Interest is not evil. It is inefficient. It turns something that costs zero to manufacture into something that creates value over time. The manufacture of money, especially electronic money, is so profitable we have to spend a lot of effort and money ensuring people produce enough and not too much.
The cost of controlling the money supply is substantial, yet our efforts to control it meet with limited success. We even build inflation into the system in an attempt to reduce the inefficiencies.
We can make the marginal cost of money zero by removing the time value of money. Doing this makes money creation match the manufacturing costs. We create money by making loans. We can eliminate the cost of interest by repaying loans with goods and services. We give people a return on their investment by providing more goods and services for the same amount of money. However, there is a limit to the amount of money we can safely create with any loan. The limit is the value of goods and services we can produce from the investment of the money.
The reason interest and some other derivatives of money, like dividends, destabilise money systems is they increase the number of money tokens without a matching transaction of real value. When this happens by many parties, it becomes difficult to keep track of the number of money tokens in the total system. It is the inefficiencies associated with tracking money that makes the financial system costly and unstable. Removing these costs will likely double the productivity of most economies as flow-on effects will appear from the increase in stability.
Zero cost money tokens localise the inflation of the money supply. Some loans may produce too much money beyond the value of the goods and services produced. When this happens, the people with those loans will get a lower return, but there will be no cascading effect as occurs with loans repaid with money.
Making the marginal cost of money zero alters the business case of most investments. Time is no longer a factor. It means, providing the total value of goods produced over the lifetime of an investment is greater than the investment, there is a business case for making the investment. Almost all investments with a long life become worth doing.
It includes most forms of renewable energy. We can make the marginal cost of producing energy close to zero. It increases the capacity of an economy to do things as it reduces the cost of energy to turn things into good and services.
Zero cost money replaces insurance. Instead of paying for insurance we receive the right to create zero cost loans to replace damaged property.
We use zero cost money to fund education, and people repay their education costs with regular tax, not extra taxes or loan repayments.
Removing interest sets up positive feedback systems where we continue to do more with less. It means finite resources go further until we get into a continuous recycling where resources become sustainable through the application of energy.
We implement zero cost loans with distributed apps. Each loan is an app, and each person who has part of the loan has their copy of the app. The apps for the loan form a dynamic network as all copies of the app are connected, and individuals holding the app connect in other ways.
ACT Water Rewards Co-op is an example of such an app.
