End of Money and the Future of Civilization

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Book: Thomas Greco. The End of Money and the Future of Civilization. Chelsea Green, 2009


Description

From the publisher:

"The End of Money and the Future of Civilization considers the money problem within the broad historical and political context that has made the control of money and banking the primary mechanism for concentrating power and wealth and the nullification of democratic governance.


It provides the necessary understanding for entrepreneurs, activists, and civic leaders to implement approaches toward monetary liberation, approaches that empower communities to restore their environments and democratic institutions, and begin to build economies that are sustainable, equitable, and insulated from the financial crises that plague the dominant systems of money, banking and finance.


It provides specific design proposals and exchange-system architectures for local, regional, national, and global financial systems, and offers strategies for their implementation prescribing actions that grassroots organizations, businesses, and governments will need to take to achieve success."


By the author:

"The End of Money and the Future of Civilization is my fourth book in which I address what I refer to as “the money problem.” My intensive focus on the particular realm of money, banking and finance, which spans a period of more than three decades, has been motivated by an early realization of the crucial role it plays in determining the world order and the course of human events.

The simple facts are that money and banking have been politicized and structured to achieve the centralization of power and the concentration of wealth, to circumvent democratic processes, and to manipulate the populace. The substance of modern money is simply credit and we have allowed our credit to be privatized and monopolized. Money makes the material world go round, and whoever controls money/credit are in a position to control everything else—our economy, our politics, our technologies, our entertainment and news media, and our culture.

I strongly believe that if we are to achieve peace, justice, personal freedom, environmental regeneration, a sustainable economy, and a dignified life for all, it is essential that we reclaim “the credit commons” from the money monopoly. That is the key to empowerment of communities and the way toward government of the people, by the people and for the people.

My choice of title for this book is not at all based on wishful thinking. It expresses what is actually happening NOW. The recent emergence of commercial “barter” exchanges, mutual credit clearing associations, private voucher systems and community currencies represent the early stages of a process of power devolution that will inevitably lead to the end of POLITICAL moneyand the emergence of economic democracy. But the end of money does not refer ONLY to the end of political money. It refers also to the evolutionary process by which the essential nature of money has changed over the past two or three centuries—from commodity money, to symbolic (redeemable paper) money, to credit money. Of course, the reciprocal exchange process will continue, but in a different way from before, a way that does not require the use of conventional money or banks. The ultimate stage in the evolution of money and the exchange process is the offset of purchases against sales, i.e., direct credit clearing amongst buyers and sellers, and the widespread application of this process does indeed mean, in a very real sense, the end of money.

The word evolution may connote passivity, but in the realm of human-contrived systems, it involves the application of creativity, intelligence, and will. This particular evolution depends upon responsible ACTION on our part to assert our own credit power by organizing and promoting the rapid deployment of distributed (non-monopoly) credit clearing circles in ways that maintain local control within globally useful networks."


Interview

See also: Thomas Greco on the End of Money

Interviewer is Michel Bauwens.


Thomas Greco:

1. There seems to be a fast-growing monetary reform and transformation but there are also a confusing number of different approaches being proposed. How can one find one's way in these various proposals and how do you specifically position yourself in this field.

TG: That is precisely the kind of question my book answers in detail. First of all, one needs to clearly distinguish between two basic approaches to solving what I broadly term “the money problem,” then secondly to consider the architecture of the various exchange systems and currencies that have been tried or proposed.

The dysfunctional nature of the dominant global system of money and banking has for a long time been apparent to anyone who has cared to look at it. Now, in light of the present financial meltdown, it has become painfully obvious to virtually everyone.

Monetary reformers have always been around. They have been warning that the system needs to be fixed, and some of them have even had some good ideas about how to fix it, but their voices have mostly been ignored or drowned out by the vested interests who have promoted an orthodox doctrine that works to their advantage. During periods of severe financial or economic distress, such as the present one, some reformers are able to get space in the media, so today we are hearing calls for a variety of political solutions—abolition of the Fed, direct issuance of money by the government (the “greenback” solution), a return to the gold standard, tighter regulation of banks and financial institutions, etc.

Some of these might have a short-run salutary effect, if they could be achieved. But in my view, statist and political approaches are at best futile and at worst inclined to take us further in the wrong direction toward more centralized control and still greater concentration of wealth. They are futile in that the political process in most countries of the world has long since been removed beyond our grasp. If the people are to regain political control, we will need to first assert our economic power, especially our “money power” by organizing ourselves to mediate the exchange process apart from the banking cartel and without the use of politicized national currencies. Putting the money monopoly under new management will not solve the fundamental dysfunctions that are inherent in it. The “greenback solution," for instance, does nothing to eliminate deficit spending and inflation, which are enabled by legal tender laws. So long as political currencies, however issued, are legally forced to circulate at face value, the abusive issuance of money, the debasement of national currencies, and the centralization of power will continue, and the empowerment of communities, relocalization, and the shift to a steady-state economy will be thwarted.

People need to disengage from the systems and structures that disempower communities and enable a small elite to use the present centralized control mechanisms to their own advantage and purpose. Primary among these is the global monetary and financial regime (the structures of money, banking and finance). I favor an approach that is based on voluntary, free market and community-based initiatives which enable people to transcend the money monopoly and the “war machine.” Socially responsible businesses and social entrepreneurs have a crucial role to play in organizing these parallel systems that can shift enough power to achieve greater measures of independence and self-determination and bring enormous benefits across the board—social, political, economic, environmental, and cultural.

With regard to the various alternative exchange systems and community currencies that have been tried, almost all have been designed to solve secondary problems, or have been lacking in scalability. I devote several entire chapters to exploring those deficiencies as well as highlighting the specific characteristics necessary in a truly empowering exchange system. The primary objective of an exchange alternative should be to utilize the credit of local producers to mediate the exchange of goods and services locally. The bottom line is that non-bank exchange system credits and community currencies must be issued in ways that monetize the value inherent in goods and services being exchanged. This means they must be “spent” into circulation, not “sold” into circulation.


2. Your book's title suggests the end of money, yet you also advocate a 'credit commons', which most people would associate with lending money to each other. So, could you specify: do you advocate the abolition of money, or not, and if a credit commons is not about lending money, what is it?


TG: My choice of title for this book is not at all based on wishful thinking. It expresses what is actually happening NOW. The recent emergence of commercial “barter” exchanges, mutual credit clearing associations, private voucher systems and community currencies represent the early stages of a process of power devolution that will inevitably lead to the end of POLITICAL money. But the end of money does not refer ONLY to the end of political money. It refers also to the evolutionary process by which the essential nature of money has changed over the past two or three centuries—from commodity money, to symbolic (redeemable paper) money, to credit money. Of course, the reciprocal exchange process will continue, but in a different way from before, a way that does not require the use of conventional money or banks. The ultimate stage in the evolution of money and the exchange process is the offset of purchases against sales, i.e., direct credit clearing amongst buyers and sellers, and the widespread application of this process does indeed mean, in a very real sense, the end of money.

Reciprocal exchange and finance are necessary aspects of any developed economy. As I explained above, money is nothing but credit. It is our common or collective credit that supports any generally used payment medium, including political money. We have allowed the credit commons to be privatized. What I advocate is the reclamation of the credit commons from the money and banking monopoly. We have seen how that can be, and is being done within cashless trading systems like LETS and the commercial “barter” exchanges that provide credit clearing services. Of the existing examples, the Swiss WIR cooperative trading circle (now called the WIR Bank) has been the most impressive for its longstanding success. These systems involve the allocation of credit, but they do not require the use of money as we have known it. However, the collective credit balances in the accounts of such a system can be thought of as a kind of internal currency. But it is one that is not “loaned” into existence, but comes into being in the course of trade among the members. If properly organized, it provides credit on a more honest, transparent, and democratic basis.


3. How do we get from the current financial system, via all the current experiments with local money, to a fundamentally different system .Do you have any concrete proposals for a transition?

Yes, the book contains multiple proposals and prescriptions addressed to various entities including individuals, businesses, social entrepreneurs, and various levels of government. These cover both system designs and implementation strategies. Perhaps the most promising and easily attainable is the bioregional development plan that I outline in Chapter Sixteen.

This is a multi-stage plan involving diverse segments of the community. It is designed to accomplish the following:

  1. Institute measures that promote import substitution
  2. Provide an alternative payment medium, independent of any political currency and banking establishment
  3. Issue a supplemental regional currency
  4. Develop basic support structures that strengthen the local economy and enhance the community’s quality of life
  5. Develop an independent value standard and unit of account


The keystone of this plan is the organization of a mutual credit clearing association in the second stage.

I also describe the emergent web based exchange systems and slight modifications that are required to make them fully functional as non-governmental exchange and finance alternatives.


4. How do you reply to the traditional critique of the left, which says that money is just an external phenomena of our economic system of capitalism, and that changing just the money won't effect any fundamental change

If that is, indeed the “traditional critique” then I must conclude that the “left” is both lacking in imagination and does not understand the real basis of power. What is capitalism, and what is the basis of power within a capitalist system? As the saying goes, “the devil is in the details.” Why get bogged down in ideological debates when there is an obvious “elephant in the living room?”

To cut through all of the obfuscatory rhetoric, the main problems with the political money and banking system (and the relevant principles that need to be applied) are as follows:

1. The issuance of money on improper bases, mainly government debt, real estate, and assets of questionable value.

Principle: Money should be issued on the basis of goods and services already in the market or shortly to arrive there. All other needs (capital formation and consumer spending) should be financed out of savings.

2. Legal tender laws that force acceptance at par of debased political currencies. Principle: Legal tender laws should be abolished. Only the issuer of a currency should be required to accept it at par. In the absence of legal tender, debased currencies will either be refused or pass at a discount in the market.

3. The charging of interest on credit money that is created as “loans.”

Principle: Money should be created interest free as a generalization of trade credit that facilitates the exchange of goods and services.

If the system cannot be reformed, then new systems need to be created that apply the correct principles.


5. Your book seems very inspired by U.S. history and developments, and also seems to share a strong libertarian critique of the state, while audiences in Europe would be a lot more sympathetic if not nostalgic for the welfare state and its social protections. How international and global do you think your prescriptions are? What kind of reactions have you gotten in other continents that the U .S., say Europe and Asia?

TG: The prescriptions that I offer in my book are both comprehensive and global. The story of power in modern history has been pretty much the same throughout the world. The central banking, political money system has been established in virtually every country and in fact originated in Europe. What most people have failed to recognize is that, regardless of the nominal form of their government, their political power has been neutralized and exhausted by the privatization and misallocation of credit money.

Up to now, Europeans have managed better than Americans to preserve their hard won state benefits, but there too, these benefits are steadily being eroded and that trend will surely continue. My argument is not with government-sponsored social programs, per se, and certainly not with “social protections.” There is a legitimate role for governments but people seem confused about what that role should be or at what level the various government functions should be carried out. But it would be a digression for me to speak about general political philosophy. My objections are to the centralized control of credit money, whether that be by the state directly or by a nominally independent central bank. It is undemocratic, corrupting, and fraudulent. It misallocates credit, making it both scarce and expensive for the productive private sector while enabling central governments to circumvent, by deficit spending, the natural limits imposed by its above-board revenue streams.

All government programs, including social programs, need to be funded by legitimate state revenues, not by the underhanded means of monetary debasement. Centralized control of credit money and the imposition of legal tender laws enables the hidden tax called inflation.

Further, that system creates a small privileged class that is able to dominate economics, politics, and virtually everything else in the material realm. If we desire to have a peaceful world that can provide a dignified life for all, power must devolve to the people and their communities. That cannot happen so long as we allow the money power to be privatized and undemocratically allocated. Fortunately, we the people have in our hands the means of our own liberation. It is the power to allocate our credit directly without the use of banks or political forms of money. How to effectively assert that power is the main theme of my book." (via email, May 2009)




Contents

1 My Purpose and My Journey

My Personal Journey • Seeds of Disillusionment • Awakening • In the Wake of Inflation • E.C. Riegel • Why Yet Another Book?


2 Mega-Crisis and Metamorphosis — Can Civilization Be Saved?

Prospects and Prognostication • Exponential Growth • Limits to Growth • Paradigm Shift • Metamorphosis • The Egg, the Caterpillar, and the Butterfly • Get With the Program


3 The Contest for Rulership — Two Opposing Philosophies

Elitist or Egalitarian? • The Contest in American History: Monarchy or Republic? • Power by Other Means


4 Central Banking and the Rise of the Money Power

Central Banking, an Unholy Alliance • The Bank of England • Central Banking in the United States • The First Bank of the United States • Andrew Jackson and the “Bank War” • The Free Banking Era • The Federal Reserve • Central Banking Spreads around the World


5 The New World Order

The Power Behind the Central Banks • A Merging of Interests • Wars, Internal and External • Money Power, the Key Element in the New World Order • Erosion of National Sovereignty


6 Usury and the Engine of Destruction

Monetary Stringency, Past and Present • Increasing Instability • The Magic of Compound Interest • What’s Wrong with the Global System of Money and Banking? • How Debt-Money is Dysfunctional • Three Aspects of Money Dysfunction • Moral Arguments, Laws, and Practical Solutions • Keys to Transcendence • Exchange and Finance—Two Distinct Credit Functions


7 The Nature and Cause of Inflation

What Is Inflation? • Who Has the Power to Inflate? • Improper Basis of Issue by Banks Is Inflationary • Government Deficits and Inflation • The German Hyperinflation—A Classic Case • How the Inflation Was Ended • Constraints Upon Debasement of the Money • Responding to Inflation


8 The Separation of Money and State

The Separation of Church and State—A Comparison • The Disestablishment of Monetary “Religion” • Two Meanings of “Dollar” • Delinking from the Dollar as a Payment Medium • Delinking from the Dollar as a Measure of Value • Stable Value Reckoning • Toward Freedom of Exchange


9 The Evolution of Money — From Commodity Money to Credit Money

What We Don’t Know Is Hurting Us • Kinds of Economic Interaction • “The Ladder of Economic Civilization” • The First Evolutionary Step—Barter to Commodity Money • Commodity Money • Symbolic Money • The Second Evolutionary Step—From Commodity Money to Credit Money • Two Distinct Kinds of Money—Fractional Reserve Banking • Redeemability Abandoned • Checks and Checkable Deposits Displace the Use of Banknotes • Gold Versus Credit Money—A Comparison • How Credit Money Malfunctions


10 The Third Evolutionary Stage — The Emergence of Credit Clearing

Banks and the Credit Clearing Process • A Confusion of Language • Particle or Wave? Thing or Relationship? • Clearing Through Banks Versus Mutual Credit ClearingDirect Credit Clearing Makes Conventional Money and Banking Obsolete


11 Solving the Money Problem

The Basis of Monetary Dysfunction • Reform or Transcendence? • Emerging Exchange Alternatives • Separating the Functions of Money • Back to Commodity Money? • The Unit of Account Versus the Unit of Currency • The Measurement of Value • Proper Relationship Between Commodities (Gold/Silver) and Credit • Confusion Caused by Legal Tender Laws


12 Credit Clearing, the “UnMoney”

What Is Credit Clearing? • A Simple Example of Clearing among Banks • Settlement of Accounts • Mutual Credit Clearing Systems as Clearing Houses • Direct Credit Clearing — A Simple Illustration Using Four Accounts and Ten Transactions • Balance Limits and Settlement • Providing Surety of Contract • An Insurance Fund


13 The State of the Alternative Exchange Movement

Two Currents of Alternative Exchange • The Tucson Experience • Why Exchange Alternatives Fail to Thrive • Failure of Reciprocity • Inadequate Scale and Scope of Operation


14 How Complementary Currencies Succeed or Fail

Architecture of the Currency Itself • Principle 1: Who Is Qualified to Issue Currency? • Principle 2: On What Basis Should Currency Be Issued? • Principle 3: How Much Currency May Be Issued By Each Issuer? • Implementation Strategies • The Situational Context • WIR • Social Money in Argentina


15 Commercial Trade Exchanges—Their Present Limitations and Potential Future

Limiting Factors • Limited Scale and Scope • The Value Proposition • Operations and Agreements • Proposed Remedies • The Real Deal—Credit Clearing Services • Tapping the Vast Potential Market • What About Taxes? • An Eventual Cashless Trading Network


16 A Regional Economic Development Plan Based on Credit Clearing

Approaches to Community Economic Development • Stage I: Mapping the Territory and Import Substitution • Stage II: Mutual Credit Clearing Provides an Alternative Means of Payment • Sage III: The Credit of “Trusted Issuers” Provides an Alternative Currency for Regional Circulation • Stage IV: Support Structures for Localization—Saving, Investment, Finance, and Education • Stage V and Beyond: Transition to an Objective Measure of Value and Accounting Unit


17 The Next Big Thing in Business: A Complete Web-Based Trading Platform

The Convenience of Cards • Improving the Exchange Process—Challenge and Opportunity • Significant Trends and “Disruptive Technologies” • Strengths and Vulnerabilities of Political Money and Conventional Banking • From Disruptive to Sustaining—Moving Upmarket • The Emergence of a Complete Web-Based Trading Platform • Essential Components of the Web-Based Trading Platform • Completing the Web-Based Trading Platform


18 Organizational Forms and Structures for Local Self-Determination and Complementary Exchange

Toward Economic Independence • The “Banjar” and the Balinese Governance Structure • The Mondragon Cooperatives • Ways of Organizing Credit Clearing Exchanges • Corporations • Limited Liability Companies and Limited Liability Partnerships • Mutual Companies • Scale of Organization


19 The Role of Governments in Establishing Economic and Financial Stability

What National Governments Should Do • Objectives • Rationale • Legislative Proposals in Brief • The Role of State, Provincial, and Local Governments • An Early Example of a Local Currency


20 Exchange, Finance, and the Store of Value

The Store of Value • Saving and Investment • Liberating Saving and Investment • Debt Claims Versus Equity Claims • A Shared Equity Mortgage • Savings and Investment within Complementary Exchange Systems


Excerpts

The State of the Alternative Exchange Movement

Excerpt from End of Money, Chapter 13,

Thomas Greco:

Exchange alternatives are not entirely new. Indeed, in times past, there were many different exchange media that circulated simultaneously—and for a time, each bank was responsible for the issuance and redemption of their own banknotes. There are also numerous historical precedents for nonbank curren¬cies—such as the 1930s Great Depression–era scrip issues, and the mutual credit clearing system that was organized in Switzerland as the WIR Economic Circle Cooperative (since renamed WIR Bank). There are entire catalogs that list the many kinds of privately issued scrip, vouchers, notes, and coupons that have circulated as payment media. Some of these have been described in my earlier books.140

The current wave of innovation and implementation of exchange alter¬natives dates from around the early 1970s with the advent of commercial “barter” exchanges (properly called “trade exchanges”). This was followed a few years later by the grassroots emergence of mutual credit clearing asso¬ciations (LETS), Time Dollars, and various local currencies. From that time onward, we have seen a rapid proliferation, all over the world, of these kinds of exchange alternatives—they now number in the thousands. There has been growing global recognition and considerable journalistic coverage of these alternatives—with articles appearing in mainstream publications like the New York Times, the Wall Street Journal, Time.com, The Guardian (UK), and more than a little coverage on TV and radio. The commercial (business-to-business) side of the movement also continues to grow, developing better standards of practice and becoming ever more sophisticated.

In addition, a new and growing wave of activist energy has been directed toward making money once again a political issue, with the objective of changing the dominant national monetary and financial systems. In this, there has been particular emphasis on the matters of usury and interest, metallic money, and the gold standard. Ron Paul’s candidacy during the 2008 presi¬dential campaign has been particularly significant in raising this issue in the United States, while in the United Kingdom similar efforts by various groups and members of Parliament to raise awareness have been ongoing for many years. While prior efforts to reform the dominant monetary and banking system through the political process have been wholly unsuccessful, the issues they raise have relevance and need to be considered in the design of private, free-market exchange options.


Two Currents of Alternative Exchange

There are two distinct “currents” in the present movement toward alternative exchange and noncash payment mechanisms.


They are:

1. the grassroots, noncommercial, community-oriented currencies and mutual credit systems; and, 2. the commercial, business-to-business trade exchanges.


Encouraging as these developments might be, none of the grassroots alter¬natives, with a couple of notable exceptions, has managed to become a signifi¬cant economic factor; the commercial segment of the movement, while having achieved a measure of success, has barely begun to realize its enormous market potential. Both have been limited by some serious design deficiencies and vari¬ous other factors that will be discussed in the following chapters. Many local currencies and LETS have been launched with a flourish of enthusiasm only to fall back into oblivion. The typical pattern is initial enthusiasm by the organiz¬ing group and rapid growth in participation, followed by volunteer burnout and a slow, steady decline in both trading volume and number of participants. A system may be formally declared defunct, but more often it simply limps along in the background with little trading and a much diminished participant base, then eventually fades away. Even well-designed systems can experience the same pattern of decline, as I can attest from personal experience.


The Tucson Experience

By the time I arrived in Tucson, Arizona, at the end of 1989, a mutual credit clearing system—called LETSonora—had already been launched. Working in conjunction with a small group of other community-minded people, LETSonora was started by David Koressel, a social entrepreneur who also happened to be a professional accountant. Having read the article about LETS systems that had appeared in the Whole Earth Review141 (which I had coau¬thored with Michael Linton), they were inspired to give it a try. I soon joined the core team and helped to run the system until it finally ground to a halt around 1993. During that time, despite considerable inputs of volunteer labor, the membership never grew beyond about forty members and the monthly trading volume never exceeded more than a few hundred dollars.

A few years later, I began a series of discussions with some local activists with the intention of introducing them to the possibilities of using in-kind donations from local merchants to back the issuance of vouchers that might be used to support local nonprofit groups, vouchers that could also circu¬late as a supplemental local currency.142 This was to be a type of arrangement that Michael Linton and Ernie Yacub refer to as “community way.” This did not interest the people I was talking to, but they were interested in starting a mutual credit clearing system. I cautioned them about the difficulties and risks, describing to them my earlier experience with LETSonora, but they were enthusiastic and eager to try it—arguing that it wouldn’t take much work to set up a ledger of accounts and that conditions might now be right for it to achieve critical mass. I agreed to act as an advisor, but made it clear that I would not be involved in the administration. Thus was launched Tucson Traders.

It was easy to create a set of accounts to keep track of trades among the twenty or so initial members. It started with a notebook and a pencil. The notebook contained a page for each account holder, on which their trades could be recorded and which would show their running account balance.

It was decided that the accounting unit would be called a Tucson Token (TT), with each token having a value equivalent to one U.S. dollar. It was also decided that, in the absence of any data upon which to decide initial lines of credit, each and every account would be allowed up to 200 tokens, i.e., an account balance could be negative to a limit of minus 200.

As the word got out among the various activist and nonprofit networks, the membership grew quickly—eventually reaching a peak of more than two hundred participants, which included a handful of progressive businesses. Trading fairs and potluck dinners were held regularly, and for a while they attracted a sizeable crowd of enthusiastic traders. A directory and a newsletter were also produced. Along with the growth in membership, the workload of recording the transactions also grew. The notebook ledger was shortly replaced with a computerized set of accounts. Still, the work of recording transactions became too much for the volunteer administrators. It was then decided that the administrative burden could be greatly reduced by eliminating the need to record each and every transaction. This would be accomplished by allowing each member to draw out paper currency notes against their line of credit. Thus someone who already had a debit (negative) balance of, say, 75 tokens would be allowed to draw paper notes to the extent of 125 tokens against her account. Members of Tucson Traders could then pay each other by passing the paper TT notes from hand to hand, in just the same way as we do with regular cash transactions. A few local artists volunteered to design the notes, and a local printer volunteered to print up a supply. There was a big party at which the notes were distributed, and at that point the tokens that originated as ledger credits began their life as a circulating paper currency. There was a formal agreement that, if anyone wished to leave the system, they would first settle any outstanding negative balance—either in tokens or in cash.

As the novelty wore off, people lost interest in potlucks and trading fairs, and with the membership scattered all over town, the inconvenience factor began to take its toll. Despite the reduced workload that accompanied the shift to circulating paper notes, the volunteer core grew tired and less enthusias¬tic. Administrative personnel changed several times, but the downward spiral continued. By the fourth or fifth year, trading using Tucson Tokens had virtu¬ally stopped.

This story typifies the experience of grassroots complementary curren¬cies and mutual credit clearing systems as they have thus far developed. New ones continue to pop up and a few vintage systems are still functioning. One high profile case that has attracted an astonishing amount of worldwide media attention was the 2007 launch of the Berkshares currency in western Massachusetts. That is not a credit clearing system, but a local currency that (for the moment at least) is sold for cash.

It is important to recognize that, even though Tucson Traders did not achieve sustainability as a mutual credit clearing system, there were significant positive outcomes.


In the words of permaculture design consultant Dan Dorsey, who had been a core group member,

- we who worked together on the project still refer to Tucson Traders fondly—as a wonderful and useful experiment and model that will be valuable when economic times really get tough. We also refer to the great connections and friends we made, which went beyond just the money exchange and trading. I still have friends today that I met through TT, who I might not have met otherwise. . . . I use Tucson Traders as an excellent local case history of using Permaculture design principles to put together what we call in Permaculture an “invisible structure”—those structures that have a big impact on our lives but aren’t necessarily visible like sun angles and water cisterns.


'Why Exchange Alternatives Fail to Thrive

There is much to be learned from these experiences if we are willing to accept their hard lessons. Here we will consider the grassroots initiatives. The limi¬tations and possible improvements to commercial trade exchanges will be addressed in Chapter 15.


The pertinent questions are:

• What are the main factors responsible for this pattern of decline? • Why have complementary currencies and credit clearing options remained a fringe phenomenon and not been widely adopted? • How can mutual credit and community currency systems be made to sustain themselves and to thrive?


There are two fundamental reasons why exchange alternatives fail to thrive.


These are

1. failure of reciprocity and 2. inadequate scale and scope of operation.


Failure of Reciprocity


Any payment system exists for the purpose of facilitating reciprocal exchange, which can be roughly described as “getting as much as you give, and giving as much as you get.” Whether it be a currency or a credit clearing system, anything that interferes with its ability to fulfill reciprocity (or creates doubt regarding its ability to assure reciprocity) will work against its adoption and continued patronage. Failures of reciprocity can stem either from system design flaws or from management issues.


System design flaws include:

• Improper basis of issue of credits or currency • Inadequate account limits, i.e., overissuance of credits or currency in relation to an issuer’s productivity and the demand for their goods or services • Lack of a clear agreement between issuers and users of credits or currency


Management issues include:

• Lack of accountability and transparency • Inadequate management procedures and controls • Overreliance upon volunteer administrators • Failure to respond to internal or external threats


Inadequate Scale and Scope of Operation

There are several aspects to the problem of scale and scope, which can be summarized as follows:

• Failure to achieve critical size of the participant base • Too narrow an assortment of goods and services being offered • Failure to attract participants from all levels of the supply chain (production/distribution circuit)144 • Failure to gain wide acceptance among the mainstream business community"



Towards A Complete Web-Based Trading Platform

Excerpt, End of Money, Chapter 17,

Thomas Greco:

From Disruptive to Sustaining—Moving Upmarket

If exchange alternatives are to gain a foothold within such a protected (for the banks) milieu, they will need to first find small niche markets where their special qualities are recognized and valued. As performance improve¬ments are achieved, they will be able to attract more of a mainstream market. This has already been happening for some time in both the grassroots and commercial sectors. In the former, the attraction has been mainly ideologi¬cal. Complementary currency and exchange has been seen as a means for achieving social justice, economic equity, local self-determination, and envi¬ronmental restoration. Most grassroots initiatives have tried to incorporate features that promote such ideals. In a few cases, like Argentina, the impetus has been more practical, as we’ve already described. Within the commercial sector, the features that have been most highlighted are the ability of trade exchange membership to mobilize the excess capacity of members in the face of scarce official money by providing a supplemental medium of exchange (credit), and the marketing advantage that comes from preferred access to the membership base. In both cases, a strategic approach will need to be taken to avoid the legal and regulatory minefields that have been laid to inhibit market advances from newcomers to the field of exchange services. Since the useful¬ness and marketability of credit clearing services is determined by both the scale and scope of the network, it would seem essential that critical mass must be quickly achieved. That goal necessitates that all levels of the supply chain must be included from as early on in the process as possible. But how does one recruit participants into an emerging network?


The Emergence of a Complete Web-Based Trading Platform


Over the past decade, commerce has been increasingly migrating onto the World Wide Web. Barring some major catastrophe that would disrupt our information and communications infrastructure, that trend is sure to continue accompanied by ever-greater functionality and additional services. If there is such as thing as a “monetary science,” it is presently undergoing a revolution—and the technologies that are arising from it are sure to bring about enor¬mous changes. Compared to conventional money and banking, the complete Web-based trading platform we will describe here will achieve the innovative potential that Christensen writes about.

Within my own lifetime, I have seen a number of companies that were so entrenched in their industries and so much in control of their markets that it was unthinkable that they might ever be dislodged from their position of dominance. This was especially true in the fields of computers, telecommu¬nications, and photography. Yet many of those companies have either ceased to exist or have been eclipsed by others that developed and marketed what seemed initially to be inferior technologies.

In the early 1980s I was working as a consultant with a company on projects that required a considerable amount of statistical analysis. We had been buying time (at some considerable expense) on a university mainframe computer, and had to put up with long turnaround times. It began to seem sensible to consider acquiring a computer system that would enable us to do that work in-house. Among the proposals that were submitted to us was one from DEC (Digital Equipment Company) for a multistation minicomputer. This was at the time when desktop microcomputers were just beginning to provide some significant computing power, and local area networks (LANs) were becoming a real possibility. Fortunately, we realized that the DEC system and other mini¬computers would soon become obsolete. We decided instead to acquire one of the new AT-type microcomputers, thinking that it could serve our immediate needs and be networked with other similar computers, if needed, later on. That solution did prove to be quite satisfactory for our purposes, and at a small fraction of the price we would have paid for the obsolescent minicomputer. DEC was not nimble enough to adapt to the fast-changing computer technol¬ogies and market conditions. It made an early foray into the microcomputer market with the DEC Rainbow desktop machine, but it was overly expensive and not “IBM-compatible.” Where is DEC today? An interesting analysis of DEC’s failure to succeed in the personal computer market is provided by Christensen.162 He notes that DEC had all the necessary resources to succeed but their processes and values did not permit them to effectively compete in that market. IBM, Eastman Kodak, and Xerox are still viable companies, but they are nowhere near as dominant in their industries as they once were.

The entrenched position of the money and banking establishment far exceeds that of any single company or other kind of cartel. Its position, as we have described, has been established and sustained through political privilege and the suppression of competition rather than by the quality and value of the services it provides. Given that situation, is there any chance that new technol¬ogies might enable the emergence of significant exchange alternatives? I think there is. The U.S. Postal Service enjoys a monopoly in the delivery of mail, but that did not stop the massive shift to newer, faster, electronic communications channels like fax, text messaging, e-mail, instant chat, and Internet file trans¬fers. Now voice-over-Internet is mounting a similar challenge to telephone and cable companies.


What are the “disruptive technologies” that are emerging within the realm of money and banking?

  • Direct credit-clearing among buyers and sellers
  • The use of the Internet to create Web-based marketplaces
  • Transparency in Web-based accounting, information, and exchange systems
  • Strong identity verification
  • Secure encryption of information over the Internet
  • Social networking
  • Reputation ratings of vendors and buyers that are continually updated and available on-demand
  • The reemergence of mutual companies, coresponsibility, and localized Web-based markets


It is not any of these individually but all of them in combination that will, I believe, result in structures that will provide superior performance in mediat¬ing the exchange process. Worsening economic and financial conditions, such as those experienced in 2007 and 2008, will create enhanced market oppor¬tunities for this sort of nonpolitical trading platform, and will assure their eventual implementation and wide acceptance.


Essential Components of the Web-Based Trading Platform


Management guru Peter Drucker has expounded the following “law”—prof¬its migrate to the supplier of the missing component necessary to complete the system. What system are we talking about, and what is needed to complete it? It is what I call a complete Web-based trading platform, and it requires these four basic components.

  1. A marketplace
  2. A social network
  3. A means of payment
  4. A measure of value or pricing unit


There are already numerous Web-based marketplaces—eBay, Amazon, and Craigslist, to name just a few—and there are numerous social networks—Facebook, Friendster, Linkedin, MySpace, the Living Directory, and so on. But what about payment systems? And what about measures of value? This is where gaps remain. Yes, PayPal is a payment system of sorts—but it only allows the transfer of the same old bank-created debt-money. The only real advantage it provides is in enabling you to pay an online vendor without the risk of revealing to them your credit card or debit card information. PayPal plays the role of a trusted intermediary. That is a useful service but it does not provide a true alternative payment system. PayPal could conceivably become a full-blown credit clearing service if it were to allocate interest-free lines of credit to some or all of its account holders. W ith regard to value measures, we have numerous ones (like dollars, euros, pounds, and yen) but each is a political unit, the value of which is dependent upon the policies of their respective government or central bank issuer. These are the very measures that are unstable and problematic. But before proceeding with that line, let us consider each of the four components a bit more fully.

A marketplace is a “space” where buyers and sellers come together to display their offerings, express their needs and wants, and negotiate the terms of trade. It need not be a physical space, as we see with the emergence of marketplaces on the Web. It is important to recognize that there are marketplaces that bring businesses together with consumers (B2C), marketplaces that specialize in business to business transactions (B2B), and some that enable all types—B2C, B2B, and even C2C. A social network enables participants to make themselves known to one another and to communicate more effectively. It allows one to establish their identity online, to post their credentials, and to provide other information for others to see. It also can track correspondence and behavior within the network, establishing one’s reputation and enabling an impersonal medium to serve as a tool for building a matrix of trusting relationships that can lead to collaboration and coordinated action on many levels.163 Social networks are enabling an inherently impersonal medium to become an effective tool for forging very personal relationships across all sorts of boundaries.

A means of payment facilitates the exchange process and transcends the barter limitation of coincidental wants and needs. Possible payment media include

  • official money,
  • private currencies, and
  • direct clearing of traders’ credits and debits.


Everyone understands the use of official money as a means of payment. Thus far, Web-based payment systems have been mainly limited to the trans¬fer of conventional bank-created money from one party to another. It does not usually occur to people that there might be any other payment possibility. But private currencies have a long history and have often served the payment func¬tion, especially during times of financial malfunction and economic distress like the Great Depression of the 1930s. We have already discussed a number of such payment possibilities.

A measure of value enables comparison in the marketplace of the values of distinctly different kinds of goods, services, and contracts—including finan¬cial claims. In times past, values and prices were expressed in terms of some standard commodities, most notably a specified amount of gold or silver. As described earlier, those value measures were obliterated by legal tender laws that made the various national currencies both the means of payment and the measure of value. At some point, legal tender laws will be abolished. In the meantime, buyers and sellers can adopt some nonpolitical measures of value to use in pricing their goods and services for sale.


Completing the Web-Based Trading Platform


Recalling Drucker’s Law, we propose that the missing components that are needed to complete the edifice of a complete Web-based trading platform are (1) a means of payment that utilizes no political currency as a payment medium and (2) a concrete, objective, universal measure of value that provides a unit of account that is independent of all national currency units. Of these, the first is more critical; the second can be temporarily deferred, as we discussed in Chapter 9.

What we propose as the innovative means of payment is direct credit clear¬ing, which has already been described. And what we propose as the objective measure of value is a composite commodity standard such as that described in my earlier book, Money and Debt: A Solution to the Global Crisis,164 and summarized in Appendix B. These missing components need to be properly integrated with an online marketplace and adequate social networking tools. When these things are accomplished, the trading platform becomes an inte¬grated milieu that subsumes the functions of both a marketplace and a bank.

Who are the dominant players in Web-based commerce today? Will eBay or Amazon be able to exploit this opportunity, or will it be some nimble start-up that is still fluid enough to develop the necessary internal processes, lean enough to accept the small initial returns, and venturesome enough to develop new markets? The past three decades have seen great progress in the develop¬ment of private commercial “barter” or trade exchanges that provide direct credit clearing among their business members. These and other historical examples provide adequate proof of concept. Optimizing their design, putting all the pieces together, and taking these networks to scale are the remaining tasks that will revolutionize money and banking and enable the evolution of civilization toward greater peace, prosperity, and sustainability."


Review

Tadit Anderson:

" At the top of the first page even before he defines his problem he asks " What is Needed to Solve the Problem?" His answer is "The de-nationalization of money, the separation of money and state is urgently needed." There is a peculiar convenience in defining solutions before the problems are described. This is also very strange in that the prevailing definition of money among those who have studied these issues, excepting the self referential nature of libertarians, is that money is that which is used to pay taxes as is established by the state as the collection of institutions of sovereignty, governance, and public services. In effect Greco is tossing overboard the opinions of the best monetary economists available, simply on his assertion. To be critical of how a particular institution operates, does not validate eliminating all institutions of governance. If Greco was ever interested, the problems originating with the current monetary conventions are directly related to the privatization of those institutions and that influence upon the related regulatory agencies.

Apart from the reliance upon specie, precious metal units of money, the first Bretton Woods accord in 1947 was the first international effort toward a world reserve currency, at that time designated as the US Dollar. When the gold that had been backing the US Dollar ran out in 1970, President Nixon declared the fiat value for the Dollar, based on little more than the threat of military violence or global economic chaos. In 1973 through a military agreement to protect the Saud royal family of Saudi Arabia, then the chair of O.P.E.C., to have oil sales be denominated in US Dollars. This is the only modern example of a denationalized currency. Historical examples are the the coins of Imperial Rome which were used throughout its empire in a similar way. The petroleum based US Dollar was likewise leveraged with US military influence as a form of neo-colonialism. That the US during that period was a largest single market also aided the acceptance of the US Dollar as the world reserve currency. That period is now ending. There have been suggestions that an international currency be established as a stateless money but there is no basis for this to happen and be accepted on a worldwide basis. The present leading currency and economy is the People's Republic of China, and the PRC has suggested that a basket of leading currencies be used.

Greco's advocacy for the de-nationalization money is summed up "Don't expect the politicians to do the right thing. The good news is that the answers can come from free people exercising their rights of contract and association." Apart from the cynicism of this statement, it again ignores the modern definition money as being accepted as legal tender and in the payment of taxes. Further, it is through the function of the judiciary that contracts can be enforced as the rule of law. The difficulties with the management of the state has been through the corruption of the leadership through the privatization of the sovereign right to issue currency and money. The reason that this is the case is that regulations and controls upon these banking corporations have been reduced or captured due the political influence of free market economics and the corruption of US law in the declaration of corporations as legal individuals. So I have to wonder here whether Greco is off puffing up a utopia that doesn't exist, or if the "people" he is referring to are actually corporations.

Greco then defines "the main problems" as the "legal tender status for FED-created money, the monopolization of credit by the banking cartel, and the lack of an objective, non-political unit of money." To address these "main problems" in reverse order, it is not clear that "an objective, non political unit of money" is either possible or wise without having some commodity that is universally available, with approximately similar valuation across the planet, or some unit of governance being responsible for its creditworthiness. Lacking any effort to define this utility, perhaps Greco's fiction plays well as a bedtime story. Gold and silver didn't work very well for various reasons, and somehow even uranium seems like a poor choice. Eliminating "the monopolization of the issuance of credit by the banking cartel" sounds ok in isolation, but if you add in the fiction of an objective, non-political unit of money it seems that the intent is to have this power available to one and all. Adding in the first main problem of the legal tender status of Fed created money, then it would seem that the intention is for a non-political, objective form of legal tender status to be available to all free people, and perhaps thereby corporations. By this approach the declared problems cannot be resolved. Eliminating this private monopoly by banking corporations and returning that sovereign power to the government as a public monopoly is a different way to solve Greco's "problems" and a alternative which he fails to even consider.

In the early 19th century US President Andrew Jackson was strongly opposed to the criminality and usury of the Second Bank of the United States. After he removed the Federal government's deposits from it and then allowed its charter to expire what he left in its place was a variety of radical state's rights and a free market free for all. In effect it was the right decision with a very bad choice of an alternative, even if by default. During the free banking period the US had its highest level of banking defaults and frauds, except perhaps upto just recently. What the two periods have in common is the extremist application of free market economics, largely absent of any effective regulation. There is no real life application to validate advocating for a ideological form of economics particularly of the pseudo-libertarian variety. There would be no equality of liberty among citizens until they all had equal access, to resources and opportunities. Shifting to this sort of ideology would only again advantage those who have gained great profit and wealth by abusing pre-existing advantages, unearned rents, and charters, also known as corporations.

Moving onward through Greco's manifesto for monetary reform at about two third the way down the first page he digresses into a rationalization of credit based money. Again, please, understand that at the surface level of this analysis he uses an example out of micro-economics that has been used to validate macro economic policy. So really again he is objecting to the monopolization of the creation of credit based money by the banking cartel, and advocating in favor of his "all free persons, " which would easily include corporations. As a counter example it would seem that requiring banks to maintain 100% reserves for their extension of loans and having adequate currency in circulation would eliminate credit based loans or money. It was in the creation of too great a debt burden, through macro economic policies and high interest rates, and through the expectation of high returns, which caused the macro-economy to collapse. It seems that even the creation of limited credit based money by natural persons is a slippery slope. The fiat elimination of government infra-structure and social services from the equation also eliminates the possibility of asset based currency being put into permanent circulation. Having sufficient asset based currency in circulation would make credit or debt based currency literally a non-issue, ie. not required. Loans could be based upon accumulated savings, rather than based upon a debt issuance.

On the second page, not quite half way down the page, his rather utopian description of the process of community currencies and exchange has a strong sense of unreality about it. At the level of actual initiatives he seems to have little understanding of the economies of scale that will required to organize and maintain a multi layered complex system particularly in a context largely lacking in much of the way of standards and regulations. He also seems to have a simple idea of just how extensive various social structures are established. A transformation will not occur by a flicking of a switch. It will be very necessary to develop a culture friendly to change and in favor of cooperation. His libertarian ideology would also prevent any sense of value for a commons of any sort. Repeatedly he references various libertarian pundits, who have a rather narrow and ideological perspective. Scientific and practical discourse tends to be validated by the variety of participating perspectives, not by the narrowness of the presentation.

At about the bottom third of the second page the next section is subtitled "The State of the Monetary 'Reform' Movement." The text begins with "Money has been a recurrent political issue, but from World War II on into the 1980s, it became obscured from general public view. The debate shifted away from the proper structuring of money and banking to mere policy issues-- how to operate a system that was deemed by its proponents to be 'the best of all possible worlds.' Even today, the vast majority of people are oblivious to the dysfunctions inherent in the dominant monetary regime and it s impact upon their personal fortunes." (end of quote)

It would be relatively easy to date the disconnection of US citizens from understanding the nature of their monetary system based upon the fraud used to establish the US Federal Reserve and the privatized and centralized US banking institution. There were several reform measure instituted relative the banking sector during the mid 1930's as well as the well publicized Pecora hearings. The lull in any critical examination from about the time that the US began producing munitions and weapons for World War II up to about the 1980s was more or less considered to be a period of prosperity, and simply enough, the mechanics of the monetary system were not generally considered to be a problem. Also during that period , much like other previous periods in US economic history the discourse was narrowed to the point of the role of academic economics was to serve as cheerleaders for corporate economics. Reducing forty years of history of monetary policies and reform to three sentences is more dismissive than explanatory. Laying the burden for the lack of a monetary discourse upon the public, given the routine exclusion of any critical point of view and allowing the complicity of corporately owned media is insulting.

Further on this page he identifies the "The Monetary 'Reform' Movement" as being equal to the innovation of commercial trade associations and in the emergence from the grassroots of mutual credit associations and local currencies. The mystery here for me is that much of what he describes as "reform" still has no detailed understanding of why the established monetary institutions have had the effects they have actually produced. So in effect Greco's "reform movement" has little knowledge of what is needed in the way of actual monetary reform, largely because again his advocacy is based upon ideology, not history and analysis. Greco's interpretation is so oblivious to efforts that been active at the level of citizen involvement in various ways for decades and among marginalized economists for much longer. It also fails to notice initiatives involved for quite sometime in the critiquing of the US economy and of financialized Capitalism generally. The the anti-war movement, labor union movements, and cooperatives have been contexts for consumer education regarding economic democracy since at least the late 1960s. The Humphrey Hawkins Act of 1978 was largely a corrective toward the US Federal Reserve and it was the result of concerns not the beginning of an advocacy, yet Greco ignores it.

At the top of page 3 he describes his version of the monetary reform movement as being prone to burn-out, decline, and failing to sustain its process. In this description there is not even a hint of an admission that the utopian basis of this advocacy, or that a lack of an educational process beyond repeating the utopian slogans and truisms, or that these experiments might be faulty and difficult from their basic design, and that these same factors have added to the obstacles experienced by the community currency advocates.

He next launches into a another list of what he refers to as "pertinent questions:" "What are the main factors responsible for these patterns? How much can mutual aid credit and community currency systems be made to sustain themselves, and to thrive beyond the initial spurt of enthusiasm? And perhaps more importantly, was posed by one of my(Greco's) correspondents. 'What are the underlying issues that are preventing everyone seeking monetary reform from working together?' and 'How can we build synergy toward empowerment of the people?' " (end of quote)

The first part of his response to the last two questions above goes like this "If we can find satisfactory answers to these last two questions, we will, I (Greco) think, be well on our way toward answering the others. Here are some of my views on that. First of all, there are, on the one hand, those who are aiming at monetary reform, and, on the other, those who are seeking to transcend the dominant structures of money and banking. These two approaches are quite different from one another. The former accepts as given the socio-political foundations of the present regime and does not question it basic assumptions. The latter takes little for granted and seeks to reinvent money and banking to serve their intended purposes; it is a more thoroughgoing, more 'radical' approach that begins from a particular set of principles and ideals." (end of quote) And just what is the basis of this promised "satisfaction?"

The clever part of this whole pseudo Socratic digression is that the practical questions have remained unanswered. He places himself in the position of the nominal 'radicalism,' making no useful suggestions about the sustainability of particular currencies and exchanges. His reply revolves around a quote from another libertarian German economic philosopher, essentially again rejecting statism of all forms. This approach actually cultivates a nihilistic anarchism which is reactionary toward most forms of cooperation except full and unequivocal acceptance of its libertarian doctrine, as not much more than a campfire sing along.

More and more Greco's approach seems to be designed to promote frustration and to create factions within what might be otherwise be a functional initiative. That he also actually excludes anyone who might be involved in a different process of monetary reform as being not even recognized and then frames the process as if it were a one ring circus. He never demonstrates an extensive knowledge of how the established conventions operate. He advocates for a grass roots process with no benchmarks principles, and a misplaced sense of 'radicalism' which is guaranteed to generate major frustration. He is advocating for a form of free banking without any concern for the levels of fraud that is likely to be created, and maybe this is actually all a well thought out strategy to frustrate and diminish any movement toward monetary reform. The fallacy is the assumption that he is proposing any practical process of reform of the banking and monetary institutions at all. There is no systematic or thorough approach advocated by Greco at all, though he claims those adjectives.

I would strongly suggest that instead of taking Greco's suggestion of reading his favorite German libertarian philosophers, that you look up "Modern Money Mechanics' published in 1962 by the US Federal Reserve Bank of Chicago and available on the internet. Or another path to understanding is to find a book covering some aspects of economic and monetary history and then read until you understand most of it, then take a piece of it that you found interesting, and seek out more information on that. There are several introductory books available through public libraries. Seek out sources on the internet until you start understanding better what the current structure is and what would be a realistic and necessary monetary reform agenda.

It is by authors such as Greco that readers will come away less informed, not more informed. At the very minimum it seems grossly unwise to establish a popular version of free market economics as guiding philosophy of a community currency and exchange process when free market economics has been a major contributor to our present economic collapse. Remember that President Reagan was also an anti-state sort of Republican, for whom deregulating corporate behavior was seen as a highly desirable goal. At the same time he had no problem cultivating wide cynicism in the process of governance, while using that governance process to substantially increase the profits of those corporations. Even though Greco has a substantial following, the standards he uses are largely ideological rather than historical or pragmatic. In any field of popular interest there will be a number of popular level authors and speakers attracted by the possibility of income and minor celebrity status. It is probable that it is not even possible to deter the level of mis-information that they tend to promote to those eager to be misled.

It is also true that the history of popular interest in monetary and economic reform have had significant aspects that amount to not just incidental mistakes or slightly different interpretations, but material that amounts to full fledged dis-information designed to confuse and disable any pragmatic approach or political advocacy. Greco's material qualifies as disinformation, even though in his books he does use historical exanples as validation for his approach, but always he does not work from the history and practice forward. His core advocacy is centered on his libertarian economics, which given the very recent catastrophic results of the influence of a very similar ideology upon the actual regulatory institutions intended to prevent fraud and upon the formulation of economic policy, it seems obvious that this perspective is largely bankrupt. In the end Greco transcends exactly nothing as well as any responsibility for the legality or the organizational sustainability of these initiatives." (http://www.economics.arawakcity.org/node/344)



Discussion

James Robertson:

"I agree wholeheartedly with that diagnosis of the problem.

It is when we come to what we should do about it that I question Tom Greco's realism. He dismisses as unrealistic the aim of transferring to public agencies the function of issuing the public money supply debt-free in the public interest under effective democratic control at national and international levels. He assumes that national political power and global financial interests will successfully combine to stop that happening.

But it is surely even more unrealistic to hope that that problem can be by-passed by persuading people to drop out of the unreformed mainstream money system and rely on "private initiative and the creative application of new technologies and methods" instead. Can pioneers of the new local community currencies develop them quickly and widely enough to liberate millions, let alone billions, of us from our present dependence on the unreformed big banks and big governments to provide for our money needs?

If ever a sizeable number of people did look like succeeding in that, the unreformed big banks and governments would surely combine to stamp them out, as they stopped the growth of complementary currencies in the Great Depression of the 1930s.

A careful reading of the book encourages me to hope that Greco may be shifting from his earlier views on this point. In Chapter 19 on The Role of Governments in Establishing Economic and Financial Stability he does, in fact, set aside his selective pessimism about mainstream monetary reform. He advocates legislation to achieve what are many of its aims. He also hopes not to drive a divisive wedge between would-be allies, but to promote a deeper understanding between 'reformers' and 'transformers' in pursuing a common fundamental goal - 'empowerment of people' (p110).

The 'both/and' nature of what we need to do is clear: we need both to support complementary currencies and economic decentralisation; and we need to recognise that that won't happen without either mainstream monetary reconstruction or the almost total collapse of human society in its present form." (http://www.jamesrobertson.com/news-jun09.htm#greco)


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