Tuesday, August 7, 2012

Book Review: Other People's Money

Louis Brandeis's Other People's Money and How the Bankers Use It is a classic critique of the power Wall Street and financiers can wield.

The populist lawyer and later Supreme Court justice often critiqued and identified concentrated power as harmful to democracy.

In Other People's Money, Brandeis lays out his argument against the banks and Wall Street.

Brandeis claims that a small number of bankers use the people's own money deposits as the basis to control industry and finance. This power is then used to create non-competitive oligarchies that stifle creativity, competition and thus lower prices. In addition, many businesses run by financiers are not run as operational businesses producing goods and services, but more as cash cows to be mined, stripped and then discarded.

As evidence, Brandeis examines the connections of shell and dummy corporations, together with massive amounts of capital stock, that allow a small number of people to control so much wealth and direct activity.

His solution is creating financial institutions and marketplaces controlled by the people - credit unions and cooperatives.

While presenting one perspective to be sure, Other People's Money will be a much needed re-introduction to America's sometimes sordid financial past.

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