in which I outline generally why I try not to get involved in the banking system

I currently have accounts with 3 different credit unions littered across 3 different provinces and states. Yes it’s a pain in the ass. No they don’t yet have an interoperable financial network. But I’m not contemplating giving up and getting an account at a single Bank with lots of conveniently located branches.

When you get a bank account, you’re (literally) buying into the grow-or-crash system of capital investment that largely drives business in the western world, and your money is going to fund ventures that you don’t know and can’t control. Banks take your money and invest it in businesses, and then when those businesses make a profit, the Banks take a cut of that profit in return for the money they invested, and you take a cut of it in turn as interest on your account. So even if you don’t personally invest in the stock market, if you have a bank account you are effectively participating in the capital investment and return infrastructure.

I have a couple of issues with this. First of all, on a grand scale, it’s inherently unsustainable. In order for businesses to raise capital from this system, they have to be able to promise to generate profit above and beyond their operating expenses and salaries. If they don’t there is no extra return for their investors and therefore no reason for those investors to invest at all. You don’t bother buying into stock that you expect to maintain the same price from now on. So it’s not good enough for businesses to simply make worthwhile goods or services and pay wages to their employees and taxes. They have to grow, and never stop growing. And should they not grow, then their value will inevitably go down, as investors pull out looking for more profitable arenas. Once they start to lose their value, the vicious cycle kicks in as more investors leave and soon all their capital disappears. So maintaining yourself at a given size = crashing. Grow or crash, those are your options. Despite the mitigating effects of more efficient technology and practices, it’s probably not possible for every venture to grow forever without depleting the world’s resources or without being forced by the competitive environment into doing unethical things to survive, and the current state of the world appears to bear that assumption out. I recognize that there are wise people who disagree with me about this, but this is based on my own experiences and thoughts to date. And hey, George Soros has got my back on this one, and he’s rich as God.

For the record, I understand that by facilitating the availalibity of money to businesses to finance their operations before they reach full profitability, this growth-based system is responsible for generating so much of the wealth that our country and so many others is based on. But I figure we could all probably be pretty happy with a little less raw “wealth” if we had a saner world to spend it in. And I also recognize that Credit Unions, similarly to banks, use their member’s equity to make investments in profit-generating enterprises. But Credit Unions are not invested enterprises themselves, and thus don’t have the same impetus to grow or crash that Banks do, giving them a lot more leeway in choosing who they are going to invest in, and what rates of return they will demand. Being member-owned and controlled (at least in theory) they also have impetus to ensure that enterprises they invest in are in line with values of their members. Which leads me to my second issue with the Banking system.

When your bank invests, you don’t know who it invests in. They don’t make an effort to publish that information. When was the last time you saw a list of the investments your bank makes with your money? Maybe they invest in Texaco, or Shell, or Esso. Maybe they invest in RH Phillips, or the people that make cruise missiles. Maybe they invest in Starbucks, or Nike, or Walmart. Maybe you don’t care, but maybe you do. It’s 2am. Do you know where your paycheck is? To be fair, I don’t either, but I’m pretty confident it isn’t providing operating capital for any of the above.

Hopefully then, credit unions offer some sane compromise between wealth generation and wise society building. I had to take a deep breath before opening my third credit union account. At the time, I seriously considered just going with a bank. But I haven’t regretted the decision once since. As a lovely bonus prize, I’m getting the fabulous service that co-operatives seem to be able to provide (with some exceptions) and that’s a treat.