commodity money such as gold, demurrage is the cost of storing and securing the gold. For paper currency, it takes the form of a periodic tax, such as a stamp tax, on currency holdings. Demurrage is sometimes cited as economically advantageous, usually in the context of complementary currency systems." (wikipedia)
In an interest based monetary system the cost of borrowing is a burden on the borrower. In effect, it is beneficial to retain money instead of spending so that you can accumulate wealth for current and future expenses, both real and imagined. It is a fear based system in which saving for a rainy day is deemed wise. Insurance companies make billions on this societal assumption. Pay now...just in case. Risk adverse financial planning banks on this idea. And, yes, there are risks and we do need to save for our retirement, unforeseen accidents or economic downturns, etc.
But, when you think about it, why is this so? Why do we fear the unknown and plan so cautiously for the future. Well, I think it is because of the interest-based system itself. It generates fear in the belief that storing funds is the only way to be prepared for what may come to pass. We don't invest in preparing for the future, we invest in not preparing for the future...not creating a better future. This makes no sense.
In a demurrage system, the reward for accumulating wealth is gone. In this system it is a burden to store money since its value or purchasing power depreciates over time. Distributing currency becomes the ideal. If there is a cost to accumulate wealth, what would happen? Would more money flow through business and the community? Would more lenders lend? Would entrepreneurship increase? Would we invest more in the tangibles, better systems, infrastructure, services...in each other?
Who benefits from interest? Certainly not the majority who hold the burden of interest payments. It is a fundamentally flawed system in which the wealthy get wealthier. I wonder how much currency is locked away in private holdings, only used to exert influence and control over the majority, domestically and internationally.
Governments would benefit from the demurrage fees placed on currency holding, as would other institutions. Imagine if we actually lived in a gift-based society where wealth, influence or wisdom were not determined by the size of your bank account but by by the size of your generosity.
Do I think our bankers are crooks? Definitely. There are other options to our current financial system to consider and demurrage is one of them. We just need to think differently. Giving is definitely better than taking, as any volunteer will admit. We just don't place real value on it yet....and we should.