It was just a montage of words uttered over a video in the summer of 2018. Soon the words went viral. They helped unseat a Wall St-friendly Democrat – one primed to be the next Congressional leader. They were uttered by Alexandria Ocasio-Cortez.

This race is about people vs money. We’ve got people. They’ve got money. A New York for the many is possible. It doesn’t take a hundred years to do this. It takes political courage.

She was right. It did not take a hundred years. All it took was one summer, political courage, a big idea – The Green New Deal – and hard graft. A Green New Deal would subordinate the financial system to the interests of society and the ecosystem, and help transform the economy away from its addiction to fossil fuels, she argued.

The big idea, her hard work and courage were all that was needed to harness latent power: the power of the people of the Bronx.

Her story will underpin the theme that follows. Citizens’ latent and untapped power in countries with sound taxation systems to hold financial elites to account – and implement a Green New Deal. It can be used to transform the balance of power between the people and the private finance sector. It is power that lies in abeyance, repressed by the dominant moneyed class. But suppressed also by the narrow, myopic view that we, and our politicians, have of the potential economic power of citizens.

Video explainer on the Green New Deal

To harness citizens’ power, it is important to understand that taxpayers have agency over global financial markets. Around the world, taxpayers subsidise, embolden and enrich centres of financial power like those of Wall St and the City of London.

The bank bailouts after the Great Financial Crisis demonstrated that citizens and their publicly financed institutions have the power to protect capitalism’s rentiers from the discipline of the ‘free market’. Thanks to the backing and firepower provided by millions of honest, taxpaying citizens, central banks deployed immense financial power and bailed out the globalised banking system – stemming a cascade of debt deleveraging that could have contracted the money supply, credit, and economic activity and deepened the crisis.

Thanks to taxpayers, central bankers prevented another Great Depression. It was a great power deployed in the name of citizens, but without their authority – or even their knowledge.

To grasp and deploy this financial power in the interests of society and the ecosystem, citizens need to understand that this was and is ultimately our power. It is latent power, not used by citizens to defend the public interest, but by technocrats to defend the interests of private wealth.

To grasp and deploy this financial power in the interests of society and the ecosystem, citizens need to understand that this was and is ultimately our power. It is latent power, not used by citizens to defend the public interest, but by technocrats to defend the interests of private wealth.

Money and debt

The reason for our political impotence can be found in the fog and mystery surrounding the creation of money and the operation of the monetary system. Thanks to the economics profession’s neglect of money, debt and banking, there is a great deal of misunderstanding and confusion about money and the financial system.

Arguments rage about whether money is just ‘created out of thin air’ – or whether gold or bitcoin are real money. Whether bankers and/or governments can just ‘print’ money ad infinitum. Or whether there are limits to the printing of money. The ignorance and confusion is probably no accident. It helps protect the private finance sector from scrutiny: ‘all the better to fleece you with’ to quote the wolf in the fairy tale.

Sensible people (including the Bank of England) agree that money, as Joseph Schumpeter explained, is nothing more than a promise to pay, as in, ‘I promise to pay the bearer’. As such, money is a social construct, based on trust or promises to pay and upheld by the law.

When someone applies for a loan from a bank, the money is not in the bank. Instead, licensed commercial banks ‘create’ money every time a borrower promises to pay. They make the loan by entering numbers into a computer, and (digitally) depositing funds into a borrower’s account. The borrower promises to pay back the money created by the banker. As guarantee the borrower offers collateral, signs a contract, and agrees to pay interest on the loan.

For that trust to be upheld, the institutions that create money (licensed commercial banks) are supported and regulated by a publicly backed central bank issuing the currency. Regulation ensures that trust between banker and borrower is enforced.

Private bankers can only create new money and operate effectively as part of the monetary system, which includes a central bank. While commercial bankers can digitally create new money at the bidding of a borrower, they cannot print currency or mint coins. Only the central bank can do that. The central bank’s great power is to issue the currency – sterling or the dollar or the rupee –in which new money is created. And to help determine the value of the currency.

That power can be exercised by central banks only because of the collateral backing the currency they create. That collateral is made up of citizens’ tax revenues. The more taxpayers that back the currency, the sounder the tax-collection system, the greater the value of the currency.

This process is illuminated if we compare the collateral that backs up the US Federal Reserve with that of Malawi. The central bank of Malawi, like the Federal Reserve, issues a currency. But Malawi has far fewer taxpayers than the US.

Thanks largely to colonialism and to IMF policies, Malawi also lacks important public institutions: an independent central bank; a sound tax-collection system; a system for enforcing contracts or promises to pay (criminal justice); and a well-regulated accounting system for assessing assets and liabilities. Consequently, Malawi’s currency – the kwacha – has little value compared to the dollar.

Even worse, due to the absence or weakness of public institutions, Malawi is reliant on other people’s money – obtained via other monetary systems. Access to foreign monetary systems mostly takes the form of loans in dollars, sterling or yen – that are heavily conditional. While some of the money may benefit the Malawian people, the cost of repayment to foreign financial institutions invariably takes its toll on the nation’s financial resources, its human and ecological assets.

It is the lack of monetary autonomy provided by sound public institutions, including a tax-collection system, that renders citizens in countries like Malawi relatively powerless, and vulnerable to predatory foreign lenders.

It is the lack of monetary autonomy provided by sound public institutions, including a tax-collection system, that renders citizens in countries like Malawi relatively powerless, and vulnerable to predatory foreign lenders. It also explains how and why poor countries remain dependent and subordinate to rich countries.

Regrettably the IMF and World Bank actively discourage low-income countries from investing in the vital public institutions essential to a sound monetary system – one that would restore their financial and economic autonomy.

Citizens in countries with sound monetary institutions and a tax-collection system enjoy considerable potential power and agency over the globalised financial system.

Taxpayers – not banks – underpin the financial system

Understanding how taxes prop up the value of a nation’s currency for private financiers is a first step in understanding citizens’ potential power. The world’s mobile financial speculators and rentiers prefer to deal in currencies underpinned by stable public institutions, financed and backed by millions of taxpayers. While of course there is trading in many emerging market currencies, speculators prefer to hold sterling, dollars, euros and yen. These currencies are backed by strong economies. But their value is ultimately derived from citizens – willing, honest, law-abiding taxpayers – who provide the revenues that underpin the currency.

Taxpayers do not just pay direct and indirect taxes every day, month or year. Because new taxpayers are born every day, citizens will pay taxes for decades into the future. If our publicly financed state institutions remain stable, tomorrow’s new-borns will go on paying taxes into the future.

To understand the duration of taxpayer power, it helps to look back at the history of the British financial system. Back in 1748 the British government issued perpetual bonds, which were debts with no maturity date for repayment, but which paid interest to lenders at 3 per cent each year. The government had no difficulty selling these bonds (known as ‘consols’) to the public. Public confidence – that the British government would fulfil its obligations to pay interest on the loans in perpetuity – was high. That confidence was justified, as interest was paid on the bonds each year until finally they were redeemed in 2015.

No other asset has that kind of long-term, safe backing.

Ambitious and manipulative Becky Sharp in Thackeray’s classic nineteenth-century UK satirical novel Vanity Fair wished that she could

‘exchange my position in society and all my relations for a snug sum in the Three Per Cent Consols…for so it was [wrote Thackeray] that Becky felt the Vanity of human affairs, and it was in those securities that she would have liked to cast anchor.’

Becky’s envy derived from the security granted to those with funds enough to invest in the British government’s debt – known then, and for several centuries, as Three Per Cent Consols (shorthand for Consolidated debt). On an inheritance of £10,000 wealthy young women of the nineteenth century could live on the tidy sum of £300 a year; £25,000 would generate a comfortable £750 a year.

Public debt is an asset that earns income – just as a buy-to-let property earns rent for its owner. But while a buy-to-let investor has to sweat to maintain, advertise and rent out the asset, debt earns income effortlessly for the wealthy and for financiers. It does so by paying interest added at a certain percentage per year.

Unlike an investor’s property, debt is light as air, intangible, invisible. The only evidence of its existence is found in database entries, numbers on a balance sheet or in words on a ‘bearer bond’.

The differences do not end there. A building or property is subject to the laws of physics. It can age, crumble, or be razed to the ground. Football clubs are great assets – because fans are committed long-term, and willingly and regularly pay ‘rents’ to the owner of the asset, for the privilege of watching their team, or by buying a club T-shirt. But clubs can lose value by falling down league tables. Works of art – say a Rembrandt painting – are assets with greater longevity, but are also likely to deteriorate, and in any case, are subject to the whims of fashion.

Not so the government bonds of countries like Britain. While sovereign debts can be defaulted on, safe government debts do not rot with age, as Professor Frederick Soddy (1877–1956) once explained. That is because debts are not subject to the laws of thermodynamics, but to the laws of mathematics. As such, debt effortlessly earns income for investors, at mathematical rates. And if the debt is the safe public debt of nations like Britain, the US or Japan, it can do so for a long, fixed period of time.

The British government has since 1694 honoured its debt obligations without fail. In a world of globalised capital flows in which capital sloshes from one part of the world to another, the price of UK government bonds may rise and fall, but their safety and longevity is never in question. That is because the system is managed by public authority, not left to ‘the invisible hand’ – but mainly because most British citizens regularly and faithfully pay taxes.

It’s the collateral stupid

And to understand why safety is such a big issue for the private finance sector, remember this: the global financial system froze in August 2007 and then collapsed. Not because financiers ran out of money. Not because of a run on the banks. But because everyone in the sector – everyone – lost confidence in the value of assets used as collateral, particularly the value of sub-prime property mortgages on bank balance sheets.

Why did that matter? Because the value of sub-prime assets (mortgages) had been used to leverage inordinate amounts of additional finance through borrowing. If the asset or collateral against which the borrowing had been leveraged was worthless – then the leveraged debt was unlikely to be repaid from the sale of the promised sub-prime collateral.

The collapse of confidence in asset values (or collateral) led to the collapse of the globalised financial system.

And that is where we, citizen taxpayers, came in. Citizen collateral, in the form of tax revenues, did not collapse in value in the crisis. Instead public collateral maintained the authority of central banks, and gave them the power to issue new central bank money (liquidity) in exchange for assets from private bankers. The process was called Quantitative Easing (QE).

The backing of taxpayers enabled central bankers to bail out Wall St and the City of London. The safety and soundness of our taxes upheld the value of currencies, despite the crisis. This was most evident in the US. Even as the global economy tanked, and financial turmoil soared, the value of the dollar rose.

Central banks used the collateral power provided by citizens to leverage vast amounts of central bank money – about $16 trillion – to bail out the global banking system.

Public debt as a gift to financiers and rentiers

To fully understand the power wielded by central bankers, it is important to understand that each time the government applies for a loan, or issues a bond, it creates a debt – or liability – for the government. At the same time, by borrowing, the government creates a valuable financial asset for the private sector.

Governments regularly (once or twice a month) invite pension funds, insurance companies and other private financiers to finance their bonds or loans, in exchange for promises to pay interest annually, and to repay the principal in full at the end of the term of the loan (bond).

This process is in effect no different from a woman seeking a mortgage. She invites a banker to accept her ‘bond’ or promise to repay in exchange for new finance, backs this up with collateral, and commits to pay interest annually and the principal in full at the end of the loan’s term.

Once the commercial banker has issued the finance and accepted the bond, the woman has a liability – to repay the bond. The banker on the other hand, has an ‘asset’ – the woman’s bond or mortgage. It is valuable to the private bank because unlike gold the loan generates income for every year that the woman pays interest. It is probably backed by the collateral of her existing apartment. Plus, the principal on her loan will probably be worth more in real terms when it is finally repaid.

Governments raise finance from both the private finance sector, or from a central bank, in just the same way as an ordinary borrower raises money from a commercial bank. The government promises to pay interest, and offers collateral. The difference between a government’s bond and the woman’s mortgage is that a bond issued by a government with a good record of repayment is a more valuable asset. As such it serves as vital collateral (or ‘plumbing’) for the private financial system.

The woman’s mortgage is also an asset, but will be less valuable because she may not have established a good credit record, and may be backed by just one income (her own). The government by contrast, is backed by a revenue stream from millions of taxpayers.

That explains why government bonds (or government debt) are extremely valuable assets for the private finance sector. They are safe and reliable. They generate income (interest payments) on a regular basis. Debt as a security or asset can be used to borrow (or ‘leverage’) additional finance.

Just as the ownership of a property enables a homeowner to re-mortgage and raise additional sums secured against that property, so safe, valuable financial assets act as collateral for the raising of additional finance. Newly borrowed money, guaranteed against either the original debt/collateral, or against the stream of interest payments derived from the debt, can then be invested, or lent on at a higher rate of return.

At the time of its bankruptcy Lehman Brothers was said to have a leverage ratio of 44. That’s like having an asset that earns £10,000 a year, and then taking out a £440,000 loan secured against it, to go on a gambling spree

To understand leverage, think of a homeowner who borrows £80,000 against a property worth £100,000 with just £20,000 in equity or capital. She has a leverage ratio of four. In other words, she has borrowed four times the equity/capital in her asset.

At the time of its bankruptcy Lehman Brothers was said to have a leverage ratio of 44. That’s like having an asset that earns £10,000 a year, and then taking out a £440,000 loan secured against it, to go on a gambling spree. According to the Bank for International Settlements, Wall St’s investment banks started with a leverage ratio of 22 in 1990, which rose to ‘the dizzy height of 48 at the peak’.

Leverage on that scale is most easily achieved against collateral that is as safe as public debt. The scale of wealth generated would be unimaginable to a present-day Croesus.

Shadow banking and the collateral factory

There is another aspect to safe, public collateral not widely understood. That is how it is used in the shadow banking system – the private financial system that operates in the financial ‘stratosphere’, beyond the reach of states and regulatory democracy.

Non-regulated bank-like entities that have scooped up the world’s savings (e.g. asset management funds, pension funds, insurance companies) hold vast quantities of cash. BlackRock for example, has $6 trillion in assets.

These sums cannot safely be deposited in a traditional bank, where only a limited amount is guaranteed by governments. So to protect the value of the cash, the asset management fund will, for example, make a temporary loan of cash to another in need of it, in exchange for, or guaranteed by, collateral. This exchange is known as a repo – or repurchase arrangement.

As Daniela Gabor has argued, the US and European repo markets, the largest in the world, are built on government debt. In other words, ‘the state has become a collateral factory for shadow banking’.

The risks of this unregulated market for the global financial system, are scary. One reason is that while someone operating in the real world, say a homeowner, may only once be able to re-mortgage her asset or property, unregulated shadow bankers can use a single unit of collateral to re-leverage a number of times. Manmohan Singh of the IMF has estimated that by late 2007 collateral ‘churned,’ or was used roughly three times to leverage additional borrowing in speculative markets.

That’s like using the value of a single asset – one’s property – to guarantee additional borrowing from three different banks. In the real world of financial regulation, homeowners are not allowed to do this.

If we are to understand the history of how the rich have become immensely, grotesquely richer on unearned income, while earned income has fallen in real terms, leverage ratios against public assets in the both the real and shadow banking sectors explain a great deal.

In short, the ability to regularly drain a government of interest payments, and to use the asset of public debt to leverage additional finance, is why asset management firms, private equity corporations, insurance companies, pension funds and financial speculators have massively increased their capital gains. It is also why secure government debt is in such demand. Private financiers can’t get enough safe government bonds – or public debt.

The shortage of public debt and the rise of austerity economics

The Great Financial Crisis (GFC) triggered a flight away from private debt and to the safety of public debt – especially the safest – British, European and US debt.

This huge financial shock of the GFC led to a massive contraction of the global money supply, and threatened deflation – a generalised fall in prices – which would in turn lead to bankruptcies, unemployment and wage cuts.

To counteract that threat, central banks – on our behalf – expanded their balance sheets and, in exchange for collateral (much of which was dodgy or ‘toxic’), provided extraordinary levels of new credit or liquidity to the private financial system. In the process, civil servant technocrats in central banks protected free-market players from bankruptcy and the discipline of the free market – dealing a considerable blow to the ideology.

The deflation shock cried out for a massive fiscal response. There was an initial, but limited fiscal expansion, which led to what Credit Suisse called a ‘flood of safe collateral that caused public shadow money (Treasuries, mortgage-backed securities, US government agencies) to soar, fully offsetting the contraction in private shadow money (corporate bonds, asset-backed securities, and non-agency mortgages)’.

As a result of the panicky demand for public debt, the price of government bonds rose, and because of the way the bond market operates, the yield (‘interest rate’) on bonds fell dramatically. Demand for public debt, greatly eased government borrowing (interest) costs.

Pretty soon though, politicians and officials in government treasuries, cheered on by orthodox economists, right-wing think tanks and the media, soon fell back on neoliberal or ordoliberal theory, and imposed fiscal contraction – or austerity. Public investment – government spending – was either slashed or prevented from rising.

These double standards –the expansion of finance for the private finance sector, and contraction for the public sector – are intrinsic to orthodox economics, but seldom challenged by the economics profession.

These double standards –the expansion of finance for the private finance sector, and contraction for the public sector – are intrinsic to orthodox economics, but seldom challenged by the economics profession.

As a result the production of government collateral (public debt) fell.

Austerity and the simultaneous wage freezes and cuts at first worsened the crisis. Since 2010, austerity has both prolonged the crisis, and held back recovery in the US and Europe. The effect of this backward economic policy was to increase insecure, low-paid, low-skilled and unproductive employment, while lowering wages across the board.

In the US, while the initial Obama-led stimulus stabilised the economy, it was insufficient to restore long-term stability. Instead there were severe state and local government spending cuts, households were left to retrench after the sub-prime trauma, and wages fell in real terms. Between 2009 and 2014, inflation-adjusted wages in the US were flat or falling across a range of available wage measures. More recently, real wages grew, but growth rates for recovery as a whole still trail far behind the 2.0–2.2 per cent annual rates from 1947 to1979.

As a result of austerity, the issuance of safe government debt contracted. Why should this matter? Because the low supply of government debt tends to boost (in fact, crowds in) the creation of unsafe private debt, or assets. These unsafe private assets are used instead by the banking and shadow banking system to expand borrowing and credit. Central banks rightly worry that such credit expansion on unregulated, dodgy assets will probably lead to another financial crisis.

Viewing public debt through the wrong end of a telescope

Understanding the value of public debt changes our view of it. Like a loan undertaken for a project that will create employment and generate income, public debt, if invested in productive activity, is a good thing. It generates income. Not just salaries and wages for those employed; not just profits for the private sector when salaries are spent on their goods and services; but also tax revenues. Income, corporation and consumer tax revenues, then used by government to repay the debt.

Public borrowing and spending are especially important after a crisis, when the private sector is weak, and lacks the confidence to borrow, invest and spend. Yet most Chicago-school economists view public debt as a threat to the economy. Governments that cannot ‘balance the books’ are regarded as incompetent and hounded by the media.

Hostility to public debt varies, but fear is embedded in the German psyche, because the word for debt – ‘Schuld’ – is the same as the word for ‘guilt’. Saint Matthew’s ‘forgive us our debts as we forgive our debtors’ was interpreted by Saint Luke as ‘forgive us our sins as we forgive those that sin against us’.

Until we fully grasp the importance of public debt to the finance sector, immensely wealthy, globalised corporations will continue to parasitically extract rent from public assets; inequality worldwide will continue to widen; and we, the many, will become relatively poorer and powerless.

Guilt, sin and the public debt are deeply intertwined, but only in the minds of economists, journalists and the public. Debt becomes something quite different in the minds of financiers and rentiers. To Wall St. and the City of London, the safe public debt of Britain, Europe and the US is a truly awesome and even phenomenal gift.

They cannot get enough of it.

Until we fully grasp the importance of public debt to the finance sector, immensely wealthy, globalised corporations will continue to parasitically extract rent from public assets; inequality worldwide will continue to widen; and we, the many, will become relatively poorer and powerless.

When enough of us do come to understand this latent power, we will discover that another world really is possible.

Social democrats and the financial system

At the heart of neoliberal ideology – ideas shared by those that economic historian Quinn Slobodian defines as ‘globalists’ – is the belief that the state must shrink as a share of the economy. Second, that private capital markets must remain ‘free’ to roam globally and without friction. In other words, globalised capital markets must have the ‘freedom’ to be detached from the world’s states, and from democratic regulation.

As explained above, the deep irony of the ideological obsession with self-regulating capital markets, austerity and the shrinking of the state is that private financial markets cannot function without the backing of governments, their taxpayers, and the safety of public debt.

The ‘timid mouse’ that is the private finance sector cannot operate without the protection of the ‘roaring lion’ that is the public sector, to quote Mariana Mazzucato.

Given that safe public assets are so fundamental to the stability of the private financial system, why would right-wing politicians and officials contract their supply? The answer can only be: ignorance, fed by ideology opposed to the collective role of the state.

But what of the left? The Great Financial Crisis was met with shock and disbelief on the left. While many progressive economists had focused on the domestic, tangible economy – the state, markets, labour and trade – they largely ignored the intangible economy, the globalised finance sector.

Social democratic parties turned a blind eye to a global, deregulated financial system that threatened systemic failure.

In the meantime, many had embraced ‘globalisation’ – the ability to travel widely and draw money in any part of the globe; the ease with which globalisation facilitated the import of exotic fruits and vegetables; cheap smartphones; and the gifts bestowed by technology on the globalised system. These were all met with enthusiasm by social democratic parties that turned a blind eye to a global, deregulated financial system that both facilitated these activities, but also threatened systemic failure.

As a result, the left had no coherent response to the collapse of globalised capital markets. Throughout the period of austerity, the left – both in the US and Europe – found itself on the back foot, defensive of social democratic governments that had built up debts as a result of the Great Financial Crisis. Social democratic governments endorsed both QE for bankers and austerity for the majority. This approach guaranteed their downfall, and even extinction. (The French Socialist Party no longer exists as a political force or organisation, and was obliged to sell off its own headquarters.)

These failures weakened the ability of the left to argue that at a time of catastrophic private economic failure, public investment in jobs was essential to restore social, political and economic stability. Instead taxpayer-backed subsidies and assets were deployed by central banks via QE to protect private profits and capital gains.

No wonder the public revolted.

What is to be done?

A first in the many steps that must be taken to transform the economy is understanding. People cannot act to transform what they do not understand.

Understanding how taxpayers guarantee and endorse the activities of the globalised, deregulated private financial sector, must be more widespread. Only then can we begin to demand ‘terms and conditions’ for public subsidies and guarantees – and to use that power to regulate and subordinate the globalised financial sector to the interests of society as a whole. To demand that public financial assets be used for public, not private benefit.

This understanding is fundamental if we are to respond to the greatest security threat facing humanity: climate breakdown.

Armed with understanding, we will then need a plan. The Green New Deal is such a plan.

The Green New Deal

The genius of Alexandria Ocasio Cortez’s Green New Deal is that it provides a broad, comprehensive plan to transform the US economy and tackle climate breakdown. If the efforts of US Democrats led to an internationally coordinated campaign to implement it, the plan has the potential to transform many economies around the world, and to ensure a liveable planet in the future.

But – and it’s a big but – a comprehensive plan for economic transformation will require financing on a grand scale, comparable to that of a nation embarking on war. We know that can be done. Governments have always found money to finance wars.

Back in 1933, President Franklin D. Roosevelt’s plan – the New Deal – found money to fight a war against unemployment and poverty. His administration did so by overturning neoliberal economics, and implementing Keynesian monetary theory and policies. By ensuring that the monetary and financial system was managed by public, not private authority, his government raised the financing needed to lead the US out of the economic catastrophe of the Great Depression. Roosevelt’s New Deal not only created jobs and generated national income. It also tackled the ecological catastrophe that was The Dust Bowl.

Implementation of the New Deal was achieved first, because the Roosevelt’s administration had a clear understanding of the nature of money, and of the publicly backed monetary system. But its success in tackling Wall St interests was down to political mobilisation, organisation and action. Roosevelt had the political courage and the political ballast to confront, and subordinate the interests of Wall St to those of society and the environment.

Any international movement for a Green New Deal will have to summon up the same political courage in countries around the world. Campaigners will have to mobilise, organise and act to renounce the economic ideology that allows the 1% to grow fantastically rich on taxpayer-backed subsidies, bailouts and guarantees – while denying financial resources for public investment, economic and ecological transformation.

Campaigners will have to discover, and then deploy, their latent power to subordinate global finance to the interests of society and the ecosystem.

ABOUT THE AUTHOR

Ann Pettifor is a political economist, author and public speaker on the global financial & economic system, on money, monetary policy, and on the UK economy. Her latest book, The Production of Money (Verso 2017) explains the nature of money and the monetary system. She is one of the few economists to have predicted the 2008 economic crisis. During the late 1990s, she led a campaign, Jubilee 2000, which as part of an international movement resulted ultimately in the cancellation of approximately $100 billion of debt owed by the poorest countries. She is currently director of PRIME (Policy Research in Macroeconomics) a network of economists that promote Keynes’s monetary theory and policies, and that focus on the role of the finance sector in the economy.

The post The Latent, Unused Power of Citizens and the Production of Public Collateral appeared first on P2P Foundation.

During the past four decades, the Uruguayan Federation of Mutual-Aid Housing Cooperatives (FUCVAM) has been promoting workers’ autogestión (self- management), participatory democracy, and ayuda mutua (sweat equity; the direct contribution of work in the the building site by all cooperative members) as viable tools for the construction of high-quality dwellings. At the same time, FUCVAM has been a leading force in the resistance to authoritarianism and social exclusion.

Throughout its history, housing construction and political activism have been two highly intertwined components of the Uruguayan cooperative housing movement, as the active involvement of its members in the building process translates into a much broader social engagement.

FUCVAM understands housing as a commons. The houses built by the cooperatives are not privately owned. The cooperative members search for a suitable plot of land and take out a loan from the state together, and then, as a collective, they assume control of the whole building process and the management of the urban space once construction is completed, fostering internal solidarity, social empowerment and democratic innovations along the way.

This six-minute short documentary film presents the multifaceted elements of this movement through the eyes and words of three FUCVAM activists: Matías, Isabel and Gustavo. Belonging to different generations and representing diverse social and generational backgrounds, they collectively tell a history of struggle and triumph in the search for practical solutions to vital problems faced by workers and low-income communities around the world.

Daniel Chavez is a Uruguayan/Dutch social scientist and documentary photographer. He specialises in public policy and development issues, with special emphasis on public services provision and participatory democracy. He is a Fellow of the Transnational Institute (TNI). Daniel has authored and edited a number of books, published in several languages. He holds a BA in Social Anthropology from the University of the Republic (Montevideo, Uruguay) and a MA and a PhD in Development Studies from the International Institute of Social Studies (ISS) of Erasmus University-Rotterdam.

Republished with permission from the author.

The post Sweat Equity: How Uruguay’s housing coops provide solidarity and shelter to low-income families appeared first on P2P Foundation.

Sol Trumbo & Nick Buxton: In an age of Trump and trolls, it may be strange to talk about utopia. Not only has a divisive reactionary right-wing privileged minority surged to the fore, but social inequality, militarism and the climate crisis have worsened too. There does seem, however, to be one arena for hope for progressive solutions and that is in the city. Worldwide, mayors are increasingly a progressive and fearless voice advancing bold agendas on climate change, welcoming refugees and trialling new forms of democratic participation.

The question remains: can these cities offer solutions that address multiple systemic crises instead of pursuing, as Greg Sharzer suggests, a “way to avoid, rather than confront capitalism” by focusing on “piecemeal reforms around the edges”? Can a group of cities really offer any fundamental solutions to a crisis created by the immense power of corporate capital?

To try and answer this question, the Transnational Institute in 2017 launched Transformative Cities, asking communities to share their stories of radical transformation, in particular in the areas of water, energy and housing. Our research, particularly in the areas of water and energy had revealed a significant global counter-trend to privatisation, showing that 1,600 municipalities in 45 countries had brought their public services under public control since 2000.

We wanted to explore this more deeply to see whether and how cities could be part of building systemic solutions. American sociologist Erik Olin Wright, in his assessment of strategies for confronting capitalism, says that we need to escape from delusions that we can either overthrow capitalism or tame capitalism – arguing that the answer is to erode capitalism. He argues for the building of “real utopias” which are constructs that have “the potential to contribute to eroding the dominance of capitalism when they expand the economic space within which anti-capitalist emancipatory ideals can operate”. As we argued in a previous piece, cities offer many advantages for pushing forward these kinds of radical emancipatory ideals, that in the language of this initiative we call ‘transformative’.

At the same time, it is clear that what ‘transformative’ looks like will vary radically according to the context, the culture, and the process. Cities may make transformative changes in one area and still be regressive in others. As the Zapatistas have cogently argued and shown in practice, the revolution depends on stepping out and asking questions as we move forwards (Caminando preguntamos). We have a clear analysis that the key crises we face are due to a capitalist system of production that has concentrated economic and political power in the hands of transnational corporations and a small elite while bringing our ecological systems to a dangerous point of collapse. However, we have an open mind regarding what the truly transformative city and politics looks like.

 The Atlas of Utopias. Credit: TNI 2018.

As a result of the call, TNI is today presenting its Atlas of Utopias, telling the stories of 32 communities from 19 countries, ranging from small peri-urban indigenous communities in Bolivia to major urban metropolises such as Paris. Their contexts are starkly different, and their initiatives vary widely in terms of time, scale and impacts. Thirty-two cases are also just a tiny snapshot of the range of exciting transformative initiatives taking place around the world.

Nevertheless, the stories showcased in this Atlas of Utopias are deeply inspiring. Despite the diversity, there are also common threads to radical transformative practice. We would like to share four of them here:

1. Organising locally can take on corporate power and national governments. It would seem that the balance of power between local governments and the national government and multinational corporations would make victories difficult but, in many cases, determined campaigners have defeated both. They have done this by taking advantage of people’s loyalty to their city, their greater control over local policy and by naming and shaming corporations and their failures to run city services effectively. In Berlin, for example, residents took on the federal government as well as the multinationals RWE and Veolia that did everything they could politically and legally to block remunicipalisation of the city’s water. Eventually political pressure – including a referendum in which 98% demanded that the government publish secretive contracts – led to water remunicipalisation in 2014.
2. Organising around access to basic rights such as water, energy, housing can engage many people and be part of a bigger transformation including tackling climate change. The advantage of organising around tangible issues such as energy or housing is that these are essential to everyone’s daily life, which is why these struggles have been so emblematic to the rise of municipalist movements everywhere. They also can be an opening to building a bigger progressive radical agenda. In Richmond, California, initial protests against air pollution by the Chevron refinery has led to a surge of support for the Richmond Progressive Alliance, their election to the council and a sea of change in local policy. This oil company town has subsequently raised its local minimum wage, brought in rent control measures that protect 40% of Richmond tenants, and rolled out successful community policing led by a visionary gay police chief. In Nicaragua, an association of rural development workers not only organised to build a community hydro to provide electricity to a rural population for the first time, it used the income from its surplus electricity to create an additional US $300,000 of revenue for investment in further development projects for the region.
3. Worker engagement is usually critical to transformation. As Hilary Wainwright has argued, workers are not just important for their bargaining power against capital, they are also uniquely positioned because of their knowledge and experience in running services and their pivotal role within community relations. Remunicipalisation and transformative practices work best when they can draw on this knowledge and creativity. In Jamundi, Colombia, the local trade union has not only stopped the privatisation of water, but has also become a fierce defender of the human right to water, developing four community water systems.  In Mumbai, India, former mill workers have succeeded in staying mobilised even after the mills closed and have won the construction of 26,000 homes for workers. They have successfully challenged and defeated real estate developers who sought to build malls and luxury housing.
4. Changes in one city can inspire many others. Many cities report that their actions have led to interest by many others and therefore sparked changes way beyond the community. Grenoble’s bold water remunicipalisation in 2001 – that included high levels of citizen accountability, social tariffs and ecological measures – inspired Paris to do the same. In Mexico, a special school has been set up to encourage lawyers, engineers, accountants, geographers and teachers in 16 states to defend public water for all, helping ensure that good practice becomes viral. The victory of the citizen-movement platform Barcelona en Comú has similarly sparked a new wave of municipalist movements worldwide. This perhaps answers one of Olin Wright’s challenges for establishing real utopias – the need for these networks to expand so that they can be in a position to challenge ‘the dominance of capitalism’.

In the next month, we plan to explore nine cases in more depth, sharing their process of change. Then in mid-April, the public will be invited to vote on their favourites. In addition, we have been working with a number of evaluators to draw out the learning which will be turned into publications in a variety of media formats to inspire and assist other communities involved in the same struggles.

There is a lot to learn about both the individual cases, their durability in terms of transformation, and whether they contain the elements for eventually “challenging the dominance of capitalism”. The latter still seems very far off, and it remains an open question and debate over whether an ever-expanding municipalist movement will ever reach the position of challenging the hegemony of transnational corporations and client neoliberal states.

What is clear already is that the first step for transformation begins when a group of people in a community decide to say no to the corporate takeover of public resources, and when they start to imagine an alternative.

Throughout the atlas, we witness individuals and organisations who have dared to dream and who have trusted that people can make decisions more justly than corporations driven by profit. In the process, they are building the social relationships that can take on corporate capital and most of all creating the imaginary that another world is not only possible but is on the way.

Utopia lies at the horizon. When I draw nearer by two steps, it retreats two steps. If I proceed ten steps forward, it swiftly slips ten steps ahead. No matter how far I go, I can never reach it. What, then, is the purpose of utopia? It is to cause us to advance. – Eduardo Galeano

Featured image: Affordable housing for women workers in Solapur, India. Credit: Centre of Indian Trade Unions (CITU).

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379 mayors representing more than 68 million Americans said they would implement the Accord regardless of the head-in-the-sand attitude of the country’s president. More significantly, given the weakness of the Paris agreement, more than 40 cities have gone further and committed to 100% renewable energy no later than 2050.

This practical defiance highlights how the city in our globalised world is emerging as a place of resistance, alternatives and solutions to our world’s multiple crises.

Cities are privileged places

Cities have a long history as cradles of social transformation, whether it was the urban revolts in Budapest, Stockholm and other European cities in 1848, the municipal victories and participatory budgeting experiments of the Workers Party in Brazil in the late 1980s or the emerging municipalist movement in Spain and other regions more recently. Cities constitute a privileged place to organise collectively and to imagine new ways of living and working together, spaces where bodies and minds interact and where ideas spread quickly and have unparalleled impact.

This is not to over-romanticise them. Cities, as other human constructions, have their own structures of concentrated power, inequality and exclusion. Greek city-states framed ideas of democracy that we still use today, but their societies were based on slavery and patriarchy. Medieval city-states were laboratories of modern liberal democracies and welfare systems based on taxation, but they were also the places where capitalism, colonialism, international finance and unfair trade relations emerged. Cities have a long history of providing privileges to their inhabitants, while extracting wealth from those outside its boundaries. Cities have a long history of providing privileges to their inhabitants, while extracting wealth from those outside its boundaries.

Nevertheless, cities have noticeably emerged as a critical arena for many recent social struggles from the Arab Spring in Tahrir square, Cairo or the Umbrella Revolution in Hong Kong. It has happened at time when cities for the first time in history now house more than 54% of the world’s population (expected to reach 67% by 2050).

For social movements, the cities are a strategic place to organise, not only practically but also politically. More than two decades of neoliberalism have succeeded in entrenching corporate power within national and international institutions and international legal frameworks – making it ever more difficult terrain for people’s movements, who have to defeat powerful interests and appeal to a deliberately disempowered electorate. Cities by contrast offer a more level playing field where people power can still take on and defeat corporate power and thereby prove that political mobilisation can deliver results.

Participation and power

The political theorist, the late Benjamin Barber, argued that cities are capable of reconnecting “participation, which is local, with power, which is central”. While nation states used to play that role, he argued they have become too large (and we would add also too captured by corporate capital) to sustain the kind of “bottom-up citizenship, civil society and voluntary community” that is essential to democracy.

Across the world, social movements are actively seizing this potential power,advancing important social demands, whether for dignified work, sustainable food systems, green energy or racial justice. Much of this transformation takes place under the radar, as mainstream largely corporate media continues to focus all its attention on the happenings in the national corridors of power.

Even we were surprised in 2015 when our organisation, the Transnational Institute, decided to look at the number of municipalities who had brought water services back under public control and discovered 235 cases in 37 countries of cities and communities remunicipalising their water. Given the power of transnational water companies like Suez and Veolia – and the grip that the ideology of privatisation has on national and international water policy – this was nothing short of a silent revolution. 235 cases in 37 countries of cities and communities remunicipalising their water… – nothing short of a silent revolution.

A follow-up report earlier this year that broadened its focus to include energy and housing unveiled 835 examples of (re)municipalisation of public services involving more than 1,600 municipalities in 45 countries. TNI researcher, Satoko Kishimoto, says “What is most important about these cases is that they kill once and for all the myth that ‘there is no alternative’ to neoliberalism. They show that not only is there a clear alternative to privatisation, but that it also has the potential to both improve services and transform society and environment for the better.”

An alternative to neoliberalism

In many cases, the experience of resisting corporate capital and defending rights, such as those of access to water or housing, has itself been transformational. It has helped activists reconnect with those alienated by neoliberalism, and also opened up peoples’ imaginations to think of new ways of organising work, services and social needs. The energy and dynamism that is released is palpable, captured in documentary films such as Demain (Tomorrow)

The experiences of trying to set up green businesses in Totnes in the UK, for example, eventually led to an international project, Reconomy, that seeks to build local economies that are sustainable, equitable and anchored in wellbeing, rather than tied to economic growth at any cost. An initiative by the New Delhi government to set up hundreds of small free health clinics to do diagnostics and simple treatments has inspired health activists across the world. In Barcelona, the experience of resisting house repossession inspired some activists to fight and win municipal elections based on a participatory platform of policies that include fining banks that speculate on empty homes, creating a new municipal energy company and providing sanctuary to refugees.

Barcelona’s new city council is now helping to foster a movement of ‘fearless cities’ committed to the same principles of participation, openness and social and environmental justice. Their first gathering in Barcelona in June 2017 attracted more than 600 participants representing more than 100 municipalist platforms from around the world.

The feminization of politics

Municipal activism is also an opportunity to put feminism and the feminization of politics at the forefront. As Laura Roth and Kate Shea Baird have argued “the feminization of politics, beyond its concern for increasing presence of women in decision-making spaces and implementing public policies to promote gender equality, is about changing the way politics is done.” In practice, this means leaving aside patterns of our patriarchal society such as competition, dominant leaderships, vertical organizations, egoism and structures that have typically excluded women from politics. It is noticeable how many of the new leaders in the municipalist movement are women.

Perhaps the proximity, scope and nature of the political conflicts at the city level, such as struggles for access to water and housing, rather than monetary policy or military alliances, also provide an arena where non-patriarchal modes of political action are better suited.

Vandana Shiva, philosopher and activist, at Fearless Cities, June 9 – 11, 2017. Flickr/Barcelona En Comú. Some rights reserved.

Transformative Cities Initiative: a unique participatory award

These successful experiences around the remunicipalisation of public services and the rising municipalist movement have inspired TNI to launch the Transformative Cities Initiative. Our goal is to build an atlas of real utopias, make these experiences viral, and to share the learning that comes from implementing these experiments. This month, we are launching a unique participatory award to recognise transformative experiences. In the first year, the focus will be on water, energy and housing. In future years, the initiative will expand its focus to other areas such as migration and solidarity, territorial food governance and drugs harm reduction.

We are encouraging both social movements and cities to use this opportunity to share your story. We plan to bring participants together, to learn from and systematise these experiences, in order to inspire and accelerate the process of transformation in other regions and places. We are giving special attention to experiences from the Global South, whose experiences are not adequately focused on or shared in global debates. We are giving special attention to experiences from the Global South, whose experiences are not adequately focused on or shared in global debates.

At a time when our current political framework offers most people a choice between neoliberal globalisation and authoritarian nationalism, between the global mall and the border wall, it is critical that the real alternatives coming from social movements are fertilized and strengthened.

A strategy that only seeks to resist increasingly authoritarian national governments, defending an ever-shrinking civic space, is demoralising and self-defeating. Similarly a strategy that articulates national and international alternatives that have no chance of realisation is equally disempowering.

Cities offer the chance to break with the dichotomy of despair – they give us a chance to trial out transformative change at a local level, and in so doing providing the building blocks for the global transformation that is so desperately needed. As the Fearless Cities gathering put it, “The local was where democracy was born; it is now where we will recover it.”

About the authors

Originally published in Open Democracy

Lead image:  Some rights reserved by Overpass Light Brigade

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The goal of the voting is not to put one experience above others; there is no prize for the one with more votes. This is an exercise of Coopetition, meaning that we seek cooperation but have introduce an element of competition to encourage public interaction and engagement that we hope will amplify transformative practices that we would like to see flourish worldwide.

Regardless of the vote results, we recognize the hard work, successes and victories of all 9 initiatives as well as the others portrayed in the Atlas of Utopias.

Transformative Cities aims to support these initiatives by giving them visibility in our website and allied organizations and partners, which includes:

• A long piece written by commissioned journalists under a media partnership between Transformative Cities and Open Democracy,
• the production of photos and graphics based on their initiative and,
• the organization of collective learning spaces, either online via webinars or physically in events like the annual New Politics conference organized by TNI and its partners.

Last but not least, the transformative Cities process is open and we aim to improve it along the way, please do contact us if have any suggestions or comments so the next edition contains even more collective intelligence.

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In much of Latin America, the state does not protect its citizens. This is particularly true for the popular sectors, indigenous peoples, people of colour and mestizos, who are exposed to the onslaught of drugs trafficking, criminal gangs, the private security guards of multinational corporations (MNCs) and, paradoxically, from state security forces, such as the police and the army.

There have been several massacres in Mexico, for instance – such as the killing of 43 students in Ayotzinapa in September 2014 – and they are no exception. There continues to be impunity for the 30,000 who have disappeared and 200,000 who have died since Mexico declared its ‘war on drugs’ in 2007. Slight differences aside, the current situation in Mexico is replicated across the region. In Brazil, 60,000 people meet a violent death every year, 70% of them of African descent, and mostly youths from poor areas.

Against this backdrop of violence that threatens the lives of the poorest, some of the most affected have created self-defence measures and counter-powers. Initially, these are defensive, but ultimately develop power structures in parallel to the state.

Since they are anchored in community practices, these self-defence groups are key to forming a form of power that differs from the hegemonic powers centred around state institutions. This essay examines them in more detail in order to understand this new trend in Latin American social movements.

The logics of the state and the community are opposed, since the former rests on its monopoly of the use of legitimate force within an established territory, and on its administration by means of a permanent, unelected, civil and military bureaucracy that reproduces and is answerable to itself. The bureaucracy brings stability to the state because it survives any change of government. Transformation from within is a very difficult, long-term process.

Latin American countries face an additional challenge: state bureaucracies are colonial creations, made up principally of white, male, educated elites in countries where the population is mostly indigenous, mestizo and black.

By contrast, the community logic is based on rotating tasks and functions among all of its members and whose highest authority is the assembly. In this sense, the assembly, as a space/time for decision-making, is a ‘common good’.

However, we cannot reduce ‘common good’ to the number of hectares of collective property, buildings, and authorities elected by an assembly that can be manipulated by caudillos or bureaucrats. We need to understand that there is the community as an institution and the community as social relations, a fundamental difference in dealing with questions of power.

In my analysis, the heart of the community is not common property, although it remains important, but collective or communal labour – minga, tequio, gauchada, guelaguetza – which should not be reduced to institutionalized forms of cooperation in traditional communities.

Collective labour underpins the commons, and is the true material base that produces and reproduces living communities, based on relations of reciprocity and mutual help rather than the hierarchical and individualized relations at the core of state institutions.

Collective labour underpins the commons, and is the true material base that produces and reproduces living communities, based on relations of reciprocity and mutual help rather than the hierarchical and individualized relations at the core of state institutions. The community lives not because of common property, but because of collective labour that is creative, and is re-created and affirmed in everyday life. This collective work is the means through which the comuneros and comuneras make a community, expressed in social relations that differ from the hegemonic ones.

In her sociological work, the Guatemalan Mayan, Gladys Tzul, argues that in a society based on common labour, there is no separation between the domestic environment, which organizes reproduction, and political society, which organizes public life. In reality, both feed and nurture one another. In the communities, the two spheres are complementary, embodied in communal government.

‘The communal indigenous government is the political organization that can guarantee the reproduction of life in communities. Communal labour is the fundamental basis underlying and producing those same communal government systems, and where the full participation of all men and women plays out.’

Collective labour is part of all community activities. It enables both the reproduction of material goods and the community as such, from the assembly and feasts to funerals and wakes, as well as alliances with other communities. Resistance struggles that ensure the reproduction of community life are also anchored in collective labour.

Emphasizing the multiple forms of collective labour allows us to see power and counter-power from a different perspective. First, collective labour is not an institution but social relations. Second, because they are social relations they can be produced by any collective subject in any space. As they are distinct from the community’s property relations and authorities, they can reappear wherever the subjects or movements engage in community-inspired practices.

Third, highlighting social relations enables us to examine fluctuations and changes in power relations and, in the case of social movements, the cycles of birth, maturity and decline that are inherent in the collective logic. Thus, we avoid making the mistake of ascribing power to institutions that are effectively cogs in the state machinery, such as the case, for example, of the communal councils in Venezuela.

The Venezuelan communal councils depend on state funding and speak the language of bureaucracy; they form part of the organizational structure of the state and help to secure it rather than transcending it. Over time, they have become increasingly homogeneous and lost their independence. Although there is a strong egalitarian culture in the popular neighbourhoods in Venezuela, of horizontality and the absence of hierarchy, the contradiction between the base and the leadership has been resolved through directives that have set limits to and controlled egalitarian spaces.

An important barrier to emancipation is that, to a greater or lesser degree, every culture has features of a hierarchical culture which feed on patriarchal and machista relations. This is equally true of indigenous and Afro-descendant communities, where caudillismo, personalism and paternalism are reproduced almost ‘naturally’. I therefore believe to put the emphasis on how social linkages are expressed in ‘collective labours’ more broadly, from assembly to feast. It is in this form of life and creative work that it becomes possible to modify cultures and ways of doing things, rather than within institutions whose inertia reproduces oppression.

Counter-power is, in fact, collective work that rural and urban communities establish to defend themselves from superior powers that jeopardize their survival. Below I list some examples of experiences where popular collectives or communities have exercised anti-state powers.

In cities, like Cherán and Mexico D.F., counter-powers are enmeshed in territorialized social movements that control and defend common spaces. They show that there are many similarities between what happens in a rural indigenous community and in a popular peri-urban area. In both cases, their collective life is challenged by extraction and capitalist accumulation through dispossession: in rural areas hydroelectric dams and open-pit mining in rural areas, and in the cities by real-estate speculation and gentrification.

The colourful mobilization of the Nasa people in the Colombian Cauca mountain region features a cordon of guards, both leading and flanking the mass of comuneros and comuneras to protect them. They are disciplined and ‘armed’ with their wooden sticks marked with ancestral symbols. The Indigenous Guard, the Guardia Indígena, says that its aim is to protect and defend the communities, as well as to be a body for education and political training.

Every year there is a graduation ceremony for hundreds of guards in the North Cauca. Men, women and young people from 12 to 50 years of age participate in the Escuela de Formación Política y Organizativa (School for Political and Organizational Training), and receive instruction in human rights and ‘indigenous law’ that they must apply in performing their duties. The graduation is a deeply mystical act that takes place in a harmonization centre, guided by wise community elders alongside university professors and human rights defenders.

Children, young people, adults and seniors begin the second day of the sixth meeting of indigenous guards with a tribute from the student body of the Yanacona Farming Institution to the visitors of the Nasa people.

The structure of the Indigenous Guard is simple and shows its true purpose: each vereda or community chooses ten guards and a coordinator. A second coordinator is then chosen for each resguardo or indigenous territory, and a third for the entire region. The North Cauca region has 3,500 Indigenous Guards, corresponding to the 18 cabildos or authorities elected by the resguardos.

‘We are not a police force at all, we build organization, we provide protection to the community and defend life without getting involved in the war’, explains one of the coordinators. Participation is voluntary and unpaid, and the authorities and neighbours in each community help with the upkeep of the family plot of each guard and sometimes carry out sowing and harvest mingas (collective work).

Guards are evaluated annually, with members either continued or replaced as the organizational model is based on rotating among all its members. Community justice – the main task of the Indigenous Guard – seeks to restore internal balance and harmony, based on the Nasa cosmovision and culture, as opposed to state justice that separates and locks away convicted criminals.

The Guard defends its territory from the military, paramilitaries and guerrilla forces that have murdered and kidnapped hundreds of comuneros since the war began. In recent years, they have also protected their territory from the multinational mining companies that pollute and displace populations.

As well as training and organising the communities, the guards encourage food sovereignty, and promote community plots and gatherings to reflect on derecho propio, as community justice is known. Every six months, they take part in harmonization rituals, guided by traditional healers, as a form of collective and individual ‘cleansing’.

The Indigenous Guards are characterized by peaceful resistance. On several occasions, hundreds of them have convened, responding to the traditional whistle, to rescue someone kidnapped by the narco-paramilitary or the guerrilla forces. The sheer number of disciplined and determined guards free victims without recourse to violence. At times, they have also faced down the armed forces.

In 2004, the Indigenous Guard received the National Peace Prize, awarded every year by a group of institutions, including the UN and the Friedrich Ebert Foundation. The Guard has become a point of reference for other peoples, such as Afro-descendants, peasants and the popular sectors that suffer state or non-state violence.

Self-defence and social movements

Nasa’s Indigenous Guard is not an exception, as many Latin American movements have established forms of self-defence to protect their communities and territories. The advance of extractive industries in recent years, whether mining companies, monocultures or infrastructure, is being met with popular resistance everywhere, sometimes taking the form of community-based territorial control.

To explore the forms self-defence takes and their relation to counter-powers, I will briefly describe four cases in addition to the Indigenous Guard: the Rondas Campesinas in Peru, the Community Police in the Mexican state of Guerrero and the Cherán fogatas in the state of Michoacán, and the Acapatzingo Housing Community Brigades in Mexico City.

Rondas Campesinas, Peru

In the 1970s, the state in practical terms did not exist in remote rural areas of Peru, which left peasants exposed to cattle rustlers. These were very poor and fragile cattle communities in the highlands, and any theft posed serious threats to their subsistence economy.

The communities therefore formed an assembly and decided to establish night watches or Rondas Campesinas to guard against cattle rustlers and protect the communities. At first they organised night watches by rotating responsibility among everyone in the community, but then they started carrying out public works, such building roads and schools. Later on, they even started to impart justice, acting like local authorities.

The Rondas came back to life in Cajamarca in northern Peru, against the Conga gold-mining project. They sought to protect the water sources, on which family agriculture depends, from the pollution caused by the mine. They call themselves Guardianes de las Lagunas (Guardians of the Lagoons), and camp at an altitude of 4,000 m. in barren and almost uninhabited terrain, to watch over, witness and resist the presence of the multinationals.

Guerrero Community Police, Mexico

The Regional Coordination of Community Authorities–Community Police (Coordinadora Regional de Autoridades Comunitarias-Policía Comunitaria, CRAC-PC) was born in 1995, when indigenous communities sought to protect themselves from rising criminality. Twenty-eight communities were part of the initial effort, and managed to reduce delinquency by 90–95% https://www.youtube.com/watch?v=cJm0XiJo6lk.

Initially, they would hand over the offenders to the Public Prosecutor. But, after seeing them back on the streets after a few hours, in 1998 a regional assembly decided to create the Houses of Justice (Casas de Justicia). The accused can be defended in their own language, without the need for lawyers or the imposition of fines, since the aim of community justice is to ‘re-educate’ those found guilty. During the trial, the main goal is to reach an agreement between the parties, involving family members and communal authorities.

This ‘re-education’ is carried out mainly through community work rather than punitive justice, because the goal is the transformation of the person under community supervision and monitoring. The highest authority of the CRAC-PC is the open assembly in the towns that have Community Police. The assemblies ‘appoint their coordinators and commanders, and can relieve them from their post if they are accused of failing to fulfil their duties.

Also, decisions are made related to justice in difficult and sensitive cases, or if it is important business that involves the organization’. The CRAC-PC has never generated a vertical, centralized chain of command, showing that community authorities function as different kinds of powers than state authorities.

After 2011, Community Police spread throughout the state of Guerrero and the country as a whole, partly due to the growing levels of state and narco-trafficking violence, and the de-legitimation of the state apparatus. In 2013, self-defence groups emerged in 46 of the 81 municipalities in Guerrero, involving some 20,000 armed citizens.

There are considerable differences between community police and self-defence groups. The latter are citizens who spontaneously take up arms to defend themselves from criminal activities, whose members are often neither appointed nor fully accountable to the community and where regulations or basic principles are minimal. Their rapid expansion came about because of the growth of indigenous self-defencein the wake of the 1994 Zapatista uprising. This was recognized in the Ostula Manifesto of 2009, approved by indigenous peoples and communities in nine Mexican states during the 25th Assembly of the National Indigenous Congress (Congreso Nacional Indígena, CNI), that established the right to self-defence.

Cheran fogatas, Mexico

Cherán is a city with a population of 15,000 in the Mexican state of Michoacán, most of whom are indigenous purépecha. On 15 April 2011, the population rose up against talamontes, loggers, in defence of the common use of the forests, their community life and to ensure their safety from the organized crime and the political powers that protect it.

Since then, the population has set up a system of self-government through 179 braziers or community fires, the beating heart of indigenous counter-power, located in the city’s four neighbourhoods https://www.youtube.com/watch?v=Dql9_kKBwws.

Based on their usos y costumbres (customs and traditions), the population elects a High Council, the highest municipal authority, which is also recognized by state institutions. There are no more elections by parties, but rather via assemblies that choose their authorities. The braziers are an extension of the communal kitchens among the barricades; a space for neighbourhood gatherings, exchange and discussion, where ‘children, youth, women, men and the elderly, are actively included and where all decisions are made’.

Communal power in Cherán is best depicted as a set of concentric circles. On the outside are the four neighbourhoods, in the centre of which is the Community Assembly backed by the High Council of Communal Government, which includes three representatives from each neighbourhood. Then, there is the Operational Council and the Communal Treasury, which form the first circle around the centre/the assembly. Around it, there are six other councils: administration, communal goods, social, economic and cultural programmes, justice, civil issues, and the neighbourhood coordination council.

As they say in Cherán, this is a government structure that is circular, horizontal and articulated.

Acapatzingo, Mexico

The Housing Community of Acapatzingo includes 600 families in the south of Mexico City, with a population of 23 million. It belongs to the Organización Popular Francisco Villa de la Izquierda Independiente (Popular Movement Francisco Villa of the Independent Left). It is the most consolidated popular neighbourhood in urban Mexico, based on the criteria of autonomy and self-organization.

Brigades, in which 25 families are represented, form the basis of the self-organization. Each brigade appoints representatives to committees, generally four: press, culture, public order and upkeep. Participants rotate and they appoint representatives to the General Council for the settlement, where representatives from all brigades convene.

The brigade intervenes whenever there is conflict, even in family matters. Depending on the gravity of the issue, intervention can be requested from the public order committee and even the general council. Each brigade takes turns in protecting the area once a month. The brigade’s security does not follow the traditional understanding of control, because it is based on self-protection by the community and has as its main function the education of the residents.

The public order committee also has a role in determining the community’s boundaries, deciding who can enter and who cannot. This is a central aspect of autonomy, perhaps the most important. When there is violence in the home, the children go out into the street sounding their whistle, a device also used if there is an emergency. The atmosphere in the community is so peaceful that it is common to see children playing alone in absolute calm, in a safe space, protected by the community – something unthinkable in the otherwise violent Mexico City.

From Global South to Global North

This essay has focused on Latin America, although the experiences are not exclusive to the Global South. In the aftermath of the 2008 crisis, there has been similar territorialization of resistance and collective projects, particularly in Greece, Italy and Spain.

Azienda Mondeggi, for example, close to Florence in Italy, has been taken over by scores of young people, whose produce includes wine, olive oil and honey. They live in collectives and have managed to recover several hectares as ‘common goods’. Another notable collective territory experience is the resistance to the high-speed train in northern Italy, the No-TAV movement in the Susa Valley. In the Spanish city of Vitoria, the youth of popular movements have recovered an entire neighbourhood, Errekaleor, that they defend from real-estate speculation.

In the three European countries, there are also scores of recovered factories, hundreds of social and cultural centres and, in Spanish cities like Salamanca or Valencia, semi-urban farms where unemployed women and men work to provide a minimum income and some food for themselves. As cities in the Global North are increasingly reshaped through real-estate speculation, young men and women with low-paid jobs have begun to open spaces, from city plots to cultural collectives and alternative communication, as a means to maintain solidarity and camaraderie in their social relations.

Power, counter-power and non-state power

As a general rule, social movements are counter-powers that seek to bring balance or present a counterweight to the large global powers, such as MNCs and the states that work with them. Often, these counter-powers act in a way that imitates state power, with similar hierarchies even if they are made up of individuals from different social sectors, ethnicities and skin colours, genders and generations.

Counter-power is usually defined as seeking to displace hegemonic power, but is often constituted in a similar manner to state power as we know and endure it, at least in western societies. This is not to enter the theoretical debate about power, counter-power or anti-power, as argued by Toni Negri and John Holloway respectively.

However, I believe that the main problem is that these arguments ignore the Latin American reality, where families, rather than individuals, participate in social movements. (When you go to an indigenous community, a landless farmer settlement, or a camp of homeless and jobless, you will always be told ‘we are so many families’). This takes us back to the community, not an essentialist understanding of the community as an institution, but rather one based on strong, direct, face-to-face relationships among people whose daily life is closely intertwined.

The proposals of the left for ‘counter-power’ are always marked by an underlying temptation to become a new power, constructed in the image of the state. The historical example would be the Russian soviets or the Committees for the Defence of the Revolution (CDR) in Cuba, which gradually became a cog in the state apparatus, subordinated to the state and institutionalized.

In the reality of communities that resist, constructed power comes from an entirely different source than those that dominate the great revolutions or within social movements

There is a need to discuss concrete experiences because, in the reality of communities that resist, constructed power (whether a form of self-defence or ways to exercise power) comes from an entirely different source than those that dominate the great revolutions or within social movements. In hegemonic political culture, the image of the pyramid inspired by the state and the Catholic church is constantly reproduced in political parties and unions, with amazing regularity. Controlling power happens at the apex of the pyramid, and all political action channels collective energy in that direction.

There are, however, distinct traditions in which communities channel all their energy into avoiding having powerful leaders, and that reject state-types of power, as French anthropologist Pierre Clastres’s work has shown. A community is certainly a form of power that includes power relations, but its character differs from that of state power. Elders’ councils or appointed and rotating positions are transparent powers, under constant collective control. This means they are not autonomous forms of power; they cannot exercise power over the community, which is a characteristic of the state with its non-electable community, separated from society and standing above it.

In discussing such types of power, we need to differentiate them from other forms of exercising power – which is why I refer to them as non-state-powers. Perhaps the best-known cases are the Juntas de Buen Gobierno (Councils of Good Government) in the five Zapatista regions or caracoles. Women and men are equally represented in the councils and are elected from among hundreds of members in the autonomous municipalities. The entire government team – up to 24 people in some caracoles –changes each week.

This rotating system, as the Zapatista community members explain, gradually enables everyone to learn how to govern. The rotation is carried out at the three levels of Zapatista self-government: within each community by those who live there, within each autonomous municipality through delegates who are elected, rotated and whose mandate can be revoked, and within each region at the level of the Council of Good Government. More than 1,000 communities, 29 autonomous municipalities and some 300,000 people are governed through this system.

Two things are worth noting on the experience of the Zapatista Juntas de Buen Gobierno. First, this is the only case in Latin America where autonomy and self-government are expressed at three different levels with the same logic of assembly and rotation as in the community. Of the 570 municipalities in the state of Oaxaca, 417 are governed by an internal democratic system, known as ‘usos y costumbres’, or customs and traditions, by which Oaxacans can elect their authorities in a traditional manner, through an assembly and without political parties. But even this extensive case of self-government only got as far as the municipal level.

The second characteristic of the Zapatista autonomy is that it does not create bureaucracies, because the rotation system disperses them, avoiding the formation of a separate, specialized body. Something similar happens in Cherán, among the Guardia Indígena en Colombia and the Guardianes de las Lagunas in Peru. In the Colombian case, the cabildos govern a territory or resguardo, similar to the Zapatista regions.

Nevertheless, state involvement through education and health projects, and, especially through state funding of the cabildos, has led them to become more bureaucratic, although there are counter-trends such as the Guardia Indígena, the heart of power for the Nasa people.

The importance of these non-state-powers, among which I include the different forms of self-defence mentioned above, stems from the double and complex dynamic at play in social movements throughout Latin America. On the one hand, they interact with the state and its institutions, as all other movements throughout history have done. This is a complex and changing relation that depends on each country and political reality. They resist the state and the large companies; they make demands, negotiate and often get their demands met. This is typical of unions and most other movements.

On the other hand, these movements are also creating their own spaces and territories, whether by recuperating lands that had been expropriated from them, or occupying idle land in private hands or official institutions, in the most diverse rural and urban areas. The second type of action is more recent and has gained strength in the last few decades, especially in Latin America.

Around 70% of Latin American cities, for example, have effectively been ‘seized’ as rural migrants set up their homes, neighbourhoods and social infrastructure such as schools and health and sports centres. Many of these illegally occupied spaces are legalized by the very institutions that offer them public services. Many others, however, are repressed. Many are made up  members with different goals, such as creating different ways of living, or ‘other worlds’ as the Zapatistas put it. They become ‘territories of resistance’ that may even move towards ‘territories of emancipation’, in which women and youth play a large role.

It’s clear that the economic system pushes millions to create their own spaces and territories in order to survive, because they have no housing or work, or are marginalized for whatever reason. In those spaces, people will seek to achieve the health and education that the system denies them, whether because the services are of poor quality, or because they are far away and difficult to access. In the 5,000 MST rural settlements in Brazil, for instance, there are 1,500 schools with teachers from those communities and trained in state teacher schools.

All these experiences need to be defended. They are not exceptional. One such experience emerged towards the end of last year in the Brazilian city of São Bernardo do Campo in São Paulo where 8,000 families or about 30,000 people have been camping in an urban area. This is the Pueblo Sin Miedo settlement, supported by the MST.

They need water, food and sanitation services every single day. But they also need to defend the space (several neighbours have tried to shoot them), they need to create forms of decision-making and of problem-solving for everyday issues. They have established internal regulations to guarantee safety and teamwork. So, they have created an internal coordination system, to elect their members and support them every day for months at a time.

This is the seed of counter-power or of non-state power. There is no fixed path. Each concrete experience must take whatever path it can, or the path its members choose.

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