Social Banking and Social Finance Answers to the Economic Crisis
For over 2,000 years, banks have served to facilitate the exchange of money and to provide a variety of economic and financial services. During the most recent financial collapse and subsequent recession, beginning in 2008, banks have been vilified as per
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Roland Benedikter
Social Banking and Social Finance Answers to the Economic Crisis
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Roland Benedikter Stanford University The Europe Center Stanford, CA, USA [email protected]
ISBN 978-1-4419-7773-1 e-ISBN 978-1-4419-7774-8 DOI 10.1007/978-1-4419-7774-8 Springer New York Dordrecht Heidelberg London © Roland Benedikter 2011 All rights reserved. This work may not be translated or copied in whole or in part without the written permission of the publisher (Springer Science+Business Media, LLC, 233 Spring Street, New York, NY 10013, USA), except for brief excerpts in connection with reviews or scholarly analysis. Use in connection with any form of information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed is forbidden. The use in this publication of trade names, trademarks, service marks, and similar terms, even if they are not identified as such, is not to be taken as an expression of opinion as to whether or not they are subject to proprietary rights. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
For Ariane and Judith
Foreword
In this intellectually provocative volume, Roland Benedikter provides a lucid, cutting-edge treatment of the present-day process of banking and financing in the global economy. The description of the anatomy of the crisis of 2007–2010 is followed by a disquieting analysis of the many pathologies involved, which, if not cured, might jeopardize the stability of our model of Western democratic social order. The sense of omnipotence, fostered over the last three decades by an ambivalent economic theory that insisted on the self-referential nature of finance, came to dominate the mental habitus not only of traders and financial institutions, but also of political authorities and educational agencies. Against such a picture, Benedikter advances the proposal of social banking and social finance as new, progressive approaches to money and finance, capable of reorienting the present situation. The author not only provides a most useful array of information about social banks, but successfully endeavors to make explicit the philosophical background underneath this specific mode of exercising the banking and finance activity. All the great economists, from Adam Smith onward, have recognized that economic institutions – such as the banking and finance system – do not emerge in a cultural vacuum, as if they were given by nature. They have also recognized that market institutions generate and induce desirable as well as undesirable social traits. It follows that we cannot simply exonerate ourselves from the duty of considering the feedbacks of specific economic arrangements on human character. The main point advanced by the author of this volume is that there is not a unique route to economic progress. On the contrary, there is a variety of models of market economy, each
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