Part 4 DE-FINANTIALIZATION: A WORLD WITHOUT WALL STREET

Part 4

DE-FINANTIALIZATION: A WORLD WITHOUT WALL STREET

 Nationalisation/ Socialism of Monopolies would and in an itself abolish the principle "shareholder value" imposed by the strategy of accumulation in the service of monopoly rents. This objective is essential for any bold agenda to escape the roots in which the management of today economy is mired. Its implementation pulls the rag out from under the feet of the fictionalization of management of the economy. Are we returning to the famous "euthanasia of the rentier" advocated by Keynes in his time?. Not necessarily and certainly not completely. Savings can be encouraged by financial rewards, but on condition that their origin (household saving of workers, business, communities) and their conditions of earning are precisely defined. The discourse on macroeconomic savings in conventional economic theory hides the organization of exclusive access to the capital market of the monopolies. The so called "market driven remuneration" is then nothing other than the means of guarantee the grows of monopoly rents.

Of course the nationalization/ socialization of monopolies also applies to banks, at least the major ones. But the socialization of their intervention("credit policies") has specific characterirstics that requires an appropriate design in the Constitution of the the directorates. Nationalization in the classical sense of the term implies only the substitution of the states of the boards of directors formed by private share holders. This would permit in principle, the i,plementation of banks credit policies formulated by the State - which is not small thing. But it is certainly not suficient when we consider that socialization required the direct  participation in he managment of the bank by relevant social partners. Here the "self-managnkingement of the banks' by the relevan social partners. Here the 'self management' of the banks by their staff would not be appropriate. The staff concerned should be certainly involve in decistions about their working conditions, but little else, because it not the place to determine the credit policies to be implemented.

If the directorate must deal with the conflicts of interest of thos who provide loans (the banks) and thouse who receive them (the "enterprises") the formula for the composition of directorates must be designed taking into account what the enterprises are and what they required. A restructuring of the banking system whisch has became overly centralized since the regulatory frameworks of the past two centuries were abandoned over the past four decades.

There is a strong argument to justify the reconstruction of banking specialization according to the requirements of the recipients of the credits as well as their economic function (provision of short term liquidity contributing to the financing of investment in the medium and long term). We could then for example create an 'agricultural bank' or a coordinated ensemble of agricultural banks whose clientele is not only of farmers and peasants but those involve in the 'upstream and down extreme of the agriculture described above. The bank 'directorate would involve in the one hand the bankers (staff officers of the banks who would have recruited by the directorate) and other clients (farmers, peasants and other upstream and downstream entities).

The de-finacialization of economic managment would also requires two set of legislation. The first concern the authority of a sovereig State to ban speculative funds (hedge funds) operation in the territory. The second concern pension funds which are now major operators in the financialization of the economic system. These funds were designed -first in the US of course to transfer to employees the risks normally incurred by capital, and which are the reasons invoked to justify capital 'remunerations'!. SO, this is scandalous arrangement, in clear contradiction even with the ideological defense of capitalism!  But this 'invention" is an ideal instrument for the strategies of accumulation dominated by monopolies .

The abolition of pension funds is necesary for the benefit of distributed pension systems, which by the nature required and allow democratic debate to determine the amounts and periods of assesment and the relationship between the amount of pensions and remuneration paid. In a democracy that respect social rights these pension systems are universally available to all workers. However, at a pinch, and so as not to prohibit what a group of individuals might desire to put in place, suplementary pensions funds could be allowed.

All measure of de-financialization sugested here lead to an obvious conclusion:  A WORLD WITHOUT  WALL STREET, to borrow the littlle of the book of Francois Morin, IS POSSIBLE AND DESIRABLE!

In a world without wall street  the economy is still largely controlled by the Market. But these markets are for the first time truly transparent, regulated by democratic negotiation among genuine social partners. For the first time also they are not longer adversaries as they are necessary under capitalism. It is the "financial market" opaque by nature and subjected to requirement of management for the benefit of the monopolies- that is abolished. We could even explore whether it could be useful or not to shut down the stock exchanges, given that the rights of property, both in their private as well as social form would be conduced "differently". We could even consider wheter the stock exchange could be re-established to this new end. The symbol in case "a world without Wall Street" nevertheless retain its power.

De-fictionalization certainly does not mean the abolition of macro-economic policy and in particular the macro management of credit. On the contrary, it restore its efficiency by freeing it from ita subyugation to the strategies of rent-seeking monopolies. The restorations of the powers of the national central bank not longer "independent" but dependent on both the State and markets regulated by the democratic negotiation of social partners, gives the formulation of macro credit policy its effectiveness in the service of socialized management of the economy.

Part 5:  AT THE INTERNATIONAL LEVEL: DELINKING