Money is merely a token of our contribution towards society. It records how much work we have done, and how much importance the rest of society places on our work (our hourly rate, or annual salary.) That is all money should be, nothing more. Over time the purpose of money has been distorted. Using mechanisms such as interest and inflation I believe the system has been abused by the rich in order to keep poorer people poor.
The first thing I would like to abolish is interest. Interest merely a way of charging an extortionately high fee for lending money. In the case of credit cards it is a way of charging you multiple times for borrowing only a single amount of money. If you spend £500 on your credit card today and pay the minimum payments for the two few years you end up repaying that amount many times for borrowing money only once.
Interest is a destructive financial concept. In order to pay off our loans from last year we must pay the sum of money borrowed plus a percentage. The amount owed increases relatively as more money is put onto the load in the form of interest. As a consequence each year our nation has to produce X% more than it did last year in order to pay off what we spend last year + the interest on top of it. This inflation means that prices must constantly increase. Our wages rarely match inflation so we become relatively poorer each year.
When politicians talk about inflation being constant it is misleading. As inflation is a percentage it means that costs increase by a percentage each year. In the first year 10% of 100 would be 10, in the second year 10% of 110 would be 11, in the third year 10% of 121 would be 12.1, and so on. Eventually we reach a point where our country cannot possibly afford to pay its debts and we experience a recession.
I don't believe that banks could not possibly survive under such circumstances. It would merely force them to be more open about the fees incurred by taking out a loan with them. If for example you borrowed £1,000 from a bank you might need to pay back the full amount plus a fixed fee.
Society can continue using the inflation model for an unknown period of time, after that it becomes impossible to produce more than the previous year and it will fail. Nobody knows when this will happen, but until it does I feel that the wealthy are exploiting the model to make themselves even richer. Having to constantly produce more each year to pay off a previous year's debt is also detrimental to the environment, as we must consume more of the Earth's resources each year in order to maintain growth.
A small observation. I watch the film "An American werewolf in London" last week. At one point a London black cab drops off a couple, the fee for the journy was £1.50, the film was made in 1981. I think most people would be happy for prices to remain the same.
The national debt currently stands at £11.6 billion. We owe this money to The Bank of England, but apparently we own The Bank Of England. So we borrow money from ourselves, and then each year we pay back some of what we owe (with interest), where does all the interest go?
The whole concept reeks of fraud. I think that national debt should just be wiped clean, how can my left pocket owe my right pocket money? Then I think that the right to create money should be taken away from The Bank Of England and returned to parliament.