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Defining Money and Productive (new addition on interest- Jan. 2008) Here is an example demonstrating the impossibility of interest that LIFE has used when doing workshops about money: 10 people are on an island and we agree to form bank to exchange the products we produce. The bank loans each us 10 cents, but we have to pay back 11 cents (to pay for the right to borrow money). Where do we get the extra cent from? Obviously, some of us would have to default on our loan and go bankrupt... ...or the bank has to simply 'inflate' the money supply from 100 cents to 110 cents in order to create the 'interest' we own to the bank. In other words, 'bank money,' or 'paper money' or 'fiat money' or 'legal money' represents a mathematical 'origins' impossibility in that we might agree to allow the bank to produce a total money supply of 100% = 100 cents, but on a bank loan of 10 cents that makes paying 10% = 1 cent interest impossible unless the bank creates a money supply of 110% or 110 cents from the beginning. "One cannot lend people $10 and demand repayment of $11 unless the borrowing of money continues to escalate and of course will ultimately end in loss of all assets by the borrowers." Again, the invention of 'money' seemed like a brilliant solution to the problem of 'trading' or 'exchanging' my product for your product, until WE had to do the actual mathematics of determining how much money to produce and how to pay for the banking system. (Related article - "the Magic of the Market") Page 4 ... Traditional Definitions of Productive are Anti-Woman |