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During the second week of the AEMS summer school, Thomas Kubo, a German writer and activist gave a lecture about interest rates, accumulation, and inequality. He is also a publisher and longtime colleague of the money reformer Helmut Creutz as well as editor of Creutz’s book "The Money Syndrome. Paths to an Economic Order Free from Crises.” Thomas devoted a lot of his time to Creutz’s theories and books and also shared some of his ideas. With a dynamic discussion and a clear point of view, we ended up having more understanding about the topic he is passionate about.
Among the things Thomas mentioned was the important remark that wealth and debt are distributed unevenly between sectors, and the tools used to describe this inequality can be, sometimes, not descriptive enough. As well as this, it is also a fact that wealth and debt develop in a parallel manner, and this is visualized by two big trends. First, NGOs are on the rise with net wealth and almost no debt, because increasing net wealth means increasing influence and power, and second, Germany has become a net creditor for the rest of the world which means wealth is accumulating in Germany because the GDP of Germany has increased significantly since World War II.
As Kubo indicated, Economics is politics to some extent. Nevertheless, governments and research institutions have no exact estimate of the wealth distribution in a country due to the inability to have a representative sample group and the resistance of the super-rich to reveal their true wealth. This intransparency can be attempted to be solved through the Gini-Index and surveys.
Although the examples were understandable, the different graphs used in the lecture required a little more effort. But the graphs visualized and thus revealed interest data trends. There was a significant decrease in interest earnings and payments from 2008 to 2018, but bank margins have not been affected during this timeframe. Additionally, interest payments increase almost linearly, from the poorest to the richest households, while interest income increases exponentially. Therefore, only the richest households achieve higher interest incomes than payments, making them the winners of the interest game, revealing a big inequality amongst households.
Finally, after having watched the video of the lecture and participated during the Q&A session with him, besides getting to know more about Kubo´s perspective, we could say he is a very concerned, focused, and dynamic person. All doubts were answered in a clear vocabulary and form, easy to follow and connect to other lectures or topics. I am happy to say that we finished the session with the satisfaction of experiencing an assertive and professional discussion.
Written by: Natalia Bellido Ghersi
Based on the lecture "Interest rates, accumulation and inequality" by Thomas Kubo during the AEMS summer school 2021.