Oeconomia (2020)

Carmen Losmann interviews bankers and economists, develops graphics, and intercuts them with comments from a group of experts critical of capitalism. The starting points are simple questions such as, “How is money actually created?” and, related to that: “How are profits created? And why does debt grow when the economy grows?” Finally: “How does the gap between private wealth and government debt come about?” The film opens with an image of a forest that turns out to be a computer desktop background. A graphics program is opened, and a triangle of circles is drawn; they are labelled economic growth, debt, and concentration of wealth. Carmen Losmann names one motivation for her film: “Since the financial crisis, I’ve been trying to understand the phenomena of our economic system.” The next chart shows how, worldwide, both economic output and debt are said to have multiplied to a similar extent between 1950 and 2018. Meanwhile, inequality in the distribution of wealth is constantly increasing. Losmann asks about the connection between these things, the “rules of the system.” This is followed by the first episode using the film’s second stylistic device: “Losmann has seated a group of experts critical of capitalism around a table in Frankfurt’s pedestrian zone and has them play ‘Monopoly.’ At the same time, they comment on the mechanisms of finance like a Greek chorus.” However, the game is a version devised by Frankfurt’s “Working Group on Economics,” in which players are not given any money at the start but receive it only through construction loans. The money then circulates to other players, who represent contractors. One of the experts interprets this as meaning that money is created only through economic activity. Next, the director recounts the interest her research encounters, but also the reluctance, mistrust, and withdrawal or restriction of filming permits; examples of some initial (re-enacted) phone calls are shown. In the first, she asks about the driving force behind the triad. Her conversation partner refers to the “engine room of capitalism,” where banks have the privilege of creating money that has not yet been earned. Others give evasive answers to the question of how money is created, admit that they do not know, or say that the question is irrelevant to their work. In the scenes that follow, a credit decision by a bank committee is re-enacted, as is a loan meeting between the managing director of Gemeinschaftsbank Basel and a customer. The entries in the bank’s accounting software are shown too: on the debit side, the bank’s loan account is charged with the loan amount, while on the credit side, the customer’s deposit account is increased. The managing director explains that this is how money creation occurs in the form of a balance-sheet expansion—in other words, an increase in the balance-sheet total. The bank did not have to obtain the money for this “in any way” from an existing deposit account. Later in the film, interviews that were successfully arranged are shown, for example with Peter Praet, “the former chief economist of the European Central Bank; Nicolas Peter, BMW’s chief financial officer; Andrew Bosomworth of the investment company Pimco; and Thomas Mayer, the former chief economist of Deutsche Bank.” The film concludes that it is not only central banks that create money “virtually out of thin air,” but commercial banks as well, by increasing their balance sheets through lending. Growth in the money supply is a prerequisite for economic growth, and therefore for the expansion of production and resource consumption. The exploitation of nature sustains the illusion that perpetual growth remains possible. “As a result, we perceive that we are getting richer, but we don’t account for how we are simultaneously getting poorer through the loss of nature,” says physicist Dag Schulze at the round table. In a re-enacted phone call near the end of the film, a woman’s voice says: “At present, we are in a kind of race. Which will collapse first? Our planet’s ecosystem, or capitalism, which has built up levels of tension between wealth and debt never before reached.” At the round table, economic commentator Samirah Kenawi concludes that there is a lack of knowledge and alternatives. We have to think about alternatives.