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TheFormation Quest & Society
The Moral Banking System
within the Moral Social Contract

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In brief, there should be but one bank...
  of two branches, and it should exist only within the executive branch whose custodians within the public sector disinterestedly would defer to all the people whose economic transactions more broadly base on a moral social contract which includes them within an economically-leading private sector. It then would do so from the true rule of law and not of any man or privileged interest group of men in its guise if the people contracted would follow the formative truths and facts which their constitution would express. 
  Bankers then would share this all-inclusive dedication with others while also serving custodial purposes within the two branches. The purview of those within the standardized "domestic bank" includes all economic transactions nationally enacted and consummated , and morally protecting them within the moral society's geopolitical borders must have top priority. Should another nation-state be in moral compliance, then their standardized "export-import bank" would play a role in their international trade.
  Bank custodians in both branches ethically would protect their moral social contract through a standard of  "moral pricing." In short, they'd value their country's single currency to include all other denominated currencies as converted into their own first by measuring the denominated values of each as against the tangible goods also transacted. Yet, though this would result in the measure of their domestic economy's total money supply mathematically as extrapolated, their only purposeful concern is with the citizens' transactions with the bank. 
  The only mandated transaction would be for taxation if it should apply, but even there no individual or interest group- including bankers themselves- would impose their concept of money within the disinterested process by which they'd measure and denominate the peoples' common currency. There, too, they'd only focus upon new-wealth formation where and when neither they nor any others would levy taxes otherwise.
  Moral formations of practical effectiveness would follow from the exchange of goods and services through moral pricing. For instance, the domestic effects of national and international currency supply and valuation elsewhere would be moot. There also could be no functional effect- inflationary or deflationary- from there upon their own currency because the people domestically wouldn't play by other's rules, co-opting their currencies domestically morally by instituting their own. Within their own morally-protected borders, they'd enjoy a morally-true "law" of supply and demand which actually would follow from a morally-standardized "demand-side" economics, one which itself truly also standardizes a consumer-based economics. 
  The consumer would come first economically even as the citizen first does politically and- only next- politically-economically. For bankers this would mean that each enfranchised citizen could elect either to save or invest her or his currency-denominated excess wealth or borrow from that invested without any charges or fees for the bankers' brokerage because, like all others equally within the purposeful public sector, they're paid only from tax proceeds. 
  Custodial bankers morally can- and must- add new currency to the "money supply" beyond that morally priced only to guarantee its return to depositors whose uninvested amounts have been lost through theft or mismanagement or natural disaster. Invested amounts lost as unrecovered wouldn't be returnable because the investor as a standardized "moral capitalist" alone is responsible for the amount he or she knowingly risks given his or her own politically-economic purpose to accrue a gain in new wealth.
  The sum the investor places at risk wouldn't exceed a percentage of the deposited amount regardless. It wouldn't because bankers must defer to the private-sector market they'd measure without reference to any individual or interest group within it. Thus they'd calculate such factors as the aggregate balance between depositor supply and borrower demand to determine that pro-rata amount as a percentage equally to be applied across the board. They'd use a similar calculation from the bank's currently-measured losses of loaned amounts against the total amount of loans outstanding to  determine the interest rate which would measure the borrowers' cost and investor's potential return. 
  Reiterations of the second calculation or its equivalent would establish lower or higher interest rates. These next would provide  a true equilibrium through supply and demand on both sides of the capital market- a consumer-based, capital "liquidity" which would be self-regulating of and from that market which really is both free and open within its cycles of contraction and expansion.
  The only cost of banking for the consumer-citizen would be to provide social insurance. The bank then would hold this currency in reserve for an equal pro-rata redistribution to those who have lost old wealth to "acts of God" or those of criminal men who cannot or will not make like-kind restitution as a condition of their rehabilitation within a moral judicial branch of the purposeful public sector.

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Last modified on September 18, 1999