Building A Life For Ourselves

create

We all to some extent or another try to build a life for ourselves in this world. We have our goals, our dreams, our visions, our hopes, our desires, and we attempt to build our lives accordingly. Some are able to realize parts of their dreams, others are not able to realize any of them, not because they did not have what it takes, but because this world system in its current set-up is extremely destructive, and can easily tear down a persons life and future. It is thus interesting to see how many of us that try to hide in our small lives. We hide in our homes, with our families, with those that are close to us, we go to work, earn enough to survive, hold unto our dreams and hope that it will not be our life that is shattered.

However, a point that we forget is that, until we have once and for all directed this world system and created a new, updated, and benevolent system, we will not be able to create our dreams, hopes, desires, and that small place in this world where we can be left alone and tend to our own interests and hobbies. Because there is no way to separate ourselves from what is here. Even if we build our house far, far away from civilization, there is still a risk that the instability of the world system will have consequential effects on our lifestyle. This is the reality, we will not be able to have a great life, until the world system as a whole have changed.

Thus, the dream and motivation of building a life for ourselves in this world, must also include taking responsibility for the world system, in taking on a point within the world system that must be directed, and walking that point into change. Because unless we do it, how can we expect anyone else to? And unless we get up and start directing our lives, not only in the personal, but also the interpersonal, and the universal, any form of peace and stability we experience in our lives will be ephemeral – because the world system will eventually catch up with us and give the reminder that things in this world are NOT what they should be.

Creating our lives must as such include taking responsibility for and pushing for  a change within the world system. And the interesting point is this; it does NOT have to be a grand and impressive change that we personally take on to move into this world; such as for example, stopping starvation. Even the small and incremental contributions moves the world into the right direction and is as such needed. Hence, what determines what we make our area of focus and expertise, our purpose when it comes to the world system, is ourselves: Through asking where do we have our strengths and weaknesses? What are we able to do with what we have? Where are we able to contribute that will make a impact and change things for the better? That is the question we must ask ourselves: Where Can We Put Ourselves To The Best Use?

One animal that we can learn from when it comes to forgetting about our individuality, and instead looking at the greater picture, to see where we fit in the best, where our particular constitution and personal make up can be most effective, is the honey bee. Because the bee lives solely for the community, for its hive. A bee is born into one out of three specific physical types; it is either a queen bee, a drone bee, or a worker bee. Each of these types have their own distinct role in the bee community – and neither of these roles supersedes the others in terms of having a leader position. In-fact, if the queen bee is not effective at laying eggs, which is her primary task, she will be replaced by the worker bees. Then the drone bees, their one task is to mate with a queen bee, and when that is done, the drone bee will die, because it is of no use to the bee community anymore. For the bees the individual does not exist, the primary consideration is the group, the hive, the togetherness, because as a group bees are strong, while as individuals they are weak.

Us humans need to become more like bees when it comes to looking at our lives, our decisions, where we decide to go, and how we decide to live, and when it comes to contributing and giving ourselves a purpose in relation to the world system. In order for us to contribute the best we can, we must let go of our individuality, our desires, our wants, our feelings of what we WANT to do, and instead look at where we are the BEST; what skills do we have? What supportive characteristics have we nurtured and created within ourselves? All of that should be taken into account when we create our lives, our future, our mission and purpose in this life, as that will make us much more effective, and subsequently, the human race as a whole will benefit.

Let us not dwell on the problems of this world, but instead embrace the busy bee in ourselves, look at where we can contribute and give, and get to action, because that is the way we, one by one, individually and together, incrementally and one piece at a time, move this world towards a better future.

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Check out the following:

Living Income Guaranteed Proposal http://livingincome.me/wiki/The_Living_Income_Guaranteed_Proposal

Living Income Guaranteed by Equal Life Foundation: http://livingincome.me/

WordPress: http://livingincomeguaranteed.wordpress.com/

Facebook https://www.facebook.com/BasicIncomeGuaranteedByEqualLifeFoundation

YouTube: https://www.youtube.com/user/LivingIncome

Google+ https://plus.google.com/u/3/b/106743715342474012987/106743715342474012987/posts

Twitter http://twitter.com/livingincome
Equal Life Foundation: http://equallife.org

Equal Life Foundation – Bill of Rights: https://equallifefoundation.wordpress.com/bill-of-rights/

Presenting the Fundamental Human Rights by Equal Life Foundation https://www.youtube.com/watch?v=eT8Sfq-pF3Y

WordPress: http://equallifefoundation.wordpress.com/

Twitter http://twitter.com/equallifefndn

Equal Life Foundation: https://www.facebook.com/EqualLifeFoundation
Economist’s Journey To Life http://economistjourneytolife.blogspot.com/

Discuss at: http://www.facebook.com/groups/capitalism.vs.equalmoney/

http://livingincomeguaranteed.files.wordpress.com/2014/04/lig-proposal-first-draft-2013.pdf EN

https://livingincomeguaranteed.files.wordpress.com/2015/02/lig-predlog-prvi-osnutekt-v1.pdf SL
http://livingincomeguaranteed.files.wordpress.com/2014/04/ivg-propuesta-primera-version.pdf ES
http://livingincomeguaranteed.files.wordpress.com/2014/04/lig-prijedlog-prvi-nacrt.pdf CR
http://livingincomeguaranteed.files.wordpress.com/2014/04/lig-voorstel-eerste-schets-v-2.pdf NL

 

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The Future of Money Creation

positivemoneyuk

It is not hard for anyone to see that our current money system is experiencing difficult times. Even though interest rates are historically low, this still does not ignite the economy the way that the leaders hope. We are still in a deep recession, where youth unemployment is very high, companies are struggling, and where it is increasingly hard for anyone to create a life for themselves. Then on top of this, the situation in the middle east and Africa, is to put it mildly, catastrophic. The consequence is that refugees flood into Europe serving to destabilize the economy even further.

When investigating why our economy has become so weak, why we have so many structural flaws in our system, and why there does not seem to be in an end in sight, I have time and time again seen that these are strongly tied with how money is created in society. For those that do not know, money is created as debt. Commercial banks put out money in the economy, at an interest, when companies, and private individuals take out loans. This in turn means that there is ALWAYS a deficit of REAL money in the system, because DEBT accumulates without additional, new, debt-free money being inserted into the economy. We do not need a rocket scientist to conclude that this is bad math and also, big problems.

One clear and relevant example of how excessive debt can effectively destroy an entire country is that of the Greece sovereign debt crisis. Coerced by the financial powers of Europe to pay back its debt, Greece has now breached some of the most basic Human Rights there are. Pensions have been slashed and public jobs as well as salaries have been cut – the result is a disaster of epic proportions. And when we look at the reason for this destruction of human potential it all comes back to one thing – DEBT.

We should really ask ourselves why we structure our economy this why, because can we not find a better way? Does it not make sense to instead build our economy on debt free money, where countries are empowered using debt free grants to strengthen instead of being sucked dry of all life with the excuse that they owe money to someone, or something?

Having a money system that is based on debt creates extreme limitation, and at the end of the day, it only serves those few that are  in control of money creation, which is commercial banks. We have become so used to thinking that we must become indebted to buy houses, to receive educations, and to achieve a comfortable life, though this is ONLY a political structure – not a ACTUAL REALITY. Fact is that we could structure our money system in such a way where our governments issue debt free money that could be used to build houses, improve infrastructure and the general well-being of the public. Debt is fictional – a mirage created through laws – but in reality we all have an equal right to live a dignified life.

Investigate DEBT and the SOLUTIONS presented to this problem – the organization POSITIVE MONEY is offering a very cool solution – to implement this we require political participation – as it is through politics that laws are written and society is built.

Down below is an example of videos made by positive money that explains how banking works.

The Shootings In Paris, An Act of War?

paris_shootingsFriday the 13th 2015, the day when an apparent terrorist attack struck Paris, and more than a hundred people got killed. The French president responded with saying that the attack is an act of war. However, I would say that this is not a correct assessment of the situation, and more importantly, it is not a effective way of approaching what has happened.

If we roll back the time for a moment, 11th September 2001, two planes flew into the World Trade Center, killing thousands. The American government blamed the Taliban’s and decided to invade Afghanistan, and later Iraq, in the so-called war against terrorism. Obviously, it was never about a war against terrorism, as rather it was a way for the corpocracy of America to feed its enormous military industrial complex. Though, for a moment, let us assume that the war on terrorism was actually a real attempt to make the world a safer place. It is time to ask, did this war actually make the world a safer place?

The simple answer is no, and it takes no rocket scientist to understand that wars, whatever reason that is used to justify them, creates even more consequences. As such – we require a new way of dealing with things, a new way of approaching conflicts, a new way of handling consequences, were we do not hit back but instead look at how the consequence came about, and more importantly how we were a part of creating that particular consequence.

When it comes to terrorist attacks, it is not difficult to understand why some individuals in this world develop an urge to fight back against the establishment with brute force. The reasons are poverty, war, lack of education, and the nonexistence of opportunities. For some, born in the wrong country, at the wrong time, there is absolutely no hope, and for those, terrorism is a way of saying: ‘Look at what you have done to me! Look at what you have done to my life!’ – and that is what we in the western world must understand – that terrorist attacks is an indication that we have to steer things in another direction. Terrorist attacks is as much a cry for help, as they are a sign we humans have not yet been able to unite as ONE group.

Though, I will admit, it is very easy for me to say that ‘we have to change’ – but how to practically do that? What can we possibly do on a individual basis to have any impact on a global level? Truth to be told, there is no single person that can actually change the world, but we can change the world together, through each of us making the decision to stand up in our own lives.

For example, one solution that we can implement is to, when conflicts emerge in our own personal worlds, someone lashing out on us (a micro terrorist attack), that we then look at how we were a part of creating that conflict, and also why that conflict came about, and what we are able to do to in the future, to prevent it and find sustainable solutions – thus living the example of PEACE, CONSIDERATION, RESPONSIBILITY and UNDERSTANDING.

When we live what is best, when we stand as an example of a better, upgraded human being, a human capable of forgiveness, that will have a impact. Maybe it will not come through on a global level, though we will be able to see it in our personal relationships, in our communication with colleagues and acquaintances. And what does this world consist of but personal relationships, family relationships being the very core bonding that holds society together. When these relationships change, it is clear that it will have an effect on other, larger, collective relationship groups as well.

So, consequences are not bad, they are opportunities for learning and self-growth. Each consequence is a sign, a signal, that there is something about ourselves that we can change. This is so equally on a personal as well as global level. Thus, instead of saying that these terrorist attacks are an act of war – let us instead recognize them for what they really are – a cry for help and a indication that we can do better to ensure that each human being on this earth lives a life of dignity.

For more solutions and ways to tackle the current state of human affairs, investigate the Living Income Guaranteed.

Student Debt – A Crime Against Human Rights

StudentLoanDebtStudent Debt is one of those things in society we all tend to take for granted. Most that go to college or university are required to in-debt themselves in order to pay for tuition and living expenses. Some countries, like Sweden, do not have tuition fees – though the majority of students are still required to take out loans to cover their living costs.

Young people in this world find themselves between a rock and a hard place. Either you take out hefty loans, make it through university, and potentially land a well-paid job afterwards. Or you come to terms with maybe having a low paid job and no debt. Both of these options are completely horrendous. To be forced into debt to make a life for yourself is a crime against human rights – and yet – this is what young people are required to do.

What should be happening is that young people growing up in this world are nurtured and receive all the support and assistance they require to make the best out of their lives. Because if we cripple an entire generation with debts, imposing unto them the choice of either debt serfdom, or unemployment, we are most certainly creating immense and global consequences in the future. Not only are we creating class warfare, we are also creating generational warfare – were those that are older and have had the opportunity to build a life for themselves without debt will be the target of resentment and blame of the younger generations.

However, one of the most fascinating points that this point with the student debt shows is how we as human beings really have a major issue when it comes to caring for other people. Because how many of us are not benefiting from student debt? Do you for example know what sort of assets your pension funds have invested in? Most certainly big parts of their investment portfolio are made up out of student debt bonds – and would you be willing to give up your pension to release students from their debt? And really – at the end of the day – this is the question we as Humanity face: Are we willing to care for another as we care for our children and ourselves? Are we willing to give up our self-interest to stand for a solution that will benefit all people, youngsters as well as old people, and are we willing to give up some of our luxury to achieve that outcome?

Debt is artificial, which means that its existence is a mental abstract creation. Debt exists in databases and registers made up out of numbers and names – to remove these numbers would be very easy. We could decide today as a society to not anymore accept and allow debt to be part of our lives. Instead of debt, we could decide to give our future generations the best possible conditions to create themselves a life of fulfillment, joy and happiness. We do hold that power – so the question we should ask ourselves is: Why are we not creating the world that we want to see?

And – Why not take it even further? Money is artificial, which means that its existence is a mental abstract creation. Money exists in databases and registers, called banks, that are made up out of numbers and names – to change these numbers would be very easy. Why then not change the numbers a little, so our youths do not have to go through their lives paying debts for which they got things that should have been theirs as part their HUMAN and UNCONDITIONAL RIGHTS. See, life, this world, our monetary system, our way of doing things, it is not set in stone – there are many solutions to the problems we face – though to see them – we have to let go of our small, confined and limited world view – our self-interest – and start seeing our reality from a greater, and more expansive perspective – and ask ourselves the daring question: What is Best For All?

I am one vote for world equality, and I am one vote for a Living Income Guaranteed – because I want what is best for youths as well as elders. I want, for all those that wish to experience higher education, to be able to do that, without incurring any debts – and I want all children to be certain that when they grow up – they will be embraced into a society that cares for and tends to them – and want what is best for them. We can create this world – and it all begins with us letting go of our self-interest and developing that real and genuine care for others.

Wasting Food

food-wasteAccording to reports by United Nations Environment Programme and the World Resource institute, about one third of all food produced worldwide gets lost or wasted in food production and consumption systems. When converted to calories, it means that about 1 in 4 calories intended for consumption is never eaten. This food is wasted for several reasons. Much is lost because it does not fulfill the aesthetic requirements of shops, and hence indirectly, consumers. And of the food that is actually bought, a lot is thrown away, and some of it due to expiration dates being set too early. It is clear that food wastage is a massive problem and it reveals some interesting characteristics of the human being, and also many opportunities of self-correction, where we as humanity can change ourselves on a individual level, to as such make an impact globally.

What does food wastage show us about ourselves? It shows us that we do not value the labor and energy that has gone into creating that food – for us – food has become only a number – a cost that we buy using money. Though, fact is that food is more than a number, because to create each produce we eat, an investment of real resources had to be made. The farmer had to put in great effort to grow his crops and care for his cattle. The slaughter had to exert himself with determination and strength to slaughter and prepare the meat for consumption. And nature, the animals, and plants had to offer themselves, their lives, to nurture and support our continued existence. As such, food cannot be measured in money, food is a work of art, that has been given a attention and energy to end up in the supermarkets where we are used to seeing it.

When we take food and only eat some of it, or we buy too much, and throw away the things that we allow to go bad, what are we thus really saying? In-fact it is an act of negligence and ignorance to treat food as having no value – negligent because there is not much we need to change about ourselves to become a more considerate and effective when it comes to handling our food – and ignorant because we do not see the amount of work that has gone into the food, which we so easily make a decision to throw away.

Thus, if we wish to stop waste in this world, we must begin with ourselves, and understand that wastefulness occurs not only with food, but it is the way in which we have come to live. Our entire society is based on waste, and the false belief that there are eternal resources, eternal opportunities, and eternal energy for us to consume without consequences. Truth is that, there is no such thing as a free lunch – and for each resource we waste – there is one resource less to be used.

Though, let us take this one step further, and ask ourselves, where are we wasting ourselves? Fact is that as with all things that we create on the outside, we are also creating and living them inside of ourselves. Are we not wasteful with ourselves, and our own potential when we accept and allow ourselves to give up on our future, and what we know we can create for ourselves, because we do not feel motivated? Are we not wasteful when we decide to not do the most with ourselves, and our lives? Are we not wasteful when we decide to throw away our talents, because we do not experience ourselves as having the energy to develop them? Are we not wasteful when we throw away moments in our day to get to know ourselves, and our mind better, because we accept and allow ourselves to be afraid of self-intimacy? Are we not wasteful when we spend hours, upon hours in a emotional reaction, time that we could have instead used to LIVE and participate HERE?

There are many ways that waste come through within ourselves, in our lives, and thus, in this world. And it is important for us to investigate how we are wasting, so that we can stop this behavior, and instead live our lives within the starting point of using – and as such – being useful instead of wasteful.

How can we change ourselves to direct the waste that occurs in our daily lives into a using and usefulness? Because in answering, and living the answer to these questions, we can make a big difference for others and ourselves as well – as we stand as an example of what it means to respect the life within us and this world – where we do not accept and allow waste to exist within us.

Waste happens when we do not push ourselves to see the value in what is here, to appreciate to what is here, and be grateful for what is here. Waste happens when we take things for granted. Waste happens when we become caught in our desires, and our urge to experience things, and we miss the reality, the universe of life that is here as a part of our world. WASTE occurs when we walk through life in HASTE, thinking about only our own WAIST – and not understanding that our actions and inactions have consequences. Hence, as a first step to change the massive waste that happens daily in this world on a myriad of levels, let us change ourselves – and make sure that we are not accepting and allowing waste to take place in any form within ourselves, or our lives.

Investigate the Living Income Guaranteed.

Corruption, Poverty and Capitalism

There is a clear correlation between the amount of corruption and the level of economic welfare that exists in a country. In countries that are rich, corruption is not as frequent as in countries that are poor. This shows us some fascinating points about human nature – and it also reveals solutions for how to deal with the tendency humans have to become corrupted, dishonest, and fraudulent when placed in positions of public power.

bribery-corruptionThere are a few things about human nature that are obvious: We all have an inner drive geared towards self-preservation. If we had to choose between us dying, and someone we do not know dying, most of us would have the other person die. And really, there is nothing strange about this. Self-preservation is an innate trait most forms of life on earth – each organism wants to survive and reproduce. Hence, when we are placed in a position of shortage, we will find ways to get out of it – and if it is required – do that at the expense of another.

Then, we have this human characteristic called greed. If we look deeper at the nature of greed, we can see that greed in-fact consists of a deep-seated fear. Greed is the tendency we have to take more than we need, because we fear that we might need that more in the future, and we ‘just’ want to be on the safe side if something unexpected were to happen. Hence, greed is a form of self-preservation, though a more aggressive, and irrational variety – because where greed is involved – there is not an actual need to preserve self.

Moreover, we have a thing called competition. Most people drive themselves through life in a state of competition. They want to compete against neighbors, friends, acquaintances – they want a better car, house, family, etc. Competition thrives in areas/environments where there exists a lack of resources. For example, in an environment where there is little money, the competition for the money will be greater. And when there is a aggressive competition, there will be incentives to cheat, and incentives to preserve self at the cost of another.

We thus have these three ingredients: Self-preservation, greed, and competition – all of which can be said to be ‘natural’ parts of the human experience. And with natural I mean that most people have or develop such traits from an early age – though this does not imply that such traits are impossible to change and direct. No, all of these traits can be directed – and it is possible to change self to not anymore exist within and as self-interest. Though for this blog let us continue with corruption.

We have established that there are certain characteristics in the human nature that is typically part of the human experience. Now, what is clear is that these characteristics represent the foundation, the underlying reasons that will shape and form the decision of an individual to corrupt themselves. And what is fascinating is that these characteristics will become highlighted in a state where there is poverty, and lack of resources to go around. In such a scenario the average human being will start to think only about themselves, and how to make decisions that will benefit their life, and how they can get out of the precarious situation they find themselves in.

We can read the following in an article from Forbes magazine:

“The links between corruption and poverty affect both individuals and businesses, and they run in both directions: poverty invites corruption, while corruption deepens poverty. Corruption both causes and thrives upon weaknesses in key economic, political and social institutions. It is a form of self-serving influence akin to a heavily regressive tax, benefiting the haves at the expense of the have-nots. Trust–essential to financial markets and effective governments everywhere–is difficult to build in poor and corrupt societies.

Poor people and economically strapped businesses have few economic alternatives, and where serious corruption is the norm, they are even more vulnerable to exploitation. In that sense, there is no such thing as “petty” corruption: police shakedowns in a public market, or roadblocks in the countryside where farmers must pay up in order to transport produce to the city, may yield seemingly trivial sums of money, but they help keep poor people poor.

Low-level officials themselves may have trouble earning an honest living. In poor societies, they are often underpaid, when they are paid at all, and must provide a stream of payments to patrons at higher levels. In such settings, bribery, extortion and theft become matters of survival.” (Johnston 2009)

When survival becomes difficult, corruption flourish, hence corruption is a symptom not the actual illness. The real illness is poverty, and poverty is a structural effect of our current debt based money system – also called – capitalism.

”To reduce corruption from its current high levels requires something more than, and different from, additional laws, commissions, invocations of morality, regulations and so on. It requires basic, structural economic change. Earlier reforms achieved so little success because they ignored the very idea or possibility of such change. They left untouched capitalism’s basic incentive structure and capitalists’ power to use enterprise profits for corrupt purposes. Capitalists have continued to face all the benefits and gains that corrupted officials can yield (plus the risks and costs of failing to corrupt them). Capitalists have likewise continued to amass ever-larger profits and thus the funds with which to corrupt.” (Wolff 2014)

It is easy to blame human nature for being the cause of greed, yet at the same time, when we are able to map out and understand how the human functions, would it not then be easy to create a system where these characteristics are not allowed to fester? Is it not possible, that in a system where money is abundant, where opportunities are ripe, and there are no valid reasons to fear for your own survival, that self-preservation, greed and competition would cease to exist?

Maybe we can even stretch this even further, is it maybe so, that self-preservation, greed and competition are products of this current system, characteristics that are not supposed to be part of the human nature? In any case it is obvious, that if we were to restructure our money system and distribute resources equally, this would have massive positive effects on the human population. It has been shown that equality improves, among other things, physical health, mental health and education, and lessens drug abuse and obesity (Wilkinsson, Pickett & Reich 2011).

Corruption is an illness created by inequality and a unfair distribution of resources. We can change this be implementing a new system of distribution – capitalism is not and have never been the only way to structure and organize human labor, productivity and resource distribution. I suggest that we implement a Living Income Guaranteed – a Guaranteed monthly income that is sufficient to sustain a human being so that they can tend to their basic needs.

According to article 3 of the Universal Declaration of Human Rights, all humans have the right to life, though it is obvious that this right cannot be realized unless we implement a system that gives all the money they require creating their lives. Hence, money is a human right and not something that should be subject to conditions and demands.

Investigate the Living Income Guaranteed.

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Michael Johnston (2009). Poverty and Corruption. Forbes Magazine. http://www.forbes.com/2009/01/22/corruption-poverty-development-biz-corruption09-cx_mj_0122johnston.html [2015-10-14]

Richard D. Wolff (2014). Political Corruption and Capitalism. Truthout. http://www.truth-out.org/opinion/item/21559-political-corruption-and-capitalis [2015-10-15]

Richard Wilkinsson, Kate Pickett, Robert B. Reich (2011). The Spirit Level: Why Greater Equality Makes Societies Stronger. Bloomsbury publishing

Micro Credits – A Solution For Poverty?

After the Norwegian Nobel prize committee decided to give the United States president Barack Obama the peace price, a president that later came to continue to war in Iraq, and also fund insurgents in Syria, I seriously started to doubt the reasoning skills of the members of this Nobel price committee. And after having watched the documentary ‘The Micro Debt’ by Tom Heinemann, I have concluded that the Nobel prize committee (at least those handing out the peace prize) do not know anything about what it means to create actual peace in this world. Because when they decided to give Muhammad Yunus the peace price, for having founded the Grameen Bank, and invented the concept of micro loans, and for thereby apparently having found a solution to poverty, they were obviously not using basic mathematics to assess the outflows of such loan methods.

Professor Muhammad Yunus, Nobel Peace Prize winner visiting theThough, before we dive into the basic mathematics of Micro Debt and whether this can be a solution for poverty or not, let me share the story of Muhammad Yunus, his bank, and the stories that has begun to surface about his money lending practices. It begins in 1976 when Yunus (supposedly) found out that small loans could make a disproportionate difference in a poor person’s life. According to Wikipedia, the first loans Yunus gave, made it possible for the borrowers to profit. Yunus business expanded, and by July 2007, his bank had issued around US$6.38 billion to 7.4 million borrowers.

As mentioned above, Yunus was awarded the peace price in 2006 for his efforts to create economic and social development. However after the release of the documentary ‘The Micro Debt’ the Bangladeshi government decided to review Yunus bank, and Yunus himself was removed as Managing Director of his bank. This is not particularly strange considering the claims that are made in the documentary, and the compelling evidence that it presents, that the micro debt is not at all a solution for poverty, but rather a trap, making the large amount of borrowers worse off than before.

Though in this blog I am not going to focus on Yunus and whether the claims made against him are true or not. My focus will instead be the concept of micro credits and whether these loans makes any sense; is it really possible to remove poverty through debt? The Micro Credit concept is not unique to Bangladesh; it has also become popular in South Africa, where it has created the opposite of poverty reduction. The following quote gives a stark description of the situation that unfolded.

”The microcredit-induced problems that emerged in South Africa are two-fold. First, microcredit per se is actually an “anti-developmental” intervention. For one thing, it exists on paper to support the smallest income-generating activities, but in practice is increasingly all about supporting consumption spending. In South Africa, the microcredit movement has created an incredibly risky and expensive way to support the immediate consumption needs of the very poorest.

With few poor individuals possessing a secure income stream that might ensure full repayment of a microloan – unemployment is now higher than it was under apartheid – many of the poorest individuals have been forced to repay their microloan by selling off their household assets, borrowing from friends and family, as well as simply taking out new microloans to repay old ones. For far too many now “financially included” individuals in South Africa, using microcredit to support current spending has been a disastrous and irreversible pathway into chronic poverty.”

Milford Bateman, Microcredit has been a disaster for the poorest in South Africa, http://www.theguardian.com/global-development-professionals-network/2013/nov/19/microcredit-south-africa-loans-disaster (2015-09-25)

euro-427528_640Academics and other proponents of the Micro Credit as a way out of poverty makes the assumption that the money lent will be used by the borrower to further his business. This however, is just that, an assumption. Most poor people are just as middle class people, not entrepreneurs, and do not have a very entrepreneurial relationship with money. The loan will be used to buy goods for immediate consumption, and will only serve to put more pressure on the debtor. In worst-case scenario, this will lead the already poor person, to loose the little safety they do have, when they are forced to sell their house to meet interest and installment payments.

Further, those borrowers that are indeed entrepreneurs, and that do invest their money in a business, there is nothing that says that these businesses will be able to profit. Nine out of ten startups fail – and that number will probably be even higher when not only you, but also all of your neighbors, decide to go out on the streets and sell the same thing – which did happen in South Africa.

Then we have the big problem when it comes to Micro Credits, the interest rates. On some of the Micro Loans that interest rate will be at 100 % or more. There is no startup that yields a sufficient profit to cover such a high interest rate. Conveniently for the creditors, most of the debtors are not proficiently literate, and will thus not really understand what they are signing.

Yunus was applauded when he was able to offer loans to poor people that cannot offer any securities in case they would forfeit on their installments. However, to ensure repayment of the loans, Yunus bank have developed a system of “solidarity groups”. It is these small informal groups that together apply for loans and its members act as co-guarantors of repayment and support one another’s efforts at economic self-advancement. Hence Yunus use the psychology of group pressure to ensure that the poor people are sufficiently motivated to pay back their loans. And even though this might seem innocent, in reality it has lead to the most horrific of consequences. One woman that was unable to pay her loan was pressed by her co-guarantors to take up prostitution as a way to meet her installment payment. That woman later poured kerosene on herself, and lit herself on fire. That is the effectiveness of group pressure when survival is in the picture.

What are we then able to conclude from all of this? One thing is clear: We cannot trust academics to know what is right! Even though they have a degree in economics, and even though they have received the Nobel peace price, that does not mean they actually understand how reality operates. Academics have their nose buried in deep books and because of that they will many times miss what is right before their eyes. Hence, we have to educate ourselves, and take responsibility. We cannot rely on a small intellectual elite to know how to solve such things as poverty – this is a problem that involves, and touches all of us, and accordingly it is everyone’s responsibility.

Then, the second thing we can learn: Change cannot come through DEBT. The very reason why we are living in a world where money is increasingly more difficult to obtain is because of DEBT. We live in a debt based system, and this forces us to work more – and even still there will/must be a loser. With debt, someone always loses; someone must be that poor guy that has to pay back the interest.

Real change will come through changing the structural design of the economic system – because only through changing the rules of the game are we removing this incessant fear of survival that is currently holding the entire human race in its grip. That structural change must involve giving all human beings a dignified life, real security, real safety, and easy access to money. This cannot come from debt, as debt is the very instigator of fear, anxiety and stress.

Hence, if you are interested in solving poverty, I suggest that you investigate the Living Income Guaranteed. This is an economical system that will revolutionize the way we think about money – and that is precisely what we need. We need something new, a brand new way of looking at things – a fresh start – free from debt and the old pessimistic ideas that apparently, poverty is unable to be removed from the face of this earth.

For more reading:

http://www.marlenvargasdelrazo.com/the-micro-debt-the-nefarious-business-on-poverty/#

http://www.theguardian.com/global-development-professionals-network/2013/nov/19/microcredit-south-africa-loans-disaster

Watch the documentary ‘The Micro Debt’

https://www.youtube.com/watch?t=791&v=yoAGKFaqwjM

https://www.youtube.com/watch?v=M6KHa4omGG8

https://www.youtube.com/watch?v=FdmXLpjykNk