reason to prefer money is that it does not suffer loss in storage. The imperishability of money makes it not only a universal means, but a universal end as well. By making money decayimpermanent, we preserve it as means but not as end, and in so doing inspire a conception of wealth radically different than from anything we have known.
gift-based societies. In hunter-gatherer societies, which were generally nomadic, possessions were a literal burden. The “carry cost” that everything except money bears today was quite real. In sedentary agricultural societies as well, possessions such as cattle and stores of grain, while sought after, did not give the same degree of security as being embedded in a rich web of social relationships of giving and receiving. Grain can rot and cattle can die, but if you have been generous with your wealth to the community, you have little to fear.
DecayingFree- money reintroduces the economic mind-set of a hunter-gatherer. In today’s system, it is much better to have a thousand dollars than it is for ten people to owe you a hundred dollars. In a negative-interest system, unless you need to spend the money right now, the opposite is true. Since money decays with time, if I have money I’m not using, I am happy to lend it to you, just as if I had more bread than I could eat. If I need some in the future, I can call in my obligations or create new ones with anyone within my network who has more money than he or she immediately needs. Similarly, when a primitive hunter killed a large animal, he or she would give away most of the meat according to kinship status, personal affection, and need. As with decaying money, it was much better to have lots of people “owe you one” than it was to have a big pile of rotting meat, or even of dried jerky that had to be transported or secured. Why would you even want to, when your community is as generous to you as you are to it? Security came from sharing. The good luck of your neighbor was your own good luck as well. If you came across an unexpected large source of wealth, you threw a huge party. As a member of the Pirahã tribe explained it when questioned about food storage,: “I store meat in the belly of my brother.”157 Or consider the !Kung concept of wealth, explored in this exchange between anthropologist Richard Lee and a !Kung man, !Xoma:
I asked !Xoma, “What makes a man a //kaiha [rich man]—if he has many bags of //kai [beads and other valuables] in his hut?”
“Holding //kai does not make you a //kaiha,” replied !Xoma. “It is when someone makes many goods travel around that we might call him //kaiha.”
What !Xoma seemed to be saying was that it wasn’t the number of your goods that constituted your wealth;, it was the number of your friends. The wealthy person was measured by the frequency of his or her transactions and not by the inventory of goods on hand.158
157Everett (2005), “Cultural Constraints on Grammar and Cognition in Pirahã.”
158Lee, The Dobe !Kung,Richard, p. 101.
Wealth in a negative-interestfree-money system evolves into something akin to the model of the Pacific Northwest or Melanesia, in which a leader “acts as a shunting station for goods flowing reciprocally between his own and other like groups of society.”159 Status was not associated with the accumulation of money or possessions, but rather with a huge responsibility for generosity. Can you imagine a society where the greatest prestige, power, and leadership accordedare accord to those with the greatest inclination and capacity to give?
Such was the situation in archaic societies. Status came through generosity, and generosity created gratitude and obligation. To be a lord or king, you had to hold sumptuous feasts and give lavish gifts to peers and underlings. We have an especially clear example of this in the Nibelungen, the great German saga of the high middle ages which that draws on source material from much earlier. When Kriemhild, widow of the great hero Siegfried, starts lavishly giving away the hoard she inherited from him, the king feels so threatened that he has her murdered and the treasure dumped into the Rhine (where it remains to this day!). The king’s authority was sustained by gifts, and that authority was undermined when someone else started giving greater gifts than he.
The zero-interest loans in a decaying-currencyfree-money economy are analogous to the gifts of yore. While such loans may appear to violate the gift principle that the reciprocal gift not be
specified in advance, they are gifts: gifts not of money but of the use of money. In ancient times, the obligations and expectations generated by gifts were socially determined., tThe same is true here:, the social determination taking takes the form of contracts, agreements, laws, and so forth.
Underlying these specific forms, the dynamic is equivalent: those who have more than they need give it to others. It is just that simple, an expression of the innate generosity of the human being I
described in Chapter One1. All that is needed is a money system that encourages, rather than deters, that generosity. No miraculous change in human nature is necessary. As I describe it in The Ascent of Humanity,
Whereas security in an interest-based system comes from accumulating money, in a demurrage system it comes from having productive channels through which to direct it—that is, to become a nexus of the flow of wealth and not a point for its accumulation. In other words, it puts the focus on relationships, not on “having.” It accords with a different sense of self, affirmed not by enclosing more and more of the world within the confines of me and mine, but by developing and deepening relationships with others. It encourages reciprocation, sharing, and the rapid circulation of wealth.
159Sahlins, Stone Age Economics, p. 209.
Sometimes people ask whether negative-interest currency, like inflation, wouldn’t stimulate even greater consumption. In economics terms, this would only happen only if the demurrage rate were too high, leading to a preference of goods over money as a store of value.160 The two should be equal. But let’s investigate this issue a bit more deeply. When I describe a currency of abundance, people protest, “But we do live in a world of scarcity. Natural resources are finite, and we have used them nearly all up. The problem is that we have treated them as if they were unlimited.” Accordingly, one might think that an attitude and currency of abundanceareis is the last thing we need.
In answer to this concern, consider first whether our currency of scarcity has actually limited our consumption of scarce resources. It has not. The scarcity of money has aggravated their
conversion into money. It is an attitude of scarcity, not of abundance, that has led to the depletion of our natural commons. Competition and the accumulation of more than one needs are the natural response to a perceived scarcity of resources. The obscene overconsumption and waste of our society arise from our poverty: the deficit of being that afflicts the discrete and separate self, the scarcity of money in an interest-based system, the poverty of relationship the that comes from the severance of our ties to community and to nature, the relentless pressure to do anything, anything at all, at all just, anything to make a living. In contrast, the natural response to an atmosphere of
abundance is generosity and sharing. This includes sharing both within the human realm, and beyond it as well. WwW—. hence our frenetic race to convert nature into commodities that don’t even meet real needs, if not from anxietyinsecurity?
Think about it. Is it from an attitude of scarcity or abundance that someone buys 50 fifty pairs of shoes? Is it the secure person or the insecure person who buys a third sports car and a
10,000-square-foot house? Whence this urge to own, to dominate, to control? It comes from a lonely, destitute self in a hostile, ungiving world.
Free-Decaying money embodies the spiritual teachings of abundance, interconnectedness, and impermanence. These teachings, however, present a truth that is in conflict with the world we have created through our beliefs, in particular that set of beliefs that composes the story of money. It is time to get used to a new world, in which we no longer try to get rich by keeping, by hoarding, by
160If the demurrage rate were too high, speculative capital investments could also happen, resulting in overcapacity, inflation, and a boom-bust cycle. The Fed or central bank would need to exercise the same functions it (supposedly) does today, quelling economic overheating by raising interest rates (bringing the demurrage rate closer to zero). There may even be times in the future when it is appropriate for interest rates to climb back into positive territory. Such a time would be a high rate of economic growth. That way the risk-free interest rate would be less than the economic growth rate, obviating the concentration of wealth that interest usually causes. However, I think that such a scenario is unlikely when growth is no longer subsidized by the unsustainable drawdown of natural resources, and when the reclamation of social capital has shrunk the realm of paid services.
having. It is a world in which we are rich by giving. The New Age “prosperity programming” teachers I criticized in Chapter 6 are actually announcing an important truth. We do indeed need to take on an attitude of abundance, and to create a world that embodies it.
My dear reader, think about it: Iis it really who you are to say, “I will lend you money—but only if you give me even more in return”? When we need money to live, is that not a formula for slavery?
Significantly, the forgiveness of debts for which Solon was famous was prompted in part by the indebted servitude of a growing proportion of the population. Today, young people feel enslaved to their college loans, householders to their mortgages, and entire Third World nations to their foreign debt. Interest is slavery. And since the condition of slavery demeans the slaveholder as much as the slave, in our hearts we want none of it.
If you lend money to someone, is it really who you are to hold that obligation over their her head, forever and ever? Interest on a loan amounts to that: it is a pressure to pay it back. It is the threat, “If you don’t pay me back, this is going to grow and grow.” A zero-interest or negative-interest loan bears with it a certain freedom. It lacks that threat of life-long debt slavery.161 I find negative interest to be quite natural.— iIf I loan money to a friend, and she doesn’t pay me back, eventually I want to say, “Forget about it—I don’t want to hold this over your head forever.” I don’t want to hold on to old things, old debts. A negative-interest money system reinforces this salutary tendency, native to all of us, to let go, release the past, and move on.