First I came across this article about negative interest spotted in the wild. I was surprised to see this manifest so soon. Things seem to be moving faster.
But then I came across this even more interesting article about negative interest backfiring. Basically a person who just manages to get by from a monthly income and is trying to save for retirement, watches with worry, when any saving she is able to set aside (without investing it in any risk-related monetary tools) shrinks due to negative interest.
There seems to be a conflict between the underlying story of negative interest and the underlying story of prevalent money / economics. The latter is a story of unlimited economic growth – a growth imperative rooted in interest is built into it. Negative interest, however, comes from a story in which money is in a constant state of healthy flow – systems of either steady-state or degrowth economics. It seems that prevalent economic, in its religious clnging to the growth imperative, is trying to subvert negative interest for its own means – to induce economic growth. But apparently that is not working.
To get an idea of what an alternative “retirement fund” could be we need to look past money and to reflect about the functions we expect it to provide. Lets say that when I retire I want to know that I will have a place to live, access to good food and people who will be able to support and care for some of my needs as I become less able to do so myself. What if instead of setting aside money to be able to buy these things in the future I could invest money I currently have in social enterprises that would create infrastructure that could provide me with those services. The level of my investment in these services would determine the level of service that could be made available for me when I retire
Near zero interest rates and a destablized global economy make it very difficult to create money-based savings for retirement. Now imagine negative interest applied in such a world. Instead of worrying about future value of money or watching it lose its value sitting in a savings account would it not be a better option to invest it in social enterprises that would provide me what I would like to have when I retire?
It seems we are arriving at negative interest for wrong reasons – to extend the myth of econmoic growth. That may lead to a deeper problem: that we then dismiss negative interest as a failed tool and reject it in the future. I hope we can realize and discern that the conditions are not yet right for negative interest. That it is better understood as a tool that needs to be applied in the context of other tools and changes … in service of transforming the underlying story of money instead of prolonging the one that is currently failing us.