The hoarder ends up sitting alone atop a pile of stale bread, rusty tools, and spoiled fruit. No one wants to help him, for he has helped no one.
Money has become the lone exception to nature’s law of return, the law of life, death, and rebirth, which says that all things ultimately return to their source. It is not like bread, fruit, or indeed any other natural object.
Money does not decay over time, but in its abstraction from physicality, it remains changeless or even grows exponentially, thanks to the power of interest. The hoarder is filled with glee; His trove does not spoil. It even multiplies!
In Middle Ages, Europe, the ‘Brakteate system’, was in wide use. Coins were periodically recalled and then re-minted at a discount rate.
In England, Saxon kings re-coined silver pennies every six years, issuing three for every four taken in, for a depreciation rate of about 4 percent per year.
This effectively imposed a penalty on the hoarding of money, encouraging instead its circulation and investment in productive capital. If you had more money than you could use, you would be happy to lend it, even at zero interest, because your coins would decrease in value if you held them too long.
(Note that the money supply didn’t necessarily shrink as a result of this system, since the lord would presumably inject the difference back into the economy to cover his own expenses.)
Currently the ability to withhold the medium of exchange allows money holders to charge interest; they occupy a privileged position compared to holders of real capital (and even more so to those who sell their time, 100 percent of which disappears each day it goes unsold). The result is an increasing polarization of wealth because everyone essentially pays a tribute to the owners of money.
In an economy based on free-money, wealth means something quite different from what it means today and in fact takes on much the same character that it had in primitive, gift-based societies.
In hunter-gatherer societies, which were generally nomadic, possessions were a literal burden. The “carry cost” that everything except money bears today was quite real. In sedentary agricultural societies as well, possessions such as cattle and stores of grain, while sought after, did not give the same degree of security as being embedded in a rich web of social relationships of giving and receiving. Grain can rot and cattle can die, but if you have been generous with your wealth to the community, you have little to fear.
Free-money reintroduces the economic mind-set of a hunter-gatherer. In today’s system, it is much better to have a thousand dollars than it is for ten people to owe you a hundred dollars. In a negative-interest system, unless you need to spend the money right now, the opposite is true. Since money decays with time, if I have money I’m not using, I am happy to lend it to you, just as if I had more bread than I could eat. If I need some in the future, I can call in my obligations or create new ones with anyone within my network who has more money than he or she immediately needs. Similarly, when a primitive hunter killed a large animal, he or she would give away most of the meat according to kinship status, personal affection, and need. As with decaying money, it was much better to have lots of people “owe you one” than it was to have a big pile of rotting meat, or even of dried jerky that had to be transported or secured. Why would you even want to, when your community is as generous to you as you are to it?
Security came from sharing. The good luck of your neighbour was your own good luck as well. If you came across an unexpected large source of wealth, you threw a huge party. As a member of the Pirahã tribe explained it when questioned about food storage,“I store meat in the belly of my brother.”
Charles Eisenstein — Sacred Economics
(It is worth researching Silvio Gesell and Freiwirtschaft, if the idea of free money seems appealing)
