Performing Hard Money with Frederic Heine

Frederic Heine joins Money on the Left to discuss his recent essay, “Performing Hard Money: Monetary Policy, Metaphor and Masculinity in the Making of the EMU,” published this summer in the Journal of Cultural Economy. Heine is a university assistant at the Institute for Women’s and Gender Studies at Johannes Kepler University, Linz (Austria). In his essay, Heine analyzes the cluster of masculine metaphors that ground and mobilize the European Monetary Union’s (EMU) hard-line opposition to “soft” money politics. At the time of this episode’s publishing in early September 2022, what Heine classifies as the masculine performative agency of EMU leaders can be seen all over Europe, with French President Macron decrying the end of abundance and the European Central Bank signaling a coming period of sacrifice across the Eurozone. We speak with Heine about this essay as well as his broader inquiry into the intersections of gender, global finance, and political economy.

See Frederic Heine’s essay here.

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Music by Nahneen Kula:


The following was transcribed by Mercedes Ohlen and has been lightly edited for clarity.

Scott Ferguson: Frederic Heine, welcome to Money on the Left

Frederic Heine: Thank you very much for having me. 

Scott Ferguson: To kick things off, can you tell our listeners a bit about your background, be it personal or professional or both, and what brought you to the study of gender, culture and political economy? 

Frederic Heine: I am currently working as a lecturer, or university assistant, at Johannes Kepler University (Linz) at the Institute of Women’s and Gender Studies. I did a PhD at the University of Warwick, and before that I did a master’s in global political economy at the University of Sussex. That’s my academic background. Before that, I studied at the Free University of Berlin, the place where I got interested in gender in political economy. 

Basically, at the Institute for… Political economy, Marxism, feminism. And led me to ask all these questions. And at the same time, shortly after I started, there was also the beginning of the first signs of the global financial crisis kicking in. So that was a big part of me being interested in trying to understand what was happening there. And at the same time, maybe gender and masculinity has been something that had been a more… permanent [interest] in my background. I needed the inspiration by the feminist flare at the university. But then I started questioning masculinity and relating it back to my own experiences of gender masculinity, some gender-related bullying in my youth.

When I came across Roman Connell’s work on hegemonic masculinity and subordinate masculinity, hierarchies of masculinity, that was very much a game changer in understanding my own identity, and also my place within the larger agenda structures in some ways. But at the same time, as male at birth and with a masculine self-presentation, I also experience it very much as a privilege, especially in combination with whiteness. For example, the attribution and assumption of competence, and even some level of authority now that I get older, which seems a little absurd at times.

In any case, that’s my background: On the one hand, there were these big macro events, like the global financial crisis that I was trying to understand. And on the other hand, this understanding of my own identity within that context. I think the tension between those macro events and identity/subjectivity, on the other hand, was what maybe always kept me in this interest about how gender and political economy relate, especially, of course, when I discovered feminist political economy as a sub-discipline, when I came to the UK and discovered IPE [International Political Economy] and the complexity and diversity of approaches. And feminist IPE in particular. That shaped a lot of the ways in which I was approaching these questions.

William Saas: Thank you for that really great answer. We’ve come to your work by way of an article you’ve published very recently in the Journal of Cultural Economy, titled “Performing Hard Money: Monetary Policy, Metaphor and Masculinity in the Making of EMU.” I wonder if by way of starting our conversation and making sure that we all have a common ground or grammar to work with, could you share with listeners who may not know what the EMU is, where it came from, and maybe its role in shaping the neoliberal project in Europe and beyond?

Frederic Heine: The European Monetary Union, the EMU, is the monetary aspect of European integration. It’s the institutional context for the single currency that probably all listeners know, which is the Euro, a currency that was first meant as a currency for the entire European Union, but a number of countries decided not to participate or haven’t adopted the Euro yet. The European Monetary Union is governed by the European System of Central Banks, comprised of National Central Banks, and, at the top, the European Central Bank. 

The idea of some kind of monetary union to proceed with economic integration and political integration has been a long time in the making. Since the first proposals in the 1970s, there has been ever closer European economic integration. As a background to these proposals, that meant that a single currency seemed desirable for economic and political reasons. 

And even before the European Monetary Union, there had been several attempts to reduce currency fluctuations between European Union and European European Community member states, trying to keep exchange rates and inflation rates somewhat aligned, mostly to foster trade and mutual investment. And that had been the case ever since the collapse of the Bretton Woods system of fixed exchange rates. This is the background why the project was taken in the first instance. And ultimately, this process cumulated in suggestions for a European Monetary Union, a single currency, and so on.

The crux, however, is not so much in the fact that we do now have a currency union, but the kind of currency union we have. Instead of an integration of financial policies and monetary policies, only monetary policy is Europeanized and institutionalized in the European Central Bank. And while there are some restrictive rules for member states, which are also arbitrary rules for how much debt and how high a deficit they can run, there isn’t a political mechanism by which, for example, an expansionary fiscal policy approach could be coordinated. And worse, that’s partly on the insistence of of the Bundesbank [the German central bank], which we will talk about. 

There’s the “no bailout clause” that forbids the European Central Bank to act as a lender of last resort for member states. So the monetary union ended up as a setup that works okay in normal times, but in times of crisis seriously limits the room for maneuver, for example, the demand-led recovery from crisis. And we know all this because of what actually happened in the Eurozone Crisis from 2010 onward. So that’s what we experienced as a result of that.

William Saas: And how have critics and critical scholars engaged with the EMU previously?

Frederic Heine: There has been a lot of attention, especially since the Eurozone Crisis, on the institutional side of of the European Monetary Union. And there’s a literature that looks at the evolution and institutional design of the European Monetary Union and regards it as more or less as institutionally flawed, a result of political compromises between the main players, especially France, Germany, etc. It also looks at the power politics between the main major nations, so this is the intergovernmentalist approach to how the European Monetary Union formed. 

There is also a literature that looks at the relevance of ideas, and especially the emerging neoliberal consensus as discussed by [Kathleen] McNamara, for example–how, in the process of creating the European Monetary Union, there was an increasing shift towards the understanding that a central bank should be independent, that the nation-states should have a limited room for maneuver to run deficits, that welfare states should be reduced.

These elements are also part of the institutional setup of the European Monetary Union by design. And that is the focus of an interpretation that looks at the European Monetary Union mostly as a result of class politics, an institutionalization of neoliberal principles by constitutionalizing them, by setting them up in the treaties of the European Union, and therefore making them uncontestable (by the labor movement especially). And in the way of central bank independence, and this focus on price stability, rather than other central banks also are concerned with making sure that there’s full employment or that levels of employment are as high as possible. This is not within the remit of the  European Central Bank. And so it’s also seen as a way of, through monetary policy, limiting the room for maneuver of trade unions and the labor movement.

Scott Ferguson: In your essay, you take up from a critical perspective what you call “gendered performative agency.” Can you define “gendered performative agency” for our listeners? And why, on your reasoning, does it matter for critically understanding the EMU?

Frederic Heine: One reason why I wanted to do this, and one thing that I haven’t seen in that literature that looks at the evolution of the European Monetary Union was to look at: Did gender plays a role in all of this? I tried to do this with that concept of gender performative agency. And it might get a bit abstract now, but basically, I was looking for a way to conceptualize how gender discourses and narratives might matter in economic governance. 

I tried to do this without reifying either what gender is or what exactly the economy is, and rather understand it as the result of these kinds of processes. Very briefly, it’s a lens that focuses on how agents mobilize performances and constructions of masculinities and femininities in their political discourse in their practices, to serve specific agendas within economic governance. And I use the term “performative” because in this way, this process both describes the performances involved in it: speeches, language, but also bodies, mannerism, dress, etc. I invoke the concept of performativity, the idea that language doesn’t only passively represent the kind of things that describes, but that it has at least some power in shaping it. A very basic example would be that if a child is told that it has a certain gender at birth, and then later is told and demonstrated what it means to be that gender, to perform the gender, then there’s a likelihood that it will behave according to these ideas as well. 

Although, of course, there’s always a chance of failure, and of a critical questioning of these. But basically, the idea is that that language doesn’t just represent something that is outside of it, but does create what it describes, in some ways, and through mechanisms and social practices. This idea has been developed in relation to gender famously by Judith Butler, as the listeners will probably know, and also in relation to the economy by scholars such as Michel Callon and others.

In a sense, I tried to capture how the economy is gendered through this performative language. And then, I looked at how these practices are very much leveraged by actors within economic governance. If we look at elite actors, such as the Bundesbankers in the paper, that have also a lot of moral authorit,y as I will explain hopefully, later. So even though single actors always have limited performative agencym as Butler argues, they still have comparatively more than you and me, for example. 

I argue that this agency and performing the economy is gendered because gender is not always but often a central component of our subjectivity and our worldviews, and even if we’re not necessarily aware of it, it shapes us. For example, V. Spike Peterson argues very deeply how we ascribe cultural value, effective value to things simply because the dominant worldviews are still very much gendered. And for this, studying how gendered meanings are mobilized, basically, look at language and metaphors. I hope this wasn’t too abstract.

Scott Ferguson: It was really clear, thank you. I really want us to spend some time as you do in the paper, unpacking these metaphors. Why metaphor? What are the metaphors? How are they being mobilized? How do they work through very often hierarchical binary oppositions that position certain terms as subordinate? As lesser? And then also how do these potentially change over time?

Maybe, to get things going, I just want to say one of the many things I appreciate so much about your work, is that very often when we’re thinking in terms of gendered performance or gender performative agency, we’re thinking about how broad social constructions, social meanings, discourses, imagery, etc. shape the way that individual persons and bodies become legible. And I think that work is very important.But what I see less done, but I see operative in your paper, is to say no, actually institutions that are irreducible to just–I mean, of course, it matters that these are men, who are the presidents of the Bundesbank, who have this authority in the European Monetary Union, and of course, their individual performativity matters. And legibility matters.

But it seems like you’re arguing that the very kind of constitution of this vast institution is a gendered performance. Is that fair to say?

Frederic Heine: I think that’s correct, thanks for your thoughts and for your developing the ideas of the paper. What I try to do is to see how the construction of certain institutions and certain cultural political economies as gendered is a process that is in principle contingent. It does use, of course, the larger discourses and cultural meanings ascribed to gender and mobilizes this data is only possible because there are shared understandings of what gender is and how it matters, etc. 

But the idea is that how this is articulated in a specific context is principally contingent. And that there can be variations, be specific institutions that do this more than others. I think you understood exactly what I’m trying to do. Thanks for these thoughts. But to go back to your first question, sorry. 

Scott Ferguson: Let’s get into some of these metaphors. I don’t know if you first want to talk about your archive a little bit more? What you’re studying?

Frederic Heine: I was going to start with the background of why I think metaphors matter in the discourse of these Bundesbankers. To talk about the archive: I looked at a lot of speeches and interviews these Bundesbankers did in the context of of the question: How should an EMU be structured? Should it exist in the first place? And all these issues. In that context, I looked at the public performances and speeches they did. 

And on the one hand, some of that discourse is pretty dry for the average audience member. It might seem surprising that metaphors play a key role here. But despite the technical role these central bankers often have, it is curious that in the German public, there used to be quite well-known, quite important public figures. Jacques Delors, for example, who was a very important figure in the EU negotiations and the President of the European Commission at the time, made the joke that not all Germans believe in God, but all Germans believe in the Bundesbank. So it had quite a big cultural role within the German polity. How is that possible for technocrats? Part of my argument is that this is the case because their discourse is not just technocratic, it’s not just about economics, but it carries a moral message that carries an effective stance.

And this is where the metaphors come in. They help to imbue the speech and discourse with meanings borrowed from other source domains. And metaphor theory has shown that metaphor is an important way in which cognition works. We understand something in terms of something else that we already know, that we are already familiar with. And metaphors can also mobilize affect and motivation, borrow authority and legitimacy from the source domain. In the paper, I argue that the Bundesbankers use a range of metaphors in their discourse on inflation and the necessity of price stability, that they were trying to make sure that the EMU was going along this direction. I examined these metaphors and I argue that the the range of metaphors used weaves together a tapestry that constructs a more or less coherent narrative. But the moral story of why price stability should be so important as to make it the cornerstone of the European Monetary Union.

And one element of this is how inflation is described through the metaphor of temptation. So this is something that seems irresistible. So this is literal, for example, when Karl-Otto Pöhl talks about the always lurking temptation, or related metaphors, such as a pinch of inflation, or the drag of inflation, and so on. The most pointed one is when Helmut Schlesinger, his successor, calls this “the siren calls of inflation,” a metaphor that is then repeated a few times. Or back in the 60s, one of the first Bundesbank presidents called inflation a nymph that doesn’t contend itself with the light flood. So what we have here is a discourse that compares inflation to something that equalizes giving in to desires and in the Greek mythical figures of nymphs and sirens, and this is a sexualized femininity that represents this temptation. 

And you can imagine this temptation to the assumed heterosexual men that are usually the assumed subjects in this language as well. So it plays on this feminization of temptation. And the assumed consequence of these temptations, following the songs of the sirens means shipwreck, flirting with a nymph, in this mythic mythological background means a threat of madness, distraction, taking drugs, addiction, etc. So, these are all consequences of losing self- control. The key to resisting that kind of temptation that inflation supposedly is, is the idea that of self-discipline. 

Self-discipline is regarded as the key not only to not giving in to this temptation, to resist the temptations, to [not] walk the path of least resistance, and all these kinds of metaphors are also implied to represent the remedy against the temptation of inflation. And so, this discipline in relation to EMU–the metaphor is used to stress the importance of discipline on the side of member states, for example. 

Pöhl evokes self-discipline, on the one hand, on the part of member states. Also market discipline is thought necessary to avoid these temptations. Market discipline as a result of investor behavior. And then also external discipline, through institutional mechanisms. And the latter, especially the the mechanism to create discipline, on an institutional side was the focus very much of the Bundesbank, who argued that this external discipline was required because member states couldn’t be trusted with this kind of self discipline, nor could market actors in themselves. 

The idea here is that there needs to be an authority that instills this discipline and that itself needs to be highly disciplined. So, these kinds of binaries between temptation and discipline that are connected to femininity on the temptation side and masculinity on the discipline side, were used by Pöhl to argue for the kind of an EMU focused on instilling discipline. And it did so from the position of the Bundesbank that prided itself in having that function within the German economy and arguing that the German economy has been much better placed to resist that kind of temptation. Because of its “stability culture” that is called in the language of the Bundesbank, and that stability culture itself then, is the result of the past tough choices and tough policies of the Bundesbank. 

So, again, we have here, or I’ll come to that set of metaphors in a second. And basically, I argue that these metaphors of temptation and discipline reference enlightenment, as well as reformist ideas of masculinity, of the composed, rational subject, that never strays from its mission, so to speak, that is always in control. And I also argue that these ideas of masculinity were particularly strong. 

For reasons we might later go into, in Germany, where the idea of the rational will conquering the bodily temptations was a key component of constructions of masculinity vis-à-vis femininity hich was seen as much less able to control the self, the impulses etc., in 19th century discourse, and therefore, needed a male guardian and patriarchal ideology. And at the same time, it was also constructed in an emerging national discourse as something that distinguished Germans. 

And the assumption here is, again, particularly German masculinity, which was often the focus of the national stereotypes as they developed in the 19th century. And also from other nations within Europe, particularly France, and Southern Europe as reference points. And here, this was not only a nationalist discourse, but also related to the idea of race because the idea of rational self controlled masculinity was also very prevalent in European colonial discourse, seen as a key feature that was supposed to distinguish white Europeans from people of color, ultimately, this discourse was one of governance. 

So it justifies and legitimizes governing over others, because one is able to demonstrate the ability to govern over the self. And that is the context in which this self discipline became central in these self representations subjectivities in that context. And so, another set of stereotypically masculine traits that is also used through metaphor in this context is strength, toughness, hardness, they often use to talk about currencies and to talk about basically, relationships to others. So, when choosing, for example, frequently emphasizes that the European currency, the euro, needs to be at least as hard as the D-Mark. 

This is on the one hand, common pylons and currency trading. So hard currency is one that has has a relatively low level of inflation. But it carries the potential metaphorical charge. So the Bundesbank was founded, basically on the mantra of its first president, who repeatedly said with soft measures, you can’t have a hard currency, meaning basically, that you need to be tough and resilient for your currency to be hard as the result of the toughness of the decisions that are being made. 

And the Bundesbankers themselves needed to perform this toughness as well. Schlesinger for example, was asked whether he had turned into a softy when he was perceived as not defending the D-Mark enough, which Schlesinger then sought to strongly deny. And Tietmeyer, who was the third president I look at, described himself as a tough oak, this fabian oak, to instill this idea that he will be unwavering in the face of crisis. And there’s this level of trust and resilience and resistance towards any attempts from outside to influence the decisions that might be present. And so you have, on the one hand, this reference to self discipline, and on the other hand, these references to toughness and hardness as a badge of honor of the economyt hat is masculinized in this discourse. 

For example, maybe I should add this is Schumpeter, for example, described also the idea that basically, the monetary policy of a people demonstrates, shows, as he formulated it, what kind of wood it is made of, which is the literal translation of the German which also expresses this idea that there’s a sort of… it reflects the morale, the toughness of the people that it represents. And this is very much present as the badge of honor in some ways of the national pride of the hard currency. It relies on the fact that it demonstrates this toughness. 

And both references to self discipline and toughness, together, make sense as a discourse of the strict father. This is also what George Lakoff has identified as the metaphorical, a kind of core argument also in US Republican discourse. The idea that the moral authority of a strict father is the desirable cultural trait. The strict father that is, on the one hand, morally strong and constantly and in self control, fighting off the possible internal temptations that he might have. And on the other hand, disciplining the dependents. So children, especially, and also the wife, to some extent, to do the same. And by being also strong and tough enough, to confront external dangerous or external kinds of threats.

The metaphorical tapestry of the Bundesbank invokes this strict father performance both for themselves and as the authority figures and as a cultural moral ideal of the ideal economic behavior. And in that way, there is this charge of the discourse around the D-Mark and the German values of being very hard-working people and tough etc, is reflected in these metaphors. I hope I made myself somewhat clear.

Scott Ferguson: Extremely clear, just for our listeners, something that I think is implicit in what you’re saying, but just to air it out: When you’re discussing the political rhetoric and legal construction of the EMU, you threw in metaphors of temptation versus self- discipline and hardness.

We’re talking about fiscal capacity, and how it should be constituted. And we’re also talking about interest rate policy. And we’re talking about employing and not employing certain kinds of people. So that while we have this intensely gendered institution, that’s a real legal construct. It’s a real social-ideological construct at this macro-political, economic, and even geopolitical level, but that construct is doing real damage through enforced austerity, whether it’s through the… baked into the Maastricht Treaty which founds the EMU. Or its individual decisions in relationship to crises, such that this metaphorical language and talking about being self-disciplined and not being tempted is about not being tempted to provision jobs that might be needed for an immigrant community.

This is dangerous, not just because the discourse itself, the metaphoric city itself, is so colonial and patriarchal and exclusionary as a cultural imaginary, but it itself is justifying all of this institution-building and policy work that is systemically violent in its ways. I just wanted to spell all that.

Frederic Heine: Thank you. That’s very important. As you say, completely implicit, or… and what I said, but an important consequence, … it’s also related directly to the discourse that makes it seem as if inflation was a result of indulgence and of overly luxurious consumption practices–basically, of living beyond one’s means and all these other kinds of narratives that belong there as well. 

And not about abilities to have a welfare state that that is able to take care of people in need and to create jobs and to have an economy that works for everyone and all these possibilities that could be created by an environment in which monetary policy could be used in a way to support policy goals, rather than as a result of this approach of the Bundesbank being in the hands of unelected set of people, mostly men, that make the decisions about the bounds around which the economy and economic policy basically has to orient itself.

Maxximilian Seijo: In your essay and in this discussion, you focused a lot on the German specificity of the EMU’s hard money, metaphorical and damaging discourse and policy as well. And I wanted to maybe hover a little bit on some of these threads that I think I’m sensing in your answers here. 

At the end of one of your answers, you implied Max Weber’s idea of the Protestant work ethic or perhaps that there’s something specifically German, even embedded in German history, in the language about this hard money, patriarchal discursive and cultural approach to monetary and fiscal policy. Can you talk about this history? I mean, I think of Protestantism, a word you just use a second ago was “indulgence,” which I think also links up to that history in its own way. There’s something there. I think that I want to hear you dive into a bit more.

Frederic Heine: Thank you. I definitely think there is a of specificity in German history on that. However, I haven’t looked at it comparatively. But as you say there’s specifics to German culture that one can trace this discourse back to and I have done that a little bit in the context of my PhD thesis, which maybe I can also later talk about a little bit. But for me, there might also be a larger picture that I’m missing. The two key processes that I have identified as maybe one of the reasons why this is prevalent in German monetary policy discourse, in particular, is on the one hand, the polarization of discipline in Prussian culture. 

And that’s partly because of Prussian state formation. Gorsky has this argument that in the Prussian state formation, under the first kings that was central to the Prussian state formation and the reform reforms that created the bureaucratic and military structures of that state, very much informed by Calvinism. The Protestant Ethic that you just mentioned, was very important in the top-down formation of the state, and particularly through military discipline. The Prussian state was very much an innovator in that respect. And stereotypically the German, the Prussian military, was known for its extreme level of core discipline.

That was reflected in the Prussian culture as well, where the military had a particular hegemonic quality, representing masculinity in that period. So I think that’s one reason for the historical trajectory for that kind of discourse. And then why, what does that have to do with central banking, monetary policy? This is where I believe the Weimar Republic comes in. The experience of hyperinflation in the Weimar Republic, after the First World War in the period between 1918 and 1923, there was a period of hyperinflation in Germany. At the end of it, people had to carry bucket loads of cash to buy basic necessities because it devalued so rapidly after the First World War. So on the one hand, there’s a scare about inflation there. 

That is often referenced as well, as one of the reasons for a general culture of stability, the hardest core. But then again, you could have similar experience of national trauma in relation to hyper deflation in some ways, if we look at the consequences of the world economic crisis of the 1930s and of mass unemployment that happened in Germany at that time, that was certainly had arguably a lot more economic social consequences than hyperinflation period. But in any case, so, I also looked at that period and the cultural discourses around that period, around hyperinflation and partly building on Ben Videx’ work in relation to that. 

And what we have seen just now in relation to the references to metaphors, about temptation, discipline, etc., are … how to say this? Basically, I kind of tame in relation to the metaphors that were used at that time because one of the sort of key metaphors there was of inflation as a vicious Sabbath, the figure of the witch was basically mobilized in relation to the experience of hyperinflation. And so that’s another sort of deviant femininity that is kind of seen as being involved in this process and this experience of inflation. And that’s very interesting, right? Because that goes back to misogynistic representations of femininity, as they were abound in the period of the witch hunts in Europe, which were particularly savage also by the way in German speaking regions. 

In that context, witches stood for those aspects of deviant femininity that are seen as threatening to the patriarchal order as Silvia Federici, for example, has argued, famously argued, and witches were seen as kind of those aspects of femininity. Mentally weak, being insatiable, insatiably lusty, insubordinate, incapable of self-control, etc. So the witch embodied all these things that threaten patriarchal social order. And this mobilization of this metaphor, I argue, has to do with the time period in which this happened, because after the First World War, Germany has lost the kind of military ideal of masculinity, has lost a lot of legitimacy in that context. 

And on the other hand, there was renewed a progress for women in the Weimar Republic, who had during the war taken on a lot of jobs in the economy that had been reserved for men previous to the war, and were still employed in that area. So there was a lot more female employment. There were also a lot more political rights in the Weimar Republic, they were granted the, I mean, the world suffrage, universal suffrage was introduced in the 1980s, as well. 

So I think it also reflects in some ways that there’s anxiety not only about the loss of monetary stability and monetary order, but also the anxiety about patriarchal order, expresses itself in some ways in those metaphors of witches that can contribute to inflation. And on the other hand, just to finish on that, then, when inflation was ended by the introduction of a new currency, and the appointment of a new central banker, named Hjalmar Schacht, the kind of patriarchal military masculinity that he represented in that context was again celebrated as he was called a magician who was able to rein in these demonic forces of the inflation, and in that context, also had a specific ways of retooling certain decisions, fiscal budget decisions, and started that discourse of “we have to limit the fiscal resources of the state” etc. 

So I think, in that context, the attention to monetary policy and what it means culturally and this association with ideas of masculinity on the one hand in order to bring under control some aspects that were ascribed to femininity is something that also dates back to that historical base.

Scott Ferguson: I’m fascinated by all the tensions and the contradictions that I think are teeming beneath all of these metaphors. So certainly from the point of view of Modern Monetary Theory, hard money policy, let alone hard money metaphors, tend to be destabilizing because they induce crisis, and they have a crisis response to crisis. 

So it’s ironic, it’s contradictory. It’s hypocritical in addition to being violent and unjust, that it’s the very construction of hard money as an institution and as a metaphoric that is actually a massively destabilizing element in its own right. And then there’s so many other things I want to ask you about, for example, have you thought much about the figure the “schwarze Null,” “the black zero” that is so prized in in German banking? I think it’s fallen out of favor in more recent years. But, you see these these helicopter view shots of all these bankers celebrating a balanced budget. With this aestheticized giant zero, like a plastic sculpture that they treat as a kind of fetish object. I don’t know if how much you’ve thought about that.

Frederic Heine: Totally. I also talk about the years on the crisis period itself in my thesis, and there’s a lot of… the shots celebrated when Schäuble was stepping back from the Finance Ministry positions. You have actually the Prussian references that I was kind of making, you have the Bild Newspaper, which is the biggest German tabloid. And at a certain point before Mario Draghi was doing the “Whatever it Takes” speech that was a turning point in the European Crisis Governance. When he was appointed, they depicted him with a Prussian spiked helmet, which is this military thing, kind of declaring him an honorable German, that was adhering to the monetary ideals of of Germany and later also, during an interview, presented him with the precious spiked helmet–an original one–from some time in order to remind him of the Prussian virtues that he was supposed to inhabit. So there’s a lot of fetishism is I think the right word to kind of describe this. 

Obviously, the Bild newspaper is not the Bundesbank itself, but actually you even have at one point and this is shortly after the announcement of the of the “Whatever it Takes” speech. You have the then-president of the Bundesbank, Jens Weidmann kind of deliver a speech in which a press release which is about the treatment of monetary policy in Goethe’s work, Faust. And where basically he cites Mephistopheles, or the devil, in relation to un-backed paper money, and kind of I don’t have the exact quotation but something else you know, if the devil says you know, if you have un-backed paper money, you don’t have to worry about gold or silver or anything like that you can just indulge in lovemaking and wine drinking and everything and that of your problems will be solved essentially.

Maxximilian Seijo: Well, just to add on that point–Goethe, in his life, and feel free to add to this, is responding to this feeling of expropriation and in his era in the context of the French Revolution, and later on, and these particular monetary allegory and Faust as, as you say, is dealing with in that same model of trauma and then looking and searching for that hard ground and allegorizing all of the externalization that that that go on whether it’s in the figure of the witch or later on, or the vampire or…

Of course, during World War Two and precursors with the Nazis, the figure of the Jews. But I find your exploration of this really, really exciting and fascinating, I think precisely because that history that you’re bringing up all the different strands is so rich with all of this detail and all of these metaphorical tensions and problems that you’re playing out.

Frederic Heine: Thank you very much. And you probably know more about Goethe and Faust than I do. And I realized recently that probably I should do some more studying of that, because it also combines the sort of thinking about inflation on the one hand and a very present kind of work that prominently places the witch as a cultural figure in German discourse, might also be related to why that was so present in the Weimar Republic as a metaphor. Just to say that, maybe I should go into that a little bit more.

William Saas: A little bit more out of left field, but I was intrigued–Was it Schäuble who got the spiked Prussian hat? The pickelhaube? 

Frederic Heine: It was Mario Draghi.

William Saas: Mario Draghi. Okay, I was just very curious, because one of the things that I think another thing that’s been implicit in our conversation and maybe it’s worth talking about or not is the sort of phallic character of a lot of these metaphors. And that that helmet, of course, is quite… I got I got interested in the relative height of the spikes on top of those helmets, and a very reliable source here, maybe you can correct me if I’m wrong, but it looks like: “an AKO of May 1899, would set the height at 9.5 centimeters for officer spikes and 8.5 centimeters for all other ranks.” 

Lots to talk about here, I suppose. I wanted to also circle back to talking about hard money, hard leaders. And kind of the theory of history at play here. It’s very tragic and romantic and zero sum where you have these hard leaders managing hard money systems in order to kind of defend but also fend off vulnerability and femininity. And I wonder if, as we’re having these conversations and talking about the EMU and your published work, if it’s hard not to in the States, look at our situation, and try to trace out and track the perhaps, German lineage of much of the same kind of rhetoric and discourse over here around inflation, especially today. 

And so for example, we talk one of one of our most recent episodes with Brett Scott, and we got into all sorts of money metaphors, and we sort of brought up the metaphor of Paul Volcker, at the end of the 70s, breaking the back of inflation, which is an interesting also that kind of displacement of or characterization of inflation in this case, thinking of them as kind of like a mortal enemy that you want slain, maybe not so feminine. 

But in any case, Volker, probably not who you would think of as this sort of heroic figure of history being cast in this heroic role. All of that, by way is saying, have you done much thinking about the way that these metaphors and systems of metaphors have ramified and played out in international finance discourse?

Frederic Heine: I think… Well, that’s very interesting observations. The short answer to this question is not very much. But Melinda Cooper, for example, has looked at the inflation period, like the 70s, sort of high levels of inflation in the US and kind of traced is somewhat similar discourses kind of in social conservative thinkers that kind of also have seen this as a sign of moral weakness and moral kind of lack of morals in the American population. 

I can’t recall any particular metaphors at this moment, but certainly I think there’s a lot of circulation of this kind of thinking I mean, Schumpeter as well was widely regarded economists that kind of also contributed to the circulation certainly have these ideas. I would have to speculate maybe to answer.

William Saas: This is following my Germanist colleagues. Maybe y’all can help me figure out… are there… can we track any? Are you seeing direct connections, as you’re asking these questions between these sort of inherent or essential Germanness of many of these metaphors, and the way that these are also found, I think commonly in other and especially US contexts.

Scott Ferguson: I guess Max’s questions about Protestantism, reformed Christianity’s role in and beyond pressure is maybe one avenue. One thing I’ll say is that the metaphor of whipping comes up everywhere. The Ford Administration had a campaign called “Whip Inflation Now”, and that’s in Frederic’s article, there’s whipping all the time in EMU discourse.

Maxximilian Seijo: One thing I’d add, when I was studying economics, it was very common for people to ask you, “are you a hawk or are you a dove?”  And there’s something complicated there, too, with regards to I think metaphors. Hawk is the predator. And the dove is in a sense, well, as an image in religion and theology is important. But but also is not a predator, we just say, so that’s maybe another avenue in the US context to… where this kind of exploration would be fruitful.

Frederic Heine: That kind of hawk was the stuff kind of metaphors have also been also used in the European discourse around central banking and during the Eurozone Crisis, there was also this kind of talk about Mars and Venus relating to an IR-type approach, which kind of position the US as Mars, so the masculine kind of foreign policy, and Europe as the Venus which was kind of trying to have influence through soft powers, as it’s also called. And that was kind of referenced in the German press in relation to monetary policy being like, “Yeah, but in monetary policy, we are Mars and the USA is Venus.”

Scott Ferguson: Maybe we can situate this article in your dissertation. So it’s our understanding that this article is one of the fruits of your dissertation that I would presume you’re turning into a book, although I don’t want to speak for you. What’s the broader project of the dissertation and perhaps a future book?

Frederic Heine: Basically, this is correct. Yes. It’s based on one chapter of my thesis. And in that thesis, I kind of look, I mean, the focus of the thesis is the governance of the Eurozone Crisis. And I asked similarly to what I do in the article we just were just talking about, I asked what role cultural gender politics play in the governance, discourses of the crisis. And the rationale to do this was because there was a lot of research about how the crisis and austerity had gendered impacts on social reproduction on public sector employment, on gender equality policy, in that regard, but not so much research to understand maybe gender, if gender can also be seen as integral to the governance of the crisis. 

And so I ended up looking at these metaphors and this cultural kind of politics. And I also ended up taking a historical approach, right discussing these things we’ve just been talking about both in relation to Weimar Republic and then the period of the making of the European Monetary Union. And so the broader argument and the thesis maybe is that masculinist performative agency, as discussed, for example, today has been constitutive for the crisis by asserting a valorization of disciplinary masculinity in the governance of the European Monetary Union.

But secondly, that also that cultural gender politics have shaped and contested crisis governance in a contingent way as well. And that there were sort of variations in the kinds of performative agency that was the general performance of agency that was employed. We’ve already talked about some aspects in which they have been reinforced right in certain levels in relation to how central banking views of the ECB have been represented–the Prussian spiked helmet for Mario Draghi, etc. But also, there have been variations, for example, when Angela Merkel, advanced as a figurehead of austerity with the image of the stabian housewife. 

So kind of mobilizing more an image of domestic femininity as as a sort of virtuous kind of role to apply to austerity. And that sense, in a similar move to some of the discourses around, post financial crisis, would the crisis have happened, if it would have been Lehman Sisters, rather than Lehman Brothers? And this kind of valuing valorization of certain kinds of femininity in this context, as a result maybe of a portrayal of certain masculinities as well. 

And I also look at how anti-austerity discourse, for example, that masculinity is also mobilized with some exclusionary effects, partly in anti-austerity mobilizing. I look at the context of Spain, where at first there was this kind of sense that feminism doesn’t really have a place in this kind of anti-austerity movement. But then, at the same time, that was very strongly contested by feminist activists and kind of formulating centrality of social reproduction as well as the topic of contrasting austerity. I look at those politics as well in my thesis.

And so overall, the argument basically, is that gender representation still matter very much in legitimation of that economic governance, but how they do so is principally subject to specific circumstances, but also to agency in some level. And to answer the the other question that you have, I am working on a book of manuscripts on the basis of this, but I haven’t sort of formalized the book contract yet. So it might be a while until it sees the light of the day.

Scott Ferguson: We wish you luck. I want to follow up with one comment, before we move on to our last big question, which is yet another dimension of what you’re up to a bit we really appreciate that really jives with our project is that while on the one hand, it is important to have a critique and a refusal of austerity is as natural or given or necessary. And zero some trade offs and other kinds of exclusionary punishing systems. 

But it’s not enough to have a positive political or economic language of anti-austerity, because because the world is more than just narrow, political and economic language, all kinds of other language, all of language and culture is involved. So what I think what we’re often trying to do and you’re doing spectacularly on your own journey here is teasing out and shining a critical light on languages that remain austere, that remain exclusionary, that may remain deeply problematic, even as you suggested in the midst of overtly anti-economic austerity campaigns.

Frederic Heine: I like very much what you’re saying here, and it’s important to remain also self critical, and not to kind of assume a sort of coherent understanding of the economy and sort of a coherent system of contrasting power structures within the economy with reference to one’s own class position, for example, without also reflecting intersectionality on the one hand, on sort of the different impacts that crises have on different subject positions. 

An important paper, also on the subject of the Eurozone Crisis, by Bassel and Emejulu made the argument: whose crisis? If we talk about economic crisis, it might be experienced as big crisis in particular by maybe privileged subjects who are immediately losing out, but then for very sort of marginalized people it might not even sort of register as much because they’re concerned a lot more with for example, refugee status within a country. And obviously, crisis still affects them in the long run, but it also… so it’s important to reflect on the way… on the intersectional ways in which economic social policies matter. 

And also often in anti-austerity movements and discourses there’s a tendency of men participating in these movements of assuming this grand analysis and grand strategy approaches that have it all figured out and have this sense of authoritative knowledge that doesn’t need to concern itself with the details maybe or the internal processes. What’s happening within one’s own movement. And that’s also one place where then hierarchies reestablish themselves within contrasting austerity and those those hierarchical relationships. It’s important to be reflective of these things.

William Saas: Absolutely. Frederic Heine, it’s been wonderful having you, but before we let you go, we’d like to take some time and chat with you about another essay you’ve recently co authored and published with James Brassett titled “Men behaving badly”? Representations of Masculinity in Post-Global Financial Crisis Cinema, published in the International Feminist Journal of Politics in 2021. 

Essentially, the essay analyzes complex and shifting gendered depictions of finance and films released after the Great Financial Crisis, such as Inside Job, Margin Call, The Wolf of Wall Street, and The Big Short. Can you, as we’re on our way out the door, give us a window or glimpse into how you and your co author read the role of gender in these post-GFC films?

Frederic Heine: Thanks for asking this question. Basically in those films about finance, we look at how they represent masculinities and how this changes in some ways over time, so more often than not films about finance do center quite strongly on the male protagonists. Even in more recent films on finance, despite maybe the rhetoric of Lehman Sisters that kind of emphasize a bit more the increasing role of women in finance as well. Anyway, so, we try to understand how these representations of masculinity is what functions they serve in those firms. And often in these films, there is a kind of analogy basically between a critique of finance and a critique of masculinity or a critique of excessive masculinity. 

So, the predatory excessive masculinity if, for example, take the film Wall Street and the iconic figure of Gordon Gekko it portrays financial excess in terms of a toxic financial system and in some ways, that is seen as toxic to the real economy or to the heteronormative family, or the fabric of society. Kind of understood in the context of embedded liberalism. And this toxicity of finance in this respect is represented through hyper masculinity. So, masculinity is of, for example, Gordon Gekko, that are seen as extremely dominant, as greedy, as extremely sexually active, promiscuous, predatory. 

And in that kind of sense of embody in some ways, this disembeddedness of finance being represented as toxic through toxic masculinity basically. And that happens also in the post financial crisis films to some extent, the most extremely this is the case in The Wolf of Wall Street, which is a film about excess anti-gravity from the beginning to end basically. But it also focuses quite clearly on the realm of the legal because it’s actual financial fraud that is described in the film. 

And so, in some ways focuses more on the behavior of the bad apples rather than systemic issues. And it’s also partly coupled with class distinction. So, in the film, it’s about working class guys basically turning to investment banking, and sort of adopting some elements of working class culture within that process, and then you have a representation of brazen risk taking, overt sexualization, etcetera, in in these processes. As a shift cipher for something going wrong in finance, but in The Wolf of Wall Street, through the distancing through humor, and through the distancing through class and through sort of focusing on a particular case of clearly illegal sort of practices. It’s not necessarily as sort of indicting as the Wall Street film. 

But then, in the films, Margin Call and The Big Short, you also have elements of this brazen risk taking, overt sexualization, partying, as metaphors for the excesses of finance. But you have a redemption of certain masculinities in those films. And with them off finance, too, as we argue, so that’s on the one hand, the geeky masculinity that doesn’t understand social clues and therefore doesn’t get caught up in the irrational exuberance that is portrayed by the sort of culture of excessive partying, etc. 

And so this idea of this hyper rational, geeky masculinity that’s not subject to these temptations, if you want to connect this also to some of the stuff that we’ve been talking about before. And these masculinities don’t get distracted and they look at the real data and therefore aren’t taking part in the herd behavior, as Keynes would have said, for example. And then turn out to be the real men and the heroes of the films like Michael Burry in The Big Short, or Peter Sullivan in Margin Call. And on the other hand, there’s a level of emotional learning as portrayed in the films particularly in The Big Short that sort of good apples and that behave that sort of have a moral compass still intact that learn from past mistakes from past or working like Baum in The Big Short

And so, we kind of see this sort of redemption of some aspects of masculinity as a way in which the potential of both finance and masculinity is kind of seen as to kind of remain with maybe unfortunate toxic masculinity referenced earlier. But sort of the kind of redeeming that and sort of kind of portraying a masculinity that has come under some level of criticism within the sort of kind of discourse of excessive predatory masculinity in the context of financial crisis, the excessive risk taking, etc.

And kind of redeeming a figure of reinstating rationality of the market and of finance, through references to on the one hand geekiness and rationality and that aspect. And on the other hand, of sort of emotional learning of appropriating, if you will, some aspects of femininity of kind of off yet constitute femininity of being emotionally more aware of oneself into sort of a discourse of resilient finances. Basically, what we come out with at the end of these movies.

Maxximilian Seijo: Well, Frederic Heine, it’s been a real pleasure having you on Money on the Left, we hope at some point, maybe to have you back soon.

Frederic Heine: Thank you very much. It was a great pleasure. And thank you so much for these great questions and spin offs. It was a very good and pleasurable experience. Thank you very much.

Cloudmoney with Brett Scott

Brett Scott joins Money on the Left to discuss his recently published book Cloudmoney: Cash, Cards, Crypto, and the War for our Wallets (Harper-Collins 2022). A committed advocate for financial heterodoxy, Scott grounds his perspicuous critique of “cloudmoney”–the conjoined efforts and outcomes of Big Finance and Big Tech’s drive to go “cashless”– in his anthropological training and work as financial derivatives trader in the midst of the 2008 financial crisis.

Through our conversation we explore the possibilities and limitations of different metaphoric frameworks for understanding money, paying special attention to the pitfalls of figuring money as blood-like fluidity. Scott’s own comparison of financial operations with the functioning of the central nervous system prompts further discussion of the temporal and physical realities of modern money. We also discuss how awareness of the principles of monetary design clarifies the need for physical cash and the perils of privatized and surveilled forms of digital money.

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Music by Nahneen Kula:


The following was transcribed by Mercedes Ohlen and has been lightly edited for clarity.

William Saas: Brett Scott, welcome to Money on the Left.

Brett Scott: Good to be here. Thanks for having me on.

William Saas: It’s wonderful to have you. It’s been a long time coming. Last time we saw you was at the first international MMT conference at UMKC in 2017. And before that you worked in finance and had been writing about money and crypto for a while. Could you share a bit about how you ended up at that MMT conference and maybe catch us up on what you’ve been up to since then? 

Brett Scott: Sure thing. It’s actually quite a funny story about how I ended up at the conference. I was invited to another conference in Delft in the Netherlands. It was called Reinventing Money. And it was run by these… I want to say quite libertarian Dutch monetary reformers. And I don’t know how much time you guys have spent in the Netherlands scene, but there’s actually quite a long tradition of this quite conservative monetary reform people there. And I think the Netherlands in general has this vibe, which is… it’s one of the first capitalist trading nations. So it has this long tradition of liberal economic thinkers. 

And anyway, I ended up at this conference, one of these Dutch managed monetary reform people, some of whom were quite right-wing. Quite like “gold bug” types. And I ended up on this stage and I was super jet lagged. I had very low blood sugar, partly because I’d actually been blocked from buying a Coca-Cola from this cashless vending machine that refused to take my card. So I decided to start talking about this on stage. But how this machine had stopped me from engaging in a market transaction. And so I kind of ranted on the stage. And right in the front row was Stephanie Kelton, who had also been invited to this since the first time, I guess, she had seen me and then we spoke over dinner. And then she said, “hey, come to this event that we’re doing”. And that’s how I ended up at the MMT conference. It was great. That’s a really cool event.

William Saas: So how’d you end up in the Netherlands at that conference, talking to the “gold bugs” and sharing your market grievances?

Brett Scott: Yeah, so actually in monetary reform circles, there’s a bunch of different traditions, as I’m sure you guys have come across. A lot of the anti-fractional reserve banking, sometimes an anti-credit creation of money people like that sort of one tradition and monetary reform. And so I think that’s quite a sort of strong tradition in the Netherlands. There’s groups like ons geld, which campaign against banks being able to create money. And so I think that Netherlands scene I was… I had new people in that scene, and also new people in the crypto scene. So there’s also this kind of crossover between the anti-bank creation of money, people with this sort of crypto currency, Bitcoin people. 

So yeah, the guys who got me there are kind of in the middle of that world. And actually, the guys who arranged the conference had tried to start the first full reserve bank in the Netherlands. And we’ve kind of, I think it failed, it hadn’t managed to get a banking license, but there was quite an interesting effort. They were trying to create this fully backed bank. They also made a board game about the evils of bank creation of money. So it’s quite an interesting scene. And actually, I remember actually once going into the MMT conference, and some of those anti-fractional reserve people turned up at the MMT conference as well. And so there’s an interesting political dynamic between the MMT movement and the sort of… what would you call those? What do you call those guys? Like the sort of…

Scott Ferguson: Positive Money?

William Saas: Positive Money? 

Scott Ferguson: Yeah, although they’ve… certain Positive Money groups have really changed, I think in relationship to the MMT movement. 

Brett Scott: Yeah.

Scott Ferguson: So I don’t want to blanket call them all the….

Brett Scott: You know, I knew Ben Dyson, who started Positive Money in the UK. [He] sort of then moved away from it and actually became a central bank digital currency researcher at the Bank of England. But, Positive Money has always had this kind of interesting dynamic in the UK where it actually was trying to position itself as a left-wing monetary reform group, but would often attract these people from the sort of political right. You had these conspiracy theories about the banking sector. And I know Fran, who is still the director of Positive Money has always had this trying to sort of distance herself or distance the organization from the more right-wing elements that often crowd around monetary reform.

 But, that’s what partly what makes monetary reform quite an interesting area politically is it actually does attract these different ideological groups who sense that there’s something in the monetary system that needs to be addressed. Yeah, I guess I kind of span between these. But I’ve noticed over the years, there’s been more sort of Positive Money type of community getting into MMT is getting more on board with it.

Scott Ferguson: Yeah, that we’ve definitely noticed that as well. So we brought you here today, we invited you here to speak with us about your new book, which is titled Cloud Money: Cash Cards, Crypto, and the War for our Wallets, which is just out last month with Harper Collins. But before this book came out, you published a regular newsletter that was called Altered States of Monetary Consciousness. And you, even before that, were blogging about finance. And I guess, just to kind of frame our conversation, we’re wondering if you could talk to us about, really, how did you come to be thinking about money and publishing about money and advocating in these various kinds of circles? And how has your approach or your rhetorical strategies changed over time?

Brett Scott: Sure, there’s a lot I could say there, actually. The kind of broad brushstrokes of my trajectory, as it was, I have a background in Anthropology and History. But also quite left-wing politics. And I decided to do this experiment. Well, let’s say adventure. I like to call it an adventure, where the side I’ll go into the financial sector and sort of explore it. Or perhaps embody it. I like to experience things with my… to feel the emotions of things. And so I went, in the midst of the financial crisis, I went and worked in this derivatives brokerage. And so for a while, I was actually involved in high finance and over the counter swap contracts. So basically exotic derivatives in the midst of the financial crisis. But coming from this left-wing political background, and that made… it was quite an interesting experience, learned a lot of stuff about the high finance world. 

But also realized how little people knew about the monetary system in high finance, often because you don’t actually need to know anything about the monetary system, often when you’re working in very specialized finance. And after that experience, I went and I wrote a book for activists, which is called The Heretic’s Guide to Global Finance: Hacking the Future of Money, which is basically a sort of simple guide to finance for people who had some intuitive concerns. And people, for example, got involved in the “Occupy” movements, I was actually asked to write it in the wake of the “Occupy” movements. And you know, that was kind of published by a small left wing press, Pluto Press, a London based publisher. 

And since then, I worked in lots of financial reform campaigns and these other types of financial activism, you might call it, but also got involved in alternative finance, which is thinking about alternative currencies, alternative banking, and so on. But fast forward, you know, into the present day, I also got heavily involved in looking at the intersection between tech and finance, big tech and finance. And my newsletter, which is what you mentioned, Altered States of Mandatory Consciousness, I actually started that amidst the pandemic. 

And it’s still going on, it’s temporarily been paused. Because my book right now, Cloud Money… my new book is taking up lots of my time. But yeah, Altered States of Monetary Consciousness, the basic idea was, I was tired of writing. I’d written for many journalism outlets, or big media publications and so on, but I always find them quite constrained. And what I can say in those publications, they always want some sort of… you have to attach everything to the news, and you have to spin everything in a certain type of way. And what I was actually more interested in was writing for an audience who was more interested in sort of meditating upon the monetary system without having to have it attached to current events.

 And the newsletter basically enables me to do that. And one of the big things I was trying to do in the newsletter is to help people visualize systems that are invisible. Sometimes by literally trying to draw them. And sometimes by using metaphor, because metaphor is seen as a kind of like visual technique, in a way, it’s like you have an invisible system. So, you create a visible metaphor, that person can picture in their mind as a way to sort of help them to grasp this otherwise intangible type of thing. And the monetary system in the financial sector more generally, often very hard to conceptualize, which often is why people feel so alienated. 

And so I’m very highly motivated to do the newsletter precisely because I’m interested in, how can you kind of de-alienate, help people to sort of feel these systems more, picture them more, and then, from that perspective, be able to perhaps do more effective action on them? But if nothing else, just be able to understand their position in the economy better.

William Saas: Subscriber to your newsletter, here. I’ve appreciated it for multiple reasons, but one in a kind of academic and pedagogical sense as somebody who teaches and thinks about rhetoric, it’s, what you’re describing is a project of teaching, through different and adaptive, rhetorical strategies. And I think that that’s part of what has drawn me in and I think lots of others, to the MMT project, which is the insistence on… there’s almost a kind of resistance to metaphor. I mean, it never really works. 

There’s always metaphors running throughout the financial system, and the way that people are thinking about things, but the creation of concepts and systems that are deliberately resistant to popular understanding, esoteric, and so the process of translating that stuff and making it apparent like that bringing before the eyes making visible the structures and systems.

Brett Scott: And metaphors are quite… I find metaphor very fascinating, because it’s also quite dangerous. There’s limitations to metaphors. And what I’m often doing in the newsletters is experimenting to see how certain metaphors work and where they fail as well. And with the monetary system this always becomes an interesting task. So actually, talking about MMT, I did a piece, which was called MMT is a Language of Ants, Not Squirrels. And I was talking about how you got to understand the worldview of a squirrel is like, you’re racing around trying to find acorns. And this is the kind of like, sort of “money user” mentality. The person who experiences money just manifesting in front of them and trying to grab it.

Scott Ferguson: It’s very Lockean. 

Brett Scott: Versus the experience of the actual oak tree or these ants who issue these acorns, and actually want them to spread. And I like this metaphor, to some extent. It kind of shows us the dynamic between users and issuers, but then it has all these other limitations to it. So, in my book, Cloud Money, I’m using a variety of different metaphors, but it’s always like, trying to sequence metaphors together in the right order and not let them clash with each other, is always an interesting artform.

William Saas: But there can be something telling or instructive or constructive about mixing metaphors in a way that you might mix chemicals and see what happens. Some kind of reaction to it. So you mentioned the squirrels and the ants. Is what we find in Cloud Money, sort of representative of your best efforts and successes in this sort of metaphor, experimentation that you’re doing in the newsletter? Or do you feel like you might have hit upon something new that you could share with us now?

Brett Scott: Well, Cloud Money has a very particular agenda. I’m talking about the politics of the states or government cash system versus the commercial bank, digital money systems, and what it’s focused on and the crypto world. It doesn’t necessarily go super deep into some of the more… just more generalized understanding of money, perhaps. So in my newsletter I want to do is these deep dives. And I know you’ve probably seen these nervous system metaphors I use. So, my editors in Cloud Money, I had these whole sections, but I’m just trying to do this huge, like nervous system metaphors for the monetary system. 

And they cut it down quite a lot. Because it’s an I can go into the metaphors but… I think Cloud Money has some great metaphors, but it doesn’t have my entire repertoire. I think I’d like to do another book where I go way, way deeper into some of the kind of different approaches to understanding monetary systems, and particularly this nervous system metaphor I’d like to build upon.

Scott Ferguson: So maybe we can pause here and give you an opportunity to talk about the key contrast of metaphors that you put in the beginning of the book. And that’s the blood metaphor, which is very, very old. You can find that in Hobbes. And then this nervous system metaphor and understanding that no metaphor is perfect, and that you are always experimenting with metaphor. What is that contrast help you argue and help you make visible for the reader of Cloud Money

Brett Scott: Sure, yeah. So at a deep level for monetary systems, in general, I’m using this metaphor of money as a nervous system, rather than a circulatory system. So in many typical economics discourse, there’s this idea of the financial system as some kind of circulatory system, money is blood. And actually, when I used to work in finance, you’d actually find many financiers had the self image of the financial sector as a kind of heart of the economy. So it’s like then they’ll say things like, “without us, these industries wouldn’t wouldn’t get funding, they wouldn’t get the lifeblood that they need to live as it were”. So there’s lots of this idea that money itself has some kind of substance of value that sort of pumps around, and I’m not claiming to be some expert on the human circulatory system.

 But you have this idea of these little blood cells that carry nutrients or carry things to tissues and you can have the same sort of metaphoric understanding of money. This idea of money is somehow carrying value to people. This is the very typical sort of what I often call a commodity orientation to money, it’s sort of like the imagination of money as some kind of mystical substance of value that flows around. Which he finds very typical in many… basically, I’d say the mainstream economics is very typical. 

Implicitly, it’s the underlying kind of mental model of monetary systems. Then I think that blood metaphor is deeply flawed, because in my worldview, nothing can actually, I would say… in the MMT worldview, as well, but more generally, in people who understand the concept of money as credit. It’s understood the actual underlying value and an economy, the underlying sort of substance, as it were, resides in human beings and the natural ecosystem. This is what all economies are is human beings applying themselves to the earth, and building things. And that’s where your value it.

 And it’s not like, the unit of money is carrying that around somehow. But what units of the monetary system is often doing is activating people and particularly people who are locked into very large scale into interdependent meshes. And so if you sort of zoom out, the nervous system metaphor is much more accurate in the sense that nervous impulses activate tissues. But if I’ve been rock climbing all day, and my arms are exhausted and I’ve basically just totally pumped out my arms, no amount of me sending impulses to my arms is going to make them work. And this is like quite a useful thing to be thinking about sort of monetary systems. If you’ve just maxed out the actual labor and resources, new economy, no amount of like issuing money is going to sort of make them work. 

But if you haven’t, if you have a bunch of sort of excess capacity or the sort of underlying substance, you actually can. I think nervous system as the metaphor is good. And also particularly for the financial sector, when you start to think about large scale financial institutions, what they often are doing is… I kind of think about them as a sort of motor cortex. So again, I’m not like a neuroscience expert, but very crude terms, the motor cortex is the part of your brain that translates thoughts into action. So I think, “I want to move my arm” and the motor cortex will translate that into action. I think the financial sector can often be thought about that. 

We’re doing large scale financing of big projects, you’re kind of activating 1000s of workers into action. And those workers are what creates the thing, but the financial sector is able to sort of coordinate that action. And this sort of turns the financial narrative on its head to some extent. It’s not like those workers are unable to… the source of value comes from those work. That’s not from the financial sector. But certainly in an interdependent economy where you’re dependent on money, the financial sector has the ability to activate them. That’s basically the metaphor. And I don’t know how well I explained it. But that’s kind of it.

William Saas: I think it’s great. And it calls to mind, there’s a particularly grisly metaphor that’s sort of in the ether right now around inflation. And it recalls the actions of Paul Volcker and the Volcker shock in the early 80s, as breaking the back of inflation. I don’t know how considerate that metaphor is, but they talk about it as thinking, will Jay Powell now break the back of inflation, just like Paul Volcker? But in a way I don’t think it’s thoughtful in the way that you’re thinking, but it lines up nicely with what you’re talking about. What are they talking about in breaking the back of inflation? They’re talking about deactivating all these circuits and modes of action.

Brett Scott: I mean, I think this sort of stuff becomes very important. I haven’t necessarily thought huge amounts about inflation metaphor. But, certainly, for example, one of the things you’ll find in the commodity imagination of money, this is where you’re imagining money is somehow metaphorically carrying stuff with it. A lot of the inflation scare mongering stuff imagines it almost evaporating out of space. You have this idea that it’s almost a gas leaking out into the atmosphere, some other money is disappearing, it’s floating away. So again, it carries the implicit underlying idea that somehow something is inside the money itself that’s escaping. And it’s not thinking about the full sort of circuitry of an actual interdependent network, where all the actual value lies in human beings. 

So this is very partial descriptions of complex systems. And this is often how you do scaremongering or misinformation around what’s going on. I mean, you see this all over and monetary systems, it’s a big, big thing. During another completely different example, during Brexit in the UK, there was all this kind of scaremongering with them saying, “now we’re spending all this money on the EU”. It’s almost like they had this idea that money was sort of evaporating away or floating away, like some substance. And this idea is well, what do you get for that thing? These are complex systems with these multi-directional flows. It’s not like you just find these singular… 

Yeah, I haven’t explained it very well. But I think there’s a huge amount of this very partial sighted descriptions of monetary systems. And often what I’m interested in doing is showing people like the interconnections and interdependent nature of monetary systems.

Scott Ferguson: Yeah, the blood metaphor. There’s a version of blood speak here too that sees money as hemorrhaging. Which is such a misleading way of understanding. Like we hemorrhage money and we hemorrhage jobs and free trade contracts or whatever. I think of Ross Perot you know, on the campaign trail, and these are like you know NAFTA might be a problem, but it’s not because of hemorrhaging. It’s not because of this unstoppable outflow. 

Brett Scott: Another fascinating one and monetary speak is when people talk about money going into things, for example, when people say huge amounts of money are going into the crypto market and…

Scott Ferguson: They’re getting pumped.

Brett Scott: They’re getting pumped into the crypto market and I’m like… So what are you saying? Because this is quite bizarre because you’re basically handing money to somebody else to buy a token from them, but now it’s exiting. So, this is a very strange idea that somehow it gets captured inside something rather than it’s within an interdependent system that’s moving around all the time. So we had this very strange partial vision idea, you know modern economics is full of this kind of bizarre sort of partial vision on monetary systems.

Scott Ferguson: Yeah I really appreciate your reflexive experimental approach to metaphors and money because it is so taken for granted and it’s a constant challenge. I think we find and you know we often need to appeal to physical things and physical perceptible entities that we can that we can understand, but they very often run us in all these problematic directions.

William Saas: We start to forget that they are metaphors. That’s part of the reason why you can tell the success of a metaphor, by how few people actually recognize it as one.

Brett Scott: Yeah. I think those machines are made to sort of show a Keynesianism that’ll be like water wheels, and… have you guys seen those machines that they use?

Scott Furguson: Yes.

Brett Scott: Who’s the guy who designed that? But that’s all water metaphors for money and weirdly, the Bank of England has also used water metaphors which isn’t actually that far from the…

William Saas: Filling the tub. 

Brett Scott: Blood metaphors. And again, it’s a useful… it’s an easy kind of one, but it carries with it the oldest dangerous sort of commodity imagery for me.

Scott Ferguson: Yeah it’s so fascinating just to kind of keep going down this path. You’ll find those metaphors even in MMT as a popular explanatory strategy. I believe it’s this guy who writes into the pen name JD Alt. Who created all these diagrams of these bathtubs being filled up with you know fiscal spending. I think there are deep limits to those metaphors, but it just goes to show that you can tweak liquid metaphors and they can have a different valence. Even if I would say that I don’t really like them, they’re certainly a lot better than mainstream economics or the financial sector.

Brett Scott: ​I’ve also used them. Actually that’s my concern about my MMT article that I did about squirrels and ants was precisely… it was somewhat acorns it was just commodity imagery. So I’m dealing with these things that have an actual inherent sort of… and I know that I say this in the article, this is the limitation of this… can show you the difference between an issuer and the person who is a user of money, but it will give you the wrong… give you a commodity metaphor of money at the same time, so that’s that’s a kind of trade off on that metaphor.

William Saas: When you’re also with the ants too, there’s the whole… the rest of the baggage of the narrative of the story…of the Lord of the Rings and the Hobbit and all that stuff. Okay, so if the ants are… where are they in the cosmos of the Lord of the Rings universe relative to others?

Brett Scott: We should start a mandatory metaphor school or something.

William Saas: I think so! Or at least we have a publishing space on our website, if you want to riff or whatever, but what I like too is that… so talking about breaking it down to there’s a circulatory system which is ultimately a fluid metaphor, that that can be talked about in sort of bathtub terms, as I think JD Alt does, but what we get with the nervous system is another kind of physical system in electricity. And neurons and impulses and things like that, that are coordination at a distance almost simultaneously as possible in a way that the physical water fluid metaphor there’s a slowness to it. One of the things– talking about metaphors– I gotta shout out Scott’s when we’re talking about the central nervous system.

 We were writing about University currency system, and he talked about the Fed as a “choreographer of credit” in one of the things that we wrote together. And it strikes me as like there’s all sorts of modes of performance available if we think about the system as a set, a nervous system there’s clumsy coordination and then there’s fluid coordination, choreography.

Brett Scott: One of the reasons why I call my newsletter Altered States of Monetary Consciousness is that it has multiple meanings. On the one hand, it could just mean helping people think differently about money. But actually, it is sort of deeper meaning when you go into that sort of more nervous system metaphor. I’m actually literally thinking about manifests as a type of planetary level consciousness. An actual sort of… one of the big things many people intuit about, if you have to imagine the economic system as a kind of super organism, that we’re all connected together and an interdependent mass. In a sense we are the body of the economy. And then the sort of monetary systems, are sort of embedded in that as a kind of nervous system. 

And then the financial system, you can almost think about as more a central part of the nervous system is able to activate stuff. And if you think about critiques of the financial sector, often one of the biggest critiques is how sort of numb it is to its body, as it were, if you think about the superorganism concept. During the financial crisis, you’ll find this extreme disconnection between the actions of the financial sector and the reality of what’s happening on the ground. 

So if you sort of think about this metaphor, seriously designed to think about literally, how kind of like disassociated the sort of system is, and then if you think about alternatives, you start with thinking about how do you make the monetary system more responsive to the reality of its actual… the underlying body of the economy as a world terms of resources, and people? Now think, for example, the MMT movement, in listening to the mainstream policy circles, thinks far more about that kind of stuff, saying, “you guys are fixating upon this abstract stuff about how much money there is, or whatever”. But in reality, we should be thinking about what’s the underlying reality of the economy? 

Scott Ferguson: Yeah, and people and employment and suffering and ecological collapse. Yeah. So let’s pivot and really get into the key critical argument that you’re making in Cloud Money. So, you’re positioning your book and yourself against this dominant and largely taken for granted narrative, that’s surprise surprise, coming out of the banking sector. About digital finance, and that we’re moving kind of in this inevitable evolutionary progressive way, from this old bad thing that we call physical cash to this clean, efficient digital payment system? What’s wrong with that narrative? Descriptively, politically, and whatever else you had to say about it, and what are you sort of offering as an alternative or a counterbalance?

Brett Scott: Yeah. So in some ways, what I’m… there’s a few different things I’m trying to do in the book. But, one of the big ones is to cut through the inauthentic narrative about why we’re seeing declines in the cash system around the world. Now, the typical narrative is very much this idea that it’s something that we’ll want, and we’re driving it through our ordinary everyday actions. And it’s also driven from the bottom up. It’s very, very typical, you’ll find this language if you look at a newspaper article, which says something like, “customers move towards digital payments”. There’s all these articles, you’ll see them in the store. Well, they’ll say “banks shutting down ATMs as people move towards digital payments”. 

The agency is always imagined to exist in the sort of small individual. Everyone’s just collectively acting like this and this is why this is happening. And all the big institutions are then following what the everyday person is doing. So the bank is shutting down its ATMs because all of its customers don’t want the ATMs anymore. All right. Now, that’s a very, very typical narrative. Whereas what I’m doing is sort of filling in the other side, the top down part of that story, saying, “actually, if you look at this, what’s been going on, there’s been a huge amount of top down pushes against the cash system”. 

And actually, the move away from cash is frequently far more in the interests of very large tech and finance companies than it is in the interest of everyday people. And if we go back to the more broad points we were making earlier about an economic system being a huge interdependent network of different players. One of the political questions you ask yourself is who has the most power In the economies that we find ourselves in? We’re all dependent upon each other. And we’re also locked in these huge webs with each other. But also, we’re often operating via these sort of huge corporations. And actually, their economic actors as a collective, they often have a lot more power than ordinary people do. 

So if, for example, you got oligopolies or banks and tech companies who are moving in a particular direction, they’re able to actually alter the whole nature of the overarching economic system. What’s called “the War on Cash”, sometimes, about these types of top down actions with these oligopolies of players are all moving against the cash system at the same time, and pulling people along with them. Now, it’s true that there might be some people who willingly go along with that trend or perceive themselves as you know that it’s in their interests. But in the long term, that’s sort of irrelevant.

 What’s most relevant is that these players are going to do it anyway. And their main job is to either initially convince enough people through sort of ideological techniques and marketing techniques. But they don’t need to convince everyone, they just need to convince enough people that they can set in motion the changes that will then force everybody else to make the change. And if you imagine in some sort of hypothetical future state, it wouldn’t… in countries like Sweden right now, where this process has gone far enough ahead, it’s no longer a choice. These companies no longer have to sort of spin stories saying, “oh, people are choosing to do this”, because they know people no longer have a choice.

 So Cloud Money, I’m basically looking at the… cutting through the spin of why these changes happen. And also pointing out that if you zoom out and look at the trajectory of corporate capitalism, what’s happening is, big tech and big finance are fusing together. Increasingly, Amazon, all these players are saying they can’t operate unless they are fusing with transnational digital finance infrastructures. And then the capitalist system, when you try to maximize profit, your overarching sort of impulse is going to be towards increasing scale speed, interconnection, complexity, acceleration. And cash basically is antithetical to that. Cash is a thing that sort of slows stuff down and creates friction. 

So even if individual human beings who are physical and on the ground actually resonate with the cash system, the overarching economic system they find themselves within, those corporate players doesn’t. Alright, so this is why people will often have this the story in their head, that the end of cash is inevitable. And for that matter, the end of anything that’s not automated or not sort of digitized. That’s the sort of the basic overarching thing in the book. And then I’m also looking at then how the cryptocurrency movements perceive themselves in relation to that growing tech finance vortex. That’s the broad brushstrokes.

Scott Ferguson: Can we dig a little bit deeper into what we might say is your defensive cash? Why cash? Why cash at all? What do people resonate with when we are talking about physical cash? Why is the narrative, the mainstream corporate narrative that is destined to be outmoded. Why is that so problematic?

Brett Scott: Sure bear in mind, cash is still the most widely used one payment in the world. Yet the narrative in the sort of public domain imagines that it’s some kind of thing that’s just obviously destined to disappear. So in terms of actual everyday usage around large parts of the world remains the biggest form of payments, but definitely the ideological tide is against it. And so that’s just one sort of meta point to make. But in terms of it’s the appeal of cash, I’m not saying people have some sort of self conscious love of the cash system, often these are unconscious types of systems. 

But either way, I will describe the cash system as a public utility, or I can describe it as the kind of the public bicycle system of payments. It’s got this public utility aspect to it. It doesn’t require any type of interaction with large formalized institutions. It just works, has immediate finality. A lot of people when they are asked on the Central Bank’s surveys about why cash, there’s a kind of hierarchy of reasons why they prefer cash. One of the immediate ones is that you know the transactions done. So this concept of finality, this immediacy to the transaction. Another big one is budgeting purposes. So there’s a very, very big correlation between the use of cash and income levels. So, and there’s lots of interesting studies about this. 

But cash basically slows down spending. And for people who are already on low incomes, this is important. So it’s in terms of… many people will cite it as an important budgeting tool. They know how much they have, they’re not getting into debt. And actually, one of the things that visa will actively market to businesses is that people will spend more with digital money, so they can spend up to 25% more actually, often. So in terms of going to that point about acceleration in economic systems, you spend more digital money systems on digital systems in general. So in terms of the overarching capitalism possible, more profit accumulation, digital systems were just far more ideologically aligned. 

But there’s also a lot of… there are some people, like libertarians, who like the privacy aspect of cash, right. So this idea that you don’t need to watch what I’m doing. But as you know, many people like that. I’m in Germany right now, and Germany has a big historical tradition of valuing privacy. Especially in the context of the Stasi, lacks surveillance by states and sort of valuing financial privacy. So that’s one aspect, but also distrust of institutions. You’ll find very high cash usage in places where institutions are distrusted. So by contrast, in places where institutions are very highly trusted, you will find quite high digital payments. 

So for example, in Sweden and Norway and places where basically everyone finds it massively surprising that you might distrust the banking sector or the state, this is where they sort of find it feel that it’s somehow obvious that you should want to transition and have been absorbed into large institutions. And you’ll see this in the States probably politically, I haven’t done any sort of detailed ethnographic research. But if I was guessing, I’m going to say, kind of like your urban yuppies are going to find digital payment systems, un-problematic because they’re sort of steeped in this institutional mentality. 

You get easy access to credit, you’re basically viewed as a high status member of society. Whereas if you’re not in that demographic, you’re probably much more likely to use cash. And I’m imagining this goes from like your libertarian rancher doing farming through to your kind of ethnic minorities who don’t trust the banking sector who don’t feel that Bank of America represents them. So there’s lots of…

Scott Ferguson: Or they can’t afford the fee. 

Brett Scott: Yeah, there’s also a bunch of these sort of more immediately practical things like the fact that some people can’t get these accounts or actually, they will get them on detrimental terms. But I think that’s fairly well known in some ways. But so in some ways, I push this idea about the sort of cultural dimensions more because it’s less thought about. In much of the debate around cash, you’ll find this idea that, at least in the mainstream, that if only people could get access to the digital systems, they would obviously want to transition to that. But they face barriers, and that’s the only reason why they don’t. Whereas I feel it’s important to push out this idea that actually within many parts of society, there’s an inherent distrust of formal banking institutions and so on. 

And this is actually one of the things that’s going on underneath the surface if you think about gentrification. This is one of the things you immediately noticed with gentrification is gentrified places automatically are the ones that are most prone to being quote unquote “cashless”. AKA being dependent upon using very large corporations for their payments. So yeah, there’s lots of the sort of cultural dimension. I could go into this further, but you know there’s… does that resonate? Does that make sense?

William Saas: Totally. 

Scott Ferguson: Yeah. Resonates.

William Saas: Yeah. And in what you’re describing with the certification, sounds like it’s probably very similar in most countries.

Brett Scott: I was on NPR Wisconsin a few days ago and it was quite interesting taking calls from listeners who called in and they said a lot of the stuff. The idea that the tangibility is important to me, the budgeting. Also fears about the system going down in length. This is one thing that’s seen in the States is quite important for weather events. This is you know, this is kind of the sort of black swan events. But a lot of people intuitively have this realization that offline forms of money are more resilient. And this is why this metaphor, which is a different metaphor now because the cash is the public bicycle system of payments, actually is very effective. 

Because often what people are told when they’re being shamed for using cash is they’re told you’re using the horsecart of payments, you’re using this old stupid form, what’s wrong with it? Where as soon as you switch to this bicycle metaphor, suddenly it’s like, oh, this makes sense. Actually, bicycles are actually a pretty advanced form of transport, even though they’re technologically simpler than, say, the Uber system. And digital payments are very much like the Uber of payments. And I think this is like a great way to get people to think about this. There’s reasons why we value simple system operators because they just work.

William Saas: Do they have public bicycle systems in Wisconsin? I don’t think we have any down here in Louisiana.

Brett Scott: I don’t know. I mean.

William Saas: Sounds great.

Scott Ferguson: We have lots of privatized bikes…

William Saas: Yes, you can rent them. But you have to use a card usually.

Brett Scott:  Yeah. But also what’s interesting about the cash system for me is politically, it actually appeals to a whole bunch of different players. So if you zoom out and look at the current state of global capitalism, there’s actually a sort of weirdly anti-capitalist element to the cash system. And what I mean by that is in an earlier phase of capitalist systems, cash would have been at the leading edge. It would have been the thing being used to expand market systems.

Scott Ferguson: This is why Marxists say they formulate their critique in terms of the Cash Nexus. The cash Nexus is like the cradle of evil.

Brett Scott: Imagine an early pre-capitalist society, and then there’s some kind of sovereigns trying to sort of move in. One of the first frontiers is going to be the issuance of these units of cash. That slowly infiltrate the communities and break down their local networks and integrate them into a larger economy. So it’s one point in time relation, yeah, the cash system would have been this on the frontiers of capitalism. But in the current phase, it’s this thing that slows it down. So in a weird way, it’s become this break upon the system. And in this context, it has a sort of anti-capitalist element, especially because it actually enables all the many sort of marginalized people in the system to participate without getting watched by the main institutions of capitalism.

 So this is what’s called the black economy or whatever, the sort of the margins of the economy. So that’s one. So it has this kind of anti-capitalist part to it, but also from a centrist perspective, you speak to these various sort of like policy wonk types, they realize that the stability of the monetary system kind of depends upon people having access to government money. So this is a very center political argument. And then also on the right, you’ll find all this sort of nationalist type stuff, where it’s like, I want my national money, and I don’t want to, screw the banks, and give me the actual dollar and so on. And it’s quite fascinating from a political spectrum perspective, seeing who resonates.

William Saas: One of the things that I like, and I think it might be the final paragraph or so of your book, you sort of insist on and defend and advocate for cash precisely because it is dirty and inefficient. And you want to maintain the right to that sort of thing. And I love this idea of cash as anti-capitalist. Part of our project is at Money on the Left and Money on the Left Editorial Collective is to sort of recover democratic public potentials of money. And so I guess I want to say that one of the interesting things about reading your book and engaging with your work, is that it seems like you’re into that, too. 

But you’re also– correct me if you think that I’m wrong– like somebody could read Cloud Money and think that you’re sort of after a post money world, you’re partisan for cash, you’re defending it. That’s not necessarily saying money itself is good and could be used and mobilized in an affirmative ways. 

Scott Ferguson:  And just to clarify, we’re not saying money is good. 

William Saas: Oh, yeah. 

Scott Ferguson: Or that the system now is good. But we’re saying that it is certainly not just flatly evil. And that it is a powerful and capacious medium for collective transformation and democratization. 

Brett Scott: Bear in mind, I don’t have a sanctimonious take on monetary systems like many monetary… they’re are parts of the sort of monetary reform community who had this almost visceral sort of puritanical disgust about money and so on. I don’t have this at all. I see the world in contradictions. I understand that we’re stuck in systems that often we don’t quite know how we’ve ended up in these systems. And there’s trade-offs built into these systems. So for example, in large scale monetary systems, one of your trade offs is that you’ve increased the scale of your economy, and thereby actually gives you access to more and more stuff, but simultaneously increases your alienation, your distance from each person. And you can even imagine, the opposite of this is extremely small scale economies, where you might not even have monetary systems where you have very low amounts of stuff, because you’ve got very low labor pools we’ve connected together. But you have a very, very strong idea of who you are and where you are in the economy. If you picture your sort of quintessential hunter-gatherer type of setting you’re under no illusion as to what your position in that economy is and how you survive. Whereas of course, if you go to an extremely large scale economy, held together by large scale monetary systems, you’re in this much more sort of alienated state, and yet, you have access potentially, to incredibly high end things because you’re tapping into gigantic pools of global labor that you can’t see. 

And this is a sort of contradiction we find ourselves in modern economies. And so I’m not really trying to say that we could live without the monetary system at all. But you know, kind of going back to the nervous system metaphor, there’s a part that didn’t actually make it into the book. That was extending the metaphor. Actually, it did make it in a little bit of a conclusion. But what am I arguing in terms of the cash system and the nervous system metaphor, as I say, in the human body, the nervous system is split into a central nervous system, and the peripheral nervous system. The central nervous system is a realm of like the brain and like the spinal cord,  it’s a very conscious part of you. Whereas the peripheral is a sort of well, as the name says, is peripheral, right. 

And I’m kind of arguing that if we’re taking this metaphor, seriously, the financial sector, and all these kind of digital systems that are connected into it, are part of the sort of central system whereas the cash system can be understood as a the peripheral nervous system, is the movement of this money depends on the sort of person to person contact. Now, I don’t have to go deeply into that metaphor, but the basic idea is that if you’re interested in creating a balanced monetary system, you’ve got to think about how all these different parts intersect. 

And if you think about alternative forms of money, like the mutual credit system that you’re mentioning, the sort of rippling credit systems or local currencies, you can almost imagine those as kind of an…I don’t want to go like too deeply into this nervous system metaphor, but part of the autonomous nervous system is kind of like semi autonomous things that like act by themselves, and I kind of like only partially integrated into the central system. And so I’m interested in future… to think about, okay how do you know, because what we call the “cashless society” would essentially be a type of system where you’re completely always plugged into the central system. 

You’re always going by the banking sector, and the sort of big tech companies. And the cash system actually is maintaining this kind of lack the ability to stay out of that central system whilst remaining within the overarching economy. And that’s what’s kind of the political dynamic of it. But then in terms of the actual political message of the book, the main message is to protect the cash system. But there is a part of me that’s maybe this is for a different book, which is arguing for people to build different systems entirely the sort of like alternatives, and you know, I can go into those if you’d like me to.

Scott Ferguson: Well, maybe we’ll have you on again to talk about that future book. But I think we would be doing a disservice to this book if we didn’t ask you to talk about cryptocurrency. But so what’s your… Yes, crypto tokens, not currency. What’s your experience with crypto tokens? What’s your assessment of crypto tokens? And also, what are your thoughts about the recent cascading crashes in those crypto markets?

Brett Scott: Yeah, I mean, crypto, I could say so many things about crypto. Well, the first thing I’ll say is that actually I was involved in early, early Bitcoin back 2011, 2012, 2013, 2014, which was quite a different time in the modern world where it was far more innocent in a sense. It hadn’t turned into a giant, grotesque, speculative marketing/grifter scene. It was an interesting moment to be in it. I kind of got involved in that, because I was… I’d written this other book, the other The Heretic’s Guide to Global Finance that was coming out back in 2013. But I was interested in general in people’s attempts at building alternative forms of economy. And obviously, crypto was one of these attempts. So my inner anthropologist was really fascinated by this, and as you know, doesn’t have any potential. But what became very, very apparent to me, and that’s the crypto world or the Bitcoin world in particular, was that you had this sort of political problem, which was that the actual underlying technological architecture was quite radical. 

The core technological feat is basically that it enables large networks of people who don’t know each other to coordinate action between themselves without a central player. Now, that politically is interesting. And actually, a lot of groups can agree that that’s interesting. And, in particular, it was about these people being able to issue tokens, or at least for the system to issue tokens. And then for them to be able to move those tokens between themselves. And this is where all the problems started to emerge, because that was a sophisticated technological architecture, but a very, very crude token system implemented on it. But many people who had no training in any kind of like monetary stuff, visually the token sort of like superficially resembled monetary system. 

And actually, in many ways the imagination that Bitcoin is a monetary system was created through linguistic hacks and visual hacks. So the very term cryptocurrency was the first one of those, but the fact people just started calling it crypto currency. And journalists would report on it as if it was this currency. And then all the visual imagery that was pasted over it as being a monetary system, and many people just sort of took it for granted. They’re like “well, this is a new monetary system”. And what was particularly interesting with it, when it started getting $1 price, the thought of getting price, this in a way kind of just confirmed for people somehow that this was a monetary system, which is very, very fascinating. Because many things that have prices, people don’t perceive as money. 

So it’s not like if I have a ceramic vase, and it gets a price on the market, I don’t fully think about it as a monetary system. But if I take that ceramic vase and I paint monetary imagery all over it, and make it very small and sort of like a disc shaped, suddenly you can be like, “well, it’s money, isn’t it?” And this is actually sort of psychologically literally what was happening in the Bitcoin world, you had these digital objects, which were kind of pasted with this monetary branding and which had a price, and which then superficially, kind of started to resemble a monetary system. And since then, I started writing this about how crypto counter trade works. I don’t know if you guys have sort of seen me doing that. 

But it’s basically saying, well, what’s happening in the crypto markets is you basically have these digital objects that are created, that are then traded on speculative markets, and which get a price on those markets. And once I have a price, you can then swap them with other things that are prices. Which is essentially a way of clearing that sort of money priced things against each other which is counter trade. Now, if I did that with two objects that obviously weren’t money… so for example, if I took a $500 vase and I swapped it for a $500 guitar, nobody would say to me, “oh, the vase is a monetary system”. 

What they would say is you’ve swapped something that’s worth $500 for something else that’s worth $500, implicitly, what you’ve done is you’ve sold the vase to the person who has the guitar, and then you’ve given them the money back to buy the guitar from them. So you’ve had these separate monetary transactions that have been superimposed over each other, giving rise to the barter-like scenario. Okay. I don’t know how clear that is. But that’s concentrated and the whole Bitcoin world works like that. And I know this, because I used to do. I used to buy, quote, unquote, “buy things” with Bitcoin. And this is exactly what you do. You take its current dollar price, compare it to the price of the thing you’re trying to, quote unquote, “buy”, and then you would work out the ratio from that. And this is countertrade. 

And I think this is really, really fascinating actually, because what the Bitcoin system effectively is, is a type of parasite. It’s a kind of monetary parasite. And if we, you might want to think about the US dollar system as being like a host, in a sense. It can’t actually survive unless it has this pricing. The ones that have it, it’s able to sort of do the sort of money-like kind of thing within that system. And I actually think that’s an incredibly interesting design and in a way, that’s not even a critique. I’m sort of saying, well, kudos in a sense. You’ve designed a monetary parasite. That’s very interesting.

Scott Ferguson: But you can expand this out and say, from an MMT framework, at least, there are degrees of moneyness that exist in all kinds of credit systems. So we often will refer to airline miles, which have different degrees of receive ability and liquidity. So, to a certain extent, you can kind of de-exotisize size, if that’s even a word. De-exotisize crypto, it’s just sort of another, dependent system that depends on this larger system. And then it becomes a question of, but how does this system work? What are its values? What are its social and ecological consequences?

Brett Scott: In my newsletter, I do a lot of analysis of these different types of… if I’m looking at a voucher, for example, let’s say. Airline miles kind of have a sort of voucher-like vibe because they’re redeemable back for a particular thing. So let’s say I have a voucher for a store for a particular thing. Like, I don’t know, a Starbucks voucher or something. In a sense, it’s tethered into the actual monetary system, right? It’s like you and you kind of like it has an issuer, it has a redemption process. You know what you’re gonna get if you hand the voucher back, so it’s very easy to kind of integrate that, and it’s quite easy to describe how it works. 

Scott Ferguson: And the production system, I think as well. It’s tethered into the production system of coffee and of airline vouchers. 

Brett Scott: Vouchers are a credit system. There’s an issuer, there’s a redemption process, and particularly, maybe be able to transfer them. So all credit type systems or IOU type systems have this sort of three part process as an issuance process, some of the issues and out as a kind of promise, then they might be able to be transferred depending on what the nature is, and then they’re redeemed back for the thing that they can supposedly can get. Vouchers are like that. Bitcoin is nothing like that. There’s no ability to redeem Bitcoin. It doesn’t actually even have an issuer. 

If you look at how it’s structured, what happens is you could sort of argue that the miners and the system are kind of like issuers. But they’re issuing it to themselves, they’re not issuing it as a liability. So what happens, they basically exert energy and then write out a number as an asset for themselves. So they’re basically… it’s literally numbers written out off the exertion of energy, which then are then branded in a particular way. But they’re written out as assets to the person who is successful at maintaining the system. And then it has no redeemability. There is no liability side to a Bitcoin token, it’s just this object. But it superficially has the visual appearance of what you would see in a bank account because it has this number. 

So it kind of looks like a bank account, sort of, but it has no actual liability structure. So this is what’s quite interesting. So really, what it ends up being is it’s kind of like branded collectible. With the monetary price which you can swap for things and that does actually have a certain degree of moneyness in the sense of it’s highly swappable. So it’s actually quite like liquid in the way it moves around in a sense. So this is why Bitcoiners get very angry with me when I say it’s not a monetary system. And I don’t have any problem with that. I’m just like, well, it’s not used for pricing. And it very, very clearly… one of the easiest ways to sort of see this like… El Salvador is currently being used as an example of a place where Bitcoin is used.

 But if you go into an El Salvadorian restaurant right now, I would love to see an El Salvadorian restaurant where they put up a fixed menu on the wall with fixed prices in Bitcoin for things. They won’t do this because actually the stuff there is priced in US dollars to work out the quote unquote “Bitcoin price”, they’re always gonna have to constantly check what the US dollar price of Bitcoin is, and then work out a countertrade ratio. So actually, if you go to eat a meal in this restaurant, the price of a meal, you’ll quote unquote, “Bitcoin price” of this meal will change constantly. Because the actual price is in US dollars and it’s constantly being refracted through Bitcoin. That’s a kind of complicated way of saying it. This is a very good example of… clearly the US dollar system is being used here. But you’re kind of disguising it via Bitcoin transaction.

Scott Ferguson: We actually have an episode of one of our other podcasts coming out that’s going to come out before this interview, actually, where we’re interviewing a professor and journalist named Ricardo Valencia, and he is reporting on this Bitcoin situation in El Salvador. And there are protests against this. The president of El Salvador is becoming increasingly authoritarian and wedding his authoritarian politics to this Bitcoin adoption. Bitcoin is not being adopted well in the country. They’re trying all kinds of things, like offering discounts to make it receivable, and people don’t use it. People don’t want it.

Brett Scott: I mean, he’s obviously heavily invested. And actually, it’s quite interesting. I mean, he’s an interesting character, because he’s clearly working the US libertarian scene to get forms of financing and funding, but, probably is doing it with a sort of… probably my intuition was well, we got nothing to lose, we might as well just try and work this angle. I think, in a sense, him aside, the Bitcoin community has quite a lot to lose from backing him. 

And I think a lot of them sort of threw themselves into this kind of euphoria, it was like, “ah, it’s become a legal tender, it’s now the official money” and ignoring all these… not only the protests, but also the fact that in reality, it’s the US dollar that is being the actual… it’s happening since this countertrade process. But now it’s becoming politically difficult to the Bitcoin community, because the whole sort of rhetoric has always been around this like stateless money and this whole kind of thing. So the reality of backing this increasingly authoritarian leader is an interesting one.

Scott Ferguson: So do you have a read of the most recent failures in the crypto markets?

Brett Scott: Not really. Actually, I’ve kind of got bored about following all the specifics of it. A lot of my focus has been on critiquing the ideology of Bitcoin, because… and so the broader crypto scene is going out, a lot of people are being involved, and I know lots of people in it, but the actual sort of downturns I don’t follow. I used to work in financial markets. The way I often see these crypto tokens is  in typical financial markets, you can do fundamental analysis, and you can do technical analysis. Fundamental analysis, you’re looking at the reality of something or trying to look at the reality of something and saying, “well, this is, this company is overvalued, for XYZ reason, they haven’t actually built the factory that they said they were going to build, nobody’s gonna buy their products”. 

So you actually make these little arguments, but it’s actual prospects in the world. And then work out from the projected income streams, and you can sort of work out a theoretical price for a share. That’s a fundamental analysis. And then there’s technical analysis, which is like you watch what other people do, basically. Abstracted through graphs. But basically, technical analysis is just watching what other people in the market are doing. Now, whereas in the crypto world, often the only thing you can do is technical analysis. There’s no way to do fundamental analysis of these objects because they’re not redeemable for any particular thing. 

They’re not legal claims upon anything. There’s no way to work out if they’re overvalued or undervalued. They’re just floating objects, which makes them highly prone to these breakdowns. So I’m never surprised when there’s like a massive spike in the price or crash in the price either. Precisely because they’re untethered to slack. But in terms of the stable coins that were breaking down recently, I suppose that’s a slightly different situation. But like yeah, I didn’t… What’s your take?

Scott Ferguson: I don’t have one. I appreciate your blase attitude. I think you you have your eye on the structural, larger anthropological, political, ideological, 

Brett Scott: Gets boring.

Scott Ferguson: Yeah, rather than following the roller coaster ride and pretending that that’s actually…

Brett Scott: I think what’s probably the best way to analyze it is probably through religious studies. Or like, yeah, a lot of what’s happening in the crypto markets is you have these… And I think there’s interesting sociological ways of analyzing it that are far more interesting than trying to have some economic analysis of why the price has gone up or down. There’s many, many people who feel sort of forms of existential despair in the world who have come to believe that somehow the crypto thing represents some way to escape that and then engage in this fantasy where you can make returns whilst also bringing down the system somehow. So no, actually I empathize with that to some extent. 

There’s part of me that has a certain degree of empathy for people who are caught up in it. Because I have a lot of friends who are caught up in it and they can see this as hope where you can engage in political activism through speculation.

Scott Ferguson: And there’s also a lot of pain and suffering. There are suicides. There are people losing a lot of state money. 

Brett Scott: Yeah, and the main concern in the crypto world because… look, bear in mind that speculation has been going on for a very long time of the capitalist system, this has nothing particularly new. And so I could do a critique of speculation. But I’m not that interested in doing that. Other people can critique the mentality of speculation, it’s well established as a phenomenon within capitalist societies as people trying to get rich quick and escape their situations and so on, whatever. My main concern is that in the process of marketing the speculative objects, a particular narrative about money is projected into society. So the Bitcoin community, those objects… the Bitcoin tokens are not actually a monetary system. 

They’re this collectible, almost like digital medallions branded as money with a monetary price. But in order to get them to compete upon a market against other assets, like shares, or whatever else you could potentially buy with your disposable income, the proponents of it have to market it as a competing monetary system. So its marketing pitch is that some are competing against the dollar. And in order to market that story, they have to create this conservative story about money where they sort of say, money should be this constrained thing, this commodity that’s held taut and rigid. And so it has a sort of weird, puritanical, hard money ideology that goes along with it, which is very heavily associated with libertarian ideology. 

Which is all about engaging in the fantasy that markets exist independently of states. Which requires this fantasy of apolitical money. But you have to have this… the monetary system is somehow natural. And markets are natural, and the states a parasite upon the market, rather than the thing that actually underpins the market with monetary systems. So a lot of the sort of fantasies in the crypto world are about projecting this conservative notion of money, which my concern is that the debt then becomes a big… that’s become the foundation or mandatory training for young people right now. 

Interestingly, the MMT movement is one of the counter narratives in terms of like trying to create a different narrative around money, but there’s lots of 16 year olds right now who basically sitting on crypto forums because they believe it’s technologically exciting, and so on, who sort of imbibing like Murray Rothbard, and stuff like that. You know, if you think about if you’re a conservative strategist from the 19th century, you will like be like, “wow, this is like a really amazing way of projecting ideas into society without actually having the monetary system disrupted”. So it really empowers the Conservatives within the ordinary monetary system. So that’s my concern. Long answer, sorry. 

William Saas: No, that’s perfect. I love the fundamental versus technical analysis. And I think that that’s… it’s almost like if you have the fundamental mental analysis that I think we all share here, then it sort of makes the technical analysis irrelevant. It’s like okay, this is just going to be a carnival. It’s something to watch. And people are gonna suffer. But they have… there are contending fundamental analyses that do kind of seem to… I don’t know, I guess you can be suspicious here and wonder how many people are actually invested in the fundamental analysis that would enable them to think cryptocurrency is actually a viable alternative to existing monetary systems. What’s your read on how many people are actually sort of wedded to that now versus at the sort of speculation side if we’re not going to speculate about speculation.

Brett Scott: Well, I think it’s contradictory because… actually I actually wrote this piece for CoinDesk, which is one of the big crypto publications, possibly the biggest one, actually. And that CoinDesk actually has… there’s a couple of editors there who actually are quite reasonable, critical and want more critical voices. And I did this piece was just called How to Win a Bitcoin Street Fight. And it was based on the old arcade game Street Fighter. And I basically talked about walking into an arcade, an old arcade game. There’s on the one side, you got Street Fighter on the other side, you have Mortal Kombat now to old school like fighting games, and each one has its own universe. Each one has its own like characters in it. All right, so you know, Street Fighter has… I forget the names of the different people. 

William Saas: Ken, Ryu, Blanka. 

Brett Scott: Yeah, exactly right. And then you know, more you can do Mortal Kombat, Mortal Kombat got Raiden and all these other characters. But once you pick a game you can’t use a player from one of them in the other game. So they were sort of sitting in separate paradigms, and they’re in their own universes. And I think in the Bitcoin world, you find this a lot of the argumentation is based on this sort of trickery, paradigm switching trickery. Because on the one hand, it’s marketed as being that who it’s competing against is the dollar. So this is like the monetary story. So this is like one arcade game, right? That it’s like somebody’s competing monetary system. On the other hand, it’s marketed as an asset within a monetary system that has a monetary price that you could trade to get more money. And in that sense, it’s actually competing against things like the Gamestop shares, or the world or whatever else. Because if I’m spending my $5,000 in savings on Bitcoin, I’m not spending it on Gamestop shit, right? So they’re in a sense competing each other. 

But what happens in the crypto world is that they often try to blend those two arguments together. They’ll say things like, “well, when the price of the asset is rising, it’s a symbol that in the future, it will sort of invert and become the monetary system”. Which is… I’m like, how did you work that out when other things rise in markets, that doesn’t mean that becomes a monetary system. So there’s lots of this sort of justification. And because the actual object being traded has monetary imagery branded over it, it’s quite easy to actually sit with that cognitive dissonance. And many people in the world constantly sit in the state of cognitive dissonance, where they have a sort of almost millenarian story that at some point, it will invert, and everything will become priced in it. 

But in the meantime, we’re trading it for US dollars, and clearly perceiving it in terms of US dollars. And when I say this will happen, you’ll meet some of the hardcore Bitcoiners will be set will say stuff like, “well, I price everything in Bitcoin”. And I’ll be like, well, it’s interesting, because those prices will be constantly fluctuating, right? And what often will say to them is if I’m sitting by a tornado, and there’s like things flying around the tornado, you know, whatever it is… people’s bits of debris, I can psychologically choose to believe that actually, the tornado is flying around the pieces of debris. 

I could imagine the pieces of debris being like fixed points and then perceiving the tornado flying around. But that’s like a mental illusion. You can choose to believe that everything is priced in Bitcoin, but it’s a total mental illusion, right? It’s actually priced in the dollar. And if you’re just choosing to try and see it in this way. And this is a lot of what’s going on in that community. Just another metaphor there.

Scott Ferguson: Well, I think that’s a really… let’s finish this conversation on that mind whittling metaphor. Where do our listeners find you? Where Where should they look for you?

Brett Scott: Well, my newsletter is Altered States of Monetary Consciousness. My book is Cloud Money: Cash, Cards, Crypto, and the War for our Wallets. And my Twitter handle is @SuitPossum: S-U-I-T P-O-S-S-U-M. I always get asked how that one came about.

Scott Ferguson: Are you gonna tell us?

Brett Scott: It’s kind of a weird story. I had a musical act, Apocalyptic Possum and then from that a nickname developed called Soul Possum for me. And then when I went to work in the financial sector, I had this girlfriend at the time who said, “now you’re super awesome”. So that’s how it developed but when people see it nowadays, I have no idea what it is. It’s just weird…

Scott Ferguson: Right. That’s great. Well, now all the Money on the Left listeners who have made it to the end of this interview are all cued in. Well, thanks.

Brett Scott: Thanks a lot. Nice chat.

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

Money on the Left: History, Theory, Practice

In this special episode, Billy Saas, Maxximilian Seijo and Scott Ferguson announce the launch of the collective’s new scholarly journal: Money on the Left: History, Theory, Practice.

Click here for the journal’s inaugural publication, “Food, Money, and Democracy: Cultivating Collective Provisioning for Resilient and Equitable Communities of Work,” co-authored by Benjamin C. Wilson, Taylor Reid, and Max Sussman.

As Billy, Maxx and Scott explain in their conversation, Money on the Left: History, Theory, Practice is a peer-reviewed, open access journal of scholarship in the humanities, arts, and social sciences. The journal places money’s public origins and capacities at the center of left inquiry and action. It cultivates interdisciplinary approaches to past and present, aesthetics and politics. And it advances intersectional forms of research and practice in service of a just transition from social and ecological devastation. During their dialog, Billy, Maxx and Scott discuss the journal’s key aims and publication schedule, while offering advice for prospective authors. 

Visit our Patreon page here:

Music by Nahneen Kula:

If you are interested in submitting or pitching an essay to the journal, see our Instructions for Authors page.

Monetary Modernism

In this special episode of Money on the Left, the MotL Collective shares an audio recording from a conference panel titled, “Monetary Modernism.” Including papers by Scott Ferguson (University of South Florida), Rob Hawkes (Teesside University), and Maxximilian Seijo (University of California, Santa Barbara), the panel was presented at the Hopeful Modernisms conference organized by the British Association for Modernist Studies (BAMS) at University of Bristol, June 22 – 25, 2022. 

The conference sought to revive hopeful and more generative impulses in modernist art and literature, challenging a persistent view of modernism as relentlessly bleak and angst-ridden. It did so, moreover, for a present moment similarly burdened by dead-end accelerationist and pessimist imaginaries. 

The panel begins with Rob Hawkes. He introduces the BAMS audience to the wide-ranging contributions of the Money on the Left Editorial Collective. He also makes the case for reading Georg Friedrich Knapp’s early twentieth-century chartalist approach to money as a modernist project deeply entwined with myriad other aesthetic modernisms. 

In the first presentation, Scott Ferguson explores how Len Lye’s Rainbow Dance (1936), a short experimental promotional film for British public postal banking, embraces the abstractness, publicness, and heterogeneous plentitude of both money mediation and avant-garde cinema. In the second talk, Rob Hawkes uncovers how tensions between fixed and fluid understandings of identity formation and history inform John Maynard Keynes’ chartalist-inspired writings on money as much as Nella Larsen’s 1929 novella Passing and Ford Madox Ford’s 1933 novel The Rash Act. Lastly, Maximilian Seijo’s presentation carefully works through metaphors for money in Virginia Woolf’s book-length feminist essay, A Room of One’s Own (1929), complicating the text’s appeals to monetary substances and fluids by teasing out its experimental approach to imagining non-patriarchal infrastructures for provisioning aesthetic work. 
If you are interested in the texts and images that accompany some of the presentations, see here for Rob Hawkes’ slides and here for Scott Ferguson’s PowerPoint deck.

Visit our Patreon page here:

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

Money on the Left: The Journal featuring “Food, Money & Democracy”

Benjamin C. Wilson, Taylor Reid, and Max Sussman join the podcast to discuss their forthcoming co-written essay, “Food, Money, and Democracy: Cultivating Collective Provisioning for Resilient and Equitable Communities of Work.” Inaugurating our new journal, Money on the Left: History, Theory, Practice, the article politicizes what Sanjukta Paul and Nathan Tankus term “coordination rights” across monetary and production sectors and focuses on the coordination of food systems, in particular. Coordination rights are fundamental to the process of building resilient communities, our guests argue, determining whether social provisioning systems are “collective” or “concentrated.”

In our conversation, Wilson, Reid, and Sussman consider several promising cases of collective provisioning, which prioritize democratic participation and ecosocial stewardship over the austerity and profit-maximization associated with concentrated industry. Such examples include La Via Campesina movement for Food Sovereignty, the Black Cooperative Movement in the U.S., and restaurant reactions to the early days of the COVID-19 pandemic. Lamenting the failures of such models when faced with systemic illiquidity, our co-authors also importantly extend collective coordination principles to monetary systems, exploring small and medium-scale monetary experiments that use food systems as a way to build community capacity.

Visit our Patreon page here:

Music by Nahneen Kula:


The following was transcribed by Mercedes Ohlen and has been lightly edited for clarity.

William Saas: Max, Ben, and Taylor, welcome to Money on the Left

Max Sussman: Thank you. 

Ben Wilson: Great to be here. 

William Saas: We’ve invited you all on the show this month for a very special reason. You three have collaborated on the very first– the inaugural– peer reviewed article to be published in Money on the Left, the journal, and the title of that article is “Food, Money and Democracy: Cultivating Collective Provisioning for Resilient and Equitable Communities of Work”. So first of all, thank you all so much for this really great article. And congrats! This was an anonymous peer review process. There’s probably nothing wrong with saying that the anonymous reviewers were very impressed with the piece and I think the editorial team was as well. 

We can’t wait for listeners to read your piece. While we don’t want to spoil it exactly, we do want to give a sense of what’s coming. And I don’t know if there are– and maybe listeners or anyone else on the call can correct me– existing journals that do this sort of thing. So we’re experimenting, and we’re glad that you’re experimenting with us. But to kick things off, would each of you mind telling us just a bit about yourselves; your professional and personal backgrounds in ways that may be relevant to the stuff that we’re discussing via your article? 

Ben Wilson: Oh, maybe I’ll go first. 

William Saas: We know you. Then you’re the easy one. You’ve been on twice, right?

Ben Wilson: So yeah, this is my second appearance on Money on the Left. So I’m really excited about that. I am an economics professor. Currently at SUNY Cortland in the Finger Lakes region of New York State. I study food systems and monetary systems and I’m always looking for ways that I can teach students doing– creating learning by doing opportunities supplied and service learning and things of this nature. 

This paper is kind of the confluence of all the things that I really enjoy– about the academy, about teaching, about learning, and about trying to make the world a better place through public provisioning and education, etc. So maybe I’ll pass it on to Max next.

Max Sussman: Well, let’s see where to start. I’ve been a chef my whole life. And that is primarily what I’m doing here. I started cooking when I was in college, I was studying American Studies at the University of Michigan. And I got into cooking, because I really enjoyed it and as a job in college to make some money, and I basically just never really stopped. I worked in Ann Arbor, Michigan for a good seven years or so and then moved to New York and cooked there. I’ve always been interested in food and everything that goes into it. 

When you’re a chef, you pay attention to where your ingredients are coming from and you pay attention to the farms that grew them, the seas that produce the fish that you’re eating, and the people that grow the food– I should say, not all chefs do that, but they probably should. These things were always super important to me. As I started to kind of go further in the career, I ended up working with a group of like minded chefs in New York, and helped found a group called FIG, which stands for “food issues group”. Catchy name. 

And we formed this group as a sort of education and action group for chefs and restaurant professionals who were interested in some of these social justice issues, environmental issues, workers rights issues that aren’t commonly considered part of the food media landscape. That was a big part of what I’ve done and then I moved back to Michigan just before the pandemic. Then I left being in a day to day restaurant environment. 

I started basically working for myself in that environment. I made pizza as a pizza pop up, took my pizza operation, my mobile pizza operation around to different bars and coffee shops in Ann Arbor. And I’m also currently working as a private chef for a family. I also own a fast casual restaurant with my brother in New York City where he is the managing partner. So he’s there on a day to day basis and I’m still a partner. So there’s kind of a lot of– that’s kind of a little flash background of my professional career. I think it was probably two years ago, I don’t know exactly the date, but it was around two years ago, where I actually heard Ben on Money on the Left talking about the Uni proposal. 

And as well as talking about food systems and food justice, and how to tie all these issues together. And I just kind of stumbled upon MMT in that moment and heard the podcast and I reached out and we started the conversation that kind of led to– I think led to us all being here today. So roundabout answer to that question. Told us not to be brief. So there you go.

William Saas: Don’t be afraid. Yeah. Also your mic sounds amazing. What are you rolling with there?

Max Sussman: It’s an Audio Technica mic. I’ll send you the link after if you want. I’m glad I got it in the right spot, too. So that’s good.

Taylor Reid: Hey, I’m Taylor Reid. I’m an associate professor of Applied Food Studies at the Culinary Institute of America. And I always have to tell people that even though I work at the Culinary Institute of America, I am not a chef. I teach farming and food systems, farm to table. I teach a lot about the connections between the restaurant and the rest of the world. I teach topics like climate change, food waste, and my research interests I think, my background are pretty eclectic. I’ve studied beginning farmers and organic farming standards. I’ve also done some work on farming and foraging and food insecurity in the zombie genre. More recently, I’ve been pretty interested, since coming to the Culinary Institute four years ago, I’ve been really interested in thinking about what chefs do and why they do the things that they do. 

And we can talk about this in a little bit, one of my initial interests that we were originally going to study was chef’s motivations for including foraged foods on their menus. I’m really interested in foraging. I love that there’s this new kind of resurgence of interest in foraging. I think that there are a lot of interesting economic questions around that too. Because while it’s simultaneously this free re-democratization of the food procurement process it also, within the restaurant world can have an element of elitism and tends to be the purview of some of the higher end restaurants that you might pay $400 a plate to eat at. 

So I’m still really interested in that question. But we kind of drifted toward COVID. Because I guess when we first got together, we were going to ask that question and then this pandemic hit and it just didn’t seem appropriate anymore. It seemed there was another much bigger question that was a lot more pressing because not only was the pandemic the dominant piece of the news cycle at that time, but we were all seeing what it was doing to the restaurant industry, and calling up chefs and talking to them about something other than COVID, it just didn’t seem right. It didn’t feel right at the time.

Scott Ferguson: So maybe this is actually a good moment to pivot to our second question, which is, I think some of you have already started to answer, but essentially, how exactly did you all come together? What shape or shapes has this collaboration taken? What do you guys talk about? What do you guys think about together and how are you learning from one another? Just tell us about this kind of process and how it’s unfolded.

Ben Wilson: Taylor and I have known each other for quite a while now. I think I met Taylor early in my family’s relocation to Ithaca. Through our children’s friends and friends’ networks and birthday parties and those sorts of things. I was immediately drawn to Taylor and his work because it dovetails with so many of the questions that I’m asking them politically, economy and you know, the foraging question in particular. So, to give a sense of where the conversation’s going, Taylor just assisted me in the delivery of my Political Economy of the Adirondacks class up at Raquette Lake, where we hiked this peninsula that was originally owned by the Durant family, which is the Intercontinental railroad robber baron family, massive Gilded Age wealth. 

And this property kind of represents this weird space where they were using local materials and labor and work that kind of on the surface might look like an ecological decision, but it was really just this colossal amount of wealth and power that allowed them to mobilize all those resources. But today, now, the property is a teaching resource. It’s a property of SUNY Cortland, it’s a National Historic Site. So on that site, we were trying to transform it from its Gilded Age exploitation origins to this teaching space, where we’re exploring the possible measurements of carbon sequestration on the property, and we’re exploring what types of food are maybe able to be forged or grown on the property based on soil contents, lake, and all the environment around it.

And it was really interesting to see my students wrestle with the eating of a dandelion on the property. Not only the lack of bitterness in their regular diets, but this idea that food isn’t just coming from the kitchen or the grocery store. These other places, and how we define food culturally, was a really interesting thing to watch them wrestle with in real time. So yeah, I think the forging question will be an interesting one as we move forward in terms of anarchy and exploitation, and all these different ways that we might feel to process it. And on the other side, Max introduced himself to me via– I think it was you, Scott, who introduced us over DM or something along those lines through the Twitter verse. And Max, and I started talking and reading an awesome essay that he wrote about third spaces.

Scott Ferguson: And what are the third spaces?

Ben Wilson: Max, do you want to?

Max Sussman: Yes, I definitely– I think I just sent you a DM somewhere and said, “Hey, you have no idea who I am. Would you want to talk about stuff?” 

Scott Ferguson: That’s often how it goes. 

Max Sussman: Yeah. So thanks for not thinking that that was too weird, I guess. 

Scott Ferguson: My pleasure, and thank you.

Max Sussman: But let’s see. So I was thinking a lot about restaurants, having spent probably 20 years of my working life in them a lot and thinking about some of the– what are some of the wonderful things about them and what are some of the things that we could probably stand to improve on them. I think one thing that struck me in the early parts of the pandemic was in a lot of other areas, a lot of the changes that happened in the restaurant world were underway beforehand and then were somewhat accelerated by what happened during the Coronavirus pandemic in the early part. And so, we were thinking about what is the social role that restaurants play in communities? And what are some of the essential– how are restaurants part of the essential fabric of communities and in the way that people use them as gathering spaces?

And the idea of food as being this natural way that people are connected to each other, and to the land, and to big, broader parts of society without even realizing it. And so, in that moment, when restaurants were facing this huge challenge of being cut off from their customer base and separated from the people that support them, at the same time you have people cut off from each other and unable to connect, you know, be near each other physically. And so we were thinking about what is something that a restaurant could be imagined as in the future? Or in that moment, without some of those pre-existing ways of people connecting to restaurants? So you know, how can a restaurant support people in the community without having a dining room? How can customers or people connect to each other without having that space to go to? And that’s some of the ideas we’re playing around with, as this project developed.

Scott Ferguson: And so what is the definition of a third space? Why is it third, rather than second or seventh?

Max Sussman: So there’s the idea that it’s a space outside of work and home, that can serve as a gathering place, and where these spontaneous interactions can occur between people. So the third place could be a restaurant, a cafe, it could be a park. Any sort of community, you know, other community space. But we have, in this day and age, there’s not very many spaces that are totally de-commercialized, where you can just sit and get together with people.

 And so restaurants and especially cafes that are a little bit less of the fine dining type place, it’s a place you go to get food, but you could eat food at home, right? You could always just eat food by yourself somewhere. So I guess the idea behind the third place is that beyond just providing sustenance to people in the form of food that you eat, it also provides a really important social role to communities for people to be able to gather with each other around food.

Scott Ferguson: Beautiful. Taylor, do you want to talk about maybe more specifically how this particular project that became the article that’s forthcoming with the Money on the Left journal came about? How did you pivot from foraging to what you’re up to here?

Taylor Reid: Yeah, yeah. I mean, it really started with Max’s essay. And we originally met to talk about foraging. And then as we were looking at that essay, one of the things that came up for us was that I was at the time, I was just for a class project, I was trying to figure out how to teach online. I had a capstone project class, and I had my students interviewing chefs and restaurant owners about their experience with the pandemic. That’s what seemed appropriate at the time. And we really started to develop this incredible dataset of these in depth interviews. And a lot of the things that Max was talking about in his essay were things that were coming out through this data. 

So I honestly don’t remember how it happened. But it transitioned into the process of all of us going through these interviews and trying to figure out what was there and how it linked with our ideas about the importance of the restaurant industry, and what was lost. When people couldn’t meet that way and we were seeing all of this– people were predicting that emerging from the pandemic, it was just going to be ghost kitchens. What ended up really happening through the process of us looking at this is that it really became apparent that restaurants are really important for other things besides just providing people with delicious food. 

A lot of that came out in the interviews as well as we started looking through the interviews. And then all of this other other stuff started to emerge too, like the way that despite– I mean restaurants pre pandemic, it was clear to everybody in the restaurant industry that restaurants were– there were so many restaurants and they were so competitive in a way that often they’re on the same street in the same building. They’re competing for customers on a daily basis. And there’s a lot of failure in the restaurant industry. And one of the things that we saw from the data is that you would expect, when an industry is hit hard like that, from the classical model of thinking about business competition, that they would become more competitive and cutthroat. But what we saw was exactly the opposite. 

There were at least four specific instances where restaurant owners were intentionally collaborating, sharing recipes, getting together to talk about business strategies, thinking about ways to overcome the challenges of the pandemic, and sharing information, collaborating with growers. Supporting growers and customers too. It just became a much more collaborative and cooperative space, the restaurant industry, at least from what we were seeing in this data than it was before it had this huge shock. And that really led to a lot of Ben’s thinking about cooperative provisioning. Maybe Ben, you can talk a little bit about how the theory developed from those conversations.

Ben Wilson: Sure. I mean reading those long form interviews was really powerful. Because so much of our lives were really kind of following the same pattern. So we were all trying to solve problems, and re-figure out our lives on getting our kids to school, and the dining room, and all these really strange things that occurred and worrying about restaurants and our communities, and what the future was going to look like. But we’re really started to stand out to me, right, because the restaurant, specifically the neoclassical or orthodox economics is kind of always used as this perfect example of the competitive firm. 

It became pretty obvious to me that it doesn’t really work that way. And it always bugged me in neoclassical economics textbooks, when they make the jump from the consumer that is an independent decision making entity, that as long as it’s doing it rationally, and then the aggregation of all those optimal decisions, least optimal outcomes. But if they made this jump to the firm– the firm is this coordinator of resources and that most of the textbooks will use that word, is the coordinator of labor and capital without really talking about what is doing that coordination. And I’ve heard Sanjukta Paul on your guys’ show and delved into her “Antitrust as Allocator of Coordination Rights”, along with the co-authored piece of Nathan Tankus on “The Firm Exemption and the Hierarchy of Finance in the Gig Economy”. 

And I really felt like this was something that was gluing all this stuff together for us that restaurants were seeking to coordinate, but they didn’t really have the rights to do so in ways that other organizations might. And the same sort of pattern, I think, was also emerging in my studies of Black cooperative movements in the United States where they were organizing these collaborative, cooperative structures for both consumption. So they began with large buying practices of grains and dairy and things of this nature to drive down costs and allow them to feed more people that emerged into more finished goods production and things like this that allow for them to coordinate on much larger scales. 

What neoclassical economics does in obscuring this and just defining the firm as a coordinator is that it doesn’t allow us to really think about law and institutions and decision making practices and how we arrive at those sorts of decisions and those practices. And I felt like this pattern is not only part of the firm structure and its problematic nature. But you know, it’s very much plagues the way we talk about money as well. Right? So where does money come from? Who gets to make decisions about when it’s created and for what purposes? Even in Modern Monetary Theory, the use of the terminology, “the monopoly producer”, I think, is problematic and part of this obscuring of the coordination that’s required from money to get where it’s supposed to go. And that was the other really big pattern that we saw in the restaurant data was that, no matter how big the relief package was, it wasn’t designed to help the small independent producer.

And so the restaurant owners kept talking about how they don’t– how they’re not heard, they’re not seen, the government doesn’t understand them. So this fit really nicely into this bigger question that I’ve always been interested in since my time at UMKC and studying Modern Monetary Theory, and the jobs guarantee is maybe coordination rights, when we start to break this down, can really contribute in the way that we understand something like the jobs guarantee in a more tangible way. 

You know, Randy Ray and others have written about social enterprises as being the vehicle for creating the jobs in that space. But what exactly are those jobs? And what’s the connection between the federal government and social enterprise that allows those funds to flow in such a way? I’ve always thought that there’s a gap– there was something missing and the coordination rights kind of create that legal infrastructure for starting to think about the connection between money resources and real resources, and how we define those things and how greatly they would change if credit provisioning was done in order to facilitate coordinated production for collective provisioning rather than the concentrated provision that we talked about in the paper.

William Saas: So let’s roll with that. What possibilities become possible in that context?

Ben Wilson: So I think– Max, do you want to talk about your friend’s restaurant group in Ann Arbor? I think that’s kind of a nice vision to get that conversation started.

Max Sussman: So in Ann Arbor, there’s a very well known and beloved group of restaurants called Zingerman’s. So it’s founded over 25 years ago, started as a small deli. And then they realized that they could– that they wanted to make better bread than they were getting. So they started a bakery, and then they decided they wanted to source better dairy than they could find. So they started a creamery. And then they wanted to open another restaurant, and they started roasting coffee. And now there are multiple businesses that are all supporting each other. They’re all each other’s customers, and they are– they raise the profile of each other and support each other. 

They can get a lot more done as a bigger institution than as any of them could get done as an independent restaurant on their own. And when I say get a lot done, I mean they have purchasing power, so they can support smaller local, more sustainable farms in more significant ways than a small independent restaurant could. They can support initiatives, like providing workers health care more in a greater way than the small independent restaurant could. So it’s a really interesting model for them to have pursued. In addition to all that, they’ve basically expanded horizontally, I guess, and created this self-sustaining network of businesses. So the bakery, it sells bread to the restaurants. 

So now the restaurants don’t buy bread from another bakery, they buy from their own bakery, and they can also participate in conversations about quality control, and sourcing, and all the workers talk to each other as well. So there’s just a lot that can become possible through getting organized in that fashion. That I think is– there’s a lot to look to for them to aspire to certainly from the perspective of restaurant owners, and I think from the perspective of workers as well as the perspective of the producers. 

Taylor Reid: Yeah, well, I was just going to add, this is something that’s come up in our conversations, because I have a background in ecology. And I think in academics in general, we tend to emphasize competition over cooperation. And there was a study that came out a few years ago looking at the number of papers in ecology that are emphasizing competitive relationships over cooperative relationships and it’s astounding the difference. But in nature, cooperative relationships are actually more important. 

The more diverse an ecosystem is, the more total productivity there is because its cooperation and actually is the dominant mode of interaction. And I think that we see the same thing in economics, we see the same thing in the restaurant industry, even when there isn’t the intentional setup cooperation like Max is talking about Zingerman’s. There’s cooperation that happens all the time. That’s really important. And we don’t recognize that when we study these things, we’re always just talking about competition. I’m not sure why that is. But maybe that’s another paper for some point.

Scott Ferguson: From here I’d really like to have you guys elaborate your critique that frames your paper. I think you’re doing a lot of positive work and work with counter examples that I want us to get into. But you also level a pretty strong critique at, I guess we could say, dominant models– the firm model and the firm exemption, which Ben has already kind of spoken to, but maybe we can say a little bit more about that. And then what Ben brought up and what you call in the paper, a concentrated provisioning system. 

So I think I get the sense that you’re calling out entities in the world, that actually are concentrated systems. Concentrated provisioning systems. But then you’re also critiquing the models by which we understand them. So what’s going on with these two terms, and maybe you can give us a little taste of some of the industries or histories that you critique in your paper.

Ben Wilson: So I think I’ll start. I’ll give the basic idea behind it. And then I think I’ll pass it off to Taylor to talk a little bit about industrial agriculture, because he really captures the dangers and the problems that are created when we concentrate provisioning, specifically in our food production system. But the neoclassical story that I was critiquing before, it wasn’t always that they just assumed that this coordination would occur. One of the more seminal articles by Coase in 1937, “The Nature of the Firm” asked a very specific question: why do firms exist? 

Because it is an ontological inconsistency to go from the individual to this, the thing that they just call “the firm”. And he comes up with this interesting definition that the firm may consist of a system of relationships, which comes into existence when the direction of resources is dependent on an entrepreneur. So he goes through all of this jujitsu to arrive at the fact that we have to have firms because we have this entrepreneur and the entrepreneur, we need to give them the freedom or the authority to direct resources in efficient and productive ways. And it’s interesting in that piece, he references somebody named Batt, B-A-T-T, who doesn’t use the word entrepreneur, but he uses the word “master”. So it’s a master-servant relationship.

And the master determines what the work is that the servant is to be doing. And when the servant is to be working, and for how long, and for how hard and all these sorts of things, which, you know, the lineage of this is a quick jump to slavery, and white supremacy, and patriarchy and all the things that are really pretty disgusting about the idea that the firm just spontaneously emerges out of nowhere. So we’re not really thinking about the firm as this hierarchical structure, then that allows them to produce and reproduce themselves as hierarchical structures over and over again, and the decision making process becomes increasingly anti-democratic. 

And Alfred Marshall and classical political economy really wrestled with this and argued that this is dangerous, right? Because there is the possibility that we would have bad masters that aren’t treating their workers very fairly. And if the workers aren’t afforded collective bargaining rights in their own right, then the exploitation is just going to continue to be exacerbated. And I think industrial agriculture really epitomizes this both in the way that the transformation of the farm has occurred over the 20th century. 

The directives of production on the farm, and then the corresponding community and the way that the community engages with farming, based on this concentrated provisioning system. The use of larger and larger scale production systems. And also has really taken nature out of the conversation as something that we should be reciprocating our relationship with in order to cultivate healthy diversity and all of these sorts of things that, like the worker, it is really left out of the conversation, the decision in meaningful ways. So that’s really where the hierarchy and concentration comes in. If we’re prioritizing an entrepreneur, then we’re disenfranchising those that are going into the production process and part of these communities of work.

Taylor Reid: There’s lots of things to talk about with industrial agriculture. But one of the things that we look at in the paper, there’s, I think, this myth that– farms are getting bigger and bigger. That’s clear. That’s happening. And you can see the graph over the last 100 years– cycle kind of accelerated in the 1980s. The myth is really that they’re getting bigger because they’re getting more efficient. It’s the idea that farms, bigger farms are more efficient. One of the things that we talk about in the paper is this research that’s been done by agricultural economists showing that once– when there’s consolidation in the industry, it forces farmers to get bigger. 

And so they’ve developed this measure that shows that basically, once the four largest firms have at least 40% of the market, they’re basically able to set price. And so concentration in the meatpacking industry is way above that, I think it catalysts like in the 80%, or something like that, and import gets in the 60s. And chicken, it’s up there as well. And so what’s happening is that, when the firms are able to set price, they’re always going to push price down, because then they’re able to sell more. So farmers that– and I’m making these numbers up– maybe they were making $1,000 per beef cattle before and now they’re making $100, they’re forced to get bigger, there’s no other choice in order to make the same amount of money that they that they had been making before from a smaller number of cattle. And so there’s this that we’ve been told is that farms are getting bigger, in order to increase efficiency, but they’re really getting bigger in order to maintain their meager profitability.

 And that’s just one of the things that we talk about in the paper. I think the bigger idea goes back to the complexity that we were talking about before. Farms have been increasingly forced to specialize, there’s no way to be– it’s hard to be a huge farm. Equipment is so expensive, and so specialized, and do a lot of different things. And I think that we see the breakdown of cooperation within rural cultures, when the farms get so big, that basically towns can’t exist anymore. 

You can’t have a school district within the county because all of the landowners have thousands and thousands of acres. And there are lots of pieces to it like that. The less cooperation that there is, the more dysfunctional the biological system is, and the more dysfunctional the social systems are.

Scott Ferguson: Max, what’s your experience in the industry? And can you can you flesh out some of that?

Max Sussman: Yeah. And I just wanted to go off of that, and say that we’re accustomed to thinking of consolidation as being something that inherently causes a lot of these problems. But if you go back and look at the restaurant industry, it’s definitely an industry that’s by and large, pretty unconsolidated. It’s a collection of many, many, many independently organized entities. And so then you realize that, well, that doesn’t necessarily inherently solve any problems, either. Because regardless of the size of the organization, there’s all these problems that are being caused to the environment and bad working conditions, and et cetera, et cetera. 

So I think that thinking about the coordination rights framework is so important, because it doesn’t necessarily refer strictly to things like size as the determining factor as to what things are going to be. It allows you to really think about things more qualitatively. Going back to I think, the question you asked before about what does this allow us to envision? What new possibilities does this allow us to envision is rather than, say, a relief package that’s based on a certain dollar amount, we could imagine a relief package that has the creation of new institutions that would help us create food based solutions to climate change. 

There’s any number of ways to [approach] the climate crisis. You know, there’s so many ways that we can imagine working together to solve those problems. It’s hard in a lot of ways, because restaurants are generally so discreet, they’re oftentimes separate. Maybe you have a couple of chef friends that you know or you’re a big chain. And that’s a whole other type of relationship there. But I think by and large, when people interact with food, it’s at the end of the supply chain. 

Most consumers are not seeing all these things. So I think that’s why, for me personally, it was really incredible to be discussing these issues with Ben and Taylor, because I, my whole life, I’ve been seeing things at the end of the supply chain, being like, well, how can I impact the world in a positive way? And it’s like, well, it’s actually really important to go up the supply chain, learn about more about the institutions that exist, that are impacting things that create the conditions that you’re facing, instead of necessarily, instead of just– it’s at the end of the supply chain, you’re just kind of tinkering around at the margins, and there’s not too much you can do in terms of impacting the bigger picture of the food provisioning system. 

I think that’s not to belittle any of the really incredible work that’s happening right now around workplace democratization, which is something that we’re seeing a lot of which is really, really incredible and should be celebrated.

William Saas: In the workplace democratization vis-à-vis, the need to go up the supply chain and think about coordination is interesting. In the context of a restaurant, I feel like where it seems like the default, at least in terms of stereotypes of how restaurants work is hierarchy, right? There’s a chef and there’s a vision and everyone executes on that vision. And others support that. I guess I’d just be interested– and maybe we don’t spend too much time on this– But maybe Max, your kind of observation about how a restaurant works, if there’s anything that we can abstract or or pull from that to help us understand better what– the benefits of coordination, how that might be more efficient than something like executing on a single entrepreneur, restaurant group, like Brinker International or something. 

Chili’s, shout out. I was a busboy there– first job. But yeah, I mean, it seems your experience in the restaurant space as a third space, which interestingly, I think also functions importantly, as you’ve talked about it as the second, as a place where second shifts are carried out where people come and do their interpretive labor about what’s going on at home. There’s also, having worked in restaurants, the people who are there have to frequently find their own third space, right? Whether it’s the bar next door, or down the street or whatever. A lot, a lot of stuff to chew on there. But what might you be able to pull from your experience in the restaurant space to help us understand coordination rights, I think?

Max Sussman: Well, I mean, I think we could probably talk about, we could talk about restaurants for as long as you want. But I think that there are restaurants– there’s a lot of different kinds of restaurants, there’s a lot of different kinds of people that work in restaurants by a very large caveat, but I think we can see the usefulness of structure in terms of a hierarchy in a lot of restaurants. And then at the same time, the potential for that structure to become toxic, and to help facilitate exploitive relationships and create situations without any accountability whatsoever. And I think those are– that’s the flip side of the structure and of the hierarchy there.

And right now, I think that something that we talk about in the paper is how to create more positive structures and relationships that are intentional and that we’re trying to see positive outcomes from. And I think where a lot of that work gets sidetracked or gets taken off the path is when there’s this intense focus on profitability in the restaurant world and how that becomes the main and the only goal that a lot of the people that are involved in the decision making pursue. And they aren’t even achieving it, but they think that they think that that’s the only thing that they need to be doing and focusing on. And once those two things clash in the current system, there really isn’t much to talk about. If you have a great idea, then oh, that’s cool, but oh, it’s gonna cost too much money. 

So, we explicitly talk about financing. And realize that in order to achieve some of these more positive beneficial outcomes, we need to figure out different ways of funding these projects, rather than these private investors, who are only looking for a return on their investment. And we need to figure out different ways to fund these projects and finance them, so that we can achieve more social outcomes. Otherwise, it’s just going to be, oh, you know, run this special and keep your food costs below 28%. And send the dishwasher home because it’s slow. And it’s the same old stuff that is going to be happening all the time, if all we have to go towards is some artificially constructed bottom line on the piano.

Scott Ferguson: So what’s the composition of private investment in the restaurant industry? Do you guys have that data? How often are banks investing? How often is it just individual investors? How often is it groups? If you don’t, that’s fine. We can skip this question. 

Max Sussman: I don’t know the answers.

Scott Ferguson: Okay. 

William Saas: And the context of the supply chain, you know, people interact with food, at the end of it. The restaurants are very close to the end of it. And that’s, I think what you’re talking about, Max. It’s natural that the squeeze of those if we had four groups that are at 40%, setting the price, like they own 40% of the farms are setting the prices that squeeze is shaping and determining what’s happening to that dishwasher at nine o’clock when it slows down. And the dining. Right, so–

Max Sussman: Yeah, and I just think that it’s such an important piece to the puzzle for people that are in restaurants to make those connections to realize what’s happening. I guess further up the supply chain is the way that I think about it, I’m sure there’s other ways to frame that. That’s impacting their ability to do the right thing. To do what they want to do is the right thing, and to make demands on those other institutions in our society that are affecting those conditions. Not just to be like, okay, well, what do we do? Do we charge a little bit more? Do we educate our customer base? Do we pivot? Do we do this through that? 

It’s like, wow, there’s all this other stuff, there’s a whole. There’s bills that determine what we subsidize in the agricultural industry. There’s laws like Taylor was talking about that govern how much consolidation there is in industrial agriculture. And all those things go into how much a case of cauliflower costs and doesn’t even kind of go into all the issues around sustainability and biodiversity and climate that we’re facing now that are also super, super important.

Taylor Reid: I think one of the other interesting things that we saw in this restaurant research is that during the pandemic, a lot of restaurants, a lot of the chefs and restaurant owners that we interviewed, use the pandemic as a moment to address some of the inequity issues, disparity in pay between front and back of house, toxic restaurant culture. 

And it seemed to me from that what was limiting their ability to do that wasn’t actually margins, because if anything, they were squeezed more during the pandemic was just not having the time to think about those kinds of issues and we saw that change. You know, at a time when restaurants were really struggling, in a lot of cases.

William Saas: If you’ve got time to lean, you got time to clean, but what if everything’s already cleaned?

Ben Wilson: One of the things that we heard was that it’s really expensive to do what’s right. And it’s just really– that’s one of the questions that we’re trying to tackle is, why is it so expensive to do what’s right? And part of that Max I think hit on really well was that this narrow objective of profit maximization is just not a good way to organize your society. Not a very good way to organize your food system. Certainly when Taylor’s talking about industrial agriculture and the ability to set prices, part of the price that they’re setting is the costs that it’s going to take to change all of this, right? The cost of water that we can’t drink. The cost of soil that is not going to produce food anymore, right? 

The dietary changes that this monoculture growing techniques create across our country. The pandemic really exacerbated these hotspots of food deserts and access to unhealthy foods and how these patterns overlap with bad access to public health care and limited resources and budgets in your education system and squeezing public universities in all these ways that, you know, when crisis happens, it’s the the actors that are working to solve public provisioning problems that get squeezed the first. 

Immediate response to the pandemic from our leadership was the Federal Reserve reenacted all the same tools it used in the financial crisis to stabilize the sheets on Wall Street and then the big banks. While our leaders in Congress debated and considered and thought about all the ways in which maybe they could halt the pandemic and arrived at really some answers that weren’t really all that beneficial. So how do we diversify those decisions about who gets their balance sheet saved? And how do we continue to foster environments where the Zingerman’s group is enabled the freedom to expand on and share the knowledge that they’re gaining through their cooperative enterprise behaviors? 

How it’s coordinating geography, how it’s coordinating price, how it’s coordinating where it’s getting its resources from, how much it’s investing in research and development. Right, how it’s sharing that information and teaching others, I think, is a big part of what we’re trying to figure out here is how do we help these successful coordinating systems continue to do the business of good work? In a way that doesn’t seem like it’s so expensive anymore? The folks that I work with up in the Adirondacks. I think the minimum number of jobs any one of them is holding right now is three. 

Three jobs to live year round up in a place that they love and they care about plus the volunteer work. The task force work is volunteer care work where none of them are getting paid to do that. And so how do you enable that sort of effort and care for a place where there’s just no monetary device right now to stabilize that other than constantly applying for and hoping that you get grant funding. Which, you know, if you’ve written grants, you’ve been turned down for grants. It’s far from a sure thing. And it’s super competitive because of the way that we structure it right? 

Money and finance that preferences profit driven activities over those that are gonna stabilize the environment, build climate resilience, educate folks, and rectify some of the ills that come from the development of an economy based on a master servant sort of relationship in our most dominant economic thinking.

Scott Ferguson: So I want to tee up a question about the Positive Alternative Financing Model Public Provisioning of Money of Liquidity model that you all are proposing. That’s really, I think, the heart of this paper. But I want to do so by maybe regrouping and flagging some really important points that have been made in the last few minutes. So one is while the various industries, the agro industry and the restaurant industry, may be driven by greed. 

What I also am hearing from you all is that an equal problem, if not worse problem from your all’s perspective, is the austerity of a profit driven model. And it’s the austerity of the profit driven model that makes everything so quote unquote, “expensive in a relative sense”, that often can feel absolute. And then that austerity creates a number of what feels like forced choices down the supply chain that– while as Taylor says, none of it is absolutely determinative, because in the midst of an economic crisis, we see the restaurant industry actually making things better. Nevertheless exerts all kinds of pressures, that might feel actual but might just be ideological or emotional. And that kind of thing. 

And then I guess another thing that I’m hearing you all saying is that as we think about whether we want to use the vertical metaphors or not, we can obviously use other ones as Max is saying, we think about up and down the supply chain. It’s absolutely necessary to think of not just the first kind of material producers, but to think about liquidity and to think about money at the apex of the supply chain, which doesn’t mean that it’s the only causal force, but it is certainly a major one. So I guess with all of these aspects of the problem in mind, what are you proposing would be another way forward that wasn’t profit driven, that wasn’t austerity grounded and wasn’t passing along these unhealthy forced choices and antidemocratic forced choices down the system?

Ben Wilson: So you guys want me to take this one? Well, the way I see it is we’ve got to really learn how to use money. And one of the things that we hear in the media right now, especially around the question of inflation, is that money needs to be tied to real resources. What better way to tie money to real resources then and to our food system? To start with specific spaces of production, where we can more closely link those resources to the money creation process. And so in order to help really learn how money works and operates, I think we need to enable people to set up and design and experiment their own monetary systems, especially around things like the restaurant group that Max talks about, La Via Campesina and its food sovereignty. 

Efforts to explicitly declare a set of production goals and objectives that are beyond profit and really don’t even include it. Like I think the triple bottom line narrative of social enterprises is a dead end, right? You know, whenever you have this triple bottom line, where you include profit, community, and environment in a crisis, you’re always gonna have to fall back toward keeping your doors open kind of thing. And then you spend all your time trying to find the money instead of actually doing the work that you would like to be doing. So allow these folks to find community organizations. We target anchor institutions, even though they’ve kind of received a little bit of a pejorative kind of connotation and other writings. 

I think universities, hospitals, hospital systems, these are big things in communities that aren’t just going to pick up and move at the drop of a hat, that have a relationship with our community that are already connected to all sorts of different production systems. That makes sense to be issuers of these sorts of credit provisioning opportunities to emphasize environmental production, emphasize mental health initiatives, education, school districts, all of these things, because they’re designed from the get go not to be profit driven, but our provisioning institutions. And so how do we begin to create goods and services outside of the profit driven motive is something that we’ve got to learn how to do. 

And learn that there is another way of producing and doing things for each other that makes life easier and not so expensive. And we’ve given banks the run of this experiment for 100 years now. With the idea that we will finance it infinitum, these profit driven activities and will underwrite this activity. For anybody and everybody to the point where they’re now underwriting activities that aren’t producing anything, right? It’s the shadow banking and the invention of the secondary markets and shadow markets and all these things that aren’t really driving actual production. So maybe it’s time to start reorganizing this different way to allow folks the opportunity to produce robust, healthy food systems locally to figure out how it is they want to make sure their kids are all feeling healthy and getting the care that they need, and so on and so forth.

Scott Ferguson: So you talk about in the article, some kind of possibilities that exist in some fairly recent legislation that’s been proposed, but hasn’t been passed, per se. And then you also talk about kind of bottom up community complementary currency options. Can you potentially speak to those two models?

Ben Wilson: Yeah, so, you know, La Via Campesina, I think we start with that as our example of food system change. Because it’s international in scale. And it sets forth a goal and an agenda that is sort of macro, right, so culturally appropriate foods for everyone. And I think the Green New Deal, the Public Banking Act, the Stablecoin Act, the E-Cash Act, these really large forms of legislation, kind of give us a vision for what people want, in terms of a democratic society, a sustainable economy, these sorts of things. So the basic idea is there. 

The question is, how do you enact a Green New Deal, right? What does it look like in our neighborhoods? And I think lots of people are already doing that work right. The Seven Valleys Health Coalition here in Cortland, New York is working tirelessly to solve food access issues– the Community Task Force is trying to do similar things. They just don’t have the resource connection and liquidity provisioning necessary and those acts– those bills all kind of give us the beginning pieces of that infrastructure on what it would look like in order to do that. 

So the Public Banking Act, in particular, I think, could be used to license things like universities and hospital systems and school districts to provision for themselves to ensure that we don’t go through this sort of austere terrible decision making crisis where we’re sending kids back into a classroom too early or we’re not supporting teachers adequately enough. Just the shortage of the provisioning of health care such as some communities are just so much harder hit by a pandemic than others, because they just don’t receive the standard of care that others do. We really don’t have to experience that sort of inequity if we are designing public provisioning of monetary systems with the idea that we don’t have to engage in that sort of behavior anymore.

Max Sussman: And I wanted to, Scott, I wanted to go back and answer a question that you asked earlier, and that might fit in at that point, but you asked how restaurants are financed? And I think it’s relevant. I think it’s a really important question. So, generally speaking, small restaurants are financed through smaller investors. They’re called friends and family for the most part. So they’re people that are connected to the people that are going to be the operators of the restaurant. And it’s through networks that already exist, which tend to favor power structures that already exist around race and class and gender and other hierarchies.

And as the restaurant itself gets bigger, then you would tend to also, comparatively, start to source your financing from bigger institutions as well. So you might then go to an investment group, or if you’re going to be a multi unit operation might be private equity that’s financing it, and then at some point, you might get a bank loan, but it’s not really a common thing, I think, probably due to the high failure rate of restaurants. It’s not really an exciting thing to give a loan for. But a lot of restaurants will have lines of credit at the bank after they’re operating. 

So just to tie it all back into that, I think the one way that we can make it easier for people to do more good things with food projects, is to make it easier for them to access credit and capital to make these projects happen. And that can happen in a lot of different ways. That could happen through changing laws, that can happen through– as we know, banks are licensed agents of the government that make decisions based on certain sets of criteria. So it’s been something that people have been calling for and in the wide– in all areas, right, like, make access to credit easier for businesses, people of color run businesses, for example. 

So we could also similarly call for access to credit to be made easier for restaurants that fit a set of criteria about how they treat workers and how they’re organized internally, and how they relate to their local economy and how they source their products and all that kind of stuff. And then the other thing I wanted to mention was that– so like Ben was just talking about, the interrelatedness of institutions, especially anchor institutions and the role they play in their local economies. Not just not just hiring workers, but making their own procurement decisions. 

And so one thing that is important in the food, and the food world is for schools to be changing how they source their product. And they have contracts that they signed with, you know, big, often really institutional food service suppliers, that are definitely not thinking about sustainability, not thinking about workers rights, and not thinking about a lot of these issues. And so applying pressure there, which is something that, say parents could do if they have if they have kids in a school, or students could do if they’re at the school and applying pressure for these institutions to make their purchasing decisions more responsibly and to not. 

So that’s something that’s always been happening, but also to apply pressure to perhaps create new institutions that are interrelated and connected and can make these decisions together and in local and regional economies can happen.

Scott Ferguson: Yeah, that’s wonderful. I just want to add something that I think is, I think we’re all assuming, but no one’s actually said it aloud, which is: if we saved through the Public Banking Act, establish all kinds of different bank licenses in banking and financial institutions in the public interest that have certain kinds of criteria, and that some maybe are specially designated for regional and local restaurants, or maybe they specialize in a host of similar kinds of services like that, I mean, I’m not an expert, I’ll let the experts take it from here. But crucially, right, this access to credit, A) need not be something like a traditional loan, where precisely one has to drive the business forward through the motive of profit in order to repay the loan. 

So that’s the first thing. Maybe some of it is a loan, some of it is a grant, maybe all of it is a grant, as long as your obligation is a social, qualitative and ecological obligation rather than merely a quantitative one. And then I think, secondly, thinking about the public banking system itself, as being what we might call using conventional language perpetually in deficit. Perpetually in debt to the society that it is serving. And that way you reverse the kind of drain that the private banking system creates, right? The private banking system says, “no, feed me. Feed me or we’re going to die and everyone has to feed everybody else, or else everyone’s going to perish”. 

Whereas if you have a bountiful– like the Fed is right– a bountiful source that says, “no, are we meeting the eco-social goals that we’re after here?” Then you’re really putting– I love water metaphors– you’re really putting a plug on that drain.

Max Sussman: I mean, it makes me think of the line that the public deficit is the private surplus. And it’s like as Ben was saying, we need to figure out ways to use the monetary framework to do good things and to create public things that have public purpose in society, as described.

Ben Wilson: And then we need to– I love calling money an IOU, right. And I think more than just being a promise to pay, it should be a promise to do. And the more you gather folks like the Seven Valleys Health Coalition or the restauranteurs that we studied– when you are bringing together collective effort to feed your community to stabilize employment, all of that work is unpaid care, labor for your community, that you are taking on more, and you should be receiving the credit for those efforts and that work, so that it can continue and grow and expand. So what are we prepared to promise one another? How are we willing to promise each other an ecological culturally appropriate food system on a global scale? And if so, where are the resources that we need to do that? 

And this is really just a change in the underwriting practices, right? Max keeps bringing up standards or criteria. We rewrote the book, all the books and created all sorts of coursework on underwriting when we changed mortgage lending laws. So that soldiers returning home from the war could buy new suburbia, tracts of land and houses, right? This is the same sort of work that needs to be done.We need to figure out how to underwrite and to provision a healthy, sustainable and culturally appropriate food system at a global scale. And that starting there is a good place to expand into other areas – a culturally appropriate and sustainable arts culture and healthcare and all the things that make life meaningful and useful and wonderful, and that tends to get crushed by other things. 

I think something that really captures this was on Twitter not too long ago, there was this kerfuffle about whether or not restaurants would exist under socialism. It’s like: Where is your imagination, right? What? You know, why would people stop wanting to prepare foods and to do it in an interesting and artistic and opening and grateful way for one another? Why would that experimentation and that desire to do things for one another disappear? I think McDonald’s would disappear under this sort of public banking infrastructure, but I think we would still have wonderful arts and culture experiences in our society. 

Maybe more so and more readily available, instead of having to sit by ourselves or on the couch in the dark watching Netflix. We will be out in the public space watching performances and have a much greater and larger third space for all of us to enjoy.

Scott Ferguson: Can I ask just– Taylor, how much has the work you’re doing in collaboration here informed your pedagogy?

Taylor Reid: That’s an interesting question. I mean, wow, I’m gonna have to think about that. I think, in so many ways, I think we artificially segment economics and biology and in agriculture is one of the places where they come together. Restaurants is one of the places where they come together. I spend a lot of time talking to my students, especially my young students, about the interconnections between these things. And for example, healthy soil. Healthy soil is really important for having good tasting, nutritious food. 

That’s obviously really important to a chef. It also has the added benefit of helping us to store carbon, which addresses the climate crisis. And we’ve seen from agricultural economics, that it’s also the best indicator that we can find, for the financial success of farms. There’s an almost direct correlation between the percentage of organic matter that you have in your soil, and the financial viability and resilience of the farm. 

And so I’ve been thinking since having these conversations a lot more about the artificial duality that we create between the various silos in our institutions. And I think food is a perfect place to start breaking those apart and making these connections. Because there are some very obvious and intuitive connections in the food system that challenge this notion that these are all separate ideas and entities. And I think that’s something that I’ve been able to bring to my classes and bring to my students in a richer way as a result of our conversations and as a result of our collaboration. 

Ben Wilson: Yeah, I think that’s absolutely true. You know, the siloing and academics’ work is really detrimental. And so hopefully, this paper and some of the things that we’re thinking about foods, can help us to start to break down some of those false barriers between our intellectual pursuits. And that’s, frankly, why I was so drawn and interested in submitting the paper to you guys, because I think you and the Money on the Left is really at the forefront of pushing the boundaries of interdisciplinarity and transdisciplinarity. 

And really creative in amazing ways. And if you scan the references here, it’s a who’s who of people that have been on this show. So, yeah, in terms of teaching people, I think as a counter example of what not to do, Bitcoin serves as a point of reference in the paper. Like, here’s a philosophy grounded and scarcity exchange that is just gross. It’s not working, it becomes a speculative asset, right? It’s burning all sorts of energy for the production of nothing– except like, Twitter followers, you know.

Scott Ferguson: That’s something!

Ben Wilson: So, we can design monetary systems and we can implement them and all sorts of scales. And so, don’t be afraid to try to set up a monetary system in your community or your classroom. And use design principles that you’ve learned about in this podcast and from people that think about money and monetary sovereignty and how it needs to be dissolved from a narrow borders sort of perspective to be more likely La Via Campesina and inclusive and beyond boundaries, sorts of ideas. 

And so yeah I’m trying to teach my students by running monetary systems in my classes to promote nonprofit  work, and they seem to get it. And they like the idea that money isn’t the root of all evil, but could be something more productive and as a means of connecting folks, rather than segregating them and separating their interests.

Scott Ferguson: Max, what’s it like to be an MMT Chef? In whatever resonance you hear.

Max Sussman: Weird. I mean, one thing I wanted to say quickly was how important I think it is to take the MMT insights and apply them in areas where they’re not traditionally, or rather, just where they have not necessarily been applied yet. And I really think food is super important. And I think it’s something that we have to do moving into the future. Things are gonna get not great in a lot of ways. In terms of the climate, there’s some things that are kind of, there’s changes that are going to occur that despite our best efforts will probably result in things getting tough for farmers and for our food system. Coming from the land and from the sea. And it’s going to change things a lot. 

So I think that we’re going to find that communities that have  taken a lot of the MMT insights and figured out how to translate them into local and regional levels, it’s going to be such an important development. And it’s not going to be all “oh, well, the federal government can do anything– can pay for anything.” Because if it doesn’t, then we still have to fix problems and take care of each other. We can’t only be just waiting for that to happen there. And food systems, they work regionally. So it’s a natural way to  take a lot of this learning and figure out ways to apply it. 

And I like, would again, I would echo what Ben was saying, to encourage people to try to experiment in their communities and work with each other, to build these systems that are resilient, that use money, and that take care of each other because it’s important now it’s going to only become more important, for sure.

Ben Wilson: And just to build on that for a second. One person who is not with us, but was really instrumental in the development of this paper is Jakob Feinig, who really helped with an earlier draft of the paper and his Moral Economies of Money really served as inspiration for a lot of the ideas here. And that book is full of real world examples of how we have come together as communities to create monetary systems and to change the provisioning, not just of agricultural products but build entire public waterworks systems. So definitely familiarize yourself with his work if you haven’t done so already. 

Max Sussman: And I love that you brought up that Twitter moment about whether there would be restaurants in some unspecified post revolutionary future, but I really hope that we– which is a really silly premise– but I really hope that restaurants change in the future. I think that we can all together envision ways of creating social spaces that benefit communities that feed people. And that don’t replicate these harmful systems and these harmful hierarchies and these toxic work environments.

 I think “culturally appropriate” is a really important phrase, and I think that a restaurant– places where you can get food in a community should serve the community and there should be a relationship there. And yeah so there’s plenty of imagining that we can all do, and if any other chefs are listening, get in touch. We can imagine together and hopefully build something.

William Saas: Any additional closing thoughts or reflections?

Taylor Reid: Yeah I mean, I really think that we’ve covered a lot of ground here and that’s been one of the really nice things about this collaboration is that because we come from different perspectives, a lot of the things that Max was saying about the restaurant industry goes for farming as well. It’s very clear that we need to change our farming system, and you know the environmental reasons are very clear and the food security reasons are very clear. The economic reasons are very clear. The crumbling of our rural communities. I don’t think that we are as explicit about that in the restaurant industry. 

I think that critique has been made more powerfully about agriculture, but I think we also need to think about the connection between the two. I tell my students all the time, restaurants drive the agricultural system that we have. Because restaurants are the end users. And we’ve told farmers for the last hundred years that what’s important to us in restaurants is cheap food, and I think that we need to start changing that conversation and thinking about how to send farmers a different message. Because farmers will respond. 

If what’s actually important is flavor and nutrition and a healthy environment and healthy water– sorry Scott– then farmers will respond to that. And so I think we got to keep in mind that that connection within the food system, these aren’t isolated enterprises. Food is one interconnected web of activities and people and culture.

Scott Ferguson: Well that’s a beautiful place to stop. Ben, Max, Taylor thanks so much for writing this piece. Thanks so much for joining us for this wonderful conversation.

Ben Wilson: Thank you, it’s been fun.

Taylor Reid: Thanks for having us.

Max Sussman: A great honor to be here and to be working with you all.

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

Municipal Money After Crypto: Austin Edition

Mike Siegel and Mike Lewis join Money on the Left to discuss municipal currency politics. The conversation focuses, in particular, on our guests’ recent success in Austin, Texas, where they helped critically rewrite anti-public and anti-environmental crypto legislation to open fresh possibilities for public banking and payments that support local communities and ecologies. 

A former public school teacher, Mike Siegel is a civil rights attorney, a co-founder of the progressive non-profit Ground Game, and a former Democratic candidate to represent Texas’ 10th Congressional district in the US House of Representatives. Mike Lewis, meanwhile, served as communications director for Siegel’s 2020 campaign, works regularly to advance Ground Game’s commitment to progressive electoral politics, and remains a prolific advocate for public money. 

In early 2022, Siegel, Lewis and Money on the Left Collective member Andrés Bernal mobilized an effort to block the development of an official cryptocurrency in the City of Austin. Initially, they appealed to the Austin Chronicle opinion page to reshape public opinion. Next, Siegel, Lewis, and Bernal persuaded and then worked alongside Austin City Council members to amend recently-passed crypto legislation. Impressively, these amendments introduced new language into municipal law, warning against the eco-social dangers of crypto, on one hand, and articulating a broad-based need for robust public banking and payment systems, on the other. Woefully underreported in comparison to news about all things blockchain, the story of municipal money politics in Austin represents a powerful model for local public money action worldwide, particularly in light of the recent catastrophic crash in crypto markets.

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Music by Nahneen Kula:


The following was transcribed by Mercedes Ohlen and has been lightly edited for clarity.

Maxximilian Seijo: Mike Lewis and Mike Siegel, welcome to Money on the Left.

Mike Siegel: Right on. Thanks so much for having us.

Mike Lewis: Hey, thanks for having us.

Maxximilian Seijo: We’ve invited you two on the show today to speak about your efforts to redirect some… what we could say, misguided attempts around cryptocurrencies and municipal politics. Moving it more towards a movement for public banking and public payment systems. And so we’re especially interested in hearing about your organizing in and around the city council in Austin, Texas. We feel strongly that this still relatively underreported story can serve as a powerful model for local public money action worldwide, particularly in light of the recent catastrophic crash in crypto markets, including certain stable coins. 

Before we launch into this conversation, though, we’d like to give you each a chance to tell us a bit about your professional and personal background. Let’s begin with Mike Siegel. Mike, can you say a bit about yourself for our listeners, who might be unfamiliar with your previous congressional campaign or your organizing efforts with ground campaign Texas?

Mike Siegel: Well, thanks again for having me. Great to be on Monday on the Left. I’m Mike Siegel, I’m a former public school teacher, union organizer, and civil rights lawyer. In 2018 and 2020, I was the Democratic nominee for Congress… challenged this guy, Michael McCaul, one of the most wealthy and most corrupt members of Congress. And, you know, it was endorsed by Bernie Sanders and Alexandria Ocasio Cortes and labor and progressives and environmental groups. With the help of a really broad coalition, you know, ran a campaign that was probably the strongest pro Green New Deal campaign in the South among congressional candidates. Built a really strong base of organizers and volunteers and turned what was previously a safe Republican district into a national battleground race. 

Despite being for the green New Deal Medicare for All and endorsed by Bernie, I also was a D-Triple-C candidate. So somehow was able to thread that needle of getting both mainstream and progressive support. After 2020 I didn’t want to keep running for Congress every year of my life. I stayed in the fight and politics. I joined together with another progressive Democrat, Julie Oliver, we founded Ground Game Texas. The basic idea is to fund year round work in politics, not just getting out the vote for a candidate on the eve of the election. But working year round, focusing on places that don’t get enough investment, and focusing on progressive issues. We know that the Democratic Party in many parts of the South is not popular, but our issues are. I would include what we’re talking about today, you know, the idea of public banking. I mean, these are issues that really appeal to working class people. 

What Ground Game is doing, you know, we’re basically based on 2020. Joe Biden was outperformed in many states by progressive issues. Florida, 60% voted for $15 an hour, but voted for Trump. South Dakota legalized marijuana and voted for Trump. We’ve got a set of issues we call workers, wages, and weed. The idea is to lead with these populist, popular issues, and then use that as a way to engage more people in the political process. Long story short, right now, Ground Game Texas is running ballot measure campaigns in 10 cities to get issues like these on the ballot as a way to excite more voters.

William Saas: Mike Lewis, you are a great friend to us at Money on the Left,  having transcribed some of our important back episodes. Could you say a bit about your own roles that you’ve played in Austin politics and how you might have collaborated with Mike Segal in particular?

Mike Lewis: Absolutely. Thanks for having me, Billy, Max, and the Money on the Left crew. I’m Mike Lewis, I’ve been a volunteer activist since the Bernie 2016 campaign. Prior to that, I was kind of passively aware of politics. I kind of identified loosely as a “Ron Paul libertarian” as folks do who grew up in rural Texas. Turned around thanks a lot to my Mom who started organizing against a sinister landfill company. She was posting Bernie memes on my Facebook wall. I got into organizing and showed up at a Fajita Phonebank for Bernie in January 2016. I’ve been working on various campaigns and issues ever since. 

I worked on Mike Siegel’s campaign in 2020 as comms director, really helping kind of develop and organize around the green New Deal. We actually organized the first major Green New Deal town hall in Texas. Built that into winning over the labor support in Texas with AFL CIO across a bunch of different labor unions. Building their trust around the programs just transition and whatnot. I’ve been working also as a volunteer research assistant for different projects in the MMT space as well. Helping Andrés Bernal publish a paper as a research assistant on inflation. Then we have an upcoming paper that we’re working on around MMT for local government. Really helping progressive candidates up and down the ticket, especially around messaging public finance approach, the classic “how do you pay for it” question that we all love.

Maxximilian Seijo: Thanks so much, Mike. Maybe to set up this narrative for a bit, can you all explain what’s been going on with the crypto industry at this sub-federal level, both in Austin and elsewhere? As you do so, maybe try to provide some basic definitions and context for our listeners who are not closely following this space? So for example, what for instance, is meant by the term “crypto”, “blockchain” or “web point three”? Who are the big players in this world and what are they trying to accomplish? How is the crypto industry strategy and rhetoric been changing as of late, at least prior to the recent crypto market crash? By contrast, where do orthodox municipal commitments to bond and tax financing fit into crypto’s advance? 

And how are you all working alternatively, to transform Municipal Finance, guided by the insights of MMT? Most important, finally, how do you all see municipal public money politics affecting various struggles for social and environmental justice? There’s a lot there, but maybe we can wait into some of these questions.

Mike Siegel: Mike, you want to start? I feel like you’re more of the expert on these issues.

Mike Lewis: Sure, right on. Yeah, I guess I’ll start with the definitions. Cryptocurrency is, you know, it says it’s a currency, right? But it’s a private token on what’s called a “blockchain,” which is a line of code that has a consensus mechanism. There’s proof of work, proof of stake, different consensus mechanisms out there. All the popular cryptocurrencies operate on a proof of work blockchain, which is basically a justifiable rage at private banks. Bailouts from the 2008 financial crisis kind of led this this project of cryptocurrency on a quest to create this, quote, unquote, “trustless money system”, where not only is code law, but apolitical laws, as Ron Gray recently pointed out responding to one of the Winklevoss tweets, that was talking just about how, you know, there is no politics here. It’s a trustless money system, you don’t have to have any kind of mediation between parties, but you can basically trust in a line of code. 

It’s kind of a deeply libertarian ethos that’s built into the technology itself. It’s basically, you know, a cyber collectible asset priced in dollars. It uses money aesthetics, to prop up a revolutionary technology narrative. It’s most likely… it’s an unregulated security. It’s something that is kind of imagining money as a scarce object. That is, you know, finite. Of course, most people really only buy into this stuff because it’s going to increase in value, in dollars. It really kind of defeats the purpose of what money is, which is the things that price, things are priced in the actual unit of account. That’s kind of the basics. You know, Web3, is basically just imagining the internet. If we’re in Web 2.0, right now, which evolved out of Web1, Web2 being the platforms, you know, Facebook, the different kind of centralized platforms. This kind of venture capital backed project around so called Web 3.0 imagines putting the internet onto a blockchain. Just to make sure to zoom in on what a blockchain is really just think of that as a distributed ledger that is append only. It’s imagined to be something that’s immutable, that can’t change. 

But of course, there’s many examples throughout crypto history of exactly the opposite happening. I think one of the things to really understand about the crypto space as we get into this conversation has to deal with stable coins which when you walk into a casino and you get casino chips, you trade your dollars for an official casino chip, and that’s supposed to have exact value to the the amount of dollars that you put in. So the way that the crypto space works– the way that people on ramp and off ramp out of these crypto tokens is they convert their dollars into these so-called “stable coins”. What we recently saw with this huge crash, with the Terra stable coin, the fourth largest crypto token that was out there about $18 billion in market valuation, we basically saw the value proposition of the crypto space kind of contradicting itself and failing as it has repeatedly again and again. 

There’s been so much money pouring into culture and the politics from the crypto space. It seems like they’re kind of desperate for new suckers, new liquidity, so that they can kind of exit from their initial investments. We’ve seen, of course, massive amounts of celebrities endorsing everything. Maybe that that kind of leads into where we picked up with things here in Austin, I’ll kind of pass it over to Mike.

Mike Siegel: Right on, yeah. To be clear, I don’t promise to be an expert in any of this. Mike Lewis is kind of my translator for a lot of this new financial technology. He turned me on to Stephanie Kelton and an MMT. I think what I’ve been trying to do the last several years as a relatively high profile kind of political figure on the left in Texas, is like how do we translate these ideas into political campaigns and action? And how do we build coalitions that kind of understand these concepts and combat the status quo in Texas? I would say, the way this issue came up in Austin is essentially… I mean, first of all, think of Austin– all the big tech companies are ramping up more and more. Google just bought 50 stories of commercial office space on a riverfront property, like the most beautiful building in Austin. Facebook, Oracle, everybody has these huge footprints… Amazon going down the line. 

That’s often an extremely booming city that is unaffordable for even working class, middle class people at this point. And you have the Super Bowl, where everyone knows that there’s all these pro-crypto ads in the Superbowl. That’s followed up by our annual festival in Austin, South by Southwest. And I think most your listeners are generally aware of what South by Southwest is. But it started out as this kind of cute Music Festival, Film Festival, and has now become this major cultural moment where all these big venture capital folks, tech bros, and what have you are coming to Austin, spending 1000’s of dollars for tickets to the festival, spending all this money and hyping up their various pitches and proposals. So this year, South by [Southwest] was bigger than the last couple years because of COVID. 

There was kind of like a big push to make South by [Southwest] this huge event. It seems like in concert with that, the crypto money came to town, and particularly the crypto political money. And this is something that I’ve been very aware of that there are now, you know, super PACs trying to influence candidates on crypto issues. Trying to give congressional candidates millions of dollars. Trying to influence city council candidates. So what seems to have happened in Austin is it in concert with South by Southwest, the crypto lobbyists started reaching out to city council members in Austin and other local political figures to try to get some sort of symbolic win in Austin, timed with South by Southwest. And it seems like their goal was to push Austin to adopt a coin similar to Miami, or some of these other places– an “Austin coin”– that would be this blockchain style currency.

 That was kind of the move they were making. I got word of this because through my political work, some of my labor allies who happen to work in City Council offices, they pinged me, “hey, you should take a look at this draft resolution circulating”. It was basically… it was going to be a city of Austin official action that endorsed blockchain and crypto, and basically offered the services of the city bureaucracy to advance the local so-called Web 3.0 movement in Austin. And there were two or three draft policies. Some of them were extremely supportive. My immediate concern was that these folks, what they were basically going to do is get the city of Austin to endorse this get rich quick pyramid scheme, as Mike Lewis described it. And that a year or two from now when crypto crashes, all these working class people would invest in crypto because the city of Austin put their reputation behind it and they would be screwed.

 I’ll pass the mic back to you in a second, but long story short, what happened was once we got word of this move that was happening in the Austin City Council, Mike Lewis kind of gathered some experts. We created basically an educational guide for the City Council staff and officeholders so they understand what these different terms mean. Because a big part of this is all these crypto advocates come in and they use all these terms of art that most people have no clue what they mean. They were basically starting to convince the city council that, oh, what’s the harm in supporting local business? You know, that’s how it’s being framed. These are just local business people in Austin, so let’s support them. We produced an educational guide that kind of showed the risks, the history of Bitcoin, that the fluctuations, how it’s basically a scheme to transfer wealth from late adopters to early adopters. We started lobbying individually, with council members and council offices.

 Then as it progressed, we realized that even though we were kind of raising these flags and bringing up this history, that the council was going to move forward. In particular, the mayor of Austin, who I consider a friend of mine, and another council member, did this big press conference right before South by Southwest launched that they were going to introduce these two resolutions. And that’s when we kind of mobilized even more, we’re like, oh, no, this is about to go through, with almost no debate. 

Together, we wrote an op-ed, in the local paper, The Austin Chronicle, which got a lot of circulation. That created this opportunity where multiple council offices were willing to work with us to say, okay, hold on, let’s put a brake on this pro-crypto stuff. Then that’s when we introduced the concept of public banking and complementary currencies. I guess this is kind of giving away the end game, but ultimately, we’re able to get these resolutions amended. So now technically, even though they passed something that was ostensibly, pro-Web 3.0, they also passed a resolution that’s pro-public banking.

William Saas: Could you say more about– either Mike or Mike– about the particulars of that proposal? That sort of “wolf in sheep’s clothing” of something for small businesses that’s actually about the transfer of wealth from late adopters to early adopters? We particularly understand that y’all were troubled by and I think we share that concern, the potential tax receivable ability of this Austin coin. Could you talk about the particulars of the proposal and your critique of it in that op ed and other forums?

Mike Siegel: Well, I’ll start Mike, and then pass it to you to fill in. The most extreme version was going to allow city workers…  the city of Austin employs 13,000 people, right? It’s not just cops. It’s a whole class of the city is employed by the city. So people were gonna be able to receive their salaries and crypto, people were gonna be able to have their retirement get transferred to crypto, people were gonna be able to pay their water bills and their electric bills in crypto. It was basically like fully using this as a quote unquote, “currency” were some of the proposals that were out there. I’ll never forget, while Mike and I were working on these issues, going to my barber– I go to a black barber in kind of far North Austin– And I’m like, I’ve got all these kinds of blockchain questions on my mind. 

And in the barber shop, I’m hearing one of the barbers talk about how his son has $15,000 invested in crypto. Like basically instead of a college fund, this working class family has put $15,000 in the crypto. What the guy said was like, we can’t touch it until he gets to college. So not only are they invested in it, but they can’t get out even if things go wrong. To me, it just seemed like hucksterism. That these extremely wealthy donor types had convinced the mayor and these other politicians, oh, there’s no harm in lending the city’s name to it. This is all… this is all good. And there was no discussion of the drawbacks. Basically, this op-ed we put together… I forgot how many words… 600 words or something, but basically just introduced the real high points of how risky this investment is and how disastrous the Miami coin has been. But yeah, Mike, how would you flush out what we were going through?

Mike Lewis: Sure. We saw how the whole purpose of the resolutions were to A) get support for cryptocurrency, generally speaking, and all of the tax perceivability especially on the most extreme end. And then also kind of using the mysteriousness or possible, magically innovative potential of blockchain technology in a separate resolution as being kind of two separate things. We kind of saw that there were some folks on council who said, I’m skeptical of crypto, but I’m interested to see what all types of use cases there are at the municipal level for blockchain technology. The crypto industry is very interested in getting that narrative out there  because they want to be able to say that there’s a whole lot of use cases for this distributed append only ledger and whatnot. 

I guess there’s a lot of problems with tha though, from a privacy standpoint that folks who’ve had on Money on the Left, like Rohan, I’ve written about. There’s also just the aspect that it’s a predatory financial scheme and that there’s folks that are pushing massive returns when they’re basically left holding the bag. The whole system is riding on this whole stable coin industry that’s kind of a ticking time bomb in terms of… its basically shadow banking or 19th century “Wildcat Banking”… kind of all the reasons we have modern banking and finance regulations is what the crypto industry is kind of speed running through the last couple of years. So, I think that at the local level there was organizations like CityCoins that were trying to push their agenda to get Austin to adopt a CityCoin. Basically, how this scheme works is a Peter Thiel acolyte-run organization. Basically, the idea is they allow… once the city announces that they’re willing to allow a CityCoin to be created, they allow the mining to start. 

Miners mine the cryptocurrency with their computers using a bunch of computing power. Then people gain those tokens and then you can sell them or buy them on… there’s one exchange for just for CityCoins, for MiamiCoin, in this one use case. What’s interesting about that is the mayor of Miami was pressed on the fact that this one exchange, Okcoin, he was pressed by a reporter from CoinDesk, that they were advertising 430% returns on investment annually. This is a token is now down like 98%. The idea is the mining reward… 70% goes to the miners, 30% goes into a wallet that basically belongs to the city and they’re just the beneficiary of it. So, it’s basically kind of a bribe, if you will, to the city to kind of put the cities and perimeter on this speculative token that doesn’t have any use cases for payment system, for banking the unbanked, all the different narratives that they put out there. It’s just a speculative coin and it’s lost a lot of people a lot of money.

Maxximilian Seijo: You’ve both narrated some of the aspects of the problems with these resolutions, and obviously as well touched on the sort of rapid advance the crypto industry is making towards politics. Before we move to some more general questions though, I want to ask specifically about the resolution amendments that you all lobbied and had introduced. Particularly maybe some of the language that describes some of the limits and problems of crypto that you’ve been outlining, as well as the language that legally enshrined support for public banking, complementary currencies, and public payments platform.

Mike Lewis: Sure, I can go ahead and read those. I’ve got our after action report pulled up. On the cryptocurrency resolution, the first one we got added into their awareness statement that basically pointed out that cryptocurrencies present notable consumer risks including volatility scams, lost encryption keys, the inability to reverse transactions, and privacy issues. And then we also got added to that, whereas existing and potential public payments, currency and banking technologies and infrastructures that exist for the city of Austin should be also considered for broader investment, creation of a digital wallet based payment platform that’s public, administered by the city as well as the creation of a local complementary currency issued and accepted by the city. Then on the blockchain and Web3 resolution, we got a whereas statement that pointed out that blockchain technologies have known power consumption challenges that should be researched to determine the environmental impact. 

Just pausing for a moment there, one of the whole reasons that the cryptocurrency industry professes that they can create this trustless environment for peer to peer transactions and things like that, is that we can trust in this line of code. But we can also trust in the fact that there is a sea of computers that are running calculations to guess at numbers. Basically, that’s what we can put our trust in versus people. It’s putting our trust in that kind of that waste of massive amounts of energy. Bitcoin alone wastes as much energy as the entire country of Argentina consumes, or the Netherlands. Then lastly, we got added into the resolution in the be it further resolved, supporting the creation and development of any financial innovations that could benefit Austinites and city governments, and applications that could include public payment platforms, public banks, or local complementary currencies.

Mike Siegel: And to just add a little color to that, the frame for our critique of what the crypto lobby was trying to do was equity. That was really resonant for the politicians and community groups. Who is this serving? To really clarify, for the office holders that this is serving the early adopters, the crypto proponents themselves. But you know, something Mike said earlier about Miami, really goes to the heart of why the crypto lobby was able to get as far as they did. It’s this bribe that they’re essentially offering. I mean, here in Texas, where a progressive city like Austin is operating in extremely challenging financial environment, where the state has basically constrained sources of income. We have no income tax in Texas. And beyond that, the city is constrained from even raising local taxes. 

But by state law, such that you actually have to have an election, if you want to increase taxes, or sorry, increased spending above a certain amount each year by, I think it’s 4%. We can’t even to keep up with the cost of living. We can’t even keep good staff working for the city, where they’re talking about lawyers or engineers, or all sorts of specialists. There really is this overall feeling of financial desperation. How do we fund the bare minimum? I mean, we have a housing crisis, but we can’t afford to pay for housing. We’re in a climate crisis, but we can’t afford to shut down the coal plant that powers the city. And so I think the promise of this crypto money is so tempting for the politicians. And that’s where Mike and I talked about… as we were doing it we tried to kind of perform a little bit of judo energy transfer, like, okay, the crypto lobby created all this energy and momentum. But can we somehow turn this moment and shift it towards complementary currency and public banking? I think we did like really establish a foothold here. Were multiple council members at the council meeting, when all this was decided, spoke in favor of public banking. And now we’ve introduced this concept to the city that presents an opportunity in the years to come. Oh, well, you know, we might be able to pay for that housing that we need, if we set up a public bank, we might be able to generate additional local income if we have a complementary currency and introduce these progressive financial technologies as an alternative to crypto.

William Saas: As a sort of, several years ago, as a recent transplant to Louisiana, we had a new governor replaced Bobby Jindal– John Bel Edwards, a Democratic governor. There was a lot of hope and excitement around that. And he came in saying, basically, that we’re going to move forward putting Louisiana first. I was pretty new to MMT and interested in public banking at the time, and wrote an op-ed in The Advocate, which is the Baton Rouge paper, basically advocating for public banking. The responses to that op-ed– they made it a letter to the editor– were shocking enough for me to just be like, I’m not gonna look at those again. Could you share a bit about… and there were some good ones and I actually made some good connections with folks as a result, but it was illuminating. Could you share a bit about the reception of y’all’s work and y’all’s op-ed? And I wonder if there’s any overlap between the constituency that is sort of is interested in weed wages and money or–

Mike Siegel: Workers, wages, and weed?

William Saas: Workers, wages, and weed and crypto. So what sort of conversations have you had? How are people receiving this work?

Mike Siegel: I think… Do you want me to go first, Mike, or do you want to go?

Mike Lewis: Yeah, all I was gonna say is we’ve basically kicked off a conversation and it’s picking up across a bunch of different kind of intersectional bases of the grassroots climate organizers, racial justice organizers, folks that combat predatory payday lenders and whatnot. There’s a whole lot of different sectors that should have a major interest in public money and what it can do and how it applies to what they’re trying to accomplish. Go ahead, Mike.

Mike Siegel: I think there was a lot of interest. The local DSA chapter, there was a lot of interest. An Austin interfaith that deals with workers with working class. Faith communities, they’re interested, Austin Justice Coalition. I think the challenge for the activists was like, this sounds good. But how do we do it? I think, overall, in Texas, I mean, shit, we’re recording this couple days after the horrible Uvalde shooting. I mean, they’ve banned abortion in the state. I mean, we are under such immense pressure on so many fronts, that a lot of the good organizers are completely maxed out. So, I think the reaction was from some of the key folks, that sounds great, but where do we come up with the resources, the leverage to actually make this real? Then the other concern is that basically, even if Austin does this, will the state of Texas just preempt it? 

There’s this long standing struggle with Democratic cities in Texas, especially in Austin, where you do something progressive, you lead the way– we pass a paid sick leave ordinance. We pass protections to ban the box for formerly incarcerated individuals. And then the state at the next session of the legislature passes a law that preempts or overrules what we’re doing locally. Some folks feel not only are am I overwhelmed and don’t have enough capacity to take on this project. But also, if we win, isn’t the state just going to overrule us one year later? I think part of where we’re at right now with this movement, is people understand the idea. And in particular, it’s the Bank of North Dakota, right, Mike, that is a great example? I think the two stories where we were able to tell really effectively is one, the Bank of North Dakota is an amazing example of a public bank, like you wouldn’t expect this amazing… you know, socialist, progressive institution to exist in North Dakota. But it does, it was extremely successful. 

During COVID, it was able to get more PPP loans for small businesses in North Dakota per capita than any other state. It’s a bank that’s actually fighting for the people. And so that example, teaching the story of the Bank of North Dakota, really got a lot of people excited, including some like, relatively conservative, Austin City Council members, they’re like, wow. And so like the record of the Austin City Council meeting, there’s a lot of discussion in the Bank of North Dakota. And then from the organizer point of view, we were pointing to the successful campaign in Philadelphia, to take major steps towards the public bank. I think where we’re at right now is, we’ve established this concept, it’s enshrined in city law. If we work on this as a movement, the city manager and city staff are obligated to help us under the resolution. Now we just need to get like another wave of momentum to push the project forward more.

Mike Lewis: Yeah, all it took in Philadelphia was one, really active city council member, Derek Green, activating the Black community in Philadelphia, especially around the fact that historically denied access to credit, and how this could help Black entrepreneurship, small businesses, but also people who are unbanked, underbanked, low income, as well. And then, just a handful of volunteers. I think the important other thing to point out about Philadelphia is,  they just passed last… or in March, 15 to 1 passing the creation of the Philadelphia Public Financial Authority. So that’s not quite a bank. They don’t have a charter yet. They’re on the way to, they’re the first city in the US that is on its way to a public bank charter. But there are things that can be won between no bank and bank. 

And I think that’s important to point out, just in the fact that, it’s not all or nothing. The PPFA is going to be able to establish letters of credit to help provide more loans to low income folks and folks who had been historically denied access to credit and other other financial services that it can offer. Just wanted to make sure to point that out. There’s a huge movement across the country for public banking. California. 10 different cities looking at it there. LA, San Francisco, New York– there’s a huge movement going there. But even like New Mexico, New Jersey, there’s other places like that too. 

And, of course, North Dakota. If you can point out the fact that… and one of the organizers on the Philadelphia campaign told me that they kind of appeal to that local pride by pointing out, like, hey, if these Republicans over in North Dakota, who are running this socialist institution… it was won by socialists between 1907 and 1919 and it’s been around for 100 years successfully running, it’s like, if they can do that, and has 7 billion assets under management we can too. So that’s definitely been kind of the rallying cry.

Maxximilian Seijo: Then, as you’ve both already said and started getting into, there’s latching into this movement nationally for public banking seems to be a part of these steps that you all are suggesting. And I guess I wanted to ask, in framing and linking together the political work that you’ve both been doing on public banking and complementary currencies, with the contextual environment of crypto finance and the recent crash. I guess I’m wondering if you all had particular thoughts about how public banking organizers such as yourselves, but also around the country, can take advantage of… I heard Judo mentioned? Take advantage of the context and some of the news coverage of this kind of the crypto crash, and as well as the real losses that people as you said, who are not always like high class investors who that are taking, in light of some of these particularly smaller– smaller than Bitcoin, at least, but not at all small coins collapsing.

Mike Lewis: I think that’s a huge moment for public education. Being able to help organizers, help policymakers, help the public generally better understand that there is an alternative from the horrible situation that we got into with the global financial crisis. And the response to that of crypto, which doesn’t appear to be any better, if not massively worse than what got us into the financial crisis. That there are better alternatives to that involving our public institutions, having better governance, having better accountability for the system that we rely on for transactions, for money, for our economy, for care, and for taking care of each other. I think that when it comes to just providing that alternative to kind of a private offering, with what we can have under public institutions that benefit everyone. 

That’s that’s kind of the moment we’re in I think, is is really around public education, and then getting folks to act on that, because they have to realize that, at the municipal level, the the revenue model, the taxpayer model… the idea that, you know, our cities are funded by taxpayers, the wealthy. Of course, we know this is a deeply racist, sexist, classist institution deeply embedded in American white supremacy. We know that that institution has led to the status quo that we’re at. It’s led to the status about the crisis of public education finance, like our local public schools. We know that setting that up with property taxes to pay for it was a product of systemic institutional racism, to drive segregation. We’re understanding the foundation that we’re on, how money relates to what we’re trying to accomplish, and then how public money is going to get us to where we want to go.

Mike Siegel: Yeah, just to add to that I agree. This is a huge opportunity this moment. Unfortunately, what’s missing as a movement is our capacity to do the organizing and do the outreach. I think the idea of a public bank really appeals to a lot of people’s ideas, especially Texans’ ideas of self determination and self sustainability. In Austin right now on our tax bills, for every $8 that were tax for school’s finance, $7 actually doesn’t go to our local schools, it goes to the state of Texas to use in all sorts of ways–good and bad. People here really do feel trapped. They’re looking for answers for how we can fund the schools we want, how we can fund green infrastructure, how we can fund housing. I think the moment is really here, because crypto has people thinking about money or… fake money, obviously. But so what’s the real alternative? I think my thing is, from an organizing point of view, we need infrastructure. Y’all have this wonderful show, Money on the Left, y’all are educating the people doing the Lord’s work, right? Extremely important. 

But how do we get a major national union for example to realize that public banking might be the way for their members to have better quality of lives? Better health care? How do we get national political groups to invest in public banking or national foundations to fund it? Because, unfortunately, we’re operating in this market economy, this capitalist context. This movement requires a lot of public education. It requires a lot of nuance in terms of how we communicate the message to the people, how do we build the coalition? Part of what I’m looking for, and maybe all the hosts of the show have some ideas, but, how do we make this more of a mainstream concept? I mean, think about Medicare for All. 

 When Bernie ran on Medicare for All, he educated a ton of people about it. But now you’ve got, you know, the National Nurses Union that spends millions of dollars every year organizing for Medicare for All, 15 an hour, the SEIU National Union has an entire program that’s been going for 10 years at this point, “Fight for 15”. How do we inspire folks to develop similar infrastructure for this essential tool, which is a public bank?

William Saas: You talked about capacity and infrastructure. And earlier you talked about, and I hadn’t really realized that there was a crypto lobby, but it makes absolute sense. You’ve got millionaires and billionaires investing in this speculative asset, of course they would hire some of the best lobbyists to look out for that asset and tt’s continued existence. So you got the crypto lobby on one hand and then you also have in terms of like state banking and state finance, you have the financial industry itself, which is, in Louisiana, I think that our state revenue goes into Chase Bank. If it still does, right? And is that the same for Texas? 

Mike Lewis: Austin banks with JP Morgan Chase.

William Saas: Okay yeah, they probably have a lock on the South, maybe even more. But they also have armies of lawyers and lobbyists that are arrayed against something like this. So the capacity and infrastructure argument is just tremendously important. I mean, daunting, right? I guess one of the things that I can think of an immediate example from this morning actually as we record this, a very qualified and unsatisfactory, and maybe it’s not a win, but the announcement, sort of, in a roundabout way that the Biden administration is thinking about canceling $10,000 in student debt. And this is not the first time we’ve heard this, but the work of the debt collective, which is pretty… they’re not a huge organization.

Right? They are a posse, they are lots and lots of people who are– myself included– who count themselves as like somebody who would be a member. I guess we can, I don’t have… you can pay dues and be an actual member of the Union now. But something along those lines, they’ve been very, very successful on a small… with a small team and infrastructure relative to what they’ve been up against, with the student loan industry and the medical loan financing industry to get student debt cancellation at front and center. Presidential politics and making it something that Biden cannot ignore and get away from… and is probably very annoyed by, but I mean, that would be an example. I don’t know how you would replicate that energy and effort. But I think it would maybe some inspiration there for a small team doing big things.

Mike Lewis: Yeah. Just to piggyback off that, like some other examples– Chicago’s bailout for the many that Rohan Grey worked on. Back to Philadelphia beginning of COVID, they passed a unanimous resolution calling on the Fed to create a facility for municipal loans at zero interest, you know, we got the Municipal Liquidity Facility, but the it was completely unusable. The rates, which were a total policy choice… could have put cities, you know, balance sheets and a lot better position. And that’s all a policy choice. Of course, we know. 

Maxximilian Seijo: Yeah. And it makes me think, too, that in the coming months and years as there’s more crypto volatility, which there no doubt will be. I think that’s the one thing that is we can say for certain, there’s gonna be a lot of people that have lost a lot of money in this space. And we’re promised like you mentioned with the MiamiCoin, we’re promised returns. We’re promised a certain kind of path to flourishing and amidst, you know, all the hardship that we see around the country in the world, it’s some level understandable when the culture is speaking those potentials. 

People are making money around you to want to get in on that. I do think that will present some opportunities for maybe bringing some people on board into the public money, space, and just politicizing money more so on these terms and you know, it’s not always a happy story, but same goes for after the financial crisis in 2008. That this was an impetus to politicize a lot of different aspects of financial malfeasance, and then bailouts as well, and the political capture. So, it’s not exactly hope, but it’s… there’s certainly paths that these sorts of things might go down where there will be potential to make some gains. 

Mike Lewis: I was gonna say, Hamilton Nolan wrote a piece in In These Times, it was about kind of after crypto’s crash, what happens. And in exploring the high potential that he sees and folks going even further right, more fascist and whatnot. I don’t think any of that’s inevitable or deterministic. Of course, we have… it’s kind of our job to make sure it doesn’t happen.

Maxximilian Seijo: Yeah, and then I think the last thing I’d also add too is this environmental component that you both brought up is really important, too. Because, particularly for these municipalities, who all variously have commitments to environmental sustainability. I know in California, for example, there are often municipalities that pass ordinances right to… moving towards environmental sustainability, and that’s in a state where we have a commitment to net zero carbon emissions, but on the table sometime in the future. Thinking about the ways that perversely crypto is kind of a perfect storm, to move against that sort of commitment or those sorts of values. Potentially that’s another angle that it seems like y’all are pursuing so I appreciate the work.

Mike Lewis: I was gonna say, Texas has 40% of Bitcoin mining. Of course, we all know that we have the best power grid here. And I’ll let Mike take it from here.

Mike Siegel: I think unfortunately if you look at future opportunities, if we’re analyzing the opportunity for this movement, we not only look at future crashes of crypto, but we also look at future failures of the Texas grid. We had the terrible freeze I guess about a year and a half ago at this point. And right now, our grid is not stable enough to survive the summer. We’re most likely going to have blackouts this summer, hopefully not long ones. But it’s extremely likely and the fact that crypto mining is such a huge load on the grid could be a potential turning point. 

Right now, there’s a governor’s race for Beto O’Rourke. I wouldn’t say he’s a longshot, but he definitely not the favorite to beat the Republican incumbent Greg Abbott. But when he launched his campaign, there were actually only two issues he was highlighting: fix the grid and legalize weed. And you gotta know, I loved it when I heard him talk about marijuana on the first day of his campaign, because this is one of these popular wedge issues that can change politics. But in the history of Texas politics, actually, grid failures and electrical failures have led to major restructurings in the state politics. There was a major series of breakdowns about 60 years ago at this point, that actually led to municipal electric utilities being formed. So, right now in Texas, it’s not the majority of cities. 

But, for example, Austin controls its own electric utility. San Antonio has a quasi-public electric utility. So you don’t want to root for a grid failure. But it’s possible that if we have 100 degrees in a row for 60 days in a row, as we often do in Texas, that there could be major failures that are then politicized through this governor’s race. That can create another opportunity to fight back against crypto, because what are they doing for the people of Texas other than taking away our electricity that’s life sustaining for so many others?

William Saas: I guess I’m not familiar with the Texas grid in the same way that y’all are but, I know that in Louisiana, very close to y’all, our own grid and our own sort of energy infrastructure, and then our sort of environmental situation are both precarious and made then more so by lack of public investment. And wondering, seeing I guess, as you’re talking about that, Mike and Mike, the opportunity for even more intimately interweaving the the grid and the public bank as public infrastructures that ought to be managed by public officials. Which is a tricky thing, I guess, probably in Texas and especially in Louisiana, where it’s like, okay, so we’re going to make these public things. And then we’re going to hand it over to the politicians? We got to make sure to develop these robust and durable democratic structures at the same time as we’re advocating for these things. 

So yeah, no shortage of work there. I wanted to maybe ask y’all to close by sharing any sort of major takeaways that you have from your experience here. Thinking about your… maybe your experience with developing your own arguments in the face of the sort of swarm of Web 3.0 crypto bros. Anything you learned from tangling with them that you might share with others who might be interested in fighting that swarm when it comes to their city next. Maybe what you might have learned from collaborating with or learning from organizers in Philadelphia, and any through lines you see, or possibilities for developing a more national movement as they’re emerging right now? 

Mike Lewis: Want me to go first, Mike?

Mike Siegel: Sure. 

Mike Lewis: Cool. Yeah. I think that my final thoughts, I definitely want to make sure to give a shout out to local complementary currencies, too, we didn’t get to chat too much about that. But the idea that below the federal level, cities, states, any level of government can use its role as an active legal agent in the community. It’s taxing power, fees, fines, the settlement of legal disputes, all sorts of different ways, you know, granting of landlord licenses and things like that. We have the ability to increase the capacity of liquidity fiscal capacity at the local level, with local complementary currencies. Then bravo to the UNI proposal doing that exact thing at the university level as well. 

Really just being able to use local complementary currencies, like, you know, it could be an AustinDollar, for instance, or something like that. It could be issued with a digital wallet or a digital payment card or something like that. And really being able to… you could directly spin that into the local economy with direct job creation. Tenino, Washington did that with Tenino-bucks printed on wooden dollars, which is how they did it during the Great Depression. The mayor there busted out this printing press from the local museum, and during the beginning of COVID, started creating local complementary currency in Tenino-bucks printed on these wooden wooden pieces… a piece of wood, excuse me, and helping with local stimulus and care at the local level. 

That’s something that we can do at the local level. I think that there’s a lot of different steps that are involved with getting that accepted, of course, but it is definitely something that could be used to increase the spending in public housing or increase the spending on local arts and local community care and things like that. So just want to make sure to give a shout out to local complementary currencies. I think that the big takeaway from all of this is that the crypto industry is very wisely and cleverly utilizing the spectacle of culture to advance their project. I think that we would be very wise to understand why Austin is covered in billboards that say crypto is a peaceful revolution, or I don’t know, they say all kinds of wacky things. But you know, the point… or why they’ve put their name on all kinds of sports arenas and things like that. 

So. it’s really important just to understand that in order to push back against that, we have to have a counter mobilization, that does include how we make an impact in culture to get our project in advance of public money, and public institutions for care.

Mike Siegel: Right on, Mike. Yeah, I mean, I think for me a couple reflections. One, it’s actually pretty daunting. As a layperson, that’s how I would consider myself, to get involved in organizing in the space, because there’s so much terminology. And even when I would… after we wrote the op-ed, and I would talk to family members and friends. And there’s all these assumptions that blockchain is good and it’s better to move away from fiat currency. I mean, there’s all these kinds of arguments in the ether, that are hard to refute. I’m here with Mike Lewis, my friend, and he is pretty expert on this. It takes a lot for him sometimes to explain to me the different rebuttals for some of the bullshit arguments out there. So I think, first of all, we have to acknowledge that these things are complicated and daunting. 

It’s hard for people to engage with these ideas. So unfortunately, a lot of people probably just turn off their brain and be like, oh, that crazy crypto stuff. It doesn’t have anything to do with me. We have to somehow improve our public education, our outreach. Let people know that it’s not as complicated as they think it is. And it’s actually a bad idea overall. But the second idea, and to me is more optimistic, is that I think public banking has huge potential. Because basically it’s a different worldview. It’s not a worldview of scarcity. It’s a worldview of abundance. Right? So much of what we’re being told is that we can’t afford it. We can’t pay for it. But public banking makes sense. Like, here we are in this ultra wealthy city in Austin, Texas. Why can’t we afford enough housing? Why can’t we afford environmental programs? And even Texas? Probably Texas is more wealthy than most of the nations in the world. Why can’t we afford a good grid? 

Why can’t we afford public education? And so to me, public banking as a demand just makes a ton of sense. Like, why should we be letting JP Morgan hold our money? Why can’t we hold our money? And we decide who gets loans, and we decide where the investments go. And so to me, there is this overarching argument that that public banking kind of fills a void. And if we can get more people to embrace the demand, I think that’s really exciting. And then the last note, I just want to raise the specter of Elon Musk, who has moved to Austin, unfortunately. Has relocated Tesla from California, because he has so many racial discrimination and sex discrimination lawsuits in California, that he wants to move his terrible business to a different state. 

Now, Elon Musk is sitting in my backyard, threatening to take over my city here. We need to fight back. I do think this is going to come down… I don’t know how much y’all talk about class war on this podcast, but I really do think this is coming. We have this guy, that’s Twitter billionaire, whatever he is, and he’s selling this crypto and playing with the DogeCoin. Because he knows he’ll make money if he can trick everybody to buy some. I think all of these issues could come together in a major movement, because Elon Musk is on the wrong side of environmental issues, whether it’s through his support of Bitcoin, or what he’s doing with SpaceX, down by the Mexico border in Texas ruining a rare local ecology for his ships. If somehow we can unite these struggles– the environmental movement, public banking, even public education, and how do we pay for it? I think there is a lot of potential. So that’s what keeps me animated and excited about this. Even though it’s a steep learning curve to understand the issues.

William Saas: Austin is getting weirder and weirder in all the wrong ways. 

Mike Siegel: That’s right. 

William Saas: Mike Lewis and Mike Siegal, thank you so much for joining us and sharing about your work. The good work that you’re doing in Austin with us on Money and the Left.

Mike Lewis: Thank you all so much for having us.

Mike Siegel: It was great to be with you, thank you.

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

Place-Based Narrative Labor with Sonia Ivancic

Money on the Left 
speaks with Dr. Sonia Ivancic about the importance of regionally sensitive and affirmative storytelling in provisioning processes. Assistant Professor in organizational communication at University of South Florida, Dr. Ivancic is a community-engaged researcher, whose work on “place-based narrative labor” offers essential new tools for displacing prevailing scarcity logics and rhetorics of austerity with more capacious ways of thinking, arguing, and narrating.

Through embedded fieldwork with non-profit, rural Appalachian food distributors, Professor Ivancic has developed astute critiques of the narrative frames used by some grant-making non-profits as they paradoxically seek to address privation and hunger in Appalachia by perpetually framing privation and hunger in Appalachia as the region’s most salient and seemingly default characteristicsIn place of this “deficit-driven” characterization–which, owing to the ways that such projects depend on the grant cycle, is nearly always the dominant kind of characterization–Dr. Ivancic identifies and promotes an “asset-driven”mode of place-based narrative labor. With this asset-based approach, the provisioning process affirmatively calls attention to and works to expand the capacities and potentials of a given community, honoring the dignity of particular communities, while opening political imaginaries to include new metrics for collective flourishing and renewal.

In our conversation, we extend Ivancic’s theorization of asset-driven place-based narrative labor to rethink the challenges and potentials of a Federal Job Guarantee under a future Green New Deal. We also draw rich parallels between her account of narrativity in local provisioning and conceptions of macro political economy in Modern Monetary Theory and other heterodox traditions in political economy.

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Music by Nahneen Kula:


The following was transcribed by Mercedes Ohlen and has been lightly edited for clarity.

Scott Ferguson: Sonia Ivancic, welcome to Money on the Left!

Sonia Ivancic: Thank you for having me. I’m excited to be here.

Scott Ferguson: We’re excited to have you. To begin, could you tell our audience a bit about your personal and professional background? How did you come to pursue your present research and pedagogical work in Communication Studies and in organizational communication in particular?

Sonia Ivancic: I’ve been thinking a lot about that question and just in the context of what we’re talking about today, and how many different ways you can story, your experience or my experience or my way of coming to this. So that’s just a side note that that’s been something I’ve been thinking about. But for me, personally, I grew up in Seattle, my parents are actually from Hamilton, Ohio. So it’s not Southeast Ohio, but not too far from where I did a lot of this research. My mom was raised by a single mother and was a first generation college student, she grew up pretty poor. She worked in early childhood education, she ran a child care center, at one point, taught special education, helped support high risk mothers. And then my dad is an architect. And so this is one of those jobs that is very affected by the economy. 

The reason we moved to Seattle was because all the architects in Albuquerque were getting laid off. And so we had to find a region that was having a boom, and was doing a lot of building. And I was four when we did that. And then he also was laid off for a relatively long time, during our most recent recession. So this is all to say that, because of this, I think conversations about work, and child care and poverty, were kind of routinely talked about in my house growing up. And then a lot of my research is around food, I would say food is a major love language for my mom. But so with all of this in mind, I went into my undergraduate degree at the University of Puget Sound, which is in Tacoma, Washington, and thinking I would get an MBA eventually. I was very entrepreneurial child and I really enjoyed finding various ways of selling things as a kid like ice cream, or like garage sales, or coffee cake. 

And so it was kind of this creative outlet for me. So I was like, oh, yeah, I’m gonna get an MBA, because I have this sort of history or thing I like to do. But I sort of accidentally happened into a class in organizational communication. I took a class called “Work Discourse” by a professor who later became my advisor, her name’s Dr. Renee Houston. And that really kind of changed things for me. I found I was really interested in wading into conversations about how a communication perspective can help us think about organizational issues like voice, power, control, dignity, and so forth. So I found I was less interested in finding ways to effectively manage employees and maybe more interested in why people talk and act in certain ways in organizations, and what does this do to people and to communities? And then how can we do it better? How can we create a world that’s more just? 

How can we create work, or an understanding of work that is more edifying for people? So broadly, my research is guided by a question: how do the ways we talk or the stories we tell perpetuate inequities, or open up spaces to promote equity and center marginalized voices? So I do both organizational and health communication research, I would say maybe the central themes running through my work are food and community organizing, as one, two would be discourses about the body or about work. And then three would be equitable and inequitable workplace practices.

William Saas: In answering the first question, you’ve signaled or anticipated where we’re going to go for the second, which is to your theory of “Place-Based Narrative Labor.” You started by talking about being from Seattle and family from Ohio. I’d be interested to hear other versions of that story, or the way that you negotiated that narrative, finally, for yourself with regard to the places that that you’ve been based. But before we get to that, could you tell us a little bit about what you mean by “place-based narrative labor” and why it’s so important to you? 

Sonia Ivancic: Yeah, so I’m gonna think I’m gonna start by talking about the context for the term, and then I’ll kind of get into what it means. But I think first one of the things communication scholars talk about is how nonprofit organizations specifically have to do,  rhetorical work to achieve legitimacy. They have to make arguments about what they’re doing, why they’re doing it, how successful it is, what the impact is. And they have to some, to some extent, tell and sell the story to people who will fund them. So this storytelling involves often telling stories to others, or telling stories about others. Like those they intend to help, oftentimes without input or decision from the people that are being depicted in the stories or images, right. So think of those commercials you often see of childhood hunger, that really depict others, and ways that we might be all familiar with, you know? 

So I’m building off of someone named Sarah Dempsey and her term “Communicative Labor”, where she talks about how nonprofits can often marginalize or misrepresent their typically vulnerable stakeholders, because they’re trying to cater their stories to the people who funded them. And this is usually an audience of privilege donors. And so the premise of a nonprofit is always that they’re making some positive contribution. But a critical Organizational Communication scholar might remind us or ask us to think about how they’re also always political actors as well. And so we might ask questions, like what stories are promoted by these organizations and whose interests are served through their work and through their storytelling? So it is sort of through both this context of the literature, but also through my ethnographic fieldwork, that I came up with this term of “Place- Based Narrative Labor.” 

So after kind of deep involvement and engagement with this organization in Southeast Ohio, called… or that I will call “Collaborative Food Strategies”– that’s a pseudonym– But this concept really evolved from seeing how the people there, talk and tell stories at the organization, how do they tell stories about the people and the place that, that they exist, and that they, they serve people in? And so it’s kind of my attempt to name something that I saw them doing and explain it’s significance, really. So what is “Place-Based Narrative Labor”? So I call what they do “Place-Based Narrative Labor”, which is the work of creating, maintaining and propagating narratives, or in this case, often counter narratives of place. And I call them counter narratives, because there’s sort of a typical dominant narrative of Appalachia, that is negative, deficit based about the problems in the region, and they sort of want to flip that and talk about what’s possible, beautiful, prosperous about the region. So they use these narratives about place to positively impact the region and the people there. 

And then when I say positively impact, I mean, both materially and symbolically so how can they change how people think of the place and the people there? And, also, how can they literally change that place, people’s food access, the type of food that people eat, the food knowledge and food skills that people have? So it kind of creates this space for the community to imagine what kind of future they want to create together. But it doesn’t mean downplaying or ignoring struggles or hardships and I think that’s sort of an important component. It means actively engaging and confronting these hardships and struggles and kind of dwelling in them, but never losing sight of what’s beautiful or possible or powerful about the place that they… that they are. So they draw on things like communal responsibility and collective strength. 

They reframe wealth, away from money to think about the natural resources that are there. The knowledge that people have the fact that people have been saving seeds there for hundreds of years, and things like that. So it’s it’s sort of this embodied emotional-lived interactional activity. It’s, it’s not just branding, or how they market themselves on their website, I think the value of ethnographic research is that you can be there to witness to see to hear the kind of in person interactions that go on at the organization. And so I saw them really, in their workshops at the farmers market, at the produce auction, sort of living this and taking this on as a daily practice.

So one of the important questions that brings up is what is placed mean? Who gets to decide? And I think engaging these questions is an important ongoing tension for the organization. Right? And that it may matters for all these reasons, right? So it matters in this specific case, because it’s trying to flip the way that they talk about Southeast Ohio is one of my participants specifically said, they’re trying to change other people’s ideas. But also, in general, and nonprofit organizations, whether they’re aware of it or not, are constantly telling stories that frame places in certain ways. Nonprofit organizations are already doing this work. I think the question is, how aware or mindful, are they about how they’re doing it? And that these stories impact how people see themselves, they impact how places understand what is possible, right? In that space. 

So they’re not just a reflection of what is, their constitutive and generative and their chosen, right? So it’s important to be mindful and consider: what are these stories doing? How are they acting to some degree? And then the other thing I think this brings attention to is that this storytelling is work, it’s labor. People were asking questions about how to tell these stories and wondering what the impacts of doing it in different ways was, they were taking it on as part of their jobs. And so I think a lot of times, the communicative work that we do in our jobs is incredibly important. We all do it to different degrees and in different ways. But we don’t necessarily name it or talk about it or value it, you know, kind of in the way when we talk about emotional labor, that you’re not necessarily paid for that. It’s just something you’re expected to do. And I think communicative work is a lot like that at times.

Scott Ferguson: Yeah. And the term that sometimes gets thrown around: “immaterial labor”– somehow doesn’t, doesn’t cut it. What you’re up to is much richer, and it affords us a lot more understanding about what’s going on.

Sonia Ivancic:  I appreciate that. Yeah, it doesn’t feel like it quite cuts it right? I think calling it immaterial, almost takes away some of the force of it or something, right? So I think creating food systems that are more just and equitable and cooperative and environmentally responsible requires creatively telling new stories and thinking critically about the role that these narratives play in accomplishing some sort of social change.

Maxximilian Seijo: And so then, as you already alluded to right, along alongside right, thinking about these sorts of narratives, right? You you have a particular concentration, geographically, and a lot of your research focuses on the Appalachian southeast region of Southeast Ohio. For our listeners, how would you characterize this region socially, historically, environmentally? And what drew you towards studying this region beyond what you’ve already mentioned with regards to your background?

Sonia Ivancic: Yeah, so I’ll talk about where I was with Southeast Ohio, which sits at the foothills of the Appalachian Mountains. People often talk about Appalachia or Appalachia… it can be pronounced different ways. Which is actually a very large, diverse region of I think over 13 states. So I’ll talk specifically about Southeast Ohio, which is this very lush, vibrant, beautiful place with hills and caves. Unlike other parts of Ohio, it has a relatively large number of farms that grow diverse crops. So oftentimes, like my visits to Ohio, when I was a child, visiting my extended family, we’d see a lot of these flat landscape and mono crop cornfield farms. And that’s not what you find in Southeast Ohio, I guess, actually, because the soil is not as rich. So interestingly, the less rich soil kind of creates this opportunity for farmers to grow these diverse farms with lots of diverse crops. 

And Southeast Ohio land that’s a lot cheaper than many other places. So I think because of all these things, it has this very vibrant regional food scene of local food growers and local food producers. And then a rich practice of home gardening, home canning, individuals who have saved seeds, like I said, in their community for hundreds of years and in their family for hundreds of years. And then kind of in contrast to that, or in conjunction with that, it also has what people call a history of extraction. And so it has this history of companies coming into the region– So coal mining, and brickmaking are really good examples– And then they come into the region and they create what is maybe the backbone of the economy. And they create these towns that maybe were once these thriving places. But when the resources ran out, or became no longer profitable for the companies, or whatever various different reasons, they left, kind of leaving this large environmental damage and their weak, leaving people who had once had good jobs with no opportunities for other jobs. 

Because they, you know, it was one of those sort of singular economies where it’s not, it wasn’t diverse in terms of what kinds of careers you could have. So and then, because of all of that, and Southeast Ohio also has a rich history of labor organizing and resistance against these corporations. So it’s kind of, you know, multifaceted, it’s many things. There’s currently a big anti-fracking movement that’s being organized in Southeast Ohio that I was really surprised to find out about when I moved there. So and then in the midst of this vibrant food system, and because of these lack of jobs that don’t earn people living wage, and due to how rural the region is, you have very high rates of poverty and food insecurity. 

The county that I was in routinely had the highest poverty rates in the state. And that can fluctuate year to year. So I don’t know if it’s necessarily currently true, but was something that often happened in the region. So I happen to live there while earning my PhD at Ohio University. And so partially, what drew me to the research was I, you know, I was there and around the place, and I got to sort of witness and see what was going on. But I think more than that, what I saw was this community, and this organization, responding in creative ways to some of these large societal problems that we have, like hunger, or a food system that damages our environment, and places a lot of the control of our food resources in these very few corporate actors. 

So I saw them sort of responding to these things differently. There’s a lot of critiques that can be made of our current food system, and also how we organize food assistance, in ways that tend to mark people or isolate them rather than create connection or community or inclusion. So food pantries are a good example. And a lot of our programs like food pantries, kind of presume that food insecurity is this natural inherent state of being. And so we build infrastructure for programs around emergency food assistance, kind of presuming this is normal, natural, and we’ll always have it, right. So we build this huge infrastructure of charity and emergency food, because we kind of presume that hunger is just a natural state of being.

But there’s a lot of research that says we actually have plenty of food. So the problem is not necessarily whether we have enough, it’s about things like allocation, access, profit margins, right? So I was kind of interested… there’s a lot of critiques that can be made. And those are really important to do. And that’s important work. But I was like, Can I find an organization that’s taking a different approach, you know, planning for long term solutions based on maybe the possibility of equity and justice rather than presuming that we’ll always have a community where people are hungry. Plus, I have this commitment to community engaged research and so both contributing to but also learning from the work that people are already doing in our communities is something that’s important to me as a scholar.

 So doing this project, where I lived also allowed me to have a really deep commitment, and involvement to that work. So with this stuff in mind, I was kind of just witnessing and noticing what was going on. I did some research with a fundraising event, you know, that ended up leading more to critique because I saw them labeling. The event is very communal and inclusive, and everyone’s doing it all together. But the ticket prices were very high, right? It was really exclusive and really hard to get a ticket. It was a very public event that happened in the public town square, like one long community table yet, you know, a lot of people weren’t included or invited. 

And then the whole thing was raising money for food insecurity, yet that was forgotten, I think, in the process of the event. So in doing all of this, I was kind of like, well, what else can I find and what else can I see? And that’s what led me to this collaborative food strategies.

William Saas: So continuing with discussion of Collaborative Food Strategies or CFS, much of your focus on them and other regional nonprofits is on their unconventional, quote unquote, “asset-based narrative approach” to community engagement and funding. And this is in contrast to what you identify as the dominant deficit narratives. And you mentioned before of course, we are interested in deficit narratives here at money on the left. And these deficit narratives are interesting or important in your work, especially as they’re promulgated by most of the contemporary nonprofits that you look at. So can you walk us through both the asset-based and deficit based narratives? The strategies, how they differ and why these differences matter?

Sonia Ivancic: Yeah, absolutely. So, um, let’s maybe start with the dominant deficit narrative. And I’m saying dominant because I think our story in our story about Appalachia, that’s what we tend to think of that what that’s what becomes dominant, right? So this narrative is circulated in media. It’s used by nonprofit organizations to earn grants. And it’s what most people outside the region think of when they hear the word Appalachia, so things like poor or lacking resources. People are described as hillbillies or lazy are that sort of a thing. And then there’s all the data to back it up. So I mentioned the poverty and food insecurity data in the state, which is often the case that nonprofits used in order to garner funding, right? 

Like, look how poor we are, look how high of food insecurity we have, we need this funding, right? So deficit narratives can, for nonprofits, produce funding, legitimacy, proof of need. So they can be very fruitful in that sense, people are moved by stories about how poor or desperate or in need a place or group of people are. And then there was this talk that I noticed when I was doing my ethnographic work of competing for most food insecurity, or poorest or, you know, they talked about this almost as a discussion of a race to the bottom, because that was a path to resources, grant money, and so forth. So one of the board members explained this as pride in the race for last place. And that showing you could do a lot with very little are showing that you had the biggest struggles kind of bolstered the case for nonprofits as they apply for funding or legitimacy. 

So one of the issues that can happen is that when the grants you’re applying for and the funding sources become attached to this negative depiction of the region, right, in order to get money, you have to then be the poorest. So how do you ever see your way out of that? This money becomes attached or dependent on this lack on the deficit. And that makes it really difficult for a community to become something otherwise. So that leads me to this asset-based perspective, which stems from questions about potential. They redefine wealth to include a myriad of assets outside of financial assets, which they don’t have a lot of, right. So they talk about strength, resilience, abundance, the wealth of the region, that is the, you know, the trees that allow them to tap for maple syrup, the mushrooms that they can forage for, the people who have, you know, long histories of knowledge about farming and gardening and canning food and things like that. So it’s different in what aspects of place it draws attention to.

 It’s not, as the executive director said, it’s not delusional. It’s a story rooted and lived experiences, it is real. But instead, it says it looks different than maybe what you’re expecting. And they leverage these communal resources, like bringing people together to highlight what the wealth is. So I think one of the interesting things about  place-based narrative labor is that it takes this asset-based approach, continuing to circulate these deficit narratives to garner short term funding, which might be good in the short term because you get a grant, but it ultimately undermines the organization’s goals, things like building community resilience, or creating a strong local equitable food system. So in order to create community resilience you need to understand what makes or can make the region abundant, durable, adaptable, right? And that means letting go or reimagining those deficits to some degree. So CFS recognized, I think, the temporality of this–you can’t depend on the deficit. 

And part of what they’re getting at is: Why would you want to, when you’re rooting your reason of being and your image of the future’s place to always having a region where people are really struggling to access food? Long term? Where does this take you? Right?

So I think one of the things I emphasize is that we’re all telling stories all the time. And that, to some degree, these stories are chosen ways of viewing the world. So neither one is necessarily right or wrong. They’re both accurate to some degree, but they do different things in the world. The deficit mirror narrative is very much over simplified. And it also struggles to create a story of where to go in the future, right? Whereas the asset-based narrative allows you to create a theory of social change. An image of who you want to be and where you want to go. It helps you see possible ways of getting there, right, because it calls for possibility and potential instead of lack deficit, what we don’t have, how poor we are, how hungry people are. So I think those are kind of the differences. And also the reasons why they choose that asset-based approach.

Scott Ferguson: Seems like there’s a connection to between, you know, your critique of the infrastructures around food scarcity, that sort of presume, a kind of endless, natural state of hunger and poverty, and this asset versus deficit approach, right? So not only does the deficit approach, kind of reify, lack and a lack of not just wealth, but dignity and validity. But then also, it seems like in the same breath, it’s in our imagination, putting these regions and these communities into this kind of state of nature that, you know, we can try to as long as there are some rich, you know, wealthy donors who might put, you know, help you out for a few months, you’re going to be okay, but then you’re going to just sink back down to this natural state that we all assume.

Sonia Ivancic: And you never want to use those resources to take yourself to a place where you’re no longer poor, because then how do you get future resources, you kind of get stuck in that. And yeah, I think that’s absolutely the case. And with a lot of these charity models, we kind of build an infrastructure around the charity, and this idea of a charity model, and it creates this very short sighted vision in which we can’t see our way out of that, you know, I think most people, if you ask them– and this has a lot to do with the ways that we talk about poverty and poor people– but if you ask most people, they don’t want aid or assistance, you know, that makes them feel ashamed. It makes them feel embarrassed. Again, like I said, it has a lot to do with the ways that we talk about aid and assistance. But so I think we we commit to these models, where we then are not envisioning a way out of them, or something more just and equitable, and something that a lot of people I think, would prefer.

Maxximilian Seijo: I think this is a nice moment to shift into perhaps more of a longer question that that I’m going to read, and that I think is trying to then make some connections between what we do on this podcast and our intersectional MMT framework and your work specifically. And so one of the reasons why we invited you two on Money on the Left to speak with us is that your theorization here of the asset and place-based narratives, right, as opposed to this deficit as in a sort of deficit of people, right? Or in the sense of people having food scarcity or a scarcity narrative for this particular region that you’re discussing is that these ways of looking at places complements and also complicates some of thinking in the MMT movement about public spending. 

So particularly with regards to urgent projects we support like the Federal Job Guarantee, and the Green New Deal. So MMT economist Pavlina Tcherneva, for example, advocates for a job guarantee that routes federal funds through nonprofits, which already have local knowledge about the needs and values of particular communities. In your writing, however, you newly sensitize us to the very different ways in which this process can be mediated. So we at Money on the Left share your conception of language and narrativity as generative rather than as neutral or descriptive. We regularly extend this assumption to the words, images, and sounds that give shape to money, understood, not as private zero sum exchange, but as constitutive and contestable public spending. Before discovering your work, we have not yet adequately considered how deficit storytelling within particular organizations and communities could undermine what are otherwise robust public spending projects. 

So granting that your case study involves organizations or communities largely abandoned by federal and state legislators, right, which is where this deficit narrative that you’re discussing, right, comes into being.This sense of scarcity and abandonment. We’d love to hear, though, alongside how your research might contribute to this then progressive fiscal program that thinks of deficits in a different way, right? public deficit spending, so an MMT, right? The public deficit is the private surplus. And so there’s, there’s this sort of balancing of deficits or where the deficit narrative exists, and we’re wondering if maybe you could just, you know, weigh in and and see what, how your research might contribute to this vision?

Sonia Ivancic: Yeah. So I think, a couple of things, one of the things I just thought of, as you were talking was this idea that, you know, we, we presume, or name or categorize something as deficit, when we could be asking maybe other different questions like, what is there? What do we have and what can we create? And then the other thing my research talks about is because of deficit storytelling we undervalue the things connected to that. So we undervalue for example, in my case, the people in places attached to Appalachia or Southeast Ohio, we undervalue urban neighborhoods that we labeled blighted, right? So in some ways, I think, we should reconsider that and think about how these places are actually full of potential, and have a lot to teach us. People love their communities. 

Oftentimes, I think I had a participant say something to the great degree of, people don’t look at your neighbor and say, “what a pathetic life you have,” you know? But the experience of living and being in a place as much different oftentimes then an outsider’s perspective of what that is or what it’s like. And so if we’re not from those places, we need to be careful coming in and telling people what to do or how to fix things, or presuming that fixing is even what needs to happen. So an asset approach might focus on harnessing highlighting, creating, or illuminating, instead, maybe. 

So I would say that these community members and nonprofit organizations and in Appalachia, and I’m sure in other places as well have a lot to teach, you know, everyone about how we navigate different symbolic and material resources. People love the region, they want to stay, but people tend to really struggle to find work that is engaging, or allows them to feel a sense of dignity or purpose or pays them a living wage. And so that was kind of a routine conversation that happened when I was there, you know, I had, and this was both for people at the organization, but also the people that they serve. So I had a participant tell me we’re not creating the right kinds of jobs. And so she talked about how you know, you could easily get a job at Dollar General or fast food, but that doesn’t pay you enough to live on. And a lot of these jobs are part time, so then you’re also don’t have really enough to live on and you don’t have benefits, right? 

So I guess ultimately, I think investing money, and jobs and resources into these different areas to kind of lift up what they’re already doing and allow them to do more, could not only benefit the people inside the region, but also the people outside of it, right, because they’re doing a lot of creative, engaging things that we have a lot to learn from. But one caveat, is just that these resources have to be permanent and reliable. And when creating these programs, I think a lot of work would have to be done to gain trust. And this has a lot to do with the context of extraction in the region that a lot of people have experienced. 

So booms and bust, promises without follow through, the government is storing fracking wastewater in a national forest there. So things like that create this distrust of like, you don’t know if you can trust people to say what they’re actually doing, or that they have good intentions, or that something will remain or be consistent there. So I’ve heard of people in a town saying no to a grant, because they weren’t sure that the source of the grant was going to give them local control over the decision making. So I think it’d be interesting to think about. You can take an asset-based approach and creating these programs and doing this, but really do it in ways that create trust and give local people voice and control over the resources.

William Saas: The tendency toward the deficit narrative is, you know, usually in service of making a compelling argument for additional resources. And I’m trying to–as we’re having these conversations, or we’re talking through these different elements of your work–I’m wondering how much of it maps on to macro, national, federal-level policy discourses. I’m thinking right now about the inverse of what we’re talking about–where a program is working well, and the deficit narrative sort of disappears, but also there’s no sort of alternate asset narrative that appears and affirms a situation. If there’s not a problem, if there’s not a deficit, if there’s not a lack, then there’s a tendency to forget about and then take for granted that that is now the equilibrium state of a community. 

And that seems to be why that perpetual deficit narrative is maybe assumed by these organizations, nonprofits and things. And I’m thinking about it in terms of national policy related to, for example, public health responses, where as long as there’s a deficit of care, we will intervene. But as soon as we feel like we’ve addressed that we will disintervene or disengage and then only intervene again, when the deficit becomes unavoidable in our daily lives and consciousnesses. So the question is, do you feel like what you’re observing on the community level is abstractable, or applicable, or if there’s an analogy with the broader national federal policies and programs?

Sonia Ivancic: Yeah, I think that’s a really good question. And I think you’re, you’re right, right, that the deficit narrative almost shines a spotlight on what we need to focus on what we need to look at or fix. And then, you know, we allocate resources and then kind of turn away and ignore, right? I think, you know, I mean, there’s a lot of ways I guess you could think about this question, but it makes me think about how a lot of our funding and our projects are very temporary, you know? You might get a grant for three years to start a local seed saving company. And then after those three years, you know, does the company go under? Do you frantically try to write more grants to see if you can sustain that? What do you do? So, it just makes me think about how, to some degree, these things need to be categorized as permanent.

Food. Is food something that you profit off of? Or is it something people have a right to, right? Is food a public good that we should all have access to? And so I don’t really have a solution to your question, but it makes me think about how we write grants and how we write policy and the things like the time limits and conditions and those sorts of things on them, instead of maybe looking at looking at something as permanently important, and really investing it in it in that sense. Because what we have is a lot of these nonprofit companies or organizations constantly putting so much work and effort into just like getting money. That’s important work. And that is a skill that people honed over many years. But to some degree, is that the best use of their time? 

You know, could they be doing a lot more if they didn’t have to worry about that as much? I think proving that what you’re doing is valuable, and that it is actually benefiting people is important. So accountability is important and good. But just think about how much time they’re putting into  just maintaining this very low base of funding, and how much more people could do if they didn’t have to be concerned with that as much.

William Saas: Could it be that we have better ways of measuring and demonstrating scarcity, and lack, and deficiency, and deficits, than we do have for accounting for and affirming abundance and plenty? 

Sonia Ivancic: Yeah, like, how do you measure possibility? You don’t have a measurement of possibility and imagination. So I think that’s a really good point. We’re very good at measuring lack. Do we have low or very low or marginal food insecurity? What are people’s incomes? And a lot of these numerical categories drive a lot of our policymaking. And I think if you were to go on the ground, and interview people and talk to them about their experiences and what they want, and what is possible, I think we could create something much more fruitful.

Scott Ferguson: So I think what I’m hearing is that there’s a temporal dimension to this deficit narrative mode that’s naturalizing, right? So we presume lack over the long term. And then try to do something about it by writing grants. But we could actually start with different narratives, not only, you know, in the communities themselves, but right in our macro political economic talk, right? We could talk about rights, we could talk about food rights. One kind of wonky term, but I think I think it works here is what we on this show, and in Heterodox Economics, we’ll talk about automatic stabilizers, right? So we have automatic stabilizers, we just don’t have enough.

We have unemployment benefits go up when there are less jobs and that happens automatically. Congress doesn’t have to have a big battle about it, unless there’s a pandemic or something like that. And it just happens, right? So we could have all kinds of ways of allocating credit that mobilizes resources to employ people or to invite people to participate in the ways they want to in their own food abundance and security. What’s neat here is you’re teaching us and opening up connections between a lot of what we think about at the level of macroeconomic talk and yeah, these local levels. 

I want to circle back to a question that we actually just skipped, but I actually like how this is unfolded. Anyway, I want to come back to this organization that you’ve given this pseudo name to: Collaborative Food Strategies. Can you talk a bit more about this organization? Who are the people who are involved? Beyond just this asset approach, what’s their background? What are their values? And then also, as you’ve mentioned, you did over a year’s worth of participant observer engaged community research as a scholar, and you know, as a PhD student, so you’re sort of of the community but also studying it. 

Sonia Ivancic: Yeah, I’m happy to talk about it. So CFS is a really small organization. And they’ve been around for over 30 years. They currently try to create community food security and resilience by investing in the food resources that people grow and produce there and by making fresh, high quality food available to people who lack access. So we can talk a little bit about the history if you’re interested in that, but they started doing different things and this is kind of where they’ve ended ended up and what they do now. So they try to foster communities where everyone has equitable access to healthy local food. I would describe their work as connecting people to food resources and networks, and to individuals with food skills to increase food knowledge and food access. 

They do all kinds of stuff, so I’ll just list some of it. They host seed giveaways, where they give seeds away for free. And you don’t have to meet some sort of metric, you just sign your name down and put your email down. And you can get free seeds, free potato seeds. They host seed swaps, where local seed savers can trade or sell their own seeds. They run a workshop series, where they ask people in the community and sometimes the executive director, or one of the people who works there, or a board member, but a lot of times it’s you know, just someone in the community will run a workshop on how to inoculate mushrooms. Or how to tap trees for sap. Or how do you plant a pollinator garden or canned food or various different kinds of things like that. They run community school gardens. 

One of their main programs is called donation station. And they have a tent at the farmers market. And then there’s a produce auction that is run by a different nonprofit in collaboration with farmers, and a lot of them are Amish farmers in the area where they auction off produce. So they set up a tent at the farmers market and the produce auction and they collect money. You can donate money, you can donate food that you’ve bought at the farmers market or auction. You can donate food or produce from your garden. So people will come and have a bunch of extra, you know, zucchinis was a thing people often have excess of have a ton of extra zucchinis. “Do you want them?” 

Then they use that money to buy food from the farmers at the market or at the auction. So how can we help people who need access, get access to fresh foods, but also how can we do that in a way that invests in the farmers and food growers and producers that are here? So then they hold a distribution once or twice a week, depending on the time of year. And we would haul out all the food. And people from local organizations, whether that be pantries, schools, people would take food back to the library sometimes. Would take it back into the county we’re in and also four or five surrounding counties. So it gets at this idea of when you’re doing food access stuff in a rural area, you really have to think about how are you bringing the food to the people who need it, rather than expecting them to travel to you. So yeah, they also ran a small seed company when I was there, which I think that project is on pause now. 

But they’re investing in the regional food system. They’re uplifting it and highlighting it and expanding on it through education and these shared resources. So their vision is to create a resilient region in which everyone in our community has access to an equitable, inclusive, and thriving food system. 

So then you asked who was involved. It’s a very small organization, there’s maybe five to eight employees depending on time of year and type of grants they have. Many of these workers are AmeriCorps volunteers, probably about half. And so AmeriCorps volunteers are federally funded and receive a very meager stipend. And I don’t know how much the executive director makes, but it’s not a lot of money. And so the woman who ran it when I did my research there, said, when she first got her offer, she was trying to negotiate her salary, and learned through the process of that negotiation that the organization barely had enough money to survive and was in dire financial circumstances. So from what I understand, she got them to a better place. But the point is that the people who are there are people who care a lot about about environmental justice, food justice, growing food and food production, community resilience. They have a lot of skills and passion, but they’re not paid very well and so they don’t tend to stay very long. Maybe a year or so after this data was collected or less, the entire organization turned over. And so I no longer personally know anyone who works there and that seems to be relatively common. And I think it’s because, you know, they’re not able to pay people to stay very long. The AmeriCorps workers are there for a year or so and then move on. The Executive Directors may be there for a few years and puts their heart and soul and all of their time into the organization, and then usually needs to move on to other things. I remember the executive director talking to me in our interview about how long she could stay viably, you know. And I think that’s a pretty kind of common and routine thing. 

So that’s who the people at the organization are what they do. You’ll have some people in the region who do these AmeriCorps jobs kind of over and over again, and maybe at different nonprofits, a lot of the people are either people who live in the region and are from there, or are students who recently graduated. So that tends to make up who works there. And then I can talk about my experience doing research, which I would say was a really amazing and special experience. I have a lot of gratitude to the individuals for welcoming me into their organization and community and just for the work that they do. 

I got into the field or into the site through a friend of mine, who knew the executive director, and we scheduled a meeting. And we kind of co-created what the relationship might look like in terms of my involvement with the organization. And I was very intent on not conducting what they call “helicopter research” where you, you know, land down and collect your data and sort of use people and then move on and don’t contribute anything back. And this is really common in the region, because there’s a university there. And then it mirrors what people have experienced with the industries and extraction. And so that’s something to be really mindful of when conducting research there. 

There was a different project I wanted to do where I wanted to interview women Appalachian artists, and once I mentioned IRB and research, the woman was not interested anymore and wouldn’t connects me to the participants. And so I think this idea of the people are vulnerable to being researched a lot, and maybe not always in respectful ways–this was something I really wanted to be thoughtful about. So we talked, I talked to the executive director, and I volunteered a lot–over 200 hours. I went to every event that I could attend, and I wrote blog posts for them about their workshops, and, you know, took photographs to go with the blog post. 

And so I ended up being able to really develop relationships with the participants. And by the time I interviewed them, one on one, I knew most of them really well. And that was hugely beneficial just for their comfort, their willingness to talk to me, you know, or willingness to share things with me or be honest, you know? And then I gave a final presentation with a few of my findings at the very end. So, you know, in the work involved, all kinds of things that we don’t typically think of as academic work, like packaging dirty potatoes and like rotten vegetables that smell really bad and beautiful vegetables like huge cabbages and going to produce auctions and farmers markets every week, giving seeds away watering gardens and things like that. So yeah, it was a fantastic experience. And I’m kind of in awe with with what they do there.

Maxximilian Seijo: I’m reflecting on where this conversation has led to, and I think there’s some interesting themes that come out for me. Particularly in the way you describe how, you know, the the employees and and who runs this nonprofit, how that structure is working. And in a temporal sense to bring it back to that. Because right, the AmeriCorps volunteers, of course, there’s your federal policy that’s been actively mediating these types of investment and this labor that’s going into addressing, even in the model, the deficit narrative, and its own terms. But shifting to the more asset-based approach, as you have said and, you know, Scott mentioned automatic stabilizers. It reminds me of this macro discourse around the business cycle, which is this idea that, there’s boom and bust, as you said, and the economy’s going well, and then it’s not. And then that’s when people need to come in and address things. And that’s when intervention needs to happen. And we keep circling back to that, but it’s interesting to think about in ways that are really austere still, but, you know, potentially, that these AmeriCorps volunteers are, you know, there’s the kernel of a model there potentially, to think about what a type of permanent investment in the assets of a community might look like. And I think this is where we highlight the Job Guarantee and the Green New Deal as policies that do install a rights based approach. That, you know, eschew the model of business cycles in favor of a sort of permanent infrastructure approach. Which I think is aligned with this asset-based approach. 

So framing where we’ve gone in this temporal sense, that feels like a really important, both, you know, critique, but also positive articulation of what could be done through what is already being done. 

Sonia Ivancic: I think that makes perfect sense as you said it, thank you.

Scott Ferguson: In your writing you mentioned it’s not all hunky dory, right? There’s the asset-based narrative approach, and then the organization that variously employs it, and tensions come up. And I’m wondering if you could tell us about some of those tensions.

Sonia Ivancic: Yeah, so I named two of these tensions, named them “food dissonance” and “concurrently contending with hardships.” So this idea of community based organizing tends to be really romanticized and glorified. And that’s really common, I think, especially with community garden type initiatives that, you know, we kind of glorify that it’s automatically good without thinking about some of the complications of it. So communication scholars talk about how organizing, especially nonprofit organizing is inherently filled with tension. Because you have to simultaneously achieve some sort of goal where you’re fulfilling a good or need, while at the same time writing for funding and arguing for funding and that sort of thing. And that one is profitable or gets you funding isn’t necessarily always in the name of achieving your mission.

So, with the food dissonance, I talked about how there’s moments of dissonance between what food the organization provided or emphasized, and the food that was kind of discursively connected to the region or of the region. So, for example, the region has a very long history of hunting and things like that. The organization used to have a mobile chicken butchery unit, which I learned about through one of my interviews. But a lot of people got the impression that the organization was encouraging vegetarianism. And basically, they were like, we feel like you’re coming in from the outside, and telling us how to eat, you know? And this happened for a number of reasons, there was a different nonprofit that didn’t do that, that sometimes people would confuse them with. 

But then other cooking demonstrations were all produce. And most of what they provide is  produce, and they don’t provide meat to people. They do do eggs and things like that, but but it just sort of raised these questions about “what does place mean, and who gets to decide?” So this concept of place itself is riddled with dilemma. Because there’s no singular meaning of place, there’s no one authentic meaning of place. On one hand, you had people saying, you know, “‘no, meat’ is in another region. And we need to, you know, that needs to be a part of our programming, because that’s something that people in this area care about.” And if we want to have a better sustainable food system, we need to think about hunting and things like that, because that’s a more sustainable way of accessing meat. And vegetarianism isn’t of the place. 

On the other hand, you had people who worked there who are from another region, and were vegetarians and vegans. And so it’s this sort of complicated thing about like, who gets to decide and who gets to make these choices about what place is, and then that’s sort of an ongoing conversation. It’s not a static finite thing, and not everyone is necessarily going to agree, but you need to grapple with those tensions. 

Another food dissonance tension was about what foods CFI or CFS offered. Because they made the choices when they were donating food about what people had access to. So questions about choice and, you know, did people feel familiar with that food or recognize it or know how to cook it and that sort of thing. They didn’t just respond to what people wanted. But the organization itself was actively participating in cultivating certain habits, or making certain things available and not others. 

And sometimes this had to do with funding sources. So it sounded really good on their grant applications, if they could say, for every $1 you donate, we buy a pound of food. And so when we were making our purchasing at the market, or the auction, thinking about weight was something we did you know, and so can we buy things that were heavier? And then can we do that to offset buying some of the other things that people really like or want to eat, that maybe aren’t as heavy or more expensive? Strawberries or peaches are expensive and not as heavy. Whereas potatoes or watermelon, or something like that was very helpful for that ratio. So there are these tensions of the organizations grappling with. And I think there is also something to be said for being able to provide more food, right, rather than if you buy all strawberries, you’re not going to be giving away very much food, nor can you subsist on strawberries. So that was one of the tensions. 

And then the other one, I called “concurrently contending with hardships.” And this just talks about that tension of you’re taking an asset-based approach while you’re simultaneously working to address local challenges. So as you notice, just in my story of the organization and of the place, there are deficits there, like that turnover. Maybe it brings in creativity but ultimately isn’t serving the organization all that much. They would be better served if the executive director and all the employees had a living wage and, and felt they could stay if they wanted to. So they have to work toward this vision of a better world while accounting for what is there, and the injustice is that are there. And so hearing stories about food insecurity, or the struggle of accessing food, or getting a job was very routine part of the work. 

It’s not that those stories weren’t there, or were silenced. But one of the things I talk about is place-based narrative labor means a willingness to dwell in these dilemmas, and to sit with them, and look for the resources to transform the circumstances. So can you celebrate while grappling. People talk talk a lot about toxic positivity right now, you know? Or tyrannies of cheerfulness, where in this case, positive place-based talk is the only thing acceptable and that basically, I just want to say that’s not what was happening. 

But they’re trying to expand what’s possible and complicate that deficit narrative. They’re trying not to define the people in the region by the bad things. So they have to be contextualized in the history of the region and how people are actually already they’re organizing to solve the problems. They’re not just sitting around going, “there’s not enough food, and there’s no jobs.” And so I guess that’s sort of the main main challenges I saw or tensions that I saw within doing this work.

William Saas: In some of your other work, you think critically about the Org Comm issues surrounding sexual harassment. Maybe by way of rounding out our interview, could you sketch out some of of these claims and that work? And then maybe tell us whether you see in your own work connections between the sort of place-based narrative labor and organizational communication and sexual harassment issues?

Sonia Ivancic: Yeah, absolutely. So I think I said at the beginning that a question that kind of guides my research is how do our actions and ways of communicating, hinder or open up possibilities for positive social change? So the sexual harassment project I conducted with a colleague was asking sort of what happens when someone talks about their sexual harassment? So they tell a co-worker, they report it formally. You know, what happens to their personal experience at work? And how do people respond to that? And so one of the things we found is that voicing your harassment to the organization tends to have a negative impact on the people who who were harassed. 

So a lot of times, you know, you need to just tell someone or report. Report it is a thing you often hear all the time. But reporting your harassment actually tended to make people feel less resilient at work, or able to be less resilient at work. And so their resilience decreases when they formally report their harassment. And this is more likely, as we might expect to occur in organizations that are perceived by them as tolerant of sexual harassment. So that’s some of the work that we’ve done around these questions of resilience, and, you know, does is the organizational culture tolerant or hostile to harassment occurring? And then we have a paper that’s currently under review. So it’s unpublished, and I won’t talk too much about it, but it’s about how organizations support or harm targets or witnesses of sexual harassment. So we focus on how discourses tend to form around the target that are negative and harmful for them. About who they are as a person. 

And that support for them, is very unreliable, and paradoxical. But that some people do get a little bit of support, and a few people are able to create these collective networks of support as resistance to the organization. So kind of what we’re arguing is that organizations tend to create the conditions for harassment to occur or thrive. And then perpetuate this with low accountability, low transparency, wanting to avoid the issue or brush it under the rug. I would say that targets of harassment tend to get the impression that the perpetrator is somehow impervious, or outside of accountability. For various reasons, you know? They’re well liked, they are the CEO, they’re their manager. And then the organization often kind of response to the situation in that way. That it’s impossible to hold the person accountable. 

So I guess collectively, these articles sort of advanced recommendations for how we can better support people who are harassed with the hope of creating cultures that are less tolerant to harassment occurring. They complicate narratives that speaking up or reporting your harassment will automatically lead to justice, because often that’s not what happens. The process tends to be pretty unpleasant for people. So speaking up is not necessarily or reporting… it’s not necessarily what’s best for people who are harassed. So I think I mentioned, this is a project I’ve been doing with my colleague, Dr. Jessica Ford, and we’re starting a second sort of project on this that kind of asks the question of, well, now what? Now, what do we want to do about this? Are there any examples where people have felt this has been done well or you know, and how do we sort of think about it in that way? So I guess this project sort of connects back to my central research program, about how organizational strategies perpetuate inequity, or disrupt it. And it centers the experience of people who have been targets of harassment or we also talk about witnesses, because that’s something that’s not discussed a lot. 

So when you’re asked about themes connecting themes between this and my other work. You know, I think how we talk matters, how we label a place or an action, or a person impacts how we respond to them. And whether it impacts whether we can create spaces that are safe, just, equitable, or whether we sort of continue to perpetuate current issues. And also how we mobilize material resources like food and money, harassment policies, that those matter. They have real impacts on people. These material objects and places are also always communicative and symbolic. So what messages are we sending, you know, not just with words, but through objects as well. So policies are a good example. I brought up the example at the very beginning about the long table, communicating community and inclusion when the event kind of did the opposite. So if you’re giving away free food, what’s the quality of the food and what does that communicate to people? So guess those are sort of some overarching connections.

Scott Ferguson: That’s great. Well, Sonia, thanks so much for joining us on Money on the Left. It’s been so wonderful to speak with you about your work. Thanks so much for coming.

Sonia Ivancic: Thanks for having me. I really enjoyed talking to you.

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

Weimar Futurities with Engelbert Stockhammer

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

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

Read Stockhammer’s paper here:

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Music by Nahneen Kula:


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

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

Engelbert Stockhammer: Thanks for having me.

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

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

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

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

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

Scott Ferguson: What year was this?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson: So he’s not an accelerationist.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson: Full Employment of the banks.

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

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

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

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

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

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

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

William Saas: 100%.

Scott Ferguson: So let’s give up.

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

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

Engelbert Stockhammer: Great, that was fun!

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

The ECASH Act with Rohan Grey (New Transcript!)

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

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

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

Full text of the E-CASH Bill

E-CASH website

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Music by Nahneen Kula:


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

Rohan Grey: Thanks for having me.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

William Saas: Hopefully, a little more sturdy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Music by Nahneen Kula:


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

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

Josh Shepperd: Thank you for having me.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Josh Shepperd: Like immediately.

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

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

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

Scott Ferguson: He’s rolling in his grave.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Josh Shepperd: Thank you for having me.

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