: You misanalyze the realized returns through investment. When you go and put your money in a bank you are essentially allowing them to use your money to finance companies and individuals.
SDF: Since banks can basically "manufacture" money through their agreement with the Fed, the idea that it is "my" money that these banks are using, is a convenient legal fiction, but nothing more, not really a description of economic activity.
: The companies and individuals borrow the money and pay interest in relation to the amount and span of time. When (and if) they pay back their loan with interest. The realized gains on the interest are then used to pay you interest on the amount you put into the bank.
: You are being paid for the risk you are taking.
SDF: Which "risk" has been assumed by the government through deposit insurance...
: Since the risk is really not all that great (when was the last time you went to the bank and they didn't have any money for you?) the interest paid is not all that significant. If you were to put a greater amount of money at stake than naturally I am sure you would expect to recieve more compensation for the risk you are taking.
: I honestly do not see why socialists are opposed to the concept of banks loaning money.
SDF: Possibly because of the enormous disparity of wealth between the rich and the rest of us, made possible through the process of capital accumulation. Or was it because they advocate the abolition of money?
I mean, if the banks didn't loan money the only people able to finance a company start-up would be the rich.
SDF: The idea that "nobody would work if rich people weren't paying them to work" falls apart when we analyze "household chores" or "schoolwork," both typical forms of unpaid labor.
: At least with banks you can have some worker who makes "slave wages" borrow money to open up a diner or something. Of course, when that happens you wouldn't have much to bitch about (except maybe regulations) which would take all the fun out of being socialist.
SDF: Maybe we could all open diners, and serve ourselves restaurant meals every day while performing all of the duties (cook, dishwasher, waiter/waitress, plumber etc.) all by ourselves, and then we wouldn't have to pretend that we don't have to HIRE SOMEONE TO WORK FOR US in order to operate a business.
After all, we are "sovereign individuals" and therefore capable of opening diners all by ourselves, without having to hire staffs of grunt workers who don't themselves own diners, right?
Can everyone be a business owner in a capitalist economy? Or does someone have to WORK in order for there to be profit for someone else?