From predatory to progressive finance reorganizing finance for

From predatory to progressive finance: reorganizing finance for inclusive growth Tamara Lothian Senior Visiting Scholar and Lecturer in Law Columbia University May 27, 2014

From predatory to progressive finance: Outline of remarks The problem presented Lessons from recent experience Points of departure for an alternative approach Development of an alternative approach in the US today • The alternative futures of finance and the programmatic agenda of progressives in the US and elsewhere • •

The problem presented • Finance as master rather than servant: the corruption of finance • Legal and institutional aspects of the problem in the US: Hollowing out of the New Deal reforms to the benefit of speculative capital • Legal and institutional solutions: reorganizing finance in the service of the real economy and to the benefit of a program of socially inclusive economic growth • Comparative law as the practice of micro-institutional innovation and reform

Lessons from recent experience • Finance and democracy: US in the 1930 s; Sweden in the 1990 s; Iceland today; contrasting case studies: US and Europe today • Finance and the real economy: financial deepening versus financial hypertrophy; Northern Europe; postwar East Asia; US and Germany in the 1930 s • Finance and the institutional conditions of sociallyinclusive growth: opportunities and constraints

Points of departure for an alternative approach • From regulation to reorganization • Reorganization in the service of two ideals: tightening the link between finance and the real economy; finance and the project of socially inclusive growth • Bailouts, bankruptcy and debt relief: Restructuring as experimental reorganization (Geithner and Piketty notwithstanding)

Development of an alternative approach in the US today • Repudiation of regulatory dualism • Restricting financial activities unrelated to the expansion of output and the enhancement of productivity • Creating a nationwide system of entrepreneurial finance • Reinventing and multiplying the GSEs • Generalizing “high finance” to the US financial system as a whole • Restructuring as experimental reinvention

The alternative futures of finance and the programmatic agenda of progressives in the US and elsewhere • The imperative of structural vision • Worked out at an intermediate level, for example, in the organization and governance of financial markets • The importance of confronting and reshaping the prevailing understanding of financial crisis, recovery and reform • Using materials and examples from the progressive tradition in American politics, political economy and legal thought (viewed in comparative and historical perspective)