CHAPTER THREE

Who Would Profit from a New Monetary System?


INDIVIDUAL AND SOCIAL CHANGE seems to happen for three basically different reasons:

(1) because a breakdown due to a particular pattern of behaviour has occurred, i.e., in order to avoid another occurrence;

(2) because a breakdown due to a particular pattern of behaviour may occur, i.e., in order to avoid the break-down;

(3) because another pattern of behaviour seems more adequate in order to achieve the desired result. The change in the monetary system proposed in the last chapter may happen for any one, any combination, or all of the above reasons:

(1) In the past, the cancerous accumulation of wealth has been dissolved regularly by social revolutions, wars and economic collapse. The unprecedented economic interdependency of all nations today and the multifold potential for global destruction renders this kind of conflict resolution mechanism unacceptable. We are forced to search for new solutions to avoid another war, social revolution or economic collapse.

(2) According to many specialists in the field of economics and banking the 1987 stock market crash in which $1.5 trillion vanished within a few days was only a small ripple compared to the imminent danger of a worldwide second Great Depression, which is likely to happen if we don't introduce fundamental change within the next few years. (18) Changing the monetary system now offers one possibility for avoiding the enormous human and material costs of such a disaster.

(3) Whether or not we can see that every exponential growth curve eventually leads to its own destruction, the advantages of the change to a new monetary system are so evident in terms of social and environmental equity that this path should be chosen simply because it is a better one than what we have at present.

However, the main problem in any transformation process is not so much that we want to stay where we are or that we don't see the advantages of where we want to be. It is more: How do we get from here to there, from this trapeze to the one over there, without endangering our lives?

In order to make it easier to see how this transformation could assist in reaching the goals of many very different social groups, let us take a closer look first at the flaws in the monetary system and then at the advantages of a new monetary system for the rich and the poor, governments and individuals, minorities and the majority, industrialists and environmentalists, materially oriented people and spiritually oriented people. The interesting fact which emerges is that, at this particular point in time, in this crisis situation which we have created for ourselves, everybody would be better off with a new monetary system. We all are in a win-win situation if we implement the necessary change. But we need to do it soon.

THE ADVANTAGES IN GENERAL

Up to this point of the analysis we have dealt with facts and figures which anyone can verify. From now on we are dealing with "educated guesses," based on experiences in the past. The accuracy of these predictive guesses will have to be validated by real-life examples. The question, therefore, arises: why would any region or country opt for trying out, and serving as a testing ground, for a new monetary system? If our analysis has been correct so far, then the proposed solution offers among other things the following main benefits:

(1) the elimination of inflation;

(2) the increase of social equity;

(3) decreasing unemployment;

(4) the lowering of prices by 30-50%;

(5) an initial economic boom;

(6) and thereafter a stable economy.


FLAWS IN THE MONETARY SYSTEM

In most countries, the monopoly to print money rests in the hands of the central government. Any trial run of the new money system, therefore - even on a smaller regional scale - would have to be supported by the government. Obviously the introduction of an interest-free money would be a highly political issue. It takes courage for any government to admit that a system of such inequity has been tolerated so far. On the other hand, it is clearly very difficult for most people to see why a "fee" on money is a better solution than interest. At present government leaders, politicians, bankers and economists try to respond to the problems which are caused by the basic flaws in the monetary system by treating symptoms and offering band-aid solutions. In election campaigns there are regular promises to combat inflation, to improve social services and to support environmental concerns and conservation issues.

The truth of the matter is that they are fighting with their backs to the wall, and that the situation is not improving but rather deteriorating, as we come closer to the acceleration phase of the exponential growth curve of the monetary system. Instead of improvements in the social and environmental sectors, budget cuts force a deterioration. Whether politicians belong to the conservative or progressive wing, the room for real change in the present system is small indeed.

Figure 8 implies why this happens. In any highly diversified economy one sector is intimately connected with another. If we take away more than its share from one sector, we are bound to cause trouble - not only there - but also in others. If government debts and interest rise, more money flows to the owners of monetary wealth. At the same time, those who work have less money to con- sume. This, in turn, causes market fluctuations with in- fluences on employment opportunities. Governments which increase debts in order to close gaps in their in- come invariably increase the "problem chain." The new money system would help to reduce the disproportion- ate rise in debts as well as the concentration of money- wealth and would secure the steady exchange of goods and services on a free market.

If we think that the situation seems difficult in indus- trialized countries, we must look at Third world coun- tries which carry the worst consequences of the present-day system. While large American and German banks are in- creasing their reserves to be prepared for the fiscal break- downs of their debtors in industrially developing countries, industrialized countries continue to import capital from developing countries. By exporting new loans to help pay off old ones, they prolong and magnify the international debt crisis. That this trend must change has been shown clearly in the report of the UN World Commission on Environment and Development entitled "Our Common Future." It also proves that the seemingly separate crises of the world's economy and the planet's ecology are, in fact, one.

Ecology and economy are becoming ever more interwoven - locally, regionally, nationally, and globally- into a seam- less net of causes and effects ... Debts that they cannot pay force African nations relying on commodity sales to over use their fragile soils, thus turning land to desert ... The production base of other developing world areas suffers similarly both from local failures and from the workings of international economic systems. As a consequence of the 'debt crisis' of Latin America, that region's natural resources are now being used not for development but to meet financial obligations to creditors abroad.

This approach to the debt problem is short-sighted from several standpoints: namely, economic, political, and environmental. It requires relatively poor countries simultaneously to accept growing poverty while exporting growing amounts of scarce resources.

Inequality is the planet's main 'environmental' problem; it is also its main 'development' "problem." (20) By now according to Mr. Herrhaus, manager of the largest German bank (Deutsche Bank): "the structure and dimension of the problem defies traditional problem- solving techniques." (21)

Those who operate the present money system know that it cannot last, but either do not know or do not want to know about a practical alternative. Figure 9 gives at least one explanation. Compared to the Gross National Product and the increase in debt, the banks have earned a disproportionate share of the national wealth. This is in part connected with lower interest rates which offer better profits for banks, but also to the increased speculation with money, leading to an increase in brokerage fees. The bankers with whom I have discussed this issue did not know of the alternative. After I explained it, they often felt that they could not pass the knowledge on without endangering their jobs. Banks are not interested in an open discussion of how the interest system works, unless they take a long- term view. At present, they behave rather to the contrary.

Figure 10 demonstrates some misleading headlines which can be found in advertisements of banks in magazines and newspapers all over the world. Money- banks say- should "grow," "increase," "multiply." Most often, they try to impress people with the idea that money should "work" for them. However, nobody has ever seen money working. Work has always been done by people with or without machines.

These advertisements conceal the fact that every DM or dollar which goes to the investor of money is the accomplishment of another person from whom this amount is being taken away, no matter in which way that might happen. In other words, people who work for their money are getting poorer at the same rate at which the investment of those who own money doubles. That is the whole mystery of how money "works," which banks do not like to have uncovered.

In my experience, those who should be aware of the problem and the solution through their education, i.e., economists are afraid of being branded as "radicals." Indeed, by supporting interest-free money, they would be trying to get at the root (in Latin = radix) of one of the world's most pressing economic problems.

Two of the great personalities of this century, Albert Einstein and John Maynard Keynes clearly saw the importance of Gesell's monetary reform ideas. Keynes actually stated in 1936 that "the future would learn more from the spirit of Gesell than from Marx." (22) This future, however, has not started as yet; although bankers and economists do not need to be terribly farsighted to recognize that a new money system would enable them to resolve the central dilemma which they have been wrestling with for decades. Instead, as economic historian John L. King states in his book On the Brink of the Great Depression II:

Their number-crunching and computerized formulas have proven to be wildly irrelevant and thus their predictions have become famously wrong. It's as though we have educated these people beyond their capacities to think. (23) My observation is, that in contrast to most engineers, economists do not really understand the danger incurred in exponential growth. They may recognize its danger in the proliferation of AIDS or in the "population explosion." In their own field, however, they seem almost blind, and naively confident that symptomatic treatment, here and there, will prove sufficient to slow down the danger.

Governments introducing monetary reform soon would go a long way towards securing social equity, ecological survival and curing the money diseases which have plagued the so-called "free market economies" for decades.

ADVANTAGES FOR THE REGION OR COUNTRY WHICH INTRODUCES THESE CHANGES FIRST

The possibility to invest and produce without having to pay interest would not only lower the prices for these goods and services in the regions or countries which introduce the new money system, but also create an enormous advantage for industries and products competing on the national or world market. Whatever the going interest rate, products and services could be sold that much cheaper. This would result in a fast economic boom in the regions introducing interest-free money first.

A disadvantage could be seen in this change as being a threat to the environment. However, apart from the possibility of creating a better system of taxation (as described above), we might look at the following possibility.

Many products and services which at present cannot compete with the money-making power of money on the money market would suddenly become economically feasible. Among these would be many ecological products, social projects and artistic endeavours which often would be carried out if they could just "break even." This would result in a more diversified and stable economic base, which is anything but threatening to the environment.

Unemployment rates would drop when economic activities blossom, decreasing the need for social security payments, ever larger bureaucracies and higher taxes.

If introduced in a particular region, there would have to be an automatic low cost exchange rate to facilitate trade between this region and other regions in the country. Until the whole country would adopt the new money system, certain regulations might have to be established to prevent speculative exchange deals. If introduced in a whole country, trading with foreign countries would continue as it does today. There would still be an ordinary exchange rate. Comparatively speaking, however, the "stable money" would attract higher exchange rates over the years in comparison with other currencies, because it would not be subject to devaluation through inflation. Therefore, investments in this money could be quite advantageous in comparison with fluctuating currencies such as the dollar at present. As in the case of Wörgl described previously (see Chapter 2) - it would be possible even for two monetary systems to exist side by side. We could keep the one we have at present and introduce the new money, even in a smaller region or town. According to Gresham's Law, "bad" money displaces "good" money. What we are newly creating here is - in his sense - "bad" money - money which is subject to a use fee unlike the present money. Wherever people can pay with the "bad" money, they will pass it on - and they will hold on to the "good" money. Thus the new money will be used wherever possible, which is exactly what we want. The old money will be kept and used to the extent necessary. Therefore, introduced as an experiment in a specific region in the beginning, the proposed money system could also co-exist with our present system until it had proven its usefulness. Who else would benefit from a new monetary system?



THE RICH

One of the critical questions which is always asked by people who begin to understand the effectiveness of the hidden redistribution mechanism in our present money system is: Will those 10% of the population who profit from this mechanism at present allow any change which might eliminate their chances to extract a work-free income from the large majority of people? The historic answer is: Of course not, unless they are forced by those who pay. The new answer is: Of course they will, if they become aware of the fact that "the branch on which they are sitting grows on a sick tree" and that there is a "healthy alternative tree" which is not going to collapse sooner or later. The second means social evolution, the soft path. The first means social revolution, the hard path.

The soft path offers rich people the chance of keeping the money they have gained through interest. The hard path will invariably lead to sizable losses. The soft path means no accusation because of profits from interest, until we introduce the new money system, since their behaviour has been totally within their legal rights. The hard path of social revolution may well be more painful.

The soft path means no more interest earning money but a stable currency, lower prices and, possibly, lower taxes. The hard path means growing insecurity, instability, higher inflation, higher prices, and higher taxes.

So far my experience with people in the "richest 10% category" has been that they are neither fully aware of how the interest system really operates, nor that there are any practical alternatives. With few exceptions, they would tend to opt for security rather than more money, since they mostly have enough for themselves and sometimes for many generations to come.

The second question is: What happens if the rich transfer their money to other countries where they get interest, instead of putting it into their savings account where it retains its value but it does not accumulate interest?

The answer is that within a very short period after the introduction of the reform, they may do just the opposite. Because the margin of profit between what people gain in other countries from interest after they deduct inflation would most likely be about the same as the increase in value of the new money in their own country which is not subject to inflation.

In fact, the danger may be precisely the other way around. What we may create is a "Super-Switzerland" with a stable currency and a booming economy. For several years in Switzerland, investors even had to pay interest in order to leave their money in a bank account. In contrast, the U.S.A. offered the highest interest rates in the early Reagan era and attracted surplus money from all over the world and soon had to devalue the dollar drastically in order to meet its obligations to creditors abroad. At 15 % interest, the U.S.A. would have had to repay about twice the amount invested by foreign lenders after 5 years. There was no way in which this could have been achieved had the dollar been kept at its original value. One further consequence of this policy was that the U.S.A. changed from being the largest creditor to being the largest debtor nation in the world within a time span of only eight years.

The huge amount of speculative money which is estimated to be as high as $50 billion - circulating the world from one banking center to the next in search of profitable investment - shows that there is a shortage of sensible investment opportunities rather than a shortage of money. This would change, in any region or country, which by introducing interest-free money created a booming, and finally stable and diversified economy. Chances are that surplus money from outside would be invested here rather than that surplus money from inside would leave the region.

In many ways, it would be more profitable for rich people to help monetary reform to happen and to support a stable system rather than to support growing instability and risk the inevitable crash. A third question concerning the richest 10% of the population relates to those who live on their capital and are too old to work. What happens to them if interest is abolished?

An example taken from Germany (in terms of average interest and inflation rates) shows that those who can live off their interest now can live off their capital at least for one, if not for two or more, generations. If we assume capital assets of 1,000,000 DMarks, an average interest rate of 7 % and an average rate of inflation of 3 %, the gross income amounts to 40,000 DMarks per year, without depleting the capital.

In the new money system we abolish interest and inflation, thereby reducing the prices of all goods and services as well as taxes by about 40%. This means that this person needs a gross income of 24,000 DMarks per year in order to keep the same standard of living as in the present system. If we divide 1,000,000 by 24,000, we see that this person could live for 40 years off her or his capital.

The point of this example is that almost anybody who can at present live off their own capital will also be able to live off their capital if we change the monetary system.

Among the richest 10% of the population in terms of wealth are those with assets over one million DMarks. But there are some who gain more than one million DMarks from their interest every day. According to official sources, (24) the daily income of the Queen of England, the richest woman in the world, was 700,000 pounds (roughly two million DMarks) in 1982. Although neither the Queen nor firms like Siemens, Daimler-Benz and General Motors have much official power, their ownership of money is, in fact, unofficial power. Scandals concerning the pay-offs by leading industries financing political parties in Germany, the U.S.A. and other western countries have demonstrated that all democracies are endangered where the monetary re-distribution mechanism is allowed to proliferate. As time goes on, those who think that they live in democracies will live at best, in oligarchies or at worst, under fascist regimes. In medieval times, people thought they were badly off when they paid tithes: a tenth of their income or produce to the feudal landlord. In this respect, they were better off than we are nowadays. Today, more than one third of each DM or dollar goes to service capital. Those who gain most are the super rich, multinationals, big insurance companies and banks. The question is whether we are finally willing to comprehend the social injustice that is caused by our present money system and change it or whether we wait until a major world-wide economic or ecological breakdown, war or social revolution occurs. As there is no way in which single individuals or small groups alone can change the monetary system, we must try to bring together those who understand how it can be changed with those who have the power to change it. It should be clear that:

- there can be no accusation of those who, at present, profit from the interest system as this is totally within their legal rights;

- what can be stopped, however, is the continual ongoing extraction out of a without work;

- there should be no given economy of money regulation as to where or how money may be invested in the future by those who have more than they need. If they are intelligent, they will keep it in the country anyway, which would create a new economic boom by abolishing the interest system.



THE POOR

Would the poor also benefit from a new money system? If resources were averaged, every German household in 1986 would have a private fortune of 90,000 DMarks. This would have been a splendid proof of our prosperity if it were evenly distributed. The ugly reality is that one half of the population owned 4% of that wealth and the other half, 96% (Figure 11). More exactly, the wealth of 10% of the population grows continually at the cost of all others.

This explains why, for instance, lower middle-class families in Germany increasingly seek financial support from social welfare agencies. Unemployment and poverty are growing in spite of a sizable welfare system set up to overcome both. The largest factor in the redistribution of wealth is interest which transfers daily millions of DMarks from those who work to those who own capital. Although most governments try to rectify the resulting imbalance through taxation, the result is nowhere near a balance. In addition, the costs of growing bureaucracies are affecting everybody through increased taxes. The human costs in terms of time and energy, plus the humiliation involved in getting through the "red tape," are seldom if ever taken into account.

The absurdity of a monetary system which robs people first of their fair share in the "free market economy" and then - through some of the most inefficient procedures imaginable - returns some of this money in the form of welfare payments to the same people, has rarely been exposed by the "experts" nor been discussed in public. As long as those 80% of the people who pay don't understand how they pay, could it be otherwise?

A practical comparison of rising interest rates and increasing bankruptcies in business and industry, as well as unemployment rates following with a time-lag of about two years (Figure 12) provides another compelling argument for the introduction of an interest-free monetary system. Also, social costs like alcoholism, families breaking up and increases in criminal behaviour are additional costs which are not taken into account in the above statistics but could be effectively reduced by the monetary reform.

If we look at the dilemma of Third World countries (Figure 13), we see our own situation through a magnifying glass. It is like a caricature of what happens in industrially developed countries, due to the same structural fault in the monetary system. However, the difference is that industrially developed countries as a whole, profit while the developing countries pay. Every day we receive $300 million in interest payments from Third World countries: that is, twice the amount of the "development aid" which we give them.

Of the Third World countries' total debt of one trillion dollars in 1986, about one third was lent in order to repay interest on previous loans. There is no hope that these countries will ever be able to pull out of the situation without a major crisis or fundamental policy change. If war means hunger, starvation and death, social and human misery, we are right in the middle of the "Third World War" (Figure 14). It is an undeclared war. It is a war fought with usurious interest rates, manipulated prices and unfair trade conditions. It is a war which forces people into unemployment, sickness and criminal behaviour. Do we have to tolerate this indefinitely? There is no doubt that those who are at present worse off in the monetary system we have created account for more than half of the world's population. The situation in the Third World would change momentarily if their debts were to be written off partially or totally by lender nations and banks. This is often advocated by progressive economists and, in fact, is already happening. However, unless the basic flaw in the money system is abolished, the next crisis is pre-programmed. Therefore, one of the important steps for a more stable economic system on a world-wide scale is to make known among those who would undoubtedly gain most - the poor and the developing countries - that an alternative system could be chosen.



THE CHURCHES AND SPIRITUAL GROUPS

Many of the great political and religious leaders such as Moses, Jesus Christ, Mohammed, Luther, Zwingli and Gandhi have tried to reduce social injustice by prohibiting interest payments. They understood the cause of the problem. However, they did not come up with a practical solution, and thus, the basic flaw in the system remained unchanged. The prohibition of interest payments in the Christian world by the Popes during the Middle Ages in Europe, for instance, just shifted the problem to the Jews, who became, at that time, the leading bankers of Europe. While the Jews were not allowed to take interest from each other, they could do so from the Gentiles. In Islam, people do not pay interest for a loan, but the lending banks or individuals become shareholders in their business and take part of the ensuing profits. In some cases this may be better - in others worse - than paying interest.

Nowadays the Christian churches and charitable organizations exhaust their followers with calls for donations to alleviate the worst social problems in industrially developed and developing countries. This remains symptomatic treatment as long as the systemic fault in our monetary system continues.

What is needed instead is the dissemination of information and an open discussion about the effects of the present monetary system and the solution in terms of monetary reform.

In Latin America, for instance, the Catholic Church is split between the conservative top hierarchy tending towards the western model of capitalism and the progres sive base which is oriented towards the communistic model. The historic opportunity now is to present an interest- free economy as a third type of solution which is to be found neither in communism nor in capitalism but tran- scends both. It would go farther in providing social jus- tice than any aid program. It would create a stable economy and offer the churches significant assistance in their ef- forts to bring peace to this earth. In spiritual terms everything we find in the outside world is a reflection of our own inner selves, our belief systems, our wishes and our thoughts. A transformation of the outer world, therefore, requires a transformation of the inner world. One without the other is not possible. The proliferation of esoteric knowledge and skills in many parts of the world indicates a profound shift in con- sciousness of an increasingly larger number of people. Their work on inner change provides the basis for outer change. Without this work a peaceful transformation of the monetary system may be impossible. Therefore, a great responsibility rests with those who serve humanitarian goals and are aware of the practical possibilities of mon etary reform as one aspect of global transformation.


BUSINESS AND INDUSTRY

In an interest and inflation free economy the prices of goods and services would be regulated, as in today's capitalist societies, by supply and demand. What would change, however, is the distortion of the "free market" by the interest mechanism.


On average, every workplace in the German industry carries a debt load of DM 70-80,000 (> $35-40,000). Interest alone makes up as much as 23 % of the average labor costs (25) (see Figure 15). To the share of interest on borrowed capital must be added the interest share on the firm's own capital. The latter orients itself along the same interest rate as the former. This is why debts increase about two to three times faster than the economic productivity of the country (see Figure 5). The proportion is constantly getting worse for those who work and for those who want to start a business. We are witnessing increasing concentration in the industrial sector. Small businesses and industrial firms are being bought up by larger ones and larger ones are being bought up by even larger ones, until one day almost everybody in the so-called "free market economies" may work for a multi-national corporation. This development receives its impetus from the so-called "economies of scale" and from automation of larger industrial firms, but also from the surplus money gained by these businesses on the money market. Siemens and Daimler-Benz in Germany, for instance, earn more money through investments in the capital market than in the production sector. In fact, they have been characterized in the German press as large banks with a production front.

In contrast, smaller and medium-sized firms in order to expand usually have to borrow money and, therefore, are trapped in the interest and compound interest system. They can not capitalize on the economies of scale, and they cannot capitalize on capital. Up to now our economy depends on capital. The German industrial representative, Mr. Schleyer, once said fittingly: "Capital must be served!" But in the new monetary system capital would be designed to serve the needs of the economy. It would have to offer itself to avoid penalty, i.e., it must serve us!


FARMERS

Because of the devastating effects of interest on our agricultural system, farming provides a particularly good case for a new money system. Agriculture is an industry based on ecology. In general, ecological processes follow a natural growth curve (Curve A in Figure 1) Industrial processes must follow the exponential growth curve of interest and compound interest, at present (Curve C in Figure 1). Since nature cannot be made to increase like capital, the industrialization of agriculture has created threatening problems for our survival. In the first phase of industrialization, farmers bought bigger and better machinery. Then bigger farmers bought up smaller farms to become even larger, with the help of government subsidies and tax incentives. Then the signs of sickness began to appear and multiply: the depletion and pollution of water supplies; fertile soils becoming like dried-out and compacted deserts; the loss of more than 50% of all species; the overproduction of special items which could only be sold with more government subsidies; hybrid produce which is tasteless and poisonous; total reliance on oil for transportation, artificial fertilizers, insecticides, pesticides; vanishing rain-forest to supply packaging materials for long hauls between the places of production, storage, processing, selling and consuming.

While interest is only one factor contributing to this development, introduction of an interest-free money system would be of particular importance for this societal sector which secures our survival. Interest-free loans, combined with land and tax reforms (see Chapter 2 ), might allow a larger number of people than presently expected to return to the land. Together with new methods of sustainable agriculture, we may witness the evolution of a different lifestyle, combining work and leisure, hand and "brain" work, high and low technology, to serve a more holistic approach to individual, agricultural and social de velopment.


ECOLOGISTS AND ARTISTS

When we talk about economic growth, measured in the percentage increase of the GNP and compared to previous years, we usually forget that this increase is related to a larger amount every year. Thus, 2.5 % growth today is, in fact, four times as much as 2.5% growth during the 1950s (Figure 16).

Why politicians, industrialists and union leaders still call for measures to boost economic growth is easily explained: During phases of decreasing growth rates, the discrepancy between income from capital and labor or the redistribution of wealth from labor to capital becomes more severe. This means increasing social and ecological problems and economic and political tensions.

Continual economic growth, however, results in the depletion of natural resources. That means, in the present monetary system, we have a choice between ecological or economic collapse. In addition, the concentration of money in the hands of fewer people and large multi-national cor- porations creates a constant pressure for large scale investments, e.g., atomic power plants, huge dams for hy- droelectric power, and arms. From a purely economic angle, the U.S.A. and Europe are displaying politically contradictory behavior. Installing bigger and better weap- ons against Russia on the one hand, and sending butter, wheat and technological know-how to Russia on the other, made perfect economic sense: Military production is the only area where the "saturation" point can be postponed indefinitely as long as "the enemy" is equally able to de- velop faster and better weapons. Profits in the military sector are far greater than any profits made in the civil- ian sectors of our economy.

As long as every investment has to compete with the money-making power of money on the money market, most ecological investments, aimed at creating sustain- able systems (i.e., stopping quantitative growth at an optimal level), will be difficult to implement on a larger scale. Today, people who have to borrow money for eco- logical investments usually lose - economically. If inter- est could be abolished they might at least break even, although the difference from other investments (e.g., in the arms business) would still remain the same.

Let us take an investment in solar collectors as an ex- ample. If we can expect only a 2 % return on our money, it would be economically unwise to invest in this other- wise sensible, ecological technology for producing hot water, since our money in a bank might pay a 7 % return. A change in the monetary system would provide people with a chance at least to break even if they invest in the maintenance and improvement of the biological basis of life. This would create a very different impetus for individuals and groups to engage themselves in conservation measures and ecologically sound technologies.

Even the volume of economic activities would be more easily adjusted to real needs. Since high capital returns in order to pay off interest would not be needed any more, the pressure on overproduction and overconsumption would be considerably reduced. Prices could be reduced by 30 to 50% which pays for highly capital intensive technology. In theory, people would need to work only half of the time in order to keep the same standard of living.

Within the new monetary system, quantitative growth would most likely be changed into qualitative growth. People would have a choice of leaving their new money in a savings account where it would keep its value, or investing it in glass, china, furniture, art work or a solidly built house, which would keep their respective values. They might well opt for those investments which would enrich their daily lives. However, the higher the quality demanded, the more it would be produced. Thus we could expect a total revolution of values, which would almost certainly effect cultural and environmental issues. Many investments in art and ecological technologies would be able to compete given a "stable" money and sustainable way of life, and pay without making large profits. Thus art and ecology would soon become "economically feasible."


Women

Why do so few women operate in the money sphere? Whether on the stock market or within the banking world, this is still a man's realm and exceptions only seem to prove the rule. I have ascertained from a fairly long-standing experience with women's issues and women's projects that most women intuitively feel that there is something wrong with this money system, although, like men, they do not clearly know what is wrong.

Women's fierce fight for equality, which is also largely an economic issue, has made them resentful about pro- cesses that produce inequity, like the money game. Most women understand experientially that whatever somebody gains without work, i.e., through interest and compound interest, somebody else has to work for it. The latter (in many cases) will be female. Of that half of the popula- tion which owns only 4% of the total wealth (Figure 11), the majority are women.

Women overwhelmingly carry the load of the economic chaos and social misery caused by the present money sys- tem everywhere in the world. The introduction of a new money system which serves as a "technically improved barter system" may well change their lot dramatically. For this reason, I expect a high percentage of women to be among the main movers for a more equitable exchange medium. They understand what it means to be exploited. Following the conversion, they may well get involved in banking and investing to a much larger extent. This would happen because they would understand that it would be a life-enhancing rather than destructive system in which they would operate. Last but not least, this money system fits their concept of power much better.

Men are used to the hierarchical model of power with an almighty top and a powerless base. Whoever gets a chunk of the cake leaves less for the others. It's a win/lose situation.

Women more often experience power as an infinitely expandable concept. Whenever someone adds power to a group, the whole group becomes more powerful. It's a win-win situation.

A monetary system which expands with growing needs but stops when these needs have been met almost automatically creates a win-win situation for everybody in the long run. Even in the short run, in a crisis situation, which is what we are in right now. What women will want most for themselves and their children is that, instead of another of the hard revolutionary transitions which have caused such an endless amount of human misery in the past, the change - if it could happen before the crash - would provide a soft evolutionary transition.