posted by Matt Stannard
I’m for public banks because people have a
right to share in sustainable abundance, such abundance is relatively easy to
achieve structurally and democratically, and neoliberalism’s reliance on the
private sector to get us there is foolish.
The Commission on Social Development is a
sub-body of the United Nations Economic and Social Council. In 1995 the
Commission hosted a Summit on Social Development in Copenhagen, which the
United States attended—sending a contingent led by then-Vice President Al Gore.
All participating nations at the Summit signed its set of conclusions, the
Copenhagen Declaration on Social Development. The Declaration held that the
Commission’s task was “to address both [the] underlying and structural causes”
of poverty, unemployment, and social exclusion, and “their distressing
consequences in order to reduce uncertainty and insecurity in the life of
people.” The agreement wasn’t law, it wasn’t enforceable even by the limited
standards of international law, but it established a public and agreed-upon
moral framework among its participants, good enough to at least inform a
conversation on economic policy in these troubling and rapidly-changing
times.
The Copenhagen Declaration was riddled with the
contradictions of bourgeois political economy—contradictions that have
heightened a lot in the 20 years since the Summit. Although the document argued
that economic and environmental insecurity were intimately related, it clung to
“economic growth” as a prerequisite to “social justice,” albeit in the context
of sustainable development. Classical models of productivity ran through the
rhetoric, from lamenting the “ineffectiveness in the functioning of markets” to
utilizing the language of “opportunity” – complete with availability of credit
as a model solution. “Productive employment and work” was similarly
unreflective. The “liberalization of trade and investment” were assumed to be
necessary for “sustained economic growth and the creation of employment.”
Today we know that there is plenty of work, but
much of it no longer fits (if it ever did) into Fordist models of structural
employment. In the developed world in particular, we know that the elites don’t
even want everyone to be employed, that artificial scarcity is necessary to
justify the continuation of whole categories of financial practices, and that
traditional employment is vanishing while working people’s financial
obligations are not. However imperfect, the 1995 Declaration contained seeds of
hope that, when planted in the soil of a New Economy, could produce far better
fruit than the bitter trees of neoliberalism. It insisted that people “are
entitled to a healthy and productive life in harmony with the environment.” And
it recommended social expenditures for the poor in language that didn’t suggest
“workfare” or other exploitative shams.
Vice President Gore’s
statement at the Summit, on behalf of the United States, showed much more
concern for environmental reform (which Gore has always filtered through the
lens of corporate capitalism) than economic reform. Restructuring was necessary
for environmental solvency, Gore’s rhetoric seemed to imply, but he framed
poverty along very neoliberal lines. His articulation of the foundational
poverty question of the Summit was: “What can be done to lift the poorest of
our citizens into productive lives?” And he viewed humans, from healthy and
productive to sick and uneducated, as “unrealized economic and social
potential.” Potential for what? The answer would come in his administration’s
NAFTA push, and something even worse.
In his statement, Gore said:
We [the Clinton administration] are working now
to create a more vital relationship between the government and the people. We
cannot succeed if we treat the poor solely as passive recipients of assistance
-- whether for welfare, food stamps or medical care. We are instead designing an approach
that empowers people to be active partners in the management of their own
fates. We have to find new links to our own people -- with a government that works better and costs less,
and focuses on results.
The new “approach” Gore was talking about was
the Personal
Responsibility and Work Opportunity Act, a devastatingly awful piece of
legislation that bought into the twin false narratives of economic scarcity and
poverty-as-personal failure and outflanked the Republicans by driving millions
of people into material desperation. In a 2012 article, Jason DeParle articulated
the devastation:
. . . much as overlooked critics of the
restrictions once warned, a program that built its reputation when times were
good offered little help when jobs disappeared. Despite the worst economy in
decades, the cash welfare rolls have barely budged . . . Even as it turned away
the needy, Arizona spent most of its federal welfare dollars on other programs,
using permissive rules to plug state budget gaps. The poor people who were
dropped from cash assistance here, mostly single mothers, talk with surprising
openness about the desperate, and sometimes illegal, ways they make ends meet.
They have sold food stamps, sold blood, skipped meals, shoplifted, doubled up
with friends, scavenged trash bins for bottles and cans and returned to
relationships with violent partners — all with children in tow.
. . . Poor families can turn to other programs,
like food stamps or Medicaid, or rely on family and charity. But the absence of
a steady source of cash, however modest, can bring new instability to troubled
lives.
. . . if the rise in employment was larger than
predicted, it was also less transformative than it may have seemed. Researchers
found that most families that escaped poverty remained “near poor.” And despite
widespread hopes that working mothers might serve as role models, studies found
few social or educational benefits for their children. (They measured things
like children’s aspirations, self-esteem, grades, drug use and arrests.)
Nonmarital births continued to rise. . . . the number of very poor families
appears to be growing.
The United States’ participation in the
Copenhagen Summit, and its signature on the nonbinding Declaration, raises the
question of what governments are supposed to do to domestically enact the soft
norms they’ve officially and ceremonially agreed are important. At least two
United Nations experts have weighed in on the role of income distribution and
poverty in the enactment of international human rights norms. José Bengoa,
Special Rapporteur to the Sub-Committee on Prevention of Discrimination and Protection
of Minorities wrote in 1997 that it was reasonable for human rights monitors to
note
when situations are occurring where the high
concentration of wealth in a few hands is producing devastating social effects
with consequences so serious as to threaten the ‘social integration’ of the
society in question, or at the international level, the balance of a given
region . . . From a human rights perspective, it is generally felt that
[extreme inequality and wealth concentration] would entail violation of the economic, social, and
cultural rights of the population, incurring permanent discrimination and
violation of the fundamental rights of individuals . . . Poor income
distribution constitutes a specific type of discrimination that
very often aggregates with other discrimination . . . and has as a consequence
the new forms of poverty that are the scourge of the world today.
And, scholar A.M. Lizen, an expert on the
Commission on Human Rights, explained in 1999 that the most appropriate
domestic implementation of socioeconomic rights is structural, listing
“infrastructure targeted for low-income communities,” “access to basic social
services for all,” and “sustainable livelihoods for the poor, including access
to productive assets such as credit.”
Talking about a human right to economic
security, by the way, isn’t outlandish or hyperbolic. It’s far less incendiary
than what the
current pontiff is saying:
Referring to businesses that hire employees on
part-time contracts so they don’t have to provide health and pension benefits,
Francis said Thursday (May 19) that was akin to sucking the blood from their
workers’ veins, leaving them “to eat air.” “Those who do that are true leeches,
and they live by spilling the blood of the people who they make slaves of
labor” . . . “We thought that slaves don’t exist anymore — they exist,” the
pope said. “True, people don’t go and get them from Africa to sell them in
America anymore, no. But they exist in our cities. And there are traffickers,
those who use people through work without justice.”
That moral posturing, combined with the
recognition that material deprivation is a form of discrimination and
constitutes a violation of human rights, is historically appropriate. Put
together, Lizen and Bengoa’s analysis suggests that there is a human right to
economic security, in the absence of which people suffer acute discrimination;
and that the best way to execute that right is through structural reforms aimed
at material accessibility.
Which brings us to public banking—everything
from large-scale infrastructure and business lending (if we actually want to
make market economies work for everyone, or if we want to experiment with
alternatives, public banks to finance those alternatives), to postal or other
banks to lend credit and even facilitate direct cash transfers or basic income
as it becomes increasingly clear that old models of business and productivity
do not account for new economic realities, from labor-saving innovations to the
ecologically necessary transition away from extraction and exploitation.
Public banks work. They fund public goods, they
can be engineered to facilitate sustainable economies, they can be made 100%
transparent and democratically accountable, and they have no institutional
incentive to gamble on misfortune and misery. Utilizing them would shatter the
illusion that there is some kind of fiscal scarcity that functions in the same
way as the scarcity of natural resources. The very existence of public banks
capable of democratizing the creation of money refutes false scarcity and
clarifies what we don’t have enough of (and must therefore manage) and what we
have an abundance of (and must therefore share).
One can and should read the literature for and
against public banking, the variety of methods to implement it, and the
experiences of those groups around the United States who have been pushing for
several years now to get public banking bills out of committee and onto
legislative floors. One should observe how vociferously and vacuously opponents
of public banking—so very often supported by big private financial
interests—churn out bad arguments against it. But if you don’t have time to
study all of that, the foundational justification for public finance is simple:
Although material resources are scarce, money
is a social construct. That doesn’t mean we ought to create money carelessly,
but it does mean we create
money. So the only questions are who ought to control that process,
and how to prioritize the applications of its power. The people should be in
control, and private interests making money from money is socially
destructive.
The Clinton administration didn’t understand
this in the 1990s. The Bush administration that followed didn’t even understand
that it didn’t understand it, and the Obama administration, in continuing a
weak approach to Wall Street regulations, while pushing “managed” private
health care and neoliberal trade agreements, and demanding energy transitions
with only half-measures of economic security for energy workers, has been
disappointing. Both parties have thoroughly bought into monetarism and
neoliberalism, allowed Wall Street to steal hundreds of billions of dollars
from municipalities, and maintained a narrative (albeit occasionally standing
on distinct sides of it) that assumes people only deserve economic security
through hard labor that adheres to a capitalist business model and that the transition
to ecological sustainability, like the transition to universal health coverage,
must be filtered through the demands of big capital. The idea that a
corporate-bred thuggish “strongman” in the executive office can somehow solve
all of this is also frustratingly hilarious.
But do we need the federal government to
implement this particular iteration of socioeconomic rights and economic
democracy? Maybe not. States and municipalities are great sites for public
banks, because they are where the most effective resource management decisions
can be implemented, and they are where human needs and cooperative economic
solutions are most readily apparent. Consider the damage done by irresponsible
financial marketization of city budgets, underfunding and deindustrialization
of major cities, and the gentrification
that occurs when cities begin to thrive.
Public banks can help municipalities create and
fund work-spaces for nontraditional work reflective of the new economy. They
could do so if they took their money out of Wall Street banks and created their
own North Dakota- or German-style public banks. Some communities are already
experimenting with cooperative and sustainable economies that reward, rather
than punish, residents who only want to (or can) work part time. There are
housing alternatives that would fit more small-scale and sustainable models.
The case for funding all of this rather than relying on neoliberalism’s repackaged
trickle-down economics is strong.
