Of Banks And Narratives
We begin our story with two cities in the 1975 – New York and Damascus. A new idea of how to run society had taken hold of those in power, forever changing the world. And it was in New York that this idea had appeared in the western world. By the 1970s, New York was on the verge of collapse, and the city had borrowed too much over the past 30 years. Since World War 2, New York was consistently borrowing large sums of money to pay for it’s growing services and public welfare. But the banks had lent enough, and stopped loaning the city all together. While this was happening, the middle class was also leaving the city, further mounting pressure on the city to find another form of income. It was in 1975 when the banks just stopped lending money, completely blowing off a regularly scheduled meeting to issue bonds.
They were supposed to turn up at 11:00 AM. But by that time, it was clear they were not showing up. So the meeting was rescheduled for 2:00 PM. And again, it seemed they were not going to show up. Instead, they insisted that in order to protect their loans, they should be allowed to take control of the city. And while the city appealed to the president with little interest, a new committee was set up to manage the cities finances. Eight out of the nine members were bankers. This was the start of an extraordinary experiment where the financial institutions took power away from the politicians and began to run society themselves.
But the city had no other option. They had borrowed too much. What followed was their insistence that thousands of teachers, policemen, and firemen be sacked. And from this a new kind of politics was born. The politicians had the idea that they solved the problem through negotiations and deals. But the bankers had a completely different view. They were just the representatives of something that couldn’t be negotiated with the logic of the market. To them, there was no alternative to this new system. It should run society.
But the extraordinary thing was, no one opposed the banks. The radicals and the left-wingers who, 10 years before, had dreamt of changing America through revolution, did nothing. They had retreated and were living in the abandoned buildings in Manhattan