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Fiscal localism

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Fiscal localism comprises institutions of localized monetary exchange. Sometimes considered a backlash against global capitalism or economic globalization, fiscal localism affords voluntary, market structures that help communities trade more efficiently within their communities and regions.[1]

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  • ✪ Wendy Brown lectures at Holy Cross on "Cultures of Capital Enhancement"


- So good afternoon everyone, welcome to the Rehm Library. My name is Tom Landy, I'm the director of the McFarland Center for Religion, Ethics, and Culture. And we sponsor conferences, lectures, all sorts of special events on campus that touch on questions of issues of meaning, morality, and mutual obligation. You can find most of those talks online on our website. The McFarland Center website. As will be true of today's talk. So you can tell your friends who couldn't get a seat in the back somewhere that this is worth listening to in a couple of days when it's posted. I'd like to acknowledge and thank our cosponsors today, The Center for Interdisciplinary Studies and the Peace and Conflict Studies concentration. And especially Professor Benny Liew, who took the lead on making this event possible. I'm also grateful to Benny because he's given me the unique opportunity to get to thank the class of 1956 professor at Holy Cross for inviting the class of 1936 professor from Berkeley. You don't get that too often. It's a great opportunity for the class of 2016 to think about something. It's a great privilege actually to welcome Wendy Brown. She is as I say, the class of 1936 professor in Political Science at the University of California at Berkeley. Where she's affiliated with the Department of Rhetoric and the Interdisciplinary Graduate Program in Critical Theory. This fall she's visiting Professor of Government and Law at Cornell University. And we were talking in the morning she's off to Chicago to Northwestern for another big event tomorrow. A scholar of historical as well as Contemporary Political Theory, Professor Brown has authored a number of books including most recently "Undoing the Demos: "Neoliberalism, Democracy, and Citizenship" this year. "The Power of Tolerance" which is a debate with Rainer Forst in 2014, and "Walled States, Waning Sovereignty" in 2010. Her current research focuses on neoliberal transformations of Democratic meanings and practices, and neoliberal jurisprudence with a focus on the Hobby Lobby case. I guess we'll hear something about the Hobby Lobby case today perhaps. She's also working on a book concerning the place of religion and Marxist thinking about political economy. Her lecture today, which I'm eager to hear is titled "Cultures of Capital Enhancement: "Who is the Neoliberal Subject "and What Does It Know About Democracy?" Please join me in welcoming Professor Wendy Brown. (audience applauds) Thank you. It's an enormous pleasure to be here. This is a gorgeous room. Which is always something I think to treasure in academic settings. Especially where I come from, at the University of California Berkeley. Among other things our slashed funding has meant our infrastructure is falling apart. So I'm just literally soaking this up. It's just heavenly, it's also a real pleasure to be at Holy Cross. A place I've admired from a distance for a very long time, but I've never been here before so I'm delighted to be here. Before I start I want to thank Tom for that introduction and for hosting me. And the center for hosting me and especially Benny who put up with many changes in plans. Also persisted over several years in inviting, I should say maybe insisted on my presence here. And so we finally made it happen and I'm thankful to Benny for that. I'm going to do something after talking with Benny that's a little different than what I normally do when offering a lecture from my research. I'm going to offer a kind of introduction to what I take the important features of neoliberalism to be. And what I think the implications are for democratic subjects and for who we are, how we value ourselves, how we value each other, and what values we bring to the world we engage. Let me just say before I continue that if anybody standing in the back would like to be sitting, I know it's threatening, but there are seats up here. Empty, blank, calling for you. But if you prefer to be standing in the back you can go on just standing. So I'll just take a minute in case anybody wants to sit and if you. Look, a brave soul walking forward. Two brave souls. I know it traps you, it means you have to stay for the entire lecture. That's the problem. So as I say, what I'll be doing is offering for what many of you may seem too introductory. But my thought was that even if my version of neoliberalism is familiar, maybe you'll find something you'll wanna argue with in it. And if it's not familiar then consider this your introduction to the world that we live in. Organized by neoliberalism. There are many many ways to understand this term neoliberalism. Every scholar defines it a little bit differently. It's one of those things I believe that indisputably exists but looks different from different angles, different disciplines, different interests, and different concerns. There's also a very significant difference between how neoliberalism was conceived intellectually in the post war period. By the scholars who invented it essentially in Vienna, in Freiburg, and in Chicago. And the way that it's actually taken shape. So what one might say here is there's a difference between the original ideas of neoliberalism and what one could now call actually existing neoliberalism. The neoliberalism we have that's organizing our world. There's also a difference between neoliberalism before financialization that distinctive conversion of every aspect of the economy into a financial instrument. Ad the enormous growth now the dominance of the financial sector over the global economy as well as national economies. And what neoliberalism was before that took off in the 90s. But I'm mentioning all that because it's what I'm not going to talk about today. We don't have time for it. What I do want to talk about just a little bit is this. Neoliberalism as economic policy. Neoliberalism as a distinctive form of governing and a distinctive understanding of what the state is. And neoliberalism as a form of reason. A form of rationality that organizes every day life. Neoliberalism that actually organizes us, human beings in a particular way, and our values, and the imperatives that we feel driven by. So put another way, what I'm gonna be talking about is the transformations of capitalism, neoliberalism as capitalism, and then the neoliberalism's transformations of state and governing, and then it's novel remakings of society and the human being in the image of the economic. And this is what I'm gonna be emphasizing over and over again that what neoliberalism brings about above all is the remaking of everything in the world in the image of the economic. Not just the economy, but human beings, societies, schools, workplaces, city planning, social life, psyches, and more. So I wanna start in an odd place, I wanna start with Iraq. As you know, a coalition comprising the United States, the United Kingdom, Australia, and Poland. Famously called by G.W. Bush the coalition of the willing invaded Iraq in March 2003. Beginning what would be the start of the Iraq war that unfolded over the next decade. When all the other justifications of invading Iraq melted away and you may remember or know that these included the idea that there were weapons of mass destruction there. That Iraq was linked to al-Qaeda, or more directly responsible for the 9/11 bombings. There was the equation of Saddam Hussein with Hitler. But when all of those melted away it turned out not to be true, not to be verifiable. The one that the Bush administration stuck to was the idea of bringing freedom to the Iraqi people. Shortly after the invasion had begun President Bush declared and I'm quoting him. "A peaceful world of growing freedom, "serves America long term interests, "reflects enduring American ideals, "and unites America's allies. "Humanity now holds in it's hands the opportunity "to offer freedoms triumph over all of its age old foes." So the one principle still standing after the others faded away was that we were bringing freedom to the Iraqi people and to the regime. Bush indeed gave speech after speech identifying freedom as God's gift to mankind. And identifying himself and the United States as having the mission to help others obtain this gift. I'm quoting Bush again. "God gave man freedom, "and man serves God by helping to free others." So fast forward one year from the initial invasion, March 2003, to about May 2004. Paul Bremer by that time had been installed as the head of the coalition provisional authority in Iraq. He essentially was its temporary premier and CEO. He begin to identify what this freedom consisted in. He'd already infamously declared Iraq open for business just a few weeks after Saddam had been toppled in May 2003. In the following Spring, the one I'm talking about now in 2004, he spelled out a set of 100 orders. These came to be called the Bremer Orders, and they would eventually be the Bremer Laws. What were the orders? I won't go through all 100 of them. I'm just gonna group them into a set of general concerns. They go like this. First, to privatize all state run and state financed endeavor. Including public services, the media, transportation, construction, health care, and provision for the disabled and the elderly. So privatization of everything that was currently organized as a public good. Second, a number of the orders addressed the task of producing full ownership rights by foreign firms of Iraqi businesses. So both state owned and failing businesses could now be bought outright by foreign capital. And these included not just agriculture and oil. Both of which were crucial in the Iraq economy. But also things like policing and social services. So privatization, full access to ownership of enterprise in Iraq by foreign business. Third, full repatriation rights of foreign profits. Meaning that any foreign investor or foreign entrepreneur, foreign business in Iraq, could fully repatriate its profits back to the home company. There was no requirement for reinvestment in Iraq. Fourth group of orders pertained to opening Iraq's banks to foreign ownership and foreign control. So Iraqi banks essentially were bought by the big banks. Big global banks in London and in the U.S. The fifth set of concerns that the orders addressed was eliminating nearly all trade barriers, all tariffs, and all corporate taxes. So all what were understood as all impediments to capital accumulation and to profit in Iraq or in exporting and importing into Iraq. So under this group of orders essentially, Iraq shortly after the regime change was sold off to world capital. It became a new playground of world finance capital and industrial and agricultural capital. On the other hand, an additional set of orders pertained to what would happen to the labor market. Which was to be strictly regulated. Strikes were outlawed under one of the orders. And the right to unionize was heavily restricted in most sectors. The orders also included a regressive flat tax on income. Further rewarding those who already had capital or wealth. And penalizing workers and the poor. But technically these orders were in violation of the Geneva and the Hague conventions. These are conventions concerning what an occupying country may do under conditions of war and occupation. The occupying country or the occupying power under the Geneva and Hague conventions is mandated by international law to guard the assets of an occupied country. It can't sell them off, it has to protect them. And indeed there were Iraqis, including those in the provisional authority. Those who operated under Bremer. The temporary government that was controlled by Bremer. There were Iraqis who resisted the imposition of what they called the capitalist dream on Iraq. And they resisted it as both wrong, bad for the country, and illegal, under the Geneva and Hague conventions. But if illegal under international law, these orders could become legal if they were confirmed by a sovereign government. So an interim Iraqi government was appointed by the United States in 2003. It was declared sovereign by the U.S. in 2004. At which moment that government, essentially constructed by the U.S. was asked to ratify the Bremer orders as law. Which the government did. So what's happened here? What Bremer inaugurated in what was essentially stateless condition of Iraq after the toppling of the Ba'ath regime was the building of a neoliberal state. And the building of that state from the top down using the authority of the state and the authority of law. Not democracy from the bottom up, not representative government, and certainly not free enterprise. It was an illegally state imposed new regime. The fundamental mission of these orders as you can tell was to facilitate conditions for capital accumulation by both domestic and foreign capital. So the new freedom of Iraq, the Iraq that we freed that we brought God's gift of freedom to was rooted in the freedom of global finance and investment capital. Among the 100 Bremer orders, one of the oddest at first blush, was order number 83. Which outlawed heirloom seed saving and crops. That practice that is now very cool, very hip, in organic farming in the U.S. but has been an important practice for thousands and thousands of years in the fertile crescent. It involves cultivating and transmitting old seeds of hundreds of varieties so that they can be available to open pollination, the birds and the wind, replenish the soil, diversify the crop, all the things we've learned about the value of biodiversity in agriculture. So why was seed saving outlawed? It was essential to outlaw it if Texas based agribusiness giants who are poised to take over the production of wheat in Iraq were going to be able to get their grip. Because the Monsanto packages of seed, and fertilizer, and pesticides, are multiply patented and profits in these packages rest in reselling them annually. And that is exactly what Order 83 permitted. It forbid the old practice of agricultural sustainability in Iraq, replaced it with new modern agribusiness practices. These packages of genetically modified seed combined with fertilizer, combined with pesticides. More about that in a moment. And in a matter of a decade, the sustainable production of grains and legumes that had prevailed in Iraq for at least 10,000 years, on the eastern half of what you probably learned in high school was called the fertile crescent part of the Middle East. That sustainable production was largely destroyed and it was replaced by these agribusiness packages. This also replaced Iraqis' local production of food. What has come to be known by those who are struggling for these kinds of production, sustainable production orders as food sovereignty. It destroyed that food sovereignty. It replaced that local production of our much vaunted Mediterranean diet with an export import economy. Iraq now exports pasta wheat, which Iraqis don't eat. But kids in Texas cafeterias do. And it now imports chickpeas and the other legumes that are a fundamental part of its diet. One other note here, this new form of agribusiness is also rooted in farmer debt. Large loans have to be taken out by the farmers to acquire the agribusiness packages. And it's rooted in very large scale use of the very pesticides that are candidates today for being outlawed in the U.S. Why? Because they are so toxic to water tables, to people, to animals, and to other crops. So I just dove into one of these orders so you could really get a sense of how strongly a set of laws is reorganizing an economy, a society, and the relations of people in that economy and society, in the interest of global capital and so you could get a sense of how important law is in producing what is often understood as just a free enterprise world. The image one has of neoliberalism is that it's all about free trade, taking laws away, getting government off our back, removing all the impediments and so forth. And what I'm trying to highlight is that this group of 100 orders, this group of laws that essentially became Iraq's constitution. And it's real important to see this became the orders that could not be changed. The provisions that the sovereign government had to sign onto when they passed these orders was that these orders could not be tampered with when they became law. They became essentially the Iraqi constitution and brought Iraq into the world economy. Including the world economy of debt finance and everything else under the sign of freedom. The state that the United States aimed to build in the aftermath of Saddam Hussein, while it nodded to rights, and elections, and representation, but there's a whole other problem with all of that which is the huge mess of the instability that was produced in the region in the aftermath of the war. But the point is there was a nod to rights, and elections, and representation, but more fundamental was the devotion to securing laws that would submit the Iraqi economy to neoliberal market principles. So I started here because it gives us one piece of what we need in order to understand neoliberalism. The kinds of economic policies that it entails. The intense involvement of the state and law in organizing and promulgating markets. The very technocratic and legally detailed but also authoritarian nature of power that organizes neoliberalism. The facade of democracy. And I would even say the manipulation of its meaning and of this facade. And to some degree also the social disintegration that neoliberalism entails. So I want to turn in a little bit more depth to these economic policies and then move to the question of the governance of the self. The production of the human being that neoliberalism involves. In the global north, part of the world that's on the northern half of the equator, neoliberalism is understood usually to be inaugurated in Britain by Margaret Thatcher in the 70s, by Ronald Reagan in the 80s, to be continued by most other British governments in the periods after that. And certainly by Clinton and others, Bill Clinton and others in the U.S. By Mitterrand, the socialist in France. My point here is that neoliberalism knows no political party. It's not something that you just find one political party or the other advocating or enmeshed in. Rather by the end of 20th century it becomes the ubiquitous political economic common sense for Europe, for North America, and much of the rest of the world. Economically, at the level of economic policy the heart of the matter is unleashing, unconstraining the full force of capital in all of its aspects. Finance, investment, production. Well the ideology as we've already seen is one of freedom of the individual, freedom of the individual and the freedom of capital don't always square perfectly in neoliberal economic policy. Especially because as we've seen, the state is very involved in advancing the interest of capital but not labor. The idea is to unblock capital by eliminating regulations, and taxes, and tariffs, and any other laws restricting it. While using the power of the state, at the level of the law, and sometimes the police to break up the power of organized labor and regulate illegal labor, undocumented labor as needed. So how do we make sense of this in terms of the freedom of the individual? To make sense of it you have to get rid of the very idea of a laboring class. Of the idea of labor as a group. Rather you have to redefine the worker, the laborer as human capital. Essentially as a little firm. Meanwhile, firms have to get redefined essentially as individuals. So we just have a world now of little capitals, us, human capitals, busily acting, just like big capitals. We're all engaged in the same activity. We're trying to enhance the value of our assets. We're trying to increase and diversify and enhance our portfolios across different parts of life. Increase our shareholder value. Attract creditors who want to invest in us. And avoid depreciating our existence in any way. So the individual essentially has to get defined as a firm, firms increasingly get defined as individuals, both have essentially taken place. We're all little bits of human capital now. This is an ordinary way in which for example, university presidents talk about the product they're turning out. Certainly the University of California, it's just common parlance to talk about generating human capital for the state. And meanwhile the supreme court has done a terrific job of producing corporations as persons. In cases ranging from Citizens United to Hobby Lobby. So we all become capitals, large or small. We all conduct ourselves as capitals. More about that shortly. And the state has to be understood as explicitly advancing the project of capital accumulation and capital appreciation. This is what you see in the neoliberal experiments, in Chile, in Iraq, anywhere that private and public police power is mobilized to crush unions, labor actions, Malaysia, the Philippines, Mexico and so forth. But it's also what you see in increasing moves by states in the U.S. to outlaw or try to restrict or break up unions. And especially to outlaw public unions, public employee unions. And it's one of Wisconsin governor, would be, once upon a time presidential hopeful Scott Walker's proudest accomplishments that he essentially got the legislature to outlaw public unions. And it was his ambition to bring this project to the presidency and make it a federal project, should he obtain the presidency. And not only labor is broken up and reduced. Either crushed or simply restricted legally, but so also is the power of consumers. That's the significance of a set of supreme court cases over the past 10 years that have essentially dismantled class action suits and replaced them with binding arbitration clauses. All of these are moves intended to break the blockages or resistance to capital by labor, by consumers, and by citizens. So they compliment the facilitation of capital by those other policies that we glimpsed in the new Iraq. All right, so let me just summarize before moving on. Where we are with thinking about neoliberalism as economic policy. It involves first of all deregulation. Challenging every kind of restriction or regulation on capital including often safety regulations. Limitations on working hours or mandatory overtime. Keeping minimum wage laws low or eliminating the minimum wage all together. Restricting, reducing, or fighting environmental regulations. So deregulation, limited regulation. Secondly, privatization. Dismantling public ownership and public goods. Marketizing all of those things by selling off or outsourcing or user funding everything from higher education, to national parks, public transportation to prisons to the military. So privatize everything that can be privatized. Marketize everything that can be marketized. Get rid of the idea of public ownership, public goods, public financing. Third, regressive taxation. Regressive taxation of course, whether it's the flat tax, or just eliminating taxes. Essentially it replaces the idea of using taxes both to finance public goods and also to modestly redistribute wealth. What reducing taxation also does is tend to force states into debt financing. So that's the world that we live in today where even the richest states are heavily in debt. And debt itself comes to increasingly soak up the resources of the state, but also provide an investment outlet for the wealthy and corporations. Okay so regressive taxation. The fourth key kind of general rubric in thinking about economic policy is simply dismantling the welfare state. This is a version of eliminating public goods, but you saw a direct attack on the welfare state by Reagan and Thatcher in the 70's, and 80's, and 90's. Welfare states were formulated as drags on growth, as unfair redistribution, the Republican debates these days are recycling all of this, still claiming we have too much redistribution, too much taxation, taxing and spending and so forth. And that it generates the ideas here, not just the wrong kind of economy, but the wrong kind of culture, society. And the wrong kind of individual. The rationale here is that free enterprise not only makes us free, but makes us responsible and moral. So dismantling public programs, public welfare and so forth, is understood as not simply taking something away from society or taking something away from the public, but building a different kind of individual. An individual who will take responsibility for herself, do what she or he wants to do and expect nothing from anyone else ever in the form of help or in the form of support. As Margaret Thatcher famously said, "Economics are the method, "but the object is to change the soul." The object is to change the soul. She added "There's no such thing as society. "There's only individual men and women." What did she mean, what did she mean the object is to change the soul? She meant first of all that all forms of social solidarity need to be dissolved in favor of individual entrepreneurialism in every domain. That there needed to be an emphasis replacing the idea of the social, the public, democratic, the social democracy, and a sense of a nation that was in any way collective and providing for itself together. That needed to be replaced with individual responsibility and entrepreneurialism in every domain. Personal responsibility and family values would take the place of the idea of the social. What she also meant was that all expectations of state provision and social assistance had to be dismantled. In place of such expectation there would be, and this is her word, "responsibilization." We would all become responsibilized human beings. Responsibilized, not just by ourselves, but by a state that took away these things, threw us onto our own and taught us how essentially to become entrepreneurial or little bits of human capital taking care of ourselves. This turn, this last moment in my summary of economic policy brings us close to the final area of neoliberalism that I want to talk about. Which is neoliberalism as a governing form of political reason. A form of political reason that exceeds simply certain economic policies and certain formulations of the state. And moves instead to that transformation of the soul That governing of the subject and a certain production of the subject. To get at this we need to go to a question that maybe a few of you have been wondering about for a while. Which is what makes neoliberalism neo? What are we talking about? Why don't we just talk about liberalism, or why don't we just talk about free enterprise. What is neoliberalism and why did the classic neoliberals call it this? So here, just a tiny bit of intellectual history. In contrast with classic economic liberalism, Adam Smith, Adam Ferguson, the idea of laissez-faire a state that steps back, lets the markets run as they will. Neoliberalism approaches economic life a little differently. First it doesn't simply understand markets as good for the economy, but as good for every sphere of existence. Everything that we do. Even those spheres that are not explicitly monetized. More about this in just a second. Secondly, it doesn't cast market rationality or market reason, or market conduct as natural. And as self regulating even in the economic sphere. It has to be cultivated. It has to be produced and it has to be organized. That's why you needed those 100 Bremer orders. You needed orders you needed law that would produce a certain kind of society and make sure that kind of society kept going in the proper way. So neoliberalism unlike classical liberalism, which just assumes markets are natural and they're only appropriate to the world of exchanging goods. That what Adam Smith's classic notion that we are by nature creatures who, truck, barter, and exchange. That's what we do in the world of need and division of labor. But elsewhere we have what he called moral sentiments. And associations, and relations with one another that are not organized by that kind of principle. Neoliberalism is doing something different. It depicts free markets, and free trade, and entrepreneurial activity as good as normatively good as appropriate to every domain, every domain in life. But also as constructed, as something that has to be brought into being. It promulgated through law, through social and economic policy, and through technocratic expertise at the level of the state. So markets by neoliberal accounts are not understood to just pop up and run themselves. They have to be nourished, they have to be supported by the state, they have to be unblocked at times. Sometimes monopolies have to be taken apart. And the state has to be oriented to that project. The whole purpose of the state in the neoliberalist's understanding is to produce competitive markets everywhere. Second thing that makes neoliberalism neo that we need to focus on is one I've already hinted at which is that the political and social spheres are not just dominated by market concerns. They themselves should be organized as markets. Put another way, neoliberalism requires that the state facilitate the economy, but it also requires that the state construct and construe itself in market terms like a business. And run the nation as a business. It requires that the state develop policies and a political culture, not just that facilitates capital but that figures citizens and organizes citizens as exhaustively rational economic actors in every sphere. So privatizing and outsourcing, getting rid of welfare, and free education at the higher educational level, social security, and that sort of thing. Privatizing these activities is precisely what will orient us toward thinking like investors, or consumers, or entrepreneurs in getting these goods. Whether it's school or anything else. Moreover, policy that comes form the neoliberal state is intended to produce us as little bits of human capital. Entrepreneurs and self investors who are expected to at every turn enhance our own value through calculating investments and risks. Should I go to this kind of school? How much does it cost? How much am I likely to make on the other end of it? What quality of mate might I meet there? How should I think about that in relationship to that kind of school or that kind of program or that kind of major or that kind of fraternity, or you can continue the list. So we are increasingly produced by this mode of governing as creatures who understand our own value as something we have to constantly work at and constantly produce through calculated investments and risks. We are also understanding ourselves as fully responsible for ourselves and hence, have to engage in self care, provide for our own needs, service our own ambitions, not look to anyone else to do it. At the same time you get a governing class and governing criteria that move along the same lines. So increasingly in political life and neoliberal societies a governing class has moved from being one comprised mainly by lawyers or civil servants to being one comprised increasingly by businessmen. And, governance talk becomes more and more market speak. And not just at the state level. This is what we see at every level in governance today. In every kind of institution. Again, let's use higher education as the example. More and more of your life and mine is organized by language and by policy that treats us or casts us as investors in our future value. Not just in what we want or what we're interested in, or what we might want to do for the world. But rather we have to be thinking constantly about how to invest in our own value, our future value in everything that we do. So no longer thinking as people who learn, or teach, or research, or who wonder, or who invent, or who create. Rather we get constant messages now about how you can quote unquote turbo boost your own productivity, enhance your own human capital, enhance your portfolio value through interning for free to get exposure for your art or for your future ambitions, or placing your articles or your projects in certain kinds of venues that will be investments hopefully that pay off in producing a higher value in you and hence, more who are willing to invest in you. Nor is this limited just to the question of learning and vocation. You get the same kind of emphasis today in gym workouts. How to have the most efficient gym workout that targets the most muscles in the least time, produces the greatest possibility of fitness. You get it in discussions of how to hone your class selections, your study habits, your diet, your mate selection. Nothing made this clearer I think at the level of popular culture than an article in the "New York Times" Sunday magazine a few years ago about something I assume is not absolutely pervasive at Holy Cross. Namely hookup culture in dating and sexual life. And the article interviewed a group of the University of Pennsylvania students. High achieving students just like you all. Focused on women and asked them why they found it so appealing. Why would you prefer to have these anonymous sexual encounters to sustaining, interesting, emotionally connected, long-term relationships? Why in particular women, classically associated with seeking such relationships? Why would women be tolerating or perhaps even promoting hookup culture? And what was so striking about the responses is that to a person, the women that the journalist interviewed said, "Well, hookup culture "takes a lot less time for what you're getting, "leaves me time for the things I must do in college. "Which is build my resume, build my future. "Moreover, it allows the men "I'm interested in to mature "before I make an investment in them. "It lets their frontal cortexes harden. "So I know what I'm getting. "I mean face it," said one woman. "At 21 you really don't know if that guy "is gonna become a winner or a loser." He may be interesting, he may be cute, he may be fun, but you don't know what he's gonna be in your future. So better just to have casual sex which allows me to have that pleasure in life and not get into either the time sync or the investment in somebody. That produces the danger of depreciating value rather than increasing value for my own future. My point then is that when we talk about neoliberalism as economizing every sphere, submitting every sphere to the notion of the economic, we're not always talking about monetizing every sphere. In other words we may think and act like contemporary market subjects where wealth generation is not what's immediately at issue. For example, in learning or in writing, or in dating. So the relentless economization of all features of life by neoliberalism doesn't mean neoliberalism literally marketizes every sphere. It does do a lot of that. Rather the point is neoliberalism as a form of reason and as a way of governing us disseminates the model of the market to all domains and activities. It doesn't monetize every sphere. It configures human beings exhaustively as market actors. Again, this is one important thing that differentiates neoliberalism from classical economic liberalism. The idea of just everybody freely and naturally doing what they will and what they want. We're not just market actors in the market, as classical liberals thought. We're market actors in every domain of life. So, again, you might approach your dating life in the mode of an entrepreneur or an investor, but not be trying to generate or accumulate or invest wealth. You might undertake charitable service to enhance your college application profile. But the service remains unwaged. So the idea here is that widespread economization, not necessarily marketization of domains that were heretofore non-economic. That had some other purpose or guiding values in them. Whether it was learning and producing citizens in higher education, or whether it was the value of family, love, emotion, connection, and so forth in social life. Now, that said, there's not just one mode of economization. Economization is a big term and it varies according to the changing, meaning of the economy and the economic. And today we are most importantly not in an exchange economy. We're most importantly not dominated by an economy that concerns circulating goods. You all know this. I mean yes, they're still circulating goods and there's still labor that's producing them, and we could say it's still exploited and all that. But the economy that we're in today is not primarily commodity based. It's not even primarily entrepreneurial, it's a financialized economy. So increasingly, figuring us as economic actors, as little bits of human capital, means that we are, as I've already hinted, concerned with our portfolio value across different spheres of existence. Whether consuming, or learning, or training, or engaging in leisure. More and more, these are all configured as decisions about our self investments related to enhancing our future value. That means that human capital's constant aim, it's ubiquitous aim mirrors that of all neoliberalized firms. And all neoliberalized countries, and academic departments, and universities, and websites. What is the mandate for all of these things? Attract investors, enhance your value, maximize your rating or your ranking. Even if our rating or ranking is sometimes just about tweets or retweets. Even if it's about numbers of likes for something that we have posted. Even if it's just about numbers of hits on a website that you've just started. Again, this figure of the human, as the site of investment capital, human capital that is seeking credit, seeking investors is evident on every college and job application, every dating website, every package of study strategies, every internship and career workshop. So these examples remind us again, that as neoliberal rationality disseminates market metrics to more and more spheres, it doesn't always take a monetary form. I want to conclude now by mentioning just a few of the implications of transforming us and political life, and social life, through economizing them. I want to draw out just a little bit of the implications in this last moment for thinking about democracy. The obvious thing that my analysis suggests is that we are increasingly organized at every turn by market values. Where only market values rule. And put most bluntly, this means then thinking about democracy, that instead of social justice or democratic justice, we increasingly find ourselves submitted to market justice. What's fair, is what the market delivers in any sphere. And other notions of justice developed from other quarters are rapidly being overwhelmed by this idea of market justice. That seems obvious but I want to suggest there are a few other features of what neoliberalization is doing to democracy that may be a little less obvious. One has to do with the notion of equality and inequality. Inequality is a fundamental feature of markets Inequality is the natural medium of competing capitals. Everybody can't be winners in a competitive market. Equality is not the presumption of competitive markets. And that means that when we are figured as human capital in everything that we do, and in every venue, and in every domain, equality ceases to be our presumed natural relationship with one another. It's not just that competition becomes our presumed natural relationship with one another. Or vying for competitive positioning as bits of human capital, but that equality increasingly falls away as the presumption of neoliberalized democracy. Liberty. Liberty in markets means nothing more than the liberty to do what you will with your assets or your conduct to be able to enhance your own value, take care of yourself, strategize to increase or improve your positioning. When we think about liberty that way in political life, it means that we're essentially reducing political life and notions of freedom that have been so powerful in animating western democracy and western struggles for justice. Especially through the period of Euro-Atlantic modernity. It means we're essentially removing all those other notions of freedom from the table and replacing it with this simple, single notion of liberty as your individual right to do what you will with your assets, with yourself, in order to increase your own competitive positioning. We're no longer talking about freedoms for peoples. Freedom to rule ourselves, the fundamental principle of democracy being the idea that the demos rules, the demos is in charge of itself. And that requires a kind of collective freedom that requires producing ourselves as a people who have a whole series of features of freedom including significant political speech now overwhelmed by decisions like Citizens United, and having the capacity to identify freedom as something more than the individual liberty in a market place. There's a third feature in addition to the transformation of the meaning and the operation of equality and freedom that's significant for democracy which is that when everything becomes about value and credit, and credibility, and bankability, those without bankability or credit literally get tossed aside. Remember, neoliberalism emphasizes responsibility. It tasks us with being responsible for ourselves in a competitive world of human capitals. Insofar as we are human capitals, nobody's going to guarantee our survival, that's up to us. And some capitals live and other capitals die, that's kind of the way that competition in a capital world, capital market works. So we increasingly cannot turn to states or to justice for a guarantee of security, protection, even survival. Fiscal crises, downsizing, outsourcing, the European union crisis, all this and more can jeopardize people even when they've been savvy, responsible, self investors. But their job just happened to take off, or 2008 just happened to wipe out their savings and so forth. Most importantly, as a matter of political and moral meaning, human capitals don't have the standing of being intrinsically valuable. What some philosophers following Kant call ends in themselves. Human capitals are not ends in themselves, they're players on a chessboard. Now I think that's one way to understand that spectre last spring of those 900 dead African bodies floating in the Mediterranean sea last spring. Their human capital value was very very very low. Both in Africa and in their European destination. So they were literally allowed to perish, unwanted, unprotected. Neither the traffickers who purported to bring them nor the European Union cared enough at the time to make sure this didn't happen. Now that that crisis has blown up and scaled up as we say these days, there's much more lip service to attending to those basic human lives. But of course quickly what's happening is a sorting of good refugees from bad refugees, promising migrants, capital value migrants, from those who don't have much capital value and so forth. So citizenship, now reduced to self care, is not only divested of being protected, but it's divested of any orientation toward the public or the common. And law itself is increasingly tactilized, instrumentalized. All right, I think I'll stop here. I want to take your questions and thoughts. Let me just sum up quickly. My aim today has really been as I said, just to provide an introduction to this novel way of conceiving and valuing politics and society and the human. And to consider how in particular in really three short decades, neoliberalism has radically transformed who we are, what we feel compelled by and compelled to do, how we relate to one another, and the coordinates of democracy. The values, organizing, our political life, and indeed every feature of life. And the question I think is before us is what is our judgment of this? You can tell mine is not very positive, but that doesn't mean that you have to share that. But if you do share it, or even want to ask the question, the question is, is this who and what we want to be? Is this sustainable in every sense of the word? And what alternative table of values, what alternative ways might there be of organizing ourselves as individuals, as communities, as polities, and as a globe. And just to end on this note, it's important in case it seems just inevitable, and impossible, and overwhelming to consider challenging it. That this world is very new. It's just a few decades old. And when it was conceived by the neoliberals, everyone thought they were crazy. They just thought, Hayek, Friedman, these guys, they huddled in these little places like Mont Pelerin and others. You know, like having their conversations with one another but they were just a little group of radicals. Everyone else thought it was just nuts you know. Kantianism was the mode of the day, social democracy had deep and firm grip in Europe. I'm not saying that's what we can go back to, but the question is what it means to think of this as the permanent given way of the world when it came out of what were once considered crazy ideas and what has just become normal in just a very short period of time. Okay, I'll stop there and I'll take your questions. (audience applauds) Okay, now I'm sorry I called on a student, 'cause those are just huge and amazing questions. Thank you, that was just terrific. So first, I've been talking about neoliberalism in a very general way. I do think it's pretty much the organizing discourse of many parts of the world. But strikingly, once one said that, it's important I think to recognize that the world is not one. There won't be one global form as either resistance or alternatives. And what we might say the possibilities are in this country or in this region, will be different from what might develop say in Japas, or in Sri Lanka, or even in southeastern Europe. So I just want that as our preface. I do think that today many different forms of envisioning alternatives. They sometimes return to the idea of social democracy. Large nations, state administration of social democracy. But more often take some of the forms that you're talking about. Anarchism, localism, thinking about the commons, thinking about regaining regional and sustainable forms of local production that would combine inevitably with certain forms of global production. The one thing I would say does bind us together in having to think about alternatives is the problem of finance capital. It really rules the world now. It just really does. And unless that can be addressed it's not that we will necessarily have neoliberalism everywhere but we will have financialization and control and domination by finance capital everywhere. And it's not a sane or sustainable way to organize the world. It is as more and more perfectly reasonable, Nobel Laureated economists are coming to say out loud, an unsustainable way of organizing political economy. So Amartya Sen to Stiglitz to others. The question is how do you non-violently dismantle such an architecture that now binds our world, extracts wealth from it, doesn't generate much for human beings, and is as we know incomprehensible to most of us. And incomprehensible to most people who work in it. So, the big challenge, I'm not gonna give you a good answer. The big challenge is how to address that while also engaging in and honoring local practices that try alternatives to neoliberalization. And there are lots of them. There are more than we sometimes realize I think. There are sometimes you know, in organic farming collectives. I don't know how many I'm pointing, as if there's some in western Massachusetts. I've been teaching at Cornell, there's a ton there. I mean Cornell used to be the agribusiness capital of New York and now it's looking more toward cooperatives and sustainability and a whole bunch of other systems that pull not entirely away from a neoliberal set of metrics but to some degree. And then, there are just flat out resistance movements. What you see in Podemos in Spain, Syriza in Greece, Occupy in this country and elsewhere. And that's something else, but they are figuring these alternatives of radical democracy, fugitive democracy, or the commons and so forth. I personally am very attached to democracy and practices of radical democracy because I am personally very attached to the idea of human beings governing themselves. And above all now, when the planet is in such danger. Taking responsibility for this world, and figuring out how to get in control of the powers that we feel so out of control. That grammar was going nowhere. The powers that we feel we have no possibility of getting back into the bottle. And so if we don't have democracy as some feature of an alternative vision, if we go either toward technocracy or to an anarchist vision, which the latter has the principle in it of not being ruled. The idea of being able to organize the powers of human beings so that they are not destroying, and poisoning, and possibly finishing off the planet seems just out of the question. So that's one reason I'm so attached to democracy. I also think human beings just, it doesn't have to be any version of democracy that we've had thus far, but there has to be the principle that human beings together control the powers that otherwise govern them. Didn't really answer your question did it? It just spread it out. Wonderful question. So the question is, if the classic libertarians, even before neoliberalism was on the horizon in a big way, like Robert Nozick and even before him. You could even put Bentham in that category to some degree. If the classic libertarians understood that they were honoring the Kantian principle of human beings being an end in themselves, what would my response be to that? To me what's always been attractive about libertarianism is the idea of human freedom to craft yourself and to take responsibility for yourself. Not just to be on a treadmill or a fast moving train, which is what I think in fact what neoliberalism puts us on. If you don't self invest in certain ways, and you don't organize your competitive positioning according to where you think everybody elses is you won't survive. I don't think that's about self crafting and self organizing. So the attractive thing was that. The missing piece for me always is that libertarians disavow social power that organizes society that is not just in your own hands. There's never an avow, there's never an acknowledgement that we don't just arrive in this world with a completely clean... With an unpopulated room, but rather we arrive into and are born into a set of social powers and we know how to list them, gendered, racial, economic class, sexual etcetera. But that these are powers that we engage, they form us, we in turn contribute to them, but above all they are stratifying, organizing and often dominating. And the most important one in this case is the power of capital, and the libertarians, all they can do at that moment is say "Well yeah, tough luck" if you were born at the bottom. Or "Good luck to you." And I was struck by, who was it in the Republican debates. I think it was Trump who was explaining why he was not in favor of the minimum wage being increased. And it's kinda great when it's coming from the really rich, but why we need like super cheap labor. And what all the Republican candidates were saying and you know, the Democratic candidates are pretty close on this too was we need cheap labor, but everybody has the opportunity to climb their way up. Now put those two sentences together. We need cheap labor to be competitive and be productive, and survive in a global economy. We need that. But everybody's got the opportunity to become Donald Trump. Well you can't... The only way to make sense of that is that a few might make it. But you're gonna have most of those folks at the very bottom and that is an imperative essentially, Trump and the others were saying of our economy. We must have that super cheap labor. So libertarianism to me falters right there on that problem of disavow of the social powers that keep the whole thing going. So it's a long discussion that you and I would need to have including a long empirical discussion about what we understand to be causal where. So is increased literacy and removal from poverty by some, directly related to neoliberization? Or to something else, so we need to ask that question. That's an empirical question. Secondly, what do we do with the fact that one in 11 people on the globe now live in what are officially called global slums. Without work, often without potable water, generally without viable sewage or any other kind of hygiene. And have essentially become the castoffs of the world's economy. That number is growing. The global slums are, I mean as anyone who's studied the Favelas, or Mumbai, or even some of the ones that are popping up around the Newark airport. Those numbers have grown exponentially in the past 20 years. So we have several different phenomena at once. We have microcredit schemes, classic neoliberalism, that are developing possibilities in certain settings in Sub-Saharan Africa for women who would otherwise not have those possibilities. On the other hand we have growing, I just want to call them castoffs from the economy as a whole. Who may be surviving in some cases. But it's not a human life. I'm just gonna put it really bluntly. In any sense of the word, It is not a life with future, with meaning, it is not a life with what we consider to be the most basic attributes of humanity. I wanna call it a post humanism of a very severe sort. So we have that. We have what everybody from Thomas Piketty to Krugman to others have documented now extensively. Which is just the tremendously growing inequality globally as well as in the richest country in the world. So you probably know the figures, but we today have in this country a very small percentage experiencing the greatest benefit from wealth growth over the past 25 years. And effectively a sinking middle class. A middle class that is sinking to a degree greater than we were aware of or could feel as long as consumer debt was softening that and as long as public debt was softening that. Post 2008 it's pretty obvious. I think that the fact that real incomes are going down across the middle class and down into the working class and poor. So well documented now that on the one hand as you say you can point to who appears to be being lifted, but on the other hand I'm pointing to where the losses are, where the growing inequality is. Moreover, if we just stay with the U.S. we have this problem. Which is that sinking middle class isn't just losing real income. It's not just a numbers problem. They're losing access to upward mobility. Social mobility has essentially frozen in the past 20 years for 80% of the American population. People don't come up and out of their class anymore as they did for a good 100 years prior to neoliberalism. So again, I don't want to put all of that at the feet of neoliberalism. There's more going on, there are more factors in terms of expanding economies, contracting economies, and so forth. But I do wanna point to the fact that a lot of that social mobility has been lost, why? Because access to free public higher education has been eliminated by neoliberalism. That means that kids who in the post World War II period, came out of poor or lower middle class families and were eligible for college, could go to college, get degrees that allowed them to become teachers, engineers, professionals, and many other things. And as it were, lived the American dream. And that was an extraordinary period. It was you know, the kind of, I think one of the greatest things that the U.S. ever did was build it's high quality public university system. That system has been devastated, I mean just demolished over the past 20 years. And with that demolition has come, the demolition of social mobility for a class that doesn't have another way up. And what you see instead is of course the tremendous debt burden that many families and students have that just grinds them down. Or students choosing not to go to college at all. Or students choosing, or students and families choosing for-profit colleges which turn out not to offer them either education for citizenship or development or viable jobs. Problem is I'm taking advantage of you. You don't have the mic and I do. I don't think there's a lot to say for neoliberalism. That's what you really wanted me to. You know, I just think even the people who used to point to China, like, "Whoa, look at those growth rates." When China combined authoritarian state politics, which I'm trying to suggest are like at the essence of neoliberalism. With a free market erratically deregulated economy with controls in certain, I mean it's like the neoliberal dream. Look at those and phenomenal growth rates and look at what's happening to China right now. I mean it's terrifying how fast those growth rates are sinking. And what it may do to the global economy as it goes. So neoliberalism is great for producing bubbles. It's great for producing miracles. Are they sustainable? I don't think so. So yeah I've thought about it a lot and I'll try to be brief. I'm not gonna tell you all my thoughts. But I've two really different things to say. On the one hand, I think the danger is that academic freedom can wither rather than being crushed. And by wither I mean not be exercised because scholars are so concerned about enhancing their capital value, and their prestige, and their reputations that A they play to the center, and B they just keep their heads down and do their research. So that's my worry, is that, and especially if the kinds of metrics that British neoliberalized academia has used for a long time are now starting to come here. And they are to the public. I don't think the are to the privates. But these metrics involve measuring every little bit of research that you do, where it's published, what its significance is, and what its quote unquote impact factor is. And that means what your rating and your ranking is. And if you're chasing that because you have to, because your department will sink in value if you sink in value, and if your department sinks in value your university will sink in value and then you won't get the funding, and you won't get the graduates. That wheel is a terribly dangerous wheel for academic freedom. So that's one thing I want to say. There can be attrition from fear from concern with being just a bit of academic human capital and from that particular wheel. But I want to say this too. I do believe that many of us, especially those of us with tenure and professorships named after various wealthy classes in the past, have enormous power to exercise our freedom and should continue doing it. I mean just enormous. And I do think that the capacity of academics to engage in critical thought in the classroom, in our work, in our seminars, in rooms like this is huge. And to spend our time saying that we don't have it to me is a waste of time. That said, to spend our time tracking the ways in which it's diminishing or being constricted seems really important. And a lot of people in my immediate world in the University of California are trying to do that kind of tracking. Where is shared governance dying and being replaced by managerial governance? Where is the fear of not offering students what they need for vocational enhancement in college? Turning our critical analytical spaces into something else. So there are lots of ways that attrition is happening, but I'm also suggesting that we have some capacity. We're not cogs in a machine. Yeah you wanna say something? - Okay, I'm just saying. I'm not saying we have total agency, and total freedom. I'm saying that the only thing that's ever made a difference in this world, ever, in any fight for a better world or for justice is human beings who could look around and say "Ugh it's all dark, there's no hope. "I'm gonna go to sleep and pull the covers over my head." Instead deciding to find others, stand with others, take the spaces that they have, use the voices that they have. And I know this sounds like whatever. I know what it sounds like. But I just think it's against the idea that there's no hope and it's a structural analysis that just shows you how every door is closed, that we must press. Because that is the mantra of neoliberalism. You will recall, some of you, that the so called TINA, There Is No Alternative was what the Thatcher regime sought to bring about. Just produce a world in which there is no alternative. As long as we're pushing back against that, we still have academic freedom. I'm gonna give short answers. I'm gonna take two questions at once. Great, so two really different questions. But I took them both so that I would try to use half the amount of time that I usually do. So on the one hand, how do we understand the exponential elaboration of support services? Well, institutions are supposed to be becoming lean and mean and vocationally oriented. Remember, marketization doesn't mean monetization. Economization does not mean everything is simply about the direct inputs and outputs that have to do with money. Why do I say this here? Students understood as needing various kinds of support services. Whether for learning disabilities, for crisis support, for emotional support. Who in the neoliberal world doesn't need a ton of that? And managing anxiety. And for various other kinds of things are all inputs into human capital. And part of what as we know, colleges and universities are selling and part of what develops their rankings, largely what develops their rankings is the SAT scores now increasingly gamed by universities themselves that keeps those rankings high. But what in particular produces the sort of total value of the university that promises to produce the maximized value of the human being is all of these things that build its human capital capacity. And I don't think it's just about litigiousness. Many people think "Oh God, these universities "are just engaged in all of this stuff that's." Yes there's a lot of infrastructure in universities now that has to do with litigiousness. But there's also a lot that has to do with producing maximized human capital that is resting on these support services. If we're just gonna talk about political science you and I are both just gonna be pessimistic and miserable. Because it is a completely neoliberalized discipline from methodology to epistemology to what we mean by a professional political scientist. How young graduate students are being produced, taught in their first year to write publishable papers before they even have a thought. How they're being generated, what it means to entrepreneurialize your research. Which basically means repackaging in six ways for six different articles that are all the same but look like six different things on your resume. But also as you say, to have public choice theory, rational choice theory, now even as it's morphing into its other iterations and supposedly becoming more delicate and nuanced. It's discovered emotion as opposed to just reason as the basis for certain human actions. But the whole move from behaviorism to formal modeling is perfectly comports with the economization of political science. It basically means that you take a model of human beings as economic actors and apply it to every domain of political life. And in particular it means that we think not about citizens who act, who engage their freedom, who protest, who resist, or who speak. But we think about them as essentially creatures you can incentivize, motivate, target, subdivide into sub electorates in order to produce the facade of representative democracy. So that was just one example. But I'm just agreeing with you. That said, I do think non-quantitative and qualitative methods, historical methods, and careful use of quantitative methods with a brain that's critical of neoliberalization and certain kinds of formal modeling can produce terrific knowledge. So once again I'm just gonna say it's not easy and I would not wanna be a graduate student now. I shouldn't be saying this to you all. I mean it's just not easy. But I do think it's still continuously a matter of what do you really care about, why did you come into this work in the first place, how do you make it work? And I'm not saying it's magic, I'm not saying that you know, you can't be thinking about how to get a job, and how to publish and so forth. But I do think there are places of resistance. Okay, let me take two last questions and we'll be done. I know, you wanted to shut me up but I'm gonna. - [Voiceover] I don't wanna cut you off. - No, are we done? Oh yes, you have a question. Let's hear you. One, I don't think it's historically constant. My own view is there's not one way of conceiving the distinctiveness, the beauty, and the tragedy of being human. There have been so many waves across so many cultures, so many places, and so many epochs. So what the ancient Greeks in the west, or the early Christians in the west think, and what you might find. The Hopis understand as the essence of humanity and what you might find. Just pick another people, it's going to vary, and it's gonna vary in it's relationship to the earth, and to animals, and the planet, and soul, and spirit, and religion, and so many other things. So I don't think there's one definition. And I don't think we ever should try to have one definition. The problem of single definitions of human is they almost always excluded some humans. So for so long in the west, man was defined in a whole set of ways that didn't accidentally but inherently excluded women from humanity. And certainly in the whole history of racialized and colonial conduct emanating from Europe. The human, the humanness, the humanness project of Europe. The fulcrum of humanity in Europe had as its other everything else that was outside. So it's dangerous I think to say this is what being a human is. But to continue to ask the question, "What do we want to be?" What do we yearn to make of the human being and what responsibility might humans finally take for their uniqueness, their extraordinary powers to create worlds? No other animal makes rooms like this. And yet, no other animal makes the kind of devastation that human beings make. So to reckon with that, I think your question is just gorgeous. So we stop there. Thank you. (audience applauds)


Fiscal localism

Local Farmer's Market
Local Farmer's Market

"Buy local" or local purchasing is the most visible face of fiscal localism. There are more complex institutions (both new and well established) that contribute to a community's ability to flourish. Institutions like credit unions, CDFI's (Community Development Financial Institutions), and local currency or complementary currency all can contribute to making communities more resilient and wealthy.

Local currency has been in the news most, with journalists citing the Berkshares in Massachusetts, and the Ithaca Hours in Ithaca, New York. Beyond these salient examples, there are thousands of local currencies all over the world.[2]

Fiscal localism is rooted in the concept of decentralization. The creation and maintenance of a regional economy is supported by communities who believe that their community is economically better off sustaining itself rather than being part of and relying upon a larger economy, such as a national economy or the global economy. This is a movement against the increasing globalization of all economies around the world. The main tenets of fiscal localism include buying products that are made locally and using a currency that is unique to that local economy.[3] This allows a community to grow at a controllable and sustainable rate by supporting farmers, shopkeepers, and service providers of a community. Consumers in these communities are more informed about how their foods and products are grown and made. Using a unique form of currency allows a community to determine its economic growth and health more accurately than using metrics of a national economy to gauge economic health.[4] Taxation in these communities is emphasized at the local level and low importance is put on local taxes. These communities want to separate themselves from the larger national economy so they must rely on revenue generated from local taxation. Banking is also preferred to be done on a local level. Communities that follow fiscal localism would rather have one local bank than be customers of a massive bank that does business across the country as well as internationally.

Local currency

Unique currencies used by local economies are often backed by a national currency. Totnes, England is a town that began using the Totnes Pound in 2010.[5] "The Totnes Pound is backed by the British Pound sterling at a one-to-one ratio."[5] The idea behind using a unique, local currency is to keep money flowing through the community while preventing money from leaving or relying on money to enter the community. This allows a community to become self-sufficient, have enough funds to create an energy source for the community to use, and eliminate transportation costs for bringing products into the community. A large reason Totnes wants to become self-sufficient is to decrease its dependence on the use of oil. The town believes that it is better off in the long run if it is able to operate without relying an oil, which is a finite resource. Multiple towns have followed in Totnes' footsteps and established a local currency. Brixton, Stroud, Bristol, and Exeter are towns in England that have established currencies of their own.[5] A few towns in the United States have also adopted unique currencies. Berkshire, Massachusetts and Ithaca, New York have implemented Massachusetts BerkShares and the HOUR, respectively. While a BerkShare is worth $.95 US dollars, the HOUR is not convertible to US dollars or any other type of national currency.[5] A British Quaker colony in Pennsylvania created and used the Pennsylvania Pound in the 18th century, but fiscal localism failed for the colony and the currency was abandoned. Lorenzo Fioramonti, director of the Centre for the Study of Governance Innovation at the University of Pretoria in South Africa, believes that the European Union would be more stable if it used multiple local currencies combined with a "digital euro".[5]


Proponents of fiscal localism argue that paying higher local taxes and lower national taxes will help communities grow and thrive. A report from The TaxPayers' Alliance states that a decentralized form of taxation leads to a more efficient public sector.[6] This report references a German econometric study which found that “government efficiency increase with the degree of fiscal decentralization”.[6] Reasons used to support local taxation include responsiveness, cost efficiency, incentives, and accountability. The Spanish Institute of Fiscal Studies conducted a study over a period stretching from 1972-2005 using data from 23 countries regarding taxes. The study found that “reducing the share of central government in total tax revenue by one percentage point boosts long-run GDP growth by about 0.06 per cent per annum.”[6] Setting local taxes is complicated because too high of a tax rate will lead to taxpayers refusing to pay while too low of a rate will not give the local government enough funds to function and operate effectively. These taxes are separate from state and federal taxes and are not set at the state or federal level. Increasing local taxes allows a community to reinvest revenue generated from the taxes into public institutions or programs that help the local community. Residents are able to physically see and experience where their tax money is going and how it improves their lives.


Modern banks have become monolithic institutions with thousands of branches in their respective countries of service. This globalization of banking institutions and the banking practices used by these organizations is the antithesis of what fiscal localism is about. Toby Blume argues for a shift in the banking system in his essay "Changing the Debate: The Ideas Redefining Britain."[7] Blume writes, "A more localised banking system - which is more common in other countries but we don't have in the UK - provides a way to connect surplus capital with productive purpose (for the mutual benefit of savers/investors and borrowers)."[7] Advocates for fiscal localism argue that the banking system should be restructured to accommodate the needs of smaller, local communities. These communities that are built around the tenets of fiscal localism want to have local banks that have consumer bases which are limited to the population that is geographically located around the bank. This allows the bank to know its customers on a personal level in order to determine the risk of giving a loan out to someone who lives in the community. It also allows the bank to use its excess capital to invest in services and businesses that are located in these towns, which in turn spurs the local economy at a consistent growth rate.

Local exchange trading systems

A local exchange trading system (LETS) is composed of local members that want to trade goods and services with other members in the group. These LETS use a unique local currency on which all trade is based upon. Those who are in LETS believe that they benefit both the members and the local community due to the organized nature of these LETS. The five core traits of a LETS include “cost of service, consent, disclosure, equivalence to the regional currency, and interest-free.”[3] Member transactions through a LETS do not have to be solely monetary. A purchase can be repaid through a service performed for the other member involved in the transaction.


A recent, and perhaps the most widely known, push for fiscal localism occurred when the United Kingdom voted to leave the European Union in 2016. The European Union is an economic union that was formed in order to allow free movement of resources and capital between the countries that compose the organization. Discussions of the United Kingdom leaving the European Union have gone on for many years, but was not made official until the public of the United Kingdom voted to leave. Many of those who were proponents of leaving the European Union wanted to do so for economic reasons. Nigel Farage, one of the most prominent endorsers of the United Kingdom leaving the European Union, wrote, "We know that the European Union is hell bent on further, deeper centralisation."[8] The disdain that Nigel Farage has for centralization is rooted in both economic and political reasons, but the economic reasons lie in his desire for increased fiscal localism. Many citizens of the United Kingdom share the same negative view of centralization. This resulted in the voting populace choosing to leave the European Union. This historic decision of the United Kingdom is an example of a community choosing to reject the increasing globalization of economic institutions and policies. However, many citizens of the United Kingdom did not want to leave the European Union. These opponents of Brexit preferred to remain in an organization that encouraged wealth and services to move freely among countries within the union. Then Prime Minister of the United Kingdom, Theresa May said in April 2016 that if the United Kingdom left the European Union, "There would be little we could do to stop discriminatory policies being introduced, and London's position as the world's leading financial centre would be in danger."[9]

See also


  1. ^ "Fiscal Localism On Rise In Germany".
  2. ^ "Wayback Machine". 13 September 2017.
  3. ^ a b "Fiscal Localism". Investopedia. Retrieved 27 February 2017.
  4. ^ "Fiscal Localism". Investopedia. Retrieved 27 February 2017.
  5. ^ a b c d e Moore, Katie. "The Totnes Pound and the American origins of Fiscal Localism". Yester. Retrieved 27 February 2017.
  6. ^ a b c "The fiscal and economic case for localism" (PDF). Retrieved 27 February 2017.
  7. ^ a b Blume, Toby. "The future of localism must be economic". Retrieved 6 April 2017.
  8. ^ Farage, Nigel. "Why we must vote LEAVE in the EU referendum". Retrieved 5 April 2017.
  9. ^ Rampen, Julia. "The 7 brilliant arguments Theresa May once made against Brexit". Retrieved 6 April 2017.

External links

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