The Master's Tools: How Finance Wrecked Democracy

by Michael A. McCarthy

Democratic control can make finance a tool to express and carry out the will of the people

Why is democracy so broken and how might it be fixed? Most political commentators point to heads of state, such as the Presidency, and other formal institutions of the state.

But in The Master’s Tools, award-winning author Michael A. McCarthy argues the answer lays elsewhere, in the flows of credit and investment bound up with finance capital. In this groundbreaking work, McCarthy develops a political and social theory of democratic ruptures that argues that democracy is deeply intertwined with the economy itself.

He shows how democracy can be deepened and working-class power strengthened by creating new sortition-based institutions of deliberative finance. His radical proposal, the first of its kind, offers practical steps toward a comprehensive design to create the investment mandates that are needed to fund a just green transition, social housing, and other socially necessary, but privately underfunded, public goods.

Genres: Politics, Economics, Nonfiction, History, Finance, Theory, Society

272 pages, Hardcover

Published January 7, 2025

Reviews

[Giacomo]

A lot of good points, too many perhaps, not explored enough and ends up being a bit confusing. Agree with a lot of the views expressed (deliberative democracy, state and institutions as terrain of struggle) some seem a bit out of place (the chantal-mouffe agonistic element seems to be a bit random to me).
Personally, I am very intrigued by the possibility of setting up democratic finance institutions and how they can be in synergy with other progressive organisations (maybe a banks would fund co-ops or even unionisation efforts). Unfortunately, the book seem to be rather vague on the subject but mostly interested in setting these up once the left has state power. Had the book focused a bit more on some blueprints (as far fetched as they may be) on how to build power using such democratic finance institutions, i would have enjoyed it more

[James Graham]

The Master's Tools is a difficult and somewhat unsatisfying read, which is a shame -- the author has good ideas that I had never considered and was excited to learn about. He is clearly passionate and extremely well read, but I, like much of the demos, do not wish to match his academic energy in my free reading time.

The reading experience was unforgiving: this book reads like one half of an argument between colleagues. Many passages feel like they could begin with "and I know what you're going to say!" as though the reader is prepared to refute each paragraph with their own research. I was not, in fact, prepared to refute the arguments of this book, and so my experience was turbulent. I was jostled by sudden references to academic literature I've never heard of, and endured what felt like asides into theories I could not explain, let alone contrast with the one posited by the author. Perhaps this is a "skill issue" on my part: I'm not a political theorist or a historian, just a person who cares a lot about structures and systems. But I imagine that most of the general public would feel similarly if given this to read. I left The Master's Tools feeling that lurking within the ~215 page version of this book I read is a ~100 page version that would be a much more accessible to the demos who need to read it.

As for the ideas themselves? Incredibly thought provoking. I am completely persuaded by the need for public banking supervised and directed by minipublics. I am glad to have endured the rigorous sections in which the author walked through other options like norm adjustment, reform, representational systems, etc., before reaching his conclusion. His aside into Web3 in particular was helpful to me as a technology professional, as he explained the underlying political assumptions of DeFi-world in a way that made his own proposals stand much better on their own. I will definitely be using much of the content of this book in political arguments with my family for decades to come.

One critique as a non-expert: I do think that several complexities of his system are papered-over. A public bank still needs banking professionals, and those banks still need to operate with some degree of efficiency. The author spends no time on the actual operations of a bank overseen by ~150 randomly selected citizens. Having worked for large organizations, I feel like being managed by a 150 member parliament comprised of ~10 or more subcommittees would be a big challenge. Moreover, despite my very optimistic view of humanity, I think minipublics would surely be entirely beholden to the quality of the experts provided to them, which seems to simply move the elite bias around. Consider grand juries in the US: ostensibly randomly selected citizens evaluating on the facts, yet the meme about the grand jury is "you can get them to agree to anything." So much for the will of the demos! Why wouldn't minipublics be swayed by the opinions of the banking experts offered to them? And how do we work to maintain a necessary level of civic spirit and education such that random members of the public aren't a liability or disruption to the minipublics? Perhaps looming over all of this is the author's statement in the conclusion that the powers over finance today "wouldn't give up power to the demos lightly" -- yes, this might prove an issue the demos needs to resolve with a different form of direct political participation!

Ultimately I'm thankful to have read this book, but I wouldn't recommend it to non-academics. The author's message is a necessary one that meets our moment, and it is well, if exhaustingly, argued. I would love it if there were a blog-post or essay length version which I could share with the people in my life who care about politics as I do.

[Alexander B]

Decent defense of democracy by sortition with some specific models, but I think the relationship to investment and capitalism is under-explored. Democratizing financial institutions sounds great, but it’s actually not obvious that that would end capitalism and its exploitative consequences. For that you would need to start with a definition of capitalism, which the book doesn’t really do.

[Klejton]

Tries to do too much, all at once. Ends up doing nothing.

[Josh Parkhill]

The chapter in my life in which i'm reading this book has finally come to a close. After re-reading the third chapter, three different times, it called into question why I was continuing to read this book at all- so I stopped.

There were some things I liked in this a lot. Like a lot a lot. But I think it's trying to do too much, and say too much, and in-doing so fails to present one cohesive vision. The first and second chapter presented a number of ideas and frameworks I found genuinely fascinating.

But outside of the causal based double-state explanation of The State, none of these ideas were explained in full circle.

The third chapter felt like reading a scatter plot. I got the impression McCarthy was trying to achieve a pre-determined destination point, and therefore his history of financialization wasn't told retrospectively as a type of causal driven story, but rather read like an odd wiki backfill.

I spent a lot of energy re-reading this chapter to understand his points, before coming to the conclusion it was just poorly written. The author does not do enough to ground or contextualize the relevance of his points. If shareholder primacy is bad start with the fundamentals, tell me what it is -> then why it's bad, and then what an alternative might be, otherwise why are you even including that point? Or the point 'democracy does not equal MORE access to markets' (Yes! I find that exciting, but tell me why, give me more to suck my teeth on).

it often feels like McCarthy is starting in the middle of a sentence or point. He needs to convey his ideas like other popular intellectuals do. Like Jonathan Haight or Steven Pinker? Watch an episode of John Oliver, or read Rick Rubin's The Creative Act or bring on a copy writer to help you with your next book. Summarize things from top to bottom. Every three paragraphs need to be framed in a way that bring it back to the main point.

Also terms like conjunctural analysis will help no-one. It is too academic, make it relevant. Make it an idea that can penetrate the culture. I was disapointed with The Master's Tools, but will read anything else McCarthy ends up putting out.

[Adam]

Despite an unnecessarily lengthy and verbose introductory part, the second and third parts were fantastic. In the second part, Michael McCarthy provides a concise and impactful history of how financialization overtook capitalism. In the final part, he provides a framework serving as a starting place on how we fix the principle driver of inequality and planetary destruction. The second and third parts were so good that I forgot how frustrated I was during the first couple chapters. The only negative blips I had throughout were times when he used inaccessible language without elaborating. For example, he often relies on infrequently used words and concepts without priming the reader on the history and context necessary to comprehend his point. For a book that is trying to appeal to the demos, he should have ensured to write in a way accessible for the demos and not the privileged elites that so many in academia get swept up in trying to impress.

[Andy]

This is a challenging but at the same time rewarding read. There is a balance between analysis of the current conjecture and ideas for future improvements. While you might disagree with some or all proposals, one would definitely learn from them. Highly recommended read.