Banking – Field of Application for new types of democracy

Aug 8, 2018 by

What was the session about?

Christian Felber presented the flaws and challenges that the political and especially financial system experience in terms of being democratic. Thereafter, Oskar von Homeyer introduced the GLS bank’s views on ethical banking.

Felber presented several flaws in the current democratic system. A crucial one being the binary option that is provided. Voters can exclusively choose Yes or No, and that sometimes leads to good ideas being rejected for being too extreme. Especially in the financial system he sees a lack of democracy and participation. Therefore, he suggested to shift the paradigm of the financial system from old (Absence of international supervisory authority, no size limit to banks, free movement of capital, unlimited inequality, private money creation) towards the new (Money is a public good, rules are made democratically, money=means, Money serves the common good).
Although the speakers’ understanding of the change was not absolutely coherent, their main agreement translated into a team-up. Both want to incorporate the common good as the highest goal of the bank. GLS applies a different setting of priorities in their decision making that they implement in the process of lending money.

What will you take home?

The ingenious way of voting. Instead of measuring acknowledgement you measure resistance and apply the solution with the lowest resistance. That way it might indeed be possible to identify the solution that less restricts the freedom of the voters. It would be interesting to test this kind of vote on a large (national?) scale. However, it must be added that this system is already somewhat existent in most national democracies as rejected proposals primarily go back to the drawing board, not the trash can.

Was something specially interesting?

The discussions on real investment decisions were very interesting. The simulation showed how much a pure financial perspective has shortcomings but at the same time its importance to get a balanced view on an ethically constructed judgement.

With what did you agree, or disagree? Why or why not?

We agreed on the need for an ethical movement within the financial industry as by experience we know that ethical consideration are underweighted in decision making of most financial actors and that the financial system is not serving the common good. The only remaining play in this idea is the question; to what extent? Should banks be not-for-profit, for limited profit or limited in their size?


Written by: Jan Kubben and Thomas Hellebrand

Based on the lecture by: Christian Felber and Oskar v. Homeyer (“Democratic banking”)