Book contents
- Frontmatter
- Contents
- Acknowledgements
- 1 Introduction: The pandemic within
- 2 At home in the world: overcoming the predicament of complexity and hegemony
- 3 Ensuring a well-functioning public infrastructure
- 4 Housing is a public good, not a commodity
- 5 Redefining work and income
- 6 The return of good government
- 7 Real corporate responsibility
- 8 Money as a public good
- 9 Living in the Anthropocene
- 10 Towards an ecological society
- Notes
- References
- Index
8 - Money as a public good
Published online by Cambridge University Press: 13 May 2022
- Frontmatter
- Contents
- Acknowledgements
- 1 Introduction: The pandemic within
- 2 At home in the world: overcoming the predicament of complexity and hegemony
- 3 Ensuring a well-functioning public infrastructure
- 4 Housing is a public good, not a commodity
- 5 Redefining work and income
- 6 The return of good government
- 7 Real corporate responsibility
- 8 Money as a public good
- 9 Living in the Anthropocene
- 10 Towards an ecological society
- Notes
- References
- Index
Summary
Too big to comprehend?
As the saying goes: money makes the world go round. In the age of global finance, this truism has a literal ring to it. Societies need capital to finance production. Companies that want to invest in productive activities require money, either by issuing bonds or shares or by taking up bank credit which they pay back at a later date from the return on the investment. Individuals need money to buy essentials or obtain credit to purchase big ticket items such as a house or a car. States provide or underwrite important investments with payoffs that are too uncertain, too big or too far into the future to be attractive to private investors. In general, the development of finance is associated with higher levels of income in the population (Kay, 2015, 3). In addition, lenders need to be protected against the risk of insolvent or fraudulent borrowers. That is why we have banks and some form of state-guaranteed protection of bank deposits. In principle, if not in practice, money is a public good.
However, that is not how banks see it. The financial sector has grown into a global Moloch that, although facilitated by the state at every step, largely operates outside effective democratic or regulatory control. In fact, the banking sector has split off a whole sector, shadow banks, specifically designed to work outside regulatory oversight. The finance sector is an opaque complex of law, customs, policies, trades in IOUs, formal and informal agreements, and personal networks, that is only intelligible to insiders. In fact, its complexity and opaqueness are by design (Huber and Robertson, 2000, 5). The financial sector is rife with conflict of interest and revolving door arrangements (Jenkins, 2020). For example, the governance of the Federal Reserve, the US central bank, is largely in the hands of the same commercial banks it is mandated to regulate (Brown, 2019, 14). The move of government ministers to a lucrative position with one of the major investment banks, or vice versa, is a fairly common career path. The less people understand how these obscure laws, rules and arrangements operate, the better it is for the industry. The public banking specialist Ellen Brown (2019, 46) maintains that if depositors and investors understood the true costs and risks of banking, they would be less willing to entrust it with their money.
- Type
- Chapter
- Information
- The Pandemic WithinPolicy Making for a Better World, pp. 99 - 124Publisher: Bristol University PressPrint publication year: 2021