Someone wrote this to me, what do you guys think about it?
Alexander Hübl if you’re interested in the topic then look into the topic of “gold-backed currency VS fiat money”. In my opinion, that’s where the problem lies, not in capitalism per se.
I’ll try to summarize it very briefly:
In the past, currencies were limited - for example because coins were made directly from gold/silver and you therefore couldn’t just make an unlimited amount of them. Later, at least the currencies were backed by gold (the US dollar as the reserve currency until 1971). The consequence of this was that economic growth only occurred when the economy actually became more efficient - for example when production processes became more efficient or agriculture produced higher yields. That was healthy growth that didn’t cause any problems - and it didn’t hurt anyone either if the economy didn’t grow for a while but stagnated.
Our current monetary system is a so-called fiat money system, which has no real limitations - politicians and central banks can create “money” out of nothing as much as they want - and they do so excessively (see government debt). This leads to inflationary pressure that the economy constantly has to chase after - whoever doesn’t grow automatically shrinks due to inflation. That sucks and is a constant burden for everyone - except for the state of course, which devalues its debts through it.
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*Do these ideas work: no interest, no fiat money, and a wealth tax if countries… join together?*
*Could states that have interest-bearing debt, and people and companies with interest-bearing debt, team up and protest for its cancellation, or do something?*
*To many people it may seem unfair: how long is this spiral supposed to keep going, having to grow at any cost whether it makes sense or not, and even advertising things like buying short-lived plastic junk?*
*When a company takes out an interest-bearing loan, it has to pay back more than it received. It has to increase output so it can pay the money back. A vicious cycle: forced growth.*
*Wouldn’t it work with employee ownership or crowdfunding? You could even advertise for that, and at least it would make sense.*
*Products that actually make sense, like a long-lasting bicycle, don’t even need advertising.*
*Can states join together and do something about a wealth tax?*
*Can we stop the creation of money out of thin air?*
*We can’t grow forever on a finite planet. There is such a thing as good growth that doesn’t require forced growth, for example growth in quality. That’s possible without the pressure to grow.*
*“Would a research project for an economy without interest, without money creation, and with a wealth tax be good, in order to potentially fight against the pressure for growth?”*
You make an interesting argument, but I don’t think that this is the reason for the growth compulsion. That more accurately originates from the mistaken belief that economic growth is an indicator of societal success - the old ‘rising tide raises all boats’ and ‘wealth will trickle down’ arguments, which are both demonstrably untrue. Wealth does not trickle down and inequality in wealthy countries continues to increase at an alarming rate - successive generations of neoliberal politicians have continued to obsess about increasing GDP and facilitating massive upward transfers of wealth to their pals and lobbyists.
On your mention of governments backed by central banks being able to create currency, it sounds as though you feel this is a bad thing, when actually this is pretty important because it:
a) puts paid to the nonsense ‘household analogy’ that’s been relentlessly peddled by politicians and the media since 2008
b) underlines that ‘austerity’ has always been an ideological and political choice rather than an economic necessity
c) nullifies the arguments about ‘capital flight’ and the need to worry about the markets that get trotted out by governments as to why taxation can’t be made fairer or welfare spending needs to be cut.
I think you might find reading about modern monetary theory both interesting and helpful, this might be a good place to start: Money isn’t the problem.
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Yes explain it to me , but does it work ?
*"Here’s why I think these three points also help trigger the compulsion to grow, and they could have even been made up by those who want to enrich themselves:*
*Interest means you get back less than you have to pay back. That’s why you have to keep stimulating the economy so you can pay off the debts.*
*Money creation leads to inflation. The banks and politicians get the money first. The middle class gets less and later.*
*A wealth tax would allow money to flow into the middle class circulation without having to sell something to the rich first.*
*Like you said, they set it up this way so that they profit. They just keep getting richer."*
*Interest means you get back less than you have to pay back. That’s why you have to keep stimulating the economy so you can pay off the debts.*
I’m not sure what you mean by this. A private entity borrowing from a bank have to make repayments, but a government that spends more than it collects in taxes is creating money with no debt attached to it.
*Money creation leads to inflation. The banks and politicians get the money first. The middle class gets less and later.*
Money creation could lead to inflation if it isn’t controlled, however governments can use taxation to remove money from the economy again, so this needn’t really be an issue.
*A wealth tax would allow money to flow into the middle class circulation without having to sell something to the rich first.*
Rather than creating something new and quite impractical, we could just tighten up existing taxation so that it’s more difficult for the wealthy to avoid paying their fair share. The maximum estimated annual revenue from a wealth tax in the UK would be roughly £20bn a year, while the maximum potential revenue from reforming existing taxes could yield over £50bn a year. Though it cannot be overstated, governments with central banks don’t need tax revenues before they can spend, they can simply instruct the central bank to create the money required for say, infrastructure, housing, or a jobs guarantee.
When i look at germany , i guess it makes a big mistake , it takes kredit and it gives money to other countries even it has own problems now
If i would be a leader i would never take and never give Interest charges .