Chapter 17
The financing system

In any vaguely reasonable system, banks must be exclusively nationalized, because the notion of private banks is heresy. Indeed, at the level of individual deposits, the guarantee is a social necessity, therefore the bankruptcy of the bank is no longer socially possible. Furthermore, at the level of financing activity and households, defining to whom we lend and up to what level is a fundamental element of economic and social policy, and therefore a sovereign function. When the State abandons this function, it is forced to set up a gas factory of subsidy systems and rescue of companies in danger which is ultimately much more expensive and less effective. On this point, it seems that for several decades, those in power have yielded common sense to liberal ideology and pressure from lobbies.

In the system we propose, the bank provides four basic services to individuals and organizations, namely reliable accounting of the assets in each account, and the provision of the three forms of payment which are :
Direct payment, via a wallet bank card.
The transfer, via the Internet.
Validation of payment requests received, always via the Internet, instead of the system currently called direct debit.

Then, the bank provides a noble service which is financing for organizations, and credit for individuals and organizations. The role of the bank is to allocate funds to best meet the specifications set for it by what we currently call politics, but which in our system is gradually transferred to organizations, in the same way as production. In other words, the noble role of the bank is to apply the strategy aimed at optimizing the social benefit to risk ratio.

This financing system ensures the unification between what we today call commercial enterprise, administration and the forms of solidarity economy enterprises. Indeed, an organization as we defined it in Chapters 8 can play the economic and social role of all the entities we have just cited. This is made possible by the fact that it is not required to achieve a positive financial result over time, and does not need capital since the bank can choose to lend to it, or to subsidize it.
The universal character of organizations in economic and social matters is therefore due to their ability to reconcile two characteristics. On the one hand, their ability to maintain good operational efficiency over time, mainly due to their resilience with respect to Parkinson's law (1). On the other hand, their ease of remaining at the service of the general interest due to their non-dependence on private capital, and therefore their non-dependence on private interests.

This banking service is provided by organizations of around a hundred people, in accordance with the description in Chapter 8. Each natural or legal person chooses their advisor in one of the banking organizations, and can change at will, but does not only has one at any given time. Non-bank organizations and other possible private companies are not authorized to provide credit or sell insurance, either to individuals or to other organizations or companies.
Symmetrically, natural or legal persons are no longer authorized to make financial investments. The reason can be found in Chapter 4: an investment is a political act, because the sum of investments has a major structuring effect on economic activity, therefore to ensure respect for the common interest, investments should be the result of in-depth reflection, which the majority of citizens do not provide when investing their savings. Our intention is not to limit individual freedoms, but simply to return money to its primary function as a means of exchange, whereas it had become an object of accumulation and power "I lend you my money on condition that you...", of fetishism as Marx said.

The creation of organizations occurs through a dual spontaneous and directed mechanism.
An individual can submit a project to a bank to obtain financing allowing the organization to get started. This is the spontaneous side.
Existing organizations can launch calls for projects, which are collected, classified, and distributed to the public and banks by specialized organizations. An individual can therefore strengthen their file or build it by responding to all or part of one or more calls for projects. This is the led side.

 

(1)
An effective modernization of public services absolutely does not mean applying 'management' methods from the private sector, supposedly more efficient, which we saw with the article by Meyer and Rowan are only myths. . Effective modernization of public services means setting up an effective system to combat Parkinson's law. This implies that, in the absence of an alternative proposal, an effective modernization of public services is their transformation into organizations such as described in this book.