Oh, okay -- so you draw the line at equities....
Yeah. Bonds are equities but I meant stocks and other fictitious capital. No mortgage derivatives
The problem with those things is that they are forms of ownership of the means of production, which can't be allowed.
Let's say there's overwhelming mass sentiment supporting the construction of a new, better kind of semiconductor fabrication plant, but the funding for such a factory can't be found among the banks from simple wage-savings.
Since your system would allow for credit, would the public community banks be allowed to issue bonds at all -- ? Bonds would allow the banks to raise more funds, more quickly, for development projects, but the banks would then have to pay interest to the bondholders over time.
I'd be interested to know how the decision-making over the issuing of bank bonds -- or *any* credit, for that matter -- would be handled, to avoid the influence of 'outside investors' who have more-active roles in the provisioning of funding, as for much-needed large-scale projects.
I don't know, I'll have to reread what Schweickart says about this and give it some though. Maybe it's possible for the federal bank at the appropriate level to just issue the credit by fiat rather than backing it with bonds. Just print the money or credit the requestor's account. After all, new money is created by banks, so why can't it be backed by real investment instead of debt instruments?
'Perhaps' banks could have wider community ownership -- ??
*This* is the core of what you espouse concerning political economy -- ?
I just don't see how any system of populist "co-ownership" over public finance could prevent *private interests* from building up wealth, resulting in massive influence over the banking system.
It's possible to get rich in market socialism, but it doesn't derail the whole system because it's limited to what an individual can accomplish themselves. Even if your business was to sell gold bars, and you made a handsome profit, as soon as you needed to expand your business you have to bring in a co-owner, thus diluting your earnings. There are no hierarchical pyramids of wealth acquisition where a capitalist(s) gets to siphon surplus value from tens, hundreds, or thousands of people.
So I don't see how these individuals are going to get undue influence over the banking system. There is no reason why banks have to be one-dollar, one-vote institutions. If the coops in a region where all members of a particular bank, there would be pressure to ensure fair dealings. Bribery or corruption are possible, but those things happen in all systems. No system is perfect.
"This is my test of character. There you have the despotic instinct of men. They do not like the cat because the cat is free, and will never consent to become a slave. He will do nothing to your order, as the other animals do." — Jean-Jacques Rousseau.
"The intellectual and emotional refusal 'to go along' appears neurotic and impotent." — Herbert Marcuse.
"Our blight is ideologies — they are the long-expected Antichrist!" — Carl Gustav Jung