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Economics and a cashless society

Is money a root of evil?

student_debtFirst, let's look at money and where it came from.

Within our earliest cultures, people created things for their personal use as well as for use by the tribe or individuals. Early on in this process, the idea of barter arose allowing people to exchange goods and services in exchange for other goods and services.

There is no doubt that some individuals or even groups of individuals came up with the idea of trade for profit and we know this because traders have been traversing the globe for the past 20,000 years seeking fame and fortune.

Most trade was direct, goods or services for goods or services. With the advent of writing trade began to be deferred and promissory notes evolved. There is evidence of this in the clay tablets that have been found from Mesopotamia to India and date from 3000 to over 6000 BC.

These clay tablets were rather bulky and evolved into coins. These were usually silver, copper or bronze, and more rarely gold. Every kingdom had its own currency and it was silver and gold that had a more approximate universal value as traders although producers nearly always had to haggle over the price of goods or services.

With the proliferation of currency, individuals who were usually traders and kings were able to amass fortunes and therefore power and influence over society. Kings and land holders came up with the idea of taxes for allowing and often protecting trade.

Values

But we must realise that money was only ever an idea that we voluntarily agree with, but money itself has no inherent value. If it is a coin, the inherent value is simply the value of the material weight of the metal.

With paper currency, it has absolutely no material value other than what we agree that it represents. Beyond paper currency we have digital currency that doesn't have any substance let alone value other than what is agreed upon.

Today nearly all currency is digital and some governments hold reserves in gold as a back stop. However due to corruption within the international gold exchange, a great of gold has been stolen and it is likely that the same applies to silver and platinum.

So money per se has no inherent value and has no moral or social meaning other than what people put upon it. Yet money has been portrayed as the root of all evil. The root of evil lies in the minds of people who see the acquisition of money, wealth and power as being desirable although they are only temporary illusions.

The things that we can identify with and attach ourselves to in this life are to a large extent completely illusory and the only value or association is in the thoughts and minds of people. The evil that is attributed to money is only a human weakness.

The world in debt

The idea of credit and debt arose a very long time ago. With the rise of the modern banking system, credit became easily accessible and the international banking system developed in size and complexity.

Our society was once more prudent than what it is today. Most individuals and even governments availed themselves of financial loans for different purposes and in the past they made every effort to repay the debt within a specified period olus interest and everyone by and large did their best to remain debt free.

The founding fathers of Islam developed a different idea of financing. In order to foster their own ideology and promote global acquisition, they forbade lending within their own society and culture, but they would lend to other cultures and expect interest on the loan to be repaid along with the principal.

Over the past few hundred years, the interest payable on loans has been variable from next to nothing between close friends and allies to exorbitant amounts exceeding 100% where a lender perceives they were making a risky loan or were lending to someone they did not like.

Our situation todayfreeride

It seems that the entire world; meaning; every country and society is in debt, and one thing we need to remember about debt is that when you are indebted to someone, the creditor has some influence and control over your life because they want to be sure that you will be able to repay the principal or the amount borrowed plus the interest.

Through the 1900s it was common for people to borrow money to buy a home or business. The world Western World economy despite the World Wars was relatively stable, and after borrowing, people and countries settled their debts and enjoyed a degree of autonomy.

With the advent of the American financial system, the perpetrators saw debt has a way of creating unlimited growth and wealth within society and civilisation. To a degree this has worked because we have seen an exponential growth in science and technology, While it stimulated the banking system and made some people rich, it had no rules and ruined the finances of hundreds of millions of individuals as well as most countries who are now all indebted to each other.

The American model helped small groups of individuals to amass great fortunes and if you have been following the international financial trends, you will realise that individuals and governments are encouraged to borrow heavily for new material acquisitions and projects, but instead of repaying those loans, they keep borrowing to pay the interest on those loans without ever repaying the principal.

The consequence in New Zealand has been that we saw the government in the 1970s and 80s borrow massively for large infrastructure projects which came close to bankrupting the nation. However the following governments managed to repay that debt and towards the end of the 1980s and early 1990s we were once more debt free.

Since then to our governments discredit, we were sucked more deeply into the American economic system and since then the national debt has continued to grow exponentially.

A solution to debt is to abolish credit

Almost every individual who has the capacity to borrow money is in debt and every government in the world is in debt. The creditors of course are the International monetary fund and the World Bank. One of the peculiarities of these institutions is that when a country is in debt to them, they assume rights to dictate government policy which disadvantages the citizens of those countries and paves the way for the international corporations to help themselves to the country's resources without any direct benefit to the citizens of those countries other than a small increase in local employment.

To be in debt is to surrender your autonomy. Therefore if we want to regain our autonomy then we need to pay off our debts and avoid borrowing in the future. However, most individuals are so deeply in debt that it will take several individual lifetimes to repay and countries are so deeply in debt that it will take several generations to pay those debts. But the system is set up and controlled so that debt repayment is difficult and even those who are able to pay off all their debts are often socially disadvantaged.

But to simply abolish credit would prevent almost everyone from owning their own home or in many cases, even having a liveable lifestyle.  So abolishing credit would not work unless the bankers were prepared to give their money away for free.

How do the bankers get their money?

Max and Stacey take the piss
out of the bankers

It used to be that the worker who earned money would put their savings in the bank and the bank would then lend that money out to other people for a modest interest payment. But now for example, when you go and borrow money to build or buy a home, or almost any other purpose, the bank simply makes a computer entry saying that you owe them this much money and this much interest. The banks actually do not have that money to lend out, they are simply creating money out of thin air and then they sit back and the bank owners enjoy the money that you give them as the fruit of your labour.

The international banking system is transforming itself as in Switzerland and Sweden the banks no longer pay interest on savings but instead charge interest on savings so it costs money to have your money in the bank. In other words the banks are no longer providing a social service. They no longer need people's money and they do not need to lend money. They are all engaged in a grand international fraud and as we saw in the financial sector crash of 2008, some governments as in Cyprus simply took depositors savings and gave them to the banks whereas the United States government and other governments have in essence given the bank's large bailouts in the form of cash and credit from the public coffers.

I would also point out here that the banking system is totally non-productive, it does not produce anything of value to humanity on any level. Therefore, all debt could be cancelled and the banks either reformed or closed down.

I read a report many years ago stating that in the city of Rome around approximately 60 A.D. the cycle of debt was out of control in a similar way to what it is now. Everyone was in debt to everyone else and there was no practical way of resolving those debts, therefore the Senate decided that all debt would be abolished.

The consequence of this was that everyone started with a clean slate and whatever they possessed they still possessed. If it was land and property, on the day it became theirs debt free. Because money is only an idea, no one lost anything as everyone still owned what they owned and the only difference being that for a while the bankers were not owed anything.

It is heart lifting that the government of Croatia last week declared that it was abolishing the debts for the poorest within their population. Most Croatians were borrowing in Swiss francs which surged in value when the Swiss franc was unpegged from the euro. This made it much harder for Croatians to repay their debts and when we consider that this population marked for debt relief is only about 60,000 families, it is going to have an insignificant effect on the banking and lending sector. But the positive side is that all those people will get to experience a degree of autonomy.

Abolishing all debt would be a first step in reclaiming the world. This move of course would put the IMF and World Bank out of business as well as a great many other banks. And remember that most banks get away with their criminal activities because they are "too big to prosecute" although the US government has taken a crack at Lyman Bros, Goldman Sachs and a few other financial institutions without any great success.

An uncomfortable transition

The abolition of debt would have a transformative effect on the world but not really change the world as it is today, it would be a temporary solution. Everyone would have what they have but if we went a step further and abolished credit, then this is going to put the bankers out of business. Most people would agree that this is a good idea because in reality banks are simply parasites living off civilisations creativity and as they operate today, they literally suck the life blood in the world.

Land reform

This would be the other side of the coin so to speak. By cancelling debt and abolishing credit, everyone needs a way of surviving, a way of producing food and living a meaningful life.

Suburban dwellers would of course have to devote some time to food production in their gardens while apartment dwellers may have to utilise common land or quickly construct growing houses for intensive food production. It is well known that a 100 m² growing house will provide a large amount of food and this is important because the idea is for this transition to be as painless as possible and not to cause any breakdown in civil order.

Everyone who is employed would still be employed except that the workers may join in a collective ownership of the business. It would be quite probable that governments and industrialists would suddenly not have the money to pay staff, therefore there would have to be some form of payment in kind in the way of food and career moves.

It is probable in fact that food itself for a while at least would become a currency of sorts, but it could only be exchanged or given away freely as there would be no credit.

People have always argued that money is the root of all evil and is responsible for the suffering in the world today. But the cause of suffering is not so much the money, rather human weakness. This human weakness is experienced as greed and attachment which causes separation resulting in me and you or us and them and the resultant divisions within society.

As a collective, it would still be you and me working together, but it would be 'all of us' and a reaffirmation of the idea of 'one for all and all for one'. A creditless civilisation may still use money as a means of exchange and no doubt there would still be people who seek to acquire more wealth.

Some of the bankers may still have jobs storing and transferring money on other people's behalf, but they would no longer be in the savings and lending business which as I have pointed out, they are beginning to distance themselves from anyhow, but their Ponzi schemes and racketeering would stop. The bankers may still own their luxury yachts and plush mansions, but they would undoubtedly need people to share and maintain their assets.

A debt and credit free society would be a lot different to what we have now. We would be a lot less dependent on oil and more dependent on renewal like solar and water power. The new buses being unveiled in Britain are a great step in the right direction. The new cars being built by Tesla motors and the new batteries expected in the marketplace about the middle of 2015 will be able to store electricity for use in homes as well as cars sound promising.

We would be less dependent on all oil-based products and petrochemicals. There would be very little use of plastic and a greater use of organic packaging. Plastics can be made more cheaply to a better quality from hemp like the bodies of Henry Ford's first cars. Hemp plastic is compost and no threat environment. Vast tracts of bare land could be reforested, the herds of animals for food could be greatly reduced and intensive organic agriculture improved upon. It seems that the common cold remains a challenge, but HIV and all STDs could easily be eliminated with today's technology.

All the scientists and researchers currently working for humongous paychecks would be working for the public good on a universal wage and nothing much will change for them other than they might live closer to their offices.

There may well be a dip in the human population on planet Earth which would be a good thing, but science and technology along with the quality of life would continue to improve. Health care and education would be free and within a generation, the need for money may well evaporate and we could enjoy a cashless world where everyone donates their time and energy for the betterment and long-term prosperity of all life on planet Earth thereby paving the way for a greater exploration of outer space.

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