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To democratize finance, democratize central banking

Woodruff, David M. (2019) To democratize finance, democratize central banking. Politics and Society, 47 (4). pp. 593-610. ISSN 0032-3292

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Identification Number: 10.1177/0032329219879275

Abstract

Robert C. Hockett’s “franchise view” argues, convincingly, that the capacity of banks or quasi-bank financial entities to create money rests on the laws, regulations, and guarantees of the state under which they operate. Fred Block advocates the use of this insight as a beachhead for establishing the legitimacy of locally embedded, nonprofit lenders whose investments would be dedicated to public purposes. However, given the pervasive influence of “everyday libertarianism,” which fosters blindness to the public character of private economic power, this commentary warns of possible counterproductive consequences of this proposal unless it is fused to the democratization of central banking. An end to central bank independence would highlight the ineliminable role of the state in the market and make that role easier to reshape. It would also end the dynamic whereby monetary easing provides political cover for damaging fiscal austerity and thus lead to better democratic deliberation on the contours of policy.

Item Type: Article
Additional Information: © 2019 The Author
Divisions: Government
Subjects: J Political Science > JA Political science (General)
H Social Sciences > HG Finance
Date Deposited: 25 Jul 2019 13:24
Last Modified: 30 May 2020 23:08
URI: http://eprints.lse.ac.uk/id/eprint/101223

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