#07: Who is more powerful, banks or politicians?

What has happened so far: After their unexpected encounter on a dark, cold night in Toronto, Cheeky C and Great G decided to embark on a journey, each unknowingly with different destinations in mind. Cheeky C wants to discover her identity and purpose, while Great G aims to realize a vision of global health through the world of finance. The next day, they wander through Toronto, hoping to find initial clues. Bewildered, Cheeky C begins to question things that seem natural to us. At the lakeshore of Lake Ontario, she learns some facts about the power of banks and money that she had never considered before…

Great G and Cheeky C look at the paper boat which starts to sink slowly as the paper sucks in the lake’s water, becoming heavier and heavier. ‘Van Reybrouck documents the dramatic change in colonies’ economies and daily life, caused by monetization, very well. As a starting point, Belgium demanded that every Congolese must pay 4,50 Francs tax to the Belgian state every year. For many, the only way to earn that money was to start working for the big Belgian capitalist businesses that settled down in Congo. Fishermen, smiths, or hunters became laborers. They worked overtime for low wages in dirty and overcrowded labor camps. They were exploited by mineral-extracting companies such as the Union Miniére or Huileries du Congo Belge (HCB).[1]

Around 1900, there were only a few hundred laborers, a very small percentage of society. Until 1920, the number had increased tenfold to 123,000 and then quadrupled to 450,000 in the next nine years.[2] To give you a feeling for the insane speed of this growth: compared to that, in industrialized economies like Germany, employment only increased by around one-seventh to one-tenth in the last nine years.[3] I read Van Reybrouck’s book report a few years ago, but I haven’t forgotten those numbers. They show how much our all lives have been shaped by capitalism and the use of money since it was enforced 200 years ago.’

The paper boat is almost sunken now, starting its lonely journey through many dark and cold layers of water down to the very bottom of the lake. Cheeky C turns her face to Great G. ‘Wow. But if an economy running only with money is not natural, does that mean that this system can change again?’

‘Of course. Anytime. To be clear, I don’t think that we will ever develop into an economy that uses no money at all. Money will stay with us, and with money, the incredible power of people and institutions that create and regulate money flows. But the distribution of that power can change, of course! There is always a power struggle between the different social forces we have. Banks, investors, businesses, governments, parties, civil organizations, cultural clubs, churches, families, or social movements – they all fight in that struggle, create alliances, try to outcompete each other, whatever. It can get very dirty and sometimes even bloody.’

Money will stay with us, and with money, the incredible power of people and institutions that create and regulate money flows.

‘Politicians? What’s that?’

‘People who can create binding rules for everyone in society, also for the most powerful in there. In theory, as those who have enough money can find ways to buy themselves free.’

‘That’s incredible. But that raises another question. Who is more powerful? Banks or politicians?’

‘Difficult… And don’t forget to include companies in the equation. I give you an answer that careful thinkers love: it depends.

‘It depends?’

‘Yes. On time, country, ideology, system, and people. And food – but that’s another story. When we look at the political and economic history of the West, specifically the United States of America as the Western leader, research shows that the financial system was a lot more regulated after WWII, when we had the so-called Bretton Woods system. This system prioritized macroeconomic stability and social security within nations.[4] However, due to various economic troubles and ideological changes within the US, the Bretton Woods system broke apart in 1972, a well-intended consequence of US President Reagan’s administration. Let me tell you more about that, as understanding this is crucial to understand the massive power shift in world society that took place afterwards…’

.

.

.

Sources:

[1] Cf. See Van Reybrouck, David. 2014. Congo, The epic history of a people. Sam Garrett. London: Fourth Estate, p. 157.

[2] Cf. ebd., p. 156.

[3] IMF. 2023. Germany: Employment from 2014 to 2024 (in millions). Statista. Available online from: https://www.statista.com/statistics/795244/employment-in-germany/, last accessed 24 March 2024.

[4] Cf. Ruggie, John Gerard. 1982. International regimes, transactions, and change, p. 388.