Postmodern Money Theory! (Part 3)

In the third installment of Superstructure’s “Postmodern Money Theory!” series, Rob Hawkes and Scott Ferguson wrap up their discussion of B.S. Johnson’s novella, Christie Malry’s Own Double-Entry, which self-consciously weaves money and accounting into the very fabric of literary form. Rob and Scott tease out the text’s lingering potentials and blindspots in order to problematize dominant forms of political economic and aesthetic critique. (Click the following links for Part 1 and Part 2.)

To start, our co-hosts zero in on the book’s estrangement of taxation. Characterizing taxation as a zero-sum game that breeds extreme pettiness, resentment, and violence, the book critically distances itself from orthodox visions of money, while providing only faint hints of possible alternatives. Next, Rob and Scott read Christie Malry’s generative tensions alongside two misleading tendencies in critical theory, both of which are predicated on the false barter story of money’s origins. 

The first tendency links the end of gold standards to the rise of modernism and postmodernism, respectively. Advanced by the likes of Jean-Joseph Goux, Jean Baudrillard, and Fredric Jameson, this expressly lapsarian tendency frets an absolute volatilization of forms and values across political economy and aesthetics, rather than affirming a contestable and imaginative politics of public inscription unencumbered by legally sanctioned austerities and inequalities. 

The second tendency, meanwhile, casts the orthodox problem of dyadic exchange in terms of debt and credit. From Friedrich Nietzsche to David Graeber, this discourse reduces debt to narrow oppositions between domination and freedom, while foreclosing credit’s collective and always disputable caretaking capacities. Although both impulses inform Christy Malry’s construction, Rob and Scott underscore the ways that Johnson’s constant formal experimentation subtly reframes and exceeds these tendencies’ erroneous totalizing judgments.  

Finally, Rob and Scott uncover money’s repressed public foundations and alternatives in Christy Malry’s allegorical conclusion. Working to redeem Johnson’s unrealized longings for socialism, the co-hosts consider the text’s enigmatic appeals to credit overdrafts and debt write-offs in relation to its tragicomic play on Christ’s sacrificial death. 

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On Paradox with Elizabeth S. Anker

Elizabeth S. Anker joins Money on the Left to discuss her provocative new book, On Paradox: The Claims of Theory (Duke University Press, 2022). Anker is Associate Professor of English at Cornell University and Professor of Law in the Cornell Law School. In On Paradox, Anker contends that faith in the logic of paradox has been the cornerstone of left intellectualism since the second half of the twentieth century. She attributes the ubiquity of paradox in the humanities to its appeal as an incisive tool for exposing and dismantling hierarchies. Anker, however, suggests that paradox not only generates the very exclusions it critiques but also creates a disempowering haze of indecision. 

Tracing the ascent of paradox in theories of modernity, in rights discourse, in the history of literary criticism and the linguistic turn, and in the transformation of the liberal arts in higher education, Anker shows that reasoning through paradox has become deeply problematic: it engrains a startling homogeneity of thought while undercutting the commitment to social justice that remains a guiding imperative of theory. Rather than calling for a wholesale abandonment of such reasoning, Anker argues for an expanded, diversified theory toolkit that can help theorists escape the seductions and traps of paradox. In our conversation, we explore strong parallels between Anker’s call for a reparative “integrative criticism” and our own constructive hermeneutics of provision. 

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The following was transcribed by Mike Lewis and has been lightly edited for clarity.

Billy Saas:  Elizabeth Anker, welcome to Money On The Left.

Elizabeth Anker:  Thank you so much for having me. It’s great to be here. Wonderful to meet you guys.

Billy Saas:  It’s great to meet you, too. We were just talking about coming into contact with your book and some of the reasons we’re excited about it. That book is On Paradox: The Claims of Theory out with Duke University Press in 2022. Before we get into and I think to help us contextualize our discussion, could you share a little bit about your personal and professional background and kind of the academic fields and concerns that have driven your scholarship and, and your teaching up to the point of like the publication of On Paradox?

Elizabeth Anker:  Yeah, absolutely. I have an unusual background, and that I have both a JD, and a PhD in Literary Studies, and a joint appointment between the law school at Cornell and the English department. So I’ve spent lots of time thinking about both the stakes of interdisciplinarity and some of the challenges of doing interdisciplinary work and kind of speaking across audiences. So I’m incredibly sensitive to the difficulty of certain humanities fields that they experience in addressing wider audiences. But in a way, this book really stemmed from two different projects that I spent a lot of time working on, both of which were edited collections. The first was a big edited collection on law and literature, which is actually an interesting field because it was one of the first interdisciplinary junctures, so to speak. So scholars already back in the early 80s, were bringing literature to bear to think about legal questions, and vice versa. So a few years ago, I edited this collection with my friend and colleague at Stanford Law School, Bernie Meyler. And in the process of doing that, we really tried to make sense out of the dominant shape and orientation of scholarship that thinks about law and literature together. And in that effort to taxonomize and dissect these main approaches to that particular interdisciplinary field, we seized on a series of problems. And there’s a way in which those problems also inform some of the arguments that I make in this book. For instance, literature scholars tend to almost scapegoat law, precisely so that they can make the argument that literature comes along to save the day. So a lot of humanistic work on legal questions turns law, this big monolithic thing, into almost a kind of straw man. It’s really easy to be torn down, but through a series of super reductive critiques that actually ended up falsifying the legal process, and its real world operations in certain ways. One of the arguments in On Paradox has to do with this ongoing tendency to explain law in ways that are just plain inaccurate, and reductive and simplifying, I’m sure I’ll get to talk a little bit more about that in a minute. But the other big project that I spent years working on that very much sowed the seeds for this book, was another edited collection with my former mentor, Rita Felski on critique and post critique. Rita has written a lot about the limits of critique. And in a way, that’s a big project trying to weigh in on what people refer to as the method wars within theory. So this book On Paradox is kind of my own foray into the method wars to account for where theory has gone wrong, so to speak, and for the ways in which it needs to reinvent itself. So, just to sum up, a lot of the book stems from the fact that I’m somebody who has one foot in law and one foot in literary studies, and have therefore been able to assume something of an outsider’s vantage point, asking about the crisis in the humanities, and these larger trends that are overtaking humanistic inquiry. But with all of that in mind, there’s a way in which the book is also kind of my take on the crisis in the humanities. People have probably seen the recent article about “The Death of the English Major”. And these outcries about the end of the liberal arts or the corporatization of the university, have been on everybody’s mind of late. And in a way the book is also its own account of where that crisis came from. That’s in part an account taken from an outsider’s viewpoint and there’s a way in which I take an unpopular view, which is that humanists are in part responsible for their own growing obsolescence. Obviously, there are all sorts of other big factors tied to neoliberalism, and so on. But some of that responsibility that humanists carry themselves has to do with what I call paradox, or this idea that some other primary methodological approaches have either backfired or gone astray or simply haven’t delivered on their promise. So there is a way in which the book is a plea for humanists’ own self reckoning.

Scott Ferguson:  Thanks for that. So maybe we can focus a little bit more about the specific origins of On Paradox. It’s a pretty wide ranging book in terms of the topics and the issues that it covers. So what are the origins of this specific project? What questions did it emerge from? Did its arguments spring from a core inquiry or focus, we know from communicating with you that you were going to write a modest, small book about one little thing, and then it kind of blossomed into what it’s become?

Elizabeth Anker:  Yeah, the book initially was going to be a mere fraction of its current length and scope. And it was initially an attempt to wrestle with what people have referred to as the human rights turn in the humanities, about 10 to 15 years ago. A whole series of humanistic fields: history, anthropology, even gender studies, literary studies, were all abuzz with excitement talking about human rights, and what rights were their limits and their promise, and I decided I was gonna write a short book that attempted to make sense out of that growing preoccupation. Given the skepticism about law that prevails within a lot of these fields, to me, it seemed perplexing that suddenly a bunch of literary critics thought human rights were so important, and were kind of rah rah jumping on the human rights bandwagon. In the process of accumulating, trying to digest, trying to make sense out of what on earth people thought they were talking about, when they started talking about human rights. I was struck by a series of things. The big thing being almost everybody either began or concluded by observing just how paradoxical rights were. So as a diagnosis of rights, paradox was held out and arrived at by almost everybody. And often people did so in a way that also presented paradox as some kind of epiphanic recognition. So I was struck by the kind of rote predictability of paradox as a way of talking about rights discourse and human rights. And in a way that’s absolutely true. There’s no question that rights have proven deeply paradoxical. They’ve been kind of impaled by their paradoxes, again and again, whether in practice, or as a philosophical construct, or even as a discourse. Rights are deeply contradictory. There’s no question about that. But I was nevertheless troubled by the uniformity of the ways that theorists were talking about rights. And in the process, I was also struck by the fact that paradox tended to stand in for deeply polar things. On the one hand, paradox was a way of talking about the fatalities of rights, the failures, the limits, the disappointments, the spent promise, so everything wrong with rights, it was almost a way of critiquing rights by saying they’re too paradoxical to be valuable. But at the same time, all sorts of other theorists and literary critics were citing paradox as the very locus of rights’ ongoing promise. The fact that rights were paradoxical was what made them fertile, fecund, open ended this valuable source of justice for the future. I was trying to make sense out of the fact that paradox meant two totally different things. And it often would even do so in the same study. Somebody would blame rights for being willfully paradoxical and therefore complicit with power. But then say, well, their paradoxes is also what makes them democratic and ethical, and just, so I was initially trying to wrestle with all of this and suddenly realized that this framework, these tendencies for making sense out of rights, were showing up in all sorts of other areas: debates about democracy, debates about the humanities, debates about modernity. And so I came to recognize that I was really attempting to map and contend with a whole kind of worldview or mentality, or even epistemology or way of knowing, we could say that really has been definitive of theory. So I felt the need to really broaden the focus of this initially narrow study on right, to make sense out of and grapple with the genetics of theory, so to speak, or some of the dominant assumptions that inform critical theory as this really far reaching intellectual formation and intellectual tradition. So it became, as one of my friends would tell me, a book about everything.

Billy Saas:  It really is a book about everything. And it got me thinking a lot about the evolution of my relationship with critical theory from the experience of graduate school, this sort of initial excitement of encounters with paradox. And then the eventual kind of malaise, melancholy and inertia that comes from paradox, ultimately realizing while on the job market, and then in my first job, that humanities scholars have been talking about these things for a long time, and our work conditions, our workplaces have not gotten the same kind of critical attention or critical self reflection, and that the paradox of that is, is very difficult to live with. And so I think part of what we’re up to here at Money On The Left, and our collective more broadly, is the kind of constructive, let’s build something, in place of this void of paradox. Let’s improve our workplaces. Let’s take that inventory and get to the business of making a better world which is why your work and Rita Felski’s work resonated for me, especially, but I know that her work and your work are also having broader and deeper impact. So we’re super excited to have you and to talk more about this.

Elizabeth Anker:  That comment very much captured the trajectory or history of this style of thought, or sort of intellectual mindset that I’m trying to track and make sense out of, which is that you’re absolutely right, that paradoxes are thrilling, and a particular style of thought, grounded in reasoning through paradox or the discovery of these, again, revelatory eye opening capacities of paradox was this exhilarating, new, highly creative thing when theory came of age in the Academy right. So with the advent of theory 50 years ago, or what have you, 40-50 years ago, paradox was new. But over the last 40 years, it’s become routinized. This particular style of thought that once carried all this promise has become too predictable, too much of what we do, and really fails to speak to our kind of lived conditions, and ongoing, most urgent political realities. So some of the book’s arguments are, first, that this style of thought needs to be updated. It’s become passe, right? Ideas that made sense 40 years ago, don’t necessarily make sense in the present. And one of the big reasons, secondly, that it needs updating is that it’s failed to translate into what we could call a practice, or an applied theory, or a set of tools for building better worlds. And I think one of my arguments is that it’s not only that it’s failed to translate, that this style of thought that I call paradox can actually short circuit or impede forms of real world action, because of the various sort of hang ups that come with it.

Billy Saas:  When you start to encounter administration, within the context of the university, you start to wonder to what extent that paradox, that style of thought, actually serves the system as it exists, the de facto administrative apparatus, and, of course, folks who end up in administration have been around for a long time, and they weren’t in those theory wars at the beginning or theory development at the beginning.

Elizabeth Anker:  Yeah, just piggyback on that, we theorists have tended to presume that this method of reasoning that again, I call paradox, equals a particular politics, that to be attuned to paradox is to be a good lefty, to be a good radical to be social justice oriented. And that’s just not the case. This style of thought is highly susceptible to being co opted or hijacked. And in fact, I really think that’s what we’re witnessing at this moment in history, whether by administrators who might not actually have the best interests of English departments or other humanities fields in mind, or, frankly, by really powerful political actors who are kind of ruining democracy right now. I hope we get to talk a little bit about my next project at some point. But the thing I’m working on right now is precisely to try to track how this style of thought is being actively misappropriated to undermine and sabotage a left social justice progressive political agenda.

Billy Saas:  You can sort of see it in your teaching. And I wonder if this is something that you may have experienced, too, where the same kind of surprise and delight that I got from paradox as a student, maybe it’s my own failings as a teacher, but I struggle to reproduce that for students today because it feels so de rigueur, and not surprising, and not delightful, right? In fact, it’s all over everywhere. So where does pedagogy figure into your kind of view of the situation of paradoxes effects?

Elizabeth Anker:  You know, to be totally honest, pedagogy is where it gets hardest for me. On the one hand, it is absolutely true that paradox has become second nature to our current generation of college students, kids in their 20s. All you have to do is a quick search of Amazon for books with “paradox” in the title. That language actively works to trivialize and dumb things down and, again, applies to everything from food crises. So if anything, it’s become its own sort of neoliberal mantra, or self help recipe to talk about paradox and there’s a self-indulgent-wallowing-in-paradox-feel-good-self-discovery element that gets capitalized on in a lot of bestsellers, popular culture or what have you. So students, there’s nothing new about paradox to students. But I find that it’s tricky because I myself in the classroom sometimes do, nevertheless, praise the virtues of things like indeterminacy, inconclusivity, indecision, irresolution as values for awakening, or eliciting a particular kind of moral and ethical engagement. So pedagogy and the experience of teaching very much helped to crystallize and motivate some of the book’s arguments but, to be honest, it’s also where I find myself still championing and celebrating the powers of paradox and insisting that we still need some paradox, and there are still lots of things that we can learn from it. I’m by no means arguing that we need to do away with this style of thought, the book’s main take is that it’s simply become far too much of what we do. And if anything, the only thing that theorists have learned to do, and that’s the problem with it, not that it doesn’t contain value in certain contexts, but that we’ve lost sight of the specificity of context and deploy this reasoning everywhere, whereas it should be confined to much narrower types of debates and inquiries.

Scott Ferguson:  So across your first five chapters, and a brief interlude, your book traces paradox’s surprisingly consistent importance and centrality for a wide range of critical disciplines, fields, discourses, and even social movements. Would you mind walking us through some of your key arguments in the specific chapters and maybe we can start with chapter one where you take on the grand conception of modernity as a periodizing term. And you make the case that our very theorisation and conception of modernity is, to the bones, thoroughly paradoxical.

Elizabeth Anker:  Yeah, again, one of the book’s goals is to really show that this reasoning shows up absolutely everywhere. Basically, any issue that has been deemed worthy of serious intellectual attention, or theorisation, ends up being found to be paradoxical. And one of the prime sites where that occurs, and I would wager even one of the earliest sites where that occurs, if you think about intellectual history, is debates about modernity. And if you do one of those Google ngrams it’s even right when people started using the language of modernity, late 18th century you see a spike in the use of the term paradox. Once again, that diagnosis makes total sense: of course, to be modern is to be steeped in paradox. Basically everything about modern life, selfhood, individuality, politics, you name it is no doubt paradoxical. But one of the things I tried to trace in that chapter is, again, the routinization of that diagnosis, and how it came to be a kind of intellectual second nature, so that it became impossible to talk about something like modernity, without citing to its paradoxes. But I kind of use modernity and debates about modernity in that chapter as an example also to show the very ambidextrous and multifaceted intellectual labor that that citation to paradox carries out. This is true within most theory that performs a particular kind of reasoning. So paradox basically oversees all stages and all aspects of the reasoning process. So for instance, it’s a diagnosis. Right? Modernity is paradoxical, of course it is. But that diagnosis usually embeds a critique of certain aspects of modernity, we can think about classic Marxist critiques of capitalism as a distinctly modern bequest, right. Capitalism is obviously a bad thing. It’s by way of citing to or excavating its many paradoxes and contradictions, that it’s revealed to be so lethal, and predatory, and all of those things. So paradox is a diagnosis, it’s a critique, it comes to basically oversee method or become the backbone of method. Again, it’s almost impossible to find theory that doesn’t operate or proceed by way of the identification and mining of success of paradoxes. So it becomes hardwired into a method. One of the things I try to wrestle with in the book is how this diagnosis of paradox which most immediately encodes all of the bad things and liabilities is something like modernity, with the emergence and arrival of post structuralism, and all of the intellectual ferment that happens in the 1980s and 1990s with the rise of identity politics, the revolution in the humanities, etc, also leads to a change in the way people started thinking and talking about paradox. So that this very notion of equality, that sums up all of the perils of something like modernity, simultaneously comes to be redemptive or salvific, much in the way I was talking about with rights. So the fact that modernity is paradoxical, also comes to be something to be celebrated as the source of modernity’s untapped promise. And I develop an account for the confluence of factors and intellectual developments that allow this diagnosis of paradox to suddenly also become a salvific one. What happens is that paradox also emerges as a kind of destination or cure, or remedy or antidote to all of these liabilities. And that’s in part because paradox does something else too. And that is that it becomes deeply autobiographical for theory. It becomes its own kind of self-referential way of talking about what it means to be an intellectual to inhabit paradox. And paradox almost comes to be transposed onto the persona or character of the great thinker, or the harbinger of modernity, or the great intellectual stage. And there, too, everybody from Max Weber to you name it. These great thinkers are almost always deemed embodiments of paradox and what makes them great is because their own personas metabolize all of these different paradoxes. So it also becomes, again, deeply autobiographical or about the identity of what it means to do theory. And just really quickly, we can see how that would play out. Even in terms of the way people have defined theory over the years to be Paradoxa: as to be contrary to Orthodoxy, to be a dissident, to be a gadfly, to be anti-authoritarian, all of those things. And so it makes complete sense that we as theorists would cathect onto that logic of paradox, or see within it mirrors of our own understanding of our job as leftist, critically-minded intellectuals. Paradoxes are also deeply anti normative. So we can see just thinking about the sheer etymology of the word paradox, why it would be part of the genetics of theory.

Scott Ferguson:  Could you talk a little bit more about the Cold War context in which you trace the rise of post structuralism, especially in the states and why paradox becomes so newly enticing given that context?

Elizabeth Anker:  Yeah, absolutely. Basically, my argument about what happens in the 70s is that there are a whole series of intellectual development and a particular historical milieu, that come together in ways that really reinforce paradox as a way of knowing or an epistemology, but all provide separate kind of intellectual warrants for intellectual reasons that paradox becomes so incredibly powerful as an explanatory framework. One of those is absolutely the Cold War context. And a particular definition or account of totalitarianism that begins to take hold, and that everybody agrees on and totalitarianism is increasingly defined as a political system that is hostile to pluralism, plural vocality, paradox. And so totalitarianism is misunderstood as the sort of unifying force that’s going to, by definition, devour multiplicity and paradox and dissent, and all of that. Democracy and everything anti totalitarian, is increasingly explained in terms of its paradoxes. This sort of thinking is, I think, generally in the air at that moment in history, the kind of anti totalitarianism of paradox, but also explain why deconstruction would continue, would be one of the most influential progenitors of this kind of reasoning, perhaps, within the academy. So there’s something about that cold war environment and a celebration of speech for speech’s sake, that lends this logic of paradox incredible currency. That cold war environment, one of my arguments, also colluded with these lingering residues of the 1960s and 68, which also endowed the dissidents of paradox and the anti authoritarianism of paradox with a particular kind of purchase. We can think about the sort of magical psychedelic thinking of 68 as its own appetite for paradox, and for those mind altering discoveries that we can associate with that thinking, but a series of other things come along in sort of intellectual developments within the academy, perhaps the biggest is the linguistic turn. And the rise of Saussurean theories of language and representation provide a separate warrant for why paradox is so powerful and all meaning is going to stem from or inhere within paradox. I also talk about the rise of literary study. The 80s are sort of the heyday of aesthetic theory. I talked a little bit about how these thinkers are also drawing from theology. But the point is that all of these things kind of come together in the perfect intellectual storm that all separately reinforce and incite this sense that to be paradoxical is to be alive and energetic and attuned as a thinker.

Scott Ferguson:  Would you mind discussing one particular example of one of the supposed paradoxes of modernity, whether it’s in reference to Baudrillard or any other of the thinkers that you cite.

Elizabeth Anker:  I guess I would come back to something like democracy. And I’ll use that as an example simply because I think this mode of thought, this modality, is particularly rampant still today within a lot of political theory, and especially radical democratic theory. We can see why democracy would be paradoxical, right? It’s a perennially failed project. Democracy depends on this artificial construction of ‘the people’. But we know that nation states are woefully exclusionary, and are never going to have perfect representation. The paradoxes that extend from modern practice of democracy are countless and incurable in many respects. So again, no doubt that democracy as an institution is fatally flawed, and fatally flawed because of these paradoxes of incomplete representation. But what occurs in a lot of political theory is that that very incompleteness comes to be celebrated, because it’s seen as paradoxical. So the fact that ‘the people’ is forever and complete, gets read as a positive thing. And the source of the very fluidity and indeterminacy and open-endedness of that category of ‘the people’. If ‘the people’ was closed, then it wouldn’t be paradoxical. So there’s a sort of embrace of the very properties that one might, and simultaneously in the same breath, is despairing of. So one of my arguments about what this logic of paradox that again, starts to take hold in the 1980s, does is that it performs a kind of alchemy or almost a transient substantiation. There’s almost kind of something theological about it where it works to redeem legitimacy deficits, or justificatory deficits. The fact that ‘the people’ is fatally flawed, going back to Rousseau, it’s clearly a problem for the legitimacy of democracy. One of the reasons democracy is paradoxical is because it confronts this irresolvable legitimacy, crisis and deficit of legitimacy. But by describing that legitimacy deficit is paradoxical, that very failure comes to be rescued and, lo and behold, fully celebrated or extolled as the very wellspring of democracy’s promise. And this is a move that comes very, very clearly from the long history of aesthetic criticism and theology. Let’s think about The Odyssey and attempt to reckon with the limits of a deity, right? We’ve all had to study this stuff once upon a time. The fact that God is omnipresent and omniscient, yet nevertheless allows evil in the world, that’s a paradox. But that, unknowability of God, and unfathomability of God within theology comes to be embraced and exalted as the very essence of what makes God God. Again, this logic of paradox performs a kind of conversion that takes what looks at first blush like a liability into the very locus of the just and ethical promise of something, whether it’s God or the humanities.

Scott Ferguson:  I’d like to try to paraphrase some of the argumentation you’ve been working through in order to tease out some of the resonances that I’m hearing, which is: part of the problem with this mode of paradoxical thinking that, maybe there’s other paradoxical modes of thinking, but this particular mode that’s so widespread that you’re tracing. Part of its major problem is that it weirdly wants to unsettle the master signifier, the law of the Father. Yeah, in order to unsettle these dominant, hegemonic terms, ‘the people’, democracy, right? It has to perform the failure of its univocity. The failure of its single or array of clustered, singular meanings and say, “no, no, it actually does the opposite. You think it does inclusion? It does exclusion. You think it brings people together? No, it brings people apart!” Right? And I think one of the ways in which what you’re up to resonates with what we’re up to, I think, is you don’t have to take those hegemonic understandings for granted. You don’t have to give away the game to a particular enlightenment understanding of “the people”. For us, especially, you don’t have to take the liberal understanding of money and its ontology and its topology. You don’t have to take it for granted and just do immanent critique and show how it’s internally contradictory. You can say: Well, wait a minute, what if you start from different premises? What if you don’t start from the premise that money is a private barter relationship that ends up in this massive system of mutual exploitation? What if you start with it as a public utility or a legal design question, what opens up instead? So to me what’s so illuminating about your book is it gives us this language and so many historical analyses of this problem of giving over to the master term that you’re supposedly trying to undermine.

Elizabeth Anker:  Yeah, I love that point. And I have to confess that I haven’t thought about one of the things I’m after along those lines, and that’s why I love it so much. But I think you’re absolutely right, that some of the problems with this style of thought is that it ends up reinforcing the authority of the very thing ostensibly being critiqued. So it ends up almost like reifying, or ceding the game, to the explanatory power of liberal accounts of capitalism, or liberal accounts of rights, because it’s so dependent on that, again, almost kind of reductive notion of what’s being critiqued. I think you’re absolutely right. And for me, another extension of that is that it can contribute to this kind of romance of failure and romance of impossibility, because part of the logic of paradox is to be adamantly resistant to ever lodging itself, or installing itself as a new dominant or a new normativity. So the moment you win, you have to immediately undercut what you just want. So they’re almost like tripwires installed in this logic. The moment what’s excluded comes to be included: Oh, that very thing becomes bad, right? Because it’s the new dominant, but that becomes an endless game that leads us nowhere. So yeah, I love that way of framing it. Yes. Another paradox. Yeah.

Billy Saas:  Is there something about paradox, inherently, that we could say is atomizing or alienating, and maybe affectively discouraging? It’s exciting, but there’s a sort of flat affect afterwards where there needs to be a kind of supplement. And that might be what you’re after or suggesting here?

Elizabeth Anker:  Yeah, and again, I’m perhaps most critical of the modes of thought that we can associate with post-structuralism that took hold in the 80s. First I very much agree that there’s nothing about this reasoning on its own that’s inherently problematic. The idea is that this logic that’s been so dominant, and, if anything, the exclusive way people think in certain fields really needs to be supplemented or complemented with other styles of thought. We’ve been doing half of what we need to do, and we need to do and the other half. But just kind of is one further example of where this perhaps comes from, to sort of explain how it takes hold and why it has placed a stranglehold on more affirmative, constructive modes of thought. Again, I think so much of this style of thought can actually be attributed to post-Saussurean linguistics and the theories of meaning that emerge. If we think about Jacques Derrida in his account of a text or writing, meaning inheres with the slippages, the deferrals, the gaps between words, the impossibilities of clear presence, the fact that you’re never going to have a transparent understanding. Meaning is going to kind of emerge through those impossibilities, through those delays, through those foreclosures and limits to what we can know. Meaning, action, agency, everything has been imagined to inhere within those kinds of slippages and deferrals. And I think what’s taken hold within a lot of theory is anytime there’s an effort to account for meaning, or agency, or action, that’s not displaced along such lines, it’s dismissed as simply wrong or selling out or “liberal”, or again, just plain mistaken. And one of the challenges in writing the book has been recognizing just how thoroughgoing this mode of thought is, while really trying to push back against a tradition that’s hardwired to dismiss an effort to be affirmative, concrete, constructive, etc, as point blank mistaken, or point blank wrong or missing the picture.

Scott Ferguson:  So this is a great pivot, I think, to our question about your second and third chapters. And that’s where you uncover what you reveal to be this deep anti-legalism that subtends, paradoxically, both a positive discourse of rights, but also the critique of rights. We’ve been kind of referring to it, but can you delve into this problem, and how are dismissals and recuperation of rights both rooted in paradox? And then what, for you, does this have to do with aesthetic theory?

Elizabeth Anker:  Yeah, absolutely. It’s a big question. One of the things I tried to do throughout the book is to think about how reasoning that lends precedence to paradox can lead to polar impulses. One of them that I think we were touching on or you brought up when you talked about how this logic can end up reinforcing the power of the very thing being critiqued is that when something like capitalism, and this is where I, would have a fight to pick with at least some Marxist theory, capitalism, for instance, is seen as fundamentally contradictory in ways that basically ontologize or reify that property. And I’m sorry, right? Paradox is something that my brain is a quality in my head that I’m reading onto something to help me make sense out of it. It is not a material property of reality. I would dispute that it is, but when it is deemed thus, or fatally part of something’s architecture or gene pool, that ends up rendering paradox a foregone conclusion. I worry about that tendency, in terms of how it can tie our hands in resisting a given structure or cause the problem to seem so fatally incurable that it can lead to forms of defeatism and inertia in the face of this structure that’s deemed paradoxical. I think that plays out with particular vividness in the skepticism about law that has prevailed within and basically across the humanities, and even within a lot of critical legal studies circles. My favorite example, Wendy Brown and Janet Halley have edited a collection called Left Legalism/Left Critique, and their introduction basically says, submitting any otherwise principally minded left project to the law is going to contaminate it in certain ways. So making recourse to the legal system is going to, by definition, dilute a particular left progressive justice-oriented agenda and is inevitably going to involve a form of self betrayal. And I think that’s just wrong. But that mindset that law is fundamentally bankrupt prevents all sorts of political action that might be really, really successful. I think that mindset is incredibly widespread, and really gets us in trouble as theorists, because it rationalizes and can lead to an excuse for forms of opting out, or not trying in the first place. And that suspicion of law is so pervasive in a lot of theory. The other example I like to bring to mind is a text like Judith Butler’s Gender Trouble, probably one of the most influential theoretical texts, and rightly so, right? It revolutionized our ways of talking about gender, in ways that have trickled down into the popular consciousness, amazingly important and successful text. Nevertheless, within this otherwise fantastic book, the rhetoric of the juridical circulates throughout in ways that basically are shorthand for power and oppression. So to describe something as juridical is basically to mean that it’s oppressive. And again, that just erases and obscures and it’s just plain wrong about all of these really important social, political advances that over the centuries, the law has facilitated. So this kind of suspicion of law is really problematic in terms of how it can basically sanction inaction and discourage inaction. Like I’m sure some of my humanities colleagues kind of looked down their noses at me even having a joint appointment in the law school as its own form of selling out. So, I’m really trying to push back against that legal skepticism as one of the reasons that so much theory has really failed to actualize itself in a viable practice, or why so many humanities fields have remained cloistered and refuse to get their hands dirty by actually tangling with real world forms of action.

Scott Ferguson:  And then what about the school that embraces rights as a framework, and yet in your reading, always predicated on the anti legalistic failure arguments that the straight up anti law scholars embraced?

Elizabeth Anker:  Yeah, yeah, the school of post-structuralism, deconstruction, somebody like Jacques Rancière is this very hot figure these days, I think subscribes to its own kind of anti legalism or legal skepticism, but it plays out in a somewhat different way there in that justice is seen as fundamentally uncodifiable. So the minute you can actually codify or consecrate something in a legal decision or law code, that is seen to be the betrayal of these otherwise just ideas. And again, this comes directly from a particular theological tradition that is antinomian. So antinomianism is perhaps the better way to describe that impulse.

Scott Ferguson:  Can you describe what that means for you?

Elizabeth Anker:  Antinomianism simply means that it’s tied in more Protestant traditions to a conception of grace that is very individualistic. It basically means that law in the books is going to be fundamentally incomplete and flawed. It’s almost more of a Pauline Conception of divine inspiration.

Scott Ferguson:  Yeah, the term that we often use at Money On The Left is anti-medial or anti-mediation, right? There’s a sense that mediation is necessarily extrinsic and imposed. And it’s something that we may be all fallen into in a biblical and Lacanian sense, or a Heideggerian sense. We’re all fallen into it, but it is still nevertheless an imposition that we sort of wish that we could be outside of, and we try to conceive of and imagine a just world with that critical leverage of not being fallen into language or not being fallen into the juridical. Yeah, so that’s how we make sense of it.

Elizabeth Anker:  Yeah, and thinking about the antinomian a bit further,  the big prophet of paradox that, again, everybody was reading in the 80s, is Søren Kierkegaard. Fear and Trembling, this meditation on Abraham’s willingness to sacrifice Isaac, and the language of paradox is everywhere in a text like that, and it’s the incommunicability, the un-translatability, the fact that nobody would understand that willingness that it would see mad and, frankly, evil to everybody except Abraham is its own version of antinomianism. Kierkegaard was also a big conduit for the thrill of paradox, right? You probably remember reading Kierkegaard for the first time, and I’ve had people over the years when I tell them about the book say: that sounds like the first time I read Kierkegaard!

Billy Saas:  You mentioned a couple of times the phrase “selling out”, which resonated with me for a couple of reasons. One, we’re talking about, actually, Scott’s book in class yesterday, Money, Culture, Media with students, we were talking about critical theory, so this is very pertinent to what we’re talking about now. The concept of, through discussion, how selling out was more of a concern, it seems like in the heyday of the logic of paradox. I’m making this connection myself. It’s sort of an early rise. And I think today, there’s a romance of selling out now, as opposed to… So it’s the rise and grind. There’s the culture of hustle as a completion of that rejection of selling out as an abject thing that you don’t want to do as a participant in the economy. And it’s part of this idea that money is bad, whereas now it’s like, yeah you gotta get your hustle on, you gotta get your stuff. And selling out is probably a good thing. So you probably have some colleagues who are like, get the bag. Do your thing. Scott, I know that you wanted to get us into the aesthetic question.

Scott Ferguson:  Right. Well in your interlude, Liz, you wrote this anti legalism into an argument about the “aesthetic” as an intellectual project, as an institutional project.

Elizabeth Anker:  Yeah, I think one of the big sources of this style of reasoning is aesthetic theory or literary and poetic criticism, frankly, going all the way back to Plato. There are brief interludes in this long history of literary criticism where people are doing something different in the 18th century for a couple of decades. But there’s been a remarkable centrality attributed to paradox when talking about the power of art, I think to be able to see the symmetries are parallels between what that work does in theology. A lot of these early theorists were also doing literary studies, and as theory kind of migrated through the Anglo American University, it stopped first in English departments. So English departments were the big proponents of it. So I think it picked up a lot of these tendencies there. But already the early moderns, Renaissance thinkers, were obsessed with a paradox that you get from Plato, which was referred to as the liar’s paradox. Everybody loves this paradox, right? If I say I’m about to lie to you, it’s raining outside. Am I telling the truth? Or am I lying? It’s actually like 90 in Ithaca. If you tell someone you’re telling a lie, is that telling the truth, or is it lying? But that’s what fiction does. That’s what all art does. All of art says, I’m a fiction, this is imaginary. And so it’s different, it’s a paradoxical form of truth telling. For Plato, that was one of the reasons to expel the poets from the Republic, because they were fiction tellers, they were lie tellers. And basically, since the early modern period, someone like Sir Philip Sidney is a great example. The logic of paradox, they’ve recuperated that epithet and said: actually, no, what was the problem for Plato, we tell lies, is the very power of art that we tell lies. So this kind of spirit of paradox has defined accounts of what art is, and what the value of art is, you know, basically for hundreds of years. And I think that the endurance and longevity of that tradition is one thing that people picked up on. One of the reasons that this style of thought that I’m saying took hold in the 1980s was so readily internalized, because it capitalized on intellectual traditions that have been around for a very, very long time. There, too, there’s a particular relationship to truth telling, or meaning, that needs to be routed through forms of deferral, and delay, and that it can’t be present and actualizable. It’s something that can’t be codified in any kind of positivistic regime. Does that speak to your question or not?

Billy Saas:  No, I think that answers our questions. Probably better to segue to the selling out bad versus selling out good.

Elizabeth Anker:  But do you mean like an embrace of the fact that everybody’s complicit? And so why not just —

Billy Saas:  Yeah, maybe the headline is: there is no ethical living under capitalism, right, as a kind of catchphrase for millennial Gen Z online life.

Elizabeth Anker:  Yeah. So, I think that’s showing up and, again, the stuff that I’m kind of working on is a spin off of this project. I don’t see that kind of embrace of selling out so much in my colleagues, or among my English majors. I wonder if that’s kind of the mindset of the New Right or the Alt Right. There’s a lot being written and kind of in process on the extent to which the New Right NatCon youth are kind of embracing a certain bastardized version of Marxism. But some of the animating creeds of that kind of crowd are, I think, precisely this real politic where everything is deemed coercive. There’s a generalized view among the right, increasingly, that all actions are coercive, all power is dispersed. So we might as well just engage in some power play, unabashedly. I think this reasoning is kind of in the air in some of these Alt Right circles, but increasingly in institutions of power that are pretty mainstream.

Billy Saas:  I think I see it in left cultural spaces, maybe not among left academics, maybe so much. I do think that there is a kind of well what are you going to do, give people a hard time for working and trying to make money so that they can take care of themselves. And then that being sort of like the baseline, but then we should be happy for so and so that they have gotten this big deal or this big outcome, and, if if nothing else, that abject state of sellout is no longer a category, I feel like so much today in the way that it was.

Elizabeth Anker:  I think the kind of internal, the going small, is very much among the left. This kind of downsizing of ambitions, and your comments also making me think about Anna Kornbluh’s forthcoming book, and her accounts of the rise of auto fiction and first person narration. All we can do is think about this very narrow sphere of influence. Everything is so sullied and suspect, so there’s something deeply … kind of retreat or withdrawal, that I think license or sanction by this, like, “everybody’s selling out.”

Scott Ferguson:  I’d like to pivot to your fourth chapter, fourth and fifth. To me, in these chapters, you really drill down into very specific paradoxes or specific fields. And I think that they’re maybe among the most likely to offend, to put it mildly.

Elizabeth Anker:  Yeah. You’re the first person who has said that so directly.

Scott Ferguson:  Oh well, you’re welcome. And I think they are, another way of putting this is that, because they really touch a sensitive nerve of, I think, what the left Intelligencia takes for granted. Just to start with your Chapter Four topic, The Paradox of Exclusion. The paradox of exclusion is that dominant forms exclude. This is bad, it’s unjust, it’s painful, it’s harmful. There’s so many things, negative things, that you can communicate about exclusion. And then the response is often, in this modality, to give voice to the excluded or in an Adornoian parlance, to give voice to suffering. And that becomes the injunction of the paradox of exclusion. And just re-articulating this paradox, it’s really hard to think otherwise, it’s really hard to think: Wait a minute, so what are you saying — exclusion is okay? And are you saying we shouldn’t give voice to the subaltern? What are you saying? So, I want to give you a chance to kind of nuance your critique, and put your most persuasive case forward?

Elizabeth Anker:  Yeah, my critiques have less to do with the power of that mode of consciousness raising, because this really emerges with the consciousness raising campaigns of the 70s and 80s. Right with, you know, it shows up in Catharine MacKinnon’s early work trying to awaken women to their own oppression. But that logic, or that project of forever uncovering new sites of exclusion epitomizes the way in which this style of thought can backfire. On the one hand, it’s limitless or insatiable, there’s no end or stopping points to uncovering yet new sites of exclusion. Because once something gains recognition, or is included, it’s no longer excluded, and so becomes part of the problem. And in my own account, a lot of this has contributed to some of the infighting in a lot of humanities fields. A lot of humanities departments, literary studies, perhaps in particular, have become really internally self divided, even though everybody is on the same team, so to speak. And that’s because we’ve identified with that plight of the excluded. Humanists perceive themselves as being paradoxical or, contrary to doxa, themselves excluded. So if our primary mission is to speak to terms of exclusion, there needs to be exclusion somewhere. So we’re going to find them or create them even if they don’t really exist. I think that this project of giving voice to exclusion has really consumed certain humanities fields in ways that have become really counterproductive, and, again, led to forms of internal infighting and rivalries that prevent those fields from taking up other challenges. We only have so much energy and can only fight so many fights. When we’re incessantly fighting with our colleagues, we’re not going to take on other battles. The kind of internal self reference has become a real problem in certain disciplines. It’s one of the reasons for the crisis in the humanities. And I tried to argue that this political consciousness raising project that, again, has governed some of these fields has ironically, led to a form of navel gazing in certain ways. I know that’s a harsh condemnation, I have two other big complaints that I’ll highlight for now about why this project of consciousness raising by giving voice to exclusion became self limiting. One, the problem with this reasoning is that it gets applied to everything in a self reproducing structure. So regardless of what’s being analyzed, there’s a particular methodology that gets brought to bear. And that does a couple of things that lead to the exact same conclusions when you’re applying the same methodology, regardless of whether the object of exclusion is racial oppression, or misogyny. You’re going to reach the same conclusions. But what that does is that also works to obscure or minimize differences between different sites of exclusion. And that can lead to its own forms of inertia, because I’m sorry, to act in the real world, we need to make decisions about which problem is more grave, or more severe, and which is less severe. And there’s a real reluctance to undertake any sort of judgment, that hierarchizes in a lot of these humanities fields. I’m not saying we should do this, but I’m just using this as an example. So if I were to walk into my faculty meeting later today, and say: I think that abortion access issues are more important than the fight against police violence right now. And I think that that’s where I should direct my energies, I would be exiled from the department within the next half hour. But real world political action requires that we differentiate and draw distinctions. Again, because this particular methodology of analysis has tended to operate on autopilot, it prevents normative analysis that actually tries to differentiate between the magnitude of injuries and their severity suffered in diverse sites of exclusion. So in a way, one of my arguments is that we haven’t been critical enough. And that’s because in critiquing everything, by way of the same methodological apparatus, we actually end up preventing ourselves from making critical judgments about where to direct our limited resources. And this logic of exclusion tends to do that. The third real problem with it is just how easily it’s appropriated. All of the men’s rights stuff buys into and reproduces this exact same formula for talking about exclusion. I’ve mentioned a couple of times, I’m starting to work on what’s going on in the US Supreme Court. I have a reading of Dobbs, the decision that overruled or did away with the right to abortion, and I’m sorry, Samuel Alito deploys this logic of giving voice to exclusion, to talk about the rights of the fetus, and to start to pave a pathway for recognizing fetal personhood. And so this thinking is, again, by no means tied to a particular left progressive agenda. It’s super easily plundered and misappropriated. So I’m not sure that it’s the recipe for all of the good things we expect it’s invariably going to be a recipe for.

Scott Ferguson:  So in your fifth chapter, you take up the role of paradox in what’s called trauma theory. Maybe to get us into that argument, you can tell our listeners a little bit about what trauma theory is, how it arose, and how it’s been on your view, overridingly positive, but that it, too, has limitations and blind spots that we need to be thinking about otherwise and especially when it comes to pedagogical cultures in classrooms where trauma theory is taught?

Elizabeth Anker:  Yeah. Over the course of the book, I look at a series of innovations that demand to be attributed to theory, or this revolution in the humanities, and just how much they’ve really revolutionized popular discourse. Ideas about gender would be one wherein theory won, right? We’ve changed the game, talk of structural oppression. Even five years ago, discussing structural oppression would not be in common parlance. It’s become a kind of dinner table fair. My students arrive in college knowing what structural oppression is. And that’s amazing. Another way in which everything we’ve been doing in the humanities has, in fact, changed things. Trauma theory is another enormous site of influence. Before Vietnam, trauma was not a recognized medical diagnosis. And trauma theory arose in the academy in the 70s, 80s, 90s, and gained enormous popularity. It initially thought specifically about trauma stemming from the Holocaust, and it was heavily influenced in its earliest incarnations by both psychoanalysis, specifically psychoanalysis in the vein of Jacques Lacan, and by deconstruction, so thinkers like Jacques Derrida, Paul de Man. It’s changed a lot and departed in many ways from its roots and what is often thought of as Yale school, because it happened at Yale. Yale School of Trauma Theory. But trauma theory has also been widely critiqued as colonizing our available vocabularies for talking about victimization and injury. So all sorts of people have complained about… there’s an influential book called The Empire of Trauma, have complained about the ways trauma has become, not that trauma theory is wrong or bad on its own, but it’s become our dominant and often only framework for thinking about forms of abuse, injury, victimization, and all of that. So the perfect example of a theoretical innovation that’s reverberated throughout the real world instituted all sorts of enormously positive change, yet, nevertheless, needs to be rethought precisely because it’s dominated our explanatory framework so much. The book actually concludes by thinking about the ways it has proven limiting. And some of those limits have to do with this recurring theme of just how easy it is to be hijacked. It’s easy to deploy these dominant definitions of what trauma looks like, and to kind of weaponize them in ways that discredit particular injuries. And I’m also concerned about the ways that it draws from an understanding of representation and linguistic meaning that can work to strangely deem trauma ethical. So in a way, it buys into a line of thought that’s really commonplace, and again, enormously productive in many instances, that asks us to think about pain and suffering as endowing the victim with privileged insight and understanding. This is the kind of reasoning that shows up in one of the most influential texts from the African American literary canon W.E.B Du Bois’ The Souls of Black Folk, where he coins the notion of “Double Consciousness”, which is this idea that to be the victim of protracted racial and other persecution endows one with an elevated way of knowing, or a double and multiple consciousness that allows more sophisticated grasp of not only the forces that lead to oppression, but of one’s own relationship in the world. Du Bois actually called Double Consciousness a paradox, believe it or not. And that thinking is super positive and super empowering, but what it does is it nevertheless takes pain and finds something redemptive within it. Again, this is valuable thinking for all sorts of reasons. But I tried to reckon with the ways it’s maybe gone a little bit too far. And trauma theory draws on a similar type of understanding, but supplement it with a model of the psyche that understands trauma as fundamentally elusive, repressed, fragmentary, that kind of resides within these gaps of consciousness. Trauma is something we can never actually localize, all the brain does and cycles around it kind of questing for its origin or cure. Hence, this repressed nature. But there’s something about that mode of thought that can take repression, and treat it as restorative and even ethical. So some of this early trauma theory actively describes trauma as the ethical connective tissue that will provide a link across cultures. You can see why I may be skeptical of that kind of move. I do try to wrestle with how that kind of thinking can be problematic, among other reasons, and that it can disqualify certain kinds of injuries from counting as trauma, lots of people have made that argument about it. Early trauma theory has been widely critiqued for being beholden to a very Eurocentric conception of the subject along these lines, but I’m interested in how especially that model needs to be updated due to historical factors. But how that model for understanding injury can again be turned on its head, or exploited and manipulated, to discount historical forms of oppression to actually undermine the victim, to gaslight, or ghost particular kinds of injuries. So for me, some of these ways of talking about trauma, again, kind of epitomize the ways all of these really great innovations that come from theory can nevertheless be misappropriated and misused by hostile forces.

Scott Ferguson:  So I want to try to use some legalese. And you can tell me if I’m not using it correctly, but it seems to me that when trauma theory reaches its limit, it sort of edits worse. In the realm of law, it’s like turning everything into torts. It’s like everything is an injury, and from the point of view of what do we do going forward? How do we construct and fight for a just world? Well, let’s tally up the injuries and then remedy the injuries, which we should do. But that’s only one place to start. And I worry that we foreclose posing questions about the right thing to do for people, the right thing to fight for individuals, for collectives, for groups, for the globe, that aren’t necessarily predicated upon intelligible injuries.

Elizabeth Anker:  Yeah, that’s a critique of trauma that others have also raised, that I absolutely agree with because trauma assumes that there was some clearly-isolatable injury that happened at one discrete moment in time. It actually writes off more systemic forms of injustice and injuries that can’t be pinpointed in such a precise fashion. So it can actually do a real disservice to thinking about generalized conditions of harm, or low grade forms of violence and Injury that are woven into the day to day. Trauma is often thought about as exceptional. For most people, a decent percentage of people in the world, trauma is written into their most ordinary, mundane, non-exceptional interactions and realities. And I would also say that one of the things I tried to reckon with in the book is how this particular methodology of reasoning, that I call this Logic of Paradox, tends to be reproduced quite formulaically again and again and again, everywhere, everywhere, everywhere. And trauma theory exemplifies the way in which all sorts of wildly divergent and very, very different injuries nevertheless come to be digested and deciphered, by way of this recurring formal logic. So all traumas end up looking the same or being defined in the same way. And there, too, it works to actually level or erase differences between different traumas that are profoundly meaningful, and that I think we as theorists should be setting out to measure and to wrestle with and to document. A lot of trauma theory precedes from the notion that there’s something fundamentally unverifiable about trauma that can’t be documented, and that can’t lend itself or that will elude legalistic regimes of evidence. And maybe, yes, that clearly is true for certain traumas. But it can actually obscure our ability to engage in forms of documentary labor, or to undertake the kind of normative differentiation that I think the humanities have really forfeited, but that seems essential,

Scott Ferguson:  You have an analysis of the trauma theory classroom that I’d like to give you a chance to elaborate. The classroom in which the pedagogue is encouraging students to confess, I have to say that I don’t think I’ve been in one of those classrooms. But I don’t think I ever took a strictly trauma theory class, either.

Elizabeth Anker:  Yeah, you’re totally right. And I think this plays out within a lot of these really foundational theory texts from the 80s and 90s where, in fact, witnessing one’s own trauma is heralded as its own form of pedagogy. And so the sort of confessional mode has overtaken a lot of humanity’s classrooms. It’s perhaps different now than it was back in the day, but I can absolutely remember classrooms wherein you authorize your own voice as a speaker by first confessing to the forms of injury that had been inflicted on you. I’ve even taken exams back in the day where that confessional mode was how … I won’t name any names … how one was guaranteed an A or not. But what that does is that also deauthorizes certain voices. Again, it risks trivializing the injuries at hand. So I do think that part of the consciousness raising aspect of pedagogy has been about broadcasting one’s own sites of victimization, and that that kind of exercise has become compulsory in a lot of different spaces. I think the other reason we should be a little worried about that model of pedagogy, that’s oriented around consciousness raising in the classroom, is that it presumes that symbolic change in these elite institutions of higher education is going to trickle down or translate into action on the streets. I’m not so confident the symbolic awareness when one’s in college is actually going to meaningfully activate an electorate. I mean, it’d be nice to think it does. But the seamlessness of that trickle down effect, I think, has been overstated, or over-wagered, in a lot of humanities scholarship.

Billy Saas:  I think that there’s some interesting overlap potentially, between what you’re kind of calling for which seems to me like a little bit more specification about trauma like a reconceptualizing, that is about expanding and becoming more specific and not, not just sort of identifying all trauma as co-equal. With some of the histories of money that we interact with, as opposed to the kind of original, primordial barter situation where we’re all just autonomous actors, hopping around trading with each other, and then some genius person or group invents money to make it more efficient. There’s a anthropological history that’s much more feasible or tenable, that locates it in Medieval Period Weregild, which is trying to identify specifically, quantitatively forms of recompense that are adequate for trauma that one inflicts on someone else. And in this case, it’s like, how much is a nose worth? If you took somebody’s nose off, what is that worth in terms of livestock, and gold and money and things like that? And it’s a gruesome origin story. And it’s not the whole story. I want to ask you to maybe specify or differentiate how your theory of integrative criticism, which you have identified toward the end of your book in the second interlude, and then the final chapter is a potential path forward for left theory? How is it not in the field of trauma or in the logic of paradox and trauma studies? How is it different or more than, better than, different from, distinct from? You know, one ear is worth 10 pieces of gold?

Elizabeth Anker:  Yeah, a great question. I think, first, why is an integrative approach to theorizing things different from the way trauma is often accounted for? I mean, one of the staples of a lot of especially early trauma theory is that it’s resistant to healing or defiance of the cure precisely because it’s kernel, that traumatic kernel is going to remain fundamentally elusive. So what that means is, if you’re a trauma victim, whose trauma is no longer repressed, whose trauma is self present, who maybe thinks that they’re cured, you’re not properly traumatized. And that’s not really trauma that you’re suffering from. So if trauma can be integrated into the psyche, it ceases to be trauma. We can see why we have this really narrow definition and super normative lens for dismissing or discounting certain traumas. In thinking about those types of issues, types of debates that have been left off the table, or kind of prohibited by what I tried to describe as an epistemology of paradox, or paradox as a way of knowing, are a lot of things that are vital ingredients of a livable and effective politics. And so by thinking about the integrative in a way that’s my framework for trying to put my finger on a series of things that it’s been impermissible to talk about, not to mention analyzed, in a lot of critical theory, or lefty circles. And those are things such as when things succeed or work relatively well. I mean, how often have you read a book written in the humanities that takes the relative success story in the history of politics or law and says, I’m gonna write a book about why this worked? Never! Right? So we’re just allergic to taking stock of, not to mention celebrating, our limited accomplishment. Even here, I’m like mincing my words. I’m scared to say success. Right? I certainly can’t say progress, right? Not to mention, I would call something a victory. Ah, right. But come on. There are political accomplishments that have been successful, that have proven lasting and effective, that we should take seriously and take stock of and ask why they worked, so that we can emulate them and replicate them. We should also ask those types of questions about forms of community, day to day practices that prove sustaining and effective. When I appeal to the integrative it’s a call to train our attention to all of these things that have been off the radar screen of theory and actually deemed impermissible. So I think about the integrative as also a matter of when things hold together as sort of something different from the logic of paradox. Paradox has worked to fracture, break apart, fragment established truths, break down orthodoxies. But sometimes it’s important to examine the kind of glue or connective tissue that isn’t about when things fall apart, but is what renders things sustainable, livable, habitable, again, are when things kind of come in hold together in ways that we want to applaud. So it’s really a plea to turn our theoretical attention to those things that prove non contradictory, or we might experience as non contradictory. Not that they’re going to be permanently thus, but even just episodically so…

Scott Ferguson:  One of the things I really appreciate the style of your theorizing, the stylistic turn, that your theorizing takes in the late interlude in the last chapter, is you really stage for us, not in like a “woe is me”, but I think as an important intellectual project. How difficult and challenging this has been for you and has been part of your pedagogy? And how do I get out of those rote forms of the paradoxical with students? And what do they think? And what am I even saying? And what language am I going to use, and what kind of stylization or aesthetics are going to matter for this one potential of many alternatives to the paradoxical? So I just want to say, I really appreciate that bringing us into the problem, that’s a stylistic choice that you make. And I was wondering if you can speak to that, but also tell us a little bit about Virginia Woolf and A Room of One’s Own, which is a bit of a touchstone in the Money On The Left community, just because precisely I think we’re picking up on similar things. She’s making normative demands, a room of one’s and this much money. You want to solve the women in fiction problem, people? Well start paying women to, and furnishing their lives to be able to write fiction. So your response?

Elizabeth Anker:  Yeah, no, thank you. And thank you for saying nice things. I mean, this last chapter of my book where I put forward a kind of alternative or supplement to paradox: single-handedly the hardest thing I have ever written or will ever try to write. I can’t tell you how many different iterations of that I went through. Initially, I had settled on the rhetoric of the prescriptive, or the need to be prescriptive. Getting at normativity without fully going normative, a tentative way. So, to me, that was really a lesson in just how stifling this intellectual tradition had become, and also just how hard it was to escape, again, what increasingly felt like a stranglehold or its own sort of internal policing mechanism. So, to me, it was just an unbelievably both fascinating and kind of arduous and painful experiment to try to think differently. I do feel like I put forward the integrative as one way to think about a supplement to paradox. I do want to emphasize that I’m not saying it’s the only way or the right way, it was the best I could come up with. But to me, what matters most is that we do something different. And we kind of add something to the mix, and that we don’t walk away from every conversation, throwing our hands up in the air and citing paradox. For me, what matters most is that we try to undertake so much more constructive, affirmative, and practically oriented labor. I think there’s a way in which theory has lost sight of all of these aspects of lived experience, and the very pragmatic, practical realities of day to day decisions about how we guide our lives, necessary decisions that factor into any political decision making process, right or any legal judgment for that matter, since I think about law a lot. For me, the integrative was one way of focusing our attention on certain elements of those practical choices that get elided, or written off, and a lot of our intellectual labors. By deploying the term integrative, I am also, of course, trying to think about how we might better integrate our intellectual activities into our lived routines. In directing us to the day to day, you probably also have picked up on the extent to which the day to day is written off as some kind of debased sphere of intervention. There’s an incredible utopian future oriented impulse and a lot of theory that any politics needs to be utopian in its fundamental ambitions. I’m pretty skeptical of that, too. So looking at the integrative is an effort to counteract that impulse that shows up in a lot of places. That’s cool you’re also Woolf people, too. I didn’t realize that everyone’s own …

Scott Ferguson:  Yeah, I’ve taught a class on essayistic writing across text, and photo essay, and video essay, and film essay, and I always do A Room of One’s Own. So I have a really intimate relationship.

Elizabeth Anker:  Yeah, I’ve actually never taught it.

Scott Ferguson:  Oh, god, it’s so great. Yeah.

Elizabeth Anker:  But I’m also in literary studies, right? There are so many of these canonical or widely celebrated texts that tend to be read in through a particular framework. That’s why I’m so, even having written about Claudia Rankine’s Citizen, and I’m still kind of fixated on it because it on the one hand rightly tends to elicit these interpretations that think about it as a meditation on structural oppression, and the tenacity of this kind of monolithic edifice of racism. And that’s right, that’s in there, that absolutely lends itself to those interpretations. But there are all of these other moments in the text that just get neglected or overlooked, that are actually gesturing towards something a lot more complicated, a lot more affirmative. And that’s one of the reasons I’m also so interested in Woolf right, as she’s often one of the great spokespersons for a particular kind of queer consciousness. And that’s true, that’s there. But she’s also doing this really normative project.

Scott Ferguson:  Yeah, while being a radical critic of British Empire,

Elizabeth Anker:  Yeah, yeah. And those two things can go hand in hand. Right? And for all sorts of reasons, again, hence, the book, we’ve just been utterly resistant to thinking about those things as going arm in arm or being part and parcel of the same intellectual fabric, and they can be and they are, and they should be, and they need to be.

Scott Ferguson:  It’s interesting, there’s a certain kind of contemporary defeatist utopianism that I think you’re speaking to, which is like: well, we must overcome capitalism, right? And if we don’t overcome capitalism, which, by the way, on this show, we actually find the word capitalism to be highly reifying. But that’s another conversation. But if we don’t over time,

Elizabeth Anker:  I’m going to be the new regular listener.

Scott Ferguson:  You’re welcome to! So if we don’t fully overcome capitalism, then you can’t ultimately have legitimate justice, right? One of the normative political projects that our heterodox world of econ and law and US humanities folks are committed to is a federal job guarantee, a right to work. This goes way back to Louis Blanc in the 19 century, throughout the Reconstruction period, the Black struggle for freedom. There’s a long, long tradition to point to. And there’s a lot of other leftists we’re in critical conversation with who will say: no, that won’t work under capitalism, capitalism won’t allow that to happen. Our point is not to say, “No, utopia is coming tomorrow. A right to work is arriving. Let’s all start celebrating joyously that utopia is tomorrow.” Nevertheless, we think there’s a difference between standing by principles, and of critically evaluating the world with those normative claims on the table and in mind, and being put into the conversation as the values that were weighing this reality against, that I think we see in Woolf and I also think that we see in your project.

Elizabeth Anker:  Just to echo your observations about how the insistence on a revolutionary overthrow of capitalism is the only way to go, it also blinds us to some of these more complicated histories that exist within a particular intellectual formation. My most recent version of that is four years ago, I started teaching 1L contract law. Which is great fun, but had you talked to me before then, or talked to any of my colleagues in the humanities, they would say: contracts are tools of oppression, they’re individualistic, they’re at the root of capitalism. And so I’m teaching contract law and discover within that history that, lo and behold, there have been all of these very progressive reforms, many of the efforts to codify and systematize contract law, were informed by people influenced by German socialism. So, lo and behold, the sort of real story of the evolution of contract law, especially in the early 20th century, is so much more complicated and nuanced and deeply collectivist, and in a spirit we would actually want to get behind. There’s a way in which this either or thinking leads to these blinkered responses that actually shut down or blind us to avenues for instituting change. I tend to be a bit more willing to accept incrementalist arguments for change, too. But, you know, you don’t want to tell anyone that.

Scott Ferguson:  Well, I think here we’re but we’re open to increments, and we’re open to leaps and everything in between, I guess that’s what I would say.

Elizabeth Anker:  I love your account of capitalism. And yeah, I tend less to run in, I tend to do less of the economic stuff and I’m less steeped in Marxist theory and those debates, just because they sometimes tend to be more, I want to say, inside baseball, but you know that. I don’t know about baseball. But yeah, we need to be coming up with viable approaches and strategies and solutions that don’t depend on the end of capitalism, or what have you.

Billy Saas:  There’s one particular source that I think often gets read by our interlocutors as support for that idea that a job guarantee couldn’t happen under capitalism, because capitalism is a piece by Michał Kalecki, called the political aspects of unemployment, where he argues, basically outlines here are the reasons that capitalists will object to a full employment economy. Here are the reasons that they’re going to do this. And he gives three, the specifics don’t matter so much. They take that as supporting evidence that it will not work. I sort of understand it, anyway, as yeah, these are things to watch out for as you build.

Scott Ferguson:  This is why we fight!

Billy Saas:  Right. This is why you fight and show up and like to propose and repeatedly iterate and build upon experiments and positive affirmative projects. And so I think the language that you’ve provided in the book is really, really awesome. I mean, the language, the argumentation. What are you doing next? You mentioned a next project, are you developing in that project, some of the integrative criticism methodology or what can you tell us?

Elizabeth Anker:  Yeah, I’m still a little bit in between projects, but the one thing I’ve just started avidly working on is precisely to think about the propensity of some of these standard moves and standard left argumentative strategies, and frankly, ideological positions and critiques to be appropriated. So I’m increasingly haunted by how some of that reasoning is getting hijacked by more right wing jurisprudence, and in the court system. Just to give a few examples, one of the things I track in my book is just how hardwired a skepticism of law is among the left. Well, that kind of legal skepticism was a Breitbart platform. And so, skepticism about incrementalist visions of law is becoming rampant among the New Right. I’m very interested in how certain critiques of liberalism, for instance, that we’ve long thought of as kind of the bread and butter of more left progressive theory are being irrigated among the left. I’m sorry, among the right, increasingly on the right in the judiciary, kind of an anti liberalism. And this isn’t just in fringe circles. Like Adrian Vermeule, I don’t know if that’s a name that rings a bell, has this blog called The Post-Liberal Order, and about a year ago published this book called Common Good Constitutionalism, which basically does Carl Schmitt in order to argue for a return of vitalism to politics by way of a strong leader. So it’s this weird apologetics for Trump. He teaches at Harvard Law School, this book is getting taken seriously by all sorts of academics. It is leading to positioning on the right as a result. If we had a half hour, I would catalog the number of sort of staples of theory that are alive and well and flourishing in the right, and I’m simply focusing on legal stuff as a discrete point of entry. I’m trying to sort of prove the extent to which both our ideological positions and our critiques and our methodological tactics are all being actively hijacked. And a lot of these really recent, really controversial Supreme Court cases. It’s precisely in that light, I’d finished the book well before the Dobbs decision was handed down, but that, for me, exemplifies the ways in which a whole series of classically leftist moves are being deployed to justify overturning the right to abortion. But there’s a way in which that decision also gives me new fuel for thinking about the value of integrity as something we need to theorize in affirmative terms because when all of these kinds of modes of critique are being deployed against us, we the critics, how do we react to them? I’m not sure that throwing more indeterminacy into the mix is the answer when somebody like Alito, Samuel Alito says, well, all legal rules are constructs. We don’t respond to that by evoking a constructivist thesis of truth, right? We need to have something that we can independently build or take as a foundation. And I think integrity is one of those values that we maybe need to be adapting, endorsing, not without cognizance of the many dangers that would come with integrity. I mean, integrity carries with it all sorts of problematic associations. I can enumerate, but nevertheless thinking about the integrity of women’s decision making, women’s bodily integrity, all of this stuff might be a helpful counterpoint to such a ruling.

Scott Ferguson:  I was just kind of free associating. I was thinking about, if you thought about these spectacular melodramatic performances, crying, breaking down on the witness stand before a panel like Kyle Rittenhouse or Brett Kavanaugh. The way that there’s a kind of performance of trauma and victimhood on the right that may or may not be playing into the legibility that trauma studies has brought to bear. Not to blame trauma studies for those manipulations, but I’m curious if you’ve thought about that?

Elizabeth Anker:  Oh, yeah, absolutely. I actually have one of my graduate students, Christina Fogarasi, has this brilliant analysis of how the efforts to invalidate the testimony of Christine Blasey Ford in Kavanaugh’s confirmation hearing, actively enlisted the conventions of trauma theory but turned them on their head as this pretty savvy tactic for discrediting her testimony, and undermining her authority as a witness. So trauma theory, itself, is a sword that can be weaponized to poke holes or discount particular manifestations of trauma. Her argument is, that’s exactly what happened. I think that would have to go hand in hand with the performance of the traumatized male victim, which just goes to show that all of these bequests of theory have been so valuable, but they’ve been too often presumed to equal a left progressive politics. And these are all examples of how that’s just not true. They don’t necessarily feed into a particular political position or agenda.

Billy Saas:  So not discrediting trauma theory but more crediting or identifying the cynicism, opportunism, appropriation of trauma theory’s strongest aspects by some of its worst opponents.

Elizabeth Anker:  Yeah, yeah, exactly.

Scott Ferguson:  Well this has been a great discussion. Thank you so much, Elizabeth Anker for joining us on Money On The Left.

Elizabeth Anker:  Thank you again for having me. This has been so rewarding. I’ve learned new things about my book, because of so many of your really brilliant interventions and spins on its argument. So I am hugely grateful for the chance to talk to the two of you

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mike Lewis (transcription), & Emily Reynolds of The Buffalo Institute for Contemporary Art (graphic art)

Bank of the People: History for Money’s Future

By Dan Rohde

Who would’ve guessed that the sudden failure of a state-chartered, regional bank would’ve inspired fundamental reckonings with the nature of money and banking? Yet, this is exactly what we see today. The failure of Silicon Valley Bank (“SVB”) and its $200 billion of mostly-uninsured deposits has spurred renewed debates about not only whether and when banks should be allowed to fail, but what role they play, or ought to play, in modern society.

The ongoing SVB episode has laid bare two fundamentally opposed views of banks. First, there are those who regard banks primarily as private businesses. This orthodox camp largely (though not entirely) opposes the present rescue efforts, insisting that the market be allowed to discipline banking enterprises. Poorly run banks, they argue, should generally be allowed to fail, unless their size and systemic importance dictate otherwise. This business approach to banking lies behind the current design of deposit insurance, which only insures deposits up to $250,000 per account on the presumption that only small account holders should be protected; holders of larger accounts are presumed capable of monitoring their bank and moving money to a safer institution if necessary. The market should thereby privilege safer banking institutions. Such thinking similarly underpins much of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which attempts to isolate banks that are “too big to fail,” while leaving smaller institutions more to the discipline of so-called “market forces.”

But, as the events of this weekend underline, this is an increasingly strained perspective. SVB’s largest depositors plainly did not adequately supervise its practices, and this is not particularly surprising. And, in spite of being a regional, state-chartered bank not identified as systemically important under Dodd-Frank, within 72 hours of the panic beginning, Treasury, the Fed and the FDIC, through some creative and surprising legislative maneuvering, pooled their resources to engineer a rescue of all SVB’s deposits – both insured and uninsured.

Such apparent failures and exceptions from the orthodox perspective are much less surprising to those who understand banks to be public institutions. As laid out in a recent editorial by Morgan Ricks and Lev Menand calling to remove the cap on deposit insurance altogether, this position holds that banks are best understood as privately-owned entities charged with a fundamental public function: issuing the vast majority of the deposits we use as money. Eliciting language from Saule Omarova and Robert Hockett, they describe a bank charter as “an outsourcing arrangement, a franchise, to issue money on behalf of the government.” Eliminating the cap on deposit insurance “would underscore the fact that banks exist to serve the public interest, not to privatize gains and socialize losses.”

To gain greater perspective on the present debate, it’s useful to consider the historical foundations of modern banking – both in the US and elsewhere. My forthcoming paper in the Osgoode Hall Law Journal offers one example. There, I explore the introduction of banks into Canada – a period when, even if privately owned, banks were openly and explicitly conceived as public institutions. (Accordingly, they also marked a central site of political contestation.) Elite monetary engineering on behalf of one partisan camp was met with opposition from another, followed by direct, democratic contestation. Returning to this past can help us in at least two ways. First, it helps clarify the role that banks were meant to serve and still serve today in our monetary system, foregrounding the actions of the state in creating and backing them. Second, narratives like this can help us conceptually to imagine and work toward creating a more democratic monetary architecture, both today and in the future. 

The Chaos of Canadian Colonial Money

Money in colonial British North America was a mess. And the colonies were in a tight spot trying to fix it. The law generally forbid colonies from issuing their own money, either through establishing their own mints or issuing bills of credit. Further, as of the 1820s, the British government required that all colonial accounts be denominated in sterling. All the while, continuous growth and a trade balance favoring England constantly tapped the money supply, leading to near constant calls for more liquidity.

The colonies responded to this with legislative ingenuity. With jurisdiction over their own revenue and courts, they would declare coinage of various nations “current” within their borders, meaning that such designated coins would both satisfy debts to the colony and count as legal tender. They would then “rate” those varieties of coin under their own unit of account – granting each a domestic value that differed from (and typically exceeded) either its face value or what value it would acquire in foreign markets. While the official unit of account was English, many goods were priced in dollars, and most actual coins in people’s pockets were Spanish. This process, known as “overrating” coinage, fomented a currency mélange throughout the colonies that immensely complicated even basic everyday transactions.

Still, the colonies enjoyed a brief reprieve from this complexity during the war of 1812. To fund that conflict, the British forces issued legal-tender “Army Bills” directly to soldiers and suppliers.

These bills not only serviced the war effort but also were widely adopted and appreciated by the settler population at large. Typically denominated in both dollars and pounds, they greatly simplified everyday exchange, offering settlers a paper currency that was, more or less, worth the value listed on its face. Significantly, the bills were issued in good supply, reaching a peak of £1.5 million in 1814. The result granted the colonies a level of liquidity they would not know again until for decades. Exposed to their first paper money in good supply, the colonists thus experienced previously unparalleled liquidity through public money–even if a money, of course, issued for military conflict.

Enter the Banks 

In spite of such achievements, the British fully redeemed the Army Bills after the war. Retiring the bills led to a deep and profound monetary contraction. And it was this specific moment that directly inspired the chartering of Canada’s earliest banks. First was the Bank of Montreal in 1817, followed by the Bank of Quebec in 1818, the Bank of Upper Canada at Kingston in 1819, the Bank of New Brunswick in 1820, and, as will be discussed below, the Bank of Upper Canada founded in the town of York (later incorporated as Toronto) in 1821.

The first Canadian banks were universally run by wealthy, politically connected and conservative individuals, often with direct ties to England. And they were chartered to offer a public service. They could store varieties of legal tender coinage and issue notes that, like the Army Bills, listed their value on their face. While not legal tender, these banknotes could thereby replace legal tender coin for much everyday exchange. Banks could additionally issue more notes than the amount of coin they kept in reserve, thereby directly increasing the money supply for the still liquidity-starved colonies. Thus while certainly commercial enterprises driven by private profits and interests, the early Canadian banks (as with many chartered corporations at that time) were not merely commercial institutions, but expressly political ones. They were individually chartered and empowered by statute, run by politically-connected colonial elites, and specifically charged with a public service in simplifying and augmenting the money supply.

Crucially, such elite banks “of issue, discount and deposit” were not primarily held out as savings institutions or mere intermediaries, but money issuers. Generally, they built their reserve of specie by selling shares rather than attracting depositors, and their primary purpose was to clean up the colonial money supply and expand monetary circulation. Banknotes almost immediately became the predominant currency for everyday use in the colonies.

Where government had receded, government-supported for-profit enterprises were called in. But private bank money came with very new terms. Whereas Army Bills offered payment to individuals, banknotes were issued through loans, meaning that they came at a cost and with a commitment. To many, this new money felt less a monetary expansion, than a shift of obligations – away from the state and towards these new, undemocratic corporations.

The Bank and the Government

In Toronto and much of Upper Canada, nearly all banknotes were issued by one especially partisan institution, the Bank of Upper Canada. The first chartered bank in the Canadian colonies, the Bank of Upper Canada was founded by Anglican archdeacon John Strachan and his followers in the “Family Compact” – a close-knit conservative political faction that wielded an outsized influence in the colony. Indeed, the bank inscribed its ruling position directly on its notes. The notes proudly announced that the bank was “chartered by parliament.” They bore images of St. George and Britannia, unabashedly mimicking iconography from the Bank of England.

While it never took on exactly the role that ‘The Old Lady’ played in England, the Bank of Upper Canada was explicitly established to represent elite interests and, for a considerable period, it was the only bank chartered in the region. During that period, anyone who needed money would have to either borrow from that bank (in which case they owed it a debt) or work for someone who had previously borrowed from that institution. In either case, money was issued in Upper Canada with lines of obligation running directly to a single, unapologetically anti-egalitarian institution.

This bank’s anti-egalitarian activities were particularly egregious to Upper Canada’s “Reformers”  – a political movement directly opposed to the Family Compact that advocated to make the colonial government more responsive to the electorate. To Reformers, banking institutions like the Bank of Upper Canada benefitted from public legitimacy and support, but lacked democratic accountability. If banks were in a fundamental sense government agents, then their control was a political cause. The interest on their loans, furthermore, was akin to taxation, only not paid into public coffers. With this, banking reform became a central plank in the Reform movement.

The Reformers began by attempting to make the Bank of Upper Canada more accountable, and then by proposing alternate public monetary bodies. Failing in this, a group of Reformers then established their own (unchartered) institution in 1835 named the “Bank of the People.” As with the Bank of Upper Canada, the Bank of the People was erected overtly as a political institution. Its board was made up exclusively of established Reformers, and the bank issued money largely to communities excluded by the Bank of Upper Canada. (Indeed, one of its first loans was to future leader of the Upper Canada Rebellion, William Lyon Mackenzie, to establish his newspaper, the Constitution.) In house, too, the bank joined the politics of credit issuance to the politics of publicity by hosting a newsroom on its premises featuring “the leading liberal Journals.”

Bank of the People notes differed starkly from the Bank of Upper Canada’s, reflecting the different political community to which the bank spoke and the alternative values it sought to express. In the place of British monarchial imagery, its notes feature bustling cityscapes and ports, alongside generic symbols of industry, such as Vulcan and Demeter.

Despite its judicious management, the Bank of the People did not last long. We know it was well run, because it managed to be both profitable and to be the only bank in British North America to not suspend payments during the banking panic of 1837. Still, the Bank lost many of its supporters after the failed Upper Canada Rebellion, and competition with the Bank of Upper Canada led its founders to sell to the Bank of Montreal in 1840.

From the Bank of the People to Banks Today

Obviously, the Bank of the People was established in a very different era from the present moment. There were few banks then, and they carried their association with government on the face of their notes. But much is also the same, as the discourse around SVB’s collapse makes evident. Privately-owned, for-profit banks are still tasked with issuing the vast majority of our money, and this remains, in many regards, a very public mandate.

Banks today are critical public infrastructure, which stand upon a massive edifice of government infrastructure and support. Because we use bank credits as money, when they fail, the consequences can lead to massive economic fallout with a very real, human cost. They also act as a primary vector through which government intervenes in a crisis. (This includes even our recent global health crisis that did not originate in the financial sector.) No wonder they are among the quickest institutions to receive government support when under threat. No wonder also that, in the wake of SVB’s collapse, explicit government support has been offered not only to “too big to fail” banks, but to smaller banks as well – an experience Canada also went through in 1985.

The monetary system that the Bank of the People actively contested is now the norm, but, all the while, its public nature has become less visible to us. Revisiting such democratizing efforts reminds us of the indelibly public role that banks play, and that they were intended to play, since their very introduction into North America. The Reformers movement equally reminds us that monetary systems that appear resistant to change, may yet be subject to contestation. Faced with the legal inability to make the existing monetary order more accountable, the Reformers turned to establishing their own institution. While short-lived and little-known today, the Bank’s example and influence lived on through its participants to influence Canada’s future monetary order. Similarly, today, current public banking efforts (in, for example, CaliforniaNew YorkMassachusetts, & Pennsylvania) remind us that, regardless of how hard it might be to see at times, there is always the possibility of alternatives to elite, private, and for-profit means of issuing money. Times like this, looking to the past may help us to more clearly see our present, and to imagine our future.

Stayed on Freedom w/ Dan Berger

Money on the Left presents a public conversation with Dan Berger about his important new book, Stayed on Freedom: The Long History of Black Power through One Family’s Journey (Basic Books, 2023). 

Berger’s Stayed on Freedom tells a new history of Black Liberation through the intertwined narratives of two grassroots organizers. The Black Power movement, often associated with its iconic spokesmen, derived much of its energy from the work of people whose stories have never been told. Stayed On Freedom brings into focus two unheralded Black Power activists who dedicated their lives to the fight for freedom. Zoharah Simmons and Michael Simmons fell in love while organizing tenants and workers in the South. Their commitment to each other and to social change took them on a decades-long journey that traversed first the country and then the world. In centering their lives, Berger shows how Black Power united the local and the global across organizations and generations. Based on hundreds of hours of interviews, Stayed On Freedom is a moving and intimate portrait of two people trying to make a life while working to make a better world.  

This public dialog took place on February 24, 2023 at the University of South Florida. It was graciously moderated by Tangela Serls (Professor of Instruction in the Department of Women’s and Gender Studies and Special Advisor to the USF College of Arts and Sciences Dean on Diversity, Equity, and Inclusion) and K. Stephen Prince (Professor in the USF History Department).

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Music by Nahneen Kula:


The following was transcribed by Mike Lewis and has been lightly edited for clarity.

Steve Prince:  Well, Dan, thank you so much for joining us. This is wonderful, and I really appreciate the opportunity to do this as a discussion, as opposed to simply a book talk would be wonderful. But hopefully bringing it to a more discussion-based format will be really productive. It is a truly wonderful book. I will echo what Scott said: absolutely beautifully written, engaging all the way through, and powerful and so, so important. So I guess we’ll start with a couple of softballs, and then we’ll save the hard stuff for later. You open the book with a couple passages about the way that you first became engaged with Michael and Zoharah Simmons, so I hope you could start with that. Just how did this book come to be? Who are Michael and Zoharah Simmons? How did you become engaged with them? And why did you decide to tell their story?

Dan Berger:  Yeah, thank you for that, and thank you all for coming. Thanks to everyone who helped organize this. Thanks, also, everyone who organized and participated in the protests yesterday, which I was with you in spirit. I’m very excited to be here even though I was promised it would not be this hot. In a lot of ways, this book began 23 years ago when I started at the University of Florida, the same year that Zoharah Simmons started there. When I started there as a student, the same year that Zoharah Simmons started there as a professor. She had gone back to school late in life to finish first her undergrad, and then ended up getting a PhD. And she was invited to speak to a history class I was in about her experience in the civil rights movement. I was 18, I guess, at the time, and I was just a young activist, trying to figure out some things about the world. I was just really blown away by her presentation about her experiences. She talked about growing up in Memphis, Tennessee, raised by her grandmother, who had been raised by her grandmother who had been an enslaved person. And I’ll just say that I was very close to my grandmother, who was a Holocaust survivor. So I think I recognize something about that kind of connection to a traumatic history that inspired activism in the younger generation really spoke to me in a particular kind of way. She talks about employment in the civil rights movement, where she joined the Student Nonviolent Coordinating Committee, and then also played a key role in SNCC’s turn to Black Power and the rise of Black Power out of the civil rights movement. That was really interesting to me, because at the time, people didn’t really talk a lot about Black Power. It wasn’t in a lot of certainly the kind of mainstream history that I had encountered in high school. So I wanted to learn more about it, and it inspired me on a personal level but it also inspired me intellectually. I went to the library to check out a lot of books, and everything I could to read on, on civil rights and Black Power, and was really struck at the time by how different her experience was from what I was reading in the scholarship and in the literature. Even though we know a lot more about Black Power, we know a lot more about civil rights and the connection between them now than we did then, that experience really stuck with me. After I graduated, I moved to Philadelphia, I met her ex-husband, Michael Simmons, and it was the same thing all over again. They were always kind of on my shoulder, or in the back of my mind as I read other people’s work, and they talked about, “no one in the movement did this” or “everyone in the movement did this” and I would always be like “no one did that?” Because Zoharah did that thing.” Or “everyone did that? Well, Michael did something else.” Just to give two examples, and then I’ll stop for this question. Both Michael and Zoharah were part of something called the Atlanta Project of SNCC, which was the first time that SNCC had an urban project. Most of SNCC’s work was in rural places throughout the South. Most of the literature on the Atlanta Project to this day, in fact, says that this was a group of northerners who had no basis in SNCC who tried to take over the organization. And Zoharah from Memphis was the co-director of the project and became the co-director after three years in the organization and had no desire to be the leader and was never trying to take over SNCC…etc, etc. Alright, so there was already something that was off to me. Likewise, I’ve written a lot and studied a lot of the 60’s era, broadly, and a lot of the work on the anti-war movement of that era sees it as synonymous with the white left. But Michael is someone who spent two and a half years in prison for refusing induction into the military during the Vietnam War and was organizing for Black draft resistance. So there are just all of these ways that their stories expand the scope of that time period, but also of the Black Power movement beyond that time period that I think really kept me honest, as a scholar, reading other people’s work and writing my own. After a while, I asked them if they wanted to collaborate on this book because it seemed like something that could make a difference more broadly.

Tangela Serls:  I love that. And I want to just reiterate what Steve and Scott both said: beautiful work. I felt, at the end, that I knew Michael and Zoharah personally. It was that compelling. Thank you for your work.

Dan Berger:  Thank you.

Tangela Serls:  To that point, the notion of family is a powerful thing throughout the world. So obviously Michael and Zoharah are family, literally, metaphorically. We recently listened to a podcast where the three of you did, and I was struck to learn about the conflict that happened with Zoharah leaving to go to Spelman and her grandmother warning her not to get involved with all of the protests and all of that. And when she finally split and decided not to return, it was a big falling out and all of that. So when she went to join SNCC in Mississippi, straw Lynn (spell check) told her after he sent the money and it got intercepted that “we’re your family now”, because her family had told her not to return. Especially her grandmother was really upset. There really seems to be different conceptions of family throughout the novel. There’s familial love and familial betrayal. And I know that just the idea of family, in general, can sometimes be contested. Family is not always a safe space for folks, so I get that. I’m just wondering if you could speak a little bit more about the meaning of family and all that senses as it relates in general and more specifically, as it relates to Stayed On Freedom?

Dan Berger: Yeah, it’s a great question, and I will try to be concise. I think there’s a lot there to talk about. It was important for me to call this — the subtitle says, “it’s one family’s journey” — I think there’s a lot about the journey there. There’s a lot of travel that happens, criss-crossing the country, and then criss-crossing the world. But it’s also that it’s family, and in the way that you articulated in the question. Part of it, for me, is that sense that family brings together a lot of contentious, contradictory dynamics, right? Where there’s a lot of love, but also, it’s a cliche, but about the basis of Freudian psychology. The wounds between parents and children. This is a biography as well as a movement history, but there’s always pieces of the author in any story. So I thought a lot about the struggles that I’ve had with my own family, and my own activism. When Zoharah talked about choosing the movement over her family’s wishes and some of those breaks that happen there was more intense than anything that I have experienced, and she sacrificed way more and put herself in the line of danger far more than I ever have, and probably ever could. But that sense of a break, and a kind of coming into one’s own required in that moment, or demonstrated in that moment felt familiar to me. And I think that’s something that a lot of people have to go through, whether it’s about their politics or their identity with a fundamental clash that happens with family. So the movement does become family in both the kind of chosen family and the biological family. There’s a lot of pain and even betrayal that happens in this story. Zoharah recounts an experience in the training for Freedom Summer being almost sexually assaulted by someone who was a prominent activist within SNCC. When she tried to report it, other members of SNCC were like, “We don’t have time to deal with this. We’re going to Mississippi. Why don’t you just go along with it?” I mean a very deep betrayal. And also she went to Mississippi and got swept up in the urgency and didn’t even have time to process that betrayal at that moment. Then, later in the book and later in their lives, Michael and Zoharah have a child who was sexually abused by Michael’s stepfather. When Aisha, their daughter, told them about this, they couldn’t handle it. In much the same way that people in SNCC couldn’t handle it when Zoharah raised that; that family could be a site of pain and family could be a site of violence. Those book-end the book, these are echoes of that betrayal in these different forms of family. I think we’re getting to the idea of why the book is called Stayed On Freedom, right? Their consciousness had to be expanded. That was Zoharah’s first sense of realizing that the movement was not only a safe space, but also potentially a site of danger. And it was not until many years after their daughter confronted them that they really reckoned with the fact that they themselves could be silent accomplices, or accomplices through silence, to the ways that biological families could be sites of violence, as well. That’s something Aisha has written a lot about this, and this is a big thing for her own activism. It’s been really amazing to learn from. I think that family is never a kind of static thing. It requires this work, it requires a constant struggle or constant engagement. It’s a learning process for me in writing the book, and I think they learned a lot as we wrote about it as we were going through these histories. There were lots of ups and downs in the seven years of working on this book that they would talk about in our interviews.

Steve Prince: Thank you. You have this wonderful line in the introduction of the book that Michael and Zohara Simmons “seemed representative of the rich messiness of social movements in the modern United States,” and you’ve touched on some of the places that we find the Simmons through their journey. They start with SNCC organizing in the rural south. They take us through the transition to Black Power and an awakening of a Black Power consciousness. But over the course of the book, they’re also involved in union organizing, and anti-war activism, prison activism, and anti apartheid activism. They’re involved for a long period with the Friends. It is just such a remarkable journey that they take us through. And, as you say, “representative of the rich messiness of social movements in the history of the United States.” These movements that we tend to isolate and segregate are all there. These two lives connect them all together. So I was hoping you could speak a little bit about this, this breadth of their political imagination through their careers as activists, and what’s the significance of that broad vision of justice and activism?

Dan Berger:  Yeah, thanks for that. I think that so often, we talk about the 60s, when we talked about these time periods that freeze people in time, that freeze our sense of history in time. Or we talk about particular organizations, but obviously, time goes on. So the 60s become the 70s. Started in the 50s. So we have these lapses of time, but we also have these changes in organization, so very few of the frontline organizations of the 60s, survived the time period. SNCC started in ’60, and ended by ’68. The Panthers started in ’66 and technically lasted until ’82, but really they’re an Oakland organization after 1972. So the organizations that really dominate a lot of our historical consciousness and popular consciousness don’t actually have that long a life in the grand scheme of things. Certainly there’s a lot to be learned from focused organizational studies, and I drew on a lot of those works. There’s a lot to be learned by focus studies of particular places. A lot of the civil rights history has been moved to these local studies of how civil rights play out in one particular county or one particular town, and that’s fantastic work. I wanted to do something different, not as a disavowal of that work, but as an expansion of that work because people don’t necessarily stay in that one town their whole life. And people learn new things from their experiences. I think we get a richer, but also a truer picture of what life on the left looks like, what a political life looks like when we follow people rather than following organizations. Obviously, this is a biography; the biography genre, by definition, is following people. But I think that gives us a sense of how that experience in SNCC led people to ask me questions, and what happens when you leave, or in their case, get fired from an organization? I think there’s a lot of just downright heroism, bravery and courage — inescapable in the civil rights and Black Power movement. And it’s people: there’s pettiness, there’s ego, there’s fights that happen. And if I know organizations that I’ve been a part of have fallen apart over that stuff, why wouldn’t I expect that people 50 years ago, or 100 years ago, or 200 years ago, didn’t also have falling out over that stuff? So I think, for me, it became– I mean, you’re always an evangelist for your own method, at some level, at least when the book was new — but for me, it became, the clearest way to understand not only their lives, of course, but to understand the impact of that movement. The impact of that work is to see that move from SNCC, to the National Council of Negro Women to the Nation of Islam to the American Friends Service Committee to the National Black Independent Political Party, to the Philadelphia Worker Organizing Committee, and others that I’m skipping over. There’s a wide range of groups that express a vast spectrum of ideological positions that operate in a wide range of geographies, and yet, the same people move through them. Right. It connects, in some ways, to your earlier question about family. There’s a quote from Michael in the book, “it’s not this or that, it’s this and that” and that it’s everything. I really think, to me, that just knowing that has expanded my sense of the left or radical possibility to understand that people might have their own ideological proclivities and might find themselves working in organizations that don’t share all of them, but that they do some good work with them, and that they can change and push those organizations in the process. So to me, I think that the AFSC, American Friends Service Committee, was fundamentally changed by Black Power activists including Michael and Zoharah, but others as well, in ways that I think we would miss just by doing a history of AFSC. I think we get that sense of how people persist in that sense of change over time.

Tangela Serls:  I want to tie what you said earlier, Dan, about family requiring work, family sometimes being the site of pain or betrayal, and this notion of what Michael said in terms of it being “this and that”, because that was one of my favorite quotes too, to a question that we had about hope. After you answered the earlier question about family, it’s easy to just think about it like it’s pretty depressing. To that point, in explaining the decision to write the book, you describe a longing to tell a hopeful story after some of your earlier work which focused on incarceration and prison activism. We think you’ve achieved this with both Michael and Zoharah Simmons, and the book is resolutely hopeful, but yet there’s still a lot of darkness and tragedy and violence. So why is it still a hopeful story? And what is the power of hope in this work?

Dan Berger:  Yeah, Thanks. I’m glad that you picked up on that line because I meant that line in a couple of different ways. Partly, I meant it as a pure narrative description. I finished Captive Nation, which Scott kindly mentioned in the introduction, and it’s a book about the role that incarcerated people played in the civil rights and Black Power movements in the 60s and 70s, focused mostly in California. The 60s and 70s is the run up to and the beginning of what we now call mass incarceration. Most of the people I write about in that book died painful deaths, sometimes an internecine conflict, sometimes murdered by the state. Many of those who survived that were interviewed are wonderful, committed people, but deeply traumatized by the things that they witnessed and the tortures that they experienced. It was hard to write that book. It took a toll on me emotionally to do those interviews, to sit with people. I’m the better person for it, so I don’t mean it in that sense. But I wanted to do a book that I thought would be more hopeful, right? Because that’s a book that ends not only with this death and torture and violence, but also that ends with mass incarceration. Here we have this profound movement inside of prisons in this country that was so powerful and such a challenge to the established order that prison systems remade themselves to be more austere and punitive to prevent them from happening. It was grim, friends. So when I was thinking about what I wanted to do next, I thought: let me turn to this idea that I’ve had for a long time, that I think would be a hopeful story, because it’s about that continuation. And I was also a new parent at the time when I reached out to them and really thinking about, which touches on another answer to your question Steve, as well, I was thinking about how we played different roles in the different phases and stages of our life. I was living in a new city that I was still getting used to, and now I had this newborn. I couldn’t be at the meetings, and be at the protests and things the way that I once had been. I loved being a parent of a newborn. Being a parent is the best thing I’ve ever done, and it’s changed how I do things in the world. So I wanted to figure some things out about that. I had a lot of hope in that way. But I also mean that line as a bit of self criticism because, I thought, I’m just gonna tell this hopeful story about ongoing continuing activism, and I didn’t quite appreciate the level that, of course, that’s a story of pain and trauma and betrayal. There are some unique and particular ones, because these are specific people. But that, too, is a story of a life of organizing. So I think that line, for me, was also an honest estimation of that process of how I came to the book and the emotional state of coming to the book. But I also mean it in a way that I hope readers will come away thinking, as you did, that it’s not just a hopeful story, right? There’s a lot of difficulties here as well. I’ve been fortunate enough to meet a lot of people in my narrow sense of the world who I would consider famous. I mean famous in the “on the FBI’s 10 most wanted list” sort of famous. Some of them I’ve gotten to know well enough that I can see the obvious point of any famous person, which is that they’re just people. That, to me, was the takeaway that we can have, as Martin Luther King talked about in a very different context, we can’t have a foolish hope. We can’t have a magical hope that things will just work out because we’re on the right side of history. Or, we’ve made good choices and so everything will be fine. We certainly see that in a myriad of ways right now in the world we live in. So, to me, it was a reconsideration of a kind of naive sense of hope. I hope, I want, I think that the book is better and more hopeful for that. Because we walk through the real difficulties of life or the real difficulties of this kind of long haul commitment and the sacrifices that accompany that in a way that allows us to reckon with those tensions and contradictions and difficulties without glossing over them.

Steve Prince:  Great, thank you. I think we should talk about Black Power. One of the beautiful things about the book is that it is a narrative. It’s a story of a pair of lives, for the most part, but it does make a series of important historical and historiographical interventions, at the same time. I really do admire the way that you thread those in a way that is seamless and organic, but still clear and effective. I think one of the more significant historical claims that you do make regards to the nature of Black Power, in that it is a much broader program. I think you’re basing it in the Atlanta movement on the Black Consciousness paper as a formative moment in the theorisation of Black Power. Can you briefly discuss what Black Power means? Perhaps meant in the mid 60s and then perhaps what it means later for the people who were involved in it, and maybe what the story of Michael and Zoharah Simmons does to our textbook classroom vision of Black Power, where it’s Stokely Carmichael, the Black Panthers, full stop. So speak to the ways that your story hopefully challenges and expands what Black Power means.

Dan Berger:  Yeah, thanks. I would love to. A bit of context that, as I said, the Atlanta project of SNCC, was SNCC’s first time organizing in an urban context. And part of that was an effort to elect Julian Bond, who was SNCC’s communication secretary to the state legislature in Georgia. That happened in 1965. SNCC had long been debating whether to take a position on the US war in Vietnam. And again, if you look at a lot of us are anti war. What is presented as this anti war movement as those “campus anti-war movement,” i.e. what exists at mostly white universities, ’65 means there’s been a demonstration, a big and important demonstration, but there’s not much that has happened thus far. In the fall of 1965, practically on my birthday, before I was born, but the day was when I wouldn’t be born. Years later, Michael and Zoharah met at a SNCC meeting in Atlanta, where Zoharah was advocating very forcefully that SNCC needed to take a position on the Vietnam War. But not just on the Vietnam War. SNC needed to take a position on US imperialism. The US had recently invaded the Dominican Republic, US support for the apartheid regime in South Africa was an increasing topic of conversation. SNCC had always been slyly internationalist which is to say it was very focused on the US, but with a global context. John Lewis at the March on Washington said, “One man, one vote is the rallying cry in Africa. It needs to be ours as well.” There are these ways that SNCC was very indebted to and fired by global currents, particularly in Africa, and Southern Africa. After Mississippi Freedom Summer, a delegation of SNCC people went to Africa and came back and these were moments of exchange. By ’65, people like Zoharah were really adamant that this is a global context and that a critique of the US role in the world was important. Zoharah talks about this monster we live in, and those are archival records of the meeting. So SNCC drafts a statement that doesn’t go anywhere. It sits in the office, and then on January 3, about a month later, a Navy veteran and SNCC member named Sammy Young was shot and killed while trying to use a “white bathroom” in Tuskegee, Alabama. SNCC organized protests about it, but also released this statement. It’s a very powerful statement that you can find on the SNCC digital gateway. It’s still well worth reading. Julian Bond is asked about the statement, and he says he agrees with it. So the state legislature refuses to let him take the seat that he had been elected to. So that’s the origin of the Atlanta project that Julian Bond had to be reelected to a seat that he had won, but was not allowed to take because of SNCC’s anti-war sentiment. Bond’s campaign was abolishing the death penalty, raising the minimum wage to what would be set over $17 in contemporary amounts, pro-unions taking on the right-to-work laws. So it wasn’t exactly internationalist, but it was a very radical campaign. But the fact that it was SNCC’s opposition to the war in Vietnam that prevented him from taking his seat made it already very internationalist. So the Atlanta Project was organizing domestic workers, tenants in Atlanta, but it was also doing anti-draft organizing. One of the favorite parts to write and research was this big protest at the induction center, and this cat and mouse game that Michael did to try and avoid induction into the military. But I say all of this to say that the context of Black Power was very immediate, but also very global from the outside. I think that’s one thing that we often miss with a perspective that says, “oh, Black Power was Stokely Carmichael in Greenwood, Mississippi saying, we have to start saying Black Power” or the Panthers in an armed patrol of the police sort of way. All of those things happened, and are obviously significant, but we miss that sense of the world that I think was at the heart of Black Power. The other thing that is really significant, and is there in the Atlanta Project’s paper and thinking from the outset, is that Black Power was a coalitional politics. So Black Power was a recognition that we needed broad constituencies who oppose racism and white supremacy. SNCC had always been a Black-led organization, but during Freedom Summer, a lot of white volunteers came in, and a number of them wanted to stay and wanted to organize in the organization. SNCC’s constituency was always Black communities. It was rural Black communities, starting to be urban Black communities. So if Black organizers were organizing Black communities and the white organizers were organizing black communities, no one was going to where racism lived to build anti-racist constituencies there. So the idea, there’s a great passage from the Black Consciousness paper where everyone talks about Uncle Tom and no one talks about Simon Legree. No one talks about the white character in Uncle Tom’s Cabin. If we want to end racism, we can’t just organize black people. That was this argument from the Atlanta Project; that we needed broad coalitions who opposed racism and white supremacy. I think Zoharah, in particular, still talks about that. That was part of what inspired me when I first heard her speak was saying we needed white people to be anti-racist, and that meant we needed them to bring other people along with that. That made a lot of sense to me at the time, and I think still does. In the book, I talk about Black Power as both a movement and a paradigm, and I think the movement largely didn’t disappear, but certainly faded by the mid 70s. But I think the paradigm is one that in many ways still carries them to this day. As some of the movement work died down in the way that they haven’t been doing it, they became more international in their outlook. Zoharah travels to Vietnam, and Cambodia, and China, and the Middle East, lives in Jordan for two years doing her research, but also other things. Michael ends up living in Budapest for many years after doing all this work in Central and Eastern Europe and in southern Africa as well. They expanded their sense of the world. I think we can trace that to that meeting where they first met and Zoharah was saying we have to talk about the global arrangement of power and how it can be different. I think it was really important for them to learn from the rest of the world. It wasn’t just charity, but it was a sense that things aren’t great in the US, and maybe people in other parts of the world have some things figured out that we can learn from here, as well. I think that sense of solidarity and coalition that was at the heart of Black Power from the beginning, has guided them throughout their careers as activists.

Tangela Serls:  Thank you for that. I’m going to connect two of our questions, and then connect it back to something you said, because even with that question about Black Power, I was surprised to learn about the call for the coalitional-based politics and, more explicitly, the call for white communities to do inter-communal consciousness raising. A simple question would be, does that inter-communal consciousness raising, does that demonstrate a Black Power paradigm?

Steve Prince:  Thank you.

Dan Berger:  I think that was certainly a part of it. I think consciousness raising is always a part of an organizing process. But I think they really took questions of power seriously. So they’re doing consciousness raising with the tenants in Atlanta. Michael and Zoharah both speak much more powerfully about this than I could, but Michael always says: if I think something can be changed, I should be able to get somebody else to think something can be changed. Part of their work was just getting people who had been beaten down and oppressed just by conditions of life, to feel like they could do something different about it. That’s consciousness raising, but that’s the step toward them doing something about it. Rather than just feeling like oh, maybe this isn’t my fault. Maybe this is part of something bigger. I think that absolutely they would see that anti racist consciousness works in non black communities, and particularly white communities, as a part of that. But fundamentally it’s about policy, it’s about power, it’s about transforming the institutions and structures. The consciousness raising is a necessary step in that process.

Tangela Serls:  Thank you for that clarification, that makes a lot of sense. The other question I wanted to ask, which goes back to one of Steve’s earlier questions about activism, he talked about how very few organizations have a long life with how they die out. So when thinking about the struggle for rights and freedom, the book explains how some of the organizations and movements Michael and Zoharah were part of broke down because they weren’t necessarily rooted in a collective understanding or acknowledgement of struggle. Folks allowed ideological differences to prevent them from moving forward. You kind of talked about that on one of your other podcasts. One of the questions that I wanted to ask: as an historian, can you comment on the ways in which struggle and ideology are compatible and sometimes incompatible, as you seen it, like when you were working on the project?

Dan Berger:  Yeah, that’s a great question. So I think that ideology is important, but I don’t think it’s as important as many leftists think. Amílcar Cabral, the great leader of the independence movement in Guinea-Bissau, and he said it better than I am about to, but something like: people don’t fight because of the ideas in their head, they fight for freedom, land bread, right? They fight for the sort of things in the world that will make their lives better. I think sometimes, again, he said it better you should read his version. But I think the point is that it’s cartoonishly easy. It’s a cliche to think that social change pivots on the point of ideology. This is the Monty Python Judean People’s Front versus the People’s Front of Judea. That these organizations are just constantly split, and that’s all they can do. I think ideology is important to the extent that it gives you a sense of the vision of the world that you’re working towards, and where you’re trying to go. I think ideology, what your values are, and what you’re not willing to compromise on, those are really important things in the world. They’re important ways of being able to locate yourself and locate your sense of proximity to power and your sense of proximity to other people of the organization. But I think many people err in thinking that if you just have the right ideological positions, then you win, and therefore think that the goal is to get everyone to have the right ideological position. What you’re talking about, the parts of the book where things break down, is where that starts to happen. Michael was a part of a communist organization in the 70s. I mentioned earlier, the Philadelphia Worker Organizing Committee that was steering this effort to build a new Communist Party in the United States, across a few different organizations, and they call their effort the Organizing Committee for an Ideological Center. I know what you’re thinking with that name, how could it not take off and succeed? But it failed! And I think, obviously I’m joking about it, but it’s clear that it failed, right? I mean, there are some reasons that you read about in the book. But I think that sense of “okay, we just need to get the right ideology, and then we’ll win.” I think for me, this gets back to what you’re talking about earlier about the role of the power of biography or just thinking through people that people are messy and complicated, and I think electoral politics brings us out so clearly. That people who follow politics very seriously, that have an ideology think, “well, how can this union member vote for Trump?” Lots of people don’t have a developed ideology. They respond to people who they think are fun, or funny or interesting, or whatever the case may be. Obviously, I’m not saying that Trump’s base is union members or something. Far from it, but the point is that ideology only goes so far in actually explaining the political affiliations that people have. And I think a lot of things fail and where I become deterministic, perhaps. But Michael was a part of this communist effort I mentioned, Zoharah was part of a Black nationalist effort around the same time. That was very different, in some ways, ideologically. The particulars of their ideologies were different. But it was similarly ideological, if that makes sense. Their orientation was about: okay, everyone needs to be on the same page as an ideology. They were trying to organize through ideology. And they both failed at the same time. To me, that’s part of their story of why I wanted the book to happen. Because usually a history of Black nationalism and a history of Black Marxism and Black communism, they live in different projects, or at least different chapters. But usually in different books. These are different trajectories, or different tendencies, they are not in conversation. The fact that here you have this divorced couple who are very close to each other to talk politics with each other all the time who were doing really different efforts, but they’re both trying to build these ideological parties. They both fail around the same time. To me why I said this is where I get deterministic is my take away from that is that the early 1980s was an awful time. I think that’s true, separate from the book. Politically, to be on the left trying to organize in the early 80s, there’s lots of reasons why it was a terrible time. It was a terrible time. The idea that getting people to have the correct ideology will be the way out of a terrible time, I think, is mistaken. How you make people’s lives better in a terrible time, I think, is a more generative starting point. I think the ideology can actually come from that rather than leading with ideology, as I think happened in those cases.

Steve Prince:  I think this really is a book about the latter half of the 20th century. It’s not just a book about these two figures, or at least the left and latter half of the 20th century. But I think, really, it’s a book about the modern United States, and its broader context, actually. You manage to weave so much into the story, and part of it is you do have these characters who were really everywhere. For those of you who haven’t read the book, there’s this remarkable succession of individuals who just appear. She sang with Isaac Hayes in her choir, and she stumbled into the church, which is Ralph David Abernathy’s. The guy at dinner is Malcolm X. It’s like, come on. A part of it is just their lives: it’s true. But you also managed to weave in events that they didn’t necessarily attend. Neither of them were at the March on Washington in 1963, but you’re able to write about it. You alluded to Reagan, he’s in this book as well. How did you manage to craft the narrative being true to their own life story, but also connecting it to these larger trends and events and what was your thought process there?

Dan Berger:  It’s funny that you say that. Michael often jokes that he is the Forrest Gump of Black liberation. Many times I mentioned somebody and he’s like “oh, yeah, I went to Cuba with that person.” And there’s something at some level, that’s just profoundly unfair about it. Like, come on. For me, some of it was like, well this is how life works. Right? I mentioned this earlier book that I wrote about as an organizing Captive Nation, and that book focuses a lot on George Jackson, too. How many people here have heard of George Jackson? So, about half of you. How many have heard of Sundiata Tate? Nobody, right? George Jackson was, as he himself would say, part of a cohort, part of a generation of people. How many of you have heard of WL Nolen? George Jackson was mentored by WL Nolen. He would say Nolen was his teacher. The reason we know George Jackson, and we don’t know who WL Nolen is, is that George Jackson was a writer. People recognize that he was a writer and published his writings. Often people who are writers in prison we’ve never heard of. But he was a writer whose stuff was published. That allowed him to get our attention and our focus, but the coin lands the other way, and we know WL Nolen, and we’ve never heard of George Jackson. There’s a dimension of that that I think is true here as well. Zoharah’s RA in her dorm was Alice Walker. Well, maybe if Zoharah was a writer, she’d have a Nobel Prize talking about her RA. So some of it is just luck of the draw. We pass through people who become famous. Like, when she met Alice Walker, she was her RA. She wasn’t Alice Walker. Sometimes we meet the Malcolm X example. Michael was very young, but his brothers were significantly older who were early recruits to the Nation of Islam. He tells us in the book, his conversation with Malcolm X, when he was seven or eight years old, was not about Black nationalism. This conversation was: why don’t you eat pork? Like, that was the craziest thing you could imagine. Right? I think there’s just something deeply human about all of this. And I think that, to me, was the most important thing. I wanted a human book on the left. I wanted a sense of just what it means to be a person. I think what it means to be a person, particularly a Black person who came of age in the time that they came of age is that of course, you saw the pictures of Emmett Till’s murdered body in Jet Magazine. Of course, you watched or listened to the March on Washington, even if you weren’t there. Of course, you were outraged and furious and scared when Ronald Reagan was elected. I think, for me, a lot of the guide was needing to contextualize these lives and make sense of these lives. Also, just thinking, to bring it to my own life at some level that was a little bit of a guide was just thinking if I would write something about my coming of age, I remember when Bush was elected. I remember the walkouts that happened when he was reelected. Yes, I went to class, but I also went to the protest. Those sorts of things are like, trying to choose between them: do I go to this protest? Do I go to this class? I just think that’s part of what it means to be human in a time to be paying attention and things are scary or outrageous or exhilarating or exciting. Some of it came from oral histories from things that they remembered, like being there when this happened. Michael talked about being in Philadelphia when the Three Mile Island nuclear explosion happened. He was just leaving a visit to Russia when the Chernobyl nuclear explosion happened. He just casually mentioned that Forrest Gump of the left commented that he may be the only person who was within 100 miles of both nuclear meltdowns. It was like, okay, that’s going in the book. Obviously. But then things like Reagan, or whatever, that was just such a profound reorientation of American politics and such a profound moment of what you can hope for is possible, as someone who had been a committed organizer for close to two decades at that point. I think it was, for me, clearly a part of their lives, but also just a benchmark to help the reader place what’s happening in the larger arc. It totally works the way you do it. It feels organic. It never feels like you’re forcing the history on the reader. Because I think you’re right, it comes from their experiences, and that’s the focus. Very effective.  Yeah. Thank you.

Steve Prince:  Can we take one more question and then open it up?

Tangela Serls:  I think I’m gonna ask my question about Alice Walker. Okay, so when thinking about the introduction, which is titled “A Love Supreme”, after John Coltrane’s album, and your line, that “freedom is a love story.” I kept thinking of one of Alice Walker’s definitions of Womanism, which is: a Womanist is one who loves music, loves dance, loves the moon, loves the spirit, loves love, and food and roundness, the struggle, loves the folk in herself, regardless. So my question is, did an understanding of Womanism factor into your assertion in any way? And additionally, when writing the book, did you struggle to reconcile the fact that love was going to be one of the foremost themes with the fact that you were writing a historical project?

Dan Berger:  Yeah, that’s great. My initial proposal had no introduction. So that chapter “A Love Supreme”, which I’m very proud of and I’m glad is in the book, was not part of the book. My editor said that I needed an introduction to explain, there’s a preface that talks about how I know Michael and Zoharah, and these were some of the serendipitous connections, which are deeper than I mentioned today, but you’ll see in the book. So I had that, but my Editor said I needed something to frame the big picture of it in a more explicit way. I was thinking about different things, but it just struck me that it’s a love story. Clearly there’s this love between two people who do have a lifelong love for each other, even if their romantic relationship only lasted a few years. But it was less, for me, about the love between them as individuals, though that’s obviously important. But that sense of how they keep going. Ultimately, I came to realize that it’s a choice to keep going. I’ve met lots of people, I’m sure at various moments in my life, I would have said of my own self like, “well, this is who I am. Of course, I’m going to do this. Of course, I’m going to be on the picket line. Of course, whatever, that’s just who I am.” I don’t want to deny that self-description of anybody, but just hearing Zoharah stayed in Mississippi for 18 months after Freedom Summer and had no plans to leave but left because she had several run-ins where she was almost killed by the Klan, and she was incarcerated by the police after demonstration and these were very torturous conditions. She was just starting to have a breakdown, and comrades and SNCC said “you have to leave because you’re not well there. You need a reprieve.” And she could have left the movement. She left Mississippi, but she continued to organize. I’ve interviewed several people for this book, but for other projects as well, who have been part of some of these far left organizations, and some of this ideological stuff we’re talking about earlier, who said that was the last organized left effort I was ever a part of. These are progressive people in how they try to live their lives, but they’re no longer involved in anything. I think we always make choices. We always are deciding to choose to do things or not to do things. So I was trying to think through the best ways to understand that choice of how they kept going, and how they kept going, and the ways that they kept going. It’s just so clear from the two of them. I know you were saying you really met them in the book, and I’m glad to hear that because you do feel in talking to them and hopefully in reading about them that they have different personalities, of course, but they both just have this deep love of humanity, this deep love for social change. I don’t know how else to put it, they just love being in the struggle. Michael had this quote, “I just love being a pain in somebody’s ass.” As a youngest child myself, I relate to that as a little brother sort of response. But I also think it’s just true, right? There’s a lot of joy and playfulness in that idea that I love being a pain in somebody’s ass. So to me it was oh, of course, this is a love story. Once it struck me, it was like, well this is what it had been all along. Even though I didn’t plan it, it was like oh, of course this is what it is. You read that beautiful quote from Alice Walker. I was very inspired by bell hooks, who obviously wrote several books about love and talked about that a lot. But it’s really a constant theme throughout Black political thought that you see these ideas of love being central, but also being centrally embedded in questions of struggle, and questions of a transformation.

Scott Ferguson:  So Tangela had this little slip that I think was really productive. She called your book a novel. Because it kind of is a novel. I think that’s a wonderful way of describing it. It’s rich, it’s love. It’s got all kinds of continuities and threads and divergences and you can just gobble it up, and there’s an all at once-ness about it. I guess this is a craft and method-y type of question. I’ve interviewed some folks, but I’ve never had to do the work of interviewing subjects who are also your friends and your mentors over a long period of time, and taking what is probably a fragmentary, iterative process, and turning it into this. And I’ll put another thing out there, which is: we forget so much. So what I’m wondering is, what was that process like? What was their recall? Was it like, “Oh, I barely remember that day.” I guess I’m just kind of curious.

Dan Berger:  Yeah, so they’re very different in that regard. Michael has an impeccable memory, and will tell you, “it was Thursday at 3:30, and he had a blue pork pie hat.” And that may or may not be true. I’m not saying that in any malicious way, but just that memories are always fungible. But he is so precise, so precise, in a way that is believable. Zoharah falls over herself with apologies that she doesn’t remember anything. And that’s also not true, but she doesn’t have to recall. She recalls feelings, she recalls the emotions, the connection. But she doesn’t recall the order, the timing, that kind of thing. It’s obviously based on a lot of oral histories, but I did a lot of archival work, as well. It was that the archives are very much in conversation with the interviews. I really wanted to use the interviews to capture that sense of the things that only they could know, the things that only they could tell me of what it felt to be incarcerated at the Mississippi State Fairgrounds. I can find the date of when you were arrested, but I don’t know what it felt like to be there. I’ve tried to put them in conversation that way. I thought of people like you, like friends who work in the 19th century or earlier time period, because I would be in the archives, and I could text them like, “Oh, look at what I found.” Like, I remember being in the AFSC archive when I found the press release for when Zoharah got hired, because she couldn’t remember the exact time. So it’s like, “oh, looks like you got hired on this date.” This was right when David Blight’s book about Frederick Douglass came out. He did alright for himself with that book, he didn’t need the help. I think it was definitely very iterative, definitely very conversational. I think there’s a lot of times that I was worried that this book was impossible to manage these multiple, two very deeply braided storylines, but still different storylines, and the amount of archives, and so on. But mostly it was a gift to be able to work on something about people, but also with people. I really think of my scholarly method as relational. All the work that I’ve done, some of it like this still comes from pre existing relationships, but I also meet new people in the process of doing it, including this book. Certainly we’ve become much closer than we were when I started it. I just think the relational dimension of research, anthropologists talk about it a lot, historians don’t really consider it. They just don’t discuss it very much. So that relational dimension is really important to me. Depending on how much you want to go into this, I certainly was both reading a lot of novels, but also listening to novelists talk about their craft. Toni Morrison would talk a lot about how Black life is universal, and to push against this idea that Black authors needed to explain Blackness to non-Black audiences. She was like “fuck that” Black life is universal, like everything about the world is contained in Blackness and Black relationships. I really felt that deeply and I wanted to do a book of that. I think that there’s no way to talk about the left or peace or justice or anything like that that is not rooted in Black Power, specifically, a Black politics more generally. The last thing I’ll say about novels and craft is that I have friends who are fiction writers who will talk about, “I didn’t want to write it this way, but the characters took me there.” As a historian of the left, I often feel like I didn’t want to go there, but that’s where the characters went. So I do think there is something to the craft of writing that I feel very excited about, passionate about, and interested in that I think can translate across genres in ways that I was trying to do this book and was a big appeal to me about doing this book.

Scott Ferguson: Other questions?

Crowd Question #1: Going back to the conversation that opened you up to this at UF, how much did you say “that sounds like me.” How does it fit? I was at Florida State in the 60s, and I didn’t come as an activist other than within the church. But then several things happened in a hurry. Though I was always in favor of civil rights, it was in the news, it wasn’t next to me. And I found myself asking if these issues are fundamental or human. So what’s the connection to the people in my dad’s churches? Pastoring in Powell’s Park (spell check) where there are carpenters, cabinet makers, union electricians. What’s the connection? What’s the connection related to me as a working person?

Dan Berger:  Yeah, I think a lot of studying history, generally, is trying to make sense of my own place in history, and trying to make sense of the world. I’ve had a very different life and upbringing than Michael and Zoharah, certainly temporarily, and all the things that come from being born after Jim Crow, but also being a white Jewish person who grew up in the suburbs. They were both raised Christians, Zoharah is now Muslim. Growing up in segregated environments. A lot of differences. But I do think there is something about that kind of universalism that I was talking about via Morrison, that you were mentioning about the civil rights movement, that has always spoken to me. I certainly was asking myself as I was writing this book. I’ve written stuff about people who have been part of underground movements, and engaged in revolutionary violence. And I can’t imagine myself doing that, I guess I would say. I think the choices that they make here are ones that I could see myself making, even if I haven’t been in some of those conditions that they’ve been in.

Steve Prince:  Can I actually follow up on the violence question since that was something that I was thinking about. Neither of them embrace the notion of armed self-defense really, at all. Am I right? I mean, they’re around people who are considering, right? Am I forgetting any elements?

Dan Berger:  So Zoharah starts carrying a pistol when she’s in Mississippi and is really grateful for the local people in the community who were engaged in armed self defense. So certainly in that ‘64-’65.

Steve Prince:  The landlady sitting on the front porch.

Dan Berger:  Yeah, exactly, exactly. So I think she embraced it in that sense. I was very curious that they didn’t join the Panthers. The Panthers were not a part of their purview. This is just human circumstance: they were in Atlanta, and the Panthers weren’t in Atlanta at that time. They met Eldridge Cleaver, and they thought he was a jerk. So they’re like, “we don’t want to be that guy. What else can we do?” So they knew folks from the Nation of Islam. Actually, the person who built the Atlanta chapter was the person who got Muhammad Ali into the Nation of Islam who, of course, was a childhood friend of Michael’s because that’s how these things go. So they joined the Nation of Islam. I think just that sort of serendipitous sense of it all was really part of it, for me. I think they supported armed self defense and Zoharah engaged in it in the sense that she carried a gun for some time in Mississippi, but didn’t use it. So let me be clear when I say engaged in it. But I think the bigger question of violence is, when Michael was working for the American Friends Service Committee and anti-apartheid forces in South Africa, began armed struggle, and Quakers are a pacifist religion. That was a real strong point of contention for many years. But I think it’s more abstract than armed self defense because it was about somewhere else. It was a more ideological conversation than it was about their own personal involvement.

Crowd Question #2:  First, thank you so much, everyone. This has been really insightful and wonderful. As an activist today, I learned a lot from your discussion of love and the difference between struggle and ideology. I think those are really useful concepts. I guess I’m just wondering, with movements today, we are kind of in a unique moment in which we have these mass communication devices in which we reach more people than ever, seemingly, but yet we still seem stifled by that ability. I’m just wondering if they had any insights into organizing today? Or what you learned from the process of writing this that might be helpful to younger organizers?

Dan Berger:  Yeah, thanks for that. I think that’s certainly a question that they take very seriously, as do I. I think for them, the most important thing is, there’s a sense of humility. Michael has often said he’s been on Twitter, but he doesn’t use Twitter. He’s never been on TikTok. He doesn’t have the knowledge to engage in the communication mechanisms that younger people are using. So he knows that means he’s not in a position to tell young people what to do, because he’s not conversant with the things that younger people are using. I think I appreciate that sense, right? Because as both he and Zoharah would say, there’s a lot of folks out their generation who have a hard time exiting the stage who want to always be the ones in control, or in positions of leadership. I think they both have a sense that people are involved in different ways, in different capacities. And all that is great. They’re not in a place where they are or could be the leaders that they once were. Mostly, I think they’ve shifted to a sense of how to maintain that kind of long haul perspective, to thinking about the kind of movement of movements approach that brings together multiple forms of coalition and multiple forms of solidarity. I think that tends to be more how they operate than a sense of like here’s what you should be doing in a prescriptive way. I think that one thing that I’ve been saying, I think social media, obviously, has been useful in a lot of ways. I think equally obviously, it has wrecked our brains in a lot of ways. For all the ways that it’s new, I think it still exists within a media ecosystem that should be familiar to us, which is to say that they’re privately owned corporations that people try to make use of for their own ends, and have their deep limits that always come from that. I think Twitter has been tremendously valuable in showing the limits of speaking truth to power as a position. Because I can log on to that website every day, and unfortunately I do. But I could log on to that website every day and tell the President of the United States, hypothetically the most powerful person in the world, I could tell him what he’s wrong about. I could say, and I do often say, that your border policy is racist. Whatever, I could do that. That’s true, I am literally speaking truth to power. Twitter allows me access to the president in a way that has never existed before. Previously, I would have to write a letter, make a phone call. Now I can just tell him in a sentence, and it’s absolutely meaningless. It means nothing, right? I might feel better for five seconds, but it doesn’t change anything. So I think, to me, the one thing that I learned is the difference between being right and having power. That’s the shift from civil rights as a kind of orienting point or organizing rubric to Black Power. One of the benefits of that, in my view, is that it did squarely identify questions of power as the object and focus. I think we are better when we shift from speaking truth to power to speaking power to power because when you look at pretty much any issue in the United States today, you will see a discrepancy between what public opinion wants and the policies that exist. Clearly, just the idea of getting the ideology together, or getting people to agree with us is not enough. That’s not how change happens. So I really appreciate that sense of, okay, how do we think about power, both the structures of power that already exist, and the forms and structures of power that we need to create in order to bring about the kinds of changes that we want to see.

Crowd Question #3:  Were there moments where it felt like for your oral history, that the people you’re interviewing are telling you things that you realize weren’t true or miss remembered, or did you have any challenges like that?

Dan Berger:  Most of the ones, at least the ones that I can remember, were things that were not that significant to the story. It was a question of dates, or the order of things. Michael remembered being arrested with one person in the archive, I found he was arrested with another person. And he was like, “I swear it was this person.” But also, archives are wrong, too, right? So it’s not to say that where there was a discrepancy that I always needed to choose the archive. In that specific example, I resolved it by just not mentioning the name of the person. I could just say that he was arrested with somebody else. It didn’t matter to the story whether it was this person or that person. I think most of the discrepancies were things like that, they were details that I could write around because they weren’t consequential to the story. The thing that I was most worried about where that difference would happen is their divorce or separation. A friend once beautifully put it that a breakup is when two people have different stories, and their stories don’t match anymore. And I love that idea. I was really scared of how this was going to work. Both the story of the divorce and also the story of how and when and why they didn’t respond to their daughter’s abuse. Why they didn’t when she raised it, or why it took them so long to acknowledge it. I did those interviews separately when talking about their divorce, when talking about Aisha’s abuse, and their response. In part, because their lives were separate at that point, so I wanted to talk to them in isolation. We had a lot of interviews together, and they really did jog each other’s memory in really wonderful ways. But also, it was important to have time separately to hear how they would process it separately. Some of it is luck. But I was amazed at how similar their stories were. Now, again, they had different details, but they weren’t in conflict. So Michael talked about some of the things about the divorce from his perspective. And Zoharah had different details. When we think about history as argument, they had the same argument for why it didn’t work. The different details that they offered were not contradictory. They were just perspectives. In another context for another project, I did have an oral history where I really felt like someone was trying to pull one over on me. And, ultimately, I appreciated the time that he spent with me, but I haven’t done anything with it because I just didn’t trust it enough to do anything. But that’s a totally separate project and nothing to do with one.

Scott Ferguson:  I’m wondering about Michael and Zoharah’s own reception of the book. A.) I would imagine you shared chapters along the way and maybe got notes, so I would maybe like to hear about that and B.) With the finished product and going through all the reviews and the edits. This is like a mirror or several mirrors of their lives. How are they feeling?

Dan Berger:  Yeah, so I didn’t share individual chapters along the way, but I shared the manuscript with them, I think, three different occasions. I didn’t share individual chapters in part because I was often figuring things out from one chapter to the next and everything felt tentative. We spent a lot of time, when I approached them about doing this book, just figuring out what it would mean to do this together. So let me say that. And we are sharing any royalties that come equally between the three of us. It was important that this not be an extractive project, that it would be deeply and materially collaborative, not just ideationally collaborative. In the agreement that we drew up, I think it said something that I would share with them in the actual process, but obviously I would anyway. But in the actual process of doing it, when I had a draft they were like, “Oh, you’re done? We’re just hanging out! Like, what do you mean? There’s a book here?” They were surprised when I had a draft. I gave them drafts more times than they read them. My sense of timing now is off, as well. I think I got a lot of feedback after the first one, and then definitely at the final one when it was like: here’s the last chance to change anything. I don’t think I got much in the middle reading, if I recall, but the first draft was significantly longer than this one. They definitely corrected a few things like, “well, you said this, but it meant this,” or “the way that you use this quote feels different from the rest of the passage.” We refined a few things from that point. Not many, but a few for sure. I think their biggest disappointment is that it’s not 200 pages longer. Not in an aggrandizing way, to be clear, but in a sense that there’s three paragraphs in here that was a whole chapter, right? There’s a whole really interesting, really fun thing to Zoharah’s time in New York after she got pulled out of Mississippi. She’s cursing at Ishmael Reed for dating a white woman, and just very funny and interesting things that end up on the cutting room floor. I was sad about that. There was a lot of Michael’s time in Europe that is not in the book. The book ends, for the most part, in 2003, which was only moved to Europe. So I did one interview with somebody about his work in Europe since then, but that’s work that he was really quite proud of, and was sad about not having in the book. Pre-COVID, I had planned a trip to Europe, and I wanted to do all this archival work and interviews. It just wasn’t possible. That’s their biggest complaint so far. It’s been a month. I think there’s some interest in how some other former SNCC comrades will respond to it because the way that former SNCC people talk about Black Power has changed to become more pro-Black Power, but still very anti in that project (spell check). There’s some stories in here where they don’t look good, but there’s some stories in here where some of their comrades don’t look good. So far, no one has said anything about it, of that crew. But I think that’s what we’re all curious to see.

Crowd Question #4: I really appreciate your comments on balancing hope with also dealing with pain and trauma and violence, and I just wondered if you could talk a little bit more about how delicate that balance is in that process, because I think they’re both so important and they’re so often intertwined.

Dan Berger: Yeah, I’m a big fan of Mariame Kaba who talks about hope as a discipline. I think that’s how to reconcile them or how I reconcile them because there’s so much to be despairing about in the world, and I think it is objective to despair. I think an objective appraisal of the scenario is grim, but it’s not hopeless. I think differentiating between them is critical. I remember I went to Memphis with Zoharah to see where she grew up. I went to church with her, like the second or third time I’ve been in the church my entire life, at least for a service. She was driving around the neighborhood, and she’s saying, “this was the dividing line of segregation.” Like “this was the white neighborhood, this is the black neighborhood” while we’re driving. She’s like, “Oh, this was where this white man exposed himself to me. This is where, if you came over here, the white kids would throw rocks at you as we went to the bus.”  Just walking through the petty indignities of Jim Crow, and now, it’s a totally different neighborhood. Which is not to say that it’s necessarily a better neighborhood. She was also like, “this was a thriving black business district.” And now, it’s a bunch of abandoned buildings…But I guess I’m trying to say that driving around, getting this tour from her, I was really struck by how many lives she’s lived. Here was someone who grew up and could tell me those very specific sites of Jim Crow. Now, I have to use my imagination, because we’re driving through them in the very specific context of neoliberalism of whatever you want to call it, our contemporary racial and economic order, where a formerly segregated neighborhood is now an all Black neighborhood, and a formerly mixed-class neighborhood is now a very poor neighborhood, like exclusively very poor. It was very full of people and now has lots of abandoned houses and abandoned stores. Here’s someone who lived through all of that, and who did a lot to make the good parts of that change happen, and who still works against the bad parts of that. I don’t know that I quite have the words to express it. but there is something very hopeful for me about that, that we could tour through Jim Crow in a way that I had to use my imagination on those specific sites, but that those sites are constantly changing. I think that sense of the inevitability of change is the fact that the inevitability doesn’t point in any one direction. So change is a constant, but whether that change is, broadly and simplistically speaking, good or bad is undetermined and unknowable. That’s where hope as a discipline, as a framework, meets the realities of the world for me.

Postmodern Money Theory! (Part 2)

In Part 2 of Superstructure’s “Postmodern Money Theory!” series, Rob Hawkes and Scott Ferguson explore B.S. Johnson’s postmodern novella, Christie Malry’s Own Double-Entry (1973), which self-consciously weaves money and accounting into the very fabric of literary form. Regarded as brokering a broader transition between modernism and postmodernism, Johnson paradoxically conceded that “to tell stories is to tell lies,” while remaining committed to the revelatory “truthfulness” of literary form. In Christy Malry’s Own Double-Entry, Johnson tells the metafictional story of a disaffected young man, Christie Malry. Throughout the book, Malry applies the principles of double-entry bookkeeping in response to injustices in his life, “crediting” himself against society in an increasingly violent manner for perceived “debits.” 

Our co-hosts trace Christy Malry’s multifaceted approach to accounting, which cuts across questions of money, narrativity, enumeration, and reckoning in economic, ethical, historical, and even biblical senses. Affirming the text’s defamiliarizing insights, Rob and Scott unpack how Johnson’s satirical and estranging use of language unsettles dominant visions of money as a merely finite and located particular. At the same time, however, they also weigh the book’s problems and limits, flagging Johnson’s unquestioned white masculine framing of accounting, for example, despite his socialistic aspirations and attentiveness to form’s social restrictions. Stay tuned for the third installment of “Postmodern Monetary Theory!,” in which Rob and Scott further plumb Christy Malry’s Own Double-Entry for its postmodern lessons about the aesthetics and politics of credit and debt.

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Mikhail Bakhtin Pt. 1 – Carnival Laughter & Grotesque Realism

Will Beaman (@agoingaccount) inaugurates the first of a lecture series on the work and ideas of Mikhail Bakhtin. Drawing parallels with right wing attacks on contemporary drag performance and ballroom traditions, Will discusses Bakhtin’s analysis of the Medieval carnival humor, its manifestation in Renaissance literature, and its unique aesthetics of what he terms “grotesque realism.” Quotations are drawn from the Introduction and first chapter of Bakhtin’s text, Rabelais and His World (1965), with additional references made to Siegfried Kracauer’s 1927 essay “The Mass Ornament” and Marx’s Capital

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Never Let a Crisis Go to Waste w/Rohan Grey (Bonus Episode)

In this bonus episode of Money on the Left, Rohan Grey joins co-hosts Scott Ferguson and Billy Saas to assess the epistemological and political implications of the Silicon Valley Bank (SVB) failure. While orthodox economics and law tell us that economic crises are essentially matters of private risk and market discipline, Rohan, Scott and Billy argue that blatant federal mediation throughout the ongoing SVB crisis exposes money’s public and contestable nature. Rather than another story of capitalist contradiction or bankers behaving badly, then, the SVB crisis opens contemporary money politics to a host of invaluable tools for a stable, just, and green transition: democratic state and municipal credit issuance; public digital banking; focused credit regulation and demand management; and full deposit insurance without arbitrary and destabilizing caps. 

For more on the significance of the unfolding crisis, see Nathan Tankus, “Every Complex Banking Issue All At Once: The Failure of Silicon Valley Bank and Five Quick Implications.”

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Postmodern Money Theory! (Part 1)

Launching a new Superstructure series, Rob Hawkes joins Scott Ferguson to explore the ins and outs of “postmodernism.” Postmodernism is a heterogenous and disputed regime of aesthetics and theory that arose in the second half of the 20th century. Dated to midcentury, but promulgated as a discourse from the 1970’s to 1990’s,  postmodernism is known primarily for its preoccupations with multiplicity, difference, surface, language, image, constructedness, reflexivity, and the integration of art and everyday life. Decades past its heyday, postmodernism today frequently serves as a pejorative for reactionary critics of social and ecological justice and aesthetic diversity. In their conversation, Rob and Scott critique noxious voices both outside and inside of today’s Modern Monetary Theory movement, who similarly wield postmodernism as epithet to discredit and police money’s contestable public capacities to provide for all. Our co-hosts dismantle such false zero-sum invectives by weighing the historical nuances and semantic surfeits of terms including modernity, modernism, postmodernity and postmodernism. As a result, this episode prepares the groundwork for a forthcoming engagement with B.S. Johnson’s postmodern novella, Christie Malry’s Own Double-Entry (1973), which self-consciously weaves money and accounting into the very fabric of literary form. Check out the second installment of this series here.

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Gramatneusiedl’s Job Guarantee w/ Thomas Schwab

This month, Money on the Left is joined by Thomas Schwab who, as mayor of Gramatneusiedl in Lower Austria, oversees a promising Job Guarantee pilot program. Seeking to eliminate long-term unemployment, the program guarantees public jobs to anyone in the community who seeks them. In our conversation, we explore the philosophy and structure of Gramatneusiedl’s municipal employment service. We also discuss a key inspiration for the program: a Depression-era study of the effects of unemployment conducted in the same region as Gramatneusiedl. Titled “Die Arbeitslosen von Marienthal” (or, “The Unemployed of Marienthal”), the report detailed the deleterious effects of systemic unemployment in wake of a severe economic downturn and soon became an early classic of European sociology. Decades later, Schwab wrote a master’s thesis about the report, aiming to revive its findings in defense of public employment today. The Gramatneusiedl program is presently being studied by Jörg Flecker, a sociologist at the University of Vienna, as well as Lukas Lehner and Maximilian Kasy, economists at Oxford. The pilot is set to expire in 2024. Thereafter, however, Schwab and his allies anticipate leveraging current academic studies to renew and potentially scale up Gramatneusiedl’s public employment program.

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The following was transcribed by Mike Lewis and has been lightly edited for clarity.

Scott Ferguson:  Thomas Schwab, welcome to Money On The Left!

Thomas Schwab:  Hello, thank you for the invitation. I’m very excited and look forward to an interesting conversation.

Scott Ferguson:  You are presently Mayor of Gramatneusiedl, a small town of roughly 3,000 people in Lower Austria. We’ve invited you to speak with us today about a municipal employment program you currently oversee that guarantees public jobs to anyone in the community who seeks them. Before getting into the details of the program, would you mind telling our audience a bit about your personal and professional background? How did you become Mayor of Gramatneusiedl?

Thomas Schwab:  Before I tell you something about myself, I would like to introduce Gramatneusiedl to your audience. Gramatneusiedl is about 15 kilometers away from the city limits of Vienna. As you probably know, Vienna is the capital of Austria. Due to its proximity to Vienna, the population of Gramatneusiedl has risen relatively sharply in the last 20 years and today – you mentioned it – we have around 3,700 inhabitants. In Gramatneusiedl itself there are not too many jobs. Many people commute to work in Vienna or other communities in the area every day. Therefore, Gramatneusiedl is close to the city, but still in the country. We still have a few farmers in town who cultivate the fields around our community. Many young families have moved to us in recent years. Mainly because we can provide good care for children and young people in Gramatneusiedl – with kindergartens, an elementary school and a middle school. We have very active organizations and clubs that shape life in our community. For example: a volunteer fire brigade, a brass band and of course a soccer club. From my point of view, Gramatneusiedl is a livable small town with many advantages that make this place very attractive to live. Now about myself. I’m 52 years old. I’m married and have two children who are now 19 and 17 years old. I’ve lived in Gramatneusiedl my whole life. After kindergarten, I went to school here. After compulsory school, I completed a high school with an economic focus in Vienna. At the beginning of my professional life, I worked at Vienna Airport and for a company that manufactures safe systems. For around 30 years, I have been employed by a supplier for the automotive industry in a neighboring community of Gramatneusiedl. I worked in accounting for this company for many years. I’ve been on the works council for around 20 years, which is currently my main job. I work full time in this company – that means at least 38.5 hours per week.  From 2005 to 2009, I studied beside my job in Vienna. At the end of my studies, I wrote a master’s thesis that dealt with the world-famous study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal” – but maybe more on that later. I have been involved with politics in Gramatneusiedl practically all my life. My father was active in the municipal council of Gramatneusiedl for many years. As a child, I learned how to shape and positively change the lives of people in our community. I myself have only been active in local politics for around 13 years. In 2020, I was the lead candidate for the Social Democratic Party in our community. We won the elections and achieved an absolute majority of mandates. In our federal state of Lower Austria, the Mayor is elected by the municipal council in a constitutive session. I was elected Mayor of Gramatneusiedl with 15 out of 21 votes from the mandataries. My group, the Social Democratic Party, has 11 seats on the municipal council. The next municipal council election will be held in 2025.

Billy Saas:  Very cool, and we became aware of your work in Gramatneusiedl through a — Did I do okay?

Thomas Schwab:  Yes, it’s fine.

Billy Saas:  Okay. We became aware of your work through The New Yorker article [by Nick Romeo], which was published in December, and it was titled, “What Happens When Jobs Are Guaranteed?” Can you give us an overview of your experience with that, with being interviewed for that piece and talking to the folks for The New Yorker and a sense for how this story came to be?

Thomas Schwab:  I think a reporter of The New Yorker also was informed that there is a new kind of program for long term unemployed people, and he visited Gramatneusiedl and wrote this article. The idea of the guaranteed jobs program was developed by the Public Employment Service of Lower Austria. This organization wants to show a new way in the labor market policy. Today, it is usually the case that the Public Employment Service tries to find jobs for the unemployed. For unemployed people, this can sometimes mean that they are unemployed for a very long time. This system turns those affected into supplicants and can lead to different difficulties for individuals.  After deciding to carry out this experiment, the Public Employment Service of Lower Austria looked for suitable municipalities. Essentially, a community was sought whose long-term unemployed corresponded as closely as possible to the average for Lower Austria in terms of the age of the unemployed and the duration of unemployment. Apparently, Gramatneusiedl met these criteria best. The historical reference to Marienthal certainly also plays a major role, because Marienthal is inextricably linked to the term unemployment through the study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal”. After Gramatneusiedl was selected, there were initial talks with the head of the Public Employment Service of Lower Austria, Mister Sven Hergovich, who presented the project to our community. I wasn’t mayor back then, but my predecessor involved me in the discussions and in that way in the project.  Overall, the Public Employment Service of Lower Austria asked three potential organizations to develop this project for the long-term unemployed and to present the possible implementation. I don’t know the individual concepts. The fact is that the organization named “itworks” was entrusted with conducting this experiment.  As a municipality, we have supported “itworks” from the start, for example in finding suitable premises. The cooperation with the people involved worked immediately. Since the start of the Guaranteed Jobs Program, we as a municipality have been awarding contracts to “itworks” in order to enable the project participants to do meaningful work for the community.  Through the work in the community and making people visible, this project did not encounter any resistance that I know of, on the contrary, there were many positive reports – especially about the quality of the work done. I think that was also part of the article in The New Yorker, where the reporter interviewed the participants, and I think, more or less, he gave that picture to the readers of The New Yorker. And that’s why we talk to each other today.

Jakob Feinig:  Thank you for this. How would you describe the philosophy behind the program? How does this philosophy shape the program structure, its rules and also its operations?

Thomas Schwab:  It is clear to me that the market does not solve the problem of unemployment. Because just reducing the price of work – people’s income – until a company offers work cannot be right. On the one hand, we want an income from which we can live, on the other hand the working conditions have to meet our standards. Unfortunately, there are not always enough jobs in a region. A company will not hire anyone if there is no work. We saw that very clearly if we look back in the 1930s, when people didn’t want any wages at all, only food for their work and still couldn’t find work. For this reason, for me, the neoliberal economic approach is wrong!  In my view, the idea of the Guaranteed Jobs Program was developed precisely to refute this approach. This program tries to respond very individually to each person. There are usually reasons why people become unemployed and unfortunately sometimes cannot find a job for a long time. The philosophy behind the program recognizes that each participant has strengths and weaknesses. For example, someone may not be sufficiently qualified to find a job or may be too old to be hired. From my point of view, people often become desperate after a long period of unemployment and do not even try to find work anymore because they have the feeling that they are not needed. In the Guaranteed Jobs Program, an attempt is made together with the participants to find a job that is suitable for the individual. The wishes of the project participants are also taken into account, as is the extent of the possible working hours, for example. I think it is very important that participation in the Guaranteed Jobs Program is voluntary. If a participant decides to take part in this program, they will receive an employment contract and will not be unemployed any longer. With few exceptions, all of the long-term unemployed have accepted the offer to participate in the Guaranteed Jobs Program. It is the task of the program to find a meaningful activity. There are job opportunities in the program, but also public contracts, for example from the municipality of Gramatneusiedl. We have also established contacts with companies that have now placed individual orders with the Guaranteed Jobs Program. For example, apartments are renovated by the project participants and prepared again for the next tenant. You have to be unemployed for at least a year to be able to take part in the program. About 150 people have decided to participate so far. I know many participants who have found a job in a company again. I think that’s the most important thing: to be ready for the job market — to be ready to be able to get a new job in the primary job market. That’s the goal of the whole program.

Scott Ferguson:  So we’ve been mentioning a few times in our questions and answers so far, the fact that this program has been subconsciously inspired by history, and in particular, this depression era study of the effects of unemployment in this very region. The English title, as you suggested, for this report, was called “The Unemployed of Marienthal”. And the report became an early classic of sociology. Decades later, you wrote, as you said, a master’s thesis about the report. Can you tell us a little bit about the report? And why was it worthy of a master’s thesis, however many decades later, and how has it helped inspire you to engage in what you’re doing today?

Thomas Schwab:  Yeah, I think The historical study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal” is quite rightly a standard work in social science. Essentially, the fate of people who became unemployed overnight after the closure of a textile factory and unfortunately these people did not find work for a very long time.  You may now be wondering what Marienthal has to do with Gramatneusiedl. Marienthal was never the name of a separate community, but only the name of this textile factory and the associated workers’ settlement. Most of Marienthal is in Gramatneusiedl – for that reason the connection.  In my view, this explanation was necessary at this point.  From my point of view, the most important chapter in the study is entitled “Fading Resilience”. This chapter clearly proves that the long-term unemployed have lost all drive and motivation. Even though they had all day, they didn’t do anything. While the women had to take care of the children and the household, the men were completely lost. Before unemployment, there was a rich cultural and sporting life in Marienthal. During the period of unemployment, people were not interested in these activities. It was similar, for example, with borrowing books or other leisure activities. The study shows very impressively how long-term unemployment changes people. This is exactly where the Guaranteed Jobs Program comes in. The Guaranteed Jobs Program enables project participants to use their time wisely and gives structure to the working day. The social contacts with the other project participants are also very important – just as working people have these contacts in their companies.  In my master’s thesis, I tried to compare the Marienthal of the years 2008/09 – there was an economic crisis at that time – with the historical Marienthal. For that reason, the title of my work was “Marienthal – 75 years after the publication of the historical study “Die Arbeitslosen von Marienthal” or “The Unemployed of Marienthal”.  The link was, of course, the crisis situation, but you can compare the 1930s with the financial crisis at the end of the 2000s. The decade 2008-2009. Of course, in the historical study you had a situation in our community that was like a laboratory. Nobody has a car. The people were used to walking in our village and they don’t have the possibility to go to another community where they can work. And also, of course, there was a global crisis with horrible figures of unemployment. And therefore, I tried to ask the same questions as the scientists did in 1930. But of course, I was alone, it’s only a master thesis and not this study with 17 scientists. They spent months, approximately half a year here in Marienthal. And of course, they had much more experience with all these things. But at the end of the day, I wrote the study and a lot of literature connecting with this study. Therefore, I think I know quite well how the people live and what’s going on in Marienthal at that time. Therefore, for example, we had a small museum here in our village, and we did some tours with interested people. I really appreciate that each time because a lot of people are interested in that topic, of course, because unemployment is, unfortunately, a topic all the time because people will be unemployed also in the future. Therefore, it is also very interesting that the people today have the same problems as the people in the 1930s. As I mentioned before, the problem is that they had a lot of time, but they had nothing to do in that time. After a long period of unemployment, we know that people are frustrated. And they stop searching for work because they don’t think there is somebody or company who needs their work. Therefore, I think you can compare the feelings of the unemployed people from the 1930s to today. It’s the same situation, of course, the work itself is another work with the textile industry completely changed. Most companies are not in Europe anymore. But of course, if you’re unemployed, you have the same problem as the people in the 1930s, and the only huge difference from my point of view is that you are more mobile. That means you have the possibility to go from, for example, Gramatneusiedl to Vienna, it’s no problem. You can also go to other places in Europe because of the European Union. That was not possible in the 1930s. But I tried to figure out in my small work that there is something you can compare, and there are things you can compare at the end of the day. But I can only recommend the historical Marienthal study to your audience. Unfortunately, I think we cannot discuss the study for a long time because we will have a lack of time, I think. But I hope that some people will know that the historical study is quite small — not too many pages to read, but very, very interesting. I’m sure that people will understand that the problems are more or less the same. The times are changing but the problem of unemployment, especially long term unemployment, is the same as it was in the past.

Billy Saas:  So how have community members, people living in Gramatneusiedl, responded to the jobs program? How is it affecting the community and individual lives within the community? And then I guess finally: would you call it a success?

Thomas Schwab:  Yeah, I have briefly indicated before that the response from our community members has been consistently positive. Of course, in a small community, it matters a lot if about 150 out of 3,700 residents are or have been participating in this program. Every project participant has his family and his friends and talks about this program. Of course, there are also very isolated negative voices, but that’s life. Generally speaking, the individual project participants are part of our public life. On the one hand, when they work in public within the framework of the project, but on the other hand also as self-confident community citizens. The positive coverage in numerous domestic and foreign media certainly contributed to this. In these reports, project participants were often shown or quoted – whether on television or in print media. Some former project participants have even found new work in Gramatneusiedl.  From the mayor’s point of view, the citizens of Gramatneusiedl like that more can be done for the municipality through this project. We cannot do all the work that we should do ourselves. For this reason, the project participants help to keep Gramatneusiedl nice and well maintained.  I have the impression that the Guaranteed Jobs Program is a great success. At the end of the project period, the results will be scientifically evaluated. The previous interim reports of science give hope for this result. I think these reports or the media: it looks fine, it looks perfect. It seems that it will be a success, and I’m sure that we will see the results in a very positive way after the period of this project. I’m looking forward to it.

Billy Saas:  Would you say there’s anything particularly special about Gramatneusiedl that makes a jobs guarantee program especially suited for it? Or do you think that other communities, say in Austria or smaller cities, towns, villages or maybe bigger cities could use this, could do this program and could follow this model that you’re setting with the program in Gramatneusiedl?

Thomas Schwab:  I’m sure that it would be possible to do this program in other communities, as well. But I’m sure that it makes sense to start with this program in a quite large community because there you have the possibility to make it visible. That means they do work for our community. That was in all the discussions with Sven Hergovich and the Public Employment Service. One of the goals that we should or would like to give the people the chance to work for us because we would like to use the resources of this program, as well. But in a smaller village it makes no sense, I think, because there are not enough long term unemployed, thank God. We had a significant number of more than 100 long term unemployed people before the program as we know it started and we had a lot of people who were unemployed for more than three years or a longer period of time. That means, of course, the research work before starting this project and selecting Gramatneusiedl was more or less to find a community who is in a range that is able to manage that. If they studied, for example, in Vienna, Vienna has 2 million people. It makes no sense because there is no organization from my point of view in Austria who can manage this. Therefore, they had to find an organization who is able to do that in a smaller town like Gramatneusiedl. At the beginning, approximately 100 people split into two groups. They started with the program in October 2020, three months later, the next 30 people started with the program and so on. Therefore, it makes sense to do that in these steps, and you have to also think about, maybe we’ll talk about that a little later, that you need, of course, new participants for the program as well. It makes no sense if you had a project period of three to four years, and then there is nobody, not any unemployed in the village anymore. There needs to be some size, but not too much. I think all these thoughts were made before they started to select because they had to know how many people can be part of this project and who can do this job for the Public Employment Service.

Jakob Feinig:  Yes. So I have an additional question, which would be: given that there was so much positive media coverage, and that there does seem to be very few critical comments, what do you think about the political possibility of scaling this up to Lower Austria, to the entire country, maybe beyond the country? What’s your take on that?

Thomas Schwab:  Yeah, I think, of course, there is a political chance there. But as you know, the mainstream of political thinking in Europe, also unfortunately in Austria, is more or less I would say a conservative approach. That means all these programs are hard to roll out to the whole country because you need the government of, for example, our province Lower Austria, as well as you think bigger of the whole country. Therefore, of course, you need the political will because unemployment is a sensitive topic in politics. That means you always have the discussions: why do people get money, and they don’t work? And maybe, for example, in that case, a lot of companies are searching for workers or for people who can work, and there are some unemployed, and it’s easy to see why they don’t work. We know that there are a lot of different reasons. That’s why I’m really glad that we have the possibility in Gramatneusiedl because now we have no long term unemployment in our village. I think that’s one of the first things that is really really positive, especially of course, for the people. On the other hand, it shows that there is a possibility to manage the topic of long term unemployment. If there is a will. I think there is a political chance there. But you need all the politics for doing that and bringing that in a wider range and then a larger area. I think that is not a huge problem. I’m sure that if the results of the program will be ready after ending the program, the political discussion will be harder. Then we have the results and it is connected. That’s also a fine situation for us with scientists from the University of Vienna and the University of Oxford. Therefore, a lot of media coverage came out of these scientists. They told the story, they wrote reports, and a lot of people are interested in that in the perfect world, I think.

Scott Ferguson:  So you are getting so much positive feedback from the community, from researchers close and far, and also the press, and even the international press. But you’re also very cognizant of the fact that this very much pushes against, both in its philosophy and its implementation, is very much against the reigning neoliberal and conservative ideology. So are the people, the organizations, the institutions who hold up this conservative ideology, are they just letting this fly under the radar? Are they worried? Are they speaking out against it? Are you playing out a happy utopian experiment and no one seems to know or care who might be politically rattled by it?

Thomas Schwab:  I think it is discussed, and a lot of colleagues, a lot of mayors contacted me, or we talked about this program. Everybody would like to have this program in his community, of course, because the results are positive. But on the other hand, politics is more or less a game. You would like to find voters, and I have to be careful, but I think it’s more or less a game. You try to find out where you can catch as many voters as possible, and the group of unemployed people does not have a large pressure group behind them. There are no unemployed people in the Houses of Parliament in Vienna, for example. There is nobody fighting for them. Of course, political parties do that, but in Austria, on one hand, we spent a lot of money in COVID times for all measurements for the people, and much more for the companies. On the other hand, we discuss unemployment payments and all other social payments for people. They do not have the highest income, to say it very carefully. That means it’s easy to fight against them, to say that’s not the best way because they do nothing for the community. On the other hand, we know it is not their goal to be unemployed in a high percentage of cases. I think that’s also one of the positive things in this guaranteed jobs program because most of the people who were invited to be participants of this program said: yes, I would like work. Of course, with the different possibilities they have. At the end of the day, only a handful of people have joined the program up to now. I think that’s one of the reasons why we can say to the people that if an unemployed person is offered a job, then he will do the job if it fits more or less to his qualification or other things if he is not. If it’s in our region, of course, because it’s not possible in Austria, compared with the US, you move from your home village to 500 kilometers away for work. Not very usual in Austria at that time. But, of course, there are some challenges in the program. Challenge for the program is, as I mentioned before, the number of possible new project participants, and a lot of discussions will take place after the end of the jobs program because then we have results from scientists, and nobody from politics can say this is all nonsense, I think. Therefore, I’m quite sure that the discussions will be harder and will be more direct to the topic if the program is over, when the project period is over.

Billy Saas:  You mentioned that the project and the program itself is being studied, and the data is being analyzed by researchers at the University of Vienna and Oxford. Could you tell us a little bit about what you understand to be their preliminary findings? What are they discovering and how are they contextualizing what y’all are doing alongside other kinds of contemporary debates about things like public investment, unemployment, automation, and so on?

Thomas Schwab:  I think the accompanying investigations of the addressed scientists are a very important part of the project. Sven Hergovich, head of the Public Employment Service in Lower Austria, put forward the thesis that the Guaranteed Jobs Program costs about the same as the costs for an average unemployed person. We’re talking about costs at the start of the project in Austria of around 30,000 euros per year. Since no final results are available yet, there is currently only a debate about whether a job guarantee is a sensible solution or whether the current system should be retained. I am convinced that the results will show that the Guaranteed Jobs Program will be the more sensible and cheaper solution for society. The fact that long-term unemployment can be avoided or, so to speak, defeated by this model, is an important finding so far.  From the point of view of the mayor of our community, of course, I also see the support for the well-being of the community citizens. Thanks to the work of the project participants, our community has become even more livable and some of the citizens – the project participants and their families – are happier. I think we see the positive influence today: we see the positive influence since the project has started, and I’m sure that we will see that also in the future. For me, this is a great success. From the point of view of a citizen of Gramatneusiedl, we see also the people — they work now, they are more part of our community because they stayed at home and are frustrated because they have no money, they have no job. The major point is that they understand money for working now within this program as if they would sit at home and receive their unemployment payment. That means they have no positive influence from the income side, but on days that they have the chance to find work they see that they have useful work for themselves and they have the possibility to create their own job, more or less. If they would like to do something new, for example, they will have the possibility to try that. It’s not possible if you go to a company and you have no experience to say I would like to do the job, you will have troubles to get this job in normal times. Maybe sometimes it works, but normally you have no possibility to do completely new work without any experience, and in the job guarantee program, you have the possibility to learn new things, you can change your professional life a little bit, and with this experience out of the program, you will have better chances on the primary job market.

Scott Ferguson:  Can you give us a sense of some of the particular jobs that have been created or filled in the program? And what kinds of services or goods or forms of maintenance are they involved in?

Thomas Schwab:  For example, for our community, they do a lot of gardening work. We had a lot of things to do in that way. For the community itself, it makes sense that they had a lot of people. They have a lot of time and they do this work. They have instructors in different kinds of work. They do some renovation work for apartments as well as furniture; they have their own workshop there. It depends on the instructors, what they can do on a more or less professional basis. On the other hand, they do some creative things. They do all the things with textiles or something like that. They produce some goods, and they sell it on the weekly market in Gramatneusiedl. Also, they have their own market within the, that’s also an interesting point, they are located with their workshop and with their meeting rooms and the offices of the project within the historical textile company building, more or less. In former times, the director of the textile company lived there. After this period of time in the next company, which was located in that area, there was the office building. They are located in the same area as the historical textile company. They had a lot of interviews with the participants before they started to work, and they had the possibility to tell them what they would like to do as they try to find a way to give them the possibility or to give them the chance to try these things. Therefore, it’s easy for some of them to learn new things. On the other hand, of course, companies in our area are looking for workers or for employees, and they contacted me in the past, asking: “how is it possible to get workers out of this program?” And we tried to bring them together and yeah, a lot of people had the chance to start working in a company and I think they are happier.

Scott Ferguson:  Can we hear a little bit more about the instructors? Where are they sourced from? Are they permanent employees of the Public Employment Service? Do they come from elsewhere: do they have other jobs and they volunteer? I’m curious to hear about the details of that part of the system.

Thomas Schwab:  As far as I know, they come from the organization “itworks”. The organizations I know are familiar with working with unemployed people. They have a lot of activities in Vienna, and an instructor normally comes out of Vienna to Gramatneusiedl or we work there for the whole time. But they are employees of the organization itself, and they are trained, they are familiar with these kinds of people because they also have their projects in other communities, especially as I know that in Vienna. In Gramatneusiedl, the responsible people try to find out with the participants what they would like to learn, what they would like to do, which possibilities they have, which opportunities they can fix with them. Then, they come to our village and work with them.

Jakob Feinig:  Could you maybe explain what “itworks” is? What kind of organization, what kind of history, trajectory, and experience they have?

Thomas Schwab:  As far as I know, they are specialists for social projects themselves. They do a lot of work with the unemployed as well as with elderly people. They do that on a professional basis. They work together in Vienna also with the Public Employment Service. As I explained before, three of such organizations were invited to find a solution, to find a concept for these long term unemployment projects in Gramatneusiedl. They are well known in this scene for the public employment service, they will know them. I didn’t know them before, I have to tell you that. But I think in Austria, a lot of organizations work with people, and they get their employees from the market and the jobs they are looking for should fit the employment programs. If they work with old people, for example, they need other qualifications as here in Gramatneusiedl. But I don’t know them really well because we are glad they are here and we didn’t talk about their other work, more or less.

Billy Saas:  Are you aware of or have you become aware of, since the increased media attention on your program, of any other similar programs that are either sort of in proposal stages or being developed? Or maybe in fact, are underway? I’m not, but I wonder if you might have become aware of other programs? No?

Thomas Schwab:  No, unfortunately not. I think that’s why we get the whole coverage of the media.

Billy Saas:  Yeah.

Thomas Schwab:  Because it’s unique. Of course, there is a conservative government that rules Austria at the moment. Despite this, the Public Employment Service managed to get this great project and the financing of 7.4 million euros, I think, off the ground. I think that’s a huge amount of money. On the other hand, Mr. Hergovich and his colleagues had the idea, and now we have this experiment. We will see how positive the results are at the moment, if there is a possibility that the politicians will use that as an example and find a way to implement it in, for example, the region of Lower Austria or in the region of Austria or somewhere else in Europe. I’m sure it is possible all over Europe because we had similar systems in some countries, therefore, it should work in that way. That can be an example for a lot of people that it is possible to do something against long term unemployment, and I’m looking forward to that. As I said before, Marienthal is not only linked to unemployment. Maybe in the future, also well known as a village to find a solution against long term unemployment with this guaranteed job program.

Billy Saas:  Part of the reason I asked that is that, yeah, I’m not aware of any others either. In the early 2000s, there was a similar sort of program the Hefe y Hefas in Argentina, which has gotten some attention and comes up every now and then. There have been, in recent years, more experiments in cities and municipalities, towns, villages, experimenting with a universal basic income where they just cut a check to people. I wonder: what would you say to those who might come to you and say: “Why induce people to labor in the first place? Why not just cut a check to those who are long term unemployed?” And I think you’ve given us a sense of what your answer would be in terms of like the social and sort of mental, physical health, and well being benefits that come from working. Would you have any other answers? Or what else would you say to someone who said, maybe just do a universal basic income with those 7.6 million euros next time?

Thomas Schwab:  I think, if you have a basic income, it’s another kind of discussion, for me, because that’s more or less another approach because everybody would receive the same amount of money. And if you do some work, you will earn more than other people. Yeah, I’m not sure if that is the solution for unemployment. Because if you receive, for example, 1,500 euros per month, and you are fine with that, you will not work. Then we have the same problem. You will not be part of the society, you will stay at home, you have no social interaction with your colleagues, for example, in a company. You will be fine, you will be able to pay the rent for your apartment, the energy, and you can buy some food. I think that’s a fine approach, but I’m not sure if this will help in every case. In Austria, you don’t have an income for all, but you have a minimum standard of income that’s not enough for living, but it’s also a possibility to increase the demand. Therefore, it would not be a huge problem, but I think it’s another kind of solution. It makes sense to me. I think in Sweden, or somewhere, they tried it. As I wrote in the newspaper, they were not 100% happy with that, and I think we have to try another approach. Maybe in that direction, but not in the same process, because the results will be the same. Here we are in another topic: employment, unemployment is more or less living. If you sit at home and do nothing, and you have enough money, the chance that nobody does anything is quite higher. We live in a time where a lot of people, even though they are neighbors, don’t know more than 10 people in their surrounding. Of course, a lot of social interaction happens in a company or university, for example, if you go out of your flat. Therefore, I think it’s an interesting discussion and basic income is also a good approach, but it’s another topic. I think it would help us in some cases, but I’m not sure if this is completely the best solution. A job guarantee program for long term unemployed is the solution to help the people come back to the society, come back to work, in a positive way or help the people to do something where it’s no pressure because working in a company, something is another work as if you work in the program and you don’t go out of the program because you are not ready for the job market. Therefore, it’s different to other things because you have the possibility to choose if you would do something more or not, it depends on the personal condition and on your personal behavior and on your possibilities. Do you have the possibility to go to another village because you have no driving license, for example? When I started work in my company, the first shift started at 5am in the morning. There is no public transport. You cannot come to the company, and all these things are very, very different. If you have such a program, you also have opportunities that the people will do their work. Maybe within the program, maybe for the community, but not for a company. There’s no pressure on it. You are also fine if you work only 10 hours a week there; you’re not forced to work 40 hours a week because if you work 10 hours a week in a company you only earn a few euros of money. As much time as you work, as much money will you receive from your company. In that case, you have the possibility to find solutions for people who are not in the condition to work, for example, the whole day or the whole week.

Billy Saas:  We’ve talked quite a bit about the jobs guarantee program being a solution for long term unemployment. I wonder, one of the things that excites me about the idea of a larger scale job guarantee, perhaps, is the notion of what it offers for those who are currently employed in work that is not good or rewarding or who might be short term unemployed, but would like to try something new. Could you say something about how you imagine a program like this, if it scaled up, what it might do for those who are, say, in jobs that they don’t like, doing work that they do not find meaningful. Do you have thoughts about that?

Thomas Schwab:  Yeah, I think at the moment, we have a quite good time for people who would like to change their jobs. We have large amounts of fluctuation in Austria, also in normal years, but now a lot of companies are looking for new employees. Now, people have the possibility to quit their job if they are not glad with the working conditions or with the salary or something like that and find another job. At the moment, it’s easy to do that. That’s maybe a difference to the US. In Austria, we have unemployment payments. If you’re unemployed, you receive money from the government. You will always have people who change their jobs or they are short term unemployed. I think the one year period of time you have to be unemployed, that you are more or less a long term unemployed, is connected with the period of time you can receive some money from the government out of the unemployment payments. It’s not a good deal in Austria because, unfortunately, you receive only 55% of your income as an unemployment payment. That’s not the best percentage in Europe. In Belgium or other countries in Scandinavia, the people who are unemployed receive much more money. But at the end of the day, I think the problem is if you try to implement a guaranteed jobs program for all unemployed, it is not possible for any organization in Austria to deal with that. Therefore, it makes no sense to try that. Of course we have the Public Employment Service whose job it is to find a job for the unemployed. Of course, it’s easier in one case, and it’s more difficult in another case because the jobs are different, the qualifications are different. It is necessary to look where the jobs are needed, in which region they are needed. For example, as you probably know, in Austria, tourism is a strong economic factor. But tourism is more or less within the Alps or in cities, and the people are not there in that amount of necessary employees. As I mentioned before, nobody from Gramatneusiedl would go to Kitzbuhel to work in a hotel. If he has a family, if he has a house or an apartment here, why should he do that? That’s also an end point within the discussion: what is possible for the unemployed and what will the government force them to do? And that’s a huge discussion all the time because, of course, you have other kinds of unemployment in Austria as you have in the US. There is another culture connecting with work, as we have it, here in Austria or in Western Europe. There are a lot of people, and it’s growing more and more. They are traveling around the world all day, but a normal worker with not that much skill is more or less fine if they are in their community. They don’t want to go away from home in most cases. Therefore, it is a problem. On paper, it’s easy. You have at the moment 300,000 unemployed people in Austria. We need 200,000 employees somewhere. Why are 300,000 people unemployed? That’s the argument of the right wing parties, especially. They argue in that way.

Billy Saas:  Perhaps there’s no agency or institution in Austria yet that could handle a universal guarantee of a job. But thank you so much for being so generous with your time, Mayor Thomas Schwab. Thank you for joining us on Money On The Left.

Thomas Schwab:  It’s a pleasure. I enjoyed it a lot. Thank you for the invitation, once more. I wish you all the best. And I hope that we will see that this program we discussed will be a part of the programs all over the world to get rid of long term unemployment. That’s my hope. I hope you will hear a lot about this program in the future because I think it’s a wonderful idea. In our small village works, more or less. Very, very good from my point of view. Thank you, also for your time. I’m looking forward to hearing the podcast.

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mike Lewis (transcription), & Emily Reynolds of The Buffalo Institute for Contemporary Art (graphic art)

Money & Solidarity in Latin America w/ Andrés Arauz

Money on the Left is joined by Andrés Arauz, recent candidate for the Ecuadorian presidency, heterodox economist, and outspoken advocate for the creation of the “Sur.” The Sur is a complementary currency for use in intra-Latin American trade and cooperation. Dismissed by New York Times blogger, Paul Krugman, as a “terrible idea,” Brazilian President Lula De Silva’s proposal for development of the Sur as a tool for encouraging economic and political integration between Latin American countries has stoked the imaginations of progressive leftists within and beyond the region. As he makes clear in our conversation, Arauz is among those who see in the Sur urgent opportunities to build plurinational solidarities among countries like Ecuador, Colombia, Brazil, and Peru, as well as to diminish the hegemony of the U.S. dollar and financial institutions over Latin American economies and politics. Arauz offers an astute and defamiliarizing perspective on the Sur for anyone who may be committed to or uncertain about the political economic potentials of a SUR-driven future for the Latin American Left. 

In our dialog, we speak with Arauz about his time serving as director of the Ecuadorian Central Bank. Remaking an orthodox organization with heterodox tools, he not only oversaw the Central Bank’s transition from a neoliberal handmaiden for corporate interests to a robust public institution in Ecuador’s complex “dollarized” economy, but also empowered and secured the country’s network of local credit unions by integrating them into the Central Bank’s federal payment system.

Money on the Left is proud to present transcripts of this important conversation in both English and Spanish.

Andrés Arauz on Center for Economic and Policy Research (CEPR):

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Music by Nahneen Kula:

English Transcript

The following was transcribed by Mike Lewis and has been lightly edited for clarity.

Billy Saas:  Andrés Arauz, welcome to Money On The Left.

Andrés Arauz:  Thank you very much for having me. I’m excited to be here. I’ve been following your work for the last few months and years, and I’m happy to be here.

Billy Saas:  Oh, that’s exciting to hear. We’re excited to have you here with us, especially now, because these are some pretty historic times in Latin America with six now (very recently, seven) of the most populous countries, including for the first time Colombia, run by leaders with progressive left politics. How would you characterize this moment and its importance for the future of the region?

Andrés Arauz:  Well, this is a very exciting moment for progressives, especially people in Latin America that already lived through the first pink wave, the first progressive tide in the region. Of course, now there’s a bit more maturity in the progressive space, in general, and I think we have learned a few lessons. One of the most important issues that we have learned is the importance of regional integration. Right? So we know that one country by itself will not change the world. One country by itself will not change the major dynamics of the world system, or come out, in a sustainable way, out of poverty and transform its economy, its industrial base, and so on. We know that that can only be achieved with a regional plan or integration. And I think that has definitely been incorporated into the left’s agenda. That’s why this is a critical moment in history, because now we see that President Lula, who just arrived to power only 10 days ago in Brazil, and has already faced the first putsch attempt, has said that regional integration, specifically with South American countries, is one of his key priorities in his foreign policy. So this is exciting for us, with the leadership of Lula, of course, the situation in the region changes completely. We see that the sort of extra regional forces like the US have also taken note of this shift towards the left, and that has implications for the entire region. Hopefully, we will overcome all these putsch attempts and violent threats against progressive forces. And this can be not just a reaction, a resistance in opposition to the forces of Empire, the forces of Neocolonialism that threaten progressive politics all over the region, but that we are able to actually build something. And I think the monetary, the financial issue is definitely something that we can achieve in a short timespan. Because of the electoral dynamics in the region, I would like to insist that for Latin America and progressive politicians and those who are leading the countries, we don’t have an infinite timespan. We have a very limited window of opportunity, which is exactly this year, 2023. If we go beyond that, it will probably be much more difficult, because of the domestic political junctures, the correlation forces, and so on. So I think this year is the year of hard, hard work, and to put things in order and get them rolling.

Scott Ferguson:  So how would you understand Ecuador’s place in this particular historical moment? And I’m wondering, in your experience, taking advantage of this particular historical opening, how have you pursued speaking about money and public financing from a heterodox point of view and communicating that to everyday people?

Andrés Arauz:  Okay, so let’s begin with Ecuador’s role in all of this. Ecuador, unfortunately, right now is headed by the antithesis of progressive money with policy, which is a banker. A neoliberal billionaire banker, who has completely sided with the IMF in their conventional, and old school, and effectively-demonstrated false and incorrect policy advising and policymaking, and he’s leading the country into a major economic crisis. The country of Ecuador is probably the country that has least recovered after the pandemic. So it hasn’t grown, really, because of very restrictive monetary policy and fiscal policy, in general. He is promoting capital flight as part of the government policy. Just yesterday, or I don’t know when this will air, but very, very recently, he just announced that he will scrap the money outflow tax that we have in Ecuador. It has been there for a while. So that will promote capital outflow. But the thing is, his main line of business as a banker is actually to own an offshore bank based in an offshore center in Panama, whose approximately between 80 to 85% of all deposits actually come from rich Ecuadorians. So it really is very messed up for any country, in general. But for my country, it actually hurts, you know? When you have a president whose main line of business is to actually promote capital flight to his offshore bank based in Panama. And of course, all the policy is changed to fit his line of business. And it’s actually quite absurd, but also a bit disgusting, because he has not quit the bank, he has not put his shares into a blind trust or whatever. No, he has been explicit about holding his property, and that’s very sad. Also, because if you extrapolate this or you zoom out a bit, you’ll see that this is the type of character that will oppose a proactive role that has always been Ecuador’s foreign policy, except for this government, to be a part of a regional force. To be part of a regional bloc. So he will most likely oppose all these initiatives, and it is very sad because until very recently, Ecuador was the capital of UNASUR: it was the head seat of the headquarters of the South American Union. The former President Moreno, who betrayed his program, and now Lasso, have resigned, have renounced the fact that Ecuador was the Capital of South America, the city of Quito. Fortunately, on the other hand, Ecuador’s population is markedly progressive. So in the last elections, where I ran, Ecuador’s population voted around 70% for progressive parliamentarians. The presidential result was not exactly the same: I lost by just a bit. But the parliament is overwhelmingly progressive with social democrats, with progressives with what we call the indigenous movement of plurinational national forces. They are over two thirds of the parliament. And the population, in general, is fairly progressive, as well. So this means that sooner rather than later, Ecuador’s population will step up, will start exerting their democratic rights, and will probably have a changeover in the administration. It is very unlikely that the current president would be reelected. And we will have a progressive government in place to align themselves with the regional integration project. You also asked me about how to approach heterodox money and heterodox economic policy in this context, and I have several hats that I wear all the time. In the context of my own country, I am predominantly a political actor within my country. Ever since the election two years ago, I am now seen as a political player, so it’s a chance to be in the media quite a bit. It’s a chance for my social networks to have plenty of followers, and it’s important to try to relay the message adequately. I tried to share my knowledge in very lay terms and with fairly easy vocabulary, but mainly showing contrasts. I think that’s been a very effective way of communicating to people, to large segments of the population by contrasting either policy recommendations or policies from orthodox money, monetary policy or in general economic policy, with what can come about with a heterodox approach. That’s my hat that I use within Ecuador, but outside of the country, I have, perhaps, still more of an academic hat on. I use my knowledge to communicate to specialists and specialized media, to those, perhaps, that are monitoring the international financial institutions, in general, and try to use that sort of language to reiterate and to insist on my academic credentials, which I think is also important in terms of legitimacy building. That’s more or less what I do. I work in several spaces, always around issues related to money and technology. I’m pretty happy in that space and trying to change the world with my knowledge, my brain power, with the networks that I can try to build. Hopefully, we can also leverage that to further develop and transform my own country.

Billy Saas:  As you’re doing this communication work, are there any other thinkers who model the kind of communication that you aspire to? And then under the broad banner of heterodox economics, are there any schools or perspectives that you find yourself more consistently drawing on?

Andrés Arauz:  I haven’t had any specific person in mind in terms of how to model the communication. I have been exposed to many leaders and to many economic thinkers. I can’t deny the incredible and important role model that, for example, Rafael Correa has been in terms of economic policy communication. He used to have a weekly radio program where he explained the economic policy and government policy to the entire population. It was a program that lasted between two and four hours every Saturday. And then, of course, making issues easy and communicating them to people using PowerPoint slides and so on was also, I think, something that did not only affect me, but it was a style of communication that everyone in my country got to be familiar with. In terms of economic thinking, though, I definitely recognize the influence of many Latin American economists that have been around ever since Raul Prebisch; structuralists and dependency theory thinkers. More recently, I think the influence of Post-Keynesians has been very explicit in my economic thought and practice. I would say that I would ascribe to the broader Post-Keynesianism, and then there are many smaller groups within that broad school, and I like to gather elements from all of them. I have really grown to like some of the main elements gathered by the separatists, the French separatists school with some Italians in there as well. My PhD work includes a lot of their work, as well. Specifically, Augusto Graziani because I specialized in payments systems, and in money dynamics, and the role of banks, and so on. And I like to consider that as well. But also, and this is perhaps something that is related to more of Latin American context, is what I call the Solidarity Economy school; economia solidaria in Spanish. The Solidarity Economy is very important in our region because we are a late comer to industrialization. We’re a late comer to capitalism, itself. We’ve been under basically feudal economies well into the last century, the 20th century. Solidarity Economy is important because it is a way of including those who were excluded by the capitalist system. If you analyze my country, or my neighbors, between 70 and 80% of the working age population is not a formal worker. They’re not under a capital-work relationship. They are basically survivors in a system where they have to find a way to survive every single day. That doesn’t fit into any neat economic theory, so Solidarity Economy tries to say: okay, what can we do as people that have been excluded from the system? Let’s save each other. Let’s cooperate. Let’s build community. Let’s build a cooperative economic system where we can recognize that we are partially excluded from capital and capitalism, but we have to talk to capital and capitalism. We’re partially excluded from the state, but we have to interact with the state, as well. We are divorced from our own realities because we have to survive. We also have to work together. We have to become cooperatives, we have to get together into associations. Even though we’re not a union, or a Workers Union, we have to come together so that we can negotiate in better terms with the forces that be. Solidarity Economy, I think, has a very important and marked influence in how I think about development. Yeah, there are probably many more that I’m missing right now, but definitely some of these that I’ve mentioned.

Scott Ferguson:  When you ran for and nearly won the presidency of Ecuador in 2021, the press liked to note that you would have been the youngest president in the country’s history. But we find it just as remarkable, if not more remarkable, that you already served as Director of Ecuador’s central bank when you were just 24. How did this situation come about? What drew you to that work in monetary policy in the first place?

Andrés Arauz:  I would have to definitely mention my Masters thesis director Pedro Paez Perez. He was a very important person in my early stages of professional development. I actually got my Bachelor of Science degree at the University of Michigan Ann Arbor in both math and economics, and then I went back to Ecuador and started doing a Masters in Ecuador. The order is usually the opposite: people get a local degree, and then they get a Masters abroad. I did it the other way around. Actually, it was very, very helpful because when I enrolled at FLACSO, which is a Latin American university that has offices in different parts of the region, in my case Ecuador, all my professors were going to become ministers of finance, planning, development, central banking, and so on. My thesis director, Pedro Pais, had been a central bank researcher, so when he became Minister of Economic Policy, I became his advisor.  I was actually 22 when I was advisor to the Economic Policy Minister. I was in charge of what we called the new financial architecture, which is basically proposing a transformation of the domestic financial system, but we were also working on transforming the South American financial system and their institutions. I worked with him on a lot of those issues, and I got to know the central bank from the outside. I was an advisor to the ministry, but most of my work had to do with the central bank. So I was able to criticize it all the time and to push them to make changes and so on. It’s important to mention that before all of this, I had worked at the central bank. I was a statistician at the balance of payments statistics area, and my job allowed me to see the individual transactions of money that went in and out of the country. I got to see names of people, names of companies, and that knowledge has always been valuable to me because when an economist goes and finds the statistics, you see a bunch of numbers, you see a bunch of aggregates, you try to build a story in general terms, in general concepts. Well, when I see statistics, and when I see these numbers, I don’t see general stories and general concepts. I see people. I see the companies. I know their behavior. I know their patterns. I know exactly who we’re talking about because of that experience that I had failed more than 15 years ago. So that’s definitely a plus when you build the policy, when you know what makes up the statistics, and how much of it is also just hot air and how much is actually rigorous statistics building. I always thought that statistics, and therefore accounting, were absolutely crucial if you really want to do rigorous economic analysis. That’s also why I sometimes laugh when I see colleagues putting out all these nice, econometric models and using numbers as if they were some sort of physics and hard science when a bunch of these statistics are absolutely made up and have very strong deficiencies, or very large, significant deficiencies. I’ve actually written quite a bit about problems about monetary and balance of payments statistics Anyway, to come back, I was an advisor to the Economic Policy Ministry, and we had a major issue because the central bank of Ecuador had been ran, perhaps over two decades, by the most conservative, Orthodox people in the country, and with clear links to the more powerful bankers. So in 2008, under Correa’s government, we had a new constitution of Ecuador, which was a very interesting process of democratization of lawmaking. We had thousands and thousands of people propose amendments, and changes, and wording, and so on, for the Constitution. And eventually, I really think it’s a piece of artwork, the Ecuadorian constitution. It is very progressive, it is forward looking, and one of the things that the Constitution did was to change the nature of the central bank. It said that the central bank would no longer be independent. It will no longer be autonomous, that it would be democratically accountable to democratic forces, and therefore be part of the executive branch. Now, we’re also a dollarized country, but with a non-independent central bank, that was run as a branch, effectively, of the executive government, and the President was a PhD economist. Okay, so this was a very particular moment in time. And if that guy wanted to have the central bank also comply with the new constitutional mandates, which also changed for the central bank. For example, we have financial inclusion as a constitutional objective, not just inflation or whatever. You have a list of constitutional mandates for the central bank. You wouldn’t find anybody in the central bank staff that would even understand much less so be aligned with the new constitutional objectives. So since I had a monetary background and I specialized in those issues, and I knew the central bank both from the inside, and the outside, because I had been able to live within its framework, but also to criticize it from the outside. I became the general banking director, which is basically the one in charge of the central bank’s operations. It was a very happy moment for me because I was fairly young, but I already, perhaps, could be considered an expert in central banking affairs. And I knew the workings of the payment system, the reserve management areas, the international payment systems, and financial institutions. I knew accounting very well, and it’s key to know that if you’re running a central bank. And I had the correct political orientation as to what were the key transformations that I had to achieve within the central bank, so as to instead of destroying the institution, leveraging the institution to fulfill these new constitutional roles. So I had a key role there in transforming the central bank into what it still is today, even though we now have, again, a conservative government. But because we had very important changes in place, even in the culture of the central bank, I think it’s difficult for them to revert all of that. So that’s how it all came about. It’s a really nice story, and I think it’s not easily replicable elsewhere in the world, unfortunately, but there are many things that on the margin can be done to use an immense power that any central bank has in any society to democratize that society, to democratize its economies.

Music Break – “This is Not America” by Residente

Billy Saas:  So moving from critic of the central bank’s activities to someone who’s effectively directing them, were there things that you learned or surprises that you encountered in your new position on the inside? Did anybody take your place as the critic from the outside? And what was that criticism of your work like?

Andrés Arauz:  Well, to be honest, no. There was no strong criticism at the time because, like I said, we were moving really fast.

Billy Saas:  Yeah.

Andrés Arauz:  This academia in Ecuador had been dominated by neoliberal thought by neoclassics and no real thought about heterodox monetary policy, and so on. The payment system was something that was completely out of the discussion, out of the debate. None of that. The central bank’s proactive role in the economy had been forgotten for the last 20 or 30 years, and so on. So the people in academia, even the right wing academia, had no idea what we were doing. They looked at the balance sheets, and they just couldn’t figure it out. They didn’t even know how to read the balance sheets, because they had excluded that sort of training for a long time. So the first few years, there was really no criticism, not because they didn’t feel like something was wrong, but because they didn’t know what to do about it. We had also kicked out the IMF and the World Bank from our country. We had expelled the World Bank from Ecuador. The IMF was still in the country; they used to occupy a large office at the central bank, and they didn’t pay rent. So we said, “no, if you don’t pay rent, you get kicked out of the building.” And of course, they didn’t have as much access to what was going on within the central bank, either. So there was really nothing that they could do or say during that time because we were making changes in the plumbing of the system. We were working on, for example, democratizing the payment system by something so simple as retrofitting the telecommunications requirements for connecting to the payment system, and for making a light version of the software available for credit unions. In Ecuador, we had over 600 credit unions that were operating, but were not included in the payment system. So they weren’t able to offer the same kinds of financial services, transactional services, payments of government wages, and so on, like big banks were able to. So just by democratizing the payment system, we had a revolution at the base of the pyramid where rural credit unions all of a sudden became a major force in the economic system. These guys were part of the Solidarity Economy, so they had another value system in there as well. Not just capitalist banks, right? Just by democratizing the payment system—something that we did out of the mainstream or the media’s radar—we were able to make major changes. Now, when did they start to pick up when they, by then, I mean basically right wing academics, opposition pundits, and so on, was when we started the launch of what we call the mobile money system. Ecuador was the first central bank digital currency. Now it’s a fad. But we did this 10 years ago, and the project started in 2009. So this is like 15 years, 14 years ago. We changed the regulations so that citizens, any citizen, all they had to have was a national identification number, so their ID, and that was the only requirement to open an account at the central bank. A central bank digital currency, we called it mobile money then. It was designed in such a way that was perhaps another tenant of my way of thinking about technology, its appropriate technologies, rather than vanguard technologies, or the latest thing. You need to make technology appropriate to people’s needs, not to just…

Scott Ferguson:  Disrupt.

Andrés Arauz:  Right, so we had this mobile money that would work with the most basic feature phone, without the need of having a smartphone, without the need of having a data plan. All you needed to do was dial a shortcode, and you will get access to an entire system to transact. And that’s when the right wing opposition started to criticize. I had been out of the central bank by the time it actually launched, but that’s when they started to pick up on some of the major issues. In part, because one of the main people that they recruited was a former central bank guy, who then went to work for the private bankers association, and is now working at the IMF. So this person is perhaps the only one that was able to educate the right wing as to what was actually happening. And now it’s only about 10 or 14 years later, writing about what we did in 2009, 2010, and 2011 with a critical perspective. I think it took them a while to understand what was going on. People, when they think about a dollarized country, they usually say, “you lost your monetary policy, and you’re screwed,” and so on. That’s not true because when we went into the central bank, and when I was an advisor at the Economic Policy Ministry, we said look, sure an Orthodox dollarization removes all of those tools and possibilities and policies and you just sort of quit and say: I renounce everything and let the markets dominate. But in a heterodox dollarization, it forces you to be creative. You will have an advantage, which is that you have a stable unit of account, which is actually a challenge for many developing countries that try to apply heterodox economic policy. You get these devaluations, depreciations, people lose faith in the currency because of the pundits and the markets react quickly. But when you have a dollarized economy and a stable unit of account, you can be a bit more creative without worrying about these speculative attacks, because they have nothing to attack. So then you really start to play with actual issues that depend on credit creation, and the role of banks in society, and the workings of the payment system, and the velocity of circulation of money, and how the securities market operates. You can be more creative without worrying about issues like speculative attacks. For example, we have a neighboring country, Colombia. President Petro is also an economist. He’s pursuing a heterodox policy. But of course, the speculative attacks against the Colombian currency are there, and you have an Orthodox central bank that is not aiding or helping or contributing in that same heterodox orientation. So it’s much more difficult to be heterodox when you don’t have all the pieces aligned.

Scott Ferguson:  So do you still have a critique of dollarization, despite having a more nuanced, creative, heterodox, experimental approach to moving and creating institutions, and developing forms within a dollarized country?

Andrés Arauz:  Absolutely. Yeah, I’m critical. First, we have to understand that there are many dollarizations, right? I’m critical, absolutely, of dollar hegemony, for example. So this is geopolitical. This is a colonial thing. The south does not have to use a New York or Miami account to make payments between Uruguay and Peru. Why, right? So dollar hegemony, and the fact that dollar hegemony contributes to imperialist measures like economic sanctions, unilateral coercive measures that are destroying entire countries. Furthermore, if you put dollar hegemony together with transactional systems such as SWIFT that are a global monopoly, and if you cut them off SWIFT, you are also effectively cutting them off. And it’s basically being weaponized. Money as a weapon, and the plumbing of the system used as a weapon, I’m absolutely critical of dollar hegemony. I will continue to be so, and I will try to build alternatives because I don’t think the world has to subject itself to one country’s currency. I think that it has to be a global system, and that means going towards a more democratic, multilaterally-based economic monetary system. Just like it was dreamt decades ago, almost 100 years ago, by key thinkers such as Keynes: you have the Bancor, a global monetary asset. Of course, there are key power players. We cannot deny that, but let’s have a more balanced approach. Now, that’s one issue that has to do with dollarization. For example, dollarization of international transactions, of international trade, and so on. Then there’s the issue of domestic economies and adopting the dollar for domestic means of payments. Like I said, one thing is the dollar as a unit of account. Another is the dollar as the actual physical means of payment that people use on the street. I think that even if you’re dollarized de jure like my country is, it’s best to try to replace the physical dollar used for means of payment domestically with electronic means of payment, and keep the physical dollars as international reserves for the current international system that requires that you use the US dollar. That way you free up dollars that you’re using for domestic payments that you don’t really need to better import equipment, technology, and resources that you don’t have available in your own country. So I think there are nuances to all of this. And while I’m a critic of dollar hegemony, I think we have to recognize that until that changes, the dollar plays a key role in Latin America, and basically 99% of international transactions in the region. Many domestic prices in the region are pegged to the dollar de facto like real estate, in cars, of course imported technology, and then that sort of creeps into the rest of the prices in the economies. So the dollar is there. Now, how do you optimize that? How do you gain degrees of freedom? How do you get some policy space, a bit of sovereignty in that context, is what it’s all about. And that is independent of whether you’re a de jure dollarized country, or just a normal market economy with a domestic currency. But that has to comply with the rules of dollar hegemony. So I think there are many similarities in both approaches, and I think you can be a critic, and as well, be a proactive thinker, and policymaker, in that context.

Billy Saas:  So you are making the best of the situation, working in the dollarized economy, but it clearly was not the case, when Ecuador’s economy became dollarized, that they had these sort of advantages in mind. So can you talk a little bit about, you’ve been a critic before of President Jamil Mahuad’s decision, the administration’s decision in Ecuador, in 2000, and into 2001, to give up the Sucre and adopt the dollar as the state currency. Could you sort of tell us, what was their motive as you understand it? And why was that a particularly bad idea for Ecuador at the time?

Andrés Arauz:  It was a bad idea because it was a conspiracy. Now that Mahuad just came out with a book, and there are people that are doing a bunch of research. Marco Naranjo has also come out and said this was a conspiracy. He was the one guy who was planning dollarization five years before. You have declassified reports from the United States government saying that they actively pursued the dollarization of several economies in Latin America. It is not a coincidence that Ecuador accepted a US military base in Manta in 1999, and Ecuador was dollarized in the year 2000. There were only four months between both decisions., and, unless you believe in fairy tales, that’s fairly easy to link up in terms of the international political economy. Now, Mahuad was a terrible president, predominantly for what he did to the people of Ecuador. He was bankrolled and financed by bankers. He put bankers in the ministries, in the central bank, and everywhere. Private bankers, who did not quit their jobs as bankers while they were being government bureaucrats at the same time. So just plenty of conflict of interest, nasty policies, and so on. He started basically bailing out banks when the crisis came, which was not an accident. Again, crises are not natural disasters in the sense that there’s an unforeseen circumstance. Financial crises are anthropogenic in nature; they are manmade, they are engineered, if you will. And there is enough research into financial crises, especially from Hyman Minsky, and all of his disciples, and people that have studied him, we know how crises come about, and how they play out, and then how they eventually get resolved. So instead of preventing the crisis, instead of solving the crisis, Mahuad basically started pumping all this amount of money for the bankers, but at the same time, didn’t close the capital account or didn’t put exchange restrictions. So what the bankers immediately did was they got all this bailout money in Sucres and they literally just went through the revolving door of the central bank and came back with the Sucres and bought Dollars. Now if overnight, you have this increase of demand for dollars because of the huge supply of Sucres, that without any exchange rate restrictions, without any capital account restrictions, of course, you’re going to have a devaluation, depreciation of the local currency immediately. But this is not something that requires a genius mindset. This is sort of very, very basic. And they did it anyway to purposely weaken the local currency and justify the dollarization measure, which had been in the workings for quite a bit. So now, Mahuad 24 years later is trying to come out and say, “Oh, look, I wanted a dollarized economy. Look what would have happened if the Sucre kept devaluating,” and so on. But they did it on purpose. It’s not like it was an accident, and he cured the illness. It is that they created this crisis to justify the measure, so they weren’t thinking about the creative uses of dollarization. They had no idea about the actual workings of the dollarized economy or the balance sheet logic that you can apply. They were working on, basically, assumptions that you would renounce monetary policy, and that it would be a hard restriction on fiscal policy, as well. Basically, they said, if you have dollars, then the central bank cannot lend to the government anymore. And then, we’ll starve the beast, and then we’ll justify our privatization program, and so on. It was very purposely a neoliberal agenda. The law of dollarization was written, not in Ecuador. It was written in DC at the IMF, and then sent via fax to Ecuador to be copied and implemented. It’s a very long story, the story of how dollarization was implemented. But they didn’t see that we were going to be smart enough to find loopholes and creativities and creative solutions to that. For example, and I will mention this quickly, but starting in 2009, the central bank of Ecuador started to lend to the government, even though we’re dollarized. This completely blew their minds because it was like, “Isn’t dollarization supposed to forbid the central bank from creating money out of thin air?” No! You can still create dollars, right? You can still create dollars on a central bank’s ledger. They are just accounting dollars, right? Of course, you can’t go and print physical dollars, but you can still create dollars on the ledger, and then have them be transacted in the domestic economy. Sure, that creates an issue then later with a balance of payments, international reserves, but then you have to have a proactive balance of payments policy, like any developing countries should, in fact.

Scott Ferguson:  Isn’t this the case with Eurodollars, as well?

Andrés Arauz:  Yeah, I mean, that’s exactly. The thing is, when it’s private banks doing it, nobody has an issue with them creating dollars in their banks, and in the ledgers. That’s how offshore dollar banking systems also work, in general. I use the term “xenodollars” to be more etymologically correct. But yeah, that’s exactly how it works. What they didn’t like is that now a state institution, which was the central bank, was doing exactly the same, perhaps with even more care, with more oversight, with clearly defined parameters under a democratically accountable system than what private banks were doing, which was creating Ecuadorian dollars when they lent. That’s definitely something they didn’t have in mind in the year 2000. When the economy was dollarized, there was a huge crisis in terms of prices. Relative prices just got really messed up over the next year or so. Many economic activities became non-competitive overnight, and Ecuador could have collapsed, even as a country, except for one thing, which was that the crisis of the late 90s and dollarization created a mass migration of millions of Ecuadorians. We lost almost 15% of the population that went to live in the States, in Spain, and Italy, and then started sending remittances home. So it was this hard currency that was coming from abroad that basically saved the country from catastrophe.

Scott Ferguson:  You’ve been a vocal advocate for the development of a regional currency in South America called the S-U-R, the Sur. And this currency would be used instead of dollars in international cooperation and trade. Could you share with our listeners a little bit about the Sur currency and what its adoption will mean for member countries like Ecuador.

Andrés Arauz:  So the Sur is actually an initiative by President Lula, by former presidential and now Minister of Finance, Fernando Haddad, and his team. The Sur is not a currency like the Euro that wants to replace the national currencies. That’s something that I have to insist from the start: it is not a currency intended to replace national currencies. It’s a complementary currency. It’s a regional complementary currency that wants to contribute to the dynamics of intra-regional trade. Okay. So, right now a country like Argentina, in order to buy staples or equipment from Brazil, has to have Dollars in their reserves, and then it has to transfer those dollars to a Brazilian bank in order to get the equipment, the machine, or whatever, from Brazil. Why? Why? Then, of course, the logic of that is that the dollars aren’t in suitcases or wherever. The dollars are just accounts in US banks abroad. The dynamic of that is creating institutionalized capital flight because you have to have a liquidity pool, a bunch of money basically deposited abroad, that you cannot use for your developmental needs. So, by having the Sur, we’re basically setting up a payment system with a regional unit of account, the Sur. We have to still talk about how we’re going to value it, but most likely, it will be pegged to the SDR, the Special Drawing Right. And the Sur will avoid having to require US dollars for these international transfers, for these intra-regional international transfers. We can just use this unit of account for our purposes. Again, it does not resemble the Euro in the sense that it replaces national currency. More likely it resembles, even though I don’t like to use this example that much, the European Currency Unit, the ECU, which was an ancestor of the Euro. So you have a unit of account composed of a basket of currencies whose idea is: let’s avoid using an extra regional currency for inter regional trade. I think that will definitely create some flexibility and policy space for countries so that they can free up some of their reserves, and use those for technology and equipment that’s not available within the region; stuff that we may need to import from the US, Europe, or Asia. At first glance, it does not seem so ambitious. I am proposing to the working group that we start with a bit more ambition, which is allowing payments in Sur from any bank account in the region—twenty other bank accounts in the region—in real time, like the Brazilian Pix payment system is working. We already have the technology. We don’t really have to make anything up. All we have to do is connect the softwares, and the pointers, and the parameters, and we can get that rolling overnight. Why is this very important? Because in South America when people think about regional integration, sometimes they think it’s a thing about politicians, and presidential summits, and they gather once a year, all the flags are put together and they hug each other, and so on. But we need to make this very tangible and to build regional integration in such a way that it’s actually existing in people’s lives. And the way to do that is, I think, by making a democratic payment system where you can actually make transfers within the region, denominated in Sur in real time. That will be a big, big competitive leap compared to the legacy system, dollar based, SWIFT-based system that runs today.

Billy Saas:  That’s super helpful. Thinking a little bit more in terms of on the ground in Ecuador, there have been major indigenous uprisings over the last several years, indeed going back to the 1990s. Then, there was recently a call this past week by the Confederation of Indigenous Nationalities of Ecuador, or CONAIE, for more protests after one of their leaders, the chairman of CONAIE was arrested and detained. The CONAIE endorsed your candidacy and 2021, and I imagine you might like to have that endorsement again. Could you talk to us a little bit about your vision for the newly created Sur, and a reinvigorated Unasur, and how those will serve and advance the interests of Ecuador’s indigenous peoples? So thinking about on the ground, in material terms, how does this complimentary currency improve the lives of Ecuador’s indigenous?

Andrés Arauz:  First, CONAIE is an organization that I really respect. I think they have decades of political organization and work. They were, unfortunately after 2003 specifically, infiltrated and contaminated by different intelligence agencies—Local, neighboring, and foreign intelligence agencies—to try to break it apart because it was becoming a very powerful force, and they clearly had a left wing agenda. During the left wing progressive government of Correa, there was a lot of tension with CONAIE, but during my candidacy, we were able to find common ground, and to admit some of the historical mistakes that progressive forces had made, which allowed these foreign interests to penetrate such a valuable movement. Now, I didn’t have the endorsement of the entire CONAIE. I had the endorsement of the President of the CONAIE at the time, and let’s just say good relations with the rest. But specifically with the Amazonian indigenous peoples of Ecuador, which is the Confeniae. This year, we had protests in 2022 over several issues, among them, importantly, the price of gasoline and fuel. Of course, there was a packet or package of agreements that the government reached with CONAIE, but the government has, of course, continued their neoliberal agenda, because that’s what a private banker is there to do. There will probably be more protests. Now with the government, Lasso’s rampant banking corruption will probably come out in 2023, and we’ll see a change there. So that’s what’s happening in Ecuador. In Ecuador, what has always been my proposal is we need to build what’s called the historical block, which is reiterating the same forces that supported the new constitution of Ecuador in 2008. That sort of waned over time. We need to rebuild that and have that be strong again. So that involves an agreement, a political, social, and economic agreement with the indigenous movement and the Citizens’ Revolution which is the political space that I belong to. Now, the Unasur that is now in zombie status, but will not be for long because in the next few days, we’ll see Unasur have a rebirth, especially with Lula’s leadership. One of the reasons that I think Unasur failed—and I want to emphasize this is my perspective—was because it did not have a material or tangible effect on people’s lives. It remained as a general idea that was mostly around political circles. It was not a culturally ingrained concept. I see that Unasur cannot just be an integration of politicians or of states, it needs to be an integration of the peoples. And I use that term on purpose. The peoples of South America need to perceive that this thing is actually something that is useful to them. I think the way of doing that is, first, having the Sur allow all these transfers like I mentioned, in real time, denominated in the unit of account, which will be a thing that would materially impact trade in the region. You will get businesses, small, medium, and so on, to support this. You would also have an education pillar that would allow for students to have an exchange program; a year long exchange program in any of the countries in the region, both high school students and university students. That would also make it very concrete. The third thing is the thing that Evo Morales, former President of Bolivia has started, which is called Runasur. Runa, in other indigenous languages, means person or lay man, and it is, of course, a reference to an indigenous integration of the South. I think we have a key opportunity there in terms of the urgent needs for climate change, biodiversity, and above all, the respect of indigenous peoples. So I think that also will be a key pillar in strengthening the integration of the peoples. Hopefully, that can also become an integration of social movements. Why not, instead of having 12 different workers unions, for example, in a specific economic sector, just have a regional workers union with 12 chapters, or with local chapters. Just like a big organization, because transnational companies all work in that way; they operate in different countries, but they all respond to the logic of the headquarters. This is what we should do in terms of workers unions, women’s movements, students movements, indigenous peoples, and in general, the organizations that respond to the majority of people and our capital. So hopefully, not Unasur per se, because it’s more institutional space, but Runasur, which is the space of lay people, can also have a political union going forward. That’s why it’s important for the indigenous peoples of Ecuador to support that initiative, as well.

Scott Ferguson:  Are there critics of these complementary currency systems, either on the right or left or center? And if there are, what do you say in response to them?

Andrés Arauz:  Yeah, of course there are critics. People that think and believe that we should always just comply with the dollar hegemony and base all of our economy on the needs of US interests, and who are happy to have their double residence in Miami and another Latin American country. Unfortunately, this sounds caricature-esque, but this is what it is. Bolsonaro was a supposed nationalist and supposed Brazilian Jersey fan. Even before leaving the presidency, he went to live in Orlando, Florida and put on the Mickey Mouse hat. I don’t know if you saw it, but he also wore the US Soccer Jersey.

Scott Ferguson:  Oh yeah, we saw.

Andrés Arauz:  I mean for Latin Americans who are football fans, and we just had Argentina win the World Cup, it’s really symbolic. It’s pretty bad. That shows how these fascist nationalisms in Latin America say that Latin American Integration is bad, but somehow wearing the US Soccer jersey is good. It makes no sense whatsoever, but this is how they think. This is what’s in their mind. And that’s also where their wallets are, and what their bank accounts are, and where the property is. Lasso has 140 properties in Broward County and Miami Dade County, in Florida, so this is who they are. The elites, unfortunately, are more Miami-based than Latin American-based, and we will have to face that struggle, show these contrasts, and make that transformation happen.

Scott Ferguson:  Yeah, it’s a big middle finger. What about the center left and left? Because I think we’ve come up against many critics and oppositional forces, whether it’s in the British Labour movement, British Labour economists, or left wing media folks and activist in the United States who are not thinking with Post-Keynesian theories of endogenous money, are really thinking in these old fashioned, even classical hydraulic models of finite money redistribution. Do you come up against those kinds of criticisms from center left and left interlocutors?

Andrés Arauz:  Yeah, unfortunately, there is not enough education as to how money works. You have covered this extensively in the past, and yeah, we all have to face not just a radical idea, but then we have to also deconstruct the previous theoretical assumptions that even our peers or comrades are having in their day to day. A logic of understanding policymaking, or economics, or money to sort of rebuild from scratch and say, “Okay, now forget everything you know about this and let’s start all over.” Yeah, there’s that. Fortunately, I think, the pandemic and then before that the financial crisis, were lessons in what is scarcity? What is scarce money? What is money, where does it come from, and so on. Now, it’s very easy to point to that. All you have to do is show a graph or even show examples. It’s much easier than before. You know what else, actually? The crypto space, even though it doesn’t understand or doesn’t want to understand endogenous money, has at least opened the minds of people in terms of the discussion about money. So what they have done is popularize the issue of money to the point where now people are just more open minded, in general. And that’s also important, and it has also been key in opening the doors for these heterodox approaches, endogenous money, MMT, Post-Keynesianism, and so on. I think, also in academic circles, you’ve had key people and gatekeepers admit to the fact that that is how money works. The famous Bank of England paper, and so on, and we’re getting there. I still think we still have a lot of work to do in terms of how the formal education system talks about money and textbooks and stuff. If you go to a classic Econ 102, an introductory course in university, you still get brainwashed with other kinds of things. We still have to do a lot in terms of the curriculum and universities, especially in developing countries, which need to know this more. But I think we’ve definitely gone forward a lot, including with center and center left people in the region. That, by the way, the Post-Keynesians are pretty strong in Brazil, and that’s also a big one.

Billy Saas:  Awesome, I think one other area of concern for some people who might be interested in the Sur but worried is: what happens when the political tides change again? Hopefully they don’t ever, right? But say the Sur is built, implemented, and the gains of the left are lost over the next several years. Could the Sur not be weaponized against the countries in the region? What do you say to those folks who might have that kind of concern?

Andrés Arauz:  So my approach to policy making is, of course, planning. When I want to make these major transformations, such as when I was in the central bank or in other spaces, like the developing ministry, planning is central. Improvisation is bad. You need to plan. You need to make a short, medium, long term plan. You need to have the risks involved in there as well as plan for the risks, as well. And then something that most technocrats forget is, what those of us that have a bit of Marxist influence, is the correlation of forces. So how is the political economy? What’s the political economy for this? It’s thinking about sustainability in terms of political economy. Is this going to be reversible or not? Right? So that’s when we start having some implementation issues with some peers and colleagues on the left, because we just assume that we’re going to have power, and we’ll keep power forever, or for a very long time, and then people just get used to this somehow or another. That’s not how it works. We need to make sure that the political economy of this is sustainable over time so that the forces, the political and economic forces, sustain it over time. Like the example that I gave you with the credit unions, I can’t imagine Lasso, the banker, President of Ecuador, even after coming to the central bank, trying to turn off the switch, which disconnects 600 credit unions from the payment system. He will get sort of a massive push back and strikes, and it won’t happen, right? So we need to achieve that point of irreversibility in terms of the political economy, but also in terms of the usage of the system. So if three or four people use the system, whatever, they’ll disconnect it, and that’s it. But if you get many people using it, this is why I think it should be part of the regional payment system and get businesses, small and medium enterprises specifically, using the Sur payment system. We need to have a dynamic sector. We need to have even capitalist forces support the system saying: this is much cheaper than using the dollar-based SWIFT system. And have that incentive in place, as well. We need to sort of create incumbents that will defend the system, even when the left wing politicians are out of the game. That’s the kind of process building that we need to achieve, both in terms of the Sur and the Unasur. That’s why the economic pillar has to be in place, as well, and not just the other pillars of integration that happened in the past, such as the military union, or the health union, or the democracy union, or whatever. All of those can be stripped away as soon as the politicians are gone. When you have the fabric of society, an economic and productive fabric, that needs the regional system, then it’ll keep moving forward and it’ll become the incumbent. It will become a long lasting, sustainable project.

Scott Ferguson:  In December, you published a significant report for the Center for Economic and Policy Research (CEPR) titled “Putting Climate At The Core of IMF Governance.” To close out our conversation, would you mind giving our listeners a sense for what you are arguing for in that project?  Well, first, I’m really thankful to CEPR for opening the doors to my contributions, to my thoughts, to whatever I can do to coincide in terms of our priorities in an economic and policy arena. I’ve been studying the IMF for over a decade now. I’ve seen the IMF face to face, and I’m strongly versed with some of its policymaking, which strongly coincided with some of their issues like SDRs. I think SDRs are a very important instrument that, even though they’re not perfect, we should continue to push for them.

Billy Saas:  Special Drawing Rights, could you say just a little bit about the Special Drawing Rights?

Andrés Arauz:  SDRs, or Special Drawing Rights, are international money, international currency, that is created out of thin air. It’s endogenous money. And it’s political money: it was created as an international treaty to replace gold and the US Dollar as a reserve asset in the 60s. So it’s the thing that mostly resembles an international currency even though in the SDR basket, the US dollar has a large weight, like 40%, or something like that. It’s okay because it will have to recognize the realities of world power players. And hopefully one day, the Sur will be part of the SDR basket. That’s actually something that I am proposing should be one of the long term objectives of the Sur. We’ve been working with CEPR on promoting SDR use. Also with other organizations such as Latindadd, the Latin American Network of Economic Justice. Other organizations around the world like Oxfam, Arab Watch, and so on. Really, a large coalition has been built in civil society, and people who think and propose economic policy issues use SDRs beyond the narrow monetary reserve asset quality of them. I wrote a handbook for Latindadd saying, look: SDRs can actually become an instrument of fiscal policy. Then, that opens the door for central bank-Ministry of Finance coordination even though it’s taboo that many want to hide and not speak about until after the pandemic. Anyway, I really like SDRs, and I want to keep exploring and writing and mainstreaming them. But this other thing, this paper on putting climate at the core of IMF governance comes about because I started to read a lot of greenwashing from the IMF, especially in the RST, the Resilience and Sustainability Trust. They put out a climate strategy, and so on and so forth. Most of it is, unfortunately, sort of greenwashing: just basically saying that they’re going to work on climate issues, but not really incorporating that into the main logic of the functioning of the monetary system like they could. For example, they don’t mention the fact of the Petrodollar, the exorbitant privilege of the dollar issuer that can acquire extrasomatic energy needs from Petrostates just by printing their own money versus the rest of the world, and how that relates to historic CO2 emissions on behalf of the United States. So there are many issues that are systemic in terms of the relationship between climate and money that the IMF is not even touching with a stick. I thought that it would be interesting to say:  well, if you’re serious about climate change, if you’re serious about having systemic structural change with regards to the climate, let’s talk about how IMF governance has an incidence in that. I don’t know if you’ve seen this, but the Bridgetown agenda, which is basically being promoted by Prime Minister Mia Mottley of Barbados. She’s saying we need more SDRs so we can invest those SDRs in climate because if we just wait for the rich countries to give us money, that’ll never happen. Poor countries don’t have money on their own to do this, because you need hard currency. The next best thing to hard currency are SDRs, and they can be created out of thin air. Hey! We have the money to invest in fighting climate change. Let’s do it. And of course, then the rich countries are saying: hahaha, no, maybe later, let’s think about it…And they pretend not to hear. That all could happen if the IMF governance system could change a little bit. Right now, at the IMF, there is only one country that has veto power over the decision to create more SDRs, and that country is the United States. You can have veto power with 15% of the vote, and the United States has 17%. So you need to change that. You need to have more weight for developing countries, and especially for the countries that are vulnerable to climate change because they are the ones most desperate to actually make things change and make things happen. So in this paper, with my co-authors, we propose changing the formula of how the IMF voting share is distributed. How the votes are allocated within the IMF, among the different countries. All we do is very simple. There’s a formula with five variables: GDP, reserves, openness, amount of trade, and so on. And they have a weird variable called variability of capital flows. I have these five variables, and sure the biggest countries get the biggest voting share, but we just add one more variable, which is historic CO2 emissions. We say keep the same variables and divide the openness variable by the cumulative, historic CO2 emissions of that country so that we can include their degree of responsibility to climate change as part of the IMF form. We use non-ambiguous, objective metrics published by the Potsdam Institute for Climate to measure the country’s contribution to climate change via cumulative CO2 emissions. Of course, as you would expect, the United States voting share at the IMF falls from 17% to somewhere like 6%. China’s also falls significantly to somewhere like 6%. Rich countries, in general, all fall significantly, and developing countries, in general, increase their voting share significantly, especially small island developing states. So those that risk being destroyed, those at risk of disappearing from rising sea levels, are actually the ones that increase the most, from around 2% to around 20% of IMF voting share. That would have a significant impact on the entire monetary system, the practices of IMF lending, the logic of power within the institution, and they would actually have a transformational impact on how the world, how the planet, deals with climate change. The IMF is a powerful institution with a trillion dollars of lending power. That’s not counting how much money it can create via the SDRs, and it’s not counting the influence that it has over financial markets, and not counting the influence that it has over local policymakers in terms of the ideas of money, the ideas of policymaking, the ideas of fiscal management, monetary policy, and so on. I think if we start from the core, then we can have far reaching effects. Of course, I’m not naive to think “oh, wow, how could we not think of this and have the US accept this change overnight?” That’s not gonna happen. But at least we’re putting the discussion forward so that we can understand the true magnitude of this reality.

Billy Saas:  We will, of course, link to that on CEPR and your other work there. Andrés Arauz, it has been an absolute pleasure talking with you. Thank you so much for joining us on Money On The Left.

Andrés Arauz:  Thank you all! I hope we get another chance to share some more stories about CDBCs and what’s happening in that space, as well. I’m quite involved in that area, as well. I’m advising a tech company called Nym on that issue. I would also like to talk about creating unions, financial inclusion in the solidarity sector and the role that money plays there. So yeah, in general, I’d love to share this on another occasion with you and it’s been a pleasure talking to you all.

Spanish Transcript

The following was translated by Sisa Pacarina Tixicuro Duque and has been lightly edited for clarity.

Billy Saas:  Andrés Arauz, bienvenido a “Money On The Left”.

Andrés Arauz:  Muchas gracias por recibirme. Me complace estar aquí. Vengo siguiendo su trabajo desde hace unos meses y años, y me alegra estar aquí.

Billy Saas:  Oh, qué emocionante saberlo! Estamos encantados de tenerte aquí con nosotros, y más ahora, que estamos viviendo un momento histórico en Latinoamérica, puesto que seis (hace muy poco, siete) de los países más poblados, incluida por primera vez Colombia, están siendo gobernados por líderes con ideas políticas progresistas de izquierda. ¿Cómo calificarías este momento y su importancia de cara al futuro de la región?

Andrés Arauz:  Bueno, este es un momento muy emocionante para los progresistas, sobre todo para la gente en Latinoamérica que ya vivió la primera Marea Rosa, la primera corriente progresista en la región. Desde luego, ahora hay un poco más de madurez en el entorno progresista, en general, y pienso que hemos aprendido un par de lecciones. Una de las más importantes que hemos aprendido es la importancia de la integración regional. ¿Verdad? Así pues, sabemos que un país por sí solo no cambiará el mundo. Un país por sí solo no cambiará la dinámica fundamental del sistema mundial, ni saldrá, de manera sostenible, de la pobreza, ni tampoco transformará su economía, su base industrial, etcétera. Ya sabemos que eso sólo puede lograrse con un plan regional o de integración. Y creo que definitivamente eso se ha incorporado a la agenda de la izquierda. Por eso este es un momento crítico en la historia, pues ahora vemos que el Presidente Lula, que acaba de llegar al poder hace sólo 10 días en Brasil, ya se ha enfrentado al primer intento golpista. Él ha declarado que la integración regional, concretamente con los países sudamericanos, es una de sus prioridades clave en su política exterior. Así que esto es emocionante para nosotros, con el liderazgo de Lula, desde luego, la situación en la región cambia por completo. Observamos que fuerzas extrarregionales como Estados Unidos también han tomado nota de este giro hacia la izquierda, y eso tiene repercusiones para toda la región. Esperemos superar todos estos intentos golpistas y amenazas violentas contra las fuerzas progresistas. Y esto puede ser no solamente una reacción, una resistencia frente a las fuerzas del Imperio, las fuerzas del Neocolonialismo que amenazan la política progresista en toda la región, sino que realmente seamos capaces de construir algo. Y pienso que lo monetario, la cuestión financiera, es sin duda algo que podemos conseguir en un corto período de tiempo. Dada las dinámicas electorales en la región, quisiera insistir en que para Latinoamérica y los políticos progresistas y quienes dirigen los países, no contamos con un lapso de tiempo infinito. Disponemos de una brecha de oportunidades muy limitada, que es justamente este año, 2023. Si traspasamos ese plazo, probablemente será mucho más difícil, debido a las coyunturas políticas internas, las fuerzas de correlación, etcétera. Así que considero que este año es el año del trabajo duro, y de poner las piezas en orden y echarlas a andar.

Scott Ferguson:  Entonces, ¿cómo interpretarías la situación de Ecuador en este momento histórico en particular? Y yo me pregunto, según tu experiencia, aprovechando esta peculiar apertura histórica, ¿cómo has conseguido hablar sobre dinero y finanzas públicas desde un punto de vista heterodoxo y comunicarlo a las personas comunes y corrientes?

Andrés Arauz:  De acuerdo, empecemos con el papel de Ecuador en todo esto. Ecuador, por desgracia, ahora mismo está dirigido por la antítesis del dinero progresista con la política, es decir, un banquero. Un banquero multimillonario neoliberal, que se ha alineado completamente con el FMI en su asesoramiento y formulación de políticas convencionales, y de la vieja escuela, y demostrado eficazmente que son falsas e incorrectas, y está llevando al país a una gran crisis económica. Ecuador es probablemente el país que menos se ha recuperado tras la pandemia. En general, realmente no ha crecido a causa de una política monetaria y fiscal muy restrictiva. Él está promoviendo la fuga de capitales como parte de la política del gobierno. Ayer mismo, o no sé cuándo saldrá al aire, pero muy, muy recientemente, acaba de anunciar que eliminará el impuesto a la salida de divisas que tenemos en Ecuador. Existe desde hace tiempo. Así que eso promoverá la salida de capitales. Pero la cosa es que en realidad su principal línea de negocio como banquero es poseer un banco offshore con sede en un centro offshore en Panamá, en el que aproximadamente entre el 80 y el 85% de todos los depósitos proceden de ecuatorianos ricos. Así que es realmente muy complicado para cualquier país. Pero para mi país, es realmente doloroso, ¿sabes? Cuando tienes un presidente cuya principal línea de negocio es promover la fuga de capitales a su banco offshore con sede en Panamá. Por supuesto, toda la política se cambia para adaptarse a su línea de negocio. Y es bastante absurdo, pero también un poco repugnante, porque no ha abandonado el banco, no ha puesto sus acciones en un fideicomiso ciego o lo que sea. No, él ha sido explícito acerca de mantener su propiedad, y eso es muy lamentable. Además, porque si uno se aleja un poco y amplia la visión, verá que este es el tipo de personaje que se opondría a un rol proactivo como lo ha sido siempre la política exterior ecuatoriana, salvo este gobierno, para ser parte de una fuerza regional. Formar parte de un bloque regional. Así que lo más probable es que se oponga a todas estas iniciativas, y es muy lamentable porque hasta hace muy poco, Ecuador era la capital de UNASUR: era la sede de la Unión Sudamericana. El ex Presidente Moreno, que traicionó su programa, y ahora Lasso, han renunciado, a que Ecuador fuera la Capital de Sudamérica, la ciudad de Quito. Por fortuna, en cambio, la población ecuatoriana es notablemente progresista. Así, en las últimas elecciones, a las que me postulé, la población ecuatoriana votó alrededor de un 70% a parlamentarios progresistas. El resultado presidencial no fue exactamente el mismo: perdí por poco. No obstante, el parlamento es mayoritariamente progresista con socialdemócratas, con progresistas de lo que llamamos el movimiento indígena de fuerzas plurinacionales. Representan más de dos tercios del parlamento. Y la población, en general, también es bastante progresista. Por tanto, esto significa que, más temprano que tarde, la población de Ecuador dará un paso al frente, empezará a ejercer sus derechos democráticos y probablemente se produzca un relevo en la administración. Es muy poco probable que el actual presidente sea reelegido. Y tendremos un gobierno progresista que se alineará con el proyecto de integración regional. También me preguntaste sobre cómo abordar la política financiera y económica heterodoxa dentro de este contexto, y tengo varios, digamos sombreros que me pongo todo el tiempo. En el contexto de mi propio país, soy principalmente un actor político. Tras las elecciones de hace dos años, se me considera un actor político, lo que me da la oportunidad de aparecer bastante en los medios de comunicación. Supone para mis redes sociales la oportunidad de contar con muchos seguidores, y ahí es importante procurar transmitir el mensaje adecuadamente. He intentado compartir mis conocimientos en un lenguaje sencillo y con un vocabulario bastante fácil, pero principalmente mostrando contrastes. Pienso que ha sido una forma muy eficaz de comunicarse con la gente, con amplios segmentos de la población, contrastando las recomendaciones políticas o las políticas monetarias ortodoxas, la política monetaria o la política económica en general, frente a lo que se puede conseguir con un planteamiento heterodoxo. Ese es el sombrero que uso dentro de Ecuador, pero fuera del país, tengo, quizás, más reluciente el sombrero académico. Empleo mis conocimientos para comunicarme con los especialistas y los medios de comunicación especializados, con aquellos que, tal vez, hacen un seguimiento general de las instituciones financieras internacionales, y trato de utilizar ese tipo de lenguaje para reafirmar e insistir en mi acreditación académica, lo cual creo que también es importante en términos de construcción de legitimidad. Más o menos eso es lo que hago. Trabajo en varios espacios, pero siempre en torno a cuestiones relacionadas con las finanzas y la tecnología. Me siento bastante feliz en ese espacio y trato de cambiar el mundo con mis conocimientos, mi capacidad intelectual, con las redes que puedo tratar de establecer. Espero que también podamos aprovechar eso para seguir desarrollando y transformando mi propio país.

Billy Saas: A la hora de realizar esta labor de comunicación, ¿hay otros intelectuales que modelen el tipo de comunicación al que aspiras? Y dentro del amplio espectro de la economía heterodoxa, ¿hay alguna escuela o perspectiva a la que recurras más a menudo?

Andrés Arauz: No he tenido en mente a ninguna persona en concreto como referente de comunicación. He estado en contacto con muchos líderes y pensadores económicos. No puedo negar el increíble e importante modelo que ha sido, por ejemplo, Rafael Correa en cuanto a comunicación de política económica. Él solía emitir un programa de radio semanal en el que explicaba la política económica y la política gubernamental a toda la población. Fue un programa que duraba entre dos y cuatro horas cada sábado. Y luego, por supuesto, explicar los temas de forma sencilla y comunicárselos a la gente utilizando diapositivas de PowerPoint y demás también fue, creo, algo que no sólo me afectó a mí, sino que fue un estilo de comunicación con el que todos en mi país llegaron a familiarizarse. En términos de pensamiento económico, sin embargo, reconozco definitivamente la influencia de muchos economistas latinoamericanos que han existido desde Raúl Prebisch; estructuralistas y pensadores de la teoría de dependencia. Más recientemente, la influencia de los post-keynesianos ha sido muy significativa en mi pensamiento y práctica económica. Diría que me adscribo al post-keynesianismo más extenso, y dentro de esa amplia escuela hay muchos grupos más pequeños, y a mí me gusta recopilar elementos de todos ellos. Realmente me han llegado a gustar algunos de los principales elementos recopilados por los separatistas, la escuela separatista francesa junto con algunos italianos también. Mi trabajo doctoral abarca muchos de sus trabajos. Concretamente, Augusto Graziani porque me especialicé en sistemas de pagos, y en la dinámica del dinero, y el papel de los bancos, etcétera. Y también me gusta tener eso en cuenta. Pero además, y esto es quizás algo que está más relacionado con el contexto latinoamericano, está lo que yo llamo la escuela de la Economía Solidaria. La Economía Solidaria es muy importante en nuestra región porque nosotros llegamos tarde al proceso de industrialización. Llegamos tarde al capitalismo mismo. Hemos estado bajo economías básicamente feudales hasta bien entrado el siglo pasado, el siglo XX. La Economía Solidaria es importante porque es una forma de incluir a los que fueron excluidos por el sistema capitalista. Si analizas mi país, o mis vecinos, entre el 70 y el 80% de la población en edad de trabajar no es trabajadora formal. No están bajo una relación capital-trabajo. Son básicamente sobrevivientes en un sistema en el que tienen que encontrar la manera de sobrevivir cada día. Eso no encaja en ninguna teoría económica definida, así que la Economía Solidaria trata de explicar: vale, ¿qué podemos hacer las personas que hemos sido excluidas del sistema? Salvémonos los unos a los otros. Cooperemos. Construyamos una comunidad. Construyamos un sistema económico cooperativo en el que podamos reconocer que estamos parcialmente excluidos del capital y del capitalismo, pero tenemos que dialogar con el capital y el capitalismo. Estamos parcialmente excluidos del Estado, pero también tenemos que interactuar con el Estado. Estamos divorciados de nuestras propias realidades porque tenemos que sorbrevivir. Además, tenemos que trabajar juntos. Tenemos que convertirnos en cooperativas, tenemos que juntarnos en asociaciones. Incluso sin ser un sindicato, o una Unión de Trabajadores, tenemos que unirnos para poder negociar en mejores términos con las fuerzas que nos gobiernan. Considero que la Economía Solidaria tiene una influencia muy importante y marcada en mi forma de concebir el desarrollo. Sí, probablemente hay muchos más que me estoy saltando ahora mismo, pero desde luego algunos de los que he mencionado.

Scott Ferguson:  En 2021, cuando te presentaste a las elecciones presidenciales de Ecuador y estuviste a punto de ganarlas, la prensa destacó que hubieras sido el presidente más joven de la historia del país. No obstante, para nosotros resulta tanto o más extraordinario que hayas ocupado el cargo de Director del Banco Central de Ecuador con tan solo 24 años de edad. ¿A qué se debe esta situación? En primer lugar, ¿qué te llevó a dedicarte a la política monetaria?

Andrés Arauz: Sin duda debería mencionar a mi director de tesis de maestría, Pedro Páez Pérez. Él fue muy importante en mis primeras etapas de desarrollo profesional. De hecho, obtuve mi licenciatura en Ciencias en la Universidad de Michigan Ann Arbor, en matemáticas y economía, y después volví a Ecuador y empecé a cursar una maestría en ese país. Por lo general, el orden suele ser el inverso: la gente obtiene un título a nivel local y luego hace una maestría en el extranjero. En mi caso, lo hice al revés. En realidad, fue muy, muy útil porque cuando ingresé en la FLACSO, una universidad latinoamericana que tiene sedes en distintas partes de la región, en mi caso Ecuador, creo que todos mis profesores iban a convertirse en ministros de finanzas, planificación, desarrollo, banco central, etcétera. Mi director de tesis, Pedro Páez, había sido investigador del Banco Central, de modo que cuando se convirtió en Ministro de Políticas Económicas, yo pasé a ser su asesor.  De hecho, tenía 22 años cuando fui asesor del Ministro de Políticas Económicas. Yo estaba a cargo de lo que llamábamos la nueva arquitectura financiera, que básicamente proponía una transformación del sistema financiero nacional, pero también trabajábamos en la transformación del sistema financiero sudamericano y sus instituciones. Trabajé con él en muchos de esos temas, y llegué a conocer el Banco Central desde fuera. Fui asesor del ministerio, pero casi todo mi trabajo tenía que ver con el Banco Central. De modo que pude criticarlo constantemente y presionarles para que hicieran cambios, etcétera. Cabe mencionar que, antes de todo esto, yo había trabajado ya en el Banco Central. Trabajaba como experto en estadísticas de balanza de pagos, y mi trabajo me permitía ver las transacciones individuales de dinero que entraban y salían del país. Pude ver nombres de personas, nombres de empresas, y ese conocimiento siempre ha sido valioso para mí porque cuando un economista va y encuentra las estadísticas, ve un montón de números, ve un montón de agregados, intenta construir una historia en términos generales, en conceptos generales. Pues bien, cuando yo veo estadísticas, y estos números, no veo historias generales ni conceptos generales. Veo personas. Veo empresas. Conozco su comportamiento. Conozco sus patrones. Conozco exactamente de quién estamos hablando gracias a la experiencia que tuve hace más de 15 años. Así que eso es definitivamente una ventaja cuando se construye la política, cuando se sabe lo que compone las estadísticas, y en qué medida es también sólo palabrería y cuánto es en realidad la construcción de estadísticas rigurosas. Siempre he pensado que las estadísticas, y por tanto la contabilidad, son absolutamente cruciales si realmente quieres hacer un análisis económico riguroso. Por eso a veces me río cuando veo a colegas que presentan modelos econométricos muy bonitos y utilizan números como si fueran una especie de ciencia exacta y pura, mientras que muchas de esas estadísticas son pura invención y tienen grandes deficiencias, o deficiencias muy grandes y significativas. He escrito bastante sobre los problemas de las estadísticas monetarias y de balanza de pagos. En fin, retomando el tema, yo fui asesor del Ministerio de Políticas Económicas, y ahí tuvimos un gran problema porque el Banco Central de Ecuador había sido dirigido, quizás durante dos décadas, por la gente más conservadora y ortodoxa del país, y con claros vínculos hacia los banqueros más poderosos. Así que en 2008, bajo el gobierno de Correa, redactamos una nueva Constitución de Ecuador, que supuso un proceso muy interesante de democratización legislativa. Tuvimos miles y miles de personas que propusieron enmiendas, y cambios, y redacción, etcétera, de la Constitución. Y al final, realmente pienso que la Constitución ecuatoriana es una obra de arte. Es muy progresista, está orientada al futuro, y una de las cosas que hizo la Constitución fue modificar la naturaleza del Banco Central. Dictó que el Banco Central ya no sería independiente. Ya no sería autónomo, que sería responsable democráticamente ante las fuerzas democráticas, y por lo tanto formaría parte del poder ejecutivo. Ahora bien, también somos un país dolarizado, pero con un Banco Central que no es independiente, que estaba dirigido como una rama, en efecto, del gobierno ejecutivo, y el Presidente era un economista doctorado. Bien, así que este fue un momento muy especial en esa época. Y si ese sujeto quería que el Banco Central también cumpliera con los nuevos mandatos constitucionales, que también cambiaron para el Banco Central. Por ejemplo, la inclusión financiera es un objetivo constitucional, no sólo la inflación o lo que sea. Existe una lista de mandatos constitucionales para el Banco Central. Entre el personal del Banco Central no habría nadie que entendiera, y mucho menos que estuviera en consonancia con los nuevos objetivos constitucionales. Así que como yo tenía formación monetaria y estaba especializado en esos temas, y conocía el banco central tanto desde dentro como desde fuera, porque había podido vivir dentro de su marco, pero también criticarlo desde fuera. Llegué a ser director general de la banca, que es básicamente el encargado de las operaciones del Banco Central. Fue un momento muy feliz para mí porque era bastante joven, pero ya se me podía considerar, quizás, un experto en asuntos de la banca central. Además, conocía el funcionamiento del sistema de pagos, las áreas de gestión de reservas, los sistemas de pagos internacionales y las instituciones financieras. Poseía excelentes conocimientos de contabilidad, algo fundamental para dirigir un banco central. Además, tenía la orientación política correcta respecto a cuáles eran las transformaciones clave que tenía que lograr dentro del Banco Central para, en lugar de destruir la institución, potenciarla para que cumpliera estas nuevas funciones constitucionales. Así que desempeñé un papel clave en la transformación del Banco Central para convertirlo en lo que sigue siendo hoy, aunque ahora tengamos, de nuevo, un gobierno conservador. Pero como introdujimos cambios muy importantes, inclusive en la cultura misma del Banco Central, creo que es difícil que puedan revertir todo eso. Así es como surgió todo esto. Es una historia muy bonita, y por desgracia creo que difícilmente podrá repetirse en cualquier otra parte del mundo, pero hay muchas cosas que, al margen, pueden hacerse para utilizar el inmenso poder que tiene cualquier banco central en cualquier sociedad para democratizar esa sociedad, para democratizar sus economías.

Pausa Musical – “This is Not America” por Residente

Billy Saas: Pasar de ser un crítico de la gestión del Banco Central a alguien que, de hecho, lo dirige, ¿te ha traído sorpresas o lecciones aprendidas en tu nuevo papel dentro del banco? ¿Hubo alguien que ocupara tu lugar como crítico desde fuera? ¿Y cómo fueron esas críticas hacia tu trabajo?

Andrés Arauz:  Pues, sinceramente, no. En aquel momento no hubo fuertes críticas porque, como he dicho, íbamos avanzando muy deprisa.

Billy Saas:  Claro.

Andrés Arauz: La academia en Ecuador estaba dominada por el pensamiento neoliberal de los neoclásicos y no se pensaba realmente en una política monetaria heterodoxa, entre otras cosas. El sistema de pagos era algo que estaba completamente al margen de la discusión, fuera del debate. No había nada de eso. El papel proactivo del Banco Central en la economía había quedado en el olvido durante los últimos 20 o 30 años, y así sucesivamente. De modo que los académicos, incluso los de derecha, no tenían ni idea de lo que estábamos haciendo. Examinaban los balances y no podían entenderlo. Ni siquiera sabían cómo leer los balances, porque durante mucho tiempo habían dejado de lado ese tipo de formación. Así que los primeros años no hubo realmente ninguna crítica, pero no porque no sintieran que algo iba mal, sino porque no sabían qué hacer al respecto. Además, habíamos expulsado de nuestro país al FMI y al Banco Mundial. Expulsamos al Banco Mundial del país. El FMI seguía en el país; ocupaban una gran oficina en el Banco Central y ni siquiera pagaban alquiler. Así que dijimos: “no, si no pagan alquiler, los echamos del edificio”. Y por supuesto, tampoco tenían mucho acceso a lo que ocurría dentro del Banco Central. De modo que no había nada que pudieran hacer o decir durante ese periodo porque estábamos haciendo cambios en las cañerías del sistema. Por ejemplo, estábamos trabajando en la democratización del sistema de pagos mediante algo tan sencillo como la adaptación de los requisitos de telecomunicaciones para conectarse al sistema de pagos, y para poner a disposición de las cooperativas de crédito una versión ligera del software. En Ecuador, teníamos más de 600 cooperativas de crédito que funcionaban, pero no estaban incluidas en el sistema de pagos. Por tanto, no podían ofrecer el mismo tipo de servicios financieros, transaccionales, pagos de salarios públicos, etc., que los grandes bancos. Así que, simplemente democratizando el sistema de pagos, se produjo una revolución en la base de la pirámide, donde las cooperativas de crédito rurales de repente se convirtieron en una fuerza importante en el sistema económico. Estos sujetos formaban parte del sistema de Economía Solidaria, por lo que también integraban otro sistema de valor. No solamente bancos capitalistas, ¿verdad? Sólo democratizando el sistema de pagos -algo que hicimos al margen de la opinión pública o de los medios de comunicación- pudimos introducir cambios importantes. Ahora bien, cuando empezaron a darse cuenta, me refiero básicamente a académicos de derecha, expertos de la oposición, etc., fue cuando iniciamos el lanzamiento de lo que llamamos el sistema de dinero móvil. Ecuador fue el primer Banco Central de moneda digital. Hoy día es una novedad. Pero nosotros hicimos esto hace 10 años, y el proyecto empezó en 2009. O sea que esto fue hace como 15 años, 14 años. Modificamos la normativa para que los ciudadanos, cualquier ciudadano, solo necesitara un número de identificación nacional, su cédula de identidad, como único requisito para abrir una cuenta en el Banco Central. La moneda digital del Banco Central se llamaba por aquel entonces, dinero móvil. Se diseñó de tal manera que, quizás, fue otra muestra de mi forma de concebir la tecnología, las tecnologías apropiadas, en lugar de las tecnologías de vanguardia o lo último en innovación. Hay que hacer que la tecnología se adapte a las necesidades de la gente, no…

Scott Ferguson:  Interrumpa.

Andrés Arauz: Exacto, entonces contábamos con este dinero móvil que funcionaba en los teléfonos más básicos, sin necesidad de tener un smartphone, sin necesidad de tener un plan de datos. Basta con marcar un código corto, y tenías acceso a todo un sistema para realizar transacciones. Y ahí fue cuando la oposición derechista empezó a criticar. Yo ya estaba fuera del Banco Central cuando se lanzó, pero fue entonces cuando empezaron a darse cuenta de algunos de los principales problemas. En parte, porque una de las figuras principales que reclutaron fue un antiguo miembro del Banco Central, que luego pasó a trabajar para la Asociación de Banqueros Privados y ahora trabaja en el FMI. Así que esta persona es quizás el único que pudo educar a la derecha en cuanto a lo que realmente estaba sucediendo. Y ahora está solo unos 10 o 14 años después, escribiendo sobre lo que hicimos en 2009, 2010 y 2011 con una perspectiva crítica. Pienso que les llevó un tiempo entender lo que estaba pasando. La gente, cuando piensa en un país dolarizado, suele decir: ” perdiste tu política monetaria y estás arruinado”, etcétera. Eso no es cierto porque cuando entramos en el Banco Central, y cuando yo era asesor en el Ministerio de Políticas Económicas, dijimos mira, por supuesto que una dolarización ortodoxa elimina todas esas herramientas y posibilidades y políticas y uno simplemente renuncia y dice: “Renuncio a todo y dejo que los mercados dominen”. Pero con una dolarización heterodoxa, estas forzado a ser creativo.Tendrás una ventaja, y es que dispondrás de una moneda estable, lo que en realidad supone un reto para muchos países en desarrollo que intentan aplicar una política económica heterodoxa. Se producen devaluaciones, depreciaciones, la gente pierde la fe en la moneda a causa de los expertos y los mercados que reaccionan rápidamente. Sin embargo, cuando se tiene una economía dolarizada y una moneda estable, se puede ser un poco más creativo sin preocuparse por estos ataques especulativos, porque no hay nada que atacar. Entonces se empieza a jugar con cuestiones concretas que dependen de la creación de crédito, del papel de los bancos en la sociedad, del funcionamiento del sistema de pagos, de la velocidad de circulación del dinero y del funcionamiento del mercado de valores. Se puede ser más creativo sin preocuparse de cuestiones tales como ataques especulativos. Por ejemplo, tenemos un país vecino, Colombia. El Presidente Petro también es economista. Está llevando a cabo una política heterodoxa. Pero, naturalmente, los ataques especulativos contra la moneda colombiana están ahí, y tienes un Banco Central ortodoxo que no está ayudando ni contribuyendo en esa misma orientación heterodoxa. Así que es mucho más difícil ser heterodoxo cuando no tienes todas las piezas alineadas.

Scott Ferguson: Entonces, ¿continúas criticando la dolarización, a pesar de tener un enfoque más sutil, creativo, heterodoxo y experimental a la hora de mover y crear instituciones, y desarrollar distintas estructuras en un país dolarizado?

Andrés Arauz:  Por supuesto. Sí, soy crítico. Para empezar, hay que entender que existen muchas dolarizaciones, ¿no? Soy crítico, rotundamente, por ejemplo, de la hegemonía del dólar. Así que esto es geopolítico. Se trata de una cuestión colonial. El sur no tiene por qué usar una cuenta en Nueva York o en Miami para hacer pagos entre Uruguay y Perú. ¿Por qué? Pues por la hegemonía del dólar, y por el hecho de que la hegemonía del dólar contribuye a medidas imperialistas como las sanciones económicas, medidas coercitivas unilaterales que están destruyendo países enteros. Además, si pones la hegemonía del dólar junto con sistemas transaccionales como SWIFT que son un monopolio global, y si les cortas SWIFT, también estás cortando de manera efectiva. Y básicamente se está convirtiendo en un arma. El dinero como arma, y la cañería del sistema utilizada como arma, soy absolutamente crítico con la hegemonía del dólar. Seguiré siéndolo, y trataré de construir alternativas porque no creo que el mundo tenga que someterse a la moneda de un solo país. Pienso que tiene que ser un sistema global, y eso significa ir hacia un sistema monetario económico más democrático, de base multilateral. Tal como lo soñaron hace décadas, hace casi 100 años, pensadores tan importantes como Keynes: tienes el Bancor, un activo monetario global. Desde luego, hay actores clave del poder. No podemos negarlo, pero adoptemos un enfoque más equilibrado. Ahora bien, esa es una cuestión que tiene que ver con la dolarización. Por ejemplo, la dolarización de las transacciones internacionales, del comercio internacional, etcétera. Luego está la cuestión de las economías domésticas y la adopción del dólar como medio de pago doméstico. Como he dicho, una cosa es el dólar como unidad de cuenta. Otra es el dólar como medio de pago físico real que la gente utiliza en la calle. Creo que incluso si se estás dolarizado, como mi país, lo mejor es intentar sustituir el dólar físico utilizado como medio de pago interno por medios de pago electrónicos, y mantener los dólares físicos como reservas internacionales para el actual sistema internacional que exige el uso del dólar estadounidense. De este modo se liberan dólares que se utilizan para pagos internos y que realmente no son necesarios para importar equipos, tecnología y recursos de los que no se dispone en el propio país. Así que creo que hay matices en todo esto. Y aunque soy un crítico de la hegemonía del dólar, creo que tenemos que reconocer que hasta que eso cambie, el dólar juega un papel clave en América Latina, y básicamente en el 99% de las transacciones internacionales de la región. En la región, muchos precios internos están vinculados de facto al dólar, por ejemplo los de la propiedad inmobiliaria, los automóviles y, por supuesto, la tecnología importada, y eso se extiende al resto de los precios de las economías. Así que el dólar está ahí. Ahora, ¿cómo optimizar eso? ¿Cómo ganar grados de libertad? De lo que se trata es de conseguir cierto espacio político, es decir, un poco de soberanía en ese contexto. Y eso es independiente de si eres un país dolarizado, o simplemente una economía de mercado normal con una moneda nacional. Pero se tiene que cumplir las reglas de la hegemonía del dólar. Así que creo que hay muchas similitudes en ambos enfoques, y creo que se puede ser crítico, y también un pensador proactivo, y un responsable político, en ese contexto.

Billy Saas: De modo que estás sacando el mejor partido de la situación, trabajando en una economía dolarizada, pero es evidente que, cuando la economía ecuatoriana se dolarizó, no tenían en mente este tipo de ventajas. Has criticado la decisión del presidente Jamil Mahuad, la decisión de la administración ecuatoriana, en 2000 y en 2001, de abandonar el Sucre y adoptar el dólar como moneda del Estado. ¿Podrías explicarnos cuáles fueron, en tu opinión, sus motivos? ¿Por qué fue una mala idea para Ecuador en aquel momento?

Andrés Arauz: Fue una mala idea porque se trataba de una confabulación. Ahora Mahuad acaba de sacar un libro, y hay gente que está investigando mucho. Marco Naranjo también ha dicho que esto fue una conspiración. Él fue el que estuvo planeando la dolarización cinco años antes. Hay informes desclasificados del gobierno de Estados Unidos que dicen que buscaban activamente la dolarización de varias economías en América Latina. No es una coincidencia que Ecuador aceptara una base militar estadounidense en Manta en 1999, y que fuera dolarizado en el año 2000. Sólo hubo cuatro meses entre ambas decisiones y, a menos que se crea en cuentos de hadas, eso es bastante fácil de vincular en términos de economía política internacional. Ahora bien, Mahuad fue un pésimo presidente, sobre todo por lo que le hizo al pueblo de Ecuador. Él fue financiado por banqueros. Colocó banqueros en los ministerios, en el Banco Central y en todas partes. Banqueros privados, que no dejaron sus cargos de banqueros mientras eran burócratas del gobierno a la vez. Por lo tanto, un montón de conflictos de intereses, políticas repugnantes, y así sucesivamente. Él empezó básicamente a rescatar bancos cuando llegó la crisis, lo cual no fue un accidente. Nuevamente, las crisis no son desastres naturales en el sentido de que existe una circunstancia imprevista. Las crisis financieras son de naturaleza antropogénica; son provocadas por el hombre, son diseñadas, por así decirlo. Y existe mucha investigación sobre las crisis financieras, especialmente de Hyman Minsky, y todos sus discípulos, y las personas que lo han estudiado, sabemos cómo surgen las crisis, y cómo se desarrollan, y luego cómo se resuelven finalmente. Así que en lugar de prevenir la crisis, en lugar de resolver la crisis, Mahuad básicamente comenzó a bombear toda esta cantidad de dinero para los banqueros, pero al mismo tiempo, no cerró la cuenta de capital o no puso restricciones de cambio. Así que lo que los banqueros hicieron inmediatamente fue recibir todo este dinero de salvataje en Sucres y, literalmente, pasaron por la puerta giratoria del Banco Central y retornaron los Sucres y compraron dólares. Ahora bien, si de la noche a la mañana se produce este aumento de la demanda de dólares debido a la enorme oferta de Sucres, sin ninguna restricción del tipo de cambio, sin ninguna restricción de la cuenta de capital, por supuesto, se va a producir una devaluación, una depreciación de la moneda local de forma inmediata. Pero no se trata de algo que requiera una mente brillante. Esto es algo muy, muy básico. Y lo hicieron de todos modos para debilitar a propósito la moneda local y justificar la medida de dolarización, que había estado en marcha durante bastante tiempo. Así que ahora, Mahuad 24 años después está tratando de salir y decir: “Oh, mira, yo quería una economía dolarizada. Miren lo que hubiera pasado si el Sucre se seguía devaluando”, etcétera. Pero lo hicieron a propósito. No es que fue un accidente y curó la enfermedad. Es que ellos crearon esta crisis para justificar la medida, por lo que no estaban pensando en los usos creativos de la dolarización. No tenían ni idea del funcionamiento real de la economía dolarizada ni de la lógica de balance que se puede aplicar. Estaban trabajando, básicamente, asumiendo que se renunciaría a la política monetaria, y que sería una dura restricción a la política fiscal, también. Básicamente, dijeron, si tienes dólares, entonces el Banco Central ya no puede conceder préstamos al gobierno. Y entonces, vamos a matar de hambre a la bestia, y así justificaremos nuestro programa de privatización, y así sucesivamente. Fue una agenda neoliberal muy intencionada. La ley de dolarización se escribió fuera de Ecuador. Se redactó en Washington DC, en el FMI, y luego se envió por fax a Ecuador para ser copiada e implementada. Es una historia muy larga, la historia de cómo se implementó la dolarización. Pero ellos no se imaginaron que íbamos a ser lo suficientemente inteligentes como para encontrar vacíos legales y soluciones creativas. Por ejemplo, y voy a mencionar esto rápidamente, a partir de 2009, el Banco Central de Ecuador comenzó a conceder préstamos al gobierno, a pesar de que estamos dolarizados. Esto les dejó completamente atónitos porque era como: “¿No se supone que la dolarización prohíbe al Banco Central crear dinero de la nada?”. ¡No! Aún se pueden crear dólares, ¿verdad? Todavía se pueden crear dólares en el registro contable de un Banco Central. Son sólo dólares contables, ¿verdad? Desde luego, no se pueden imprimir dólares físicos, pero sí se pueden crear dólares en el registro contable y hacer que se muevan en la economía nacional. Por supuesto, eso crea un problema con la balanza de pagos, las reservas internacionales posteriormente, pero entonces tienes que tener una política de balanza de pagos proactiva, como, de hecho, cualquier país en desarrollo debería.

Scott Ferguson: ¿Acaso no ocurre lo mismo con los eurodólares?

Andrés Arauz: Sí, eso es exactamente. La cuestión es que, cuando son bancos privados los que lo hacen, nadie tiene problemas con que creen dólares en sus bancos, y en los libros de contabilidad. Así es como funcionan los sistemas bancarios de dólares offshore, en general. Yo uso el término “xenodólares” para ser más etimológicamente correcto. Pero sí, así es exactamente como funciona. Lo que no les gustó es que ahora una institución estatal, que era el Banco Central, estuviera haciendo exactamente lo mismo, quizás con más cuidado, con más supervisión, con parámetros claramente definidos bajo un sistema democráticamente responsable que lo que estaban haciendo los bancos privados, que era crear dólares ecuatorianos al hacer préstamos. Eso es algo que sin duda no tenían en mente en el año 2000. Cuando se dolarizó la economía, se produjo una crisis enorme en materia de precios. Durante el año siguiente, los precios relativos se alteraron mucho. De la noche a la mañana muchas actividades económicas dejaron de ser competitivas, y Ecuador podría haber colapsado, incluso como país, salvo por una cosa, y es que la crisis de finales de los 90 y la dolarización crearon una migración masiva de millones de ecuatorianos. Perdimos casi el 15% de la población que se fue a vivir a Estados Unidos, a España y a Italia, y luego empezó a enviar remesas a casa. De modo que fue esta moneda fuerte que venía del extranjero la que básicamente salvó al país de la catástrofe.

Scott Ferguson: Has sido un firme defensor del desarrollo de una moneda regional en Sudamérica llamada S-U-R, el “Sur”. Esta moneda sustituiría al dólar en la cooperación y el comercio internacionales. ¿Podría compartir con nuestros oyentes un poco sobre la moneda “Sur” y lo que su adopción significaría para países miembros como Ecuador?

Andrés Arauz:  Entonces, “Sur” es en efecto una iniciativa del presidente Lula, del ex presidente y ahora ministro de Finanzas, Fernando Haddad, y de su equipo. El “Sur” no es una moneda como el euro que quiera sustituir a las monedas nacionales. Eso es algo en lo que tengo que insistir desde el principio: no es una moneda que pretenda sustituir a las monedas nacionales. Es una moneda complementaria. Es una moneda complementaria regional que quiere contribuir a la dinámica del comercio intrarregional. Bien. En este momento, un país como Argentina, para comprar productos de primera necesidad o equipos a Brasil, tiene que tener dólares en sus reservas, y luego tiene que transferir esos dólares a un banco brasileño para obtener el equipo, la máquina, o lo que sea, desde Brasil. ¿Por qué? ¿Por qué? Entonces, claro, la lógica de eso es que los dólares no están en maletas o en cualquier lugar. Los dólares son simplemente cuentas en bancos de EE.UU. en el extranjero. Esta dinámica está creando una fuga de capitales institucionalizada porque tienes que tener un fondo de liquidez, un montón de dinero básicamente depositado en el extranjero, que no puedes utilizar para tus propias necesidades vinculadas al desarrollo. Por tanto, al crear el “Sur”, básicamente estamos estableciendo un sistema de pagos con una unidad de cuenta regional, el “Sur”. Aún tenemos que hablar de cómo vamos a valorarla, pero lo más probable es que esté vinculada al DEG, el Derecho Especial de Giro. De este modo, el “Sur” evitará tener que utilizar dólares estadounidenses para las transferencias internacionales, es decir, las transferencias internacionales intrarregionales. Podremos utilizar esta moneda para nuestros fines. Repito, no se parece al euro en el sentido de que sustituye a la moneda nacional. Más bien se parece, aunque no me guste tanto utilizar este ejemplo, a la Unidad Monetaria Europea, el UME, que fue un antecesor del euro. Se trata de una moneda compuesta por una cesta de divisas cuya idea es evitar el uso de una moneda regional adicional para el comercio interregional. Sin duda, pienso que esto creará cierta flexibilidad y espacio político para que los países puedan liberar parte de sus reservas y utilizarlas para tecnología y equipos que no están disponibles en la región; cosas que quizá necesitemos importar de Estados Unidos, Europa o Asia. A primera vista, no parece tan ambicioso. Lo que yo propongo al grupo de trabajo es que empecemos con algo más ambicioso, que es permitir los pagos en el sistema “Sur” desde cualquier cuenta bancaria de la región -otras veinte cuentas bancarias de la región- y en tiempo real, como está funcionando el sistema brasileño de pagos Pix. Ya disponemos de la tecnología. En realidad, no tenemos que inventar nada. Lo único que tenemos que hacer es conectar los programas informáticos, los indicadores y los parámetros, y podemos ponerlo en marcha de la noche a la mañana. ¿Y por qué es esto tan importante? Porque en Sudamérica, cuando la gente piensa en la integración regional, a veces cree que se trata de un asunto de políticos y cumbres presidenciales, que se reúnen una vez al año, se juntan todas las banderas y se abrazan, etcétera. Pero tenemos que hacer esto más tangible y construir la integración regional de tal manera que realmente forme parte de la vida de la gente. Y la forma de hacerlo es, en mi opinión, creando un sistema de pagos democrático en el que se puedan hacer transferencias dentro de la región, expresadas en “Sur” y en tiempo real. Eso supondrá un gran salto competitivo en comparación con el sistema actual, basado en el dólar y en el sistema SWIFT.

Billy Saas: Eso es muy útil. Centrándonos un poco más en la situación local de Ecuador, en los últimos años se han producido importantes levantamientos indígenas, que de hecho se remontan a la década de 1990. Además, la semana pasada la Confederación de Nacionalidades Indígenas de Ecuador (CONAIE) convocó más protestas después de que uno de sus líderes, el presidente de la CONAIE, fuera detenido y encarcelado. La CONAIE respaldó tu candidatura y la de 2021, e imagino que te gustaría volver a contar con ese respaldo. ¿Podrías contarnos un poco sobre tu perspectiva de la recién creada “Sur”, y de una UNASUR revitalizada, y de qué manera servirán y promoverán los intereses de los pueblos y nacionalidades indígenas de Ecuador? Pensando en términos tangibles, ¿cómo mejorará esta moneda complementaria la vida de los indígenas ecuatorianos?

Andrés Arauz: Primeramente, la CONAIE es una organización que realmente respeto. Pienso que tienen décadas de organización política y de trabajo. Por desgracia, a partir de 2003, concretamente, se vieron infiltrados y contaminados por diferentes agencias de inteligencia -locales, vecinas y extranjeras- para tratar de disolverla porque se estaba convirtiendo en una fuerza muy poderosa, y claramente tenían una agenda de izquierda. Durante el gobierno progresista de izquierda de Correa, existió mucha tensión con la CONAIE, pero durante mi candidatura, pudimos encontrar puntos en común, y reconocer algunos de los errores históricos que habían cometido las fuerzas progresistas, que permitieron que estos intereses extranjeros penetraran en un movimiento tan valioso. Ahora bien, no tuve el respaldo de toda la CONAIE. En aquel momento tenía el respaldo del Presidente de la CONAIE, y digamos que tenía buenas relaciones con el resto. Pero en concreto con los pueblos indígenas amazónicos de Ecuador, que es la CONFENAIE. Este año, tuvimos protestas en 2022 por diversos temas, entre ellos, de manera importante, el precio de la gasolina y el combustible. Por supuesto, hubo un paquete o un paquete de acuerdos que el gobierno concertó con la CONAIE, pero el gobierno, por supuesto, ha continuado con su agenda neoliberal, porque para eso está un banquero privado. Probablemente habrá más protestas. Ahora con el gobierno, la corrupción bancaria rampante de Lasso probablemente saldrá a la luz en 2023, y veremos un cambio allí. Así que eso es lo que está pasando en Ecuador. En el caso de Ecuador, mi propuesta siempre ha sido construir lo que se llama el bloque histórico, es decir, consolidar las mismas fuerzas que apoyaron la nueva Constitución de Ecuador en 2008. Eso fue decayendo con el tiempo. Necesitamos reconstruirlo y que vuelva a ser fuerte. Entonces eso implica un acuerdo, un acuerdo político, social y económico con el movimiento indígena y la Revolución Ciudadana que es el espacio político al que yo pertenezco. Ahora bien, la UNASUR que ahora está en estado zombi, pero que no lo estará por mucho tiempo ya que en los próximos días, veremos a la UNASUR tener un renacimiento, sobre todo con el liderazgo de Lula. En mi opinión, una de las razones por las que la UNASUR fracasó -y quiero subrayar que ésta es mi perspectiva- fue porque no tuvo un efecto material o tangible en la vida de las personas. Se quedó en una idea general que rondaba sobre todo los círculos políticos. No fue un concepto enraizado a nivel cultural. Yo considero que la UNASUR no puede ser sólo una integración de políticos o de Estados, tiene que ser una integración de los pueblos. Y utilizo este término a propósito. Es necesario que los pueblos de América del Sur sientan que esto es realmente algo útil para ellos. Creo que la forma de hacerlo es, en primer lugar, que el SUR permita todas estas transferencias que he mencionado, en tiempo real, denominadas en la unidad de cuenta, lo que tendrá un impacto material en el comercio de la región. Las pequeñas y medianas empresas apoyarán esta iniciativa. Además, habría un pilar educativo que permitiría a los estudiantes participar en un programa de intercambio de un año de duración en cualquiera de los países de la región, tanto para estudiantes de secundaria como universitarios. Eso también sería muy concreto. Lo tercero es la iniciativa de Evo Morales, ex Presidente de Bolivia, denominada “Runasur”. Runa, en Kichwa y otras lenguas indígenas, significa persona, y es, por supuesto, una referencia a una integración indígena del Sur. Pienso que ahí tenemos una oportunidad clave en cuanto a las necesidades urgentes del cambio climático, la biodiversidad y, sobre todo, el respeto a los pueblos indígenas. Así que pienso que eso también será un pilar clave para reforzar la integración de los pueblos. Ojalá pueda convertirse también en una integración de los movimientos sociales. Por qué no, en lugar de tener 12 sindicatos de trabajadores en un sector económico específico, simplemente tener un sindicato de trabajadores regional con 12 secciones, o con secciones locales. Al igual que una gran organización, ya que las empresas transnacionales funcionan todas de esa manera; operan en diferentes países, pero todas responden a la lógica de la sede central. Eso es lo que deberíamos hacer en cuanto a los sindicatos de trabajadores, los movimientos de mujeres, los movimientos estudiantiles, los pueblos indígenas, y en general, las organizaciones que responden a la mayoría de la gente y de nuestro capital. Entonces esperemos que, no necesariamente la UNASUR porque es un espacio más institucional, la “Runasur”, que es el espacio de los pueblos pueda tener también una unión política hacia adelante. Por eso es importante que los pueblos indígenas de Ecuador también apoyen esa iniciativa.

Scott Ferguson: ¿Existen detractores de estos sistemas monetarios complementarios, ya sean de derecha, izquierda o centro? Y si los hay, ¿qué les responderías?

Andrés Arauz: Por supuesto que hay detractores. Gente que piensa y cree que siempre debemos conformarnos con la hegemonía del dólar y basar toda nuestra economía en las necesidades de los intereses de Estados Unidos, y que están felices de tener su doble residencia en Miami y en otro país latinoamericano. Por desgracia, esto suena caricaturesco, pero es así. Bolsonaro era un supuesto nacionalista y presunto hincha de la camiseta brasileña. Incluso antes de dejar la presidencia, se fue a vivir a Orlando, Florida y se puso el sombrero de Mickey Mouse. No sé si lo vieron, pero también se puso la camiseta de fútbol de Estados Unidos.

Scott Ferguson:  oh, sí. Lo ví.

Andrés Arauz: Quiero decir que para los latinoamericanos que son aficionados al fútbol, y acabamos de ver a Argentina ganar la Copa del Mundo, es algo realmente simbólico. Es bastante malo. Eso muestra cómo estos nacionalismos fascistas en América Latina afirman que la integración latinoamericana es negativa, pero de alguna manera llevar la camiseta de fútbol de Estados Unidos es positivo. Carece de todo sentido, pero así es como piensan. Esto es lo que tienen en la cabeza. Y ahí es donde están sus billeteras, y sus cuentas bancarias, y donde están las propiedades. Lasso tiene 140 propiedades en el condado de Broward y Miami Dade, en Florida, por lo que esto es lo que son. Por desgracia, las élites son más de Miami que de América Latina, y tendremos que afrontar esa lucha, mostrar esos contrastes y hacer que se produzca esa transformación.

Scott Ferguson: ¿Y qué pasa con el centro izquierda y la izquierda? Porque pienso que nos hemos topado con muchos críticos y fuerzas de oposición, ya sea en el movimiento obrero británico, economistas obreros británicos, o gente de izquierdas de los medios de comunicación y activistas en Estados Unidos que no piensan con las teorías poskeynesianas del dinero endógeno, piensan realmente en estos modelos hidráulicos anticuados, incluso clásicos, de redistribución finita del dinero. ¿Te enfrentas a ese tipo de críticas por parte de interlocutores de centro izquierda e izquierda?

Andrés Arauz:  Sí, por desgracia, no existe suficiente educación sobre cómo funciona el dinero. Ya has abordado este tema ampliamente en el pasado, y sí, todos tenemos que enfrentarnos no sólo a una idea radical, sino que también tenemos que deconstruir los supuestos teóricos previos que incluso nuestros compañeros o camaradas mantienen en su día a día. Una forma lógica de entender la elaboración de políticas, o la economía, o el dinero para de alguna manera reconstruir desde cero y decir: ” Bien, ahora olvida todo lo que sabes sobre esto y empecemos de nuevo”. Sí, eso existe. Por suerte, creo que la pandemia y antes la crisis financiera, dieron lecciones sobre ¿qué es la escasez? ¿Qué es la escasez de dinero? ¿Qué es el dinero, de dónde viene, y así sucesivamente. Ahora, es muy fácil señalar eso. Basta con mostrar un gráfico o incluso mostrar ejemplos. Resulta mucho más fácil que antes. ¿Y sabes qué más? El criptoespacio, a pesar de que no entiende o no quiere entender el dinero endógeno, al menos ha abierto la mente de la gente en términos de la discusión sobre el dinero. De modo que lo que han hecho es popularizar la cuestión del dinero hasta el punto de que ahora la gente tiene una mentalidad más abierta. Y eso también es importante, y también ha sido clave para abrir las puertas a estos enfoques heterodoxos, el dinero endógeno, la TMM, el poskeynesianismo, etcétera. Pienso que, también en los círculos académicos, gente influyente y expertos han admitido el hecho de que así es como funciona el dinero. Por ejemplo, el famoso documento del Banco de Inglaterra, y así sucesivamente, y estamos llegando a ese punto. Todavía creo que tenemos mucho trabajo por hacer en términos de cómo el sistema de educación formal aborda el tema del dinero y los libros de texto y demás. Si vas a un clásico Econ 102, un curso de introducción en la universidad, todavía te lavan el cerebro con otro tipo de cosas. Aún nos queda mucho por hacer en cuanto a currículos y universidades, sobre todo en los países en desarrollo, que necesitan saber más de esto. Pero pienso que definitivamente hemos avanzado mucho, inclusive con la gente de centro y centro izquierda de la región. Que, por cierto, los poskeynesianos son bastante fuertes en Brasil, y eso también es importante.

Billy Saas:  Impresionante, pienso que otro aspecto que preocupa a algunas personas que podrían estar interesadas en el “Sur” pero preocupadas es: ¿qué ocurrirá cuando las mareas políticas vuelvan a cambiar? Esperemos que no lo hagan nunca, ¿verdad? Pero supongamos que el Sur se construye, se pone en práctica y los logros de la izquierda se pierden en los próximos años. ¿No podría ser la “Sur” un arma contra los países de la región? ¿Qué le dirías a la gente que podría tener ese tipo de preocupación?

Andrés Arauz: Mi forma de abordar la elaboración de políticas es, por supuesto, la planificación. Cuando quiero llevar a cabo estas grandes transformaciones, por ejemplo cuando estaba en el Banco Central o en otros espacios, como el ministerio de desarrollo, la planificación es fundamental. Improvisar es malo. Hay que planificar. Es necesario hacer un plan a corto, medio y largo plazo. Es necesario tener en cuenta los riesgos y planificarlos. Y algo que la mayoría de los tecnócratas olvidan es, para aquellos de nosotros que tenemos un poco de influencia marxista, la correlación de fuerzas. ¿Cómo es la economía política? ¿Cuál es la economía política dentro de esto? Se trata de pensar en la sostenibilidad en términos de economía política. ¿Será esto reversible o no? ¿Verdad? Ahí es cuando empezamos a tener algunos problemas de aplicación con algunos compañeros y colegas de la izquierda, porque simplemente asumimos que vamos a tener el poder, y vamos a mantener el poder para siempre, o durante mucho tiempo, y luego la gente simplemente se acostumbra a esto de una manera u otra. Esto no funciona así. Tenemos que asegurarnos de que la economía política sea sostenible en el tiempo para que las fuerzas, las fuerzas políticas y económicas, lo mantengan en el tiempo. Como en el ejemplo que les di de las cooperativas de crédito, no me imagino a Lasso, el banquero, Presidente de Ecuador, incluso después de llegar al Banco Central, intentando apagar el interruptor que desconecta a 600 cooperativas de crédito del sistema de pagos. Él recibirá una especie de rechazo masivo y huelgas, y no va a suceder, ¿verdad? Por tanto, necesitamos alcanzar ese punto de irreversibilidad en términos de economía política, y también en términos de uso del sistema. Así que si tres o cuatro personas utilizan el sistema, como sea, lo desconectarán y ya está. Pero si consigues que mucha gente lo utilice, por eso creo que debería formar parte del sistema de pagos regional y conseguir que las empresas, las pequeñas y medianas empresas en concreto, utilicen el sistema de pagos “Sur”. Necesitamos un sector dinámico. Necesitamos que incluso las fuerzas capitalistas apoyen el sistema diciendo: esto es mucho más barato que utilizar el sistema SWIFT basado en el dólar. Y tener también ese incentivo. Necesitamos crear una especie de agentes que defiendan el sistema, incluso cuando los políticos de izquierdas estén fuera de juego. Ese es el tipo de construcción de procesos que tenemos que lograr, tanto en términos de “Sur” como de la UNASUR. Por eso el pilar económico también tiene que existir, y no sólo los otros pilares de integración que se dieron en el pasado, como la unión militar, o la unión sanitaria, o la unión democrática, o lo que sea. Todo eso puede desaparecer en cuanto se vayan los políticos. Cuando tienes el tejido de la sociedad, un tejido económico y productivo, que necesita el sistema regional, entonces seguirá avanzando y se convertirá en el sistema dominante. Se convertirá en un proyecto duradero y sostenible. 

Scott Ferguson:  En diciembre publicaste un importante informe para el Centro de Investigación Económica y Política (CEPR) bajo el título “Putting Climate At The Core of IMF Governance”. Para concluir nuestra conversación, ¿te importaría dar a nuestros oyentes una idea de lo que defiendes en ese proyecto? 

Andrés Arauz: Bueno, en primer lugar, estoy muy agradecido al CEPR por abrir las puertas a mis contribuciones, a mis pensamientos, a todo lo que pueda hacer para coincidir en cuanto a nuestras prioridades en un ámbito económico y político. Llevo más de una década estudiando el FMI. He visto al FMI cara a cara y estoy muy familiarizado con algunas de sus políticas, que coinciden en gran medida con algunos de sus temas, como los DEG. Creo que los DEG son un instrumento muy importante que, aunque no sea perfecto, debemos seguir impulsando.

Billy Saas: Derechos Especiales de Giro, ¿podrías hablarnos un poco de los Derechos Especiales de Giro?

Andrés Arauz: Los DEG, o Derechos Especiales de Giro, son dinero internacional, moneda internacional, que se crea de la nada. Es dinero endógeno. Y es dinero político: se creó como un tratado internacional para sustituir al oro y al dólar estadounidense como activo de reserva en los años sesenta. Por tanto, es lo que más se asemeja a una moneda internacional, aunque en la canasta de los DEG, el dólar estadounidense tiene un gran peso, como el 40%, o algo así. No importa, porque tendrá que reconocer las realidades de las potencias mundiales. Y esperemos que algún día el “Sur” forme parte de la canasta de los DEG. De hecho, eso es algo que yo propongo como uno de los objetivos a largo plazo de “Sur”. Hemos estado trabajando con el CEPR para promover el uso de los DEG. Asimismo, con otras organizaciones como Latindadd, la Red Latinoamericana de Justicia Económica. Otras organizaciones de todo el mundo como Oxfam, Arab Watch, etcétera. Realmente, se ha creado una gran coalición en la sociedad civil, y las personas que piensan y proponen cuestiones de política económica utilizan los DEG más allá de su estrecha calidad de activos de reserva monetaria. Escribí un manual para Latindadd diciendo, mira: Los DEG pueden convertirse realmente en un instrumento de política fiscal. Entonces, eso abre la puerta para que exista una coordinación entre el Banco Central y el Ministerio de Finanzas, aunque sea un tabú que muchos quieren ocultar y del que no quieren hablar hasta después de la pandemia. En fin, me gustan mucho los DEG, y quiero seguir explorándolos, escribiendo sobre ellos e incorporándolos a las discusiones generales. Pero este otro asunto, este artículo sobre situar el clima en el centro de la gobernanza del FMI, surgió porque empecé a leer mucho sobre el lavado verde del FMI, especialmente en el RST, el Fondo para la Resiliencia y la Sostenibilidad. Han sacado una estrategia climática, etcétera, etcétera. Desgraciadamente, la mayor parte es una especie de lavado verde: básicamente dicen que van a trabajar en cuestiones climáticas, pero no lo incorporan realmente a la lógica principal del funcionamiento del sistema monetario como podrían. Por ejemplo, no mencionan el hecho del petrodólar, el privilegio exorbitante del emisor del dólar que puede adquirir necesidades energéticas extrasomáticas de los petroestados simplemente imprimiendo su propio dinero frente al resto del mundo, y cómo eso se relaciona con las emisiones históricas de CO2 en nombre de Estados Unidos. Así que hay muchas cuestiones que son sistémicas en términos de la relación entre el clima y el dinero que el FMI no está tocando ni siquiera con un bastón. Me pareció interesante decir: bueno, si nos tomamos en serio el cambio climático, si nos tomamos en serio un cambio estructural sistémico en relación con el clima, hablemos de cómo la gobernanza del FMI incide en ello. No sé si han visto esto, pero la agenda de Bridgetown, que básicamente está siendo promovida por la Primera Ministra Mia Mottley de Barbados. Ella dice que necesitamos más DEG para poder invertirlos en el clima, porque si nos limitamos a esperar a que los países ricos nos den dinero, eso nunca ocurrirá. Los países pobres no tienen dinero por sí mismos para hacerlo, porque se necesitan divisas fuertes. La segunda mejor alternativa son los DEG, que pueden crearse de la nada. Tenemos dinero para invertir en la lucha contra el cambio climático. Hagámoslo. Y por supuesto, luego los países ricos dicen: jajaja, no, quizá más tarde, pensémoslo… Y hacen como que no oyen. Todo eso podría pasar si el sistema de gobernanza del FMI cambiara un poco. Ahora mismo, en el FMI, sólo hay un país que tiene poder de veto sobre la decisión de crear más DEG, y ese país es Estados Unidos. Se puede tener poder de veto con el 15% de los votos, y Estados Unidos tiene el 17%. Así que hay que cambiar eso. Es preciso conceder más influencia a los países en desarrollo, y especialmente a los países vulnerables al cambio climático, porque son los que están más desesperados por hacer que las cosas cambien y sucedan. Así que en este artículo, con mis coautores, proponemos cambiar la fórmula de cómo se distribuye la cuota de voto del FMI. Cómo se asignan los votos dentro del FMI, entre los diferentes países. Todo lo que hacemos es muy sencillo. Hay una fórmula con cinco variables: PIB, reservas, apertura, cantidad de comercio, etcétera. Y tienen una variable extraña llamada variabilidad de los flujos de capital. Tengo estas cinco variables, y seguro que los países más grandes se llevan la mayor parte de los votos, pero simplemente añadimos una variable más, que son las emisiones históricas de CO2. Decimos que mantenemos las mismas variables y dividimos la variable de apertura por las emisiones históricas acumuladas de CO2 de ese país, de modo que podamos incluir su grado de responsabilidad ante el cambio climático como parte del formulario del FMI. Utilizamos métricas objetivas y no ambiguas publicadas por el Instituto de Potsdam para el Clima para medir la contribución del país al cambio climático a través de las emisiones acumuladas de CO2. Por supuesto, como era de esperar, la cuota de voto de Estados Unidos en el FMI cae del 17% a un 6%. La de China también desciende significativamente hasta el 6%. En general, todos los países ricos disminuyen significativamente, y los países en desarrollo, aumentan significativamente su cuota de voto, especialmente los pequeños Estados insulares en desarrollo. Así que los que corren el riesgo de ser destruidos, los que corren el riesgo de desaparecer por la subida del nivel del mar, son en realidad los que más aumentan, de alrededor del 2% a alrededor del 20% de la cuota de voto del FMI. Esto tendría un impacto significativo en todo el sistema monetario, en las prácticas de préstamo del FMI, en la lógica del poder dentro de la institución, y realmente tendría un impacto transformador en cómo el mundo, cómo el planeta, se enfrenta al cambio climático. El FMI es una poderosa institución con un billón de dólares de poder de préstamo. Eso sin contar la cantidad de dinero que puede crear a través de los DEG, y sin contar la influencia que tiene sobre los mercados financieros, y sin contar la influencia que tiene sobre los responsables políticos locales en términos de las ideas del dinero, las ideas de la formulación de políticas, las ideas de la gestión fiscal, la política monetaria, y así sucesivamente. Pienso que si arrancamos desde el núcleo, podemos tener efectos de largo alcance. Por supuesto, no soy ingenuo al pensar “oh, vaya, ¿cómo no se nos ha ocurrido esto y que EEUU acepte este cambio de la noche a la mañana?”. Eso no va a ocurrir. Pero al menos estamos planteando el debate para que podamos comprender la verdadera magnitud de esta realidad.

Billy Saas:  Por supuesto, incluiremos un enlace sobre el CEPR y sus otros trabajos. Andrés Arauz, ha sido un absoluto placer hablar contigo. Muchas gracias por estar con nosotros en Money On The Left.

Andrés Arauz:  Gracias a todos. Espero que tengamos otra oportunidad de compartir más historias sobre los CDBC y lo que está ocurriendo en ese ámbito. Yo también estoy muy involucrado en ese campo. Estoy asesorando a una empresa tecnológica llamada Nym sobre ese tema. También me gustaría hablar de la creación de sindicatos, de la inclusión financiera en el sector solidario y del papel que el dinero desempeña en él. Así que sí, en general, me encantaría compartir esto en otra ocasión con ustedes y ha sido un placer conversar con todos ustedes.

* Thanks to the Money on the Left production teamWilliam Saas (audio editor), Mike Lewis (transcription), & Emily Reynolds of The Buffalo Institute for Contemporary Art (graphic art)