My Sister’s Money Aha

Twin lotus 500My sister and I are like clones of one another. We know what the other is going to say before it’s said. We laugh at the same things. In fact, we laugh the hardest with one another. Our beliefs are nearly identical, and we hold the same values.

Except in one area. My sister cannot fathom my fascination with money. Why would I want to be a money coach? It is beyond her. Money is so boring! There are so many more important things to think about.

Until the other day.

We were talking politics again, and ended up on a discussion of big corporate chains and the loss of unique little shops in both of our neighborhoods.

I started to tell her about my recent discovery related to the growth of corporate chains, and why such growth was necessary. I had always wondered why the economy needs to grow continually. What else in nature grows without stopping? The only answer I could think of was cancer.

So how could it be healthy for our economy to grow forever?

It just didn’t make sense to me.

Then I found Bernard Lietaer and Charles Eisenstein – writers about the “new economy.” They were finally able to answer my question about growth.

And this is it: the reason we need continual growth is because of interest charged on everything and how this system of lending really works.

Did you know that the majority of the cost of everything we buy consists of interest? Say you buy a winter coat. The retail store is paying interest on its loans; the truck company that delivered the coat to the retailer is paying interest on their loans; so is the company that sews the coat, the company that makes the buttons, the textile company that dyes the wool, and the farmer who raises the sheep.

Everyone pays interest, and that gets passed on to the buyer (that’s us!).

And here’s what I found beyond belief. When the bank lends the money, the amount of the loan is “created.” But the interest to pay back the loan is not created. Therefore, the economy must grow so that the businesses who borrow money can pay back the loan and the interest.

In other words, when lenders charge interest (BTW, called “usury” in the past, and illegal!) we create an economy that must grow.

What this means for you, me, and our world

The constant need for growth is rapidly destroying our environment! When we live in a system that requires growth in order for businesses to succeed, then cutting down the rainforest becomes more financially viable than preserving it.

Our current system of lending and interest actually creates competition and scarcity in our economic system. If the economy doesn’t grow at all or doesn’t grow enough, then not all the borrowers will be able to pay back their loans + interest. Only some of them will.

This means there is only enough room for a certain number of businesses to succeed, and the rest must fail. It doesn’t matter how much we want to create something different, as long as we are entrenched in the current system, it will continue to be a scarcity and competition system.

Under our current system, the rich are getting richer and the poor are getting poorer. The awful reality is that the poorer you are, the more you will pay interest versus earn interest. The end result is the concentration of money into the hands of fewer and fewer people, which is exactly what we are seeing in our global economy.

Enter the socially-conscious individual and the new economy

You’re probably already supporting the “New Economy” without being aware of it!Twin pears 500

Have you used Craig’s List to buy or sell used items? Or maybe you checked out AirBnB last time you vacationed and found it more satisfying than a resort or hotel.

These are examples of ways to use existing resources to support a lower-growth economy that still satisfies our needs without having to extract resources anew. An important feature of the new (low-growth) economy is shown here – lower growth does not necessarily mean austerity! If fact, we could actually provide for more human needs in the new economy! (But more on that in another post.)

Another example of moving from the interest-based economy to the new economy are the large trade barter associations that circumvent the need for interest-bearing loans from a bank. According to the International Reciprocal Trade Association there were more than six hundred commercial barter exchanges in the world in 2010.

Other options include member-owned banks, state-owned banks, mutual credit systems such as LETS (local exchange trading systems), credit unions, and time banks. There are also some online trade and favors groups starting to grow in membership, such as and, respectively. These are just a few examples of how to unplug from the “death economy” and create a brighter future for ourselves and the coming generations.

After I told my sister about all this, she was incredulous.

“I had no idea,” she said. To which I replied, “That is why money is interesting, and why we need to understand it!”

If we – the women of the world, the environmentalists, the believers in social justice and equality – are to “change the world” we must first understand how it currently operates! Then, and only then, can we find ways to change it.

And you know what happened next? My sister asked for more information. Miracle of miracles!


Eisenstein, Charles. 2011. Sacred Economics. Evolver Editions, Berkeley, CA.

Lietaer, Bernard and Dunne, Jacqui. 2013. Rethinking Money. Berrett-Koehler Publishers, Inc., San Francisco, CA.

Greco, Thomas. 2009. The End of Money and the Future of Civilization .Chelsea Green Publishing, White River Junction, VT.

Perkins, John. 2004. Confessions of an Economic Hit Man. Berrett-Koehler Publishers, Inc., San Francisco, CA.

Katie Teague. 2013. Money and Life.


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Kim - June 8, 2017

GREAT article!!!

Sharon - June 8, 2017

Great article, Amy! Thank you for sharing this information and for listing sources for further reading!

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