Democratizing Finance and Financial Institutions. Prof. Dr.rer.pol. Martin Büscher Protestant University Wuppertal/ Bethel, Institut for Diaconic Science and Diaconic Management (IDM) WCRC-WCC-CWM Consultations October 3rd, 2012, Guarulhos, Brazil. The Sourcerers Apprentice The Story –
Democratizing Finance and Financial Institutions
Prof. Dr.rer.pol. Martin Büscher
Protestant University Wuppertal/ Bethel,
Institut for Diaconic Science and Diaconic Management (IDM)
October 3rd, 2012, Guarulhos, Brazil
Protestant, calivinist ethics as the basis for the rise of capitalism – spirit of achievement, humble caring and investment
Liberal Economics – Adam Smith as a theologian
Good Reasons for Protestants to Argue Economically with Authority
Economics are disrooted from theology and ethics, in finance in its most anachronistic way
Anachronism of normative fundaments of liberal economics
Quasi-religious Settings: Markets as benefiary
Vacuum of ordering powers in neo-liberal naivte
Naivte of Economics in considering contexts
Naivte of Theologians to see the need for economic competencies in in actively shaping economic policy
For the service of life, financial institutions need a countervailing power.
Primacy of politics leads to integrate ethical dimensions.
IMF-Policy is dominated by group interests, aiming at untamed financial markets (individualistic approach).
Normative Considerations in a kosmopolitan framework for service of life are systematically neglected.
Complete replacement would miss the chance to direct international capital flows.
Make use of the institutions with the primacy of politics, replacing the primacy of markets.
Aim is efficient impacts of comprehensive democratic control and social, ecological and cultural sustainability, not the efficiency of financial markets.
The IMF shareholder structure is replaced by a stakeholder governance
Accordingly, the board is not only composed of financial experts (share-holder concept), but by governments, trade unions, NGOs, consumer organisations, etc. (stakeholder concept)
The serving role of financial markets has to be reestablished. For that a set of instruments can be applied.
Constraints of capital flow, capital control
Taxes on capital import
Taxes on foreign currency trade (Tobin Tax)
Bail-in of private creditors
Constraining credits to foreign investors
Cooperation of national financial markets control institutions
Guidelines for risk management of banks and insurances
Higher taxes on capital gain
Balanced currency exchange rates
Limiting offshore markets by the Financial Stability Forum (FSF)
Creating financial markets for economically developing and emerging markets
Series of Encounters with IMF-Representants and political authorities (Stiglitz Commission, IMF, WTO)
Found WCC School of Economics, Governance and Management (SEGM) for economic competencies and empowerment