The capitalist financial system blocks democratic control over investment by its very nature. We need a new model of democratic finance that can address our urgent social and environmental needs.

Capitalist property relations, whose basic feature is the private control of the investment function in the hands of the few, generate systemic barriers to human flourishing and democratic life. These include ecological destruction, inequality and precarity, and high concentrations of political power for those with the capacity to make decisions about productive investments.

These crises have been recurrent ever since what we know today as capitalism began to be implemented about six hundred years ago with the initial wave of enclosures that “freed” the peasants from the land. That gave the new capitalist landowners control over how to cultivate that land and what to invest in and what not to. At its core, our major crises are the result of a basic design feature: capitalism shields investment decisions from democratic input.

the persistence of this simple structural parameter is strikingly durable. Indeed, were a social system to deviate from it, by definition it would cease to be a capitalist one. In his book Finance Capital, the Austrian economist and finance minister Rudolf Hilferding wrote, “The problem of property relations . . . attains its clearest, most unequivocal and sharpest expression at the same time as the development of finance capital itself is resolving more successfully the problem of the organization of the social economy.”

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