I
The Overbuilt House of Claims
Extractive Ownership as the Cause of Financial Collapse

The modern economy is built largely on the framework of a single kind of ownership: the publicly held company, with ownership shares trading in stock markets. It is an industrial-age model of ownership. Its purpose is manufacturing financial wealth in endlessly growing quantity. Because financial wealth is a claim against real wealth—a claim on future wages or housing values or company profits—this form of ownership works by extraction. We can call it extractive ownership. One sector where this model has been particularly pernicious is the mortgage and banking industry. A reasonable amount of wealth flowing to the financial industry is normal and healthy. Yet when too much wealth flows up into the financial sphere—the province of the big banks, hedge funds, and hyper-wealthy—this extraction weakens the vitality of the real economy of jobs, families, and communities. The system becomes overloaded with claims and prone to collapse. How this system impacts one family, one home lost to foreclosure, is the focus of the journeys of part 1.