Democratic monetary orders

Democratic monetary orders One of the crises of our times is the decreasing ability of democratically elected governments to steer their societies. Democracy fundamentally requires the capacity of a collective to get things done (Ober, 2008). Today, access to money is a necessary condition for a democratic collective to realize its goals, to get the things it has chosen done. However, most money is created by commercial banks through extending credit. In Europe, this amounts to ca. 95% of money in circulation (McLeay et al., 2014). Commercial banks decide about their extension of credit based on profit calculations. Democratically elected governments are limited by budget and debt constraints when they spend money to realize their goals. In short, commercial banks’ profit calculations, rather than the choices of a democratic collective, shape where most new money flows. We are trading freedom for credit (Preiss, 2021). To address this question, I mobilize tools from the Critical Theory tradition, including interdisciplinary social science research on money and financial markets (political economy, economic sociology, law, and finance), as well as forms of genealogy and ideology critique that are with elements lifted from analytical political theory. The paper seeks to provide the seed for a more comprehensive, novel perspective on democratizing the monetary and financial system.