Capturing the Battle for the Soul of Gotham City

I’ve been holding off on writing about The Dark Knight for some time. It’s impact on American culture can hardly be overstated but for a long time it just felt too close to home to tackle head on. It wasn’t until I rewatched the old Tim Burton Batman of 1989 that it started to click. Heath Ledger’s Joker, while original and alluring (most of all for succeeding in capturing that ever sought after and highly profitable “zeitgeist”) is not that difficult to understand. When compared to Jack Nickolson’s Joker of 89, our new and more nerve-touching Joker is another beast entirely – even if many of his defining scenes are ripped right out of the old. Christopher Nolan and David Goyer attempt to put their version of Batman and the Joker in a real city and act out real contemporary political issues but, in spite of its resounding success, The Dark Knight is mired in War on Terror ideology and will remain frozen in that time. Their placement of Batman in a real world Gotham only diminishes his fantastic potential of visualizing and story-fying our unconscious desires.

The joker is supposed to be a sort of reflection of Batman’s psyche. Where Batman is serious, the Joker is playful; where Batman an agent of order, the Joker chaos. Batman is not supposed to laugh, he is supposed to keep his city safe from crime and the forces of evil with a single-minded devotion. The Joker takes that attitude and flips it around to show the opposite side of human nature: the urge to indulge in our secret, immoral desires. The Joker commits murderous violence with glee where Batman pursues his capture with monk-like devotion. He takes them to the extreme just as Batman does only he relishes in the pure joy of stirring up trouble, like the young boy rebelling against his parents. The Nolan and Goyer movies do a good job of setting up this binary only to tear it down and show that the Joker has ulterior motives besides holding up a stained mirror to Batman. The only problem is that it has been done before. It’s the same the classic tale where the good guy’s motives are more pure, despite being roughed up a bit along the way. Burton’s Batman is, by contrast, basically two ego trips in a sandbox-city.

Tim Burton’s Batman is set in a Gotham that bristles with over-developed industrial capacity. Its grimy streets always appear in a never-ending forest of drab buildings that belong in a child’s imagination. The wide shots of Gotham’s streets are enhanced by a painted backdrop that suggests more buildings, more factories, more city. The set for this consciously over-stylized Batman evokes Ridley Scott’s Blade Runner and the fantasy of an American city whose corruption grows apace with its heavy industry. The grand finale of this comic-opera (sorry I couldn’t help myself, it is very operatic) culminates in a battle between the Joker and Batman atop a cathedral so high that one wonders if they have actually reached the heavens to deliver their dialogue. They jostle over who created who and, in a more hyperbolic/conceptual way, who is responsible for the plague of crime afflicting their great city. The whole movie seems so fantastically over-stylized, with Danny Elfman’s score soaring high for the more poignant moments and the set design reminiscent of other cartoon-cum-reality movies of the period like Dick Tracy, that the viewer forgets what time period this is supposed to take place in. Whats more, the Joker is actually kind of funny – he makes jokes. And if you’re not laughing, Jack Nicholson is doing plenty of laughing for you (seriously, he’s like a one-man laugh-track for a sit-com).

In contrast, our new Joker is out to make a serious point about human nature. Heath Ledger doesn’t really play his Joker as a reveler in the deed. His actions are all built up through an elaborate plan that snowballs fast forward – as if there was kernel of truth in the middle and all he had to do was kick it down the hill and it would roll up bigger and faster. The kernel is supposed to be an essential quality of humanity; he didn’t cause any of the chaos, he wants you to believe, he just gave Gotham citizens a little push to realize their true nature. Heath Ledger’s Joker is a philosopher out to make a point. He’s basically Thomas Hobbes mixed with a little pop-Nietzsche (meaning a misinterpreted Nietzsche). This is what captivated so many viewers back in 2008 – the same year there was a giant financial crash and the bewildered populace was wondering, without resolution, how, why, and what just happened. Granted this coincidence was just that: a coincidence that could not have been foreseen to line up so perfectly with a superhero film. That such an admittedly good movie came out at the same time as one of the greatest American crises was unfolding is one of those once-in-a-lifetime, reality-meets-fiction, chance occurrences. And Nolan and Goyer didn’t pass up on the opportunity that had befallen them either: their next movie to come after The Dark Knight in The Dark Knight Rises seized on the previous movie’s resonance and rounded out a trilogy that was all-but a foregone conclusion. It came out just in time for the popular response to the great 2008 financial crisis to finally see its day. It was about revolution, demagoguery, and dynastic revival. And it was terrible.

This caused such a stir that some of the big guns of the left weighed in on it.  Zizek [Dictatorship of the Proletariat in Gotham City] seemed to offer an apology for Bane’s revolutionary love with Graeber [Batman and the problem of constituent power] remarking on the film’s jumbled incoherence.  I won’t go into The Dark Knight Rises but this trilogy deserves a full treatment in its political ideology, so these essays are a good start.  I’ll just say for now that the first Nolan and Goyer film in Batman Begins is one of my favorite superhero movies and things only go downhill from there.

But before I get ahead of myself, it’s important to point out how impossible these movies would have been without the resounding success of Tim Burton’s Batman. It dazzled. It’s pacing was perfect. It’s dark-gothic tone was well maintained from start to finish. It felt so removed from reality. The entire movie boils down to a battle of egos at the sky-scrapping-cathedral heights of city-power. The Joker is primarily motivated by resentment at Batman stealing his press attention. Having already consolidated power in the crime world (a feat that could have easily happened without him becoming a cartoon-character) the Joker invades Gotham’s television programs to announce that he is even more flamboyant than Batman (who only wants to remain in the shadows and scare criminals). By the end of the movie, they are left alone atop that impossibly high cathedral with the police sealed off from the entrance. In the end, it was only a duel between the lord-protector of the great city on the verge of collapse and the parading lunatic who would rule it without concern for the people’s moral constitution. The battle took place in the mind of a child but it could resonate within the mind of an aspiring civil servant grown up into a position in government bureaucracy. It’s tone and demeanor would be repeated for years to come in Batman: The Animated Series (which was excellent for X years mind you, an era-defining cartoon).

As nearly 20 years went by and a new iteration of Batman and the Joker was ripe for the telling, here comes this portrayal of the Joker that didn’t just shock his audience – he made us think. He seems to so effortlessly drag Gotham down into a spiral of violence that we forget that all of his actions are very well executed hits that progressively take him up the crime latter into boss-of-the-city status. Oh wait, Jack Nicholson’s Joker did that too… before the mid-way point of the movie. But Heath Ledger’s Joker appears on tv to issue his demands directly to Gotham’s population and spread a general affect of fear all throughout… and so did the old Joker. The only difference is that Ledger’s Joker uses his image to create a sense of panic, setting up the conditions for him to prove his point about human nature. Nicholson’s Joker only wants to be more famous than Batman, steal his love interest (though he doesn’t know it), and become new kind of deranged avant-garde artist: “I’m the world’s first fully homicidal artist.” His relationship with Batman comes closest to Lex Luthor’s with Superman: atop the city as its primary power-broker he finds this mythical challenger to his reign and subsequently makes it his personal obsession to defeat it. This is the true battle for the soul of the American city contra Ledger’s Joker’s quote in his last scene: how will the titans of this metropolis manage their city? This is one of those perennial questions that permits superheros to replay their struggles over and over again in a fantasy city, locked in a never-ending battle for good civic governance.

With Nolan and Goyer we get national and even international politics on display in this less-than fantastic Gotham City. The Joker is a terrorist blowing up hospitals and burning up giant stacks of American dollars. Batman flies to China to abduct a shady CEO setting up the movie’s global aspirations. He uses the vast technological laboratories at his disposal to create a surveillance network that can spy on every person in Gotham. He does this all under the pretense of stopping the terrorist-Joker. It seems that this version of the Joker is so dastardly that we need hand over our constitutional rights to stop him. The allusion is so obvious that we don’t need to wonder how Heath Ledger’s Joker touched that wider social nerve; the issue of terrorism and how the US military would fight it, and how many liberties we would sacrifice to fight it, was the hot button issue of the day. This Joker is supposed to justify our continued involvement military escalation, though Bruce Wayne was already demonstrating privacy-invasion behavior very early on in the movie. In an unbelievable scene at the end of the movie, the CEO of Wayne Enterprises (where all the high-tech military equipment is manufactured) Lucius Fox consents to using a near-total spying weapon to find the Joker – but only this one time (*wink). The machine is shown short-circuiting or being destroyed, as if now that the terrorist threat has been eliminated the powers granted both by and for this corporation in the military-industrial complex would disappear when the threat was apprehended. You could forgive me for noting that similar powers actually exist in the real world by a government agency at the time of this writing, as revealed by Edward Snowden, because this Batman story is supposed to exist in a mirror image to our world and not some fairy tale.

All of this lends a greater weight to the question of who or what Nolan and Goyer or Heath Ledger’s Joker is. On the IMDB websites list of top-rated movies of all time, The Dark Knight sits at an absurdly high rating of 4th. Nobody would agree that this list is definitive of any universal standard, but a widely viewed statistical agglomeration of critics and user reviews has decided that this is the 4th best movie of all-time. It wouldn’t be such a stretch to say that a great deal of people learned how to conceptualize these problems revolving around liberty, violence, and power from movies these days. This is only to remark on how fascinated a large segment of the population of America became with this character. The Joker purposefully layers his motivations throughout the movie with misdirections and visible lies that string along the viewer into anticipating the moment when his true intentions are revealed. The greatest trick that Nolan and Goyer pulled on their audience is convincing them that their Joker is some spirit of chaos and destruction. This is only the public image that he cultivates in his quest for the ultimate power of the city (both of our Jokers do this and that is fine, from this polemical character study standpoint, but it’s only a stepping-stone to a very different end). In fact, he is out to prove his theoretical point about human nature. Nicholson’s Joker only wants to replace Batman’s star. Ledger’s Joker is not the fictional embodiment of chaos that we want him to be, he doesn’t even look like he’s having fun with his rise to power. If you’re not inclined to agree with me on this point just rewatch The Dark Knight and then Burton’s Batman and answer me which Joker is basking in the pure joy of his actions and which one is methodically acting out a preconceived plan with a fair amount of scholarly detachment.

The point is that Nolan and Goyer fairly explicitly give their Joker an ultimate purpose by the films end and audiences still perceive him as a kind of mythical symbol of chaos. When the Joker predicts the boats will explode by the decisions of the citizens stuck on them and nothing happens, he looks defeated. Batman doesn’t beat him up on this rooftop of an undeveloped building (presumably, by me, having its construction halted in the wake of the financial collapse), it is the innate goodness of the citizens that demonstrate their selflessness and prove his “social experiment” (direct quote) wrong that win the day. The Joker reveals his intentions to Batman in what closely resembles a torture scene: “Their morals their “code,” it’s a bad joke, dropped at the first sign of trouble. I’ll show ya, when the chips are down, these “civilized people” they’ll eat each other. You see I’m not a monster, I’m just ahead of the curve.” In another scene, someone accuses him of being crazy and he flatly says right back to him, “No, I’m not.” It’s all right there in the film’s script and he is telling us that he is not some wild child of chaos but a man out to prove something.

This Joker wants demonstrate the virility or corruption buried within humanity if you take away all of the securities afforded by civilized city life. His stripping away of those support beams of laws and institutions is supposed prove that life is “nasty, brutish, and short” like Thomas Hobbes. The strange thing about this movie is that this logic was used to justify absolute monarchy, that people couldn’t manage their own affairs or take part in governing themselves and so needed a strong leader to unify them. The Joker uses it in the opposite direction, not to change the structure of governance or become an authority figure himself but prove a point to Batman. Presumably, and now I’m just riffing, Batman is supposed to realize that he is the right man to follow through the Joker’s revelation and seize power himself; after all, he is the most capable man in the city with his the wealth, resources, and family name to run it and as a vigilante he already answers to nobody. Does the Joker simply want Batman to be the King of Gotham?

Hold on, wait a minute, why would the Joker want Batman to be the king when he himself has been called “the crown prince of crime?” Isn’t he seeking that kind of power himself? But then, why burn up all the money? Does the Joker think that he can rule the city by blowing things up in spectacles of fear? Or maybe he only wants to rule the criminal underworld? What makes this hard to maintain is the “torture scene.” When pushed by Batman into telling him his motives, the Joker says “I don’t want to kill you! [this being one his more genuine moments of laughter in the whole film] What would I do without you!… You complete me.” So besting Batman in a fight and gaining power is not the Joker’s motivation in The Dark Knight. He only wants to make a point and to Batman primarily.

So, is this whole movie a kind of bromance between Batman and the Joker? Their scenes together are oddly intimate. Torture is very hands on and has been widely noted to end in a kind of sexual relationship as noted in the very first James Bond novel. Batman raced towards the Joker in his motorcycle with the Joker’s encouragement only to veer off at the last second, and in their last scene together the Joker is on top of Batman getting ready for the big show, only later to suggest that they share a cell together. The Joker’s end game is still just to make a theoretical point but his plan is so carefully laid out that there must be something else that begs on after he has seized power in the criminal underworld. That he would work his way so methodically into the position of power that he has only to exist as a foil just doesn’t make sense. The Joker is urging Batman to throw off the pretenses, stop worrying about killing people, and make the most of his vast powers: the Joker wants Batman to be a king.

A king’s court is where a jester can find employment. His function is to tell jokes but also veiled truths covered by fancy word games. As a jester, one can slip in advice or council that serious advisers couldn’t otherwise say but as entertainment. Comedians operate in this way in our contemporary society as truth-tellers who can get away with scandalous statements under the pretense that they are telling a joke. As an aside, the actor who played Batman throughout Nolan and Goyer’s trilogy was Christian Bale, the same actor who ten years later played Dick Cheney in the 2018 Vice detailing the Vice President’s rise to un-presidented (sorry, again I couldn’t help myself) power right about the same time this movie was being made. No man has ever had as much power as Dick Cheney during his time in the presidential cabinet from roughly 2002-2008. Not any previous president, not any king, not any emperor in the history of mankind. That is a true statement; watch the movie or read a history book. America is by far the most powerful nation the earth has ever seen and Cheney could operate more effectively than single person before him. He is not a funny man.

You can see how far we have come, within one very famous fictional character, from a battle of egos in civic management to the ultimate justification for the reigns of power in a state. To add absurdity upon absurdity, I could evoke the camp Adam West Batman as a further contrast. What happened to Batman? Or is the better question, what happened to us that we would take this character for our era-defining morality plays?

At this point I want to again highlight the contrast between the two Jokers. Jack Nicholson’s Joker is fully willing and capable of running the city on his own with his gang of henchman. What’s more he invades news broadcasts at his pleasure and parades through main street at the top of a float. He tosses out money into an exuberant crowd who seem to have forgotten that he bragged about poisoning hundreds of people with his synthetic daily products. Gotham’s citizens are hopelessly corrupt already, they clamor for his money and no crowds come to oppose him. The entire movie itself demonstrates how every layer of Gotham is corrupt from the top down, with the new district attorney and police commissioner fighting a losing battle against the alliance of industrial might and organized crime. This is the proper way to conceptualize Gotham and justify the need for a civic-savior in Batman.

The Dark Knight portrays its citizens of Gotham as scared and timid. They panic at a moments’ notice and flee danger in a swarm of fear. Though totally unable to make a decision on their own or behave orderly in a crisis, at heart they are good people who don’t wish to harm each other. This is supposed to be shown in the climax of the movie when the boats don’t blow up. Easily frightened yet good-natured, not greedy and corrupt, is how Nolan and Goyer want us to see the citizens of their metropolis.

This is why I remarked above just how well depicted Tim Burton’s Gotham was back in 1989. The organization of a city, its distribution of power, the level of poverty, the amount of violence does effect the virtue of its citizens. Gotham’s landscape is so overbearing that it envelopes its people as they move about. Whether the ultimate authority of a city resides in the hands of the many, the wealthy few, or a king does effect the constitution of its people. This is what early republican radicals understood when they discovered classical literature from Rome: one cannot be free without free constitution, a citizen cannot truly have liberty if they don’t live in a free society. Batman’s gothic look, his creepy design and his use of fear are a constant reminder that the people of Gotham have been woefully corrupted by their city.

Our new Batman merely stops the Joker’s plan by letting the goodness of the people show itself to the Joker in the absence of the conditions of panic. Batman only has to stop the Joker individually and eliminate the fear that he has brought on to let the people be themselves. In contrast, when Tim Burton’s Batman kills the Joker he destroys the power structure that he has created along with him. No longer will the city be run by a hierarchical gang who rules through organized violence, or a quasi-fascist mob-rule with its irreverent art. Nolan and Goyer have Batman escalate his use of power (surveillance, over-stepping his jurisdiction, etc.) to stop the singular threat of the terrorist. This is why he becomes the Dark Knight (“the hero Gotham deserves”) but must go into hiding as a hunted outcast. He is both at the top of the city (“…a silent guardian, a watchful protector…”) and not of the city or outside of the city (“Is Wayne manor within the city-limits?” asks Harvey Dent). This is the same logic applied to a king.

The Dark Knight doesn’t rule Gotham as a king of course. This is merely what the Joker is pushing him towards. He has enough to power to watch over it from the shadows and absorb its citizen’s ire for the state of their corrupt city. That this new Batman is rightfully vilified but remains hovering over the city nonetheless indicates that we, the audience of the movie, should learn to appreciate our billionaire handlers and loosen up on all of the criticism. After all, they are keeping us safe from the terrorists and allow us to show off our good hearts on occasion. Nolan and Goyer are telling us that the citizens of Gotham (a much more realistic version of the city than any before it) should leave the question of who holds the power of the city to rich people in the shadows; they may have wealth and power far beyond yours and you can hate them all you want, they may not be telling us the truth or appear in public to state their positions or give voice to their ambitions, but they watch over your city and keep you from behaving like an unruly mob.

This last part about truth-telling is perhaps the most egregious feature of The Dark Knight. In Batman’s final lines of the film, he says “sometimes the truth isn’t good enough, sometimes people deserve more, sometimes people deserve to have their faith rewarded.” Then he runs away. The people of Gotham will now go on believing a lie and pinning all of the blame for their city’s corruption on him in order to keep moving along with their lives. This will grant the justification for Harvey Dent’s crusade against crime while nothing fundamentally changes. The police, and maybe Batman if he’s needed in covert situations, will continue rooting out crime in Gotham while the people will go on believing that Batman is one of those criminals. He is in reality immune from criticism or a challenge to his power and the masses are deceived to complete this immunity.

All of these recent quotes are pulled out of the final scene where all of the various threads of the movie are tied together and Hans Zimmer’s music thunders behind Commissioner Gordon and Batman’s speech. He rides off on his high-tech motorcycle chased by the police dogs and the curtain falls as we see the title of the movie: The Dark Knight. This scene has no doubt touched the hearts of a great many viewers and it was pulled off effectively. It can be compared with Tim Burton’s final scene of Batman as he stands on top of a building looking out at the city with his bat-signal blazing in the sky. There too a majestic score thunders behind but there is no speech from Batman. Both are excellent movie endings but when Batman killed the Joker by strapping a gargoyle to his leg he rid the city of much more than pesky terrorist with a penchant for explosives. He brought down the entire edifice of the Joker’s criminal industry, an industry that actually controls a great deal of the city’s functions. Both movies are about a battle for the soul of the great American city but it is in Tim Burton’s Batman that the soul of the city is confined to that city in all of its character defining power. Both Batman and the Joker are products of the fantasy city of Gotham, as are its citizens. When their battle for how Gotham will be governed goes national and even international, it becomes an apology for unfettered authoritarian rule based on lies.

One could reply that all of this rests within Batman as a character from the get-go. He is rich, shadowy, and mostly beats up criminals drawn to the life possibly out of necessity in a perpetually rotten city. But he is also the world’s greatest detective who moves about the criminal underworld to reach its mover’s and shakers. Every Batman is trying to clean up his city but Nolan and Goyer’s Batman and Joker seem to transcend it and follow the red herring of the innately goodness or badness of human nature. When superheros are let loose from their environment, the abstractions they deal with can become a startling rationalization for the worst kind of rule: totalitarian. This is precisely the kind of rule that the 1989 Batman was fighting in his city. We can forgive him for channeling his inner Machiavelli, breaking his code, and choosing to kill in the final act to prevent this from happening. It is in decontextualizing people’s motives and removing them from their locations that we run into shocking justifications for abuses of power.

[As an afterward, to further dispel the mystique of The Dark Knight, I highly recommend reading Jeff Loeb and Tim Sale’s Batman: The Long Halloween.  It contains many of the same themes as the first two Nolan and Goyer movies and ranks among the greatest of Batman stories.]

Public Banking and Taxing the Wild Frontier

What the Whiskey Rebellion Can Teach Us About Using Cannabis Money for Public Banking

Something big is stirring out west. Since the California voters passed Proposition 64, cannabis use and cultivation has been made legal for all adults over 21 years old and the consequences of this law are far reaching. When we contrast the history of cannabis cultivation with the new practices resulting from Prop 64, a story emerges that is at once new and old. What is new is a centralized, regulated, and taxed cannabis industry replacing the decentralized small farmers of the past, what is old is a story of taming frontier economies with high taxation. It’s a story that is liable to provoke romantic sentiments for the plight of the small-time farmer in the face of unstoppable capitalist progress but we can do better. With the right degree of activist lobbying the cannabis industry can lead the charge in demanding a California state public bank – a bank that would solidify the populist legacy of the outlaw pioneer cannabis farmer.

Something similar was accomplished in the first years of the republic. During the so-called ‘Whiskey Rebellion’ (a term invented to discredit the uprising) farmers on what was then the wild frontier formed militias to resist the new taxation policy of Alexander Hamilton. These rowdy ‘regulators’ protested against a financier-oriented tax plan that was onerous and unfair even though it ended up financing a beneficial new institution. Their anger was justified: western farmers had been targeted by the wealthy easterners before and now further economic burden would befall them where they could afford it the least. Protesting in those days had a different meaning than it does today. We haven’t seen someone tarred-and-feathered in centuries, nor have we seen spontaneous armed uprisings in quite some time. Instead, we should look at what all of this tax revenue generated by the whiskey tax was used for and what all of this money generated by the Cannabis industry could be used for now.

Despite the absence of tax-resisting militia-men today, the similarities between the changes taking place within the cannabis industry and the Pennsylvania regulation of 1794 are striking, especially when we look into the realm of banking. Although the new cannabis tax revenue for California can’t go towards funding a public bank (the funds generated by prop 64 will go into a special fund predesignating where the money will go), the cannabis industry needs a place to safely store its profits and a public bank is the only kind of bank that can fit the bill. Marijuana is still a schedule one illegal substance at the federal level (amazingly, given its proven medicinal properties), so businesses operating in cannabis do not have access to nationally chartered banks under FDIC requirements. A huge industry generating many billions of dollars is forced to operate with duffle bags full of cash. A state owned and operated bank, on the other hand, bypasses this oddity and creates a win-win for both Californians and the cannabis industry.

Public banks have an enormous benefit for the economy within which they operate. Hamilton conceived the first Bank of the United States and the means to fund it entirely on his own. It helped stabilize the finances of the nation in its infancy after it had accumulated massive war debts both foreign and domestic. By a stroke of genius, those debts were parlayed into a system that convinced investors to do business with the unproven new nation and continue to allow the government to borrow on favorable terms. War debts became the basis of the new economy under this program of ‘Assumption’ and bondholders would continue to hold confidence in doing business with the American government. The only problem was the start-up costs came from poor frontier farmers already beset by economic suppression. It was a giant slap in the face to the people who had fought for liberty and independence, but the bank that financed it stabilized a nascent country in precarious circumstances. Today we have much more willing tax base, in spite of the many resentful cannabis farmers getting edged out by the high cost of going legit, and with the help of persistent public banking advocates a Public Bank of California that benefits the entire state is within reach.

The differences between these two events separated by over 200 years are numerous but three important elements bring them together: a profitable yet unregulated agrarian economy suddenly besieged by taxes, a maligned commodity that is much more than what it seems, and the establishment of a public bank (potentially this time). Like the cannabis farmer on the west coast, the whiskey distiller on the frontier lands of western Pennsylvania, Massachusetts, Kentucky and elsewhere used distilled spirits as a cost-effective means for earning an income. Whiskey was downed by almost everyone in America and the frontier people could sell it to the easterners with a fraction of the transportation costs compared with other goods. At their high points both whiskey and weed were so valuable that they were used as money. [see Terry Bouton, ‘William Findley, David Bradford, and the Pennsylvania Regulation of 1974’ in Revolutionary Founders: Rebels, Radicals, and Reformers in the Making of the Nation]

The burdens of taxation hit communities like these particularly hard. The whiskey rebels turned to the traditional form of protest to try and stop the tax collectors from charging distillers: armed mob threats against tax collectors, shutting down courts, and erecting liberty poles for gathering points. We’re pretty far away from seeing people using such tactics in 2018. However, a public banking movement has been boiling up for years now in both cities and states from Oakland to New Jersey. [Public Banking Movement Gains Grounds in Cities and States across the US]  If the cannabis industry can rally for a bank that would accept its money as deposits it would be a complete game-changer, offering a beacon of light to the similar public banking projects already underway in 20 other states. [How Public Banking Is Winning the West]

Populist finance has seen a resurgence since the Occupy movement put the spotlight on the greed of private banks and the vast disparity in wealth between the rich and the rest of us. [link from occupy.com] While frontier regulators of the late-eighteenth century opposed all financial schemes, today progressives understand that dealing with massive wealth inequality will take drastic measures at the state and national levels. Taking on Wall Street will require more than agrarian regulators marching against the tax man or, in other words, good-old-fashioned direct action. California State Treasurer John Chiang has been conducting public hearings after the formation of the Cannabis Banking Working Group and there the public made its desire for public banking known. Instead of giving them the brush-off, Chiang responded positively and it seems the lobbying by public banking advocates has been met with some success. [Activists Urge California Public Bank not Limit to Cannabis Revenue] The issue now is whether or not the prospective new bank will be extended beyond just the cannabis industry to cover the needs of general California business.

These developments are encouraging for populist finance. In an era beset by financial parasitism and high private debt levels, public-based solutions to money and banking point the way towards prosperity and equality. What will follow is a story about two moments in American history that connects the populist practices of the whiskey-fueled past with our pot-blazing present.

Legalization Is Pushing Small Cannabis Farmers Out, So Lets Make the Pot Profits Work for Everyone

A large chunk of hippy counterculture took a turn toward a rural agrarian lifestyle in the 1970’s in a movement called ‘back-to-the-land’ and subsequently discovered a path to riches. Marijuana is illegal under federal law so smoking it became a mark of the renegade subculture — growing and selling it even more so. Growing cannabis was a way for the people of this movement who sought to reconnect with nature and disconnect from mainstream American society to support themselves. What began as a practice for supplementing an alternative lifestyle up in the secluded mountains of northern California blossomed into one of the most lucrative industries on the west coast today, with much of the cannabis heading east to find markets in the rest of the country. Within a single generation, the hippy subculture turned from gleefully impoverished idealists seeking self-sustenance to rich independent farmers when the full financial potential of this crop was inevitably realized.

Money was never the objective when hippies started cultivating cannabis in the mountains, but by the time President Reagan declared a war on drugs small-time farmers were making millions. It was a curious transformation riddled with irony: a people trying to escape individualistic materialism and found a communal ethic out in the woods suddenly found an easy path to riches. Just how much money changed the culture is debatable. What is undeniable though is that the marijuana that was grown in Northern California found its way into a vast unregulated market worth billions of dollars. It would only take a few decades for politicians to start eye-balling that black market money, especially with the negative perceptions of smoking marijuana cooling off nationwide.

As of January 1st, 2018, the law approved by a simple majority of all Californian voters are in effect, attempting to bring cannabis cultivators back into the fold of the taxable California State economy. No longer will the industry operate in a strictly core-periphery dynamic: the secluded hills and favorable climate where cannabis is grown are now heavily targeted by entrepreneurs. The old-school cannabis farmer lived in a community that developed a sense of freedom and independence while simultaneously feeling besieged by the federal government. Paranoia was a shared sentiment that reinforced defiant hippy beliefs about authoritative American culture and produced an ethic of mutual aid. High profits, a protected geography dubbed the “Redwood Curtain,” and a healthy degree of solidarity among cannabis farmers allowed for a mutated form of hippy counterculture to persist. But once the word got out around the mid-nineties more people started flowing into Humboldt, Mendocino and surrounding counties in what became known as the “Green Rush” (because cannabis is the new gold). The profit margin was just too darn high to keep people from jumping on the bandwagon that hippies inadvertently created and sustained.

It’s a story that has been told before and people started to notice the continuity of the back-to-the-land hippies with the American culture they initially broke off from. This perceived connection brought local author Ray Raphael into the study of the revolutionary America with his popular history books. [Ray Raphael] Having written books on nature, northern Californian geography and marijuana farmers in Cash Crop: An American Dream, he then went on to become a decorated heterodox historian of the revolutionary period with an eye towards everyday people and their struggles. Near the end of Cash Crop, Raphael writes, “As a rags-to-riches story, the marijuana boom goes straight to the heart of American mythology.”

“A heightened sense of individualism — that definitive ideal of Americanism, the theoretical hub of our social philosophy — is central to the ideology of marijuana growers. The flamboyant and free-spirited “do-your-own-thing” of the original back-to-the-land movement has evolved quite effortlessly into more traditional manifestations of American individualism: an obsession with private property and a conservative reaction against governmental intrusions into private affairs.” (p.160)

It’s as if hippies tried to escape America in their communes only to find more America. Instead of a utopia of liberation they found the Jeffersonian ideal of the yeoman farmer, an independent and self-sustaining landowner in a vibrant community. After the communes disintegrated, the spirit of communitarian values persisted and even thrived thanks to influx of bags full of greenback dollars. But were the new riches creating greater resiliency or altering the culture to one of materialistic wealth accumulation?

In a particularly ominous passage Raphael writes,

“From a democratic point of view, perhaps the biggest failure of the traditional capitalist system is its tendency for consolidation. Small businesses continually go under, either driven out or swallowed up by their larger competition. Even in agriculture, the family farm is no longer a viable unit; high-tech agribusiness drives prices down to where small, labor-intensive farmers can no longer compete. Apparently, consolidation is an inevitable feature of capitalism — except in the case of marijuana farming. In the marijuana industry there are structural forces which counteract the natural tendency toward centralization. The combination of illegality and geographic isolation provide built-in guarantees against consolidation. The larger the operation, the higher the risk — so there’s a strong incentive to stay small and decentralized.” (p.171)

With the protective barrier to consolidation and bigness gone, replaced by legal farms able to withstand the very high start-up costs, the pioneers of cannabis farmers face an uncertain future. The high taxes, lawyer and filing fees, new labeling requirements, and more have prevented most farmers from becoming legal compliant. As of March 2018, over 99% of cannabis farmers have not gotten through the onerous licensing process. [Report: 99% of Cannabis Growers Are Still Unlicensed] Especially onerous is the excise tax — just like Alexander Hamilton leveled on the whiskey distillers. The cannabis excise tax comes in at a whopping 15%, with multiple sales taxes accompanying it along the supply chain until retail. This has caused the price of legal cannabis to jump about 50% at the same time as the price of illegal cannabis sold on the street plummets. So many people began growing this plant during the green rush that it resulted in a glut in the market supply, without adequate means for those new farmers to go legal. After prop 64 took effect, people who once could live off of their marijuana crop now find themselves in dire straights.

At the time of writing this piece, politicians are signaling that they will attempt to lower the excise tax in a bid to draw more cannabis farmers into the fold. [California considers cut in marijuana taxes in bid to lure legal users] Such would be an act of mercy and justice for the pioneers of an industry that will net the state billions in additional tax revenue. In a contentious hearing at the board of supervisors meeting in Humboldt country (ground zero for early cannabis farming), citizens poured into the halls to plead for lower taxes and the end of corporate loopholes that favor the wealthy. [Frustration and Fear: Local Cannabis Farmers Ask for Help, Claim Measure S Could Put Them Out of Business and Deprive County of Their Tax Revenue] It’s still unclear whether the barriers to entry will remain so high, but people are pushing back and want to be a part of the legal economy. The demand is now for an easier way to join the state regulated economy rather than escape it. The pot growing community has come a long way since the idealistic days of nonconformity.

The desire for access into the regulated market is mainly to prevent the consolidation of industry that Ray Raphael wrote about in Cash Crop. People had always known that legalization would encourage big agribusiness to move into their backyard; without proper permits, law enforcement would end up taking down the smaller business instead of targeting the large ones like it did in the past. Legalization mixed with high taxes has meant that the scale of cannabis farms is getting bigger, a reversal of the tacit agreement between the community and federal drug enforcement that kept operations small. It is the fear of monopoly capitalism that supersedes fear of big government for the people out west — it is the Left Coast after all. The only game left in town is tweaking the rulers so that the law promotes a decentralized industry instead of one dominated by a few players. If we believe with Raphael that capitalism inevitably consolidates into monopoly power, then fair laws that protect small farmers are the only check cannabis farmers have left.

With the law kept as is, small farmers will likely be phased out of the market. Bigger farms tend to yield more product with fewer costs in what economists call “economies of scale” or, in other words, capitalist consolidation. Perhaps the back-to-the-landers are facing a reckoning for failing to curtail gangs from extracting as much black market profits from the region or for looking the other way when signs of environmental damage were all too apparent. [Outlaw Weed Comes into the Light] But there are forces at play that dwarf the collective power of this little haven that hippies found in Northern California. The next step for counterculture on the west coast will be to engage with those greater forces and follow the money instead of stash it.

If cannabis farmers (whoever ends up with the legal profits in the industry) could pool their money together into a bank that the entire state of California has access to as deposits for loans, a great victory would be achieved. A public bank would be the saving grace of the hippies and cement their legacy as a true force against American mainstream capitalism. This would complete the journey of the back-to-the-landers after their escape from American culture. They could take their place alongside the populist farmer movements like the NonPartisan League that willed the Bank of North Dakota into existence. [How the Nation’s Only State-Owned Bank Became the Envy of Wall Street]

The best part is, one doesn’t even have to be a cannabis farmer nor ever have been in the cannabis industry. All we have to do is educate people on the benefits of public banking and for those people to lobby California politicians. [Public Banking Institute] The crucial factor on this issue is linking cannabis profits with accessible deposits for the rest of California. [A Public Bank for Pot Entrepreneurs? How About the Rest of Us?] Such would be practical way to bring economic justice to everyone in the state (and galvanize a nationwide movement) instead of just those under the majestic Redwoods.

Much More than a Whiskey Bottle

The cannabis farmers who found the road to economic self-reliance in the redwood forests of northern California suddenly find the road closed. As the pioneers of the most lucrative industry in California and the first to take the risk nationwide, they are now being cast aside by entrepreneurs with plenty of start-up capital. Multilayered taxes, including a big excise, now threaten the small farmer haven that once was the emerald triangle. [East Bay Express: Nipped in the Bud]

When the back-to-the-land hippies fled a stultifying mainstream American culture, they discovered an older America: the Jeffersonian vision of the self-reliant yeoman farmer. They will likely share the fate of that vision however, trampled upon by industrial and efficient Hamiltonian businessman. Battles for a sustainable use of land and resources, as well as an equitable share in the industry, can and should be fought for. But the biggest battle will be fought over which version of the Hamiltonian vision will be instated in the aftermath. With the new tax and regulation of this massively lucrative industry will come the opportunity to revisit the better side of Hamilton’s legacy: his championing of public-oriented financing in the form of the first Bank of the United States.

Before we get to the first public bank in America, it’s worthwhile to explain the economic situation facing the frontier farmers of that time. Their plight at the hands of Hamilton mirrors the plight of the small cannabis farmer when you substitute weed for whiskey.

The aftermath of the revolutionary war saw a period of radical economic transformation, to say nothing of the unprecedented political innovations. Soon after the revolutionary war and the signing of constitution, congress approved of Alexander Hamilton’s funding scheme to assume all of the debts that the states had incurred and centralize them in the new United States government. This would result in a huge windfall for the bondholders of American war debt: over time they would received both the accrued interests and the principle of these bonds at face-value. Taking on this debt would be the engine that propelled the first Bank of the United States into working order and, in turn, set the country off on the right footing with respect to the rest of the world.

All seems well on the face of it, after all, ordinary farmer-soldiers bought paper war bonds too. But the economic conditions in the west were vastly different than those in the wealthier east. The long time that had elapsed since the issuance of the bonds rendered them useless to farmers in need of metal coins or specie to conduct trade. Years had gone by where nobody could be sure that these bonds would be paid back and people needed hard money to go about their lives. Most of the revolutionary war bonds ended up in the hands of the eastern merchants who could afford to hold onto them during the long wait before redemption. The lack of acceptable currency in the west convinced greedy speculators to scour the western lands and swoop them up on the cheap. Western farmers needed acceptable cash immediately and were desperate to sell these bonds and chits. This drove down the prices of to a fraction of their original worth. But when Hamilton’s financial plan was passed, the bonds suddenly gained their full value back and wealthy easterners reaped a huge windfall. Financiers of the east had swindled the frontiersmen of the west less than ten years after they had fought and defeated the British Empire.

And that’s just the tip of the iceberg. The greatest change took place when the new invention of paper currency, called colonial scrip, was taken away after the establishment of Constitution in Congress. No longer could states issue their own currency and make it easier for average person to conduct business. Paper money was the brainchild of Benjamin Franklin and a huge hit with the poor western farmers that lacked specie. It was a totally new brand of finance that facilitated inclusive economic activity, one of the most revolutionary of innovations in a time of so much revolutionary activity. The only problem was that it created currency value inflation due the ease of printing more whenever the occasion arose. The real conflict came, however, from the depreciation of the bonds that wealthy merchants held. Increasing the money supply by printing of more paper money meant that the return on the bonds came back with weaker money than it was lent with. Creditors took a reduced return on their investment but everyone else (the vast majority of Americans) benefited from the ease of doing business. The more money available, the more poor farmers could conduct trade. It was a clear class conflict between debtors and creditors: creditors hated the uncertainty of price fluctuations and taking a bath on war bonds, debtors wanted more money in the economy at large and therefore more economic equality.

Populist finance in America has a long history that rarely makes its way into mainstream canon. A number of authors have written on the subject and deserve praise for their efforts. So much of the historical activity of a people that claims such a democratic heritage was directed at wealthy financiers who got rich at the expense of the vast majority. These democratic actors had potent critiques, alternative ideas that could work, and sound minds for political economy. They simply lost the important battles of history and history, as we all should know, is written by the victors. As William Hogeland put it (the first author who opened my eyes to the history of missed opportunities for American democratic finance in Founding Finance: How Debt, Speculation, Foreclosures, Protests, and Crackdowns Made Us a Nation): “It’s Hamilton’s America… we all just live in it.”

Summarizing the economic grievances of western Pennsylvanians, Terry Bouton writes,

“During the 1780s state leaders had eliminated paper money, which was the primary medium of exchange, especially in the back country, where gold and silver coins were always scarce. They had killed a government loan office that had offered long-term low-cost credit to small farmers and craftsmen – and replaced it with a private bank that offered loans only to merchants and land speculators. The state government had adopted a plan to repay the Revolutionary War debt that taxed the soldiers and farmers who had fought and supplied the war effort so that wealthy men who had speculated in once-worthless war bonds and IOUs could make a financial killing. Those new taxes were often to be paid in gold and silver. All of these policies stripped the countryside of cash and left thousands of farmers unable to pay debts, mortgages, or taxes. The result was waves of sheriff’s auctions that swept the state, a floodtide of misery that, in [William] Findley’s home county, foreclosed about 40 percent of the taxable population.

At the same time that ordinary Pennsylvanians were losing cows, tools, and farmland at auction, state leaders were making it increasingly hard for them or their children to acquire new land. Officials at the land office gave preferential treatment to big speculators (including themselves). Revenue officials refused to prosecute large speculators who had not paid their taxes at the same time that they pushed to foreclose ordinary taxpayers. Judges ruled in favor of wealthy speculators over settlers in nearly every land conflict. In 1792 the state supreme court turned a clear anti-land-speculation law into a pro-speculator one. The law had put caps on the amount of land anyone could purchase to limit speculation. Defying the law’s stated objectives, however, the supreme court ruled that the limits applied only to small farmers and that wealthy speculators could buy as much land as they could afford[.]” (Bouton, ‘William Findley, David Bradford, and the Pennsylvania regulation of 1794,’ in Revolutionary Founders, p.237-8)

With the war over, it seems that the Federalist who took charge of the new government felt the poor farmers of the west were expendable. The new measures crippled the financial base of the liberty-loving rabble-rousers and bolstered the already wealthy speculators that Hamilton championed, setting a precedent that has more-or-less held up throughout American history. Populist direct action had been the bread-and-butter of the movement for independence in the colonies and the new government now regarded them and their proponents as a threat to the new order. This was all very painful for untamed patriots, with this pattern of financier-oriented policy fostering two previous militia formations before the whiskey tax, but when the excise tax came it added insult to injury. The whiskey tax struck at the livelihoods of the very people who joined Hamilton in fighting the British and creating a new republic.

What makes the whiskey tax so hurtful is not that it kept uneducated farmers in the wilderness from getting drunk, distilling and selling whiskey (often to those with the money to buy it out east) was a cost-effective strategy for earning an income through trade. After all of the financial attacks that drained the economic base of the western farmers, now their last profitable trade was being hit by an excise tax. Whiskey distilling drastically reduced the transportation costs in comparison to other goods. It allowed subsistence tenant farmers and self-sufficient landowners alike to sell a valuable product from the periphery back to core market at a reasonable profit. Hogeland explains this dynamic the best: whiskey was exceptional,

“… for being a cash crop, with eager markers both within the region that produced it far away. A gallon of good rye whiskey might sell for only twenty-five cents in the west; easy of the mountains, it could bring from fifty cents to a dollar. Hauling twenty-four bushels of milled rye over the Alleghenies took three pack animals with projected revenues of a mere six dollars; costs outran revenues. Reducing those bushels, at home or at a community still, to two eight-gallon kegs of whiskey amplified their value almost three times while reducing transport requirements to a single animal.

So with a value nearing the absolute, whiskey became currency in places where coin wasn’t seen. Always exchangeable for cash somewhere down the line, whiskey maintained good value against metal. That tended to democratize western economies… The product gave cash-starved segments of society opportunities for small-scale commercial development that might begin freeing ordinary people from debt and dependency.” (Hogeland, p.178)

So whiskey distilling kept these humble farmers economically afloat. Distilling whiskey and selling it back east, just like growing cannabis from the 1970’s to the present, kept communities moderately prosperous without going big and corporate. Their distilleries were often used communally and seasonally. The excise tax on spirits disproportionately effected those smaller distillers because the larger distillers closer to the eastern core could pay a lower tax rate by keeping the stills churning out whiskey bottles all year long. The tax was calculated with an assumption that the stills would be used year-round: impossible for seasonal independent farmers but advantageous to business-oriented distillers seeking to maximize the profits from their investment in their distillery. Large distillers could lower their prices and push out the smaller ones hit harder by the excise. This was complicated macroeconomic tinkering and Hamilton was smart enough to understand the consequences of his legislation. Frontier farmers must have seen this move as yet another targeted attack by financial aristocrats.

Resistance to the first excise taxes in Britain, as Thomas Slaughter describes early on in his The Whiskey Rebellion: Frontier Epilogue to the American Revolution, was one of the quickest and angriest responses ever engendered by a government’s tax scheme. Excise taxes are also called “inland taxes” or “internal taxes” and levy a percentage of the value of a commodity at the point of production. High war costs during the English Civil War forced seventeenth century British governments to seek more revenue. “Opposition was immediate, violent, and persisted in some regions for over a century thereafter… a mob burned down the London excise house during the 1650’s.” (p.12) The core-periphery dynamic was at play here, with London and other central regions of the empire being easier to administer than the farther reaches. “Resistance was always greatest in Scotland, Ireland, Wales, and the outlying rural parts of England.” (p.12) Yet, despite their unpopularity, excise taxes remained a feature of life in the empire. “Indeed, despite pockets of resistance, the excise surpassed the land tax and customs duties to become the single most lucrative source of government income between the years 1713 and 1799. For much of that period it constituted over 40 percent of all Treasury receipts”. (p.13) American farmers no doubt had a collective memory of these tax measures and did not wish to see a repeat in their new country. To add on top of the financial hardship and pro-speculator policies drying up their wealth an excise tax that disproportionately affected their most lucrative business would have seemed like a declaration of war. After all, the impulse to independence and revolution in 1776 was summed up by the slogan “no taxation without representation.” Thousands of farmers did not wish to see the same enemy that they had fought so hard against suddenly reappear under a different guise.

Somewhere between 7,000 and 10,000 men descended upon Braddock’s Field near Pittsburgh, Pennsylvania in 1794 to formulate a response to the excise tax. (Slaughter, p.234) These regulators came from all over the peripheral lands in an orderly and deliberate fashion. Similar actions had occurred recently in the Newburg Crisis and Shay’s Rebellion (or the Massachusetts Regulation) and they drew from a history of populist tax and creditor resistance from the traditional Anglo-Saxon past. The Whiskey Rebellion was a series of mass actions that sprang up all across the countryside – sympathy demonstrations even took place in the big eastern cities. Debt courts were shut down, road blocks were created to stall property foreclosures, and tax collectors were tarred and feathered. (Bouton, p.241) Resistance was a widespread phenomenon that a great deal of the western culture took part in. Though mostly peaceful, tarring and feathering is no benign action – these people were serious about protecting their participation in a trade that became essential to their livelihoods.

Though mass assemblies brought some orderliness to the tax-resistors, they remained divided on how to continue in the face of the impending military campaign to round them up. Some wanted to meet Hamilton’s volunteer/mercenary militia head on or even secede from the republic and found their own nation. Others like William Findley wanted to organize the people into a new party and win seats in congress. There inability to unite, together with the presence of Hamilton’s army enforcing official national law, caused them to disintegrate. Added to this were reports coming in of the atrocities committed by liberty-loving revolutionaries in France, souring the public opinion of widespread disorder and generating well-founded anxiety. The private army raised to put down the rebellion arrested what regulators they could, sometimes indiscriminately seizing individuals at will. To his credit, president Washington pardoned every person imprisoned for their seditious activity, the damage to the movement having been done. Memories of this event and other events like it led to the political collapse of the Federalist party in just a few years. The excise tax followed them out the door when Jefferson’s Democratic-Republican party repealed it.

As Hamilton’s army approached, thousands could see the writing on the wall and fled farther west into the wilderness. Resistance to rich eastern elites would thereafter be fractured or be duped into picking the wrong targets. The coalition that got Thomas Jefferson elected and shook up the electoral shape of America understandably reviled Hamilton’s bank and the means he used to establish it. As prominent figures like James Madison learned of the financial might of villainous speculators, he too turned on his Federalist ally. Madison tried to distinguish between rightful or original owners of government bonds so as not reward rich speculators, but Hamilton’s plan was complete and Madison’s plan infeasible. No records were kept for the sale of these bonds that had changed hands many times. Such was the double-edged genius of Alexander Hamilton: his mastery of finance came at the cost of alienating those around him. He could personally rout the frontiersmen and create many enemies in Washington yet still be revered for the extreme utility of his public bank.

Much to their frustration, neither Jefferson nor Madison could deny the utility of a public bank. Jefferson never understood how debt kept the money system stable and acquiesced to his Treasury secretary Albert Gallatin’s level-headed advice. The agrarian sentimentality cultivated in Virginia and reflected in much of the population of America left Jefferson unable to shape the economic future of the country he did so much to inaugurate. Madison chartered a new Bank of the United States himself to handle the debts from the War of 1812. When that bank was up for recharter, Andrew Jackson, swept into office on popular anger against the financial elite, vetoed it. It would take another 50 years or so for populist agrarian crusaders to realize that government/state owned banks were viable institutions that could protect their interests.

The scars left by rich speculators lingered on for some time after whiskey tax and subsequent repression. From then on, distrust of banks would be a feature of oppositional political thinking in America. Banks would win the future however and without a public option in the banking sector, wealthy businessmen could simply charter their own private versions. For the better part of the nineteenth century, all banks would be viewed by farmers as monstrosities that use a baffling magic trick to mess with their fortunes. But banks are not necessarily evil institutions, the measure of their social utility depend on who is in control of them. Today banks are mostly private corporations with shareholders that demand the maximization of profits as a matter of principle. It need not be this way though and, ironically, Hamilton himself illustrated the best populist alternative to the machinations of the wealthy 1% of today with the Bank of the United States.

In the period following the ratification of the federal US Constitution, the financial course for the new nation had yet to be charted. Alexander Hamilton had a dream to turn the former colonies into a modern mercantilist nation on a model he borrowed from the British and its Bank of England. His idea would succeed with flying colors, but few truly understood just what he had done to make banking so indispensable to the health of this new form of economics. It would take decades for the nation to warm up to the idea of banks as an everyday feature of American life, but by that time, private banks would dominate the landscape and the old civic-minded banks would be a distant memory.

People were highly suspicious of the purity of Hamilton and other speculator’s motives, and rightfully so. Populist anger the elite eastern “stockjobbers” was well-founded, the blanket rejection of banks and all financial schemes was, however, foolish. Banking (especially of the public variety) would prove to be so successful that its detractors would come around in the long run, but the damage would already be done by that time. The option for government involvement in banking was besieged and destroyed in the first decades of the United States, that is, until the populist farmers realized that bringing banking into the government was the best and perhaps only defense against the insatiable greed of Wall Street bankers and industrialists in the antebellum nineteenth century. In hindsight, keeping public banks around was the best way to prevent gross economic hardship, but the battle-lines were drawn differently in these very different times.

The revolts and minor uprisings that occurred in this time period were all debt related. Traditional debt relations were far more fluid and amenable to the needs of common villagers before modern economics took a hold of them. The soldiers and suppliers of the Revolutionary War had not been paid. Their expedients for trade were dashed. Their protests were quelled. Before 1787, farmers outside of the merchant city regions had the benefit of the state’s former issuance of paper money to stimulate business. They began as a war-time expedient during the seven-years-war but remained afterward to everyone’s joy. In a frontier land lacking in specie (metal coin currency), paper money was a godsend. But the new constitution forbade the states from issuing any more colonial scrip and centralized the money-making function within the new federal government. The very first articles of the US Constitution are explicitly designed to prevent states from issuing their own ‘bills of credit’ and instead enshrine the return of the economy to a hard currency basis. The framers worried about the inflation these bills created, but paper money would come to dominate the economy anyways in the form of bank notes.

If bills of credit or paper money could no longer be used by farmers, then they were stuck with hard specie scarcity. Their business was less connected to the world at large, so metal money was harder to get their hands on. On top of that, exploitation by speculators, who sensed their desperation only to capitalize on it, added to their affective loathing of all things financial coming from the coastal port cities. Upon reading accounts of the financial hardships of American farmers and poor debtors, laid out in the previous post, it’s easy to see why they would be driven to such hate. But every actor needs a circulating medium of exchange to lift their fortunes. The distrust of a banker-government partnership inculcated during this period of history went a long way towards eliminating the necessary checks against the money-creating power of private banks. The banks role in controlling the increase or decrease in the overall supply of money could only be effectively curtailed and controlled by a central governing body endowed with financial powers like that of a bank. Distrust and anger at central government and public banks actually hurt prospects for economic justice by empowering private banks to carry on this highly profitable enterprise free of restraint.

Bray Hammond sticks the point well at the beginning of his grand history of banks in Banks and Politics in America: From the Revolution to the Civil War:

“The agrarian demand for paper money and easy credit which did at last appear in the States in the latter part of the 19th century arose from tardy recognition by the agrarians that they lived in a modern economy, not in dreamland, and in order to hold their own must use credit as business men did. It arose from a slow realization that farming must be a means of making money, not of withholding oneself from the world… But in the face of business enterprise and industrialization, it became impossible for farming to remain unchanged. Stock had to be improved. Machinery had to be acquired. The elements of farm capital became diversified, the land itself ceasing to be the one ingredient of weight. Money and credit forced their way into the farmer’s reckoning.” (Hammond, p.33)

It’s at this point that a shift in emphasis must ensue. A different country than the one Jefferson envisioned was taking shape around the turn of the 18th to the 19th century and we cannot simply remain pitted against all financial concoctions wherever they crop up. The future involves banks and they need to be made to work for the people or the vast majority instead of fought at every turn. The makings of a modern economy were shaping up at this time; increased specialization in the workplace and the overriding importance of overseas trade in the international game of political economy was drowning out the small farmer’s hope for New World of freeholders. The cat was out of the bag and it was not going back in.

The scars leftover from Federalist era lingered on into the Jacksonian era of Democratic entrepreneurialism until the producing farmers figured out how debt, monetary policy, and banks effected them on the national level many decades later. The populist party sought to take over control of the money supply away from banks in the late eighteenth century with their ‘sub-treasury’ system and the non-partisan league would successfully lobby for a state-owned bank in North Dakota. But no movement in America has been able to sustain a public-oriented financial school of thought in the tumultuous times that capitalist industrialism wrought at the end of the 19th century, 20th and up until today. We have a moment right now to establish new public banks with the growing momentum of the public banking movement. It is high time that certain truths about banking become a part of common wisdom and used for the benefit of the 99% instead of the exclusive gain of the 1%.

Hamilton’s Bank of the United States was lauded by all those who understood it. It not only flipped a liability in high war debts into an asset (quite literally), it spread new money out into the economy whenever loans were dispersed. It’s bank notes functioned just like money, similar to the paper money of colonial scrip but more like state bank notes also circulating, so it increased the amount of business that could be done in two separate ways simultaneously. It offered credit for new projects in a typical lending fashion and then, as a result, bank notes could be drawn on representing the promise to repay the debt. These notes were basically paper IOU’s for the original loan/deposited coin (more on this later), but they would inevitably change hands many times in the course of business and effectively enter circulation as money. This is the what makes banks so hotly contested: they don’t just offer loans and act as special intermediaries for future business (though they do that also), they increase the amount of money in the system as a whole so long as they remain solvent (i.e. have enough hard currency to back up the notes that come back in for redemption, or withstand the depletion of specie from their vaults). That these bank notes could be used to pay federal taxes enhanced their acceptability as legitimate money.

Absent regulation, this operation is fragile and private banks are incentivized to extend credit wherever they can profit. The increase in available paper bank notes/IOU’s increases the amount of money passing from hand-to-hand in the general economy, even if you as an individual do not have an account at that bank or any bank. Those paper bank notes can always be redeemed at a local branch of the corresponding bank for hard coin in the vaults, that is, unless too many notes come in for redemption at once and the vaults are depleted.Provided the bank remains solvent, the net effect on the economy at large is immense. Having more things getting passed around as money lifts up the general economic prospects of every actor in the system, provided that the amount of notes issued are commensurate with the overall level of real economic activity. Issue too many and you get price inflation, too little and prices drop but there is less money around to get your hands on.

The national public bank of Hamilton was able to check the excessive issuance of bank notes in the way that a central bank does now. Today central banks are independent of government and merely transfer money from one bank within its system to another in the form of reserves in their central bank accounts. The first and second Bank of the United States operated slightly differently but also kept private banks and state banks that existed before them from collapsing in a heap of panic, rendering its notes useless and its contribution to the overall money supply vanishing in a flash. It made sure that the ratio of bank notes to reserves didn’t get too high and private banks couldn’t print way more notes than they could back up with coins. The first Bank of the United States, Hamilton’s bank, operated in a time when the split between public and private sectors was not so pronounced. Many believed that private investors were needed to lend credibility to the institution in the first place, the government being too young and fragile to instill any confidence. But it was a public bank that served the needs of the people at large by servicing the new and fragile government’s debt and hence its credibility as a future borrower. It increased the supply of money to stimulate industry by issuing its own US Bank Notes that had a wide circulation.

Banks whether public or private wield enormous power by controlling the size of money in the economy at any given time. This is not always well-understood by economists but when banks make loans they increase the amount of money flowing through the economy. Bank loans create more money, paying back those debts created by the loan destroys it. It’s an extraordinary tool within a modern economy and there is no reason why governments shouldn’t be involved in banking when it plays such a vital (and lucrative) role. This is what Hamilton’s bank did before private businessmen and entrepreneurs started opening up their own banks and attacking the national bank. In another one of histories ironies, it was farmer’s opposition to the Hamilton’s policies that killed the second Bank of the United States when Andrew Jackson swept into power. Little did they know that this national, central bank was the only thing preventing private banks from wildly profiting off of the economy’s need for credit, in turn playing havoc on the money supply. The full story is told in Bray Hammond’s standard financial history book in Banks and Politics in America from the Revolution to the Civil War.

According to Hammond, Hamilton did understand this crucial function of banking. It’s quite possible that only a handful of individuals grasped this operation and its significance and few understand it still today. The fact that banks create money, control its supply (in a more-or-less/marginal sort way of increases or decreases from day to day instead of absolutely), and perform a systemically vital function to a dynamic modern economy escapes contemporary economic textbook definitions of banks as mere “intermediaries.” If we replace the terms of 21st century economics with ones from the 18th century, we can still detail the same banking function:

“…[I]n the sentence before his explanation of specie deposits, Hamilton had made the observation that every loan which a bank makes is in the first instance a credit on its books in favor of the borrower and that, unless withdrawn in specie, it remains a liability of the bank till the loan is repaid. In these words he explained 20th century banking as will as 18th, and how bank lending creates bank deposits, with the difference that he did not call them “deposits” but reserved that term for specie transactions, distinguishing credit for specie from credit for the proceeds of loans. He did so because he observed banking in terms of the individual bank and not of many banks constituting a system. He was writing at a time when there were three banks only in America, each sole in its community. The effect each bank’s lending had on its own positions was in those circumstances direct and unobscured; its loans obviously increased what would now be called its deposits; for the checks drawn on it were not being deposited in other banks nor were the checks drawn on others being deposited in it. Each bank was a closed and separate system. Hamilton simply noted what in the then situation was plain and required no unusual discernment. The records of the Massachusetts Bank indicate how common it was at the very beginning to credit borrower’s accounts with the amounts lent them; and the known figures of deposit liabilities are plainly too large to have arisen from specie alone. Such credits seem in practice to have been included with deposits proper but in discussion to have been kept distinct. A deposit was of something tangible, whether for safekeeping or to apply on a capital subscription. The liability for amounts lent was called credit or book credit, as by Hamilton in the passage in which he described the procedure.

Though exempting specie deposits from the restriction could scarcely have given a bank any more inducement than it already had to acquire specie; it doubtless seemed logical to Hamilton that the liability arising from deposits of specie be distinguished from the liability representing the proceeds of loans and that it be excepted from limitations on an expansion that could occur only when liabilities were assumed in excess of the specie held. The issuance of notes and the crediting of customers’ accounts might and did entail the assumption of liabilities in excess of specie holdings, but not when the issuance of the credit resulted from a deposit of specie.” (Hammond, p.138-9. Emphasis mine.)

In other words, when a loan is made by a bank it doesn’t matter that there isn’t enough corresponding metal coin specie to match it one-for-one. Taking in deposits or specie to store in its vaults and making loans to those seeking credit are two separate functions of banking that work in tandem but don’t require a steadfast equivalence. When a loan is made, the amount of money requested by the borrower is written into their account, which they can then draw on regardless of how much specie that individual has deposited on their own. The only thing that matters is that people don’t rush in and grab all of the hard currency all at once in a panic. As long as the bank is believed to be trustworthy, it is. The bank can then keep on lending as much as it likes (more or less), printing more of its bank notes (no doubt to change hands many times), and profiting off of the regular interest payments coming in from the borrower. It’s this ambiguity that leads people to call banking a monster of instability playing fast and loose with our money. Within the accounting format called ‘double-entry bookkeeping’ is the ability to measurably increase the overall money supply by entering numbers on a piece of paper during the loan making process. Whether those two sides read ‘asset/liability,’ ‘credit/deposits,’ or ‘bank credit/specie capital’ is insignificant. It’s in the proportion of one to the other that the fluctuations in money supply increase or decrease, but the ratio itself was fluid in the early days of banking.

“The practice then was less conventional than now, for then, taking advantage of the fact that every item on a bank’s books has both an asset and a liability aspect, it might be called either; whereas now every item belongs rigidly on one side or the other. Thus deposits were sometimes what a bank held and sometimes what it owed; and circulation represented money lent as much as money owed. There is a modern parallel in the fact that bank credit may be measured either in assets or in liabilities, and though the statistical practice of measuring it in loans and investments is now well established, deposits are often taken informally as its measure, and the law provides for its control through the ration of reserves to deposit liabilities.” (Hammond, p. 141)

Banking reform would later come in the form of reserve ratios to restrict the amount of loans on one side of the page to the reserves on the other side. Playing with this ratio became the way to check bank’s influence on the economy at large and prevent collapse of banks who greedily issued to many notes without having enough coin to back them up. But fixing reserve ratios as a universal standard did not and does not provide an effective restraint upon the banking system in general. This method assumes, falsely, that issuance of loans comes attached to the specie in the vault when they are actually two separate functions within a bank. The ratio can go up or down and still be left in tact. What matters is that the confidence trick in the bank’s vaults is upheld and people don’t collectively make a run on the bank. As Hammond explains above, it doesn’t really matter if you focus in on the amount of deposits at the bank or the amount of book credit granted by a loan. They are two separate things that have been joined together within the marble walls and pillars of the bank so that a single thing (money) can be multiplied and dispersed where businesses wants it to go.

The Bank of the United States performed this function in a controlled, centralized manner that serviced a fledgling nation. It’s not so absurd to say that without it, the United States might have crumbled in its infancy under the surrounding colonial European powers and its own war debts. Hamilton’s Bank serviced the interest on the debt, enhanced the credibility of the United States of America abroad, stimulated business, and acted as an early-modern regulator of the banking system.

“its prominence as one of the largest corporations in America and its branches’ broad geographic position in the emerging American economy allowed it to conduct a rudimentary monetary policy. The bank’s notes, backed by substantial gold reserves, gave the country a relatively stable national currency. By managing its lending policies and the flow of funds through its accounts, the bank could — and did — alter the supply of money and credit in the economy and hence the level of interest rates charged to borrowers.

These actions, which had effects similar to today’s monetary policy, can be seen most clearly in the Bank’s interactions with state banks. In the course of business, the Bank would accumulate the notes of the state banks and hold them in its vault. When it wanted to slow the growth of money and credit, it would present the notes to banks for collection in gold or silver, thereby reducing state banks’ reserves and putting the brakes on their ability to circulate new banknotes. To speed up the growth of money and credit, the Bank would hold on to the state banks’ notes, thereby increasing state banks’ reserves and allowing those banks to issue more banknotes by making loans.

The Bank’s branches were all located in the fledgling nation’s port cities. This made it easier for the federal government to collect tax revenues, most of which came from customs duties. Locating the branches in ports also made it easier for the Bank to finance international trade and help the Treasury fund the government’s operations through sales of US government securities to foreigners. Furthermore, the Bank’s branch system gave it another advantage: it could move its notes around the country more readily than could a state bank. The Bank’s branches also helped to fund and encourage the country’s westward expansion, particularly with the establishment of a branch in New Orleans.” [Federal Reserve History Website]

So the utility of this bank is without question. More than a money-making machine for a handful of investors getting fat off collecting interest payments, it actually prevented the excesses of banks from spiraling out of control and wrecking the greater economy – as would happen many times after the two banks were killed. In its virtuous civic function, The Bank of the United States was almost an “anti-bank bank” that looked after all actors within the bounds of the nation instead of a small faction of wealthy investors. The number of those kinds of banks would multiply very soon and the network of private banks would come to dominate the American economy to this day. Had the Bank survived, industry would have progressed much more steadily and without the chaos of epidemic bank failures, greatly reducing the severity of depressions that jaded so many Americans. One can imagine the despair and resentment of a population left holding worthless pieces of paper that used to be as good as money, failing to understand what exactly had gone wrong.

It’s worth looking at how this bank was incorporated, if only to admire the grandeur of an intelligent plan conceived on paper but willed into reality. With the war debts exceeding $150 million from the federal and state treasuries combined, interest payments would need to be effected soon. Direct payment with taxes would have crippled an economy that didn’t have as much specie available to do business as is, with outlying farmers feeling this pain exceptionally. The bank would offer to the public a subscription for future stock of the bank to the limit of $8 million, with the federal treasury owning $2 million for a total of $10 million. The federal government would own one-fifth of the bank and private citizens would make up the remaining four-fifths, drawing interest from the scrips they bought. Once enough specie was collected (which it was almost immediately), the game was in play and debt servicing could commence on the basis of that hard currency.

“Though the authorized capital of the Bank was $10,000,000, of which $2,000,000 was to be paid in specie, the Bank was permitted to organize as soon as $400,000 had been received from the subscribers. Whether much more was ever got from them on successive installments is doubtful, though the Bank subsequently accumulated a treasure much in excess of what the stockholders were supposed to pay. Payment for the government’s stock was accomplished under an authorizations in the charter that was taken over almost intact form Hamilton’s proposal and was presumably intended by him to give the appearance of a cash payment. In effect the Treasury drew for $2,000,000 on the United States commissioners engaged in selling government securities in Amsterdam, deposited the drafts with the Bank, and then drew against the deposit to pay for the stock. Technically this consummated the purchase of the stock with funds borrowed in Europe. But it was not desired to have the drafts go through and the specie shipped from Europe, because it would have had to be shipped back for other purposes. So the Treasury borrowed $2,000,000 from the Bank and used the amount to take up the drafts on the commissioners, with which the whole transaction had opened. The net effect was therefore to leave the government in possession of $2,000,000 of Bank stock and in debt to the Bank for $2,000,000, though technically the money owing to the Bank had not been used to buy the stock but to “restore” the funds in Amsterdam which had been “used” for that purpose.” (Hammond, p.123-4)

It was a kind of trick that can work with the use of a public bank and the stability of a government combined. Only enough specie needed to be acquired so that those who needed it could draw on it when they needed it. The rest of the subscribers, including the treasury, kept their accounts on the books and waited for the interest payments to come in from regular installments. The one-fifth of the bank that the government owned it didn’t actually pay for, it borrowed the money from Dutch financiers already keen on these machinations. Instead of physically transferring specie hand-to-hand, agents of the treasury gave to the Dutch paper promises to pay later. They then used this borrowed money to buy bank stock (which earns interest) and pay off the imbalances of the account as time goes on. It all works because there is enough specie to be drawn out of the bank on occasion, allowing the pretense of convertibility between metal money and paper money to persist. People trusted that there would be enough business in America for these accounts to be settled in the end because there was so much nascent potential on the American continent, the bank allowed them to push paying off debts forward into the future by playing with this divergence in forms of money. Essentially, it was a leap of faith on everyone’s part:

“The early Americans were short of capital, particularly capital in the form of gold and silver. If that dearth of gold and silver had been allowed to hold up their formation of banks, the circle would never have been broken; instead they resorted to arrangements which had the practical virtue of establishing the proper procedure in principle if not in fact. And in time, because the pretenses worked, they accumulated the gold and silver and made the principle a reality. It is a case where a pious lifting of oneself by the bootstraps is preferable to cynical realism or conscientious passivity. And for the most part a saner and more honest practice in capitalization established itself as soon as a surplus of wealth made it possible. Without the initial act of faith, so to speak, the surplus would have been slower in coming. The Americans had declared their political independence before it was a reality, not after; and what they did in the matter of financial competence was much the same.” (Hammond, p.124)

It’s the complexity of the move, the juggling of many different obligations all at once, that makes people resort to religious terminology to explain what in the world just happened before their eyes. But all parties simply had enough trust in the ability for a national government to persist in a stabilized capacity, collect enough taxes, pay investors their installments of interest, and receive the required initial subscription to kick things off. Hamilton was also an eloquent speaker and assured congress that his plan would work. He was right and he knew it.

The Bank of the United States brought together private business and public regulation together at a time when both needed each others help. The bank and public banks like it expanded the total money supply in a controlled and regulated fashion, while giving the government the means to pay off its own debts. When the treasury was forced to liquidate its bank stock, it profited for “$672,000 or 30 per cent, and the dividends it received while shareholder were $1,100,000.” (Hammond, p.207) Public banks are very profitable for the governments they represent, but they partner with the other banks and keep them from stashing these profits all to themselves. If large projects are to be effected without a public bank to borrow from, private banks pocket the interest from that demand for funds. Since banks create money, owning one means you can essentially borrow from yourself, like the confidence trick of the Bank of the United States.

The expediency of the bank can be mimicked in our own day and at the state level. Having a public bank for each state would stabilize the rest of the banks of that state by providing additional money to borrow at lower interests. Interests rates could be lowered across the board, or raised if too much business activity is causing inflation and over-extension of credit; and there lies the great hope: a regulated banking industry unbeholden to the insatiable demands of unchecked private banks. This is not a faux-public central bank like the federal reserve, but one that really works for the people by relieving the strangle hold that private banks have on the creation of money. Governments don’t have to be debtors begging for money to start their projects, slashing public worker hours and benefits, stagnating wages, and paying huge amounts of interest to private bankers when they own their own bank.

As the twenty-first century drags on, we face an uncertain road ahead. To catch a glimpse of hope we need not look that far back into history to find working models for both prosperity and sustainability. It has been encouraging to see activists working hard on forming public banks, for these banks can change the fortunes of every member of the economy in a time of vast wealth inequality. The times call for practical-minded solutions to big problems like climate change and economic stagnation. To seize the moment, we need only look to our own past for models that work.

Out west, cannabis is one of the biggest economic drivers of the region. Its coming into the fold of taxation and regulation at the state level offers a turning point that could lift up far more than just the people involved in the industry. By chartering a public bank in California, the cannabis industry can use banking services where once they could only use cash. It solves the problem of paying taxes in large suitcases full of dollar bills and a lack of small business loans for cannabis businesses with less start up capital. But the really exciting part comes with what the state can do with its own bank once that revenue is drawn in from pot funds. Financing large scale infrastructure projects that can transition the economy from one based on fossil-fuels and freeways into a renewable economy with clean energy all but requires that we utilize public banks. Nothing else can bring all of the funds together for such a massive undertaking that so many people believe must be done.

The pioneers of cannabis farming sought to escape from a society that suffocated their creativity and freedom of expression. They were so successful that others followed them out there in a curiously similar movement to other historical movements that brought people out west in droves. The California Green Rush, like the Gold Rush and the Timber Boom before it, brought billions of dollars to the further reaches of the American west in a hurried and chaotic fashion. It is likely that the Back-to-the-Land cannabis farmer will be mythologized in a similar way that the gold panning pioneer was in the nineteenth century. With the Redwood Curtain lifted and profits soaring, rugged individuals and hippy communes are sure to get the romanticized treatment of yet another distinct culture subsumed by modern business. Public banking offers a way out of this predicament. With its public financing model, we no longer have to play the game rigged by Wall St to benefit the already well-off. Hippies get to put a dent into the capitalist machine after all – just not the way they expected 50 years ago.

Small farmers and landed peasants have always born the brunt of specialized industry marching forward. It’s a fact that has torn apart people’s relationship with the earth for over 200 years now. It has also created enormous prosperity, especially at the national level. Innovations in banking, worker specialization, and increased scales of production set off irreversible processes into motion that need to be reckoned with democratically instead of with a blanket rejection. Alexander Hamilton’s vision won out but the implementation has gone way off course. If we hearken back to the eighteenth century, we can see a virtuous project too far ahead of its time to be appreciated in the Bank of the United States. The man wasn’t perfect (in fact, he was down-right elitist), but Hamilton did have the common good in mind when he conceived a national public bank in his mind and willed it into existence. With a quick crash course in public banking, one can grasp just how necessary establishing new banks are to creating an economy in which everyone wins.

Currently, cities and states must borrow money from Wall St banks to finance their projects. The payments made to municipal and state bondholders, plus interest payments made to banks from loans doubles the cost of any large project. Public worker’s hours and pensions are being slashed, facilities are downsizing and getting privatized, and the investor class is making off with the profits like bandits. Money that could be circulating within the public sector and distributed equitably is drying up. Fringe finance is replacing banks that no longer deem it profitable to do business with the poor, extracting wealth for basic services that could be done easily by the post office. The money pie is shrinking because access to credit has been consolidated by extraordinarily wealthy financiers in their private bank accounts and tax shelters. Public finance is the key to unlocking the economic potential just waiting to be let loose. [What We Could Do with a Postal Savings Bank: Infrastructure that Doesn’t Cost Tax Payers a Dime]

Public banking has a proven track record. Everywhere you look, from Germany to China to early America, linking governments to the technologies of banks is a proven winner. It is not only profitable for governments but the private individuals involved in financing and borrowing from it. The only ones who lose are the already ultra-rich 1%, the ones who want to keep their monopoly on the lending/money-creation powers of banks. With the sudden availability of funds opened up by the cannabis industry’s wave of legalization, the time is now to turn high profits into big ideas for a sustainable future. [Dave Dayen: The Ultimate Cash Crop: How a Pot Crisis Restarted a Public Banking Conversation in America]

A Manifesto for Planet Politics

Planet Politics
One of the most promising of manifestos I’ve seen in the past few years. From this brief summary I can see that a new approach to the emergency of climate change is sought that includes the planet and the biosphere together with international relations and high-powered state politics. Refreshing to see a manifesto calling for more international cooperation and an embrace of the interconnectedness of economics, ecology, and state-politics that seems necessary to me as well, instead of the more insurrectionist-minded manifestos I’ve come across. It’s behind pay-for-view subscription though.

Update: the manifesto is now accessible in this blog post: [Manifesto for a Planet Politics]

Installing (Social) Order

I am proud to be able to share an excerpt from a collective contribution to Millennium’s journal born from the annual conference “Failure and Denial in Global Politics” in London last October. In this article, Anthony Burke, Audra Mitchell, Simon Dalby, Daniel Levine and I argue that IR has reached the limits of its intelligibility with coming climate changes. We call for an expanded dialogue both within and beyond our disciplinary boundaries using the polemic and rhetoric of the manifesto to stimulate debate and response.

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Photo credit: Stefanie Fishel, 2016

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A Manifesto from the End of IR

Anthony Burke, Stefanie Fishel, Audra Mitchell, Simon Dalby, Daniel J. Levine

This manifesto is not about politics as usual. We seek political imagination that can rise from the ashes of our canonical texts. It is about meditating on our failures and finding the will needed for our continued survival. Global ecological collapse brings…

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Hannah Arendt, The Human Condition, “Vita Activa and the Modern Age”

Peter Gratton shares his lecture on the last chapter of Hannah Arendt’s The Human Condition, in which she explains how the modern era has altered the thinking of humanity as earth-bound. The resulting world-alienation and earth-alienation is exemplified in the subjectivist philosophy of Descartes and the mathematical concept of the universe, with its place-less thought of the point from which all can be observed (the Archimedean Point). These ideas have far-reaching implications for how we think in the modern era and for perceiving the barriers to significant political change.

PHILOSOPHY IN A TIME OF ERROR

[I have been posting my recent lectures on Arendt’s political philosophy. A previous lecture on Part I and II of The Human Condition can be found here and here is another on the crucial chapter “Action.”]

“Vita Activa and the Modern Age”

16 March 2016

This last section of The Human Condition is the most wide ranging and often quixotic of the book. By this point, we have seen the triumph of animal laborans and the corollary rise of the social, which has upset the previous boundaries between labor, work, and action, which made politics in the West possible in the first place. The chapter is best framed between the twin phenomena of “world alienation” and “earth alienation.” Inasmuch as the world is the spacing of plurality among and between humans in the plural, world alienation is another word for the “homelessness” marked out in Origins of Totalitarianism, a homelessness…

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The Anthropocene and the End of Postmodernism

Read Edmund Berger on the meaning of the Postmodern turn in philosophy, resulting from the rise of systems theory and cybernetic sciences. This cursory history hits some of the most important factors that shaped the composition of forces across the earth including the climate forces of the earth itself. The creation and implementation of new machines in the second half of the 20th century have networked human societies in such a way that our imagination of a political future must reckon with. Any sustainable image of the future in the age of climate change and the anthroposcene, and therefore philosophical-conceptual framework from which to elaborate it, will involve an intertwining of human social forms and earth forces.

When researching politics at the earth scale, we must pay attention to the history of imperialism and the variety of techniques used to subjugate peoples. At the highest levels, the international policies and agreements forged by the U.S.A. and detailed by Michael Hudson in SuperImperialism go along way in giving us present day neoliberalism. Geopolitics, which includes monetary forces and debt enforcement as well as raw material extraction, alliance make-up, and topography, has largely been shaped by U.S. foreign policy since WWII. We must think of a post-neoliberal social system together with a geopolitics post-U.S. hegemony.

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In his 1979 book The Postmodern Condition, Jean Francois Lyotard famously described the coming age of postmodernism as a the dissolution of grand narratives, that is, overarching schemes or horizons of thought that move the unifies social forces. “…it is possible,” he wrote, “that these narratives are already no longer the principal driving force behind interest in acquiring knowledge.”[1] From then on, postmodernism became a buzzword, bound up in a nebulous array of definition, counter-definition, debate, celebration, and disgust. It found its application rapidly in the worlds of art, literature, and architecture: postmodern allowed the creator to step outside the conditions of progress and time itself, blending effortlessly the old and the new, the high-brow and the low-brow, the abstract with the concrete.

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The Postmodern Condition is name-checked endlessly, yet something that seems to be repeatedly glossed over is that fact that the argument put forward by…

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[Re]Build: A Call for Contributors and Participants

A networking opportunity lies here.

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Shock and austerity. Stock market instability. Stagnant wages and the decline of purchasing power. War. Climate change. Despite these multiplying crises, capitalism retains an essential tool that allows itself to perpetuate itself on a global level despite its internal contradictions: the ability to leverage technological developments to liquidate the political power of those who would oppose it. At such a crossroads, when labor as an organized force is being dissolved into flexible precarity, how does one attempt to tip the scales and reverse our accelerating fragility? The answer lies in a shift of focus, from a politics of power to a politics that looks critically at infrastructure, a politics of re-purpose, (re-)design, appropriation and the reclamation of space, and of new forms of economic expression.

What the future will be, or whatever name we want to label the path to it, there is one realization that is facing us: it…

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