Anda di halaman 1dari 3

Global Warming - Real Cause

By Robert P Minz IFS (Retd.)

There is global concern for global warming because we are gradually moving towards
a world that would become a place where human beings would not survive and no
other planet in this solar system can support human beings. Many people realize that
there is a need to put a stop to the steady warming of our planet. We know that we
must reduce our green house gas emissions we also know that we must not only
preserve our forests but we must also increase the forest cover. However, despite our
serious concerns no one is really able to do anything about. The developed countries
are not willing to restrict their own development but look to the developing countries
to restrain their development and to preserve the forest cover. The developing
countries on their part do not feel that they should be forced to forego development
activity. In this tug-of-war the only gainer is global warming. But does anyone really
know the real reason why we are not able to tackle global warming? Once we are able
to identify the real cause then we can take appropriate measures to stop global
warming.

It may surprise you that it is the monetary system, which all the countries are
following, is the stumbling block that is preventing us in tackling the problem of
global warming. You might ask how the monetary system can be responsible for
global warming? Most, if not all, countries are having fiat currency i.e. currency that
has no intrinsic value of its own but acquires induced value by virtue of fiat of the
government. This fiat currency takes the form of paper money or coins, printed or
minted respectively, by the government, or book-keeping money created by banks
when they give loans. The banks accept deposits at a lower interest and give loans at a
higher interest but contrary to what the common man thinks the banks do not lend
money only out of deposits lying with them. They lend money that is nine to ten times
more than the actual cash with them. The additional amount lent actually does not
exist but it is created as book-keeping money. Now the borrower is required not only
to pay back this money but also to pay interest on the borrowed money. The borrower,
as well as the bank, must satisfy themselves that the project in which the funds are to
be invested, would give returns that would be sufficient to pay back the loan plus
interest and also give a margin of profit. But what has this to do with global warming?

Now any project that you may devise for preservation of the environment, be it
protection of forest or afforestation, or research, or other activity to prevent global
warming, would be a long term project that can not be expected to give any monetary
returns and it would be rejected by any bank. The banks would, however, readily give
loans for industries that are viable, i.e. capable of giving sufficient returns to pay back
the loan as well as the interest regardless of the fact that the industries may destroy
large tracts of forests or produce pollution on a large scale. So long as the banks go on
a lending spree in this manner the world will be doomed. Thus the monetary system in
which money supply is dependent on loans made by banks that charge interest will
never allow the preservation of our environment, and it is meaningless to talk about
any long term project to preserve our planet.
What if we could change our monetary system so that there is a negative interest?
Money invested in any bank would gradually decrease in value over time so it will
become wiser to invest in assets that will retain a constant, if not increasing, value
over time. In these circumstances it may be wiser to preserve a forest rather than cut it
down because the money realized from sale of the forest would decrease in value over
a length of time while the value of the forest would remain more or less constant.
Thus the money system with a negative interest would tip in favour of preserving
assets rather than in destroying them. In the present monetary system positive interest
causes the flow of money towards the bank and the industrialists, but negative interest
causes the money to flow towards the people and encourages the preservation of
forest and nature. The banks and the vested interests would not take it lying down
and they would oppose any change in the monetary system, as it exists today. They
would say that negative interest would cause industrialization and trade to come to a
stand still. People, who do not know how the money system works, and this includes
many politicians, would nod and agree. However, history tells us another story.
Negative interest, contrary to what the bankers would say, actually increases the
velocity of money i.e. trading and industrial activity increases manifold. This causes
an increase in employment and prosperity of the people.
In ancient Egypt, when people brought their bags of corn to a storehouse, a
piece of pottery called on ostraca was given to them as a receipt. These ostraca were
more convenient to handle than bags of corn, and so they began to circulate as
currency. At the storehouse, depositors were charged a 10 per cent storage fee for the
privilege of having their corn stored and protected from vermin. So, if they deposited
ten bags of corn, six months later they received only nine bags back. The effect of this
was rather like a negative interest rate, and the result was that Egyptians didn’t save
their money but instead spent it on things that would last. They constructed pyramids
and an agricultural system so sophisticated that Egypt became the breadbasket of the
ancient world. This monetary system remained in place for over a thousand years.
The second example of a currency with a circulation incentive from history
occurred in Europe during the period 1150–1300. At this time silver bracteates (thin
plates) were issued by nobles and bishops to circulate as currency. The bracteates
were recalled at regular intervals and later reissued with a lower silver content in a
form of tax collection by the nobles, the rate of reduction of silver averaging around
2–3 per cent a month. As a consequence of this, people preferred to spend the
currency rather than hold on to it. And so we find that during the period when
bracteates circulated, art and culture flourished, craftsmen worked five days a week
and the standard of living of workers was high. As Bernard Lietaer says, ‘Is it a
coincidence that cathedrals flourished as the most grandiose symbols of community
solidarity in Western history, yet declined as soon as the brakteaten system was
replaced with the king’s monopoly on the creation of currency?’
Closer to our times in 1932, in Austria the town of Wörgl was seriously in debt
and unemployment was 12%. The parish was ten times as indebted as the town. The
mayor of Wörgl, Michael Unterguggenberger, convinced his community advisory
board that ‘slow money’ was the cause of the economic paralysis and that they had
nothing to lose by trying emergency scrip. He then convinced local businessmen and
the newspaper to back the idea. Four days later the town started work on their overdue
street repairs, and by the end of the month they had issued their first ‘work
confirmation certificates’, also called local schillings.
Wörgl issued 32,000 local schillings in three denominations, and deposited the
same amount in the bank in national currency. The currency had to be validated every
month with a stamp worth 1 per cent of the nominal value of the note (a ‘misery
payment’ for the local welfare committee). If people wanted to exchange their local
currency for Austrian schillings, they could do so with a 2 per cent penalty, high
enough to act as a discouragement.
All city employees, including the mayor, were paid 50 per cent of their salaries
in scrip and the new emergency workmen were paid 100 per cent in that form. Despite
initial scepticism, the booster effect soon began to work. Taxes, in arrears since 1926,
were repaid. Seven streets were rebuilt and asphalted, 12 roads were improved, the
sewer system was extended, trees were planted and forests were improved. The
construction of a ski jump was started in January 1933, along with a water basin for
the fire department.
In her book Interest and Inflation Free Money, Margrit Kennedy says: ‘Within
one year, the 32,000 Free Schillings circulated 463 times, thus creating goods and
services worth over 14,816,000 Schillings. The national Schilling by contrast
circulated only 21 times.’ Unemployment in Wörgl dropped 25 per cent, when in the
rest of Austria it had risen 10 per cent during the same time period.
Predictably just 15 months after the currency was put into circulation,
Austria’s state bank pressurized the Austrian government to make the Wörgl scrip
illegal and the experiment that had transformed the Wörgl economy was brought to an
abrupt end. Worgl reverted back to unemployment and indebtedness of the people that
prevailed in the rest of Austria and Europe.
So, contrary to what the bankers may say, negative interest works for
enriching the vast majority of the people whereas positive interest only benefits the
banks and a small group of capitalists while it improvishes the people and takes away
their assets.
Should we not, therefore, get rid of the present money system and introduce
the time tested money system that would help the people to get richer and also
preserve our forests and environment and thus make our planet a safer place for all
times? But nothing short of a revolution can bring about a change in the money
system. If you wish to save the environment and prevent global warming there is no
alternative but to change the money system. Act now before it is too late!

Anda mungkin juga menyukai