It is amusing to read on hacker news how money it is wrong to use money as a medium of exchange, how it is supposed to be used to to extract wealth from others just by having it.
>It is not too old, but it is also certainly wrong
Even according to Marx money is only supposed to be a medium of exchange, the fact that it bears interest means that money isn't a neutral medium of exchange whatsoever. What interested me most about money is the fact that this problem isn't even new, founders of religions knew about the problem thousands of years ago. If anything this means they know more about money than we do today. The idea that they are wrong can only be justified by the fact that our method of eliminating liquidity preference is superior to theirs, e.g. because we run permanent inflation to erode exponentially growing debts.
>interest a very efficient way to lend capital.
Maybe in a growing economy but interest is only efficient when it is equal to the growth rate. In any other context the optimal interest rate is always zero because any higher than that prevents investments due to artificially high profitability requirements beyond what is available in the real economy.
>Banning interest is banning investment.
The good news is that neutralizing liquidity preference does not require banning it, anyone who has spent time thinking about liquidity preference knows that banning it is pointless. The obvious solution to neutralizing liquidity preference is to just eliminate the lower bound on interest rates. If liquidity preference is 3% and there is a zero lower bound of 0% you get positive interest even if the economy isn't growing which is highly inefficient and leads to artificial scarcity and underemployment or even unemployment if people pile up jobs onto fewer and fewer people. If the interest rate on cash were -3% or even -6% then the lowest possible interest rate would be 0% or -3% after accounting for liquidity preference.
This is just a floor, just because the interest floor is negative doesn't mean the interest savers get on their deposits must be negative, it just means they have to deposit their money in a less liquid form.
>but banning interest altogether would basically destroy modern capitalism.
Eliminating liquidity preference in the way I argued above would effectively result in the end of modern capitalism and would replace it with something better.