Democratizing Finance: The “Citizen Fund”as an Institutional Proposal to Structurally Consider Non-Pecuniary Returns in Investment Decisions

Mads R. Hansen and Natalia I. Molina

Journal of Economic Issues, 2023, vol. 57, issue 2, 668-675

Abstract: An important element to explain the current multi-dimensional crises is the inability of capitalist institutions to consider non-pecuniary returns to investments (NPRI) in investment decisions. Orthodox economics highlights the creative force of the monetary profit motive, which translates into cultural habits and political decisions leading to overinvestment in harmful activities and underinvestment in desirable sectors. The flipside of this excessive trust in the monetary profit motive and markets is the weakening of the democratic institutions and the mistrust from the citizenry. Here, an archetype of a novel instrument for democratic finance is presented, to measure NPRIs, reconciling individual and collective action, harmonizing innovation, investment, and democracy.

Date: 2023
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DOI: 10.1080/00213624.2023.2203636

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