Tuesday, September 11, 2012

Michel Bauwens tries to enlighten us on money.

This is a strange article. It’s by Michel Bauwens (founder of the P2P Foundation).

He claims:

“If you ask for interest in a static pre-modern society and you need to repay more than you have borrowed, then you can only take it from someone else, thereby destroying the social fabric of non-growing societies.”

What – so a country’s legal and educational systems collapse because someone pays interest to someone else? I’m baffled. Anyway, the next sentence reads:

“This is why interest is forbidden in Islam . . . . Indeed, the only way you can pay back more than that you borrow without taking it directly from others, is by endlessly growing the economy.”

I’m baffled (for a second time).

In a “non-growing” economy, as long as interest earners spend the money they get from interest, that money just keeps circulating. I.e. a non-growing economy is perfectly compatible with interest.


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