Finance as a form of economic planning

Recent years have seen a resurgent debate on economic planning in the age of digitalization and climate crisis and an extremely dynamic research community has formed around the theme of planning. Although the notion that “planning is already endemic in capitalism” has originally sparked the debate, the literature has mostly focused on theory and models of postcapitalist economic planning, not on how planning in capitalism actually works. Considering the financial system as one of the ways capitalism “plans,” this paper will expand on a rather dispersed series of observations by different commentators that “finance is a form of planning,” that central banks share similarities with “central planners” and that horizontal ownership across markets turns index funds into universal owners with the capacity to steer economic development. I will first argue that financialization has strongly influenced how contemporary economic planning works. Against this background, the text will then elaborate on how finance’s capacity for economic coordination makes it a potential tool for transformation towards increasing social and democratic control over the economy. In doing so, this paper connects the new debate on economic planning to the academic literature on financialization and the democratization of finance.