Is Banking More Important Than The Oil Industry?

Apparently the banking sector is critical to an economy. If banks were to fail it would cause widespread hardship for the population. But could the same also be said of the oil industry?

Is banking more important than the oil industry?

We are told about too big to fail, about contagion.

Well let us look at the same thing happening in the oil industry. If fuel suddenly became unavailable, if people suddenly had to walk everywhere or ride their bikes everywhere what would have a bigger effect on the population?

What would have a bigger effect? A collapse in the transport industry or a collapse in the oil industry.

Given the fact that automated transport would cease to operate, given the fact the electricity supply would be severely compromised is there any way the two can be compared in their importance?

I put it to you that a collapse in the oil industry would have a much greater effect on the lives of people worldwide than anything in the banking industry.

Given that the oil industry is so important to our daily lives do we see politicians saying that oil companies should merge? That the government needs to regulate the oil industry more? That the government needs to get more prescriptive in it regulation of the oil industry.

Of course not and why? Because the oil industry is far too important for the government to get involved.

Banking on the other hand is simple. People have labour and property and when they want to exchange their property or labour for other people’s labour or property they simply need a medium of exchange that is  limited in supply, just like the supply on land and labour. That is it.

And we know exactly what is finite in the world and what is easily exchangeable and that is commodities. Whether it be gold and silver or whether it be a government currency that is fixed in its quantity.

The only reason we have government urging for more and more centralised control of the banking industry is that it is basically a very simple industry to understand government involvement leads to no noticeable reduction in service at least not in a way that leads to people going without electricity, and, and this is a big “and”, the banking industry is massively profitable.

So to summarise.

The banking industry and specifically the major international banks are nowhere near as important as we are led to believe.

There are many industries which are far more crucial to our daily lives.

The banking industry can withstand immense shocks because fundamentally it is based on people’s labour and people’s property and these things did not fundamentally alter if large banks fail. The system can be replicated easily and quickly should the worst come to the worst.

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