The monetary system we have is a fundamental cause of our problems, and setting up new systems is crucial in the development of alternative economies. However some popular initiatives are sadly mistaken and can have few if any beneficial effects. The goal must be to set up a system that enables previously idle people and resources to begin producing necessities for the locality. This is easily done.
First, let’s look at the main faults in the present system.
The present monetary system … works for the rich.
Money is puzzling stuff. It should just be little more than something that facilitates economic exchange, the safe keeping of savings, and the keeping of accounts. But in our system it is also a commodity, something that can be “hired” for a fee, i.e., borrowed and paid back with interest. Thus there is now a vast industry managing this lending, recently so big that it was making 40% of US profits. Kennedy (1995) estimated that 40% of what we pay for goods gets siphoned off into interest payments.
What’s wrong with the system? There are four major faults.
1. In a market system things go to those who are able and prepared to pay most for them. That explains most of what is wrong with the world. For instance there is enough food produced to feed everyone in the world but about one third of world grain is fed to animals in rich countries while at least 800 million are hungry all the time. Why? Simply because it is more profitable in the market to sell the grain to feedlot beef produces etc. In a market economy, need is irrelevant and ignored; the rich can take resources and goods because they can afford to pay more for them.
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