Mint After Reading: Philip Diehl Talks with Rohan Grey

In this bonus episode, Rohan Grey speaks with Philip Diehl about #MintTheCoin in the wake of this season’s debt limit showdown. Director of the United States Mint under President Bill Clinton from 1994 to 2000, Diehl is best known today as the person most responsible for 31 U.S. Code 5112(k). The law permits the Treasury Secretary to “mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.” This clause charts a completely constitutional path to avert recurrent debt crises and furnishes a ready framework for a new kind of radical financial literacy. No wonder why much ink has been spilled and many hands have been wrung trying to explain away or dismiss its radical implications. Grey’s conversation with Diehl explores the history of the platinum coin, offering a fascinating and unprecedented behind-the-scenes glimpse of life in the U.S. Mint.

Visit our Patreon page here:

Music by Nahneen Kula:


The following was transcribed by Rohan Grey and has been lightly edited for clarity.

Transcript of #MintTheCoin! – Interview with Former Mint Director Philip N. Diehl by Rohan Grey[1]

[1] Assistant Professor of Law, Willamette University & Director, Public Money Action.

Grey: Well thank you so much for joining me. My name is Rohan Grey, and I’m an Assistant Professor of Law at Willamette University in Oregon. I’m also a Director of Public Money Action, a 501(c)(4) that promotes public education and tries to improve our public policymaking process around money and financial issues.

And I’m joined today for this very special one-on-one interview with Philip Diehl, the former Director of the United States Mint, appointed by President Clinton, and currently President of U.S. Money Reserve, to talk about this idea that’s been taking the world by storm, and getting into the press, about how we could potentially resolve the ongoing and recurring debt ceiling crises that we’ve been experiencing through a provision of the Coinage Act, that authorizes the minting and issuing of platinum proof and bullion coins of whatever denomination the Treasury Secretary determines to be appropriate.

So we’re going to go into some detail about the history of that law, and some of the sort-of edges and boundaries of it. But before I get into that, I’d like to let everybody get to know you a bit more, because you’re the sort-of architect behind this in many respects, and have had a pretty incredible and unusual career. So would you mind telling us a little about what got you to be the Director of the U.S. Mint, where you were beforehand, and what that journey was like?

Diehl: Well, I went to Washington D.C. when I was thirty-nine years old, so I had a long career before that in government, some in politics, but mostly in government and the private sector. I went to Washington to be Legislative Director to Senator Lloyd Bentsen (D) of Texas. And I served in that role for almost two years, until he appointed me to be Majority Staff Director of the Senate Finance Committee. And I was probably the shortest-lived Director of Senate Finance, because within three months Bill Clinton was elected, and a few weeks later Bentsen was chosen as Secretary of the Treasury, and then I went in as his Chief of Staff at the Treasury Department on the first day of the Clinton Administration.

I was in that job – a thankless job, my kids never saw me, I had young kids at home – and after about six to nine months, I felt like I had helped the Senator, and now Secretary, transition into the job. And so I decided that I was ready to go home back to Austin, Texas. And he said, well, why don’t you go look at the United States Mint, that’s a turnaround situation, I know you want to run a company.

And I was never a collector. I knew hardly anything about the U.S. Mint. But you don’t tell the Secretary of the Treasury, “No.” So I went over there, and I was very fortunate because a fellow by the name of David Rider was Director at the time, and he was a Bush Administration – H.W. Bush Administration – holdover. And he and I really made a connection. He gave me a great orientation to the U.S. Mint.

So I went back to the Secretary after three weeks and told him, “Yeah, I am interested. This looks like a real good opportunity.” And that’s a very unusual move for someone who came to Washington because of his policy interests. And this really isn’t a policy foundation, it’s a manufacturing and marketing operation. But I saw it as a diamond in the rough, and I thought, “I could do something with it.” And one of the things that really animated me, and animated the team around me at the U.S. Mint, is we had, and have, a very strong commitment to demonstrating what government – well-led government agencies – can do for the American people. That there’s a real role for an active government.

And I really liked this particular audience that I was playing to – the U.S. Mint customers on the bullion and numismatic side of the business – who are, I used to say, white, male, and over fifty, conservative, Republican. And I said the white male over fifty thing was something I aspired to – now I’m well into that demographic – and I think we really had an impact on them, surprising them in what we were able to accomplish in a whole lot of areas.

Grey: Yeah, it’s incredible, you would think that sometimes people come up through the ranks of the Mint, or they come in thinking that their job is just to keep the lights on, and not make waves. But as you said, you came in thinking of it as almost a turnaround, and you had had experience both on the hill, and in the heart of the Treasury, and seen a sort-of bird’s eye view, and saw what this agency could do and what it could become. And not only a vision for active government, but a vision for how to take an agency and to make it bigger than what it might have been. And history is full of people who’ve really kind of had a vision for making something bigger than what it was when they came into government, and to be creative about that.

So do you mind going into a bit more detail about what your sort of vision was for the Mint, what your agenda was? I know you were there for quite a while, but sort of looking back, what would you say your kind of priorities were, or how do you feel your legacy of what you left the Mint, what shape you left it in versus where it started?

Diehl: I started well, what I thought was small, and ended up being pretty big, and with three priorities that I, in my confirmation hearing, I called those out. And one of them was the financial situation at the Mint – both performance and in terms of the whole financial structure – was a terrible mess. And we were one of the first agencies – because we had private sector-like functions – we were one of the first agencies subject to a new federal law that subject government agencies to outside audits. And eventually that spread to every agency. And our first audit, the U.S. Mint failed. And for any number of reasons. So I said we need to fix that.

The second thing was we had a real problem with customer service to our numismatic customers.

Really all three of our customers: bullion, numismatic, and then circulating coins, where the Federal Reserve is the U.S. Mint’s customer. And I said we needed to fix that, that was a big problem with just performance, morale at the agency, the tremendous criticism from outside the organization because of that failure of performance.

And then the third thing was there was – there is – this commemorative coin program, in which the U.S. Mint produces, upon a mandate of Congress, a series of commemorative coins. And Congress mandates every one of those programs. And this is a way of raising funds for organizations that have access to very powerful members of Congress, and it’s a way of circumventing the appropriations process. So there grew to be a feeding frenzy for these programs, and as a result, by the time I became Director, the market for these coins had collapsed because of abuse, really, by Congress. And so getting that program under control was my third priority. And I could only do that with the help of Members of Congress, especially a couple of committee chairs, to reign in that program.

So that’s really where I started. But as we built our capabilities and our confidence in our capabilities, and there’s a psychological element to that, there’s a personnel element to it, there’s a structural element to it, there’s a financial element to it—

Grey: There’s a precedential element, yeah.

Diehl: Yes, yeah. So we grew in confidence and capability in what we could do. Which ultimately led to a series of highly innovative, entrepreneurial programs, that we had Congress enact, and that we built on to build our credibility and our capabilities. And the first one of those programs was the Platinum Eagle program. And I wanted to—first of all, I’d begun to build a relationship with the new Republican Chairman of our Banking Committee, Financial Services Committee, Oversight SubCommittee, Michael Castle from Delaware. And so I went to him and said we have this idea for a brand new platinum coin, that allows us to – will allow us, if we structure it correctly – to compete in international markets. And we had never competed in international bullion markets before.

And so I asked for a blank slate. Completely unprecedented in U.S. Mint and U.S. coinage – two hundred years of U.S. coinage – history. Where in the past, Congress mandated every little detail, and the Mint could not deviate from those details, had no discretion. And I asked for virtually total discretion to design a coin, based on market research and building a relationship with the person, the company, and the patriarch of the company in Japan – which along with North America are the two big international platinum bullion markets. And so that included everything from design to denomination.

And that’s what we were granted. I drafted that bill, he got behind it and carried it to fruition. It got embedded in a much larger Coinage Act that was designed to fulfill one of my promises, and that was to get the commemorative coin program under control. To limit it. So that’s relevant to the issue of the platinum coin, because it has been described as our intent, and Congress’s intent, to create another collectible. And that was not the intent. The intent was to authorize a bullion coin. And as I sidelight of that, it also allowed us to produce a proof coin, which is a collectible coin. It was never intended to be a commemorative coin of any kind.

So that’s sort of how we got started. And that program was immensely successful. Within six months of launching the bullion version of this coin, we had taken sixty, sixty-five percent of the Japanese market away from another competitor. And we’d also, of course, taken the American market away. And that success laid the groundwork for Congress to pass the Fifty State Quarters Program. We demonstrated our ability to perform on an entrepreneurial project.

Grey: So I want to just take a step back – I want to get into the platinum coin provision in particular, but two things that you mentioned were interesting to me. One is you were talking about the idea that Congress had previously micromanaged all of these different coin programs, and you wanted more discretion. One of the things that I traced out in my research on this issue was that if you look at the debt ceiling – before the debt ceiling existed, Congress would micro-manage the issuance of Treasury debt. You have to issue this amount of this kind of duration for this spending program, and this amount for this program, et cetera.

And in the earlier twentieth century that became increasingly unwieldy as the government got bigger. And one of the goals of the original debt ceiling, if not the primary goal, was to give more discretion to the Treasury to choose how to finance, right? You tell us how much to spend, and we will work out how to do it. In fact, I think it was Secretary Mellon in the thirties that said we [the Treasury] should have complete discretion – using similar words to you – in what kinds of securities we issue, in what denominations, to meet our needs. Get Congress out of it entirely.

And it seems like there’s that trend in general, as the government gets bigger and more complicated, to put more discretion on the executive branch. Not to make the important political decisions, but to execute on the sort-of priorities and commitments. And it seems to me that’s kind of consistent with – that there’s a sort of parallel there – with you getting more of that discretion within the Mint’s sort of authority, the way that the Bureau of Debt Management, or Office of Debt Management would have done with Treasury securities.

Diehl: Yes. Yeah, that’s exactly right. And there’s another element to this, and that is that Congress has delegated more authority to the executive branch as it has become more politicized over decades. And a great example of that is the Base Closure Commissions, in which – because it is so politicized, in terms of who are the winners and losers – that Congress in the past was paralyzed in its ability to make the Defense Department more efficient by closing down bases that had outlived their usefulness. And so what did it do? It turned over to the executive branch a process by which it presented a package of bases to be closed and consolidated, and then that package went to Congress, and they could vote it up or down. They could not amend that package whatsoever. So basically what Congress did was said “put these handcuffs on us, and then, you know, just give us a simple option.”

That’s also what they did with that whole Commemorative Coin Program. I basically put together a Base Closure Commission for these coins, so that there was a committee that was formed that would make recommendations to Congress. And Congressmen would make recommendations to us, but they didn’t have to say no. They could say, “Oh, the executive branch committee over here, they said no.


Grey: Mhm. And you can see a clear parallel with the debt ceiling today, where everybody knows it needs to be increased or abolished, but nobody wants to take political responsibility.

Diehl: Yes.

Grey: And so, for the executive branch to step into the breach and say: look, we’re going to do what everybody knows needs to be done–

Diehl: Yes.

Grey: …but may be politically unpalatable, and that might be to use authority that you’ve clearly given us, you know–

Diehl: Yes.

Grey: …in ways that maybe you want to be able to say, hey, you didn’t want this–

Diehl: Yes.

Grey: …and that’s useful political theater, because you can distance yourself a little bit, but it allows us to keep doing what needs to be done.

Diehl: And that is part of the magic of the trillion dollar coin, is it takes – it depoliticizes the whole issue. After you bite the bullet – or bite the coin – and do it, it takes that issue out of the hands of Congress. Everybody is off the hook, except the Secretary of Treasury and the President. And actually, I think what happens – right now what’s happening – is the trillion dollar coin, and also the Fourteenth Amendment, serve as a failsafe–

Grey: Yes.

Diehl: …on the coin. So everybody can play games with the politics of this, knowing that in the end that there are outs to this. And to sort of settle markets down as they pretend to approach this disaster of the economic collapse of default. And I, you know, I think that’s part of what’s happened this week, when all of a sudden, you know, Senator McConnell decides that, well, let’s put this off. Because there were escape hatches.

There were other things that were going on too, like, you know, the Department of Defense intervened, and said–

Grey: We need to keep the lights on, this is a national security issue.

Diehl: Yeah, we need to pay our people. And so there were other things at play too. But the timing of the article that was written by Felix Salmon, that said, you know, that quoted me, saying, Oh, the Treasury Department could–

Grey: could be done in hours.

Diehl: Yeah, can produce this coin overnight, virtually, if they set up a couple of ducks in order. And that’s the first time, I don’t think that had ever been said.

Grey: No, it hadn’t.

Diehl: And so – and it got tremendous play. As you know, Drudge put it at the top of their page, and then gave a spin to the title that suggested it was already–

Grey: They’re going to do it, yeah.

Diehl: …They’re doing it right now. So–

Grey:  The hyperbole helped bring it further into reality.

Diehl: Yes, yeah, yeah. It certainly blew up the whole story.

Grey: Yeah, and I want to just go and take a step back also. Because you were just talking about taking this out of – about depoliticizing this. But of course, this isn’t about depoliticizing the budget itself.

This isn’t about depoliticizing spending itself.

Diehl: Exactly, yeah.

Grey: That’s still an incredibly political process. In fact, maybe the most central political process for Congress. This is just about honoring that spending once it’s already been committed, and not saying we’re going to ignore Congress, or go back on our debts and things. And I just to sort of connect that, because one of the things that you haven’t mentioned about your legacy – and correct me if I’m wrong about when this, the timing of this – but my understanding is that you were also the Mint Director when the Mint really sort of separated its own budget from the rest of Treasury, and became a nonappropriated fund instrumentality, which means essentially that it funds itself through its own operations. You know, the CFPB [Consumer Finance Protection Bureau] does this with fines, other agencies do this with fines, the Fed does it with its own money creation powers.

But you essentially sort of elevated the Mint back up to an equal status with the Fed in terms of being, kind of, off balance sheet from the rest of the government. Which, when you combine that with the Mint’s sort of, internal powers, makes it a very very, you know, powerful institution. As you said, the Mint has been around for two hundred years, it’s the oldest monetary institution in the U.S. government. But that seems to have been a pretty key moment in making the modern Mint what it is today. Do you have any thoughts?

Diehl: Yes, it absolutely was. And when I proposed this to Treasury I got laughed at. They said, how are you going to get Congress to let go of the purse strings on your agency. And I said, I’m going to do it through the Appropriations Committee. Which made them laugh harder, because of course the Appropriations Committee is where that power is exercised. But I already know at the time that the Chairman of my Appropriations Sub-Committee was going to back it, because he and I had talked about it, and he really–

Grey: You worked on the hill, you know how this works.

Diehl: Well, yes, exactly. But also I was very fortunate, because the new Republican Chairman of the Committee – this was in ‘95, so right after the Gingrich revolution – the new Republican Chairman of the Appropriations Sub-Committee was a conservative – very conservative – Republican. But he and I hit it off on a personal level. And he really liked the idea of what I was doing at the United States Mint, of turning it into an entrepreneurial, you know, business-like agency.

Grey: Believing the government can do something, ironically.

Diehl: Yes, yes. This was before there was this commitment in the party – his party – that the best way of showing the government could not perform was to sabotage it. And so he was not like this at all, a guy by the name of Jim Lightfoot from Iowa. And so he said yes, you know, and I explained that all these things that we need to do, I need to have this flexibility. And so I need to operate off my own profits. The U.S. Mint is a profit-making enterprise for the U.S. government. Our profits go directly into the general fund of the Treasury. And I told him, you give me this flexibility, and I’m going to send a lot more money into the General Fund.

Grey: Which means less government debt, right? Less borrowing.

Diehl: Exactly. I mean, that’s exactly right. The money from the United States Mint, part of it, is exactly the same as tax revenue. And the other part of it, which gets to the trillion dollar coin, is very much like the issuance of interest-free loans, uh, bonds. So the combination of that, you know, really was compelling to him. He carried the legislation. Not only did we get completely off the appropriations process, but we also got the FAR, the federal procurement regulations, were lifted from us. So we took a document that was like *this* thick, and turned it into a pamphlet, to describe to outsiders what our acquisition process was.

Grey: So once again, it’s the story of more flexibility, more discretion.

Diehl: Yes. And I will say this: later on, we went to OMB [Office of Management and Budget] and asked for flexibility around the personnel rules. And I had such a good relationship with our unions that I actually had the endorsement of our unions to lift the personnel rules from us. And when my Deputy Director and I went in, we explained what we wanted to do, and pointed to our success on the procurement and on funding. He said, “you don’t understand. It’s not failure we fear, it’s success.” So we realized, okay, we’re at that point of hitting the Catch-22.

And the concern was, and he said – we said, what’s that mean? – and he said well, if you achieve this kind of flexibility, every other government agency is going to want it. And we said, our response was, “well, if they earned it, why wouldn’t you give it to them?”, knowing that is a very high bar to reach, and not very many government agencies are going to do that. One of the reasons they wont do it is because the professional risk – and therefore the financial risk – that leadership in Washington D.C. takes if it wants to make a significant change in how things work in Washington, and in the performance of an agency.

So there were a lot of things that, sort of came – and we got really lucky. We had friendly Republicans in key positions. But it is, yeah, it is hard to get that kind of flexibility.

Grey: It’s just incredible to hear this story in detail like this, I mean I feel like it needs to be a book or a movie, or something. I’ve spent a fair bit of time studying the origins of the Federal Reserve, and it’s incredible to hear this story – that you sort of almost did single-handedly – when you think about the Federal Reserve’s origins as this sort of confluence of massive banking interests in the heart of a crisis. And you’re just behind the scenes, sort of quietly doing something that ends up creating a level of budgetary and legal autonomy that’s sort of comparable within its own space.

But a couple of things were sticking out to me. One is the Federal Reserve also has budgetary independence, but doesn’t have the same kind of independence with its employees, for maybe a similar reason. So there are court cases and things where they say, look, in one sense the Federal Reserve System is clearly a government agency, but it’s got its own separate budget process, but in certain circumstances employees will be considered government employees.

But your point about the seigniorage revenue being a source of income similar to interest-free loans: at the Fed, of course, they create Federal Reserve Notes; they create reserves, which banks use as money. And the profits that the Fed returns from the assets that it buys by creating those dollars, when it returns it to the Fed, at least very recently, it was booked in accounting terms as Interest on Federal Reserve Notes. So the whole thing was, we can create this one kind of currency, and anything we do within our agency will be sent back as the sort of seigniorage profit, or the charge that we pay on what we earn on creating these instruments.

And so it’s sort of interesting to me that we have this moment where, you know, when the Federal Reserve returns eighty billion dollars a year in this revenue, we say this is great, you know, this reduces the need to borrow, thank you so much. This isn’t against Federal Reserve independence, this is good for, you know, statutory agency independence. But nobody kind of notices that the Mint’s also been doing that, often because the numbers are maybe an order of magnitude smaller. But as you noted, in your tenure they went up. And they could have kept going up. And there’s never been a limit historically on the upper limit. It’s only been, sort of, how visionary the Mint Director has been, it seems like.

Diehl: Yes, yeah, those are good points. And it gets to one of the points I like to make, [which] is: the trillion dollar coin is nothing novel. I mean, it has been made out to be this gimmick. And as you say, you know, it’s [an] everyday occurrence at the Fed, and at the United States Mint. Creating seigniorage – seigniorage being the difference between the face value of a coin, in this case, and the cost of production. And that represents sort of a profit, but really it represents more of a loan in this case, because the U.S. Mint sends a coin – a quarter, let’s say – to the Federal Reserve. The Federal Reserve purchases it for the face value – twenty-five cents. Let’s say the Mint produces it at a cost of eight cents. So that’s seventeen cents, margin, that the Mint makes on that coin. Well, you add up all of that in the course of the year, and that acts as – the U.S. Mint moves it over to the Treasury Department – and that seigniorage acts as a means of funding the government, just like a bond does.

And so the only difference a trillion dollar coin represents, is it has more zeroes on the end of it. And, yeah, that’s a huge thing. But it’s not a different process. It’s not a different concept. In fact, this is a concept – seigniorage goes back, you know, I don’t know–

Grey: Yeah, Founding Fathers.

Diehl: …two hundred years.

Grey: Pointy hats–

Diehl: Yeah.

Grey: …and tin whistles, and, you know, the HBO mini-series.

Diehl: Yeah.

Grey: It’s as American as apple pie.

Diehl: [Chuckling] Yes. Yeah, yeah. And it’s because governments have used seigniorage to fund their operations – the King’s operations – for hundreds and hundreds of years. And Mint Directors in the past, if they shaved too much – if they shorted the amount of metal that was in a coin beyond what the Crown had authorized – they were hung, you know. 

Grey: It was a big deal.

Diehl: It was a really big deal, yeah.

Grey: Isaac Newton was the Mint Director in the U.K, took his job very seriously. Yeah, I mean, two things on that. One is, you know, you say it’s sort of like issuing government debt. But it’s important, and this is where, again, being very clear about statutory language – as a law professor I love this whole moment because it’s forcing people to learn how statutes work – but the public debt limit is quite narrow. It’s for things that have interest and principle, and it includes only a certain group of instruments. So for example, Federal Reserve Notes and coins have never been counted in the national debt. If they did, then we’d have probably accidentally violated the debt ceiling a number of times already.

Diehl: Yes.

Grey:  But not only that, there’s actually been instruments that the Federal Reserve issues – interestearning term deposits, which they started issuing in 2009 – that pay interest, are a legal obligation of the government, but are not included in the debt ceiling. And so there’s a lot of instruments out there – including the Greenbacks that Lincoln authorized, that are still legal on the books at the Bureau of Engraving and Printing – that are not included in the debt ceiling. We could call them debt, we could call them a means of financing, but they are no “Debt Subject to Limit” in the same way. And this coin would be very clearly in that category, not in the category of debt subject to the debt ceiling, because that’s a very narrow category. And that’s sort of one of the other confusions. People say, “oh well this is basically violating the spirit of the debt ceiling law.” Well, no more than issuing a quarter is, right?

Diehl: Yes, that’s exactly right.

Grey: And you mentioned, you know, that this was a sort of bullion coin program initially. And I think this is one other confusion – we were just talking about this earlier – people often think, well, bullion coins have to represent the underlying metal value and nothing more. And the reality – correct me if I’m wrong – is that a lot of bullion coins are sold, you know, over their face value because the metal is more expensive.

But there’s nothing that says the face value couldn’t be more than the metal, and we certainly aren’t on a gold standard, or a metal standard in general. And it’s the face value of the coin that matters. In fact, I pulled up a couple of statutes – 31 U.S.C. § 5112(q)(4), which concerns the sale of $50 denominated gold bullion coins, says that the bullion coins shall be sold for an amount the Secretary determines to be appropriate, but not less than the sum of the market value of the bullion, and the cost of designing the coins, including labor, materials, machinery, et cetera.

So even with regular bullion coins – and there’s another one for § 5112(o)(4)(A), which governs the sale of $10 denominated commemorative gold coins, that says that bullion coins shall be sold at a price that is equal to or greater than the sum of the face value and the cost of designing the coins. So even when we think of bullion coins, we’re not thinking of something that can only ever be the value of the metal. That might be a floor, but it’s not necessarily a ceiling. Does that sound correct to you?

Diehl: Yes, that’s exactly right. And it’s only by practice, and sort of practicality, that the U.S. Mint sells bullion coins at a small premium over the spot price of gold, that represents those costs of production, of marketing, sales, and all that. And that’s because the purpose of the coin is to compete in marketplace with other bullion coins. And so those sorts of price constraints apply because of the intent, and the intent of the product, and the circumstances in which the product enters the marketplace. None of that applies to a trillion dollar coin. Its purpose is very different. And so it wouldn’t make sense for it to follow that model, because it is so different.

The other thing that’s important is there is no language in that provision of law that authorizes the platinum coin that says anything about pricing.

Grey: That’s right – other than that the Treasury Secretary has absolute discretion, right?

Diehl: Yes, yes. So the restraints that are in the statute, that apply to gold and silver bullion coins, aren’t there for platinum.

Grey: And I believe it was Harvard Law Professor Lawrence Tribe that talked about this. He said, you know, if you look at all the other statutes, and they have constraints. And then you look at one that doesn’t. And it was intentionally written to not have the same constraints as the others. Then you have to take that seriously as a matter of statutory interpretation. You can’t say, “oh, they meant it to have similar constraints, they just forgot.” You wrote it! You didn’t forget. You made it.

Diehl: [Chuckling] Yeah, no, it’s a feature not a bug.

Grey: That’s right, that’s right. That’s exactly right. And you mentioned also, you know, there was also this other language for “proof” coins in the statute as well. And there’s been some sort of debate around this. People say well, proof coins means they have to only be entered into as collectibles. And obviously, most proof coins are collectibles. But my understanding – correct me if I’m wrong – is that the word “proof” there refers to the method of production. Can you describe that for people that aren’t that very familiar with the minting process, what proofing is?

Diehl: Yeah, so proof coins are produced in a very different way from circulating coins and bullion coins. And they are produced to much higher standard. Also, they look different. They have a frosted image, typically, and a marred background. They are sort of a fine art of coin production. And so those coins are typically sold to collectors. But there’s no restriction. They could be sold as bullion coins. They could be produced and put into the Fed as circulating coins.

Grey: You wouldn’t do it because it would be a waste of money and high production grade, but you could if you wanted to, right?

Diehl: Exactly. I mean, you could do it – and we actually talked about doing something like this – to put a very small portion of, like, a State Quarter,into circulation through these huge ballistic bags that we send to the Federal Reserve, and they put into rolls and they ship to banks. And we decided that there was enough interest in the 50 State Quarters when we launched it without doing something like that, there was–

Grey: Sort of like Charlie and the Chocolate Factory and the golden tickets.

Diehl: [Chuckling] Yes, yeah exactly, yes. And so, yes, we completely had the authority to do it. The economics of it does not work if you’re doing all the coins like that. If you took a very small, you know, percentage and did it like that, then the accelerant would easily pay for itself, because all these other coins would be collected hoping to get those. And you get all the seigniorage profit on that.

Grey: In fact, I believe it was Andrew Jackson who issued a Gobrecht Dollar that was a proof circulating coin. And you might know the history better than me, but my understanding was that it was the sort of reintroduction of a dollar coin. And so it was a sort of, as you say, an attempt to drum up interest, and to make a big show of it. And so the reason that you used this higher production grade quality was precisely to get the marketing and the attention, more than you might for a regular coin. And that was a proof coin that happened to circulate. So there’s no kind of inconsistency there.

Diehl: Yes. There’s a similar situation that as far as I know was an accident. I was not aware it was happening, I don’t at all know it was intentional. But when the Sacagawea coin was launched, there were some of them that were produced on a more highly refined blank, and those coins became especially valuable collector items once they were discovered, and–

Grey: Semi-proof, huh? Quasi-proof?

Diehl: Yeah, but it had a better strike to it. And as a result we had a similar kind of effect that you’re describing.

Grey: And the idea of, kind of, having a high – you know, you call it the [high] art of of coins – seems to be pretty appropriate for a trillion dollar coin. You know, I’ve always said, people say “what happens if it gets stolen?” or something, and its sort of a funny joke. And yeah, we all get to laugh about it. Of course, if you steal a trillion dollar coin and then try to use it, there’s going to be a pretty strong legal presumption you didn’t get it legally, right? But I’ve always thought it would be great to have some ritual and symbolism around this, especially if it was to save the government from itself and this insanity of the debt ceiling.

When you think about the Federal Reserve and its announcements – you know, the ritual of these Federal Reserve pronouncements – when you think of courts and them wearing robes, when you think of military service and the, you know, the music they play, and the folding of the flag, ritual is very important to our government. And if we were to going to mint a trillion dollar coin, having it to be beautiful quality, and then, you know, having a child walk it from the Mint to the Fed–

Diehl: Yep.

Grey: …and say, you know, here we are, I’d like to hand this over, and then “I accept this on behalf of the American people,” you know.

Diehl: Yes.

Grey: And then maybe on the other side it ends up at the Smithsonian, and everyone can tour it in schools as part of their, you know, American history education. It seems like proof coin, there, is sort of the appropriate one. Even if the law had said “bullion, proof, or circulating coins,” if you were going to create a trillion dollar coin, you’d probably want it to be proof.

Diehl: Yes, yes. Well, not only would you stand out if you carried a trillion dollar coin and tried to use it in commerce, but hard to make change for it to. But yes, sitting at the Smithsonian, obviously you’d have to have it well guarded, but the–

Grey: Alongside the Declaration of Independence, or something.

Diehl: Exactly, yes. But the key to this – and to address another knock that we hear that is fallacious on the coin – the key is that the coin does not, and of course, can not go into circulation. It has no impact on the money supply. And that is the wrap, is that all of a sudden, it’s going to be like Venezuela. All of a sudden, you’re increasing the money supply by a trillion dollars, and you’re going to have all of these disasters and consequences. You know, it never goes into commerce. It’s not like other coins, or currency, or QE [Quantitative Easing] for that matter, in which money is being inserted into the economy. This coin is produced at the United States Mint, goes to the Federal Reserve, stays in a vault. There will be, when sanity prevails and the debt limit is increased, that trillion dollar coin can come back to the U.S. Mint, just like any other coin. That seigniorage is taken off the books, and the coin is destroyed.

Grey: Right. The only spending that would happen is the spending that Congress has already said needs to happen, that should be happening anyway, and in fact is constitutionally required under the Fourteenth Amendment.

Diehl: That’s exactly right.

Grey: The money going out of the Treasury’s account into people’s pockets should have kept going anyway, but for the insanity in Congress, and these misunderstandings that the debt ceiling is supposed to stop us from being able to continue honoring those obligations.

Diehl: Yes, yeah, exactly.

Grey: So, one question – you mentioned there, you said the coin doesn’t need to go into circulation. Usually, my understanding – and correct me if I’m wrong – is that coins are sold to the Fed, and that the Fed sells them on to banks, who then, you know, get it out into the public. But the Fed isn’t the only actor that has bought coins directly from the Mint, apart from collectors and bullion investors, right? There are other ways that coins do get into circulation. Do you want to tell us a little bit about some of that history?

Diehl: [Chuckling] Okay, yes. It’s sort of notorious. So we were given a mandate by Congress to produce a new dollar coin to replace the Susan B. Anthony, which was an utter failure for a number of reasons. And this is something that Congressman Castle and I worked together on as well. And we were given discretion in this case too, but only over the design of the coin. And it was through a design competition that the United States Mint executed, that the image of Sacagawea and her infant Jean Baptiste on her back, during the Lewis and Clark expedition, was chosen for that coin.

And so we did a lot of market research – part of the entrepreneurial basis. The United States Mint hadn’t done that before to any significant degree; certainly hadn’t with the Susan B. Anthony. And part of the market research was to go the banks and the Fed, and say, you know, to make a pitch: you should get this coin, it’s going to be much more popular than the Susan B. Anthony, and they won’t be in the vaults forever. Here’s the market research of consumers that shows there will be this demand. And the response from the banks and the Federal Reserve was, “well, you have to demonstrate to us – actually demonstrate to us – that there will be demand for this cause.”

Well [it was] the ultimate Catch-22, because if we can’t get through the Federal Reserve into the banks, how do you demonstrate the public is going to want it.

Grey: It’s almost like they just didn’t want it.

Diehl: They didn’t want it, yeah. The coins and the Federal Reserve – I mean, the banks and the Federal Reserve, they don’t like coins. And for–

Grey: It’s an unpleasant reminder that there’s other monetary traditions other than theirs, right?

Diehl: Yes. And coins are more expensive for the Federal Reserve: they’re heavier, they’re–

Grey: They have to pay face value, not the paper cost if they buy paper notes.

Diehl: Exactly, yes. And a dollar coin that was highly popular, the banks in particular didn’t like. Because what happens if you have a really popular coin? Customers come into the bank, they ask for it, they come to the drive-through. That imposes a cost on the banks they don’t want to incur. So no way, they weren’t going to do it, we couldn’t persuade them. It wasn’t a big enough issue for the Secretary of the Treasury or certainly the Chairman of the Fed to get involved in–

Grey: Small change for them.

Diehl: Yeah, exactly. Doesn’t matter. Penny-ante. And, so–

Grey: In fact, I believe I’ve read some Government Accountability Office reports saying, you know, it would be much better for costs and things to have less dollar paper notes and more dollar coins, but it’s very hard to get people to use it, and it would certainly be hard if the banks are not actually on board with helping people use it, and actively resist.

Diehl: Yes, yes. So, being entrepreneurial, we decided we’d go around the Fed and the banks. And I had a lunch with the brand new lobbyist for Walmart, who’d never done any lobbying before. He didn’t know this kind of entrepreneurial stuff wasn’t smart in Washington, D.C. So I said, what I want to do is I want to launch this coin on the same date in three thousand locations, Walmart locations across the country. And we will direct ship, you know – and it was, my recollection was it was two hundred million coins over the period of those two months – to all those locations. A huge number. They wanted as much as we could produce, well we couldn’t produce more than that. And so none of the banks ordered it, Walmart ordered it, and we did a marketing campaign, and at the end of January 2000, that coin was launched.

People lined up. People think the Sacagawea coin was a failure. And it ended up being a failure for a couple of reasons – one is hostility in the banks and the Federal Reserve. But when we launched it, people lined up at the stores. They were out of the coins by the end of the first day. They wanted to order more, we were on a production schedule. But when people couldn’t get the coin that they wanted at Walmart, they went to their banks, and the banks didn’t have them. And so they were embarrassed.

And so what did they do? They don’t say, “oh, you know, we made a mistake.” They call their contact at the Federal Reserve. And the complaints all come in to Greenspan, Greenspan calls the Secretary of the Treasury, I get a telephone call, and I explained why we had done it this way, and it faded the heat. But what we ended up doing was, we went back to Walmart and said, “we’re not going to be able to provide the second one hundred million coins.” It’s a government contract, and also they had achieved their objective.

So we took that hundred million coins, and direct shipped them to the banks based on orders they made online.

Grey: On the day.

Diehl: Huh?

Grey: On the day.

Diehl: Yes, yeah. And we direct shipped it because the process of getting coins from the Mint through the Federal Reserve to the banks was so slow that we, you know, it frustrated the demand. So we bit the bullet and direct shipped it to them, and so it kind of ended the controversy.

Grey: It’s an interesting story on two levels, because on one level it’s showing that – you know, people often say well the Fed wouldn’t accept the coin – well, maybe there are other people that would accept, maybe not a trillion, you know, not everyone’s looking for a trillion in cash, but there are certain investors and things that are looking for, you know, a billion dollars in liquid cash and things. And if you could say, “hey, you know, we can’t sell any more T-Bills this month, but we can sell some coins that you can store, and they’re legal tender, and they will satisfy your fiduciary responsibilities to invest in safe assets, you know, I think there could be people that’d be interested.

But the other part of that story is that, you know, we often think that, “oh the Fed said it can’t be done, so it can’t be done.” But the reality is that’s just one opinion of one agency within the government, and there’s other agencies with other opinions, and who ends up winning that battle when there’s a difference is often about who’s more creative in putting pressure in the right way. And the story you just told is about precisely putting the pressure. And you mentioned a similar story in the past about the 50 State Quarters, where the antagonist was the Treasury in that situation, if you want to share a little about that story.

Diehl: Well, opinions are a dime a dozen. And so of course, you have to look behind the opinions at the facts. And on all of these monetary issues, they’re very complex. So it’s hard to sort through, and usually you have to rely on somebody whose judgment and independence you trust. But the other thing is it’s crucial to look at what is the motive behind – the economic motive, the emotional motive, whatever–

Grey: The partisan, the political motive.

Diehl: …the power motive behind an opinion. And also, what is the strategic situation. For example, we are hearing from the Treasury Department and the White House that “no, no, we won’t do the dollar coin, I mean the trillion dollar coin. It’s a gimmick.” Well, okay, that may be a sincere expression of their intent, or their adamant commitment not to do it. But also it’s very clear that the White House and the Treasury Department wanted a particular outcome, which they got by standing firm. And to say, “yeah, you know, the trillion dollar coin is an option” releases the pressure, the negotiating pressure, to get the outcome they really wanted. And–

Grey: It was Margaret Thatcher that famously popularized “There Is No Alternative” as a justification–

Diehl: Yes.

Grey: …for doing anything. And often there was. But–

Diehl: Yup.

Grey: …it was a useful line. In fact, I remember speaking to some senior Treasury officials back – about the situation in 2011, and they said that. They said, “we didn’t want there to be another option,” because–

Diehl: Yes.

Grey: …we wanted to force the Republicans to come to the table.

Diehl: Yep.

Grey: And so anything that showed that this could be resolved on our side–

Diehl: Yeah.

Grey: …was inconvenient for us.

Diehl: And it’s easy to frame that in partisan terms. That, okay, the Democrats were smarter, tougher, stood hard this time, as opposed to last time; they prevailed. But it’s crucial to rise above that partisan – you know, it’s really a partisan dismissal of what’s really at stake.

Grey: That’s right.

Diehl: What’s at stake here is using the debt limit as a cudgel by threatening the country with default. And now it’s happened three times. The first two times, the Democrats compromised. They were the responsible party. And what did that do?

Grey: Yep.

Diehl: That just laid the foundation for the next time that–

Grey: Yep.

Diehl: …you know, that their opponents would push them to the wall. And this time, they took a stand and the prevailed.

Grey: And, you know, Mitch McConnell managed to get, what? Ten Senators, or something, on board with this, or to vote to change the rules to extend it for another two months? But–

Diehl: Very difficult.

Grey: …all you need–

Diehl: Very hard.

Grey: …all you need is a slightly more radical, you know, opposition party, or maybe not three branches, where there’s enough, you know, members on one side or the other. And yeah, I’ve described it as putting a gun to the head of the American economy–

Diehl: Yes.

Grey: …and saying, “we’ll pull the trigger if they don’t come to the table.” And, you know, even if they’re being unreasonable by not coming to the table, the fact that you’re putting a gun to the head of the American economy is its own form of, kind of, degradation of the process, and what the public understands, because you’re telling them something that isn’t true–

Diehl: Yes.

Grey: …to achieve an outcome–

Diehl: Yes.

Grey: …and in doing so eroding that trust in government, and in the fact that you can, that your politicians are actually telling you what is going on. And they’re doing so in a way that is playing with fire. And if it gets burned will affect everybody. And–

Diehl: Yes.

Grey: …we’ll go, “I can’t believe this happened,” you know?

Diehl: Yes, yeah. And in – I think in the past, when it came up in 2011, 2013, this became increasingly difficult to believe. But, there are some who believed – and some very smart people, savvy people, who believed – that this was only traditional politics: using leverage to – in a negotiating situation – to get an advantage over your opponents. I think we’ve increasingly come to realize – not just because of previous debt limit fights, but from other political situations – that there are people in the country who believe that they benefit, in terms of power and–

Grey: Disruption.

Diehl: …political organization by damaging the economy of the country when the opposing party will be held accountable for it. And it’s a form of economic sabotage. And there is still a group of people who would benefit from that. Or who could sustain their position for a period of time in those circumstances. But the vast majority of us would be losers.

Grey: And we saw that, almost, with some of the – some of the people motivated behind Brexit, for example.

Diehl: That’s right.

Grey: Now they might have been quite aware of how damaging it could be to their economy, but they didn’t care.

Diehl: Yeah.

Grey: So I don’t know if you don’t want to talk about the 50 State Quarter Program and the Treasury experience there, if you – we can move on on that one. But the other thing was, you know, people have been saying, “well, the Fed could just refuse to accept the coin, and it wouldn’t be booked as legal tender until it was sold. And so it’d have to be sold to someone first, and if the Fed refused to accept it then that would be that.” And you were telling me earlier about, sort of, the difference in the legal rules around when something gets counted as, you know, legal tender – when it leaves the Mint, versus when it gets to the Fed.

Diehl: Yes.

Grey: And it reminded me a little bit of when I teach in Contracts. You know, people talk about the Mailbox Rule, you know, when you accept a contract. You send it in the mail versus when the other person receives it; it’s a question of, kind of, when was it accepted. But can you tell us a little bit about that rule, and how it’s changed, and, sort of, what you think about it?

Diehl: You bet. First of all, I think this is a highly unlikely–

Grey: Right.

Diehl: …  theoretical scenario, where–

Grey: …the Federal Reserve would have to be refusing to go along with the Treasury, and saying, “we prefer default in this eleventh-hour moment”–

Diehl: Yes.

Grey: …we will be the ones putting our hand up, saying–

Diehl: Yes.

Grey: …‘we’re willing to cause this default–

Diehl: [Chuckling] yes.

Grey: …in the name of Federal Reserve independence, which, by the way, we hope will still be around tomorrow–

Diehl: That’s right.

Grey: …if we do this.”

Diehl: [Chuckling] Yes, yes. That’s one half of the equation that makes it virtually impossible to happen. The other half of it is just politically, the President, and the Secretary of Treasury, and the Chairman of the Federal Reserve are going to have to agree on doing this beforehand. It’s just, it’s inconceivable that the White House would try to jam this into the Fed. But, I mean, there are scenarios you can conjure up where something like that may happen. So–

Grey: I had a colleague remind me that it’s still on the books that the Treasury Secretary can remove the Fed Chairman for cause, and–

Diehl: Yes.

Grey: …maybe this would be moment–

Diehl: Yes, yes.

Grey: …that unthinkable moment where you might actually be able to remove the Fed Chairman for cause, because they’re standing in the way of preventing unconstitutional default.

Diehl: [Laughing] Yes. I definitely think that would be cause.

Grey: As far as stakes go, you would hope–

Diehl: Yeah, that would be cause.

Grey: …that would be high enough. If the President said, “it’s my sincere belief that–

Diehl: Yeah.

Grey: …this Fed Chair is standing in the way of us, you know, preventing default, I can’t imagine the Supreme Court getting in the way and reversing it. So, you know [shrugs].

Diehl: Yes, yes. And I can think of at least three members of the Senate who you could move into the Chairmanship of the Federal Reserve [clicks fingers] that would accept a trillion dollar coin that fast.

Grey: I won’t ask you to name their names right now.

Diehl: Yes, I’m not gonna name them. But they – and not just because it avoids default, but because there are a whole set of other policy issues that come together in the trillion dollar coin that people don’t talk about because they’re complex. Very complex. And they are downstream from what we are talking about here today.

So this caveat here, to answer your question – this is my recollection of what happened twenty-plus years ago at the United States Mint, and why it happened. And I do not know whether it has changed since then or not. I’d be very surprised if it changed because of the reason why it changed.

So during my term and before my term – during most of my term – seigniorage was booked when coins left the Mint loading dock, on its way to the Fed. So in the case of the trillion dollar coin, we, you know – the U.S. Mint strikes it, they send it to the loading dock, a truck takes it over to a helicopter, which flies it over to the Federal Reserve in New York City in an hour. So under that scenario, boom. The seigniorage would be booked immediately.

There was a point late in my term, when it was the OMB (the Office of Management and Budget), I believe – it could have been Treasury, but I think it was OMB – that changed that booking procedure. And changed it so that the seigniorage wasn’t booked until the Fed had accepted the coin. And – a quarter, whatever coin. And the reason – and it might have happened during the Fifty State Quarters Program (that would make sense) which was launched in 1999 – [was] because we were shipping so many coins to the Federal Reserve, that OMB looked at that and said, “oh, we need to change the incentives for the shipment of coins to the Federal Reserve.”

Grey: You’re too successful. You’re getting to many out the door.

Diehl: Well, it was just the concern that some time in the future the U.S. Mint would produce a whole bunch of coins, send them over to the Federal Reserve – or the Administration would order it to happen – and then inappropriately book – “inappropriately” [inverted fingers] book – all the seigniorage.

So – and this is ironic, because – when I got to the [Mint], there was this boom and bust cycle of the production of coins. And as you can imagine, the demand for coinage depends on the economic activity in the economy. More coins are needed when there’s more economic activity.

Grey: We had a coin shortage last year. I think it’s still enduring, because–

Diehl: Exactly.

Grey: …of the pandemic.

Diehl: Yes. And so – and this was magnified by the Fed’s terrible model for projecting coin demand. And so I had a very smart young economist, who I brought in and said, “uh, we gotta fix this.” Because what happens is we fall way behind in production when all of the sudden all of this demand comes in. And then so we’re so slow in cutting off production, the Federal Reserve vaults fill up with coins. Then those back up into – we had them not in vaults, but in hallways back in those days.

And then when demand comes back up, all that flows out; we have to crank up production. And so the irony of this is that we [the Mint] were responsible for changing the model that the Fed used in cutting down this shipment of excess coins and seigniorage and everything.

But – so, that change occurred. And that would obviously affect the trillion dollar coin, because if the Fed refused to accept it, then the seigniorage wouldn’t be booked. But as we were saying, that’s a highly unlikely situation for all kinds of reasons. It, you know, it would only be done as a failsafe measure. And –

Grey: And the rule that the OMB set could just be changed, right?

Diehl: Well that’s the other thing. Yeah.

Grey: It’s not legislative, it’s not statutory. It wasn’t Congressional intent. This is all within the executive branch, this is all internal baseball between different agencies and internal politics, right?

Diehl: [Nodding] It wasn’t even a regulatory rule change–

Grey: Right, so it wouldn’t need to go through the–

Diehl: …that required public notice and all that stuff. It was just [snaps fingers] you know, they’re just done.

Grey: So if Biden needed to change that rule five minutes before that coin got struck, he could, potentially.

Diehl: Yeah. Absolutely, yeah.

Grey: So I know we’ve been going – we’re [at] the end of time, but I’ve got one last question, sort of. You mentioned all of these downstream, second-order implications of the coin. One of the things that I was writing – and found this, you know, whole issue so fascinating – is because, you know, I was an elementary school teacher. I like social myths and public narratives – about how our government works, that provide the basis for us to understand the world we live in – that are accessible to people.

A colleague of mine – a sociologist named Jakob Feinig – talks about this term “monetary silencing:” where average people are taught to, you know, “you don’t need to know about this stuff. It’s very complicated. There’s people in the room – you know, who wear suits, who have finance backgrounds – they understand all of this stuff. You shouldn’t try to understand it at all, you know?

Diehl: Yes.

Grey: We need economic literacy and monetary/financial literacy in schools, but what we really mean is you,you know, you should balance your checkbook. You shouldn’t learn how the government actually works, and how this sort of ‘veil of money’ works.

And even, you know, very respected scholars who I otherwise respect, you know – there was an op-ed in the New York Times by Peter Coy, just recently, about this – they would say, “look, yes, it’s a Noble Lie that we can’t make money out of thin air, and things like that. But, you know, even if Noble Lies aren’t great in some situations, we shouldn’t probably be drawing attention to this too much right now.” And at least to me, if you look at the alternative, it’s this catastrophic debt ceiling that we keep coming back at. It’s politicians saying we can’t afford to deal with climate change, we can’t afford to deal with poverty, because we don’t have enough money.

And as you said before, it’s a useful political kind of rhetoric, to say, “oh, there’s no alternative to austerity. There’s no alternative.” But if there is an alternative, then these myths are not just things that keep the lights on – they are things that actively harm us. And maybe we could be looking to a new set of myths. Something that meets our new moment and our new needs.

And if we’re in a world now where – you know, bitcoin, and dog[e]coin, and all these things – people have embraced the idea that you can coin an asset out of thin air. It could literally be made of zeros and ones on a computer.

Diehl: [Chuckles] Yes.

Grey: And the value is: how people accept it, how people use it, what’s backing it, has it got the force of law behind it, et cetera. That, if we think about coins, there’s actually maybe a time for a renaissance of coins as a sort of symbol of the money power–

Diehl: [Nodding] Yeah.

Grey: …and going back to that two hundred year history. And one last little point on that before I get your thoughts is: I know that we’re in now this world of government digital currencies – we’ve been talking about, you know, they say a “central bank” digital currency.

Diehl: Yes.

Grey: And I’ve testified to Congress, saying “why don’t we talk about coinage? Why don’t we talk about digital coinage?” Because if you think about a bank account, there’s a third party in the middle. There’s not as much privacy. In fact, there’s a whole third-party legal doctrine that says you don’t have privacy if you put your money with the bank. But even paper currency has a barcode. Coins are the original, anonymous money. If it’s in your pocket, it’s yours.

And one of the earliest forms of digital currency that was tested by a government was Canada, and it was the Royal Mint. They created the “Mint Chip” program–

Diehl: Yes.

Grey: …and it was an attempt to create a digital coin. So maybe, you know, I’d be curious to your thoughts – as we’re entering a digital world, as we’re discussing how to create a whole new form of currency, that maybe the Mint should be in the room. Maybe we should be thinking about this beyond just the Federal Reserve. Beyond just a better bank account. And what lessons we can learn from the history of coinage – and from the design of coinage – even if it will be, you know, a digital equivalent.

Diehl: Well Mike Castle – Representative Mike Castle – back in, probably, ‘96, ‘97, had a Congressional hearing on the future of money. And I testified at that. And all these issues sort of came up in a primitive form.

Grey: You were talking about stored value cards at the time, if I remember that correctly.

Diehl: Yes, yeah, that’s exactly right. Stored value coins. And this is one of the things that I was – you raised one of the issues I was really intent on at the time – was that coinage is the ultimate private exchange. Cannot be traced.

And that – in those days, people weren’t concerned about privacy. I mean, it was amazing to me how nonchalant people were about privacy. And then we saw all that take off with social media. Where people told their life stories, and said things online that inevitably would come back to haunt them. And people just sort of didn’t care about it.

Well now, especially after 9/11 and the surveillance act–

Grey: The Patriot Act.

Diehl: Yeah, Patriot Act. People woke up to what that meant. And so, you know, it’s begun to sink into the culture. And I think you’re absolutely right.

You know, coinage is the physical embodiment of that set of privacy values, which are being expressed in what I believe is a highly-dangerous-to-individuals-form in crypt[o]currency. And also, you know, has the potential of destabilizing the larger economic system. So–

Grey: If the only kind of privacy we get is these volatile crypto private-currencies–

Diehl: Yes.

Grey: …then it will be a very bad day for privacy, because–

Diehl: Well, if we–

Grey: …it doesn’t have the full faith and credit of the United States. It doesn’t have that whole infrastructure. You can’t use it at a store, necessarily. All those kinds of things. 

Diehl: Well we’ve lived through that before too. Leading into the Civil War, when before there was the American Greenback.

Grey: Greenback, yeah.  

Diehl: And so you had all these banks issuing their own currency. And yeah, you know, if you were using it locally you knew something about the stability and reputation of that bank. But the further you got away from that bank, that note would still be used, and people didn’t know, you know, what was the providence behind this note. And–

Grey: I remember someone saying it used to be better to get a counterfeit note on a good bank–

Diehl: [Chuckling] Yes.

Grey: …than a good note on a bad bank.

Diehl: Exactly right, yes. And the U.S. could put up with that, economically. And there wasn’t the political will to do anything about it until the Civil War. And then the U.S. federal government – number one – had the ability to do it because half the nation who opposed doing anything about that left Congress. And the other was: we need to finance, you know, the war.

So necessity bred a change. And unfortunately that’s how the government works; our government works. It reacts. So there will have to be some disaster that occurs around cryptocurrency that will drive Congress, the Federal Reserve, the regulators, to do something about it. Hopefully that occurs somewhere else, not in the U.S., and we learn the lesson from somebody else.

But let me address the assumption that underlies this question. And that is that people don’t really understand fiat currency. I think that may have been true in the past. Probably was true in the past. But people have driven into their minds, over and over again – certainly since 2009, with the QE, and the, you know, and the opening, basically, of the flood of the money supply into the economy to save the economy (not just the U.S. economy, but the world economy) – people came to understand that what fiat currency means.

And they don’t necessarily understand what it means: the “full faith and credit of the United States Government.” What that means. But – especially when you’re threatening to default on your, you know–

Grey: Especially when it doesn’t mean as much as it used to, maybe.

Diehl: Yes, yes. So I think people are getting that. The other thing, why people are being educated on that, is that a conservative mantra has been against fiat currency [and] for the gold standard. And, you know, that’s been the case since, you know, ‘33? Since FDR got us off the gold standard. And – well, informally–

Grey: They’ve been predicting the–

Diehl: …and then Nixon took us off. But – so I think the predicate has been laid for the trillion dollar coin. People just don’t – it looks like a gimmick. And when you think about it, this is a branding problem.

Grey: Yep.

Diehl: Because “QE” (Quantitative Easing), it hides what it does. Those words, it sounds really complex. Beyond our comprehension. Whereas a trillion dollar coin sounds ludicrous, you know? Grey: Yep. What we’re doing is we’re easing, quantitatively–

Diehl: Yeah.

Grey: …with a trillion dollar coin. Let’s just, Mint Quantitative Easing. Yeah. And you’re absolutely right. You know, there were newspaper headlines: “oh trillions of dollars have been created.” If that was going to cause a panic in the streets, where was it? Where was it the last ten years? When the last debt ceiling crisis happened, even Standard & Poors downgraded the U.S. credit rating. And what happened? People flooded into Treasuries, not out of them.

And I remember Neel Kashkari, last year – the President of the Minneapolis Fed – said, “we have an infinite amount of dollars that we can use to save us from this crisis.” I’d never heard a Federal Reserve person use the word –

Diehl: [Chuckling] No, that is pretty good.

Grey: …“infinite” in public before. Maybe in private, but not in public. And the New York Times had an op-ed headline saying, “the Coronavirus money is being pulled out of thin air.” And if that’s not going to cause a crisis, you know, I think you’re right. The idea that the public can’t handle this truth that it’s too big, it’s too scary – even if that had some credibility in 2006, it doesn’t have the same credibility in 2021.

But maybe you’re right. Maybe it does take necessity to breed government action. And maybe we do need to get even closer to that debt ceiling cliff, you know, before we will entertain the unthinkable.

Diehl: If I could–

Grey: Sorry.

Diehl: If I could make one other point, that has really been impressing on me under these current circumstances. There will come a day when it’s inevitable: what comes down must also go up. And I’m talking about the inflation rate. And all know this in the back of our minds, that once the inflation rate goes up, and the federal government is no longer paying what is essentially zero-interest on an inflation-adjusted basis for, you know, on its bonds. When inflation goes up and we have to pay more, and we have thirty trillion dollars in debt, then we are going to see interest payments – the financing of that debt – devouring larger and larger sections of the federal budget.

Grey: Yeah.

Diehl: And coinage – and seigniorage – is one of the ways to think conceptually about how to deal with that. And this is particularly relevant in terms of the whole starve the beast strategy, [which] is that we will build all these deficits, at some point the government will have to face reality, and will have to start cutting social security, and killing all the old New Deal and Great Society programs. And Obamacare, now. All that will have to die, and there won’t be any choice.

Well, there are choices. And we just need to be aware that that day is gonna come.

Grey: And we need to be preparing pre-emptively to do that marketing work, and do that public education, and building the institutions. And I know I speak to people, and they say well, you know, even if the Treasury issued zero-interest financing, the Fed would pay interest on reserves if it wanted to raise the interest rate. So it doesn’t matter, which way.

And I say to them, “but you know it’s very different in the public mindset if this is the cost of ‘borrowing’ or the cost of government spending on one hand, or if it’s the Federal Reserve choosing to pay money – for free – to people because it wants a higher interest rate. If the Fed wants to do that – if it wants to take responsibility for paying, you know, hundreds of billions of dollars of interest as part of its monetary policy – it can take responsibility for doing that, and see whether or not that’s the best way to actually limit inflation.

There were debates in the ‘70’s, in the ‘50’s, about using other forms of qualitative and quantitative credit regulation, and other ways to limit, you know, investment in the economy – to cool the economy down – that didn’t require raising interest rates through the roof like Paul Volcker did. And my guess is when it’s easy to blame the Treasury for those interest payments, then it’s a lot easier for the Fed to raise rates. If the Fed had to own the politics of raising rates like that – and giving free money to interest-earning, you know, people who hold interest-earning reserves, or other assets issued by the Fed – and had to take responsibility for that on their balance sheet, my guess is they would be a little more creative about finding other ways to manage inflation.

Diehl: Yes, yeah. Yes.

Grey: Well thank you so much. It’s been an absolute pleasure, Director Diehl. I honestly feel like this is the kind of conversation that will hopefully go into the history books. Because I’ve never heard these kinds of stories from within the government before. So thank you so much for taking the time with me, and for your voice and for your courage in speaking out. And I hope I don’t have to see you again because we don’t have this problem recurring, but–

Diehl: [Chuckles] Yes.

Grey: …maybe we will, and I look forward to connecting again in the future. Thank you very much.

Diehl: My pleasure. Thank you.

End of Transcript

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

Abstractions also Liberate with Anna Kornbluh

Anna Kornbluh joins Money on the Left to discuss the politics of form and literary realism as theorized in her provocative book, The Order of Forms: Realism, Formalism, and Social Space (University of Chicago Press, 2019). In The Order of Forms, Kornbluh lays bare the problematic “anarcho-vitalist” underpinnings of neoliberal discourse which, she argues, also inform much  critical theory and left critique. In contrast, she upholds the necessity, malleability, and contestability of social form. Focusing, in particular, on English novels from Wuthering Heights to Alice in Wonderland, Kornbluh reads myriad nineteenth-century literary realisms as at once speculative and generative abstractions, capable of newly mapping and scaffolding social space. At the same time as forms might oppress, she concludes, abstractions also liberate. Wrapping up the conversation, Kornbluh considers how the politics of form reorient our approaches to contemporary academic labor, pedagogy, and learning. 

Kornbluh is Professor of English at the University of Illinois, Chicago. Her research and teaching center on the novel, film, and theory, especially formalism, marxism, and psychoanalysis. Kornbluh is the author of Marxist Film Theory and Fight Club (Bloomsbury 2019), and Realizing Capital (Fordham 2014), and has just completed a manuscript “Immediacy, Or, The Style of Too Late Capitalism.” She is a founding facilitator for The V21 Collective (Victorian studies for the 21st Century) and InterCcECT (The Inter Chicago Circle for Experimental Critical Theory).

Find Anna Kornbluh on Twitter @V21collective

Visit our Patreon page here:

Music by Nahneen Kula:


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

Scott Ferguso: Anna Kornbluh, welcome to Money on the Left.

Anna Kornbluh: Thanks for having me. It’s so fun to be here.

Scott Ferguson: Yeah, it’s so great to have you here, and especially since you are a dear, old friend of mine who I have learned so much from throughout the years. It’s great to finally have you on our podcast.

Anna Kornbluh: It’s really exciting to listen to you guys and see the conversations you’ve been creating.

Scott Ferguson: Thanks. So maybe to begin, I know you, but our audience doesn’t necessarily know you. Maybe you can say a little bit about your scholarly background and maybe your personal background if you feel like that’s relevant?

Anna Kornbluh: Sure. I live in Chicago–the best city–where I teach at the University of Illinois at Chicago. I’m in the English department and teach a lot of literature, especially focused on the novel and the history of the novel, as well as film, and then a fair amount of literary and critical theory when I’m lucky to do that. I earned a PhD in English with a focus in theory at UC Irvine. I met Scott when I lived in Los Angeles and when I was getting a Master’s in Film at UCLA. Before that, I had an undergrad degree in political theory. I love the Midwest. I’m stupidly lucky that I am a person who got a job in 2008, and a job with job security and research money. I just couldn’t be more fortunate and wish nothing but these conditions for my fellows.

Scott Ferguson: Perhaps more so than some of our regular guests, your work is deeply critical and theoretical. I think you have a grammar and a style that is very precise, and it does a lot of rich important work. And so, we can improvise it a little bit and that’s cool, but we decided we were going to put together some more formal questions in order to kind of honor the complexity of your thoughts. So perhaps unlike some of our other episodes, we’re going to unabashedly read these questions, just because we wanted to make sure we were getting it right. And with that, I’m gonna hand it off to Billy to take the first one.

William Saas: We’ve invited you here to speak with us specifically about your brilliant scholarly monograph The Order of Forms: Realism, Formalism, and Social Space, which was published in 2019 with the University of Chicago Press. In that book, you articulate a scathing critique of what you deem the “anarcho-vitalist tenor of much contemporary critical theory.” Inversely, you develop a comparatively capacious political formalism which you uncover in the modern novel. We would love it if you could flesh out some of these reciprocal moves for us. How do they intervene in debates in critical theory past and present, and what do they tell us about the construction of what you term social space?

Anna Kornbluh: Thanks for the question. Yeah, so it is a book that’s integrating a lot of different things, right. Chiefly, it is trying to integrate aesthetics and politics, and trying to think about the ways that the traditions of critical theory, and of humanistic interpretation, especially for people who work in the aesthetic humanities–literature, film, art and so on–how they have tended to think about what is that relationship between aesthetics and politics. What does art have to teach us about politics? What is artistic about political arrangement and political dispensation? Maybe I’ll try to put my finger on some of the kinds of biases or habits that have emerged in some of those traditions.

So specifically, I tried to track a position that would associate freedom with formlessness and would privilege a lot of artistic forms of dissolution, disintegration, fragmentation, hybridity, irony, instability, and so on. It has this whole aesthetic vocabulary about those things, because one imagines that those are actually political virtues or values, or that they’re emancipatory. So what gets built into that reinforcing framework then, are some judgments about what kind of art is good. What kind of art is politically educational? What kind is politically not conservative and innovative? Then, there are also some mistakes, maybe, about politics, and chiefly some biases against institutions, such as a kind of reflexive anti-statism we see across aesthetic humanist positions and a horizon in which what we understand to be the nature of a political act is to disrupt something, to break something, to suspend something, rather than to hold it in place or build it up.

Scott Ferguson: I wonder if you could follow up specifically about your critique of Giorgio Agamben’s idea of “destituent power,” is that correct?

Anna Kornbluh: Yeah, so I sort of take him as exemplary of some of these habits of mind in the opening of the book, because he’s such a tremendously influential theorist in the 21st century. I think Homo Sacer is Stanford University Press’ best selling book of all time. In his consummating of Foucault’s biopolitics, in his really trans-historicizing of these tendencies of the state, and of institutions to control life, he has this consummation of an idea that all of Western political power could be schematized according to its constituent tendencies, to make things, to contain things, and to bring things under the purview of control and under the purview of power. And the alternative for him is destitute power, or taking it apart. This is the realm of play, the realm of freedom, and the realm of dissolve for him. If constituent power is violent–like he thinks any active kind of making, forming, putting into place, and instituting is always going to be violent–then, if you want to be on the side of the good, you have to be on the side of the unmaking. So I take him as just kind of emblematic of, or a crystallization of, these habits. Again, I find humanist method and interpretation that have built in these aesthetic and political suppositions insufficient, really.

William Saas: So you’ve named Giorgio Agamben. Are there any other sort of leading lights of this position that you are, in fact, taking a position against?

Anna Kornbluh: Yeah, this is such an interesting problem, right? It’s like when you’re trying to put your finger on a structure of, not feeling, but of ratiocination, or a kind of prevalent form of argumentation. And in one that crosses disciplines and schools, then who are its leading lights? Does it have leading lights? Is an episteme identifiable with a person? And what’s the frame of argument in which you would say there are figureheads of this movement, and then their bodies of thought are consistent with it entirely and so on. Because, obviously, I have friends who deeply love Agamben and who are unhappy about this characterization. But I think some of the other positions that I might name in the book, or certainly in schematising the field, would be queer antinomianism, certain kinds of queer of color critique and feminist critique of institutions, a kind of immediatising, anarchic tendency in certain strains of Marxist theory, in the tradition of thinking aesthetics and politics, the almost messianic or ceaselessly negative kinds of positions of certain texts in the corpus of, and then certain interpretations of, Walter Benjamin and Theodor Adorno. I also identify the most recent real innovations in the theory of aesthetics and politics from Jacques Rancière and Caroline Levine as also continuing to privilege disruption, dissolution, unmaking, hybridity, collision, aleatory, and unpredictable as the kind of value pole, or the good side. We don’t like what stands in place. We don’t like what is sustainable. We don’t like what is form.

Maxximilian Seijo: So then contra this anarcho-vitalist unmaking, your political formalism emphasizes building, making, and structuration as not just a possibility, but as this sort of constitutive engine or motor of politics. Could you perhaps talk more and spell out then what your, dare I say, positive articulation of that critique forms and what it means for thinking the aesthetics of politics or the politics of aesthetics?

Anna Kornbluh: For sure. So the little word vitalism is doing a lot of work for the imaginary that life just springs forth, right? And that there is a kind of Eden of effulgent plenitude that we could be liberated to if only we stopped having the state, or if only we stopped having law, or we stopped having the symbolic. The alternative, the formalistic position that I try to propose and substantiate, and indeed, try to argue that the history of ideas provides plenty of fodder for and eloquence about, is one in which we think forms are not opposed to life, forms are actually infrastructure for life, and forms are essential to life. Human beings have no given format for their existence. It takes a village, should we be in small states, or how should we be organized? But we’re interdependent animals and that’s something that actually differentiates us from other animals. We have this prolonged infantile need of one another in order to survive, not just to live well, but to live at all.

So what shape should that take? There have to be arrangements, patterns, and orders for the making of life. So there’s a kind of ontological claim that form is essential for our well being and for our existence, and that we can recognize and admit that necessity and that essence without having to naturalize particular forms or without having to give up on, forget, or repress the contingency of particular forms. So historical materialism is something like a procedure of accounting for the contingency that human social experience takes. And the content of the formalist doctrine, as it were, also is necessity and contingency at the same time. Human beings need form, but there are no given forms.

But also thinking that every form has been made, every form has been contrived, instituted, and can be remade, and that we can have a horizon of political activity which is about reformation, not in any anti-revolutionary sense, but in the sense of like actually contriving and designing the structures that will enable human wellbeing and that will facilitate flourishing. What’s the best shape? What should be our voting system? What should be our governance? We’re confronting this question now on ecocide, and your previous guest, Kim Stanley Robinson, is very good at thinking about this problem. Is there something about ecocide that requires a super state formation, or an international confederation and what should that look like? That’s a speculative problem for us. And you can’t solve that speculative problem if a priori, or out of the gate, you think forms are bad, forms are oppressive, and we just need to burn it all down. We just need to get out of the purview of power or something.

Scott Ferguson: Yeah, absolutely. I think before we dive into your specific, sustained literary focus in your book, I just wanted to draw attention to something that I think is implicit here, but we can tease out, which is the convergence and unintended complicity between anarcho-vitalist, destituent modalities that are anti-formal, or are about pushing to the limits, or accelerating past extant forms, with neoliberal logics, if not broader modern capitalist logics of disruption. Marx has a dialectical gambit in mind when he says, “All that is solid melts into air.” He thinks that history is going to generate something out of it, but I think you’re holding us back from that precipice and saying, “Well, wait a minute. This is actually the dominant regime. It has a hegemonic logic of dissolution. Maybe that’s not what we should be doing.”

Anna Kornbluh: Exactly. And I think one wants to articulate not in an idealist sense. We don’t want to say, “Oh, theorists are causing these conditions in the world.” We want to do it in a materialist sense, and say, “The structure of theory is determined by the structure of the world.” The ideas in every society are the ideas of the ruling class, and the vocation of theory is to make a cut from that determination. The vocation of theory is to know from which it speaks, and understand its conjunctures, and then figure out what some other logics might be. So if we are supplied, since 1973, with the abundant logic of the dismantling of social institutions, and the highly minimalist vectoring of state power towards the purpose of accumulation and away from the purpose of flourishing–and of course, people will argue that’s never been the purpose of the state, as Marxian anthropology would suggest–but if we cannot see this affinity of our thought with the kind of empirical practices of power, that is an aporia in our reasoning and an insufficient self scrutiny.

The whole gesture of critique, as Kant, Hegel, and certainly Marx produce it, is to look back on the conditions in which your thought is possible. So I do want to articulate that affinity is true. And I do want to point out the underside of that. I think the political theorist, Jodi Dean, is really eloquent about this. We have actually lived through a revolution in the United States in the last 40 years. It’s been a revolution of incredibly disciplined exercise of collective sovereignty by the collective that is against us. It has been incredibly disciplined from the level of school boards and local elections on up to the presidency and the Supreme Court, and the interpreting and mobilizing of institutions for the sake of oligarchic and plutocratic wealth transfer, and anti-democratic consolidations. It’s not the truth of those institutions, necessarily, but they’re mobilizing for that. This has been a highly disciplined and effective practice. That has to be a lesson to us, that our suspicion of the vehiculations of collective agency haven’t gotten us anywhere.

Maxximlian Seijo: So moving from one revolutionary context to perhaps one of a different kind, in your book, you focus, as Scott sort of already mentioned, on literary realism in general, and then on the Victorian realist novel in particular, which the latter you suggest is a rich historical vehicle for thinking through the stakes of what you just diagrammed as political formalism. So against certain currents in Marxist literary theory, as you’ve already mentioned, you argue that literary realism is irreducible to a certain metaphysics of representation, where, in the novel, its various signs, affects, and grammars are judged according to whether they succeed or fail to correspond or refer to an extant historical reality. So then, in this context, what exactly is literary realism on your analysis and how does this particular mode of political formalism work?

Anna Kornbluh: Yeah, that’s a great question. So I’m extremely interested in thinking about literary realism as an experiment, as speculative, and as a wild kind of thought that isn’t available to us in ordinary life. Who gets to think in the third person? Who gets to produce an omniscient perspective? Who gets to survey broad swaths of psychic interiority, social expanses, social depths, different social classes, and long historical arcs and stuff? Only these made up, realist narrators. And this experimental quality is taking into account or giving itself certain constraints. Realism could be defined as against, say, an irrealism of infinity. We take time and space constraints seriously in realism. Nobody lives forever. There’s a lot of death and birth and sex in the realist novel. We’re not on other planets. We’re just stuck on Earth. Like this is what we have. But within these constraints, the great moment of ferment of literary realism in the 19th century is one of tremendous social transformation with the Industrial Revolution, imperial expanse, and then imperial contraction and contestation, democratizing movements, great explosions of literacy, and the urbanization of mass population for the first time in world history.

So there’s all this social churn going on, and realism is this experimental form for trying to figure out like, what should society be shaped like? What should we be doing all day long? Given the constraints that human beings are mortal, and that they’re vulnerable, what should our societies look like? So I like to think about realism as a kind of theory of institutions, a theory of limits, and a theory of human sociability that maybe has some different precepts than the reification that might be attributed to it, or the kind of boringness or un-imaginativeness that might be attributed to it, but also has some different precepts from say, the anarcho-vitalist imaginary. The realist novel is super into schools, banks, governmental agencies, churches, and the places where banal existence is produced and the offices where it happens. And somebody has to think about those banalities. There’s a lot of power there and a lot of possibilities there.

William Saas: So is it possible that the mode of literary realism is conflated with the limited imagination, or the constrained perspective, of the author when it’s sort of at the expense of the mode itself? Would that be fair to say?

Anna Kornbluh: Yeah, I think that’s right. We end up with these kinds of approaches to realism and literary study where we want to correlate it to the context of the author, or correlate it to the biography of the author. We want to sort of say, “Well, the realist novel is only a voice box of the values of its time,” instead of, “No, there’s an immanently critical operation that’s possible in any kind of literary production, and these people are involved in an extremely voracious and demanding kind of imagining of what the world should be like.” I like to say, I know I say it in the book, that all of the major Victorian realist novelists were all journalists, and they were all successful journalists. They all gave that up, because they wanted to do something else. Trollope a little bit less so, he was a bureaucrat his whole life, or a postman. But Thackeray, Eliot, and Dickens, they had jobs writing how things were, they wanted to say something else, they wanted to know something else, and they started writing how things could be.

Scott Ferguson: Okay, so I have the big doozy of a question. I’m just gonna start reading. And hopefully I can get it off the page. With the caveat that we don’t wish to simply conflate your project with the work we do within the Money on the Left editorial collective, we nevertheless find many areas of sympathy and convergence between us. Perhaps above all, we find that your emphatically anti-lapsarian insistence on the speculative and political generativity of abstraction resonates greatly with our conception of money as an abstract and constitutive political form. While you don’t overtly thematize this in your book per se, you come closest to doing so in a passage on page 46, which if you don’t mind, I’m going to read for our audience. Differentiating your theory of literary realism from other influential Marxist interlocutors, you write:

“Prominent recent efforts to advance Marxist aesthetic theory of the contemporary have once again taken up realism, and here too Alberto Toscano, Annie McLanahan, Leigh Claire La Berge, Alison Shonkwiler, and Joshua Clover generally prize reference above all else. For Marxists, realism thus paradoxically occupies two poles simultaneously: the paragon of ideology–the imaginary resolution of real contradictions, the false suture of a partiality as a totality–and the paragon of artistic truth-telling, the gold standard representing  actualities behind the veil.”

This is supercharged language for us. So what’s striking for us in this passage is how it links a problematic metaphysics, a literary reference, to what is, in our view, an equally problematic metaphysics of money qua passive representation. Money is regularly imagined to be a veil over real extant relations and private resources, and the gold standard as a system of signification in which truth telling is somehow guaranteed. Against this monetary representationalism, we would contend that money is constitutive. It’s transformable and it’s public. And it is, above all, an abstraction that is contestable. As such, it enables radical forms of political activation, including urgent contemporary struggles for abolition, reparations, universal healthcare, and an expressly anti-imperialist global Green New Deal. So what we’re wondering is, would you be willing to reflect a bit on this language and some of these resonances that we’re picking up on?

Anna Kornbluh: Yeah, I think that’s a really great question. That may be the best question of all the ones that you guys prepared for me because it speaks to how generative and creative you guys are that you can think about the capacity of abstractions across disciplines, and that you can think about the affinities of different kinds of arguments. I’m just a lowly literary form person. I did write a book about the history of finance, but that’s not this book. But I think that you’re fundamentally right. My most favorite sentence in this whole book, it’s only three words, maybe you guys liked it too: “Abstractions also liberate.” We’re very familiar, as aesthetic humanists, with the position that generalizations are bad, that abstractions are bad, that institutions are bad, and that big ideas exclude the particulars. We think that we can only have this job of championing the particular, the content, the substance, the real, and the body.

So the work that I’m trying to do in terms of pointing out that viewpoint and mindset, and how pervasive it is in the aesthetic humanities, I think, is a parallel logical move and parallel critical move to the work you guys are trying to do you in suggesting that the way that we regard the institution of money is really impoverished, that given the social circumstances of the late capitalist state, and given the tools available to us of the Fed, for instance, that there is a possibility to activate the political determination of what money represents, or how money functions, and that that possibility should be seized by people. And it should be articulated and named by our leaders. So I think that there’s a lot of affinity, or a lot of parallelism, between the approach to institutions, the approach to the state, the approach to representation, the symbolic, and so on, that I’m interested in and you’re interested in.

If one was to try to articulate a possible point of disjuncture, it is how we acknowledge the outside of that position. So I say the existing forms that are available to human beings can be repurposed, re-constellated, they’re malleable, they can be mobilized for different ends, that politics is the work of collectively deliberating what kind of shape for our lives we should have, and that we don’t have to have a kind of revolutionary iconography of the endless horizon of messianic new forms or non-forms. We can work with some of our available forms. How do we articulate that dialectical capacity, that existing possibility, that political prospect, while also acknowledging that this is a delimited horizon of action. Of course, people who want to abolish the value-form are always going to be unsatisfied with your work and with Stephanie Kelton’s work. Of course, our radical, anarcho bro colleagues are always going to think that Stephanie Kelton is insufficient, that Bernie is not enough, and so on.

So what is the kind of gesture intellectually, but then also rhetorically, that gets us to avow money as an instrument in this concrete situation which we find ourselves, that the available determinants of the situation permit to be used and deployed quite differently? That’s a different question from: should we have a society with no money or should we have a society with no abstraction? So what I really find exciting is the insistence by your working group, and by some of its great, accomplished scholars and leaders, that we could do different things with these tools. I got super excited when Janet Yellen gave her induction speech. That might be something you have to delete, I might get fired, haha. I mean, the things that she said about what state power actually has available to it to produce values that benefit the greater good, the greater masses of the people and so on, those were really exciting formations. So yeah, I think there’s a lot of affinity between our projects.

Maxximilian Seijo: I think to that last point on Yellen, at least in the context of the COVID response and the seeming ongoing crackup of the orthodox monetary policy mold that has been dominant for the last 40 to 50 years, this, as you say, sense of the potential for malleability, it’s interesting to see in context with your work that opening and potential thinking. We had KSR on the show a while ago about the way that opening in a formal sense, in the political economic sphere, is also producing all different types of openings in literary spheres. I think that it’s a really interesting way in which there’s almost like a dialogic phenomenon between the different disciplines or areas in which we’re thinking along these similar terms.

Anna Kornbluh: Yeah, I think that’s a great point. Different aesthetic formations are possible and different aesthetic practices are possible when you have a different relationship to mediation. So if you can understand money as a collective sovereign driven determination of value, that doesn’t have a substance behind it in large part, but that can be deployed, you have a kind of orientation towards what forms are able to do that isn’t predicated upon their transparency of representation or their presencing function.

Scott Ferguson: What you just pointed out there, I just want to, not really pushed back, but just kind of clarify something. I know when you say that we think money as not being backed by a substance in the standard understanding of gold or silver, or whatever it is, but I think our relationship would be to say that it is not non-substantial in the same way that I think a lot of us would probably treat language. Language is not without substance. Language really organizes the world. But it doesn’t have to be a chit or a finite thing. We don’t have to presume a chit or a finite substance somehow behind language. The language of the world is participating in the whole of the world in heterogeneous ways. So again, I just think breaking with the metaphysics of representationalism is something that you do quite well. And I think other humanities scholars can do, but not when it comes to money. Money is this kind of blinding social form in that way.

Anna Kornbluh: Yeah, I think so. One way that I like to think about that is that there is a material efficacy to money. There is a performative power, there is an agency of the symbolic that isn’t reducible to a fixed substance behind it, as you say, or that isn’t conflatable to the presences. It does produce things. It does act. And we can have more or less collective exertion of power around those acts given that it’s the vehicle of valorization in our society–within these constraints of what this society is. So yeah, what’s our vocabulary for thinking about that performative efficacy, thinking about forms that produce things, activations of materiality, or what Lacan refers to as the letter has a material substrate? That’s not a substance, that’s not a solidity, and that’s not a concrete thing. It’s an abstraction too, but it is one that takes hold of us.

William Saas: I want to get to our next question, but I want to get there by way of some editorializing and maybe recontextualizing some of the conversation so far. So returning to Jodi Dean’s comments on the revolution of the last 40 to 50 years, we might call that neoliberalism. It strikes me that it might be reasonable to call the folks who are at the head and have orchestrated and been instrumental in that revolution as being really good at political formalism. So I think the sympathy between our projects boils down to this fundamental question that cannot be probably articulated as beautifully as, “Abstractions also liberate,” but, “How’s that worked for you?” might be another way to pose it. So another similarity or affinity between our projects, I think, is, in the face of frustration and ultimately calling for violent revolution or exodus or refutation, we’re up to recovery, re-examination, and re-discovery. And one of the ways that your book demonstrates this is through case study. We’d love for you to walk us through your second chapter in which you reread Marx and Engels’ Manifesto of the Communist Party through the lens of Emily Brontë’s Wuthering Heights, which I think is a very strange pairing, but wonderfully done. But what theoretical or meta-methodological moves are you making here? And how do they serve an alternate history of political form, which can be, as you put it, necessary, malleable and constructible?

Anna Kornbluh: Okay, that’s great. So I think the issue is almost like what is the middle distance? What is the mid-level that we can think about that isn’t total abolition of the value-form or the complete hypothesis of a realm without abstraction or of unstructured life, of anarchic, primordial chaos? And then, on the other side, just only adhering too closely to the smallnesses is where nobody ever wants to think about what power is actually available to us. So I think that mid-level is tactical thinking. I think that it is strategic thinking. It is about what are the tools available in a situation and how do you use them. And the thing that I’m really interested in as a problem between the Manifesto of the Communist Party, which is a document that Marx and Engels produced in late 1847, that comes out in the winter right before 1848, and then has, arguably, an exhortative relationship to the springtime of peoples across Europe in 1848, that document, which comes out at the same time as Wuthering Heights, is exactly this problem of what is the distance or what is the middle? How are we thinking about the constraints of a situation? How are we thinking about the absolute quality or the openings in the political horizon?

So, to make that more clear, in the manifesto, there is an assertion that all of human society is a history of class struggle. And there is also a kind of concluding gesture that the communist revolution will bring with it an end to all antagonism. So what is, I think, a problem of the rhetorical strategy there, of the exhortative anti-capitalist strategy there, is a reduction of the expanse, or this total set as it were, of social contradiction and social antagonism, to the specifically capitalist version of it. Because it simply isn’t true that if we did away with capitalist antagonism, we would have a non-antagonistic society. And it simply isn’t true that we would have a motivated or immanent or natural logic of how to be organized, to go back to our earlier discussions about how there isn’t a given form of human life. And if Marxism implies this, which I don’t think Marx at all consistently does, but I think he deleteriously does at points, then it’s failing the bar of historical materialism, of understanding what is contingent about the capitalist articulation of social antagonism and what is contingent about its managing of social antagonism through the class system.

It’s a problem of how, yes, we can organize a phase theory of history according to the kind of basic class relations, and, yes, we can particularly tell the progressive kind of development of capitalism according to this simplification, he calls it, of class relations, but this isn’t all of human history. And if we represent history in these bombastic ways that he does, as all of this, then we lose the underside or the underlap of history with capitalism. We lose the other part of the set of human antagonisms. And what I think is so amazing about Wuthering Heights is that it has this repertoire of vocabulary of images and tropes that let it think about antagonism as a kind of transhistorical problem for human beings. The basic problem of the hearth, where so much of its action is set, of architecture, of construction, of house holding, of familial shape, all of these are just inexhaustible dilemmas in that book.

And at the same time, there’s this just exuberant, hyper-stylized, incredibly beautiful, and uncanny kind of production of symmetry, of forms, of doubles, and the kind of problematic of formalization itself that just helps us to think about how you can have infinity of social contradictions, and the ability to inscribe and formulate the fact of that infinity of contradictions, such that your proposed political solutions don’t imagine or fantasize that you would ever be away or be done with contradiction.

Maxximlian Seijo: Thank you for that. I think that is a really cogent way of saying that. I wanted to dig in a little bit into some of what you mentioned about the spatialization in Wuthering Heights in an architectural sense. You also motivate this through a photographic analysis, as well, in the way photography as a forming medium does this too. In Wuthering Heights, as you said, we think about the construction of homes, rooms, window frames, this doubling that you mentioned, which these forms seem to shelter, maintain, and then also open social space in ways that even outstrip domination and antagonism at times. Can you give us a little bit more detail or taste of this specifically architectural analysis? And why, in the context of this ontological argument about antagonism, and this ontological argument, essentially, about historical materialism that outstrips these very specific immanent capitalist class antagonisms, why you see these architectural mediums and modes as so important for thinking that transhistorical problematic?

Anna Kornbluh: Yeah, so architecture is kind of a master trope throughout the book. There is, as you are getting this in an hour in a kind of a Frankenstein sense, a lot in the book, but architecture is one of the spines of it. And that is partly because it is a trope of construction, and I’m interested in constructive criticism. It’s a trope of building and I’m interested in putting things together. It is art that straddles the line between necessity and contingency. It’s Hegel’s first art for that reason. Human beings need shelter. But how are you gonna make it? What shape is it going to have? These are questions that are on that threshold of materially and necessarily essential, but also kind of open to variability, to different formations, and to the different processes of creativity. So, for me, architecture just holds so much of this problematic up, of how we need shape to live, and how we need shelter to live. Should you have a triangle roof or A-frame? How should you be living? 

And in Wuthering Heights, it’s just part of the absolute, extreme–I can’t even find adjectives for it–sublime force of that book. It keeps constantly trying to juxtapose highly textured, extremely attentive figurations of the made environment, of the built environment, of fence posts, window frames, lintels, doors, hearths, walls, and house structures overall. It just cannot stop lavishing attention onto those things. And that is a whole vocabulary of ideas and images. What is that doing in the same book with stuff about the arrival of the bourgeoisie, stuff about the insufficiency of the family form, and stuff about immoderate desires? So there’s all this stuff in the plot that is excessive and wild and unsolvable, and then there’s all this stuff in the form that is detailed, material, instantiated, and installed. And then, you can trace the contour of it and you can study it.

So this is how I think novels work. They kind of produce these weird combinations where you’re like, “Okay, so, what do those things have to do with each other?” That is the thought the novel is trying to have. So, what is Wuthering Heights doing with this incredible lavishness of form and this just incredible immoderacy and un-containability of passion and of antipathy and of fighting and of economic transformation and of the slave trade? It is trying to tell us that form is a technique for managing antagonism and a necessary one and a useful one and not a dispelling of antagonism, not one that means that you have to lose track of its extent or its scope.

Scott Ferguson: So one of the things I really appreciate that’s coming out here is, to kind of come back to the critique of anarcho-vitalism, what you’re showing throughout the book, but in this chapter that we’re talking about in particular, is that vitality is with form. It’s shot through form. You’re not arguing against vitality. You’re saying, it seems to me, that form is a question of vitality. It’s not the expunging of vitality.

Anna Kornbluh: Yeah, not the containing of it. That opposition that form constrains, form contains, that institutions police us…

Scott Ferguson: Which they do.

Anna Kornbluh: Which they do, but it’s not the limit of what they do, or containment is not the only thing we can say about what they offer us. That the whole value that emerges, the negative Rubin’s vase illusion of that, formlessness, lack of containment, and lack of constraint is what freedom is. As opposed to, freedom is the meaningful deployment of forms for human flourishing or capacitating our management of necessity so that we don’t denigrate necessity.

Scott Ferguson: So speaking of books that hold very different things together, on the opposite end, maybe, from Wuthering Heights, we have your chapter on Alice in Wonderland. Which you, very provocatively, in a super cool way, you’re trying to convince us that it’s a realist novel. Which, I’m not sure that anyone’s ever made that case before. But you’re not just being shocking for the sake of being shocking. You’re drawing something out about the abstractness of the realist novel that we tend to repress or not avow by calling Alice in Wonderland a realist novel. That’s my initial gloss, but maybe you can unpack what you’re doing here and why it’s so important?

Anna Kornbluh: Sure. Yeah, that’s totally the chapter where I’m talking nonsense, except that the point of the nonsense is to produce something by this dramatic inversion. And it’s less saying Alice in Wonderland is realist as a text, but that its own internal properties of form function as a kind of distillation or crystallization of realist form, that it is something like the symbolic logic, the reduction to the minima, of what realism tries to do. Because Alice is such an experimental investigation into what words are and who fixes the meaning of words. What is social order? And who puts it in place? What is sovereignty? And to whom does it belong? How do we undo it? And what do these things have to do with each other? Why is the question of beheading, and “off-with-their-head-ness,” and the sovereign decision on life, also a question of punning and of the containment of, or the proliferation of, semantic quality? So it’s a kind of prismatic intensification or hardening of the tendencies of experimental inquiry into how society should be that I think realism performs. So that’s the kind of force of it. And then, it’s also kind of playing with some of the historical events of its author having been a mathematician and a revolutionary advent of symbolic logic in relation to other kinds of mathematics in the 19th century. So what does it mean to think about distillation as a representative strategy? And what does it make possible even as it is boiling things down? It’s, yeah, a little bit bananas. But hopefully it’s a breather in the middle of the book, too.

Maxximilian Seijo: I just really appreciate how you boil down to something like Alice in Wonderland is asking ontological questions. By necessity, your political formalism then can kind of feed into that nonsense with a certain logical structure. I just really appreciated the way you took on that so paradoxically. Moving from that context, I wanted to talk about your final chapter, which reads states of psychoanalysis, formalization, and the space of the political. Within it, you plumb deep impulses within psychoanalysis, which in case listeners haven’t sort of picked up on yet, is another one of these combinatory substrate themes in this book. So you plumb these impulses to theorize what might be called the inescapable psycho-political problem of the polis. On your account, why is psychoanalysis such a meaningful tradition through which to confront this indelible, political problematic?

Anna Kornbluh: Sure. Psychoanalysis is like another one of the bolts in Frankenstein’s neck. So I think the first thing to say is psychoanalysis is a discourse of the objective. However much we would want to assimilate it to an egoistic, self help, personalizing kind of pathological formation–bourgeois, insidious, etc–it is an account of the structure of social relations. It is an account of language as the medium of social relations, of ungrounded non-theocratic reason, and of the problem of secular modernity as the structure of the kind of scaffold against which the human subject emerges, or the void that the human subject answers. So it’s an extremely descriptive kind of project in this course of trying to understand the contradictions of modernity that also attend capitalism. It has a kind of different register and a different idiom for investigating those contradictions. So in the biggest sense, it makes sense of social relations. And it puts the arbitrariness of social relations first and foremost, front and center. Why do human beings suffer? Why is there discontent in culture? Why is there discontent in civilization? Because there is not an immanence to it. Because there’s not a groundedness of it. Because we can’t make the words coincide with the things. So it has affinities with the formalist project I’m articulating, as well as affinities with what I think a historical materialist project is. So that’s why it’s so important.

But then, more specifically in that chapter, I’m working with some of the Lacan and Freud’s own thinking about institutions and their own thinking about the relational space of psychoanalysis. You can’t do psychoanalysis on yourself. It’s not self help. It is a dyadic relation that has to take place within very specific formal conditions, the conditions of the clinic, the couch, the two people, the variable session, and usually with the authorization of the institution that will enable the analyst to have been trained, and the patient to transmit what it is that they have done in their processes that they are working on. So there is a lot in the history of psychoanalysis of meditation on what an institution is and why you need it for this practice of health and human beings suffering less. So that makes it an intrinsically political theory. And then, of course, Freud wrote a whole number of political and theoretical texts, as did Lacan. So that’s why I look at psychoanalysis in a way. Then, there are also slightly more historical reasons. Like Freud was one of the great appraisers of the realist novel. He said that Eliot, Dickens, Trollope and Thackeray had invented psychoanalysis before he had. So there’s a kind of according and an esteem for the realist novel in psychoanalysis that is also really enabling for me.

William Saas: Thank you. To get us to the end of the interview, we want to step out of The Order of Forms, or get a little bit adjacent to it as you have in other articles. You’ve written about everything from the so-called method wars in literary studies to reflections on what you have named the climate realism of contemporary novelist, Kim Stanley Robinson, who was a recent guest on our show. So throughout these articles and publications, you place front and center the question of theory, or better, of theorizing as a social formation. And through this writing, it appears that for you, theorizing is not simply a specialized mode of academic labor within the Academy. But it is rather at once a critical and generative activity that takes place through fiction as much as through nonfiction. We like this commitment, and partly, because it links the labor of the humanities to constitutive world building, while pushing back against certain self-loathing impulses in the neoliberal Academy. See before: “how’s that working for you?” Is this a fair characterization of your work? Or are we way off base? If it is fair, could you say more about why it is that you prize this kind of unconventional, even promiscuous approach to theorizing?

Anna Kornbluh: Yeah, I think that’s very fair. And I appreciate it very much. I’m so glad that you guys could read that. I just think that creative, speculative, wild utopian inventiveness is a deep, deep faculty of the human. I really do, I am a humanist in that way. I think humans enjoy play and abstraction. I think it’s a staggering truth that human beings made abstract cave paintings before they knew how to make houses 70,000 years ago, before they knew how to bury bodies. Abstraction is a faculty of our creative power and our creative capacity to make things. So I love that I have labor conditions that afford me the security and the time and the venue to try to take my mind wild places. This is equipment for living. Our ideas clearly haven’t sufficed till now. We live in a society of mass immiseration with more and less brutal instantiations of it and spectacles of it, more or less viciousness, and mass inequity. And we are rapidly losing the ability to live. And that’s not a generic problem of human beings, that is a problem of our oligarchs, but it is going to be true and unevenly distributed that people won’t be alive. This is a fact that in 20 years billions of people will live on land that will be uninhabitable or hot or underwater or both. This is a recipe for mass death, a recipe for forced extinction, and a recipe for mass violence as well.

So shit is not working. People are miserable and the earth is burning up. So we need new ideas. And we need ideas that aren’t just messaging and telegraphing and DMing what’s already here. There’s a kind of real collapse of both the theoretical and the aesthetic imaginary right now into this just endless, sadistic documenting of how bad shit is. And that’s not really galvanizing as art, that’s immobilizing as art. So I would kind of just defend ontologically, politically, tactically, and libidinally what theory has to offer us, what big ideas, what speculation, what thinking abstractly, what defamiliarization, and getting outside the normal frames of reference have to offer us.

William Saas: I just wanted to acknowledge and show some appreciation for your own acknowledgement of the conditions of the labor that you’re doing. And I’ll maybe invite you to say a little bit more about theorizing and the space-time labor value that is required into this essential labor of theorizing our way out of this climate mess and out of all other associated messes. What do we need to do that?

Anna Kornbluh: Right, so we obviously need lots of collaborative time, I think, because none of the available idioms are working. And that includes that the engineers don’t know how to convey the crisis of value that we’re living in even if they know how to decarbonize. They don’t know how to motivate the political action. But the storytellers haven’t quite figured out how to galvanize a mass insistence on decarbonisation or on other ameliorative measures, because maybe they don’t have enough riveting facts or they don’t have a good enough sense of what the functional storytelling is. But we need a lot more collaborative, imaginative, and technically inventive work together across disciplines. I do think that’s true. And I think that individuals need time to spend reading, to spend marinating, and to spend producing collaborative knowledge in the space of the classroom. I don’t at all oppose research and teaching. I think that is just totally not what I mean when I say like we need time for thinking.

But people need time for teaching. And that means that they need small class sizes, they need workable loads, and they need the ability to have preparation that involves reading new things and changing their course syllabi all the time and like genuinely encountering and making ideas happen in the classroom. There’s this line in Rachel Buurma and Laura Heffernan’s book, The Teaching Archive, about how like in the humanities you deal with students saying like, “I couldn’t make it to class, what did I miss?” And they say, “You missed everything and you missed it forever.” Because we make the knowledge happen in that haptic, collaborative, and dynamic moment of mutual determination of meaning. That is what you missed. So I think we need time for research driven teaching and research generative teaching. And what we also know is that it is just emphatically and empirically good for students, about small class sizes, about a lot of individual attention, about a lot of dynamic kind of evolution of what’s on the syllabus, and a lot of in-person collective work.

The other thing I might say about that, because I really, really care about this, is we need people who think about our conditions of labor and who are willing to do the work to make the place where we work, work. Service in the institution, being the associate head of my department of a hundred people, working in my academic union, these are things that have taught me so, so much about big ideas, about communication, about pattern, about organizing, about power and politics. It is a formal problem, how should you organize a class, make a budget, or at what level should departments cooperate, and so on. And I wrote two books in the last five years while I was doing really heavy administrative work, and I think that every faculty member must do it, and also must do it in their union. Because self governance has to mean something and because making our institutions functional and habitable is also content.

William Saas: Just wondering, returning to the self-loathing academic and the neoliberal Academy, part of that being potentially linked to perpetuation, and throwing one’s hands up at the structure as it is and saying, “I can’t do anything about it. I can’t create that space that I know is necessary in the classroom. Let’s just burn it all down.” Right?

Anna Kornbluh: No, I think that’s absolutely pervasive. And some of it is a response to feeling themselves burnt out. Burnout is a generational and cultural structure of feeling and so on for lots and lots of reasons. We, again, have a society that is immiserating people on a mass scale. The amount of overwork that is extracted from people no matter what their level of compensation is, or the level of job security is, is just intolerable. And I think it’s really, really vivid in the pandemic that academics are like essential workers in how much they’ve been asked to over function, how much they’ve been asked to overproduce. Many people, not all, were insulated from the dangers that say healthcare workers or grocery store workers had in the last 20 months, but not from the extremizing intensification of the demands on our work, and certainly not from the emotional toll of what it has taken to try to be there for students and invent new modalities and respond to our employers contempt for our survival and so on. So you can understand what the burnout is, you can understand what the dissolution is, but your fellow people have some power to join with you and transform a lot of those conditions.

A lot of these power structures are actually open and available. It’s not that hard to be a department head, it really isn’t. And people can do that work together. And that’s what faculty governance, another beautiful promise of it, is. It is really, really, really rewarding to make a faculty union. And it is really rewarding to do that in relationship to student unions and in relationship to graduate employees unions and in relationship to staff and janitorial unions and in relationship to your public school teachers union. And to think about 4 million people work in higher education. That’s more than in the airline industry, or the restaurant industry, these giant sectors that got COVID bailouts, that we did not in the same way or that we didn’t have value for. We serve 20 million people nationwide. Like our work is incredibly valuable. There’s a lot of power in that value that we can collectively seize up together. I know everybody’s tired and everything is terrible. But I really think that affirming the good stuff that we have and the agency that we have is the only way out.

Scott Ferguson: Anna Kornbluh, this was an incredible conversation. Thank you so much for coming on the show.

Anna Kornbluh: Oh my god, I’m so honored that you guys read my work and I’m such an admirer of the efforts you guys are making to just think differently.

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

Chekhov’s Coin with Rohan Grey (New Transcript!)

In this special episode, Rohan Grey joins Billy Saas to discuss the latest episode in the #MinttheCoin saga. Rohan Grey is Assistant Professor of Law in the College of Law at Willamette University.

Read his article on the trillion-dollar coin in the Kentucky Law Journal titled “Administering Money: Coinage, Debt Crises, and the Future of Fiscal Policy” here:

John Stewart on the trillion-dollar coin in 2013:

James Buchanan and Paul Samuelson in John Maynard Keynes: Life, Ideas, Legacy documentary: 

Visit our Patreon page here:

Music by Nahneen Kula:


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

William Saas: Rohan Grey, thank you for joining me for this special episode of Money on the Left.

Rohan Grey: Thanks for having me.

William Saas: So, first question: #MinttheCoin, have many people been saying this?

Rohan Grey: Yeah, a lot of people have been saying it, and louder and louder. The reality of it is this is not even the first time, not even the second time, but probably more like the third or fourth time that this issue has come back around. It’s really run the gamut from tragedy to farce, to impatience, and I think now to maybe inevitability at some point. The underlying problem just continues to get more ridiculous. And in doing so, I think a lot of people who thought of the idea of using a kind of crazy accounting gimmick or something that would look silly in the eyes of the public, or the rest of the world, the risks associated with that have gone down relative to the risks of just continuing with this absolutely ridiculous charade indefinitely. We are a decade into these kinds of debt ceiling games and there’s no ending in sight. And the Biden administration’s approach seems to be pretty much exactly the same as the Obama administration’s approach was a decade ago. So if this is the best that we’ve come up with after ten years, then why not start being more creative?

William Saas: Yeah, can you give us your sort of elevator pitch for #MinttheCoin?

Rohan Grey: Yeah, so the idea is that we continue to run up against a legislative and operational log jam, where Congress tells the executive, the Treasury secretary, to spend a certain amount in accordance with the congressional budget directives, to tax a certain amount, and then to make up the difference with some sort of financing. Typically, the way that would happen is the Treasury secretary would spend a certain amount, and then, to make sure that there’s enough funds in its account at the Fed that it spends all the money out from, it will sell Treasury securities, Treasury bonds, Treasury bills, Treasury notes, or what we collectively call the national debt. Then, the funds that come into its account when it sells those to private dealers become the funds that then go to people for Social Security checks or government employee checks. But in an instant where the debt ceiling limit prevents issuing more Treasury securities, the risk is that the general account will run out of funds. And if it does so, there is another law on the books prohibiting the Federal Reserve from allowing the Treasury to run an overdraft on that account. So, effectively, the Treasury secretary is in this sort of awkward position where they have to keep spending because Congress has told them to spend, their job is to execute Congress’s directives, but they also can’t change the accounting and spending operations in a way necessary to ensure that happens.

Interestingly enough, there’s a part of the Coinage Act that was passed in 1996 as part of a commemorative coin bill that gives the Treasury secretary clear, plain language, no caveats, no asterisks, the power to mint and issue platinum proof coins–proof, here, meaning highly polished coins–of whatever denomination they wish, of whatever amount that they wish. So a lawyer named Carlos Mucha, when he was going under the internet moniker “Beowulf” on a MMT blog picked up on this idea from earlier writers, like Ellen Brown, and there was also a politician who kind of proposed it in the 1990s named Bo Gritz, to use this statutory authority to mint a series of very high value coins, trillion dollar coins, or multi-trillion dollar coins, have the mint deposit them at the Fed, the Fed then credits the Treasury for the face value of those coins, because once they’re accepted they’re legal tender, and then those funds would be available to ensure that the checks go out and the spending happens just like selling treasury bonds. And the important note there is that coinage, including all the coins that we use today, including the coins that we’ve minted and issued for hundreds of years, are not subject to the debt ceiling. So this would be using a parallel source of financing that is legal on the books to make sure that we honor our spending commitments without some catastrophic default or government shutdown.

William Saas: Do you think parallel is the best kind of metaphor or explanation for it? Or what do you think of things like end run, circumvention, or roundabout? I don’t know, what do you think?

Rohan Grey: Yeah, I think using the trillion dollar coin to avoid a debt crisis–a debt ceiling crisis, I should say, because it’s not a debt crisis. It’s the ceiling itself, which by the way, virtually no other country has in the world, and certainly not in the way that the United States has it. And if you look at the debt ceiling history, it was actually originally designed to give more flexibility to the Treasury. So up until the early 20th century, whenever Congress wanted to spend on, you know, new bridges, a war, the postal service, or whatever else, it would direct the spending to happen, and say, “Hey, executive branch, spend X amount,” and it would have specific authority. It would say we authorize you to issue a certain amount of bonds, or collect taxes or customs, or mint coins, or whatever it is. And each spending directive would have a specific financing authority. But then World War I comes around, and it becomes very difficult to manage all of the different spending commitments in a very large scale way with basically a thousand different spending authorities. So Congress says, “We’re gonna make it easier for you at the Treasury, we’re gonna roll all that up into one big spending authority.” It’s sort of like having 20 different credit cards, or 20 different bank accounts, and then rolling them all up into one. Then, you can move around the funds. And if you’ve got excess from one spending commitment to another, you can move it all around without having to come back to us each time.

So the original debt ceiling was actually designed to make it easier for the executive branch to discretionarily adjust its financing operations as needed. In that sense, the debt ceiling was always not intended to become this political football, but once it was created, like so many other things, its purpose got twisted. But the coin, I think, is definitely a workaround to the twisting of the debt ceiling. I would perhaps argue it’s more faithful to the spirit of the original debt ceiling and the longer term trajectory of the Treasury, which is to get more and more discretion on how to finance spending. One of the things I argue in this paper I wrote that we’re going to talk about later is that, even as Congress was giving the executive branch greater discretion in its financing, it was exercising strict control over how much was spent and on what. So it’s not a matter of letting the president, or the Treasury secretary, go crazy and do whatever they want. It is more about how, when we tell you to spend a certain amount and tax a certain amount, you have to do that. But in terms of how you do that, we’re going to leave that to you because the world is complicated, the administrative state is complicated, and we’re not going to micromanage the day to day financing activities. So as long as you spend what we tell you to spend, we’re going to give you latitude in working out how to do that the best way. In that sense, the coin is a workaround to the perversion of the debt ceiling.

But to the broader point, the mint’s authority to create coins and to generate financing capacity through the power of seigniorage is a parallel power to the issuance of Treasury bonds and the reliance on the Federal Reserve and the bond market to be a part of that process. The mint is the oldest monetary institution of the United States government. It was created years after the country was created. The Federal Reserve only was established in the early 20th century. So the mint has always been there. And nowadays, when people say, the government can create money, they usually think that it has been basically exclusively delegated to the Federal Reserve. So the Treasury is sort of reduced to, like you and I, someone that has to ask permission to access this power that the Federal Reserve has, or can only indirectly access it through the Fed, and that the Fed’s job is to protect the boundary very closely and guard this power from abuse by elected officials. This is the idea of central bank independence.

My argument is, whatever may be true or not about central banks, it’s never affected the mint. The mint has been part of the Treasury for a very long time. And that power to issue coins has never been taken away from the Treasury. It has never left the Treasury. It’s never been something that the Federal Reserve has taken over. So this is not so much the power grab away from the Fed, as it is a resurrecting a somewhat dormant power and using it for creative purposes in a moment of crisis. Of course, the mint has been issuing coins the whole time, and has been returning hundreds of millions of dollars in seigniorage to the Treasury into the same account that the funds from selling the bonds go into. But we’re talking about going from hundreds of millions of dollars to trillions of dollars, and that is obviously an order of magnitude difference. But it’s a quantitative difference. It’s not a fundamentally different kind of operation or a different kind of power. So in that sense, I would say, yes, that the coinage power and the central banking power have existed in parallel for a long time.

William Saas: Right, so the trillion dollar coin resurrects this authority, or reanimates it, in interesting ways. To carry through that metaphor, it seemed like in February of 2021, Mike Lee wanted to kill it dead again by striking that obscure 1996 provision that granted the mint authority to create coins in any denomination. I’d like to get an update from you on the status of Mike Lee’s attempt to do away with that provision.

Rohan Grey: I haven’t heard any progress on it. There was a Republican congressman, seven or eight years ago, that did something similar, and that went nowhere as well. In part, this is posturing for them. It’s part of their kind of fiscal conservatism. It’s the same kind of reason that half of these Republicans put out gold standard bills every now and again. They don’t actually want that to happen, but it’s good posturing. I think they’d be fine if the coin statute was eliminated, but the point of that was really to give them a platform and to express outrage that this could even be considered. I think this goes to the sort of larger underlying ideological difference of trying to pretend that there is no such thing as public money, there’s only taxpayer’s money, and that you can only either tax or borrow. Those are the only two ways to get spending capacity. You have to be clear about how you will rob Peter if you’re going to pay Paul, and all of this austerity, scarce-money framework that their entire political ideology is based on. Even if we don’t use the coin today, even if we don’t ever use the coin, the existence of the coin, the fact that it’s there on the table, the fact that it gets talked about, is of great discomfort to them, because it keeps open the space for different kinds of politics, different kinds of discourse, where we don’t have to be thinking in purely zero-sum terms, and that things like the debt ceiling are not actually a limit on borrowing from our grandkids and government spending run amok as they like to pretend.

They are, in fact, as I mentioned earlier, just an operational part of a financing process that could be done a whole range of different ways. And whatever craziness the idea of minting a coin worth a lot of money might have sounded a decade ago, we’re deep into the world of crypto and digital currencies nowadays. Everybody is creating their own coins and these kinds of things. I think the larger imaginative and metaphorical threat that the coin presents is part of what needs to be attacked by these people’s perspective, because we’re right in the middle of a discussion about creating a government digital currency, a US digital dollar. So should this digital dollar look more like a bank account or should it look more like a coin? A coin is anonymous. It’s even more anonymous than a paper currency which has a barcode on it. They tracked the Lindbergh baby through the barcodes of the money, right? You can’t do that with coins. It was historically seen as something that you put in your pocket and you can carry it wherever you want. So the metaphor of a coin, of a public coin, the idea that the mint might have more to teach us in this moment of digitizing currency than complicated central banking operations, I think, is deeply threatening beyond just the immediacy of the debt crisis itself.

William Saas: We’ve referenced it before, and we’ve talked to you twice in previous podcasts, but I don’t think we’ve had an opportunity to talk to you since the publication of your Kentucky Law Journal article, which is called “Administering Money: Coinage, Debt Crises, and the Future of Fiscal Policy.” So I wanted to discuss that just a bit. Getting into the notion of the trilemma, as you outline it here, as others have outlined it, and how you position and frame your argument in this Kentucky Law Journal article as a supplement to that, can you walk us through the idea of what a trilemma is, or the trilemma is, when it comes to a president’s available options when faced with something like what President Biden is faced with today?

Rohan Grey: Yeah, sure. First of all, big shout out to Carlos Mucha, who was the guy who coined the idea so to speak, and to people like Joe Firestone who have been really pushing this for a long time. A lot of this paper is collecting and organizing existing arguments, and then adding my own around the edges and trying to put a spin on the whole thing. But a lot of the paper is really in dialogue with another paper by a law professor, Michael Dorf, and an economist, Neil Buchanan, called “How to Choose the Least Unconstitutional Option.” It was a Columbia Law Review article from about 2012, and it was one of the ones that was discussed in the White House when they were dealing with these crises. Their argument is that, when Congress directs the executive branch–the president and the Treasury secretary, specifically–to spend a certain amount, to tax a certain amount, and then not to borrow more than a certain amount, that that can create, essentially, a paradox. That is, you have to spend 100, you can only tax 50, so there’s 50 left, but you can only borrow 30. So what do you do with the rest? This is an ongoing process. What do you do every month for the 20 that’s not being accounted for? Or, eventually, you can borrow no more, and so, what do you do for everything after that?

Their argument is that, in a moment like this, something has to give. And of those three different options–spending, taxing, and borrowing–their argument is that the spending and taxing powers are core congressional powers. They are the core of the power of the purse. This goes back to your political science 101 classes with the power of the purse and the power of the sword. And that the debt ceiling is, relatively speaking, a kind of administrative, procedural, technical, and operational thing that has evolved over the years, has been basically dead letter for a number of years, because nowadays the way that we actually lift the debt ceiling periodically, which we used to do as a pro forma issue, is to suspend it, and then retroactively raise it when we increase it again. It’s sort of like saying, you have a credit card that has no limit. But next month, we’re going to retroactively impose a limit that’s exactly the amount that you happened to spend last month. And then, we’re going to do that for 30 minutes, and then we’re going to suspend that for another month. And then, next month, we’re going to impose it again for 30 minutes, and it’s going to be exactly what it was this last month, and then we’re going to suspend it again. It just makes a mockery of the whole thing. It allows politicians to grandstand every few years, but it’s not actually designed to put a limit on anything on a daily basis.

So their argument is, when you’ve got these three options, and you have to violate one of them as the president. Because the alternative would be to ignore the will of Congress, to ignore your clear legal obligations, to execute the laws unfaithfully under Article II of the Constitution, and that would provoke a separation of powers crisis and would be the president engaging in a unilateral kind of power grab and doing whatever they want. So if you have these three choices, you should choose the least unconstitutional, which is to violate the debt ceiling. Keep the spending, keep the taxing, just blow through the debt ceiling, and keep issuing treasury bonds tomorrow like you were yesterday. I agree with that argument on its face. That is to say, I think if you have to blow through one of the three, then the debt ceiling is the obvious one to blow through. There is a very good argument that taxing and spending is a higher sort of constitutional power to be separated and that the debt ceiling is already kind of a joke at best, operationally speaking.

But my argument is that we have to be careful that we’ve exhausted all the alternative legal options first. And if the coin is, in fact, the legal option, then that allows us to avoid this paradox whatsoever. It allows us to avoid the idea that we have to violate the constitution in some way, or that all we need to try to do is choose the least bad. In fact, we could do something that is legal. Buchanan and Dorf engage to quite a degree with the coin. They say they think it isn’t legal, it would probably count under the debt ceiling, and that even if it was legal, it would cause the population to question the value of the currency, and in doing so, could basically promote a catastrophic economic outcome. So the president should consider that and say, “What’s the cost of a catastrophic outcome versus just a little bit of unconstitutional behavior?” Relative to that, we should do the low grade unconstitutional thing rather than the technically legal but functionally catastrophic thing. I spent a fair bit of the paper pushing back against that and unpacking some of the assumptions in that claim. Is it true that minting a coin would cause the markets to kind of freak out? Is it true that it would cause runaway inflation? Is it true that it would actually have these effects? Or is that just a bunch of speculation by people who have a very strong commitment to a very liberal and scarce theory of money? And that what they’re actually saying is, we should be discounting any action that could reveal to the public how money really works?

We all know that money works like this. Look at the central bank of Japan. It’s been buying up stocks and government bonds hand over fist. You look at the Federal Reserve with quantitative easing and things. We’ve been “printing money,” we’ve been monetizing government debt and the world hasn’t collapsed. But the public maybe hasn’t fully grasped it all and fully caught on. So should we be avoiding any legal action that might tell the truth here in the name of the noble lie, that the public can’t handle the truth? My argument, and I think this is the strongest argument, the most unique contribution that I try to give in this paper, is that this is really dangerous. This is really dangerous to democratic governance and to an informed electorate. Because now you’re having a situation where the executive branch is openly and explicitly violating the Constitution, and violating their directives to do what Congress tells them, on the basis that they’ve got no other option. And this is in knowing full well they have another option, but believe that they are not required to entertain that option seriously because the public can’t handle it. To me, that is in the same category as the secret Pfizer courts that have warrantless surveillance, that nobody can hear because it all needs to be redacted. Chief Justice Roberts gets to sign this thing, nobody else gets to read it, and it’s in the name of democracy. But it’s in the name of democracy that we couldn’t possibly let you see.

It’s in this realm of “there are weapons of mass destruction.” Trust us. We can’t show you the materials, but we just have to do it because the alternative would be so catastrophic. Just trust us. I think it’s a very dangerous precedent when there are monetary theories that the public supposedly can and cannot handle–not economic theories. Remember, we’re not saying that this would be inflationary. We’re saying that the public would think it’s inflationary, therefore, we should be afraid of doing it. Because rather than educate them, rather than work through the truth, we should indulge their delusion and reinforce their delusion. And that is sound governance, even if it allows us to violate the constitution whenever we want to and use this as an excuse. My argument is that is the moment where we have to be really careful and where we need to be saying that the executive branch actually doesn’t have this discretion. They are not empowered to choose whether or not to tell the truth to the public, and if they decide they don’t want to, to then go and violate the constitution.

The thing that the coin is actually protecting us from is an imperial presidency that can basically threaten a government shutdown rather than admit that this is all a stupid game and that they’ve always got an escape clause. And the Democrats, I think, to their credit, they don’t want the government shutdown. They want the Republicans to cave. They want the Republicans to break, to cry uncle, and to stop playing these stupid games. But again, how many years in now are we to watching the Republicans play nihilistic, willing to blow everything up games? And how reasonable is it to hope that they’re going to come to the table and be a working partner in governance? It’s that kind of “fool me once, shame on you; fool me twice, shame on me” thing, but now we’re at like fool me 55 times. And Biden’s big solution is to say, like, “Come on, man. This is unreasonable. We want you to be adults.” You’re talking to Mitch McConnell, who’s saying to your face things like, “I want you to implode and fail as a president.” And if that means blowing up half the American economy along the way, so be it. This isn’t sound governance, this isn’t adult strategy, and this isn’t some genius, 11th dimensional political chess by the Democrats. This is just them wanting to play the only playbook they know how to play even if it means marching us into catastrophe.

William Saas: And it’s pervasive and entrenched. When I got to this point in “Administering Money,” where Buchanan’s talking about how maybe it’s better to preserve the myth than to let it out, that the government does have this money creating authority, there’s that documentary with Paul Samuelson that we’re all aware of on John Maynard Keynes, where we have Paul Samuelson, author of the most circulated or widely used economics textbook, talking about the need to preserve the myth of the balanced budget in order to reinforce discipline with the fisc. But immediately before that clip, James Buchanan is talking–was this James Buchanan, or is this the other Buchanan? Anyhow, I think this is a really good point of transition. You’ve sort of summarized this already, but you put it very nicely in the article. You say, “Taking the trillion dollar coin proposal seriously–if not necessarily literally–allows for consideration of the deeper constitutional implications of replacing the ‘trilemma’ with a four-dimensional conceptual framework that includes money creation alongside spending, taxing and borrowing.” Alongside that quote, and your narration of the “Lucy with the football” history of the Democrats and Republicans in recent decades, I want to play a clip for you from Pod Save America, January 2017, an episode rather ominously titled, “Obama’s Last Interview,” which, as far as I know, is not correct. But by this they mean his last interview as president on his way out of the White House.

Pod Save America: When were you most scared in the White House? What was the scariest moment?

Barack Obama: Well, I think it was that moment when John Boehner didn’t seem to be able to generate the votes to make sure that the US didn’t default. We had to start drafting the speech. And we were having these conversations with Jack Lew and others about what options, in fact, were available. Because it had never happened before. And there were all kinds of wacky ideas about how potentially you could have this massive coin. I mean, it was like something primitive, like out of the stone age or something, and I pictured rolling in some coin. For those who are listening, it gets pretty technical but there was this theory that I had the authority through the mint to just issue this massive, trillion dollar commemorative coin. And then, on that basis, we could try to pay off US Treasuries. And it was a very realistic possibility that we couldn’t get the votes for that and we couldn’t get those debts rolled over. And we would be in a situation where, technically, we’re in default. And at that point, you were in uncharted territory. What was also true was that, in addition to talking to Jack Lew, treasury secretary, and my speech writers about a speech, there were also questions about whether any actions that I took might be violations of the law. So we had to be talking to lawyers about potential challenges and legal actions and lawsuits from bondholders around the world.

Pod Save America: Not fun.

Barack Obama: It wasn’t my favorite night, yeah.

Pod Save America: What was your favorite night?

William Saas: Okay, so a lot to talk about there. Do you have any initial impressions or things that you’d like to reflect on from that clip?

Rohan Grey: I mean, yeah, there are two things. One is, and Obama did a great job of this during his entire presidency, and of course, he’s talking to his kind of people in this interview, but just the idea that anything that’s outside of his worldview is crazy and that anything within his worldview is eminently sensible. Talking to lawyers about what happens if we default and then we get sued by millions of bondholders, that’s serious. Minting a coin, that is wacky. Boehner not having the votes is a grave, serious problem. Him not playing hardball with the powers that he actually has, that’s wacky. That kind of rationality being the limits of his own worldview is something that is just an enduring theme of the Obama administration to me, and I think it really manifests here. The other thing that’s interesting here is just this idea of Jack Lew telling me what we could do, the lawyer is telling me what we could do, I’m always constrained, and I don’t have any power. But the reality, of course, is that, whether or not we pursue these things and try, is his choice. I think that kind of powerlessness is an enduring theme of his presidency.

Well, what do you expect me to do? I’ve tried nothing, and I’m already out of ideas. It’s that kind of mentality of the reason nothing ever gets done when I’m in charge is because everybody else is stymying me rather than because I am not taking responsibility for actions. It’s just very interesting when we’re talking about something that he has a constitutional requirement, a mandate, to do. He signed on, he put his hand on that Bible, and whatever. But when the time comes, when the rubber hits the road, it’s someone else’s problem. The limits are someone else’s, and all he can do is turn and face different parts of the prison that he’s caged in, while, of course, laughing at anybody trying to help him out of it, while, of course, having nothing but smug derision for any possible option that could have gotten him out of that. And I think it’s notable that he calls this the scariest moment in his presidency. The global financial crash, that’s not that scary. Presiding over the decline into warrantless surveillance and drone striking, that’s not that scary. The failure of the Paris Agreements, or whatever, that’s not that scary. It’s just very interesting that of all the things that really reached the limit of his ability to keep a cool head, it was the bloody debt ceiling.

William Saas: It’s stark, too, when you consider the other ways that executive power expanded and continued to expand throughout his presidency. There’s this disavowal of executive authority when it comes to domestic financial and fiscal problems, and then just unstoppable expansion when it comes to military adventures abroad.

Rohan Grey: Yeah, you accidentally drone strike an American child. Oh, well, whoopsie, mistakes happen. But God forbid that we do something that doesn’t sound very serious when it comes to preventing a catastrophe. And he’s talking about Boehner there, and of course, Boehner blissfully peaced out of the political scene when Trump came on the scene. And McConnell’s still around and was a big part of the story then. But I think it’s important that, at that point, the Republicans did blink. When the Democrats played hardball, their gamble paid off. They put a gun to the head of the American economy and said, “We’ll pull the trigger. We’ll do it if you don’t tell us to step down.” The Republicans said, “Fine, step down. The polling is hurting us.” This time around, I don’t think McConnell will do that. But I think the other thing that’s important is that, since then, we’ve made some strides now that this is on the table in crisis preparation. And at that point, there were these debates about, well, how are we going to prioritize different kinds of payments? Can we actually ensure that people who hold government debt will continue to get paid even if we have to sequester the government, employees, Social Security payments, and things.

Well, make sure the finance guys get paid even if everything else gets cut. That was a very hard operational challenge at that point. I don’t think it’s as hard now. And I think that certainly McConnell does not want the bondholders to not get paid. But I think he would be fine if this time around a government shutdown completely stopped Social Security checks, government employee paychecks, and things. If they could show that next time there’s a debt ceiling crisis, or next time there’s one of these crises, the only people that will actually potentially suffer, are the welfare state, the kinds of things that they love nothing more than starving, that will be a big win for them. Because in that moment, putting a log into the spokes of the wheel of the budget machine is just one more tool to starve the beast that they’ve been trying to starve forever. So I think that’s something to be very weary about. In transposing the fight that happened in 2011 and 2013 to the present is the stakes are higher, that the republicans are willing to draw more blood, and the people that are likely to be most harmed, if we do go across that Rubicon moment, will not be the international bondholders first, it will most likely to be the people who receive benefits from the government or employee salaries.

William Saas: Yeah, another one of the differences between 2011 and 2013 is we didn’t find out that the trillion dollar coin proposal was considered by the President, by the executive branch, and the President specifically, until after the fact until everything was resolved. Whereas, last week, we had Michael Gwin, a White House spokesman, telling Politico that, “There is only one viable option to deal with the debt limit: Congress needs to increase or suspend it as it has done approximately 80 times, including three times during the last administration.” So upfront, he is saying it’s on the table but it’s not on the table.

Rohan Grey: Yeah, we’re taking it off the table. It could have been on the table, but for us. I think you’re even noticing that in the journalist treatment, as well. The first time around, people like Joe Weisenthal, who were really at the forefront of this, they were kind of out there on a limb talking about this, but with eight or ten years of just watching how insane everything else has gone, watching the kind of sea change in macroeconomics, and watching not only the response to 2008 but the response to COVID with the New York Times printing articles saying, “Printing money’s on the table again,” and this kind of stuff, it urns out, when we need it, there is “infinity dollars,” as Neel Kashkari at the Fed says. It makes it harder to sustain that underlying scarce money myth. And the coin suddenly becomes, while still in the realm of wacky fantasy, a little bit closer to reality than it was the first time around and people have been somewhat desensitized to it and that kind of thing. Nowadays, Politico and others are reporting on this, as well as Bloomberg. And the reporting says the White House is choosing not to consider the coin. That’s the framing this time. And I don’t think that was the framing last time. The framing was, is this even something they can consider?

William Saas: Jon Stewart’s coming back too late.

Rohan Grey: That’s right. He’s not here to bring his brand of common sense. I don’t have much love for Paul Krugman, but there was just an absolutely insane moment where Jon Stewart ends up having this multi day spat with Paul Krugman about the coin, and Krugmn said, “Yeah, it’s economically fine. We should do this. The Republicans are playing hardball.” It’s one of those rare moments where I agree with Paul Krugman’s political strategy. And Jon Stewart is just playing the comedian, right? “Well, I’m just a dumb clown, what do I know?” But this seems silly to me. You’re not being a dumb clown in that moment. You’re trying to shut down ideas by appeals to common sense, but not informed common sense, rather this gut instinct, populist kind of what you think sounds like common sense. “You’re telling me that injecting a bit of a virus in you is supposed to make you less likely to catch a virus? That sounds crazy!” And it’s like, that’s just what a vaccine is.

There’s an appeal to common sense that was a lot more bipartisan a decade ago than it is today. “I’m a social liberal, but a fiscal conservative” was a smart sounding thing to say in 2010. And nowadays, it’s a cruel joke. Yeah, Jon Stewart’s rally to restore sanity looks hilarious at this point when you know that Trump’s five or six years are coming down the pipeline. “I disagree with you, but I don’t think you are Hitler.” Well, turns out that some of them are literally white nationalists with pitchforks and ramming cars into people. So do you still think they’re not Hitler? Do you still want to have a reasonable debate there while you’re simultaneously calling Paul Krugman an idiot on economics? And again, I’m in a very weird position to be defending Paul Krugman on economics, but relative to Jon Stewart’s pop-libertarian, you know, “Ron Paul has some good ideas,” kind of bullshit, he is certainly more of an adult there.

William Saas: Yeah, well, he’s coming back just in time, it seems like, for relevancy.

Rohan Grey: I think one other point on this is just that Biden was in the room for all of this as well. He was the VP for this. And while people might have thought about the coin being stupid, saying, “Well, this is stupid, we should just get rid of the debt ceiling,” of course, we should get rid of the fucking debt ceiling. But when has that been on the table? When has any democrat been interested in fighting that fight? We’re eight to ten years after these crises moments and the first round of debt ceiling debates and the democrats have not upgraded their strategy. They haven’t done anything. This is rolling exactly the same way as it did last time. And if that’s their solution, to shut down anything that would actually fix the problem, but offer nothing for a whole decade. Their solution is just to say, “No, this time around, just like last time, we’re just going to expect eventually to find that last 1% of humanity in Mitch McConnell, or those last vapors of a commitment to institutional norms, and that that will save us.” It’s like, whatever you thought about institutional and social norms in 2010, if you still think that we’re in the same place in 2021, you’ve been asleep, you’re completely delusional. A lot of people who might have been willing to give the genius President Obama, the Harvard law professor, the benefit of the doubt, that he’s playing some 11th dimensional chess that they can’t possibly understand, I think people are less willing to believe that average Joe has got some genius plan in there, especially when everything looks exactly the same as last time.

William Saas: McConnell will fold or a trillion dollar coin–one of these is whimsical.

Rohan Grey: That’s right. One of these is the kind of thing you should be laughing about on a podcast about politics and the other is a proposal to mint the coin.

William Saas: I do want to pause for just a moment on the question of common sense and what common sense was 10 years ago versus common sense today. Because common sense to Jon Stewart in 2011 or 2012, I don’t know that it’s going to look that much different in terms of understanding the fiscal situation. I’d be interested in your perspective on this, especially, because the reception of the coin, like you say, the idea, is a little bit more staid this time around. Whereas before, it was like, “Isn’t this interesting?” And, “That seems like a meme, right? Let’s talk about it and laugh.” Although, at the same time, it’s very serious, and there’s a spectacular quality to it. Whereas now, having, as you said, appeared, reappeared, and disappeared so many times over the past several years, I feel like the reception is not as strong today. And I think that this question of reception of the idea is maybe central to the whole project of things like Modern Monetary Theory. Is it chipping away over time until it becomes so banal that it just gets taken up without reflection? Or is it something else?

Rohan Grey: Yeah, I mean, I don’t have any faith that it’s going to be adopted this time around. When I say I think it’s closer, I don’t think it’s closer to being enacted. But I think that it’s less shocking to people that have been so shocked. People sort of say, “Oh, if you take a lot of MDMA, then your serotonin receptors have been blown out. There’s nothing left for them to fill up with.” Well, we’ve kind of just been shocked about the spectacle. There’s just nothing left now to raise us to eleven after seeing just a complete shit show over the last few years and seeing the climate crisis and everything else. But I think the difference is that, this time around, the focus is less on the coin and more on the decision of why not to use the coin. And it’s not that that’ll necessarily be enough pressure to cause Biden to change. But I think it feeds now into this larger narrative of when are we finally going to play hardball to save the planet, save ourselves, and to fight back against this kind of Republican and reactionary nihilism. And when Biden got into power, I don’t know if everybody voted for him for this reason, but a big part of his shtick was I can work with people across the aisle and nothing is going to fundamentally change, right? I’m a bridge builder, let’s get America back to being harmonious, and let’s heal our divisions. I think this is just making a mockery of that. This is showing that, once again, this wasn’t an adult, serious political vision. This was just some naive bullshit that was going to give the Republicans power to continue to set the agenda and continue to threaten to blow things up.

And if it’s not the debt ceiling, if it’s not minting the coin, it’s going to be something else. And if it’s not Biden, it will be someone else, if there even are other elections in the future, before Trump 2.0 stops them from happening or whatever. I think if we’re gonna get out of this descending spiral, something radical needs to change in how we are willing to use power, to take power, and to fight strength with strength. I think the coin is going to continue to stand here as an example. If rustling the feathers of nervous nellies, as Neil Buchanan says, is a bridge too far, then everything else is a bridge too far too, right? Then, Greta Thunberg is a bridge too far. Then, canceling student debt is a bridge too far. Then, reparations is a bridge too far. And if it’s not the coin, then when are we going to finally start saying, “No, those are the kinds of politics we have to be willing to play or we’re just going to keep losing, we’re just going to keep ceding ground, and eventually, we won’t be able to cede ground again.” Yeah, eventually, the next group that they come for, the next issue they come for, you’ll look around for allies and there won’t be enough left. So I think that’s the big thing for me. Yes, it’s not that eventually it’s gonna become so banal that we can slip it in without people noticing or something. It’s that eventually these contradictions are going to get so unavoidable that something will have to give. And the coin will continue to be here as proof that this issue, like so many others, is not as intractable as it seems.

William Saas: I think that’s a great place to leave it. Rohan Greywrong, thank you again for joining us again on Money on the Left.
Rohan Grey: Thanks for having me. It’s great to see you. Take it easy.

The Philosophy of Money with Graham Hubbs

Graham Hubbs speaks with Scott Ferguson and Andrés Bernal about the relationship between Modern Monetary Theory and philosophy. Associate Professor & Chair of the Department of Politics & Philosophy at the University of Idaho, Hubbs convened a conference panel on Modern Monetary Theory at the annual meeting of the American Philosophical Association in January 2021. He invited Editorial Collective members Bernal and Ferguson to join him on the panel, where they shared and discussed his original paper, titled “The Promises & Challenges of Modern Monetary Theory.” In this episode, we present the full audio of Professor Hubbs’ presentation, as well as Scott Ferguson’s response and reflections. A very engaged question and answer period follows, rounding out this special episode. 

Thank you to the American Philosophical Association for sharing this audio with us, and to the Philosophy, Politics, & Economics Society for creating space for this important panel at the meeting.

Theme music is “Swirl Song” by Nahneen Kula:

Link to our Patreon:

Link to our GoFundMe: 


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

Andrés Bernal: I’m an adjunct professor at CUNY, Queens College in the Department of Urban Studies, and a PhD student at the New School in Public Policy. I have been a policy and political advisor for the last two years with several campaigns, which brings us to the topic of today’s panel. I had no idea when I started to join policy campaigns that one tricky little question was going to have such a huge impact on the political debates, the possibilities, and the limits, and that question has been: how are you going to pay for it? In the winter of 2017, I was working on an outsider campaign for a young woman from the Bronx named Alexandria Ocasio-Cortez, and she asked me to find innovative and interesting perspectives on how to advance her progressive policy agenda. That was when I came across the world of Modern Monetary Theory. Today, it seems like MMT is everywhere in the discourse. Some say that it’s a paradigm changing lens. Some say it’s alchemy. And that’s what we’re going to discuss today. What we do know is that policies such as the Green New Deal, the Federal Job Guarantee, a Housing For All plan, a Green New Deal for Housing, and so many other ambitious policies are now being debated within the lens of Modern Monetary Theory. And increasingly, the group of elected officials known as “The Squad” are turning to this lens and perspective.

So we have a very, very interesting and fantastic panel today. We have Professor Graham Hubbs, who’s an associate professor and the chair of the Department of Politics and Philosophy at the University of Idaho. Professor Hubbs uses ontological methods to study topics that lie at the intersection of philosophy, politics, and economics. He’s given a number of presentations on the social ontology of money, and works on a neo-Aristotelian framework, both to analyze money’s ontology and to systematize the various positions and debates about money’s ontologies over centuries. In addition, we also have Professor Scott Ferguson, who is an associate professor of Film and Media Studies in the Department of Humanities and Cultural Studies at the University of South Florida. He is co-director of the Humanities Division of the Modern Money Network. His research includes the history of aesthetics, digital animation, and visual effects in action-adventure blockbusters and video games, as well as bringing the political economic insights of Modern Monetary Theory into generative dialogues with humanities scholarship, continental philosophy, and media theory. So without further ado, we can begin with Professor Hubbs.

Graham Hubbs: Thank you, Andrés. I appreciate you being here to lead this. Scott, I’m glad that you’re joining us on this panel. A special thanks to the Philosophy, Politics, and Economics Society for allowing us to have this session, and to Geoff Sayre-McCord for his leadership in the society creating an open space for dialogues on all manners of PPE topics, including MMT. So I’m going to share my screen. I have a PowerPoint presentation to run. Is everybody seeing that? Can I get a nod from Andrés or Scott? Great, okay. I call my presentation, “The Promises and Challenges of Modern Monetary Theory.” I’m going to provide an overview sketch of what I take to be the basics of MMT, and in particular, its ontological underpinnings, because that seems like the kind of topic that’s appropriate for an APA meeting. In particular, the ontology of money will be our focus here. And then I’m going to raise some challenges at the end of the presentation, which I’ll then hand off to Scott to address. So let’s get into it by saying what is Modern Monetary Theory?

For anyone who is unfamiliar with it, the book that I think will be the go-to for the years to come is Stephanie Kelton’s The Deficit Myth, which came out last summer. It presents, in readable form for the unfamiliar person, the basics of Modern Monetary Theory. Modern Monetary Theorists present their work as a descriptive project, which is to explain how money is created in modern states and what the creation of money entails for macroeconomics. Randy Wray jokingly says that “modern” means the way that money has been created for the last 4000 years, and that what is being discovered at the ontological level about money creation is true for as long as humans have been making money to organize the activities of distributing the goods that they produce. But the real focus on “modern,” here, is in a more familiar sense, which is focusing on states that issue sovereign currencies. So a sovereign currency is, roughly, a currency that is not pegged either to the currency of another state, or to a precious metal commodity. So when states went off of the gold standard over the course of the 20th century, several of them became sovereign with respect to their currencies by producing fiat currencies whose value floated on the open market. The United States and the dollar is the example that will concern us here when we’re talking about a state with a sovereign currency.

How does Modern Monetary Theory relate to progressive proposals like the Green New Deal that Andrés spoke about at the beginning? Well, a Green New Deal would involve a massive federal jobs program. And if MMT is right, funding it is not a problem. We can just “print the money.” Of course, this doesn’t actually involve printers churning out dollar bills. But the metaphor suffices for getting the idea that the state can just create it seemingly ex nihilo. And if MMT is right, the effects of this on the deficit are not necessarily a worry. That’s hence the title of Kelton’s book, The Deficit Myth. How have people reacted to MMT? Well, the Committee for a Responsible Federal Budget, which is chaired by Mitch Daniels, the president of Purdue and who used to be the Governor of Indiana, has not reacted, let’s say, approvingly of the introduction of MMT into public discourse in the last couple years.

The quote here: “A fringe economic philosophy known as Modern Monetary Theory (MMT) has recently gained traction and is being used to justify massive new borrowing. While MMT is a complicated theory and is in many ways a moving target, at its core, MMT argues that there is little or no cost to running a large budget deficit unless the economy is experiencing high inflation. Many iterations of that theory also suggest a new paradigm whereby the federal government essentially prints money to fund its borrowing, and politicians–rather than the Federal Reserve–are charged with preventing runaway inflation. Fortunately, mainstream economists on both the left and the right have pushed back against this misguided theory.” And the committee recommends these as the top five readings to get clear on what’s wrong with MMT. You’ll see names there on the right, including Michael Strain and James Pethokoukis. These are folks at the AEI. Then, there is Larry Summers, Kenneth Rogoff, and of course, Paul Krugman. Summers and Krugman definitely further to the left.

But wait, there’s more. And reading some of these titles will give you the sense of how people have reacted to MMT. It’s a threat, it’s upside down, it’s not new, and it’s not helpful. The emperor has no clothes. So you get this sense that MMT is simultaneously very spooky, very mystical, very magical and very, very dangerous. Now, I return to the original quote here from the committee’s report. And I want to highlight this bit, because this will be the focus of our talk: “Many iterations of the theory suggest a new paradigm whereby the federal government essentially prints new money to fund its borrowing.” They’re talking about this guy here. Modern Monetary Theory argues that this is not new, but rather simply a description of how money is created, and that what we want to do is properly understand money’s creation, and then harness that power in an effort to do things like improve the conditions of society by ending unemployment, and saving the planet through something like a Green New Deal. Opponents argue that this is, again, simultaneously crazy and dangerous. Behind all of these are philosophical assumptions and views on the ontology of money.

So for the next 10-15 minutes, I’m going to go into that aspect of the ontological underpinnings of MMT to focus our discussion. So the basic ontological question that one confronts when thinking about money is: what is money? That’s arguably the basic ontological question that one confronts when thinking about any kind of thing–what is it? This is a $100 bill. Well, it’s a picture of a $100 bill. And if we were to probe the physical features of this $100 bill in an attempt to find its moneyness, we would come up short. There’s nothing about its color, its shape, the images printed on it, anything like that, that makes this a bit of money. And in fact, as we move further and further away from using cash, we arrive at a point where money has almost no tangible existence. It can’t be completely gone. There have to be electrons in computers somewhere keeping track of the debits and credits in your bank account. But in practical terms, money becomes invisible and intangible to us as we use our phones and credit cards to scan and pay for things. So if there’s nothing in the materiality of money that confers its moneyness, on to that thing, where does it get it?

I think that the right way to think through this, and as Andrés said, I approach this in a neo-Aristotelian way, is to ask about the kinds of things that Aristotle describes as the four causes of artifacts. So we might ask about its telos, or its final cause. What is the purpose or function of money? If we can answer that question, then we will get some clarity on what its ontology is. What properties does money have that allow for it to perform these functions? And how does money get these properties? The second question, I argue, can be likened to the kind of thing that Aristotle is interested in and talking about: formal causality. And the third question, straightforwardly, is a matter of efficient causality. So if we can answer those kinds of questions, we can get some clarity overall on the ontology of money. So we might start by giving a functionalist account of money. I think that this is a nice place to start because the two predominant views on money’s nature. Schumpeter said, “The only two views worthy of the name, ‘a theory of money,’ are in rough agreement about what money’s functions are.”

So the first of these functions is as a means of payment. And let me pause before I go any further and say, I’m presenting this as three textbook functions. If you read 19th century economics textbooks, you’ll see these listed as four functions. I’m going to combine, in line with what many textbooks today do, two of the functions under one heading. And the two functions that I’m going to combine under one heading will be the means of payment function and the medium of exchange function, both of which involve using money to pay for stuff or to settle debts. So the means of payment function makes it easier, or perhaps even possible, to pay for things, or again, we can add to settle debts. An example of this idea is the use of coins and banknotes as a medium of market exchange. The second textbook function of money is as a unit of account or a measure of value. This is the use to which we put money when we specify the payment for the amounts of goods or obligations, for example, prices, fees, fines, or taxes. 

Now, it’s worth noting here, and I don’t think that this is often presented as cautiously as it should be, this function is provided by the concept of money and not concrete instances of money. If you’re trying to sell your house to me and want to sell it for half a million dollars, and I want to determine whether or not it’s worth a half a million dollars, we don’t get out a giant value scale and stick your house on one side of it and then dump a half a million dollars of notes or coins or something on the other side and see if that value balances out. We assess the value simply using the concept of money, attach a price to it, and negotiate it without having any money in hand. When we settle on the amount that it’s worth, all these things take place, we might say, at a conceptual level and not at a concrete level. So the pricing function of money does not depend on, in any given instance, the use of any material instance of money. Rather, it’s the concept of money that allows us to set prices.

Finally, the third function of money that we’ll put on the list is as a store of value. The function is there in the name. It’s to store value. Some theorists would leave this off of the list of functions. The economist John Smithin says that money is a notoriously bad store of value, and so it ought not be included on the list of functions. But I think that it’s a useful function to include and to maintain in our investigation because it allows us to ask the question: what is this primary sort of value that money stores? Simply saying that money stores value begs the question, if we’re trying to understand its ontology, we need to know what monetary value is in the first place if we’re going to make any sense of what it is that it stores. And that gives us an entry into the two different theories of money, that again, Schumpeter says are the only two deserving of the name.

So the first, the orthodox account, says that the value of money is the value that it has in market exchange. So here’s a market. There’s people presumably using money. It looks like they’re buying cheese and sausages and so forth. Ludwig von Mises and Friedrich Hayek called theories of market exchange, “catallactic.” So following them, I use the word catallactic as the descriptor for this theory of money and call it the catallactic approach, or the catallactic theory of money. You’ll commonly see it labeled the commodity theory of money. But I think that that’s misleading, because the theory is not committed to the idea that money itself is a commodity. Rather, it’s committed to the idea that its value comes out in the pricing of commodities, and then the use to purchase and sell commodities. So as to flag that money itself need not be a commodity, I call this the catallactic theory, or the catallactic approach. So here are the basics. In barter, goods have a value that differs from what they are used for. Call the former the exchange value and the latter use value. For anyone who’s ever read Adam Smith or Karl Marx, these terms will be eminently familiar and so will the following story.

If I go to the market with something that no one wants, no matter what the use value of the thing I have is, it will have no exchange value within that market, and I won’t be able to use that thing for trade. If only I had something that always had exchange value, because people always wanted it, I would never face this problem of not being able to buy the stuff that I want in the market. And if everyone had this magic stuff, then everyone would be able to buy the things in the market that they want. Marx gives us a really nice phrase for what happens at this point. In the creation of the money kind, he says that in gold–it needn’t be gold–but historically, he thinks “gold crystallizes out of the process of exchange.” And when gold is used to price all other commodities, it has then taken on the money form. Let’s take this account, the catallactic account of money and run it back against the three questions that I introduced as the sub-questions for studying the ontology of money. So what according to the catallactic account is the purpose or function of money? It is to ameliorate the inconveniences of market exchange. It’s a pain in the butt to buy stuff when you don’t have money in a market. If money doesn’t exist in the market, once you’ve got a market with money, it’s a lot easier to buy things.

What properties does money have that allow it to perform this function? Well, the basic property is the general willingness of market participants to accept it for payment. So the ontology here is social more than it is material. People need to be generally willing to accept gold if gold is the thing that is being used as our money stuff in the market in order to buy things. However, on most of these accounts, you’ll see an enumeration of some of the physical properties that precious metal has that made it especially good in the good old days of coin to serve the various functions of money that we outlined at the beginning. Schumpeter derisively finds these listed in Aristotle and says that they’re repeated in some of the tritest passages of 19th century economics textbooks. We won’t concern ourselves with this aspect of thinking about money’s materiality here. The important part for how money gets its use, according to the catallactic theory, is that people are willing to accept it for payment. And how does money get these properties? Well, the key parts of the story for the catallactic theory is that it emerges out of market activity. First, there are markets. It’s a pain in the butt to trade without money. Money crystallizes out, using Marx’s language.

The alternative view, the heterodox account of the ontology of money, the second of Schumpeter’s two accounts deserving of the name, claims the following: the value of money is its value to claim or to discharge debt. In the state theory of money, Georg Friedrich Knapp labeled this view, chartalism, or cartalism, after the Latin root, charta or carta, meaning token or ticket. Now, chartalism does not require that the tokens or tickets or debts that are emitted and need to be repaid be determined, set out, and set by the state. But as you can tell from the title of Knapp’s book, The State Theory of Money, he’s most interested in debts that get determined, announced, and then collected by the state. Those are the kinds of debts, and so the kind of chartalism, that’s going to be most interesting to Modern Monetary Theory. It will be the chartalist theory that will concern us here. Here are the basics of this theory. When large-scale civilization came into existence, namely Mesopotamia, there were many modes of collective provisioning. Bartering was not particularly significant. Other forms of collective provisioning included lending, neighborly gifting, and central management at the temple. As far as the latter is concerned, this required complex accounting and bookkeeping. But that’s not the only thing that the temple bureaucrats and temple priests did. They also needed to develop a system for assessing fines and punishments.

So for example, if I accidentally kill your cow, and I don’t have a cow to give you in return, and we’re going to keep peace in our state, I need to give you something in return for the cow that I have killed. How do we make the incommensurable commensurable? We need to come up with something that I can give you for repayment of your cow. This is a legal matter. This is a matter of justice, and retributive justice in a sense, repaying you for the wrong that I have done you. How do we determine how that’s going to go? That’s something that the central authorities are going to have to decide as well. The claim then is that these pressures lead to the need for a universal unit of account making all things incommensurable commensurable. And that once this universal unit of account was defined, the unit could then be used for private, that is, market transactions. Sorry, the last bullet point is important here. According to the state theory version of chartalism, both the state and money are prior to the existence of markets with prices. Money does not emerge out of market activity, but rather enables market activity in the first place.

So on the heterodox account, what is the purpose or function of money? Primarily, it is to denominate debts with the concept of money and then represent specific obligations with physical manifestations of the money. The concept is prior to the physical manifestations on this account. So this is one way in which the chartalist theory inverts the story that one finds in the orthodox account. And the state theory says specifically that the kinds of debts that we’re interested in here are state denominated debts. So that money exists in order to aid the state in managing economic and legal activity. What properties does money have that allow it to perform this function?

According to the state theory, it’s the power of the state to demand taxes, fees, and fine payments in its own currency. It’s this legal authority that is the source from which monetary value arises. And how does money get these properties? Well, by however the state obtains and enforces the power of the law, specifically, the power to tax, charge fees, and to fine. So according to this theory, the ontological account that we want to give of money is actually something that follows from our more general account that we give of the power and authority of the state to coercively get its members to do anything, or maybe non-coercively get its members to do anything. But the power that money has is ultimately an expression of the power of the state. So we do our political philosophy first and understand the nature of government and its power, and that will tell us where the power of money comes from, and not the other way around. So let’s compare these two accounts on one specific phenomenon that is particularly relevant to MMT, and that is on the nature of taxes.

So the orthodox view of taxes proceeds as follows. First, when we’re thinking about taxes, we think about what money is for in the first place. And money, in the first place, is used to pay for stuff in markets. The government has to pay for stuff just like the rest of us, so the government has to get money just like the rest of us. Now, one of the basic ways that the government goes about getting the money it needs to pay for stuff, just like the rest of us, is taxes. So the function of taxes is to collect the money that the government needs in order to finance the activities that it wants to perform. I’ll go ahead and flag here that this story, I think, is the story that you find in Locke’s “Second Treatise of Government.” If you watch the way that he proceeds in explaining the creation of property through his labor theory at the beginning of chapter five, money comes out at the end of chapter five for the reasons that Smith and Marx flag. It makes commerce easier than it would be without it. The creation of property and the creation of money come before the creation of government. Locke famously argues that the whole point of government is for us to protect our property rights better than we can in the state of nature. So if property and money are prior to the existence of government, then governments are going to need to get money in order to get the property that they need to do the stuff that they want to do just like the rest of us. So the kind of account that I’ve given right here, I think, is one that comes naturally out of a pretty straightforward reading of Locke’s second treatise.

MMT tells a different story. As a matter of ontology, no government has to get money like the rest of us as a matter of law. So let me backup for a second there. It is a choice according to MMT that a government makes as to whether or not it will provision itself in ways similar to the way that we provision ourselves when we go out and work for money or steal for money or do whatever we end up doing in order to get our money. The government can choose to hamstring itself this way through the laws that it creates, but it’s up to itself to rewrite those laws, and if it wants give itself a sovereign currency. So as a matter of law, a government that does give itself a sovereign currency, that government does not in fact have to go out and get money like the rest of us. A government with a sovereign currency does not use taxes for financial purposes in order to provision itself to perform the tasks that it wants to perform. It uses taxes to destroy money in the private sector, rather than to collect it for use. When this sets in, and I think that this is the part that in my experience in talking with people about post-Keynesian theories in general, of which Modern Monetary Theory is a species, or Modern Monetary Theory specifically, where people really kind of step back and say, “Whoa.” Because this is, I believe, a “Copernican Turn.”

For states with a sovereign currency, the function of taxes is not, and moreover, cannot be, as an ontological matter, to finance its activities. Whatever taxes are for, it’s something else. This new paradigm on taxes is in fact not new at all. Beardsley Ruml, the chair of the New York Fed in the middle of the 1950s, as the world was beginning to go off the gold standard, realized this and said that, “Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or for some other commodity.” Ruml then goes on to talk about the sorts of things that you use taxes for, but none of those functions are the function that the orthodox theory would have us believe, which is to finance government activities. And it turns out that this was recognized back in colonial America as well. Farley Grubb has written extensively on the ways in which Virginia’s paper money in the middle of the 18th century was burned when it was collected for taxes. Many other colonies had this policy and it wasn’t always followed. But nevertheless, they realized that their paper money, after it had served its function of getting the kind of economic activity that the state governors wanted, or prior to states, that the colonial governors wanted done, it might as well be burned, it doesn’t have any sort of intrinsic value. I think the argumentative upshot of these examples is that what chartalism says is true as a matter of theory is in fact borne out by history itself.

Okay, so that is what I want to say to orient us on the chartalist theory of money that underpins MMT, or the social ontological account of money that rests at the bottom of Modern Monetary Theory. Now, I want to go through some complaints against MMT, which will set the stage for Scott’s presentation. So can we do it? Here’s the first complaint. Why think that history is relevant? You’ll note that the account of money that I gave on behalf of the chartalists, and in fact, the account of money that I gave on behalf of the orthodox catallactic theory, was presented as a history. First, there was this problem under certain social settings. Then, this technology money arose to solve this problem, and forevermore we were better because we had created this technology. Thomas Palley, a persistent critic of MMT, has said that the appeal to the history of money that MMT makes, and one could level discharge against other versions of post-Keynesianism that rest on chartalism, say that the history of money is a red herring and is essentially rhetorical. All of this fussing about money’s history and what money really is, is of no relevance to the kinds of contemporary policy debates that Andrés was talking about at the beginning.

So one complaint is that MMTers, and again, I think post-Keynesians more generally, make a big deal about the history of money, but it simply doesn’t matter one way or the other. Second complaint, and if this is the first time you’ve heard about Modern Monetary Theory, I imagine this has crept into your mind at some point along the way when you saw the poor guy just cranking out the money machines, veins popping out of his head, is that won’t this cause runaway inflation? A simplistic version of this worry is simply: won’t creating all this new currency cause runaway inflation? I call this simplistic because the historical record shows that under some conditions there’s a correlation between an uptick of currency creation and inflation. And in other conditions, there’s not. On the orthodox theory itself, the creation of a whole bunch of new currency, money is supposed to be an invisible veil to the real economy. So prices should eventually settle out and match the amount of money in the economy. Thinking that simply creating a whole bunch more money is going to lead to runaway inflation presupposes that the value of money is determined by its scarcity. And that simply begs the question against the chartalist view.

So there’s a lot of things that one can say immediately pointing at economic history and thinking just a little bit about the ontological presuppositions about money to ward off this charge. But there are real concerns that one ought to have about the possibility of inflation under MMT specific policies. And these complaints come even from within post-Keynesian circles. So there’s an internecine debate. Smithin argues, for example, that raising the overall tax rate is going to be necessarily inflationary. So if part of the MMT solution for controlling inflation through the creation of quite a bit of currency is to use taxes to vacuum money back out of the economy if it’s getting too hot, Smithin argues it can be easily demonstrated that that’s going to lead to inflationary pressures on themselves. I bring this up to note that there are complaints about the inflationary consequences of MMT, both inside and outside of post-Keynesianism. A third complaint against MMT is that it’s too socialist. So when you hear about something like a jobs guarantee, that the government is going to guarantee a job to every person who wants one in a given state, if you don’t like the sound of governments employing people for any number of reasons, this is clearly going to strike you as too socialist of a proposal.

That complaint is straightforward. I’m not going to go into it in any detail. It has struck people on the left that MMT, on the other hand, is too capitalist. Modern Monetary Theory, it’s complained, works only for the most powerful, developed capitalist states. It’s hard to see, some people complain, how MMT could work for developing nations, and so it favors the rich. MMT also does leave an awful lot of economic activity up to the markets. And in fact, it sets up the job guarantee in such a way to encourage entrepreneurs to find more innovative ways to use the labor force that exists in a given state. So if that all sounds too capitalistic for your taste, then you might have a problem with MMT. And finally, the last complaint that I want to raise, and this is the one that I would invite us to be most concerned about here, since this is a philosophy conference as opposed, to say, an economics conference, is that the central priority claim of MMT is simply false. The central priority claim that I have in mind is the idea that governments, government activity, and governmental authority is prior to markets.

So the Lockean view that I presented earlier, of markets and property as being prior to governments and that the function of government is to protect property rights, the complaint that I’m imagining here takes a Lockean or a neo-Lockean position and simply says that’s wrong. That’s just backwards. Look, there’s international trade out there and international trade isn’t governed by any external authority. It takes place using money. So if international trade is possible, and not only possible, but makes use of money, why think that governments need to exist in order for money to exist. You might point to the historical record and say that precious metal itself, before the advent of coin, was used in interstate trade. Merchants got by with precious metal prior to the existence of coins in order to trade between states. That too makes it look like one could point at the historical record and say that market activities have been outside of, and so were, analytically, logically, or definitionally, depending on how you want to characterize it, prior to the activity and authority of states.

There are black markets. They go on, they make use of money outside of the authority of the state. Doesn’t that count as a counterexample to the idea that states are necessary and the creation of state money is necessary for market activity to take place? What about markets involving private cryptocurrencies? The markets that use Bitcoin that have specifically been designed to avoid the, from their point of view, intrusive reach of the state. Those markets go on. Bitcoin is used as a unit of account to price goods and to pay for things. Doesn’t that demonstrate that money can exist outside of the authority of the state and be used in accordance with all the functions that were listed earlier. What about prison camp markets in World War Two? The famous 1945 paper by R.A. Radford shows how cigarettes were used as a unit of account, as a medium of exchange, and that emerged out of a non-governmental setting. Doesn’t that show that markets can come up, and a money-like commodity can come into existence that doesn’t presuppose the authority of government? When we take all these examples into consideration, and the ways that they seem to provide for markets using money or something money like outside of the authority of a central government, why should we believe in MMT? Scott, I’ll hand it to you.

Scott Ferguson: Great, thanks so much. That was a really helpful presentation. Andrés, thank you for chairing this panel, and Graham, for putting this together and inviting us. And thanks to everybody for showing up on this last day of the conference. So I think what I’d like to do is offer a few quick responses to those critical claims that Graham concluded with, that are much more, I would say, in the wheelhouse of kind of your basic MMT 101 discourse, and then pivot from the last, “This is false, markets are first,” question to take on some broader conceptual problems that are coming out of my own work.

So first of all, the charge that history is irrelevant I find shocking. History, I would argue, is always a contested ground that’s always caught up in contemporary epistemological, ontological, and political economic debates. And the way that we approach history, the way we imagine history, and the assumptions we bring to history, can never be wished away. You look at the major canonical contributors to political economy and economics and many of them have written histories. I mean, Milton and Rose Friedman wrote a gigantic monetary history, and it is a way of shoring up their own politics, their own ontology, and their own epistemology. So I would say that it feels nonsensical, to me, this claim that somehow history isn’t relevant. Everyone uses history to make sense of the present and future politics and policy. The second claim about hyperinflation, first of all, an MMT economist will tell you that the mainstream, or the neoclassical interpretation of inflation, and specifically hyperinflation, has the causality precisely backwards. Hyperinflation is a function of political catastrophe and the collapse of a productive infrastructure. A government can create all kinds of credit and try to circulate it in an economy. But if it does so in the face of, say, decades and decades and decades of colonial rule and exploitation and export led production, or after a major world war in which your country happens to be paying massive reparations payments and the majority of your productive infrastructure has been destroyed or confiscated by your opponents, you’re likely going to see hyperinflation. 

So the MMT point of view rejects the so-called quantity theory of money, which imagines this kind of equilibrium that commodities, or goods and services, come first in a marketplace. And that money is this kind of neutral, passive reflection, or veil, that needs to be somehow in tune with those ontologically primary goods and services. MMT would argue that, no, credit actually comes first–money as credit–and you need money as credit to generate these goods and services in the first place. And for that, you need massive macro- and mesoscale governance projects, infrastructures, and institutions. Also, there’s a kind of mythos around the MMT community about how we argue inflation should be controlled. This simplistic version is, well, we’ll just use taxes, and congress will be in charge of, essentially, extinguishing debts, or pulling money out of the economy, in order to check runaway inflation. This is a gross simplification of what the MMT community has worked on and has argued. We argue for thoroughgoing macroprudential regulation, which includes the private sector, and runaway inflation in the financial sector, on Wall Street and in all kinds of capitalist enterprises that are producing far more speculative bubbles than any measly congressional appropriation might be doing.

So our argument is to have certain kinds of automatic stabilizers and certain legal and institutional structures that are keeping inflation in check. Basically, what that means is making sure that public and private investment is going toward productive, socially and ecologically valuable enterprises, rather than speculative leveraging, essentially. To the charge that MMT is too socialist, I would say that some MMTers are socialist, and I would include myself in there, but I think that the MMT project really does, as Graham says, bill itself as a description. We say in the MMT community, there’s no such thing as “doing MMT.” It’s a way of understanding the way that money works, the way that political economy works, and the way the world works. It’s not “doing socialism” or “not doing socialism.” If we’re going to talk about doing MMT, we would just simply say, “Well, everyone does MMT all the time. It’s just they don’t think that they’re doing that.”

The charge that MMT is too capitalist, especially from the left, to me MMT is not capitalist. And certainly, as a tool, as a framework, as a foundation, as a set of assumptions for understanding the world, sure, you can mobilize this framework in so-called capitalistic ways, for private enterprise, for private profit, in exclusionary ways that exclude women and brown people from major centers of participation and power. You can do that. But you can do that according to the status quo as well–the neoclassical understanding of money as well. Then, there’s this notion from some in the progressive and leftist critiques of MMT, that geopolitically, MMT is too capitalistic in the sense that it is too America-first and neo-imperialist, and that it requires the United States to be the world reserve currency. To this, we would say, no, this is not the case at all. We would say that it reframes postcolonial political economy and geopolitics according to another framework that is more capacious and more insightful. We don’t say MMT solves colonialism, postcolonialism, or neocolonialism. We don’t say that MMT solves everything. We don’t say that domestically and we don’t say that internationally. We say it opens up the problems–and sometimes they’re really hard and very, very intractable problems–but it opens up the problems in new ways that allow for different ways of engaging, different ways of politicizing, different ways of proposing policy solutions, and different ways of mobilizing political movements.

Now, the last claim that it’s simply false, that markets must be ontologically prior because they exist outside of nation-states, maybe I’ll say a little bit about this before I then come back to some work that is more particular to me. What I would say is, just like there’s a kind of deliberate and even somewhat cheeky looseness about the way Modern Monetary Theory defines “modern,” which is actually a quote from Keynes in his A Treatise on Money, where he says that modern money, for the last 4000 years, has worked in this chartalist way. I think we would say the same thing about states. And not all MMT economists are as concerned with clarifying this, but I think there’s a number of them, and then the fellow travelers, like myself, Andrés, and Graham, we would say that we shouldn’t narrowly understand this as the modern nation-state. Instead, we should be understanding this claim, the chartalist claim, that money is a systemic form of social obligation of settling debts, that it is a public project, and that it is a governance project that requires macro- and meso-level institutions rather than a micro-project that bubbles up from barter, that bubbles up from exchange. So you can have all kinds of macro- and meso-governance projects that don’t look like a modern nation-state.

Graham, I think, mentioned a Mesopotamian temple provisioning structure. One could talk about the high medieval Catholic Church and the Holy Roman Empire. Both of them were centers of tax receivability, and actually didn’t even issue their own credits, their own money, but they were central governance projects with massive reach. That local meso-level, and even micro-level activity, were embedded within. So that would be my first response to this charge that, well, there’s micro-markets out there or in prison camps or black markets or Bitcoin. The narrow definition of the state seems to make the argument crumble. Instead, I would want to focus on a nested, interdependent understanding of the way that these governance projects work together in these very complicated hierarchies. I’ll just say, in passing, that I don’t think it’s any accident that Bitcoin gets priced, usually, in dollars. It demonstrates the way that Bitcoin is embedded in a much broader, you could say, American payment system, with its vast infrastructure, its legal infrastructure, and its banking system, etc–for all of its fantasies about wanting to be outside. 

Now, I want to turn to some of my work, in particular. I’m a media studies scholar. I think a lot about media as shaping and organizing our world. And one of the key arguments we make in media studies is that media is never a neutral veil, media is never a transparent window, to use a famous metaphor from the Florentine Renaissance talking about Renaissance perspective. It is always generative. It is always constitutive. It is always actively organizing the world. When I came to MMT around, let’s say 2012 or so, as a media theorist, I immediately thought to myself, “Oh, wow, this is a major contribution to media theory.” Because I had been working, even though I’m so keen on seeing the constitutive nature of mediation, in, especially, motion pictures, because that’s my expertise, and in visual culture, I kind of just took for granted that, well, money is just an expression or reflection or neutral veil, and that what’s really going on is this content, this exchange, this private, micro-exchange. And money isn’t constitutive in that way. Money is sort of a problem. So that, from my own training and my own project, has really shifted things for me. And I felt like it opened up all kinds of new questions.

Now, full disclosure, I come out of the the tradition of critical theory, continental philosophy, from the German Idealists to the Frankfurt School, Marxism, poststructuralism, and beyond. And what I found is, this understanding of money as a constitutive, generative organizer of political economy, of social production, of participation, and of distribution, it radically opened up a lot of the questions that are asked by the traditions that I had become something of an expert in, in new ways, and in ways that, to be honest, I don’t feel like I’m a card carrying member of those traditions anymore. They’re in my bones, so to speak, but I really found myself not applying MMT to them, but taking MMTs provocations, which, as Graham is pointing out here, are actually ontological. I mean, they’re pretty radically unmooring provocations, and opening up what I would call problem spaces based on teasing out the threads that these questions are opening up.

So one of them is media and mediation. Coming out of critical theory, I have an acute sense of the way that political economy and money as a medium acts as a kind of meta-medium for all other media. And one cannot have, let’s say, motion pictures in the 20th and 21st centuries without the medium of money. It’s somehow always there, but we treat it in a very particular way in critical theory as an exchange instrument that is necessarily alienating, or at least ambivalent, and highly problematic. And it frames the way we take on the history of any given media with a set of given presuppositions that I’ve begun to challenge. Now, there is the question here, which Graham has been really good on, about the ontology of money, and I’m saying that it’s also a media question, a question of the ontology of medium, of media as such, as constitutive, but also the money medium.

But in my own work, I’ve gone back in the history of modern Western philosophy, and I feel like I’ve been pushed there by these problems. I’m a modernist. I studied the 20th and 21st centuries. But I felt like, as I was following these threads, I was pushed back further and further and further, at first, to the kind of classical Liberalism of John Locke, Ricardo, and these sorts of authors. But then even further back, because what I think MMT does, but doesn’t actually have the philosophical equipment to fully flesh out–and to no fault of their own, they’re economists. They’re lovely, they’re my colleagues, but they’re economists. They can do things I can’t do and I can do things they can’t do. They don’t have the philosophical equipment to think through the underlying ontological suppositions of the claims that they are making. And I don’t just mean about the ontology of money. I mean about ontology as such. I mean at least about social ontology.

So I’ve gone back to the late scholastic debates between the Thomist tradition and the Franciscan tradition. And these are notoriously fraught and messy debates, but just to very quickly gloss, they were debates about ontology, the structure of being, the nature of being, and the nature of knowing being. And to simplify, I think that the Thomistic vision of being is that being is a holistic, interdependent, and hierarchical system in which there is no outside to it. And being is irreducible to individuated being. So what this means is that relationality, or mediation, the organizing of relations, can never, from a Thomist point of view, be just simply a micro-ontological question. It’s never a question of fundamentally, ontologically dissociated beings–creatures, God, angels–somehow meeting up in micro-ways, in micro-contingent encounters or contracts or agreement, and then going on their merry way. So this is very much a rebuke of avant la lettre, of social contract theory–even the most sophisticated social contract theory.

Whereas, the Franciscan understanding of being is that being must be individuated. It must be externally individuated such that there can only, essentially, be beings, and God must be understood univocally as one being among beings, such that the encounter with God can be a contingent one, and a contingent one of two or more wills meeting or going on their merry ways. And this, I would argue, as many have, but not thinking about money at all, created the conditions for the private exchange approach to money that we see arising through Franciscan political economy, through the Florentine Renaissance, and the internationalization, or you could call it a globalization, of Renaissance thinking, and Renaissance political and economic practices, and then eventually to the physiocrats in classical political economy. So I locate the origins of this von Mises-Hayek approach to money as really having origins in this much older debate about social ontology. I’m not a Catholic. I have no stakes in shoring up the church. I approached this as a critical theorist, as a philosopher, and as a leftist. And I’ve been pulled toward these questions in new ways.

So what I would say in response to these questions about markets existing outside of states so markets must be first, I would say, well, a philosophically informed MMT point of view would respond that macro comes before micro. Now, it’s not a zero-sum situation. Micro is embedded in macro and participates in macro, but it can’t ever be outside of it, and it certainly can’t be prior to it. So that would be my ontological argument in a very breezy form. The last thing I want to say, just to give a little taste of my work, here’s a little plug, this is a book I published a couple years ago, Declarations of Dependence: Money, Aesthetics, and the Politics of Care. One of the claims I make in this book is about the modern philosophical and then cultural and artistic project of what comes to be called the aesthetic. As most of us probably know here, the term aesthesis was used to mean sensation by the ancient Greeks. What we call aesthetics today was understood according to different categories, like poetics and other terms. With the rise of certain British philosophies, empiricisms, and sentimentalisms, but then, of course, specifically German Idealism, Kant, Schiller, Hegel, and beyond, the study of the aesthetic and the problem of the aesthetic comes into being and is constituted as an historically new domain, and an historically new set of possibilities and limits and problems.

And the way that the story often gets narrated, especially from a critical theory point of view, is that it arose as a bourgeois project in continental Europe, and the UK to a certain extent, and it was implicitly and explicitly variously pitted against, essentially, the domain of political economy. These were antinomies. And the aesthetic project was meant to be a kind of antidote to, or a refuge from, the ambivalences, alienations, and violations of private commerce understood through this kind of contracted, micro, and private monetary imagination. And this starts to orient art practice and cultural practice, especially once we get into the 19th century. It also gets radicalized by various socialists and artists and modernists and avant-gardists. And that strain of aesthetics starts making the argument that we should not have the aesthetic project, which promises social and sensual fullness and communion as opposed to the alienation of the marketplace. We should not just treat this as a refuge. Instead, we should get rid of it, we should we should sublate it, or whatever term we want to use, we should move beyond the private money economy and money as such, and we should have an abundant, communal, sensuous, socialist or communist society.

And then, the way that this plays out is essentially a kind of tragedy, or a fall story, where the forces of capital through commercial culture and the society of the spectacle, or simulacra and simulation, pick your critical author, basically, subsumes the aesthetic project and enlists it on the side of capitalist alienation, exploitation, and domination. And what we have by the postmodern, or late 20th century period, is this collapse of what is often imagined as a dialectic. And my claim in my book is that, well, first of all, most of my colleagues know that there’s something too simplistic and actually false about this whole story. But what they don’t have is a way of refiguring the story, or getting out of it. Most of my colleagues suffer from the symptoms of the structure of this story, even if they’re able to say of course that’s not the case, or, of course, money and art, or money and aesthetics, were not antithetical to one another. That’s absurd.

But my claim in the book is to say, if we start from an MMT, chartalist, public money, governance, macro- and meso-project framework, then we can see that, actually, this whole antinomy was false to begin with. That, in fact, the aesthetic project is a symptom of the reduction and contraction of money from a public utility into a seemingly private, micro, for-profit extractive enterprise. And that, instead of a bourgeois philosopher feeling ambivalent about money, or as a radical philosopher wanting to transcend money in order to install some kind of sensuous abundance on the model of the aesthetic project, these things should have never been opposed in the first place. And that, actually, money is what I call a proto-aesthetic instrument. It’s required for any kind of social and sensuous cultivation and communion, or any kind of project, and that we have to reckon with money as not a necessary evil that I’m ambivalent about, or the root of all evil, but as a public utility that is political and that can always be organized in another way. So with that, I think I’ll stop and we can maybe open it up for questions, comments, and thoughts.

Andrés Bernal: Great, thank you, Scott. And thank you, Graham. Excellent presentations. Let’s take some questions.

Graham Hubbs: Andrés, it looks like people are putting their names in the chat. So maybe you’ll call people out of the chat to ask questions.

Andrés Bernal: Yes, sounds perfect. Justin.

Justin Holt: Thank you. This is very interesting. Thank you for the presentations. Really fascinating. I come at MMT from reading it for many years and looking at it from more of an Anglo-American, Rawlsian perspective. That’s what my work has been mainly on in relation to MMT. But I have a question about thinking about the place of ontology. It’s very productive, but this is really addressing the question of thinking about Locke. And we could think about, perhaps, the labor theory of property coming out of Locke. But one thing that’s always troubled me about this is, the Lockean project, even in Locke’s second treatise, it falls apart in the sense that Locke wants to say, “Okay, we’re going to establish states in order to preserve property.” But then, Locke goes on, and this is the great thing about Zoom, because you can be at home with your books, and in paragraph 140, he says, “Still, it must be with his own consent, the consent of the majority, basically, to levy a tax.” See, everybody’s at home with their Locke, right? So this is great. So in paragraph 140, he basically says, “Okay, we can levy taxes if the majority wants to levy taxes.” Now, Locke doesn’t push all the way and doesn’t realize you can set the tax rate at anything then. So you can basically set confiscation rates if the majority says so. And, of course, the notion is, in the previous paragraph, he says, “You can’t take people’s property away unless they say so.” He doesn’t say majority there. But then he goes on to say that the majority can tax.

So the Lockean project seems to fall into the institutional theory of property, that property is instituted and regulated and created by the state. And that’s what we need the state for in the first place. Property doesn’t exist without the state. It’s the only way to arbitrate claims and to say who owns which side of the river. You can’t do that on your own, you may have forgotten your agreements. So the consideration here is that the state creates rights and fabricates claims. It creates property claims. So when it comes down to money and thinking about this, and thinking about many of the examples that Graham gave, yes, market interactions exist between people, or interactions exist all the time. And some of these are rather unformalized, like “Well, I’m going to help my friend fix his car, and then he’s going to do something nice for me, like baking me a cake.” All these things exist. Now, when it comes to MMT and thinking about this, they have the interesting example of saying, “Okay, colonial governments were able to basically get natives to do work by putting a tax on them.” This is the example that they utilize. Of course, these indigenous populations had their own networks, their own economies, and their own interactions, but a tax was imposed. Thus, the state was able to get something built like a road. So there’s this notion that states are able to create and fabricate property. So I feel that property ultimately gets subsumed into some type of state apparatus.

I’m going to add just one last thing. I can’t remember who says this. I think it’s Randy Wray. Randy Wray would say anybody can make money, but the key is getting it accepted. With this notion, I think there’s a chimera here. There’s a falsity about a natural theory of property. There’s a falsity that markets occur first before all of this, but seemingly, the state subsumes and encompasses and creates and regulates all forms of property. Yes, we can make anything that we want, but can we turn a Bitcoin into $1, because, ultimately, we have to turn it into $1 to actually make anything work for us in a lot of different ways. And ultimately, of course, to pay our taxes. So this is more of an example, but I’m really skeptical of Locke’s chapter five version of property, because I think Locke kind of undoes it all when he talks about taxation and majorities in states. I’m sorry, I wish it was a more clear cut question. But it’s more about saying, perhaps, that the labor theory of property is just false. It falls apart, and the institutional version structures it. Thank you very much.

Andrés Bernal: Great. Let’s take one question before we start answering. And I believe the comment by Wray is from his former professor, Hyman Minsky, about anyone can create money, the problem is getting it accepted. Mitchell.

Mitchell Silver: Hi, first of all, I want to thank both presenters. I thought they were interesting and clear. My question will probably be quite naive. I’m new to this discussion. But I’m wondering, the market approach versus the state understanding of money, while they’re clearly alternative accounts, they both struck me as compelling and it was not obvious to me that there wasn’t a reconciliation possible. So the first part of my question is have there been attempts to reconcile them, or is there a story that can be told that incorporates both of them? Because they were not in obvious conflict, or what seems to make them in conflict was claiming that there was an ontological truth here, that there was a correct ontology. And that you had to get the ontology correct to understand money correctly. But it’s also not clear to me that there is an ontology that’s independent of pragmatic considerations, in general, let alone in this particular case. So might we approach this by trying to think of it pragmatically, such as, what are our goals here? What problems are we trying to solve in thinking about money? And to what extent does one theory or another theory allow us to successfully approach those goals so that ontology then becomes just a practical consideration or inquiry in terms of what do we need to quantify over to make the kind of statements that we want to make? With the kinds of statements we want to make, ultimately, their truth really depends on where they get us in relation to where we want to go.

Andrés Bernal: Great, thank you. So let’s pick it up from there. Responses?

Graham Hubbs: I have quite a bit to say in response to Mitchell’s question. Scott, do you want to say anything in response to Justin’s first?

Scott Ferguson: Okay, I’ll speak to Justin’s. I strongly agree. The Lockean account of property is, I would agree, false. To put it one way, it deconstructs itself. I will say that this is all predicated on the state of nature story, which gets retold in many, many different ways during the Enlightenment, and it imagines an immediate encounter between a laboring, industrious individual and the natural world without the mediation of governance or law. I think what Justin was pointing out is that, it might not be a modern nation-state, it might be something more messy and complicated that we’re not used to thinking with that doesn’t conform to so-called “Westphalian” political theory. Property is never prior to law, it is constituted in law. Sure, a state can constitute that property. Sure, property can come about informally, at first in informal interactions, but I would always argue that those informal interactions and coordinations are always embedded in and dependent upon larger systems. They are not flatly determined by those systems, but they are participating in them and embedded in them and in a dependent way.

I’ll use this to pivot to my own very brief response to Mitchell’s question, or at least part of it. I don’t read the two versions of the story, the market based story and the state based story, as actually arguing according to the same assumptions. It’s the exchange story that wants to exclude the state as ontologically coeval. The state story wants to say, “No, the state is constitutively and actively involved. And yes, of course, there’s private markets. Of course, there are all kinds of hierarchical degrees of money’s moneyness, or acceptability and enforceability. And that’s always caught up in contestation and crises and forces outside of people’s control. Sure. But I would say that MMT reconciles the two. It doesn’t say the market doesn’t matter or that it doesn’t count. It just says that, “Well, actually, where the private marketplace gets the credit in order to produce goods and services and sell at a profit comes from a legally licensed banking system that has been endowed with federal and state power to create credit on behalf of the public.” So that’s how I would respond to that.

Graham Hubbs: Well, my answer dovetails with Scott’s and picks up from there. The idea that for many people, the orthodox account, the catallactic account, has a political purpose, is true. It may not be true of everybody, but certainly when Menger writes his theory of money, it has the purpose of establishing what we described earlier as the Lockean order of things, where first there’s property and markets and then government comes along later, and is meant to be constrained somehow by natural property rights. So there’s a political purpose to the account. It may not be true of all market theorists, but it is at least true for some of the catallactic theorists. To your question, are there accounts out there that seek to resolve both of them? Since we can do show and tell here, there’s a debate between Geoffrey Ingham and Tony Lawson in the 2018 Cambridge Journal of Economics on precisely that question. I’ve learned more from Ingham about this stuff about money than anybody else. And as a bit of intellectual history, Stephanie Kelton, who is one of the foremost economists in MMT, studied at Cambridge with both Ingham and Lawson. Part of where MMT has historically gotten its understanding about the ontology of money was Kelton’s time at Cambridge, studying with Lawson and Ingham, and then bringing it back to the States.

Ingham is a neo-chartalist. Lawson believes he’s got a way to reconcile the two and has a middle path through chartalism and market theory. In that 2018 exchange in the Cambridge Journal of Economics, Ingham says that Lawson, in spite of his best efforts, ends up being what I call a catallactic theorist, or what other folks would call a commodity theorist. I think Ingham’s got it right. But to your broader point, Mitchell, of why do we even need to see these theories as competing in the first place, one reason is the fact that each gives its explanation of money’s ontology as a history. Each is keen to tell an origin story. And something that I’ve been working on is asking the question: why is that necessary anyway to understanding the ontological order of the various functions of money? Can we dispense of the historical account itself as a history, and re-understand it as giving an order of priority for the functions of money? I think that that’s the best way to do it. And there, you actually do get two accounts that can be brought into opposition with one another. But I think the real conclusion that we should derive from this is pragmatist in a way.

I don’t know if Quine would be my hero as much as Sellars, but we all got brought up in 20th century American philosophy here. I think that what we should do away with is the idea that money would have an essence in the first place. Asking what money is presupposes that we’re trying to uncover an essence. Well, do away with that assumption. Instead, look at the various accounts of money and locate money-ish features, characteristic features of money, or something like that. Then, we can say, is Bitcoin money? Well, that’s a stupid question that presupposes that there would be an essence to money to determine whether it is or isn’t one. Bitcoin has some money-ish features. It’s used as a unit of account. It doesn’t work very well, because its value fluctuates wildly against the basis of the dollar. It’s used as a medium of exchange. Those are money-ish features. Is it money? Legal theorists, courts, and the government need to decide that for regulatory purposes. So there needs to be some legal definition of money that then decides whether we treat Bitcoin as a commodity or something else. So somebody has to get an answer to the question, but thinking that behind that there is a ontological essence that answers the question, that’s a mistake. But that doesn’t mean that we should just dispense of theorizing altogether. Digging into the theories lets us think more clearly about these issues.

Scott Ferguson: Can I just quickly follow up? I both kind of agree and would want to complicate what you’re saying. I’m sitting here saying we need to ask ontological questions, and that those are social ontology questions, not just money ontology questions, and so I feel implicated in this critique. But so, what I would say is, going back to the Thomist and Franciscan debates, I would reject, in line with what I think you’re saying here, a univocal essence that can be positively articulated. I would say ontological questions are important if approached in what Thomas would call an analogical way. Which is, you still have to theorize, you still have to use the evidence, figure out what’s going on, and have pragmatic considerations of what you want to get done. And you can analogically approach a way of getting a handle on the ontology without creating some kind of rigid, and thus brittle, ontology that you’re then going to put out in the world and have everybody show you all the examples of the ways your univocal ontology falls apart. So I would say, I think we agree, but we use different terms, and I’m willing to use that word ontology in an analogical way.

Graham Hubbs: You’re hanging out at an analytical philosophy conference, Scott, you’ve got to talk about ontology.

Andrés Bernal: Great, Martha.

Martha Beck: Okay, so I’m actually trained in ancient philosophy, so now everybody’s gonna have to switch. I just want to throw out a whole lot of stuff back to the four causes. I mean, obviously, money is the material cause, but that’s not the main cause for Aristotle. It’s the formal and final cause. So it sounds like these big disagreements are more about what Aristotle would call the efficient cause, which came first. But that’s not the main cause. The main cause is human nature, which is flourishing. So he goes on this switch from the family, mere survival, to the village, which is economic exchange. Then, he says, there was this sudden shift in consciousness, where we realize we live for the sake of a high quality of life. So I would say that everyone in the world functions at some theoretical level, at that higher level. People want a middle class. People understand the need for things like education and healthcare. It’s not just a village. Does that make sense to people?

Because, honest to God, Charles Koch and these guys want to make the world into a village. They really want to believe that capitalism will solve every problem. And I’ve been reading about Koch. I mean, he has an ideology that he brainwashes his employees with–market-based management–he really believes in that. That’s the power of ideas. First of all, philosophy matters. Second of all, they’ve got the wrong idea. Because, the individual profit maximization, that is not the way people live. If you want to understand why there is all this animosity, so many parents are willing to give up so much so their children can have a better life. And if you can’t convince people that one monetary policy rather than another is going to give their kids a better life…the monetary is the tale. It’s not what’s driving human behavior. But I did want to go back to the two main issues that I was aware of 55 years ago, environmentalism, and the need for culture to integrate with nature. And that goes back to Scott’s thing.

Actually, what made St. Thomas Aquinas different was Aristotle. All that holistic stuff, that came from the Aristotelian side, because Augustine was another one that emphasizes just free will. There’s God and I, and I just achieve salvation in relation to the world. Then, Locke took that into economic calculation. So Locke’s view of reasoning is what the Greeks would call calculation, which, greed, if someone who desires money or power only has that kind of reasoning, you’re in big trouble. So the big mistakes in enlightenment were that we could look at nature as an endless source of wealth, basically, money. And we just use our reason to exploit it ad infinitum. And that was wrong. So that has to do with your money issue also, because knowledge is power and power is wealth. The other thing was that human psychology was a blank slate. If only we could just manipulate it enough, but we can’t. So now all we have is a huge chunk of our economy dedicated to stoking pleasure and fear, fantasies and phobias, at the basic, instinctual level. So does that make sense to you that all of this stuff has to come in within the context of these two monetary policies? Because what people really are underneath…anyway, just take whatever you want to. But I think all that stuff has to be taken into account.

Andrés Bernal: If I could also add a bit to Martha’s comments, a big part of what we do in policy debates through the MMT lens is engaging in matters over perceived ontological scarcity. While the way we’ve designed the system and monetary economy keeps exploiting and accumulating, the people that participate in it are operating under this village lens that, at any moment now, they’re not going to have enough. So if we invest into the immigrant community, if we provide healthcare for everybody, for those that fall outside of the conventional, patriarchal, white, middle class model, then they’re going to lose what they have. So it’s a zero-sum game of, how do I make sure my little village is accounted for and not the people that I see outside of that? Scott and Graham, I don’t know if you all want to touch a little bit on that as well?

Scott Ferguson: Graham, do you have thoughts?

Graham Hubbs: I was gonna say some things about Aristotle, in particular. They might be a little bit tangential. So Scott, if you want to pick up the thread, go for it.

Scott Ferguson: I thoroughly agree with the thrust of Martha’s comments. I would say I have quibbles with certain things I heard. But in the service of the overall sentiment, one is that, we in the MMT community, would insist that money is not equal to wealth. Those are not synonyms. Money is a governance project. And it’s also a care project that we could argue, right now, is careless and not working well. But it is a cultivation and generative care project, and it has to be politicized as such. So if we want to take care of our ecosystem, if we want to take care of the oceans, if we want to take care of our climate change catastrophe, then we need money. We need a lot of money. And we need to tap into our public capacities to not just create money, but to mobilize our imaginations and our skills and our capacities to change what’s going on. So I really want to get past the idea that money is just simply power–private power and private wealth–and to really shift the frame to say that, actually, it starts with the public, and it’s been privatized. So to not naturalize those things. The other thing I will say…

Martha Beck: It’s the material cause. The modern world emphasizes the efficient and the material, whereas the ancient world emphasizes the final and the formal. So to say it’s the material cause is to say it’s secondary, that’s all. Does that make sense?

Scott Ferguson: I guess, I would say that money, as a public utility, is irreducible to material and efficient cause.

Martha Beck: Okay, but it’s driven by values, or ontology.

Scott Ferguson: Of course.

Martha Beck: Yeah, that’s all I mean.

Scott Ferguson: Oh, no, no, same page. Absolutely. I think I’ll just stop there. I’ll let Graham respond.

Graham Hubbs: Yeah, invoking Aristotle on these issues, specifically, there’s a nice paper by Stefan Eich that points out two famous passages where Aristotle talks about money. It gets into the weeds of Aristotle on money. That’s what we’re talking about, and I think it’s interesting. In Politics Book I, Aristotle gives an account that sounds an awful lot like what I’ve called the catallactic theory, what’s commonly called a commodity theory. Oh, there’s trading and it’s inconvenient. Wouldn’t it be handy if there was some precious metal that everybody could use to trade properly. And what Stefan points out in that paper is that, in those passages, Aristotle’s using the term chrēmata to talk about money. But there’s another term for money in the Aristotelian corpus, which is nomisma. That’s the term that he uses in Nicomachean Ethics Book V, which is dead center of the discussion of justice. And there, money isn’t the same as, but it looks a lot more like, what the chartalists think money is. So in Aristotle himself, if we’re reading him carefully and are attuned to these differences in the Greek, and the first time I read Aristotle until I read Stefan’s paper, I was blind to that, because translators over the centuries in English washed it out just by calling both of those terms indistinguishably money, which really makes Nicomachean Ethics kind of mind bending to read on its own terms. The richness of some of these distinctions and debates is already present within the Aristotelian corpus itself.

Scott Ferguson: And if you understand Aristotle as having what I like to call a “nested ontology,” where any kind of micro-situation is embedded in a larger polis, I think these two are reconcilable in a chartalist way.

Martha Beck: The goal is for your mind to be a microcosm of the macrocosm. So the way in which you run your household and your economy is you meet necessary needs, not excess needs.

Andrés Bernal: Let’s move to Vasfi.

Vasfi O. Özen: Can you hear me now? Okay, great. I have a couple of questions for the presenters, and anyone should feel free to jump in. First of all, I find these presentations quite interesting. I have a question about the problem of inflation. So monetarists believe that just simply printing money would always, or most of the time, generate inflation. And I’m interested in, and you can correct me if I’m wrong, the MMT perspective. They suggest that the government can increase taxes anytime they think it’s appropriate to remove money. This brought to my mind, perhaps you’re familiar with the works of Silvio Gesell. Silvio Gesell was an economist and social activist. He wrote a book called The Natural Economic Order. I’ll introduce his ideas, and if you’re not familiar with him, I think you may find him interesting, because Scott told us that he is incorporating continental approaches. I just thought that he might be interesting and contribute to your project. So Gesell has the idea of a negative interest rate policy. He has this idea of free money reforms or free land reforms. And the free money reform of Gesell is to make it impossible for people to hoard money, because the face value of money is depreciated regularly. So money is losing value if you don’t spend it. So I’m just curious whether that kind of approach can be incorporated within the MMT perspective? That’s one question I have.

The second question is about COVID. So during the COVID period, I’m just curious what kind of implications the MMT perspective can have? Because we’re talking about stimulus checks. So I’m just curious about both Graham’s perspective on that and Scott’s perspective on that. I’m just curious what MMT implies during the COVID era. And the third question is about how Scott introduced the curious idea of money as a proto-aesthetic instrument. Without being too critical, because he told us that he wrote a book and I haven’t read that book, but this idea tends to be overly optimistic and loses sight of potential risks to me. I understand that money has all these creative potentials, but at the end of the day, it depends on how you are using the money, right? So I have a hard time understanding the idea of money as a proto-aesthetic instrument. Maybe you can elaborate on that a little bit? And for my last question, both presenters talk about the criticism that MMT is too socialist or too capitalist. It seems to me that MMT is a neutral perspective. So, and correct me if I’m mistaken about this, it seems to me that the money generated by adopting MMT policy can be used to spend on hospitals and infrastructure, as well as nuclear weapons, right? I mean, I might be absolutely wrong about that. I just wanted to have some clarification on it. But once again, this was really quite interesting. Thank you.

Graham Hubbs: Thanks, Vasfi. Can you put the name of that text in the chat? The Natural Economic Order? The author’s name, I didn’t know how to spell, so if you would type that in that would be great. I just have a few quick things to say. And then I’ll hand it off to Scott. I think one thing when looking at the COVID stimulus is an MMTer might say, “See, yeah, we told you.” This has always been possible, and put under conditions of the duress, we realize the potential to harness the power of money creation to try to help people survive. So that would be a quick straightforward thing to say about that. Something I’m going to echo that Scott said earlier is that MMT, at its base, is a descriptive project and not a normative project with the question of is it too capitalist, is it too socialist, etc. I think that MMTers would do themselves a bit of service to be a bit more careful about when they’ve got their descriptive hats on and when they’ve got their normative hats on, because many MMT folks are not merely interested in describing money creation and how macroeconomics works, but more in getting involved in the sort of stuff that Andrés does. So the fact that it all gets lumped together under one heading creates understandable confusion. But yeah, I don’t know if it’s Kelton who says it, but the US has MMT for the military. There’s always enough money to buy more bombs. I think that addresses that point.

On the point of interest rates, this is another one of those spots where you get internecine battles between post-Keynesians. So MMTers call for a 0% nominal rate of interest. John Smithin, who I mentioned earlier, who’s another one of these post-Keynesians, and who doesn’t go all the way with some of the MMT proposals, thinks that that’s necessarily going to create speculation, that we should be guided by the principles of Islamic banking that are anti-usurious, and that do not create conditions under which financial speculation is possible. But then, to achieve that, you need a real rate at 0% interest, and not a nominal rate. And the real rate is simply the nominal rate minus the rate of interest. Don’t let “real” and “natural” confuse you. Nobody believes that there’s a natural rate out there. But the real rate does take into consideration inflation. And if you set the real rate at 0%, then you achieve what MMT wants to achieve in blocking the speculative possibilities, whereas if you drop the nominal rate to 0%, we should all just be taking out as much money as possible and buying houses and stuff like that. So those are the debates within post-Keynesianism about those kinds of things.

Scott Ferguson: Thank you for the kind words and the thoughtful provocations. Yeah, I feel as though I have many things to say in response. Maybe just starting with a COVID response, there are actually active projects and proposals out there that my colleagues and I have been working on. Probably the most visible is Congresswoman Rashida Tlaib’s ABC, Automatic BOOST for Communities Act, which calls upon the Treasury to mint $2 trillion coins, and to do so as needed in order to provide all Americans, that means non-citizens as well, with $2,000. And then, I think it’s something like $1,000 a month until a year after the crisis. It also sneaks in a public banking function that would distribute cards and apps, and would suddenly bank every single person that could get their hands on this. And essentially, it would create the infrastructure for a massive federal public banking system. And then, along with that, in the Act, they’re calling upon various teams employed to go out in the community and make sure people are doing okay, and making sure they’re healthy and getting access to this financial infrastructure and the payments themselves, rather than routing them through other private situations. And employing people in a moment of under- or even mass unemployment. So a colleague of mine is behind that ABC Act. 

I am more directly involved in a proposal that hasn’t been put out by a politician, Congressperson, or anything like that, which would enable public universities in the United States to issue credit on behalf of the Fed. And our argument is that we have a financial system that is actually inefficient, unequal, and destructive given that it is through the private banking and financial sector. It is atrocious. As imperfect as the neoliberal University is, I would much rather empower those public systems to create credit, to finance themselves and community projects and research led investment in their communities in ways that are plugged into the needs of communities, rather than to keep giving legal licenses to private banks. So we’re working on that project as a kind of emergency measure to shore up the funding of public universities, which is going into the pooper right now. Although, things are changing because of the election.

Another thing I’ll say about it is, from the MMT world point of view, we would say that there’s this whole nonsense choice between opening up the economy and shutting down and experiencing recession or depression, which I call the Jaws meme. It’s the mayor from Jaws who has to decide whether he wants capitalism to keep going or he wants to protect the safety and health of the people visiting the beach. This is total nonsense. As they have in the UK and elsewhere, you can pay people and it’s their job to stay home. That’s one thing you can do and that’s still part of the economy. In the United States, we don’t have enough people who are trained to deliver vaccinations. Back in spring, we should have taken all the service workers who suddenly didn’t have jobs at Starbucks or wherever, and trained them to be part of this massive health and caretaking project. So the whole idea that you have to choose between employing people or economic production versus health and safety is absolutely nonsense.

I just want to say something about inflation. It’s important to note that inflation, as my very brilliant colleague, Nathan Tankus, would point out, is not a natural phenomenon that we just go out and look at with our eyes. It is a function of the way that we elect to record various processes and phenomena in our economic activity. So inflation is based on price indices, and these price indices have changed over time. And those choices of what goes in the price indices are political, and they matter. And they skew things. So we could talk about hyperinflation on Wall Street right now or for the last 40 years, but nobody talks about that. Nobody says there’s Weimar Germany on Wall Street, because our indicators are not set up to reveal that sort of thing. You could talk about hyperinflation in health care, in education, in almost everything but media, technology, and media consumption. Everything is hyperinflated over the last 40 years, at least in the United States, but nobody talks about it in that way.

So I would just say that, and also that printing money or creating money is not an exception, it’s the rule. It is not in excess of a natural system that is finding equilibrium in its own natural way. We are constantly printing money. This is what banks do. Every day, they issue credit to somebody. They don’t recycle money from one place to another. They have a license to create money. So I would say, Wall Street is printing way too much money. It’s Weimar hyperinflation. Let’s put away the wheelbarrows filled with digital money that are skewing all of our values, and start printing money toward productive communal and ecological purposes. I will say, I am happy to look at the Gesell argument. I’ve had vague encounters with that discourse. But I’d like to look at it more and I appreciate the nudge.

And lastly, with the proto-aesthetic, so here’s the thing, I’m coming from the left. The left throughout at least the modern Western world, as far as I can see, the dominant tendency has been to radicalize bourgeois ambivalence about money, which I think is already ill founded, and to turn it into Satan, to turn it into the worst technology ever and and to suggest that we cannot have justice, we cannot have collective caretaking as long as this medium mediates our political economy. So my move is not to say money is happy and rosy and always the best! Neat-o! Let’s treat it as a purely good, wonderful, rosy thing. No, no, no. I’m pushing hard in the other direction to remind us that it has these capacities to push back against all this Liberal, radical, Marxist, and anarchist ambivalence and rejection of money in order to open up money as a problem of collective cultivation, as a difficult problem. It is not all rosy.

What I would suggest is, if we want aesthetic production, we have to recognize the way that aesthetic production is financed in the first place, and radically change the way aesthetic production is financed. And also recognize that, I’m sitting here in my house in Tampa, Florida, and I’m having a sensory experience that involves this room, the fan whizzing around me. I’m talking to you all, mediated through this technology, and this is all a sensuous experience that has been variously conditioned by money. So it’s not rosy, but it is the ground that I would argue we need to start from.

Andrés Bernal: Thank you. So we’ve hit our time boundary. We’ve even gone a couple minutes over. So I want to thank everybody for participating with us here today. It was an absolute pleasure. Graham and Scott, thank you so much. If anybody else has any other comments or questions, please reach out to us. We’re on Twitter, or email us, anything like that. And the last thing I will say is, I have a special appreciation for philosophy as a discipline and philosophers as a philosophy undergrad. One of the major reasons I even gravitated to MMT was because of these questions that I was trained in during my philosophy education, which absolutely changed my life. So thank you all. We need to appreciate our philosophers more in this country and society. So with that said, thank you for coming here and keep it up.

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

Building Digital Commons with Cory Doctorow

Cory Doctorow joins Money on the Left to discuss what Modern Monetary Theory (MMT) means for building digital commons. Award-winning science fiction writer, prolific blogger, and long-time digital activist, Doctorow explains how MMT has shaped his ongoing work in the realms of digital rights management and anti-monopoly politics. He walks us through his important critical genealogy of Intellectual Property law as well as his contribution to the urgent anti-monopoly accord called the “Access to Knowledge Treaty.” Next, we get a quick preview of two new science fiction books he is completing, both of which engage MMT as a central component of their plots. Finally, Doctorow indulges our curiosity about his aesthetic practice of posting sundry pop and other ephemeral imagery to social media.

Theme music by Nahneen Kula (

Link to our Patreon:

Link to our GoFundMe: 


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

Scott Ferguson: Cory Doctorow, thanks for joining us on Money on the Left.

Cory Doctorow: It’s my pleasure. Thank you for having me.

Scott Ferguson: So you are a person of many talents that wears multiple hats. You’re a novelist, you’re an essayist, intellectual property critic, publisher, a treaty designer, and many more things. Maybe to begin, we can have you tell us about how all of these pieces of yourself fit together?

Cory Doctorow: Yeah, it’s kind of a circuitous journey. I’ve always been involved with computers. I tell people who ask me how to get involved in the industry that, if you don’t have the self discipline and foresight to be born in 1971, I can’t help you. We had a computer in the mid-70s that was a Teletype terminal connected to a mainframe. My dad was a computer scientist. Then, we had early PCs, like the Apple II Plus. They were all very legible. To make them do things, you would buy a magazine that had a program printed in it and you would type it in. And while the user experience leaves a lot to be designed, the German word is fingerspitzengefühl, the fingertip feeling you get for what the machine does, it just comes naturally, you get it for free. And so, we got modems, we got BBSs, we got early Internet, and all of that stuff kind of exposed me to the culture.

I grew up in a very political family. My dad was and is a Trotskyist organizer. It’s a very promethean kind of leftism. It’s not about back-to-the-land-ism or degrowth. It’s not about condemning every lord to live like a peasant. It’s about elevating every peasant to live like a lord. So those two things really intertwined. I also grew up in a great moment to be a “would-be” science fiction writer. Judith Merril, who was a leftist organizer herself, as well as a writer, critic, and editor, and who went into voluntary exile from the United States after the Chicago police riots in 1968, brought her and Frederick Pohl’s kids to Toronto, and was a colleague of my father’s. So I was first exposed to her as the host of Doctor Who on public television, where she would talk through the origins of these stories that underpinned the Doctor Who episodes. I would see her at demonstrations. She founded the largest public science fiction reference collection in the world, which was then called the Spaced Out Library. Later on, she let them name it after her. It’s now called the Merril Collection. She was a writer in residence, and in the early 80s when I was about nine or 10 years old, we took a school trip, and there she was. And she said, “Look, kids, if any of you write a manuscript, bring it to me, and I’ll give you feedback on it,” which is a remarkable thing to be a 10 year old who can solicit editorial feedback from like a legend. So there was that.

She was really quite a nexus. She convinced a guy to start what became the oldest science fiction bookstore in the world where writers worked and who mentored me when I was a kid. Then, when one of them, Tanya Huff, quit full time, I got her job and I worked there. We had a science fiction TV show that was part of her legacy, introducing Doctor Who on public television, that I consulted for. We had science fiction social gatherings, moveable feasts, that were descended from the Futurians, which was like a polyamorous writers commune in New York in the 40s. The Futurians were barred from attending the first Hugo Award banquets for being too leftist. They had this monthly spaghetti dinner that Judy imported to Toronto. So we had that and I got to know everyone. It was really as close to a formal apprenticeship as a writer as you could hope. 

As my writing career was taking off, so too was the dot-com bubble or, I guess, the early multimedia bubble, which became the dot-com bubble. So I was able to just kind of walk into jobs. I became a programmer for the Voyager Company. I then started an early gopher site development business, then a web development business, and then founded a company with some of the people I’d worked with and moved to Silicon Valley. Through that, I got involved with the Electronic Frontier Foundation, which is a human rights organization that works on digital issues. As the 2000 collapse was hitting, we got a buyout offer from Microsoft. Our venture capitalists, who had been pummeled by the crash, saw an opportunity to kind of make good. So they used some fancy accounting to basically steal all of the founder shares in the company, thinking that we would stay with it through the acquisition to get good jobs at Microsoft. I quit, instead. The acquisition fell through. I went to work for Electronic Frontier Foundation. I became their European director just as my first novel was coming out and spent the next several years on the road for them, quit for a bit to write full time, found that I couldn’t sit on the sidelines and watch both the peril and promise of technology be so badly neglected, and went back to work for them about six or seven years ago.

So over that time, when I’ve been with EFF, I’ve published twenty-some books and also lived in many countries and done a lot of work on treaties, standards, and other policy issues. Currently, my title is Special Advisor with the Electronic Frontier Foundation. I contract with them. And my work right now is primarily about interoperability, and specifically, a narrow but important and nearly forgotten interoperability we call “adversarial interoperability,” or “competitive compatibility,” which is when you make new things that are compatible with old things, even though the people who made the old things don’t want you to. That includes things like a third party ink for your printer, but it has lots of applications, like Apple making programs that can read and write Microsoft Office files. Or, early in Facebook’s history, they made programs that would fetch your waiting messages from Myspace and let you read them on Facebook so that you didn’t have to choose between the superior experience on Facebook and all of your friends still on Myspace. They’d radically lower those switching costs. And this is a big moment for it, because we’ve got five bills before Congress to curb big tech.

Part of the anti-monopoly work that’s emerging from that is the ACCESS Act, which imposes an interoperability burden on the largest firms. The European Union is contemplating something similar with the Digital Markets Act. There are proposals for this in the Competition and Markets Authority Reports in the United Kingdom. Australia has a comparable proposal. We are at this tipping point now where the kind of interoperability that was once absolutely commonplace and has been rendered extinct through monopolization might come back. And I hope it will be the wedge for a broader anti-monopoly movement, because it’s not just tech that’s monopolized. Every sector from beer to professional wrestling to eyeglasses to accountancy have been monopolized. So if we can fire up a kind of radical imagination of what pluralism and our economic affairs could look like, and really recover that ability to believe that Thatcher’s decree, “There is no alternative,” was wrong, and that there are, in fact, myriad ways to arrange human affairs, then we can build a coalition of people who love wrestling, beer or eyeglasses, or, who want an internet that isn’t just five giant websites filled with screenshots of text from the other four, and really actually mobilize a force comparable to the kind of political force that sat behind the New Deal, or other radical breaks with the economic orthodoxy, and the very stable equilibria that were so unfair that the New Deal actually collapsed.

Maxximilian Seijo: So you’ve just touched on it there in some terms. In recent years, you’ve become a defender and promoter of Modern Monetary Theory. We’re wondering if you could narrate how you stumbled upon MMT and how you would say MMT has come to inform your work more generally?

Cory Doctorow: Yeah, one of the things I didn’t talk about when I talked about my history is that I’m a blogger. I’ve been a blogger for a long time, longer than most people have been, more than 20 years now. I am one of the owners, and have been for 19 years, one of the editors of Boing Boing, which is one of the most successful blogs in the world. Blogging was part of my method for making sense of the world and its complex narratives. So as these things came over my transom articles, newsletter posts, books, and what have you, I would try to explain what made them seem interesting to me for an audience of notional strangers, as opposed to keeping a private commonplace book, which writers have done for hundreds of years. When you make your commonplace book public, you have to approach it with a rigor that you can get away with when you’re working just for yourself, which is why all the notes I make to myself are incomprehensible. Whereas, the notes that I make that other people have to be able to read, are really complete. And that’s like a powerfully mnemonic exercise as well. It kind of turns your subconscious into this like supersaturated solutions of fragments that periodically will kind of glom together and crystallize a real, new synthetic idea that becomes a long form piece.

In service to that, one of the sites that I read for many years was and is Naked Capitalism. Yves Smith, who composes their link dumps, was highlighting some of the work. I don’t know who it was, maybe it was Mosler or something, or maybe it was like The New Yorker who did a long form piece. But early on, as in the current wave of MMT, someone brought it up and talked about chartalism. Maybe it came about through “Mint the Coin.” It was somewhere in that era, the first kind of “Mint the Coin” era. It was one of those things where I was like, “Okay, here is a long form word piece,” it was in a 10-15,000 word range, “if I’m going to devote the hour to reading it, I’m going to devote the half hour to taking good notes.” And the process of doing that really made me start to rethink some of my own bedrock assumptions about tax justice and resource allocation.

I had been an inflation freter. I wouldn’t call myself an inflation hawk, but an inflation freter, after the GFC and quantitative easing. I was living in the United Kingdom and we had seen asset bubbles for a long time that had really just tormented people and distorted their ability to understand the world. It’s hard to overstate the extent to which British people are insane about housing. There is a complete lack of any sense of proportion or reality, not least because every British person who had the incredible brainstorm to buy a place to live in 1970 now thinks they’re Warren Buffett because it’s worth 2 million pounds. So all British policy is so badly distorted by asset bubbles. And you could see that QE was going to fuel the asset bubble. So I was like, “Okay, well, the asset bubble will continue to destroy people’s lives. And the asset bubble is, to a first approximation, indistinguishable from inflation, therefore, money creation leads to inflation and destroys people’s lives.” I just didn’t really have a better framework for understanding it. And with the intrinsic contradiction of a decade later there not being inflation and there still being an asset bubble, really, MMT was like that missing piece of the puzzle. It was the way to understand when spending is and isn’t inflationary.

One of the things that had always brought me to economics was talking to and listening to games economists. Yanis Varoufakis was working for Yves. Julian Dibbell and other people were writing these books about gold farming and its relationship to economics. You had these toy economies. And it was also part of a long trend that economists have always led, which is social scientists putting on big boy pants by adding numbers to what is an otherwise qualitative discipline, and then claiming to be physicists of human interaction and making up fake Nobel Prizes for themselves and so on. There was this intense vogue. I wrote a novel about game economics and trade unions called For the Win, a kid’s novel about economics and people forming unions using video games as a vanguard for physical world unions in China and making common cause around the world in something called The Industrial Workers of the World Wide Web. So all of this stuff had been really in my consciousness, but I had not really understood where money creation fit in. I just didn’t understand it.

And, in some ways, video games are the key to it, because video games do, in fact, spend money into existence and tax it out of existence. That is exactly what happens. And attempts to create equilibria in video games were catastrophic. It was EverQuest that had a thing where they tried to create a resource equilibrium, where every time you crafted a shirt out of wool, a sheep would disappear. Then, if you use the shirt long enough, it would disintegrate and a new sheep would appear somewhere in the world. And they never bargained on the possibility that there would be people whose self soothing behavior would be making, but never wearing, shirts. And that there was just a person who liked to unwind and would craft shirts and all the sheep disappeared from the world.

It’s an interesting story, because those shirts were not inflationary. Those shirts had been sequestered; they were not in the stream of commerce. They could have done sheep creation without regard to shirt creation and never had an inflationary moment. In fact, they have the telemetry to monitor productive and non-productive shirt production, and to do sheep creation in a way that is very managed that would be hard to imagine on a macro scale in our economy, and they couldn’t figure it out. So it really tells you, if you do try to run a balanced budget, if you try to run a balance sheet shirt budget, you just end up with some weirdo shack full of shirts and a global sheep shortage, which is a real parable.

William Saas: Talking about gaming is actually an interesting segue to our next question. In addition to writing and thinking about Modern Monetary Theory, you’ve also been a very vocal critic of intellectual property and not just a critique of IP as IP, but of the idea of intellectual property itself. Can you give us a sense of your read on the history of IP and why it’s so problematic?

Cory Doctorow: Well, the term IP is itself like a little microcosm of where it all started and where it all went. The origin of this stuff, depending on where you start, is in things like royal patents, where the king would give favored courtiers a sinecure by allowing them to control production of some physical good or process. So you have the silver ribbon patent. Anyone who makes silver ribbon has to give you some money. And you can tell them whether or not they’re allowed to make it. You have the right to exclude, the right to authorize, and you can extract or rent. You have copyright and its origins in a trade war between the English and Scottish publishers. You had the publishers who were called, “stationers,” creating a system of exclusive rights, not for authors, but for investors. So once you secured a manuscript from an author and published it, you could exclude other publishers. Again, it was a part of a national industrial warfare between England and Scotland. The framers of the US Constitution were very much alive to the problems of this kind of exclusive right and what it could do in terms of both encouraging and discouraging different forms of creativity, innovation and productivity gains. They tried to craft a system that would, in the words of the Constitution, encourage the useful arts and sciences by allowing Congress, if it decided to, to create monopolies of limited duration over inventions and literary works.

It’s interesting, because I think it’s the only thing in the constitution that’s optional. Everything else is a shall and this is a may. Like if you identify a problem, if you have a shortfall in production, you can create a monopoly to do it, but you don’t have to. So the implication is you shouldn’t unless there’s a reason. It’s specifically not a moral right, because the framers, again, only twice in the constitution ever tell you why they created a policy. The Second Amendment says you’re allowed to carry a gun to make a well-regulated militia. It’s not just because guns are cool or because you want to hunt or whatever. You can have a gun for this purpose and this purpose alone. The only guaranteed right to have a gun is to be part of a well-regulated militia. And copyright and patents exist to promote the useful arts and sciences, not because everyone deserves to be paid for their work, not because, if we didn’t do it, people wouldn’t make stuff. It’s only when you can show that the policy framework will promote the useful arts and sciences that you’ll get it.

So historically, we call these rights, “monopolies.” We said there are author’s monopolies, industrial monopolies, or government monopolies. And monopolies are an uncomfortable thing to lay claim to. If you’re an industrial entity and you want a policy change, going to Congress and saying, “I find my monopoly is not expansive enough, can you expand it for me,” makes you look like an asshole. So the term that was first proposed in the 1930s, but slumbered for 40 years to replace monopoly, was intellectual property. Given that private property is the state religion of the United States, that just describing something as property gives it a halo of sacredness, it removes the rationale for its creation. It becomes a truth that is self-evident. Safeguarding property is a thing that we do because it is a truth that is self-evident.

My friend Steven Brust, who’s a Trotskyist fantasy writer, says that the way that you can tell if someone’s on the right or the left is you ask them what’s more important, human rights or property rights. And if they say property rights are a human right, they are on the right. That’s the line on which the right and the left cleave. It is the difference between a leftist and liberal. If property rights are there to accomplish some policy goal, but can be modified or eliminated in realms where they don’t accomplish that goal, then you’re a leftist. If property rights are there, because they are sacred and intrinsic, or if you’re a Lockean and you think that somewhere out there was a terra nullius, that some distant ancestor of yours mixed with their sweat and turned into a thing that they could own through the transitive property of owning their bodies, and thus their labor, then you are not on the left.

So the term intellectual property came into widespread use by an international lobbying organization in the 1970s, called the World Intellectual Property Organization. It was a consortium of different industries that lobbied world governments for more expansive copyrights and patents. They became a UN specialized agency. They really started to deliberately blend the differing kinds of rights that we had called monopolies into a single kind of incoherent category called IP. So they asserted an intrinsic equivalence between trademark, copyright, patent, trade secrecy, and sui generis rights, like database rights. They said they’re all just like species of the same thing, which is a really sharp rhetorical move, because the underlying framework for all of these is actually really, really different. Like trademark, for example, is nothing like copyright and patent. The whole basis for trademark, both in common law and in statute, is to protect consumers.

So the idea is that if you buy a can of Pepsi, and it turns out to be full of Coke, you have been wronged, but you as the consumer lack the resources to punish the person who mislabeled their product. So trademark allows Pepsi to act on your behalf to stop confusion in the marketplace. Trademark, historically, has only applied to commercial activity, and only when you can show that there was real or unavoidable confusion in the marketplace on the part of a consumer. It wouldn’t matter if a trademark abuse bankrupted the company that had the trademark. That was irrelevant to trademark. If no one was ever confused, if your can said, “Better than Pepsi,” and people read it, and we’re like, “I’ve always wanted something better than Pepsi,” and they bought it and they were like, “Goddamn, this is better than Pepsi,” and they never bought another Pepsi again, then trademark has nothing to say about it. This is completely unlike copyright and completely unlike patent. Patent was about trading disclosure for exclusive rights. So tell people how your machine works and we will stop them from cloning it. But you have to accept a penalty that now they know how the machine works and they can be inspired by it to make an equivalent machine, a compatible machine, or an add-on to your machine. So you trade transparency for an exclusive right that the state will enforce on your behalf.

Again, that’s nothing like trademark, which is, again, nothing like copyright, which is the ability to assert an exclusive right over expressions, but not ideas. So it’s the opposite of patent. Patents are our ideas, copyrights are expressions. So you can have Captain Marvel and Captain Wonder. You can have Edgar Allen Poe inventing the mystery story with Murders in the Rue Morgue, and the idea of the mystery story being in no way exclusive to him, such that we can now have an entire genre of mystery stories that owe nothing to Poe or his estate, and never have to seek his permission. Again, it is nothing like patent. Fair use and other limitations and exceptions apply to copyright. They don’t apply to patent. Trademarks and nominative exceptions, where you can refer to something by name and where it only matters if it’s in the stream of commerce, those things are not features of copyright. So they’re all very different.

The free software movement was born at the moment in which all of this stuff was being applied for the first time to software, where you had the first assertions of copyright over software and the first assertions of patent over software. The free software movement and its progeny, like the free-culture movement, the Creative Commons, and so on, historically, they’ve been very hostile to the term IP, and they’ve treated it as a rhetorical trick. It’s like calling being anti-abortion pro-life. If you concede the term that it is property, that it’s a coherent category, you’ve already lost the battle. Something that I came to last summer, I had a kind of lightbulb moment, where I realized that they’re wrong. There is a very precise industrial meaning of intellectual property. It carries over across all uses of it in commerce. IP is any rule that allows an industrial actor to control the conduct of their competitors, critics and customers, like if you can stop a competitor from making an interoperable product, or if you can stop a security researcher from auditing your product and describing its failings. 

Goldman Sachs made a free font called Goldman Sans. It’s free, they don’t need a copyright to stop you from using it. They don’t want to stop you from using it. But the copyright allows them to attach a license condition and the license condition includes a non-disparagement clause. So you can’t use Goldman Sans to make fun of Goldman Sachs. You can control your critics, you can control your competitors, and then you can reach into your customers home and control your customer. So you can use copyright law to stop someone from refilling their ink cartridge or from adding third party software to their iPhone without paying Apple a share of the revenues. That example is a really interesting one about how the industrial meaning of IP is much closer than the formal reading of copyright law, because if copyright law is there to promote the useful arts and sciences, it’s hard to understand how, if I write some software, and I’m the copyright proprietor, I’m the owner of it to use property talk, and you own an iPhone–again, this is not metaphorical ownership, it’s your distraction rectangle that belongs to you–and then I want to sell you my software and you want to pay me money for my software, which is my copyrighted property that I want to sell to you, and we can’t do it without Apple blessing the transaction, then that is the opposite of what copyright is supposed to do. Because, it is allowing an intermediary to rent-seek, condition, and structure a market for creative work without being a party to the creative work.

They didn’t make the creative work. They didn’t make my software. And you own your phone. Their title to it has been exhausted through the transfer. It’s what’s called the exhaustion doctrine, or when you transfer a copyrighted work to a third party. If I sell you a book, then I don’t get to tell you you’re not allowed to read the last chapter first and find out who did it. That’s your book, it belongs to you. You can do the voices when you read it as a bedtime story to your kids, or not. It’s yours, you can prop up a table leg with it, you can stick it in your little free library, you can start a fire with it. So with that exhaustion doctrine, by overlapping patents, copyrights, neighboring rights, trademarks, and so on, Apple is able to wrap the iPhone in layers of IP that allow them to control their customers, their critics, and their competitors such that the notion of property becomes the exclusive purview of like transhuman, artificial colony organisms called limited liability companies. And natural persons can no longer ever assert the kind of property right that people who claim to support intellectual property say intellectual property is a kind of. The intellectual property therefore extinguishes property as we understand it, and creates this thicket of property rights that are almost exclusively corporate, that trump all other property rights.

Scott Ferguson: Maybe to bring this to the present and to kind of circle back to some themes we were talking about earlier, the present moment feels pivotal in many, many ways, and there’s been a lot of debate across the spectrum, but especially on the left, about to what extent the neoliberal paradigm is in crisis, or is no longer tacitly, fully accepted by the discourse and the powers that be. And we could talk about this all day, but how this overlaps with IP politics is the recent and rather surprising announcement by the Biden administration that they were going to support a waiver for IP protections for COVID vaccines, essentially, pushing back on what I think a lot of us on the left worldwide are concerned about, which is vaccine apartheid. And you’ve thought a lot about this as it’s unfolding. Can you kind of unpack this and tell us a little bit about what’s going on?

Cory Doctorow: Yeah, I mean, it is seismic. I have friends and colleagues who have not been involved in the kind of WTO, WIPO land, who have looked at the Biden administration’s statement, which is admittedly hedged. It’s not a strong statement. It’s like we won’t oppose it, we’ll engage in productive dialogue, and blah, blah, blah. It’s not like vaccines for everybody. But I would have bet that the US trade representative would be a judge on Rue Paul’s drag race before the USTR would make a statement like this. I cannot express just how extraordinary, in the formal sense, and unprecedented this is in the USTR’s history. I worked on this treaty called the Access to Knowledge Treaty with James Love from Knowledge Ecology International. Jamie is the architect of the Access to Medicines Treaty, which was the treaty that tried to expand the WTO pharmaceutical waivers, specifically around AIDS drugs, but other drugs as well. And Access to Knowledge was a very broad treaty that narrowed into something called the Marrakesh VIP Treaty, which is a treaty to harmonize exceptions to copyright to protect people with disabilities.

So most countries have some form of copyright exception to allow the preparation of assistive versions of copyrighted work, like Braille books without a publisher being involved, or without paying a royalty or seeking permission. It’s very expensive. If you think about producing audio editions of books, you’ve got to get volunteer readers to read long books and it’s very expensive. The engineering is intensive and so on. And there’s no cross border reciprocity, so Canada can’t produce a read aloud version of a book with the Canadian National Institute for the Blind and then share it with people who are visually impaired in the United States. More importantly, France can’t do this and share it with Rwanda. Cote d’Ivoire can’t do it and share it with Martinique. In places where they’re really resource constrained, where having a disability is already a huge burden, and where there’s very little infrastructure, this is just a no brainer. Because, this is the thing that everyone already has the right to do. It benefits people who are already disadvantaged. There’s no conceivable basis for saying fuck blind people without sounding like a complete asshole and yet that was the US trade representative’s position on the Treaty of Marrakesh.

The Association of American Publishers, all of the big rights holder organizations, all this stuff you heard them saying about the vaccine waivers, they said about the Marrakesh Treaty. Why should people with no arms be allowed to get an audio edition of a book? They could hold a pointer between their teeth and turn the pages. These are just absolutely indefensible statements that were totally par for the course when that came up. So it is remarkable for the Biden administration to have a USTR whose response to anything in the universe of a vaccine waiver is not like, “Kill it with fire, nuke it from orbit,” and is instead saying, “Oh, that sounds reasonable, let’s talk.” There is a reason that pharma freaked the fuck out when that statement came out. It’s like being the favorite kid whose ugly stepsister always has to clean up the fireplace great. And one day, the ugly stepsister says, “I don’t want to clean the fireplace great.” And your mother says, “Hmm, maybe we should have a chore rota.” It’s not that the chore rota will ever make you clean the fireplace great, but just the idea that there would be a chore rota is so shocking and outside of the norm.

So I have some hope for it. It’s also, as a humanitarian matter, indefensible that we would stop these countries from making their own vaccines. I think there is a form of really toxic racism embedded in the idea that brown people are too primitive to make their own vaccines, especially given that the world’s largest vaccine factories are in the global south. And the only even remotely credible argument about why we shouldn’t allow vaccine production to be parallelized into the global south, is that the inputs for vaccine production are limited. Not limited in total scope, but we can only dig them up out of the ground so quickly, or refine them so quickly. And if that’s true, then what we’re really saying is that brown people should have to wait until all the non-brown people have been vaccinated before they can get the inputs. We’re not saying that they can’t do it. We’re not saying that they shouldn’t do it. We’re not saying that it’s a good idea. We’re just saying that we will have fewer vaccine inputs to stick in our arms if we let brown people make vaccines. So as a humanitarian matter, as an ethical matter, it’s indefensible.

As an epidemiological matter, it’s indefensible. Because, when you have a virus, you reproduce the virus. It gets reproduced millions and billions of times, and each one of those reproductive acts has a small chance of a transcoding error–we call that a mutation. Most of those mutations are irrelevant, in that some of them make it more benign, while some of them make it more harmful. Some of the ones that make it more harmful also make it able to bypass vaccines. So given long enough, the chance that we will get a variant that is vaccine resistant and more dangerous, goes up and up. And there’s this weird story that apologists for vaccine apartheid tell, which is that pathogens are gentled over time, that a pathogen that kills its host quickly, or that limits its hosts ability to move around and infect other hosts, will not spread as fast as a variant that it is more symbiotic with–it’s gentler. And that is true over long timescales for most viruses. But the mechanism by which more virulent viruses are extinguished in favor of gentler cousins of theirs, is that everybody who gets the more virulent version dies. That is not a good pathway. 

I’ve spoken to some molecular geneticists on Twitter who seem to know what they’re talking about, who say, “Well, we can actually look at the problem space of all the possible mutations of this kind of Coronavirus and say that many of the mutations are likely to make a gentler and not more harsh, but not all of them.” We can just say that, probabilistically over time, we know that Coronavirus’s generally get less virulent. But that doesn’t happen every time. It’s not deterministic, it’s stochastic. And in the meantime, there are viruses like rabies that have been with us since time immemorial that have never become gentler. They have only become more virulent and more dangerous, and for which we have very few effective treatments. So it’s such a crazy bet for us to say, “Well, we’ll just let 2.5 billion people in the 125 poorest countries get vaccinated in 2024,” which is the current timeline. And we’ll just hope that we don’t roll like three snake eyes in a row, that we don’t end up with a variant that just burns through the rest of the world and that is more toxic.

And leaving aside if those nations collapse as a result of ongoing pathogenic spread. Another thing that also happens when you have out of control pathogenic spread is that states collapse. Then, those countries become everyone else’s problem anyway. We get refugee crises, civil war, proxy war, and we get outbreaks of other kinds of diseases, like cholera. There are all kinds of problems, and again, this is leaving aside that humanitarian tragedy of like dooming 2.5 billion people. Even if you’re like, “Well screw those people, they should have emerged from a different orifice if they didn’t want to be doomed to vaccine apartheid. Be born in America if you want to be at the front of the line, dum-dum,” even if you think that, it’s still bad for America. So to see the Biden Administration step up and not embrace this nonsense that has been the orthodoxy for decades, is friggin’ wild. It really does give me a lot of hope.

Maxximilian Seijo: I really appreciate the moral indignation of your response and all the passion. As we move to the latter parts of this interview, we wanted to ask, since you are a science fiction writer, a little birdie told us that you’ve written two forthcoming novels that integrate MMT into their narratives. And so, without spoiling anything, of course, can you preview what you’re up to in those books, how you’ve constructed them, and perhaps also how MMT has changed your writing process, style, and perhaps raised new challenges for you as a writer of literary fiction?

Cory Doctorow: Yeah, so I’ve written a fair whack of post-capitalist fiction with the idea that it’s harder to imagine the end of capitalism than the end of the human race in mind. I think that’s wildly oversold. It’s actually pretty easy to imagine a post-capitalist society, it’s just hard to imagine the transition. That’s the tough part. Kim Stanley Robinson’s Ministry for the Future really takes a hard crack at it. But as I wrote in my review, Stan flinches away from the violent part of the rupture. It is there. He talks about things like every commercial aircraft being felled by terrorist drones in one fell swoop. Although it is this very impressionistic novel that jumps around point of view characters all the time like a documentary, none of the point of view characters are people on the airplanes or someone who’s the surviving family member who lost a loved one on those airplanes. I know Stan, and he is a wonderful, gentle, compassionate, and brilliant person. I think it pains him to think that the transition will involve that kind of suffering and he didn’t want to glorify it. I don’t think that he put it in there to glorify it or to justify it, but rather to say that this is the kind of thing that desperate people might do.

I wrote a post-capitalist novel that is inspired by Kim Stanley Robinson, and that’s an MMT novel. So it’s a book called The Lost Cause. And it’s set in Burbank where I live now. It’s about truth and reconciliation with white nationalist militias after a Green New Deal that reorients humanity’s productive capacity to creating resilience for climate change. So it’s an optimistic novel, or a hopeful novel, not in the sense that it hand waves away climate change, or assumes that we can do things like somehow neutralize all of the thermal energy we’ve sunk into the Earth’s oceans. The second law of thermodynamics isn’t going to go away. An optimistic novel about climate change is a novel, at this point, about confronting sea level rises, not about halting them. I think that’s just where we’re at. Maybe heroic efforts will retain some of our caps, but if you heat up the ocean, then the caps will melt. And you can’t cool down the ocean. It’s very hard to cool down the deep ocean. It’s just a thermodynamic process that runs its course as it does. The physics of the dispersal of heat through water is well understood.

So in that world, where they have finally said we are going to confront this and do something about it, like relocate every coastal city 20 kilometers inland, they are able to mobilize their productive resources through MMT. For example, one of the things they realize they have to do is use a lot of prefabricated construction material that’s low carbon. They are able to build factories in the desert that only switch on when there’s more solar in the grid than the grid can absorb. The factories use solar centering to make low clinker, zero carbon prefab concrete slabs that can be used to build a variety of structures that are thermally efficient, seismically sound, and so on. And they are able to coordinate their productive labor around surges and falls in free energy when the wind is blowing, when the sun is shining, and so on. So it’s like a cooperative, nontoxic gig economy, where everyone gets surged into productive work when there’s more energy than we can absorb. But then, everyone gets time off when it’s not happening.

I wrote a short story called “Making Hay” that’s set in this world that just came out in an MIT tech review anthology called Make Shift. It’s the idea that you make hay when the sun shines, that we have a long history as a species of orienting our production seasonally and moment to moment around what’s available. It was the efficiencies that arose out of coordinated production that eliminated our ability to suit our production to local environmental factors. If you’re an artisan making a door and the weather is nice, you can work outside painting. And if it rains, you can go inside and sand. But if you’re on an assembly line and you’re not feeling it, and you wander off to count butterflies, the line grinds to a halt. Now, assembly lines allowed us to increase productivity by a huge amount. They brought material comfort to us. And digital technology allows us to marry the two to create a kind of individualized, self-determining work style that is, nevertheless, productive in the way that those highly coordinated systems are. The Soviets tried to rotate weekends around where everyone got a different weekend. It was a problem, not because people didn’t want to have different days off depending on production schedules, but because you wanted to have time off at the same time as the people you loved so that you could all do stuff together. It’s that coordination that networks are really good at.

We went to Disneyland yesterday and ran into friends who saw us because we posted photos to social media, and they got in touch with us and we were able to get together for dinner. That’s the kind of thing that you couldn’t have done a couple of decades ago, where you would have had to have a much more regimented approach to having this type of social engagement. When I was a teenager, if I wanted to go to a movie on a Friday night and I was downtown, I would get change for a dollar, put a quarter in a payphone, call my friend’s mother, say, “If he calls, please tell him that Cory is downtown and thinking about going to a movie and leave a message if he wants to go.” Then, I would call back in an hour and I would find out whether he called and then maybe we would meet up at the movie theater. We are now able to have a fluid and improvisational style that allows for much more self-determination. And yet, so much of what we do uses digital technology to regiment us instead of to allow us to kind of be loose and fluid.

The best of it are things like Wikipedia, where no one has to direct the labor, but we can all collaborate. I can come in at one in the morning and edit your article and you can come back three months later and challenge my edits. And someone in between who’s never met either of us can correct some punctuation in the middle. That loose coordination allows for really high productivity work without surrendering your personal determination. So that first novel is all about how you can have things like a job guarantee that allow for that kind of improvisation and unstructured, self-determining work that, nevertheless, does the urgent productive labor of saving our planet and our species, and allows us to have leisure when leisure is demanded. Turning on the factory to build the climate changing, or climate remediating, technologies when you’re competing for energy with the air conditioning that keeps people from dying, because it’s a 34 degrees centigrade and 80% humidity wet bulb temperature where you will die if you’re outdoors, that doesn’t save the planet. Doing nothing saves the planet if you do it at the moments when nothing can be done without taking energy at the margin from more important things. So it’s about that. It’s about digital networks, self-determination, and those automatic stabilizers that are embedded in MMT.

The other novel is a real old fashioned noir detective novel called, Red Team Blues, about a forensic accountant and it’s his last adventure. So I’ve never written on these other adventures, but it is his last adventure after decades in Silicon Valley. His origin story is that he was part of an early cohort of spreadsheet users and they bifurcated into people who figured out how to use spreadsheets to hide money and people who figured out how to use spreadsheets to find it. And he’s always been on the red team. He’s always been the attacker trying to find the money that other people were squirreling away illegally. And it’s a Bitcoin caper. It’s about him finding some cryptographic keys that are in contention between two different criminal gangs. One is an ex-Soviet gang from Azerbaijan, and the other one is the Los Zetas cartel from Mexico, who have stolen some cryptographic keys that allow them to manipulate cryptographically secured ledgers, or blockchains, to do money laundering.

His best friend, an economist, is a woman who teaches at UMKC, and whom he met at a forensic accounting conference. The whole thing is sort of shot through with MMT and with the idea that starving the economy of government money just produces income generating bank money for rich people, that every great fortune hides a great crime, and that accounting, and not economics, is how you understand where money comes from and where it’s going. And economics is just a way of training a generation of court sorcerers who can assure you that the king’s plan has divine backing and is provident.

William Saas: Those sound tremendous and we can’t wait to get our hands on them. We want to close out in a really fun way by asking you to talk about mood boards. So some of us have noticed that on your social media feeds you post old ephemera sometimes, and somebody asked you, what is this about? And you said that it was for your mood board. Can you talk to us about what these are and how you assemble them and what they do?

Cory Doctorow: So I think a lot of us subscribe to a social media feed or two that are just images, whether it’s Instagram, Tumblr or whatever. You look at it and it gives you a little jolt of pleasure to see something aesthetically pleasing. But understanding it, or building up a coherent picture of it, or, particularly, if we’re talking about images that have cultural specificity, either to a certain moment or a certain school or aesthetic way of representing the world, I think requires that you do more than look at them. And for me, I find all of these on Tumblr. For me, the act of copying it from Tumblr and pasting it into a Twitter tweet composition window, then copying the title and the URL, and just handling it, it’s like picking up a thing and putting it back down on the shelf. And the moment in which you hold it, it fixes it mnemonically in your mind. And so, it’s just a high touch way of getting that aesthetic experience.

Scott Ferguson: That’s great. Well, we enjoy them, so keep it up.

Cory Doctorow: Thank you, I enjoy them, too. It’s a lovely way to experience the world. And it’s part of this probabilistic way of reading the web, which is a recurring motif in the history of digital communities. When I was first on bulletin board systems, you could read every message that every other member posted to a public forum. Eventually, they grew, they got multiple phone lines, and you had to pick a forum. Then, maybe you would skim the forum, because you would know that the interesting stuff would turn into an argument or a discussion and you could go back and read the thread. Then, Usenet came along and it was the same thing. I could read every Usenet feed that was on my local feed. So you could effectively read the whole internet every day. It went through the same probabilistic process. Then, when the web came along, you had Jerry Yang’s yet another hierarchical obstreperous Oracle, or Yahoo!, where he would post every new website that was created every day, and you could look at every new website on the web.

Then, eventually, you had to rely on signal boosting. The way that you would find the stuff that was interesting is that someone else would repost it in some way. It wasn’t retweeting, but it was like embedding a link to it, writing about it, thinking about it, or quoting it. All of that stuff gave you another bite at the apple, and it made it less important for you to deterministically handle everything, to find all the useful things, and instead created a distributed, implicit collaboration, where we would all big-up the stuff that gave us some intense feeling. And the process of that bigging-up would ensure that it was more likely that the stuff that you needed to see would cross your transom.

Scott Ferguson: Well, Cory Doctorow, this has been a really rich and informative conversation. Thanks so much for joining us on Money on the Left.

Cory Doctorow: Well, thank you very much. I really enjoyed it as well. Leftists don’t talk about money enough.

William Saas: We agree.

Cory Doctorow: Read leftist fantasy novels. Read Stephen Brust. You can always tell when a Trotskyist is writing fantasy, because the ratio of lords to vassals is right. Brust has novels where a character will just walk through fields filled with 1000s of laboring peasants for a whole chapter, just like one after another after another after another just to reach the Lord’s castle. It’s like, “Oh, yeah, this is what it is.”

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

Digital Money Beyond Blockchain with Rohan Grey

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’re joined by Rohan Grey (@rohangrey), President of the Modern Money Network, Director of the National Jobs for All Coalition, Research Fellow at the Global Institute for Sustainable Prosperity, and JSD student at Cornell Law school.

Our conversation is dedicated to Rohan’s current work on the political, economic, and cultural implications of money’s digital future.

Rohan’s report on digital fiat money: “The Case for Digital Legal Tender: The Macroeconomic Policy Implications of Digital Fiat Currency.”

Theme music by Hillbilly Motobike.

Link to our Patreon:

Link to our GoFundMe: 


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

Maxximilian Seijo: Alright, so Rohan, you’ve always got multiple irons in the fire, but today we’ve invited you to speak with us about digital money, and specifically why it matters for the left. To get the ball rolling, can you sketch a picture of the current state of digital money for our listeners? What types of technologies are out there? Who are the major players in this world? What kinds of arguments are they making about the future? And what is politically, economically or even culturally at stake? In other words, why should the future of digital money be a central concern for leftist praxis?

Rohan Grey: Yeah, sure. The first thing to note is that there have been proposals for digital private money going back decades. I think David Chaum in the early 1980s was arguably one of the first to put together a technical proposal. There was a burst of energy around the idea in the early 1990s when the internet was first becoming big in a mainstream sense. It fizzled out for various reasons, some technical, some political, and some just based on decisions people made. It was revitalized after the 2008 crisis, in part, because of the crisis, and in part, because of a white paper by a pseudonymous author named Satoshi Nakamoto, who wrote a paper about this blockchain technology that was supposed to solve a technical issue in cryptography, called the “Byzantine Generals Problem” about how to maintain a consensus between non-trusting entities around a common ledger, or a common set of data. That paper led to Bitcoin and a surge of interest from technologists, investors, bankers, anarchists, and members of the public and media. 

So you had this software revolution. At the same time, you had this hardware revolution in the global south, in places like Kenya, because of the rise of cell phones, where suddenly you didn’t need a single bank or banking system to process all the transactions in the community. You could have every person essentially communicate with each other over the cellphone network and their phones would do the job of managing ledgers and processing. So if you had distributed mobile phone technology in the 1700s, perhaps you wouldn’t have seen the rise of private banks at all to do that kind of centralized or intermediary transaction processing. But because a lot of those countries in the global south didn’t have a particularly developed banking system, these mobile money technologies were able to fill the gap to an extent. So you had a hardware and software revolution going on in different places. And people started to take seriously the idea that digital money’s time has come.

A lot of people, of course, were just driven by profit motives and dollar signs in their eyes. Unfortunately, the capitalist movers are often the quickest off the bat when it comes to new technology. But if you think of the existing monetary and financial banking landscape as being shaped, in part, by the material structure and limits of the money technology itself–coins in one era, paper money in another era, and different forms of legal accounting, like double entry accounting and things–these technologies of money and finance shape the economic structure of the economy. And if you think about the way that digital technology worked, or communications technology, before we had the internet–we had phones, fax machines, paper pages, Morse code, cell phones, desktops, etc–now, you have this one general purpose computer in your pocket connected to a general purpose data network. All of these various functions are being done through this single, common general infrastructure. You can think of this moment in history as a moment where powers and different seemingly distinct monetary and financial processes are collapsing into mere variations of a single digital thing. That’s a pretty transformational moment in terms of technology of money.

Unfortunately, a lot of people working in this space have a poor understanding of money as a social, political, and legal phenomenon beyond the technical aspects of transactions and payments. They studied orthodox economics, Austrian economics, or are libertarians. As a result, a lot of their energy and attention has been misplaced. It’s that saying, “If you don’t know where you’re going, you’ll probably end up somewhere else.” So they thought that the theory of money was easy and it was just the theory of technology that was hard. Whereas, in reality, both are hard and you need to understand both. So you had technologists and cryptologists, who’d think of it as a technical problem, you had anarchists, who saw the importance of digital money as a way of preventing the surveillance and totalitarian control that the internet has a potential for. So if you think about governments shutting down banks or other things in Egypt, or Iran, or cutting off donations to WikiLeaks and things, eventually, governments and regulators stepped in. First of all, it was just about how you regulate this private activity, or how you allow private innovation, blah, blah, blah, how you set up regulatory sandboxes so people can experiment. But over time, and particularly in the last couple of years, there’s been a rise of a growing appreciation amongst policymakers and central bankers that public digital currency is as necessary as merely private ones.

It went from “This is a nice idea that’ll never happen,” going back to James Tobin and things decades ago, to, “Well, this might happen in the future but it’s a long way off,” to, “This is happening right now, what are we going to do about it?” The reason why it is relevant for leftists, to a big degree, is that, at the moment, this conversation is dominated by technocrats, by capitalists, by technologists who don’t necessarily have the best leftist politics, even if they consider themselves progressive. At the central banking level, these are people with degrees in macroeconomics or modeling statistics and math who are making pronouncements about the future of economic privacy and civil liberties. They’re not consulting the ACLU and they’re not consulting the public. They’re just making these decisions as a footnote in a paper that’s otherwise full of mathematical models. And so, you have debates over private currencies, private databases, private transactional platforms–that’s your Bitcoin blockchain world. You have debates over anonymous, censorship resistant, or central node resistant technology–that’s your crypto community. And then, you have people looking at things like central bank digital cash, central bank cryptocurrency, and things like that. That’s where my interest is mostly.

Because, I think that’s where you really need to be thinking about the politics of this in terms of global public policy implications. A lot of that conversation is over giving people the equivalent of a public bank account–an account at the central bank, a postal bank, or something like that of a public bank. I’m more interested in trying to create the digital equivalent of cash, because I think it’s important to be able to have transactions that can go ahead even without the pre-approval of some central regulator. Once the cash is in existence, like notes in your pocket, you and I can transact with those notes and the paper notes themselves are not going to call the police. The police can monitor your activity if they have a search warrant or something, or even if they don’t, but it’s not like the money itself is spying on you and reporting you to the cops. I think it’s important to have that kind of technology. I was actually at a conference at the St. Louis Fed a few weeks ago on cryptocurrencies and blockchain. I talked to a well respected economist there who wrote a paper on privacy, anonymity, and money, and he was talking about it in the context of avoiding scam marketers who follow you around after a purchase if they could see you making that purchase.

I said to him, “Surely, the whole totalitarian, fascist threat is a bigger issue.” And he said, “Well, yes, but that’s too big an issue for economists, because someone can always just make a big argument on the other side. So you have to find something small that people can grasp and start from there.” I found this to be both illuminating and depressing. So to go to the question about the stakes of the debate, or the contour lines of the debate, I think there’s a question of how much of this new technology or infrastructure is going to be perceived as a public good, or as a private market good. And within the private space, how much is going to be perceived as the domain of banking and finance–banking technology versus a financial extension of IT. So it’s about whether this is going to be Goldman Sachs and Citibank or it’s going to be Apple and Google. And then, within the public side, there’s a debate about whether this is exclusively just a technical upgrade to existing central banking operations, or whether it’s part of a broader digitalization of government finances in the vein of Estonia’s e-governance model. In terms of the technical, as I mentioned a second ago, there’s a debate over having accounts with an intermediary versus having what’s legally called a bearer instrument, where you own a digital wallet and any of the files in that wallet belong to you as a bearer.

And then, of course, from a leftist point of view, there’s the global, geopolitical and imperial considerations of these technologies. So you’re seeing Russia developing a CryptoRuble, Venezuela developing Petro that’s tied to the oil reserves in the country, the European Union talking about the need for a new global payment settlement system independent of the US dominated SWIFT system, because the US is using that control over the payment system to strong arm other countries into supporting its sanctions on Iran. In terms of why leftists should care, in addition to just the political stakes here, I think, firstly, we should never let a crisis go to waste. Digital technology is uprooting existing ways of doing things, which is creating new forms of instability. It’s changing power relations between different actors, empowering new kinds of workers, and new models of organizing. Things that were solid are melting into air, things that are fixed and frozen aren’t so much anymore. At the same time, there are new fracture lines emerging within private capital. Different actors are scrambling for dominance or beating each other to see who’s going to be at the top of the new mode of monetary technological production. And we can exploit those fracture lines, I think, to an extent.

Of course, all this is happening against the backdrop of the collapse and reorganization of global finance in the wake of 2008. If you think about the political moment in 1945, or the political moment in 1971, and the way that those decisions about the shape of international finance shaped global political economic dynamics for decades after, I think we’re in a moment like that. The last point on this is a more abstract idea, but I think of this as like the digitalization of certain kinds of analog politics. And what I mean about that is, if you think about the way that sound production works, there’s a difference between analog and digital sound recordings. Analog recordings record a smooth curve of different frequencies, whereas digital recordings have a series of slices of zeros and ones. Now, if you have it at a small enough scale, or a big enough scale, those digital sounds can sound very good and you can make extremely complicated shapes out of them. But, at the core of that technology, you’re moving from a smooth gradient to a zero or one binary. I think of that in terms of certain political questions today. It’s the kind of classic historical tension between freedom and privacy, on one hand, and some security and control, on the other.

For a lot of history, when it comes to money, there’s been an unsteady compromise where physical cash can be used to facilitate crime, tax avoidance, child pornography, rings, terrorism, etc. But on the other hand, it allows people to engage in transactions without needing the approval of their local banker or government, etc. And that’s been politically valuable. The way that we’ve maintained law and order in those situations is we put legal restrictions on top of the mining technology so it had search warrants, we put tracking devices on wads of cash, we try to monitor serial numbers when they come back to banks and put limits on undeclared interstate transportation of cash. At the same time, there were physical limits on cash itself. There’s only so many briefcases that you can carry, there’s only so many slabs of newly printed notes you can put in a plane hangar. There’s only certain things you can buy with cash versus other forms of money today. But now you can fast forward to a world where your digital wallet can hold a trillion dollars just as easily as it can hold ten dollars, and where all transactions don’t distinguish between cash, debit card, wire transfer, etc.

At the same time, it’s a world where any security compromise, any backdoor into that wallet of yours, means a total security compromise. The minute the NSA and all get to see everything, suddenly, all of those tensions, all of those 50% compromises, don’t really work so well. And you’re forced into a sharper dichotomy. Do we let private transactions exist and risk the permanent shift in favor of privacy against security and control? Or do we eliminate that entirely and have a world where all transactions are under the eye of the panopticon? Do we think the NSA and the Chinese Communist Party surveillance is a bigger risk than kiddie porn networks and the Taliban? To me, this is a socialism or barbarism moment, technologically speaking. And it’s an important moment that shouldn’t be decided without some leftist intervention.

Scott Ferguson: Thinking broadly, systemically, and politically, how would you say that your specifically legal MMT intervention really challenges the arguments and paradigms that are out there? What are you doing that’s challenging the field of digital money as it is? And more importantly, what kinds of collective transformations do you think this makes imaginable?

Rohan Grey: Yeah, so let me just give a little bit of background as to what I’m actually doing. I started off writing a research paper on mobile money that then put me in touch with some people at the USAID’s mobile money team. They put me in touch with a group of people who are working on a form of central bank digital cash technology, who are also quite involved with the United Nations telecom regulator agency called the ITU, the International Telecommunications Union. They read my white paper and when we met, they said, “Look, we’ve got the technology that we think works to do what you’re talking about,” which is, essentially, digital government cash. And once you have cash, you can create accounts on top. If you imagine a bank with a safety deposit box, you can put cash in the safety deposit box. And as long as that bank can be given permission to take cash out of your safety deposit box and put it into someone else’s, then even though the technology is cash, you can create the equivalent of accounts. So the cash technology is the fundamental layer as far as I see it. The bearer instrument technology, I should say.

So they said to me, ‘We’ve got the technology. We’ve done successful trials, but when we go to speak to central bankers, ironically, they get the technology but they’re concerned about the economic implications.” So they asked me to write a white paper for them on the economic implications, or macroeconomic implications, of digital fiat currency. From there, I got involved with the International Telecommunications Union. Now, I’m helping draft their regulatory standards for central bank digital currency, or government digital currency, around the world. The way law is important here is, first of all, I see a lot of MMT analysis as essentially, or implicitly, legally informed, which is one of the reasons why I was so drawn to it. Understanding money as a creature of public authority, and as something that manifests in legal design, as people like Christine Desan who you’ve had on this podcast earlier talked about, is important. So thinking about things legally is a good way of getting to the relevant technical layer of the system. Second of all, it allows you to cut through a lot of the theoretical bullshit that you’ve seen in economics.

Point to me the statute, point to me the accounting provisions, point to me the banking charter and the legal rules that limit what that bank can do, etc. It’s about being able to frame things in a language that isn’t just a subjective, economic language, but a language of law that still has ideological content to it and still has the potential for political disagreement. It’s a different kind of fight than if these conversations are taking place purely in the language of economics. You’ve got heterodox schools of thought and the orthodox schools. They can barely speak to each other. Whereas, when you go to law school, even if you have people who are extremely different politically, they can still walk into the same courtroom and engage in the same legal processes. And that kind of common language that’s tied directly to the empirical reality of how these institutions are working is valuable.

The other part of it is that legal structures can be designed in different ways to achieve similar outcomes. There’s a great historian of the common law–I forget his name–but he sort of said that the history of common law is that, if one idea doesn’t give you the outcome you want, then you just use another one. So if contract law doesn’t give you the outcome you want, then you use property law, tort law, or something else. And you can create the same phenomenon of say, a contract through the language of property with a slightly different window dressing. And so, by being able to separate the form from the substance, but also understanding how important the form is to the substance, it allows you to be pretty creative with the way that you design things, and the way that you redesign things to illuminate different aspects of the system, or to open up new possibilities and things.

So we’re going to do more work on that. I’m interested in helping social movements and things have their ideas being sufficiently granular and legally robust, even as I work on the inside with these policymakers and things. But ultimately, even when I was at the ITU conference that we helped organize at Cornell Tech a few months ago, one of the central bankers from Brazil, who is sort of the head of the Bank for International Settlements group that works on digital money–the Committee for Market Payment and Infrastructure (CPMI)–said, “Well, I’ve been working on developing a taxonomy of digital fiat currency, but I’m not a lawyer. It’s really great that we finally have a lawyer here who can help with this stuff.” Because, ultimately, this is going to be written into law. It’s gonna be written into policy documents and things. So at the end of the day, the lawyers are going to be called in eventually. We might as well get there pretty quickly.

William Saas: So your project, as we understand it, is to design a digital fiat currency system that radically restructures finance around public and environmental interests and severely contrasts, or in Keynes’s words, euthanizes the private rentier banking system. But before we get too deep into those weeds, would you mind giving our listeners a brief introduction to the present structure and perverse workings of the private, for-profit banking system?

Rohan Grey: Yeah, I mean, how much time do you have? My advisors at Cornell, where I’m doing my legal PhD at the moment, Robert Hockett and Saule Omarova, have written a very good piece that goes into this in a fair bit of detail called, “The Finance Franchise.” Essentially, their argument is that the commercial banking system, with all of these chartered banks, when they make loans, they don’t just take the money of people who’ve deposited money at that bank and lend that money out. You give me $100, I lend $50 to Billy, blah, blah, blah. Actually, what happens is they extend credit, and they get support from the central bank, which in turn is backed by the rest of the government. And in doing so, they’re creating new purchasing power and new forms of bank deposits that function with money and properties. So in that sense, they’re essentially engaging in fiscal activity. They’re extending the full faith and credit of the government to new forms of investment, new forms of spending, in ways that are, in theory, in accordance with a kind of public purpose, or a public-private partnership model. And you have a whole range of macroprudential regulations and microprudential regulations about the kinds of loans that banks should be able to issue and the purposes for those loans, etc.

Of course, once you go beyond the commercial banking layer, you also have the kind of broader shadow banking, or shadow money system, which, in part, relies on the commercial banking system, and, in part, relies on the ability to use collateral, including government Treasury securities or other forms of safe collateral, and turn that collateral into money through legal contractual arrangements called repurchase agreements with either dealers or the central bank. My friend, Daniella Gabor, has written a lot on the way that this creates this whole shadow money system underneath the regular public money and franchised commercial banking system. So both of those layers are what I would call franchise money, which is explicitly channeling the full faith and credit of the government, and these forms of shadow money, which are trying to give the impression through various forms of legal technology and business arrangements that they are as safe as, or somehow connected to or backed by, public money. You essentially have a world where, as Hyman Minsky said, “Anyone can create money, the challenge is to get it accepted.” And various forms of financial institutions have worked out various ways of getting their money, or their liabilities, accepted as money more broadly.

The last way I think it’s useful to think about the existing banking system is that, in many ways, it serves a social function as a payment system, both at the retail level–you and I do most of our transactions through a bank account, not through cash or not through any other financial platform–and also, at the wholesale level, where you have these large institutional investors with hundreds of billions of dollars in a pension fund, a hedge fund, or something, storing their money in very, very liquid forms of financial assets, like Treasury securities or money market fund shares that are supposed to function similar to a bank account. One of the reasons why they don’t just use bank accounts is because of the legal limits on deposit insurance. So I have a friend who was in the Treasury department at Goldman Sachs, the people responsible for keeping the cash flow alive at Goldman Sachs. And I said to him, “Most of the time you’re keeping your ‘cash’ in three month Treasury securities, or T-bills, right?” He said, “Yeah, of course. That’s what the money markets do. We keep our money in T-bills. When we talk about cash, we talk about T-bills.” And I said, “And you can’t keep it in a bank account, because you have limits on how safe that money is above a $250,000 cap. He said yes. I said, “If you didn’t have a cap, if there was unlimited deposit insurance, would you need to be doing all this stuff with T-bills?” He said, “No, we would just keep it all in a bank account.”

So the entire structure of the payment system is also a function of the way that we set up these rules for the banking system and money. To use that Minsky line again, “Anyone can create money, the challenge is to get it accepted,” if money is a credit instrument, then anyone that will accept a credit instrument of someone else as acceptable payment is engaging in a monetary activity. So you need to think of the payments infrastructure and the payments ecology as intrinsically connected to the monetary system, which means intrinsically connected to public finance, but also intrinsically connected to banking.

William Saas: So then, how can a new digital fiat currency transform money creation, finance, banking, and so on?

Rohan Grey: Yeah, so the first thing is I don’t think that the technology itself necessarily changes the underlying political potential to transform money creation, finance, etc. It was always there. What it does is change the balance of power and change the viability of certain strategies. So firstly, I think it simplifies and clarifies the way that the public financial and banking systems work. Just to give an example about that, right now, we finance government deficits by issuing Treasury securities, usually into a private market, or places like Canada have had the central bank buy that directly in the past. The private actors buy up these Treasury securities with money that central banks have injected into the banking system. And then, once those securities are held by those private actors, the central bank then intervenes, again, to buy up as many of those Treasury securities as it feels necessary to make sure that the overall supply of liquid reserves, or settlement balances, stays roughly the way it was before the whole process began. So even though what looks like governments are “borrowing” from private actors or private actors are “buying” government debt, really what’s happening is the central bank is monetizing or funding the government deficit indirectly through those private bond auction participants. As long as those bond auction participants know that they could turn around and sell those Treasury securities directly to the central bank the next day, or four to five minutes later for a profit, they’re always going to stand in the middle of that trade, because they get a free profit. 

So the creation of digital fiat currency allows us to revisit a conversation of why do we do it like that. Why don’t we just allow central governments to issue a currency, a digital version of a platinum coin or something, and finance the deficit directly like that. And if we want to create some other kind of instrument that functions the way that a Treasury security does in the financial markets for collateral purposes or anything else, we can do that as well. But we don’t have to keep the system the way it is right now. And we can be more clear about what these processes are actually doing today, even if they might have done something very different at the time that they were first instigated. So, of course, if you’re under a gold standard or a fixed exchange rate regime, then Treasury debt does serve a very different function to cash itself. Treasury debt is a claim on cash, which is backed by gold, but Treasury debt itself isn’t backed by gold. Whereas today, in the modern time, that distinction is largely non-existence. In addition to making the system more simple and more clear, it can also make explicit the underlying political claims or dynamics at play.

So as I was talking about before, as my advisors Bob and Saule talk about, if you think of banks as franchised entities of the sovereign, then every time a bank extends its own liabilities, creates new bank deposits when they make a loan, what the Bank of England calls “fountain pen money,” because the minute you approve a loan with your pen, the money comes into existence, there’s no reason for that instrument to look and function differently than the government money that’s been created. There’s no reason to have bank deposits and government money be two different kinds of instruments when bank deposits are backed by the government anyway. It’s sort of like, why have a private army wear its own uniform when it’s serving the sovereign, rather than just putting them in the same uniform that everyone else is wearing and be very clear about the fact that these actors are engaging under public authority. It’s useful if you want to give the impression that black water activities are not the government’s activities so that you can distance yourself from them optically, but my argument, I think, is that that’s not actually very useful for public policymaking or for the way that the public understands these systems.

The other thing is it allows you to go back to the very foundation of these structures. I was a classical musician before I went to law school, and if you’re studying to be a world level pianist or something and you go to a new, top level teacher after being a prodigy in a small town or something, often what happens in those situations is they break your technique down to its most basic elements and rebuild you. At that time, it feels very disruptive and violent. You sort of feel like you’re an infant again for a while. But the reason they do that is because you may have learned some bad technique along the way that needs to be excised before you can build the strongest foundation possible, which usually the world class teachers have. And so, when we have an existing financial system that in many ways is the product of generations of historical sediment–legal, political, and technical–what new forms of disruptive technology allow us to do is to break all of that down and rebuild it again without the weight of that history being the dominant, guiding light. The last thing that it can do, and this is actually, I would say, something slightly, technically new, so maybe I’m going against what I said earlier, is that it can separate out different functions that, until now, for some technical reasons, were very hard to separate out.

So if you imagine the 1860s, you have a bunch of national banks around the US–very limited digital technology at that point–and all of these banks are doing various forms of payment processing. Now, even if these national banks are extending the full faith and credit of the government, because their banknotes are backed by government securities or something, it would still be a lot more difficult for each of those banks to call up the mint in Washington DC and get them to send out coins or government paper notes every time they make a new loan. In that context, unless you wanted to deputize every single bank to be its own mint, it would be technically difficult to collapse the banking payments layer with the public payments layer. First, just because it’s physically a long way away. And that is something that digital technology has the potential to allow us to revisit.

Actually, if you go to the common law of bank deposits, it goes back to the 13 or 1400s. Benjamin Geva has got a great chapter in Money in the Western Legal Tradition by Wolfgang Ernst and David Fox on this topic. The law of deposits emerged because of the technical challenges with carrying large bags of gold on behalf of account holders, essentially. These gold money changers, or goldsmiths, would have different people’s bags of gold that they would take in a horse and cart or something. It was very difficult to keep track of them all. It was a lot easier, technically, at that point to have a general claim against the goldsmith, or the money transmitter, and then to let them pull all of those various funds into a single pot and carry that pot around. If you did really care about your money, if it was sentimentally valuable or was a certain kind of Spanish doubloon or something you wanted to keep, you would seal the bag. The sealed bags would be kept separate from the general funds that were being transported. And that was actually a point of divergence in the law. On one hand, the common funds became the law of deposits. Anyone that gave money to that money transmitter had a general contractual claim against them. If you had a sealed bag, you owned the stuff in the sealed bag. That was the law of bailment, or the law of debt.

Today, the law of bailment or debt plays a very small role in most financial intermediation. It’s primarily a law of deposits. But with the form of digital cash technology, you could have an intermediary, as I was saying before, essentially managing your wallet for you, or managing a safety deposit box equivalent for you, and it would be possible to resume or return to that other legal tradition of bailment where the individual retains ownership over the phones even as there was an intermediary managing their wallet. That allows us to separate out the payments processing aspects of banking from the credit creation, or credit extension, aspects. And it’s not that it couldn’t have been done beforehand in an analog world, but it becomes exponentially easier and more viable with the technology we have and are developing today.

Maximilian Seijo: To those ends, it’s interesting, we neochartalists typically insist upon money’s fundamentally centralized and public character in order to put pressure on hegemonic views that see money as a form of decentralized exchange. But importantly, and what you’ve been alluding to with your last comments, you stress that monetary design should always provision certain forms of relatively decentralized, or even private, money use. Can you explain why this is politically and socially important, and how it might work in terms of the digital technology that you’re describing?

Rohan Grey: Yeah, sure. I just want to start with a caveat or note here. One reason this is a challenging topic, or that it sounds a bit counterintuitive from a left point of view that I do talk about these things, is because a lot of leftists, myself included, are not necessarily naturally technologically adept, or technologically inclined. We criticize surveillance state politics and organise anti-corporate campaigns from platforms on Twitter, Facebook, and Gmail not because we necessarily think that’s good praxis, but because the technological hurdle of switching to other more free, or politically consistent forms of technology that align with our values, is difficult, unless you’re a coder or programmer. So we’ve been predisposed to downplay the risks and scope of technological politics. I think this is the way that Boots Riley talked about his recent movie, Sorry to Bother You. When you feel paralyzed by the inability to act, it’s easier just to pretend the problem isn’t as bad as it is and to learn to accept the problem is inevitable. And for a while, I was one of those people. If I’m not doing anything wrong, why do I care? Surely, the best that we can do is to just trust in this thing, these government systems, to do the best job for us. If everything’s gonna go to hell in a handbasket, there’s nothing I can do about it. There’s nothing any of us can do about it other than just try as hard as we can.

But a law professor of mine at Columbia, Eben Moglen, who is a longtime technology and privacy advocate, said something that stuck with me. He said, “Privacy isn’t an individual or private thing. It’s a public, ecological issue. It doesn’t matter if you don’t give your social security number out to anybody. If they have every other person who was born in Boston that year, you’re just the other person left. You’re the other guy. So every time you send an email via Gmail, you’re not only placing yourself under surveillance, you’re placing everyone you send that email to under surveillance. So you can’t really leave privacy to a matter of individual, neoliberal politics of the self. It really needs to be considered a social and public phenomenon.” Two other things stuck with me. One was that the way historically–he’s a legal historian, by the way–totalitarian regimes and empires have typically fallen, is that the empire or the regime over exerts itself, either materially, in its attempts to control the populace, or more ideologically, in that eventually the people on the wall, they refuse to shoot the protesters or the people going over the wall.

But in a world of perfect technological surveillance, and of data mined dreams where the government knows you’re a political risk before you might know you’re going to be a political risk because of the way that you were browsing certain websites, or the way that your learning profile at the age of five matches the learning profile of other radicals or something, the cost of total surveillance and control drops dramatically. And then, when you have drones who won’t hesitate to shoot anyone who comes over the wall–they don’t have a conscience–suddenly, the biological or social circuit breakers against persistent totalitarianism don’t work as well anymore. So the last thing he said to me–it really got me, his family were Holocaust survivors–he said, “Next time they come for my family of Jews in Eastern Europe, they’re going to get every single one. Because they’ve got a list now of everybody. Everybody knows where they are at all times because they’re carrying a little computer in their pocket that sends a GPS signal directly to a central database that they can monitor and track.”

So that’s kind of when the gravity of the privacy issue hit me. And then, when I walked into these debates about cash, you have people like Ken Rogoff, who when he was not busy making spreadsheets that justified austerity for a generation, writing books called The Curse of Cash, because he says it facilitates crime and, most importantly for him, it makes it hard for central bankers to maintain the myth that monetary policy and interest rates can manage the entire economy on their own without any fiscal intervention. The classic monetary theory of the Zero Lower Bound is that you can’t drop interest rates below zero, or too much below zero, because everyone will just move their money into cash and store it under their mattress. Now, if we could get rid of cash, he dreams and salivates, then we could have negative interest rates, which would stimulate investment and we’ll never have a situation where we need to rely on fiscal policy, because interest rate management has run out. I’ve written about that in a paper called “Do Negative Interest Rates Live up to the Hype.” I think it’s actually incoherent on its own front, but either way, the central bankers who are desperate to preserve the relevance of themselves are willing to throw anonymous cash under the bus in that process.

And what we’re seeing is the central bankers behind closed doors are having debates about whether we really need privacy or anonymity in cash at all. And they’re mostly concluding that we don’t. This bank of Sweden is one of the few exceptions on that front. But as I said, these are not people who are trained in civil liberties or legal and political science. These are people who’ve got degrees in mostly mathematical modeling. To use their own favorite line, they’re just not technically qualified to comment on the privacy implications of what they’re talking about. And so, I think it’s really important that people who do care about these issues address them. On one hand, Sarah Jeong has talked about the idea of financial transactions as a form of free speech, or a form of political expression, because we’re leftist or materialist enough that we acknowledge that ideas have to have a material form in some way. So with campaign donations and other things, you can’t organize politically without resources. And if all resource transfers require the approval of a central regulator, then it’s gonna be very hard to do things that are potentially quite disruptive to that regulator. One person’s anti-terrorist law is another person’s anti-freedom fighter law.

In addition to political action, you also have things like socially stigmatized activities, like the war on drugs and sex work criminalization. There are fascist things like the Trump administration under Kris Kobach proposing to “fund” Trump’s wall by taxing cross border remittances of immigrant workers from Mexico who are coming up to work on farms and things, and to use control over those cross border payment networks to potentially disrupt what is currently about a $17 billion industry, which would be more than enough to pay for a chunk of the wall, or at least to force Mexico to come to the negotiating table on that. So transactional freedom has a lot of different dimensions of political freedom inherent or intertwined with it. And it’s not the same as being a right wing free speech advocate or saying we should allow corporations to funnel millions of dollars in dark money to political candidates, or to have people create dummy corporations in the Cayman Islands or something. There are going to be crude thinkers who are going to conflate those two different conceptions of monetary privacy as a form of free speech privacy, as a form of political privacy, but in my view, they’re fundamentally different. And it’s important that the left doesn’t abandon that issue to the right wing.

In terms of how I see this working technologically, I’m not an infosec guy, but the way that I think of this as a metaphor is, rather than transacting with other people digitally, rather than having an account where my money flows from my account to your account, what we are creating is a kind of common wallet network layer or protocol, kind of like the TCP/IP protocol, the internet, or the email protocol. Every time you and I want to transact, we take our wallet that has the equivalent of a digital version of a paper note, where, however much our wallet has, just has that number written in the corner of that note. So I’ve got a digital note worth $87.50, and you’ve got one worth $45 or something, and when we want to transact, we go to the wallet network. We say, “I’d like you to rip up my note and rip up this other note, and then give us two other notes back that are worth the same amount overall, but have different relative values.” What I mean by that is, if I have $50, and you have $10, and I want to give you $20 so we both have $30, it would be like we both go up in balaclavas to a robot and we say to that robot, “Destroy this $50 note, destroy this $10 note, and give us back two $30 notes.” The robot doesn’t need to know who we are, doesn’t need to know which one of us is giving the $50 and the $10, and it doesn’t even actually need to know that it’s $50 and $10 going into $30 and $30. Technically speaking, all it needs to know is that $50 plus $10 on one side equals $30 plus $30 on the other.

If you imagine an envelope, and it can weigh the two envelopes in its hand, as long as the two weigh the same amount, it doesn’t actually need to know how much is in there, it just needs to know they weigh exactly the same amount. So technically speaking, what you’re looking for here is a way for monetary transactions to take place between two entities where the transactional network is ensuring there’s no counterfeiting, there’s no double spending, and there’s not someone taking the same $10 bill and spending it in two places at once. But beyond that, the only people who know anything about the transaction are the two people transacting themselves. And that is, to me, the essence of what physical cash allows us to do today.

The government can still control how much cash is out there. You can still see what barcodes are on the notes when you try to deposit them in a bank or use them to pay taxes or something. But if you and I both happen to have some cash, and we want to meet somewhere in a public square, and we’re wearing a balaclava because it hasn’t been criminalized yet in that state, we can go do that and make a transaction like people do in the fish markets where they transact with these long robes and put their hands into each other’s robe so that nobody can see exactly how much transacting is going on, so that nobody else knows the prices people are paying. You could do that kind of anonymized transaction, technically. That’s the political goal that I’m working towards as a matter of privacy and economic freedom.

Maxximilian Seijo: What’s so brilliant about what you’ve done is you’ve taken the previously calcified relations of how people see abstract mediation or governance, like Kafka or even Foucault, where there’s a potential for the medium of itself to be viewed as inherently totalitarian, as inherently abridging freedoms of the actors who participate in it’s shadow. And what you’ve done is you’ve kind of proved and shown how one could design a system that’s inherently abstract, and mediates abstractly, but still preserves the freedom and privacy that formerly could only seem to be happening in supposedly real or immediate interactions.

Rohan Grey: Yeah, and I think the critical thing to note here, and this is why I’m involved in the MMT project more generally, is that this only works if you have an underlying theory of the public nature of money itself, right? We’re talking about cash as an instrument. But that doesn’t work unless there is actually cash circulating in the economy at a reasonable amount that people can have access to. So this is a sort of “microeconomic,” dare I say that word, kind of issue in the sense that it isn’t presupposing, one way or the other, how the money gets injected into the system, whose hands it ends up in, how much starts off in those hands, or what can it be used to purchase things, etc. Those are questions of politics and socialization. This is just pointing out that, at the point at which we have that foundation, transactional privacy is in itself a political and social good. This is something that, again, there are certain leftists who romanticize a sort of pre-industrial or pre-developed complex civilizational view of small towns or hunter gatherer societies where everything is based on kin relationships, or based on personal relationships, as the kind of vision for the future of optimal social interaction.

My view on that, which is probably influenced by being a city kid, is I think that’s quite oppressive in many ways. If you’re a weird, queer, alternative kid in a small town, and everybody knows your shit all the time, that’s extremely unpleasant. And for those kinds of people, the big city, however grinding and crushing it is from a kind of industrial point of view, from an identity point of view, is extremely liberating. That anonymity, that ability to walk outside and blend into a crowd, has a protective aspect to it, both from the local cop or lynch mob, but also from your own family. There’s a reason why in the US people go to college to find themselves. We don’t do that in Australia. And dare I say it, I don’t know how many people find themselves as much in Australia as a result of that. So yeah, I think that’s exactly right. And it’s critical to keep both layers in your head at the same time, even if they may feel like they’re in tension–between this inherently political nature of money and that inherently abstract way that it gets used in certain individualized interactions.

Scott Ferguson: Will you spell out for our listeners, then, the difference between this anonymous e-cash that’s connected to a digital fiat currency, and the vision of the future that is being spelled out by crypto enthusiasts and Bitcoin lovers?

Rohan Grey: Yeah, definitely. This is a critical point. And to be clear, I have a lot of respect for a lot of the motivations of people who are in that space. Not all of them, obviously. But a lot of people are there because they care about privacy, because they’re fundamentally anti-totalitarian and anti-fascist. I think a lot of them are victims of bad economics education, or simply are not yet sufficiently monetarily informed to realize, in many ways, they’re barking up the wrong tree. Because the legal view that I have is that economies and markets are ultimately legally constructed down to the base. You have to own property to sell it, you have to be able to have contracts that can be enforced for transactions to have some sort of enduring stability. And in that sense, the alternative to a government is a mafia that enforces black market transactions, or set of gangs and things, which is just another way of saying government but with slightly less accountability. And so, people who are trying to imagine money without the state, to me that is sort of like trying to imagine law without a form of public authority. It’s a sort of misnomer to me. So, on one hand, some of the technology that comes out of those attempts can be very useful and really adoptable in other public contexts that are valuable.

But my argument would be that it’s actually public cash backed by a democratic macroeconomic vision. That is the best way to preserve individual liberties, rather than trying to sidestep the state entirely on the money layer, even as you’re ultimately going to rely on the state to keep the property titles of the goods that you want to trade. There could be some anarchists and others out there in the Bitcoin space that would love a world where they hire private armies to defend their wallet from a house robber or something. But I think most people who think that we could have a “non-governmental money” as the dominant monetary regime do so without fully thinking about how the government’s still going to be all up in the rest of economic and commercial regulation anyway. And the MMT analysis that looks at money as public money, as starting as a tax credit, and that looks at forms of private money as contractual relationships, those things are inherently also tied to the enforcement of private commercial behavior. If you have a contractual dispute and the judge issues an order of damages, that’s a form of debt, that’s a form almost like an individualized tax. And I’ve said elsewhere, the story of taxes driving the value of public money that MMT talks about, you don’t even need a head tax or a land tax or something. You could even do it with just the threat of legal sanction. You drive down the street and there’s a risk that you hit someone with your car, and if you do so, they’ll sue you and you’ll have to pay them money and whatever the court says you have to pay that person gains a sort of public moneyness in whatever the legal tender is for the settlement of that dispute.

So I don’t think you can have an economy that isn’t grounded in public law. And as a result of that, I don’t think you can have money that serves the functions that the public monetary system does today that isn’t grounded in public law. And because a lot of these private actors don’t see that, they start from the wrong foundation and they end up not getting to where they think they’re going to get, which is why you see things like Matt Gaetz ultimately go under and have all these legal disputes. Or there is the famous case of the decentralized administrative organization that ended up suffering huge amounts of fraud and getting embroiled in legal conflicts and things. Mervyn King had a great line, the former Bank of England governor, that “Banks are global in life and national in death,” which is a way of saying, when the times are going good, cowboys like to think that they don’t need anybody else. And when the shit hits the fan, suddenly, they’re in need of a community again. So I’m not really interested in being a cowboy when it comes to this design stuff. I’m interested in starting from the community framework and moving from there.

William Saas: It seems like there are a lot of potential futures of money running in parallel to each other. I want to ask you, as we close up here, what do you think it’s going to take to realize the kind of transformation you are envisioning for the future of money that you’ve got in mind? Could you tell us a little bit about what the obstacles are as you see them and what we can and should be doing to overcome them? And maybe even what humanities scholars can do to help?

Rohan Grey: Yeah, I guess a global revolution is probably where I’d start.

William Saas: How’s next week for you?

Rohan Grey: I’m sort of being mildly facetious, but not really. I mean, the work that I do with the IT world right now is, in part, a defensive stock guard, in the sense that there’s no way in hell that the Chinese Communist Party, or even the NSA, is going to take the recommendations of the UN as the the end point of their own geopolitical decisions about how surveilled a currency should be. Other countries may: Sweden, and Canada may even. But imperial power certainly isn’t going to be considering that. That said, in the same way we think about the TCP/IP standards, if the technical standards can be kept open, that is to say, if the technical standards allow for a form of anonymous digital cash, and we build this global technical layer that is harmonized across different countries, even if the way that the Chinese Communist Party, or the US government, chooses to manifest that in their own jurisdictions by adding a surveilled layer on top, then as long as that underlying kernel or structure is able to be open there’s at least the possibility of it being undone in the future, or the global infrastructure is not being poisoned by those interests. So I don’t think that the UN is the space in which that political fight is going to be won. I think it might be the space in which we can keep that fight alive. I think this fight is only going to be won when social movements, leftists around the world, and others who care about freedom, totalitarian concerns, economic justice, and distributional and inequity issues, work together to put political pressure and bring attention to these issues.

And they’re going to be hard. It’s not going to be easy. Someone like Brett Scott, a friend of mine who’s written on the war on cash, he’s shouted the alarms as well as any. He is an excellent communicator. But it’s a hard one to bring to people’s attention. So we need to make sure that leftists, as they’re building their programs and vision of the future, that they have this as a layer of concern. That means connecting the economic justice folks with the technological justice folks. It means thinking about empire at the same time as we think about domestic justice, and thinking about technical and legal standards and design at the same time as we think about red blood politics and distributional questions. It also means not being blasé about the scope of this challenge. It’s worth remembering that, in the 1990s, public key encryption software, which is a complicated mathematical way of creating some of these large numbers as a resulted of the multiplication of other prime numbers that’s hard to break cryptographically and forms the basis of a lot of secure communications on the internet, was considered a form of military munitions. And the first person who shared an open source version of public key encryption software was charged with violating the Arms Export Control Act–a guy called Phil Zimmerman.

So I have some sympathy for people who claim that Satoshi Nakamoto is staying offline because he could have really pissed off some governments by starting this whole debate, or by kicking it up a notch. If we’re going to get close to something that’s really meaningfully challenging, in the total surveillance division of both the NSA and the Chinese Communist Party, it’s gonna piss some really powerful people off. We need to be ready for that fight. We need to have all of our allies ready to support us in that fight. I think academics can try to bring attention to this issue and to make sure that they don’t downplay it or consider it as someone else’s problem. This was what my professor at law school really beat into my head. This isn’t someone else’s problem. This isn’t something I have a right to dismiss simply because I’m not technologically sophisticated enough yet to really understand the whole thing. This is a matter of good praxis and good research, as with everything else–and everything else when it comes to understanding and learning our responsibilities as politically informed and engaged people.

Scott Ferguson: But what about culture and aesthetics and the kinds of things that we like to think about in the humanities? How does that figure into these questions you’re raising about the future of digital money?

Rohan Grey: Yeah, great question. One person whose ideas have influenced me a lot in recent years, in addition to MMT and other lawyers, is Viviana Zelizer, a sociologist at Princeton, who wrote a book a few decades back called The Social Meaning of Money. She talked about the way that people experience and use money independent of it’s cold, colorless, and functional economic purpose, and the way that they attach meaning to economic transactions in social ways. Think of the red envelopes of cash people in China send as gifts, or the way that mafioso people don’t like to put their criminal earned money in the collection plate when they go to church on Saturday and things like that, even though it doesn’t really make a difference whether you use the money that somebody gave you for your wedding to buy a gift, or you use that to buy groceries. There’s still something about the act, or the symbolism, of the money that people gave you at that moment. We attach social meanings to economic transactions, I think, because we’re social creatures, and we like to make meaning in otherwise day to day activities, like communal feasts, tea ceremonies, and things. I think this is intrinsic to the history of money.

Alla Semenova and Michael Hudson, MMT related monetary historians, have talked about the origins of money in Greece and near-Eastern civilizations in religious rituals and activities of temples and priests. There’s a ritualistic aspect even to the political nature of money. You can see that today with the key signing ceremonies for various forms of cryptocurrency, like Z-cash, or people who identify on Reddit and Twitter as HODL-ers–people holding crypto assets. And it’s also in the competing cultures that have built up around Bitcoin, Ethereum, and Dogecoin. It’s important to think about the aesthetic experience of using money when trying to change or influence social dynamics and money writ large. Bitcoin, in part, was successful because it’s a cool word. It was a cool concept. It was made cool. 

Alexandria Ocasio-Cortez, Sanders, and Corbyn made socialism cool again in a way. In part, because, obviously, there’s underlying structural reasons why people were primed to hear those ideas. But it matters, whether you’re the white-haired grumpy grandfather or the young, cool looking person from New York, in terms of the way that that message gets received. The Ecuadorians, in particular, who were some of the more farsighted policymakers in this space, learned this lesson the hard way. They introduced a government mobile phone-based central bank currency in 2014. But they limited it only to a narrow range of government transactions with a pretty unsexy government-developed mobile phone app. It didn’t really spark the imagination or engender trust. It didn’t really generate a particularly growing usage. And it was ultimately cancelled and is now considered a failure case, tragically.

By contrast, one of the groups the e-currency team that I’ve been consulting with works in the Philippines and is a commercial bank that’s working under one of these regulatory sandboxes with the central bank of the Philippines.They realized early on that they weren’t going to get widespread adoption of this digital currency technology unless they built a whole ecology. So they’ve gotten marketplaces and merchants involved from day one. They had this big kickoff event where they had everybody wearing t-shirts and made it like a whole festival day where people could come and go to a marketplace and buy and sell things. They put these promotional videos out, etc. And it’s a bit hokey, a bit market-y, and kind of gimmicky, but I think that’s ultimately part of the way that we need to think about this. And of course, the private sector guys know this intrinsically, because half of them are snake oil salesmen. And if you’re a snake oil salesman, the one thing you gotta do is make sure your snake oil is better than everyone else’s, or at least looks better than anyone else’s.

So we need to think about the aesthetic experience, as well as just the functional improvements that we’re offering. In addition to that, we need to have new stories and new cultures to fit this new monetary paradigm. If you think about the early cypherpunks, who were working on those anonymous cash ideas, as well as other forms of cryptography, in the 80s and 90s, they had their own movies, their own books, and they had their own chat rooms and things. I think that really gave them a sense of communal identity and a set of cultural references that facilitated their educational and political journeys and served as heuristics in many ways, or at least artifacts that carry significant depth of meaning in ways that just being explicit in communication wouldn’t. 

Just to give an example, my partner is part of this Facebook group called NUMTOT, New Urbanist Memes for Transit-Oriented Teens, which started as this joke group but now has about 100,000 members around the world–people who are enthusiastic about public transport. And they have this set of memes, inside jokes, and implicit expectations and understandings around the way that they talk and think about public transportation. And she was already an enthusiast, which is why she joined the group, but I think it’s fair to say that that space and that aesthetic and cultural experience really has further radicalized her and made her feel part of something bigger that wouldn’t have happened simply from logic and just having strong political values. I think the last element here is that we’re in a world driven by attention scarcity.

There’s so many sources of stimulus and information out there. There’s so many competing and serious political challenges and economic and social pathways that we can choose. Part of the challenge is working out where to put our attention. And that requires building a culture that brings in the kind of people that we want and need, educates them, respects their time, respects the rest of their life and fits in with it, rather than asks them to change. I think media and culture, particularly viral and mass media, has the potential to capture the public imagination at this moment and drive public debate and set the terms of the agenda in ways that dry technical statements, or even direct political statements, don’t do. And again, Boots Riley recently, I think, has probably done a better job with Sorry to Bother You in educating a whole segment of the population about labor struggles and union militancy than a thousand Marxist reading group sessions would have done. It’s brilliant art, in that sense.

On the dark side, I think Trump was pretty successful in dominating the national stage and captivating the media in a trainwreck style. He was transfixing in a brutal and violent way, as he acted a real life version of his fake real life persona on The Apprentice. In DC, rather than in a New York studio, but it was this fake life-real life version of a larger than life person that was so effective and enabled him to develop a huge following with very little payment of his own media spending in the campaign. And on the other side of the fence, art reifies existing myths and retrograde understandings about what money can be, and should serve as a site of critique and contestation, which I think you all have been doing excellently and I’m so excited about MMNHD as a project. Obviously, money, and particularly digital money, or maybe less so digital money, is a dryer topic than some other political topics like racism, sexism, or other things.

We should be trying to problematize and deconstruct portrayals of money in popular culture and in artistic artifacts and things in the same way as we deconstruct other problematic representations. There’s some pretty good analysis, for example, of how “The Dark Knight” Trilogy is a fascist trilogy. And there are other more basic examples, like the Bechdel test, which has done a good job bringing to light the subconscious oppression inherent in the way that we tell certain kinds of stories and media. And Max’s analysis of Inglourious Basterds, I think, is a paradigmatic example of how we can be moving that kind of effort ahead. But in order to do that, we definitely need a clear picture of what the political and legal and technical issues are when it comes to money, and what we actually mean and what we want when we talk about economic and monetary freedom and justice in the digital age. So that requires that deeper kind of technological, political, and ideological education as well as a merely artistic and cultural critique.

Scott Ferguson: Rohan Grey, this has been incredibly enlightening. Thank you so much for joining us.

Rohan Grey: Yeah, thanks for having me. It’s a pleasure.

William Saas: Thanks, Rohan.

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

Kenya in the Digital Finance Revolution with Sibel Kusimba

Money on the Left speaks with Sibel Kusimba, Associate Professor of Anthropology at University of South Florida, about her work on mobile money and digital finance in Kenya. In her recently published book with Stanford University Press titled Reimagining Money: Kenya in the Digital Finance Revolution, Kusimba both theorizes and critiques Kenya’s thriving M-Pesa mobile phone-based payment system as a constitutive component of Kenyan social life. In doing so, Kusimba explicitly eschews the postcolonial drive to develop more effective approaches to microloans or means for so-called “financial inclusion.” Instead, she offers a sophisticated culturally embedded analysis of mobile money, informed by her twenty-plus years of ethnographic study and archaeological fieldwork in Kenya. Understanding money as “wealth-in-people,” she traces mobile money’s role in shaping complexly gendered social networks and agencies, while simultaneously underscoring the political injustices of public austerity and privatized payment systems.

Theme music by Hillbilly Motobike.

Link to our Patreon:

Link to our GoFundMe: 


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

William Saas: Sibel Kusimba, welcome to Money on the Left.

Sibel Kusimba: Thank you, I’m happy to be here.

William Saas: We’re happy to have you. We’d like to start, as we normally do, by asking you to share a little bit about your personal and professional background.

Sibel Kusimba: Sure, I’m an anthropologist. I have been working in East Africa, specifically in Kenya, for at least a couple of decades now. I am interested in culture and cultural change, and technology and technological change in East Africa over time. My work has spanned from the stone age to the present. So I have worked in archaeological projects and methods. I’m also a cultural anthropologist and have conducted ethnographic research, so both qualitative and quantitative kinds of studies. I have a long term interest in technology, in evolution, in why cultures change, and in why technological trajectories take the pathways that they do. So I came into the study of money from a very historical perspective on technological change. That’s kind of my background.

Scott Ferguson: Great, so we asked you to join us today to talk about your still pretty new book with Stanford University Press, which is titled Reimagining Money: Kenya in the Digital Finance Revolution. So this is pretty squarely in the present–it is not archaeological. At the most basic level, your book takes on, tries to make sense of, and historicizes the fairly rapid rise of mobile phone payment systems in Kenya. Maybe you can just kind of ease us into this discussion by telling us a little bit about how you got into the project? What are some of the major historical changes that are involved? What is this all about?

Sibel Kusimba: Sure. I guess, in the short term, the whole project begins around the year 2000 or so, with the beginning of the really rapid spread of mobile phone technology, or personal mobile communication devices in East Africa. The spread of the mobile phone in East Africa is considered to be one of the most rapid examples of technological diffusion that has ever happened in the human experience. When mobile technology was developed, and first deployed in Africa, one of the developments that really enabled large numbers of people to buy mobile phones and to begin to use mobile phones, was a pay as you go scratch card. So if you bought one of these cards, there would be a kind of silver adhesive over it. I don’t know what those are called, but I think we all know what those are. So if you scratch those off, you would get a code. And you could use those to buy a small amount of airtime credits. That’s a really common way of purchasing airtime still today in a lot of parts of the world. And because that airtime could be purchased in relatively small amounts, it was what really enabled large numbers of people to use mobile phones really quickly.

I had been working in East Africa for about a decade before that. I had also gotten married to another archaeologist and my partner is from Kenya. I had spent a lot of time there as an academic, an archaeological researcher, and also just as an inlaw to his family–just a general kind of observer of social life there. That kind of positioned me to sort of think about what I saw happening with the way people were using mobile phones from a personal experience of needing to connect to people, as well as thinking about it from an academic point of view, and from the point of view of an historian of technology. What happens when new technologies become available, what happens when people have a new medium, or a new way of doing the things that they already did before for long periods of time? That was kind of how I got positioned into studying all of this.

When people began using airtime to access mobile phones, oftentimes, especially in much of Sub-Saharan Africa, and in rural areas of Sub-Saharan Africa, people began to use what was often called the community phone. So one person in a marketplace would have a phone that was available for rent or temporary usage. People could get access to that phone by renting it out temporarily, purchasing their airtime, and then making those calls. A lot of people in Sub-Saharan Africa live in very flexible and extended family kinds of social setups. Oftentimes, parts of the family live in one city or community, and other parts of the family live in other parts of the country. This has to do with colonial histories of work, migration, and urbanization. So what happened was that people began to use the airtime as a kind of money. And what I mean by that is that, if they wanted to send money to a friend or relative who lived in another city, they could actually use that airtime code as a de facto currency that could be transferred between phones.

For example, if you had a code, you could text message that code to someone else. Then, they could input that code into their phone and either gain access or purchase airtime that way. You could also exchange it with a dealer and use it to rent out a phone. Or you could even barter that airtime code for goods and services if there was a merchant in a rural village somewhere who was willing to accept your airtime code as a form of currency. And this also has to do with the fact that oftentimes there’s not enough money, or enough liquidity, in many communities where airtime came to be used as one of the first digital currencies. So when mobile phone companies, engineers, and other specialists became interested in this phenomenon, they realized that by formalizing this kind of informal use of currency, that air time sending, and even text messaging, could eventually become a way of transferring money from one mobile phone user to another. Maybe I should stop here and see if that makes sense.

Scott Ferguson: Yeah, it makes a lot of sense. What you’re talking about, we in the MMT world call different degrees of moneyness. We might call them nested regimes of liquidity or receivability. So those airtime credits are mostly redeemable through this service, but then it takes so many people using the service that it gains a kind of wider receivability. Whereas, what you’re suggesting is that then there’s a moment when engineers are getting involved, and presumably private investors and other actors, where they’re starting to think about a Kenyan currency, or a currency of greater receivability that is linked with the government, presumably, and perhaps even in international regimes? Is that the transition you’re talking about here?

Sibel Kusimba: Sure. I think that would be one of them. It would be connecting this kind of informal, special currency into the bigger circulations of what we in anthropology call the general currency, which is the most widely available. It has the most functions and the most acceptability across different parts of the social universe. So that would be part of it. It would be about connecting it to a state issued currency. It would also be, I think, somehow guaranteeing that that process, that airtime code that you send, would be accepted on the other end. That it would have a value that would be standardized and accepted. Also, if you went to a particular place and tried to send money, you could somehow guarantee that the person on the other end would receive the money within a particular time. So those are all aspects of what it would involve to formalize the use of an informal currency like that.

Scott Ferguson: So can you talk a little bit more about, if I’m remembering correctly from your book, there’s a sort of new technology, right? There’s a technological shift in airtime. Can you talk about that part?

Sibel Kusimba: In order to really make this money transfer system workable, and to guarantee the value that would be sent from one person to another, the other important part of this is to create a way of transferring the form of that value from airtime into something else. In this case, that something else was the cash money, the sovereign currency of Kenya, which is the Kenyan shilling. The means through which that transfer is going to happen is the agent, the mobile money agent, who is really a human being who provides the service of accepting the airtime and being able to take that digital currency and then transform it into actual cash money. So that’s called the cash in, cash out. In other words, what happens today is that, if you have cash money, you take the cash money to an agent, and they give you a digital representation of that cash. Technically speaking, that’s what they do. They hold your money for it. They’re not a bank. So they hold the money for it and they give you a digital representation of that cash. Then, when you have a digital representation of that cash on your phone, you can use text messaging to send it to somebody else.

You could also pay for things. You could send it to a merchant. You can repay a loan these days. You can have interconnectivity with a bank. So there’s several new services kind of built on to it now. But the key thing was really to provide that translation between cash money and the so-called digital representation of cash. I think that’s a really important point. And M-Pesa is the name of the service. It is provided by the mobile phone operator, Safaricom. It is not like a cryptocurrency or any other kind of digital money. It is a digital representation of the sovereign money of Kenya. So it’s not a cryptocurrency. Sometimes people get confused about that. I guess you could say it’s a stable coin. But even then I’m not exactly sure if it would be a stable coin, because it’s technically speaking a digital representation of Kenyan shilling cash.

Scott Ferguson: And a lot of these terms, like stable coin, didn’t they emerge much later? I think they just developed.

Sibel Kusimba: Yeah, right. We’re sort of trying to retrofit this.

Maxximilian Seijo: As we’re traversing these nodes of receivability in this historical trajectory, I was wondering if you could spend just a bit more time talking about the transition between what you describe as the informal to the formal. Because obviously, as you’ve been describing, there’s all of this private mediation of this transference and of these exchanges, which then become, in a more direct sense, public, right? This money becomes, in a more immediate, formalized sense, public money, even though we would, of course, insist that it was always a form of public money just in a more privatized way. We’re wondering if you could talk a little bit about more about how that process happened in the movement from the informal to the formal?

Sibel Kusimba: So then you have to consider the really important role of the Kenyan government in all of this. The Kenyan government had resisted a lot of the neoliberal reforms and privatization reforms that have been ongoing in Africa during the 1990s. Kenya’s telephone services, post offices, and other important infrastructures were all government parastatals until 1999, because they were under a lot of pressure from international donors. In 1999, they broke up the parastatal that included the post office and telecommunications. It split those into two. It agreed to privatize the mobile phone service. So in actuality, what happened is that the largest, nominally private mobile phone operator in Kenya, is called Safaricom. It was a product of that privatization of a former parastatal. In reality, this Safaricom entity is 35% owned by the Kenyan government, 35% owned by Vodafone, which is a European mobile phone company. It also has a South African subsidiary called Vodacom. But anyway, that’s another 30%, which is a private corporation. Then, another third of it is shareholders who can be anybody.

So nominally speaking, it’s a corporation. It’s a publicly traded corporation that has shareholders and the whole nine yards. But if you scratch the surface, a large part is owned by the Kenyan government. There are also some very prominent, well known Kenyan families who are shareholders in Safaricom. They are also sometimes politically well connected families. So it’s a really interesting kind of situation because the whole story of M-PESA in Kenya is oftentimes heralded as an example of private sector development. It’s the idea that when a private corporation took over this infrastructure, what really happened was that this very hapless and inefficient parastatal had to whip itself into shape and become this incredibly profitable and super efficient corporation. In reality, it’s an entanglement of government interests, private interests, and international development organizations. It’s really a kind of tangled web of different interests, both private and public.

I think that’s important because the whole narrative about how innovation and development should happen and how money systems should be organized and who should oversee them and who should back them, is a really important question. I know that all of you probably know more about that than I do. So I’m excited to learn more. But I think if you look at this example that I talked about in my book as a case study, I think it’s a much more confusing picture than to just say this is an example of a free market success or something like that. One of the things I also talked about in my book is the important role that the Kenyan government, regulators, and central bank officials and so on, had in kind of taking an approach to regulation that would still allow some of these informal practices to be captured, and that would still allow for the rapid diffusion of the system. So in reality, it’s a kind of an accommodation of all these different models that really came together.

Scott Ferguson: So it’s not as clear a story as maybe the neoliberal take would have it. I think one of the things I really like about your work, too, is that you take a different route than those who would be interested in these systems, in terms of like financial inclusion, which from my perspective, and maybe you can correct me on this, seems to be almost a predatory term, when it could mean other things. There’s a sociality to money that you’re really interested in investigating. And I think that this stems from your anthropological training and approach, and perhaps your work with and through the anthropology literature on money. So could you kind of just walk us through what work is maybe most useful to you as you’re navigating these questions and doing this research in anthropology, and maybe even adjacent to it?

Sibel Kusimba: I found initiating this whole project, thinking deeply about money, and about what I was seeing and how to make sense of it, to be like the most challenging intellectual effort I’ve ever had by far. I find the study of money to be extremely difficult and very, very challenging. Everybody uses money, or at least almost everybody. People use it for all kinds of things because that’s the whole point of money. It should be something you can use for everything. It seems to have a whole range of meanings, and it’s not just meanings, but also things that people do. It’s practices as well as ways of thinking. So it’s really difficult to figure out just in the abstract, let alone to consider one historical place and time, which, again, makes it even more complicated.

But you’re right, the dominant perspective that I found, as I began to think about what I could contribute as an anthropologist, was this financial inclusion perspective, which is an approach that primarily uses development economics to think about why people do what they do, how can we alleviate poverty, how can we put more money into the hands of more people, and how can we sort of lift people up out of poverty. A lot of the approach in financial inclusion comes out of this perspective of expanding the banking industry as it exists now and trying to give more people access, especially billions of people who are considered unbanked or underbanked. They are not integrated enough into our financial system, either the national financial system or the global financial system, depending on how people want to think about this. The idea is about bringing these unbanked people into banking, or all the benefits of participating in our financial system should be expanded to more and more people. 

So almost everyone looks at an example like the story of M-Pesa, which is detailed in my book, as an example of a successful approach to financial inclusion. The critique of financial inclusion is that by bringing people into the financial system, we simply reproduce poverty and bring large profits to the financial services industry in one way or another. That’s the financialization of poverty approach, which I think is a very, very important set of critiques. There is a book by Sohini Kar called Financializing Poverty that is all about microfinance in India and the way that poor families are maintained in relationships of debt, essentially like debt servitude. One of the issues with microfinance is the fact that the hundreds of millions of people who rely on it aren’t really starting businesses or moving ahead. They are simply using loans to kind of maintain a life of poverty that they already have. So that’s a really, really important critique.

On the other hand, I wanted to sidestep that a little bit. I wanted to write about this differently, not that I don’t think that that has an important lesson for the story of Kenya, but because I didn’t want to take away this money from the people. It seemed to me very much to be a money that had been created by the people who are using it, and that still bears the stamp of this informal set of meanings. It’s been enfolded into very long standing financial systems and ideas about value. And rather than supplanting those, I feel that it has folded itself into those and in some ways enhanced ideas about value and ways of continuing traditions about value that make it more than just a kind of predatory system. Although, I think that aspect is also part of what’s going on. So I didn’t want to take this away from the people who had used it and invented it.

In fact, there’s a series of urban legends all about where M-Pesa came from. It’s interesting that the kind of Silicon Valley myth about M-Pesa is one thing, but Kenyan people have their own ideas about where M-Pesa came from. There’s a really widespread story that is told about a university student who invented this system, and then had his patents stolen by the phone company, or by the British subsidiary–some powerful entities stole this from them. This kind of storytelling lives on. I use that as a kind of example of the way in which people still claim this as their own money. And it has a whole set of local meetings that tie into very long held ideas about value and about family life and about the life cycle and other things that are very important in the anthropology of this part of the world. So I wanted to make sure that it wasn’t portrayed as a kind of imposition in its entirety.

Scott Ferguson: Yeah, that’s great. That’s one of the things I most appreciate about your book, which seems very fitting from an anthropological perspective, but to come at money from a critical perspective and a critical perspective in the humanities, maybe outside of anthropology, very typically the impulse is to see money as evil, as bad, even if you’re dressing it up in fancy terms. And part of that evilness and that badness implies a kind of evacuation of meaning, an  evacuation of being concerted, and an evacuation of ties and obligations that are rich, complex,and entangled.

Sibel Kusimba: Sure. So I guess you could start out with the forms of money that have always been important in this setting. An example of early work that I really liked is the work of the anthropologist, Harold Schneider, who worked in pastoralist societies in the 1950s and the 1960s. Pastoralists are, in this case, cow herding societies, but also goats and sheep. Most anthropologists consider pastoralism to be like an environmental adaptation. Like if you live in a grassland and it’s too dry to farm, then you will become a pastoralist. You will keep cattle, sheep, and goats and, for a lot of these societies, milk. Not just the meat of the animals, but the milk of the animals is a really important part of their diet and so on. But what Schneider did was to see pastoralism not really as an environmental adaptation, but as a political economy based on their cattle as their main monetary system.

So for him, it was about having a form of money that was like a naturally expanding money supply, because their money just had babies all the time. They almost had a problem with too much money, because the ability of one person to care for, tend, feed, water, and herd animals was limited. There are only so many people in a household and so many hours in a day. So as people’s money expanded, and their cattle had babies, they came up with ways to circulate the money. And they created financial ties that allowed them to kind of lend out the cattle to various factions of the society. So the society became kind of knitted together by all these exchanges of cattle, because, basically, they had too much money, which I think is kind of cool. I thought that might have something to do with MMT. I don’t know a lot about MMT. But it kinda reminded me of MMT in the sense that you just have all this money that is like bountiful. Because we have all these beliefs about how the value of money comes from it being very scarce and not having enough.

So this was a society where there was too much money. So what people did was, by creating all these financial ties, they had a political economy where they accumulated financial ties rather than accumulating money. So the people with the greatest wealth in the community were the people who had the most financial ties. They did this through bridewealth and through all kinds of institutionalized relationships around the rights that they shared to each other through these exchanges of cattle. Those are still really important. And bridewealth cattle are still exchanged at all kinds of rituals. Normally, at different parts of the life cycle, you mark your transition from childhood to adulthood, or into elderhood. And there are exchanges of cattle and new kinds of relationships that get invoked at each of those times.

What I learned in 2014 and 2016, was that these mobile money remittances were enabling and sustaining some of these traditions. If people in urban areas who had access to work could send money through the mobile phone, it would only be used by people in the rural areas to fulfill some of the expectations of these rituals, purchase cattle to be offered to the ancestors, and kind of build a tie between the present and the future and so on. So I think that would be a really good example of how money is not this depersonalizing imposition onto people, but that it gets wrapped into the forms of money that they already have. And especially in East Africa, people have been historically very interested in wrapping new forms of money into the hierarchies of money that they already have. 

And that idea that you mentioned, Scott, that money is very depersonalizing, it is also reflected in a lot of early anthropology. It’s the idea that if people have to pay for things, they won’t have the same value that they had before. I think that’s certainly not true. Now that people purchase the animals that they’re offering to the ancestors for sacrifice, in a way, it makes them even more valuable to people, because people who don’t have a lot of access to cash money have to coordinate the circulation of all of these digital money remittances in order to cobble together enough contributions to purchase the animals. And when they’re able to do that, it kind of provides that family with a sense that they have accomplished the expectations of the ancestors, their traditions, and so on. So I wanted to make sure that that was a part of the story of all of this. Gender is another area that ended up being really, really important to me in this book.

Scott Ferguson: I know you spent a lot of time thinking about the way women are using this currency in Kenya. What are some of the lives, the rituals, the relationships–how is mobile money coming to them and mediating them? Could you maybe just provide an example or two?

Sibel Kusimba: Gender is another big part of financial inclusion. If you look at what was known previously to my research about gender in this area, women have been a huge focus of the financial inclusion effort. In other words, if the unbanked people all over the world need money, then the unbanked women of the world need this money even more. Women are sort of the representation of a vulnerable, third-world type of person who is believed to be the target beneficiary of these new forms of money. I also tried to turn that idea on its head just a little bit. I tried to show that women are really important in this story because of the kinds of relationships they have with money and the kinds of relationships they have with each other. There’s a certain theory of trust that a lot of women seemed to articulate to me and a theory of relationships that seemed to fit into this idea of financial ties as being really important to people.

Part of the reason why money was so challenging for me to study is that, methodologically, it’s very challenging and it’s very difficult for anthropologists to study. In this part of the world, people don’t necessarily have an idea about the individual as being a bounded, detachable, and separate entity. People tend to see individuals as very interconnected. I think it goes back, possibly, if you believe Harold Schneider, to this interconnectedness that comes from the fact that they just have so much money they don’t know what to do with it. They have to kind of bind themselves up with other people. So when you talk to people about money in this setting, because they don’t necessarily believe in a detachable individual as much as some other people might, people here tend to really personalize money. They view it as an extension of themselves. And whatever they do with money, they really view it as a representation of who they are, what they want to accomplish, and what they want to be to other people.

So when you send money to someone else–and again, the whole money system is based on these remittances that go back and forth over mobile phones–you’re showing them what kind of person you are. You’re showing them that you care. You’re showing them that you want to be present in their lives, even if you can’t physically be there. You can kind of be there through these remittances. You’re really expressing a lot of important cultural ideas about belonging, about obligation, and about filial piety. And really, you can’t be a person anymore in Kenya unless you are able to use this money system. It’s become that important to people. It’s become like a new imperative, or like a new basic expectation of personhood. And because of that, in a way, it’s hard to study the downsides. Because if you ask people, “Who do you send money to and who sends money to you?” people will answer relatively enthusiastically. It’d be like asking, “Do you have a lot of Facebook friends?” or, “Do you have a lot of Twitter followers?” You’d be like, “Yes, I have a lot and that’s my wealth in people. Those are my people.” They are the relationships that I’ve been able to create by sending and receiving money.

But the downside of all of this is that there is so much disappointment and so much failure that can happen when you don’t have enough money, or when you’re unable to help someone or fulfill the responsibilities of a firstborn son, for example, who’s expected to sustain and support others. Because it is so weighted with obligation and social meaning. It is so personal to people. It’s very hard to talk to people about what it means when they cannot send money. And in reality, that happens all the time. To be in Kenya today means to be constantly negotiating requests from people in your social networks. It’s still a society where people don’t have enough money. You can be as digitally connected as you can try to be, but if the social networks don’t have any money in them, then they can’t circulate value that they don’t have. So there’s a great deal of negotiation that goes on to try to mediate some of the jealousies, the hurt feelings, and the downsides of this money, because it is so weighted and loaded with meanings for people. 

Another thing that women oftentimes have to manage is the emotional labor of all of these remittances that circulate in families. One of the methods that I commonly use is to create maps that show how money circulates in families. These maps really show a social infrastructure, so to speak, of how the money moves around. Women are really important in a lot of these networks. They sit at the center of remittances. They are oftentimes considered the most trustworthy and the most fair brokers of remittances. So they are often the ones who have to figure out who needs money and try to get money to people who need it the most. It can be a relationship that gives women a lot of social importance. It can give women a role of importance in their communities, but at the same time, it also gives them a kind of a burden in a way by having to deal with managing the emotional weight of all of these decisions. So really, the position of women is kind of a double edged sword, because while they’re often very central to these networks, they’re often people who have to manage and mediate all of the difficulties that people have in accessing money and moving it around.

Maxximilian Seijo: So what I really like about all the rich detail that you offered in that answer, and there’s so much to pick through and to think with and about, is it perhaps resonates in the way that you saw it mapping onto MMT and a little bit of the work we’ve been doing with Money on the Left. I’ve been doing some of my own reading of anthropologies of money in different places around the world. I think what it speaks to is a relational view of money in a way that, as Scott mentioned, rejects the top-down imposition story. All that texture, all the tensions and the complicated relationships between people, the ways they are navigating the obligations to others, and these ties that you’ve described, offers a really interesting story of what maybe I’ve started to call the condition of possibility for money.

This is the way in which people with various forms of agency and background can make money, and not in some individualist way, or what we would traditionally call a bottom-up way, but in an overlapping way, and how those forms of money making are political. They can reach all the way up to the officially formalized currency systems that ultimately allow for a universal receivability, but then also a structure of production within that. So there are these layers of money and layers of production that all ultimately map into a wider form, or in this sense, the state form of the Kenyan shilling, and all of the production that falls under the purview of that and all of its dependent ways. And I offer that because it seems to be the way in which, especially lately, I’ve been trying to think with money as an anthropological form and a legal form in all of these overlapping ways. I just wanted to note it because it resonated so potently with this story that you’ve told. Moving from that comment to perhaps a further discussion of the work, aside from reflecting on that long monologue, we’re wondering if you could then start to move into some of the questions of visual culture that play an important part of your book?

Sibel Kusimba: No, thank you for these insights. It’s really fun to talk to people who actually know so much about this, so thank you so much for this and for these really great questions. To kind of start that out, I was really influenced in writing this book by the sociologist, Viviana Zeliter, who has written several books, one called The Social Meaning of Money, and then another, which she wrote in 2005, that is called The Purchase of Intimacy. It is about the relationship between money and intimate relationships. I found both of these books to be really, really stimulating, especially The Purchase of Intimacy. In that book, she really does articulate this relational view that you mentioned. What she says is that we have to stop dichotomizing the social and the economic. We have to stop assuming that these are always separate spheres. And this is a very long debate in anthropology.

There is this very long standing tendency to think about economic behavior–and by that, I mean rational behavior or efficiency type behavior–as somehow antithetical to emotional relationships, or to socially positive relationships. In her view, the social and the economic are always constituting each other. And money is a mediator that creates a certain kind of relationship. Rather than trying to think rationally about money and shift all of our emotional and personal commitments to the side so that we can be rational and efficiency seeking, she argues that there is a kind of social and emotional content to all the relationships that we produce, and that there is some medium that creates those relationships with some kind of value. It could be money, it could be another kind of value that creates that relationship. So then the economic and the social are always together.

I think that is a really powerful idea because in anthropology there have been all these debates about whether rationality is universal. Or does the economy have a social and cultural embeddedness? Can we see economic behavior as a universal thing that occurs whenever we get all the emotions out of our heads and just try to be rational? This is just not a productive dichotomy. She really sees how money is a mediator that creates a certain relationship, so that it is both social and financial at the same time. And as I was doing these maps and drawing the money moving around, I wanted to go back again to this idea of technology, to get back to where we started talking. Digital money that’s on a mobile phone is a new form of money that has a particular material basis to it and that is a medium of a relationship. I wanted to see it as fitting into other media of exchange, or other media of relationships.

So again, this is not the financial inclusion perspective where this new form of money just moves in, displaces everything, and replaces everything. This is an additive process where new relationships are perhaps formed by and with a new mediating technology, which in this case, would be digital money. Again, I was struggling with how to talk about money with people. It’s deeply personal. Sometimes really negative emotions, like shame or failure, are very close to the surface when you ask anybody about money. So by using the drawings, I was able to communicate a little bit non-verbally with people about what money means to them. And by having them draw the character of money, I got a sense of how different mediations can occur. This kind of happened accidentally, because I was trying to talk with one of the women who was helping us with this. I was trying to talk with her about digital loans. I have to explain some of this a little bit to start out with.

Now that they’ve got this money sending system–and again, the idea is you go to an agent, especially in the rural areas. You don’t need a smartphone and you don’t need the internet. You go to an agent who creates this transformation from cash to a digital representation of cash, or back again. You can go from cash to digital money, or go back again. That’s how you can send and receive money and that’s the inclusion aspect of all of this. But on top of that, all kinds of financial services are being built onto this structure. East Africa, and Nairobi in particular, is a real center for “feel good, do good” innovation, or solving social problems and improving the infrastructure of developing countries by using all kinds of digital technologies and innovations that bring development. So now that you’ve got a payment channel that uses digital payment, you can do things like have people pay for solar panels, or have people pay for water, or have people pay to watch cable television, and things like that.

You could also perhaps provide them with information about health or medical services. So really, the digital payment is supposed to be the rails on top of which all kinds of commerce and service delivery are going to reach into especially rural people who maybe off the the grid of the kinds of infrastructures that countries like Kenya inherited from the colonial experience. One of the biggest services that’s had really rapid uptake throughout Sub-Saharan Africa are these digital loans that are available over the mobile phones. They have names like, Baraka, which means right away, and other kinds of things. You can get a loan over the phone for as little as $10. And if you repay that loan within this timeframe that you’ve been given, and it varies depending on the provider, then the next time you seek out a loan over your phone, you can get a slightly larger amount. The idea is to build a credit history and access to credit using these mobile phone loaning systems. Sometimes they’re called nano loans or digital micro loans. They have been hugely popular. In Kenya, which is a country of say 40 million people, at least 3 million loans are taken out every month.

And that’s just from the main bank that is partnering with the mobile phone company, but there are more than 20 other providers that have come into this space. Some of them use a smartphone. They are more looking for the urbanites, or people that have access to internet and a little bit more money so that they have access to things like smartphones. It has been an example of how financial inclusion can so easily go awry, especially when unregulated products like this are offered to people who may not have much of a credit history, may not have much of an ability to pay back loans, and oftentimes live in very precarious circumstances such that they need money right away. A lot of people have had real problems repaying their loans. Large numbers of people have been blacklisted because they’ve been unable to repay. A lot of the companies that came in with the idea of providing credit to people, some of them have had to fold, such as the company called Tala, which had this dramatic uptake of many people taking out loans. Then, the Tala company recently folded and is no longer offering loans. I think it is into Bitcoin or some other thing right now.

So one of the really big stories, in terms of African FinTech, has been these digital micro loans. And they’re kind of shrouded in shame and secrecy. A lot of people can’t really repay their loans. They need to go back to their social networks and put together all the social relationships that they have in order to try to repay the loans. A lot of people get mired into debt. And once they find their way out of it, they don’t use the services anymore. They go back to what they were already doing before. So I was trying to get more information about these loans. This lady who I was talking with said, “Well, there’s a cat over here looking for scraps. These loans are like this cat over here.” Or even worse, these loans are like a rat that hunts for money. What she was sort of alluding to was the very private nature of these loans and the dangerous moral qualities that a lot of people find with this private access to credit. The thing is that, because people’s social relationships are so important to them, it gives people an incentive to try to take out these loans.

Oftentimes, their friends, their neighbors, or their family members are facing medical crises, or their children are sent home from school because they don’t have money for fees, or they just don’t have food. To be the person who can save the day and provide money when it’s needed in your network, it’s very important to people to have that kind of relational strength. But what it does is make people very vulnerable to debt and it mires people into debt. And what is happening is that, after a very rapid period of expansion, a lot of these digital credit providers are folding, or they are no longer as popular as they used to be. What people are going back to is, when you say conditions of possibility, what we would call the kind of informal sphere and the relationships that people have kind of developed around money outside of the banks, or outside of any other formal system. There’s a huge expansion in that area right now. Part of it has to do with the way people are bringing the digital payment system, bringing the remittance capability of the phones, into a variety of group methods that they have been developing over the years, which involve all kinds of ways of circulating funds in small groups, such as merry-go-rounds and table banking.

It’s really common to access credit from your neighbors, or from women’s groups in your neighborhood. They pull money together and often offer small loans to themselves, or even to other people that they know in their neighborhoods. There are all kinds of group models, like welfare associations, that are just really growing enormously right now as a result of the digital channel–making those payments easier for people to mediate time and space and maintain connection to those groups without having to be physically present. So it’s really interesting. The real growth has been in the informal sphere, precisely because people have that relational view of their money. They really see themselves as interconnected with other people. They see this as a fundamentally group process, not as an individuated way of dealing with money. And this is the real mistake that a lot of the providers are getting into. It’s much easier for them to deal with an individual client or individualized customer. Then, they know who’s responsible for their loan or whatever payment. Then, they know who they’re dealing with. They can do things like double check your identity and make sure they conform with banking regulations about KYC and so on.

But what they’re really doing is ceding a variety of groups and collectivities that basically circulate money amongst themselves. That’s actually the real basis of this money. So the formal sector is really trying to test the limits of people’s ability to repay loans. In a way, they’re trying to extract value from people who earn very little money through these tiny nano loans of $10 or $20. In my book, I talk about people who have access to between $10 and $40 every month, and they’re running around trying to find friends, agents, and others who can help them repay their loans on time. They’re repaying amounts of money that to many of us would seem to be ridiculously small. Some of them are being blacklisted, because they can’t repay loans that are as small as $20. So it’s a real failure to appreciate a different way of looking at finance. It’s an insistence on individuating the customer, on slotting them into a kind of repayment gradient. And it’s a real failure to appreciate that when people come together, save money together, and create money together, they can actually create large amounts of money when they circulate money in these groups.

And I give some examples in the book. When people want to get married and they need bridewealth, or when there is a real medical emergency in their networks, they can sound the alarm and come together with huge amounts of money, hundreds of dollars. People in rural areas can really come up with hundreds of dollars when they want to for the things that they think are important. And all of that is actually taking place outside of their formal offerings. In reality, I guess it’s a little bit of a meld. It’s a meld of these formal systems and the kind of informal logics that people wrap those capabilities into. Another thing I argue in the book is that, if people could expand their idea of what a credit worthy person is, if people could see themselves as ceding networks and groups and becoming a member—could a bank or a financial services provider see themselves as a member of a group rather than always trying to kind of individuate people and measure people according to outside standards–then I think they’d really see all the untapped potential that these groups actually have.

Maxximilian Seijo: I really appreciate that answer. One of the main takeaways of MMT that flashes in my mind when you were talking is the terms of loans in general as a matter of the public nature of money and the abundant status of money. You don’t run out of money. You may run out of resources, people, or other sorts of things, but money, and importantly, repayment–the variables around repayment and what needs to be “paid back” in any form of lending, or in any form of money issuance–is a political decision. So the austerities, violences, and predatory extraction that you’re describing, with the relational view of money in hand, they are not the natural order of the way money issuance, lending, credit, and debt have to operate. There’s a politicization of their austere premises, which I think is in part what your work is doing and what the associative monies that you’re talking about, that are more of a meld of the system, are also attempting to do. It’s about the terms of labor relations and credit relations that don’t necessarily fit into a reductive sense of what one might call the larger system, even though they necessarily are participating in that larger system in a mediated way, as you’re describing. And what’s so interesting about this is another way of viewing how the austere political decisions around lending also aren’t totalizing, and how public agency on behalf of people in groups and associations can challenge them in different ways. And then, of course, importantly, they also challenge their premises. Because they don’t have to be that way, according to MMT. That seems to be one of the takeaways from that answer and from your work. I really just find it so fascinating to work through and navigate all of these questions of how individualization and individual indebtedness itself is a political decision on its own terms.

Scott Ferguson: Maybe we can move to close out our discussion by getting you to tell us a little bit about how you see the future of these mobile payment systems evolving? Are there any kinds of formalized challenges? Are there groups who want to abolish the system or change the system? Do they have ideas about reform?

Sibel Kusimba: Thanks, this is a really great question. I think the systems, especially the formal money transfer system that we’re describing, M-Pesa and related systems, are almost 15 years old now, because the first kind of deployment, at least in Kenya, started in 2007. After a year, there were three or four million people who had already signed up. So it was wildly successful. And everybody thought that there would be this massive growth in new kinds of financial services, all aimed at low income customers that would really help them empower themselves and move out of poverty, or just create better lives for themselves. After 15 years, I think it’s fair to say that that massive growth has not really materialized, even though many people still use the money transfer service. Indeed, most people use the money transfer service. Participating in money transfer networks has really become imperative and necessary for social belonging and for economic life in general.

Having said that, the development of all kinds of new platforms, apps, and this “a thousand flowers blooming” of all kinds of digital tools and platforms that would be beneficial to people hasn’t really happened. In the existing system, there are a lot of ongoing problems. One is they are still not very affordable for a lot of people. There are very large fees for the transfer. In fact, when you upload your cash and create that digital representation, you have to pay money. Then, when you download your cash and go from digital representation to cash, on the other end of the transfer, there’s a fee associated with each one of those services. So for a lot of people, the services aren’t affordable. What I talk about in the book is the ways in which people use their social relationships to try to gain access. They borrow phones, or they know they have friends who are agents, or they work around the very high cost of the services. They’re still too expensive for the low income people. There are issues with trust because there has just been an epidemic of fraud, of identity theft, and all kinds of problems with trust in the system. And that oftentimes prevents people from using it. It prevents people from really trusting the system. 

Then, there’s the ongoing problem of just the lack of relevance that a lot of people see to a lot of the products that are given. The attempt to build on top of the digital payment, to offer things like health insurance, would be a good example. In my book, I give so many examples of people who are dealing with medical crises–one medical crisis after another. One man was a carpenter and his four year old son swallowed a nail and needed to go to the hospital right away. Again, they did a massive fundraiser and people responded right away. Because almost all medical care is kind of out of pocket in Kenya. Even relatively wealthy people don’t really have access to enough insurance. So medical care is a big problem. People don’t have access to schooling. People don’t have adequate food and the ability to sustain consumption. So all the products that have been developed to try to meet a lot of their needs, people just don’t feel are relevant.

To go back to the issue of insurance, numerous companies have tried to scale like a digital insurance product. If you pay a small amount of money, then when there’s a medical need, you’ll be covered. People don’t trust the service. They think that that coverage won’t really be there when they need it, or they just don’t have the money for something that they’re betting won’t really happen. Also, because they know that when they do have an emergency, they have their informal networks of people that they really do trust and know will be there. So it’s the trust, the affordability, and just the lack of desire to partake in the so called benefits of finance. The scaling up and so on hasn’t really happened. Instead, what is happening is the growth of all these informal groups and models.

One thing that’s really interesting in Kenya is that the co-operative movement is very strong. There’s even a university called the Co-operative University of Kenya, where they actually teach people how to create co-operatives amongst themselves, such as co-operatives for farming or different kinds of agricultural production, but also financial co-operatives. People who work together, who are teachers together, form cooperatives. There’s a range of formality of these groups. Some of them might resemble a credit union here in the United States and others are less formalized, but the government recognizes a whole range of different kinds of co-operatives. So it’s a huge area of growth. That’s the place where you would find alternative financial forms and the place where you would look for new kinds of finance that are truly going to be relevant for the people who are using them. In terms of more digital financial offerings, especially things like predatory loans and so on, I predict that those are just going to create new forms of exclusion, rather than really benefiting people. So in a lot of ways, that’s what the future looks like right now.

William Saas: Historically, it seems possible for someone coming from doing anthropological work in an area around financial inclusion that it would be cause for concern. That’s not what you’re doing. It seems like you’re more on the side of illumination, optimism, building, and that your work is certainly not contributing to, but maybe helping to anticipate and route the exploitation you’re talking about. Thank you so much, Sibel Kusimba, for joining us on Money on the Left. It’s been a pleasure.

Sibel Kusimba: It’s been an enormous pleasure. Thank you so much for your interest in this work. How exciting to meet people who have similar interests, and it’s been a huge pleasure for me to be here today.

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

Finding the Money w/ Maren Poitras

Documentary filmmaker Maren Poitras joins the podcast to discuss and share a teaser from Finding the Money, the first feature-length documentary on the past, present, and future of Modern Monetary Theory. The film is currently under consideration for audience and jury awards in the DocLands film festival. Head to the festival website to watch a longer clip and to vote for Finding the Money by May 10th

Watch the video version of this episode of Money on the Left on YouTube:

More info at:

Theme music by Hillbilly Motobike.

Link to our Patreon:

Link to our GoFundMe: 

Remaking Radicalism with Dan Berger & Emily K. Hobson

Money on the Left is joined by Emily K. Hobson and Dan Berger, coeditors and curators of the recently published collection Remaking Radicalism: A Grassroots Documentary Reader of the United States, 1973-2001

Hobson is associate professor of history and gender, race, & identity at the university of Nevada, reno, and author of Lavender and Red: Liberation and Solidarity in the Gay and Lesbian Left. Berger is associate professor of comparative ethnic studies at the University of Washington, Bothell, and author of Captive Nation: Black Prison Organizing in the Civil Rights Era

Together, Hobson and Berger have compiled and thematically arranged a tremendous selection of key documents authored by radical organizers during a period commonly associated with the fall or disappearance of the left. Against this inaccurate and self-defeating lapsarian story, Remaking Radicalism shows the period of 1973 to 2001 to be replete with radical thought, revolutionary action, and what Hobson and Berger call, after Stuart Hall, “usable pasts.” In most cases these pasts are inseparable from our present. In all cases there is much to learn from and build upon. We talk with Berger and Hobson about the history of this project and the ways that it alters common understandings of the political and cultural present. We chat, too, about money and its place in the radical rhetorics recovered in the book.

Cover Art: “A Boogie/Un Baile: Benefit for July 4th Coalition” (1976). Original silkscreen by Ronald Weil. Published by Gonna Rise Again Graphics. Courtesy of Lincoln Cushing/Docs Populi.

Theme music by Hillbilly Motobike.

Link to our Patreon:

Link to our GoFundMe: 


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

William Saas: Emily Hobson and Dan Berger, welcome to Money on the Left.

Emily Hobson: Thank you for having us.

Dan Berger: Thanks so much.

William Saas: To get us going, could you tell us a little bit about your personal and professional backgrounds?

Emily Hobson: Sure, I can go ahead. I’ll go first in part because I’m older than Dan, although less published. I grew up in a kind of left-liberal family so I had left impulses early on. But I was really radicalized in college in the mid-90s, especially around issues of welfare reform and the ways that those dovetailed with cuts to education and also the growth of right wing attacks on the ballot box in California. At the time, I was also really getting excited about histories of varying models of community organizing. I first pursued work with Center For Third World Organizing, which kind of comes out of an Alinsky tradition, but it attempted to really bring a race and gender analysis into that work. So I moved into that network and was also very much part of and influenced by youth mobilizations around the country, but again, especially in California and those tied to fighting the racist right. Specifically, in the ways that it was showing up both in kind of grassroots and vigilante ways and in more tolerated politics.

That was my work for a number of years, but I was increasingly disappointed with the limits of the nonprofit model, or the growing nonprofitization of organizing work. A distinction made within a lot of non-community organizing nonprofits–between a good use of nonprofits and a bad use of nonprofits–that seemed to me to be less of a clear distinction than we might have liked it to be. I also thought that there was a mistaking of collectivity in local organizing projects with movement building. And I was struggling with what might be my place in all of that because I think I was also very much trained in a tradition to be, as a white person, kind of a resource who would sit back and take the lead, which, of course, also converged with a certain amount of gender socialization. It was in some ways the disappointments with some of that work that made me think like, “Well, I’ve always really loved doing movement history and it’s in many ways been my passion since college. So maybe this is the time to go to graduate school.” Once I made that commitment, I was pretty much all in as like this is the place I can make a more clear set of contributions that I can feel kind of integrity around.

So I did my PhD at USC in the American Studies and Ethnicity program, which I really loved, and I think really built on some of my experiences in organizing, West Coast roots, and investment in learning from majority people of color spaces. I think that was one of the real benefits personally for me in the program. I finished the PhD in 2009. I taught briefly at UC Santa Barbara, and then in 2012, got a job at University of Nevada, Reno, which is where I’ve been since. My first book is called Lavender and Red: Liberation and Solidarity in the Gay and Lesbian Left. It’s about queer engagement with antiimperialist, antiwar, and racial justice politics, primarily in the San Francisco Bay Area during the 1970s and 80s. The current research that I’m doing looks at HIV and AIDS activism by, for, and with people in prisons in the 1980s and 1990s across the US, but with a special strength in a few big cities and along the coasts.

Dan Berger: Can I just say ditto? Just kidding. So my entry into politics was also in the mid 90s, although I was in high school, not college, in upstate New York and it was initially through animal rights and environmentalism. It was a strong, as well as broader, oppositional youth culture. There was a strong emphasis on direct action, protests, and mobilization, which also meant there were a lot of interactions with the police. One of the early things I did as a young activist was to go to a trial of some people who had been arrested for engaging in civil disobedience. Not long after I got involved in politics, my family moved to Florida. Friends in New York, like one of my good friends that I was in high school with, had her arm broken by the cops. Other friends had their door busted down by cops. There was a lot of consciousness and politicization around the state. There was a slogan, I would learn later on, from Students for a Democratic Society in the 60s that said, “The issue is not the issue.” I felt like that was my politicization. My family was middle of the road Democrats. Other than the Holocaust and certain aspects in Jewish history, there wasn’t a lot of discussion of politics writ large. I just knew growing up that bad people kept winning elections.

Surrounding the Clinton administration in the 90s, my parents seemed content, but I was living in Florida and everything seemed miserable. I was trying to think through that disjuncture. The 60s always loomed large as this other moment of a lot going on. It was often referenced and acknowledged, and yet everyone I knew who had been alive in the 60s were my teachers, my parents, or people who seem to be not engaged or interested in that kind of politics. I was really struck by that while living in this pretty mythical suburb in South Florida. This was the early days of the Internet so I was writing to lots of different organizations, getting on mailing lists, getting newspapers and zines and anything else that I could find. Through that, I ended up starting a correspondence with several longtime political prisoners who were people coming out of the revolutionary movements of the 60s and 70s. Many of them had been incarcerated since the 70s or, in some cases, the early 80s. For me, those connections were not because I understood anything about incarceration. But really, because it was the only place I knew to find people who were movement veterans and were interested in talking with younger generation people about what happened, what worked, why and why not, and so on. So those connections were really important mentors and eye opening experiences for me. And many of those relationships continued.

I went to college at the University of Florida. I started in 1999, which I say only to position it within what was happening at that time period. The protests against the World Trade Organization happened when I was a freshman. That was very inspiring. Large groups of us mobilized to go up to Washington, DC for the protests against the World Bank and IMF meeting in April of 2000. Following that, a friend of mine and I started this anarchist newspaper that was trying to bring attention to and in recognition of the anarchist currents of the global justice movement. But also, it was significant to us that we were in Florida, in that we were trying to think about alternate geographies of movement politics and directions. When I graduated college, I moved to Philadelphia and was there for about a year working first for a bookstore and later for this media justice organization. And then, I went to grad school at University of Pennsylvania, which is gruesomely in the news this week for having held on to the bones of two children who were murdered in the 1985 bombing of the move house. Among many other disgusting things that that university has done, this seems to top the cake.

I went to grad school because I was mentored in a way to find something that you’re good at and figure out ways of using it in the service of movement building. I feel like that was a mantra that I came into politics with, or developed at some point early on as an activist. Then, in the process of writing my senior thesis, which later became my first book on the Weather Underground, I had a really wonderful advisor who was like, “Do you like what you’re doing and do you know what you’re going to be doing after this?” They planted the idea of grad school as a possible future. So I did that. I felt I stumbled into it in some ways. Then, I graduated, I wrote my dissertation about Black and Puerto Rican prison organizing in the 1970s. In about 2010 or 2011, I was at the USC library in Los Angeles doing some research and speaking about a book I had edited on radical movements in the 1970s and Emily was, I think, one of two or three people who showed up to that event. We were chatting about various things related to movement history, and then Emily brought up this idea of doing a primary source anthology. And now–I was gonna say the rest is history–but one piece I didn’t mention is that I’m an associate professor of Comparative Ethnic Studies at the University of Washington, Bothell and live in Seattle.

Scott Ferguson: Thank you so much. So I guess to get into the central topic of our conversation, we’re here to talk about your newish anthology, Remaking Radicalism: A Grassroots Documentary Reader of the United States 1973-2001. In the introduction to that reader, you describe it as an effort to “locate or curate a usable past amid chaotic times.” Maybe just to get us going, can you talk a little bit more about how you came to this project, why it’s meaningful to you, and maybe unpack some of that language about usable pasts?

Emily Hobson: Yeah, so as Dan said, in 2011 or so, we first began chatting about the idea of an anthology. I also had an idea of putting together an anthology of documents very specific to what became my first book, so mainly on the queer left, broadly. I chatted with a couple people, Claire Potter and Renee Romano, about that, who at that time, were the series editors for the “Since 1970” series at University of Georgia Press. They both said, “Make it bigger, but don’t be the only editor because that’s too much.” And I also knew that I would want to engage with a co-editor. Then, in talking to Dan, we had a lot of exciting conversations about different kinds of ways to conceive of it. It became a 10 year project, which I think is far longer than either of us really expected for developing it.

Scott Ferguson: And in a really different political climate, right?

Emily Hobson: And in a very different political climate, yeah. I actually think the length of developing it was in large part because, at a very practical level, we were both finishing other books. We were starting out in tenure track jobs. We were dealing with our own lives and engaging in the movements of those 10 years. And everything that has happened in the past 10 years has been a really rich context in which to think through what might be a usable past for the 1973 to 2001 period. Broadly, the idea of the usable past is a way to think about turning to history as a way to make meaning of the present and to understand how to find legacies, how to find and analyze, in particular, past radical movements, or past modes of politics. One of the ways that I think about the idea of a usable past in this book is with the hope that it will be used in a variety of different contexts. Definitely in traditional classroom settings, but I also envision it for political education projects, study groups, mutual aid projects, and so on. Ideally, people can turn to it to look for work similar to what they are pursuing, or with similar kinds of questions–or very different kinds of efforts–that might help them think about issues that are new to them. It’s also perhaps useful for considering different kinds of tactics and communities that they’re not connected to. That is definitely one of the goals of the book.

It is to not only be a kind of historical accounting that can be the source of research and be responded to by scholars, including independent scholars outside the Academy and movement historians, but that also it can be a recent toolbox to turn to. We conceptualize the period 1973 to 2001 in large part because there was no other similar anthology of that breadth of time and issues that we try to cover. There were a number of anthologies that broadly reflect the long 1960s but even those that had a long 60s kind of framing and went into the early to mid 70s stopped. So we were left with this impression that there are no real resources to turn to, that there are no significant movements to attend to, and that movements across the 70s-80s-90s period were all disconnected from each other, which certainly didn’t reflect either of our own personal experiences from having looked into archives and talked with people.

Dan Berger: Yeah, I would just say, every social movement that reaches a certain kind of mass consciousness is then greeted with a “Where did this come from?” comment. And oftentimes, in the popular sense, the answer is, “Nowhere!” It’s assumed some local thing started the movement. There’s no sense of a longer history. Obviously, both of us having done these other projects that work on recent history, where we’ve had the opportunity to dialogue with people who have shaped longer histories in different ways, challenges that. Moving into 2001, into our own period where we helped in small ways to be a part of, it was just so clear that that kind of crescendo or abeyance model just doesn’t make sense. And it’s not to say we’ve always had a peak high period, but just that this disappearance and then emergence narrative really doesn’t serve any of us well. I think there’s a kind of arrogance in that for some people. But there’s also a kind of earnestness. People want to know where this all came from. Hopefully, like Emily was saying, the book can be a resource and gift for people who are really trying to have a sense of the traditions that they themselves come from, even without necessarily being steeped in all of the twists and turns of that tradition.

Maxximilian Seijo: In a way, I think that we’re already getting into this question with both of your lovely answers. But it seems to us that part of the stakes of your co-edited book are intervening in a world where many on the left understand neoliberalism in what we might call somewhat monolithic terms. That is, as the New Deal died, the onset of the Reagan and Thatcher era intervened with and wiped out some of the ambivalent and unequal gains of the New Deal. Some might say the left lost and retrenched into academia to wait for history to catch up once again. In your book, you acknowledge the scarcity and violence of this era. But it also seems that you’re actively destabilizing this rather simplistic fall narrative. We were wondering if you could say a bit more about this history you’re recovering, maybe why this prevailing fall of the left story has proven so durable, and why it’s wrong?

Emily Hobson: Yeah, I’ll start with the fall of the left question. This is snarky, but I do think one of the reasons that academic histories have often repeated this idea of the fall of the left after the 1960s is a form of projection by those historians who have written some of those narratives and then left activism, or left very significant involvement in movement work. So they didn’t see other things that were going on because they were not involved, or they felt disconnected from them because they were no longer at the center. This dovetails with the notion that, with the rise and proliferation of multiple kinds of feminist, queer, Chicano, indigenous, Black, and Latinx forms of activism, the proliferation of multiple tendencies that are also shaped by demographic changes in the US after 1965, white guys are no longer at this center of history. Therefore, that kind of universalistic conception of mass politics appears to no longer be present or coherent. That’s what I mean about a snarky response, but still one I believe in.

One of the things that we’re looking at in this book is the importance, utility, and vibrancy of a multi-tendency way of thinking about movement building, the left, and radicalism, or not necessarily conflating the left and radicalism but certainly seeing them as interconnected. Even that itself–not necessarily equating the left and radicalism–reflects an effort at understanding a multi-tendency politics. It’s the richness of looking at social movements through disagreement and understanding. That is, disagreement and conflict among activists is generative. It can also lead to organizations or networks falling apart, or even mistrust. It can be fomented by agents of the state. This is fundamental to my thinking that I learned early on. I credit this to having had the great privilege of working with and learning from Robin Kelley and Ruthie Gilmore.

Another key mentor not at USC I count among historians is Laura Briggs. They all kind of talked about how looking at disagreement shows relationships. People don’t disagree with each other unless they’re in some kind of relationship with each other, even if it’s a relationship of distant cousins within a set of movement networks. So I think the idea of the fall of the left is predicated on the idea that there has to be one winning model and everybody has to battle over what the winning model is, rather than the idea that there are multiple kinds of movements and tendencies. They influence each other. They’re in conversation with each other. Sometimes that’s in conflict. But it is also very generative. And it provides opportunities for transformative change and for a different kind of mass politics.

Dan Berger: Yeah, I think that’s so excellent and well said. I think the fall of the left narrative allows not only the erasure of movements that are resurfaced in Remaking Radicalism, but also allows a rosier view of the left in the time period when people are saying it existed. It’s like, “So we had the great thing and then it disappeared because it won. Then, all of its winnings were erased. And then the left reemerged.” This is such a static view of every phase of that. One of the things we were really motivated by is recasting the narrative. I think the movements of the time period show the messiness–the wonderful, complicated, strategic, and tactical messiness–of movements at every step. But because of the things that Emily was just speaking about, it’s not that those dynamics of race, gender, or sexuality didn’t exist in the golden days of the left that this narrative projects, but that you can’t deny them in the same way in the time period that we’re looking at here. Because the leadership and reconfiguration of movement organizations is so pronounced. I know we’ll talk about this in a second, but the Combahee River Collective, as a formation in and of itself, but also in relationship with other black feminist organizations and other women of color feminist organizations, you can’t say that that’s not a thing. I think that really helps reorient our whole understanding of the time period.

The other piece around scarcity and violence that we talk about in the intro of the book is to really think about what the conditions are that give rise to movements looking the way that they do in the time periods that they operate in. And those questions of scarcity, which are being enforced in all kinds of violent ways, are really significant to how these movements take shape. Again, I think historians, activists or others who imbibe this fall of the left narrative reproduce those same logics of scarcity by trying to either override or just ignore the work that was happening during this time period. So we were interested in recuperating that and then trying to give some material evidence to how people engage violent regimes of scarcity. There’s a lot of insight here that movements have to offer.

Scott Ferguson: Before we move on to the Combahee statement, I was wondering if I could follow up and get you to talk a little bit about what I take to be rather false oppositions between an economic or class-based politics and a situated identitarian one. I was snooping around your endnotes in preparation for today and was chasing one early note in the introduction, where you’re giving us citations of various historians or other scholars who have tried to historicize the very period that you’re taking on. You name some of those who are offering what you call a Universalist story, which is a fall story usually about the white working man no longer being king. And of course, on this podcast, we would say that’s actually not universal. That’s actually radically contracted. One book that you reference, Lisa Duggan’s The Twilight of Equality? I was exploring it a little bit today. In reading her introduction, it seemed to me she was arguing that there has been a split in the movements between economically oriented movements and the identitarian and multicultural movements. And that, at the juncture she was writing in, the late 90s and early turn of the 21st century, these need to be brought back together. I guess what I wonder is, it seems like there’s a gap between what you are saying and what she’s saying. How do you position your work with respect to that? Was there no gap? Was there one in certain spaces and not others? I just would be curious to hear you talk about that.

Dan Berger: That’s really interesting. And while you’ve looked at The Twilight of Equality? far more recently than I have, I feel I want to go back to it.

Scott Ferguson: And I may be misreading.

Dan Berger: Well, no, I do think there are these different spaces, obviously. One thing that we really struggled with in the book, in a generative way, was trying to represent a geographic rift. We didn’t just want to reproduce what was happening in LA, San Francisco, and New York with a smattering of Chicago. We also have to contend with the fact that those are all major population centers that sustained left culture and left organization easier than then some other places. So to your point of whether there was a gap in some places but not others, I think the shape of movements does look really differently depending not only on when we’re talking about but also where we’re talking about. People and projects exist in these different kinds of temporalities that might allow some things to flourish. Again, I don’t want to speak for Duggan, but I think there’s something in that book about what kinds of politics reach a certain kind of mainstream? Or what kinds of politics get a certain kind of attention. I certainly think we could identify some gaps in terms of what achieves an amount of prominence, or what gets funding and the ways in which there are these different kinds of funding structures that reward those gaps–materially or socially reward those gaps. Maybe I’ll leave it there and let Emily jump in.

Emily Hobson: Yeah, I think one of Duggan’s goals in that book is to articulate a critique of the ways that constructions of identity get used to serve and advance neoliberalism. She critiques multiculturalist models that work towards representation at a superficial level, or that work towards an inclusion model without any kind of structural, economic, and anti-capitalist aspect of change. She’s also very critical of homonormativity within queer politics, and the ways that that, even when predicated on pushing forward minoritized and discriminated against identity and subject positions, gives up more radical, broad-based, and again, anti–capitalist alliances. Her discussion sort of operates in two registers. One is, as Dan said, looking at those forms of politics that hit the mainstream or popular media consciousness, and to criticize how more transformative and radical kinds of grassroots projects get thinned out on that way up to the popular. She’s also setting up some critiques that have really developed since her book of formations, like on carceral feminism and other kinds of things that nobody knows in a given year what’s exactly coming 10 years later. You have moments when certain kinds of feminist formations appear to be radical, but also are set up relationships that move in a different kind of direction, or in a direction that one would critique, especially looking back.

So I think that you’re right that there’s a disjuncture, but I also think that we’re in alignment to her argument because of the ways that she is operating on these two different registers. And there are documents in Remaking Radicalism that very clearly express the kind of intersectional analysis that we frame the book through. And others, of course, don’t. Others have something else to contribute that is interesting. Or they show tensions going on and show formations happening that maybe didn’t flourish later but that were significant at the time, and that have something else to offer.

William Saas: I just want to clarify something before we move on to discussing some of the documents out of the reader, and then I also want to underscore, reinforce, and endorse the snark. I find that really compelling because one of the things that really excites me about this book is it seems like there are multiple stages of it. I was like, “Oh, my God, I’ve been waiting for this.” This is the history that we always gloss over–that I’ve glossed over and that has been glossed over in books I have read. So this is amazing, it’ll be helpful as a teaching and organizing tool for sure. But what you’re not saying is that neoliberalism was not on the ascendancy. You’re not saying neoliberalism is not a thing, but that the stories of neoliberalism and its ascendancy too often negate, deny, and suppress these oppositional movements and histories. It’s super compelling how y’all just sweep the leg of so much of that left scholarship on neoliberalism. So again, thank you. Going back to one of those founding documents and where you situate the beginning of this reader in 1973, the Combahee River Collective Black feminist statement is from 1977, but it’s the first in your collection. And we won’t have time to talk about all of them, of course. But what we can do is ask you to say a little bit more about your intention and purpose for starting off with the Combahee River Collective’s Black feminist statement and the place of that document in the broader history that you’ve curated.

Emily Hobson: I think we always knew, or knew very early on, that the Combahee statement would be in the book. We were trying to advance, among other things, a history of intersectional analysis from multiple sources. Because when I teach my students about the real meat of intersectional analysis and its history, I say, “Okay, the term is from Kimberlé Crenshaw. It’s from this article on this particular analysis of law. But she herself points to earlier references. She’s always talked about that. And we can trace that. Ideas also come from movements. Nobody is this suis generis thinker.”

So we knew it would be central. We knew we wanted to foreground the multiple movement sources of this mode of thinking and critique. Then, as we were talking about it, we realized we didn’t have to start the book exactly chronologically. I’ll also say that the framework of the book is 1973 to 2001, but we have a couple of documents that precede 1973 that we think kind of suggest some of the shifts that really start to gel and become amplified after 1973. There are also a couple documents right after 2001 that reflect dimensions of antiwar activism in that era. Once we had decided that we didn’t have to be super by the book about a chronology, it made a lot of sense to begin the book with Combahee because it so beautifully crystallizes the project, and in and of itself, is an important document. It is also one that really reflects our approach to a usable past. It’s gained importance and attention in the last several years. It really helps to ground people’s way of understanding the ways that an intersectional analysis doesn’t leave out class. Because the Combahee statement is explicitly socialist. It’s also because the statement is complicated and tricky in the ways that it uses the idea of identity. It coins the notion of identity politics, but it defines it in a very different way than we usually think about–in a non-identitarian way. It does so in a way that the contemporary language includes things like centering the most marginalized. That kind of approach would be one of the ways I think about a contemporary translation.

Also one of the reasons that it’s powerful to start with Combahee is that it’s such a beautifully written statement. It was a little painful in that we wound up excerpting it for purposes of length. It felt painful to do that. But I also felt relieved that the popularization and increased attention to Combahee meant that it would be pretty easy for people to find the full statement, so we could highlight particular passages that are especially powerful to read alongside some of the others in the document. The last thing I’ll say is just that, when I look at the back of the table of contents, the document that follows immediately after the Combahee statement is an essay from Iris Morales called “Sterilized Puerto Ricans.” This really kind of reflects some of the influences that show up in Combahee. Members of Combahee had been working on issues of sterilization of women of color and came out of similar traditions or influences. Iris Morales is writing from the perspective of work from the Young Lords Party. So Combahee reflects that trajectory.

Dan Berger: Yeah, I would just add quickly, one of the things I’m most grateful for about this project is, when Emily and I first began talking about it, we decided very early on that we didn’t want to organize it chronologically. The book is organized in a series of thematic sections. I think that was really important for my own understanding and reflection on the period in that so many of the issues are resonant. They echo across these different campaigns and movements. We can see similar kinds of strategies or concerns show up in, for instance, campaigns against the far right, campaigns for indigenous sovereignty, anti-policing struggles, and so on. So if we think about this thematically, rather than chronologically, we can actually engage the conversations that were happening and continue to happen across movements much better than if we were like, “What’s everything that was published in 1982? What’s published in 1993? and so on. So it’s allowing us that freedom to think against a linear approach in keeping with the spirit of the movements.

And starting with Combahee, even though the book is not necessarily one that people will read in order, cover to cover, I think was symbolically, politically, and thematically important, because it really does frame the book. We were talking a few minutes ago about this approach to a golden age of left history that assumes a very narrow subjectivity of white industrial male workers as a universal totality. For us, one of the things we were thinking a lot about in the book, and why the Combahee statement is so important, is that a lot of movements, individual people, and organizations are trying to think about the totality. How do we understand social formations in this time period and the time period that we’re living in? What are the kinds of analytic formations as well as organizational formations or infrastructures that can best speak to the totality? There’s a way in which that’s a kind of age old question of the left. And yet, Combahee is such a breakthrough for the period in actually thinking the totality. In all of its complexity, and thinking about unity across difference, and all of the things that we’ve come to understand under this category of intersectionality, that’s part of what makes the document so important. And I don’t want to say what’s the best document in the book or something. That feels foolhardy. But I think it’s the clearest articulation of a movement generated document that tries to explain the totality. And in doing so, it gives a tremendous analytic advance, both in its context, and as Emily was saying, that is ongoing still to this day.

Scott Ferguson: I’ll tell you, that really resonates with me the way you framed that as an intervention into thinking the totality, because I’m really trying to rethink this time period too, but from the point of view of popular culture, blockbuster movies, and things like that. The kinds of theoretical texts that I’ve relied on and have certainly complicated over the years are these tremendous volumes by people like Frederic Jameson. There’s maybe a little bit of snark here, but I’ve been returning to that text. I just read it over again, cover to cover. It’s pretty shocking, for all of the merits of that work, the way he insists that he, and the carrying on of the Marxist critical theory tradition, is thinking the totality in its historicity and complexity. Yet what he refers to, just constantly, as the new social movements are all just particularist. They’re all part of this kind of chaotic nominalism of the postmodern, neoliberal order. However, what your project is showing, as you’ve just said, is that that is not true. There was an erasure going on there, and that there’s another history to tell. You’re telling that history from the point of view of the movements. What does popular culture look like when you recognize what’s being repressed and refracted in popular culture, and when it’s not just simply a fall story? There’s all kinds of interesting back pressure.

Dan Berger: Yeah, that point is so well taken. The whole new social movements framework, in some ways, was an advance against the erasure and snarky dismissal. But in and of itself, it was such a profound and disrespectful erasure of what those movements were with their own temporalities and politics.

Emily Hobson: I will say that it’s a framework that comes out of sociology, which I have learned to respect much more over time, but I am supposed to sneer at it as a historian. The critique I have of the new social movements frame as it comes out of sociology is based on the ways it is constantly trying to find a type. Like here is the women’s movement and it is about the constitution of the category of women in this way that actively seeks to strip out race, class, and even sexuality in a way. Although, it kind of keeps sexuality as central to the category of citizenship, or any other facet of the ways in which womanhood as a category is differentially structured. So when we start to recast things and understand that identity categories are never monolithic, but rather inherently historically constructed through difference, then things start to look different. That’s where I think the new social movements, at least the traditional conception of new social movement theory, has to absorb that understanding or it just can’t work anymore.

Maxximilian Seijo: What I’m liking about this interview is the way we are also meta-reflecting on how important this book is for us in our work as we’re processing and moving through it. It makes me think, in your articulation of this new intersectional totality, which I want to dig into another particular moment of, there is a sense of a gathering in the way this book functions as a practice of historicizing, but also as what we might even call a performance of the social movements that you’re working with, thinking through, and parsing out in this history. In light of that practice, I wanted to zoom back in on one of the particular nodes of this gathering so that we might think about today a little differently. Here, I am thinking of the activism of ACT UP and related organizations fighting for all sorts of rights and against all sorts of scarcities and violences during the AIDS epidemic. Using their 1987 AIDS Action Pledge, which you excerpt and republish in your book, I’m actually going to read some of the demands which I’ve abridged a little bit. There’s a lot we could go through, but this may help our listeners get a sense of what ACT UP is calling for. They write: “We joined together to demand (1) a massive funding to end the AIDS epidemic made available from local, state, and federal governments for research, care, education, anonymous testing programs, and any and all treatments; (2) a federally funded education program; (3) centrally coordinated research; (4) a free nationalized health care system; (5) public accountability; (6) a worldwide culturally sensitive funding program,” and so on. Even just these demands shatter any notion that this is a purely identitarian movement, or focused solely on some reductive sense of identity that is not dealing with political economy. So in setting up this question, I was wondering if we could ask what ACT UP is perhaps for our listeners who don’t know where it came from, what it accomplished, and on your reading, what we might learn from ACT UP’s struggle for health justice, especially in light of our ongoing COVID-19 pandemic?

Emily Hobson: Yeah, I’m so excited to talk about the AIDS Action Pledge statement and also about ACT UP. One thing I’ll say is this is not actually a statement written by ACT UP. It’s written by the AIDS Action Pledge, which is a separate organization that preceded ACT UP. The reason it’s useful to note that is because, while ACT UP was absolutely far and away the strongest, most vibrant model of AIDS direct action organizing, there were a few antecedents that indicate the necessity of experimentation with multiple kinds of responses. There are these antecedents we need to kind of think through them, and we need to credit them. But also, sometimes one just really nails it.

For me, what’s really important about the AIDS Action Pledge statement is both the structural analysis that it presents, which then became very central for ACT UP. The “AIDS Action Pledge” was written by an organization called AIDS Action Pledge, and then shaped other kinds of demands that ACT UP made. But as an organization, the AIDS Action Pledge began in 1986 in San Francisco, and it was modeled on the Pledge of Resistance, which was a Central American solidarity network that formed to get people to commit direct action, including civil disobedience to protest US military and other forms of intervention in Central America. It was queer folks who had been in Central American solidarity work, who were starting to try to look for pathways towards a stronger, more protest-based AIDS movement, and who formulated this model of how the Pledge of Resistance has been successful, gets people to make a commitment, and gives them a way to think about showing up.

So let’s start a pledge related to AIDS direct action and start to organize some direct actions that we ask people to show up to. Similar kinds of histories shaped the formation of ACT UP in New York about six months later in March 1987. There was this kind of rumbling happening and multiple kinds of experimentation. Similarly, the Silence=Death image and logo was not created by ACT UP but by a small collective of artists, among them being Avram Finkelstein, who’s written about this really beautifully in a memoir called, After Silence. They meditated over what’s going to be a powerful image, then created the poster, and finally hired an advertising company to wheat paste it all over New York City to give off this impression of action that actually hasn’t really happened yet. That kind of gives people a visual language to think about the necessity of action. So those are some little caveats to thinking about the relationship between this pledge and Act Up.

What I would say about some of the power of ACT UP is that it forms in March 1987. The acronym is the AIDS Coalition To Unleash Power. Its first action is on Wall Street to protest the price of AZT, which is the first approved drug to treat people with AIDS. And ultimately, AZT makes its way into the antiretroviral cocktail that after 1996 is really effective at treating HIV disease. But initially, AZT is the only thing. It actually ended up being toxic for many people, but people were seeking access to any form of treatment. So ACT UP immediately proves to be successful in getting the company that has produced AZT, Burroughs-Wellcome, to drop its price through direct action on Wall Street. By the end of 1987, and certainly by 1988, other groups around the country that had begun to work towards protest and direct action responses around the AIDS crisis began to call themselves ACT UP. The AIDS Action Pledge in San Francisco became San Francisco ACT UP by 1988. Some similar dynamics happen in some other cities. 

The other thing that is in the pledge is they say at the beginning, “We believe the AIDS crisis calls for a broad movement actively engaged in ending the epidemic. We recognize that AIDS has had a devastating impact on the lesbian and gay community. We further recognize that the AIDS crisis disproportionately affects men and women of color. And these strategies to fight this crisis must incorporate these understandings.” For me, that’s also very central to the structural analysis they’re posing in that the bulk of AIDS activism initially comes out of the lesbian and gay community. And the power that it has is to understand a virus doesn’t care what you say you are, how you organize, or what you call yourself.

Also, pandemics both amplify and reflect existing inequalities. Health is the outcome of the circumstances in which we live. Both in making demands like a national health care system, and in recasting what it means to think about health and what it means to think about who gets to do health activism–kind of recasting the patient or the ill person as an expert–a lot of ACT UP’s power lies in its analysis, as well as the visuals, tactics, individual actions, and the chance. There’s so much that people have talked about in terms of the visual and media impacts of ACT UP that I think are really important, but that also reflect the same kind of analysis that we’ve been talking about throughout the interview and that are critical right now under COVID-19. To understand that COVID-19, again, both amplifies and reflects structural inequality in who gets sick, why they do, who’s vulnerable, who gets access to a vaccine or treatment, and so on–both in the US and globally.

Dan Berger: Yeah, the history of ACT UP specifically and the AIDS movement generally offer so many lessons for the present in the way that Emily was laying out, including that health is an organizing principle. It’s a kind of foundation of organizing. Viruses both affect everybody and index inequality at the same time. We can see all manner of capitalist privation’s power to decide who lives and who dies based on access to medicine. And here are two things about that history that are really important. The internationalism of the AIDS movement is super critical. That internationalism is about making medicine available for everyone. So it’s not just a national public health infrastructure, but a global public health infrastructure that includes incarcerated and detained people. The other thing I’ll say just because I spent a lot of time in Philadelphia and feel very loyal to that city is that ACT UP Philly continues to exist. The history of ACT UP is often narrated through New York and San Francisco. With movements generally, there are lots of other examples and geographies where struggle continues. The AIDS movement is a really good example of that.

Emily Hobson: I would just also add, one of the things I really credit ACT UP Philly with is that it remains really central in work to confront the connections between HIV and the carceral state. Both ACT UP Philly, and a number of other groups that have developed in and around Philadelphia connected to HIV and AIDS movements, work among people in jails and prisons, and people who were formerly incarcerated. You can see a little bit of that in some of the AIDS Action Pledge. There’s an opposition to quarantine, mandatory testing, and other kinds of coercion and discrimination. That is definitely within ACT UP as well. Prison projects and opposition to HIV criminalization became really important strands. They developed beyond the height of most ACT UP groups, but really kind of survive and are well expressed in ACT UP Philly.

William Saas: Another striking way that this project helps us correct, put the lie to, or offer a different account of the fragmentation and age of fracture kind of stuff is the thematic unity approach. But there’s also like a continuity in the sorts of demands that we see listed in the documents. We wanted to jump about 10 years ahead of where we just were and talk a little bit about the Black freedom agenda for the 21st century, which was put out in 1998 by the Black Radical Congress. You both write that that agenda self consciously blended the Black Panther’s 10-point program, the Freedom Charter of the African National Congress, and the feminist vision of the Combahee River Collective statement. So we’re gonna go through some of the headings from the Black Radical Congress’s agenda, and then we’d like to have you help us contextualize this organization and its demands for us.

To paraphrase: (1) We want an end to the exploitation of corporate capitalism; (2) We want freedom, self determination, and fully human rights; (3) We want a social policy agenda which invests in human beings; (4) We want a comprehensive national economics policy which places the interests of people above profits; (5) We want a society which allows for the healthy and positive development of our children; (6) We want justice in the legal system; (7) We want an end to police brutality and state terrorism in our communities; (8) We want a clean and healthy environment for our people; (9) We want full employment and a guaranteed income for all those unable to work; (10) We want civil rights, affirmative action, and compensation for centuries of institutional racism; (11) We want liberation for all oppressed people throughout the world; and (12) We want a real democracy in the United States.

This is an incredible set of very intersectional demands here. Could you help us talk through them? Or can you tell us a little bit about the Black Radical Congress’s agenda and it’s place within your project?

Dan Berger: Yeah, thanks for that and for highlighting some of what is so profound about the document. There’s a lot there. I think it speaks to a certain kind of common sense among Black radical organizing in the 1990s that is often elided, given that we’ve been speaking about how we moved from a kind of 60s high point to Black Lives Matter. In 2014-2015, there were all of these comparisons about how Black Lives Matter is not your granddaddy’s civil rights movement–to take one slogan that was circulating around. Everything just becomes these kind of generationally polarized formations with a vast liquid in between. So the BRC really helps fill in the gaps of that, and also shows some of the political logics and mentorship that created the foundations for Black Lives Matter.

But I’m also struck by, even in our attempt in that little headnote to contextualize a document, how partial that contextualization is. Our head note references include the Black Panther Party statement, Combahee statement, and the ANC Freedom Charter–which is certainly something that the BRC was very consciously drawing on since South Africa was newly independent of apartheid by that time. But there are other connections as well. Some of the same people that helped shape the Black Radical Congress were also involved in drafting the African American Women in Defense of Ourselves statement, which is also excerpted earlier in the book. This was a group of Black women coming together in support of Anita Hill and in opposition to the Clarence Thomas appointment to the Supreme Court. Something that I didn’t fully appreciate while we were putting together the book but have come to learn more as a result of some current research that I’m working on, is how a lot of the BRC’s framing in that platform was, while more developed and evolved, pretty similar to an effort in the early 1980s of something called the National Black Independent Political Party, which came out of the National Black Political Convention movements of the 1970s as attempts to provide a kind of national infrastructure for different formations of Black power.

And that connection is not simply symbolic. It’s some of the same people who were organizing in 1980 and were still around in 1998. Someone like Manning Marable comes to mind as well as Zoharah Simmons, who was a SNCC worker that I’m writing about currently that was very involved in NBIPP and was also part of the Black Radical Congress. We see this together with the younger generation through people like Barbara Ransby, who was involved in African American Women in Defense of Ourselves, but not NBIPP because she was too young. But then, she plays a leading role in Black Radical Congress. So I think that statement is so revelatory both for its rejection of the 1990s doxa of neoliberalism and for the ways that it brings together a real in depth and common sense understanding of a Black radical tradition. And we can see that tradition having more success in 1998. The Black Radical Congress gets a lot more attention than the National Black Independent Political Party, but these are ideas that have been pursued, workshopped, and developed over generations at that point.

Emily Hobson: Yeah, there are two things that I really recall about the creation of the BRC, its statement, and the impact of it as it rolled out. One was definitely the ways that its creation taught me about the range of mentors and movement veterans to look to. The ways I was aware of people coming together in one room and the many different political trajectories and generational moments they represented, just sort of seeing that, taught me a lot and busted what Dan references as this simple binary of the civil rights generation and BLM generation. It taught me a lot about everything in between and beyond.

Another thing is one of the real kind of interventions of the Black Radical Congress was it’s simultaneous engagement with policy and electoral politics, and also a very firm rejection of, as it notes in its last point about a real democracy, a two party system, and an effort to think about electoral politics beyond the Democratic Party. It says “We favor the abolition of the electoral system, proportional representation, and an end to the two party system. We support a new mass political party.” There’s kind of an implication of maybe multiple political parties. So I think that there’s this interesting kind of balance. There were juxtapositions of statements between some fairly traditionally legal and policy questions that all sorts of liberals have paid attention to, such as affirmative action, but from a left perspective. And it does so while simultaneously thinking beyond that as the only horizon of politics and how some of those questions are also linked to fights over reparations. So those are a few things that I would add.

Dan Berger: I think it’s also important now when considering some on the left saying, “Oh, Defund the Police is not polling well,” or “It was polling really well during the rebellions, but now it’s not polling well so what’s going on?” It’s like the people have elected a wrong leader so we must replace the people. I think that the BRC statement shows how you engage in mass politics by fighting for what you believe in and you build the constituencies for that. Like Emily was saying, that combination of emphasis on independent politics, that it’s not about Democratic Party entryism, it’s about wanting to recast the political fields. We want to make the political field responsive to us. And there are some pragmatics to that. But those pragmatics don’t come at the expense of the kind of political vision or political project. So it’s not like we’re going to sacrifice reparations in order to get a nod from the Democratic Party platform. It’s like, “Here is our political vision.” I think the breadth of that is really significant.

Scott Ferguson: We’ve been drawing numerous connections already between the past and present, but I want to give you an opportunity to take that question in a more direct way. What kinds of lessons does this volume offer a contemporary left? And I’ll add to that: coming back to something we started with, given how much it at least seems to me that politics and what is contestable or legible has just radically shifted since you started this project, how have these texts spoken to you when you maybe first came to them in 2011, 2012, or 2013, as opposed to when this went to press and at this very moment?

Dan Berger: Yeah, that’s a great question. In some ways it’s like four different political moments right now than when we began. I think we’ve both been on that kind of roller coaster a bit, but still using our own partial limited reflections on our understanding of the present in order to curate the volume. So there were some things that we knew were always going to be in there. We began to say this a little bit in the intro, but we also were inspired by the movements of the time period to really help us rethink the shape of the volume and documents that absolutely need to be in there. The book that exists is about a third longer than what it was supposed to be. The draft that we started to turn in to the publisher was a third longer than what was published, so it’s a very partial volume. I think there’s something to how conscious we are of how partial it is that is inspiring. This is a drop in the bucket of the kinds of things that are out there. We tried to curate it in a way that people could see this sort of ongoing conversation.

One thing that is just continually inspiring to me is the Black Hills International Survival Gathering, and the kinds of connections that were demonstrated with the international gathering anchored in indigenous sovereignty claims, and brought together by various indigenous peoples throughout the Americas alongside sort of settler, anti-nuclear, anarchists, and environmentalist activists in South Dakota–thousands of people in South Dakota in 1980. Some of the documents that we have in the book, like an excerpt of John Trudell’s speech, “We Are Power,” is something that I was always really inspired by. Reading through that statement in the context of the height of Trumpism and seeing Trudell’s rejection of settler colonial logic and a real understanding that we ourselves our power, was so profound as a “keeping the faith” sort of document. Rereading it in the context of protests at Standing Rock and Black Lives Matter protests was such a vindication of the fact that we are power. I came back to that a lot.

I came back to Mab Segrest’s “A Bridge, Not a Wedge,” where she’s offering this notion of queer socialism in the context of fighting the right, but also in the context of resisting race-blind and lesbian and gay NGO forms of activism, and in a way that really nicely bookends the Combahee Statement. It’s 20 years later. It’s a different historical context, but it offers a real profound sense of how to understand the moment. I also think of someone like James Yaki Sayles’ essay, “War for the Cities.” That is a really astute diagnosis of what we would now call gentrification and the role that hyper-policing, or just policing in general, play in enforcing gentrification. In his analysis of urban struggle, he was thinking through that and writing that from Stateville prison in Southern Illinois, and that essay originally appeared in a prison publication that he was making. 

Again, thinking through these different scales of geography of how and where political knowledge circulates was a source of inspiration in crafting the book and also something that I hope people reading it can look at now. We can get beyond our bubble, whether that’s a geographic bubble of a particular organization that we work with, or it’s a social media silo. We can actually recognize the breadth of rebellion that we are living within. As a point for non-sectarianism, I would say, as we were curating this, we really resisted very theoretical documents and various sectarian documents in order to anchor things that were more action-oriented. It pains me to see the reproduction of certain sectarian logics, and I hope that this book can be an antidote towards that.

Emily Hobson: Yeah, I would add how we haven’t really said anything about the structure of the sections of the book and the parts of the book. I think that it’s useful here to note those sections as reflecting insights that we can really draw on, including some kind of attention to the international that has been missing too much in the last 10 years. So here’s the structure of the book: there’s a section called “Bodies and Lives” that has the bulk of the very explicitly feminist and queer material, but also includes a lot on labor, fighting the right, issues of welfare, and cuts to social services and responses against that. Then there’s “Walls and Gates,” which has the bulk of the police and prison abolition, housing, anti-gentrification, and rural struggles. Then, there’s the section called “Borders and Maps,” which has the bulk of the anti-militarist, anti-war, anti-imperialist material, but it’s organized by these three areas around which a lot of mobilization was concentrated, so it’s relatively chronologically organized in some contrast to some of the other sections. Most of the material in that first section of “Borders and Maps” is around Central American and other Latin American solidarity movements, but there are a few other sites. It’s kind of the post-Vietnam section.

Then, there’s a section on anti-imperialism into global justice that begins primarily with African and anti-apartheid solidarity and moves towards the global justice movement. Then, “Not in Our Name” is a lot about opposition to the War on Terror and Palestinian solidarity. And then the final section is “Utopias and Dystopias,” which has the bulk of the decolonial, environmental, anti-nuclear, and broad-left visions material. So for me, the utility of those sections is that, in addition to pushing back against any rigid conception of identity and looking at the interplay between movements, they get us to think about location–where are we located, what are we looking to, and what’s the scale of our politics. They draw, in some ways, on the concept of situated knowledges and the ways that scales of struggle are nested within each other.

Thinking about labor in that domestic sense is interconnected with thinking about it globally, and thinking about work against sexual violence is a way to think about colonialism and genocide and is an important pathway for thikning of those connections, and so on. I see a lot of places for inspiration around virtually everything going on right now, like abolition, climate justice, demand for Medicare for All, or the Green New Deal, and mutual aid–certainly a lot on fighting the right and fighting fascism. I think that the attention to the geographic and the centrality of internationalism is something that the book offers that I really hope we see more of in coming years. Not monolithically through a “here’s the privileged US, and it’s all about solidarity with and inspiration from a romanticization of distant sites” lens, but really through a recognition of the interconnection and centrality of immigrant rights work within the United States as interconnected with anti-imperialism globally, and so on.

Maxximilian Seijo: Before we wrap up this really thought provoking conversation, seeing as this podcast is called Money on the Left after all, we thought we would give you both some time to teach us about public money on the left. Seeing as you both have wide ranging backgrounds and expertise in the history of grassroots movements, we wanted to ask, how on your analysis has money shaped left-politics during the neoliberal era, and perhaps what can we glean from these previous politicizations of money and where might we also push beyond them?

Emily Hobson: Before the interview, Dan and I were joking that we were glad that you were really only asking us one question about money on the left since I’m not an expert on monetary theory. But I do think this is a really terrific question and I’m excited to be able to think so broadly about some of the topics of the podcast through the book. The broadest connection that I see is that, starting in the middle of the early two thousands, there’s an increasingly coherent and strong critique, as I gestured to in my own self-introduction, of nonprofits–like of nonprofitization and the nonprofit form. Increasingly, a contrast is sometimes set up in very binary terms between either the nonprofit model or the mutual aid model. One of the things that the broad scope of the book gives me some insight into is the ways that this contrast needs to be understood further, as both modes of it are really conditioned by the growth of what Ruthie Gilmore talks about as the anti-state state. They are both responses to austerity and scarcity. Therefore, we can’t look towards a pure model, or a politics of purity, about the ways we think about money, public or not. So that’s my sort of broad thought.

In terms of documents in the book that really helped us think through some of the ways money has been politicized, first of all, early in the book, there’s Coretta Scott King’s statement to Congress on behalf of the Humphrey Hawkins bill and full employment. That’s a really clear model. Also, I think the ACORN People’s Platform is pretty useful in thinking about a set of demands. This document in many ways represents a fairly shared consensus about a call for publicly owned utilities, publicly owned services, and a belief in a welfare state, but rearticulated through the anti-poverty movement.

I would also say James Boggs’ statement on rebuilding Detroit is an interesting statement to think about. Then broadly, in connection to some of the internationalist stuff that I was talking about, many different documents have broadly called for “____, not War,” or a redirection of defense funds. I think it’s useful to think through both the power of that demand, and why it seems to have fallen out of favor, but also some of the limits of the money for “blank” not war framing. In some ways, the money for “blank” not war is really just about redirecting money. Like money shouldn’t be over here, it should be over here. But it’s still imagining money as a finite thing. It doesn’t necessarily differentiate super well between public money and a divestment strategy from corporations. So I think there’s definitely some models that are really interesting and some places where we could look at some of the consequences of perhaps not having Modern Monetary Theory right there at the center, if you want to read the book that way.

Dan Berger: Yeah, I think there’s that kind of incipient consciousness around money that has some tremendous breakthroughs and some checkered unevenness. But particularly in the anti-imperialist work and in the abolitionist work, there is a recognition that the U.S. has an infinite capacity and seemingly infinite desire to fund bombs, weapons of war, prisons, and police. So I think even though some of those movements respond with a finite capacity thinking of “transfer X to Y,” with a one-to-one capacity. I think that the critique was really valuable. Using all this scarcity talk when it comes to public education or public assistance, or other kinds of public benefits, goes out the window when it comes to the security state and the military state.

So I think that consciousness around money, while hopefully not overstepping my bounds, is to say it’s maybe helpful in the genealogy of Modern Monetary Theory itself because my understanding of MMT is that it’s a descriptive project first of all. It says, “how does money work?” It’s recognizing that it’s not this sort of pie that if you take a slice of pie over here, you can’t have a slice of pie over there. Clearly the history of incarceration and war making shows that it’s not a pie, and that there are infinite non-zero-sum capacities at work. The other piece, just to add on to what Emily was saying, is, across a series of documents, including several that we’ve talked about already, we see the adamant insistence of a budget being a moral document. The demands for full employment or the demands that no expense be saved when it comes to our priorities, are examples. I don’t think people necessarily, then or now, have that fully figured out as a sort of economic program. I know I don’t. But in a way, that really helps us rethink what money is and how money both does work and should work. I think we see a lot of incipient brilliance here, even in its messiness.

William Saas: Maybe, especially for its messiness, right? Emily, you mentioned Coretta Scott King and that got me thinking, this episode, our conversation, has a great companion in our first episode, which is in an interview with the historian David Stein on the history of the job guarantee and fights for the job guarantee. Your project and this book, Remaking Radicalism, also reminds me of that conversation in that when we and David wrapped up, it was about what are the takeaways from studying advocacy for the job guarantee, and through specifically Coretta Scott King and the Humphrey Hawkins Act in the context of the Civil Rights Movement and beyond. One of his takeaways was about how it’s a lot of work, it’s a huge project, and they had a lot of people. If we have any hope of achieving what they were trying to achieve, then that’s a lot. In one sense, it’s empowering to study that history, and in the other sense, it’s very sobering. I think that’s one effect I have from this project too, which is that it recovers all of these fights and histories of these amazing activists and organizers, but there’s still neoliberalism. So I guess, as a closing impossible question to answer, is it possible to land in both places? Do you feel like you skew on the empowerment or more to the sobering side in the takeaway from your work on this book?

Emily Hobson: I think one worthy critique to engage around the anthology, or perhaps just how we talk about it, might be the “sunny” read of the anthology. Look at all this stuff that was happening. It was all happening at the same time, and so that shows this breadth of mobilization. We’ve brought all these documents together but it’s not necessarily true that everybody reflected in all of those documents was aware of everything else going on. So, from an experiential level, I certainly experienced a sense of frequent moments of isolation of this little battle over here being perceived as totally disconnected from these battles over here. There have been moments of coming together where there was a sense of a common movement, “capital M,” and not just a political economic articulation between issues, but people making rhetorical and network organization articulation between struggles. It wasn’t always necessarily apparent in every moment.

I suppose that’s the possibly sobering answer. It’s very possible for lots of things to be going on at the same time and a huge amount of activity and amazing work being done, and yet, it’s still not something that gains power and makes fundamental changes. But I do think that sunny side is there. There is a lot to be said for the strategies that attempt to build at least coalition, if not absolute unity. I’m not sure I necessarily think unity is always such a good thing. In fact, I’m pretty confident that I don’t think it’s always such a good thing. But, at least a willingness to work together and solidarity and a respect for multi-tendency approaches because that can make a lot out of many things that seem disconnected.

Dan Berger: Yeah, that’s a good question. I feel like I can really answer on the sunny side, and I can really answer on the bleak side, and having the expert synthesis of them is complicated. I’m working now on a biography of two long-time, but little known Black radicals. Part of the point of the book is to say when we pay attention to the grassroots and the people who are not very well known, things are more interesting because people outlast the heyday of a particular point in time and continue to experiment and try new thing. The point of experimentation is that sometimes things don’t work, and I think there’s lots of things in Remaking Radicalism to that.

I think we really leaned into the experimentation, or what movements were doing. I think there were some things in there that didn’t necessarily work, but I hope that people still draw some sustenance from the experimentation and effort at experimentation. There’s a lot of value there. I just think the early eighties were a really hard time. I think a lot of the projects that existed, that people tried to bring up, didn’t make it. A lot of the people, particularly people who had some experiences before that time, got burnt out or depressed or needed a break or whatever. All sorts of things kind of happen. But I think there’s a spirit of experimentation and a mobilization that then could be engaged and activated, things like the AIDS movement, that came from somewhere.

Maxximilian Seijo: Well, Emily and Dan, this conversation has been such a pleasure. Thank you both so much for coming on Money on the Left.

Dan Berger: Thank you so much. It’s really a lot of fun.

Emily Hobson: Thank you so much. It was a real pleasure, and a very exciting conversation.

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

Ministry for the Future with Kim Stanley Robinson

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

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

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

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

Theme music by Hillbilly Motobike.

Link to our Patreon:

Link to our GoFundMe: 


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Ferguson: Us too.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

William Saas: Sounds great. 

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