Economics, Modern Times

What Is A Bank?

Hugely expensive buildings that lie in the most expensive parts of town. inside the massive and opulent atrium on the ground floor, the richness of the fittings will dazzle.

HSBC headquarters in Hong Kong.

Today, they are symbolized by the skyscraper. A polished and very expensive skyscraper at that. If you are allowed inside the massive and opulent atrium on the ground floor, the richness of the fittings will dazzle. The bank appears to be an august and important institution in a country’s economy; enormous institutions that are fantastically wealthy. Hugely expensive buildings that lie in the most expensive parts of town.

However, the modern bank has not met the demands of our time. But if we are to understand what a bank is, we need to know what it deals with: money.

A Quick Look At Money In Society.

If ever I should meet a professional economist, I will assure you that they cannot answer the simple questions. They know everything about what economics should be; they don’t know what it actually is. That means everything they do in economics will be based on excuses rather than the kind of simple answers that arise from looking squarely at the facts. But then, they’ll tell you that you are stupid for asking such a simple question.

Money in a society is like our blood. The blood takes all we need to any place that needs it. The blood is the same everywhere, but services each part according to its needs. Money as the ultimate commodity can undertake this in our society: transmitting wealth to a cobbler, greengrocer and garage mechanic alike. All according to the part they play and the degree to which they play it. There is no difference in the money, yet each business uses it in their own way in order to create the goods that bring more money in.

Any money that his harboured is stationary. That’s fine if a shoe repair business has a small reserve for the next time the salesman arrives with a new delivery of processed leather. It is quite another thing to keep a stack for when times are thin; the cobbler serves a community where all shoes wear out in one way or another. There will always be shoes that need repairing, even in the worst economic times.

Now imagine that the cobbler is wise enough not to keep the money under his bed. He knows that when he puts it in a bank, it’s not only safe, but he will get a small return each year through having invested it. In this sense, the organ is actually the bank itself.

The Bank As The ‘Heart’ Of An Economy.

As an organ, a bank is the ‘heart’ of an economy, it is there to ensure the regulated flow of money.

The bank takes money that it is given in trust and employs that money to help growing businesses to establish new areas of production. In their turn, they make a profit and a share of this profit is then handed back to the lender, the bank, in an agreed manner. Thus the reality of a bank is that it has no money, and it cannot be rich. The money in a bank is that which it is entrusted with, and in being entrusted, finds trustworthy people to lend it to.

The problem here is that money can flow anywhere, and without conscious handling, will.

Banks And The Disconnect.

A HSBC cash machine at the Star Ferries pier in Central.

A HSBC cash machine at the Star Ferries pier in Central.

I can’t find the exact quote, but it is implicit in the way Rudolf Steiner speaks about business and investing. Most people read the things he says and shake their heads in disbelief, and what he said about investment is one such. “If you are lending,” he says, “you will offer a lower rate of interest to an intelligent man.” There is a very real problem here for the modern businessman: you can’t count intelligence. (1)

Since they are incapable of determining intelligence directly, they must resort to other methods, namely, numbers. This has led to a ‘mechanized’ form of lending in which numbers determine the effectiveness of a person or business. The problem here is that this removes the qualities that make the business sparkle, as it were; it turns the business into some lumpen supermarket that has real problems when it comes to turning a profit. What’s more, anybody who can do simple sums will be able to play this game. In most cases when a person has so little confidence – and mark that confidence has nothing to do with a person’s intelligence. The most intelligent person can lack confidence; this is the ‘disconnect’. Thus we have a situation where they will also be scared to do things when there are no numbers to guide their thinking. The challenge of our modern world is to unite our powers of intelligence and our powers of confidence – and all decisions based on number will undermine this.

When people are chosen because they possess a certificate no account is taken of how good they are at investing money that is entrusted to them (2). That is to say, they cannot reckon how to take a risk for themselves. Taking a risk based on evidence means that all the things that cannot be estimated in numerical terms are put to one side… the problem is that just because they aren’t accounted for does not mean they cannot have an effect (3).

In the world that has been created through such dim-wittedness, that is to say it is driven by numbers and evidence, the chances of making a good investment are extremely slim. You can imagine why banks are thought of as gambling houses, because that is what a person reduces themselves to when they are unwilling to think for themselves: other forces will guide them.

The Profitable Bank.

The way society views its banks is another serious problem, and it is because they are seen through the veil of the account book and the low level of thinking that arises when a person’s mind is dependant on figures. Rather than the events that create these figures. Thus society views a bank as a business and not an economic agency.

A business is there to create or serve a need. A need here being a physical or emotional need. People do not need money; they need what money can buy for them. An economic agency (4) supports the economic life of an area, it is not there merely to make a profit. This is ideal, but ideals in economics when applied intelligently will bring prosperity. Banks have manifestly failed in this task, and as a result are the primary cause of economic problems. This is especially true for countries where banks are poorly regulated, such as the UK and US, where all the recent economic turmoil has stemmed from.


(1) You can attempt using the crude and ineffective intelligence tests, but there is nothing to compare with a direct experience of dealing with someone who is truly brainy. Lorry drivers, carpenters and the ladies who clean the toilets can all be intelligent; they will all show it to someone who appreciates it. To those who don’t, the majority, it is a matter that they are beneath them and are there to do as they are told.
(2) Remember Jan the fraudster? He thought he was a good businessman.
(3) The things that are ignored in such studies usually lie in the subconscious. That they are invisible to us doesn’t mean we cannot be affected by them; the understanding of which is explained in my oft referred to post, ‘Milena Sees Witchcraft Everywhere.
(4) This is my own terminology; in modern ‘Purchase Money’ thinking, the economy is served by profit making businesses. Here I am describing an agency that supports businesses in their work, but need only sustain itself. Modern economic thinking, based solely on the account book, insists that these agencies make money. It is here that a major mistake is made, so severe that the world’s economy is now at risk from the very institutions that should be supporting it.


6 thoughts on “What Is A Bank?

  1. mrmetatarsal says:

    Perhaps i am not most men! However i am of the opinion your output is valuable to both sexes. I can see that many, may be unable to grasp what it is your offering. They are missing out on some interesting, insightful pondering. Keep up the pondering,and dont worry too much about the moaners,male or female.


    • Gemma says:

      The things I offer aren’t hard to understand, but it does demand that a person thinks for themselves.

      That in itself demands that each person acts as an individual – and there are all too many who are scared to. That’s when they moan (or worse).


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