A Dialogue between a Citizen and a Bank: For the People Occupying Wall Street
Citizen: So, tell me, why should we allow you to exist in our city?
Bank: What an odd question. You need money and I have it?
Citizen: Why do you have the money?
Bank: Don’t you know the story? People brought their money to the bank for safekeeping, and I am using their money as thought it were mine. After all, more than likely, they will not ask for their money back, at least not all at the same time. This allows me to provide loans to citizens, even like you, so they can buy the things they want.
Citizen: So you get the money from the people?
Bank: Well, some of it. We also get money by creating it.
Citizen: How does that work?
Bank: Here is an example: the federal government needs more money to pay its bills—for wars and things—so it asks us for money. The increased government debt becomes an asset for us (they owe us money plus interest), and this asset allows us to loan more money to you and other citizens—at a reasonable interest rate of course.
Citizen: I don’t understand. Why should the government pay interest for money that it asks you to create to pay its bills? Why not take the money without interest?
Bank: If the government did not pay us interest, we would not loan them the money?
Citizen: Really, so who is in control her: banks or the government? In a democracy, the people should control the money, not the banks.
Banks: Well, if you really believe in a government by and for the people then you would be correct, but this kind of democracy has never been tried and would most likely end in chaos. The people, after all, are not really trustworthy.
Citizen: I see. It seems you belong to a long tradition that believes we should give priority to property ownership over civic membership and that the elite should rule rather than the people.
Bank: Of course, if you do not own anything, what do you have at stake in the economy? You would be a free rider—a parasite.
Citizen: OK, I see your perspective. What if we took another perspective: the perspective of those who are not owners of wealth? What would they say about the role of banks in their communities?
Bank: If they do not have any money to save or a good credit rating, I don’t see how we could serve them.
Citizen: The question is not what you can do, but what needs to be done. In a real democracy, you should serve all citizens or you would not exist.