The Earth Plus 5%
By Larry Hannigan - Australia 1971
Fabian was excited as he once more rehearsed his speech for the crowd certain to turn up tomorrow. He had always wanted prestige and power and now his dreams were going to come true. He was a craftsman working with silver and gold, making jewelry and ornaments, but he became dissatisfied with working for a living. He needed excitement, a challenge, and now his plan was ready to begin.
For generations the people used the barter system. A man supported his own family by providing all their needs or else he specialised in a particular trade. Whatever surpluses he might have from his own production, he exchanged or swapped for the surplus of others.
Market day was always noisy and dusty, yet people looked forward to the shouting and waving, and especially the companionship. It used to be a happy place, but now there were too many people, too much arguing. There was no time for chatting - a better system was needed.
Generally, the people had been happy, and enjoyed the fruits of their work.
In each community a simple Government had been formed to make sure that each person's freedoms and rights were protected and that no man was forced to do anything against his will by any other man, or any group of men.
This was the Government's one and only purpose and each Governor was voluntarily supported by the local community who elected him.
However, market day was the one problem they could not solve. Was a knife worth one or two baskets of corn? Was a cow worth more than a wagon … and so on. No one could think of a better system.
Fabian had advertised, "I have the solution to our bartering problems, and I invite everyone to a public meeting tomorrow."
The next day there was a great assembly in the town square and Fabian explained all about the new system which he called "money". It sounded good. "How are we to start?" the people asked.
"The gold which I fashion into ornaments and jewelry is an excellent metal. It does not tarnish or rust, and will last a long time. I will make some gold into coins and we shall call each coin a dollar."
He explained how values would work, and that "money" would be really a medium for exchange - a much better system than bartering.
One of the Governors questioned, "Some people can dig gold and make coins for themselves", he said, "This would be most unfair".
Fabian was ready with the answer. "Only those coins approved by the Government can be used, and these will have special markings stamped on them." This seemed reasonable and it was proposed that each man be given an equal number. "But I deserve the most," said the candle-maker. "Everyone uses my candles." "No", said the farmer, "without food there is no life, surely we should get the most." And so the bickering continued.
Fabian let them argue for a while and finally he said, "Since none of you can agree, I suggest you obtain the number you require from me. There will be no limit, except for your ability to repay. The more you obtain, the more you must repay in one year's time. "And what will you receive?" the people asked.
"Since I am providing a service, that is, the money supply, I am entitled to payment for my work. Let us say that for every 100 pieces you obtain, you repay me 105 for every year that you owe the debt. The 5 will be my charge, and I shall call this charge interest."
There seemed to be no other way, and besides, 5% seemed little enough charge. "Come back next Friday and we will begin."
Fabian wasted no time. He made coins day and night, and at the end of the week he was ready. The people were queued up at his shop, and after the coins were inspected and approved by the Governors the system commenced. Some borrowed only a few and they went off to try the new system.
They found money to be marvellous, and they soon valued everything in gold coins or dollars. The value they placed on everything was called a "price", and the price mainly depended on the amount of work required to produce it. If it took a lot of work the price was high, but if it was produced with little effort it was quite inexpensive. (snip) ...
Read and/or listen to the complete article at this website: