Interview with Helmut Creutz on the English edition of his book, The Money Syndrome
What do readers learn in The Money Syndrome that they do not read in standard economics books?
Readers learn everything essential about money and its functions. You might wonder why that should be of interest to you. You might say that you deal with money on a daily basis, and that there is nothing left for you to learn. Yet, most of us do not grasp the problematic effects of our contemporary money system. Above all, it is the aim of the book to educate readers about the systematic flaws of a monetary system that operates with permanently positive interest rates. And that is something you do not normally read about in standard economic textbooks or magazines. By the way, an economist classified The Money Syndrome as a standard work immediately after its release in Germany. Anyway, while reading the book, you will learn in detail that:
- Financial assets accumulate exponentially as a consequence of the compound interest effect.
- The indebtedness of private and public households and the economy must grow correspondingly, as financial assets must flow back into the economy as credit.
- Interest flows grow similarly in the course of escalating financial asset and debt accumulation. However, financial assets are unequally distributed.
- Consequently, the escalating interest flows reallocate capital from those parts of the population that pay more interest than they receive to those that receive more than they pay.
- The divide between the rich and poor widens.
- Economists and politicians only regard economic growth as a solution to prevent the divide between the rich and the poor from widening.
- However, given the finite resources of this planet, constant economic growth – demanding a perpetual increase of production and consumption – is ecologically unsustainable.
- Above all, The Money Syndrome not only provides an in-depth analysis of the negative effects of constantly positive interest rates, but also presents a solution: Stabilize the monetary flow by introducing carrying costs to money, as argued by Silvio Gesell.
How did you come up with the idea of writing the The Money Syndrome?
I have been active in environmental and peace initiatives since the 1970s. Back then, I was already looking for reasons why politicians and economists demand constant economic growth despite its devastating consequences. In 1980, a reader of my books gave me a hint. He claimed that underlying processes in our monetary system explain why we ‘need’ perpetual growth. Initially, I was very skeptical. However, trying to show the reader that he was mistaken, I actually discovered that plenty of statistical evidence suggested that he was right! In 1984, I published my first research results in the “Journal for Social Economy” (“Zeitschrift für Sozialökonomie“). One year later, I published a more detailed account of my findings in the article “Growth Till Self-Destruction” (“Wachstum bis zur Selbstzerstörung“). Further research and specification of my ideas led to the first edition of The Money Syndrome in Germany in 1993. Since then, the edition has been revised and translated into several different languages. The work for the French publication was finalized in 2008.
What surprised you the most while researching and writing The Money Syndrome?
Examining statistical series, I was very surprised about the developments in the real economy compared to the expansion of financial assets and debts. Capital and debts grow exponentially; that is, much faster than the real economy. However, this has profound social implications. You can read about that in more detail in the book. I was also very surprised that, in the standard economic textbooks I’ve read, very few economists have dealt with the topic. Actually, Keynes was the only mainstream economist I found who discussed the negative effects of our monetary and interest system in any depth. Interestingly, Keynes based his statements on findings by the economic maverick Silvio Gesell. Gesell had already written about the deficiencies of our monetary system 100 years ago! Nonetheless, university professors were not concerned with the redistribution of capital through positive interest rates. That situation has changed a little bit. For example, Professor Jürgen Kremer has recently proven my assertions with the help of long-term calculation models.
What do you expect from the English edition of the book?
I hope that social activists, environmentalists, and economists will gain new insights when reading the book. My work illustrates that systematic errors inherent in our monetary system prevail. These must be removed to effectively promote social justice and environmental sustainability. Next, I hope that The Money Syndrome will contribute to the discussion about ways to promote interest rates oscillating around 0%. Such a discussion was launched last year by professors such as Greg Mankiw from Harvard and Willem Buiter from the London School of Economics. In saturated economies, 0% interest rates are not only necessary to stabilize economic activity, but also to prevent a further accumulation of capital and explosion of debts due to the compound interest effect. In short, I hope that the book will help spread the knowledge about how economic stability, social justice, and peace in this world are essentially threatened by systematic errors in our monetary system. Our future survival requires that we recognize this mistake and correct it!
The interview was kindly provided by Felix Spira
to our homepage dedicated to the work of Helmut Creutz about the basics of our monetary system. I’m happy to announce that the English edition of THE MONEY SYNDROME is now available. The German version of this book “Das Geldsyndrom” was first published in 1993 after twelve years of research that the author Helmut Creutz had undertaken. Since then thousands of readers got acquainted with his findings and the book became an indispensable work of reference for all those, who are convinced that our economic system should be thoroughly reviewed and reformed.
THE MONEY SYNDROME mainly deals with the German national economy since the end of World War II with a few side glances at other national economies. The English speaking reader might consider the emphasis on the German situation a disadvantage of the book. And yet there is another aspect which might make it worthwhile to have a closer look at Germany’s economic development.
In 1948 the German economy virtually started at point zero. There was little left, that could be used as a basis for the reconstruction of the country. It was mainly based on the strong willingness of its inhabitants to get back as soon as possible to a decent and worthwhile lifestyle. The economic development went through an “economic miracle” during the 1960ies until the mid-seventies when the first signs of a saturated economy appeared. The development of Germany’s economy was straight and clear, there have been no major deviations from the capitalist way despite an accent on social market economy and it managed to become one of the leading industrial nations.
The rise and fall of the German economy during the past 60 years is the textbook story of a capitalist society.
The presented material in THE MONEY SYNDROME – economic figures, tables, graphs and charts – allow the distinction of the various stages a capitalist economy is going through. On the example of Germany’s economy the effects and their causes become clear, which in a less comprehensive development of other economies may not be identified as precisely as in the German example, because the various phenomena are associated with assumptions or ideological convictions that may lead astray.
Today we are facing a financial crisis the dimension of which surpasses everything that has been known up to now. We are looking in the abyss of unprecedented squalor and corruption on the one side and on the other side sheer helplessness and fear. It’s time to go to the very roots of economic activity and remember what economy should actually be: a solid basis for a sound culture that respects human rights and dignity and facilitates prudent dealings with the natural environment on planet earth. The “real existing” socialism and capitalism have failed to provide this basis.
THE MONEY SYNDROME offers uncountable stimulations for a genuine new thinking.
… “The Money Syndrome”
The book favours a constructively critical look at economic phenomena and their interrelations with a variety of fields. The main feature of THE MONEY SYNDROME is, that it gives solid and comprehensive evidence of the dysfunctional effects of the existing monetary system which leaves no doubts about causes and effects. Thus it allows the reader to evaluate economic phenomena more precisely and is an inspiration for new viable solutions in vitally necessary areas.
… the author Helmut Creutz
Born in 1923, in Aachen, Germany. From 1949 a Company Manager, since 1972 a freelance Architect and Author, and since 1982 an Economic Analyst. Engaged in anti-war-, environmentalist-, Third World-movements and a founding member of the Green party in Aachen and NRW (a few more details about the author in German).
Books:
- Gehen oder kaputtgehen – ein Betriebstagebuch, Frankfurt/M. 1973, Fischer Verlag (To Go or to Go to Pot – An Employee’s Diary)
- Haken krümmt man beizeiten – Schultagebuch eines Vaters, 1977, Bertelsmann Verlag, (Hooks Ought to be Bent in Time – School Diary of a Father) presented as ‘Book of the Month’ in German television – 1983 Deutscher Taschenbuch Verlag (dtv) [newly revised edition]
- Bauen, Wohnen, Mieten – Welche Rolle spielt das Geld, Hann.-Münden 1987, Gauke Verlag, (Constructing, Dwelling, Renting – What Role does Money Play?)
- Das Geldsyndrom – Wege zu einer krisenfreien Wirtschaft, München 1993, Langen-Müller/Herbig Verlag [1st edition hardcover] – München 2001, Econ Verlag, [6th (5th paperback) edition] (The Money Syndrome. Towards a Market Economy Free from Crises)
- Dieter Suhr, Werner Onken, Helmut Creutz (co-author), Wachstum bis zur Krise, Berlin 1986, Basis-Verlag (Growth Until the Turning Point)
- Die 29 Irrtümer rund ums Geld, München 2004, Signum Wirtschaftsverlag (29 Errors Regarding Money)
Since 1980 Helmut Creutz has held more than 600 public lectures, and published many articles in magazines and newspapers. In 1990 he accepted a teaching position at the University of Kassel and over the years he has been suggested for the Alternative Nobel Prize a number of times.
… Robert Mittelstaedt
I was born in 1943 in Germany, just two years before the end of WW II. I had been a witness of the German recovery from the very beginning in 1948. My focus was not on the economy, but on cultural aspects like the holocaust of the “Third Reich” and to find an understanding of how this could happen and must never happen again. My efforts concentrated on sociological and psychological investigations.
A great inspiration had been the work of Marshall McLuhan to me, over which I stumbled during my stay in Canada in 1966/67. McLuhan’s slogan “The medium is the message” still seems an important clue to me for a deeper understanding which I had been trying to unfold in the field of arts (as a theatre actor) and in adult education. However, truly artistic work became more difficult by the time, getting more and more absorbed by the need to make a living.
At that point, around 1995, I discovered the money topic and, not being conditioned in economic thinking, I quickly understood the message of the existing medium money, the cultural distortions it triggers and which most economists are totally unaware of. In my view, THE MONEY SYNDROME by Helmut Creutz is one of the best contemporary books on the topic.