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War
and the Money
Economy
Why
politicians (still) don't really want
peace
by
Wolfgang Fischer
-
translation from German
to English by Sian Edwards (Translations
for Progress)
-
"New
forms of slavery are now appearing before our very eyes as a
result of deregulation and globalisation of the economy.
The worst abuses of human rights are now the consequences of
the world economy.
Limitless world trade is the new idol that rules us!"
(Dorothee
Sölle)
(
pdf
) (spanish
version)
Only
the realisation and success of social justice will prevent
future wars. Social justice can however only be realised if
the political will actually exists. Necessary for this is a
broad political majority that is mature enough in human
terms to recognise that one's own happiness should never be
built on others' hardship. Social justice and peace can only
be achieved if the few stop "skimming off the cream" at the
expense of the vast majority. But we are a long way from
this. Reality looks totally different: waging war is
becoming respectable again, even in a country in which we
were saying after the last catastrophe: never again
war!
Our
search for the causes of the return to open acknowledgement
of (armed) violence should not stop at the current arguments
of the US administration and its followers, the "axis of
deceit" (1).
The fog surrounding the causes of the dangers that threaten
us both socially and ecologically must be cleared in order
to bring to light real starting points for averting them.
I
will therefore look at an element of our economic system,
our money system, on which is bestowed a property that in
nature only belongs to life itself, that is, the ability to
multiply. We question the seemingly magical growth of money
through interest and compound interest just as little as we
react to the worldwide destruction of life, nature and
atmosphere! Spellbound by frightening daily news reports of
terror, war and stock market rates, we lose sight of the
causes of and connections between events.
It
is incomprehensible to me how even former members of the
peace movement such as Erhard Eppler (2)
- to say nothing of the "Greens" - can in the meantime be on
the same side as those who, after important ecological
issues have repeatedly been pushed aside to make way for
industrial demands, now also want to see pacifism and
militarism united. They speak of the necessity of imposing
order on chaotic situations by means of a police-like
military. They assert that the causes of the war situations
breaking out all over the world are ethnic or religious
differences. Some historians even talk of the "clash of
civilisations" (3),
apparently driven by ideological fundamentalism. At the same
time, the fact remains unashamedly unspoken that the USA
alone has been responsible for innumerable conflicts in
recent centuries, from Iran to Vietnam to Chile and
Nicaragua and on to Iraq (just to name a few examples) and
for that reason is hated around the world, as the American
Bishop Bowman has stated (4).
The financial, economic and power-political causes of wars
are practically never addressed, they are deliberately kept
hidden by interested parties. Whether in Africa, in the Near
or Far East, America or elsewhere, everywhere ideological,
ethnic or religious discord is not subjected to arbitration
attempts by the UN but spurred on by secret services, armed
and transformed into full-blown wars. Wars guarantee along
with economic and material destruction "naturally"
profitable investment opportunities and at the same time
satisfy geostrategic power interests. Human lives count just
as little as the destruction of nature in the process. The
term "collateral damage" points to a shift in the value of
life down to the level of objects and numbers. As if guided
by a magical hand, the spectre of terrorism, created by
secret services and fed with drug money, together with its
most recent child, so-called privatised or denationalised
war, is used fatefully, as it were, to justify an extreme
increase in militarism worldwide since the collapse of the
communist bloc. The unfortunate thing about the situation is
that, owing to the interference of the secret services,
hardly anyone has the insight to tell which events are
criminal and which originate from sheer necessity. Over 3
million people have been killed in recent years in African
wars without the media informing the public of the
"civilised world" about the fact that all these wars are
over diamonds (blood diamonds!), oil, gold and highly prized
coltan/tantalum needed for manufacturing electronic chips.
The public is rather encouraged to believe it's about
"tribal feuds". Prejudices against black Africans are
exploited in this way in order to mask war-causing economic
interests (5).
Instead of carrying out reconnaissance work in the service
of the general population, the secret services become
politically active themselves, cover up or murder in the
interests of their respective wirepullers in the
military-industrial political complex (6).
Any
discussion about possible alternatives is blocked,
resistance against this madness is criminalised, attempts
are made with so-called anti-terror laws to prevent
democratically legitimate forms of protest (7).
The democratic facades of the state edifice crumble and
their cold, calculating, totalitarian structures become more
and more clearly visible. The fear of terrorism and economic
losses paralyses the critical powers of manipulated public
opinion and holds it in check.
To
return to the monetary and economic system, it can easily be
seen even without a great deal of study that exponential
growth will eventually eat away at its own foundations -
this prospect must be counteracted by all those who can
recognise it. Tying money to the circulation of trade should
be vitally important to us, as only the exchangeability of
money is property. Money itself, i.e. its liquidity, belongs
to the people (8).
Our money system must be transformed in such a way that its
task remains the simple transfer of value fairly without
perpetuating worldwide through exponential growth of
interest a socially destructive unequal distribution in
favour of monstrous accumulations of capital and at the cost
of those who may only work with their own vital energy
(9).
This recalls earlier feudal times, during which land and
serfdom formed an inseparable unity in human consciousness.
Today we see all that differently: property is one thing,
and serfdom is seen as having been overcome a long time ago.
The connection between money and interest is however still
regarded as "natural", although here also two completely
independent phenomena are concerned, to whose apparent
inseparability we have simply accustomed ourselves, as a
result hardly recognise their independence from each other,
and therefore question it too little.
The
compound interest system has no social benefit whatsoever
for the people. On the contrary, it brings about social and
other destructive effects as a result of independent growth
of assets to astronomical heights and mountains of debt that
become unpayable. Because real production grows linearly
while capital grows exponentially, an unbridgeable abyss
opens up over time as a result of the system. The tension
between rich and poor becomes explosive - and this is
happening everywhere in the world. The current interest
system violates the socially binding spirit of the German
Constitutional Law (8).
The exponentially growing amounts of money are only for
lucrative investments, profit for profit's sake; social and
ethical values just stand in its way. Destruction by war
guarantees fabulous profits in reconstruction. Our economic
system is therefore a system of sheer madness. On the one
hand the burden of debt of indebted countries, states and
organisations can no longer be paid off anyway, except by
magic. And on the other hand the limited availability of
natural resources, the interests of ordinary people and the
social and ecological consequences play hardly any role in
the plans of a corporation-friendly world economy. When,
according to monetary logic, further debt is imposed, then
the pressure grows to steal raw materials from elsewhere or
force cheap labour at home and abroad in order to be able to
pay off the debts. Hence the reimposition today of
colonialism on all the countries suspected of being rich in
resources. Hence also the renewed belligerence in our own
country (even under a red/green regime), where we said after
the last catastrophe nearly 60 years ago: NEVER AGAIN WAR.
After the confrontation with socialism, now believed to be
vanquished once and for all, the mask of humanity has been
put aside to reveal the naked face of power, of "capital",
which no longer shies away from nuclear threat. The
disregard of internationally established legal standards
exposes the true rogue states, the desecrators of our
world.
The
myth that the welfare of the rich also benefits the poor
(10),
only ever referred to crumbs falling from the table and has
moreover destroyed ecological relationships as a result of
the runaway economic growth that continues because it is
imperative for the welfare of the rich. Today the future of
welfare even in the industrialised nations does not look
good since public services the world over are being
surrendered to the game of capital under the cover of
neo-liberalism and corporate globalisation (internal
colonisation). The thirst for profit ties up huge amounts in
the virtual arena of the stock markets while vital social
services lack money (9).
The desire for profit, the shameless greed no longer baulks
at the public services of the last centuries. Socially
necessary institutions created, financed, maintained and
improved over centuries by the public for the public, such
as postal services, railways, schools, universities, power
supplies, water supplies, healthcare, roads and much more
are being taken away from state regulation and sacrificed to
capitalist speculation. The security of Germany's position
is used as a pretext, the gigantic profits of the banks are
concealed as are the social consequences: mass redundancies,
unemployment, poverty, social tensions, degradation of
people who are able to work... While the sick are burdened
with paying their own prescription charges, while social
security payments are cut, while jobs become more insecure
and while high unemployment figures are tolerated for the
sake of keeping wages low, the state easily has the cash
available for military handouts in dizzying quantities.
Whatever party coalition that rules this country moves
unashamedly towards further social disintegration. Bigger
and bigger sections of the population are pushed to the
edges of society, and their need is shamelessly exploited to
lower wages further. On the surface it's about international
competitiveness. In reality however public interest is
subject to the cause of satisfying the interests of business
and its striving for maximum profit. Although Germany is as
"world champion exporter" one of the richest countries in
the world, even here impoverishment at home is growing. The
resulting social tensions exacerbate the situation of
foreign inhabitants and other minorities. The xenophobia
that proliferates on the soil of increasing competition is
creating a political reality that breaches the German
Constitutional Law's human rights provisions.
State
debt is about 1300 billion euros and the mountain of debt
grows by another 1300 euros every second. Whereas finance
ministers Mˆller and Schiller resigned at the time
because of 1 to 3 billion in new debts, as they did not want
to participate in a policy of "after me, the deluge",
ministers Apel to Schmidt left behind new debts in the low
tens of billions, Stoltenberg in the high tens of billions,
and finance minister Waigel the laughable sum of 480 billion
euros. Minister Eichel said sourly: "we've had our future
for breakfast" (11).
Who is WE? Where is all the money? Why are the money pits of
the nuclear, arms and space travel industries challenged
just as little as the interest services of the creditor
banks? The foreign assets of the banks more than quadrupled
between 1980 and 1995 (9).
The state's regular new debts flow directly from the donor's
account to the banks' interest accounts. Specialists speak
of the risks of the money system in analogy to the risks of
nuclear technology as "monetary fission" (12).
Since reunification Germany has also been indebted to the
international capital market, which is free to dictate its
terms. It is illuminating to know here that interest is
regarded as a "fixed cost", whereas human work is put in the
category "variable costs" like wages or working time. Banks
prefer to lend their money to the state, as the state is, in
contrast to middle-class entrepreneurs for example, always
solvent. The state pays the requested interest obediently
without complaining, as it gets the money from its citizens
through taxes and duties or by confiscating private
accounts, as has happened in Argentina. The contradictions
of German transport policy (freight transported by road
instead of by rail, air travel instead of rail travel, large
projects on the one hand and line closures on the other) are
explained among other things by the fact that the Deutsche
Bank steers this policy by means of its credit, rather than
the politicians elected for the purpose. Money for social
projects is as everybody knows less available. The
existential risks for the population are growing
immeasurably. Since 1990, 45 years after the last world war,
wealth feeds itself and is no longer put into production. It
no longer has to be invested in jobs at all and leads a
happy-go-lucky life of its own for the approximately 350
people in the world who own the most wealth. Where in this
picture is the spirit of the regular oaths the politicians
take to protect the public from losses and increase their
profits? Obviously the career politicians feel less duty to
the public than to the new wielder of power, capital.
Obviously parliaments have long since given up power.
Obviously parliamentarians are no longer concerned with a
vigorous fight for better solutions in terms of a good
future for everyone - no, the impression is that they are
only concerned about securing their own living
(13)
from the cashbox of transnational corporations (TNCs). The
people, the intended sovereign of parliamentary democracy,
play in addition to the role of the voting "herd" only the
role of consumers in the service of capital. Natural
relationships are turned upside down and all too few of us
are looking at this sad state of affairs in its
existentially threatening for us all, that is, criminal
dimension, examples being Michel Chossudovsky, Maria Mies
and Claudia von Werlhof (14).
If
things were different, then there would be a long overdue,
broad discussion about possible ways out of a situation that
is turning into misery for more and more people. Just as the
amoeba adapts to changed conditions in order to survive, the
state must also learn to adapt its structures to the needs
of people, nature and the environment. The social
obligations of property must be rediscovered. The piles of
money tramping around the stock markets must be returned to
the circulation of world trade by measures such as Tobin tax
or other means and made available there for useful
investment. If money keeps moving thanks to creative ways of
ensuring its circulation, and speculatively making it scarce
is no longer worth it, then interest will settle down to a
tolerable level, especially for the poor. With the loss of
profit on interest, investment in employment will also
become attractive again. Human work does not then have to
compete with the yields of capital. Work can once more
acquire a quality that not only is characterised by joy and
satisfaction, but also makes sense.
If,
along with critical awareness, an awareness of our
responsibility towards our descendants also grows, then
further measures to ensure basic social conditions and to
maintain ecological relationships are within reach: as the
basis of the common good that cannot be increased, property
can be withdrawn from speculation by being protected and
respected as a loan (15).
An economy can be built universally that, owing to the
imposition of consideration for life, nature and its
resources, no longer serves belligerent greed but
cooperative sharing.
The
demands of the French Revolution for liberty, equality and
fraternity can finally after more than 200 years be
realised. Intellectual freedom is overcoming imprisonment in
ideologies or dogma. Legal equality is overcoming the
individual's advantage over the majority. And fraternity
recognises along with the common origin of all life our
responsibility for the chances of future generations
(16).
Footnotes
1)
- Krieg,
Konflikte, Militarismus, NATO, neoliberale
Globalisierung
[ [War,
Conflicts, Militarism, NATO, Neoliberal
Globalisation]
Biowaffen,
Bakterien gegen Panzer
[Biological Weapons, Bacteria against Tanks],
Jan
van Aken, Biologist and Biological Weapons Expert from the
"Sunshine Project" in Hamburg, on US plans to develop
offensive biological
weapons
(5. 2002).
2) - Vom Gewaltmonopol zum Gewaltmarkt
[From the Monopoly of Violence to the Market of
Violence], Erhard Eppler, Suhrkamp, 2002
3) - The Clash of Civilizations: And the
Remaking of World Order, Samuel P. Huntington, Simon and
Schuster, 1997
4) - Weil
wir gehasst werden, Terrorismus und
USA
[Because
we are hated: Terrorism and the
USA]
by
Robert Bowman
(Bishop of the United Catholic Church)
5) - Klaus Werner / Hans Weiss, Schwarzbuch
Markenfirmen, Die Machenschaften der Weltkonzerne [The
Black Book of Brand Companies: The Intrigues of Global
Corporations], Deuticke Verlag, Vienna 2001,
[http://www.markenfirmen.com/]
- In
Africa's Forests a Suppressed War
Rages,
A Current Report from the Green Heart of the Dark Continent
(23. 3 2004), by Ruedi Suter
6) - Im Namen des Staates, - CIA, BND und die
kriminellen Machenschaften der Geheimdienste [In the
Name of the Government - CIA, BND and the Criminal Intrigues
of the Secret Services], Andreas von Bülow, Piper,
2000
- 6
Interviews with von Bülow on the activities of the
secret services in connection with 9/11 as a PDF
file
- Economy as Crime: Modern Capitalism as the Last Stage of
Organised Criminality, Conrad Schuhler, isw Report No. 42,
Institut für sozial-ökologische
Wirtschaftsforschung München e.V. [Institute for
Social and Ecological Economic Research, Munich, registered
association, 2000 [http://www.isw-muenchen.de]]
- Confessions
of an Economic Hit Man
7) - Innere Sicherheit in der Festung Europa
[Internal Security in Fortress Europe], Angelika Lex
[http://emanzipationhumanum.de/downloads/limo.pdf]
8) Consitutionalist Dieter Suhr: - Geld ohne
Mehrwert - Entlastung der Marktwirtschaft von monetären
Transaktionskosten [Money without Value Added -
Relieving the Market Economy of the Burden of Monetary
Transaction Costs], Dieter Suhr, Fritz Knapp Verlag
1983, - Befreiung der Marktwirtschaft vom Kapitalismus
[Freeing the Market Economy from Capitalism]",
Dieter Suhr, in: Vortrags-Sammelband der INWO [INWO
(Initiative für natürliche Wirtschaftsordnung,
Initiative for a Natural Economic Order) Lecture
Compendium', St. Veith, 1987
9) - All over the world, goods and services
are urgently needed, but despite this, unemployment stands
at 35 million people in West Europe and 820 million
worldwide, that's nearly a third of all people who are able
to work. And the daily increasing global streams of capital
create no jobs and no material value, are longer
concentrated on profit, but on interest alone. The
volume of international flows of money has increased ten
times in the last 6 years. Now more than 1000 billion
dollars change hands in the world every day - only 1% of
that (about 10 billion per day) is in the course of world
trade transactions - 99% of money movements are purely
speculative. The banks' foreign assets have multiplied from
1836 billion dollars in 1980 to more than 8000 billion
dollars, that's an annual increase of nearly 10%. The
proportion of income from pure interest to business earnings
rose from 7% in 1960 to nearly 60%. (Source: Arno
Peters, Das Äquivalenz - Prinzip als Grundlage der
Global - Ökonomie [The Principle of Equivalence as
the Basis of the Global Economy, p.22ff, Akademische
Verlagsanstalt 1996)
10) - The gap between rich and poor yawns
wider and wider. Managers' salaries were for years about 25
times that of ordinary workers. Now this has risen to 500
times!
11) - Contribution to Panorama NDR
(v.Klitzing, J.Graebert, G.Stuchlik), ARD, 18.4.2002, 20:15
- Wem
gehört
Deutschland?
(YouTubeVideo)
12) - Bernd Senf in "Die blinden Flecken der
Ökonomie, Wirtschaftstheorien in der Krise [The
Blind Spots of the Economy: Economic Theories in Crisis",
dtv, 2001, (see
here for content),
Bernd Senf,
Fließendes
Geld und Heilung des sozialen Organismus [Liquid Money
and the Healing of the Social
Organism]
(pdf)
13)
- Das System, Machenschaften der Macht, [The System: The
Machinations of Power] Hans Herbert von Arnim,
Droemer/Knaur 2001
14) -
No
Critique of Capitalism without a Critique of Patriarchy! Why
the Left Is No Alternative,
by Claudia von Werlhof, in: CNS - Capitalism - Nature -
Socialism, Vol. 18, Nr. 1, New York/London (Routledge),
March 2007, pp. 13-27 (pdf), see also bibliography
15) - Die
drei Funktionsebenen der Bodenordnung und ihre
Zusammenhänge [The Three Functional Levels of the
Land Order and their Relation to Each
Other]
[pdf.version]-
Eine Gedankenskizze [An Outline] - Fritz
Andres,
http://www.sffo.de
16) - Global
Exit,
Die Kirchen und der Totale Markt [The Church and the
Total Market], Carl Amery, Luchterhand 2002
Money
as Debt
by
Hank Stone
This
is a 47 minute animated
video,
created and produced by Paul Grignon. I watched it through,
and was so impressed that I watched it again, and took these
notes. It's hard to overstate how important this subject is
to people who disapprove of the war system, and who look for
a peaceful, just and sustainable world in the
future.
People
believe money is created by the government. That's not the
whole truth.
'Each
and every time a bank makes a loan, new bank credit is
created - new deposits - brand new money.'
The
bank simply creates money out of nothing but the borrower's
promise to pay back the principle plus interest.
The
way the banking system arose:
-
Barter of goods.
- Barter using precious metals: gold and silver
- Goldsmiths made gold coins, to facilitate barter
- Goldsmiths issued certificates representing gold, to
make barter more convenient
- Goldsmiths needed vaults to safeguard their gold
- People brought their gold to the goldsmiths for
safekeeping
- Goldsmiths made loans based on gold belonging to
them
- Goldsmiths made loans based also on other people's
gold. They observed that people traded using the
certificates, so depositors didn't know their gold was
being used to back up loans, earning interest for the
goldsmiths.
- People saw that the goldsmiths were getting rich, but
also that the depositor's gold was, in fact, still safe.
So they wanted a piece of the action. The banking
business, with shareholders, was created.
- Demand for credit was expanding, and bankers figured
out they could make loans based on NO gold, as long as
depositors didn't all ask for their gold back at the same
time. But there were runs on the banks, and individual
banks were ruined.
- Still, the credit being offered by banks was so
important to commerce that governments stepped in to
regulate the banks, and the fractional reserve system was
born. (This means that for deposits of $100 in gold, the
bank might be able to make $1000 in loans - legally.)
- In case of a run on a bank, the central bank would
cover for member banks, lending needed gold to cover
deposits.
- Now paper money is not backed by gold. Governments
print the certificates used by the banking system.
They're 'fiat' currency, not backed by gold, but valuable
because the government has passed laws requiring that the
notes be accepted in payment of any debt. So governments
are intimately involved with the banking business.
- The government issues bonds, which are essentially IOUs
promising to pay back money in the future. Now these
bonds, rather than gold, are used as the basis of the
fractional reserve banking system.
- When a loan is made, the borrower may have to put up
collateral, but the bank simply creates the money, and
gets interest, but puts up nothing.
Today
about 5% of all the money there is was created by
governments. 95% was created by banks. People who produce
things in society find themselves in debt to bankers, who
simply conjure up credit and charge interest for it. But if
the bankers were to stop creating debt, there would
be no money. This collapse of the money supply happened
several times in history, including during the Great
Depression. Pretty much everything done in the society,
including waging war, requires vast amounts of borrowing,
and earns the banking system vast amounts of interest. When
consumers borrow it creates consumer debt. When the country
borrows, that creates the national debt. When banks create
money, they only create the principal. But the borrower has
to pay back both the principal AND interest. Where does the
interest come from? Ultimately the loans can NEVER be paid
back, because the cost of interest on loans remains as debt.
Either the debt continues to grow, or the society collapses.
As long as the actual physical economy is growing (i.e.
turning natural resources into products which are bought by
consumers), the economy is productive enough that the
interest claimed by the banks, and the debt, doesn't cause a
problem. But the bankers always win. After the age of cheap
oil, we face the need to transition to sustainability as a
society. Continuing to have highly profitable wars and
profligate consumption is no longer an option. But a very
small number of super-rich people, both inside and outside
of government, who control the banking system, will lose
their power if this happens. That's why we continue the war
system. That's why the question of how the money system
works is not taught in schools and mentioned on
TV.
FOUR
SIMPLE QUESTIONS:
Q1:
Why do governments choose to borrow the money they
need at interest from private banks, when they could
create all the interest-free money they need
themselves?
Q2:
Why create money as debt at all? Why not create money
that circulates permanently?
Q3:
How can a money system dependent on permanently
accelerating growth be used to build a sustainable
economy?
Q4:
What specifically needs to be changed?
Monetary
reform will not come easily, because those who profit from
business as usual have great power to block change.
Inflation is a flat tax on money. If we set up a system of
permanent money, created and maintained by government,
without interest being paid to private bankers, our tax
money would go much farther and there would not have to be
inflation. There would be no national debt. But now, since
society pays for its programs by debt, bankers get to decide
public policy, because they get to decide where they will
extend credit. President Abraham Lincoln tried to replace
money created as debt by banks with U.S. treasury notes.
Some believe he was assassinated because he threatened the
international bankers' system.
References
and online resources at
Moneyasdebt.net
The
War Economy and its Transformation
by
Dieter Duhm (Russian)
(pdf.file)
Money
makes the world go round - but
why?
(pdf), by Wolfgang Berger
Emanzipation
Humanum,
version June 2008, criticism, suggestions as to form and
content, dialogue, translation into other languages are all
desired
http://emanzipationhumanum.de/english/war.html
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