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I've been hearing a lot of talk about how "unearned income" is the source of society's ills, namely the great divide between the rich and poor, and I'm curious if it's possible to have a society where the collection of interest is strictly prohibited.
That is, if you loan out, say, $100,000, then you can only be repaid back that exact amount, with no interest. Convsersely, if you have money in the bank, it'd not draw interest either - it'd just be there for safekeeping purposes only. This way, people wouldn't be able to live off other people's labor simply be amassing large amounts of cash. But then again, it'd be hard to get a mortgage to buy a house, or to borrow money to start a business - but perhaps the government could fulfill the role of banks by providing zero-interest loans. As for owning shares in a corporation by way of shares of stock, I think this should be replaced by worker ownership of all corporations, so that only the people that actually do the work for the company get to reap the rewards of the company's profits. I've never understood the rationale for people to live off other people's labor simply having the good fortune of owning stocks, bonds, etc. If a person wants to be rich, let them EARN that money though their actual labor, not sit back and collect interest / dividend payments without lifting a finger.
So, the question I'm posing is how such a society would function, whether it's even feasible in the first place, and if so, would our collective standard of living be higher than we currently enjoy, or would we be worse off? Personally, I think the rich would be decimated in such a society, but the majority would benefit - just imagine the savings of zero interest mortgages and being able to reap 100% the fruits of one's labor. Just my opinion of course - what's yours?
To answer the above replies, I consider myself an Economic Atheist - the "science" of econmics is no different than religion in my mind - something I don't believe in. So yes, not only do I not understand economics, I don't believe in it. It's just a bunch of rich old men that sit around justifying a few super-rich in a sea of poor, plain and simple.
But to put my post in proper context, I'm exploring "alternative" economic systems for the purpose of writing a science fiction novel, not as a political statement. I suppose there aren't too many "free thinkers" in this forum, at least not so far...lol.
And besides, anyone ever heard of the FED, who controls interest rates simply by fiat? It's really all about control - them against us. Someday, the "us" will win out against "them" - I can only hope I'm lucky enough to see that in my lifetime.
islamic nations have been doing this since 630. banks and even mutual funds/investments are now offered free of "riba" (interest translation from arabic) in western countries. this is not something new. you can read the business models out right on the internet at these various companies.
This raises an interesting topic. One of the reasons that the Jews became so economically powerfull in Europe is because they could charge interest but Christians could not.
I've been hearing a lot of talk about how "unearned income" is the source of society's ills, namely the great divide between the rich and poor, and I'm curious if it's possible to have a society where the collection of interest is strictly prohibited.
It is simple, reclaim "economic rent" and "unearned income". Use this to pay for all public services. Commonly created wealth pays for common services. Very sensible - very simple. Economic rent confuses many. It is where there is no enterprise and or cost of production. In short someone else made the wealth, which invariably is the community - commonly created wealth.
Then the existing money system can continue. Of course reclaiming commonly created wealth does not get rid of a bad banking system, a bad planning system, etc. But it is one hell of a great base to come from providing a stable economic base that eliminates boom and busts and encourages enterprise. If too much "economic rent" and "unearned income" is reclaimed for public use, then this can be given back in the form of a Citizens Dividend.
You don't really know anything about how an economy works, do you?
He knows the one we have now is fundamentally flawed. That is great start.
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