The question posed is deceptively simple: Is there a more anti-competitive and anti-progressive industry than banking? The immediate instinct is to defend or attack banking specifically, but the more interesting inquiry lies in understanding why certain industries seem to calcify into extraction machines while others remain dynamic.

Banking is not uniquely corrupt. It is uniquely old. The patterns visible in modern banking—regulatory capture, barrier construction, rent-seeking, and innovation suppression—appear wherever industries mature past a certain point while controlling essential infrastructure. Healthcare, telecommunications, defense contracting, and yes, banking, all exhibit the same symptoms. The disease is not specific to finance. It is structural.

The Pattern of Capture

Every industry begins with competition. New entrants fight for market share. Innovation happens because it must—survival demands it. Prices fall, quality rises, and consumers benefit. This is the phase economists celebrate, the justification for market systems.

But essential industries face a different trajectory. Once a sector becomes critical infrastructure—something people cannot opt out of—the incentives shift. The goal transitions from winning customers to capturing regulators. Why compete when you can legislate?

Banking achieved this centuries ago. The relationship between sovereign states and their financial systems created mutual dependency. Governments need banks to function; banks need government protection to persist. This symbiosis produces regulatory frameworks that nominally protect consumers while actually protecting incumbents. Capital requirements, licensing regimes, and compliance costs do not exist to ensure safety. They exist to ensure that starting a bank is nearly impossible.

Healthcare followed the same path. In the United States, the combination of employer-provided insurance (a World War II accident that became permanent policy), pharmaceutical patent protections, and certificate-of-need laws for hospitals created a system where competition is structurally impossible. You cannot shop for emergency care. You cannot negotiate drug prices as an individual. The “market” is a fiction maintained to justify extraction.

Telecommunications presents perhaps the clearest modern example. Despite technological advances that should have driven costs toward zero, Americans pay more for worse internet service than citizens of countries with regulated public utilities. The reason is simple: three or four companies control the physical infrastructure, and they have arranged through lobbying to prevent municipal broadband, spectrum competition, and meaningful regulation. They learned from banking.

Defense contracting operates on a different mechanism but achieves the same result. Cost-plus contracts, revolving doors between the Pentagon and contractors, and weapons systems designed to be built across multiple congressional districts create a system where the customer (taxpayers) has no power, the buyer (military leadership) has perverse incentives, and the sellers (a handful of consolidated contractors) face no real competition.

Why Banking Feels Worse

If the pattern is universal, why does banking attract particular ire? Several factors compound.

First, banking touches everyone directly and repeatedly. You can avoid thinking about defense contractors. You cannot avoid thinking about your bank when fees appear, loans are denied, or interest rates move. The extraction is visible in monthly statements.

Second, banking’s failures are catastrophic and socialized. When a hospital chain fails, it is a regional tragedy. When major banks fail, governments intervene with public money to prevent systemic collapse. The 2008 financial crisis burned into collective memory the image of banks receiving bailouts while homeowners received foreclosure notices. The asymmetry was not subtle.

Third, banking innovation has been visibly suppressed in ways people can observe. The technology to transfer money instantly has existed for decades. Banks chose not to implement it because float—the delay between transactions—generates profit. When Venmo and Zelle emerged, they did so not from banks but despite them. Cryptocurrency, for all its problems, gained traction partly because it represented the first fundamental challenge to banking’s monopoly on money movement.

Fourth, banking’s marketing creates cognitive dissonance. Banks spend billions positioning themselves as helpful partners in your financial journey while simultaneously designing fee structures, overdraft policies, and interest calculations to maximize extraction from the least sophisticated customers. The gap between stated values and revealed behavior is unusually large.

The Decentralization Question

This brings us to the interesting part of the debate: Can decentralized alternatives break the cycle?

The honest answer is unclear, but the attempt matters.

Cryptocurrency and decentralized finance represent a genuine experiment in building financial infrastructure without central control points. The results so far are mixed. Bitcoin functions as a store of value for those with specific threat models but has not become everyday money. DeFi protocols have recreated many of banking’s services—lending, trading, yield generation—but have also recreated many of banking’s problems: speculation, fraud, complexity that excludes ordinary users.

The pattern of capture applies here too. Early cryptocurrency was ideologically committed to decentralization. As money entered the space, consolidation followed. Mining became industrial. Exchanges became chokepoints. Venture capital funded projects that looked increasingly like the financial institutions they claimed to replace, just with different owners.

This is not an argument against trying. It is an observation about how hard the problem actually is. Decentralization is not a feature you add. It is a property you must continuously defend against the natural tendency of systems to centralize around whoever can extract the most value from the center.

The Deeper Problem

Industries do not become anti-competitive because bad people run them. They become anti-competitive because the incentive structures reward capture over competition once a certain scale is reached. Replace every banking executive tomorrow with committed reformers, and within a decade, the system would look similar. The positions shape the occupants more than the reverse.

This is why regulatory solutions consistently fail. Regulations are written by people who came from the industry, interpreted by people who want to work in the industry, and enforced by agencies that have been systematically defunded. The revolving door is not a bug. It is how mature industries ensure their captured status persists regardless of which party holds power.

The pattern will repeat with artificial intelligence. Already, the largest AI companies argue for regulations that would, coincidentally, prevent new entrants from competing. Safety concerns are real, but they are also convenient. The established players will write the rules, and the rules will protect the established players. This is not conspiracy. It is simply how the game works when the stakes are high enough.

What Breaks the Cycle?

Historically, extraction regimes end through one of three mechanisms: technological disruption that routes around the incumbents entirely, political revolution that restructures power, or collapse when the extraction becomes so severe that the system can no longer function.

The internet disrupted media and retail before incumbents could capture it. By the time traditional industries understood what was happening, the new infrastructure was already built. Banking has so far avoided this fate because money is more regulated than information or goods. Every on-ramp and off-ramp between cryptocurrency and traditional finance is a chokepoint where the old system can reassert control.

Political revolution is theoretically possible but practically difficult. The same industries that capture regulators also fund political campaigns. The cost of meaningful reform—truly breaking up banks, implementing public options in healthcare, treating internet as a utility—exceeds what any political coalition has been willing to pay.

Collapse happens, but slowly, and usually harms the least powerful first. The American healthcare system is collapsing in slow motion, visible in medical bankruptcies and declining life expectancy, but the collapse strengthens rather than weakens the extraction because desperate people cannot negotiate.

An Uncomfortable Conclusion

Banking is not uniquely anti-competitive. It is simply the oldest and most practiced at a game that every essential industry eventually learns to play. The question of whether alternatives can break the loop is really a question about whether any system can be designed to resist the gravitational pull of centralization and capture.

The honest answer is that we do not know. Every previous attempt has either failed outright or succeeded only to become the new extraction regime. The printing press democratized information, then media conglomerates reconsolidated control. The internet democratized publishing, then platforms reconsolidated attention. Perhaps decentralized finance will democratize money, or perhaps it will simply create new centers to be captured.

What remains certain is that the attempt matters. Even failed experiments in decentralization constrain the incumbents, force adaptation, and occasionally create spaces where something genuinely new can emerge. The outcome of any individual attempt is uncertain. The necessity of continuing to attempt is not.

The industry more anti-competitive than banking is whichever industry you cannot imagine alternatives to. The danger is not extraction itself. It is the moment when extraction becomes so normalized that the question stops being asked.