GlobalTalk

David Graeber wrote the book on debt; here's his core message in excerpts and comments

My route to Modern Monetary Theory (MMT) came through English economist and global debt activist Ann Pettifor (The Coming First World Debt Crisis (2006)), who strongly advised study of David Graeber's signature work: Debt, the First 5,000 Years, Melville House (Brooklyn, London), 2011

After a recent re-read, I pulled together these notes and comments. Graeber excerpts are in quotation marks, standard white, their order somewhat revised (page numbers noted); the magenta headings and blue comments are my own.

Introduction

"Here we come to the central question of this book: What, precisely, does it mean to say that our sense of morality and justice is reduced to the language of a business deal? What does it mean that we reduce moral obligations to debts? What changes when one turns into the other? And how do we speak of them when our language has been so shaped by the market?" (13)

"The way violence, or the threat of violence, turns human relations into mathematics will crop up again and again over the course of this book." (14)

Part I – Obligation and Debt in Pre-State Societies

"WHAT IS THE DIFFERENCE between a mere obligation, a sense that one ought to behave in a certain way, or even that one owes something to someone, and a debt, properly speaking? The answer is simple: money. The difference between a debt and an obligation is that a debt can be precisely quantified. This requires money." (21)

"Debt pawns as money in the African slave trade." (152)

"Debt bondage arises out of ritual needs." (156)

"Reflections on violence" (158).

SMC: Debt bondage originated from ritual obligations in non-state, “human economies” (Graeber’s term). Ritual obligations for blood-death (a life is owed) are meaningful but never fully redeemable because the dead person was unique and cannot be replaced. Obligations for bride-debt also were ritualized, to symbolize a cost (taking on a father’s daughter for life) that could never be quantified and redeemed. The money (social currency) in human economies is never equal to the actual lives, just symbolic of an obligation or a desire to fulfill. The form of currency could be anything. Ritual currency tends to accumulate among elders (men, mostly) who, then, lend it to younger men who need it to fulfill the cost of certain ritual pay-outs and pledge themselves (their honor) to repay. These loans of currency, however, are not symbolic of obligations that can never be met but, rather, actual, finite obligations that can and must be repaid. If they aren’t, then, by honor, a man must provide surety (usually a family member) until it is paid. No one wants to be “pawned” in this fashion, and the closest capacity for violence is paternal authority. In desperate situations, fathers pledged their children against debts and lost them in the process. Once coercive violence enters the equation, debt servitude emerges. These kinds of values and practice set the stage for wide-spread adoption of debt peonage in the early millennia of agriculture and the first city-states.

Part II – Axial Age (8th century BC to 1st century AD): simultaneous origins of state-sponsored violence, empires, philosophy, monotheism in the Yellow River valley (China), the Ganges valley (India) and the Aegean Sea (Greece/Rome)

"Here, too, the patricians were ultimately faced with a decision: they could use agricultural loans to gradually turn the plebian population into a class of bonded laborers on their estates, or they could accede to popular demands for debt protection, preserve a free peasantry, and employ the younger sons of free farm families as soldiers…It seems significant, in this light, that the traditional date of the first Roman coinage – 338 BC – is almost exactly the date when debt bondage was finally outlawed (326 BC). Again, coinage, minted from war spoils, didn’t cause the crisis. It was used as a solution." (230)

"Large amounts of silver, gold, and copper were dethesaurized [melted down];…it was removed from the temples and houses of the rich and placed in the hands of ordinary people [starting with mercenary soldiers], was broken into tinier pieces, and began to be used in everyday transactions." (225)

"These new armies were, directly or indirectly, under the control of governments, and it took governments to turn these chunks of metal into genuine currency. The main reason for this is simple capacity: to create enough coins that the people could begin to use them in everyday transactions required mass production on a scale far beyond the abilities of local merchants or smiths." (227)

"Coinage played a critical role in maintaining this kind of free peasantry – secure in their landholding, not tied to any great lord by bonds of debt…Gold, and especially silver, were acquired in war, or mined by slaves captured in war. Mines were located in temples (the traditional place for depositing spoils), and city-states developed endless ways to distribute coins, not only to soldiers, sailors, and those producing arms or outfitting ships, but to the populace, generally, as jury fees, fees for attending public assemblies, or sometimes just as outright distributions…At the same time, insisting that the same coins served as legal tender for all payments due to the state government that they would be in sufficient demand that markets would soon develop." (229)
"
Markets appear to have first emerged…as a side effect of government administrative systems. Over time, however, the logic of the market became entangled in military affairs, where it became almost indistinguishable from the mercenary logic of Axial Age warfare, and then, finally, that logic came to conquer government itself, to define its very purpose." (248)

"Everywhere, too, we find philosophers who react to this by exploring the ideas of humanity and the soul, attempting to find a new foundation for ethics and morality…Everywhere, some of these philosophers made common cause with social movements that inevitably formed in the face of these new and extraordinarily violent and cynical times…The ultimate effect was a kind of ideal division of spheres of human activity that endures to this day: on the one hand, the market, on the other, religion." (248-9)

SMC: The military-coinage-slavery complex arose from resolution of the class contradiction between patricians and plebes in ancient societies at a time when warfare advanced from heroic bands of warriors and raiders to phalanx formations of mercenary troops. Money (tokens of various sorts) had first arisen (in the private sector) when some traders, issuing tokens (or other forms of IOU) to signify their debt to others, found that their IOUs were then passed to others to represent debts taken out by second note-holders. When the symbols of debts began to circulate, that signaled the near-arrival of money. But, the notes or tokens created by various people to signify debts (owed or held) needed to be standardized and mass produced before they could become money in a full social and commercial sense. The state had to get involved (Knapp, State Theory of Money (1905)). The state had to ensure sufficient quantity of standardized tokens. Since anything – sea shells, pure silver, debased silver, dried cod, leather tokens – might serve as money, it is the state’s intervention to resolve the quantity/quality issue of would-be money that decides which will be the “money of the realm,” and it does so by announcing which form(s) it will accept for payment of taxes. Knowing they must pay taxes, all entities then choose to denominate their debts in the state’s currency, thus creating a realm-wide market of exchange with the state’s currency serving as tokens of everyone’s debts. Of course, since money is created by states, it always comes into being and exists in the context of the state’s monopoly of law and its capacity to use force to enforce the law. When Roman Legions conquered a region, they never plundered. Instead, they used denarii to pay the local gentry for provisions while letting them know that, henceforth, taxes to Rome had to be paid in denarii. In no time and with little overt violence, a local, denarii-denominated market was created.

Part III – Middle Ages to Industrial Age

SMC: With Rome’s dark age collapse, the Middle Ages saw the return to “virtual money,” that is, to credit and debt in place of coinage, and debt peonage returned to Europe. The Church was the biggest landholder and the main purveyor of credit. The mercantile era (1588-1790) also was managed mainly by credit and debt arrangements with plundered gold ingots serving as surety. Thus, as the industrial age emerged, private credit and debt (rather than cash) was the norm.

"In fact this is precisely the logic on which the Bank of England – the first successful modern central bank – was originally founded. In 1694, a consortium of English bankers made a loan of L1,200,000 (pounds) to the king. In return they received a royal monopoly on the issuance of banknotes. What this meant in practice was they had the right to advance IOUs for a portion of the money the king now owed them to any inhabitant of the kingdom willing to borrow from them – in effect, to circulate or “monetize” the newly created royal debt. This was a great deal for bankers (they got to charge the king 8 percent annual interest for the original loan and simultaneously charge interest on the same money to the clients who borrowed it), but it only worked as long as the original loan remained outstanding. To this day, this loan has never been paid back. It cannot be. If it ever were, the entire monetary system of Great Britain would cease to exist." (49)

"The period from roughly 1825 to 1975 was a brief but determined effort on the part of a large number of very powerful people – with the support of many of the least powerful – to try to turn [Adam Smith’s classic] vision into something like reality. Coins and paper money were, finally, produced in sufficient quantities that even ordinary people could conduct their daily lives without appeal to tickets, tokens, or credit. Wages started to be paid on time. New sorts of shops, arcades, and galleries appeared, where everyone paid in cash, or alternatively, as time went on, by means of impersonal forms of credit like installment plans. As a result, the old puritanical notion that debt was a sin and degradation began to take a profound hold on many of those who came to consider themselves the “respectable” working classes…" (254)

Part IV – Final chapter: The Beginning of Something Yet to be Determined...opens with Aug 15, 1971, the day Nixon ended the gold standard

"Whatever Nixon’s reasons…once the global system of credit money was unpegged from gold, the world entered a new phase of financial history – one that nobody completely understands." (362)

"The United States has always been dominated by a certain market populism, and the ability of banks to “create money out of nothing” – and even more, to prevent anyone else from doing so – has always been the bugaboo of market populists, since it directly contradicts the idea that markets are a simple expression of democratic equality. Still, since Nixon’s floating of the dollar, it has become evident that it’s only the wizard behind the screen who seems to be maintaining the viability of the whole arrangement." (364)

"[M]oney has no essence. It’s not “really” anything; therefore, its nature has always been and presumably always will be a matter of political contemplation." (373)

SMC:Reagan-Thatcher marked the political end of the New Deal’s institutional redistribution regime. The masses would still have political rights, but they would now have to ensure their own economic security by buying a piece of capitalism (IRAs, retirement funds, etc.). Full-blown development in the 90s and 00s: the financialization of everyday life, neoliberalism.

"As an ideology, [neoliberalism] meant that not just the market, but capitalism (I must continually remind the reader that these are not the same thing) became the organizing principle of everything. We were all to think of ourselves as tiny corporations, organized around the same relationship of investor and executive: between the cold, calculating math of the banker, and the warrior who, indebted, has abandoned any sense of personal honor and turned himself into a kind of disgraced machine." (377)

"In this world, “paying one’s debts” can well come to mean the very definition of morality, if only because so many people fail to do so." (377)

"One must go into debt to achieve a life that goes in any way beyond sheer survival." (379)

"Finance capital [is] the buying and selling of chunks of that [capitalist] future, and economic freedom, for most of us, [has been] reduced to the right to buy a small piece of one’s own permanent subordination." (383)

"[This mythic route to personal, financial security imploded with the financial crisis of 2008, but]…we were left in the strange situation of not being able to even imagine any other way that things might be arranged. About the only thing we can imagine is catastrophe." (383)

"The real question now is how to ratchet things down a bit, to move toward a society where people can live more by working less. I would like, then, to put in a good word for the non-industrious poor. At least they aren’t hurting anyone. Insofar as the time they are taking off from work is being spent with friends and family, enjoying and caring for those they love, they’re probably improving the world more than we acknowledge. Maybe we should think of them as pioneers of a new economic order that would not share our current one’s penchant for self-annihilation." (390)

"Conclusion: Perhaps the World Really Does Owe You a Living" (388)

SMC: Graeber’s next book was Bullshit Jobs!

Part V – Reimagining Our Financial Future

"In this book I have largely avoided making concrete proposals, but let me end with one. It seems to me that we are long overdue for some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt. It would be salutary not just because it would relieve so much genuine human suffering, but also because it would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way." (390)

"[After the financial bailout, it’s obvious that] we don’t “all” have to pay our debts. Only some of us do. Nothing would be more important than to wipe the slate clean for everyone, mark a break with our accustomed morality, and start again." (391)

"What is a debt, anyway? A debt is just the perversion of a promise. It is a promise corrupted by both math and violence. If freedom (real freedom) is the ability to make friends, then it is also, necessarily, the ability to make real promises. What sorts of promises might genuinely free men and women make to one another? At this point, we can’t even say. It’s more a question of how we can get to a place that will allow us to find out. And the first step in that journey, in turn, is to accept that in the largest scheme of things, just as no one has the right to tell use our true value, no one has the right to tell us how much we truly owe." (391)

Steve Clark

Financial Education the Hard Way

[Citations added on 23 Jan 2023.]

With the recapture of the House by anti-government Republicans (in the form of new Speaker McCarthy's concessions), crucial issues of public finance are about to move front-and-center both in governance and in the political discourse of the social and mainstream media.

The US Constitution specifies that bills to spend federal dollars must originate in the House and then be passed by the full Congress and signed by the President. Congress, of course, is aware when it authorizes spending in excess of what it expects to collect in taxes (this is the annual norm, not exceptional) so, long ago in 1913, it established the Federal Reserve to dispense its dollars to government contractors and to facilitate sales of US Treasuries (bonds) to and by major Wall Street banks (to balance the amount of the deficit). Shortly after creating the Fed, another Congress, in 1917, worried about too much Fed borrowing from private banks and established a debt ceiling limit that, henceforth, required formal Congressional action to raise. With these Constitutional and legal requirements, the Republican rightwing is now positioned to make battlegrounds of the "federal deficit" and the "debt ceiling" in their retrograde war against federal financial cogency and the rule of law.

It is likely that 2023 will provoke the single greatest leap in the American electorate's financial literacy since, at least, FDR's "bank holiday" in 1932 (in the depth of the Great Depression) and, perhaps, since the Panic of 1907 that compelled the creation of the US Federal Reserve in the first place. Back at those times, the electorate was aroused in farm-labor, populist rebellion against the power and influence of JP Morgan and the big American banks. In the up-tick to the decisive 2024 election, financial themes are once again setting up for starring roles.

The principal contradiction in today's world is between human life and Nature, on the one hand, and bank-led corporate exploitation and greed, on the other (in class terms, the service class and its labor-farm allies versus the corporate elite). So long as the views and values of corporate finance dominate the Congress, the Treasury, the Fed and the IMF, Global South exploitation (aka, imperialism) will remain the international rule-of-thumb, and climate change will continue its decimation of our future. Only by taking control of the US dollar and deploying our nation's credit and currency in a collaborative effort -- nationwide and globally -- can our future be saved.

This is a job for the American electorate, and, as each new cohort of today's young Americans reach voting age (and an elderly cohort passes away), the nation's politics turn increasingly future-oriented, concerned, and progressive. This year's struggles over the deficit and the debt ceiling will prepare progressive voters to capture and deploy American financial power in 2024 and beyond.

Toward that end, here's some background on the evolution of private American bank lending, which is the means by which 90 percent of new dollars enter our economy every year. While approving this financial "spur" from private banks, the US government also injects the other 10 percent through its direct public spending. This begs the question: whose money is it?

Whose Money Is It?

As noted, every year banks provide about 90 percent of the economy's new liquidity (currency and credit), but this banker-asserted "right" to issue US dollars is NOT a right but rather a privilege.

Privately-issued credit (whether by rich individuals or corporate banks) was an historic practice in England that was introduced to the American colonies by the mercantile monopoly of the British Crown. In England, the credit system had originated spontaneously because it served the rise of industrialism and capitalist relations of exchange, both domestic and foreign. Because the Crown's monopoly curtailed credit development in the colonies before the Revolution, the yoke of British finance was broadly resented, yet well-understood by the colonial rebels (Chernow, 2005).

In reaction, the first form of self-government adopted after the American Revolution was the Articles of Confederation, an overarching but decentralized government of the new nation by a confederation (association) of 13 financially-autonomous states. In less than a decade, this autonomy produced a host of conflicting legal and financial rules that strangled interstate commerce and politically imploded, forcing systemic reconsideration at the Constitutional Convention in Philadelphia in 1789 (Kelly, 02 Oct 2020).

The new Constitution's first article granted all legislative power to a Congress directed to lay and collect taxes; borrow on the credit of the United States; regulate commerce with other nations, among the states and with Indian tribes; set rules for naturalization and for bankruptcy; coin money and regulate the value thereof; and provide for the punishment of counterfeiters. A host of non-financial duties of Congress followed.

In other words, the Constitution centered and endorsed the new federal government's exclusive control over the nation's taxes, debts and money supply because, without this power, effective national government was evidently impossible.

Of course, the new national government was given power to enforce its financial mandates, including its requirement of citizens to pay various federal taxes only in US dollars. The tax requirement ensured that most Americans -- in particular, the wealthier strata -- would need dollars and, therefore, would embrace dollar-denominated markets as the means of resource allocation and exchange throughout the nation. This is, perhaps, the most fundamental service of modern government because it makes a national economy possible.

The Constitution's innovative financial insight resulted directly from the new nation's commercial crises under, first, the Crown and, later, the Articles of Confederation, but it set parameters that would guide other post-colonial states and the world's nascent economic profession in understanding and deploying the power of sovereign money.

More than a century later, Georg Frederich Knapp, a German economist, published The State Theory of Money (in German in 1905 and in English in 1924), explaining that "money is a creature of law," not a commodity (Knapp, 1924). Taken up by Keynes, Minsky and, most recently, the opinion leaders of Modern Monetary Theory (MMT), Knapp's insight is today known as "chartalism," a financial system in which tokens or tickets ("charta" in Latin) -- backed by the government but with no intrinsic value of their own -- are accepted as payment for real goods, services and resources in society because the designated "charta" are the only approved means of paying government-imposed taxes (Hayes, 07 Sep 21).

As noted, the Constitution's brilliantly-creative financial system predated Knapp's systemic summation of "chartered money" by more than 100 years. Starting with so little sound economic theory for guidance, the implementation of the American system over time was inevitably difficult and inconsistent. Further, the prior and on-going existence of private lenders -- increasingly, private corporate lenders, aka, banks, whose stake in money markets was grounded by their hoards of gold and silver -- left a powerful handful of commercial entities that necessarily accepted the dollar's legal dominion while persistently asserting their capacity (and "right") to issue dollar-denominated credit in their own way, without meaningful government oversight and regulation.

This "independent streak" of banks plagued the Constitution's financial system throughout the 19th century, as banks enthusiastically pumped credit into the economy during economic expansions, then pulled credit and crushed their borrowers and depositors when the economy turned down. For most of the century, these periodic, catastrophic recessions and depressions wreaked havoc among people, businesses and communities and polarized the nation's politics.

Following the then-largest and most devastating financial panic ever (in 1907), Congress finally stepped up and reasserted some of its Constitutionally-mandated authority by passing the Federal Reserve Act of 1913. Seeking a central bank that would hold reserves adequate to back any and all bank-issued credit and exchange (and, thus, end the cause of panics), Congress established the US central bank, the Federal Reserve.

Unfortunately -- but certainly not, in retrospect, surprisingly -- the actual legislation was drafted by a handful of Senators with direct ties to and input from the biggest American banks. While conceding the need of a central bank to constrain public panic, they felt that bankers -- not politicians -- should manage it. Thus, Congress enshrined the Fed as a quasi-public institution...with a Presidentially-appointed Chair but governed by a Board of private bankers.

Beginning its work during WWI and carrying on through the 1920s, the Fed's early "success" in preventing panic was made infinitely easy by the nation's booming, decade-long, Roaring Twenties expansion. But, at the very first sign of significant bank shakiness -- the stock market crash of 1929 -- the Fed could not stem the tide of panic, and the run on American banks drove the nation and world into the Great Depression.

Elected to reverse that tide in 1932, President Roosevelt (FDR) imposed a far more rigorous regime (than the Federal Reserve) on the banks: he forever ended the bank-promoted and Fed-endorsed "right" of any dollar-denominated currency-holder to convert it to gold. Henceforth, all dollars (whether in credit or currency) would be "fiat," that is, completely detached from anything of real-world value and, instead, insured only by the government, itself. Henceforth, if your bank went bankrupt and couldn't redeem your deposit, the government always could and always would.

Panics became a thing of the past.

FDR's decree was codified in the 1933 Glass-Steagall Act that cleaved speculative bank financing from commercial lending and established the Federal Deposit Insurance Corporation (FDIC) (Maues, 22 Nov 2013). FDR also installed a tax regime that heavily taxed wealthy individuals and businesses. In combination with the quasi-public oversight of the Federal Reserve, FDR's new regime proved hugely successful in sustaining a stable, yet vitalized, domestic economy through much of the post-WWII era.

The first cracks in the system arose not domestically but internationally. After the Great Depression and WWII's destruction, a devastated world had been in desperate need of funds to rebuilt. But the prosperous American banking industry -- after acquiring nearly all of the world's gold (in payment for armaments during WWII) -- betrayed FDR's dying wish by inserting one exception into his plan for an international system of exclusively fiat currency and credit: "for stability's sake," US dollars, alone among the world's fiat currencies, would be convertible to gold (Carter, 2020).

Much like the Federal Reserve Act of 1913 -- that did not defeat the banks' gold-based claims on financial power -- the "international gold standard" of the Bretton Woods Accords (1944) allowed central banks to perpetuate the illusion of "bank independence" (relative to government) in the era's massive foreign investment frontier (the Marshall Plan and more). However, by 1970, as the early post-war balance of economic power shifted gradually from the ossifying US to its rebuilding European and Japanese allies, these nations found need to convert their accumulating stacks of fiat US dollars into claims on actual US gold. President Nixon -- reacting in the same fashion as FDR in 1932, but for imperial rather than populist reasons -- unilaterally abrogated Bretton Woods' and declared that, henceforth, US dollars were no longer exchangeable for gold (Carter, 2020).

Suddenly, the world's central banks and their private banking industries were relieved of their claims on both gold and financial power, but the practice of international finance was not nearly so well-regulated as it had been, domestically, under FDR. As the constraints of Bretton Woods peeled away, large, private, corporate (mostly US) banks -- supported by the US Fed chair who, by institutional rules, commands the IMF as well -- broadened and accelerated their drive into the "wild West" of private investment in the post-colonial (and, later, post-Soviet) world.

Exhilarated and bolstered by the profits of 1980/90s credit extensions into these emerging markets, the big banks of the mid-90s turned their attention to "reforming" the tight, US domestic law and regulations left over from FDR. By the end of the decade (under the neoliberal Clinton Administration), they'd repealed Glass-Steagall and freed themselves of all constraints on the nature and amount of their unexamined credit lines. Much of this soon degenerated into speculative credit bundles (of partial American home mortgages) marketed to wealthy investors around the world. And in 2008, when the housing "bubble" blew up, the entire system of international finance would have collapsed had not the US Congress, via the Fed, pumped many trillions of freshly-issued US dollars into Wall Street accounts, enough to prevent global panic.

The good news in that was, owing to the very nature of fiat currency, the US was able to provide as much liquidity as necessary to prevent collapse of the world's markets. The bad news is that the US has lost effective control of bank credit (again), yet the Fed -- beholden to "too big to fail" doctrine -- still provides whatever funds the banks need to bail-out their increasingly speculative credit schemes.

The tail is wagging the dog.

Banks have no "right" to exploit the economy with unrestrained and unregulated credit, but, by their nature, they always try. And over the past three decades, they have managed to repeal the populist, bank-control rules that the New Deal put in place while blotting out any re-examination, at all, of the IMF and its systems of international finance. Today, although the dollar is a Constitutionally-mandated public asset, it is scandalously deployed by the Fed for bank and corporate interests, rather than the needs of the public, the nation, and the world.

In the course of the present social, generational, and service class revolt in the US, American voters must seize effective political power from the corporate elite and install a new regime in public investment and finance, both domestically and globally, one that tolerates private markets and credit but ensures that corporate finance is forever compelled to serve people and the Earth ahead of profit and the spectacular financial and political polarization of civilization.

This can be accomplished by the appointment of a US Treasury Secretary (ASAP) and a US Fed Chair (in 2025) who understand the power and potential of public control of the dollar. Unfortunately, the long-standing reality is that, despite persistent effort, the electorate still has not wrestled full control of our currency and credit from the nation's powerful and self-interested banks and, instead, placed it squarely in the hands of a financially-aware Congress. Gaining that control and institutionally recommitting the US dollar to public investment at the expense of "banker independence" is the central task of today's revolution, the key by which all other programs of social justice and ecological salvation, at home and worldwide, can be powerfully funded and successfully implemented.

Steve Clark

Notes:
Carter, Zachary D. 2020. The Price of Peace: Money, Democracy and the Life of John Maynard Keynes. New York: Random House.
Chernow, Ron. 2005. Alexander Hamilton. New York: Penguin Books.
Hayes, Adam. 07 Sep 21. What Is Chartalism? Investopedia (https://www.investopedia.com/terms/c/chartalism.asp#:~:text=What%20Is%20Chartalism%3F,pay%20taxes%20on%20that%20money).
Kelly, Martin. 02 Oct 2020. Why the Articles of Confederation Failed. ThoughtCo (thoughtco.com/why-articles-of-confederation-failed-104674).
Knapp. 1924. Macmillan & Co, p 1.
Maues, Julia. 22 Nov 2013. Banking Act of 1933. Federal Reserve (https://www.federalreservehistory.org/essays/glass-steagall-act#:~:text=The%20Glass%2DSteagall%20Act%20effectively,Roosevelt%20in%20June%201933).

Election Outcome: OK, Now What?

The recent US election shows that America's generational tide has turned, that today's future-oriented young adults and middle-agers (Millennials and GenXers), along with a large minority of short-life-horizon elders (Boomers), are ready to move on from the chaotic reckoning that corporate capitalism's last act has imposed on the nation.

No, the voters said, we're not going back to hate and division -- to Trumpism -- and we want to get on with visions like the Green New Deal, Build Back Better, Medicare for All, and the Birth of the People's Economy. That is the generational verdict of 2018, 2020 and 2022.

We're not there yet, but we beat back the reactionaries and drew sharpened distinctions between progressive and corporate Dems. The light at the end of the tunnel -- 2024 -- beckons as never before!

Our "rendezvous with destiny"¹ is on the brink of resolution, the last phase -- according to William Strauss and Neil Howe -- before the next era erupts in full bloom.

In the 90s, Strauss and Howe (S&H) -- the historians who uncovered the generational root of American political cycles² -- explained that, since the dawn of the Industrial Age and its steady urbanization of human existence, a nation's intensifying need to ensure social cohesion and collaboration compels reconsideration of its social contract every four generations (every 80 years or so), when all the generations alive at the last "rendezvous with destiny" have passed from life and the nation's politics. Their old social contract is outdated and dysfunctional. Renewal is necessary and vital, but due to a variety of class and social complications (evolving through time), these Fourth Turnings are typically accompanied by extreme social violence, war, and a devastating social catastrophe.

From their study of past cycles, S&H constructed a morphology of Fourth Turnings, the final demise of every era's social contract. Writing in 1997 (25 years ago!),³ their construction brilliantly prophesied the vivid loss of capitalist cultural hegemony that US society now displays. Because it dissects the elements of this transition, S&H's insight deserves quotation at length (all emphasis in original):

"From the similarity of [Fourth Turning] eras,⁴ a morphology can be constructed:

• A Crisis era begins with a catalyst -- a starting event (or sequence of events) that produces a sudden shift in mood.
• Once catalyzed, a society achieves a regeneracy -- a new counterentropy that reunifies and reenergizes civil life.
• The regenerated society propels toward a climax -- a crucial moment that confirms the death of the old order and birth of the new.
• The climax culminates in a resolution -- a triumphant or tragic conclusion that separates the winners and losers, resolves the big public questions, and establishes the new order.

"This Crisis morphology," Strauss and Howe continue, "occurs over the span of one turning...around fifteen to twenty-five years elapse between the catalyst and the resolution...

"Every Fourth Turning starts with a catalyst event that terminates the mood of Unraveling and unleashes one of Crisis. [S]parks of history -- sudden and startling events -- can arise in any turning. Some sparks ignite nothing. Some flare briefly and then extinguish. Some have important effects but leave underlying problems unresolved. Others ignite epic conflagrations. Which ones ignite? Studying the sparks of history themselves won't help answer this question, because what they are is far less important that how a society reacts to them. This reaction is substantially determined by the season of the saeculum⁵ -- in other words, by the turning in which they are located. Sparks in a High tend to reinforce feelings of security; in an Awakening, argument; in an Unraveling, anxiety. Come the Fourth Turning, sparks of history trigger a fierce new dynamic of public synergy.

"The catalyst can be one spark or, more commonly, a series of sparks that self-ignite like the firecrackers traditionally used by the Chinese to mark their own breaks in the circle of time. Each of these sparks is linked to a specific threat about which society had been fully informed but against which it had left itself poorly protected. Afterward, the fact that these sparks were foreseeable but poorly foreseen gives rise to a new sense of urgency about institutional dysfunction and civic vulnerability. The marks the beginning of the vertiginous spiral of Crisis."

In retrospect, we can see the catalysts of the present Crisis in the US: 9/11, the Afghani and Iraqi wars, Hurricane Katrina, and, ultimately, the global financial meltdown of 2008. By aggregate impact, these catalysts left the Millennial generation staring at the bleakest of futures.

S&H continue: "Once this new mood is fully catalyzed, a society begins a process of regeneracy, a drawing together of whatever definition of community is available at the time. Out of the debris of the Unraveling, a new civic ethos arises. One set of post-Awakening ideals prevails over the others. People stop tolerating the weakening of institutions, the splintering of culture, and the individualizing of daily behavior. Spiritual curiosity abates, manners traditionalize, and the culture is harnessed as propaganda for the purpose of overtly reinforcing good conduct. History teaches that, roughly one to three years after the initial catalyst, people begin acknowledging this new synergy in community life and begin deputizing government to enforce it. Collective action is now seen as vital to solving the society's most fundamental problems."

At this point, with the benefit of hindsight, we can see that the nation's polarization heading into the present Fourth Turning was more intense and the pace of events more drawn out than S&H anticipated, but, since 2018, we've seen the slow but steady gathering of constructive, civic momentum (as manifest in the Biden's election and the Democrats' capture of the Senate in 2020 and this year's blue wall).

Anticipating the present moment, S&H continue: "With civic ethos now capable of producing civic deeds, a new dynamic of threat and response takes hold. Instead of downplaying problems, leaders start exaggerating them. Instead of deferring solutions, they accelerate them. Instead of tolerating diversity, they demand consensus. Instead of coaxing people with promises of minimal sacrifice, they summon them with warnings of maximal sacrifice. Leaders energize every available institution and direct them toward community survival. Thus invigorated, society starts propelling itself on a trajectory that nobody had foreseen before the catalyzing event. Societal problems that, in the Unraveling, posed insuperable dilemmas now appear to have simple if demanding solutions. A new resolve about urgent public goals crowds out qualms about questionable public means.

"A Crisis mood does not guarantee that the new governing policies will be well designed or will work as intended. To the contrary: Crisis eras are studded with faulty leadership and inept management -- from President Lincoln's poor record of choosing generals to President Roosevelt's colossal blunders with such alphabet soup agencies as the AAA, NRA, and RFC. What makes a Crisis special is the public's willingness to let leaders lead even when they falter and to let authorities be authoritative even when they make mistakes. Amid this civic solidarity, mediocre leaders can gain immense popular following: bad policies can be made to work (or, at least, be perceived as working); and, as at Pearl Harbor, even a spectacular failure does not undermine pubic support. Good policy choices pay off quickly. (In an Awakening, by contrast, even the best leaders and plans can fail, and one misstep can destroy public confidence.)

"Private life also transforms beyond prior recognition. Now less important than team, individuals are expected to comply with Fourth Turning standards of virtue. Family order strengthens, and personal violence and substance abuse decline. Those who persist in free-wheeling self-oriented behavior now face implacable public stigma, even punishment. Winner-take-all arrangements give way to enforceable new mechanisms of social sharing. Questions about who does what are settled on grounds of survival, not fairness. This leads to renewed social division of labor by age and sex. In the realm of public activity, elders are expected to step aside for the young, women for men. When danger looms, children are expected to be protected before parents, mothers before fathers. All social arrangements are evaluated anew; pre-Crisis promises and expectations count for little. Where the Unraveling had been an era of fast-paced personal lives against a background of public gridlock, in the Crisis the pace of daily life will seem to slow down just as political and social change accelerates."

Aside from women stepping aside for men, we see all these trends in today's emerging, new set of dominant values. With the regeneracy finally taking shape, next comes the climax.

S&H: "When society approaches the climax of a Crisis, it reaches a point of maximum civic power. Where the new values regime had once justified individual fury, it now justifies public fury. Wars become more likely and are fought with efficacy and finality. The risk of revolution is high -- as is the risk of civil war, since the community that commands the greatest loyalty does not necessarily coincide with political (or geographic) boundaries. Leaders become more inclined to define enemies in moral terms, to enforce virtue militarily, to refuse all compromise, to commit large forces in that effort, to impose heavy sacrifices on the battlefield and home front, to build the most destructive weapons contemporary minds can imagine, and to deploy those weapons if needed to obtain enduring victory.

"The Crisis climax is human history's equivalent to nature's raging typhoon, the kind that sucks all surrounding matter into a single swirl of ferocious energy. Anything not lashed down goes flying; anything standing in the way gets flattened. Normally occurring late in the Fourth Turning, the climax gathers energy from an accumulation of unmet needs, unpaid bills, and unresolved problems. It then spends that energy on an upheaval whose direction and dimension were beyond comprehension during the prior Unraveling era. The climax shakes a society to its roots, transforms its institutions, redirects its purposes, and marks its people (and its generations) for life. The climax can end in triumph, or tragedy, or some combination of both. Whatever the event and whatever the outcome, a society passes through a great gate of history, fundamentally altering the course of civilization.

"Soon thereafter, this great gate is sealed by the Crisis resolution, when victors are rewarded and enemies punished; when empires or nations are forged or destroyed; when treaties are signed and boundaries redrawn; and when peace is accepted, troops repatriated, and life begun anew.

"One large chapter of history ends, and another starts. In a very real sense, one society dies -- and another is born."

A new social contract in hand, four generations -- as unified as ever is possible in any complex society -- step forward to tackle the nation's rebirth and the new era ahead.

We're almost there, and the 2024 election should push us through today's unsteady dual (progressive and corporate) power (since 2022) and into full-out resolution of our nation's and the world's socioecological crisis.

Preparing and conducting this final struggle is the work of the next two years.

First order of the day is new leadership. Pelosi and her leadership team have resigned. Most likely, Biden will soon announce his plan to fight like hell for the nation's future while urging voters to choose their next President from among the Democrat's rich stable of would-be commanders-in-chief. If he decides to run again yet fails to mount an effective battle against corporate power next year, he almost certainly will be challenged from the left in the 2024 presidential primaries. Either way, a rich tableau of political debate is bound to energize and guide the electorate in its 2024 decisions.

In the coming 24 months, this Fourth Turning's general command will take final shape, and, upon the guidance indicated by the elections' outcomes, it will direct the design and implementation of America's next social contract.

By 2030, this Fourth Turning will seem distant history. All focus will be on advancing social justice in the course of creative, energetic problem-solving in civilization's existential battle with climate change, an agenda dictated and molded by service class values, necessities and capacities. Despite immense hardship, the generations of the coming First Turning will be solid and fervent in their efforts, and they will enjoy the fruits of a civilization whose living generations are unanimously committed to common, human interest ahead of inanimate corporations and the elite who run them.

This being the present era's path, the only question is the actual content and political leadership of the coming social contract.

The parameters seem set, if not yet consistently acknowledged and respected in debate:

1. Climate change is an existential emergency, and necessitates a global strategy that can be unleashed only with the political transformation of the only financial and military superpower remaining from the post-war era, the US.

2. Corporate capitalism orchestrated today's impending dark age by polarizing society through neglect of social/public investment and goading the private, hoarded, wealth accumulation of corporate elites. Public investment for the strategic good of civilization must become the primary purpose of government at all levels, worldwide. Without enhanced social justice in the US and worldwide, a new dark age is inevitable.

3. The credit and currencies of sovereign nation-states should be tools of public administration in the service of public interest. While supporting a private economy of corporate and small capitalist businesses, governments must ensure social investments in people and infrastructure that negate economic polarization and strategically buttress social cohesion, collaboration and security.

The main line of struggle for power in contemporary US politics is between the corporate Dems -- who, in politics, serve corporations and their elite management -- and progressive Dems, who serve the public, social, non-profit, and small business interests that deploy/employ about 80 percent of the nation's workforce.

The next two years in American political life will be marked by the struggle to clarify direction and leadership in the post-2024 resolution of today's Fourth Turning. Better or worse outcomes are still in the offering. The next two years are likely to be the most politically consequential, yet, in the lives of all of today's living generations, in the US and throughout the world.

Steve Clark

Footnotes:
¹ Franklin D. Roosevelt, Presidential nomination acceptance speech, Democratic National Convention, 1936.
² William Strauss and Neil Howe, Generations: The History of America's Future, 1584 to 2069, William Morrow and Company (New York, 1991).
³ Strauss and Howe, The Fourth Turning, Broadway Books (New York, 1997); quoted section pp 256-259.
⁴ Six eras of crisis and transformation in Anglo-American history:

Wars of Roses (1459-1487), Late Medieval Saeculum
Armada Crisis (1569-1594), Reformation Saeculum
Glorious Revolution (1675-1704, New World Saeculum
American Revolution (1773-1794), Revolutionary Saeculum
Civil War (1860-1865), Civil War Saeculum
Great Depression and World War II (1929-1946), Great Power Saeculum

⁵ Latin for a long, natural life that passes through four phases: childhood, young adulthood, middle age, and elderhood.

Money on the Left Advances Framework for Socialist Construction in US, World

Okay, this podcast -- Democratizing University Finance -- blew my mind.

It vividly explores the present, yet outer boundaries of applied Modern Monetary Theory (MMT, aka, modern macroeconomic theory) and, in the process, opens a wide, instructive vista on socialist construction in a modern, democratic, Service Age economy like our own (and, indeed, like the world's economy, as well).

The Money on the Left collective (an affiliation of Monthly Review) is a cluster of MMT academics who have designed a (let's call it) "public service" currency -- the Uni -- to model an alternative means (to dollars) for universities to finance and conduct their core work -- teaching and research. Currently, universities rely on corporate-financed research and returns on their market-invested endowments (rentier interest), both of which tilt their core mission in ways that prioritize private, corporate wealth ahead of the public's interest.

The basic idea is taken from the on-going, long-sanctioned practice of private banks issuing dollar-denominated loans or credit lines without the use of any money of their own (or their depositors). In actuality, every bank's credit lines are creations of new dollars "from thin air" (achieved through keystroked entries in the necessary online, digitized accounts).

Private banks are able to do this because they are "franchised" for this purpose by the US Congress, which enacted the 1913 Federal Reserve Act that requires all banks that issue dollar-denominated credit to accept membership in and regulation by the nation's then-newly-established (first) central bank, the Federal Reserve.

Under current US law and practice, private banks are the only entities other than the government, itself, that issue "new" dollars into the economy through credit extension. Currently, about 90 percent of the new dollars that enter the economy each year come through private bank lending.

That said, the government has the option of issuing its currency directly into the economy through government spending. During times of war, for instance, government spending vastly exceeds bank spending. And, for instance, in the face of today's global climate disaster, the government could not only spend as much as necessary but, also, channel (via tax and regulatory policy) private bank lending, by design, to pull every available American into work addressing the catastrophe.

This power of public investment was well-understood by the Roosevelt Administration during the Great Depression. With the economy in shambles and banks reluctant to lend, FDR needed to spur commerce. Working with Congress, he granted "the lending franchise" to certain designated federal agencies, and with a tiny amount of federal seed money to get started, they unfolded an array of programs that put people to work, provided income, spurred spending, built back local economies, and enriched the public's wealth. After WWII and FDR's death, the corporate sector successfully lobbied to depress (and obscure) direct government spending in order to reposition private banks in the voters' minds as far more useful than "socialism" for the strategic good of the country (after all, this was the beginning of the Cold War!).

Nevertheless, in this 1930s and 40s history -- with the insight of MMT -- we can see the powerful potential of "fiat" or "sovereign" money to serve the public's interest: it can be created and disgorged at government will!

Robert Hockett, a Cornel University law professor and MMT proponent (who also has a regular column in Forbes and recently published The Citizens' Ledger: Digitizing Our Money, Democratizing Our Finance), is the legal consultant behind HR-3339, the National Infrastructure Bank Act, currently introduced in the US House. When the corporate Dems finally succumb to the progressive Dem majority in Congress, this bill may become the first, trail-brazing marker in the democratic, socialist reconstruction of the American economy. The NIB would be positioned to pour vast amounts of new dollars into the nation's service and industrial economy to revitalize, strengthen, and diversify public sector investment to immediately tackle the unfolding, catastrophic, global, climate-change emergency.

Further, as the Uni model indicates, the coming reconstruction of the US economy along socialist lines -- aka, "socialism with American characteristics" (democratic republic, rule of law, mixed economy, transparent macroeconomic planning) -- does not have to be spurred solely by new federal investment banks. Congress, as it wishes, can extend the "lending franchise" to any public-purpose entity (post office system, universities, CDFIs, non-profit hospital associations) as well as state, local and tribal governments. And to guide, coordinate and regulate such new, diverse, substantial injections of credit into the economy, creative vehicles for overarching economic planning -- Green New Deal Authority, enhanced Council of Economic Advisors, a more transparent and democratic Fed, a Job Guarantee Board at Labor, activist leadership at the Treasury -- will, of course, be necessary and implemented. In this, the service class will enlarge and enhance the government's capacity to serve the strategic interests of Service Age society enduring its existential battle with climate change.

What is evidently possible in the US is equally possible in world macroeconomics. Indeed, the climate change catastrophe cannot be managed, must less diverted, until a plethora of globally-spurred, nationally-specific, public investments are initiated, not under dictates of the US-dominated IMF, but under the guidance of local communities with their national and regional collaborators. But, to enable such collaborative investment, world-scale economic and financial justice must first be achieved. In particular, the US dollar must be replaced as the world's reserve currency (WRC) by a new, global reserve currency that is internationally and democratically administered. Maybe it'll be called the "Globi" or "Climate Salvation Bucks" or something else, but all it really needs is the official backing of the UN/IMF and a new, worldwide, BIS-administered, "financial transaction fee" ("bank tax," "Tobin Tax") on corporate electronic funds transfers (EFTs).

A new global reserve currency will give the world the fiscal engine it needs to save itself from climate change catastrophe. Once progressives gain control of the Presidency and the Congress, an insightful, financial justice advocate can be appointed Chair of the US Federal Reserve, and the new Chair can initiate a global campaign to redesign the Bretton Woods financial architecture for the complex, sustained era of global collaboration and investment ahead.

Bottom line: the advent of "fiat" currency post 1970 (when Nixon ended the gold standard) freed credit and currency from the limitations of capitalist-controlled money supplies, but it has taken decades for economic and financial experts to fully understand the social potential unleashed by "sovereign" (state-owned) money. Today, with the insight of MMT, we're on the cusp of a grand but difficult new era in which the government's -- and, in a democracy, the peoples' -- money is persistently and effectively invested in the public's interest.

This podcast on the "Uni" is a revelatory delight.

Steve Clark

American Socialism Lacks Vision and Plan: Post-Marxist Social Science Can Help

[Below are the remarks I delivered at a Voices for New Democracy forum on the future of American socialism on September 11, 2022.]

[Slide 1: title slide]
Thanks for the introduction. Hello, welcome to all of you, and thanks for joining tonight's discussion.

[Slide 2: Socialist revolution in today's "post-industrial" society]
Tonight, I want to talk about socialist revolution in a country like ours -- what that looks like and where we're at in the process.

I'm going to follow this three-point outline...and, also, here is my email, should anyone want to pursue the conversation after tonight. I hope you will.

[slide 3: Current political assessment]
1. Let me start with the principal, controlling contradiction in the world today; in my opinion, it's between Human Civilization and Nature; three things seem especially relevant:

First, the climate-change calamity is an existential threat to humanity; "existential" means existential, and climate change, already, is imposing a new dark age on our civilization.

Second, the only way to mitigate and abate this calamity is through sustained, world-scale collaboration of all nation-states.

Third, in this crisis, the US state, the world's last financial, military and imperialist superpower, is the single most dominant, most powerfully-positioned state...and, in fact, the only state that we Americans can and do directly control.

2. Now, let's note the changing vibe around prospects for the fall election and 2024.

a. The outcome of the election, of course, remains uncertain, but, best case, Dems could hold the House majority and elect enough Senators to change the filibuster rule; think what that will open up; even if we're not that successful this year, the writing looks to be on the wall...if not this fall, the congressional log-jam will likely be broken in 2024.

b. Already, the majority of House Dems are self-declared progressives...and, as the social media make plain, a host of even more progressive Dems are running for local and national office, all across the land.

c. Pelosi and Biden, both nearing 80, are in the twilight of their careers; both are under strong, persistent pressure from their left.

3. So, prospects look good, but there's more...in my view,

a. Trump won in 2016 only because the corporate Dems blocked Bernie from the nomination, and independent voters -- about a third of the electorate -- weren't willing to vote, again, for a Clinton with a faltering, neoliberal, corporate Dem agenda.

b. Trump was -- still is -- a racist, misogynist huckster and, once in office, he had nothing constructive to do but pull together other opportunists and use Americans' mounting dismay, and grievances, to wreck government from within.

c. As his notions and designs had nothing to do with the people's interest, his support among independents soon flagged; but just as covid unleashed the gravest national crisis since the Great Depression, the Dems' second derailment of Sanders and their nomination of Biden restored enough comparative luster to give Trump an outside chance at re-election that fall, two years ago, in 2020.

d. Before that election could be decided, however, the televised police murder of George Floyd on May 25 sparked a national uprising against state violence at the local level; the public squares of virtually every American city and town were inundated and occupied under the banner of Black Lives Matter and broader social justice, in general.

e. A week later, in bumbling fashion, Trump attempted a coup by declaring his intent to impose law and order and brought out the Chairman of the Joint Chiefs of Staff to back him up.

f. But, the top general quickly turned his back on Trump, declared his support of Black Lives Matter, and announced the military's support of free and fair elections come November.

g. Just as we might have fantasized back in the 70s, the US military sided with the popular uprising, and the peoples' confrontational, yet peaceful revolution was a full go.

h. Yet, this being a democracy, the revolution still had to prove itself and choose its leaders at the ballot box.

i. In November, with independents holding their nose to vote against Trump, Biden edged him for the Presidency, and with the sweep of the special Senate election in Georgia, a dual power alliance of progressives and corporate Dems regained control of the government.

j. Desperate, Trump fomented a rightwing insurrection on Jan 6; it failed, and the right is now on the defensive, dodging investigations and choosing lousy candidates for this year's elections.

k. Hence, prospects are good for a qualitative leap in progressive power in government after November, one that turns dual power with the corporate Dems on top into dual power with progressives in control.

So what's going on here? Is this just another round of back-and-forth between the rightwing and the Democrats, one that just happens to be swinging our way right now? Is this merely more of the culture wars we've endured, now, for decades? Is it possible that Trump and his ilk will get back into power? Or is this, as I suggest, a revolution, one just past its tipping point, that is ever so slowly gaining momentum...indeed, irreversible momentum? How can we tell?

[Slide 4: Post-industrialism: what's going on and why?]
This is where revolutionary theory and modern social science can help.

a. Like many of you, I was active in the party building efforts of the New Left in the 1970s and 80s, and, not to belittle the differences among the various formations, we all tried to use the prevalent Marxist-Leninist theory of the time as our guide; already a self-identifying revolutionary when I encountered Marxism, I found this theory -- on the nature of the state, class struggle, and cultural hegemony -- immensely illuminating; still, when all of our study and almost two decades of on-the-ground work produced no meaningful results, it was obvious that some things were missing in our theory and practice, and I agreed with the decision to disband the CWP/NDM and go, individually, into the mainstream, hoping to figure things out.

b. For me, the mainstream was teaching high school social studies, which had the benefit of allowing a lot of time for personal study and wider investigation; this put me in touch with a number of social scientists whose work -- once integrated with basic Marxism and applied to understanding the evolving politics of the post-WWII era -- paints a vivid, instructive picture of what's going on today.

in a nutshell, here's what the science says:

a. Because of accelerating global oil depletion throughout the postwar era -- so-called "peak oil" -- and, consequently, its steadily rising price, industrial mass production -- and industrialism, in general -- was strategically imperiled, and, as early as the 1950s, a new mode of production that relied substantially less on oil -- what we and others called "post-industrialism" -- emerged and became dominant; in this new mode -- let's call it "service production," a more descriptive name -- people sustain their lives by providing service to others, rather than by providing labor in factories, mines and mills; this new mode produced a new class of working people, not proletarians, but, rather, servicers...the service class; today, according to BLS data, 80 percent of everyone who works in the US is a servicer of some sort, and they are a rapidly growing and strategically-powerful class in every nation, worldwide; servicers differ from proletarians in many ways, including the fact that, whether self- or corporate-employed, servicers understand that they succeed or fail on the basis of the quality of their service; they grasp intuitively that racial, gender and national prejudice gets in the way of effective service and do not abide such continuing oppression; further, without top quality servicers, no business -- or any nation, nor the global economy, in general -- can succeed and prosper, much less mitigate the escalating impacts of climate change; with service production, the workforce, itself, replaced oil as production's key resource; for the first time since perhaps the Stone Age, the skills, talents, knowledge, networks, and empathy of ordinary people -- qualities attained in the course of lifelong learning -- are now the single, most crucial factor in our mode of production, a reality that has qualitatively empowered labor in its contest with capital.

b. Meanwhile, the complexity of postwar global production and trade, especially given the inherent anarchy of capitalist production and the uneven, never-settled competition among imperialist rivals, forced the US and the world -- with Nixon's 1970 decree -- to abandon gold-based finance in favor of universal, state-created money and credit, otherwise known as "fiat" or "sovereign" currency; while banks retained their role in purveying the state's currency into the economy -- and continued collecting interest on their credit lines -- the banking industry was effectively "expropriated" and reduced to the role of government franchisee; since 1970, all dollar-denominated funds for investment, public and private, whether they come through a bank or are allocated directly from government, are created by authority the US Treasury which, in theory and under Article I of the Constitution, is directed solely by the US Congress and the President; thus, only a continuing lack of financial literacy among the voters and our elected representatives -- a fog that is persistently nurtured by Wall Street banks via their control of the Federal Reserve -- prevents the government from immediately adopting a new, service-oriented -- shall we say "socialist"? -- social contract and, in that way, directly tackling the dark age that is descending on our nation and the world.

c. Meanwhile, through the course of the entire postwar era, right up to the present, the New Deal -- the social contract that had resolved the last great round of historic crisis, the Great Depression and WWII -- lost its vigor in the face of astounding social and ecological change and with the gradual die-off of all the generations who had been alive for its creation; after the Boom generation's cultural rebellion of the Sixties produced the "generation gap," the nation sank into two decades of cultural warfare that polarized society while further and fully undermining confidence in the old order and its values; after the 2008 financial meltdown, and with Occupy Wall Street in 2011, capitalist cultural hegemony fell to the low-point of its 80-year cycle, and service class opinion leaders in all of today's living generations -- Boomers, GenXers and Millennials -- announced their common objection to continuing corporate rule, proclaiming, "We are the 99%!"; thus, four generations after the last "rendezvous with destiny" in 1934, today's generations now face destiny once again...and with less than a decade left to make the most of it before our rattled culture coalesces again, around the best set of values it can find; increasingly becoming a class-for-itself in the aftermath of Occupy, the service class turned against neoliberalism and, in 2016, began its direct struggle for state power via Sanders' socialist candidacy; then, in 2020, upon George Floyd's murder, the service class rose in national rebellion, and this revolutionary uprising has resulted, so far, in today's unstable political reality in which progressives and corporate Dems share dual power in the Congress and Administration, yet the corporate Dems remain tenuously on top; though the cultural tide has turned against corporate rule, the service class still must turn dual power into progressive power in Congress and vanquish the corporate elite though the institutionalization of a new, service-oriented social contract.

All this was, and is, independent of human will.

[Slide 5: Post-Marxist social science can help]
So, that's where things stand today, according to the most advanced social science available; tonight, there's not time to buttress this assessment with any kind of meaningful elaboration of the theory that guides it; for that purpose, in June, I published a short booklet titled American Socialism Lacks Vision and Plan: Post-Marxist Social Science Can Help; I urge you to read it, along with any and all of these books by the analysts who've enlightened me since the CWP disbanded; I welcome questions and ongoing evaluation of this theory and its implications, even after tonight's discussion...you've got my email!

[Slide 6: What's the Left to do?]
The only thing left to say is what all this might mean for the work of American socialists and political revolutionaries in the period ahead...

a. In this, I think the DP is an adequate vehicle for progressive, mainstream governance, which must be grounded in the new social contract that will coalesce over the course of the next few election cycles.

b. To influence and guide voters, candidates for office, the progressive Congressional majority, the next President, and the next Administration in the creation and implementation of this new social contract, the nation needs to fill an important gap in our politics with a progressive Left North Star with a socialist vision.

c. Millennials and GenX leftists are already out front, signaling their strong support of socialist solutions; in contrast, Boomers were the only generation that stood with the status quo in 2020; that needs to change and it will, when the Boom generation's aging left wing embraces the time-honored role of social elders, helps forge a cross-generational Left North Star, and guides it to the front of the nation's struggle for a new social contract.

Between now and 2030, there's a lot of hard work for a Left North Star to do. With CPAC, the conservative movement showed what can be achieved in a few decades, even if your line is fallacious and self-serving; if the Left -- rising to the immediate, obvious, pressing necessities of climate-change catastrophe -- can apply some of CPAC's methods in the shorter period ahead, we'll certainly be constructing and living under socialism with American characteristics by the end of this decade.

I'll leave it at that. Thanks for listening. I look forward to your comments and further discussion.

Steve Clark

New Essay Critiques Theoretical Shortcomings in US Left

Below is the preface of my new e-booklet: American Socialism Lacks Vision and Plan: Post-Marxist Social Science Can Help, available now at Smashwords for 99 cents. It's a short essay (9700 words) that can be read in about an hour. I look forward to comments and response.

"At this crucial juncture in world affairs – with climate change compelling a revolutionary re-examination of corporate capitalism – the inspiration and direction of a Left North Star in American politics is essential.

"Unfortunately, today’s US Left, laboring with Marxist theory that has been stagnant for more than a century, cannot project a useful vision of American socialism. Nor can it see its way ahead. Until this flaw is corrected, the Left cannot fill the leadership void so crucial now for revolutionary success.

"Fortunately, the social science necessary to pull the Left's vision and plan together exists…it just wasn’t distilled by Marxists so, for the most part, the Left hasn't noticed. This instructive science is, instead, the work-product of relatively contemporary, disassociated, activists and academics from outside the Marxist tradition. If the American Left hopes to be a serious force in political revolution and socialist construction as the present crisis deepens and resolves, it needs to transcend its ideological icons and catch up with major advances in social, economic and class analysis.

"This pamphlet summarizes three, key 'post-Marxist' insights necessary to infuse and project a contemporary vision of American Socialism that inspires, guides, and gains the confidence of today's surging revolutionary movement.”

Steve Clark

Getting to the Principal Contradiction in Ukraine

The situation in Ukraine is complex and has caused a rift within the American Left.

Both sides oppose both Russian violence and US (NATO, western) provocation, but one wing – blindered by its staunch opposition to US imperialism – justifies Russia’s violence by the West’s persistent NATO expansion and (euro and dollar) financial penetrations.

“At some point," they say, "the West knew (or should have known), Putin would draw the line. They baited him, and, now, they hope to vanquish him.”

“Baited, no doubt,” says the other wing, noting a common imperialist ploy. “But, at every juncture since the socialist camp disintegrated, Ukrainians freely and reasonably chose independence from the Russian Federation rather than reintegration. Morality’s not about picking US or Russian imperialism but, instead, about siding with Ukrainian self-determination and its liberation from Russia’s military yoke.

In On Contradiction, Mao showed how to dissect complex realities (like Ukraine) and, accordingly, how to uncover the principal contradiction that controls the overall outcome. The essay deserves a complete read, but this excerpt sets forth its rationale:

As opposed to the metaphysical world outlook, the world outlook of materialist dialectics holds that in order to understand the development of a thing we should study it internally and in its relations with other things; in other words, the development of things should be seen as their internal and necessary self-movement, while each thing in its movement is interrelated with and interacts on the things around it. The fundamental cause of the development of a thing is not external but internal; it lies in the contradictoriness within the thing. There is internal contradiction in every single thing, hence its motion and development. Contradictoriness within a thing is the fundamental cause of its development, while its interrelations and interactions with other things are secondary causes. Thus, materialist dialectics effectively combats the theory of external causes, or of an external motive force, advanced by metaphysical mechanical materialism and vulgar evolutionism.

Saying the Ukraine crisis was caused by the US (or Russia) ignores the fundamental reality that it arose from centuries of occupation (oppression) of the Ukrainian nation by (generally Russian but occasionally Austria-Hungary, German or Polish) imperialism. Ukrainians want to set their own destiny and are in the process of doing so.

That is the principal contradiction in Ukraine. Once we leftists fully embrace this cause, we’ll find ourselves on the “right side” of history, aligned with the suddenly-emergent, global consensus against violence in international conflict and ready to deploy it against the Saudi war in Yemen (and other regressive force applications backed by US imperialism).

Accordingly, we can join Ukrainians in genuine solidarity while we continue our own domestic (internal) struggle to gain state power and end US imperialism, forever, in practice.

Steve Clark

A Proposal to Democratize and Restructure Global Finance

The war in Ukraine has revealed a potential fault line in the US left. A significant segment is justifying Putin’s invasion as a fair reaction to aggressive, US financial and commercial advances into eastern Europe and Ukraine since the end of the Cold War.

But, in a surprise for Putin, using war to tackle international problems has suddenly become morally reprehensible, and he has put himself and Russia on the wrong side of history.

Before this war, one line of leftist thinking already heralded a financial alliance of US-dissident states -- China, Russia, Iran, others -- concentrating their commerce and boosting a worthy currency alternative (the renminbi, perhaps) that would undermine the dollar's present hegemony, thus strengthening the struggle to overcome US imperialism (a view expressed, for example, by Michael Hudson). While such monetary competition could prove useful along the way, the mere advent of competition for world reserve status does not, itself, offer hope of a fair, stable and enduring financial system for the whole world.

There is a better way to fight US imperialism, and Russia – along with the US left and China – should get on board:

1. Rewrite the Bretton Woods Accords to replace the dollar as de facto international reserve currency with (a) a new, IMF-designated, digital, de jure world reserve currency (WRC) that is supported by (b) a system-wide, WRC-denominated tax on the electronic funds transfers (EFTs) of the world's corporate commerce.
2. Establish a new, integrated system of global fiscal and investment management in which a democratic assembly of central bankers of the world's currency-sovereign states systemically discourses with the world's governments (via the UN?) and people (via social media and advisory forums, TBD) and, with this popular input and oversight, directs public credit to pursue vital, global, social and ecological goals.
3. Cancel foreign-denominated debt held by all Global South nations to clear their path to domestic currency sovereignty and establish a level playing field, going forward, with IMF-designated, WRC-denominated reparations for past imperialist exploitation and expropriation.
4. Institutionalize a global system of WRC-denominated, direct, global-to-local block grants to deploy and administer flexible, community-based, Global Job Guarantee programs, at sustainable local compensation, for anyone unable to find suitable, private sector employment.
5. Institutionalize a global system of WRC-denominated, progressively-scaled, per capita block grants to every nation to administer two global policy (civilizational) initiatives: a Global Green New Deal and a World Health, Education and Reconciliation Service.

A month ago, restructuring global finance was on no one’s agenda, but Putin’s war and the West’s truly unprecedented financial sanctions have brought Chinese mediation into play.

Apparently, the short-cut to the future we all need is a global declaration against war that is enabled by a new, just, financial system in which no nation dominates and every nation has fair and equal access to the investment credits necessary to tackle the climate crisis according to its own specific needs and opportunities.

Speaking for all nations dissatisfied with the US dollar regime, China can advance global financial reform as a concession worthy of Russia’s withdrawal from Ukraine. American leftists – including progressive MMT advocates – should encourage China’s involvement.

Steve Clark

What is Socialism with American Characteristics?

[Some friends from the old CWP are currently engaged in an assessment of "our mission" as we continue our year-long collaboration, Voices for New Democracy. To that end, it may be useful to reconsider and update conceptions of "socialism with American characteristics."]

Every socialist state is different from all others. Taken at their best, their commonality is the self-declared intention and real-world effort to put their nation’s broad, strategic, public interest ahead of narrow, immediate, private and corporate interests.

The Paris Commune, Soviet Union, China, Cuba and Viet Nam – history’s most prominent socialist states – each has (or had) characteristics unique to its particular time and place. Inevitably, American socialism will also display a unique character, one consistent with our nation’s history and temperament as well as its 21st century, domestic and global imperatives.

Marx, Lenin and Mao – each a practical and successful revolutionary in his time and place -- never composed a vision of socialism in a modern, post-industrial nation, much less a passed-its-prime, global superpower like the US. With no vision at hand, today’s American Left is aging in place, and the struggle for a new social contract cannot defeat the right’s manipulation of traditional values to perpetuate capitalist systems of power and profit.

What is a reasonable vision of socialism in America? Here’s a framework to start discussion:

1. Socialism with American characteristics is a national political-economy in which the “commanding heights of finance” (the dollar and its key functionalities) are (a) in the self-aware, overtly-acknowledged, public control of our democratic state and, accordingly, are (b) systemically deployed – legally and institutionally – to maintain full employment while tackling the social, economic and ecological crises of Americans and the world’s people.
2. Socialism with American characteristics does not entail the violent overthrow of the state. And aside from its full assumption of the Constitution-designated “power of the purse” (Art. I, Sec. 8), it involves no broad nationalization (state seizure) of current or future, private or corporate capital, nor any actual means of production. Neither does it mean the elimination of markets or systems of global commerce and trade.
3. Socialism with American characteristics is today’s same, democratic, constitutional government -- augmented with constitutional amendments in key areas, such as election systems and voting rights -- but with one crucial difference: complete, public control of the US dollar via the Treasury and the Federal Reserve and the formal delineation of private banks and bank corporations as “US-regulated agents” for private sector investment.
   

   With the dollar’s financial power under public control, the American socialist state augments traditional government spending with new tracks of public purpose investment. On the one hand, it implements a Federal Job Guarantee (FJG), a Green New Deal (GND) and other national, industrial policies that tackle key problems while also fostering for-profit, private sector enterprise (to enable entrepreneurialism, general production and exchange, employment, and private savings). On the other hand, it invests heavily -- directly and via block grants to tribal, state and local governments -- in non-profit, caring and service enterprise that is vital to social cohesion and stability but not profitable enough to attract capitalist investment (for example, indigenous and slave reparations; emergency civilian service corps; healthcare, childcare, and education for all, preschool through college).

4. Socialism with American characteristics holds the nation to account for its history as the last imperial superpower by paying reparations to victim-nations while casting US votes at the IMF/BIS and the UN to end the US-directed sanctions regime and democratize the world’s reserve currency.
5. Socialism with American characteristics relies on the steady perfection of democratic government through the persistent engagement of Americans in elections, policy and legislation and with our Constitution and its amendment. Unlike most socialist states from earlier eras, American socialism does not rely upon the collective viewpoint of any particular social or political entity (such as a communist party), though such entities – indeed, all kinds of entities -- may exist and contribute to the on-going reform and reconstruction of American politics and culture.

These five points comprise a working vision of socialism with American characteristics. When American socialism finally comes to life, contradictions between it and other socialist systems will be struggled out and resolved in the course of collaborative efforts to save the whole world.

Steve Clark

Review: Revolutions, a Podcast for Revolutionary Times

At heart, every revolution is the strain and chaos of conflicting social forces confronting and resolving an uncontrolled rush of life-and-death political crises. Darkest just before their new dawn, revolutions generally catch by surprise and overwhelm their antagonists.

No one should expect a revolution to run smoothly, but – if they succeed and enter history – revolutions, one way or another, discover their own, unique paths to liberation.

American podcaster and historian Mike Duncan has made it his business to examine and report on many of the world’s greatest and most important revolutions. Starting with Rome’s revolution – which he chose to research when, a decade ago, he discovered that no one had ever done a podcast on the topic. Duncan was captured by his listeners’ enthusiasm and went on to cover nine more of these momentous human events. In the process, Revolutions won awards, and Duncan has become perhaps the most prominent history podcaster in history. Caught up in his energy and style, I recently binged the Russian Revolution, just for the fun of it…and was not disappointed!

Readers may know that I referred to Lenin as “my political avatar and alter ego” in a book I published in 2015, titled: What Is To Be Done? Class Struggle in the 21st Century. Two things I especially like about Lenin: one, he relied on theory as a guide to action, yet was seldom dogmatic and intentionally creative in its application; and two, he got the job done! He led the Bolsheviks who led the Soviets who led the working class that led the national revolt against Russian absolutism that culminated in socialist revolution in 1917. Lenin’s truth was proven in practice.

So, yes, in general, I am a Lenin fan -- and that’s what drew me to Duncan’s story – but, it turns out, his history of the Russian Revolution is hardly focused on Lenin. Rather, Duncan provides a sweeping survey of all the class forces, would-be leaders (Tsar Alexander, Plekhanov, Stolypin, Kerensky, Martov, Trotsky, Krupskaya, Stalin, Rasputin, etc.) and political organizations (Bolsheviks, Mensheviks, Cadets, Social Revolutionaries, the Bund, etc.) that played any serious role in the revolution, beginning with Catherine the Great’s last year on the throne (1796)…and he does it with the confident, immaculate voice of an accomplished story-teller.

If Duncan didn’t do such a good job pulling together and telling the whole story, I’d never recommend Revolutions because it’s just too long. I didn’t realize when I started that the Russian Revolution was going to run 80+ episodes, each about 30 minutes. That’s 40+ hours! I’d have never bitten off so big a chunk. But, when Tom Clark told me about it, he failed to mention its full length, and, after I listened to the first episode, I was hooked. That was the episode: 10.1 The International Working Men’s Association, I dare you to try!

Despite the longer-than-expected commitment in which I was thus entrapped, I cannot complain because, in addition to the refresher course in Russian history (which I’d studied but largely forgotten), the podcast was a lucid rendition of the interplay of class and social conflict that might unfold in any revolutionary situation (of which Russia had several during the 125 years covered in the podcast). Leaving aside any dry, academic expositions of such interplay, Duncan simply tells the story, enabling a listener’s search for relevance that might be applicable in other revolutionary settings (such as the US).

Of course, readers who are (or were once) Marxist-Leninists know the socialist revolution in Russia was the beacon for revolutionaries in all countries for pretty much all of the 20th century. But it’s been a long, long time since that beacon shined brightly. Duncan’s history respects the revolutionaries who prevailed – Lenin and the Bolsheviks – but his very wide scope also illuminates the power of the bigger, extremely complex, political milieu that that every revolution must navigate in order to succeed.

Today’s American society is far different but no less complex than Russia back in the day. It is rife with classes and class struggle and with a host of fascist, centrist and (less so, unfortunately) leftist organizations, each with leaders on a tumultuous but uncertain playing field, trying to figure out what to do. I find that very much today’s circumstance as our nation steers itself through a profound, enduring, political (I would say revolutionary) crisis that has no relief in sight.

Like the socialists in Petrograd after the February (1917) revolution, we socialists in the US today find ourselves sharing dual power with corporate-capitalist politicians who still dominate government, yet have little idea and no capacity to tackle the rapidly worsening crisis at hand. Our options and today’s remedies are far different than Russia’s, but the dynamics of flailing bourgeois enemies trying to bully the scene for their own sake is so similar that you can’t miss the parallels.

Revolutions won’t tell you what to do, but it will make you feel better and more confident that we can (and will) figure it out. Just like the revolutionaries before us.

Steve Clark