Democratizing Finance to Defeat the Far Right: Part Two
Michael McCarthy and Quinn Slobodian in conversation
The Master’s Tools, cover (detail) by Jonathan Pelham.
This is the second installment of a two-part interview. Read part one here. The text has been edited from a Zoom conversation between Michael McCarthy and Quinn Slobodian, with contributions from Boston University seminar participants, held March 27, 2025.
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QS: The Right has learned from the Left, particularly from Antonio Gramsci – building a long-term movement in the non-state ideological space to normalize and mainstream ideas that once seemed radical. Along these lines, much of your work focuses on proposals for how the Left can reclaim, reshape, or seize finance. I’m curious why the Right seems to have been more successful so far. Is it because the Right’s vision of restoring hierarchy aligns more naturally with the way finance operates? Or is that more of a contingent factor? Can finance also be harnessed in ways that support leftist, egalitarian projects?
MM: I absolutely think it can. The way I see it, the Right has been far more successful on this issue largely because, in politics, the Left doesn't have many strong supporters in Congress for it. There are a few, of course – people like Rashida Tlaib, Bernie Sanders, Alexandria Ocasio-Cortez, and some of the other squad members. They’ve put forward bold proposals for democratizing finance in various ways.
In 2020, Rashida Tlaib proposed the Public Banking Act, a proposal aimed at creating a federal framework to support the establishment of public banks at various levels, ranging from local tribal banks to municipal, state, and even federal banks. Although the idea gained some support, it didn’t get off the ground. However, in December 2023, Tlaib reintroduced an updated version called the Public Banking Act of 2023, which includes significant modifications to the original bill, particularly around the governance of public finance.
The main governing innovation in the bill is that banks with more than $500 million in total assets would be required to adopt a democratic governance structure, a Governing Assembly. This assembly would set the broad priorities of the bank over multi-year investment cycles, generate the public bank’s core mandates, and provide guidance to the bank's management regarding the types of programs it pursues. The assembly would ensure adequate representation from and democratic accountability to the residents of a specific geographic area, potentially through the use of sortition.
When considering how to democratize finance, we often envision one of two models. The first is the typical left-wing idea of nationalizing existing financial institutions and running them through state bureaucrats. This essentially involves taking over private institutions. The problem with this approach is that the state itself isn’t truly democratic. Lawmakers and government officials often act in ways that don’t reflect the will of the people but rather are influenced by various interest groups. As a result, there is little to suggest that the state-driven financial institutions won’t end up being just as oligarchic as the private ones.
The second model, often associated with movements like Occupy Wall Street, leans toward more grassroots, consensus-based approaches. This model, reminiscent of the participatory budgeting experiments in Brazil, involves communities voluntarily coming together to make collective decisions about the management of resources, such as public finance. This approach aims to create more genuine democratic control over financial systems via large assembly-based processes.
QS: Participatory budgeting – it's something we have right here in Cambridge, Massachusetts.
MM: Yes, but that iteration has significant limitations. A major issue is self-selection bias. The people who show up are often those with a particular interest in the process, or sometimes they’re just people who enjoy attending meetings.
QS: With participatory budgeting there is also the problem of scaling up. How would your sortition proposal work on the global scale?
MM: While we may not necessarily need another World Bank, you could theoretically imagine a global entity, imagine a democratic World Fund or something similar, being governed through random selection of people worldwide. Logistically, it would be a challenge to coordinate such a large, diverse group, but technically, it’s possible. However, as the scale increases, the likelihood of being selected to participate diminishes, which introduces a democratic consideration. If you think about a global body like our imaginary World Fund, for example, the odds of any one person being selected to a board of 200 would be extremely low – extremely close to zero. That raises a question: do we want institutions where the chances of participating in decision-making are so slim? People might feel a disconnect if they never have a realistic chance of being involved in these important decisions.
This is where the concept of subsidiarity comes into play, which suggests prioritizing governance at smaller scales where people are more likely to have a meaningful role. But, ultimately, the governance scale should always be determined by the specific problem the institution aims to address.
I think about scaling in terms of balancing the benefits of broader governance with the need to ensure ordinary people can reasonably expect to be involved in these decisions. This could apply at both large and small scales, but the key is to design the system so that people have a tangible opportunity to participate. For people to come together to deliberate over a fund's portfolio, programs, and how public investment can serve communities rather than the bottom line alone. However, even in this ideal scenario, these institutions will still face challenges. Public democratic funds, like any financial institution, will be subject to economic downturns, and they might struggle to generate enough return to remain financially self-sustaining.
In the event of a crisis – say, a program for low-income housing that ends up costing more than expected and strains the fund's balance sheet – how would these public funds respond? The beauty of democratic governance is that people can collectively deliberate and discuss these challenges. In moments of financial strain, the community can come together, talk it through, and determine the best course of action.
QS: Some might wonder how, in a process of sortition, do you ensure that non-experts make the right decisions? In other words, how do you balance the need to generate capital for future generations while also avoiding short-term decisions that may harm long-term sustainability, particularly when it comes to funding social welfare programs?
MM: Many people are nervous about random selection and the idea of bringing together a diverse group to make collective judgments, especially in finance. The concern is, if people don’t know anything about finance, why would we expect them to make good decisions about something as important as where a large fund should invest its money?
Let me address this in two ways. First, research shows that when you bring together a cognitively diverse group – people with different perspectives, backgrounds, education, and life experiences – they tend to make more innovative and well-rounded decisions than a group of people who are demographically similar and all highly educated or experts in the field. For example, a group of Harvard economists may seem more qualified, but a randomly selected group of people who represent a broad spectrum of society can often generate much more fresh, insightful judgments. This idea is supported by cognitive science, which shows that diversity of thought leads to better decision-making. William F. Buckley famously said he would rather be governed by the first 100 names in the phone book than by the graduating class of Harvard University. I agree with him!
The second point, however, is where things get tricky: how do you manage governance through random selection? It's not just about gathering random people and giving them a question to answer. There are experts involved in the process who help frame the questions and guide the deliberations. This is where the challenge lies – ensuring that the process isn't dominated by facilitators or experts who have their own agendas. The key is to ensure that the decisions are genuinely made by the randomly selected people, not by those managing the process. The effectiveness of this method hinges on good facilitation techniques, ensuring that the facilitators support the process without hijacking it.
QS: This is related to the far-right’s preference in Europe for forms of direct democracy, such as referendums, which aim to bypass bureaucracy and the narrow perspectives of political parties in order to reflect the “true” will of the people. Could you explain how what you’re describing differs from referendums or plebiscites?
MM: Voting isn’t the most robust form of democracy. It might sound strange to some, but voting often leads to weak democratic outcomes. It is, as the historian Bernard Manin shows, essentially an aristocratic mechanism. True democracy requires deliberation from within the demos. Deliberation is how people discover their preferences: through discussions, considering different perspectives, and thinking collectively. That, to me, is at the heart of democracy.
I’m quite skeptical of referenda for this reason. They tend to gather mere snapshots of public opinion, which are often influenced by the small bubbles people live in, the social media accounts they follow, and the hype surrounding certain issues. Referenda may swing in different directions – sometimes left, sometimes right, sometimes somewhere in between. So I’m not suggesting that referenda always generate right-wing outcomes, but I do think the results they produce are often distorted compared to what you’d get through a more deliberative process.
At the end of the day, I believe in the power of democratic deliberation. I trust the collective judgment of people in these deliberative bodies more than the quick, populist opinions shaped by politicians or media campaigns that lean into nativism to win votes. The process of deliberation could act as a safeguard against reactionary, scapegoating responses. It’s a space where people can process and respond thoughtfully to difficult issues, rather than resorting to easy solutions like blaming immigrants.
QS: There seems to be a lot at stake in whether the contemporary U.S. Right is genuinely interested in reining in and democratizing finance in the way you're describing. You mentioned people feeling let down by the fraying of the privatized welfare contract, which was sustained when there were still large manufacturing entities in the U.S. But in the absence of that, what do you think? Do you think the Right in the U.S. is serious about tackling finance, or is it just lip service, or is it even an issue for them at all?
MM: I would distinguish between the Right as political organizations and parties, versus the people mobilized into those coalitions as ordinary voters. As for the Trump wing of the Republican Party, I don’t think they have any genuine interest in democratizing finance. If they do, it's through bizarre crypto schemes that have nothing to do with actual finance or democracy. As for the people who are mobilized into that coalition, I think there’s a stronger case. If you look at recent polling on trust in American institutions, which compares party affiliation and trust in various institutions – the Right and Left are sharply divided on many, such as higher education and churches. But when it comes to large corporations and banks, there's a striking convergence. Both the Right and Left seem to share a deep mistrust of large corporations and banks. You might argue that there’s some anti-Semitism at play on the right when it comes to the suspicion of finance, but I think the main issue is simply that people dislike the super-rich elites who dominate them. So, in terms of public opinion and sensibilities, there’s a potential base for building a non-reactionary alternative on this sentiment.
One other thing about the Right and democratizing finance – over the past decade, there’s been growing interest in random selection processes in political science and economics. These processes, such as those used in Ireland’s abortion referendum or in France under Macron after the Yellow Vest protests, have been researched extensively. These experiments show that random selection processes can help people discover their preferences more effectively than polls, which often capture only people’s top of mind opinions. Research has shown that these processes lead to more rational and considered judgments, and they can foster meaningful deliberation. In theory, they could bridge political polarization, allowing both Left and Right to engage in more productive conversations and discover either common ground or points of disagreement. So, there’s very real potential here to engage the Right, or at least working-class people in that coalition, in democratizing finance.
QS: That’s also a useful way to think about preventative measures, especially against insurgent right-wing movements – at least that’s what Macron had in mind. Of course, these methods have had mixed results. As an Americanist, you focus on the U.S. but when we talk about finance, we're often talking about two things: U.S. leadership in the global economic system and dollar dominance, with the dollar as the global reserve currency. Given this, it's easy to think of finance, the U.S., and the dollar as interconnected. But it seems like we’re at a moment where that set of power relations – America, the dollar, and global finance – is starting to fray. Can you imagine a scenario where global finance decentralizes, and the U.S. is no longer the central player in the global economic orchestra, as Keynes once put it? Could this decentralization create more openings for either the right or the left?
MM: On one hand, it’s true that the U.S. is at the center of the global financial system today. But on the other hand, there are also regional financial systems. For example, China has a massive financial sector that acts as the center of finance for its region. Even in Europe, while the financial system is closely tied to the U.S. through the dollar, there’s still a distinct European financial system that primarily operates through the City of London. So, I think we’re already seeing shifts in the global financial system, with regional financial sectors emerging as key players, often providing the financial services that firms and states rely on, beyond just Wall Street.
It’s also interesting to compare the U.S. and the UK in this context. A key difference is that the City of London is much more internationalized than Wall Street. While Wall Street is part of the global financial system, it primarily focuses on investing in U.S. companies, the U.S. housing market, and other U.S.-based assets. In contrast, the UK’s major banks provide financial services to countries and corporations outside the UK, making it a more globally oriented system.
We’re seeing some fascinating variations across the global financial landscape, which creates different opportunities and dependencies in finance. This, in turn, strengthens the argument for democratizing finance in the U.S. – American financial institutions are somewhat captured by the domestic market, since their profits largely come from U.S. investments. For example, during Brexit, many banks threatened to move to other locations because they weren’t heavily reliant on the UK market. And therefore their threats could be backed up. They weren’t bound by the regulatory environment, which is not the case for U.S. banks. That internationalization versus domestic concentration creates different opportunities for financial reform in different regions.
QS: In the end, it seems that the demand for change is there, but the key question is whether political actors will respond to meet the people’s desire for these changes.
MM: Absolutely. And while I don’t think ordinary people are necessarily calling for financial funds governed though randomly selected assemblies, they do recognize that the current financial system is a complete disaster. And I think that frustration is a starting point to organize an alternative.
This is the second installment of a two-part interview. Part one is available here.
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Michael A. McCarthy is an Associate Professor of Sociology and Director of Community Studies at the University of California, Santa Cruz. He is the author of The Master’s Tools: How Finance Wrecked Democracy (and a Radical Plan to Rebuild It) (Verso, 2025). His book Dismantling Solidarity: Capitalist Politics and American Pensions since the New Deal (Cornell, 2017) was awarded the Paul Sweezy Book Award as well as an honorable mention for the Labor and Labor Movements Book Award. He has written for the Boston Review, Jacobin, Noema, and the Washington Post.
Quinn Slobodian is the Co-Director of the History & Political Economy Project. He is professor of international history at the Frederick S. Pardee School of Global Studies at Boston University. He is the author of Globalists: The End of Empire and the Birth of Neoliberalism (Harvard, 2018) and Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy (Metropolitan Books, 2023). His most recent book is Hayek’s Bastards: Race, Gold, IQ, and the Capitalism of the Far Right (Zone Books, 2025).