>>936746Alright, let's say we have a growing economy. 3 members. A has 100 units of currency. B has 100 C has 100.
A lends his 100 to B, who now has 200. There's an interest rate of ten percent.
Since we're discussing growth, we could visualise it by making up services. Let's say A grows and sells vegetables, B provides furniture and the like and C provides entertaining books. Now, lets see how an ordinary year might look.
A sells food for 50 to both B and C, earning him 100 units of currency. B sells furniture for 50 to A and C. C sells books for 50 to A and B. At the end of the year B pays 10 units, as interest, to A.
Now A has 10, plus a claim of 100 on B. B has 190 and C has 100,
B develops his means of production. He can now produce more and better wares. The value of his wares in relation to the products of the other's is higher now than it was before. The others are more inclined to spend their money on B.
The effect will be that C and A will put a greater percentage of their spending to B and B will redieve a greater share of their productivity.
B can now sell furniture for 60 to C and A repectively. A sells food for 60 to B and for 40 to C. C can sell books for 60 to B and for 40 to C. Notice that by increasing his productivity, B has been able to claim a greater percentage of the produced books and food.
Now, A has 0, B has 190 and C has 100. B pays back his loan with interest.
What's impossible about this?
