Hayward, Tim. "Constituting Finance as a Global Public Good". In Global Justice and Finance, by Tim Hayward, 147-170. Awaiting Publication.

Hayward, Tim. "Constituting Finance as a Global Public Good". In Global Justice and Finance, by Tim Hayward, 147-170. Awaiting Publication.

• The premise of this entire book, 'Global Justice and Finance', is a philosophical critique of Francis Fukayama's claim that Western liberal democracy is the final form of human governance. The institutions supporting liberal democracy provide economic incentives to work at the detriment of the global poor and the environment, meaning that the liberal democratic order is not only not sustainable, but global justice requires that it must change (147).
• Money is not a neutral concept, but instead fiat currency implies political and economic consequences for its use and control. Essentially all philosophical ideas of justice falsely assume that money is apolitical, rendering them inapplicable in the real world of multiple fiat currencies (147-148).
• Finance is essentially a legal and political issue, as it requires the force of the law to maintain and involves essentially political decisions about its effects and the goals of monetary policy. The legal aspect is obvious, in that finance requires agreements enforced by law (151).
• The actual influence of the current legal regime on finance is diverse. Laws limiting liquidity to prevent runs on banks also limit the flexibility of financial systems to respond to crisis, with capital controls affecting some more than others. Different rules governing different types of finance -- shares versus government bonds versus cash -- mean that different types are considered preferential at different times because of divergent regulation (151-152).
• A distinct legal regime, although not globally or individual relevant, regarding finance has already been formed along the free trade arguments of the Washington Consensus. Its essential values and rules are enforced through the binding agreements of the EU, WTO, NAFTA, MERCOSUR, and APEC. In addition to standardizing contract law across countries, these treaty organizations have also required member states to adopt similar positions on the legal status of multinational corporations (153).
• Broadly, these international economic agreements protect the legal status and enforce the financial contracts of corporations, while simultaneously restricting the ability of member states to regulate the activities of those corporations (153).
• One of the most troubling developments resulting from this regulatory regime is that under these treaties corporations have gained the right to legal resource for the enforcement of treaty obligations. These rights under international law constrain the ability of sovereign states to regulate corporate activities by allowing these corporations legal recourse (154).
• The practice of granting transnational corporations rights of legal recourse to enforce treaties has also extended to most private-government investment contracts. This means that most foreign direct investment agreements give corporations the right to sue governments for non-complience (154).
• Moreover, the ability of these courts to develop a corpus of common law based on past ajudications results in new interpretations of these treaties and of international corporate law. Some of these court decisions, though it is unlikely, may create precedents not intended by the signatories (154-155).
• Central banks are at the core of contemporary financial systems, yet are often subject to limited or murky regulatory regimes or political control. Central banks currently inhabit a position similar to the judiciary, linked in some way to politics but purposefully separated to insure independent action: unbiased judgements for the judiciary, competitive pricing on government debt for the central bank (158).
• The conception of the central bank as an independent institution become immensely popular during the 1980s and 1990s, particularly due to promotion of this idea by the IMF. This only began to generate contraversy in the aftermath of the 2008 financial crisis, when, after failing to increase economic growth by lowering interest rates, central banks began to use unorthodox methods with unknown risks to public finances (158-159).
• The recent trend towards the depoliticization of central banks is fundamentally out of touch with their nature, as deeply political institutions with the power to make policy choices with profound social and economic consequences. The expansion of central banks powers beyond controlling inflation in the aftermath of the 2008 recession demonstrated this political nature (159-160).
• The techniques and policies employed by central banks for all of their goals, including controlling inflation, are deeply political in that multiple choices exist benefitting different groups, and central banks make choices benefitting some groups and interests over others (160).
• A particularly damning example of these choice has been the perverse combination of quantitative easing and austerity measures persued by European central banks. It has ensured continue supplies of capital to banks to make up for withdrawals by freightened consumers, while simultaneously increasing the public debt which austerity programs were implemented to cut (160).
• Central banks themselves are tied to an international organization known as the Bank for International Settlements, a central bank for central banks from which they can borrow money/ be issued debt and is co-owned by all central banks. Its exact legal status is murky, but it clearly protected from lawsuits (161-162).
• The Bank for International Settlements was established in the late 1920s to manage international gold reserves, and facilitates cooperation between central bankers -- including infamous episodes such as international recognition of Nazi control over Czechoslovak and Polish gold reserves (162).
• The biggest threat posed by the Bank for International Settlements is that its guidence and meetings essentially set the policies for most major central banks, meaning that an undemocratic and legally immune body is responsible for setting monetary policies in much of the world because central banks are more loyal to the Bank for International Settlements than their national governments (162-163).
• The author suggests that resilience of the international banking system to largescale warfare, including the Second World War, demonstrates that powerful financial elites do not have major incentives to avoid war. Furthermore, financial elites may benefit from continued war because the arms industry and post-war reconstruct provide a secure and productive returns on investment only if conflict continues to exist (163-164).
• The author makes a conspiratorial suggestion that countries which have traditionally resisted the influence of the Bank for International Settlement have been specifically targeted for Western intervention. Furthermore, the Iraq War was motivated by the fact that Saddam Hussein was rumoured to have wanted to change oil trading from the US dollar to the Euro, risking the interests of bankers (164-170). This claim is actually bunk, it presumes that most states participate in these mechanisms, while in fact those states which have been invaded remain a small minority of states which have rejected the BIS and other financial institutions.
• The author claims that this American backed conspiracy of central banks, organized through the Bank for International Settlement, is motviated by a potential switch from the US dollar to the Euro as the world's primary reserve currency, potentially triggering a massive sell-off of reserve dollars, resulting in massive inflation and the destruction of the US economy. So the US invades any country which has a state-owned central bank and tried to switch from the US dollar to something else (164-169).

This chapter begins by arguing that finance is inherently political and that the institutions for controlling it should be democratic: conversely, it is currently dominated by private interests relatively immune from state control, a fact demonstrated during the aftermath of the 2008 financial crisis. It specifically criticizes the independence of central banks. Then it takes the express train to crazy town, leaving sanity city along the route of: global finance systems continue to function during war and war benefits some elements of the financial industry, preceeding to banks have an interest in creating conflicts, reaching its destination at banks engineered all major conflicts in the Middle East, North Korea, Cuba, and Venezuela because these countries refuse to privatize their central banks and might have at one point discussed not using the US dollar as a reserve currency.