the role of a public banking

How do communities and/or workers get the capital to start businesses with democratic control (external/internal) and equitable profit distribution? It seems like big banks would not be interested in giving loans to start these people-first institutions in the matter that they'd need to be. My question is this: what role could a national state-banking system play in the transition of a capitalist-owned economy to a community- or worker-owned economy? Keep up the good work.

Official response from submitted

Right now, private banks are under no democratic control whatsoever - the chief perk of the "private enterprise" system. If the gross, unethical, and often illegal activities of major US banks over the last decade finally aroused people to say enough is enough and change over to a public banking system at least partially under some kinds of democratic control, then an aroused public might also demand that the state banks provide loans to start and/or grow cooperative businesses. But even if state-banks could not be started or made to provide massive loans for a social transition to cooperative businesses, the state itself - independent of any banks - could and should make loan capital available for the important social purpose of such a transition. That indeed is already a commitment made to the British people by the UK's Labor Party (Britain's second largest party): that if elected they will use government funds to provide loans for the cooperativization of the British economy. A movement for something comparable here in the US is long overdue and would stimulate thought and action to make the transition a reality.

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