Crime Against Humanity: Pensée Unique in Economics, 39

It could be said that our long investigation has eventually brought us back to what we knew all along: what makes that organism called society thrive or wither is none other than the lymph called purchasing power, transporting the nourishment to its cells, depending on whether its flow is boosted or hindered. And what is true for the whole is true for its parts as well.
In Werner’s words, “This means (a) that the market for credit is determined by the quantity of credit supplied by the creators of credit, and (b) those suppliers – mainly commercial banks – make allocative decisions about who will obtain loans and who will not. … credit supply determines the credit market and hence economic activity. The supply of credit constitutes a binding finance constraint on the macroeconomy… Credit rationing by the banking system in aggregate will also lead to rationing in other markets. … Since the credit market is supply−determined and the decision about whether and how much to lend and who to lend to is entirely made by the banks, a crucial public goods function that affects the entire economy is performed by them. They not only create most of the purchasing power in the economy, they also decide about who will use it for what purposes. A rationed market means that some loan applicants are accepted, while others are rejected. There is no guarantee that the choice made by individual banks is consistent with the allocation that would maximize social welfare. Given the pervasiveness of imperfect information, it would be a mere coincidence if the banks’ decisions were welfare optimal. Indeed, the incentive structure of loan officers may produce behaviour that is oriented towards other goals than what would be in the interest of the overall population (for instance, they may favour large−scale firms in established industries, as this may minimize risk to their own job security, or real estate speculators, expecting high profits).”

Crime Against Humanity: Pensée Unique in Economics