Poor Because Of Money

As I look into a late afternoon sun, I see a spacious hilly landscape. The bench on which I sit is placed in front of a mansion, where only six years ago the landowner would spend a few weeks of his holidays once a year. Right in front of me I see about thirty new small houses, now inhabited by farmers and their families. In the distance are some sheds and stables; the rest I see is cultivated farmland. Six years ago this land was taken over by the movement Farmers Without Land.

My host, Alvaro, is the third son of a small farmer from the poor North of Brazil. Full of confidence, he talks to me about the first years when they occupied the land together with about 2,000 families. "For years the owner had neglected the land: it was a difficult time. The landowner's small private army murdered a few of us and sometimes someone was beaten up just to scare us. No, that was not a peaceful time. I remember that there were times when we nearly lost all hope. We seriously doubted that we would be able to continue. Fortunately a few hundred new people came in from Porto Alegre to give us support. That gave us new courage. We had not been forgotten. So we managed to keep courage and now we have established ourselves here."

"At Strohalm we think that it is possible for economic activities to take place without becoming involved in the monetary system. We are building economic networks so that many people in many different businesses no longer need expensive money, and where it then becomes possible to do transactions without interest charges. The money becomes subjected to the people instead of the other way round. We have discovered that economic activities are now possible in areas that in the current monetary system are not profitable."

Alvaro looked at me and said: "That is exactly what we need! In this way we can continue at our own pace. You know, it does not matter how hard we work over here, as long as we don't get a chance to change the system itself, we will always end up losing. You could see that a few years ago during the Peso crisis. At the first sign of trouble, investors removed their money and our country was left in ruins. We must find an alternative.

How do I know what happens to my money when I put it into a savings account or spend it in a shop? We do not have a clue whether or how our money adds to all kinds of misery in the world. At the present time money can move without difficulty from country to country or from continent to continent. My pension fund may deposit money into an investment fund that invests the money in Tokyo or New York. Perhaps gold is bought from a bank that in turn supports a loan to a small factory in Singapore or Taiwan. How do I know that a euro, presently in my possession, is not used sooner or later as a payment for child labour in a sweatshop? Perhaps somewhere along the line that same euro was used as cover for a diamond transaction, in which case I helped a warlord in Sierra Leone without knowing it!

A cousin who lives in Uruguay, a reasonably well developed country, has always been able to work, but was never sure if work would be available the next day. He is a designer and is capable of making wonderful things. When the economy was booming he had lots of work, but when the economy declined he was without work. No one needs a lay-out-artist when production declined. He then accepted odd jobs such as driver, or dealer in dog-food, or did whatever work was available.

As time passed on, there were less good years and more lean years. Around the year 2000 the crisis in most South American countries had worsened. At 45 years of age he and many others were in the same situation, no work, no social benefits, no money and no future.

Something is not right here. People consider him to be talented, what he makes is beautiful and he is enterprising. Apparently, Uruguay does not lack skilled people. There are plenty of people like my cousin. It remains to be seen if he will ever be able to work again in order to support himself or to supply his customers. It all depends on a world economy, on which he has no influence.

Just before Christmas 2000 Jorge Alvarez arrived in Spain, illegally. He was hoping to find work there, to earn some money to send home to Ecuador, to his wife and two little daughters. Jorge had to borrow money to make the trip. The passage and the services of the smugglers ended up costing him about three thousand euro. He thought that he would be able to earn thirty euro per day in Spain, by harvesting fruits and vegetables. In Ecuador this is a large amount of money. From that money Jorge also had to pay for housing, transport and other expenses. Still enough should be left over to support his family in Ecuador.

Each morning Jorge and twelve compatriots crept into a little bus that took them to a farmer and returned them to their quarters in the evening. In January 2001, only two weeks since their arrival, the little bus was hit by a train on a unguarded railway crossing. Only the driver and a female passenger survived the disaster. Jorge Alvarez died at 25 years of age. His wife, pregnant with their third child, had to pay for all the costs. Jorge Alvarez left her nothing but debts and a hope that went up in smoke. When this accident was reported in the press, it became clear how many Ecuadorians reside illegally in Spain. Also the report showed how bitter their situation is. “Accident Exposes Scam” headlined La Vanguardia.

Horacio, my host welcomed me with open arms. I gave him a few books about money I had taken with me. He accepted them with great enthusiasm. He insisted that he had to pay for those books. I did not understand: it was a present! But he kept on insisting: "I want to pay you in créditos, you can use them yourself." While talking Horacio produced his wallet and counted all kinds of multi-coloured pieces of paper. A large green one represents 10. A smaller orange one 5. But also a blue one for 10. And another yellow one for 5. All sorts of different notes!

The next day Horacio took me to the local market. I saw a small kiosk of a man with a pointed moustache selling food. I then realised that I had an appetite. I approached him to buy a bun. Just when I was about to pay him, Horacio intervened. "Are you thinking about your créditos?", he asked me. I was looking for my pesos out of habit. Mr. Moustache was quite willing to accept my créditos. Gradually I discovered that just about everybody in the market accepted créditos. There was a lively trade going on and just about everything was available for créditos.

Mary Akoth lives in the town of Ahero, situated in the poor countryside of Kenya. She is thirty eight years old and has five children. Her husband deserted her years ago. After that her life became a daily struggle to support her family. In 1992 she became a member of the Nyando Women's group. She received advice and a loan of 200 Kenyan shilling (about 4 dollars worth). With that money she started a small street business in chapatti's and tea. Quite quickly she made a profit of 40 shilling a day.

Half a year later she added the sale of rice and beans. Her clientele increased rapidly. She asked the town council for a small plot of land to put up a kiosk. Soon she employed someone to assist her and after a short while she added two more people to her enterprise. With the aid of a loan of no more than 4 dollars she had become the owner of a profitable business. She now makes a profit of 8 dollars a day. She can pay the rent and send her children to school. She says that she has rediscovered her dignity.

Source: Micro Credit Summit 1997-Institutional profiles

As a high school student I enjoyed nature as it was then, without being truly aware of it. The waving wheat fields before the house, the polder where in summer the little fish splashed in the canals and the birds that attacked you when you infringed on their territory. I took it for granted until I was confronted with municipal plans to construct a highway and a huge shopping mall right in those lovely wheat fields. I successfully organised a resistance movement against these megalomaniac plans of a town council that saw themselves as the prophets of progress.

On a meeting about these plans I was addressed by an older inhabitant, Mr. Roelofs, who told me: "These delusions of grandeur and this building craze are stimulated by the interest-bearing monetary system," he argued. He told me, as I now tell others, how the interest-bearing money plays a part of its own in the economy and how it forces us to act in a way we would rather not. "We most certainly have a choice," he insisted, and bombarded me with a story on interest free money that made little sense to my sixteen year old self. But there is one story I always remembered. Mr. Roelofs told me about a village in France, Lignières-en-Berry, where local money with a holding tax had wiped out the national currency, and stimulated local trade at the same time.

The notion of changing the monetary structure has haunted me ever since. Later, when I was confronted with social movements and socialist parties, it often came to mind. What those folks in France had done, was something I heartily approved of: a movement not based on conviction or power, but nevertheless one that successfully competes with the capitalist system in its essence: the monetary system.

Unfortunately, I saw no real use for these ideas about interest-free money, because at the time I still believed in the economic theory that claimed that lower interest rates inevitably lead to more economic growth. And I did not want more economic activities in an environment that was already hard-pressed. Yet I continued to ponder these issues. Over time I gained more knowledge on the subject, for example, on the Egyptian grain silos and on other forms of money without interest and I became ever more charmed of the idea that you can try and realise change by renewing the basic underlying principles, the steering mechanisms of a system.