Historicizing the Neoliberal Blockbuster (Preview)

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

For access to the full video lecture, subscribe to our Patreon here: https://www.patreon.com/MoLsuperstructure

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

Course Description:

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


2001: A Space Odyssey (Stanley Kubrick, 1968)

Jaws (Steven Spielberg, 1975)

Star Wars (George Lucas, 1977)

RoboCop (Paul Verhoeven, 1987)

Toy Story (John Lasseter, 1995)

Jurassic Park (Steven Spielberg, 1993)

The Matrix (Wachowskis, 1999)

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

Money as a Constitutional Project with Christine Desan

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

Theme music by Hillbilly Motobike.

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

Link to our GoFundMe: https://charity.gofundme.com/o/en/campaign/money-on-the-left-superstructure 


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

Christine Desan: Thank you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

William Saas: That makes sense.

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

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

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

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

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

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

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

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

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

For access to the full video lecture, subscribe to our Patreon here: https://www.patreon.com/MoLsuperstructure

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

Course Description:

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


2001: A Space Odyssey (Stanley Kubrick, 1968)

Jaws (Steven Spielberg, 1975)

Star Wars (George Lucas, 1977)

RoboCop (Paul Verhoeven, 1987)

Toy Story (John Lasseter, 1995)

Jurassic Park (Steven Spielberg, 1993)

The Matrix (Wachowskis, 1999)

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

New Laws of Robotics with Frank Pasquale

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

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

Theme music by Hillbilly Motobike.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Public Media, Public Money With Victor Pickard

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

Theme music by Hillbilly Motobike.


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

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

Victor Pickard: Thank you for having me.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson: Yeah, thanks for coming on.

Victor Pickard: My pleasure.

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

Money After Redlining With Rebecca Marchiel

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

Theme music by Hillbilly Motobike.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Rebecca Marchiel: Oh, you know, you know…

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

Resisting Predatory Finance with Raúl Carrillo

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

Raúl Carrillo is an attorney, chair of the board of the Modern Money Network, Research Fellow with the Global Institute for Sustainable Prosperity, and member of the advisory board at Our Money. You can read his article for the UCLA Criminal Law Review here: https://escholarship.org/uc/item/7rp8g89c. See his article on “The Dangerous Myth of Taxpayer Money” here: https://splinternews.com/the-dangerous-myth-of-taxpayer-money-1819658902

Theme music by Hillbilly Motobike.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson: Absolutely.

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson: Yeah, so do we.

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

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

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

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

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

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

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

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

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

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

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

Maximilian Seijo: They’re Superstructure.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Money, Music & Method with Alex Williams

Economist, musician & Money on the Left audio engineer, Alex Williams, joins the podcast to discuss money, music and method in light of Modern Monetary Theory and heterodox economics. At the outset, we chat about methodology and the riddles of “administrative capacity” that drive so much of Williams’ work. Next, Williams guides us through his proposal for arts and culture provisioning under a federal Job Guarantee by way of a critique of the anti-money, laissez-faire DIY music scene in which he came up. Finally, we turn to Williams’ much-touted master’s thesis & recent popular work on stabilizing state and municipal balance sheets during crises like the coronavirus health emergency. 

Check out some of Williams’ important work: 

The Job Guarantee and Cultural Equity: Gatekeeping and Popularization,” Global Institute for Sustainable Prosperity, Working Paper 127, 2020.

Intragovernmental Autonomous Stabilizers, Master’s Thesis, Bard College, 2020.

Structuring Federal Aid To States As An Automatic (and Autonomous) Stabilizer,” Employ America, 2020.

Find Alex on Twitter: @tragicbios

Theme music by Hillbilly Motobike.


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

William Saas: Alex Williams, welcome to Money on the Left.

Alex Williams: Hey, how’s it going?

William Saas: We’re super excited to have you. As the listeners probably are already aware, you are our audio engineer and producer, but also you just finished up your program at the Levy Institute at Bard. We met you a few years ago at the first MMT conference, and so, we wanted to start off, as we normally do, by asking you to tell us a little bit about your history and how you came to be and do what you’re doing.

Alex Williams: Sure. So I’m from New Jersey originally. I did my undergrad at McGill in Montreal, Canada because it was cheaper to rent an apartment and go to school in Canada than to stay in state and live with my parents. At the same time, I knew that Montreal was a city with a good music scene. There’s been generations of notable artists. It was The Unicorns and Godspeed back then, and then there was Grimes and people like Mac DeMarco. So I was there during that. I was also there for the student strike in 2011 and 2012. I don’t know how much coverage you got in the US but the province was basically going to raise tuition by a couple of percentage points and there was a huge reaction against it. And so, people did sort of Occupy-style organizing and there was an Occupy-style political mood. People were out in the streets banging pots and pans, making themselves heard, and doing the whole spontaneous order approach to political action. At the end of it, they canceled the tuition raise, they didn’t bring the money in from anywhere else, and the Parti Québécois won the following election running on the charter of values, which basically says that you can’t wear a hijab on the metro. It was a big sharp shock in terms of whether this approach to organizing actually does stuff that matches up with its kind of political rhetoric.

That’s how I got interested in econ generally. I participated in that and felt there needs to be more happening here. And I was doing an econ degree because that’s the sort of the thing you do if you want to make sure that you can get a job regardless of what that job actually does. Because I was up there to play rock and roll. I’d been a studio rat the whole time. But in my third year, after all that stuff had boiled over and then faded out, instead of going to class, I would just walk around the library and pull books out in the econ section on the third floor. At one point, I got ahold of Capitalism, Socialism and Democracy by Joseph Schumpeter, which I read and was like, “Wow, you can actually make interesting arguments in economics.” You can actually say something. This isn’t all just Lagrangians that are attached to abstract abstractions. You can make a concrete argument and you can even come to actual unexpected arguments as opposed to the faux-unexpected, sort of Slate Magazine type arguments where it’s actually safe if you ride your bike without a helmet kind of thing. [Schumpeter] saying “Socialism will win but that will be bad because it will be bad for productivity, but at the end of the day, it’ll be good,” I was like, this is actually an interesting argument. That was pretty cool.

So, I finished the degree and had wanted to be a musician and had spent the whole time in the DIY scene playing guitar in a whole bunch of bands. I added it up at one point and played something like 110-120 shows in that four years. I also teched on a bunch of albums because I don’t really know how to play an instrument. The thing that I’m good at is sitting behind the desk as people can attest listening to the podcast. When I was done with school, I got working in the music industry for a company that I still work for–an absolutely lovely company. I work in the music industry now still, paying artists essentially. And one of the things that was difficult for me was that a lot of music and a lot of art generally likes to figure itself as a kind of revolutionary force. People like to say, this artistic expression will challenge people’s ideas down the line, with a bunch of question marks in the middle, and then political change. This is an argument that we’re all familiar with. And so, the combination of dissatisfaction with how things had gone in the student strike and dissatisfaction with how things tended to proceed rhetorically in music drove me to get progressively more and more serious about political economy type stuff. There’s that famous Vonnegut quote about all of the artists in the entire English speaking world focusing 100% of their energies on destroying the Vietnam War and it hit with the impact of a cream pie dropped from a six foot stepladder, or something like that. Which I think is true–I had all those specific energies and dissatisfactions.

Around that point, I found Naked Capitalism, which Yves Smith runs, and through that found Randy Wray’s book. This was Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. I read this and it was totally baffling because I had done an econ degree. I hadn’t done any accounting. I hadn’t done any political economy. I hadn’t done any of this stuff. But I fought my way through it. This was the original version, not the second edition–the one with the gray cover, not the white cover. And at the end of it was like, “Oh my God, if this is the case, and there’s a really good argument in here that this is the case, then a lot of things are not what they seem and a lot of things need to change, but also there is a lot more room for those things to change without changing other things that people usually assume.” There were even points in the Occupy movement where they were like, “We have to reinstate Glass Steagall.” But if you actually dig into it, Jan Kregel, for instance has a fantastic paper about why we can never go back, and how it’s really regulation Q and arbitrage on interest bearing deposits that led to the end of Glass Steagall rather than its repeal bringing forth daily speculation and this, that, and the other thing.

Anyway, this is getting a little bit far afield, but I read Randy’s book, moved down to Texas, and then went to the MMT conference at Kansas City in 2017. It was interesting because I basically came up through online MMT and had only heard about it because of online MMT stuff. From what I understand, it had previously been the PK conference, and this was the first year that they were doing it as the MMT conference.

Scott Ferguson: Yeah, and just for our listeners, that’s the Post-Keynesian conference.

Alex Williams: Right. It’s a long running thing that goes back to Rutgers and East Tennessee with Paul Davidson and Jan Kregel and all those guys. But they ran this one explicitly like, if you’re from the Internet, you’re welcome to come here and hang out. And I was like, “I’m from online. This is only an eight hour drive or whatever.” And so, I drove up and stayed in an Extended Stay America that didn’t have any towels. The next time I went to Kansas City my car got broken into–every time I go there there’s always something.

Scott Ferguson: I got rear-ended there, actually. It’s funny that you say that.

William Saas: I had a lovely time.

Maxximilian Seijo: Yeah, it was great.

Alex Williams: Well, yeah this is the next year when I got my car broken into. I just don’t get it. They have really good ribs though. There’s Joe’s that’s like at a gas station or whatever. But anyway, that’s also far afield. So, that’s how I met you guys. It was at that conference. After meeting you guys and meeting Tankus and everything, I realized that there was something to do in this field and that there was a reason to put energy into this and pursue it. Then, I did a reading group with Tankus where we read the The General Theory of Employment, Interest, and Money, and I got a whole bunch of other reading recs out of him–frequent Money on the Left guest, an absolute genius, runs a Substack now: Nathan Tankus.

From there, having stayed in this horrible Extended Stay America and gotten my car broken into, and not wanting to commit to a PhD, I ended up going to the Levy Institute at Bard College where Randy Wray was teaching rather than the University of Missouri at Kansas City, the other big MMT hub. That’s how I got to the master’s degree. One of the other things that has happened since the master’s degree is that there’s just a lovely community of people on Twitter. Like it’s not just online MMT but there’s also the weirder finance Twitter out there that has been very instrumental in helping me to understand how all of these big macro ideas ramified down through individual things and why all these conversations that seem serious to mainstream economists and that initially seem not serious to heterodox economists actually do attach to other stuff–there’s actually thoughts here and there. That stuff is how I eventually wound up where I’m at now, which is wanting to ask new sorts of questions.

The joke I have running right now is that my project is about material history, market microstructure, and ontology–I guess it’s not really a joke, we can take that out. Those are the three things that are broadly of interest in the imaginary program in my head. These are the things that I want to ask questions about. Because if you think of monetary theory of production in the Keynesian sense or production for profit and not for use in the Marxian sense, looking at either of those requires that you go and look into the granular mechanisms by which profit exists, which then takes you into market microstructure in lots of really gnarly ways. So yeah, that’s how I got here.

Scott Ferguson: That’s great. To take it back a little bit, when we first met in person, I believe it was when you were in the audience of our panel on “MMT and the Humanities,” and you raised your hand from the back and asked me a question I wasn’t prepared to answer about John Dewey. It was great. I was really nervous that day and wasn’t really sure what to say in response to it. But that opened up a window for me into Alex, who is so capacious and will one moment talk to you about the inner details of Deleuze and Guattari’s theoretical framework and then just wonk out on some crazy, technically detailed policy proposal. I was wondering if you can just give our listeners maybe a taste of–I mean, you’ve already mentioned Schumpeter and a few folks along the way that have been important to you–but some of the thinkers, some of the writing, and some of the schools of thought that you find really influential thus far in your career.

Alex Williams: Yeah, I actually was thinking about this the other day when I was thinking about how would one teach economics just generally. And I think this is one of the things that Fred Lee does extremely well in his textbook, which is Microeconomic Theory: A Heterodox Approach. In this book he basically starts out with ontology, or what is there, and then epistemology, or how can we know about what’s there, and then offers models as a way of dealing with epistemological and ontological questions. How can we represent what is there in a way that we can make knowable claims about it? From there begins economics. In a lot of places, that stuff gets swept under the rug or it gets pushed into philosophy of science or it gets dumped in a lot of different ways. But the thing is, having a handle on the conditions of possibility for doing economics, I think, is really helpful for doing it. Because it lets you cut through a lot of stuff when people are making abstractions, or even worse, making aggregations and then changing the definitions of those aggregations. Being able to pin that stuff down at a very molecular level almost makes it way easier to figure out what kinds of models and arguments are good. But the problem is, all of that stuff can be well and good. There are all kinds of platitudes when making models. But to actually do that and to do that in a way that you feel like you can defend, you do kind of have to take a tour through the history of philosophy in a way.

I mean, I disagree with Fred Lee and with Cambridge’s Tony Lawson and a number of other people who do the critical realist grounded theory thing. Basically, I came into econ to alter the world, which requires doing politics because the social world is as embodied as it is in politics. Politics are the juncture between thought, material action, and rhetoric. So, the first place that I ended up going through there was the postmodernists. I lucked out with an early engagement with them. They do this whole big song and dance where they’re like, “Oh, actually these metanarratives and totalizing systems aren’t real because we have to append a whole bunch of multiplicities to them and then live without this global metanarrative.” And when you’re a student, you think, “Oh, they’re taking this seriously. This is a big deal.” We had these big frameworks, and then these big frameworks had been proven not to capture sufficient detail. That all seems well and good, but then you look at what happened 60-70 years ago in the US and in pragmatism written broadly, where they’re saying, “No, all knowledge is immanent knowledge to doing something in that time and place.” Everyone is specifically embodied and different embodiments mean different things in different locations, and all these things eventually get coded as the postmodern turn.

Think about the work of Richard Wolff and Stephen Resnick at UMass, Amherst, where they argue that class is just a lens to enter into Marx as a dialectical method and is not reducible to the Marxist system. The pragmatists, by immanently defining all of this stuff and saying, “Look, everything has a local logic, everything makes sense in its little neighborhood, but those neighborhood logics don’t add up and don’t all have the same functional mapping from one neighborhood logic to another,” you have to develop knowledges that are efficacious for what you’re trying to achieve in that local neighborhood rather than having to make big broad global claims about what is known and what is knowable. So, the epistemological turn saves you from doing “I just heard about Marx” type stuff, where you hear about Marx for the first time and then you go, “Oh my God, if everybody knew about this, the world would be different because this is transcendently true. And the only reason that these proposals haven’t been enacted is because nobody’s heard about it.” Then a week and a half goes by and they say, “Oh my God, people have heard about it, but we haven’t made it sufficiently rigorous. So if we make it rigorous enough, and then they hear about it, they’ll have no choice but to accept that it’s correct and implement its policies.” And then another two weeks go by and they go, “Oh dear God, it hasn’t worked. What do we do? Epistemology has failed.” And that’s sort of the end of that line of inquiry. And people are still fighting those battles. There’s a sucker born every minute into those battles.

But if you take a broader lens, you can see pragmatism as the truth is what is warranted and assertable, or the truth is what works, or you can only adequately define knowledge relative to goals and systems and you can define an internal and an environment but that’s it–you can’t give a totality–it lets you be anti-essentialist in a way that accords much more directly with the realities of monetary production. I think the most interesting person to have outlined this is Martijn Konings, who has a book called Capital and Time that basically argues this value theory stuff, where he’s like, “First you have efficient markets, hypothesis type people who argue that value is this objective fact that’s embodied in the thing.” It is what it is and the market discovers it. We’re all familiar with this–John Quiggin’s Zombie Economics and stuff like that. So, the level one political economy argument against that, and a lot of books that came out after 2008 made this argument, is “Look, value isn’t fundamental. It’s not essential, but it is elastic. It can get stretched out in bubbles and it can get stretched and stretched and stretched to a point, but then inevitably, no matter what, it snaps back to what its fundamental value is.”

We hear a lot of Marxists make these kinds of arguments. And we hear a lot of people who have read one or two Minsky papers and take them to be the entire corpus make these arguments. It’s all elastic, but it has a fundamental that it will revert to. You even hear people on Odd Lots complaining about bearded value investors making these sorts of arguments. What Konings asks is “Well, so if we’re all very postmodern now, if we’re all very anti-essentialist now, and everything is a contingent assemblage accessing lines of flight, then why are we still being fundamentalist about value?” He outlines this third position, which is basically that value is plastic. It is what it is made into at time (t) by market participants. And he is like, “Yes, absolutely, there’s no ultimate underlying value because none of this stuff is conserved over time,” which is something that Marx admits in Capital, Volume 1, but at every time (t) there is a set of prices and they’re all correct at that time (t). But they are a function of basically the time (t)-ness of time (t). It’s almost like a Whitehead kind of framework where you don’t have objects; objects are abstracted out of specific events.

I really like that kind of anti-essentialism. I find that you can get there very quickly from pragmatism and from that model building that recognizes that these model buildings are contingent, and that everyone is outlining a local model, and that if you don’t take anyone to be outlining a total model, you can very easily make use of big ad hoc constructions. And then, these are better at explaining financial reality because that’s how people broadly approach models. There’s a great book by Donald Mackenzie called An Engine, Not a Camera that talks about how financial models are developed and then later prices behave according to those models rather than those models being inducted out of the behavior of prices. The entire thing is just an attempt at tool building. And so, what I think is important is not to reify this Marxist inevitable clash or to reify this ameliorative liberal democracy perspective of things are getting better, but as to recognize that everyone involved in the production of capitalism–forgive the endnotes-y phrase–is really only obeying local logics that they have found as tools in order to beat the folks around them in logics that they can map themselves to.

So, you have all of these isolated knowledges, none of which is capital K Knowledge. And when you come to doing economics, you come with that framework in mind so then you don’t get bogged down in either pretending all of these abstractions, like the natural rate of interest or NAIRU (non-accelerating inflation rate of unemployment), that people use to justify policy and presented as though they are total facts, you can get away from pretending that they’re real. But then you can also get away from putting a lot of energy into debunking them so as to convince people that they’re not real. And you can just kind of take them as the local logic for those actors in that space, and then accept or deny it based on whether it’s useful for you in describing local actors in the space you’re interested in. I think that that’s just a healthier way to theorize.

Maxximilian Seijo: From this epistemological or methodological perspective that you’ve outlined, this non-essentialist perspective, I think you once said to us on a call that your work proceeds from the assumption that MMT is trivially true in some sense. And then, you go onward from there with your central problematic, especially recently, which has been what you’ve called the problem of administrative capacity. And so, perhaps for our listeners, could you define exactly what administrative capacity is for you as well as why it’s important for a broader Left project aimed at radically transforming money?

Alex Williams: I was thinking about this earlier today because a buddy of mine was sending me his live running commentary on Schopenhauer’s reaction to Spinoza and its relationship to the fourfold root of the principle of sufficient reason. What I was thinking is that administrative capacity is basically capacity to affect. It’s the capacity to change material facts on the ground, but in a material sense, rather than in an ideological or intellectual sense. It’s to move things around, essentially, or to change the state of the world in a way that is what was agreed upon by the thing doing the administration. So administrative capacity is basically how capable you are of altering the world such that it is in the state that you want it to be in as an entity. And so, these are big things. You could describe geopolitics in that way. You could say, “Oh, Kissinger was doing XY and Z in order to do this and he has a certain degree of ability to do that because of the different capacities of bombers in Cambodia and such.”

But you could also say that about a company that is seeking to govern the prices for the space of particular petroleum distillates when there’s only five or so firms that have the capacity to intervene in that market. And so, you have this administrative capacity as a way of these firms determining the facts on the ground about those markets. Things like how much capacity there is when moment to moment pricing is also downstream of their agreements with one another not to compete on price and to have X, Y, and Z people have X, Y, and Z market share and A, B, and C geographical markets. But basically, it’s the capacity to affect. And it’s important for the broader Left project because you need to actually–I hate to sound like a Hobbesian or something like that–but you need to actually be able to implement the rights that you verbally guarantee to people. And you need to have a system for doing that.

So, it’s a hard thing to pin down exactly because I tend to think of it as coming from Herbert Simon’s administrative behavior perspective, where he’s like looking at how decisions actually get made in businesses. Because all of this stuff ultimately boils down to, regardless of who owns it and regardless of what the goals of running them are, all of these questions are a version of the question, “how should we operate the factory?” The Left project broadly requires a particular answer to the question of how we should operate the factory. What is it a factory of? That’s part of operating the factory. Who are the things being distributed to? That’s part of operating the factory. How are we coming up with decision mechanisms for these things? That’s another part of operating the factory.

Maxximilian Seijo: Can you spell out then how MMT and the assumptions of MMT fits into that schema for you?

Alex Williams: Right, so maybe this is more comfortable. There’s a quote that is not actually from Fred Lee, but I’ve attributed to him in my head enough times that I think it is and I tend to just cite him for it because I hate to take credit for things. But the idea is that administrative capacity as I’m thinking about it basically arises from the idea that markets are sites of market governance. They’re not things, they’re locations where markets are governed by these different participants. The Austrians and the neoclassical market socialists will tell you there are prices that are governing the market, and then everybody is showing up and engaging with these prices, and then making production decisions and this, that, and the other thing.

But if you take the administered prices literature seriously, which says that the overwhelming majority of firms who do not produce things that are simple commodities have the ability to set prices, whether this is explicitly like the McKinsey bread price fixing scandal with Mayor Pete and all that, or implicitly in terms of everybody knows how much capacity is being built at this, that, and the other place in different industries. The prices end up being products of administration, between companies, between governments, and between other actors rather than things that are determined by the market as an autonomous information processing entity. The market is just a location that the actors in the market come to to transact with one another or to ratify one another’s decisions and to not contest them. But these prices fall out of these governing mechanisms rather than coming out of the “market” market. All of the administrative capacity there is in these firms that get built up who decide what the things in the market are.

But the reason that MMT comes into this is because you have all these private actors who are doing all of this private administration of production, where they are choosing what gets produced and they are choosing how it gets produced in terms of the labor process. And what Keynes recognizes, and this is what of Keynes ratifies down into MMT stuff, is that the amount of private administrative capacity for administering production is driven by the amount of demand in the system. What MMT basically says, as it takes this functional finance approach, is “Well, we should run the economy such that all of the possible private administrative capacity for administering production is taken up.” And in its actual proponents writings, it’s very agnostic about what actually ends up getting done with that because it says you have the job guarantee as a way to guarantee people jobs, but also as a way to guarantee that sufficient cash enters the economy such that all of this administrative capacity is taken up. And whatever the private market doesn’t feel like taking up, the government will.

So, you get these administrative structures because you need to have cash in order to buy food to survive and the administrative structures administrate production in exchange for cash. Demand just affects the amount of administration rather than its direction and what kind of production is being administered. And this is something that comes up in Kalecki’s political aspects of full employment, where he talks about from a full employment alone sense, there’s not really a difference between a fascist war economy that is just dumping out armaments and a democratic economy looking to human flourishing. Both of them accomplish the demand side goal of putting enough units of administration, units of social energy as cash into the economy to ensure that all of the administrating apparatuses are administrating at their fullest capacity.

Maxximilian Seijo: In that sense, then, MMT sort of functions as the kind of infinite endowment of the capability to administer in the first place, or to affect the objects and use your analogy before?

Alex Williams: Yeah, or to ensure that the system has sufficient energy that things are running at capacity. The big point of all of the old neoclassical stuff is that unemployment never crops up because the wages just adjust and then the prices just adjust and then everybody moves to a new nominal price level where everyone is able to be employed, which was really aggressively and empirically disconfirmed in the 20th century. Now we know the way that you ensure everyone is employed is by making sure that there is enough spending happening in the economy and MMT explains why the federal government can be the guarantor of that domestically. And it explains why an economy that is not wildly balance of payments constrained will be able to ensure the full uptake of its resources. This is almost like an old Galbraith point where he talks about the loss from unemployment versus the debt incurred–and this is in the affluent society–but if we if we take seriously that one man being unemployed is one man’s worth of whatever, then anything less than that of government spending, net net, is going to get closer to the actual production frontier instead of just assuming we’re there.

Scott Ferguson: I want to shift gears and start introducing our audience to some of your specific papers and projects. And I want to begin with one from a few years ago that I think you first presented at the very first Money on the Left conference, which happened at the University of South Florida where I work. You were trying to think about a job guarantee, a full employment project, but in the realm of cultural production and aesthetic production, and taking up essentially what Gramsci would say from an “organic intellectual” perspective, some questions that had arisen for you in the course of coming up in the DIY music scene. I was wondering if you could introduce our audience to the problems that you were seeing and what you’re suggesting as a solution. I also just want to flag for people that this paper would later come out as a working paper for the Global Institute for Sustainable Prosperity that went under the title, “The Job Guarantee and Cultural Equity: Gatekeeping and Popularization.” 

Alex Williams: Everybody has a buddy who is a musician that has made to them at one point or another the argument in favor of a UBI, Universal Basic Income, that is a kind of Marcel Mauss via the Marx quote in Carlyle about the cash nexus. The argument often boils down to “Look, if we had UBI then a lot more people could just sit around playing guitar. And it would be fine. And like because of that, we’d get some sick records. And it would all work out because I’m just delivering pieces right now. What does anybody need that for?” Which is emotionally legit, but this is also a frame of analysis that we’ve all seen before.

William Saas: “The Beatles were on the dole,” I think Graeber talks about that.

Alex Williams: Yeah, exactly. This is the roommate who voted for Andrew Yang sort of argument. A lot of people in DIY land have a version of this argument. And there is something there in so far as the more cash people have, the less labor discipline they’re subject to and the more subjective freedom they have to take risks and this, that, and whatever. I mean, people even talk about this in the form of the relationship between student loan debt in millennials and new business formation. We do know that if people are better off, they will do more and more riskier things. But the thing is, people tend to pitch this as a way of (1) solving the problems of the music industry in particular, and also (2) ensuring that the art is authentic by isolating it from what they understand as the cash motive or the profit motive or money generally. There’s a very old romantic notion that there’s this constitutive opposition between the realm of art and the realm of the marketplace. And that marketplaces are interchangeable, callous, nonspecific to the individual, and playing a Keynesian beauty contest with people’s expected emotions kind of thing. And then at the same time, you have the romantic individual who has this unrepeatable experience that is valuable by virtue of its singularity that if it encounters the market it is corrupted by virtue of that encounter.

So, there’s the combination of those two things. There’s the “I’d be able to have more time to work on my record, if I didn’t have to worry about money” side, which is contingently valid. And there is the “No one can possibly make authentic music while also worrying about money, or targeting money, or encountering money generally” angle. This is an old two prong thing. And so, the way that you resolve these two prongs is you say, “Oh, UBI.” Because that way it’s unrelated to the artistic expression but it also ensures that more people can do the artistic expression. So this is cool because as it stands right now, DIY especially, just as much as regular music, is people from money or people who are already tied into pre-existing networks for this stuff. Taylor Swift’s dad has a Merrill Lynch desk. Frankie Cosmos is Kevin Klein’s daughter. A lot of the people that anyone ends up hearing about from DIY are people who are able to use DIY as a kind of clothing to launder a more obvious origin story.

The problem with UBI as a solution to this is twofold. The problem is, on the one hand, what this ends up doing is reifying these unspoken hierarchies for people who have the time and energy and willingness to dedicate that time and energy to doing DIY. Joe Freeman had a classic paper called, “The Tyranny of Structurelessness,” that was about the difficulty in accomplishing anything within the women’s liberation movement without having something explicit, like an org chart with accountability and contestability. It basically just ends up being groups of friends who hype their friends, and in the event that there’s conflict or equity concerns or any of this stuff, people just shrug and say, “Well, we’re just doing this here. It’s whatever if you want to do your own thing.” This is often the response to it because all of the hierarchies are either vague or totally unaccountable. And so, if you do UBI as a response to that, you draw people in more volunteeristically into those systems and you still have all the problems that those systems have now.

The other problem is if we’re targeting anything like equity in what people hear–equity in what is considered the broad cultural landscape–this won’t do that. Because the problem used to be that record labels control who is able to record. Recording studios were big and expensive and you couldn’t use one without a record contract. And when you used one, you only got it for like a day and you had to play your songs and get in and get out. And they’d press them and sell them but a lot of the records would go nowhere and nobody would ever hear about it ever again. You’d see it in the bin at the thrift store eventually. The record labels used to control who could record and then would control to a certain extent the work that played on the radio. And so, now recording is free, which is something people make a big fuss about. And it’s a good thing to make a big fuss about because it’s great. But the thing is, in response to that, you have these same broadly capitalist selection forces re-entrench themselves downstream. Rather than it being choosing who gets to make records, it winds up being whose records get heard about and who gets a career doing anything, as opposed to just sort of dumping records onto bandcamp and walking away.

There’s exceptions here and there, obviously, because there’s exceptions to everything, but the flip side of this is that they are controlling who the audience hears about. And we’ve known from the entire history of the American press that it is broadly racist and uninterested in women, and that it is always looking to give credit for innovation to white men who have found out about something that other people were doing rather than the people who were doing it initially. And so, there’s no reason to assume that that stuff will change if the composition of people who have the financial means to be doing music and stuff changes. So what has to happen instead of a UBI broadly is a job guarantee approach that looks at the production of culture holistically. It looks at the production of culture as being not just there is an artist who produces a unit of culture, and then we wash our hands of it and who knows what happens afterwards. The idea is that you have a job guarantee that has a publication and distribution apparatus in addition to paying cultural workers.

What this ends up amounting to is a kind of public option for culture. You could take a less radical view of this and say this is the BBC and “Oh, you had John Peel,” which is a kind of state backed eclecticism in which he would have Pavement on in 1991 before anybody had heard of them. And they’d say, “This has already been done,” and that’s true but that’s not really an argument against what this paper is arguing. It’s saying that UBI is not the way forward towards a more equitable cultural landscape because it just ends up reifying power structures in slightly different places. It becomes who we hear about rather than who gets to make music. And so, this ties back to administrative capacity. Because the idea behind the UBI is you’re just dumping cash into the system and saying, “The people, private entities, and firms that are administering this, we’re sure they have everyone’s best interests at heart. So we’re just going to let them make the decisions about content and stuff like that. We’re just going to ensure that everybody is capable of getting into the front door of this process.”

Whereas a job guarantee program that wants to develop more state administrative capacity in terms of generating culture, that targets goals that we actually have, like equity and equal representation and things like that, you have to say, “Look, we know that with respect to these goals, these existing firms are basically bad actors.” I mean, we’re not really that many years from Elvis, ultimately. And so, because we recognize that these are bad actors, if you want to be a Lefty and you want to take seriously how to do this stuff, and how to get cultural engagement that is actually interesting and worthwhile and adds its rewards to the people who actually are doing the stuff as opposed to the first white guy to hear about it, you need to develop administrative capacity within that program specifically. And that’s something that the job guarantee allows you to tailor and target, which a universal basic income doesn’t.

Scott Ferguson: Right. And there’s a creativity to that too and an argument for a strong civil service that is about building that creative administrative capacity for the artists–the artists behind the artists.

Alex Williams: Right, exactly. And also because it positions it as being accountable. I mean, Spin Magazine is not really accountable to anyone–shareholders maybe. Conde Nast is not really accountable to anyone. And so, the extent to which you introduce local democratic accountability into these frames, you can get the outcomes you want.

Scott Ferguson: Can you talk about some specific institutions or just get down into some particulars? Like in your talk, you mentioned some. You’re talking about distribution and exhibition? Are we talking about venues?

Alex Williams: The idea is that you have artists who are on the job guarantee payroll, and then you have newspapers and radio stations that are a public option that can be mainly talking about these artists from this job guarantee framework. Like if you’re trying to go maximalist and have this be a genuine public option for a culture that has the capacity to be equitable, you need to have the papers, you need to have the websites, you need to have the venues, you need to have the people who manage the tours; you basically need to insulate all of this stuff from its ability to be recaptured by private entities like Live Nation and Disney. And to do that also requires taking a serious approach to what copyright law means. And to the extent that you’re working for the government, you’re given a pension or whatever, as opposed to this goofy roulette wheel of royalties that then leads to people who make a lot of money affecting the copyright regimes so that they can continue to do that. Rohan Grey has a chapter about this on who owns the fruits of the intellectual job guarantee or something like that. But basically, there needs to be a public option, all the way down in that sort of stuff. If you were to take equity seriously as a consideration in doing this, you would need to have venues, you would need to have radio stations and magazines, you would need to have the entirety of the apparatus of artistic production, which is always more complicated and more involved than people ever really want to think about or deal with.

William Saas: So in our January episode where we talked with Alexandra Skaggs, financial journalist, I think we ended by asking her what areas of research she would like to see MMT scholars go and where does MMT need to do more? And she talked about the state and municipal levels–what does MMT mean in states and cities. And that seemed a pressing question in January of 2020. It’s definitely all the more a pressing thing in July of 2020. In the interim, your thesis project was finished at the Levy Institute and now you’ve shared and found yourself being called upon to share more about that thesis project. Could you spell out the municipal and state level finance questions, problems, and things that surround that?

Alex Williams: So, yeah, there’s probably a big way to do this and there’s a little way to do this. 

William Saas: Let’s go the medium way.

Alex Williams: I meant in terms of what the proposal is, because the real serious proposal is that all of this stuff, funding wise, should be federalized. There’s no good reason to tie school quality to local wealth. There’s no good reason to tie infrastructure quality to local wealth. That whole structure exists just to replicate inequalities. There’s like no other reason for it, which is one of those things that MMT makes very obvious. Prior to thinking through MMT, you go, “Oh, no, these have to be tied to that because where are they going to get the money to pay for it?” If you take the MMT lens, then you go, “Oh, obviously these just need to be federalized.” It’s always already federalized after a fashion. It’s just that it’s being done so using a metric for calculating it that intentionally reinforces these inequities. So the big way is this stuff should all be federalized. States are basically outdated, illegitimate forms at this point. Maybe they should exist as administrative arms that don’t decide what the funding is.

The smaller way of thinking about this is that you need to insulate states and locals from the business cycle, because they have no real ability to impact it. But it has a huge ability to impact them. And they have no ability to defend themselves from that impact. And so, the thesis project that I did was basically like, how do we provide intra-governmental stabilizers? Because there’s always been a lot of work on automatic stabilizers, generally. Things like, if unemployment goes up, there’s less spending, but then also, the government spends more on paying unemployment benefits so they kind of net out. Or like, “Oh, if income goes down, the amount of taxes taken out goes down also so the total net amount of income that leaves the economy is smaller because they automatically stabilize one another.” They ensure that the amount of demand is kept within a given band rather than allowed to vary freely. That happens for the economy as a whole, but given that states are unable to basically set up big fancy capital structures that make it so that their revenues and expenditures are correlated to one another, they need to be externally protected from the business cycle. And so, I was like, “Okay, so how do we do that?” Because, if you think about this as a condensed government balance sheet…let me take a step back here. So say there’s a recession, right? We all know that in a recession, the role of the government is to spend more money.

Scott Ferguson: I’m not sure Congress knows that.

Alex Williams: Haha yeah, although I bet Michael Bennett’s office knows this. Jerome Powell may know this. But the goal of the government as a consolidated entity–so state, municipal, and federal–is to spend more as a consolidated entity when the economy gets worse. This is easy at the federal level because of all these automatic stabilizers we were talking about. At the federal level, they can just spend. We’re in MMT land, we don’t have to provide justification for this. The problem is that as they’re doing that states and locals, because of their unique administrative status and unique legislative history and unique political orientations, are forced into doing the opposite of what should be done. In a recession, they cut spending and raise taxes because a lot of them have balanced budget amendments and a lot of them have statutory balanced budget requirements.

But what’s interesting about it is that they are done locally. Each state has one in its constitution, as opposed to the eurozone, where there is a central authority that is saying you guys can’t go above X/Y debt and deficit relative to income. The states all individually are putting this on themselves and saying they vow not to do this because of a previous era where they are trying to do a confidence play to attract investment. They say “We’re not going to go bust as a state that looks…” It’s very Deadwood era. It’s very wild west. Everybody thinks that the government is just another kind of company. We need to prove that we’re not going to go bust so we’re going to have these balanced budget amendments. Last time there was a state that was actually bailed out was in the 1840s. The problem is basically that states can’t run deficits and have a tax base that is basically on flows and have a spending base that is basically on flows. So, their tax base is all things that change as flow rate variables–their income taxes, their corporate taxes, their sales taxes. When unemployment goes up, those tax revenues go down. And when unemployment goes down, those tax revenues go up. The problem is that when their tax revenues go down, their spending requirements go up–things like Medicaid, things like state level unemployment rolls. Spending goes up. And so, they are forced into a position where they either have to raise taxes to cover the additional spending, or cut spending on unrelated projects in order to not run a budget deficit.

Municipalities are in the same scrap basically, except they are allowed to issue debt, but they’re subject to very stringent market discipline. Municipal bond yields spiked in 2008 and spiked in 2020. And we’re at a position where, if everybody suddenly gets worried, then they can no longer issue previously democratically approved bonds in order to build this, that, or the other thing. So this big systemic weakness is that everything below the federal level is mechanically procyclical. And this is the basic problem that the thesis is seeking to address. What can we implement so that is no longer the case? And the answer is we just have the federal government develop a mechanism for identifying when there is a recession, and then use that as a trigger to disperse money to states because they know that when unemployment moves, state tax revenues move. And so, we can balance those things out on net using econometric tools at our disposal and using the very safe assumption that it does not matter what size deficit the federal government runs. So that’s basically what the thesis is. And what a lot of the work since then has been is how exactly would you calculate the amount of money? How administratively would you set up the departments that would allocate that money? How should that money be allocated? How long should it go? Is there any legislative precedent? Yes, there is. There was an office of revenue sharing under the Treasury in the 1970s.

So that’s how MMT ramifies down to the state and local level. The federal level can basically insulate the state and local level from any shocks if it so desires. Ideally, it would replace them entirely in terms of funding and would be just funding allocations from a single source. But that’s a much bigger haul than introducing new intra-governmental stabilizers.

Maxximilian Sejio: Speaking of these stabilizers then in relation to the state and local problematic you sketched out for us, some of our listeners might be familiar with the common MMT macro refrain of automatic stabilizers. However, in your work, you talk about autonomous stabilizers, which will function specifically for this state and local problem. We were wondering if you could chart perhaps the differences conceptually and say why you come down on autonomy instead of this more automatic framing for these stabilizations?

Alex Williams: Ultimately, because the stabilization isn’t automatic. There’s an administrative entity interposed between the trigger being hit and the money going out. The idea behind automatic stabilizers comes out of discussions with Nathan Tankus and with the desire to come up with an exact and explicit term for trigger based fiscal policy that is not as ugly as the phrase rules based fiscal policy. And so, the idea behind an automatic stabilizer is that you have your input variable, which is income. And then it goes through a fixed transform, which is your tax system. And then it comes out to the person who’s filing their income taxes as their income minus taxes. At no point is there any specific changes made to programs, or granting allocations, or spending allocations, or anything throughout that entire process–it’s totally automatic. It’s just like a linear transform.

An autonomous stabilizer basically takes that and says, “Well, sometimes rather than constructing a linear transform that solves all these problems, some of the problems can’t be solved this way, so what we need to do is an if-then framework, which is what this basically amounts to. If an unemployment rate goes above the trigger for dispersing benefits, then the benefits get dispersed. And those benefits that get dispersed have to take place through administrative agencies that sign off on funding, that sign off on grants, that sign off on this, that, and the other thing. There is no pre-existing channel where all of these things are happening and just go through a single transform. It’s autonomous because it’s not discretionary fiscal policy in that the rules are set beforehand and totally locked in and no one has to argue about them at the time. But it’s not fully automatic because it still requires that there be administrative, so non-legislative, agencies that ensure that the things triggered by the different autonomous proposals actually go out and happen. It’s a really “angels on the head of a pin” kind of distinction. But it captures a really useful new methodology for thinking about how to go about stabilizing the economy. And I really have Claudia Sahm of the Federal Reserve and equitable growth and her work to thank for this kind of stuff. Her work on the Sahm rule as a way of detecting when recessions begin is fantastic.

Scott Ferguson: I think it also helps to move political economy and the MMT project further down the path of thinking in terms of governance and administration that can be structured out in a number of ways, instead of going down the mechanistic pump priming, there’s an economy out there and we can push cash out into it to make it hum along. This is really taking on the problem of the whole consolidated economy and the way that credit structures that economy and saying, “Well, how can we make it more just, more healthy, more robust, etc.”

Alex Williams: Yeah, definitely.

Maxximilian Seijo: Also the bathtub metaphor is sort of left behind here. We’re not just filling up a bathtub with money when a recession hits.

Scott Ferguson: Right, through congressional spending and then taxing it out. I mean, that can work sometimes. But this is related, obviously, to some of the work that our colleagues have done about an MMT approach to inflation management or control. It’s not just about taxing and spending and waiting for Congress to get off their butts and doing something. It’s about designing a system that can, in the moment, react and adjust to needs and demand.

Alex Williams: It’s very funny because, in a way, it’s very old school cybernetics. Right, because you’re introducing if-then’s with feedback loops. I mean, that’s sort of Norbert Wiener early stuff.

Scott Ferguson: Is there an equivalent of the federal government in a Wiener kind of way?

Alex Williams: Oh, I just mean formally. It’s sort of alt-Cybersyn in a way–a Keynesian Cybersyn project. You know, like the storied Chilean attempt to have a socialist computer in the 70s–always a fun Google.

Scott Ferguson: Cool. Well, can you tell our audience perhaps where we can all find you on the interwebs and elsewhere?

Alex Williams: Yeah, so I’m gonna have a website at some point. I’m getting there very slowly. Right now, I am basically just @tragicbios on Twitter. It’s very funny that this account has wound up being serious econ stuff. It’s an old song by a band called Blanche Blanche Blanche, who are a tremendous band and we will have to have as one of the interludes here. And I also have a thesis. I have stuff at the Levy Institute’s website. I have stuff at Phenomenal World, the Jain Family Institute’s publication. And I have a piece out through Employ America. I’m sure we can add links. Yeah, there are lots of explanations and lots of explorations of overlapping problematics and sets of interests.

William Saas: Alex, thank you so much. And we would be absolutely remiss if we didn’t bring up that you are one half of Hillbilly Motobike who has produced not just one but song that we’ve used for a theme song on this podcast. Where can people go to listen to more Hillbilly Motobike?

Alex Williams: So it’s the Stereolab song title. It is at hillbillymotobike.bandcamp.com.

William Saas: Great music to think and write to.

Alex Williams: We try.

William Saas: Thanks, Alex.

Scott Ferguson: Thanks for coming on.

Alex Williams: Happy to do it.

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

Place, Participation & #Unis4All with Benjamin Wilson

Economist Benjamin Wilson joins Money on the Left to discuss heterodox approaches to place, participation, and the politics of university finance. Associate professor of economics at SUNY Cortland, Wilson received his interdisciplinary Ph.D. from University of Missouri, Kansas City (UMKC), where he took courses with some of the leading lights of heterodox economic theory, including Stephanie Kelton, Mathew Forstater, and Fred Lee. In both his research and his pedagogy, Ben combines his commitment to local democratic participation with a deep, MMT-driven understanding of social provisioning to create some of the most compelling community currency projects ongoing today. We talk at length with Ben about the intellectual, historical, and practical frameworks for these projects, which intervene in spaces ranging from the college classroom to the state and regional levels. We also talk with Ben about our collectively authored #Unis4All project, which derives from many of the principles of Wilson’s previous work to argue that college and university systems ought to leverage their considerable provisioning capacities in order to reject austerity and provide for the health and welfare of all in their communities. You can read more about this proposal on Monthly Review Online and at Public Seminar.

Check out some of Wilson’s important papers:

An Interdisciplinary Narrative: Oncology, Capital & Solidarity,” American Review of Political Economy, 2018.

A Dirigisme Approach to a Monetary Policy Jobs Guarantee and the Green New Deal,” Available at SSRN, 2019.

Housing, Health & History: Interdisciplinary Spatial Analysis in Pursuit of Equity for Future Generations,” Intergenerational Responsibility in the 21st Century, 2018.

Theme music by Hillbilly Motobike.


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

William Saas: Ben Wilson, welcome to Money on the Left.

Benjamin Wilson: It’s a great pleasure to be here with you guys.

William Saas: I want to start by asking you to tell us a little bit about your background and how you came to be the researcher you are today?

Benjamin Wilson: You bet. I’m glad to share. I’ve been thinking a little bit about it lately, especially with the crisis unfolding. During the aftermath of the last crisis, I was in retail banking, if you can believe that. And at that time, I was doing a fair amount of work with a group that was in the Community Reinvestment Act. I had been fortunate enough to start to find my way out of the retail banking office and get out into the community. And I was teaching financial literacy classes in a bunch of neighborhoods in the Kansas City area that had been particularly hard hit, not just by the crisis, but by decades of disinvestment. And so, this was great on a number of levels. I was getting to speak Spanish again, which I had done as an undergraduate and a little bit in graduate school. And I was teaching again, which was really exciting and fulfilling. And I was getting to know a bunch of people in Kansas City from a bunch of different activist organizations, primarily around housing and the arts, but also a group of people that were starting a bunch of urban gardens and local food systems work.

During this time, it was a really conflicting job because I really enjoyed this aspect, which was not what I was being paid for. And then the actual retail banking work was stressful because people were really struggling and it became painfully obvious. The retail banking sector isn’t really analyzed enough in the economics literature as really a regressive tax structure. I think James Baldwin said it best when he said it’s really expensive to be poor. The banking system really does do that. Rich people don’t have to pay for their checking accounts and they don’t have to buy checks. They get all these sorts of perks and freedoms to use the monetary system and payment system where poor people don’t. So, there’s a lot of conflict going on for me at this time in terms of what I was doing for money and what I was doing through the bank in these community groups and teaching these classes.

My brilliant and beautiful wife and partner recognized that. She said, “You are a very different person when you come home these days. I can tell when you’ve taught. I can tell when you’ve been out in the community and you’ve been doing these things. There’s a glimmer in your eye that I haven’t really seen since you were in graduate school all those years ago and I think you should go back and get your PhD. You should make this neighborhood community development and teaching a reality.” This was super exciting, but at the same time terrifying because, as much as I loved teaching and economics and thinking about development and all those things, the math as I moved into the PhD program was daunting and extraordinarily challenging. I mean, literally, my micro-macro economics professor had worked for NASA. He got bored with rocket science and went into monetary theory. That sort of thing makes economics really attractive. You really feel like you’re doing hard science and that it works very well. But at the same time, there’s all of these contradictions.

In one of my classes, they teach you all of these different models. And after the first couple of models, they just start saying, “And assuming the standard assumptions,” and you don’t even question them anymore. Kind of exasperated and tired of doing constrained optimization, I asked, “Are there any models where we’re not maximizing or universally maximizing agents because, frankly, I don’t feel like a maximizer very often.” I got some chuckles in the class and the professor turned to me and he was like, “Well, yeah, we get that, Mr. Wilson. So, in the constrained optimization problem…” At the same time, it just seemed like there are a lot of barriers. We’re just coming out of the crisis and we’re in our first home that we’ve ever owned, and we’ve got a baby on the way. And so, we’re talking through this and Sara goes, “Well, why don’t you look at UMKC? They’re here in town and maybe their economics program is a little bit different. Who knows, they might not even have a PhD program, but go ahead and check that out.”

I can still see the webpage in my head, a picture of Abba Lerner and Bob Brazelton and I had to read it two or three times. I think I was like, “What the heck is heterodox economics?” This is amazing! I think that this is really something that could be really spectacular. And I kept digging into it and saw that they had this Center for Economic Information that was run by Peter Eaton and Doug Bowles. They were working with a lot of the community groups that I was already familiar with from the bank. So, I went in and talked to Peter who was the director of the PhD program and sat in on a Fred Lee micro class and a Jim Sturgeon institutional economics class and was like, “Man, this is a great fit.” I then applied and started classes that following Fall. We had a new baby and all the graduate classes were at night, so I watched Ned during the day and Sara took the lead and worked during that time and then I went and did my studies and classes at night and the rest is history. So, it’s really an amazing stroke of good fortune and support from Sara that I ended up at UMKC. It’s such a robust and outstanding political economy program–it was just a perfect fit. And it was right under my nose the whole time.

Scott Ferguson: So, for those listeners who aren’t aware exactly about what UMKC economics all means, could you just flesh out a little bit more what that program is like? What kinds of assumptions does it have compared to other more conventional programs?

Benjamin Wilson: Yeah, well, it’s completely different from the orthodox training that I was talking about before. Economics has increasingly become this really constrained and mathematized model-based sort of investigation of how the economy works. And in order to do that, you make all sorts of assumptions about the components of the model, most notably, a universal agent, or that we’re all behaving identically in our rational optimizing decisions. And this allows you to make some really big claims at a macroeconomic level. This became popular in the 1970s, really with Milton Friedman, and then his student, Robert Lucas, in making the argument that we need to move to really strong micro foundations to understand macroeconomic activity.

At UMKC, there’s much more of a broad theoretical spectrum for thinking about how the economy works that goes back to the original writings of Adam Smith, David Ricardo, Karl Marx, John Maynard Keynes, Karl Polanyi, Thorstein Veblen, and all sorts of other ways of thinking about the economy, not from an individualistic perspective, but from all sorts of different levels–the way I frame it is “levels of aggregation.” It entails thinking about it from a geographic sort of perspective, instead of one where, for example, the economy has experienced a great deal of unemployment lately, we’re almost at 40 million unemployed Americans, and that’s a scary and terrible number but to really understand that number, you’ve got to drill down to lower levels of aggregation. One level of aggregation down from the national level would be, for example, the state level. Which states are being hit the hardest? And if you kept specifying and drilling down on that question, you would arrive at different neighborhoods and communities that are getting hit by unemployment much harder than others.

UMKC really gives you the freedom to think about and to theorize why those differences exist, to put it into historical and spatial context, and to play with different models. I think one of the things that people assume when you talk about heterodox economics is that it’s just about theory and history and things like this and there’s no models, but Marx’s circuit of money capital is an explicit model of capitalist production that I’ve found is extremely useful, especially from a spatial and data analysis perspective. I ended up writing my dissertation by attempting to identify the locations of the different stages of the circuit–so the initial purchase of commodities, where the production of those commodities are converted into a different commodity, and then the final sale. So, there are all sorts of different ways you can think about how society produces and reproduces itself and all sorts of ways of thinking about money in particular. When I got to UMKC, this was before a bunch of people ended up leaving, but Stephanie Kelton was there, Randy Ray was there–both big leaders in the Modern Monetary Theory field. John Henry, the economic historian was there and just such a great influence on thinking about how the evolution of economic ideas translates not only to the academy, but to policy making, and all these different things.

And, of course, the late Fred Lee was still there. I’m super fortunate to have taken classes with him. Coming out of the crisis, the Occupy movement was still really going on and Kansas City has one of the Federal Reserve Banks in it. There was a big Occupy movement in, I think, it was my first semester there. We went to the rally and we were walking up, Sara, myself, and we were pushing the baby stroller and Fred Lee was up there. It was an awesome setup because there was a big art display of these empty shipping containers that was a critique of international free trade and all this right in front of the Federal Reserve Bank. That’s where everybody was camping for Occupy. And Fred was up there in one of his union sweatshirts, and he began his speech with his arms raised shouting, “I am an agitator!” I turned to Sara and was like, “He’s got that right. Because he was a really tough teacher. He wasn’t afraid to let you know when you weren’t working hard enough and where you really needed to step your game up. He had just given back some writing and let the entire class know that we were not living up to his standards. Fred was an amazing character and has made a permanent impact on the way that I think about economics as a social provisioning process and all sorts of things.

So, yeah, economics at UMKC, I can’t say enough great things about it and my advisor Matt Forstater. Thinking about political economy and Black political economy, thinking about different ways of organizing production systems and co-ops, and being introduced to alternative currency systems–it’s just a place of tremendous amount of academic freedom and creativity in a place where it’s non-rivalrous. Everybody, from the faculty to the students, we’re all just curious and all bouncing ideas and working together. It’s a really magical time in my academic career for sure.

Scott Ferguson: Can I ask a follow up? With your experience, your knowledge, and your know-how as a bank employee, did that create cognitive dissonance for you when you were suddenly finding yourself in the midst of a heterodox economics program, which is also known as being one of the epicenters of Modern Monetary Theory, or did that prime you in a way to be open to these heterodox ideas?

Benjamin Wilson: I think the banking made me open but the mainstream training that I had had before gave me a lot of pause. Frankly, I was a little bit terrified about the prospects of getting a job and all those sorts of things when it first began. But it didn’t take long. Evidence and reality overcome this sort of model-based notion of how the world works pretty quickly. It didn’t take long for me to really start to buy in. And I think it was really helpful and healthy to go in skeptical and have the strong orthodox training, whereas for a lot of the students there, they were coming from programs knowing what heterodox economics were was and had chosen UMKC in a much more explicit way than I had–for MMT and the institutionalists that were there and things like this.

So yeah, I think it was a healthy mixed bag. Working in the private sector for as many years as I did really prepared me for the rigors of graduate school and in a way that was tremendously helpful. I was so motivated. Having seen and started working with these community groups, I was just so excited to be hearing about ways that we could really make some significant changes to our communities and neighborhoods, and even at a huge, macroeconomic scale with Modern Monetary Theory and the jobs guarantee and all those things that I was starting to get familiarized with.

Maximilian Seijo: To dig in a bit on MMT, one of the popular misconceptions is that people think MMT opens money’s capacious public powers solely to a currency issuing nation-state, which leaves municipalities and other big public institutions to a sort of private local money recycling circuit. However, your contribution to the expansive MMT project variously challenges such notions. Can you explain to our listeners how you do this specifically through your approach to locality, space, and place, as well as why that’s so important?

Benjamin Wilson: Yeah, that very notion was something that I struggled with early on. Transitioning and working with the Center for Economic Information and continuing to work with these neighborhood community groups, going in there and talking about a Jobs Guarantee and buffer stocks wasn’t going to be a very useful way of making my services available. They didn’t want a macroeconomics lesson. So, I knew how important this was. And I knew that I definitely wanted to figure out a way to integrate this into my research, but at the same time, I was committed to understanding the economy from the ground up sort of perspective. And I could see that there were so many good ideas and so many hard working people working toward urban gardening and public art and these sorts of development projects, but they are always working on shoestring budgets. So how can I figure out a way to use the power of MMT to alleviate these budget constraints that are being really kind of unfairly saddled on people that are doing really good social and public provisioning?

What really started to click in those first couple years was the first summer I got to participate in the housing conditions survey. UMKC, for the better part of the last 20 years, has been running a really detailed housing conditions survey of the Greater Kansas City area. They look at the structure from the roof and the gutters, the fascia and the soffits, whether or not there’s cracks in the foundation and broken windows, and rating all of that on a five point scale along many different levels. They also rate the grounds that the structure was on–if there is a structure on it–if there’s none, then it’s vacant. Is it being overgrown, are there cars on cinder blocks, is there litter, is the private driveway and sidewalk deteriorating? And lastly, they rate the infrastructure around the house: the sidewalks, the curbs, the street conditions, whether or not there’s a street lamp available on the street and if it appears to be working and operational, the water runoff systems, and so on and so forth. So, as I started conducting these housing conditions surveys, it was really amazing to see the city from a new perspective.

I was basically raised in Kansas City and seeing parts of neighborhoods that I’d never been exposed to. This brought together time and space really nicely and aided thinking about the evolution in the age of different neighborhoods and why some neighborhoods were suffering from such great disinvestment versus others that were thriving and had great schools. At the same time, Kansas City was experiencing one of the largest school closures in the nation’s history, so that all of a sudden there’s all of these empty buildings in the middle of these neighborhoods. And UMKC, in partnership with the local children’s hospital, got awarded a housing and urban development grant to do an environmental study of the impact of housing conditions on pediatric chronic disease. I got to start working immediately with that group and we started to map and link pediatric chronic disease. I started with food allergies. An allergist there had asked me if I would map their patient data because they had the idea that food allergies were related to people’s access to healthy foods.

We mapped all the food allergy data, used USDA food desert data, overlaid them, and then did some spatial analysis to show that food allergies were clustering and spatially relational to these food deserts. Food access and diets looked to be a contributor to what we were observing–that is, a strong increase in food allergies in children not just in Kansas City, but nationally. I mean, if you’ve got a kid, you’re not sending them to school with a peanut butter sandwich anymore. But the asthma data, once we started mapping that, we saw that it was following the same sort of spatial patterning–clustering in the same places where the housing conditions and housing stock was deteriorating, where there was less investment and public infrastructure, where there were these closed school buildings, and at the same time, where neighborhood organizers were planting urban gardens and doing things to try to address some of their material needs.

Right about that time, Pavlina Tcherneva published a really great paper in the Review for Social Economics that looked back at some Keynesian ideas called “on the spot job creation.” And at that point, it really clicked for me, because these clusters are just big spots all over the city where there’s a massive need for meaningful and useful work. Planting an urban garden and providing somebody with the opportunity to do that not only solves food access or contributes to solving a food access problem, but also it gets people out in the community. One of the big things that we talked about in the meetings about the community gardens was the increased activity and walking and engagement of people that these gardens provided, and also a steep decline in criminal activity. Having people on the streets generally prevents bad elements from occurring. A little bit of investment in an urban garden has this really expansionary public goods outcome where we’re not only helping with an immediate need of food access, nutrition, and health, but it’s also a preventer of criminal activity and things that we’re not interested in having in our neighborhoods.

It’s also translating into more gardens being planted at neighborhood schools and getting children involved so it becomes an environmental educational process. And so, if we were going to think about a Jobs Guarantee and where these jobs should go, then GIS, mapping, and understanding the social provisioning process spatially really gives us a data driven way of saying this is where the work should go. And not only will this work do the immediate thing of creating an income for somebody, but also all of these social and environmental benefits are possible through creativity. So, when all of those things started to click, Modern Monetary Theory, spatial thinking, housing and health, and the environment all sort of coalesced together for me quite nicely. And I’ve been pushing this narrative ever since.

William Saas: So would it be fair to say that is the MMT influence? Are you thinking specifically like Fred Lee’s heterodox economics and Edward Soja spatial turn, or are there any other specific figures and concepts that factored into your work there?

Benjamin Wilson: Yeah, I mean Fred Lee primarily with the idea of social provisioning and grounded theory and methodology. And then what Soja and Lee both have in common is really this agency driven capacity to change environments and to make life better. That value isn’t just the process of an invisible hand waving and prices emerging. I like Soja a lot because his focus on spatial justice is an alternative way of framing the value discussion. I think this is one of the things that is really needed in a more robust way for our conversations on political economy: what is the next theory of value? I mean, it’s not an exchange theory of value. That’s not working out very well for anybody and prices don’t just emerge spontaneously through the aggregation of individual optimizing decisions. That’s not right. Fred Lee’s theories of administered prices seems pretty spot on, but who should have the right to administer those prices and how do we organize that sort of decision making process? Soja’s work in Los Angeles with organizing the bus riders union and thinking about public transportation, workers rights, and union organizing at regional levels to ensure the public provisioning of goods and services allows for some sort of equity. And the distribution of those public goods, I think, comes together really nicely. I kind of think of Soja as adding the spatial layer to Fred’s heterodox economics. And that spatial layer in combination with Fred’s social provisioning is a nice place for MMT to make the claim for credit and monetary provisioning to those spaces and the supportive public value generation and creation.

Scott Ferguson: Yeah, absolutely. One of the things that I really appreciate about your work is how much you foreground participation. And I see it all over: both in your own research and in your teaching. Part of this, I know, is that you build in a kind of reflexive, meta-participatory elements into your pedagogy. And I’m wondering if you can tell our audience about how this works. Maybe you can start with the kind of basic classroom level of work that you do? And then we can build out to some of the extrapolations of that.

Benjamin Wilson: Yeah, I think that’s a nice compliment to this vague answer to value that I just opened up. At UMKC, with the idea of sovereign currency issue and tax driven money, they started something called the “Buckaroo program,” where in the classroom the faculty member would administer or spend Buckaroos into existence for students doing volunteer work in the community. At the end of the semester, you would pay back some of those Buckaroos or all of those Buckaroos to meet your tax obligation. By the time I got to UMKC, I remember Matt Forstater trying to describe it to me in his office and he had to kind of search around for a Buckaroo at that time. I didn’t really get to experience it there as a student, but at one of the first post-Keynesian conferences that I went to that they hosted, Fadhel Kaboub came back and he gave an amazing presentation on how he had taken the Buckaroo to Denison University. He had taken it to a whole other level.

One of the really brilliant things he had done is he started keeping all the data on all the service and applied learning that his students were doing in the communities and showing that every semester, every class, and every year, anybody that was participating was fully employed and there was no inflation in the Denison dollar. And at that point, I would say, “Yes, this is exactly what I want to do!” When I get my job, I’m going to implement this in my classrooms. And we’re going to start pushing this even further. Because one of the drawbacks of being in Kansas City studying MMT in the early 2010s was just how far off the radar MMT was politically. I mean, other than Stephanie Kelton’s blog, which was just starting to gather some steam and get some recognition, and Randy’s work would have been widely published and his book was well received, but even in heterodox communities, there was some resistance to modern money.

Politically, it just seemed like it was gonna be so hard to push these really great ideas and programs forward. I really saw the classroom activities and these hands-on models as a really good way of saying, “look at all this meaningful and useful work that we can do in the community”–I mean, hours of it. And the tax driven circuit here is just a small percentage of somebody’s grade, think about how we could lever this up if it was actually the US Dollar. It just seemed like a really clear way of gathering a lot of really good data about not only what kind of jobs people could do, but also giving the students the hands-on experience of thinking about why the Denison dollar, the Buckaroo, or in my classes, the Benjamin is demanded, and why they want it in the sequence of spending before tax receivability. So, on multiple levels, you get the MMT hands-on utilization of the currency system. And you can see the light bulbs kind of go off in the classroom.

I like to have a series of paydays at the end of the semester and then we have the big tax day. Everybody pays the tax and there’s a few people in the classroom that still have Benjamins because they’ve done more work than they needed to do for the tax liabilities. So, there’s an element in the thinking there about the meaning of work. People were working more than they had to because they found something that they found rewarding outside of just the monetary value or what it was that they had to do for the class. Then, there’s always a handful of people that either forgot about the assignment or weren’t interested, or couldn’t sort it out in their schedule. And so, a private market emerges from the public sector spending where trade occurs and the Benjamins settle out and everybody ends up meeting their tax obligation. So, there’s that level of understanding.

Then, it opens up questions about Buddhist economics and labor as a path toward the purification of human character. You start to think about the experience that you get in these organizations that you’re working with and questioning things. Are they producing efficiently? Are there rational agents here? It opens up questions about human nature at a big theoretical level, and then there’s this really practical experience of having to go out and find the opportunity. So, it’s kind of like modeling a job hunt. They’re working with other people and they’re solving a problem. What I’ve tried to do and have done at Cortland with my community partners here is I’ve tied the Buckaroo, or the Benjamin program, to existing grants sponsored programs. My community partners have helped me a great deal here.

Susan Williams at Seven Valleys Health Coalition, in particular, in sharing the development of these grant writing processes, and then when the award is made, I share the grant with my students and we go through what the objectives and goals of the grants are. Then, we formulate projects around those goals and objectives to help our community partners reach them with things like survey data analysis, market analysis, a little bit of data crunching here and there of those survey processes. By helping them execute these grants, they’re more likely to get the next one. So, we created this spiraling feedback mechanism where my students are really making a meaningful and useful contribution to the expansion of the food system and trying to solve food insecurity issues here in the Finger Lakes region.

Specifically, I think grants have really helped me think about value creation outside of simply profit objectives. The scientific process of building an experiment and getting grant funding to test hypotheses, especially those that are improving sustainability issues and food production, are measurables. We set goals, we set targets, and we think about what it is that the deliverable will be. And then we know when we’ve executed if we’ve reached that or not. Those are really valuable contributions not only to knowledge but also to the community. Because now there’s more food in circulation. There’s less food waste that is going into landfills and more of it that is going into composting sites. There’s less need for pesticides and fertilizers, so we’re hoping to kind of contribute to the cleaning up of the water systems.

There is all sorts of really interesting environmental and social data beginning to emerge around these contributions of the Benjamin, which started with like an $8 investment for some fancy business card paper and some cartridges. Now, we’re cranking out 600 to 800 hours of social enterprise work each year, delivering objectives and goals and federally sponsored research grants. And it’s translating into real investment. Hopefully, we’re really close to a year round farmers market and community kitchen here. Yeah, it’s been a super rewarding and interesting process for sure.

Maximilian Seijo: In that vein, in the summers you’ve expanded this currency assignment for your classes, taking students to the Adirondacks to reckon with these complex questions about social provisioning and ecology. We’re wondering if you could reflect a little bit about how that experience has changed your thinking and perhaps some of the specifics of the ways students have interacted with that sort of regional approach?

Benjamin Wilson: Yeah, actually I’m supposed to be in South America right now. I’ve been sharing the Adirondack program with faculty in the area, and I’ve teamed up with a really brilliant guy at Tompkins Cortland Community College, Dr. Kelly Wessell, who’s an environmental scientist there. He’s been running this study abroad program in Colombia that investigates the Amazon River Basin and the Andes Mountains. This year, we were supposed to spend some time in Medellín as really an international compliment to the work that we’re doing in the Adirondacks, which is grounded in a National Science Foundation grant called Common Problem Pedagogy that was an award for our Dean Mattingly here at Cortland.

So, we’ve been going up to the Adirondacks, myself, a GIS professor, Christopher Badurek, and a history professor, Scott Moranda. And we all teach our own independent courses about the Adirondacks. Scott has a history of tourism class. Chris’s class is about more technical GIS and data analysis. We fly some drones there and collect some original data, and then look at other national or state level collections of data of the park and region. And then mine is a political economy of the Adirondacks class where we talk about the history and development of the park, and the natural resource wealth that it possesses and how that’s influenced the development of New York state. People don’t realize that the Adirondack Park is larger than, I believe, seven US states. It’s a massive geographic area with only 150,000 year round residents. It’s this really fascinating place for thinking about the relationship between human production and reproduction and the ability of the environment to produce and reproduce itself. We think a lot about Marx’s idea of metabolism, in which working with the environment transforms you as you are transforming the environment functions as a way of framing a value and production concept.

For a long time, there’s been this Darwinian idea of struggle for life where the early settlers in the Adirondacks really struggled for life and the ability to reproduce themselves because it was such a harsh place to live. But then they began to overcome some of those and the struggle became less and they started to create struggles for the environment. They started cutting down timber and burning down massive amounts of the forest because of trains coming through and sparks flying. So, the struggle went the other way. And they had to react in a very ecologically sound way. New York state wrote a clause in their constitution called the Forever Wild clause. This was roughly 1880 and it remains probably one of the most stringent environmental laws in US history. But the watershed of the Adirondacks is essentially all the water from New York City that travels down the Hudson. So, the deforestation problem was poisoning all of that water, making it impossible to drink, and really putting at risk the entire ecosystem in New York state in those decades.

We’ve been going up there and building relationships with year round residents, thinking about what are the common problems that we can approach from these different disciplinary perspectives and how SUNY Cortland and its position up at the Raquette Lake facilities can contribute to ameliorating and making the struggle for life a little less harsh up there. And certainly, a Jobs Guarantee and ecological production systems would be a really meaningful contribution to that space. I’m very sad that the Colombia trip was canceled. But I think that it will be equally thrilling to kind of have the opportunity to go down there and experience the Amazon, which I kind of picture as being in the infancy stages of the Adirondacks at that turn of the century when the first people started doing artwork and landscapes and encouraging people to go out there and experience the wild and rustication, and the health benefits of getting out into nature.

I see kind of the infancy stages of ecological development and tourism on the Amazon and up in the Andes compared to some of the experiences of American wilderness tourism. Growing up in Kansas City and traveling across the great state of Colorado–I spent a great deal of time in the Rockies–these spaces have just become huge commercial tourism spots. You’re basically just going to a different suburbia, but up in the mountains now. And so, there’s that tension and that loss, and with that, massive suburbanization of the wilderness. There’s greater possibilities of invasive species, such as the death of millions of trees from a Japanese beetle a couple of years ago. The utilization of the water systems to grow a lot of golf courses is also transforming it in different ways. And wildfires and forest fires, the same sorts of things that we’re seeing in California, are occurring in the Rockies as well. The balance between human health and environmental health and what it is that we’re trying to produce and why we’re producing it are all things that I think these vacation natural environments really provide an opportunity for thinking really carefully about those things and assigning different modes of value production.

William Saas: Pulling out for a slightly broader view, you’re working with Rohan Grey and Robert Hockett, who were guests on the show before, developing a digital University-based currency that’s key to green provisioning and local food systems, which is in line with a lot of your previous work. Since that work, us four have started to work together on a related project. I was wondering if, by way of getting us to a conversation about the “Unis,” you could kind of walk us through the structure and goals of the project that you have going with Rohan and Robert?

Benjamin Wilson: Yeah, I mean, talk about another lightning bolt strike of good fortune and luck. It was early here and all of a sudden, I started seeing this guy Robert Hockett posting about things like the finance franchise and these modern money spaces, and I was like, “Oh, my gosh, he’s at Cornell.” It turns out that we actually both went to the same high school in Kansas City, Shawnee Mission East, and he spent time at the University of Kansas, as I did. So it’s just an amazingly small world. Not long after that, there was news that Rohan was coming here, which was really exciting. I had met him at a MMT conference years ago and was just blown away by this Columbia law student who was single handedly moving mountains for modern money and bringing it into this legal discourse, which I think has been so important in raising its visibility. When you add up Robert and Saule’s writings and Christine Desan’s work at Harvard, this has really become exciting.

Anyway, I brought Robert and Rohan in on a National Science Foundation grant that I was working on to couple natural and human systems. I mean, even at that level, the idea that we have to re-couple natural and human systems, I think, is problematic. But I felt like the work that we were doing in the food systems and the development of this currency system locally was a mechanism for doing that by connecting effort and work and socioeconomic production to the ecology to grow a meaningful and useful food system function. So yeah, I started working with them and thinking about what would it take to allow the currency system that I’ve created to expand and be receivable in the community. And so, I’ve been thinking about it in terms of Bob and Saule’s finance franchise model and what a public franchise would look like and how we might be able to circulate funds in these sorts of ways and how that might look.

The next level of that and one of the things that Rohan has been instrumental in creating, is this idea would spread a lot faster if it was digital. Because people are becoming more and more comfortable using their phone to make purchases, and we have a bunch of different cards in our wallets that we can swipe. If we can create a digital ledger in which it’s circulating and it’s providing discounts locally, and if we can begin to allow it to circulate in the local community, then we can gather them much more data. It considers thinking about impact factors, the movement of the currency, and where the balance sheet impact is taking place. And I think this is a really good time for this.

The spirit behind Bitcoin, I think, is terribly misguided. The idea that they need to disrupt the existing monetary hierarchy and this idea that we can create a decentralized cryptocurrency that mirrors the barter story of neoclassical economics–I don’t know how you can get more evidence that that story doesn’t exist–but it’s done a great deal in terms of inciting the public imagination about what money is, how it works, how it gets distributed, and what we should be doing to get money. I mean, should we be solving complex algorithms and burning lots of coal in order to achieve Bitcoin or can we simply and easily facilitate the transition of these as if we’re diversifying our food system and reducing carbon impact and all these sorts of things?

I’ve been moving toward this idea of using these digital currency systems as kind of the Benjamin on steroids in terms of data collection and expansion into the broader community to allow people to see what a Green New Deal might look like in their community. These are the jobs. This is the outcome. These are the things that are made available when we start to reimagine how money and finance works, not only at a national level, but also locally in our communities as well.

Scott Ferguson: The Benjamins classroom project demonstrates one pretty easy, straightforward, principle in Modern Monetary Theory of what you’ve called “tax driven money.” It presupposes that money starts with an obligation that’s been levied onto a community, and in this case, the classroom. That obligation is you have to complete assignments to get a grade at the end of the semester. Then you use that loop of the obligation to incentivize meaningful social production. What happens to that story when you start scaling it up to the whole university and the community and the food system around the university?

Benjamin Wilson: The word that they use in finance is that it “amplifies” it. I mean, there is just so much more institutional backing, power, and connections. One of the ways that I’ve hoped that it would work as we’ve been developing this is that the technology would be kind of like a toolkit that universities and classrooms could use and package, and that different communities could use it for what their local ecological and social issues are. Not every community has a food access problem and not every community has the same sort of farming capacity that we have around us. It might be a problem of public transportation, it might be a crime issue, or it might be a need for the cultivation of public art and the provisioning of better housing conditions. Whatever your local historical and cultural context is, use this tool and this mechanism to start generating productive capacity and effort. And do so with the idea that we’re promising to continue to provide educational opportunities and that the impact of this is going to create other private sector social provisioning–I don’t even like dividing it up into public or private. But when people are doing things and have income and they’re producing stuff, it stabilizes things for everyone. There’s so much less risk. What better way to stabilize things than to ensure strong public provisioning of education, health care, and environmental services.

So yeah, I’ve seen it as kind of a teaching and community impact model, but the Federal Reserve has really opened the door to something, I think, much bigger than that. With the crisis of 2008, unusual and exigent circumstances arose in the Federal Reserve Act language such that they opened a number of facilities to stabilize the balance sheets of the banking sector. This time around, the Fed has openly acknowledged that that’s not going to be enough. This is much bigger than that. It requires much more creative and broad stabilization of balance sheets. So, they’ve made available this “Municipal Liquidity Facility,” which is for states and local municipalities to take advantage of this essentially lender of last resort liquidity provisioning mechanism of the Federal Reserve Bank. I think, if we’re gonna push on that a little bit–and I don’t even think it’s that much to push on it–then this is just the first wave of community Quantitative Easing, and that we can do even more.

We can be more creative and university systems, in particular, as anchor institutions distributed all across our states and all over the country as the largest employers, as huge landowners, are too big to fail and should have access to this sort of immediate balance sheet liquidity provisioning and the ability to just sell finance moving forward with the guarantee that the Federal Reserve will always buy Munis–and what we’ve started to call “Unis”–to do those things. I think it’s an amazingly exciting opportunity to really think about what public finance can look like over the next 20, 30, 40, or 100 years. That is, really thinking about the things that we’re looking at in these grants as value producing activities because they make our communities more resilient, they make them more stable, they increase everybody’s quality of life, they allow us to feel like we’re free from disease, and that, if natural disasters that are prone to happen happen–Michigan is flooding today and there are the wildfires I mentioned earlier–then resilient and stable communities allow us to address those problems much more effectively than the balance sheet crisis marginalist approach to just getting through and just surviving.

We need to start thinking about how do we not only survive crises and these hardships, but how do we prepare for and how do we thrive coming out of them. I think that is a much more robust and healthy way of thinking about this. I don’t think that’s what Goldman Sachs is doing or what the banking sector is doing. I mean, we’re seeing that play out in the data. We’ve all seen the market having a record day as 20 million Americans file for unemployment. That is a huge break. There’s something really structurally wrong with the way that the monetary system in this country works when that is occurring. You know Jamie Dimon is not gonna let a good crisis go to waste and we are already seeing the funneling of the responses moving right to the top just as it did in 2008. And this is an opportunity, I think, to allow the balance sheets of working people on Main Streets and College Avenues to survive this and to be more resilient moving toward the next one.

Maximilian Seijo: I’m really glad you brought up Unis and I think it’s actually useful to contextualize the way that this idea came about and also how it links up to the broader lineage of your work. As the coronavirus started to become not just an economic depression but also a very specific crisis for universities, I thought about how this Muni facility was not really being thought through on the Left and how a limit with regards to the imagination of what was possible of linking up these balance sheets was playing out in a depressed and lamenting way, specifically around University financing. So, I tweeted about this and the tweet sort of caught on to the point where, Scott and Billy, we got together and then roped you in to actually start thinking about a proposal for pushing Unis in a way that you’re suggesting, to really rethink finance especially within the crisis framework. And so, it’d be interesting if we can talk more about the Uni. Of course, we’ve published our open letter in Monthly Review and Public Seminar, but I think we could dig in a little bit and I’d love to hear your articulation of the way a specific response to this Coronavirus crisis is playing out within them?

Benjamin Wilson: Yeah, I mean, I was still in retail banking when the first crisis hit. Having no understanding of what was really unfolding, the experience there was we had all of these conference calls, all of a sudden they’re cutting everybody’s wages by 10%, there’s going to be this huge contraction in the economy, and all of those doomsday things started to spread. This time around in academia, the general sentiment, and not having lived through it on the campus, has been like, “Oh my gosh, here it comes again” attitude or capitulation. In other words, there’s nothing we can do about this, here it comes, so what we’re going to fight for is if we’re going to cut, we’re going to cut on our terms, which is really so sad and not necessary, especially when you look at the response that the Federal Reserve has afforded to the financial sector.

I mean, they have not been holding back. With the MLF money, if Goldman Sachs could get that, it would all be gone already. So, that crack in the door for the public sector is something that we’ve really got to kick down at the state and city level. The amount that the MLF has made available is, by some back of the envelope calculations, the same amount of revenue shortfalls that they’re forecasting. So, at that point, there’s no reason for any cuts–standard operation continues. But that’s not enough, right? We’re going through a health pandemic and a crisis, which demands a lot more resources–resources in testing, resources in understanding public safety, resources tracking where the disease goes and being ready for the potential of a second wave, and investment and needed effort to understand and develop vaccines. And university systems and hospital systems should be playing a frontline role in that public research for both treatments and vaccination.

It seems to me to be a really good opportunity to say, “Hey, wait, let’s not contract the economy. Let’s not lay these people off. Let’s not reduce our public sector employment.” Those are the people that are getting hurt the most by this lack of federal assistance to state and local governments. The whole idea of right and left, I think, starts to get really blurred here when we start to think about the diversification and democratization of finance down to local level university systems, where, for instance, the SUNY system is 64 campuses all across the state of New York and 90% of our population lives within 20 miles of a SUNY campus. The spatial distribution of these resources would be immediate, and that’s one of the big challenges that we’re seeing with any of the recovery efforts–that all of these resources are getting sucked up at higher levels of aggregation and they’re not filtering down to your local burger joints or even to your small local colleges, private and public. We need to think about what are the anchor institutions in our communities. What are they delivering? How do we promote the strong public provisioning of goods and services, so that we don’t experience a massive downturn and so that people are able to buy and spend and support local businesses and the things that we all think of as making America a great place to be? Nobody thinks of a Walmart and is like, “Yeah, that’s what’s awesome!” It’s much deeper than that.

I get really excited about this, and I’m so grateful to be working with you guys. I mean, it’s just been so much fun the last couple of weeks thinking about this, and to think of the Benjamin as like now being part of a Federal Reserve possibly. It’s just kind of a mind boggling thing. There’s lots of details to be worked on and hashed out, but lots of the things are already in place, institutionally and legally, as state institutions with many of them already having strong relationships with credit unions. If you read the community bank literature, in many ways, a university reads like a community bank, in terms of relationship building and investing and knowing their communities. They’re already taking in deposits from their students and allowing them to access those deposits on demand at their local restaurants and things of this nature. So it’s really not that crazy, and so much of it is already there and available. The more we organize and the more that we get our colleagues, administrators, and the ears of our state representatives to listen, I think that we can really make an amazing transformation in terms of what we think of as public finance.

Scott Ferguson: Yeah, and it’s an incredible opportunity for participatory learning to spell out the way the Uni reverses or inverts the logic of money that we’ve been brainwashed to accept. The Uni is not borrowing. It’s not moving private money or tax dollars that exist somewhere else to the university to help it out during a crisis. In fact, it is bringing credit issuing authority to the university, or better as you were suggesting, it is actualizing the credit issuing authority that a university already has, and mobilizing it toward the public good.

Benjamin Wilson: Yeah, it’s just leveling it up. I mean, it’s a grant. You don’t need to pay back a grant. That’s why they work. If you believe that profits, from the Marxian framework, are driven by the exploitation of labor and planet earth, then we need to diversify our value creating system. I think that the recent concentration of wealth and power and finance and speculation and bubble creation is evidence that exploitation has its limits. We need to really open up the ideas and imagination around what it means to produce collectively again. Goodness, the idea of the rugged individual, I guess it makes some sense on an intuitive individual level like, “Yeah, I work hard and I’ve achieved these things,” but nobody does anything alone. This is something that makes that explicit.

This is about how we need to unify, we need to organize, and collectively, we can produce so much more and do so much more than we can ever do alone. Even on their own terms, the self-made billionaires–there’s only like six of them–that’s not good odds. That’s a terrible model for democracy and freedom and all of these things that we hold to be. The idea that I’ve kind of latched on to recently is that, we the people, we the people have the capacity to make promises collectively to each other to deliver public health. We never question anything when it comes to the military, right? We the people promise to keep ourselves safe and secured so here’s a trillion dollars to go do it. No, we the people want to make the promise that we are provisioning and guiding strong public education and innovation and community resilience. And we the people promise to deliver and execute a new and more robust public health system that will protect you against pandemics.

There are all these talks about like, “Well, more people die from cancer and more people die from car accidents.” Well, we should be spending more money on cancer research then. Those are numbers maybe that we don’t need to accept. The fact that so many thousands of Americans die from the flu on an annual basis, I think, is an embarrassment. That is evidence of a really failed public health system. And Coronavirus is just exacerbating those realities. And it’s also shining a light on so many of the gross inequities that are so historically latent in this country, in terms of real estate and housing and all of that really long and ugly history. David Freund’s interview, and his book Color Property, is one of the things that I think stands out really clearly here–the science of appraising real estate was specifically designed for a particular outcome that greatly enhanced the property values of white people. How is this any different? This would be a new standard of appraisal and valuation. I think that there’s a lot of different and creative ways that we can use knowledge from the past and learn from some of these failures and really do something collectively much greater and more productive.

William Saas: Very well said. I’ve had some fun as you’ve been talking imagining you giving your financial literacy lessons. What was that, 10 years ago?

Benjamin Wilson: Yeah, you just gave me chills, Billy.

William Saas: And it strikes me that that’s still your project in a large way, but it’s like a radical financial literacy that’s infused with creativity and imagination.

Benjamin Wilson: Yeah, it just never stops. And I’m still attacking banks in the process. Don’t open an account here. The credit union is a safer place. They charge smaller fees. It’s an exciting time. Ten years ago with the worries about job markets and all of those things, now Stephanie Kelton was just chief economic adviser to Bernie Sanders, Randy Ray is testifying before Congress, and the Green New Deal has been rolled out and has gotten some real political momentum. Hopefully, we can keep the pedal to the metal and really help people understand that austerity, the depression, and all of that stuff is a political choice. There’s nothing natural or inevitable about any of that.

Scott Ferguson: Great. Well, Ben Wilson, thanks so much for joining us on Money on the Left.

Benjamin Wilson: Oh, it’s my pleasure. I had a great time. Thanks so much for having me.

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

Coordination Beyond the Corporation with Sanjukta Paul

In this episode, Maxx and Scott speak with legal scholar Sanjukta Paul about imagining alternative and more just forms of economic association in ways that denaturalize the 20th-century monopolistic firm. The key, Paul argues, is to reveal and contest the public “coordination rights” that legally structure all economic activity.

Sanjukta Paul is Assistant Professor of Law at Wayne State University. Her current research and writing involves the intersection of antitrust law and labor policy. She is currently writing a book tentatively titled, Solidarity in the Shadow of Antitrust: Labor & the Legal Idea of Competition, which will be published by Cambridge University Press.Her scholarly work has appeared in the UCLA Law ReviewLaw & Contemporary ProblemsThe Berkeley Journal of Employment & Labor Law; and The Cambridge Handbook of U.S. Labor Law.

See here for the important paper we discuss in this episode, “Antitrust as an Allocator of Coordination Rights” (UCLA Law Review, Vol. 67, No. 2, 2020).

Theme music by Hillbilly Motobike.


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

Scott Ferguson: Sanjukta Paul, welcome to Money on the Left.

Sanjukta Paul: Thank you, I’m so happy to be here.

Scott Ferguson: Maybe to begin you can tell our listeners a little bit about your personal background and your scholarly training and influences.

Sanjukta Paul: Sure. One of the things I’m working on now that we’re gonna be talking about is that I really come to these questions about antitrust law and their intersection with labor from a practiced background in labor and civil rights, including time as a lawyer working pretty closely with organizing campaigns in various ways. That is an influence on me personally, even though I was not an organizer. I have learned a lot from organizers who I have worked closely with over the years. And then, more specifically, through the organizing campaign I was involved with right before I entered academia–I was doing a fellowship at UCLA law school and they worked closely with Noah Zatz who teaches there–but just before doing that, I was working on an organizing campaign of port truck drivers in Los Angeles who, since the time when trucking deregulation took place in the late 70s, early 80s, have been classified as independent contractors and also work in an industry that is in many ways characterized by destructive competition between their immediate employers and by very powerful buyers of very powerful customers, namely the big box stores and now Amazon. And the way that the antitrust question came up in that context was actually not something I was working on directly as the lawyer, but as a background condition for the whole organizing campaign.

Before my time in the late 90s and the early 2000s, there were a number of what are called wildcat strikes in the labor movement. These are labor actions that are pretty spontaneous and initiated by workers. That took place around the country and a number of them centered in the Miami area, but also in Southern California and around the L.A. Long Beach ports, which is the largest port complex in North America and also handles the highest volume of goods. Those actions by workers were met with antitrust prosecutions by private entities, by the sort of public-private hybrid entities that many of the work complexes actually are, and it also included an investigation of worker leaders by the FTC–the Federal Trade Commission itself. And so, what sort of happened in the wake of that was there were some labor organizations involved, but they were really following the lead of the workers at that point and those actions were, just to be clear, in response to temporary spikes in fuel prices, which made it so that independent truck drivers weren’t making money at all on trips. And so, they engaged in collective walk offs and things like that. This is what they were faced with. Many of them, particularly in Southern California, were immigrants and working class men. There were a large number of immigrants from Central America who were bringing traditions of labor solidarity with them, which I think is part of the reason for those spontaneous actions.

So that was how I got interested in antitrust law. Because I was doing other stuff when I was working on this from 2011 to 2013 and thereafter in other capacities while I was at UCLA, until I moved to Detroit where I live now. But when I got to UCLA, it was sort of like, you have to pick a research topic: What am I gonna research for the next couple of years? I really wanted to understand how it could be that individual truck drivers can be sued under antitrust law for engaging in collective action to make a living wage and to feed their families. That was personally how I came to these questions. And then I went down this rabbit hole that sort of opened up into a subterranean cave, which I’m still like poking my head up here and there as well. Maybe to add one more thing, I also encountered people coming to this question in other ways–people coming to the question of viewing antitrust as an affirmative tool to address corporate power, which of course, I’m invested in that project now as well.

Scott Ferguson: Just to clarify something for our audience: being not in the law space or only an interloper, when I first started wading into your work, the first thing that struck me was, when I hear antitrust, I think of 19th century monopolies and breaking them up, right? And then what you’re describing here with a deregulated trucking industry and wildcat strikes and what is keeping them back is it’s antitrust law that is being used against not big monopolies, but against the workers who are trying to minimally organize. And that’s so, from an ignoramus point of view, counterintuitive.

Sanjukta Paul: Well, I don’t think it’s ignoramus at all! It’s more accurate about what is actually happening in antitrust law today. But in any case, that is exactly what caused me to pursue this, and I’m sure that is what we’re going to be talking about for the rest of this time, but briefly, I think it absolutely is counterintuitive. I think it absolutely is not what legislators intended. And in a deeper sense, this is what I’ve become convinced of in the last couple of years of working on this stuff. It’s not just that they didn’t want this to “apply to labor.” That’s not the way to look at it. The way that the whole language of labor exemption and the question of does antitrust apply to labor or not, the way that question gets framed and the reason it gets framed that way is if you presume that the whole purpose of antitrust law is just to promote economic competition. And I do not think that’s true and do not think what legislators intended either. I think that, instead, what legislators were looking to do, and this is certainly an interpretation as opposed to something they said in these words, but it’s also what antitrust functionally does today, which is to allocate economic coordination rights.

Just to capture that intuition about competition, I think that includes the goal of promoting healthy business rivalry where appropriate. I think that is something that legislators certainly had in mind. But because you raised the question about 19th century trusts and monopolies, and that obviously raises the question of what legislative intent was, I think that legislators were concerned about a lack of competition where the trusts were concerned–in other words, where competition had been displaced by concentrated coordination rights, which is exactly what the trusts and early corporations were. So, they did not see a problem with dispersed coordination rights. In other words, it’s not just workers. And of course at that time, industrial workers were emerging as a class but had not fully emerged. It was also farmers, of which there were many more small farmers at the time, and also small producers and small proprietors of various kinds. And again we have to remember that apart from the landscape as we look at it now, over the course of the 19th century, starting in many ways with the transformation of the labor relationship and then continuing to what is really like the novel legal invention of the modern business corporation, you also had a concentration of coordination rights in the production process.

It’s anachronistic to look back and say, “Were workers exempted or not?” Well, first of all, we didn’t have the modern employment relationship in the way that we do now. In fact, the early labor movement, for example, as embodied in the Knights of Labor, was contesting the modern employment relationship itself, which is basically modeled on a master-servant relationship. We associate it with, since the 1930s, what I would call countervailing coordination rights through affirmative labor law. But that’s not what it entailed at the beginning. It entailed this right for the master to tell the servant what to do and extending that to the production process where previously most material production in the US had been–I’m generalizing a little bit here–done through the workshop mode of production modeled on traditional guild relationships. Although we didn’t really have formal guilds so much in this country, you still had the master, but it was like a master, journeyman, and apprentice. That was an arrangement which, most of the time, involved a much greater dispersal of coordination rights around production itself.

Among others who have written on this, Christopher Tomlin is a really great labor scholar and historian as well. Again, I’m using this language of coordination rights to make sense of all these things across changing law and economic circumstances, but that’s fundamentally the case. Like journeymen had the ability to make rules to impact the production process. And taking that dispersal of coordination rights away, for people who want to use this language, is what capitalism is all about. It’s about concentrating those coordination rights in a few people. Yes, it’s also about having these big machines now. That became as important as the skill intensive labor in many cases. But I think it’s really interesting what the Knights of Labor leaders said at the time, which is: “We’re not luddites. We’re not against the technological improvements. We’re not against factories per se. What we want is to co-govern the factories.” And so, what that would mean in this language is a dispersal of coordination rights in the process of production. And I think, effectively, we conflated in certain ways the technological shift to factories with the shift in the legal allocation of coordination rights, just as we do today. In the gig economy, we tend to sometimes conflate technological changes, like “Oh, there’s an app to do this now!”

Scott Ferguson: Yeah, so it’s inevitable.

Sanjukta Paul: Yeah, and there’s two different things going on. There’s a change in technology– like maybe there’s an app instead of a dispatcher or something else. Fine, that’s one change. But any change that accompanies that in the allocation of economic coordination rights is analytically separate. You can argue for or argue against it, but it’s not entailed by a factory or an app. In fact, I think there’s a real parallel here. I think that it is to the advantage of the people who are benefiting from the concentration of coordination rights to characterize those two things as all of one piece and to run them together.

Maxximilian Seijo: If I can pause there, we started this conversation off at quite the clip, and I appreciate all the detail and how we’ve already got into it, but if we can take perhaps a more bird’s eye view of this allegorical cave that we’re all working in and feeling our way around and that you feel your way around in your work. Can we maybe start to outline the way your approach breaks with the dominant so-called “Law and Economics” school that has played such an important role in shaping the neoliberal era as well? The legal studies approach that you’ve been performing and showing for us is known as the “Law and Political Economy” movement. And if you could contrast those two for our listeners, I think it could be interesting to then link up some of these more specific concepts that you’ve been talking about so far.

Sanjukta Paul: Sure, although I don’t really want to speak for Law and Political Economy as a whole. This is obviously a project and there’s people who are in charge that aren’t me. I do definitely associate myself with it. I also associate myself with “Legal Realism,” or however we want to label that. Chronologically skipping ahead a bit in the way these things have been conceptualized, the Law and Economics movement is absolutely the dominant school or paradigm in antitrust law today, and as you said, impacts law and policy thinking so much more broadly, which is one of the reasons I think antitrust is an interesting place to excavate into this subterranean cave because that subterranean cave sends up chutes in other policy areas as well. That’s why I think it’s important and valuable to deconstruct it here. So, how I would gloss it is–and many people who are dear to this will contest this and say that no, it doesn’t entail this and there’s other ways–I would say that fundamentally and globally what this paradigm has done is that it has naturalized some certain legal allocations of coordination rights and put them beyond discussion. And then we discuss the rest of the contested coordination rights purely on a frame of whether they promote competition or not. And then, but secondarily, there’s these two other norms involved: economic efficiency, which I’m sure we’ll talk about more because it’s not a very concrete concept, and also consumer welfare.

Just to put those aside for a moment and keep things as simple as possible, even if you were to take those aside, what you’re already doing is just naturalizing certain forms of economic coordination, notably coordination that takes place inside single firms or corporations, which I think is contrary to the intent of the anti-monopoly movement and legislative intent in antitrust law. It is also contrary to the entire world view of things in that 19th century milieu that we were talking about of what most people thought, whether they were left or right. I don’t think that naturalization had taken place yet. So that stuff gets naturalized and becomes sort of invisible. Then, we just talk about the forms of economic coordination that are not invisible and those, of course, include labor coordination in the form of labor unions, but they also include all kinds of other unconventional forms of economic coordination, as well as looser coordination between smaller actors of various types of co-operatives. And those are evaluated primarily under this norm of promoting competition, which of course just viewed on its face, anything that has economic coordination is a suppression of competition. And so, there’s automatically this kind of suspectness of anything that isn’t in that favored naturalized side of things. And then you have these supplementary norms of efficiency and consumer welfare, which have been constructed and conditioned in ways that I think systematically disfavor workers and smaller actors. But again, from that bird’s eye view, that’s what Law and Economics does.

Importantly, Law and Economics didn’t start these things. I think that’s really important to say. Robert Bork, I think, is a really interesting figure and at various points was really honest about what he was doing. In a way, the people who have inherited that tradition don’t always pay attention to those moments where he’s telling us what he’s doing. In his famous books that he wrote in the 1970s that had this big influence on antitrust law, he says I’m not inventing this deference to intra-firm coordination, it was already there. And he’s right, it was already there. I think that it really started in the Lochner era, which is the period of time that immediately followed the passage of the Sherman Act, which is the first federal [antitrust] statute in 1890. This [Lochner moment] is when judges really misconstrued antitrust law, and I think they took it in a direction that was not at all what legislators intended. In the bigger picture of that Lochner era of the allocation of coordination rights, there was already a foundational allocation of coordination rights that took place, which was really done by judges in certain important decisions. The way that I would put it is that I see 1970s Law and Economics–which obviously was being worked on before the 1970s–I see that movement as picking up on and retrenching those fundamental categories of economic coordination that were favored in the Lochner era but now clothing them in the language of this social science of neoclassical economics, or at least purporting to. In a way, the judges in the Lochner era were actually in certain ways more honest in that commentators at that time might just say things like, “Well, the people who know what they’re doing should run society.”

Obviously, that’s the people in the corporate boardrooms and not immigrant workers in the factories. This is not stated in any judicial decision but you get close to it in some of the commentary. Of course, you have nothing like that in contemporary Law and Economics. It’s more sanitized. And I’m making no claims about what particular people believe. I don’t think any particular person has to believe any of that for the paradigm to work. But I think that the value judgments about how we’re going to allocate economic coordination rights are just on a further remove. You have to do this additional level of excavation, and they’re still there. It’s not just that this is historically how it happened. Logically, they’re required. But ultimately, the claim that I would want to make is that a lot of the key conclusions that law and economics is taken to be–and that Bork’s work and others that have this economic analysis of antitrust law generally–are these independent conclusions of social science that are in fact embedded and hidden legal assumptions in the premises that cannot be derived from some independent reference.

Maxximilian Seijo: As we move into the Legal Realism side, in contrast to this naturalized Neoclassical Law and Economics framework, which has a longer history, I think it could be useful if, in defining and describing your approach, we could start with a relatively basic definition of what coordination rights are in the first place because at some level it’s intuitive what they are, but also at another, it could be useful to specifically suggest the break with competition and efficiency that you’re making as a product of your Legal Realist approach. 

Scott Ferguson: Can I follow up here? Is it the case that you are borrowing this term from elsewhere, or is this your term? And what kind of work is that term doing for you?

Sanjukta Paul: Okay, well it is my term. I don’t really want to say it’s my term, but no, I didn’t borrow it from somewhere else. I’ll try to summarize. Yes, it really comes from a Legal Realist approach, and again I can situate that a little bit in terms of intellectual history. The Legal Realists were–and you could say that Oliver Wendell Holmes was a proto-legal realist in certain ways, although he was writing a little bit earlier–but the legal realists really come into being around the same time that the Lochner era is just fully getting going and is a response to the what’s often called the laissez-faire approach of Lochner era jurisprudence, which embeds all these unstated assumptions just as Law and Economics does now. And so, I think Legal Realism at the time was excavating those assumptions just as I’m trying to do with our legal language today. And so, to explain that frame, what I would suggest is that antitrust law, and in fact law itself, is always allocating coordination rights, so this isn’t a normative claim I’m making where I’m saying that antitrust law should allocate coordination rights instead of promoting competition. 

My point is that you can say that you’re promoting competition, and this is the point of the excavation particularly in that UCLA paper, which I know you looked at, but whatever the stated justifications are–competition, economic efficiency, and consumer welfare–fundamentally what you’re doing is you’re allocating economic coordination rights for any given instance of economic coordination, whether that is coordination in production or whatever else. Most paradigmatically, we can look at coordination on prices because that’s something that is so often clearly illegal in the circumstances where it is illegal, but it’s not always illegal. That’s maybe the best way for me to illustrate it.

Actually, let me say the general claim first and then the specific claim. The general claim would be that for any instance of economic coordination, antitrust law is always either saying that it’s permitted or not. It is making that judgment and doing so in contingent ways according to particular normative criteria, which we are able to look at and decide on others if we wish to democratically as a society. That’s the general claim. And then the specific claim that helps to hopefully make that a little bit more vivid is that, if you take price coordination, which is something that is going to raise orange flags, if not red flags, under antitrust law, if you look at how that’s treated.

For example, let’s go back to those independent truck drivers. If they’re engaging in direct horizontal price coordination on the prices they charged customers–they’re not working for a firm, they’re doing that either directly or they’re doing that amongst each other in working for a trucking firm–either way, that is what raises the antitrust issue. And then, on the other hand, if that exact same group of truck drivers hold everything constant, the number of drivers in the overall market, it’s the same market share, those same number of drivers are working for a trucking company that employs them and extracts profits and also manages their work and tells them what to do, then now that firm can set prices across those truck drivers for the services they perform and there’s zero antitrust problem. And we just take this to be paradigmatic.

This is what I call the “firm exemption” to antitrust law, not because I think firms shouldn’t be able to set prices, but because I am trying to make visible something that is naturalized so that we can more clearly examine these criteria for allocating coordination rights. Just to add to that example a little bit, with employment under our current regime, under at least the New Deal regime, which of course, is not being properly enforced and there’s lots of holes and it’s extremely problematic, but in theory, those truck drivers would have countervailing coordination rights. They would be permitted to form a union that would basically engage in coordination now, not directly with customers, but with respect to their bargains with the trucking company. And so, not only have those countervailing coordination rights been undermined systematically as you both know over the last few decades even for people who are statutory employees, but also you now have with most of those truck drivers that I was talking about in the beginning and most truck drivers in general are not employees, they’re considered independent contractors.

This alone should be mind boggling to us because there’s really two points. One point is that we have allocated coordination rights to the categories of the firm and to employment, and that was done sort of implicitly but in certain ways more visibly in the decades right after the Sherman Act. And we have denied coordination rights to looser coordination, which eventually includes workers beyond the bounds of employment. But not only is it an issue that the independent contractor truck drivers can be sued under antitrust for engaging in coordination that intuitively we all, as we started this conversation, think they should be permitted to do if we think about the original purpose of antitrust law. Not only that, but it should also strike us as weird and worth thinking about that the firm still gets to set prices across that group of truck drivers who, by definition according to the theory of the firm of Ronald Coase, are not inside the firm. If you’re an independent contractor, by definition, you’re not inside the firm, so they’re now setting prices beyond the firm.

So, whatever justifications exist in law and economics for having this firm exemption that’s been naturalized certainly shouldn’t apply there. And then you go further from that. Then, we go to things like franchising and subcontracting, where prices are set by lead firms, by these more dominant firms, for smaller economic actors in their orbits–not just independent contractor workers, but also just smaller actors as such. And so, we can have that normative conversation, but my point is to just say, “Hey, let’s look at this.” Because certainly at the level of independent contractor firms, we almost don’t even see it. And it took me a couple of years to actually see that, frankly. I first just saw the truck driver problem because it is so naturalized. Like, firms set prices, yeah, that’s what they do. But what do you mean that there’s coordination within firms? Does that make sense?

Scott Ferguson: Yeah, absolutely. I feel like I could go in several directions from here. One thing I want to do is put some of your meta-assumptions into my own language and see if they resonate with you and if you feel like we’re communicating well here. So, you’ve talked about the way that Law and Economics appeals to Neoclassical economics in this Bork tradition and it naturalizes things. Maybe to speak to what’s between the lines here, is that one of the key ways that it naturalizes is that it imagines something it calls a market and something it calls a firm and something it calls employees or workers, and thus the economic is somehow prior to law or governance.

Sanjukta Paul: Yeah, that’s a great way to put it.

Scott Ferguson: And that coordination has its own kind of autonomous logics. And then law comes later and governance comes later to correct what should be always already functioning well. Does that make sense?

Sanjukta Paul: Yeah, I think so. If I could just try to elaborate on what you said in a helpful way. Yes, I think there’s two points. To take the second thing you said first, I think that is absolutely right. To me, one of the main normative implications of this way of approaching things is that, even in the kind of progressive left conversations about what antitrust and labor law should do, there’s this idea of like, “Okay, so there’s market power and we want to try to correct for that. We want balanced market power.” But that exactly suggests that this market power arises in a vacuum if you allow the market to do whatever it will do without law. And that’s totally not the case. Any and all market power relies upon and is created by law, and in particular, by these prior legal allocations of coordination rights that are often invisible. And so, the point of making them visible is ultimately so that we can openly contest them and debate about them instead of not debating about them and just assuming them.

But to put it into this language, the point of doing so is to show how law always constructs markets, which is absolutely a legal realist view. It’s also absolutely a Law and Political Economy view. So, I suppose this approach is really trying to expose how that’s happening. Specifically, just so that it’s not too abstract, corporate law, employment law, and antitrust law–and the negative spaces of those–are three areas that construct what’s conventionally considered to be the pre-legal intervention space of like what happens inside–not that people don’t study that. I’m not saying people don’t study that. But in that conventional law and economics view of the market, those are somehow held constant or given in some way, when in fact, we could totally change those rules. We could construct firms however we want. They certainly don’t have to be constructed to maximize shareholder value and with the concentrations of coordination rights that happened within firms that mirror what I was saying about the 19th century and that process that happened. That allocation of coordination rights is largely a function of both corporate law, employment law, and agency law to some extent.

So, all of those things should be up for discussion, and that doesn’t yet prove that what we have is bad. It just shows that’s part of the picture. And also, it flips the script as we like to say on that idea of law intervening to correct and to protect the powerless from the powerful. No, law is creating the powerful in the first place. So it’s not a corrective after the fact to say that if we do choose to have a more balanced allocation of coordination rights and to have a more democratic society in general, including in the economy, that it’s not changing some state of nature, it’s changing something that law created in the first place.

Scott Ferguson: Right. Two of the things I’d like to highlight: what I appreciate so much about the work that your conception and term coordination rights performs, especially from a Modern Monetary Theory point of view, is it insists that public legal mediation is primary, as we’ve been saying, but also that coordination is irreducible to the so-called “market.” What we call a market, we usually think of it in rather contracted narrow terms. And you’re talking about all kinds of social and economic coordination for production and distribution. And so, it’s not just that law conditions the market. It’s that the market isn’t what it purports to be, and what political economy actually is is irreducible to this thing called the market.

Sanjukta Paul: I think I follow 80% of that, but what do you mean by “irreducible to”?

Scott Ferguson: Well, what I mean is not reducible to. Is that what you’re asking?

Sanjukta Paul: I think so. I think what you mean maybe is it is not reducible to the Neoclassical conception of the market?

Maxximilian Seijo: Maybe this can be helpful. I was trying to think about the way we can analogize the conception of law and economics, the Neoclassical conception, with how Neoclassicism and Classicism broadly thinks about money. And it seems to me what you’re suggesting, Sanjukta, is that Law and Economics is reliant upon a barter theory of coordination where, what you’re suggesting, is a thoroughly, always-already entrenched legal theory of coordination that is constantly creating these structures of economic coordination and production and relation, and to maybe put it in Scott’s terms, that are irreducible to this concept that we call a market, which comes after a state of nature. Is that sort of what you’re suggesting?

Sanjukta Paul: Or that is a state of nature?

Scott Ferguson: Yeah.

Sanjukta Paul: I mean, yes. I just don’t think that there is a market as the state of nature, and I don’t think I’m alone in thinking that, clearly. That was like the point of Regal Realism, right? And so, when we say it that way it looks very simple, but I think this is another way into that. You’re holding some forms of coordination constant at all times. You have to be in order to have a Neoclassical model at all. You just are, and I don’t think that if you talk to a smart Neoclassical economist about this that they would really deny it. Although, I don’t know what they would do. But that is what you’re fundamentally doing. And if you do question that, they sort of have to say something like, “Well, the firm is a singularity. It’s just beyond the analysis.” If they’re honest, they would say that. But the fact is, if you change those categories of coordination, if you change these things that those models are holding constant, or I would say even more accurately, are holding constant and varying without necessarily being that clear about what they’re varying, then you see how those models are fundamentally dependent upon what are ultimately legal assumptions about what forms of coordination are permitted and what aren’t.

Scott Ferguson: One thing I was thinking about when revisiting your work this time is you describe the Bork era firm as this pretty severely hierarchical relationship. And because I’m not in law, in the readings that I’ve done around political economy in the neoliberal era, there’s so much rhetoric about the big, multinational firm–we know that story–but there’s so much rhetoric about flexibility, horizontality, and networking. And I wonder: where does that fit? It feels like there’s some friction there. Where does Borkian discourse and legal decisions and that world of neoliberal management meet?

Sanjukta Paul: Yeah, that’s a great question. Let me let me refine what my claim actually is about Bork. I’m not really making a claim about what the firm was actually doing in the 1970s at all. I’m not making an empirical, factual claim–except in a very limited instance that I’ll bracket for the moment. What I’m claiming is that Bork, and ultimately the argument that goes back to Coase and the firm exemption of antitrust law, does assume hierarchy. It fundamentally assumes that. It has to. That’s the argument for why firms are sometimes more efficient than contracts. That’s the Coase-ian idea of why there are firms in the first place, why there are these little command economies in the middle of what’s supposed to be a free market. And Bork picks up on that.

Logically, if you excavate that, it’s not a claim about what firms were actually doing in the 1970s. It’s a claim about what the assumptions of Law and Economics embeds and then magnifies. That is sort of like a premise. This hierarchy is, in some situations, more operationally efficient because it saves on transaction costs that you would have if you were contracting for these services out in the market. But I absolutely agree with you that there’s all kinds of tension with that assumption. I will say what I think the biggest tension is, which is that one phenomenon that’s happened at least accompanying if not a direct consequence of what you’re calling neoliberal management theory, is the growth of independent contracting. That’s been very much sold on grounds of flexibility and whatnot. And yet it tends to only be flexible in one direction by denying workers these countervailing coordination rights that they are entitled to under New Deal labor law, which are the things that actually provide flexibility to workers, or at least some modicum of it. So, it actually takes that away. I think in many ways, it intensifies hierarchy rather than eliminating it, even though it’s sold on the basis of eliminating hierarchy. So, that’s one point. 

But then, secondly, I also think it’s contradictory on its own terms. With the truck driver cartel, the truck driver firm with employment, and the truck driver firm with independent contracting is that, even if you take out all those issues about how you’re still doing hierarchy and we know that is the case because you have independent contractors, and even if you take out all those empirical questions about whether this is actually operationally efficient, it’s still true that on your own terms, you’ve now taken away the justification for having this firm exemption to antitrust law in the first place. The implicit assumption is that, at that point firms are not different in any way from the market transaction, as a law and econ person would claim, then the market transactions that they’re saying should be subject to antitrust prohibitions on coordination, are merely engaging in direct contracts with the people who are performing services that are essential to your business. So even on those terms alone, what are the efficiencies now that are supposedly the basis for the firm?

Maxximilian Seijo: I want to take these insights and make them specific for our moment. We’re talking about independent contractors in the neoliberal era, and there’s perhaps not a more paradigmatic example than Uber and Uber drivers. Perhaps to say it this way, given these tensions, what should we be doing and how should we be thinking about Uber drivers and reforming the way we legally classify them in their coordination rights?

Sanjukta Paul: In a way, Uber drivers are like the trickiest place for me to answer that question because I think there’s a strong argument that, given the amount of hierarchy and control that actually exists in that relationship, they should just be employees under traditional labor law. And then that would solve the problem under the current categories of coordination. And there are efforts to do that, which I support. And so, I don’t want to take away from those in any way. Just to extrapolate from that and maybe broaden it, even if that weren’t true, even if there was just enough flexibility on the drivers’ side to escape what the legal definition of employment is, what I would say–and this would broaden from Uber drivers to other small players–what we should do is reallocate economic coordination rights from where they have been concentrated, which is in these big, powerful firms, of which Uber is a perfect example, where Uber enjoys these coordination rights across a market that it completely controls. It sets the prices that Uber drivers charge, even though it claims that Uber drivers are independent businesses. It’s engaging in these novel forms of economic coordination rights and meanwhile, we’re just sort of assuming that the Uber drivers themselves and on other platforms as well should not be able to horizontally coordinate because of antitrust law.

And so, I would say with antitrust law, the point ultimately is not to just have this intellectual realization, but to recognize that we’re already allocating coordination rights in all of these ways that are naturalized. Once we recognize that, I would propose reallocating them from more powerful actors to less powerful ones precisely in line with the original legislative purpose–so dispersed economic coordination rights. And then, of course, people can argue with me about that. I’m sure many people will disagree, but that would be my proposal. Something related to what you said before, Scott, when you were talking about some of the commonalities with MMT and the recognition of the public nature of this allocation, which I think is really important, is that I don’t see that as a carte blanche. It’s not just that we’re allocating economic coordination rights to large firms and then that’s bad. It’s that one of the problems with doing that and naturalizing it, is that we don’t recognize it as a public function at all. And so, we assume that the coordination that they’re engaging in is private.

I really should have said this before. This is like the second piece to it. So, not only do we not see it and not debate over it, but we also don’t recognize that it’s public. That’s why you have this very strong assumption that runs through most conventional thinking on these topics still, which is that the firm is like a private contractarian affair. It’s a private arrangement and anything that you do to “regulate” that is an intervention into a private arrangement. Once you recognize that the firm is receiving this privilege from the law, which by the way, I’m not saying we should take away. I think firms are fine. But I both think that they’re getting a privilege that should have duties and responsibilities that are concomitant with that. And specifically, this really dovetails with the whole revival of thinking of the corporation as a franchise of the state, which definitely overlaps with MMT in terms of banking as I understand it. But once you recognize that, you recognize the fundamentally public nature of economic activity, frankly. And you recognize that the public has a role in all of it.

Coming back to your point about the Uber drivers, the proposal doesn’t end with “let’s reallocate them.” Yes, that’s very important, because it is in line with the democratic purposes of antitrust law. But it’s not a carte blanche, just like it’s not with firms. I think that there should be criteria and some forms of public oversight. If we’re going to essentially legalize certain forms of cartels, which I think we should do, because I think that’s ultimately more democratic and will help encourage worker co-operatives and other more democratic forms of coordination, then there should also be accountability. We should recognize that there’s a public dimension to that, just as we should bring that public dimension into serve this existing naturalized category of coordination of the firm in the corporation.

Maxximilian Seijo: It seems like then, if we’re coming at this question from that primordial coordination allocation, if we want to call it that, the sense that law is always in the process of coordinating and producing cartels, and we really have to own that and exert oversight agency over the process to ensure…

Sanjukta Paul: Sorry to interrupt, it’s always in the context of constructing, authorizing, and not authorizing economic coordination, whether we call them cartels, corporations, or franchises.

Maxximilian Seijo: Yes, that’s a good way to put it because it includes the negative. It seems like there’s a tension with some more traditional views of antitrust that sees size and scale itself as the enemy?

Sanjukta Paul: Okay, here’s how I want to answer that question. I want to say, that project of first recognizing that there’s constantly this allocation of coordination rights going on, and by allocation, I mean to capture the positive and the negative–the economic coordination that’s being authorized and the economic coordination that’s not being authorised. So, that is an analytical move. And then, if you have established that, then the next step is to say, now that we see that this is what’s going, what the fundamental analytical question in antitrust should be is: what are the criteria according to which the law should allocate coordination rights? I don’t know if I said that straight up prior in those conversations. I think it’s important to say. And that question, transitions from the analytic to the normative and the political. That’s where I would put the size and scale stuff. I’m not avoiding your question.

So, on the question of what are the criteria according to which we should allocate coordination rights, well, one option is size and scale, but I don’t see the focus on size and scale as directly in opposition to the allocation of coordination rights approach. It’s one of the potential criteria that could then arise. Does that make sense? For other people, that’s like one set of criteria out there. It’s like, “Bigness is the big thing and that’s what we should be concerned about.” Another set of criteria is really focused on operational efficiency, or at least purports to be. That’s kind of the Borkian group. One could say that it’s not really that way. Really what it is interested in is just authorizing concentrations of power, but regardless, that’s what it purports to be. Another set of considerations could be about just wanting the lowest consumer prices no matter what. Another set of criteria could be like, we want to promote economic democracy and we want dispersed economic coordination rights. Obviously, I’m sympathetic to that.

Just to be clear about how I would answer the normative question–which I’m really not trying to avoid, I just want to situate where I think it fits–how I would answer the question of how we should allocate coordination rights is that we should do so according to the norms of of greater economic democracy, which I interpret as dispersing rather than concentrating economic coordination rights, and that we should articulate clear rules of fair competition, which to some extent can be reduced to the dispersing of coordination rights but not entirely. It’s going to potentially include some additional things. Now, people are obviously not necessarily having this debate on exactly these terms when they’re debating on Twitte,r or wherever. But in the focus on size and scale, I’m happy to have that be a criterion, because I think that among many others, it can be a proxy for greater democracy, for the dispersal of coordination rights, and those things. There’s a lot of people who would necessarily disagree with this, but there are sectors and economic functions where that’s not feasible.

And so, in there and in general, we should work to promote a democratic allocation of coordination rights in whatever the arrangement is, whether that arrangement itself is large or small, or there’s a bunch of them or one of them or whatever. And I completely agree with you that implicitly there’s this allocation of coordination rights that’s happening within whatever the thing is that you’re targeting as big or small, that is at least as important as the issue of size and scale itself. So I guess that’s how I would start to answer that. And then, the other thing that I feel like was implicit in your question, and which I am very happy to address, is that I don’t see, what hopefully will become a little bit more of an affirmative or normative picture of anti-monopoly, as standing outside left and right. That makes no sense to me at all. I see it as fundamentally a left project. Maybe there are right versions of anti-monopoly. That’s fine. I don’t associate myself with that in any way.

I see this as being allied with other specific left projects, including socialist projects, which in the 19th century, it was not so clear where anti-monopolism ends and socialism picks up because, fundamentally, socialism was also contesting that concentration of coordination rights in production. I absolutely think we should be addressing corporate power. And when you take a step back and look at this through this allocation of economic coordination rights framework, part of what you see is the public nature of all of it, and that hopefully makes space for public economic coordination itself. I should have said that more explicitly before. That should make space for direct public economic coordination where that’s appropriate in all kinds of ways–public provisioning, public price coordination where appropriate–all of that should absolutely be on the table.

Conversely though, without naming too many names or anything, I sometimes feel like there’s this unnecessary, which I don’t mean to say that if everyone just understood things that it would dissolve all disagreement, that’s not what I’m thing at all, but I’m saying that sometimes the terms of debate around this topic seem to be just off on both sides. Conversely to what I think you were kind of asking about, there can also be a little bit of a resistance among other left projects to anti-monopoly precisely because it is seen as something that is trying to reinstitute some fictive free market or something. And I just fundamentally don’t think that’s what anti-monopoly is about. Obviously that’s partly an analytical project and partly saying, “Hey, there’s a historical precedent and a legal precedent reviewing it as something very different.” It is definitely not trying to reinstitute a fictive free market. It is friendly with other left traditions.

Scott Ferguson: Yeah, I think that there’s a nice way in what you’re doing with coordination rights as a framework and as a way of setting out the conditions of possibility versus the various specific cases and specific areas of contestation that we could be talking about. It reminds me of certain MMT rhetoric, right, where it doesn’t make any sense. We always laugh when people say, “Well, has MMT ever been tried?” Or “Are you going to go do MMT now?” It’s the same thing with coordination rights: “Are you going to try out some coordination rights?”

Sanjukta Paul: Exactly! Exactly, exactly, exactly. That’s actually a really helpful analogy. Not claiming that I know all about MMT, but from what I understand about it, there’s this analytical part of the project that’s just describing what is already going on and that is saying whatever criteria you use and whether you’re honest or up front about them or not, this is already what’s happening. And then in recognizing that, we can shift through that recognition and reexamination.

Scott Ferguson: Maybe we can close: Are there specific lessons in your work for dealing with what we’re all living through right now, globally, with the virus outbreak and the economic collapse that’s coming with it? Have you given much thought to that as you’re preparing to take your classes online and do 1000 other things?

Sanjukta Paul: Of course, I’ve started to have those thoughts. I think it’s clearly true for your guys’ work in terms of the move to public provisioning. Two things that I would say, and I would not frame it in those grand terms at all, perhaps in a less direct way than is happening for public spending and public provisioning, there’s a way in which all kinds of what had been law and economics orthodoxies in the policy world are being thrown into the light and to some extent discarded. It’s kinda crazy how it started happening almost just like that. In a little bit closer to the space that I work in, direct public price coordination is on the table. So, in that sense, I think it’s really an opportunity for everyone to clearly see the contingency of these legal rules that we take for granted in economic coordination. And then, this is a really open thing to explore, like would more democratic allocation of coordination rights make us more resilient at times like this? I don’t know. I strongly suspect that the answer is yes. But yeah, I’ve been thinking about that for sure.

Scott Ferguson: Yeah, I have just one [more] closing comment. Clearly, we focus on different areas and your work is not the same as MMT. But I will say, from our perspective, we’re interested in money and what money is and what money does. What I would say is that money is not just fiscal policy. It’s not just congressional appropriation. It’s not just monetary policy. Money is coordination rights. To me, in the question of money and the question of political economy, the concept of coordination rights kind of sums it up. And fiscal policy or monetary policy are themselves just coordinations.

Sanjukta Paul: Yeah, that’s really neat.

Maxximilian Seijo: I wanted to bring it back to the allegory that we have been thematizing throughout this, which is the cave, it seems like in your answer to what preliminarily the Coronavirus can teach us is that we’re sort of letting the sun illuminate the cave a little bit and it throws all these concealed forms in into the light and we can perhaps see a bit more agency.

Sanjukta Paul: I love that. I really, really love that.

Scott Ferguson: Or maybe it’s happening. The dire nature of the situation is forcing it upon us where we have to reckon with our actual conditions of coordination and possibility rather than the bullshit ones that have been force fed to us for years and years.

Sanjukta Paul: Yes, yes, yes. Love it.

Maxximilian Seijo: Well, Sanjukta, thank you so much for coming on Money on the Left.

Sanjukta Paul: Thank you so much. I really enjoyed this.

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