Is money evil?
I am atatching an article I have just written called “Is money evil?”. I am aware that there are probaby 100 articles on the internet with this title, but I hope I bring a new flavour to the debate. Any comments on it are gratefully received
Why are you posting this as a word file? Many people won’t download it because they have a fear of computer viruses.
Its rather long and isn’t on the internet so I can’t post a URL. Do you have a better idea?
Is Money Evil?
I am writing this document to help clarify the debate about Money.
There are some who claim that “money is evil”, “money is the root of all evil” or “money is a social bad”. This is actually an often misquoted Bible reference from the New Testament: “The love of money is the root of all evil” (1 Timothy 6:10, KJV). I hope that this article will dispel both the myth and misrepresentation of the myth by presenting a case for a monetary system which we could and should love; a monetary system based on the exclusion of usury (interest) – a practice which is, in itself, condoned by most of the major religions.
The argument goes that if we look at all the problems in the world we can trace them back to ‘money’. Therefore, ‘money’ is the cause of the problems and if we get rid of ‘money’ we will solve the problems and be better off.
On the face of it, there is a lot going for this train of thought, but there are a few problems with it if we de-construct it a little.
Firstly “money is the root cause of evil”. But what is the root cause of money? People are the root cause of money, so it figures that people are the root cause of evil. And people are the root cause of all good also, because both good and evil are human concepts and both will die with us.
So, get rid of people and we cure all our ills. True, but the keen sense of self-preservation exhibited by our DNA forbids this path, so we are stuck with ourselves for short to medium term (while “in the long run we are all dead”)
Secondly, it is the premise of this article that money is no more than a tool, much like an axe is a tool.
Finally, this article hopes to show that money, as a tool, can be a social good. Money is an economic tool while an axe is a woodland tool, yet both are tools and both can be used for good or ill. With an axe it is easy to see that I can chop fallen logs into fuel to feed my fire to heat my family which is a good use of the axe and one which promotes prosperity for me, my family and eventually the community. Equally I could use my axe to kill my family and neighbours which is a bad use of the axe which hinders my prosperity and theirs.
It may be a little harder to see how money can be used for good and for ill, and this is why this paper exists.
What is Money?
First we need to define money. This part references Chris Martenson of the ‘Crash Course’ to help illustrate the point.
Money has three main properties:
– Money is a store of value
– Money is a medium of exchange
– Money is a unit of value
Overarching these is the fact that money is a claim on human labour.
In the past, many different things were used as money: shells, cows, tobacco; in fact pretty much anything can be used as a ‘medium of exchange’. I will be focusing on this property of money in the main because it is the simplest and most commonly understood.
Is money evil?
Well, does it make sense to think of our ancestors as evil when they used sea shells from the sea shore as a medium of exchange? Or were the sea shells themselves evil? Or was their use as a facilitator of complex bargaining evil? And what is the difference between sea shells and modern money?
I would say that money is not evil, our ancestors were not evil or corrupted, that the sea shells were perfectly benign and their use as a facilitator of complex bargaining patterns showed a natural and sophisticated use of abundant natural resources.
So what is the difference between sea shells and modern money? Well, I’d say it all starts going wrong when ‘she sells sea shells on the sea shore’. And what do I mean by that?
Let take a look:
Sea shells are more or less infinitely abundant. This is a useful property of a monetary system. Earlier we saw that money is a ‘medium of exchange’. We can also say that money is a ‘measure’ of exchange. We see this today in the global economy when we talk of GDP. GDP is a measure of all the transactions in the economy in a financial year, and we measure that in Sterling, dollars, yen, etc. So if money is a measure, why is it the only unit of measure in short supply? Why don’t we ever go bankrupt for inches, litres or kilos?
The answer lies in the old tongue twister; “she sells sea shells on the sea shore”. And if we substitute ‘she’ for ‘national central banks’ and ‘sea shells’ for ‘money’ than we can see that the banking system has positioned itself in-between the people and the infinite resource of economic measuring devices and is using its privileged position to sell us the ‘money’ which was previously free for all.
It is worse than that, however, because the banks sell us money as debt with interest attached, so we have to pay back the money we borrow plus the interest on that money. The banks control the money supply and charge a premium for its use. And money is scarce because the total debt is always bigger than the total money supply, because: total debt = total money supply + interest
This is because all money is created as debt. I refer you here, again to Chris Martenson and his fantastic “Crash Course” on economics, energy and the environment which available to view free online.
A scarcity of money creates competition for it and in competitions there are always winners and losers. In our current competition we can see that the banks are the winners and the rest of us are the losers and it must be that way because of the rules of the game.
The Rules of the Game
Here are the rules of the current game which we can call “Modern Monetary Economics” or the ME economy.
– Monetary system owned by a small elite with the monopoly on money creation.
– Money created as interest bearing debt.
– All money is always eventually making its way back to the banks.
– Scarce money creates competitiveness amongst players and some losers in the game. This leads to anti-social behaviour on the part of the game’s players.
– Interest means the rich get richer and the poor get poorer.
– The constant need for a larger monetary supply (to feed the interest on the debt of the existing money supply) causes inflation.
– Inflation damages the currency’s ability to act as a ‘store of value’ because more money chasing the same amount of goods reduces the purchasing power of the currency.
– Having to pay back the initial loan plus interest means that the economy must always grow to fulfill its debts. Constant growth means acceleration of the rate of environmental degradation and ever faster resource depletion.
So we can see from the rules of the game that many of the ills of our world are a direct result of the terms under which our monetary system operates. Economic disparity, poverty, anti-social business practices, inflation, constant growth, environmental degradation, depleted natural resources; all these are directly caused by the nature of our monetary system.
They are not caused by ‘money’ per se, they are caused by the particulars of our current monetary system. They are caused by the people who are living under this ‘bad’ monetary system. People are a product of their environment. Place people in a selfish, greedy, inequitable economic environment than the chances are that a majority of people will end up behaving in a selfish and greedy manner.
So can we imagine a healthy economic environment which we would be happy passing on to our grandchildren?
Well we might like an economic environment which supports community as well as the individual; one which encourages co-operation amongst its players and one which is sustainable, both economically and environmentally.
Luckily we don’t have to re-invent the wheel ourselves because it has already been done. The basic idea is contained in what is called Local Exchange Trading Schemes or LETS. Although in the modern era, LETS does not need to be constrained to being just ‘local’.
Lets skip straight to the rules of a LETScheme and see how they compare to the ME economy above:
– The members own the money supply.
– Everyone starts with a zero balance.
– Credit is created only when a transaction occurs. This eliminates monetary-led inflation which secures the currency’s longevity as a stable measure of exchange.
– There is NO interest payable on either debits or credits. This eliminates the growing economic disparities of the ME economy. It also reduces the need for constant growth and makes easier the sustainable stewardship of our natural resources.
– Money circulates through the law of reciprocity and all members hold the sovereignty of the currency equally.
– Abundant and free credit means there is always enough money in the system which reduces competition and anti-social behaviour patterns and replaces them with generous, open and co-operative patterns of communitarian behaviour.
So here we have a monetary system which promotes a whole host of social ‘goods’: equity, fairness, abundance, co-operation and sustainability.
We have seen how money in and of itself cannot be considered ‘good’ or ‘evil’ because it is a tool which can be put to good or ill by the people who use it.
We have also seen that the rules of our current monetary system indicate bad design and we have seen how the specific nature of it dumps its negative externalities on the global majority.
We have also seen one example of a monetary system which has been designed with people put above profit and how, with a good understanding of the nature of money, we can design better economic systems which promote socially beneficial outcomes for all concerned and not just a small minority.
The ultimate premise of this article is that we the people must reclaim our right to a free and abundant monetary system and deny the big banks their monopoly on the right to create money. We have it within our power to redesign how we interact with each other and it is up to us to manifest the change we want to see in the world
 John Maynard Keynes, A Tract on Monetary Reform, London: Macmillan, 1924
there we go. thanks idoctor. I was reluctant to post the whole thing cos of its length.
It all seems nice to have all the money you need in the system (never goes short) and no interest to pay when borrowing money.
Problem is that there are a few fundamental flaws in the system that becomes clear after a while, and that is why LETS break down.
Since there is no interest there is never a hurry to pay back. In fact the best desction for the individual would be to never pay back. Borrowing more is also better. Eventually you realize that you can never pay back, so you go broke.
What happens then? Is there a punishment when you go broke and give up? There could be, but perhaps now severe enough.
Will the lender get anything back when you go broke? NO. That means they are the big loosers. This is the main reason to have an interest attached to debt where the interest is based on the risk of not getting your money back. When not having an interest the best couse of action is not to lend out any money.
I do fully agree that the ME enconomy has flaws, but I have to say that the flaws in LETS that I have read about have been so bad that they are bound to fail. Perhaps an ME economy will fail as well, but at least it has a good chance to live a lot longer.
If the “monopoly on money creation” in the ME acts with care it could work forever. Unfortunately this is far from allways the case.
Why is it that many people say “Money is the root of all evil”. Is it because the individual’s who say this have had negative experiences with money. I tend to think so. This statement is just false. If money were the root of all evil, then how do you explain a serial killer? Are you really telling me that they do what they do because of money? No, I refuse to believe that.
The statement, “Money is the root of all evil”, is untrue because it is misquoted. The actual reference in the Bible refers to the love of money being the root of all evil. There’s a BIG difference.
Money is evil.
Please send your money to:
555 Washington St.
Istoleyourmoney, KS. 66062
I will dispose of it for you. NO CHARGE.
Read Francisco D’Aconia’s speech on Money fromn Ayn Rand’s “Atlus Shrugged”… nuff’ said!
Link to entire speech: http://www.capitalismmagazine.com/index.php?news=1826
“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?