Money: A New Beginning (Part 2)
Our present monetary system generates a necessity for
endless growth, embodies linear thinking, defies the cyclical patterns of
nature, and drives the relentless conversion of all forms of wealth into
currency. Furthermore, the concept of interest is the wellspring of our
economy's ever-intensifying competition, systemic scarcity, and concentration
of wealth. Interest is tied into how we see ourselves as separate, competing
subjects seeking to gather more and more of the world within the boundaries of
"mine." Today, however, the human identity is undergoing a profound
metamorphosis. Part of this shift in our conception of self and world will be a
new system of money consonant with the new human being.
Given the determining role of interest, the first
alternative currency system to consider is one that structurally eliminates it.
One such system, called Frei Geld or "free-money" was proposed
in 1906 by Silvio Gesell in The Natural Economic Order . Gesell's
free-money bears a form of negative interest called demurrage. Periodically, a
stamp costing a tiny fraction of the currency's denomination must be affixed to
it, in effect a "user fee" or a "maintenance cost"; another
way to look at it is that the currency "goes bad" depreciates in
value as it ages. (Of course, today this would be done electronically.)
If this sounds like a radical proposal that could never
work, it may surprise you to learn that no less an authority than John Maynard
Keynes praised the theoretical soundness of Gesell's ideas (with one critical
caveat [1]). What's more, the system was actually tried out with great success,
and is again in use today.
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Whereas security in an interest-based system comes from
accumulating money, in a demurrage system it comes from having productive
channels through which to direct it that is, to become a nexus of the flow of
wealth and not a point for its accumulation. In other words, it puts the focus
on relationships, not on "having". The demurrage system accords with
a different sense of self, affirmed not by enclosing more and more of the world
within the confines of me and mine, but by developing and deepening
relationships with others. It encourages reciprocation, sharing, and the rapid
circulation of wealth.
Focus on relationships, not on "having".
"and drives the relentless conversion of all forms of wealth into
currency."
I find the opposite to be true. Our system drives currency into capital investments. Most wealthy people do not have the bulk of their wealth sitting in cash they invest in real estate and businesses. The greater the wealth the less likely it is to be sitting in currency.
I do believe there are times when it is best to move investments into cash. During a drop like we saw in 2008 cash is king.
I'm not saying there is anything wrong with having a pile of cash just be aware that our system of inflation is chewing away at your purchasing power.
Our system drives currency into capital investments.
In order for those investments to then be turned into currency. That then further drives...
... our system of inflation is chewing away at your purchasing power.