{"id":13101,"date":"2023-04-06T16:36:42","date_gmt":"2023-04-06T13:36:42","guid":{"rendered":"https:\/\/www.liberalglobe.com\/?p=13101"},"modified":"2023-04-06T16:36:45","modified_gmt":"2023-04-06T13:36:45","slug":"today-the-democratization-of-the-banking-system-is-more-necessary-than-ever","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=13101","title":{"rendered":"Today, the Democratization of the Banking System is more necessary than ever"},"content":{"rendered":"\n

It must reverse the fact that until today we treat the banking system as an avenue for democratic intervention. Few things cause more anxiety than a banking crisis \u2013 it helps that the archetypal image of crisis remains the crash of 1929. Yet we still think of the banking system, at least under conditions, as the real engine of the economy.<\/p>\n\n\n\n

Much of what we describe as “economic policy” concerns money and the banking system, from interest rate decisions made by central banks, especially when inflationary pressures are recorded, to measures of liquidity in the banking system.<\/p>\n\n\n\n

Banking practices, once seen by Marx as developing alongside commerce in the interstices of pre-capitalist modes of production “like the gods of Epicurus”, today are at the core of what is commonly described as “financialization”, a concept that captures the gravity of its economic practices financial sector, but also the hegemonic role played by funds and companies active in this sector.<\/p>\n\n\n\n

It is not only the hyperinflation of financial transactions, but also the way in which financial firms claim leadership in the economy and society. They form a peculiar hegemonic bloc together with high-tech companies (which in turn are financially dependent on financial sector companies, but also supply them with technology), an alliance between Wall Street and Big Tech, as Jeremy Gilbert eloquently describes and Alex Williams in their recent book “Hegemony Now. How Big Tech and Wall Street Won the World (and How we Win it Back)”.<\/p>\n\n\n\n

Of course, one could argue that the growth of the financial sector is not “parasitic” to capitalism, but organic, as a result of the very temporality of production. The expanding accumulation requires constant pre-validation of future transactions, operations, investments.<\/p>\n\n\n

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From the transit trade of the Renaissance (around which the Italian banks were developed) to today’s venture capitals the mechanism is common, the question of what happens when finally the works, transactions, investments cannot be validated in the market (e.g. .cannot have sufficient profitability).<\/p>\n\n\n\n

It is an ever-present eventuality at the end of the day that cannot be dealt with simply by extensive forms of securitization of claims and complex financial products to diffuse and ultimately neutralize the risk. Then we find that the forms of fictitious capital, the creation of money ex nihilo, the endless “air” transactions, at the time of the “violent correction” have painfully real effects: as painful as a layoff or the foreclosure of a house.<\/p>\n\n\n\n

Paradoxically, we still face this rather obvious irrationality not only with the fatalism that this is the cost of development (overlooking that for the subordinate classes destruction is never creative), but also with the metaphysical confidence that “conditionally” it can work rationally.<\/p>\n\n\n\n

The volume of central bank interventions in recent decades may be enormous \u2013 to the extent that it probably fueled the current inflationary dynamics \u2013 but the logic that the financial system is outside the bounds of democratic intervention and popular sovereignty and therefore cannot structurally transformed, dominates.<\/p>\n\n\n\n

Not coincidentally, even these decisions are entrusted to central banks shielded from political interference, culminating in the ECB, which is disconnected even from member countries.<\/p>\n\n\n

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Eric Monnet: we must overcoming the illusion of self-regulation<\/strong><\/p>\n\n\n\n

Against this background, the interventions that examine whether and to what extent there can be a deeper and more comprehensive democratization of the banking system are of special interest. For example, the way Eric Monet puts it in his book “Central Banks, Welfare State and Democracy for the democratization of Central Banks and Monetary Policy” is of particular importance. In its pages he presents the need to overcome the illusion of self-regulation of markets and the neutrality of central banks towards them, as well as the need for a democratic recovery of central banks (please also read the analysis titled “Can Central Banks and Monetary Policy be Democratized?<\/a>“).<\/p>\n\n\n\n

Can the banking system be democratized?<\/strong><\/p>\n\n\n\n

Accordingly we can see the proposals included in the collective volume Democratizing Finance. Restructuring Credit to Transforms Society, edited by Fred Block and Robert Hockett and published last year by Verso.<\/p>\n\n\n\n

Here the starting point is the degree to which the financial system relies directly or indirectly on the guarantee and support of the state, which allows us to contemplate a radical transformation that would not remain in supervision but would proceed to a total reorientation towards the needs of the poorest strata of society.<\/p>\n\n\n\n

All this requires that we stop treating the financial sector as a peculiar scapegoat for democratic control and intervention in the name of the interests of the social majority. After all, it has been shown that the increasing complexity of modern financial tools, the arrogance that every risk can be adequately managed, and the increasing distance from real financial practices, are rather the real “distortions”.<\/p>\n","protected":false},"excerpt":{"rendered":"

It must reverse the fact that until today we treat the banking system as an avenue for democratic intervention. Few things cause more anxiety…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[620,946,2956],"tags":[875,240,1162,4199],"class_list":["post-13101","post","type-post","status-publish","format-standard","hentry","category-business","category-companies","category-industries","tag-banks","tag-central-banks","tag-democracy","tag-monetization"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/13101","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13101"}],"version-history":[{"count":2,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/13101\/revisions"}],"predecessor-version":[{"id":13191,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/13101\/revisions\/13191"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13101"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13101"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13101"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}