4 ms·

Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in a

by dnomad 8y ago

Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. So if you don't have large banks you're absolutely at the mercy of those who do (when it comes time to raise capital). But once you have large banks it becomes down right unprofitable to invest in small enterprises. As they say, no tier 1 bank is interested in funding an additional lemonade stand. Go big or go home. There's a feedback loop here that Marx understood quite clearly: capital becomes ever more centralized, ever more efficient, ever more demanding of bigger returns and more capital to invest. This process can be slowed but it cannot be stopped. It is also essential to global trade and our modern way of life. The end result is the undercapitalization of virtually everybody but a select wealthy elite. But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. This is the point. Trillions are locked away in the global mega-banks and the bank-likes. Governments across the globe embrace neoliberal policies and actively disinvest in their own people, cutting services and raising fees. Inequality is rising faster and faster, everywhere. What else is there to do? If the proletariat cannot access the private money locked away in the banks and the public money has mysteriously all disappeared then they have no choice but to literally make their own money and seize the means of production. It's this project, the recapitalization of the proletariat, that is the great challenge of the 21st century.

Lionsion 8y ago
> Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. I don't think that makes sense. If you don't allow massively consolidated domestic banks to operate in your country, why would you allow massively consolidated foreign banks to do so instead and "colonize" you? > But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. Personally, I'm moving on from this kind of techno-optimism. I don't think those things can fill these void left by a lack of community banks. Those have their attention focused on their local communities, but your techno-institutions focus their attention on what's attention-grabbing globally. While the latter may be different from what the big banks focus on, it doesn't fix the problems that community banks solve.
- dnomad 8y ago
  > If you don't allow massively consolidated domestic banks to operate in your country, why would you allow massively consolidated foreign banks to do so instead and "colonize" you? These days if you're a country and you want to grow then you need capital investment. Now that war and conquest and slavery are severely frowned upon there's really no other way to achieve growth but to get some rich <strike>lord</strike> investor to give you a bunch of money on "friendly" terms. (And for the investor class it's all about how "friendly" you are. Countries that are friendly to investors can thrive. Countries that aren't usually get fucked. This is the real reason China is so deeply scary to the global investor class.) The capital investment needed to sustain growth can either come from domestic sources or foreign sources. Of course if your country has very limited financial infrastructure it basically must come from abroad. Again, for various reasons, as the Cubans have discovered, you can't really self-bootstrap a modern industrial economy. (Unless you're the British Empire and you're willing to go out and conquer half the planet and feed that into your nascent industries. But again this sort of thing is no longer kosher these nowadays.) So you must go begging to the foreign creditors who will demand "friendly" terms not unlike what the British offered eg India. Note that this dynamic is play even for powerful and developed countries. The reason Britain continues to defend and support and bail out its highly dysfunctional banks is because it knows very well what will happen if those banks collapse. The British private sector will get the capital it desperately needs to grow from foreign banks. And once that happens it would be completely at the mercy of foreign creditors. This is the real reason nations must defend/bailout their banks. > I don't think those things can fill these void left by a lack of community banks. There's no such thing as a community bank as you imagine it. You can create mission oriented banks (eg banks focused on some credit-starved minority) but these are rarely profitable in the classical sense. In the end the only "defense" against global banks is to have your own global banks. The only defense against being indebted to foreign creditors is being able to capitalize the majority (50+%) of your own growth.

by dnomad 8y ago

Lionsion 8y ago

> Bank consolidation is inevitable. Large banks are like nuclear weapons. Every nation absolutely needs them or they risk foreign banks and investors rushing in and capitalizing+colonizing the entire country. I don't think that makes sense. If you don't allow massively consolidated domestic banks to operate in your country, why would you allow massively consolidated foreign banks to do so instead and "colonize" you? > But the internet can fix this. It allows for the creation of markets and coordination very, very cheaply. Crowd funding, p2p lending, Youtube, Patreon, open source software, and yes, cryptocurrencies -- these are the key tools of resistance that will allow the little fish to carve out some measure of autonomy. Personally, I'm moving on from this kind of techno-optimism. I don't think those things can fill these void left by a lack of community banks. Those have their attention focused on their local communities, but your techno-institutions focus their attention on what's attention-grabbing globally. While the latter may be different from what the big banks focus on, it doesn't fix the problems that community banks solve.

dnomad 8y ago
> If you don't allow massively consolidated domestic banks to operate in your country, why would you allow massively consolidated foreign banks to do so instead and "colonize" you? These days if you're a country and you want to grow then you need capital investment. Now that war and conquest and slavery are severely frowned upon there's really no other way to achieve growth but to get some rich <strike>lord</strike> investor to give you a bunch of money on "friendly" terms. (And for the investor class it's all about how "friendly" you are. Countries that are friendly to investors can thrive. Countries that aren't usually get fucked. This is the real reason China is so deeply scary to the global investor class.) The capital investment needed to sustain growth can either come from domestic sources or foreign sources. Of course if your country has very limited financial infrastructure it basically must come from abroad. Again, for various reasons, as the Cubans have discovered, you can't really self-bootstrap a modern industrial economy. (Unless you're the British Empire and you're willing to go out and conquer half the planet and feed that into your nascent industries. But again this sort of thing is no longer kosher these nowadays.) So you must go begging to the foreign creditors who will demand "friendly" terms not unlike what the British offered eg India. Note that this dynamic is play even for powerful and developed countries. The reason Britain continues to defend and support and bail out its highly dysfunctional banks is because it knows very well what will happen if those banks collapse. The British private sector will get the capital it desperately needs to grow from foreign banks. And once that happens it would be completely at the mercy of foreign creditors. This is the real reason nations must defend/bailout their banks. > I don't think those things can fill these void left by a lack of community banks. There's no such thing as a community bank as you imagine it. You can create mission oriented banks (eg banks focused on some credit-starved minority) but these are rarely profitable in the classical sense. In the end the only "defense" against global banks is to have your own global banks. The only defense against being indebted to foreign creditors is being able to capitalize the majority (50+%) of your own growth.