TRANSCRIPT FOR EPISODE 91

Grant: My guest today on the podcast is Sarah Horwitz. Sarah has held several interesting positions. She is the founder of the Freelancers Union and the Freelancers Insurance Company. She was also formerly the chair of the board of the Federal Reserve Bank of New York. She was a recipient of the MacArthur Genius Fellowship. And she recently wrote a book called Mutualism: Building the Next Economy from the Ground Up. And this is where Sarah got onto my radar with some interests that I also have in mutualism. Sarah, welcome to the show.

Sara: Thank you. Happy to be here.

Grant: Great. I want to start with a couple of questions about you. First, like I said, you've had a number of interesting jobs, but the one that seems unlike the others is chair of the Federal Reserve Bank of New York. Convince me that this job makes sense for you, given the positions that you've held in the labor movement, mutualism sector, among other seemingly grassroots progressive causes.

Sara: Well, let me say that I think the people in life that are often the happiest are the ones who have an oeuvre, meaning your life's work. And I would say my life's work is being a mutualist. And that's sort of the through line through which I've sort of done many different things. And I think one of the most important things about mutualism is, first that there's a solidaristic community. Second is that there's an economic mechanism. And third, that there's a long-term view.

And I actually believe that the Federal Reserve is a mutualist organization and it doesn't follow along traditional for profit. All revenues go right back to treasury, and it's got a dual mandate of looking at obviously and caring about inflation. But equally important is about employment. And I really believe that we should be stepping up and into those organizations and doing what we can to make sure that they fulfill their reason for being.

And I would say the other thing is. I learned so much about how the economy works and how much about the economy doesn't work. And we can talk about that in a bit, but I would say one of the most important things is that with those kinds of money flows, there's a really great patient capital market in there waiting to be tapped. So, just lots to learn in there.

Grant: Interesting. One thing that I found most interesting about you also is that you seem to have a lot of different intellectual influences.

If you had to write a recipe that describes the people that have influenced the way that you think, what would that recipe be? A few dashes of this, a cup of that… How would you sort of describe that recipe that makes up your intellectual life?

Sara: Wow. Now that is a great question. I would say I… my grandfather used to have this phrase, and he died before I was born, but I learned so many of his stories, he used to say, “Excuse me, but I'm allergic to bullshit.” And I kind of think that I like people who walk the earth and are really trying to have a very realistic view of life, but also really want to make life better for people and have a strategy. So, you know, can't help but love Bayard Rustin, Sidney Hillman, who is the head of the Amalgamated Clothing Workers Union. Those are two of my biggest people. Dorothy Day would be another. And yeah, I really like the people that aren't two dimensional, which I think is really important right now. And so I would say I've always liked the people that understood how to actually organize things. How money flows work, but also really understand social movements with a very long time horizon. And I think they are the most inspiring. A. Philip Randolph.

Grant: Yeah. That's one reason I love Dorothy Day as well, is she's this incredible social activist, but at the same time, she was a very traditional Catholic and was very obedient to the Church. And so she's hard to sort of put in a particular category, even within sort of contemporary Catholicism. She confuses lots of people both inside and outside of the Church.

Sara: I know, I kind of feel like that's what you really have to look for because I think something that has happened with social media is people really need people to be two dimensional, like are they good or are they bad? And actually, as we all know from the people we love, nobody is good and bad. Actually what's interesting is with your complexity, what good have you done in the world? And that is what I think we should be holding people to that standard. What good did you do? LBJ, okay, not my favorite person – definitely has flaws – but that man passed the hardest civil rights legislation by doing all sorts of things.

And I think that sometimes now people are so focused on these ideas of transparency and power that they don't understand representation and trust. And that's what we really have to get back to. We have to start to think about how we actually build a system that gets done what we need to get done.

Grant: I want to turn now to the question of mutualism. So what is one particular problem in American public life that's especially amenable to a mutual solution as opposed to the economy or the state?

Sara: You know, I think that it actually is the basics: food and shelter. Especially because I think that we've really gotten to some place where progressives really believe that the only thing that's good is things that are done by a central government and people who are free market people think everything good only comes from the market and the free market.

And I actually think that when you see that we have a system, especially with food, that has so broken down that if you're working class, you're just really eating lower quality food. And it used to be that if you were working class, you probably were eating the food of your ethnic group. You probably were eating the food that came from the region that you originally came from. And so we can see all these incredibly bad results of obesity and diabetes. People are eating food with antibiotics and all sorts of processed food, which, it's not an issue of snobbery, but if you live in New York and California, food is wonderful for you. It's farm-to-table and it's wine with no sulfites, which is great. It's just completely not affordable. And if we started to rebuild a system where people actually have the ability to garden and to grow food and grow food together and individually, it would have all these great effects. Probably, number one, antidote to loneliness.

And I think the same for shelter. I think we've gotten to a place where we don't allow people to group together into the communities they choose. Again, both the left and right get it wrong. The left does not understand that it's really fine for a union to build housing that's for union members. And the right doesn't understand that you just cannot have developers develop huge swaths of land for really short-term profit. And we're paying the price and we're about to see the commercial real estate fall apart in almost every major city now. So clearly, we have to get to at least another strategy in the middle of this ruin.

Grant: How do you differentiate the mutualist sector from the nonprofit sector, the NGO sector? People seem to equate those things, but you seem to differentiate mutualism from nonprofits and NGOs.

Sara: Yeah, you know, it's funny. Sometimes I feel like when I talk about nonprofits, it's like starting the movie in the middle because the nonprofits are here. But the truth is that it really is a function of Reaganomics in many ways, where we really outsourced government to the nonprofit sector. And then really in the last ten years, we've got the for-profit sector deciding, in fact, that they love impact investing because they can make a ton of money and do well.

But actually, really, what a mutualist organization is – which is like a faith group, a cooperative, a union – is a group of people get together because they're trying to do something together. Out of their own community, they can generate revenue. So in a church, you tithe. And every religious group, there's some form of collecting your resources. And then you have your own people deciding what to do with that money. And the vast, vast majority of the time you decide based on what the community needs, because if you decide something else, the community is going to see it in a second.

The nonprofit sector, in contrast, is now really designed very often around philanthropy, pretty wealthy people. They hire very fancy consultants like McKinsey and Bain and Bridgespan, and they decide what all of us little people need. Then they develop their funding. And then they implement.

And I think what has happened is this incredible disconnect. But I would say also, and the thing that really worries me the most is the foundation world is now funding ideas. They're funding ideas of the left and the right. And it's getting more and more extreme and hateful, actually. And if you actually ask people what their priorities are, it's education for their kids, it's food, housing, and they really want things that actually work.

And that really worries me. That really worries me.

Grant: One could argue that the real height of mutualism in the United States was the late 19th, early 20th century, with the friendly societies and the mutual aid societies. And these organizations placed a lot of emphasis on teaching people, especially poor people virtues, such as thrift, modesty, temperance. How important is the promotion of shared moral norms for contemporary mutualist movements?

Sara: Well, you know, I think that culture matters for everything. It's not only for good but for ill. You know, what we teach about how to be humans on this earth is probably what we learn from our institutions and the institutions that we create.

And I do like the idea of teaching about self-reliance, because I think being resilient is really important. And I think sometimes some of those values, especially on the two coasts, are really not revered, but I think that in families and when you are speaking to somebody who's young and they're trying to figure out what to do with their life, that's usually the advice you give, really trying to have perseverance, really caring, having really deep empathy for what other people are going through, slowing down, listening to people you don't agree with. I mean, I think those are all the really critical values for people to be able to build something together. They're not the values for how you become an influencer. You know, that's definitely not what you should do if you want to be on Instagram. But that's not really what we're talking about.

Grant: Returning to this question – well, continuing this line of questioning – around mutual aid societies and early friendly societies, was the death of these late 19th century friendly societies a natural or a planned process?

Sara: It's a really great question. Well, first of all, I don't think it was a conspiracy theory. I don't think it was a bunch of people. But I do think that what really did happen is we got to this point where we started to really think that all these things are the purview of government to solve these problems. And they ended up destroying a lot of the sector inadvertently. But now I think it's that culture.

So I think one of the things I really learned when I was at the Fed was I was watching how… I wasn't there during the financial crisis, but I was there during quantitative easing, which is when you're buying the toxic assets of the banks that were going under. And they were a patient investor. So when they waited, that turned out to be hugely profitable. Again, it went right up to Treasury and then Treasury just sent it over to Congress and we didn't think about we could actually do something. And so I started to think there are all these opportunities where we could really be rebuilding mutualism and you could be doing it through procurement where you could say there have to be people who could be providing services in the very local level. And the biggest problem that we have is when government, like with the infrastructure bill, wants to give that money away, they want to give it away in huge chunks because there's a lot to give away. But a lot of the people that are doing really great things on the ground are really building these very small units. And what we have to do is figure out how do you bridge that?

And so I started the Mutualist Society. And you just came to an event, so thank you for that. And starting to really think about how do we systematically start to build up this mutual sector? And I think that there are some very important things happening with technology, with the decentralized autonomous organizations and the distributed ledger. So I actually, and I think people under thirty are really eager to start building things and they started with mutual aid. Yes, there were these ways that markets and government killed it, but I really see a rebirth happening now.

Grant: I'm glad you brought up the Mutualist Society. Yes, I really enjoyed coming to one of those pods. I went to the one on Mondragon and Bologna, I believe. And they were really, really interesting.

To what extent is the Mutualist Society creating strange bedfellows?

Sara: Yeah. Well, the interesting moment right now is I think we're about to be in a serious political realignment, and I think that what is going to happen is that people that actually are much more concerned about what's happening closer to the ground, who care about working people in particular, are starting to need to come together and not be as interested in a lot of some of these more divisive issues, which just because it's divisive doesn't mean it's worthwhile, it just means that there's a lot of disagreement.

And I think with the Mutualist Society, we're really trying to say, look, we have to have one conversation around the three principles of mutualism, but it's heterodox. So, feel free to disagree. In fact, that's a good thing, but don't prevent people from having a conversation that you don't agree with.

And so to your earlier question about culture, I think we really have to teach ourselves how to do that. Like, it doesn't mean that you're a sellout if you sit in a room with people that you don't agree with. And I'd say that's probably the strange bedfellows piece because most people who really do want to improve the world, really want to “tikkun olam,” as we say in Hebrew. The disagreement's not in the goals, it's how to get there. So you can find a lot to agree on.

Grant: One thing I was thinking about as I was reflecting on the mutual societies, is it really relies a lot on sort of online community. But a parallel conversation I've been having with friends is about the nature of solidarity and whether or not it can be done online. To what extent does solidarity require some face-to-face element as opposed to simply an online forum?

Sara: You know, it's funny because if you had asked me that question a year ago, I would have said, “Oh, you can't,” but I actually have changed my mind.

But I would say that the Mutualist Society right now is virtual because we're bringing together mutualists all over the place from Kenya to Bologna to the Basque region to Korea to Latin America and the U.S. So, in order to have those kinds of conversations, we wouldn't have been able to do that had we not had Zoom.

But one of the things I'm really working on with others is in our group, people really want to build mutualism locally. So we're building a way for people to do that and learning how to do that together. So, the strategy right now is really working well virtually, but it will soon have parallel experiments on the ground. And I think both are really important.

Grant: I've spent a little time in Buenos Aires, Argentina, and there's actually a relatively strong mutual sector there in terms of particularly healthcare and social service delivery. So this is my impression: that mutualist movements have been much stronger in Europe and South America than they have in the United States. What's your explanation for why maybe this sort of orientation to mutualism has been stronger, again, in Europe and maybe South America?

Sara: Yeah. Well, first, let me just say one thing. I actually do think it's really strong in America. It's just really different, so let's get to that in a second. But I would say I, too, have noticed that where mutualism is absolutely the strongest, and I would say Quebec with the Desjardins movement, Mondragon in the Basque region, and Emilia-Romagna in northern Italy, and also in Korea, you start to see that there's very much of an insider-outsider culture.

So Quebec really started to build out the French-speaking strategies because they didn't have access to the anglophone banking systems and money. And Emilia-Romagna really started after World War II, when the partisans came down from fighting the Nazis and literally had to rebuild. And the Basque region obviously has its issues with larger Spain.

So, it's where you create your own economy within an economy that is what makes something go from a mutualist organization to an anchor. And when you look, they're a really significant part of GDP of those countries. They're not half of a percent, they're like six and eleven percent of Italy and Spain, so that's pretty significant.

But I would say in the United States, you see it really in the faith communities very strongly. So you see that every ethnic racial group has lending circles. You see it in the black churches from the beginning of time of the AME Zion church, all the way through civil rights, through community development, financial institutions. You see it in our union movement and you see it especially in our agricultural cooperative movement.

But I would say that it's our culture that has made it, you can't see it really in the United States because even though it's a trillion dollar industry, we're like, “Well, you know, it's really not that important.” And I don't know why that is. And if anyone really knows, they should definitely get in touch with me and tell me, because I'd like to know.

Grant: Do you think it has anything to do with – let me take a little chance here; I'm interested in your response – differences in religious history differences between sort of Catholic orientation versus a more individualist Protestant orientation?

Sara: You know, it's interesting because you could make an argument about Catholicism with Emilia-Romagna and Quebec in particular. And I suppose that that's true, but you also see it with Quakers and other Christian groups. You see it with – and I'm sure you're going to get there – health ministries, and others. So I don't know, but I do think there is something in this notion of hyper individuality in the United States where that really sets us up to think about what is success and how do we relate to people and how do we value our time and I think that culturally is really different from Latin America and Europe.

Grant: As you know, and you sort of alluded to this just now with the mention of healthcare sharing ministries, but I've a deep interest in innovative health insurance models. So I'm interested to talk a little bit more about the Freelancers Insurance Company. What was the biggest loss when the Freelancers Insurance Company was closed?

Sara: Yeah. Oh my gosh. Well, essentially the Freelancers Insurance Company was probably, in its era, the closest model to the Amalgamated Clothing Workers, that had built insurance companies and banks and housing. We had set up insurance company and our own medical clinics. But really what we had done is we said, in the United States – and you really can't make this stuff up – we made sense in the 1930s and 1950s to orient benefits and other things around large employers because that was who could pay the bills, but also how people really worked. But as we've now seen, not just with the rise of the independent freelance workforce, which is still a third of the workforce, but now we're working at home and we're working all over the place and work itself is just being transformed. It really doesn't make sense to locate everything at the employer.

Freelancers Insurance Company had modeled this whole system of portable benefits. And we had about 45,000 people having gone through those benefits in a pretty short period of time, like six or eight years, and I'd say that was the structure for how we really should be doing things was lost, but I would say something else that was even more important is when the ACA was passed, I think that there was great hope that the government through regulation, was going to be able to contain the insurance industry. But what was really lost is that other than large employers and very large union benefit funds, there's literally no check on insurance company power. And so insurance companies have stopped being in the insurance business. They're in the reserve business. So when you look at CEOs who… and I'll just say, when they deliver their reports, their number one issue is how their reserves are performing. That's why you're cutting benefits and making all sorts of very bad short term decisions. The Freelancers Insurance Company would always reinvest everything back into our own community. And that was another piece of the model.

Grant: Yeah. So I actually just had this conversation the other day with a couple of men that I just met that are starting a new health insurance company on certain Catholic principles. And, they reminded me and I knew this, but I hadn't thought about it that actually most health insurance companies are basically investment funds. And that they pay for health insurance is instrumental towards their broader goals to invest your money.

Sara: Yes. And I don't think that's cynical. I mean, it's sad, but it's not cynical. It's true. And that's what happened. And after the ACA, it is not a surprise that the insurance companies put themselves into an extremely advantageous position so that they could get rid of all their competition. And the way they did it is they upped the reserves so no new entrants could get in unless they had very, very big private equity backers.

Grant: Right. Yeah, that is a really good point.

So what were the minimum essential benefits in the ACA that ultimately killed the Freelancers Union Insurance Company? I read in the New York times article that it was really the fact that you couldn't meet all the minimum essential benefits and keep the price point and the product that you wanted. What were those minimum essential benefits that you felt like you just couldn't provide?

Sara: You know, it's funny, I'm sure that, because the New York Times wrote it, if I could remember at that moment, but I would say it was really this, and this was just the truth. Or I can remember the moment our actuaries said to us… and remember we were, Freelancers Union's a nonprofit, and it wholly owned its for profit. Right. So we were raising money from the nonprofit sector, not the private equity for profit side. And I remember our beloved actuaries and I loved them. And by the way, I love them because our first year we almost died and our second year we were profitable. And we loved our actuaries who really were courageous.

Anyway, they said, “Sara, you now have to raise between 35 and 55 million dollars to pay into the new ACA insurance market.” And the good news was I knew we didn't have to spend any money on management consultants because I knew there was no 35 to 55 million. So I'm sure that that came out somehow manifesting around some ideas that we weren't going to provide the minimum benefits. But the truth was we were providing probably ten times the quality of what was covered and we had come up with these amazing innovations. Because it was our members’ money, we were fierce. So we set up a sort of a SWAT team when somebody was sick and we would go in and help. And in the for profit side, you'd call it “manage their care,” but ours was more like, “Dude, what is happening? You better be seeing the best place.” And so we could contain costs, but we didn't make people unhappy. We actually supported them.

Grant: So is it that reserve requirement – and not just the one at the ACA but historically the Reserve requirement – that brought an end to most mutual insurance companies in the United States? Is that really the big thing that's keeping broader spread of mutual insurance?

Sara: Yeah. I mean, I think it's, again, a really important thing. Can you imagine going on social media and saying, “The problem is the Reserve” and people being like, “What? That's so boring. That's not how we want to talk about it.”

But the truth is the way insurance started, especially in immigrant communities is you would collect four months of premiums, premium ahead of time, and that was your reserve. And the wonderful thing was you could do an awful lot pretty quickly and get a lot of protection. The downside was a lot of those went belly up.

So it wasn't that you didn't need regulation or something that was a little bit stronger, you could have backstopped it collectively with a government fund for different kinds of risk corridors, etc. But really what happened was that these big insurance companies figured the best way to pull the gates up was to make those gates reserving requirements because they sounded consumer friendly. But they really made it so that there's no more competition in insurance, none. And I couldn't even point to you, any more, except for maybe mutuals and credit unions and some community banks that really can say they're doing something differently, because pretty much they're not.

Grant: So how do you weigh off in this particular context? We were talking about this a little bit, but even more specifically regulation versus… How do you think about the weighing off of regulation against allowing mutualist organizations to really move freely?

The reason I ask is I think within the context of healthcare sharing ministries is there's relatively low regulation of them and that's good. It allows them to be a little bit more nimble and do interesting things outside of the regulatory apparatus of the state. But at the same time, a lot of very bad actors have entered the healthcare sharing ministry space. So how do you weigh off that sort of question of regulation versus allowing mutuals and mutualist organizations to do their thing?

Sara: Yeah. Well, I think it comes down to the North Star. What are you actually trying to achieve? Because, for me, it really goes back to these three principles, right? It's a solidaristic community. They want healthcare for themselves and their communities. They need to have an economic model that is going to make revenues just exceed expenses, and they need to survive in the long term. And whatever the capital that they raise as a group needs to be recycled back to the community.

So in your example, you could imagine having regulators who start to look: where does the money go? Is the money going to a for-profit, are people entering… Same with the association health plans, there were many associations and many bad actors. So what we just did and people, especially sort of more on the Democratic Party side, just really outlawed it. And that's one thing that the ACA did. And, again, you can cloak that in consumerism, but it really prevents having a check on power.

So to your point, I think the answer is, have the North Star be that you want to see X percent of the population covered by mutual systems like they have, by the way, in France and a lot of the Nordic countries, and then have your regulation around the things you want to prevent.

So it's not like you have to just be orthodox about things. You have to be nuanced, but be clear what you're trying to achieve. And I think that's what we're not doing.

Grant: Yeah. It's one thing I've really been wrestling with the more that I study innovative health insurance models, whether it's the Freelancers Union or mutual insurance or healthcare sharing ministries or the insurance co-ops that came out of the ACA that just sort of disappeared.

Sara: No, that, I know a lot about that, but –

Grant: Okay. I do want to return to those co-ops.

But one thing that I keep thinking about is Mutualism in this sector, even possible when the costs are so high, right? Like, how do you really get a human-level health insurance company when all you need is one NICU baby and the whole thing goes belly up.

Sara: Yeah. Well, first of all, that's a really complicated question because one of the biggest drivers – there are several really big drivers of health care costs. And one of the biggest ones is the short termism, right? Like, I'm not, as your insurer, going to invest in you, Grant, because I don't know if you're going to be here in three years, so why should I really spend a lot of money getting your nutrition into shape, or therapy, or mental health, or any of the things you need? Because I'm not going to reap the benefits. That's one.

Another one is that after people come out of the hospital, they get hospitalized again because they're not following medical regimens because they don't have the support. And we know that.

So, you know, there's a lot of these kinds of practical things, but they, again, most of them really flow back to this short termism. And so what you need is number one, to be able to have people stay in a stable system consistently, so that the system itself can keep the rewards over time. So, for instance, freelancers could stay with Freelancers Insurance Company. Letter carriers can stay with Letter Carriers. People who live in this community can be in this one. And that is one big thing.

The second is, it goes to this larger point of risk pools. So, if you just have a very small NICU baby, then yes, you can buy reinsurance, but a few of them and it's rough. But if you are starting to pool these and aggregate these, and then to me, that's a role of government is to start to provide the backup capital. That is what private reinsurance does. Then I think you'd start aligning all these interests because government would really care that people get their mental health, that they are getting massage and acupuncture and other things that we know actually work, but nobody's paying for now because they're in it for the duration. So, I just think we'd have to reorganize that. But you can't make a big change if you can't show some piloting.

And between the Republicans wanting to do association health plans and the Democrats only wanting all good things coming from central government and the big insurance companies, it's very hard to have experimentation.

Grant: Yeah. It's interesting. So there has to be a commitment publicly that the state is interested in promoting localism and mutualism to make that possible.

Sara: Yeah, and you could even have certain states – I mean, that's the thing about insurance. I feel like another thing I learned from the Fed and from running a hundred-million-dollar insurance companies is when you talk to these people who know about money, they have money tools for everything. We sit here talking about risk pools and reinsurance. Well, they have like eighteen different ways around how you protect risk. It's just that they're deploying it for maximum return to these companies. But actually, the risk is real. That's not manufactured. It's how do you manage that risk?

Grant: One thing I've been thinking a lot about with some friends, particularly Jacob Imam, who you know now through the Mutualist Society. We keep wondering: is commercial insurance a movement towards solidarity? Because in some ways you can think about it, you know, you're joining together with other people to defray risk.

Or does it undermine true solidarity? Because in many ways, when you enter a commercial insurance plan, what you actually do is you anonymize and abstract the people that you're coming together with. And so that's why the Amish, for example, don't use insurance, is because they think it undermines solidarity.

So is traditional health insurance a source of solidarity or does it undermine solidarity?

Sara: No, that's really interesting. So, I would say the commercial system now completely undermines solidarity, but at essence, insurance is a mutualistic, solidaristic activity.

And I just tell you, one of my favorite stories about the sick societies, which is a precursor to insurance, was people would pull their money. And then if they got sick, obviously they'd want to call on that money, but there would be a committee of people whose money it was. And they'd go to Joe's house and they'd be like, “Joe, you don't look so sick. Up you go, back to work. We're not paying for you.” So that was their risk-mitigation strategy.

And so we forget – sometimes I think we think solidarities are really nice. But for Joe, who maybe just wanted to take a nice snooze for a day and rest, which he probably really needed, no, it was “Out of the covers for you, dude.”

So, but I still think that we are craving something that is authentic. And I don't think that's just around the topics we're talking about. You go into a big box store and you don't get a warm and fuzzy. And if you do, you're really crazy. But when you go into a store that somebody actually owns and cares about, better yet. The chairs are mismatched, but the coffee's great. It just reminds you of being a human being. And I think that's what mutualism is. It's a kind of warmth.

Like one thing I've learned from the Mutualist Society is we've been running these pods, and people, if they're interested, can go to the mutualistsociety.net, but what is really interesting is we work on an emergent strategy. We, the union cooperative faith people, when you think about your experience in those organizations, it starts with people having a conversation and seeing what is emerging rather than strategic planning where people tell you what to do. And I think that's where we're going to see cultural change.

Grant: Yeah. It's funny that you mentioned solidarity actually leading both to relationships between people, but those relationships have a price. You know, getting Joe out of bed to make sure he gets to work so he doesn't drain the friendly society fund. But a lot of people don't realize that even the bars and the social halls that are associated with these friendly societies, it was so people could socialize, but also it was to create solidarity so that when someone did draw on the fund, they would think twice about screwing over their buddies from the bar.

Sara: No, it's so true. You know, my favorite thing that I've just learned in the last year is about Desjardins in Quebec where he would go to the different parishes and talk to the priests about the local farmers. And he was finding out who was a good risk to loan money to and who wasn't, which makes him really probably the first armchair actuary in Quebec. And that's how you build up a fund. And sometimes we forget that.

And I think that's another cultural difference. What we're saying is people have to be accountable. They have to be strong. They have to try. We know that people will have falls and be weak and get sick. That's human. So we take that whole humanity and we create a system that can work.

The one that I think we're in now is you either have the fiction of the free market that we're invincible, which means it works great when you're young. And even then, not really. Or, you have to focus on the very vulnerable, which is like the Left right now. And so both are fictions. And that isn't helpful. We're three dimensional.

Grant: I want to conclude our conversation with a little discussion of the postindustrial economy. I know you've written about that quite a bit and the Freelancers Union was really recognition that the economy has changed, right? Gone are the days when you and your grandpa and your dad all worked for GM and you had your benefits and you worked your 40 hours a week or whatever it was. And so it's sort of postindustrial economy.

Is the future of unionism found in reinvigorating these legacy unions such as Teamsters and the UAW that were built in industrial economy, or is it creating new unions that emerge in this postindustrial economy?

Sara: You know, I think the reason I've always loved the labor movement is that the labor movement is really a movement about human beings who work, who build what they need at the time. And so, you could see the medieval guild. You could see the craft unions of the workers in the 1890s who were bricklayers and carpenters. You could see the industrial workforce of the 30s with big factories. And at each time, you didn't need to diss what came before because each was stacked either on top of each other or next to each other. Everybody learned from everybody. There was a connection between strategy and goals that is the same.

And I'd say that this is another example where I think sometimes progressives are frightened that if you aren't saying “All workers should be in a collective bargaining unit in a place,” that that's selling out. But I actually think it's the opposite. If you look at… the Starbucks workers are figuring it out. Amazon workers have been figuring it out. Or Google, with CWA has been figuring it out. Freelancers Union, the Graphic Artists Guild, the National Writers Union. There's plenty of examples. It's just, we haven't codified it into law.

And Freelancers Union, that's what we were able to do, figure out this interesting regulatory little thing that really helped us act as if we had laws on our side, and then we could show what you could build.

But you don't really see that. I don't know where that is. I think there are some Republicans that are talking about, they sort of argue that they're pro-labor, but they don't want unions to be involved in politics. And then you have the Left that only wants one model. So to me, it actually is all of the above is the real answer. And to recognize the strength of that and not be so scared about new structures and strategies.

And I would really love to, and dream of an elected official that would start to be able to articulate that. But, the saying goes, you get the elected officials you deserve. So we have to do something to deserve that, I think.

Grant: Right. To what extent do you think the labor movement can overcome legacy racism in the United States and unify the working class?

Sara: Well, that's a big question. Let's just look at the UAW, which, especially with the Ruther brothers, and to their current president, I think has just shown us that they're just stellar and top.

And the labor movement has had a complete legacy of racism and leaving workers of color out, especially domestic workers and in the early days of the National Labor Relations Act of the 1930s.

But what's also been really left out of the story that I have to say really, I don't understand why, is when you look at the Great Migration of Black workers from the South to the North, those workers went to work in auto, steel, rubber, all the industrial unions, which actually still, I'm sure, had their discriminatory issues, but by and large were the most integrated institutions next to the military and really built the black middle class.

So I actually think when you look also at the AFL-CIO through the great leadership of A. Philip Randolph and Bayard Rustin and the Sleeping Car Porters, which is a Black craft union. That was what integrated the AFL CIO, and they in turn, other than the Black community and the Black churches, were the biggest supporters of the Civil Rights Act.

So, to me, the labor movement and civil rights go hand in hand, but like, as we were saying in the beginning of this conversation, there's complexity. We're talking about human beings. These aren't all angels. But they had a North Star, they had an ability to get things done, many of them were genius organizers, and I think we have to take inspiration from that, and we have to not forget that the people who came before us really did build things, and we really have to learn their strategies, whether we agree with their politics or not. If they have something to teach us, let's learn it.

Grant: Postindustrial economy. Is the economy more or less centralized? Is it becoming more or less centralized?

Sara: I think it's a good question because I think it's a very weird economy. I really do, because I am forever really annoyed at the Department of Labor, and even still, in the Biden administration, I don't think they count how people really work, because there still is too much investment in the employee-employer relationship as the only possible one. And so I think we don't really know. And in my work with mutualism, one of the things I've really learned is over and over again, I would hear these terms called “the hidden economy” where people, especially poor people, are bartering and doing all sorts of things to get by that's just not tracked or measured.

And so I think that we have a very centralized, oligopolistic, monopolistic system where capital is insanely concentrated. But I also think there's a lot going on that people are building very quietly and interestingly, but we have no idea really what that is. And my bet is on them, the decentralized ones, because they're doing it out of need, and they really care. And that, to me, are the two ingredients that matter.

Grant: Last question. Is UBI a necessary part of our future as more and more jobs get automated? Is there any way around this?

Sara: I would be for UBI if we could just call it “taxation” and “redistribution,” which is probably a better way to be honest about it.

But one of my concerns with UBI and with impact investing is again, we're saying to really wealthy people, “Hey, how do you feel? What do you want? What's good for you?”

And I actually think the strategic question is to communities. And the question there, it's “What do you need to build? What kind of capital? What are you trying to do? Do you know that your model looks like this person's model? Maybe you should talk to them.” You know, we need a giant Y combinator that starts to build locally. And that's the big incubation group in Silicon Valley that builds startups and they know how to do it.

And so we have to change that focus and UBI just I'm sure there's some wonderful things that you could do with it and I wouldn't want to say no because you never know, but really, I'm not that interested anymore in listening to like the daydreams of the super rich. It's just not getting us anywhere.

Grant: Yeah. It always feels to me a little bit like it's an attempt to placate the masses so they won't revolt against the economic system that we've created for them.

Sara: You know what is just so interesting? There are these wonderful groups like the Black Church Food Security Network with Pastor Heber Brown, who is building gardens in Black churches and then negotiating with Black farmers to come and sell after church so people can leave church and go right into the church property and it's a network of hundreds of churches. I'm so much more interested in that than I am in having discussions about UBI because I think that's part of why do we not see it. Because we'd much rather talk to these very wealthy investors. Our media is oriented that way, reporters are oriented that way. You see what you see.

But actually the real story is just actually quite different. And at The Mutualist Society, we're bringing people together because we see it and it's going to grow. And now we have to start to say, “Government, you need to track this. What are your metrics that we're going to measure you by and elected officials? Did you build mutualism? Are there more cooperatives and unions? And how's the business and workings of the faith community and mutual aid groups? And let's vote you in or vote you out based on how you did."

Grant: Yeah. Well, Sara, that's the end of my questions. I'm really grateful that we were able to have this time together. It was a long time coming. I think there's a lot of mutual interest and I think that, yeah, I'm looking forward to what we might end up doing together.

Sara: Yeah, no, love it. And this was really great. Thank you so much.

Grant: All right. Thanks so much.

Sara: All right. Take care.