Financial Democracy

Elaborating a new approach to the comparative political economy of banking, Financial Democracy presents evidence of both the recent return to traditional bank management and the resurgence of alternative banks with social and public policy missions. The book begins with a critique of contemporary approaches to banking, finance, and money in political economy, financial economics and, indeed, the major approaches to macroeconomics since 1945. In this analysis, traditional banks were expected to be replaced with market-based banking and new types of non-bank entities able to tap market efficiencies. Drawing on a unique combination of participatory democratic theory, comparative political economy, theories and concepts on banking and finance, and democratization studies in political science, the findings of this book are precisely the contrary. Historical-institutional methods and balance-sheet analysis reveal change in the opposite direction: a back to the future return to traditional strategies of deposit taking and loan making at banks. Since 2010, a variety of social reactions have been seen, in both advanced and emerging economies, against the commodification of credit, finance, and banking caused by the liberalization of domestic markets for credit and banking. This book will be of interest to readers in political economy, banking, finance and democratization.