TRASHFUTURE - Fill Your Love Gap feat. Jathan Sadowski

Episode Date: September 20, 2022

This week, Riley, Milo, Hussein, and Alice join special guest and friend of the show Jathan Sadowski (@jathansadowski) of the This Machine Kills podcast (@machinekillspod) to discuss microfinance. Despite the Nobel Prizes involved, it turns out it’s just app-connected loan sharking in many ways. We also discuss a mental health app that provides crowdsourced therapy. Is it licensed? Hey, that’s just a technicality. If you’re looking for a UK strike fund to donate to, here’s one we’ve supported: https://www.rmt.org.uk/about/national-dispute-fund/ If you want access to our Patreon bonus episodes, early releases of free episodes, and powerful Discord server, sign up here: https://www.patreon.com/trashfuture *MILO ALERT* Here are links to see Milo’s upcoming standup shows: https://www.miloedwards.co.uk/live-shows *AUSTRALIA ALERT* We are going to tour Australia in November, and there are tickets available for shows in Sydney: https://musicboozeco.oztix.com.au/outlet/event/3213de46-cef7-49c4-abcb-c9bdf4bcb61f and Brisbane https://www.eventbrite.com.au/e/trashfuture-live-in-brisbane-additional-show-tickets-396915263237 and Canberra: https://au.patronbase.com/_StreetTheatre/Productions/TFLP/Performances *WEB DESIGN ALERT* Tom Allen is a friend of the show (and the designer behind our website). If you need web design help, reach out to him here:  https://www.tomallen.media/ Trashfuture are: Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), Nate (@inthesedeserts), and Alice (@AliceAvizandum)

Hello everyone and welcome to this free episode of to your free one. It sure is. It's Riley Milo Alice Hussein and we are joined as ever. Yes, that's right. He's on every episode. He doesn't say much. It's Jathan from This Machine Kills. Jathan, how's it going? It's going well. How are you guys? I'm happy to actually be on mic this time, you know, not just lurking in the background as usual. I was happy to be joined by the sixth host of Trash Future, the fifth beetle. Yeah, yeah, yeah. A rarity but a joy nonetheless. I'm just quite just been killed by this machine. It's really annoying. And boy, you know what? I've been so shocked. I just got killed by this machine and boy am I arms tired. I just got sucked off by

this machine and boy is my dick tired. I am so shocked and appalled by the political developments of the approximate last week since you might have heard from us last that I don't think I can even talk about the things that have shot. The thing is, we're recording this in Liz Truss's second week of being Prime Minister, which means if you're listening to this in a radio you found in the blasted wastes, sorry about all of the everything. Remember to keep taking the iodine tablets and just listening to this as a base of environmental storytelling. Greetings Far Future Museum attendees on the walking tour. Exactly. No, this is, as a matter of fact, I'm going to let you peek behind the curtain just now and hey, what's that? It's the area behind the curtain. It's the TF studio

where we're recording this on Monday, September 5th because a number of us are going to be on holiday, holiday, holiday next week. I've got mirrors on my shoes. I'm looking up Riley's curtain right now. That's right, that's right. And you do not to say of what you see there. If you speak my true name, then you'll be pulled into the ninth dimension. Stop upskirting the trash-shoot you're carrying, that's all you say. So, welcome one and all. Gather round, ye children. Because we're going to talk about something today that has really peaked, it's peaked my interest for a long time. It's something that I know Jathan to be interested in as well. And it really fits into one of our

main themes, which is taking good old fashioned predatory lending and then calling it something else either to make it seem better, make it seem like a different product, or try to make it more credit worthy somehow. Because we're going to be talking about microfinance and fintech and development economics. I know it sounds boring, but my goodness, are there a lot of insane chances of doing some wild things? I know it sounds boring, but my goodness, it also is that. Don't worry, don't worry. We're going to take this dry subject to give it the TFT. Pedatory financing, what if it was called Craig? It's a real, like this kind of culture that we're in where everything is like rebooted. I want like a new crazy form of finance.

Everything has to be a fucking origin story now. We have to find out about how microfinancing started. Yeah, this is like microfinance, but it's got like a cleaner sheen to it and like suffer some reason, no ascents and nails involved. Yeah, this is like, I am looking forward to consuming yet another like MCU thing. A gritty prequel with the Hong Kong and Shanghai Banking Corporation flipping a quarter and leaning against the wall in an alleyway that's just called interest. I mean, this is why historical materialism is at once both always correct and the most dull of correct sciences because I mean, just at this point, a few weeks ago on TMK, we did an episode discussing Noah Colwin had a really great piece in the baffler recently,

tying all of the crypto scam economy directly to the same exact mechanisms of the savings and loan crisis of the 1980s. Like it all looks exactly the same. I mean, as we'll talk about today, a lot of the microcredit stuff started in the 90s, kind of reached this apotheosis in 2006 when the founder of Muhammad Yunus got his Nobel Peace Prize for doing microcredit. It's like Mark said, first is tragedy, then is fast, then is fast again and then fast and still more fast. Exactly. But I was just going to, I mean, the cycles of this shit repeating itself is growing shorter and shorter though. It's like, all right, we have from the 80s with savings and loans to crypto. All right, at least we waited like 40 years, but now microcredit is

reinventing itself and coming, this is where the rubber really hits the road. Why this is actually like exciting and important is because it's coming to the imperial core. It's no longer just the colonial peripheries where we can be like, oh, this is something awful for those people down there. Now it's coming, now it's in your life as well. But before we get to all of that good stuff, I need to ask you all a question. There is a company out there that's called Seven Cups of Tea, and it is a tech company. I would like Jathan to start the guessing of what you think this is. I'll give you a hint before you even start. It's anonymous and completely free. Oh, glorious.

Seven Cups of Tea. Is it some kind of sharing economy thing where people can't afford to have their own tea bags in the UK anymore, so now you have to pass your used tea bag to your neighbor and then they pass it down to their neighbor and so you're reusing a tea bag for Seven Cups of Tea? Weirdly, how that would probably work in the UK is that houses at the start of the chain of tea would be worth quite a bit more than the ones at the end. If you start at the left side of the terrace and go all the way down to the right, you'd be paying a premium for your... And that's called tea bagging. It would say premium location in first third of tea bag of terrace. But no, unfortunately,

it's not that. At this stage of Liz's trust economy, that is basically what we're doing anyway. Okay, so I don't know what it is, but Seven Cups of Tea implies that there's going to be 14 girls. There we go, lands to him. You know what? I don't care what the startup is now, that's what it is for real life. 14 girls, Seven Cups. They're doing like a Wayfair conspiracy theory about this website. This to me, this rings of mental health. I think that... Oh, no.

Yeah, it's the tea thing. The tea thing is like the mental health. That's the ultimate form of checking in on your blokes as you have a cup of tea with them and then they maybe don't kill themselves. So I figure that this is some cod science that they think that if you have like Seven Cups of Tea with someone, it's going to like fix their mental health. That's very close. The tea is actually a reference to a poem by a 9th century Chinese poet about like talking to your blokes. Sorry, sorry. Like ancient Chinese Prince Harry just sort of did me a little bit of psychic violence for a second there. Inviting your blokes around for some dumpling, some manti. The tea is actually a reference to a testosterone. It's Seven Cups

of Testosterone for this effeminate country. The tea and the drag vernacular, you know? Never interrupt your enemy while he's talking about his feelings. Confucius would have loved Instagram Slides and Pastel Colors. He would have loved Canva. So you're close enough that I'm going to carry on. Need someone to talk to? Our listeners are standing by. Oh, no, it's like... So it's like BetterHelp. What if? Yeah, or like Samaritan's. The thing about BetterHelp, it's the Samaritan's but like, you know, an app. But you're talking to someone in the Philippines. Well, that you sort of prefigured a little bit of it. BetterHelp is one of the things they do is they do, as much as, you know, credentialism is,

we all know the problem is credentialism, BetterHelp still does have therapists. Seven Cups of Tea does not use the word therapist. No, of course not. It's vibes. Listeners. Yes. Yeah. I have like some insight into this because I've started like volunteering for the Samaritan. I'm not actually sure I'm allowed to like say too much. So I'm going to be very vague about it because I'm still like in training at the moment. Let's just say Hussain works for the foreign office. No, like I wanted to like sort of give back somehow. Like they try to help people in these times. So, but part of the training, funnily enough, is you're not allowed to kind of say things like, oh, you know, do you kind of need to eat something or do you need to go make a cup of tea or stuff?

On the basis that like the assumption is that many people that will be calling Samaritans in the future will literally not be able to do that. Oh, that's great. So that's like on the guidelines. Like you are not allowed to like suggest they do these basic things that might kind of improve their lives somewhat, which makes me, yeah, it's really, really grim. And it's like one of the least, it's one of like the lesser bleak things on those guidelines. But what I was going to say was because this isn't Samaritans, because this is some sort of like tech o-fishness, is this a place where they do kind of say, why don't you go make yourself a cup of tea if you're having like a breakdown? Well, it's the, so here's the thing, right? The trained

listeners, I've gone to Quora, I've done the Milo Edwards thing of going to Quora. Whenever you have a life problem, what don't you just join the Marines in? Would you much odd that in the American Marines, by the way? Yeah, which was a really weird answer to like, am I too old to learn how to play the guitar? Yeah. So I went to Quora and they said that a lot of the listeners seem to be more in it for themselves and just like turn around and like tell you that you're the problem. No, that's right. Whenever people call me up in the Samaritans, I actually love telling them how much I've achieved in my life. You're like calling up in the Samaritans and you're just like, oh yeah, well I can run a

5k in 19 minutes. You're drinking poor guy water. Maybe you should jump in front of that train if you can find a moving one in Britain. Due to a horrible telephone mix-up, the numbers for the Samaritans and Andrew Tate's cell phone have been perfectly reversed. Have you tried moving to Romania? I think the answer. On the one hand, many people have died. On the other, all of Andrew Tate's friends have learned a lot about themselves and are really thinking about like exploring new directions in their lives. So they say, we live in a world where you can be surrounded by people but still feel lonely with nobody to turn to and things get rough. Yeah. That's right. But being heard is an important part of being human. In 2013,

psychologist Glenn Moriarty saw that there was great power in listening but he knew not everyone had someone to talk to. It started to wonder how can I make being heard a reality for everyone? This is ableist because some people actually cannot listen. Some people are distractible. Thanks to thousands of volunteer listeners stepping up to lend a friendly ear. Seven Cups is here to say, we're here for you. Our call. Nothing else. Just that. Yeah. Our team of 14 women. We are living in a world with an immense love deficit. He's so right. I love GDP. It goes up but so does the love expenditure. I was having a stroke while listening to the Black Eyed Peas. I'd very much like to see a kind

of like 1990s libertarian political cartoon where it's just like instead of the deficit, it's the love deficit. We have to balance the budget. Yeah. Exactly. The love budget. Yeah. I'm sorry. Which means that none of us is receiving the love we need to truly reach our potential. Our goal is to build a support system that can hold every member of the world. We believe that we can fill the love gap for every person in the world. Mr. President, we cannot allow a love gap to develop. We're looking to fill your love gap. That's what we're trying to do.

We cannot allow any love gap to go unfilled. Either because they're an active member of our community or because they are touched personally by someone who has been empowered by our community. We want to touch people personally. Fill your love gap is like a vonk B side, I think. Yeah, that really is. We will reach this goal when we provide 100 million positive and supportive conversations each and every week. Needless to say, I don't necessarily believe they did this. They reached their pinnacle in, I think, 2015 when they had 17,000 volunteer listeners connecting with others. I'm amazed they've been running that long.

Yeah, they still appear to be a going concern, although no one's really writing about them that much anymore. Basically, the way it works is it's like a chat room, right, where you get put mostly in a group with other people, and then a volunteer kind of leads the discussion so you can have group therapy. But the volunteer appears to have been trained by what, again, I don't know this for sure, but I know it's short of like clinical training, and it seems to be like a video or a PowerPoint or some sessions. I don't think they're just sort of their leading thing. I mean, if it doesn't exist already, mark my words that in the very near future,

this will be reinvented, but as a AI chatbot, right? It'll be a large language model. It'll be GPT-3 powering your therapy. They already exist. I don't know whether we covered it on this show, but they definitely do exist. I think we've covered more than one of them, even. In those integrated sessions, because there was some sort of company, we were talking about it in Relate. Again, I don't know whether we did this on the show, whether I was talking to someone in a personal capacity about it. It all blends together.

But part of their mental health support that they got as part of their private health package was, oh, if you're feeling overwhelmed, you can use this service to talk to an AI therapist, who, and the AI is sort of designed or trained in CBT or whatever. Cock-a-Ball torch. Yeah, that's right. So basically, yeah, that does exist. And I think that is used in actually fairly established workplaces. You know how there's nothing new under the sun, right? Because that was one of the first early language models was an AI therapist.

It was programmed in the 70s, and all it did was just reframe the person's question back at them. So you would say something like, I'm feeling depressed, what should I do? And it would say, tell me more about why you're feeling depressed. And it would be like, well, I'm ignored by my husband. Why do you think your husband ignores you? Because he's too busy listening to Andrew Tate. Yeah. You took the words out of my mouth, but now there's two people on this podcast who knows

things about technology. And so tell me the name of it, Riley. Tell me its name. You don't know, do you? I am cucking you on TF right now. Yes, Alice, it was Eliza. God damn it, Alice. Yeah, the two people, you and me.

I was in the process of cucking Riley on his own podcast. Never try and be Alice at remembering things from me. That's the lesson you've learned there, Jason. Jason was about to take over the show, but then Alice saved me. Yeah, 1966 at the MIT AI lab. It was the first ever chat bot. So everything, once again, is just cycles. And it's a perfect replica of my therapist.

Amazing. So this is from one 2015 interview with Glenn Moriarty. If we were to design therapy today, yeah, the evil Moriarty's lame cousin. If we were to design therapy today, we'd think about using technology today because therapy is quite laborious. Moriarty compared the seven cups of tea model to Alcoholics Anonymous. An addict receives help from other addicts, then turns to assist others in recovery. So it's a bit like the UCB model applied to therapy,

which seems only marginally less stupid and possibly damaging. Yes, and mental health. You're essentially paying careful attention and practicing empathy. You're imagining, if I was this person, what would I be thinking and feeling? And try to say that back to the person. The curative thing in therapy is called the therapeutic alliance. It's that process of feeling like the therapist cares about you. And the thing is, I'm all for being a kind of abolitionist.

Things even like the models of therapy which have been made largely to make people okay with being exploited or make women in the 1950s and 60s and subsequently be okay with a family setup that might not be to their advantage. And so on and so on. Yeah, it's coping skills, which is, you know, it's a mixed bag, sure. But and the idea that there is something that might be sort of more, say, commute, that might be more bottom up, community oriented, et cetera, et cetera. Great, perfect.

But the fact is, because this is a company that has to make money, in this is where sort of the turn is in this company, right, is that all of that stuff we described just now in theory could just be, maybe an actual tech enabled way to try and fight alienation a little bit better, right? But this is a reviewer of the concept on Hacker News who wrote this, again, a few years ago. I tried out seven cups of tea and I have a few points of feedback. A lot of feedback. I've been pissing a lot.

From what I think of it, it's apparent that the business model is just that of professional listeners, i.e., few listeners that charge for their service and essentially become an online version of therapists without being therapists and that the way that you get people onto the revenue side is by constantly reminding them during the free sessions to sign up for the paid sessions. But that's therapeutic though, you know? So I guess my basic question is, where does the therapist sort of get involved in this? Only because there's a distinction between someone who listens and someone who's a therapist, right? Yeah, in this case, there's a paid listener and a free listener.

So it's a freemium model of therapy, but there is no therapist. But it's a lot like trash-sheet during the time. But according to the FAQ, whatever you read from the founder... I wish my therapist would stop making bonus moans at me. The founder is talking about therapy and therapy and the therapeutic process and everything, but the foundations of his mod, like the business model or whatever, and just the listener community or whatever you want to call them, that isn't therapy. He's talking about something completely different.

Yeah, but this is because he's choosing it as legally not therapy. That's a regulated profession, you know? It's just quite interesting to sort of blur the lines between the two and how that's just kind of... Yeah, the fact that these are both very, very different things and the relationship between a therapist and a patient is very different from you sort of... A listener and a participant in that. It's just very interesting that that delineation is not evident. Oh, lying back on the couch and being like,

I worry that so much of the stuff that I do is to try and impress my distant father. Yeah, and then I'm like, Alice, why are you in my house? I'm also getting therapy, but it's entirely in the disclaimer voice. Oh, it's illegal. This is not therapy. Yeah. Oh, I'm just listening. It's one of these other things, right? It's one of us. I mean, this has started in 2013 and, you know, like so many things, it's just

someone looked at the immense amount of alienation, the sort of epidemic of loneliness that was bad then and only got worse now. The fact that a lot of actual accredited, whether or not you give a lot of credit to accreditation or whatever, but let's say premium mental health help has been massively out of reach for most people and just said, hey, what if we made this into like a freemium game? And then you observe business ads. Yeah, but also like where the listeners are like, where the professional listeners are not seemingly like not trained very well.

Well, the professional listeners maybe... Well, we can't speak to the quality of the training, obviously, but because I haven't seen it. Well, that's very interesting about your father, but a quick word from our sponsors, NordVPN. I mean, it's the fact that what you're getting is... Yeah, no, it's with all of these things, right? Where a lot of these startups or these companies or these initiatives, I mean, this does tie directly into what we're going to talk about for the other part of the episode, but they actually identify real problems in society, and then they use that identification of a real problem as a shield to be like,

well, you can't fault us for trying to solve that problem, even though their solutions not only don't solve the problem, oftentimes exacerbate, make those problems even worse. Right? I mean, this is the idea of identifying the kind of bowling alone problem of increasing social alienation, a disconnect from people, a kind of inability to see your own worth or value or place in society, and rather than being like, wow, it really seems like society has a problem. Instead, it's like, well, it sounds like you have a problem, right? And because this is a service economy, the only solution is for you to be a customer of our service. Also, one of the things that these types of services have been used for, and again,

when I was sort of working in an office situation, and these types of technologies were kind of being rolled out in the private health care plan, they were often kind of used as a way of... I mean, to kind of put it very bluntly, they were used as a way of mitigating the threats of unionization, which was at these very beginning stages at the time. So for them, the argument that was being made was like, oh, the issues that you're having, which are mostly in the workplace, they aren't really to do with the workplace, they're to do with your own sort of mental health. And if you join this kind of broader community of... I can't remember exactly what the version of therapy that was being rolled out at the time was, but it wasn't that dissimilar from

this one. But really, just the idea of these technologies are very good at framing it as a individualized problem, and one that can be kind of managed through these very highly surveilled technologies. And I think it's even worse than that. So you're... No, I mean, absolutely. You're right to identify that these things are often used as a kind of employee fringe benefit, right? But because it's not a therapist legally, there is no doctor-patient confidentiality, and there have been cases in the US of these services sharing transcripts of the conversations that people have had with these listeners with their bosses. And those transcripts are then used against the employees in the case of sexual harassment

lawsuits and so on. They're used by bosses to defend themselves. So every turn, this future gets way trashier than you think it does. That's right. I wish these people would stop posting transcripts of my therapy online with the caption, look at this gay person. You wish your boss would stop doing that, but you're your my boss, you. Please stop doing that, Riley. Milo, I will not stop. Look, if you're in my Twitter circle, then that's what you get to see as I have things about you in confidence. And by people, you mean your therapist that has a TikTok account? I want to just quickly also say that I have no idea if Seven Cups does any of that stuff.

Legally, et cetera, et cetera. Legally, this is not therapy. It is a general problem with the area. Allegedly, they don't do this. However, it's worrying that they could if they wanted to, possibly. And the fact that it's plausible really says a lot about society, if you think about it. Yes, yeah. So I'm going to move on a little bit to our main topic, the main show of the day. Which is what we talked about at the very beginning, right? We're going to talk about microcredit, fintech, and this tool of quote-unquote development economics. But in fact, tool of, you might say, colonialist domination, once again, returning to the imperial core.

So this... Oh, I hate when it does that. It's been annoying. That's where I live. Yeah, you're officially turning Ken into a satanic zone. Yeah, get that out of here. Get that mess out of here. So I keep all my stuff. So the... Excuse me, what do we have here? Crystalita Georgieva, the World Bank CEO, has said in the FT, you step in the main entrance here at the World Bank, and it says, our dream is a world free of poverty. That's the first thing that hits you.

And I really think we're not going to eradicate poverty unless we have, prepare the sirens, financial inclusion. Because you have good finance, she said, bad finance and ugly finance. Those are the three types. We've talked about financial inclusion before in the context of Southern Africa, and getting a bunch of people bank accounts who didn't have bank accounts, and getting them into these formal financial networks. And it was terrible. We've also talked about financial inclusion with Brett Scott, about how the concept very frequently is not about getting people more able to participate in the economy, but

getting people sort of hyper exploited by, say, card issuers, banks, etc. So she goes on. Getting more marks in the system. You have good finance, bad finance, and ugly finance. You need to make sure it serves citizens and small and medium enterprises, and not just the bank or the wealthy or the chosen few. We will review how well that went. Yeah, look, some people are born finance, some people achieve finance, and some people have finance thrust upon them, which I imagine is what this is going to be about. That was a famous saying from one Andrew Tate.

She says, the case of M-Pesa, the mobile phone money transfer system launched in Kenya in 2007, that no development economist can shut the fuck up about, is also cited as a pioneering financial inclusion instrument. And Georgieva has led what is known to be the African digital moonshot, a $25 billion investment in digital transformation between now and 2030. What I like about technology, here's a fun line, and this is our entry into the issue, is that it starts by asking a question, and is trying to find a solution to a problem. How can I solve this?

What I like about technology is that it starts by asking a question, which is, what is technology? Let's do a dictionary. It's very recursive in that way. How can I solve it with limited costs, and then see if it can be scaled up? So, Jathan, this is kind of our table setting here, right? We're still really believing in fintech and fintech's ugly, older cousin, microfinance that's no longer quite as popular, but that seems quite similar, no?

Yeah, absolutely. I mean, there's a red, thick line that draws through all of these things. And so, I mean, there's a reason why there's all these linkages, and why every time you set financial inclusion, not only did the claxons go off, but somebody jumped in and said, well, didn't we talk about financial inclusion here, or here, or here? It's because this is absolutely a theme. This is becoming a really kind of core ideological principle of global financial

capitalist hegemony, is that this idea of financial inclusion, it's a really, I mean, it's a brilliant turn of phrase, right? Because on its face, who can be against financial inclusion? And because it has a lot of this moral, normative weight behind it, because it kind of has you assume that it's doing good things in the world, helping people. It's often tied to things like lifting people out of poverty. It's the bootstraps by which people can pull themselves up with and so on, that it creates a really nice kind of shroud to then allow a lot of really awful,

exploitative, extractive shit to go on under this kind of shroud of financial inclusion. So the way that it ordinarily works, just a sort of a history of the idea, what it sort of intends to be, right, is generally, if we're talking about financial inclusion, we're also talking about stuff like access to credit or microfinance, and that sort of morphed into financial technology. It's all kind of the same thing, though, which is this idea that people in the global south are poor because of poor institutions and bad information. That is to say that, let's say, Sub-Saharan Africa, for example, is teaming with potential

entrepreneurs and consumers, but because they're not good credit risks, like because, for example, they don't have a bank account and they don't have all of this sort of information that a bank can make a decision on, obviously, they can't be loaned any money. And so what we have is we have this theory, this Shumpterian model, that the way that people do well, that the way that economies are prosperous, is nothing to do with the linen coat thing, but rather that there are entrepreneurs out there who are heroic individuals. It's not about production, it's about mindset. Exactly. Who can combine ideas, raw materials, and bank credit, and that was what Shumpter

thinks are needed to do creative destruction. All of these people don't have access to Andrew Tate videos, for example. And make themselves and everyone else better off by inventing something. And so the microfinance says, well, wait a minute, the idea behind microfinance is, well, hang on a sec, and this comes out in the 70s, and that's pretty, it's sort of the ideas of this begin in the 70s, is that, well, wait a minute, what we can do is we can give someone a loan of like $100 or like 75 pounds or whatever, they can use that to buy a selling machine, to buy a few goats, and so on and so on.

A line of cocaine for inspiration. And then a case of sparkling water. And then what they can do with that is then they can start, say, doing economic activity. And then they can, all of a sudden, this maybe like subsistence small holding farmer has a few more things that they can do to generate more money, more money will flow in, and so on and so on. This is like basically the theory. And one of the interesting things I think as well is that a lot of this is, a lot of this transformation was coming on the heels of an energy crisis,

which was basically the thing that kind of, as the develop, as the sort of formally colonized world was emerging from being colonized, a lot of what really knocked it off course, in terms of like, say, development, as you might call it, was the 1970s energy crisis, which created this, which basically meant that they had to all of a sudden, borrow at huge rates on global markets, and then sort of fucked with those government finances. It's a very, very, very complicated story as to how the West underdeveloped the global South, but that's one of the big things that happened. And so just keeping your mind, right, that one of the sort of the neoliberal term in development economics

was in part a response to an energy and financial crisis. Say importantly, it's not past to inside there, how the West has underdeveloped or undeveloped the global South. It's a jaren, it's continuing, how they continue undeveloping the global South. And you're exactly right. There's a lot of complexity in terms of an energy crisis, financial crisis, but I think there's also quite simple dynamic of tying it back to the colonial power of around this time as well, there was a lot of decolonization happening where countries in the global South were coming formally at least out from under the yoke of their European dominators. But at the same time, they have been held essentially as chattel

states to these European countries, not allowed to be given any of the infrastructure resources development needed to actually stand on their own once they're let free. They're 40 acres and a meal of reparations. And so when these European countries essentially do capital flight out of the global South, where they say, you want your freedom? Well, fine, fuck you. We're taking all our capital as well. And then how do you like your freedom? And now when all those countries in the global South start collapsing because they don't have any infrastructure to support themselves and Britain and France and Germany and other countries took the scaffolding away and then come back a couple decades later, a decade later and say, wow, really shitty country

you got here. Why did you ruin it like this? That's so awful of you to do. I mean, I guess since we're so beneficent, we will give you some capital to help do some development here, but you then have to allow our corporations to be the ones that own everything, our banks to be the ones that own all the capital lines and so on. And also you have to pay it back, by the way. Pay it back with the usurice interest rates. So basically, this is the basic idea of how microfinance is and was supposed to work. And now it's just been reskinned as fintech, right? Yeah, that's exactly right. I mean, it's as the tech crowd often does is they're the Johnny Come Lately's to an already existing kind of system of oppression, exploitation, domination, extraction,

and so on. And they say, wow, why haven't we got a taste of this yet? But they woo and seduce people like the World Bank and the IMF with their promise of, we can do this but better because we're doing it with digital, right? We're doing it with crypto, we're doing it with technology. And so that's why all of these financial inclusion schemes have not been working is because all of you are policy wonks. You've been thinking about this in terms of policies, right? Instead, you got to think about these things in terms of technologies and then they'll actually work. Showing up at the World Bank with my PowerPoint presentation, which is just one slide and it said people in Global South not going on computer and I'm given an eight-minute

standing ovation. Not making TikTok. Why not make TikTok? Milo, you joke, but that's exactly what these people do. And then they're given billions and billions of dollars by the World Bank and the authority to go and get all those people on computer. Exactly. Yeah, we need a hype house in the Democratic Republic of the Congo. The problem is that the UK is advanced because computer says no. Countries in Africa are left behind because they don't even have a computer to say no. There are not enough people in Congo with email jobs and that's what you need. Everyone needs to have an email job, right? So, for example, something like M-Pesa, right? It starts as a sort of way for Kenyans to bank by phone, but then as more and more

features get added onto it, all of a sudden, you're getting people, for example, overdrafts. And then what you're doing is you're exposed and the idea isn't people can't be trusted with debt. It's more like when you basically force people in precarious financial positions into a situation where they have credit, you will almost inevitably force quite a few of them into a situation where they then have to deal with high interest rates. In the case of some microlenders, a lot of, say, practices of dubious ethics to get that money back and so on and so on. Yeah, and most of all, you know that as a financial operator, you know that's what you're doing because you have to. Yeah. It's not something that you can do by accident.

Then in Kenyon, Dave Courtney, around to your house. Yeah, precisely. Yeah. I'm not going to do the voice. I quickly want to talk about M-Pesa because there's a lot going on here. So, M-Pesa was founded in 2006 and launched by, founded and launched by SafariCom, which is now East Africa's largest corporation. It's a telecom monopoly and financial service provider. And you're exactly right. M-Pesa is a mobile-to-mobile money transfer platform. Importantly, it's not a bank. People do not have formally, officially, do not have bank accounts with M-Pesa or with SafariCom. Where have I heard this story before?

It is merely an intermediary that facilitates the transfer of payments, which means they are not regulated like a bank. They were given by the central bank of Kenya. So, SafariCom is a Kenyon company. And it's essentially the reason why Kenya is known as Africa's, quote, unquote, Silicon Savannah is because of the rapid rise of companies like SafariCom. But the central bank of Kenya permitted but did not regulate the telecom's entrance into the financial sector. They officially gave it a letter of no objection. And because it was meant to just be a payment transfer system, but this is exactly where the kind of monopolization combined with unregulation leads to all of the famously amazing and awesome outcomes that we're so familiar with. And so, it is you're exactly right,

Riley, that SafariCom makes huge amounts of money marketing itself as doing equity and financial inclusion and these kinds of things. And they did actually get a lot of unbanked people on to, you know, with profiles on the system that allows for really easy transfer of money in a way that was not as easy in an all-cash society. However, SafariCom, because they're not a bank and because you don't have a bank account, they're just an intermediary, they charge really high facilitation fees, which would be interest, if they were counted as interest rates, would be illegally high interest rates. And you're exactly right through that. They've also then rolled out all these other extremely lucrative products to help facilitate other things. They have their own

loan system now called M-Shori, so you can get these micro loans directly through your M-Pesa account. And then they also have an overdraft product called Feliza. So, when you overdraft your M-Pesa account, then SafariCom will essentially loan you some extra money to cover that overdraft, but of course, at a really high facilitation fee rate. And so, they've created this whole ecosystem of financial products that are not regulated as banking products, but act essentially as that. And the idea then that it is very important for poverty alleviation to essentially trap people in this system seems to me to be perverse until you remember what the World Bank and IMF really are. Exactly, exactly. I mean, this is what financial inclusion means.

It means, you know, you're not locked in here with me, right? Like, I'm locked in here with you or whatever. Like, you know, that's what it means is it's not let's get people into the financial system so they can lift themselves out of poverty and do all this, you know, economic fairy tale bullshit. It means let's get people into the financial system so that the banks and telecoms have more people that they can enclose, trap, exploit, and extract at every single turn. And essentially, control, right? Control is the operative word here. It's control via inclusion. You're complaining about your credit card debt, and yet there's children in Africa who would love to have credit card debt. So, this is from an article actually you sent me, Jathan, in Boston

Review by Kevin Donovan in Emma Park entitled Perpetual Debt in Silicon Savannah. And I thought it's got a very, it has a very, very sort of powerful paragraph that I wanted to read. This is in the context of talking about Tala and Branch. And I believe we've actually spoken about at least one of those apps before just coincidentally. This is one of the, but this is one of the Tala was the company that believed all data is credit data. So, they're the ones that will say, well, we're going to decide how much of a loan to give you based on if you have last names for people in your phone, right? They hover up all your data and stuff like that. And so, this is a paragraph from that article. Crucial to the FinTech business model is an

endless stream of nudges, exhortations, and incitements to borrow. Unsolicited text messages interrupt people throughout the day, enticing those in need to borrow at extortionate rates. Many pointed to the high rates of borrowing on weekend nights as evidence that loans are marketed and taken in moments of inebriated revelry. Those at default risk receive just as much hectoring. A University of Nairobi graduate told us how embarrassing it is to be in a meeting or job interview and have repayment reminders pop up on your screen. And it's so embarrassing, they said, they text you all the time and you get stressed. Another one of these apps, Ocash, took this logic of stigmatization even further, harvesting users' contacts and calling

bosses, parents, and friends to shame defaulters into repaying. And this is exactly how microcredit works in places like Latin America and India, where it was marketed as this huge thing that pulled so many people out of poverty. It was a system literally designed to use social shaming as a tool of debt collection. And this is, I think this is where it's worth it to sort of pull this. Yeah, because I was talking about countries that had a deficit of Dave Courtney's. It's also... Your mom's quite disappointed in you. This is, I think it's worth sort of pulling this up, but right about reminding ourselves what this whole thing, this neoliberal approach to poverty alleviation was supposed to be,

based on all of these insane ideas, right? This is from a capsule biography of Muhammad Yunus and how he came up with the idea in the 1970s. It began in 1976 when Yunus saw basket weavers living in poverty despite their skills. Considered poor credit risks, these artisans were forced to borrow money at usurious interest rates. So from his own pockets, Yunus made a loan to a group of women who repaid the funds and for the first time managed to make a profit net of interest. He then realized that by means of small loans and financial services, he could help the poor free themselves from poverty. Then, and this is what Yunus then wrote in 2011, looking back on when things went bad in 2005. Commercialization has

been a terrible wrong turn for microfinance and it indicates a worrying mission drift in the motivation of those lending to the poor. Poverty should be eradicated. This should not be seen as a money making opportunity, which is a bizarre thing to say for a fundamentally neoliberal mission, right? Which is that I cannot believe that my commercial solution to poverty was tainted by commercialization. Yeah, how come my plan to get everybody banked made people start acting like banks? And when we talk about, and in so many cases of talking about using, say, fintech to do this same activity, right? This same activity as microfinance fall into that same trap because really what you're doing is just as microfinance, it's just debt. It's just debt.

Whether you call it microfinance or not, you're getting someone into debt. If it's fintech, you're just getting someone into debt with computer. And the whole thing was like, well, it's not like bad debt like people in the global North have, which you get by being profligate and spending on your credit card or that is... No, I mean, this was part of the same thing as the social shaming. The other end of that was every motherfucker who got a Nobel Prize in economics for some form of microlending did so on the basis that it was this great community supportive network. But it's all just debt. Strangely. So like the underpinning thinking about it is that the fintech is different because

instead of giving out the loans on your bad screen, you're actually giving out loans on your good screen. That's right. And the thing is that we call it the same thing. We call it different things, but it is the same thing. It's sort of morally in a different category to sort of global North debt, even though again, it's all debt. And the reason it's morally in a different category to global North debt is that there is some imaginary that the world is full of these Horatio Algiers who just need to be given some bank credit. And then unlike the sort of feckless workers of the global North, people in the global South are going to use that to dutifully become on Zoa. But the evidence shows that again, if you give people access to credit,

what they'll tend to do is what most people do with credit on a daily basis, which is provide for the necessities of life. So essentially, what has happened is that a... That was bastards. They're buying treats for themselves like Brad. And so basically, this is from Bloomberg. Over $50 billion of committed funds in 2020 into microlending, they're still doing f***ing lending as poverty alleviation, show that the infusion of capital has continued despite now annualized interest rates. And then this is my editorial, not from Bloomberg, often just for doing things to not die or like to pay for a wedding or whatever, and not for something that's going to then make you a good performing

credit risk, like starting a business or whatever. The infusion of capital has continued despite annualized interest rates that can cap 100% and aggressive debt collection tactics that have left some borrowers homeless. So it's not even that after this entire mode of development was discredited, that people stopped doing it. If they're doing it more than ever, and it's still being hailed by the World Bank as this great thing, even though again, what we're doing is essentially loan sharking people for their daily necessities. Yeah, because I mean, at some point, they have to say the quiet part loud, which is that they don't actually think that this is going to solve poverty or anything like that, that they know...

It's not only that they only have one hammer, and so they're going to keep hitting that nail, but they also... I think they know deep down that this is a tool of financial hegemony, more than it is a tool of financial inclusion. And they're ideologically like zealots and extremists and dedicated to this idea of through banking, through capital, all things as possible. And that's essentially what microcredit is cast as, is as a form of a redistribution of capital to the proletariat, not even the proletariat, the peasantry. We're getting third worldism on this, but of course, that's not how it actually happens at all. It's the stories of entrepreneurship or bullshit. For the most part, what we find is it's used for, as you were talking about Riley,

quote unquote, consumption smoothing, which is that buying the everyday necessities of life, not starting some new business that's going to turn you into a millionaire, a billionaire. And if the World Bank and IMF really actually have to... In order to deal with these contradictions, it won't be long until the IMF and World Bank officially partners with Klarna and Afterpay to bring financial inclusion and microcredit to the UK. This is the next step if they're going to actually live up to their ideology. People in the Democratic Republic of Congo deserve pretty little thing. They need the new Molly May collection. They need boo-hoo men. And so you wonder, well, okay, a lot of these loans are issued to the World Bank,

a lot of donor countries as well. But a lot of the lending also comes to commercial banks and so-called impact investors. So, Citigroup lent over a billion themselves. This is also from Bloomberg. Sumitomo Mitsui Financial in Japan has invested multi-billions in various Asian firms. And then J.P. Morgan is, in 2019, sold $175 million in collateralized microfinance obligations. So, we're still doing collateralized debt. It's just not obviously at any kind of the same scale as the last time we heard those words. But these things are ordinary financial instruments, but what we expect because of some kind of moral sheen, they will act in some different way. The result will somehow be different than when we do the same thing here.

It's very funny to be a finance guy and you're like, yeah, I'm long on Kenyan basket weavers. I've got a bunch of those in my portfolio. It's beautiful. That's actually a perfect segue. I wanted to reference, so there's a really great article that came out recently called Subprime Empire. It's by a friend of mine, Carly Schuster and Sohini Carr, both of whom are anthropologists who do these really in-depth ethnographies of microcredit. Carly in Paraguay and South America and Sohini in India. And this essay on Subprime Empire links, I mean, it just beautifully ties in all the things that we're talking about. I just want to quickly read a

short paragraph here where they say, quote, financial players on Wall Street may well have an interest in setting their new financial creations loose in a sandbox kept well apart from global pools of capital. In fact, our field work among regulators and fund managers reveals the appeal of experimenting with fintech in markets that are understood to be separate from the global mainstream. However, accumulation also takes place through certain processes of inclusion. Subprime Empire then is a way to understand not only how the active inclusion of bringing the poor into the circuits of finance has become a normalized practice, but also that it is central to capitalist experimentation and expansion. So in other words,

when we talk about like J.P. Morgan Chase and these big Wall Street banks getting into this, this is a case of yet again, capitalist experimentation with untested, unregulated innovation in the global south so that they can work out the kinks, figure out how to make it maximally exploitative and stable, and then bring it home to the imperial core with a different marketing, a different packaging, but the same exact product. There's no way that there would be some kind of widespread, I don't know what you call it, buy now, pay eventually, maybe we could think of something a little more of a zippy for that. Again, as we've said, the imperial core is that's where I live, nothing bad can happen there. So what essentially we're talking about,

and you know, this is also especially relevant to the UK, I mean, as if you want to talk about a country that is very quickly being described as becoming an emerging market economy largely connected to our high inflation compared with paradoxically GDP shrinkage, which that shouldn't do that just so you know. Oh, yeah. Oh, no, I hate when my GDP is shrinkage. I'm a GDP shower, not grower. But also like, let's say, British consumers now with record amounts of credit card debt since 2005 as of this month. And already, you know, these let's say tools of consumption smoothing that are kind of just to the side of what you might call debt properly understood are in fact very quickly making their way back to the imperial core, right?

Yeah. And in every single way, I mean, it's not, you know, buy now, pay later is something I talk incessantly about because no one else seems to. I mean, you know, trash future and TMK are actually fairly unique in the landscape in terms of the amount of attention that our shows have given to critically talking about and understanding and recognizing that this thing is not normal and it's not old. It's like a really weird new thing that suddenly became totalizing and is expanding. It's no longer that you use clarinet to buy a new pair of shoes or a new dress because it's like, it's helping you smooth the payments of a luxury item. You know, I was just, I spoke to a reporter from the New York Times recently as quoted in a really good piece that came out talking about

how buy now, pay later has been moving very rapidly into the groceries sector, right? So it's like. That's not where you want that to move. No, you don't want clarinet to be this. Well, I'm very thankful that we don't have a prime minister in the UK who are, who actually, who isn't like an evangelizer for these types of apps and services. She recognizes the problem of the high end consumer debt incentivized by tech companies and she has put a stop to it on week two of Liz Truss's premiership. She's like straightforward buy now, pay now, pork market. You see the pork, you buy the pork. I like buy now, pay later because I always want to like have the latest loaf of bread. So you want to go on Breal flexibly and go on to bread. New loaf,

just get your unboxing of the new one. Get that like, get that seeded bloomer. Rare edition. This is a quote from that article you talked with the New York Times. Josh Roberts didn't think twice about taking it alone to pay. How come like people who take out loans to pay groceries are always called like Josh Roberts and people who start like insane startups are called like, you know, like the Cortland Cronk or whatever? Like, what is with that? Yeah, Maximilian from Quink. Alpha and beta names. Glenn Moriarty has never taken out a loan to buy a carrot. And yet here's fucking Glenn Moriarty is buying the latest Hovis collab with your I love the supreme bloomer. So Josh Roberts didn't think twice about taking it alone to pay for

groceries. It was early in the pandemic. He was making 1650 an hour working in Cincinnati. We were just not making enough to live, he said. So he started buying groceries online using a virtual card from Klarna. Soon, Mr. Roberts was spending beyond his means on food. I already had about 11,000 in student debt and another 2,000 in unpaid medical bills. And this is the quote. This is the quote. I just something in me just revolts at the idea of spending too much, like living beyond your means in relation to food when you're not buying like fucking foie gras or something. Not living is like a dissolute aristocrat. Yeah. Imagine having three meals a day. My big, my big fucking squeezy ketchup

bottle full of Lordinum or whatever. That's living beyond your means in terms of food. Buying like to cut down to one, two or a land a day. I can't even afford the anchor chips anymore. But buying the kind of food that like would not give you gout immediately from eating it. That's not like living beyond your means. I should be more than twice a week is living beyond your means. This is what Josh Roberts said. I don't want to go in debt for a carrot, but you've got to do what you've got to do. I like that he's kind of framed that in an almost inspirational way. Like, you know, kind of bad times create strong men. Yeah. And so, you know, I mean, expensive carrots create wealthy capitalists. And so, you know, I think the idea that these

things, these calling debt something else, it's worked for companies with companies like Greensill. It's worked for sort of rebranding development aid to be more sort of palatable in the sort of hyper-financialized neoliberal world. And, you know, the idea of easy access loans basically, constantly reminding you to get them, that you end up spending on the necessities of your life is now happening here. I mean, if you want to know, it's not to end it on a bit of a dark note, but like, if you want to know one of the reasons that microfinance more or less hit a moment of crisis in the early 2010s, it's because there was a raft of suicides in Andhra Pradesh related to unpayable microfinance debt that was being collected incredibly aggressively, in some cases,

by the same organizations that originally had a very philanthropic bent, but that were just loan sharks the whole time, right? If you'd like to end it on a slightly lighter note, the carrot thing just reminded me of an Aidan Jones story from years ago about how he was having sex with a girl. And she's like, I want you to shove something up my ass. And so he goes and like looks in the, I can't remember if it was at his house or her house, because he's like looking for something. And like, the only thing he could find is a carrot. He uses the carrot, they like, loop it up, whatever. I don't know. They use the carrot, it's fine. And then he was telling the story to someone and they said, did you put it back? These carrot prices.

He's got to put the ass carrot back. That's a double use carrot. You peel it before you eat it, it's fine. I'm just seeing a world six months later where like a former Tory MP goes on Good Morning Britain to be like, you can wash the ass carrot and then use it. And then Martin Lewis just combusts. Yeah, that's how he's going to go full mission mode. Like Edwina Curry's going to like bring a courgette and be like, this could be used for, yeah, you can use this for a lovely meal and a great night. Martin Lewis rubbing his temples. Can you can't put a carrot in your ass? It's not got a flared base. You can't have sex before dinner. That doesn't... Yeah, he's going to like go bizarre. I support him.

Anyway, look, I think that's... I was racking my brain trying to come up with a flared base joke and Milo just came in with way better than I could do. That's why he's the professional folks. Anyway, look, I think that's sort of, for me, that's like the story. Look, this is the last time we're going to talk about microfinance. It's not the first time. It won't be the last time. Probably not even the last time with Jaython. But I think it's an interesting story, which is how this came about, what it meant, what it was supposed to do, what it became, the consequences of it, and the echoes you can see in this thing, this alternative finance, this fintech inclusion, whatever you want to call it, making debt easier, easier, more accessible,

cheaper, and sometimes less regulated, creeping back into the imperial core from the global south. It's why these things are... It's not that it's better in the global south. It's bad there, and it's bad here. It's just that it's the kinds of things that... Yeah. Did you know... It's a test bet. For men who are five foot six and below, it's actually normal finance. Yeah. That's right. That's it. It's normal finance. If you want to hear my dark prophecy, though, I know we just ended on a fun note, but I'm coming

from TMK where we never end on a fun note. The only my dark prophecy, my suspect is that in the very near future, the buy now pay later companies will lobby governments to make buy now pay later debt exempt from bankruptcy laws in the way that in the U.S. student loans are exempt from bankruptcy laws because so many people will have so much of this microcredit debt in seemingly wealthy countries that they'll be trying to escape through bankruptcy. I foresee, and there's so much lobbying by these tech companies now and with the government that I suspect in the near future, we will at least see an attempt to make your buy now pay later debt exempt from any debt relief. I'd like to issue another dark prophecy. I agree with that one, but in that one,

let's say the dark prophecy on the discharging the debt side. I'd like to make a dark prophecy on the issuing the debt side, which is that at some point, a state government, probably Kansas, or just the UK government, is going to include microlending in its get through the cost of living crisis official advice and may even end up creating some kind of government scheme where it uses its own money to try to crowd in private finance into more of the microlending sector. You're not suggesting that Liz Truss would get involved in some kind of cockamamie scheme to help people with a cost of living crisis that only makes it worse. I mean, come on.

I mean, look, we've experienced two weeks of her of her premiership, and boy, all I can say is based on what we've experienced, you can draw your own conclusions. Hancock? Foreign secretary? I mean, stellar appointment. God, I wish. Imagine Matt Hancock in Amazing with Vladimir Putin. You must imagine Matt Hancock happy because you can't imagine another one. Yeah, I may disagree with him on many things, but that man knows how to do a judo very well. Yeah. So, all that being said.

Vladimir Putin or Matt Hancock? Or Mark Zuckerberg. All that being said, I'd like to say everyone listening to this, you should check out this Machine Kills. Unless, of course, Jaython has crossed me in the last two weeks, in which case, you shouldn't. But no, you very much should check out this Machine Kills. It's a fantastic show. And Jaython, thank you so much for coming and tying out with us today. Always a joy. And to you also back there in podcast land, I was talking to you, then Jaython, now you again,

is to remind you that we have a $5 a month Patreon. There is a second episode every week. So, you can sign up to that to get those. And you can buy now, pay later at the end of the month. That's actually not strictly true. You will be charged when you sign up. I think that's actually true. So, you subscribe now and you pay later. Yeah, you subscribe now and then you pay moments later. Buy now, pay immediately.

Yeah, that's our new phone. But if you in Pesa me $3 a month, I will send you the episodes. I will do arbitrage on the Trash Future page. Yeah, but you do have to be via M-Pesa. Jaython's not interested in getting anything. So, yeah, we will see you all on the bonus episode. Bye, everyone. Bye.