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Diego,
here's an approach that is compatible without forbidding interest:
from
http://blog.p2pfoundation.net/a-circulation-charge-against-the-meltdown/2009/05/05
[image: newsvine:Social background to the events in Swat
Valley]<http://www.newsvine.com/_tools/seed&save?u=http%3A%2F%2Fblog.p2pfoundation.net%2Fsocial-background-to-the-events-in-swat-valley%2F2009%2F05%2F05&h=Social+background+to+the+events+in+Swat+Valley>
A circulation charge against the
meltdown<http://blog.p2pfoundation.net/a-circulation-charge-against-the-meltdown/2009/05/05>
[image: photo of Michel Bauwens]Michel Bauwens
5th May 2009
Using the concept of demurrage <http://p2pfoundation.net/Demurrage> to
explain monetary reform is practically unexplainable to a mainstream
audience, but a circulation charge makes eminent sense.
A brilliant policy proposal by Jordan Bruce MacLeod, the author of the *book:
New Currency <http://www.newcurrency.org/>: How Money Changes the World as
We Know It. *
The proposal appeared in Kosmos
Journal<http://www.kosmosjournal.org/kjo/articles/articlessub2/beyond-bailouts.shtml>,
the following are excerpts.
*Jordan Bruce MacLeod: *
*“In 1932, the town of Wörgl,
Austria<http://p2pfoundation.net/Worgl_Shillings>,
was suffering from a 35% unemployment rate. The town’s mayor had a long list
of projects and only 40,000 Austrian schillings in the bank to pay for them.
Rather than spend the money on what would amount to only a fraction of the
work that needed to be done, he used the schillings to back the creation of
local currency with a unique feature. The money was designed so that its
holder would pay a small fee each month to keep it valid for circulation.
Once the fee was paid, a stamp was placed on the back of the paper note to
certify it for exchange. *
*After printing these notes, the mayor of Wörgl then used this currency to
begin paying for public projects, thereby introducing it into the town’s
circulation. Yet, it was only after this money was spent that the dramatic
effects began to take hold. In less than two years from the start of the
circulation charge, Wörgl became the first town in Austria to reach full
employment. With the equivalent of a modest number of Austrian shillings in
circulation, money expert Bernard Lietaer reported, “Water distribution was
generalized throughout…. the town was repaved, most houses were repaired and
repainted, taxes were being paid early, and forests around the city were
replanted.” Clearly, when a town begins to experience full employment during
a depression and citizens voluntarily decide to pay their taxes early,
people will talk. Within a short period of time, the town’s revitalization
garnered international attention and was branded the ‘miracle of Wörgl.’ *
*The Science behind the Miracle While a part of this marked turnaround came
from the town’s revenues in collecting fees from the circulation charge,
this was not the most significant force behind the dramatic transformation.
Of greater importance were the extraordinary contributions from Wörgl’s
increasingly engaged citizens. They were enabled to transform their
community and do what was previously thought economically unfeasible after
the average velocity of money throughout the town increased fourteen-fold
because of the monthly expiration date. *
*In other words, with the introduction of a circulation charge, money
changed hands fourteen times more frequently in the same period of time than
did the national currency, the Austrian shilling. An increase in trade and
activity of this magnitude represents a dramatic leap in economic activity
and confidence that simply cannot be replicated by central governments
through spending programs or tax cuts. The achievement truly was a miracle,
yet backed by solid innovation and grounded economic strategy. Rather than
rely on municipal governments or centralized powers, the people of Wörgl had
created the means to take power into their own hands and directly accomplish
things that would never have occurred solely through the meddling of
relatively arbitrary and inefficient centralized bureaucracies. In a time of
financial gridlock such as ours, a circulation charge also presents itself
as an ideal economic tool to begin catalyzing lending and thereby melt
frozen credit markets. *
*In his opus The Natural Economic Order, Silvio Gesell introduced the
concept as an economic tool to effectively solve the problems of hoarding,
interest and inflation. It was his original thinking that served as the
basis for the successful stamp scrip currencies in Germany, Austria and
America during the Great Depression. His work garnered notable recognition
and approval from many of his contemporaries, including some of the most
acclaimed economists of the 20th century, including John Maynard Keynes and
Irving Fisher. *
*A circulation charge effectively goes to the root of these problems by
changing the qualitative nature of how we hold money. It inherently shifts
financial thinking towards longer time frames. It creates a natural
incentive to lend money without the need for interest, which would mitigate
compulsive exponential growth, lessen the costs associated with borrowing
and investment and reduce social disparities. It is precisely by shifting
these central financial dynamics that markets can naturally begin reversing
the inequalities between the rich and poor, facilitate investments in
alternative energy infrastructure and create a more resilient financial
system. *
*The implementation of a circulation charge in the global financial system
will require profound, unprecedented cooperation between nations. Much like
any other global instrument, it will rely on widespread adoption and
integration to take hold and succeed. It is for this reason that the G20, as
a relatively broad and diverse group of nations, is an excellent starting
point for considering this tool. In addition to serving as a catalyst for
restoring lending and confidence in markets, it would simultaneously enable
a pragmatic shift within the financial system towards achieving the 21st
century objectives of sustainable development and the alleviation of
poverty. *
*A circulation charge could be integrated into the financial system through
its simultaneous adoption by several nations for their currencies. The tool
itself, however, is more naturally predisposed to function as an integral
part of a global currency. In fact, it could enable the realization of a
global currency by transcending the present weaknesses in monetary policy
that arise out of current national fiat currencies and policies. These
limitations characteristic of today’s national economies include exponential
growth, interest rates, hoarding and inflation. The diverse economic
conditions of nation-states within the current economic paradigm mean that
national monetary policies are often divergent and frequently
irreconcilable. It is therefore only when a global currency is realized that
the problems inherent to national currencies are likely to be resolved. *
*A fully digital currency would also strongly support the efficient and
stable adoption of a circulation charge within a relatively short time
period. If digitized, the currency could be programmed to automatically
deduct the circulation charge instantly, at the time of its expiry date,
from anywhere in the world. A digital currency would also enable a faster
velocity of money in circulation, greater control and oversight of the money
supply and the real-time monitoring of demand. The currency itself, as we
saw in the case of Wörgl, also carries the power to quickly restore full
employment and effectively decentralize wealth and power into the hands of
citizens. *
*A circulation charge enables the adoption of a monetary policy of zero
interest and the creation of a money supply equal to demand. Under such
conditions, a global currency could transcend the limitations of national
currencies and the arbitrary power and problems that emerge when a national
currency, such as the US Dollar, functions as the international reserve
currency. A digital global currency with the above characteristics could be
far more effectively regulated by global institutions, such as a United
Nations agency designated to oversee international currency stability. *
*While the parameters of this article can merely serve as an introduction to
a very broad and important subject, it brings to light the urgent need to
recognize that our relationship with money is at the very heart of our
global crisis. The consideration and implementation of the requisite
financial tools will require the world’s leading nations to forge a common
vision for a global economy. Integrating global values and instruments such
as a circulation charge into the heart of their monetary policies can help
ensure the constant circulation of money and thereby help restore economic
activity, lending and the opportunity to catalyze a free market system far
more aligned with solving planetary challenges. These are precisely the
qualities that will help enable global cooperation and insulate the
international community from the inherent dangers that are destined to
emerge in the midst of worsening global economic conditions. *
*A circulation charge also reveals the very real potential to align and
reconcile global finance with global values and visionary thinking. Getting
there, however, will require bold new approaches in economics and a broader
understanding that money is a social creation of the utmost power and
importance in our lives. Its understanding and control can no longer be left
in the dark corners of arbitrary or centralized power. The true value of
money in our lives must be consciously recognized and mastered by all
engaged global citizens as a precondition for successfully enabling global
transformation. When we do this much-needed work, we will truly hold in our
hands the power to change the world.”*
On Wed, May 6, 2009 at 9:47 AM, Diego Saravia <diego.saravia gmail.com>wrote:
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To summarize: Interest and usury were the same thing originally, and are
still the same thing etymologically and rightfully, and I for one use
them as synonyms. However, there's been a lot of work put into diverging
the two terms in order to, well, make it acceptable to religious freaks
who think that as long as they bend the meaning of words enough their
god won't kill them. If only we were so lucky.
[It should be noted that I am a militant atheist.]
I am too
excelent post, I do not agree to forbid interest, but I am sympatetic with
your point of view.
--
Diego Saravia
Diego.Saravia gmail.com
NO FUNCIONA->dsa unsa.edu.ar
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