Mehrsa Baradaran's research situates the American banking system within a dense network of legal, historical, and political dynamics. Her first book, How the Other Half Banks exposed the vast disparities in access to credit aided by the financial deregulation of the 1970s. Unequal credit—as evidenced by bank deserts and the proliferation of payday lenders and check-cashers in poor neighborhoods—has become a defining feature of American racial and economic inequality. One solution to these disparities, Baradaran argues, is the restoration and expansion of US postal banking. (See Baradaran's 2014 Harvard Law Review paper on the potential of the USPS as a financial services provider.)
Baradaran's 2017 book The Color of Money further investigates institutional factors that perpetuate the racial wealth gap. The book forcefully argues that, in a segregated economy, black banks suffered from the same poverty they were meant to mitigate. Her many journal articles assess the post-2008 financial regulatory framework, recount the forgotten history of government-sponsored banking in the US, and urge a profound reconsideration of how banking systems can be structured to serve public ends.
Baradaran is a contributing editor to Law and Political Economy, co-editor at Just Money, and her recent popular articles can be found in The Atlantic, the New York Times, and the Washington Post. She tweets here.
Banking between States and Markets
The most exciting intellectual conversations happening right now in the academy and among policy thinkers involve reviving theoretical approaches to understanding capitalism. This is happening in history departments, and among economists and legal scholars. Just as the Mont Pelerin Society helped shape decades of free market policy, a new group of scholars and thinkers are now trying to develop a different vision for society that recognizes that values beyond free markets must shape public policies. This scholarship is concerned, broadly, with inequality, climate change, and globalization.
Several schools of thought have emanated from a variety of disciplines that take a similar critical approach to the status quo—much of which grapples with state power and law as a force of economic change. This wealth of new research offers a framework for scholars and policymakers to think about restructuring markets after neoliberalism. By presenting markets as primarily a natural, rather than a social, phenomenon, neoliberal ideology justified the deregulation of financial markets and the weakening of welfare protections in countries across the world. Below, I recommend recent work that, by analyzing the complex interconnections between politics, statecraft, and the economy, reminds us that markets are continually shaped by law, policies, and political power.
- Making Money by Christine Desan is an excellent history of the creation of money as a state enterprise. One of the central, but forgotten, projects of neoliberalism was to exclude money and its creation from the economic calculus, reducing money to a measure of value. Desan’s thorough and insightful history recenters money as the core of state power.
- Democracy Against Domination by Sabeel Rahman revisits the progressive tradition in American history, and its relationship to structural power. The book expertly demonstrates how state interests mobilize resources away from the public, and advocates a renewed movement oriented towards democratization.
- Katarina Pistor’s The Code of Capital shows how law and lawyers create property rights and, consequently, capital. What resources, rights, and ideas can be owned, traded, and valued are a result of law and policy. Having been devised by law and policy, these ‘codes of capital’ can also be revised through the same channels—an essential insight for policymakers thinking about issues of climate change, data surveillance, access, and inequality.
- Tressie McMillan Cotton is one of my favorite writers and thinkers of the moment. Her book, Lower Ed brilliantly exposes the destruction and suffering that has been caused by the clash of neoliberal dogmas—specifically “self-help bootstrapism” and shareholder supremacy. The book is specifically focused on for-profit colleges, but the theories and insights can and should be applied across the economy.