Economics as Discourse

Andrés Bernal and Natalie T. Smith critique the recent mainstream econ Twitter shaming of MMT, while vibing on left heterodox anti-racist & feminist economics. The conversation then turns toward Latin American politics and Andrés’ latest paper on inflation for the Global Institute for Sustainable Prosperity.

Read Andrés paper here: http://www.global-isp.org/working-paper-no-132/

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

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

Weimar Futurities with Engelbert Stockhammer

Engelbert Stockhammer joins Money on the Left to discuss the political and economic debates that shaped and ultimately devastated Weimar-era Germany. Professor Stockhammer is professor of political economy in the department of European and International Studies at King’s College London and has published widely on financial instability and Post-Keynesian economics. In this episode, we focus specifically on Stockhammer’s recent working paper, “Hilferding, Woytinsky, and the Fiscal Orthodoxy of Interwar Social Democracy,” published by the Post-Keynesian Economics Society in Fall 2021. 

In the essay, Stockhammer reconsiders the so-called “WTB Plan,” a union-backed public works program, which was tragically rejected by the Social Democratic Party (or “SPD”) on seemingly Marxist grounds. During our conversation, we explore the biographies and arguments of two key players in this historical drama: Vladmir Woytinksy, the Russian-born socialist economist responsible for drafting the WTB plan and Rudolf Hilferding, the Austrian-Marxist theorist and politician who turned the SPD against it. Along the way, we consider the stakes and fate of Weimar-era fiscal politics in light of a hegemonic gold standard that ruled across Europe and the United States, growing unemployment and suffering, and the German fascist movement that rose to answer such problems in violent and genocidal ways. Finally, we ponder how unrealized Weimar futurities in the past can help inform the struggle for public full employment today.

Read Stockhammer’s paper here: http://www.postkeynesian.net/downloads/working-papers/PKWP2118.pdf

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

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

William Saas: Engelbert Stockhammer, welcome to Money on the Left.

Engelbert Stockhammer: Thanks for having me.

William Saas: It is a pleasure to have you. Could you start by telling our audience just a bit about your personal and professional background and how they inform your research and pedagogy? For example, you describe your approach as Post-Keynesian and your work as primarily interested in financialization and financial instability. Could you tell us about your background and how those terms come together for you in your work?

Engelbert Stockhammer: Yeah, I’ll tell you a story that hopefully leads to the Woytinsky paper that we’ll be discussing today. So when I say Post-Keynesianism, I mean critical heterodox macroeconomics and the tension between Keynes and Marxist ideas. It’s about, on the one hand, class struggle, on the other hand, effective demand and involuntary unemployment, but also financial dynamics, financial instability, and how you bring those together. So I’m originally from Linz, which is a medium, for Austrian standards, industrial but provincial town. The only historical significance of Linz is that, in 1934, the anti-Fascist workers uprising in Austria started in Linz. So it is a town with a certain leftist tradition. I should say the workers uprising was heroic. It was the only armed nationwide uprising in Europe against fascism other than in Spain. But different from Spain, our uprising lasted about three days until it was squashed. So while it was heroic, it was everything but successful. But it’s sort of an indication of the radicalism and the backbone of the Austrian labor movement in the interwar years. Indeed, it is in part fueled by Austro-Marxism, which we’ll talk a little bit about later.

So I’m coming from an intellectual family. My parents, essentially, were part of the 1968 generation. I grew up in a left environment, went to an antiauthoritarian kindergarten, and went to university in Vienna. By that time, I was already exposed to Marxist ideas, the Frankfurt School, and what leftist students in the 70s would read. And I would have regarded myself on the radical left. I studied philosophy and economics–economics on the encouragement of my parents that I should also study something useful. But I soon turned away from philosophy because I realized that when they say philosophy, they actually don’t mean Sartre and the Frankfurt School and Marx, but they want me to read Kant and Thomas Aquinas, and I have no patience for this. So I got into economics, but learned more about economics from the political science and history classes. At that time, universities were less commercialized. We were free to take classes from whatever the university offered. And politically, I was actually closer to the Greens, which were growing more radical in the 80s in Germany, Austria, and India. I was involved in student politics in the student unions and so on.

I went to the US to do my PhD. I went to the University of Massachusetts at Amherst, which is one of the strongholds of non-mainstream economics. In that way, they’re essentially for modern types of Marxism. In particular, that means that, at the time, we were excited about French regulation theory and social structures of accumulation, both of which don’t feature very prominently today, unjustly, I think. So when I got to UMass, it had this big internal divide between the postmodern Marxists or post-structuralist Marxists that were Reznick and Wolff, on the one hand, and on the other hand, there was Gintis and Bowles who you might think of either in the tradition of analytical Marxism or rational choice theories, game theory of social conflict, and all sorts of things, all of which was interesting, but it was not what I was coming for. It was not social structures of accumulation, that mixture of taking Marx’s ideas and embedding it in a historical institutional analysis, but using modern statistical and modeling techniques I didn’t quite find interesting because Bowles and Gintis were too much into micro for my taste.

So it’s under these circumstances that somewhat unwillingly I started to become a Post-Keynesian. At that time, I had this premise of what do I do for a dissertation. I was struggling with how to sort of reconcile my ambitions with feasible academic projects. At that time, I had a student subscription to The Economist. So you got the weekly propaganda organ of international capital. And they told me that the real problem of Europe are inflexible labor markets and eurosclerosis. That was the big issue. And the US was great because it has these flexible markets. And in case I didn’t get it, there was writing on the title page and in their headers that told me that the real problem of Europe was the inflexible labor markets.

Scott Ferguson: What year was this?

Engelbert Stockhammer: We’re talking mid to late 1990s. So at some point, I realized they are actually saying there’s a dissertation topic for you here. Let’s take the current mainstream theories of European unemployment. And that was the NAIRU theory, or the non-accelerating inflation rate of unemployment. It was sort of the theoretical underpinning of the whole discourse. And in my view, it was clear they were going after European welfare states in order to break them up. So to me that was part of a neoliberal agenda. And when I talked about these ideas, my Marxist friends told me, “Yeah, it’s a good idea to write about unemployment.” And you have to make clear that unemployment is a systemic feature. In capitalism, it’s unavoidable. And then, depending on how economically oriented they are, you need the industrial reserve army to maintain a certain profit rate for them. I thought that’s crazy. I mean, these guys are going after the welfare state and offering the analysis that unemployment is unavoidable. It’s not unavoidable. Sweden and Austria, which had relatively good welfare states at the time, had lower unemployment rates than the rest. So apparently, you can manipulate it.

In that sense, I became a Post-Keynesian, because the Keynesian framework with effective demand had a specific story about unemployment and testable predictions. I was interested in what Post-Keynesians call conflict theory of inflation, that inflation is the outcome of ultimately unresolved distributional struggles. Initially, it actually was partly developed by Marxists, in particular, by Rowthorn and also by later American structuralists. But it’s one of these heterodox economic theories that you can also use for empirical work. So that was my entry point into this. That is how I drifted towards the Post-Keynesians. And the second entry point also in that story is that effective demand essentially determines unemployment. It’s what the Marxists would call the rate of accumulation, but for the Keynesians it is capital investment. So if there is to be a substantial story that, no, it’s not about labor market institutions, but it’s about demand, then I need a story about demand. That is where financialization became important for me. To me, it was essentially around structural changes in the economy, the shareholder value revolution, or corporate governance changes, and the reassertion of shareholders on higher dividend payments.

But what I emphasize is that that’s not only an outside pressure on firms. The shareholders say, “Hey guys, we want higher returns, we want higher payouts.” But with the fact that firms are regularly reporting to the shareholders, there are organizational changes. So in other words, for me, it was also a way to bring in class struggle into the firm, but not in the Marxist industrial sociology, Braverman-type of analysis of the labor process, but in terms of corporate governance. How do you operationalize what the firm wants? With whom do managers talk to? Who do they report to on a regular basis? And as a side effect, non-financial firms start to become more active on financial markets. Now, part of that is hedging because the exchange rate becomes more volatile. But part of that is they start holding other financial assets or shares in other firms and theories that firms think of themselves as profit centers. And their own investment, whether they are producing shoes, wine, or cars only becomes one branch, and then you branch out, and if government bonds are a higher return, you hold government bonds. So it’s in that sense that I thought of financialization as a change in what firms are doing in terms of taking advantage. 

What I’m telling you, essentially, are chapters of my dissertation. The second one that came out in the Cambridge Journal of Economics on financialization is still one of my most cited papers. So that was my entry into financialization. I then went back to Austria and worked for 10 years at the university in Austria. We actually have a relatively broad heterodox economics program that was quite popular with students and a very lively atmosphere. And I continued to work on these Marx-Keynes tensions. At that time, what was important for me was what we now call the wage-led versus profit-led demand regimes. The Bhaduri-Marglin model, these are essentially synthesis models, where they say the Marxist argument emphasizes that investment is profit driven. The Keynesian-Kaleckian argument is emphasizing that higher wages mean higher consumption does higher demand. In the Marxist world, it’s an under-consumption crisis. These two are brought together in the Bhaduri-Marglin model. I was part of a literature that tried to empirically estimate these models and see how much mileage we got out of them. That literature then started out with those Marx-Keynes synthesis arguments, but eventually became more applied and asked, “Now that we’ve estimated whether the demand is wage or profit-led, how important is it?”

That led us to thinking about neoliberal demand regimes as either expert driven or finance-led. So in neoliberalism, you have financial deregulation, but also if you want anti-labor distributional changes, you have rising income inequality. Now, in a hippie-Marxist world, you would expect an investment boom to follow because you got lots of profits. If they get reinvested, you actually would have investment. That’s not what happened. So we’re saying that, actually, the economic structure, the demand regime, is still wage-led. But you have those distributional changes that, in a way, are integral, so you need other growth drivers. Then, the argument is, in some countries, finance, which initially was associated with stock market booms. But as we saw, there were more important housing booms, because they come with much larger wealth effects and much larger spillover on consumption expenditures and they also have powerful effects on investment. But there was only one group of countries. So in a way, you get a financialized form of neoliberal growth model. But in other groups of countries, say Germany, you get a much more industrial version of neoliberalism, where you also suppress wages, but you don’t have the same financial dynamics. In a way, you rely a lot more on export growth.

So the finance-led versus export-led distinction was an important one here. And that is an analytical framework that recently in comparative political economy, meaning outside economics, has gained a lot of interest. But you see again, it is that Keynes, Kalecki, Marx, and Woytinsky tension that’s often lurking in the background of this. In 2010, I moved to London. Unfortunately, the heterodox economics degree was shut down in Vienna, essentially because there was a university restructuring and the neoclassical wing of the department used that to clean the house. But anyways, for me, a big part of the reason was personal because we were looking for two academic jobs in one city. In Europe, it’s easier in London than elsewhere. As I moved to London, and essentially continued along the lines of work, following up on that, I’ve worked a lot on the Euro crisis. Again, there were neoliberal growth models interacting, but then the question arose as to how does the state react? And what’s the role of the state in particular in the Euro crisis? To what extent is that equation of different development of unit labor costs in different parts of Europe? To what extent are there real causes behind the Euro crisis? To what extent is it ultimately financial issues?

There was the real estate boom in southern Europe and the fact that the ECB does not support the member states. So with both on the left and right, you get debates about the real financial factors, the driving forces behind the Euro crisis. Finally, I became a professor at King’s College where now I am a Professor of International Political Economy. Funnily enough, I’m not an economist anymore. Again, there was a university restructuring at Kings. The program I was involved in got decimated. But it was also good for me to move out of economics, sort of half because conditions weren’t good, and half because I was actually happy to get out of economics and talk more to social scientists. So while the Woytinsky paper that we’ll be talking about is a side of my research, it actually ties back to what I’ve been thinking about for quite a while.

Scott Ferguson: That’s fantastic. Thank you for that elaborate introduction. So as you’ve begun to flag, we’ve invited you on the show specifically to discuss your fascinating 2021 paper that’s titled, “Woytinsky, Hilferding, and the Fiscal Orthodoxy of Interwar Social Democracy.” In the essay, you reconsider Wladimir Woytinsky’s WTB plan, and we’ll unpack what that is, which, just to quickly gloss over, is basically a union-backed and debt-financed public works program, which was tragically rejected by the Social Democratic Party in Germany in the Weimar period. And it was done so on seemingly Marxist grounds by some of the leaders of the SPD. So I think you’ve already begun to answer our kind of leading question, but I guess we want to know what initially piqued your interest in this particular episode in the history of Western Europe, social democracy, the struggle for socialism, etc? And then, what would you say your key claims are in that paper?

Engelbert Stockhammer: Yeah, I am delighted that someone finds the paper interesting. I’m totally fascinated by this episode and by Mr. Woytinsky, specifically. So first, what piqued my interest. Part of the interest is, actually, politically and not directly related to my research, and that’s the Austromarxist tradition. When I left Austria, I actually wasn’t particularly intrigued by the Austromarxists. As I became more social democratic while in the US and started to more appreciate what the Austrian social democrats had achieved, I, at some point, started to read what they did. And as I was working on finance, Hilferding’s Finance Capital, of course, is one of the big early Marxist works on finance. It’s a fascinating book. I presume we’ll have some chance to talk a little bit more about it. So Hilferding is trying to restate, in Finance Capital, Marxist theory and thinks about what it means for finance and banking. He will restate, in a way, a commodity theory of money, which I will argue leads to the gold standard. But the Austromarxist movement was much older. Hilferding was one of his most famous proponents, but the Austromarxists were, probably next to the Russians, at that time the most dynamic.

That time is very early 20th century, around the first World War, one of the most dynamic and innovative parts of Marxist thought. It sort of anticipated some of Gramsci’s ideas, in particular, on power, democratic ways to socialism, and notions of cultural hegemony. And Hilferding tried to conceptualize what he called organized capitalism, shifts in capitalism, and a changing role of the state in capitalism. They were also very deeply rooted in society and the working class movement. So let me give you a banal example of that. When I was 13 years old, I used to play quite a bit of chess. So for a nerdy young boy, the obvious thing is to play strategy games, and before computer games, one would play chess. So in Linz, some Austrian town, there would be the Linz chess club, which effectively turns out to be the bourgeois, upper-class, and cultivated one. There was a worker’s chess club, which essentially was the Social Democrats. And there was the chess club which was closer to the Communist Party. And despite the fact that at that time I had very little ideas about communism, I was part of it because my parents have connections to it. What I’m saying is even something as trivial as chess was organized along those big political lines. Imagine what that is like for football or for the things that take much larger constituents.

So they were deeply rooted. These were some of the best organized working class movements that the world has seen. And they were in a way quite down to earth. Vienna had those massive public housing projects, they did all sorts for schooling, and so on. But they also were intellectually leading. Hilferding comes out of that. And that movement gets essentially smashed by fascism. In the 1930s, you have this weird episode where Hilferding, who in some ways I admire, becomes the major economics spokesperson for the Social Democrats. He rejects a proto-Keynesian public employment program that Woytinsky has developed. And initially, it’s very odd. Why would you do that? Why would the forefront of the reformist, but still socialist movement, why wouldn’t they pick up on Keynesian ideas? On some level, that’s very odd.

And then, at some point, in reading about it, I came across this passage in Woytinsky’s autobiography, which is a fascinating thing. I think you’ll have a question afterwards about Woytinsky so I won’t go fully into that. But this guy is fascinating. He became the main author of that employment program for the unions. He’s one of the major economists for unions. But if you go back, he was a Russian socialist student in 1905 when the first Russian revolution took place. He was one of the student leaders of the Petrograd uprising. And I don’t kid you, he became the leader of the Petrograd Soviet of the unemployed, which of course, today no one knows about. And what did he try to do for them? He tried to implement a public employment program. So in other words, you have a socialist Keynesian, or proto-Keynesian, in 1906 in Petrograd at the height of the first Russian revolution. So once I had that, it was irresistible. You also asked me to briefly sketch out the main conclusion. So the WTB program that Woytinsky developed…

Scott Ferguson: Can you define why it is called the WTB program?

Engelbert Stockhammer: WTB stands for the three main authors: Woytinsky, Tarnow, and Baade. Tarnow and Baade were a union leader and a SPD member of Parliament. So essentially, Tarnow is the union support for that because the unions eventually supported the program, and Baade enabled the Social Democratic parliamentary faction such that it could get a hearing there. They essentially wanted to create a million jobs and have a magnitude of three percentage points of GDP. In other words, not completely off the scale, but something that we would recognize as substantial. So I’m investigating two things in the paper. One is how does Hilferding’s rejection of that program relate to his way of perceiving Marxist economics? Now, I purposefully don’t want to get into the debate on whether it’s proper Marxism. It’s his Marxism and he was an important Marxist at the time. And the conclusion will be, actually, his version of the labor theory of value ultimately endorses, or regards as completely normal, a version of the gold standard. Now, that’s a completely non-trivial statement.

Once you’ve read Polanyi or any contemporary economic history debates, the gold standard is interpreted as a mixture of an exchange rate regime, but also it comes with a policy package. The target is to meet the exchange rate to gold. You have to subordinate monetary and fiscal policy, ultimately, to the goal of maintaining that exchange rate. So the gold standard is a shorthand for orthodox economic policies. And Polanyi, of course, in The Great Transformation, is most outspoken on that. But it’s also clear in Barry Eichengreen, one of the most eminent economic historians. He was essentially saying the gold standard was inconsistent with parliamentary or modern democracies. The gold standard could run as long as you had an elite or census-weighted election system where the elite could make up their minds. But if you want to justify your policies with respect to the entire population who might be affected by unemployment, it becomes unsustainable. So for Eichengreen, there’s a fundamental tension between democracy and the gold standard. And for Hilferding, not realizing that will be, in my view, a devastating failure. So the argument here is that it is rooted in Hilferding’s Marxism.

But then, in a way replying to some other debates, I’m also asking, how much was German democracy an outlier? That is particularly replying to a very interesting book, I should say, by Sheri Berman, The Social Democratic Moment, where she contrasts Swedish and German Social Democracy. The Swedes are interesting precisely because they were the ones that endorsed Keynesianism. They were divided on Marx, but were quite leftist still on a lot of scales. And of course, they were then leading in establishing the most developed welfare states. But early on they endorsed versions of Keynesianism that got off the gold standard and did deficit spending. Berman is essentially arguing the German Social Democrats were too Marxist. They were too orthodox both in their theory of the state and in their theory of how the economy works. Now, the flip side of that, which she doesn’t fully draw out, of course, is that the less Marxist the Social Democratic Party is, the more you would expect them to be open to Keynesian policies.

So then, in the final part of the paper, I look at Britain, where you find the exact same problem that Hilferding and the Social Democrats have: what should you do in a recession? Should you do deficit spending? Should you stay orthodox? Britain is almost the opposite of Germany because they did not have a Marxist tradition. Ramsay MacDonald was all sorts of things, but he was not a Marxist. But you also had Keynes and you had the liberals who Keynes supported, who were campaigning explicitly on a public spending platform for the election. So why is the situation in Germany very politically difficult? In terms of implementing such a program, the Labour Party actually could have done it because that’s what the liberals had campaigned for. But they essentially did the same as Hilferding. So I’m saying it’s not just about Marxism. Marxism was distinctly unhelpful with the Hilferding version there. But the roots ran deeper. In part, it is the pressure group mentality of parts of the labour movement. In particular, the unions and the inability to develop an appropriate theory of socialist reform and transformation of the capitalist system, but also specifically the capitalist state and how we can use the state for our purposes.

William Saas: This is excellent. As you’re talking about Woytinsky and Hilferding, it’s hard for me not to see your story in Woytinsky’s story a bit, going back to your description of looking at the theories of unemployment in European countries, and encountering the Marxists who were like, “Well, unemployment is inevitable.” It’s almost a law of capitalism. And you go back and look at Woytinsky encountering him making what seems to be a very reasonable, sensible, and important suggestion and policy proposal, and encountering again, another kind of unexamined assumption that the commodity theory of money is an obstacle. So I don’t know if you see that reflection of your own experience in the experience of Woytinsky and maybe that’s a part of the draw of yourself to his work? But in addition to that, I wonder if you could help us better understand the context into which Woytinsky is making this proposal? What was the situation in Germany? How did they get there? What was economic life like after the Treaty of Versailles and following the German defeat in the first World War? What else was happening in Europe?

Engelbert Stockhammer: Yeah, I think it’s important to get some bit of historical context. Now, on the economic side, it’s important to realize that, for Europe, the interwar years, by and large, were an economic disaster. It is quite different from the US where you often speak of the roaring 20s, where you had a boom and rapid technological progress. You also had financial bubbles developing and so on, but you had very strong growth. In Europe, it was a mess. It was a mess, politically. It was a mess, economically. It was a mess, financially. I started with the finances and that of course brings us to Keynes and his economic consequences of the peace. The Versailles Treaty, essentially, signed culpability for the world to Germany, which isn’t entirely wrong, but probably a bit overstated. They also imposed reparations on Germany. And while reparations morally make sense, or may make sense, Keynes, of course, pointed out and resigned. He was one of the negotiators on the British side advising the finance ministry for the Versailles negotiations. Keynes was pointing out that, if Germany were to pay these reparations, it first of all would require massive export surpluses.

Now, these export surpluses would require other countries, such as Britain, the US, and France, because who else would Germany trade so much that it has massive foreign exchange from that? They would have to have massive current account deficits. In other words, employ less people because they’re producing less. So he says, that’s not gonna work and then there is the issue of scale. The European countries at that point are settled, overburdened with debt, and that debt is sovereign debt, but it’s essentially related to the war and it’s to the US. So we are in a situation where Britain, while still, in a way, the major empire, and London and the Bank of England is the financial center, actually, in terms of its balance sheet, is in no position to play the role of informal lender of last resort. And while we talk about the gold standard, of course, you can make a good argument that, actually, it was always a very managed gold standard. It was really a gold plus sterling standard, because the Bank of England, to some extent, was managing things already in the 19th century. But Britain, at that time, was not in a position anymore to do that. But all the countries tried to get pegged to gold because that was the normal. That was proper economic policies and structures, both in the Ricardian commodity money theory, but also implicit in the Marxists.

Although, they don’t usually like to point it out. Because money is also a produced commodity. I mean, if you get through the first 200 pages of Marx’s Capital, gold is taking the role of the general equivalent, i.e. money, precisely because it is a produced commodity, which embodies value and thus can represent value. For the Marxists, that is important because if that were not the case, if the money was just a piece of paper or accounting entry, you essentially have a massive case of unequal exchanges because you’re all the time exchanging goods against things that are intrinsically worthless, in which case, there’s no change of equivalent. Now, for the Ricardian, or the Liberal tradition, there’s other things, other reasons why that’s important. It’s essentially to simplify the barter economy. All the countries try to get pegged to gold, but that implies austerity policies when you have a crisis. So whether it’s Britain that enters gold with an overvalued exchange rate, which Keynes was critical about, or when Germany tries to get on gold, and at the same time, pay the debt, the debt creates permanent tension and permanent capital shortage. And by capital, we really mean US dollars shortage because they are indebted in dollars and that creates tension throughout the period.

So in Europe, we have high unemployment in most countries throughout the 20s, and thus social tensions remain high. You have a quite fragile–I am talking about Germany, here–you have a very fragile political system. You have a massive social democratic movement that’s deeply rooted in society, but only in certain segments in society. It’s essentially the industrial towns. They made very little inroads on the countryside. You have old elites still being important in Germany. That means the old landlords of the second serfdom in Eastern Europe, in Prussia, that are still dominating part of the state apparatus, in particular, the military, and they were the ones that initiated the first World War, or contributed to it, and they are still in power. You have a strange alliance of industrial capital and heavy industry with those reactionary landlords, the reactionary countryside, that this market had forged, but it maintains its way into the 20th century. And initially, you have quite marginal the rise of what would later become fascism. Now, the labor movement is this tragic divide with the Russian Revolution and it essentially cuts right through the Social Democrats.

In Germany, that takes particularly nasty forms, because it’s essentially under a German right-wing chancellor in the Ministry of Defense, Noske, that did the Freikorps, which are essentially proto-fascist military units that are not under military command when they act. They executed Rosa Luxemburg and Karl Liebknecht, who are the leaders of the young generation of the radical left. Now, that’s before we have communists. That’s the Spartacus League, which gave the name to my chess club in Linz. They were not at that point communists because the Communist Party only gets founded later. But they’re still Social Democrats, or the radical wing of the Social Democrats. Hilferding, as we’ll see, is part of the independent Social Democrats that split because of support of war credit from the majority Social Democrats. So you have an environment rich in social, political, economic, and financial tensions. It’s brewing up. You have these tensions maintained through the 1920s. Then, from 1929 to 1931, the global financial crisis hit. In Germany, you get bank failures from 29 to 31. In a matter of months, the third largest German bank goes bankrupt and unemployment is then rising sharply in a matter of over a year from two to six million people, if I remember the numbers correctly. I’m not sure that I fully addressed your question.

Scott Ferguson: Yeah, you did and it really puts into sharp relief what a massive union-backed public works proposal and program would mean in an intense situation like this. I think you made that really clear and vivid. I’m wondering if we can circle back and talk a little bit more about Wladimir Woytinsky and his fascinating autobiography. So you told us a little bit about his origins, but maybe you can go a little bit more deeply into his story and where he comes from and where he goes? It really is fascinating.

Engelbert Stockhammer: Yeah, I think he’s brilliant. I think someone has to make a movie about him. So Woytinsky is a Russian Jew. He comes from an intellectual background and became a student leader in the uprising, the first Russian revolution, in 1905 and 1906. He gets involved in that and he’s, at that point, actually working with the Bolsheviks. I have to say I was surprised that he didn’t mention the Bund at that point. Now, we of course nowadays think of the Russian Social Democrats in terms of Bolsheviks and Mensheviks, because that’s what matters in the Russian Revolution. The Bolsheviks in 1905 and 1906 were a non-category. Even Trotsky didn’t know that he was a Bolshevik or would be. But what you have is the Bund, which is a Jewish socialist organization that is much more along the lines of European social democracy, meaning that they are a mass organization. They are not clandestine, avant garde, or revolutionary organizations like the Bolsheviks would be later. Also, they, like the Austrians, would sort of have organizations throughout society and they play in the open. They’re not clandestine, conspiratorial organizations. And they’re a main driving force of the revolution.

But I actually don’t remember Woytinsky mentioning them. They are mostly Jewish. And they would become a wing of anti-Zionist Jewish international socialists. In Britain, the Jewish Voice for Labour, is still an echo of it, and that may not concern you, but it was important for us in Britain because the right wing went after Corbyn under the heading of he is an anti-Semite. And the Jewish Voice for Labour, of course, was up in arms against it, because for them being a Jewish socialist, never meant fully endorsing Israel, necessarily. So he is part of that radical tradition. He works with the Bolsheviks. He’s in some ways very pragmatic and wants to help and start building work around the Petrograd Soviet and unemployment, which I understand he helped to set up. To do a little bit of public employment, but mostly they provide public food kitchens and other things. So they’re doing actual work on the street. But of course, this whole thing doesn’t live long enough to make much of a difference, because that revolution gets squashed and it gets squashed brutally. Essentially, the tradition of the Bund gets almost wiped out because the mass organization and the internal democratic structures are just no match for the authoritarian Tsarist regime that we have afterwards. And that creates an environment where the Leninist organization actually becomes effective and it will then later become important in the Russian Revolution.

So Woytinsky was sent first to prison and then to Siberia for 10 years. And in Siberia, in spring 1917 with the bourgeois phase of the Russian Revolution, he and tens of thousands of other political prisoners get released from Siberia, and he goes back to Petrograd to work for the Petrograd Soviet again. Now, we are in spring 1917. So when I say Petrograd Soviet, we mean Mensheviks, we don’t mean Bolsheviks. The Bolsheviks become strong in autumn and their rise is rapid. And Woytinsky, in his autobiography he can be a little bit self congratulatory at times–he has a life that’s worth aggrandizing, I have to say. So it’s not always fully clear where his interpretation kicks in. But initially, he seemed quite indifferent to work with the Bolsheviks and Mensheviks because he’s not ideologically committed enough. Although, I don’t know whether that was true of his younger self at that point. He gets involved with the Soviet. He works with them in various administrative capacities. And when the Bolsheviks got to power, essentially, he and the Mensheviks had to flee because the Bolsheviks were not very forgiving. It’s clear that he’s coming out of social democracy, that he has a broader notion of democracy than the Bolsheviks.

So he flees to Georgia, which for two years or so is an independent socialist republic. It’s dominated by the Mensheviks. He joins, but wants to be in the diplomatic service of Georgia and is sent abroad to essentially advertise the existence of Georgia to other states, such that they will recognize it. So he is sent to Italy. There’s only two problems here. One is that the Bolsheviks take over Georgia and Mussolini takes over Italy. He has to leave Italy and eventually comes to Germany where he works as an applied economist. In economic history, he is cited because he has a very descriptive book, Die Welt in Zahlen, which is essentially a statistical compendium that economic historians cite quite a bit. So he’s a pragmatic applied economist. If you read his work around the WTB plan, it’s essentially driven by the urge to do something. You won’t stand by when you see the working class being unemployed. He has, on the one hand, human empathy, but also political aims. For him, as long as you have mass unemployment, you may get rebellion out of desperation, but you will not get it properly. You don’t get on the offensive as long as you have mass unemployment. You need to offer specific things to those people in it, as opposed to…

Scott Ferguson: So he’s not an accelerationist.

Engelbert Stockhammer: No, not at all. He’s the opposite. You need to give something tangible to them, as opposed to the promise of a socialist utopia. And his work, then, when you read it, it is quite empirically driven. I mean, there’s a lot of data in there. When he discusses the employment effect and the costs, what are the average costs of most of employment, not very surprising, it would be in construction, housing, roads, and bridges. If we are talking 2008, it is all in there. He looks for the sectoral hourly wages of workers, of bricklayers, of people in the construction sector. What is the state currently paying for unemployment insurance and benefits? He wants to get his data on that straight. What he’s doing there is very clearly proto-Keynesian. He makes a sustained case that you should do that even if it is deficit financed. Analytically, he is not quite Keynesian. There’s no well understood theory of the multiplier. I mean, he was aware of Keynes. He read him. He also had a letter exchange with Keynes. He was writing in 1929, well before The General Theory of Employment, Interest and Money, way before Keynes had the theory of the multiplier straight. So my ask here is high, but in that sense, theoretically, it wasn’t fully advanced. But in terms of economic policy, he was there and that’s also recognized in economic history literature.

The earlier version of the WTB plan was much more monetary financing. It was much more tweaking around the gold standard, the reserves that banks would hold, and thus were vulnerable politically in that you couldn’t quite do that without the consent of France and the US. So initially, he wanted an international program, not just a German one. As it became clear that that was not forthcoming, he more and more moved towards domestic financing where there would be, if temporary, financing by the German central bank. So in other words, it is to some extent a central bank financed public employment program. Woytinsky then tries to get it through with the Social Democrats. He manages to convince the German trade unions, which is non-trivial. It’s non-trivial in the sense that, in the division of labor between the party and the unions, and they were closely intertwined, the division of labor essentially was that the unions do the workplace organizing, they strike for higher wages, but legislation is by and large the business of the party, and thereby also macroeconomic policy. And certainly, whatever international currency arrangement is not traditionally the territory of the unions. But in a way, they got desperate because it was their members that got unemployed, and they were losing members when unemployment was spiking, both to the communists but also to the Nazis. So they felt the need for action, but they’re also, in some ways, more pragmatic and less ideological than the Social Democrats.

Now, in some ways, they were more to the right politically than the Social Democrats. But in this case, they were more Keynesian. Hilferding, he was the main spokesman. He was twice finance minister and, after Finance Capital, was sort of the Marxist authority, and then followed in the footsteps of Karl Kautsky as the main ideologue of the German Social Democrats. He essentially was blocking it. He was shooting it down both in the front but also behind the scenes in the Social Democrats parliamentary faction. I presume we’ll talk a bit more about Hilferding. So it doesn’t go anywhere. The Nazis will pick up on it, but mind you all this is happening in 1931 and 1932. So this is literally a year before the Nazis take power. And then, in 1933 Woytinsky of course has to leave the country. I mean, if you’re a Russian Jewish socialist, you couldn’t be much further up on the hit list of the Nazis. So he gets out just in time and goes to Switzerland, to Geneva, and works there for what would become the ILO, the International Labor Organization. And what he does for them is he develops public employment programs. He doesn’t get a permanent job there because the Soviet Union is blocking it. Because they don’t want a Menshevik counter-revolutionary in the ILO. So he doesn’t get a job and individually goes to the US. In the US, he starts working for the Roosevelt administration. He works for the Bureau of Labor Statistics, and labor statistics is exactly his home territory. On the BLS webpage, you’ll still find links to some of his work.

However, I have to say that the story that I’m telling you gets tarnished. I mean, he’s a Menshevik. A lot of his comrades get killed by the Bolsheviks. So understandably, he turns anti-communist. But he goes further. He endorses American liberalism, and at the end of his life, in the 1950s and 1960s, goes to Latin America and to East Asia to preach the advantages of liberal capitalism. So this guy ends up going to, I don’t know, Brazil and Vietnam to tell him how great it is. So it’s a bit painful if you read the biography, but it’s a fascinating story. But ultimately, the reason why I’m so fascinated by it is you glimpse the possibilities of a socialist Keynesianism there. We tend to associate Keynesianism, and my Marxist friends would say this, as an attempt to save capitalism, saving capitalism from itself. There’s no question that this is what you can use Keynesianism for. And this is effectively what has happened with the global financial crisis of 2008. I would argue, with the New Deal, it was more about transforming capitalism than about saving it, or at least as much. So in my view, you can use Keynesianism for all sorts of things.

But when Woytinsky was doing what he was doing, you didn’t have Keynes yet. I mean, he hadn’t written The General Theory of Employment, Interest and Money yet. It wasn’t necessary to associate Keynesianism with the Liberal Party in Britain. Unknown to everyone else because he was writing in Poland, you had at the same time, Michal Kalecki, developing big parts of Keynesian analysis, the multiplier effect, in particular, very keenly already in there with a much more Marxist background. You have Woytinsky, who, whatever he does after, is clearly a serious, social democratic reformist, as the Austromarxists at that time were. So at that time, history was a lot more open. If you could imagine, if Hilferding had fully endorsed it, and then said, actually, this is complementary to the state theory that he and Otto Bauer had been developing. If we wanted to endorse bourgeois parliamentary democracy and the Social Democrats, of which Germany was the only party who was unreservedly in favor of parliamentary democracy, and if you paired it with a Keynesian socialist agenda, then actually that could help us to do what we’re doing. So it’s that moment of openness that to me is so fascinating. Instead of having the firm association of Keynesianism as something pro-capitalist, it’s about having it as part of a socialist agenda.

Scott Ferguson: I’m curious, in his writings, did Woytinsky cite precedents? Did he cite Louis Blanc and the French workshops or anything like that?

Engelbert Stockhammer: I’m not aware of that at all. There’s, of course, big parts of his Russian writings that I can’t read. But that’s not his style. Woytinsky is not an ideologue, I think, both in his own mentality, but certainly in the way he wanted to come across. I mean, he is also a proto-Keynesian in terms of the technocratic attitude. He wants to say, guys, here are the numbers. There are 6 million people unemployed. It’s not going to lead to inflation if you do public employment, because there’s 4 million more unemployed people than you had two years ago. So you can employ up to 4 million without inflationary pressure. And these are the costs that you will get given the wages. So that’s his discourse. It’s much more technocratic. And it’s also the discourse, across the political spectrum, that a lot of the Keynesians would adopt in the coming years in the US and Britain.

William Saas: Why didn’t Rudolph Hilferding see Woytinsky’s work as complementary? What conclusions do you arrive at in your read on the biography of Hilferding?

Engelbert Stockhammer: That’s a very good and fascinating question. My short answer will be it’s deeply rooted in his Marxist theory. But let me give you the long answer, just because it’s so fascinating. So Hilferding is part of the Austromarxist movement. So he’s coming out of the Austrian social democracy and, in particular, a fascinating group of essentially young, radical students in Vienna. At that time, it’s Otto Bauer, Karl Renner, Max Adler, next to Hilferding, and they will have their own journals. And Vienna, at the time, is an intellectual hot house. I mean, you have the grand guys of the Austrian school there. You have Böhm-Bawerk there. You have von Mises there. You even have Hayek there. I’m not even getting started with the philosophers and artists. But so, Hilferding and those young Marxists, they sit in the seminars of the Austrians. And one of the first things that Hilferding writes is a reply to Böhm-Bawerk’s criticism of Marxist theory. And it’s still widely cited. I actually don’t think his writing there is particularly good. But it’s still impressive. It’s sort of good Marxism. While Böhm-Bawerk, of course, is very polemical and critical, he has some serious points, in particular, around the transformation problem.

The tension between what the Marxists call prices of production, where you have uniform profit rates, and the labor values, where you don’t have uniform profit rates, where it’s all about labor values. That is a real problem for Marxist economics. That would become a big issue in the 1970s and lead to all sorts of value theory wars. But Hilferding essentially says Böhm-Bawerk is too much concerned with explaining relative prices. But as Marx says, we’re really interested in exploitation. It doesn’t settle it. It’s correct, but it doesn’t settle the criticism that Böhm-Bawerk raises. But Hilferding, he studied medicine. He’s a doctor. This is intellectual enthusiasm and a political commitment that gets him and others into these debates. And it still is substantial and widely cited work. But then he writes Finance Capital, and that is really an impressive work. Again, it’s outside his own studies. It’s not that this is his PhD. He does it beyond learning about bones and muscles and the like. What he does there is a restatement of Marxist theory, but it takes finance very seriously. He takes finance seriously because, in the German experience, finance banks are much more important than in the Anglo Saxon countries, in particular, because Germany is late industrialized.

The banks are used to finance heavy industry and pharmaceuticals. They need lots of capital investment, so they need big things. So they become important. But because that’s important, he has to go back and ask, where does money come from? What is the role of money? What’s the role of things? And a lot of what he writes there is very, very sharp and innovative. You can read discussions of options and option pricing there, net present value calculations, it’s all in there. We all had to read up around the global financial crisis. He also has a theory of endogenous money in there. In his case, it’s around bills of exchange. And with bills of exchange, actually, more of them are issued in a boom, because then there’s more demand for them. And more of them are issued, because, and here comes the Keynesian element, because the business outlook is more positive and, therefore, the liquidity preferences decline. But for Hilferding, that is the action around the supply side fundamentals that are given by labor values. So there is a dynamics of the financial sector, and it’s procyclical, it intensifies the boom, and consequently, the crisis. But it is if you want a cycle around the labor values and the production side.

Ultimately, in his story, you need gold, because you need the real stuff that has changed in value to represent money. And where you see that is in international transactions. In other words, it’s the gold standard. So he explicitly says what we have here is the experimental proof of the labor theory of value, an objective value theory. It’s that, internationally, you need gold for transactions. So the Keynesians say this is a policy regime that has all sorts of complex implications. Hilferding says, no, that’s the true nature of things of the capitalist relations of productions. And his crisis theory, I have to say, is, unfortunately, quite disappointing to read. Because it’s essentially a restatement of Marx’s analysis of the contradictions of capitalism that essentially say there are unresolvable contradictions, and eventually, they will be so bad that there will be a socialist revolution. It’s not the crisis theory that gives you any entry points for economic policy. It’s not a crisis theory that would help you if you’re the finance minister in 1929. They won’t guide you to what you can do. It’s essentially a story of capitalist doom and self destruction, that you can watch and then afterwards do the revolution and take over the ruins. 

But then, he also has a fascinating analysis of international aspects, and that’s an implicit reply to Bernstein and to the revisionists, where he emphasizes that those finance capitalists, because they also get tied up with the state, will give rise to dangerous imperialist dynamics. Of course, Lenin would draw very heavily on that later. So in other words, this is, at a time, really cutting edge Marxism and really cool in terms of what it weaves together. Hilferding then goes to Germany. He leaves Austria and works closely with Kautsky. During the first World War, he keeps party discipline but he is highly critical of the Social Democrats support of the work, precisely, because of what he had written in Finance Capital. And he eventually, with two handfuls of other social democrats, gets kicked out of the Social Democratic Party because they are too critical of the SPD’s support of the war credits. So Hilferding, and ironically, also Bernstein, the main revisionists, are then part of the independent Social Democrats. They would exist until, I think, 1922. And in the last elections they ran, they were almost as strong as the Social Democrats. They were, essentially, the antiwar and more radical faction. They would then split over their position with respect to the Soviet Union and over communism. And they would split halfway through, in part joining the communists and part joining the Social Democrats. 

Hilferding also develops the concept of organized capitalism. So he keeps up with what’s going on, and notices that the state is becoming more and more important and involved. In particular, during the war, but he says it also goes on afterwards, precisely because you have to those big trusts and industrial groups organized by finance capital. They get so big that they start cooperating with the state. And that, for Hilferding, is an entry point. Because, at some point, he says, nowadays, essentially, if you nationalize the leading banks, you have nationalized half of the big industry. So for him, that’s an entry point for socialist policy. Economically, this is stabilizing. The concentration is stabilizing capitalism because it stabilizes prices and gives more if you want a rational planning aspect to prices. Hilferding, because he’s a reformist, is one of those that advocate for the Social Democrats to reach out beyond a blue collar working class. And that in interwar Germany, but all over Europe, means reaching out both to white collar working class but also to the countryside and to the peasants. Other than in Sweden, that remains a big unresolved issue for all social democratic parties, that they’re essentially not getting into the countryside, which, at that time, electorally is a big problem.

So in some ways, he’s very open and supports parliamentary democracy and argues for a parliamentary role to socialism. In a way, his state theory is advanced, or it goes beyond orthodox Marxism. But his economics doesn’t. And then, when he finds himself in these debates in 1929, 1930, and 1931, he essentially can’t understand how you want to get rid of all this without the gold standard, because that’s ultimately the natural thing. And you can’t solve the fundamental contradictions of capitalism with a bit of government spending. So in that sense, the Marxist theory here, rather than enabling sort of creative strategies, becomes a big stumbling block that essentially allows them to not see that possibility for Keynesian policies, or instrumentalizing Keynesian strategies for a socialist agenda. And when he comments in the main social democratic newspaper before that, on the breakdown of the gold standard in Britain, he uses that as an argument to say, “Well, you see, it only leads to disaster if you try to do funny things. You first of all need to get back to gold to do anything.”

I have to say two things about the gold standard. From an economic theory, but also from a sociological theory of money, it’s fascinating how the gold standard goes down in Britain. It’s a strike in a military base. It’s the naval fleet that goes on strike against their wage cuts. Now, these are not regular workers. These are soldiers. They are not allowed to strike. So what you have here is a mutiny. It’s not just a strike. It’s a mutiny. And with all the debates that happened, all the Keynesians that told you that the gold standard is actually a bad idea, it’s when the soldiers start a mutiny that the gold standard breaks down. So think about it. Doesn’t it tell you something that international money and exchange relations has something to do with class struggle? They’re striking about wages. But also, they have a deep relation to the state. It is once the military operators go on strike that the gold standard breaks down.

Admittedly, going off the gold standard in Sweden or the US is a different story, but it’s hard not to see that, once you’ve thought a little bit about what money is, that this is something very deep to do with the state. But there’s also a class conflict dimension to it. But Hilferding doesn’t see any of it. The gold standard is the natural order of things because money needs to be backed by value and gold is a produced commodity, thus it’s okay. That then blocks the WTB plan for the Social Democrats. The Nazis are not shy. They take it over, partly because they’re interested, partly, because they see that this can drive a wedge between the unions and the Social Democrats. At that moment, the Nazis tried to flirt with the unions. A few months later, they put them into the prisons and concentration camps, of course. But at that time, they used that. Essentially, the Social Democrats don’t go anywhere with it. And within a few months, they are also in the prisons. And, of course, Hilferding dies in a Gestapo prison in 1941.

Scott Ferguson: And the Hilferding argument, on behalf of the party, was that we cannot do anything. We must let the crisis play out. And that’s what happened. I mean, maybe this clearly wasn’t the only causal factor but it is tragic and haunting to think of what support for this program might have led to instead.

Engelbert Stockhammer: What you said is perfectly correct. There’s two complications that I would want to add there. I mean, it’s very clear in Hilferding and his close collaborator, Naphtali, there is an understanding that you have to let the crisis run its course and afterwards you can do something. Naphtali explicitly says it’s in the boom that you can try to do reforms. You don’t fix the capitalist crisis, you let the market forces work itself out. But there’s two complicating factors. The first is hyperinflation. Germany, of course, had experienced, as part of its monetary troubles, hyperinflation in the early 20s, which was devastating, I would argue, more for the middle classes than for the working class. But of course, it led to big scars. So that argument gets rehearsed. It gets rehearsed at a time when it becomes patently absurd. So Naphtali is literally warning in late 1931 against the danger of public employment because it would be inflationary. In 1931, I looked up the numbers for writing the paper, you already have minus 10% inflation. You have serious deflation. So the deflation is already fully biting. It’s clearly not the issue.

The other issue is foreign policy and the war reparations. The Social Democrats did accept the Versailles settlement. So in principle, meaning with the qualification it has to be bearable for Germany, they were committed to war reparations. And going off the gold standard, or giving up on austerity in that context could also be seen as an international affront against France, in particular. So it is more complicated, but at the core is this idea that capitalist crises will fix themselves. It’s very different from Woytinsky. Woytinsky is clear about the debt deflation theory that Irving Fisher would formulate. That is, in the current situation, when Germany is over indebted, you want more inflation, not less. It’s part of getting out. You also don’t want 1 to 5%, you actually need serious inflation to help firms deleverage.

William Saas: So previous historians, and people who’ve studied this moment and the WTB plan, have interpreted it differently than you have. Can you talk about those interpretations and where they might have gone off course? What are they missing?

Engelbert Stockhammer: I’m not sure there are a lot of substantive differences. Because I’m interested in the possibility of a socialist Keynesianism, I have a different angle and a different context. But the WTP plan is not widely known outside a few professional economic historians. I mean, once you’re sensitized to the term, you essentially see it in all discussions of the Great Depression in Europe. If you look at Kindleberger and Eichengreen, it’s there and they would essentially all agree, if there was any serious German Keynesian plan, it’s the WTB. It wasn’t quite the only one. There was also a somewhat less important one that was coming out that goes in a similar direction. So that’s there. If you read Harold James and others, they all essentially regarded it as, in principle, economically viable. There’s big debates on whether it politically was ever viable. But it was an economically plausible, proto-Keynesian strategy. It’s also clear with the authors, Eichengreen, for example. I mean, these are Keynesians. They’re coming out of the technocratic traditions. And for them, in a way, the puzzle is like, why didn’t the Germans do it?

Where I’m different is, I want to say that there would have been a specific socialist route to that, that comes as part of a grander, socialist strategy, and in particular, one that would have complimented the Austromarxists. The Austromarxists tried to formulate a radical socialist but democratic parliamentary strategy. And Otto Bauer, for quite a while, was heading what is often called the Internationale 2.5. They just didn’t want to accept the split between the communists and the Social Democrats, which in 1920 or 1921, is very honorable, and actually not completely absurd. Of course, a few years later, it is a futile attempt. But if you want to do such a socialist transformation, your problem is what do you do with the state? How do you instrumentalize it? That was a big problem for socialists at that time, and for good reason. I mean, their experience of the state has been a very nasty one. In the 1880s, with the late Bismarck, the Social Democrats were outlawed. They actually weren’t fully outlawed, because there were some states where the Social Democrats weren’t outlawed, except for the national elections. But the regional elections, they were allowed and so on.

So the details are complicated, but it was clear that there was repression. It was clear that the old aristocratic elite had not only no sympathy, but also no tolerance for socialists. And in that sense, of course, it’s difficult how you can think of the state as something positive that you can use. And initially, that’s, of course, a critique of a lot of the Marxists. A lot of the reformists of the Social Democrats were mostly ad hoc. I mean, it was collective bargaining and unemployment insurance and state pensions, but it wasn’t really part of a reformist strategy other than the Bernstein version, which essentially says the state is relatively neutral, which obviously doesn’t do justice to the complexity and nastiness of actually existing and capitalist states. If you are Charles Tilly and Michael Mann, states historically have been war making machines. And they essentially incorporate other social groups, because they need them for more effective war making, and in particular, for more effective financing of the wars. Initially, the British state needed the merchants and then, with conscription and mass armies, you needed the local population. The state makes concessions that then takes on a life of its own. That’s the problem our socialists have: how do they do that?

And ultimately, the Austromarxists were not successful in that because they were Marxist radicals in theory, but quite skillful reformists on weekdays. There was a big unresolved tension between them. Keynesianism would have offered a quite specific entry point there. It would also have allowed socialists to develop a more meaningful theory and narrative of finance and financial crisis. Because, as I said, for Hilferding, and essentially for a lot of the other Marxist literature, finance is something that comes on top of those class conflicts and exploitation, and then complicates things. But whatever you do, finance can’t fix the basic problems. Now, from a Keynesian perspective, it’s not clear why finance is less fundamental. I mean, that doesn’t take away that you can’t regard class conflict as being very important, but finance is very much built in there. And in Marx’s M-C-M’, the circulation of commodities, of course, money is also important. So, if you think of people like Jim Crotty, there are attempts to build Marx further in the direction where finance and money have a quite fundamental role, but it would have allowed the socialists to appreciate more how important that financial crisis is, and that once you have a full blown financial crisis, that’s not something that’s going to go away quickly.

Once you have a debt overhang, once you have a lot of bankrupt firms, that’s gonna leave long lasting scars on your economy. In that sense, you need entry points. Of course, analyzing and discussing finance, coming up with specific proposals for financial reforms, takes a lot of energy, because it comes with its own language. You have to understand things that are complicated. I mean, think of the only financial instruments that we discussed in 2008. Now, these are things that are quite remote from a lot of people’s lives. It requires some effort. But the effort, to some extent, also comes with new instruments and new areas of maneuver if you realize that there’s something you can do in that area. You can use the central bank to either finance governments or to finance development banks that then have a specific agenda, say, decarbonizing the economy. So, in other words, it requires quite a bit of effort, but it increases the state of your economic weaponry to some extent. So in that sense, I think it’s very important that the socialists engage with it.

Scott Ferguson: So you’ve walked yourself into our last question, which is, and I’m sure there’s not one simple, straightforward answer to this. We have to think about various contexts, whether we are talking about Europe, we are talking about the United States, or we are talking about the global south. But that said, what for you are some of the deep lessons of this story for a contemporary left moving forward?

Engelbert Stockhammer: I guess the short version is that socialists have to take finance seriously, because it’s not just a minor complication. It’s a big part of the capitalist system. So any systematic strategy of socialist transformation needs to think about what you do with corporations, how you structure the workplace, economic democracy, whatever you want to talk about there. But it also needs to think about the financial sector, because this is where a big part of the mess is coming from. Circumstances, of course, are quite different now. Not only is finance very different, but also Keynesianism has a very different state than in 1930. So let me start with Keynesianism. In 1930, initially, no one was doing Keynesianism. I mean, it was sort of a revolutionary mindset for all sorts of people. Even Keynes struggled to convince the Treasury, where he had a quite prominent role, to go in that direction. And when Roosevelt did it, it was trial and error. Until very late, Roosevelt talked about balancing the budget. Thankfully, he wasn’t doing it. His policy was different, but the theory–sounds quite horrible sometimes what he’s saying there. Roosevelt compensated for it by activism. He just wanted to do something in a way like Woytinsky. And because he was so much an activist, he didn’t care that much about the balance sheet ultimately. But it was quite late that the Roosevelt administration actually rhetorically endorsed budget deficits. So at that time that was all very new.

And in that sense, there were some Social Democrats. When you go to Sweden, Woytinsky, or to Kalecki, there were some socialists that were there. We’re talking about Keynesianism, and afterwards, it is deliberately fully incorporated. Nowadays, it’s very different. I mean, Keynesianism is much more regarded as a toolbox, and as we’ve seen, is sort of in a piecemeal way appropriated by all sorts of different political directions. And as much as we can have a socialist Keynesianism, you can have Keynesianism of the financial elite. To some extent, not the full extent, I should say, but to some extent, we’ve seen that after 2008. If you read Keynes, there is not a single road, I think, on bailing out banks. The focus is on fiscal policy to stabilize employment. Along the way, if it’s useful, you can do something with the banks. It’s probably not useful if they go under. But that’s not the focus. But in 2008, it was a very big part of the focus. Now, to be fair, there was also quite a bit of Keynesianism there. I mean, in the sense of employment, but not all the way and certainly there was not any sustained commitment to full employment.

Scott Ferguson: Full Employment of the banks.

Engelbert Stockhammer: Yeah, but in that sense, they don’t care about employment. They care about balance sheets…

Scott Ferguson: No, I know, I was making a joke. They wanted to make sure the bankers were fully employed.

Engelbert Stockhammer: In that sense, it’s clear that you can do lots of different things. It’s a lot less revolutionary. But there’s a certain legacy on the radical left to downgrade Keynesianism as reformism. My point is, yeah, sure, this would be reformism, but there’s all sorts of different types of reformism. Of course, the role of finance has also changed quite a bit. The gold standard doesn’t have the same role. It’s not a reference point. But I guess there’s two or three areas where it becomes immediately important. One is the whole role of the central bank now. And one of the things where we’ve seen it is in the Euro crisis. The Euro crisis was the echo of the global financial crisis. But different from the global financial crisis, it was mostly played out, not on private debt, but on public debt. So it was the Euro area member states, or the southern periphery, that got into trouble. And they got into trouble, to a large extent, because the ECB did not say, okay, you are member states of the Euro area, thus, in the case of need, I will support my governments, which is what the Federal Reserve has done in the US, what the Bank of England did in Britain, and what the Bank of Japan did in Japan. The Euro area, for a long time, did not say that. Quite on the contrary. They said to Greece in the run up and when things were escalating, you really have to balance your budget, which of course, is a signal to the financial market, they’re gonna let it drop the value of Greek sovereign debt further. Therefore, let’s speculate against it.

With Draghi, his famous words were that the ECB will do everything it takes to maintain the Euro. They had the Outright Monetary Transactions facility, which they actually never used because the words were enough. Because financial markets knew from the US and Britain that if the central bank wants it, it can have it. And then the government spreads declined and things were relatively stable. And then, during the COVID crisis, the ECB essentially preemptively set up these funds to make clear that they will not want a replay of the Euro crisis. And related to that is the question of should the central bank fund governments? Should they fund it directly? Should we use monetary expansion to finance public programs? And the answer to this is that it depends on circumstances. Of course you can, there’s nothing wrong with it. That’s how we fix whatever fixing we did with the global financial crisis. And that is, again, what happened during COVID. Once the government does substantial expansion because of their social needs, whether that’s because of the crisis or because of a pandemic, of course, you can do it and it does not cause inflation or any other horrible things.

Now, that said, there is a bit of a delicate thing if you open those floodgates, because then essentially, every politician could potentially take the central bank for whatever interests they have, which often would not be progressive. So it is clearly delicate. But economically, it depends on how big the social problems are, how big unemployment is, and whether that works or doesn’t work. So if you think of decarbonizing the economy, we need a massive investment program beyond the scale of what we’re currently making. If we want to meet climate targets, of course, you should use central bank funding. In a way, it’s a no brainer. I mean, if there are massive needs, you can do it unless you’re at full employment, which is very clearly a point where it would crowd out other activities. But if we are reaching full employment, and we are not on track of the decarbonisation of the economy, you have to shift employment. So even under these circumstances, I would support it. If inflation is the price of shifting away from fossil fuels, then so be it. Okay, that was the point about central banks and that is probably most important. I could also talk about changes in the financial sector, but I think in the interest of time, I will not do that. But trust that this was interesting enough,

William Saas: We would probably love to talk to you for a few more hours. This has been amazing. I wonder if you could close us out with maybe a word to our comrades, the Marxist folks who may remain resistant to the idea that these ideas and insights that Woytinsky and you talk about, in terms of the positive role of the state, potentially work. I think part of the ongoing skepticism, and you acknowledge this as part of the constraint at the time when Woytinsky and Hilferding were operative, was the political constraints. And to represent the Marxist position in a way that I think is as full and fair as it can be, it’s informed by a profound skepticism of the sort of ability or willingness of the political class elites and capitalists to go along with it. And then, in fact, that public employment programs along the lines that we’re talking about here, and that Woytinsky was advocating for, some people may have seen that clearly, or may see that clearly today, as something that could result in something more socialist and oppose it on those grounds, articulated or not. For our Marxist friends, a note of hope and, I don’t know, optimism. If you could leave us on that note, that would be excellent.

Engelbert Stockhammer: I guess the entry point there is Kalecki’s famous 1943 paper, “The Political Aspects of Full Employment,” where he’s essentially making the argument that if you want, you can create full employment. In that sense, he’s fully learned the Keynesian lesson. And he says, technically, it’s not a problem. We know how to do it. The constraints ultimately are political. Politically, the ruling classes will not want sustained full employment, essentially, because it shifts the bargaining power too much to workers. And there’s certainly some truth to that argument. And to some extent, you may argue that was hidden in the course of the long boom of Fordism where some sections of capitalists got increasingly skeptical. I would still even argue the other. Actually, it wasn’t so much industry. It was finance that wanted to move away from Fordism and Keynesianism. The big companies, in particular, the ones going from mass consumption, actually weren’t that hostile initially, but could also live with neoliberalism. That’s a digression. The important point is Kalecki infers from that, once you’ve reached full employment, you need further institutional change. And I think that’s the crucial point: what is the change that we need? For a lot of Marxist comrades, they come with the Kalecki paper as an end of the debate. They come and say, we already told you the capitalists aren’t gonna like it. That’s why it’s not gonna happen.

William Saas: 100%.

Scott Ferguson: So let’s give up.

Engelbert Stockhammer: If that’s what they say, then they have to own up to what Hilferding said. Then, you have to let the crisis play out. Otherwise, you need a rather, I’m tempted to say, almost naive picture of the revolution that you could clear the table from all the institutions that we have here. When we do a revolution–maybe I should say if–we will have to work with the institutions that we have to some extent. Some of them will be fully replaced, but a lot of them will not. Yeah, we have to. So in a way, in my view, the circumstances for revolution are based in a situation that you hit in the late 60s and early 70s, with relatively full employment and strong labor movements. It’s there where you need further institutional change embedded in society that will require changes in the workplace, economic democracy, and what have you. But it will also involve a lot of changes in the financial sector. It obviously will also require changes in state structures. But that is where we have to get. Because if you think that you can really change the power balance and take state power away from capitalists, you can also do that within these structures that will anyways not magically disappear. Even with neoliberalism after 30 years there are bigger states than before. With the revolution, that will not go away. We will be left with massive state structures. And socialists, a strategy on how to deal with it is not say, “Oh, it’s capitalist, we’re not going to deal with it.”

William Saas: Engelbert Stockhammer, thank you so much for joining us on Money on the Left.

Engelbert Stockhammer: Great, that was fun!

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

The ECASH Act with Rohan Grey (New Transcript!)

In this special episode, Rohan Grey (@rohangrey) joins Billy Saas  (@billysaas)  and Maxximilian Seijo  (@MaxSeijo) to discuss the “ECASH” or “Electronic Currency and Secure Hardware” Act. Introduced by Rep. Stephen Lynch (MA-08), Chair of the House Committee on Financial Services’ Task Force on Financial Technology, and based on Grey’s research on electronic currency, the ECASH Act directs the Secretary of the Treasury to develop and pilot digital dollar technologies that replicate the privacy-respecting features of physical cash. Recognizing the United States Treasury as an institution ideally suited to managing a digital U.S. dollar, the Act treats monetary inclusion and privacy as a political rights and public goods, while at the same time eschewing the exclusionary and ecologically destructive effects of crypto currencies that rely on blockchain technologies.

The ECASH Act is co-sponsored by Rep.’s Jesús G. “Chuy” García (IL-04), Rashida Tlaib (MI-13), Ayanna Pressley (MA-07), and Alma Adams (NC-12) of the Committee on Financial Services, and endorsed by Americans for Financial Reform, Demand Progress, the Action Center on Race and the Economy (ACRE), and Public Money Action.

Rohan Grey is Assistant Professor of Law in the College of Law at Willamette University.

Full text of the E-CASH Bill

E-CASH website


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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

Maxximilian Seijo: Rohan Grey, it’s great to have you back on Money on the Left.

Rohan Grey: Thanks for having me.

William Saas: So last time we spoke in fall, a lot was going on, and particularly around the debt ceiling debates. We discussed the trillion dollar coin proposal, which you’ve done a lot of work and research on, and which entails the US president animating and channeling the money creating authority of the US Treasury to avert financial apocalypse. This time, we’re having you back to talk about an exciting new proposal. And that is the Electronic Currency and Secure Hardware (ECASH) Act (H.R. 7231), which was introduced today by Representative Stephen Lynch of Massachusetts, who also serves as chairman on the task force of financial technology. So I think in a way, like #MintTheCoin, Congressperson Lynch’s ECASH proposal entails recognizing and using the money creating authority of the Treasury, motivated this time toward less spectacular and very different, very urgent ends. So can you tell us a bit about your work on the bill and how you understand the nature of the US Treasuries claim on the digital dollar? And what does this proposal have to offer users of US dollars?

Rohan Grey: Yeah, I mean, there’s actually an interesting additional connection to the #MintTheCoin story, which is that one of the probably first very vocal advocates for a treasury issued cash-like version of a digital dollar was the former director of the US Mint, Philip Diehl. And he made that proposal not in the last five years, but back all the way in 1997 in a congressional hearing on the future of money, where he was essentially arguing that we need to look to the future of money. We’ve just done big internet regulation bills, like the Telecommunications Act of 1996. And now we need to look at what the future of money is going to look like. And he made the argument at that point and in that committee that the Mint is the agency that has historically made hardware-based forms of a privacy respecting dollar. The coin is the most privacy respecting form of money we’ve ever created. You can hold it in your pocket, it doesn’t have a barcode, there’s no identifying features, and you can carry it wherever you go. 

The idea at that point was that we could use prepaid debit cards, magnetic chip-and-pin card technology, to hold balances of currency directly, like we do with coins in our wallet. Today, that’s the similar kind of logic that we’re bringing back to the conversation. Right now, around the world, the debate over how to create a government digital currency has been almost exclusively defined in terms of a central bank digital currency, or a CBDC. That term sounds very technical, it sounds very wonky, but it says nothing other than the central bank is going to issue it. It doesn’t tell you how it’s going to be designed. It doesn’t tell you who it’s going to be for. It doesn’t tell you why it’s being issued. All it says is: we’re in charge. But it creates this very perverse dynamic because the central bank says, “We don’t know what it’s going to look like, but we’re going to issue it.” And then, in the next breath, they say, “Well, when it comes to the design, we don’t have any experience doing retail services. We don’t work with the public so we probably shouldn’t design it that way. And, of course, Congress gets to make the decision on how it should be designed, but we think it shouldn’t have these features, XYZ, like anonymity.”

So suddenly, by the simple act of calling it a CBDC, even though that term has no content whatsoever, you’ve already narrowed the ideological, imaginative space around what we’re trying to do with a digital dollar. So what this proposal is doing that is different from the conversation we’ve had up until now is to say, let central bankers continue their conversation and we’re going to have a separate parallel conversation. We’re going to have a conversation around a form of digital dollar that is like physical currency, it’s like coins and notes, and it works differently to the kind that central bankers are really interested in. Not in competition, not in some sort of zero-sum fight to the death, there can only be one, like Highlander, but in the sense that we’ve always had multiple forms of money. They’ve always existed in parallel. You open your wallet right now, you might have some cash, debit cards, credit cards, and maybe a prepaid gift card or a Starbucks card. We’ve always had different options.

This is simply preserving that kind of pluralism and institutional, ecumenical approach to government currency design as we go into this digital dollar debate. But the Treasury, historically, has the capacity to do hardware security technologies. Coins and paper currency have existed for a long time before the Federal Reserve was ever established. The Federal Reserve manages accounts, but the Treasury is responsible for anything that is designed to go directly to the public held in your hand and in your pocket. That’s true of both coins, which the mint was established very shortly after the Constitution was ratified. Then, the Bureau of Engraving and Printing was established in the 1860s, 50 years before the Fed. More recently, the Treasury does prepaid cards. It sends out snap cards, EBT cards, and all that kind of stuff. So if you were being objective, and you hadn’t already had your ideological blinkers narrowed by the CBDC discourse, you would say, “Hey, we want to issue a form of digital cash. Who’s best positioned to do that?” I think, objectively, you would end up at the Treasury. So the question of why the Treasury, I think, is always kind of backwards. Why shouldn’t we be doing it with the Treasury? It’s the obvious place to start. The only answer to why not would be central bank ideological dominance, frankly.

Maxximilian Seijo: Perhaps we can dig into a little bit of these details of what the Treasury would be doing under this proposal. We have in our notes here that only one of the three pilot programs in the proposal uses anything like a distributed ledger. So I guess, maybe as a way of getting into that, why so little love for the blockchain in this ECASH Act?

Rohan Grey: See, I would have said, we’ve actually given a lot of love to the blockchain, because we’re even giving one option to be blockchain-based, when in fact, this technology, and the use cases that we’re trying to establish, shouldn’t be using any ledger at all. If you think about cash, there are a lot of different reasons why people like to use cash. They like the simplicity of it, the resilience, you can use it offline, you don’t need an internet connection, it’s not going to run out of battery, you don’t need permission, and it’s not keeping a record. But I think one of the things that defines cash is that there is no third party involved. There’s no permission you need to ask once the cash gets issued. We’re not talking about a private cryptocurrency, where the issuance itself is based on some pseudo gold standard, mining logic. We’re talking about a publicly issued dollar, where the amount and who it gets issued to is still a matter of collective governance. But once the money is out there, once it’s issued, it has its own locus of gravity.

You can’t have the government back door shut it down afterwards. Once it’s out of your mouth, it takes on its own life, so to speak. And in this situation, in order for that to exist, you need to think about how to not simply distribute a ledger, but have no ledger whatsoever. I forget who it was, but one of the poets said, “Silence is the most beautiful language.” Because everyone else has to compete against the most perfect language where you can say things without any words at all. And this idea of a centralized ledger versus a distributed ledger is a question of, well, we need someone to keep the records. Who do we trust? Do we trust Big Daddy’s central government? Or do we trust the wisdom of the crowd or something? And the reality is that that’s an interesting conversation. But there’s a whole separate conversation, which is, what if we don’t want a record at all? What if we want to go dark? What if we want to actually just have this transaction to exist ephemerally in the moment, and then it’s done. And the only record is that the ownership of these instruments has changed on the other side.

Maxximilian Seijo: I think what’s so interesting about what you’re saying, too, and something to highlight, because I can imagine a lot of people getting really mad at this for a lot of different reasons, that maybe they don’t even really fully know why they’re mad at it, but the thing that stands out to me when you describe it is the pluralist approach. This necessity for having multiple forms of money that have multiple structures, that have a ledger attached, or even not attached to them. And how with certain aspects of society, there’s something necessary about providing space in different forms of money, and different ways of securing the hardware of the currency. I was wondering if maybe you could talk a little bit more about why that’s necessary?

Rohan Grey: Yeah, and we designed this initially to be a pilot, because this is still very early days. We need to actually have a conversation as a public about this. And one of the things is that, because central banks have dominated the conversation up until now, they’ve sent a pretty clear message to the industry about what they’re looking for. So when you’re looking at people out there who are proposing technologies to sell to central banks, to provide services to central banks issuing digital currency, interested in digital currency, right now, most central banks have said we want something that’s likely to be account based. It’s likely to involve intermediaries, it’s likely to be a two tier system where we’re not going to manage the last mile service, that’s going to be someone else. And the technology companies have heard that, and they’ve responded and marketed accordingly. But one of the things about this pilot program is essentially to say, look, there’s a whole separate segment of the market that we’re interested in supporting. There’s a whole separate segment of production. Take markets out of it. We want this kind of technology. If you’re interested in building it, then we’re interested in buying it, essentially.

And to open up this space for technologists to know that there’s interest in it for them to pursue. But we did keep it relatively agnostic at this stage, because there are different models. For example, prepaid cards have a different threat model than cell phones. They have a different set of use cases with a prepaid card. It’s a single-use piece of hardware. With your phone, you may be using the trusting environment on the phone or the SIM card, whatever it may be, but you’ve also got all these other applications and other ways that your phone can have your hardware security compromised. So we’re being ecumenical at this point by saying, let’s let the tech companies and let’s let people who’ve got interesting ventures on this front. I hope nonprofits and open source collectives will be a huge part of that. Let’s let them come up with things. Let’s fund it. Let’s see what the variety is. And this is why, even though I think at a kind of technical specs level, it’s almost antithetical to have a blockchain or ledger. We’ve even kept the option that if somebody can demonstrate a use case or a model where that could work, we’ll keep an open mind about it here.

But the goal is to be very clear that this is supposed to have the features of cash. There are account based technologies that are important. They should be pursued in other contexts, and certainly in the CBDC conversation. But here, we’re specifically looking for something that can have the functional specifications as close to cash. The other thing is that all technologies are vulnerable. There’s no perfectly secure system. So we’re not trying to propose here that hardware security is perfect or flawless. There are well known risks. But one of the elements here is that, if you design it with quantitative limits on each device, like we have with denominations of physical currency–we don’t have $100,000 Bill anymore–even though I might want a trillion dollar coin, I’m not suggesting that we’d be using them at the vending machines. So there will be some baked in limits to how bad counterfeiting could get at scale.

You would still need 10,000 cards shipped in big boxes and crates, or prepaid cell phones by the dozen, to benefit from counterfeiting at scale. But I think the other thing is that, when we’re talking about the scale of the political risks and political stakes at play here, that is to say, privacy, civil liberties, respect for tolerance, respect for dissent, those are such important values that, if we have to deal with a little bit of risk of counterfeiting, that’s fine. We’ve been doing that for centuries. The Secret Service protects the currency first and the president second. So I think the idea that we need to have a perfectly secure currency to be worthwhile is that technical model is not true. And that as long as we can keep the risk profile from being absolutely catastrophic, then the privacy benefits are worth pursuing this as one option.

William Saas: So the proposal is motivated by two moves that are, I think, going to strike a lot of people as immediately counterintuitive. One is that it should be the Treasury rather than the central bank. And then, two,  there would not be a preference for, or prioritization of, or even special consideration of, the blockchain or distributed ledger over something else to make counterfeiting impossible and to guarantee security, which is illusory, right? So I love that we’ve gotten quickly into the weeds. And we’re going to have a link to as much information about this proposal as we can in the show notes. But I think it would be really useful for us and for listeners to have a bird’s eye view of what this proposal will look like if it is enacted, and from the pilot stages to that final moment of secure hardware. You talk about cards and then prepaid cell phones. Maybe take us from the legislation to the hands of consumers.

Rohan Grey: Yeah, sure, thanks. So the first thing is, due to your original observation, I think when we look at policy constraints that are also political or technical, we often take one particular constraint as the starting point for our inquiry, and then everything else is assumed to be less important than that constraint. So to give an example from a world we’re all familiar with, politicians will say it’s really hard to sell deficit and budget politics, so I don’t want to do it. And then, you end up having all these incredibly complicated conversations about how we’re going to get pay-fors, how we’re going to get the taxes, etc. And it may be that half of those political challenges are even more complicated than simply teaching people about deficit politics. But because you started from the idea that that was too hard, you end up doing things that are much, much harder to compensate. So in this debate, we often have a situation where people say, well, anonymous cash is impossible, politically. We can’t sell it. And then, we end up having these extremely convoluted conversations about how to balance privacy and national security and all these different interests that are often much more complicated than if we had just started from the outset and said, “Look, it is going to be hard to fight for this, but it’s actually really important.” 

So all of that is just to give a precursor of the reason why this bill feels so different to everything else. It is because we aren’t making that initial political compromise that then makes all the other decisions really bad or really difficult. They say hard cases make bad law. Well hard compromises make bad further down the road policy decisions. But to go in the bill itself, first of all, the bill would be funded directly through money issuance. There’s no taxes funding it and there’s no national debt. The Treasury would spend the money, the funds would come out of a special account established at the Fed that would basically be like a permanent overdraft account. Any overdrafts incurred by the Treasury would not count towards a national debt. It would be at the Treasury’s discretion how much to spend, and the Federal Reserve would book any losses on that account and any overdrafts that it maintains for the Treasury, separate from the rest of its budget. So it wouldn’t affect any remittances back to the Treasury and it wouldn’t affect the net operating surplus that it returns. So that money would then go towards funding pilot programs. 

Those pilot programs would be overseen by a new position, which is a director of what’s called the Economic Currency Innovation program. That director would have relatively wide authority under the Treasury Secretary. They would coordinate with a larger digital currency group that consisted of other agency heads and other important government officials across the government, including chief technology officers and things like that. There would also be, in addition to the Economic Currency Innovation program director, a monetary privacy board. And essentially, independent privacy experts would oversee the process and periodically conduct audits and reviews and release their findings to the public. Their job would be to essentially keep the system honest and oversee it from a privacy and stakeholder-oriented perspective. The bill itself, in addition to establishing pilots, defines what a digital currency would be. So it says what ECASH would be as a specific form of digital currency. So it’d be legal tender.

It would be a bearer instrument, which means whoever holds it, is the owner of it considered legally. It would be not based on a ledger so that the value would be stored on the physical instrument, on the physical device. And it would be capable of being held by the public without any fees, fines, and things like that. And merchants would be required to accept it to the same degree as they’re required to accept physical currency. So they couldn’t unfairly penalize people who were trying to pay with this instrument. The pilot program is set up in two phases. There is an initial phase, which is a proof of concept phase, where the Treasury would select three pilots of which two, at the very minimum, would involve some sort of debit card or prepaid chip card capacity. And then, at least one would require phone based capacity. So we left the option open for someone to come up with a ledger based system if they really can show how it can meet the broader specification needs of cash, i.e. offline capacity.

And then, after that initial set of pilots that would take place, I think, within about a year, there would be a write up, a report, a review of what went right and wrong, and then there would be a larger scale rollout pilot, presumably in collaboration with another government agency, or a state or local government, something like an EBT card program or an economic cash program. For example, you could imagine, not that I support it as a policy, but Gavin Newsom’s gas tax rebate card could be a good example of how you might pilot something like this. And that’s the sort of second phase pilot. And the idea is to keep a relatively tight timeframe on this. Obviously, if things need to be stretched out, because of technical considerations, that’s fine. But the goal is to not have this due in 2035 or something, but to be relatively soon, because in the world of technology, five years is infinity.

Maxximilian Seijo: So now that listeners maybe have a sense of not only what’s in the bill, but also like the certain considerations that went into drafting it, I think, a question that comes up is, who are the political coalition’s involved? And how is this gonna play out? Maybe you can talk a little bit about the stakeholders and where the political will for passing this might come from?

William Saas: Anyone can create an ECASH Act, the problem is getting accepted.

Rohan Grey: Yeah, from your mouth to God’s ears. I think this is a really interesting part of this bill. In addition to this institutional move, where we took it outside of the CBDC conversation to start a whole separate conversation to say, “Look, you’ve done a really great job as central bankers around the world defining this term CBDC to be exactly what you want it to be while still giving the appearance you haven’t made any decisions yet. We’re still considering every option as long as they’re black. And you’re in charge of creating an instrument that we’ve defined the parameters of.” This kind of debate. But in addition to that institutional move, there is also a political move, which is that if you look at the broader crypto conversation right now, a lot of it is taking place on this vector that I find to be very problematic, which is that a lot of the kind of industry people–the liberal crypto advocates–have positioned themselves as the only ones doing anything. They’re the only ones doing something new. We’re the ones trying to fix problems. Have you tried to use the payment system? It’s slow, it leaves people out. It’s exploitative, blah, blah, blah, blah, blah. Look how much better the things that we’re trying to create are going to be.

And then, the progressive response is, you’re lying. You’re a fraud. You’re a charlatan. You’re making it up. But it comes across as a combination of sour grapes and being the party of “No!” William Buckley talks about standing on top of history shouting, “No!” or shouting, “Stop!” There’s almost that vibe. It’s a bit reactionary in its opposition. And I think part of that is because you’re trying to fight something with nothing. Unless you actually have a progressive vision of the future that’s stronger, unless you want to own the future of technology, of where we’re going, then you sound like somebody that thinks the status quo is okay. Even if you don’t, that’s the dynamic. So I think it’s been really problematic that the only vision that people have at a mass level for the future of money in an exciting way is this crypto vision. And one of the big ways that that gets justified is that the government alternatives are pro-surveillance. They’re not your friends. You’re putting a dangerous device in your pocket, just like we had now come to realize with Facebook and Google and things. What we thought were more benign turned out to be malicious.

So this coalition, I think, is a combination of people that recognize that the ability to use cash or cash, like transactional freedom, is really important for marginalized populations. So sex workers, marijuana businesses, people in the gray economy, undocumented people, people working in the informal economy, all of those kinds of people, but also political dissidents. Palestinian activists who don’t want Venmo to shut down their donations. People who are trying to engage in political dissent, who don’t want the racist governor of Alabama getting the list of all of their political donors to the NAACP in the 1950s, which was a real Supreme Court case. So those kinds of things, where we don’t want the money to be a tool of oppression, I think brings or should bring progressives to the table. Then, you’ve got privacy advocates. You’ve got people that care about tech privacy in general. The ACLU and civil liberties groups who should have been on this for a long time, but have not been because money has been scary as a topic–it’s hard enough to get your head around technology to get your head around money as well.

But then, interestingly enough, and God forbid I would ever say I want to have a bipartisan coalition, you have the kind of libertarians who are true believers. Now, I think they are a vanishingly small subset of the community, but those for whom they definitely prefer private sector solutions, they definitely prefer crypto. But if they were going to have to have a government digital currency, they  would probably prefer one like this. So they understand that from a pro-privacy point of view, that cash is very important. And even if they don’t like the government, they like having more privacy in their money than not. So I think you’re going to get some people on that front. Then, the last group of the people are those who’ve been opportunistically opposing other government options, who have been using the surveillance talking point as a stalking horse, as a way to bash CBDCs, which I think is a valid criticism. Now, whether they’re actually serious in saying they would prefer a privacy respecting alternative, I’m not very confident about, but this will at least give them an opportunity to show that they were something other than cynical, duplicitous liars. So we’ll see. But I think there could be a relatively wide coalition here of people who oppose government domination, or corporate domination, who believe in privacy and the ability of using money in ways that authorities might not approve of as being an important form of political freedom.

William Saas: So in terms of actual members of Congress who might be in support of this, we have Stephen Lynch. We also have Chuy Garcia?

Rohan Grey: Yeah, notably, Stephen Lynch is a moderate. He represents a relatively blue collar district, but he intuitively understands the benefit of opening up a conversation around the Treasury, rather than the Fed. He intuitively understands the value of preserving cash. He knows that this isn’t radical in the sense of a departure from the status quo. This is protecting freedoms that we’ve had for thousands of years so that they don’t get crushed in a sociological transformation towards a more digital society. So we’ve got moderates there. The original ECASH proposal that was in a much shorter form was actually the ABC ACT that I worked on as well with Congresswomen Rashida Tlaib and Pramila Jayapal. And about 19 other progressives signed on board, including Chuy Garcia and others. So Congresswoman Tlaib is a co-sponsor of this bill. Congresswoman Presley is a co-sponsor. I think other progressives are going to get on board. There have been other people in the Senate side who are supportive as well, who care about privacy and care about a public option.

In my experience, when we talk to progressives, they often haven’t considered this issue. But when we explain it to them, they go, “Oh, that makes sense, we should definitely have that.” Now, the way you’re going to lose people in this coalition are going to be those who care a lot about surveillance, who care a lot about anti-money laundering and KYC, and who see this as a step backwards. Because for them the War on Cash is a positive development. It’s a good thing that we have more surveillance, that we have the ability to create backdoors, to freeze accounts, and all those kinds of things. So they see the current inertia, which is towards the inevitable death by attrition of cash, as a good inertia. And anything that arrests that inertia is bad. So the opposition is going to come from people who are quite comfortable with the fact that cash is dying and don’t really want to resuscitate it.

William Saas: Because it’s dirty and can be used for dirty things.

Rohan Grey: Yeah, bad people use bad money. If you’re a good upstanding citizen, you’ve got nothing to hide,

William Saas: There’s nothing wrong with that logic.

Rohan Grey: No, famously, societies where every political leader is expected to have no vices at all never have their own political vulnerabilities.

William Saas: So I’m trying to imagine the scene of the dissident using this digital dollar, or ECASH electronic currency. What is the hardware that they might be using? I know there’s going to be lots of experimentation.

Rohan Grey: They could be using a prepaid card that might have an E-Ink display. It might have a few really basic buttons on it like something that looks like the remote that you might program your air conditioner with or something.

William Saas: Hopefully, a little more sturdy.

Rohan Grey: But yeah, there are already versions of those kinds of chip cards in China, and elsewhere, all the way back to the 1990s were the earliest forms of government pre-stored value cards. We also see similar kinds of stored value card technology with transit cards, things like that, currently in operation. But you could imagine something where you essentially tap that card using some sort of near field communication. You could maybe put some numbers into the card to say I want to send $25. The card then produces a unique 10 digit code. You can then type that code into someone else’s card and it will receive the funds. That’s one option. You could also have essentially an app on your phone that integrates an ECASH wallet on the phone with accounts that are managed remotely and in a ledger-based system somewhere else in a server. So that you pull up the app on your phone. It’s called your money app, and it has a checking account, credit card account, and a cash account. And if you want to transfer balances to your ECASH account, in a cash wallet, you simply go withdraw $100 from my checking account, your bank debits your account, and it’s the equivalent of if you walked into the bank and asked for a $100 note. They take it from their E cash balance. If they need more ECASH from the government, they buy it, the government debits their reserve account, gives them the equivalent of pallets of cash, and the armored truck comes and delivers them to the safe. This is all just happening remotely with software now.

William Saas: Can they animate a Brink’s truck on your card, maybe?

Rohan Grey: Yeah, that’s right. You see a little armored truck go from your bank app horizontal bar down to your cash app horizontal bar, and then the value appears there. And then, if you want to make a transaction to someone else’s phone, you can either send them a text message with the code, or you can tap the phone next to each other or whatever else. Merchant point of sale terminals, we demanded that the bill require the technology to be interoperable. So in the future, it would be simply you have a terminal and it says, would you like to pay with checking, credit, or ECASH? You press ECASH and it taps your balance, etc. And that can happen offline. It can happen with something that has no battery other than kinetically powered. There are wearable tech now things where the low powered chips get powered by movement and by you touching it, those kinds of things. So you can imagine all sorts of ways that that low powered hardware can continue to function without a battery or something like that.

William Saas: Speaking of low powered hardware, how many Nvidia graphics cards are going to be needed for the Treasury to roll out this program?

Rohan Grey: Yeah, I mean, this is one of the funny things. If you go back to that 90s moment, when I was saying before with Philip Diehl was testifying in Congress in the mid 90s, you had initiatives like Mondex, which was a bank initiative to create a stored value card. You had initiatives like Avant card at the Central Bank of Finland. But I think it was one of those moments where it’s wrong to be right too soon. So the conversation around money hadn’t caught up to the conversation around the internet, essentially. So when people were experimenting then with stored value cards, there just wasn’t that much government interest in them. And eventually, the technologists said, this isn’t going to work for us, we went a different direction. And the way that they went, because a lot of them were kind of libertarian, oriented in the Cypherpunk movement, unfortunately, they went into we’ll create our own money. Up until that point, it was we’re going to use the public money, but we’re going to create privacy respecting payments technology. And now it was, well, the government’s not going to meet us halfway. So we’re just going to create our own private money. And then, that way, we’ve closed the loop where private money and private tech can do the whole thing.

Now, of course, the problem is that you then need a theory of decentralized issuance. You need a kind of theory of fiscal and monetary policy to go with your payments theory. And that’s where you end up in these incoherent libertarian, we can do it in the private sector, there is no collective governance, bullshit. And it creates a technical problem, because you now need to solve not only decentralized payments, but decentralized issuance, and that’s where you get to mining and all of that kind of stuff. But if you have a public hardware based system, then you can have trusted issuance, and then the hardware is only doing the payments processing. It’s actually a much smaller technical problem to solve when you’re not simultaneously trying to solve the money problem as well as the payments problem.

Maxximilian Seijo: And from a technical perspective, too, I think, as you’re saying, this is interesting as a way of connecting up these ideological presuppositions about money and opening up a conversation to the design of money and the creation of money around a public and democratic ideals-based paradigm. And opening up what it means to have political freedom, as you said. And it’s interesting to see that in line, historically, with the moment of politicizing money, generally speaking. It feels like an important theoretical step in connecting up some of these problems.

Rohan Grey: Yeah, I mean, you all have done a great job of talking about queering money and the way that money can be a site of people to provide alternative modes of being, to demonstrate, and to experiment. In order for that to happen, the money itself needs to have some degree of tolerance for pluralism. We created the public money to serve these collective and social goals. But separately, it can also serve these goals that no one expected, no one planned for, but we’re improvising because we’ve got a few minutes in between rehearsals and that kind of stuff. As long as the studio isn’t shut down and we haven’t been kicked outside, then we’ve still got access to the materials. We can still play the instruments together while we’re in the room waiting. So this kind of technology is a way of saying, look, it’s still public, but it’s public with a little bit of space for you to define that around the edges. You, as an individual, all the way down to the individual node in the social organism, you can have the freedom and autonomy to offer a contribution to how you think this thing should look like, even if it’s different to how we have collectively decided up until now. It’s that balancing of the consensus versus the individual editor on the Wikipedia page.

And in that respect, I think, not to sound like this is super nuanced, but up until now, we’ve been having this conversation where the dichotomy is public money and private money. And we have confused the word private money there with privacy money. We think they’re the same. But really, at the very least, we should be thinking of a four box, two dimensional kind of thing, where you’ve got public money and private money, and then privacy respecting money and non-privacy respecting money. And as long as the public, the cultural imagination, is stuck between a public surveillance coin, and a privacy libertarian coin, I think we’re fucked. I think we’re in a bad place. I think we’re gonna continue to go in a bad direction for the future of money. But if we can get the conversation up between a privacy respecting public money and the other two, then we can see how privacy respecting public money is better than a government surveillance coin. And privacy respecting public money is better than pseudo-privacy respecting private money, and in fact, may actually be better at serving that privacy function, because of the features of public money, not despite them.

Maxximilian Seijo: That point about the construction of the antagonism between public and private in a vacuum without these other complex variables for thinking about the way we participate with money is so key. So yeah, thanks for the work that you put into opening up this conversation, both theoretically, and then, obviously, also technologically.

Rohan Grey: I think, obviously, none of us are so naive as to think that writing a piece of legislation is the same as making social change, but this is a form of intervention. And I think it’s a show don’t tell kind of model, because we’ve been trying to explain this idea to people for years, but sometimes you just need to really articulate the future. I mean, my wife loves The Dispossessed: An Ambiguous Utopia by Ursula Le Guin. And one of the reasons she loves it so much is just because she’s so good at explaining a whole world and making it actually seem viable, that something so fundamentally different could work. It’s not just once upon a time, there was a wood cutter and you’re like, well, wait a second, does he have healthcare? Does he see his relatives in other places? Is there a train line to the Sleeping Beauty story? But if you tell a story with enough detail, suddenly, that imagination can become real. So something like this bill is a way of saying get over that imaginative hump. This can happen. It’s a viable future. We just have to choose it.

Maxximilian Seijo: Not to go too far down a digression about The Dispossessed, but I read it again recently. And for fans, I was taken by Anarres, one of the more utopian planets. In the book, there’s so much, I guess you could call it, money in that utopian space in a way that I think is counterintuitive to people. But it’s because it’s money in a different way than we understand money operating in our world. So yeah, I like that you brought that up. It’s a great example.

William Saas: For sure. So I’m looking at the fact sheet that folks can also look at, I presume. And I’m seeing some great stuff here. We’re talking about the possibilities of something like this for achieving something maybe not utopia, but a more just order. So we have on this list of the features of ECASH, legal tender, which we’ve talked about, financial inclusion, and an emphasis on prioritizing technologies that promote universal access and usability, especially for folks with disabilities, low income individuals, and communities with limited access to internet or telecom networks. Privacy, we’ve talked a lot about that. Consumer protection, some regulatory details, and then some transparency and oversight functions. I don’t see anything here about fighting inflation or winning the war with Ukraine. So I’m joking, but at the same time, this is the context that we’re entering into.

Rohan Grey: Yeah, I think the first thing is that, in terms of the actual spending on the bill, we’re going to be talking about, maybe in the wildest dreams, a few 100 million dollars for these pilots and things. I mean, it’s a rounding error when it comes to actual real resource costs. What we’re going to be having and subsidizing like 15 computer programmers and a couple of computer manufacturers. But on the Ukraine question, I think it’s a really interesting moment, because there is this duality or tension with how people are understanding the role of things like crypto and financial sanctions right now. Because, on one hand, it’s nice to know that we don’t have to start nuking Russia to impose some warfare on them. If we have to go to war with someone, God forbid, the idea that we’re doing that with these soft financial means, rather than literally destroying the planet, seems like at some level a kind of relief. But on the other hand, what are economic sanctions? Every progressive has known for years, they’re painful, they hurt the most vulnerable, they don’t necessarily work, etc.

So, on one hand, it’s like, well, thank God, we’re not sending in shock troops. On the other hand, it’s financial warfare forever. That’s a terrible, bleak future as well. And then, conversely, people are saying, isn’t it amazing that people are supporting the people of Ukraine with cryptocurrency. So suddenly, the ability to subvert financial sanctions is also a good thing right now. We like financial sanctions against Russia, but we don’t really. And then, we like evading financial constraints with crypto, but we also don’t really like crypto. So it’s a very weird moment where I think the public is having to deal with a lot of ambiguous conflicting feelings. And that’s a productive space to be in because it problematizes a lot of these very morally clean binaries between criminals and average people, or the cops and the robbers and this kind of stuff. The reality is that there are bad uses of cash and there are good uses of cash. And there are downsides to having political freedom and there are good sides.

But if you think about it like a pen and paper, pen and paper in the wrong hands can be extremely dangerous. And in the right hands, it can be extremely liberatory. I think the question is, do we want to start from a world where we assume that access to a pen and paper can be controlled by somebody else? Maybe that’s not actually a question we want to ask ourselves, because how do we want to control people’s access to pen and paper gets us in a very dangerous headspace. So I think the Ukraine moment is at least going to be a more interesting context for having this conversation than the traditional four horsemen of the apocalypse, of the internet, that everybody loves to talk about, which is money laundering, terrorism, child pornography, and drugs. So if people think of censorship resistant money, and they immediately go to political dissidents, that’s probably a better starting point than what would have happened before all of this.

William Saas: Did I just hear you say that the ECASH Act might help to highlight and resolve the contradictions of late, imperial capitalism?

Rohan Grey: Well, yeah, maybe heighten. I’m not sure about resolving, but it certainly brings them into relief. And I think, just like with climate, it takes a climate apocalypse being literally on the doorstep for people to start thinking what a better world might look like at scale. I think the idea that we’re standing on the doorstep of a totalitarian surveillance dystopia with our digital money gives us a bit of space to imagine just what we really need and what’s really important for a future monetary system. And it’s this idea that we’ve actually been losing the war on cash for a while, I’d say since the 70s. It’s been a slow drip, drip, drip, war of attrition, that they’ve been winning. And I’m not happy that we seem to be on the precipice of building a surveillance panopticon that’s going to be the future of everything. But it’s also at least not drip, drip, dripping all the way to extinction.

And I don’t think I consider myself an accelerationist in general, but I think it’s one of these moments where, I didn’t choose accelerationism, it’s been chosen for us. And this is the kind of moment we get to deal with that. But after the last decade of watching how people’s thoughts changed after the global financial crisis, how the debate around crypto changed the debate around FinTech, how the debate around stable coins got changed by Libra, and now how the debate around privacy may be changed by this, I think there is a sense in which these antagonistic trends can open up space for new vectors for political organizing, consciousness building, and things like that. I think whatever else is gonna come out of this, a lot of journalists, a lot of commentators, and a lot of people thinking about digital currency, are now going to know that there’s another battlefront to fight here.

Maxximilian Seijo: Well, Rohan, thanks again for coming on Money on the Left. And I’m sure we’ll have you back on sometime for some other thing that you’re working on. Because you’re certainly working on a lot of things.

William Saas: Well, hopefully, we’ll talk about this, right? It’s a live thing.

Rohan Grey: Yeah, we’ll talk about the pilots and how they’re running, etc.

Maximilian Seijo: But yeah, thanks so much. And for listeners, we’ll have links to everything that we’ve discussed in the description.

William Saas: And listen to Rohan on the upcoming Odd Lots episode.


Rohan Grey: Thanks a lot, guys. It’s always a pleasure. Take it easy.

Medium Femme – 4 – Food Publics (with Max Sussman)

Hosts Charlotte Tavan (@moltopopulare) and Naty T. Smith (@orangeasm) talk food with chef Max Sussman (@maxsussman) in episode 4 of Medium Femme, from the Money on the Left Editorial Collective (@moneyontheleft).

The discussion touches on the political openings and challenges in the pandemic food industry, ranging from labor to small business politics to  federal aid to restaurants and the public, mutual aid, the GND and more. Hosts and guest explore food as narrative in cookbooks, literature and film and TV, touching on the politics of liberal food. Examination of internationalism in food culture, history of migrant food riots and food for refugees. And finally, pizza!

Follow Max on Instagram at @pizzareplicator and @thesussmans.

Support our Patreon:  www.patreon.com/MoLsuperstructure

Superstructure 31 – Non Eugenic Media Practice (ft. Beatrice Adler-Bolton)

Beatrice Adler-Bolton (@realLandsEnd) of the Death Panel podcast joins cohosts Will Beaman (@agoingaccount), Natalie Smith (@orangeasm) & Maxximilian Seijo (@MaxSeijo) to discuss a recent article about pandemic politics published by Adler-Bolton and her cohost Artie Vierkant in The New Inquiry. Titled “The Beyblade Strategy” or: How We Learned to Stop Worrying and Love Focused Protection,” the essay uncovers eugenic ideas and assumptions embedded in mainstream liberal responses to COVID-19. Fleshing out Adler-Bolton and Vierkant’s claims, this episode advances a non eugenic media practice that stakes a claim for the social rights of the medically vulnerable in the name of fully inclusive public provisioning. 

Read “The Beyblade Strategy” or: How We Learned to Stop Worrying and Love Focused Protection” here: https://thenewinquiry.com/blog/the-beyblade-strategy-or-how-we-learned-to-stop-worrying-and-love-focused-protection/

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

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

Euphoria: A Textural Analysis

Modern Movie Theory (MMT) continues with cohosts Will Beaman and Maxximilian Seijo offering a sustained reading of the HBO series Euphoria, situating its congregational themes within wider histories of subversive queer media and scholarship.

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

Music:
“Amore Mio Aiutami (Main Theme)” by Piero Piccioni from the EUPHORIA Season 2 Episode 7 Soundtrack

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

Adorno, Lazarsfeld and the Birth of Public Broadcasting with Josh Shepperd

Josh Shepperd joins Money on the Left to discuss the research and activism that hastened the rise of public media in the United States. Assistant Professor of media studies at the University of Colorado-Boulder, Shepperd shows how public-interest broadcasting platforms like NPR and PBS exist in the U.S. today in large part as a consequence of hard-fought battles by committed scholars and advocates throughout the inter- and post-war periods. In particular, Shepperd traces the untold aftermath of the Communications Act of 1934 which, in addition to creating the Federal Communications Commission, gave overwhelming legal support to private for-profit networks, while stripping radio licenses from public and educational broadcasters committed to serving the common good. 

Deepening this narrative, Shepperd draws special attention to the Princeton Radio Research Project, spearheaded by noted sociologist and communication studies scholar Paul Lazarsfeld. Through the Project, Lazarsfeld developed influential quantitative research methods that fundamentally shaped the discipline of communication studies. Fascinatingly, however, Lazarsfeld hired then-immigré critical theorist Theodor Adorno to assist in the research program. As Shepperd tells it, Lazardfeld welcomed and even incorporated the critical theorist’s incisive contributions into the Project. Yet, Adorno ultimately repudiated the Project’s efforts to build a robust U.S. public radio system, unfortunately divorcing the developing tradition of Critical Theory from the domain of public media research and advocacy. 

Fast-forwarding to the present, we ask Shepperd about his argument that contemporary humanities research ought to be politically constructive. We then conclude by exploring his important archival work for the Radio Preservation Task Force at the Library of Congress.

See here for Shepperd’s article, “Theodor Adorno, Paul Lazarsfeld, and the Public Interest Mandate of Early Communications Research, 1935–1941,” published by the journal Communication Theory in August 2021.Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Music by Nahneen Kula: www.nahneenkula.com

Transcript

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

William Saas: Josh Shepperd, welcome to Money on the Left.

Josh Shepperd: Thank you for having me.

William Saas: So to kick things off, we would like to invite you to tell our listeners and us a little bit about your personal and professional background, especially as it relates to your current work on public media.

Josh Shepperd: So I’ve got a background in continental philosophy. And I never was able to shake the ideas and the different kinds of idealisms that philosophers carry into their assessments of ethics, aesthetics, and other approaches. So when it comes to research in media studies, or film and media studies, I really tend to focus on how people frame the why of what they’re doing, not just the case example that’s at hand. I tend to listen more to the precursory investment of why the phenomenon is being studied. So when it comes to public media and studying a topic like that, there are two factors. The first is that public media is a mission statement based industry. It doesn’t follow from logics of accumulation like the private and commercial industries do. It pulls from certain concepts of social amelioration about equal access to education and cultural uplift, and sometimes that’s very paternalistic or patriarchal along the way. But there’s an ideal there that they’re trying to realize through media as opposed to creating a kind of mechanism that is both profitable and can predict what content audiences won’t respond to so that they can continue to produce content, which is the basics of commercial industries.

So the second factor is, with those investments in mind, I ended up at the University of Wisconsin for grad school, and they had the National Association of Educational Broadcasters archives there, or NAEB. And NAEB built NPR and PBS. But no one had ever actually written the history, going back to the onset of educational media, that traced where non-commercial logics came from in media production, and how it went through a series of concessions and shifts and evolving concepts to reach public media between the 1920s and late 1960s. So I really just sat in the archive for a very long time in grad school, and even went back after grad school, to look at the personal letters. And the beauty of that was that educators are bureaucrats. They saved every single piece of paper. So as a historian, I had kind of the opposite problem of what other historians have where they have to travel intrepidly around the world to find that one smoking gun document. I instead had literally millions and millions of pages to work through over about 10 years leading to the book that I have coming out, hopefully next year. So yeah, there’s just been a huge amount of trying to trace the concept of why we have a non-commercial system, why people really believed in it and gave their careers to it over multiple generations, and then what the actual machinations were of building that system from scratch without advertising income, or to do it from a nonprofit perspective.

Maxximilian Seijo: So jumping into what you’ve already sort of described as the stakes and scope of your project, you’ve communicated to us and argue that political economic research should be applied in ways that not only clarify, but change institutional practices, and that for you, humanities scholarship has important roles to play in such efforts. Could you situate this claim and perhaps flesh out this argument for our audience with maybe some reference to some of the broader scope and stakes of your project that you’ve already started wading into?

Josh Shepperd: So one thing I’d like to say about political economy in particular is that the tradition of political economy of media turns out to have been a policy strategy of non-commercial media in the 1930s and 40s. It’s a methodology that was developed to solve a problem. So I’ll sketch that out a little bit and then say a couple more words about it. So essentially what happened was, and this is part of the paper I recently published on Adorno, is that the FCC and the Office of Education began to work together for the first time after the Communications Act of 1934, which as Robert McChesney has very famously written–and other colleagues, Victor Pickard, Nelson Perlman, and other scholars have addressed it–it privatized the American system, but to such an extent that it was impossible to build any non-commercial, sustainable entities within the post-1934 Communications Act environment. Okay, so usually the history ends there.

What I have found in the archives is, from 1934 to roughly at least the late 1950s, the media reform movement, as it’s been called in our field, began to organize in a decentralized, parallel way by which multiple sectors were working for the same goal, but perhaps in the ways that they deemed suitable to their specific sector. In other words, philanthropic groups started to fund research around these topics. The government began to create clearinghouses and mandate different kinds of research projects in concert with the government. Our intrepid grassroots, local broadcasters began to develop best practices that would differentiate commercial broadcasting from educational broadcasting at the time, while at the same time taking the best practices cues from commercial broadcasting for what audiences seem to like. Then, out of that, they had to make a case, the non-commercial broadcasting side, for why there should be special frequency allocations for non-commercial media when it was not profitable, when it was not well supported by universities at that point, and when it was not even clear what the effects were of education on classroom audiences, on students in classrooms listening to the radio for education.

So what happens is they end up bringing over the director of talks of the BBC, a guy named Charles Siepmann, who becomes a kind of a mentor to a generation of NAEB broadcasters. And one of those people in the process was Dallas Smythe. With a guy named Dallas Smythe, they wrote something called the “Blue Book” for the FCC in the mid 1940s. This has been published about by Victor Pickard. He has a very excellent piece. In that “Blue Book,” there’s a suggestion for the relationship between public good, even public defense, and non-commercial broadcasting that’s not in the hands of private interests. Dallas Smythe is Canadian. He went back to Canada eventually, but he helped build the very first communications program ever, which is the Illinois School with Wilbur Schramm and others. He also did a huge amount of work for the FCC and NAEB to make an argument for why media serves as a kind of a public good that requires attention to path dependencies, sociological path dependencies, and institutional and policy decision making. This is the foundation of political economic research in media studies.

So Dallas Smythe is often credited, then the Illinois School researchers that followed him, who were super excellent for many decades, and were conducting essentially a moral, sociological assessment of the effects of commercial media on broader democratic discourses, and in the process, pulling from traditions like Marxism. Political economy is usually a Marxist term, but in this case, I would say this is more of a post-Deweyian, American, and pro-capitalist, but anti-monopoly viewpoint. So we should be clear about where political economy came from, which I would say is a liberal, mildly left tradition when it began. Then, it actually moved further left and then began to disappear in our field at the same time. But the key point here is that political economic research began as an empirical solution to a policy problem to address non-commercial media allocations within the government. This engendered a series of types of reports that became a mechanism of communications research itself over time.

So in terms of the practice of political economy, when I learned this through the archives and just through the personal letters of the founders of the tradition, one thing that really struck me is that political economic research can’t merely be critical. Political economic research is not merely a critical piece that we’ve written for a metrics-based evaluative journal. It’s actually a mode of practice that attempts to adjust how institutions and policies work. One of the things that I love about non-commercial media history is that it’s one of the histories in the 20th century that did change policy. It actually changed the Communications Act and the commercial broadcasting structure into something that at least designated a role for non-commercial media. And there’s a lot to say about that. But when I enter into a political economic approach to research, I think about my public role with different policy and institutional structures beyond my assessment of what the archives tell me or something like that.

So I was very fortunate to be placed in DC for my first job at Catholic University of America back in 2013 or so. And I was invited right away, as many people in DC are who move there, to join a research project with the Library of Congress. And we realized that radio was basically not preserved whatsoever. So the Radio Preservation Task Force is the name of the project at the Library of Congress. We realized, “Okay, we have an opportunity here to actually work with the path dependency of a specific institution, and one with a huge amount of international weight.” We’ve been studying these principles, my friends and I, for all this time on the project. What could we do with this that would be a public facing political economic project with some influence of Gramsci and cultural studies–we could talk about that later–but within the logic of the institution so that it sustains itself? What we realized was that there was already a film preservation plan.

There was a recording preservation plan that was new, but that radio was probably the most untapped primary source archive maybe in the world. It had not been preserved. There was over a million hours of material. And it was a non-theatrical modality. People think of like Jack Benny for the radio. They think of the great theater of radio. I love these things, of course. But most of radio is community organizing, talk shows, sports talk, and so what you actually end up having are these primary sources of people who may not be in the paper trail describing their perspectives about events as they’re happening in real time. So we realized pretty quickly, within the first year, that what we had was a potential political economic project from memory studies, which is to diversify the archive through sound history where paper trails ended with alterity experience. But of course, to do that, you have to go through all these steps. You can’t just say, here’s an archive, let’s preserve it. There turns out to be dozens of steps, huge numbers of personalities, policies, state claims, copyright, there needs to be applications, grant writing, and then we need implementation in the classroom.

So we just started building this political economic project. We ended up with about 300 professors after the second year on the project to just account for this and it still wasn’t enough. It still has been a very difficult project to facilitate. But so, in other words, the political economic research in the archive for all those years influenced my willingness to really dive into, with an opportunity at hand, the institutional decision making processes, and see how we could interject specific kinds of moral, ethical, or structural changes to the machinations of how the institutions work. And we’re still going. I think we’re the longest lasting–I don’t want to be too bombastic about it–media research project in Library of Congress history. I can’t find an equivalent at the US National Archives. So it’s all built around the precedent that we are working together in a horizontalized way to diversify the archive through sound. So the project is really more of a media studies and political economic project that learns the institution to get something else done, which is to make our curriculum better and more diverse when it comes to studying media history. So that’s part of the political economic story here.

I have this conviction that the work that we’re doing in media studies comes from two places. The first is a mission statement that we should be invested in non-commercial media. And I’m mostly alone in the belief that that is a crucial mission statement for media studies. But the second, I think, is super fascinating, and I hope will resonate over time, which is that media studies was founded as a system building approach. We used to build things in our discipline. Our discipline came from people who built an entire alternate media system. And, at some point, we just sort of turned to critique and we stopped building things. So that’s super fascinating to me. I’d say, what we’re doing at the task force, is one tiny fraction of the division of what was accomplished in the Cold War era. But at the same time, I do think there’s something there that could be recaptured.

Scott Ferguson: That’s beautiful. It’s such a really helpful and comprehensive summary and situating of your work. I was wondering, for our next question, if we can focus a little bit and pick up something that you mentioned in your response, which is that Communications Act of 1934. You and your work show this really looms large in both the history of public media activism and in the rise of communication studies. And in your published writing so far, you’ve begun to lay out the significance of the 1934 Act in an article titled, “The Political Economic Structure of Early Media Reform Before and After the Communications Act of 1934.” Maybe you can walk us through some of the details of that Act and what it did? I mean, you’ve already kind of addressed this. But I wonder if you can say, in more particularity, why this Act is so important and what did it end up doing?

Josh Shepperd: So, I mentioned him already. There’s a really important book that I admire by Robert McChesney about the foundation of, essentially, the media system in the US. And again, it has a huge amount of attention in the early 90s for its comprehensive archival research, but also its political economic framing of where essentially we went wrong, or where the paradise was lost in the American system, and why we don’t have a BBC like system, or at least why our public system isn’t as robust as it should or could be. So this is kind of the word for the field. Like people look to this work and a few other foundational works from like Susan Douglas and Michele Hilmes, who was my mentor at Wisconsin. And these are really excellent books that are the foundation of my work. But his book ends with 1934 with the loss for educators, which is completely accurate. And politically, I agree with what he takes away from this history. But if you go one year later, the same people that are in his book begin building public broadcasting right away.

So what happens is this 1934 Act is, from what I can tell, the watershed moment, good or bad, for American media. What you have is this moment in which some of the rhetoric of Coolidge and Hoover about public interest, convenience, and necessity as the grounds for station allocation rules–so who gets to have a station and broadcast–becomes ossified into policy in 1934. That’s essentially what McChesney’s book looks at. And I agree with him completely that this notion that station ownership should be dictated on the question of interest instead of service, this is a big distinction he makes, is like this break, it’s almost like this epistemic break in what was possible during the New Deal. So all the consequent decisions that are made during the New Deal by the FCC follow from the senatorial rules that were passed that essentially equate to technical mastery and technocratic understanding of measurement of audiences and the broadcast range and all that stuff are the single grounds by which American systems can be created. This gave a huge advantage to advertising based media who could have just constant income coming in with vaudeville and Tin Pan Alley performers. And I love that stuff by the way. I love the performances on early radio.

But at the same time, it’s like, why don’t we have that other system? So what happens is the Communications Act becomes the grounds by which, I argue, future advocacy is also shaped. And one way that I do that in the article is, and I’ll just give a little spiel about it, McChesney covers two groups in his book and shows how there were two fundamental responses to an inevitable retraction of opportunity for educational media. There’s the National Committee on Education by Radio, the NCER, that was funded by something called the Payne Fund out of Ohio and was connected to the National Education Association. Then, there was the NACRE, or National Advisory Council on Radio in Education, which was really just a single person. It was a guy named Levering Tyson. And he was appointed by the Carnegie Corporation and the Office of Education commissioner pre-New Deal to investigate opportunities for different modalities of broadcasting practice to work together for a common goal of education.

So what happens is, and I love this in McChesney’s book, he points to the NCER as kind of like the Bolsheviks pushing against the system, and then the NACRE as the Mensheviks passive with the system. He creates this like super lefty dynamic between the different institutions and how that kind of complacence led to the Act itself. So the fact that there was not unified resistance to the oncoming changes in policy. But if you look at the same exact people, and they all left all their papers, like thousands and thousands of pages, personal letters, not just reports, but letters about these things. I had to go work on research in Cleveland, Ohio, which is its own problem. I spent all this time in the Payne Fund papers, and the same people after the Communications Act completely changed their methodologies and their strategies for how they approach the question.

So the NCER says, “Okay, we tried to, during the hearings for the Communications Act, state a reason that there should be a certain amount of frequency set aside.” This is usually referred to as the Wagner-Hatfield Act. It’s 15% of the reallocation, and argued sometimes as much as 25%. That was denied completely; it was just rejected outright. Then, by 1935, they’re saying, “Well, why don’t we just build a non-commercial media system.” So the same people who were built as these lobbyists and resisters to the system actually become practitioners within like two years, and they built something called the Rocky Mountain Radio Counsel out, not where I am now in the Denver area, but up in Wyoming. And they call it public broadcasting. So they actually invented the term. And this had never been discovered. I discovered this by accident in these papers. This is where the term came from originally.

It’s from this guy named A.G. Crane, who became president of the University of Wyoming and who was chair of the NCER after the Communications Act. He says we can’t just allow and wait for other people to do this work for us. We have to build a decentralized system based around philanthropic funds–the Rockefeller Foundation in this case. And from there, we will do shortwave or program transcription, which is a recorded program distribution of non-commercial media to classrooms. And, you know, dang it if they didn’t get it done, at least until about 1940. Then, one of the guys they have running the project named, Robert Hudson, goes on to help build the Illinois School with Dallas Smythe and Wilbur Schramm, the first communications school, about seven years after that. So there’s a few takeaways from these pieces.

When we are faced with failure on the Left, where do strategic changes get implemented that do change path dependencies of policy and institutional decision making? It’s a highly problematic case study. We’re talking about a bunch of white guys here. And we’re talking about people at universities. There is a huge amount of privilege with these things. But it reveals something about the policy itself without assuming that it’s like the same thing as a kind of rights advocacy. It’s still like a lefty political economic advocacy to increase equal access to education, which is a pretty important thing, I think, at that time, especially. So I’m really interested in these moments in which there’s a pivot within a strategic advocacy by which the rules change internally to the discursivity of the group itself. And what different decisions are made about the practices and then what worked and what didn’t. So I go very tediously and procedurally through how that worked within that piece.

Then, the NACRE guy, Levering Tyson, ends up being placed on something called the Federal Radio Education Committee, FREC, which was founded by the FCC and Office of Education in 1936. Because, it turns out, we should be clear that the FCC was formed by the Act. It didn’t precede the Act to make these decisions. So the new FCC members were like, “Why aren’t universities and school districts able to broadcast?” So right away the FCC is like trying to help build during the New Deal some kind of educational system. So they built this committee. And the committee becomes the funding line and becomes the precedent for all of the model of non-commercial media’s underwriting. We call it underwriting instead of sponsorship. And that’s the Rockefeller Foundation and Carnegie Commission. So yeah, the NACRE guy ends up on FREC. He becomes the chair of a committee that just wants to research what works with audiences or not in terms of broadcasts. It wasn’t actually successfully educational when it was broadcasting. Anyway, that becomes the Princeton Radio Research Project. And that is the foundation of all communication studies in the world. It’s Paul Lazarsfeld, it’s Frank Stanton from CBS, it’s Herta Herzog, who helped build survey group research and was Lazarsfeld’s wife, it’s Hadley Cantril who was a social psychologist who did propaganda for the government later. 

But what happens is, in this process, the same people that are in McChesney’s book end up building communications studies, research, or at least underwriting its origins, and building the first model for non-commercial media that’s networked, that’s not one of the commercial station forms of networking. So that’s what that piece is kind of about. It’s like we have got to keep working on these things. Where is the institutional change or development by which something becomes sustainable? This is what I think we’re missing on the Left a lot. It’s like, where is the durability of the belief? It’s always going to be in something outside of oneself. Like when we’re gone, we leave our projects, we pass away, or something like that. What is that thing that we did that survives in the practices of others? I think that that’s where institutions become both the problem and, not the solution, but at least the strategy.

William Saas: It’s such an amazing and essential history. And I think we’re all nodding our heads just going, “Yeah,” to everything that you just said about institutions and institution building and the promises and perils of doing that. And the need to look to history for some guidance. I think one of the things that, and this is not a question so much as it is a comment and a riff, but the discovery of the first use of public broadcasting and the development of a public broadcasting network, it seems to me like, “Okay, that’s great.” And we like that that institution was built, but it was because it was philanthropically funded. It was precarious from the jump, or private in a sense, from the jump. I guess what I’m trying to say is, you listen to public radio today, and it is lousy with like Kaiser Family Foundation and all these sorts of sponsorships. And you start to start to wonder, is this public broadcasting? How does it work? I don’t know, maybe this is just a throwaway, your research is cool and thought provoking comment. I don’t know if you have any thoughts on the sort of inherent problems with public broadcasting being grounded in philanthropic endeavors from the beginning?

Josh Shepperd: Yeah, I think this is one of those great Raymond Williams points about what are the limits and pressures that are exerted like hegemonically over institutional decision making and the determinants that have to be followed within like the homological structure of how discursivity works, or something like that, within cultural studies. I think this is something that’s been thought through really importantly, critically, and appropriately. So yeah, I think public media has always been a series of concessions to maintain a vision of the mission statement. So I think what you see over time is that, within our system, in a US capitalist system without a huge amount of earmarked money, there’s very sparse money compared to other public systems, you end up with the Koch brothers like underwriting NOVA. You end up with, in my experience working with public media and history stuff, a huge amount of worry about, if we do the right thing, what kind of damage will come back at us? So why don’t we occupy some kind of soft middle that sort of winks at political economic questions, but is actually more of a middle of the road centrist service.

And yeah, when you go back to the origins, and you look at the philanthropic funding as a solution, the goal was, of course, some kind of earmarked money, which has never happened, honestly, to this day in the way that it should have or could have. And then, the philanthropic system ends up exerting certain limits and pressures on the way that broadcasts would unfold. I can give you like one or two quick anecdotes. So first, with empirical research of audiences, the Rockefeller Foundation wanted proof that educational broadcasting was, in fact, educational. And this leads to decisions on the part of early experimenters about how to frame what they’re doing for income. So a certain kind of logical positivist intervention begins to occur in the framing of the institutional logics.

Now, this is true in commercial media, too, because they like to break down audiences into sub-demographics, and do predicative work about who they think will watch and when. This doesn’t seem to have been necessarily part of where non-commercial media went, because it’s supposed to serve every audience, including small audiences. So it’s a legitimate question to see like, well, where is the audience going with this? Are they listening? Are they paying attention? Do they understand? Are they actually learning? Can it be tested? And then there’s another side, which is, does everything have to be substantiated in terms of a content production within previous tropes that have worked in commercial media and could be quantified as opposed to qualified. So I think that’s one point. I agree with you, in the early parts of it, immediately, there were effects upon the approaches.

Now, I’m a very qualitative, humanistic researcher, but I’m not against my mass communications peers at all. Like there’s sometimes some strife there. There’s a lot of questions that get answered with good quantitative research. I learn a lot by reading it and stuff, too. But is that the normative investment of how to understand an audience, which is the quantification of the subject as listener? So I think that’s one thing to consider. I have never written about that. But I think about it sometimes. And yeah, is it a mode of privatization? Another comment that I think is a very good comment. Does it become a mode of privatization to have an alternative funding model that is philanthropic? One thing about a third party that is itself a nonprofit institution is that the kinds of pressures that it exerts tend to be in remittance of funds, and then future reporting, less than day to day operations. Whereas in commercial media, there’s a huge amount of influence over what can even be on screen. So it’s a softer form of power, but it does exert some power.

William Saas: Well, just as a quick follow up on that, I’m still thinking through and really energized by your provocation that the Left needs to think about taking up these building projects again and how your work has, in a fell swoop, challenged the foundational narrative in McChesney’s work, or at least extended it, and says, “Hey that’s not the end of the story.” And then, the next year you discover public broadcasting was a phrase or a term coined as a sort of compromise in response to the limits and pressures, but baked into that, it’s not what you think it is, and it never has been. So let’s think about it and what it could be, which I really appreciate.

Josh Shepperd: Yeah my investments are in the concepts more than like just following and supporting what every practice has been. And then, just also on the McChesney note, I would call it like a mild or supportive revisionism of his work, because I do agree in principle with his politics on these questions.

Maxximilian Seijo: Perhaps shifting gears a little bit and, especially, as someone who’s done some work on Siegfried Kracauer, I found your recently published article in the journal Communication Theory really interesting, particularly where you sort of hone in on a understudied chapter of the story, which is the relationship between Paul Lazarsfeld and Theodore Adorno. So for those who don’t know, for his work with the Federal Radio Education Committee, Lazarsfeld of the Princeton Radio Research Project did hire Adorno “not only to develop techniques to inform educational music study,” as you explain, “but to strategically formulate advocacy language for the media reform movement to help non-commercial media obtain frequency licenses.” What circumstances occasion this historic convergence between these two, we could say, maybe, intellectual titans of communication studies and critical theory? What have we overlooked about Lazarsfeld and Adorno’s relationship, and perhaps could you also say what lessons we can draw by reflecting critically on this moment today?

Josh Shepperd: Yeah, thank you for that. So I have a few things going on with that article, I think. One is the revisionist history. Where did communication studies come from and what are its commitments? And why does it have certain commitments? My answer to that is that it’s not just a matter of answering a question, which it does really well. It originally came from this public ameliorative mission statement. So communication studies, I would argue, is at least in part a consequence of media reform advocacy, which I think has not really been written about in the field. I think that to understand communication studies, it wasn’t just that they were able to create a more efficient model of understanding audiences, which became public policy research, which is all true. It is a functional approach to social science research. And in that functionality, it answers questions designated to it by either an institution or a social process.

Communication research is fundamentally different from the humanities in that way. Humanities tends to begin with concepts, existential experiences, storytelling, myth, there’s all kinds of ways that the humanities pull from a source if it’s problematic or not. Communication studies is a 20th century American phenomenon that attempted to answer technocratic questions within the constraints set for it by the institutions that underwrote early research. So that’s kind of what that piece is about. But what I found, of course, along the way, is that we have this discipline that doesn’t know where it came from. We’re probably the only discipline that has not traced its own history fully. And there’s really good work being done by Jeff Pooley, David Park, Peter Simonsson, who’s here at Colorado and the history of communication division at ICA, the International Communication Association. So my work stands on their shoulders. I think that because they were doing this work, I was able to begin this kind of work. So what I would say about the origins of communication studies and Adorno’s role is that Adorno is always taken for granted as someone who was brought to the United States as some kind of brilliant thinker. Of course, they wanted to bring him, but in fact, he was trying to escape Germany at the time.

He was brought here for a reason, which was that, mired within their attempts to develop reproducible models of audience analysis at the Princeton Radio Research Project in 1936 and 1937, they discovered that they had no way to translate the consequent assumed neutrality of quantitative results back into the policy language that the FCC was looking for to allocate the frequency assignments. So they said, “Well, we should bring somebody who has a different methodology,” Lazarsfeld says this in one of his letters, “that is a parallel analysis to this quantitative functional approach that we are implementing.” So Adorno gets brought to the US by really the founder of communication studies, Paul Lazarsfeld, to work on this problem of persuading the FCC to create 15%, 10%, or whatever allocations for non-commercial media. It hedged under his expertise, which is musical analysis, or analysis of musical syllabi, and these kinds of things. This has made it to Martin Jay’s work and David Jenemann’s books–these are really good books. But what everyone had seemed to have missed was the backdrop of the invitation and what that meant or what that revealed.

So what that article does, at Communication Theory, is it goes back to the start of where the mandate for the project even came from, it works into the questions they were assigned to research within it, which points to the functionalism of communications research itself. They weren’t trying to answer some major, Weberian question about how different social structures work. They were trying to answer how to get around the Communications Act and the limitations of that. Then, they begin to conduct research specifically to address the problem of educational audiences to report back to the Office of Education and the FCC. In the process, they bring on Frank Stanton. Frank Stanton becomes president of CBS not too long afterwards. He’s very young and just graduated from Ohio State in educational psychology. He and Lazarsfeld have this moment, and it’s just a remarkable, historically important moment in which they figure out how to triangulate audience responses across expanded models of demography.

So one thing they did before those two is they would get all this data and they would say, “Here are five categories. Where do you fit in these categories?” And Stanton, Lazarsfeld, along with Herta Herzog, were able to figure out that you could ask people what categories they would associate themselves with, and then create broader and broader demographic categories. And from there, they were able to triangulate that with people who would answer in similar ways across geographic spaces of separation. So in other words, that person who believes the same thing in New Jersey as they believe in Nebraska, or something like that. What they realize is that it’s not geographically defined in terms of how one understands oneself. There are actually these modalities of discursivity that people associate with culturally, which parallels critical theory in this understanding at that moment, as they’re both developing, that actually define embodiment. So, in other words, Lazarsfeld and Stanton are able to successfully triangulate responses across geographic spaces for the first time in ways that are reproducible by different researchers. If different researchers all conduct the same kind of work, they can get the same answers.

So this was the gold. This is the foundation of modern sociology in some ways, too. And they’re super excited about this. It kind of blows their mind a little bit that they discovered it themselves. So that’s where Adorno comes in, like, “Well, how do we get this back to keeping this along the social ameliorative questions?” That’s where Adorno comes in. But their work is so profoundly impactful within its first year that they basically abandon the educational question, first of all, and they go all in. Rockefeller loves it, the government loves it, the advertisers love it, the network’s love it, and the commercial networks love it. Immediately, it becomes research and development for all media and public policy. By the early 1940s, it becomes propaganda research for the OWI. It literally changes how all institutions work, like almost immediately. Adorno is brought in, he says, “You’re quantifying audiences. You’re separating the questions from the context in which they’re asked. You’re turning agents into subjects. It’s a form of subjection. And this work cannot stand in support of media reform.” So they’re like, “What are you talking about? This is like the biggest discovery of social sciences of this decade. Everyone loves it.” And he puts his foot down on this so they fire him.

So within like a year or year and a half, Adorno was famously kicked off of this project. But what I love about what he’s kicked off about, is that it’s a fundamental disagreement over what embodiment means. It’s an ethical distinction that they’re making between each other about what counts in terms of recognition. Can you be quantified into a category? Or do you need to be described thoroughly. But then, of course, the twist of that is that Adorno abandons media reform altogether. And the quantitative guys stick with it. So the irony is that the equal access to education question mobilizes the creation of an entire academic discipline in the 1930s, and then the critical theorist abandons that completely and just continues to write brilliant, critical work, in my opinion. But you have this paradox that happens at the end of that moment that I try to account for in the article, by which part of what we have is the Left’s abdication of its role within the development of an alternative model of media.

So I just can’t believe that part of the history. And I have a lot of respect for Lazarsfeld and the mass communications guys in their ability to get right to the point in research. I kind of wish that we had that additional moment in which critical theory became the early foundational form of communications research. We almost had critical theory as the founding qualitative approach of communications and media studies. But we didn’t. And who did they bring in? I mentioned him earlier: Charles Siepmann. Political economy, in its empirical approach to analysis of audiences, but from a production standpoint and an ethical standpoint, actually better matches what they’re doing with that project. So with the invention of political economy in media studies, there was actually a reaction against critical theory in the late 1930s. And in my opinion, it has done a really good job for the field of political economy. It’s not like we should have had critical theory, but we almost had critical theory. We ended up with an empirical form of critical analysis that was not quite as far left, I think, as Adorno was on these questions.

Scott Ferguson: This is just such a fascinating story that feels really revelatory. And I’m particularly preoccupied with this split. You’ve suggested that your sympathies go both ways. But there’s also kind of a tragedy at the heart of it, that the kind of really nuanced, sophisticated approach of Adorno and critical theory is cleaved from the institution building, commitment to public reform and public world building, which as you suggest, Adorno would be right on this, was quickly sold out and became an arm of propaganda in all these complicated ways.

Josh Shepperd: Like immediately.

Scott Ferguson: I guess our conceptual and political commitment in our project and on our podcast and beyond is to bring these two impulses together. That we can be really smart and nuanced critics of the system and its history as it has developed, at the same time as we can keep our commitment to imagining new positive futures that basically don’t capitulate the future to mere critique, essentially. I don’t know if you share that way of framing it or if you have your own way of framing it. Do you care to comment on that?

Josh Shepperd: One thing I like about Lazarsfeld, personally, is when you go through his letters, he was, besides being encyclopedic and really just intellectually cutting and able to fulfill the mandate that he was given by the government and Rockefeller Foundation, he really was trying to play with empirical methodology and Adorno’s ideas. Like there’s all these letters about how he was trying to implement what Adorno was telling him in spite of them arguing. And one point that I make in that piece is that, I would give it like a 5% influence on what becomes the two step flow model in understanding the context of audiences, not just response or demographic quantification of audiences. And of course, Lazarsfeld then goes on and works with Elihu Katz, who recently passed and was just a giant of our field, and Merton and others. And they do kind of begin to streamline the capacity for this method to understand context. And what this becomes is, and Dallas Smythe writes about this very famously, the prediction model within research and development. Almost the entire commercial industry is predicated on predicting behaviors that haven’t happened yet. And they do that now through micro analytics. Before that, it was niche broadcasts, and before that, it was lowest common denominator, least objectionable programming, and mass produced programming like westerns.

But they’ve always been trying to create content based upon this formulation of data that comes from Lazarsfeld to be psychic about what people’s behavior will be. It’s a behaviorist approach. And I think that’s super fascinating. To think that a little piece of it actually might come from Adorno, in that they started to pay attention to context as much as mere affiliation along the way, that’s how Lazarsfeld interpreted it. There was really no stopping that tsunami once it began because it was so effective for every media and education institution along the way. It was to be able to understand the audiences, minimize chance, and minimize gambling for the amount of money that they put into a program development. So it maximizes profit, it reaches audiences as something that they already would like and know in advance. So I’m just super fascinated by that part of this too. The ability for mass communication to do research that predicts audiences comes at least a little bit from Adorno and his forcing their hand to pay attention to context as a determining factor in decision making.

Scott Ferguson: He’s rolling in his grave.

Maxximilian Seijo: One aspect of this that fascinates me, and it relates to someone who you brought up earlier in this discussion, Victor Pickard, who we’ve interviewed on this podcast, so for listeners, you can check back to get some of this genealogy, is the question–especially as we hover within this Adorno-Lazarsfeld complicated split, but also, as you’re suggesting, influence–is the question of the public funding of media. And I think, in a more general sense, Pickard is offering a new model through his history for thinking about the way we publicly fund media structures and media infrastructures in the US and beyond. To me, what I find interesting about a part of this split, and you framed it in a lot of ways as a methodological point. And I think that’s really crucial. But I guess, because we’re Money on the Left, I wanted to just raise the question of the money that sits at the heart of these structures and how maybe Adorno would think about the determinisms of money as what we would call capital in his critical and theoretical structure versus a more public funding, we could bring up MMT here, model for thinking about building futures and institutions. To me, there seems to be a tension that perhaps rhymes with this methodological split that you’re describing on that point as well, whether it’s explicitly articulated or not. I figured I’d raise it to see if you had any thoughts about it.

Josh Shepperd: Yeah, so I like Victor’s new book. I’m not a journalism historian. I’m not a journalist. So I want to be clear that I can’t give a sufficient answer for how it shall be funded. However, at the same time, I think that this notion, and Victor calls from these similar histories in his work, that there are alternative models that we not only have imagined, but have been implemented over time, and that it does not have to be a logic of accumulation when other logics are already present and successful within modes of production and divisions labor. And that not trying them is a decision to not try them. This is actually resembling an issue of political will. It’s an ideological problem, not an institutional problem, because we have the means and we have the history. We know how it works and what doesn’t work. So when he talks about alternative modes of funding that are government-based or public sector-based and these types of things, once you end up with something like the Sam Zell model of maximizing profit and limiting journalist freedom to do investigative reporting or something, it incentivizes different things like clickbait forms of journalism, glibber forms of reproduction of the AP story over and over again. There’s all kinds of problems with the relationship between how a funding model creates or engenders consequent content.

So in that way, I completely agree with him that if we have a funding model that doesn’t interject itself into media ethics within a journalism process, then this would probably be one model that’s worth pursuing to see how it might be better or not. At the same time, I’ve worked with a lot of people in the public sector since 2015. And I want to be gentle about this, but we can’t over idealize who the people actually are in that sector. There’s a lot of parallels between the private sector and public sector in the same ways that the academy talks about itself in a meritocratic way, but in fact, is a pretty toxic and exploitative environment for a lot of people. So we have to also be careful that the concept doesn’t automatically translate into the best practices. But I say this without any knowledge of how journalism works. I’m not an employee of journalism or some kind of expert. So I want to be very careful here to not overstep in that way. But in terms of what Victor’s talking about, with having these alternatives at hand, and then choosing to not follow them, I think that’s a great contribution.

Scott Ferguson: Yeah, I think there’s another part of this that Maxx is trying to get at that I don’t know if you have any comments on. There’s a commitment that is coming through Marxism and is being arguably amplified in Adorno’s work and related contributions to critical theory that numbers, that quantified abstraction, is seemingly intrinsically alienating, and violent to particularity and to material reality in its history unfolding over time. It seems like the methodological split between the communication quantifiers versus Adorno’s qualitative approach–it’s so funny, I never use this language, because I’m fully qualitative. I never say the expression “qualitative research.” But anyway, I am a qualitative researcher, who, in our theoretical commitments, while we learn so much from Adorno and critical theory, we feel strongly that the reduction of quantification or the reduction of counting or accounting to a kind of flat alienation is part of the blind spot of critical theory. And again, not to say that we endorse certain kinds of narrow and positivistic social scientific methods of quantification either. But when we’re trying to politicize money as a public good, part of that is politicizing public accounting and accountability. So I think that’s another part of this kind of methodological question that Maxx is trying to get at that maybe you can get into.

Josh Shepperd: So where are the commitments in the applications? I think one issue with public sphere theory is that it assumes a certain kind of instrumentalized behavior that didn’t take into account the actual life worlds, as Habermas says, that were at hand. So you get these correctives from Nancy Fraser and Michael Warner, and we also could reframe the public not as a mode of deliberation but as a site of violence or humiliation. This is also true for different types of publics historically. But at the same time, if we go too far away from publics, I usually think of that as concessionary politics, by which we just leave it for the Right to make all the decisions. So it’s almost like a way of saying, “Well, I don’t believe in publics, and I’m going to let the Right make all the decisions for everyone else.” The way I kind of track it with the work, and you could probably extrapolate this from what I’ve been saying, is, “Okay, we don’t need a capital P public. But we do need public services.” So instead of a capital P public, it’s a capital PS or something.

So like we should be all in on underwriting journalism, public media, public parks, public education, and public health. These are crucial instrumentalizing forces within how people understand the relations to others. And they achieve certain kinds of, honestly, just moral visions for how interaction can go, that call from everything from liberation theology to Marxism. I mean, there’s even religious dimensions to these kinds of responsibilities that we imagine. I say that as someone who’s very secular, but I’ve been around people who have quite eloquently articulated even better models of brotherhood, sisterhood, or personhood, and all these kinds of relationships when I was at Catholic University in DC. And I’m not even Catholic. But I really enjoyed listening to liberation theologists talk about what a better society would look like. Not just like, we should have it, but here’s what it takes. This kind of stuff. So yeah, I think that these are great questions, and that if we can get away from a concept of a public that frames people within the model as opposed to examining the bottom up relations of people and what they need, and then building systems around those needs, I think that that’s one good way to approach a concept of publics.

William Saas: I’m trying to think of the best way to articulate this question. I wanted to kind of return to your work with the Radio Preservation Task Force. We’re talking now on a podcast that’s being distributed through a private hosting service and people are downloading it through private infrastructures of the internet. And we’re hoping to, I think, serve a broader public educational purpose, but ultimately, we are funding this through various forms of crowdfunding and our own jobs. It’s part of my job now and I think it’s part of Scott’s, but it hasn’t always been. So thinking about podcasting as a public, a broad platform, and trying to imagine where it fits, podcasting as a medium, form, or technology, how do you understand it fitting or not within the ambit of the Radio Preservation Task Force? And also along those lines, if you are aware of any promising trajectories for public funding for things like podcasting, because it seems to me that there’s so many Left projects in podcasting, but there is a correspondingly vanishingly small, maybe non-existent exploration of how to do this other than through things like Patreon, crowdfunding, and the familiar technologies. I don’t know how to put it other than crowdfunding platforms like Patreon. So what’s the place of podcasting in the history of radio preservation and are you concerned with that? I actually read with some students last week some work from your mentor, Michele Hilmes, in the Savings New Sounds anthology about podcast preservation. But yeah, podcasting in the history of the medium, and is there any concern in the task force for that? And then, if you have any ideas or are aware of any proposals for a more public form for podcasting?

Josh Shepperd: Yeah, so podcasting in the task force. I do see podcasting as a kind of natural progression out of radio. It does have its own preservation head at the Library of Congress already just for podcasting. And as you mentioned, there’s been some work around the task force that actually came out of the task force for podcasting preservation out of University of Wisconsin, which are by Jeremy Morris and Eric Hoyt  and that came out of our first conference, which was in 2016. I feel like the thing about podcasting is that it is not appointment listening. I think that that’s really crucial these days. You can just listen whenever. You don’t have to tune in at a certain time. You can create a podcast for the smallest possible audience, which actually meets the public media mandates that goes back to the 1930s. This imagination that it doesn’t matter, you don’t need the biggest audience because you don’t have to get advertising dollars. The reason we want bigger and bigger audiences isn’t just to get bigger audiences. It’s because that’s what pays. That’s part of that model for commercial media.

Podcasting also provides an artistic space to do variations of radio flows. Radio flows are predicated on the model of interruptions. There’s a commercial in between and the entire content is built around those interruptions. Raymond Williams, who I mentioned earlier, has written about this with TV that comes out of radio. So it’s really positive in that way. And the relationship between the task force and podcasting is very positive. A lot of our colleagues kind of work on both. I have a very good friend Andrew Bottomley at SUNY Oneonta who wrote a book about podcasting that’s fabulous. The task force is mentioned in the book I just mentioned by Morris and Hoyt. And what we’re all trying to do is say, and this isn’t exactly something I work on directly, but my colleagues are working on it, “Well, what about stuff that’s happening now that hits the ephemera of the ether?” So we’re worried about where radio history went, we’re worried about what materials are available, are degrading or decaying, and what we’ll lose of historical memory. But what about stuff that’s happening now? Can we preserve it now so it doesn’t happen to that, to the podcasts. So I really love that project. It’s a NEH funded project called PodcastRE. I wrote a letter for that, for the grant when it went up.

And what they’re doing is two things. They’re creating the metadata that explains what’s on the content, which is something we don’t have for radio. And people don’t even understand how crucial that is for searchability and for funding for later. And second, they are cataloging it when they can, just the materials. And these guys are brilliant at Wisconsin, because they’re also doing preservation of journals with the Media History Digital Library there too. So they have all these different preservation of media history initiatives happening simultaneously. It’s a great service to the field. But fundamentally, podcasting is the contemporary, non-appointment remediation of radio structures. So it still carries a radio structure of interview, performance, breaks, music, and segues. It is still aesthetically radio in most ways. But it is something new at the same time. And there’s a certain amount of creativity to it that I don’t think we’ve seen since like Musique Concrète out of France with Pierre Schaeffer and Pierre Henry. You get these artists and Stockhausen who played with radio. But podcasting does it almost more pragmatically, and innovates at the same time, so there’s these aesthetic shifts and engagements while it’s still resembling something that is more accessible and fills time with listening. So yeah, I love the work that my colleagues are doing. I’m more of an early media historian, obviously, an early media preservationist, but yeah, there’s absolutely correlation.

Maxximilian Seijo: One thing I wanted to make sure we covered before we closed was your article co-authored with Shawn VanCour, “Radio Preservation and the Orphan Agenda,” where you historicize and theorize your own work with the Radio Preservation Task Force that you’ve brought up quite a bit in this interview. You make this point, and I would like you to explain this for our audience, why, essentially, on your reading, sound preservation is politically meaningful, in a sense that goes beyond mere antiquarian interest. So this interest just in the antiquity of these media forms. And could you explain what you mean by that?

Josh Shepperd: Yeah, thank you for that question. This actually gets to the heart of what it means to put humanists who are trained in philosophy, because Shawn had a philosophy background too, on a logistical project. So one thing that we think about all the time is we really should attend to the memory studies components of the task force. Our goal is to expand and diversify the historical record through sound that takes a certain number of political economic steps to get there, that humanists don’t typically understand, but we had to learn along the way. And then, what is the outcome? Okay, it’s new syllabi, a new curriculum. But then something else kind of happens there. And I pull from people like Stuart Hall on these things, or even like Alain Badiou I like a lot on these kinds of questions about how fidelity to truth procedures unfold. And by that, I mean that when new information about historical events is introduced into some kind of circulation of discursive reception, there’s a selectivity process that takes place by which a discourse will say why I like that part of the information and not that part, or I’ve been waiting for this part to consolidate this conceptual belief in why I’m affiliated with this discursivity.

And in the process, if the right kind of information is introduced in the right discursivity at the right moment, there’s a retroactive actuation of the concept of continuity about how we got to a certain place. Which is to say, when you introduce new historical events into the historical record, sometimes, and you can’t predict with who or when, it changes how memory understands what already happened, which is part of the mobilization of the Left in my opinion. Part of the mobilization of the Left isn’t just changing how things work or decrying it after it already happened, which is what happens too often, in my opinion. We’re always a step behind. It’s changing the concept of where we came from and how we got to where we are so that it meets the criteria of the ethos of the movement. So one thing that history does, when it’s done really well, and I’ll point to something that I think is excellent like the 1619 project or something, when you redefine the contours of a continuity, it is actually fodder for mobilization and for grassroots organization. So that’s why we’re really deeply invested in civil rights histories.

I’m working right now with a radio program called This Way Out. It is the longest running LGBTQ community organizing program ever. It’s been around for 30 years. They have 1800 hours of recordings, and we’re going to get that canonized at the Library of Congress. That’s one of our projects for this year with the task force, getting This Way Out into the recorded sound reading room for research as something that’s accessible there. So yeah, these kinds of histories are important because the omissions that we have in the record are also erasers of possibilities. So it is our responsibility, I think, as humanists to saturate the circulatory apparatuses of media with as much new information that overturns biases that we can. And that doesn’t just mean saying something is a bias or resisting something. It means giving voice to the different experiences that have not previously been recognized within those circulating apparatuses. So that’s kind of what we’re getting at in that article there. You might be one of the few people that pick up on that element in the article. But there is a humanistic investment in the project for us that also has to do with our political commitments.

William Saas: That’s an excellent place to leave it, I think. Josh Shepperd, thank you so much for joining us on Money on the Left.

Josh Shepperd: Thank you for having me.

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

The Unfathomable Cruelty of Biden’s Latest Afghanistan Executive Order

By Mitch Green

Originally published to Substack

Biden has decided to steal raid $7 billion of Da Afghanistan Bank reserves currently frozen by US financial institutions. The motivation for this guileless heist is two fold:

  1. Set aside $3.5 billion for humanitarian aid in Afghanistan
  2. Make available $3.5 billion for claimants in ongoing 9/11 survivor’s lawsuits

The grotesqueness of this Executive Order has layers that I’d like to unpack. I’m tempted to use the Matryoshka Doll as a metaphor here, but the layers of horror are not cleanly nested so much as they are woven in and out of the policy situation. Let’s examine some of them in turn.

Horror #1: Raiding Da Afghanistan Bank’s reserves undermines the entire Afghan economy

Despite the title, Executive Order on Protecting Certain Property of Da Afghanistan Bank for the Benefit of the People of Afghanistan, dispossessing the central bank of these reserves is a direct threat to Afghan welfare. As Dr. Shah Mohammad Mehrabi, economist and former central banker for Afghanistan explains, freezing these reserves has undermined the payments system in Afghanistan as well as the very ability for the central bank to fulfill its institutional obligations of providing liquidity and price stability.

Effects of Freezing Foreign Exchange Reserves

Billington: The main subject that you have been dealing with, as have we, is that the U.S. Federal Reserve and several European banks have $9.5 billion in reserves which belong to the Afghan Central Bank. This money does not belong to the banks that are holding it, but it’s being frozen for political reasons and disagreements with the new government in Kabul, which makes it essentially a form of illegal economic warfare. Could you describe the impact of this on the people of Afghanistan and what actions you have taken to attempt to free these funds?
Dr. Mehrabi: Here is an important point about freezing Afghan foreign exchange reserves. It has contributed to economic instability which I predicted back in September. I predicted a number of things would occur, and they have all come into being, because now there is data to substantiate what I had already predicted in September. At that time, I predicted the currency would depreciate—it has depreciated by more than 14% since August. I also predicted that food prices would increase to double digits—and double digit has occurred. The Price of wheat has gone up by more than 20%, flour has gone up by over 30%, cooking oil has gone up by 60%, and gasoline has gone up by 74%. 
In the banking sector, I also said at that time that it needs liquidity, and to bring liquidity, it is very important that the reserves must be released, I said, to stabilize prices and to prevent a further collapse of the afghani, which is the national currency. 
The 14% currency depreciation hits mostly consumer purchasing power. It puts people in a position where they cannot buy the basic necessities of life. Also, the asset prices of all these goods have gone up.
 Also, I said that imports would decline, and that has occurred. There was a reduction in demand for these imported goods, and consumption has declined significantly because people have no access to their own money in the bank. On the top of that, they don’t have jobs. Many lost their jobs; they did not earn any income and then higher prices further suppressed the demand for buying goods and services.
So that’s what you see: hunger and starvation has come into being.

I have emphasized key parts of the transcript above to drive home the effects of removing significant sums of reserves from the central bank’s toolkit. This interview was recorded last December, before Biden decided to loot these funds, thereby permanently removing them from play. So, it follows that the conditions will only deteriorate further. Hunger and starvation has come into being, but not spontaneously. No, this was caused by the policy of freezing those assets and the new move threatens to turn the screws further.

Whither the women and children?

Last summer when the withdrawal was underway, most narratives went something like this: “Sure, the war was long and costly, but we told the woman and children of Afghanistan we had their backs. Now we’re leaving them to die.” The implication was that to withdraw was to abandon them, and so if we want to honor that promise we need to stay in perpetuity. In one sense, there’s some truth to this: the withdrawal did leave a gaping whole of demand in the economy and the desire to kneecap the central bank was not on the table while present in occupation. This fact reveals an aspect of this horror: the threat of permanent occupation as the only means by which vulnerable Afghans, of which woman and children serve as an evocative proxy, can have a meaningful chance at life. Not life and liberty. Just life, partly.

Now, rather than take measures to aid in the viability of the Afghan economy to function, the Biden Administration is decided to harm it further. Again, here is Dr. Mehrabi capturing this hypocrisy.

“We talk about the issue of women and so on—women and children are the first people suffering from this. They are not able to buy goods and services. On the one hand, if we argue, that we want to provide humanitarian aid, but we are going to choke off the economy as well—those are two opposite arguments. The arguments do not really make sense. On the one hand, you say, I want to help with humanitarian aid, but I’m going to choke off the economy so that the ordinary Afghans will not be able to have access to food and basic necessities.”

This hypocrisy should be brought to the fore in any serious policy discussion on Afghan welfare. Modern human practices no longer recommend holding a dog’s snout in their own excrement to show them how they’ve misbehaved, but the jury is still out on how to train The Blob. NB: Dogs are lovable and incapable of cold malice.

But, the Executive Order aims to use half of the loot for humanitarian aid for the benefit of the people. It says so right in the name!

This would be funny were it not so disastrous and misguided. You cannot address the immiseration of Afghans resulting from, in part, the temporary restraint of its central bank, by hobbling it to do a one-shot aid package. This is absurd and anyone advising the President on the economic soundness of this concept should be stripped of their credentials and floated out to sea. $3.5 billion is a tiny number for an aid package appropriate for the need. And anyway, what is of crucial importance is the swift return of the central bank’s ability to manage its banking system, exchange rate and afghani liquidity. That’s the plumbing, folks. Imagine ripping the plumbing out of a thirsty person’s house, then handing them a length of the resultant copper scrap and saying, “Drink up! There’s some water left in this pipe. And you’re welcome ;)” That’s what this is like. Or if you prefer less hyperbole, here again is Dr. Mehrabi:

Belsky: […] The World Bank, as you know, is now planning to restore about $230 million in aid. But even this small amount, they’re saying, has to go through UNICEF and the World Health Organization instead of going through the Afghan banking system. What is your view of this?
Dr. Mehrabi: I don’t know where UNICEF is going to use it, for what purposes. I said that before. Or WHO, and even the World Food Program. If they are for the purpose of purchasing grains and other basic necessities, that is good. But humanitarian aid is not a solution to rekindling the activities of the economy. Humanitarian aid, as I have said all along, while it is necessary, it’s a stop gap measure, it’s not a complete measure to get the economy overall to move to a point where they could get an increase in aggregate demand, which is very essential if the economy is going to function and generate enough revenue for daily economic activity.

Horror #2: Robbing Afghans to compensate 9/11 Survivor Claimants with suits outstanding

I’m not a legal expert and will not opine on the standing or other circumstances of the 9/11 Survivors lawsuits. And this one might make a lot people very angry with me. But, I will say that it’s grotesque political theater to seize reserves of a central bank in one country to use as a basis for paying people in another country under the pretense of compensating them for damages caused by individuals from a third country. Even if you could establish a direct connection to some Afghans for that crime, it would not follow that you should punish an entire society of people who have no causal relationship to the event as a mechanism for making financial restitution to a restricted class of beneficiaries in another society. I leave the legality of the whole proposition to the lawyers, which seems to this lay person rather dubious.

And you don’t need to pilfer the central bank reserves of Afghanistan to make 9/11 Survivors whole! A fact that brings me to the last horror I’d like address.

Horror #3: We see once again the deleterious effects of treating money as a quantum of value that needs to be shuffled around

I know what you’re thinking. And you’re right. I did put MMT into this reaction piece. Here’s why: this Executive Order, top to bottom and side to side, represents the sound money scarcity logics that prevail consensus policy views. It’s right there in the notion that you can seize some treasure to move from the plumbing of the Afghanistan banking system to the “humanitarian aid” sector of the Afghanistan economy. Elsewhere, you have the notion that you can seize some of the treasure and push it across the playing board to third parties who are hoping for payments to originate from the legal – economic apparatus of the US system. And yet you still see it in the foolish notion that you can do any part of this in such a way that sanitizes the operations from hitting Taliban balance sheets. Only a sound finance mind can dream up such a fantasy.

It’s the opposite case that draws this last horror out. The idea that economic endeavors may proceed on their own terms (by envisioning the outcome you want and then legislating for the funds to finance it), in non zero sum fashion, illustrates the needless cruelty, waste and punitive character of this Executive Order. It is volitional to destroy the Afghan financial system. It is volitional to starve Afghans so that you may clear a path for resolution for the 9/11 Survivors. It is grotesque and horrific and will be Biden’s legacy.

Read more from Mitch Green’s Substack

Capitalism Does Not Exist

Maxximilian Seijo and Scott Ferguson join Naty Smith to flesh out a controversial proposition: capitalism does not exist. First broached by Scott in a short piece for Arcade and in the conclusion to his 2018 book, the claim is meant to de-naturalize the underlying logics and casual structures that mediate modern money economies and to resist defeatist leftist analyses that concede the horizon of possibilities to an austere and contradictory profit motive. 

Ballerinas on the Dole with Colleen Hooper

In this episode, we talk with Colleen Hooper (@hoopercolleen), assistant professor of dance at Point Park University. Colleen researches the history of public funding for arts programs in the United States from the New Deal through the post War era. Her 2017 article in the Dance Research Journal, titled “Ballerinas on the Dole: Dance and the Comprehensive Employment Training Act (CETA), 1974-1982,” is the subject of most of our conversation.

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

Conversation originally published on October 8th, 2018.

Transcript

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

Colleen Hooper (@hoopercolleen): Yes, like, there is money to employ artists and to do all these things. But there’s also this pull towards just completely zeroing out this type of thinking. So, I guess I’m just, you know, mentioning that to say I think in this moment of political turmoil it’s important for those of us who care about arts funding to think about how to frame that when so much of our social programming is being threatened.

Billy Saas: You are listening to Money On The Left, the official podcast of the Modern Money Network Humanities Division, or MMN HD. In this episode, we talk with Colleen Hooper, Assistant Professor of Dance at Point Park University. In addition to her choreography and performance work, Colleen researches the history of public funding for arts programs in the United States across both the New Deal and Post-World War II eras. Her 2017 article in the Dance research journal titled “Ballerinas on the Dole: Dance and the Comprehensive Employment Training Act (CETA), 1974-1982,” is a particularly riveting read, and the subject of most of our conversation today. In “Ballerinas on the Dole”, Colleen tracks the development and demise of CETA as a vital funding resource for US dance companies, several of which make a compelling case for understanding dance as a public service. Colleen clarifies in her article, and throughout our conversation, just how vital it is to consider systems and democratic oversight alongside proposals for public employment programs. But slightly differently, the CETA case is emblematic of a somewhat deeper truth. Democratic experimentation is messy, and vital work. Thank you to Colleen for joining us, and thank you to Alex Williams for producing this episode, and to Hillbilly Motobike. Thanks for the theme tune. Colleen Hooper, thank you so much for joining us on Money on the Left.

Colleen Hooper (@hoopercolleen): Thank you so much for having me, I’m excited to be here.

Billy Saas: Well, let’s just start off with asking you to give us a sketch of your background experience as a scholar, performer and teacher.

Colleen Hooper (@hoopercolleen): Sure. So I studied dance and English in undergraduate, and I went to George Washington University and really became interested in dance and politics around that time being in Washington, DC. Then I lived in New York for seven years, and I pursued choreography, performance, teaching, arts administration: I really went at Dance from a lot of different perspectives. And I became interested in dance and community settings at that time as well, because I had the opportunity to perform in site-specific performances and to see a lot of really innovative work that was happening in the city at that time. And then I went to Philadelphia in 2008, and I got my MFA and PhD in Dance at Temple University. And that was another whole experience in terms of thinking about how my aesthetic ideas and my performances and my choreography could intersect with my scholarship. And government. Public funding has always been a big interest of mine. And so studying CETA, the CETA Dance program, was a way to bring together questions that I had about the way funding is structured in this country for the arts, and also to zoom in on this place in time that was really hard for me to imagine that it had existed. So that’s kind of how I got to this point, and now I teach at Point Park University in Pittsburgh. And I teach a combination of Dance History classes, Dance improvisation, and choreography.

Scott Ferguson: So if we could go back a little bit, you talked about how in your experience you found yourself interested not just in dance performance and dance form and research but also public administration and policy and public funding. Could you talk a little bit more about what exactly brought you to that topic? Because it seems to me, and correct me if I’m wrong, that that isn’t the go to topic for, I don’t know, Dance scholarship. That we often think of the arts as belonging to the private sphere.

Colleen Hooper (@hoopercolleen): Right. Well, I think being in Washington DC as a college student influenced me a lot, because I was able to see and understand aspects of government from being in that situation. And it made me curious about how that tied to the broader dance field. And then in New York, I worked at a nonprofit organization called Brooklyn Arts Exchange,  and I did press in marketing for them. And it helped me understand how a mix of both public and private funding came together to support an organization with a specific mission. And I think that I’ve just always been curious about how things work. Like, how does one become a choreographer and maintain a company? Or how does one create an organization with a specific mission focused on the arts? And how does one sustain that? And so I would always be asking those types of questions. And I’d always be curious about tracing the money, basically. And thinking about, you know, where does the money come from? And how does this sustain itself? And what role, if any, does the government have in it? And how much of it is a private endeavor? So I guess, yeah, I’ve always been fascinated by what undergirds these artistic and cultural projects and question the idea of how does that relate to ideas of the public and public service, and what our government can provide and what our government does provide. Or what our government chooses not to be involved in.

Maxx Seijo: So kind of, to those ends, could you trace for our listeners, a kind of brief history of public art provisioning in the United States and highlight where the government has been involved and really taking responsibility for the field of artistic endeavor?

Colleen Hooper (@hoopercolleen): Sure. So during the Great Depression, in 1933, was the first time that the government created something that would aid US citizens. So the unemployment rate at that time was about 25%. And the government created the Federal Emergency Relief Administration during that year. And it was the first nationwide welfare and government work program. It was part of FDR’s New Deal legislation, and Congress passed a broader welfare program in 1935. And this 1935 program included aid for theater workers, artists, musicians and writers. And the whole aim of it was to hire unemployed professionals in their given fields, but artists were specifically categorized as workers for the first time in 1935. And I think something that’s important to mention is that it was this idea of including the arts as part of a democratic culture, and that the arts could be integral to democracy. And that artists were cultural workers who actually contributed to society at large. Despite many accomplishments, the Federal Theater Project and the Federal Dance Theater were shut down due to controversies about the productions, its professional quality, and also some of the political affiliations of its performers, because a lot of them were involved in leftist causes. And that became very controversial kind of near the end of the WPA programs. And basically, Martin dies and J. Parnell Thomas began hearings in August of 1938, for the House Un-American Activities Committee to determine if members of the Federal Theater Project engaged in communist activities. And while the Director of the Federal Theater Project thoroughly defended her program, it was shut down in 1939. So that was the beginning of the funding for the arts from the government. And then a lot of it does continue kind of in this vein connected to communism. There were a lot of US diplomacy initiatives surrounding communism in the late 1940s and early 1950s, which were led by President Dwight Eisenhower, and he established the President’s Emergency Fund for International Affairs in 1954. The purpose of this fund was to increase international appreciation of US culture by exporting it abroad. So in terms of dance, which is my field, the Soviet Union was really known for its dance culture at this time. The Moiseyev of Dance Company had a popular tour of the US in 1958, and the Bolshoi Ballet toward the US in 1959, followed by the Kirov Ballet in 1961. And so this kind of created a sense that the US needed to put some of its own culture forward in order to show what we had to offer. So after a lot of debate about what dance companies should represent the US, the American Ballet Theatre, toured the Soviet Union in 1960. And the New York City Ballet followed in 1962. So this idea that the artist from the United States could show that they were offering a counterpoint to the Soviet Union culture. And it was a way for the United States to show that we had more to offer than consumerism and capitalism that we also had an important culture. And then the next thing that happened with arts funding was the founding of the National Endowment for the Arts in 1965. And this organization sought to support artists financially, so they would be able to pursue aesthetic goals outside of the capitalist marketplace. And for dance, this was a really prolific period, because from 1965 to 1975, the number of dance companies in the United States more than quadrupled. So this was kind of considered a dance boom during this time period. So that brings us up to the 70s. And the National Endowment for the Arts was still being funded at very high levels during that time.

Maxx Seijo: So I’d like to kind of latch on to something you talked about, in the ways in which public funding kind of during the Roosevelt era was predominantly democratic enterprise. And you seem to imply perhaps, that this had to do with kind of the American anti-fascist project of the late 30s and 40s, and I was wondering if you could expand on that, and perhaps illuminate the ways in which we did fund art in the name of American anti-fascism?

Colleen Hooper (@hoopercolleen): Hmm, I think that’s a great question. One thing that’s interesting about the 1930s, and the Works Progress Administration, funding of the arts, is that it revealed some really inherent tensions, which I think continue to be present in government arts funding. And that is the tension between artistic freedom of expression, and being part of any type of pro-government project. And those things are just continually at odds within any government funded artistic project. And we found that in the 1930s, because they put forth this idea that there was a populist intention for the WPA arts programs, and that it wasn’t about artists being solitary geniuses, but about a general movement. And this is a historian, Francis O’Connor. He says, it’s a “sound general movement, which maintains art as a vital functioning part of any cultural scheme,” and I think that that’s really interesting, because it’s a great possibility for art, but then at the same time, it’s very limiting. So basically, if you’re not part of this sound general movement that is supporting a specific idea of democracy and is anti-fascist by nature, then we don’t really have space for you within this movement. But at the same time, the government was very cautious to get into overtly censoring the content of these arts projects. So it’s a very challenging equation, because the government did have certain expectations about what the content of the artwork would be, and how it would support certain democratic principles, but at the same time, they knew that by being overt about those intentions, that that would basically stifle any sense have creativity from the people they were employing. So it just creates a very interesting tension. And I think one of the ways I summed it up best is with the reception of government funds comes the assumption of public benefit. So there’s this idea that the public should benefit when any person is receiving government funding for the arts. But then how you decide whether or not the public is benefiting, I think, becomes a really interesting question.

Scott Ferguson: So can you clarify, perhaps in contrast to a private patronage system that we associate with the arts before this period that you’re outlining, and happening at the same time, how does private patronage for the arts and in private commercial art, perhaps, articulate these tensions in other ways?

Colleen Hooper (@hoopercolleen): I would say that private patronage of the arts allows for private citizens to pursue aesthetic directions that they find to be valuable in some way.

Scott Ferguson: As long as somebody is paying for it, though.

Colleen Hooper (@hoopercolleen): As long as somebody is paying for it, right? Or as long as there’s some money coming in from somewhere to provide, you know, the basic necessities. So it isn’t tied to a larger project of government, necessarily, but it’s tied to a foundation that has certain goals or a philanthropist who has a certain set of interests. It’s not tied to a government project, which I think is the major difference. And yeah, I mean, I think the assumption of public benefit that you see connected to government funded arts projects, is one of the most interesting questions because it’s something that’s challenging to define, like, who decides if it’s benefiting the public and what public is it benefiting?

Billy Saas: So we’ve talked a bit about the Works Progress program. Another government program that develops later in your timeline is the Comprehensive Employment Training Act, or CETA. And you’ve written and researched a lot about this, could you tell us a little bit about what CETA is, where it came from, and how it’s organized?

Colleen Hooper (@hoopercolleen): Sure. So CETA was an Employment Training Act that was passed in 1973. And it was during President Richard Nixon’s administration. And during this time, the unemployment rate had increased from 5% to 9%. From 1974 to 1975, both Democrats and Republicans agreed that there had to be some type of federal action to ease unemployment because that jump was so great. And Gerald Ford significantly expanded CETA and then Jimmy Carter actually encouraged states to employ artists and other cultural workers through CETA from 1977 to 1980. So it was really, by the time it got going, it was like a six year period that provided a tremendous amount of employment in the United States. The cultural workers that I focus on, were approximately 22,000 of the workers. And it’s not necessarily the largest portion, it’s like 3% of the large number of people who were actually employed through CETA, but it made a really large difference in terms of those fields, in terms of the cultural fields.

Scott Ferguson: So at the same time as CETA is being created, funded, implemented, debated, you have a larger conversation going on. And a larger fight going on about the politics of full employment that get concentrated around the Humphrey-Hawkins bill in the 1970s. And I was curious if you could talk about the relationship between CETA and Humphrey-Hawkins, and Humphrey-Hawkins, of course, didn’t stabilize it. It was, you know, constantly being re-articulated and frankly gutted again and again. But what were some of the bigger goals that were being pushed for in terms of public employment, versus CETA, which, to me, reads as a tremendous compromise? 

Colleen Hooper (@hoopercolleen): Mm hmm. Well, I can’t say too much like I would need to look a little more in depth in terms of the exact relationship between CETA and Humphrey-Hawkins. So that’s something I would love to come back to more in depth. But I can tell you a lot about the way CETA was constructed, and how it was structured and how that bared on the way that it was actually enacted, and how it came to its demise. So Nixon designed CETA as a decentralized program with limited federal oversight. And it was something that actually replaced over a dozen programs that were previously part of the Manpower Development and Training Act, and also the Office of Economic Opportunity. So Nixon cut back on all of these Labor Department programs, and the federal government did not oversee the CETA mandates. Initially, CETA was supposed to have extensive federal oversight, but basically that federal budget allocation was eliminated when it became enacted. It became a very open program: local officials were really able to do what they wanted with the CETA funding that they received. And it had very lenient standards for employment. Local officials liked this because they were able to do what they wanted with the money. But there were some real structural issues in terms of accountability and being able to speak to how the program was becoming effective because there wasn’t any oversight. So the Department of Labor really only had basic information about the CETA projects after their completion. Like they knew what category they went into, but they weren’t able to really evaluate what they were doing. The federal government offered technical assistance, but no meaningful supervision. So with CETA, we had a combination of decentralization: so the money went out to prime sponsors all over the country, over 450 of them, there was a lack of accountability. And because of the leniency of the program, there was a lot of political favoritism. And it led to CETA spending controversies. So the way in which it was constructed, I would say, was basically constructed to fail. And there’s just a quotation I’d like to share, which is historian Bruce Schulman, explained that Nixon, “did not attack liberal programs or agencies and the political networks that undergirded them. Rather, he subtly, cunningly undermined them. Nixon wanted to destroy the liberal establishment by stripping it of his bases of support, and its sources of funds.” So I just think that’s an important way to look at it, because I think that’s exactly what he did with CETA. He set up the structure in such a way that it couldn’t become a sustainable, successful program for full employment.

Billy Saas: Seems like a really good opportunity to kind of, you know, learn from how a public program rolls out, but then also a good reminder to be, you know, mindful of who’s proposing it, and to what ends, was there any indication at the time? I mean, I know that the historian, looking back, says this is what was happening, but was there resistance at the time and people looking at what Nixon was doing and saying “look, we see what you’re doing here?”

Colleen Hooper (@hoopercolleen): Yes, there definitely was. In terms of the entrance standards for CETA, Democrats wanted strict standards to make sure that people who were poor benefited the most. But Republicans fought for more lenient standards. And in the end, that was part of the compromise is that the standards were quite lenient, and the money could be made available to people who had in some cases only been unemployed for a matter of weeks. So that was part of the compromise. But you definitely saw the Democrats wanting to be stricter in terms of who received the funding and Republicans wanting it to be a more open process where each of the prime sponsors would have the maximum amount of flexibility in terms of how they allocated the money.

Maxx Seijo: Given this sort of compromise between Democrats and the Republicans, it’s worth asking explicitly, I think what perhaps is implied here is, so what was the role in CETA for arts, if there was any?

Colleen Hooper (@hoopercolleen): There was not any intended role for the arts in CETA. That was not part of the program. So that’s a big difference between the CETA program and the 1930s WPA arts programs, wherein the arts were part of it, and it was, you know, from the beginning, there was an infrastructure to support the 1930s programs. So art was not intended to be part of CETA at all. And basically, the way that it happened is that local administrators were able to categorize artists and performers among workers, and to say that they should also be receiving benefits because they were also people who are contributing to our country. And they did this by framing the arts as public service. The person who created the first proposal for the arts in CETA was John Kreidler, and he did this in San Francisco. And he had a really unusual background because he had worked at the Office of Management and Budget in the United States Capitol. So he had knowledge about CETA prior to it becoming law from his time there. But he had also studied the WPA during graduate school. So he knew a lot about the arts programs during the 1930s. So he took his technical knowledge, his ability to work with census figures and understand the Office of Management and Budgets reports, and he combined it with his knowledge of the WPA. And he was the one that really brought this idea of artists in CETA, and had it pass in San Francisco. That was the first program. And then it kind of spread all across the country. From his first proposal in 1974 through 1980, it went from a proposal for 24 artists, to employing 10s of 1000s of artists.

Scott Ferguson: Can you give us an idea about the range of different arts that were practiced under CETA, and then maybe we can use this as a transition to focusing on dance, which is your specific area of expertise and an interest?

Colleen Hooper (@hoopercolleen): Sure, well, the range of artists that were supported during CETA is quite broad, and honestly, it’s difficult to even grasp. There are some reports that talk about the different types of arts that took place in all the different states. But there is no one archive that really shows the full breadth of the CETA program because of its decentralized structure. That being said, My research has focused primarily on the New York City CETA arts project, because there is an archive for that, and I was able to survey the entire archive, and it was also the largest arts program in the country. I’ve also written about CETA arts programs in Philadelphia, and I’ve interviewed people from CETA arts programs across the country. But the way in which these programs were not organized makes it impossible to actually understand the breadth of what took place. That being said, there were visual artists, theater artists, dance artists, puppetry, oral history. And among the generation who was employed in the CETA arts projects, it’s literally a continually unfolding story about different institutions that exist to this day that were given a start or given some type of monetary or administrative support from CETA. So it’s something that it’s quite exciting, but it’s also something that’s quite overwhelming in the sense that it just branches out in all these different directions, and it’s actually impossible to know everything that took place during that time.

Maxx Seijo: So throughout your work, you focus on the history of Dance during these programs. And I was wondering if you could kind of give an overview for our listeners, what Dance looked like under CETA, and specifically, how Dance was shaped by CETA, and how the dance aesthetics were shaped by public funding?

Colleen Hooper (@hoopercolleen): Right? That’s a great question. Two of the most important trends at that time, in both the Dance field and also in the arts, in general, were culturally diverse arts programming, and also expanding regional arts centers. So it was a time that many arts organizations that are well established today were founded during the 60s and 70s. And it was creating a much broader sense of what art could be. And I think that’s also the case in terms of Dance. Like beginning in the 1960s, African Americans, Latinas, and women were gaining more mainstream attention for their cultural contributions. And so this was also part of the Black Arts Movement, which is mostly defined as the decade from 1964 to 1974. And, basically, this time period was a time for art really broadening and reaching into areas that had not been necessarily considered a place for art in the past. Prior to this time period, it was more about taking art that was created in major metropolitan centers, and exporting it in some ways to regional places. But with Dance, and with the visual arts, this was a time of kind of broad democratization of the arts. In terms of Dance, I mean, I would say, I could speak best on the New York City CETA arts program. And it was very much tied to what was going on and experimental dance during that time in New York City and people who are receiving funding. So they were people who were considered to be important in terms of their aesthetic contribution, but the dancers were also evaluated in terms of what type of public service contribution they could give. And people were assigned, depending on what their skills were like, they may be assigned to do a performance outdoors at Union Square, or they might be assigned to do a performance with children in a school, or they might be assigned to teach dance to children at a school, working with people who are handicapped. So there was really a broad range of what the dancers did. But the thing that the New York City dance program had in common is that these dancers were considered to have very aesthetically innovative approaches to Dance. And they also had the skills to perform Dance as public service in some capacity.

Maxx Seijo: So interesting, because that, you know, reminds me of what we were talking about earlier with the tension that you say is at the heart of public funding of arts programs. And it seems like in this case, the public funding actually kind of made dance aesthetics and arts generally kind of more capacious than perhaps it was before. And I’m wondering if you think that runs, in contrast to perhaps the quote that you mentioned from the historian before, who argued that public funding was perhaps binding of creativity?

Colleen Hooper (@hoopercolleen): Hmm. Yeah, I mean, I think that CETA definitely did help people reimagine what the arts could be. I also think that, as I argue in the article that we referenced, that the program tended to benefit the artists more so than the public, and that it’s really tricky to figure out what type of arts benefit the people who are receiving it without asking them. You know, like it was really set up in a way where it says: okay, well, this panel of experts has decided that these artists are meritorious in some way. So we’ve selected to support them. And now we’re going to have them go out and perform and give service to the public to places that don’t necessarily have access to the arts. Right away, we have an issue, because people do have artistic practices in their own communities. So it’s becoming this sense of cultural export that was not necessarily valuing the artistic expressions that were already taking place in communities. And I think that’s one of the aspects of CETA that failed in terms of public service. But I do agree with your statement that it did broaden the definition of what Dance could be. And as I stated in my article, Martha Bowers talked about how performing a dance in a men’s prison made her realize, oh, this type of dance, I don’t think this type of dance belongs in this setting. And there are reasons for it. And it made her really question what type of dance she was doing, and why she was doing it and for whom she was doing it. So I think that by placing artists in places that they would not have normally performed outside of the proscenium stage, CETA did really create a lot of growth for the artists themselves. And I guess I just keep coming back to this question of, it’s hard to say, what benefits the public because there is no one monolithic public. And we can’t necessarily ask the people who were on the other end of these programs, you know, that’s not necessarily an option at this point in history. So I guess I’ll say I do think that CETA expanded the notion of what Dance can be, and it also exposed some of the limitations of exporting a cultural form to different places in the assumption that it offers public benefit.

Scott Ferguson: There’s also the question of what counts as success and what counts as public benefit?

Colleen Hooper (@hoopercolleen): Right. 

Scott Ferguson: Because even failure, or contradiction or tension, or bringing the arts, whether they were comfortably in a kind of New York, hip experimental scene, and then brought into a public prison context. And the sort of problems and tensions that unfolded, one could make the argument, as I think you in a certain way do in your article, that there’s something at least minimally, socially and politically and aesthetically interesting about that, if not beneficial, from what it teaches us. 

Colleen Hooper (@hoopercolleen): Hmm, I definitely agree. And I think that there’s a lot to be learned from that process. But it always makes me want to go back to those initial questions we discussed at the beginning of the podcast, where we think about, where’s the money coming from? Who’s receiving the money? And what is the money supporting? What is the money valuing? And so I guess my question with it is, what types of art are receiving money and being valued as contributions to society? And what types of art are being seen as amateur or folk art or less important in some way? And that’s something that I keep returning to because I also talked about an article that Janice Ross wrote where she discussed how now there still is a good amount of dance in prisons, but it’s often the prisoners themselves who are participating in the process. It’s not about them, necessarily being audience members who are receiving cultural edification, but they’re actual participants within the process. And that’s the trend that’s been more prevalent currently in that type of situation. But I do think that there is value to what happened during CETA, and I just think it’s important to think about who is receiving the support from the government and who is viewed as needing edification.

Scott Ferguson: Absolutely.

Billy Saas: This is bringing to mind something at a talk that was given at the Money on the Left conference in April, a conversation between performance artists, Harriet Gillies and Rohan Grey, and I recall correctly, Harriet was suggesting that one of the advantages of like a public arts program would be to help educate and develop aesthetic sensibilities in audiences in terms of, you know, educating folks on how to receive and appreciate and engage with art. I wonder if there were any kind of conversations or ideas around that circling CETA?

Colleen Hooper (@hoopercolleen): Definitely, there definitely were. And it was this idea that the arts were usually reserved for certain class of people, and that now we’re bringing the arts to everyone. And there were some aspects of that that were really quite moving, like looking through the archives and seeing pictures drawn by children who enjoyed the dance performances that took place at their schools or reading letters from seniors who had the opportunity to take a pottery class and really enjoyed it. So there were these really interesting glimpses of the type of impact that this program made. And it also provided a seed for many organizations that continued after CETA ended. So you know, local arts organizations really got their start with that CETA of money, and then they were able to find support and other places after the program ended. So there are definitely a lot of things that happened during CETA that have continued to contribute a lot to communities all over the country. And this idea of art appreciation, aesthetic appreciation, it also, I think, sometimes can lean into bringing dominant Western ideals about aesthetics, to people who have other ideals and other aesthetics. And I think that that’s something that I want to always be careful about, and also be very inquisitive about because I think that from our 2018 point of view, we understand that bringing dominant Western artistic esthetics into communities that don’t currently value them is really problematic.

Scott Ferguson: Absolutely. And I was wondering if you could take a more detailed and deeper dive, as you do in your article into an example of this kind of imposition, right? And the limits of public arts funding that you had referenced earlier, maybe perhaps in relationship to prison performances?

Colleen Hooper (@hoopercolleen): Yeah, so in my article, I talked about a number of performers who performed at the Arthur Kill Correctional Institution on Staten Island. And basically, that certain performances seemed really well received and exciting, according to both the dancers, and according to the prison newsletter, which I was able to view in the archives, and they talked about how wonderful the Rachel Lampard and dancers company was and how much they related to it. And then they brought another dance group in a few months later, and the reaction was more mixed. And it was just such an interesting practice, because I was able to speak to a number of people who performed in the prison and get their perspectives, I was not able to speak to any of the audience members who watched, but I was able to piece together a sense of what could be known and what could be unknown, in terms of a public performance in that type of setting. And the thing that was fascinating to me is that, you know, 40 years after this performance took place, several of the dancers I spoke to brought it up as something that really impacted them because it was so different than what they were accustomed to in a Western theatrical stage presentation. They received so much feedback from the audience, and a tap dancing group, which was comprised of Jane Goldberg, and Charles “Cookie” Cook was really well received. Whereas, a dance that was performed by Mitchell Rose and Martha Bowers had a more mixed reception, we’ll say, and that was like a moment for Martha because they were performing something that was kind of dry, tongue in cheek humor relationship between a man and a woman. And, at one point, she does a somersault in the dance and her underwear was exposed. It was like, you know, dance underwear. So it was supposed to happen, it wasn’t a mistake, but the audience just reacted so much. And she just thought, what am I doing? Like, this is not a dance to be doing in a men’s prison. Like, they’re just seeing me as a woman who just exposed my underwear, and she just realized there was a huge disconnect between something that on a New York City stage in the theater district would be seen as cheeky and tongue in cheek, you know, humor, and being in a men’s prison, and that there was really a huge gap between those two spaces. And then that was something that she really considered and it influenced the direction in which she took her career. And she’s been involved in many different programs in Red Hook Brooklyn, over the past decades, first with Dance Theater, etc. And now she works with youth in the community in a lot of other ways. And it really was a career changing moment for her because I think she realized that a dance does not have any meaning that is not tied to this broader sense of place and audience.

Maxx Seijo: So fascinating. I can’t help but thinking as we’re discussing this, what’s so interesting about the way you’re posing questions, and we’re pondering the question of public funding and public value, is that the question is never, right, “Can we afford to employ artists?”, it’s just, it’s about what we want to get done with the employment that we can always already afford. And I think the way that you’re framing that and that we’re discussing is just so useful to actually get to the core of the question of public arts and how we should be appropriating money to public betterment.

Colleen Hooper (@hoopercolleen): Right, I think that’s a great point, because we’re also sitting here in a moment where the past two budget years, our current President Donald Trump, proposed to completely eliminate the National Endowment for the Arts and the National Endowment for the Humanities. And these budgets that he’s issued are, as we know, they’re mostly political documents. But it also gives us a sense of his vision for the arts in our current moment, and his administration’s vision. And I mean, thankfully, in the 2018 budget, bipartisan support led to both the NEA and the National Endowment for the Humanities receiving very modest increases in funding, and they did stay open for this past year. Those increases did not keep pace with inflation. But they, you know, were small increases nonetheless. But then again, the same thing happened for the 2019 budget. He also proposed that we completely eliminate these organizations. And right now, we’re just awaiting appropriations. So I don’t think that these organizations are necessarily going to be eliminated this year. But it is two years in a row that that has been what is proposed, and that different members of Congress have stepped forward and talked about things like the veterans who are being assisted through the National Endowment for the Arts and how every single state in the Union receives benefit from these programs because they do enact a lot on the local level. They’re not just secluded in metropolitan centers, as was once the way in terms of funding. So I guess I’m just saying all that to say that, that’s the historical moment we’re living in.

Billy Saas: So one of the really great things about your research is that it helps us get a sense for how it came to be in the first place that we had just the NEA and NEH as the primary outlets for public funding of arts and humanities work in scholarship, could you tell us how it came to be that this CETA program was shut down and why it was shut down?

Colleen Hooper (@hoopercolleen): So the CETA program was the last labor program that created public service employment jobs for US citizens. And I think that’s really important to note, because even though we’ve had other types of interventions like this was full time employment, full benefits provided by the government, to citizens, because there was an acknowledgement that the economy was not creating the jobs that were needed, due to various factors. And when CETA was coming to a close, there’s a New York representative named Ted Weiss, who proposed a new program called the Federal Artist Program bill. And he basically wanted to create a public-private partnership where different types of companies either for-profit or non-profit companies would employ an artist. And at first, the government would pay the majority of the artist’s salary. And then as the years went by, the government would pay less, and the for-profit or non-profit would pay more, until it got to the point that the artist was just employed by this outside organization. Now, this bill did not come to vote. So it never came to fruition. It didn’t see the floor. But these ideas about how the arts could be leveraged in different ways became part of the National Endowment for the Arts Challenge Grant program in the 1980s. And so this was a way of the National Endowment for the Arts putting some money forward for the arts, and then whatever organization received that money would have to find matching funds elsewhere. So it was this idea of leveraging government funding to get additional funding for different programs. So I mean, the reason why CETA ended is that it was really structurally impossible to evaluate CETA’s success or failure. And Carter, actually, President Carter increased CETA’s funding in 1977. But because the administrative structure was so decentralized, they could not effectively manage this expansion. They just had so much more money to employ so many more people, but without the actual structure to do that effectively. And so by the time the federal government re-centralized the jurisdiction over CETA in 1978, the program had largely lost political support. And yeah, I think that just goes back to the structure. Like I think the way that it was structured, it was really set up to fail. And it was federally funded, but everything about it was locally conceived. So it really led to a huge variation from programs that were exemplary in every sense of the word to programs that were totally corrupt, and not making use of the money received from the government to do anything worthwhile. So there was really such a large variation.

Billy Saas: Was it the fact that it was locally conceived that was the issue? Or was it more about not developing standards, metrics, oversight ahead of time, for those localized purposes, because it strikes me as entirely possible that local communities would have a pretty good idea of what they ought to be doing. But the problem of oversight not being addressed seems to kind of be a critical ingredient and setting it up to fail. 

Colleen Hooper (@hoopercolleen): I agree. I think the oversight really was the central issue, because I think you’re right in that local communities definitely know what they need. But it depended on whomever that administrator was, and what their intentions were. Were they really going to work with the community to create a project that was valuable? Or were they going to use the money to basically employ people that would have been employed anyway to employ friends or relatives? And because of the way everything was organized, it’s really hard to know the degree to which that type of corruption took place because of the lack of oversight, but once you know some of that got into the news, it really started to create a lot of problems for CETA and people did not politically want to be attached to it anymore, because there wasn’t a way to ensure that that type of thing wasn’t happening due to the lack of oversight.

Scott Ferguson: So your research deals with the history and memory of CETA. Or maybe it’s better to put it as the lack of memory or the amnesia about CETA and the arts. You know, and I can say that as somebody who’s interested in the possibilities and complications for public employment across sectors, including the arts, I think that most Americans have this idea that the last time the federal government hired anybody to paint or perform anything was during the New Deal, and maybe during World War II. So I’m wondering, you know, what is the memory of CETA? You cite a fairly conservative economist Tyler Cowen, in your article, what does Tyler Cowen have to say about this? And why is reviving the memory of CETA Arts and Dance important for you?

Colleen Hooper (@hoopercolleen): I think it’s important because I think it was misremembered. I think that through talking to people who participated in it, I just got a totally different sense than from anything that I’ve read, which had been written previously. So there was also a book written by Steven Dubin called Bureaucratizing the Muse, which was about the Chicago CETA arts program, and he was actually a participant observer in that program. And to him, it seemed like the artists were being used as boosters for the city, and really, their talents weren’t being fully used. And that’s the only monograph that had been written about CETA arts, and it had come out during the 80s. So that was one point of view. And another was just this idea of corruption, which was documented in popular news sources like the Reader’s Digest where Bennett, Ralph Kinney Bennett talked about, you know, just anyone could say they were an artist, and this was such a misuse of federal funds. And it was a joke on the truly disadvantaged, the poor. And he does bring up an important point, because I think there were problems in terms of using CETA funding to support people who were very highly educated and were also maybe had access to capital in other ways that weren’t able to be documented on a typical income employment sheet. So those types of conversations really dominated what was going on with CETA in terms of how it was remembered. And then Cowen was very dismissive. In his book, Good and Plenty, talking about the successes of US art funding, he was very dismissive of CETA. And he said, you know, by the time CETA came around, there were better methods for identifying talented artists than there were during the 1930s. And it really didn’t make a big difference in the field. And it was basically a, you know, a total waste of money. Because by then, people were able to identify talented artists and it wasn’t as dire of a situation economically as the Great Depression. So I just felt that CETA was really written off in a lot of regards, but then my lived experience of talking to dancers and artists, from different fields just told a totally different story. And, you know, I think that that’s why I wanted to bring this to the forefront because as you gestured towards having this sense of full employment, we’re having the possibility of the government employing artists and other types of workers. has been kind of dealt with in a dismissive way in some senses, and I just feel that that’s inaccurate. I feel that the impact of CETA goes well beyond the types of scholarship written by Cowen and others. Because it was really hard to track what CETA did. And that’s kind of part of what I’m trying to recover is figuring out how CETA impacts these people? And how can we tell the story so that we can start to recast the conversation and acknowledge that this important thing happened, and see where it fits into where we’re sitting today.

Billy Saas: We’ve talked a bit throughout our conversation today about you’re talking with people who actually experienced and worked in the CETA program or audiences for CETA programs. Could you talk a little bit more about your methods in this article that you circulated “Ballerinas on the Dole”? That’s the Ralph Kinney Bennett’s kind of dismissive remark about CETA programs. But could you talk a little bit more about your methods?

Colleen Hooper (@hoopercolleen): So in terms of my methods for researching CETA, I did in depth, semi-structured interviews with a number of people, and I cast my net quite broadly in the beginning, and then obviously, I realized I had to at some point finish a project. So I had to focus then a little bit more in terms of geography and specific programs. But in terms of the interviews, I really, you know, would just talk to anyone who was artistically involved in CETA during that time period. So that meant that I talked to a lot of dancers. But I also talked to people who ran the visual arts programs in Philadelphia, I talked to a lot of administrators, which I think is not necessarily normal in terms of a Dance Studies project. But it definitely fits with my interest, because I think it’s important to understand how this program was conceived and how it was implemented, and how it fit within both the localized scene and then also this national conversation about CETA and the CETA arts programs. So I did a lot of interviewing of different artists and administrators. And then I went through the full archives at the New York City Municipal Archives, and it was like a 54 box collection that nobody had gone through prior to my dissertation research. So it was unprocessed. For those of you who may have an appreciation, what that means is basically, the papers just were, as they were donated to the municipal archives. So there’s a lot of information. But it was really a conversation between these interviews and the archives, and then obviously, a lot of secondary literature to help me try to contextualize the importance of both of those things. But yeah, those were primarily my methods. So I would say it’s like the qualitative interviewing process of the semi-structured, in depth time speaking with people in person as much as possible, but sometimes it was done over the phone. And then really, you know, diving into the archives, and using that as a way of gaining more knowledge and building upon interviews, which were talking about something that happened 40 years ago. So it was kind of a balance between those two methods.

Maxx Seijo: So before we wrap up, we wanted to ask what projects you’re currently working on whether they be scholarly or aesthetic in nature?

Colleen Hooper (@hoopercolleen): Well, I’m currently working on a book project. And I’m looking at this project of CETA, as we’ve been discussing, and I’ve expanded to also examine the WPA Works Progress Administration Federal Dance Theater, during the 1930s. So my working title is Dance From Labor to Service from 1935 to 1982. And it’s comparing dance as work in the 1930s to dance as service in the 1970s. And thinking about how dance redefines the concept of work. So I had the opportunity this summer to do research in the New York Public Library for the Performing Arts at Lincoln Center. So I was there for about a month in the archives and just really going into the administrative files of the Federal Dance Theater and the Federal Theater Project and also the different specific choreographers, papers, and really diving into what’s there and kind of looking at it from this other perspective. So that’s what I’m up to. So I’m doing a comparative study, and I’m kind of right in the midst of it right now. So I’m trying to make sense of all of this archival material, and looking for different ways to theoretically frame what is important about these two periods. I’m focusing on making connections between labor policy, federal arts funding and the Dance field. And aesthetically, I continue to choreograph. And I’m really focusing on the book project right now, but I’ve choreographed different pieces in the past couple of years. Focusing on ideas of outer space on ideas of humanity, kind of a little broader themes, but that’s what I’ve been working on right now.

Scott Ferguson: Well, Colleen, we wish you the best of luck. Thank you so much for joining us and definitely keep us posted on the progress of your research.Colleen Hooper (@hoopercolleen): Thank you. Thank you very much for having me.