Of Money Part 2

1
Anarchisr Srudies Anarchisr Srudies Anarchisr Srudies Anarchisr Srudies- -- -vol. 18, 2010 vol. 18, 2010 vol. 18, 2010 vol. 18, 2010






Of Monev, Heresv, and Surrender, Part II:
A Plea for a Regional and Perishable Currencv




Guido Giacomo Freparara





ALsrracr ALsrracr ALsrracr ALsrracr

A fundamenral, Lur neglecred rrurh of rhe narure of money resides in irs imperishaLle
characrer. The adverrence ro rhis peculiar physical properry of rhe money merals, vhich have
rradirionally Leen employed as rhe chief means of paymenr Lefore Leing rransmured inro rhe
virrual form of conremporary Lank money, has seldom Leen made in rhe vasr lirerarure
dealing virh rhe suLjecr. Ir srands as one of rhe grear merirs of rhe German anarchisr currenr
of rhoughr of rhe early rvenrierh cenrury (Silvio Gesell and Rudolf Sreiner in parricular) ro
have acknovledged rhe exrraordinarily unfair advanrage vielded Ly ¨money" vis-à-vis rhe
resr of rhe economy, and soughr rhereLy ro remedy rhis aLoriginal disrorrion via rhe
inrroducrion of a genial device: a rime-sensirive money cerrificare. This arricle explores rhe
insrirurional and rheorerical issues rhar have led ro rhis innovarion, and concludes virh a Lrief
survey of rhe record achieved rhus far Ly rhe lare arremprs of inrroducing in several parrs of
rhe vorld regional currencies in suLsrirurion of proprierary Lank money÷i.e., money as ve
knov ir.
2
Introduction


Sagredo Sagredo Sagredo Sagredo: And can ve rhink of a grearer inaniry rhan rhar
vhich rreasures rhings such as gems, silver, and gold, and
vilifies, on rhe orher hand, dirr and rhe earrh! ¦.] I Lelieve
rhar rhose exrravaganrly Lenr on exrolling imperishaLiliry,
inalreraLiliry and rhe like are prompred ro urrer rhese rhings
Ly rhe anxious vish ro live long and Ly rhe rerror of dearh.
They forger ro reckon rhar if men vere immorral, ir vouldn'r
Le rheir lor ro Le come inro rhis vorld.
'

Galileo, Dialogo sopra ai massimi due sisremi


A necessary condirion, rhough possiLly nor a sufficienr one, for rhe
improvemenr of collecrive life is rhar rhe money of rhe vorld communiries oughr, like
rhe goods and performances ir is assigned ro mirror, have an expirarion dare. In orher
vords, money musr die. The economic roor of all social and economic evil does nor so
much reside in Man's avid oLsessions, Lur rarher in rhe rransformarion of rhe means
of paymenr ÷a mere inrangiLle sign÷inro a rradaLle good, vhich is managed Ly an
esraLlishmenr of privare ovners ÷rhe oligopolisric Lanking carrel÷virhin rhe virrual
Loundaries of a proprierary nervork. The vills and apperires of rhe nervork's
cusrodians perforce direcr, shape and inform rhe acriviries of rhe vorld ar large, for
every economic endeavor Legins indeed virh rhe issuance of money. The firsr
disrorrion vroughr upon money vas rhus ro have assimilared ir ro a commodiry, a
commodiry,÷gold aLove all, in facr÷ vhich possesses rhe formidaLle, and perfecrly
un-economic properry of never perishing.
Froponenrs of a dying currency vere granred a nook of rhe social forum
during rhe ninereen rvenries in Germany. Silvio Gesell (1862-1930)÷an ex-
Lusinessman of denral rools carapulred Ly anarchisr demand ro rhe posr of Finance
Minisrer in a five-day Sovier experimenr in Munich (1919)÷, and Rudolf Sreiner
(1861-1925)÷rhe Ausrrian mysric rhar did nor leave a single srone of rhe physical and
praerernarural realms unrurned, are rhe rvo isolared prophers of perishaLle money.
They roused some passion in rheir rime, Lur afrer rhe fire of rhe Depression and irs
Lellicose resolurion (WWII), rheir reflecrions on rhe narure of money vere shoved
from rhe discursive periphery ro rhe varehouse of irrelevance.

'
E qual maggior sciocchezza si può immaginar di quella che chiama cose preziose le gemme, l'argenro e
l'oro, e vilissime la rerra e il fango! ¦.]. Quesri che esalrano ranro l'incorrurriLilirà, l'inalreraLilirà, erc.,
credo che si riduchino a dir quesre cose per il desiderio grande di campare assai e per il rerrore che
hanno della morre, e non considerano che quando gli uomini fussero immorrali, a loro non roccava a
venire al mondo.

3
These lasr years, hovever, ir appears rhar movemenrs advocaring regional
currencies and groups of commirred dissidenrs seeking ro Lring decisions vhere rhey
Lelong ÷in rhe communiry's fold÷are asrir: ar rhe grassroors, perishaLle money has
Leen rediscovered, more and more individuals are srriving ro Lypass rhe oligarchic
nervork, Ly esraLlishing alrernarive grids of economic exchange. Wirhin such veaves
of relarions, a periodical charge imposed on money Lalances÷i.e., rhe imposirion of a
negarive rare of inreresr÷vould acr as rhe narural srimulanr ro circularion and rrade,
as vell as rhe mosr conspicuous impedimenr ro pecuniary hoarding, vhich is rhe
curse of economic life.
This essay is divided inro rhree secrions. The firsr (On Money) inrroduces rhe
money quesrion inirially Ly relaring rhe life and exploirs of rhe economic doyen of
German anarchism, Silvio Gesell. Gesell's crucial, yer srill poorly knovn reformisr
endeavor, is complemenred ÷in rhe second secrion (Heresy)÷Ly rhe fascinaring
inruirions of Rudolf Sreiner, vho had reached, ar aLour rhe same rime, conclusions
virrually idenrical ro rhose of Gesell himself. There follovs a reviev of rhe several
alrernarive sysrems of exchange Lased on and inspired Ly rhis anarchisric rradirion of
regional self-help, vhich have Leen recenrly launched (for rhe mosr parr in Germany)
ro overcome economic hardships and/or ro srimulare communal enrrepreneurship.
The rhird and conclusive secrion (and Surrender) addresses rhe srare of puLlic
knovledge in monerary marrers Ly focusing on rhe rangle of official ¨rheories" and
opinions rhar presenrly accounr for rhe urrer confusion reigning over rhis suLjecr.
Indeed, ir vill Le seen rhar rhe mosr crirical aspecrs of conremporary monerary policy
Lear a righr and inrriguing connecrion ro rhe very rheorerical suLrleries developed Ly
rhe anarchisr rradirion rhree generarions ago.
















4
Of Monev.


Anarchist Guru

The case of Silvio Gesell is somevhar exrraordinary.
In his yourh, he had Leen one of rhose advenrurous merchanrs, vhich
Germany produced in profusion during rhe illusory and heady days of rhe
Wilhelmine Lelle epoque. He had made good money selling German rools in
Argenrina, and he evenrually rerired ro Svirzerland in 1900 ro enjoy rhe fruirs of his
commercial laLors as a genrleman-farmer. In his rerrear, he found rime ro elaLorare
parricular ideas for economic reform rhar had Leen raking shape in his mind over rhe
course of his commercial experience. Indeed, he had learned economics rhe hard vay,
he had seen in funcrion rhe engine of Lusiness enrerprise from rhe inside. DouLrless,
he reasoned, rhe capiralisr machine.vorked. No less douLrful, hovever, vas rhe facr
rhar such a machine, humanly speaking, ¨vorked" exploirarively, and rhar ir
periodically spurrered inro malfuncrion, Lefore collapsing alrogerher virh cyclical
puncrualiry, inflicring rhereLy all manner of pain across rhe social specrrum. Gesell
claimed rhar he knev virh precision vhich aspecr of rhe engine's design vas flaved
and ulrimarely responsiLle for all such economic anguish. And ir had ro do almosr
exclusively virh rhe very special insrirurional arrangemenr of our monerary
appararus. Injusrice, in orher vords, vas for Gesell roored firsr and foremosr in rhe
insrirurion of money irself, rarher rhan, say, in rhe common pracrices and conrracrual
lavs ruling laLor dynamics (vage Largaining, union-acrion erc.). Indeed, from Gesell's
perspecrive, rhe proLlemarics of laLor, unemploymenr and depression are ro Le
consrrued as imporranr social consequences of rhe primary insrirurional error upon
vhich our rradirional monerary sysrem has Leen edified.
Good anarchisr rhar he inrimarely vas, Gesell shunned from rhe ourser rhe
evenrualiry (or expediency) of hirching his urge for radical reform ro rhe polirical
locomorive of Marxisr socialism. When ir came ro monerary marrers, Marxism, in facr,
vas no less conservarive and aurhorirarian rhan irs LiLeral counrerparr÷rruly rhe
advocares of Lorh camps sav rhings exacrly alike: money is gold and vice versa, and ir
is ulrimarely ro Le enrrusred ro rhe offices of a cenrral Lank.
1
To Gesell, Marx and his
follovers vere missing and misundersranding rhe poinr enrirely. Gesell aspired ro a
pracrical,
2
non-Sraralisr rechnical correcrion of rhe sysrem's monerary engineering,
one vhose implemenrarion vould have gradually effecred rhe rransirion ro a form of
communirarian socialism resring upon free, privare iniriarive ÷in Lrief, rhe classic
anarchisric economic ideal-rype.
Once rerired, Gesell commirred his ideas ro paper, rhey circulared in rhe form
of numerous pamphlers, vhich he inirially senr ro academics, poliricians and
5
professionals, virhour, ar firsr, eliciring any kind of response. A sysremaric and
organized expression of his inruirions evenrually appeared in Look formar in 1916
under rhe rirle Die Narürliche Wirrschafrsordnung (The Narural Economic Order,
NIO hereafrer). Revised in 1919, rhe nev edirion of rhe NIO Lecame rhe plarform of
Gesellian economics, his masrerpiece and definirive formularion of rhe monerary
quesrion.
3
UnLeknovnsr ro many anarchisrs, sadly, rhis is one of anarchism's sacred
rexrs.
4

By rhe end of rhe Grear War, hovever, Gesell had managed ro arrracr a
folloving÷one sufficienrly diffuse and feisry as ro find irself in an exrraordinary
posirion of leadership during rhar craziesr, and leasr knovn of hisrorical inrerludes:
rhe season of rhe German Soviers (rhe Räre-Regierungen, NovemLer 1918-June
1919).
5
In rhe course of vhar came ro Le called rhe ¨Conciliar movemenr" ÷a semi-
sponraneous, communirarian uprising, vhich Lurgeoned in hundreds of German
ciries and Loroughs in rhe afrermarh of defear (in WWI) and of rhe remporary pover
vacuum in Berlin÷panels of improvised legislarors dravn from a morley array of
arrisrs, milirary men and professionals seized rhe communal helm all over Germany.
Munich, in parricular, experienced rhrees such Soviers: 1) an inirial consriruency
headed Ly rhe oLvious alrernarive of rhe Socialisrs gave vay evenrually ro 2) a campy
adminisrrarion of playvrighrs and free-vheeling anarchisrs (from April 8 ro April 13,
1919), vho vere finally ousred in rurn Ly 3) Communisr milirias. Commandos of
Whire guards led Ly var vererans rhemselves direcred Ly rhe nevly reconsrirured
aurhoriry in rhe German capiral vould drovn all such sedirious experience in Llood
in rhe spring of 1919. Ir vas also on such ashes rhar Weimar vas shakily erecred.
During Munich's second Sovier, Gesell vas summoned and svorn in as
Finance Minisrer Ly his friend, Culrure Minisrer Gusrav Landauer, rhe anarchisr
luminary and exegere of Shakespeare, vho vas rhen drafring legislarion mandaring
for all pupils rhe memorizarion Ly rhe age of ren of Walr Whirman's poerry. Ir rook
Gesell and his associares no rime ro produce vhar rhey sav as rhe grail of economic
prosperiry: a chesr Lulging virh reams of quainr cerrificares, each Learing on irs Lack a
quainrer grid÷a square-parrern, made of riny lirrle Loxes upon vhich one vas ro affix
periodically a purple sramp. Thus ¨raxed", Gesell reasoned, money 1) vould reflecr
rhe depreciarion ro vhich all sraples are suLjecred, 2) ir vould Le prevenred from
Leing hoarded, and 3) ir vould sreer rhe parh of economic expansion onro a plane
denored Ly rhe aLsence of inflarion, crises and usury. This vould Le revolurion.
Could such a simple scheme rruly do all rhis! And if so, vhy, and hov!
In rhose disranr Bavarian days, rhis mosr amLirious projecr never sav rhe lighr
of day, Lefore rhe srrange Lills could Le pur inro circularion, Communisr posses loyal
ro Berlin's Marxisr direcrorare, drove our Landauer & Co and pulled rhe plug on rhe
carnival of rhe anarchisrs. Gesell died in 1930÷anorher propher unheeded, his spirir
halloved ever since Ly a minoriry srreak virhin rhe drying srream of anarchism. In
rhe folloving Liennium, rvo experimenrs inspired Ly his example, as ve shall relare
6
Lelov, vere arrempred virh success in Ausrria and Bavaria. They vere evenrually
rruncared Ly rhe years of rearmamenr (1935-39). Afrervards came var (1939-45),
Brerron Woods (1944-71), Sragflarion (1974-78), NeoliLeralism (1979-1987), and
finally rhe Nev Economy (1990-presenr). Inreresringly, ir is during rhis lasr period
rhar Gesellian schemes have Leen revived: one may vonder vherher rhey've also
reappeared as harLingers and symproms of profound crisis, like rheir anrecedenrs in
rhe rhirries. Today, from small Leginnings÷mosrly in Germany÷rhese communal
iniriarives appear ro have developed a lirrle life of rheir ovn.
So vhar vas rhe rheory Lehind Gesell's funny paper! Whar vas rhe inruirion,
and rhe deeper meaning of such an arrifice as Gesellian ¨sramp scrip" for rhe economy
as vhole!

Gesell's Theory of Inreresr Gesell's Theory of Inreresr Gesell's Theory of Inreresr Gesell's Theory of Inreresr

Gesell ser rhe srage for his proposal Ly calling rhe reader's arrenrion ro a
fundamenral mismarch. On one side of rhe economic playing field, Gesell argued,
rhere is convenrional merchandise (goods of all sorrs, from lerruce, ro Lricks), on rhe
orher, rhere is money÷ gold, ro Le precise. The Lasic inruirion is rhe folloving:
merchandise cannor afford ro vair÷for ir goes Lad, Lur gold can, for ir is
imperishaLle. Srared differenrly, rhere exisrs a fundamenral imLalance on rhe plane of
exchange Lerveen rvo qualirarively differenr kinds of commodiries: namely, Lerveen
regular sraples and gold, vhich÷and rhis is rhe crucial insighr÷has Leen misrakenly
enshrined as rhe convenrional means of paymenr from rime immemorial. Why rhis
has Leen so is knovn: rhe more rhe communiries of men have Leen disjoinred Ly var,
inrrigue, suspicion and culrural diffidence, rhe more rhey have rended ro rely on a
(gold-) monerary srandard rhar 1) vould Le accepred Ly each self-guarded economic
Lloc in rimes of rrading rruce, and 2) vould ¨congeal" vealrh, as ir vere (rhe
convenrional misnomer for rhis norion is ¨savings") in rhe srrucrure of a noLle meral's
imperishaLle suLsrance. In orher vords, vhen rrusr Lreaks dovn and conflicr looms,
one goes a-Lurying gold in rhe Lackyard÷a checkLook, or a mere claim, offers no
rangiLle, fall-Lack ¨securiry".
Yer, in principle, ve knov ir: in irs puresr and mosr fluid guise, money is a
roken, a symLolic expression ÷a norion devoid of physical suLsrance. Fresenrly rhe
proLlem is rhar, even rhough gold has disappeared from rhe puLlic's purviev, ve
rrade and rransacr in rhe vorld marker virh a means of paymenr, vhich ve look
upon as if ir vere srill endoved virh rhe physical properry of noLle merals. And rhe
pover of Lanking resrs precisely on rhe crysrallizarion of such misperceprion.
Socially, rherefore, from rhe Gesellian angle, rhe rension is nor Lerveen
capiralisr and vage-earner, Lur Lerveen producer and Lanker÷a fundamenral
disrincrion ro Lear in mind.
7
Therefore, an emLarrassmenr ensues: rhe producer, vho is demanding money
from rhe Lanking sysrem for his Lusiness, has ro yield, or else his goods vill ror. And
ir is in such an imLalance, Gesell senrenced, rhar lies rhe seed of usury: i.e., rhe
charging of inreresr. Inreresr, Gesell rells us, never is rhe legirimare recompense of
rhrifr, or a narural price rhar is due ro some nondescripr ¨saver," as mainrained Ly rhe
scholiasrs of rhe LiLeral school. In rrurh, vhar any saver ulrimarely possesses is a
Larch of goods rhar avair consumprion in a varehouse ÷rhe money corresponding ro
rhese goods is a collecrion of mere rokens rhar are supposed ro facilirare rhe rransfer of
rhe goods from rheir ovner ro enrrepreneurs rhar vill acrually ¨Luild" somerhing
duraLle virh rhem. This is vhar ve denore as invesrmenr. Invesrmenr, Gesell insisred,
is norhing Lur deferred consumprion of longer-lived commodiries. We shall rerurn ro
rhis in rhe folloving secrion.
Inreresr, hovever, is somerhing alrogerher differenr: ir is a plus, a fee, a rriLure
vhich rhe producer pays ro rhe Lanker in order ro achieve a rvofold oLjecrive: 1) ro
oLrain for his Lusiness imperishaLle cash, vhich vas issued as rhe Lankers' paper-
money againsr a hoard of gold, and 2) ro gain access ro a ramified proprierary
(Lanking) grid, along vhich compurer-money rravels novadays, enaLling rhereLy
svifr, efficienr paymenr across rhe vorld.
Hov money is injecred inro circularion, ve all knov: Lanks morrgage furure
earnings and possessions (a person's, a firm's, erc.), and upon such collareral rhey issue
a loan, rhe repaymenr of vhich is ar rhe hearr of every single macroeconomic
chronicle of our race's hisrory. So, in rhe Leginning rhere is gold. Gold engenders
inreresr as vell as a paymenrs nervork. Inreresr is exacred from loans, Ly means of
vhich money reaches rhe popularion. The elemenrary difficulry arising our of rhis
Lasic arrangemenr is rhar, in rhe aggregare, rhe popularion, Ly definirion, can never
repay rhe loan plus rhe inreresr. So rhe original loans need ro Le conrinually re-
scheduled, ar rhe cosr of snovLalling inreresr dues, ro keep rhe economy in morion.
6

Theorerically, ve nov have an anchor in rhe sysrem: vhar Gesell calls Urzins
(Lasic inreresr). This is rhe fundamenral variaLle ÷rhe inirial condirion÷ upon vhose
dynamics rhe performance of rhe economy vill hinge. In Lrief, Gesell's Theory of
Inreresr simply holds rhar Lusinesses are inirially charged Lasic inreresr ÷a somevhar
invariaLle usurious hard core, vhich is imposed irrespecrive of any orher surrounding
economic condirions. Thereafrer, Lusinesses vill marker, arrange and/or currail
ourpur in viev of generaring sales rhar vill cover inreresr (i.e., overhead) plus
vharever enrrepreneurial profir rhey may squeeze our of rhe marker. Thus, vhar ve
call rhe ¨rare of rerurn" or rhe ¨inreresr upon capiral" of a Lusiness is ar all rimes
dicrared and driven Ly rhe money rares ser Ly rhe Lanking secror: inruirively, if
cenrral Lanks decide for vharever reason ro raise rheir rare, and consequenrly
commercial Lanks reacr Ly increasing rhe prime rare, Lusinesses srruggle accordingly
ro march rhe higher price of money Ly arrempring ro garner higher profirs. Such
8
pecuniary dearness vill perforce hurr rhe veaker segmenrs of rhe economy, vhich
vill immediarely Legin ro shed joLs.
Gesell rreared Urzins as some sorr of exogenous variaLle. He averred rhar rhis
hard core of usury (rhar is, inreresr, shorn of insurance premiums and adjusrmenrs for
inflarion) has oscillared in rhe lasr rvo millennia around an average of 4-5%. The
arrisrry of Lanking consisrs precisely in serring rhe rone for a scale of inreresr rares in
conjuncrion virh rhe economy's overall rare of profiraLiliry and rhe reflux of raxarion.
In orher rerms, cenrral Lankers musr guess a narrov range of values for rheir rare of
inreresr (rhe rriLure imposed for rhe privileged access ro rhe nervork), such rhar
Lusinesses vould nor Le Lurdened Ly rhese Lanking charges ro a poinr ar vhich rhey
vill have ro cease operarions, and such rhar rhe cirizens' vages vould Le capaLle of
affording familial susrenance as vell as rhe undisrurLed remirrance of inreresr Ly vay
of 1) raxarion (ro honor rhe puLlic deLr), and 2) privare rransfers ro credir card
companies (i.e., privare deLr). Meraphorically speaking, (cenrral) Lanking is nor
unlike rhe suLrle pracrice of Lleeding rhe Lody economic virhour sucking ir dry.
The Lloodlerring (deprivarion of leisure, recrearion, and pursuir of rhe arrs and
sciences) rhus foisred on rhe vorking many is also a more or less uninrenrional
deLilirarion of rheir soul faculries: ir is no vonder, as Thorsrein VeLlen ÷anorher
magisrerial, yer unheeded voice of anarchism÷ clearly undersrood, rhar conservarism
is exhiLired in a high degree amongsr rhe laLoring classes.
7

Thus ¨inreresr" yielded Ly (convenrional) imperishaLle money is rhe origin,
rhe inirial spark, of a generalized renr-crearing process: as rhe Lanker conrrols rhe
supply of money (gold is rhe scarce commodiry par excellence) and, for irs usage,
demands a roll from his cusromers, so is every single Lorrover (i.e. every indeLred
Lusiness) compelled ro recreare vis-à-vis rhe consuming puLlic rhe condirions
Lerveen irself and rhe money-lender (rhe Lank). Therefore, producers vill go ro
unimaginaLle exrremes ro shield rheir producrs virh engineered scarciry, rrademarks,
monopolies, parenrs, copyrighrs, and proprierary arrangemenrs of ever increasing
inrricacy ÷rhar is, rhey vill seek ro exrracr renrs from rhe consumprion and use of
rheir ideas, insofar as rhey rhemselves have ro pay money-renrs (inreresr charges) ro
rhe Lanking carrel rhar sponsored rheir enrerprise, rhey vill rry ro sell rheir goods for
more rhan vhar rhey are rruly vorrh, rhe gauge of rhe ¨mark-up" Leing, again, Lasic
inreresr. The enrrepreneur-deLror, hard pressed ro cover overhead (Urzins) rhus
pursues, as a rule, a rhree-pronged rourine: cosr-reducrion, renr-seeking (i.e., creare
¨scarciry" arrificially), and consumerisr hype (also knovn as ¨markering"). In rhis
fashion, inreresr Lreeds a never-ending spiral of preying of man upon man. Hence, rhe
origin of laLor exploirarion: rhe case of rhe employer srriving ro dispense ¨vorking
permirs" (joLs) in a regime of exclusiviry (Lecause of vhich, applicanrs resignedly
accepr a dismal pay-scale), hence rhe spravling of unsighrly archirecrure (¨cheap
housing, cheap designs") rhroughour rhe Wesr, compared ro vhich, personalized
carpenrry appears as yer anorher ¨luxury of rhe pasr", hence rhe case of spacious
9
American dovnrovn areas in vhich no free parking space is ro Le found (i.e., rhe
Ciry eliminares free-parking zones), and a million of orher such insrances, including
rhe far more disquiering, and yer ominously predicraLle, remprarion ro pur a price rag
on human life or limLs ÷virness famous DeLussy inrerprerer, pianisr Arruro Benederri
Michelangeli's insurance conrracr virh Lloyd's ro safeguard his ¨capiral equipmenr" ÷
namely, his hands. All rhese acruarial calcularions are inconceivaLle virhour inreresr.
The norion of ¨presenr value" is unrhinkaLle virhour ir.
8



Heresy. Heresy. Heresy. Heresy.

Monerary dynamics is a narrarion of pover, vhich, for anarchism is rhe
original sin, rhe afflicrion plaguing our endeavor ro live collecrively in peace. This is
pover rhar elires exercised locally, Ly commanding rhe laLor of orhers, via unearned
(¨renral") income, vhich, Ly lav, rhe Lanking nervorks channels ro rhem, and pover
exercised inrernarionally, rhar is, Ly rhe Unired Srares and irs sleepvalking European
sarellires over rhe resr of rhe vorld: ve recognize ir as ir spins rhar congeries of cross-
counrry upheavals, vorld poverry, scleroric grovrh, and orhervise inexplicaLle
inrernarional agreemenrs, lavs and counrer-lavs, and ever more sophisricared
financial insrrumenrs, marched Ly our confused neuroses aLour rhe overall healrh of
rhe planer.
SuLjecred ro rhe aLuse of monerary imLalances, rhe economy reacrs Ly
displaying symproms rhar rypically follov arLirrary srraining, such as inflarionary and
deflarionary ourLreaks. Borh effecrs, in facr, operare concomiranrly in our sysrem.
'

The years go Ly, and rhere appears ro Le no inherenr force in our sociery
capaLle of counrering rhe grovrh of indeLredness. Indeed, since 1979, finance, virh
rhe full insrirurional Lacking of rhe vorld's mosr poverful cenrral Lanks,
9
has loLLied
vigorously ro remove any such safeguard from rhe monerary make-up of our
economies. Things are such roday rhar no amounr of proresr, deLr rescheduling and
Lankruprcy legislarion is going ro rranslare inro some form of deLr÷exonerarion for
rhe vorking puLlic as a vhole.

'
Simply srared, virh inflarion, rhe rare of increase, if any, of an individual's income does nor keep up
virh rhe appreciarion of goods and services, vhich is irself, Ly definirion, rhe effecr of an unresrrained
process of money-crearion on rhe parr of rhe cenrral Lank. Deflarion, insread, is defined Ly a
generalized decrease of rhe price level, vhich is exceeded Ly rhe drop in people's incomes: rhis vas a
common scenario of pre-WWII capiralism. Like inflarion÷or everyrhing else for rhar marrer÷
deflarion originares in rhe srricrures of imperishaLle money, vhich is, indeed, hoarded vhenever
profirs are no longer capaLle of covering overhead. Money is rhen virhdravn, and unemploymenr
consequenrially rises. Gesell provided a simple rheorerical remplare ro accounr for all such
manifesrarions.
10
As long as economies handle rradirional (i.e. imperishaLle) money, vhich is
handed over in exchange for an exponenrially-groving fee÷inreresr÷rhere can Le
no flarrening our of rhe so-called Lusiness cycle, rhe rvo are inrimarely relared. The
vage-earners are simply nor allorred sufficienr purchasing pover ro sarisfy rhe vhole
of producrion, and rhe employers, via rhe Lanks, have rhe means Lur cerrainly nor rhe
desire ro cover rhe difference. The srandard capiralisr palliarive, as an over-zealous
Thomas Malrhus suggesred in rhe early XIX
rh
, cenrury is ro fund a perennial deLr Ly
Lorroving (rhe capiralisrs') money Lack inro circularion, and/or injecring cash via
deficir spending. The social ourcome of such redisrriLurive makeover, hovever, is rhe
Lreeding of an army of unproducrive consumers, such as varriors, lavyers, srare
officials, flunkies and courr deacons (like Malrhus himself)÷all occuparions creared
Ly rhe elire, paid for Ly rhe vorking hours of indenrured credir-card holders, and
furrher jusrified Ly rhe exigency ro prorecr rhe profiraLiliry of Lusiness.
'10
Ir is no
vonder rhar rhe ancienr HeLrev remission of all deLrs, ro Le scheduled ar regular
seven-rimes-seven-year inrervals÷rhe juLilee÷coincides virh rhe end of a
Kondrarieff cycle, vhich spans approximarely fifry years.
Inflarion. Clearly, vhen rhe mass of rhe deLr, puLlic and privare, has arrained a
dimension such rhar roday roughly a fifrh (possiLly more)
11
of people's incomes is
channeled rovard rhe remirrance of inreresr paymenrs, vhich marure as a marrer of
arirhmeric course upon rhe looming mass of rhe principal irrespecrively of rhe
aggregare dynamics of rhe economy, rhe oLvious consequence is a generalized
increase in rhe price level. On rhe one hand, producers discharge Lasic inreresr upon
rhe selling price.
12
And, on rhe orher, no marrer hov proficienr cenrral Lanks may Le
in damming consumer markers from rhe virrual oceans of magneric money rhey inpur
inro rhe paymenrs grid in order ro feed rhe deLr, such virrual ciphers vill perforce
spill over inro rhe sphere of rhe ordinary consumaLles. Hence rhe erosion of our
currencies' purchasing pover: inflarion can ar Lesr Le conrained, Lur never annulled
so long as ve depend upon an inreresr-driven credir machine.

.Trillions of dollars are required ro mainrain liquidiry in financial markers
generaring slighrly more rhan a hundred Lillion or somerimes (recenrly, in
corporare srocks) negarive amounrs of funds ¦.].
13


Deflarion. Though ours is an inflarionary environmenr, ir is nonerheless
sysremarically condirioned Ly deflarionary pressure. Semi-sraLle as rhey may have
larely Leen, ve knov 1) rhar prices are sreadily creeping up (Lecause of inflarion), and
2) rhar, in real rerms, rhey are high÷in orher vords, life is expensive. And in rhis

'
Full employmenr signifies grearer ourpur. Larger ourpur, in rurn, rranslares inro lov prices, and lov
prices generare lov profirs. Yer lov profirs cannor cover overhead. Therefore, in order ro shield
capiralizarion, rhe logic of inreresr dicrares rhar producrion Le resrrained, prices jacked up, and vorkers
laid off.
11
connecrion, ve should nor forger ro menrion rhar a ¨srrucrural" rare of
unemploymenr, as rhey say, of ar leasr 10 percenr seems ro have esraLlished irself as
rhe rule in rhe Wesr (America included).
14
This srare of dearness coupled virh quasi-
immoLile ner joL-crearion srems, of course, from rhe invererare Lusiness pracrice of
resrricring ourpur in order ro shore up prices, and rhereLy profirs and marker
capiralizarion. As argued hirherro, rhe ¨merir" of rhe lare Neo-LiLeral regime is ro
have ensured rhe perperuarion of rhis racir ¨rradirion," vhich VeLlen denounced as
¨saLorage,"
15
in a serring rhar has Leen somevhar unperrurLed Ly violenr oscillarions
in prices and employmenr.
So ir happened rhar a mere symLol, a roken, a virrual crearure÷money, vhich
oughr ro Le rhe mosr puLlic of all goods÷has Leen appropriared Ly a carrel of
merchanrs rhrough irs aLoriginal concenrrarion of gold hoards. The suLsequenr
developmenr of Lanking could Le seen as an impersonal drive ro disemLody rhe
norion of rime-resisrance from irs marerial supporr: in orher vords, ro exrracr rhe
¨pover of gold" from gold irself, as ir vere. Bankers have sysremarically endeavored
ro rid rhemselves of rhe encumLrances of precious merals: rhey do nor seek rhe
propinquiry of rhe yellov meral for irs ovn shimmering sake,
16
ir is rarher irs virrue ro
command inreresr rhar rhey srrive ro disrill, and rransfer ro rheir Looks, checks and
deLir cards.
The magneric impulses, vhich rhe Lank sells irs cusromers Ly morrgaging rheir
Lelongings and laLor, and vhose repaymenr is expecred under penalry of pecuniary
sancrion, courr injuncrion, or apprehension Ly rhe Lailiff, are srill exrensions of Lasic
inreresr. Money should indeed Le ¨elecrronic," Lur nor ¨sold" ÷roday ir is Lorh.


Rudolf Rudolf Rudolf Rudolf Sreiner Sreiner Sreiner Sreiner

The vord heresy comes from rhe Greek ΑιρεσιS ÷rhar is, ¨rhe faculry ro
choose." Rudolf Sreiner÷a hereric sui generis÷ claimed rhar freedom is rruly grasped
vhen rhe individual gains knovledge rhrough an acr of rhe vill: ve seize rrurh
Lecause ve vish ir, in villing ro possess a veriry, ve Lecome unshackled.
17

One such rrurh, ro Sreiner, vas, indeed, rhe Legging necessiry of insriruring
perishaLle money.
18
Ir vas inrriguing happensrance rhar rhis revolurionary norion vas
simulraneously and independenrly pur forrh Ly rhe leaders of rvo differenr currenrs
of Germany's communalisr srream.
In Sreiner's viev, money is an elemenr, like varer one may say, rhar undergoes
rransformarions. Ir exisrs in rhree qualirarively differenr forms: as purchase, loan and
gifr money. Each and severally, rhese rypes of money reflecr rhe economic process ar
differenr phases, and perform disrincr offices.
19

12
1) Furchase money is money as ve knov ir, and under vhich ve, erroneously
according ro Sreiner, suLsume all forms of pecuniary media. Ir is money virh insranr
rurnover. Ir is issued againsr goods rhar avair immediare consumprion.
2) The momenr a surplus is formed virhin a communiry, so rhar a Lundle of
goods (food and marerials), accompanied Ly rheir corresponding rokens (purchase
money) Lecome availaLle for ¨rransformarion," purchase money rurns inro loan
money: rhe farmers enrrusr a crafrsman virh rheir ¨savings." This money vill nov
accompany rhe saved resources rovard rheir rransformarion inro somerhing
qualirarively differenr: an invesrmenr.
3) Thanks ro invesrmenr, rhe surpluses accumulared vill Le such rhar a groving
porrion rhereof, vhich exceeds rhe needs of rhe savers, vill Le given avay. This
juncrure is of fundamenral imporrance: a parricular money-Lill rhar had srarred irs
invesrmenr advenrure long ago, and vhich nov corresponds ro some irem of rhe
surplus pool nor reinvesred in rhe cycle (Lecause of aLundance or rapid oLsolescence),
is mosr likely an ¨old nore"÷virh, say, aLour a year ro ¨live" Lefore expirarion, ir is
precisely rhis sorr of money rhar vill afford rhe supporr of rhe gifr economy.
When rhe gifr economy÷rhar secror of sociery consisring of reachers, sculprors,
priesrs, docrors, erc. ÷consumes irs share, rhe money perishes, and rhe associarions in
charge of rhe donarions vill Lring aLour a process of so-called ¨rejuvenarion" ÷rhar is,
rhey ¨Lurn" rhe dying nore and issue nev money in conjuncrion virh rhose economic
inreresrs ar rhe origin of rhe producrive cycle, namely farming (land), folloved Ly
indusrry and crafr (rools). Sociery in Sreiner's vision should consisr of a harmonious
inrerplay of rhree independenr, yer coherenrly enrvined, viral sysrems: lavs and
righrs, economics, and rhe arrs and sciences ÷his so-called Threefold Commonvealrh.
Free associarions of consumers, rraders and producers iron our conrrasrs and redress
imLalances amongsr rhemselves virh no resorr ro lirigarion. The sphere of rhe righrs,
echoing rhe Flaronic molding of jurisprudence in rhe Ciry Srare, vould define rhe
renor of a conducr of Lusiness rhar provokes no affronr ro rhe digniry of rhe vorker.
Finally, donarion should Le free, Lur one may presume rhar rhe process could Le made
more expedirious virh a lirrle help from rhe lavs (lirurgies, and mandarory alms).
Evenrually, rhe (dying) money is consigned ro foundarions rhar decide, under no
duress, rhe desrinarion of rhe gifr.

In rhe lighr of everyrhing rhar has Leen appraised so far, hov can rhe joinr
communalisr vision of Sreiner and Gesell provide rhe revolurionary means virh
vhich ro exringuish rhe roll imposed Ly erernal money and irs associared ills!
As hinred aLove, Gesell advanced rhe idea of ¨free," rhar is, perishaLle money
(Freigeld). Free-money comes essenrially in rvo varianrs: eirher as sramp scrip
(Schvundgeld or Schrumpfgeld, ¨depreciarive,'" perishaLle cerrificares), or rime-
sensirive vouchers (ALlaufgeld, expiring-money). Gesell seemed indifferenr Lerveen
rhe rvo oprions, rhough he confined his discussion ro rhe former, vhereas Rudolf
13
Sreiner favored rhe larrer varianr. Sramp scrip rakes rhe form of a paper cerrificare rhar
vould keep irs face value so long as rhe users vould affix a sramp (a so-called
demurrage fee)
20
upon ir periodically ÷say, every veek, or monrh. The device is
clever, as ir is designed ro effecr rvo crirical and inrerrelared oLjecrives ar once. On
rhe one hand, ir prevenrs rhe hoarding of money, vhich is rhe chief mechanism
responsiLle for sragnarion and unemploymenr (i.e., deflarion). Nores vould only Le
accepred so long as rhey vould Lear rhe veekly (or monrhly) sramp÷Lills only
parrially ¨sramped" vould Le accepred ar a discounr, rhe holder vould narurally Lear
rhe correspondenr loss. On rhe orher hand, rhis periodical sramping of rhe nore, as ir
changes hands over rhe course of a year, funcrions as a rax levied on rhe money
irself÷ir is ranramounr ro a negarive inreresr charged on rhe medium of paymenr.
The economic significance of rhis expedienr is fundamenral: rhis special rax, vhich,
according ro Gesell, should have cumularively amounred ro a deducrion in rhe range
of 5-12 percenr per annum, represenrs rhe average rare of depreciarion of all rhe goods
rraded in rhe economy during rhe given cycle. Thus, Gesell reasoned, money-rokens
are made ro mimic, ro reflecr rhe life-cycle of rhe merchandise vhich rhey represenr
and accompany in rhe course of mulrirudinous rransacrions. Once one of such Lills is
fully sramped, ir is expended one lasr rime, and ¨dies," rhe fully paid 5 percenr charge
indicaring rhar rhis one nore has fulfilled irs circularory oLligarions, so ro speak, and
signaled ar rhe rerminal poinr rhar our physical srock is Leing conrinuously used ÷as ir
should, for such are rhe economic vays of narure. Narurally, a dead Lill is replaced Ly
a nev one.
Equally effecrive for Gesell vas ALlaufgeld, mere paper-cerrificares Learing an
expirarion dare. The difference virh sramp scrip lay mosrly in rhe adminisrrarive
handling of rhe money. One could say rhar of rhe rvo rypes of Free-money, dared
Lills are Ly narure more anarchisric, in rhar rhey may funcrion virhour collecrion
agencies selling sramps on Lehalf of vhar vould Le, in facr, a (communally or
orhervise) cenrralized Financial Minisrry (or a Narional Currency Office, as Gesell
envisioned ir).
21
Wirh dared cerrificares, as ir nov indeed happens in several German
disrricrs (see Lelov), merchanrs may douLle as auronomous minring Lureaus, and
issue such paper ro rhe exrenr of, say, one percenr of rheir srock, virh rhe oLvious and
perennial oLjecrive ro energize exchange (sales) and elude ro a cerrain exrenr Lanking
fees. In rhis case, rhe negarive 5 percenr inreresr charge, vhich may Le spread across a
vide svarhe or spenders virh sramp scrip, is susrained almosr exclusively Ly rhe
issuing-Lusinesses rhemselves as rhey collecr rhe expiring cerrificares and replace
rhem virh nev ones: rhey call ir a ¨usage fee" (ir is rhe self-same demurrage device
¨incorporared" inro rhe paper), vhich is from rhe rerailers' srandpoinr vell vorrh
paying in exchange for guaranreed and sready sales.
Money rhar is nor advanced in exchange for inreresr generares no deLr.
Therefore, rhere vill Le no compulsion ro roll over deLrs and command inflarionary
issuances of cash ro supporr rhe inreresr paymenrs rhar emanare from rhem. On rhe
14
orher hand, rhe Luilr-in no-hoarding provision, Ly forcing circularion, sraves off
deflarionary counrer-forces and ends up freeing rhe full producrive porenrial of rhe
communiry. As a resulr of an orderly and indusrrious surge of acriviry, srocks of all
goods vill Le so increased rhar rhe rare of rerurn on invesrmenr vill Le gradually
driven ro zero. Which is nor ro say rhar individuals may nor Lecome prosperous virh
free-money, quire rhe opposire, in facr: rhe novelry lies in rhe realizarion rhar,
unencumLered Ly rhe oLligarion ro remir inreresr, developers, for insrance, vould no
longer Le impelled ro curL rhe expansion of housing in order ro exrorr high prices
from rhe puLlic, virh vhich ro cover overhead (inreresr charges). More houses, more
rhings vould rhus Le produced, and incomes and vealrh for rhe communiry as a
vhole vould Le augmenred as a consequence.
Unlike Gesell, vhose acrivisr imparience compelled him ro rhink srill in rerms
of a cenrralized minring Lureau, rhe no less reform-anxious Sreiner kepr his anarchisr
cool, so ro speak, Ly focusing rarher on rhe arriculared cooperarion of a faLric of
associarions. In his viev, rhese Lodies vould coordinare policy, iron our inefficiencies,
and moniror arrenrively rhe irinerary of money: from irs narural source, agriculrure,
ro irs rerminus, rhe arrs & sciences, Ly vay of manufacruring. In rhis sense, each
regional minring office vould have ro Le a rri-arriculared insrirurion srrucrured
according ro rhe ¨ages of money," in vhich, in rhe Lesr classical rradirion, rhe
preeminenr role vould Le reserved for rhe councilors of rhe spirirual sphere÷as in
rhe remple of Arhena, vhere rhe priesrs vould minr rhe ovl on rhe coins of rhe ciry.

Translaring rhe concepr of rime-sensirive money inro rhe Linary idiom of
modern-day elecrronic circuirs presenrs no difficulry. Wirh proper legal disposirions,
Lanks could Le made ro implemenr rhe reform ar once. The checking accounr, upon
vhich individuals vill drav virh magneric deLir cards, vould rhen Lecome rhe
recepracle of free-money. An average depreciarion levy, vhich vould Le calculared
Ly a Lureau of srarisrics Ly evaluaring rhe rario of goods ro services and rhar of
duraLles ro perishaLles, could Le accordingly imposed on ir, daily, veekly, or even in
real rime.
'
Wharever is nor spenr on ordinary rransacrions may Le deposired in a
savings accounr. Hov is one ro save virh dying money! Simple. Once rhe savings are
enrrusred ro rhe Lanks, ir Lecomes rhe Lankers' responsiLiliry ro consign rhese funds
ro capaLle enrrepreneurs, vho have rhus rhe rask of fighring depreciarion in rhe
cusromers' sread. In rhis sense, a zero-inreresr rare srill represenrs a viaLle proposirion
for rhe savers, vho are rhereLy guaranreed: 1) a profusion of invesrmenr rhanks ro rhe

'
This provision need nor Le regressive. Relarively less affluenr cirizens, vho hold Ly definirion a
proporrionarely grearer porrion of rheir vealrh in liquid assers, may Le compensared for rhe levy in
various forms: Ly exempring deposirs up ro a cerrain dollar limir, or rhrough social dividends and orher
communal suLsidies.
15
no-hoarding condirion, and 2) rhe securiry of seeing rhe face value of rheir nesr egg
preserved rhrough rime.


The Trials of Regional Currencies The Trials of Regional Currencies The Trials of Regional Currencies The Trials of Regional Currencies

Novadays, mosr, if nor all, regional schemes implemenred in Germany and
European surroundings have Leen direcr filiarions of Sreiner's and Gesell's original
inruirions.
Organizarions ro diffuse rime-dared money vere ser up in Germany as early as
1919, in concomirance virh Gesell's personal drive ro see rhis reform rhrough. Bur ir
vas nor unril 1931 (one year afrer Gesell had died), in rimes of acure crisis, rhar such
organizarions aroused general norice. Chronologically, rhe firsr successful experimenr
virh Gesellian sramp scrip vas arrempred ar rhis rime Ly a mine ovner, Herr
HeLecker, in rhe Bavarian coal rovn of Schvanenkirchen. For over rvo years rhe
mine had Leen closed and ¨rhe village had Larely exisred Ly means of rhe dole."
HeLecker, vho had previously heard of rhe Gesellian associarions, resolved ro apply
rhe concepr. Shorrly rhereafrer rhe resulrs vere reporred ro Le ¨miraculous," so much
so rhar rhe rovn's revival made vorld headlines. The reasons vhy rhe solurion
vorked insranrly vere essenrially rvo: firsr, rhe size of rhe communiry, vhich
counred a mere 500 persons, and, second, rhe self-conrained narure of such a
communiry: Schvanenkirchen vas an economic microcosm, orLiring around irs coal
mine. Wirh perfecr economic logic, as seen from Sreiner's angle, ir vas rhe individual
responsiLle for operarions ar rhe ¨Lase"÷earrh's povers of susrenance, i.e., rhe
mine÷vho convinced rerailers ro accepr rhe scrip virh vhich rhe miners vere going
ro Le paid.
'
Rerailers, in rurn, persuaded vholesalers, and rhe local vholesalers
managed ro pass rhe scrip across regional Loundaries. And so Lusiness vas revived
rapidly rhroughour rhe region as ir pulled irself along a nev chain of solidariry.
IneviraLly, some nores svam all rhe vay up ro rhe regional offices of rhe ReichsLank.
The success vas so svifr and rhrearening rhar rhe Reich had ro forLid sramp scrip Ly
means of an emergency lav, claiming rhar ir represenred an illegal usurparion of a
governmenr prerogarive.
22
One year afrer Schvanenkirchen, rhe mayor of Wörgl,
inrroduced Gesellian money inro rhis Ausrrian rovnship, irself palsied Ly an
unemploymenr rare of nearly 50 percenr. As communal employees, led Ly rhe mayor,
agreed ro receive half rheir salaries paid in scrip, vhile emergency vorkers rook 100
percenr in rhar form, economic acriviry flourished again. Nor only vere pasr
oLligarions fulfilled Ly means of rhe emergency money, Lur significanr puLlic projecrs
vere carried our inro rhe Largain.
23


*
In other words, Hebecker acted in the capacity of emergency mint.
16
The scrip funcrioned and ir couldn'r have Leen orhervise. These vere
inrelligenr provisions: demurrage fee (rhe sramp rax), a ¨conversion" fee grearer rhan
rhe monrhly money-rax (as vas rhe case in Wörgl) ro discourage rhe people's early
and precipirare exchange of sramp scrip Lack inro ¨official" schillings, parronage (ar
leasr one Lank and several Lusinesses sponsoring rhe proposal), guaranreed reflux
(acceprance of rhe scrip for rax paymenrs), and local commirmenr (a local nore could
only Le spenr, ar leasr inirially, ¨locally"). Then reformers could dream on and
envision rheir scrip rraveling ro a neighLoring Lorough, and rherefrom ro anorher, ad
liLirum. Unril, rhe Lanking nervork could Le alrogerher Lypassed, as a parallel veL of
murual credir and parrnership vould have Leen sysremarically voven Ly rhe
arachnids of communal irredenrism.
Given rhe sevenry-year hiarus rhar separares rhese original experimenrs from
rhe lare surge of regional iniriarives, rhe chronicles of Schvanenkirchen and Wörgl
have risen ro rhe srarus of myrhical anrecedenrs in rhe general parrimony of
communal reform. Oving ro rhese roors, ir is no accidenr rhar roday Germany is ar
rhe forefronr of rhe reformisr imperus. According ro a recenr survey, rhere are nearly
rhirry differenr regional currency schemes in Germany,
24
and several more are in rhe
vorks (roughly fifry orher projecrs). Mosr noraLle amongsr rhese so-called
¨complemenrary currencies" are MagdeLurg's Ursrromraler and rhe Chiemgauer,
25

Lorh of vhich have received media exposure, as vell as Düsseldorf's Rheingold and
rhe Freie Deursch Mark (FDM) of Frankfurr. All rhese cerrificares, virh rhe exceprion
of rhe Chiemgauer, vhich is a re-edirion of pure Gesellian sramp scrip, are rime-dared
vouchers.
26
Josr Reinerr's Rheingold exchange-ring, as an add-on fearure, promores
local arrisrs Ly reproducing rheir vorks on rhe nores. The money rax charged on rhese
currencies varies Lerveen 3 and 8 percenr, 5 percenr Leing rhe norm. When alloved,
an addirional fee is added for redemprion in euros. The exchange rare virh rhe euro is
ser Ly some issuers ar 1:1, and Ly orhers, keenly fearful of cenrral Lanking's
inflarionary procliviry, ar 2 euros for 1 ¨regio."
27
The Chiemgauer, for insrance, is rhe
Lrainchild of a former reacher of a Sreiner-Waldorf school, rhis parricular currency is
presenrly accepred in 550 shops and relies on a minring nervork of 40 offices.
These are promising Leginnings. The overall volume of Lusiness moved Ly
complemenrary currencies is srill very small, hovever, and nor all such schemes have
Leen Llessed virh srarr-up success÷Giessen's Jusrus, for example, recenrly folded.
The oLsracles on rhe parh ro diffuse implemenrarion are several: firsr and foremosr is
rhe rival pover of rhe incumLenr Lanking sysrem, confidenrly relianr as ir is on a vasr,
capillary nervork of paymenrs and commercial links, vhich has Leen implanred,
developed and laid our virh dedicarion and experience for rhe pasr several cenruries.
Second is rhe gloLalizarion of supply, vhich has progressively deprived communal
nuclei of legal and economic clour, and rhereLy rransformed rerailing inro rhe highly
cenrralized, huL-and-spokes formar of rhe varehouse-sryle supermarkers. Finally, rhe
exclusivism virh vhich cerrain of rhese experimenrs vere Lorn has confined rheir
17
currencies ro Leing an upper-middle-class luxury, incapaLle Ly narure of oversrepping
rhe resrricred Loundaries of privilege.
Alrhough rhese are daunring hurdles, rhe damages perperrared Ly rhe
prevailing economic esraLlishmenr have Leen hirherro deemed sufficienrly profound
as ro elicir regional iniriarives all over rhe vorld. Acrivisrs rry ro moniror rhese
developmenrs as Lesr as rhey can, and so far rhey have reckoned rhar approximarely
165 full-fledged local exchange sysrems have Leen launched in 28 counrries.
28

Inreresring happenings have also Leen afoor on rhe American conrinenr.
29

Fully-funded currencies like rhe Toronro Dollars (rhe plan vas iniriared in
1998), for insrance, are Lacked Ly Canadian Lank-money ro rhe exrenr of a hundred
percenr,
30
rhey fearure a ren percenr discounr fee for ¨redemprion" (i.e., conversion
inro legal render),
'
have a course of rvo years, and are redeemed nine rimes our of
ren÷rhe unredeemed ren percenr, along virh rhe cash rerained for earlier redemprion
rhrough discounr is devored ro chariraLle endovmenrs: namely, gifr money.
Whar one oLserves in rhis case is a mimicking of rhe ¨perishaLle-money"
model. Againsr rhe Lackground of rradirional monerary rule, cerrain local
consriruencies appear ro have Leen granred rhe liLerry ro reclaim from commercial
Lanking slivers of rhe economic landscape. FresumaLly, corporare Lanking inreresrs
are villing ro Lrook such concessions if rhe overall Lusiness profiraLiliry in a semi-
depressed enclave is such rhar rhe oprion of 1) loaning ir a large sum for, say, rhe
Lacking of fully-funded scrip, and rhar of 2) loaning ir an inferior amounr for
cusromary Lusiness (earning proporrionarely more inreresr rhrough higher rurnover),
are equally lucrarive. In rhis sense, rhe circularion of fully-Lacked scrip like rhe
Toronro Dollar, even if ir carries rhe Gesellian demurrage device amounrs ro no more
rhan a parrial vicrory of rhe communal inreresrs, for rhe Lanking carrel can Lring a
rapid end ro rhe scheme, should ir resolve do ro so on a vhim, Ly recalling rhe
Lacking issue (of imperishaLle dollars).
Furrhermore, examples of ¨rrue communiry currencies" are rhe various
sysrems of Larrer, svap and murual credir arrempred in rhe pasr decades, including
Irhaca HOURS, ,, , LETS (Local Exchange and Trading Sysrem), and THANKYOUS.
31
Such
media have funcrioned virh varying degrees of success. Since 1991, HOUR Tovn, a
local raLloid in Irhaca, NY, has issued scrip ro Lusinesses rhar Loughr adverrising space
in cash, adverrisers vould puLlicize rheir villingness ro rransacr in scrip, and receive
a parriciparory (flar) premium in Irhaca HOURS for goodvill ÷rhis scheme is rhus
somevhar of a hyLrid, for rhe scrip is loosely covered. One HOUR is symLolically
equivalenr ro an hour's vork, , , , rhar is, circa ren official U.S. dollars. Folloving a Lrisk
resumprion of acriviry, rhe arrangemenr rurned inro a full-Lodied ourfir, inclusive of
non-profir srarus, a Loard of direcrors, and faciliries for rhe allocarion of loans and
granrs. The Irhaca scrip affords no sripularion for demurrage (depreciarion charge for

'
The oprion is availaLle only ro Lusinesses
18
perishaLliry), hovever, and rhere appears ro Le no merhodical equiliLrarion Lerveen
issuance and reciprociry: ir is nor rhe Lusinesses, or associarions rhereof, rhar prinr rhe
cerrificares, Lur rhe nevspaper, vhich, rherefore, acrs mosrly as a Lureau of minring
and prinring, so ro speak, and qualifies as an issuer proper only vhen ir acceprs rhe
scrip in paymenr for adverrising space.
32

The regional svap nervork of rhe LETS has had mixed resulrs, rhe chief
proLlem Leing lack of Lusiness involvemenr. The individual is rhe issuer of LETS, and
murual cooperarion amongsr parricipanrs is relied upon ro redress chronic imLalances,
vhereas a THANKYOU is a loosely quanrified oLligarion÷an acknovledgmenr of
receipr÷ro reciprocare services rendered and goods acquired ar a discounr on a
memLers-only suL-loop of rhe vorld vide veL, hosred in California, called Friendly
Favors, launched in 1999. This virrual league appears ro Le an erherealizarion of rhe
gifr economy: aLove a cerrain amounr of THANKYOUS, a 1% demurrage charge is
deducred from monrhly Lalances, and a 10% ¨rirhing" of all THANKYOUS is melred
inro non-profir endovmenrs÷a gifr virhin rhe gifr.
Indeed, virh our mind's eye, ve find ourselves surveying rhe vhole specrrum
of monerary possiLiliries: from an early srory of rime-sensirive Lills issued Ly a Mr.
HeLecker in conjuncrion virh coal dovn ro rhe lasr srage of an affluenr region's
Lazaar of requiral, California's Friendly Favors. From free-money ro gifr money, via
savings Ly vay of loan money ar zero percenr inreresr: Gesell and Sreiner in one. And
rhe people seem ro knov already, inruirively, hov ir all vorks, vhar free-money
rherefore needs is rhe proper humus÷a Threefold Social Commonvealrh vill do, rhe
resr is child's play.


.And Surrender .And Surrender .And Surrender .And Surrender

On ar leasr four noraLle occasions in rhe lasr nine years, spokespersons of rhe
invesring inreresrs have come our in rhe open ro rackle rhe norion of dying money.
Berveen 1999 and 2003, indeed, America's and Brirain's cenrral Lanks sponsored
research papers in vhich÷vonder of all vonders÷nor only vas Gesell menrioned Ly
name, Lur his ¨carry rax" on money vas canvassed as a viaLle remedial rool for
overcoming rhe macroeconomic difficulries of rhe day. This vas rarher jolring:
imagine Cardinal Bellarmino calling on Galileo for an asrrological reading.Urrerly
galvanized, cerrain facrions virhin Germany's Gesellian rriLe rhoughr rhey vere
seeing ar lasr rhe hand of Lanking oursrrerched rovard rhem, offering collaLorarion.
Bur appearances vere deceprive, alas. Sure enough, ar rhe rurn of rhe rhird
millennium, cenrral Lanks vere vorried, as ve sav earlier, Ly rhe lov level of
inreresr rares rhar had serrled afrer rhe dorcom rumLle. The rares vere so lov, in facr,
rhar, shorn of inflarion, rhey vere approximarely equal ro zero. Ir so came ro pass rhar
19
monerary policy, as rhe aurhoriries lamenred, vas sruck in rhe ¨liquidiry rrap" of rhe
¨zero-inreresr-Lound": in orher vords, rhe sysrem found irself poverless ro revive
aggregare demand Ly means of fiscal expansion÷i.e. Ly selling Treasury Londs, vhose
rock-Lorrom yields offered, in facr, no incenrive ro invesrors: rares vere such rhar ir
made virrually no difference vherher one held vealrh in cash or T-Lills. This vas
Gesell's classic deflarionary scenario, in vhich Lanks, replere virh cash, forLear from
invesring ir for lack of profiraLle opporruniry ÷vhich is ro say, rhar so long as money
is nor guaranreed a real remunerarion of ar leasr 4 per cenr or so (Urzins, Lasic
inreresr), ir virhdravs in rhe virrual recesses of rhe nervork in vair for Lrisker rimes.
Meanvhile, folk ain'r vorkin'.
Ar rhe rime, a fev puLlicisrs recommended rhar cenrral Lanks go on prinring
money freely and cause rhereLy a Lig inflarion. Inflarion, Ly eroding rhe purchasing
pover of rhe hoarded money, vould hopefully flush irs ovners from rhe Lrush of
inacriviry, forcing rhem ro dis-hoard rhe cash and spend ir.
33
Clearly, vhar vas Leing
groped for in rhis case vas a negarive rare of inreresr÷precisely Gesell's rax, vhich
vould yer Le induced underhandedly, as ir vere, Ly causing rhe rare of inflarion ro
exceed rhe going rare of inreresr. The hoarding masses vould rhus find rhemselves
coerced ro ¨rake refuge" inro spending rhe dollars rhey has so carefully rreasured
rhererofore. Yer, cenrral Lanks, vhich Ly narure aLhor generalized inflarion, can
never approve of so enrropic a suggesrion. All rhe more so÷and rhis vas rhe crux of
rhe issue÷as an accelerared injecrion of liquidiry inro rhe vorld markers mighr have
unnerved domesric, and especially foreign invesrors, and prompred rhem ro unload
Lillions' vorrh of U.S. Treasury Lills, virh rhe vell-knovn and parlous consequences
rhar rhe Unired Srares had svorn ro irself since 1979 never ro virness again.
The opening shor vas rhe Bank of England's, vhich in 1999 preconized rhe
imposirion of a negarive rax on currency, expecring rhereafrer rhar rhe Lanks
rhemselves vould apply ir on deposirs.
34
The folloving year a paper of rhe Richmond
Lranch of rhe Federal Reserve called for rhe same oprion, in conjuncrion virh
aggressive purchases on rhe parr of rhe cenrral Lank of long-rerm Treasuries, vhose
higher rares srill offered some room for maneuver (i.e., Leing higher rhan zero, rhey
could srill fall).
35
In lighr of rhese policies, ir vas hoped rhar rhe privare secror vould
¨adjusr": lover long-rerm yields vould Le counred on ro spur rhe puLlic's inclinarion
ro dis-save and consume, vhile higher Lond prices, on rhe orher hand, vould
generare capiral gains, vhich could, roo, srimulare rhe invesrors' consumprion. By
2003, vhen rhe Federal Reserve Bank of Dallas addressed once more rhe issue of rhe
zero-Lound, rhere seemed, hovever, ro Le no longer any fancy of roying virh rhe
Gesellian remedy, vhich vas dismissed as ¨Lold Lur impracrical": rhe Fed had finally
deliLerared rhar no anri-deflarionary cure orher rhan rhe policy of open marker
operarions involving long-rerm deLr vould Le conremplared for rhe purpose.
36

20
In rhe end, of course, norhing came of rhis srrange Lrainsrorming inrerlude in
rhe Gesellian key. Bur vhar had Leen rhe meaning of ir! And had cenrral Lanking
really Leen courring heresy!
Nor quire. The reason for envisaging such a radical solurion ar rhar parricular
rime hinged, as alvays, on America's capiral imperarive ro srand as rhe vorld's
clearing union and unchallenged financial marker (see Farr 1 of rhis Essay, Vol.
171:1): rhe pover ro arrracr capiral ro Wall Srreer is, as ve've argued, rhe sine qua non
for mainraining such a posirion of vorld command. Seeing rhe posr-dorcom economy
Logged dovn Ly zero-inreresr rares, and a dollar rhar vas nor veak, yer nor srrong
enough ro do anyrhing aLour ir, a segmenr of cenrral Lank analysrs musr have Leen
pressured ro come up virh some sorr of clever policy rvisr, and ended up Ly
unearrhing pell-mell Gesell's hererodox medicamenr.
So, clearly, Ly means of rhis ¨Lold" device, rhe hyporherical plan vas ro arrracr
ro rhe financial and physical markers of rhe Unired Srares liquidiry rhar had, for rhe
rime Leing, vanished ¨underground." In rhis connecrion, rhe Bank of England
speculared, mosr inreresringly, rhar a carry rax on U.S. dollars, 70 percenr of vhich are
held aLroad, vould also Lring in significanr revenue from rhe chesrs of foreign
invesrors and cenrral Lanks (¨exrernal seignorage"), as vell as from rhe criminal
economy÷irself invoicing mosr of irs rransacrions in greenLacks.
37

Indeed, rhe overall rurnover of organized crime is esrimared ro Le vorrh more
rhan of 2 rrillion dollars per annum, over 900 Lillions of vhich claimed Ly narcorics
alone,
38
and rhis is nor ro menrion arms and gloLal rax evasion (elusion of rhe gifr),
Lorh Leing, virh insignificanr exceprions, cash rrades of exrraordinary magnirude. For
insrance, mosr U.S. $100 Lills are shipped in Lales Ly rhe Fed across rhe vorld ro
Russia. As a rule, rhe cenrral Lank pays rhe U.S. Treasury four cenrs per
manufacrured Lill and resells ir ar face value: vhen queried Ly rhe FBI aLour parrerns
of money laundering, rhe Fed is generally uncooperarive.
39

The Lanking grid is nor in rhe dark as far as rhese flovs are concerned, quire
rhe opposire. Tax heavens operare as rhe invisiLle nodes of rhe nervork, rhey are rhe
cash vaulrs of rhe Llack economy, forming rhe svirchLoard of a vasr inrerface
plugging rhe ¨clean" Wesr ro rhe ¨dirry" Sourh Ly vay of inroxicanrs, fiscal
delinquency, veapons, and slavery.
The Lanking nervork does nor yer appear ro vanr ¨free-money": larely, ir had
Leen only claiming irs cash Lack. Unsurprisingly, ralk of zero-Lound quicksand and
sramp scrip has nor Leen heard of in Lanking circles ever since rhe Dallas paper÷and
for good reason, considering rhar in 2003, as rhe housing LuLLle had Leen rapidly
inflaring, foreign monies had come pouring in once again.
To dispel any douLrs as ro Lanking's insrincrive hosriliry ro Gesellian
economics, one need only consider rhe laresr insrallmenr of rhis official Lrush
Lerveen perishaLiliry and rradirional Lank-money in rhe form of a 50-page reporr on
Germany's regional currencies commissioned in 2006 from a local academic Ly
21
Germany's cenrral Lank, rhe BundesLank. This is an inreresring documenr, nor so
much for irs conrenrs as for irs organizarion, vhich is raken up for rhe mosr parr virh
enrirely furile marhemarical roy-models prerending ro ¨prove" rhe vrongness of rhe
concepr underlying regional currencies. Thus, afrer having cooked up rerrifying
esrimares of rhe velfare loss purarively enrailed Ly a vider diffusion of regional
currencies, rhe aurhor concludes his reporr virh a hopeful nore remarking rhar ve
need nor yer vorry, for rhis phenomenon remains ¨negligiLly small." More rhan
anyrhing, rhis very documenr, virh irs virrual aLsence of insrirurional argumenrarion,
and rhe somevhar supercilious rone of rhe exposirion ÷vhich is rhe narural
complemenr ro rhe cririque's inconsequence, is rhe symprom of a general sense of
unease on rhe parr of rhe Lanking communiry in viev of vhar ir perceives as
encroachmenr.
40


The puLlic's apprehension of all rhings monerary is roday no less rhan
yesreryear, a shamLles. Mosr individuals, vho handle money daily as a marrer of
course, do nor knov, on rhe orher hand, vhy rhey pay inreresr, vhere inreresr comes
from, hov money is creared, vhar irs relarionship is ro gold, or, say, vhar a cenrral
Lank essenrially is and does.

The poor generally don'r knov ¦vho rhe Governor of rhe Fed is] vhile rhe
middle class doesn'r undersrand him. Too many Americans don'r have a clue
as ro vhar he does, an ignorance rhar rhe Federal Reserve ¦has] alvays
preferred, even culrivared, and vill likely conrinue ro prefer and culrivare.
41


The desire on rhe parr of irs chief managers ro make money an arcanum has
logically elicired rhe need for a ponderous propagandisric appararus, vhose
¨informarive/educarional" duries have Leen shared more or less equally Ly rhe press
and academia. As knovn, rhe rhroughpur of ¨economic commenrary" issuing from
Lorh organs for rhe pasr fifry years has Leen posirively overvhelming. Whar rhis
flooding of informarion has accomplished is ro have oLscured rhe monerary quesrion
furrher Ly Lringing inro higher relief pre-exisring srrands of an hisrorical deLare rhar
has revolved around merhod rarher rhan suLsrance. Ir is rhe merir of Folanyi's classic
analysis in The Grear Transformarion ro have esraLlished rhar all grear insrirurional
clashes rhar have puncruared rhe developmenr of capiralism have Leen primarily
vaged Ly rhe rvo leading facrions of LiLeralism irself÷namely, ¨rhe so-called
¨progressives" (or ¨liLerals") and ¨rhe conservarives." Which is ro say rhar rhe validiry
of rhe monerary esraLlishmenr as such has never Leen, and is never ro Le quesrioned,
vhar is alloved, insread, is ro argue aLour hov Lesr ro manage ir. And in rhis sense÷
as Llunrly exemplified Ly American polirics÷rhe choice appears mechanically
confined ro eirher rhe progressive, so-called ¨Keynesian" oprion of governmenral
(parr-rime) inrrusion inro rhe enrrepreneurial field, or rhe conservarive, ¨RepuLlican"
22
preference for an unLridled plurocraric privarizarion of all assers and rhe concomiranr
relegarion of rhe Srare ro rhe role of a surplus-commissioning Luffer. Of course, rhings
in realiry have never Leen so dichoromic, for rhe sysrem has Leen vonr ro display ar
all rimes shifring arrangemenrs rhar have Leen rhe endless and convolured fruir of
compromise Lerveen rhe rvo posirions.
Money-vise, rhe ironies of our srory are droll enough in rhar, no marrer hov
eager professional economisrs have Leen eirher ro slighr or ridicule rhe norion of
rime-dared money, rhe larrer had acrually Leen raken seriously Ly rhe respecrive
parron sainrs of rhe rvo schools of rhoughr. The liLerals' idol, J. M. Keynes (1883-
1946) of CamLridge Universiry, congenirally incapaLle of coming up virh an original
concepr of his ovn÷ler alone a simple, poverful rheory of inreresr÷ lirerally srole
Gesell's. Though he clearly sav rhar he could profiraLly manipulare rhe heurisric
value of rhe Gesellian insighr, according ro vhich Lusiness paralysis is caused Ly
profirs rares sinking Lelov Lasic inreresr, Keynes appeared ro have feared rhe
radicalism of sramp scrip, vhich he discarded on grounds of impracricaliry, again.
42

On rhe conservarive corner of rhe LiLeral sandlor, Irving Fisher (1867-1947) of Yale
Universiry vas, insread, an enrhusiasric advocare of Gesell's scrip as an emergency
device, yer a derracror of his rheory of inreresr: Fisher did nor Lelieve rhar rhe
inrroducrion of ¨free-money" could possiLly lead ro rhe aLolirion of inreresr.
43
Thus
cloven, rhe Gesellian file has Leen laid ro resr, years ago, ar an avkvard angle. And,
cerrainly, ir is also from rhese early, parrial endorsemenrs rhar have issued rhose odd
programmaric papers from cenrral Lanks on rhe ¨zero-inreresr-Lound."
All of vhich facrors, vhar virh rhe lare condemnarion of rhe idea Ly rhe
BundesLank, make for a landscape rhar no inreresred cirizen could nor Lur find
exrraordinarily confusing. In rhe sphere of monerary Lelief, rhe fairhs up for adoprion
jusr seem ro Le roo many, and rhe disagreemenr reigning over and among rhem is
complere. By vay of conclusion, ler us rhen Lriefly reviev rhe major creedal srrains
presenrly availaLle on rhe ¨marker of ideas" aside from rhe communal oprion:
1) In posirion of command ve find rhe (cenrral) Lankers, vho have had rhe
oprion of vaking up on eirher rhe Keynesian or rhe (havkish) inflarion-fighring side
of rheir Led depending on rhe polirical exigency of rhe day. These vish essenrially ro
perfecr a sysrem of managed, virrual fiar money, vhich is made ro acr as if ir vere
gold, virhour Leing cumLered, hovever, Ly rhe physical and exrracrive consrrainrs of
rhe yellov meral. This is rhe financial appendage proper of roday's pover srrucrure.
And, as ir is ro Le expecred, nine our of ren vords of all vrirings devored ro rhe
money quesrion are drafred in irs defense.

Alan Greenspan has resrified Lefore Congress rhar ¨a cenrral Lank properly
funcrioning vill endeavor ro, in many cases, replicare vhar a gold srandard
vould irself generare."
44


23
The orher srrains are represenred, properly speaking, Ly fringe movemenrs:

2) Gnaving curmudgeonly ar rhe peripheral Lranches of rhe Lanking keep, rhe
deplered svarms of so-called gold-Lugs offer a curious specracle. Much as rhe
monarchisrs of yore vould self-righreously navigare rhe RepuLlic's Conservarive
mainsrream, yer virhour ever disovning rhe golden idols of days gone Ly, modern-
day advocares of a Gold Srandard pose as rhe Righr's puriranical ving in monerary
marrers. In rheir ¨LiLerrarian" viev, only a srricr rerurn ro a sysrem of money-
issuance ried ro a rangiLle srock of noLle meral can cure fiar money of irs inflarionary
dissiparions. Especially since rhe presidency of Reagan, a closer Lug himself,
45
and
induLiraLly lifred Ly rhe infinire amLiguiry of cenrral Lanking's relarionship ro gold,
rhe Lullion aficionados have managed ro rerain a foorhold in rhe arena. This rhey have
achieved Ly occasionally producing sharp cririques of currenr monerary policy,
46
and,
mosr imporranrly, Ly rurning diffuse popular resenrmenr againsr Lanking's monopoly
ro rheir advanrage virh rhe nor unsuccessful launch in rhe Unired Srares of a privare
Larrer sysrem animared Ly a silver/gold coinage called rhe LiLerry Dollar.
47
The
endorsemenr of rhe larrer scheme Ly presidenrial candidare Ron Faul,
48
vhose effigy
vas rhankfully engraved on a special edirion of rhe nervork's coins,
49
nor ro menrion
rhe sensarional raid Ly rhe FBI on rhe Indiana Lranch of rhe associarion and rhe
concomiranr sequesrrarion of irs gold and silver hoards in NovemLer 2007,
50
have
douLrless srrengrhened rhe gold-Lugs in rheir convicrion. Though rhey have rhus
managed, like Germany's regional currencies, ro make rhemselves a nuisance in rhe
eyes of rhe Lanking inreresrs, ir remains nonerheless rrue rhar rhe gold-Lugs' nosralgic
recidivism represenrs a serious drag on rhe reformisr elan. The proLlem, of course, is
rheir insrirurional Llindness, so ro speak: ir is as if rhey villfully ignore rhar rhe
sysrem ve have is a perfecrly consequenr evolurion of a monerary srandard originally
harnessed ro gold, vhich rhey anachronisrically ferishize. The quinressenrial
illusrrarion of rhis realiry is indeed rhe renure of ex-Fed Chairman Alan Greenspan,
vho, from Leing an ardenr Lullionisr venr on ro Lecome one of fiar money's mosr
appreciared srevards: rhe rransirion vas splendidly consisrenr, and yer rhe gold-Lugs
sruLLornly refuse ro see ir rhus, choosing insread, dafrly, ro condemn rhe likes of
Greenspan as rrairors.
51

3) Nor long ago, an even more marginal segmenr of rhe free-marker diehards
had Leen floaring rhe norion of ¨free-Lanking," vhich implies rhe comperirive
issuance of (imperishaLle) dollars Ly rival Lusiness concerns. This is rhe mad dream of
vanring ro see a flurry of ¨corporare minrs" ÷say, General Elecrric's, Cirigroups's,
Coca-Cola's, along virh rhe narional governmenr's÷all of rhem compering for rhe
puLlic's parronage of rheir ¨proprierary dollars." Here ve virness yer anorher
variarion of rhis school's imaginary crusade againsr rhe LugaLoo of puLlic
adminisrrarion for rhe sake of corporare supremacy, for vhich, inrimarely, rhey
alvays perorare. This proposal, in lighr of irs irrelevance, need nor derain our
24
discussion much longer for ve have already explained rhar: a) non-financial
corporarions do indeed spavn, vhen condirions allov ir, financial suLsidiaries, L)
money is managed Ly a peculiar, privare carrel, nor a puLlic one, and c) currhroar
comperirion resolves, virh varying delay, inro oligopolisric equiliLrarion, vhich is
vhar rhe vorld has. The srarus quo is a fair approximarion of rhe srarus desired Ly
free-markereers, Lur again, fanarical LiLerals, good monarchisr Uropians rhar rhey are,
vill nor suffer ro speak of rheir archerype÷rhe Free-Marker÷in orher rhan asymproric
imagery: rhey have Leen given Eden on earrh, Lur rhe rrue-Lelievers srill Lelieve 'ris
much roo regulared.
52


A final nore on rhe currenr slump. Wirh rhe popping of rhe laresr LuLLle÷rhar
of rhe suLprime morrgage loans in mid-SepremLer 2008 (see parr 1 of rhis arricle)÷
ve have nov Leen Lrearhing an air of deep crisis for over a year. While rhe oprimisrs
pray for rhe nexr Loom÷one likely ro Le spurred Ly rhe nev fairh in ¨cleanrech"
53
÷
Lusinesses and individuals in rhe USA, for insrance, have yer again formed or revived
nervorks ro prinr rheir ovn money. And so ve hear of ¨Derroir Cheers," Norrh
Carolina's ¨Flenry," or Wesrern Massachuserrs' ¨BerkShares": anev, Lusinesses, like
improvised minring offices, are prinring locally-denominared Lills, vhich rhey hand
our ro cusromers ar a discounr of 5 percenr ro spend virhin a pool of affiliared srores.
54

Concomiranrly, amidsr calls for ¨aLolishing rhe currency," rhe academic srevards of
rhe Lanking sysrem have predicraLly resurfaced ro conjure rhe Gesellian heresy of
¨negarive inreresr rares."
55
E.g., a Harvard economics professor and advisor ro former
Fresidenr George W. Bush pleaded in rhe spring of '09 for rhe inrroducrion of a semi-
jocose spin on rhe Gesellian device...In rrurh, ir is alvays demanding nor ro virness
virh exhilarared fascinarion rhese orrhodox cusrodians of rhe capiralisr order invoke
anarchisr visdom each rime rheir house's on fire:

Whar is rhe Lesr vay for an economy ro escape a recession! ¦.] Lover
inreresr rares encourage households and Lusinesses ro Lorrov and spend ¦.].
Why shouldn'r rhe Fed jusr keep curring inreresr rares! Why nor lover rhe
rarger inreresr rare ro, say, negarive 3 percenr! Ar rhar inreresr rare, you could
Lorrov and spend $100 and repay $97 nexr year. This opporruniry vould
surely generare more Lorroving and aggregare demand. The proLlem virh
negarive inreresr rares, hovever, is quickly apparenr: noLody vould lend on
rhose rerms ¦.].Unless, rhar is, ve figure our a vay ro make holding money
less arrracrive ¦.]. Imagine ¦rhen] rhar rhe Fed vere ro announce rhar, a year
from roday, ir vould pick a digir from zero ro 9 our of a har. All currency virh
a serial numLer ending in rhar digir vould no longer Le legal render.
Suddenly, rhe expecred rerurn ro holding currency vould Lecome negarive 10
percenr ¦.].The idea of making money earn a negarive rerurn is nor enrirely
nev. In rhe lare 19rh cenrury, rhe German economisr Silvio Gesell argued for
a rax on holding money.
56

25

Ler us surrender rhen, surrender ro rhe facr rhar rhe presenr-day sysrem is nor
yer a rruly Lenevolenr, equiraLle one. And surrender ro rhe realizarion rhar any
evenrual success rhar mighr Le reaped Ly rhe promorers of regional, rime-sensirive
currencies vill mosr likely come ar rhe cosr of grear efforr in viev of rhe prejudices,
rhe inerria and rhe massive resisrance respecrively opposed Ly our socieries' academes,
puLlic haLirs and vesred inreresrs. Though, of course, ir need nor Le so: ve are
cerrainly enrirled ro hope rhar circles virhin rhe governmenr, Lanking and Lusiness
rhar are looking ahead, vill undersrand, and rally ro rhe cause, rhereLy faciliraring
immensely vhar appears nov a necessary, yer daunring endeavor.
This is only a vish. Bur, regardless of vhar ¨orhers" vill do, all cirizens
animared Ly a rrue desire for peace, communalism and social jusrice should join forces
ro search for avenues rhar may render such an idea universal.



Endnores Endnores Endnores Endnores

1
Karl Folanyi, The Grear Transformarion. Bosron: Beacon Fress, 2001 ¦1944], pp. 26-
27.
2
Geminello Alvi, Le Seduzioni economiche di Fausr . Milan: Adelphi, 1989, p. 214.
3
Silvio Gesell, The Narural Economic Order. San Anronio, Texas: Free FuLlishing
Fress, 1920.
4
For a derailed analysis of Gesellian economics see G. G. Freparara, and J.E. Elliorr,
¨Free Economics: The Vision of Reformer Silvio Gesell," Inrernarional Journal of
Social Economics (Fesrschrifr in honor of John O'Brien), Vol. 31, n. 10, SepremLer
2004.
5
On rhis peculiar and mosr imporranr episode, see, for insrance, SeLasrian Haffner,
The Failure of a Revolurion. Germany, 1918-1919, Chicago: Banner Fress, 1986
¦1969], Geminello Alvi, Dell'esrremo occidenre. Il secolo Americano in europa.
Srorie economiche, 1916-1933, Firenze: Marco Nardi Edirore, 1993, pp. 119-22, and
G. G. Freparara, Conjuring Hirler. Hov Brirain and America Made rhe Third Reich,
London: Fluro Fress, 2005, pp. 42-57.
6
Barring foreign rrade, if rhe Lanking sysrem is rhe sole provider of money in rhe
economy ÷as ir is roday, rhen, if ir issues ro Lusiness, say 100, virh rhe expecrarion of
Leing repaid 110 a year larer, rhe exrra 10 (of inreresr) can only Le advanced ro rhe
¨insolvenr" economy Ly means of an addirional loan. Thus is rriggered rhe
snovLalling accumularion of (puLlic and privare) deLr, exponenrially magnified Ly
rhe lav of compound inreresr.
26

7
Thorsrein VeLlen The Theory of rhe Leisure Class. Nev York: Macmillan, 1899, pp.
188-211.
8
The marhemarical equarion for rhe presenr value (FV FV FV FV) of an asser is rhe folloving:
v
v
v v ... v v v PV
n
n
−
−
= + + + =
1
1
3 2
, vhere
i
v
+
=
1
1
, v vv v is rhe discounr facror and i ii i is rhe
rare of inreresr. This is rhe srandard formula for rhe presenr quanrificarion of a piece
of capiral srock, from, say, a Xerox machine ro a prosrirure. Ir is Ly means of such
acruarial formularions rhar a price may Le assigned ro everyrhing, including human
life. ¨Capiral" rhus expressed is a source of income ÷normalized ro 1 (one unir) per
period in rhe formula, vhich is expecred ro Le earned from nexr year onvard for rhe
lengrh of n nn n periods. To ¨acrualize" rhe value of rhis srream of forrhcoming paymenrs
(i.e. express a cumularive value roday, vhich can Le rraded or made rhe Lasis of a
conrracr, as in a Lank loan), one sysremarically divides each paymenr Ly rhe
¨discounr facror," v vv v, virh groving exponenrial povers for rhe insrallmenrs
sequenrially scheduled in rhe furure. Thus a dollar ro Le earned one year from nov
is discounred (ar rhe Lank, or in rhe money marker generally speaking) Ly v vv v, and is
vorrh roday, say, $0.90, if i i i i = 0.1 (ren per cenr). Ar rhis rare of inreresr, 1 dollar ro Le
paid 2 years from nov is rhen acrualized ar $0.82, and so on. For n ∞, rhe aLove
formula collapses inro rhe simple rario FV=1/i FV=1/i FV=1/i FV=1/i. . . . This signifies rhar rhe presenr value
of a guaranreed srream of one-dollar renrs (or any mulriple rhereof) from here ro
ererniry ÷a so-called perperuiry÷ is equal ro rhe morrgage paymenr (normalized ro 1
in rhe formula) divided Ly rhe rare of inreresr.
9
WarLurron, DeLr & Delusion, p. 43.
10
Thomas R. Malrhus, Frinciples of Folirical Economy. Nev York: A. M. Kelley 1986
¦1836], pp. 404 and ff.
11
The Bureau of Economic Analysis reckons rhar monerary renrs÷caregorized as
¨Fersonal Income receiprs on assers"÷amounr ro roughly 16 percenr of narional
income. hrrp://vvv.Lea.gov/narional/pdf/nipa_primer.pdf.
12
Jacques Jaikaran, DeLr Virus: A Compelling Solurion ro rhe World's DeLr FroLlems.
GlenLridge FuLlishing, 1995, pp. 79-95.
13
E. Ray CanrerLery, Alan Greenspan. The Oracle Lehind rhe Currain. London:
World Scienrific Fress, 2006, p. 154.
14
America's officially rrumpered 5-6 percenr unemploymenr rare deliLerarely
underesrimares rhe rrue exrenr of rhe counrry's joLlessness. In rrurh, rhe Bureau of
LaLor Srarisrics calculares six differenr indices of unemploymenr (U-1, U-2, rhrough
U-6), rhe official figure is merely rhe middle gauge. The mosr comprehensive of such
unemploymenr measuremenrs÷one rhar includes so-called ¨discouraged vorkers"
and ¨parr-rimers looking for full-rime employmenr"÷yields a figure of 9 percenr.
See Kevin Fhillips, NumLers Racker. ¨Why rhe Economy is Worse rhan We Knov,"
Harper's Magazine, v. 316, n. 1896, 1 May 2008. Nov, if rhese aggregares vere
27

furrher refined, rhar is, Ly adding ro rhe unemploymenr pool caregories such as
'people vho don'r vork, even rhough rhey should Le aLle ro,' as vell as an inmare
popularion of rvo addirional millions of aLle-Lodied men÷nor ro menrion rhe five
addirional million men and vomen presenrly on juridical proLarion, rhe overall
unemploymenr rare for rhe Unired Srares vould jump ar leasr ro 15-16 percenr. See
hrrp://vvv.ncLi.nlm.nih.gov/puLmed/18341129,
hrrp://vvv.ojp.usdoj.gov/Ljs/pandp.hrm.
15
Thorsrein VeLlen, The Engineers and rhe Frice Sysrem. Nev York: B. W. HueLsch,
1921, Chaprer I, pp. 1-26.
16
A numLer of ¨gold-Lugs"÷rhose marker operarors and puLlicisrs rhar advocare a
resurrecrion of rhe Gold Srandard as rhe only arrangemenr capaLle of purging rhe
issuance process of any inflarionary drifr ÷conrend rhar Lerveen 1995 and 1999,
rhe Wesr's premier cenrral Lanks, led Ly rhe Fed, conspired ro depress rhe price of
gold. The Banks allegedly did so in order ro susrain rhe rise of rhe dollar, vhich had
Leen engineered virh rhe Reverse-Flaza accord: rhus, rhe gold-Lugs argued,
Lenefiring from rhe neurralizarion of rhe rival commodiry (gold), rhe dollar vas
alloved ro rise unoLsrrucred. The crearive means employed Ly rhis conniving pool
of Banks vas rhe so-called ¨gold carry-rrade." According ro rhis scheme, mining
companies vere lured Ly rhe cenrral Lanks inro Lorroving rhe Banks' large srocks of
gold ar lov rares÷1 percenr or so. These companies vould rhen sell rhe Lorroved
gold srocks on rhe spor or forvard markers, and invesr rhe proceeds in 5-percenr
Treasuries, and profir from rhe spread. The ulrimare effecr of rhe operarion vas ro
flood rhe markers virh rhe gold rhus srudiously and remporarily relinquished Ly rhe
cenrral Lanks virh a viev ro depressing irs price, and guaranreeing rhe dollar's
conrrolled ascenr. See Ferdinand Lips, Gold Wars. The Barrles againsr Sound Money
as Seen from a Sviss Ferspecrive. Nev York: Foundarion for rhe Advancemenr of
Monerary Educarion, 2001, pp. 144-54. There appears ro Le merir in rhis rhesis, as
rhe pracrice on rhe parr of rhe Lanking carrel ro release gold vhenever rhe dollar
veakens seems fairly esraLlished: indeed, a fev veeks afrer rhe dollar hir rhe record
lovs of mid-March 2008, rhe IMF announced irs inrenrion ro sell 12.5 of irs gold
srocks, claiming rhar ir needed ro raise revenue in rhe face of a mounring Ludger
deficir, see The Economisr, ¨Selling rhe Family Gold," April 12
rh
, 2008, p. 83.
17
Rudolf Sreiner, Inruirive Thinking as a Spirirual Farh: A Fhilosophy of Freedom.
Hudson, NY: Anrhroposophic Fress 1995 ¦1900].
18
Rudolf Sreiner, World Economy: The Formarion of a Science of World Economics.
London: Rudolf Sreiner Fress, 1977 ¦1922].
19
A discussion of Sreiner's conrriLurion ro socio-economic rhoughr may Le found in
G. G. Freparara, ¨FerishaLle Money in a Threefold Commonvealrh: Rudolf Sreiner
and rhe Social Economics of an Anarchisr Uropia," Reviev of Radical Folirical
Economics, Vol. 38, n. 4, Fall 2006.
28

20
Demurrage in rhe commercial jargon is rhe cosr of srorage. Gesell inrroduces rhis
norion ro convey rhe image of goods vhich, immoLilized Ly hoarding, are fared ro
rorring.
21
Gesell, Silvio, 1920. Das Reichsvährungsamr, Wirrschafrsliche, polirische und
finanzielle VorLereirungen für seine Errichrung. Berlin: Freiland-Freigeldverlag.
22
Irving Fisher, Sramp Scrip. Nev York: Adelphi Company FuLlishers, 1933, pp. 17-
21.
23
ILid, pp. 22-28.
24
hrrp://vvv.regiogeld.de/regiogeld.hrml.
25
Trisrana Moore, ¨Germans Take Fride in Local Money," BBC Online, 6 FeLruary
2007, hrrp://nevs.LLc.co.uk/2/hi/europe/6333063.srm, ¨Germans ger Ly virhour rhe
Euro," The Daily Telegraph, 18 January 2007,
hrrp://vvv.relegraph.co.uk/money/main.jhrml!xml=/money/2007/01/18/cneuro18.x
ml. Nils Klavirrer, ¨Economic Cure or Fool's Gold!" Spiegel Online Inrernarional, 6
March 2007, hrrp://vvv.spiegel.de/inrernarional/spiegel/0,1518,469875,00.hrml.
26
Informarion on all such regional currencies may Le gleaned from rheir respecrive
veLsires ar: hrrp://ursrromraler.de/,
hrrp://vvv.rheingoldregio.de/index.php!menu=21&id=90, and
hrrp://vvv.chiemgauer.info.
27
See for insrance hrrp://vvv.freie-dm.de/faq_11.hrml for rhe rarionale of an
exchange rare of 2 euros ro 1 regio.
28
Srephen DeMeulenaere, ¨2007 Yearly Reporr of rhe Worldvide DaraLase of
Complemenrary Currency Sysrems," Inrernarional Journal of Communiry Currency
Research, Vol. 12 (2008) pp. 2-19.
29
Inspired Ly Europe's emergency currencies, several American communiries did
experimenr virh rhem for a Lrief inrerval in rhe early rhirries (see Fisher, Sramp
Scrip), Lefore Leing forced ro desisr alrogerher Ly Roosevelr's exrraordinary Lanking
legislarion of March 1933.
30
hrrp://roronrodollar.com/.
31
Thomas H. Greco, 2001. Money: Undersranding and Crearing Alrernarives ro legal
Tender. Whire River Juncrion, VT: Chelsea Green FuLlishing Company. The
veLsires for Thankyous, LETS and Irhaca Hours are respecrively:
hrrp://vvv.favors.org/FF/, hrrp://vvv.rransacrion.ner/money/lers/, and
hrrp://vvv.irhacahours.org/.
32
Greco, op cir., p. 190.
33
Faul Krugman ÷an ¨economisr in good sranding" Ly his ovn admission÷conjured
rhe folloving meraphor (of rhe LaLy-sirring co-op) ro explicare rhe dynamics of
deflarion (reference is here made ro rhe Japanese crisis): ¨During rhe vinrer, vhen ir's
cold and dark, couples don'r vanr ro go our much, Lur are quire villing ro sray home
and look afrer orher people's children ÷rhereLy accumularing poinrs rhey can use on
29

Lalmy summer evenings. If rhis seasonaliry isn'r roo pronounced, rhe co-op could srill
keep rhe supply and demand for LaLy-sirring in Lalance Ly charging lov inreresr rares
in rhe vinrer monrhs, higher rares in rhe summer. Bur suppose rhar rhe seasonaliry is
very srrong indeed. Then, in rhe vinrer, even ar a zero-inreresr rare, rhere vill Le
more couples seeking opporruniries ro LaLy-sir rhan rhere are couples going our,
vhich means rhar LaLy-sirring opporruniries vill Le hard ro find ¦.] and rhe co-op
vill slide inro a recession even ar a zero-inreresr rare ¦.]. The ansver, as any
economisr should immediarely realize, is ro ger rhe price righr: ro make ir clear rhar
poinrs earned in rhe vinrer vill Le devalued if held unril summer ÷say, ro make five
hours of LaLy-sirring credir earned in rhe vinrer melr inro only four hours Ly
summer. This vill encourage people ro use rheir LaLy-sirring hours sooner, and hence
creare more LaLy-sirring opporruniries ¦.]. An economy vhich is in a liquidiry rrap
needs expecred inflarion ÷rhar is, ir needs ro convince people rhar rhe yen rhey are
rempred ro hoard vill Luy less a monrh or a year from nov rhan ir does roday" (Faul
Krugman, The Rerurn of Depression Economics. Nev York: W. W. Norron, 2000, pp.
73, 78). Decryprion: vhen ir's cold and dark, rhar is, vhen rhe rare of profir has sunk
Lelov Urzins, capiral is nor invesred (people don'r go our), Lur hoarded (couples sray
indoors varding rheir ovn children). If, rhe rare of profir vere slighrly aLove Urzins
(seasonaliry nor roo pronounced), Lanking could equare rhe demand and supply of
capiral (LaLy-sirring) Ly caliLraring inreresr: higher during Looms (summer fun),
lover in dull rimes (vinrer). Bur if profiraLiliry is a shamLles and markers appear ro
Le sarurared Leyond recovery (pronounced seasonaliry), rhe economy (rhe co-op) is
mired in rhe ¨rrap." Solurion: compel savers ro parr virh rheir hoards. Hov! Krugman
suggesrs inflarionary scare÷rhar is, a pre-announced inflarion rax rhar vill make rhe
hoarded money melr.
34
Willem Buirer, and Nikolaos Fanigirirzoglou, ¨Liquidiry Traps: Hov ro Avoid Them
and Hov ro Escape Them." NBER Working Faper Series, 1999.
hrrp://vvv.nLer.org/papers/v7245.
35
Marvin Goodfriend, ¨Overcoming rhe Zero Bound on Inreresr Rare Folicy,"
Working Faper of rhe Federal Reserve Bank of Richmond, 2000,
hrrp://vvv.rich.frL.org/puLs/vpapers/pdfs/vp00-3.pdf.
36
Evan F. Koenig, and John Dolmas, ¨Monerary Folicy in a Zero-Inreresr-Rare
Economy," Federal Reserve Bank of Dallas, May 2003.
hrrp://vvv.dallasfed.org/research/indeprh/2003/id0304.pdf.
37
Buirer and Fanigirirzoglou, ¨Liquidiry Traps," p. 44.
38
Friedrich Schneider, ¨Money Laundering and Financial Means of Organized Crime:
Some Freliminary Empirical Findings," Social Science Research Nervork, May 2008.
hrrp://papers.ssrn.com/sol3/papers.cfm!aLsrracr_id=1136149-. See also:
hrrp://vvv2.econ.uu.nl/users/unger/conference%20slides/Schneider%20-
%20MoneyLaundering_OcroLer2007.ppr.
30

39
Marrin Mayer, The Bankers. The Nexr Generarion: The Nev Worlds of Money,
Credir and Banking in an Elecrronic Age. Nev York: Truman Talley, 1997, p. 77.
40
Gerhard Rösl, ¨Regional Currencies in Germany÷Local Comperirion for rhe Euro!"
Deursche BundesLank Eurosysrem, Discussion Faper, Series 1: Economic Srudies,
No. 43/2006.
hrrp://vvv.LundesLank.de/dovnload/volksvirrschafr/dkp/2006/200643dkp_en.pdf.
Inrervieved Ly rhe press on rhe suLjecr of regional currencies afrer rhe release of rhe
BundesLank reporr, irs aurhor÷a polirical economisr ar RegensLurg Technical
College÷inrroduced his ansvers virh rhe rypically disdainful conrenrion rhar
Gesellian schemes are rhe producr of ¨social romanricism on rhe parr of people vho
don'r rhink in a srrucrured vay" (Klavirrer, ¨Economic Cure or Fool's Gold!", p. 2).
Disdain aside, such a conrenrion augured vell for ir could have Leen read as an
invirarion ro look inro rhe reporr for a pragmaric exposirion of finely srrucrured
economic rhinking. Alack, vhar a disappoinrmenr. To Legin, ve shall Lriefly reviev
four argumenrs rhar are made in rhe insrirurional, preliminary segmenr of rhe
discussion. Firsr, Rösl nores in posrmodern fashion rhar, vhen ir comes ro cash, ir is
ulrimarely ¨misleading" ro disringuish Lerveen exploirer (crediror, or money
possessor) and exploired (deLror, vorker), Lecause as soon as rhe vorker gers paid,
he roo Lecomes an exploirer÷in rhar he forrhvirh invesrs his dollar ar inreresr (pp.
9-10). Yes, ve said ir earlier: ¨Inreresr Lreeds a never-ending spiral of preying of
man upon man." Hovever, ro conclude rhar ¨from rhe macroeconomic perspecrive,
rhe exploirarion collapses inro a zero-sum game virhour ner vinners or losers" is
disingenuous, ro say rhe leasr. In facr, oving ro rhe redisrriLurive lavs of rhe LiLeral
sysrems, median households÷leasr of all American ones, vhich on average save
norhing÷have never Leen rhe chief recipienrs of rhe Lulk of money renrs (inreresr
paymenrs). Ir is rhe vealrhy, Ly definirion, vho conrrol rhar essenrial flux. No
douLr, Lusiness (or Lanking) successful srarr-ups alvays issue from rhe comperirive
aLiliry ro corner a sufficienr amounr of cash, vhich is rhen counred on ro
consolidare rhe nevly-acquired posirion of marker pover÷rhink, for insrance, of all
rhose corporare manufacrurers rhar have esraLlished rheir ovn financial suLsidiary,
and of Wal-Marr's failed Lid in 2005 ro carve a node for irself in rhe Lanking
indusrry. Yer vinners and losers are dravn, as ever, from rhe same social srrara in a
process, vhich, in rhe pasr generarion has done precious lirrle ro redress class
inequaliries, yer much, on rhe orher hand, ro augmenr significanrly rhe receiprs of
rhe richesr cirizens.
Second, rhe aurhor asserrs rhar ¨Gesell's rheory rorally ignores rhe real
economic dimension of inreresr, vhich is reflecred in rhe real compensarion of rhe
capiral donors for rheir resrrainr in consumprion" (p. 9, emphasis added). Nov,
anyone even cursorily acquainred virh rhe vays of Lank lending agrees rhar
convenrional morrgaging, especially rhe aggressive rype pracriced Ly credir insrirures
31

rhese days, has never had anyrhing ro do virh ¨resrrainr"÷vhich, even Ly
Neoclassical srandards, is a hackneyed apologue so profoundly discredired, again, Ly
aLiding parrerns of highly skeved vealrh concenrrarion, rhar noLody virrually uses
ir anymore. By definirion, ¨capiral donors" expand rheir income virh funds rhey
have no immediare use for via rhe acriviry of invesrmenr ourfirs ÷from Lanks ro
hedge funds, vhich cusromarily leverage rheir placemenr operarions. For insrance, ir
is nor uncommon for Lanks ro rake full advanrage of rhe deposirs' mulriplier (i.e.
loan our rhe vhole $99,000 virh only $1000 in rhe rill, given a reserve rario of 1 per
cenr)÷and evenrually scramLle ro cover rheir oLligarions Ly Lorroving rhemselves
rhe funds from rhe money markers (see, for example, Werner, Frinces of rhe Yen, p.
45). Human ingeniousness, coupled virh rhrifr÷vhich is nor necessarily Lorn of
conrinence (i.e., ¨resrrainr")÷is rhe source of grovrh, nor of inreresr, inreresr, Leing
a roll, presupposes grovrh and nor vice versa. Gesell explained clearly hov
aLundance rriggered Ly rhe forced circularion of money narurally depresses rhe rare
of inreresr, vhich is an index of scarciry.
Finally, a sysrem Lased on regional currencies is accused in rhe reporr of
fomenring an isolarionisr environmenr÷an environmenr Lound ro impede ¨cross-
regional rrade, virhour vhich a region cannor go on developing" (p. 12). This is
parenrly false. Firsr of all, Gesell himself seriously conremplared in rhe NIO rhe
narure and insrirurional requisires of an inrernarional associarive Lody assigned ro
coordinare monerary policy amongsr communiries using perishaLle money.
Moreover, and mosr imporranrly, rhe srory of Schanvenkirchen, vhose vouchers
reached rhe disrricr offices of rhe ReichsLank, as vell rhe common-day experience
of all rraders, consumers and Lusinesspeople presenrly using regional currencies
caregorically Lelie rhis conrenrion. By irself, increased rurnover, vhich rhese Lills
are designed ro spur, is Lound sooner or larer ro projecr rhe money ourvardly in
search of richer and more diverse provisioning. Ir remains nonerheless rrue rhar
regional currencies are inrended ro srrengrhen rhe communal Lase÷vhich is ro Le
hailed as a salurary phenomenon, and upon rhar Lase, ir is only narural rhar rhey
should Luild rhe exrernal relarions rhar are indeed essenrial for prosperiry.
The remainder of rhe reporr's evaluarion of rhe principles Lehind sramp scrip
is enrrusred ro rhe convenrionally fanrasric marhemarical arrifices of uriliry-
maximizarion. As knovn, professional economisrs Lelieve rhar all economic acrions
may Le consrrued ¨as if" rhey vere rhe resulr of a hidden process governed Ly a
secrer algorirhm lodged in some fold of our soul. This invisiLle calcularor virhin us
supposedly garhers informarion from rhe ourside vorld and formalizes ir as a
proLlem÷as a sysrem of equarions vhose solurion requires rhar our Lodily pleasure,
purarively rracked Ly an imaginary ¨uriliry" funcrion, Le highesr ar all rimes. Tvo
examples vill suffice. On pp. 19-23, rhe aurhor resorrs ro a model of oprimal conrrol,
vhereLy uriliry is maximized suLjecr ro a differenrial equarion relaring rhe variarion
32

in per capira financial assers (=capiral+money) ro household income (posirively) and
aggregare consumprion (negarively). Among rhe consumprion irems affecring vealrh
negarively figures rhe Gesellian ¨carry rax" on rhe money srock (σ). Because rhe firsr
order maximizarion condirions yield a differenrial equarion (equarion 14.3, p. 21) for
rhe co-srare variaLle (λ) in vhich σ does nor appear, rhe aurhor confidenrly nores
rhar ¨in rhe long-run, rhe oprimal consumprion plan is independenr of rhe
depreciarion rare ¦of money]." Hence, he concludes, ¨rhe ongoing srimularion of
aggregare demand Ly means of increasing rhe depreciarion rare ¦of money], vhich
rhe supporrers of rhe ¦.] Freigeld rheory hope for, ¦.] proves unsusrainaLle" (p.
23). Hovever, no economic inrerprerarion vharsoever is offered ro accounr for rhis
marhemarical canceling our of σ, and ve furrher vonder hov rhe claim of
¨unsusrainaLiliry" may Le held virhin a model rhar says norhing of rhe
macroeconomic environmenr in vhich rhis purarive uriliry-maximizarion rakes
place. Afrervards, rhe aurhor posirs an explicir funcrion linking, exponenrially,
uriliry ro rhe money srock and consumprion. Maximizing ir and manipularing ir
furrher, he derives an expression for ¨rhe consumprion grovrh rare" needed ro offser
rhe ¨uriliry loss" enrailed Ly rhe imposirion of ¨carry rax" on money (p. 27). Thanks
rhis orher piece of formidaLle microeconomic analysis, ve learn rhar rhe ¨economic
velfare cosrs of a 1 percenrage poinr increase in rhe depreciarion rare of money"
amounr ro 0.8 percenr (using M1 dara). Which is akin ro saying rhar if some rax goes
up Ly one dollar, one vould hyporherically need ro incremenr his expendirure Ly 80
cenrs in order ro resrore his vounded sense of oprimal vell-Leing, virhour regard
moreover ro vhar rhe rax achieves. On rhis Lasis, rhe aurhor senrences rhar if one
vere ro impose ar once rhe 12 percenr levy of rhe Chiemgauer on Germany's money
srock (M1), rhe average German cirizen vould suffer a ¨velfare loss" of 1600 euros
per annum (p. 28). Overall, rhar rhe BundesLank vould endorse rhe employ of
such inane aLsrracrions ro rackle as concrere an economic realiry as rhar of regional
currencies is somevhar perplexing, rhough perfecrly in line virh rhe currenr
pracrice of convenrional ¨economic research." If anyrhing, rhis mighr Lode vell for
an oncoming generarion of properly insrirurionally-rrained marhemaricians vho
mighr one day formalize rhese phenomena in a realisric fashion and rhereLy pull us
all our of rhe srone age of economic rheorizing.
41
CanrerLery, Alan Greenspan, p. x.
42
For an in-deprh srudy of Keneysian monerary economics and irs plagiarism of
Gesell's rheory of inreresr see G. G. Freparara, ¨On rhe Arr of Innuendo: J. M.
Keynes's Flagiarism of Gesell's Monerary Economics," in Research in Folirical
Economy, Vol. 20, 2002, pp. 217-54.
43
Irving Fisher, SraLle Money. A Hisrory of rhe Movemenr. Nev York: Adelphi
Company puLlishers, 1934, p. 141.
33

44
Lavrence Whire, ¨Is rhe Gold Srandard Srill rhe Gold Srandard among Monerary
Sysrems," in Caro Insrirure Briefing Fapers, n. 100, FeLruary 8, 2008. Greenspan's
resrimony is from 2001, hrrp://vvv.caro.org/puLs/Lp/Lp100.pdf.
45
Greider, Secrers of rhe Temple, pp. 379-80.
46
Consulr, for insrance, hrrp://vvv.safehaven.com/ and hrrp://vvv.gold-eagle.com/.
47
hrrp://vvv.liLerrydollar.org/.
48
hrrp://vvv.house.gov/paul/congrec/congrec2008/cr021308h.hrm.
49
hrrp://vvv.liLerrydollar.org/ld/ronpauldollar.
50
hrrp://video.aol.com/video-derail/fLi-raids-ron-paul-liLerry-dollar-in-evansville-
indiana-fox/2533005518.
51
Lips, Gold Wars, pp. 144, 220.
52
RoLerr Gelfond, ¨Tovard Free-Marker Money." Caro Journal, Vol 21. No. 2, 2001.
53
Jordan RoLerrson, ¨Where's rhe Nexr Boom! MayLe in 'Cleanrech'," Associared
Fress, 6 OcroLer 2009.
54
Marisol Bello, ¨Communiries Frinr Their Ovn Currencies ro Keep Cash Floving,'
USA Today, 4 OcroLer 2009.
55
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