Wednesday, 9 June 2010

The Grand Illusion of A Monetary, or Debt-based Economy

Today we are having national elections here in the Netherlands and the past weeks we have had to endure a barrage of debates and downright propaganda from politicians desiring our vote. Many topics discussed or merely used as a bludgeon to scare people into voting were related to finances, to work and similar items which all have one thing in common: they're the symptoms of a monetary, or as it's more accurately known, a debt-based society.

What does this mean, a debt-based society? In short, we are all familiar with the concept of money, whether it's a physical coin, bank note, cheque or a digital number on some virtual account somewhere. It is the lifeblood of society, something people are willing to let themselves be enslaved into mindless jobs, and even steal and kill for. It is also the biggest lie and delusion mankind has come up with after religion.

What is money? Imagine a society where money isn't used but physical goods and/or services are exchanged to the benefit of all. Then someone lacks the time or resources for a particular exchange, so he gives the other person an IOU (I Owe You), basically a declaration of debt which that person can collect upon at his or her convenience. Nothing of value is created, only debt. This is how a monetary system starts: a collection of IOUs, or debts which slowly coalesce in a global system of shifting debt from one place to another, while constantly adding to it.

This is the one thing I have heard no politician ever mention; how we are all deluding ourselves into believing that we have no choice but to work all our lives to earn money so that we can afford to pay for things. All the resources we need are all around us, we can do the processing ourselves or ask someone else to do it for us because we lack the skills or time.

What does it mean, to earn money? What is it exactly we 'gain'? It isn't value, as we have earlier concluded that money (which is an IOU) is in essence debt. What we are thus doing by 'earning money' is procuring some of the debt fulfillment from one side (the employer, or clients/customers) and literally pumping it to the other side where we do our own debt fulfillment as we 'buy' items or services. The monetary system thus in essence is nothing more than the exchanging of debt, shifting it from one individual to another.

Worse is that this debt can only keep growing, through the process of 'borrowing money', which is the process through which additional debt is procured by an individual from a instance (a 'bank') which has designated itself the maintainer of the monetary economy. Even countries keep borrowing money, as does everyone else. If a country or individual isn't borrowing money for some reason, there are many others who do, thus adding to the collective global debt. What does this concretely mean?

It is never possible for the world economy to be debt-free. Debt can only be moved around so someone is always going to be worse off when someone else is doing better, financially. No country will ever reach the point where the national debt is zero and will remain that indefinitely. Countries like Norway have only managed to stay without a national debt for so long due to lots of natural resources other countries wanted to buy, thus shifting the debt to those countries. Once Norway runs out of oil and other easy resources they too will gain a national debt.

One might think at this point that a debt-based economy is unmaintainable as it keeps inflating like a balloon, and one would be right. Nobody knows what the breaking point is exactly, only that crashes like at the end of the 1920s in the US and recent local or global recessions are child's play in comparison to what will happen once the cache of global debt becomes too much to bear and the entire world simply goes bankrupt.

To maintain such a debt-based economy is delusional and suicidal, benefiting only the rich and powerful who can shift their debt to those less fortunate. It legitimizes slavery, puts most of the world's population at a disadvantage, denies resources to those who need them the most and is in many ways responsible for overpopulation, pollution and many other mishaps of this and previous centuries.

The answer? To switch to a durable, social and almost paradise-like resource-based society:

Of course, I don't see any politician include that in their plans for the next four years.



Hedgehog said...

Switching to a resource based society must come from the people. If there are enough people thinking that way, maybe a politician would start talking about.

However, a social and fair community is an utopia, imho. With a small group with similar minds it will work. Until one person just wants more than the rest.

Maya Posch said...

And that's exactly the problem, isn't it? Most people are too selfish, filled with greed and/or short-sighted to consider that a virtual paradise is within the grasp of humanity as a whole. It has to be the biggest tragedy of our so-called 'civilization' that we'd suffer the most resources going to a very small number of individuals, while everyone else are basically slaves to sustain their way of living.

If this is truly the only way a human society can function, it is pretty sad, as far as I'm concerned.