Michael Bell writes:

"What is Money?"

Michae Bell

Someone once said, or there was a song entitled, “Money is the root of all Evil”. So I ask, “ What is Money?”

* Is it a means of exchange, a facilitator?

* Is it a metal object, a piece of paper, a book entry, a hand shake?

* Is it tangible, solid, structural or is it an illusion?

* is it a commodity, like sheep, like iron ore, like bread?

* Does it grow, is it alive, is it conscious? If not, who creates, directs,
controls it? Is it out of control?

* Does it need control? Will it kill us? Who benefits, who looses?

* Is it a health hazard? Is it responsible for depression? Did it create
or extend gambling? Does it cause excessive or lack of medication?

* Does it support the rich or the poor?

* Does impede creative thinking, support for the impoverished?

* Does it cause poverty, dumping, deprivation, global warming?

* Is it responsible for wars, resource depletion, environmental
degradation, design obsolescence, high technical solutions, structural
decay?

* Does it accelerate the depletion of the earth’s resources, oil, minerals,
soil, rain forests, oceans?

* Does it create or impede progress?

* Is it a catalyst for development?

* Who needs it, banks, multinational corporations, stock markets,
supermarkets, governments, nomads, the people?

* Is it necessary for the proliferation of free trade agreements?

* What does it achieve, growth, booms and busts, inflation,recessions?

* Does money in the form of unearned income create inequities?

* Are compound interest rates the problem or is it money itself?

* Should the use of money be changed?

* Should interest be abolished or should it be replaced by a fee on
transactions?

* Should money be abolished or just taken out of the hands of banks,
and financial institutions, including stock exchanges?Further thoughts

Money is an illusion

Genuine people power, required to counteract the inequities of free trade agreements, could begin with acceptance that money is an illusion.

It is an illusion because it depends on community confidence. It can evaporate as it did in 1929 and in Argentina more recently and it can grow exponentially. It can depart from the country in a nano second. Matters such as capital growth, unearned income, mortgages, superannuation, investments and income ultimately depend upon consumption and depletion of capital (the resources of the earth), which is the only capital which is not an illusion. We need something more solid in which to put our trust for the future.

Putting our trust in money is short sighted, but where the investment goes is of major concern. Profitable corporations are major contributors to damage to the environment. They are often the cause directly or indirectly of hunger, lack of health services and infrastructure, and poverty wages in the majority world. There will never be peace in the world while chronic hunger exists and wars are created to sell arms.

We have enough problems with natural disasters, locusts in Africa in November, floods, drought etc. and unstoppable global warming without multinationals, the World Bank, IMF, WTO and our local corporations creating additional human misery. We must in the developed world reappraise our investment decisions in the interests of peace and our long term security.

Usury through the Ages

Money and the use thereof, particularly usury, has concerned thinkers and writers of religious texts of Hinduism, Buddhism, Islam, Judaism, and Christianity from 2000 BC onwards, Ancient western philosophers, Plato and Aristotle condemned usury. Republican Rome (340 BC) outlawed interest altogether.

“A key feature that distinguishes financial economy from nature’s economy is that the one operates on a compound interest basis, whereas the other is based on simple interest.  Money deposited in the bank may yield 10% plus interest on the compounded sum next year, but in nature, if you leave this year’s crop of apples on the tree, you are unlikely to pick a compoundedly heavier crop next year!  Accordingly, usury permits a disjunction between financial and ecological economy.  The result is either the progressive destruction of nature, or in the absence of redistributive social justice, an inbuilt necessity for periodic financial crashes throughout history.”(Visser and McIntosh)

A Zero Interest Rate Solution

Robert L, Hickerson says in his article on Hubbert’s Prescription for Survival, “man is an engine operating under the limitations of the same physical laws as any other engine. The energy that it takes to operate him is several times as much as any amount of work he can possibly perform. If, in addition to his food, he receives also the products of modern industry, this is due to the fact that material and energy resources happen to be available and, as compared with any contribution he can make, constitute a free gift from heaven,......we can abandon the fiction that what one is to receive is in payment for what one has done, and recognise that what we are really doing is utilising the bounty that nature has provided us.”

The Solution.

1. Record the physical cost of extraneous energy degraded in the production of goods and services set at the capacity of the public to consume.

2. Distribute as non negotiable energy certificates (equivalent to the pro rata share of the energy/cost of goods and services).

3. The identifiable certificates are surrended and cancelled upon the purchase of goods and services. They cannot be lost, stolen, gambled, if lost they will be replaced. They can only be spent.

4 Income (certificates) does not depend on the nature of work, which leaves open the possibility of reduced working hours with technological advance.

5. Hubbert says,“ Insecurity of old age is abolished and both saving and insurance becomes unnecessary and impossible”.

In the writers opinion this scenario would require close knit communities with considerable elder input, there being not the same incentive to work as there is in the negative interest model. We have left behind the era of elder reverence and control.

Negative Interest Rates

The individual countries of central and southern America, where opposition to free trade has grass roots support, are probably best suited at this time to change the rules. They should sever all ties with with the World Bank, the IMF, and multinational corporations, by abrogating all debt and introducing separate currencies based on negative interest rates.

Negative interest rates were introduced by one council in Europe during the depression in the 30’s, and was so successful at stimulating employment that the national government enacted legislation to make the currency illegal.

Because the currency is is based on negative compound interest, it depletes in value rapidly at first, quite the opposite to positive compound interest which increases rapidly in the long term. With negative interest rates there is no incentive to save money and money is no longer seen as an end in itself. It is similar to buying a new car which loses most of its value in the first year and then tails off.

The benefits of negative interest rates are:-

1. It encourages self sufficiency, sustainability and zero growth and above all employment, self esteem and care for others.

2. It does not prevent individual countries, who must balance needs with environmental restraints, from carrying out essential programmes because the amount of money in the economy is in their hands and their strength and resource is the skills and energy of the people. The government will create the money, not go to the World Bank or the IMF to create it.

3. It curtails, if not ends, the functions of stock markets.

4. It reduces the gap between rich and poor
.

5. It curtails the activities of corporations in general, including banks.

6, It curtails corruption because the US dollar, the euro etc. is not legal tender in those countries and no corporation will be prepared to bribe government officials or undertake construction projects where negative interest rates operate.

7. It stops interference of any kind from outside influences, trading with other countries becomes limited to those with negative interest rates.

8. It stimulates the rest of the majority world to become the saviours of the planet.

9. There is no incentive to save money. It, in reality, can only be gifted or spent.
In ancient Chinese money and gift had the same meaning.

How it Works.

1. If 100 new pesos (NP) were to be devalued at 1% per month, it will be worth 88.64 NP at the end of the 1st year, 78.57 NP at the 2nd, 69.64NP at the 3rd and still worth 30NP at the end of the 10th year.

2. If the government issues 100NP to each citizen each year and each citizen uses that money to buy and sell goods and services then the average citizen if they each hold a new pesos note would have 188.64NP to commence the second year and 267.20NP to commence the 3rd. Obviously citizens who are not average will have different amounts. Hence citizens who work are able to pay taxes for education health etc. Those unable to work commence the year with 100NP.

3. As negative interest rates stimulates employment, citizens will realise that they are employable, they can work and trade and they will quickly become active and return to a partial barter system in conjunction with using the new pesos.

4. Money returns to being related to goods and services and the resources of the earth. It is no longer an illusion as it is with the existing system of compound positive interest rates. In the existing system it is an illusion because it can evaporate as it did in 1929 and more recently in Argentina and it can leave the country in a nano second. It bears no relationship to any goods, service or resource of the earth.

Michael Bell, Gordonville NSW Australia

Sources: — New internationalist, Arandhati Roy, Margrit Kennedy,

History of Usury Prohibition, by Wayne A. M. Visser and Alistair McIntosh. Centre for Human Ecology. July 1998

Hubbert’s Prescription for Survival, A Steady State Economy.
by Robert L. Hickerson. March 1, 1995