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Beyond Greed and Scarity

An interview with Bernard Lietaer, by Sarah van Gelder, editor of YES! magazine from the Spring 1997 issue of YES! A Journal of Positive Futures

Few people have worked in and on the money system in as many different capacities as Bernard Lietaer. He spent five years at the Central Bank in Belgium, where his first project was the design and implementation of the single European currency system. He was president of Belgium's Electronic Payment System, and has developed technologies for multinational corporations to use in managing multiple currency environments.

He has helped developing countries improve their hard currency earnings and taught international finance at the University of Louvain, in his native Belgium.

Bernard Lietaer was also the general manager and currency trader for one of the largest and most successful offshore currency funds.

He is currently [as of Sept. 2005] a fellow at the Center for Sustainable Resources at the University of California at Berkeley.

 

BERNARD: Money is like an iron ring we've put through our noses. We've forgotten that we designed it, and it's now leading us around. I think it's time to figure out where we want to go - in my opinion toward sustainability and community - and then design a money system that gets us there.

SARAH: So you would say that the design of money is actually at the root of much else that happens, or doesn't happen, in society?

BERNARD: That's right. While economic textbooks claim that people and corporations are competing for markets and resources, I claim that in reality they are competing for money - using markets and resources to do so. So designing new money systems really amounts to redesigning the target that orients much human effort.

Furthermore, I believe that greed and competition are not a result of immutable human temperament; I have come to the conclusion that greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using.

For example, we can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.

Money is created when banks lend it into existence (see article by Thomas Greco on page 19). When a bank provides you with a $100,000 mortgage, it creates only the principal, which you spend and which then circulates in the economy. The bank expects you to pay back $200,000 over the next 20 years, but it doesn't create the second $100,000 - the interest. Instead, the bank sends you out into the tough world to battle against everybody else to bring back the second $100,000.

SARAH: So some people have to lose in order for others to win? Some have to default on their loan in order for others to get the money needed to pay off that interest?

BERNARD: That's right. All the banks are doing the same thing when they lend money into existence. That is why the decisions made by central banks, like the Federal Reserve in the US, are so important - increased interest costs automatically determine a larger proportion of necessary bankruptcies.

So when the bank verifies your "creditworthiness," it is really checking whether you are capable of competing and winning against other players - able to extract the second $100,000 that was never created. And if you fail in that game, you lose your house or whatever other collateral you had to put up.

Next GO TO: Currency A Brief History

 

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Interviews with People Who have achieved Wealth and Success -  a Visiontowealth.