CHAPTER ONE FOUR BASIC MISCONCEPTIONS ABOUT MONEY EVERY DAY almost everyone on this planet uses money. Yet few people understand how money works and affects their lives directly and indirectly. Let us, therefore, take a closer look at what money is and what would happen without it. First, the good news: Money is one of the most ingenious inventions of humankind, as it helps the exchange of goods and services and overcomes the limits of barter, that is, the direct exchange of goods and services. For example, if you live in a village which relies entirely on barter, and you produce works of art but there is nobody to exchange your artwork with except the undertaker, you will soon have to change your occupation or leave. Thus, money creates the possibility for specialization, which is the basis of civilization. Then why do we have a "money problem"? Here comes the bad news: Money does not only help the exchange of goods and services but can also hinder the exchange of goods and services by being kept in the hands of those who have more than they need. Thus it creates a private toll gate where those who have less than they need pay a fee to those who have more money than they need. This is by no means a "fair deal." In fact, our present monetary systems could be termed "unconstitutional" in most democratic nations, as I will show later. Before going into more detail let me say that there are probably more than just four misconceptions about money. Our beliefs about money represent a fairly exact mirror of our beliefs about the world in which we live, and those are as varied as the number of people who live on this planet. However, the four misconceptions which will be discussed in the following pages are the most common hindrances to understanding why we must change the present money system and what mechanisms we need in order to replace it.
First Misconception: THERE IS ONLY ONE TYPE OF GROWTH The first misconception relates to growth. We tend to believe that there is only one type of growth, that is, the growth pattern of nature which we have experienced ourselves. Figure 1, however, shows three generically different patterns:
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