehensive way. You have technocrats at every given level who will understand their little position and their little thing, but not the whole of the thing,

Scott Ferguson

And who’s criticizing it, right? 

David Backer

Who’s critiquing it? If you wanted to think about it dialectically, which I do, you actually have to know where the forces are arrayed and where the pressure points are.  But to do that, you have to understand the thing. Honestly, I’ve met very few people who, number one: understand it comprehensively like that from the school board seat, let’s call it. Or even the teacher union and the school board’s subcommittees, right? In the school boards you have finance committees who review budgets for school districts who will recommend cuts when austerity comes in. Who’s on that subcommittee? I’m just gonna try to zoom out. I’ll paint a portrait here, and start from there. So the subcommittee recommends a series of cuts to a school board, most likely at a meeting attended by the superintendent, who the school board picks. Now, sometimes the school district itself can levy taxes and issue bonds, but sometimes not. Sometimes the school district is just the department of local government, or of the municipal government.  The budget and its borrowing and its expenditure and revenue are limited by its relationship to that government. But sometimes that government is a town, sometimes it’s a county. Sometimes there’s a consolidation. So sometimes there are consolidated school districts that are then subject to different municipal regulations. Sometimes there are regions. There are regional authorities. There are even, in Pennsylvania, intermediate units. But I just learned today at a meeting of organizers in Iowa that there are regional bodies called AEAs, educational associations that are conglomerations of school districts trying to coordinate resources, particularly for special education. We haven’t even gotten to the state level yet. All those things occur within the state government. 

But in the state government you have the Department of Education and its sort of state decisions, its state constitution, its state courts, its state legislature with the state assemblymen and the state senators who all oversee this. Not to mention sometimes there are county courts and municipal courts that become very important in school finance. These state governments also have school finance programs, state grants programs, and then sometimes they have capital programs where they provide aid, sometimes they don’t. The state governments can issue bonds. Now, there are sometimes authorities that issue the bonds for school districts. Sometimes the authorities issue them for individual schools, in the case of charter schools, and sometimes there are borrowing authorities that issue bonds across state lines. There are three states in this country that issue bonds across state lines primarily for charter school and private school capital financing financing. One of them happens to be in Arizona. I was made aware of this recently and it just blew my mind. It turns out this one, I think I want to say it’s La Paz County, but maybe not. There’s a place in Arizona that has a borrowing authority where the municipality gets most of its revenue for issuing bonds for charter schools primarily in Texas, private prisons in Oklahoma and Texas, and surveillance technology. That’s how they finance their capital expenditure.

Scott Ferguson

How does it get routed there? Is it like they offer a certain kind of premium? How do they attract this?

David Backer

Low borrowing costs, and a lot of times these places, if they have technical expertise in a very specific form of public financing like for instance charter school financing, they just become known as a shop that can do that. A history of how that relationship started is definitely worth writing. There are these networks of borrowing authorities and at the state level you can have several borrowing authorities, economic development authorities. Sometimes the county has a borrowing authority. That’s how the school district finances its buildings. In New York it can happen that way a lot, but also in Pennsylvania. A lot of times states will have dormitory authorities for the higher education institutions, private and public, so you can actually get bond statements for Columbia University in New York by looking at the New York Dormitory Authority, which was actually formed in the wake of the 1975 fiscal crisis, which was basically just bonds. 

Nobody wanted to buy New York City’s bonds and no government bailed them out. No bank did either. Typically, at the local level, taxes on property are the ones that are levied. As an answer to your question, is this public? Tell me if you think this is public. School districts or their municipalities will levy a tax on property within the boundaries of that district. That’s how they fund the school upwards of, I think, 45% on average, but the average hides extreme inequity in the sense that you could have an area where the suburbs are wealthy, predominantly white, where 95% is funded through property taxes because their property is so high. Now, is it public education if a student who lives, let’s say, in the south west of Philadelphia, and their mother wants to send them to a school in Upper Darby, and she does that, and then she gets arrested for it. You can’t cross that school district boundary. That’s not for everyone. 

When I think of public school, I think of public school for everyone and it’s certainly not public when you divvy it up like that. There’s a phrase that school districts are fortresses. I think that’s right. This school district can’t be for everyone. There’s a phrase that was bandied about in the neoliberal period under  Bush and Obama, “schools that are good independent of your zip code.” That was their justification for charter schools. But like if you were to just sort of flip that slightly and say like what would it take for every school in every zip code to be a good school? That’s public education. We don’t have a system like that and for all the reasons that I’ve talked about, the federal government only puts in about 8% funding for it. It was anemic and compromised and confused even before Trump started dismantling it. Now, who the hell knows what’s gonna happen? This past July, at the federal level, school districts around the country got an email saying, “oops, you’re not gonna get your payments from the federal government. Sorry.” They ultimately did, but it caused a lot of uncertainty. 

The federal government — just to finish the sort of levels — has only really pitched in for public education in times of war and for its own military and imperial concerns. The first big federal initiative in school funding that we see is in the wake of World War I. When the US decides to get involved fashionably late to the conflict, I suppose. They find that their draft yielded a bunch of very sickly white boys from the country who didn’t know how to read. They were concerned that if they wanted to be projecting power across the world, they better have literate, healthier white men. So they decided, well, maybe we should pony up for some education at that point.  The next big stage isn’t necessarily a war, although it’s a war to some degree, a proxy war against communist revolution, it is the New Deal. You have the New Deal, which is a big bastion of social democratic programs and funding and particularly in school infrastructure. Very exciting reconstruction finance creates the precedent for a lot of the creative thinking today about how we should be doing this. 

As Derek Bell argued, the Brown v. Board of Education decision, which reverses the Plessy v. Ferguson ruling about segregation, the political economic context of that in 1954, a good ten years before what we saw as the civil rights eruption of the 1960s, that happens because a couple of the Supreme Court justices were on a world tour and they kept hearing the same line over and over again, which is, “why do you pose as the country of freedom in the Cold War against Soviet Russia when you treat your people so terribly in segregating particularly black students, African American students in the schools?” They felt like they were losing the Cold War on that message so they thought, “well, we better do something about this.” That’s Derek Bell’s argument. I believe him. 

I think that integration happened because there was an interesting convergence between white capitalists in their fight against communism. Other times, you see the federal government being generous. You see the result of that civil rights movement in the Great Society legislation. Those projects, those educational policies that we know of as the ESEA, Elementary Secondary Education Act, have been diluted and compromised since then. The last big moment we saw was, in the wake of the most recent crises of 2008 and 2020 pandemic shutdown. The thing about education is that everyone’s so worked up about it and everyone wants to have their say, but very few people understand how the money actually flows. 

The reason why certain things happen and other things don’t, I think, is because of these monetary flows. I do not think it’s public. It’s something else. People who get really excited about values like democracy and citizenship and the like will say, “well, we have to protect our public schools.” If you think about the financial values that those schools rest upon, I don’t get as excited. Not as many people are looking at school finance as a leftist, as a Marxist and from these sort of heterodox or political economic frameworks, from the perspective of racial capitalism, or private property as the problem.

Billy Saas

As a parent with a child in an elementary school in New Orleans, but I think this is representative too, one of the probably most common touch points parents and families have with school finance is being constantly solicited by their schools for donations and support. I’ve found it interesting myself, right? I show up to these, they’re good events. They’re fun. But they’re about fundraising. So schools are perpetually in fundraising mode and it reminds me a lot about what we’re talking about with the relative lack of publicity for our public school system. There’s an analog in the public media system, right? 

There’s a similar act in public broadcasting act in the 60s that sort of permits folks to think and talk about things like national public radio as a meaningfully public thing when it’s really supported by charitable donations and philanthropic donations from individuals with a paucity of actual contribution from the federal government. So just to kind of notice the rhetoric of “public” when it comes to these pseudo-public institutions  does a whole lot of work and — like you demonstrate in your book — takes a lot to undo and to separate and demystify.

David Backer

Yeah. I’ll just note something I thought of when you were talking was sometimes the reverse happens, which is something was more public than you thought because it was so decentralized. In the second Trump administration’s dismantling of higher education financing at the federal level, the indirect cost threshold dropped my jaw to the floor when I saw just how much money was flowing into universities from the federal government for all kinds of expenditures. I didn’t think of the university system as being as public as it actually was, but it took a wrecking ball to reveal just how powerful it was. Obviously, it could be way better and whatever, but I didn’t know that that was like that. That’s one of the reasons I wrote the book. 

I started focusing on this stuff and talking about it because I feel like education is something that we all care about very deeply, and it’s an extremely important part of the terrain of political organizing. Historically and now, if you think about the ways in which the right wing is able to kind of cobble together coalitions on issues in education and the like, but without understanding how this stuff actually works. How can you have an understanding of state power? And then how can you then take state power and be effective? One of the writers who I really love about love on municipal finance named Alberta Sbragia has an image in the beginning of her book called Debt Wish from the 1980s and 90s about municipal finance and cities. Her line is like, “people who are interested in politics but don’t understand municipal finance are like doctors who are scared of blood.” I think about that a lot. 

You know, particularly as Mamdani’s taking power now, but I think actually over the last fifteen years or so in the wake of Occupy, which was a wonky movement. One of the things that we read in Trump Tower was Carl Levin’s report on credit collateral debt obligations. In the wake of the 2008 financial crisis we read that report. We read the Senate report. I think that there’s a deep bench, particularly being in New York City now, there’s a deep bench of people who are on the left who now are very interested in this, or have been interested in it for a while, and have the chops to actually really change things, which maybe turns the conversation to what you asked about before in terms of the policies I talk about in the book.

Scott Ferguson

Well, I’d like to get into some of the more fine grained diagnostics that you lay out in the book. There’s the issue of how taxation is set and these mill rates and then there’s the bond market, and then you have a whole section on teacher pensions. I’d like to give some time to each.  Maybe to ease our way into how this totally dysfunctional tax finance system is structured, I’d also like to defamiliarize it by asking you to talk about the kind of historical background, right? It’s my understanding from reading your book that the school districts weren’t always, in all cases, these siloed fortresses, especially as financial zones that were atomized and had to kind of sink or swim on their own because they were integrated into state level finance in a more  robust way. Am I remembering correctly? How do they get from that to this system that is designed to fail around just taxation?

David Backer

You’re sort of asking a historical question. To some degree, I think historians have actually done some of the best work on school finance in terms of this larger project of what I call politicizing it, or activating school finance. They’ve done some of the best work because, in history, you can tell stories and you can tell stories about how it was otherwise. A lot of the historians of school finance have told really excellent stories that show us how things have emerged, but also how they could be different. There’s a slew of historians that I’d want to shout out. Michael Glass has a new book called Cracked Foundations that will really blow your mind about Long Island and the New Deal. But there’s Esther Cyna and Andrew Kahrl and  Kelly Goodman and others doing great critical historical work in this space. Matthew Gardner Kelly wrote a book called Dividing the Public, which has partially informed my little potted history there in the second chapter where I tell this story about how the school district actually as an entity goes all the way back to colonial Massachusetts. That entity has existed to some degree in a relationship with pro private property and private property financing. 

Since then, it is actually an extremely old branch of our government. But with the relationship of that entity to both the region and the state government and the federal government and then the ways in which that entity receives its financing has shifted and manifested differently in different places over time. The story that you’re referring to is that, for a long time, the property tax levied to fund public schools was a white working class victory against a previous system called the poor rates bills, which was a way of financing  school for the poor schools for the poor through tuition paid for by taxes on the poor. It’s called a pauper tax. You declare yourself a pauper and then you have to pay. It’s a sort of tuition, but the state sort of centralizes the tuition monies and pays for these schools. They also relied a lot on philanthropy, churches, and the like. But you know, working classes were like, “no, we’ve got to tax property for this, the property owners should pay and everyone should be able to get schooling.” Those property taxes were levied by the state government and the state government would allot the the funding based on property taxes across the districts and that is a much more redistributive policy than what would end up happening at the turn of the 20th century, which was the districts levying that property tax within their own boundaries. So those district boundaries were not as loaded with the racial capital relations as they were before that levy. 

The other part of the story that I tell is the story of home rule charters and local control and the ways in which municipalities decided to have their own constitutions. In addition to the state constitution, the federal constitution, you’ll have a local city charter, which is essentially your city constitution and how school finance is sort of wrapped up with that. The way I tell it in the book, that home rule movement, which sort of starts in the 1870s and then really booms in the early 20th century, links up with the real estate zoning movement that then also links up with the local property levy that creates the situation that we have today. Some historians recently gave me some feedback which I think is helpful to note, just that home rule was not a uniformly negative thing. There were a lot of victories, important victories, like in the case of the District of Columbia.  where home rule is extremely important for having relative autonomy to be able to provide for your citizens. But I still think it’s part of that story. If you don’t have home rule charters, you don’t have the situation that we have now, which is where places that have very high property values can tax a little bit and get a lot for their kids. But if you can’t afford to live there or you don’t live there, sometimes next door you can’t go. 

There are maps. There’s one called Crossing the Line from New America. New America is an association that has a great map that shows across school district boundary lines just how bad it is. That gets to the mill rate question that you were talking about before. The mill stands for millinesium, which is every thousandth. A mill rate is the number of dollars per thousand dollars of assessed value that a school district or municipality is gonna tax. You all have published great work around the tax revolts and thinking about tax revolts and actually it was from you that I learned about Josh Mound’s really important history of school bond voting that I actually feature in the book too that really just it blew my mind about about the history of neoliberalism and the role of school bonds in that. 

Anyway, you have these situations where if you have high property value, you can set a very low mill rate and get a lot of money. But next door you can have very low property value and have an exponentially higher mill rate to get much less. I think of this as super regressive taxes in my mind because there’s an added element of regression there that doesn’t typically get talked about. Like it’s not just the poor who pay more. It’s not just that. It’s actually that they also get less somehow. The reason I bring all that up is because it puts some context on tax revolt. So, when really wealthy areas with high property values say we pay so much in taxes, they’re talking about that in absolute terms, not relative terms. You know who pays the taxes in relative terms are the diverse working class people. People in places like Reading, Pennsylvania, who have to pay extremely high mill rates on extremely low property value to get a drip for their students in a context of a very ungenerous state government and a historically ungenerous federal government. But again, that’s all historically, all that stuff is contingent. It all changes.  We just have to figure out how.

Billy Saas

You said that school districts are sort of like fortresses, or that is sort of a catchphrase. From your study, from your close looking, from what you’re seeing, it seems like on one hand, as you note several times throughout the book, people are invested in their schools and people love, in many cases, their schools and want to see them be successful. To what extent do you understand the fortress-making of the school districts as a sort of a defense against a siege against their welfare from outside, and to what extent is it a fortress built to preserve the kind of neoliberal practices that we’re talking about? Can we think about the fortress in a couple of different ways as a metaphor?

David Backer

Yeah, that’s a great question. There’s a discourse that is obviously very old in terms of the American Revolution, but then gets taken up in a different way when the Bolshevik Revolution happened in the early 20th century. There’s a discourse of tyranny and totalitarianism that gets taken up around the issue of local control. The idea of local control is the idea that you’re kind of talking about. What are you controlling with local control? What is being controlled by local control? And who is doing that controlling? For who? It’s a very profound question. I thought of a couple things. 

That local control, again, manifests differently at different moments of history. In history, I don’t mean to even just say this sort of linear time, I also mean it in this sort of more uneven way of the present. There are places where the relationship of local control to the state government to the regional government to the federal government are different and differently  configured and are therefore subject to different forces or exert different forces. Also, what is being controlled and what that means to the people doing the controlling changes. 

In every place the story is just a little bit different. It’s just a little bit more complicated than you’d think, given the meta-narratives that we have about the country in terms of deindustrialization, segregation, white flight, these narratives that are helpful for condensing and reducing in some ways, but in other ways when you start to look at specific districts, and specific boundary lines and how those have changed and what those communities have been and who they are, the stories don’t necessarily all match up that way. 

Just as a sort of side point or method point, this is a point that Destin Jenkins makes really well in his work  on the municipal bond market in that book, The Bonds of Inequality, where he says the meta-narratives of urban segregation and de-industrialization actually don’t capture the work of municipal finance and the history of municipal finance. This is a thing that’s operating in its own temporality, in its own way, manifesting in different ways at different times. 

But you asked about the metaphysics of local control or the being of local control. I was gonna answer with this, because I never get to talk about this, the home voter hypothesis. I don’t know if you’ve ever heard of Fischel. This guy named Fischel has a book called The Home Voter Hypothesis, it’s cited widely in economics, in like sort of very straight-ahead economics on municipal finance, public finance type stuff. But when I read it for the first time it was sort of “Wow,” my mind was blown. He writes in a very conversational way. His home voter hypothesis is that, in any given situation where there is a local vote on something that will happen in the municipality, voters are voting as to whether or not the thing that’s being voted on increases or decreases their property value. That’s it. It doesn’t have to do with how wonderful this sewage project is, or how much you need a water treatment plant, or how much we need highways, or how much we need schools. People in the situation that we have now, the configuration that we have now, local control under the situation of local levy of property tax, state grants through sales tax, federal grants through income taxation and the like, what we have now is a situation where the home voters are going to be voting on the capitalization of their asset. 

It’s a very cynical thesis, but when you start to think about it and let it sort of take root, you start to understand perhaps some of the dynamics around local control. So if you have good schools in your school district, there might be higher demand to live within your school district. If there’s higher demand to live in your school district, there’s gonna be increased property values within your school district. If there’s increased property values, then the rich people live there and if the rich people live there, there’ll be businesses to serve those people, and politicians that listen to those people. Then those people in that district want to protect what’s theirs because there’s a wall around it in the form of the school district line. What is that? Racial capitalism. That’s what that is. That’s one of the clearest names that I’ve found for it, because essentially they just want to preserve what they do and what they have, what’s theirs. 

This then comes to bear on all kinds of things and it’s very difficult, although it’s not impossible to combat that redistributively through state courts, which is what the legacy of the civil rights movement has been. In the wake of 1973 court case: Rodriguez, and 1974 court case called Milligan that decided that because the word education isn’t written in the Constitution literally, then the federal government doesn’t really have any obligation to it. Ever since then there’s really been a sense that like “you get yours, I get mine. We’ll see how it all works out.” The communities that can work the system for their benefit do and sometimes that actually involves really high debt loads. You’ll see very wealthy districts with a lot of debt service obligations, because they can borrow and then they can repay it because they have high property values that they can tax. 

The only other way to answer your question to some degree is to think of this investment in schools, as you put it, as having a material aspect and a spiritual aspect. The material aspect is the home voter hypothesis, which is: a lot of a lot of homeowners out there and their biggest asset is their house and so school finance is ontologically tied to the capitalization of their biggest asset. But the other horn of this ontology is the spiritual, and that is their own children and their own children’s experience and what their kids have. Not only what their kids have, but also like what kids have in general. There’s a very deep interest that people have in social reproduction, which is to maintain the continuity of what we do around here. Wherever that “here” is and whoever that “we” is, there are strong spiritual investments in the maintenance and the continuity of that. Schools articulate all these things very tightly together. 

They articulate a desire to maintain the continuity of what we do with the capitalization of your biggest asset. Local control is about controlling all of that, holding on to all of that and not letting it go. I tell my students, who are largely superintendents and principals and people who want to be educational leaders, people will go to these school board meetings and they’re sounding off in the comments, and you’re thinking to yourself, “all I need to do is approve a bond so that we can fix our roof. I don’t know why these people are screaming at me.” They’re screaming at you because what you’re talking about is a threat, potentially, to the capitalization of their most valuable asset and their spiritual commitment to what they think of as being the best for their kids and kids in general in the future. That’s why I use this line in the book. 

I think that this school finance is the sort of weakest link in the chain of racial capitalism in the US. When you hit this link, other things are gonna shake. When you move this piece in the Jenga board of the United States, other pieces are gonna shake. We saw that in the civil rights movement and anytime these boundaries get challenged, it’s like a third rail. It’s like a vulnerable underbelly to this whole structure and I think it’s a big shame that people don’t understand it. But also I can understand because that vulnerability would want to be protected by a sort of broad ruling class who wouldn’t want it to be different.

Scott Ferguson

So, let’s pivot to the bomb market. How does the educational wing of the bond market work and how is it structurally designed to fail?

David Backer

The municipal bond market’s like the most powerful thing people don’t know anything about. James Carvel very famously said that when he was a kid he wanted to be reincarnated as Babe Ruth or the Pope or the Dalai Lama and now that he got state power with Bill Clinton he was like “now I want to be reincarnated as the bond market because you can intimidate everyone.” The thing about this bond market is that it is unique in the world. There’s no other municipal bond. There are municipal bonds in the world, so far as I understand, and this is something I want to study more internationally, but so far as I understand there is no market like the United States municipal bond market. 

According to the most recent estimates I’ve seen, twenty-seven percent of that market is devoted to education, which is the plurality. It’s higher than the category of general purpose. This bond market is devoted in its plurality to educational purposes. Now that’s higher education and Pre-K through twelve.These markets are huge markets. Municipal bond market is a four trillion dollar market. It has 1.5 million issuers which dwarfs the corporate bond market exponentially in its size. Since the Erie Canal, municipalities and state governments have financed their infrastructure through this market in some form or another and it’s been configured and reconfigured in different ways. 

There’s no history of the school bond, I don’t even think there’s a history of the municipal bond in the United States, which there really should be, but there’s certainly no history of this school bond. This is a very old structure. It’s not neoliberal.  It is as old as the Erie Canal and then the competition between state governments in the sort of post-revolutionary period to build themselves up infrastructurally using foreign credit. A lot of times English credit. So you know, the country fights this whole revolution and then finds itself several decades later essentially indebted to the imperial body from which it separated. 

Scott Ferguson

That’s how postcoloniality rolls. 

David Backer

That’s right. That’s how it rolls. The first school bond that I have found in history is in Kentucky in 1837. It’s the earliest date that I’ve found that a school district went into debt that it had to pay back with interest. But you know, the first municipal bond dates back to about 1647 outside of Utrecht, when a dike froze over and the municipality needed to go to a businessman and say, “hey, can you lend us money with interest to fix this dike,” and he was like, “yeah, sure.” It’s still paying out to this day. There’s a ceremony there on the River Lek where they roll out this bond statement from the 1640s. So this is a very old situation and philosophically I want to say that the reason why we have this situation is because of the very fundamental temporal differences in kinds of expenditure. 

This is a problem that I think anyone who is interested in creative financing needs to contend with and contend with seriously. There are different kinds of expenditures. They’re typically called operating expenditures and capital expenditures. The operating expenditure is the sort of regular yearly — in the case of school districts, but for us as individuals could be monthly — charges that we just budget for. So we get income and then we have to pay our rent and we have to pay food bills and we have to pay this and that and that’s a regular thing. Then for firms and for governments, there’s salaries and benefits to pay out yearly. 

But the operating expenditure that is in that regular temporal rotation is very different from the irregular needs of infrastructure and facilities of all kinds. The word that’s used sometimes in the literature is lumpy because the pattern of the need for this kind of project, if you’re thinking about a trend line, there’s a sudden bump and then it goes down, it’s lumpy, because you need a lot of money and a lot of resources up front to be able to complete this project that you might not need to do again for a hundred years in the case of a school building or you know in the case of  cybersecurity infrastructure that you need to put in place like in the case of Los Angeles where they had multiple cybersecurity attacks and they had to take out bonds to be able to finance a cybersecurity system. 

Or, also in the case of Los Angeles, when your state law changes and the statute of limitations on being able to seek relief and damages from sexual predators and sexual  violence is extended, your school district suddenly now is on the hook for upwards of 250  claimants going back in time to be able to pay out the court cases, that’s a huge expense, right? That’s not in your operating expenditures and so in the case of the Los Angeles School District, which I just read about recently, they issued something called a judgment obligation bond or a JOB. A JOB is a bond that is a loan that is taken out to pay judgment to claimants. They had to take out this big long-term bond, but they needed short-term financing for this bond to be able to pay out to the claimants so they got a non-revolving credit agreement with the RBC, the Royal Bank of Canada, to provide short-term liquidity for a longer-term liquidity need for the sexual violence cases. I try to bring in as many cases as I can, but the capital expenditure is a temporal problem. 

It’s a metaphysical problem, which is that things happen at different rhythms. The rhythm of my need for paying rent is different from the rhythm of my need to fix my HVAC system and I knew this too when I owned, quote unquote, a house, that is to say the bank owned it and I was paying the mortgage. That was a whole education too, by the way. The temporality of these needs are irreducibly different and you need to be able to have a financing arrangement that will provide the resources necessary at the right time to satisfy them. 

So if you need to build more schools because everyone’s moving to your school district, like in the case in some places in North Carolina, people are flocking to these certain districts of North Carolina and Virginia too, and they have these needs because so many of their enrollments are actually increasing. They have to build more capacity. How are they going to do that? Now, the cocktail of local property tax, state sales tax, and federal income tax does not come in at the right rhythm. Those are for the operating expenditures. So, what do you do? And I know that in MMT it’s sort of a faux pas to liken this to the individual, but I’ll do it anyway because I think it fits within the context of subnational government. 

If you need to buy a house, quote unquote, or if you need to go to school, you need to pay tuition, or you want to get married, or you want to get a car. These are big capital intensive expenditures that you need to engage in. So how do you do it? Well, in the United States, typically you get a loan and the loan, in this case, the credit that is extended to you, is a solution for the temporal problem of the capital expense. When you have this lumpy need and you need capital up front that is not part of your regular operating needs then you need to be able to get that liquidity from somewhere. The municipal bond market has been the country’s solution to the temporal problem of the capital expense in terms of infrastructure and school infrastructure in particular for 200 years and counting. 

Though they treat this capital problem as, number one: a credit problem, you don’t have to treat it like that as you could treat it as a grant problem, right? You could just say, “oh, you need this? We’ll give it to you.” That’s one way you could solve this problem. That’s why I like talking about it this way. Not only do they treat it as a credit problem, they treat it as a private credit problem. Where they think of the state — the subnational governments — as being like private firms that need liquidity to be able to deal with their capital expenditures. A school district has its page on the Bloomberg terminal and it has its credit rating and it has its yield calculations and its deal structures and the financial consultants and the bond lawyers and all of this stuff. It’s a whole regime that is set up to be able to meet its capital expense needs, which has sort of called forth into being this regime that has held on in one way or another for so long, it’s even survived the most recent Trump budget bill. There were people who were advocating for a law that was put into place that really solidified this situation in the early 20th century, which was under the federal income tax law that exempts interest payments on municipal bonds from taxation.

So if I invest in a municipal bond and then the municipality pays me back with interest, I don’t have to get taxed on that. That is the country’s infrastructure policy. So school districts are essentially competing and they’re under a constant threat of getting their credit ratings reduced, even though ultimately debt service ends up being about eight to ten percent of their yearly budget, which by the way is a lot.The budget officials and the superintendents are nervous that any given movement, anything could threaten the credit rating on the municipal bond market, which would increase borrowing costs, increase taxes, decrease property values, decrease trust in the government and so I think the municipal bond market is, as I say in the book, this hidden force of educational injustice, because a lot of the reasons why a movement will go into a school board meeting and they’ll demand XYZ and then the superintendent and the school board members all look to the CFO or or the budget official or whoever it is and they say, “Can we do this?” He’ll say “no, the credit rating.”  

That one little moment that just feels like, when you hear it, if you don’t know what it means, it feels like nothing. It feels like air or cardboard, something very ethereal, two-dimensional. Both somehow normal and incomprehensible at the same time, and you just sort of go, “okay, fine, let it go.” These are the structures that inhibit change and it’s a very deep problem. It’s a very old problem. It’s such a problem, in fact, it reminds me of that line from the usual suspects, Keyser Söze, “the thing that the devil did was convince everyone he didn’t exist.” It reminds me a bit of that. So yeah, that’s the bond market.

Scott Ferguson

Well, thank you. Obviously, from our point of view, we would want to maximize public credit facilitation in the form of granting that wherein the lumpy temporal horizon of all provisioning would be for public purposes. It would take political contestation and analysis. It wouldn’t be easily solved but we wouldn’t be dealing with this kind of straitjacket, but what you do in the book is you offer both historical and some of your own more contemporary examples of different strategies to put pressure on, or to ameliorate, or to partially overcome some of these obstacles. Maybe we can begin to talk about some of those. I know there’s been legislation, there’s been movements. Where should we start?

David Backer

Yeah. Well, I’m a big believer in — and I think this must come from my reading of Althusser — how you have to take up and take on the terrain as you find it in order to get the transformation that you want. The arrangement of forces that are in front of you are the things that you have to work with to get to where you want to get to. I think some of the policies and tactics or arrangements that I’ve proposed start from that premise. It’s not like what Aaron Benanav is doing now, which is fascinating, which is his work on the multi-criterial economy and the new left review,  communist economics and all this. It’s not that. This is sort of like “here’s how it works, here’s what we could do from within this thing to take it up.” We have to take it up first and then you can take it on. It’s not as though there’s gonna be some kind of revolutionary moon landing that’s just gonna smash everything and then you get to build whatever you want afterwards. The policies I’ve come up with are in that context. 

The first thing I always start with, because it still exists, are the financial disparities programs in the Twin Cities. This is a tax-based revenue sharing program that condenses the disparities between municipalities with differing revenue. It was created by a very plucky former bond salesman turned civil servant in Minnesota. He brought the idea in a briefcase to a pancake house in a meeting in 1968. The story of this program is one that I love telling, but basically what it does is it creates a regional sharing pool and a percentage of the growth in municipal tax bases from year to year — 40% — is put into a pot and then redistributed according to the changing revenues of the different municipalities, such that if you happen to have a bad year or your shopping mall closes down or your real estate, and properties go down, what you have is a pool at the regional level that will be able to compensate a little bit for it. The reason why this thing is kind of magical is it passed by like a single vote in 1971. It’s called the Minnesota Miracle and they called it Municipal Socialism and the like. But it’s decentralized collectivization at the regional level from within this system that we have and I think the more that we can talk about that kind of arrangement and try to adapt it for the different places and regions that we have in the country, the better. 

Which is why, in these different political projects I’ve been involved with, I always come in as this very specialized person to talk about school finance. But in the Green New Deal for Schools legislation that Jamaal Bowman introduced during that very exciting period between 2021 and 2022 in that budget reconciliation process. I consulted on  the white paper that the legislation was written around and one of my little suggestions was to create equity grants that incentivize tax-based sharing across racial and class lines, such that the federal government would be able to incentivize places that have this kind of tax-based sharing with further rewards, granting grants and loans for having that in place. 

Sarah Quinn in her book, American Bonds — that’s a great book too — provides a sort of a sociological history of the bond market in the US. Her finding is, essentially, that the way that you govern federally is through credit. The way to govern in a way decentralized in federalism through credit is to essentially find ways to try to get states and municipalities to do what you want them to do by making it easier for them to borrow. I think trying to encourage places to adopt fiscal disparities legislation like that and even in new and expanded ways, like maybe increase that 40% number. Maybe also do debt sharing, you know, which they don’t do in the Twin Cities. But what if what if you could do debt sharing in addition to tax-based sharing? Because there’s still actually a big difference in those municipalities and the Twin Cities in terms of their death service obligations. Okay, so that’s one thing that I like. 

Another thing that I like, which doesn’t exist anymore, but briefly did, was Vermont’s Act 60 in 1998. That policy is sort of a state level policy. Given the history, it’s sort of a throwback to the days when the state government would collect that property tax. But the state government in Vermont in the 90s didn’t collect the property tax and redistribute it. They did something even a bit smarter, dialectically. They took up and took on this system of local property taxation. Essentially, after there was a lawsuit that said the state was out of compliance with its education clause and its constitution, which is the legacy of the civil rights movement, which are still going today, these state court cases you sometimes read about, how the state is found to be out of compliance with its own constitution. 

That was the civil rights strategy after they lost at the Supreme Court in the 1970s, they had to bring it to every single state. The ways in which education funding has been compensated for across disparity has largely come from the yeoman’s work of lawyers on the ground over periods of decades going with the the the slow machinations of the repressive apparatus trying to get these judges to say that the government’s out of compliance with its constitution, which then pressures the governor and the state legislature to do something about it. There’s never any guarantee that they’re gonna do something about it, but like in Pennsylvania recently, Shapiro’s answer in 2024 to the Supreme Court case victory the previous year was to say, “oh, we’ll just publicly fund private schools more with vouchers.” 

In Vermont they came up with, what I think, is the best system which does the following. We talked about mill rates before, right? Now, the big problem is that some municipalities have a lot of municipal revenue and others don’t. Those municipalities that have a lot of revenue can set their mill rate really low and get a lot. Whereas the other ones can’t, the super regression, right? This policy took that up and took it on. What it said was the state is going to set a high minimum threshold for the mill rate across the board, relatively speaking. So every district has to have a high floor. You can’t just tax really low to get a lot anymore. But also for the districts that don’t have a lot, they only have to tax that level, they don’t have to go much beyond that. So for them it’s a low floor actually. But combine that high floor with a low ceiling for per pupil expenditure, which means that the state determines what the adequate per pupil expenditure is for students in your school district. So you can’t just be spending lavishly on your rich kids anymore. 

Scott Ferguson

No more observatories? 

David Backer

No more natatoriums and ceramic studios and the like. Actually, no, to educate your kids, you just need this and anything beyond that low ceiling goes to the state and is redistributed to the districts with the low municipal revenue. It really put the squeeze on the bourgeoisie there. Because it really puts the squeeze on the property owners with the high property values and redistributes it from within the system of taxation. It only existed for a couple years. The author, John Irving, was so upset by this system that he started his own private school for his kids because he didn’t want them to have trailer park envy, which is a quotation. I think he later felt bad about that, but every time I see John Irving I’m like “ugh.” 

Howard Dean, in the next cycle’s governor’s election, came out against this system. Even though it was actually yielding tons of great results, test scores were going up,  the disparities were being compensated for. In Vermont, the big problem was that you had wealthy ski towns where there were ski slopes and they had a lot of municipal revenue and then very poor farming towns that didn’t have the same property that they could get taxed. The research that I’ve read has shown that it was quite successful. But then they killed it and the conservative won the next governor’s race, basically a referendum on that policy, which the regional ruling class in Vermont came out in force against.  

One of the things that they did was that they started their own network of private donations for their local public schools, such that they went door to door and they asked people to make donations to this fund. The fund would go directly into the school budget, but it was not subject to the state’s limits of Act 60. So they created their own private funding streams for their public schools in order to circumvent this policy. They’ll go to any lengths to not redistribute so that was ended but I think that model creates this kind of imagination that we can work with where I really think it took up and took on the system. 

Another thing I bring up, which I think people are starting to disagree with me about, is Richard Nixon’s idea for a value added tax to fund schools. I just think that’s a cool story, but it’s also a way of thinking about how it might be different. I think maybe having a value-added tax at different levels of production rather than sales taxes, which are excise taxes, even though VATs sometimes happen at the point of sale, but I think that’s still an interesting story that gets us thinking creatively. When it comes to the bond market, there haven’t been a whole lot of alternatives that have existed in history. So we don’t have a lot to work with. I don’t talk about it in the book, but the Reconstruction Finance Corporation is definitely something to look at. Although some people argue it’s just state capitalism. 

James Olson in his history of the New Deal says that was saving capitalism. That informs people down the line, like Saule Omarova and the National Investment Authority, which would have a national investment bank, but I still think that’s a good idea so I try to talk that up as a solution. The Green New Deal for Schools legislation is another great resource. It provides just tons of grants and it expands our understanding from physical infrastructure to social infrastructure. So it starts to include labor costs in the costs of having functional buildings. The National Investment Authority has essentially found a third pillar of the federal financing apparatus. There’d be the Treasury, the Federal Reserve, and then this investment authority. 

From my understanding of it, the risk that’s created from the temporality of the lumpy capital needs across the spectrum of society, because there’s a risk inherent in that because you need to be able to front the capital to be able to pay for that but where’s that capital gonna come from and is it going to be able to be paid back? The more you pool that risk, the better. The National Investment Authority pools it at the federal level. Anytime you need a project, they’re going to deal with the financing, the borrowing, and the lending, and then there’ll be better technical service, pay as you go grants, low-cost grants, long-term grants that finance this stuff. My little contribution to this that I go around talking about a lot involves pensions. The whole last book, the last part of my book, is about pensions because I also think there’s a lot of stuff about school finance that’s taken up by pensions. 

Pensions are huge pools of capital and they serve a very important purpose of meeting the social risk of aging. There’s traditions that think about the pensions that actually have the pensions as the huge public pools of capital for the public’s infrastructure. There’s a story from Singapore where the pensions got involved in the mortgage business to be able to increase birth rates in the country. The pension is now underwriting mortgages and what did the pension decide to do? It started to host singles dating nights so that people could meet each other, have babies, and then buy houses and take out mortgages from the pension. The pension is a great big pool of the public’s money that’s meant to meet the risk of aging and death, which is essentially our encounter with death, writ finance. We can use our resources that we’ve built up to meet death, to fund our life. 

The sort of policy that I like to recommend it comes from something called fiscal mutualism, which is, in the case of schools, and I think it can be in the case of housing or water or other things it could be used similarly, but in the case of schools, the historians Mike Glass — who I talked about before — and Sean Vanatta — whose work on pensions is very good — they found that the teacher’s pension in New York was historically 10% invested in New York school bonds. They named this approach to pension investment, fiscal mutualism, which is the usage of the public’s money for the public’s infrastructure. If you position the pensions in a stronger way against the more traditional underwriters in the bond market, who are the underwriters? Who are the ones that confront that capital immediately? The big private banks and the big investment banks. They’re the ones that have all that capital and they’re the go-betweens between the bondholders and the municipalities and the borrowers.

If you can challenge and take up and take on those underwriters by exerting the force of the pension and trying to have a sort of more just usage of the public’s money, you can actually do that at the subnational level without relying on the federal government at all. Which is why I sort of talk about it more and more because of the fascism that we have. Like in the case of New York City, I’ve been pitching around the idea that the teacher’s retirement system could be an underwriter along with the green banks, de-risking school bonds that would fund green school infrastructure. I call that green fiscal mutualism, where the green bank becomes a dialectically very exciting institution. 

I think a lot of people on the left hear me talk about this stuff and they’re like, “what? Like that’s still capitalism.” I’m like, “well, I mean everything’s dialectical.” What the Green Bank does in my understanding is it’s a reverse charter school. So whereas the charter school is taking public money and putting it in the private sphere for the private provisioning of a public good, the Green Bank is actually wielding private money for the public good and funneling money from the private into the public for the public. I think if you could have green banks de-risking pension purchases, school bonds, then you’d be meeting this climate issue because school buildings emit a ton of carbon but school buildings have also been totally underfunded historically and they’re not safe and they’re not healthy. 

So these are some of the policies I like, some of the things some of the things Dave likes. The other last thing I’ll mention, which I haven’t mentioned in other places, but I hope people pick up on it in the book, is what the school district of Tredyffrin/Easttown, Pennsylvania did in the early 20th century. You had two municipalities: one predominantly white and the other predominantly black. They entered into a jointure to build an integrated high school in 1912. It survived multiple attempts at segregation but these communities got together across race and class lines and said, “we’re going to invest in one another. We’re going to take on this risk together through the jointure and we’re going to build this high school and we’re gonna take on this bond.” It’s a debt that they took on, but they took it on together across these very potent lines of the fortresses. When I tell people like, “well, what if you got what if you got people together across the school district lines in your region and said, let’s do jointures all together to finance each other’s infrastructure?” That would cause riots, right? The wealthy people don’t want to be financing the infrastructure for the non wealthy people that are even their neighbors. They might even be the same sports team fans. In the jointure, I think there’s a lot of possibility.

Billy Saas

Yeah, so this book’s coming out December 2nd, one day after the podcast. So listeners, go grab a copy. But there’s obviously a lot going on. I imagine some of this was on the horizon as you were putting finishing touches on it and in the introduction you addressed the second Trump term.  Also we have what you mentioned as the fortuitousness of your move to New York and, of course, you got Zoran Mamdani elected by moving there.

David Backer

I hate how my retelling of it lends itself to that.

Billy Saas

No, no, I think it’s awesome. It’s good storytelling. We like a little magical realism now and then. Obviously, it wasn’t just the Mandoni campaign. There were a series of wins across the Democratic Party and some are calling it-

David Backer

Katie Wilson in Seattle too.

Billy Saas

Right, right. Some are more exciting than others. Katie Wilson, Mamdani and then, you know, some former CIA people as well. Some are calling it a blue wave and we’ve heard it said that education — and I guess we should shout out Jennifer Berkshire’s post.

David Backer

Which everyone should read. Her substack is called “The Education Wars.” She wrote another book with Jack Schneider called The Wolf at the Schoolhouse Store. She’s great.

Billy Saas

Absolutely. Yeah, so a blog post recently or a substack post basically crediting education with this recent blue wave win. We wanted to just close out by letting you offer your two cents on that.

David Backer

Yeah. Well, I tend to agree with Jennifer. What Jennifer’s picking up on is the fact that this rush on the right to dismantle the public school system as I’ve described it is a threat to the local control that I described. These districts, and particularly in the wealthy areas, predominantly white areas, but not all white, but predominantly, have done generations of work to fortify their worlds, their schools. The fortresses are activated. The fortresses are there. The Trump administration and the voucher movement are coming for those fortress walls. They’re coming for the charter schools. People in these rural areas where there are no private schools want their public schools. They don’t want them to go away and these governments, in their rush to appease the leader, are dismantling the systems that their own constituencies hold very dear. I think she’s picking up on that. 

She has an ear to the ground across the country. I would just say that, if there was anything I was gonna add to that, we’re in a time of great uncertainty. It’s what Adam Tooze calls the polycrisis. While I don’t entirely agree with his conception of it, I do think that his remarks in a lecture last year are helpful, in that, all previous theorizations and concepts come from times of lower parts per million carbon in the atmosphere. Even the very idea that the new is struggling to be born while the old is dying, that idea is too optimistic for what we’re undergoing right now. You know, the time is greatly uncertain. It is very unstable. There are dislocations happening everywhere. I feel like this system that we’ve been talking about is some version of an ancien regime, thinking about the history of revolutions, like Mike Duncan’s podcast. 

We’re getting to that point where this thing is shaking and it’s definitely falling apart. What that presents is a danger and an opportunity. There’s also these other forces that we have to account for in that instability, in terms of inflation, supply shock, pandemic shock, artificial intelligence. These are exciting times. “May you live in exciting times.” The thing is, we have to get together, we have to understand the terrain, and we have to figure out what policies we want when our turn comes to try to steer the chaotic ship through the chaotic sea. I think it’s not just that education will sort of underwrite a blue wave, but actually the waves themselves are very chaotic and the old color schemes are all over the place. 

Zoran getting elected, and Katie Wilson and all these people doing things that you could never have imagined are all on the bingo card. The things that are not on your bingo card are on the bingo card. It’s all the more important to study this stuff very carefully to figure out what we can do to transform the structure and take advantage of the moment.

Scott Ferguson

Well, Dave Backer, thanks so much for joining us. Everybody go out and get the book As Public as Possible:Radical Finance for America’s Public Schools.

* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

We speak with Caroline Levine, Ryan Professor of the Humanities in the Department of Literatures in English at Cornell University, about her important book The Activist Humanist: Form and Method in the Climate Crisis (Princeton University Press, 2023). Building on the theory developed in her award-winning book, Forms: Whole, Rhythm, Hierarchy, Network, Levine’s The Activist Humanist redirects the critical capacities of formalist literary study to discover and mobilize the democratic potential of political forms thought by many on the left to be irredeemably exclusive, violent, and anti-democratic. Countering scholars in the environmental humanities who embrace only “modest gestures of care”—and who seem to have moved directly to “mourning” our inevitable environmental losses—Levine argues that large-scale, practical environmental activism should be integral to humanists’ work. For Levine, humanists have the tools–and the responsibility–to mobilize political power to tackle climate change. We speak with Levine at length about this project in an effort to move beyond critical gestures of dissolution and toward an activist formalism that moves constructively between politics and aesthetics.

See the Doughnut Economics Action Lab website for more information about the upcoming screening of Finding the Money mentioned in the audio introduction.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

William Saas

Caroline Levine, welcome to Money on the Left.

Caroline Levine

So great to be here.

Scott Ferguson

We invited you to speak with us today about some of your recent work, about the social potentials of form across aesthetic and political registers. Maybe to set up this conversation, you can tell us a little bit about yourself, maybe your intellectual background, your training, and how you came to your more recent ideas and arguments.

Caroline Levine

Sure. I’d love to do that. I feel like my intellectual life is a little bit of a history of my discipline, or it’s a story about the discipline. I studied literary studies as an undergraduate in the late 1980s and early 1990s when deconstruction was all the rage. We were looking for gaps, which we called aporia, like watching language disintegrate and collide with itself. Everything was coming apart.

Then I went to graduate school at the University of London in England, where just about everybody was a Marxist of some stripe or other. So, I wasn’t doing this in order, but I was going from deconstruction to Marxism. I think I was particularly shaped by Birmingham School of Marxism. That’s people like Stuart Hall and Raymond Williams, who think about ordinary people as processing culture in interesting ways, as making cultural meanings, not just passive dupes of the culture industry, which is what the other big tradition in my field is – the Frankfurt School – where the culture is made at the top and it’s fed to you and you just take it in. I was much more drawn to the Birmingham school, but there was a kind of a problem that I felt like I wanted to solve. I worked at it for many years. That is, none of the models around me that were coming out of the humanities felt to me like they were accurately describing power.

We had, on the one hand, this kind of tiny, minute, textual reading, which people would say was powerful in some way because it would take apart binaries. I actually think that the rise of trans and non-binary sexualities has a lot to owe to that movement, so it did have a certain kind of cultural and material power. But Marxism was also always not quite satisfying to me, in terms of cause and effect, like what actually makes things happen in the world. Was it always materiality in the ultimate instance? I ended up trying to figure that out by way of this category of form, which across the arts once meant sort of the shapes and arrangements and organizations of works of art.

Like the composition of a photograph or the plot of a novel or anything that shapes or arranges it. So, it could be narration, or it could be rhyme, like lots of different things are forms. It seemed to me that what we do when we read literature is usually look at a lot of those forms in relation to each other. We look at rhyme and then we look at plot. Let’s say it’s a novel in rhyme. We’re thinking about those different forms interacting and they don’t interact perfectly. Sometimes they support one another. We’ll say, “oh, this plot is all about marriage and then the rhyme also brings couples into a nice relationship,” or whatever. I just made that up. But that’s one where they go together. There are many others where you say, “well, there’s this weird break in rhyme, it doesn’t quite work. What’s going on?” You know, we learn to read for the ruptures and the divergences from the main form. I was kind of grappling with, on the one hand, the question of form generally like, what if we look at all shapes and arrangements using the tools of literary study? Not just books and paintings, but also a school system or a seminar room or a public transportation system. Aren’t those also shapes and arrangements? That helped me to start to think about the relationship between works of art and social worlds, which was the thing I was trying to grapple with as I thought about power.

Does culture just reflect those social forms? Is it a product of a particular moment? That’s what most Marxists would say, right? So, culture comes out of a particular social moment. It seems to me that that wasn’t always true with literary forms. They were sometimes jumping across lots of different contexts, for example. Did they belong to a particular moment? That didn’t seem quite right to me. But if we see them both as forms, like if we see the literary forms and the social forms as shapes and arrangements, none of which has automatic priority over the other, we can come up with a different landscape of how power works.

The first place I went for the answer to this question was whether small forms can disrupt big ones, right? Could an art form actually undo a state or something like that? And I think the answer is no. But it was an interesting question for me. And trying to think about that question, like, “what do art forms do?” What kind of power do the forms themselves exert? I started to track something that I was a little surprised by, actually, given that formalism is a longstanding way of interpreting works of art, literature, and music, which was that pretty much everybody across the humanities was anti-formalist. Almost everybody was excited about breaks in form. They’re not excited about forms, but excited about breaks in form. I started to see the whole landscape of the humanities as being about rupture and disruptions on various levels. I was like, “okay, so everybody wants to break form, but what if forms are useful? And what if they don’t only work to contain us? Or maybe containment is itself not always a bad thing.”

I started to check for forms that are used both in social and political analysis and in artistic analysis. And those are holes, containers, which have been one of the biggest problems, seen as right wing forms. Right. So, like, the nation state is a bounded enclosure or the prison cell is a bounded enclosure. There’s a pretty long tradition of understanding literary forms like the sonnet as a room. Thinking about literary forms shape as being also like bounded enclosures. And my question was, are enclosures always wrong and bad? They definitely have a bad history. The enclosure movement is the beginning of capitalism as we know it, turning everything into private property that had once been commons and public property. But, one of the examples that came to me while teaching was the seminar room. We need an enclosed space in order to think and talk together. Otherwise, there’s bugs and there’s snow and there’s people coming in and out. If we think about enclosed spaces as also affording some good possibilities, we get a different account of the politics of form. So my four forms ended up being two that we usually hate on the left in literary studies, that’s whole and hierarchy, and two that we usually love, that is rhythm and network. I argued that we should love and hate all of them, that rhythms which we often take to be sort of organic and part of the body, we have the rhythms of the heart and the rhythms of walking. Those can also be put to use in terrible ways, like enslaved people forced to sing in order to work at a particular rhythm, for example, or music in factories was another common thing, especially in the 30s and 40s. So rhythm is not always emancipatory, but it also part of our lives everywhere. Our lives are structured by all kinds of rhythms, you know, work and sleep. Not enough sleep is one of those rhythms that I myself am most upset about. But also, do you exercise every day? Do you watch TV at a certain time?  Do we take a pill at a certain rhythm in our lives?

Just thinking about our lives are shaped by rhythms that are not only aesthetic. What does that mean? And then hierarchy was really my favorite one because I don’t think, as a leftist, I was ever going to be a person who would make a case for hierarchy. But I realized that I had been arguing for a really long time that equality is better than hierarchy. And what is that? That is a hierarchy. That’s a hierarchy of values. The idea of just one kind of thing taking precedence over another feels to me like actually one of the things we might fess up to on the left, that is we have values. We put human equality, for example, above certain kinds of individual freedoms. That’s a hierarchy that we buy into. I was also interested in the ways that hierarchies can upset each other and get in each other’s way, and they aren’t easily pulled together as we sometimes say in the humanities.

Scott Ferguson

Can I add something? On the left, we hate hierarchy because what we want is equality. I think another way that I’ve found it important to affirm hierarchy is a hierarchy of responsibilities. Right? So, we often think about a hierarchy of power, like “you’ve got more power than me!” As every Spider-Man fan knows, with power comes responsibility. And that’s not just like an afterthought. We need scale. We need people in organizations that have different scales and bits of responsibility and hierarchy as a form might be one way of thinking about that that’s not necessarily rigid or just flatly top down.

Caroline Levine

Oh, I love that example. Yeah, that’s a really lovely example. I talked to somebody who works in nonprofits who also said, “you know, when we think about hierarchies in an organizations, we usually think about power and money, but it’s also about what you can see.” At different levels of an organization, you have a different sense of how the organization works. A lot of my thinking on form was actually informed by being a department chair and realizing how the upper administration was working, how budgets were working, and how legal restrictions were working.

Scott Ferguson

And you had all these new responsibilities that weren’t just about producing monographs and making sure no one gets in your way.

Caroline Levine

And not that much power. As people point out, the department chair does not have much power. But to figure out how much power I did have, you know, what could be rearranged? What was possible to reformulate? So, yes, responsibility is a great way to think about it. So then, I kind of made the argument at the end of that book, Forms: Whole, Rhythm, Hierarchy, Network, that I thought you could make a better world using forms, but we shouldn’t avoid them. They’re kind of unavoidable. But we should think about which ones work better and work worse according to different values and different contexts. After I finished that book, people would say to me, “so how do you do that?” I realized I had a new responsibility, speaking of responsibilities, which was not just a call for this, “you know, let’s make a better world using form,” but actually to think about what does that look like?

That led me to the most recent book that I wrote, which is called The Activist Humanist, which I decided to take on. Speaking of hierarchies, I had to figure out what particular political problem I was going to think with, climate change seemed to me to be the one that had the largest impacts on everything else. Any other question that I had asked would be affected by climate change. And so how do you use forms to think about climate? One thing I really started to feel very strongly about and this has put me very much in the minority among humanistic thinkers, is that that urge to disrupt and to be open ended and to be subtle and to be questioning and to stop and kind of ponder our world – all of that – has actually gotten in the way of action on climate, because, in fact, big oil has wanted us to do exactly that. Doubt, delay, disrupt. And then we’ve got these authoritarian leaders around the world who are totally in love with disruption. We saw the tech industry, and then we saw Elon Musk move fast and break things. Do we really want to break things?

It seemed to me that on the left, one of our values has been actually to make sure that people have enough to eat, they have enough clean water, they have shelter. Like these are not exciting, subtle, interesting forms. They involve continuity and predictability and those were things that I started to really revalue and that changed pretty much everything about my research. So once I was like, “okay, I’m not all about breaking things anymore,” I started to think, “what forms do we need to sustain life over time?” Aqueducts were a pretty interesting example to me. They’ve lasted thousands of years carrying clean water to people. Almost all great water technology is thousands of years old, including flush toilets.

We don’t need something new. We just need it to be more equitably distributed. And there are societies that have equitably distributed water and they have forms to do that with. I spent some time in Morocco and in the countryside. A lot of Moroccan villages will divide up access to the river by times of the day in times of the year, so everybody gets equal access, for example. That seems great to me, but that’s a form and it’s constraining. Like you can only go to the river on Tuesdays between, you know, morning and lunchtime. You can’t use it at other times. You can’t irrigate from it at other times. It’s to say reevaluating containment as well as different kinds of forms to use for leftist ends.

William Saas

There’s a parallel that seems to be available to make or to draw or to observe between this kind of valorization of open-endedness in the critical humanities and defeatism is maybe one way to put it, but then also, maybe more troublingly, accelerationism. Let’s let the process play out so that we can end up with that space of open play and radical possibility.

Scott Ferguson

And the resources of that play or the energies of that play come from the accelerating dynamics of the very thing that you hate.

William Saas

Yeah. So I was wondering if you would comment on that. Also, there was a lot of therapeutic value in reading your book, and sort of rereading my own experience of being in the critical humanities and being with Money on the Left has been really affirming in the other direction. So, any more you can say about that. I know that we’re not interested in pointing fingers or assigning blame for where we are, but, oh boy, is that a possible thing that we could do.

Caroline Levine

Yeah, yeah. No, I really hear that. I mean, both my own sense of dissatisfaction too. “Wait, no, we have no plan.” We get to sit and wonder, and that’s pretty fun when you have the resources, but it’s super not fun if you’re being run over by the machines of extractivism and capitalism.

Yeah, I totally see that. As soon as I saw it, I started to get really bored of work in my field because I realized it was all ending with the soaring refusals to spell out the future. So, what I have discovered since is, I think, really powerful, which I do want to kind of take account of and recognize, which is that a lot of that kind of resistance is necessary. Right. We do have to take stuff apart. And that’s intellectually exciting and has some urgent purposes and I’ve learned a lot from it. But with the idea that, therefore, we should do nothing, I see it as both a humanistic problem across the humanities and a problem more broadly on the left of not wanting power. Because once you have power, you start to make choices that have consequences. Some of those consequences are not so great. But if you don’t take power, you get run over by the right, which is not worried about having power. They’re delighted to take power. Left pessimism, which is that kind of acceleration on the one hand and pessimism on the other hand, says “there’s nothing worth doing. We don’t have enough power to be able to stop capitalist extraction.” There’s a book that just came out this past year by Nathan Hensley in my field called Action Without Hope. He really says something like “all attempts to act in the face of climate change will simply be fed into the machine of capitalism.”

That sense that there’s no outside, there’s no position you could take that would be a genuine resistance. He ends up talking about typographical errors in 19th century poetry as the site of resistance. To me, that now really feels wrong, like it’s really in cahoots with the “don’t do anything, don’t stop anything.” I guess I have two further thoughts and apologies for going on and on, but it’s the Frankfurt School in the 1950s and 60s who I feel like they have the tightest hold on literary studies right now. It’s that notion that there really is this mass culture. It’s all about standardization and it’s all about instrumentality. So, it’s about taking every corner of your life; your entertainment, your sexuality, and putting that to some kind of use for a capitalist machine. To the extent that that was true in the 50s, and I’m not sure it was ever really true, I still have my Birmingham side, which is like “no, puppet culture also calls on people’s actual desires, their actual fears and longings and it may channel them in certain ways that are ideological, but there’s also something else in there, in a more dialectical way, that is giving us real pleasure for real reasons.” So, I’m a little doubtful about the original hypothesis, but I certainly think that that version of culture doesn’t hold anymore.

Our cultural platforms are so fragmented, and people are getting lots of different kinds of elements. They’re not getting one standardized version of culture at all. It hasn’t been better. I mean, I think in some ways a standardized culture was, you know, at least we talked to each other in some way. Now we’ve got this incredibly fractured environment and the accelerationists, I’m sure, are very happy about that, but I’m less so. But it’s hard to say, like, why are we still behaving as though culture is just one big centrist, normalizing framework when it just isn’t anymore? So that’s one problem with that version of both the left and of the humanities. The other one is, do we really think we have zero power? What tradition is that from? For Adorno, it really was like “thinking is the thing that has the most power.” Open thinking is what he calls it, and it’s not thinking towards instrumental ends. He was very critical of the 60s radicals because he was like, “oh, they’re just instrumentalizing, like everybody else, you know, putting action before thought.”

That’s okay, but I don’t think we live in a culture which prioritizes political action at all. I don’t think that’s the dominant culture of our movement. I think, if anything, you get involved in any issue to the just mildest center left all the way to the far left, and you will be vilified, you’ll be locked up, you will be doubted. That includes by other people on the left and so it’s not like we have this mass culture of everybody in the streets. We have a mass culture of everybody on their screens, which is a very different story.

Scott Ferguson

Yeah. It creates a vacuum of sorts that stimulates desire for action or what looks like action. That’s what Trumpism is giving us. Even as a pathological liar for whom every accusation is a confession, at least he’s shaking things up and doing things. Greenland is ours. It’s Gulf of America. We’re going to capture you in a van wearing masks. We’re doing stuff. I think those two things work together in unfortunate ways.

Caroline Levine

Absolutely. Yeah. That’s a very sobering point. Somebody just recently, I can’t remember who, was using the word sclerotic to describe democratic institutions. So, I guess that’s right. Like they get so crammed and stuck in ways that don’t do anything. That version of action is one of the reasons we’ve got these openings to authoritarianism right now. There is another version of action which the Marxist tradition knows a lot about. That is how you gather working people together to resist. There are a lot of people skeptical of that version of action, but I think we’re studying when that works and when it doesn’t and what forms in particular allow that kind of work to happen.

Rather than deciding from the outset that it’s not possible or if people are gathered, then somehow they will be constrained in a way – that’s a sort of libertarian leftist version. We’ve had these horizontalist movements in the last 20 or 30 years that have celebrated the idea that everybody belongs in every movement, and there’s no leadership and there’s no hierarchy. There’s another place where I think not all hierarchies are bad. It might be helpful to have some “let’s work together on an issue that we can solve.” So again, a formal question as much as kind of question of power or the two together.

Scott Ferguson

I’d like you to talk about some of the very specific examples or case studies that you work through in the book. Your training is in 19th century literature and you offer us a rather defamiliarizing reading of the 19th century realist novel, which you point out is sort of paradoxical because you’re trying to get away from defamiliarization as an end in itself.

That’s cool. But you’re also not rejecting deep familiarization either, right? You’re just saying that’s not the end all be all. That’s not where you put the period. I want to invite you to share with our listeners who haven’t had a chance to engage with your book what your reading of the novel and literary conflict and closure could mean or could afford that’s beyond just a kind of repressive mechanism, or a cruel optimism, as it were, to make us just be happy about the crumbs that we get.

Caroline Levine

The form that I study or that all 19th century novel people study and hate the most, probably of any literary form that exists in the world, is the happy ending. 19th century novels are famous for their happy endings, and not all of them have happy endings, but most of them do. And most of those endings are kind of ideologically representative of a particular bourgeois culture. You’ve got marriage and the household and reproductions. You’ve got straight white people in the house with money and that is often the end the story right there.

Scott Ferguson

And other people have to be jettisoned and die along the way.

Caroline Levine

Yes, yes. Good point. Right. So, if you’ve read Jane Eyre, then the madwoman in the attic has to be expelled for Jane to get her happy ending. It’s often queer people and people of color and poor people who have to be kind of shoved out of the frame in order for that happy ending to happen. 19th century scholars have spent a lot of time showing how that ending works. I think it’s been very persuasive. There is one piece of it, however, these days, having done this work on form, I’m always looking for the other affordances. If we say this is containing and repressive we’re practicing the habit of deciding that a particular form has a particular politics. I’m always looking for the other politics that’s possible in that form. I thought about my own being drawn to the 19th century novel as a young person and probably everybody has some image that comes from the 19th century novel of urban poverty. You’ve got Oliver Twist: waif on the streets, right?

That gave us that image of the child who is not taken care of by anybody and has to make their way in the world. So, I started to track what I now call plots of precarity, that is, the stories of characters who don’t have reliable food, shelter, wages. There’s a lot of those in the 19th century, not just in English, but in French, German, Spanish, Japanese. There’s precarity written all over modern, 19th and 20th century fiction. What do the endings of those novels give us? They don’t always give us marriage. They don’t always give us ownership of a house or property. What they always give us is a future of predictable food, water and shelter. To think about popular culture as offering people something that they actually want, I started to think, “yeah, lots of people are precarious, now. Why wouldn’t they be hungering for an ending that shows an end to precarity?” Of course, for women, this is complicated because in the 19th century, the end of precarity comes from marrying somebody who has money. That’s your only guarantee of not starving if you’re from a certain class. You don’t have any other options for work or inheritance of your own. The marriage plot is actually about this kind of material predictability, which I think is a real desire and not simply an ideological duping of an audience.

I started to look at happy endings in lots of different cases. One of my favorite examples in doing research for the book is Stone Birch Blues, which is often considered the first trans novel, by Leslie Feinberg. There’s a trans character who has been kicked out of multiple homes, can’t find stable shelter, and in the final chapters they actually get an apartment. I am going to say “they,” as they don’t use any of the updated pronouns in the novel, which came out in 1993, I think, or something like that. But they decorate an apartment, they make food, then they go to a union rally or maybe it’s a gay lesbian rights rally. They say, “we got to stick together because we have to make homes for each other.” So, it’s like the domestic plot, but writ large as, “let’s make homes for everybody.” Let’s not reject the domestic plot. Let’s think about how everybody should have access to that.

Scott Ferguson

Yeah. That’s great. And then you also carry this forward to a more contemporary Pulitzer Prize winning work of seeming nonfiction. But you track this form, this kind of realist form of the precarious plot and the potential happy ending to this work, Evicted. Can you talk about that twist in this tale?

Caroline Levine

Yes. Yes, I’d love to. It has actually been part of my work for a long time to move between aesthetic and nonaesthetic objects. Narrative, for example, is a form that you see in the novel storytelling, but you also see it in the court of law, and you see it in the doctor’s office, and you see it in gossip.

Scott Ferguson

What’s so cool about your approach is that it’s not base and superstructure. There’s not a real world that has real narratives and then there’s fakey secondary stories that are formal and that have to reflect or resist. You don’t flatten the difference between a nonfiction book and a 19th century realist novel and a closing argument in a court of law, but you also don’t fall into the standard ways of prioritizing one over the other as more real or more causally prior or something like that. Anyway, back to you.

Caroline Levine

I’m so glad you like that, because that to me is one of my favorite things about the kind of formalism that I practice. I don’t have that many takers for that.

Scott Ferguson

I took it!

Caroline Levine

You took it. Thank you for taking it. To use another literary and also Marxist term, and I’ve learned a lot from Anna Kornbluh, who is another deeply Marxist thinker on the left who’s interested in form. Every access to the world that we have is mediated by forms. Right. So, to say some are fictional and some are nonfictional is true. But if both use narrative, then thinking about how narrative works to allow us to see certain things about that world and not to see other things about that world seems to me just as interesting – both factual and fictional way of understanding what we’re understanding about the world.

Matthew Desmond Desmond’s Evicted. I think I read it just because it was being widely praised and I wanted to learn more about housing. I don’t know how many pages in – 30 pages in – I was like, “oh, my God, this guy must have read a gazillion 19th century novels.” This is one of the reasons this is such a great book, he has lots of tactics from the realist novel that really work to evoke precarity and particularly housing precarity. He tracks 8 or 10 renters in Milwaukee who are real people. He spent lots and lots and lots of hours with them. You start to really identify as a reader with these people who are doing their best and then the unfairness hits them and they’re out on the street again and it gives you this incredible punch partly because of the ways he narrates those experiences. I do some readings of the novelistic elements of it. But I was really struck by his two endings.

So, one of his endings is one of the most heartbreaking characters in the whole work, who is an African American mother of two who’s been evicted multiple times, and each time she’s evicted it gets harder to rent the next place. Her two sons are these wonderful, loving kids who probably don’t have a lot of hope for a better life. But in the last scene that Desmond narrates, the mother is saying, “I could just imagine you building a house for me, you sons, and all of us living together and laughing together.” It is like the end of a 19th century novel. It’s the home built by the children who are going to carry on the moral tradition of the mother, and she is just somebody who’s good and gets caught up in this terrible system. You have this ghost of the happy ending because she’s not going to get it and that’s tragic. Then you have a long, kind of epilogue where Desmond sets out policy prescriptions for housing vouchers and how we could, in fact, institute a system that would allow the characters we’ve come to love in the rest of the text to have stable homes into the future.

One of the problems with the 19th century novel, which I think novelists were pretty aware of, was that they could only follow one character. If you look at the end of Oliver Twist, he ends up happy but all the other workhouse kids have crappy futures. Oliver kind of says, “I wish I could save them all, you know?” The novel doesn’t know how to do that. It doesn’t know how to scale up, but policy prescriptions from a sociologist like Matthew Desmond does know how to scale up, he does know how to design a form that could create that. To me, that was this beautiful move between literary narrative forms and social forms for progressive ends.

Scott Ferguson

Thank you.

William Saas

What do you feel like the most common and maybe also the best or most compelling line of criticism or response to your work has been.

Caroline Levine

Yeah. I think you’ve hinted at two of the ones that I take most seriously, that come most often, and one is: if you do set out to remake the world for the better…

William Saas

Even modestly.

Caroline Levine

Even modestly, right, and maybe especially modestly. Let’s say you’re able to get a labor union going in your workplace or you’re able to redistribute labor, as I did as a department chair, so that it was more equitable. These are small and, we would say, not structural changes. Does that actually feed the right by mollifying us? That’s the accelerationist argument. We won’t get real revolution until people are at their most desperate. I think there’s two problems with that case. One is that: I look at the history of Marxist thought, and there’s multiple strains, but back in the Communist Manifesto, Marx says, “let’s go for things like free education for children as a way to build the left.” Large groups of people are mobilized by particular, local things that they can make better.

Rosa Luxemburg picks that up. They have detractors, but they also have a robust history on the left. So, is that true or not true? Once people are drawn into a movement for change and they “win,” do they then go home and say, “okay, I did my work, and I can rest for the rest of my life?” What seems to me to be truer, according to the data, is once you get involved in something, and especially if you win, you’re more likely to get involved in the next thing. In my life as an activist, I notice that if you go on a college campus and you try to talk to people about a particular issue that’s coming up, the same people will be active in trans rights and immigrant rights and in academic freedom and in the AAUP and they’ll be fighting for divestment. It’s because they’re the people who think, “you take action,” it’s not because taking action makes you passive. It’s because it seems like taking action actually helps to make you more active. I’ve been more persuaded by that side of things. it does seem to me true, again, in my own activist work, that the people who are committed activists often had something that pushed them into activism in the first place, and then they stay.

There’s actually really interesting work on the pro-life movement. I have also been criticized for using this because it’s a right-wing movement rather than a left-wing one. I think it’s interesting. What gets people involved in pro-life activism? A lot of people don’t have strong views on abortion before they get involved in pro-life activism. It’s all about the social world being welcoming. A neighbor says, “hey, come to a picnic,” or “come to this march with me” and you get involved, and then you get committed to the ideology. The social form comes first and then the intellectual form follows, or the political form follows. I think that is true for getting people involved in this kind of activism. I don’t think it’s a way of pacifying people. We tell way too few stories of victory and so people think activism doesn’t work when it does.

One of the stories I talk about with my students a lot is “ACT UP.” Talk about a movement that had far reaching consequences. Some of them, of course, are being rolled back right now, but many millions of lives were saved by ACT UP’s work in the 1990s. A lot of it was creative. A lot of it was in your face and some of it received backlash. Insurance exclusions for people with preexisting conditions affected just about every American. To say it failed or to forget about it or to say activism never works is to miss the ways in which these movements have long tails. We then take too much for granted, which is one of the reasons – to go back to your earlier point about deep familiarization – I do think we need to remember what we have that’s good and not only think about our society is completely immiserated and immiserating because there are good things. More access to health care is better than less. Yeah. It would be better if we didn’t have insurance companies at all. Yes, but this is better than what could be. So, you can hear my politics. I’m of the “it could be worse” persuasion in thinking about how we won these fights. We have a real aversion, and Lauren Berlant’s Cruel Optimism is a good example of this in literary studies, to ever telling a story about victory, because that is always said to be a way to somehow prop up the status quo.

I’m convinced it is exactly the opposite. The less you tell stories of victory, the less people want to get involved and the more powerless they feel, and therefore the more the right just rolls over us. So that’s one version of the story I’m working on right now. I’m trying to write about agency and to think about Marxist, post humanist and liberal theories of agency and what each of them has to offer and where each of them kind of comes up short. That’s one.

Back to your original point, though, which was a great question about the major critiques. The other is that I’m selling out the humanities because I’m turning towards these kind of instrumental plans and programs, like getting involved in action instead of sticking with the particular value of the aesthetic, which is open ended. By closing down that open endedness, I’m kind of saying, “let’s move over to the social sciences and away from the humanities.” I think I’m not doing that. I think the humanities resistance to action is not a necessary element of humanistic thinking, but it does seem to be for a lot of people. There are a lot of people who say, “once you cross that bridge from open ended thinking nuance and dissolution, you are in the realm of propping up the status quo.” This is especially true when you’re in the realm of doing that in the university, which right at this moment we need this kind of thinking more than ever.

I’ve been thinking a lot in regard to that. I don’t want to sell out the humanities. I do actually think the humanities aren’t doing what it could to be exciting to a lot of people. To my mind, one of the ways to draw people in is to say, “this could have an actual impact on making your life better, not just getting you to question things.” Though, I do believe in getting people to question things. But my own teaching has been really where I’ve been working this out the most. I teach, by choice, almost entirely non majors. I teach a lot of STEM and business students. Cornell is a very science-y place because we have an ad school and an engineering school, and arts and sciences is comparatively a small part of the university. I realize I teach much better if I go to the topics that the students are interested in and bring humanistic thinking and methods with me, then if I say, “you have to come to me.”

I haven’t taught Victorian poetry in like a dozen years because students don’t know what it is. They don’t know why they should care. They don’t. You know, those two words are not words students love: Victorian and poetry. What I have to do turns out to be what I want to do. It has become kind of a vocation for me. I think we’re better off not bemoaning the fact that students aren’t automatically coming to our classes and instead saying, “okay, you’re interested in renewable energies, how can humanistic thinking help you? Think again about that. Think about your position in relation to that.”

I just taught a fantastic poem by Juliana Spark called Dynamic Positioning, which is about the Deepwater Horizon oil spill, or BP’s oil spill in 2010. That’s a great poem. I had 30 stem majors working at that poem yesterday. I don’t think they were objecting at all. They were really using their brains and in a way that was enthusiastic. I don’t think I’m selling out the humanities. I think I’m doing the opposite. I’m trying to do the things that will keep us afloat and strong, and that has meant medical humanities, environmental humanities, thinking about humanities and business.

We have this famous hotel school at Cornell and the hotel students are basically business majors with a focus on the hospitality industry. I ran into somebody who worked in the hotel school working on undergraduate curriculum. I said, “so do the students talk about histories of hospitality. There’s so much interesting stuff in the Bible and philosophers who deal with hospitality.” She said, “they don’t even get a definition of the term.” So, I asked all my colleagues, some of whom work on hospitality, “would you like to teach a course to hotel majors?” They all said no. I was like, well, “I don’t know a lot about hospitality, but I sure find it interesting.”

Scott Ferguson

And it’s everywhere in stories!

Caroline Levine

It’s everywhere!

Immigration. Yes. Climate change, tourism…

Scott Ferguson

Motels.

Caroline Levine

Absolutely. We put so much energy as universities into orientations and welcoming people in. Hospitality is everywhere. What about the classroom and hospitality? It’s just so interesting. So, I developed a course and the hotel students who are in my other classes are often just checking off a box, like “I took a humanities course” and don’t seem like the most engaged students and often don’t get the best grades. In that class, they are 100% there. They want to think about every aspect of hospitality because they’re giving their lives to this, and they want to take it seriously. So, this is my message to the humanities, which I am told I’m selling out, but I’m like, “no, there’s 120 students in that class,” which is big by Cornell standards. Let’s meet them where they are.

Scott Ferguson

That’s great. I feel like you’re already going down this road, but I want to invite you to keep on walking. I don’t think it’s entirely fair to say that all recent left activism has been this way. But there is definitely, like, an impulse toward not only horizontalism, but also spontaneity. Your point is to say even spontaneity is a form and that might be contradictory in certain ways. There are also forms of organizing and you’re trying to give us a bit of a taxonomy of different kinds of organizing forms. So we’ve asked you about the realist novel, maybe now you can talk to us about some of the specific organizing forms with some examples drawn from your book or other research.

Caroline Levine

Absolutely. I’ve been really influenced by some very good political theorists thinking about horizontality. So, if we take Occupy Wall Street as an example, that was understood as a spontaneous kind of eruption. So, the two often go together. The idea being that everybody is welcome, there is no agenda, there’s no specific goal, everybody can speak and there’s no hierarchy in the organization. I think a lot of people found that heady and really exciting. I think there is something to what they sometimes call free figurative politics. You’re finally living in an equal world, and that feels amazing. I think a lot of people were actually transformed by Occupy Wall Street, and I don’t want to say it did nothing but the fact that it had no demands because it was open ended, deliberately meant that it was very hard to negotiate anything to say that there was a victory to do anything other than disband.

It still had a form, that is: Occupy Wall Street meant going to Zuccotti Park in downtown New York City, near Wall Street and hanging out there 24 hours a day. It was a spatial form. It was occupying a public space. I argue that we need temporal forms. We need goals especially if we think we can fight for them and win. Then we have the story of victory, which can build on itself. The civil rights movement is a great example of this, because it isn’t one movement. It’s a kind of cascade of movements. So, when Montgomery wins the bus boycott, that influences and excites people in lots of other communities to say, “well, we can win, let’s do that.” My model is different, but it imagines that a temporal form in the form of a goal is actually really important to movements. It’s important in part because it is the opposite of open-mindedness. So, if we constantly value open-endedness, we will miss the value of the organizing form of the goal, which keeps people going on a path which is often very hard and rocky.

Scott Ferguson

But this is another knotty word in the humanities: teleology. This is very Aristotelian, you know. In my college education in the 90s, that was one of the devils that I was introduced to. I’ve come around to appreciate teleology. It doesn’t always have to be terrible.

Caroline Levine

That’s right. That’s all I want to say. It doesn’t always have to be terrible. Sometimes it’s useful. We don’t just have to go pro or anti, right? We can see its possibilities. But it’s still true today that teleology is a word you can say as something to avoid without explanation or justification, which, that’s come to seem to me to be a case where whenever there’s a word like that, that’s the one I want to investigate, because that’s the word that’s carrying too much. That goes without saying. Teleology is one of the forms that I think is actually very useful for activist movements. I was very struck by the research, and I do draw in social science research. I also think there’s a lot of reasons to critique social science research. So, it’s not that I take it to be true always and forever, but I think it’s useful to study the forms that have worked and to think about why they have worked. Social scientists point out that people are most likely to get involved in activism during what they call a turning point moment in their lives. So, this is often when moving to a new place. Going to college is one of those moments. Retiring is another moment when people are like, “oh, I can take on new responsibilities now.”

You often see this in movements that very young people and retired people are often on the front lines, and those are the people who have more time and aren’t invested in the problem of keeping their jobs, for example. How do you reach people at their turning points? One of the things I worked on at Cornell was, and it’s had mixed responses and we’re still working on it, a little online module for all incoming first year students to think about Cornell and sustainability. There we get out some information that is otherwise hard to reach everybody with, like Cornell’s tap water is higher quality than bottled water and free. Maybe start out your time at Cornell thinking about the water.

In the module, we try to get them to look at all the climate organizations that are already going on at Cornell and to name three organizations that they might like to get involved in. We’re trying to get them to use that turning point moment to get involved in organizations that already exist. The other big problem for movements to be effective is scale. A small group of people can do a lot, but it’s a lot easier if you have a large group of people. I am always trying to get us in the humanities to think about scale because we’re very focused on particularity, the exception, the margins, and all of that is incredibly important to me, but not as a politics.

As a politics, I think we need to come together in ways that enact solidarity across movements. One thing in reading histories of activist movements that have worked, it seems to me that it very often hinges between preexisting organizations. You don’t just recruit one person at a time. You look at existing organizations, and you say, “can we bring this whole group into the project?” I think one of the problems we have in American universities is that students, when they write their application essays, have to prove leadership. Once they get to college, they think they have to start an organization or lead an organization. But actually, we just need a lot of foot soldiers. We just need a lot of people stuffing envelopes or whatever the contemporary equivalent of that is. If it’s not stuffing envelopes, it’s posting on social media or organizing town halls or whatever it is. We need a lot of people just doing the grunt work of showing up. What is it like to talk to people about how much time they have, what they’re good at, and how they can join existing organizations rather than having to invent something new? I’ve started to say in my activist recruitment, like, “if you have an hour a month to give, that’s valuable to any organization.” I think most people are really surprised because they think it’s an all or nothing proposition, “I have to drop all the things I’m doing.”

Most people have an hour a month. That feels manageable to a lot of people. So that’s a form, in the sense that I am trying to think about people’s busy lives. I have kids, I have a job, I have other responsibilities, how do I fit it in? Well, let’s think about what’s a reasonable amount of time and what kinds of things am I good at doing and like doing? Do I have to be the person who picks up the phone? No, I hate picking up the phone. I really don’t want to do that. Give me ten other jobs to do and I’ll do those for you. So, a lot of people think that activism is showing up at a march, but it isn’t. It doesn’t have to be that at all. It can be research and stuff like that. Getting people to understand how collective actions work is to get them to understand lots of different forms that aren’t just the visible ones that they see.

Scott Ferguson

I want to raise a question that I’m going to probably stumble around in posing, and it might not even be fully fair, because I don’t think, at least in the text by you that I’ve read, you’re actually taking this particular thing on, but it speaks to our position as sort of public intellectuals and activists of a kind. It seems like very often the examples that you’re giving about activist forms and working through in your work, for the most part, and you can correct me if I’m wrong, but for the most part, it seems like the social values driving the activism and the teleology of that activism are relatively self-evident. Now, there are exceptions like the pro-life activism.

They get people who are not even sure where they sit, but they throw a party and they’re really warm and inviting and you become convicted that that indeed this is my value. It’s more important than anything I’ve ever valued before, even though I didn’t value it last week. But for the most part, it seems like the challenge is: so many of us know, for example, the facts about climate change. So many of us know the realities of systemic racism. It’s just about getting off our butts and activating our labor power to coordinate and make change. That’s tremendous and wonderful. Our particular situation, however, is that we are actually trying to create a paradigm shift that is totally defamiliarizing.

We’re trying to say that money is a public utility. We’re trying to say that it’s not a zero-sum game, that it’s a public system that has been designed and can be designed different ways. It doesn’t have to be designed for private property and for private profit. It doesn’t have to be designed such that you rely on past revenues to finance the future. You can invent a crediting mechanism that is just full of futurity, it doesn’t matter what you earned in the past and that blows people’s minds. It scares people half to death. Often Marxists are freaked out about it. I’m not asking you to be our personal consultant and to solve our problem and it’s not like we don’t have answers. We’re trying our best. We’ve been at it for quite a while. It seems like that’s another challenge that’s a little trickier. It also braids the critical thinking and framing and rhetoric and the kinds of things we do really well in the humanities. It braids that in a different way with creating organizations and mobilizing people. I don’t know if you have thoughts about that particular problem.

Caroline Levine

It makes me realize why I love that project so much because it is so close to my heart. It’s a solution or set of solutions and ways of rethinking with practical consequences, that isn’t about necessarily smashing everything, but about using things in a much better way, which would have much better consequences. I absolutely love that. I did have the experience of telling my radical daughter about it, and she was like, “no, money is evil.” She’s a Marxist and I was like, “but wait, hold on a minute.” I see the climb and why it’s important. One thing that worries me a lot, and I spend time thinking about but not having any answers for is, “how many great projects are fairly complicated and so require attention and trust?” People are so bombarded with things that are scams and lies. What kind of context builds trust so that people can imagine actually getting involved or actually seeing how that works. So, Ben Wilson, who’s the first of the Money on the Left people I got to know, helped me to see how I could use that in my classroom.

I haven’t done it yet, but I’m planning to get real training on how to do that. That feels like, “okay, if we have a kind of thought experiment, experience, or experiential learning kind of model, I’ll get it and they’ll get it much better than if I just try to say it.” It has been one of my questions, because I always taught literature and it was really just about people in text. Then I realized, no, the real question is climate change, which I teach all the time. 96% of students at Cornell are worried about climate impacts. They are aware. How do they figure out how to act? That experiential learning, which is one of the things the quote unquote, neoliberal university loves, might actually be really useful. It doesn’t look like the traditional humanities, but it does look like learning in a way that I think people digest better and stays with people. I read these studies where you give an exam, and students retain something like 15% of it a year later. What are we doing if we’re just giving them content?

I love the idea of piloting this as a classroom project. But scaling it up is hard because you got to get your head around a lot of different pieces. I used to live in Madison, Wisconsin, and there was a joke among social scientists about the Madison effect that all sorts of scientific experiments worked in Madison, and that was partly like, “yeah, it’s a pretty progressive town and a lot of educated people.” The idea that you do an experiment is not in itself a weird thing, or that you think about things.

Scott Ferguson

And everybody is ready to play along.

Caroline Levine

Everybody’s willing to play along. How do you do that in places where people aren’t willing to play along? But again, reading about projects that work, one of my favorites that I’ve always wanted to try in the university is participatory budgeting, which works with really poor people with no political capital where they just have community and the experiences of the community. And it works. Designing it in some way that a small community can try it out and see how it works, that feels like the kind of model that could take off. I am just telling you what you guys think about all the time.

Scott Ferguson

We appreciate it. Just talking about it matters. Of course.

Caroline Levine

Yeah, right.

William Saas

I love that the language that you give us for it, affirmative instrumentality works really well for our project. Formalism for survival describes what we’re up to. Infrastructures for collective life is another. Money is a routine pathway and enclosure and you giving us different ways of talking about and reckoning with what we’re doing is super helpful.

Caroline Levine

I am so thrilled.

William Saas

Thank you.

Scott Ferguson

I am maybe working toward a conclusion. Who do you see as your fellow travelers? You named Anna Kornbluh. You name check her in the more recent book as having learned something from her. She’s been at the bleeding edge of this anti-disintegrative impulse that informs so much of humanities work. I’ve heard in the halls of academia that you’re part of the so-called New Formalism. I don’t know if that’s a thing. Do you wear that calling card? We’ve talked a lot about how you’re a lone ranger, and in many ways you are. But in other ways you’ve got community. So maybe just talk about that fellowship.

William Saas

I would throw into that mix Jody Dean as well, and work on the party as a kind of form.

01;10;47;07 – 01;11;24;05

Caroline Levine

I feel much less militant than Jodi Dean and Anna Kornbluh both. I am delighted for them to be thinking through these problems of collective forms and moving away from disintegration and so forth. I’ve had a lot of trouble being a full-blooded Marxist. I feel like I’m fully shaped by Marxism, and yet I end up not being in line with it. So, I do sometimes feel kind of intellectually lonely because Anna Kornbluth rightly says I have a really weird reading of Foucault in forms, and I do have a really weird reading of Foucault. I admitted that reading it. I think it’s a good reading of Foucault. Okay. That is, I learned from him about whole, rhythm, hierarchy and network. He’s got that mapped out in the middle of Discipline and Punish, as social forms that make us who we are. He then goes in a direction I don’t go in and neither does Anna, which is to say, all these forms converge to make one surveillance machine.

I think that’s not right, because that’s not how forms work. They continue to not go in sync with each other. But that middle part of Discipline and Punish still feels to me like the thing I learned maybe most from, and so there’s something a little weird about taking the middle of a Foucault book and splicing it on to Stuart Hall like that.

Scott Ferguson

But there’s also other parts of Foucault’s career where he’s Nietzsche in so many ways, and yes, I am definitely not a Nietzschean. But like in that sense of the generativity of world making I see that in Foucault. Maybe it’s not as developed in Discipline and Punish, and it’s developed in other places.

Caroline Levine

No, you’re absolutely right. Foucault was actually an activist. He worked in prison reform. There’s also that piece of Foucault. So, it’s just to say, who are the people putting these things together in multiple ways? Let me think of some of the people I really admire. There are many of them, but they’re motley. Rodrigo Nunes, who’s a political theorist from Brazil, wrote Neither Vertical nor Horizontal. He’s got a kind of theory of social organization that really works, I think. Political theory and cultural studies theory are not far apart. I feel like I move easily between political theorists and literary cultural studies theory people.

I keep going back to Stuart Hall. I really think there are whole portions of Hall’s thinking that are about the rise of an authoritarian right that I think we could really use now. Who else do I read and I’m just super excited? Teagan Broadway, who’s my close friend and Ben Wilson’s colleague at Suny Cortland, is, like me, a formalist who thinks across and between social forms and cultural forms. She’s been working on the question of the small group. She’s got four or five forms that she says, “we’ve thought of the nuclear family as the only kind of small group. There’s that and the nation and then there’s a big space in between.” What about the squad or the committee? These are smaller social forms that are also queer forms, she argues, made use of by, for example, ACT UP. We could use these forms as the building blocks of making bigger and bigger movements, because there’s too much space between the nation state and the family or the small friend group. There’s a lot of room in there. So, she’s somebody I read with great enthusiasm.

I think a lot of left economic thinkers, like Aaron Benanav, have a lot of practical solutions for thinking about economic equality and how we could redistribute money. Those are very exciting to me, and I think of those as formalists, even though they would not call themselves formalists. I do think I’m still fighting with a lot of literary criticism. I don’t feel perfectly comfortable in my department or my field of Victorian studies. I love to talk to people about the materials that we have in common, but even in my department, I don’t feel like I’m teaching things that other people are teaching. I’m not teaching the ways that other people are teaching. We’re not sharing our work.

Scott Ferguson

Well, I have to say, I’m disappointed and sad to hear that from you, but I think that makes these kinds of connection or hinges really important because it’s part of maintaining and finding continuities, finding an enduring spirit that is shared across disparate realms, maybe across a bunch of lonely people. We actually have community beyond our immediate contexts.

Caroline Levine

Maybe this sounds simplistic, but I think the left is my community. That is to say, I always want to talk to leftists about everything, like strategy and theories power. How do you organize and where are you and why do you think that? That’s my intellectual community, and a very rich one. It’s not always an academic community and intellectually, it’s not even always an academic community. I’m learning things that are different from what I would learn just by being in the library.

William Saas

That might be a good place to leave it for now, but, I think, Scott and I would agree that we look forward to more conversation. I thank you for joining us on Money on the Left.

Caroline Levine

It has been such a pleasure. Thank you for having me.

* Thank you to Robert Rusch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

Money on the Left is proud to publish a remastered version of our third episode with Fadhel Kaboub, now with a new transcript and art. Kaboub is associate professor of economics at Denison and President of the Global Institute for Sustainable Prosperity. In our conversation, Kaboub outlines a new critical approach to postcolonial political economy, arguing that re-gaining fiscal agency is a crucial next step for postcolonial nations hoping to achieve social, economic, and environmental justice. We talk specifically and at length about the CFA franc currency union, a system with violent colonial roots that continues to constrain the economic and political agency of its member states in West and Central Africa.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

Fadhel Kaboub, welcome to Money on the Left.

Fadhel Kaboub

Thank you. Thanks for having me.

Scott Ferguson

So I was wondering if we could start by having you tell us about your personal background and also your intellectual training.

Fadhel Kaboub

For my personal background, I grew up in the Middle East, in Saudi Arabia, in Tunisia. I did most of my higher education in Tunisia, and moved to the US for grad school. I went to the University of Missouri in Kansas City, where I did my master’s and PhD. The timing is relevant here. I started in January 2000, which was about six months after the Center for Full Employment and Price Stability was inaugurated in Kansas City.

This was the research center that was directed by Matt Forstater with the research team, including Randi Ray, Stephanie Kelton, Povlina Chernova, and then later on, Fred Lee joined the economics department, and it was just becoming a hub of post Keynesian and institutional economics. It was just a wonderful place to be at in terms of grad school, summer programs and just intellectual development. After my PhD, I went into teaching. Even before finishing my dissertation, I was teaching a little bit in Kansas City, which was a great experience. But then eventually, started teaching full time tenure track at Drew University in New Jersey and then moved back here to Denison University in 2008 on a tenure track and have been here since then — almost ten years now.

About four years ago, Matt Forstater and myself had the opportunity to launch the Binzagr Institute for Sustainable Prosperity, which is a public policy think tank, an independent think tank based here in the US. From the beginning, we wanted to make sure that it’s an international organization in terms of our coverage. We wanted it to be “not your traditional academic think tank” that publishes papers primarily for academics.

We wanted this to be solutions oriented and accessible to the media, accessible to grassroots organizations, and accessible to policymakers. We still do publish academic papers, but we’re trying our best to move into policymaking and policy communication with the general public and with the media and with grassroots organizations. Also, from the beginning, we wanted this not to be purely an economic policy institute.

We wanted this to be an interdisciplinary organization, because we do recognize that the biggest problems that we face as a society are complex, multifaceted issues and require multi-pronged solutions and economics by itself just doesn’t have enough breadth and capacity to deal with these issues. For example, when you think about climate change, there’s obviously an economic dimension to it, there’s a political dimension, there’s an ethical dimension, there’s a scientific dimension to it. So you can’t just try to address it from an economic policy standpoint and expect good results. We wanted this to be an interdisciplinary institute, but also we wanted to have a solid foundation for what the focus of this institute would be.

Fadhel Kaboub

Because of our background in both Keynesian institutional economics and our interest in MMT, the job guarantee program was clearly going to be one of the central issues that we deal with because we do believe this is a policy framework that kind of challenges the mainstream of public policy, the mainstream of the profession, to rethink how we address social and economic problems.

We also wanted this to be an invitation to our friends in the environmental movements and social justice movements, who are progressive on every single aspect of their work except they fall in the trap of, “if we’re going to deal with climate change, how are we going to pay for it?” That’s where they fall into the traditional economic policy framework that says, “well, we need to tax the rich to do it, or tax pollution to do it, or the government is broken. We don’t have resources. So we can’t be as ambitious in our fight against climate change or fight against injustice or fight against whatever our social issue is.” In response, we wanted to connect with progressive lives and other disciplines and build bridges that allow other disciplines to be liberated and empowered by what MMT and the Job Guarantee framework has to offer.

That’s really the vision. During the last four years we’ve been building those bridges with people in the humanities, legal scholars, philosophers, political scientists and people from all kinds of different disciplines. It’s just the beginning. This is a long process, obviously, of undoing a lot of the damage that has been done in the economics discipline in academia in general, but especially in public policy.

Now, I get this question all the time, “like, are you really going to undo the neoliberal political economy with this institute?” The idea is, “yes,” but also it’s a recognition that we’re a few decades late and several hundred million dollars behind. We’re outnumbered and understaffed when it comes to this, but that’s what it takes.

It takes building a compelling narrative based on solid academic research and engaging with people at the public policy level, at the grassroots level. I truly believe that the way the neoliberal movement was able to dominate, starting in the 70s and 80s, is not because they won academic debates in journals or in conferences.

It’s because they were able to put together a political narrative that was compelling and hit a nerve when it came to the US public at the time in the 70s, especially in the US, and in the UK also. The Friedmans and Hayeks lost all the academic debates, but they won the political narrative. They had charismatic leaders who took it to the streets, so to speak. They had multi-million dollar-type of foundations behind them to push for the media and PR movement that shifted the culture. I believe that’s how we’re going to counter this. It’s not going to be just academics sending rejoinders to each other’s papers. We’ve done that. It’s just going to stay in those circles. I think this has to be taken to the public domain. If we’re going to build a movement, a social movement, it has to be accessible to the general public. It takes a lot of education, and it takes a lot of really engaged citizens who are looking for alternatives and willing to learn the alternative.

By “learning,” I don’t mean in the academic sense, I mean “learning” in the colloquial sense of the term that you are able to say what you believe in and articulate how it can work in nonacademic terms and get other people who are completely disconnected from the political sphere to be inspired and to believe in a different way of doing things and to vote accordingly and to act accordingly. That’s really that’s really the vision that that we have and we recognize it’s ambitious, but we’re really seeing bits and pieces of this happening. I’m optimistic. 

Scott Ferguson

As a follow up question, which takes us back to the beginning, I’d like to hear, if you don’t mind, a little bit more about growing up in the Middle East and Tunisia and Saudi Arabia and what your own process of politicization has been, and maybe when and where, and what that might bring to the Modern Money Project that’s different than what we get from other perspectives within that project.

Fadhel Kaboub

Thank you for the question. I’ve been reflecting on this for a few years now in terms of how my own thinking has been influenced by my upbringing. So, as I said, I grew up in Saudi Arabia and Tunisia. My mother’s side of the family are from Saudi Arabia and my father’s side of the family is from North Africa, Tunisia, and to some extent, Algeria. Thinking back on that experience, I really didn’t grow up with the very powerful, overwhelming sense of national identity. I knew it was there because I can see it in my cousins on both sides of the family: the flag and the national anthem and the love for the football team and all that.

I mean, I love the football teams. I like both, and I like Brazil and Argentina and other things. But there’s this thing that I noticed from the beginning that, “my goodness, people are crazy about the flag.” I never understood what it was, I just thought, “well, this is their team and they like it.” Growing up later, you realize that this was designed when you think about all the post-colonial states in Africa and the Middle East and other places, governments didn’t really have much of a legitimacy. It had to be earned.

It had to be created. In the case of Tunisia, for example, there was a national leader. The independence leader was a very charismatic person, but there were no precolonial national borders that were well defined to go back to. The border had to be created and confirmed and protected. Then the national identity in terms of language and religion and culture, because a lot of these places were pretty ethnically diverse. National identity was, in most post-colonial countries, created and enforced through music, through culture, through sports, and with the idea of what you would call here in the US, patriotism, or in other countries called nationalism.

There’s that negative connotation about nationalism, but to me it’s the same thing. I grew up not feeling sucked into that understanding of national identity. For me, it was, “this is a country, this is another country.” I never grew up with the sense that I will die for my country, because which country will you die for? Plus, I come from a family that’s also very international. It wasn’t like everybody on one side of the family was Saudi, and everybody on the other side of the family was Tunisian. We had, through intermarriage, people from Egypt and Palestine and Algeria and Morocco and Lebanon. It wasn’t like we had only 1 or 2 national identities that the family had to pledge allegiance to. It’s an unusual family to begin with. To me, that sort of came back to me later in my career, reflecting on and starting to really think about what national identity means and how powerful it can be in war and peace conflict in terms of dividing nations.

I take comfort in knowing that I experienced that at an early age and sort of began to reflect on it throughout my life and now I understand how powerful those ideas can be. I can understand when I hear or see people who feel very strongly about a flag or their military or the nation because I know it’s nothing personal. It’s just, you’re born into it and you’re brainwashed into it, and to some extent, there is nothing wrong with that. The only part that is is when it comes to “it’s us against them,” and it begins to divide people because of the difference of their religion or their color and things like that. A healthy dose of patriotism is reasonable. I’m not against that. Loving a football team is great and loving the national anthem is great, but when it turns you against other people, it becomes problematic.

Maxximilian Seijo

It’s really interesting, when you talk about your experience of growing up in post-colonial Tunisia and Saudi Arabia and experiencing nationalism. What it makes me think of is the way that post-colonial theorists tend to begin from the presumption that you’ve already alluded to, that even though relations of explicit political colonization seem to end during the 19th and 20th centuries, there are unjust processes of economic, social, cultural or colonization that remain strong. They sort of frame this and focus on history in the politics of money and foreign denominated debt. I was wondering if we can circle that experience back to MMT. If you could help elucidate how MMT can imagine reframing this critical project in terms of political economy and then perhaps even a socio-cultural critique that you already started to tease out.

Fadhel Kaboub

Let me take this back to my undergraduate studies in Tunisia, where I studied economics. It’s a French, post-colonial education system. It’s not liberal arts. There is no general education. It’s four years of economics and nothing but economics, and a little bit of accounting and business and lots of math.

There isn’t really anything “political economy” per se. The closest we got to political economy was the History of Economic Thought class, which was the best thing I remember taking. It was a breath of fresh air in those four years. To link it back to your question, the reason why I wanted to go back to this is because during those four years of economics that I studied in Tunisia, we didn’t learn anything about the Tunisian economy.

This is not because it was neoclassical economics and neoclassical economics didn’t teach you anything about the real world. No, it wasn’t the case, actually. We had great teachers who are sort of post Keynesian-ish, institutionalist, kind of French influence, which was great, but this was strictly political. I learned so much about the Japanese economy, so much about the American economy, so much about the French economy. We even went to a couple of the professors after a class, “can we just have one lecture about the Tunisian economy or economic history?” We did take an economic history class, but it was about the Great Depression in the US and Japan and everything else. The professor said, “Leave me alone. What do you guys want? Go away.” It’s because they didn’t want to get into anything that will cross into politics. There were undercover police officers in the classrooms and on campus listening in because the history of protests in Tunisia was either the labor movement or the student movement or both converging together.

When you were going to police the population, you police the universities first. The campus where I studied was not like American campuses. This was a gated campus and guarded by the riot police. Actually, the riot police had one of their headquarters on campus, full gear. Those were the visible guys. The invisible ones were in the classroom. That’s why the professors didn’t even dare to talk about anything that has anything to do with the Tunisian economy. What I ended up learning about the Tunisian economy, I learned in Kansas City after I left. What I knew about the Tunisian economy was just observing and living in it and just trying to piece things together on your own or with a few friends, people you trusted to talk about political economy at the time.

What I ended up learning academically, intellectually was just after I moved to the US. I just started diving into books and archives and whatever I can find through interlibrary loans to read everything that there was to read about Tusinian economy. I ended up doing my dissertation on Tunisia. There’s an important link to your question here about the post-colonial thing. There’s been an intellectual movement in the last few years, both in Tunisia and other parts of Africa in particular, trying to essentially decolonize the curriculum, because the curriculum itself, in any discipline, was a Eurocentric curriculum. This is true in the US too, but especially in the Middle East because when you think of the history of any intellectual discipline, economics, for example, you read Schumpeter’s History of Economic Analysis, he talks about the great gap because first there was the Greeks and then the Romans, and there was nothing for 500 years. Then all of a sudden, the enlightenment happens. You read the history of science books, same thing.

There were the Greeks and the Romans, and then there was nothing and then all of a sudden science emerged in Europe. That’s taught in every single textbook, including in the Middle East and Latin America, India, and Africa. That’s how the Eurocentric narrative dominates and ends up colonizing the curriculum of supposed post-colonial, independent nations. You’re already put into an intellectual position of inferiority and economic position inferiority and a political position of inferiority and subordination, but you have your own flag and you have your own national anthem and you have your football team to celebrate. You see what I mean? That happens to serve the interest of the political leadership, because in most post-colonial nations, that political leadership didn’t really democratize the nation. They took over the exact same top down bureaucratic hierarchy, which was a dictatorial hierarchy created by the colonizers. It’s just now staffed by nationals who love the flag. You see what I mean? So, it was still a political and bureaucratic institutional structure of subordination, but now led by the charismatic independence movement leader, now turning into a dictator. I hope this answers your question in some sense, but that’s how I read it for several years now in terms of reflecting back, and talking to academics today and Tunisian former professors who understand that this is really part of the narrative. In addition to the fact that linguistic domination has been there from the beginning and constantly enforced by colonial interests.

Tunisia is an Arab country, but the main language of instruction academically is French. Over time, that came at the expense of losing the linguistic quality of the Arabic language in professional settings and in academic settings. When you lose a language, it’s really hard to undo that.

Maxximilian Seijo

I’d like to pick up on your point about the kind of organizational legacy of colonialism and subordination. In adopting the colonial governance scheme that was imposed on other nations in the global South, these countries, in large part to do with the intergovernmental organizations that made sure of this, kept to this idea that they still depended upon United States or France or countries across the globe from the global north for loans and debt so that they could finance their militaries and their often corrupt dictatorships. I was wondering if you could talk specifically about the way in which MMT reframes that discussion around foreign debt and monetary sovereignty.

Fadhel Kaboub

For the followers or the listeners of the podcast who are not very familiar with the MMT framework, I’ll just define the four basic bullet points that will be relevant to this conversation. From an MMT perspective, a country has full monetary sovereignty or full financial sovereignty. In a colloquial sense, full financial independence if the following four conditions apply. The first two conditions are pretty straightforward and easy for any country to do, the third and fourth are more problematic for post-colonial and developing countries in general.

The first condition is a country prints its own currency, or issues its own currency, and it’s the monopoly issuer of that currency. Most post-colonial governments, the first thing they do — not the first thing — but a couple of years after independence usually, is they start issuing a national currency and they start taxing the population in the national currency. That’s the first and second condition of monetary sovereignty and most countries can do that. The third condition is for a country to issue debt or issue bonds or treasuries that are only denominated in the national currency. That’s where a lot of developing countries start to lose their monetary sovereignty, because they start issuing both categories: bonds that are denominated in the national currency, but also bonds that are denominated in US dollars or Japanese yen or British pounds or any kind of foreign currency.

That part of their bond issuance becomes their external debt and it’s a real burden on those governments because it’s not something that they can finance internally. It means that you have to somehow generate export revenues in excess of what you would need to pay for your imports in order to be able to pay the debt, service the debt, and pay principal and interest.

That relates to the fourth condition, which is the fixed exchange rate policy that a lot of developing countries use. So, in order to have full monetary sovereignty, you want a flexible exchange rate. In other words, you don’t want to stand ready with excess reserves of dollars or euros or pounds to defend a particular exchange rate. That happens because the third condition is often violated. Meaning, if countries have a lot of external debt and have a lot of pressure on their exchange rate to devalue, that becomes a very politically and socially sensitive issue. If a small country faces a devaluation of their currency and they need to import food or fuel or energy or medicine or whatever necessities, it means with the devalued currency, all of those things now will cost more.

They’ll be importing inflation; food inflation, energy inflation and medical expenses inflation. That turns into social unrest in many cases. That’s why a lot of these developing countries end up borrowing even more every year in order to defend a fixed exchange rate level, which would prevent that inflationary pressure from actually turning into political and social unrest.

To me, that’s a very important starting point and that’s really the important lens that MMT has offered, to see with clarity why the issue of debt is problematic. Before the MMT lens, people knew that debt was an issue, but there was a confusion or conflation of the national debt as a domestic currency denominated debt versus external debt denominated in foreign currencies.

I think MMT tells us that the portion of the debt that’s done denominated in the national currency can always be managed, and there are ways of dealing with it. But the external portion is what really puts pressure on countries and that’s, personally, what led me into researching the root causes of the external debt and looking into potential solutions to address those root causes. Everything else we’ve seen in the last 30 or 40 years is really Band-Aid solutions, it’s really just rescheduling, stretching out the debt payments or getting more external debt and kind of feeding into the same problem that’s just been compounding over the years.

Scott Ferguson

So can you walk us through what it might look like for a country that is heavily indebted, has a weak productive infrastructure, is not, as you say, sovereign in food and or energy. What might be done in a situation as dire as that?

Fadhel Kaboub

First, I’ll tell you what is being done and how things got worse, starting with the post-colonial era and then we can talk about how to get out of it. Going back to the early post-colonial era, you have to recognize that the economic infrastructure of most of these countries was built up because colonialism lasted for decades, or over a couple of centuries in some cases. So, during that time, there was infrastructure built and there was a process of economic development and economic activity happening, which a lot of people confuse with economic development in the purest sense of the term. But, when you look carefully at what kind of infrastructure and what kind of economic development was done, you realize that it was very extractive.

Any kind of infrastructure that was built was purely for the purpose of extraction of wealth and extraction of resources. For example, Tunisia’s is a very interesting case, and you can look at the map of most African countries and post-colonial countries. Just look at the map of the railroads, the map of the roads, and then identify where the major mines are, where the major resources are and where the ports are built. It’s just direct straight lines from the mining town, straight through the rest of the country to the ports. The railroads are also built like that. The roads are built like that. So Tunisia, for example, you find a lot of east-west roads and east-west railroads, but nothing going north-south because there is no reason for people to go north-south. Once you’re independent as a country, you’re not going to sit down with the rest of the population and say, “okay, so this was a big mess, this colonialism. Let’s now start over again and let’s scrap all of the infrastructure and build it the way we really want it to be built.” It wasn’t like that.

Day one after independence, you continue doing the exact same thing you did before independence. You continue digging the same mines, loading on the same railroads to the same ports, and shipping them to the same customers in France or in Italy and other places. The post-colonial economic infrastructure continued to be built according to the colonial economic infrastructure.

It was a continuation of it. It wasn’t a rupture from the old economic system, and it continued to enrich the same socioeconomic classes and the same vested interests to this day. It was always extractive, always serving the elite, always serving the interest of the former colonial interests. The question today is, you look at the accumulation of trade deficits and external debt because we were told, “well, you know, your economy is mostly extraction of resources and agriculture. You should diversify and you should invest in manufacturing and industrialization.” You try to industrialize and there’s a huge technological gap. So, what do you do? You go through an early phase of sort of import substitution industrialization in the 1950s and 60s. Basically, most developing countries did that under protectionism, which is protection from foreign competition.

But then, ten years later, you’re told “That’s it. Your infant industry is not infant anymore. So now you should move into export led growth. Good luck exporting.” When you move into export-led growth in the 1970s, one of the first things you notice with every single country that went through this phase is that the trade deficit explodes. You would think, if we were going into an export oriented mode, we should be thriving through exports. It turns out you end up importing even more, because your economy is not highly industrialized, you end up importing all the intermediate goods and all the technology and all the input that goes into your assembly line’s basic manufacturing system.

So you’re importing high value added content and you’re exporting low value added content. You’re just adding the kind of very basic assembly line skills to export a finished product. If you’re importing more than what you’re exporting, your trade deficit is exploding, how do you finance this trade deficit now that it’s putting pressure on your exchange rate and it’s going to turn into food riots and fuel riots and all kinds of instability? You borrow.

That’s where the external debt comes in. You borrow based on the idea that when you grow even faster in the next decades, you’ll be able to pay it off. It just never happens because you’re never industrialized enough to compete internationally. This whole era of opening up to free trade and globalization has been a massive trap for developing countries that actually led to even more loss of financial sovereignty over time, directly after independence. The way to undo this or to regain or reclaim monetary sovereignty is to look at the specific cases. There’s no cookie cutter approach to this. Every country has its own institutional specificities and needs. So you look at what is causing the external debt, what is really driving it?

Is it food imports? Is it energy imports? Typically, it’s both for most countries, with the exception of oil exporting countries. The third category is typically what I described as low value added content of exports relative to the high value added content of your imports. So, if you’re going to reclaim your food sovereignty so you don’t have to borrow as much to buy food from abroad, then the only way out is investment and sustainable domestic agricultural policy.

This is something that the West recognized from the beginning. This is not something that I discovered or people discovered in the last few years. If you go back to the free trade negotiations, the GATT (General Agreement on Tariffs and Trade) and other trade negotiations in the 50s and 60s and 70s, and to this day, the West will always negotiate free trade in everything but arms and farms.

No weapons and no food, because that’s national security for the West. It’s not just national security, because you need food during wartime. It’s because you lose your sovereignty. You lose part of your sovereignty if you’re dependent on other countries for your national security, for your food security. I’ve known this for a long time, but MMT really put a new light on this particular issue.

You find the European Union and the United States putting really impossible conditions in these trade negotiations, making it impossible for developing countries to export food.In the case of Europe, a lot of the former colonizers were dependent on food imports from North Africa and other parts of the world. That wasn’t going to be fun, economically speaking, after independence, because now you depend on these newly independent nations for your food supply. CAP, which is the Common Agricultural Policy that the EU put in place, was virtually a ban on food imports and also a massive subsidy for European farmers to build up capacity and depend less and less on imported food.

That ends up killing agriculture in a lot of developing countries. When you kill agriculture in developing countries, you’re forcing people to move out of rural areas into urban areas, which was pretty convenient because the cheap labor from manufacturing assembly line jobs was waiting for them, because that was the era of export-led growth. Developing countries become the tail end of the supply chain in the global supply chain system, because they’re just the assembly line for all the high value added content that’s been produced through the rest of the supply chain. It happens to be convenient because it creates a little bit of jobs in developing countries, but never enough to truly industrialize those countries or truly develop those countries or bring prosperity. I hope this clarifies the links between Europe and former colonies in Africa.

Scott Ferguson

It does. Can you talk about some of the dangers of potential inflationary pressures? I know in your own work you stress a strong political movement, but also, sometimes a very careful and strategic economic development approach.

Fadhel Kaboub

Yeah. The strategic economic development approach to reclaim monetary sovereignty is renewable energy production, because that’s another major component of the external debt, sustainable food policy, because that’s the food imports problem that many developing countries have. Then the third one, which is a more difficult strategy and takes a long time, is investment in education and vocational training and technical skills, because if you want to industrialize and move up the ladder over time, so to speak, in value added content, the only way you’re going to attract manufacturing that produces higher value added content is if you have the infrastructure, in terms of electricity and telecommunication and transportation, but also the highly qualified labor that’s required to be plugged into the production of high value added content. That takes time. It takes a couple of generations to move up the ladder. Those are the three strategies that I always emphasize.

The question is, “well, can we make the transition overnight or in a decade?” To me, the answer is not that it’s not going to happen overnight or in a couple of years, but at least you have to start thinking about that direction, planning for that direction, and then shifting resources away from your old strategy into your new strategy. The current strategy, for example, is to subsidize food and food imports and to subsidize energy imports because you’re importing fossil fuels at globally determined prices, which can be inflated for your local consumers. If you don’t subsidize them, you’re going to have fuel riots. If you don’t subsidize imported food, you’re going to have food riots. So, governments typically subsidize and offer food and fuel and transportation at affordable prices locally.

The idea here is to shift some of the subsidies away from subsidizing fossil fuel and imported food into building more productive capacity of renewable energy production and sustainable food production and, over time, accelerate that shift and accelerate the development of those resources, because that’s the ultimate way of reclaiming energy sovereignty, food sovereignty and, as a result, monetary sovereignty.

Scott Ferguson

And as a result, political sovereignty.

Fadhel Kaboub

Absolutely, because you become less dependent, financially, on the outside world. As a result, you are more politically independent and, to be honest, that’s been recognized from the beginning by former colonizers as a threat. It was clear that having this neocolonial way of controlling former colonies through the financial aspect is way more effective than having troops on the ground, controlling the economy and policing the population, because it gives you the illusion of political independence. You have your flag and you have your football team and you have your territory, your military, and will even give you aid to help you reinforce your territorial sovereignty and police your population and everything. It feels like, “yeah, we have independence.” When it comes to economic reality, you’re not independent.

As a result, politically, you’re constantly under manipulation by the lenders and, typically, countries who are the former colonizers. That’s really the part that the average person doesn’t necessarily realize, but political elites know this and they know that they can use it to their advantage. They’re not really, in most cases, willing to take on the challenge of challenging the external forces, especially when it’s not a democratic system. They’re actually kept in power with the help of external forces. This was definitely the case with the Ben Ali regime. It wasn’t a secret or anything. If anything, during the days of the uprisings in 2010, 2011, the French Minister of the Interior was vacationing in Tunisia with the president’s family and called France to approve more shipments of tear gas for the police to handle the protesters.

The only reason why the tear gas didn’t make it to Tunisia, because workers at the airport were on strike in France. It had nothing to do with the political agreement between Tunisia and France. It was just a coincidence that the workers were on strike. When you travel through Paris and workers are on strike, you don’t get your luggage. So, the tear gas never made it.

Maxximilian Seijo

Something that’s been in the news that is really evocative of what you’re describing is the question of currency unions and the way they determine political and economic relations. However, a lot of attention has been paid to the eurozone crisis in Greece and Italy and Spain and the political unrest that is resulting from that.

I was wondering, though, if we could talk about a currency union — if you want to call it that — that gets a lot less attention, the CFA franc (Communauté Financière Africaine, or “African Financial Community”). If you could tell us about the history of it and the structure of the CFA franc today.

Fadhel Kaboub

The CFA franc is a currency used in Africa. Today, it is used by 14 countries, mostly former colonies of France. The name of the currency union changed over time. Mostly to make the name more politically correct, I guess. CFA used to stand for — trying to remember the French name — Colony Francis d’Afrique, which means the African Colonies of France. That’s what CFA used to stand for. It was clearly stating that these are the colonies, and they use the French franc, but this is the African version of the French franc. It’s controlled by the French government and by the French authorities. After independence, you can’t call these colonies anymore. At some point, it changed its name from Colony France’s d’Afrique to Communauté France’s d’Afrique, which was a little bit more politically correct. Today, it’s called Communauté Financière Africaine, which is the African financial community or union. It doesn’t carry the colonial name anymore, but it still operates under the exact same institutional setting, which is a currency union for 14 countries today.

It was created in 1945, right when a lot of the former French colonies were gaining independence, but they were not transitioning to a national currency. Most colonies during a few years after independence continued to use the same colonial currency. But in the case of the West African and Central African countries, the 14 countries that remain in that union today, they transitioned into the CFA franc. When you think of monetary policy and fiscal policy and exchange rate policy, it’s all determined by the French government, essentially. I mean, there is a committee and there’s a board and there’s some sort of bureaucratic structure to it that’s staffed by representatives from the African nations. Presumably, they get to make their own decisions and vote, but we all know that it’s nonsense, that it’s set up by the French government. 

I mean, Macron has been under fire in the last couple of years, especially during his visits to Africa, because there’s lots of protests against it. Students brought it up during the open Q&A session and he keeps brushing it off and saying, “well, no, but I’m not standing in the way of any country to leave the CFA if they want it,” or “we don’t control it.” If anything, he sees it as a way of cooperation and assistance to help stabilize the monetary system of the 14 countries in the union. In terms of our experience, knowing what monetary sovereignty means from an MMT perspective, you clearly understand that a group of countries that use a single currency that follows a particular set of monetary policy rules has a very limited fiscal space to engage in strategic economic development internally. Everybody’s familiar with the situation in Greece and Italy and Spain after the euro crisis, when you have a central bank like the ECB (European Central Bank) that refuses to allow any of their member countries to deal with the economic crisis and imposes austerity on those countries. You can think of the CFA franc system in exactly the same setting. 14 countries joined in a monetary union that have no way of issuing their own currency, and they peg their currency to the euro today. It used to be the French franc, which was pegged to the dollar indirectly, via the gold standard at the time.

You can understand how much economic development has been withheld and how much economic sovereignty has been withheld from these countries. Unfortunately, it took decades for this beginning of a movement to start building in the last few years. I think MMT has a lot to contribute in this regard. I’m looking forward to working with some of our new MMT-ish friends in this movement to build a coherent narrative or coherent counter argument to the CFA and to and to bring about an alternative.

I don’t think this is going to be done through the political elites. I think it has to be done through a social movement. I don’t really believe in political leaders, quote unquote. The political leaders are not leaders, they’re really followers when it comes to these things. It has to be a social movement that builds a coherent narrative, a coherent critique, and a coherent alternative. When you get to a critical mass of people, of the media, of academics who engage in a coherent way, that’s when political leaders really take action and become followers when it comes to this.

Scott Ferguson

Do you have a sense of the way that the eurozone currency project compounds the problems of the CFA franc?

Fadhel Kaboub 

If you’re economically dependent on France and the eurozone for your economic well-being and the main unit — the eurozone — is going through a crisis, you suffer the consequences. There’s a direct link to this, and ironically, this is really what woke up a lot of people to the reality of the connection between CFA and Europe. It was ironic because it wasn’t really in the MMT way. A lot of people were saying, “well, the gold reserves of the CFA countries are in France, and the French are probably using that to deal with their economic crisis,” but it did raise awareness about the issue. Obviously, to you and me understanding MMT, it’s really not about the gold. For a lot of people in these countries, they say, “well, we’re the largest producers of gold in the world. Where is our gold? It’s held in France. And why is our economy not doing so well?” But, it’s not because the gold is in France. It’s because the economy is producing raw materials and raw materials are very low value added content.

You don’t get to control the price of those raw materials in the global system. So, no matter how much you produce of your raw materials, even if you are the number one exporter of this particular commodity, you’re still not going to be reaping the benefits of it. You can think of this in terms of African countries or North African countries. I know this specifically for Tunisia, because Tunisia is one of the largest producers of olives in the world. Depending on the season, it’s number three, number four, or sometimes number two, but it doesn’t get any of the publicity of being an olive oil country. When you think of olive oil, it’s Italy, it’s Spain, or Greece, maybe Turkey, because these are the distributed brands that you pick up in the supermarket.

They’ve done a better job at controlling the global supply chains and branding their product. Most of the price that you pay is for the bottle, it is not for the olive oil, it’s for the PR that goes with it, the advertising that goes with it. It turns out that, for the average Tunisian farmer that’s producing the olives, they end up selling their entire year’s worth of olives a year in advance at a set price determined by an Italian company or a Spanish company. When you look at how much of the market, Spain and Italy, collectively control, they essentially have, last time I checked, 4 or 5 years worth of the global supply of olive oil in reserve. If you’re a small farmer and you don’t want to sell at a set price, they say “Keep it. Good luck. Good luck selling it because we have enough to supply the entire world for the next five years.” As a farmer, no matter how big you are, you can’t afford to negotiate. This is true for all kinds of farmers in Africa. 

When you think of chocolates, what’s the main input? Where does it come from? It doesn’t come from Switzerland. It comes from African farmers who don’t get to control the supply chain. They don’t get to control the price. They’re at the lowest end of the supply chain in terms of value added content. Who gets most of the benefits? It’s the companies that add that value added content, which is the pretty bottle, or the fancy designs, or the nice chocolate boxes that most customers in the West pay most of the price for, not for the actual raw material.

There’s a structural economic development problem in the CFA region in particular and yet the recognition of the economic problem came through the crisis in Europe and the thought that the gold was in France and that’s why things are messed up. It’s about beginning a conversation with colleagues and activists and journalists about what MMT has to offer about this. We’re shifting the narrative to the real structural problems, not just the fact that gold is stored in France.

Maxximilian Seijo

You know, talking about these global issues and the story you just described about the olive oil, it makes me wonder, if we’re going to reimagine what development looks like in a global economy, is there any role for an intergovernmental authority like the United Nations to play in the process of further decolonization?

Fadhel Kaboub

Yeah. There were several attempts to do this over the years. You can guess, it’s not the IMF (International Monetary Fund) and it’s not the World Bank. Good guess. These are technically agencies of the UN, it just happened to be the more politically and financially powerful organization of the UN. Within the UN, the organization that has done the most in this regard is UNCTAD, which is the UN Conference on Trade and Development. I’m probably biased here a little bit, but especially when Jan Kregel was in charge of writing the UNCTAD annual reports and organizing the UNCTAD conferences.

Kregel is one of the leading post Keynesian economists, and one of the most brilliant economists, period. Also, his work with the UN and his understanding of Keynes and MMT in the global financial system led him into what I described. A lot of the things that I’ve learned about economics and MMT, I’ve learned from Jan Kregel, obviously. You hear a lot of his thoughts from me. In anything that’s a bunch of nonsense, it’s probably my thinking, not his thinking. He and other economists at UNCTAD have probably done the most to rally developing countries to think differently and to act differently. 

But, if you ask Kregel, and I’m not going to speak for him here or put words in his mouth, you’ll hear a lot of stories about how much pressure UNCTAD as an organization gets from the West, from the US in particular or how much pressure representatives of developing countries who really begin to learn from the UNCTAD approach and attempt to act accordingly come under. You have to realize that the process of international development is not done in isolation from geopolitics. You’re at the UN and you’re negotiating economic development issues with other governments who also happen to be negotiating all kinds of other things with you and all kinds of other things with other allies that have nothing to do with you.

Somehow your vote in the Security Council matters on a particular issue. So, you get a lot of pressure if you attempt to align yourself with the other developing countries who happen to align themselves with Cuba, for example, then you’re with them, not with us, and you’ll suffer the consequences. You have to remember that you’re doing this in the context of massive external debt. You’re dealing with all kinds of problems, including maybe a potential civil war, including potential rebels, including potential unrest because of food prices going up. You’re extremely vulnerable to pressures from the West. If you attempt to gradually pull yourself out of the dominant structure that you’re suffering from, it takes time to build an economic development strategy and put it in place and during that time you need some sort of immunity from all kinds of other threats and interferences and pressures. That’s the reality of it. There is no such thing. That’s why a lot of economists and people who are thinking about the geopolitics of this say when when the Cold War ended it made this even more difficult, because for developing countries at the time, they could sort of fall in between the East and West and kind of leverage and play a little bit of the geopolitics between the Soviets in the Americans to get a little bit from both. But now that we live in a world that’s exclusively dominated by US interests and in US power, geopolitically, there is no negotiation. There is no running away from that kind of influence. The only way out of this is to start building South-South regional cooperation, economic development units and it’s very difficult politically and economically because you have to agree on a joint strategy. To get a number of countries to agree on a particular strategy is very difficult.

To then also get a group of countries that have complementary assets and resources to coordinate is difficult. At some point there was a little bit of hope that BRICS will emerge as that geopolitical alternative. BRICS, as in Brazil, Russia, India, China and South Africa — the “S” was added eventually as South Africa — as an alternative to the US geopolitical dominance. I don’t know how likely that is going to actually emerge because the BRICS itself as an organization has been divided over the last few years. In the absence of a block of countries that have geopolitical influence that can offer an economic alternative, it’s very hard for developing countries to shift strategy. There is the possibility that the Chinese model of economic development and China’s interest in the rest of the world, economically speaking at least now, may offer a little bit of relief.

But, you also have to take that with a grain of salt, because China also has its own economic and geopolitical interests that it’s trying to build up to being a superpower — a true superpower. You have to take anything that comes from the Chinese government also with a grain of salt. A fistful of salt, I should say.

Scott Ferguson

So you’ve done some consulting work with various governments and groups in, what we call, the Global South. Can you talk a little bit about those experiences, what you’ve learned and general lessons from that work?

Fadhel Kaboub

Yeah. So, just to clarify, when you say consulting, I don’t have any official affiliation or paid positions with any government in the Global South. By consulting, I mean people reach out and want to ask questions and have long conversations or presentations. So, yes, I’ve done that, but not as a paid consultant for any government.

Scott Ferguson

Understood. 

Fadhel Kaboub

Most of the interest is what we described today in this podcast, which is, we recognize that everything we’ve tried has failed. All of the stages of economic development that every textbook follows, including the most recent waves of privatizing state owned enterprises, leaning heavily on tourism, foreign direct investment, and export led growth.

The MMT lens and the sort of UNCTAD economic development analytical lens allows us to recognize that those are traps, because the more you accelerate your exports, the more you end up with imports of intermediate goods. You’re never going to catch up. The more you privatize state owned companies to generate dollars to pay some of your external debt, once you privatize the water company, you can’t reprivatize it the next year.

It’s just a one off, and then you lose that asset, and then you run out of assets to privatize. Of course, you also lose control over strategic resources in your own country. The idea of foreign direct investment is also a trap for most countries because you realize most foreign direct investment actually goes to rich countries, not to poor countries, because it’s looking for strong infrastructure, water, electricity, transportation, telecommunication.

Most developing countries don’t have that. Also, foreign direct investment is looking for skilled workers and highly qualified workers. Most of those happen to be in Canada and the Netherlands and other places, not in the poorest countries. This idea that foreign direct investment is going to solve all the development and poverty problems is a myth because we use China and India as examples of great places that attract foreign direct investment. But those are not your usual developing countries because they have massive infrastructure of telecommunication, transportation, everything else and they haven’t invested massively in producing the labor force that FDI is looking for. You look at most of the developing countries, it’s really assembly line jobs, the tail end of the supply chain at the lowest skill levels, the lowest value added levels. That’s not going to work. 

That’s the context within which a lot of progressive voices within those governments — or not necessarily progressive, just eclectic and pragmatic individuals — try to reach out for alternative ideas. We then start having conversations like the one I just had with you, and then we get into the geopolitical stuff. That’s when they realized this is going to be a problem because this is not just a technical solution. This is a political economy framework that has to be undone. It starts with a lot of education leading into a social movement and this is really where having these conversations with colleagues in Mexico and in Colombia, in other places comes in.

They say, “we don’t really have what you guys have,” for example, in the US, which is kind of the beginning of a movement. The groups like real progressives and all kinds of people in all kinds of walks of life. Not academics, not professors, people who are working 9 to 5 jobs but who are very passionate about public policy, who now understand the issue and can argue and offer a counter narrative and can stand in front of a senator or representative and say, “you can’t trick me into this because I know better, and I can argue back and I can even educate you on what the solutions might be.” So we’re at the beginning phase of building a popular movement of people who can actually argue back against the senator or representative. And they say, “we don’t really have that yet, and we don’t have that kind of social movement. We have a few academics and a few activists, but it’s not a movement yet.”

A lot of the conversation eventually shifts into working on multiple fronts. Beginning a conversation with academics, which is the most difficult one, to get academic economists to think differently. Then you start working with progressive policymakers who are not necessarily dogmatically wedded to neoliberal ideas or neoclassical ideas to start to show the potential of these ideas, and working on social media and working with popular media to popularize the ideas in the public domain and engage with the usual suspects; with labor unions, with activists, with climate justice activists and social justice activists to say, “look, we’re allies on this thing. We have a solution. This is a solution that empowers your organization and your message to build a united front against neoliberalism.” This is how you build a movement. As I said earlier, politicians are the last people to follow because you talk to them behind closed doors and they understand. They say, “Well, that makes sense, but I can’t say this publicly because I get attacked by all kinds of media and other political parties say, ‘you don’t know anything about inflation, you want to turn this into Zimbabwe,’” or whatever. If you’re the only one trying to counter that, it’s difficult. So they say, “get me a critical mass of people who endorse this.” In other words, “get me a social movement and I’ll come out and embrace it.” I always joke, I say, “Well, you know, if I have a social movement, we’ll vote you out of office. We don’t need you.” That’s the reality, but we can’t give up. 

As I said, you have to work on multiple fronts. We’re not saying that everybody has to come out and say, “I’m an MMT candidate, and I endorse this and that and the other.” Just start shifting the narrative and make common sense decisions and parliaments. When you’re being asked to look at foreign direct investment options, just be more selective. Go for the higher value added content. Try to negotiate a little bit better, when it comes to dedicating resources to subsidizing fossil fuels versus domestic renewable energy infrastructure, make the right decision, move away from fossil fuels no matter what the pressures are and think of strategies of building energy sovereignty and food sovereignty.

You don’t have to say this is MMT. You don’t have to say this is inspired by UNCTAD or anybody. This is just common sense. So, that’s where policymakers can be more effective just by making commonsense decisions that fit into the broader strategy that I described. But again, we have to work on multiple fronts. That’s why we were really fortunate to have the opportunity to create the Binzagr Institute, because we didn’t want this to be stuck in academic circles, because we’ve done that for a long time. As I said, we don’t think that’s how the world is going to change. It’s not going to change in academic journals that publish rejoinders. I like rejoinders, but they’re not going to change the world.

Scott Ferguson

Indeed. Well, this has been incredibly informative and engaging, Fadhel. Thank you so much for joining us on Money on the Left.

Fadhel Kaboub

It’s a pleasure. Thank you.

* Thank you to Robert Rusch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

We speak with Vijay Raghavan, Professor of Law at the Brooklyn Law School, about his recent article, “The Radical Potential of Consumer Financial Protection,” published in Boston College Law Review in April 2025. Raghavan builds on the work of constitutional money theorists, as well as his legal experience in the public sector. In particular, he argues that consumer financial protection is an essential and potentially radical response to the “finance franchise,” a predominantly anti-democratic process by which modern governments delegate the money creation process to private actors like banks. The consensus in contemporary left sociological and legal scholarship dismisses consumer financial protection as a rearguard effort to sustain neoliberal capitalism. Raghavan, by contrast, reconceptualizes consumer financial protection as a vital counterweight to legally structured domination in financial markets. By tracing the history of this struggle from the early 20th century to the present, Raghavan provides a powerful legal framework for today’s debtor movements, including the national campaigns to cancel student and medical debt. In doing so, Raghavan offers a forward-looking vision for how to build a durable consumer financial protection regime capable of reclaiming democratic authority in the post-Trump era.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

William Saas 

Vijay Raghavan, welcome to Money on the Left. 

Vijay Raghavan 

Thanks for having me. 

William Saas 

Just to get us started, could you tell us a little bit about your professional and personal background and how it ties in with your fabulous work that we’re going to be talking about on the consumer financial protection regime? 

Vijay Raghavan 

Yeah, sure. I’m happy to go as in-depth as you want me to, but I’m a lawyer by training. Although my license is no longer active, I graduated from law school in 2007. 

My early career was pretty conventional. I went to a big law firm to make money. I think I went to law school with some aspirations to do good, like, in a broad sense, but I ended up at a big law firm doing tax work. It was just as terrible as people say that kind of work is. I worked for really mean people for really long hours. I made what at the time seemed like a lot of money, but I didn’t really understand the work that I was doing. That might feel a little uncharitable. It’s funny, after I became an academic, I ended up contacting one of the former partners I used to work for who’s now in New York in a different firm, and he sort of copped to being a jerk when he was my boss and apologized for it. 

I was like, it’s been a decade. If I wanted to place my students there, I thought it was a good professional connection to rebuild or rehabilitate. It wasn’t hard to rehabilitate. He was like, “I’m so sorry. I probably chased you away.” Which, it’s all true. 

I was a tax associate at a big law firm. I guess the work was kind of intellectually stimulating, but I really didn’t understand what I was doing. I was definitely working on the tax aspects of transactions that were kind of adjacent to things that caused the world to collapse. 

In 2008, when Obama got elected, I — like other people — was really hopeful. I mean, his presidency was pretty disappointing, at least for the kind of work that I do, but at the time I was pretty hopeful. I wanted to be broadly involved in doing something good. The financial crisis was in full effect at that point. 

I think it started as early as April of 2006, but the world found out about it in September of 2008. I think those two things kind of pushed me to leave the firm, plus I didn’t like the work that I was doing. As someone who was a tax associated big law firm, trying to make the switch to something public oriented was a little bit hard. 

It’s hard to convince people that you have the skills or the desire to do anything. There were lots of people who were similarly situated who were not happy with the work that they were doing, saw something happening, wanted to do more, but didn’t really have a good case to make. I ended up getting this two-year fellowship at a legal aid organization in northern and central Illinois. It was called Prairie State Legal Services. It serves suburban, exurban and rural Illinois outside of Chicago. I was doing tax base legal aid work, mostly representing people who had tax debts to the IRS and then some people who were losing their home to property tax foreclosures. 

A lot of that work was kind of downstream of the financial crisis. People incurred tax debt as a result of other problems that they were facing that were more directly tied to the financial crisis. So, for example, maybe they lost their home, or they defaulted on debt and that debt was canceled. That canceled debt is treated as income under our tax code, which my last article was about that, and that creates tax consequences or one of the obligations they fell behind is on their tax obligations. I was representing these people from the IRS.  

The IRS is a really powerful creditor and has lots of remedies they can pursue that normal creditors can’t. I did that work for about two years. It was an interesting time to be doing that work. I saw things I didn’t understand at the time, but I definitely saw where things were headed or early signs of where things were headed. I would encounter lots of low-income white homeowners in rural America who had taken out predatory loans and lost their homes to foreclosures. The failure of our federal government to address their material concerns was pushing them to embrace a kind of reactionary politics. I definitely met people who were really angry that we were bailing out the banks and not going after companies like Ditech and Countrywide, these companies that had gone after them. People like Glenn Beck and the Tea Party really spoke to them.  

After doing that work for about two years, I think I wanted to be more involved with work that was at the center of post financial crisis reform. I ended up going to the Consumer Fraud Bureau of the Illinois Attorney General’s office to do consumer protection work. At the time, I didn’t really know what that was, to be perfectly honest, but it seemed closer to where I wanted to be. At the time, I joined the Illinois Attorney General’s office, there was a bunch of post financial crisis litigation that was about to get started or that was well underway that I got involved in. I also joined at a really weird time. I don’t know the extent to which you all have discussed the foreclosure crisis in the robo signing scandal on this show, but I was joining that office at the time when the terrible robo signing settlement was being negotiated, and that was a disillusioning way to start that kind of work. Then after that I ended up being involved in litigation against the rating agencies that our office was involved in. I ended up investigating all kinds of shady loans, payday lenders, title lenders, installment lenders, subprime auto lenders, contract sellers, which was this practice from the redlining era that had resurfaced after the financial crisis in the same segregated neighborhoods in big cities as the practice was originally peddled in the 1950s. So, yeah, it was fun, really rich and rewarding work. I did that for about eight years, and then for nine months I kind of ran a division, Illinois’s banking regulator, where I supervised the supervision and regulation of fringe financial lending in Illinois and credit unions and title insurers. Then I joined academia. 

William Saas 

So, you got chased out of the big bad law firm before the financial crisis fully hit. But when the financial crisis fully hit, you were already doing that kind of consumer protection or consumer advocacy sort of work. That’s amazing timing. 

Vijay Raghavan 

I left in February. I started in February 2009.  I was interviewing right around the time of the Lehman bankruptcy and the AIG (American International Group) bailout. 

William Saas 

Did you feel like you’d seen the writing on the wall or was it just “this is not the work for me.” 

Vijay Raghavan 

I mean, no, I really didn’t understand what was happening.  I recall one of the last things that I did at the law firm was being asked to look at the tax aspects of a collateralized debt obligation (CDO). I remember doing research. I was like, “what is this?” I was trying to wrap my head around it. Then I was out the door. I really didn’t know what I was doing. Although I’d say it was adjacent, I don’t know how close it was to what caused the world to implode. 

William Saas 

You know you’re in trouble when a tax lawyer can’t decipher the CDO. You say you got into academia. What was the last push into academia from the consumer protection work that you were doing? 

Vijay Raghavan 

You know, I’d been doing it for about a decade, and although I enjoyed the work, I was a bit disillusioned by not being able to push the bureaucratic levers of state government as fast as I wanted. There were some cases that I really wanted to launch that I wasn’t able to launch, or I wasn’t able to launch in the way that I wanted to launch them. When you’re working for the state government or for the federal government as an enforcement attorney — not as a defendant where you’re defending the state, instead you’re suing businesses — you’re often not on a tight timeline. You have time to develop cases and to develop ambitious legal theories. Sometimes you end up putting years into that work. The process of building that case is definitely very satisfying and you learn a lot. I spent years from 2014 to 2018 developing the case against a massive national subprime auto lender where we were doing lots of novel things like reverse engineering their credit scoring models to figure out how likely they thought people were going to default and tying that then to figuring out how to wedge that into legal frameworks. We got to take sworn statements from the heads of their decision science team but getting that case off the ground ended up being very difficult.  

Things like that pushed me to try to find something else to do. I’d always been interested in academia, and after doing this work for about a decade, I think I wanted some time to think about the work that I was doing. I wanted to try to understand what I was doing and what its value was, and I wanted to try to figure out why the reform efforts of the 2010s had largely failed to constrain debt markets.  I was unique.  With law schools there might have been a time, maybe 50 or 60 years ago, it was common for practitioners to become law professors. Today, the gap between legal academia and normal academia has more or less disappeared. The vast majority of people who get the job that I got are coming from PhD programs or fellowships. In fact, the year that I was hired, there’s this person who publishes statistics on entry level hiring every year. They do these Venn diagrams of where people come from and it is people from PhD programs, fellowships, and judicial clerkships. The Venn diagram for the year that I was hired, I was an outlier. There was one person outside of the Venn diagram and that was me. What happened was, I had been interested in academia, and we had retained Adam Levitin as an expert on the cases that we were doing. He’s a law professor from Georgetown who I read a lot. Adam sort of encouraged me to pursue this. He thought this was something that I could do. Yeah, that’s how I ended up here. 

Scott Ferguson 

Obviously, you have multiple influences in your work, but I’m wondering how you came to the legal paradigm around money that we tend to associate with scholars like Christine Desan, or adjacent to the law and political economy movement because for somebody who doesn’t necessarily know what they’re doing, it seems like you just get wrapped up in in dominant thoroughfares, in the same law and economics paradigm, which is intensely neoliberal and prioritizes the private market over governance and legal design. I’m always interested in people’s personal history, but also, beyond the personal aspect, thinking about institution building and the sociology of knowledge. How does someone like you making this move get rooted in this more critical and capacious paradigm? How did that happen for you? 

Vijay Raghavan 

Yeah, it’s a great question. I don’t totally know how it happened. Yeah. I don’t remember the exact steps, but I will say, when I became an academic, I was really interested in writing about the stuff that I did and trying to theorize it and then trying to figure out where I think I went wrong. I think for practitioners who become academics, they often are intervening in older conversations because they just are not up to date on what people are talking about. They’re like, “the conversations that people are having probably are the same conversations that people are having when I was in law school.” Those were all my touch points. In my first paper, I had an idea of why I think when things went wrong. My idea was, one of the reasons things went wrong was because consumer advocates, or people in my world, have a moral objection to indebtedness and to high-cost loans, but we don’t voice that objection in moral terms. Instead, we try to argue within conventional law and economics paradigm. We’re like, regulating consumer credit is justified because payday loans are inefficient as a result of various market failures like information asymmetries or cognitive bias or externalities. What I was doing in that paper was trying to argue that was really misguided, and it was misguided because background legal entitlements are sort of shaped like the coercive power that people have in market exchange. 

Scott Ferguson 

That’s a huge leap, right?  

 Vijay Raghavan 

It’s a huge leap. Right. In trying to figure out why I thought it was wrong, I ended up reading Hale. I don’t know how I got to Hale. I got to Hale and Barbara Fried. I was making this argument drawing on Robert Hale. Anyways, background legal entitlements shape the course of power people have in exchanges. 

If people don’t have a lot of coercive power as a result of a small safety net, then their capacity to negotiate good terms is going to be really diminished. In that context, it might be perfectly rational to take out a loan that has a 1,500% APR. It’s very hard to justify these interventions in private exchange on inefficiency grounds. That was me trying to like, scratch at there being something wrong with what we’re trying to do here, and it doesn’t even track with our own intuitions. That’s not what we think we’re doing. In doing that work, Luke Herrine was writing at the time. Before my academic career, I was reading a lot of people like Adam Levitin, and once I became an academic, I started reading a lot more of the LPE (The Law and Political Economy Project) crowd. Luke was a big inspiration, for sure. Definitely the last half decade, he’s probably been one of the most important consumer protection scholars. I don’t know how it happened. I started reading the LPE blog. We had a bunch of LPE folks on our faculty. Frank Pasquale was here at the time. Sabeel Rahman, who’s also at Cornell now, was here at the time or he wasn’t here, he was working either at Demos or with the Biden administration. Then we have Jocelyn Simonson, who’s an abolitionist and criminal law scholar, was here as well and very involved in LPE. I started reading LPE and that led me to Hale and Barbara Fried and then eventually that led me to Desan and Katharina Pistor. I think you had names like, and I might get pronounce his name wrong, Jamee… 

Scott Ferguson 

Moudud? 

Vijay Raghavan 

Yes. He was on the show, and I was listening to that episode the other day, and I think I have the same sort of intellectual trajectory just without the training in Marxist economics. I found all of the same people. Early on as I was trying to think through what went wrong, I discovered that there was this rich sociological literature and legal literature on why the reforms had failed, why the reforms in consumer financial protection had failed. Much of what I devoted my academic career or my academic writing since then, too, was trying to respond to some of the claims in that scholarship, drawing from people like Desan and Saule Omarova and Raul Carillo and folks like that. 

William Saas 

Often when we talk to folks about anything on this podcast, there’s a kind of a conversion story and it sounds like that didn’t necessarily happen. Did it sort of make intuitive sense? Was it surprising to encounter some of the arguments? I mean, you note in the article that we’re talking about, that Desan squarely turns the conventional story on its head, building on the work of others, of course. But did it seem, especially from your background, novel strange or intuitive? 

Vijay Raghavan 

When I read Hale for the first time, after being a lawyer for 13 years, Hale made sense to me. I was like, this is all correct, right? None of this is private exchange, the market exchange is downstream of law. It’s downstream of a lot of things, but law is my lens. Okay, market exchange is downstream of law. But then it was like, I need a thicker account of how law is shaping the kinds of transactions that I’m interested in. There’s some debate about whether there’s an LPE methodology and there’s lots of stuff that fits within the LPE umbrella, like legal realism. It’s big and broad, and it’ll take some time to figure out what it really was, and we need some distance from it.  

But, the parts of LPE scholarship that has definitely shaped my thinking and that I gravitate towards is the stuff that is neo-Halean. Taking that basic insight, that background legal entitlements shape exchange, and then trying to figure out what those background legal entitlements are to try to figure out how law shapes exchange in different areas of law. Once I came to Desan and then Omarova and Hockett and then Lev Menand and Morgan Ricks, they’re painting a really rich and thick picture about how the legal design of money shapes exchange and matters for the distribution of wealth. One of the core insights of that literature is that the legal design of money is upstream of exchange and that in our current system, in the American system and in most countries, we allocate this public responsibility of making money to private institutions. We rely on them to expand the money supply in this kind of franchise relationship. One of the ways they expand the money supply is through the extension of credit. This is also in David Graeber.  

I think I had read Graeber actually a decade before, but I didn’t really understand it. Once you’ve gone deep into the neochartalist stuff, Graeber makes a lot more sense. They were like, we’re expanding the money supply through extensions of credit. Once you’ve gotten there, it’s really not hard to go from there to thinking about recasting all of consumer financial protection. If private extensions of credit are not truly private, it’s just publicly accommodated private liability and that we are delegating this public function to private institutions to encourage them to expand the money supply. We are giving them all these benefits, like the capacity to charge people money and to ensure that they aren’t reckless, we regulate them. Then the interest rate that people pay on loans is not a risk adjusted rate of return, right? It’s just a tax. It’s just a tax for this public function and consumer financial protection is just one part of our larger legal and institutional framework. The best way to justify and rationalize it is as a check on anti-democratic and regressive nature of delegating this public function to private institutions. I was chasing it. I was like, I need to figure out a way to reconceptualize this. The money folks had done all that work. There was less work drawing connections between that scholarship and the work that I was doing. 

Scott Ferguson 

Now’s a great time, I think, to pivot to the focus of our conversation, which is your new article, “The Radical Potential of Consumer Financial Protection,” which came out in the Boston College Law Review sometime this year, 2025. I’d like us to work through the large moves that you make in this piece, beginning with your opening gambit, in which you reckon with a certain critical response to consumer financial protection movements, especially in the wake of the global financial crisis, which tend to characterize consumer financial protection as simply symptomatic of a neoliberal worldview and instead of really helping people and creating structural change. It’s just putting a Band-Aid on a wound that is only festering more. I’d like you to set this up. Tell us about how you came to this particular argument and who you’re arguing with and what your nuanced approach is bringing to the table. 

Vijay Raghavan 

Sure. I should just back up. When I say consumer financial protection, I’m kind of generally referring to the set of federal and state laws that set restrictions on consumer lending and the institutions that are charged with enforcing that. Some of them are public institutions like the Federal Trade Commission and the Consumer Financial Protection Bureau to the extent it still exists and then there’s state entities and then there’s private actors and then there’s debtor movements that are all part of that ecosystem.  

So, yeah. Who am I responding to? After the financial crisis, a lot of sociologists were writing about our credit infrastructure and the set of choices that we’d made in the 20th century that had led to the crisis in 2008. Greta Krippner calls that work the macro sociology of credit. There’s a lot of people who are writing in that space with people like Monica Prasad and Louis Hyman and Greta Krippner and Sarah Quinn. The basic argument that they were making is that we built all this public infrastructure during the New Deal to support the expansion of credit markets. Embedded within a lot of that public infrastructure was this progressive cross-subsidy where rich people were subsidizing through taxes affordable credit to lower income people. That affordable credit was then used to expand homeownership and consumption, and we know from that history that that expansion wasn’t perfect. It was progressive, but it was also racist. It was a progressive cross-subsidy, a flawed but a progressive cross-subsidy. And then what happened?  

What happens is this creates a bunch of path dependencies. As the state started to pull back and as we started to deregulate, it became easy to mute the effects and the material effects of that deregulation by expanding access to private credit and to encourage consumption. That’s the basic contours of the sociological argument. What happens is, some sociologists, but mainly legal scholars, start to look at the role of consumer protection and consumer advocacy in the story of creating all this public infrastructure to encourage consumption to homeownership via credit and then deregulating credit markets, shrinking the social safety net in a way that turns that progressive cross-subsidy into a regressive one. What role did consumer protection play in that process?  

The story that comes out of some of that scholarship is that consumer protection really functioned to legitimize these moves and to support the expansion of credit markets and contributed to the problems of indebtedness that people are facing today. The biggest name in the legal world, and definitely the most influential is Abbye Atkinson at Berkeley. Abbye Atkinson, across three really influential articles, makes a bunch of sharp and mostly correct observations about why credit is bad. The first paper was called “Rethinking Credit as a Social Provision.” In it, she’s like, credit as a kind of social provision is flawed because it’s it only works if you become richer in the time between when you take out the money and then you have to repay it and if you don’t become richer than you’re saddled with debt, and that debt can reinforce subordinating and dominating relationships. Credit can function as a means to commodify people’s marginalized status.  

Then another person who was writing here was, and I definitely should mention this, the late legal historian Anne Fleming, who sadly passed away in 2020. She was this really incredible historic legal scholar and historian of small dollar credit. I don’t think there’s another legal historian of small dollar credit and she really did a lot of groundbreaking work on things like the Truth and Lending Act and Unconscionability and has written this really incredible book about the history of small dollar lending regulation in New York City in the 20th century, called City of Debtors. The last article she published before she passed away was kind of making sort of similar moves. Credit is flawed as a form of social provision and that consumer advocates bear some responsibility for the situation that we found ourselves in.  

As a descriptive matter, I generally agreed with, and maybe even as a normative matter, a lot of the claims in that scholarship. I just didn’t think they had the story about consumer protection right. One, I think it wasn’t obvious to me that consumer protection always functions in a manner to underwrite a neoliberal expansion of credit markets to encase an existing distribution of wealth. Much of this work is responding to those scholars. I was trying to think of a way to reconceptualize consumer protection, what consumer financial protection is, to respond to some of those claims and to try to find ways to rearticulate what it’s doing and what the best case for it is.  

There are two places where I think that scholarship goes wrong. One, I don’t think they have a really thick account of what credit is. The money literature has a much thicker account of what credit is and what’s interesting is the money scholars were sort of writing around the same time. These two lines of scholarship were really not in conversation with one another. There was some overlap, but not much. One was arguing against credit regulation and the other was arguing for a richer articulation of the legal and institutional framework around money and banking, which would involve lots more regulation of the money supply, including publicizing aspects of that framework. One of the big moves of the paper was kind of trying to find a way to respond to that scholarship.  

The main way that I respond to that scholarship I derive from the money literature. I recast consumer financial protection as a downstream response to the anti-democratic and regressive costs of delegation. Once you recast it as a response to the choices that we’ve made in designing our monetary framework, then you can kind of think about the ways in which it’s been a productive countervailing force and what ways it’s been an unproductive countervailing force. Much of what the paper does is it sort of takes that reconceptualization and then applies it to look at different legal and institutional forms consumer financial protection took across the 20th and early 21st century and the problems that consumer financial protection was responding to in each of those eras. Also to try to surface ways in which consumer financial protection has worked as this productive countervailing force to the cost of delegation and the ways in which it’s worked as a more of an accommodation of this enterprise. 

Scott Ferguson 

I want to get into that history, and how you work through, if I recall, four different key moments and movements. But before we do so, I’d like to invite you to flesh out a little bit more what you mean by delegation. You brought it up in our introductory remarks, but I’d like to give you a chance to really explain it. Then, where does consumer financial protection fit into that realm and problem of delegation. 

Vijay Raghavan 

One of the key themes from Desan’s work is that the state creates demand for money through taxes. Early money was fully public, and it was issued directly by the state. I don’t know if I have my history fully right, but sometime around the 16th century, states started delegating this public function to private institutions, or to public-private institutions. In America, the arrangement we’ve settled on is a kind of public-private hybrid where we have a bank of banks, a federal reserve, and that bank then delegates expansion of the money supply, not exclusively, but primarily to financial institutions that are either regulated directly by the federal government as national banks or regulated indirectly by the federal government as state banks. Financial institutions expand the money supply in lots of different ways, but one of the primary ways they expand the money supply is through extending credit. That’s delegation. We’re delegating this public function to private institutions. In exchange for the privilege of delegation, these private financial institutions are really well compensated but they’re subject to oversight to prevent that enterprise from collapsing.  

Lev Manand writes a lot about the political economy of delegation. One of the things you get from his work is, we settled on delegation because there was lots of concern about a fully public system — you see some of this now with the concern about central bank digital currency — and granting one national public entity the exclusive authority to expand and contract the money supply. Maybe for other reasons we thought these private banks could do a better job of allocating money and expanding the money supply. I’m not arguing that this is descriptively accurate, but I think it reflects the original rationalizations that we thought about. They could do a better job of efficiently, in neoclassical terms, expanding the money supply. That’s why we settled on delegation. Much of the way to understand a lot of our institutional arrangements around money and banking is to constrain that anti-dumping choice to grant private institutions this privilege to expand the money supply and to curb the potential regressive nature of delegation where those expansions may privilege people who have resources already and not privilege people who don’t have resources because it’s more profitable to lend to wealthy people than it is to lend to poor people. One way to understand a lot of the public infrastructure we built is in response to some of the inherent tensions in the choice to delegate this public responsibility to private entities. 

Scott Ferguson 

Meanwhile, we’ve got a Constitution and both hard laws and soft ideologies — or hard ideologies — that restrict us from using or imagining sub federal governance structures as credit allocators. Even though they do all the time, we don’t even frame them as credit allocators. We just understand them as sort of recycling private money that already exists out there. To me, that’s a huge part of the delegation problem. If you’re delegating to private actors, but you still have strong public entities that can allocate credit at the local level, that might not be quite as asphyxiating as our current system. 

Vijay Raghavan 

Ultimately, in terms of where I’m at, I personally would prefer a system that’s much closer to something like a National Investment Authority or a public ledger or things like Saule Omarova has written about. A fully public system which could have sub federal entities and federal entities, a set of like state-based entities that are expanding the money supply and that are very democratically accountable and doing it in a way that it doesn’t track some fictitious market allocation, but tracks how we want money to be allocated and for what purposes we want it to be allocated for. This is a kind of a tangent, but it is kind of interesting now how one of the things that I think you see in these debates about stablecoins and crypto is maybe a public reckoning, or recognition that we do have this public-private hybrid and that banks are too connected to elite stakeholders. We need to delegate the delegation to these real private actors that are totally disconnected from the state. To the extent it happens, it will just compound the basic problems of delegation, not improve upon them in any way. So, yeah, that is my best account of delegation. 

Scott Ferguson 

In a sense, consumer financial protection is a reaction formation to delegation and its problems, but it’s not merely a sign of sickness or something. It’s potentially a countervailing force. Sometimes it aids and abets, and it’s a long complicated history and you’re making the case that history here is rich and multiform and that we need to sift through it, so to speak, in order to have a better theoretical account for the future of what consumer financial protection has been and could be. Is that fair to say? 

Vijay Raghavan 

Yeah, that’s definitely fair to say. A lot of the work that’s really critical of consumer financial protection was being written as we were rehabilitating this regulatory framework for consumer financial protection, which we did from about 2010 till November of 2024 and now we’re unwriting it. One of the things that I was trying to do in the piece is I was trying to work through the development of consumer financial protection as a response that took on these various legal and institutional forms. Try to work through that history to try to understand what we were really doing when we were reconstructing this regulatory framework. Was it just simply just a recapitulation to the failed reforms of the past or were we trying to resurrect something better and more hopeful?   

As you work through the development of consumer financial protection over the course of the 20th century and reconceptualize it as a response to the problems with delegation, you see that it has taken on these different legal and institutional forms at different times. Sometimes those forms have been productive, sometimes they haven’t. In the early 20th century, consumer financial protection emerges in response to the problem of low-income laborers who are taking out these really high-cost loans, like the early 20th century version of a payday loan. There was this movement of largely elite and wealthy white women who were driven by some charitable impulse to try to curb this practice because they thought that it was leading to pauperism and it was encouraging people to be burdens on the state, and taking away from the public fisc. Consumer financial protection is initially local and it’s a way to regulate these small lenders who are making loans to people who are shut out of the conventional banking system. Here, you see the cost of delegation and the way that this is working is, credit is scarce. These institutions that we’ve delegated this public function to are unwilling to lend to these people. They have to turn to these fringe lenders. Those fringe lenders are borrowing from major financial institutions and then they’re borrowing at low cost and lending out at high cost. That’s kind of the basic arbitrage that they engage in and that arbitrage was causing these laborers in big cities, like New York and Chicago, to become impoverished. 

That led to this early form of consumer protection that was driven by these bad anti-pauperist sentiments. It’s kind of like the rational charitable giving community. I forget what they’re called, Effective altruists. This is like the effective altruists. This is the proto-effective altruist community, and they give birth to consumer financial protection in the early 20th century. Then things really did shift in the 1930s and the 1940s during the New Deal. It’s like a really interesting and kind of understudied time. What happens there is, the focus shifts from these payday loans to credit selling, which was really pervasive at the time. What’s happening is you could go into retail stores, and you could buy goods and services on credit. A lot of the merchants who were selling you goods on time were operating outside of legal constraints. They were often marking up the goods at really high prices. You had this kind of price inflation that was occurring throughout the market as a result of price insensitivity and the ability of merchants to charge excessive prices. Then those merchants were selling this debt on the secondary market to finance companies.  

You get this new consumer movement and this consumer movement, it actually involves many of the same actors from the early 20th century financial protection, but now, these people are justifying these moves in very different ways. They’re not anti-state, they’re pro state and on the academic level, they’re making macroeconomic arguments against predatory lending. They’re really arguing that this predatory lending through this credit selling is resulting in price inflation, and that price of inflation is undermining the distributive logic of the New Deal. There’s a much more diverse coalition as well. It wasn’t just rich, white women and proto effective altruists. you now have lots of women’s groups. Black housewives and Jewish housewives who were protesting and striking against price inflation, and these interests didn’t just result in hard law, but also, we started to develop an institutional framework to deal with these problems. 

In the early New Deal, we had this thing called a consumer advisory board that was part of the National Recovery Administration, which became unconstitutional, but that was this big price setting institution at the federal level and that had a consumer component to it. Later in the New Deal, we had the Office of Price Administration that had a consumer division that was kind of a proto CFPB (Consumer Financial Protection Bureau). That consumer division’s big contribution to public thought was this project that OPA worked on with the Federal Reserve, that ended up promulgating this regulation, Regulation W, that set really broad and aggressive limits on merchant credit. These were the kinds of loans that were pervasive in the economy, and they set caps on how much you could charge, how much you could lend, what interest you could charge, etc. It was pursued for both consumer protection ends and these kinds of bigger macroeconomic justifications. This is like a massive, massive, price setting regulation.  

Scott Ferguson 

You suggest in your article that, if I’m remembering correctly, it was also somewhat democratic and participatory, and they set up all kinds of regional and local pricing and rationing boards. There were all kinds of organizations, from the big cities to small towns, that were participating in the understanding of, the contesting of, and the regulation of price setting, essentially.  

Vijay Raghavan 

Yes, that is correct. The Office of Price Administration was this federal price setting institution. A lot of it was justified as wartime rationing. It was like wartime rationing, but there were a bunch of people who had been advocating for these changes forever who now were sitting on the body that was doing a lot of the price setting. 

To make sure that price setting would work, there were lots of local OPA offices that relied on citizen enforcement of these price setting mandates. At the federal level, the consumer division of the OPA was majority female. It was integrated. We have these stories of the New Deal, and this was kind of an aberration. It functioned differently. It had this broad pricing setting power. There were democratic aspects to the institutional design. Unlike the anti-paupers movement in the early 20th century, we weren’t confronting the problem of predatory lending at the margins of the financial system. We were taking on the problems of high cross credit, the center of the financial system, working in concert with the Fed to constrain the actions of the biggest financial institutions. 

I think, to me, it’s a short-lived experiment, but it’s one where consumer protection interests are playing this big countervailing role in curbing the anti-democratic and regressive costs of delegation. That’s the New Deal. Then what happens is we get the second red scare, and all these people are chased out of government and they’re all communists. We end Regulation W and the Office of Price Administration closes and consumer financial protection interests at the federal level go dark for a little bit. It takes some time for consumer financial protection to resurface at that stage. A lot of the problems that existed in merchant selling continue to plague credit markets in the 60s and 70s. Now you have new civil rights organizations and second wave feminist organizations that are attacking these practices based on the grounds that financial institutions are discriminating on the basis of sex. They’re also discriminating on the basis of race. This is what Elizabeth Cohen calls the third wave consumer movement, which is the consumer activism in the 60s and 70s that isn’t just about consumer financial protection. It’s the big, broad, public agitation over problems in the consumer marketplace that leads to a wave of federal legislation that reshapes the way merchants market and sell goods and financial institutions price and issue credit. 

William Saas 

Well, that takes us, I think, toward the end of your article and the fourth movement or moments for consumer financial protection. I’m very conscious, and our listeners will also be very conscious if they’re listening close to this publication and as you acknowledge in your article, we are in the ashes of that movement. Maybe not the movement, but the Consumer Financial Protection Bureau is functionally defunct under the second Trump administration. 

You note that a lot of what you are describing here, with regard to the redeemable and recoverable and the aspects of the CFPB that are worth holding on to and the impulses that drive them and recovering those from the kind of blanket claim that consumer financial protection is neoliberal writ large. So, yeah, the CFPB is kind of toast at the moment, but you are bringing us this piece in full knowledge of that, published in 2025. I may be interested offline to hear about your process of publishing this and watching all this happen. I wonder if there were some late edits made at the request of the editor, perhaps. 

But you say you’re hoping that this piece will play some part in reconstructing and rebuilding a more robust, democratically accountable and hopefully more durable consumer financial protection institution of some sort, whether it’s the CFPB reanimated or something else. Could you walk us through that last portion where we have this hopeful recovery of this fourth movement of consumer financial protection alongside the razing of the CFPB under the second Trump administration. Where you would like to see us go if you. You mentioned earlier about the kinds of initiatives and policies that this new formation would need. Walking us through that last part of the article would be a great way to go. 

Vijay Raghavan 

Sure. Let me just finish the 20th century story. I’ll try to quickly finish it and lead up to an assertion. What you have in the 60s and 70s is this new consumer movement that is successful in many ways. They push for lots of new federal legislation to regulate consumer credit markets and consumer markets more generally. Now, that era is kind of viewed as a real failure because, one of the main things that I think that civil rights groups and secondary feminist groups are doing is they’re like, we have this progressive cross-subsidy that was created as a result of the New Deal. We make credit more affordable, but it doesn’t work. It doesn’t work if you’re black and it doesn’t work if you’re a woman and we need to change that. The problem is, we end up getting all these changes right as we’re entering this deregulatory era. We get all these changes and what those changes do is they mean that now people can get credit, but that credit is no longer used to address wealth inequality. It’s used to sharpen some of the problems that existed before.  

One of the things that you see in some of the scholarship is to look at the anti-pauperist logic of early consumer financial protection work and then look at some of the failures of the third wave consumer movement and then argue that’s what this project is at a fundamental level. It just exists to legitimize and rationalize the worst aspects of lending. I think if you take a longer view, there’s the New Deal era, which we overlook. This was an era where we productively contested some of the anti-democratic and regressive costs of delegation. Third wave consumerism did have some radical impulses that were muted, where, particularly, black consumer groups were pushing for democratic control of the levers of credit. They got some measures, but those measures were kind of weak. I think they were really sensitive to the costs of excessive debt, however. What ends up happening is we end up going into the deregulatory era and problems with excessive debt get worse and worse and worse, and then we get the financial crisis, and we’re trying to repair this regulatory framework that was broken from about the late 1970s till 2010.  

What ends up happening is we create this thing called the Consumer Financial Protection Bureau, which was Elizabeth Warren’s idea. It’s this new federal entity that was created in 2010 that operates as a hybrid between the FTC and a banking regulator. It has this broad enforcement authority over people who participate in the consumer financial marketplace and some small business lenders. It also has these bank regulator-like powers where it can examine and supervise financial institutions. It was created kind of by accident. If you believe what Adam Tooze writes in Crashed, which I think is probably correct, Ben Bernanke and Hank Paulson and the other one who I can’t remember right now, people are angry that we build up the banks and we’re not bailing out homeowners, and we are not going to nationalize the banks, but we’ll create this this dumb thing that Warren wants us to create as a way to appease some of these more radical demands.  

Then we got the CFPB, and in its early years it was pretty modest in its ambition. What happens, starting around 2020, with the election of Biden and appointing Rohit Chopra as the director, the CFPB gets really aggressive and starts leveraging the power that it has to play this really antagonistic role against other banking regulators who have stopped acting to curb the cost of delegation and instead are trying to just entrench some of those costs. Not only is the CFPB much more active, but from 2009 until 2022, 2024, we have the development of debtor movements and not consumer movements, not people who are lobbying for access to cheaper credit to facilitate consumption, but people who are lobbying for the abolition of debt. This starts with Occupy Wall Street and shifts to The Debt Collective and their work on student debt and medical debt. What you start to see is both the CFPB and then some state analogs working alongside debtor movements to develop ideas about how we ought to regulate credit and what kind of debt should be canceled. It was imperfect, but you start to see the reconstruction of this institutional framework that has some nice democratic features to contest these anti-democratic and regressive aspects of delegation. I think if things went differently in this country we could have let that experiment play out more and we could have made that institutional architecture richer and more democratic and worked in a way to really contest the regressive federal control over our money supply. Things didn’t work out that way, and so, like, what now?  

I guess I can say it online and you can see if you want to cut it or not. I had this idea in 2021, and it took me four years to write it. Towards the end, I was really racing to get it done because I was worried it was going to be out of date. I finished it in the summer of 2024, it ended up getting published in April 2025. At that point it’s weird how “The Radical Potential of Consumer Financial Protection” as a title is as, you know, my friends at the CFPB are looking for work. I’m not alone. I think that on a personal level it’s been hard to justify promoting that work, even though I think there’s value in the work. So, I’m really happy to be on this podcast. You see pictures online of dead children in Gaza and then you’re like, you can also check out my new paper. That said, what are some of the hopeful strands right now? The most hopeful thing on the horizon is, from my perspective, the Zohran Mamdani primary election here in New York City. If you look at his election and some of the other local Democratic officials that are getting elected, and some other DSA (Democratic Socialists of America) adjacent people, they’re putting out positive visions to address people’s material concerns. Their list of things that they’re trying to do includes a bunch of consumer financial protection stuff, and that’s kind of at the core of Mamdani’s antitrust, anti-corporate campaign. What’s the hopeful story? I don’t know what the hopeful story is.  

My hope from this piece is that I want people to read it, but to try to offer a persuasive case to some people about the value of consumer financial protection to help them understand what role it plays in our modern regulatory environment. It functions as an antagonistic force to the ways the financial system entrenches the status quo. It ought to be confrontational and ought to be antagonistic. In order to be effective, you need institutions that have the capacity to confront other institutional actors that are entrenching the status quo. It has to have the legal authority to effectively counteract the power that other institutional actors have, and it has to be really democratically accountable. Also, the people who are facing the bad effects of delegation have to be able to get these institutions to behave in the way they want them to behave. My hopeful story is that we understand what the project is really about and what the best case for it is. We can use that knowledge to slowly reconstruct a new set of institutions that can operate in a way that really effectively constrains the power of financial institutions to entrench inequality. 

Scott Ferguson 

I want to talk a little bit about that. One of the ways in which your essay really spoke to me, and I’m curious to hear your feedback and if it makes sense to you, if you have thoughts about it. I’m going to grope a little bit, I don’t have all the words at my fingertips, but I’m going to try. One of the key premises of public money paradigms; legal, constitutional, monetary theory, etc., is not only that but private transactions are also, as you put it, downstream from political and legal design. 

But that political and legal design or generative and constructive and constitutive, even when they’re doing evil. That productivity and that kind of world building can create zero sum outcomes and real pain and poverty, and it does, but at the same time, its conditions of possibility are not zero sum. 

The conditions of possibility are not the market versus the state. I think many people have problematized that binary from all kinds of points of view, but I think that the legal money paradigm does it in one of, if not the most important and forceful ways. One of the moments I had when I started reading your piece was that it’s not zero sum all the way down. Consumption or purchasing power in the terms of being a purchaser of credit are as constitutive in a non-zero-sum way as anything else. One way of getting at this is to pose the question, on the one hand, consumer financial protection as a problem and as a paradigm and as a history is a symptom or a response to delegation. 

One question I have that might open this up in a slightly different way is, let’s say we dramatically democratize the finance franchise or whatever we’re going to call it, the problem of delegation is no longer a giant problem. Of course, there’s no utopia. Problems always remain, but it’s so much better. 

Is there still a place for consumer financial protection? As a non-expert on the outside, the lesson of your article is “yes,” because it’s still constitutive of how the whole system works. I don’t know how you would respond to that or if you would put pressure on any of the moves I’m making here. 

Vijay Raghavan 

That’s really interesting. I’ve thought about this. Something that legal scholars often ask, “Is this your first best world?” Is your ideal case a world in which there is no consumer financial protection? Because we have the people’s ledger and I think that in a world where we’ve eliminated the delegation problem and we have a fully public money paradigm that is democratically accountable. I don’t think you would need something that resembles what we have today. It would be embedded within that system. 

Scott Ferguson 

That’s what I was going to say, is that it would be embedded, but it wouldn’t necessarily disappear. The problems that consumer financial protection as its own special problem has been addressing. It’s not that you wouldn’t need to mediate those problems, it’s that they would be built into distribution as a design problem. 

Vijay Raghavan 

Yeah, I think that’s correct. I think that’s absolutely correct. The main body of literature that I was responding to is this macro sociology of credit and the way that it’s bubbled up in legal scholarship, but I was also responding to the money folks. The money folks do have very little to say about my world, which strikes me as strange. I think that as the money folks start to think about how we are going to democratize finance and build institutions that are democratically accountable, they really need to look at consumer financial protection, which has been like one site of political contestation over the kind of distributive and democratic stakes of the legal design of money. Maybe it’s not totally clear that consumer advocates and debtors understand that’s what they’re doing, but I think that’s what they’re doing. If you’re thinking about how we make some kind of public money paradigm democratically accountable, I think you need to look at this example. How can different groups actually exert meaningful power to put pressure on the allocation of money, and the price and cost of money in some kind of public system. If you understand that it’s been one side of political contestation over the distributed and democratic stakes of the legal design of money, and it’s going to continue to be as long as we have delegation – and I don’t think delegation is going away anytime soon, nor do I want to be totally incrementalist here – but I think it has value, even though that value is as a response to the the tensions at the heart of delegation. It’s a place where we can look to start to develop meaningful countervailing power to contest the problems with delegation and not look at it as something that’s just going to manage the problems of delegations at its margins.  

I don’t know if that was fully responsive. I think that in a world where we have a public money paradigm that’s sufficiently democratically articulated, I don’t know if we need consumer financial protection. Outside of that world to the extent we have any kind of private provision of money, and that prevention is through the extension of credit, I think that we will need something like this, or we’ll have some something like this will emerge and the role that it plays is kind of dependent on how we understand what it is and how we develop it. 

Scott Ferguson 

No, that was really helpful. Thanks for indulging my rambling question. I have one more question that I wasn’t planning on asking, but it has surfaced putting together different parts of this interview. You talked about some of the early consumer financial protection movements being concerned with — and you used the word — inflation. I guess I’m wondering, has the post 2008 movement on the intellectual side, on the scholarly side or anywhere, have people put together the questions about the politics of inflation — especially since Covid — and these consumer financial protection fights, or has that been mostly missing in this fourth movement? 

Vijay Raghavan 

It’s a good question. I don’t know the answer to that just because price inflation has really kind of happened since I’ve been an academic. It’s something I’m interested in. The biggest new area of consumer credit is “buy now, pay later.” Historically, one of the earliest forms of credit that we had in the consumer marketplace was credit selling, which is just like the ability to buy goods or the ability to defer the purchase price of goods by buying goods on credit. Credit selling was this big problem throughout the 20th century and kind of disappears with the advent of credit cards and the expansion of credit cards to everybody and now it’s reappeared in a really big way through “buy now, pay later.” This is just taking this really old credit technology and kind of updating it for the online era. I don’t know if people have studied it, but I imagine that people are looking to regulate “buy now, pay later.” I don’t know if anyone’s made the this case very directly, but to the extent that people are concerned about price inflation in a world where merchants were selling goods on credit, you’d imagine that we ought to have the same concern today that if the biggest expansion of credit in the modern economy is “buy now, pay later” and that the expansion correlates with price inflation across the economy. 

One might expect that some of that price inflation is attributable to consumer price incentive in the ability to defer those costs through extension of credit. I don’t know if that’s made it into the actual arguments that consumer advocates are making about regulating “buy now, pay later.” I don’t know if there’s any empirical evidence for that, but to the extent that we think price inflation is legally constructed I think this has to be a part of that story. 

William Saas 

I think it’s a good place to leave it. Vijay Raghavan, thank you so much for joining us on Money on the Left. I really enjoyed it. 

Vijay Raghavan 

Thank you both. Thanks for having me.

* Thank you to Robert Rusch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

In this special episode, Rob Hawkes joins Scott Ferguson and Will Beaman to discuss his new article “(Un)conditional Openness: Towards a Neochartalist Theory of Money and Trust,” which was recently published in Money on the Left: History, Theory, Practice. The conversation traces the development of Rob’s long-standing interest in theories of trust from his doctoral research in literary studies towards an increasing fascination with the topic of money which eventually led him to MMT, neochartalism and the Money on the Left project. Rob recalls a jarring moment when, having become excited by the possibility of bringing MMT into his research on literature and trust, he realised that some neochartalists reject the idea that money is trust-based. Determined to think this relationship through in greater depth, Rob’s article reaches the conclusion that neochartalism demands a re-theorisation of the concept of trust itself. In this wide-ranging conversation, Rob, Scott, and Will work through some of the key moves the article makes, including the problematisation of barter-like theories of “calculative trust,” its consideration of the connection between trust and vulnerability, and the way trusting blurs the distinction between conditionality and unconditionality (as alluded to in the article’s title). Finally, the discussion addresses links between trust, the university (as an institution), and the uni currency proposal, and situates Rob’s work within the heterodox and heterogeneous interdisciplinary academic, para-academic, and extra-academic field that is contemporary neochartalism.

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Music by Nahneen Kula: www.nahneenkula.com