Category: Podcast

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

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

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

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Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

David Backer, welcome to Money on the Left.

David Backer

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

Scott Ferguson

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

David Backer

That’s right.

Scott Ferguson

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

David Backer

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

Scott Ferguson

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

David Backer

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

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

Scott Ferguson

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

David Backer

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

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

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

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

Billy Saas

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

David Backer

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

Scott Ferguson

Did you get harassed? 

David Backer

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

Scott Ferguson

Nice. Like Fred Jameson. 

David Backer

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

Scott Ferguson

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

David Backer

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

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

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

Scott Ferguson

They lived in the city?

David Backer

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

Scott Ferguson

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

David Backer

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

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

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

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

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

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

Scott Ferguson

I’m sorry. 

David Backer

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

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

Billy Saas

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

David Backer

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

Billy Saas

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

David Backer

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

Scott Ferguson

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

Billy Saas

New Orleans, next.

David Backer

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

Billy Saas

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

David Backer

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

Billy Saas

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

David Backer

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

Billy Saas

Mm-hmm.

David Backer

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

Scott Ferguson

And who’s criticizing it, right? 

David Backer

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

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

Scott Ferguson

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

David Backer

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

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

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

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

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

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

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

Billy Saas

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

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

David Backer

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

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

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

Scott Ferguson

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

David Backer

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

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

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

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

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

Billy Saas

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

David Backer

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

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

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

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

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

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

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

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

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

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

Scott Ferguson

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

David Backer

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

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

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

Scott Ferguson

That’s how postcoloniality rolls. 

David Backer

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

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

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

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

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

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

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

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

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

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

Scott Ferguson

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

David Backer

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

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

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

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

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

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

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

Scott Ferguson

No more observatories? 

David Backer

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

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

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

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

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

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

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

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

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

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

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

Billy Saas

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

David Backer

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

Billy Saas

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

David Backer

Katie Wilson in Seattle too.

Billy Saas

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

David Backer

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

Billy Saas

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

David Backer

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

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

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

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

Scott Ferguson

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

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

Billy Saas and Scott Ferguson are joined by Will Beaman to discuss Money on the Left’s framework for what we call “Democratic Public Finance” (DPF). According to this paradigm, money is public credit, a capacious tool for mobilizing everyone’s capacities to meet our needs and build a desirable future. DPF redefines politics as the process of coordinating our abundant human and material resources within ecological limits, rather than as an austere and exploitative competition for scarce funds. With this, Money on the Left not only opens fresh horizons for left politics, but also directly challenges the fiscal sabotage routinely carried out by liberals, conservatives and the authoritarian right. 

In conceptualizing DPF, Money on the Left builds on insights from Modern Monetary Theory (MMT); but we also push beyond MMT’s delimitation of public money creation to the alleged sovereignty of the nation-state. Contrary to conventional accounts of MMT, we insist that money is a public, contested, and inexhaustible institution that must be politicized and redesigned across all levels of governance. 

During our discussion, our cohosts outline the approach to DPF presented in our recent long-form publication, “Democratic Public Finance: A Radical Vision for Mamdani’s New York City.” Along the way, we tease out key insights from myriad other contemporary works, which variously leverage DPF to challenge the second Trump administration’s authoritarian radicalization of neoliberal economics. Such texts include co-authored pieces such as “Blue Bonds: A Fiscal Strategy for Overcoming Trump 2.0,” “How the Zetro Card can Save New York City (Really),” and “It’s Time for Complimentary Currencies,” as well as writings by Will Beaman like “How to New York Times Proof Mamdani’s Playbook,” “Blue Bonds: Duck or Rabbit?,” and “The Case for Fiscal Insurgency.” 

The conversation highlights the originality and urgency of Money on the Left’s core ideas for Democratic Public Finance. Since the discussion only scratches the surface of our writings, however, we encourage listeners to consult the linked publications above for a comprehensive engagement with DPF.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

Welcome everybody. I am Scott Ferguson and I am here with my co-host Billy Sass. Say hi, Billy.

Billy Saas

Hi, Billy.

Scott Ferguson

Nice. And our guest co-host today, Money on the Left’s own, Will Beaman.

Will Beaman

Hi, guys. How are you doing?

Scott Ferguson

As good as we can be, as good as we can be. So, we are convening today’s discussion primarily to update our listeners who maybe aren’t as online as the rest of us and maybe are not as aware of some of our publication work that we’ve been doing largely during the second Trump administration. We’ve been writing a lot. Will, in particular, has been writing a lot, and really pushing the boundaries of our paradigm and its stakes and its consequences.

We want to talk about some of these publications. I think, centrally, what we want to do — and I think it’s important to begin with — is discuss our rather lengthy new work that we published, titled “Democratic Public Finance A Radical Vision for Mamdani’s New York City.” After unpacking and situating this text, or maybe along the way, we can take detours. We can talk about some of the other writings that have surrounded this work or preceded this work.

To get us going, I’ll start by saying that Money on the Left has been developing, what I would say is, a unique but dependent paradigm, a way of approaching political economy from the point of view of certain foundational premises that we, as many people know, borrow from Modern Monetary Theory, as well as certain legal theories of money that often go under the heading of a constitutional approach to money, which was spearheaded by Christine Desan, who we’ve interviewed on this podcast in the past. I think a lot of people think of us as the MMT podcast or an MMT podcast. I think there actually is a podcast called the MMT podcast.

Will Beaman

Yeah, we don’t want to get sued.

Scott Ferguson

Yeah, yeah. We’re not that one.

Billy Saas

Would they sue us?

Scott Ferguson

I don’t know. I think we’re friends. Anyway, even though we draw on these other paradigms in many ways in solidarity with them, and we might consider ourselves as being part of them, we also have developed our own approach. It felt like there are certain kinds of assumptions and other limitations in these paradigms that we feel don’t go far enough. So, we come in peace. We’ve tried to expand, to speculate, to draw out further conclusions, to iron out certain contradictions in these other paradigms and essentially, we’ve been working on our own formulation. We all have been doing so separately and in collaboration in things like peer reviewed articles and blog posts and interviews and podcasts and all kinds of media.

But, I’d say that we don’t really have a user-friendly long form statement that just lays out the basic assumptions and our document that was published on October 10th of 2025, “Democratic Public Finance: A Radical Vision for Mamdani’s New York City” does precisely that. On the one hand, it is a strategic document that’s aimed at this particular moment, at a threshold moment where we think and we hope that Zoran Mamdani becomes the mayor of New York City.

He is still a candidate, but we wrote this document in such a way that it would be addressed to Mamdani’s mayorship. So, we’re framing this in terms of a very exciting candidacy, a very exciting moment when a democratic socialist is hopefully and probably going to be elected to this office and thinking about what he can do to help fulfill his own promises that he’s making to the city, especially when it comes to fiscal policy. But it’s a double document because it also serves as a State of the Union address for us and just laying this paradigm that we’ve been working on for years and years and years. With that in mind, where do we want to start?

Will Beaman

Well, I think maybe one place to start would be a kind of a familiar distinction that MMTers are all too familiar with, which is between Modern Monetary Theory and the neoclassical paradigm. In this document, we mobilize and extend that distinction to problems and logics of governance.

There are two poles, or co-present impulses that animate and inform governance that we name, neoliberal public finance (NPF) and democratic public finance (DPF). Part of the strategy of this document is trying to not just tease out the limitations of neoliberal public finance and the possibilities of democratic public finance, but to expand both in such a way that they can speak to and be located in rhetorics that the Mamdani campaign has variously used. One thing that we talk about in this document a lot as  part of the frame is, no, Mamdani is not going out there saying “money is a boundless public utility and the idea that we need to raise taxes in order to do things is bullshit.” There are nevertheless surpluses of possibility and opportunity in a lot of the framings that he does. In a lot of ways, the DPF and NPF framing is a little bit of a code that we try to use to decode the present.

We could say some things about the nature of the kinds of recommendations that we make with this democratic public financing framework. There’s no greater lesson in the past than realizing you’ve stumbled into fascism. This is not a new insight. It is a constantly expanding and accreting insight that neoliberalism got us here. But there are certain ways that the moves and the playbook of the Trump administration via the shakedowns of public institutions, the withholding of funds —  whether that’s illegally impounding them or threatening to do so, which has a similar effect — or it is stalling and slow walking government. 

As we record this the Trump administration is withholding Supplemental Nutrition Assistance Program (SNAP) food provisioning as a means to try to pressure Democrats to stop the shutdown. All of these moves are part of a playbook of authoritarian consolidation, certainly. But the building blocks of this playbook are in some ways thoroughly neoliberal. We’ve been acculturated already into a kind of learned helplessness in the face of whatever comes down the pipe economically and so neoliberal governance or neoliberalism is already recast governance as the administration of difficult choices and austerity.

The acquisition of funds has been used for quite some time in order to manufacture crises of electability. We hear this happening in The New York Times with Mamdani. Things like, “You know, it’s good. But what if he can’t? What if he can’t convince Albany to tax the rich,” and all these kinds of things that are staging the acquisition of funds as a train that’s coming towards us. But with Trump, the mask has slipped. What we’re seeing is that the Trump administration is hijacking and choreographing with the governing habits and conventional wisdom of neoliberal public finance as a paradigm. While it’s sort of an exhausted question of, “are we still under neoliberalism or is this fascism?” but part of what I think comes out of this is that there are neoliberal habits of thought that are being enlisted by fascism. Rather than  a vocal answer of whether this is fascism or whether this is neoliberalism, it’s the dynamic between them that matters. For that reason, we see all kinds of opportunities for other logics that this document tries to open up and explore.

Scott Ferguson

I think this is a great moment to kind of step back and talk about one of the fundamental premises and differences of, what I would call, our paradigm in relationship to, let’s say, the standard articulation of Modern Monetary Theory. We know that Modern Monetary Theory has opened up all kinds of possibilities in our thinking in the collective imagination. It’s been widely popularized, obviously. At the present moment, it is not ascendant because it has been largely blamed for the so-called inflation that we’ve been experiencing, which, of course, is a reading we would utterly reject. But despite these openings there are certain tensions and even contradictions within the original paradigm, which, I just want to say, the original paradigm of MMT is not even stable.

If you’re reading Warren Mosler’s version, it’s going to look different than Stephanie Kelton’s version, which is going to look different than Bill Mitchell’s version, and so on and so on. It’s not to say that there is one absolutely airtight MMT 101 paradigm, but nevertheless, part of that MMT 101 paradigm is a commitment to a notion of sovereignty and, what they call, monetary sovereignty. What this does is relegate the power of money creation to a singular entity, at least within a given political domain that is usually called the government or the state. I think it had more historical purchase when MMT was being developed and being popularized under the Obama administration, for example, when most of the fights were happening at the federal level, and there were questions of bailouts for the financial sector. “What are we going to do with Main Street? Are we going to do the same for Main Street as we’re doing for Wall Street?” The answer was no. 

The way that the monetary sovereignty framework was articulated made sense. The political climate at the time made it easy to ignore or to not see the limitations of that framework. I’m not saying that one couldn’t or shouldn’t have found the problems with the framework before, but I do think that the political situation has forced us into thinking further. The limitations of the framework are precisely its need to relegate monetary creation powers and the possibilities of democratizing money creation to only one entity, the state at the federal level or at the highest level.

What ends up happening in MMT 101 discourse is that everybody else, all other institutions are treated as money users. Money users have to just recycle the finite funds that the government has made available. Not only does this disempower a politics of monetary creation at all other levels, both sub federal and supra federal, like internationally, not only does it incapacitate monetary politics at all those other levels, but there’s also kind of a contradiction within MMT in order to maintain this notion of monetary sovereignty. 

I’ll just try to quickly spell it out for the Modern Monetary Theory 101 paradigm, which comes out of the post Keynesian school in part, is the assumption that money is endogenous, which means it is created in the form of credit and debt out of thin air, but not just by anybody, but by powerful institutions that proceed from the public sector.

These powers are delegated out to the private sector. So, banks create credit out of thin air because they’re empowered by the state to do so. The state does so because it holds the power to do so. So, there’s this commitment to the idea that all money is endogenous. It’s all created out of thin air by institutions with the power to do so.

Great. But then if that’s the assumption, if that’s the truth, then why suddenly turn around and say “No, no, no, no, no. It’s only the federal government that can do this,” even though you, on the other page of your text, have told us that everybody does this, and you’ve certainly said this about private banks. I think what we’ve been up to is actually ironing out some of the contradictions in most articulations of MMT 101 and saying, “no, let’s take endogenous money seriously.” If it’s really endogenous all the time and it’s never finite value circulating, or it’s never an expression of the commodity form. If it’s always institutional endogenous money, then that means that money is not relegated to the function of sovereignty.

This is not to say that money isn’t a function of power. Of course it is. This is not to say that there aren’t degrees and qualities of monetary creation powers. Of course there are. But let’s stop disempowering all these other levels of governance, all these other institutions that not only could be creating money, but I would argue, they are. I would argue that states and municipalities in the United States, when they spend they are creating money. When they tax, they are taxing and buttressing the taxation power of the whole system of the dollar. They’re not mere recyclers of a finite thing. That doesn’t ever happen according to our point of view.

From that fundamental tweak and ironing out of this tension or contradiction in MMT 101, it opens up all of these possibilities for us, not just for monetary politics or monetary design in a kind of narrow sense of political economy, but also in terms of analysis of history, of political fights, of coalition building, of coalition breaking, of enduring questions and critical theory, whether that’s about aesthetics or any number of questions.

For us, we agree that money is publicly founded, it’s institutional and it’s endogenous. Let’s take that seriously and stop constraining money under the sole authority of sovereignty. In doing so, suddenly we have this wide-open field of possibilities and a wide-open field of possibilities that we would argue are vital and critical for combating authoritarianism and fascism in the United States and around the world.

Will Beaman

That’s really well said. I would add, we’re certainly not denying the importance of grappling and contending with power and authority, but in a lot of ways, what we’re arguing for is to not take power at its word as to who participates in it and who doesn’t and where agency is located and where agency is not located. When you set up these really hard binaries between who has agency and who doesn’t under “XYZ” objective conditions, and the idea of sovereignty is the epitome of this because it means exception. Exception from an overall lack of agency. The one who acts rather than the one who receives.That’s going to come back in this discussion, I think, because one of our re-framings of MMT is taking seriously reception as a point of agency too and the typical MMT story of fiscal circuits of money being spent into existence and then taxed not as functions of sovereign power, but as choreographies of issuance and reception that unfold along a lot of different contested institutions.

But just to tie this back to this critique of neoliberal public finance and the way that it establishes or to use a more phallic sovereignty metaphor, erects certain nodes or choke points or key events at which the left or liberals or the left liberal coalition has an opportunity or a window to provision society. However, it turns on whether or not we get the taxpayer to say yes or, whether or not the economy as it’s construed as a sublime external force says yes. This is not unique to MMT either. On the Superstructure podcast years ago, we were critiquing debates that were happening in the early 2020s about which theory of change is correct, as if there’s a single answer. As if change doesn’t unfold through multiple theories. Likewise, I think that the MMT’s insistence that we have this empowering mapping of where power is located and “look, at the places where it is located, it can take care of everyone.”

Nevertheless, we end up bringing back in this sort of logic of deferring possibility to the outcome of a rigged game, basically. It didn’t feel as much like a rigged game when it was 2021 and Biden seems to be a decent president compared to what I think many in the Sanders and Warren camps were expecting. But to your point, Scott, in this moment, deferral is really not an option. We also see political evidence all around us that there’s a massive appetite for politics that does not defer to some moment after the midterms or after 2028.

Billy Saas

Well, there’s something there to say about that. While it’s very exciting to consider this alongside the great success and momentum of the Mamdani campaign, there’s a certain extent of the deferral of possibility that we can also locate and attach to an electoral politics. We’re waiting for accommodation of these views by candidates and eventually people who hold office confronted, almost inevitably —  and we hope not this time —  by a kind of rhetoric of pragmatism and the inevitability of shedding possibility through the process of lawmaking and presiding and what democratic public finance also enables us to do is to look at those smaller scale avowedly non sovereign. There is no, or typically not, an army or an armed force behind the creation and circulation of complementary currencies within communities and so helping us at the same time as we encourage and continue to participate in a our own kind of realist way with electoral politics, we also look at and get excited about smaller scale interventions from the bottom up. 

That is, I think, ultimately what small “d” democrats, people who believe in democratic politics and governance, where we can almost immediately locate our agency and opportunities for participation. So, at the same time as there’s a kind of narrowing function of neoliberal public finance, everything leads to the decision of the sovereign. The sovereign is never going to accommodate, never really going to give grace, or maybe rarely and in limited form. Democratic public finance gives us a much broader path with many more forks and possibilities.

Scott Ferguson

That’s right, that’s right. I’m going to read a little bit of the intro. This isn’t the exact beginning of the text, but just to give a flavor of the text, and we will obviously provide links in the show notes for all of our listeners who haven’t been tracking our website, but largely interface with us through their ears. Here it goes:

“This document argues that building a just future requires shifting from the reigning ideology of Neoliberal Public Finance (NPF) to Democratic Public Finance (DPF). NPF constrains democratic possibilities by perpetuating the idea that money is always private, uncontrollable, and scarce. If money is scarce, so too are housing or jobs. NPF seems natural and almost unassailable, both as law and as a mode of framing collective life. It underwrites the neoliberal habit of acquiescence, which trains politicians and publics to treat fiscal sabotage as an impersonal event to be managed, not contested.

DPF, by contrast, asserts that money is an unlimited and disputable public good which can always be reorganized to serve people and the environment.”

And recall here that’s “reorganize,” not finding the money to spend for your big-ticket items.

“For DPF, money is an inexhaustible institution, involving an always ongoing and deeply public process through which societies mobilize their capacities and create their future. Imagine a city where public banks extend zero-interest credit to retrofit housing, or where a Job Guarantee program is financed through democratic credit issuance. This is the vision of DPF: not scarcity, but capacity; not limits, but collective potential.”

So that’s a nice and relatively coherent and powerful articulation of this contrast that we’re setting up. The document goes on to talk about the ways that we break up different aspects of democratic public finance as an alternative to neoliberal public finance and those four —  what we call —  strategic areas. Of course, they’re all connected. Just for the sake of writing, conceptualizing, and talking about politicizing, we name these four strategic areas. One more thing I’ll say is that each area is, at least from a conventional point of view, potentially more challenging than the next.

Now, ideological conditions could shift in what counts as the most challenging. But at the present moment, we conceive of these being ranked in order of the easiest to pursue to the hardest to pursue. So, number one is “Reframing Debt Issuance and Taxation” according to the paradigm of democratic public finance. So, all that’s doing is pointing out that these tools that everybody knows about, nobody’s arguing about whether New York City or Minneapolis, or a small county in Nevada, taxes or issues debt. They all do it. It’s a question of what it means and what are the politics surrounding it and what really are questions of responsibility and risk around these instruments. Our argument would be: that needs to be rethought and reframed.

The second category is “Mobilizing People Differently: Public Sector Expansion, the Public School System, and the Multiplicity of Credits.” This is where we talk about how monetary credits across scales of different degrees of receivability, capacity, and power are always being used in all kinds of ways to mobilize people. This is the case for airline miles. This is the case for Starbucks gift cards. This is the case for municipal fiscal policy. It’s happening all the time. But we’re suggesting that the public sector needs to get creative about the way that it actually designs systems of accreditation or of crediting that may not entirely be about high powered dollars, but nevertheless have strong, democratic, supportive, caring capacities that can work in tandem with fights over the spending, but more specifically, design and creation of high powered dollars.

Then we have category three: “Creating Public Banking and Payments Infrastructure.” We, at Money on the Left, clearly have investments in a major public banking initiative and legislation at the federal level, and also democratizing our payment system as well at the federal level. But you don’t have to just do it at the federal level. You can do it at the state level. You can also do it at the city level and at the municipal level. We’re moving into even more active, high-power dollar design, with category three. 

Category four is arguably the most challenging and that is actually: “Challenging the Deep Structure of Neoliberal Finance in Municipal, State & Federal Law.” This is us, in a way, taking our advance on MMT to the maximal level. So, I would say most of the time, MMT 101 discourse tends to take the design of the current system more or less for granted and sometimes this comes out in tropes that have been questioned within the MMT 101 movement. But there are framings like, “oh, we’re just describing what exists. We’re not saying we need a new system. We’re just telling you how it works, and you can use this system if you know how it works, you can use it for other purposes and you can do nice things with it.” Whereas we want to say, “no, no, no, there are design trajectories and constraints that are built into the system that should not be there.” 

The Constitution of the United States should not forbid sub-federal entities from creating money. That’s anti-democratic. It’s especially anti-democratic because the same federal legal structure allows for private institutions to create private credit all over these municipalities. Right? So, you’re licensing and enabling private creditors, you’re disabling public creditors. I would also say that that language in the Constitution is false, because I would say that public institutions at the federal level do actually circulate credit. They do that all the time in all kinds of different forms. So even though you might say, “oh, well, it’s against the law for a state to issue credit or to create money,” I would say they do it all the time. This is a controversial claim, but nevertheless, I think this is our position.

This fourth section is really about getting at those deep legal structures and saying those are social constructs. They were social constructs that were constructed out of struggles for power. If the left wants to really, really, really revolutionize the system and create conditions of possibility that are going to allow for genuine democracy and collective caretaking and contestation, you have to go after these deep legal structures. So, that’s the four areas. I don’t know if you all want to start with one and move toward four. Where do we want to go from here?

Billy Saas

Maybe we can move into discussion of each of them through reference to Will’s prolific article and commentary. Maybe we could pivot to that.

Will Beaman

So, I will say that because everything that we do is a collective project. All of this that we’re talking about in this document has been showing up in what I’ve been writing and, to some extent, vice versa. That’s just how collectivity works. But I would say that my madness at the beginning of the summer started with being, honestly, hypnotized by the rhetoric and communication and sophisticated aesthetic forms of the Mamdani campaign.

One of the first pieces that I wrote this summer about that, “How to New York Times-proof the Mamdani Campaign,” was, in a lot of ways, taking up the theme in the first section: capacity being where we should focus our analysis rather than on the amount of dollars that are located here and there and need to be gathered. That, of course, is very MMT 101. If you have the real resources you can afford it and money is just a unit of account. But I think there are ways of describing capacity as a process of humanization that are less developed but present everywhere. This is something that I think the Mamdani campaign does really, really well.

In that particular piece, I talked about an ad that he did after he won the Democratic primary, where he sort of broke down all of the different demographic cultural, geographic, you name it, components of his victory. In doing so, he was able to not just —  refute is not even the right word because it was so much more profound than that —  reframe Beltway pundit conversation about the conventional horizons of possibility for this or that kind of politics with this or that group of voters or voters in general, but also getting away from that very macro and reductive caricature of what is politically possible and what is considered fringe to voters as a bloc.

This video that Mamdani did basically answered in a different way how he paid for it. How did he pay for the win? This opened up another theme that I was sort of thinking about and exploring this summer, which is that, a campaign sits in a sort of a liminal space that it often occupies in our own kind of mapping of things. It’s outside of politics. Right? It’s the stuff that happens before you’re in power, so it doesn’t really count. It also is largely volunteer work. It’s off the books. It’s not part of the economy either and yet it’s a massive logistical operation with a history and with capacities. A successful campaign does what successful fiscal authority does, which is creatively reread public capacities. I drew an analogy in that piece between the way that he was talking about and breaking down the various public capacities that paid for his win. What if this was extended to how he spoke about fiscal policy through governance? This is something that, to a certain extent, we can see traces of what both he and, frankly, lots of politicians are doing already.

We want to affirm that and highlight it and connect it to a project of giving that kind of rhetoric it’s due in fiscal terms. Something that I have not yet been able to write about, because I’m now fighting for my life and my doctoral program, is a lot of his videos since then. This is drawing on my past experiences in Scott’s Film and Media Studies MA program. I’ve been hypnotized in a very similar way by how he uses the close up in this series that he’s been doing, where he tells stories of famous New Yorkers and he tells them in close up, and they often are individuals who, in this or that way, are marginalized. But the close up, as we, in film studies, know from a long tradition of writing about the humanizing qualities of the close up and of photography, has this ability to cut through preconceived reductive notions that we have about people. The close up confers dignity as well as opacity and mystery and complexity on to individuals and onto people who we otherwise think of as individuals, or we think of them as part of a group or whatever.

In an interdependent world, there are so many things that we can say about ourselves and about others. There’s this tradition in our cinema of using the close up to open up complexity rather than close it. In light of this kind of conversation about real capacity, I thought, this visual language that he’s using is light years ahead of the kinds of rhetoric that we’re used to hearing and participating in about how many hard-working Americans there are in this country. The kind of nascent or underdeveloped ways of talking about economic capacity and, in this way also, I think, because we do come from a humanities tradition, there is a skepticism that we have about enlisting people as parts of a top-down notion of capacity. It’s something we have been in group therapy for several years. Saying, “well, you’re an economic asset,” as if to reduce. 

In so much of Mamdani rhetoric, by focusing in the visual language of the eye contact and the close up and the storytelling and the way that he tells another person’s story, both you and that person, because the direct address in these close ups is ambiguous, he does so as the government or as a public representative. Talk about transcending the confessional mode. To me it has been opening up a world of thinking about all the different ways that we already humanize people in visual and aesthetic and rhetorical forms and how tragically disconnected that often is from the language that we use to talk about what we can do as a city. Or what we can do as a society and a culture in ways that interface directly with fiscal politics? That’s one throughline that shows up also in this document that we all collectively worked on, which says basically, it’s the capacity that you need to pay attention to.

We already build the city every day. We don’t need a permission slip from somebody who sees themselves in mutually exclusive terms as the taxpayer, or the benevolent billionaire who will create jobs, but only if you’re not rude. We don’t need to route our own self-understanding through those dehumanizing prisms and chokepoints.

A big part of the first section that’s really important to me is identifying within Mamdani’s own rhetoric both ways that he’s already talking about capacity that shift the conversation away intuitively from “how are you going to pay for it?” because once you’ve done an entire campaign talking about all the ways that something is physically and materially and socially, culturally, etc. possible to do, then for “how you pay for it?” to come in at the 11th hour reads as more transparently sabotage than it does in the kind of current neoliberal mode of politics where we take it for granted that “how you pay for it monetarily” is basically a proxy for how you pay for it materially, because all material things have to be paid for, therefore, paying for something monetarily is basically just another way of saying, “can we do this?” And the answer then is always “no,” because Albany says no.

Scott Ferguson

Another part of what you’re talking about that I find to be so powerful, and it is something that is in Mamdani’s rhetoric and with even further amplification and connecting it to fiscal politics, can be just so vital, is really revaluing people. In this case, in New York City, people that are currently —  under the neoliberal order and the fascist neoliberal order —  seen as liabilities, as drains on the system as they drain away our tax dollars by using their SNAP benefits. Instead, seeing our community members who might be struggling with employment or who might be struggling with finding a secure home, revaluing them as assets that are not being utilized. Seeing them as qualitatively rich, interesting community members that we’re just abandoning and we’re failing to value.

To be honest, I would say that’s even latent in MMT 101 as well. I think the way that Mamdani is using his communication strategies, his rhetoric and his policy framings is pushing us more in that direction. Now, I want to leave to another related topic in which I would say, at least on the face of it, it’s less of an analogy to money, but it’s Mamdani getting closer and closer to money. Now, I don’t think any of us think that “there’s money in itself and then there’s other things that are not money.” You know, we understand that sort of everything is money. Nevertheless, right over the summer and into the fall, Mamdani has been using certain proto or just straight up monetary designs in order to mobilize people. One of them is something called the Zetro card. Does somebody want to unpack the Zetro card and what he’s been doing with the Zetro card?

Will Beaman

Sure. We wrote another piece at some point in the past few weeks about that, which was sort of a tongue in cheek, a serious / not serious / but actually serious piece saying that the Zetro card could be scaled up and used to save New York City.

And what is the Zetro card? It began early in the campaign. It’s a very playful punch card that is obviously a pun on the Metro card, but with Z for Zoran, and this is a kind of an interesting detail of it. It emerged as a way for the campaign to sell merch beyond their legal allowance to do so. What this was was if you participate in canvasses and phone banks and whatever, the Zetro credits are issued and you can trade those in for posters and and merchandise, and it’s such a great example of what we’ve been calling a duck rabbit problem, named after the famous optical illusion from like 100 years ago. It is that image where you look and ask if it is a duck or is it a rabbit? It depends on which you see first, but after you see one, you probably are then going to see the other and then you can see both. It’s such a great figure for this paradigm, where, on the one hand, this is a punch card and this is just moving posters. Who cares? It’s playful and it’s fun. But on the other hand, it does have all the elements of the entire thing that we’re pitching already in miniature, right? Right down to the fact that it began as a creative workaround to legal limits.

Also, I think it exploits, in a good way, the category error that something being part of a campaign does for people, where you hear, “Well, it’s not real though, so why would we even scrutinize this?” That cuts both ways, right? Like, we had a lot of people saying like, “dude, I’m pretty sure it’s just a punch card,” and fair enough. It is just a punch card. And yet it also is not right. You see the punch card, rabbit or you see the endogenous money duck.

Scott Ferguson

And, dude, those fed notes are just like pieces of paper.

Will Beaman

Yeah. It’s all just bitcoin. What we actually have is a fiscal circuit. That is, credit being issued and redeemed in order to provision work and mobilize capacity. What we talked about in that piece is we sort of mocked up what it might look like to continue the Zetro card as a campaign practice after the campaign is over.

This draws on legibilities like the Bernie Sanders campaign, which talked about campaigning as something that you do year-round. AOC talks about this as well. One of the reasons that she always performs so well in her district despite being probably the most caricatured and villainized politician in the country, is they never let up on the infrastructure of communication and engagement with their constituents, including but also beyond, of course, all the ways that you would help your constituents during your day job when you’re a politician. But they also never stopped canvassing. They never stopped campaigning. I would argue there is precedent for that. But we thought through what some sort of micro steps could be that are still in the realm of being playful. To be clear, fiscal policy should be playful.

How can we be playful until we pull the wool out from over their eyes? I could very easily imagine a lot of the organizations that make up the Mamdani coalition accepting Zetro credits in exchange for part or full payments of membership dues, of ways to deepen participation in an organization to get opportunities for speaking time at meetings, to gain access to certain leadership positions.

All of these, of course, raise all kinds of ethical dilemmas to work through, but these are the same ethical dilemmas that already exist in organizations, which is —  it’s sort of is the classic problem —  when you say that there’s that there’s no hierarchy, you leave it up to all the implicit hierarchies in the world to decide who gets access to what.

Who you know and who you have good credit with becomes a way of controlling and gatekeeping one’s way of relating to opportunity within an organization. This is similar to employment. We thought initially of some first steps that the Zetro card could take in coalition with partnering institutions.

One could also imagine worker-owned co-ops and restaurants and DSA bars that are frequented and run by members accepting these on a particular day and then that turns into a full-time thing and so on. But what’s really kind of interesting in thinking about this is that it can scale and it can keep scaling in very kind of non-linear and cascading and unpredictable ways, because if this were to become a very popular thing, one could imagine co-ops and unions and organization chapters and other campaigns, even, accepting Zetro credits and maybe issuing their own credits, which then can be accepted by the same organizations that accept Zetro credits. Right. Then all of this can eventually interface with the kind of longer-term legal changes and transformations that we’re trying to loosen the always loose and imperfect distinction between what is the official and the unofficial currency, because they’re predicated on a falsehood.

What does it mean to issue money versus just issue credit? What is a harmless gaming currency and what is shadow banking? All these things that are malleable, but that we’re used to thinking of their malleability as being a function of the fact that it’s the rich and the powerful who promote these things. The Zetro card is an ongoing campaign technology. I hope that it continues after the campaign ends, but it also is just an interesting kind of pedagogical thought experiment for thinking through and living and embodying this way of seeing fiscal policy.

It also is just so emblematic of Mamdani’s whole style, which is to introduce playfulness and games. We can talk about the famous scavenger hunt that he did in New York City as well. But these games that provision a campaign, they provision participation and nurture capacity and keep people limbered up and ready to get out to vote and ready to volunteer and keep those keep that muscle memory fresh.

Scott Ferguson

I think another thing that the Zetro card participates in and opens up is, what MMT discourse gets called, the hierarchy of money. The fact is that the campaign used higher power dollar credits, which they got through donations to pay vendors to make the merch. Then they’re redeeming the Zetro card credits by giving people this merch, but that merch wasn’t free. I think the lessons here are multiple. One is, for us, there’s no such thing as autonomous money. There’s no autonomy at the level of the so-called sovereign. There’s no autonomy at the level of a community currency or a Zetro card. It’s interdependence all the way up and down. So, get rid of the dream of autonomy, it doesn’t work. 

Two, its lower-level credit is always participating in higher level credit and vice versa. Higher level just means more receivability, more, what we call liquidity, wider receivability and with that comes power. With that comes capacitation. But still the lower forms of credit are not nothing. I think we want to get past this idea that, “oh, well, at the end of the day, you know, what matters is real dollars, buy the merch and all this fuzzy, silly credit that’s being issued and redeemed to this Zetro card is a bunch of hot air, right?” Or it’s not really real, when in fact, no, that’s actually how the dollar system works all the time. It plays out through this interdependent hierarchy and those so-called lower-level orders are qualitatively different. But I would say they are just as important. They’re just as important. I mean, this was really noticeable in the 18th and 19th century when you had different banks issuing their own liabilities.

Then you would have all of these complicated payment schedules and redeemability. There would be charts that tell that the Bank of X’s notes are only worth this much when you go into that state. It was a total mess. But you had a sense that without your local bank that creates the credits, you’re fucked, right? Like those lower-level credits that might not be quite as stable are still your lifeblood. Coming back to all the activity that the Zetro card mobilizes in one of the most important cities on the planet, it is tremendous. So that lower-level credit is deeply, deeply meaningful. It’s political. It can be democratized. You can be creative with it, but not in a way that pretends that it’s somehow autonomous or that you don’t have to deal with those higher-level credit issues at the same time.

Will Beaman

That’s fantastic. One other thing that I would add before we move on is, I think that whether it’s the Zetro card or the scavenger hunt that Zoran did over the summer, I think we make a mistake if we make the sovereignty mistake. If we attribute these just to the charisma of Mamdani, or just to how infectious his smile is and all of that. In order for a smile to be infectious, we have to want to smile. It demonstrates that there is a deep capacity that that I suspect has a history of in politics that, for fiscal politics, politics of participation and circuits of coordinated activity in the public interest that are not on the rhythm of taxpayer funding showdowns and the impoundments of funds and what did Donald Trump say and how are the markets going to react to it? All that kind of stuff. 

I think in a lot of ways, what Mamdani is recognizing is that there is an already existing desire for somebody to charismatically convene people to have fun. Something else that I’ve been writing about in the context of brat summer with the Kamala Harris campaign and Dark Brandon before that, the caricature of Biden, is that the coalition will come up with charisma for you even if you don’t have it. There are genres, and camp is a big one for moments when there’s a big gap between who the politician is and who you want them to be. There are genres that are rehearsed and practiced and that are activated again and again that signal and extend the charisma and the authority to convene people to politicians on the condition that they don’t suck. On the condition that they don’t betray the coalition. I think that this is what differentiates Mamdani, obviously, from Harris and Biden.

I think that Harris and Biden saw their star power as somehow a reflection on themselves, rather than as a long-cultivated expression and desire on the part of voters for a Dark Brandon or for a brat figure, or for any of these figures. So, I think that, were Mamdani to take this all for granted and pivot to the center, my hunch is that people would stop showing up for the scavenger hunts. I think that this provides an alternative framework in very rough, hand-wavy terms, to get at what I think sovereignty is always trying to get at, which is this authority as differentiation, as seeming ability to convene people. But if we misread that as power from outside society ordering society around, then we take for granted all the ongoing coordination and cooperation and fantasy and desire on the part of people that makes authority work. When we think in these terms, then we can see Trump’s fiscal politics as an extension of his whole persona, which is something that the far right has been rehearsing since Obama, or earlier than Obama. This desire for a sovereign for a Dirty Harry-type figure who’s going to be lawless and ruthless and hypocritical and all of that means, basically, that you’re going to be protected as a follower from being held accountable because you too are unaccountable.

That’s a certain form of governance and of authority, or a currency, if you will. But it’s not the only one. It’s actually really important to be attentive to it as a genre rather than as the new political world that we’re living in where everybody needs to copy Trump, which is, I think, how Gavin Newsom, for example, has read this moment. When we see these moments of a star just seemingly emerging out of nowhere as something more like a franchise that has been rehearsed from the bottom up or maybe we would say from the middle out, to be granted with conditions, or without conditions in the case of Trump, although I bet if Trump started to respect other people, the franchise would shut him down. There are even still conditions there too, right?

Scott Ferguson

Right. We should say just outright, his unaccountability is a collective project. It’s not coming from an autonomous place of absolute power that everybody just bends the knee to. It’s that there is a whole infrastructure of people and organizations who carry out that unaccountability collectively, because that’s what they want to happen. Right? It’s the same structure, but it’s just used for evil.

Will Beaman

In the context of a little experiment, like the scavenger hunt or the Zetro card or looking at a campaign and turnout as being like a miniature fiscal event or a miniature employment event, we can maybe think, or we can rethink a lot of the sovereignty-derived insights of MMT, like the finance franchise being an extension of sovereign power to banks from the fiscal authority.

If we see the fiscal authority itself not as a sovereign in itself, but as a collective public project, then we are able to see genres and forms of franchise as collective public projects as well. I think that that’s just another bridge that sort of allows us to do an end run around this whole thing and connect these seemingly nonpolitical or superfluous or silly campaign techniques before so-called power has been taken to governance and authority.

Billy Saas

I wanted to add that I think what the Trump constituency that was ready to realize the franchise was responding to is that he’s willing to hang out with them for extended periods of time and just shoot the bull for hours and hours at these campaigns. Maybe we can round out the conversation by coming to two of the more recent Vertical pieces, one of which very helpfully categorizes or names within the realm of democratic public finance what the Mamdani campaign is up to and what other campaigns and what other constituencies can aspire to, which is fiscal insurgency. This is a phrase that I like quite a lot and that captures and describes what we’ve been talking about. So, I wonder if we can talk a little bit about fiscal insurgency as a kind of broad framework within a framework. Maybe we can close out with a more recent piece on “The Paradox of Political Thrift” and maybe, not to game out Mamdani’s chances, but we can take stock of the scene and note all of the idiosyncrasies and exciting developments we can notice here in the end of October 2025.

Will Beaman

Yeah, absolutely. So that one is my term, but it expresses a lot of the same things that we are expressing in the DPF and NPF concepts in the “Mam-document” that we’ve been circulating. Listener, I want you to know that both of my co-hosts laughed, but they’re on mute.

Scott Ferguson

I’ve unmuted so I can guffaw audibly.

*laughs*

Will Beaman

Okay. Thank you. These [laughs] are my back pay. I’m playing with the idea of insurgency and occupation here. I mean, I’m not really playing with it. I’m obviously thinking about it for very reasonable reasons. Typically, we think of an insurgency as sort of a military term, and we often lose sight of what makes insurgent campaigns successful, whether they’re peaceful or not. To be absolutely clear, we are peaceful. We come in peace in all ways. It is a recognition that you have to be embedded in society, and you have to look to and lean upon infrastructures that already exist.

I think that what we have been articulating in the “Mam-document” and also in a lot of these other Vertical pieces and in this conversation, is that agency is actually all around us. If we take the neoliberals or the fascists at their word, that agency is over there, not over here —  wherever “here” may be —  then we end up being duped by a rigged playbook. So, in a context where Trump is threatening to impound funds or when the state of New York and Albany was, in a liberal idiom, threatening to withhold funds for Mamdani’s plans, it changes the entire dynamic of that situation. One could model and conduct and enact fiscal agency without routing it through these rigged choke points. Fiscal insurgency is my name for that. It’s ultimately a historical phenomenon that we see in places where, for political or for economic reasons too, like in the Great Depression, if credit is not available to employ people to keep patterned payments that stabilize social obligations moving, in those contexts, if all that dries up, people still need that and the fact that credit is endogenous comes out in all kinds of ways. 

The Greenback, during the Civil War, was issued when private banks were unable and unwilling to finance the union’s survival and tax dollars were not enough, the Army was mobilized, and the war effort was mobilized with these things called Greenbacks. World War Two, we had a bond drive. In the Great Depression, we have all kinds of, so-called, low-level currencies that emerged as municipal notes. Before that, in the 19th century, banknotes were all over the place, some of them on a very crypto-style imaginary, being these entrepreneurial institutions on the literal frontier of American imperialism out West. There was a free banking movement. You also had lots of credit experiments and rhetorics of talking about money that were grappling with ethics and grappling with interdependence and grappling with real problems of liquidity being absent.

Fiscal insurgency is – and I’ll just I’ll quote from this from this piece here:

“Fiscal insurgency is not isolation. It is not about retreating into localism or walling off states from the national economy. It is about building protective circuits of credit that keep democratic life functioning even when sabotage is staged from above. Insulation means refusing to let billionaires or authoritarian actors dictate the terms of survival.”

I also think that this contrasts very sharply with Gavin Newsom. He’s a very mixed bag, and ultimately, a lot of the wavering on transphobia and on civil rights is disqualifying full stop, but Gavin Newsom has sort of become an early emblem of Democratic local electeds creatively resisting the Trump administration.

Pushing back on Trump’s redistricting is obviously good, but there is, I think, an overall vibe of countering Trump’s illegality with the same until he backs down. “We’re going to fight fire with fire identically.” A lot of the rhetoric that’s been coming out of Newsom’s office and among his boosters is throwing around ideas like “if we stop funding the federal government in order to teach the red states a lesson,” or proposing different versions of what they call a “soft secession.” As an aside, it’s mind boggling to me that you can talk about soft secession and not make as many waves as when you talk about creating credit. I should say ruffles as many feathers. I wish you could create waves talking about creating credit.

I think that this framework of fiscal insurgency refuses zero sum logics and doesn’t try to counteract them by saying, “well, actually, it’s the Trump administration who represents the welfare queens of society, which is all of the places in Appalachia and Mississippi who are voting for Trump, but if it weren’t for the taxpayers in California, they wouldn’t have jobs or health care.” The other thing that the idea of insurgency is sort of trying to answer is that — and this goes back to the scavenger hunt —  it is possible to claim continuity and stability as a form of resistance. I think that the left’s playbook often, especially owing to a lot of inheritances from the Marxist tradition and the labor movement and all of that, has a very mixed legacy of both. I want to differentiate between instances that I think are not always differentiated between. There’s strikes and striking and the withholding of labor.

To be clear, I love a strike and support a strike. But there are also instances where workers have staged takeovers of factories, and they’ve done various things to keep the world running rather than stop it. I would want to trouble this binary between keeping the world running and stopping it anyway. Right now, we’re in the middle of a government shutdown that’s absolutely necessary in order to put pressure on the incentive structure of the Republican Party and the political infrastructure that supports it. There’s all kinds of reasons why strikes are incredibly effective in doing that, but when you import that logic to money and you think about, “well, our only tool in the toolkit must be to stop paying taxes, which fund all spending and bring everything to a halt,” you’re playing into the Trump playbook, which is showdowns. These are showdowns predicated on money being finite. I see opportunities and openings for a rhetoric of fiscal insurgency in the improvisations and coordinated efforts of blue state governors, but I also see neoliberal public finance present too.

That is my idea with the fiscal insurgency and maybe, Scott, if you want to tie that back to the Mamdani document before we go on to the other Vertical piece, I don’t want that to fall by the wayside.

Scott Ferguson

Yeah, I think that one of the things that this brings to mind is the multiple time horizons that we have in mind in structuring the “Mam-document,” which I’m just going to constantly say for eternity.

Will Beaman

The term is going to be in the show notes.

Scott Ferguson

Yeah. So, on the one hand, we offer strategies for immediate needs. In terms of legibility, those are the lowest hanging fruit, which would start with just reframing the function of taxation. There’s a massive tax the rich campaign in New York City, right now, and we support it. Every billionaire is a policy failure that remains true. Tax the hell out of them. In the short term, that is going to, as we can put it in a technical sense, increase your dollar balances, New York City. You can spend those high-powered dollars to build municipal grocery stores and make fast, free, and easily accessible buses and more.

In terms of bond issuance, we have something we haven’t talked about yet. Early on in this year, we were trying to think of immediate, legible fiscal strategies for resisting the Trump administration and resisting what was at that point, largely illegal impoundments that were cutting federal financing for vital services and institutions that help people live and work and have homes and eat and have health care. So, we proposed a bond drive to save democracy, and we called it and still are calling it blue bonds. A blue bonds bond drive. Blue for democratically controlled states because we associate the Democratic Party with the color blue. So, we’re calling them blue bonds for that reason.

Those are immediate strategies for getting high powered dollars into action to help people now. But we also have longer time horizons and more long-term strategies. One is challenging these fundamental laws, balanced budget amendments in state constitutions. When it comes to New York City, the so-called fiscal crisis of 1975, was one of the watersheds that ushers in the neoliberal era. It came along with a lot of new constrictive neoliberal fiscal laws about how much debt the city can issue in the future. All kinds of rules about budgeting to rein it in and keep it under control. Those rules were created by humans. They can be recreated by humans; they can be restructured by humans. But those are long term fights. They’re not going to be immediately legible to the public. But if you have a movement that is legible around, say, a Mamdani administration, then you imagine a way in which those long-term fights get introduced and become more and more exciting and more and more legible.

But there’s other long-term horizons that aren’t just about resistance but are about provisioning. This gets us back to area two, mobilizing people differently through creating credit at the sub federal level. We’ve been talking a lot about this at the level of the campaign, at the level of organizations. I love that you just passingly mentioned DSA bars that will create and redeem these credits, but we also have long term vital institutions in the city and everywhere else, quite frankly, that we can be reorganizing and thinking in terms of endogenous credit making. The big example that we give in the “Mam-document” is using the public school system.

So, the public school system is, in multiple senses, an accrediting institution. Students earn credits by going to school and by completing their schoolwork and by becoming educated. The schools themselves are a credit. They’re given credit to operate as schools by accrediting agencies that are themselves accredited by the government to be able to make those accrediting gestures in the first place.

There’s a whole hierarchy of crediting here, and you don’t need to build them from scratch. They’re already here. What happens if you start thinking more in terms of a public service economy and thinking about an end aim being something like a Green New Deal that has a public service component and a job guarantee at the heart of it.

So why not start in kindergarten? Why not start in first grade, second grade and start to do little baby steps here? Literally almost. Babies are almost literally baby steps toward public service. It’s not just a matter of providing institutional credit that isn’t dollars, but institutional credit for service labor. That’s going to benefit the school; benefit the society around the school, the neighborhoods around the school. It’s not just a matter of doing that, but it’s also a matter of being creative along the way. I love this, and this was not me. I didn’t come up with this. It was another member of our organization.

I love this example so much. So, the idea that we propose is this: you start a program where grade schoolers are helping to clean up their classrooms and their hallways. Right? And you know what? They already do this in Japan, and they probably do this in some places in the United States. But it’s not as routinized as it is in Japan. I’ve seen it with my own eyes. It’s incredible. Maybe the younger kids mostly take care of the immediate classroom and the hallways. But maybe the older kids are going off campus. They’re maintaining and beautifying the environment around their campus.

It doesn’t have to be just that. It can be any number of public service activities. I mean, it could be fun things. The sky’s the limit, right? But you’re providing various kinds of credit and that could be just your participation grade. It gets factored in your participation grade. Or it could be something more major, like, “here’s a certificate for a year’s worth of public service.” It could be any number of ways of accrediting and this such a cool idea as a specific idea, but as a model, it’s to me amazing.

So, if you’re having kids doing, let’s say, what might count as janitorial work, right? Well, then what’s going on with the janitorial staff on campus? Well, the janitorial staff are the experts. They know what cleaning products work on which surfaces. You might think Windex is a good idea, but actually this other scrub is a good idea and use this kind of rag because this other kind of rag isn’t going to work. They have expertise. Why don’t we enlist the janitorial staff as pedagogues, as teachers who can teach, who can teach and help supervise and orchestrate this kind of work. The next part we do with a nod to the Mamdani campaign which is promising to reclassify preschool teachers as teachers that will give them the dignity of a certain status with certain kinds of benefits. I don’t know the ins and outs of it; I just know the basic move that they’re trying to make. What if, as part of this reorganization of crediting public service work, we change the designation and give a new kind of credit to janitorial staff? Now the janitorial staff are teachers and maybe the culinary staff, like the people who work in the cafeteria, maybe they get to be pedagogues, too and they’re teaching. They’re teaching cooking and place setting and cleaning up after everybody dines. What does that do? That can raise the pay, that can create certain kinds of tenure benefits for janitorial and cooking staff.

Suddenly you’re conferring new kinds of dignity, new kinds of credit in an institution that’s already enduring and powerful that a lot of people in society really, really value. They value the fact that they have these public schools, which are free, and they can trust to send their children to even though we’re in the midst of them being increasingly defunded, etc.

So, what would it mean to build up a scenario like that? To be transvaluing the people who participate along the way and essentially recreating the class structure that’s built into our public school system at the present. Then we can start thinking about, “if we’re taxing, we’re issuing bonds, and what if we’re creating a public banking system and opening up our higher power dollar balances at the same time.” If we’re working on that horizon at the same time, then we could start talking about a job guarantee at the level of the city.

So maybe that starts out of the school system, as there’s a teen unemployment crisis around the country right now, and there’s definitely one in New York City that they’re very aware of. What if you start a pilot job guarantee for whoever qualifies as the most vulnerable of teens in New York City? You start there.

You see how it goes. Maybe there’s a path to post-graduation employment. Maybe that path is subsidized. Maybe it’s in the public sector. Maybe it’s with nonprofits, with the public sector, supplementing the salaries for a certain amount of time or in perpetuity for these jobs. Then from there, maybe you expand it to all teens, whatever it is, 16- to 18-year-olds, or whatever we want to decide it’s going to be. 16- to 18-year-olds in New York City are guaranteed a public job.

Then from there you start piloting, opening it up to more and more people and then once you’re really rolling, it becomes a citywide job guarantee organized toward the goals of social justice, inclusion, community building and green sustainability. To me, and I’m saying this because I didn’t write this part of the document, that is such a powerful vision of not just what’s possible, like in a particular sector, but for what’s possible in general.

I think what we were talking about before with the Zetro card and coalition credits is equally a part of this project. But I do think that the education model might speak or might light up imaginations for certain people precisely because these feel like long existing stable institutions can support it, without having to build it from the ground up. Not that I’m opposed to building from the ground up either.

Will Beaman

I’m salivating listening to that. That’s amazing. It occurs to me that this also resonates in a really interesting way with a theme of this campaign and the very contested discourse which is another institutional logic of carcerality and the way that a lot of how Mamdani has framed his reforms to the police state is in terms of, “well, police fight violent crime, they’re not they shouldn’t be social workers. That’s not fair to expect of them.” Of course, we should say that there’s tons of really important work and thinking and activism around creeping carceral logics that are present within the school system. So I don’t want to oppose them as institutions that are lived in, but the vision of schooling that you are referring to as one that views pedagogy in such a broad way that it enfolds a lot of work that people do as also being pedagogical work, sits alongside this other discourse that we’ve been having, which is how the solution to everything is to arrest people and put them in prisons. It’s interesting because I think this is another case where there’s sort of subtle discourse already happening about classification, which of course ties back to our earlier conversation about valuing assets and the dignity that attention to some of the pedagogy that everybody in a school setting is participating in, which is often subsumed or erased by this fraught and racialized imaginary of care work that is invisible, “but I don’t know who’s around my kids” and all of that kind of stuff. This is, to me, a different way of conceiving care as pedagogy, I love it. I’m all about it.

Scott Ferguson

We should probably also say something about, strategic area three of the document: “Creating Public Alternatives to Commercial Banking and Payments.” We are supporters of the public banking movement. We’ve been outspoken supporters at the federal level. Of The Public Banking Act. This kind of politics of public banking should be taken to the state or municipal level.

We’re not alone in this. There’s a whole public banking movement that also is interested in this as well. Connected to this is also developing a public payment system, what has been dubbed like a public Venmo. We’re really following a friend of the show, Robert Hockett, Cornell law professor who has worked with various politicians at the state level in New York and has written legislation that has not passed yet but has been proposed several times. So, we’re really piggybacking on Hackett’s work and all the supporters of Hackett’s work to create public banking and to create these public payment systems. In the research that we did, it seems like even though this was all proposed at the state level. By the way, Mamdani has, as an official, supported those. This is not news to Mamdani.

Will Beaman

The horizon of it might be news, the horizon that we want to do and how it leads to a complementary currency and all of that.

Scott Ferguson

Yeah, exactly. In our research, it seems like there’s a possibility in which you don’t have to get Albany fully on board for the full bill for establishing a New York state public banking system. You would only need Albany to add an amendment to a specific clause in state law, which essentially bars corporations from acting as banks and the amendment would just be, you know, “except for New York City’s public bank.” It would just exempt it. That still would be a fight. If you had the “tax the rich” energy behind that fight, then that fight might be winnable. What happens when you have a public bank? 

Well suddenly you can bank all the unbanked people. You can push the private industries that are currently serving and exploiting those people, like the payday lending industry and the credit card industry, who are taking these vulnerable people who don’t have money and don’t have banking resources, and charging them through the nose with high interest rates that they cannot afford.

To have a public bank, you can immediately include people who have been excluded. You can also create a whole system of public investment that is predicated on low or no interest loans, and we’d have to look into the legality of all this. The major requirements for the loans are primarily to realize specific qualitative social and ecological goals. If you realize those goals, then you can continue to get low or no interest loans from the public bank. So you can democratize and socialize investment in that way while pushing out exploitative, private financial firms. Then the payments system side of this also has been developed as a legal framework by Robert Hockett, again at the state level.

If you’re pursuing a public bank at the level of New York City, you then will have the legal framework that opens up the possibility of creating a payment system as well. It can be digital. It can work through an app. Our colleague, Rowan Gray, is really interested in something that’s called e cash. This allows for digital payments to work with the kind of anonymity and privacy protection that traditional paper note and middle coin cash does. You can experiment in all kinds of different ways with this.

It doesn’t have to just look like a Venmo app. I mean, that could be one interface, but it could be any number of things. This puts pressure on credit card companies. I actually think —  to speak slightly like a Marxist —  I actually think that this would be extremely attractive to the petty bourgeoisie, you know, mom and pop bodega owner.

Will Beaman

I was just going to say, as we’re recording, there was a really fun, cool speech that he gave with an organization representing bodegas.

Scott Ferguson

People who run businesses in the city who are not major corporations. They are sacked with transaction fees left and right by Visa, Mastercard, etc., etc. and they hate it. My late father in law, he didn’t live in New York City, he lived in a small town in Iowa, but he had a small shop. He was a shoe repairman and sold clothing as well. He hated the credit card companies. No, he was no progressive or radical or anything, but I could totally see him going like, “oh, wow. Yeah, I can just have an electronic payment system in my store, and I don’t have to pay more for it or charge customers more for it. Sign me up.” This is just the tip of the iceberg. I mean, there’s so much that you can do and there’s so much that can be changed and so much collective fiscal capacity that could be unlocked if we pursue a citywide public banking and payment system.

Billy Saas

That’s excellent. I think it’s a good place to leave it.

Will Beaman

Thank you so much.

Billy Saas

Listeners, you can check out all of this stuff we’ve been talking about on Money on the Left dot org and also on Monthly Review Online.

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

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

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

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

William Saas

Caroline Levine, welcome to Money on the Left.

Caroline Levine

So great to be here.

Scott Ferguson

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

Caroline Levine

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

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

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

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

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

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

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

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

Scott Ferguson

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

Caroline Levine

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

Scott Ferguson

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

Caroline Levine

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

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

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

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

William Saas

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

Scott Ferguson

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

William Saas

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

Caroline Levine

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

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

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

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

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

Scott Ferguson

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

Caroline Levine

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

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

Scott Ferguson

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

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

Caroline Levine

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

Scott Ferguson

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

Caroline Levine

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

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

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

Scott Ferguson

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

Caroline Levine

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

Scott Ferguson

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

Caroline Levine

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

Scott Ferguson

I took it!

Caroline Levine

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

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

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

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

Scott Ferguson

Thank you.

William Saas

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

Caroline Levine

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

William Saas

Even modestly.

Caroline Levine

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

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

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

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

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

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

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

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

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

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

Scott Ferguson

And it’s everywhere in stories!

Caroline Levine

It’s everywhere!

Immigration. Yes. Climate change, tourism…

Scott Ferguson

Motels.

Caroline Levine

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

Scott Ferguson

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

Caroline Levine

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

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

Scott Ferguson

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

Caroline Levine

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

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

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

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

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

Scott Ferguson

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

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

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

Caroline Levine

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

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

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

Scott Ferguson

And everybody is ready to play along.

Caroline Levine

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

Scott Ferguson

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

Caroline Levine

Yeah, right.

William Saas

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

Caroline Levine

I am so thrilled.

William Saas

Thank you.

Scott Ferguson

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

William Saas

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

01;10;47;07 – 01;11;24;05

Caroline Levine

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

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

Scott Ferguson

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

Caroline Levine

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

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

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

Scott Ferguson

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

Caroline Levine

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

William Saas

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

Caroline Levine

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

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

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

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

Fadhel Kaboub, welcome to Money on the Left.

Fadhel Kaboub

Thank you. Thanks for having me.

Scott Ferguson

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

Fadhel Kaboub

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

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

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

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

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

Fadhel Kaboub

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

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

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

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

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

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

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

Scott Ferguson

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

Fadhel Kaboub

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

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

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

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

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

Maxximilian Seijo

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

Fadhel Kaboub

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

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

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

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

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

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

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

Maxximilian Seijo

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

Fadhel Kaboub

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

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

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

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

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

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

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

Scott Ferguson

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

Fadhel Kaboub

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson

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

Fadhel Kaboub

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

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

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

Scott Ferguson

And as a result, political sovereignty.

Fadhel Kaboub

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

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

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

Maxximilian Seijo

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

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

Fadhel Kaboub

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

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

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

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

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

Scott Ferguson

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

Fadhel Kaboub 

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

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

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

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

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

Maxximilian Seijo

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

Fadhel Kaboub

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

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

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

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

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

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

Scott Ferguson

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

Fadhel Kaboub

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

Scott Ferguson

Understood. 

Fadhel Kaboub

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

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

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

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

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

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

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

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

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

Scott Ferguson

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

Fadhel Kaboub

It’s a pleasure. Thank you.

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

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

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

William Saas 

Vijay Raghavan, welcome to Money on the Left. 

Vijay Raghavan 

Thanks for having me. 

William Saas 

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

Vijay Raghavan 

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

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

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

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

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

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

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

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

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

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

William Saas 

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

Vijay Raghavan 

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

William Saas 

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

Vijay Raghavan 

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

William Saas 

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

Vijay Raghavan 

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

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

Scott Ferguson 

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

Vijay Raghavan 

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

Scott Ferguson 

That’s a huge leap, right?  

 Vijay Raghavan 

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

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

Scott Ferguson 

Moudud? 

Vijay Raghavan 

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

William Saas 

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

Vijay Raghavan 

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

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

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

Scott Ferguson 

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

Vijay Raghavan 

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

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

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

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

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

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

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

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

Scott Ferguson 

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

Vijay Raghavan 

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

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

Scott Ferguson 

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

Vijay Raghavan 

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

Scott Ferguson 

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

Vijay Raghavan 

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

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

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

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

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

Scott Ferguson 

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

Vijay Raghavan 

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

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

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

William Saas 

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

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

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

Vijay Raghavan 

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

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

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

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

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

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

Scott Ferguson 

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

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

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

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

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

Vijay Raghavan 

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

Scott Ferguson 

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

Vijay Raghavan 

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

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

Scott Ferguson 

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

Vijay Raghavan 

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

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

William Saas 

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

Vijay Raghavan 

Thank you both. Thanks for having me.

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

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

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

Music by Nahneen Kula: www.nahneenkula.com

Heterodox economist Jamee K. Moudud returns to Money on the Left to discuss his new book, Legal and Political Foundations of Capitalism: The End of Laissez-Faire? (Routledge, 2025).

The phrase “institutions matter” is a common refrain among economists, including many who have proposed progressive alternatives to free market fundamentalism. For Moudud, however, this proposition doesn’t go far enough, leaving a host of problematic assumptions unquestioned. To remedy this, Moudud draws on the Original Institutional Economics and American Legal Realist traditions to propose a robust theory of legal institutionalism or institutional political economy.

At its core, Moudud argues, society is a political community founded on property rights, money, credit, constitutional law, and legally-endowed corporations. From this premise, he concludes that laissez-faire has never truly existed and that seemingly natural dichotomies between “state intervention” and “deregulation” or “free markets” and “market failures” are as baseless as they are false. Moudud’s book, by contrast, urges us to engage with legal-economic theory and history to understand what institutions are and what economic regulation truly means. He asks: How does law order the economy? How does money shape power relations?

Legal and Political Foundations of Capitalism should be of interest to readers of economics, law, and public policy, as well as those in international and development studies or anyone seeking to explore progressive alternatives in this period of multiple crises.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson 

Jamee Moudud, welcome to Money on the Left. I should say, welcome back to Money on the Left. 

Jamee Moudud 

Thank you so much for the invitation. It’ll be a lot of fun talking to the two of you. 

Scott Ferguson 

We’ve invited you to speak with us yet again. I think you were first on Money on the Left in our inaugural first year. I think it was back in 2018.  

Jamee Moudud 

I think it was ages ago. 

Scott Ferguson 

At the time we spoke to you about the law and political economy and modern monetary theory nexus with a special concentration on questions of power. At the time, I believe that you told us you were working on a book which, as for those of us who write books, we know these are a long time in the making. 

Finally, you’ve written the book. The book has been recently published with Routledge. The title of the book is Legal and Political Foundations of Capitalism and the subtitle provocative poses the question, The End of Laissez Faire? Welcome to Money on the Left, and I’m going to love to talk to you about your book.

Do you want to tell our listeners who were not familiar with your first interview, which everybody should go back and listen to, a little bit about your background and how you came to write this book. 

Jamee Moudud 

The background is, depending on how far you want to go, but in a previous life, I used to be an engineer. As an engineer, my politics changed. That was at Cornell. Then there was a professor there who suggested in the Department of City and Regional Planning that I go to the New School for Social Research to get my PhD in Economics. 

I had taken my first course in the government department on Marx with Susan Buck-Morss. That was an inspirational course for me. I was introduced to the Frankfurt School and Marx and all this. I went to the New School to get my PhD in Economics and became very interested in Marx. 

I joined Sarah Lawrence College once I finished my doctorate. That’s been an incredible journey for me because I was really enmeshed in this culture, which is interdisciplinary. There’s no disciplinary boundaries, entering into conversations with students and colleagues about Economics, but in conversation with history or politics. 

That kind of shaped the way I think about these issues. Then at some point, I think it had to do with the question of taxation, because I’ve been teaching courses on fiscal sociology. That tradition at Sarah Lawrence, I realized that I really don’t understand taxation, and economists, including heterodox economists. I was a heterodox economist. 

I don’t really like this term, but I use the term critical political economy. In my book, I realized that I just didn’t know what taxation means. We just take the small “t” in these equations, and we just run with that, whether we are in the classical or in the critical tradition. 

That was the rabbit hole for me. Once you understand that taxation falls on property and property rights and all this, like stocks and flows. Taxation is a flow, but it falls on a stock which is property. Then I said, well, I don’t know anything about property and the rest is history. 

Then I said, okay, I really need to understand this. I understood vaguely that, of course, property is a legal category, but what’s the relationship between law and economics? Then I realized, to my horror, as I started studying this stuff that there is an established law and economics tradition which dominates global and national policymaking and critical political economists have nothing as a rebuttal to New Institutional Economics, in particular Douglass North. This is the dominant paradigm, as we know, but I didn’t find any useful critique from the left, except in very broad strokes. They support austerity and central bank independence, but that’s not enough. 

Scott Ferguson 

Those are epiphenomenal in a certain way. 

Jamee Moudud 

Exactly. Also, and you must be knowing this too, Scott, that ever since Alice Amsden’s  book came out in the late 1980s on South Korean industrialization, there’s been huge literature, like Alice Amsden and then Robert Wade  and Ha-Joon Chang about the role of the state in in terms of industrialization. 

This was a challenge to the Washington Consensus. Everybody in the critical political economy tradition, that’s like your baby econ in graduate school. After a while, I became a little tired of listening to the same thing because it was the same incantation about the role of the state. I just started to think that now there’s something incomplete here. 

I mean, I get it, but there are variants of public policies with regard to economic and social development. A lot of this was literature focused on East Asia and this authoritarian period, which, needless to say, I’m not very sympathetic to. But virtually nobody really spoke much to the social democratic versions of these kinds of policies and especially in the postwar period: 50s and 60s. 

This is a time where you have a powerful labor movement and social democratic parties with at least some kind of a commitment to social justice. I felt like there’s something over here that needs to be understood analytically. I couldn’t for the life of me figure out what that was. By this stroke of luck 

I came across Martha  McCluskey, whom we all know and admire and Christine Desan. 

Scott Ferguson 

We’ve interviewed her on the show. 

Jamee Moudud 

They really played such an important role in helping me think about the integral role of law with respect to the economy, not just the sideshow aspects of it. Every time I tell a critical political economist that law is kind of important, they say, “yeah, yeah, yeah, it’s important,  but let’s all first of all deal with the economy. Then we deal with law and politics.” I’m like, “no, I don’t think that’s the way to go.” 

Scott Ferguson 

From the point of view of somebody who is trained as a film and media studies scholar, the way you articulate this commitment to law as being constitutive reminds me of certain ways in media studies that scholars will make similar moves. 

They want to imagine that media are constitutive of social reality. So often it’s treated, to use this term again, as epiphenomenal.  

Jamee Moudud 

That’s so interesting. That is fascinating 

Scott Ferguson 

Too often it’s like, what happens when individuals encounter media, rather than how is media shaping and constituting social reality in the first place? Right. Between economics and law, and especially in the orthodox model, you have this kind of premediated origin story where things begin from a place of pre mediation and that’s the economy. Later you can have interventions of the state or law or the legal system. 

Jamee Moudud 

Absolutely. I just found that for myself. If you think about three broad intellectual traditions in critical political economy. One would be the Marxist tradition, the other would be the post-Keynesian tradition, and the third would be feminist economics. With the honorable exception of the feminists, the other two really articulate this kind of epiphenomenal view.  

Certainly in the Marxist tradition and Marxist economics, law and politics is part of the base superstructure argument. For the Post-Keynesian (PK) tradition, it’s not that they necessarily say that, but the whole story of the New Deal, for example, which the PK tradition relies so much on and I think in critical political economy, the New Deal plays a very important role both for the Marxists and for the Post Keynesians in that the post Keynesians kind of emphasize all that the state did and for the Marxists, what the state could not do. This is the seesaw effect on both sides. In the meantime, neither side talks about President Roosevelt’s “Brains Trust,” and the fact that these scholars in the brains trust were all lawyers and institutional economists trained in this tradition that I talk about in this book. They were thinking about markets very in a very thoughtful way. It was not just about state intervention or nonintervention, but it was something different. I really, for the life of me, couldn’t figure out why there was this blindness to this way of thinking about politics and economics. The exceptions in critical political economists were the feminists, because, in talking to them, it’s not that they would necessarily deal with this tradition, but they really understood that institutions and the cultures that shape institutions and are shaped by them, play a really central role in market relations. For example, there is this false dichotomy between the market and what happens in the household. 

There was this classic article by…who was it? It was about the unhappy marriage between Marxism and feminism. I think there was an article like that. I think that’s the point, where we focus on class but who are we talking about? Women? Are we talking about black people or are we talking about black women? I mean, like, what are we talking about here? 

It’s very odd. What is determining class, what is determining class’s intersection with race and gender. Then we’re talking about other forms of inequalities. That’s left under theorized. It’s more descriptive. “Oh yeah. We know that there’s racial or gender discrimination, but first of all, let’s deal with the economy and class relations.” 

Scott Ferguson 

Can I ask you – I guess it’s sort of personal – but I think it picks up on the history and the sociology of knowledge and collaboration. How did you stumble upon McCluskey’s work – and you are good friends now. How did this even happen in the first place? 

I will say that, in many ways, I was in my field and subfields for years yearning for – it’s easy for me to say in retrospect – the kinds of things I’m doing now but didn’t really have access. I didn’t even know where to go. It just so happens that some contingent circumstance led to another. 

So how did you make connections? 

Jamee Moudud 

Yeah, that’s an interesting one. It happened through an interlinked series of issues. One was I had co-organized with a colleague a conference at Sarah Lawrence on the Global South with the focus on South Asia, Pakistan, India, and so on. 

Scott Ferguson 

What year was this? 

Jamee Moudud 

This was in 2014. Spring of 2014. We raised some money. It was a really great three-day conference. One of the issues that came up in that conference was the question of taxation on land and property. This came up over and over again. I’m driving home at the end of this conference one night on the highway, and I’m thinking about exactly this question of taxation, which I talked about earlier.  I don’t really get it. 

Property, land and property, do I know property? So, there’s that. That was already getting the mind thinking. I came home and then I had to take my younger daughter, who was little at the time, to dance. I took her to the dance academy, and I’m waiting outside to pick her up, and I’m on my phone and I’m really intrigued. 

My brain is like that line from Dylan, “I’ve got a head full of ideas that’s driving me insane.” Yeah, that’s me. I’m sitting there on my phone. I’m thinking, law…capitalism. Has this been written about? Is this a thing? Chris Desan had been running our program at Harvard Law School on law and capitalism, something like this. 

Her name popped up. When I got to my laptop at home, I just wrote to her and I said, “I don’t think this person will respond.” These people are busy. Who has time to respond? This was late spring. Which professor has time in late spring to respond to a stranger? 

She, very graciously, responded to me within like two days. That was so nice to hear, and I was just really touched. She said, “well, this is really interesting that you’re interested” because I told her a little bit about my interests. She said, “Have you read Robert Hale?” I said, “never heard of him.” 

See, that’s the thing. Never heard of Robert Hale. She sent me Robert Gordon’s “Critical Legal Histories.” This classic paper. She said, “have you read this stuff?” I sat myself down and read it and when I read Hale, there’s that classic article on coercion under a non – coercive state, the 1923 article, “Coercion and Distribution in a Supposedly Non-coercive State”. 

I said, “Jeez, this is Adam Smith, this is Marx, this is classical political economy.” We have the formal trappings of equality in a bourgeois democracy, but we have inequality. I said, “oh, but there must be like a gazillion people who’ve written about this.”  So, then I had to go search.  

I studied Sraffa in graduate school, of course, which every self-respecting heterodox economist or critical political columnist does. I said, “oh, there must be literature on Sraffa and Hale or Smith and Hale,” and found nothing. What? So then, through one thing or the other, in my search, I came across the name of David Grewal. Oh, I’m sorry, one more thing. 

We can talk about this later on, I don’t know if you guys have heard about the Cambridge Capital Controversy and the capital critique. Yeah, you’ve heard of that. Okay. I won’t go into that right now, but John Robinson’s classic critique of marginal productivity theory and the production function, and there was this whole debate in which finally, Paul Samuelson in 1966, in a symposium on the Quarterly Journal of Economics, said that John Robinson, you’re right. 

Marginal productivity theory doesn’t work, which raised the question, “Okay, so if the distribution of income between wages and profits is not determined by supply and demand, or “market forces,” then what? Heterodox economics kind of stops there. Right? So, yeah, it’s the institutions. Okay. But that’s fine. So, I said, maybe there’s some law person who’s written about the capital critique. 

It turned out that David Grewal had. He was at Yale Law School at the time. I wrote to him, again, as a totally unknown person. He responded almost immediately, and he put me in touch – he cc’d, I think – Martha McCluskey in that. Then Martha McCluskey wrote to me. 

She wrote to me and she said, “would you like to come to this APPEAL (Association for the Promotion of Political Economy and the Law) workshop,” it’s a two-day workshop at Suny Buffalo Law School. 

“Would you like to come to it and talk about income distribution?” I said, “I’d love to.” I went up there and then Christine Desan  had invited me to, 2- or 3-day event at Harvard. This was around summer of 2014, summer of 2015, this time period, maybe 2015. 

That was when I started to understand law. I understood that this is unexplored, and the law is playing this constitutive role and that law is not neutral, something apolitical, but instead profound. It’s political at its core. I met with Duncan Kennedy. I reached out to him. He reached back. We had coffee together when I went up to Harvard for the first time in 2015. He said, “would you like to have coffee?” I met him at a cafe. It was pouring outside, and he was so gracious. He said afterwards, “Can I drop you to your hotel?” and I said, “no, no, no, I can make it back.”  I make it back in the pouring rain to my hotel. 

He then emailed to say, “Are you okay?” This is so, so kind. In talking to Duncan and to Chris and to Martha and all these other folks, I realized how important politics is to law. Not just important, but it’s integral. It’s the entry point to culture because, whose politics are we talking about? 

I mean, it’s an obvious point, right?  So again, that’s when I began to be very skeptical of the word “state,” because state, used by everybody, implies this monolithic, brooding, omnipotent institution that just barks out orders and does this, that and the other. Of course, that’s not true. 

I mean, I wouldn’t want that to be true anyways, but it’s not even true even in an authoritarian capitalist country. There’s something else going on, which is not about the state. We use that as a shorthand in politics. Then the question is: whose politics? It should be pretty obvious here that we’re talking about a contextually changing political framework which creates the basis of the legal framework of society and that ultimately the economy is – I think it was Roberto Unger and also Abba Lerner who actually talked about institutions as frozen politics in the sense that they are the outcomes of what happens before and that those institutions’ property rights and contracts are an autonomous arena whereby people interact with each other and markets and firms compete and this, that and the other. This is the domain where all economists focus on modeling that economy. 

Whether it be Minsky or Marx’s falling rate of profit or whatever it is. They’re trying to find regularities within or in that economy. That’s the whole story, I think, more or less in the broad Marxist tradition, trying to find patterns within capitalism, which is fine. I’m not disrespecting that, but I think it’s incomplete because they recognize that there are institutional variants of capitalism, but they will also say, “yeah, but there are these patterns that are common.” 

Whether you’re talking about the United States now or 100 years ago or Germany or South Africa or whatever, there are these variants, obviously, but here are these common patterns. Let’s say equalization of profit rates or recurrence of general economic crises. My response comes from that tradition because I was trained as a Marxist economist, but when I started getting into this area of study, I realized I could easily turn that argument around. I could say, “yeah, there are these common patterns, but there are also these variations. And how do you theorize that it’s not just a question of recognizing there are institutional variants of capitalism but analytically understanding this is the question?

That’s where I began to sort of break away from that sort of way of thinking. Move away from that sort of the econo-speak, as it were, to the kind of work that I’ve been doing for the last ten years, which is what we’re talking about right now. That’s a kind of a long-winded response to you, but I think that’s the way I think about this. 

William Saas 

Thank you for sharing your experience. It can be a pretty vertiginous experience to come to those questions the way that you did. The way that you narrate it is so lovely to listen to and then also to kind of identify with because I think that’s the story of a lot of us in this space. We all have been coming to questions that there are no clear disciplinary answers for and having to look into others. 

Once you do, you realize that there is no alternative to interdisciplinarity when it comes to the kinds of questions that we’re asking. 

Jamee Moudud 

Absolutely. That’s for sure.  

William Saas 

I identify with you as well, finding ready conversation and camaraderie with a few folks, enough to sustain you into the line of inquiry that you started on. This brings us nicely to your book. I wonder if you could, for our audience, walk us through the kind of big picture moves that you’re making here. 

What’s that story? We’ll probably stop you and chat about different portions throughout, but what’s the story of your book? 

Jamee Moudud 

Okay. First of all, let’s start with the title, which you already gave, but the first part of the title is a play on John R. Commons’ book, Legal Foundational Capitalism. My book’s title is Legal and Political Foundations of Capitalism, which is for reasons that we just talked about and as I point out in the intro to the book in the subtitle The End of Laissez Faire? followed by a  question mark, that question mark is probably the most important part of this title and it represents the whole book. 

When I read Keynes’ classic article The End of Laissez Faire with no question mark, in which he said that following the slump of the 1920s we don’t want this 19th century Laissez Faire, we want state intervention. I read it and I said, “no, I don’t agree with you.” 

I’m sorry John Maynard Keynes; I don’t agree with you because it was a heroic rewriting of British economic history. That was really the path forward to the question mark, basically saying that there is no question of ending Laissez Faire either then or now. 

It never existed. It’s like the foundational myth of capitalism. Even the authors on the left will invoke it. 

Scott Ferguson 

Can I quickly interject, I had this kind of moment of revelation. It’s very similar when reading Adorno and Horkheimer for the millionth time over, and they have passages in their work in which they suggest that 19th century European economy was legitimately laissez faire and that, even though it was capitalistic, in a dialectical way there was nevertheless some commitment to individual freedom. 

We have since lost that in the age of monopoly capitalism and I think when I was like 22 years old and reading this in grad school, I would just nod along, right? But at a certain point when I got to these passages, they stuck out and I thought to myself, “no, no, no way, you’re taking the bait.” It was never this way. 

Jamee Moudud 

Absolutely. When you were talking, Scott, I was just thinking this is also a heroic rewriting of history by white men. We’re talking about slavery till 1863. What are we talking about over here? Women did not have the right to vote until 1919 in the United States, and I believe 1927 in the UK. 

What are we talking about? Like, are we talking about here? These are authors on the left broadly and they’re arguing like a John Locke saying this is the realm of freedom and then along comes a big bad state.  I decided in writing this book that what I want to do is pursue a method. 

The question of methodology is very important. That method is the bread and butter of all training in programs like the New School, where I got my PhD, or UMass-Amherst or any of these places, which is that theory is constructed in dialog with evidence, including historical evidence, history of economic thought and economic history. This is very different from the deductivist approach of neoclassical economics. I follow that same way of thinking about the engagement of theory with history, but for me, it was legal economic theory and legal economic history. I understood very clearly that you can’t really talk about theory without doing so. I should also mention another person who I owe a lot to, although he’s probably forgotten me. That is Morton Horwitz. I met him. He’s a lovely man. He gave me his folder on a course of economic regulation that he taught for a long time at Harvard Law School. 

I said, “I just can’t figure out where I’m going intellectually” and he said, “Well, take a look at this.” In reading Horwitz was really important for me because you understood going back to the early years of the Republic, property was not discovered, but it was constructed, reconstructed, fought over, and that the judges were not neutral. 

The judges were making policy, as he pointed out over and over again, and thereby distributing power relations within society. In this book, I focus on, first of all, the original institutional economists and the American legal realists as the theoretical launching off point. We can come back to that in a little bit, but I wanted to focus on money, property, as the core aspects of the economy and the business corporation. 

I thought to myself, I want to construct a theory which would weave through the theme of power, because that was what I took away as one of the most important aspects of Hale and all these folks. It’s about the question of power. Then, I wanted to also write about authoritarianism and Hayek. I’d been obsessed with Hayek for a long time. I teach Hayek, yeah. I think you’re smiling.  

Scott Ferguson 

Know your enemy. 

Jamee Moudud 

I totally agree. I teach Hayek in every course, and everybody would think that I’m some sort of a closeted libertarian. I connected that tradition of liberalism to authoritarianism. What I wanted to do was really make this book about an analysis of power in different contexts. In regard to money, for example, one of the first questions I asked myself when I read Desan’s book was, “How does this connect to the endogenous money tradition?”

The endogenous money tradition is what we cut our teeth on. How do you reckon with that? Then it struck me. Hayek really helped me here. Reading Hayek made it very clear that that strand of liberalism conceptualizes a society in pre political terms. 

He says very explicitly that society comes first and that’s where you have law. To his credit, all his writings were on law, but law itself arises spontaneously through some bizarre process that I’m still trying to figure out right after having written this book. It arises through some spontaneous order and the monetary system just arises in that particular way. 

Menger and Hayek come in this tradition. You can situate endogenous money in that approach too because you could just say just “yeah, Banks just figured it out with credit.” I believe there’s a French tradition, in the way that there was this classic debate between the Currency School and the Banking School in England, there was obviously a French equivalent to that. The French authors who were sort of more in line with the banking school were libertarians because they actually saw money just arising.  I said, “no, this can’t be right. This is obviously not true. It’s not even historically true.” 

I argued that, in fact, society is a political community. That changes the story completely because in a society, you can’t really have a society without an institutional framework. You have formal institutions, which is law, and informal institutions, which is language and culture that enmesh with each other. 

On that basis, you have the construction and reconstruction of any society distributing gradations of power within it across race and class and gender and all this and of course, its monetary system. If you come back to the endogenous money tradition, endogenous money is really about profit seeking behavior by banks. All profits seeking behavior, all market behavior, are embedded in this political community. 

Here, Karl Polanyi really helped me a lot also because, money, land and labor are all fictitious, as he puts it, and that laissez faire was planned, as he famously said. Then I understood money is a legal institution that has a political basis.This is shaped by its governance. Is it white folks? Is it colonial power? Is it a so-called neutral set of technocrats sitting in a central bank in a democracy? Whatever it is. That’s really the basis of the institutional hardwiring of the system. That is the basis of rethinking the relationship between economics and politics, which is very different from the libertarian view. 

One final issue was, which you see in the forward to the book by Desan, I have actually conjoined money and property rights. You’ve got property rights people who don’t deal with money and with money, you have people who don’t deal with property rights. 

As a store of wealth, money is property. It’s a particular kind of property that we can exchange. It’s a universal equivalent, but in a particular jurisdiction. If you say that it is property then can you apply Hohfeld to study property, then you can apply Hohfeld to money. 

Scott Ferguson 

They’re both permission structures. 

Jamee Moudud 

Absolutely. Permissions and prohibitions and whatever that may be. It will have regressive consequences. It’ll have progressive consequences, whatever that is. Then you get the variations of capitalism in terms of its monetary system and its property rights across space and time or different national contexts across history. I thought to myself, I don’t want to make this a book just about theory, because, you know, that’s not the way I do things. 

I’m going to give tons and tons of examples to say, “here is a way of rethinking capitalism.” I can give you evidence from not just the United States. I deliberately chose a comparative international historical framework. One of the chapters deals with three constitutions; the US, German and South African constitutions, as a way of thinking about property rights in constitutions. 

Thinking about how constitutional property rights interlink with other aspects of these constitutions and the systems of public finance. I argue that even if you have an elastic supply of public finance, if you’ve got a first-generation constitution, then it’s very hard. There are no economic, social, or environmental rights in the constitutional framework. You can have an elastic public finance, but who is benefiting? On the other hand, if you do have a progressive constitution, but you don’t have an elastic system of public finance, we’re talking about Europe here, then you see there’s a conflict right there. South Africa is a really great case in point. It’s a great constitution and an independent central bank, which is in fact in the constitution of that country. You all know about the discontent in that country for the black majority, 30 years after liberation. There’s this massive amount of inequality where you have a constitutionally protected right to public housing. 

That right by itself means very little if the state’s hands are legally tied in terms of actually creating public housing. Both of these two things are important. Coming back to your question about the themes, this question of monetary hardwiring also constrains policymaking, which also then provides the basis of authoritarianism. Once you say that you can go and just elect whoever you want to, you really cannot do anything about economic and social policies that tends to create, ultimately, the space for far-right politics. It’s easy to scapegoat and all that. One of the chapters deals with this sort of supposedly odd bedfellows, liberal realism, which is extolling the virtues of freedom and liberty, and fascism. What we’re seeing in our current moment is the flip side. I argue in one of the chapters that this seeming innocence of liberalism, of free markets plus democracy, you get where we are today in our current moment, where the Washington Consensus formula has collapsed in some sense. 

Scott Ferguson 

I want to flag some macro stakes that have become clear to me in reading the book and listening to you try to characterize your main moves. Coming back to what most economists and even heterodox economists do, they take, what I would call, a reified vision of the so-called economy as autonomous or quasi autonomous and then try to find what you call patterns. 

We can use the Marxist language of the laws of motion. You’re saying that – and I think we fully agree on this show – you’re missing this whole underlying layer. That whole underlying layer isn’t just a kind of locus of causality that has been foreclosed, but it’s also a locus of contestation and opening that up anew has powerful consequences. 

In my experience, and again, I’m not a heterodox economist, so I can’t fully speak to the field from within it, but I increasingly feel I am not convinced that it is okay to just kind of keep tracking the laws of motion in that rarefied realm, even from a radical leftist point of view, because it because it really is distorting and false. It mischaracterizes tensions and contradictions. It misconstrues what those contradictions are. I think you gave a great example. I think a fundamental contradiction in the constitutional construction of modern nation states is the various ways that literal constitutions construct property and money and the public purse, versus the seemingly progressive or regressive kind of social aims of that Constitution. 

That is a fundamental contradiction that is not legible, certainly not through neoclassical economics, but it’s not really legible in Marxism and it’s not even legible in Keynesianism, at least as it’s normally practiced. This, to me, just cracks open causal foundations, the analysis of phenomena like contradictions and their reverberating effects. Suddenly the so-called economy looks very different because you’re not you’re not approaching it from the same point of view. It opens up new possibilities for transformation. I’m not throwing any particular person under the bus, but I’ve been to several heterodox economics conferences and even critical legal studies conferences and even some of these great money conferences put on by Desan and others. 

Very often a trope will come up when you start bringing up big progressive policies like a federal job guarantee and inevitably, somebody will raise their hand in the audience and say, like, “but is that possible under capitalism?” What does that imply? First of all, we’re not saying it’s easy or that it’ll ever come to pass without a lot of hard fighting and work. 

What that implies is that the hard wiring, so to speak, is so hard wired that the laws of motion might as well be Newtonian and absolute. 

You can’t even, from the left, imagine or fight for or theorize or culturally explore what a job guarantee might even look or feel like or how it might be implemented. You’re not even allowed because we have to self-censor. We have to self-censor because, sorry, the laws of motion do not permit it. 

I think this is one of the central obstacles of left analysis and praxis that your book is opening up. 

Jamee Moudud 

Yeah, I totally agree. It’s interesting that you mentioned Newtonian analysis because I’m working on a new project – this probably is going to be another book – which is about visions of the market. That’s another whole conversation to have. I do think that coming back to that issue, as I point out in the book and I think you said it exactly right, saying that things could be changed for the better doesn’t mean that you just wave a magic wand and boom, it’s going to happen. 

Nobody’s saying that. In terms of theory, I draw a connection between Hohfeld, K. William Kapp , and John Maurice Clark, who actually wrote about social cost theory, that is to say, how corporations and businesses inflict social cost. I argue that, in fact, the extent to which corporations inflict social costs, such as environmental destruction or greenhouse gases, etc., etc., that that’s a function of the bundle of rights that they have. 

What kind of rights are encoded in what a corporation can do? Can it steal your and my data? This next book is going to be on, partly, on artificial intelligence. This conversation that we’re having in this platform, to what extent is a software actually taking our data, etc., that’s not just some neutral market forces. 

The law is enabling certain kinds of actions, which are legal. Saying that social costs could be reduced, that one could constrain tech or one could constrain industry from pumping out greenhouse gases and so on, it’s not that nobody’s going to say that’s easy. In fact, this is where historical analysis was very important. Look at the National Environmental Policy Act of 1969. 

Before that, industry had a free hand in dumping as much chemical waste as they wanted. There’s no question that the environmental movement of the 1960s and maybe earlier, too, eventually changed the politics and the culture so that even the Republicans understood that. Maybe it’s not such a good idea to drink contaminated water and smoke and inhale smoke filled air. 

Thanks to landmark environmental policies or the consumer rights movement of the 1970s, we now take seat belts for granted. I always joke to my students, have you ever seen those old cars of the 1950s and 60s? They were death traps and the only safety measures were brakes and doors. How did seatbelts become mandatory? 

Or airbags later on? It came through this massive consumer rights movement, which industry fought tooth and nail against like it fought tooth and nail against environmental policy through the 1970s and 80s. None of these changes really just came about. They came about through a long struggle. You could always say, did they change the laws of motion of capitalism? Maybe not, but did they make the lives of people better? You would not be subject to crippling neck and facial injuries from a car accident like you would be in the 1950s? If you think about global healthcare systems, the fact that we do have universal health care in so many industrialized countries, and the fact that this is possible in the global South also, this is where the question of money comes in. 

Does that make a real difference to people’s lives? I think it would be kind of absurd to evoke the laws of motion of capitalism to get it. Just one more thing that struck me too, many of these changes in a progressive direction, if you look through the factory acts of the 19th century all the way to the 1970s, they happened in good and bad times. Capital was constrained to reduce social costs even when the economy at times was in crises, like the 1970s. 

It’s not quite correct to say that somehow in the final instance, politics has got to obey the laws of motion when the rate of profit has collapsed, there’s really nothing that one can do. That begs the question, how did these important environmental and consumer rights policies get implemented in the 1970s, when, by all accounts, the global economy was in a slump? 

In the case of Germany, the Co-Determination Act of 1976 was enacted, in the case of Italy, I think that they had this very important public health care legislation put in place in ‘78. You see all these anomalies coming up in different contexts in tough times, which I think raises the question. 

How are you thinking about the relationship between politics and economics? Oh, one final one. You remember the East Asian financial crisis of the late 1990s, and Thailand was the epicenter. That was 1998. But in 2002, I believe they actually created – I don’t know what the political circumstances were – the national health insurance system. This is a country in the global South. I think it was 2002. I think it was called the “30 Baht program” or Universal Coverage Scheme (UCS)Universal Coverage Scheme (UCS). I think that’s a big deal. I think we need to be cognizant of that as we’re desperately searching for alternatives. 

There are these instances that we need to understand. What are those ways that we can think about these issues? 

Scott Ferguson 

It’s really reminding me of another critical preoccupation I have, which is with critical and left theories of crisis that emerge from this dedication to a certain set of laws of motion. I find that most theories of crisis – it’s not to say that crises don’t occur, of course they occur, they occur all the time – but there’s a kind of necessary mechanical thinking that often creeps in that makes me want to just throw them all out. To come back to this theme, they’re so disabling. I think all these historical examples show us that. 

In the midst of these so-called crises, that’s when you can innovate and rewire the hard wiring toward beneficial ends. 

Jamee Moudud 

One thing that I’ve thought of doing in the book and ran out of space to do, but it would have been a fun thing to do. I think I might do this. Just take one country for which we have a lot of evidence. I don’t know, let’s just take the UK and sort of map various Factory Acts and their social acts. Map them against what Marxists call phases of accumulation and upturns and downturns. It would be a great way to sort of push back at this argument that many of these Factory Acts actually happen with no correlation.  

That’s my basic point. It’s pretty easy to show this. I’ve sort of casually looked at some of this information, but there’s no correlation here. The way one phrases the critique is important, it doesn’t mean that it’s an easy process that you just wave your wand and all that, but there’s a kind of reductionism that somehow in the final instance is the economy. 

In the current moment, when we are facing an existential threat as a civilization because of global heating. I don’t even call it climate change, which is a euphemism. It’s a global heating, an extreme weather. You’ve got powerful sectors of the capitalist class, not just the fossil fuel industry, but all those that benefit from it, like the financial sector, this, that and the other. There’s this interlocked web of power that is preventing what is an existential question now. What are we then as theorists going to say? “Well, okay, let the planet just destroy itself.”  

Scott Ferguson 

It’s the laws of motion! 

Jamee Moudud 

The laws of motion. I kid you not, I’ve actually seen articles coming out by various people about our current crisis and the deep structural problems of capitalist accumulation. I’m going, seriously? I mean, is this where we’re going with the deep structural problem? 

Scott Ferguson 

One of my pet peeves is that when Marxists start citing Larry Summers on secular stagnation, like, come on. 

Jamee Moudud 

Come on. I mean, I don’t know if this is the space to talk about this, but I do think that there is a contradiction in volume one of Capital. 

Scott Ferguson 

Go for it. Where else are you going to talk about it? 

Jamee Moudud 

I didn’t do this in the book. This is the first time that I’m going to do this. I think that Marx contradicts himself. Yeah, I studied Capital and taught it for many years. The contradiction is the following and I think it relates to actually our broader conversation. The first part of volume one, money just comes up. It just arises. 

Scott Ferguson 

Like Hayek, right? 

Jamee Moudud 

Exactly. Hayek and Menger. If you scoot forward in volume one too, I think chapter 31, he sounds like an LPE person. In fact, the bulk of Capital Volume One from bloody legislation to the Factory Acts, which comes earlier on. Then he talks explicitly about money in chapter 31, where he talks about the national debt, remember? There’s a really great passage on the Bank of England and the state’s role and all this kind of stuff. 

There’s a contradiction over what the theory of money is here. I thought, am I going crazy or am I missing something because, does money come up organically or is it the product of politics? I reached out to some Marxist economists, and I will not mention their names here, and I said, is there a contradiction here? 

They said, “Jamee, thank you so much for your email. No, I don’t see the problem.”  

“Why not?”  

“In the beginning of volume one, there is no state. There’s value creation, there’s value theory and then he brings in the state later on. It’s like a level of abstraction story.  

So, I said, “Wait a second. How can you have value creation without property rights? Contracts.” How can you be abstracting from the state in the beginning, you’re basically saying that class relations occur before politics, is that where you are going? Well, what does that even mean? I would much rather go then to the neoclassical side, because to their credit, the distribution of income is determined in the pre political space and marginal productivity theory. Okay fine. We don’t agree with it. I mean it’s a nonsense theory, I agree, but it’s at least consistent. But with Marx, you’re talking about an explicitly class-based analysis of the distribution of income. In which case, how are you possibly then abstracting from politics and law at the beginning of volume one? 

If you’re abstracting from politics and if you bring in politics and law, then that completely changes the theory of money at the beginning of Volume 1. 

Scott Ferguson 

I would say in response, this makes a lot of sense to me. I will also say that, to me, this is a symptom of Marx’s liberalism. You can say that he’s making an immanent critique of liberalism, but I’m not convinced that he achieves escape velocity. 

Jamee Moudud 

With any kind of theorist from the 19th century who’s written in a different language there’s always a question of translation into English. Again, the base superstructure model, which I critique in the book, he didn’t discuss that in his later works in volume one and two and three, but there’s an explicit discussion of that in the earlier Marx. Now, the question is, maybe he changed his mind, whatever it is, but I don’t know. In any case, there’s a clear contradiction that I see here in Volume One. I thought to myself, “I’m going to land myself in such trouble over here,” because he repeats the same trope that competition occurs before Leviathan, as he puts it. Leviathan, being the state. What? Are you saying business competition occurs pre-politically? This idea, as you’re quite right, it actually filters into contemporary economics and on the Marxist side. Not Marxist social and political theorists or historians like E.P. Thompson, who famously debunked the base superstructure. It’s the economists that are the problem. 

Scott Ferguson 

It also informs the humanities as well. 

Jamee Moudud 

You mean the base superstructure? 

Scott Ferguson 

Yeah. I would say that for most humanists, they do not accept a naive base superstructure model. I think they would claim that it’s much more complicated in Marxist texts. Whether they’re thinking this through Althusser or any number of others like the British Cultural Studies School and Stuart Hall. There’s lots of ways of complicating base superstructure. 

I don’t think the humanities has a self-consciously naive base superstructure model, but I would nevertheless say that the problems that we are diagnosed facing are rampant. Even if it’s not a straightforward, naive, binary opposition, top down, it’s nevertheless still operative. 

Jamee Moudud 

Which I think is so strange because some of these cultural theorists have also written about colonialism. When you look at the colonial enterprise, you can clearly see this constitutive role of law. I mean, you can see it everywhere, but I’m just saying that as a way by which common law systems were actually state created and imposed in India and elsewhere. 

These were policies of the state. It’s not that the state came in afterwards. They’re aware of all of this.  I think the strength of engaging with these critical traditions in law is that you really begin to understand that this hardwiring cannot just need to happen and the question about who’s the agent behind the hardwiring and who’s contesting it and how is it contested. 

So, then you sort of change the story around and the analysis around. I think most of these authors, and I guess humanities would have the same issues. They don’t really deal with this critical tradition in law. 

William Saas 

I just keep thinking about Kalecki’s “Political Aspects of Full Employment” in the context of this conversation. I’m wondering if we can figure something out where we come up with a critical thinker quiz that we have people take. Read Kalecki’s “Political Aspects of Full Employment” and tell us what your conclusion is at the end. 

There’s an example of not too many years ago of a popular left magazine publishing something on that; about and around that article that draws the conclusion that political full employment is just not possible. That’s not the lesson. I’m thinking about that because this conversation in your book makes me think a lot about the kind of prescriptions that follow from accepting and inheriting, uncritically, some of these baseline assumptions. 

I would, as an aside, wonder if even accepting them uncritically is too charitable but rather accepting them as a condition of their continued scholarly existence and relevance. So much has been built on the foundations that we’re talking about here that to get to the bottom is a threatening and kind of, again, vertiginous experience. 

Not all of us are into that. Some of the prescriptions or sort of affective attitudes that I think we see flowing from this on the outcomes side is accelerationism. Accelerationism has been implied in some of the things that we’re talking about. 

We’re talking about laws of motion and defeatism and a kind of throwing your hands up precisely in moments of crisis when you need to sort of ditch the realism and get on with something else. Something affirmative and something more in the idealistic space, which is also may be uncomfortable for people who have been steeped in this kind of defeatist political realism. 

I want to put in a word for them, though. Is it not the case we’ve evoked – and this is going exactly the opposite way, maybe it doesn’t work and maybe I’ll edit it out. But the forces that are – and I’m saying forces in quotation scare quotes – are arrayed by law currently so aggressively and are so entrenched. 

Scott Ferguson 

And invisible. 

William Saas 

And invisible and omnipresent that one could forgive them for proceeding in this kind of realist – that isn’t quite so realist, because it’s not attending to things that we’re talking about here, but… 

01;08;09;23 – 01;08;16;27 

Scott Ferguson 

Can you be an LPE pessimist? Is there a place for the LPE pessimism? 

William Saas 

Is there a space? Where does the worst pessimism exist? Yeah. I mean, is pessimism permissible in this space? 

Jamee Moudud 

Okay. All right. That’s a really great question. One of the things that I really struggled with in this book, and I think I did a fairly decent job, is that I didn’t want to say that. I wanted to sort of break away from either an unambiguous, optimistic view – which I don’t believe in – and also this pessimistic view. 

I always tell my students that as a student or a scholar of history, I’m neither a pessimist or an optimist, but I’m a realist. What does that mean? That means that change is possible, but it is hard. It is really hard and it may take a long time. I don’t know where that puts me, but I think I’ve been influenced a lot in my thinking by Wolfgang Streeck, the German sociologist’s really great book Re-forming Capitalism. There’s a dash between Re and forming. In which he talks about the fact that progressive labor legislation, which is what he focuses on in that book, has been pushed back by employers over many decades in favor of them. Kathleen Thelen, a political scientist at MIT, talks about institutional variations and that that’s where the power dynamic shifts in different ways. 

My point here is to simply say that whether or not social costs can be of different kinds and can be reduced, social costs created by capital can be reduced. It’s not obvious that they can be reduced easily. One way to think about this article is to say, well, look at globalization. There’s always this threat of capital flight. That’s real. I think we have to face up to that coming on the left, which doesn’t mean that we shouldn’t struggle for these important social rights. But it’s an important issue, right? It’s an important constraint or an important impediment to change. We need to be aware of this and how do we then think about this issue in countries lower down in the international and monetary hierarchy. That’s a real issue. I do think that, for me, the pessimistic part is the threat of capital flight. But then I say to myself, yeah, but that’s always been the case. Capital, even if it doesn’t actually go to some other jurisdiction, can always just invest at home and it can invest in financialization and all the rest of it, which doesn’t create good jobs and such. 

That’s always there. I don’t like to use the word middle ground, because I know that as a connotations built into it, but I’m trying to swim away from either pessimism, which one version of that comes from a kind of an economic reductionism, and the other one is a kind of a Pollyannaish view that you just need the good guys in power and that’s the end of the story. This is something that we haven’t talked so much about in this conversation, but I think it’s sort of popped up a few times. We’ve talked about power, but one of the issues that I’ve dealt with in the book, and I want to explore this more, is language and how that informs the way we think and our belief systems. You could be on the receiving end of this factory dumping chemical waste into the river, but you still believe that there’s something called a free market and that that’s the notion of efficiency. That word “efficiency” is a trope, but it’s a very powerful cultural trope. 

Everybody will talk about market efficiency, even to those who are on the receiving end of the ravages of the market. As long as that belief system remains then the power remains invisible. If you look at the cover of the book, that cover symbolizes something that I’m trying to do over here, that in fact power comes from the invisible ways by which politics has structured economic and social life. We need to, first of all, bring it out of the shadows. Make the invisible hand visible. The visible hand of politics was always behind the so-called invisible. I feel like that’s one important step towards a progressive alternative to sort of break away from state intervention versus nonintervention. The liberals and the progressives will say, “we want more regulation.” Remember, in the wake of, let’s say, the global financial crisis, this was the same standard line. “We need more regulation.” The conservatives would say the opposite. The point is that, leaving aside certain illegalities, the global financial crisis and the subprime mortgage framework was built on the Commodity Futures Modernization Act, an act of Congress, the Gramm-Leach-Bliley Act (GLBA), 

The Depository Institutions Deregulation and Monetary Control Act of 1980. These were political decisions that created a legal basis for the growth of markets. I feel like people are not aware of something which is staring them in the face and that’s the power and the way by which power is exercised. 

Repeating that is, I think, very important. It’s a key piece of the puzzle. We don’t talk about it enough, this way of thinking about power, at least certainly not in economics. You can’t really talk about economic and social transformation, without, first of all, dealing with this crucial element of power. 

I’m very grateful that I’m having this conversation in this podcast because so much of the work that I see resonates with what I’ve seen my interest go into in this sort of cultural political economy. 

I don’t know if anybody is doing it, but culture is what’s behind the politics, which is behind the law, which is behind the economy. 

Scott Ferguson 

Yeah, and they’re always mixed up together. 

Jamee Moudud 

They are and they always have been. This current moment is nothing exceptional. It’s not at all exceptional. I think the power part is also something which has been around for a long time and has naturalized. You don’t think you can change it. 

Scott Ferguson 

I was going to ask you to speak in a little bit more detail about your analysis of colonial and imperial relations and developments specifically around constitutionality and public finance. This is one of those areas, not that there hasn’t been work done and you quote a lot of important work, and we’ve engaged with some of these authors on our own podcast, but I think this is another one of these areas of blindness, especially in the West. What are the political and legal conditions of possibility for the Global South debt crises, for example. You work through several different examples in the book, and I wanted to give you a platform to just talk a little bit more about that. 

Jamee Moudud 

Just a clarification, are you talking about the colonial period or are you talking about the post-colonial period? 

Scott Ferguson 

Both, but it’s up to you what you want to focus on here. 

Jamee Moudud 

I can do both. In terms of the colonial period, one of the things that I wanted to do was to say, there is this literature, Ha-Joon Chang’s classic book, Kicking Away the Ladder. Then you have Mehrsa Baradaran’s book about money and property.

I forget the book title exactly. She writes about banking and black banking. I thought to myself, when you look at the history of colonialism, one key issue is the way monetary systems were hardwired.I focused on England’s colonies of color versus the dominions such as Australia, New Zealand and South Africa. 

What I argued was that the way in which colonial systems of finance, public finance, central banking including, were promoted by the British in Australia, for example, or New Zealand, which were also very poor in the 19th century, gave legislatures far greater autonomy to promote economic, social and political development. By the time they become formally independent – I forget if it was the 1940s or whatever – they’re already in a place where, while much poorer compared to European countries, like New Zealand for example, they still have the basis of a pretty decent welfare state and a national health care system in the early 20th century. This freedom was not granted to the colonies of color. South Africa was different because there the South African Reserve Bank was created under the umbrella of the British Empire. Sir Henry Strakosch headed it. Strakosch pointed out that we need an elastic supply of credit to promote industrialization. Of course, that was for white folks, the white minority. The point here is that the design of monetary systems in the colonial period had two different logics and that, I argue, already set the stage for global inequalities way before the 1980s because a lot of the sort of issues of the Washington Consensus and so on tends to focus in the 1980s and 1990s and the debt crisis. But the roots of the problem lay much earlier, so that when many of these countries in the global South gained independence in the 1950s and 60s, they were already in a place, because of the prior way by which their monetary systems were hardwired, that put them way behind other colonies that were granted a better deal by England. 

There you get to at least one important aspect of what causes these roots. I don’t know if it’s an irony or if it is just one of these blindfolds, but when these European countries are industrializing after the Second World War, they pursue pretty sensible policies, including progressive constitutions, progressive use of monetary systems, the Bank of France and such, and the role of public banking of various kinds. 

In the case of Germany, it was this publicly owned bank which is very huge now. The KfW ( Kreditanstalt für Wiederaufbau or Credit Institute for Reconstruction) played a very important role in German reconstruction. This was not an opportunity that existed or was allowed or even in the consciousness of the newly decolonized countries in the global South. 

Part of it may be because many of these – and I’m just speculating over here because this is not something that I studied – leaders or movements that were genuinely popular nonetheless, in the global South, still swung towards being either free market or state socialism. 

These were ill equipped states. You had the same logic of corruption and all the rest of it, which ultimately leads to payments crises and swings towards the so-called free market in the IMF. But what is written out of history is the really crucial ways by which monetary systems were structured in the case of Europe, including the smaller countries in northern Europe, like Sweden and Finland, which have powerful labor movements. 

They pursued industrial and social policies that actually did a pretty good job. Why was this not even in the framework to think about? I think that’s the missing story. 

Scott Ferguson 

There’s so much to say. It affects me even just teaching canonical film studies. When I get to the topic of what’s called third cinema, which is a kind of counter cinema, revolutionary cinema of the 60s and 70s that still has influence today, but its heyday was in the 60s and 70s all across the global South and Latin America and Africa and elsewhere. 

The scholarly framing, but also the polemical framing within the films themselves tells a story of global domination, exploitation and indebtedness without touching this underlying layer and, from my point of view, even from a critical point of view, it naturalizes that underlying layer. 

I’m here to introduce this topic to a film studies class and humanities context. I find myself constantly weighing how much do I want to go down this rabbit hole and how much do I not? Ultimately, we’re here today to learn about film, which is, of course, social and historical and political, but sometimes I do go too far. I start citing alternative work in monetary scholarship, but sometimes it’s not appropriate. I feel really torn even in my own pedagogy that this is such a crucial question that’s just totally ignored. 

Jamee Moudud 

I think part of the problem also, Scott, is that money is a mystery. Money is not something people even think about because it’s just liquid, right? Whereas Desan says it’s blood and it’s always been blood, and it’s created and recreated in different ways, in different contexts with different consequences. 

So that is part of the deeper problem, which is the opacity of economics itself. When you think that the economy and economics is this black box, then it’s easy to say it doesn’t really answer the questions that I’m interested in. I can think of the film studies student in one of their classes saying that “I’m really interested in global inequalities after the Second World War, but I then need to go do something else.” This is opposed to saying you can go into these other things, but here’s the way by which that economic structure was constructed at the end of the Second World War. The nice thing about endogenous money is that you don’t actually have to argue for it, everybody understands that money is integral to the economy. 

The fact that this monetary system was constructed in a particular way that had all these consequences for these countries as opposed to the global north, it can be done but I don’t think it’s necessarily in the consciousness of the way people think about money and economy and inequality. Then it becomes about other issues.  

William Saas 

Well, fantastic. If you had to boil down, as we so often do in blurb form today in our oppressive, omnipresent capitalist system, what’s the central lesson you hope that folks in LPE and in cultural studies and across disciplines, take away from this book? 

Jamee Moudud 

That’s a difficult question, but as you were asking the question, I was thinking, what’s been motivating me in writing this book? In fact, once I fell into this rabbit hole ten years ago, my career has been about understanding power in its different dimensions. I think that’s been an abiding interest of mine. 

This is where you can actually get people or cultural theorists into conversation with other scholars. That’s the connective tissue of the system itself. In the book, I think that theme of power weaves its way through this entire book, at every step of the way. 

Why did I actually deal with property rights and constitutional property rights and colonialism and the far right and Hayek? All these topics have an underlying thread running through them. I think that’s really one key point, which sort of brings you back to the title of the book; both the main title and the subtitle. The theme is understanding inequality, not just narrowly as the distribution of income, but social inequity. 

One thing I do think would be kind of interesting to point out: when I teach my students “Project 2025” I have them read that 900-page mandate, one thing that I want to draw their attention to is how interdisciplinary it is. 

One thing that the far right has revealed to us is that it is profoundly interdisciplinary. From attacks against LGBTQ+ rights to very technocratic discussions about trade policy to labor to environment, this, that and the other, you can see that the way they’re thinking about and the unitary executive theory, which goes back to the physiocrats, that these are enmeshed with each other. 

So, from that standpoint, I think a new left, if you want to put it in that way, has to think about alternatives, challenges and solutions in those interdisciplinary terms and to take those arguments on their own terms. There’s a need to pose these fundamental questions around power because that framework is creating in place a kind of a neo-Victorianism. 

That’s where the conversation for this new, new left has to go. Going back to foundational questions in economics, money and property rights and business cooperation and constitutions and these kinds of things, I think it would be a good place to start. Also, language and culture, and how they are interweaving with each other is where we need to go. 

That’s what I try to do in this book. In the final chapter, which is, towards a political, political economy, like reconstructing economics, I wanted to say that all economics is political economy, including neoclassical economics, because all economics or economic schools of thought have some theory of politics relative to economics. This is as true of Milton Friedman as it is a Friedrich Hayek as it is of anybody that’s Marxist and Post-Keynesian.  A political, political economy asks, “how is that institutional framework even constructed and reconstructed toward emphasizing the politics part to it?” I do think that that’s the way the conversation has to go and sort of try my best to do that in this book. 

Scott Ferguson 

I think that’s a beautiful place to end. Jamee, thanks so much for joining us once again. Everyone should go out and purchase at their favorite retailer The Legal and Political Foundations of Capitalism: The End of Laissez Faire? 

Jamee Moudud 

With the question mark! 

Scott Ferguson 

Yes, with a question mark! This was great. 

Jamee Moudud 

Thank you so much. This was a lot of fun, such a lot of fun having this conversation.

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

In this episode, we share Part 2 of our coverage of The Black University & Community Currencies workshop (Click here for Part 1). Held April 25, 2025 on the campus of Morehouse College, the workshop fostered dialogue between students, faculty, and activists about the radical possibilities of public money for higher education, broadly, and for communities at and around Morehouse, specifically. The occasion for the workshop was the conclusion of a semester in which students enrolled in Professor Andrew Douglas’s advanced political theory course at Morehouse implemented a classroom currency called the CREDO for use by Morehouse students. 

In practice the CREDO bears close resemblance to complementary currencies like the Benjamins at SUNY Cortland, the DVDs at Denison University, and the Buckaroos at University of Missouri, Kansas City. One significant aspect that sets the CREDO apart is that it is the first we know of to have been implemented at an Historically Black College or University. Another unique attribute of the experiment is that students were invited–and very capably answered the call–by their professor to reflect publicly on their experience as users, advocates, and critics of the currency at an HBCU. 

In the first half of this two-part episode, we hear directly from Isaac Dia, Elijah Qualls, John Greene, and Bruce Malveaux–students at Morehouse College and participants in Professor Douglas’s advanced political theory course–about their experiences with the CREDO and its implications for the Black University concept. This part has been transcribed below. In the second half, we hear audio of the panel itself as it took place on April 25, 2025. Both halves of the episode reward close attention. Together they document a moment of substantial conceptual and political advance for public money theory and for the hermeneutics of provision.

A very special thank you to Isaac, Elijah, John, Bruce, and all others who participated in the panel discussion and interview.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

William Saas
Welcome to Money on the Left. It’s really nice to have you. As a way to kind of kick things off, what is the Credo? 

Elijah Qualls

The Credo is a currency that we established in our political theory course over the span of the semester. We did various tasks and jobs where we could accumulate the Credo. Primarily, this was done through community service. However, there were other events on campus that were approved through Dr. Douglas that we could also accumulate the Credo through. 

This was all with the purpose of accumulating 50 Credos to pay our taxes at the end of the semester. The entire idea and purpose of the Credo was to mobilize labor that would not have otherwise been done by students. 

William Saas 

Can you just sort of walk me through all the different ways you can earn them? 

Isaac Dia 

I feel like that was the freest way you could ever earn a currency. It was like, whatever you did, you could pretty much get a Credo. You can either do the community service, you would fill out a paper and for every hour or every certain amount of hours for community service, you would get a certain amount of Credos. 

You could buy Credos. Some people would pay $20 for 20 Credos. Some people pay $5 for 20 Credos. It’s just whatever they decided. Or you could either raise your hand, answer a question, and then they might give you between 5 to 50 Credos for whatever you answer. 

William Saas 

Andrew, was that built in or is that more of an informal thing that Isaac, you and other students developed yourselves? 

Andrew Douglas

Oh, no, that was an informal thing. I consulted mostly with Ben Wilson – and I’m going to blame Ben Wilson – ahead of time, because he’s been doing this up at SUNY Cortland.  I basically followed his model. The only officially sanctioned mechanism through which one could earn Credos was by doing community service, but they could do whatever community service they wanted to, they simply had to have their site supervisor fill out a form, indicating what work they did and how many hours.  I would pay them on 5 or 6 pay days over the course semester. Then the private sector just emerged organically, and it turned out that we had a couple of students who did a lot of work well beyond what was required to earn enough to pay the tax. 

They began to do business with their fellow classmates. It seemed like the private sector was flourishing in our classroom. 

John Greene 

If I could jump in, the special thing for me about it was kind of seeing the birth of a currency and seeing the way that a currency comes about, the way we read about in Moral Economies of Money. You have the government that establishes the demand and then they spend money on incentivizing certain labor, and then all of the money in the economy is coming directly from doing labor that is, ideally, democratically decided. Although, we never got around to actually voting on what we wanted to incentivize like we had planned. 

The idea being that, in a fundamental sense, when you have the government printing the money that is circulating in the economy, ideally, is coming directly from this labor that was incentivized by the government on a democratic basis. I thought that was very interesting and, to that point about the educational aspect, really showed exactly what we were learning about in some of our readings. 

William Saas 

Another theme of the panel that was recurrent, and I think, Isaac, you brought it up explicitly early on in the discussion, around the capacity of the Credo and the Uni and the public money perspective to educate. In your case, I think you say the best thing the Credo did was help to educate you about how money works. 

It could educate others how money works. With the US dollar, people have been educated for a very long time, through their whole lives, more or less, that money is kind of an alienating and alienable object. We come to be suspicious of it. It is the root of all evil. It is this thing that we want and revolted by at the same time. 

Can you talk to us about your experience of using the Credo? Did it feel like that to you? Was it a reinforcement of the education every time? Or was there, experientially, a moment where you felt like you might be falling into that kind of common experience of using money and having attitudes toward it that might resemble your attitudes towards the US dollar? 

Isaac Dia 

This was the one thing I was talking about during the panel. I feel like there shouldn’t be a tax for the Credo, because then that gets back to how we felt about it originally, where it is kind of transactional, where you feel that burden. When there was like a week left in class, that’s really when that private sector started to flourish because everyone was like, “oh my God, I’m like ten Credo short.” That’s when people were paying $20 for Credo. I think if we were to implement it into the real world, we could come up with a better idea for how we could get the Credo back and make sure so many people don’t have it as much instead of creating a tax. 

I know a lot of kids wanted to do a tax for the end of the year, like that’s how you would graduate. I feel like that just creates more of a burden, where you start to see the Credo like a regular dollar and you’re like, “I’m only doing this so I can graduate. I’m not doing this because I really enjoy it. This is just another burden we have.” So that would be my only thing – to get rid of taxes. 

Bruce Malveaux 

I have a counter. I think the tax is necessary because if no one had to go get it, I’m not sure many people would. It’s also deeper than just a tax. For me, it’s more like serving a community, because that’s at least what Morehouse was built off of and Morehouse got so far away from serving its community. 

So, I’m a fan of the tax. If it does get bigger, I wouldn’t mind the Credo being a community service graduation requirement. It would be how many Credos one needed to how much community service was required. Some majors are pretty deep and don’t have as much time as business majors, for example. 

John Greene 

Yeah, I would argue that the tax was kind of the entire point. The Credo is supposed to be a way of incentivizing labor that wouldn’t otherwise be incentivized and the traditional way of doing that is always coercion. In this case, failing the class is the power we have. 

In the case of governments, it is violence and throwing you in jail, or whatever that may be. As much as the coercive aspect of the system is an ideal, in our classroom or in government and in capitalism, I think the entire point of the exercise is to attempt to emulate that, to incentivize labor that we wouldn’t otherwise be doing. 

Elijah Qualls 

I think I agree with what you guys are saying about the need to incentivize people. For me personally, I didn’t have a base incentive to do the labor this semester. The reason why I did accumulate the Credo was because there was that tax at the end of the year. 

However, the reason why that tax was established was because there was not some larger market that we could operate in. We didn’t have any other way, yet, to use the Credo. We couldn’t buy things on campus with the Credo, and we didn’t even get to the point where we could use the Credo for extra credit. 

If we start adding those other kinds of ways, I don’t think it would be a coercive method. I think it would be a more cooperative means of incentives. It wouldn’t be “do this or else,” it would be “if you do this, then it opens up the opportunity for you to purchase other things.” 

Especially if we do extra credit that could cross over to other classes. I think that’s an easy way to get rid of the necessary taxation and more so drift towards a market, and then people will have an incentive to accumulate the Credo, because then they can use that in the market. 

John Greene 

I feel like that’s a question that we had throughout the class that we never fully answered. That being, every currency that we’ve ever had has been backed by the monopoly on violence that the government has by some sort of coercion. But we also brought up the idea that, in the current era, is that even why currencies continue to exist? If taxes disappear today in the United States, would people stop using the dollar? 

Will we no longer have a need for the dollar? You could kind of make arguments either way, I guess. It’s interesting, because it doesn’t feel like the tax is really the most important thing once you have a currency off the ground, but it’s also never really been tried before, as far as I know. 

That’s more of a question for you guys. What do you think? 

Andrew Douglas

I’m happy to jump in here. From my perspective, the great failure of the experiment was that we never really got around to democratizing monetary design. I, as the sovereign initially, created the exercise and we never really imposed the tax, imposed the terms for acquisition of the Credo and ideally, we would bring everybody into some conversations and some decision making over what that would entail and what that would look like. 

I suppose it was almost impossible to do that in the first run of this experiment. If we get it up and running, if we get a couple of professors buying in on a semester-by-semester basis, we could really begin to democratize some of the decision making around that. But coming back to the tax piece, we did have some very rich conversation over the course of this semester about how the tax obligation might begin to feel different or be experienced differently than it is in our day-to-day existence as US citizens who pay taxes where we feel and experience it as a burden and transactional. It might be experienced differently if we’re actively involved in making decisions about how we’re going to use the currency, what kind of work we’re going to promote, how we want to incentivize labor and engagement in various sorts of projects on and around campus. If we really buy into that, the idea of paying back a certain portion of that at the end of the semester feels less like an obligation and more like an exercise of our agency. 

We did have some really interesting conversations around that in the abstract, even if we never really got to the point where we could begin to democratize that tax obligation, that element that drives the currency in a certain respect. 

William Saas

I run a similar kind of class, but we sort of live in that design part. We do the public money sort of orientation, and then we get into actual monetary design on campus, if we had to – in fact, students have to – design a currency to fill a gap to, to serve a need, and to serve a purpose that isn’t currently being served or is underserved by the current monetary regime. 

What would that look like? Students put together their proposals over the semester. This last time I taught it, one of the more illuminating things for me was to realize how much competition our designs would have, or do have, already on campus. I was kind of delighted when I was going back and listening to the tape because this didn’t show up so much – I don’t think we heard it in the panel – but I think someone, probably someone on this call – I couldn’t quite pinpoint the voice – said, “I want to talk about getting rid of the BEDC or something like that.” 

Elijah Qualls 

Yeah, the DCB. 

William Saas 

DCB okay. Somebody said under their breath, and we never ended up talking about it, but I suspect that it’s something like competition for the Credo or would be, prospectively. What is the DCB, what does DCB stand for and what is DCB in practice? 

Bruce Malveaux

I don’t know what DCB stands for, but it’s basically like a campus dollar. You buy in and they give you X amount of dollars. It’s tied to your meal plan. I don’t think you can buy DCB outside of a meal plan. So, you buy the meal plan, and they give you X amount of DCB to go to the campus store or eat at the food spots on campus. 

Elijah Qualls 

We talked about this a couple different times in our class as well. I’m not sure if I was the one who said that or not, but I do support that notion. I think the Credo should replace the DCB because the thing is, it comes as a part of whatever meal plan you will purchase at the beginning of the semester. 

There’s no way to accumulate more after that. Right? Say you come in as a freshman, you have to get the unlimited plan. I believe that comes with 230 DCB’s. That’s a 1 to 1 transference with the US dollar.  I think things are a little cheaper if you purchase with a DCB rather than using your debit card. 

Where I think the Credo would be more beneficial is, according to the plan that we have set up here, you can accumulate the Credo by doing certain things. For example, you know, again, the most surface level thing would be doing community service, right? However, towards the end of the school year, we began exploring some other ways that you could accumulate the Credo, but those could all be explored and expanded upon. 

The benefit to that is now you could use the Credo to buy things on campus just as you would with the DCB. And again, that goes back to what I was saying earlier about the market for the Credo. This would then create an incentive for people to accumulate the Credo and then, of course, conversely, that would mobilize labor and have more projects done that originally were not getting done. 

William Saas 

Thank you. Anybody google, in the meantime, what DCB means? What does it stand for? 

Elijah Qualls 

I’m trying to Google it, but I cannot find the definition for it. 

William Saas 

This is perfect because I’ll say – while you’re doing that – at Tulane, we have at least three. There’s Splash Cash, which basically anyone can buy in and you just get dollars on your ID card. Faculty, staff, students, everybody can do that. Then there’s Wave Bucks, which I think is a lot more like the DCB meal plan oriented buying stuff at the student convenience store, stuff like that. 

Then there’s Nola Bucks, which to me seems novel to Tulane, in some way, which is cash that the university forces you to buy and are only redeemable at certain businesses in the community. It’s meant to be spent at the local Domino’s, which was one place we discovered. 

But then, of course, it’s used so infrequently that the local Domino’s is like, “what are you trying to pay me with here? What is this? Nola Bucks? I don’t know what this is,” because they have a lot of turnover or whatnot. Anyway, in any case, for your class, Professor Douglass is the sovereign, but then we sort of exist in a hierarchy where there is already a complimentary currency or a community currency at Morehouse, which is more or less just a straight 1 to 1 with the US dollar, with a little bit of a discount and probably compulsory for those who live on campus. 

I wonder, it seems like there’s some productive problem space here to investigate, as my colleague Scott Ferguson would call it. We have these competing currencies on campus; how would we reckon with them in implementation of our own? 

Bruce Malveaux 

Oh, I was going to tell you, at Emory, if you don’t spend it, they give it back to you. Morehouse is a one of one. A true one of one. 

William Saas 

So, no getting it back. 

Bruce Malveaux 

No getting that back. I actually had a problem, I had too many DCB’s and started giving them away. My friend and I actually had too many DCB’s, so we went to Slim and Huskies and we just bought almost all the pieces and we gave them to the homeless. 

William Saas 

That’s great. Come to think of it, I just went to our student store and the shelves were pretty bare because, I think students loaded up on stuff with their surplus Wave Bucks at the end of the semester. Just to say, “I’m spending this money. You’re not having it Tulane.” 

Andrew Douglas 

Yeah. I was just going to add, I often wonder how helpful these sorts of competing currencies are in terms of getting folks to think about money and complementary currency in the way that we want to, because it’s simply a way for the institution to guarantee funding. Basically, it acts as a way to force students to pay upfront so that the college can budget and finance over the course of the semester and the academic year. 

The college is operating exclusively in a kind of orthodox monetary regime sort of way, a capitalist de-risking sort of way. The students experience it in a negative kind of way as something that’s imposed on them without any agency on their part. It’s the antithesis of the kind of democratizing work that we’re trying to do around complementary currency creation. 

I think it’s important to get students to realize that these complementary currencies are already functioning all around them. But at the same time, I worry that because people’s experience is already so negative with them that it may actually be counterproductive to the work of trying to imagine otherwise. 

William Saas 

I think you’re right. What I find interesting and where our discussions went in our class around these things was around the concept of seeing an infrastructure that’s already in place on campus that, if one were to be sort of revolution minded, one could be driven to try to operationalize that to serve your project or our project. 

I think you’re right that it’s a mechanism to capture money from students in advance and probably stash that in a savings account. They start earning interest on it immediately before you even get to campus. But something like Nola Bucks here, and maybe this is unique, it’s already an attempt. It has a kind of ethos of community participation built into it. 

There is an infrastructure, and there’s at least a rationale or an argument that we could take to the administration to say, “hey, look, we want to build this out in these ways.” I’m not so sure that the other ones aren’t there and so, Andrew brings up a great point. There’s a lot of negative feeling around these campus currencies that are already in place. 

What do we got? What can we do with that? 

Elijah Qualls 

I was going to say, with a lot of these conversations, the notion that I had for a majority of the semester was that those at the top should really be pushing for programs such as this. Our board of trustees are the ones who should really begin this movement. 

Then I started to realize they don’t really have, in my opinion, a reason to want to support this. I think the best way for this to really begin or to gain traction at Morehouse is for it to be a bottom-up sort of approach. 

We create an alternative to the DCB, show that it’s working, show that it has external benefits and validity and applicability. Then, maybe at that point, those higher up who have a say so in the infrastructure at Morehouse College would then see the benefits, because I do think Morehouse is very interested in its external image. 

A lot of its revenue, particularly from admissions, comes from image and legacy. One of the great things one could do for your image, especially as an HBCU, is to create some sort of currency that is feeding off of that Afrocentric mindset of helping each other with the sense of community and building each other up. 

Morehouse College being at the center of that would be pretty – revolutionary seems a bit hyperbolic – but pretty impactful and pretty powerful to see. I think that would bring a lot of attention back to Morehouse. I think that’s where the higher-ups vested interest would come from. It would come from an increase in popularity through a program such as this that started with the students. 

I think the students need to show that there is an incentive on a large scale for something like this. 

Isaac Dia 

What Elijah was talking about with the image is true. I think a really easy way to get them to care about the image where you can kill two birds with one stone, where we can help the community and we can better Morehouse’s image is with the restaurants we already have on campus. 

They kind of do this at Georgia Tech. That’s the only reason I know this. They have Buzz Cards, and with those Buzz Cards students can go to local restaurants, like Moe’s. I think it’s like Moe’s, Waffle House, and maybe Buffalo Wild Wings or something like that, where students can use their Buzz Card. It’s their version of the DCB. they can go there, and they can scan their card there. 

Now they’re eating really good food instead of the school cafeteria. I think if Morehouse wanted to improve their image and help the community, we could have more local businesses, like Slim and Huskies. There’s a Slim and Huskies on campus and there’s a Slim and Huskies five minutes away from campus. 

I think Morehouse should partner up with them where, if you’re just out and about and you stop with Slim and Huskies, you should be able to swipe your DCB card and you should be able to eat Slim and Huskies with your DCB card, because what’s the difference between that one and then the one that is out in real life? 

I think if they were to work with more local restaurants to provide better meals for kids, that’d be a great way to help the community and improve Morehouse’s image and the students win. It’s a triple win for everybody. 

John Greene 

I agree with ‘Jah. I think that’s kind of the crucial thing. It would have to start with the students. With the Nola Bucks, it seems like the school has a vested interest in attempting to get the students more involved in the community outside of campus. I feel like Morehouse has kind of the opposite attitude. 

I feel like we all have stories of people telling us and the school telling us that they don’t want us to go off campus. That it’s dangerous out there, and if you do leave, you should make sure you bring somebody with you. Don’t be out there by yourself. I volunteer with Midnight Riot on campus where we walk around, and we’ll pick up trash in the community. 

As we go, the students who run it are always pointing out, “Oh, yeah, Morehouse owns this plot of land. Look at it. Look at all the trash that’s all over it. They don’t take care of it. They own this land over here, but it’s covered in trash.” I think it would have to start with the students. It has to be because we wanted it, or because the faculty wanted it. It would have to be bottom up to the point where, for the board of trustees, it becomes in their best interest to put their money into it; otherwise, I don’t think they ever will. 

William Saas 

It seems like something like Midnight Riot and organizations like that could also be interesting, existing social infrastructure to tap into where there’s already activity off campus when you’re being told precisely not to go. I would imagine they’ve had to make a pretty persuasive argument to do the work that they’re doing. Credo, and when the way we’ve been talking about it, is not about destroying Morehouse as it exists and building something else whole cloth. It’s not it’s not revolutionary in its current iteration. That’s good because, you know, you go to Morehouse, but there is maybe something more transitional at play.  I love the bottom-up emphasis that was present in the panel and it’s present throughout our conversation here. Are there other infrastructures on campus that you could point to and tap to help break down those barriers? 

Elijah Qualls 

We already have some infrastructure in place that does focus on outreach and betterment of the community. I know we have prison education pipeline programs in place. I wouldn’t be the first to tell you about these because I’m not involved with them, but I know they exist, and I know they’re good programs that do quality work. 

I believe Judge Murray and the political science department at Morehouse College is pretty involved with that program, where they go into the prison system and they work on educating some of the inmates there and things like that. That’s one thing. I also know our Bonner Scholarship at Morehouse College is one of, if not, the most prestigious institutional scholarship that you can receive. 

It’s a full ride scholarship. In exchange, the students who receive that scholarship have to fulfill a certain amount of community service hours to maintain that full ride scholarship. Outside of that, there’s an expectation for every single registered student organization that they fulfill a certain amount of community service hours. My organization just filed to re-register as an RSO. 

One of the things that you have to submit is your community impact, like how many community service hours and things like that. You’ll see in certain areas here and there an interest in giving back to the community and improving the community. However, those are select cases. While those are multiple examples; we have a lot of RSO’s and the Bonner scholarship is pretty large, it is still not enough. It’s not like this is a campus wide thing and I think that’s where the Credo would really come in. That kind of separation and destruction of the wall that divides us is also very important, because right now our community service comes from a subconscious place of, “I’m in a better position than you right now, so I owe it to you to give back to you.” 

I don’t think we’re even scratching the surface of the potential of what a mutual exchange could look like. Right now, I think a lot of students at Morehouse think, “I’m at college. You’re not. I’m going to give back and help you.” However, they don’t come at it at all from a place of, “how can you also help me?” 

I think there is potential for a mutual exchange. The last point I wanted to make was how you mentioned the Black University, and whether or not Morehouse needs to be completely torn down and built up anew or can it just be restructured? If we’re looking at the most earnest idea of the Black University, I don’t think Morehouse can be that. 

I think that Credo is also an opportunity to improve Morehouse to get closer to that Black University concept. I don’t think Morehouse should ever be destroyed by any means. I think Morehouse does need to take some time and reflect on what it’s doing right now, because I think it’s rapidly losing sight of its original mission. 

I think that Credo will help the students to really understand what we’re about. Morehouse should not be about wealth accumulation, in my opinion, as a humanities major. I don’t think that all the students should just be focused on accumulating a gross amount of wealth. 

I think it’s got to be something completely different as Black people looking at how our predominantly Black communities, such as the West End, are doing right now. I don’t think wealth accumulation is the only way and then you just expect to give back your money. I think it should be something more focused and skewed towards the betterment of the community and the public benefit rather than the fiscal or the monetary benefit. 

John Greene 

Kind of on that same note of RSO’s and things like that in the Black University. Big shout out to the Writing and Thinking Society. I’m the president. I’m joking. We’ve been having lots of conversations about the decline of intellectualism. 

What was that one article that was in the Maroon Tiger that we read a while back about that? We’ve had lots of conversations about how our education here at Morehouse College isn’t as radical as we would like it to be and growing opposed to the idea of the Black University. We’ve been abandoning it. The idea that maybe the Credos job could be to create communities like the Writing and Thinking Society, where we can have these conversations and educate ourselves about these things that Morehouse may not want to be a part of its core curriculum because it’s too radical, because it’s not good for business or whatever the case may be. Moving Morehouse more towards the Black University could just look like creating incentives for organizations like that. 

Isaac Dia 

I’ll say for me, the one that I know about is with the Poetry Club at Morehouse. They also do prison education, but they do it through writing and poetry. What I think is more of an issue is events like the one I had in a Chinese literature class, where the speaker came in from Asia and she was telling us her life story alongside her writing and everything. There’s like so many events like that, like the poetry one, where we had inmates come, the ones they had been teaching, they came and performed a show where they showed us all the poetry they’ve been working on. 

When we have those important community events, Morehouse will never tell you because, I guess, they just don’t care. When you get an email from the school or you get an email from Handshake or an advisor, all the emails that they spam you with are always filled with Goldman Sachs. I get ten Goldman Sachs emails a day, or Blackrock, Bank of America and Wells Fargo. I get a million emails all the time from those four people. Morehouse, as a school they have their obligations they have to meet, but I feel like they need to have more of a balance where it’s like, “yes, you’re here at school to get an education, to get a job.” To be a complete person, a complete human, you also need community, so here’s some more community type stuff. I think that’s where more of the issue with Morehouse comes. A lot of the stuff they’re talking about, like the Midnight Riot, I have never even heard about it before. 

That’s why when you talk to a lot of students on campus and you tell them, “oh, yeah, I’m a part of this group, this organization,” or something, a lot of people are like, “oh, I had never heard about that before.” I think it’s more about getting more people to know about these programs because people want to do stuff. 

I think the biggest issue is they just don’t know where to go to get things done. 

John Greene 

This is stuff we can do now, really. Even at the level that it is currently with the Credo, with Dr. Douglas controlling everything. If Dr. Douglas just wanted to say next semester, “come up with a list of things and have people vote on whether or not they want the Credo to be given out based on attendance at Midnight Riot clean up events or going to certain events we have at the Writing and Thinking Society.” These are things that are actionable even before we expand too much further. 

William Saas 

The morning panel was largely about public money. “The Black University and Community Currencies” was the name of the event. The afternoon consisted of two panels: one featuring yourself, Professor Douglas, and Camille Franklin from Community Movement Builders and Jared Ball from Morgan State University. In that first panel you talked about – I don’t know if we can call it a tension, it’s more than that – the incompatibility of the vision of the Black University with existing structures of higher education generally and more specifically, the HBCU (Historically Black Colleges & Universities). Immediately after that we had a conversation with students about the Credo. I’m asking you to go back a couple weeks now, but is there anything that you have thought since that day, since that meeting about the relative compatibility of something like the Credo with the Black University? 

Isaac Dia 

I think that the Credo can work with the Black University. I think that the only way the Black University can work is if you have a project like the Credo, because when you’re creating a Black University, if we’re going to use the Duboisian way – which I know, like Doctor Douglass loves to bring up – it’s all about being in community with the people around you. In order to have that community, you need to have a currency that can support that community. I think the Credo is the perfect way to do that. When the Black University is the one who’s issuing currency, when they’re the ones who hold the monetary power, we know that they can issue projects that will benefit the currency. They’re more likely to issue money that will benefit the community rather than a private bank who is profit-focused. This one is more community oriented and community driven. I think that when you have a real Duboisian Black University, they’ll just fundamentally come up with their own currency to help support their people because they realize they can’t rely on the US dollar or the federal system to support them in the ways that they need to be supported. 

John Greene 

I would say that the Black University is not something that could ever make money, in a capitalist sense. It’s even fundamentally opposed to the idea that its goal should be to fit into that structure. Its goal should be to envision something newer, to be a venue for new ideas separate from the current white capitalist, individualistic world that we currently live in. 

I guess you could also say that it is fundamentally incompatible with something like the Credo because of what the Credo does to replicate the current capitalist system. You could also argue that the Credo is the perfect thing to allow for people to, whilst rebelling and envisioning something new, still survive and maintain their own lives whilst participating in this work that otherwise would not be able to make them money traditionally. 

Isaac Dia 

When you say the Credo replicates the capitalist system, I’m not sure I really understand. Do you think you could explain it? 

John Greene

Just in that you’re taking the money and you’re working for it and you’re paying for it. There is the idea that there would be a private sector and the eventual goal, especially for the Credo to work in something like a Black University, you would probably need to get to the level we talked about, having it backed by the Fed or by the US dollar in some way. This wraps it around into being a form of capitalism and a different branch of the capitalist system, even if it would be more of a public money centered thing. It still would be fundamentally connected to the system that the Black University would be trying to disconnect itself from. 

Andrew Douglas 

I’ll just add, we didn’t get into Marx in the class, but Dubois, in his later years, turned Marxist. It depends on how far we take that critique of capital and the value form and the wage relation. I think your intuition, John, is moving in that direction. Even a kind of community controlled or designed and managed currency is still mobilizing commodified labor power and is still operating within the wage relation. 

There are certainly critiques of the capitalist value form that would take issue with that. I think your intuition is kind of moving in a kind of conventional Marxist direction there. 

John Greene 

Yeah, I do agree with that, I think. 

William Saas 

Isaac, are you satisfied by John’s answer there? 

Isaac Dia 

Yeah, I understand the answer. I don’t think I agree with his outcome, but I definitely get where he’s coming from. 

William Saas 

On what grounds do you disagree? 

Isaac Dia 

I can see how, if the Credo were to continue in a traditional sense, we could end up with the same wage exploitation and capital relations that exist now, but  since we’re using it in the Black University and the Black University is here for radical change, this gives us the opportunity to implement real change. 

I think, if the Credo is actually to be used, we don’t have to tie it to the US dollar. That’s a way people get stuck; we don’t have to do the conventional thing anymore. We can branch out. If we really want to dismantle the system that’s going on, why would we then take our dollars to reintroduce them back to the US dollar, when we can use the Credo as its own form of currency? 

We can get people to actually use that rather than US dollars. That’s just the way I was thinking about it. So that’s the only reason I disagree. 

John Greene 

That’s an issue that rears its head over and over again. To what degree should you be participating in the system to work against the system? Working within the system can often make it easier for you to sustain yourself and cast a broader net in whatever movement you’re building. 

However, often you can end up being corrupted by the system and replicating the system versus attempting to do your own thing, which requires much more sacrifice. It will likely mean a lot less people will be involved in your movement – initially, at least – but can maintain some sort of purity, but what does that even mean if you don’t get anything done right? 

Isaac Dia 

Yeah. It sounds like we’re on the same page. 

Bruce Malveaux 

My question would be, how would you get people to use the Credo as a US dollar? What would the Credo be used for that the US dollar couldn’t be used for? 

Isaac Dia 

That’s always the toughest question. Getting people to use the Credo is something I talked about during the panel. If I gave you a dollar and if I gave you a Credo and I said, “hey, for the Credo, you have much more power in how you can spend it and how it’s invested,” I think more people would take that option over me just giving them a regular US dollar. If you were to really educate people on the power that they can have with the new money that we want to introduce into the world, I think they would be a little more accepting of the new dollar, the new Credo, rather than a traditional US dollar where they really don’t have much of a say in how it’s spent, how it’s used, or the value of it. If you tell somebody, “You can determine the value of the Credo,” like, let’s say one day you want to make one Credo worth five Credos instead of one Credo. Then, I think people will be down for an idea like that, when you can tell them, “You can get money for research with the Credos,” I think more people will be more willing to use it once they can understand the power that they can now hold from a more democratized currency. I think that’s how you get more people to use it. 

Bruce Malveaux 

Who will take the loss? 

Isaac Dia 

The currency issuer.  Morehouse would take the loss if we were using the Black University as an example. 

Andrew Douglas 

I think what you’re speaking about, Isaac, is the power of monetary agency. Currently, as we’re sort of taught to think about how we use the US dollar, we don’t have a sense that we have any agency in its design, in its management, in its issuance. What we’re thinking about here is bringing a smaller local community together in a much more democratic way to exercise some agency over how that currency is issued, against what it’s issued, what kind of labor we want to try to mobilize, what sorts of things we want to invest in. Bruce, to your point, I think part of the idea behind this, anyway, is to get beyond some of the strictures of zero sum thinking, so that our instinct isn’t always to think about who’s going to take the loss, but to think about what we can do for one another through relationships of reciprocity, through relationships of give and take, democratizing those relationships in ways that are more mutually self-satisfying to participants in the process. I get where you go with that question of loss. We had some serious conversations in the classroom about how an institution, like a Morehouse, could afford to experiment with this complimentary currency given the fact that the institution and its business model and its legal status is still, by and large, beholden to the orthodoxy of the US dollar. 

William Saas 

This is great. Isaac in the panel, you very optimistically said the biggest benefit of the Credo project is the education that we can get from it. “We” being the students in the class. I think more broadly we’ve been talking about anyone who participates in such a project. You also kind of get a little bit more pointed and specific and suggest that the Credo assignment would be “fantastic,” your words, for the economics department. I want to suggest that, as an audience member, I found that to be intriguing for a couple of reasons. I think that would be pretty uncommon for an economics department. As you know, no doubt, from the kind of survey of neoclassical orthodoxy and mainstream economics that you would have gotten in your class, that many of them have no place for money in their syllabus. 

In fact, money is kind of thought to be this thing that’s not that interesting. Why would they do it? I’m holding out that maybe the Morehouse economics department would be interested, but if you could expand on that comment, why would it be particularly good for economics departments to do it? Why might they be particularly receptive to an assignment related to developing and using a classroom currency? 

Isaac Dia 

My thinking behind why an economics department would really love a Credo was – this gets back to my main point – the education that the Credo can provide is almost unlimited. I’ve had to take macro and microeconomics as a course requirement for Morehouse. 

When you’re learning about those concepts, kind of like how we do in political science, money is treated as a given. They just assume that this is how money works, this is what it is used for. We’re just going to show you the math behind it. 

When I think about introducing the Credo, the student’s brain would explode and they’d be like, “oh, my goodness.” I, as an economist, now that I know there’s this thing called the finance franchise. The Fed uses interest rates and unemployment to regulate how much money is in the economy and the way that it’s used. The banks are issued money by them and the banks can create money on their own. This will show them that me, as an individual, will have a say in how money is used. Now I can take my knowledge, and I can go to a company like Goldman Sachs. I can even go to the government. We can have people who understand what money can do for them, and they can go into the system, like in government and the federal system, maybe they can even go to – if they really want to help take down the “evil capitalist,” quote unquote, they can go to like a Blackrock or Goldman Sachs and start applying the knowledge to help improve their communities. 

William Saas 

And you got the email addresses of Blackrock and Wells Fargo because the email you every day. 

Isaac Dia 

Oh yeah. Yeah. 

John Greene 

That kind of plays into the whole question of, “what is the goal of current education in economics?” Are they just educated to reproduce the current system? Would they be receptive to new ideas, like the Credo, that MMT are attempting to put onto the table? 

The idea of monetary silencing, the idea that economics and politics have been brought to us as separate entities for so long and that one of the primary goals of MMT is to bring them back together again. To end this monetary silencing, to show that politics and economics are one in the same in many ways. 

I think that would certainly be very interesting. I just don’t know if that is ever going to be the purpose of current economics as we know it.  

Andrew Douglas

If I could just jump in here, my econ colleagues are wonderful, I love them to death. There’s only a handful of them. We’re a tiny college, right? I don’t think any of them really teach money regularly or certainly don’t specialize in monetary policy. I think that means, interestingly, there’s a lot of potential there. I don’t know that there’s going to be any kind of principled or committed pushback, necessarily. Part of what I’m interested in as a political scientist is thinking about money as a creature of law and politics and wrestling money away from economics as a discipline to some extent and anchoring it in political science as a discipline. 

Realizing that all of these things are interdisciplinary. Money is an enormously and naturally interdependent and interdisciplinary sort of thing. The founder of our department here at Morehouse, Robert Brisbane, initiated political science instruction back in 1948. We have a thing called the Brisbane Institute that’s been moribund for a number of years. 

I want to try to revitalize it and put the Credo project at the center. The purpose of that institute was to provide a kind of home for public facing, publicly engaged political science teaching and learning. It seems to me that the Credo project is an ideal project to relaunch that institute, tapping into some of the more aspirational dimensions of our mission: past, present and future. 

William Saas 

That’s incredibly exciting to hear. I didn’t know that. Did you talk about that in class, or is that that fresh? 

John Greene 

We talked about it a bit. 

William Saas 

Awesome. We have the Credo at Morehouse. Morehouse and its relation to the West End. What about Atlanta? Where does the Credo come in in the municipal city context of where you all live? 

Andrew Douglas 

This is something we talked about a bit in class, thinking about creating the demand for the currency as we scale it from a campus currency to potentially a community currency, and potentially to be something that could be used to pay staff, faculty, and students in wages. We’ve talked about appealing to the city of Atlanta to allow Credos to be used for city tax purposes, and appealing to the city to demonstrate its commitment to Morehouse, Spelman, Clark, and all the schools of the Atlanta University Center. They have long treasured these universities as these core Atlanta institutions. This would be a great way for the city to demonstrate its commitment to these institutions by agreeing to accept institutionally issued currency for city tax purposes. 

Of course, that would go a long way toward creating a demand such that if people could use the Credo to pay their city taxes or at least a portion of it, they would be more willing to accept Credos as a portion of their wages. This is something we’ve talked about. I know, again, Benjamin Wilson, has been on Money on the Left talking about trying to experiment with this in Ithaca, and other places up in New York, but coming back to the point we mentioned earlier about a student driven bottom-up approach to this, nobody is more persuasive than the students themselves. If they approach the city council, the mayor’s office, the city reps with a proposal like this, I think it would be very hard for elected officials in the city of Atlanta to just shoot that down.  

William Saas 

We got some ambassadors for it on this call. That’s tremendously exciting to hear about as a prospect combined with the Brisbane Institute. It sounds like an amazing one-two-punch. We’ll have to have you back when that starts to roll out. 

In the meantime, by way of closing, I know that Andrew has been at this for a couple of years, at least a few years, talking about public money in your classes. I’m interested in hearing about whether and how John, Isaac and Elijah have had occasion since taking the course to teach someone else about public money, to walk them through public money, MMT, and constitutional theory. What’s that been like? 

Elijah Qualls 

I have two different instances. When I was leaving Morehouse, I was on my way back to Ohio and my dad was driving me. It’s about an eight-hour drive. We were just kind of sitting and talking and I think my dad may end up listening to this podcast later on. 

He’ll be the first one to tell you he’s very conservatively minded. A lot of his ideals go towards the right. When being presented with something like this, his immediate responses were to provide push back and ask questions transparently like, “How realistic do you think this is? 

Do you really think this would actually work? Why would people want to buy into it?” Quite frankly, he was asking the same questions that our class was asking at the beginning of this semester. This is hard, especially coming from the public money lens, right? It’s not necessarily taking your concept of economics and turning it on its head, but it is significantly contradicting a lot of the concepts that we had already understood. 

It was interesting to speak with him about it. In the end, he still didn’t buy into it, but I did not expect him to, of course. That was one instance. Also, talking to the student body at the workshop that we had. I don’t know if you had seen it, but during lunch there were a couple students who had come to my table, and I was explaining it to them. 

It is a tough thing, in my first few interactions with it coming from Dr. Douglass, I still was struggling to buy into this whole notion, especially with MMT. I’m like, “what are you talking about, our taxes don’t actually go towards anything?” It’s a difficult thing because you’re socialized your entire life to understand that the roads you drive on, the freeways you take, and all the public entities that you enjoy are funded effectively by you. 

If I understand MMT correctly, it takes that notion and retorts, “what your taxes serve to do is legitimize the US dollar and the public good that you enjoy could have been funded whether you paid taxes or not, in theory.” Right. I will say, even to those who are listening to this podcast now and they’re like, “this seems a little far fetched,” that’s a normal response. That’s how I responded. But it’s important to explore and leave no question unanswered. Ask all the questions you may have. When you do that, you begin to see the legitimacy behind the modern monetary theory and behind the public money concept. I think talking to the students and some family members about this has helped me gain a better understanding of the theory and see where it can apply and then what we can do with it, particularly, of course, looking at the “uni” project and the Credo. 

John Greene 

I have also explained it to my parents. I also have one friend who’s a super ultra mega liberal, and I’d be going back and forth with him and trying to turn him into a comrade. It never really goes well. I’ll have him on the ropes and then he’ll come back the next day, having refortified himself. One of the times we were talking, I was just like, “yeah, you know, the government prints money and taxpayer money is a myth” and all this MMT stuff. 

I tried to take him through the whole thing and then eventually loop that back around to get him to agree and it didn’t work, but I think he was buying some of the MMT stuff at least. 

Isaac Dia 

Yeah. I’m a little luckier than Elijah and John. My parents, like my whole family are pretty tired of capitalism already. When I had told them, “There might be an alternative,” they’re just like, “hey, sign me up for it. You don’t even have to tell me. Just sign me up.” 

I’ve been pretty lucky. I think the biggest challenge has been trying to incorporate a complementary currency in real life. I do stuff on the side. I have my own little organization in things I do. As a way to practice and see if this can work, I’ve tried to implement my own currency or where I’m not too focused on the dollar, exactly. If I need something, is there a way I can get it without having to exactly pay for it? I know it sounds like I’m stealing, but I promise I’m not. I just try and find an alternative to using the US dollar as much, and that’s been like a huge challenge for me. When you approach somebody and need camera equipment, I’m like, “hey, I know I need all this equipment from you. I don’t have money, but I can provide something else.” Trying to explain that to people and show them how it can be beneficial to them has been a challenge, but it’s something I’ve been working on in practice. 

William Saas 

What’s funny is that there are multiple ways to get things. Paying for them, straight-out, in US dollars is the easiest way. There’s a hierarchy here. You can also use a credit card. I’m not saying do that either. I’m saying that – and it came up in the panel and across the panels – there are alternative currencies that people use all the time to pay for things like airline miles, like credit card company points. 

Well, I’ve certainly learned a lot, both through our conversation today and from your panel discussion. I want to thank each of you so much for your time today and for all of your deep and meaningful thinking about this very important and central question of monetary agency and of monetary design in our current moment of democratic turmoil. 

Even if we weren’t where we are today, it would still be critically important for reasons that I think you spell out in your work. Thank you so much for joining us at Money on the Left. 

John Greene

Thanks for your questions. It was a fun conversation. 

Isaac Dia 

Yeah. Thank you for having this. I enjoyed it.

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

We speak with Lauren Arrington about her forthcoming book on women artists in the Federal Arts Project. The Great Depression rendered 140,000 women and girls across the United States homeless. In 1935, Franklin Delano Roosevelt founded the Works Progress Administration (WPA) that employed 8.5 million people over the course of eight years. Soon, the WPA instituted a landmark ruling forbidding sexual discrimination. As a result, between thirty and forty percent of newly hired artists on federal projects were women. This equity of opportunity enabled women to rise to positions of leadership and have access to resources that had a lasting effect on national institutions and on the history of art. In her book, Arrington challenges the popular memory of WPA art as a story of straight white men. Instead, she argues that the works of art that many women created under the Federal Arts Project made visible Black, immigrant, and women’s lives in a way that challenged segregationist, xenophobic, and sexist structures intrinsic in the nation’s institutions.

During our conversation, Arrington explores the extraordinary achievements and tribulations of New Deal women artists and administrators. Among them include Alice Neel, Gwendolyn Bennett, Augusta Savage, Georgette Seabrooke, Lenore Thomas, and Pablita Velarde. Along the way, we track how these women and the Federal Art Project more broadly came under fire from local and national government officials who attempted to censor or suppress their radical work, to fire them from their jobs or force their resignations from projects, and to investigate them for “un-American” activity. We contemplate the challenges of writing histories of lost and often deliberately destroyed archives. And we consider the lessons of women’s participation in the Federal Arts Project for the future politics of public arts provisioning.

Lauren Arrington is Chair and Professor of English at University of South Florida.

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

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

Lauren Arrington, welcome to Money on the Left.

Lauren Arrington

Thanks. I’m so glad to be here with you.

Scott Ferguson

I am so happy to have you here with me. We’ve invited you on the show this month to talk to us about a book that you’ve just finished writing and is in production and is not out yet. It doesn’t even have a title yet, although you’ve told me you’re floating some ideas. It is about women artists, diverse women artists, who worked and contested, and variously participated in the shaping of the New Deal arts programs.

Before we get into our discussion about your new book, I want to invite you to tell our audience a little bit about yourself; your professional background, what discipline you’re in, the kind of research you’ve done up until this moment, before we turn to this particular book project.

Lauren Arrington

Sure.  I’m a Professor of English at the University of South Florida. I grew up in Florida and came back about two years ago after spending most of my career in the UK, and most recently in Ireland. I did my doctorate at Oxford University and then just ended up staying in the UK by various good fortunes.

My doctoral research — I only belatedly realized — kind of set me on the course of the common thread that runs through all of my books. I was working on the question of government funding of the Irish National Theater and the impact that that funding had on the theater’s productions. I started out my career as a literary scholar, focusing mostly on Irish literature and then British literature.

The big kind of monolith in Irish literary history was that there was no censorship of the theater in Ireland, that it was a free theater, unlike the theaters in Britain, which had censorship coming from the Lord Chamberlain’s office. But that didn’t make a lot of sense to me, because if you’re taking state money, particularly from a government like the early Irish one that has a really strong ideological program, surely, they’re going to want some measure of compliance in the kind of art you’re producing. Can there really be free art when you’re taking government money?

I investigated that question and was able to turn up some new archival sources and show that actually there were private compromises and even instances of self-censorship from some really big players like W. B. Yates, who was a director of the theater. He is best known as a poet and was also a playwright. That rewrote the question of how state funding and the arts worked in the early Irish state. After that, my second book was about an Irish socialist republican called Constance Markievicz. Her last name was a Polish name because she married a Polish artist that she met in Paris where they were both in art school. Her movements in art circles in Paris and London and Dublin are what mobilized her to the politics which she arrived at socialist republicanism.

I was really interested in, after writing that biography, staying in the field of life writing. My most recent book was a group biography of poets including Yates and Ezra Pound, who were living in Rapallo, Italy, during the early years of Mussolini’s regime. I was thinking about the question of fascist aesthetics, how fascism in Italy took a very aesthetic impetus.

It was very different to German National Socialism and the way that certain ideas, particularly ideas about the past, were recovered and represented in art and in Mussolini’s Italy. I was thinking about the way that those poets were influenced by those aesthetics that were coming through the regime and being, in many ways, interpreted by Ezra Pound.

Most people think Ezra Pound is fascist. He’s arrested by the Americans and has a famous trial in the US. He goes back to Italy as soon as he can, gives a fascist salute, famously, from the boat. But most people don’t think about the poets who are visiting him and in his circle as having any kind of fascist orientation.

I was thinking particularly about the ways that those aesthetics were encoded in poetry that we might not really see. That was my book, The Poets of Rapallo, which came out in 2021 during the pandemic. The pandemic is actually where I started thinking about this book that I’ve just finished, which is going to come out with St. Martin’s Press, which is a division of Macmillan, in late 2026.

Scott Ferguson

The through line seems fairly clear. You’ve been thinking about how state finance variously inflects aesthetic production and social life. It would seem very natural that you would turn to similar questions during the New Deal in the United States. But maybe you can talk to us a little bit more about what motivated you to make this particular turn.

I kept wondering, were you thinking about this during the end of Trump 1.0 or did that come after?

Lauren Arrington

It was actually after the project began — which is kind of strange now to think about, given what’s happening on or in our federal landscape — but the project actually began in a moment of optimism.

Scott Ferguson

That’s what I was wondering.

Lauren Arrington

Yeah. We were living in Ireland, where I had taken a job at a university. It was lockdown, which meant something very different in most of Europe to what it meant in the US, particularly in Florida, where there were very few pandemic restrictions. In Ireland, it was about two years of restriction on social life.

During the depths of the pandemic, we couldn’t leave our apartment except to go grocery shopping once a week, and everyone was permitted to take one walk a day, but you couldn’t go further than a mile from your house. It was a very dark psychic landscape that most of us were living in.

There was, of course, also a very real economic impact and the Irish state saw this.  Politicians started thinking about the concept of universal basic income, which of course has been circulating for a while. In particular, they were thinking about how a version of that could be applied to visual artists, performing artists and writers in Ireland because there had been an immediate and detrimental effect on performing arts and visual arts, particularly with exhibitions closed.

There were no gigs, no concerts, no pubs even to play in. Book buying went up slightly, but then new books often went under the radar because there couldn’t be the kinds of launches that bring the media attention that, particularly, emerging authors need. The Irish state began a pilot scheme for artists and writers to sort of fund a base level of income in a way to compensate for those losses of the pandemic.

I was seeing all this unfold, and I was thinking about the New Deal. Why is nobody talking about FDR?  This is the precedent here. I started reading and doing research on the New Deal from my laptop because there were no libraries open.

Everything that I kept reading was turning up the very same story, dry history, post office art, rural programs, which were important, but seemed to be the only story. We’re all hearing about the Farm Services Administration. We all know Dorothea Lange’s photographs, the Dust Bowl migration murals that are kind of glorifying this American colonialist expansion.

I started going deeper and deeper. I was like, this can’t be all there was. Then I started reading about the community arts projects and community art centers. I started finding names that I didn’t recognize and digging as far as I could into various archives wondering, “who are these people?”

There were a lot of women, particularly women of color, communist women, Native American women, who had been written out of the historical record.  I thought I really wanted to tell their stories and not just the story of the arts projects again. I didn’t want to write another doorstop book about the New Deal.

I wanted to write a book that was focused on the lives of these women and how, in the midst of the depression, they found ways to live as artists and to keep themselves creatively alive, and the role that the state played in making that kind of creativity possible.

Scott Ferguson

Maybe we can pull back to the beginning of the New Deal and the very idea about financing the arts. How did that come about? How was it shaped at first? How was it variously discriminatory toward women and people of color? And how did some of those broader contestations play out?

Lauren Arrington

Right. We all talk about FDR as the architect of the New Deal, but actually the architect was probably Harry Hopkins. He was who did the real idea generation, we might say, and as for this aspect of Roosevelt’s presidency, he was his right hand and top adviser. Hopkins had this vision for this kind of national structure.

He invited Holger Cahill, who was involved in the early Museum of Modern Art, to think through this process. Holger Cahill tapped a woman called Audrey McMahon, who had started a pilot project to help fund artists in New York, where there was, of course, a high concentration of artists for various reasons.

For one, the nature of New York as an arts and cultural hub, also, the Great Migration, which brought new energy into the city and new networks and new kinds of artistic production. Audrey McMahon had piloted this program for artists in New York. Holger Cahill knew about it, so he invited Audrey McMahon to come to DC and talk about the idea.

Out of those conversations emerged the Federal Arts Project. McMahon remained a key player because she was appointed as director of the Federal Arts Project for New York which means that she has probably the most powerful position in all of the federal arts project because of the volume of artists that she’s dealing with.

She’s also a woman torn between bureaucracy and passion. She has a real passion for art. She is involved in the art education at NYU, which is where she starts this pilot project. But she also is an administrator and is constrained by the bureaucracy with which she is presented. She always has to make her budget.

In doing that, she’s forced to make some pretty harsh cuts at key points to the federal arts projects that are handed down to her. The artists don’t see that. They don’t understand how she’s squeezed between an idea that actually originated with her, although she doesn’t really get the credit for it and the pressures that she’s under that are coming from DC.

The Artists Union actually pickets her offices, which comes together in order to defend the right of artists to have employment and fair working conditions, and they advocate for those rights under the New Deal. They come to picket McMahon’s office. She doesn’t know what to do. She gets angry, I think, because she doesn’t feel seen or understood.

Because she’s an administrator, she’s automatically vilified as, like, a department chair.

As soon as you become an administrator, you’re like a baddie, right? No matter your intentions. She doesn’t feel seen. She gets really angry at the artists, at their inability to understand the economic constraints.  That the budget isn’t bottomless, right? There are only so many funds. But she does make some pretty big missteps.

One of those is understanding the way that racism is inherent to the structures of the New Deal. Despite what they’re saying in DC, it has a racist structure of privilege encoded in it, and she cuts black jobs first. She participates in that. Black artists then form their own union, which is open to anybody, but it’s primarily black artists, in order to lobby for that reinstatement.

And they actually have some measure of success and get jobs reinstated early on in the project. Soon those are eventually cut as the project is pruned and ultimately decimated as we head into the Second World War.

Scott Ferguson

I think for a lot of people, we imagine that when we think about the New Deal arts projects, we think there were some photographs documenting poverty in the Dust Bowl. There was a lot of easel painting of the so-called “American scene,” which were potentially, not only ideologically conservative, but also aesthetically conservative; not pushing beyond perspectival conventions that had been around since the Renaissance.

 I think we also have a sense of a certain kind of paternalism, which of course was there and so were the American scene paintings. In this kind of paternalism, or “Well, we’re just funding some art, and everybody does what they’re supposed to do and then it’s over.”

Whereas what your project shows us is that it was improvised and contested and messy and involved all kinds of creative triumphs, as well as horrible, horrible decisions and problematic organizations. I think one of the many impulses in this book that I really picked up on, and I actually regret framing this book at the outset as being just about artists,

is thinking about people in leadership roles, whether they are literally artists who are taking up leadership roles or are just variously taking up these organizing roles, because without that work there would be no artwork. I’m so fascinated by potentially even thinking about the aesthetic dimensions of what it is to organize, to socially reproduce.

What does it mean to have a school that teaches children how to sculpt, how to do printmaking, how to write poetry or whatever it’s going to be? And I love that you’ve introduced this right away. You can’t separate it. This isn’t just a story of some solo artists. It’s a story of a whole improvised apparatus of administrators and artists, and sometimes people cross roles.

Lauren Arrington

Absolutely. That was one of the things that made this book so hard to write because, like I said, I didn’t want to write a doorstop history of the New Deal arts projects. The challenge was how to convey that sense of collectivity among a handful of artists whose careers I wanted to highlight, and I began thinking about it as a group biography.

Folks were asking me early on, “How is this a group biography?” “Did they know each other?” You know what I mean? Because it wasn’t like the Bloomsbury Group where there were geographical constraints and a common artistic purpose, the sense of starting something new together and a lot of direct collaboration between these artists.

When you’re an artist, most artists are kind of working on their own. I allowed that to get in my head a little bit. Then I realized that actually it is a group biography because the structures create the group.

Scott Ferguson

And the groups create the structures. One of the moments that I love is when you’re talking about as the Harlem Renaissance is dying down and the depression is kicking up, Harlem starts to kind of create these new spaces that were actually, in certain ways, more based on group solidarity and were less beholden to white rich patrons who very much put their stamp on what would count as representations of black life.

Lauren Arrington

Absolutely. There was a real desire in Harlem, particularly, to get away from that legacy of the Harlem Renaissance as being the product of white patronage and a desire to advocate for black artists to be in administrative roles. Charles Alston is an important collaborator with Augusta Savage in that regard. He has a group that is more like a group called the 306 group, and they meet in what was an old horse stable in Harlem and have political conversations and conversations about art and conversations about the economy and conversations about what power means now.

That’s where we see this push against McMahon, and against the Federal Arts Project to instate more black administrators who have better salaries and better opportunities and to eliminate that kind of glass ceiling. But we know that there are tensions there, too, between folks who rose to prominence under the old order and folks coming up with a new way of doing things.

Even in Harlem, we’re seeing those kinds of tensions between the old guard of the Harlem Renaissance and new visionaries like Augusta Savage. Several of these artists, like Pablita Velarde is another one of those artists who we could talk about, who has to face challenges from within her own local network as well as challenges from the government apparatus in order to do the work that she feels compelled to do.

Scott Ferguson

Yeah, let’s switch to her because that pushes us across the country, right? They’re in a very different scene with a different set of political legacies, constraints, entanglements, and horrors.

Lauren Arrington

Yeah, absolutely. Pablita Velarde was a pueblo woman who grew up just north of Santa Fe. She, like Augusta Savage, shows talent as an artist from a really young age, but is constrained by social convention in terms of the role that she should play. Women in Pueblo culture were not artists, they worked with textiles. They should not be visual artists. Pablita Velarde is sent to a boarding school in Santa Fe where she, because of an early iteration of the federal arts project, is introduced to mural painting. Through that she is mentored as an artist and through those connections that she makes at her school, she is tapped by the National Park Service to make art for Bandelier National Monument, which is a big national monument under the National Park Service. It is northwest of Santa Fe and just south of Los Alamos, where the CCC, the Civilian Conservation Corps, had started, making this national park, and they’re now building a visitor’s center, and they realized they need some art for the exhibits. So, she is sideways funded through the Federal Arts Project to make that art there. But again, she’s faced with constraints about what the Park Service believes Pueblo culture should look like and her own direct experience of growing up under Tewa culture in particular.

Scott Ferguson

You suggest in the book that a lot of the dictates from the white administrators is based on relatively old and problematic, ethnographic research. There’s also the interesting twist that there are certain rituals or aspects of Native American life that perhaps shouldn’t be depicted in public, if I’m remembering correctly. There’s all kinds of constraints and challenges that she’s negotiating.

Lauren Arrington

That’s right, that’s right. Even within Pueblo culture, which is very much a Spanish invention, from one way of colonization of what is now the American Southwest, there are different cultures. Pablita Velarde grew up on Santa Clara Pueblo, which is a settlement of a group of people descended from the Tewa people who were absorbed into a more hegemonic kind of Pueblo culture.

There were particular dances that were not supposed to be witnessed by women. There are other dances that should only be witnessed by members of that culture and not subject to tourists. Pablita Velarde is torn between portraying what she sees as these beautiful, celebratory parts of her culture and the cultural diktat that those are private moments.

The question over whether she should portray that actually comes when she’s further along in the Bandelier National Monument project, because early on she’s basically prescribed paintings that have been or gleaned by employees of the National Park Service from reading ethnographic research that doesn’t even relate to her culture. They’re just being absorbed and purported to be like Tewa Pueblo dances, Tewa Pueblo traditions.

They actually belong to completely different cultures altogether. There is just this hegemonic idea of what, quote, “Pueblo culture” is like. She starts to push against that, to add her own levels of detail, and then as she’s given more agency in the project, she starts to develop her own ideas for scenes that she would like to paint for the visitor’s center.

Scott Ferguson

This might be a nice opportunity to plunge into some aesthetic strategies and details. Your book is filled with beautiful readings of various artworks of various styles. Do you want to talk about Velarde’s particular kind of aesthetic strategies with reference to one or more works that you unpack in the book?

Lauren Arrington

Sure. I want to talk a little bit about my visit to the archive where the paintings are held. The paintings are in Tucson at the Western Archeological Conservation Center, which is a division of the National Park Service. It took months and months and months for me to get a visit arranged to the conservation center. 

Scott Ferguson

Why was that? Was that pandemic related or…?

Lauren Arrington

That was staffing related. So again, if we talk about federal resources, when I got there I realized the issue, and some really helpful archivists explained to me that there had been various furloughs. 

Scott Ferguson

Austere staffing.

Lauren Arrington

Exactly, austerity staffing. Meanwhile, their inboxes kept filling up, and so it was only when I picked up the phone right before I was getting ready to head off on my archive trips that I was able to get through.

They were so helpful once I was there. So helpful. But one of the restrictions of the archive is that there were a number of paintings that I could not take pictures of because there had been conversations with the Tribal Council that they should not be reproduced. 

Scott Ferguson

For what reason?

Lauren Arrington

The images depicted should not be witnessed by Anglo people, folks from outside of Pueblo culture. So those ideas that Velarde was working with when she was making the paintings persist with regard to certain paintings. Her paintings are very a flat style of painting, which – in art history – was contested because it was very much imposed in a way as a Santa Fe style of painting drawn from an ethnographic primitivist view of what art from the region historically looked like and a desire, in a way, to perpetuate a linear history of a particular art style. There was an art teacher called Dorothy Dunn, who taught at Santa Fe Indian School, where Velarde was, that schooled the children in this particular style of painting.

When we are thinking about Augusta Savage and the freedom that students had in her studio to experiment with clay, there’s a kind of an inverse situation in Santa Fe Indian School where we have a white art historian teaching “Native American art” to students from the pueblos in the surrounding region who been steeped in that culture for their entire lives.

It’s very prescriptive, this kind of Santa Fe style, but it takes off. It’s very popular. It has a market, and that’s one of the reasons that these artists were encouraged to perpetuate the style as well, because it’s sold to tourists and we see Velarde making an income for herself once she finishes school, by being able to sell this art.

Scott Ferguson

I want to make sure that we talk a little bit about the challenges of this archive, which I can let you explain, but it’s rather slim for political and historical reasons. Maybe talk a little bit about why the archive is so slim and what kinds of challenges that you’ve faced in researching and writing, and how you’ve tried to get around these absences.

Lauren Arrington

Yeah. If I had known this book was going to be so challenging to write, I like to think I would still have written it, but I am not so sure. And let me tell you, my next book is going to be about someone who has left thousands of pages of archives.

Scott Ferguson

Yes.

Lauren Arrington

I am tired from sleuthing. Writing about underrepresented artists, you have those challenges of there not being the funding structures in place, perceptions of value that mean that their archives have been preserved. Sometimes we know that’s because of economic status, and sometimes that is because of structural racism. Sometimes that is because of the politics of the artists themselves, or what parts of their lives that they were not comfortable having preserved.

I’m thinking particularly here about an artist called Lenore Thomas Straus. Lenore Thomas, as she was when she was working on the project, was commissioned to create a series of friezes for the first planned town in the United States called Green Belt, in Maryland, just outside of D.C. 

Scott Ferguson

A proto suburb.

Lauren Arrington

Exactly. You can read about this in the book, but basically the whole project of these green belt towns were segregationist and Lenore Thomas fought against that. The kinds of scenes that she wanted to depict in those friezes were anti-lynching and anti-lynching sculpture that is censored.

But in relation to her archive, what I’m thinking about is that Lenore Thomas was queer. She had a lover, Sally Ringe, who she lived with in Virginia and then in Maryland. She was also a communist. She had two huge black marks against her in terms of the McCarthy era. Lenore Thomas’s archive, which exists in the Greenbelt Museum, curated by a wonderful archivist, Megan Sharon Young, consists of mostly photographs. Not letters and not personal papers. Just photographs of her and photographs that she took of her work in Greenbelt.

When I was writing about Lenore, I wrote mostly from photographs in order to understand things like her perception of the world around her. I could contrast the photographs that she took with official photographs from the New Deal agencies in order to understand how she was contesting those racist hierarchies of power as they played out on the Greenbelt site.

Scott Ferguson

Yeah. Can you talk a little bit more about that? One of my many favorite parts of this book is when you’re contrasting. What’s the name of the photographer who uses angles in a very racialized way? You read her photography and argue how she is pushing against that. Can you spell out these details that are still a little fuzzy for me to remember.

Lauren Arrington

Yeah, sure. Carl Mydans is one of the main photographers on the Greenbelt site. He’s probably who you’re thinking about, but in the whole photographic section of the resettlement administration, as it was called, and the farm security administration where Dorothea Lange works, they were taught a particular photographic aesthetic that played to what you were talking about earlier in terms of this white, paternalistic, colonialist American dream.

Firstly, Greenbelt was not a segregated work site. There were white workers and black workers on the site, but they were captured doing very different kinds of labor and photographed in prejudicial ways. Mydans photographed these white workers often from a low angle. You see them against these like clear blue skies; you can intuit it’s blue even though they’re black and white. There are clear skies, and these almost three-quarter profile portraits presenting this heroic portrait of upstanding American laborers. Right? The black workers are photographed from a high angle. They’re photographed by Mydans, and he’s obviously standing on something, a ladder or a truck or something.

He’s pointing the camera down and so you see the tops of their heads. You literally see them against the dirt. It is the opposite image for these black workers. That is deliberate, as we know from Dorothea Lange’s recollections of how she was taught to take photographs, how she was told to take photographs, which she pushed against. We also see, when you contrast with Lenore Thomas’s photographs, which are very much on the level in every way, you see how those politics are conveyed in those kinds of images.

I spent time thinking about the photographs and thinking about how Lenore Thomas shows us what she thinks and what she believes when she can’t tell us in her archive.

Scott Ferguson

Speaking of form, I am curious, I’ve never written a trade press book. For our listeners.  ,we’re academics, we usually write academic monographs in a scholarly rhetoric or frame. Different fields and subfields have their own customs and standards, but we all write fairly similarly in this mode. A trade press book, however, is for a popular readership.

That mode of address is supposed to not be scholarly, and it’s supposed to be a little looser and warmer and not everything is footnoted. I’m wondering, what was it like composing in that more popular mode? What kind of challenges did you face?

Did you learn lessons about your own voice and its range?

Lauren Arrington

Well, I guess the first thing I’d want to respond to is what I think is a misconception that trade writing is not supposed to be scholarly, but I think that that informs some conceptions about scholarly writing and what it is supposed to be like. I respect writers, it is a hard thing to sit down and write.

No matter what genre you’re writing, props for doing it. The kind of writing that I’m interested in is writing that is enjoyable to read and writing that strives to convey quite complex ideas like we’ve been talking about in terms of the photographic aesthetics, in a way that appeals to readers, in a way that also teaches. It teaches in such a way that we’re communicating as peers to readers, who are picking up books and opening them and wanting to learn. Not feeling like there needs to be a distance in the diction or the structure between the writer and the reader. Rather, we’re meeting on the page in a way that I can bring my expertise and what I’ve learned and communicate it to a reader who maybe never even heard about the subject but is interested, using language that’s easy to understand, that takes its time in order to explain big concepts if we need to talk about big concepts, we’ll usually dwell on that rather than just throwing out a term and expecting immediate recognition and then moving on or digging right down into the deep stuff, but instead, actually slowing down and thinking about what things mean. That’s one of the most enjoyable things to me about the process of writing this book has been learning to slow down and sit with an image,, a painting, a photograph, a person, a place, and write about it in a way that brings it to life to someone who’s never seen it or been there or shows something new about it to someone to whom it’s quite familiar. I was lucky to have benefited from The Robert and Ina Caro Award from Biographers International Organization to support research for this project. Bob Caro is the hero, really, of this kind of writing. He’s the genius behind this kind of biographical writing.

He talks about when he was writing his multi-volume biography of Lyndon Johnson, of going to live in the Hill Country of Texas so that he could understand the landscape and the people and the frames of meaning that Johnson grew up under. I could not go and live in Santa Clara Pueblo for a few years with my family in order to write this book, but I could travel there. I stood in the landscape, right?

I thought about what it means and my whole frames of meaning changed as a result. Writing this book changed me because I thought, when I was sitting in Dublin digging up names of artists I thought were interesting, that nobody had heard of them. Pablita Velarde was one of them and then I got to New Mexico and she was everywhere.

People refer to her by her first name, like, “oh, Pablita,” and her paintings are in the state house and she’s on license plates, she’s everywhere. It’s like, well, how ignorant were we to presume that Pablita Velarde was an unknown? I think that writing a trade book also requires you to think about other experiences and lives removed from your own and what amazing knowledge readers will also be bringing to the subject.

Scott Ferguson

That’s lovely. I want to ask questions about lessons. Lessons for today. Lessons for tomorrow. I will say that we at Money on the Left have been long advocates for a federal job guarantee that would be financed by the federal government and provide living quality work for everyone and anyone who wants it and can contribute to their community and not be threatened by unemployment.

It would include all kinds of benefits along the way. We are certainly advocates for the Green New Deal, which is not on everyone’s lips right now in the middle of an authoritarian takeover of our federal government, but we remain advocates for it. We hold out the dream and the possibility for a publicly led employment society that is financing interesting, wonderful, creative and inspiring labor that would include aesthetic labor. Usually, at least in the context of the history of the United States, the New Deal is, for better and for worse, the model. It’s the template that you have to reckon with.

It’s the precedent that you have to look to and decide what’s worth saving and what’s worth recuperating. I find your book to be really inspiring for that problem, for that project, because it shakes up our frames of reference, to use the term that you’ve been using. It makes the challenge of going back to the New Deal feel fresh again, rather than kind of stale or, just dismissing it as if it was all just white supremacy and paternalism. Or the opposite: that it was socialism in America and we had finally done it. I don’t know who actually believes that. I’m wondering, what are some of the lessons that you’ve taken away or that were maybe tacit or implicit for what this means for a future of politics, of state financing, of the arts?

I will say that, one of the threads that I picked up on, that we talk a lot about when we talk about the politics of the job guarantee, is the way that publicly financed employment, especially guaranteed employment, which we know these projects were not guaranteed at all, but especially guaranteed employment can potentially free up laborers, including artists, to not only experiment, but to extract themselves from abusive situations, whether that’s an abusive partner or it’s a controlling, white patronage class.

That’s one thing, for example, that comes to mind that feels like an important lesson from the stories that you’re telling. What else do we take forward from this past?

Lauren Arrington

I think one of the things that we have to understand, which is very difficult for folks who are steeped in the American psyche, is that these things take time. It takes time to build sustainable infrastructures. That was one of the problems with the New Deal arts projects, that there was this massive expansion and then a contraction and the resentment that came with that, and then a little bit of expansion and then the whole thing was scrubbed, basically, because of a need to invest in the war economy and to pivot the arts to the war economy.

I think one of the issues that we have in the US is the four-year — hopefully, what is still a four-year presidential term — and this false binary of the political landscape being either Republican or Democrat.

The four-year turnover means that when do you have time to actually build a program.  FDR had too many terms, one would argue, and exercised too much presidential power. This is really the problem and not a solution. It’s not really a lesson, Scott. It’s a question of, how do you build a sustainable infrastructure if you need to have a turnover in leadership?

The answer is that you require agencies that are not politicized in order to make these programs happen. That was also one of the issues with the New Deal is that all these agencies were tied so closely to FDR’s presidency that they couldn’t exist without him and Hopkins at the helm.

That leads me to think about the NEH, the National Endowment for the Humanities, the National Endowment for the Arts, and lessons that we can take there about the need to protect these independent agencies from the executive office and the need to preserve them, constitutionally or otherwise, in order to have a solid platform for the long term projects.

I was reading back and as I was finishing the book, the cuts started coming. I was trying to finish it at the end of 2024, and it was a slog. Then the election happened, and the executive orders started coming down, and it just really mobilized me to finish this book quickly because it felt like it had a new object.

There was a new context that I was responding to, and it just so happened to line up, unfortunately. But anyway, what I wanted to say is that the NEH was encouraged by scientists who were depressed and frightened by the possibility of nuclear apocalypse and the belief that in a nuclear age, with the rapidity of scientific evolution and the threat that that brought to our existence. The humanities were crucial to preserving our morality, our ethics, our sense of why it matters, what our value is. I am skeptical about whether 50 years later from the congressional testimony of nuclear scientists advocating for the National Endowment of the Humanities, if scientists and humanists can still find commonality because we have become so siloed and so intent on our own individual projects and our disciplines, but also, as individuals we’ve become so individualistic. Can we see value outside of ourselves that was there at the New Deal?

That was there in the 50s. I have a measure of hope that we can get there again, but it requires us to maybe allow ourselves to experience these apocalyptic moments like we had with the pandemic. A time when suddenly things are stripped back and you realize what matters in your day to day, right?

The people around you, your health, your well-being, your mind, you know? With the constant treadmill of the consumer cycle, the workday, the targets, when do we have time to think about these things? I think there are a few lessons there. One is to take back from 2020 or 2021 and how, a few years ago, our existence was threatened then and the imagination that was required to bring us out of it and how we can recover that and allow that to stay with us. That as soon as we’re comfortable, we don’t go back to business as usual. Maybe we require these outside threats to our humanity in order to prioritize our cultures.

Scott Ferguson

That’s a beautiful way to end our conversation. Thank you so much for coming on Money on the Left and exploring your recent work with us.

Lauren Arrington

I really appreciate it, Scott. Thanks for having me on today.

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