Money is one of the most ingenious inventions of humanity. Yet at the same time today’s money system causes serious problems:

Redistribution of wealth Whoever has capital receives income from capital that is included as capital costs in all economic transactions. Capital costs are hidden in all prices and are paid for when purchasing products. On average we pay 30% capital costs with every purchase. These interest payments cause a systematic redistribution of wealth in favour of the wealthy.  Read more
Growth The money system demands permanent growth because the investment of capital must pay and loans must be serviced with interest payments. Without the prospect of growth, lenders do not lend, crises and slumps follow and finally social provisions and solidarity fail. Indeed growth encourages the excessive use of resources and endangers the environment and the foundations of our living standards. Read more

Debt Our money system is based on debt because money today is created mostly through the giving of loans. If the accompanying demand for interest repayments cannot be met through additional growth or redistribution of wealth, there is no other alternative than further debt. When prospects for growth are low, banks however are less willing to give credit. If the state intervenes as ‘lender of last resort’, it can cause a debt spiral – at the cost of  public expenditures and of future generations. Read more

Crises Today’s money system is not stable and causes economic, currency and financial crises, amongst other things because the expectations for growth and profit that underly the creation of credit often turn out to be exaggerated and without sufficient basis in the creation of real economic value. This is why speculative bubbles arise that must burst, why the value of wealth is volatile and why currency crises can time and again shatter whole economies. Read more

The money system is created by humans. The system can be reformed and alternatives exist. How? There are many ideas:

Currency diversity and complementary money systems Currency diversity makes the financial and economic system more resilient and gives us choices. Complementary currencies complement the legal tender currency without replacing it. They mostly serve special purposes such as the promotion of regional economies through regional money. As well as researching the various proposals for reform, MONNETA’s strengths include much expert knowledge about complementary currencies. Read more

Money without interest Can interest rates be continually kept below zero or replaced by other instruments and rules? The theory of ‘free money’ has recently been put into practice by banks and investors in the form of ‘negative interest rates’ on demand deposits but also through ‘demurrage’, a ‘hoarding fee’ or tax on cash. The JAK Bank and „Islamic Banking“ consciously avoid income from interest and instead offer interest-free loans. Read more

State money creation Many proponents of reform criticize the powerful privilege of commercial banks to create money through credit. Easy credit is said by them to be the main cause of speculative excesses and finance crises. With a 100% Reserve System, Full Money or “Positive Money” the state should get control back.  “Modern Monetary Theory” allows for the state to have unlimited debt in order not to be subject to the dictates of private creditors. Read more

Further reform proposals Alongside proposals for monetary reform there are many other suggestions for how to reduce or remedy the disadvantages of our economic and finance systems: ethical banks and ethical investments, increased regulation of banks and financial markets, tax on wealth and financial transactions. Other promising solutions include Crowdfunding and Microcredit, Sharing Economy and Gift Economy – and the emergent “Common Good Economy”. Read more

From our blog

The wealth of time –
in memoriam Edgar Cahn

This article was published on our German site in September 2020. Now, in January 2022, we mourn the passing of Edgar Cahn, father of timebanking across the US, distinguished professor of law in Washington D.C. and most-valued and tireless advocate for social justice globally. Since this article calls for the idea of timebanking in times […]

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Latest research on monetary diversity

Special Issue “Monetary Plurality and Crisis” in the Journal of Risk and Financial Management (JRFM)   In addition to our commitment to the implementation of innovative currency ideas and the ongoing educational work on money and monetary reforms, it is above all the academic treatment of these two fields of activity that will ultimately pave […]

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RAMICS 7th: The Future of Money – Democracy, Localism and Inclusion

The 7th Biennial RAMICS International Congress will take place in Italy, 6th – 9th November 2024. At the headquarter of the hosts, the National Research Council of Italy (CNR) and ISSIRFA.

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