How could otherwise upright citizens be unwittingly contributing to environmental degradation and social disintegration, simply through their legitimate day-to-day use of money? Once aware, what steps might they take to avoid this undesirable state of affairs?
To answer these questions we first need to understand how money is created.
Few people realise that about 98 percent of money in circulation is created by private banks – with the approval of the Reserve Bank – as interest-bearing debt. According to Professor Dr Margrit Kennedy, author of Interest and Inflation-free Money (1995) it is this money creation that drives economic growth, with the consequent, ever increasing demand on natural resources as well as the associated challenges of waste and pollution. The systemic need for ‘growth’ thwarts efforts to create sustainable economies, healthy environments and social justice.
Professor Kennedy says ‘Money is one of humankind’s most creative inventions; poorly understood and managed, it is one of its most dangerous.’ In light of the embedded destructiveness of the global money system most of our money dealings become tainted to some degree.
However, the emergence of community currencies as an interest-free option for local trade provides an appropriate option for those who prefer to support their local economies. Currency systems created by and for local communities support small and medium businesses and greatly enhance ‘buy local’ campaigns. Local currencies are non-exploitive and are designed to curb the ‘leakage’ of community wealth, encourage cooperation and build community.
We can expect an increasing trend toward relocalisation as a response to more costly and diminishing supplies of fossil fuel. Worldwide, local currencies are becoming a vital feature of the development of just money options.
A leading activist on the issue of peak oil, Michael Ruppert, is also well aware of the damage done by our current money system. He says, ‘Unless you change how money works, you change nothing!’
Margrit Kennedy Interest and Inflation-free Money can be read at http://userpage.fu-berlin.de/~roehrigw/kennedy/english/ or purchased from Living Economies. Contact Helen Dew, phone 06 379 8034, email@example.com or visit www.le.org.nz
Helen Dew is a member of St Mary’s parish, Carterton, and has been active in the community currency movement for 15 years.