From paper to plastic: electronic benefits transfer as technology of neoliberalization

ABSTRACT

This analysis refocuses attention to the relationship between neoliberal government practice and co-conditioning rhetorical consequence through examination of Electronic Benefits Transfer (EBT). Operating by a plastic card similar to consumer debit cards, EBT opens new possibilities of consumption for those receiving Food Stamps. Rather than simply signaling a disciplining governmentality, electronic food assistance functions as a technology of neoliberalization, proffering the potentiality of social equity while (re)instantiating class boundaries. I appropriate the finance term securitization to specify the disposal of liberalist logics that transform the poor from economic risk to state asset while also leaving the conditions of poverty and food insecurity unchallenged.

KEYWORDS:

• Food stamps
• post-Marxism neoliberalism
• securitization
• food security

Acknowledgements

Kathleen Hunt is an Assistant Professor at Iowa State University. She would like to thank the editor, anonymous reviewers, and Kevin DeLuca for their assistance in the development and revision of this essay.

ORCiD

Kathleen P. Hunt http://orcid.org/0000-0003-2625-6429

Notes

1. Robert Asen, Visions of Poverty: Welfare Policy and Political Imagination (East Lansing: Michigan State University Press, 2009).

2. US Congress, House of Representatives, Subcommittee on Domestic Marketing, Consumer Relations, and Nutrition, Impact of Regulation E of the Electronic Funds Transfer Act on the Food Stamp Electronic Benefits Transfer Delivery Systems, 102nd Cong, 2nd sess., 1992, 1.

3. US Department of Treasury, “From Paper to Plastic: The Electronic Benefit Transfer Revolution,” Washington, DC, 1990, 1. Piloted in 1989 in 7 cities, states were given the formal allowance to opt in for EBT by the 1990 Farm Bill; by 2002 electronic benefits became mandatory in all states, for all welfare programs.

4. Asen, Visions of Poverty.

5. See the US Treasury's report, “From Paper to Plastic.” Along with threats of assault and theft at state welfare offices, letter carriers and postal staff were also vulnerable to assault upon delivery of welfare checks.

6. Wendy Brown, Undoing the Demos (Brooklyn, NY: Zone Books), 30.

7. Neil Brenner, Jamie Peck, and Nik Theodore, “After Neoliberalization?,” Globalizations 7 (2010): 330.

8. US Department of Treasury, “From Paper to Plastic.” The term “unbanked” refers to individuals without access to bank accounts.

9. See the US Treasury's report, “From Paper to Plastic,” for a full description of EBT bank accounts and how the “secure card” is processed, 43.

10. US Congress, House of Representatives, Impact of Regulation E, 9.

11. US Congress, House of Representatives, Subcommittee on Regulation, Business Opportunities, and Energy, From Paper to Plastic: Electronic Benefit Transfer (EBT) Programs for Food Stamps and Other Federal Benefits, 102nd Cong, 2nd sess., 1992, 29.

12. Kane X. Faucher, “Veblen 2.0: Neoliberal Games of Social Capital and the Attention Economy as Conspicuous Consumption,” tripleC 12 (2014): 40–56.

13. Josh Heuman, “‘Let’s Light this Candle’?: Early Online Investment and the Regulation of Freedom in ‘New’ Work Forms,” Communication and Critical/Cultural Studies 9 (2012): 146–70.

14. Benny LeMaster, “Discontents of Being and Becoming Fabulous on RuPaul’s Drag U: Queer Criticism in Neoliberal Times,” Women's Studies in Communication 38 (2015): 167–86.

15. Brenner et al., “After Neoliberalization;” Carolyn Hardin, “Finding the ‘Neo’ in Neoliberalism,” Cultural Studies 28 (2014): 199–221; Christian Garland and Stephen Harper, “Did Somebody Say Neoliberalism?: On the Uses and Limitations of a Critical Concept in Media and Communication Studies,” tripleC 10 (2012): 413–24.

16. Garland and Harper, “Did Somebody Say Neoliberalism?”; David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2005); Ronald Walter Greene, “Another Materialist Rhetoric,” Critical Studies in Media Communication 15 (1998): 21–42; Ronald Walter Greene, “Rhetoric and Capitalism: Rhetorical Agency as Communicative Labor,” Philosophy and Rhetoric 37 (2004): 188–206; Ronald Walter Greene, “More Materialist Rhetoric,” Communication and Critical/Cultural Studies 12 (2015): 414–17; Aihwa Ong, Neoliberalism as Exception: Mutations in Citizenship and Sovereignty (Durham, NC: Duke University Press, 2006).

17. Harvey, History of Neoliberalism.

18. To clarify, the terms “class” and “class relations” throughout this essay should not be read in reference to an essentialized subject position, but rather to the process by which rhetoric enfolds relations of power that (re)articulate social categories of difference.

19. Harvey, History of Neoliberalism, 9.

20. Garland and Harper, “Did Somebody Say Neoliberalism?,” 414.

21. Kristin A. Swenson, “Being in Common: In Celebration of Ronald W. Greene’s Woolbert Award,” Communication and Critical/Cultural Studies 12 (2015): 404–9; Greene, “More Materialist Rhetoric,” 405.

22. Brenner, et al., “After Neoliberalization?”; Eran Fisher, Media and New Capitalism in the Digital Age: The Spirit of Networks (New York: Palgrave Macmillan, 2010); Harvey, History of Neoliberalism; Andrew Glyn, Capitalism Unleashed: Finance, Globalization, and Welfare (Oxford: Oxford University Press, 2006); Ong, Neoliberalism as Exception; Daniel Schiller, Digital Capitalism: Networking the Global Market System (Cambridge, MA: MIT Press, 2005).

23. James D. Faubion, “Michel Foucault: Power,” Essential Works of Foucault 1954 (New York: The New Press, 1994/2000), 209.

24. Harvey, History of Neoliberalism.

25. Hardin, “Finding the ‘Neo.’”

26. Joshua S. Hanan, “Home is Where the Capital is: The Culture of Real Estate in an Era of Control Societies,” Communication and Critical/Cultural Studies 7 (2010): 176–201; Joshua S. Hanan and Catherine Chaput, “Stating the Exception: Rhetoric and Neoliberal Governance During the Creation and Passage of the Emergency Economic Stabilization Act of 2008,” Argumentation and Advocacy 50 (2013): 18–33; Bradley Jones and Roopali Mukherjee, “From California to Michigan: Race, Rationality, and Neoliberal Governmentality,” Communication and Critical/Cultural Studies 7 (2010): 401–422; Ong, Neoliberalism as Exception. See also Hardin, “Finding the ‘Neo,’” for a thorough review of the Marxist, Foucauldian, epochal “camps” of scholarship on neoliberalism.

27. Brown, Undoing the Demos; Harvey, History of Neoliberalism; Greene, “Another Materialist Rhetoric;” Ong, Neoliberalism as Exception.

28. Henry A. Giroux, “Beyond the Biopolitics of Disposability: Rethinking Neoliberalism in the New Gilded Age,” Social Identities 14 (2008): 592; Jones and Mukherjee, “From California to Michigan;” LeMaster, “Discontents of Being and Becoming.”

29. Greene, “More Materialist Rhetoric.”

30. Giroux, “Beyond the Biopolitics of Disposability,” 592. Emphasis added.

31. LeMaster, “Discontents of Being and Becoming,” 168.

32. Ibid., 170.

33. Jones and Mukherjee, “From California to Michigan,” 403.

34. Brown, Undoing the Demos, 17.

35. Ibid.

36. Michel Foucault, “Security, Territory, and Population,” in Michel Foucault: Power, ed. James D. Faubion (New York: Picador, 1978/1994), 211. Emphasis added.

37. Ong, Neoliberalism as Exception.

38. Brenner, at al., “After Neoliberalization?”; Noel Castree, “From Neoliberalism to Neoliberalization: Consolations, Confusions, and Necessary Illusions,” Environmental Planning: An International Journal of Urban and Regional Research 38 (2006): 1–6; Harvey, History of Neoliberalism.

39. Hardin, “Finding the ‘Neo,’” 214.

40. Ibid. Also see Greene, “Another Materialist Rhetoric”; Greene, “More Materialist Rhetoric.”

41. Fisher, Media and New Capitalism; Harvey, History of Neoliberalism; Schiller, Digital Capitalism.

42. Leon T. Kendall, “Securitization: A New Era in American Finance,” in A Primer on Securitization, ed. Leon T. Kendall and Michael J. Fishman (Cambridge, MA: MIT Press, 1996), 1.

43. Ibid.

44. Frank J. Fabozzi and Vinod Kothari, Introduction to Securitization (Hoboken, NJ: John Wiley and Sons, 2008).

45. Hanan, “Home is Where the Capital is.”

46. The term “poverty industry” refers to enterprises such as pawnshops and check cashing, as well as lending services designed to serve the underbanked through often predatory practices that can entrap the poor in debt. See Susanne Soederberg, Debtfare States and the Poverty Industry: Money, Discipline and the Surplus Population (New York: Routledge, 2014).

47. US Department of Treasury, “Electronic Benefits Transfer: A Strategy for the Future,” Washington, DC, 1990, 6.

48. Federal Electronic Benefit Transfer Task Force, “Creating a Benefit Delivery System that Works Better and Costs Less: An Implementation Plan for Nationwide EBT,” Washington, D. C., Government Printing Office, 1994, 1.

49. US Congress, House of Representatives, Subcommittee on Policy Research and Insurance, Subcommittee on Regulation, Business Opportunities, and Energy, and Subcommittee on Domestic Marketing, Consumer Relations, and Nutrition, Food Stamp Trafficking and the Food Stamp Electronic Benefit Transfer Program, 102nd Cong, 2nd sess., 1992, 21.

50. US Congress, House of Representatives, Food Stamp Trafficking, 3.

51. US Congress, House of Representatives, From Paper to Plastic, 29.

52. Ibid.

53. Federal Electronic Benefit Transfer Task Force, “Creating a Benefit Delivery System that Works,” 2.

54. US Department of Treasury, From Paper to Plastic, 5.

55. US Department of Treasury, Electronic Benefits Transfer.

56. US Congress, House of Representatives, Food Stamp Trafficking, 3.

57. Ibid., 2.

58. Federal Electronic Benefit Transfer Task Force, “Creating a Benefit Delivery System that Works,” A-3.

59. US Congress, House of Representatives, Subcommittee on Financial Institutions Supervision, Regulation, and Deposit Insurance and the Subcommittee on Consumer Credit and Insurance, Ways of Increasing Access of Low- and Moderate-Income Americans to Financial Services, 103rd Cong, 2nd sess, 1994, 3.

60. US Department of Treasury, Electronic Benefits Transfer, 30.

61. Federal Electronic Benefit Transfer Task Force, “Creating a Benefit Delivery System that Works,” 15.

62. Ibid., A-3.

63. US Congress, House of Representatives, Food Stamp Trafficking, 17.

64. Ibid.

65. Ibid., 23.

66. US Congress, House of Representatives, From Paper to Plastic, 3.

67. US Congress, House of Representatives, Impact of Regulation E, 18.

68. Rachel L. Jones, “Maryland Electronic Welfare Cards Curb Fraud, Please Users/Critics Fear they’re Another Inroad by ‘Big Brother.’ Defenders Say They Bring Dignity to the City,” The Philadelphia Inquirer (Philadelphia), Apr. 11, 1995, A04.

69. Ibid.

70. US Congress, House of Representatives, Ways of Increasing Access, 17.

71. US Department of Treasury, From Paper to Plastic, 9.

72. David B. Humphrey, “The Economics of Electronic Benefit Transfer Payments,” Economic Quarterly 82 (1996): 84.

73. Ibid., 31.

74. The Retail Food Industry Center, From Paper to Plastic by 2002: Retailers' Perspective on Electronic Benefit Transfer Systems for Food Stamps, by Ana R. Quiñones and Lean Kinsey (St. Paul, MN, 2000), 19.

75. US Department of Treasury, Electronic Benefits Transfer.

76. US Congress, House of Representatives, Impact of Regulation E, 12.

77. US Department of Agriculture, Food and Nutrition Service, SNAP Food Security In-Depth Interview Study: Final Report. Retrieved from: http://www.fns.usda.gov/sites/default/files/SNAPFoodSec.pdf

78. US Congress, House of Representatives, Food Stamp Trafficking, 18.

79. US Congress, House of Representatives, Impact of Regulation E, 9.

80. See US Treasury report, “From Paper to Plastic.” As of 1990, an estimated $2.50 per recipient was spent in administration costs associated with the paper benefits system; EBT represented nearly $25 million in annual federal savings.

81. US Congress, House of Representatives, Impact of Regulation E, 3.

82. US Department of Treasury, Electronic Benefits Transfer.

83. US Congress, House of Representatives, Food Stamp Trafficking, 11.

84. Ibid., 8.

85. US Congress, House of Representatives, Impact of Regulation E, 6.

86. US Congress, House of Representatives, Food Stamp Trafficking, 9.

87. Ibid., 20.

88. US Congress, House of Representatives, From Paper to Plastic, 1.

89. Ibid.

90. Ibid., 15.

91. US Department of Agriculture, Food and Nutrition Service, The Extent of Trafficking in the Food Stamp Program, by Theodore F. Macaluso (Washington, DC, 1995). The USDA and FNS primarily utilized STARS in the early and mid-1990s, though it is now used in tandem with other monitoring systems; among these, for example, is the Anti-Fraud Locator using EBT Retailer Transactions (ALERT), online since 2002.

92. Humphrey, “The Economics of Electronic Benefit Transfer Payments.”

93. US Department of Agriculture, Food and Nutrition Services, Evaluation of Food Retailer Compliance Management Demonstrations in EBT-ready States and Related Initiatives, by Paul Elwood, Christopher W. Logan, and Leo M. Altman (Washington, DC, 1997).

94. US Department of Agriculture, Food and Nutrition Service, The Extent of Trafficking in the Food Stamp Program: An Update, by Theodore F. Macaluso (Washington, DC, 2000), 12.

95. Brenner et al., “After Neoliberalization?;” Brown, Undoing the Demos; Garland and Harper, “Did Somebody Say Neoliberalism?”; Harvey, History of Neoliberalism; Ong, Neoliberalism as Exception.

96. Greene, “Another Materialist Rhetoric;” Greene, “More Materialist Rhetoric;” Matthew S. May, “The Imaginative-Power of ‘Another Materialist Rhetoric,’” Communication and Critical/Cultural Studies 12 (2015): 399–403.

97. US Congress, House of Representatives, Ways of Increasing Access, 17. See also, Fisher, Media and New Capitalism; Harvey, History of Neoliberalism; Schiller, Digital Capitalism.

98. Federal Electronic Benefit Transfer Task Force, “Creating a Benefit Delivery System that Works,” A-2.

99. US Congress, House of Representatives, From Paper to Plastic, 14.

100. US Congress, House of Representatives, Ways of Increasing Access, 17.

101. The Food Stamp Program error rate accounts for administrative errors, such as over- or underpayment of benefits, applicant asset misinformation, as well as fraudulent and criminal activity like trafficking.

102. US Congress, House of Representatives, Food Stamp Trafficking, 1.

103. US Department of Agriculture, Federal Crop Insurance Corporation, “Program Changes Improving the Actuarial USDA. Soundness of the Federal Crop Insurance Program,” Federal Register 59, no. 66 (April 6, 1994): https://www.gpo.gov/fdsys/pkg/FR-1994-04-06/html/94-8244.htm

104. Jones, “Maryland Electronic Welfare Cards”; Ruth Larson, “Gore Reinvents Benefits with Welfare ATM Card,” The Washington Times (Washington, DC), June 1, 1994; Scott Pendleton, “Plastic Pilot,” Christian Science Monitor, October 3, 1994; Christopher Wilson, “Feds Thwart Food-Stamp Scams,” The Washington Times (Washington, DC), July 14, 1994.

105. Jones, “Maryland Electronic Welfare Cards,” A04.

106. National Performance Review, Creating a Government that Works Better and Costs Less, by Vice President Al Gore (Washington, DC, 1994), 34.

107. US Congress, House of Representatives, Food Stamp Trafficking, 10.

108. Ibid., 2. Emphasis added.

109. US Congress, House of Representatives, Impact of Regulation E, 31. Emphasis added.

110. US Congress, House of Representatives, Food Stamp Trafficking, 9.

111. US Congress, House of Representatives, Impact of Regulation E, 19.

112. Ibid., 2.

113. US Congress, House of Representatives, Food Stamp Trafficking, 44.

114. US Congress, House of Representatives, From Paper to Plastic, 1.

115. USDA, Office of the Inspector General, “Analysis of FNS’ Supplemental Nutrition Assistance Program Fraud and Prevention Protection Efforts,” (Washington, DC, 2012): http://www.usda.gov/oig/webdocs/27002-0011-13.pdf

116. US Congress, House of Representatives, Food Stamp Trafficking, 13. Emphasis added.

117. Ibid. Emphasis added.

118. US Congress, House of Representatives, From Paper to Plastic, 3.

119. US Congress, House of Representatives, Ways of Increasing Access, 6.

120. US Congress, House of Representatives, From Paper to Plastic, 21. Emphasis added.

121. US Congress, House of Representatives, Food Stamp Trafficking, 34. Emphasis added.

122. Reagan frequently used the story of “strapping young bucks” purchasing luxury food items such as T-bone steaks with their Food Stamps in his campaign stump speeches, see: Robert G. Kaiser and Maralee Schwartz, “On Welfare: Democrat Bullish, Republican Bearish (less so),” The Washington Post (Washington, DC), October 23, 1980. See also Moyers and Company, “Clip: Ronald Reagan’s Racially Tinged Stump Speeches,” accessed on April 26, 2016, http://billmoyers.com/2014/02/27/ronald-reagans-racially-tinged-stump-speeches/.

123. US Department of Agriculture, SNAP Food Security In-Depth Interview Study.

124. Hardin, “Finding the ‘Neo,’” 210.

125. Faucher, “Veblen 2.0”; Giroux, “Beyond the Biopolitics of Disposability;” LeMaster, “Discontents of Being and Becoming”; Jones and Mukherjee, “From California to Michigan”; Bryan J. McCann, “Redemption in the Neoliberal and Radical Imaginations: The Saga of Stanley ‘Tookie’ Williams,” Communication, Culture & Critique 7 (2014).

126. Brown, Undoing the Demos.

127. Garland and Harper, “Did Somebody Say Neoliberalism?” 104; Greene, “More Materialist Rhetoric.”

128. Brown, Undoing the Demos;” Hanan, “Home is Where the Capital is;” Hanan and Chaput, “Stating the Exception;” Greene, “Another Materialist Rhetoric;” Greene, “More Materialist Rhetoric;” Harvey, History of Neoliberalism; May, “Imaginative-Power;” Ong, Neoliberalism as Exception.

129. Jones and Mukherjee, “From California to Michigan: Race, Rationality, and Neoliberal Governmentality”; LeMaster, “Discontents of Being and Becoming.”

130. Foucault, “Security, Territory, and Population.”

131. As the over-selling and trading of securities played an integral role in the housing bubble of the mid-2000s (resulting in unprecedented rates of under-water mortgages and defaulted loans), securitization can also be a useful conceptual tool for critical inquiry into other financial phenomena and predatory economic practices. Also see Hanan, “Home is Where the Capital is.”

132. Fabozzi and Kothari, Introduction to Securitization; Kendall, “Securitization.”

133. US Congress, House of Representatives, From Paper to Plastic, 29.

134. Asen, Visions of Poverty.