No Industrial Age banking allowed
David Judson AA
As the anti-banking “Occupy” movements grow and morph into the West’s version of the social network-driven “Arab Spring,” it is worth trying to contrast the two.
On the “Arab Spring” side of this transformational ledger the sagest advice I’ve encountered yet came from futurist George Friedman. In a widely-quoted essay written last February, Friedman argued:
“…as you watch the region, remember not to watch the demonstrators. Watch the men with the guns. If they stand their ground for the state, the demonstrators have failed. If some come over, there is some chance of victory. And if victory comes, and democracy is declared, do not assume that what follows will in any way please the West – democracy and pro-Western political culture do not mean the same thing.”
The world is readying to tally the results of Tunisia’s election on Oct. 23. We are still pondering the killing of Libyan strongman Moammar Gadhafi. We mull the flickering flames of revolution in Egypt and brace for more death in Syria. Friedman’s counsel seems as durable as ever.
So I took that essay, sent it to the best “Occupy” watcher I know and asked: What is the equivalent of the soldier changing sides in this effort to foment an anti-bank revolution in New York, London, Amsterdam, dozens of other cities and even Istanbul?
Bruce Cahan, a lawyer and former Wall Street banker, is founder of the still-being-created “Good Bank” that builds transparency into its lending criteria. A key goal is “impact awareness” as part of the customer’s user experience.
Now a visiting scholar at California’s Stanford University studying new lessons in the European bank crisis, Cahan didn’t have to ponder my question for long:
“The thing to watch,” Cahan suggested, “will be when the protesters actually lift the hood of modern banking and start redesigning the engine and gears.”
As of yet, he said, that is not happening. Understandably, angry people left devastated by home foreclosures in New York or evaporating wages in Athens are venting over the rapaciousness of banks and the financial system. Fair enough. But neither Europe’s nor America’s political class is looking beyond mollifying protestors. Which is the real problem.
“We still have yet to develop a road map to move from the failed model of Industrial Age banking to a new model for the Information Age,” he said. “That requires innovations that have yet to be designed and funded.”
Full transparency, and choices, about where your deposited funds are actually invested would be key. Instead of short-term maximum financial profits as the primary goal, discounted interest rates would exist for small businesses – for those weaving carpets, for example, with wool certified to have been produced with fair labor standards. Such “semantic money” would be flexibly priced on certain uses, or for use within certain boundaries to nurture communities or regions. These are just some of Cahan’s ideas for Information Age banking.
His planned TEDxNewWallStreet conference on the topic next February is worth a look at http://www.ted.com/tedx/events/779.
Keep watching the soldiers in the “Arab Spring.” Keep an eye on the hood over banking’s engine as the “Occupy” movement evolves.