Not only subjective poverty is never overcome by growth, but absolute poverty is increased by it. Growth requires technical progress and technical progress alters the composition of the labor force, making more places for educated workers and fewer for uneducated, but opportunities to acquire qualifications are kept (with a few exceptions for exceptional talents) for those families who have them already [Robinson, 1972, p. 7].
The number of very poor countries has doubled in the last 30 to 40 years, while the number of people living in extreme poverty has also grown two-fold, a UN think-tank warned Thursday. Source.
The debt-money system forces growth upon us by virtue of its ponzi-dynamic of requiring ever more debt to prevent collapse (see “The Ecology of Money”, “The Grip of Death”, “The Ascent of Humanity” and the work of Silvio Gesell, and many others). Growth is forced upon us by the debt-money system, but perhaps more deeply still by interest itself. When we study the consequences of growth – everything has consequences – we must look at the planet as a system. To study only this country or that, or even human population, without considering their effect on planetary carrying capacity, is to fail before you've begun. As for growth creating jobs, ILO figures suggest otherwise.
If you were convinced growth were always and only good, you might be thinking at this point, “So what? At least us lazy douche bags are pushed forward by a bitchin' system which kicked communism's derrière!!” But, as the quotes above demonstrate, not only is economic growth a failure on its own terms, more importantly we live on a finite planet and are experiencing the decline of all living systems, the very systems which make human life possible in the first place. As with everything else, growth is only good when it can clearly and unequivocally be shown to be so. Therefore, being addicted to it on purpose is more than unwise, it is suicidal. (And besides that simple logic, the glitter of modern technology and burgeoning human population could never have happened without oil and a revolution in sanitation. Debt-money can only take a slither of the credit, if you'll pardon the pun.)
I've been looking more deeply this week into the work of German professor of economics, Bernd Senf, in particular, “The Fog Around Money”. As far as I know his work is not available in English, so those who can't read German will have to trust me when I say his style, as well as his approach to the subject matter, is clear, concise, and engaging. What follows is a brief introduction to his analysis. We start with some simple observations.
The money people can save – because they earn more than they 'need' – must earn them money if saving is to happen in banks and not under mattresses. Where is this extra money to come from? Lending. To earn savers money, savings are lent to people who 'need' to borrow – nobody borrows if they don't have to. Not only that, fractional reserve banks could not exist as profit-making businesses without interest-earning deposits as leverage – reserves – for earning profits (although apparently they can lend money to themselves out of thin air to initiate their life as a bank).
So, with interest involved at all stages of money creation, society is forced to encourage people to borrow, at interest, those monies savers don't really 'need' right now. The 'rich' earn yet more money from their, by definition, excess richness from those who have too little. Because of this general dynamic, combined with other factors such as cost-cutting and technological developments, we see, over many decades, growing credit card debt, mortgage debt, overdrafts, national debt, etc. It is the richer sucking money from the poorer, a process which accelerates its own operating because it exacerbates the conditions which power it – the richer the rich become the more money they have to lend, the poorer the poor become the more they have to borrow. Need-differentials (to coin a new expression on the fly) inescapably increase ever more rapidly. This acceleration requires exponential growth; Growth4Ever.
While it cannot be denied that savings bring 'idle' money via bank and other lending processes to those who 'want' to borrow, what is most certainly open to inquiry is the cumulative effect of this over time and across the planet. Also, I do not seek to claim here that only the 'poor' borrow, and know that credit worthiness is part of borrowing (in the early decades of the process anyway!) – ideally lenders need to know they are likely to make a profit – but borrowers are, systemically speaking, poor relative to their lending counterparts. And yes, the thrifty can forgo the delights of consumerism and save money for a rainy day – I myself am like that – while some higher-earners live a too expensive Life of Riley and get swamped in debt. But these are sub-dynamics of a broader, global dynamic which is the needy paying the affluent more and more over time – think third world debt. The main point is that the system is perfectly happy with gluttons, indeed it creates them with the best advertising money can buy, encourages people, every step of the way, to want, to desire, to 'need' more and more shiny stuff. Bernd Senf:
Even the middle and upper income brackets belong therefore to those suffering under the weight of the interest system. Only roughly the highest 10 percent with the highest income, profit from the system. And the final 1% or even 0.1% profit from interest to a barely imaginable degree – at the cost of the vast majority of the population. Unearned income in a society which prides itself on being a "meritocracy"!
Interest acts, then, like a pump: it pumps, day in and day out, enormous quantities of money in opaque and mostly unknown ways from the great majority to a small minority. Who "pumps" this money to themselves, and from whom? Not the borrower from the lender, as the language suggests, rather – seen in the main – the few rich from the great majority of the population -- and this without work or contribution, but simply because they possess so much money.
Professor Senf mentions the marriage of a poor boy to a rich girl. The figures are startling: Poor Boy earned 4,600 DM monthly, before tax, Rich Girl earned from interest over 650,000 DM daily (quoted from Bild, 27/7/1990). These are the types of figures we all need to know about. The very wealthy are so wealthy it is impossible for them to spend even their interest. Their interest-earnings come from borrowers, from the poor. I wonder if Ms Quandt and Mr Klatten are still married, and if happily so.
On a side note, the idea that hard work should be rewarded is wrong, not in the complexity of potential interpretations of that received wisdom, but in the mythical association with external reward in the form of money. Such stems from a paternalistic, hierarchical mindset placing some tiers of society in a fixed posture of judgment over the labour of others. The story of Hard Work Leading to Riches, which are then 'your property' because it was 'your hard work,' that therefore any attempts, via taxation, to 'redistribute' that wealth in the interests of anything that is not you, is also wrong. Success is reward, as is hard work, as is accomplishment. No hard work, no life is even possible without networks of interdependent systems enabling it. Who on their own can create air from a vacuum? Weave gravity from the cloth of space-time? Who can with hard work fashion soil in which to plant the seeds they also somehow created, then cause those seeds to grow with the water and sunlight they likewise summoned from the void? Who can live all alone and develop language, story, art, culture, civilization? When we remember how dependent we are on nature's bounty, on history, on society, we see that hard work is made possible by Universe, not by those of its subsystems we wrongly think of as 'individuals.' 'I' cannot have agency and sovereignty, only we can. I think, therefore we are.
There need not be money as reward for reward to exist. Reward is inevitable simply because of our biology and its embeddedness in the environment; endorphins for example. Reward thus takes many forms. In a system in which money is reward, because of the inescapable and healthy diversity of nature, the different abilities and interests of people, and because of the logic of money, the rich will become richer and the poor poorer, increasingly, unless wisely checked. Societal division is a cost which everyone must then share via decadence and breakdown, though the cost falls predominantly on the poor, as Professor Senf clearly demonstrates in his work. Interest exacerbates this dynamic, accelerating it over time.
To live decently in a modern monetary system, having money is essential. Having less money must be, by design, a hindrance, otherwise money loses its potency; poverty as stick to rich's carrot. Interest, as said, exacerbates, intensifies, conflagrates money's crude reward mechanism by pumping money acceleratingly from the poor to the rich, which leads to obscenely wide and entrenched social divisions, which are the cause of most of what ails us today. Hundreds of millions starve while others earn so much they simply cannot spend it all. Instead they use their excess to make the situation yet worse. 'Hard work' can never and will never justify this inhumanity, even ignoring the fact that most super-rich do not work hard for their 'wealth.'
Usury and money are twinned whips enslaving humanity to the wheels of forced growth in the service of the few. They are the engine driving the increasing absurdity of the rat race, the daily grind, the decadence, corruption, and war. Across the world we see suffering of unimaginable depths just to fuel a system which is destroying us all. While we allow it we are implicitly choosing extinction. No sane person wants this. Surely sustainability is the way forward now. I write in support of a resource-based economy, which is the only system I know of prioritizing sustainability above all else, then proceeding from there. It needs our joint and unprejudiced efforts to become the best it can be.