Public Banking? Isn't that SoCiaLisM?
The American tradition of public banking started before these states were united, and public banking has proven to be the most effective policy a state could have to protect itself from economic landslide when the private banks extend themselves too far.
If protecting citizens is Socialism, than public banking is too.
The better question:
Is Socialism a bad thing?
First off, in order to avoid misunderstanding, it is very important not to conflate Socialism with Marxism.
Marxism was a bad thing.
There are well intentioned people who try to white wash that history, and that makes for an interesting conversation, but to be clear... Bank.Rehab does not advocate for anything "Marxist" or "Communist".
Our use of the word socialism is not related to Marx's use of the word socialism. He defined the word in a way that subordinates other theories to his own. We do not accept that.
Although he criticized other socialists as being "utopian socialists", for Marx, socialism was a path to utopia and nothing more. Although he wished for a "scientific socialism", a phrase borrowed from anarchist and ideological rival - PJ Proudhon. For all the hot air, the Marxism that followed was a psudoscientific socialism - at best - and pure cultism at worse (complete with "esoteric" interpretation).
Marx advocated for terrorism, dictatorship, and monopoly.
Not what we mean by "socialism".
Quite simply, socialism is a theory or policy which takes social welfare as it's primary concern. This includes public policing and fire departments, public libraries and schools, as well as the constitutionally mandated federal government.
Money as a Public Utility
In the 1265, the Chinese Song Dynasty issued the worlds first national currency, backed by gold and silver. This Shortly afterwards, the Yuan Dynasty printed unbacked paper money. The issue of "backing" has only gotten more complicated since.
From shells and the teeth of prey animals, to clay, then metal, paper, and finally abstracted into a database - some form of money is common to all human society (even if only as social credit) - but it has never been as important as it is today.
In 1723, the year Benjamin Franklin landed, Pennsylvania issued it's first paper money. These “bills of credit” were backed with land assets. A rather good idea!
Concerned about inflation, wealthy colonials spread Fear Uncertainty and Doubt (FUD) in order to discontinue the paper money. But, as explained by Ben Franklin in 1729, access to money is a precondition to free trade - and money as a public utility was firmly established as an American Tradition in colonial Pennsylvania.
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it.
(If someone) by Reason of a greater Plenty of Money, can borrow it to trade with at a lower Rate than the Traders of the other, they will infallibly have the Advantage, and get the greatest Part of that Trade into their own Hands; For he that trades with Money he hath borrowed at 8 or 10 per Cent. cannot hold Market with him that borrows his Money at 6 or 4.
While the article is almost 300 years old the basic facts remain the same.
For what can be more disheartning to an industrious labouring Man, than this, that after he hath earned his Bread with the Sweat of his Brows, he must spend as much Time, and have near as much Fatigue in getting it, as he had to earn it. And nothing makes more bad Paymasters than a general Scarcity of Money.
Almost 50 years before Adam Smith is credited with creating the Labor Theory of Value, Ben Franklin writes:
For many Ages, those Parts of the World which are engaged in Commerce, have fixed upon Gold and Silver as the chief and most proper Materials for this Medium; they being in themselves valuable Metals for their Fineness, Beauty, and Scarcity. By these, particularly by Silver, it has been usual to value all Things else: But as Silver it self is of no certain permanent Value, being worth more or less according to its Scarcity or Plenty, therefore it seems requisite to fix upon Something else, more proper to be made a Measure of Values, and this I take to be Labour.
By Labour may the Value of Silver be measured as well as other Things...
Thus the Riches of a Country are to be valued by the Quantity of Labour its Inhabitants are able to purchase, and not by the Quantity of Silver and Gold they possess; which will purchase more or less Labour, and therefore is more or less valuable, as is said before, according to its Scarcity or Plenty.
The argument is against metalism, which was already starting to fail as a global currency system, in favour of paper money backed by land - which was more stable in value (in relation to labour) than gold and silver.
Today is still issued by as a public utility by the Federal Government - and is managed in Public/Private cooperation by the Federal Reserve - but almost without exception states have taken a back seat to let private banks serve local markets.
We do not wish to hurt private bankers, but it is important that we consider our own interests as well as theirs. The fiduciary duties of a public bank are to all citizens, and the profit gained - in fair market competition - belongs to all citizens equally, in trust.
It is fashionable right now to pose political issues in terms which engender discord and groupist fighting. Let's not do that.
Rehabilitating the Banking system isn't something that is designed to favour one class over another. While some very narrow interests may not enjoy public money being held in a public bank - the banking sector generally will benefit along with the rest of society.