“I’ve asked it before, and I’m asking it again: can we ever hope to achieve a truly sustainable civilisation while our economy depends on endlessly recycling money as debt – and on constant growth, to repay the interest?
As this film (embedded) spells out, it’s almost impossible for us to make a significant difference to environmental problems by installing solar panels or growing our own vegetables as long as we leave the debt-based money system unreformed.
While lending at interest was for centuries regarded as an evil, we take it so much for granted today that we actually pity people “unable” to burden themselves with vast debt. Consider much of the reporting of the ongoing decline in the housing market, and yesterday’s government interference in it. Some media coverage seems to suggest that the government’s initiative is designed to help individuals step onto the housing ladder. But are such individuals – anyway few in number – really so horribly deprived by being unable to tie themselves to an asset that, in all likelihood, will lose value?
The truth is that the government is interfering because if people stop borrowing money through mortgages the amount of money in circulation to pay off the vast amount of money we all owe already will shrink, with ghastly effects on the wider economy.
Other reports suggest that banks have become “unwilling” to lend money to buy houses. This, again, is nonsense: mortgages are a no-risk bet for banks. Under the terms of a typical home loan, householders pay interest at whatever rate the bank sets, and if they stop doing so, the bank takes the house.
The reality is that first-time buyers can easily get a mortgage if they want, so long as they put up a deposit (providing the bank with at least a tiny amount in the virtual safe to offset against their vast loan books).
Banks create loans out of thin air, by pressing a few keys on a computer. They do no work, and incur no risk. Borrowers, on the other hand, agree to work for years to repay the interest – effectively rendering themselves slaves to the bank for a certain time. (I’ve done it myself.) For these reasons, lending at interest – or usury – was for centuries reviled by every major religion and by great philosophers such as Plato and Aristotle. It’s still forbidden by Islam and when Rowan Williams, the Archbishop of Canterbury, talked recently about Britain learning from sharia law, there’s evidence to suggest that debt-free money was one of the things he had in mind.
What mystifies me is why the government doesn’t simply create more debt-free money instead of borrowing from banks itself, with the result that taxpayers must meet the interest payments – more than all defence spending put together and not much less than the total amount spent on the NHS.
Gratifyingly, it turns out that a (still rather small) cross-bench group of MPs has put down a motion calling on the government to do exactly that – to issue “green credit for green growth”. Among other things, they recommend “that the Treasury should use its powers to create non-interest bearing money so as to fund activities to combat climate change along the lines developed by the submission of the Forum for Stable Currencies.”
By the way, I’m not going to pretend that the film is short. It’s 47 minutes long. But perhaps that’s how long it needs to be, to explain the many questions that are thrown up by this complex topic. I very strongly recommend that you download it and watch it when you can. I’d be delighted to hear what you think – but please do watch the film first!