Tarun,
Don’t confuse a market based economy with the financialization of said economy. The problem is not so much what capitalism presumes to be, but how it actually functions. Money is the contract enabling mass societies to function, yet we treat it as a commodity to mine out of society.
As a contract, one side is an asset and the other is a debt, but we experience it as quantified hope and try saving and storing it. Econ 101 tells us it is both medium of exchange and store of value, as well as price setting mechanism, but medium and store are seriously different functions. For example, in the body, blood is the medium and fat is the store, or for cars, roads are the medium and parking lots are the store. Your hallway is a medium, while the hall closet is a store.
As a contract, it makes a useful medium of exchange, but lousy store of value, as every asset is necessarily backed by a debt and so to store the massive amounts required to keep everyone happy, equal amounts of debt are necessary. One significant method is for the government to borrow it up and spend in ways which support the private sector, without competing with it. Roosevelt wasn’t just putting unemployed labor back to work, but unemployed capital, as well. The deficit has been climbing ever since.
Where would those trillions be invested otherwise? Buying more Apple stock? The pari-mutual wagering of derivatives? Given how much gets thrown in the burn pit of much military spending, we are blowing up other countries as a consequence of trying to save surplus money.
The functionality of money is in its fungibility. We own it like we own the section of road we are using. Just like real roads, it is a public utility. It’s not our picture on it and we certainly don’t hold the copyrights, nor are we responsible for maintaining its value and stability.
What if the government threatened to tax out what it currently borrows? After all the fainting, pearl clutching and shrieking, people would start looking for other methods of storing value. As we mostly save for many of the same reasons, from raising children and housing, to healthcare and retirement, if ways could be found to invest in these as tangible community assets, rather than everyone trying to save for them individually, as abstractions in the banking system, with our bank accounts as a form of economic umbilical cord, we would be forced to actually work together and build stronger communities and the healthier environments they require. Not retreat into our atomistic cocoons, with the banking system mediating most exchanges and making banking more of a defacto ruler, than any socialist presidium could ever presume to be.
As the executive and regulatory function, government amounts to the central nervous system of society, while finance, as the value circulation mechanism, is its heart and arteries. When private government, aka, monarchy, lost sight of the fact it served a function to the larger community, in order to be served by it, it was unsurped. Banking is now having its ‘let them eat cake’ moment and it’s not going to end well. It is as if the heart is telling the hands and feet they don’t need so much blood and should work a little harder for what they do get.
As the two poles of social control are hope and fear and money functions as quantified hope, when the system blows up, only fear will be left and the police and military will be the ones in charge. Likely using a few bankers as piñatas, to placate the masses.
Though various vested interests are likely planning on bringing disaster capitalism/predatory lending home and trading their piles of treauries for the remaining public assets.
It’s not that banking should be a total branch of government, anymore than the nervous and circulation systems are one. Politicians live and die on the hope they inspire, so printing money is a cheap high.
People who love money and hate government are like the fish that loves the worm, but hates the hook. If you work within the system, accept that there will be trade offs.
