Democratising finance

When people imagine democratising the economy, they don’t usually picture a citizens’ assembly. The sociologist Michael A. McCarthy argues they should. In The Master’s Tools, he points out that most people’s money — their pensions, their savings — is invested by asset managers under a legal fiduciary duty to maximise return, a duty the courts judge against whatever the dominant Wall Street trend is. So vast pools of capital end up just mimicking each other. The people whose money it is have almost no say.

Why sortition, not the usual two options

McCarthy started from a critique of the two models progressives usually reach for, both of which have a fatal flaw:

• Make it public — nationalise the banks, run them through the state. But states are already oligarchic; adding more state doesn’t add democracy.
• Open it up — Occupy-style mass assemblies anyone can join. But these don’t scale, and they suffer self-selection and the “tyranny of structurelessness” (informal leaders dominate precisely because no one can see them doing it).

Sortition — random, stratified selection — solves both at once: it screens out elite over-representation, it scales to any size, and (rotating who serves) it spreads the burden. A randomly-selected beneficiary assembly could deliberate over and set binding mandates for the experts who run a fund, with the experts acting at the assembly’s behest rather than the other way round. Crucially, deliberation lets people discover that “return” means more than money — they’ll knowingly trade a little yield for greener or more social investment, because a safe neighbourhood and a liveable climate are part of the return too.

It’s already happening

• Banco Popular in Costa Rica is governed by a roughly 290-person assembly drawn from the country’s occupational sectors, which sets its lending and credit programmes (documented in Thomas Marois’s Public Banks).
• A Dutch retail-sector pension fund ran a one-off randomly-selected beneficiary panel that chose greener, more social investments — explicitly accepting somewhat lower returns for the benefit.
• The US Public Banking Act (Rashida Tlaib and Alexandria Ocasio-Cortez, 2023) would require public banks over $500M in assets to run an assembly process to help set their mandates.

Democracy on Fridays

To do this at the scale McCarthy ultimately wants — extending the affected interest principle (those affected by a decision should have a say) across the whole economy — he floats “Democracy on Fridays”: a paid, weekly civic day on which everyone is expected to take part in a randomly-selected process, the way we treat jury duty. Belgium has draft “civic duty” legislation in a similar spirit. It sounds utopian until you notice how little time people actually have for public life.

This extends investor assemblies into finance proper, and depends on assemblies being institutionalised rather than left as one-offs.

Sources

• Michael A. McCarthy, The Master’s Tools: How Finance Wrecked Democracy (And a Radical Plan to Rebuild It) (Verso, 2025) — interview with Claudia Chwalisz, DemocracyNext, 2025: youtube.com/watch?v=XCBEuSp_heI
• “Let’s talk about democratising financial institutions” — DemocracyNext: demnext.substack.com