Chapter 3: Just Money and Social Finance
By Sulekha Ramayya and Mary Ramzy
This chapter starts by talking about how money has changed from being part of a "brilliant accounting system" to become "corrupted and exchanged for profit-driven endgame of control over natural resources and human manufacture". It is ironic how money is both a source of pleasure and pain. Social finance places importance on social benefit in financial affairs. For example, in a loan situation it is in the mutual interest of the lender and the borrower for each other to succeed. Although lending is beneficial to funding growth in society, recent predatory practices like Payday lending have turned financing into an extractive industry.
The chapter then goes on to take about the injustice and corruption of the current global money system (an argument quite similar to that of Bernie Sanders). The author believes that the principle of altruism will come to replace the "driving forces of self-interest and accumulation". The rise of social enterprises and concepts like fair trade is evidence that this change is taking place today. Fostering a sense of community is part of this transformation and the concept of microfinance has facilitated this change in the developing world. The author firmly believes that we need to use social finance to empower individuals as opposed to using traditional finance which can tend to exploit individuals.
Not to be a pessimist, but I'm not sure if I agree with the principle of altruism replacing self-interest in the future. I believe the rise of social enterprises will increase more philanthropic actions, but our growing consumer society will continue maintain a more traditional finance approach.
ReplyDeleteNothing is perfect. There are flaws in the system but it is because humans have flaws and the system is used to accommodate those flaws.
ReplyDeleteThis is very controversial. Social finance in my belief will not work due to the mere fact that traditional finance is based off of the inherent quality of all humans: Greed.
ReplyDeleteI liked your point about money being the source of pleasure and pain, it's definitely a double-edged sword.
ReplyDeleteI really like how the flaws of the system are given. It shows how humans are not perfect, not even remotely.
ReplyDeleteWhile I definitely agree that there are flaws and evil motives polluting the system, I don't think that altruism and social finance will ever completely take over. And I don't think that is bad either! Humanity needs to help one another in order to live prosperously, but competition is the major driving force in growth, productivity, and raising the quality of life for everyone.
ReplyDeleteWe need both social and traditional finance. Borrowing money comes from a highly-fueled consumer economy. If people spends less money on things they don't need, they will have more money for the big ticket items that they do want.
ReplyDeleteWe need both social and traditional finance. Borrowing money comes from a highly-fueled consumer economy. If people spends less money on things they don't need, they will have more money for the big ticket items that they do want.
ReplyDelete