The Citizens' Ledger

1. Front Matter

   Pages i-xix

   PDF

2. Introduction: Money, Finance, and Production in Contemporary Commercial Republics

   • Robert C. Hockett

   Pages 1-18

3. Money, Capital, and Investment: Fixing Some Critical Terms and Relations

   • Robert C. Hockett

   Pages 19-32

4. Franchise Finance: A Brief Exposition and Exposé

   • Robert C. Hockett

   Pages 33-47

5. Franchise Finance: Why and How We Got Here

   • Robert C. Hockett

   Pages 49-72

6. Franchise Finance: Why We Retain It—And Why We Need Not

   • Robert C. Hockett

   Pages 73-93

7. Digitized Citizen Ledger Finance: What We Now Can and Must Do

   • Robert C. Hockett

   Pages 95-135

8. Digitized Citizen Ledger Finance: Logistics and Technics

   • Robert C. Hockett

   Pages 137-155

9. From Digitized Citizen Ledger Finance to Citizen Fintech: Democratic Digitization and Its Possible Forms

   • Robert C. Hockett

   Pages 157-183

10. Digitized Citizen Ledger Finance: Cavils and Competitors

    • Robert C. Hockett

    Pages 185-193

11. Back Matter

    Pages 195-201

    PDF

This book is the first of its kind in several overlapping and rapidly developing fields that now dominate news headlines – among them the fields of crypto-currency, digital payments platforms, ‘fintech,’ and central bank digital currencies (‘CBDCs’). With crypto and fintech now threatening to transform finance in destabilizing and anti-democratic ways, and with China and other nations now digitizing their national currencies in the form of CBDCs that make the US dollar and national payments infrastructure look ever more quaint and outmoded, this book shows both why the US and other democratic commercial societies must, and how they can, democratically digitize their currencies, their national payments systems, and the authorities that respectively issue and administer them – in the US, the Federal Reserve System (‘the Fed’).

• central bank digital currencies
• digital payments platforms
• fintech
• cryptocurrency
• the US Federal Reserve System
• digitized national payments platform
• peer-to-peer digital savings and payments wallets
• digital greenbacks

“Computer scientists, financiers, and even some economists seem often to overlook the ways money, finance and accounting on the one hand, and money, banking, and central banks on the other hand all interact. One result is that treatments of central bank-issued digital currencies (‘CBDCs’) tend to lose sight of the full range of critical consequences – and opportunities! – that flow from alternative possible digital currency arrangements. After Hockett’s treatise, no such unsystematic or incomplete ‘siloed’ thinking will be possible. In highly accessible prose supplemented by simple intuitive diagrams, Hockett shows how the trillions of commercial and financial transactions that occur in our economies each day can be modeled as single national account books of millions of interlocking personal and institutional balance sheets – full ‘Citizens’ Ledgers’ that digital technology is now able to replicate. The potential this opens is far more interesting – and far more exciting – than most current discussions of CBDC appear to appreciate. As Hockett demonstrates, the future now available to us includes transactional privacy and free banking services for all households and businesses, leak-proof monetary policy for all central banks, and a transformed financial system that is once again geared toward production instead of mere speculation.” (U.S. Congressman Ro Khanna, Professor of Economics and author of Dignity in a Digital Age (2022) and Entrepreneurial Nation (2012))

“With the inclusive vision and bold energy that have become hallmarks of Robert Hockett's work, The Citizens' Ledger:  Digitizing Our Money, Democratizing Our Finance does not disappoint.  In it, Hockett challenges readers to imagine – and then operationalize – a universal public savings and payments infrastructure for people he calls American ‘citizens of the contemporary commercial republic.’  Fans and foes alike of digital financial technologies will revel in the breadth and sheer exhilaration of Hockett's ambitious and sweeping proposal to reimagine the US financial system, and to dare policymakers to reply to the question ‘why not?’” (Sarah Bloom Raskin, Colin W. Brown Distinguished Professor of Law, Duke University Law School; former Deputy Secretary of the Treasury, 2013-17; former Governor, Federal Reserve Board, 2010-13)

“In this exciting book, the uniquely imaginative legal and financial scholar, Robert Hockett, proposes a streamlined way to make our newly electronic ‘Babel’ of cash payment methods far more equitable and efficient. New digital technologies make it possible, he envisions, to reduce the complexity of these payments to a single electronic wallet for every citizen. This new universal savings and payments platform, administered by the Treasury or the Federal Reserve System, would sharply reduce costs, speculative excesses, and opportunities to defraud, while also eliminating the problems of financial exclusion and the unbanked with a single stroke. Hockett comes full circle from an earlier, simpler but less opportunistic age to reduce the current digital cacophony and excess profit exploitation to a productive minimum. It’s the first book of its kind, and likely to be the definitive word on its subjects.” (Jeff Madrick, New York Times economics columnist; Editor, Challenge magazine; author of Invisible Americans, Seven Bad Ideas, The Age of Greed, The End of Affluence, Taking America, and other books)

“For far too long, our financial system and its apologists have conditioned consumers and savers to believe that banking and monetary services are best handled by private sector intermediaries alone. As America’s foremost architect of democratic financial systems, Bob Hockett has given policymakers at every level of government the blueprint to bank the unbanked and streamline our savings, payments, and monetary policy infrastructures without exploiting or extracting value from people or business firms. Instead of blindly ushering predatory fintech products and wasteful cryptocurrency exchanges into their communities, all lawmakers at every level of government in the US and abroad must read this book to learn how to democratize finance and rebuild public capital.” (Ronald Tae Sok Kim, New York State Assemblyman for the 40^th District)

“This book starts from the novel premise that ‘all modern economies amount to massive social balance sheets’ and draws transformative conclusions from that starting point. In so doing it gives the reader a fresh perspective to understand how all modern economies, and the financial systems attached to them, have developed. It expertly outlines how our vast networks of payment and accounting practices and institutions have evolved, but also rightly impresses upon us the urgency of developing savings and payments technologies that will now allow us to streamline, simplify, and benefit from this evolving space. Currently, our existing institutions and protocols are failing to keep up, and more troubling, rent-taking middlemen that have benefited from the old regime are moving quickly to thwart the adoption of a framework that would ensure public efficiencies offered by new technology. This book presents a clear-eyed vision for how financial systems can evolve to reflect more just and equitable access to the public, and not just to private, profit-seeking institutions and entities that seek to keep this realm obscure. It is essential reading for anyone interested in digital currency, financial systems, monetary policy, payments regimes, and the democratization of finance.” (Amara Enyia, Advisory Board, Public Banking Institute; and Board of Directors, Chicago Community Loan Fund)

“Breathtaking. Visionary. The ideas developed in this book unlock new frontiers for civic technical solutions to many persistent challenges.” (Michael Warner, San Francisco, Project Manager, Multiple Central Bank Digital Currency Initiatives)

• Cornell University, Ithaca, USA

  Robert C. Hockett

Robert C. Hockett is Edward Cornell Professor of Law and Professor of Public Policy at Cornell University, USA. He is also Senior Counsel at Westwood Capital, a socially responsible investment bank, and a Visiting Professor of Finance at Georgetown University’s McDonough School of Business. Formerly with the Federal Reserve Bank of New York and the International Monetary Fund, his principal teaching, research, and writing interests lie in the fields of organizational, financial, and monetary law and economics in both their positive and normative, as well as their national and transnational, dimensions. His guiding concern in these fields is with the legal and institutional prerequisites to a just, prosperous, and sustainable economic order.