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A newsletter of simple
ideas #20 -- December 1999 Money Is the Root of All Evil Okay, I know the quote is actually "the love of money is the root of all evil" but I just read an article that gave me a bit of a revelation. Money is the root of many of humankind's problems because of its very nature. For the examples, I'll use the United States currency, although virtually every national currency in the world is the same.
Money used to represent something real. It used to be that you could redeem your money for an amount of actual gold. If you go back far enough in history, you'll find times when the money itself was what was valuable, or that it represented a specific amount of a specific commodity. Now that's no longer the case. As Michael Phillips puts it in The Seven Laws of Money, money is a dream and a nightmare. Mommy, where does money come from?So where does money come from? It's not really the presses at the Mint, since these days about 95% of money is just an electronic record and not actual cold, hard cash. Money really originates at the top of that pyramid scheme called the banking industry. When you hear about "the Fed" changing "the interest rates" we're talking about where money comes from and why we need more of it. Simply put, it works like this. Say there are several of us on an island somewhere and we need a good medium of exchange because we haven't invented money. (And assume there is no television audience or reason to vote each other off the island.) I say, "Hey, everyone. I've got an idea. I'll invent money! Then everyone can make exchanges easily without having to barter and dicker and trade all the time. You just set a price and get money for it which you can use to buy stuff from other people!" You all think that's a great idea because chickens and coconuts and gourds of water don't fit in your wallet. So I set to work and I make some little units--carved beads or something. Since the creation and monitoring of the new currency is my contribution to the tribe, I don't give them to you because then I'd not have received anything for my troubles. So I loan them to you. I loan you each 100 "Coffey beads" and ask that you pay me back at the rate of 10 beads per month for the next eleven months. At the end of that year I will have received 110 beads, with that extra 10 being my payment for making your life easier and carving all those beads. The thing is, I give that same deal to everyone on the island. So now you've got 100 and you need 110 by the end of the year. How will that change your psychology about dealing with the other folks on the island? Where will your extra 10 beads come from? Other people on the island. Before, when someone's hut roof caved if during the monsoon, everyone pitched in to help. Now, you're all going to be thinking that your help would be worth a bead or two. Not me, though, because I created a steady stream of money for myself by making everyone ultimately owing it to me. And, the longer you use it, the more you need to give to me. The ResultsSo the reason most folks don't feel like they have enough money is because there isn't enough money out there to pay all of the debts that are out there. There simply isn't enough money, and making more of it won't help because there's still interest which makes the supply always insufficient. When the Fed changes the interest rate, it just is trying to adjust how insufficient it is. The lower the bank's interest rates for these loans, the lower the insufficiency in money, and the less tight they are with the money they have. How do you fix that? Get out of debt. At the very least, get the system working for you and earn interest rather than paying it. Once you're on the side of the island where the beads are flowing in rather than out, you can think about how to change or unplug from the system. You probably know my solution, don't you? After all, barter is a way of unplugging from the monetary economy. It allows you to exchange service (time) for other services or goods. And it can be nearly as convenient as a cash system without the bothersome insufficiency of money to cover all of the debts out there. Suddenly, work and skill and knowledge and effort become currency in and of themselves. And everyone can produce as much work and skill and knowledge and effort as they want. There is no insufficiency. Is that what they call "self sufficient"? Maybe so. Coming some time in the (hopefully near-ish) future will be my plan for a barter economy. If you're interested in helping out with it, please contact me via the link in the Editor's Notes below. I am most aware of a need for someone good at working with fairly simple online databases, possibly some traditional business sense just to check my ideas against, and maybe some design experience. And definitely enthusiasm for the project. Anyone with enthusiasm please contact me. Thanks!
Quote of the Month "It feels
uncommonly queer to have enough cash to pay one's bills. I'd have sold my soul for it a
few years ago! --Edith Wharton Editor's Notes You can contact me with
your submissions, suggestions, or comments at: Michael J. Coffey |
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