What is the problem?
Money makes our life easier in many ways: it allows us to buy and sell things from people we don’t know, we can save it and we can send it to our loved ones abroad. However, money has two important problems:
- Money has no borders and goes to where there is more profit. This produces “monetary deserts” in less competitive places and speculation where there are secure profits (i.e., inflated stock prices, house prices and even soccer player prices). In search of better opportunities, those with better chances in the labor market leave their native communities. Hence, “monetary deserts” become “population deserts” as well; places where only the elderly and children live with remittances sent by their distant relatives. The local economy is limited to consumption with remittance money and to subsistence production for those who do not receive remittances.
- Money circulates as debt with interests because most money enters the economy as a loan over which an individual has to pay interests. This means that by definition, the value of an economy’s debt is greater than the amount of money in circulation. The only way in which everyone can pay their debt is by increasing the volume of loans constantly, and this is only possible if there is economic growth. While this mechanism of “mandatory growth” has lead to economic growth in the past centuries, the facts mentioned above make it clear that economic activity should adapt to our planet’s capacities and not to the arithmetic logic of a monetary system.
There is enough wealth in the world for everyone to live comfortably. The solution to poverty is not to keep growing but rather to distribute wealth properly. It is time to balance efficiency and stability because natural systems that concentrate only on efficiency tend to disappear. (Look for the Bernard Lietaer example at: http://www.lietaer.com/2010/02/managinthebankingcrisis/).
The idea is not to go against the market, but to prepare for its future development. If we don’t act now, people will not know how to respond to this call to strengthen local markets, and emigration will become irreversible. If we don’t recognize the importance of local economies for the creation of a more just and egalitarian society TODAY, we will be forced to recognize it in the near future by the systematic increase in prices of products and services based on the exploitation of international natural resources (energy, construction materials and food).
“Ideas, knowledge, art, hospitality, travel - these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national.” John Maynard Keynes, Economist
“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” Kenneth Boulding, Economist