The end of chapter three

The need for permanent growth
The chief oversimplified assumption in the tale of the "eleven discs" is that everything carries on during the course of the year in the same way it has been doing. In actuality we don't live in a world where the population, production, and the availability of money are unchanging. In the real world each of these things changes more  or less, and the money system only prevents the first component of growth from paying a dividend. In this regard, the process has ancient and long-forgotten religious roots. In many historic societies, "the first fruits of the harvest" were sacrificed as an offering to the gods.
This dynamic means that it is more difficult for us to discern what's going on in our own relationship to the eleven discs. Nevertheless, in the real material world, the payment of permanent compound interest is a mathematical impossibility (note the following blue paragraph)
Joseph's penny, or the mathematical impossibility of compound interest
Indefinitely compounding interest is a mathematical impossibility in the real world. For example, if Joseph had invested one penny at  4% compound interest the day Jesus was born, by the time  America declared independence its value would have grown to the equivalent of a ball of gold with half the weight of planet earth. By the time this book was written, it would be worth 2252 balls of gold the weight of the earth.
If the compound interest was at 5%, by the year 2002, Joseph's penny investment would have reached the astounding value of 470 thousand million balls of gold the weight of the earth.
From this dynamic perspective, even if real standards of living are unchanged, the monetary system requires continuous economic growth. The level of interest rate establishes the the level of growth needed for the standard of life just to stay the same. This need for permanent growth is something we take for granted, and generally we don't realize that it has something to do with the charging of interest, and with our monetary system.
3)Concentration of wealth
A third feature of the systematic effect of "interest bearing" on society is the continuous transfer of wealth from the great majority to a tiny minority. The wealthiest individuals and organizations own financial instruments which return interest. They obtain a permanent income from whoever requires a loan to make something happen.  The best study on this transfer of wealth from one social group to another was done in Germany in 1982, when interest rates stood at 5.5%. It sorted all Germans into ten groups by income, each encompassing 2.5 million homes or family units. During that year, the transfers between groups was a gross total of 270 billion German marks in interest paid and received. To show this in raw form it's useful to graph the net effects in the form of net transfers (interest received minus interest paid) for each of the ten income groups.

These are net transfers of interest among ten income groups

The main transfer of interest comes from the middle class (categories 3 through 8): each of these groups paid about 5000 million German marks to category 10. Even homes with lower income (category 1), who generally don't have easy access to credit, transferred 1800million marks in interest to the top group. The net effect was that the top 10% of family units received that year a net transfer of 34,200 million marks in interest from the rest of society.
The graph clearly show the systematic nature of the transfer of wealth from the lower 80% of income earners to the top 10%. This transfer was the result of exclusive use of one monetary system, and was entirely unrelated to how intelligent or hardworking the individuals of the study were (which is the classical argument used to justify the great differences among the wealth of different groups)
I have found no study which addressed the transfer of interest between different sectors of US society, but the census give us some idea of the total redistribution of wealth in the last twenty years. The total results are much more serious than in the case of Germany. Unfortunately, information available in the US does not permit us to isolate the wealth transfers attributable to the payment and receiving of interest as it impacts total redistribution of wealth. In the next figure, interest paid and received is compared with all other forms of investment income, such as rents and dividends. This data does not support John Kennedy's thesis that "a rising tides lifts all boats". In the final analysis, not all boats are lifted as much.

In the US, the only income group which has increased its percentage of total income in the last twenty years is the top earning 5% of families. In practice, the next lower income group has maintained its income.  All the rest have suffered a reduction in their portion of the national pie. See the graph of net changes of income from 1975-1995 to understand this better. Between those years, the combined income of all US homes grew from $2700 billion to $4500 billion in constant 1995 dollars. Nevertheless, the benefits of this growth were not   equally spread: the wealth of the richest 5% grew by a spectacular 54.1%, absorbing the majority of that newly created wealth, to the notable loss for the 60% occupying middle income status.

This graph represents the participation of  US homes by income, in the "growth of the national pie"

The cumulative effect of this process explains the surprising imbalance that exists in the US distribution of wealth. Financial wealth is by definition the accumulation of income over long periods of time. The final result is growing financial inequality. At the time the book was written, the top 1% of Americans owned the same amount as the bottom 92%...since that time, the figure has continued to skew to the top. This process of concentrating wealth continues impacting all the levels of wealth. Between 1983 and 1989, the value of equity held by the 500 richest families in the US went from $2.5-$5 billion dollars. On a world scale, the top 447 wealthiest people in the world own more than  the pooled earnings of half the world's population. The three wealthiest individuals on the planet have total wealth equal to the GDP of the poorest 48 countries.
The great panorama of reality
Stephen Jay Gould, the evolutionary scientist described the noteworthy ability of evolution to create, on average, a little more than it destroys. He called it the "Great Asymmetry". The biosphere cumulatively creates complexity with growth, contrary to the action of entropy in physics. The human species participates in this evolutionary process through its economic activity.
Inside this grand perspective, money is the evolutionary information system which demonstrates the contribution of humanity to the "Great Asymmetry" It is the equivalent of "social DNA". The Modern Age gave rise to a monetary system that implemented its ideal of continuous economic progress through hierarchy and central control.
Changes in DNA have a vital role in mutation and evolution, even though they are not immediately visible. In the same way, changes in the monetary system are capable of reconfiguring values and priorities in the post-industrial, post-modern world.

Was it on account of their concern for social justice and stability that the three most important great religions (Judaism, Christianity and Islam) unanimously forbade the charging of interest?
It is interesting to note that since the charging of interest was legitimized, almost all countries created some ways of redistributing the wealth in social programs. Some of these programs, such as Social Security and Medicare, are increasingly criticized for their inefficiency. Would this be a result of the excessive efficiency of the monetary system, the inefficiency of the social networking system, or both?

What follows
 The three indirect consequences of interest- competition, the necessity of permanent growth, and the concentration of wealth- are the hidden engines put in place to get us through the Industrial Revolution. The  good and not-so-good results of this seemingly minor matter of an interest bearing system are attributable to this hidden and misunderstood foundation.
According to a growing consensus, the Industrial Era is coming to an end. We have set out on the unknown ocean of the Information Age. It is curious that currency experiments have arisen  in dozens of countries, without attracting much attention from either the media or academia.  From my point of view, these innovations offer real possibilities for correcting  little by little the excesses and imbalances of the current monetary system without revolution or violence. Even more valuable is the fact that these new complementary currencies, when acting alongside the existing dominant financial system generate new wealth in both the financial and social sectors. They have also demonstrated that it is possible to address some of our most urgent and recalcitrant social problems without the need for new taxes or regulations. It is not coincidental that these new currencies generally don't share the four key features of the current dominant monetary system described in this chapter. For one thing, they don't include the payment of interest.
It is worth remembering the words of John F. Kennedy,
"Those who stand in the way of peaceful revolution ensure the inevitability of violent revolution."