Presentation by Mark Joób
Generally, there is not enough awareness of the central role the monetary system plays with regard to sustainability. One of the main reasons is that for several decades economics has been dominated by a monetary theory that gives a false description of the monetary system and the role of money in the economy. Assuming that money on the macroeconomic level is basically neutral, traditional monetary theory does not recognize the negative impacts of the current money and banking system on society and the environment.
In reality, money created as debt carries interest and thereby contributes to a twofold growth pressure on the monetary system and on the real economy. Debtors need more money than they have borrowed because they also have to pay interest on their loans. In addition, business on the whole cannot be profitable unless the quantity of money continuously increases. This leads to the dynamics of growth which is a core characteristic of our economic system. The increase in the quantity of interest-bearing money exerts a monetary growth pressure on the real economy and the growth of the real economy simultaneously exerts an anti-deflationary growth pressure on the money supply. The growth of the real economy, which is to a great extent forced by the monetary system, involves an excessive exploitation of natural resources and is a hindrance to sustainable development. Financial indebtedness thus leads to ecological indebtedness towards nature, which impoverishes mankind.