For many, American democracy seems increasingly empty. What drained it? In The Master’s Tools: How Finance Wrecked Democracy (And a Radical Plan to Rebuild It), sociologist Michael A. McCarthy, professor at UC Santa Cruz and economic activist, points to finance capital as the main culprit.
Big Finance, of course, is a particular form of Big Money—not the kind that builds factories or creates products, but the kind that profits off speculation, debt, and transactions through banks, hedge funds, and financial institutions. It shifts focus from long-term investment and innovation to short-term profits through financial speculation, and, as economist William Lazonick has long argued, makes companies prioritize shareholder value, often sacrificing workers, product quality, and sustainable growth—while financial elites profit from producing…nothing.
The Big Finance boom, fueled by 1970s to 80s deregulation and pro-wealthy policies, allowed giants like JP Morgan, Goldman Sachs, and Blackstone to amass vast wealth and sway governments. Today, they shape policy, influence elections, and prioritize profits—while, as seen in 2008, triggering crises that hit regular people hardest. (Research by Thomas Ferguson, Research Director at the Institute for New Economic Thinking, and colleagues shows with stark precision the dominance of the superrich at the ballot box, and specifically how Democrats in Congress were influenced by political money to weaken regulation of the finance industry).
Is all this inevitable? Must we accept that Big Finance pulls the strings? McCarthy says no. He believes citizens can reclaim control by creating financial institutions that are inclusive, using the system’s tools to improve lives rather than deplete them. He envisions a finance system that funds what truly matters: green energy, social housing, and public goods for the people. His warning is stark: either we control finance, or finance controls us. Reclaiming power won’t be easy, but it’s doable, says McCarthy, and he has a plan. The first step? Recognize that with elected officials prioritizing finance over the public, we need a different form of democracy—and the ancient Greeks show us how.
In ancient Athens, “sortition” randomly selected citizens for roles like jurors and council members, forming diverse groups to deliberate on policy. McCarthy advocates a modern version: minipublics—ordinary people chosen by lottery—to address key issues, ensuring decisions reflect the voices of everyday citizens, not just elites. Today, citizen assemblies are already in use worldwide. In the U.S., states like Oregon, Minnesota, Arizona, and New Mexico have used them to debate issues like marijuana legalization. Meanwhile, countries like Ireland and France have turned to sortition for major decisions, with regular citizens recommending policies on topics like abortion, gay marriage, and climate change.
But can sortition really work in finance? Many, like crypto enthusiasts, have fantasized about democratizing the system. But McCarthy argues that true democratization isn’t about more people participating in financial markets—it’s about giving them power over how credit and investments are allocated. It means making financial flows accountable to a deliberative public. The key, he insists, is engaging the public through effective democracy—and minipublics, in his view, are the best way to manage financial decision-making at every scale. McCarthy spoke to the Institute for New Economic Thinking about the crises facing our political and economic systems, how to make them work for the people, and how sortition can be the key to achieving that.