Category Archive: Interviews

1. Structures of History

   March 12, 2022 5:18 am Comments Off on Structures of History

   Few scholars have had the theoretical, methodological, and empirical influence of William Sewell. His work has persistently scrutinized and challenged disciplinary barriers, placing historical and social scientific methods in dialogue and thereby illuminating their strengths and shortcomings. This effort is most pronounced in his 2005 book, Logics of History, which assembles deep and profound reflections on scholarly understandings of time, contingency, and path dependence. It’s in this text that Sewell presents his much cited conception of structure as a multiplicity of “schemas and resources” which combine and intersect in unpredictable ways, and makes the case for an “eventful” temporality which appreciates radical and sudden historical transformations.

   Sewell’s historical work has integrated this intricate theoretical framework. His first book, Work and Revolution in France: the Language of Labor from the Old Regime to 1848, traces the transformation of corporate artisan traditions through the French revolutions of 1789, 1830, and 1848. His subsequent book Structure and Mobility: The Men and Women of Marseille, 1820–1870, draws on marriage registers to paint a complex sociological portrait of Marseille throughout the nineteenth century. And his third major work, A Rhetoric of Bourgeois Revolution: The Abbé Sieyes and What Is the Third Estate? situates the influential pamphlet and the ideologies of its author within a broad economic, social, and political context.

   William Sewell is Frank P. Hixon Distinguished Service Professor Emeritus of Political Science and History at the University of Chicago. In this interview, we discuss the course of his intellectual development, the state of contemporary historical and social scientific research, and his new book, Commercial Capitalism and Civic Equality in Eighteenth-Century France.

   An interview with William Sewell

   MAYA ADERETH: Let’s begin with your academic trajectory. What have been your main theoretical influences?

   WILLIAM SEWELL: I should begin with the first influence—my father. He was a sociologist at the University of Wisconsin. He was one of those sociologists who wanted to transform the discipline into a genuine science. He used to talk to me about sociology quite a bit, especially when I was a teenager, so I actually grew up steeped in quantitative sociological thinking. I did my undergraduate work the University of Wisconsin and began as a Sociology major. But as I got some distance from my father and took some intriguing courses in history, my interests expanded beyond quantitative methods and outside of the US context. American Sociology in those days was mostly sociology of America in the present. History, and in particular the history of Europe, seemed much more interesting. Ultimately I majored in history, but preserved the sociological knowledge—theoretically in my thinking about how societies are structured, and methodologically through my background in mathematics and statistics. 

   I wanted to do a kind of social history based on sociology. But as far as I knew, nobody was teaching that in history departments. So I opted for what seemed to be the closest thing: economic history, which I pursued at Berkeley, studying with David Landis, Henry Rosovsky, and Carlo Cipolla. Of course, I had to take quite a bit of economics and some statistics, so for a historian, I had a broad and deep background in quantitative methods.

   In graduate school, I consciously pursued a form social history that was allied to economic history. While developing my dissertation project, I was particularly influenced by Charles Tilly’s The Vendée and E. P. Thompson’s The Making of the English Working Class. I was impressed with the archival depth and historical methods they both used. My dissertation was on the history of the working class in nineteenth-century Marseille, particularly around the revolution of 1848. I focused especially on the experiences of workers who had immigrated to Marseille from the surrounding countryside and small towns, something I was able to track by using demographic records. Workers who were migrants turned out to be far more likely than native born workers to be active in revolutionary activities in 1848.

   But where did my interest in revolution come from? Well, besides having great economic historians, Berkeley in the early 1960s was a very radical place. There was a kind of mini-revolution there in 1964, generally known as The Free Speech Movement, against the University’s policy of forbidding political activity on campus. The Free Speech Movement was extremely exciting—a student strike I was deeply involved in as a Teaching Assistant actually shut the university down and forced the administration to change its policy when the Faculty Senate weighed in on our side. In retrospect the Berkeley revolt seems a bit of a tempest in a tea pot, but the experience was very intense. I realized, on the basis of my own experience how one’s frame of reference could be transformed in a revolutionary situation. Things that I hadn’t thought imaginable would become possible in the space of a few intense days of struggles. It was through this movement that I recognized the volatility and unpredictability of revolutions, and the contingency of historical development that they epitomized. In one way or another, I’ve been studying revolutions ever since.

   I was hired as an instructor at the University of Chicago in 1969, when I was still doing my dissertation research in Marseille and before I had written a word of my thesis. I wrote my dissertation over a period of three years, while teaching full time. I dug into the quantitative evidence I had compiled, discovering many details about how people lived, what their social and family relationships were, and so on, but also (using arrest records) who had been active in insurrectionary activities. But during my Chicago years I also realized that quantitative history didn’t help me figure out what people were thinking or how they understood their experiences. I of course had archival and printed material that bore on details of workers’ social and political lives, but I had only limited access to how their understood their experiences and how they responded to revolutionary situations. While at Chicago, I grew interested in anthropology, which dealt with the thought-worlds and experiences of ordinary people and helped me to interpret the scraps of evidence I had. Teaching a joint course with Bernard Cohn, an Indianist who had a joint appointment in Anthropology and History, was very illuminating, as was doing joint teaching with Ronald Inden, another historian of India who was steeped in anthropological theory.

   In 1975, I got a five-year pure research appointment at the Institute of Advanced Study, in Princeton, New Jersey, where my senior colleagues were Clifford Geertz and Albert Hirschman. Those were heady years. I soon put off my big book project on the workers of nineteenth-century Marseille. (In fact, that book never got written!) During my first year at the Institute Clifford Geertz had assembled a team of anthropologists who organized a seminar on symbolic anthropology, which I attended. One thing I had noticed in my research on Marseille’s workers is that they used vocabulary redolent of the corporate system of old regime France when referring their trade union organizations, which were very active in the revolution of 1848. Anyone who worked on the nineteenth-century French working class had seen this language all over the place, but no one seemed to have tried to make sense of it. In the context of the symbolic anthropology seminar, I decided to write a paper on that subject which turned into my first book.

   The book explored the significance of the apparent anomaly that proto-socialist revolutionary workers were making their claims partly in pre-revolutionary old-regime language. I soon recognized that the solidarity understood by these early worker socialists was an extension to the entire working class of the corporate sense of solidarity to individual trades that they had inherited from the old regime. The book traced how this bit of conceptual and political magic happened, above all in the Revolutions of 1830 and 1848.

   After my time at the IAS was up, I joined the History Department at the University of Arizona. The Arizona History Department had a handful of interesting colleagues, but I quickly learned that two floors up in the same building was a really excellent Sociology department, including several younger scholars who did various forms of historical sociology. Over my five years at Arizona I found that my intellectual life moved up from the first to the third floor. So after a twenty year absence, I re-entered the intellectual world of sociology—but now historical sociology with a strong dose of social theory.

   This sociological turn was solidified in 1985, when I left Arizona for the University of Michigan where I had a joint appointment in sociology and history. There I also hooked up with anthropologists and wound up chairing an interdisciplinary outfit called the Committee for the Comparative Study of Social Transformations. It brought together historians, sociologists, political scientists, anthropologists, and eventually people from literature and philosophy departments, all of us struggling combine the linguistic turn with social science. It was a heady mix that greatly stimulated my interest in social and cultural theory.

   My final academic move was back to the University of Chicago, in 1990, where I was recruited by the Political Science Department, but with a joint appointment in History. In the department I came to think of myself as the “refugee professor.” That is, I took under my wing many students who had come to study political science because they were interested in politics, but found that they instead were supposed to do political science, which is something quite different. But as refugees from conventional political science they could legitimately work with me and get political science degrees. It was an extremely diverse group, who worked on topics ranging from European urban forms, to political cartoons in Turkey, to the politics of art in postwar Germany, to South Korean democracy movements, to concepts of development in China, to nationalist music in Norway, to name a few. They were probably the most interesting students I ever taught, and I learned an enormous amount from them.

   I can see that in some ways, my own intellectual biography mirrored the theoretical framework about eventful history that I was developing. My trajectory, from sociology, to history, to anthropology, back to sociology and eventually to political science, was shaped by a sequence of highly contingent encounters and events as I moved from one university to another. It made me a particularly interdisciplinary social scientist.

   MA: What has been your relationship to traditional historical sociology?

   WS: I’ve tended to be critical of comparative historical sociologists at the same time as I’ve been very engaged with them. My critique of historical sociology is that it often doesn’t take the history part as seriously as it should. Unfortunately, sociology is a field that’s dominated by methodology, and historical sociologists try mightily to formalize the historical, particularly through things like comparative methods or process tracing. The work and thinking that is done along those lines is of course valuable, but I think it also cuts off a sense of the radical contingency of the world, which is what drew me to the study of history in general and revolutions in particular. Of course, even in revolutions there are elements of continuity and of strategy, but people also act in ways that they never thought they would be capable of acting before. People’s very conceptions of what is possible are transformed by historical experience. Unpredictability is a key feature of social life. So while we certainly need theoretical rigor, we also need to be able to account for radical transformations. Ultimately, over-formalizing history seems to me a bit of a fool’s errand.

   My most cited article is on the theory of structure—I argued that while structures are real, they are also transformable. And they are transformable particularly because they are made by humans, both through practical activity and through reconceptualizations that such activity imposes over time. I try to be especially sensitive to the conceptual turning points that happen in social life. Life is full of events, some of which change institutions and therefore the world.

   MA: My feeling is that today there’s a tendency either to abandon all aspirations towards causal research and focus exclusively on descriptive accounts, or to focus too much on causal narratives so that questions on revolutions, historical change, and so on are not viable. Where is the right place to be in the search for causality?

   WS: I certainly think that there are very important causes working in the world. My most recent book talks about how capitalist development shaped people’s experience of the world in eighteenth-century France. From the perspective of world history, the emergence of capitalism is a hugely contingent event. But from the perspective of eighteenth-century France, capitalism was a continuing feature in the background of social life. Despite shaping many aspects of people’s lives, the effects of capitalism are not consciously conceptualized until the emergence of political economy in the eighteenth century.  Political economy, at least implicitly, breaks with the traditional framework of the nobility, fixed social hierarchy, monarchy, and so on. But throughout much of the eighteenth century, while capitalism it is actively structuring the lives of people, especially in cities, they don’t consciously conceptualize it.

   If we take something like the emergence and increasing dominance of commerce in the eighteenth century, that was a roughly steadily increasing force. It has fluctuations, but the arrow is headed upwards. And it turns out to be a very important background that makes possible the reforms of the French Revolution, many of them based on ideas in political economy. But because the advance of capitalism was a slow-moving background force, historians have tended to ignore it in thinking about the origins of the Revolution. In this case, I’m making a sociological critique of conventual history—historians do have a habit of following the surface of events. So I guess I find myself moving between the typical sociologists’ emphasis on social structures and historians’ emphasis on more self-conscious purposeful action.

   neil warner: That’s a good place to pick up on your latest book. One thing I really liked is your argument on Habermas—you argue that his idea of the public sphere has been misinterpreted in its application. Can you talk a bit about that argument?

   WS: I think it’s been especially misused by historians. They’ve taken this notion of the public sphere, and used it to look at the press, spectacular events, people’s ideas, and so on. But the early Habermas was a Marxist, and what historians don’t pick up on is his very strong sense that the very possibility of a pubic sphere is based on the early development of capitalism. So the public sphere itself—cafés, newspapers, books, theater—is structured by capitalism in a very direct way. These are all commercial developments, and the commercial aspect, Habermas argues, is crucial to the emergence and the structures of the public sphere.

   nw: Another theme I was interested in is the role of the professions in shaping the historical developments. What are your thoughts on that?

   WS: There were not many genuine professions in France in the eighteenth century—lawyers and doctors constituted about the only organized professions. However, in writing the book I became really interested in the role of the royal bureaucracy. They were something like a profession in the sense that they had some kind of high secondary education, but this occupation was open only to nobles. In particular, they were people whose families bought their way into the nobility in the seventeenth or eighteenth century. My interest was in how these bureaucrats turned to political economy as a means of overcoming the impossible situation they were in. As royal bureaucrats, they had to come up with enough money to keep the war machine going, but they couldn’t tax the nobility and were aware that further taxes on the peasantry would have counter-productive economic effects. I was surprised by the progressiveness of these royal officials in navigating this task.

   They had to find a way of providing greater income to the masses. In order to do that, they had to increase the productivity of the economy (they didn’t use the term “the economy,” they referred to it as “commerce”). They figured that by getting rid of restrictive regulations and letting commerce flourish, via manufacturing and trade, incomes would rise. And once incomes rose, they could raise taxes and keep the state afloat. This sounds very cynical: grow the economy so you can fund the military and stay in power. But I don’t actually think they had cynical motivations. They thought economic growth would both make common people more prosperous and strengthen the state. They really thought that liberalizing rules and making it easier for people to engage in trade would increase people’s wealth, happiness, and numbers.

   nw: Jumping forward a few hundred years, one thing that runs through a lot of your work is the desire to break the dichotomy between cultural and material explanations. Could you comment on that with respect to contemporary debates on, say, the rise of populism?

   WS: There’s no doubt that there’s something about the nature of the contemporary economy that has broken working class and agricultural communities. Growing up in Wisconsin, I remember driving by all of these lovely idyllic farms with their red barns back in the 1950s and 1960s. When I drive around in Wisconsin today, those same barns are falling apart. There has been a huge economic change, and many sectors which used to offer a fairly good life to people have been crushed. But this economic change is also a cultural change—small farmers in Wisconsin used to share equipment or help one another with the harvest. There was a lot of common work and exchange of that sort, and towns reflected these relationships and a sense of common purpose. When we go into many small towns today, they don’t have the small stores that facilitated social life; they are devastated. There are far fewer local level interactions; people are more likely to do their shopping at big box stores in the nearest city. This sounds like a sentimental picture of rural Wisconsin, but there was something there that is now gone. And the cultural aspect is that people are deprived of community at various levels. You can say the same thing about the former industrial towns in the Rust Belt.

   This is a very Thompsonian perspective in a way: there were real communities that have been shattered by neoliberal development. And this process has gone unrecognized by the political discourse we’ve heard from Washington DC and London. People have a sense that those in power don’t give a damn about them. We see this reflected in our cultural life—going back to Wisconsin, the University of Wisconsin had a huge agricultural school, where they taught animal husbandry, dairy science, etc. One ideological and material function of the University was to provide knowledge to farmers; there was a strong relationship between the University and the people in the countryside. Those sorts of ties are also completely gone. The big ag companies lease most of the farmland and dictate the farming methods. So there’s an overwhelming sense of abandonment and disconnect, which breeds resentment. Rural people now tend to think the University is full of stuck-up people who despise them. We can see similar things across Europe—the yellow vests in France are an expression of it, with uprisings and violence directed at sources of capital. The embrace of Trump in the US comes from a similar impulse.

   MA: If we’re to think then, of some sort of history of the present, I think these moments in the 1960s, then the 80s and 90s that you’ve spoken about are all recognizable turning points. There’s a feeling now like we’re at another turning point. What other structural features should we be paying attention to when we analyze the present moment?

   WS: One thing we should be paying far more attention to in the study of society is climate change. We’re nowhere near limiting it, let alone eliminating it, and it’s bound to have dire consequences for social life. For example, it will become increasingly difficult for people to live in warmer parts of the world: Sub-Saharan Africa, India, the Middle East, Southeast Asia, Central America, South China. There will be huge waves of migration, or attempts at migration, from the Global South, and at the moment, it’s not clear that any state is prepared to handle that. We see beginnings of this situation already with Libya and the EU. The EU is collaborating with Libyan authorities and militias to keep migrants from coming from Africa. But this is just the beginning.  And likewise, at the southern border of the United States, people are fleeing from repressive states in Honduras, El Salvador, Guatemala, but this is compounded by pressure from climate change. People can no longer live off of their farms.

   That’s not a very hopeful outlook, but on the other hand, there is a growing climate movement. And I think it’s clear that some sort of reversal or transformation of neoliberalism, and capitalism itself, is absolutely necessary. Capitalism as we know it, from the sixteenth and seventeenth century up to the present, has relied on continuous global expansion, both territorially and in terms of resources. Particularly since the early nineteenth century, it has relied on tremendous amounts of fossil fuels. This increasing commodification of the world has to be stopped in some way; it’s beyond what the Earth can stand. So it’s not just about climate, it’s also about finding dignity for ordinary people.

   We can predict climate change with a high degree of certainty, because it’s not just a matter of human institutions. There are there are physical forces involved which are inexorable. But the human side of it, that is unpredictable. And so long as it’s unpredictable, there is hope.

2. Power, States, and Wars

   March 1, 2022 7:17 pm Comments Off on Power, States, and Wars

   Over the course of several decades, sociologist Michael Mann has studied great powers and the social orders they create. Combining a theoretical and empirical focus, his work is nearly unparalleled in its ambition of scope and meticulous attention to detail. His four-volume magnum opus, Sources of Social Power, takes a sweeping look at power dynamics underpinning human societies from the Neolithic Era through the aftermath of the 2008 financial crisis. Elaborating on the work of Max Weber, Mann distinguishes power into four types—ideological, economic, military, and political (IEMP)—which interact with one another but preserve an essential autonomy and operate through different means. With the IEMP model, Mann disaggregates concepts like states, nations, and societies to understand the interlocking networks of power operating within and between them.

   Mann’s other work applies this theoretical framework to some of the most challenging features of human societies. His 2003 book, Incoherent Empire, considered the balance of resources available to the US at the turn of the century, accurately predicting many of the country’s recent international tribulations. The following year, Fascists presented a sociological analysis of fascist movements in Italy, Germany, Austria, Romania, Hungary, and Spain, explaining the ideology’s rise following the First World War. And in 2005, The Dark Side of Democracy examined the circumstances surrounding ethnic cleansing in Armenia, Nazi Germany, Cambodia, Yugoslavia, and Rwanda. His forthcoming book, On Wars, analyzes the history of wars in the Roman Republic, China, Japan, Europe, Latin America, the Middle East, and the United States.

   Michael Mann is Honorary Professor and Director of Research at the University of Cambridge and Distinguished Research Professor at the University of California, Los Angeles. We spoke with Mann in January about the study of history, the autonomy of states, and the budding reemergence of great power politics.

   An interview with Michael Mann

   MAYA ADERETH: Tell us a bit about your intellectual trajectory.

   Michael mann: I got into sociology almost by accident. I did an undergraduate degree in history at Oxford, and then trained as a social worker. That training included a course in sociology, which I fell in love with. I managed to get a PhD position at Oxford and started doing very concrete empirical research; I did my dissertation on a factory relocation from Birmingham to Banbury. After that I went to Cambridge and continued to do empirical work, I studied the experiences of a large sample of workers in the labor market of Peterborough. When I got my first teaching position at Essex University, I had to teach courses on subjects I knew nothing about, like sociological theory. I remember that in the interview they asked me if I could teach a course on the Enlightenment. I said of course, wondering vaguely what the Enlightenment was.

   This set me off on a theoretical path, even as I continued to do empirical work.  I wrote an article, which I never published, comparing Marx and Weber’s theories of social stratification. My involvement in the campaign for Nuclear Disarmament persuaded me to add a fourth form of power, military power. That’s something that remained distinctive to my model—that there are four sources of social power, not three as identified by Weber or Althusserian Marxism’s three levels of social formation.

   So I thought I would explore this idea through some empirical examples. With what little I knew about ancient societies, I wrote an article called “States Ancient and Modern,” from which my distinction between despotic and infrastructural power is probably the most cited idea of all my work. That developed into an idea for a short book examining a couple of historical case studies and comparing them to contemporary forms of social power. As I worked on the chapter centered on Rome, the project just grew and grew. The earlier case studies developed into the first volume of the Sources of Social Power, and my theory kind of evolved with the cases I confronted empirically. The other volumes followed, with only slight changes to the model, and I finished the last one in 2013.

   MA: You mentioned your political activism early on. Can you talk about the relationship between your strong normative beliefs and your commitment to empirical research?

   MM: Like everything else, I’m the product of historical processes. Growing up in Lancashire, I always had the belief that we produced goods and the South reaped the profits. You can’t escape the predispositions you have. But the best form of social science is about arguments—different perspectives confronting each other and battling it out, empirically or otherwise. Obviously, when I write a book about wars, I make it clear that I’m perfectly opposed to them, that they demonstrate the irrationality of human beings. But then emerges the question, why are we having these wars when they don’t serve the interests of regular people? In this way I think interesting empirical questions can emerge from one’s values.

   MA: Recently I think we’ve seen a shift away from historical methods in the social sciences. What can history continue to offer to socially minded disciplines?

   MM: Comparative and historical sociology has always been a minority section of the discipline, and the character of the majority has changed greatly. But sociological theory is very much tempted by abstractions. And though there haven’t been that many comparative historical sociologists, they have been very influential. When I entered the discipline, it was quite popular in elite universities in the United States—if you went to Wabash State you might not find any comparative historical sociologists, but if you were in Ivy League or UC campuses you would. In recent years, there’s been a greater interest in micro sociology. To my mind, theres too much of it.

   neil warner: What are some of the advantages and challenges of your interdisciplinary approach—standing in between history and sociology, but also in between ethnographic and quantitative methods?

   MM: In recent years, historians have become much more receptive to sociological and anthropological ideas. There’s also been a substantial increase in scale and scope; there’s a fair amount of what’s called “global history.” That’s definitely a sign of health. Political Science has gone in the other direction, towards a quantitative, rational choice framework. They have far fewer area specialists; it’s quite difficult to find a specialist who knows a lot about South Asia compared to someone who’s comfortable with abstract models. A great dataset of wars since 1816 led to a series of quantitative studies, but the dataset was skewed towards the West and the analysis didn’t extend to earlier history. So overall, there’s an argument to be made that this shift is distorting our views.

   NW: One thing that’s unique to your work is this balance between causal grand narrative and the emphasis on the fundamentally contingent and directionless nature of history. How have you positioned yourself in debates on historical understandings of time?

   MM: My view, which is only half formulated, is that there is a sort of dualism we have to be sensitive to. Dialectic, in the Marxian sense, is—in its own complex way—a bit too deterministic. My dual way of thinking about it is that the four sources of social power each has its own logic of development. There are tendencies there, but they interact with each other in contingent ways, and alternative outcomes are always possible. Of course, in the case of economic power especially, there are significant qualitative shifts. But if we look at capitalist development, there are certain logics involved, like capitalism’s creative destruction, monopolization, and so on. You can find similar tendencies with the development of particular ideologies. But the outcomes involve contingencies.

   NW: The Sources of Social Power was decades in the making—your writing of it spanned the fall of the Soviet Union and a series of financial crises. How did these world events shape your writing process, and the reception of your books over time?

   MM: I never developed a strong theory, equivalent to “capitalism will be replaced by socialism.” The work essentially presents an orienting model, so it has flexibility. My treatment of ideology was I think fairly weak at first, and it’s one that I am still developing. In volume four, I didn’t feel able to make strong predictions about what was going to happen next, and I certainly don’t think I can do so now. I find that a lot of sociological generalizations—like “globalization”—are rather one dimensional, so I’m not particularly attracted to them. I’m always willing to be surprised by the course of history. In this pandemic, for example, I’ve been surprised by the cross-national lack of faith in science. People seem to think that the experience and sentiments of those around them matter more than those of any authorities—magic is more important in our societies than we realized. I’ve been coming to that view in writing about war—that humans are erratically rational, or they’re rational within a framework which itself might not make much sense, and which is full of emotion and ideology as well as instrumental rationality.

   MA: You’ve argued that we should “do away with the concept of society,” that society should be thought of as a “patterned mess.” What does the concept of society mask? And, more generally, how do we reconcile the need to categorize in order to understand with the knowledge that all formal categories are fundamentally incomplete?

   MM: Of course, that statement was provocative. We can’t really avoid the use of the word society, or communities, or nations—it doesn’t make much of a difference. In the contemporary world, the nation state remains important, and it does have boundaries which affect us. We as citizens or residents are subject to the laws of that state. One thing that continues to be striking in terms of political power is that state elites remain pretty free to make decisions on foreign policy but not nearly so much on domestic issues. Of course, there are globalizing tendencies, but today there is far more coherence within the nation state than there has been in most historical societies, where political elites governed with little constraint from the population. In the nineteenth century, large parts of the population were unaware that they were even living in France: Eugene Weber argued that nineteenth-century frenchmen thought they were from “around here” or from “Provence” but not France. The concept of France was pretty meaningless to them.

   MA: One of the aspects that distinguishes your work is precisely your emphasis on states as autonomous agents, rather than a perhaps more widespread historical focus on classes. What do you see as the relationship between the two?

   MM: There has always in some sense been a ruling class. But with the development of states, we also have the emergence of popular classes. I’m quite Marxian in the sense that I subscribe to the view that the extraction of surplus from direct producers is the way that ruling classes can live, build cathedrals, and castles, make war, and so on. Of course, there are cases of peasant revolts led by provincial gentry who are discontented. And peasant revolts tend to have a rather erratic nature, they tend to be defeated because they have ultimate faith in the monarchy—there are some evil counsellors, but theres no questioning of the system as a whole. The emergence of the radical bourgeoisie in the early modern period, and then the emergence of the working class and organized peasantry produced substantial modification in class structures and states. Of course, they didn’t have the power to ultimately produce a new egalitarian society, though there are variations in how equal the outcomes were. But they turned out to have less power than was assumed. And now that some of the conditions which generated large factories and labor unions are declining, theres no immediate prospect for achieving that sort of egalitarian world.

   MA: Building on that, you’ve argued against viewing globalization as a single process, and you’ve also argued that it hasn’t diminished the power of states. Why have states been so resilient, and how has their function changed over time?

   MM: The resilience of states is due to a combination of factors. One of them is the human desire for order rather than disorder, that’s something that states can do, and is one of their main attractions. States can also redistribute; they provide welfare throughout the life cycle for things like public health and education. So states are not likely to wither away. Virtually all the data we have are collected on a national basis, of course the EU is a bit of an exception but it appears to be in a phase of non-development. People conceive of themselves now as having a national identity, though there are rival claims about what that identity entails.

   I think climate change has the potential to change this sort of reasoning. The only way human beings can survive is through a much greater degree of cooperation between states. But states remain the primary actor; we saw it with the pandemic, which was of course global. But the response was communicated through national interest, even when it harmed much of the world—like not supplying enough vaccines. Solving climate change would involve considerably more coordination between states. Whether they’re capable of that is unclear, but if they were to do so it would be possible to imagine a world in which the autonomy of individual states is much weaker.

   MA: Many people view the so-called neoliberal shift of the 1980s and 1990s as an example of markets dominating and in some cases superseding the state. What are your thoughts on that?

   MM: States have been the agents facilitating neoliberal economic policies, they were the ones to deregulate financial markets. So I dont think it makes sense to think of neoliberalization as purely the product of an external force; political forces in many countries decided that the way to more economic growth is through spending cuts and liberalization. Did they do it because of external global pressures? I don’t think so, I think they did it because of the perceived self interest of powerful people within each state. I have a good friend, Leslie Sklair, who argues for the existence of a global capitalist class. And there is some truth to that, when we think of things like Davos, but ultimately I think the interests remain state based.

   MA: Your 2003 book Incoherent Empire forwards an assessment of the instability of the American empire. Much has changed since then, and I think some of the contradictions you highlighted are now far more visible. Where does the American empire go from here?

   MM: America hasn’t won a war of any significance since 1945: Korea was a failure, Vietnam a failure. They could invade Panama and Grenada, yes, and they could destroy Saddam, but they couldn’t impose a client government. In that book I say that the Age of Empires is gone because you can no longer find the native clients to help you rule (or, if you do, it’s an ethnically or religiously divided society in the midst of civil war). The American Empire has not been a direct empire attempting to rule directly as the British or the French did. And obviously the US still wields a considerable amount of global power. But the it cannot stomach large numbers of Americans dead, and various forces around the world know this, and know they can outlast the US in that regard. So it’s not just that the US hasn’t won wars, but that it’s unlikely that it will be able to.

   In Ukraine, US and NATO power has been limited. What the Chinese are trying to do at the moment is recreate the boundaries of imperial China, whether it’s Tibet, Taiwan, the South China Sea, even a bit on the border with India. These are all viewed as legitimately Chinese. And the Russians want to make the same claims to rule where there are Russian speakers. This kind of impulse towards revising border is a tremendous force for creating wars historically. So the US has to accept the rising power of China even as it continues to stand for an increasingly imperfect democracy. We’re back in a way to a so-called Cold War, and again with nuclear weapons.

   MA: Can you tell us about your new book?

   MM: It’s called On Wars, which is a conscious adaptation of Clausewitz’s On War. Where he looked at one particular period of war in Europe, I’m looking at wars throughout human history. There is no known population of wars, because of the volume of unknown ones. But I go from anthropological and archeological findings to the Roman Republic, to Ancient China, the Chinese Empire, Japan, Europe, the US, and colonial wars. These are not individual conflicts, but sequences of wars. I’ve compiled what data I can from the sources, which become quantitative in the modern period.

   In the book I try to understand the causes of wars, and how rational they are according to particular ends. In part, the book serves as a critique of theories rooted in notions of rationality. I believe I show that the vast majority of wars are not rational in either means or ends: calculations of the costs or benefits of wars are rarely made, and when they are, it’s within the context of historical constraints. As for ends, states are often destroyed by war. What we have are the records of a few survivors who portray war as glorious. But if you consider that Europe had about 500 political entities, and Japan had more than seventy states, and the same is true of China and the Mediterranean, then at least half of realism, defensive realism, has very little validity. The vast majority of states that have existed have disappeared, largely due to war. There is no genetic programming that leads humans to make war, but a human nature which entwines reason, emotion, and ideology is likely to make war.

3. Rekindling Labor?

   December 23, 2021 7:42 pm Comments Off on Rekindling Labor?

   The uptick in organized and unorganized labor militancy registered throughout the pandemic, and in particular in strike and unionization campaigns in recent months, comes at a relative nadir for the US labor movement. The work of Kim Voss, Professor of Sociology at UC Berkeley, brings the current moment into sharper focus against the longer and particular histories of worker organization in the United States—from nineteenth century workers’ organizations to more recent alliances between unions and social movements. 

   Voss’s 1993 book, The Making of American Exceptionalism, argues against theories which attribute the labor movement’s weak and conservative character to factors like the individualist nature of American culture or the structure of the American economy. In doing so, she follows in the tradition of scholars like Werner Sombart, who emphasize the historical contingency of capitalist development. Voss traces the divergence between the American labor movement and its European counterparts to 1886, when powerful employers coordinated with the state to crush the progressive Knights of Labor.

   Her later work focuses primarily on strategies for union revitalization; the 2004 book Rebuilding Labor, co-edited with Ruth Milkman, considers the state of union democracy, conditions of membership recruitment, effectiveness of union leadership, and degree of anti-union sentiment among contemporary workers. Hard Work, published the same year and co-authored with Rick Fantasia, focuses on the emergence of “social movement unionism” in cities like Los Angeles and Las Vegas, arguing that even in a hostile terrain, trade unions which form strong community ties and are able to integrate labor demands with broader social aims may have a hopeful path forward.

   We spoke in November about turning points in the history of the American labor movement and the recent events of “Striketober.”

   An interview with Kim Voss

   Maya adereth: The notion of American Exceptionalism—the idea that US economic and political systems are unique from those of other rich democracies—frames your work on the Knights of Labor. Did this idea ever have resonance, and if so, does it still have any today?

   KIM VOSS: American Exceptionalism has always been a fraught term used in many different ways—politicians and pundits tend to use it to exalt the US political system, while scholars often point out that it’s not altogether that special, and others sometimes use the term to highlight the failings of American democracy. My entry into the debate was specifying which type of exceptionalism we’re talking about. With respect to labor, it’s accurate to say that the American labor movement has been broadly less progressive than comparable movements. Episodically, there have been higher levels of militancy, but this didn’t result in a politically strong and inclusive labor movement. In my book, The Making of American Exceptionalism, I argue that it didn’t have to be this way. Especially if we go back to the last three decades of the nineteenth century, we can see that there were other possibilities for development, and periods in which the American labor movement advanced in an inclusive and progressive direction.

   MA: You demonstrate a similar resistance to stagnant categories in thinking about the labor movement. Eric Hobsbawm famously developed the idea of the labor aristocracy; a layer of organized craft workers who organize along sectional lines. You take a far more flexible view, arguing that local conditions may lead craft workers to take more inclusive or exclusive strategies in different moments. What are the different strategies available to unions, and what might lead them to adopt one over another?

   KV: My instinct of course is to immediately historicize the question. If we look at how social movements, and especially labor movements, mobilized in the late nineteenth century, craft workers (the so-called labor aristocracy) were more able to advance their program simply because they had more resources to build on. But there were crucial moments in which they made common cause with less privileged workers, such as when the Knights of Labor used the language of egalitarian democracy to fight for labor rights and when they mobilized community ties to build solidarity across skill level, nationality, and gender. Part of the reason why this didn’t occur more frequently is because of the organization of powerful employers and the way in which the government responded to moments of labor militancy—the state only intervened episodically in labor struggles, but when it did it was always against broad-based mobilization. So, when the Knights of Labor did successfully organize skilled and less-skilled workers together in strikes against concentrated corporate power, the state either did nothing to constrain employers’ actions or it brutally repressed workers. 

   The lesson that labor leaders and activists draw from this was that it would be impossible to win by organizing a mass movement. This lesson structured the orientation of the majority of labor leaders in the American labor movement for generations; there wasn’t a big upsurge of mobilization for progressive change again until the 1930s. And even after the creation of industrial unions, when the labor movement campaigned for broad universal demands like healthcare and pensions in the 1940s, it was pushed back. The result was the construction of what I and others have called a private welfare state. By using collective bargaining to gain things like medical benefits, employment security, and pensions, trade unions were able for a while to offer members a private alternative to the public system of social provision. But in the long run, this proved to be a losing strategy, because it divided organized from unorganized and privileged from unprivileged workers.

   MA: There are a number of factors which come up frequently in explaining this push back, two of which you have written about extensively. The first is immigration, and in particular the widespread hostility towards immigrants from China, Japan, and Korea, that’s pervasive in the AFL literature. The language they used is familiar to a contemporary ear: immigrants flooding the market with cheap labor and undermining the bargaining power of organized workers. What sort of relationship has the American labor movement historically had to immigration, and when have these sorts of cleavages been overcome?

   KV: My current work, which I’m doing with Irene Bloemraad, is a theoretically informed, comparative examination of immigrants and social movements, although not just from a labor perspective. The key contradiction informing this work is between the deep and persistent hostility towards immigration that we see across American working class organizations, and the narrative of the “nation of immigrants” which is periodically conjured by government representatives. In the early AFL documents that you allude to, anti-immigrant sentiments go hand in hand with the organization’s craft orientation: the same reasoning which drives leaders like Samuel Gompers to advance sectional interests of skilled workers paints low-wage, nonunionized immigrant workers as a threat to tight labor markets. An interesting detail in the work of the historian Donna Gabaccia is that the term, “nation of immigrants,” was first used in the Civil War decades to justify the exclusion of immigrants, typically referring to “undesirable” workers from China and southern Europe and often using the term in a nativist context; it was only used as a phrase to celebrate inclusiveness much later, during the reform years of the late 1960s. Though Americans have been conceptualizing themselves as a nation of immigrants for centuries, this concept has been politicized in different ways at different moments.

   Though the American labor movement was overwhelmingly anti-immigrant, there were notable moments of inclusiveness on the part of unions. The Knights, of course, had their own opposition to Chinese migrant labor, but still organized immigrant workers. And AFL affiliates like the International Ladies’ Garment Workers Union were at the forefront of organizing low-wage immigrant workers in the early twentieth century and innovating strategies to resist deportation in the 1970s. It’s useful to remember that the AFL-CIO has always had little control over its national unions, and the national unions bear little direct influence on the locals, so we do have all of these internal struggles. Why were the Garment Workers so far to the left on deportations and other issues in the 1970s? Part of it is that their leadership had a commitment to labor solidarity, but the other part was that so long as the government was conducting raids on the garment industry, they couldn’t organize without defending the rights of undocumented immigrant workers. In the early twentieth century, leaders of ILGWU faced resistance from the immigrant, low-wage, and largely female rank-and-file textile workers, and the union had to adapt to an industrial strategy. 

   MA: The other element is the immense power of US employers. Historically, American employers have not only been well organized, but have had direct influence on the interventions of the state. Can you talk about the role of employers in shaping the organizational strategies available to workers?

   KV: American employers have always been better resourced than employers in many other rich democracies, and they have also usually been able to count on the state as a partner. If we compare the American labor movement to the French or British one in the last decades of the nineteenth century, we see that in France and Britain, the state did occasionally intervene directly or behind the scenes to demand employer concessions; when the American state did intermittently intervene, it was unfailingly on the side of employers until the New Deal era. 

   It’s important to remember that the US state in the nineteenth century was a very different kind of state. Stephen Skowronek characterizes it as a system of “courts and parties,” meaning that it didn’t have many of the bureaucratic and infrastructural features of many European governments. Nevertheless, when it sent the military to attack strikers, as it did in 1886, it played a decisive role in shaping moments of upsurge. 

   In the twentieth century, after the organization of the CIO and the establishment of the legal right to form a union, employers’ strategies shifted. They first acquiesced to a new institutionalized process for recognizing unions—and then learned to use those rules to their advantage. Today, the union certification process for private sector firms in the US is an adversarial process of majority recognition; the only way workers can join a union is if they can convince a majority of their coworkers to vote for a union, usually in an election overseen by the government. 

   Employers have a say in who is and is not eligible to vote, and they are legally allowed to mount fierce anti-union campaigns in which they threaten and intimidate workers, both collectively and in required one-on-one meetings. For these campaigns, employers can—and often do—turn to a sophisticated industry worth hundreds of millions of dollars per year devoted to helping employers resist organizing drives. If even all these employer advantages are not enough to prevent union recognition, bosses have formal procedures for deunionization at their disposal, procedures unheard of in other rich democracies. Should workers persist in the face of these many obstacles, employers have the legal power to permanently replace them if they go on strike. These advantages most definitely shape the organizational strategies available to workers, requiring unions to design comprehensive and innovative campaigns, even as they grapple with the kind of structural changes in the economy that are destabilizing labor movements across the globe.

   MA: I wanted to ask about innovation in labor strategy, and how organizing tactics reflect broader relationships between workers and employers. The Services Employees International Union (SEIU), which took off in the 1990s, for example, has often been criticized for relying on public relations and top-down negotiating strategies. What does the SEIU tell us about recent American labor history?

   KV: There are a lot of critiques about SEIU out there, in part because it’s one of the few U.S. unions in recent years that has been aggressively trying new ways to build the labor movement.  Its rise comes down to a couple of different factors: one is that it recruited activists from other movements, such as the Civil Rights and the women’s movements in the 1970s, and campus activism and identity movements in the 1980s and 1990s. These activists, along with others in the union, interpreted labor’s crisis as a mandate to transform union goals and tactics. Another factor is that SEIU spanned the public and private sectors, so they could leverage resources from one to strengthen organizing in the other. SEIU used its resources to launch audacious and innovative campaigns, like the Justice for Janitors campaigns. The janitorial industry had once been heavily organized  but by the 1980s, unionization had been completely decimated by subcontracting. At a time when other unions had given up trying to organize such industries, SEIU figured out a way by designing a corporate campaign and mobilizing a largely immigrant workforce. Because immigrant workers played a big role in the successful Justice for Janitors campaigns, other unions changed the way they related to immigrant workers—there was even a period when unions across the AFL-CIO concluded that immigrant workers were the key to successful organizing. 

   Another SEIU campaign that yielded significant success is the Fight for $15 movement, an ongoing effort that has led to a higher minimum wage in many US communities and states and an effort that continues to spark activism in many low-wage workplaces.

   Does SEIU always get it right? No. Some critiques that it has relied too heavily on top-down negotiating strategies in some of its campaigns are justified. Has SEIU sometimes neglected bottom-up strategies, even turning against the rank and file? Yes. However, we have to understand SEIU’s inadequacies not simply by turning to the usual suspects, such as flawed leaders or deficient politics, but instead we must consider the ways that capitalism itself has changed. With financialization of the economy and atomization of workplaces, it has become increasingly difficult to generate the kind of employer response to workplace actions that was key in the 1930s. As Pablo Gaston and I have argued, financialization and other economic trends have undermined the leverage that workplace actions alone can provide. As a result, organizing campaigns can succeed only when they synthesize and combine top-down and bottom-up approaches, and sometimes not even then.

   MA: How have the transition to service sector work, automation of job oversight, and financialization changed the strategies labor unions should pursue? Amazon is on everyone’s minds, and previously it was Walmart.

   KV: The labor movement hasn’t come up with a strategy for organizing Walmart, and the best analysis I’ve seen is in the book Working for Respect by Adam Reich and Peter Bearman.  They point to the challenges presented by Walmart’s huge scale, as well as to what they dub, “walmartism,” a managerial strategy of control that results in an autocratic workplace where it is very difficult to build and sustain relationships among coworkers.  

   How do social movements come up with new strategies for social change? One thing I’m sure about is that you can’t organize Walmart or Amazon one store or warehouse at a time. The lesson I draw from the scholarship on labor movement revitalization is that it will take a comprehensive strategy, one that combines an analysis of Walmart’s and Amazon’s corporate vulnerabilities with an on-the-ground strategy of small successes to show workers that it’s worth risking their livelihood for a union. Currently, with respect to Walmart and Amazon, we are where the activists that innovated the Justice for Janitors campaign were in the late 1980s. No union or activist that I know of has yet put together the bottom-up and top-down pieces, but I have to believe it’s possible.

   MA: We’ve just seen this uptick in worker militancy and strike action in John Deere, Kellogg, Kaiser Permanente, and other workplaces across the country. How can we understand this moment, and what does it indicate for US labor movements in the coming years?

   KV: Clearly one of the things that is playing out here is the pandemic, and the rhetoric about essential workers and their sacrifices. Once employers saw improvements in their economic situations, these sacrifices on the part of workers were neither acknowledged nor compensated. Workers understandably feel betrayed and angry, which are key factors driving the strikes. In addition, workers sense that they are in a stronger strategic position now, and thus, many believe that strikes are winnable. 

   Where do we go from here? How much can we expect to see a larger wave? The more these actions succeed, the more of them we’re going to see. While the numbers we’re seeing now are impressive, they don’t come anywhere near earlier strike waves.  Nor have they resulted in new unions or growth in existing unions, as the strike waves of the 1930s did. Of course, we have to celebrate successes. But it will take a heck of a lot more success—and organizing—to build a movement. 

4. Long Crises

   July 12, 2021 12:00 am Comments Off on Long Crises

   With the victory of Eric Adams in the Democratic mayoral primary, New York City stands at a crossroads. How will the city negotiate the changes brought about by Covid-19? What will be the lasting legacy of Black Lives Matter? How will the metropolis—and other American cities—evolve in the years to come?

   As New Yorkers grapple with an uncertain future, the fiscal crisis of the 1970s and its aftermath are often invoked by the press and politicians. Today, “New York in the 1970s” is shorthand for a city facing poverty and crime, running out of money, and suddenly confronting the end of one social order and the rocky emergence of another.

   Given these dynamics at play, the publication of Benjamin Holtzman’s The Long Crisis: New York City and the Path to Neoliberalism could not have come at a more opportune time. The book tells the story of New York City in the years that preceded and then followed the fiscal crisis and near-bankruptcy of the city in the 1970s. Holtzman reveals how—with the absence of effective government responses—ordinary political wisdom changed to favor private, market-based solutions, whereas earlier generations might have looked to the city government or collective institutions such as unions. He shows that New York City’s history during this time went beyond austerity, constituting a whole new approach to government. This shift to the right was not just a matter of ideology, nor was it driven entirely by elite actors. Rather, it was built by many different political participants and communities on the ground, ranging from park volunteers, to business groups, to neighborhood patrols and beyond. Raising key questions about the city’s history, The Long Crisis is a critical work for understanding the origins of contemporary New York City—and thinking about where we go from here.

   —Kim Phillips-Fein

   An interview with Benjamin Holtzman

   Kim Phillips-Fein: This is a book about New York City in the late 1970s, 80s, and 90s. Why did you want to write about New York City in this era?

   Benjamin Holtzman: The project came out of my dissertation. When I initially got to graduate school, I was pretty sure that I didn’t want to write about a crowded field like New York City, and I was also pretty sure that I didn’t want to write about a period I had been alive during, which meant not writing about the 1980s. But when it came time to really get into the details of a dissertation project, I found myself returning on a personal level to the transformation of New York City that I’d seen when I was young. I kind of remember the city of the 1980s, the transformations that really became much more visible over the 1990s, and I found myself thinking through how those changes came to be. From an intellectual standpoint, many of the books written about New York City during this particular period were by Marxist geographers, David Harvey most prominent among them. I admire and have gained a lot from that work, but something in those stories—which tell a much more structural history of the period—made me curious about the reactions of people on the ground.

   Many of the works that influenced me also explored the idea of the urban crisis. But there were fewer historians writing about the aftermath, which for a lot of cities was a period of economic “rejuvenation” in the late-twentieth century. So I landed at this project thinking about the political aspects of this transformation.

   KPF: Very frequently, if you talk to people about New York City in the late-twentieth century, there is a notion that the city is so much better off now than it was then. Certainly you see this in the recent mayoral race—nobody wants to go back to the bad old days. But your book is called The Long Crisis. How do you contend with the success narrative that’s been written of the late-twentieth century in New York City?

   BH: I’m trying to do two things with the title. One is drawing attention to the period of great economic trouble in New York City’s history—the transformative events of the fiscal crisis in 1975. But also I want us to think of the crisis as something that started years earlier, with ramifications that continue long afterwards.

   The starting point for the book is really in the late 1960s, when New York City was facing various sorts of economic troubles. This came to a head when the effects of urbanization, capital flight, federal disinvestment from urban areas, and a national recession constrained municipal resources in New York City. How did people respond to those dynamics in the years prior to the fiscal crisis? The consequences of these changes linger past the 1970s. Even within this latter period of economic “rejuvenation” after the 1975 crisis, many issues remain.

   KPF: Your book has a broader view that actually captures both ends of the crisis point of the mid-1970s, showing the deep roots of the fiscal crisis in things that were happening well before, and then also showing the dynamics that it helps to galvanize long afterward. You argue that while the power and resources of local government remained enormous in the early 2000s, they were increasingly deployed to facilitate the role of the private sector and the market in urban life. I want to read one of my favorite passages from the introduction.

   Unlike decades before, a New Yorker on a Sunday stroll at the turn of the century may very well have found herself walking out of a condominium that was formerly a rent-regulated apartment, accessing the subway through a privately-owned “public” atrium, walking down a street policed by private security guards and managed by local businesses, and playing basketball in a privately-run “public” park.

   The passage illustrates the theme of private sector-driven solutions to what we might normally think of as being in the realm of the state or public resources. You use the term “popular marketization” to describe the late-twentieth century rather than more familiar terms such as neoliberalism or austerity. Can you describe what you mean by “popular marketization”?

   BH: Marketization is a term I use to simplify the multiple processes that reflect the growth of the private sector and the market in city life during this period. It’s not just something like privatization—the move from a state-controlled system to one controlled by the private sector. There are certainly lots of examples of privatization in the book. There are also examples of deregulation and the growth of market-based systems. But I was trying to uncover a broader range of processes by using a term like “marketization.”

   The “popular” part is meant to refer to the ways that, in the face of constrained municipal resources and services, people throughout the city looked to different kinds of solutions to retain cherished aspects of city life. This could be about their local neighborhood park or a concern about the growth of crime. Some of these were experiments—like launching a community volunteer project to improve a local park. But they weren’t condemning the government or adopting an ideological orientation that favored market solutions—they were just looking for ways to solve problems in their neighborhoods in a situation of constrained municipal resources. And these alternative solutions expanded over time in ways that ultimately transformed the city by increasing the role of the private sector and the market across city life.

   KPF: What are some examples of how people sought to respond? In a way, you show that people continue to believe in and expect that the city should provide parks, libraries, and safe and reasonably clean streets. It was almost like holding onto the hope of a certain kind of common civic life, but meeting increasing frustration about the ability of the government to deliver that.

   BH: Parks are certainly an example. At the municipal government level, there’s a decline in the conditions of parks not only in lower-income neighborhoods, but throughout the city. What I found was that across the city, people started to come together to launch neighborhood fundraising initiatives to pay for improvements, seedings, and cleanups, along with volunteering in their local park.

   They begin over time to receive support for these efforts from park advocates, and to some extent, from the city. And again, they’re not undertaking these efforts because they really believe that the city shouldn’t be responsible for parks. They’re trying to respond to a problem.

   I also look at the example of homesteading. There’s an extraordinary problem of building abandonment in the city during this period: thousands of units that landlords essentially walk away from. In response, lower-income and especially Latinx and African American residents in the areas where abandonment is at its worst—the South Bronx, Harlem, Central Brooklyn, and the Lower East Side—begin to reclaim these buildings. The people involved in these reclamations never denounce government support per se, but they do frame their responses as being led from outside of government.

   The residents are the ones serving their neighborhoods. But I also chart how, over time, the reclamations and homesteading opened these communities to political officials being able to restrict government resources, and simultaneously orient this stock of abandoned buildings towards the private market. These solutions by city officials looked quite different than what the homesteaders wanted.

   KPF: One thing that’s really remarkable about the book is the range of different actors and characters. There are the Renegades: the homesteading group, a group of low-income people of color who are reclaiming buildings in their own neighborhoods. And then there are park volunteers and the friends of the parks groups. But on the other hand, you write about Madison Square Park business owners who get together in a very self-conscious way to reclaim that park. The processes they are engaged in are similar, but they’re not in dialogue with these other groups. They’re not just concerned about making the park a more livable space, but the impact of the park on their businesses and the value of their properties. A similar dynamic occurs in the chapter on private policing and private guards: on the one hand, neighborhood and local patrols, on the other, the corporate security dimension.

   BH: I think that it’s a really important clarification. The point of the book is not to argue that neoliberalism and marketization are simply grassroots processes, but it’s rather to shine a light on the important role that people on the ground in their communities had as part of these processes. Powerful interests and officials are of course crucial as well, and I spend a lot of the book focusing on them. I’m trying to show how these different—and in some cases opposing—interests and groups of people come together in ways that facilitate this transition towards relying more on private citizens, the private sector, and the market.

   In the case of the parks, community-led volunteer responses promote the idea that the city can no longer maintain these spaces. That helps open the door for more powerful actors.

   What follows is the strange coming together of Richard Gilder, a prominent conservative philanthropist, and George Soros, who create private elite donor support around improving conditions in Central Park. Grassroots efforts meet elite-led efforts that proliferate a different kind of image for how parks are going to be saved. They turn to private associations that tend to be overwhelmingly influenced by residents and businesses, not just to play a role in improving these parks, but to actually manage them. The result is that even though the city has a role, private organizations are taking the lead.

   KPF: The founder of the Guardian Angels, Curtis Sliwa, is back in the news in New York City as a candidate in the Republican primary for mayor. The Guardian Angels is one of the most high profile forms of citizen patrol, which comes from this sense that, well, the cops aren’t doing it anymore, and we have to keep ourselves safe, so we’re going to the subways on our own. Some people think of the Guardian Angels as the sole instance of this phenomenon, but you show a different story.

   BH: The Guardian Angels came onto the scene in the 1980s and were late to the game. The growth of private security that I look at in the book begins with greater concerns about crime in the 1960s. It was similar to volunteer initiatives around parks. People spanning various neighborhoods and boroughs gathered to form resident crime patrols in areas throughout the city. Alongside this turn to privatized policing, we begin to see more middle- and upper-income neighborhoods turn to private guards as well. There was an explosive growth of private security in the 1960s and 1970s. Before that point, private security had been limited to private land, patrolling businesses, the grounds of the factory, and so on. It was far less common to see private security in public spaces. That transformation takes place in the 1970s, when elite business initiatives began to come together to create private solutions for crime in public spaces.

   For example, the Morningside Area Alliance in Morningside Heights brought together private security forces that were operating on campuses and in hospitals onto public streets. A similar kind of initiative took place among real estate owners in Midtown during this period. All these efforts were supported by an understanding that crime is not something that the city alone can address. Today, we’re constantly surrounded by private security in public spaces. That was not true before the 1980s.

   KPF: Much of the story you tell is focused on either grassroots neighborhood actors or local business actors. But you also have a chapter on tax incentives which, by contrast, focuses much more on City Hall and how public officials, including Ed Koch and Abraham Beame, changed the role of business in the city. These dynamics got a great deal of attention in New York a couple of years ago in the debate about bringing Amazon to Queens, and there was widespread public dissatisfaction with the subsidy package that Amazon was receiving. This in turn resulted in Amazon saying, “We don’t want to be in a place that doesn’t want us.” Your chapter shows a much deeper history about the turn towards tax incentives as a question of public policy in the late 1960s and early 1970s.

   Why would a city that was coming under increased fiscal pressure, or running out of the money that it needed to fund services, turn towards these types of incentive programs? How do they change over the time period? I’m thinking especially of 421A and J51.1421A is a tax abatement that reduces property taxes owed due to renovations on multi-unit residential buildings. Similarly, J51 is a property tax exemption and abatement for renovations and improvements on residential apartment buildings.

   BH: I look at a couple of these tax exemptions, abatement programs, and tax incentive programs, which really proliferate during this period. Although the ones that I look at are oriented more around housing, they are part of an economic development strategy. The impetus for creating new solutions is, of course, coming out of the economic crisis. Officials feel that they don’t have the resources to spend city money to spur economic development, so the only thing that they have to offer is giving up the revenue associated with taxes, at least in the short term. 421A changes over time, but in short, it provides an enormous benefit for developing housing for middle- and especially upper-income residents.

   J51, which was more about converting existing buildings into middle- and upper-income housing, fueled much of the conversion of single-room occupancy hotels, which housed a lot of the city’s houseless and poor populations in the Upper West Side and Brooklyn Heights. These incentives began to be used in all sorts of other ways during this period, playing a role in the conversion of SoHo lofts and in some cases turning office buildings into middle- and upper-income housing. This moment is really when the city embraces the use of these kinds of tax incentives, which have now become widespread. They have also proliferated various other tax incentive strategies to promote housing and business—these tax giveaways at the city level are a principal urban development strategy today.

   The original aim of a 421A was to create moderate-income housing, but as soon as it was implemented and put to widespread use under John Lindsay, it created affluent housing. City officials were quick to say, “Oh, well, that’s good too, just forget about the more moderate-income aims.” J51 aimed to make improvements on less expensive forms of housing to make them more livable for the moderate-income population. Before, the city had tax abatement programs around urban renewal programs, like the Mitchell-Lama housing program, which were much more oriented towards low, moderate, and middle-income populations. We see this complete change to tax incentives being used to subsidize upper-income housing. Incentives for luxury housing are used to attract people from outside the city, instead of supporting those who are in desperate need of housing within the city.

   KPF: Your book joins a growing literature on liberalism in the twentieth century—I’m thinking of Amy Offner’s Sorting Out the Mixed Economy, Lily Geismer’s Don’t Blame Us, and Paul Sabin’s Public Citizens, all of which document how liberalism changed during this time. Do you see your book as being more in dialogue with that literature, or with books on other cities undergoing a kind of post-industrial shift, like Gabe Winant’s recent work on Pittsburgh?

   BH: I definitely see the book as building on the work you suggested. I was thinking about a transformation that we see in the Democratic Party and liberalism in terms of aggressively seeking out policy solutions that engage the private sector or market. During this era, the liberalism that included bigger government solutions, if not quite over, was at least severely battered in many ways.

   You can see this process take place over the period of three mayoral administrations. John Lindsay who became mayor in 1966 was a Republican, but very much a liberal. By his second term, he certainly hadn’t lost his faith in government solutions. But as the city faced greater economic turmoil in the late 1960s and early 1970s, he became far more open and actually reversed course on a number of issues. By the late 1960s, he became much more receptive to things like citizen involvement in parks and volunteerism, taking on rent controls and rent regulations—things that reduced the “burden” on city government. He became much more willing to encourage private sector and market-based solutions to address New York’s problems.

   This trend really grew under Abraham Beame and was embraced by Ed Koch in the late 1970s and 1980s. Koch believed the city needed to turn towards the private sector and market in order to function at all, and he denounced the role of government and a generous welfare state. He ushered in greater municipal support for a variety of initiatives that looked to private sources. But he was only able to do that because these initiatives had been in the works for over a decade.

   KPF: We’re obviously at the end of a particular moment of crisis, coinciding with the mayoral election in New York City. Where do you see the vision that you chart in this book today? Do you think it is possible to recreate a vision of the city that is less dependent on private actors, more encompassing of both city government and other kinds of collective institutions, and less easily turned towards the interests of people who have more private resources to devote?

   BH: We’re still very much in this moment. Business improvement districts, park conservancies, private security—all of these things have proliferated and remain a fundamental part of city life. The rise of charter schools and the undue influence of the PTA on public schools remain powerful examples.

   However, I think even those who are suspicious of the trajectory of the Democratic Party have been surprised by what we’ve seen at the federal level under the Biden administration. In terms of reviving state solutions, orienting around social welfare, and using the state to alleviate rather than exacerbate inequities—these efforts, however limited, have been notable. It’s hard to say where we’re headed in New York City, particularly in this mayoral election where Eric Adams, the leading candidate, is not progressive.

   It is interesting to see that in the midst of what remains a strong, vibrant, progressive sentiment within the city, we have a very moderate candidate leading the pack. I think this speaks to how in periods of crisis, people often look for security, and that has benefited the moderate candidates in this campaign. This is an important lesson of the book. We need to look at how people are responding on the ground—I really believe people are smart and making rational decisions, and we need to understand what they turn to when they’re not presented with what they see as viable alternatives. Those less compelled by a vision of city life that enhances the power of the private sector and market need to work alongside people, showing that there are different solutions out there. That work is certainly being done, especially at the grassroots level across the city, and we would do well to support it.

5. Investment and Decarbonization

   June 18, 2021 12:10 pm Comments Off on Investment and Decarbonization

   In late March, the Biden administration announced the $2 trillion American Jobs Plan, with approximately half of the sum dedicated to fighting the climate crisis. While the legislation would mark a sea change in federal action to avert climate catastrophe, many have argued that it falls dramatically short of the amount required to usher in a green transformation of our infrastructure and energy systems.

   Responding to this large investment gap, a recent Phenomenal World essay by Anusar Farooqui and Tim Sahay proposes a plan for a public ratings agency for green finance, which would “be mandated to assess the economic viability and contribution towards decarbonization of project proposals” and “serve as a public signal for the state, investors, cities, and firms to back, fund, and undertake projects that are both viable and contribute significantly to decarbonization and resilience against climate change.” Their essay is in conversation with proposals by Saule Omarova and Robert Hockett for a National Investment Authority, which would function as a standalone federal institution to direct capital funding into green infrastructure projects, among other capital-intensive initiatives to serve the public.

   In May, a Phenomenal World panel discussed these various proposals for addressing the large-scale investment necessary for the low carbon transition. The conversation featured Farooqui, Sahay, Omarova, and Hockett, along with Yakov Feygin, Daniela Gabor, and JW Mason, and was moderated by Adam Tooze. A recording of the event can be watched here. The transcript was edited for length and clarity.

   A conversation on investment and decarbonization

   Adam Tooze: Faced with the global problems of the climate crisis and sustainable development, it is clear that what is urgently needed is long-term, large-scale investment. But how can one mobilize funding for those projects? Two basic poles have emerged on this question. One is to do it by way of the public budget and taxes, which is the current choice of the Biden administration. This has progressive appeal: why not enhance our state capacity and do so while redistributing resources? The obvious and immediate problem is the political constraints on raising taxes on corporations and the rich. The alternative, then, is some form of development finance—blended finance, public-private partnerships, public backstopping, derisking of private financial activity, as we’re familiar with from the federal underpinning of the mortgage market—to enable the mobilization of trillions of dollars in green investment over the next decade, which is what is necessary in this situation.

   I want to start today’s discussion with the United States. We’ve confronted the sobering realization that a Democratic administration is not a silver bullet, and is in fact even less promising than it appeared in the first round of Biden stimulus—the investment programs on the table are, bluntly speaking, inadequate to the task at hand. The question is how we can go bigger, how we can go bigger urgently, and how this can be done practically. There is a legacy of talking about this, which starts of course with the Green New Deal (GND), but there are a variety of other proposals on the table represented here: the National Investment Authority (NIA), InvestAmerica, and the most recent proposal from Anusar and Tim for a public ratings agency. I’d like to start by asking Saule to outline the logic of the NIA, originally developed in conjunction with Robert and others.

   Saule Omarova: The idea originally came when Robert and I were working some years ago on a series of articles about how to bring public control over the financial system and the flow of capital, not into speculative investments, like it does now, but into the building of infrastructure. Of course, all the infrastructure that we build now should be clean and green infrastructure. The idea of the NIA predates the flourishing of the GND movement but it is absolutely critically aligned with that movement. The way I see it is to make the NIA the dedicated institutional platform at the federal level for being the fighting muscle of the GND: pursuing environmental and socioeconomic justice in a very practical sense.1(<)meta charset='utf-8'(>)For more on the NIA, see a 2018 (<)a href='https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3125533'(>)white paper(<)/a(>) by Hockett and Omarova proposing a National Investment Authority, and an August 2020 paper by Omarova, “(<)a href='https://www.filesforprogress.org/memos/white-paper-nia.pdf'(>)The Climate Case for a National Investment Authority.(<)/a(>)”

   The key is that the NIA, as a standalone institution, cannot be situated inside the Treasury or the Fed. Its job has to be to get inside the financial markets and effectively outcompete Wall Street banks and asset managers that currently play an incredibly important role in managing and controlling the flow of capital. When I look today at the conversation around Biden’s plan, I am all for all the great ideas, and I am also in full agreement with the critics who say that is basically not enough money. But the question is bigger than that. The challenge that we have ahead of us is a rolling challenge for the next thirty, fifty years, at least. We cannot possibly predict how much money we will need at one point to fight climate change and inequality and all these issues. What does that mean?

   We need to approach the problem from the institutional side. We need flexibility to create as much capital funding as possible and as needed at any point, but also to direct it in the right way. This is what the NIA is supposed to do. The NIA is not supposed to replace fiscal policy and direct spending at the Department of Energy, Department of Treasury, and so on. Instead, the NIA is supposed to fill a gap and introduce three things that are currently difficult to achieve. The first is the task of coordination. One of the big problems why we in the US have not been able to solve even the most basic infrastructure and maintenance issues, let alone rebuild the entire economy on clean energy, is because these loans and grant programs are administered by individual agencies with specific mandates. And it’s not even about the cost of funding; the main issue is spending authority. Federal agencies are limited up front with respect to how they can invest, what they can fund, and under what conditions. A lot of the projects we need to fund, especially in terms of the GND, are by definition cross-cutting in terms of those jurisdictional lines. The transformation we are after is geographically much broader, sectorally much broader—it’s much broader even and especially in terms of policy goals than what is typically on the table. And those policy goals are in some cases not even assigned to any particular agency. For example, racial equality. What federal agency is tasked with that goal, which also has loans for infrastructure? The task of coordination, of managing that transformational shift on a nationwide scale, needs to be housed in a very strong, democratically accountable, yet flexibly-financed institution. That’s the idea of the NIA.

   The second thing is flexible financing. Financing for federal agencies through fiscal spending is politically controlled, that’s the point of the whole process. That’s fine when we have strong consensus on spending needs, but we can never be sure of that. To supplement that fiscally and politically constrained type of spending, we need a strong public institution that can harness the existing abundant private capital, and pull it in the right direction. Now, when I say that, people start thinking about the traditional public-private partnership (PPP) model, in which public money was effectively given over to banks and asset managers. The NIA is precisely meant to replace that model. In the United States, we do not have a social security system that guarantees dignified retirement. We are captive investors in private capital markets right now, and all that money is managed by private managers and goes into private equity funds which then basically decimate our own economy. That’s the money that’s sitting there and being used against the public interest, and we would like to have an asset manager that is publicly-owned, publicly-controlled, democratically-controlled, although not in the same way as the actual federal agencies. It can provide another channel for productive investments for that kind of money. That kind of flexibility is extremely important to add to the direct fiscal spending—especially with respect to transformative, high-risk, new technology projects or projects that are obviously not going to generate short term profits, and yet cannot be financed by individual agencies.

   The final aspect is that the NIA has to have a flexibility of tools that it can employ. We need to have control over how money is deployed and managed on a day-to-day basis, much in the same way that private equity funds and venture capital funds control how their money is used. We need a new function that we currently don’t have in the federal system—the asset manager function, not just the lender function. A type of a BlackRock institution, only a publicly-owned BlackRock. Now, it may sound like this proposal makes things too complicated, financialized, and so forth, but it is all in how we design it. This is our chance for a new, standalone federal entity on top of the pyramid of public investment. This is our chance to shape how it’s going to be governed and how it will actually reflect all of our interests in a way that hasn’t been done before.

   AT: Thank you so much, Saule. Bob, you were in on the ground floor of this idea. But right now, you’re pushing what you’ve described as a Plan B option, not to critique the NIA, but to broaden the range of options here.

   Robert Hockett: As Saule said, the original vision was to have a freestanding, permanent public investment vehicle that we thought of as being operationally situated between Fed and Treasury. In a somewhat crude schema, we can say the Fed is primarily concerned with the modulation of the credit money supply, while the Treasury is concerned with the allocation of public money. There are places at the margins where these two functions overlap, and so you need an institutional presence to help fill in that continuum. And it has to be public because the way private, disaggregated financial markets operate is such that it is rational for individual investors to bet on price movements in secondary financial markets and tertiary derivatives markets, instead of deploying so-called patient capital to long-term investment in infrastructure and productive industry. There needs to be an agency to handle the collective action problem that is contemporary finance, and the NIA, based in part on the Reconstruction Finance Corporation, was our proposal.

   The problem is, as Saule noted, somebody like Joe Manchin. It might be sort of a bridge too far to get people like Kyrsten Sinema and Joe Manchin on board with a new freestanding institution. If the NIA is Plan A, what is our Plan B? It’s basically some tweaking or reconfiguring of some existing public institutions to partially replicate the functionality of the NIA itself. It starts with what I call the National Reconstruction and Development Council (NRDC). This is patterned broadly after the National Security Council (NSC), on the one hand, and the Financial Stability Oversight Council (FSOC), on the other.

   The model of both of those councils is to bring together into one structure all of the distinct federal entities that have something to do with the jurisdiction of these councils. So, FSOC is all the financial regulators; NSC is all the security-oriented agencies. Technically, you don’t even need legislation to do that. The purpose would be to bring together all of the cabinet level officials who have jurisdiction over major portions of the nation’s infrastructure or industry. It would be led by the Treasury and Fed, and their task would be to produce a long-term development strategy, updated periodically in the same way that the National Defense Posture statement is updated every year. That council would in effect be a democratically accountable oversight body that’s charged with mapping out a long-term vision of where the nation’s infrastructure and industry ought to go.

   A second element would be the upgrading of the Federal Financing Bank (FFB)—a semi-autonomous entity within the Treasury that most people don’t know about, but which has been there since 1973. You can think of the FFB as the carburetor of public investment at present, but we could convert it into a fuel-injector of public investment simply by tweaking the intake and output functions. Currently the FFB puts out funds by extending loans or loan guarantees to federal agencies, or entities that agencies endorse, and the intake is all appropriations. It would be relatively easy to add to the portfolios on either side: by adding equity stakes, and other forms of investment; and allowing the FFB to form special-purpose trusts that bring together public and private money as another form of Treasury Securities investment.

   Another element is what I’ve been calling “Spread the Fed,” which I started working on when the Municipal Liquidity Facility came online last year. The idea is to restore the Fed to something closer to its original mission, which was a network of regional development finance institutions. The banks had a function, they weren’t simply a network of glorified think tanks in particular regions, but actually monetized commercial paper, and it was required that that commercial paper be associated with “productive” investments. And very crucially, “productive” was not defined in terms of profitability. There was a very explicit distinction drawn between productive and profitable projects.

   We lost that vision. We actually abandoned the effort to distinguish between those two things back in the 1930s. If we were to restore that particular vision, then we could actually put the regional Fed banks back to work in actually helping to foster startup industries, startup firms, and the like, with the money that they issue.

   AT: It’s a hugely complex institutional and historical agenda—some of these capacities already exist within the American government machine and there’s a weird process of amnesia that operates to exclude them from discussion. Let’s move now to a third proposal, from Anusar and Tim, the idea of a public ratings agency.

   Anusar Farooqui: Trump won more votes in 72 percent of US counties in 2020 than he did in 2016. The class-partisan polarization that became dramatically evident in 2016 intensified in 2020. The principal problem faced by US elites is a threat from below. The lead diagnosis of this political instability is that it’s due to economic polarization and political polarization between social classes, and regional polarization: the rural-urban divide, the divide between the super cities and the left-behind flyover country. The general idea taking shape among US elites is that economic depolarization has to be pursued as a conscious strategy of political stabilization. You want to depolarize economically, so as to stabilize the political solution, and the solution that is emerging from some technocrats is a high-pressure economy, because tight labor markets are the only way we know how to deliver broad-based growth. How do you do that? The Yellen-Biden idea is that you want to restore public spending to the level under the Kennedy administration. General investment in government fixed assets has fallen from seven percent to three and a half percent since the early 1960s.

   But this is a short-term vision, and it falls short on closing the funding gap. The Biden proposals and the ones currently considered in Congress leave a \$600 billion per year (or 2.8 percent of GDP) gross funding gap from what is necessary for the energy transition. But I think there is also a more important intellectual problem at work here, which is that the administration does not see the green transition as a solution to the problem of political instability. Related to this problem is a bipartisan, quasi-moral, intellectual rigidity around questions of fiscal discipline. This is most evident in the fetishization of debt-to-GDP ratios. The underlying issue is the fact that fiscal capacity expansion is stuck in the trench warfare of partisan conflict.

   The big question is then: how do you close the funding gap, in light of the structural constraints on fiscal expansion? How do you solve this political challenge? And then, if you achieve the high-pressure green economy, how do you stabilize it? What we’re saying is that public backstops provide an answer to both questions.

   With public backstops to private finance and a ratings agency, you can let cities get financing at the very cheap rates that the US government pays without spending any tax dollars. The big issue is that the US cannot simply backstop projects by firms, cities and states without ensuring quality control. The full faith and backing of the US government can only be given if there is absolute quality assurance.

   Why must the ratings agency stand alone? The default scenario right now is that this function is going to be run and owned by BlackRock. That is a recipe for a boom-bust cycle, as we just saw with the deterioration of rating standards in the mid-2000s in housing finance. The ratings function needs to be insulated from the financial cycle, and insulated from the political cycle. This is part of how you can stabilize a high-pressure green economy.

   AT: Josh, how does this latest 2021 evolution of this debate strike you? Is this a natural development from the original Green New Deal conception, or something different?

   JW Mason: I think in some ways it’s a step backward. There are basically four ways we can approach decarbonization. We can have a price-based approach with taxes and subsidies, carbon pricing—that was sort of the dominant view not so many years ago. We can have a credit policy based approach where we favor green assets and disfavor brown assets, which is where this credit ratings agency is located. We can have a regulatory approach, banning coal plants or the like. Or we can have an approach focused on direct public investment. I think one of the defining features of the GND is to really put a lot more weight on the direct public investment side: you actually just need government to pick appropriate projects and finance them itself.

   The reason we saw that emphasis is a general recognition of the limits of market coordination and the profit motive in general, and specifically the limits of market coordination when you’re talking about large scale rapid transformations. Comparable events historically, like industrialization or war mobilization, have always seen a dominant role for the state in directing investment because markets simply don’t work at that speed and scale.

   I also think it’s because we want to link to broader issues of social justice. Market incentives or credit policy are not going to do that. We also have more confidence in the capacity of the federal government than we had a few years ago. Janet Yellen’s recent comments that we want government playing a more active role in the economy, for example, would not have been heard from a Democratic official just a few years ago. Recognizing that shift links up to the notion that we want to politicize this project, we don’t want to depoliticize it. We don’t want it to be technocratic because we want to achieve explicitly political goals about justice and equity in conjunction with decarbonization, and because it’s a strength to involve movement in politics. We think we can win on the politics. That’s a fundamental part of the GND vision: we can mobilize people and we can actually win this.

   The constraints on the government that people believed in a few years ago, particularly around the financing, look a lot less daunting today. There’s clearly far less fear of government debt than there used to be, and with good reason, because we’ve had vast expansions of public borrowing with none of the economic costs that was supposed to imply. It would be a mistake to say that’s given as a constraint that we need to evade, hiding government borrowing off-balance sheet through guarantees. The lesson of the past decade is that the political constraints on government borrowing are a lot more elastic than we once thought.

   There’s something very appealing about the National Investment Authority and something problematic. The NIA is doing two things: it is getting money from markets by issuing some type of new liability and thereby competing with other investment vehicles to pool our savings; and it’s distributing that money to projects. It is described as both a lender and a borrower in the markets. But the two functions are actually very different. The federal government is already the best borrower. The federal government issues more desirable, higher-priced, more liquid liabilities than anybody else in the economy. The problem of getting money out of the private sector has been solved by the existence of the Treasury bond. There’s simply no need for a new institution. The government’s strength is as a borrower—if there is an underutilized financial resource it is not the private sector’s capacity to lend, it is the public sector’s capacity to borrow.

   On the other hand, where we do need the private sector is on the productive side. There’s lots of productive expertise, there’s lots of labor, there’s lots of capital, there’s lots of firms that have built up the capacity to do things that we need to do, and we want to support that. The challenge of an institution like the NIA is to leverage the federal government’s strength as a borrower on behalf of the productive capabilities of the private sector. The NIA needs to be located financially downstream from the federal government; it needs to be in some form borrowing money from the federal government and then on-lending it to private projects.

   Another point to discuss is the multiplication of veto points in the American political system. This is a distinctive feature of the political system constitutionally, and we’ve added to it with institutions like the CBO. The green ratings agency as it’s described is very much an additional veto point. We can’t have the NIA autonomously deciding what to invest in, it needs a separate CBO-like body that’s going to vet it. A lot of people would say that the proliferation of veto points in the American political system is a bad thing, that the CBO has been an obstacle to the kind of spending that we need to make if we’re going to decarbonize. An appeal of the NIA is that it centralizes decision-making about green investment, reduces the number of veto points in the system, and reduces the number of overlapping jurisdictions. While Saule says she thinks the ratings agency is perfectly consistent, to me actually the ratings agency has been proposed to eliminate one of the strengths of the NIA. If you want to make the argument that democratic politics is untrustworthy because next year the Republicans may be in power again, and therefore we want to introduce veto points and hope to get our people lined up in strategic positions, then you can make that argument—but we should not take for granted that additional agencies and veto points are intrinsically a good thing.

   AT: Thank you, Josh. That was about as crisp a statement of the implicit sort of democratic sovereigntist logic of the GND as I’ve ever heard. I do think a huge amount in this entire conversation hinges essentially on the political imaginary: what kind of political future do you envision here? And do you imagine your proposals as performative—as helping to bring that future about? Yakov, you’ve been in the undergrowth of alternative finance initiatives. Perhaps you’d like to respond to Josh.

   Yakov Feygin: I’m not an optimist by nature. I don’t think we will always be guaranteed to win the political argument, especially in the United States. There are no good historical examples of us winning the argument overnight and at the speed we need to. Exactly as Josh said, there are many veto points, and you need to bring people on board who just don’t agree with you. I don’t believe that proposals are always performative, I think you basically need to have a long-term strategy that successfully co-opts your opposition.

   The NIA isn’t necessarily primarily a financing tool, but what it really is a more muscular way of reshaping private markets. If there is a GND, there’s going to be a need to control private finance if we live under capitalism. As Bill Janeway and Hyman Minsky taught us, if there is going to be a green boom, there will be a green bust. The point of the NIA, in coordination with the GND, is to act as almost a vacuum cleaner—to establish enough of an equity stake, and enough of a presence in the debt market, to then take that inevitable green bust and restructure its assets into something sustainable.

   AT: That’s really well put. Tim, can you respond to Josh’s point about the green ratings agency as yet another veto point? If there’s one thing America doesn’t need more of it’s those, in a sense of preemptive surrender of the agency that the NIA could exhibit.

   Tim Sahay: I think it’s important to start from the question: what sorts of investments are needed? We need most of these investments inside cities, in decarbonizing buildings for instance, or in creating mass transit, and lifting the capital constraints and the austerity budgets that these public agencies have operated on. When cities go to borrow money from the municipal bond markets they face very steep costs.

   What we are proposing would potentially allow for a more democratic approach to financing decarbonization projects. Cities and states can propose such projects—climate adaptation projects, retrofitting buildings, mass transit, and so on—and then go to an authority that affirms that a project is economically viable and will actually cut carbon emissions. As long as that agency is approving good projects, you will reduce financing costs by issuing a guarantee by the federal government and dramatically increase the scale of investments in the places that have been historically underinvested in. That’s going back to Saule’s point: that the grinding austerity in largely majority-minority cities is racially unjust. These are the places that are going to be on the forefront of the climate crisis and they are the places that need the loosest financing available to do the necessary work.

   This ratings function is currently being performed by BlackRock. And it’s currently being performed inside federal agencies that have to judge the climate risk on the assets that they own. If you are Fannie Mae or Freddie Mac, you have to decide where you are going to finance projects, how many loans to give for people to install insulation and solar panels, and so on. This multiplicity of places are prone to regulatory capture and greenwashing. We’re proposing a more efficient way of doing this all in one credible agency for a whole bunch of distributed projects.

   AT: Thank you, that was really helpful to understand the logic. Daniela, what is your take on the American debate?

   Daniela Gabor: What I’ve been hearing so far is a conversation that European political scientists and political economists have had more or less for the past five years. If we bring in the European angle to this conversation, I will fall more or less on the side of Josh’s arguments. Let me start with the idea of the public ratings agency, and remind our listeners that Europe has that already. It has been the subject of negotiation in the EU for the past four years. This is a very powerful example of what happens when you try to design a green standard of sustainable activities without reforming the financial system and scaling back the power of carbon financiers and other vested interests. In broad terms, I would say that there has been a process of diluting the standards of what sustainable activities are, because you can’t take the politics out of identifying sustainable activities. The idea that you will have Democrats and Republicans sitting and happily shaking hands over this narrow set of green activities that we can finance—well, look at Europe, look at the way that BlackRock has been accompanying the European Commission’s work on the sustainable finance taxonomy, and put to rest the idea that you will get some big political compromise.

   In some ways, the US is a latecomer to the party of green finance relative to the EU and global financial circles—probably because of your last President. But US private financial actors have been very critical to green finance conversations elsewhere, and I don’t think that they will stay on the side and watch happily as the public ratings agency comes up with a public good definition of what is a sustainable activity.

   I like the idea of a public BlackRock, but can you have a public BlackRock if you have a private one? There is a conversation going on in global regulatory circles and central banking circles, which the Fed is just starting to join, asking not only how to promote green investments, but how do you stop carbon financing? How do you make sure that the existing financial system dominated by large private asset managers doesn’t continue to lend to carbon activities? How do you avoid what Fabio Panetta from the ECB called carbon financing leakages, in the sense that you might have some nice green standards in the US, but your private financial actors are going to do carbon lending somewhere else? By doing that you haven’t solved the low carbon transition. There’s a kind of green accumulation from the Global South into the Global North that we really need to discuss more carefully.

   AT: And we will return to this crucial discussion in a moment. I want to just give our initial round of contributors a brief chance to respond to the earlier comments, before we turn to the broader agenda Daniela has raised.

   AF: I want to push back against the idea that the four ways Josh laid out the funding of the energy transition are mutually exclusive, because in fact we need all of them due to the scale of the challenge. Josh’s optimism about political constraints being lifted sounds premature to me. And I think that this idea that the federal government has the lowest borrowing costs just doesn’t stand up—anything backed by the US has the same yield as a Treasury, agency mortgage-backed securities being a prime example.

   The question of the veto point is crucial. The idea that you can create an agency that is insulated, public, and respected by the partisans, is credible because we have many examples. Everybody agrees that the FDA works, everybody agrees that the SEC works. The discipline is enabling, it allows you to enable trillions of dollars in financing and saves hundreds of billion dollars for firms in cities and states.

   RH: The NIA idea or the Invest America Plan B fallback is not about raising private capital because it’s somehow needed to finance public projects. We distinguish between the absorption of private capital that currently is highly destabilizing because it’s so misallocated, and the actual taking in of private capital in order to finance public investments. We’re not doing the latter. In the classic PPP model, it’s a lot of public money with private control of that money. Our proposals are the opposite. We’ll take in private money if people want to contribute it, and want other investment vehicles or other safe assets, but the public is entirely in the driver’s seat.

   Now there are other ways to absorb currently misdirected private capital, like taxation. But the problem is that taxation is a very blunt instrument and it’s not quickly responsive. But if you want to absorb private capital that’s currently being misdirected in more flexible ways, a great way to do that is to issue new public securities that might actually target a particular segment of that supply side of the market that treasuries themselves don’t. And you can do that instantly, without requiring new legislation.

   SO: A couple of points. The NIA proposal is actually much more sophisticated and complex than just saying we don’t trust democratic politics. The NIA is in fact meant to create a permanent forum for democratic decision-making with respect to priorities for public investment. This is what we’re missing now, and as a result, just because something is called the public agency doesn’t necessarily actually engage in a democratic process. But the implementation needs to be technically grounded, otherwise we’ll lose to Wall Street, always. When you say direct public investment you should mean actual state owned enterprise, because if not, then it’s still public money given to private actors. Additionally, the NIA is meant to represent a different model from things like the European Investment Bank. The way we get rid of carbon financiers is by starving them of their sources of capital. Provide a safe asset that pays more than treasury bonds and take them away from the carbon financiers.

   AT: Daniela has recently coined a phrase to capture and describe the entanglement of global finance and global development finance, which is a riff on the familiar term the Washington Consensus, it’s what Daniela calls the Wall Street Consensus. Can you give a sense of what you mean by this new critical term?

   DG: I offer a comparison of how a low carbon transition would be organized if you had Wall Street in the driver’s seat versus the state in the driver’s seat. In the status quo, the state becomes the derisker or risk taker of last resort—in other words, guaranteeing returns for private finance and escorting private finance, not only into development asset classes in the Global South, but also in the Global North. This is the idea that the money is there, it’s private money, all we need is to make sure that we create mechanisms to escort it, not to regulate it, but to escort it towards those climate ambitions. I call this the Wall Street Consensus to capture the political power of private finance in what I’ve called, in work with Yannis Dafermos and Jo Michell, a financial globalization supercycle that has taken place over the last forty years, in which BlackRocks and other asset managers have become increasingly structurally important and politically powerful in shaping conversations around development and low carbon transitions.2(<)meta charset='utf-8'(>)See Daniela Gabor. (2021), (<)a href='https://onlinelibrary.wiley.com/doi/abs/10.1111/dech.12645#.YGGBtlA4F54.twitter'(>)The Wall Street Consensus(<)/a(>). (<)em(>)Development and Change(<)/em(>), 52: 429-459. Think about what the phrase “nature as an asset class” represents as a political project.

   We tended to criticize the Washington Consensus because it marginalized the state and it put it in this position of creating markets for private capital. What the Wall Street Consensus does is reimagines the state as primarily a tool for derisking, for channeling fiscal resources into guaranteeing returns for private financial institutions. Now, the idea is that the state has to work with the private sector: the private sector builds, manages, and finances these commodified public goods, and the state stays in the backseat. The state provides guarantees against demand risk—if there is a global pandemic and citizens cannot pay highway tolls, the state will compensate private operators, and so on. Any scenario you can imagine along these lines, the World Bank has a proposal to maximize private finance for development.

   This comes with a reimagining of what we tend to think of as collective public goods because citizens become user fee payers, and their access is conditioned by that. More interesting still is the way state works hand in hand with private finance in order to create green markets, and in order to derisk investments in these green markets. What we have now is an epistemic capture by private finance of what is green and what is dirty in terms of sustainable finance taxonomies—and even where you have public taxonomies like we have in the European Union, they go hand in hand with these private criteria. I have not seen any successful attempts by the public sector and by the state to orchestrate a democratically accountable way of organizing this taxonomy. This matters tremendously because the way in which private finance has handled this is to expand the definition of green to everything. If you can put everything in the green bracket, you get some subsidies for greenwashing and you get very little regulatory punishment for lending to dirty activities.

   My worry is that, if there is political success we will have a global political economy where countries in the Global North will get a much stronger green developmental state, and then countries in the Global South are increasingly going to become sources of greenwashed financial accumulation. What does that mean in terms of social justice, and our ability to really deal with the climate crisis? In the end, the challenge is not to have better, faster trains in the US, the challenge is to make sure that the Antarctic doesn’t melt, because we have not been able to properly regulate the financial system to eliminate as much carbon activity as possible.

   AF: I understand the logic of the epistemic capture. I think that your critique is completely right, but it leaves out the problem of the financing needs of the Third World. The Third World states are not in a position to undertake the scale of investments that is necessary to get off the hockey stick of doom. The transition has to be financed. You can critique it, but then you have to at least provide an alternate model, and if that model looks like an empowered World Bank that is partnering with the development finance institutions that are totally under public control in the Third World. That world is very hard to bring about given the extraordinary power of private financing institutions.

   AT: Of course the question does come back to what Anusar is raising: what is the plan, is it a global Green New Deal?

   DG: I am very doubtful of the idea that mobilizing private finance with the solution of derisking can work with proper tweaking. This system is not organized to coherently coordinate the developmental needs and the low carbon transition needs of the Global South. There are isolate pockets of PPPs for mega infrastructure pockets, often captured by local elites, but no broader coordination. There is no developmental vision there, and there are significant fiscal costs, like the cases of Ghana and Nigeria derisking private financial inflows into natural gas and fossil fuel. There are also examples of countries who have committed to paying for twenty-five years prices for renewable energy that are probably going to be very expensive in two or three years from now.

   There is a very legitimate question of how do you generate fiscal capacity in countries in the Global South. I do not think that the answer is to deplete that very meager fiscal capacity by guaranteeing US dollar returns for private financial investors from the Global North. Fiscally, it’s expensive, and developmentally, it is incoherent. It is important to bear in mind that we could get a lot of mobilization of private finance for green assets if we had the proper taxonomy, and the central bank penalized dirty assets. There is a political strategy to continue to pressure central banks. There are political openings. And we have to make better use of them.

   Watch the video of the conversation here.

6. Restructuring Sovereign Debt

   May 6, 2021 12:00 am Comments Off on Restructuring Sovereign Debt

   Ken Shadlen is a professor of Development Studies in the London School of Economics’ Department of International Development. His research examines how international institutions can create unique challenges for developing countries and, in doing so exacerbate core-periphery inequalities. Writing on the HIV/AIDS crisis, Shadlen has illustrated how intellectual property rules developed by the World Trade Organization threaten to limit the supply of antiretrovirals, with profound implications for patients in the developing world. In his 2017 book Coalitions and Compliance: The Political Economy of Pharmaceutical Patents in Latin America, he finds that countries which had well developed pharmaceutical sectors prior to the WTO’s Agreement on Trade-Related Intellectual Property Rights (TRIPS) did not adopt the sort of maximalist patent regimes that were demanded of less-developed nations. Across his work, Shadlen explores how political blocking and coalition building by developing countries strengthened their influence within the WTO in the late twentieth century.

   Alongside international institutions, Shadlen has written on the politics of debt and financial crises in Latin America. Specifically, his writing has considered the evolution of bilateral trade in the region, and explored how decision making operations of multilateral institutions like the IMF, World Bank, and WTO systematically disadvantage countries in the Global South. Today, as the coronavirus crisis is pushing dozens of countries to the brink of default, the need for a mechanism to guide debt restructuring is especially urgent. I spoke with Shadlen about these issues last winter.

   An interview with Ken Shadlen

   Reece Sisto: What is our operational definition of a sovereign debt restructuring mechanism (SDRM), and what is its history?

   Ken Shadlen: Generally speaking, an SDRM refers to a set of rules that would determine how much and under what terms a country pays its creditors when it can’t repay a given debt in full. Whether it slashes interest rates, extends payment timelines, or reduces the overall value of the debt in question, an SDRM is basically a way of establishing a collectively agreed upon set of conditions for what the borrower must do to receive restructuring, and what the creditors must do to make this happen. While there was an effort in the early 2000s to come up with something like this specifically in relation to private creditors, similar mechanisms had been proposed earlier.

   RS: Why did the most recent iteration, proposed by Anne Kreuger of the IMF, target private creditors?

   KS: Without an SDRM, there’s no structure in place to hold private creditors accountable. Simply put, when we make investments, we incur risks; however, private creditors investing in sovereigns often displace those risks onto others, namely the public. This was plainly evident in the Global Financial Crisis, but has happened many times before. An SDRM would provide a set of rules by which both creditors and debtors are held accountable and not saddle the public with bailouts, potential or otherwise.

   RS: Typically I could see why such a proposal might never be realized, but coming from the IMF I would imagine it to be more successful. Why did it fail?

   KS: The proposal was rejected because it’s not really clear that anyone within the IMF wanted it other than Anne Kreuger. Creditors and creditor countries like the US didn’t like it for obvious reasons—too much authority delegated to the IMF—and effectively vetoed it. But debtors, who we’d imagine to be the principal beneficiaries of an SDRM, also opposed it. It’s hard to say whether they really didn’t want it or were just scared of coming out as the debtors who were saying, “We really want a system that makes it easier for us to not repay our debts in full.”

   RS: These are not only structural barriers to the creation of an SDRM, but instrumental ones; creditors and the states in which they’re headquartered pressure developing states to oppose an SDRM as a demonstration of creditworthiness.

   KS: Exactly. The fact of the matter is that we know countries may not repay their debts in full. That’s the reality! Yet we live under this myth that countries will always be able to repay, so any effort to prepare for scenarios where countries can’t repay is viewed with suspicion. It’s like saying that people who buy insurance on their automobile are planning to drive recklessly. You should be able to buy insurance for your automobile because accidents happen and you should be afforded protection against that possibility. Instead, debtor countries were made to feel that if they bought “insurance” they were telling the world that they were planning on “driving irresponsibly.”

   RS: Is there space for coalition-building amongst countries in the Global South? Can we overcome this collective-action problem?

   KS: Only insofar as there is consent from the US. Substantive changes to the IMF require an 85 percent supermajority from member nations; however, nations don’t have equal votes. Votes are proportionate, ostensibly, to the contributions they make to the fund. The US, for example, has 17 percent of the vote, meaning it has an effective veto power. No US support, no SDRM. Whether developing countries are acting collectively or separately is inconsequential.

   RS: Is there the possibility of an SDRM model that exists outside of or otherwise circumnavigates the IMF? Are there other institutional mechanisms to pursue?

   KS: I have trouble imagining that. There are certain functions that have to be performed—like calculating and monitoring debt sustainability—and they can only be executed by an authority which is commonly respected within the global financial community. Like it or not, that’s the IMF. However, this is not stopping other international institutions from trying. The UN is trying to create an instrument very similar to an SDRM that doesn’t rely on the IMF.

   RS: Let’s talk about Argentina’s most recent debt restructuring. When Anne Kreuger’s SDRM proposal failed, the compromise was a more tempered option: collective action clauses (CACs). Could you talk about how the two differ and what we gain or lose from CACs over an SDRM?

   KS: For restructuring to happen, creditors have to accept being paid back less now and more in the future or just less in general. How do you get creditors to agree to that? The SDRM and CACs offer distinct answers to that question. With an SDRM, particularly the one proposed by Kreuger, creditors vote on whether or not a debt should be reduced to a given level and the approach to making that happen. If the requisite proportion say yes, then the decision binds to every creditor. CACs do the same thing, but they do so within the issue of the bond. If a creditor lends a debtor money, they do so knowing that if said debt is deemed unsustainable or unpayable (say, via default), then the contractual obligation within the CAC kicks in and if a supermajority agrees, the debt is restructured for all those who hold bonds with CACs. In the former, there’s no opt-in; it becomes a structural condition of sovereign debt. In the latter, there’s a simple solution if a creditor doesn’t want such terms: don’t purchase bonds that have CACs, lend your money to another country. Creditors obviously preferred the flexibility and choice of the second.

   RS: It seems a bit paradoxical to offer a market solution to what is, effectively, a problem inherent to the market itself.

   KS: Insofar as CACs can’t be retrofitted to existing debt, I might agree. However, they have their benefits. At first, CACs only applied to each individual bond issue. This wouldn’t work: creditors issue bonds in different currencies, through different banks. If each bond had a correspondingly unique CAC, then CACs wouldn’t do much good. However, about five years ago, a new approach to CACs became standardized. They started appearing in single issue bonds with clauses specifying their application to all issues. These are called “Enhanced CACS.” With these, the CAC in a bond issued by a borrowing country may be triggered even without a supermajority of that particular bond’s owners, provided that there is supermajority support for restructuring across all the country’s bonds. With a good enough lawyer, you can write anything into a contract. Paired with their ubiquity—basically all debt is issued with enhanced CACs these days—CACs are functioning more like an SDRM than initially anticipated.

   RS: CACs featured prominently in Argentina’s recent debt restructuring. Some scholars view this restructuring as a success which vindicates CACs. What is your take?

   KS: I think you can look at it both ways. The restructuring does vindicate CACs—the last time Argentina defaulted, in 2001-2, the negotiations and restructuring went on for fifteen years. This time, it was a matter of months. Clearly, something worked. But the question is not only whether restructuring happened. What we care about is whether it brought debt down to a level that is sustainable. Did they get enough reduction? Argentina didn’t get as much debt reduction this time as it did last time.

   So you might want to say there’s a trade-off here: CACs make debt restructuring easier, more efficient, and quicker, but they also make it less generous. I’ve spent most of my career looking at this issue from the perspective of and with sympathy for the debtors. In this case, I’m not actually sure who got the worst deal. On the one hand, Argentina got really good debt reduction that they imposed, unilaterally, in 2005. But then they spent ten years in litigation and ended up paying a lot of money to end the litigation and to be able to close the chapter on the 2001-2 default. Looking back, the 2005 restructuring isn’t all that successful. This time they didn’t restructure quite as steeply, the level of debt reduction they got is significantly smaller in comparison, but it was done in eight months, and there’s no litigation. It’s hard, even for me, not to acknowledge that there are some upsides to CACs.

   RS: What, then, are the implications of that right now? We have close to 100 countries that are about to default on their debt. Are the CACs going to ultimately work in their favor?

   KS: The more immediate problem is that many of those countries don’t have CACs. This harks back to the paradox you mentioned: CACs aren’t a structural fix. In Argentina, after litigation, they basically restructured and reissued all of their debt in 2016 and 2017. The government—for reasons the world will someday have to understand—was a darling of the international financial community. Everybody was lending money to Argentina, but with CACs. This other massive number of countries about to go belly-up? They don’t have CACs, sometimes weren’t even offered them, so they’re back to the old problem.

   RS: If this brings us full circle, then is this moment one where the realization of an SDRM is more politically feasible?

   KS: We will have to see. Like the UN, the G20 is also trying to do something like an SDRM. Their approach at the beginning of the pandemic was not debt restructuring, but suspension—the Debt Service Suspension Initiative (DSSI). It was originally only for bilateral debt and now there is an effort to expand it to include commercial, private debt. Ultimately, though, these are all just ideas. In general, it depends on the appetite of the big creditor countries.

   The other issue is that there’s more Chinese debt than ever before. This means that some countries don’t really need the US—they would need a sovereign China debt restructuring mechanism. For many countries (particularly in Sub-Saharan Africa, but also several in Latin American) the Chinese government is the creditor that most matters.

   RS: So is it then realistic to imagine an SDRM that exists without consideration for American debt?

   KS: I’m not sure about China’s position on debt restructuring, but at the end of the day, we won’t get an SDRM for private, commercial debt that doesn’t include the US and the UK; they hold such a large majority of private debt. Even debt issued by other creditor nations is often based in the US or the UK, and thus subject to American and/or British law. If a given contract needs to be overwritten or suppressed, it must be done in the country of legal jurisdiction, the country that houses the debt—national creditor and debtor courts alike would be subordinate. The US and UK not only lend significantly, but house, legally speaking, an immense amount of sovereign debt.

   RS: At the turn of the millennium, there was a political and moral imperative that reframed the issue of debt relief. Do you think there could be a similar cultural or political movement that pushes the US and the UK in this direction?

   KS: Yes. The Debt Jubilee at the turn of the century was focused on a group of “heavily indebted poor countries.” At that time, most of these countries owed their money to public creditors, either foreign governments or the multilateral banks. Cultural and political actors built a movement around debt relief that framed the issue for policy makers and politicians and it worked. However, it didn’t apply to commercial debt because those weren’t the countries that owed much to public creditors. The movement focused on pathos, drawing on a portrayal of these poorer nations’ most desperate conditions. This didn’t translate to Brazil and Argentina, middle-income countries that were regarded as big enough and strong enough to fend for themselves (even though middle-income countries house close to, if not an outright majority, of the world’s poor). The question for me is: Can we recreate that sort of “moral movement,” as it has been understood by the academic community, that is not just about poor countries’ and public creditors, but countries’ debt to commercial and private creditors?

   I think the answer is yes. The consequence of what happened twenty years ago is that a lot of poor countries got their debt restructured, their economies started doing better, and they started borrowing from private creditors. So many of those same countries that needed their debt restructured twenty years ago because they were too poor to repay the IMF are now too poor to repay Citibank. We are beginning to see exactly what you were talking about: a moral movement to say that creditors’ debt should be forgiven too. However, at this moment, it’s too early to say. What’s going on with the G20 is an effort to have debt restructuring, but only for really poor countries—that would leave out the middle-income countries, recreating the problem of twenty years ago. I wouldn’t suddenly expect the world to change, but there may be reason for cautious optimism.

7. Party Politics and Social Policy

   March 19, 2021 12:00 am Comments Off on Party Politics and Social Policy

   In The Takeover of Social Policy by Financialization, Lena Lavinas names the “Brazilian Paradox”: the model of social inclusion implemented by the Workers’ Party under President Lula and President Rousseff promotes a logic of financial inclusion and market incorporation, and has ultimately contributed to mass indebtedness among the Brazilian population. André Singer assesses this period of social policy expansion as an attempt to reach the “Rooseveltian dream”—a political project that ended with the impeachment of President Rousseff in 2016 and the election of President Bolsonaro in 2018.

   On January 25, Lena Lavinas, André Singer, and Barbara Weinstein, historian and author of For Social Peace in Brazil, gathered to discuss this period of mass social inclusion and its unraveling in political scandal and a lurch to the right. A recording of the conversation can be watched here. The transcript was edited for length and clarity.

   A conversation between Lena Lavinas, André Singer, and Barbara Weinstein

   Barbara Weinstein: The premise of our discussion is a profound paradox: in Brazil, a dramatic period of social inclusion has given way to a revanchist politics of exclusion—with many of the beneficiaries of the first phase now key protagonists of the second. The paradox, while not unique on the global stage, feels especially acute in the Brazilian case. Given the magnitude of the “Rooseveltian” inclusion phase, how can we explain this transformation?

   Lena Lavinas: This period of social inclusion under the Workers’ Party (Partido dos Trabalhadores, or PT) cannot be separated from the massive process of financial inclusion in Brazil, which was made possible thanks to shifts in banking regulations and other financial innovations, like crédito consignado,¹ first brought about in the mid-2000s. Both mechanisms unfolded together, but it’s important to make an analytical distinction between market incorporation and social inclusion—the former characterized by real improvements in wages and earnings, or by access to credit lines, which was the case under PT; and the latter reflecting redistribution that addresses structural inequalities by promoting decommodification.

   A long-term problem in the Brazilian economy has been demand expansion and stabilization. The novelty since the 2000s is that demand has been stabilized not only through participation in the labor market, but also through participation in financial markets. Brazilians were, and remain, deeply integrated in the consumption market through mounting debt loads. It’s nearly impossible to be excluded from consumption markets in Brazil, because a variety of social benefits—including the emergency cash benefit program implemented during the Covid-19 outbreak—provide consumption guarantees to even the most socially vulnerable. To give you a figure: a recent national survey from late November showed 66 percent of all Brazilian households are indebted, and one-third have defaulted. This debt has been central to maintaining the period of social inclusion we are talking about, which I call market incorporation.

   On the question of the “Rooseveltian” model pursued by the PT, it’s important to note that the accumulation of that period in the United States was impossible to replicate in Brazil. And in fact the Brazilian social protection system that was introduced beginning in 1988 is in many ways larger and more comprehensive than the one introduced under Roosevelt—characterized by pay-as-you-go schemes, pension systems, and unemployment insurance. Welfare benefits, Medicare, and Medicaid were only implemented in the mid-1960s. Conversely, in Brazil, the social security system implemented in the 1980s granted universal and free access to healthcare along with compensatory benefits like continuous cash benefits. The Brazilian social security system has developed well beyond the principles that oriented the “Rooseveltian” model in the US.

   BW: How do we reconcile this welfare expansion with Brazil’s sudden shift to the right?

   LL: What the far right succeeded in doing was convincing frustrated people that Brazil was broken—that corruption had destroyed the country. But corruption has always been widespread in Brazil, the difference was that after a period of (modest) development, we did not maintain high rates of economic growth.

   This is because the initial period of market incorporation, which manifested in increased consumption of durable goods, higher wages, lower inequality and greater access to education, was founded on financialization. Ultimately, investment was insufficient to maintaining growth and the left lost control of the political narrative.

   André Singer: The “Rooseveltian dream” that was pursued in Brazil was just that—a dream. It posited that you could construct a welfare state while bypassing a conflict between capital and labor. Lulismo² sought to reach this goal in an American, rather than European, way.

   I disagree with Lena about what was achieved, which I have called a feeble reformism. There was a substantial and important increase of the minimum wage, at almost 100 percent of its real value, and an important increase in employment—Brazil went from 12 percent or more unemployment to 4 percent by 2014. And the crédito consignado that plays an important role in Lena’s financialization thesis was given to a large part of the employed population, who could get consigned credit from the bank at low interest because the monthly payments were deducted from their salary. That radically changed many people’s economic position. It was not a revolution, it was not even a welfare state, but it was the beginning of a welfare state.

   There are three dimensions that help explain the phenomenon we started with—the revanchist politics of exclusion following this period of inclusion. The first is that, since 2013, there has been an erosion of the project of Lulismo, accompanied by a worsening of global economic conditions. In Brazil, the crisis began in 2011, not 2008. And from then on, President Dilma Rousseff was obliged to do many things that challenged the interests of the entrepreneurial class. She managed to keep employment levels high until 2014. But from 2015 onwards, that was no longer the case—and that’s where the narrative problem which Lena mentioned began. Corruption charges were levied in a factional way against Lula and the PT, and a process of broad middle-class mobilization against Lulismo took form.

   The second dimension is the impeachment of President Dilma in 2016, which was a parliamentary coup. It was not a coup d’etat, because impeachment is a constitutional clause. In some ways, the law was respected—for instance, there was a legal majority to impeach. What was not respected was the legal necessity for proof of responsibility and of crime. There was neither crime, nor proof. The established press, which is far from sympathetic to Dilma, recognized this. The process was corrosive to Brazillian democracy, and opened the door for Bolsonaro.

   2018 was the year in which these developments took an electoral dimension. The extreme right was able to mobilize their traditional base, which constitutes about 30% of the vote, plus another 10% from the center right. It was not so different from what happened in the US in 2016.

   BW: I want to summarize your different approaches, and Rosana Pinheiro Machado’s approach, to the last two decades of Brazilian political history. Lena, you emphasize the shift in social policy away from direct provisioning, the more classic form of the welfare state, to much cheaper targeted cash transfers, which are then collateralized by the private sector to fuel consumption through debt. André, you emphasize the collapse of the Lula coalition, precipitated by the departure of industrialists, driving a return to the neoliberal politics of the pre-PT era. And finally in her shorter time frame Rosana emphasizes how declining purchasing power reduced the perceived self-worth of new (especially male) consumers created by Lulismo, precipitating their shift to Bolsonaro. Are these all related dimensions of a single phenomenon?

   AS: I think the views can be synthesized. I agree with Lena that cash transfers may not have been the most progressive way to fight poverty, but they may have been the only means available. Targeted cash transfers, including the Bolsa Familia, are part of what I term feeble reformism. But the Bolsa Familia remains unique and important. I also agree with Rosana’s account. But it’s important to note that between declining purchasing power and the consumer shift towards Bolsonaro was the economic crisis, which began in 2008 but reached us in 2011. So it was not an automatic shift. My emphasis is on the interests of the business class, who I argue paradoxically wanted the 2012 recession because it opened the way for austerity.

   BW: The apparent contradiction of the business class wanting a recession doesn’t seem so strong if we consider it in light of Covid-19 politics in the US. The stock market reached all-time highs exactly when the US economy was in the worst shape it has been in since the Great Depression.

   LL: This is the crucial issue. The financial sector reproduces itself not through the real economy, but through financial markets. At the onset of the Covid-19 outbreak, foreign capital left the Brazilian stock market. But it came back again in November, after which Brazilian stock exchange reached highs that have never been reached before. Brazil is now leading the number of IPOs worldwide.

   Today’s interest rates are very low, between zero and ten percent everywhere in the world. Treasury bonds are not providing the same returns they did in the past. And because of deindustrialization in Western economies, because there was delocalization towards Asia, the only alternative we have now are financial markets. That’s why we see investment shifting away from the state and into the stock market. Just to give some figures: more than $760 billion has been invested in asset management companies in 2020. They have reached $8 trillion in net value. How is it that so much money is being made in the midst of a deadly pandemic and a sluggish real economy?

   I would like to come back to two points in André’s first answer. I fully agree with him that the minimum wage was fundamental to Brazilian development; it reduced poverty and inequality. But as a share of GDP, wages only increased from 38 to 43 percent. Why did this happen? 85 percent of all new formal jobs were below twice the minimum wage. As we know, higher wages are concentrated in the industrial sector. By creating low-wage jobs in the retail and service sectors, the PT was unable to reverse the trend towards deindustrialization.

   Financial inclusion meant that people had access to new credit lines. They used these credit lines not only to purchase durable goods, but also to pay for their own reproduction. They started amassing debt and accruing interest to shop at the supermarket and buy medicine. According to the Brazilian Central Bank, in 2005, only 17 percent of all households’ disposable income was compromised with debt. Today it’s 55 percent. So debt was embedded within the process of financial inclusion, and when, as André noted, the economy began to decline, they continued to pay high interest rates.

   I think this cycle of chronic debt aggravated the reaction against the PT. People were worried about corruption, and about the retrenchment of in-kind public provision, which forced them to increase out-of-pocket expenses to meet their essential needs and led to massive indebtedness, with mounting rates of debt defaults. Two years ago, sixty-five million Brazilians—60 percent of the adult labor force—defaulted on their loans. It’s also important to note that the problem is not consumption in and of itself. It’s about the means you have to consume, and the products you are consuming. Paying for healthcare and education, which are guaranteed by the constitution, is a problem. The emergency basic income program launched in response to the pandemic distributed checks which were much higher than unemployment insurance or even the Bolsa Familia, but food insecurity increased. Why? Because people were paying off their existing debts.

   I would also argue that the power of industrial elites which André references collapsed a long time ago with the financialization of the Brazilian economy. We have been witnessing a permanent process of premature deindustrialization that no government since 1985, when the regime of corporate financialization started off, was able to address, despite the centrality of the developmentalist framework in Brazilian politics. From 1930–79, the rate of investment as a share of GDP increased from 9 to 23 percent. Investment peaked in the 1980s, after which this developmental model was replaced with a neoliberal one. In the 70s, this included anti-inflationary institutional mechanisms. Later, it was based on high interest rates and inflation targeting. The PT did not reverse this macroeconomic context, which favored rentiersm. In my opinion, the rupture of the alliance of the industrialist class with the developmentalist vision of the PT had been a long time coming, but it wasn’t noticed by the left. Industrialists were already assuring their reproduction as a class, and the reproduction of their wealth through financial profits. They were no longer committed to investing in production and the real economy.

   BW: André, you presciently wrote that “Roosevelt’s New Deal emerged in the center of capitalism during a period of dominant Keynesianism. Applied to Brazilian material in times of globalization and neoliberalism, it tore Lulismo apart, driving society to who knows what distant shore far from the egalitarian aspirations the ‘Rooseveltian dream’ had crystallized.” This seems to overlap with Lena’s argument.

   AS: There is no doubt that the jobs that were created were primarily low-wage, and that this has to do with deindustrialization which is tied to financialization at the domestic and global level. But I would like to add that although they were low-wage jobs, they were important, and they were not exclusively created through financialization. It’s crucial to note that the wages of industrial workers also increased as a result of full employment, and an accompanying strike wave—there were more than two thousand strikes from 2002 to 2013. In Brazil, the organized metal worker, for example, is now effectively middle class—this is a central component of the base of the old Lulismo, whose conditions improved during this period.

   I would also modify Lena’s claim that no government addressed deindustrialization; I would say that no government addressed the problem of deindustrialization with success. Unfortunately, Lulismo failed in that sense, but it tried, and specifically President Dilma tried very hard. She pursued a huge fight against the financial sector in 2012, 2013, 2011, to bring down the interest rates.

   BW: Let’s shift to the million dollar question: how can this be reversed? There are two approaches that have been discussed of late, (1) finding a Brazilian Biden, the moderating power of the centrão, the ideologically thin parties of the political center, or (2) building a broad front of the left. Your research seems to call both into question. So what is to be done?

   AS: Brazil has a proportional electoral system and not a majoritarian one. With more than thirty parties in Congress, the Biden solution seems completely out of question. The main problem in my view is that we have no electoral left front. This is incredible in an authoritarian government. If an election happened today, Bolsonaro would make it to the second round. But who would be running against him?

   LL: I fully agree with André’s approach. Bolsonaro is vulnerable, and support for him oscillates. But if an election happened he would make it to the second round, and at this moment we are completely unable to build a leftist, and a democratic, front. To reverse the situation, we must re-found a secular republic. The growing influence of religious fundamentalism in political movements has had dramatic and corrosive effects on the political landscape, and the segmentation of public life by private markets has weakened shared experiences within the population. What has to be reversed is this lack of commonality.

   BW: We’ve been talking about Brazilians as citizens, consumers, as members of different social classes, but there’s been no discussion of race and gender. I myself have written about race and region in Brazil—if we look at a map from the voting results from the last four presidential elections, they’re absolutely bifurcated with the southern and eastern states voting for the right, and the northern and northeastern states, with a few exceptions, voting for the left. This is a new pattern, started in 2006. It shows a regional division that I think has a racial component. Do you have any thoughts on this polarization, which started long before the crisis?

   LL: I would say what we’re seeing now in Brazil is at least in part a backlash against the racial inclusion that took place in recent decades. Unlike in the United States, in Brazil Black and mixed race people constitute 56 percent of the population. We can also see this in the case of gender—the agenda of the feminist movement that I’m a part of have been sacrificed in order to compromise with the Evangelicals. Giving power to Evangelicals and ruralists was a political choice to build a majority, but this gave the diversity agenda to the right. The big problem now is how we’re going to recover our own agenda. Even our agenda has been eroded by the hegemony of the far right.

   ---

   1. A government-backed consumer credit program instituted in 2003. For more on crédito consignado in particular, see Lena Lavinas, The Takeover of Social Policy by Financialization: The Brazilian Paradox (2017). ↩
   2. For more on “Lulism”, the political phenomena of President Luiz Inácio Lula da Silva, see (in Portuguese) André Singer, Os sentidos do lulismo (2012) and O lulismo em crise (2018). ↩

8. Feminism in the Union

   February 20, 2021 12:00 am Comments Off on Feminism in the Union

   An interview with Begoña San José

   Begoña San José is a feminist activist and trade union leader.

   

   Maya Adereth: Tell us about your introduction to political activism and feminism.

   Begoña San José : I had a religious upbringing and went to school at a convent when I was very young. The first movement I participated in was around the Second Vatican Council, which was about renewing the commitment to working people and the poor. When I left my parents’ house at the age of eighteen, I started working as a house cleaner, and in 1970 I was hired by OSRAM, a multinational company producing light bulbs and lamps. Even before I started working, I wanted to join the CCOO. I knew priests who were involved with it, and I knew about meetings held in Orcasitas, a working-class neighborhood in Madrid. But union operations were clandestine, and I had to join the ORT, a Maoist organization, in order to join the union.

   I finally joined the CCOO in 1971, when a collective agreement was being negotiated at my factory. In 1973 I got arrested during a CCOO meeting and imprisoned without a trial. Shortly before entering prison I joined the PCE, and after I was released I continued working for the same firm. In 1974 I was arrested again and this time I was fired from the factory. In prison, I met members of a feminist organization called the Democratic Movement of Women. They worked closely with the PCE to organize solidarity efforts for political prisoners; they brought us books, clothes, and food. In 1975, Franco died and the feminist movement erupted. A common platform was developed, demanding equal access to employment, universal access to early childhood education, the legalization of contraceptives, and the elimination of sex-differentiated criminal sentences. I was active in this through the CCOO. We would meet exactly at the location where the Atocha massacre occurred in 1977, and after one of these meetings I was invited to a DMW meeting. My boss, a man, said I shouldn’t go, and that is what drove me to attend.

   That was the first feminist meeting I attended in my life. I vividly remember watching the wives of trade union leaders and politicians criticize their husbands for defending democracy in the street and ignoring it in their homes. This feminist call for equality and democracy in the home hugely impacted me. One or two years later, the CCOO created a Department of Women, and I became an active member in 1976. I’ve been active in the Spanish feminist movement ever since.

   MA: Can you give some more details about your participation?

   BSJ: With respect to contraceptives, I knew workers who were working in factories that were producing them and distributing them secretly. So, with these workers, the feminist movement called for legalization of this medicine and medical supervision of its production. There were pharmacies, very far away, which sold contraceptives without requiring a prescription, and there were also gynecologists who would secretly provide them. Once Franco died there was a moment of enormous political opportunity. The PCE was legalized in 1977, and we were capable of pushing reforms not only in economic and electoral policy, but policy around contraceptives, marriage, education, and so on. There were two congresswomen, one from the socialist party and the other from the communist party, who proposed to legalize contraceptives and dispense them through the public healthcare system. It was one of the only laws that were adopted during those constituent elections, and it was revolutionary. In every village across the country, family planning services were opened.

   MA: How did unions respond to the introduction of women to the workplace?

   BSJ: There were many debates surrounding the creation of the Department of Women in the CCOO. Some argued that the DoW should be autonomous from the union, while others wanted it to operate entirely under the union. The difference is in how decisions would get made— whether they would come from the members, or whether they would be decided by union officials. Ultimately the latter was adopted. There were people in the union who wanted us to be what the Feminine Section was to Franco’s regime, that is, that we would approve everything the leadership said and get female dominated factories to sign on. But we didn’t want to be women loyal to the union, we wanted to bring the feminist movement into the union, and the union movement into feminism. This position meant that I was too feminist for the union, and too much of a trade unionist for the feminists. In both places, I was a minority.

   One interesting moment was with respect to abortion. At a certain point, many people grew comfortable with the idea of contraceptives, but there was still silence on abortion. In the 1980s, the feminist organization in Bilbao began mobilizing against an abortion trial. There were six women there who had had an abortion, as well as the woman who had carried them out. The women all came from working class backgrounds and had several other children to care for. At that moment people in the labor movement began to realize that women didn’t have abortions for fun. The mobilization turned abortion into a political issue, and the feminists within the CCOO asked the union to defend it as a right. But the union leaders insisted that it was not an issue of the labor movement. To us, abortion was a worker’s issue. Working women needed access to abortion in order to maintain their jobs and their economic independence. Finally, in the first congress of CCOO the demand for abortion rights was passed.

   We struggled a lot against the feminized stereotypes of the Franco regime: of women’s vulnerability and fragility. On the one hand, we didn’t want to call attention to issues of health and pregnancy which made us vulnerable. But on the other hand, we recognized that pregnancy needed to become an issue in the workplace. We knew many women who had miscarriages because of their working conditions. So these issues were deeply related: women should be able to work as well as carry their pregnancy to term.

   Another complicating element was the fact that many women entered the labor market just as the oil crisis hit and unemployment soared. When companies sought to minimize their workforce, women were the first to go. Employers argued that women mostly worked so that they could buy clothes; that women were taking jobs away from family men. This tied into another one of our enormous battles: Divorce! The struggle for divorce involved a confrontation with the Church that almost dissolved the government. The feminists presented a bill defending the right to divorce and we also argued that adultery should no longer be considered a crime. So there was a lot of change in a very short period of time.

   MA: What was your relationship to the PSOE like?

   BSJ: Felipe González’s Minister of the Interior came from UGT, his name was José Luis Corcuera. Once the PSOE was in power, we actively agitated against the discrimination of women in the workplace. At one meeting Corcuera came and told us that defending women’s right to employment is destabilizing the democracy. He said we all had to make sacrifices for democracy to survive, and that women had to sacrifice employment until the situation improved.

   But the PSOE had a group named “Women and Socialism,” of which Carlota Bustelo was a member. She was also a member of the Women’s Liberation Front, which was a group of highly educated professional women. So while the minister was saying that women should sacrifice the right to work to preserve democracy, there was this congresswoman arguing that without gender equality there was no democracy to begin with. Between us and the socialist feminist movement there was a culture of dialogue and unity. Though we were in competing parties, we coordinated closely over feminist issues. This was also true of parties to the left of the PCE; there was a unity of action. We all went into an action to demand that the constitution included women’s rights. During the Bilbao trial of 1979, we demonstrated for the right to abortion together. Later on, there were feminist socialist leaders who were brought up in the party and didn’t have a relationship to the movement. That is when the alliance started to fall apart.

   MA: Were there differences in the ways that the parties approached this issue?

   BSJ: The differences for me were largely rooted in the relationship of the parties to Franco’s regime. While the PCE resisted Franco, the PSOE was hardly visible. All of the people whom I loved and respected were in the CCOO and the PCE, and that’s where I wanted to be too.

   In 1980, there were tensions between the PCE and the CCOO over labor legislation. The party primarily sought to reach an electoral consensus, while the union cared primarily about advocating for job security. Notably, domestic workers were excluded from the worker’s statute (this persists to this day, forty years later). We in the CCOO argued that domestic workers should be entitled to the same rights as all other workers: they should be paid above a certain minimum wage, should not work longer than a certain number of weekly hours, and should receive holidays and benefits. In that moment the CCOO was clearly more radical than the PSOE or the PCE. I was comfortable in the PCE not because of feminism, but because it was on the whole the more radical party.

   But with democracy, many organizations, including the unions and the Democratic Movement of Women, gained a new life. They slowly broke from the party because they had the possibility to serve new social functions. And between these organizations there also emerged contradictory interests: that which was a priority for feminism wasn’t necessarily the same as that which was a priority for the union. For example, we launched a campaign around this benefit which was given exclusively to the male “head of the household.” We argued that there is no reason why the man should be the head of the household. But just as the union gave in on abortion, they denied us on this issue. They told us that we lived in a patriarchal country, and it was unrealistic to make women the heads of the household. Of course, that was the reality, but that is exactly why we wanted to change it.

   JP: Were there any differences between the leaders in exile, regarding these issues, and the party members in Spain?

   BSJ: Definitely within the PCE. At the time of the 1977 elections, there was no one over the age of fifty running for candidacy. Some people thought there wasn’t enough recognition for those who had lived through the civil war—the exiles like Simón Sánchez Montero, Marcelino Camacho and Tranquilino Sánchez. What happened with Santiago Carrillo was very complicated. He was correct in some way, because thanks to the Moncloa Pacts the Constitution got approved. But the manner in which he began doing politics generated a lot of resistance from the base. You can’t ask your supporters, who are on strike, to stop just because you reached an agreement that you believe is more important.

   JP: What was your assessment of Felipe’s program as a member of the PCE at the time?

   BSJ: Some changes started to take place immediately after Franco’s death; in 1976 nursery schools were created and women weren’t forced to leave their job upon getting married. From my perspective as a union member, democracy was a new world. But social reality never changes as quickly as the law. In laws we express some element of public will, but in our day to day life we continue to recreate behaviors out of inertia. Ultimately I think we achieved many things during the transition. The PSOE was pretty coherent on women’s issues after the 1982 elections. But you can’t separate women’s issues from economic issues more broadly. The emphasis on increasing interest rates, on cutting the public debt and prioritizing banks over public services—these things have been devastating, and they have been devastating for women too. Because if the state doesn’t provide care, health, services for the elderly and the disabled, women do it. That is the issue with the economic policy of the PSOE.

   JP: How do you define yourself today?

   BSJ: I am a feminist of the left. All of my activity in recent decades has looked for the convergence of these two elements. What this means is that I think feminists should prioritize the struggle over distribution and ownership in order to defend social equality. To this end, I think the feminist movement must always seek alliances with other movements for social equality—labor rights, the rights of racial and ethnic minorities, and so on. At the end of the day, the question for me is: what do you have to do in order to eat?

9. New System, New Society

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   An interview with Felipe González

   Felipe González was Prime Minister of Spain from 1982-1996.

   

   Maya Adereth: Let’s start with your experience in the anti-Francoist resistance.

   Felipe Gonzalez: In the final years of the Franco regime I spent a lot of time getting prosecuted and detained—in 1971 I was detained three times. But I was never tortured, like some of my cellmates whose condition I lament to this day. For me, this period was about understanding clearly that I wanted an end to the dictatorship, and that I did not want to replace one dictatorship with another. I joined the PSOE in the 1960s because of its history of struggle over civil rights, and its commitment to social democracy. And I’ve stayed there ever since.

   Javier Padilla: Did you have any political or ideological mentors?

   FG: There was a group of us in Sevilla, sometimes referred to as the “Tortilla Group” which included Alfonso Guerra, Luis Yáñez, and Manuel Chaves. We were committed to ending the dictatorship, but we didn’t have particular political mentors. We regularly read Nouvelle Observateur, and we learned about models of workers self management and cooperatives in Yugoslavia. These ideas interested me from both a political and theoretical point of view because of the ways in which they distanced themselves from Soviet planning.

   JP: Tell us about your process of becoming leader of the party. What was your opinion of the party leaders who were in Toulouse?

   FG: We had an interesting situation in Sevilla. Alfonso Fernández Torres was an old socialist militant from Jaén who clashed with the leadership in exile when we met him. We didn’t know why, and we didn’t even know that Rodolfo Llopis had expelled the Andalusian organization because he considered it too rebellious. We were just a group of young people who were agitating at the University. We used the faculty and graduate students at the Law Department in order to build contacts with the CCOO and the UGT. At a certain point, we met an Andalusian socialist who invited us to the national congress of the party in Baiona on July 16, 1969. At this congress, we realized that the vision of reality held by the exiled party leaders was entirely distorted. They had an irreconcilable hatred for Santiago José Carrillo, and they had no idea what was happening on the ground.

   This was also true of the PCE—they spent year after year calling for a revolutionary national strike that was neither national nor a strike, and everything but revolutionary. These divisions between the changing political circumstances and the antiquated positions of the party leaders ultimately led to the split—in the first congress that I attended, Llopis experienced more or less what I would experience in 1980. He lost the party congress, but he remained the general secretary. I’ll always remember that when I asked him why he took this position he said: “By electing me general secretary, the public has appointed me high priest to interpret whatever political consensus follows.”

   As a group we gained support from Ramón Rubial and Nicolás Redondo. We set up labor litigation offices in Asturias, Valladolid and Bilbao, and we used these as a platform to build relationships with the unions and workers. Llopis created what was known for a time as the “Historic Spanish Socialist Worker’s Party” and Suarez and Martín Villa legalized it before they legalized us, even though they had no base. So we held the Suresnes Congress with the party divided. At the Congress Yáñez strongly advocated for my candidacy, though Nicolás Redondo could have just as easily had it if he wanted it. He didn’t want it, so the candidacy fell on me without any clear purpose. At the time everyone thought that a transitional congress headed by a thirty-two- year-old Sevillian was not likely to last long. Things didn’t turn out that way, it seems.

   MA: I wonder if you could tell us about the relationship that the Socialist Party had with other European parties, like the SPD.

   FG: My relationship with the German SPD and the French PS was very important, as was my relationship with the Swedish and Austrian socialist parties. Willy Brandt had some doubts as to the legacy of Llopis, but he aligned with our movement during the Congress of Sureneses. This congress was also decisive because of Mitterrand’s participation. He was initially closer to the General Secretary of the Communist Party Santiago José Carrillo, because he wanted a unity of the left. In the Congress of Suresnes, Mitterrand expected to walk into a room with some old exiled socialists and saw instead a room of 30 year olds. He didn’t know where he was. He continued to insist that we needed a front with the communists, but his behavior towards the PSOE was totally transformed.

   JP: And what about people from Nicaragua like Bayardo Arce?

   FG: I knew Bayardo Arce through the Ortega brothers. I knew the group of those who went after the nine commanders with Sergio Ramírez even before Anastasio Somoza’s fall from power. I was the first outsider who came to Nicaragua to bring Somoza down. I saw a small airplane leave from Panama, dropping bombs on the Somoza palace. I was present during some incredible conversations—ones in which they purposefully spoke nonsense through channels which they knew were controlled by American intelligence agencies. They did it so well that Carter once called Torrijos and Carlos Andrés Pérez to tell them that Somoza was going to fall. And sure enough, Somoza fell soon after.

   I traveled to Panama through Nicaragua five days after Somoza’s fall. Sandinista leaders were welcome at the Spanish Embassy. When I arrived there I had dinner with the nine leaders, the commanders, the Ortega brothers, and Bayardo Arce. Of the three groups behind the Nicaraguan revolution, he was in the GPP—the Permanent Popular War. There were also the communists like Borge, who constituted the core of the movement. Daniel Ortega was a member of the social democratic group. I spoke to them to figure out what they needed. They said: we need paper, pens, and radio batteries. That was the most urgent thing for them. The public was discouraged because they couldn’t listen to the radio. They couldn’t circulate a decree because they didn’t have any paper. This was two or three days before the week the Sandinistas came to power. Afterwards I maintained a very active, if frustrated, relationship with them, despite the corruption and so-called piñata. I maintained a relationship with Bayardo despite the fact that he didn’t remain in government. He was the great mediator with the business world, he would say things like, “we’re very clear on our approach to business interests: live and let live.” It hurt me to hear him take that approach.

   MA: When you were elected in 1982, Thatcher and Reagan were already in office. What was it like to enter as a socialist in this context? What were your primary objectives upon being elected?

   FG: Henry Kissinger came to visit me in 1982. He wanted to see me because they had forecasted that we may win the general elections. Before that I had only seen him once at a meeting, and we never spoke. This time we spoke for two or three hours. He never explicitly said it, but he was coordinating with the intelligence department. He wanted to get to know me, understand my principles and political purposes. At one moment the conversation felt like a satirical interrogation; he asked me: “Mitterrand nationalized the bank. Are you planning to nationalize the banks?” And I answered: “That’s not very precise. De Gaulle nationalized the bank, and despite the fact that he wasn’t pro-American, you could hardly call him a Red.” At that point he started to smile.

   He told me what, in his view, a socialist should do upon entering government. Mitterrand had nationalized some technologies, under the theory of “controlled progress.” But technology can’t be controlled, once you bureaucratize it it stops working. I assured Kissinger that despite his expectations, being a socialist does not always necessitate being a fool. Though he didn’t believe me, I thought that nationalizing the banks was imprudent. Actually, in the government I proposed denationalizing or privatizing all of the businesses which were not successful in the National Institute of Industry, where the failures of the private sector, apart from the Francoist autarky, were transferred into the public sector. Already in 1982 I campaigned on the platform that the public sector should build roads and the private sector should build the cars that you use to drive on those roads. After that conversation Kissinger and I worked together in a group called the International Bipartisan Foundation, formed to analyze the threat of international terrorism which began in the previous October with the invasion of Iraq.

   JP: Did you talk to Kissinger about NATO?

   FG: Of course. Kissinger had the common sense to think that holding a referendum on NATO was nonsense. The United States was terrified that a referendum on NATO would further destabilize Southern Europe. The United States was terrified that a referendum on NATO would further destabilize Southern Europe. They were especially worried about Papandreou, who had promised to hold a referendum on NATO as well as Greece’s member- ship in the EU. With Spain, the US proposal conditioned everything on bilateral agreements. These were all agreements I wanted to revise in order to regain sovereignty. Their approach was always the same: we’re doing you a favor by being here. At the 1983 CSE NATO conference in Madrid, Lord Carrington and Secretary Shultz spoke about the “hunting down” of Manuel Noriega. They asked me if I knew him, and I told them I knew him well. This is before they intervened in Panama to bring him down. They asked me if I had an opinion on him. I told them I did, but that it was different from theirs, and it would age differently over the course of history.

   The Americans were also, of course, involved with the formation of the EU. We had to decide about NATO, and we had to decide about our diplomatic relationship to Israel. Despite conventional wisdom, neither of these things were related to the entry in the EU. Actually, I did not finish either of these negotiations until I was sure that Spain was a member of the EU. In June of 1985 we signed the treaty, and on January 1, 1986, we fully joined the EU. After that, I signed the relationship with Israel with Shimon Peres in late January at the Hague, and we voted on NATO in March. We didn’t really acknowledge the condition that without joining NATO we wouldn’t enter the EU.

   JP: What made you change your mind about NATO?

   FG: It was very clearly related to changing public opinion. Our program was very nuanced, the campaign against NATO was intended to prevent Calvo Sotelo from making a majoritarian decision in a transitional government. The campaign was about entry, and once entry took place, our program called for a referendum on permanence. Then there was a question regarding the “ethics of responsibility,” about the approach we should take.

   José María Maravall: You said something very telling, “Never getting married is not the same as getting divorced.”

   FG: Not entering is not the same as leaving. The consequences of never entering were different than those of leaving. People reproached me for saying I would bear the consequences. I knew that it was just advisory—if I lost the referendum, someone else would have to manage the rejection by the citizens.

   MA: I’m interested in the long term relationship between the UGT and the PSOE. How did your relationship change with the 1988 general strike?

   FG: Our relationship with the UGT changed the moment we entered government. They believed they had the right to decide who was going to be in charge of employment and social affairs. Similarly, the bank thought that they had the right to make decisions about industry and finance. I operated according to the notion that the government should act in a manner which preserves the general interest and advances the autonomy of the public; that it could encourage discussion between the two parties but it could not depend on the interests of any group, no matter how open the dialogue was. I also thought, and this I made clear the month I entered government, that things were governed “in Moncloa and not in Ferraz,” which was the party headquarters. That was the place to discuss party strategy, have debates, and so on. But the government ought to take decisions in Moncloa.

   From the beginning, the UGT didn’t understand this. Everyone looks at the general strike of 1988, but the UGT had already called for a general strike in 1985, which CCOO did not join, when we adopted pension reforms. I wanted to make sure that the pension system was sustainable in the long run, we introduced universal pensions that were available to those who weren’t eligible for a pension through their job. We turned it into a right, not a gift, and because there was so much tension around it they called a general strike. It was also the first time that there was a vote against a law we had put forward from one of our deputies in the congress, Nicolás Redondo. The law included a temporary provision which gave workers who were about to retire the option of switching to the new system. And of course, no one chose to stay in the old system, including those who had called for the strike.

   The 1988 strike was the only real general strike that ever took place in Spain, and it paralyzed the country. It was highly politicized, but interestingly the workers unions and the employer federations agreed. Employers had other reasons to resist the government after six years, related especially to the increased tax burden. It wasn’t necessarily what we did, but our ability to make independent decisions that irritated the UGT. They had good reasons to constrain the power of the government, and the general strike was one avenue to do this.

   Last year, we witnessed massive mobilizations in Chile and in Brazil. In both cases, the trigger was the increased cost of public transportation. There’s no direct correlation between the triggering issue and the magnitude of the mobilizations. It was the same with the general strike; it electrified the issue of vocational training and the reforms to the system that we were attempting. A contractual system of vocational training through employers, this is the system which I advocated and which the unions, and, paradoxically, the employers associations, rejected. This was despite the fact that both the employers and the unions agreed afterwards that our vocational training system is one of the weakest aspects of our economy. But at that moment they decided
   to attack my proposal.

   JP: I wonder if you could tell us a bit about the universalization of public education.

   FG: In politics there are two levels of power. Democratic politics, as democratic as they may be, always act like an iceberg, with some undemocratic forces operating underneath the surface. That is to say, that there is a layer of political relations that we can readily see, and a layer which is always hidden. So, what happened in Spain? It’s pretty easy to analyze on the surface. But today when we see a crisis in liberal democracy around the world, it is hard to get to the root.

   With respect to education, everything was in plain sight: where we were, and what could we do. But to explain what happened I’ll tell you about the concept, rather than the background. Modern, free, public education was established in France in the nineteenth century. In Spain, the right to education was established only in 1984. We had a fragile public system alongside a private system which was controlled by the Catholic Church, which was difficult to finance for more than a small portion of the population. With universalization, we established a public system and a coordinated private one, and outside of this, there was the actually private system, which wanted to remain entirely independent. In the coordinated private schools (concertada), we established rules. The moment they agreed to public money they also agreed that they could no longer pick their students.

   If the public education system had been implemented strictly according to our design, it would not have resulted in a discriminatory system. But in practice, all who defend their rights exclusively do so at the expense of the others. Today, I see certain tendencies in the school system which exaggerate these contradictions—differences, for example, between the school systems on the peripheries of wealthy cities which cater to immigrants, and those who cater to people with higher incomes in the center. The geographical concentration of people of different demographic backgrounds creates completely distinct systems. The discrimination is compounded by the sorts of services and occupations that immigrants enter. Moreover, some schools have started to charge some of the activities that should be free, leading to unfair discriminations.

   It didn’t have to be like this. Apart from the Catholic Church, which was hugely important and shaping the education system, there were other organizations which didn’t have the bias that is usually associated with the concertada. But nearly everyone ultimately complied with the decisions which made the coordinated private system a privileged one. In a place like Madrid, for example, they give far more funding to the coordinated private system than the public one; they’ve completely neglected the public system.

   JP: During this period of centralization, was there ever a moment within the PSOE in which you foresaw problems arising from the Basque country or from Catalonia? I’m especially interested in the debates within the left on the Economic Agreement of 1981. What were the different positions?

   FG: It was contradictory to be in favor of self determination and separatism while remaining on the left in the name of solidarity and redistribution. I am in favor of political decentralization and against the centrifugation of power. Decentralization without guaranteeing institutional loyalty is subjecting the country to the rule of Taifas. The constitutional pact recognized “nationalities and regions,” and guaranteed the right to pluralistic ideas. This is frequently lost in public discussion; when politicians say that Spain is a “pluralist country,” they mean that it is a diverse country, but they forget the ideological significance of pluralism. Ideological pluralism is fundamental to democracy and the diversity in feelings of belonging. We planned the constitution to foster this, but much of the country was not worried about material inequality between regions.

   Ultimately, they developed some kind of regulated autonomy over basic taxes. Whether we like it or not, this system creates tax competition, and it produces pseudo tax havens within our own country. I would have never allowed this system for the following reason: I am not concerned with decentralizing power, but with ensuring a consistent citizenship package to people across the territory. And when people who say they are far to the left of me defend this idea, it’s a contradiction in terms. It’s impossible to support social democratic policies and, at the same time, argue against democracy when it comes to regional inequality.

   JP: If you had to define yourself politically today, what kind of identity would you choose?

   FG: Indalecio Prieto, during a debate with Fernando de los Ríos a century ago, said “I’m a socialist through liberalism. I want to see progress in equality through the foundations of democracy.” Which is to say, I’ve never been a radical but a moderate. The only issue which turns me into a radical is the defense of representative democracy. In the face of a right-wing government, I am a companion to communists. But the moment in which the left leans into authoritarianism, I become a social traitor.

   This is what I believe in: a market economy and not a market society. Because I think human beings are not merchandise, and for that reason we need to regulate and constrain the market economy. I believe in redistribution through direct and indirect taxes, to fight against inequality. Social democracy’s major innovation was not about improving salaries, it was about redistributing wealth and creating the institutions required for social mobility. It was a complete system, with education, health, and pensions; with genuine redistributive mechanisms. Society changed because of the technological revolution, which produced new social structures and new forms of stratification. There has not been an adjustment of social democracy to suit the realities of today. For example, we think many income inequalities are due to gender. But implicit in gender inequalities are the 70 percent of single parent households in which a mother has to feed two children on her own and meets a thousand difficulties on the way.

   The movements for social democracy today resemble what Fernando Henrique so accurately termed “regressive utopianism.” We want to go back to the moment in which we were happiest. But how can the past be the future? What worries me is that to some degree social democracy died of success. It died because it couldn’t understand that the society that it had helped create was not the society which existed when it started.

10. Revolution in the Long Run

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    An interview with Hector Maravall

    Hector Maravall is a long time member of the PCE, a labor lawyer, and a leader of the Comisiones Obreras, the largest trade union in Spain.

    

    Maya Adereth: Tell us about your political experiences at university. Who were your ideological influences at the time?

    Hector Maravall: When I started university in 1966 at the Universidad de Madrid, it was the most politicized school in Spain. And yet, those who participated in anti-Franco activities were a minority. At the Faculty of Law we had fifty or sixty members of anti-Franco organizations out of 5,000 students. Many students had a desire for freedom and democracy, but few were willing to endanger themselves to get it.

    The most important political organization at the height of the resistance to the Francoist Union was Partido Comunista de España (PCE). Although it had been powerfully repressed, it had rebuilt a cultural and intellectual presence. After the PCE was the Frente de Liberación Popular, which started as a Marxist-Christian organization similar to liberation theology, but ultimately developed currents influenced by Che Guevara and heterodox communism like that of Yugoslavia. Outside of the PCE and FLP were small anarchist groups, Maoists, and others. The socialists barely had a presence among the students.

    Javier Padilla: Tell us about the Francoist student union.

    HM: The union, named SEU (Sindicato Español Universitario), was created during the war by the falangists. During the 1960s, there was a movement to reform the fascist union through elections. The left ran for elections and won, forming a new union named Sindicato Democrático de Estudiantes de la Universidad de Madrid (SDEU). In 1967–68, the union was given some paralegal structures; they were tolerated but not legally recognized. This is the context in which May 1968 took place.

    MA: On a personal level, why did you become interested in the PCE?

    HM: I came from a right-wing bourgeois family. My father had been a member of the falange movement during the war; he had been imprisoned by communists, but he had a social position of concern for workers. In the falange, as in Italian fascism and German Nazism, there was a labor component that appealed to many. The founder of the Spanish falange himself, José Antonio Primo de Rivera, who came from aristocracy, had a workerist discourse. My father was one of those convinced by that discourse.

    Once Franco was in power, my father distanced himself and came closer to what was called “social doctrine of the Church”, a progressive reading of the Catholic Church associated with Cuadernos Para el Diálogo, a legal publication that brought together some progressive Christians, socialists, progressive monarchists, and also some communists. My father became a founding partner of the magazine and I started reading it when I was thirteen or fourteen years old. When I got to university I already had social concerns about justice and freedom. There was so much left wing propaganda circulating, about Marxism, Che Guevara, Fidel Castro.There were plays by Bertolt Brecht being performed, and concerts of American protest songs (Bob Dylan was a favorite). This culture, which also overlapped with progressive cinema in Italy, English, and France, really appealed to me.

    My first year of university was spent absorbing all of these new things. By the second year, I began looking for political commitment and I joined the Frente de Liberación Popular (FLP), a clandestine anti-Francoist opposition group. I chose the FLP over the PCE because in those days Cuba and Algeria attracted me far more than Czechoslovakia or Russia.

    MA: The FLP was pro-democracy but against electoral politics. What was your understanding of democracy?

    HM: Neither Cuba nor Algeria had what we called “bourgeois democracy.” We were far more interested in the economic and social system than we were in the political or electoral one. We were most excited about bank nationalizations, firm nationalizations, and agrarian reform. There were moments in which things developed very quickly—at a certain point, the FLP attempted guerilla warfare with the aid of Yugoslavia. When that failed, we developed a more moderate position. But all of these changes meant that the long term objective was not clearly defined. In the short run, we wanted an end to the Franco regime. In the long run, we wanted revolution. But this was all very vague.

    JP: How did May 1968 impact your political views?

    HM: It exerted three important influences. First, it demonstrated that students could play a revolutionary role, alongside or even before the working class. Second, it abolished the idea that revolutionary politics were reserved for the Third World, that Western Europe was entrenched under the influence of the US. Third, it convinced us that the PCE was reformist, and thus that it was not reliable.

    The frustration of May 1968 radicalized the FLP and the left more broadly. The FLP called for a debate on transitioning into a revolutionary communist party, without clearly defining what that is. In its propaganda, the FLP starts using the hammer and sickle. Due to the Trotskyist influence, there was an emphasis on drawing out the contradictions from inside the regime.

    MA: Can you tell us about some of the actions?

    HM: During the months leading up to and after May, there were many mobilizations at the university. When Che Guevara was killed there were massive demonstrations, about 40,000 people came. The district where I lived was constantly surveilled by a police helicopter because we had ongoing smaller demonstrations called comandos: groups of fifteen or twenty people who attacked banks or well-known multinational firms. We shut traffic down, broke glasses, threw propaganda, painted everything red—and we had to do it in less than three minutes before the police arrived. But the regime’s reaction was harsh,.Throwing Molotov cocktails was different from handing out pamphlets. And eventually the comandos stopped taking place.

    MA: I wonder if you could tell us about the disintegration of the FLP and the formation of the Communist League.

    HM: The transformation within the FLP was not very clear. The organization dissolved very suddenly and dramatically, and gave way to three new tendencies: the Communist League, which included the leaders of the FLP (one of them was Jaime Pastor, who today is in the anti-capitalist wing of Podemos); the Partido Comunista de España Internacional (PCEI), which I joined and which was a pro-Chinese split; and the PCE, which became the largest one. The League never grew that much but for a moment it was linked to the Euskadi Ta Askatasuna (ETA), a Basque separatist group, and afterwards Izquierda Unida (IU), a leftist political coalition.

    By the 1970s, I was in the PCEI which was also undergoing a process of radicalization. We held rallies in solidarity with the struggle in Yemen and the massacre of Indonesian Communists. We were directly financed by the newspaper of the Chinese Communist Party, the Rénmín Rìbào. To avoid recognition we worked undercover in different departments: people switched from the department of Law to that of Philosophy and vice versa. But the repression was still very intense, and ultimately our influence diminished entirely.

    MA: When did you enter the PCE?

    HM: In 1969, I spent three months in prison during a state of emergency. I realized that all of the workers held in prison were either members or supporters of the PCE. After the invasion of Czechoslovakia the PCE distanced itself from the Soviet Union and identified itself with the government of Popular Unity in Chile as well as the Eurocommunist Italian Communist party. All of this made them far more appealing.

    JP: What was the relationship between people like Santiago Carrillo who were exiled and those who were in Spain?

    HM: Like every communist party, the PCE’s history is riddled with contradictions and tensions. When I joined, tensions weren’t so high because the split between Fernando Claudín and Jorge Semprún had already taken place. In the eighth congress of 1972 the party adopted a revised manifesto and this generated some tensions. The process of selecting people to attend the congress, as well as the resolutions that were passed, was all very secret. And the people who were chosen, Margarita Suárez and Manuel López, did not represent the new generation of communists. So the expanded role of the party came into conflict with the very extreme internal hierarchy.

    One moment which was of great importance was the 1973 Chilean coup. One faction suggested that the coup demonstrated that it was best to shift to the center. The other faction, of which I was a part, insisted that the coup demonstrated the failures of engaging with bourgeois democracy. This generated a lot of confusion: on the one hand, we saw mass mobilizations, on the other hand, we were increasingly suspicious of forming electoral coalitions in government.

    MA: What was the relationship like between the party and the CCOO?

    HM: The CCOO was founded in a very decentralized way, through one factory in Asturias, another one in Seville, and another in Madrid. It was born primarily through the initiative of communist cadres. Neither the PCE nor the CCOO thought of the relationship as one of control. But inevitably, the composition of leaders and militants were tied to each other. But both the PCE and the CCOO actively wanted to generate space for smaller leftist groups to participate in the union, partially as a way of confronting them.

    JP: And the monarchy? How did the relationship there develop?

    HM: Until 1976, the PCE was clearly anti-monarchist. PCE publications would mock Juan Carlos and caricaturize him; it was only afterwards that we found out that there were contacts between the leaders of the PCE and a circle of people close to the king Juan Carlos—intellectuals who influenced the king.

    JP: Was that strategy widely accepted?

    HM: Small groups of people were against it. I was in favor because I had the feeling that it was a tactical decision, so long as Juan Carlos wasn’t an obstacle to democracy we would accept, and the moment he stopped cooperating we would fight against the monarchy. There were tensions around the transition to Eurocommunism, which was viewed as a moderation. But Eurocommunism was largely a response to the elections of June 15, in which we expected to sweep and we ended up with ten percent.

    JP: How did you see the socialist party before the elections?

    HM: The Partido Socialista Obrero Español (PSOE) entered the scene in 1974. In the congress of Suresnes, Felipe González captured the attention of national media. The Unión General de Trabajadores (UGT), the socialist party union, barely existed in the 1960s and early 1970s. At the time we were convinced that the media attention the PSOE was receiving was superficial. Its slogan was “A hundred years of history,” and we would joke, “A hundred years of history and forty of holidays.” They had disappeared from the beginning of the war until democracy. When the elections took place, the PCE had massive rallies and the PSOE had much smaller ones. We were convinced that we were going to win. When the PSOE got thirty-something percent and we got ten, it was truly devastating. When the recount was over people started declaring that the election was rigged, because we got fewer votes in the working class districts of Madrid.

    Ultimately we began to reflect. One interpretation of the result was that we could simply no longer connect with the country. The PSOE presented a young Felipe González of thirty-two years, and we presented Carrillo who was sixty-something years old. There were some young congressmen, but most of them were linked to the civil war. We came to understand that people did not want to see civil war heroes. There were also those who had attributed the electoral failure to the fact that we had diluted, blurred, the communist essence; that we no longer differentiated ourselves considerably from the socialist party. The reflection many reached later on is that deep Spain—Castilles, Extremadura, Aragón—still had a profound anti-communist sentiment. Civil war divisions reemerged; those regions which had been on the republican side—Catalonia, Valencia, Asturias, Madrid—were influenced by the left, and those who had been with Franco from the start still were very anticommunist. These reflections produced a split between the “renovators” and the “carrillistas.” The PCE became increasingly divided after that point.

    MA: What did you think of Felipe González’s modernization program?

    HM: I thought it was terrible. After the failed coup in 1981, Felipe had the support of the Unión de Centro Democrático (UCD), who actively pressured for more moderate economic reforms. I was a representative in the commission of CCOO, so I went to many public events with businesses and economists. Felipe’s emphasis on modernization was reassuring for them. He had to undertake an industrial conversion that the UCD didn’t have the guts to undertake, and he took us out of the discussion of NATO which the UCD had gotten us into. He had to build a democratic infrastructure which didn’t exist under very difficult circumstances. Despite the things I disagreed with, he industrialized the country, there is no doubt about that.

    JP: Why did the unions weaken under PSOE?

    HM: Firstly, because we were competitive with one another. And secondly, due to the industrial conversion. I wouldn’t say that the unions lost the fight over the conversion, but they certainly didn’t win. The unions defended the old pensions system and lost the battle, were unable to organize against layoffs that came with industrialization. That generated a lot of disappointment among workers, and the offensive by those in the media and on the right didn’t help.

    JP: What is your assessment of the transition González undertook looking back?

    HM: Ultimately, I believe the transition went quite well. Franco became a general through a coup, but behind him was the support of much of the population. He represented half of the population who voted for the right in the elections of 1933 and 1936. The left has never had a majority in Spain. At our peak, we had slightly more support than the right, but we’ve never had a sweeping success outside of the 1982 election. Undertaking a transition when half of the public wasn’t in favor of democracy was very difficult. When Franco died, hundreds of thousands went weeping to see him. So the transition had to be a compromise between elements of the left and right who didn’t want another civil war. Ultimately, I think the left gained more than the right: expanded welfare measures, administrative reforms, an advanced constitution. For me the balance of the transition is positive, even though the gains were modest. Did Felipe go far enough? No. Should he have gotten us into NATO? No. Should he have given more boundaries to the Church? Yes. Should he have strengthened workers more? Yes. This is all true. But Spain in 1977 was behind economically, socially and politically. And when the PSOE left in 1994, Spain had changed.

    JP: In a recent conversation, someone described you as “a communist, in spite of it all.” The last question is: why?

    HM: It means several things. On the one hand, the identification with a tradition that in spite of its error, in spite of its mistakes, of its confrontations, has been fighting for democracy and social progress throughout Spanish history. I identify far more strongly with Che Guevara than with Willy Brandt. I know what we did, the good and the bad. But damn, I’ve spent my whole life there, I’m not going to leave now.