Why would anyone agree to this?!

I'm here to convince you why you would want to participate in an economy backed by a currency that is designed with a continuous negative interest rate (or tax).

The idea was formed by Silvio Gesell in The Natural Economic Order. (Published in 1936) This system is called demurrage.

"Demurrage is the cost associated with owning or holding currency over a given period. It is sometimes referred to as a carrying cost of money. For commodity money such as gold, demurrage is the cost of storing and securing the gold. For paper currency, it can take the form of a periodic tax, such as a stamp tax, on currency holdings. Demurrage is sometimes cited as economically advantageous, usually in the context of complementary currency systems..."

"How is this different from inflation?"

Inflation decreases purchasing power. While, demurrage decreases the amount of the currency you hold (tax), keeping purchasing power stable. This is a benefit because, if inflation is 2% you have to increase your income stream by 2% just to remain where you started. It breeds poverty.

Well, then we avoid inflation by simply raising interest rates, right? Well...

"What, now something is wrong with interest?"

In our present economic systems, money serves 2 main (opposing) functions. A medium of exchange and a store of value. One is advantageous if spent and moved rapidly creating a high economic activity (exchange). Where the other is advantageous if left to "work for you"(store), as the wealthy often preach.

Today we can make money "work for us," like a bunch of tiny digital slaves, any smart person knows this! It is essentially every richest person's secret. Put money to work, so you don't have to. Seems like a pretty good deal right?

"Seriously, what's wrong with Slave Money?"

Having money as a store of value, in which that store of value is able to create more value; makes money more valuable than almost any other asset. This is the sole reason why we prefer money over anything else! Which ironically is how we become slaves to money, with the false notion of enslaving it... (Think about it)

Let me explain how it plays out in our world.

Take 1: For A Healthier World.

Let's say there is a forest that could be sustainably harvested indefinitely for a monetary gain of 100k(post expenses) a year! This could be done using effective forest management techniques; keeping biodiversity at a peak; leaving habitat for all other beings that live in the forest; with the added benefit of the forest as a carbon sink to reduce our impact on the environment (and make this thing called oxygen).

Or, the forest could be clear-cut for a cool $2M profit. Well, today 'economically speaking' we chose the latter (over, and over again as we destroy all our forests). Because, we are able to take that 2M invest it, at let's say, a meager 6% interest; at 6% that would give us 120k. That is 20k more a year than sustainable harvesting would provide and we have direct access to 2M cash! Boom! We cut, drop, and laugh our way to the bank!

A much wiser (economic) decision.

If that money were unable to earn interest or be held for immediate returns, then holding an asset that can guarantee 100k a year profit would be a much wiser decision. Economically as well as environmentally. This same process applies to all natural resources and is a root cause of our environmental destruction. Because of interest, it makes sense (economically) to clear-cut as "money today is ALWAYS more valuable than money tomorrow." (TVM)

Take 2: For A Wealthier Life.

Money without interest remains a medium of exchange and not a store of value. So, this encourages the shift from storing value in money, to storing value in other more tangible, beautiful, secure, and beneficial forms of capital (see below). This encourages us and our society (through rational self-interest) to spend our money on other forms of capital.

This gives us economic justification to take a vacation, spend money on a garden, and share our money with our friends. This makes loaning money at zero interest (for free) a logical and rational move! This encourages us to be creative about building more diversity and true wealth in our lives!

However, with interest, "rational self-interest" and logic prevents us from spending money so freely and readily; as we know that if we accumulate enough little slaves they can possibly work for us...

This encourages us to be more frugal with our medium of exchange thus making fewer exchanges. Fewer exchanges mean fewer interactions. Fewer interactions mean fewer needs are being met.

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10 Forms Of Capital

Capital	Currency	Utility
Experiential (E)	Action	Embodied Experience, Wisdom, etc
Intellectual (I)	Knowledge	Ideas, Focus, Problem Solving, Skills, etc
Spiritual (Sp)	Intention, Faith, Focus, Karma, etc	Grounding, Balance, Attitude, Passion, Love, etc
Social (S)	Influence	Connections, Family, Relationships, etc
Material (M)	Physical Resources	Tools, Equipment, etc
Financial (F)	Money, Mediums of Exchange	Fiat, Cryptocurrency, Gold, Stock, etc
Living (L)	Living Resources	Soil, Plants, Water, Animals, Air, etc
Cultural (C)	Song, Story, Ritual, Ceremony, etc	Community
Health/Erotic (H)	Energy, Arousal	Motivation, Vitality, Endurance, Attention, Beauty, Strength, Sex, etc
Time (T)	Attention	Our Life!

Chart From: Tired of Making Poor Decisions? A Framework For Decision Making to Create a Better Life (Step 1: What Do We Have)

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With demurrage, our rational self-interest would prefer these other forms of capital over money.

What do you prefer close friends or a high valued bank account? A food forest in your backyard or more money in the bank? A living planet or high quarterly profits? The 'economically wise' decision to save money for retirement, or a vacation right now!?

"Sure, that's all well and good. But how can this benefit me directly?"

Still not convinced, eh?

"Demurrage is essentially a “tax” on the holding of currency out of circulation, intended to prevent the hoarding of currency and to keep it circulating at a rapid pace!"

This does several things. It makes the most wealthy people in the economy those who move money around and create value on a day to day basis; opposed to, those who once created value and now "have their money work for them", as they no longer create value in the world; however, are able to reap the rewards through usury. (A pretty good deal for the owners of money!)

Future success story: I'll show you how this may benefit you on a communal level.

For a real-life success story: Worgl

Let's say there is a town that agreed upon a local demurrage currency. This would replace sales tax (which discourages economic activity) and replace it with this continuous 'tax' that encourages economic activity. This is what our economics system strives for, high economic activity! (Which purports more needs are being met, and quality of life is increasing.)

Now since we're building new systems here let's add one more benefit. Part of this proposal was that the money collected through demurrage would go back to a bank. This DAO (Decentralized Autonomous Organization: Same as Steem) bank is collectively owned and was created by an ICO when the towns-members bought their local currency. The demurrage (tax) money is pooled back to this bank where anyone who owns coins can propose and vote for uses of this money that will benefit the whole society! Whichever proposal gets voted, gets done. This creates continual communal wealth. So, the money that is taxed away from you actually comes directly back to you!

"So, if this is so great. Why isn't it happening all over?"

Simple, the owners of wealth are quite content with slave money! It carries the illusion of working wonderfully for them!

Further, historically this economic system has been difficult to maintain due to the costs of administering the tax. If it was in paper notes, there had to be some form of physical stamp applied to the bill, which meant the bills had to be replaced once filled with stamps and the cost of administering such a stamp. If the system were entirely electronic, then the tax would only work for electronic debits, encouraging the hoarding of physical money... These problems deterred the system from easily being adopted.

That is, until cryptocurrency! Where we can easily set rules for this type of currency on a local level like

To recap!

• So, you get a highly active economy. (Everyone loves a healthy economy.)

• You're encouraged to invest in other more life-giving forms of capital. (Economic self-interest is a powerful motivator!)

• You're participating in a system that is beneficial for your environment. (Means a healthier environment for you, something money can scant buy.)

• You get to collaborate on group projects that increase your quality of life. (Vote and propose community funded projects.)

• Your currency isn't directly related to the destruction of our environment! (Bonus points from your kids!)

What's not to love?

This concept is a key feature in Our NeighbourGoods economic system.

“Only money that goes out of date like a newspaper, rots like potatoes, rusts like iron, evaporates like ether, is capable of standing the test as an instrument for the exchange of potatoes, newspapers, iron and ether. For such money is not preferred to goods either by the purchaser or the seller. We then part with our goods for money only because we need the money as a means of exchange, not because we expect an advantage from the possession of the money. So we must make money worse as a commodity if we wish to make it better as a medium of exchange." — Silvio Gesell, The Natural Economic Order

Let us continue to grow in abundance!

Rieki

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