David Graeber is an Intelligent human being – an activist – active in occupy wallstreet and so on.
His book – debt the first 5000 years – is a scientific very detailed 534 pages book – but what he misses – what is wrong with debt?
let me tell you what is wrong – with the interest on debt monetary system:
repaying debt is not so easy, not only because of the interest-on-interest effect but also – the money to pay the interest – IS NEVER CREATED in the first place – the game is rigged. (see another great book: Bernard Lietaer “rethinking money”)
Here comes the (simplified but still true) example:
imagine a world where there is only one bank and two shoe companies:
- company A shoes
- company B shoes
Bank X is given a loan from the central bank of $100.000 in cash (the central bank is the only bank allowed to issue cash).
The $100.000 Bank X keeps as reserves (10% in reality this would be only 1%).
This allows Bank X to lend out 100% of the $100.000 meaning $1.000.000 or one million in “book money” (money that only exists in the books or in computers).
So Bank X can gives company A and company B a loan of $450.000 to start their business and wants every year a modest rate of 3% interest.
The problem: the 3% interest ($13.500 in the first year) ARE NEVER GENERATED and thus one of the loans HAS to fail.
So after the first year – already $27.000 of interest would need to be paid to Bank X – but because this money was never created in the first place it can not be paid unless…
Company A needs to “extract” money/steal from company B in order to repay their debt or face bankruptcy.
Eventually one of the companies will have to close down – people lose their jobs – and the other company then has a monopoly on shoes – the prices for shoes skyrocket X-D
Because the interest-money is never created, it is not in the game, one of the competitors has to fail so the other competitor can repay the loan.
This is evil.
It is evil because sets people against each other in very very aggressive and evil way and calls it “normal”.
This will create a society of thieves and robbers and this is exactly what we have today.
did you know the “privatization” comes from the the latin word “privare” which literately means to steal? (deprive, rob)
The Goldman Sachs saying: “it is not enough that you win – others have to lose”
is not exactly correctly, more correct would be:
“in order to win – others will have to lose”
because those are the (current rules) of this catastrophic debt based game.
Here is another piece of wisdom: NEVER lend money to family or friends or you will lose both.
instead: if a friend or family member is in need ask them what they need and buy it for them. (help with material not with money directly)
or: give the money as a gift.
never the less Graeber keep up the good work.
Lietaer has unfortunately passed away.