6:   Letter printed in Permaculture magazine, Spring 2004:


Patricia Knox

There has recently been an article and letter about money ('Root of All Evil' by Graham Burnett, PM37, and a letter from Kate McEvoy, PM38). Is money the root of all evil, or is it possible to use it to promote the change we wish to see?

The answer is 'both'.

It is possible to use the money we each have at our disposal to buy organic food, patronize local shops, buy environmentally friendly products, use the Phone Co-op instead of a profit-motivated phone company; invest in an ethical bank (e.g. Co-op Bank, Triodos Bank); and invest any surplus money we might have in ethical businesses, etc.

In this way we can promote the move to a more ethical future.

But the money system itself is an evil system. While a LETSystem or a Time Bank system is designed specifically to enable local exchange, and to promote community, the money system has a completely different purpose.

It is designed to enrich the bank's shareholders, at the expense of all the rest of us. (There are 200 shareholders of the Bank of England). Money is created out of nothing, by writing a cheque or pressing a computer key, and lent out to borrowers.

If you take out a mortgage from a bank, the bank creates the money out of thin air. You are then expected to repay both the loan and the interest, with the result that you end up paying the bank about three times the amount they created for the loan. (A token amount of the loan, now less than 1%, is of pre-existing money). If they just created money, and put it in their pockets, we would see through it straight away. But, because it is done in this complicated way, and backed by the legal system, it is largely invisible.

The money for the loans is created, but the money for the interest payments is never created. Bankruptcy is therefore an essential by-product of the system. (The word 'mortgage' means 'grip of death'.) In order to prevent too many bankruptcies and economic collapse, the money system must continually grow. But since the more it grows, the more debt it creates, the vicious spiral continues. Only 3% of money, that which is issued as notes and coins, is not involved in debt creation. Four or five decades ago, this figure was about 20%.

Approximately 95% of the money in circulation is used for international currency speculation. This can cause recessions and unemployment, or even economic collapse (e.g. South East Asia). Of the 5% of money used for real things, most of it is spent on armaments, oil and illegal drugs. Money is unashamedly used to manipulate those who only have a little of it. In 25 years, economic globalisation has caused the economic collapse of 85 countries.

Money is only safe when it is strictly regulated. Since 1980, when neo-liberal, free-market economics was accepted by governments, all regulations on money have been done away with, undermining democracy and providing freedom for the rich to get richer. It is a corrupt system, but it is supported by what Roy Madron and John Jopling call the Global Monetocracy (in their book Gaian Democracies).

The Global Monetocracy is made up of governments, multinational corporations, banks, financial institutions and the media. This forms a complex system to promote economic growth in order to prevent the debt-based money system from collapsing. Using systems theory, Madron and Jopling throw new light on the links between the elements of the system. And they show what effort will be needed at different parts of the system, in order to change to a new system.

Imagine the money system in permaculture terms. Permaculturists and others who want to change the system have control of Zone 1, the money we are able to use ethically. Zone 2 is the organizations attempting to work for change, including OXFAM, World Development Agency, Christian Aid, etc. attempting to alleviate poverty; New Economics Foundation, working on new economic ideas; and Jubilee 2000 Plus, campaigning for Third World debt relief. Zones 3 and 4 are controlled by those who have not realized that the system needs changing. Money leaks into these zones when we pay for insurance, cars, petrol, etc.

In this system, Zone 5 is not a wilderness. It is the zone controlled by the banks. It feels like a wilderness to us, but sucks money out of all the other zones through interest payments, mortgages, etc. When bankruptcy hits those who should have paid interest, Zone 5 seizes resources, such as housing. The money system is a system with a predatory Zone 5.

Although Zones 1 and 2 are growing as more and more people see the failings of the system, and although people like Richard Douthwaite and Bernard Lietaer have designed new money systems, nothing effective has been done to reduce the power of the rogue Zone 5.

Because the Global Monetocracy now includes the government and the media, it is impossible to overthrow the system without political transformation as well as economic transformation. The book by Madron and Jopling is very helpful in showing how complex human systems can be changed. This change is urgently needed, as the present system is destructive, destroying communities and the Earth's resources in its compulsive growth.

Patricia Knox, Holyhead, Wales

The Phone Co-op, S The Mill House, Elmfield Business Centre, Worcester Road, Chipping Norton 0X7 SXL.

Co-op Bank, PO Box 48, 1 Balloon Street, Manchester M60 1GP.

Triodos Bank, Brunei House, 11 The Promenade, Clifton, Bristol.

Gaian Democracies Redefining Globalisation cy People Power by Roy Madron and John Jopling, 8.00.

Ecology of Money by Richard Douthwaite, 5.00.

The Future of Money by Bernard Lietaer, 10.99.

All three books are available from Permaculture Magazine's Earth Repair Catalogue