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This month we are re-publishing our conversation with Steven Attewell along with a new written transcript and episode graphic. Attewell is author of the incredible book, People Must Live by Work: Direct Job Creation in America from FDR to Reagan, published in 2018 by University of Pennsylvania Press. The book examines the history of job creation programs in the United States from the Great Depression to the Humphrey-Hawkins Act of 1978.

Unfortunately, Attwell passed away last spring. Yet his work endures as historically robust and eminently humane approach to public policy. We dedicate this re-publication to his legacy.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

Billy Saas:  Steven Attewell, welcome to Money on the Left.

Steven Attewell:  Thank you for having me.

Billy Saas:  Would you start off by telling us a little bit about your scholarly background and how you came to write People Must Live by Work?

Steven Attewell:  Sure. So I am a rare beast called a policy historian. I sort of got into it because I was interested in political history, but I didn’t want to do the history of great men. I wanted to look at how the government worked. I found that there was this subfield that did the kind of stuff I was interested in. So I started as an undergraduate history major at Columbia, and then there was a history PhD program at UCSB that had a large number of policy historians who I could learn from, as opposed to just one person. I came to write People Must Live by Work, I actually write a little bit about this in the introduction, I was inspired by my experience of reading Arthur Schlesinger’s description of the Civil Works Administration in his classic The Coming of the New Deal, which was like the first history of the New Deal after World War Two. At the same time, while I was watching the Democratic presidential primary debates in 2004. I was listening to all of these candidates talking about the need to create jobs, build jobs, grow jobs, etc, you know, touting their plans. And at the same time, I was reading Schlesinger’s account of how the US government had created more than 4 million jobs in less than three months, at a time at which the most advanced administrative technologies available were the rotary phone and the carbon copy. As a budding policy wonk, I went on to the websites of these, John Edwards, and John Kerry, and Dick Gephardt, and looked at what their plans were. They amounted to little more than these very small pots of money for small business loans or tax credits or stuff like that. The difference in ambition between the past and the present fascinated me. My question was, Why is nobody talking about the Civil Works Administration? Why did no one teach me this in school? Why did I have to stumble across it in the book? That’s what inspired me to start this project.

Maxx Seijo:  So as you’re just mentioning there in your book, you foreground what you call the politics of direct job creation, and you trace this throughout the 20th century. We’re wondering if you could perhaps talk about how this history and foregrounding it complicates our historical memory of what’s imaginable?

Steven Attewell:  Yeah, that’s a great question. So I think the main thing is we have a vision in our collective political imagination of the way our system of social and economic policy is supposed to work, right? This is social security. This is the welfare state. This is what the federal government does to manage the economy. And there’s this giant missing hole in terms of how everything was supposed to work. For example, one of the things that blew my mind when I started was that direct job creation was built into the Social Security Plan. It was always supposed to have this extra leg to the stool, this extra safety net under the safety net to catch everybody, and it’s not there. And the fact that it’s not there explains a lot. Of the problems in our welfare state, like why people slip through the cracks, why our system is not as generous as it ought to be. Likewise, on the economic policy side, why is it that the United States is,  even in its golden age of the 40s through the 70s in terms of the economy, why is it that we had higher unemployment than the rest of Europe, or the whole of Western Europe? It’s because there was this missing part. We had a plan for what the post-war world should look like, and then we didn’t execute it. And as a result, we have this huge vulnerability that when there’s a sudden downturn in the economy and mass unemployment, we have these very indirect tools to deal with it that take a while to go into effect. Whether or not you’ve put enough resources into them, it’s very uncertain. It’s missing this additional lever, and that really kind of complicates our understanding of what the state should look like. The next kind of thing that it complicates to me, which ties into this is, we have this popular conception that World War Two ended the Great Depression, and that the New Deal failed to end the Great Depression. That plays a big part in our historical imagination of, what is the possible? What can the government do and what can’t it do? Why do people say, Oh, the government can’t create jobs or the President can’t really, directly affect the economy. It’s because we have this false impression that we tried these programs and they failed. The reality is, they succeeded enormously. But that really complicates our understanding of the world, because what it gets at, fundamentally, is that unemployment is unnecessary, that we are a rich enough and powerful enough country, that we can have whatever unemployment rate we want. It’s just that for whatever reason, we have decided to just have high levels of unemployment.

Scott Ferguson:  So in the book, you trace four main moments in the history of direct job creation politics in the 20th century, the New Deal, the immediate post-World War Two era, the civil rights movement of the early 1960s, and the debate surrounding the Humphrey Hawkins Bill during the 1970s. Can you walk us through these moments? What defines each moment? What carries over from one to the next? What’s lost, what’s gained?

Steven Attewell:  Great question. So to start with the New Deal, I think it’s primarily sort of defined by experimentation. So you have this kind of unorthodox group of social workers, amateur social scientists, economists, civil engineers, who are coming up with a new way of doing things on the fly, because the old system has broken. We used to have this old sort of voluntary state and local system of poor relief, and it’s completely collapsed because it can’t handle the demand on it during the Great Depression. At the same time, they’re coming to this sort of more moral ideological position that says, people want work, they don’t want handouts, they don’t want charity. We have to give them what they want. It’s the right thing to do. So they come up with this program of direct job creation where they just say, look, let’s, let’s not worry about public works contracts. Let’s not worry about expanding the civil service or whatever. Let’s just directly hire people. Let’s just go out, give them paychecks, put them to work. Along the way, as they go from the Federal Emergency Relief Administration to the Civil Works Administration to the Works Progress Administration, they’re coming up with economic theories, with a policy regime and an ideology, and then a whole bunch of evidence about what works. Even though we’ve come to think of them as these sort of temporary emergency programs, almost from the beginning, they’re saying, this needs to be permanent. This has to be the way that the US government functions. One of the scholars whose work inspired me, Edwin Amenta, describes this as a jobs and assistance state, as opposed to a welfare state, that it wasn’t just a small program, it was this is fundamentally how you know citizens are going to interact with the government and how the government is going to interact with the economy. And it works for eight years that large numbers of people, big sections of the workforce are hired through these programs and are lifted out of destitution. The economy grows at a very fast pace. Unemployment drops dramatically, and by the end of it, the people who run these programs are absolutely convinced they have a successful experiment on their hands. Then you get this sort of disjuncture with World War Two. Not so much, because World War Two ended the Great Depression. I think it was over before the US entered World War Two. But, basically, the government shifts from directly employing people to build public works to directly employing people to smash fascism.

Scott Ferguson:  Can I ask you something about the New Deal moment? In the book, you suggest that there are at least two competing, let’s say, philosophies or schools, that then sort of compete for attention and resources. There’s the camp that’s interested in direct job creation, that is people oriented, and the goal of which, as I understand it, is to find people jobs first and foremost. Whereas the other camp is the traditional public works camp, which seems to privilege projects over people. Can you elaborate?

Steven Attewell:  Yeah, I would say it’s not just a competition between those two. It’s a competition between a lot of different ways of doing things, a lot of viewpoints. The New Deal, it wasn’t that it lacked ideology, it just had many, many ideologies that were all competing for control. So, during the Committee on Economic Security, you had a big fight between direct job creation folks and unemployment insurance advocates. Then you had a fight between the direct job creation folks and the Public Works folks. And there, what was really at stake was you have this old tradition since the Progressive Era, of being very suspicious about the fiscal state, that there was this fear that the government was inefficient, that it was corrupt, that it would waste money, that it couldn’t manage things efficiently. And so what you needed to do was, “run government like a business”. Use all of these mechanisms to ensure that the government is getting good value for money. This is our default when we think about public works today. It’s why, during the great recession, we were worried about shovel ready projects. This is where the whole fear about “boondoggles” comes from. What the direct job creation folks did was they sort of turned efficiency on its head. They said, rather than figuring out how much we can produce per person employed, which is the driving mentality for these kinds of very capital machinery intensive ways of doing public works. They said, let’s focus on creating the most number of jobs per dollar, and then see what we can do with that manpower, with that labor power. You had people both within and without the WPA who came to this conclusion. John Kenneth Galbraith, for example, writes a book called The Economic Effects of Public Works in 1943 in which he compares the Public Works Administration with the Works Progress Administration. He says, this DJC stuff is way more efficient when it comes to actually doing what we want it to do, which is produce enough jobs to bring down unemployment and that traditional Public Works has this limiting factor. It’s very slow to get off the ground. Because it’s indirect, because it’s working through these private contractors, you tend to create relatively few new jobs. There’s a lot more jobs going to people who are already working, and the private contractors are trying to make a profit, so they’re trying to keep as much money in their own hands as possible. Thankfully, in 1935, the WPA was able to out hustle the Public Works Administration on a bureaucratic level. They figure out that they’ve got the authority to run projects independently if they’re worth $25,000 or less, so what they do is they just take bigger projects and then subdivide them into $25,000 chunks, and all of a sudden they can just run the whole system by themselves. But they also attack on an intellectual level, and they make these interesting alliances with Keynesians, with people like Lauchlin Currie and Leon Henderson, Marriner Eccles. They’re all sort of saying, all these people who really care about how much consumer demand can we pump out into the economy, and they sort of say, hey, our program is a great way of shunting a lot of consumer demand into the bottom of the economy, the lowest paid people who will go out and spend it immediately. So help us. Help us get more budget, and we will do the work of Keynesianism. So that’s kind of how the conflict shakes out during the New Deal.

Maxx Seijo:  So then it sort of proceeds into the transition of World War Two, which I believe you were starting to articulate. Was wondering if you could talk more about that?

Steven Attewell:  Sure. So the major thing that happened during World War Two is that first of all, you have the US’s first and kind of only experience with real full employment, where unemployment is below 3% it’s hovering around 1-1.5%. This builds a certain kind of confidence within the government that they know how to do this now, and especially a confidence in a kind of economic planning. It’s very Keynesian. It’s very sort of technical. It’s about statistics and modeling. Then there’s this kind of utopian, good government vision that this will somehow move beyond political conflict. That these New Deal programs were broadly successful, but they involve political fights. You had to get appropriations through Congress. You had to make sure that there were projects in every single county in America, so that incumbents would fight for their districts. They thought, wouldn’t it be cleaner and better if we just allowed the executive branch and experts in the executive branch to do things like modulate tax withholding rates or modulate the budget without interference from Congress, and that that will allow us to have full employment without conflict. What you have happened is there’s this bill, originally the Full Employment bill. It eventually becomes the Maximum Employment bill, and eventually just the Employment Act, which is a plan to establish full employment as the economic policy of the United States. This is paralleled by bills that are happening, you know, across the rest of the Western world. But what they do is they got the enforcement mechanics. All the employment bill becomes is a vehicle for creating a presidential report, making recommendations to Congress that a special committee will look into. But there’s no teeth to it. What astonished me about this, when I dug into the archives, is its liberals doing this. It’s not conservatives killing the bill. It is people like Senator Robert Wagner of New York. The guy who wrote half of the New Deal, basically, and they’re coming out with these reports saying this is not going to be another WPA. We’re not going to have a literal right to a job. We are going to create enough job openings that people can have work, and we’re going to do this through this planning method. And so this sort of whole legacy of the New Deal gets ripped out. As a result, when the full employment bill gets watered down, and watered down, and watered down, what you have is this sort of general commitment that the federal government has a responsibility to make sure that unemployment doesn’t get too high, but no real direct mechanism for doing that. So when you then get to the War on Poverty…

Maxx Seijio:  Before you get there, I just wanted to ask about a specific point. As you probably know and familiar with, Alan Brinkley argues that the reason for this liberal support of watering down the New Deal and into the war, is that there starts to be a sort of mirror by which American liberals look across the pond into Europe and see Nazi fascism as a sort of State Employment Guarantee. So I was wondering what you thought of that, and if you thought that contributed to this sort of shift and transition away from rights based employment?

Steven Attewell:  I mean, I admire Alan Brinkley’s work, but I think he’s wrong on this point. So, for example, one of the great social Keynesians, Alvin Hansen, called the American Keynes, really wants Keynesianism to work through these big public investments, right? Healthcare, housing, education, science, public infrastructure, you name it. He comes up with a full employment plan himself. He’s very influential in advising the people drafting the Employment Act. But I’ve seen memos in which he basically says, You know what, why don’t we just gut all of this social, Keynesian stuff from the bill? He’s talking about eliminating his own work, and he’s not doing it because he says, Oh, I’m worried that we’ll become fascist. He says, Well, we can just do it later. What it really comes down to, for me, is this overconfidence in technical expertise within the executive branch, that all they thought they needed to get right was the process, and then they could take over and do the rest later. Once you had the Council of Economic Advisors up and running, they would come out with the correct social Keynesian plan, so it didn’t need to be spelled out in the bill. Lo and behold, when the bill passes and the Council of Economic Advisers gets going, there’s no way to actually get the social Keynesian thing that they wanted. In some ways, they’d voluntarily disarmed because they thought they’d already won.

Billy Saas:  Then you take us into the civil rights movement, what happened then?

Steven Attewell:  This is where the “what is lost and what is gained and what is carried over?” is really important. In the 1960s, the federal government was relearning this from scratch, the New Deal agencies were gone. There’s no transmission of information to the future. What you instead have is that memory is preserved within the sort of social democratic wing of the civil rights movement, people like Philip Randolph, Bayard Rustin. It’s not a coincidence that when they’re putting together the freedom budget, they’re working very closely with Leon Keyserling, who was a young New Dealer. He was the guy who wrote most of Wagner’s legislation and helped to write the Employment Act of 1946. He’s sort of come around a little bit on direct job creation, although he’s more of an old school social Keynesian. The problem is, there’s no synthesis between these two groups. In the Labor Department under Willard Wirtz, you’ve got people who are starting to work their way towards this idea that job training isn’t enough. We have a very discriminatory labor market. The federal government’s gonna need to give Black people jobs to bring down the racial gap in unemployment. Likewise, in the Office of Economic Opportunity, the War on Poverty agency, where they initially are very gung ho on the idea of: the problem with the poor is that they’re politically disempowered, so we’ll create these community action programs, and that will mobilize the poor to demand a fair share, and that’s how they stop being poor. Well, shit, that’s very politically controversial. Stop that. Don’t want to do that anymore. Then they also have this idea that the problem with the poor is that they are culturally deprived, or educationally deprived, or that they lack skills. So we’ll just give them a huge amount of job training programs and education programs to equalize this, and they run into a couple big problems. One of which is, they’re training people, and then there’s no jobs on the end of it, or they’re providing a lot of education. But the problem is, education takes decades to show any effect, right? You start Head Start. It’s a great program, right? But you’re not going to know whether you know that’s going to make a real difference in someone’s life 10-15 years later. So they’re starting to come around on this idea that there’s this thing called the poverty gap. It’s how much money would you need to give the poor of America to bring them above the poverty line? So now they’re really starting to think fighting poverty requires redistribution of material resources. And one of the things that they end up with, the OEO, is they say, let’s just create a jobs program. But those two agencies never have a synthesis with the folks in the civil rights movement who’ve already worked this out decades earlier and are trying to get them to do this thing. Then, as you start to get into the mid to late 60s, you start to get a problem, which is inflation. That Keynesians had gained control of the levers of power in the 1960s by demonstrating that they had mastery of the economy. They’d done the tax cut, the tax cut had worked, the economy boomed. But now, between the domestic boom and Vietnam, you’ve got overheating of the economy, you’ve got inflation, and that means you can’t have more spending, right? Because that’s going to fight against your attempts to keep inflation in check. It also means that the Keynesians switch from wanting a tax cut to wanting a tax increase, because they want to cool down domestic demand, and they know that the quid pro quo from Congress is going to be: you want us to raise taxes? You’re gonna have to cut the War on Poverty spending. So the problem with the 60s, the way that I think about this moment, is that there is this disjuncture between the policy learning that’s going on and the realm of political possibility. That there is this window from, really, 1964 to 1966, or really, maybe just late 65 but anyway, before the midterm elections of 1966, where you could perhaps do something on direct job creation, and by the time that they figured out that’s what they want to do, the moment is lost. They don’t have a working majority in Congress anymore. The support that they might have had out there for jobs has been squandered by anti-Vietnam sentiment and a backlash against the New Left and the civil rights movement. You hit a wall in the late 60s, especially because once Nixon becomes president, you’re not going to go anywhere. And that’s what leads us to the 70s.

Scott Ferguson:  So a lot of your narrative, which is very rich and informative, a lot of your narrative is about sort of the inner policy circles and fractures and fights. But I wonder if you could trace back through some of this history and shine a bit more light on social movements and calls for or the lack of calls for, direct job creation from the 30s into the late 1960s and maybe highlight a few important moments along the way. Like, I think our listeners might like to hear a little bit more about something you mentioned in passing, the Freedom Budget.

Steven Attewell:  Sure. So starting with the 30s, the person who’s really done the best work on sort of social movements and jobs in the 30s, is Chad Alan Goldberg, who looks at left wing social movements of the unemployed in the 1930s, some of which were associated with the Communist Party, some of which were associated with the Socialist Party, some of which were associated with the CIO unions. They were a very strong presence for direct job creation. They wanted jobs. They made protests in favor of jobs. What’s interesting in the 30s is that you get this kind of inside, outside politics. So for example, direct job creation workers, like WPA workers, were organized into unions. There were two of them. In fact, there was one called the Workers Alliance, which was a popular front, communist-socialist party, joint. Then there was the UAW, which organized its own New Deal Workers Union, because so many of their members get laid off from the auto industry and then go to work for the WPA. So they just sort of follow them into the WPA. You get this interesting dynamic where these unions and social movements will protest. They say, We want higher wages, we want more jobs. This isn’t good enough. And then agency officials like Aubrey Williams, for example, will come out and say, You’re right. Help us lobby Congress to get more money so that we can do those things. There’s a useful collaboration going on, but at the same time, it is at somewhat arm’s length. The New Deal doesn’t formally recognize these unions, informally it will. There’s a lot of going back and forth on prevailing wages is something that they’re always negotiating with the labor movement. Then when you get to the 60s, direct job creation is seen by the civil rights movement, or I should say, by many sections of the civil rights movement, as necessary for a whole bunch of reasons. One, it’s necessary for achieving the material ambitions of the civil rights movement. Martin Luther King has this great statement where he says, people have to be able to buy the sandwich at the lunch counter that they’ve just won the right to sit down at. One of the things that is being fought for by the civil rights movement is jobs and higher wages. It’s the reason why, in the March on Washington in 1963 the title of the March is a March for Jobs and Freedom. Because even, as you know, there’s a good economy in the 60s, rates of unemployment for African Americans were way higher than for whites. It’s also seen as important for breaking the triangle of segregation, the triangle of jobs, housing, and education. Even if you now legally, de jure, can buy a house in a white neighborhood, you can’t afford it because your job isn’t good enough. And your job isn’t good enough because you don’t have the formal qualifications to get a good job. But in order to get the formal qualifications, I need to go to a good school. Well, the good schools are good because they’re in high property value neighborhoods that are putting more money into schools. So the idea is, well, jobs is one of the ways that you can break that triangle. That you can give people good paying jobs, then not only will their neighborhoods get better, but maybe they can move into better neighborhoods and get a better education for their kids and so on and so forth. And then finally, it’s seen as important for building across racial working class coalition because a lot of people in the civil rights movement, even before the trouble signs in the economy are really visible, realize that if there’s going to be a conflict between white workers and Black workers over a limited pool of jobs, then white workers are going to go and vote for the racists. So the idea is, if we can use direct job creation to create enough jobs for everybody, and this is the vision of the Freedom Budget, that if there’s enough jobs for everybody, then you can have fair employment without anybody losing. You can have affirmative action, that you can help all of these people who’ve been kept out of the labor market and kept out of good jobs without freaking out white working class voters who are like, clinging to their toehold on the on the national economy, and getting them to go vote for George Wallace.

Billy Saas:  Help us put going to the 70s off as long as possible. Sort of circle back a little bit and ask you to comment on a little bit more about the role of, like, political economic orthodoxy and kind of shaping the decisions of these policymakers and these people in the positions of making decisions about direct job creation. Keynesianism, neoclassical economics, institutionalism, what’s going on?

Steven Attewell:  So one of the things that’s really interesting when I was looking at direct job creation is that it was very mutable as an economic philosophy, mutable in political economic terms. They could speak the language of Keynesians. They could say Hey, we’re all about demand. We understand that the problem with the economy is deficient consumption. Our program has the best marginal propensity to consume, and blah, blah, blah, blah, blah, right? And try to get their support. But they could also go over to the Institutionalists and say, Hey, man, you talk about administered prices and monopoly. What about monopsony? Right? That we’ve got these massive corporations that are depressing wages because they control whether or not you get a job. So if the public sector can break open that monopsony and restore competition for wages, then all of a sudden, you’re gonna get enough demand out there for these overly rigid prices. By the way, they could even flirt with the production for use people in the 1930s, the quasi-socialists, and say, Hey, we employ all of these people. Who says, it all has to be public works? Why can’t we make clothes for people? Why can’t we can food and distribute it to people? Why can’t we build housing? They have this sort of mutability. But then, if you look from the 30s to the 70s, Keynesianism especially plays a changing role. That in the 1930s the two groups are simpatico, right? Because Keynesians are all about pushing more spending, and this is a great vehicle for pushing more spending. Then, in the 1940s, they got very confident and thought, we don’t need these people anymore. We can just do this directly through manipulating the budget, manipulating the tax code. So they sort of kick them to the curb. And then in the 60s, you know, because they’re doing their own thing, they start to see them as hostile, like you’re screwing up our budgets, you’re screwing up our tax plans. Then, the real thing is in the 70s. Because the 70s is when the centerpiece of the neoclassical synthesis of Keynesianism and neoclassical economics, the Phillips Curve, breaks down. There’s no longer a stable relationship between inflation and unemployment that would allow a government to just pick a point and adjust interest rates, and you’d get the sort of hands free economic planning that you wanted. They’re increasingly in the 70s, under threat from neoconservative economists like Milton Friedman, who are saying you can’t do any of this, right? There is this thing called NAIRU. It means that you can’t have full employment, that any kind of government activism is going to fail. Because he had, “predicted” the breakdown of the Phillips Curve, had “predicted” stagflation, these Keynesians are really unsure. They lose their confidence. So what you see in the 1970s, especially in these hearings over the Humphrey Hawkins Act, is that Keynesians kind of Splinter as an expert community. You have some of them who say, the Humphrey Hawkins Act is what we need, inflation is not that big a deal, unemployment is more important. You’ve got other people who say any attempt to bring down unemployment is going to cause hyperinflation. We can’t rock the boat. We don’t know what’s going to happen. So just back away from full employment as an objective. As a result, the Humphrey Hawkins Act was not passed in 1976. Now, it was going to get vetoed by Gerald Ford anyway, but it sort of interrupted the process of consensus building around this piece of legislation. Then, unfortunately, one of the biggest kinds of “right wing Keynesians”, this guy called Charles Schultz, becomes Carter’s head of the CEA. When the Carter administration has to deal with the Humphrey Hawkins act, he’s the lead negotiator, and he’s like, totally in opposition.

Scott Ferguson:  So you’ve walked us back to Humphrey Hawkins. So what I’d like us to do now is to sort of take a wider shot and tell our listeners, who are less familiar with the Humphrey Hawkins bill and the fight and the gutting of the bill, what is this? What is this legislation? Where did it come from? How did it transform over time? Go.

Steven Attewell:  Great. The broader context is that in 1973 you had the worst recession since the Great Depression, right? It lasts from ’73-’75, unemployment goes up to like 10%, 11%, everyone’s freaking out. One of the responses to this is the creation of CETA, the Comprehensive Employment and Training Act, which creates about three quarters of a million jobs. So direct job creation now, once again, is in power. It’s in the government. It is the biggest function of the Labor Department. So now, it’s not just some people in the civil rights movement or a few wonks in a few agencies. This is the biggest thing that the Labor Department does is employ people directly. That is the context for the Humphrey Hawkins Act because now that they’ve built this capacity, they want to go further and create a right to a job to actually deal with the mass unemployment, because 750,000 jobs is not bad, but there’s 7 million people who are unemployed. It’s not dealing with the bulk of the problem. So the Humphrey Hawkins Act is a compromise between two different perspectives. One of them is from Congressman Augustus Hawkins, who is the founder of the Congressional Black Caucus. He is an old school, New Deal Democrat from South Central Los Angeles, and his version of this is based on Scandinavian social democracy. That envisions a system in which people have a legal right to a job. The way that is enforced is that you have local planning councils who come up with a shelf of programs. Then you have what’s called a job guarantee office, which replaces the unemployment office. If you don’t have a job, you go into this, and you apply for a job, and they’re then coordinating with the Labor Department and the executive and say, Okay, we have this many unemployed people. We need projects that will put them to work. So they take projects off the shelf, and they send people to what’s called the standby Job Corps, which is like a new WPA, basically. So it’s this kind of nice little tripartite system, but it’s very statist, right? All of this is happening pretty much on the public side, and it’s like very militantly backed by the right to sue the government. That if you need a job and the government won’t give you a job, you can go in and sue the federal government, and the courts will force them to give you a job. The other version of this is Hubert Humphrey. Hubert Humphrey had run for president in 1968. He’d lost, but he’s still a senator, or he gets back into the Senate, I should say, because he’d been the vice president. He starts working with our old friend, Leon Keyserling, who’s still around, who had been a major supporter of his in 1968. He had written a lot of speeches for him. What Humphrey wants to do is to amend the 1946 Employment Act and put numerical teeth into it to say it’s not enough that the President transmits a report to Congress about the economy. It’s not enough that we have a Council of Economic Advisors. You have to transmit a budget to the Congress that says that unemployment will be brought down to 3% or less. So they merge these two bills. Keyserling isn’t as much into the direct job creation stuff. He wants Hawkins to accept more of this kind of Keynesian economic planning stuff, but he accepts there’s going to be some role for direct job creation. They get into a big fight with Keynesians in 1976 where Hubert Humphrey and Hawkins are pushing this bill through the Congress, Keyserling is testifying before Congress, and he’s getting into a bunch of fights with economists who are saying we got to be worried about inflation. Keyserling has this very interesting perspective where he says, it’s not that full employment causes inflation; unemployment causes inflation because if you don’t have full utilization of the economy, then you’ve got bottlenecks and increasing prices for parts and raw materials and stuff like that, and that increases the prices of manufactured goods. So if you have full, full employment, prices will actually decrease, because those inputs will be cheaper. But this is like a big fight that you know they don’t agree with. So after the 1976 elections, they think they’re in a good position, that the Humphrey Hawkins Act was endorsed in the Democratic platform of 1976. Tip O’Neill likes and he’s running the house. They even get Jimmy Carter to sign on to it, even though it’s very tepid. And then the weirdest thing happens. This is a very similar story to what happens with healthcare under Carter, which is Carter having endorsed this stuff now says “I have my own plan”, and since he’s the president, everyone sort of stops and lets him do his plan. His plan is called the Program for Better Jobs and Income, PBJI. It’s not a great acronym. PBJI tries to do everything. It tries to say, Okay, we want to deal with poverty, we want to deal with unemployment, and we want to deal with welfare all in one go. So what it would do is, if you were unemployed and were able to work, there would be direct job creation. If you were employed but still poor, there would basically be a guaranteed above poverty wage through an expansion of the earned income tax credit. And if you were poor and couldn’t work, they would create a national welfare benefit. This is a very tortuous process. It goes on for nine months where you have people in the Department of Health, Education and Welfare who are only interested in the welfare side of things. You have people in the Labor Department who are only interested in the jobs side of things. Then you’ve got all of the economic departments, the CEA, the Treasury, Commerce, the Fed, who are like, this is terrible. We don’t want any of this. And Charles Schultz goes to Carter to say, Hey, remember how you also promise not to raise the deficit? And Carter says, Okay, fine. Give me a version of the PBJI that doesn’t increase spending. The people running it say that’s impossible. You can’t deal with unemployment, poverty, welfare and not spend any new money. So the plan cracks up. It goes nowhere in Congress. Everyone involved hates it, but it’s delayed dealing with the Humphrey Hawkins act for nine months, and then they start negotiating. The Carter administration starts negotiating with Senator Humphrey and Congressman Hawkins over the Humphrey Hawkins act, and Carter, in his infinite wisdom, appoints Charles Schultz to be the lead negotiator. This guy testified against the bill in 1976. Schultz fights this thing tooth and nail. He goes round and round and round. Ironically, on political economy. He’s like, No, but inflation, Phillips curve, this stuff I believe in, I’m gonna fight for it. I don’t want binding targets for unemployment. I don’t want direct job creation. What I found in the archives, is that at the same time that he’s grinding this whole thing to a halt, he’s also going to people in Congress and saying, hey, I want you to sabotage this bill. He’s literally stabbing them in the back. Almost a year goes by. This is why the Humphrey Hawkins act gets passed in late 78 instead of immediately, and by this point, it’s been cut to ribbons. What astonishes me is even after they have completely defanged this bill to the point where it’s essentially a paper tiger, just like the Employment Act of 1946, even after that, you’ve still got people in the Carter administration figuring out ways to not enforce this. They’re soliciting opinions from the Office of Legal Counsel, saying, can we ignore this law? Can we not enforce it? This contributes to this sort of breakup between Carter and the left of the Democratic Party. That culminates in Teddy Kennedy running against him in 1980 and Carter losing the presidency in 1980.

Maxx Seijo:  That’s a whirlwind of the history of this breakup of the last real bill that we’ve seen to raise the potential of a jobs guarantee in this country. I was wondering, because you do cite in your description of Humphrey Hawkins, one of the main problems is that Jimmy Carter sort of tried to smash all these things together into one bill that preceded Humphrey Hawkins on the debate schedule, and one of the principal issues was that he didn’t want to raise spending. That sort of made me think, because we are the Money on the Left Podcast, I was wondering if you could talk about at what point in this project you arrived or came to MMT, and how that informs the way you think about these moments.

Steven Attewell:  Ah, it’s a great question. So I came to MMT sometime in graduate school. I was reading a lot of political economy, fairly widely. I was reading Vickrey, I was reading a lot of Minsky, and then I ran across, where is it I actually have my copy on my desk? Yeah, I ran across Understanding Modern Money by L. Randall Wray. It kind of made me rethink a lot of stuff. Because in addition to writing this book, I had been doing a lot of blogging about direct job creation and trying to come up with my own plan, and trying to figure out how much it would cost, and how would you pay for it. I had been working on this kind of dodge where I said, Look, because I had noticed, during the Great Recession, the Federal Reserve had just created $7 trillion out of nowhere, and it didn’t create hyperinflation. I was like, Huh, why don’t we set up a system where, like, we’ll have direct job creation fund that’ll be financed with a payroll tax or something like that, but it can borrow from the Fed, so that when you have a recession, instead of having to support itself with its own revenue, it can take out a theoretically infinite zero interest loan from the Fed and then eventually pay it back. Then I read L. Randall Wray, and I was like, Oh, I’ve kind of backdoored my way into this. Or we could just tell the Fed to write the government a check. That would be a simpler way to do this. It kind of changed my thinking about this. I mean, I’m still fairly new to MMT. I’m still trying to sort of work my way through some questions about, Okay, how do we figure out how much money we can create relative to the real productive capacity of the economy? How do you operationalize that? To what extent are back doors useful if credit is all about faith, right? How do you work the magic of convincing people that money is real and liberate this power for public good? Because that’s the thing that L. Randall Wray’s work, and then, later, when I’ve read more MMT, have really gotten me to think about is this enormous power that is monetary power that we only use for the interest of a very powerful, but small industry, right? We created $7 trillion for the financial sector. We didn’t create $7 trillion for people whose houses were getting foreclosed on, or people who are going unemployed, or people who didn’t have health insurance. I was like, why don’t we use this power for everybody, not just for the people who are actually doing the best.

Billy Saas:  So one of the more exciting developments coming out of the MMT world now is the talk about not just a jobs guarantee, but a Green New Deal. There’s heavy borrowing from the rhetoric around the New Deal that you cover throughout your book. Could you maybe talk about and comment on or just join us in wonder at the Sunrise Movement and the call for the Green New Deal?

Steven Attewell:  Yeah, so I’m absolutely fascinated by the Green New Deal. I think it’s like one of the smartest things that the left has come up with since Medicare for All. It’s not so much that it’s incredibly technically complicated on its own, although it will be, but just the way of thinking about it, right? When I was talking about, how do you sell people on the faith of this, on the dream of this? What really got to me about the Green New Deal is, I wrote about this at Lawyers, Guns and Money, is it’s a way of doing everything that the left cares about. It’s about job guarantee. It’s about education and training. It’s about the fight for 15. It’s about environmental justice, it’s about racial justice, it’s about universal health care. It’s about child care, it’s about unions, but it’s in one vision that we can then talk to people about. It’s not a 50 point plan for every single issue. It is the vehicle through which everything else flows. And I think it’s goddamn brilliant. It’s one of those things that people really, really like. If you pull people on the Green New Deal, they like it. It’s even more popular than job guarantee, full stop, because it combines everything that people like about the job guarantee with all of the stuff that they care about on a whole host of other issues.

Billy Saas:  It’s got a much better ring than PBJI.

Steven Attewell:  Oh, absolutely, absolutely. Let us never follow the Carter administration on anything having to do with branding and public relations, please,

Billy Saas:  Or fiscal policy, or much else.

Scott Ferguson:  So from the point of view of your new book, what are the key lessons that we should be drawing for not just the fight for a job guarantee, but more expansively, this Green New Deal?

Steven Attewell:  So, yeah, this is something I was thinking about recently, and I’m actually working on a paper, hopefully that’ll be co written between myself and Phil Harvey, about what are these lessons? At the moment, I think there are three main ones. I don’t know if everyone’s going to agree on this, but this is what I’ve come to the conclusion on. Number one, I think methods of organization really matter. That it matters that direct job creation is public and not private. I don’t think it’s going to work if we try to do this through things like tax credits and subsidies to private employers, right? That’s the Ro Khanna model. It matters that it’s federal and not state or local. This is where I actually differ from people like the CBP’s plan, and the Levy Institute’s plan, so Wray and Sandy Darity, and also Cory Booker’s proposal, which is, if you look through the whole history of like American social and economic policy, one of the key flaws that we’ve always had to deal with is federalism. That anytime you introduce a role for the states, you introduce this enormous capacity for regional variation. That is a polite way of saying racial discrimination. The best example of this is the Affordable Care Act, right? If it hadn’t been for Justice Roberts saying that the Medicaid expansion was voluntary, there would be millions of people in Texas and Florida and all throughout the deep South who would have health insurance right now. The reason they don’t is because those states are fundamentally opposed to the idea of Black people getting any help from the government. The same thing will happen with the job guarantee. We can see this from the civil rights movement and the War on Poverty. The War on Poverty was deeply disliked in the South because it gave poor Black people an alternative to the white controlled labor market. In Mississippi, that was absolutely hated. So I think the federal government needs to run this. It’s not that the state and local governments and NGOs can’t be like sponsors, can’t propose projects and help out with money and give people a place to slot into, but the federal government has to be in the driver’s seat. Second thing, scale and scope matters. Direct job creation has to be large enough in relation to the size of the problem to have a real impact. So for example, the Cory Booker experimental model, I don’t think it’ll work now. Granted, right now, unemployment is super low, but it’s not going to stay that way forever. So in the future, if we need DJC to actually step up and bring unemployment rates down, it’s got to be big enough to do that. It’s got to have a big enough impact on the economy. The second part of that is how you organize the work matters. Like, what kind of stuff are you doing? We’ve already talked about the way that the greenness really matters, because it energizes people who really care about climate change, and the fact that this planet is going to be unlivable in 12 years if we don’t do something, that if we don’t do anything in the next 12 years, the world will become unlivable. But also things like, for example, light versus heavy construction. If we’re going to build stuff, do we rely on a model that says, let’s buy or rent as many cranes and backhoes and steamrollers as is possible to bring down the number of workers we need to the smallest number. Or do we say, we’ve got a lot of unemployed people, their labor is valuable. Let’s give them tools and put them to work. Let’s be labor intensive. That’s a good thing, not a bad thing. Finally, under that point, the mix of infrastructure and services matters. One of the things that people have been worried about is that if all of this work is in construction, it’s going to be very heavily tilted towards men and leave a lot of women behind, or just people who aren’t suited to construction work, like people with disabilities, like myself. So in the 1970s like one of the real advances, CETA had a lot of problems, but one of the things it did right was it created what was called public service employment jobs. There’s all kinds of services that people need, whether it’s healthcare, whether it’s childcare, whether it’s education, whether it’s elder care or whether it’s just making the rest of the government work more efficiently. Put enough people into the DMV that the line takes five minutes. It’s that kind of stuff that legitimately touches people. The third thing is, there’s gonna be conflict within the broader left slash center left, like the Democratic Party, family, whatever you want to call it, and we need to be ready for it. On the one hand, direct job creation scares the hell out of some people for a couple different reasons. It is more statist. It is the government employing people. It involves more spending. It bypasses a lot of traditional stakeholders, like private contractors, state and local governments. Although, you know, as I said, I think there’s a role for state and local governments. It also challenges powerful, sometimes semi-conscious ideas about the necessity of unemployment and the worth of unemployed workers, that there’s this assumption that people who are unemployed are non-productive, are not worthwhile, are lazy or stupid or whatever, and so they have no value. The reality is, unemployed workers have this enormous value that is constantly being lost, right? There’s no way of preserving the labor power of someone who’s not working. Another thing is that given that direct job creation is only going to happen if and when Democrats control all three branches of government, one of the biggest problems we’re gonna have to deal with is not so much the right. They’re gonna hate this idea, but either we beat them or it never happens. But it’s people on the left to center left. We’re gonna have to deal with budget hawks. We’re gonna have to deal with other centrists who are crazy worried about deficits, and we’re also going to have to deal with other leftists, like universal basic income enthusiasts, who see direct job creation as a competitor for budget dollars and political oxygen. Then the fourth thing I’ll say is that visibility really matters. I think one of the ways that we kind of missed a trick when it came to the American Recovery and Reinvestment Act of 2009 is that we tried to make things hidden. I think the best example of this is the payroll tax credit that no one realized they got. I was thinking back to when the Bush tax cuts happened, and they sent out mail to everyone in America with a picture of George Bush’s face and saying, Hey, we got you a tax cut. We should do stuff like that. The WPA had these big red, white and blue posters on all of their job sites, so that everyone knew where the WPA project in their community was. When it came to ARRA, there were these kinds of ugly orange signs. But unless you were driving, you couldn’t really see them. There needs to be a mix of projects, and we have to be a little bit crassly political about this. We need to make sure that there are projects in every congressional district in America, and we need to make them very, very visible. My thing that I’m nuts about is I believe very strongly in giving people cards. You get a social security card, right? That’s something in your wallet that you can look at, and it’s a tangible connection between you and the government. If it were up to me, I would say, okay, Green New Deal, awesome. The job guarantee part of it, or the income guarantee part of it, or the living wage part of it. Everyone needs a card in their wallet, a laminated piece of plastic that they can sort of say, even if it’s only a symbolic function, to say this is something you have from the government. This is a right that you now have, that you can exercise. You have a protection that you don’t have already.

Maxx Seijo:  Well with that Stephen Attewell, thank you so much for coming on Money on the Left.

Steven Attewell:  My pleasure. Thank you very much for having me. If you’re interested in this stuff, Public at Work is available through the University of Pennsylvania Press or on Amazon.com.

Maxx Seijo:  Perfect.

* Thanks to the Money on the Left production team: William Saas (audio editor), Mike Lewis (transcription), & Robert Rusch (graphic art)

We speak with Sandeep Vaheesan, legal director at the Open Markets Institute, about his forthcoming book, Democracy in Power: A History of Electrification in the United States (University of Chicago Press, 2024). Democracy in Power is a highly detailed work of political and institutional history that recounts the struggle over electric power generation in the United States. It is also an agile experiment in heterodox economic and legal theory, which treats both political and electric power as contestable and malleable public goods. 

For Vaheesan, historical battles over electrification in the U.S. remind us that today’s green transition presents new opportunities for democratic participation and institution building. “Elected and other public officials in the United States who express a commitment to combating climate change … face a choice,” he writes, “decarbonize and maintain oligarchy or decarbonize and build democracy. Even as the net-­zero pledge has become a rallying cry in the fight against climate change, it should raise concerns for those committed to democracy.” 

During our conversation, Vaheesan lays bare the tragedy of “dirty power,” the concentration of inordinate powers to shape the global climate into increasingly fewer and usually unaccountable private hands. At the same time, he charts a clear and hopeful path for a just and democratic transition powered by clean and green energy. 

What is vital for this project, Vaheesan insists, is to expressly politicize and reshape the present monetary order in a manner that serves democratic rather than oligarchic control and interests. 

Please preorder Democracy in Power today through the University of Chicago Press website.

For more on this topic, see our previous interview with Vaheesan on the Superstructure podcast.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

Billy Saas:  Sandeep Vaheesan welcome to Money on the Left.

Sandeep Vaheesan:  Thanks so much for having me.

Billy Saas:  Now, this is not your first time in our podcast feed. You were previously on Superstructure talking about some of your work with Scott Ferguson. But this is your first time on Money on the Left. And we’re excited to have you on the day of the publication of your piece in The New Republic, titled “The Best Way To Fight Heat Waves and Outages is to Green the Grid.” We’re here also to talk about your exciting book that is due out in December. But before we get into that, and I think this piece you have in The New Republic, today is a great way to get into that. Let’s contextualize our conversation. It’s probably the hottest summer on record. Thousands of people across the globe are dying as you outline and make so vivid in your piece for today. We need to green the grid. This piece that you have out today, what’s its argument and how did you come to write it?

Sandeep Vaheesan:  Yeah, so as you say, we are living through the hottest summer on record, I believe, certainly in the northern hemisphere and 1000s have died around the world. Heat waves have rolled across the country. I feel like here in Washington, DC we’re in our third heatwave right now. It was 101 degrees yesterday, which even by our standards is very hot. This is a sign of global climate change. Heat waves aren’t new, but they’re certainly getting more frequent and more intense. It’s just a reminder that we need to take climate change seriously and view it as not just a threat but an existential threat to humanity everywhere. One critical front in the fight against climate change is decarbonizing the power sector, which in most countries around the world is either the biggest or second biggest emitter of greenhouse gasses. Because coal, natural gas, and oil are burned to generate electricity. That means a lot of carbon dioxide and other greenhouse gasses. Not only is the power sector contributing to the problem, it’s actually being hurt by the problem. If you look at what’s happened in the Gulf Coast, you have a very early arrival of hurricane Beryl. Usually we don’t see such storms until late this month, or August. That’s another sign of accelerating climate change. The power system in Houston was hit rather hard by the storm. There are a number of reasons to believe that the utility was underprepared despite ample warning that it wouldn’t be able to handle such a storm, which is certainly not a big storm by standards of the Gulf Coast, but nonetheless a powerful storm. Then if you look outside across the West, you have large reservoirs like Lake Mead that have lower water levels than they did 30 or 40 years ago because of warmer temperatures, less precipitation. So the power sector is contributing to the problem, and then also being hurt by it. Decarbonizing power is one of the most important things we have to do here in the United States and around the world. And we’re taking steps toward it. The Congress passed the inflation Reduction Act in 2022 that might ultimately result in about a trillion dollars in spending on clean energy and energy efficiency and system hardening projects. It’s a substantial outlay. But nonetheless an insufficient outlay. Careful modelers of the energy system have found that, yes, the IRA is better than the status quo, but it still will not get us to net zero, let alone carbon zero. So in my piece, I argue that we need to think more ambitiously, think more radically. Instead of trying to cajole and bribe the private sector, into building more wind, solar, and other zero carbon power, we should look to our historical past precedents, like public power, and actually just do it ourselves. Why not have our elected government build large scale clean energy projects, much like how it did in the 30s, 40s, and 50s by constructing hydroelectric dams on rivers like the Columbia, the Tennessee? The project had limitations, serious shortcomings, but it’s a template on which we can build.

Scott Ferguson:  This is actually a great time to pivot to your book. But before we do so, maybe you can tell our listeners who are not familiar with you and your work a little bit about your professional background? What are your areas of training and expertise, and where are you currently working and things like that?

Sandeep Vaheesan:  Yeah, so I’m the Legal Director at the Open Markets Institute, which is an anti-monopoly research and advocacy group based in Washington DC. As my title suggests, I’m a lawyer by training. Before coming to the Open Markets Institute, I worked at the Consumer Financial Protection Bureau, but most of my work has been focused on antitrust and public utility regulation. I use the term anti-monopoly and people wonder, well, what does that mean? I think it’s certainly more than just the latest rebrand of antitrust. It’s more than just progressive antitrust. It also encompasses fields like public utility regulation, consumer protection, and corporate governance. Certainly the aspiration of my colleagues and I and historical anti monopolists was to build a more fair and democratic economy where power is exercised by the multiracial many, rather than the overwhelmingly white and male few.

Scott Ferguson:  Do you have an origin story of how you became specifically as an antitrust legal expert and lawyer, how you became specifically interested in questions of power?

Sandeep Vaheesan:  Ah, it’s been a long and often slow process of, I would say, steady radicalization. So I was in law school in 2008, when the Global Financial Crisis happened. The collapse of Lehman Brothers was September 15, 2008. I had just started my second year in law school, and I do view that fall as a kind of turning point in my intellectual and political trajectory. My law school assembled this group of experts to tell us curious, but mostly uninformed students what’s going on, what’s going to happen next. They brought together an economist, a business school professor, and a law professor to talk about why Lehman collapsed, why we were in the midst of this greatest crisis since the 1930s. I remember being struck at the time by how utterly out of his depth the economist was. The economist was at a loss for words. Like “I don’t understand what’s happening, this doesn’t really fit within any of my models. I don’t know what to say.” He kind of hand-waived at maybe irresponsible promotion of homeownership by the federal government, maybe people had tricked banks into giving them credit that they couldn’t afford to repay. The standard right wing explanation of the crisis. The Business School professor, by contrast, was somewhat more informed and did have a sense of the predation  that had happened in the mortgage industry in the prior five years. The law professor had a clearer sense of why Lehman collapsed, and why we were in the midst of this great crisis, that we have this thing called mortgage backed securities, we have a system where banks want to originate and package and sell as many mortgages as possible, that produced a wave of speculative and irresponsible lending. People got mortgages that they couldn’t repay. And once you have a critical mass of homeowners who can’t repay their loans, you have a crisis. And so for me, that was very much a turning point where I realized the economics I had been taught as an undergrad actually had very little correspondence to how the world worked. It was a very sanitized and impoverished view of the world, really no engagement with the institutional details. As you’ve mentioned, no understanding or awareness of the idea that there is power in the world, that certain actors or individuals make important decisions, and, in a sense, make the rest of us objects of their wishes. So for me, 2008 was really a turning point. After that, I realized, as a lawyer, I’m actually equipped with some of the intellectual skills to understand the world because if you look at many lawyers, they have a deep intellectual inferiority complex. Especially with respect to economists. They feel like economists know math, they know how to crunch numbers. They seem really prestigious. lawyers aren’t that. But after 2008, I realized, okay, actually the lawyers have a better sense of what’s going on, because we actually, at least imperfectly, know the rules of the game, and their problems. I had the good fortune of having a few very good professors during my three years of law school who brought a critical perspective, a legal realist perspective. Today, we might call it an LPE perspective. They  said very early on, law in large measure is politics by other means, and we shouldn’t lose sight of that.

Scott Ferguson:  So you answered the question in terms of our understanding of power as in political power, which is totally legitimate. But I was actually asking how you got interested in electricity, right? Yeah, that’s great. I mean, because in your work, both, both understandings of power are always resonant in multiple ways. And one can’t think about the electric grid, for example, and its history and its contestation and its future without thinking about political power. So what turned you toward the electric grid, the history and politics of the electric grid?

Sandeep Vaheesan:  Yeah, so sorry for that long winded answer to that distinct question.

Scott Ferguson:  No, it’s great.

Sandeep Vaheesan:  Yeah, I feel fortunate to have been exposed to the power industry and relevant regulatory and governance questions at a very young age. My first job out of college was working at an economic consulting firm here in DC that provided regulatory and litigation support to federal, state agencies, as well as some private corporations involved in antitrust litigation, involving rake cases, involved in mergers and acquisitions. I’ll be honest, sometimes this firm was on the right side of things. And other times we were helping further consolidate the power sector. But it was a very educational experience. Most of the work I did involved, this is going back way in time, the California electricity crisis in 2000 and 2001, where infamously Enron as well as a number of power companies, rigged the market, created an artificial shortage of electricity in California, that led to sky high rates and rolling blackouts across the state. That crisis spawned a series of regulatory proceedings before the Federal Energy Regulatory Commission to claw back some of that money that had been illegally obtained by Enron and firms like AES, Dynegy and Mirant. If you’re a power sector follower, those will be familiar names to you. And I realized this was a sector that was not only essential, can’t imagine modern life without reliable, affordable electricity, but it was also in the midst of great institutional restructuring. So traditionally, power has been a classic natural monopoly provided by a vertically integrated firm. Starting in the late 1970s, neoliberals thought, why don’t we try to make the power sector or at least portions of it competitive. And so I got to be involved in some of these matters up close and appreciate the changes that were happening. And that instilled in me, sort of lasting interest in the sector. How do we design the market or governance system in a way that we have reliable, affordable, and of course, clean power, and ever since then, I’ve had the good fortune of working on our industry questions off and on. Sometimes going a few years without touching it, but invariably coming back to it in some capacity or another. And I’m not an engineer, I have no background in engineering. And I realized this was an area where the debates are dominated by neoclassical economists and electrical engineers. It makes sense that the engineers are involved like this is a complex system. I still don’t fully understand the physics, but you want to have technicians involved in designing the power industry. The neoclassical economist’s role, that’s more debatable, arguably contributed some useful ideas, but they’ve also produced a lot of very questionable ideas that have been implemented to our collective detriment. After about five or 10 years, I think I had the intellectual sort of self confidence to understand that okay, maybe as a lawyer, I have something to add here. Yes. I don’t know physics as well as engineers do. I don’t know the models that economists do. But I do know, and I’m very curious about the institutional arrangements here. And that gives me a comparative advantage. I know how to interpret a statute or regulation and read legislative history. Those are things that most economists and engineers either don’t do or are not interested in doing.

Billy Saas:  There are a bunch of places in the book, which we’ve had the pleasure of previewing. The name of that book, again, is Democracy in Power: A History of Electrification in the United States. But the power power, electricity and electrification, energy and, and political power overlap. There’s a metaphor of dirty power, right, the continued dominance of dirty power. I would like to get your meeting on that and see if that’s a playful place. So dirty power as in the power industry that we have today, the private utilities that prevail in the United States are notoriously committed to in most if not all cases, means of energy production that are harmful to the environment. They also come by this power in some not so straightforward ways that might be considered dirty. Is this dirty power that is enjoyed and continues to dominate by the majority of power companies, is this come by honestly, in your estimation, or is it a story of corruption?

Sandeep Vaheesan:  Both, I would say. Something I should have mentioned at the outset is in the United States, we actually have extraordinary institutional diversity in the power sector. So most people in this country are served by what are called investor-owned utilities. So these are private power companies that distribute power, they own the power lines and the poles that run through our homes. In many cases, they also own and operate the high voltage transmission system. These are the tall steel pylons that you probably see on a fairly regular basis. And then going further back also, the power plants that generate power, whether using coal or zero carbon means like wind and solar. So these investor-owned utilities are, at least in part regulated by state and federal agencies. They are classic public utilities, they have to serve all comers. They have to offer just and reasonable rates, but in exchange, they’re granted either de jure or de facto exclusivity over a territory. There’s a recognition that the technical features of this industry favor scale. Conventional business competition is not going to protect the public, it actually won’t allow the businesses to persist as going concerns, so we’re going to have this basic bargain where the firms get a monopoly. In exchange, they have a duty to serve everyone in charge only just and reasonable rates. Most of us, about 70 to 75% of us, get our power from one of these companies, investor owned utilities or IOUs. The remaining 25% get their electricity from publicly owned utilities. So the city of Los Angeles is served by a public agency called the Los Angeles Department of Water and Power. There are 1000s of publicly owned utilities like LADWP. LADWP happens to be the largest one. They serve about 10% to 12% of the population and the remainder are served by rural electric cooperatives, which are nonprofit institutions that are owned and controlled by the customers that they serve. My book looks at how we get this type of institutional diversity? What is the origin story? Because I suspect most people don’t realize that public and corporate ownership models are so common. To the extent that the thing about public ownership, it’s often considered some foreign novelty. It’s like Scandinavia has some public ownership. Other parts of Western Europe have a little bit but, here in the capitalist United States, that’s not our thing. But actually, if you look at the power sector, public and cooperative ownership are really important. Getting to the question of dirty power. How did we get a grid that is still heavily dependent on fossil fuels? Some of it is through underhanded means. The power sector has been instrumental in sowing doubt about climate science, funding research that says, well, global warming is not the product of human activity, it’s part of the long climatic cycle where the earth cools for a period and warms for a period that has nothing to do with what we are collectively doing. So they’ve funded some of that research. They’ve bought regulatory and legislative attempts to restrict greenhouse gas emissions restrict the use of fossil fuels quite aggressively. Big oil gets a lot of the attention, but power companies have also been key players in sowing doubt about climate science, and then second, fighting public attempts to do anything about it. That’s the sort of dirty side of it. But if you look further back, much of the 20th century progressive project was about electrifying society, making electricity cheap, abundant, and reliable. Oftentimes, that meant public support for fossil fuel extraction and consumption. The view that, well, we have a lot of coal, we can burn it to produce cheap electricity that will help us make electricity truly universal. So some of it does involve classic corporate skullduggery, but a lot of it also reflects a public commitment to electrify living in the United States. For much of the 20th century, that meant not just building hydroelectric dams that produce electricity without generating greenhouse gasses, but also supporting fossil fuel generated power.

Scott Ferguson:  I’d like to give our listeners a little bit of a sense of the ambitious structure and scope of the book, at least as I’ve been tracking it and as I’ve been working through the preview copy that you made available to us, very generously. There’s three parts to this book that you’ve titled, “Past”, “Present”, and “Promise”. I like “promise” rather than “future”.

Sandeep Vaheesan:  It’s alliterative.

Scott Ferguson:  Yes, right. It’s alliterative. Before we started recording, I called your book a tour de force. I think it’s a tour de force for a number of reasons. But I think one of the reasons is because it’s very clearly written, it’s very straightforwardly written, very accessible, but you do switch between what we might think of as rhetorical genres, or even disciplinary modes of writing. So in the first part of your book, you’re really in the weeds and really telling us about the rise of electrification in the first half of the 20th century, really concentrating on the 20s and the 30s and the 40s, and really highlighting a lot of the contestation that starts in the 20s and really heats up, so to speak, during the New Deal. You take that on with painstaking detail, and I’d like to get into some of that. But then at the same time, this is also a work of legal theory, arguably political theory, also even monetary theory, and it’s a proposal. It’s a proposal for how do we move forward? And how do we structure our governance? How do we structure our infrastructures? How do we legally put together a regime that’s going to usher in a green transition that isn’t just private, for profit, and unjust but is actually serving democracy at the same time. So that’s my pitch for your whole book, and I think everybody should go out and buy it. Pre-order it now. But maybe we can, from that kind of larger macro picture. If you want to comment on that, if I’ve gotten something off, you can let me know. But maybe we can pivot from that macro picture into a little taste of the history that you outline in the first few chapters. What’s the state of the country in the teens and the 20s? And when it comes to electrification, what are the needs? What are some of the fault lines of contestation?

Sandeep Vaheesan:  First, I should say that’s a very accurate and generous overview of the book. So the first third is traditional history, admittedly not written by a historian but a historically-curious lawyer. The middle third is really critique looking at the institutional arrangements we have right now, doing my best to honestly assess what works well, what doesn’t work so well. The last third is theory and construction; my attempt to build castles in the sky and say, this is what a small-d democratic and green power system should look like. So let’s start with the first third. So chapter one opens with life in the United States in the 1920s, especially life in the countryside. This might be new to many of your listeners, but at the time, the United States was approximately 50% urban 50% rural. I think the 1920 census was the first time that more Americans lived in cities than in rural areas. It was something like 53%-47%. So roughly split, which is very different from today, where I believe more than 85% or even 90% of people live in metropolitan areas, or other built up communities. At the time, there was a major economic, social, and technological divide between cities and rural areas. Maybe the single most visible manifestation of that was in cities, especially by the mid 1920s. Most people, not just wealthy people, had electricity in their homes. So they have lights, they have a radio, they might have had a few small appliances. They didn’t necessarily have the appliances we take for granted today. In the words of people like Ronald Toby and Jay Brigham, they had electrified homes they did not have electrically modernized homes. That’s an important distinction, which we can revisit in a bit. So there’s electricity in cities. The countryside, by contrast, most people did not have power. So in the mid 1920s, fewer than one in 10 farmers in the United States had electricity. So in many ways, life in the countryside was pre modern. No electricity meant no running water, no indoor plumbing, no toilets, no refrigerators, no washing machines, no electric lights. People relied on things like privies, washing clothes by hand, which was a backbreaking, laborious exercise done almost exclusively by women, and relied on kerosene lamps and candles for lighting. So there was a profound difference between life on a farm, or most farms, and working in middle class life in cities. This was a major political cause at the time. People were asking well, how do we bring electricity to the countryside? There was this Jeffersonian vision informing a lot of the politics, the idea that we needed a healthy countryside not just for instrumental reasons. We need abundant and affordable food, but there’s something noble and virtuous about farming and country life. So this was a, broadly speaking, bipartisan political concern both progressives, moderates and conservatives. I guess that three groups, not two, recognized this as a serious political problem and something had to be done about it. Part of making rural life attractive was extending electric service to everyone who lives in the countryside. There was a real fear that if this technological backwardness continued that everyone living in the countryside would move to the cities, and you’d see rapid depopulation of the countryside. That ultimately did happen, but for other reasons. There’s belief that to really maintain the American character we needed to ensure the vibrancy and dynamism of life in rural areas. So that brings me to the question of why weren’t these places being served by power companies? The reason shouldn’t come as a surprise. So compared to cities, rural areas tend to be fairly sparsely populated. So if a power company built a one mile distribution line in the city, they might be able to serve 400 or 500 customers. In a suburban area, they might be able to serve 30 or 40 customers. But if you go out into the countryside, they might be able to serve three or fewer customers. So rural electrification meant substantial upfront costs to serve fairly few people. Second, there was a deep skepticism that people living in rural areas would actually use electricity, there was a sense of elitism that rural Americans were just hopelessly backward. They wouldn’t actually use modern technologies. That’s not actually true. Cars were actually more common in the countryside than in cities for much of the 1920s. So there was a ready adoption of new technology on their terms. But when it came to electricity, power companies and their executives thought there’s just no demand for power. We’re not going to focus on them. Instead, we’re going to focus most of our efforts on the cities and especially on industrial customers. So a lot of industries are switching over from steam to electric power, because they feel electricity is cleaner, it doesn’t generate any smoke or pollution, where it’s consumed and offers a lot more operational flexibility than steam engines do. So what many people, including in Congress, are saying is that we actually need a greater system of public provisioning of power. Private power is motivated by profit considerations. They’re only going to serve customers in markets that are likely to offer near term payoffs. Capital is impatient, so to speak. We can talk a little bit more about this. At the time, the private power industry was dominated by these large holding companies that had been formed by various financiers and executives, and these holding companies were very much rooted in the idea that this system exists to make money, make lots of money very quickly, using the magic of debt and leverage. So this short term financial orientation was in clear conflict with a recognized public and social need to extend affordable universal power service to everyone.

Billy Saas:  Really quickly right there, would it be fair to draw an analogy with contemporary efforts to bring broadband to rural communities? How much does that sort of movement or effort resemble what you’re talking about here? The recognition nationally, federally, that it’s important that we have reliable internet connection for folks in rural communities, but you also have the actors who are like, well, where’s the money in that? Is that a fair kind of comparison?

Sandeep Vaheesan:  Yeah, I think the parallels are quite strong. At the time, electricity was becoming a necessity. It was hard to participate in modern life without electricity. I think we’re certainly at that stage with broadband today. But the relevant private actors, as you note, don’t view enough short term private potential to do the necessary work upfront. Extend fiber optic network into rural areas. Today, we built distribution lines into the countryside 100 years ago.

Billy Saas:  And sometimes the bigger companies like Google will take on pet projects and abandon them mid-stream, right?

Sandeep Vaheesan:  Right. That’s a good example. So you’ll see companies try to position themselves as more responsible by saying, oh, here’s Google Fiber, we’re extending it into this low income neighborhood or extending it into, I don’t know if they’ve actually done this, but extending it into more sparsely populated areas. Similarly, 100 years ago, you had some private power companies pursuing these model projects. They’ll extend electric service into a village or town and say, look at what we’re doing. We’re teaching farmers how to use power. We’ve undertaken all these demonstration projects. And to be honest, they did something. The rates of rural electrification did go up a little bit in the 1920s. Richard Hirsch wrote a book, I believe in 2022, about this. I think he overcorrects, I think he gives them too much credit for what they did. But there were some attempts to build power lines to serve farmers. But the progress was very modest, and there were estimates saying that if we continue at this trajectory, it might take another 50 or 100 years to serve even half the population of the countryside. So it was happening at a glacial pace. So a number of people, ordinary people, elected officials, ultimately, the President himself in Franklin D. Roosevelt said, we can’t trust private capital to build power systems to serve everyone. So we will need a system of aggressive public provisioning to make electricity affordable and universal. A lot of these fights actually started in the 1920s. We commonly see this tendency among even informed lawyers and scholars to treat the New Deal as happening on a blank slate. So Roosevelt’s elected in 1932, and they just go on this orgy of experimentation. There was a great deal of experimentation, to be sure, but a lot of ideas had been developed in previous decades. As bleak and conservative as the 1920s were, in many ways, supporters of public power did make important advances. For example, Congress authorized the construction of the Hoover Dam in 1927, which at the time was the largest hydroelectric project, and I believe the tallest dam in the world. This happened during the Coolidge administration, Calvin Coolidge famous for his commitment to fiscal austerity, a minimalist national government. In spite of that, he signed this bill into law in 1927. The federal government started building this giant dam on the Colorado River. So you had a number of precedents established already in the 1920s. So the New Dealers weren’t really building from scratch, but rather expanding and improving what had been done in prior decades.

Billy Saas:  So it strikes me that there were ideas and proposals on hand in the 1920s that became, as you’re describing, became activated or empowered later. In your book, I want to do some more of this history. But I’m very excited about the promise portion. Specifically, we’re now in the 2020s. You have some ideas about how we might remedy things. Is the idea here to have some proposals on hand until such time that we’re ready to activate them? Or do you feel like you are intervening with this book into discourses and into a political scene where some of these actions could be taken, and maybe are already being taken now?

Sandeep Vaheesan:  I’d say both. So part of this book is trying to sketch out a different and better view of organizing the power system, drawing on institutional models we already have in parts of the country. I don’t have any illusions about our present political moment. I can’t imagine anyone reading the last third of my book in Congress and just say, we’re going to make this law. I imagined there are a few people in Congress who would be interested and intrigued by it. But I can’t imagine this becoming national legislation in the near future. So there is a certain utopian aspect to what I’m saying. At the same time, public power is experiencing a bit of a renaissance. There is energy and excitement around public power. Last November, the state of Maine had a referendum on whether to take over its two investor owned utilities and operate them as consumer run utilities. The referendum failed. I think the final vote was something like 70% to 30% against a public takeover. But the fact that this even got on the ballot is a testament to discontent with the status quo and a real desire to do something very different. Maine isn’t an aberration. We’ve seen similar public power fights in cities across the country. Boulder, Colorado spent about 10 years trying to take over its investor owned utility. As in Maine, it wasn’t successful. Minneapolis had a similar fight. Not successful with that as well. So there’s interest and there are people on the ground organizing and fighting for public ownership and operation of power systems. All the fights haven’t been defeats. That’s one thing I should say. So in 2023, the New York legislature, as part of the budget deal, gave the state owned New York Power Authority the ability to build utility scale, renewable power projects. It’s called the Build Public Renewables Act or BPRA. The New York Power Authority has been in existence for almost 100 years. It was formed when FDR was governor of the state, but it didn’t have the power to build large wind farms or large solar arrays. Now it does have that, and that’s a significant advance. That’s a big win for public power. You have the state agency that has the power now to build large wind farms and help the state meet its climate goals. I think that’s something that could be replicated in other states. Texas and South Carolina also have similar publicly owned power generation companies. I’m less hopeful about BPRA in those two places, but that’s something that could happen in the next five or 10 years. The Inflation Reduction Act, which is very much a mixed bag, does have a pot of money for publicly owned and cooperative utilities. The BPRA partly succeeded because its sponsors in New York could tell their more skeptical or agnostic colleagues that they have a new pot of federal money available that is just sitting there waiting to be spent, and we can either take advantage of that, or we can continue to sit on our hands. So I think the IRA will actually help some of these public power fights going forward. We’re still in the very early stages. But I think we could be on the cusp of, by my estimate, the third big wave of public power in the United States.

Scott Ferguson:  You also point out that some of these fights, even if they fail to municipalize or enact a full public takeover of these private plants, nevertheless, put a kind of pressure on the private industry. You’ve suggested that the franchise agreements that come out of some of these fights are shorter, and that there are more demands for public accountability that have arisen as a result of these contests.

Sandeep Vaheesan:  That’s right. So even unsuccessful public takeovers can put the fear of God in some of these utilities and pressure them to do better on reliability rates and decarbonisation. That’s what we saw in Boulder. So the investor owned utility there, just called Xcel Energy, won the fight. They defeated the 10-year campaign for public power. But their new franchise agreement has far more conditions around decarbonisation than their old franchise agreement did and gives the city the authority to launch another public takeover attempt if they fail to meet these conditions. That’s a really critical aspect. Even unsuccessful public takeovers can have real social value and this goes back to an interesting historical point. Two months before he was elected in November of 1932, FDR made a campaign stop in Portland, Oregon to talk about his approach to the power sector. He had, in his characteristic style, been somewhat non committal on what he would do in general, but including on the power sector. He had done some nice things when he was governor, but his allies wanted him to make some firm commitments. Like what are you actually going to do if you become president? He talked about the value of yardstick competition where we have institutional rivalry between public and private and where public actors are constantly pressuring private actors to do better. At a bare minimum minimum, there’s a sort of publicity function where people who live in a community served by an investor owned utility might look at a neighboring town served by a municipal power agency and say, hey, the muni seems to be offering lower rates, better service and a greater commitment to energy efficiency and conservation. Why can we do that? So that publicity alone might spur the investor owned utility to do better. But FDR, to his credit, said pure publicity may not be enough in all cases. Some of these IOUs might just be so short sighted and arrogant, that no level of naming and shaming will get them to do better. He said, “under those circumstances, what we need is,” in his words, “a birch rod in the cupboard”, he used this old metaphor of corporal punishment to say that, yeah, some of these utilities are just so beyond redemption that the only thing we can do is to take them over and run them as public agencies. Having a credible threat is really an important part of regulating private power companies. They should always be looking over their shoulder and ask themselves, are we doing good enough to avoid a public takeover? If not, what do we need to do better in the coming year to mitigate that threat?

Billy Saas:  In your book, you say Congress should make the birch rod an effective option for communities across the nation. I’m picturing, you know, local elected councils with sticks chasing utility barons around the streets. I’m interested because it seems like another key thread of the history of your book is, like any good legal scholar, you tarry in definition, right, and travel in some good definitions. I think the definition and the history of the corporation and private property is salient in the story that you’re telling. I’m thinking about the birch rod, the public utility or the municipal utility competing against a private utility, and how much that is so much performance of a division that isn’t really real or isn’t really there between public and private utilities and corporations. I’m getting at specifically, what I think one of the things that your book does really well is raise the veil a bit on what a corporation is, and has been, and could be, again. The idea that originally, early on, corporations were sort of delegated by the state to perform certain functions. Over time that public mandate or publicity of the corporation disappeared and was suppressed. It seems to me like in those municipal private contests, that’s part of the performance and sustaining of that sort of Kabuki performance of private-public.

Sandeep Vaheesan:  Right.

Billy Saas:  So I’m just really, I guess, appreciating what you’re doing here and want to wind up in sort of asking you Do you think that the kind of franchise agreements that places like Boulder Colorado have ultimately arrived at and settled on after years of throwing money at the corporations who are in bad faith just stalling, stalling, stalling? The franchise agreement, is it sort of an end run back into getting charters back in the center of the corporate form of the investor owned utilities?

Sandeep Vaheesan:  Yeah, so I think the franchise is one of those powerful, latent regulatory instruments that’s the setting out there waiting to be picked up and used and used well. It’s related but somewhat distinct from the corporate charter question. The franchise is something any operator of social infrastructure needs. The power company digs up and buries power lines, or runs power lines along our public roads and highways. Without a franchise, that’s a large-scale trespass. They cannot do that without authority from the relevant local government. So they got these franchises that say, okay, you’re paying for rights of way to build and operate this infrastructure there. They’re getting an important privilege here, ordinary corporations can’t do that. Which should raise the question, Well, okay, we’re giving them a public privilege of great value, what are we getting forward in return? If you look at the early history of power service in the United States, you saw cities and towns trying to use the franchise as a regulatory instrument. They’ll say, Okay, we’re giving you a franchise, you can build power lines, operate power lines on our roads and sidewalks for the next 15 years, but in exchange for that, you can only charge Y cents per kilowatt hour, and you have to meet certain reliability measures. If you don’t do that, we can take legal action against you, including revoking the franchise and awarding it to someone else or revoking the franchise and converting the existing physical assets into public assets. One thing you learn quickly by studying the history of the power industry, it’s very hard to remain a believer in fictions like private versus public, economics versus political, market versus states. They’re just hopelessly intertwined. So in my book, I hope in the first four chapters, the reader comes away thinking, okay, the Econ 101 view of the world where there’s a clear separation between public and private, state and market doesn’t actually make any sense. The power industry shatters those fictions. Just to be safe, I have a whole chapter explaining why it’s really state construction all the way down. There is no such thing as private property without the state, maintaining the land record system, telling someone, you own the plot of land, and we’re ready to enforce your entitlement to that plot of land through coercive force. We will send the police to evict someone who’s trespassing. Same story with respect to contracts: there are no binding contracts without a court system that stands ready to enforce contractual promises. The corporation is its own special creation, given all these unique powers that were historically paired with public responsibilities and duties. But since the late 19th century, the privileges have remained, but they’ve been stripped of the duties of the responsibilities. This is a book in which I drew on the work of so many legal scholars, historians, political theorists, and I should shout out David Ciepley’s excellent work on the corporation, and how we need to rediscover the traditional understanding of the corporation because all those privileges are still there. The privatization of the corporation has succeeded as a rhetorical and political matter, but as a legal matter, corporations have important public benefits, and it’s critical to pair those with public duties and responsibilities again. Despite the law and econ takeover of this field, Ciepley has been saying no, no, no, we need to think about the corporation as an institution that is wholly dependent on state action. So I cite him, my work was very much enriched by his scholarship.

Billy Saas:  You talk about William Roy and the privatization of the corporate.

Sandeep Vaheesan:  Yes, William Roy was another influential scholar, in shaping my thinking and ultimately, this book. For listeners who aren’t familiar with it, Roy traces the history of the corporation from around the late 18th century until the early 20th century. He examines how corporations went from quasi-public instruments that were chartered for very particular ends, building a bridge or building a road. That was the dominant understanding till about the 1850s-1860s. But thanks to Andrew Jackson, in part, thanks to clever corporate lawyers, the corporation became perceived as a private institution existing apart from the state. It’s also a function of our Federalist system where states compete against each other to attract corporations. So everyone knows about Delaware today being home to an insanely large fraction of fortune 500 corporations. But if you go back 100 years, New Jersey was the original Delaware. They unleashed this race to the bottom where states competed to attract corporations to charter there. So, for example, New Jersey persuaded the Standard Oil Company to give up its relatively restrictive Ohio charter and reincorporate in New Jersey under a more liberal charter, liberal from the perspective of the shareholders of the managers. At the time, corporate charters were actually an important source of revenue for state governments, so they had short term fiscal reasons for engaging in this ruinous competition. Which maybe will get us to another topic of shared interests, which is money.

Billy Saas:  Yeah!

Scott Ferguson:  I think one of the deep implications of this analysis in your book that you that I think is there, implicitly, but I’d like to tease out and kind of hear what your response is, you know, I’m always interested in the ways that Modern Monetary Theory can not only help us get over our zero sum thinking about federal spending, and open up our imagination for public provisioning, all the things that we all really like about it. But I’m also interested in what Modern Monetary Theory can do in terms of systemic analysis, systemic analysis of history, and historical crises. I think the way that you lay out, leaning on other people, but the way you lay out the history of the rise of both the actuality but more of the ideology of the private hierarchical corporation is actually a great case study for MMT because, as you point out, the US Constitution de-democratizes money creation, and enforces austerity, at the sub federal level, at the level of states and municipalities, because the Constitution forbids those sub-federal entities from creating money, it makes them reliant on revenue. That becomes the underlying motivation and condition for wanting to lure corporations to franchise anew under less restrictive rules in one state, right? So if you just take for granted that well, all entities need to earn revenue in order to spend and so well, it’s just too bad. Once the law made it possible, too bad. There’s a race to the bottom and we can lament it. But I think the way you lay out all the pieces of this puzzle, it helps us to see the ways that a constitutional structure of de-democratization and austerity for some federal governance incentivizes the rise of the modern private corporation and its inordinate powers, which it constantly abuses.

Sandeep Vaheesan:  That’s right. Yeah, so in the late 19th century, you had states struggling to collect enough revenue to engage in social spending, public investment, and as you mentioned, they cannot issue their own money so they ultimately have to engage in taxation, borrowing or other revenue generating activity. And one easy and fairly straightforward way of raising money at the time was issuing corporate charters. You grant a firm a charter with the sort of privileges. They, in exchange, pay either an upfront or recurring fee to hold that charter. With the growth of regional and ultimately national companies, you saw businesses starting to play states off against each other and signal quite explicitly: we don’t need to be incorporated in Ohio, you have all these restrictive conditions on what we can do. Today, we take limited liability for granted but many states didn’t allow for limited liability at the time. Shareholders could be on the hook for a corporation’s debts above and beyond their initial investment. Some savvy, you could call them savvy states, like New Jersey recognized an untapped revenue potential. They said, we can actually offer you a much more liberal charter, you’ll get limited liability, you won’t have any regulatory restrictions in the charter. So for example, the charter in the 19th century was often used as a quasi antitrust instrument. Businesses couldn’t engage in certain types of competitive activity without running afoul of their charter. New Jersey said: forget that, you’ll have a broad permissive charter. Come re-incorporate in New Jersey, pay us a lump sum, and escape the regulatory obligations that you’re facing in Ohio, or Pennsylvania or somewhere else. So you’re right, this is very much a condition of monetary scarcity at the state level. States aren’t monetary sovereigns, so they had to figure out other ways of raising money. This meant sometimes undertaking very socially destructive activities and the state rivalry kind of set the stage for the modern corporation, where states have this very attractive bundle of privileges without any corresponding responsibilities.

Scott Ferguson:  I think from here, I’d like to circle back to the history that you outline, and have you talk a little bit more about what happens in the New Deal. I mean, one of the things that I guess I shouldn’t have been surprised, but I guess I was slightly surprised by, is how intense the contestation was around power and the public provisioning of power, throughout the New Deal. I mean, at no point in your story, is it “Ah, we did it, and this was a good idea,” right? I mean, for some people, right? But I mean, the skullduggery continues, and you actually have some pretty amazing stories about campaigns of the private power industry, moving into schools and community centers and producing all kinds of propaganda and fake telegrams, staging some kind of totally false populist support of private power. But anyway, if you can just take us into some of the major events that happen around the New Deal, that’d be really helpful.

Sandeep Vaheesan:  Yeah, so I should start by saying, in the 1920s, private power was fairly close to hegemonic power, probably the single most powerful industry in the United States. But they were aware of the threats. They were aware of the threats of stronger public regulation, of greater public ownership, and really pulled out all the stops to prevent the growth of the Public Power Movement. The FTC did a great study that looked at some of the propaganda campaigns and tricks that they undertook and concluded that there had never been a propaganda campaign, outside of governments in wartime on par with what private power undertook in the 1920s. That was a paraphrase not a verbatim quote, but yeah, it was a full court press to contain and ultimately defeat public power. But they were successful, in part because the crash happened in 1929. And the United States entered the Great Depression. And these over leveraged holding companies that dominated the power industry, many of them collapsed. Debt’s great during boom times, but becomes a profound source of vulnerability when things go south. So a number of these holding companies went bankrupt. Famously, Samuel Insull’s holding company group, Middle West Utilities, went under. So the crisis created this new opening. Private power, in a sense, had been dethroned. The men who are the top of American industry were now in disgrace, and Roosevelt ran in part on reforming the power sector. He gave this nice, rather scholarly speech in Portland in September of 1932. He took office in March of 1933, and immediately started reforming the power sector. So one of the laws passed during his 100 days was the Tennessee Valley Authority Act, which creates a federal corporation to build and operate multipurpose dams on the Tennessee River and its tributaries. By multipurpose dams, I mean dams that were built to do multiple things, including control floods, support navigation, and then, of course, generate electricity. So the TVA is set up in the first 100 days, not just to build dams, but is also given the power to really serve as a regional development agency. So at that time, the Tennessee Valley was one of the poorest parts of the country. So there’s a real belief that absent strong federal investment and federal reform, this backwardness would persist over time. Ultimately, the TVA was much more of a power company than a Regional Development Agency, but there were these competing visions for the TVA from its inception. The government replicates this in one form or another across most of the country. Dams are built in the Pacific Northwest, Congress funds the construction of the Bonneville Dam near Portland, and then the much larger Grand Coulee Dam in eastern Washington, you see similar dams on the Sacramento River. The government undertook a dam construction program that probably hasn’t been matched anywhere else, maybe in China in recent times. But it really was an extraordinary program of public investment. One of the aims was to generate large quantities of low cost electricity that would serve both cities and then also people living in the countryside. That was really the first pillar of the New Deal Power Program. The second pillar was rural electrification. As we discussed earlier, only about one in ten farmers had electricity in the early 1930s. This was seen as a social, political and economic problem. By the 30s, there was a recognition that unless the government steps in and either directly builds lines to serve farmers or funds the construction of lines to serve farmers, this isn’t going to happen. Private capital is moving too slowly. We can’t wait another 50 years, 100 years to electrify the countryside. The New Dealers set up an agency called a Rural Electrification Administration to serve as a lending agency. They were given the power to offer low cost, long term loans to rural electrification projects. So that’s the second component. The third component is reforming the holding companies. This was probably one of the fiercest fights of the 1930s. So in early 1935, the Public Utility Holding Company Act was introduced in Congress, and this bill proposes to regulate and break up the holding companies that dominated the industry at the time. So we should think of holding companies really as creatures of the financial sector, devices meant to concentrate control in the hands of a few well connected financiers and promoters. Congress set about reforming these corporate behemoths, breaking them up, making them more conducive to state and local regulation. FDR was determined to break up the holding companies. He actually talked about it in the State of the Union address in 1935. But the fight wasn’t easy. It took almost six months to get this law through. Ultimately, it wasn’t quite what he or the biggest opponents of the holding companies wanted, but they passed PUHCA, Public Utility Holding Company Act, in August of 1935, charged the SEC with both breaking up these holding companies. Some of these holding companies, from a strictly operational perspective, made absolutely no sense. They would have a few utility systems in New England, a few in Florida, a few on the West Coast. There was no engineering rationale for this system of organizations. So Congress told the SEC, break up these non-integrated systems and tightly regulate them going forward to prevent some of the financial chicanery that had happened in the 1920s. So it’s really a three part program of public provisioning, low cost credit for rural electrification, and much tighter and stronger regulation of private power. The New Dealers, they didn’t really go all in on public power, but they expanded it qualitatively with respect to where it was previously.

Scott Ferguson:  Can you talk about the rise of cooperatives during this time?

Sandeep Vaheesan:  Sure. So Congress creates the Rural Electrification Administration, and the REA, at first, doesn’t know how to go about electrifying the countryside. They’re actually quite open to the idea of giving low cost credit to private power to build rural distribution systems. But they quickly realize, okay, there’s no appetite here. They’re going to borrow a lot of money to provide service to relatively few people. Then they turn to public agencies, they look at municipal utilities and talk with them and gauge their interest and realize, okay, they want to serve their cities, and in many cases don’t actually have the legal power to build rural lines. So they have charters saying you will only serve the city of Los Angeles, for example. And so they’re forced to look to this new, relatively new institutional form, the Rural Electric Cooperative. At the time, the mid 1930s, there might have been 10 or 20 Rural Electric Cooperatives in the entire country. So this was a largely untested form of business enterprise. The REA realized, though, we can either look to the cooperative, fund cooperatives, or electrification is not going to happen. There’s a lot of skepticism at first about Rural Electric Cooperatives. Yes, cooperatives have a long history in the United States, especially in the Midwest and the South. You have a lot of food and agricultural cooperatives that do things like collectively market livestock, collectively, market grains, in some cases, even engage in collective manufacturing. Some of the familiar brands at the grocery store like Land O’Lakes and Sunkist, they’re actually cooperatives. Agricultural cooperatives were a thing, but electric cooperatives were largely unknown and unproven. You had people asking themselves, can we actually trust a group of farmers to build and operate power systems? This requires real skill to construct, real skill and knowledge to maintain. This seems questionable, how are we going to get it done? So what ends up happening is the REA, which was originally set up to be a lending agency, becomes not just a lender, but a technical assistant. They realize they actually have to supply a lot of the technical engineering know how if these electric cooperatives are going to be successful. So they went about providing really essential service for these early electric cooperatives. I’ll highlight two things they did. This goes back to the money question. Congress, in setting up the REA, explicitly said it will not award grants. The REA could only award loans to quote unquote “self-liquidating projects”. By self-liquidating I mean projects that will generate enough revenue over time to repay the REA on the original terms. Rural electrification would have to be done in the sense on a profitable basis. There would need to be enough money to repay principal and interest to the REA. So the REA has this public mandate to help electrify the countryside, but then also has, in a sense, a banker mandate to only extend credit that can be repaid. So the REA realizes, okay, we can’t just indiscriminately extend credit because a lot of these projects are not going to be successful. Congress has charged us with only funding self-liquidating projects, that limits our latitude. But in a sense, it forced them to be creative. So they do two things. First, they identify uses of electricity in country homes and in farms. They figured out ways that farming operations can be electrified, they identify new uses of power and farm homes, and they actually organize a traveling tour to show farmers and their families how they can use electricity. It was called a “big tent”, it traveled throughout the South and the Midwest demonstrating use of power. This is was very much with an eye toward selling enough power to repay the loans. It was motivated by conventional financial considerations. So that’s one thing they did. Second, they also realized power systems are costly to build. Building lines, at the time private power had said we’ll have to spend anywhere from $1000 to $2,000 per mile of line extension. From their view, the numbers just didn’t work. They would spend a lot of money up front and over time not sell enough power to make the undertaking worthwhile. REA recognizes okay, there are probably ways we can make line construction and line designs more effective. So they actually work with manufacturers to figure out ways to reduce the cost of line construction. For instance, they said okay, if we use certain materials for wires and poles, we don’t have to place the pole so closely together, we can save money on wooden poles. Secondly, they determined that the line designs used by private power were often too ornate and complicated. So they develop simpler line designs that would save money. By the late 1930s, REA funded projects were building lines in some places for as little as $400 a mile. So substantially less than what private power had said just a few years earlier. The REA funds, and helps set up these rural electric cooperatives, ultimately sets up close to 1000 electric cooperatives, principally in the Midwest and the South. If you look at a map in 1935, I mentioned about one in ten farmers had electricity, but there’s a lot of regional variation. On the west coast in California and Washington, about one and two farmers had electricity. By contrast, in the South and Mississippi, I think the number was something like one and fifty or one in one hundred. So the role of the need for electrification was a lot more acute in the South and to a lesser degree the Midwest than it was in the northeast and the west coast. A lot of money through the REA is flowing into the Midwest and the South. It’s really this development project, if you step back from it, a lot of low cost credit going into these areas. By the mid 1950s, you had rural electrification rates of 9 in 10. Nationally, even in places like Mississippi are up to about 85%. It’s worth remembering this whole project was interrupted by World War Two. Starting in 1941, the government put a hold on most civilian investment projects to divert resources into directly fighting the war, and then also supporting the war effort of the allies. Between ’41 and ’45, there’s not a lot of rural electrification going on. The project is put on hold, and then really picks up after the war. Within about 10 years, from 1945 to 1955, we went from 50% to 90% of farmers having electricity. It’s a really dramatic change. Not only getting power, but there’s a substantial improvement in their living standards. They now have indoor plumbing, they have indoor toilets, they have refrigerators. Life in the American countryside was transformed. Having grown up in a period of what I think of as neoliberal stagnation, it’s really hard to imagine both the depth and the breadth of change that happened in the United States. There was also a similar, if not quite as significant change in cities with electric modernization, and we can talk a little bit more about that.

Billy Saas:  So what will it take? It’s hard to fathom… Yeah, I agree. The scale of action and the kind of sense of determination that you just outlined there. But you’d have some ideas in the “Promise” portion of the book toward the end. Yeah, what do you think needs to happen? What are the conditions you think need to be in place? Are they in place? And then where do you find the most promise moving forward for a green transition, a just green transition and a democratic green transition?

Sandeep Vaheesan:  There’s a lot that needs to happen. I think there’s at least one half of the political spectrum, a recognition that climate change is a serious problem that requires national and preferably international action. But, the United States is still the second largest contributor to annual greenhouse gas emissions. If you look at greenhouse gas emissions since 1850, the United States is the largest contributor to that stock of gasses in the atmosphere. The US can do a lot. But should ideally do it in concert with other countries. I think that’s the good news. I think the bad news is, there’s still a common assumption, you see it a lot in kind of centrist central left climate spaces, that this is just a technical problem. We need to improve the efficiency of wind turbines, we need to develop new energy storage technologies. I certainly don’t mean to minimize any of those challenges. They’re important. We’ve made a lot of progress, but there’s a lot of progress that remains. But I think simply reducing it to a techno-scientific question doesn’t do justice to the problem, because it’s also a political economic problem of who’s causing it or who’s disproportionately causing it? Who’s bearing the burdens within the United States, then, of course, around the world? Who’s making the decisions? There are many potential paths to a zero carbon future, some of which are much more just and equitable than others. Who is making those choices? Right now, the bulk of those choices are made by executives at utilities, executives in oil and gas companies, of course, Wall Street.

Billy Saas:  So those executives have to refer to their investors in their fiduciary responsibility, and there’s this perverse… Ultimately, accountability is just completely displaced.

Sandeep Vaheesan:  It’s completely displaced, right. We can have a green transition that’s very oligarchic. So far, I think that’s the path we’re on. I mean, look at the tech companies. They have positioned themselves to lead the transition. Google, Amazon, Facebook, use a lot of energy, have data centers scattered across the country, and they’ve gone to renewable energy developers, Amazon’s now talking to nuclear power developers, as well, and saying, we’re willing to purchase this power using long term power purchase agreements. It certainly has benefits, they’re helping decarbonize, but they are doing this in a way that’s best for them. They are not consulting the public. They are not doing this based on some broader social or public imperative. They’re doing this based on their private considerations. So as of now, I think we are on a trajectory of both insufficient decarbonisation. The IRA is not going to get us to where we need to be. And then a transition that’s fundamentally unjust. In some ways, even if we’re successful, even if the energy modelers understated the benefits of the IRA, we’re going to be in a place where our oligarchic arrangements are still largely intact, which should alarm everyone. We don’t want to perpetuate poverty, precarity, and inequality and then simply just strip out the carbon. Yes, decarbonisation is necessary, but it’s not sufficient. So we need to be thinking about the political economic aspect of our power system and really our broader society. My book is just focused on power, but we could have similar discussions around housing and transportation, just to name a few other examples. To qualify that pessimism a little bit, I think there are some early signs that people are starting to recognize that we need to pick a different path with the fact that the Green New Deal drew so much attention is positive. There are organizers and advocates on the ground across the country doing really critical community outreach, developing ideas, plans based on small-d democratic input. But that local energy and activism, in my view, needs to be paired with a national program. That the federal government is not just a monetary sovereign, it is kind of the singular monetary sovereign in the entire world. We need to be putting that special power to use, instead of using the monetary privilege to fund the military industrial complex, we should be using it to decarbonize and build a democratic economy.

Scott Ferguson:  One of the rhetorical tropes that disgusts me so much that comes out of this kind of oligarchic transition language is, as you suggested, it’s really a technical problem. We need R&D in order to solve the technical problem. What the technical problem will do is bring down costs, right? It’ll make it more affordable, right? But this takes so much for granted. Right? From a public, endogenous, MMT point of view, that’s and that’s a nonsense justification. I guess, before we go, I’d like to have you stipulate some of the details that you outline in your book for moving forward. You have all kinds of ideas about board representation and composition, grants rather than relying on the kind of punitive loan structure that hindered rural electrification during the New Deal. Can you walk us through some of the nitty gritty of how you imagine a democratic just transition?

Billy Saas:  We can leave some mystery. What do you feel are the most critical components of your solution?

Sandeep Vaheesan:  Yeah, so as a lawyer, I’m probably inclined to overstate the importance of law, but institutional details matter. New Deal public and cooperative power has often fallen short because they got institutional details wrong, or they simply didn’t consider the institutional details.

Scott Ferguson:  Or they were racists.

Sandeep Vaheesan:  Or they were racists. Yeah, that’s another important reason. So if we want democratic power, good governance has to be in a sense hard coded. We need to establish a certain baseline around regular elections, on public participation in utility decision making, limits on boards and managers discretion. We don’t want public power to have the freedom to invest in coal power. So the institutional details matter a lot. To offer a partial defense of the New Dealers, I do think they were doing this all very quickly under a great deal of stress and opposition from not just private power, but just reactionary interests in general. That, I think, explains, in part, some of the institutional neglect that happened. For example, why are electrification laws in this country so sparse? Why don’t they require, for example, annual elections? Why is that left up to the board’s discretion? My view is they were just trying to get these institutions up and running, they didn’t necessarily think about long term governance. They wanted to get electricity to the countryside, and they wanted to do it fast enough that private power couldn’t crush the Rural Electric Cooperative babies in the cradle. Not an entire defense, but a partial dependence. But now we’ve learned. We have almost 100 years of experience. We have to think more about the legal architecture this time around. That’s critical. Second, returning to the topic of monetary sovereignty. The New Deal Power Program reflected the monetary conservatism of Roosevelt and many of his allies. Jakob Feinig has an excellent book about this very topic, Moral Economies of Money. That austerity mindset is one of the legacies of the New Deal. It has some good legacies, but also has other bad legacies. Obviously racism, but then also the notion of austerity, the idea that money is scarce for a monetary sovereign like the federal government. We have to overcome that. Especially in recent years, debt has really impeded both autonomy and democratic governance in many of these Rural Electric Cooperatives. They have substantial loans that they have to repay to the federal government, so their boards and managers are always just thinking about how do we sell more power, we have debt to service. Maybe we should try to attract a Google data center to our service territory. That’ll increase our revenue 10% annually going forward. That’s a function of debt financing. This time around, we should unabashedly, proudly embrace grant financing. If we have the technical means to do something, we can afford it. I don’t know who said that. But I often think about that line. So money is not the constraint here.

Billy Saas:  Keynes.

Sandeep Vaheesan:  Was it? Keynes, okay. The master himself. And you see that logic at work. There’s never a lack of money for defense spending. Nobody ever talks about deficits when it comes to the annual defense budget. But when it comes to spending on good things, it’s like, well, what about the deficit? We need to confidently reject that and those of us on the left should be willing to energetically make the case for public spending for the public good.

Billy Saas:  I think it’s a great place to end it. Sandeep Vaheesan, thank you so much for joining us on Money on the Left.

Sandeep Vaheesan:  It’s been my pleasure. Great time chatting with you both.

* Thanks to the Money on the Left production team: William Saas (audio editor), Mike Lewis (transcription), & Robert Rusch (graphic art)

Money on the Left is joined by Dr. Chris Martin to discuss Modern Monetary Theory’s vital importance for the struggle to provide adequate housing for all. A Senior Research Fellow at the City Futures Research Centre at the University of New South Wales, Martin is a long-time tenant’s rights advocate in Australia with scholarly training in law and heterodox political economy. He is closely familiar with the rhetorical machinations–or “contrivances,” as he calls them–that attenuate the effectiveness of national housing policy in Australia and beyond. In 2023, Martin and his team of co-authors (including Julie Lawsome, Vivienne Milligan, Chris Hartley, Hal Paswon, and Jago Dodson) published a report that argued the government can and should provide adequate housing for everyone in Australia. Titled “Towards an Australian Housing and Homelessness Strategy: Understanding National Approaches in Contemporary Policy,” the report makes several noteworthy contributions to housing-for-all discourse, including figuring social housing as an integral part of a nation’s infrastructure. We speak with Martin about this report and its reception in Australian housing policy debates. We also ruminate about what housing-for-all movements in Australia, the US, and across the world stand to learn from each other. 

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

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

Scott Ferguson:  Chris Martin, welcome to Money on the Left.

Chris Martin:  Good day, Scott. Good day, Billy.

Scott Ferguson:  We’ve invited you onto our show to talk to us primarily about this co-authored report that you published, along with many co authors, titled “Towards an Australian Housing and Homelessness Strategy”, in which among many things, you offer a strategy to address the multifaceted crises of homelessness through a public money, or MMT lens or framework. Before we get started in our discussion about this report, I was wondering if you could tell our audience a little bit about yourself, about your background, about your training, about your professional work and what brought you to this topic?

Chris Martin:  Well, I’m coming to you today from my home in Dharawal country. I’m in the southern edge of Sydney, New South Wales, Australia. The Dharawal are the traditional owners of this part of the world. So I pay my respects to that community who never ceded the property here and never ceded their sovereignty, like other indigenous people throughout Australia who have never ceded their sovereignty or property. At the other end of Dharawal country, I grew up in a town a couple of hours down the coast from Sydney, where my parents owned our house, and it was a comfortable, unremarkable upbringing. I came to Sydney after high school to study a law degree at University and also a political economy degree. Coming out of that I had a bit of an exposure to heterodox economics. That’s a slightly notorious degree, the Sydney Uni political economy degree. Occasionally, you find other people who have done it, and you give them the secret handshake. Through that degree, and through my law degree, I was getting interested in housing. Also having moved to Sydney and I just had a couple of housing scrapes and lived in crummy houses as people do. That becomes a bit of a dinner party story, but I was also conscious that there’s a bit of survivor bias in that. There’d be young people who experience crummy housing and move out of home who don’t want to talk about it at dinner parties or who aren’t getting invited to the dinner parties. So I was getting interested in housing, and after law, my first proper job after uni was as a tenant advocate. I’ll tell you a bit more about this particular sector of tenant advice and advocacy services that we have in New South Wales. I was a tenant advocate at a local tenants advice service in Sydney. I was representing tenants in the tribunal and giving them advice. After a couple of years, I went to the tenants union of New South Wales, which is the peak tenant organization for the state. I was their policy and law reform officer for 13 years. It was in that time that I did my PhD which led to the academic job I have now, but also that’s where I was starting to reread again political economy and particularly after the Global Financial Crisis (GFC) and started looking again for a framework that cohered and put some of those little bits of heterodox thinking and literature that I picked up along the way and made it cohere. It was in that early 2010s blogosphere space that I found I was reading New Economic Perspectives. There was Bill Mitchell’s blog, so I started to read about modern money, and that’s when so many of those little bits that I picked up along the way from uni and other places started to cohere. This conception of money as a system of credit that is governed by states, and can be governed for democratic, public good purposes. I was at the tenants union when I was starting to frame some of my advocacy around this. Then, subsequently nine years ago, I got my current appointment at the University of New South Wales at the City Futures Research Centre. I continue to work on researching housing and advocating for housing reform that does justice, particularly for people who don’t own their housing, particularly for renters.

Billy Saas:  So you came to heterodox economics before the GFC. Any recollection of sort of what drew you to that esoteric direction?

Chris Martin:  That was a bit of a fluke, really.iI hadn’t done economics in high school, so I didn’t have the prerequisites to get into the standard economics courses at university. So, I did the Political Economy course as part of this combined degree with law, which is what you do in Australia. If you do a law degree, you do another degree. It was a little bit of a fluke, but it was an introduction to things like social surplus approaches to economics and we had some of the proper Keynesian and post Keynesian lectures, as well as some, some Marxism and Neo Marxism and monopoly studies and things like that training. I majored in things that were to the side, I majored in urban history. I was getting into housing, in that respect, but I came out of that without a really complete or coherent worldview or operating system for economics, and sort of had a an idea of the intellectual history and the different ways in which economic problems had been thought of over time and the different configurations or problematization of economics that has a way of thinking about the progress of policy in different areas, including in housing. But in terms of having something that was a more connected and coherent scheme for understanding the contemporary economy and for proposing reforms. It was really through reading those blogs and also the research literature around that, and particularly around modern money, and some of the fellow travelers as well. So I remember after the GFC, I needed to read about Keynes, and there was hardly anything on the shelves at that point. And I ended up with Robert Skidelsky’s biography and read that instead. So, I think just in terms of the proponents of modern money and also those other nearby neighboring voices or fellow travelers, if you like, like another Australian, Steve Keen, was quite a prominent commentator and helped get a more critical public discussion going around economics and money. The level of the public conversation is a lot better than where it was pre GFC.

Billy Saas:  If you’d gone the economics route, you would have probably learned lots about macro and micro, but you took political economy. It sounds like with the heterodox-specific education, you learned how to sharpen your knives a bit. I feel like a lot of the heterodox econ literature and pedagogy is oriented toward a critique of the mainstream. So if nothing else that helps you to become more skeptical and a better critic. I think, to that extent, it’s no surprise that when you find the Billy blog, I think it was called at the time, alongside New Economic Perspectives, that you have an openness to it.

Scott Ferguson:  My question is about the reception of your work in your field. I see that you collaborate with all kinds of people, whether directly or through convening interviews and surveys. I’m curious, because I think a lot of us run up against real barriers in our own disciplines and areas, either full-on hostility, or a kind of “I don’t know what you’re talking about. It’s weird to me, and I really don’t want to have any part of it.” But it seems like you’ve made some friends. I’m curious to hear about how that process has gone for you?

Chris Martin:  Sure. Well, I think we’re now talking about this report that came out last year “Towards an Australian Housing and Homelessness Strategy” report. That’s a report that some colleagues and I wrote, which was commissioned by an agency called the Australian Housing and Urban Research Institute, and they fund a lot of housing research in Australia. I think it’s safe to say that the first AHUR report to mention modern money. I’d slipped a few of the ideas into some previous AHUR reports on social housing as infrastructure. That was a report talking about the value of investing in social housing, and in particular this, it was a little bit of a rhetorical idea at that time. Can we frame it as infrastructure? Governments love infrastructure. Can we frame social housing as a type of infrastructure? So that was also a prior piece of research in which I got to rehearse the modern money stuff without speaking its name. But yeah, you’re right. There is still a disreputable quality about it, which is unfortunate, but I think the fact that my five colleagues on this were prepared to tolerate my modern money speculations in this report says something about the the preparedness of researchers and hopefully of policy makers, because that’s a big constituency for research like this, to rethink the conventional wisdom about money and finance. To be a little more open about the Rethinking because we’ve seen so many instances of this rethinking and a reform of practice happen, particularly in response to the COVID shock, particularly that early period of lockdowns and the income shock that followed. Some really quite extraordinary government operations around money and supporting, on the one hand the incomes of households, but also supporting the wealth, the assets of financial institutions in that shock. That involved a big and quick rethinking and re practice, reform of money by a government. So it does happen, and I think we can, as researchers, and as advocates for housing policy reform, we can help inform a redirection of governments as they rediscover their power in relation to public finance, to be productive and that advance housing justice in particular. I’m thinking back to when I worked for the tenants union, so in the non government sector, in the community sector, where you’re making proposals to the government for policy reform, in particular, for housing policy reform. This will be familiar to American listeners. Like the US, our the Australian public housing sector, the social housing sector, is this tiny residualized sector of housing that used to be bigger and accommodate a bigger market share, the biggest share of the housing sector, and housed more people and was for more people a basis for them getting into homeownership, in many cases, but also for having a stable place where they put down roots and flourished a bit. That’s been residualized, minimized, and so few people realize the benefits of social housing now. So investment in social housing, getting our social housing sector growing again. I say social housing, to clarify, in Australia, we talk about social housing being the umbrella term for public housing, which is the state owned, and managed rental housing stock. We’ve also got this sector of community housing, which is owned by non government organizations that provide on a fairly similar basis, which is affordable rental housing for low income people. Those two things together are social housing. So we need to get our social housing stock growing in line with community needs for affordable housing. It’s been on a starvation ration for decades. The advocacy for it is all about the government being prepared to spend to build the houses and also to subsidize the ongoing rental operation of those houses so they continue to provide a decent standard accommodation for people on low incomes, if their ability to pay falls short of what it costs to run the system. Those two big basic claims for housing reform in Australia: capital grants to grow our social housing stock and to properly backdoor social housing providers that their operating costs will be met. That’s been the mainstay of housing advocacy and you have to make this proposition for governments to spend again on social housing. Too often, there’s been this feeling that we need to balance the budget in order to do that, and how are we going to pay for it? That’s been the constant refrain that I’ve heard from tenants union days and through to today. Policymakers or politicians, how are we going to pay for it? The simple answer to that is that it gets paid for by government spending. Modern Money is a useful framework for backing up the claim that you can just decide to pay for this. On the other hand, there are aspects of housing policy that also don’t involve government spending. I think modern money also helps us think through these other aspects of housing policy and in particular, how governments can shape or intervene for the public good. I’m thinking in particular of housing finance. Although our social housing sector is starved of money, other parts of our housing system, the problem is, to put it boldly, too much money. There’s too much money being borrowed and thrown by households, principally at bad housing. We should be talking about the taxation of housing. But not in this, how do we pay for what we want to spend on social housing. But instead to think about taxation of housing in a way that shapes behavior and how do we get the sort of behavior outcomes that we want from a public policy perspective? So less speculative borrowing and spending on housing as an asset to hoard. And how do we get more…well, there might be more opportunities for first-time buyers relative to households already wealthy in housing, advancing their position, buying more housing, as rent goes up. How do we shape our housing investment settings to bring on the new housing supply that we need? The additional housing being built, that a population like Australia’s needs, which grows every year. So I think modern money helps us also think through those other aspects of housing policy that aren’t about government spending, are in fact about governments either taxing or about the way they regulate the provision of credit for investment in housing.

Scott Ferguson:  This is something I really appreciated about the work of yours that I’ve been reading recently in preparation for discussion today is that you and your co authors are very attentive to not just problems that need fixing and that fixing requires public money to be spent. But the problems are multifaceted, cut across different categories and domains, and very often it’s the legal construction of the monetary system in the private sector which is creating all kinds of negative feedback loops with the public sector and vice versa. I sense in your analysis, what sometimes in the MMT world we think of as being a consolidated balance sheet or a consolidated fiscal analysis in which it’s all part of the same system is just a question, how is that system designed? And what kinds of pro social effects are there? And what kinds of perverse effects are there, and how are those things related to one another?

Chris Martin:  The report that we’re talking about, this particular piece of work that we’re talking about is titled, “Towards an Australian Housing and Homelessness Strategy: Understanding National Approaches”. This has been a bit of a theme for our current federal government here in Australia. We had a change in government two years ago, and a new government, led by Anthony Albanese, and his labour party, came to power and they promised a national housing and homelessness plan. We were in the process of doing this research when the Albanese government came to office, and made this commitment to a national housing homelessness plan. There is a commitment, at least, by the government to having this more strategic approach where previously Australia, we actually haven’t had a national strategy as regards housing. As we detail in the report, the way housing strategy gets done, it’s really fragmented by different government agencies, and working in their own spheres, across different levels of government. Like the US, we’re a federation. States and territories in Australia have constitutional responsibilities in relation to housing, as well. As you say Scott, that makes it a complex field for policy making. Despite that complexity, we have lacked an overarching strategy for bringing it all together. One of the areas that I think we should be thinking of as housing policymaking and an institution of housing policy, are our financial regulators. They make housing policy, they conduct housing policy, I’m talking about our reserve bank, the Reserve Bank of Australia, and the Australian Prudential Regulatory Authority, which is the supervisory institution that regulates banks from a financial stability perspective. Those two institutions wouldn’t call it a housing policy, but they run a housing policy and they are independent. Those two institutions insist on their independence and the government of the day always says they’re independent institutions, despite them being established by an act of parliament, and ultimately they should be regarded as part of the array of institutions that a democracy operates through, and governs through. They run a housing policy. In particular, before the COVID financial crisis, we had a situation where, coming in the years after the GFC, we had quite a boom in Australia, especially in investment in apartments. We had lots of apartment buildings and we had lots of people borrowing to spend on apartments, particularly as landlords. We had government reviews into the financial stability concerns that this boom in apartment investment was posing risks to financial stability according to the reviewers. From the late 20-teens APRA introduced macro prudential tools that, for the first time in decades, effectively discriminated between borrowers for owner occupied housing and borrowers for investors and had the effect of increasing interest rates for investors. Also decreasing competition amongst our banks for housing investment. The RBA also took care to say that it wasn’t targeting housing prices, but it did say that it was concerned about housing prices. Its monetary policy was setting interest rates at a higher level than other circumstances might have indicated in its usual ways of thinking because it had a concern that our house price growth was threatening the effectiveness of monetary policy responses. That if house prices kept growing the way they did, then the RBA’s ability to fine tune the economy through interest rate adjustments would be put at risk because the tuning wouldn’t be fine. If the debt got too big, there would be a risk of trying to fine tune and you’re getting this outsized response. So that was the RBA thinking. But all of these things operate through housing markets and housing costs. It’s a housing policy. It’s something that isn’t governed and isn’t part of a coherent national strategy. We were making the case for exactly that: a coherent national strategy around housing and homelessness. The current government is preparing what it calls its national housing and homelessness plan. All of the indications so far from the consultation exercises that have run, the issues paper that it put out. All of those indicators are that it’s shaping up to be a very, very narrow plan. A plan that doesn’t encompass all of these diverse areas of policy. We had an issue paper that didn’t mention tax, and it didn’t mention finance. It says that’s not the coherent, ambitious strategy that Australia needs to tackle its housing problems. We’ve now got, coming out of that report, a bit of activism taking place around trying to promote the idea of legislating a basis and a requirement for a national housing plan. We’re calling on parliamentarians, calling on the government in the first place, but other parliamentarians, to legislate for a national housing plan. To have a to require that the government of the day will have a plan, and that it will be a plan that meets certain broad objectives. That has, as its overarching objective, the realization of the human right to housing that everyone should have adequate housing. We’re proposing institutional arrangements for informing that plan and keeping the government of the day accountable to that plan. That piece of legislation, that framework we’re proposing doesn’t run on modern money. But I think you can legislate for a national housing plan without subscribing to the modern money view of the world. I think it’s a way of setting up for the government a much more ambitious and ultimately effective housing policy, a housing and homelessness strategy that encompasses all of the policy areas touched by housing. I think that sort of ambition in public policy is something that the conversation about modern money is also helping to support. It’s another way of encouraging governments to be properly seized of their power to marshal financial resources and real resources in the economy to to create public goods and public projects for positive ends.

Billy Saas:  Another thing that modern money theory can do for anyone who investigates it is to help you to come into contact with the question of, do the politicians, do the legislators know this stuff and act as if they don’t? Or do they not? Is it ignorance or is it evil? I know that you’re invested in ongoing policy-crafting deliberation. But it’s hard not to, from my perspective in the US, look at decisions that are made around significant social issues and conclude that even if they did recognize that we could pay for it, that it wasn’t about balancing the budget, that there are interests that are invested in keeping it just so. Keeping things the way they are. What’s your read of the situation politically, economically, in Australia, in terms of the odds of this activist-initiated push for a more coherent national housing and homelessness strategy being taken up? Or are the forces arrayed against it in terms of people who are invested in the system as it is so entrenched that they might be an obstacle to overcome?

Chris Martin:  It’s tricky. So in briefing MPs on the need for a national housing and homelessness plan, and to be ambitious about it, we do encounter a lot of MPs and their policy makers who I think are really on board. That we’ve got big problems in our housing system. Housing policy has been in the media and in the public discussion in a way that hasn’t been just over the last few years in Australia as house prices really took off after the pandemic, but in particular, there’s been a welcome focus on our problems in the in the rental sector where we’ve had extraordinarily rapid and large rate increases in Australia over the last couple of years. Also, there’s a real sense of people missing out on, despairing of the opportunities and the sort of choices that previous generations had in relation to housing. I think that is really quite keenly felt amongst MPs and policymakers. When it comes to questions about growing the social housing sector again, that is also something that I think we’ve made important ground on the necessity of doing that. Unfortunately, we still get this question of how to pay for it and some weird contrivances, especially in housing. So I said we had this new government come to power two years ago. As well as proposing a national housing and homelessness plan, it also said it wanted to increase investment in social housing. Good. And it said that it will do so through the establishment of what’s called the Housing Australia Future Fund. Instead of just paying the housing authority or making available a system of grants to the community housing providers, the government instead established the Housing Australia Future Fund, which means not paying for housing, it means going out and buying a whole lot of financial assets, and the returns on these financial assets will be distributed to social housing providers to make good the operating deficit that I told you about earlier.

Scott Ferguson:  Government becomes the ultimate entrepreneur, speculator.

Billy Saas:  Government as well as property investor subjectivity.

Chris Martin:  Well, it’s not even buying houses, that’s the trouble. It’s going and buying a whole lot of shares and bonds and things. We’ve got a bit of practice doing it. It’s sort of that sovereign wealth model. We’ve got a bunch of these. That’s not the first one. We’ve got a bunch of future funds in Australia that have been set up by governments over time, that go and buy financial assets from various financial assets from the private sector, and the returns on those are dedicated to funding various purposes. It might be medical research, or it might be social housing subsidies, none of which should turn on the returns that particular financial assets are being realized in these funds. We’ve gotten that contrivance. It’s reflective of that continued thinking of, well, where do we get the money for this? Where do we get the money for these public projects like social housing? We have to get it from chaps in suits. Through investments in finance.

Billy Saas:  We have to earn it, right? It must be earned.

Chris Martin:  Instead, we could do without that contrivance and we could have a properly planned expenditure on state and territory housing authorities. We could go directly to community housing providers, and expenditure on properly assessed housing needs in different communities, in different parts of the country, for them to make their investments in housing and run their housing businesses. We could spend that money. Not to raise money for that purpose, but because we want different sorts of conduct happening in our housing system, we could be reforming our taxation arrangements, particularly around land value taxation. We’ve got land value taxes throughout Australia, but we exempt all owner occupiers and we also exempt a whole lot of landlords as well. We could have a different taxation, particularly of land, as a way of discouraging speculative hoarding of land, encouraging underutilized land to be brought to the market for development as housing, whether that’s as owner occupied housing or as, hopefully, social rental housing. We could have a properly considered policy around lending and credit conditions for different sorts of housing investment, whether they’re owner occupiers or people or firms who want to invest in rental housing. That’s the sort of thing that a wide-ranging housing policy would contemplate, and instead, at the moment, we’re still not talking properly about tax, not talking about finance, insisting that that’s an independent thing that we need to leave to the RBA to sort out itself. We get these weird contrivances around funding for social housing. We can and should be a lot more ambitious and clear on what governments can do. Just being a little optimistic about it. As we’ve mentioned in the report, there is some thinking around governments making big plans and the advocacy around a Green New Deal from a few years ago, I think, made gains in terms of government’s preparedness to think about big plans. I think the work that Mariana Mazzucato is doing on public investment missions or mission-oriented investment and mission-oriented public policy. That’s finding an audience amongst policymakers. The Australian treasurer has had meetings with Mariana Mazzucato, and she’s got quite a following. So there’s ways in. I do think politicians and policymakers are hearing and are interested in these calls for big plans, for missions, for governments being possessed with their ability to prosecute big projects for the public good, and increasingly to be possessed of their powers as the issuer of the currency, as well.

Scott Ferguson:  So I’d like us to jump into the report a little bit more. There’s all kinds of wide ranging analyses and consequences in this report. Maybe one place to start would be to get you to talk a little bit about the survey of other national homeless strategies, specifically from Canada and Finland, I believe, and Scotland. Did I get that right?

Chris Martin:  Yeah, one of my colleagues, Julie Lawson, she’s sort of Australia’s international, roving housing policy correspondent. She’s based in Europe, and this is very much a thing. Canada is an interesting case because, like the US and like Australia, it’s a Federation. So they also have this complexity in their governance of housing policy. Like Australia, its federal government had largely been absent from housing policies for some time, and it came back into housing policy a few years ago, in 2017, with a national housing strategy. So that was something we had a look at. There’s lessons for Australia and other countries from the Canadian experience, good and bad. I think that the good lesson is having a legislative basis for a housing strategy because that has put some obligations on the federal government and the housing minister to report on the progress of their strategy. It’s given out a profile that housing hasn’t previously had there. It has started to build up some institutions that can inform policy making in Canada in a way that hadn’t happened previously. The bad lesson is that too much of this strategy is narrowly focused. Again, it largely misses taxation and finance questions. It’s about the subsidies and operating arrangements of their affordable rental housing sector, largely. It has helped in restoring expiring subsidies to some of that sector, but it has ended up being quite a narrowly focused plan. That said, it’s on the agenda in a newly prominent way in Canada, and hopefully, some of those institutional foundations and the legislative requirement for a plan will mean that better, more ambitious, and more comprehensive plans are made in the future. And really, that’s where we’re at in Australia, as well. That’s why we’re advocating for a National Housing and Homelessness Plan Act that sets up some accountability and policy governance measures and sets up some new institutions that can keep informing government and improving its policy performance, as regards to housing, instead of leaving it to be this fragmented and ineffective business that it currently is. Looking further, Julie’s work shows, particularly a couple of European examples, where countries have gotten their housing systems in order, relatively, and have a coherent structure to their housing system, and to the delivery of subsidies to parts of the system that work for low and moderate income households, particularly rental households. Austria is a great example of that. They’ve such a long standing model of what’s called limited profit rental housing provision with a dedicated subsidy that funds the limited profit housing companies that build and operate rental housing there. Finland’s another example where there’s these long standing housing institutions, government institutions, that provide a consistent and coherent subsidized housing development pipeline. They have done that for a couple of decades. We mentioned Scotland in the report, too, because that’s an example of a country where there’s an unusually dedicated tradition of reviewing housing policies and criticizing housing performance. I know in the US there have been some moves to big plans around housing. I’ve picked up that there’s an expansion of the Low Income Housing Tax Credit that underpins affordable rental housing provision in the US. I understand, too, that a Renters Bill of Rights was on the agenda, as well. It does seem to be a time for making big plans in housing. I don’t think the US is any closer to having a coherent national strategy than Australia is.

Billy Saas:  No, we’re probably taking notes and offering our own contrivances. What do you regard as your most important contributions or innovations to developing for Australia, but then potentially a place like the US a coherent national housing strategy? What are the two takeaways that you would like policymakers to walk away ready to go tell their constituents about?

Chris Martin:  Okay, well I guess the main takeaway from that report is, we need a plan. Housing and homelessness are complex in that they’re issues that run across different policy areas, and across different levels of government. Housing affects everyone and touches people’s lives in a really basic way. It’s also a key dimension of our economies. I mean, it’s a $10 billion asset class as well as a fundamental human right. So it’s a complicated area in which to make policy and so you need a plan. The second point would be that we need to be ambitious about it. Let’s have at the center of it the right of everyone to have an adequate home. We can call that a mission, if you like, a mission for governments to ensure that everyone has an adequate home. There’ll be a bunch of subsidiary missions that governments need to prosecute, to make sure that core mission is achieved, as well. Just getting a coherent strategy, a coherent framework for all of the different policy reforms that are needed, whether that’s in funding social housing properly, or regulating properly the lending for housing investment by the private sector, or getting our taxation arrangements so that we have less inducement for people to hoard land unproductively and to instead bring land and housing to the market. Residential Tenancy law, my spectral subject, is something that needs more of a plan and more coordination than we’re currently seeing because in this moment of increased interest in housing policy and increased critical attention particularly on how renters are doing, how renters are suffering in the current circumstances. There’s been lots of interest by governments, state and country and also our federal government in reforming residential tenancy law, and it’s still a little bit all over the place at the moment. I can do a whole podcast on tenancy law, but talking about some of the similarities and parallels to what’s happening in the US, as well, where there seems to be a parallel in some rising activism and rising tenant movements that are demanding reform. Just from observing social media, that seems to be happening in the US and it’s happening here as well. Governments are making some movements to respond to that, but it lacks coordination. There are still problems with a real reform agenda in Australia. That’s another area of policymaking where we could just be getting our act together and being a lot more coordinated and really getting some crucial reforms implemented on the statute books.

Billy Saas:  I would submit that another one of your critical contributions you alluded to earlier, and that’s the contribution of the idea of social housing as infrastructure, right? Changing the conversation, shaping the conversation that way. In the report, you have a selection here it says: housing, or more specifically, social housing can justifiably be framed as infrastructure. That is an asset that generates a social good, not as a residual problem resulting from a malfunctioning system.” What I like about that is a couple of things. One, infrastructure, I think, is broadly an appealing term. It’s legible to multiple audiences as something that people could get excited about investing in. It’s not the conventional way of thinking about it. That’s a benefit fit, as well. But I think the other thing is that last part, not as a residual problem resulting from a malfunctioning system. There’s an agency there that I think gets lost in the chicanary that comes with it, the contrivances as you put it. These evermore complex solutions to a problem that is just there to solve. So I wonder if, alongside infrastructure, or do you agree that that is a critical contribution, an important, essential contribution to this report? And are there any other kinds of rhetorical innovations that you’re up to here or in other work where you feel like, if we do need to educate or re-educate folks on how the fiscal and financial systems work at the federal level, here’s one way that we could approach talking about things differently?

Chris Martin:  I have mixed feelings about social housing as infrastructure rhetoric. Not mixed feelings about that report, which is terrific, and everyone should read it. But it really was a rhetorical maneuver. Not just by us, I mean, we were responding to this maneuver that housing advocates, and to be honest, housing policymakers were themselves making. We’ve had this problem of social housing being on this starvation ration for years, but we do have social housing agencies, and we have social housing policymakers, and they do from time to time make the case to the central agencies, of the Treasury, for a greater investment in their business. They thought, all of these infrastructure agencies are the talk of the town, can we pitch ourselves as infrastructure as well? And so we had a bit of a wave of advocacy and research for that matter about thinking about housing more broadly as infrastructure and social housing as infrastructure. I think that’s productive, exercising in getting people to think through the myriad contributions that housing makes to living well, and for individuals and households and neighborhoods and cities and national economies. But on the other hand, getting housing on the infrastructure agenda was also a rhetorical maneuver. To be honest, infrastructure itself is a bit of a sticky wicket. That enthusiasm for infrastructure that governments embraced in the 2000s and afterwards 2010. That turn to infrastructure was also going to be privately financed and there were so many contrivances or the infrastructure investment supposedly for the public good that were really about a privately financed investment and shoring up returns to the private sector owners of these assets. So we’ve had a bit of an investigation and honestly it becomes a stumbling block, this idea that how do we get big financial institutions to invest in social housing? We don’t need them to. The answer should be the most straightforward one. Well, how do we, in the first place, assess the community’s need for a particular form of infrastructure or additional infrastructure in the form of housing or whatever it is? And how do we mobilize resources towards attending to that need, in the context of all of the other needs that communities have for the fixed capital assets that make life possible and more enjoyable? And not about how we get the chaps in suits to buy housing that is going to be rented at less than what they could otherwise get in the private market. So that’s why I have a mixed feeling about that rhetorical maneuver of how social housing is infrastructure. It may be that infrastructure as a policy area isn’t actually a whole lot more friendly to social housing policymakers. Getting on that agenda may not actually be a great alternative to simply making the case that this is something that governments should be investing more resources into, because it makes life better for so many people.

Scott Ferguson:  Some of your research has been into the constructions of subjectivity around the private speculating housing market. You shared with us this one really great article titled Clever Odysseus Narratives, and Strategies of Rental Property Investor Subjectivity in Australia, in which you look at this industry of seminars and books and social media accounts and websites, and analyze through a critical lens, but nevertheless, through the lens of Joseph Campbell’s monomyth of the hero’s journey, and I’m wondering if you could tell our listeners a little bit about your analysis and your conclusions.

Chris Martin:  Scott, this is probably as close as I’ll get to your area of expertise. So the genre of the property investment seminar. Yeah, that was a project that was a couple of years ago. It was part of a bigger project on who’s investing in rental housing. In that late 2010s apartment boom in Australia. We were investigating who’s investing, and I was looking at all of these property seminars and sources of advice for the individual investors. I’ll do quotes around investors because that’s a very conscious terminology that’s used here. Like the United States, Australia’s private rental sector is similar in size. A bit more than a quarter of the population rents privately. It’s mostly owned by other households by so-called mums and dads. The difference here being that it’s almost all owned by — you’ve got some significant sector of corporate landlords and corporate landlords have only just got a toehold in Australia recently. So our rental housing is almost entirely owned by the household sector, by mums and dads. They variously call themselves mums and dads or investors. They do not like being called landlords, although that’s what our Residential Tenancies Act calls them. A good thing too, because that word landlord, it’s a gift from our history, and we should cherish it, and not give it away. But as we’ve got this industry that produces a particular genre of property investment advice, I went to a bunch of these seminars and took it all in and identified this common theme, or trope, which makes this genre particularly legible to people. As you said, it very directly references the hero’s journey where you’re in the dreary workaday world. The way this genre talks about work is quite particular, as being this horrible slog that people go through, and you wouldn’t want to do it if you didn’t have to. So you, the investor, who seizes your opportunities and who develops your own capabilities, who chooses a sound mentor, the investment guru, who’s selling you the CDs, and the books and boot camps and all the rest of it? They’re the Obi Wan to your Luke Skywalker as you set off on your property investment journey. In a way, it’s a very legible text, and it’s a way of getting people to quickly switch on to what they’re selling in these seminars. So it’s flattering to think of yourself as this heroic figure who’s breaking out of the workaday world into financial freedom. Really, that’s the endpoint of the investment journey: you become financially free. You don’t have to work anymore and you create this legacy for your children. Not just the legacy of the rental properties that you might give to them as a beneficent, heroic hero, but also the lessons imparted about making your way in the world. As well as just this sort of flattering, heroic figure that people might like to identify with it. Those seminars offered particular ways of thinking about approaching rental investment and ideas about money, ideas about debt. There’s a real theme in these books and seminars and things around a rethinking, I think, of traditional caution about debt. They often use the figure of other people’s money. Which is interesting, because as I understand it, that particular phrase, other people’s money, was originally a bit of a caution against irresponsibility. But in these property investment seminars, you’re enjoined to use other people’s money. It’s other people’s money, and it’s there for you to use, and if you can grab it, and that is to say, borrow it, and accumulate housing assets, that’s you getting ahead. It also works to get past or to minimize, or to put down anxieties about debt, because it’s other people’s money, it’s not your money. That’s one. There is a rethinking of debt that goes on in these property seminars that I think is really interesting. The other figure, or way of thinking that keeps coming up is around thinking strategically, and having a strategy. I’m conscious that I’ve just been talking about the government having a strategy and being coherent about this, but the strategic thinking of the property seminar is a bit different. It’s about being attentive to how an investment properties’ rental income is going, and also its capital growth, encouraging you to be a very active participant in your investments. Not necessarily to do a whole lot of property flipping, but to be mindful of when the market has risen. That’s your opportunity not to flip the property, but to go back to the bank and refinance and set up a line of credit that becomes a deposit for your next property investment. So it’s attentive and ties into this rethinking and reorientation towards debt as something that you want to take on debt, it’s other people’s money, you want that and you want to keep working to expand and to grow your property empire. There is something significant going on in those seminars and books and they leak into mainstream media. In our mainstream media, a big part of their historic business model was real estate advertisements, and the real estate parts of the businesses are spun out and become even bigger than the media parts. But they still carry these little stories, these little vignettes about people who invested who have gone on the journey. They all talk about going on the journey. These ways of thinking spread.

Scott Ferguson:  You point out that there’s even somebody who got churned up and spat out and wrote about it from a critical point of view, but she, too, still tells it according to the framework of a journey.

Chris Martin:  Yeah, that’s right. She went on her own particular sort of journey. That’s the power of that framework, isn’t it? I read just a couple of weeks ago, another take on the property investment genre. I thought it was a terrific insight into how gendered it is. There’s another article out now about property investment texts, particularly for women, and instead of the hero’s journey, which is implicitly a masculine trope, instead, there’s this genre that uses the feminine trope of the makeover. So a financial makeover through rental property investment, so there is a gendered aspect to this as well. For aficionados of property investment genres, there is a gendered reading as well, which is around the makeover. In terms of how this spills ,they’re into a wider politics about money. In the property investment discourse, and outside of it, there’s this really cynical and disparaging take on work, which is interesting. But there is also a really bleak depiction of post-work life. So your life in retirement, if you don’t have rental property assets, is depicted as being very grim indeed. There’s a real disparagement of the pension in Australia. Our social security, we have a state social security system. This is an instance where we’ve dispensed with the contrivance that the United States has. We don’t have a notion of an insurance fund that pays the state pension here. It’s just paid out of the government. But the age pension is a big part of retirement incomes for people post-work. There is all this speculation in the property investment literature, and frankly, outside of it as well, about the future where the pension doesn’t exist, or governments will run out of money and they won’t be able to afford the pension. There’ll be too many old people, they won’t be able to afford the pension if you don’t have a rental property, you’re cactus. That’s something that people outside of the property investment literature also participate in that discourse, that the age pension it’s somehow unsustainable. Again, no, we should be saying pensions are great. The pension, a publicly paid pension, is the democratic way of ensuring that people who are no longer producing goods and services, how they get a decent share of society is production. That’s what state pensions do, and they’re good and they’re democratic, and they’re absolutely not unsustainable. So that’s another argument where modern money can hopefully help win the day.

Scott Ferguson:  Meanwhile, having a de facto macro housing policy that is predicated on a hero’s journey toward passive income is going to undercut the productivity of the society and eventually or in aggregate, undercut what any pension might be able to pay for.

Chris Martin:  Yeah, exactly. In this telling of the story as the population ages, we have this increasing body of post-work people to sustain. Yeah, the other part of the conventional story is, ah well, those working aged people who have to sustain this growing, non-working population, we’re going to have to tax them even more to pay for the incomes and the health care and everything for that older group. Again, no, what we should be saying in response is: now, what we really need to be doing is making the productivity enhancing investments, that means that the working group, that their efforts go so much further, and produce so much more. That means investing in productivity enhancing investments or assets or capital. And that means making investments and not taxing people.

Scott Ferguson:  I’ll ask one more question. We didn’t really get to speak much about the multi dimensional political vectors that this report takes up. It’s not taking up housing in a narrow sense, but it’s connecting the politics of housing to any number of political questions and problems and contestation. There’s a discussion of indigenous homelessness and indigenous politics, there are questions of disability, and health, incarceration, and also ecology and environmental justice. I was wondering if you’d want to speak to some of those dimensions of the report?

Chris Martin:  Sure, okay. That’s the complexity of housing policy, that it does cross over into so many of these areas. The last point you made first, there’s a big issue about the environmental performance, especially the energy inefficiency of so much of our housing stock, and so there is a need for not just building better into the future, but so much of our future housing stock already exists and needs to do better in the future. Investments in retrofitting. We’ve got lots of little bits and pieces of sorts of programs, but that’s still an area where a lot more strategic work needs to be done. Here in Australia, within disability policy we’ve made, in the last 15 years, a concerted national effort at reforming disability service provision, and we do have a national disability policy and a new institution set up on insurance lines for funding disability services. And a different conception of how those services should be funded by funding packages for individual people with disability and then they go and buy their disability services in the Disability Service marketplace. That’s an area where we have made some big national reforms, but we’ve done so without a lead agency for steering those reforms, and also the interface between disability and housing is also something that is still underdeveloped. We’re still not building new properties in New South Wales, new properties that are going to be accessible for people with disabilities. We’ve got a criminal justice system that is closely tied into homelessness and housing instability in that most people who leave prisons in Australia don’t know where they’re going to be living when they leave. At the other end, we have so many people entering prison from homelessness, as well. So that connection between incarceration and homelessness is something that’s very costly in terms of services, services in inverted commas, but also just the human misery that goes with incarceration and victimization, as well. Again, we’ve had commitments to not exit into homelessness, but that doesn’t happen. It’s still regular, it’s still standard that a person will exit prison, and not know where they’re going, so it’ll be homelessness or some sort of temporary accommodation. Investment in housing can achieve savings and beneficial outcomes in the criminal justice area. Without this holistic or comprehensive view of housing policy, we don’t see those benefits, and housing policy makers don’t really get the credit and don’t get to make the claim for investment, because it’s a criminal justice payoff that housing investment can make. All of those things that you said, Scott, are aspects of the complexity of housing and homelessness policy. That’s why, to get on top of that complexity, we should have a strategy and it needs to be ambitious and have at the center of it adequate housing for everyone. That human right to housing is, I think from the research we’ve done and the conversations we’ve had, a great starting place for getting policymakers together. And also to make the case to the public that a government has ambitious plans for making housing better for the general public.

Billy Saas:  Chris Martin, thank you so much for joining us on Money on the Left.

Chris Martin:  No worries. I’m very happy to join you. Thanks a lot for having me.

* Thanks to the Money on the Left production team: William Saas (audio editor), Mike Lewis (transcription), & Robert Rusch (graphic art)

Andrew J. Douglas, political theorist and professor of political science at Morehouse College, joins Money on the Left to discuss his latest article, “Modern Money and the Black University Concept,” published April 19, 2024, in Money on the Left: History, Theory, Practice. 

In the article as in the interview, Andrew stages critical encounters between the little-studied but tremendously potent concept of the Black University–an alternative vision for higher education oriented to Pan-African research and community development–and recent public money-driven proposals, like the Uni Currency Project, that aim to activate colleges and universities as sites for radical public provisioning and meaningful political participation. Proponents of both projects, Andrew argues, stand to gain much through collaboration and close study of each other’s work, with the prospective outcome of a revitalized 21st-century public money-driven Black University movement lingering just within reach. 

Toward the end of the conversation we discuss Andrew’s planned participation in a symposium on the cooperative university that was to be held later in the month at Columbia University. In solidarity with campus protestors at Columbia and across the world, Andrew withdrew in advance from that event.

Andrew J. Douglas is author of three books, including (with Jared Loggins) Prophet of Discontent: Martin Luther King Jr. and the Critique of Racial Capitalism (2021); W.E.B. Du Bois and the Critique of the Competitive Society (2019); and In the Spirit of Critique: Thinking Politically in the Dialectical Tradition (2013).

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

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

Billy Saas: Andrew Douglas, thank you so much for joining us on Money on the Left.

Andrew Douglas: Thanks for having me. It’s a real treat.

Billy Saas: We’re excited to have you here and to celebrate the publication and to discuss the substance of your piece for Money in the Left: History, Theory, Practice titled, “Modern Money and the Black University Concept.” Before we get into that, or maybe as a way to get into that, could you talk to us a little bit about how you found yourself at this project? What is your research background and what brought you to be interested in the Black university concept?

Andrew Douglas: I’m a political theorist, and have fairly recently come to money and the philosophy of money. Most of my work over the past decade or so has been focused on histories of Black radicalism, Black Marxism. My two most recent books have dealt with critiques of racial capitalism in the works of DuBois and Martin Luther King, and Walter Rodney and others. I’ve taught for the past 13 years at Morehouse College, the historically Black liberal arts college in Atlanta. The “Black university concept,” which I think we’ll have an opportunity to talk about in some depth as the conversation unfolds, that’s something I’ve been thinking about for a long time. But I haven’t really been thinking about this in relation to money and finance until fairly recently. A few years ago, I started teaching a class on debt at Morehouse, and I was prompted for whatever reason to get on Twitter, as part of this new class that I was teaching. I had, for years, sort of avoided all forms of social media, but finally in 2021, I decided to get on Twitter to expose myself to some new things and try to learn some new things. One of the things I was exposed to was Money on the Left, and some thinking about money and modern monetary theory. Gradually, I began to incorporate some of that into my teaching. When y’all put out the piece that you did for the AAUP, I think it was Scott, and maybe Benjamin Wilson were the authors of that one. That piece really got me thinking about monetary experimentation and philosophy of money in the context of what I had been thinking about for quite some time in the Black university concept and movement. I started thinking about doing a historical piece, where I could put some of this new thinking about money in conversation with some of the history of Black radical institution building. My sense is that there’s some real overlap with what you all are trying to do with the ‘Uni’ currency project, and what the theorists of the Black university in the mid 20th century were trying to do. I just wrote this piece to kind of draw out some of those connections, and also try to think through some of the tensions between those two. But that’s kind of how I got here.

Billy Saas: Like you said, you have a background in political science, you have previously written on racial capitalism. The introduction of Twitter into one’s life can be a radically changing experience. Is there a through line that you can identify through your own research that if you were asked by say, tenure review committee, how to make sense of your research, how did you end up here, do you think that you could draw that through line pretty clearly?

Andrew Douglas: Yeah, I could draw that throughline without Twitter, for sure. I’ve been thinking for a long time about political economy, critical theories of capitalism, and I was trained in a kind of Marxist, European Critical Theory tradition, and pretty quickly after graduate school became more firmly rooted in Black radicalism, Black Marxist, Black sort of radical variations on Marxist critical theory. Political economy and thinking critically about capitalism has always been central to my work. I think the turn to money, in particular, even if that was kind of prompted by some things I was exposed to on Twitter, it’s all organically connected to thinking broadly about political economy and how we organize institutions within capitalist societies to try to mitigate some of the worst possible outcomes of market, commercial society. 

Scott Ferguson: If you were to introduce our listeners out there, who might only have a vague sense of the Black radical tradition, Black Marxisms of all kinds, what would you tell them are some of the key tenets of those traditions? And maybe, tell us a little bit more about what some of your previous books have offered those traditions?

Andrew Douglas: In 2019, I published a book on Du Bois. It’s called W.E.B. Du Bois and the Critique of the Competitive Society. It looks at his work in the 1930s, which was a period of transition for Du Bois. This was a period in which it became more distinctive. He had always been a critic of capitalism and empire. But in the 1930s, he became far more disillusioned with liberalism, broadly understood. I use the framework of what I call the “competitive society” as a way of articulating the distinctiveness of Du Bois’ critique of Western European modernity in the 1930s in a way that I think speaks to our neoliberal present now. This was a time period in the 1930s, when the term neoliberalism was coined, when market reformers were trying to promote competitive market relations and use the apparatus of the state to promote competitive market relations. Du Bois at this time was someone who was deeply worried about what our celebration of competitive market principles would mean for Black people and for race relations. He was concerned with the kind of mainline civil rights buy-in to this idea that we just need to give people the freedom to compete, and that would resolve racial conflict and tension and racial injustice and inequity. He saw early on that that kind of approach was just going to exacerbate racist animosities. So the book I wrote in 2019 deals with some of those questions. Then, the more recent one I did on Martin Luther King with my colleague, Jared Loggins at Amherst College, tries to use contemporary discourse on racial capitalism to reconstruct Martin Luther King’s critique of capitalist society. We argue there that King, widely understood to be a critic of capitalism, we try to reconstruct the critical theory of capitalist society that is there in King, but not always fully articulated. We use contemporary discourse on racial capitalism to do that.  

Scott Ferguson: Great, well, maybe we can plunge into the article you wrote for the Money on the Left journal, and start with the, I think, first and most appropriate question, what is this “Black university concept” as you understand it?

Andrew Douglas: The concept, as I indicated in the paper, is not well studied, well known. I should qualify that a little bit. We at Morehouse where I teach, an HBCU [Historically Black Colleges and University], we had a roundtable discussion on it last semester. There are quite a few folks in the orbit here who are familiar with this tradition and this concept, but outside of HBCU communities, it’s certainly not well-studied or well known, and it doesn’t really have a definitive or singular genealogy. Du Bois’ writings in the 30s are a key reference point. As he was becoming more radical in this period, he had some writings on the Black University where he begins to articulate what becomes known in the 1960s as the Black university concept. But the concept really does come to maturity in the 60s, in the throes of the Black Studies movement, in the throes of anti colonial liberation struggle worldwide. If there’s one essay that I would recommend on the Black university, the idea of the Black university, it would probably be Vincent Harding’s 1970 piece in Ebony Magazine. I think it’s called “Toward the Black University.” He’s got this great line there that I repeat all the time: “Dark copies of dying whiteness are no longer needed.” This really kind of captures the essence of the Black university vision. The idea is that white civilization, European modernity, is unsustainable, unjust, unworthy of efforts to try to redeem it. Conventional universities, whether predominately white institutions, or what we call HBCUs, have long been kind of in service of this white world project. This is language that really comes from Du Bois. Du Bois had a notion of a white world, and a Black world. The white world was the European modernity that we all know. It’s property ownership, it’s capitalism, its empire, it’s anti-Black violence. The Black World is this alternative that has yet to manifest itself. But it cannot simply be a copy of this whiteness. So, the Black university vision is an idea of an institution that can hasten the demise of white world principles and practices and experiment with and imagine and build Black world alternatives. So, in the paper, I leaned on Adom Getachew’s notion of a “Black Worldmaking agenda.” I think the Black university project is part of a Black Worldmaking agenda, where it’s about building a new, more sustainable world that transcends this kind of violent, inequitable, racist white world that we know. I should stress that it should be clear, based on what I’ve said already, that I’m not talking about existing HBCUs, or Historically Black Colleges and Universities. HBCUs are integrated into the capitalist, imperialist project, from the very beginning. I think they’ve evolved accordingly to the point where today, they’re really run like neoliberal universities, just like any other. The Black university as a concept is really more of an aspirational ideal. There was always some question of whether or not that ideal could take root within established HBCUs. This was Du Bois’ struggle. He was ultimately pushed out of what was then Atlanta University, an HBCU in the 40s, because it was just not an environment that could nurture his vision. This was the struggle of Vincent Harding and so many others in the 1960s, who were trying to imagine and build the Black university as well. Harding, for example, was chair of the History Department at Spelman College in the mid-60s. He, of course, was well known for authoring Martin Luther King’s 1967 anti-Vietnam War speech, “A Time to Break Silence.” Then, when King was assassinated, Harding was called upon to lead a library as part of the King Memorial Center. Coretta Scott King called upon him to build a library and a scholarly apparatus in the King legacy. But even that, he felt, was too tied to white philanthropy, in ways that would not allow him to kind of carry on his vision for a space of Black study and Black radicalism, and pan-African scholarship and research and community building in the way that he wanted to do. He broke off and founded the Institute of the Black World in the early 1970s. My co-author, Jared Loggins, and I have written about this. If anyone’s interested, we’ve got a short, very accessible piece in The Boston Review thinking about how some of the theorists of the Black university in the mid-60s were compelled to break off and try to build institutional spaces for Black study and Black learning and Black scholarship that were not rooted in established HBCUs. For a long time, I’ve been really interested in trying to revitalize, renew, and recommit to this idea of the Black university concept and vision and think about whether or not there’s any potential to build something like this from within established HBCUs. I think that’s really what brought me to this question of money and finance: how do we materially support the building of this kind of institution?

Billy Saas: I’d like to explore your work and the trajectory of your work on the Black University concept and your engagement with the history of the Black radical tradition. I’d like to know if you think it’s a competing vision or a complementary vision, but an alternate vision as articulated in the work of Fred Moten, and Stefano Harney, which is their project on The Undercommons: Fugitive Planning and Black Study, which you don’t engage in this piece, but I presume you have factored into your argument and advocacy. What do you have to say about their work visa vie your own?

Andrew Douglas: This is definitely something that Jared Loggins and I discussed both in the concluding chapter to our book on King and in the spin off piece that we did for Boston Review, “The Lost Promise of Black Study,” taking that term “Black Study” from Harney and Moten, and now others who have taken up that term, like Joshua Myers, and so forth. The reason why the concept of the undercommons doesn’t surface in the paper that I’ve written for Money on the Left is because I think the idea of the undercommons is born out of a notion that the university is a capitalist, imperialist, largely white supremacist institution, that is unreformable and that liberatory education, what Harney and Moten call Black study is relegated to what they call the undercommons. It’s not in your formal classes, in your for credit, accredited course of study, that you really get the real education. It’s what happens in the hallways, after class, in the dorm rooms, on weekends, in your on campus activism, a disruption of a speaker coming to campus and the conversations and the reading groups that you put together in anticipation of that sort of work, that’s sort of the undercommons of the university where the real work goes on. The reason why that notion doesn’t really appear in the piece that I’ve written for Money on the Left is because in some ways, I’m trying to imagine whether or not a different approach to university finance can move us beyond this notion that the real good work in the university has to be relegated to the undercommons. Is it possible that we can transform the university in ways that make what Harney and Moten called the undercommons more of the commons proper. I’m certainly attracted, generally, to this idea of the undercommons. I experience it in my own work on campus. It often does feel like what we’re compelled to do by our accreditation bodies, and by our deans and all the rest is the least genuine, educational work and experience that we can be a part of. And that the real work happens when students who are not formally in your class come in and ask you a question about Fanon or something.

Scott Ferguson: Can “learning outcomes” be radical?

Andrew Douglas: Right, exactly. Yeah. You know, maybe here and there on the margins, but it certainly cannot be the core curriculum.

Billy Saas: The topic of money: Your approach is radically different from from Harney and Moten where they have the chapter on debt. They’re participating in and extending a tradition of a kind of utopian, post-money vision. Whereas yours is coming at it from a different tack. I’m not suggesting they’re incompatible. It just seems like that’s where the projects might diverge.

Andrew Douglas: Yeah. Some of the questions that I do raise in the end and some of the work that I’m trying to do now that doesn’t factor into this particular essay, do push on some questions that are emerging from Black Studies literature that I think do raise some kind of challenging questions that I’m sympathetic to about the kind of promise of public or what I call “counter public money” or modern money as a kind of means to building transformative institutions.

Scott Ferguson: I’d like you to walk us through your rather nuanced, even if cursory, genealogy of the Black university concept and the thoughts about money and about financing, that sometimes in that discourse, you do find openings, you do find possibilities, but other times, and very often, you find dead ends, stop gaps, cul de sacs. You have a sophisticated and subtle way of approaching this discourse and this conversation that I’d like you to spell out for our listeners a little bit, if you can.

Andrew Douglas: Theorists of the Black university imagined an institution dedicated entirely to Pan African study, and to Black community development. They were very good on the curriculum and the pedagogy side of things. They laid out brilliant, and really inspiring visions of what curriculum and programming would look like anchored in liberatory pedagogy, African-centered pedagogy. But they weren’t so good when it came to thinking about how the institution could serve as an engine of sustainable community development. This was really crucial. They wanted an institution that wasn’t just an ivory tower or a space for theory, but it was really, practically transformative for the communities that they were serving in which they were rooted. So the question was: How could the institution materially function within a hostile world, within a capitalist, imperialist, white supremacist world? And they kept running into dead ends. All the funding proposals were essentially calls to redistribute private wealth. It was either about calling on the government to tax and then give them money, redistribute through tax and spend. They weren’t confident that taxpayers and the state were going to support this kind of investment in a Black radical institution, or they thought it was going to have to come through philanthropy. They didn’t think that was particularly viable, or the money would have to come through tuition. But given the communities that they were trying to serve, and what they were trying to do that was, of course, extremely limited. This the 1960s is when I’m focusing on the theorists and the writers who were trying to imagine this. There was an important conference at Howard University in 1968, called “Toward the Black University,” where folks from a range of disciplines got together and tried to hash out different visions for how this might work. They were working from what I call a “private money” paradigm. I suspect most, if not all, listeners will be familiar with this kind of classical orthodoxy. This idea that money comes from the private sector and needs to be captured and redistributed. Obviously, a “public money” approach opens up all sorts of new opportunities here for our thinking–in particular, if we begin to think of the university as a site of monetary experimentation. What the theorists of the Black university wanted to do was use the university as a kind of anchor or centralized node to mobilize resources in more locally accountable and locally productive ways. The labor power was there, they just didn’t have the means to mobilize it. This is where I think we might introduce monetary experimentation as a means of realizing what the Black university concept was meant to do. If the university, as a kind of governing authority within a particular community, can establish itself as a currency issuing institution, can establish a demand for its currency, can use that currency arrangement to determine investment priorities and mobilize labor, all of this is like an organic extension of the Black university concept. It’s just they didn’t have the language or conceptual resources to articulate it. They were subjected to the sort of “monetary silencing” that Jakob Feinig, whom you’ve had on the show, talks about in his great book. In the 1960s, the theorists of the Black university had been subjected to this orthodox view of money as a means of exchange that emerges organically from the private activity of market actors, and it needs to be raised or captured and redistributed, as opposed to thinking of how public or communities that are hierarchically or centrally organized, can use money creation as a means of mobilizing resources. What I argue in the paper is that this new way of thinking about money is a kind of organic extension of what the theorists of the Black university were doing. They kept running into dead ends, because they were thinking through this private money paradigm. But this public money paradigm, what I call a “Black counterpublic money paradigm”–and I want to flesh that distinction out a little bit–really opens the door, frees them to realize the vision of the Black university in a lot of ways.

Scott Ferguson: I’m endlessly fascinated by the ways that the private money paradigm licenses, naturalizes, reifies all kinds of other systemic and justices, including racism. In the broader Modern Monetary Rheory community, there’s a well understood critique of the taxpayer paradigm, as a racialized one, based on any number of our colleagues’ contributions. White people have been provisioned to earn more money in a white supremacist society, and if we have a private money paradigm in which money can only be gotten through revenue or through recycling it through taxes or through bond sales, then money is de facto white money, and its whiteness has to be redistributed to non-whiteness.

Andrew Douglas: Yep.

Scott Ferguson: Your genealogy here, I think, is expanding that work and showing us this in another situation and in a particular place in time in the 60s, in this Black radical tradition surrounding universities trying to reimagine and radicalize what the university can be. The racialization of money, even despite their best efforts to push against racism, is pushing against some of the very radicals who would like to undermine it. Because of monetary silencing, they don’t necessarily have the tools to do so.

Billy Saas: It’s a conception that is reinforced by, in most radical traditions, the Marxist rejection and negative orientation to the money form. So, you have the double punch, neoclassical Orthodoxy in the mainstream in your economics courses, and the critical historical background of Marxist anti-money positions. There’s so many good reasons, I think, to imagine, or to help us understand why this sort of thinking wasn’t operative and wasn’t active in those conversations that they were having. You mentioned that you have and will continue, I would imagine, to participate in conversations around the Black university around cooperation and different modes of operating differently to the existing structures that are in place because of the private money paradigm. How has or how do you anticipate that this work on the Uni and the counterpublic money approach that you’re proposing for the Black university concept– How will that be? Or how has that been received by your colleagues and other folks who are currently interested in something like the Black university concept?

Andrew Douglas: Well, I’m hopeful that I’ll be able to contribute to expanding folks’ imaginations around money. It can be such a heavy lift to try to get people to think about money in these sorts of heterodox ways. It requires more than just a casual conversation more than just a 15 minute paper presentation at a conference.

Scott Ferguson: We hear you.

Andrew Douglas: I will say this: A year or so ago, when I was writing the first draft of this paper, I actually taught a class here at Morehouse. It was modern political thought was the umbrella title of the class, but it was really a special topics course on modern money in the Black university concept. Over the course of the semester, we got to the point where the 25 or so students who were taking that class were really intrigued by thinking about the possibilities here. But that required quite a bit of exposure to monetary theory, to both Orthodox and heterodox ideas about money, to you how the university is governed and structured, and how University finance exists now, in order to think about how it might be changed to function differently. That took a whole semester to really adequately introduce to folks. It does take some conversations. I’ll just add, I’ve got a piece that just came out in the AAUP journal on Du Bois. It’s trying to think about the university as a cooperative and to try thinking about the academic labor movement as part of a broader cooperative movement. Even though that piece doesn’t introduce the money stuff, I think there is room for the academic labor movement to think seriously about the legal structure of our institutions. I think that can and should include thinking about money as a creature of the law as part of that process. There’s a great new book out–it doesn’t deal with money, but it’s a fascinating book–and I think there is a connection here with the Uni currency idea and this thinking about money as a creature of the law. This book by Timothy Kaufman Osbourne called the Autocratic Academy traces over time how the North American University has come to be structured legally as a property corporation, where absentee governing boards have unilateral governing authority over the institution as property. They’re entrusted with carrying out the will of donors and protecting the asset value of the institution as property. The takeaway of that book is that we can fight for shared governance, we can even organize into collective bargaining units, but at the end of the day, because of the way the university is legally chartered, governing boards hold unilateral governing authority. They can do what they want, or they’re conscripted into governing the institution according to the dictates of the competitive accumulative logic of the property corporation. The takeaway from that book is that the only real solution is to dissolve the corporate structure of the university and recharter the university as a member cooperative. I think there is a broad interest in trying to imagine the university as a cooperative, that is governed as a cooperative.

Scott Ferguson: And legally designated as such.

Andrew Douglas: Yeah, exactly. Bernard Harcourt up at Columbia, in a couple of weeks I’m going to participate in a conversation with him about the cooperative university. I’m going to try to introduce some thinking about finance and money and credit creation and complementary currencies. Insofar as we’re thinking here about money as a creature of the law, we’re thinking about universities as creatures of the law. We’re thinking about how legal reforms, or public popular agency over these legal institutions, it’s all kind of connected. If we’re going to push the academic labor movement to think more radically about the need to recharter our institutions and to build momentum toward that outcome, then thinking about how we legally organize our monetary arrangements can and has to be part of that.

Billy Saas: It’s interesting to think about how that notion of the cooperative university is so out of alignment with the day to day operation of the current university structure.

Andrew Douglas: Right, totally.

Billy Saas: However, at the same time, I think that is the image that is very actively cultivated by universities, as these places of yes, sharing of knowledge, as cooperative spaces where professors and students work together to discover the technologies and thinking of the future. So what you’re asking for is ultimately calling universities to be the things that they’re pretending and presenting themselves.

Andrew Douglas: Right. Don’t promote your community service, while simultaneously buying up property and gentrifying the neighborhood.

Billy Saas: Exactly. I’m excited that you brought up the class that you taught, because I remember when you shared your syllabus on Twitter. I was preparing to teach a class when you posted that syllabus, and I was motivated and inspired by the way you were directly going for it in a way that I am not used to, to do it more myself and to foreground the money question more often, instead of coming eventually to it.

Andrew Douglas: One of the most generative ideas that came out of that class was the idea that all 105, or however many HBCUs there are, joined together in a kind of monetary union and issue of currency that has receivability across campuses to sort of expand the scope of currency as currency. I think that’s intriguing. I have this crazy aspiration: I’m on the AAUP’s committee on historically Black institutions. Part of the reason why I accepted that appointment was this lofty idea that I could get all the HBCUs together, and we could really think radically about complementary currencies and radical approaches to university finance and really pioneer some new projects and experiments. I don’t know, maybe it’s possible. We’ll see.

Scott Ferguson: The thing about our Uni currency project is that it’s really adaptable to all kinds of circumstances, and it can be as bottom up and grassroots as one would want to pursue it. It can also build capacity by incorporating multiple institutions across scales. I think for us, the big picture, the end game would be to, essentially, force the US government at the federal level, to formally and legally grant credit-issuing power to a host of public institutions for a public purpose, essentially breaking the extremely exploitative and austere, private monopoly of the finance franchise, in which this country is essentially founded. Although this country has a history of monetary experimentation that is still going on today, for the most part the macro structure is that we have a federal government, which gives itself the right to create currency, and then we have a franchise system that says private banks and private financial firms on and offshore can create dollars according to certain requirements. And all of our other public institutions–our states, our municipalities, our counties, our cities, our school systems K-12, our universities–you all have to pretend to recycle all the money that’s created by these narrow channels. There’s something incredibly anti-democratic and austere and unjust about the very structure and foundations of this system. The Uni provides, I think, an important political, rhetorical, imaginative problem-space from which to begin to contest that status quo and to bring it out into the light. Who knows where this might lead in terms of political results? But I think for us, first and foremost, it’s about ending the monetary silencing about the structure that we have and saying: Wait a minute, is it not just unjust, but actually inefficient to only give a finance franchise to these private actors for private purposes, for the purpose of private profit and exploitation, and actively deny it to these major public institutions, let alone new institutions along new cooperative models that we might create along the way? To me, I always like to separate this question from the question of optimism versus pessimism. Will this go anywhere? Is this the revolution or is it not? Is it just going to be co opted or is it not? There is something critically important politically about challenging the silencing around the structure that we have. That goes further than only critiquing capitalism as if capitalism. This opens up political contestation to a wholly different framework.

Andrew Douglas: Yeah, agreed.

Scott Ferguson: Maybe we can talk about your idea of the Black counterpublic, especially around the university.

Andrew Douglas: The basic public money, private money contrast is familiar to most listeners here. My concern is thinking about Black history, Black struggle, thinking about Black institution building, thinking about the way in which the state, and the official public sphere have been set up to control and exploit and underdeveloped Black people and communities. I’m interested in how those communities have established or how they might establish alternatives, or what I call “counterpublic” institutions. My sense is basically, certainly within the United States, but I think this applies more broadly in an anti-Black global context, that Black people, Black communities are relegated to a counterpublic space, insofar as formal public or state institutions or international institutions that are dominated by imperial powers are just not set up to work for them. This is really the concept of Black counterpublic money is what I’m trying to introduce in this paper. Using the Black university as a case study, or a site for how the Black counterpublic as a space of monetary experimentation might play out. My thinking is that this might be a basis for a larger project, a book project that I’m imagining, tentatively, titled Black Counterpublic Money: Monetary Experimentation in the Black Radical Tradition. Thinking about how Black counterpublics have sought to organize institutional frameworks, over and against the kind of formal institutions of the formal public sphere. Thinking very specifically about what monetary arrangements or monetary institutions, as part of a Black counterpublic agenda, has looked like or might be made to look like. Again, I think a big part of this is about to lean into Jakob Feinig’s framework of monetary silencing and democratizing moral economies of money. Trying to think about that in the context of the Black radical critique of the state, Black radical critique of Global capitalism and empire. I think there is a risk that in the shift from Orthodox private money thinking to public money, there is a tendency to not pay sufficient attention to the extent to which public money, by itself, may not work for Black people. That certain public money approaches or initiatives may actually exacerbate the problems for Black communities, whether in the United States or, you know, in different sort of parts of the global supply chain. That’s what I’m trying to think through. I think we need to further complicate the shift from a private money to a public money framework to try to think through both some of the possibilities for what I call Black counterpublic money, but also some of the sort of challenges that exist there. Again, this piece that I’ve written is just a first stab at this using the Black university as a kind of case study or a canvas on which to sketch out some of these concerns and questions.

Scott Ferguson: A lot of these concerns and questions, I think, take shape around a complex treatment of sovereignty, monetary sovereignty and sovereignty in the latter part of your piece. Would you mind exploring that with us a bit here. 

Andrew Douglas: Yeah, sure. I mean, I’ve got to admit, I’m a little hesitant here. Sovereignty is a foundational concept in my field of Political Theory, so I should be like a total expert on this. It’s one of those things where I know enough about the literature in the debates on sovereignty to know that I probably shouldn’t be talking about it.

Billy Saas: Just start with Bodin and get us going.

Andrew Douglas: There’s some great work coming out in real time. It seems like sovereignty, maybe it’s always been the tip of the iceberg in my field, and I just haven’t been privy to it, and I now am. There’s some really great work, just to flag a couple of really good books that have come out in the last year. My political theory colleague, Inés Valdez, has a new book out thinking about sovereignty in the context of the Black radical tradition. David Timmons has a great new book out thinking about this through North American indigenous thought. But I’ll just say a couple of things. One, the notion of monetary sovereignty is, of course, central to Modern Money Theory, this notion that people must have some sovereign control over the monetary system. I’m drawing, Scott to your suggestion, that we might introduce some alternative language here. So instead of thinking about sovereignty, with its, you know, invocation of borders and security and insiders and outsiders, and this really absurd notion that the sovereign inside is somehow independent of everything on the outside. Instead of invoking these familiar Western conceits, maybe we ought to think about interdependency, and responsibility in our collective capacity to use money to do things, specifically to nurture interdependency and responsibility, rather than kind of disavow it. I’m attracted to the way in which you all have sought to kind of complicate and in some ways move beyond the framework and the language of sovereignty in your thinking about modern money. I try to run with some of that and in the paper, but I do so very specifically, by leaning on a particular figure who is integral to the Black university movement, and that is the economist Robert S. Browne. I was up at the Schomburg looking through his papers in January while I was revising this paper, and I came across just a really interesting passage. For those who aren’t familiar, Robert Span Browne was initially a program officer with USAID and its predecessor in the late 50s, but quickly became an outspoken critic of US foreign policy in Southeast Asia. He was a founder of the Black economics research center in Harlem, directed that for many, many years, was a founding editor of the Review of Black Political Economy, which is a journal that is still running. He passed away, I’m not sure entirely when. [2004] In the mid 60s, he was integral in those conversations around the Black university concept. He attended that famous conference at Howard in 1968. As a trained economist, he was someone that many of the participants in those conversations really look to for help on the financing question, the funding question. As a figure of his time, he was very constrained by this private money orthodoxy and didn’t really have the conceptual tools to think beyond it. When I was up at the Schomburg, I came across this passage from a piece he published in 1975, where he’s thinking more broadly about Black institutions, not just the university, but Black control of Black finance institutions. Maybe I’ll just read this passage, it speaks to this question of sovereignty in ways that I think are potentially rather generative. So here’s a quote he says, “We need a range of soundly conceived, Black-financed and therefore Black-controlled institutions, which can carry on the struggle on our behalf, much as sovereign governments carry on the struggle for their national constituencies. But since we lack sovereignty, our institutions must in effect become our government. That is why they must be Black. That is why they must be funded by the Black community and accountable to it. Our contributions should be seen by us as an obligatory tax, whose enforcement agent is not the IRS, but our personal commitment to Black survival. My brothers and sisters, let us get on with the serious business of freeing ourselves from domestic colonialism and move ahead with the business of self government. If we can successfully build such institutions, meanwhile, resisting the external pressures to divide us from one another, I have every confidence that our beloved Black community can survive, prosper, and illuminate the way for others yet to come.” There’s a lot going on here, but this idea that he’s acknowledging that since we lack sovereignty, I think what I’m particularly interested in here is this idea that the absence of sovereignty conventionally understood is not perhaps a deficit or something to be overcome, but perhaps a kind of asset to how we imagine monetary arrangements beyond the paradigm. In the paper, I speak a little bit about how this critique and suspicion of sovereignty has long been integral to the Black radical tradition. If you look at one of the key spokespersons of theorists of that tradition, Cedric Robinson, his first book really goes after sovereignty as one of the kind of founding core constitutive principles of white European civilization and really has to be challenged and problematized. It’s a concept that I think sits problematically at the heart of Modern Money Theory, and that we need to complicate for reasons, Scott, that I think you’ve been particularly articulate in expressing. My thought here, again, is that we see the seeds of a critique of sovereignty that can be extended to a critique of monetary sovereignty in the work of a figure like Robert S. Browne in the early 70s. Once again, I think there are ways in which we can put new thinking about money, new heterodox thinking about money and monetary experimentation into conversation with this history of Black radical institution building in ways that are really quite generative. I think some of this stuff on sovereignty, there’s just some really generative lessons to be teased out here.

Scott Ferguson: I noticed that in the quote you read, even though I imagine that Browne is probably working with a money recycling paradigm, I noticed in the quote that you read us, there is no talk of redistribution. So that quote actually lends itself to what MMT would call a tax driven money.

Andrew Douglas: Exactly. Absolutely. Thanks for bringing that out. I mean, that’s the other reason why I quoted this passage and why I was so happy to find it in this unpublished manuscript in the Schomburg because I think you’re absolutely right. It’s about using taxation to create a demand for a currency, and that’s it. That’s all he says about.

Scott Ferguson: And it doesn’t have to be foundationally coercive. It doesn’t have to be backed by the “man with the gun.”

Andrew Douglas: Yeah, exactly right. It’s understood here and articulated here as an obligation based on a responsibility to one’s community.

Billy Saas: That’s beautiful. Another interesting thing about this is that, I think it might be fair to say that without the Modern Money Theory perspective, this quote when you found in the Schomburg might not have read so interestingly, but at the same time as it kind of activates this new lens, you’re using that new lens to turn it back and critique MMT. It’s just a beautiful movement there. I guess, on that note, one of the ways that one’s mind might go in encountering this quote, without the kind of public money or counterpublic money perspective would be: Yes, we need to bank Black. We need to patronize Black businesses. I think that would be the conventional, liberal neoliberal lens that would be brought to this text. Do you think that’s going too far?

Scott Ferguson: Or the “Black capitalism” lens.

Andrew Douglas: Yeah, I need to do a little bit more work on Browne to really be able to sort of tether this to his thinking in any way. But these were the kinds of questions that he was absolutely thinking through. He was a critic of capitalism, but largely working from this kind of private money framework trying to think about how to pool resources and all that sort of stuff.

Billy Saas: But he’s thinking bigger. He’s not saying we need Black banks. 

Andrew Douglas: No, absolutely. The passage that I read is absolutely part of a much more imaginative envisioning of monetary arrangements for radical transformation. How can we use monetary design, new approaches to public finance, to liberate communities from the constraints of capitalist logic?

Scott Ferguson: You end this piece with a word of caution or a cautioning question that has been hovering over our conversation for quite a while. I want to read this question or this series of questions. “Does the public banking movement, even if made to incorporate Black colleges and universities, as licensed community development banks, with the power to issue credit, nevertheless, reflect a dead end-integration into the nation’s finance franchise as a kind of acceptance into the deracinating arms of the mother country?” And that’s a quote. You’re quoting somebody else there. “What would a more radical or more decolonizing politicization of money entail? And how, if at all, might a shift toward what I have dubbed Black counterpublic money help to build and sustain institutions that could advance that effort?” So at the end, you’re suggesting maybe using the conventional language of sovereignty, what might it mean to give up on a certain kind of autonomy or a certain kind of self-standing Black project? Are there not dangers of simply capitulating to a system of entrenched white supremacy that’s baked into the very institutions, even if it’s in the name of something that might appear to be better? And I’m wondering, do you have more thoughts about that, since you’ve penned these lines?

Andrew Douglas: You all saw an earlier version, a pre-R&R version of this article, which tried to articulate some of these questions a little more fully. I’ve scaled much of all of that back and saved it for another occasion, another paper. I think the readers were right, that this paper wasn’t the place to really flesh out some of that stuff. I’m not sure that I’m fully prepared to really do that now. Trying to think about racial capitalism and empire and the geopolitics of global supply chains, trying to think about the limits of monetary reform as a means of denaturalizing capitalism. Can we use money to fundamentally transform modes and relations of production? I think that some of this gets at my ambivalence with at least some of what flies under the banner of MMT. I’m not sure, you know. But if we use money to mobilize labor, we’re still commodifying labor power, we’re still compelling market actors to sell their labor power in order to survive. We’re still subjecting market actors to the impersonal domination of market society. Given the sheer power of capital to control markets, I think given the complexity of today’s global supply chains, I just wonder about the extent to which any sovereign country, we introduced the language of sovereignty, but any country, any more local complementary currency project, could really unravel or supplant the pitfalls of commercial civil society. And I just don’t know. Are we running up against a world that has been so thoroughly shaped and dominated by the logic and the materiality of capital that it’s become a force that no amount of tinkering with money can really undo. Or put differently, I think this was really the nature of Marx’s contention, that monetary reform is not really going to undo the demand for commodified labor and the capitalist value form and that we’re still going to be endlessly sort of wrestling with the impersonal domination of the market, so long as we use money as a means of mobilizing commodified labor. So these are some of the questions I’m trying to think through. I think there is room, and this is a paper that I’m trying to write now, to kind of bring some of Marx’s criticisms to bear on Modern Money theory. I think some of the criticisms of Marx from MMT are apt but I think he has some things about commodification of labor and the capitalist value form that we still need to sit with. Another figure I’m trying to think we have here is Fanon. This idea that we need to stretch Marxist analysis to deal with questions of empire and race and colonialism. I’m interested in what Fanon says about racial fetishism as a kind of corrective to Marx on the money fetish. This idea of whiteness as money or whiteness as credit and credibility. I mean, if we’re interested in not simply reducing calculations of creditworthiness to a logic of return on investment, are we nevertheless finding ourselves shaped and constrained by a more fundamental logic of anti-Blackness that shapes our understanding of credit worthiness? There’s some recent work in Black Studies scholarship that raises some of these questions, trying to think about whiteness as credibility, Blackness as unpayable debt. I want to think through some of this, so it’s premature for me to flesh out any substantive claims here, but just to kind of maybe bring the conversation full circle, if monetary experimentation in the Black radical tradition is and has been relegated to counterpublic spaces, appeal to public money by itself does not necessarily resolve that, and may even exacerbate. Those are some of the questions that I’m still trying to think through.

Scott Ferguson: Those are all really helpful and helpful challenges. I guess what I would say as a response, is that I have no optimism about an immediate dethroning of entrenched power that has been enfranchised by global legal systems and imperial structures. But I would still insist that it is those legal structures that condition, and that mediate that power in the first place. And that if you want to attack that power, you need to attack their conditions of possibility in that way. I would also raise the question: What would a genuinely democratic, cooperative grassroots Uni project mean for the Marxist critique of the “value-form”? Is it even fair to use the same language or analytical vocabulary to talk about it? tthis is not an example of what I just said, but Billy was talking about his own classroom currencies and the conversations about what should we mobilize this currency to do? There was an ongoing conversation about particular needs that were identified by students who are parts of the community. They are  on the ground and they live these lives, they see where the lacks are, they see where the deficiencies are. I have a really hard time appealing to the language of commodification, or a kind of external imposition, or alienation of labor, when we’re really stretching the bounds of what monetary experimentation can be. I think that Marx is often thinking about money as a circulation problem even if it even if it conditions production, production is still somehow logically first, just to give a sort of push in the other direction. I hear your concerns, but I also wonder how these kinds of radical monetary experiments can really challenge these logics, whether or not they’re taking down multinational capitalist power structures, immediately or not.

Andrew Douglas: Yeah, I mean, and I think Marx’s own life work may be instructive here in so far as he never gave up on efforts at monetary reform. He just thought they weren’t necessarily going to ultimately solve the problem as he understood it. So regardless of where am I thinking, which is still very much in progress and not settled lands on this question of monetary reform and monetary experimentation as a kind of means of denaturalize, wherever that sort of lands, we got to try. I think the Uni currency project is a worthy effort at getting us started and introducing more folks to the concerns of, again, using Feinig’s language monetary silencing, and the possibilities of trying to claim and forge agency over monies design and opening up new possibilities for how our communities or publics or counterpublics can use money as a kind of utility to achieve outcomes that they would not be able to otherwise. So I’m on board with all that.

Billy Saas: I think it’s a wonderful place to start wrapping it up. By the time this is published, you will have participated in that conversation you mentioned at Columbia University. We’re anticipating it now. What are you looking forward to talking about there? And where can people who are listening now turn to find out more?

Andrew Douglas: Yeah, Bernard Hardcourt. I’m not sure how many folks are familiar with his work. He’s a legal theorist, political theorist at Columbia. He’s got a new work out on cooperation, and he’s doing a series of conversations around cooperation and cooperative movements. The 13th and final is on the cooperative university, and that’s what I’ve been asked to participate in. I think they’re all recorded and posted on YouTube, so folks can see them there. There’s also some resources on the website. Maybe we can in the show notes link to some of that. I hope to introduce and plan to introduce some conversation around money and finance which I think is sort of a missing piece for some of the discussions they’ve been having around cooperatives and cooperative movement building. I think there’s a real opportunity to expand both that project and the money side of things by sort of bringing these two discourse communities together. So I’ll try to do that, focusing again on the university as a kind of concrete site at which some of this might play out. So I’m excited about it.

Billy Saas: Excellent. Is there anything else you’d like to share that you’re working on?

Andrew Douglas: Yeah, we’ve been talking quite a bit about Du Bois. So I’ll just do a quick plug for a new volume that a few other colleagues and I have in the works. It’s an edited collection of Du Bois’ writings on political economy. So hopefully that’ll be out within the next year or so. There’s some previously unpublished work if you can imagine that. There’s still unpublished material from Du Bois out there. So we’re excited about that. I’ve been searching in vain for some creative heterodox thinking about money in Du Bois and I have not found it, which is fine. So that’s a project and then, I don’t know where this kind of larger book that I’m imagining on this notion of Black counterpublic money, where that’s going, but that’s what I’m going to be working on for the foreseeable future.

Scott Ferguson: Keep us posted.

Billy Saas: Andrew Douglas, thank you so much for joining us on Money on the Left.Andrew Douglas: Thank you, I really appreciate it.

* Thanks to the Money on the Left production team: William Saas (audio editor), Mike Lewis (transcription), & Robert Rusch (graphic art)