by Scott Ferguson & Mark L., Adjunct Professor at the Invisible University
Mike Brown, Tamir Rice, Eric Garner, Freddie Gray, Sandra Bland: from Ferguson to Cleveland to New York to Baltimore to Waller County, the effects of systemic racism and racialized violence have once again become acutely visible in the United States. Those with a sense of history know that unchecked police violence against communities of color is nothing new but, rather, comprises a permanent feature of American society from its inception to today. With the rise of digital recording technologies and social media networks, however, such incidents become increasingly impossible to ignore. It is now possible, for instance, to witness a police shooting and its aftermath almost as it unfolds, and do so without establishment figures pretending that the struggle for civil rights ended in the 1960s.
The more present media technologies make racialized violence perceptible, the more we are able to address it. Yet the question remains: beyond expressions of collective outrage, beyond general calls to end racial discrimination and brutality, what can be done?
Ferguson, Missouri crystallizes both the direct brutality of contemporary racism and the far less visible systemic violence that conditions it. A recent Justice Department report showed that the city leadership uses the court system as a major source of revenue for the municipality. And Ferguson is not alone. As The New York Times has found, “Ferguson does not even rank among the top 20 municipalities in St. Louis County in the percentage of its budget drawn from court fines and fees.” Effectively, the county and its municipalities are using the court system to finance their operations, while imposing financial and regulatory obligations on its poorest, overwhelmingly Black citizens. Moreover, because of persistently high unemployment, residents are unable to pay the fines. This in turn leads to more fines, warrants and confrontational encounters with the police—encounters that can easily turn lethal. The court system may also directly send people to jail because of failure to pay fines.
In response to the public outcry, Missouri’s governor, Jay Nixon, has signed legislation that is intended to curb revenue-raising and private-profit-making from the traffic ticketing system. While the new legislation will eliminate charges for failure to appear in court, it simply lowers the percentage of revenue most cities can collect in this manner by a mere 10 percent. Missouri municipalities will continue to be allowed to fund their operations by criminalizing, fining, prosecuting, and jailing their poorest and least politically powerful citizens. This is the tiniest of victories and one that leaves structural core of systemic racism in America firmly in place, as the ongoing confrontations between Ferguson residents and the police visibly demonstrate.
The crux of this system, I wish to suggest, is the Liberal understanding of money that organizes contemporary political economy. The Liberal conception of money holds that it is a finite resource, a commodity like gold, silver or oil. As a limited, non-renewable, not producible resource, commodity money provides one answer to the problem of how a society allocates its goods. Essentially, it substitutes private competition over an artificially scarce ‘thing’ or ‘object’ for democratic dialogue and contestation over an unlimited public balance sheet. In this fashion, commodity money not only occludes the hidden and often racist policies that organize economic life, but also obscures the true possibilities for treating injustice: it accepts that the state is powerless over the money form.
Under this view, struggling municipalities have no choice but to find a “recession-proof revenue generator” since cities have few or no businesses from which to draw tax revenue. Local elected officials complain that criticism of the fee-extraction regime is “blaming the police officer or you’re blaming the municipality or blaming the judge for enforcing the law.” By contrast, the critique of commodity money concerns the law itself as a sociopolitical regime and the way this regime conditions such problems to begin with.
Liberal money asks us to accept that a heavily-armed gang (what Ta Nehisi Coates calls the police in such instances) sweeping into a community to enforce systematic exploitation is the only alternative on offer. Smart phones and social media are important tools that have allowed people to expose the sharp end of anti-Black state violence that results from this regime. What is needed, however, is a tool to expose and demystify the fundamental mechanics of money itself.
Modern Monetary Theory (MMT), I claim, is precisely such a tool. MMT economists reveal that money is an essentially limitless public instrument. They argue that government is constrained, not by its ability to borrow from the private sector or earn revenue through taxation, but only by the real resources and capacities that characterize a society and its environment at a given moment. This is a technical point, but one with profound political consequences. It allows us to trace the hidden ways that the Liberal conception of money as a finite commodity both structures and naturalizes the racialized oppressions of late financial capitalism. But it also radically expands the sorts of political transformations we can imagine and the types of changes we can demand from government.
The most important of these transformative ideas, and the one that goes furthest in immediately addressing racial injustice today, is MMT’s proposal for a federally-funded and locally-administered Job Guarantee. Ensuring that everyone has the opportunity to participate in meaningful work and be compensated with a living-wage and health care, the Job Guarantee promises to enfranchise those who have been systematically subordinated by, and excluded from. the formal employment market, to actively shape and repair damaged communities, and to raise the foundations of economic life from the bottom up.
MMT economist Mathew Forstater overtly links MMT’s Job Guarantee to the civil rights movement and its now largely-forgotten demands for full employment and economic enfranchisement. In his essay, “Jobs for All: Another Dream of the Rev. Dr. Martin Luther King, Jr,” Forstater reminds us how “Dr. King reiterated over and over again’ [that] ‘we need an economic bill of rights … guaranteeing a job to all people who want to work and are able to work.’ … Government [must] … become an employer of last resort.’ ‘We must develop a federal program of public works, retraining and jobs for all — so that none, white or Black, will have cause to feel threatened.’” Forstater summarizes King’s vision of public service job assurance as follows: “First, development of skills and education are outcomes not prerequisites, of the program. Second, the jobs are producing community and public services that are in short supply and that benefit the neediest communities. Third, the program generates incomes for individuals and families, communities, and the nation.”
Dr. King’s little-known advocacy for full employment came to a head in the year before his assassination. In that year, King called for a wholesale restructuring of the political economy of the United States. As he put it in his sermon of April 1967, “True compassion is more than flinging a coin to a beggar; it is not haphazard and superficial. It comes to see that an edifice which produces beggars needs restructuring.” Yet in an August speech titled, “Where Do We Go From Here,” he went further. King did more than just question the capitalist economy; he also proposed a concrete step forward. Government, he insisted, must guarantee every person living wage employment and/or a sufficient income.
In that speech, Dr. King pointed out that American capitalism had burdened African-American people with a double disability. He said Blacks were afflicted by both racism and by poverty, and that one cannot begin to address the former without first treating the latter. To do so, he argued, requires not mere charity or welfare, but a total structuring of the state and the market.
Now we realize that dislocations in the market operation of our economy and the prevalence of discrimination thrust people into idleness and bind them in constant or frequent unemployment against their will. … We also know that no matter how dynamically the economy develops and expands, it does not eliminate all poverty. … The problem indicates that our emphasis must be twofold: We must create full employment, or we must create incomes. … We are likely to find that the problem of housing, education, instead of preceding the elimination of poverty, will themselves be affected if poverty is first abolished. The poor, transformed into purchasers, will do a great deal on their own to alter housing decay. Negroes, who have a double disability, will have a greater effect on discrimination when they have the additional weapon of cash to use in their struggle.
Dr. King knew that full employment and guaranteed income would not just affect the material circumstances that conditioned racial discrimination and violence. He also argued that “a host of positive psychological changes inevitably will result from widespread economic security.” Such changes would contribute fundamentally to “[t]he dignity of the individual.” But perhaps most importantly, they would give systemically disenfranchised persons a political weapon for further social struggle.
Today, meanwhile, unemployment in the Black community remains stubbornly high. “[It] is well-known,” Forstater explains, “that in the United States the Black unemployment rate is always double the white rate, regardless of whether the economy is performing well or not.” Much like in King’s day, the problem of unemployment is a key factor responsible for disenfranchising the Black community and for undermining Black rights. The results reverberate throughout society in ways that are not always directly apparent. But what is most hidden from view, Forstater shows, is that structural unemployment is a policy choice (not a natural effect of a money economy), that in the United States this choice has been deeply shaped by racial discrimination, and that looking ahead we both can and must choose otherwise. Put another way, MMTers such as Forstater insist that what Friedrich Engels famously called the “reserve army” of the unemployed is, in truth, not a necessary feature of a capitalist economy as both Marxist critics and their mainstream interlocutors maintain. It is, rather, a myth perpetuated by the dominant classes to discipline and disenfranchise labor that capitalism’s critics can no longer afford to perpetuate as such.
Understanding Black un- and underemployment as a political decision rather than a market outcome also enables Forstater to throw new light on seemingly intractable problems, such as the growing crisis of state imprisonment, which disproportionately affects racial minorities. First, Forstater contends that “certain kinds of criminal activity are directly related to unemployment,” particularly since those who have been excluded from the formal economy often turn to illegal sources of income in order to survive. Next, he observes that the “official unemployment rate refers to the civilian noninstitutional population, which means that it also does not include… those in prison or jail.” Indeed, a study by Beckett and Western he cites indicates that “the official unemployment rate in the United States during the 1990s economic boom . . . would have been considerably higher if it had been adjusted for the . . . inmate population [which had] . . . surged to more than two million during the previous two decades.” If one extends Forstater’s analysis further, it then appears that prisons and jails become means to warehouse this discounted population, who are often compelled to work for wages far below minimum wage.
As a consequence, we have a situation in which the state implements a racist policy of structural unemployment and then creates a system of low-wage work camps to contain and exploit the social fallout. To make matters worse, when prisoners re-enter civil society, their criminal record radically reduces their job prospects, they are typically strapped with private debt accrued both before and during incarceration and, without anywhere to turn, they are the most likely group to be fined by cash-poor municipalities like Ferguson. This is the sort of vicious cycle that a public Job Guarantee can play a key role in reversing.
Instead of spending money to perpetuate this system, Forstater follows Dr. King in arguing for a federally-funded living-wage Job Guarantee, which aims to actively rebuild communities and serve urgent public needs. But whereas King often felt the need to cite midcentury Keynesian economists such as John Kenneth Galbraith to ensure Americans at the time that government can afford a full employment program based on existing tax revenues, Forstater and his MMT colleagues insist that the question of affordability obscures the issue and that the only obstacle to implementing a public Job Guarantee is political imagination and will.
The Liberal myth that government is revenue-constrained and must balance its budget is woven deeply into the collective psyche and impoverishes the imagination of everyday citizens and policymakers alike. Yet there is evidence that at the highest echelons of government and finance, this ideology is perpetuated consciously and constitutes a deliberate crime. For example, former Federal Reserve Chair Alan Greenspan, whose life’s work connected him to both policy circles and the financial industry, seems to understand full well that the federal government can create a much money as it wants and that only the limit to such spending are the real resources and capacities available for purchase. Perhaps more damning, however, are the words of economist Paul Samuelson. Samuelson once confessed that the need to balance the government’s budget is a “superstition” or “myth.” Yet he simultaneously insisted it is a necessary falsehood, which society needs in order to limit social spending.
I think there is an element of truth in the view that the superstition that the budget must be balanced at all times [is necessary]. Once it is debunked [that] takes away one of the bulwarks that every society must have against expenditure out of control. There must be discipline in the allocation of resources or you will have anarchistic chaos and inefficiency. And one of the functions of old fashioned religion was to scare people by sometimes what might be regarded as myths into behaving in a way that the long-run civilized life requires.
Samuelson admits that the purpose of the seemingly apolitical myth of the balanced budget is to artificially limit the allocation of resources, implicitly suggesting that this process is made easier by substituting an economic limit for a political one. We must interrogate Samuelson’s remark that this is necessary for a “civilized” society and ask: what is civilized about violent exploitation experienced by contemporary African-Americans today?
By disciplining the allocation of resources, Samuelson contends, we avoid “chaos.” Presumably, without the discipline of the balanced budget, there would be endless disorder in the legislature, and unruliness in our institutions and on our streets, as people engage in direct struggles over the nation’s resources. Yet what of the legislative gridlock and out-of-control culture wars and resentments that budget constraints precipitate presently? And how can one witness the oppression that takes place in Ferguson and other municipalities and not see administrative and civil chaos? How is a prison system that rivals the size of Soviet gulags not a vast archipelago of contained disorder for both its administrators and those who are fettered within its walls? And is it not the height of inefficiency and waste to consign millions of Americans to un- and underemployment, to deprive them of the ability to meaningfully participate in society?
Yet what if there was an alternative? What if we were able to build our economy around dignity, care and participation? That is what MMT suggests is possible — that we can organize an economy around full employment. If we chose to, we could implement a community-based job guarantee, where we matched community needs for childcare, smooth sidewalks and environmentally sustainable housing with those who wanted to work and participate in society as full members— where people of color can fight discrimination with the weapon of cash in their pocket, and the solidarity of their neighbors.
By early 1968, King and his fellow organizers began organizing the poor of all races for a march on Washington D.C. The Poor People’s Campaign, as it was called, demanded full employment and guaranteed income, among other measures. In May, the Poor People’s Campaign set up Resurrection City, a tent city on the National Mall in Washington D.C., where for six weeks, tens of thousands of poor people took up residence. There were speeches, rallies, and marches. Yet Dr. King, of course, could not be there among the people of Resurrection City, having fallen to an assassin’s bullet on the 4th of April.
The Johnson administration’s response to Resurrection City, meanwhile, was to put 20,000 regular Army troops on standby. Fearing that the occupiers were prepared takeover the nation’s capital and remain there until their demands were met, the federal government finally evicted the camp by force on June 24th, a few weeks after an assassin ended Robert F. Kennedy’s life. If this tremendous use of force suggests anything, it is that 1960s full employment politics did not seek technocratic reformism, as today’s critics of capitalism are prone to think of such efforts. Instead, they threatened to radically restructure the political and economic conditions of everyday life and, with this, transform the Black community’s position in American society.
The struggle for full employment continued well into the 1970s. Involving broad-based and cross-coalitional efforts between Civil Rights organizations, traditional liberals, trade unionists, the New Left, feminists, and gay and lesbian activists, such politics led to the first national “Full Employment Conference” in 1975 and culminated in the simultaneous passage and gutting of the so-called Humphrey-Hawkins Full Employment Act. Yet as the story goes, the ideological tide turned and the gutting of the Humphrey-Hawkins Bill signaled the end of mid-century full employment campaigns, which were quickly pushed aside and forgotten in the course of the neoliberal onslaught.
Today, the full employment politics that dominated the 1960s and 70s have succumbed to historical amnesia, while the economic oppression structural unemployment causes continues to afflict American society. However, MMT’s heterodox understanding of money gives the history of full employment politics fresh force, pointing the way to a new era of critique and contestation. MMT demonstrates that when we begin to treat money as a public and truly unlimited instrument, it becomes clear that government’s failure to provide full employment for the Black community (and American society as a whole) is the crime hiding behind the videos of police brutality. It is a crime of triple exploitation. The first is the creation of systematic unemployment. The second is the system of low-wage prison labor that contains and profits from the social repercussions of this unemployment. And the third is the targeting of the unemployed and formerly incarcerated as a source of revenue for local government operations.
Digital cameras and networks are vital for making visible and fighting against directly physical acts of state violence. Still, MMT offers an additional and indispensable conceptual tool for addressing the invisible violence of systemic unemployment that variously conditions these more readily graspable acts of brutality.
The Black Lives Matter movement is now actively exploiting the power of contemporary media technology to aggressively confront political leaders. As a recent article in The Nation has characterized it, BLM chapters are demanding that Americans value Black life and that they place this value “above the property rights of Ferguson and Baltimore residents, above the rituals of holiday commerce, and, yes, above the inspiring surge of a socialist presidential candidate.” Given the historical oppression exerted by white supremacy, the BLM intervention is both urgent and necessary.
As part of this intervention, BLM has created a comparatively less publicized list of demands for change wherein full employment features prominently. “Every individual has the human right to employment and a living wage,” states BLM’s “Vision for a New America.” “Inability to access employment and fair pay continues to marginalize our communities, ready us for imprisonment, and deny us of our right to a life with dignity.”
Regrettably, and for reasons that are in part out of the movement’s control, BLM’s demands for full employment have not yet been adequately heard and the Black employment crisis remains largely unknown outside of the Black community and those make it their business to know. One cannot help but wonder what BLM and other avowedly leftist movements might accomplish with a tool like Modern Monetary Theory and what a revolutionary weapon MMT stands to become in their hands. Moving forward, the historical efforts of Dr. King and other Civil Rights leaders provide important models, as does recent scholarship regarding race and full employment carried out by economist William A. Darity and his colleagues. But in an era defined by myths of insufficient taxation and falsehoods about government debt and “affordability,” addressing the invisible violence of systemic unemployment that conditions today’s spectacles of police brutality will only be possible if we are willing to expand our imagination regarding what money is and what it can be made to accomplish.
If one thinks that full employment is vital to liberation, then Modern Monetary Theory provides a roadmap for actualizing it.