THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

A third systematic effect of interest on society is its continuous
transfer of wealth from the vast majority to a small minority. The
wealthiest people and organizations own most interest-bearing
assets. They receive an uninterrupted rent from whoever needs to
borrow in order to obtain the necessary medium of exchange. The
best study on the transfer of wealth via interest from one social group
to another was performed in Germany during the year 1982, when
interest rates were at 5.5%. All Germans were grouped in ten income
categories of about 2.5 million households each. During that oneyear,
transfers between these ten groups involved a gross total of DM
270 billion in interest payments received and paid. A stark way for
presenting the process is to graph the net effect in the form of the net
interest transfers (interest gained minus interest paid) for each of
these 10 household categories (see Fig 2.1)
The highest interest transfers occurred from the middle class
(categories 3 to 8) which each transferred about DM 5 billion to the
top 10% of the households (category 10). Even the lowest income
households transferred DM 1.8 billion in interest per year to the
highest group. The net effect is that the top 10% of households
received a net transfer of DM 34.2 billion in interest from the rest of
the society during that one year.
This graph clearly shows the systematic transfer of wealth from the
bottom 80% of the population to the top 10%. This transfer was due
exclusively to the monetary system in use, and is completely
independent of the degree of cleverness or industriousness of the
participants the classic argument to justify large differences in
income.
Financial wealth, by definition, is the accumulation of income over
time. The final outcome is an accentuation of the imbalances in
wealth distribution. For instance, 'the top 1% of Americans has now
more personal wealth than the bottom 92% combined. This process of