My plan to empower people to grapple with and challenge big banks
8:50 am - March 5th 2013
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by Brett Scott
We often obsess about regulatory battles and high politics when considering how to curtail the excesses of big financial institutions, but one of the biggest sources of power for the financial sector is simply the poor state of financial education among everyday citizens.
Most schools don’t teach people about how financial institutions work in any depth, leaving us to rely on small groups of frequently unaccountable experts.
It is a major problem in a democratic society when the workings of politically powerful interest groups such as Barclays and Goldman Sachs appear obscure and alienating.
Citizens seldom feel confident in challenging such institutions and it’s this power asymmetry that enables banks and big funds to frequently get away with selling inappropriate products and lending to projects that many people disagree with.
It might take a while for the government to improve financial literacy though, so more grassroots forms of education are needed in the interim. The world needs an extensive network of engaged financial watchdogs in all major global financial centres, and that’s why I am currently in the process of raising money to start a London School of Financial Activism, aimed at helping campaigners to grapple with the financial sector.
I’m seeking to develop adventurous, experimental forms of learning that will immerse campaigners within the financial dark arts. There’s more to this than education for education’s sake.
Cities like London and New York are the world’s most powerful financial centres, and financial institutions in these cities steer money across the globe, impacting all industries and all governments. By coming to grips with the financial sector, campaigners in these cities have an unparalleled potential to impact global capital flows.
‘Financial activism’ does not only refer to campaigns that target the financial sector. It refers to campaigns that use financial instruments to help further social and environmental causes, as in the case of shareholder activism. Importantly, it also refers to the process of creating alternative forms of finance that bypass mainstream financial institutions.
Imagine a society in which all people felt they had the ability to directly challenge the financial sector, or to build their own alternatives. That society doesn’t currently exist, but as the Occupy protests showed, there is a major desire among ordinary people to build their capacity to do that.
My idea for a school is but one form of financial education, and I’d welcome any comments on what other approaches you think could work in empowering citizens.
Brett Scott has a book forthcoming with Pluto Press called The Heretic’s Guide to Global Finance: Hacking the Future of Money.
He blogs at www.suitpossum.blogspot.com and tweets as @suitpossum
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Reader comments
The banks created so many complicated financial instruments to fuel their Ponzi Scheme that even the country’s best regulators couldn’t keep on top of it if in fact they were even trying.
This is all the financial education anybody needs: in the eighties the monetarists Thatcher and Reagan launched a Big Bang which essentially handed responsibility for money supply to a handfull of totally unaccountable bankers and financiers. Unlike the politicians, they said, who print money to build such popular things as schools and hospitals, the private sector can be trusted with the money supply because `enlightened self-interest’ would prevent them from allowing its supply to outstrip its demand. But of course what they actually did was organise a global robbery of truly epoch-making proportions. They created trillions of counterfeit claims on social wealth with their credit bubble turned Ponzi Scheme and of course the politicians being the lackeys of finance capital recognised these counterfeit claims as good coin when they bailed out the banks instantly bankrupting virtually ever nation in Europe and the US. Centuries of accumulated wealth is being liquidated, public services and welfare are being destroyed, the public purse emptied, wages rendered valuless and the pound criminally debased to bail out the bankers creditors and pay off their losing bets. The heirs of monetarism are today printing money not for the populist reasons of school and hospital building but simply to hand over to billionaires. Oh the ironies of history and that is all the financial education you need to understand why Western imperialist capitalism is a busted flush and already as a viable economic system dead. Don’t let’s be taken to the grave with it by this coalition of undertakers.
“but one of the biggest sources of power for the financial sector is simply the poor state of financial education among everyday citizens.”
This I completely agree with….just be careful about going in to this with a particular agenda – which the hints about activism suggest.
Thanks guys, maybe you can both give a guest lecture.
Tyler, what agenda don’t you want to see?
@ Suitpossum
Personally I feel that an educational or information campaign should stick to the facts, and let people draw their own conclusions from them. My worry is that such a campaign can quickly descend into simple banker-bashing with David Ellis style rhetoric (see above) not based in reality. Frankly, we have plenty of that kind of stuff already, and I’m not sure what value more of it would add. The risk I suppose lies with the people running the campaign and what they are trying to get out of it.
That all said, I’d be happy to explain how bits of banking and finance really work if that’s what people so wish.
@Tyler Sure, I enjoy diverse opinions, what’s your background? Ping me an email if you’re interested – you can find it on my blog
David Ellis you are really an angry financial rant random comment generating algorithm, AICM£5
We are taught to defer to the big boys, we are not taught to stand up for ourselves, I don’t know if it is a particularly English thing, but I think that we need to have lessons in schools about financial responsibility because we ordinary people seem to just sign it away with little thought because we don’t understand it.
The OP seems to have given up on the possibility of government regulation, or do you think that the activism would involve effective lobbying of ministers? The power of the financial sector would need to be countered at government level to be effective.
@ Suitpossum
YHM
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