Ministry for the Future with Kim Stanley Robinson

Science fiction writer Kim Stanley Robinson joins Money on the Left to discuss his Modern Monetary Theory-inspired “cli-fi” novel, The Ministry for the Future (2020).

Throughout his distinguished Hugo, Nebula, and Arthur C. Clarke award-decorated career, Robinson has repeatedly offered visions of the future that are grounded in, and speak directly to, urgent present problems. These stories, including and especially his widest-known work in the Mars Trilogy, simultaneously condemn dominant logics and chart paths for the possible redemption of humanity as a terraforming (and terra-destroying) species.

In Ministry for the Future, Robinson explores a more proximate future on Earth, one characterized by massive climate catastrophes, widespread political violence, and economic super depressions. Most critically, the novel tests out a messy, but nevertheless workable way toward collective climate restoration, fashioned by an improbable assemblage of intergovernmental agencies shadowed by clandestine black wings; ecological activists armed with untraceable drone technologies; heroic scientists; environmental preservation groups; and Central Bankers.

Money, too, plays a central role in advancing Ministry’s fraught utopian story of climate restoration and is crucially anchored in an MMT-driven framework for equitable and sustainable political economy. In our conversation, we hear from Robinson about the influence of MMT on his thinking in and beyond his work in Ministry, as well as about how this thinking aligns with and deviates from previous political and literary engagements with utopian literary form.

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

Scott Ferguson: Well, Kim Stanley Robinson, welcome to Money on the Left.

Kim Stanley Robinson: Thank you, Scott, good to be with you. Hi, Billy, hi, Maxx.

Scott Ferguson: It’s so exciting for us to have you here with us. We obviously want to talk about your new novel, The Ministry for the Future. But maybe to get going, you can gloss what the book is about, what the story is more or less trying to wrestle with, and maybe also put it into dialog with some of your previous work? Is this revisiting old problems, whether conceptual or aesthetic? Are you taking on new things in new ways? How would you characterize it? 

Kim Stanley Robinson: Well, Ministry is the end of a six novel sequence for Orbit Books, where I’ve been working with editor, Tim Holman. I think of them as a unit of sorts, although they keep circling around similar questions. As to your topic for Money on the Left, in terms of finance, every time I learn enough to make it through a novel and have a discussion of finance, the very following months I learn new things that revamp everything I had previously thought. New York 2140 was very important for me. It was written maybe in 2015 or 2016. I can’t remember exactly, but it was in a zone where I was learning a lot and I decided it would be fun to try to do the financialization of sea level rise. At that time, I knew some New York day traders. I had met a crowd of people who could give me actual advice or technical help in finance. So for the first time, I felt like I had more of a handle on it and had done a lot of reading. With New York 2140, the whole push is to create, artificially, a crash by way of imitating 2008, but by everybody not paying their bills at once and crashing the private banks, who would go into a liquidity freeze. I was basically replaying 2008 with the idea that the federal government, with a sympathetic head of the Federal Reserve, would nationalize the banks in the way that we nationalized General Motors after 2008 to keep them going. But also they became owners, so that this would be the nationalization that would stick. It would be like, and this is an analogy I only learned later, the way that the British Treasury took over the Bank of England for purposes of fighting World War II and financing it.

Now, the moment I finished New York 2140, I began to learn that that was nearly a meaningless gesture, that nationalizing the private banks is already a done deal if you consider the central banks to be nationalized, or it to be a private-public consortium. I hadn’t fully understood. So, I began to read intensively on central banks. By the time I got to Ministry for the Future, it seemed to me that the key to having a good 21st century and to dodging a massive extinction event and mitigating the worst effects of climate change basically came through this concept of carbon quantitative easing. There would be quantitative easing, but it’s not just money created and given to the banks. It would be targeted in its first iteration into the world as being for good climate work. It is sometimes called a “carbon coin.” We can talk about that. I’m not sure of the necessity of any special designation for the money that gets created if that first spending is [for] decarbonization. I don’t know if it matters what you call it. But that’s how Ministry came about. 

In the larger picture beyond finance, I wanted to try to do everything to describe the next 30 years in a kind of best-case scenario history in which one could still believe. I had a limited case in that [the story] needed to be disorganized looking and chaotic and painful. That’s part of the believability because it seems to me it’s going to be that way. So, that’s how it came about. I got an awful lot of help from other people because I am an English major. I was an English major, but I still am an English major. That’s really my focus and my skill set. I love being an English major, but it means, in other realms, I like doing the thing that you do when you’re writing sentences about topics you don’t fully understand. I just spoke to some science journalists and I realized that that’s a very similar skill set to mine in that you have to be able to craft sentences that are coherent even to people who know their subject well better than you. It’s kind of a tricky skill to have if one can ever have it. 

Scott Ferguson: I like that you put conceptualizing and apprehending ideas in terms of being able to craft sentences about it because I think it’s defamiliarizing. I think if you are a writer, like all of us on this call are, it makes perfect sense because you realize that writing is thinking. But, maybe, if you’re not a writer, that’s a little unsettling to hear, or a strange way of putting it. Now, I was wondering, just to follow up, if you can talk a little bit about some of the formal experimentation in the book? You’re playing with time and space and perspective. At one moment, the voice of the book is a photon. At another moment, it’s a kind of anonymous third person. And at [still] another moment, it’s in the first person. 

Kim Stanley Robinson: Thanks for that. [This] puts me back in a zone where I actually know what I’m talking about: construct[ing] a novel. That actually is not something that is very easy to articulate, but I know I can do it by the fact that I see the book is there. Sometimes, I don’t come to the right form for the content and that is painful, but sometimes I do. In this case, I feel I did. To try to give a global picture and yet still be a novel: that’s a stressor of a double bind in effect. I saw that before in the Mars novels, The Years of Rice and Salt, and 2312, which uses a Dos Passos format from The USA Trilogy. I’ve found forms to be able to tell global stories where you’ve got individual characters. You’ve got the society, and you’ve got the planet all in mutual interactions. This time, I had two main characters only, Frank and Mary, for a pretty long novel in a dynamic between the two of them–a really peculiar friendship based on Stockholm Syndrome and Lima Syndrome. I found that to be transgressive and spooky, even a little scary, but interesting. They made me tell that story.

I had a skeleton that was ordinary characters in dramatized scenes in the way you think of novels being written. Because, most novels are dramatized scenes, include a little bit of the narrator’s summary, especially in the 19th century, then another dramatized scene, and then summarization. So, there is dramatization-summarization as a kind of binary, one or the other. One of the innovations in modernism was to get rid of the narrator and the summarized section and drop into a subjective consciousness that you are in real time. Stream of consciousness is nothing but dramatized scenes. That got kind of reified by English departments in the postwar period to the point where it began to look like so-called “literary fiction,” and definitely put the scare quotes around that one, because this is a very stupid term and designates a false consciousness. Literary fiction is stuck in these dramatized scenes, one after another, until the end of the book. Well, I hate that in multiple ways.

In this book, I did have the normal dramatized scenes. I also had the eyewitness account. I had multiple forms, as you mentioned. But the eyewitness account was the great discovery for me because eyewitness accounts are a genre of their own. I had not quite understood that until I read a whole bunch of collections of them. What they are is a retrospective looking back, usually with an interviewer. Someone is being asked to recall something that they saw that has been retroactively designated to be important enough to get eyewitnesses to tell what they saw. Herodotus does this. In fact, speaking of rhetoric, which we were before, the Anabasis by Xenophon! Oh my God, what a master of rhetoric. He presents the debates as to what they should do in their desperate straits as they cross Turkey with enemy forces, and he wins every debate. He presents all sides. But at the end, they decide that Xenophon is right. They’re going to do what he suggests.

All these eyewitness accounts became the beating heart of this novel as a formal structure. Then, there are riddles. They come from Anglo-Saxon literature. “It” narratives, like [from the perspective of] the carbon atom, come from the 18th century. There was the “it” narrative in England, a very nearly useless genre, that’s why it died. But I resuscitated it. All these things together, I guess, in a jumble, are to give some pleasure to the reader, because this is a book about climate change, heat death, and finance. The pleasure is obvious. So, there’s the game of forms. And with the game of forms, I realized that the eyewitness accounts were maybe as important as the Mary-Frank story. They’re what lifted it for me, personally. The book has had a really wonderful response. I think that the eyewitness accounts from refugees, revolutionaries, common citizens in Hong Kong, all over the world, and then coming back to Zurich for the main story, that’s one of the keys to its success. At least for me, that’s definitely the case. 

William Saas: To wind our way back to finance, we’d like to invite you to revisit with us, comment on, and perhaps expand upon something that you write just about at the midway point through the book. If you’ll permit [me], I’m going to read a snippet here: “What a science. They worked all over the world, including in the Ministry for the Future’s offices, trying to calculate the gains and losses of this event in some way that could be entered into a single balance sheet and defended. But it couldn’t be done, except in ways so filled with assumptions that each estimate was revealed to be an ideological statement of the viewer’s priorities and values. A speculative fiction.” I’m just going to keep it simple, could you say a little bit more about what you mean by this comparison? 

Kim Stanley Robinson: Yes, earlier in my career, I used to routinely bash economics as a kind of power play, fake science like astrology. The court astrologer tells the king that “it’s meant to be,” that “the king is the king.” Economics tells the governing party that it’s meant to be because the economic numbers add up when they’ve all been faked. I was extremely critical. Then, a couple of readers got back to me and said, “You know, you’re a little harsh on economics and it’s too bad you don’t know more about it. It’s not good to be dismissive of something you don’t know enough about to have it properly judged.” I naturally bristled, like “Oh, wait, of course I know!” But I didn’t. I’m a slow thinker, but I have a lot of time to think because I’m just here in my house or in my yard writing. I’m thinking, “Oh my God. You know what? This person is right. These people are right. I don’t know enough to be saying what I’m saying.” So, I embarked on an education. And everybody’s an autodidact, so I’m not embarrassed about that.

I got some help from really good teachers of economics. I began to destrand it all and understand that it is a social science with a quantitative aspect. We need measurement in modern society with the differentiation of labor. With eight billion people, quantification is not a bad thing, measurement is not a bad thing. So, where’s the problem with capitalist economics? It goes right to the root. You need radical, root-like solutions to get down to the root. What I now call axioms, like in Euclid’s geometry, you take as fundamental and then build off of them. We’ve got tons of theories, or let’s say axioms, and then hypotheses, theories, and proofs. They even have proofs. There’s a lot of math involved in Euclidean geometry. But this is the great thing about non-Euclidean geometry. You can say, “Well, parallel lines meet at the horizon of infinity. So, do the math assuming that the parallel lines are going to meet somewhere.” Well, it sounded crazy until relativity came along and suddenly non-Euclidean geometry is describing spacetime better than Euclidean geometry. 

By analogy, not being a mathematician or an economist, I began to realize that it was the axioms that were the problem and that economics is generally capitalist analysis. An economics department at a university is doing a quantitative analysis of capital and the capitalist system without challenging it, without doing the speculation of, or say a projective geometry, where you direct from one plane down to another and things are distorted but the same. That’s projective geometry. There’s no such thing as projective economics. So, then you have to track back historically to political economy. Political economy is not economics per say. All of your universities have departments of economics, but none of them have a department of political economy because that’s a dead letter. That was a 19th century problem that was solved by the ascendancy of capitalism.

With all this, as it became clearer and clearer to me, I began to think the problem is not with economics as a social science and system of measurement and quantification. That’s not where the problem is. It’s a low level of political economy. It’s the assumptions that we make. Should there even be inequality? What if you factored in that the equation has to end in human equality as an axiom? Well, then a political economy would naturally have to change. This was hugely helpful to me. And to tell you the truth, I’m really describing about maybe twenty five years of reading and thinking and writing novels that are only gradually approaching a better sense of the whole problem. But a novel doesn’t necessarily have to be economically astute to succeed as a novel, thank God. 

Maxximilian Seijo: I especially appreciated some of the sections of the novel that talk specifically about what you call these axioms–as someone who did an undergrad in neoclassical economics and was forced to sit through environmental economics classes that specifically thematized these axioms. Like with the discount rate, there was this sense of a diminishing marginal rate of return on the future tense. I appreciate the way you’re thinking about speculation as a literary matter on these terms, too. Just to ask you to spell out thinking quantitative in line with the sort of qualitative ways in which you think about the future in this book, I see such deep resonances in the way that you’re sort of playing in between these spaces a little bit at some level. I was wondering if perhaps you could elaborate on this, perhaps using the discount rate example as a key axiom?

Kim Stanley Robinson: Yeah, thank you for that, Max, because that is a good way to get into it. The discount rate is simply picked out of a hat, but it has enormous consequences. Even your standard economists will admit the higher the discount rate, the less you value the people of the future, the lower the discount rate, which could go right to zero, the more the future generations are treated equally to us in economic calculation. The reason that economics doesn’t have a zero discount rate is that there’s going to be many billions of future humans. So, if their rights to our behavior are the equal to our own, then we should be doing everything for them and nothing for ourselves. So a discount rate gets applied. Famously, Nordhaus won the pseudo Nobel Prize for suggesting a four percent discount rate, which is really way too high if you want to treat the future generations as worthy of our consideration and action in the real world now.

I don’t know how he defended it but I suspect it gets technical in ways that I couldn’t follow. There are many economists that would say a discount rate of zero is perfectly appropriate. There’s also the case that it doesn’t have to be linear forever. I’ve heard it both ways. This is a very interesting economic debate that I can’t enter into. Should the discount rate be zero for the seven generations to come and then rise and get sharper so that you reduce the infinity effect? Or, should the discount rate be kind of high now and bell curve off into zero after seven generations? The seven generations is just a term out of Indian philosophy and ethics, saying that the way to treat the intergenerational issues is to consider the seven generations before and after you as being like sacred ancestors and descendants who have to be treated as if they were your immediate family. That runs it off a couple of hundred years in each direction.

All of these considerations were comprehensible to me, in both the math, which is as simple as can be, and the implications for political behavior and for what sometimes gets called ethics or values, etc. One thing I would do as a device, and this is very much a science fictional writing device, is one character knows. That would be Dick, the economist. One character doesn’t know but needs to know. That would be Mary, the head of an agency who is a bureaucrat but not an economist. So then she’s naively asking questions that would be similar to my own. Then, the character Dick, and I have a friend Dick who did this for me, would answer the questions. Sometimes I would do like you guys and be on Skype sessions taking notes and writing furiously to capture his insights, but also his wit so that I could have a funny exchange. That was another formal innovation. Let’s not dramatize that scene. Let’s turn it into a dialog with just the essence so that in two or three pages you can do it without telling what they had for lunch and where they were sitting and whether it was a sunny or cloudy day and other novelistic things you would do to make it a scene. No, let’s just scooch it to its information. 

Scott Ferguson: That’s great. I have a question that I think follows nicely on what we’ve been talking about. One of the takeaways from the last few minutes of our discussion is that when you are doing economics in the orthodox way and just tracking and buttressing capital, you’re working with axioms that you’ve reified and naturalized. Other kinds of speculative, heterodox approaches to political economy [by contrast] precisely open up those axioms and make them into political variables and dramatic struggles and potentials for imaginative transformation. I’m a visual studies scholar, so I read literature but I’m not an expert in literature. But it seems to me that in the history of modern utopian thinking, or modern utopian literature, one of the key tropes is something that you’re a former teacher Fred Jameson talks about, which is the elimination of money, the escape from money, or creating an enclave or commune away from money. I know that in some of your other books, you’ve experimented with that mode. But you’re not doing so here. I’m wondering how much of a challenge this was? What do you need to push back against in order to construct a novel that has a kind of realist utopian impulse at its heart, but is really pushing against the kind of standard utopian anti-money gesture in so much literature? 

Kim Stanley Robinson: Yeah, that’s a good question. I’m thinking about utopia as typically written as a literary genre, and as well as maybe a strand of political thought. But really when you say utopia, you’re talking about some narratives. Famously, there is the great trench. What that means is, in Moore’s Utopia, they cut a trench on the peninsula so that their utopia became an island. Essentially, what I call it in my own discussions of it is you get a fresh start. It’s also kind of what I’ve called a pocket utopia, a relatively small society where everybody agrees on the rules. This exists as a modeling exercise more than a political project, so that you write a utopian order to say, “Well, if everything were right, then this is how it would work.” But the trench is missing history. How do you get from here to there?

Indeed, the bad sense of utopia, the common connotation of the word being impossible, idealistic, perhaps overrigid, and, in any case, not going to happen, is what utopia kind of means in common language. Well, if you still want to do it, I’ve been interested ever since I finished Specific Age around 1990, and it didn’t have a history of how we got to this better world except for some very weak gestures. My friend, Terry Bissonette, who has written utopian novels of his own, said “Stan, how did they get there?” I said, “Well, I don’t know. Lawyers did it. They made the laws.” He said, “Stan, there’s guns under the table and you need to take that into account.” That was kind of the springboard for the Mars trilogy. So two thousand pages later, I had the story of the bridge from the current economic capitalist disaster to a better society over 200 years of invented historical time. Fine, but it happened on Mars.

In Ministry, I thought, “Well, let’s start now.” And I mean literally now. I wrote it in 2019. I fuzzed the moment of the heat wave and put it in the mid 2020s, because I fuzzed all the dates to give it some imaginative leeway. But effectively, it is starting right now. We’re in neoliberal, late capitalism. We got money and we got eight billion people. I understand this non-money thing. I actually have lived for two months of my life in the same way that Orwell claimed to have lived in an anarchic state for a couple of months in Barcelona. I’ve lived for two and a half months of my life in Antarctica as part of the National Science Foundation and money wasn’t an issue. When you were there, you would go into the cafeteria and there would be food on offer. You would take it and you would eat it. They gave you the clothes, they transported you around, and you were also in housing that was provided. It did feel different. It was quite beautiful. It does give you ideas that the people who talk about, “Couldn’t we just get rid of money,” it’s not as crazy as it first sounds. Because, if you live it, you realize that maybe in some post-scarcity situation where everybody was on the same page it could work. Everybody in Antarctica is very energized and high on life. There’s a high esprit de corps. They know that they’re lucky to be there and they’re happy to be there. Well, that’s not a common state in normal life. So, I don’t want to dismiss the lack of money problem at all or the proposition as such. But it’s not where we’re starting. 

Another economic axiom that is taken for granted in capitalism is “efficiency is good.” In fact, efficiency is seen as synonymous with good. “Oh, that’s very efficient” is like saying, “Oh, that’s very good.” I’ve been proscribed from using this comparison, so you’ll have to censor me if you want to. The Nazi gas chambers were very efficient, but they weren’t good. Again, it’s axiomatic. What is the efficiency aimed at? If you’re optimizing resources to get a certain effect and that’s defined as efficiencies, then there’s good efficiencies and bad efficiencies. Say you could get food, water, shelter, clothing, electricity, and health care for free as something that society provides, like you’re in McMurdo Station, Antarctica. All that would be true. Probably, it’s not efficient because you’re not stressed by money worries. People tend to only eat as much as they need to get to satiety and then they quit eating. It’s not obvious that the restraints of money are what keep people from overindulging. So the efficiency question is messy and an axiomatic verb rather than a noun that needs to be questioned. To get to a true, proper economics, you would have to say efficiency is not necessarily good and then you’d have to interrogate that very closely. 

But in the meantime, to get back to the substance of your question, I needed money because it’s here and I needed it aimed in the right direction. That’s where you get to MMT and carbon quantitative easing and the whole complex of ideas about money. Let me add one last thought, because it’s kind of a new thought that’s just occurred in the last week or so. It’s not in the books. I call myself an American leftist and my books get claimed by people all across the left spectrum, and even in parts of the right that don’t understand who they are. People will say the Mars books are libertarian or they’re liberal or they’re radical or they’re anarchist or their anarcho-syndicalist. I mean, really, everything has been claimed. Communist: I’m often described as communist and, of course, an ecosocialist. What I’m now thinking is these are time horizons. People on the left are always stabbing each other in the back for not being correct in a doctrinaire sense. The notorious infighting on the left covers details of policy, belief, and theory. There are more knives in our back from fellow leftists than from right wingers who just don’t even care about us and don’t engage in that argument and just think that we’re all ludicrous.

So in the famous infighting on the left, which can lead right up to the Spanish Civil War, where the two leftist parties killed each other and then the right trumped them, I’m thinking now what I want to say is that today I’m a member of the Democratic Party trying to get this stimulus bill passed through a recalcitrant Senate. That’s my politics today. Five years from now, I want to be a social Democrat in a system very much like the Scandinavian countries. Ten years from now, I’d like to be in democratic socialism, and it would take huge elements from China of all places, but be democratic and totally cool. Two hundred years from now, I’d like to be an anarchist where power is completely leveled off and horizontalized. Power and wealth would be zero. But it’s a timeline, right? That’s why my novels can be taken as being in agreement with almost any left political view, because I’ve set my novels out at different timelines and I have different characters with different beliefs. In the case of Ministry, it is a novel about the next 30 years. So, money is a big player. 

Scott Ferguson: Yeah, that makes a lot of sense. I guess I’m going to risk complicating, maybe pushing you a little bit on your NSF example. Money is still there. There’s still federal financing that’s providing publicly all the shelter, food, goods, and services. I guess, for us, we’re interested in making money not seem like some kind of neutral or natural or innocent technology yet nevertheless trying to take some of the stigma and stench off of it that we would argue comes from capitalism and orthodox economics, in order to mobilize it and open up our imaginations. I don’t know if you have a response to that. 

Kim Stanley Robinson: No, I see your point. And indeed, Antarctica is a pocket utopia. It’s a bubble in the larger world of capitalism. It’s interesting: you could even imagine that all of NSF, a nonprofit that is funded by the public by way of taxation and allocation of Congress, is a bubble of its own where they are not trying to make a profit but indeed are spending a surplus. Then, there’s also the US armed services. I’ve just been thinking about that recently, talking to people in the armed services about their project of trying to protect America. They too are a gigantic nonprofit and in a bubble of their own that’s outside of capitalist realism. I would agree with you that in a modern technological society where there’s a division of labor and eight billion people, you probably need a medium of exchange and you probably need a storage of value. These are two classical purposes of money. It’s not a huge list, but that’s two of them. And you probably also need something to mark those things. So, my leftist utopian project does not include the elimination of money. I don’t find the whole “money is the root of all evil” argument to be at all meaningful.

I’m interested in this argument that to say there was barter before there was money might be false. Never could you go into a market and say, “I’ll give you my donkey for four onions.” This never worked. This is an argument made famous, I think, by David Graeber. Money actually came about as a way to tax or as a marker. Even writing was just markers on a tablet to show how much you owed so that once you get a differential in society with people doing different things, you need a medium of exchange to mark that you’ve done certain things and then other people have done other things. Then, you get some of what they did and they get some of what you did. And it’s never commensurate. There’s never any physical commensurability between the two. So you have to make up a speculative fiction, which is money itself. “Well, that’s worth ten dollars.” This is, of course, where people instantly jump in and say that’s what the market is for, which gets you into a different part of the argument. I don’t even want to go there because I’ll get confused. 

Scott Ferguson: Yeah, I think we’re on the same page. I will say, just to go on the record, the profit motive is an axiom, right? It is not ontologically wedded to money, to keeping tabs, to measuring, and to planning. On this podcast, we would be all for the radical reduction, if not elimination of the profit motive. 

Kim Stanley Robinson: Well, me too. And this is economics that I found extremely useful. Profit is an index, which is to say, a multiplicity of incommensurate factors that have been crunched by a somewhat ad hoc pseudo mathematical process into a single number by which you can judge it. That’s what an index is in finance. And indeed, like the heat index is the combination of heat and humidity, profit is how much can you claim to have at the end of the cost of making something versus the sale of it to someone else. So, profit is an index. I would claim that (a) it’s a bad goal in itself because it forces you to try to get more out of the system than you’ve really put in. So, it’s a kind of a perpetual Ponzi scheme. But also, (b) it’s never accurate in the first place. The numbers have to be fudged to make any profit work.

Here, I’m just going straight to Marxism in that profit comes out of exploitation of other people and of the environment. That’s what it’s an index of. Now, when in a capitalist economy, you say “Oh, we made a profit of 20 billion dollars last year,” that’s like an index of damage done to people and planet. So bragging about it, “Oh, we made a profit of X last year,” once you flip the valence of how you think about profit into an index of damage done, it becomes quite horrific. Then, you’ve got a gross world product that is seventy five trillion dollars a year approximately. And that’s disregarding the dark pools and the fictional money of financialization. But even in the real economy, is that seventy five trillion dollars of damage taken out or is that just monetary activity? Are they saying they’re seventy five trillion in profit or are they saying they’re seventy five trillion of payments back and forth amongst people with profit as a froth off of that? I don’t even know because, again, GWP is an index as well. 

William Saas: Coming in a slightly different direction and returning to the book, we were talking about rhetoric before so I feel like the inflection of this question might change just a little bit. But a core tension in Ministry for the Future that we’ve detected, and I think we’ve heard you talk about in other contexts, is that between language and rhetoric and violence and coercion. If you don’t mind, I would once again like to read a selection from later in the book that I think gets nicely at this point. Then, I’ll follow up and ask a more direct question after that.

Here it goes: “Were they fools to have tried so hard for words in a world careening toward catastrophe? Were they fools to keep on trying? Words are gossamer in the world of granite. There weren’t even any mechanisms of enforcement of these so carefully worded injunctions. They were notional only. The international order of governance being a matter of nations volunteering to do things. And then when they didn’t do them, ignoring the existence of their own promises, there was no judge, no sheriff, no jail, no sanctions at all. But what else did they have? The world runs by laws and treaties, or so it sometimes seems. Someone can hope. The granite of the careening world held in gossamer nets. And if one were to argue that the world actually runs by way of guns in your face, as Mao so trenchantly pointed out, still, the guns often get aimed by way of laws and treaties. If you give up on sentences, you end up in a world of gangsters and thieves and naked force, hauled into the street at night to be clubbed or shot or jailed. So the people who fought for sentences, for the precise wording to be included in treaties, were doing the best they could think of to avoid that world of bear force and murder in the night. They were doing the best with what they had.”

Just real quickly, I like the strong whiff of using the available means of persuasion in any given situation–Aristotle there. But shortly after these paragraphs we learn that these people are fighting for sentences. The people develop a metaphor that becomes critical to the remainder of the story, the metaphor of a developing nation of future unborn generations across species. Being a developing nation that deserves protections and that that metaphor is an important component of the case for funding the Ministry for the Future. Then, of course, the Ministry for the Future, led by Mary Murphy, plays a critical role in this sort of more optimal outcome that the book ends up describing at the end. That’s a bit of wind up to ask maybe a cheeky question. But would you say, in terms of your own perspective, that you’re more Mary Murphy than Mao when it comes to these questions? And if so, today, can you point to any examples or give us any kind of indication of where you find hope and inspiration in terms of your faith in rhetoric? 

Kim Stanley Robinson: Well, I think both Mary and Mao are right in their different perspectives on that issue. So it’s both, and not an either or situation. That description of people came from me talking to the people who wrote the Paris Agreement that got signed by all the nations in 2015. It’s very specific to that project. They fought like crazy over every comma in that document. One cadre of thinkers and writers of the Paris Agreement, because it’s a group document like the American Constitution or any other group treaty document, believed it was crucial to include climate equity. So, they got that included to the point where it’s fundamental to the Paris Agreement that everybody has shared but differentiated responsibilities in the nation-state system. They even made a Schedule A and Schedule B. It’s easy to read the Paris Agreement. It’s only about 18 pages long. I recommend it to everybody. It’s extremely impressive and thought-provoking. The developed nations signed on knowing that they were signing on for more financial responsibilities than the developing nations. Again, there is even a list of Schedule A and Schedule B, or which kind of nation you are. 

It’s so interesting that people fought for that and all of the nations signed on to it. I still think that the Paris Agreement was almost miraculous, almost like something out of my novels I wouldn’t have dared to have written because it would look too utopian and facile as a solution. And yet, it’s real. I love it dearly as validation that the world is onto this problem and it’s not any one group’s obsession. It has become the world’s problem and acknowledged by all. So, you gotta love it. Every word in common matters and got fought over. I was told stories of people on subway rides going to and from these meetings to write the Paris Agreement. They’re talking about their ulcers and their headaches and their divorces and their bankruptcies. They really went out there to get the document that they thought would work best.

Against that, you have guns in your face. But most of the time, you have a state monopoly on violence. You have rule of law. Of course, many people would immediately bristle a state monopoly on violence. That’s why the state is so evil, et cetera. But it’s like Winston Churchill’s comment about democracy. If you don’t have a state monopoly on violence and you have a general unleashing of violence on the world, you’re definitely screwed. In the nation state system, a state monopoly on violence and rule of law, these are the kind of weak reeds that we’re holding against murder in the night and gangsters taking over. My poor genre, science fiction, and it’s dystopian fantasies, that if only we had a breakdown and got back to gangsterism, then everything would be better. Well, this is just ludicrous to me. With all of these things combined, we are in hegemony. The Gramscian notion of hegemony is crucial here. We don’t have to have people pointing guns at us to wear our masks. But we’re in a hegemonic system where everybody agrees to do it because they think that rule of law is justifiable enough to hold to it. And the guns are notional, or they’re in reserve. They could be brought out. The National Guard could beat on you if you protested or if you broke into the Capitol, presumably. But in the meantime, it’s like money itself. It holds together in a kind of shared social fantasy that we all agreed to abide by.

In that very fragile, hallucinatory state, societies in rule of law and in the Paris Agreement say, “Well, we’re going to decarbonize faster than capitalism would usually allow in the turn of technologies and always going towards more efficiency, which is seen as more profitable. We’d decarbonize in time to avoid torching the planet. Therefore, we’re all going to agree to avoid torching the planet by making this infrastructure change faster than usual.” Lots of parts are left out. How do we pay for it? What happens if you don’t comply? We’re going to find these things out. But meanwhile, what a mighty effort by a bunch of international diplomat class people–technocrats, bureaucrats, and diplomats. The group of people who put this thing together were intellectuals working for their nation states but they were doing so as if they were cosmopolitan internationalists, as if they were inventing an H.G. Wells style one world government thing that would sort of save the day by everybody agreeing. I find it quite marvelous and inspiring. 

Maxximilian Seijo: It’s interesting, I think your book is operating within this commitment to international law in this way that you’ve described with the Paris Agreement that it could be worse, like naming how perhaps it pushes against some more orthodox or established assumptions on this question. In the way at least we came to reading your book, it seemed that this commitment to law as a constitutive domain of social imagination and then, as I think we were just discussing, a discursive struggle, is paramount to the story of speculation that you’re trying to tell. On our reading, it seems to push back against, I think as you have evoked, conservative obsessions with the rule of law as well as liberal fantasies of legal formalism that perhaps could be said to naturalize markets. Then, I think crucially, too, certain tendencies even on the left, in some spaces, dismiss the law as a mere superstructure. I know you mentioned Gramsci, so I think that sort of covers certain aspects of that. Taking this global sense of law and the way that the global internationalized dependence, or the shared fate of the book and how it’s situated around the climate crisis, could you perhaps reflect on the way that these tensions play themselves out in the book and then in your thinking? 

Kim Stanley Robinson: Yeah, sure. There’s a critique of the Paris Agreement that says, “Well, it just doesn’t go far enough.” The carbon reductions that everybody agreed to in 2015 are inadequate to save us. Indeed, it’s been calculated that they only go about half as far as what is truly needed. And I would argue that that’s true. It doesn’t matter that that was the best deal they could get at that time. Then, as people see the need, the promises will ratchet up and that process has already begun. Of course, there are counterexamples. There’s the Trump US, [which allegedly pulled out of the Paris Agreement]. There is, [however], no mechanism to leave the Paris Agreement. That was just his usual bullshit. It’s good that we’ve claimed that we’re back; but indeed, we never left. So, there’s all sorts of possibilities for backsliding. But what I’m saying is it’s a built platform to have this discussion. Before that, this was seen as a zero-sum game. If my nation wins, your nation loses, or, especially, if my nation loses, then your nation wins. And there’s a strange sense in which the nation- states, especially the big petro states like Russia, Saudi Arabia, China, United States, Canada, Australia, Brazil, Mexico, Venezuela, Iran, and Indonesia, are all like terrorists with an explosive vest around their waist. They’re all in the same room and they’ve all got buttons with which they can blow up the room and everybody else in it. Well, it’s kind of mutual assured destruction. They got two different kinds of destruction. 

One, you could blow up the world’s atmosphere by burning those fossil fuels in a race to destruction, trying to get the last trillion dollars out of it. I calculate the value of the fossil fuels that we need to leave in the ground as 1,600 trillion dollars. This is entirely notional. I just took the price of oil as being halfway between the price of coal and natural gas at the time I did this calculation. I got my wife to check the figures because she’s a mathematician and I’m not. It blew my mind how big the number was. But, on the other hand, if you’ve got an economy of one hundred trillion dollars per year, then sixteen hundred is only sixteen years of economic activity. It’s not that mind boggling in the world scale. So, I became comforted that that’s the real price that has to be left in the ground. But nation-states have already claimed this. Private companies have it on the books. Nation states have it as resources that are financial resources. The companies especially have already lent money [based on] it. They’ve used it as collateral. The whole thing is a house of cards in the usual financialization way. They’ve used this fossil fuel valuation as collateral for further loans and speculations. The whole thing is sitting on money that will never be made in the first place–not by burning fossil carbon, not if we want to stay alive.

So the bizarreness of the situation has been brought home to me that money comes into play here as a social fiction, or let’s just call it a real thing. But these nation states need to know that they’re going to get paid, which is only to say that the money still stays valid without, like Venezuela has got one million percent inflation right now, blowing up society’s sense of money. That this money is going to be produced even with the fossil fuels staying in the ground. In a situation like that, I guess I would say the usual left wing knee jerk reaction is like, “Oh, well, rule of law, big deal.” “Law always comes last,” someone told me. First, you have praxis. You have the guns in your face. Then, you pass some laws to justify the power system that exists. Well, I’m not sure I agree with that. I actually think rule of law is a powerful thing that everyone buys into because they see that the alternative would be much worse, that you get to a war of all against all. 

Maxximilian Seijo: It’s so interesting, when you were answering that question, it sort of popped into my head this sense of the division of labor that you discussed before. Dare I speculate with an analog, it seems like the way you were discussing this necessity of a medium of exchange and payment maps interestingly onto this necessity for an international legal medium of dialog and creation when it comes to these treaties and other things, given the fractal nature of the division of interest and labor needed to go into decarbonization. I’m not sure that’s much of a question as perhaps more building onto this matrix of analogies and metaphors and that you’re spelling out in the book. 

Kim Stanley Robinson: Well, one thing that might lead us to your comment is MMT’s notion of the job guarantee. The government, and therefore the money maker, functions as the employer of last resort, such that you have full employment. It kills wage pressure. Whatever the government decides to be the minimum income that they give to the entry worker will become immediately the floor. If that were a living wage, then, well, you would be strangely close to what one might think a communist economy might run like. In other words, it would not be the market establishing the wage levels, but in fact, the social compact of government itself saying this is how much people get paid as a minimum and no lower. It would need to be adequate. At that point, my notion in terms of wage parity is, to keep it simple, one to ten.

Recall that it was one to three in the beginning days of Chinese communism and then it quickly changed to one to nine. In the US Navy, it’s one to eight. So we’re talking the poorest to the richest in an income system. One to ten is easy to keep in mind. If one is adequacy, as I say in my novel, then ten times adequacy is luxury beyond need. But it’s an easy number to keep in mind and it keeps ambitious people from going nuts. Just very roughly, for the sake of the numbers, you might as well say one hundred thousand dollars a year is the floor, as it’s so simple. Indeed, a lot of us are living on one hundred thousand dollars, or a little bit less or a little bit more. It’s kind of a middle class. It’s actually kind of high. But say it’s what you need if you are going to really have security. Call that adequacy. Then, you’ve got a million. You can’t make more than a million a year. And why would you need or want to?

The one to ten ratio sets a kind of boundary and I explore these ideas all the way back to Pacific Edge, which I wrote in 1990. There, I think it was ten thousand dollars to one hundred thousand dollars, so it’s like a ten times inflation rate in 30 years. That’s probably pretty accurate. In any case, you see where I’m going with this, the idea that the division of labor is such that many of our essential workers, and we found out they were essential in the pandemic, are getting paid shit–not enough to live on. It’s what Graeber called “bullshit jobs.” Well, this is disgraceful and it’s an immediate sign that the society is malformed and has a touch of evil. What I like about MMT is it doesn’t just insist that we can make more money and then the printer goes brrr and you solve all our problems. The job guarantee is a double pillar in MMT as I understand it. It is just as important as the other parts. That’s what makes it, to me, a game changer, or something to back with enthusiasm. It’s no longer monetary theory; it’s political economy. And the fact that it was capitalized in the textbook that I read, the initials you use so commonly, it was always just JG, JG. What’s this JG, job guarantee? Well, it’s great to see it. 

Scott Ferguson: Yeah, and we sometimes will call it, certainly political economy, but also a monetary theory of production. Production is constitutive as much as talking about debt and credit and the structure of what we classically think of as monetary relations. No, it’s how are we producing our world together? That’s what matters. The question is how is money orchestrating that production, that participation, that distribution, etc.

Kim Stanley Robinson: Yeah, and also what the job guarantee does is put paid to the idea that there’s not going to be enough jobs. This is a bad science fiction story that automation is going to get rid of jobs. I don’t know what people think automation is, but they maybe have never gardened or something. The things that automation can’t do, and I proposed this once in a conversation with Danny Kahneman, the great behavioral psychologist from Israel, and he was clueless. He thought that automation is going to solve our problems. He says, “Oh, there’s not enough plumbing jobs to keep people occupied in work that couldn’t be automated.” This is totally wrong. I don’t know what he’s thinking. The pseudo Nobel that they give themselves for economics. This is not a real Nobel Prize. Why [do] they keep giving these awards to themselves when they’re actually ignorant of the world outside of economics, of real work and real machinery? It’s kind of astonishing how siloed they are and even bunkered into a world of abstractions where they are not getting it. 

In fact, landscape restoration, saving the biosphere, decarbonizing fast enough, and even growing our food, these are not automatable. The jobs you can automate are precisely the jobs that human beings ought not to be doing in the first place because they’re too repetitive and boring. Of course, you want an automated car manufacturer and then there will be lots of humans working on the machines, the robots, that do the automation. There’s more work to be done than there are humans on the planet. It’s an easy case to make. At that point, the corollary to that is every person on the planet is necessary to civilization working and should be living at adequacy and should not be in fear. This is the leftist program. To see it spelled out as you have been describing as MMT, as an economic system rather than just a moral position, is a beautiful thing. I probably scrambled around hunting for such a thing and getting really mad at economics as a discipline for maybe 20 years before MMT kind of popped up.

Scott Ferguson: Us too.

Kim Stanley Robinson: Good! Well, I’m not surprised, because, where was it? Actually, when I say “where was it,” it’s important to point out and to be fair, the co-op movement within capitalism, cooperatives and the co-op principles which you can find on Wikipedia, if they were enacted, were an early gesture towards an economics of justice. And [they are] not to be pooh-poohed at all because it’s just that they haven’t gotten much traction in the larger political economy of capitalism. 

William Saas: MMT seems like it’s had a profound effect on your thinking, and it certainly plays a profound, critical role among several kinds of phenomena or practices or new ideas in Ministry for the Future. We’ve been talking about it a bit. I would like to hear a little bit more about your sort of first encounters with MMT. After looking for 20 years, you find it. Where did you find it? How did you receive it initially? And where are you at with it today? 

Kim Stanley Robinson: Yeah, I can’t remember when I first ran into it. It was recent. I would say that New York 2140 is unaware of it, and I was writing that in 2015 or so. So that just means that I’m flubbing around trying to cobble together these novels and not an organized thinker or researcher. I have no help in that regard and I don’t want any help in that regard. So, when it came in, when I first found out about it, it must’ve been in 2018 or 2019. Even when I was writing Red Moon, which was very much an attempt to understand Chinese political economy, I don’t think I was becoming aware of it, but it was irrelevant to the attempt to describe China, which I would say is an impossible attempt for outsiders and insiders. That is very much of an improvisation, the Chinese political economy. I’m super interested, but I no longer feel I can comprehend it very well. I gave it a try and it was fun, interesting, but ultimately, I had to crawl away from that. So, it has to be maybe 2018 or 2019 where I really became aware enough to start reading and start researching.

At first, I thought it was simply Keynesianism. It was just rebranded Keynesianism, which, there’s a lot of truth in that, but it’s not the whole story. MMT is like Keynes. They say, “Look, you can make money. The government can make it and aim it.” But it goes beyond Keynesianism in that Keynes would insist that when times were flush, when the economy was going well, then you needed to restock government by way of taxes and make sure that you had enough of a surplus so that the next time you needed money you would have it. It’s like you were talking about at the beginning: X amount of dollars that you need to bank up when you can. People have taught me that, in fact, Keynesianism was never really applied. That even in the flush times, they weren’t bothering to restock the coffers of the government and it didn’t crash the money. One of the reasons why MMT probably will work is because Keynesianism worked without the opposite side of the output-input depression flush times scenario.

But then the other thing I think that MMT has added is precisely this job guarantee that we’re talking about. And to give Keynes credit, he was imagining that, of course, you would employ people. Government would spend that money by employing people. It just wasn’t spelled out as a guarantee. He wanted capitalism to work. He realized it, I think, from being really realistic and being good at praxis, in that his thoughts became government policies. How did he do that? He tried to craft them to fit within preconceived notions of what’s possible. And people were desperate enough to say, “Well, we don’t have any ideas, let’s try Keynes’ idea.” So, he was a truly great economist. But MMT is an advance into trying to deal with our modern era and it took me a while to gather that. 

William Saas: Really quickly on that, one of Keynes’ less successful proposals or policies, was the Bancor, or a supranational currency. I wonder if you’ve thought of that as you were devising the carbon coin or Carboni in Ministry for the Future

Kim Stanley Robinson: Well, I sure did. First, I read a paper by Delton Chen that’s online. It was about carbon quantitative easing and the creation of, for one ton of carbon saved, you get one coin. Then, it is backed by the central banks and long term bonds and tradable on the market with ordinary currencies. You just let it float and make sure it doesn’t get speculated out of existence and defend it. That was also stimulative. Then, I began to read more. Eventually, by trying to understand Keynes better and just reading more about his history as an economist and as a political actor, I ran into the Bancor and it made me laugh. This was a Bretton Woods proposal that failed because the Americans didn’t want it. And it was really more about trade surpluses. It was an attempt to help the war-shattered countries and an attempt to keep America from eating up the rest of the world, while it had this temporary advantage of being the only non-destroyed superpower. It was the American representatives that said “absolutely no” to that. So, it got tossed aside.

And indeed, you have to go through G.A.T.T. [General Agreement on Tariffs and Trade] and then the International Monetary Fund to get to the idea of an international bank that would help the poor countries out. But this was always an imperial project for the American dollar. Enormous amounts of harm had been done in the world by the World Bank and the International Monetary Fund in the service of American dominated capitalism. It’s not been a good thing. Now, the way Keynes had conceived of the bank, or if you were poor and you had a trade deficit, you would get some money out of this international bank to float you a little. It was sort of like his stimulative spending within nation states. But he [held] the opposite, too: if you were making too much money in a trade surplus, you would pay a surcharge and even have it taken away and given to the international bank. This is where the American Secretary of Treasury just freaked out and said, “You’ve got to be kidding me. Why would an empire give away its money to its poor little subjects? I mean, this is ridiculous.” So, they shot that down.

Now, the Carboni is different because we’re all in the same boat. As I said, we’re all in a room with explosive vests around our waists. Although, the American financial empire is still thriving, as I understand it, such that even the so-called Chinese challenge is in true financial/monetary/capital terms, rather small. But they have a lot of people. And they have the productive capacity that they’ve become the working class for the world on purpose. This is differential currency rates. You can pay them 10 cents an hour where you’d have to pay an American ten dollars an hour. So, they’ve grabbed that on purpose and are very canny financial actors in the world. But the US dollar and US capital still are a gigantic, dominant force. That means that if the US were to get smart, do smart things with MMT–with Bernie Sanders, with the Paris Agreement–taking our role and leading the way–this is like a big “if”–if America were to be smart, the world would be in better shape. 

William Saas: I should say that, when we were talking, I remember the Bancor was actually covered in Ministry for the Future, so thank you for not pointing that out. But yeah, it’s definitely there. 

Kim Stanley Robinson: Well, I felt that, in Ministry for the Future, one of the games I could play was just to do the expository dump that I’ve become famous for and that I had already become notorious for killing people with exposition and with, what in science fiction gets called, “info dumps,” because there is a crowd of people my age who like to think that they were smart and cynical about knowing how fiction worked. They were naive and ignorant and their ugly names have stuck. I’m the great info dumper.  I decided in Ministry I was going to dump right on their carpet, so they could not clean their carpet. 

Maxximilian Seijo: We’re going to start probably wrapping up here, so we figured we’d note, since writing your book, we’ve experienced a number of climate and social and health disasters. From COVID-19, to the California wildfires that have become a sort of yearly habit, to even just recently with the Texas weather-related power and water crises, we were wondering how these events have impacted your thinking around the larger climate crisis? Then, relatedly, given any of these problems, or renewed foregrounding of these sorts of crises, have you been taking them on in your current or future works? 

Kim Stanley Robinson: Well, I think that climate change is now generally regarded by a large percentage of the public worldwide as real and a problem. And the human propensity for saying, “it can’t happen to me,” is a great cognitive bias so that you can go on with some courage even when people are falling around you left and right. It’s an old cognitive bias. It doesn’t work anymore for climate change in a way that it used to because millions of people have been hammered one way or another. Fires, floods, gigantic storms, and now the big freeze, those things are going to keep happening. Everybody’s aware of it. Everybody’s thinking, “Alright, I as an individual, I’m going to not have electricity. I’m going to freeze. I’m going to starve. I can’t solve this individually.” This is, I would bet, the rational response of a big swath of people. Then it’s like, “Oh my God, does that mean I have to trust the society? Does that mean I have to trust politicians? Does that mean that my family and my children are going to have to rely on the social compact working this out? Dammit.” The truth of that is not a happy truth. Maybe, not for any of us, but especially for people who thought that they had individual agency as a creature on this planet. That was always wrong. But now, it’s become so wrong. What I think, though, is that that and the pandemic, where everybody was scared at once that they might just die in the next month for no good reason and in a way that medicine couldn’t stop, that was a little electric shock. 

It’s like everybody has stuck their finger in the wall socket and gotten a shock. And some people just get more rigid and hunched down and go, “I don’t care. I’m going to live like it’s 1995 until I die. Hopefully I’ll die soon.” This is the subconscious thinking of resistance. But a lot of people are saying, “Dammit, we actually have to have a functioning government. We have to have the social compact work and solve this problem because it’s bigger than me.” Well, it’s a moment of opportunity. I read something from Milton Friedman. He said, “You know, politicians don’t have any ideas. And so, when they come to a crisis, they’re going to look around for ideas. So, we just lay the ideas on the floor underneath them”. The moment that stagflation came, which is a minor problem but it freaked everybody out. Keynesianism isn’t working. And so, in the Reagan-Thatcher moment, they’re looking around for ideas. “OK, we’ll use this free market idea. The market solves everything. It’s like God. What a good idea. It solves everything.” And politicians are like “OK, great. I believe it. It validates my own sense of individual liberty, blah, blah, blah.” It’s got an ideological construct behind it. It’s got a set of laws that can be enacted that institute it. And we’ve had a 40 year experience of it, like an experiment in social engineering run on the whole world. And it’s a mess and it doesn’t work. 

Now what I’m thinking is, for groups like yours, like everybody working on this and MMT, to put those ideas out and around for when a moment comes. We’ve got a new administration. They’re looking around for ideas. Boy, we’ve got a crisis–a climate crisis, a jobs crisis. People are angry. There’s a precariat. We claim to represent the people as the Democratic Party. We’ve been doing a crap job. We better do better or else we’re going to have another maniac come in. So, where are our ideas? That’s where these new ideas can be picked up. Let’s try it. And it doesn’t have to be reified into a Green New Deal. You can say, “Oh, Green New Deal, bridge too far.” Then, everything that’s in the Green New Deal, you could just pass as individual legislation. It wouldn’t be that different from the original New Deal. I’m seeing a moment of opportunity, a kind of tipping point into some kind of new political economy that actually copes. Obviously, that’ll be a wicked struggle. But it’s good to talk it out. It’s good to have the tools in hand and have canny people. Canny, young intellectuals like Margaret Mead are the people who change the world. Nobody else changes the world. I’m not sure that’s true, but you might as well act as if it were true. 

Scott Ferguson: Well, that was beautifully put. I think with that, we’re going to thank you, Kim Stanley Robinson, for joining us on Money on the Left. This has been an incredible conversation. 

Kim Stanley Robinson: Well, thank you, guys. I love it that you’re working on this stuff. I’m just coming to an awareness that podcasts are a real thing and that they’re pretty great. This is all new to me. But I’m happy to be part of it. So thanks for having me on. Thanks, Billy and Scott and Max. Yeah, let’s gather in a few years and see how things have gone.

William Saas: Sounds great. 

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

Heterodox Properties with Lua Kamal Yuille

Money on the Left is joined by Dr. Lua Kamal Yuille to discuss heterodox economics, property law & the politics of vulnerability.  Dr. Yuille is professor of law and affiliated professor of Latin American and Caribbean Studies at the University of Kansas. Her work, which spans property theory, heterodox economics, business law, critical pedagogy, and group identity–truly puts the “inter” in interdisciplinary. We chat with Yuille about her path from law to heterodox economics, and, more specifically, about how Modern Monetary Theory has variously shaped and affirmed her critical perspective toward property law. We also to talk about her provocative work on “gangs as para-corporate entities.” These collectives, on her reading, perform necessary provisioning labor in reaction to racist and classist government policies that exclude significant swathes of the population from basic rights and protections. Other topics discussed are Yuille’s engagements with Martha Fineman’s “vulnerability theory,” as well as Yuille’s role as faculty senate president at the University of Kansas at a time when tenure and academic freedom are under serious threat in that state.

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

William Saas: Lua Yuille, welcome to Money on the Left.

Lua Yuille: Thanks for having me.

William Saas: We’re stoked to finally have you on the show. To get us started, can you tell our listeners a little bit about your personal and professional background?

Lua Yuille: Oh my goodness, that’s a big one. Hopefully not because I’m super old. I wear a lot of hats. I am a law professor at one part of the day, and an economics student at another part of the day. I like to consider myself a praxivist all day long by working out in the community. It all, I guess, began in a classroom. I spent time as a school teacher. Then, I was a big corporate lawyer. Or I was a big firm corporate lawyer. I don’t know if I was big. I did socioeconomic development work. Somewhere in there, I have a personal life as a hopefully interesting person. Those are a few of the things that I tried to do.

Scott Ferguson: In your work, you focus on, obviously, a few things, but what seems central to us is your focus on property and property law. Can you talk a little bit about how you came to property as a central question?

Lua Yuille: Most people think of property as stuff, right? They’re like, property is your house, property is your car, property is your clothes–property is stuff. I had an epiphany because, even though I went to law school and they taught me that it wasn’t stuff, I still walked through the world thinking that, as far as it mattered for me, property was stuff. I didn’t need to know much more about it. And in late 2007–it’s weird to talk about 2007 and that world crumbling around us, because that crumble was very different from the current crumble. The figurative world has lots of layers, because it can just crumble indefinitely. But as the world was crumbling around me, I realized that property as stuff wasn’t useful. That is not what mattered. Actually, property was power. Property is how we assign power over resources that are valued, whether that be stuff like land, and land is obviously historically the big one, or money, which is the big one today. We use these rules known as property to assign power. The moment that I realized property is not stuff, property is power, it became infinitely more important. I realized that is the conversation that I want to be having.

Maxximilian Seijo: In this vein, then, much of your work on property revolves around the way that law, this form of power, mediates racism and perpetuates racial injustice. Could you characterize this work for those unfamiliar with it as it relates to your various projects?

Lua Yuille: So if I take the perspective that property assigns power, and that has to do with sort of every facet of society. This is what gave me my epiphany in 2007. I was actually watching this huge bank fail. Banks are the place that people understand as being the repository of all this money and that means the repository of all this power. I saw all these folks in that space. The bank was failing because it was 2007. And I saw them be shaken to the ground, in terms of “who am I,” even though this was a bunch of rich old white guys who have failed up. I haven’t done the project of actually finding where they failed up. But I could probably list, if I did that, way better jobs that they have today than they had then. Nonetheless, they were shaken to the core because their source of making money, and the way they had gone about making money, was disappearing and going away.

I sat there as the only black person in the space, as one of the few women in the space, and I was like, this property stuff is about power. And power does a lot of work. One of the things that it does is situate you in society. Property then becomes this really easy way to create hierarchies. One of the most salient hierarchies, though, that no one wants to talk about in any meaningful, productive, and revolutionary way, is, of course, race. And so, from the history of not even being able to be a part of a conversation about power, when black people were the objects of property and not the subjects of that legal regime, to today, when the very nature of you owning the same stuff as somebody else doesn’t give you the same access and power as a white person owning that stuff, because, again, property is not about that. That’s really the conversation that I try to have in all of my work, whether that work is directly having a conversation about the racialized and identity implications of property, or if I’m talking about how corporations work. Because corporations have access to this institution of property in a way that looks a lot different than an individual. They get a set of preferences and that’s all about, again, ranking and creating hierarchies of power. It’s not an accident that, if we were to race and gender the corporation, the corporation’s experience of property looks a lot more like the white man’s experience of property than it does any other group.

William Saas: You mentioned at the beginning of our conversation that you spend part of your day as a law professor and part of your day as an economics student. You decided a while back to pursue a PhD in heterodox economics at University of Missouri, Kansas City, long the beating heart of Modern Monetary Theory, or MMT. Could you tell us a little bit about how you got there and how MMT’s insights have informed your legal work?

Lua Yuille: I didn’t go to UMKC knowing anything about MMT. I didn’t go to have an MMT conversation. I went for three reasons. Number one: I was talking about property as power. Interestingly, or maybe surprisingly enough in a legal space, the people who talk about property have long abandoned economics. And they’ve abandoned economics because our area has been wholly colonized by neoclassical and neoliberal approaches. But I felt the power conversation was in economics. So I started putting myself in these economic spaces. And nobody was talking about the stuff that I felt needed to be talked about. Everything they said sounded like fiction, and I am all about fiction, but I was not actually trying to be engaged in fiction. I was interested in actual reality. So I would sit there really frustrated.

One year, a law and economics conference came to Lawrence, Kansas. It was the same old story until a gentleman by the name of Bill Black showed up. This is a very traditional economics conference so people are in their best business casual attire, and there are even some pretentious folks in suits. Bill Black comes and he’s wearing like dodgy old jeans and an old shirt that says UMKC. He gets up to speak and is his normal firebrand self. Whatever he’s talking about, I’m like, “I like this rabble-rouser.” What’s this rabble-rouser talking about and telling all of these people that their classical economics fidelity is short sighted and narrow minded? I’m like, “Ooh, I really like him.” Then, there was a woman. She came up and talked about black banks and bankruptcy. And everyone is like, you don’t know what you’re talking about, get off the stage. They didn’t actually say that, but you can see their eyes glazing over. Her name is Pamela Foohey. The people who came and were like, “Actually, that sounds really compelling,” are me and Bill Black. Then, we were like a little team of three people.

Bill Black reveals that UMKC, which he has emblazoned on his shirt, actually has a heterodox economics department and that he teaches there. It really was a catalyst for me to revisit the work of somebody else. So MMT is still not there yet. It was the work of Fred Lee. In always being frustrated by what I was hearing in economics, and I had been doing really bad and not academically sanctioned searches on the Internet of like, “who and where can I talk about actual reality,” I found Fred Lee’s work? He was at UMKC. Bill Black is at this conference. I was like, “Wait, there’s like a law connection?” And so, those two people, one in their work, one in their absolute, resolute, “I’m gonna walk into this space and claim it,” gave me the sort of impetus to say it doesn’t matter that I am a pre-tenure faculty at my institution, which told me I should probably not go back to school while I was not yet tenured and at all, because they gave me a job.

I already had a terminal degree in my field. I very quietly started, and was like, “I want to be able to do what Bill Black does,” which is, walk in the room and occupy it, not just by my personality, but with the credentials. Paolo Freire is not a critical race theorist, but a critical pedagogue, and a lot of critical race theorists always talked about needing to not just be a master of the critique and methodology that they were promoting, but also to be a master of what you were critiquing and be able to wield that fully. And so, I said, “Okay, I want to get this credential.” And what better way to get the credential than actually be carefully trained in what I want to think about. Then, I showed up at UMKC and they were like, “Also, did you hear this story about money? I was like, “You had me at money. Let’s chat. What do you have to say?” And then they’re like, “Did you know…?” And I was like, “I didn’t but now I do and I like this.” And it has been like walking the path together, I guess, ever since.

Maxximilian Seijo: It’s interesting pivoting off from that point. Obviously, we’re sort of an MMT informed podcast. But I think it’s also important to offer the opportunity to extend and perhaps complicate some of what MMT has to say. And so, we wanted to ask, if you were perhaps speaking to an audience of MMT ears, what would you challenge and complicate about the framework, in addition, of course, to what you already suggested you’re affirming?

Lua Yuille: I don’t know if this is good or bad, but in my first semester while I was getting exposed to MMT, I had a set of questions and critiques. They remain, but I don’t know if it’s good or bad because I think I’ve seen movement. And it could be good or bad because it’s maybe not moving as fast as I would like to see it. I come at things from a question about and an engagement with the function of power, and this seems like a tool of the powerful, right? When you talk about, as MMT does, a set of reflections grounded on monetary sovereignty, you start with, “If you have power, then you can do what you want with it.” People hate when I use this word problematize, because it sounds so hoity toity, but it doesn’t engage power as a problem, it doesn’t engage absolute power as a problem, as a danger historically. It only looks at the potential of power. That becomes really important when my interest has always been on subaltern spaces and outside populations, and not the Americas and European Unions of the world.

When I started having these conversations, there was precious little view of how we should have these MMT conversations, and what does Modern Monetary Theory mean for the developing world? Or what are you supposed to do with these great insights if your country isn’t a monetary sovereign? That is even more frustrating and problematic when the voices that are telling you these things are overwhelmingly white, and notwithstanding the very huge female luminaries in the MMT space, they’re really male. I just said you’re supposed to be a master of what you critique. The women in the space really mastered the dominant way of engaging. And so, it becomes a space that feels immediately exclusionary. People walk in and you say, “Oh, this is like dude-bro-central.” I’m not about that life. That has been an ongoing question that I have. How do we make these insights, which are insights that actually should be more interesting to people from historically marginalized groups than they should be to white guys who fail up, but I don’t think that has translated. I think that is a real challenge, both in presentation and a challenge of sometimes the utopian flavor of how we talk about things. Because, again, if you go into places where there’s a lot of black people, power has never been our friend. Power has never worked for us. So when you tell us all about the possibility of power, I’m not necessarily sure that’s making me excited. I think that those are the challenges that I had at that time. I was in a class, I’ll tell you, with Stephanie Kelton and Scott Fullwiler, and what they said was, “You should write that.” I have not written that yet. “What about Latin America?” “You should write that.” I would like someone else to write that and I would like to read that.

Scott Ferguson: While I do think that there’s so much more work to be done, there has been, as you’ve suggested, movement. And various folks in the movement have been doing more of this work in talking about post-colonial political economy and talking about Native American political economy. We could go on and on. But the point is well taken. I think that needs to be said, and it needs to keep being said. I was wondering if we could pivot to some of your theoretical work and insights. I’m particularly taken by what I see as a kind of convergence between some of my own impulses and yours. And this is revolving around questions of dependence. It seems from your work you’ve drawn a lot from the critical feminist legal scholar, Martha Fineman, and her vulnerability theory. I was wondering if you could tell our audience a little bit about Fineman, what you’re drawing from her, how dependency and vulnerability are so important for your work and for conceiving of law, and perhaps for racial politics and how you conceive of power?

Lua Yuille: Yeah, it’s a really similar story coming to heterodox economics, MMT, and vulnerability theory. It’s a similar story of nobody in the space that I was in, both as I’m reading but also as I’m going to places, seemed to be talking about actual reality. Nobody seemed to get and be engaging with the actual world. And so, in 2009-ish, Martha Feinman, who had a really long career and was a leading legal feminist, wrote a little essay. And the essay said, “Hey, what if we stopped treating vulnerability as a pathological condition? What if we instead recognize that every human being everywhere at every second is vulnerable? What if we said, ‘Oh wait, we’re human.’” I always say this in Spanish: we’re carne y hueso. We’re meat and bones. We are vulnerable to getting hurt. We are vulnerable to the environment. We are vulnerable to disease and illness. As we are born, unlike other creatures, we don’t pop out like “got it,” give me a couple seconds, and I’ve taken my steps. As the mother of two children, there is no end of frustration that it wasn’t like, “Give me 20 minutes, I’ll be ready to go, and we can go on the hunt.” No. We have to care for babies. And in our old age, once again, we become infirm in a very particular way. But throughout our entire lives, just by virtue of being embodied, we are vulnerable.

Then, we wind up living in human institutions, like the family, like society. And those, being made up of humans, are also vulnerable. You don’t make a family and then it sticks together all the time. There is strife. It is subject to harm. Why do we treat that as pathological? Let me just be honest. I was the mom who was like, “Come on, get it together.” But everyone agrees that when my baby was like, “Hey, I haven’t got this whole spoon thing down. I’m gonna need you to spoon this food into my mouth,” that was legitimate. We didn’t call my kid pathological. We didn’t say, “Hey, six month old, you need to learn how to be independent. Do it for yourself.” We gave the appropriate care. Now my kid is six. And, yes, every day I’m like, “Why can’t you just run yourself?” At the same time, she’s still really little, maybe it’s not appropriate for her to drive. We don’t treat most of childhood development, and the dependence that comes with childhood, as pathological. Why do we suddenly at some age flip a switch and decide that you’re supposed to be able to do everything? You can’t do everything by yourself. And we’ve got all these institutions designed to help you meet those needs.

It wasn’t like she was the first person to recognize this, but Martha Fineman said, “Instead of this mythological, economically modeled homo economicus, who is rational and an autonomous agent, what if we just use the vulnerable subject?” A person who, if you punch them in the eye, then they get a black eye, get mad, and punch you back. How about we deal with that person and see what law should look like if that’s what people are dealing with and if that’s the reality of the world? I read that and was like, “That’s what I am talking about–actual reality.” I think the really exciting thing for my own work, for legal thinking generally, but also for understanding the potential for law, is it actually provides a wonderful grounding for exactly what I said the critique of MMT is, which is that it’s not paying enough attention and that we haven’t moved far enough to really find the language of speaking to the disempowered that it has the potential to really to engage with. This is the other sort of issue with MMT. It is descriptive in nature. You can accept everything that MMT says but that doesn’t mean that you have to accept all of the prescriptions. Because you could say, “Okay, yeah, we have a lot more flexibility. We can make choices over our policy. We choose to let some people be poor because there isn’t a natural rate of unemployment. The NAIRU is not a thing. But you know what’s awesome? Having some segment of the population be desperate because then I get cheap stuff. And cheap stuff is amazeballs.” There are frankly people who know this and believe that.

Vulnerability theory steps in and also makes this descriptive observation, but gives a firmer grounding that says, “Okay, but the whole reason the state exists, the whole reason we formalized this power, is to create mechanisms so that people can respond to their vulnerability.” And in vulnerability theory, we call that resilience. Everyone is equally vulnerable. I am equally vulnerable to the richest man on the planet. If I go outside and it’s raining, I’m going to get wet. If he goes outside and it’s raining, he’s going to get wet. Whatever comes along with getting wet outside is going to be equally a reality for both of us. What is different is the likelihood that he’s going to have an umbrella or that he has to go outside. Notwithstanding my current profession as a university professor because I can afford an umbrella. I probably shouldn’t have used myself as an example. Do not worry, I have an umbrella. I can afford one. But the point stands. What separates me from a rich person is not how vulnerable I am. It’s how resilient I am. And what makes me resilient is my ability to use resources to protect myself or to bounce back. A better example for 2021 is that rich guy and I both getting COVID-19. That rich guy’s body is not intrinsically any more resilient and able to resist COVID-19 than mine, right?

Scott Feruson: Especially if it is Donald Trump’s body.

Lua Yuille: Right, right! He is not necessarily better able to resist it. But what can he do? He can do what Boris Johnson did in the UK and get diagnosed today. Tomorrow, he’s in a medically induced coma on oxygen, so that whatever his body does, it’s got the number one backup. The backup, at that time, is being put on a ventilator as soon as possible and then coming out relatively fine. As it turns out, if you have all the money in the world, COVID-19 is not particularly scary–if you can get all of the drugs available. But that’s not about your vulnerability. That’s not about your independence. You’re equally dependent. You just have more resources. You are more resilient to the fact of your embodiment. This turns around, and suddenly for me says, “Oh, wait, so the difference between us is power.” It is about the power to command, power to demand resources and consideration that other folks don’t have. That’s not a part of your inherent condition. This is why I think vulnerability theory is exciting and why I think it marries well with MMT.

It provides us with the demand to say, “State, you don’t get to say some of us are going to be poor, because you only exist to create mechanisms of resilience for everybody.” I get to demand that you spend money. That you are a free and an unlimited monetary sovereign in creating so that the needs of humanity are met. It also has its own detractors, because that perspective says that it’s not about black people and it’s not about women. It’s not about all these people who have historically been excluded from sites of resilience. It’s resilience for everybody. And so, it’s capable of being critiqued even if you buy all of its normative and descriptive conclusions. I think it actually is great, because it doesn’t require us to ignore the fact that LGBTQAI+ people didn’t get to be in the conversation. But it tells us that bringing people in isn’t the end of the road. Critique of black capitalism was a good example. There are people who are like, “Capitalism is great. I just don’t like that I am systematically excluded from capitalism. I want somebody to be homeless, I just don’t want the homeless people to have to be black. Like can we have diversity in homelessness? As long as there’s rich diversity in homelessness…” When you say that you want access to capitalism, that’s what that means. You just want a better mix of the destitute. And vulnerability theory tells you, “Okay, so that’s dumb.” It says, “Yeah…to the extent that there’s homelessness, we do want it to be richly diverse. But what if we had no homelessness? How about that? How would that play?”

Scott Ferguson: One of the things I really like about your approach to vulnerability and dependence in law is that it not only politicizes the vulnerable subject, as you’ve been saying, and critiques this kind of Lockean white man, homo economicus, but it also provides a different lens on law itself. You actually read law as, while we may say or insist that law is all organized around the independent, economic Man, in fact, if you look at it through your lens, you see that it’s actually entirely organized around this vulnerable subject. We just can’t see it. But it’s actually everywhere when you open your eyes to it.

Lua Yuille: Yes. I think that’s absolutely right. I will say that there are people in the vulnerability space who get annoyed with me because the demand of vulnerability theory is the responsive state. And I’m like, “We have that.” The problem is that we aren’t responsive to everybody. And we continue to categorically exclude people from who the state cares about, but we absolutely respond to folks’ vulnerability. We don’t respond to the vulnerability of women. Just because everyone is vulnerable, and I’ve shown examples of people being equally insanely vulnerable, doesn’t mean that we’re not all in the same exact moment in our life. Your vulnerability is manifest and experienced by you uniquely. I’m not saying race doesn’t exist. It is a construct, but it also is real just like your house is a construct. Someone built it. And now you live in that reality. It’s there. And so, people are categorically excluded.

But the law says we respond to the vulnerability of income. We say, if you invest properly, say in a house, we are giving you certain forms of resilience. We’re not actually going to make you lose your house except in very specific circumstances. If you are bankrupt, that’s a form of resilience. We give you tax breaks and incentives around your housing. That is a form of resilience. We say, “Hey, people with ‘good jobs,’ you get to have double ‘insurance.’” When I was employed by a private law firm in New York, I had like amazing insurance. It was like so wonderful. I had like the airlift insurance. I was in Honduras during a huge hurricane and all my friends were like, “Oh, my gosh, we’re so worried.” And I was like, “I hate to be that person but if it goes down to it, I am being helicoptered out of here.” They’re like, “How do you do that?” I was like, “I have evacuation insurance.” “How did you get that?” “I am associated with a huge law firm in New York.” Now, I work for a public university and I have the “maybe you can get an aspirin” insurance. But still, even with those huge disparities in what coverage looks like, depending on the kind of job you have, we have provided that resilience primarily to folks who meet some norms of society, which is that you have the kind of job that is stable enough. It means you are able to demand that you have firm enough working conditions and benefits to be insured.

The precariat are adjunct faculty who don’t qualify for those benefits in the same way that the guy who works at Burger King doesn’t qualify for those benefits. All of that, though, is resilient. All of that is providing through a state organized mechanism of resilience. The state passes a law that determines who must be covered by insurance, by their employer, and who doesn’t. Then, you have the Affordable Care Act, which we know has been under attack since its passage. You hear people who are really angry about other people getting access to resilience. There was a woman who was like, “No, I have to wait an hour to see the doctor because all these people got their Obamacare.” And I’m like, “Hold up, let’s just be clear. You would rather people have no insurance, then wait for an hour?” And the person was like, “Absolutely. I don’t care about you. I did what I was supposed to do.” We hide the way the state is responsive, we deny that the state is being responsive, but they’re responsive to this imagined ideal person who engages the world in this imagined ideal way. And they’re not responsive to the needs of the rest of us, which is why this is being made crystal clear. And frankly, I think it’s being made crystal clear to people who haven’t had this thrown in their face every day during COVID. People who have been systematically excluded from the resilience mechanisms of the government are like, “Ugh, what’s new?” But lots of middle class white folks are like, “Wait, the government was doing that for me? This was like a law thing that made this happen?” Yes, it was. Yes, it was. And now, it’s a law thing that’s not making it happen.

Maxximilian Seijo: It’s interesting then thinking about that wonderful explanation of a sort of systemic overview of the way political economy and law are functioning with one another to mediate human vulnerability and dependence. Relatedly, among your more provocative areas of research, is your work on gangs as para-corporate entities. You describe them as maintaining dignified identities in provisioning structures that are not legally recognized by a racist and classist legal regime. And I think this relates to this sense of resilience that you were just explicating. I think it’d be really interesting if you could flesh out this argument for us, as well as the politics of it, and how they relate to the life and death stakes you were just articulating.

Lua Yuille: First of all, those were not my words. They’re so much better, I’m stealing them. There’s a law professor by the name of Brian L. Frye who believes in plagiarism. I’m going to adopt his plagiarism perspective–just kidding. Everything that I do is grounded and begins in a story. Longer ago than I would like to admit, I was in my parent’s home. I had been living there and I was actually moving to Oregon to begin work as a law professor at the University of Oregon. It was the middle of the night. I was super young. And as super young people do, they make choices like, “There’s a party that I need to go to.” I couldn’t actually embark on this drive from Los Angeles, California to Eugene, Oregon until the middle of the night. I am packing up my car to move out of my parents home to Oregon and I get a phone call from my brother. He tells me, “Get in the house. They’re shooting black people.” I was like, “They’re shooting black people? I am from California.” And I said I was in Los Angeles, but I was not. I was in a suburb of a suburb of Los Angeles. Not only do they not shoot black people here, they don’t shoot anybody here. What is happening? He was like, “Get inside for real. They’re shooting black people.” So of course, I go inside.

It turned out a long standing back and forth spate of violence between gangs that were raced black and gangs that were raced Latinx had hit my hometown. That was my entree into the world of gangs. Because immediately after this happened, the town that I am from created a gang injunction. And a gang injunction is basically a tool that municipalities use. They’re like, “Look, we’re gonna call you a gang member.” It was very popular in Oakland, California for a while. Los Angeles used the first one, but they were being used across the country. Anyways, the municipality decides that you’re a member of a particular gang and then prohibits you by law from doing all sorts of stuff. You can’t hang out with other gang members, obviously, but you can’t wear blue if you’re a crip or red if you’re a blood. And also, because gangs do graffiti, you can’t have writing utensils, which means this is a pretty big imposition on children. It’s poorly named. It’s called gangology–a really poorly named field of study. The gangologists have long recognized that gang members are disproportionately children, so they can’t go to school.

I got called back into this because I was advising folks from my hometown who were trying to resist this gang injunction. Through that interaction, I started observing what they were doing and what they were talking about. What I saw, and what wound up being really consistent with what other people who had studied gangs saw, was that they were really not these radical outsiders at all. They were replicating, quite meticulously, the norms of capitalist entrepreneurship. And what is the corporation supposed to do? It’s a space where you invest your capital so that you can get a return on that investment while minimizing your risk. And by virtue of being involved in that organization, that corporation, you get all sorts of status out in the world. My favorite example is always Enron, though it’s getting really, really old. But we know what a McMansion is today because of the folks at Enron. They became associated with this corporation. And now I have a terrible mansion in Texas that’s ugly and awful, but it creates my access to a community.

Okay, well, I don’t have Enron money and I don’t have the social and educational capital of an Enron executive. What I do have is a durag, a pair of K-Swiss shoes, and a blue t shirt, but I can invest those things into this space and get a real return on that. If you gave me a more lucrative corporation to invest in, I would abandon it. As soon as I saw that, I said, “We need to have a conversation.” Because once again, what do we have here? We have people who are driven directly to respond to their vulnerability by creating resilience. You block them off in one way, and you block them off primarily because they’re young black and brown kids. Turns out in the history of gang injunctions–I’m from Southern California, there’s Asian gangs–no Asian gangs were enjoined. Now, today given stuff like the Sons of Anarchy, people aren’t surprised by this. It’s like a very dangerous surfer gang. And then, obviously, you’ve got all sorts of prison gangs. And the most dangerous prison gangs are raced white. But who gets enjoined? Who gets all of their bridges to the dominant economy closed off? People who are black and brown, because they invested in these spaces where they stand on the corner.

And of course, historically, in the late 1970s when the California gang revolution began, these corporations are actually doing way better than sanctioned corporations are doing for the communities that they’re in, because they’re providing security and policing, and they’re ensuring that the varying economic pathways in Watts or Compton in South Central, Los Angeles keep moving. I always get people who are like, “But you started off saying gangs are revolutionary.” No, they’re not. They’re not. I wish they were revolutionary. They’re not revolutionary. They’re totally neo-classical, neoliberal institutions that are trying to replicate humanity in one way and we won’t let them because they’re black and brown. And it’s been exciting, because, meanwhile, I worked for big corporations who were functioning precisely the same. Their identity was tied up in the corporation. When they burned down the community, the whole country is taken with it, and nonetheless, we give them golden parachutes–both the proverbial kind and the business kind of the literal golden parachutes.

Scott Ferguson: In your writing, what do you recommend in place of these injunctions? 

Lua Yuille: I think there are two approaches. In the work that I have, I’m like, “If you are seeing people engage in traditional capitalist endeavors, why don’t we just pay them? Why don’t we just pay them? They’re willing to leave. Give them money. Pay them to do what you want them to do.” That is actually my quite conservative recommendation, because it doesn’t have any inner critique of the system. It doesn’t have any inner critique of why we allow corporatized entities to have the kind of power and influence that they have. It doesn’t break down the idea that we are finding and being fundamentally connected to our identity through the way that we get property. And again, that goes back to me saying through the way we get power. We should critique that.

So what do I say? I tell people to pay gang members to stop being gang members. You can pay them with actual cash or you can pay them with jobs elsewhere, and they will take them because it’s not like they’re making a lot of money in the gangs. But my radical critique is, “Hey, let’s step back and why don’t we destabilize the system so that I don’t get my identity from my work, so that I don’t need a corporation to situate me in society, whether it’s a para-corporation or an actually registered corporation? Why don’t we have work and labor be for your intrinsic value and for necessary reproductive activities in society? I’m not on the “who cares about work” train. “Let’s get rid of work. Let’s mechanize it all.” That’s not my get down. We need people to do work. There are lots of jobs that need to be done. But how about it doesn’t turn out that my position in society is connected with that? And how about we start actually allowing socially reproductive activities to be properly compensated? And what is proper compensation? Of course, that means a dignified wage.

Scott Ferguson: Do you have thoughts about the Bloods and Crips truce manifesto? It seems like that document was pointing in this direction.

Lua Yuille: Well, there have been several examples in history. Before Tookie Williams was executed by the state of California–sorry, I had to go there. It’s a fact that happened. Tookie, by the way, claimed to be one of the founders of what would become the Crips, which is one of the major gangs that began in Los Angeles and moved across the nation and across the world. But what he really worked on doing, was trying to say, “Okay, yes, I got this reputation as a murderer because I committed murders. But I didn’t commit murders willy nilly. I was operating in this space that was not sanctioned by the government. And though some people in this space will disagree, the way law gets a lot of its power is by the threat of force. And so, if you don’t have that formal threat of force, you need actual use of force.” He really explained his violence, and then in so doing, also reminded folks that, what the project had been, was to advance the neighborhood. And it wasn’t about purely personal advancement. It was at least partially communitarian in nature. Now, I think these people are totally mainstream. So maybe we would call them like the benefit corporations of today. “Do good while doing well.” But he really did a lot of that work. And what he was doing was saying, “Hey, look guys. Now, we have lost the “do good” part. Let’s come together. Let’s actually problem solve. And let’s take a moment.”

It’s happened more than once where the conversations are like, “Wait, why do we do this? Why do we gangbang?” In the interviews that I did with folks, and I can’t say that they are gang members, there are people who were subject to gang injunctions. Not many of my respondents would say that they were gang members. But what they really talked about was, particularly older people, this was my entree into this space and if you had given me an alternative, I would have taken it. They’re very aware and willing to talk about how this is, yes, as an important part of my identity, but it’s not an ideal. I wasn’t born for this. And nobody should be born for this. But this is how I staked my way in the world. And if there were other paths for me, I would have happily taken those other paths. This is not any of my research, but just happened to be a recent interaction with someone who was a part of my research and was really talking about his own daughter who is 18. One of the things that he did was, as he became an adult, invest in a way that he was like, “Oh, no, you can’t even associate with those people. The only gang members you know are old ones like me because that’s your family. But it’s not the way we move forward. We move forward very traditionally–through education. You’re going to college.”

The actual reason that the person came to my attention was to help this kid, whose dad is a gang member and uncles are gang members, apply to college. We’re gonna need some help because we want to create a picture that looks more standard. So people don’t disagree. Of course, you also have folks like MS-13 who have very great critiques of mainstream capitalism and the road into violent, economically driven gang participation. I think it’s very different because you have an overlay of immigration law. And while the black and Latinx gang members that I talked to were predominantly US citizens, so the idea of the bridge was there, in the research with MS-13, the idea of a bridge was not there. What you see then sort of it goes off the rails. Instead of a traditional corporation, you get something a lot closer to Murder Inc.

William Saas: This is extremely compelling. I would like to hear a little bit about the reception of these ideas. You talk about these two different registers that the work operates on. There’s the kind of straightforward carrying out the logic of capitalism to its most absurd end and underscoring how violent and exclusionary the system already is. And then there’s the critique of like, “Or we could just do a job guarantee and health care for all, right?” So how has it been received? And how often do you feel like you get to that second order conclusion for audiences?

Lua Yuille: I guess it depends on the audience. I will say that with my conservative recommendations, there’s been experimentation along that way long before I even started studying this. Homeboy Industries was a private version of what I suggest. Richmond, California, which is right outside of Oakland, started as well. In my work, I have anticipated political backlash. I actually don’t say to pay them with cash. I say pay them in kind with the bridge to the traditional economy. That’s what Homeboy Industries does on a private level. But I openly talk about how you could pay them with cash as well, though people think there’s free rider problems and all sorts of neoclassical economic concerns. That’s why I don’t pursue talking about paying them with cash. But Richmond, California, right outside of Oakland, initiated a project several years ago that was paying gang members with cash. And it was relatively well received in the sense that people thought it was crazy. But if you’ve got the money to do it, why not try because this is a real problem that we’re having.

Another private organization, an English one, did something very similar to Homeboy Industries for gang members in Honduras. People have been trying the conservative version. When I look at populations of actual gang members, they are all for getting a job. “Gonna give me a good job? Sure, I’ll take it. All I have to do is refrain from X, Y, and Z. I don’t want to commit crimes. Like, don’t worry, I’m there.” In the world of action, there is some level of receptivity. In academia, it’s not well received, and politically, it’s pretty hard. And I’m still on the conservative version because people think you’re rewarding them for engaging in bad behavior. They’re like, “If you give gang members jobs, then people are gonna want to join gangs. It’s a perverse incentive.” Not one person that I talked to, and not one place did I read, did anyone ever say, “This was just such a good opportunity. I’m gonna get jumped in, and if I get stabbed, sometimes you gotta put it on the line so that you can get a job at Sprint.” I guess it’s T Mobile now. For me, it really reflects the dehumanization of gang members. Because they’re not stupid. The black kids and the Latinx kids who people think are going to be in these gangs, they’re not stupid.

Why would they go through what you wind up inevitably going through to join a gang in order to get what is in any event not going to be the corporate CEO of the next big company? It’s just going to be a safe job with job security. It’s not worth it. But that’s really what you hear all the time. You don’t want to reward them for holding their communities hostage. Politically, you get the same backlash, though in Oakland street level activism came together to get rid of the gang injunctions because they’re like, “You’ve put our community under constant distress, we don’t want them. We don’t care what you say, our boys will not be banished from our community. And if you want our community to be safer, provide us with radical solutions.” So once the communities get their voice heard, it’s the radical solutions. Though interestingly, when I talk to people who are subject to gang injunctions, they’re not asking for that. I don’t even think it’s fair to say that they are particularly impressed by the idea of much more systemic and broad options. But I think that that’s because they’re fully bought into the system and they’re on the outside.

And rather than saying, I am perfectly happy to never be inside that system, it’s sort of like, “But let me give it a go.” Because from the outside looking in, that one looks pretty good. And the kind of ideal world you’re talking about of job guarantees, universal health care, and universal access to education, doesn’t have any Elon Musk’s in it. Maybe Elon Musk is not a good example. But the uber-rich gilded mansion is a dream, just like it is for a proud boy, just like it is for someone in rural America, so too is it for a kid in South Central LA, for a kid in a tiny apartment in the Bronx. All of them believe that that’s on the table and they are really tied to a world in which it’s on the table. And the job guarantee and universal health care world takes that off the table. We don’t have good discourse around why we should do that anyway.

William Saas: We’ve been talking a lot about resiliency in different contexts and we’re going to shift to a very different one. It’s one that’s familiar to each of us and maybe especially familiar for you. You were interviewed in the Chronicle of Higher Education recently about the response of the Kansas Board of Regents to what appears to be a financial crisis. I don’t know how they’re classifying it. But they’re chipping away at or maybe have already moved on taking away tenure, or making it more possible to fire tenured professors in the Kansas system. And of course, tenure is a source of built resiliency into the profession of being an academic. It serves certain purposes, such as academic freedom, and all that sort of stuff has its own issues. But they’re chipping away at it under the aegis of austerity and financial responsibility on the system. You were interviewed and said that, basically, they’re barking up the wrong tree here, that firing people is not the way to relieve the financial pressure. You’ve suggested that the writer of that article did not account for what else you might have said? I wanted to invite you to say, if that’s not the answer, then what is the answer to the current financial situation in higher education and under COVID?

Lua Yuille: The answer to our current crisis of education, which is exacerbated but not caused by COVID, is to tear down the entire system. And just to be clear, I am a private, higher education person, in the sense that my undergrad and graduate degrees are from private schools. And so, I say this, in some ways, well aware of the danger that comes with it, but I think we need to tear it down. And I think we need to tear down the system, both for public education and for private education, because we can’t just tear down public education and leave standing the Columbia’s and Johns Hopkins’s, which I shout out because those are my schools. Though, obviously, it’s the Harvard’s that win the day in endowments. That being said, what do I mean by tearing it down? I mean that we need to understand and recreate how we fund what in the education space. And that funding, as problematic as it is, needs to look more clearly to what we see in a European model, where the origin of funding for higher education is the state. It’s not secret private dollars. Like I went to Johns Hopkins and Johns Hopkins has the most federal funding because they basically fund crazy bomb research that no one knows about. That’s not what I mean.

I mean there needs to be a full appreciation, that it’s not private industry that should be driving education. It is the social reproduction of society, and the creation and building of knowledge and new perspectives on how to solve age old problems. And that means owning that power that comes with being a monetary sovereign, and investing heavily in all kinds of education, not just what we do now. We care about STEM. And like right now all the universities are trying to hire black people because of George Floyd and black people get hired everywhere. But of course you’ve systematically excluded us from the space. There’s like five people who are getting called by all the universities in the nation to take these jobs. What do we need to do? We need to empower every single individual student. And I don’t want to make this sound like vouchers. But every individual student should come along with an allotment. It’s not based on where you’re from. It’s not based on anything other than we need funding.

This is what it would take to properly fund a university. Then, we stop competing over things like dorms. Then, we stop exploiting basketball players in hopes that winning basketball teams get donations. What is the small way to do that kind of action before you get the revolution that burns it all down and rebuild it in a way that makes sense? It is for folks like the Kansas Board of Regents, folks like any state public authority for institutions, to be doggedly communicating with the legislature so that the legislature, one, doesn’t cut, but so that the states come together and turn to the federal government, because as we all know, the state of Kansas doesn’t have any money. Right? The state of Montana doesn’t have any money. Iowa is talking about these 10 year suspensions. They don’t have any money. They’re not monetary sovereigns. They do have a pot that ends. But the federal government doesn’t. But until all of the states, and not just the proverbially blue ones who actually don’t do this either, are like, “Hey, federal government, would you like to give us some money for our schools,” you’re not going to get appropriations in that way.

I also think that it’s going to be really important–this is practical for what happens today–for those state regulators of higher education to actually value higher education. And to value it as a part of, again, the reproduction of society, which is totally economic but it’s not fiscal. It’s totally economic but it’s not always financial. It’s not about getting people to buy widgets in Kansas. It’s about having an educated populace in Kansas. Unfortunately, having an educated populace is not what any part of the government really cares about today. And this is not a red or blue, not a left or right, thing. I think that the world of politics is so fully captured that there’s no desire for people to actually know anything. And that is going to be the big problem. What is the tiny thing that should happen because none of this awesome stuff that I’m talking about is gonna happen? Unionization. And I have a really crazy, complicated relationship with unions. I shouldn’t call it a relationship. It’s an intellectual relationship, because I’ve never been in a union. But I came up intellectually in Europe, where unions are really strong. But I’m also a black person in America. And unions played a really nefarious role in the labor marginalization of black people. Because when unions were really powerful, they kept their power by ensuring that black people didn’t get in the cushy union jobs. That being said, my experiences in Europe around solidarity for labor are so strong that I’m like, “If the government doesn’t fight for you, you gotta fight for yourself. And what does that mean for faculty? Unionization.

Maxximilian Seijo: Well, Lua, this has been a fantastic conversation. And really, thank you so much for coming on Money on the Left.

Lua Yuille: This was fun. Thank you guys.

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

The Franciscan Invention of the New World with Julia McClure

Money on the Left is joined by Julia McClure, lecturer in Late Medieval & Early Modern Global History at the University of Glasgow. McClure’s 2017 book, The Franciscan Invention of the World, draws compelling and confounding conclusions about the role of the late Medieval Franciscans in shaping the modern capitalist and colonialist world. We talk with McClure about how these surprising but profound connections relate to the problematic construction of money in Western modernity as a kind of scarce and finite technology of alienation and privation.

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

Scott Ferguson: Julia McClure, welcome to Money on the Left.

Julia McClure: Thank you very much. It’s great to chat with you guys.

Scott Ferguson: So maybe to start, we can kind of take a step back. Can you tell us a bit about yourself, your personal and professional background, and how you came to study the things that you do?

Julia McClure: Well, many thanks for having me on. It’s great that you were interested in the themes and ideas in my book, The Franciscan Invention of the New World. So I started out with a degree in history. I became interested in the Middle Ages as a kind of cache of concepts, perspectives, and value regimes that were distinct from those that were embedded in Eurocentric capitalist modernity. I was particularly interested in the way in which the meaning and boundaries of concepts that have normative definitions today, such as property, were actually debated and fought over during the Middle Ages. Theologians and scholars were actively debating questions like what constitutes a just society. They were consulted by rulers on questions, such as just war, and other very diverse questions. And now, while governments do consult academics today, and academics use their research to make policy recommendations, you can’t quite imagine a foreign secretary asking university academics to determine whether certain wars or trade deals are morally justifiable. So it seemed like an interesting time period to study. 

Now, I’ve had a wide range of scholarly interests from the medieval history of the Franciscan Order. Today, I’m more interested in indigenous agroecology movements, and the history of the Spanish Empire. But overall, my diverse interests have been, in some way, linked to the histories of poverty as a political project, as well as the historic pathways to inequality. Throughout all of this, I’ve been interested in global history, but I’ve maintained an interest in the indigenous history of Latin America. I’ve been interested in the way in which the intellectual history of political concepts, and so called cosmovisions, or different ways of seeing the world, have varied and been constructed in different ways at different times. This includes the ways in which the world should be ordered and the fact that there’s been different visions of this emanating from different societies.

As you know, I started in medieval history. This was mainly because I got interested in the socio-religious movement known as the Franciscan Order, which we’re going to talk about in just a moment. This wasn’t because I had a passionate desire to study medieval religious history, but rather because I got interested in the particular radical concept of poverty that they were experimenting with in the Middle Ages. In studying this, I came to find out that the Franciscans were also the first global religious order to emerge from Europe. This also led me to my interest that I follow today in global history. The Franciscans had a particular way of seeing the world. I did the PhD and the first book on the history of the Franciscan Order, but not long after finishing the PhD, I followed the Franciscans across the Atlantic myself and worked on that transatlantic history at the Weatherhead Initiative on Global History at Harvard, where I became more interested in the global history of capitalism. This was work that I managed to develop further at the European Institute in Florence, then at the Global History Center at Warwick. Now, I’m at the University of Glasgow. So I’ve worked on a number of different projects during these different positions, all linked in various ways to the global history of poverty.

I’ve just published a co-edited monograph on The Routledge Handbook of Poverty in the early modern world. I’m working on a second monograph at the moment, Empire of Poverty: the Moral Economy of the Spanish Empire. These different projects in a way have been inspired by the work that I did on Franciscan poverty, but have very much broadened out from there. The other thing I wanted to say about my biography is that I also got interested in the political implications of histories of poverty in today’s society, and I have established a poverty research network. I’ve got a grant in order to go and look at the different histories and politics and aesthetical representations of poverty in different places around the world in a project called “The Local Visions of Global Poverty,” holding workshops in the UK, Senegal, and other places–most recently, in Chiapas, Mexico, where I’ve been working with academics on various agro-ecological projects and also thinking about the Zapatista movement. So I have quite a diverse range of works, but in the end, they are all linked to this idea of the global history of poverty.

William Saas: So to transition into your research on Franciscan poverty, I think we should begin with some basic questions for our audience and for us. Who was St. Francis and who exactly are the Franciscans? When did they emerge? What did they believe and what drew you to study Franciscanism? And why in your review are the Franciscans so important for us in this contemporary moment as we rethink the emergence of the modern West?

Julia McClure: The Franciscans were a socio-religious movement that emerged, I would argue, in reaction to the emergence of money and markets in the 13th century. They were rhetorically rejecting money and markets, and in this way, could be thought of as the first anti-capitalists. Franciscan scholars, over the course of Franciscan history, have also contributed in many ways to the legitimation of capitalist economics within the framework of Christian ethics and other principles of finance. It’s a very complex history. That’s important because, since its origins in the 13th century, Franciscan history has been a very heterodox movement. There are different branches of the Franciscan Order. There have been spiritual branches, there have been more rigorous branches, and there have been more observant branches. Basically, across these different traditions, there are different kinds of iterations of the Franciscan movement. It’s very difficult to universalize what Franciscanism has stood for because many things have been debated throughout the course of Franciscan history, and subsequently, in the historiography.

The other point about the heterodoxies and contradictions of the order is that these tensions within the Franciscan Order began really with the origins of the order. It was established by Giovanni Bernardone, who was the guy that later became St. Francis. He was the son of a wealthy class merchant family in the Umbrian market town of Assisi. He was from a reasonably wealthy family and what’s significant is that he renounces his possessions and takes up a voluntary life of poverty. Now, again, the discussions about how this happens or what it meant are part of this Franciscan question and the hagiography of St. Francis. What’s important is that this act of renunciation is the renunciation not only of individual property but also of common property, which marks the Franciscans out as distinct against other mendicant orders. Mendicant orders are those that devote themselves to a life of voluntary poverty and are meant to be existing by begging, such as the Dominicans, yet the Dominicans have a form of common property. But the Franciscans were meant to also be abdicating from that notion of common property as well as individual property. Again, we’ll talk about that in just a moment.

But the point here is to note that St. Francis, the guy who’s founding this Franciscan Order, was from a wealthy family and became voluntarily poor. This is a distinction between religious poverty and real poverty. I think that this tension is significant in terms of understanding the ideology of poverty that’s at stake within the Franciscan Order, because it’s a play at poverty in many ways. They were intellectualizing experimentation with the legal implications of poverty that’s distinct from the economic condition of real poverty to a certain extent. So there were a number of radical implications when this Franciscan Order emerged. Something else that’s interesting to say about the early years of the emergence of the Franciscan Order in the 13th century is that they weren’t the first people to renounce possessions and to play at poverty as a way of critiquing the wealth of the church.

In fact, for example, the Valencian Order had wanted to live a life of voluntary poverty and been condemned as heretics by the church. What made the Franciscan Order unique in its history was that it tried to find a place for this socio-religious movement with an ideology of poverty within the framework of the Catholic Church by getting recognition as an order. This process of institutionalization meant that many of the radical implications of the early years of Franciscan poverty were attenuated through that process of institutionalization. A lot of the first debates were about the approval of the Franciscan rule, for example, and there’s lots of contentions about what that early rule was, but it had more radical claims about the meaning of poverty than that could be approved by the church. These compromises in the history of institutionalization and acceptance and avoidance of the charge of heresy are kind of what make the history of the Franciscan Order. As I said, these different debates lead to different branches and made the heterodoxy of the movement. Whenever you say, “Franciscanism represents this,” straight away, it gets ten people disagreeing with you, because it could represent a lot of different things. So that’s kind of how the Franciscan Order emerged.

Why I got interested in them is because of this claim that they had that the renunciation of all property was a form of radical freedom. At the time, that seemed like quite a radical claim. And there are different Franciscans that tried to articulate it in quite extreme ways. They wanted to be free from the trappings of property. It is interesting how they tried to normalize this, and it had implications for the lives of the real poor. The Franciscans, because they seemed very ascetic, closer to God, and had this real value within the spiritual society of late medieval Europe, attracted a lot of attention and support from the laity and quickly started to acquire wealth. This was at odds with the doctrine of poverty that was at the core of the institution of the Franciscan Order, but they had an arrangement in the early years that they could have a certain aspect of property, of things around them, because they didn’t actually own those things. So they kind of theorized a theory of use that was distinct from property. The minister general of the Franciscan Order, Bonaventure, set out a fourfold category of relationships to temporal goods that included ownership, possession, usufruct, and simple use, which was simplex usus

In 1279, this principle of simplex usus got taken up in the Exiit qui seminat and said that the papacy would own the things Franciscans used in a category of simple use of fact–simplex usus facti. And so, the Franciscan Order did become quite rich, but they could also say, “Well, we don’t actually own these things, the papacy owns them on our behalf.” Then, a whole kind of moral questioning about use comes in. Peter Olivi, for example, in the late 13th century, says, “Okay, this is a fine arrangement, but let’s remember that we also need to have poor use, that we need to use things in a minimalist way.” This is kind of a response to the arrangement of simplex usus facti in that, yes, they’re not owners, but they also need to remember to be poor users of things. I know that has significance in the context of the debates that you want to talk about, so we’ll probably come back to that.

What happens in the 14th century is that this arrangement is revoked. This affects the ways that the Franciscans claimed they were living in the world outside of the constraints of property, rights, and living according to a simple use of fact, which is a form of fas as well. The metaphor that they often used was to cross through somebody’s field to use something without having any stake of ownership in it–this is fas. This gets denied by the papacy, who say that people need to be the owners of the things that they use, especially if those things are destroyed through the use of them, and only an owner can have the right to destroy certain property that can’t be granted to another by virtue of a license. These are the debates that take place in the 14th century phase of the Franciscan poverty disputes, which characterize the history of the order. Now, just to bring this all together, I was interested in this because of the implications for theories of property. 

What I would argue is, coming out of this, property gets established as a paradigmatic right, in that there were these other ways of existing in the world that didn’t rely on property, but in the end, after the papacy revoked this particular arrangement of simple usus facti, it was important that you were the owner of things that you use, thereby establishing property. In fact, it also becomes heretical to claim that Christ owned nothing. Spiritual poverty based on an idea of how Christ was in the world becomes a form of heresy. The debates are particularly focused on whether Christ carried a purse. This bothered people for years, going back and forth asking whether Christ carried a purse. The Franciscans were particularly against money, but at the same time, the papacy says it becomes heretical to say that Christ didn’t carry a purse. So in my work, I wanted to think about the implications of all of this for the early history of colonialism. That resulted in the book, The Franciscan Invention of the New World.

Maxximilian Seijo: This movement of heresy and then synthesis back into the church relationships, as you’re suggesting, really is pivoting on the fulcrum of money. And so, perhaps we could dig into the relationships of poverty to money, as you mentioned, with this purse and within the specific disputes that the Catholic Church and the Franciscans had with one another? And maybe we can discuss some of the details of how these debates were resolved or weren’t, as well as some of the shapes of these crucial problems? Can you do that with just a little bit more attention to the monetary aspect?

Julia McClure: Sure. When the Franciscans emerge, they’re particularly opposed to money. They see it as a form of evil. In the sources that you have around the life of St. Francis, they’re always critiquing money in particular. He says that, if his brothers, the Franciscans, were to come across money, even accidentally, they should treat it as dust that is trampled underfoot, that anyone that holds money should be considered a deceptive brother, an apostate, a thief, and a robber. There’s a citation from the Assisi compilation, a collection of Franciscan sources, that regards any friar who touches money needs to be rebuked, reprimanded, and should be ordered to pick up the money with his mouth and put it in a pile of donkey’s manure. This association of money with all that’s bad with the world is in the early Franciscan texts. They do have this particular anxiety about money. In fact, in what I mentioned earlier about the distinction between the different rules of St. Francis, there was the Regula non bullata, which was the rule that wasn’t approved by the papal’s seal. In this, it said, “The devil wants to deceive those who value money or deem it more valuable than stones. Let us who’ve abandoned everything beware of losing the kingdom of heaven through something so low.”

That passage doesn’t make it to the Regula bullata, which is the rule with the papal seal. Although, the Franciscans are still told that they can’t touch money. This defines the history of the order in the early years alone, I would say, to a certain extent. In the article I mentioned earlier, “The Globalization of Franciscan Poverty” from the Journal of World History, I talk about some of the ways that anxiety travels with the Franciscans. There’s quite an interesting example of how they need money, but struggle to separate from it. At one point, they had the idea of spiritual friends, amicos spirituales, who would carry the money on the Franciscan’s behalf like an agent. There’s a story of William of Rubruck crossing Eurasia at the end of the 13th century–this is before Marco Polo–and traveling to China. He’s got spiritual friends carrying the money for him. In the text, it says, this spiritual friend needs to stay behind. They’re trying to explain to the people that they’re meeting that the spiritual friend can stay behind because they’ve got to carry the money since the Franciscans can’t carry it. This is a theatrical performance in a way.

You can follow these kinds of stories in the Franciscan texts, but of course, this also gets critiqued. A lot of the things that we can read about the Franciscan Order comes from the negative stereotyping you get within confessional discourses from the likes of the proto-Protestant thinker, John Wycliffe. He charged the Franciscans with hypocrisy, arguing that they are not allowed to touch money, but they get around this by wearing gloves or touching it with a stick. So the Franciscan Order became a wealthy order and they had these tensions at the start. Then, they tried to think about the separation in different ways. Now, the 14th century Franciscan poverty disputes are a critical moment for the Franciscan Order, where many of their claims to radical poverty are effectively renounced and denied by the papacy at the time. They revoked earlier arrangements and also made it heresy to say certain things about the Garden of Eden. The pope that is overseeing this Franciscan poverty dispute is Pope John XXII. He argues that Christ carried a purse and that the apostles had money. In one of the papal bulls, he says that, to have some things in poverty, with respect to ownership, doesn’t detract from the highest poverty. This is part of the Franciscan poverty dispute.

Now, to a certain extent, we can trace all of this. How much is it about money? For the Franciscans, it is about money. In terms of the implications, it’s really about property. There are many scholarly takes on whether Christ carried a purse. Inside that purse, yes, there are coins, but in a way, this is shorthand for ecclesiastic possessions. So it’s a broader theory of property and the legitimacy of church property. It’s not only about money. In fact, a lot of the attention has been focused on the implications for the history of property and rights. I would say the implications of the history of money has probably received less scholarly attention, which is something of interest. In relation to what people are thinking of as money, property, and wealth, the framework in the early modern period is more open in a way, because it’s harder to monetize on certain things that have value in other ways. This is the problem of taxation before monetization, you could say, as well.

This idea that the Franciscans had a disdain for money, but were also actors in the world that had relationships with money, continues into the Americas. Some of the documents I came across from looking at the early Franciscan missions whilst doing research in Mexico City in the Franciscan archive there is that they talk about how money, tribute, and other things as well, was given to them by the indigenous populations, not as a form of taxation for the missions, but as a form of charity as alms. The word that they use to describe this income stream that they’re using to fund their missions based on the wealth generated by the indigenous population is Limosnas, alms. It’s quite interesting to think about what they’re calling money, what they’re calling alms, and what other things have value. How much of this is about money and how much was other forms of value?

The other important thing to say, and this is one of the points that in the book I talk about as one of the paradoxes of Franciscan history, is that they also contribute to theories of money, capital, and finance. Peter Olivi, who was the Franciscan I mentioned previously and who was talking about the importance of use value, or the need to have a very poor use of things, also constructed ideas about a theory of just price. He’s thought of as one of the earliest theorists of the notion of capital. He uses the idea of a seed that increases in value. In Latin, this is rationes seminales. He makes a distinction between money that’s just simple money and capital, which he thinks of as fertile money. He’s thinking about what kinds of ways of making a profit from money could be legitimate. In this way, it’s thought that he could be one of the early theorists of capitalism. Although, one of the things that he says in his text is money might be permissible in trade where you might not necessarily know that you’re going to make a profit from the transaction. So it’s not usurous in the same way that usury was condemned in the Middle Ages.

He also says that when this happens, you should think about it in terms of consequences for a common good. It’s a complex text, but also of interest. On the one hand, yes, you can cherry pick these citations of the Franciscans being radically opposed to money, especially in the early spiritual texts. On the other hand, you’ve got Franciscan theorists who are really thinking about value and meaning in very deep ways throughout the Middle Ages. So it’s a complex picture. One final thing to say about in terms of what could be a Franciscan theory of money after the years of early radicalism that was radically opposed to it is that they do have a notion that wealth should circulate. That if there’s a profit coming back, it should be for a common good.

So in the early years, yes, they shouldn’t touch money and this is satirized in a number of ways by their critics. They do become a wealthy institution. Then, they are also very committed, as they develop their financial institutions, to charity. This wealth should circulate. The other thing that they do that’s quite interesting is effectively set up the first micro lending institutes. They’re called the Monte di Pietà. These emerge in Bologna at the end of the Middle Ages and they are basically lending to the poor. This is also not just an act of benevolent charity, but about undercutting Jewish lending practices, due to the anti-semitism within the Franciscan Order. But it’s interesting that they go from being very critical of money to then perhaps thinking about how money can be used in other ways as the order develops. But fundamentally, there’s this idea that wealth should be redistributed that doesn’t fully go away.

Scott Ferguson: Except not to Jews, right?

Julia McClure: Exactly. Again, in that article I keep mentioning, I talk about how they’re constructing a universal but unequal notion of a world unified by this unequal notion of poverty. And it’s particularly focused around this Christian society. And so, they want to convert people to Christianity and to be a model of salvation. On the one hand, they’re involved in the missionaries in Latin America and elsewhere, and on the other, they’re also engaged in anti-semitism in Europe in the Middle Ages. This is a schema for exclusion as well. It was not an inclusive charity–if charity is ever really inclusive in any way.

Maxximilian Seijo: So perhaps moving on from here to how this leads to questions of colonialism and how the Franciscan’s colonial project became a part of the roots, as you described them in your book, maybe you could walk us through some of this or describe how Christopher Columbus’s journeys were conditioned by Franciscanism?

Julia McClure: What happens is Christopher Columbus famously visits the Franciscan monastery of La Rábita on the Spanish-Atlantic coast. There’s this legend that Columbus visited this monastery and there he learned about the Americas from the Franciscans, who were these unique custodians of global knowledge because they were the first religious order to establish a global network. They were in China before Marco Polo. They had missionaries that had gone to the Indian Ocean, Russia, and all over. This knowledge of the global connections of the Franciscan Order form the basis of this legend that Columbus learned about the Americas from the Franciscans. It’s obviously nonsense. In fact, it turns out this legend itself might have its origins in Francoist ideology, because a lot of these books that were written about this had dedications to Franco at the start. I think this was about getting the Genoese out of the picture and getting the proper Spanish origins to this story into the picture.

Nonetheless, they accepted this legend. Columbus did go to this monastery. He wanted to leave his son there. And there’s different kinds of rumors about the different intellectual exchanges, what the Franciscans knew and so on, that are happening there. Columbus famously gets buried in a Franciscan habit. You could argue, if Columbus did play at the Franciscan identity, then this was part of a laundering of his reputation as a colonialist and the things he was getting up to in Hispaniola and so on. Because the Franciscans were penitential. That means that they were cleansing from sin. To behave like a Franciscan is to be able to cleanse yourself from sin. That’s the trade off of value for Columbus.

The Franciscans did become the first religious order to be established in the Americas. This is coming on the back of their legacy as the order that has the first global network. In the Americas, they tried to make their world vision a reality. They saw the discovery of the new world in a providential way. They fitted it within their particular eschatology, this idea of the end of the world and the apocalypse. They believed before this there was going to be an age of holy poverty, and that everyone needed to be converted and share in the holy poverty of the Franciscans in which they were unique leaders. And they wanted to have missionary spaces that they were in control of. And so, they established these missions and became the best linguists of colonialism, in that they were learning indigenous languages. They were catechizing, or teaching the religion in indigenous languages, like Nahuatl in Mesoamerica, but also other indigenous languages. In fact, scholars today studying indigenous languages still use these texts and grammars that the Franciscans created.

They also taught in Latin as well, which many of the conquistadores would not have known. The argument for this is they didn’t want the missions, which they used to construct this new world of holy poverty, to be corrupted by the greed of the conquistadores. That’s what their rhetoric was. It’s a real battle for control. You see this idea popping up across the Americas as people are trying to realize dreams and visions of different ways of organizing society through these projects of colonialism. That’s what I was talking about in the book in terms of the origins of why it was the Franciscans who were interested in going to the Americas and what they were doing when they got there. Their early role in colonialism, which I say throughout the book, is ambivalent, in that these missions could be sites of oppression.

There was this thing called the “Franciscan Terror,” where the violence of the conquistadores was so extreme that when the inquisition arrived in the Americas years later, the Amerindians were exempt. One of the arguments for this was, because the “Franciscan Terror” had been so extreme, they then had to exempt the Amerindians from further violence. On the other hand, they had projects working with the Amerindians at schools that they established. There is a famous one in Texcoco, which is just outside of Mexico City now. It wasn’t even originally part of Mexico City now that Mexico City’s expanded so much. In these workshops, they were working with indigenous scribes and creating these documents for the Florentine Codex, which was a monument for the preservation of Amerindian culture. It is an ambivalent history of colonialism.

William Saas: So part of what makes this story of the Franciscan Order over time that you’re telling so interesting to me–and I’ve been hung up on this image of the spiritual friend just holding bags of coin–is this emergence of paradox and contradiction, and then reconciliation and evolution over time. We’re talking now about their role in colonialism, but you’re talking about ambivalence and maybe you could say something about how they resolved their dedication to and service to your vision of themselves as defenders of the oppressed and poor with their participation in exploitation, violence, and destruction? I’d also like to talk a little bit about the spiritual friends maybe after we talk about reconciling this paradox.

Julia McClure: Yeah, I’ll just say two more things on this idea of the role of the Franciscan’s in conquest. Mendieta, who was the first Bishop of Mexico and one of the earliest Franciscans in the Americas, writes about the Conquistador, Hernán Cortéz, who after his conquest of the Aztec capital, Tenochtitlan, welcomes the Franciscans. There were twelve of them in a kind of apostolic, eschatological symbol, and he welcomes them after the conquest and bows before them. This is meant to show the Amerindians the value of Franciscan poverty at the moment of their conquest by the Spanish. A moment of conquest by the Spanish is a moment of conversion to the Franciscan value of poverty. There’s lots of ambivalence in terms of the Franciscan meaning and understanding of poverty in the Americas. I mentioned this issue before about how they were meant to subsist by begging or how an urban landscape would facilitate their ability to subsist by begging, which of course, was challenged in the Americas. They would need to appropriate the means for subsistence like a Conquistador as a colonial act, but then they might justify it as the sharing of charity amongst spiritual friends with this shared notion of poverty.

Of course, this notion of poverty was the product of a particular intellectual history of late medieval Europe and was not shared by the Amerindians they were conquering. This is a culture clash typical of colonialism. The other thing that was significant in terms of this confrontation is that the Franciscans–I’ve described them elsewhere as the first hipsters–were performing poverty. They were often walking around, for example, barefoot even though they were from wealthy families and could afford shoes. This barefoot act in particular was a symbol of their poverty. I’ve written about other things associated with this aesthetics of poverty. When they arrived in the Americas, they met the Amerindians–people who were scarcely clad, often without shoes, having as they saw it, minimalist diets. They got out povertied. There’s a tension in the writings about the Amerindians. This fuels their eschatological vision that they need to share this holy poverty and convert the real poverty of the Amerindians to their holy poverty. Then, for them, this will be the pathway to the final age before the coming of Christ. It is a very messianic vision of the world, as you’d expect.

There’s also descriptions of them sometimes mimicking acts of the Amerindians that they see as closer to a more poor way of life. Going back to those ideas about use that was the preoccupation of Peter Olivi in the late 13th century, yes, you can have this, but you should not use it, you should only use what you need. So there’s a lot of mimicking the Amerindians in certain places of the mission. This meaning of poverty and how it’s represented is debated and played with in these early missions. I can’t remember the rest of the question that you asked me, unfortunately. 

William Saas: Oh no, I think you answered the original question. I’m really glad that you offer the analogy with hipsters, because I’ve been, regarding the spiritual friends, trying to put together my own historical analogy between the spiritual friends who are charged with holding the money and keeping the Franciscans clean and free from corruption, and the modern austerity theater, or performance of poverty, that happens institutionally in a country like the United States that is sovereign in its own currency. We identify social needs, but rather than answer those immediately with public provisioning of money, we go to our own spiritual friends at the Congressional Budget Office and say, “Is this okay? What moral and political consequences will this have for us if we do this?” I am wondering, in terms of the spiritual friends, and this is a bit of a detour but we’re circling back in a way, what was their social status or standing? Did they have any kind of accounting role? Were they overseers of the coin that they held? Is this historical analogy that I’m trying to draw completely reckless?

Julia McClure: Not to avoid the question completely, but this idea of the laundering of ethical issues of late stage capitalism, I don’t think would make the analogy with the Franciscan spiritual friends. But I had a project last week with the Tax Justice Network and we were looking at the role that philanthropy, charitable institutions, and tax breaks have done in the name of anti-poverty legislation. Wealth accumulates in charitable institutions. This idea of the spiritual friend is a particular historical moment in the 13th century, and then it falls away. When they’re in the Americans, you don’t have this kind of continued performance of a spiritual friend. But there’s still a separation of the money that they own and what it’s for, but that’s because it’s invested in charitable institutions. These charitable institutions, I argue, in the monograph that I’m writing now, Empire of Poverty: the Moral Economy of the Spanish Empire, constitute the institutional landscape of the empire. These institutions are where that money’s being held. This point about how comparable Franciscanism is in relation to today’s austerity, I have an answer to that question, but it comes later. With regards to the spiritual friends, it is a performative and experimental thing that doesn’t really outlive the 13th century as far as I’m aware. A lot of these things fall away when certain aspects of Franciscan claims get revoked, if that makes sense. If they no longer can say that they own those things, then that becomes less of a theoretical burden.

Scott Ferguson: I’m curious to hear you talk a little bit about the kinds of theological, political, and juridical justifications that the early modern Franciscans used to make sense of and essentially hasten and excuse colonialism and colonial subjugation in relationship to these matters of poverty and charity. And then, something you don’t talk about in your book, but we’ve discussed between the two of us, can you discuss any related explanations that are also mobilized to give justification to chattel slavery?

Julia McClure: I know I’ve started every sentence here with, “Well, it’s ambivalent,” and there’s different roles and interpretations of the Franciscans, but with regards to the justification of colonialism, members of the Franciscan orders definitely had two different impacts, let’s say. One would be in conjunction with other mendicants, especially Dominicans like Francisco de Vitoria, or perhaps more like Montesinos, in denouncing the colonialism of the conquistadores. Throughout the history of colonization, the post-colonial period, and the crimes of neoliberalism in Latin America, you get mendicant orders who are denouncing abuses of power, violence, and making claims about the rights of indigenous peoples. That’s a strong part of the role that the Franciscans have played historically from the 16th century and continued, one might argue, into the theology liberation movement in the 20th century.

I’ve got a chapter called, “The Darker Side of Rights: the Ambivalent Case of Franciscan Poverty,” in a book called, Rights at the Margins, that has just come out. And this is similar to arguments that have been made by others, in that when you make certain claims about rights and legitimacy and justify colonial conquest, you’re effectively whitewashing empire and providing a framework for legitimizing that empire via the discourse of rights and law, which are not necessarily protecting people from abuses. So that’s one thing. They’re defenders, but then that’s also not necessarily having the desired effects if their desired effect is to protect the proper rights of indigenous peoples.

The second thing, which I think is the thing that you’re more interested in, is that, coming from the Franciscan tradition, there is an idea that suffering is a pathway to salvation. This is one of the things we’re going to come back to discussing with regards to whether or not this an origin for austerity economics. I have an answer, I think, on this question. But this idea of suffering for salvation is interesting, because they’re rhetorically rejecting the violence of the conquistadores. They have these missions, which have their own form of colonization, of course, because they are engaging with the europeanisation through christianization of indigenous people. This is epistemicide, which is the destruction of ideas and cultures of indigenous peoples, as well as the manipulation and oppression of indigenous bodies and appropriation of labor and other forms of resources. All this happens within the space of missions. But I think there’s something else that’s interesting that goes on, which is about this discussion of poverty and what it means to be poor. Within the Franciscan tradition, there’s always been this idea that to abdicate from possessions is a better position to be in. You can be closer to God, effectively. If you’re already materially poor, that doesn’t mean that you’re spiritually poor, but you might get there faster than somebody that has got to give up their possessions first.

When they see the Amerindians, there’s an ascetic branch of the order that sees the subjugation of the body as a source of freedom. Before I make the quotation from him, Angelo of Clareno gets called a heretic for being too radical during the medieval periods. But he argues, “He, who frees himself from earthly desires from the bottom up, who wants to be free from the body, and wants by means and punishments and torture to cross over to Christ, who bore the suffering and the death of the cross for us when we were the enemies of God and servants of sin mostly meriting eternal death.” And so, this Christian paradox that suffering is the pathway to salvation is particularly strong in the Franciscan tradition. Within the Franciscan’s ideology of poverty was a particular idea about obedience and humility. It’s the idea that not only should you get rid of your things, but also that you should get rid of your will to want things, and that actually, you should get rid of your will to power for complete powerlessness. Nobody should want to be a leader because that’s a will to power. To be a true Franciscan, you wouldn’t want that to be a spiritual condition. You can see where this is going. Some of the more radical asceticism gets condemned as heresy with the burning of four spiritual Franciscans at the start of the 14th century, but you have, nonetheless, ascetic branches of the order that remained.

But also the ideas about humility and obedience remain as important values. I think that the idea that suffering is virtuous, that to be without is virtuous, and that obedience is virtuous, are all there in terms of a framework for justifying colonial subjectivity. On the one hand, there is a denunciation in the Franciscan’s intellectual contribution to the history of law and rights, but also in looking at the religious history of the Franciscans about this suffering and salvation, which is not unique to the Franciscans, but part of the Christian paradox and ideas about humility and powerlessness. Coming back to this idea about money, they also saw labor as virtuous. And so, to labor without monetary reward, was also virtuous. Again, in terms of what their contribution could be to coloniality and colonial subjectivity, yes, they are vocal critics of the enslavement of the Amerindians, but in terms of other forms of oppression, such as to labor without pay and be obedient, that’s also seen to be something virtuous.

Within the sources of our Franciscan history, they are also playing creatively with the language of slavery. They denounced the conquistadores as slaves because they’re slaves to the sin of corruption and greed, whereas they see the Amerindians as more free because of their poverty. So there are ways in which they’re denouncing slavery, but also perhaps finding ways in which subjugation is virtuous because it’s a form of complete humility. There’s a biography of St. Benedict who was born to the parents of people who had been enslaved in Africa. He was born in Sicily in the 16th century. The hagiographical story of St. Benedict goes that he was so pious that he gained his emancipation. Then, after emancipation, he voluntarily chose to re-enslave himself by joining the Franciscan Order, which is a voluntary renunciation of possessions and a voluntary selection of a pathway of humility and obedience and abdication of possessions. He has a quite crazy hagiography. He dies and is buried near a Franciscan monastery. They exhume the body, later for reasons that are unclear, and it looks like the body’s uncorrupted. This is one of the classic miracle stories. The relics get taken on parade to Madrid.

Lope de Vega writes a play about this black saint who had been a Franciscan, who actually was sainted later. He wrote, “To be black, to be humble, and to be a saint, were closely connected.” Then, what happened in the 16th and 17th centuries, is that the Franciscans were also supporting the emergence of daughter institutions, let’s call them, that were confraternities amongst all people across the Americas. And those that were founded by predominantly black communities, with people who were enslaved and free, often had this saint as their patron saint of the confraternity. That’s where there’s a whole history of slavery, and what role they played in justifying it, ties up, because they’re thinking about voluntary acceptance of a form of enslavement, denial of will and possessions, as a righteous way of being. I think that there’s something important to this in terms of what’s given value within a broader framework of colonialism. So in addition to colonial subjectivity, there is something to say about slavery.

Maxximilian Seijo: To this composite theological vision you’re playing out and describing, without taking too clean of a knife to compose a narrative, there is something to, and ultimately why I think we’re really taken by this history, this construal of money as the source of all evil, as this material thing that you can’t touch, and this affirmation of enslavement as a relationality to the structure of thinking about austerity as, ultimately, you need to take austerity on the chin, because it will be good for a moralized argument–and not wanting to spend too much by risk of moral hazard. I think we see links, at least analogously, not to imply this as a direct causality, to the structures of thinking that are at work in this tradition of thought.

Julia McClure: I have a comment on whether Franciscanism is connected to the origins of austerity. Should I answer it now?

William Saas: We’re ready.

Julia McClure: I’ve written about this in different parts to a certain extent. The idea that one needs to suffer to be saved and that there’s a pathway to salvation is part of the legitimation of the narrative of the program of austerity. I think we see this not only in the state programs of austerity, but also especially in programs of international development and the role that institutions like the IMF play. Joseph Stiglitz writes about this in his critique of all these processes of globalization and its discontents and the way in which poorer countries are, via austerity, made to suffer in order to be saved. On the one hand, you can say, well, this has a genealogy in the Western tradition via Franciscanism. And in the history of suffering as a pathway to salvation, one could say that it’s in the background to the history of austerity.

But I think that it’s important to remember that there have been different ideologies of poverty, and not only the Franciscan one. Poverty has always been a political and cultural construct, as well as an economic condition, and one that changes over time. And the origins of ideologies of poverty, such as with austerity and its role in the history of capitalism, have continuously been part of historic debates. I was thinking about how these have been particularly confessionalized in the past Catholic versus Protestant debates. This, to a certain extent, can be traced to Max Weber, who famously identified Protestant parsimony as the spirit of capitalism rather than the Franciscan disdain for mammonism, although work has been done more recently by Giacomo Todeschini on the Catholic origins of capitalism. So there is a confessional debate about the origins of austerity within capitalism.

But I think that it’s important to note that there are different historical genealogies of poverty as a political project. The poverty politics of austerity is against the lives of people with the aim of economic growth, again, coming back to this idea of what’s value for, how do you justify it, and what’s action for. In the case of austerity, the ultimate endgame is economic growth. If this kills a few people along the way, and people do die as a result of austerity politics and the poverty it causes, then that does not seem to be so problematic to the protagonists of neoliberal austerity. And this is not an apology of Franciscanism. I’m going to flesh it out a little bit more in a moment. But one could argue that Franciscan poverty was orientated towards sufficiency, the idea of reduced consumption, and the purpose of the common good and ecological survival

You could see Franciscan poverty as more of a precursor for post-growth and degrowth economics than the politics of austerity, which is more against life in favor of economic growth. I think that austerity is a big problem and that it’s been a tool of late stage capitalism to both impoverish and oppress the poor. And poverty under austerity has a particular aesthetics. It’s constructed as a form of alterity, which is a stigmatized identity. The way to avoid that aesthetics of poverty is by the increased consumption of commodities. That’s why I think that the genealogy is slightly different to that of Franciscan poverty politics. This idea that you need to suffer to be saved, which is part of the austerity program of governments and international development, has resonance with the Franciscan doctrine of poverty, including its asceticism, its aesthetics, and it’s theories of eschatology of what’s necessary to do now and to change the future, but nonetheless, historically, they have two distinct genealogies.

Actually, I was thinking about this in relation to my current book project, which is on the 16th century and poverty politics in the creation of the imperial state of the Iberian world. This is important because, in looking at these different distinct genealogies, it points towards the need to look at more granular conceptions of politics and their particular protagonists in different contexts. I think the concept of austerity is the product of a liberal state formation. Karl Polyani traced the emergence of poverty as a subject of political economy in the 18th and 19th centuries. Since then, poverty has been central to the political projects of liberalism, and later neoliberalism. In my work that I’ve done since the Franciscans, I’ve been tracing this birth of poverty as a political subject distinct from the Franciscan tradition to the 16th century. What’s interesting there is that you have the emergence of states that are thinking about poverty and making distinctions about the deserving and undeserving poor, the rationing of resources of what should be distributed in ways that benefit state formation, and that are also criminalizing poverty, which again, is part of austerity. You have this means testing of the poor, the creation of poverty, and then also the criminalization of poverty.

There’s also been interesting work done on the way in which that gets racialized as well. In the 16th century, the mendicant orders were actually questioning the new poverty politics emerging within the new iterations of states. With the poor laws that came out of the Iberian world and into the Elizabethan laws–although the Franciscans, of course, would not have been critics in Elizabethan England because they were Catholics and wouldn’t have been allowed in–but in the Iberian world and the Catholic world, these mendicants were opposing the poor laws that emerged in the Habsburg Empire, and the ways in which they oppressed the freedoms of the poor, especially their freedoms of movement. So I’d argue that as modern states developed, they didn’t coopt the poverty politics of the Franciscan Order. Often, the mendicants were in opposition to the ways in which states treated the poor. We can see this in the history of the emergence of the liberation of theology movement in the 20th century. We started with this point that the need to suffer to be saved resonates with austerity, but then perhaps, there’s these two different genealogies.

Scott Ferguson: Thank you so much for joining us. It’s been a pleasure talking to you.

Julia McClure: Great, thanks for having me on.

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).

Historicizing the Neoliberal Blockbuster (Preview)

This Money on the Left/Superstructure teaser previews our second premium release from Scott Ferguson’s “Neoliberal Blockbuster” course for Patreon subscribers.

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Course Description:

This course examines the neoliberal Blockbuster from the 1970s to the present. It focuses, in particular, on the social significance of the blockbuster’s constitutive technologies: both those made visible in narratives and the off-screen tools that drive production and reception. Linking aesthetic shifts in American moving images to broader transformations in political economy, the course traces the historical transformation of screen action from the ethereal “dream factory” of pre-1960s cinema to the impact-driven “thrill ride” of the post-1970s blockbuster. In doing so, we attend to the blockbuster’s technological forms and study how they have variously contributed to social, economic, and political transformations over the past 40 years. We critically engage blockbusters as “reflexive allegories” of their own technosocial processes and pleasures. Above all, we think through the blockbuster’s shifting relationship to monetary abstraction and the myriad additional abstractions monetary mediation entails.


2001: A Space Odyssey (Stanley Kubrick, 1968)

Jaws (Steven Spielberg, 1975)

Star Wars (George Lucas, 1977)

RoboCop (Paul Verhoeven, 1987)

Toy Story (John Lasseter, 1995)

Jurassic Park (Steven Spielberg, 1993)

The Matrix (Wachowskis, 1999)

Avengers: Infinity War (Joe & Anthony Russo, 2018)

Money as a Constitutional Project with Christine Desan

The Money on the Left Editorial Collective presents a classic episode from our archives along with a previously unavailable transcript & graphic art. In this episode, we are joined by Christine Desan, Leo Goettlieb professor of law at Harvard Law School to discuss her excellent book, Making Money: Coin, Currency, and the Coming of Capitalism. Desan argues that money is a constitutional project, countering the dubious “commodity” theory common to contemporary economic and legal orthodoxies. Desan develops her constitutional theory of money through rigorous historical examinations of money’s evolution, from medieval Anglo-Saxon communities to early-modern England to the American Revolution and beyond.

Theme music by Hillbilly Motobike.

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Scott Ferguson: Christine Desan, welcome to Money on the Left.

Christine Desan: Thank you.

Scott Ferguson: It’s great to have you here. Can you tell us about your scholarly training and intellectual influences? Do you situate your work within a particular school or tradition within legal studies?

Christine Desan: I think I do situate my work within a particular school. I’m probably most closely affiliated with critical legal studies (CLS). For me, that affiliation began when I was in law school. I took a course called “Death of the Law,” which was taught by Owen Fiss and Tony Kronman at Yale Law School. It explored the difference between liberal approaches to law and the critiques of liberalism that were developing in the late 1980s. The seminar was formative for me because, on the one hand, Fiss and Kronman were deeply invested in the liberal project that was a rights based defense of progressive social change–and I was sympathetic to that project. At the same time, the critiques that they wanted to understand were more persuasive to me. Those critiques were mainly based in critical legal studies, and to a lesser extent, in some allied approaches, such as the normative work of Robert Cover.

The CLS critiques really evoked for me an older influence, which was social theory and cultural anthropology. I had studied that work as an undergraduate when I majored in religion and sociology of religion. I would say, going way back to that moment when everyone was taking the cultural turn in the earlier 1980s, I was thinking through that work, which was itself critical. This is work that taught us the complexity of reason and knowledge–the kind of layered nature of those conclusions and practices, or the way they depend on different strata of learning, contexts, assumptions, and experiences. Later in law school, when I stumbled into this course, it seemed to me that critical legal approaches were in some ways developing those earlier insights and applying them in the legal field. So that set of approaches was very influential for me.

Later, I started doing historical work. When I did historical work, I found the early institutional historians of the 20th century really fascinating. I thought their work was very important. This was a set of historians whose work in many ways had been set aside in the late 20th century as people were more interested in, and following themselves, the cultural turn–they we’re doing cultural and social history. I was finding that with earlier progressives, people like Beard and later people like Jackson Turner Main and Jack Green, who were fascinated by the importance of institutions and the way practices within institutions changed, their work illuminated power structures in a way that I wanted to understand. The institutional histories of the 20th century became a place for me to learn and explore power structures. People in the 80s and 90s were also doing a lot of interesting work about ideological history. And so, for me, the practice of authority within governance structures became a focal point. I wanted to be able to use both institutional and ideological histories to understand this practice of authority.

William Saas: Thank you. I wanted to ask, given the narrative of your intellectual history and the fact that you sort of arrive at an interest in authority structures and the role of institutions, it’s not so surprising that you end up at money. But it probably is a little bit surprising, I’m guessing. Was it a straight line from that interest in institutions to money, or what brought you to the question of money?

Christine Desan: It was not at all a straight line. I think I spent a lot of my life avoiding money. That is to say, I spent a lot of my life–and I think I’m not alone in this, I’m in very good company–avoiding the economy. I was someone who really thought that the economy and commercial matters were not as important as other human drivers of experience and existence. I was more interested in other aspects and was kind of emphatically avoiding economic and monetary matters. In some ways, I think, this is a disciplinary instinct. Many of us went to law school or went to history graduate school in order to avoid going into economics, or going into some other field that was focused on commerce, trade, or finance. In the early work that I did, I remember skipping the references to money. I was doing historical work on early colonial legislatures. There, I kept tripping over these references to money. And like many historians and legal scholars, I kept skipping them because it seemed like a technical detour, and one that I didn’t really understand. I also didn’t completely appreciate that they were spending so much time arguing over this technical detour, so I kept skipping it.

Belatedly, I came to the recognition that legislators, commentators, and lay people who are arguing over power and authority and making claims–all of the things I talked about when we try to understand how law works–they were always talking about money. Money was all over the records that I was looking at. I realized I had to confront and face it and that, in fact, it would be the way into the market for me. When I spoke about property and how critical scholars want to understand property not as a kind of one off concept that you either have control of or you don’t, but as some kind of complicated, negotiated phenomenon, I wanted to do the same thing with the market as a whole. Instead of assuming that it was just a natural entity or something that was somehow clear, universal, and rational, I wanted to understand it. After having avoided money for several years, I realized that money was actually the way into the market. If I could understand the way money worked, then I would basically be understanding the medium for the market. It seemed to me that maybe money was the institution that would allow me to understand the market as a legal project and to take a critical approach to the market itself.

William Saas: Was there one moment, text, or set of ideas you encountered that really made it most clear to you, or was it more of a gradual realization?

Christine Desan: Yeah, there was an arresting moment. I did all this work about early America while avoiding money but immersing myself in the discourse and the way people were speaking about governance. Then, about a year later, I started looking at the famous late 18th century debates between Hamilton and Madison. Here, I realized that the whole discourse of governance had changed, or was changing, and was dramatically different from the way that people had been talking 100 years later. The grounds of their debate and the change was monetary. The way that people were talking about the market was dramatically different. That was the moment where it struck me that I had to understand what money was as an institution. I really desperately wanted to understand what had changed and why the debate was so different between the early and late 18th century. And just to get to the punch line, it turned out that they were basically debating, in my view, the transition to capitalism. Hamilton and Madison were right on the cusp of a new approach to money and the monetary as a mode of governing. By contrast, their peers in the early part of the century had been talking about money in a completely different way. They’d been working towards a different form of governance around money–that is, money as this medium was creating for them a different kind of governance experience than it would be for Madison and Hamilton. So it was very arresting seeing the difference in the character of their discussions about money.

William Saas: While it was arresting, how did it feel, given the common experience of a lot of people having studiously avoided money for so long, coming to the realization that, “Oh, no, this might be the key to what I want to do?” How did that feel and what was the next step that got you doing what you wanted to be doing?

Christine Desan: It’s such a great question. It felt like falling into a black hole. It felt really scary. It was frightening because I really did not understand their debate. And I understood that I didn’t understand their debate. It has been a series of black holes ever since. I spent probably four or five years trying to understand the early American transformation. After that time, I thought, I really can’t understand what money is. And so, it was another cliff that I fell off and I went even further back to try to understand what money was in the English experience. I really felt like I couldn’t understand what the colonists were actually doing. I wanted to understand where they got their ideas from. I had figured out some things about money and had more reference points. I had a compass by then, which was a little bit of a comfort, but the compass was taking me further back. So yeah, there were a series of cliffs that I fell off. But, on the other hand, I was so fascinated and became more and more convinced that these were extremely important debates and that people like me had been ignoring them for years. At the same time, other people who I wanted to understand, like Madison, Hamilton, and their predecessors, had not been avoiding them. They’d actually been focusing on monetary matters.

Just to leap forward, I think that’s also part of a historical transition. I think we’ve learned to ignore money and that that’s an important part of our current modernity. We’ve learned to ignore how it actually operates. We worry about it, we obsess over it as a thing, but we don’t try to get inside of it and understand it. Whereas, in earlier generations, people did actually try to manage, understand, recreate, and reimagine money more than we do. So all those people who had been immersing themselves in money and money creation, they were kind of an invitation to me. In trying to understand money, they were at least an inspiration that I should try to retrace their steps and figure out what they were arguing about.

Maximilian Seijo: So let’s dig into it. In your book, Making Money: Coin, Currency, and the Coming of Capitalism, you do just that. You argue that the 17th century sees a revolution in money’s design that obscures its underlying social structures, or institutional and constitutional power. I am wondering if you could sketch that history for our listeners and explain why it’s so important to discern?

Christine Desan: Yeah, so the book really does try to tell the story of this great transformation. It argues, basically, that money can be designed in different ways, that communities have designed it in different ways, and that politics and social life change with those changes in design. In a nutshell, at the end of the 17th century, and in the 18th century, the British improvised a series of changes in the way their money worked that put private investors in charge of money design and that change had huge ramifications. On the one hand, it broke through old constraints on the amount of money in circulation. At the same time, it elevated the rights of creditors in new ways. And that really restructured governance and the economy.

Just to dive in and clarify why we could understand this as lawyers and historians, money, it turns out, really is a contract. It’s a kind of credit contract. And contracts for credit, for things owed, can be made in different ways. The reason money can be designed in different ways is that you can make an agreement to pay in different ways and with different conditions and characteristics. And changing that kind of monetary contract is what communities do when they’re redesigning money. To get really specific, what the book does is take a trip back in time to understand early kinds of money as a contract and then compare them to the new modern design. The early design, the design that’s kind of iconic and that we all think we understand, is commodity money, or the silver penny. I thought I really needed to understand what the silver penny is because, according to economists, it’s just a thing. It’s a slug of metal that has value because it’s silver. Intuitively, that seems so appealing, but we’ve not asked whether that’s really what a coin is. In fact, when I dove into it, it turns out that is not the way coin works. The fact that it contains silver was only one of its characteristics and not the one that made it operate particularly as money. Maybe I should just tell a story about how silver pennies got going. This story, I hope, will make it clear about how money operates, and then we can play with the story and make it modern.

The old story goes something like this: there are communities in which everyone’s contributing. That’s how they survive as communities. We have labor that everyone contributes to the center and, let’s say, everyone gives a day of labor every month. At a certain point, the community faces some kind of emergency where they can’t just rely on the routine contributions of the ten or so people who happen to be on call that day. Instead, they have to enlist more people to work that day to repair a dam that breaks or repel enemy invaders. And so, they enlist all those people. When the enemy’s repulsed or the emergency is over, the stakeholders for the community give those people who worked early before their time of contribution, who contributed their labor before it was actually due, a token or an IOU. This token or IOU says that we recognize the next time we come around asking for your contribution, you’ve actually contributed early and you can just give back this token. It will represent your contribution and we will accept it as such. That kind of IOU is now a unit that holds value that everyone recognizes, which is the value of the tax contribution given early. One more twist makes it money, which is if the stakeholder will accept that token back from anyone, then the people who contributed their labor early can use it and trade with each other. It represents a certain amount of value, which is the tax contribution. Everyone is willing to take it because they can use it themselves to pay off their taxes.

This story, which I’ve told before, and for people who’ve read the book, they’ll recognize it as the stakeholder story, explains money as an IOU given from the center to people who have contributed their own labor early. And they’ll also see that, if you have these kinds of tokens and you allow them to travel between individuals, then people can use the token as a medium of exchange. In the medieval world, pennies functioned in that way. The question then becomes, why would you make this token or IOU out of silver? It turns out there were many reasons. In a primitive and sort of rough world where there’s not a lot of administrative capacity, to make money out of silver was durable. You don’t have to worry about it falling apart while people are holding it, which is something that would make the people who had contributed early very unhappy if you gave them a token that then fell apart, such as one made out of wood. It was also hard to counterfeit. For people who had the silver, it wasn’t easy to refine or to mint, and only the authorities at the center who could control the mints might have that capacity in order to control the number of tokens out there. And finally, you actually had created a token that contained collateral. People had something with value that they could trust more than they might if you just gave them a written promise.

When we actually think about how money came about, or the incentives for a public to make money and for people to hold and pass around money, we sort of flip the story of the penny. Instead of the penny existing because it is silver, we have silver acting as collateral for a money that actually comes about first for a kind of credit agreement with people. If you think about that kind of money design, it makes sense of many things, like the control of medieval sovereigns of the mint and their claim over money. It also makes sense of conditions of the market. The market was a difficult and not very liquid place in which money was hard to come by because silver was hard to come by. We can also understand other things. For example, and this book tells this story at more length, the mints had this very interesting capacity in which they’d actually charge people for money. The king of the sovereigns could set up a system in which they are actually taking silver for people and creating coin for them. You could, in other words, buy money at the mint for all the kinds of exchange you wanted. You could buy coin for private purposes as well as buy the kind of coin you needed to pay your tax obligation, because increasingly kings were going to tax in coin and not in kind or in labor.

We could talk more if you’re interested about this old world kind of money, but the point is that it was a very carefully structured system of political obligation in which sovereigns had converted in kind political obligation into tokens that were made in a material that was durable and hard to counterfeit and provided people with collateral, and even allowed them to buy more money at the mint for their own private use. It was a very interesting, sophisticated system. I’ll add one other thing: sovereigns also supported this system by enforcing deals made in money insofar as they agreed with those deals. Common law, or the law of contract, property, and torts, were forms of public enforcement made in money. The early English common law only enforced contracts that were monetary. The early Roman law enforced contracts that were monetary. So you could pay off a debt only in coin–not in silver. An interesting part of this is that sovereigns are actually writing their own systems for law and order into their agreement to enforce obligations for people. I could go on about that, but it’s worth noting that the law we think of as kind of existing on its own terms is actually written in the enforcement of money. So as money penetrates society, that is the channel that sovereigns are using to determine which things they’re going to enforce and therefore write their own system of order into the social world.

Maxximilian Seijo: This is such an interesting story because in your book, you then tell the story of how the public institutional construction of money gets reinvented in a way that eschews its public origins towards private commerce origins. I am wondering if you could talk about the specific moment in which that reinvention happens and how it skews production in favor of the profit motive as opposed to broader public social processes?

Christine Desan: This is the critical moment, in fact, and now that we have an example of the way money works as a contract, we can see that it could be made of anything. We’ve talked about why societies in early worlds might make it out of silver, but really there’s no reason that money would have to be made out of silver. Many different communities have made money out of many different materials, as you know, such as with shells, paper, wooden sticks, and all sorts of things. What the English do, as one of these series of experiments, is decide to make money out of the promises of investors. The catalyst for this new monetary adventure is war. In the 1690s, the British were fighting against the French, as they often were in those days, and the government was very short on funds. The silver currency was going through one of its usual periods of disarray. Often, silver coin, which seems so stable to us, is actually a really hard medium to keep in circulation because it wears down and people begin to hoard or export it. And so, the British were experiencing all these problems in their silver money supply at the end of the 17th century for various reasons.

Then, the British government decides to experiment. It agrees with a set of wealthy investors to take their promises. It invites them to lend to the government 1.5 million pounds and it will pay it back over a long period of time. The kicker or innovation is that the government agrees to take the 1.5 million pounds from the investors in written promises to pay–in banknotes. And those banknotes promised the bearer silver. So instead of the government needing to have silver, the wealthy investors would have the silver. They make the contract, the bankers hand over the 1.5 million pounds, mostly in banknotes, the government spends the banknotes, and then at some point in the next years, it starts taking back the banknotes in taxes. If you think about it, the government really has to take back the banknotes because it spent them. It has to stand behind them and recognize them as valuable just as it paid people. It will accept the written promises of the bank back in taxes, but once the government does that, it has set up the same kind of credit issue and credit redemption that it set up with the very first tokens, and in turn, with coin. It has set up a loop of credit in which it’s issuing a unit de facto and taking back a unit. In other words, it’s created money without using silver or gold.

The striking thing here is it’s not clear the British understood exactly what they were doing. People had theorized different bits and pieces of it. But what’s not clear is if they realized that if they set up such a system, then nobody really needed to cash the banknotes, because the banknotes held as much value as the government would give for them as long as the government was taxing, was a serious, viable government, and people had to pay their taxes in something. They might as well pay it in paper as in silver. There was no need to go to the bank to cash the money. So this is an amazing moment where we see this innovation, which is de facto the government creating credit money out of paper through the intermediary of a group of investors in a way that will liberate the government to spend much more paper into circulation than the amount of silver coin that is in existence. The other thing that’s striking about this moment is that there’s no reason you actually need the investors in the middle of the relationship between the government, its taxpayers, and its citizens. In fact, at the same time that the government is borrowing from the Bank of England, it’s also experimenting with just direct issue bills, where it spends English money into circulation and taxes it back. With both of these things, whether you spend the government’s promises into circulation and tax them back, or you spend the bank’s promises into circulation and tax them back, the government’s basically supporting and creating money that depends on its own credit loop.

Yet, the system that takes off, for many different reasons, is the bank structured system, perhaps in part because the government finds it useful to assimilate and channel the legitimacy of the investors who nevertheless are holding a silver reserve, and perhaps also because the investors are a politically powerful group who find this to be a really lucrative profit making opportunity. And so, over the 18th century, the English basically started developing this relationship with this group of investors who are the Bank of England. The Bank of England is the first really robust national bank that issues what becomes the everyday currency, although it takes a long time. At first, there are only large denomination bills, but over time, the Bank of England will be issuing the money that becomes the English paper sterling. And there are many governance changes we could talk about that are wrapped up in this innovation. For example, the government is for the first time delegating its public power, or its sovereign monopoly over money creation, to investors who will make decisions about when to issue money. Those investors will also have the incentive to police taxation, so they’ll be pressing the government to tax in a disciplined way in order to get repaid. It’s the bank investors who will now profit from this funding technique that allows them to issue many paper promises on a much smaller silver reserve. Anyway, what we’ve done is see that the government, working with wealthy investors, have created an intermediary, a set of creditors, who will now intermediate the relationship between the government and taxpayers.

Scott Ferguson: In your book, you triangulate this revolution in money’s design, this story of political economy, between, on the one hand, an emerging liberal philosophy by the likes of John Locke, probably Newton, and others, and on the other hand, with a specifically legal story centered around this case of mixed money. I am wondering if you could talk about those two poles of this story?

Christine Desan: John Locke’s intervention into this moment of experimentation exposes in a really valuable way the changing philosophical bases of money, the market, and the economy. That is to say, he shows us how the old way of making money and the new way of making money are based on and perpetuate very different ways of thinking about the market and the economy. To leap to John Locke in particular, what he articulates and captures about the new method is that it’s based on the notion that individuals determining their own profit will be, in his view, the best agents for the economy and are the way to understand the economy. That is, we should understand the economy as an aggregation of individuals acting for their own profit. The reason that he comes to encapsulate this view is that he understands money–when you go back and look at his work–as something that people all converge upon for their own interests. Let me just connect that to the new monetary form and then we could talk more about Locke and the specifics about the way he tells the story.

Now, if you think about the new institutions, the device that is supposed to run, this new money making machine, is based on an individual incentive to profit. In particular, the investors have the incentive to lend to the government for their own profit. By calculating the amount that they’ll benefit, they’ll determine how much to lend to the government. So instead of thinking about money as something that is a public medium which the sovereign is controlling, we’re now thinking about money as a medium in which the device that’s calibrating the supply will be the incentive of investors to create money when it’s beneficial to them. This is a very unusual way of thinking about money, or thinking about individual profit, because, as you know, in the medieval world, usury, or making money for profit and making profit on money, was considered a vice and a sin. Greed was a sin. It was the office of the church that tried to suppress human motivation for greed and self serving profit. 

By contrast, and what seems to me so important in terms of understanding the governance aspects of this, what the British are doing is they’re institutionalizing the motive for profit and individual self interest at the heart of a public project, which is money making, and they’re understanding that incentive as therefore beneficent. Instead of identifying self interest and the drive to self interest as a sin or as a problem, they’re identifying it as a benefit. You can also see this in the era more generally. Another kind of monetary move that they make that’s very closely related to this is they’re creating circulating public debt. They’re convincing people to lend to the government for their own profit. And so, they begin to issue public bonds. And the way public bonds work is that anyone who lends to the government will be creating a public good, because they’re lending to the government, but they’ll also be doing that for their own profit, because they’ll get interest on the public bond. Now, that’s before sovereigns had borrowed from big financiers, but they hadn’t tried to popularize the incentive to act for your own interest. And they hadn’t identified that as something that would actually be beneficial to the public. So they’re kind of identifying public good and self interest.

This is all to get back to Locke, which is to say, he understands self interest and the drive to individual profit as something that can be beneficent and can act as a driver in the aggregate of good things. That’s how he understands money in the economy. It’s a way of thinking about the market as private decision making that, when practiced collectively, will lead to good outcomes. And part of what’s fascinating to me is that this new theory about the way the market works really emanates from these institutional experiments as well as other influences that allowed us to get to the institutional experiments in the first place. But the institutions, if you see what I’m saying, are actually creating practices that invite theories that really change the way we think about profit or change the way that early modern thinkers considered profit and greed. It rehabilitates them, if you will, or habilitates them for the first time. By contrast, in the earlier world where we had commodity money circulating, there’s no group of private individuals who have a controlling interest and whose interests are themselves driving the system. Instead, we have the sovereign and public officials tasked with making determinations that are for the good of the whole.

I don’t want to idealize or romanticize the medieval world. It is not a democratic, populist order by any means. But the way people are understanding the sovereign’s role is that the sovereign should act, maybe for religious reasons in terms of divine right, for the good of his realm and the people in it. That produces a different way of thinking about money and the market. You asked about the case of mixed money, that’s a case in which the decision makers in the court faced and articulated this different kind of theory. In particular, what happens in worlds with coin is that sometimes you have to expand the money supply either because money has worn out and it needs to be re-minted or because there’s some kind of, in this case, military demand and sovereign’s want to greatly expand the money supply. My point is that the way you recalibrated a money supply that was metal was by changing the amount of metal in the coin. Usually, that meant debasing it, or diminishing the amount of silver in the coin, either to get all coins to be backed with a certain amount of silver in them, or because you wanted to create more coin to pay for military expenses. And while we might not think military expenses are in the public interest, and certainly many of them aren’t, in the medieval world, the question that often arose was: could a sovereign expand the money supply or change the amount of money and coin for what they consider the public good, such as the defense of the kingdom?

Well, Queen Elizabeth had done that. She debased the money supply to put down a rebellion in Ireland. This is part of the oppression of the Irish by the English. And so, the question that came up to the British court was: was that exercise by the sovereign, that refiguring of the money supply, something within the power of the sovereign? Despite the harmful ends of military action, the court confronts the issue of public power over the money supply and confirms it by emphasizing the need for the sovereign to protect the realm, to protect the money supply, and to be able to manage the money supply and create additional money when it was necessary to defend the people. What the court does in the case of mixed money is elaborate a theory of money that understands money as a contract between the people and sovereign for the public good that has to be managed in the public’s interest. And you might disagree with the ends here of the use of money, but there’s nothing in the decision about individual profit and that understands the market as an aggregate of people acting in their own self interest. Instead, it’s a decision that understands the market, the economy, and the use of money as completely for public ends and within the control of the public–in this case, the sovereign–not in the control of private individuals or creditors. So the contrast between that way of thinking about money and 100 years later, or Locke’s way of thinking about money, is really dramatic.

William Saas: Now, a critical listener might hear this story about money’s revolution in terms of these experiments, this improvisation, and then Locke’s intervention, and hear the words profit and self interest and sort of come to understand them as baked into the cake of the modern money form. And then, they may conclude that, yes, modern money is critical to capitalism, it’s somehow not redeemable, and we can’t go back to that moment where it’s serving the public. To what extent do you think that self interest remains sort of at the center of the story? And do you think that there are other encouraging ways to think about what modern money is and how it works, not just based on self interest?

Christine Desan: I think that self interest remains baked into the cake in important ways and that is not the same thing as saying we need to leave the cake that way, to play with that metaphor. Let me give one example of the way it’s baked into the cake and then maybe we’ll figure out if we would want to redo or rethink the recipe. One thing we haven’t talked about that seems important to add here is that every community I’ve looked at that makes money, they’re all different. Each time that I see money, what I see are communities creating different ways to issue credit and take it back in–sometimes through these investors and sometimes in other ways. In each case the community does that, the people who are engaging in everyday exchange want more money than the government makes for its own purposes. One thing to take away from understanding the stakeholder story is that the public is doing this for its own reasons, such as to mobilize an army in the case of Elizabeth, to build a road in a more beneficent world, or to create a welfare system in another world. The government’s working to create a medium for reasons that are publically oriented. In each of these worlds, people want to exchange with each other, but there’s not always a correlation between the amount of money that should be in circulation from the government and the amount that people want for their own uses. And so, in each of these communities, people are looking for and are working with public authorities to amplify the money supply.

In the old world, we already talked about the way they amplified the money supply, which is the mint would sell people more coin than was needed to pay your taxes, would sell people coin for silver, and people would go buy it at the mint in order to be able to make exchanges with pennies. The reason I mention this is to get to the baked into the cake point. In the new world, and that is to say once we had the Bank of England creating a money supply at the center for the government, there were a whole set of other modern banks. There were banks in the medieval world that were run by and in response to merchants that facilitated merchant trade and cleared accounts between merchants. Modern banks, however, don’t act that way. Modern banks came along sometime after the Bank of England in the 18th and 19th centuries. Joint stock banks and country banks set up shop using a model that was very much like the Bank of England’s model. In some ways, they’re echoing the logic of the Bank of England. And they would, and still do today, just as the Bank of England took promises from the government and issued promises, take long term promises from individuals and then issue notes against them, atomizing the agreement by individuals to pay back eventually. If that is a long term promise by a person, then these commercial banks would issue little notes to the people who were borrowers allowing them to use those banknotes to go off, do their projects, and pay back the bank eventually.

What I’m saying is that these commercial banks are amplifying the high powered money of the Bank of England. And the Bank of England began to support these little banks in various ways by helping them clear their accounts against each other. We won’t go into the technicalities. The point is that this kind of supplemental money that goes into circulation has become enormously important today. Probably 90% of the everyday money supply is money issued by commercial banks now in the form of deposits, not in the form of banknotes, but deposits and banknotes are the same thing. And if we think about that form of money, then it’s also built on the self interest of commercial bankers. We’ve institutionalized self interest into the retail money supply in a way that penetrates everyday life. And governments, both the Bank of England and the Federal Reserve, support that structure. We could think of the banks as delegates. Some scholars call the commercial banks franchisees of the government because they’re basically producing private money authorized by the government. They represent the dollar. This is all to say your question really goes to the core of a capitalist world in which the money supply is made through both central banks and then through a network of commercial banks supported by the central bank. 

Now, having said all that, are we stuck with this recipe? I don’t see any reason that we’re stuck with this recipe. There are advantages to the recipe. Again, I don’t want to romanticize the medieval world. But let me just point out that, what central banks and commercial banks do, is make liquidity available. They make the ability to exchange with one another through money available in new ways that have facilitated all sorts of productive enterprises. In the medieval world, you had to have silver before you could get money. In other words, you had to have capital before you could go out and do a project. In the new world, you come with a promise that you’re going to be productive and you get banknotes or you get bank deposits. And so, this new monetary system facilitates exchange and projects that are supposed to be productive in ways that have broken through old strictures and ceilings on production. I think we need to recognize and respect that and understand that there are great advantages that come with understanding that money is credit, and move beyond a world in which it was restricted by some arbitrary ceiling, like the amount of silver that people had.

Even as I try to abstract the logic, thinking about this credit money that is independent of the requirement of silver collateral attached in the old world, we can see that it doesn’t need to be attached to commercial bank calculations of profit. There are many ways to create credit and to circulate promises. We don’t need to have a world in which the only recipe for money production are the lending decisions of commercial banks. Right now, the only way that we engage money creation in the modern world is through commercial bank lending to individuals. That’s the engine of money production in the modern world. And that engine is attached to commercial bank calculations of profitability. In fact, we know that many projects that will not be profitable to a commercial bank lender would be profitable for us as a society. So I think what we need to do is think about how we want to innovate and improvise new modes of creating credit and extending credit to people outside of the strictures of commercial bank lending.

Maxximilian Seijo: Before we get to the end of this podcast, I actually wanted to touch on something that seems to be a bit of a recurring theme on this show, which is the relationship between war and money. I was particularly taken while rereading the introduction to your book last night of this quote where you have a 12th century account from Exchequer. You quote this account by writing, “Money is necessary, not only in time of war, but also in the time of peace. For in the former case, revenue is expanded on the fortification of towns, the payment of wages to soldiers, and in many other ways. And when the end of the hostilities arrived, “weapons of war are laid aside, churches are built by devout princes, Christ is fed and clothed in the persons of the poor, and the Mammon of this world is distributed in other acts of charity.” And so, what I think you’ve been alluding to, especially with the question of the cake, is that the way money is structured is both different now than it was back in the 12th century, where it was used not just for war, but for the public good in many ways–housing, feeding, infrastructure, employing, etc. But now, those aspects of money remain, the potential is there, and it remains for the cake to do those things again. This is not much of a question, I guess. I just wanted to make clear that I think what you’re saying about the cake now is so vitally important to the question of modern public governance, and your book does a really good job of teasing out the origins of those stakes. 

Christine Desan: Thank you for the question. I want to just talk about early America for a moment in response to it, because it seems to me we are still early America in many ways. When I first got sucked into studying money, when I fell into the black hole, it was in a world in which people had no money because the coin they had kept going back to England. The things they bought from England cost more than the things they sold to England, so they never had money stay on the shores of America. And so, they invented these forms of money that were not commercial banks, where they basically just created IOUs, first to pay soldiers. War is often the existential moment. If you can’t defend yourself, then you need money for that, because you won’t be around to then philosophize about other uses of money. But once they realized that they could pay the soldiers with IOUs and tax them back, which is how it started–they paid the soldiers with it, taxed it back, and therefore made a local currency–they realized they could make local currencies for their own economic development. They could really push out the boundaries of what was possible by inviting farmers to borrow from the legislature to mortgage their land and pay them back. They created these little pockets in which they’re circulating credit. 

Then, farmers could borrow in order to improve their land, make more exchange with each other, and start their own manufacturers and industry for that matter. They started understanding that, as communities, they could plot their economic development. Even in things like how much they lent to each person, they were making distributive decisions. They put a ceiling in each province on the amount they would lend to each farmer, which was 200 pounds. They thought to spread this money widely and understood that they were making distributive decisions when they taxed. They understood that they were basically engineering the way they wanted their local political economy to function and look, and that they were really building a world as they did so. And we know the end of the story. In many ways, that experience led them to understand their provinces, and eventually their entire coast, as a different world from the British world.

So in many ways, this experience of creating local money, and then trying to chart their own courses and create communities of political economic development, split them from the British Empire. It convinced them that they were a different world and different communities. And it just strikes me that it goes to the point you were making about both war and peace, because they actually innovated and stumbled into these monetary experiments because of war. But they understood quickly that they could and should use them in times of peace. Peace, economic development, and political development, were their own kind of exigency and public need. Peacetime was the period in which they could flourish and concentrate on human development. And so, it’s really an inspiring story of the possibility of creating communal flourishing, strength, growth, and productivity, and thinking outside the box, but monetarily.

This was a monetary adventure, but it was one in which people were acting in concert and collective ways with each other to try to build, for the first time, a prosperous world. They made a lot of mistakes. We know about their flaws, but we also could learn from the way they were trying to engineer their own development, and to do so in ways that went beyond the kind of commercial calculation that we have today. We have actually used money in many productive ways to build a state that is stronger, that actually understands how we need to prioritize education, infrastructure, and healthcare needs, and that there’s no reason why we can’t create money towards those ends. Understanding monetary theory and the way money works helps us enormously. Once we understand that money is basically this kind of credit loop and a public medium, and that is fraught with all kinds of distributive decisions, we can use it towards all those ends and be creative about the devices. There’s no reason that we should be stuck with one channel or one device for money delivery once we understand the way money works.

William Saas: So your constitutional approach to money, looking at it as a governance project, shares some key assumptions with a chartalist approach that’s been developed by Modern Monetary Theory, which is a theory and movement that a lot of our listeners will be familiar with. How would you say your work converges with and diverges from MMT?

Christine Desan: Yeah, I’m happy to talk about that. I think, in many ways, we’re fellow travelers. For centuries, some groups of people have understood money as an issue of credit. In that sense, for centuries, there have been what you called chartalists. Both my work and MMT are within that tradition. To me, it’s the most persuasive way of understanding money and it makes a break with the orthodoxy. Both my work and MMT approaches make a break with the orthodoxy in recognizing the critical role of the public, recognizing money as debt, and recognizing money as a public medium, ideally used for public welfare. Some areas of divergence, I think, are areas of emphasis. I am really interested in how money has been redesigned. It’s been redesigned, it’s been improvised, and it’s been engineered in many different ways in many different communities. I’m fascinated by the diversity in design. I think that monetary design profoundly affects both governance and knowledge in society. That is, it affects both the way we structure and allocate power and the way we think about what the market is. For me, there is a pre-capitalism, whether we’re talking about medieval coin or we’re talking about early American paper money. Also for me, there are many different kinds of capitalism. There are changing assumptions about human nature and about governance that seem to be intimately connected with the kinds of monetary structure and governance that’s going on. I think that is less of a focus for MMT scholars.

To give a very concrete example, there’s a lot of great MMT scholarship about the role of public debt in absorbing or expanding the money supply. That is to say, the management of public debt and open market operations are an important lever of policy in the modern world. For me, the advent of circulating public debt is a critical moment in which we change the governance structure of a community and begin to prioritize creditors, use investors as an intermediary, and basically delegate great political power to that group. Along the way, the innovation of public debt underscores and reinforces different ways of thinking about individual self interest and the way the individual connects with the government. Just as an example, I’m interested in things that are more about the kinds of governance decisions that are wrapped up in monetary design. I would say, at a technical level, MMT scholars have unparalleled expertise in current institutions of modern money. They are focusing on the prescriptive use of monetary theory. Also at a technical level, my own expertise has been trying to understand this historical change that has led us to a certain repertoire of money design. I also focus more on the legal attributes of money and why they matter. The character of money as a kind of political obligation, the aspects of monetary value that are embedded in the details of what we enforce, are what I call the cash premium. And so, I’m focusing, in some ways, on the elements of the repertoire. I think MMT scholarship is, in some ways, focusing on how to use the repertoire that currently exists and prevails.

William Saas: That makes sense.

Christine Desan: Yeah, I think it’s been a really productive dialogue, actually, between the constitutional approach to money and MMT. The last thing I’d emphasize is that these approaches to money as a kind of credit that’s circulating are ancient as well as modern. There have always been these approaches to money. People have been theorizing money for centuries. And so, we’re not the only two kids on the block. There’s a lot of really interesting work out there from ancient, medieval, and early modern thinkers who also saw money as a public medium and understood its potential. So this is, I guess, an invitation to people to think broadly along whatever lines that makes sense to them to try to understand and grapple with this public medium, because it is so incredibly important. It’s something that penetrates our daily life and basically creates material governance in our world.

Scott Ferguson: Well, this has been hugely illuminating. Can we close by asking you to talk about what research projects you’re working on at the moment?

Christine Desan: Yeah, so I have three that I’ll mention. One is an attempt really to take apart and to understand the change that occurs in a society when it goes to money. That is, it considers that first transformative moment, the moment from going to political contribution that’s made in kind to a world in which a community decides that they’re going to convert the in kind contribution into tokens and then use those tokens as a medium–going from an income world to a market based world. I’m working on one essay that really tries to understand how it changes political capacity and personal orientation to move from an income world in which everyone’s contributing equally to a world in which there’s actually money circulating, and to consider what the advantages and disadvantages are of that moment. That essay also thinks about how the law works here, how the government is actually projecting its power when it’s enforcing monetary decisions, and how it’s curating the market when it’s deciding which property, contract, tort, and damages to recognize monetarily–how it’s actually building the market. So that’s one project. 

The second project I’m thinking through is an essay that looks at the stubbornness of our myths about money being private. One thing we haven’t talked about is that we have strong intuitions that money is private. People will often mention that money comes from barter and that private exchange produces money, or they’ll mention old stories about POW’s using cigarettes as money. A recent occurrence of this kind of idea that money could be private is Bitcoin, or that maybe money can exist outside the government. I’m interested in trying to understand why we intuit money as private. I think this is because of our experience with private institutions, such as commercial banks, and the dominance they have in our society. But I’m interested in trying to interrogate that and understand what the form of our intuition is, and why we keep thinking of money as private and therefore the market as private.

In the last thing that I’m working on, I’d really like to resurrect this old work about early America. I started this whole project about early America. I mentioned that I kept falling over cliffs and ended up doing the book about the medieval and early British world. But I’d really like to go back to that early American world and finish it. There are great stories about the adventures the settlers were having in the way they tried to work out money–the conflicts they had among themselves, the things they did right, the things they did wrong, the Revolution, the Constitution, and the dramatic kinds of debates that Americans had over what money was and how they should make it. That’ll be my next project.

Scott Ferguson: Christine Desan, thank you so much for joining us. This has been incredible.

Christine Desan: Great, thank you so much for having me.

Why Do We Fall?: Introduction to the Neoliberal Blockbuster (Preview)

This Money on the Left/Superstructure teaser previews our first premium release from Scott Ferguson’s “Neoliberal Blockbuster” course for Patreon subscribers.

For access to the full video lecture, subscribe to our Patreon here:

If you are interested in premium offerings but presently unable to afford a subscription, please send a direct message to @moneyontheleft or @Superstruc on Twitter & we will happily provide you with membership access.

Course Description:

This course examines the neoliberal Blockbuster from the 1970s to the present. It focuses, in particular, on the social significance of the blockbuster’s constitutive technologies: both those made visible in narratives and the off-screen tools that drive production and reception. Linking aesthetic shifts in American moving images to broader transformations in political economy, the course traces the historical transformation of screen action from the ethereal “dream factory” of pre-1960s cinema to the impact-driven “thrill ride” of the post-1970s blockbuster. In doing so, we attend to the blockbuster’s technological forms and study how they have variously contributed to social, economic, and political transformations over the past 40 years. We critically engage blockbusters as “reflexive allegories” of their own technosocial processes and pleasures. Above all, we think through the blockbuster’s shifting relationship to monetary abstraction and the myriad additional abstractions monetary mediation entails.


2001: A Space Odyssey (Stanley Kubrick, 1968)

Jaws (Steven Spielberg, 1975)

Star Wars (George Lucas, 1977)

RoboCop (Paul Verhoeven, 1987)

Toy Story (John Lasseter, 1995)

Jurassic Park (Steven Spielberg, 1993)

The Matrix (Wachowskis, 1999)

Avengers: Infinity War (Joe & Anthony Russo, 2018)

New Laws of Robotics with Frank Pasquale

Frank Pasquale joins Money on the Left to discuss the legal and monetary politics that will determine the future of automation. Professor of Law at the Brooklyn Law School, Pasquale is author of The Black Box Society: The Secret Algorithms That Control Money  and Information (2015) as well as recently published New Laws of Robotics: Defending Human Expertise in the Age of AI (2020)both with Harvard University Press. He is a leading thinker in the law of A.I., algorithms, and machine learning and, as he makes clear in his recent book, a committed advocate for a public-money driven just transition from the current paradigm of “equality before the algorithm” to a brighter future replete with ethical, complimentary robotics. Our conversation with Pasquale covers these and a number of other surprising components of his project, including his critique of post-structuralist, post-humanist, and accelerationist discourses. There is something for everyone in this conversation–whether you’re interested in the future of robotics, the present of machine learning, the history of money, or the promise of critical theory in our post-COVID world.

See Pasquale’s latest piece in The Guardian for a sample of his recent work.

Theme music by Hillbilly Motobike.


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

William Saas: Frank Pasquale, welcome to Money on the Left.

Frank Pasquale: Thanks so much, Billy, it’s great to be here.

William Saas: We are so thrilled to have you with us on the show finally. So we’ve asked you to join us to speak about your new book, New Laws of Robotics, which is out now with Harvard University Press. To get things started, we typically like to ask guests to introduce themselves and say a little bit about their scholarly, intellectual, and personal background. Could you start us off by telling us a little bit about who you are, your training, and your research agenda?

Frank Pasquale: Sure, and I really like this question. I may even go back a little bit further than research training. Just to say that I’m someone that grew up in Oklahoma and Arizona. And part of the reason for mentioning that I grew up in those areas is because my parents were sort of the victims with a lot of the economic upheaval of the 70s and 80s. And so, when I went to Harvard in 1996, I was really interested in the idea of how economics affects people in their day to day lives. Because, growing up, I’d seen my father being laid off from the steel plants, and then working in this very precarious position delivering pizzas and in convenience stores, and then being a clerk at Walgreens, and then working up to a sort of bad position between manager and worker there. It was very interesting for me to think about. Something just so close to my mind was: how does work happen? Who gets to work? How do they get to work? What are they paid for? Those were always concerns of mine.

And this resonated in watching my mother’s career as well, who moved from being a receptionist at a car rental company to working in insurance and customer service. As I went through college, grad school, and law school, these ideas about work we’re never far to hand. I remember reading Foucault and some of the essential work he did on the panopticon–some of the classic stuff he’s always cited for. I just remember thinking, “Wow, that’s a lot like when my mom was a car reservationist and the managers could be listening to her at all times.” But they had no idea when they were being listened to–this sort of techno-panopticon. It was something that led into some of my later work on reputation and privacy in the book, The Black Box Society. I got a law degree as well. I worked in law for a few years as a clerk for a judge at a law firm and saw some of the insides of “big law,” as it’s often called, or some of the ways that large companies interact with each other and the government. Then, I began teaching. I’ve been teaching in law for 15 years. I love the job. I think it’s a great opportunity to both try and deeply understand law, to reform it, and to have the time to give impartial advice to folks in Congress and the executive branch. In that capacity, I now serve on the National Committee on Vital and Health Statistics, which has been a very interesting journey during this whole controversy over COVID-19 data. And so, that’s sort of where I’ve come from and where I’ve landed. Along the way, it’s just been a wonderful opportunity to learn a great deal about different intellectual movements, such as MMT. So I’m just thrilled to be on the podcast today.

Maximilian Seijo: Awesome. I think before we dive into your new book, we want to dig into your previous book that you mentioned, The Black Box Society: Secret Algorithms that Control Money and Information. For those unfamiliar with that work, what is the argumentative thrust of the book? And how did the book intervene in these ongoing debates about automation, when it first came out?

Frank Pasquale: It’s good to get to the roots of this book as well, because it was about my fifth or sixth year of teaching in 2008 or 2009. I wanted to write a book and was referred to some editors. My coordinating editor at Harvard University Press said, “Hey, send some ideas my way.” And I said, “Well, I’ve been doing all this work on search engines and Google. I could write a big book about search engines and just say, here’s the search engine book.” Then, I said, “But I’ve also got some side interest in privacy and financing. Here’s where I think they all come together.” The idea I had was that, essentially, more and more of our lives are an open book to large corporations and governments. But their dealings are more shrouded in secrecy, either due to trade secrecy for businesses or state secrecy for the government. And the idea of the black box society was this metaphor of the black box. Actually, the metaphor of the one way mirror is even better in a way–the idea is that they’re sort of watching us from behind a one way mirror, but we can’t see what they’re doing with our data. And so, I got really interested in that idea about secrecy and information asymmetries in different fields.

The way I divided up the book was between reputation, search, and finance. Reputation is how we are known and how the scores, and other data dossiers that are on us that we don’t know about, are being constructed. Search is how we increasingly know the world, including newsfeeds, Google, YouTube, and all these sort of entities. It’s about how the world is being presented to us. We often have no idea how the algorithms work or what data is being used. And finance was really important to me, because as I started the book, the financial crisis was happening. I just thought it was remarkable that there were these firms that have these massive liabilities that nobody seemed to know about or to be able to estimate. There’s lots of detail in the book about Goldman Sachs, AIG, and how financial regulation could allow there to be these systemic, structural black holes where things will be going on but no one would understand them. Using the concept of derivatives and secret liens, which I draw on from Mike Simkovic, we should know what debt companies are in and be able to assess that. But instead, often using derivatives, they can hide the degree to which they’re indebted. And that leads to systemic instability, etc. So that was where that book went.

It was sort of all about information and asymmetries. It said, if we don’t address them, we will just become more and more of a blackbox society. And the black box is two metaphors. One is, like on a plane, how a black box is watching everything you’re doing. And so, we’re gonna be watched in everything we do by these large firms, corporations, and governments. And then, the other is the black box, where an input goes in, an output comes out, and yet we have no idea how they were transformed. That happens with credit scoring. It happens with lots of other areas in finance where information goes into the system, it’s algorithmically transformed, and there’s an output that gives someone a score or likelihood of being good credit, risk, etc. But we don’t know how it happened. I am reminded of this contrast I drew between Larry Summers, on one side, who was really into algorithmic lending, saying, “The secret to getting more and more financial inclusion is by having more and more data about people. That way, we can better assess how likely they are to be good credit risks or not, and the system will be more advanced than the current credit scoring system.” And Derek Hamilton, on the other side, saying, “Look, these algorithms are so important. They should be public, right? They should be public and a matter of governance as to how the algorithms allocating credit operate.”

I think that the black box book pushes us in Derek Hamilton’s direction, but it took me a few years, even after publication, to really bite the bullet and say, “Yeah, these things really ought to be public.” And we’ll talk further about the monetary system being more public, but the systems by which credit is granted should also be more public in their disclosure and also in terms of people being able to give input. An example that just really struck me as I was researching the book was, after Hurricane Katrina, some in Congress said, “For credit scoring purposes, for those who live within an 80 mile radius of New Orleans or the epicenter, don’t allow late payments on bills to affect their credit score. We don’t want that to hurt because it’s a natural disaster. Everybody deserves a break.” And to that, the credit bureaus were very opposed. They said, “No, don’t ever bother with what we’re doing because it’s an objective science and we have no room for morals to enter into this.” And of course, all they do is entirely informed by moralistic decisions about what’s counted, what’s not, etc. And so, that’s where I see us going. As we talk more about New Laws of Robotics, I can discuss further where that credit granting and those authorities went–the directions they’ve gone toward algorithmic lending and more and more AI driven and blackbox systems.

Scott Ferguson: Yeah, let’s pick up on that. Let’s try to shift the conversation to New Laws of Robotics and maybe draw out the specific question of automation. It seems to me, and correct me if I’m wrong, that the black box has these two dimensions that you’ve identified. But another dimension is the algorithmization, essentially a kind of automating, of these moral decisions that are actually about governance and very political, but are being privatized and foreclosed from contestation and visibility. So it seems like that’s one of the stakes of The Black Box Society book. And then, you take that to another figure of automation–robotics. Maybe we could talk about that connection. And I think it would be helpful to just have you sketch out your sense of the history of robotics, and why you turn to that in particular.

Frank Pasquale: Great question. I really appreciate all of these angles on how we got to where we are today. With this project on robotics is, if you go back to what Aaron Benanav calls the automation discourse of the early 2010s, there are these books like Martin Ford’s Rise of the Robots or Brynjolfsson and McAfee’s Race Against the Machine. There’s a book called Humans Need Not ApplyFuture of the Professions is another one. There’s this whole cascade of books that came out, and Farhad Manjoo actually has this five part series in Slate, essentially writing, “Lawyers, guess what? AI is going to take your job. Pharmacists, bye bye. No more job for you.” This was a really popular idea in the early 2010s–that automation, robotics, and AI we’re moving beyond the factory floor to take over all manner of professional human services jobs. And the idea of the self driving car, I think, was at the very vanguard of that. It’s the sense of, “Forget it, that’s certainly gonna be all over by 2020. We’ll all be in self driving cars. That just seems like a very easy computational problem to solve.” This is obviously an automation discourse that’s broadly neoliberal.

There’s a counter discourse called the fully automated luxury communism school that would say, “Well, maybe we should automate the automators too, make the managers robots, or tell the managers you’re not that special either. We can actually compute your role as well.” And I felt I couldn’t really go in that direction, because first of all, one of the main reasons why automation and robotization was going poorly in so many areas was that the value judgments were not being acknowledged. Also, shadow work was being forced onto people. One easy example of that is with physicians where they were required to do electronic health records and to gather far more data about what they’re doing, and that should lead to a better healthcare system overall, but they were not really being compensated for that. So there’s a lot of burnout among physicians. There’s a lot of extra work being created and it was just being shoved down to people. I recently read this wonderful article by Leslie Wilcox saying that, in fact, we shouldn’t be worried about how there’ll be no work for humans to do. In fact, there’s an exponential generation of work by the increasing amounts of data that we have and the more information we have about the world. And so, I think that’s where I was concerned that the automation discourse was being met by a sort of left and somewhat more progressive and hopeful discourse of fully automated luxury communism. Aaron Bastani recently published on that.

But I wanted to find something that would take the best out of both of those traditions and that would emphasize the importance of governance, and governance beyond the sphere of government itself, to say that there are professions whose purpose is to delegate power over working conditions, over a craft, and over a service to people on the front lines. For example, with a teachers union, rather than saying to teachers, “Look, next year you’re going to use Proctorio software so that you can watch your students when they’re taking exams.” Or there might be another software system. There’s one that I described in the book called Hikvision from China that takes a picture of every student’s face every second and analyzes it for its expression and attentiveness. The ideal to me is that the teachers union can push back against that, both because it doesn’t want all that surveillance. I wouldn’t want to be a teacher in a classroom because it can take my face too. And also, because ideally, it’s acting on behalf of those that it’s serving. And ideally, I think that professions and unions will be uniting over time over the next several decades with the idea that, the reason why it’s important to have labor have an important governance role over corporations and its terms of work, is because you want to have that governance function by people who are on the front lines and who can speak up on behalf of their clients, their students, the people they work for. That’s the vision that is driving me.

And I know it’s a wide ranging answer. Part of where I think that we could stop is with the ideal of robotization. There’s plenty of work out there saying that robots don’t work very well, and that’s good work too. But in some ways, I don’t even think it should be an ideal. I don’t think we should have an ideal of the robot. Because there are so many important ways in which the communication of the fundamental data about how well something is being done is something that could only be done human to human–by a human being with certain human abilities, and to a human who can conversationally and open-ended-ly engage with the people with whom they’re dealing. I think about that a lot from my perspective as an educator. There are so many ways in which my students have taught me. Here, I’m thinking of conferences I’ve held where we’ve had recent law school graduates or people in law school that raise really interesting questions. Or even my own experiences as a student sometimes asking questions that people thought were really weird, but then later on, they’re accepted. I think this is something that is really helpful in terms of shaking up the discourse that we’re all on this track toward automation and AI just watching us and then reproducing what we do in response to the stimulus that they’ve also watched us respond to.

Scott Ferguson: This is a quick follow up. I’d like to hear you talk a little bit about the history of robotics, our kind of cultural imagination around robotics, and how that has changed over the course of modernity. But I’m also curious, and I’m asking you two gigantic questions so take them as you will, but I’m also wondering about a little sketch of the history of professions and expertise and what neoliberalism has done to that, especially in this moment of the Trump Republican Party and a right wing backlash against expertise. I’m curious if you have thoughts about the history of professions and expertise in that sense.

Frank Pasquale: I have one really concrete and compressed response about an example that I think implicates both of your questions, and then I’ll try to expand out from that as to the history with respect to professions and robots. If you watch the Chicago School, in terms of law and economics, one of the big pushes in the Chicago School, if we’re going to write a really broad, high level intellectual history of the mid to late 20th century US, is a push by those in economics and law at Chicago and their fellow travelers in many other fields to displace bureaucrats, politicians, lawyers with quantitative experts. That can be done in many ways. You can say, “Look, when we decide a tort case, we’re not trying to decide the morals of the situation–whether someone did something morally wrong or morally right. All we’re trying to decide is what are the optimal incentives to try to avoid a harm that is preventable.” Or something along those lines. It’s their equations–with enough data, we can fill out these equations and we’ll know which way to go.

The genius of Richard Posner, one of the leaders of this field, was to say, “Really, you could retrofit our model to the past of tort cases, and anything that doesn’t fit our model, that’s just bad tort law. In the future, we’re going to apply these models. And that’ll be the way we decide torts.” He even has a collection of essays called Overcoming Law. The idea is that law can be left in the past as this kind of antiquated humanities oriented profession, while the quantitative and data driven will be the saviors of systems of order. They will ultimately provide order. They’ll ultimately do things much better than law can. Of course, all the infirmities of that came to a head or to sudden exposure in the financial crisis. Even Posner himself wrote a book after the crisis called, A Failure of Capitalism, where he was saying sorry. Of course, once you try to actually reform capitalism as well, then he becomes like a concerned troll. It’s like, “Well, I’m really sorry about capitalism, but what you’re trying to do, it’d be far worse.” So they used to be sort of besotted with the economists; now the economists are a bit discredited.

Now, what’s coming up instead is AI. AI is gonna do it. And so, one paper, and one of the co-authors is from Chicago, is on micro-directives. It says we have this debate and law of rules versus standards. The rule is to be very clear and have general applicability. And then the standard is more flexible. Well, fortunately, now that we have AI, we could personalize law on everybody. So rather than just having a rule that says 55 miles an hour on the freeway, we look at Frank, who is a relatively new driver. He doesn’t drive very much. He’s from New York. He rides the subway. So we say he can only go 40. But we look at others and say, Scott, you can go up to 75. You are a fantastic driver. Of course, that sounds silly. But then they say, “Well, imagine if we had a million variables about everybody. If we knew Frank’s health record and what he’d had for dinner.” So it’s this idea of personalized law. And it’s been tried in many different areas. One person there writes in terms of big data attributions to people where, for example, if someone dies without a will but they are of a certain number of demographic groups, and we have wills from those demographic groups, we can attribute those person’s preferences onto that particular person. So there is this idea that you can make the law a bit of a machine that goes with itself. And I think that’s behind some research and computational law as well.

In watching this, my general suspicion has found, and this is a real stretch but I think what [Phillip] Mirowski has done for a lot of social science and law, I’ve tried to do by being a guardian or watchdog at the gate in terms of looking at things that are brought in that are supposedly making our field better, more determinant, and more scientific. I just bark at it and say, “Wait, I don’t think it is!” That’s what my impression of AI has been. To get into your question of the professions, professions have been under attack for a long time. Just to do the recent intellectual history, a lot of people on the left justifiably said, “Look at these professions. They’re these privileged members of the community looking down on people–doctors looking down on patients, lawyers looking down on clients, etc. We need to level the playing field.” And that was behind a lot of the Ralph Nader stuff as well, in terms of Nader trying to be such a consumer activist, privileging consumerism over producerism.

But you also simultaneously had people on the right saying, “Ah, these professions are trying to order labor beyond the market. That’s really suspicious.” You see both of those sides come together with, for example, attacks on occupational licensing. Both sides come together to say that–not necessarily the left, it’s more of a liberal critique. With that, there’s more right attacks on occupational licensing. And there’s some that’s certainly unnecessary, but we have to realize, one main major reason it arose was because union density went down so low that people needed to fight back in some way to maintain wages and living standards. And one way of doing that was to say, “Well, we’re going to be occupationally licensed.” But another purpose of it is to actually bring in people that are qualified, that know what they’re doing, and that can be part of an ongoing labor organization that decides what standards are in the field. This is about deepening democracy and democratization. It’s not just that there is an election every two or four years, but it’s also about democratizing your workplace and what the terms are under which you work. And so, that is coming together in my book.

In the first chapter, I have sections on crises of expertise that are happening presently and how it really is time to rally behind a new concept of expertise rather than just saying we’re all going to be citizen journalists, or all information is gonna be democratized. That’s not really true. People don’t have the time to do that themselves. We’re always going to be trusting experts and professionals for some things. Then, the question becomes, how do you make those experts and professions more amenable and more open to democratic dialogue, and more responsible and accountable to the people that they serve? Those are deep questions, but I wouldn’t get rid of experts. And so, to really answer your question, the problem that I’ve been dealing with is there are these folks I call meta-experts, especially economists and engineers, who think they’re experts about how other experts should run their lives. And because I see the meta-experts in the economics and engineering field turning from quantitative analysis to AI and robotics as things that will replace the other experts, I wanted to develop a counter-narrative that says, “Actually, your meta-expertise does not support the substitution of AI and robotics for many members of unions, many members of professions, and many of the services fields that I talk about.”

William Saas: More democracy at work, that’s a lot less sexy than the techno-utopian and techno-dystopian narratives that are so attractive. I wanted to go back to the beginning of your book where you start with a couple of very evocative epigraphs, one from Hannah Arendt pertaining to education, and then another from Lawrence Joseph concerning the relationship between law and phenomenology. Can you help us stitch together and unpack these quotations and how they frame your book?

Frank Pasquale: Yes, and actually, let me just get my copy of the quotations so if I need to quote them, I can do so precisely. I think poets are particularly very concerned about being quoted precisely, which is more power to them, they spend hours and hours trying to find the exact right words. So I’ll start with Arendt because her epigraph is really the most accessible way of thinking about what I’m trying to do with the book. She says, “Education is the point at which we decide whether we love the world enough to assume responsibility for it and by the same token save it from that ruin which, except for renewal, except for the coming of the new and young, would be inevitable. And education, too, is where we decide whether we love our children enough not to expel them from our world and leave them to their own devoid devices, nor to strike from their hands their chance of undertaking something new, something overseen by us, but to prepare them in advance for the task of renewing the common world.” I love this quote because I feel like there’s something about it that is both acknowledging the importance of institutions of the past, of knowing about your past and of tradition, while also saying that there we are always going to be tempted to just force the youth into what we’ve always known. And that delicate balance between trying to recognize and value the old versus trying to find what kind of play in the joints and freedom we need in the news is critical to me. What’s also interesting is that latter point about trying to ensure freedom for upcoming generations.

Both sides of the quote counsel in favor of regulating robotics and AI. The first part is easy: value tradition. So if the fact that we’ve had humans be teachers and humans be doctors and humans take on all these certain roles for so long, then that does count in favor of that, and in some ways, we should understand why we’ve done that for so long. That’s the sort of respecting tradition aspect of it. But the element of freedom is also something that we need to really be sure to have as part of the automation discussion, because so much of what happens with surveillance now, and with the ability of robotics and AI to watch our every move in the name of creating this better future, is in fact locking us into the past. For example, imagine a company that just decides to hire people who talk and write like people they’ve hired in the past. There’s already companies doing that. There are companies selling these algorithms to firms saying, “Oh, you’ve got 1000 applicants and 20 positions? No problem. Have each one of them record an interview on our video screen, write up a 100 word document, and we’ll do a massive pattern recognition exercise. I think this is awful. It’s a way of freezing people into the past. It’s a way of saying, “Well, we have this group of people that did well in the firm. Now, that data is gonna be the template for everybody else.” So I think that speaks to both sides of Arendt’s quote–counsel in favor of regulation and democratic control of technology.

The Larry Joseph one is difficult. His poems are often difficult. He is a brilliant poet. He was writing about money and finance and debentures in the 1980s. He was like a poet and a lawyer at Shearman and Sterling and put the two together as a law professor. His collected works were just published this year and got pretty good reviews–he’s a very well recognized poet. One of the things he says toward the end of one section from this poem called “In Parentheses,” is “The analog is what I believe in, the reconstruction of the phenomenology of perception not according to a machine, more, now, for the imagination to affix to than ever before.” I love this ending because a lot of the rest of the poem is about the horror of mechanized war. And that certainly makes a lot of sense in terms of what I talk about in the military chapter of the book.

But this ending where he says, “The analog is what I believe in,” it’s so interesting to say that in the midst of digitization. And it really is a metaphysical and ontological point. It’s a point about the importance of the integrity of the human as a sensing agent. A lot of what robotics is, is putting together sensors, information processors, and an actuator. And if you believe in the idea that we are just algorithms of selves, that our brains are just transducing one electrical signal into another, you could ultimately binarize everything. You could reproduce people as machines, as Ray Kurzweil has hoped for in terms of the singularity. And part of what I think is brilliant and beautiful in this expression, “The reconstruction of the phenomenology of perception not according to a machine,” is that it’s warning us to not think about machines as the model of human cognition or something we should aspire to. In every age, the dominant new technology becomes its model of cognition to which it tries to get everyone to aspire to. In ours, it’s the brain as a computer. There are other examples in past epochs.

In Jeanette Winterson’s book, Frankissstein, she tells the story of the writing of Frankenstein by Mary Shelley, and she contrasts it with this transhumanist convention that’s happening, I believe, in Arizona at the present time. And a lot of what she writes about is the ways in which people are trapped by their current conception of technology as thinking of what the mind is and should become. What Joseph does in the poem is to say, “Nope, I don’t think digitization is where we’re all going and where it’s all heading. In fact, I think that the phenomenology is important in contrast with behaviorism.” And to understand this poem, the key is to see how each of these keywords has a shadow side. So he says, “The analog is what I believe.” He’s critiquing the infirmities of the digital. When he talks about reconstructing phenomenology of perception, he’s contrasting that with behaviorism. And so, much of the book is a critique of efforts to model the mind in terms of behaviorism–our mind as a black box–and how we can get beyond that and move away from the idea that all the world is just a series of stimuluses and responses to time, space, and effort, to one that processes conversationally and non-algorithmically ways of dealing with the world.

And I’ll say one last thing about this is because I’m currently writing this project that’s on algorithmic accountability and law. One of the commenters on the paper said to me, “Isn’t all thought algorithmic? Are you just saying that you want irrationalism and not thinking?” And I’m like, no, that’s not what I want. It’s easy to think that all thoughts should be algorithmic if you’re not familiar with humanistic modes of thought and if you don’t think of fiction as a structure of experience of the imagination, as James White puts it, but instead as just a lark. We’re just having fun in fiction, there’s nothing really good there. That last point is so important because I’ve noticed that sometimes there are commenters that say, “Oh, education does nothing for people. It’s just signaling. It’s just an added hurdle for labor market credentialing, etc.” No! And these are people at universities saying this. Give up your post then to someone that believes in an educational mission. Education is really important and the humanities are important. These are ways of knowing. They’re not just effective, mangled, folded, spindled,or mutilated forms of algorithmic thought. They’re entirely distinct, valuable forms of thought that need to be at the core of policymaking.

We need to have councils of social science advisors, humanistic advisors, and other forms of advisors, to complement the council of economic advisers. And we need to simultaneously be working on making economics itself more reflective on it’s narrative foundations, and not in the way that Bob Shiller is doing by saying, “People are sometimes irrational and tell stories about the economy” But instead through what Deirdre McCloskey, Jens Beckert (Uncertain Futures), and others have been talking about. They’re talking about imagining futures that are better. There’s also social science fiction. William Davies edited a volume called Economic Science Fictions. Those essays are wonderful. They’re forms of scenario analysis and ways of ritually describing better futures that are just as important, if not more important, than quantitative models of the economy. So sorry about that long response to that question on the epigraphs. But I’m so glad you asked about them because they’re still evocative to me. I never feel like a book project is over until I have the right epigraph or epigraphs. I had the Joseph one in mind for a long time. When I found the Arendt one, I thought, this is it.

William Saas: Would it be fair to say that your artful summary of the Larry Joseph bit functions as a kind of rejection of the meta-expertise discourse that you’re engaging with?

Frank Pasquale: Yes. And by the way, for full disclosure, meta-expertise is not in this book. It’s actually something I’m working on now for the Oxford Handbook on Expertise. A sociologist of expertise is running that project. This idea of experts on experts is so interesting in the academy. And you can think of STS as that field–science and technology studies. It’s a really interesting area and it can go in all sorts of bad directions, as Bruno Latour has noticed recently with climate change denial, and other things. But to come back to your fundamental question: absolutely. The argument is that you’re not going to be able to come in as a meta-expert and just put a million cameras in a hospital watching everything that the surgeon does and replace that person. Something that’s now being tried even more and more is with therapy. You’re not gonna be able to have a recording of every therapy session, and then have a recording of a potential response to every complaint or idea, as automation. However, and this is another really important point of the book, you should expect the people that can make money off of the meta-expertise involved in AI and robotics to continually push for a reconceptualization of every field as a field that fits their model of reality.

So for example, if you believe in cognitive behavioral therapy, that makes psychology and psychiatry, or any sort of counseling service, much easier to automate. Similarly, with law, if you get rid of all appeals, if you get rid of all narrative explanation in law, it becomes much easier to just have everything be like a red light camera–you were either under the light when it was red or you were not. And sometimes that can be a good thing. I was happy to see in the US that we moved from a first to invent to a first to file standard for patenting, because the old standard led to lots of litigation over who was first to invent. But there’s so many areas of law where people that are behind AI in law and legal tech want to reconceptualize law and rewrite law as something that gets rid of human discretion, human conversation, and is just something that can be automated. And there’s value in the field as it stands with respect to its openness to forms of conversation, disputation, and interpretation.

William Saas: Equality before the algorithm doesn’t have the same ring.

Frank Pasquale: It’s interesting though because equality of the algorithm is behind a lot of legal reform. And a lot of legal reform that’s had unexpectedly bad consequences, like for example, sentencing guidelines. You might say, “Thank goodness that we now have these sentencing guidelines so we won’t have racial disparities in sentencing.” But then what if the racial disparities just move to who we arrest? And what if the sentencing guidelines become really harsh? Then, the algorithmization of sentencing from something that would involve some level of judgement and narrative description of why the person deserved a certain sentence. It may get rid of a narrow form of bias while reinforcing the strength and power of a fundamentally illegitimate system.

Maximilian Seijo: So speaking of telling stories, and perhaps to hone in a little bit on this humanistic mode of thinking as a rhetorical crux here, the title and hook of your book takes us back to science fiction writer, Isaac Asimov, and his 1942 short story “Run Around.” The story includes a reference to a fictional handbook of robotics, 56th edition from the year 2058. In that handbook, we discover three basic laws for ensuring an ethical practice of robotics. Can you briefly enumerate these laws and then tell us why you felt compelled in your work to develop four new laws of robotics for our contemporary moment?

Frank Pasquale: Great, thanks, Max. I think that’s a good way to really set up the transition and hook of the book. Writing a book like this, in thinking about it midway through after getting reviews of it, at least one of the reviewers was saying, “This book is about a lot more than robotics, you should really change the title.” And it’s true. I think the subtitle does a little bit of the work there. But I think it was critical because I’d seen these laws of robotics from Asimov in so many places. And I also see the way in which a very well told science fiction tale can really grab people’s interest, especially technologists, because a lot of technologists are just taking engineering, math, and science courses. They need to have something they can relatively grasp on to, as almost algorithmic in itself. And so, I thought to myself, Asimov was so successful with these three laws, why don’t I try to devise a few laws that reflect wide standing consensus among ethicists about where robotics should be going in certain respects, while also putting my own political economy spin on them.

So to start with Asimov, the three laws of robotics in the 1942 story are first, a robot shall not harm or injure a human being. I think the word injury is very interesting, because it reminds me of the ways in which standing to sue gets narrowed. So if you say injury as opposed to all these other ways in which the world could be harmed by robotics and AI, that is an injury to a one particular human being–it’s narrowing. So you cannot injure a human being. Second is that a robot must obey a human’s commands, except when that conflicts with the first law. So if I told someone to tell a robot to go kill somebody, it shouldn’t obey me. And the third is that a robot shall protect itself unless that violates the first two commands. I think these have resonance with lots of folks in technology because of the elegant recursion. They’re sort of nested. You’ve got this fundamental directive, and then a secondary directive, and then a tertiary directive. But the problem is that they’re really vague. I mean, what if two people approach a robot and both tell it conflicting things to do. What do you do then? There’s all sorts of other issues that arise from them, which he realized. These conflicts became sort of the foundation of his science fiction.

I felt like there needed to be new laws. First, because of those ambiguities, and also because there’s not much of a political economy or institutional analysis behind this. There are laws and they’ll be programmed in, but who’s doing the programming? And who’s doing the enforcement of that? And how are we going to durably and equitably distribute power over AI and robotics? Those are questions coming out of a tradition from the work of people like David Noble, who wrote about the role of machinery and workers governance, or lack of governance over machinery. Those questions really motivated me. And so, I articulated these new laws, and the first new law is that robotics and AI should compliment professionals, not replace them. There, I tried to divide it to develop a line between the type of labor that we just want robots to substitute for versus situations where we think that robots and AI could make existing labor more valuable. And I realized that the profession line will be controversial, but I was inspired by a 1964 article by Harold Wilenski, which was called, “The Professionalization of Everyone?” Ultimately, the labor and work that will be remaining, and there’ll be lots of it as AI and robotics advance, will be seen as professional work and will be treated in that way. The type of prerogatives, the type of job security, the type of education, and the type of responsibility that you see professionals now having in their fields will be that of, ideally in my view, the work that endures over time.

The second law of robotics is something that gets a little more cultural and metaphysical. And that is to say that robots and AI should not counterfeit humanity. My idea there is that we all deserve to know if we’re dealing with a robot or AI or not. So if I see a bot on Twitter that has an AVI that’s been constructed–we now have AI that can just construct fake faces–and it has one of those fake faces, and it has a name underneath it, and it says, “Hey, check it out,” I should know that that’s actually a bot. Whoever put that up, I should know that’s a bot. My fourth law of robotics says that any entity out there that is a machine or AI put out by someone should be attributed back to the person or control group who created it and controls it. So we need to know those two things. The second and fourth new laws of robotics fit together in that way, in that we need to know what’s an AI or robot, and we need to be able to know who owns or controls it. And my third new law is to say that robotics and AI should not contribute to zero-sum arms races. The clearest example of that is in the military. We really need to stop the development of killer robots and AI. It’s begetting the use of AI and robotics for immense, destructive capacity, both in militaries and in policing. I feel like we need to stand that down.

The power of the legitimacy of violence is that the human beings who inflict it take on some role or some danger themselves. And if they don’t do that, for example, when you see President Trump putting giant walls around the White House, it’s bizarre to have people putting up such massive walls between themselves and others, where they can have a remote control war. I think that leads to things like one side having robotics and AI, the other side feeling like they have to invest in them, which makes the side that started it feel like they have to invest more. That’s problematic. And just to gloss that final new law of robotics a little bit more, I think that needs to extend in a political economic sense to all sorts of arms races. And so, in terms of all sorts of arms races, you might see AI that can file 1000 lawsuits at once. We already have a gig economy platform for evicting people where people are trying to draw in people to accelerate evictions. Imagine that there’s another firm that automated paperwork to evict people or to sue tenants. Imagine we have AI for that. Well, some people would say the answer to that is to develop a tenant bot that can immediately process the letter from the landlord and write back a return letter. You can see how fast that could turn into an arms race. In one of the more convincing parts of a pretty terrible movie called Jupiter Ascending, there’s a vision of this as the future of the legal system. Essentially, it’s just robots spitting out papers at one another. I think that’s problematic.

You also see that in finance with high frequency trading. Like one firm says, “My bots need to go faster than the other’s bots. I’m going to dig a tunnel under the Allegheny Mountains between New York and Chicago so that I can be 30 milliseconds faster than the other side.” No! This is something that a reasonable regulatory regime would just say, “Look, if you both come in at the same millisecond, then there’s another way of allocating it. We don’t just give it to the entity that’s fastest.” And so, I think the reason why these new laws are really important is because they are drenched in political economic judgments about what’s productive and what’s not. What type of labor should be made more valuable by technology, and what type of labor should be replaced by technology? And what are the institutions that can make the hard decisions about the dividing line? One hard thing brought up by the laws would be to imagine that we have people investing in robot hotels. And I’ve heard that in Japan, there has to be at least one human person at a hotel. I’m not certain of this law, but it was in an article on a robot hotel called Hotel Henn-na.

So at Hotel Henn-na, they would have a robot who checks you in, a robot who would bring your bags to your room, a robot who cleans all of the rooms, etc. And we face difficult decisions as a society. First of all, do we maintain the rule that there has to be at least one person? Do we say that maybe there have to be two or three people so that one person isn’t overwhelmed? It reminds me of the staffing standards for hospitals under the Emergency Medical Treatment and Active Labor Act. There are certain staffing standards of what a hospital has to have in an emergency room and how they staff it. Do we do that for hotels or not? What are the reasons for doing so? Do we think that hotel management schools and other things like that, that are really valuable and producing valuable research, should in turn be part of a human profession of hospitality? Or do we think that this is all going in the direction of Ubik, the Philip K. Dick story where you have to just put a credit card in to get into any door in the society? There’s no people behind the doors, you just have that. Or in Altered Carbon, another science fiction story, where you’d have that same sort of vision. And I don’t have an answer there. Each society should be able to answer differently. Maybe some societies will be like, “We’re going all out for the robots. Our next generation AI development plan is just an all out robotized hotel sector.” Another society may say, “Look, we have unions at hotels. They’re good paying work. There are people who have local knowledge that want to give more advice to people that are coming into the hotel. There are ways of arranging conferences and other events at hotels that require human judgment and expertise.” You can go in that direction, too.

What I’m trying to do with the book is to set up a framework where that’s the conversation we have, rather than the conversation of how do we take every person in the hotel and have surveillance record everything they do, record every stimulus that caused everything that they do, and then transplant that into a machine that can be them. And I hope the first conversation is a more interesting one about the structure of the future of labor and the structure of ensuring worker governance and contributions to the ongoing operation of certain facilities. That’s what I hope the book is pushing for. I think it’s a much easier case in health and education. And that’s why I have whole chapters on health and education. It’s really an easy case to be made that these are professions. Rather than having apps teach your fourth grader, you want to have a teacher there who’s going to exemplify certain ways of being in the world, but who also is going to give you good advice on what’s a good app and what’s a bad app. And that’ll be a bigger part of teachers, doctors, and others roles. They’re going to have to take on more and more of a responsibility for saying, “Hey, these are good apps that will really help your children or help the sick. And these are bad apps. Don’t trust them. They’re problematic and not effective.”

William Saas: And because of unions, they’ll have better pay. Health and education are two of the only sectors in Louisiana that the state can cut the budget of in times of austerity. So there’s a concerning alignment there.

Frank Pasquale: In terms of your point, Billy, about the health and education sectors in Louisiana, and that being caught in austerity, I think that’s really critical because there’s this whole discourse about the “cost disease,” where economists say, “If only health and education could be more like manufacturing. If only we could make it more and more like manufacturing, we could make it faster and faster and cheaper and cheaper.” My worry is that it is billed as a way of helping consumers and patients and students getting everything cheaper. To me, the answer is to have the state pay for it and recognize that these are quintessentially human roles. They’re gonna need humans indefinitely.

Scott Ferguson: I definitely want to move us into that question of the state paying for it and money and some of your discussion of Modern Monetary Theory in the book, but I wanted to bring up something along the way, which is a slightly different question. I came up in the high, heady moment of 90s theory and poststructuralism and all of its varieties. And I think one of the deep lessons of poststructuralism and related discourses is that mediation, signification, and technology are not somehow just inert external tools, but rather constitutive of human relationality. And I think I still hold on to that thesis. But there’s another element in poststructuralism that takes shape in different forms, writers, and discourses, where there is a kind of automaticity that is often ascribed to the functioning of signification, or techne, that is kind of bigger than the human or is out of our control. And that in order to have an ethical relation to technology in the world, we need to somehow be open to the play of différance, in one version of it. It’d be open to that uncontrollable automaticity. I have problems with that reading now and I’m sensing that you do, too. I’m wondering, from a certain point of view, your laws of robotics really just fly in the face of this kind of thinking. But I don’t think that you’re doing so in some kind of untutored naive or Luddite kind of way. And I’m curious how much you’ve thought about what you’re doing in relationship to that? Does that framing make some sense to you? Has that been something you’ve wrestled with?

Frank Pasquale: Yeah, I mean, I’m not in dialogue with that as much as I want to be in this book, because the book is a trade book. So I couldn’t really get into the details of posthumanist discourse, but certainly posthumanist discourse builds on a lot of the poststructuralism that you’re discussing, and accelerationism as well. I think the idea there is that it’s appealing because we want to be able to understand how social forces, how technology, how various aspects of our economic, social, and natural environment, affect people. On a critical theory account of emancipation, part of it would be being able to lift yourself above your current circumstances and say, “Wow, I have been conditioned to think in all these various different ways.” Then, a problem comes in when people say, “Well, even your effort toward reflection is itself conditioned.” That’s maybe the sort of dead end that Dialectic of Enlightenment was going toward, but that also just seems to be continually done afresh. There’s been some wonderful recent incarnations of the critical theory tradition. Bernard Harcourt’s Critique and Praxis is a really good example, where he’s really struggling with this idea. He’s just a brilliant theorist who can read so widely, and he’s struggling a lot with the idea of, I see that I’m getting above my social situation and critiquing it, but wait a second, I’ve got to always be open to the fact that I am just talking from particular position of privilege. And I have to step behind that or step beyond that.

I see that, particularly, when I debate with or get critiqued by people that believe in robot rights, because there’s this discourse of robot rights that says things like, “Look, you are privileging your perspective as someone that is a carbon based life form. If you really opened your mind, then you’d see that the robot that says I am hurt when you kick it, you should respect it. It should have rights just as you do.” And I think that’s where I draw a line. I say, “No, I don’t think that’s true. I think the type of sensors and actuators and information processing going on in that robot is fundamentally different than what’s going on in me or you or anybody in the audience, unless maybe there are listening machines listening to us. I’m sorry if I offend you listening machines. And particularly, we need to draw a line because some of the discourse in this posthumanist direction tries to parasitize emancipatory struggles of women, minorities, and other groups and says, “Just as the polity didn’t treat African Americans in the US well, now it’s treating our machines very poorly. We need to learn from that, treat machines better, and treat machines as our human co-governors or as partners in this world.” Ultimately, that is really insulting to those that have worked and are working in those emancipatory civil rights traditions, because it’s drawing an equation that doesn’t hold. It’s drawing an equation between persons and machines that just doesn’t hold.

There’s similarly something going on with nature, where there’s this emphasis to say, “Well, if you respect nature, then you should respect our robots, because that’s something that’s highly valued in your technical world and environment.” I don’t agree with that either. Because I think that there’s something that is of higher value in nature than our machines. The world would be really irrevocably harmed if we were to sort of pave it over with human techne. Part of what I would come at that with would be religious values, but part of it would come out of values of the natural world as being part of nature, and seeing that it’s the ground of my being, and technology not necessarily nearly as much the ground of being. And so, those would be some of the divides that I make. But I think the poststructuralist attack on foundations is something I really worry about. The last example I’ll give with respect to robot rights, which is maybe an accelerationist and singular view that, in the end, we’re all just evolving toward robot status. It’s going to be like Westworld. Eventually the Dolores’s of Westworld are going to be much more adept at surviving in this universe than we are. I can’t see that. I don’t think that’s right.

In the end, that push is much more symptomatic of and aligned with Citizens United. Like when I see people pushing for robots rights, I also see something very similar to corporations getting rights. The robot right now is almost always created by a corporation. And it’s about creating a force multiplier for the technical reasons to claim as many resources and rights as human beings have. But who owns those technical resources? So perhaps I should close out by saying, if I were to just get rid of all metaphysical foundations, if I were to get rid of all the humanism–I’ve been called an old fashioned humanist by some and I wear that badge proudly, actually–but if I could get rid of the foundations, I could then simply say, if we gave robots rights equivalent to human rights, if, for example, bots on Twitter had a right to speak and the government couldn’t regulate bots there or anywhere else, who would own most of them? Who would be creating most of them? I don’t think it would be me. And I don’t think it would be many people that are underprivileged. I think it would be just like Bitcoin where most of Bitcoin is owned by a small group of people. I think most of those robots and AI would be owned by a very small group of people. They would be putting them out there. The power differential that comes out of that is just immense, and it really is something that I wouldn’t want to see as part of a future.

Maxximilian Seijo: I really like where you went with this, Frank, because I think it brings up a lot of questions related to critical theory and what you discussed as sort of like the dead end of critical theory. And as that dead end, we could say, dialectizes into posthumanism and accelerationism, I think you’re right to pare back to these questions that ultimately center law and creation–who’s creating and who owns. And these are sort of questions of agency in the creation. That’s the political economic point, isn’t it? Like who is actually putting in the labor to create these structures and keep maintaining these structures? I also wanted to point to what we’re calling the Superstructure project, which is a spin off of this podcast, which is to say that, there’s an identity or non-identity that is assumed at the baseline from within the metaphysical foundations that you’re critiquing. And what we would want to say, along with you, and perhaps I’m inviting you to come along with us here to join in, is foregrounding these political and legal questions first and foremost, because that’s perhaps where the agency in this renewal lies, to harken back to the epigraph from your book, as we move forward into the future. I wonder what you think of that?

Frank Pasquale: Yeah, I really like that idea. Agency for renewal and thinking about structure and agency and saying that we can create a structure where far more people have agency. That resolves the contradiction in a way. I really appreciate that way of framing and clarifying the direction there, because it’s too easy to say we’re fragile and we’re mortal. We’ve got to look beyond the human form in human life and just create something better. We have people at the very top of the economy demanding that sort of thing. Ultimately, if the economy were more democratic, there would be far richer and more diverse visions out there for what society should look like 10-20-50-100 years from now. There’s this wonderful clip of AOC describing what the Green New Deal would look like. She talks about taking the train from the city to another city and walking through these beautiful public gardens, because we’ve had a job guarantee. That to me is just such a more grounded and positive vision than the stuff that’s coming out of our professional futurists, which is so often being rooted in a really disconnected idea of a far flung speculative future. To have a structure where more people have agency, I think creates the conditions for really advancing human well being, as opposed to expecting some deus ex machina from technology to just deliver us.

You see that with COVID, too. I just saw an ad for the Pharmaceutical Research Manufacturers Association of America on the Washington Post front page that said, “Science will get us back to normal.” It had like a picture of a vaccine. And I thought, Taiwan is back to normal and it wasn’t science that did it. It was about having a government that actually is connected to its people, that is competent, and that can massively mobilize public funds for mask creation and deployment. I think it’s the second largest mass manufacturer in the world now. It can invest in public health and basic human needs rapidly, nimbly, and effectively. Just to put it in a nutshell, the PhRMA vision, which we may be waiting for for years–who knows when a vaccine will come? If it comes, it might be 30 to 40% effective, versus the strong, creative, and nimble entrepreneurial state that Mazzucato describes that was able to put into place a COVID response. And it’s not just Taiwan–South Korea, Vietnam, China, New Zealand, and Australia, are all doing very well. And so, thank you for that clarification. I think that really helps focus us on where political and social thought should be going.

William Saas: And also very nicely brings us to the portion of your chapter on political economy where you talk about Modern Monetary Theory and what MMT means for the political future of robotics. Could you summarize that argument for us?

Frank Pasquale: Sure, sure. A lot of the book boils down to an argument for more investments in AI, robotics, and especially labor in the human services fields, like health care, education, journalism, design, the arts, and many other fields, and for less investment in the zero-sum arms race fields, which I would include a lot of guard labor and military policing. Jayadev and Bowles have an article that provides insight on corporate guard labor investment that could certainly be repurposed to much better ends. This holds for private finance as well. And so, when you make an argument like that, you just run into the buzzsaw of economists saying, “Well, actually, health and education are the worst sectors. They are the stagnant sectors. In productive sectors, we see more and more output for less and less money.” And I say that’s really not true. And even one of the founders of this cost disease theory, Baumol, in his 2012 work said, “Look, a lot of the reasons why these productive sectors are so productive is because they create massive externalities in the way of pollution and other matters like that.”

I bring in Keynes as well, because if we were to just try to cut costs in these very large sectors of society, that could be a downward spiral. It’s the classic paradox of thrift. To get out of the paradox of thrift, which I foresee as a clear and present danger now that we’re seeing the election results this year. Even though we’ve avoided authoritarianism, we have quite a setup for austerity. To avoid that, what I tried to say is that we should be taxing, but that tax should be primarily focused on solving problems of inequality. The real idea here is to have sovereign currency issuers issuing more of the money in order to make sure that we are properly focused on the quality of healthcare. We had an affordable care act in 2010, let’s have a quality health care act in 2022 that’s going to invest in high quality and create more options for people that are doing unpaid caregiving. Either pay them for caregiving or provide them the option of having professional caregivers come in. Let’s provide long term care insurance. There are endless examples of undone work in health care. And here I can again speak from personal experience as someone who was a caregiver for two parents that needed a lot of help toward the end of their lives. That was a ton of work that I did that was never compensated. We shouldn’t buy into this idea that it is noble work. It was work. I liked being in their presence, but it was work. And I would have liked to have had the option, at least for some things, to have a professional to do it, have the state pay for that, and get past this idea of, if there’s a deficit of a certain level, we’re all doomed or something along those lines.

And so, the Modern Monetary Theory shift away from thinking about a debt constraint to an inflation constraint was just enormously empowering for me, because then all of a sudden, you didn’t have to continually be worried about how am I going to take money from one part and give it to the other part. What are our priorities? We can really prioritize a lot as long as we develop modes of understanding where inflation is happening and where it’s bad. And maybe some areas of inflation would be good. Maybe we don’t care if the price of Fabergé eggs goes up. Maybe some things should cost more because they are affirmative bad’s. But there are other areas of inflation where we should be deeply concerned. And so, I think the MMT shift from thinking about a debt constraint to an inflation constraint is entirely the way the dialogue has to go. And it’s particularly valuable in the context of our automation discussion. Because there are so many people out there that want to push deflationary cryptocurrencies, which to me are just the worst kind of speculative instrument. And to think that that is being put forward as the future of money when there is such a more public spirited, open ended, and productive alternative, that to me adds the urgency to it. I had to put in a big knock on Bitcoin in my last chapter, because in part, to say MMT is just a much better way of thinking about what the future of money and value creation and measure is going to be.

Maxximilian Seijo: Also just to say how the way algorithmic thinking influences the way we even define inflation. I just wanted to make that point explicitly.

Frank Pasquale: Yeah, I have a quote in one of my articles–maybe it was in the review of the books by historian Finn Brunton–where I think Milton Friedman said at one point, “Replace the Federal Reserve with a computer.” We just want a computer. With the money supply, just dribble it out by an algorithm. The Taylor rule suggests that I think. There’s just all these ways in which that algorithmic thinking is quite destructive. I just heard a great podcast with Dan Denver on The Dig with Wendy Brown talking about the problem of algorithmic monetary policy in the EU. And Wendy Brown was saying, “If you govern your monetary policy with an algorithm, or within very narrow bounds, you’ll never be able to take on the challenges of our age.” The challenges of our age are so profound in terms of climate change, the COVID pandemic, and other areas that you will never dig out from those holes. And when I see the output gaps that are now being projected, first from the global financial crisis, and now from COVID, it’s terrible. These are huge amounts of money and productive capacity and production that we’re all losing out on every day of our lives if we don’t find ways to marshal resources and pay for them with sovereign currency,

Scott Ferguson: I think not only as a positive reframing and answer to the kind of deadlocks in the debates and discourses that you’re working through, the inclusion of MMT with your project also opens up a kind of symptomatology, or a way of reading certain discourses of automation and robotics symptomatically. I’ll spell that out. With zero-sum arm races in military technology, or the algorithmic trading itself, these are all digging into and naturalizing a world of austerity, saying, the only way I can get mine is by leveraging the particular conditions right now, in a narrow, private way, whereby I deepen those conditions. So it’s not just that those are bad, antisocial, and antidemocratic. It’s that, from a MMT point of view, when you can see that these are actually all governance decisions in the first place, and that we have a nominally infinite capacity to spend as needed, given our current constraints, you can then turn that to all these problematic impulses, these accelerationist impulses, and say, they’re a kind of sick result of our system itself. And it’s reifying that system along the way. I don’t know if that’s making some sense.

Frank Pasquale: Yeah, I agree completely. As I was reading about the Allegheny cable between New York and Chicago that cost $300 billion so that people can micro arbitrage a little bit better, simultaneously, Chris Christie in New Jersey was destroying the ARC tunnel that would be this incredibly needed capacity between New York and New Jersey–between, basically, the whole Amtrak line and all of the Jersey transit. I spent a lot of time on New Jersey transit when I used to teach at Seton Hall. It was getting worse and worse in terms of morning rush hours with people just packing on–very unsafe and slow conditions. I remember one time things had malfunctioned, so basically, there was a crush of passengers because there were so many delays in the trains. People couldn’t move. The escalator was still moving. So I had to like body surf over people that were stuck. It’s just absurd. When you think about the way in which this is happening in the US, in terms of this ridiculous situation of under capacity with respect to our basic infrastructure, while you have a financial sector where money is no object because of the privilege of what [Saule T.] Omarova and [Robert] Hockett have called the private “franchise” of money. It’s something we really have to focus on.

And I think that the accelerationist idea feeds into it. Because the idea is, in a world of massively limited resources, opportunities, and things, I have to be as agile as a machine. I have to make all the right moves and make everything perfectly algorithmically calculated. Only then I can survive, because there’s so much competition for this limited set of resources, when in fact, there’s a lot of abundance we could create. It is abundance, of course, within the bounds of nature, but I have a lot of hope. I’m not a cornucopian-ist, but I do think that there’s going to be ways in which if we’re investing in the right technology, a lot of the trade offs that we see are not going to be as severe on many levels.

William Saas: That seems like a good place to end. Is there anything that you’d like to plug before you leave us?Frank Pasquale: Yes, I am part of a group called the Association to Promote Political Economy and Law (APPEAL). And we’ve had a lot of great conversations about the future of both monetary policy and financial regulation there. So if anyone wants to go to that’s a place where you can see some of our past and future events. We’re doing a lot of stuff on Zoom now because of COVID, but we hope to eventually have in person events in the future. It’s an intellectual community of lawyers, economists, those in social sciences, those in the humanities, historians, and many others, who’ve done a lot to rethink the nature of commercial and economic life, and how the law can be more conducive to more human flourishing, generally. And with our methodological diversity, we really welcome a lot of folks in it and I just want people to check it out.

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).

Public Media, Public Money With Victor Pickard

Victor Pickard joins Money on the Left to discuss the public bases and potentials of money and media in The United States. Professor of Media Policy and Political Economy at the Annenberg School for Communication at the University of Pennsylvania, Pickard is a prolific researcher and author of over one hundred articles and six books on the history of media institutions, media activism, and the avowedly political and public foundations of journalism and media policy. Our conversation with Pickard is far ranging. We survey his early work on the postwar settlement for American media, when the fundaments of the current media landscape such as its tendency toward private and consolidated ownership were first put in place. We explore the critical role and shortcomings of political liberalism in shaping that midcentury settlement and all that’s come after. And we identify means for creating resilient and diverse public media infrastructures that are better equipped to help leftists resolve the most pressing political, economic, and ecological crises of our moment. Along the way, we also uncover complementary impulses between Pickard’s vision for the future of public media and the Modern Money movement’s project to democratize public money.

Theme music by Hillbilly Motobike.


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

Maxximilian Seijo: Victor Pickard, welcome to Money on the Left.

Victor Pickard: Thank you for having me.

Maxximilian Seijo: So you’re the author and editor of numerous books on journalism, media policy, and media history. We asked you to come on our show because we think your affirmation of the public foundations of American media culture resonates with our emphasis on the public foundations of money. We would perhaps even go as far to say that the two are reciprocally bound up with one another. However, before we dig into the details of your arguments and reflections, would you mind telling our listeners a little bit about your personal and professional background? For example, how did you come to work on media history, theory, and policy?

Victor Pickard: Excellent question. Sometimes I pause to ask myself that same question. I certainly didn’t originally enter graduate school with the assumption that I would focus on media history. I sort of evolved into or perhaps backed into that interest area. But I started out as an activist when I first started graduate school. I was coming out of the global justice movement. I had been traveling for a number of years and arrived at the conclusion that whatever issue I was interested in and whatever social problem I wanted to focus on–and there were many–media would be central to this political struggle. And so, early on, I became involved with the Independent Media Center movement, which focuses on indie media. I actually wrote my master’s thesis on the indie media model, which was very much based on this radical anarchic model of consensus based decision making. This is pre-blogosphere, so it’s quite radical that you could create your own media. But at the same time, I was also very interested in changing what we used to call mainstream media.

Gradually, it became clear to me that to try to change the system, you needed to engage with it at a structural level. In order to do that, you need to engage with policy debates and the politics behind those policy debates. And finally, in order to do that, you need to know the history of this media system. As I got more interested in political economic questions about the origins of the American media system, it became very clear to me that I needed to hit the archives. I needed to start really getting into understanding the origins and genealogies of this system in order to make systemic change. That’s how I eventually became a history geek and that’s where much of my interest has been focused. But I’ve never lost touch with those activist roots. Everything I do is based on the assumption that as scholars, to paraphrase a great social critic, it’s not enough to simply describe the things that we’re studying. The point is to try to change them to make them better. That’s what I dedicate my work to.

Scott Ferguson: That’s great, thanks. Perhaps we can talk about some of the historical work in your first book, America’s Battle for Media Democracy: The Triumph of Corporate Libertarianism and the Future of Media Reform. In that book, you sketch a political history of the American media system to analyses of debates in media governance. Specifically, if we’re parsing this right, you argue that these turbulent mid-century debates precipitated in what you call the “post-war settlement for American media.” Can you talk about this settlement, maybe touching upon some of the key controversies surrounding it, such as the progressive turn at the FCC, the battle over the Blue Book, the origins of the Fairness Doctrine, maybe some of the problems with the Fairness Doctrine, or the possibilities and limits of the Fairness Doctrine, and the debates of the Hutchins commission? I know that’s a lot but take on whatever you want to take on.

Victor Pickard: I would gladly talk about all these things. As I mentioned earlier, I am a history geek. So I can talk about these historical policy battles for hours on end, but I’ll try to keep it a little bit shorter than that. That project, which came out of my dissertation research, really began with one very basic question: how did we in the United States come to inherit a particular kind of media system? The media system we have in the United States is quite exceptional in a number of ways. And I use that term exceptional not to suggest that it’s a positive thing necessarily, but rather that it’s an outlier compared to other media systems around the world. The system we have in the United States is almost entirely commercial. It’s only lightly regulated in terms of public interest protections. And it’s dominated by a handful of massive corporations.

Taken together, this creates a particular kind of media system and I had a hunch that we did not arrive at this system necessarily in a democratic fashion. And so, as I dug into the archival materials, it quickly became clear to me that to understand how this system developed in the US, we really needed to go back to the 1940s. It seemed to me that many of these policy trajectories led back to a set of core policy battles in the 1940s. And this wasn’t necessarily intuitive. Previous historians had focused on the 1930s and the 1960s. There were these political hotspots that tended to attract historians’ attention. The 1940s and 1950s were almost seen as flyover territory, aside from little things like World War II, obviously. So in terms of looking at how our media system developed, we’ve tended not to focus as much on the 40s. But I feel like that’s changed since I first started working on this 15 or so years ago.

When I started looking at what was happening, you could see pretty quickly that what some historians might refer to as a critical juncture was occurring for the US media system. There were a number of political crises, technological changes, a crisis of confidence, you might say, in our media system and how the press behaved and operated during the war. For example, there were concerns about propaganda, there were rising concerns about concentration of ownership, and there were even concerns about the loss of community newspapers. Many of the same concerns that we hear about today were very much in the air in the 1940s. What you also had was this very rare window, I’m not sure it’s ever happened since, when there was a progressive block at the Federal Communications Commission. At that time, instead of the five commissioners that you have today, there were actually seven. And out of those seven, four of them were New Deal Democrats–or at least one of them was a progressive Republican. But you had this progressive block, which created a window through which a number of surprisingly radical reforms were at least attempted.

What was also interesting about this historical moment is that, where the New Deal was in retreat throughout much of the US government at this time, it arrived later and stayed longer at the Federal Communications Commission than it did elsewhere. So it created these conditions for a number of progressive initiatives. And those are the case studies that I focused on in that book. For example, the FCC Blue Book was an initiative that would have set up this kind of social contract where for broadcasters to hold on to their monopolistic use of the public airwaves, they would have to do things like allocate a certain amount of their programming towards covering public affairs, educational broadcasting, and local culture. None of this really sounds too radical, but at the time, it was treated as an existential threat to the commercial broadcasters. They fought this tooth and nail.

Of course, these initiatives started right before this anti-communist hysteria took over. We’re talking about roughly 1946. There was still this brief moment where, at least within media policy, they were pushing through some pretty progressive plans and initiatives. And almost immediately, the political train shifted on them. The FCC was accused of doing things like BBC-izing American radio–God forbid. The Blue Book was called the “Pink Book.” They were being red-baited. Then, there was this exodus. The last New Dealers were chased out of DC in 1947 and 1948, especially after Truman’s loyalty program. Many of them fled to where radicals often flee to. They fled to the academy and took refuge in various places in the academy. That’s actually how the political economy of media tradition took hold. This tradition that I hail from, it took hold at my alma mater at the University of Illinois with Dallas Smythe, who had been the FCC’s first chief economist and one of the architects of some of these progressive policy plans.

That’s another discussion we could get into in terms of the intellectual history of the political economy tradition of media research. But going back to some of these initiatives, you mentioned the Fairness Doctrine, which today is often held up as the high watermark for enlightened media policy in the US. What’s interesting that I found in my research was that reformers saw the Fairness Doctrine as a kind of consolation prize for more structural reforms that they were trying to push through. And so, what later became known as the Fairness Doctrine was established in 1949. It was kind of the final bookend to this window in the mid to late 40s, where you saw this flurry of progressive interventions. Yet even that was overturned several decades later by the Reagan administration.

One thing about the Fairness Doctrine that people often misunderstand is that they often conflate it with the equal time rule, but it’s not about just making sure that two sides have equal time. That’s a different rule. The Fairness Doctrine was about the idea that broadcasters had an affirmative duty to cover controversial issues that were important to local communities and to do so in a balanced manner to make sure that they had contrasting views. So it was never assumed that it was just like two sides to the story. It was the idea that you had to have a kind of pluralism in terms of the range of debate. You had to have different contrasting views on any important subject. That’s very key. That’s such a much more progressive measure than simply saying, we need a Republican and a Democrat to speak on this issue, for example.

Anyway, there’s much more to be said. I will say probably the most radical thing that the FCC did during that window was to essentially trust bust a radio monopoly. It basically forced NBC to divest itself of one of its two major networks, which is actually how we got ABC. So we went from two big players to three big players. Now, of course, this is unimaginable and beyond comprehension that the FCC could do something like that today. This was at the height of an anti-monopoly push at the FCC. In fact, Dallas Smythe was probably the main person behind this endeavor. You also could imagine that going from two big players to three didn’t really transform the media landscape. I think that’s also an interesting lesson about the limitations to some of the anti-monopoly activism that many of us on the left would love to see. I would love to see it, but we have to be clear that that doesn’t necessarily solve all of our problems.

The other thing you mentioned, the Hutchins Commission, that actually dealt with all types of media, but the one it’s most known for is focusing on the role of print media, the role of newspapers, in a democratic society. It really established some of the normative benchmarks for what journalism is supposed to do in a democratic society, what journalists themselves are supposed to do, and establish what later became known as the social responsibility model for the press. We purportedly moved from an earlier libertarian model to a social responsibility model. That’s why at the end of my book, you mentioned the post-war settlement, I look at all these case studies and core debates and see how they were resolved by the end of the 40s. I see a kind of formation and refer to this post-war settlement for media as what really can be defined by three criteria, which is that the media will adhere to an industry defined social responsibility. So they were now meant to feel comforted by the fact that they have discovered social responsibility and are going to adhere to it. The second one is that they will be largely self regulated, or at least only lightly regulated.

Scott Ferguson: This is the same story for cinema but earlier, right?

Victor Pickard: Yeah, in fact, initially I wrote about the Paramount Decree and a similar battle took place in the film industry. With my advisor, we came to the wise conclusion that my dissertation was already too long as it was. So it was tragic that we had to cut that one out. That never developed into a full chapter.

Scott Ferguson: Just one more thing, did you read that the Paramount Decree was now struck down? It’s officially done.

Victor Pickard: I did read that. I haven’t looked at it closely though. I mean, we’re seeing the culmination of decades long activism on the right to undo what reforms were achieved during the New Deal. And I think this is another example of where that has happened. Anyways, to speak on the third piece, and then I’ll stop going on about all of this historical stuff, or at least we can move on to another historical piece. But the third piece that I think is very key, especially for debates today, is that these media organizations would be protected by a negatively interpreted First Amendment. They essentially would capture the First Amendment to further protect them from future regulatory interventions. Now, they wouldn’t always be successful in doing that. And you do see another high watermark of regulatory activism in the 1960s, where I feel like the first amendment was taken back for a little while. In fact, that’s when the Fairness Doctrine reached its pinnacle. It was being protected by First Amendment protections.

Essentially, that’s where you see media companies in particular say, “We’re corporations, we have individual rights, and that includes being protected by the First Amendment. Any regulatory infringement is a violation of our First Amendment rights.” That discourse had been around for a while, but it really crystallized in the late 1940s. And again, it was really given a boost by red-baiting, which allowed industry to basically paint even the mildest regulatory initiative as some socialistic cabal. It really drove out and stamped all of our core systems, whether we’re talking about our media system or our healthcare system. All these core systems have this lasting imprint from the 1940s when everything left of center, any sort of regulatory project, was rendered inherently illegitimate. That left us with what I refer to, especially when we’re looking at our immediate system, as a corporate libertarian paradigm. And I think that corporate libertarian paradigm is still very much intact today; although, I think we’re seeing it fall apart a little bit. I have some cautious optimism about that. However, what replaces it remains to be seen. So we could go in any number of directions from that meandering monologue but I’ll stop for now.

Maxximilian Seijo: I very much appreciate that. And I think what we find so compelling about this particular history from your first book is that it represents another way along the path of a theme on this show that has been pervasive throughout the past two years or so that we’ve been doing this, which is the American history of corporate predation, and often specifically banking predation. Whether in our last episode with Rebecca Marchiel, or others, we’ve tried to demonstrate the structure of banks as publicly constructed entities and legal entities at that, as well as the lending contracts in which they create and the resulting credit that gets allocated. We wanted to suggest that all of this is a policy question. And so, what your history provides is another path to this policy question through media, specifically a corporate media history. You chart how public structures, institutions, and regulatory agencies have produced the outcomes that we are living with and amongst.

Ultimately, I think one of the lessons of MMT is that we have to theoretically account for that within any transformational thinking about how we can move forward to altering and rearticulating these legal structures, whether they are media structures or monetary structures, which of course the rub is that money is also a form of media. So from this context, I want to dig into your theoretical apparatus. Because in the book, you do sketch some of the influences of liberal political theory on not only the general trajectory of what you call this settlement into the corporate libertarian model, but also some of the particular actors who are involved in setting up and writing these policies, and ultimately, constructing the media system that we have today. If you could perhaps take some time to reflect on some of these theoretical impulses that these actors held dear, I think we would appreciate that.

Victor Pickard: Yeah, gladly. You jarred a few thoughts as you were speaking that I’d like to start out with that I didn’t quite finalize in my previous monologue, which is that I think this critical historical approach shows that what we have inherited, and this could be true for our media system, which is obviously what I focus on, but also any of our core systems, was not inevitable and was not natural. It was not the result necessarily of democracy prevailing or best practices prevailing, but rather, more often than not, it is the end result of particular political interests prevailing over others. And so, this critical historical project goes back and recovers those conflicts, recovers that contingency, and it’s such a critical endeavor. Any activist, any project on the left, needs to some extent engage with that kind of project because that’s where we can see quite clearly that these are socially constructed systems that are the result of policy choices and policy battles.

And so, what I’m trying to do in my work is to delegitimize the system that we have inherited, to defamiliarize it, and denaturalize it. I think in order to do that, by focusing on these earlier battles, I’m also trying to flesh out what was a social democratic formation. Our political vocabulary is so impoverished in our political imagination. The United States is so constricted that we often don’t think in those ideological terms. But there have been moments where a more social democratic formation has emerged. As much as we’re dealing with these libertarian paradigms today, I’m always very clear that I don’t think of that as inherently American. It’s a very lazy narrative that libertarianism is just like in the air that we breathe or the water that we drink and that it’s just part of being an American. If you know your history, that’s patently false.

If we want to look at our postal system, for example, that’s essentially a very socialistic system that the founders of the Republic, not to romanticize them, seemed pretty commonsensical to them. So I want to go back to these moments and uncover these social democratic or socialist impulses and to also show that it took political struggle for hegemony to crystallize. It took tremendous struggle from the top down to change our commonsensical notions. And so, looking at what was going on in the 40s, the libertarianism that ended up triumphant was very much on the ropes throughout the 30s and 40s. To try to show how this trust in the market came, how this market fundamentalism crystallized, you see this ideological struggle. One site is to focus on these debates around media policy, especially since it deals with what we think of as First Amendment issues–freedom of expression, freedom of speech, freedom of the press–it really gets at some core liberal concepts.

One of the ways you can make sense of it is to look at it in terms of negative and positive liberties. I think this was very much up for grabs in the 1940s, whether the First Amendment would be seen as something that protected more positive freedoms, such as our right to things, or collective freedoms, like the fact that society writ large should have the right to a diverse and rich media system, instead of looking at it narrowly as an individualistic right and something that we should only fear government infringing upon. Not corporations, but this idea that these freedoms must protect us from government is a core libertarian assumption. Another is emphasizing property rights, protecting property rights, and treating media as a commodity and property that’s owned by this group of wealthy white men. So these are the kinds of libertarian and liberal concepts that really crystallized. And it’s not just about accommodating the market, which is so clearly what emerged from from these debates in so many different ways.

But also a real blind spot with liberalism is to acknowledge pre-existing structural inequities. Liberalism is good with coming in and making sure, at least formally, that individuals should all have certain rights of opportunity, but it doesn’t take into consideration that we’re already living in a highly inegalitarian society and that protecting individual rights is not enough to rebalance or redistribute power throughout society. This is what requires more of a radical approach. And this is oftentimes the difference between leftists and liberals, which again, in our current US political imagination, those two are often collapsed. Liberal can mean anything from someone who’s barely left of center to a radical leftist for many Americans. I think it’s useful to try to tease apart these ideological positions and look at some of the underlying assumptions that are associated with these different positions. I don’t know if I totally got to your question, but hopefully I sketched it out a little bit. I haven’t looked at that book for a while so I might have forgotten what I said in it.

William Saas: Maybe this is a good point to transition to talking about your more recent 2019 book, Democracy Without Journalism. And before we make that transition fully, I think that another thing that your project and the MMT project share in common is spending a lot of time critiquing and meditating on those ideological assumptions and presuppositions that drive economic and fiscal policy. So you mentioned that a lot of the concepts kind of crystallized in the 1940s. I wonder if you can bring us to the present and your 2019 book by helping us get a sense for how those concepts have crystallized and evolved and maybe shifted over time to provide the foundation for the really non-ideal landscape of American media policy and practices. How did we get here? Why did we inherit and why do we have today such an anti-democratic and dysfunctional media?

Scott Ferguson: I want to tack something on here as well, which is we’ve been accustomed, as scholars and organizers, to periodize the last 40 or so years as representing a certain kind of break that for a while we were calling the postmodern period, and then we switched and started calling it neoliberalism. And people will periodize it and describe it in different ways, but the story that you tell seems to be backing that you see a libertarian marketization happening much earlier. And I guess I’m curious if you could tell us, through your research and your arguments, how you narrate the neoliberal turn? Or is there even a turn?

Victor Pickard: Yeah, those are all excellent questions. To try to seamlessly continue the narrative, what I try to account for in the earlier book was this rise and fall of a social democratic media reform movement, or at least a project in the 1940s. The intellectual tools that I take out of that book and bring with me into the next book is understanding how this commercialism became so naturalized. And I agree with you, Scott, that this predates the neoliberal turn. At one point I thought a major argument I’m going to make with that first book is that neoliberalism is a much older project than it’s often given credit for. I was ready to get into this kind of periodization fight. Then, I realized that’s really not that important or interesting. I don’t want to just quibble with a handful of historians about this. Instead, I want to look at some of these broader forces, focusing on how commercialization becomes naturalized, especially within policy discourses.

If you want to say anything about how the neoliberal turn emboldened that discourse, in media policy you really see it come to fluorescence during the Reagan administration when this deregulation move–and of course, deregulation actually started during the Carter administration–but it really took off during Reagan and then continued on. Clinton in some ways did as much damage to the immediate system in terms of stripping it of any public interest regulatory constraints. But what I’m trying to show first off is that, to try to chip away at this paradigm, this idea that we need to keep government out of our media system, that there’s no legitimate role for government within our media, it is a libertarian, also liberal, fantasy. Government is always deeply involved in our media system. The question is: how should it be involved? Should it be involved in maintaining public interest protections? Or should it be there to help capital accumulate more wealth?

Of course, it’s typically doing the latter. It has been thoroughly captured. Much of what the government has done, especially around media policy, but around any number of policies, is a textbook case of regulatory captures, where the regulators themselves have internalized the values and logics of the very industries they are meant to oversee. And the revolving door is both a symptom and a driver of this process. I think this is important to understand. So I tried to bring some of that political economic analysis to our media system to again denaturalize it to show how this happened historically. What were the policy discourses that were deployed to naturalize it? And then I try to undo that damage.

My latest book is really focused on the long history of commercialism. This of course goes back, vis-a-vis our media system, to the 1800s. I look at what happened when the press initially commercialized and how that changed the relationship between the press and the public, or the polity. They began seeing people as passive consumers instead of as engaged citizens. And again, liberalism was very much part of this story. It’s very much what gave this kind of gloss to the freedom of the press as the epitome of American core freedoms. But that free press was defined in a way that basically sanctified this commercial order. And so, what we’re seeing today, whether we’re talking about what Facebook is doing, the collapse of journalism, or the ever growing power of media monopolies, all of these things trace back to this core commercial logic. That’s what I try to trace. Neoliberalism gave that logic a boost, but I don’t think you can reduce all this back to that neoliberal turn. It has a much longer history than just simply beginning in the 1970s.

One other concept that might be useful here is the idea of market censorship. If you allow a media system to be governed entirely, or almost entirely, by these market forces, you have predictable patterns of coverage, predictable erasures, predictable exclusions, what might be called “news redlining,” whether we’re talking about the digital divide, or we’re talking about how access to our news and information has never really been made available to communities of color. Or when they are covered in the media, there’s always been great violence done to them. So I feel like you need to understand that core commercial logic to understand all these surface level pathologies, or these symptoms that we’re often grappling with–and especially for left media criticism. Leftists love indulging in media criticism, but too much of it is articulated in a way where it sounds as if we’re saying there are these bad apples–bad journalists, bad media outlets, or corporate owned media–but we’re not getting to the root of the problem. We’re not getting to commercialism. Indeed, we’re not getting to capitalism. This is really what capitalism does to a media system. That in a nutshell is what I’m trying to draw attention to. In this latest book, I’m focusing on the journalism crisis, especially this utter devastation to commercial journalism in particular in the United States. In my mind, it’s all connected.

Scott Ferguson: Can you take us through a little tour of how this journalism crisis has played out? What are some of the main beats? What are the some of the main transitions? Just add a little bit more depth on that particular problem.

Victor Pickard: Absolutely. We’ve been talking in more broad historical and theoretical strokes, but here we can get into more of the nuts and bolts of it. I feel like the key is always to connect those specifics to these broader trends and forces. To just throw out a few examples, American newsrooms have been reduced by over half since the early 2000s. When we’re talking about the depth of the journalism crisis, that’s one key indicator. The number of journalists have been wiped out. And how that has played out, well, we’ve seen hundreds if not thousands of news outlets go under in the last couple decades. And it plays out specifically in how particular beats are no longer covered.

This is especially true for local journalism. Now, there are very few. In some states, there are essentially no journalists covering state legislatures, for example. Increasingly, there are no journalists covering the local school board or what’s happening at city hall. There’s still national coverage. On the surface, there still appears to be, if anything, an information glut. We go on social media and there’s this torrent of information. But if you go beyond the surface, you see that even in their beleaguered state, the base of the newspaper industry still serves as the feeder for our entire media system for original information. You go to Facebook, you go to Twitter, if you see what original information is there, and oftentimes there’s not a lot, what is there traces back to this suffering newspaper industry. And increasingly, we’re talking in terms of news deserts where entire regions and communities no longer have access to any local news media whatsoever. And of course, this disproportionately impacts lower-socioeconomic communities, communities of color, and rural areas.

Other kinds of journalism that are disappearing are international journalism, investigative journalism, policy reporting–the kinds of things that are very expensive to produce and oftentimes aren’t necessarily the sexiest stories. A story I sometimes use as an example is like the health of your local bridge. That’s not clickbait, that’s not going to sell. A lot of advertising people aren’t going to be really excited about that story. Yet that’s the kind of story that we need to know about. We need to know about the health of our infrastructures. That kind of day in day out beat reporting is exactly what’s disappearing. It’s exactly what democracy requires. The market never supported an adequate level of journalism and I’m always clear about that. It’s not as if there was some golden era that we need to return to. It was always a very shaky relationship. But now it’s a full blown crisis. We could still say that now it’s worse than it’s ever been before.

The other thing, too, that I want to be clear about when I’m talking about the nature of the journalism crisis, is there’s a kind of lazy narrative that the internet killed journalism. But this, again, is why it’s so important to historicize. The journalism crisis didn’t just happen in the last 10 years. I argue that commercial journalism has always been prone to crises. And this is especially true because of its over reliance on advertising. Historically, the American press, which has been hyper-commercialized to begin with compared to newspaper industries around the world, has been almost entirely reliant on advertising revenue. About 80% of its revenues came from advertising and 20% came from reader support. And so, what happened in the early 2000s, especially by 2008-2009 as readers and advertisers migrated to the web, where digital advertising pays pennies to the dollar of traditional print advertising, that business model was just blown to bits. It fell apart. That was clear in 2008-2009. But we basically wasted a decade thinking that there’s some way to repair that or to find another business model or technological fix. And basically, that’s not coming back. There is no commercial option. There’s no commercial future for the kind of local journalism that democracy requires.

So these are some of the ideas I’m really trying to bring to light in my book. It’s why I ultimately argue so strongly for a public media system, which I’m sure we’ll bring into discussion. But I really try to trace the history of this marriage of convenience. Advertisers never really cared about paying for local journalism. They were trying to reach audiences. And the press owners, the publishers, and the press barons–as they used to be called–were delivering audiences to those advertisers for a very pretty price. Many of those newspapers had local monopolies in their given markets. So if anyone wanted to advertise anything, they had to go to that local newspaper. This arrangement obscured the public good nature of journalism. It naturalized this commercial relationship. But once that was no longer convenient for advertisers, they jumped ship. It’s much easier and much cheaper for them to advertise online, especially when you get Google and Facebook in the game, who happened to be gobbling up what little digital advertising there is. Advertisers don’t really need newspapers very much anymore. And so, that has really brought this artifice into clear view. It also presents us an opportunity for creating something entirely different.

Maxximilian Seijo: Part of this that resonates really interestingly is the way you discuss what almost seems like commercialization as a project of abandoning the public purpose for this libertarian or liberal fantasy of a market that is or different from the public. Whereas we would suggest that, as you said, the government is always constructing the media system, and ultimately, also the banking system and so on. As we move specifically into the potential for rearticulating some of these systems through the cracks that we see everywhere now in media, can we talk about some of the specific proposals. One of the main MMT proposals in this vein is the federal job guarantee, which acts to guarantee a right to employment to anyone seeking employment at a federally mandated living wage. There certainly seems to me to be some compatibility with the problem of not enough journalists, and the potential for a solution that guarantees employment for the public purpose. And if the commercialization or advertising model was a marriage of convenience, this seems to be a marriage that could really be one for democracy. Thinking with that, and perhaps the analog hovering, what do you think about some of these specifics of public funding for media? And specifically, how these relate to the way you draw them out in your work?

Victor Pickard: Yes, well, I obviously think it’s a good idea and I think we should do it. What you are referring to there is spot on. We need to think of news and information not as commodities but as public goods and as essential public services. Journalism is an essential public service. And this is where it’s really about broadening the political imagination and changing the way we understand these core systems. And I see some leverage points even within this broader libertarian landscape. Americans like libraries. Most Americans think the idea of public education is a good thing, too. And most Americans think public parks are pretty cool as well and worth protecting. And the post office, I’ve been loving how many Americans have rallied to the cause of the United States postal system. It shows you that protecting these public goods–things like media subsidies–are as American as apple pie.

And so, rhetorically, as you all would appreciate, it’s important that we get people thinking about how these are absolute prerequisites for having any semblance of a democratic society. We all learn in school that democracy requires a free, and by implication, functional press system. But we rarely reflect on what are the necessary policies, protections, infrastructures, and even discourses that we need to maintain those systems. And I do think any crisis is also an opportunity. As we see the commercial model for the press collapse in such a spectacular way, I do think there’s growing recognition that the market is driving journalism into the ground. It creates fertile conditions to try to think about creating a new public media system, whether we’re building on some of the structures that are already there, including the Public Broadcast System. I advocate actually building on the postal system itself as a core anchor infrastructure.

So I think there are many ways that we can do this but it starts out discursively by thinking in those terms that you were just laying out. It’s this idea that we need to think about journalism, money, and jobs as things that shouldn’t be dictated by the market. They should be taken out of the market so they’re not driven by this commercial logic. Sometimes I use this analogy, and we’re all academics here so this hits a little too close to home, but imagine if this same logic were applied to academic labor. If our peer reviewed journal articles didn’t get enough clicks, likes, or shares, then we’d have to just stop doing that, do something different, or maybe worse, lose our jobs. Of course, that is happening, too. So yeah, I don’t want to speak in terms of that being merely theoretical. But for many academics, we still think that there’s some inherent worth to what we’re doing that doesn’t reduce itself to how much money it’s making. Maybe a better example is like, what if students just didn’t want to take math class? They aren’t paying for their math class so then we’ll just have to discontinue that. Or what if there’s a fire? Your house is on fire and the firefighters show up and say, “Well, you’ve got to pay up before we put out this fire.” 

There’s just so many examples of where we would never leave it up to market determination. And it’s that kind of logic that we need to not only recover but expand on. I try to start discursively with those ideas by thinking in terms of public goods. Systemic market failure is one I play around with a little bit as well. I think of this as systemic market failure. We need to claw back some of these core systems and infrastructures and put them under public ownership, which I think is where the conversation is heading and I’m all for that.

Scott Ferguson: I think I have a little bit of a dearth of imagination about what we can do about, let’s say, newspapers. What do we need to do? Do we need to fund them with federal grants? Do we need to staff them? And if we do, how do we allocate the money? How do we make sure that that staffing is equitable? I’m sure these are things you think about all the time. Can you maybe walk us through, at least in news journalism, what some of the specific recommendations you have?

Victor Pickard: Sure. I’ll start out with the ideal, which I think it’s clear in my book, but as I’m speaking on the book, and this often happens, some of your ideas really don’t actually come together until after the book is well and done and out there in the world. But I think the ideal would be to have publicly funded news cooperatives in every community across the country. That would be the ideal. And to add some flesh on those bones, these new newsrooms of the future would be locally owned and controlled by communities as well as by the journalists themselves. Some of these details need to be worked out. I also don’t think it’s my role to present a formula for everyone. I think local communities should decide for themselves. But the key part is to make sure that the institutional, and especially financial, resources are there for these newsrooms to be functional. That’s why I say publicly funded.

Now, whenever I’m talking about this new public media system, I mean public not in name only, but actually publicly owned and controlled and democratically governed. So there should be a federal guarantee. The federal government has an affirmative duty to ensure that those resources are there for local communities but the federal government also should have no control beyond providing for those resources. It should not dictate in any way how those news operations happen. That’s where we need to devolve power to the local grassroots level as much as possible. We can think in terms of news bureaus that are democratically elected. We need to make sure they’re representative of the community. We’ve got to make sure labor unions are represented and diverse communities are represented. One of the things I often say is that these new newsrooms should look like the communities that they serve as well. So we must make sure that they’re diverse in all ways.

Those are just some ideas, but it goes back to the idea that they have to be funded. They need those resources. And that should be non-negotiable. It’s not a “nice to have,” it’s a “must have.” And so, this is where I have to get into all the fights and arguments about how we are going to pay for it, which I know you guys are very much engaged in those kinds of debates. But I think we need to fund them. And there are things that we can salvage from the current system–to rescue good assets from bad owners. I’m all about doing that but I’m very clear that the first step is to decommercialize and decommodify our media system. The second step is to radically democratize it. And those things have to be done together.

In order to reach anything close to what I’m advocating for, and again, I get into this in the conclusion of my book, but I’m really influenced by the late, great Erik Olin Wright’s work on how to build this kind of socialist future from the ashes of capitalism. Actually, ashes wouldn’t even be the right term; it’s these little pockets. Again, he’s a huge fan of libraries. There are these little pockets that we can build on, these counter-hegemonic forces, and these anti-capitalist spaces within the broader capitalist system that we can try to see those potential building blocks for this new kind of system.

William Saas: In terms of the federal jobs guarantee, we talk a lot about shovel ready projects. To bring up a job guarantee, one of the critiques or the worries about that is it’ll be make-work. It’s just paying people to do jobs nobody needs to do. And of course, you look around your own community and there are thousands of things that need to be done and could provide well paying jobs. It seems like there’s an analog with the public media system that you’re talking about where there are–you talk about the ideal system, but in my community and I’m sure in y’all’s communities, too–there are plenty of great projects already ongoing that are constantly asking for money. Like we’ve got a beautiful local radio station that’s constantly fundraising. I don’t know where NPR falls in this, but local NPR stations are constantly fundraising. And I’d be remiss to not talk about podcasting, too. The meeting that we’re on right now, some of my favorite things to listen to are run by Patreon, which is not not-commercialized. But there seems to be a lot of production ready media projects and news co-ops that are just waiting to be activated that could be under the system that you’re describing.

Victor Pickard: I couldn’t agree more and I’m really glad that you mentioned podcasting. Because it’s one of those things where, in my mind, it’s clear as day. But I realized I need to articulate this, which is, when I’m talking about these future newsrooms, this future public media system, I’m imagining public media centers in every community. And those media centers are multimedia. So it’s not about producing the dead tree version of the news. It’s about all kinds of media being produced by local journalists. And so, there’s no reason why we couldn’t be funding that. If you look at it historically, then you see moments. I’m always inspired by that brief moment when you had these WPA projects get funding for everything from planting trees to subsidizing writers, theatre groups, and historians. We could do that. There’s no reason why we couldn’t do that on a permanent basis.

So I absolutely agree with you. Another example is just building out our broadband system. I mean, people are painfully aware of how awful our broadband system is. When we hear this phrase “digital divide,” it sounds like something from the 1990s. Yet it’s a glaring problem today. That’s building out infrastructure; that’s jobs. There’s so many good reasons to do a project like that. People are literally in some cases dying due to the lack of it. I couldn’t agree with you more that there’s a need. And it’s something that we could do. But it’s a political decision that we’re not doing it. And so, we need the politics in place to make sure that we do do it well into the future.

Scott Ferguson: Something I’d like us to talk about before we wrap things up is, part of your work is that you’re a keen diagnostician of the pathologies of our American media system, and especially the contemporary system. I think a lot of people have a lot of arguments about the privatization of news and information, and mediation and disinformation, so I wanted to give you the opportunity to talk about that. And I guess I’m also interested in how you see the contemporary problems around this information in relation to the longer history of yellow journalism and media moguls like William Randolph Hearst?

Victor Pickard: Yes, I think I can connect those dots. One critique in my mind connects a lot of these pathologies that you just mentioned, whether we’re talking about mis- or disinformation, or these other commercial excesses, such as what was then called yellow journalism might today be called clickbait. You can’t really say fake news anymore. That’s been so captured and obfuscated, but I feel like without harping on it too much, the core root of many of these surface level pathologies is this commercialism at the heart of it all. You could say capitalism is at the heart of it all. The fact that misinformation is proliferating through our social media, that’s not accidental. And it’s not because people are stupid. It’s actually the business model that’s driving it. It’s everything from trying to optimize engagement and collect data about it.

This phrase, “surveillance capitalism,” is now very much part of our vocabulary, although the emphasis is often more on the surveillance part and less on the capitalism part. But I think it does get at this idea that it is baked into the system. And this is what I try to argue in my book as well, that many of these problems we’re dealing with today trace back to the very DNA of our commercial media system. This is where it leads us. Not to sound too overdetermined, but if you know the long history, you see this flare up again and again. You see these excesses flare up, you see public reactions, and you see industry do just enough to make sure they’re not regulated. We didn’t mention before, this whole idea of deregulation is such a misnomer. There’s no such thing as deregulation. It’s always regulated. Again, it’s a question of how, as a society, we’re going to regulate it. That also gets to the point earlier, where I think it draws a distinction between liberalism and leftism, where the liberal solution for many of these problems is about an individual fix. Like individuals need to pay more for their local NPR station. Individuals need to be more media literate. Individuals need to deactivate their Facebook account. It’s always about what we as individuals can do. It’s not seeing this as our problem collectively. This is a social problem. It’s a collective action problem. These are the terms we should be speaking in.

So I do think that one of the discursive enablers to so many of these problems has been to naturalize the market, not see the market and commercialism as a root cause to these problems, and also misdiagnosing the potential solution, which is often this kind of individualistic, liberal approach that accommodates the market. We need to pay more for our news. It’s our fault for not paying for the news. No, society should be guaranteed access to a certain level of news and information both in terms of quantity and quality. It’s a long way of saying that we have a lot of work to do ahead of us to fix these problems.

What I also try to end on is that, as you noted, Scott, I’m very keen to point out the pathologies and I think media criticism and all forms of political critique are absolutely essential, but I don’t want to just stay on the doom and gloom. Despite all these problems, I’m weirdly optimistic about the future, at least in terms of the potential of creating entirely new structures. Especially among young people today, they’re not enthralled by market fundamentalism. There are all kinds of political openings ahead of us. Of course, we could still veer towards fascism. The future is very much open ended. But I do have some hope that there is a kind of socialist alternative, a democratic alternative, that is within reach. It’s just gonna be a long, hard slog to get there.

William Saas: Yeah, and we could still have tote bags in that future, right?

Victor Pickard: That’s right. That’s great. You still get your tote bag, absolutely.

Scott Ferguson: Tote bags for all. Well, this has been really fantastic. Thanks so much for coming on. I think all of our intuitions about the deep resonances between your project and our project have all been played out and confirmed. When I sit and hear you talk about the public foundations of media and how they’ve been privatized and commodified, and the way that, essentially, we’ve created these contingently constructed media deserts, which suggests a kind of artificial scarcity, not only do I hear money as a medium and it’s suffering from all those pathologies, but as Max brought up when we began this conversation, we think that these two things are absolutely implicated in one another. And if we want to have a democratic, socialized, and community-oriented public media system, we’re going to have to overcome the privatization and false scarcity around money. And the notion that even we, as individual taxpayers, have to cough up more from our bleeding hearts, to pay more taxes in order to have good public media, our response would be, no, this is about public provisioning. You can’t run out of spreadsheets just like you can’t run out of data. And so, the question is not if we’re going to regulate it, or if we’re going to do something, it’s how are we doing it? And what’s the best way forward? Anyway, I just wanted to close on some of those summary remarks. I don’t know if you have some final thoughts?

Victor Pickard: Yeah, no, I agree. Everything that you’re saying makes good sense to me. Also, I like that you put your finger on this artificial scarcity problem, because that’s often the problem in so many of these policy debates. I think that is something that we need to get beyond in order to push forward to a more progressive future. So let’s keep working at it. Let’s continue these conversations. But thank you so much for having me on your show. Thank you so much for talking to me about this stuff. I’ve really enjoyed it. I think there’s a lot of hard work ahead of us, but this is also fun. So please keep up the good work.

Scott Ferguson: Yeah, thanks for coming on.

Victor Pickard: My pleasure.

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).

Money After Redlining With Rebecca Marchiel

In this episode, Money on the Left hosts speak with Rebecca Marchiel, Assistant Professor of History at University of Mississippi, about her important new book, After Redlining: The Urban Reinvestment Movement in the Era of Financial Deregulation (University of Chicago Press, 2020). After Redlining tells the story of the anti-racist urban reinvestment movement in early post-New Deal era Chicago. Transforming from a focused politics of housing into a broader politics of money, the movement began in the neighborhood of Austin and grew into a nationwide effort between the 1960s and the 1980s. We talk with Rebecca in depth about the central figures and pivotal moments of this story and also about her disciplinarily unique focus in After Redlining on the central role of credit in the urban reinvestment movement. Together, we reflect on the implications of her findings for the field of U.S. political history and the lessons the contemporary left can learn from the movement’s insights and blindspots.

Theme music by Hillbilly Motobike.


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

William Saas: Rebecca Marchiel, welcome to Money on the Left.

Rebecca Marchiel: Thank you for having me. I’m excited to be here.

William Saas: So we’ve asked you to join us today to discuss your important, recently published book, After Redlining: The Urban Reinvestment Movement in the Era of Financial Deregulation, which is just out from University of Chicago Press. Perhaps we can begin by asking you to tell our listeners a little bit about your personal and professional background and how it is that you came to this project?

Rebecca Marchiel: Sure. So I grew up in Frazier, Michigan, which at the time, was an all white suburb outside of Detroit. My parents grew up in Detroit and moved to the suburbs in the 1970s. They have a lot of nostalgia for Detroit–a lot of stories about the old neighborhood. Growing up, already the importance of urban neighborhoods and the relationship between the city and the suburbs was something that was very much on my radar. But even more important for the project, I worked in fundraising and media for a nonprofit law center in Chicago right after I graduated from college in 2005. While I was working there, I learned about this 1977 legislation that was called the Community Reinvestment Act. Now and then, in my job as a fundraiser, we would sometimes ask banks to fund our programs in financial literacy or children’s savings accounts. And every once in a while, if we had a program that meshed with their priorities, we might raise some money. So I learned about the CRA from that experience.

But to jump forward about two years to when I was back in graduate school and trying to decide on a dissertation topic, it was the summer turning into fall of 2008 and I was out for a jog listening to a podcast. And I heard financial lobbyists talking about the role of the Community Reinvestment Act in causing this emerging global financial meltdown. I actually stopped running to make sure I was hearing this correctly. I knew enough about the CRA from my time in nonprofits to know that it did not have the power to produce what was turning into a global economic crisis. And so, when I got back home, I literally sat down at my computer in my jogging clothes and started searching around to see if anyone had written about the CRA’s origins. And there are some really great works by sociologists, urban scholars, and legal scholars. I was really grateful to learn about the work of Dan Immergluck, but none of them told exactly the story that I was looking for that really put the CRA in a longer and broader historical context. I was really interested in questions like, how does the CRA fit into the story of the rise of neoliberalism? How was it shaped by the Black freedom struggle and other social movements for inclusion? What did it mean in the context of attacks on the labor movement that were also happening in the 1970s? What did it tell us about white flight and the political power of the postwar suburbs?

So I started digging around with those questions in mind and was just so excited to find out that there was a social movement behind this story. And even more excitingly as an historian that they also have a treasure trove of documents in the basement of this organization. It was called National People’s Action. Now, they just go by People’s Action. They’ve dropped the national in recognition that their solidarity is extended beyond national borders. But they granted me unlimited access to the documents in their basement. I could just dig around and see what I found in there. That’s sort of how I found the project.

Scott Ferguson: Wow, that’s amazing. It’s also kind of amazing that your dissertation and your book came out of this profound experience jogging to a podcast–it somehow feels appropriate to talk about that on a podcast. So your book tells the untold story of the anti-racist reinvestment movement in the neighborhood Austin in Chicago that grew into a national and, as you say now, international movement from roughly the 60s to the 80s. Before we dive into that story, maybe you could briefly flesh out the kind of origin story, prehistory, or backdrop out of which your particular story emerges? You do that in the book really, really nicely by laying out the discriminatory politics of investment in the post-New Deal era, out of which this whole thing kind of emerges.

Rebecca Marchiel: Sure. So the story ends up being about a social movement that wanted broadly defined reinvestment. One of their demands was for an end to redlining. Redlining means the practice when banks would refuse to make loans in certain sections of a city because those places were integrating, majority-minority, or sometimes because the housing stock was old and the assumption was that the value would just continue to decline. The activists that I wrote about came of age really during the heyday of the New Deal financial regime. When they were upset about redlining, they were upset about the behavior of very specific kinds of banks–banks that were created by New Deal laws and regulations. These are historically specific financial institutions. Here, “thrifts” were the most important for this story.

Thrift savings and loans banks were really locally oriented savings and loans institutions. And as activists saw, the relationship between these thrifts and a local community was supposed to be a two way street, in that the thrift survived by collecting community savings as they saw it. And then, the thrift’s job was to act as a kind of steward of local wealth or to give people a safe place to put their money–just as safe as under the mattress but with some interest since there was deposit insurance–but also to give people access to mortgages that would help them buy their own homes. There was a particular image of thrifts as community institutions, much like the image of George Bailey’s bank from It’s a Wonderful Life. And a lot of that idea that’s forged in this post-Depression, New Deal period, comes from thrift’s own self fashioning. They named themselves after local neighborhoods, local streets, or Catholic parishes nearby. They’d open their parking lot so people could park there during community events. They’d create savings programs for children and sponsor programming at schools, like art contests. And a lot of white people seem to feel a real connection to this local thrift, this local institution.

They’d go in there to cash their paychecks or to take out spending money. This is the era before ATMs so a lot of thrift transactions are taking place face to face. And I think a lot of folks of that generation, of the activists I write about, or those of us who have parents in that generation, might understand the relationship I’m describing. It’s kind of a joke in my family that my dad is the only customer who still goes into the Comerica Bank in my town. But I think it’s more than an anecdote. I think it’s reflective of a larger historical trend of how people used to interact with these local financial institutions–face to face relationships that often felt personal and meaningful to the customers. Like they always gave me a Dum Dum sucker when I had to go in there with my dad. But it was more than thrift’s own self fashioning that created this image of thrifts being a part of the community’s social fabric. It was also the state that shaped these ideas about thrifts.

The laws and regulations that were forged during the Depression and during the New Deal really created a financial policy infrastructure that made thrifts the type of financial institution where white people of modest means would encounter most and go for their banking needs. For example, it was New Deal legislation that made sure that thrifts would lend primarily in mortgages. By regulation, they were supposed to have 80% of their assets be in residential mortgages. Thrift legislation also encouraged ordinary people of modest means to open their banking accounts at the thrift. They would get a slightly higher rate of interest than a commercial bank was allowed to offer on its accounts. New Deal regulations also standardized the long term, often 30 year fixed-rate self-amortizing mortgage, which was a huge improvement over previous generations, or previous eras of mortgage lending, wherein you’d have shorter loan terms, which meant bigger payments and interest rates that could change year to year and make it really hard to predict how much one was going to pay for their housing.

Sometimes borrowers would owe the entire principal at the end of the loan. If you think about what that meant, then you needed a rich relative, a rich friend, or maybe a second loan to afford homeownership before these New Deal regulations. For white people in the post-Depression era, this was a huge improvement in home financing. It put homeownership in reach for a lot more people of modest means. But, and this won’t surprise your listeners, access to thrifts, their savings accounts, and their mortgage products hinged on whiteness, like many other New Deal benefits. The assumption by the real estate industry and by thrifts who relied on appraisers to decide how much a home was worth was that Black residents drove down property values. Thrifts would refuse to loan in neighborhoods that were understood to be Black. They would refuse to lend to the first Black family that might move into an all white neighborhood.

To speak of the discriminatory policies in relation to being without access to thrifts and these sort of regulated mortgages that were more affordable, Black homebuyers were often left to buy on contract–the system was called “buying on contract.” And this was essentially a form of home buying that was kind of like “rent to own.” Black homebuyers would sign a contract to purchase a home and it often stipulated that they did not actually have claim to the home until the entire cost was paid off. A lot of times, if they missed even one payment, it would mean the loss of the home. They didn’t build equity through contract sales so they’d make payments over and over and never build equity. They had no wealth to take out of the house to buy a new one or to borrow and pay for something else, like the cost of school or something like that. That’s kind of the story of how thrifts function during this period.

When neighborhoods like Austin started to integrate, white Austinites found that savings and loans started to treat their neighborhood like they had long treated the neighborhoods that were understood to be Black. These activists started to hear anecdotally of a neighbor’s kid who couldn’t get a mortgage, or Black members of the community organizations started to report that there suddenly seemed to be more contract selling happening in Austin where previously it might have been happening in a nearby neighborhood but not in Austin yet. So there was this sense that these thrifts that were supposed to be a part of the social fabric of the community had really reneged on their social obligation to the communities in which they were located. As activists saw it, they really thought that their neighborhood built the thrift–that there would be no thrifts without these customers as they understood it.

This changing relationship between the neighborhood and the thrift really politicized a lot of folks and got them asking questions about home financing that white activists had previously just taken for granted. Around the same time, there was the passage of the Fair Housing Act, which was in 1968. This was civil rights legislation that was supposed to make race-based discrimination in housing illegal. It still happened, of course, but the expectation was that discrimination in housing would now be illegal. At the same time, you start to see Black activists in Austin and other communities who have an expectation that they’ll finally be able to access the benefits of the New Deal financial regime, and then they’re frustrated by the reality that they’re still not given access. So that’s a sort of origin story on the role of these discriminatory politics of investment.

Maxximilian Seijo: Transitioning then, could you introduce us to some of the key figures in this urban reinvestment movement that you sort of began to talk about and perhaps walk us through some of its key phases? Coming out of that civil rights context, what spurred the beginning of the activism?

Rebecca Marchiel: I would love to talk more about some of the central players, because there are some really interesting characters who emerge from the archive. To tell the story of this social movement, I focus more narrowly on the national network of community organizations that’s called, National People’s Action, which I mentioned is still around today under the name, People’s Action. There’s a larger movement of folks working on these issues, but National People’s Action, or NPA, is sort of recognized by contemporaries as really leading the grassroots arm–the community organizing arm–of this broader effort. And so, the story of where NPA comes from really starts on the west side of Chicago at this moment when the neighborhood was on the brink of racial integration. It was an all white neighborhood, but integration in Chicago and many other cities took place in a kind of block by block pattern. There’s a great book by the historian Amanda Seligman that explains this phenomenon really beautifully, and it’s also set on the west side of Chicago.

In Austin, a group of white residents already living there and Black residents moving in, decided to work together under a Saul Alinski-style community organization. Their goal was to try to keep the neighborhood a decent place to live, with decent and safe housing, and with viable schools that weren’t overcrowded. But most importantly, they wanted the neighborhood to stay integrated at the moment of integration rather than see it resegregate as had been the case for a lot of other nearby neighborhoods. A lot of those neighborhoods became majority or all Black neighborhoods, rather than staying racially integrated. In that effort, they developed this critique and argument that it was real estate agents and abusers who were causing problems in integrating neighborhoods. They made it a point not to blame folks along the lines of race. Instead, they argued that there were these exploitative real estate practices called “panic peddling,” also called “blockbusting,” that were hurting white sellers who would panic and sell their homes for really cheap. This would also harm Black buyers who would pay more for housing because segregated housing markets mean more expensive homes–they have fewer options and higher prices. And so, they said it was really these real estate agents that were causing harm and not their neighbors.

One of the most important figures who emerges early on is a woman named Gale Cincotta. She was a white stay at home mother and became an activist when her youngest son’s kindergarten class became overcrowded. She was really worried that if no one did anything about it, his education would suffer. So that was the thing that first sort of politicized her and got her involved in local organizing. But according to a close friend, she had already had a history of thinking about politics from a leftist angle. The rumor was that her family owned a restaurant and sometimes she listened to them talk about socialist politics around the tables of the restaurant. But Cincotta also had a really strong preference for urban living, specifically. She was not a person who loved the idea of being in the suburbs where everybody needs to be in their car–t sounded just terrible. She liked to go to bingo nights in the city and she didn’t want to have to get in her car to do it.

Also importantly, she and her husband owned a two-flat in Chicago, which is a kind of structure where you have two separate units on top of each other. They had six kids. They lived in the upper unit, and then Gale Cincotta’s aging parents lived downstairs so she helped to take care of her parents in her home. That kind of setup is also much harder to swing in a single family home in the suburbs. She really was committed to staying in the city and there were a lot of things that she liked about city living that she didn’t want to give up. But I think she was also very angry about injustice. She did not like the idea that people were trying to extract wealth from Austin. She didn’t want other people to tell her that her neighborhood was a bad neighborhood. And that sense of righteousness drove her to organize as well. She emerges as one of the key figures in Austin and then will be one of the co-founders of this national organization as they progressed through the 60s and 70s.

The second key leader who co-founded National People’s Action alongside Sincotta was a man named Shel Trapp. He was a professional community organizer, he was also white, he was known for his chain smoking, and apparently he was very good at swearing. But interestingly, he was also a former Methodist minister–who’s very good at swearing. He described his own commitment to racial justice as being really inspired by the Black freedom struggle, and specifically its iterations in the south. He thought that community organizing would be a career that would give him a good shot to achieve the social change that he wanted during his finite amount of time on the planet. So these two ended up working with several other activists and organizers and neighbors to build an interracial group in Austin starting in 1966.

You also asked to move through some of the key moments. They started this local organization. All of the demands and concerns are very much at the level of what’s going on in Austin. But when they start to organize against this real estate abuse and this panic peddling, the Chicago organizers conduct more research and they learn that there are actually new federal housing policies that are providing a financial infrastructure that really helps panic peddling. These are the programs from the Federal Housing Administration that come out of the HUD Act of 1966 that Keeanga Taylor just wrote her brilliant award winning book, Race For Profit, exploring these programs in greater detail. But the long and short of it is that activists learned that these new programs created by the FHA, that were supposed to support low income homeownership, are actually quite exploitative, and make it such that a house missing plumbing, needing roof repairs, or infested with rats can actually be an insurable home, according to the FHA’s new standards.

The activists realized that this new FHA system, these new FHA programs, have supplanted an older system of home buying and selling that whites in the neighborhoods we’re used to under the New Deal financial regime and working through thrifts. These Chicago organizers, who had been trained to organize at the local level, realize that it’s a federal agency that’s helping create some of these problems. And so, on that logic, if it’s a federal agency and they’re federal programs, they imagine that there must be other neighborhoods like theirs in cities around the country, because this federal legislation must be having similar impacts in other parts of the country. The story from NPA’s lore is that a group of organizers and volunteers actually went up to O’Hare Airport, because they thought that was the nearest place where they could get their hands on a lot of different phone books for metropolitan areas around the country.

These volunteers went up to O’Hare to flip through pages and find organizations with words like housing or community in their titles, and then sometimes just cold-called to say, “Have you seen this pattern of home flipping in your neighborhood, too?” They sort of compiled this list of organizations from there. And they also built on organizer relationships. Some of these community organizers are linked up with each other through clearing houses, training programs, and those kinds of things. That’s sort of how they move national. They recognize that it’s these FHA programs that are causing problems all over the place. As they work to stop the abuse in these FHA programs, they begin calling more broadly for reinvestment. They want these savings and loans to return to their neighborhoods, because from where they’re standing, it seemed like those regulated banks have really disappeared at the moment of racial integration. This does not seem coincidental to them.

I show in the book that even as the organizers were thinking about the role of thrifts, they were always very aware of the idea that more bank loans would not be enough to solve the problems that older urban neighborhoods were suffering from by the 1970s. These problems included: losses of good jobs, buildings in need of serious repairs, rising energy costs, and so on. It was also really interesting that in a lot of these neighborhoods a lot of elderly folks, especially elderly white people, were living in these communities as well. You also start to see the needs of urban seniors living on fixed incomes as one of the things they’re concerned about. They called for federal programs that would help themselves too, with things like reduced costs for senior prescriptions. I can’t recall now if that part is actually in the book, but there’s this awareness that there are a lot of urban seniors who need a lot of help too. When they’re talking about reinvestment, there’s always this more robust vision of public and private cooperation to revitalize the neighborhoods that had suffered the consequences of redlining.

Then, the mid 1970s is really when the movement hits its peak and accomplishes its most important, independent victory, I would say, because in the next part in 1977, they get a lot more legislative help. But with the Home Mortgage Disclosure Act (HMDA) of 1975, also known as “hum-uh,” which is very fun to say, at this moment, the members of this organization in working with allies and Congress, they’ve convinced enough members of Congress to vote for this legislation that said that depository banks–thrifts and commercial banks that held deposits–those institutions had to disclose the geographic location of where they made their loans. Before this moment, activists had been researching deeds of local government buildings and trying to gather evidence to show that there were discriminatory lending patterns. But it was almost impossible. There was a lot of legwork to try to actually document these patterns. So this new information could help them show what before they could only describe anecdotally. This disclosure law in 1975, I’d say, is really when the movement hits its peak.

Two years after that, an ally, Senator William Proxmire of Wisconsin introduced the Community Reinvestment Act–that legislation that made me almost trip when I was jogging in 2008–and this really codifies the notion that depository banks had an obligation to lend in low and moderate income communities outside their offices. The rationale here is that Proxmire really built on that 1975 “hum-duh” law. The idea was that, if you had all these activists who knew where banks were making loans, then they could hold these commercial banks and these thrifts accountable as kind of grassroots financial regulators. Then, the CRA would give these community groups some kind of standing to do something with the information that they finally had. The way it worked was that, if a bank was going to merge with or acquire another bank, then community groups could file what was called a CRA challenge. They could stall that business deal if one of the banks in question had not been responsive to the local lending needs of low and moderate income communities. This is very important for them. It creates a mechanism for community groups to really act like financial regulators. It extends the power of the state to regulate financial institutions. It also gives community groups a new tool to create partnerships with local thrifts or local banks and to try to achieve some of those reinvestment goals that they’ve had in mind for redlined communities. Things like affordable housing developments, home improvement loans, and fair lending trends on older homes–all of these things become possible to ask for with the CRA challenge.

And so, I think the turning point in the book is, after activists have “hum-duh” in the CRA, they lose their ability to shape the national legislative conversations around community reinvestment and bank regulations more broadly. Toward the end of the story moving into the 1980s, the activists moved into using the CRA as a tool for goading banks into helping them acquire more mortgage money–and sometimes small business loans too, but more often than not it’s mortgage money. The CRA is kind of an imperfect tool. It relies very heavily on community bank partnerships to repair the harm that was caused by redlining. But even with those types of restraints, it still creates some opportunities for community groups to win some impressive victories and get new mortgage money into communities where there had been no access to regulated bank loans. And then, I end the story in the late 1980s and leave it at that.

Scott Ferguson: Yeah, that’s great. Can you tell us about maybe one of the, I mean, do you call them in the book sting operations? I don’t know if that’s fair. But they did some pretty crafty stuff, right?

Rebecca Marchiel: Sure. So the activists often used rather confrontational tactics to try to accomplish their goals of increasing mortgage lending and stopping panic peddling. There was an interesting story early in the Austin part of the story when the group is still working at the local level, where Cincotta and her colleagues would sometimes do what they called, “setting up a panic peddler.” What they would do in a case like this is one of the members of the organization might call a real estate dealer, a panic peddler, to say that they wanted to sell their house, to come on over, check it out, and then they’d make an appointment for the agent to come over. When that real estate agent arrived, he would sometimes find 20 to 30 people waiting for him. In one instance, he went down into the basement and found that that’s where they’ve been hiding. Then, they would sort of badger him and tell him to stop working in Austin. And in this one case, in the basement, they surrounded this real estate dealer, so he couldn’t get to the stairs until he agreed that he would not work in the neighborhood anymore.

It was interesting, in interviewing one of the activists a few years ago about his reflections–it was a man named, Joe Mariano–I was asking him to reflect on organizing in the 60s and 70s compared to today, and that was one of the things that he thought was making it harder for activists today. He felt activists have less ability to confront people who have power face to face given the increased concerns about security and those kinds of things. So it’s an interesting tactic, but it turned out to be pretty effective in a lot of cases.

William Saas: As we move into the Volcker era, at the beginning of our conversation, you mentioned that one of your driving research questions was what’s the relationship between this CRA and the dawn of neoliberalism? I’ll just invite you to share what you found there as we move forward into the glorious 1980s.

Rebecca Marchiel: That’s an excellent question. I’d love to talk more about that. At first, I thought I was going to interpret the CRA as kind of bucking the larger trend of neoliberalism, and this seemed at first to be a way in which the state was reaffirming some social commitment to its citizens or the social good by saying that banks had to do something for low and moderate income people. But the more I thought about it, the more the CRA seems to fit more tidily into the story of the rise of neoliberalism, especially when you think about this legislation in the larger context of what activists were really asking for. There was a call for a more robust set of federal programs that would specifically target communities and people who had been struggling in American cities–a call for better access to decent jobs, affordable energy, and so on. It was a very robust platform. But what the activists are really left with is just this tiny little piece of the platform, which is a bank regulation. Read in the moment of the 1970s, the CRA for policymakers in the 1970s, it gave them an out to seem like they were doing something to support low to moderate income people and urbanites without having to address questions of federal resources or federal spending.

One of the reasons that the CRA had so much traction while these other versions of reinvestment didn’t is because, as policymakers saw, this wasn’t going to add any new items to the federal budget. Asking banks to do their part didn’t mean the federal government had to distribute resources at all. I end up seeing it more in line with the shift towards neoliberalism and privatism, then bucking the trend as I originally thought it might.

William Saas: They’re deputizing these community organizations as financial regulators, as you say, and they’re not empowered to do that much, right?

Rebecca Marchiel: Yeah, and I mean, ultimately, it’s a tool that can work. But it’s still a solution to repair the past harms of redlining that’s focused on increasing the debt of the people who it’s being served to. There’s a question about that strategy as a way to move forward to say, here’s new debt for you to manage without awareness about whether or not people are in a position to handle more debt. Maybe they need loans and to repair the past harms?

Maximilian Seijo: Yeah, I think speaking in this vein, one of the things we most appreciated about your book is the way it puts these questions of credit and debt, which is to say, money, at the heart of political history. And very often one imagines overt monetary politics occurring in a bygone past of populist movements of the pre-New Deal era. But you show how similar political impulses motivated this urban reinvestment movement during the mid to late 20th century, as we’ve been discussing. At the same time though, you’re careful to at once recover this movement’s impulses and recognize their limits. Could you spell out perhaps some of the ways you thread this needle?

Rebecca Marchiel: Thank you for reading the book that way because I did try it to be careful about that. I wanted to recover activist worldviews and their beliefs about how banks ought to behave, and to really use activist terms to describe the problems as they understood them. But I also wanted to be able to kind of zoom out, historicize their ideas, and see the ways that historically specific thought processes, ideologies, and institutions really shaped their understanding of what they were seeing. And so, one of the places where I tried to thread this needle, to use your term, was in thinking about banks as intermediaries.

In the book, I use the term the “intermediary myth.” Activists made this claim that they had the right to exercise some influence over thrifts, and eventually they’d say this about commercial banks too, because thrifts were lending their money. That’s the language that they used. That’s our money. And they argued that, as depositors who held savings accounts or passbook accounts at those banks, the money that banks were lending out was literally their dollars and cents being transferred from their savings account into someone else’s mortgage. That’s kind of like that famous moment from It’s a Wonderful Life, where your money is in Joe’s house and yours is in Mrs. Smith’s house, or whoever their names are in that bankruptcy. I was actually reading David Freund’s recent work on monetary orthodoxy and Mehrsa Baradaran, who helped me to think about whether or not this claim of “it’s our money” actually reflected how things work.

I’ll be honest, that’s how I always thought about things, too. I hadn’t really thought much about the relationship between deposits and loans before I started working on this project. I hadn’t thought about banks at all. I was kind of like, “Oh, my goodness, I have to learn all of these things in order to contextualize this social movement. What am I getting myself into?” So I learned from those works, and also following along conversations in Modern Monetary Theory groups, there are folks who’ve been really generous in answering my questions. I learned about the ways that banks create money. It wasn’t that this is our deposits going into Joe’s house–banks create money. The intermediary myth, the way that activists understood banks, it really ignored the reality that financial institutions create money when they make a loan. Actually, embarrassingly, I use the word debit in the book when I should have used the word credit. So I apologize to any MMT listeners who might read the book and know this is banking 101 but there’s always room to learn and grow.

But this intermediary myth really matters because banks are doing the work of the state when they create money. A loan brings into existence new spendable money that’s backed only by a smaller dollar amount in reserve and activists seemed to overlook this idea that banks were creators of state backed money–that thrifts, and banks more generally, were doing the work of the state. At the same time, banks and thrifts had the luxury of acting independently of making their own lending choices without much of a mandate from the state even though they were doing a state function. And so, the decisions that they made really had enormous consequences for resource distribution in the United States. And those choices also had enormous consequences for people living in neighborhoods like Austin.

If St. Paul Federal of Austin decided they wouldn’t make mortgages in one corner of the community, it meant property values could go down there and also meant there might be more vacant or abandoned buildings. If Tolman Federal said they weren’t going to make home improvement loans in that neighborhood, it could mean that a house otherwise in decent shape but needed a new roof might be really hard to purchase if you’re a person with modest means. So even though thrifts and other banks were doing the work of the state in creating money, all these thrifts got to make atomized and independent choices, and in doing so, they really shaped the obstacles and opportunities for people living in neighborhoods like Austin, where people wanted Austin and other neighborhoods to remain good places to live with decent and safe housing. Thus, when an activist said “that’s our money” about a thrift, they weren’t exactly right. A new loan doesn’t literally come from their deposits. But those claims are nonetheless persuasive because they were rooted in what I call the “financial common sense” of this New Deal financial regime.

By that I mean a lot of Americans, including many members of Congress who needed persuading, thought this way too–that it is our money that’s being lent out and goes into Joe’s house. I tried to take seriously the reality that this myth about banks as intermediaries obscured some important truths about banks as creators of money. But it also really mattered because the myth was a powerful one that had really consequential results to help persuade members of Congress to support new legislation. Because those policymakers also believed in the idea that thrifts moved the community’s money around. And so, of course, Gale Cincotta and her neighbors should have some knowledge about where their money was going or not going.

Scott Ferguson: Maybe now we could walk through how neoliberalization really changes the politics and economics of this history? I guess I’m thinking of at least two vectors, one being deregulation. What happens to the thrifts through deregulation processes? And then, at the same time, what happens with the Volcker shock, the rise of monetarism, and the decision of the Fed to try to control interest rates and really jack them up and supposedly try to combat inflation or stagflation?

Rebecca Marchiel: Yeah, so in the instance of deregulation, what I found was an interesting story in which, as activists are making these demands for reinvestment and trying to double down on this New Deal, George Bailey-vision of local financial institutions that are rooted in specific communities, they unknowingly enter this larger debate about the future of thrifts. And it’s a debate that’s being shaped by instability in global financial markets. It’s a debate that is being shaped by concerns about inflation and questions about what interest rates should do to try to address inflation. But as I tried to chart it in the book, you have one group of free market enthusiasts and their allies in congress who think that the way that savings and loans have to weather this unpredictable 1970s moment and its high interest rates is that savings and loans need to become more competitive. They need to act more like commercial banks, they need to have more powers to lend, and they need to not be tied so closely to mortgage lending, in part because if they make a lot of loans or issue a lot of mortgages at a moment of high interest rates, and then 10 years down the line interest rates are much higher, savings and loans are locked into those mortgages at lower rates, and it becomes difficult for them to keep up.

And so, with this group of free market enthusiasts operating from some principles laid down in a 1971 document called “The Hunt Report,” they’re calling for deregulation and saying that thrifts will be able to survive if they are given more freedom to lend in new ways. At the same time, there’s another group of folks in Congress who are calling for a very different vision of how the financial system should respond to this instability in the 1970s. And those folks are calling for more state mandated lending that will look like credit allocation. It’s the idea that Congress needs to become more involved in the way credit is being distributed through the banking system to ensure that hospitals and affordable housing and farmers are getting the loans that they need in order to survive. And so, early in the 1970s, these free market enthusiasts don’t have quite the audience or the votes that they need in Congress to see their vision come to fruition.

Activists, really unknowingly, start to sound like the folks who are calling for credit allocation. They don’t realize that those conversations have been going on before they get to come to Congress in 1975 and ask for “hum-duh.” But by the end of the 1970s, there is an opening because the economic downturn of the era had lasted for so long. There are more members of Congress who are starting to say, “Maybe we need to experiment with something new.” And you also see the emergence of a new regulator of the thrifts through the Federal Home Loan Bank Board. McKinney, who sees it as his goal to help the thrifts survive this period, he imagines a way to do so that is speaking the language of reinvestment by saying that the thrifts will provide services to low and moderate income people, while at the same time asking Congress to grant increasingly liberal lending opportunities to the thrifts who had for so long been tied tightly to the mortgage market. And so, by the end of the 1970s, there is this push to follow the Hunt commission’s 1971 recommendations and let thrifts try to compete as the way to reform the industry.

I don’t remember how much I go into this in the book but there is a real separation between the big thrifts and the small thrifts about whether or not those executives are excited about this possibility, because a lot of the smaller institutions recognize that they’re not going to survive. They’ll be merged or they’ll go out of business as the brave new world unfolds in front of them. For activists, they gain the Community Reinvestment Act in these tools, but they do it at a moment when thrifts are behaving less and less like community institutions. And they increasingly have to rely on commercial banks to partner with them for community mortgage programs. And those commercial banks did not have the same kind of institutional culture that focused on service or community the way that the thrifts had. And so, it’s really an uphill battle, such that in 1979, the activists staged a protest at the American Bankers Association’s annual convention to try to demand more responsiveness for the CRA. A lot of the bankers in attendance didn’t even know what the CRA was even though it had been a law for two years. So there’s this moment of recognizing that getting what they need from commercial things in this era of deregulation is going to be quite difficult. 

There’s another interesting moment during the Volcker shock wherein activists are trying to make the most of the CRA by that point. And what they realize is that in an era of high interest rates, it doesn’t matter if a community bank partnership has been forged and banks are willing to make loans. If interest rates are 15%, then the interest rates are essentially pricing neighborhood folks out of being able to get the loans that a bank might have promised. At that moment, the NPA and some of its allies really start to target the Federal Reserve. They see Paul Volcker and the Fed as having the power to bring down interest rates to ease up on the monetarist experiment. And they say that the Federal Reserve is already controlling credit by allowing interest rates to be so high. So they raised the question: credit control in whose interest? There is already credit control and we need it to work for us instead of for more elite and wealthier people.

At one point, the activists in April of 1980 organized a protest outside the Federal Reserve building in Washington DC to confront Paul Volcker in person. This is an instance where there’s no corroboration in the records about how many people were there; activists say there were 2000, local police say it was maybe 350. But they carried signs that said they were at Volcker’s loan shark headquarters, accusing him of exploiting people because of these high interest rates. Also, one of the protesters involved was this guy named Richie Gallagher who had a friend who worked for Saturday Night Live. They borrowed the land shark costume that was famous from that era and brought it to the protest to have someone drive home the point that Volcker was a loan shark.

Out of this moment, you can imagine activists don’t have very much success trying to target the Federal Reserve to bring down interest rates. They do get a few hearings and a few meetings. But throughout this conversation, Volcker’s Fed repeatedly made the claim that they were not a political decision making institution–that those kinds of political questions about resource allocation were best left to Congress. And so, as the wonderful historian David Stein has shown, in making these claims, the Fed was really ignoring its historic mandate that it was supposed to combat unemployment as well as inflation, in which fighting inflation was the priority at this time. In the end, the NPA does not win this particular fight with Paul Volcker. But what they do walk away with is the sense that a democratic president, Jimmy Carter, appointed this person to the head of the Federal Reserve who is not going to look out for the best interest of working class people. For them, this was a lesson in the bipartisan nature of the shift towards neoliberalism.

William Saas: Awesome. So like several of our guests, you and your work is particularly geographically specific. How would you say that you treat regional history, and why is it important to your overall project?

Rebecca Marchiel: Well, when I first started working on the project, I thought I was seeing activists respond to changes that were specific to the Rust Belt. A lot of older industrial cities in the Northeast and Midwest had these neighborhood groups and these patterns of racial integration and resegregation that looked similar in Buffalo, Cleveland, or Detroit. And in large part that was because the policy framework that structured profit making opportunities to flip houses from white to Black owners was a national policy framework. But then I realized there were other neighborhood groups in my sources from places like Richmond and Atlanta, San Antonio and Birmingham, and some in California like in Oakland and Los Angeles. So I started seeing some of these big and medium sized cities in the Sun Belt where activists were also talking about similar patterns. That raised questions for me about how to characterize what I was seeing in the sources. It seemed it wasn’t just a Rust Belt story.

Then, looking at the language used by these activists, I started to pay more attention to this term, “transitional neighborhood” that many of the activists used to describe their own communities. People would use this term to suggest a neighborhood that occupied both a spatial and imagined middle ground between the suburbs and the “inner city.” These were often largely residential neighborhoods within the city, or sometimes they would be inner ring suburbs, like Oak Park, Illinois, which is the first suburb outside the city’s limits on the west side of Chicago. It was in these transitional neighborhoods that redlining was really a common occurrence. Here, it was really the metropolis–when I was thinking about the importance of the region, it’s really the metropolis, the city and the suburbs together, that mattered more than the Rust Belt, per se. I thought what was really significant to my reading about transitional neighborhoods was that there seemed to be emerging from the sources a shared political worldview that was rooted in the shared experience of living in a transitional urban neighborhood. For folks looking at urban renewal or highway construction, those phenomena and those federal decisions look different in a transitional neighborhood than they might in a suburb or in other neighborhoods of the city.

I was really thinking about a lot that I learned in the existing historical scholarship about the way that the experience of living in the suburbs for white people shaped their aversion to government intervention. A lot of whites in the suburbs associated federal programs with handouts for the undeserving and couldn’t really see the ways that they themselves had benefited from state programs. But in transitional neighborhoods, these processes look very different. Folks living in transitional urban neighborhoods were very aware of the ways that federal policy bolstered residential segregation, or that federal programs, like the FHA programs that I talked about earlier, some of those actually made it harder to live where they live. They actually reduced their quality of life. And so, while many white suburbanites didn’t really see the hand of the federal government, or the role of structural racism structuring their lives out in the suburbs, folks in transitional neighborhoods are very attuned to the role of the federal government and the role of racism stacking the deck against them. I think that transitional neighborhoods were the instance where attention to place was really important to me, more so than a geographic region of the US.

Maximilian Seijo: Moving forward from there, we’re wondering how you see your book contributing to the field of history itself, including the subfields in which you work? In your eyes, what have historians overlooked? And what does your particular case study make newly thinkable for writing history specifically in the future?

Rebecca Marchiel: Well, for urban history, I tried to show a concurrent storyline that was happening alongside the story of white flight, because a lot of the stories of white flight chart the influx of African Americans from the south and an exodus of working and middle class whites who moved to the suburbs and brought their tax dollars with them. Sometimes the assumption built into this narrative is that Black people left in cities were left behind using cities as laboratories for innovative politics, but seemingly because they had no choice but to make do with what they were left with–underfunded governments, shrinking job pools, and growing crime. And so, with that narrative I feel the spotlight is often on the power of suburban white people and all the material and political benefits of suburban living, and that can sometimes make it difficult to imagine that anyone might have chosen to live in postwar American cities if they had the option to. I think that bringing in the story of the way that financial deregulation and attempts to win free investment helps us make sense of the obstacles and uneven access to resources that shaped some city people’s efforts to preserve the places where they lived. So I’d say that’s the contribution in urban history.

In political history, my research reveals other developments that occurred alongside the conservative ascendancy. And those are the histories that often seek to explain the rise of conservatism in electoral politics, and often most visibly in Reagan’s election in 1980. That scholarship sometimes seeks to explain the fraying of American liberalism during the late 20th century. And sometimes working and middle class whites, like the folks who joined the reinvestment movement, will be seen playing a starring role in which some historians think of them as by the late 1960s changing the Democratic Party much the same way they were changing cities by leaving. In my work, I try to suggest that place was really important to this moment of political transformation, given the focus on suburban voters, national elections, and the conservative ascendancy story. Sometimes the playspace politics of the reinvestment activism and other kindred spirits is absent from some of our stories. But what I try to show is that these activists from transitional urban neighborhoods who are thinking about life in the cities, they embrace a populist politics that was opposed to power brokers, whether they be politicians or thrift executives. But all of those people they thought had power used that power to write off their neighborhoods as risky places with no future.

I call this their “strand of social democratic populism” in the book. They demanded that social priorities trump profit motives. As I see it, they came to understand that there was no home for their vision, for their politics, and for national political parties by the end of the 1970s, as I mentioned with their take away from that Volcker moment and the fact that Carter was the person who had appointed him. But their local organizing for urban reinvestment shows the persistence of this social democratic worldview even late into the 20th century and early 21st century in cities. So even as conservative politics gain traction in the suburbs and in Washington, you still see this social democratic worldview among some urban organizers and city dwellers. Seeing the rise of folks like AOC or Rashida Tlaib in Congress, it’s no surprise that they represent urban communities. We almost don’t stop and think about that reality. But they share a lot of the ideas that many urban activists and city dwellers held throughout the late 20th century, and there’s been this kind of continuity of social democratic populism in some of these spaces, even as national electoral politics has rejected these ideas from national political platforms.

Scott Ferguson: Getting back to the potentials and limits or blind spots question, I think about the work of Jakob Feinig, our friend who we interviewed several podcasts ago. He’s trying to tell a story about democratic monetary politics and populism in the United States before the founding. And he sees the New Deal as a compromise–and of course it is in many ways–on the money question where the the Roosevelt administration and that Congress were ready and willing to think and make big legislation and reshape the world anew, but basically foreclosed the big questions about how money is organized, who has control of it, who doesn’t have control of it, and so on. And this is a messy history, but I wonder to what extent the social reinvestment movement you’re talking about doesn’t have a national rhetorical purchase as we move into the 80s. Because that money question, in a deeper way in terms of its endogenous creation, had been foreclosed for so long.

Rebecca Marchiel: I think that’s very persuasive. No, really. I’ve read Jakob’s work. And I’m a big fan of his piece on the moral economy of money. I think that bears out what I found in these sources too. In terms of some of the limits they have when they get to that Volcker moment about what demands they might make on the Federal Reserve, they’re asking for things like a secondary discount window. And they’re asking for things like lower interest rates that the Fed would give to commercial banks that would agree to lend to them. But at no point do they say, money is a social relation or money is something we all need. Foreclosed is exactly the right word to describe what you see in the 70s and 80s. I think it’s consistent with Jakob’s work too because the effect of having some of these regulations and this financial infrastructure put in place starting in the New Deal for a lot of people seemed to be working pretty well through the postwar period, especially for a lot of white people. And so, they came to see the way that it worked as the way it was supposed to work. This was the new common sense. Those older questions about what is money and who ought to control it did not seem to be on their radar.

Maximilian Seijo: One of the lessons that I really take from your work, Rebecca, is that social movements around money and around banking and finance ought to be historicized very particularly and thoroughly. Coming then through the looking glass of neoliberalism, you mentioned Rashida Tlaib and Illhan Omar, it’s interesting thinking about today and the paradigm crisis around banking and finance that we seem to be going through in the COVID-19 crisis and depression as perhaps a new moment for learning from the social movements that you have just told us about–that his reinvestment push is perhaps being able to transform some of their limits, but also really honor the approach that all of these activists take. And so, I suppose that’s not much of a question but more of a compliment and framing for the work that you do in the present.

William Saas: How do we get Powell in a basement…just kidding.

Rebecca Marchiel: Yeah, thank you. Thank you for saying that. I agree, it’s sometimes hard to take one for one lessons from the past. But the lesson that everything needs to be deeply historicized is one that I definitely agree with.

William Saas: Are there any specific lessons you think folks might draw on in left social movements today from this social reinvestment movement?

Rebecca Marchiel: Well, I guess one thing that comes to mind is the way National People’s Action was a reading, writing, and thinking organization. Folks have said about the 20th century populace that a lot of their organizing had to do with educating members about how redlining worked, how the FHA worked, which Federal Bank regulator was responsible for overseeing which kind of banks, and what does the Federal Reserve do? This was all information that the Chicago organizers, Gale Cincotta, Shel Trapp, and their colleagues–the folks at the helm of NPA–they compiled this information and disseminated it to their members. A lot of those member organizations worked on local issues most of the time. And so, folks who might have joined a local community group because they were mad about dog poop all over the sidewalk of their Denver neighborhood would also learn about redlining or the Federal Reserve and how they might spot redlining and what strategies they might use to combat it.

And so, in the current moment, the first thing that comes to mind is the folks who are connecting local community needs like problems of unemployment, especially in the midst of the pandemic, school funding, health care, and linking those local problems to the federal government’s ability to issue currency. I think that those folks are probably on the right track if you follow the model of a reading, writing, and thinking organization. I also think we’re just so lucky that Stephanie Kelton’s The Deficit Myth just came out when it did since it’s such an accessible primer for folks who want to understand how it is that the United States can be such a rich nation with so many resources, but still have so much suffering. Kelton really takes down these myths about federal spending and the impact of the federal deficit, and then gives readers or organizers a different and an evidence based way to explain how the federal budget works. And it’s a description of the federal budget that can provide resources to accomplish what people need to live in dignity and security.

So I guess that’s what comes to mind making those connections. I will say there are some amazing organizations and organizers doing that kind of work right now, like Fed Up, today’s People’s Action, and the work of folks promoting that Uni proposal, as y’all have been doing, asking universities to see the shared interest they have in appealing to the Federal Reserve to survive COVID-19 rather than asking students to come back to campus so they don’t lose revenue from student housing and fees. So some of this work is being done, but there is a long way to go. But I still think that there are some reasons to be optimistic even in these grim times.

Scott Ferguson: Well, Rebecca, thanks so much for this incredible conversation. Congratulations on your new amazing book. Everybody should buy this and gobble it up as soon as you can. Thanks for joining us!

Rebecca Marchiel: Thank you so much for having me. I really enjoyed this conversation.

William Saas: One thing before we go, what was the podcast? If any of our listeners are like me, they’re gonna need to know what you were listening to in 2008. 

Rebecca Marchiel: Oh, you know, you know…

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).

Resisting Predatory Finance with Raúl Carrillo

Organizer for economic justice and scholar of law, race, and money, Raúl Carrillo, joins Money on the Left to explore the promise of the public money framework for advancing antiracist, anti-imperialist, and democratic politics across the world. We discuss how the public money or MMT perspective shapes his work as an attorney fighting against predatory finance and for an international, rights-based approach to full employment. A significant portion of the conversation is also devoted to Raúl’s ongoing critique of the “taxpayer money” trope in U.S. political culture. In both his recent article for the UCLA Criminal Law Review and a 2017 piece (coauthored with Jesse Meyerson) for Splinter, Raúl persuasively shows that the myth of “taxpayer money” is not only incorrect in operational terms, but also a significant threat to marginalized communities and a major rhetorical obstacle for progressive politics. 

Raúl Carrillo is an attorney, chair of the board of the Modern Money Network, Research Fellow with the Global Institute for Sustainable Prosperity, and member of the advisory board at Our Money. You can read his article for the UCLA Criminal Law Review here: See his article on “The Dangerous Myth of Taxpayer Money” here:

Theme music by Hillbilly Motobike.


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

William Saas: Raúl Carrillo, welcome to Money on the Left.

Raúl Carrillo: Thanks, Billy. I’m really happy to be here–long time hype man, first time participant.

William Saas: Thank you so much. It’s a long time coming. And we’re really thrilled to have you here. As we normally do, we’d like to ask you to start by telling us a little bit about your personal, political, and professional background as they relate to your appearance on the show today.

Raúl Carrillo: Sure thing, Billy. I’m on this podcast in my capacity, as you all know, as the co-chair of the Modern Money Network, the power vacuum behind the throne so to speak. But I’m happy to walk through my journey and how I got to MMT, which is rich and a little bit unique, just like everybody else’s. That’s sort of how it happens. You don’t come into heterodox economics, much less heterodox interdisciplinary studies, without a wild ride. So I’m happy to take it from the top. I grew up in the US Mexico borderlands, southern New Mexico, west Texas, which is where my folks have been for a very long time on both sides. It is a financial as well as biophysical desert. I grew up in a lot more relative material comforts compared to my community, my family, and my friends, but that allowed me to start to gain an appreciation of the wide gaps between the level of wealth, income, and resources in our area versus others. And so, I’ve always had this economic justice bent given my own family’s history, which has always been focused on racial justice.

I grew up on the stories of the Chicano civil rights movement, the Poor People’s Campaign, alliances with Black activists in the south, as well as stories about indigenous rights. I started to study economics when I got to college in order to better understand the extraction and massive inequality that I had seen back home in the United States and during my time in Mexico and other places. For me, it’s always been about intertwined injustices. When I was studying economics in college, the bottom fell out in a way like it does with everybody else. I was an undergrad learning about why all the things I believed in weren’t technically feasible. For me, this was instruction from a lot of the folks who have written textbooks; a lot of people who had made a career out of capturing political energy, filtering it through neoclassical or orthodox economics, and constraining it. That is essentially what happened to me as an undergrad–upwardly mobile dreams of people of color are cast in a certain way and the economics that attends that is a neoliberal set of economic ideas. So when everything fell apart, I couldn’t explain to anybody back home why things happen the way they happen despite all my time with these economists. This became increasingly frustrating. And so, I turned more broadly into the social sciences and law in particular.

The first MMT thinker I ever read wasn’t Dr. Kelton or Dr. Tcherneva, even though I’m very close to both of their work at this point. It was the work of William Black, who is a law professor and white collar criminologist that wrote a book called, The Best Way to Rob a Bank Is to Own One, after the crisis. He also has an interesting life. He was an assassination target of some financers back during the savings and loans crisis. He has traveled across multiple continents. But what he did that was special to me–and he wasn’t the only one who did this but he was the first one I was introduced to–was to connect some grand theses about austerity and public finance to predation. And I’d say that this is the site of my work today. Again, after the crisis, I abandoned economics in general and then went into law. I spent some time working in California on the multi-state mortgage fraud settlement. Then, I went to law school with a financial reform and racial justice lens. I didn’t really understand money or the deeper roots of the financial system, although I very much wanted to. I was lucky enough to meet Rohan Grey in law school. He was a year ahead of me and had already formed the corpus of the Modern Money Network. Over time, we turned that into what it is today with the help of y’all and many, many other great folks.

Maxximlian Seijo: As you’re alluding to already, you clearly work across myriad areas of law and political economy, and when we were preparing for this conversation, we tried to pour through your work once again and articulate a more or less single thread that links to various projects, which you’ve done just now in one framing and fashion. In our reading, it seems that your work insists that really we can only fully detect, resist, and overcome racism across the globe in a powerful and systemic way if we adopt the public money lens, or the Modern Monetary Theory perspective, which we all variously share. Would you consider that to be a fair assessment? And perhaps could you say more about how you came to this particular conviction?

Raúl Carrillo: Absolutely. Thanks, Maxx. I think that’s a fair encapsulation of the aim of my work as a scholar, organizer, activist, and someone who’s in this space with y’all. For me, certainly my focus has been race. Again, that’s the background and the lens through which I came to this, but it’s more about predation and depression in general, and the monetary architecture that creates those dynamics and lends itself to the exploitation of people of color but also any folks who are marginalized or oppressed in myriad ways. A lot of people have done some really great work about austerity, financial regulation, and social reproduction theory, for example, Zdravka Todorova, Donatella Alessandrini, and others who have been involved in the MMT community. I came to start focusing on race again because of my background, but also because it struck me that knowledge of the monetary and financial system has been used as a cudgel against movements for racial justice, social justice movements for emancipation, and other more egalitarian aims.

We discuss all the time how the “pay for” question is used as a trump card, but it’s really used as a trump card in specific contexts. Usually, it’s to tell people of color or other people demanding rights to shut up. That’s not the case when we think about, for example, the broader security state, the military, the surveillance state, war, incarceration, deportation, etc. The right wingers demand blank checks for the security of a small group of people that they imagine are deserving of care. I know you all touch on these things in MMN-HD especially, but that is also a guiding premise of my work. Having studied how Wall Street and Silicon Valley prey on people, working in a field on how public money finances rights, social justice, socialism, or to paraphrase Dr. King, you can call it whatever you want but it’s a system within which all of God’s creatures are entitled to a certain amount of resources, you really have to confront the monetary architecture. To stop the predation, you have to have a vision of abundance that cuts at the very roots of why the predation happens in the first place. For me, MMT crystallizes that in a way that most other bodies of work and thoughts across the social sciences withhold from doing.

The way that I frame it is that it is extremely difficult to have your eyes on all the balls that are in the air right now. We can’t afford to be in silos as far as movements go. We need to be talking about the holy trinity–race, gender, and class–but also immigration, nationalism, surveillance, climate change and ecology more broadly all the time. And so, the way I try to approach talking to fellow activists, fellow organizers–especially those working towards racial justice–is to try to meet folks where they’re at and also come with an open mind as to what I might learn. I think there’s a tendency, especially among the white Left, to zoom in on the organizers or just everyday people trying to make their communities better, and think that they’re not demanding a certain thing because they don’t get it conceptually. However, I don’t think that has been the case in my experience.

I was a financial regulator after law school. Then, I was a direct services attorney for three years. I worked in an organization in New York where we had a financial justice hotline where folks who were experiencing problems with debt collectors, landlords, or credit bureaus, problems of financial nature, could pick up the phone and call and ask for help in English, Spanish, and sometimes Mandarin. What I remember is that people on the ground have an extremely sophisticated view of money. I remember that from my community, my family, and from other folks. Because that was brainwashed out of me by neoliberal economics, which forces MMT into a position where it’s explaining things that strike people as really jargony and aren’t always articulated in an inclusive register despite the great work that a lot of us have done here and despite the great work that Stephanie Kelton has done, etc.

And so, I think that poor folks across the board, they’re used to making money to pay off loans. They understand where every penny has gone. In my experience, when you talk to people about the public nature of money, even not necessarily MMT, but whether it be public banking, complementary currencies, or another kind of economic development initiative, people actually get it. It’s no more counterintuitive than the premises of Orthodox economics, which are like, assume there is an apple and two white guys on an island and they’re redistributing the apple back and forth, and there’s no society. This is not a good model for analysis in the social sciences, as we can go on and on about.

What I try to do when I engage with folks on the ground, which is maybe a little bit different from when I engage with critical race theorists who have a different jargon problem, is that I tell folks I think you know that money is a public thing, that money is a government thing, and look at how the system is jacked in all these different ways. And people get that. Academics sometimes have a little bit more trouble, partially because they’re locked into the tropes of their own interlocutors, for which I don’t blame academics of color at all. Nor am I here to say that I have all the answers. But I do think that when you massage, interrogate, or just get in conversation with a lot of things that critical race theorists say, for instance, the assumptions are there, and they just need to be teased out.

For instance, there are tons of critical tax scholars who have talked about the ways in which white taxpayers do not necessarily see taxpayers of colors as part of the same social class. And yet when it comes to the macroeconomics or political economy, we still find the tropes of taxpayer money, of the deserving benefit recipients, as Angela Harris at UC Davis says–and that’s to credit Professor Harris on bringing in MMT and interrogating it in a very constructive way compared to some other theorists. So, I think the seeds of thinking about money, more critically, are already in a lot of critical race theory. From my understanding of feminist legal theory, they’re also there as well. What needs to happen is an evolution in the bridging more so than necessarily a course correction, if that makes sense.

Scott Ferguson: I really appreciate that. I’ll say in my own experience just talking to folks in my own community, they tend to have an easier time than a lot of academics I know who I try to talk to about it. Because they can begin with like, “Oh, yeah. Money comes from the government. I guess that makes sense.”

Raúl Carrillo: Yeah, I mean property comes from the government. Whether a contract is a contract is something that comes from the government. All of these basic things that construct our society that economists want to say are brought from the market or whatever it may be, once those people take a minute, they get it. So why would money be so much different than all these other things that leftists and social movements interrogate every day?

Scott Ferguson: Absolutely.

William Saas: Let’s stick with taxpayer money for just a little bit. This is an area that you’ve consistently set your critical sights on, talking about the political and legal construction of the taxpayer as a racialized and racist identity. Recently you published about this in the UCLA Criminal Justice Law Review. Before you published something in Splinter Magazine with Jesse Myerson, called “The Dangerous Myth of Taxpayer Money,” which, by the way, I’ve found to be a very useful article to use in the classroom, so thank you for that. Could you walk us through your argument here and while we’re also on the subject of reception, maybe reflect a bit about how people intuitively understand the publicity of money? Is it the same case with the taxpayer money versus public money argument?

Raúl Carrillo: Yeah, excellent bundle of questions that I really think is particularly important and I’m happy to talk about this right now because of the moment that we’re all experiencing with the uprising and all the very courageous movements shaking what’s going on around the country. This figure, the legal and cultural figure of the taxpayer, is very central to the creation of mass incarceration, the policing system, and the general security apparatus that protects private property. This is obviously not just my insight. My friend, David Stein, the very first guest of Money on the Left, will tell you that. Virginia Eubanks, a scholar of surveillance, will tell you that as well. And many, many, many other people will. It’s no secret that in the United States taxpayer forces have often been reactionary.

I think the best encapsulation of this vision that I’ve come across thus far is the book Racial Taxation by the legal historian, Camille Walsh at the University of Washington. Dr. Walsh has done us all a great service by actually going back into court doctrine, digging into archives and letters between supreme court justices, and finding out the extent to which the figure of the taxpayer, taxpayer money, or taxpayer rights in terms of taxpayer citizenship, is central to the story of the failure of the liberal vision of integration in this country. One reason for that is in order to prevent schools from being segregated, a lot of reactionary forces just reverted to the cultural primacy in the United States of the idea of the taxpayer, of protecting taxpayer funds, and having local fiscal control over that which we consider to be critical to society or to social reproduction.

Just to give a little bit of background on Walsh’s book because my work wouldn’t exist at all without it, Jesse and I wrote this Splinter Magazine piece a year before Dr. Walsh’s book came out, but her book absolutely fundamentally changed the game. Dr. Walsh tells the story of racial liberalism of the Warren court just as much as she tells a story about taxpayer money. For Dr. Walsh, the attempt by the judiciary during the 50s and 60s to not integrate analysis of identity with analysis of economics, as you all discuss frequently, resulted in the material failure to integrate schooling and eventually led to a loss in the journey of Chicano civil rights activists, children, families, and educators in South Texas to achieve equal funding at schools. Essentially, our team in this lawsuit, which was called San Antonio vs. Rodriguez and heard in 1976, had folks who were Mexican-American in Chicano schools alleging that their fundamental constitutional right to education was being violated by local property financing, or a predatory property tax financing scheme.

To an MMTer, of course, that makes intuitive sense. Like if something is supposed to be a right, or something is supposed to be of critical importance, then why is it not supported by the power of the public purse? Essentially, they were saying, we do not have equal schooling because we do not have equal funding, and thus our rights are being violated. What happened in that case, as Dr. Walsh outlines, is extremely interesting and important. Justice Powell, who was formally the superintendent of a local school board back home, turns out is extremely interested in this case and is having back and forths with representatives, taxpayer associations, and other reactionary folks. His ruling eventually stands on the idea of taxpayer money, saying it may be true that under some state constitutions, or perhaps even under the federal constitution, there is a right to education, but that doesn’t trump taxpayer rights.

That’s not exactly the whole thing but that’s what’s important for this conversation. It’s no lie to say that the federal fundamental right to education died at the feet of the taxpayer money trope. And in our fight for new rights now, that is extremely, extremely important. I hope we can discuss that in a little bit but I would like to circle back to this UCLA article and the abolitionist moment in general. So right now, we are seeing calls to defund the police, which while it can be perceived as an abolitionist demand, is not necessarily as I understand it from folks like the organizer, Mariame Kaba. Of course, the question is, after you defund police, what do you fund? What do you invest in and at what level? And other folks are doing great, great work in this area.

My friend and fellow MMT traveler, the sociologist Tamara Nopper, wrote an interesting article in Jacobin a couple of weeks ago, talking about how the defund demand is an evolution in and of itself that should be lauded, and I absolutely agree. Back after the Rodney King beatings and what went down in LA afterwards, a lot of folks bought the idea of minority owned business development and corporate investment and it’s taken a long time to get to the defund movement. Now, the question is: what sort of funding for the nurturing world, for the actually safe world, do we want? I think that fundamentally has to be federal, as any MMTer will tell you for technical reasons. But it also has to be federal for political reasons. And in no small part, it’s to avoid this mess of the myth of taxpayer money.

So the myth of taxpayer money essentially says, whether folks want to admit it or not, the more that you pay in taxes, the more of a damn voice you have in society. There’s this liberal idea that we are all a monolithic taxpayer class and because I pay sales taxes on things, I have a lot in common with someone who pays a lot of capital gains taxes. And I just fundamentally don’t think that’s true. Dr. Walsh’s work makes it abundantly clear that that’s not true. When we think about taxpayers to be extended to social class at all, it’s extremely stratified, it’s racialized, it’s gendered, it’s sliced up, and it’s diced up. People don’t look necessarily horizontally at each other as peer taxpayers. In fact, taxpayer money–this idea that you’re entitled to more because you are a taxpayer rather than a citizen or a human or any other kind of subject–is replete within right wing movements.

It’s obviously essential to the Tea Party, but it’s also essential to the Charlottesville torch bearers and every other white supremacist force in this country. And it’s not just the United States to be clear, even though that’s where we’re situating this conversation. There’s a fiscal sociologist at the University of Alberta named Kyle Willmot, whose work I have been recently diving into, who is a scholar of indigenous taxpayer identity, but is also just investigating the global role of taxpayer associations generally. He finds that taxpayer associations serve a particular role within neoliberalism and within crafting subjectivity, in encouraging people to bound their government and see it as a resource extractor rather than a resource generator, which I think is something that’s very familiar to all of us. I should take here to note that Dr. Wilmont, like Dr. Walsh, takes care to note that taxpayer identity doesn’t necessarily have to be reactionary. It’s in some ways a mercenary concept as they say, but it has been wielded, I think, irredeemably by the right in this country. Although, I know folks have done other work about that, and I’m happy to discuss the ways in which perhaps you all see where it’s recoverable.

But that’s pretty much where I’m at at this point. The UCLA article, which is really more of a short reflection piece, complicates the taxpayer identity within the movement to end monetary sanctions. What I’d be welcoming or open to doing here is having a more integrated and more detailed conversation about the role of taxpayer identity and whether it’s recoverable or not. Maxx, I know you have thoughts on that and I’m sure that other people have thoughts on that, but I don’t want to push it too hard.

Maxximilian Seijo: No, that’s cool. I think Billy has also done some thinking about this. So I can defer to Billy first if he’d like.

William Saas: I think this is more about your work but I really appreciate you opening up space for it. Maybe one of the things I was trying to get to in a roundabout way was talking about reception. I think that’s one of my ways of thinking about whether or not it’s recoverable. It strikes me that even though it is, and I agree with you, probably irredeemable, the taxpayer identity that looms large in all the ways that you’ve identified is also super firmly ingrained and even mobilized by people with good intentions frequently. I know currently we’re talking about cutting university budgets and things like that and the taxpayer trope is showing up. I wonder if you might offer some advice for somebody who is concerned about that long insidious history that you’ve outlined for us, and that Dr. Walsh outlines well in her book, how to, with compassion and respect, offer an alternative? I guess maybe the answer is in the question there, but how do you present this to people humbly and how is it received?

Raúl Carrillo: Sure. This is a great set of questions, Billy. I do spend a good deal of time sort of just shouting to stop saying taxpayer money and say public money instead.

Scott Ferguson: Yeah, so do we.

Raúl Carrillo: Haha, as many of us do. But I think that there’s not a monolithic answer. It is different strokes for different folks. The first question you have to ask is: what are folks using the trope to try to achieve? To give a basic example of one end of the spectrum, if folks are arguing for racial or gender equity literally as taxpayers, like as they’re filing their tax returns, for instance, then that’s not necessarily a frame within which to inject this whole argument. It’s not gonna be as successful. But of course if we’re talking at the federal level, then it’s a lot easier. I think folks are starting to understand that all the money that the Fed is lending out is not taxpayer money. How could it be taxpayer money? We’re all broke right now so how does that make sense? Also, and this weaves into the pertinent questions regarding the UCLA article and the protest, what happens when people feel a sense of injustice as taxpayers, especially at the local level? Lots of folks have argued against incarceration, against utility gouging, against all sorts of things as taxpayers, and they are clearly not right wingers. I have some thoughts as to why this is strategically still unhelpful for us, but I want to pause here because I think that you’ve identified an essential question for this project and for all of us. Given that we pretty strongly think what we think and believe what we believe–and other folks do as well–how do we form a bridge here for people who are very interested in economic justice and social justice?

Maxximilian Seijo: I really like this conversation because it’s an open one that still necessarily insists on some hard values. We’re explicitly thinking critically about the historical and contextual framings that are within this concept of the taxpayer identity that you so well draw together out of some important scholarship. I’ve thought about this in the past and what strikes me is as interesting about the question of public money versus taxpayer money, is that it seems to be about framing, ultimately, because if you’re thinking with public money, there are, of course, operations of taxation inside of the public money framework, inside the fiscal-tax circuit, and many different ways of thinking about that. But it also seems what’s crucially important for synthesizing what has been said already is how one rhetorically frames one’s claim to being accounted for by governance, or another version of some democratic claim on fiscal authority? The taxpayer identity is a problem because it refracts an exclusive vision rather than an inclusive one, which is what the public money vision conversely offers. And so, it’s not that taxpayers aren’t inside a public money framework. It’s precisely that in foregrounding what taxation actually is, what it actually does, the taxpayer is resituated within an inclusive structure of claims on democratic governance and accountability. It seems like that’s what’s at stake in these questions, and I’d be curious to hear your reflection on it.

Raúl Carrillo: Damn homie, I agree with all of that. The problem is that, right now, taxpayer money is the encompassing frame. It’s the bounding frame. And there are claims for equity and justice or revolution that could be made by taxpayers within a public money frame. For me, the more immediate question is, what do we do given how not only exclusive the concept has become in the United States, but how stratified it is? It’s not just that taxpayers, and people who primarily identify as taxpayers, don’t see black and brown taxpayers as taxpayers in the same way that they are. It’s also because of what a progressive taxation structure is, because people pay different amounts of taxes and are in different tax brackets which also quantifies the concept. I would also say it corporatizes the concept. In other words, you become more like a shareholder and less like a rights holder, if that makes sense? Your claim isn’t as a political subject; your claim is as a fiscal contributor. And it’s not an economic contributor in general, to go back to your previous point, much less a social contributor or just a general contributor to the public. It’s about how much dough did you cough up for the taxman when it came around, because that’s the only kind of public finance we understand.

It’s so twisted in the United States that we call all sorts of monetary sanctions that aren’t taxes, but should be thought of as taxes, as not taxes. Fines and fees, court restitution, student loan debt, and all of these sorts of sanctions that are levied on various people throughout the economy aren’t even encompassed within the taxpayer money framework. And that becomes especially problematic when we’re talking about somewhere like Ferguson, Missouri, which is an open air debtors prison, because the local taxpayers association has destroyed the municipalities ability to raise property taxes. In fact, now they run on fine and fee money. The concept is exclusive, as you were saying in the contemporary American context, but it’s also stratified. It sets people at each other’s throats in a way that it doesn’t have to. Even if you just want to highlight everyone as a member of the economy as well as a society, there are many other categories that we can use to describe people. Public money, I think, is one of the broader ones.

William Saas: A critical difference between public money and taxpayer money that I’ve thought about is that the taxpayer identity is something that individuals can latch on to and identify as and then identify themselves as part of a collective and join a taxpayer association, for example, whereas public money is a bit more abstract, and like you say, there are a lot of different categories that we can identify. But there also doesn’t seem to be something that has such a strong rhetorical cachet as “taxpayer” that’s readily available. And maybe that’s an important part of that bridge work you were gesturing towards before.

Raúl Carrillo: Yeah, I think that’s another excellent point. Perhaps we still are on a quest for embeddedness and we’ll find other terms that create individual connection as well as making the points that we make–that money is public at the end of the day in terms of its origin, in terms of its generation, in terms of the source of the enforcement and patrolling of its use that occurs throughout the society, the legal system, and that scaffold. I like public money because for the same reasons, I like public schools still, for instance. But it does not accomplish that yet, or perhaps isn’t capable of accomplishing that connection yet. No term is perfect.

Scott Ferguson: Yeah, I think one other great term other than public money is the framing that Delman Coates is running with, which is “Our Money.” Another way of putting it is this is collective money. This relationship already belongs to us. But yeah, we need to be turning it in other kinds of directions

Raúl Carrillo: Yeah, “Our Money” establishes a social claim while avoiding the abstract term public. And I just said public schools, I like public schools, but a lot of people don’t like their public schools. A lot of people don’t like their public assistance, a lot of people don’t like public public X, public Y, or public Z. So yeah, I’m very here for “Our Money” as a board member and frequent collaborator with Dr. Coates.

Scott Ferguson: Thanks, maybe we can shift gears here. One of the things that you’ve influenced me a lot on is the important but also tricky question about a “politics of rights.” And so, I was wondering if you could lay out why a “politics of rights” really matters? How do you conceive of rights? What’s a bad way to conceive of rights? And what’s the necessary way to fight for certain rights?

Raúl Carrillo: Thank you, Scott. So this is the conversation that is going to make everyone hate me. I swear my whole vibe is synthesizing different intellectual traditions and trying to get them to talk to each other, but this is one area in which I think building a bridge, for instance, between the legal Left and Left economists requires a lot of folks to give up their premises. I know that’s a bold claim but I’m here to back it up and have some scholarship coming out about this in the fall.

So if you were to ask the most lefty lawyers right now whether we should be fighting for rights, I think that a great deal of them would say: “Screw rights, what have rights ever gotten us, rights are abstract and indeterminant.”

Maximilian Seijo: They’re Superstructure.

Raúl Carrillo: Haha, they’re slippery; too slippery to fight for. They’re liberal proceduralist stuff. They’re utterly epiphenomenal. I heard about that on another podcast; everyone listen to Superstructure with Maxx and Will Beaman. Anyways, so a lot of the legal left, and about 60% of those people live in Brooklyn, will tell you that. And I don’t mean that in a good way. It’s not a care-based Marxist approach to the law. It’s one that is predominantly held by white folks. The back and forth within the left legal academy about rights is often really split along racialized lines, as well as gendered lines, to say nothing of comparative constitutional law debates, etc. I’m trying not to be too crass about it, but I see this dynamic reproduced amongst lawyers my age. Just to give some brief background, in the 80s, professor Mark Tushnet, whose work I love, wrote an essay called “The Critique of Rights,” which pretty much outlines what I just said–rights are too slippery, too shallow, and too vague to actually achieve. And it was pretty compelling. I have felt persuaded by that argument at times. This argument was replicated in terms of its ethos with respect to property and contracts throughout this school of thought.

And then what happened is a legal scholar by the name of Patricia Williams, who is a critical race theorist as well as someone who engages in a wide variety of spheres, wrote a book called The Alchemy of Race and Rights. To paraphrase another critical feminist legal scholar, Robin West, I believe she characterized it as unwittingly eviscerating Tushnet’s essay. What Professor Williams said is, yes, rights can be all of those things, but rights are the only thing that has ever achieved a damn thing for marginalized and oppressed people in this country. And that wasn’t to say that there isn’t a generative force or power within, for instance, striking or any other sort of real political activity, but that the rights were also a necessary component of achieving any modicum of justice, much less equality for especially folks of color. That is the perspective that I have pretty much adopted. I think that there are good points made within this debate over the last few decades, on all sides that are really, really important and outstanding, but one thing that this whole sphere of discourse suffers from is an utter reliance on the premises of orthodox economics and also the trope of taxpayer money.

Scott Ferguson: So can you talk about some of your work on specific rights, like rights around our collective work on the job guarantee or a right to a job?

Raúl Carrillo: Absolutely. Most of my work on this has been presentations and other things, but this fall some of this stuff is going to start to see the light of day. For instance, there’s an essay coming out in a book called, Tipping Points in International Law, about the state of international labor law and labor generally. What I try to accomplish in this essay, drawing on the work of some of the people that I’ve just discussed as well as various other legal scholars and economists in the broader MMT and critical money world, is to say that, one, the job guarantee should be pushed through international law, which is messy, difficult and aspirational. But also international labor law, and specifically human rights law, is totally underpinned by a vision of austerity. One sort of expects that is this point now given that the Bretton Woods institutions are thoroughly neoliberalized, but a lot of the covenants in the international human rights law, for instance, are basically trying NAIRU or even something akin to NAWRU, the non-accelerating wage rate of unemployment, which they use in Europe because they don’t like to hide the ball.

There’s this sort of problem that MMT comes at about the public nature of money, which you’d think a lot of otherwise extremely incisive legal scholars would be aware of or dig a little, it plagues the very idea that there is a human right to work, which is something that is promoted by, of course, the Universal Declaration of Human Rights, but also the International Covenant on Economic, Social and Cultural Rights, as well as CEDAW, the new treaty on international women’s rights, and all these sorts of other canonical documents from international law. And this myth is, of course, replicated in various national constitutions and labor laws across the globe, but it’s presence in international law is truly staggering. And of course, there’s no global body to coordinate fiscal policy or anything like that. In placing membership mandates on the members of these covenants, it’s utterly, utterly orthodox, and in a way that it’s damaging to any future for these places.

Maxximilian Seijo: This totally connects up to the recent Democratic primary and some of the questions around candidates’ different plans for an internationalist vision not only for climate change mitigation with the Green New Deal, but as a new way to think about how we address things like trade or other global questions of political economy. The vision that you seem to be offering here is one that takes all of the planet into account and doesn’t then seek to fracture, like perhaps Elizabeth Warren’s plan for a Green New Deal with an American first base approach to what one could call “rights,” into a more nationalist approach to addressing these international questions. And that’s a sort of mosaic, but perhaps you could reflect upon what your vision of a more internationalist framework for rights in relationship to employment means for the Green New Deal?

Raúl Carrillo: Sure thing. Perhaps this should have been the preface before talking about this book chapter. I’m not under any illusion that liberal internationalism is going to save us. That being said, I do believe that there is a more social democratic form of international human rights that is available. That’s a bit of a contentious thing to say in the legal discourse at this point, but that’s because I’m an MMTer. I think that a lot of the reasons that rights are abstract and indeterminant, vague and slippery, are fiscal and administrative. The person I owe extreme debt to here is Phil Harvey at Rutgers University. Phil has been a scholar of, as he says, the law and economics of the right to work–I would say the law and political economy of the right to work–for about 30 years. And Phil began his journey by investigating human rights law, but also investigating the transmission of some New Deal insights into international law via the United Nations Foundation and the creation of these various covenants. Phil mapped how FDR’s “Four Freedoms” were eventually transported to Geneva and became the basis of a lot of second generation of rights that actually is enshrined in international law but that we do not have in any real way in the United States.

Phil pointed out that, amongst other problems, the issue here is that the bills, the actual legislation for direct job creation, caps things at inappropriate levels. It creates no clear maps for courts to follow when they’re trying to determine if the government should try to redress a violation of a right to work and all these sorts of other operational and administrative problems. Now, Phil’s not an MMTer. And in fact, professor Harvey and I disagree on how the job guarantee should ultimately be financed, for instance. But he did make this point that this connection between public finance and rights has to be totally revisited. My contention is that if they’re fundamental rights, then they demand blank checks in the same way that the Pentagon does with their atrocious demands without anybody batting an eye. I mean, we bat an eye over here on the left, and the liberals do too, but it never really changes. Speaker Pelosi shepherds in Trump’s military bill. And the reason for this is not just that I am an MMTer. It is that the resiliency and stability of rights enforcement depends upon full funding and service.

Dr. Harvey said the distinction between a job guarantee and direct job creation is that enforceability is the individual right. And there’s an allergy to judicial enforceability of rights on the Left, because we don’t trust the courts, and that’s understandable, but Dr. Harvey empirically showed that if you have clear tests for what’s supposed to happen, for instance, when someone can no longer work in a particular job or there’s an ecological problem within that job site, what’s supposed to happen in terms of redress, is the courts are more willing to follow these sort of rubrics. Yet, the missing piece is, again, the funding. The funding has to be open ended if it’s to be a fundamental right. And that doesn’t mean that everyone’s going to flood the job guarantee all of a sudden, because you still have to want to do that type of work with that wage level and benefits. But if people can’t gain redress if they’re kicked out of the job guarantee program or not allowed in because of their race, gender, sexual orientation, or whatever it may be, then the rights aren’t real. You need something like an MMT vision to ballast anything like a social democratic or Green New Deal vision of rights.

If you bound them to a pot of money, a trust fund, or tether it to attacks, and God forbid attacks on your enemies, then you’re gonna run out of money. Not in the grand sense, but you’re going to run out of money in the administrative sense and the program is going to fail. People are gonna hate it. If the job guarantee can’t consistently hire people to produce things in the public eye so that people are perceived as successful, then it’s not going to take off as a political enterprise. And the Green New Deal doesn’t just include the job guarantee; it also includes a housing guarantee, an education guarantee, and a healthcare guarantee. So we’ve got four rights we need to fund. I think we need to be just as voracious and as fucking loud as the right wingers when it comes to providing the resources and the structure that we need to create and reproduce anything like a just society.

Scott Ferguson: Beautifully put. And this actually recalls a slogan that I came up with last year that I actually haven’t thought about in a while which is: “Inalienable rights require inalienable money.”

Raúl Carrillo: Exactly, Scott. I think yours is better, haha.

Scott Ferguson: Yours is the explanation, mine’s just the sign you hang out front.

William Saas: We’ve talked a bit about your work across various important fields. I wanted to wind us down by letting you talk a little bit about the advocacy that you’ve been up to recently on the hill, and to include things like your critique and commentary on the Libra Facebook currency and anything else you might like to talk to talk about.

Raúl Carrillo: Thanks, Billy. For about 10 months now, I have been working with a consortium of labor groups, consumer advocates, financial reform advocates, antisurveillance advocates, digital rights advocates, antitrust advocates, and various other folks on a progressive left response to what’s going on in financial technology. I know y’all have had Rohan and various other techie people on here before. My role is not really as an engineer, but as an architect. I get to break shit. I get to say when things shouldn’t be allowed to exist as they’re proposed based on various bodies of financial regulation, law, privacy, etc. That’s what I’ve been up to for roughly the last year and we’ll be continuing to do for the foreseeable future. To connect it to our discussion, I’ll tell you that in my work around the hill with all these advocates, the MMT perspective has actually been essential. Because what’s happening right now in the financial technology or #FinTech sector, is what we can loosely call the automation of finance, to quote Brett Scott.

But it’s also much bigger than that. What we’re seeing is Silicon Valley starting to exercise monetary power and vie for monetary agency in a way that mostly banks have done previously. And because they’re not banks legally, they get away with a lot of shit. This is predation in the same way as Wall Street targeting certain people to bring into a shadow financial system is. But I would argue, in terms of magnitude, it is more scary because of surveillance. Because the way that the internet works is that it takes our data, or on some occasions, it creates data about us in ways that are punitive. And so, all these big tech companies are starting to move into the financial services space, and particularly into the payment space. And the reason for that is that it’s the next data frontier. Right now, Facebook knows what you like and it has the content of your communications with people who are near and dear to you in your life. It doesn’t necessarily know what you want or what you would spend money on beyond what you like and the ads you click on, etc. Despite the existence of various thin legal firewalls and a few technological firewalls, they want the payments data and your social media data and also they know more about you so they can sell you another goddamn ad, but also so that they can increase their general economic and political power.

And the worst example of this is something called the Facebook Libra project, which as I argue in something called “The Libra Black Paper” that was created with the Americans for Financial Reform in Education Fund and the Demand Progress for Education Fund, is they’re creating a combination shadow banking system and local financial surveillance tracking. The money is going to serve as the basis for broader financial infrastructure, as every MMTer knows. That’s the goal. If you want to create power, mimic the ways of the sovereign. But also the goal is to watch how you move the money. Now, banks already do this to a far greater extent than most people are aware of. But their business model is not selling that data or sharing it as Facebook will do. And so, what we’re seeing is a giant collision between Silicon Valley and Wall Street. It also includes all these ticky tacky startups, which can be predatory and dangerously exploitative in their own way. But we’re seeing Amazon, Facebook, Google, and Apple, not to mention a bunch of larger companies in China, who are entering the monetary realm. And in the United States it’s particularly troubling because we don’t have any fucking privacy law.

This is another instance in which folks think they have rights, but they’re like consenting in a boilerplate contract to having your face analyzed. And otherwise, you don’t get to use the service and sometimes it’s “opt out.” No one gets punished to the extent that they should. I might be exaggerating a little bit, but not too much. We’re seeing, as of now, an utterly unregulated, wild west, unnecessarily imperialist Silicon Valley start to do some of the things Wall Street did with the added layer of surveillance, which also connects to state surveillance because the NSA and other organizations, as Edward Snowden showed us, have a backdoor into Facebook’s facial recognition database of protesters, for instance, where people who aren’t following the rules about pandemic guidelines are targeted. So sorry to ruin your day but that’s what I’ve been working on.

Another thing I haven’t really touched on is the color of surveillance and fitting that within the racialized predation framework I talked about earlier. Again, the Facebook Libra project is basically a combo of financial extraction and data extraction. But it’s hard to really overstate the ambition here. When this project started, it was sort of just a middle finger to regulators and policy makers generally. And my sort of personal thesis is that Facebook was doing this because that’s just how it roles. The old slogan is “move fast, break things” regardless of whether they’re laws, apparently. 

And so, the idea is to create these coins which are called stable coins. As opposed to unstable coins like Bitcoin, they’re supposed to maintain value as a medium of payment across various jurisdictions and economies across the globe. And for now, it’s just these coins. And then Facebook gets to create a digital wallet that people use for transactions which collects its own data, etc. The whole thing is actually not technically a Facebook enterprise because they’ve taken great pains to shield themselves from liability by creating an association in Geneva, Switzerland, which is of course famous for its very strong banking laws. And it has this nonprofit techie altruistic clause, which is fundamentally neoliberal. It says we’re going to create a payment method, and eventually a whole financial infrastructure, including lending, credit scoring, and all kinds of things. It is going to bank the unbanked, not just in the United States and Europe, but across the world and perhaps especially in the global south. That was the message that came out. 

In fact, in September of 2019, the CEO Facebook’s Libra enterprise, a guy named David Marcus, boasted that “Libra is going to allow the free world of Western nations to preserve the influence that, in my opinion, is necessary to maintain a good balance in the world.” It’s not difficult to just call this an imperial grab, right? And the way they’re going about this is equivalent to monetary primitive accumulation, as Mat Forstater in the MMT world describes it. They are defining what the method of payment is. The idea is that maybe it’s not accepted as taxes right away, but it’s needed for various other services if you’re interested in quick payments or if you’re interested in digital payments at all. There’s a socio-legal necessity that’s there given a weak infrastructure in the financial sectors of some economies around the world. And so, the data grab doesn’t work unless you get the currency grab. It’s currency substitution. The idea is instead of dollar-izing these economies, you Libra-ize them, and then you can Hoover up data as well. And maybe folks don’t have IDs in a certain country. In that case, what they’ll do is allow them to use their Facebook profile and a facial, retinal, or fingerprint scan, and all kinds of other things to get into the banking system. And they have all these sort of nasty techtopian plans.

Of course, the casting is altruistic because if you’ve ever been in the unfortunate spot of being next to a finance bro at a bar, you know that they know they’re jerks. But Silicon Valley people think they’re good still. They see this really as a civilizing force throughout the world. And so, it’s fundamentally an imperialist enterprise in many ways. Why in the world would anyone who cares about any sort of justice at all allow this to happen? No one asked Facebook to do this. What is it going to mean if folks like Dr. Sylla, who is fighting against the CFA Franc in Senegal, have to contend with the internet trying to beam in and take away its monetary sovereignty even after they’re successful against Macron? How is that supposed to be good for anybody for any of the things that we believe in? But yeah, Iza Kaminska at the Financial Times has called this “imperialism by stealth.” It’s just as naked when you look at the facts, but it’s coated in this California ideology gloss.

Scott Ferguson: Yeah, it also reminds me, to bring this back to the Fed, that recently Jerome Powell is on record weighing the idea of public Fed banking and banking all the unbanked, which is what this California ideology in Silicon Valley is purportedly wanting to do. What is his answer? Oh, no, no, that’s a terrible idea. The private sector will hate it.

Raúl Carrillo: I’m glad you brought this up because the war on cash isn’t just the war on cash, or the gentrification of payments, as Brett Scott calls it. As our colleague Rohan Grey says, it’s a fight for the soul of the future of digital money. It’s becoming pretty clear that the monetary system is going to become increasingly digitized. Obviously, most money is digitized. Most of the layperson MMT metaphors get it that money is increasingly keyboard strokes, digital electrons, etc. But really what we mean by this is the decreasing presence of cash as a form of money and therefore of privacy in many ways. The innovative work that’s being done around money as private cash in the digital world is mostly being done by people I have a lot of respect for, but they are not interested in a public money framework. These folks are interested in private-private money; they’re not interested in private-public money. That really is what’s going on here. There’s this conversation about creating essentially digital bank currency systems, some people call it the digital dollar, that really involves the core of this debate. And I just want to make clear that I absolutely support bank accounts for all, basic financial services for all. I don’t think that’s a neoliberal idea. I think that’s necessary.

The issue, of course, is when private credit or lending becomes the purported vehicle for curing poverty. That gets predatory real, real quick. It gets extra predatory with FinTech because, again, we’re not just talking about potentially outrageous interest rates. We’re talking about the data. We’re talking about increasingly building a scored society, as Dr. Nopper and also law Professor Frank Pasquale have both written about. These apps, as Dr. Nopper says, analyze one’s digital character. They create an image of you which has been shared, probably not just within the financial world, but within a whole sphere of industries that now rely on data collection. And finance becomes another gateway by which corporate tycoons gain more and more information about people. But it’s not just the ads and the antitrust violations. It’s the insane surveillance that crosses over to state surveillance.

Because again, the government is usually just one subpoena away from getting this information. It requires these big tech companies, in something called the Upstream Program for the NSA, to release certain kinds of data that includes the contents of communications, including your texts, for instance. And this becomes especially dangerous when you consider the color of surveillance. A lot of these FinTech products are marketed specifically to communities of color and other marginalized folks because they are folks who are more likely to not have a traditional bank account or to be excluded from the “mainstream system.” And I would argue that this is predatory. And it’s not just predatory because of the financial extraction, which is bad enough, but it’s predatory because you are jeopardizing the health and safety of people of color in a white supremacist state that is running absolutely bonkers right now.

We know that these companies have to fork over data to federal law enforcement and some of them willingly fork over data to local law enforcement. That’s what Amazon Ring is–in order to protect the white suburbs, protect their property and their goddamn taxpayer money from super predators in the embryonic criminal class, as Khiara Bridges would say. You have to create more surveillance. Workers must be watched, delivery people must be watched, people who borrow money must be watched. Amazon has this camera that says what’s up to anybody who comes up, and then that goes to the cops. And so, what happens if a delivery worker is also a protester? What happens then? And even outside of the protest context, surveillance is the norm for black folks in the context of public assistance and predatory debt. And it’s the case for many, many other people, including Muslims, for instance, and anyone who’s considered to be a threat to the Trump administration. So this whole FinTech enterprise needs to be chilled. Everybody needs to cool it. I understand that lots of folks are into financial innovation, and I would welcome their skills at blockchain or whatever it may be within the public sector. Because if the goal really is to include people, MMTers know what the right organ is for that. I think in order to push back against predation, we have to empower public money for public power in myriad ways, and not just as it is a monetary enterprise narrowly, but as it is a social one broadly.

Maxximilian Seijo: That’s sort of exciting and depressing in its own way as you suggested. But I think with that, I just wanted to say what a pleasure it’s been Raúl to have you on Money on the Left finally after all of these episodes. I think this is episode 28 now. Yeah, it’s really been such a pleasure. We are really happy to keep having these conversations and keep making this show in ways that highlight the certain things that we’re all doing as well as bringing others into the fold. And this very much fits into the former of those two things. It’s been great. Thanks so much.

Raúl Carrillo: Thanks, Maxx. It was a real pleasure to finally jump on here. Hope to return fairly soon and I will be listening to every episode. Y’all keep on truckin’.

* Thanks to the Money on the Left production teamAlex Williams (audio engineering), Richard Farrell (transcription) & Meghan Saas (graphic art).