Why we should Elect Bankers: On the Moral Authority of Bankers

Abstract

The majority of money is not created by governments but by commercial banks. They do this when bankers provide loans to costumers which is credit. The conditions for access to credit are dependent on someone’s creditworthiness. Since bankers formulate the terms of creditworthiness, they have a moral authority. Bankers make decisions on whom to include or exclude from credit. This is a matter of justice because people are increasingly dependent on credit as a source of income. In this thesis, I illustrate that the current fulfillment of banker’s moral authority leads to increasing inequality and can function as a mechanism of structural injustice. Political mobilization against these injustices are hindered by alienating forces of newly adopted credit-scoring practices. Such practices improperly focus on individual responsibility and lack the ability to understand social contexts, both of which have an impact on creditworthiness. Bankers who want to fulfill their moral authority in a more justice-sensitive way, face the Schumpeter’s Dilemma. This dilemma between distributive justice and economic stability can be tackled through the organization of social institutions. I present the Elected Banker proposal as a possible solution to these problems. In this proposal, bankers at the managerial level will be elected indirectly, based on economic expertise for a fixed period of time, by delegates from parties who take political stance in the credit-debate.