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With full reserve banking, banking loses its reason d'etre, you can basically change the banking system for a system based on investment firms and funds which canalize savings.
I think capitalism would work better this way, if the state takes completely over the problem of creating most of the "money-things" denominated in the monopoly currency (instead of 'credit counterfeit') via deficit spending & some sort of public banks; and investment funds take over the job of banking related to corporate sector investment (credit for consumption & household mortgages should be kept to a minimum by these public banks, regulated by law with some simple rules like % of GDP per year adjusted by demographic projections etc. )
Off course legal tender laws should be eliminated and facilitate alternative currencies, but still the state should be able to issue 'tax credits' (tax its own money).
In any case, society always finds ways to leverage itself, its mostly unavoidable, and fractional reserve banking is just an institutional creation to implement this in a wide scale. But if there is no growth it can be problematic, then society will probably adapt to the new condition of no(or low)-growth. There has been lots of civilizations and times where the economy was mostly stable without the fetish of overleveraging and growth on a global basis, so it's not an impossible feat.
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With full reserve banking, banking loses its reason d'etre, you can basically change the banking system for a system based on investment firms and funds which canalize savings.
I think capitalism would work better this way, if the state takes completely over the problem of creating most of the "money-things" denominated in the monopoly currency (instead of 'credit counterfeit') via deficit spending & some sort of public banks; and investment funds take over the job of banking related to corporate sector investment (credit for consumption & household mortgages should be kept to a minimum by these public banks, regulated by law with some simple rules like % of GDP per year adjusted by demographic projections etc. )
Off course legal tender laws should be eliminated and facilitate alternative currencies, but still the state should be able to issue 'tax credits' (tax its own money).
In any case, society always finds ways to leverage itself, its mostly unavoidable, and fractional reserve banking is just an institutional creation to implement this in a wide scale. But if there is no growth it can be problematic, then society will probably adapt to the new condition of no(or low)-growth. There has been lots of civilizations and times where the economy was mostly stable without the fetish of overleveraging and growth on a global basis, so it's not an impossible feat.
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