From: "John Zube" To: "Thomas H. Greco, Jr." References: <01f701c234f3$9f144c00$d650c043@v4dq1> Subject: 020829 Greco Re Free banking, compilation of notes, No 1 of a batch of 7, coming to about 2.5 Mbs Date: Thu, 29 Aug 2002 19:11:33 +1000 MIME-Version: 1.0 Content-Type: multipart/mixed; boundary="----=_NextPart_000_0004_01C24F8F.E3610860" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2600.0000 X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2600.0000 This is a multi-part message in MIME format. ------=_NextPart_000_0004_01C24F8F.E3610860 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Dear Thomas, this is the first of a batch of 7 older free banking note compilations. I worked for 2 days browsing through it, eliminating flaws caused by the conversion from another computer system - leading to added "-" and the combination of many words without separation, which can be very annoying, and also eliminating some of the spelling and typing mistakes, occasionally changing the text or adding to it. But I concentrated on reducing the more obvious mistakes rather than trying to improve the ideas. In the process I got several times stuck and lost corrections. Now I use the save option every few pages. I find this job rather boring and yet tiring. I did alphabetize this file like the shorter one I previously sent and do intend to combine all of them and alphabetize them together and then, when necessary, split them up into shorter files, parts of the total alphabetization. How long the inclusion of the other 6 will take me, I do not know. These are only a fraction of the files to be worked through for this purpose. Some of them I indicated in the introduction to the previous batch. But I do not intend to spend all my time on this. A similar job is overdue e.g. for files on panarchism and I had started one on micrographics and on the CD-ROM project and do intend to continue with the SLOGANS FOR LIBERTY quotation compilation as well. They may be useless to you in this form but for me they are the raw material towards a handbook on monetary freedom, one that would have to carry many more cross references or the repetition of the same notes under different alphabetized headings. I added, usually, source and date, with the intention to have later much other material included, supplied by others, and signed and dated by them. So the potential readers could easily find out who contributed what. I have not yet tried at all to eliminate repeated ideas, arguments, definitions etc. That will come much later. The files would also become much larger once I included arguments and suggestions etc. from Beckerath's three main books in PP 9-11, as well as those of Zander and Rittershausen, Riegel and others. Sorry, but I cannot send you the time to work yourself through these files. PIOT, John. ------=_NextPart_000_0004_01C24F8F.E3610860 Content-Type: application/msword; name="Fbcompilation1SortRTF.rtf" Content-Transfer-Encoding: quoted-printable Content-Disposition: attachment; filename="Fbcompilation1SortRTF.rtf" {\rtf1\ansi\ansicpg1252\uc1 = \deff0\deflang1033\deflangfe1033{\fonttbl{\f0\froman\fcharset0\fprq2{\*\p= anose 02020603050405020304}Times New = Roman;}{\f2\fmodern\fcharset0\fprq1{\*\panose = 02070309020205020404}Courier New;} {\f16\froman\fcharset238\fprq2 Times New Roman = CE;}{\f17\froman\fcharset204\fprq2 Times New Roman = Cyr;}{\f19\froman\fcharset161\fprq2 Times New Roman = Greek;}{\f20\froman\fcharset162\fprq2 Times New Roman Tur;} {\f21\froman\fcharset186\fprq2 Times New Roman = Baltic;}{\f28\fmodern\fcharset238\fprq1 Courier New = CE;}{\f29\fmodern\fcharset204\fprq1 Courier New = Cyr;}{\f31\fmodern\fcharset161\fprq1 Courier New = Greek;}{\f32\fmodern\fcharset162\fprq1 Courier New Tur;} {\f33\fmodern\fcharset186\fprq1 Courier New = Baltic;}}{\colortbl;\red0\green0\blue0;\red0\green0\blue255;\red0\green25= 5\blue255;\red0\green255\blue0;\red255\green0\blue255;\red255\green0\blue= 0;\red255\green255\blue0;\red255\green255\blue255; \red0\green0\blue128;\red0\green128\blue128;\red0\green128\blue0;\red128\= green0\blue128;\red128\green0\blue0;\red128\green128\blue0;\red128\green1= 28\blue128;\red192\green192\blue192;}{\stylesheet{\nowidctlpar\widctlpar\= adjustright \fs20\lang2057\cgrid=20 \snext0 Normal;}{\*\cs10 \additive Default Paragraph = Font;}{\s15\nowidctlpar\widctlpar\adjustright \f2\fs20\lang2057\cgrid = \sbasedon0 \snext15 Plain Text;}{\*\cs16 \additive \ul\cf2 \sbasedon10 = Hyperlink;}}{\info{\title AAA Fbcompilation1SortRTF} {\author John Zube}{\operator John = Zube}{\creatim\yr2002\mo8\dy29\hr18\min36}{\revtim\yr2002\mo8\dy29\hr18\m= in48}{\version3}{\edmins12}{\nofpages56}{\nofwords46483}{\nofchars264958}= {\*\company Libertarian Microfiche Publ.}{\nofcharsws325387}{\vern71}} \paperw11906\paperh16838\margl397\margr397\margt397\margb397 = \widowctrl\ftnbj\aenddoc\makebackup\formshade\viewkind4\viewscale101\view= zk2\pgbrdrhead\pgbrdrfoot \fet0\sectd = \linex0\headery1440\footery1440\colsx709\sectdefaultcl {\*\pnseclvl1 \pnucrm\pnstart1\pnindent720\pnhang{\pntxta = .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang{\pntxta = .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang{\pntxta = .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang{\pntxta = )}}{\*\pnseclvl5 \pndec\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl8\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta = )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}\pard\plain \s15\qj\sb120\nowidctlpar\widctlpar\adjustright = \f2\fs20\lang2057\cgrid {\f0\fs24 F}{\f0\fs24 bcompilation1}{\f0\fs24 = SortRTF}{\f0\fs24=20 \par ABILITY TO PAY & FREE BANKING: When you are buying the markets = \-are open, it's when you are selling that you find the markets\- = closed. - Klahn's law of marketing, in a letter by Robert W.\- Klahn, in = ANALOG, 7/95, p. 312. - Free banking can turn each\- large supplier of wanted consumer goods into a large scale = money-\-issuer and buyer of the goods and services of others, rather = than \-entering into a competition with them for the scarce, exclusive\- = and forced currency of mon etary despotism. Your own money issues \-will also act like advertising = leaflets and drive potential\- customers into your "net" - by inducing = them to return your money \-to you, claiming the promised and available = consumer satisfaction \- from your stores. You would only have to market your own money and not = your goods and services directly and exclusively only for\- a = monopolised money. To market any useful additional money is\- much easier than to market any goods and services. And your own \-money = would inevitably return to you in payments. What more could\- you ask = for than such freedom, practised alone or in more \-suitable local = associations? - J. Z., 19.3.97. \par ABILITY TO PAY: The unused and undemanded ability to pay and to\- = clear, via privately or cooperatively issued money tokens and = \-cooperatively organized clearing facilities, upon the unused own = ready-for-sale goods and service \- potential depends, is enormous - and still largely unknown in every = \-country. Otherwise, inflations, deflations, stagflations, mass = \-unemployment and unwanted and not merely accidental poverty could\- be = done away with within hours or days at most - while\- governments do not = even foresee their total abolition within years\- or even decades - and = continue to stumble around in the dark, \- causing much wrong and damage with their "activities" and "measures", = unaware that and how they caused most major social \-problems in the = first place. Alas, the billions of victims of\- monetary despotism have = so far shown little awareness of its\- existence and desire for its replacement by monetary freedom. The\- = situation is as bad as in the Dark Ages, where religious \-tolerance was = not appreciated or in the times of slavery, when\- most slaves would rather be masters but very few slaves wanted \-the = abolition of slavery and all too many "free" people were opposed to the = abolition of slavery. - J. Z., 29.7.96, 19.3.97, 28.8.02. \par ACADEMIC WRITINGS ON MONETARY FREEDOM IN RECENT YEARS: Some = \-modern economists have finally rediscoverd some aspects of \-monetary = freedom, especially since Hayek wrote "Choice in \-Currency" and "The = Denationalisation of Money", in 1975 & 1976.\- But even these are usually still far behind the monetary freedom\- = theories and practices offered decades e.g. by Ulrich von \-Beckerath = since World War I. - J. Z., 7.11.96. \par ADVERTISING COSTS WILL BE REDUCED: The rapid and automatic \-reflux = of this private currencies to the issuers, to be redeemed \-in their = goods and services, seeing that they have no other value \-and only a limited circulation period, turns them also into \-advertisement = leaflets and reduces the need for advertising the \-goods and services, = thus making extra competitive price \-reductions likely. There will also = be less need for advertising \- than under monetary despotism where free competition is confined \-to a = struggle for scarce and exclusive forced currency. - J. Z., 3/97. \par ASSET CURRENCIES: To try to turn capital assets like raw\- = materials, premises, and machinery or the capital securities that = \-represent them, directly into currency, supposedly useful for the\- = current purchase of consumer good s, is a great mistake because at \-the same time no equivalent consumer = goods and services are \-provided by the issuer to redeem them with. The = holder of the \-certificates could only force the issuer into = liquidation and\- then claim his share in raw materials, premises and machinery - \-but = few would want to acquire them. On the other hand, if there \-is someone = prepared for a take-over bid for the business of the \- issuer, then such issue attempts would be very much welcomed by \-him, = for this scrip would rapidly depreciate in a free market and\- could = thus be bought up very cheaply and used in the take-over \- bid. A few such experiences, well publicised, will serve as a\- = deterrent. But that does not mean that there should not be full = \-freedom to issue financial securities, too, which quite clearly \- represent capital assets and are bought up and traded by people = \-interested in capital investments. To reduce this kind of mix up \-of = capital securities with turnover bills and notes, the issue = \-departments for both sh ould be as far as possible kept separated because\- for people have = fallen for the errors of "asset currencies" again\- and again and they = have often been embodied in banking laws. \par BANK CHARTERS, MONETARY DESPOTISM, RIGHT TO BANKING: Their (\-bank = charters ) effect is to give to individuals the advantage of\- two legal = natures - one favorable for making contracts, the other \- favorable for avoiding the responsibility of them, when made. = (\-Spooner, Constitutional Law 21.) Spooner argues that all banking = \-charters are unconstitutional for they violate the natural right \- of all men to make free contracts. Moreover, the legislature, in\- = granting special favors to some and none to others, abuses its \-powers. = - Charles Chiveley, introduction to Spooner, I/27. \par BANKRUPTCY RULES, See: FUTURES DEALINGS WITH CASH. See: \-CLEARING. \par BECKERATH, ULRICH von, 1882 -1969. See: ACADEMIC WRITINGS ON\- = MONETARY FREEDOM IN RECENT YEARS. See also his numerous writings, listed = in my main website: }{\field\flddirty{\*\fldinst {\f0\fs24 HYPERLINK = http://www.acenet.com.au/~jzube }{\f0=20 {\*\datafield=20 00d0c9ea79f9bace118c8200aa004ba90b0200000017000000190000007700770077002e0= 06100630065006e00650074002e0063006f006d002e00610075002f007e006a007a007500= 620065000000e0c9ea79f9bace118c8200aa004ba90b4000000068007400740070003a002= f002f007700770077002e00610063006500 6e00650074002e0063006f006d002e00610075002f007e006a007a0075006200650000000= 00000000000000000}}}{\fldrslt {\cs16\f0\fs24\ul\cf2 = www.acenet.com.au/~jzube}}}{\f0\fs24 =20 \par BELIEF SYSTEMS ON MONEY: There are thousands of different\- = articles of faith and prejudice and unfounded assumptions and = \-assertions, fallacies and false arguments on money. Most are as = \-false or misleading as the religious ones. Only a systematic and \- an alphabetical register of all of them, together with their best = \-refutations so far out, could show us the ways out of this \-labyrinth = or avalanche. So far it has not yet been compiled and\- all too few people have shown any interest in such a project. - \-J. = Z., 18.7.96, 20.3.97. \par BRANCH BANK CLOSURES: Let the major banks close as many local\- = branches as they like, in their cost-cutting attempts, but do allow = \-the local people to establish not only their own local savings,\- = current=20 account, deposit and clearing banks but also note-issuing \-banks, quite = free from Local Government, State and Federal\- Government legislation, = regulation and jurisdiction. This would\- mean an end to depressions, = mass unemployment and inflation in \- all the localities where this self-help freedom would be \-practised. - = J. Z., 8.11.96, 19.3.97. \par BRAY, JOHN FRANCIS, Labour's Wrongs & Labour's Remedy, Leeds,\- = 1838, also advocated a particular kind of labour exchange,\- different = from that of Robert Owen. Further details are wanted\- and the whole = book for microfiching. - J. Z., 20.3.97. \par BUSINESS SECRETS: Among other things, in a sound alternative\- = issue, clearing and credit system, there will be no business\- secret. = Either it will not be assumed to be necessary and\- justified or it will = not be planned in, right from the beginning \- of competitive issues or current and clearing account services. I = \-would also predict that issuers or account keepers who would not \- = claim "business and privacy secrets" in this respect, would \- be more successful, i.e. more used, than the other ones would be.\- - = J. Z., 3/97. See : SECRECY. \par BUY AUSTRALIAN? The only way how buying from yourself and your = \-neighbours can be assured is by issuing your own exchange media as far = as possible, i.e. buying as many of your requirements and\- paying as = many of your debts with them as possible. They would,\- obviously, have no other foundation than = your own readiness to\- accept them in payment of your goods and = services and for this\- they would inevitably return to you. Buy with = your own local\- currencies, which only oblige you and they will inevitably return \-to = you in payment for your goods and services, like any other \-IOU. = Monetize your own goods and service supply capacity. You do\- not even have to be an Australian nationalist to do so in your\- own = interest. As far as Australian imports are concerned: See to \-it that = they are paid for with competitively issued assignments \- to Australian export goods and services. Then, obviously and inevitably, = corresponding exports will follow these imports,\- obviating your = nationalistic slogan appeal. - J. Z., 27.8.95,\- 19.3.97. \par CAPITAL REQUIRED FOR BANKS OF ISSUE? Banks of issue require\-n = either a saved up capital of their own, nor investments by \-others not = a guaranty capital in case of their liquidation. What \-they do need is = at least a leased office, office equipment a \- trained staff, a printer's credit and an issue and reflux \-technique = and agreement on it with the local businessmen, who\- provide the = "cover" and "redemption fund" and "guaranty capital"\- with their goods = and services, which they have ready-for-sale,\- and an agreement with local employees, suppliers, tradesmen \-and = professionals to be paid in the notes of the bank of issue,\- at least = as long as it stands at par with its nominal value. \- Moreover, full openness of all transactions and publicity would be = needed for all its issue details, in order to dispel ignorance, = prejudices, distrust and slander. In other words,\- monetary freedom is = only possible within sufficiently enlightened\- circles. - J. Z., 3/97. \par CASH PAYMENTS & GOVERNMENT ATTEMPTS TO ELIMINATE THEM: For = tax-"\-reasons" and in the pursuit of its drug war, governments are more = \- and more on the road to eliminate cash payments altogether. They wish to = have all non-cash transactions becoming visible to them\-, on their = computers and accessible to their form of legalized \- looting. Unless we can sufficiently Privatize our computerised\- = exchanges, we will thus become more and more exposed to Big \-Brother, = his exploitation and abuses. I am in favour of our doing\- away with = government cash and non-cash tran sactions, government \-taxes and subsidies, government guarantees and = "insurance" \-schemes, altogether, in all spheres, at least for = volunteer\- communities which know and want to arrange their affairs in = a \- more just, non-exploitative and convenient way, one that does not\- = endanger them and their property and exchanges. - J. Z., 3/97. \par CASH PAYMENTS VS. NON-CASH PAYMENTS. In recent years most wages = \-and salaries were also paid directly into bank accounts only and = \-spent from there via cheques and credit cards, without using\- cash. Thus the proportion of cash habitually kept available, in\- = normal times, and formerly necessary for most wage and salary payments, = becomes a smaller and smaller fraction of all the \-non-cash means of = payment at any particular time. When, \- nevertheless, by law and juridical decisions, every debtor\- remains = obliged to pay in cash upon demand by a creditor, then a\- large crisis = factor is thereby built into the payment system,\- especially a = monopolised and regulated one, that would require \- considerable time to provide any extra cash that is wanted and\- that = may even be legally prohibited from providing it. - J. Z., 3/97. \par CASINO MONEY: Casino money is also possible and, to some extent,\- = already practised, if only to ensure honesty among a casino's = \-employees. So, the customers of a casino usually have to buy \- first the casino's own token money before beginning their games in it = and they have to redeem their winnings, if any, in\-to outside money, = before they leave. Is casino money as taxed,\- regulated and mismanaged = as government money is? Is it ever \- inflated? Is it ever deflated? Or is even a stagflation avoided\- in it? = - J. Z., 19.3.97. \par CENTRAL BANKING & INTEREST RATE POLICIES : Central bankers, other = \-bankers, financial journalist and economists nowadays and as a \-rule = to not seem to be able to think of and propose anything \- better than putting the interest rate or our despotic monopoly \-money = either a few notches up or down. - J. Z., 3.10.96. \par CENTRAL BANKING: There is not a single good reason to confine = \-monetary, clearing or credit competition or cooperative \-credit and = monetary arrangements to international competition\- between central = banks, their exclusive and forced currencies, for\- whole national territories and their exclusive and enforced paper = \-"standards" only. That is like considering politics only from the = \-point of view of despotism and economics only from that of \- command economies. Those with as limited horizons should only be\- free = to limit their own horizons and actions within their own\- limited = spheres and associations, not the horizons and actions of others who do = \-leave them alone. - J. Z., 18.3.97. \par CENTRAL BANKS. SHOULD THEY BE ABOLISHED OR DESTROYED? Maybe the\- = Tamil Tiger terrorists of Ceylon are not so dumb as most other = \-terrorists tend to be? According to ABC radio news on 1 Feb. 96, \-su icide bombers attacked the central bank in Colombo, Ceylon.\- Alas, in = their attack ca. 100 people were killed. A night time\- raid, preceded = by a warning, might not have cost any lives. There \- was no report on how much the bank and its ability to function\- were = destroyed. No such raid would be as helpful as private and \-cooperative = note issues could be - and refusals to accept the \-central bank's = currency any longer. - J. Z., 1/2/95. \par CHEAP MONEY: The cheap money of monetary freedom is different\- = from the cheap money of monetary despotism. It would not and\- could not = lead to inflation and unjustified economic investments.\- - J. Z., 1.12.96. Its production and acquisition would be cheap. \-It = would be relatively cheap to get it accepted in your local \-community. = And it would have a cheap, easy and fast reflux to \-you, for its = redemption into the goods and services that are the basis of your issues. You = would not have to pay a monopoly \-interest rate for exclusive and = forced exchange media provided by \-a monopolistic and coercive central = bank. Your own money would be\- cheaper and better for your purposes and those of your customers.\- - = J. Z., 20.3.97.=20 \par CHEQUES FOR CLEARING ONLY: They do not have to be covered by = \-legal tender savings or deposits or gold or silver reserves and \-do = not have to be redeemed in any rare metal. It is enough if \-they are = useful enough for clearing settlements, i.e. if the=20 \-cheque account holder gets enough credits written into his cheque\- = account from the sales of his goods, services or labour, which \-here, = too, form the real cover for the value of his cheques.\- Without them his cheque account would soon run red. - J. Z., 3/97. \par CHILD LABOUR: Why are most kids not productive most of the time? = \-Because we are prepared to subsidize their idleness, although\- there = would be plenty of jobs for them in house and garden,\- industry, = business and agriculture, all voluntary, part time,=20 \-market rated, if all restrictions upon their creative and \-productive = activities, including taxation, licensing, labour \-laws, wage controls = etc., were abolished. Only their guardians \- should be free to set rightful limits upon their activities. - J. Z., = 16.3.97. \par CIRCULATING MEDIUM: A forced and exclusive currency hardly = \-deserves the name of a "circulating medium". - J. Z., 2.7.96. It \-is = rather forced, like a requisitioning certificate, into the \-hands of = helpless creditors, including all wage and salary and=20 \-pension recipients. - Something that circulates only under \-coercion = does not circulate under its own steam. It would be \-rejected under = freedom. - J. Z., 19.3.97.=20 \par CIRCULATION QUANTITY: How can one determine for any particular\- = time and place and condition the right quantity of exchange \-media. In = the same way as the right quantity of any products and\- services is determined, i.e. by free pricing. When sound exchange = \-media are freely chosen and publicly rated against each other and = \-the competing exchange media against them and against other \- exchange media, then the exchange media will either be at par \-with = their nominal value (their value standard units) or below\- or above par = with them. If below par, or at a discount, they will \- be less and less issued and more and more refused or discounted.\- Thus = they reach the limit of their circulation. If they do \-circulate still = at par or even above par, then further issues are \-possible and = desirable. F ree market rating for exchange media, \-sound value standards, and full = publicity make the circulation\- determination automatic. We would no = more suffer shortages of the\- media and of sound standards, than we do = suffer shortages of pens\- and rulers, milk and litre measures, wheat and kg weights. Any\- = despotic attempt to determine for others the right quantity of = \-exchange media or clearing transactions and of supposedly ideal\- value standards for all their transactions, is condemned to\- failure, = like all other attempts at central planning and \-direction or = experiments with command economies. - J. Z., 3/97. See : LIMITS FOR = \-ISSUES.=20 \par CLASSIFICATION SCHEME FOR EXCHANGE MEDIA AND VALUE STANDARDS: The = \-literature on the subject is too extensive. Tabulations of the = \-historic and proposed exchange media and their characteristics \-and, = likewise, of value standards should be drafte d, amended and gradually filled out in a collaborative process. False = premises, \-observations, conclusions and theories involved in them = should be \-pointed out, as well as the literature defending and = attacking \- each position taken. No copyrights should be claimed. But each = \-contributor should sign his statements. Giving each statement a = \-number would make referrals more easy. - J. Z., 16.3.97. \par CLEARING AND INTEREST RATES, SHARES AND TICKETS, SAVINGS & = \-TURNOVER CREDITS: An extension of clearing merely indicates\- easier = sales and a greater total turnover. It does not directly\- indicate or = represent a corresponding increase of medium and long- \-term capital becoming available. Additional turn-over clearing \-can = only reduce the short term turnover credit interest rate. To \-affect = the capital interest rates, clearing certificates and\- notes must, like money now, be saved up and invested on medium or = \-long terms. Tickets to a cinema are just turnover media, too. One = \-cannot buy the cinema with them, directly. But if one had bought \- e.g., a large block of tickets for a large party and for one or \-the = other reason the party is turned off, then one could negotiate with the = cinema, offering to sell it back the block of \-tickets, either for = other forms of cash or for one or several\- shares in the cinema. If the cinema is certain to be able to sell \-the = tickets again, before the performance, then it will be \-amenable to = either buying them with other means of exchange or,\- perhaps, with some = shares in the cinema. The time span, \- motivation, ownership, function of shares and circulating notes \-is = quite different. They circulate for different periods and\- among = different people and are used for different purposes, even \-when both = are issued, somewhat circulating and ultimately\- somewhat redeemed, at least during liquidation of a business. To\- try = to turn capital assets like raw materials, premises, and \-machinery or = the capital s ecurities that represent them, directly into currency, supposedly useful = for the current purchase of\- consumer goods, is a great mistake because = at the same time no \-equivalent consumer goods and services are = provided by the issuer \- to redeem them with. The holder of the certificates could only\- force = the issuer into liquidation and then claim his share in raw\- materials, = premises and machinery - but few would want to acquire \- them. On the other hand, if there is someone prepared for a \-take-over = bid for the business of the issuer, then such issue\- attempts would be = very much welcomed by him, for this scrip would\- rapidly depreciate in a free market and could thus be bought up\- very = cheaply and used in the take-over bid. A few such\- experiences, well = publicised, will serve as a deterrent. But \-that does not mean that = there should not be full freedom to issue=20 \-financial securities, too, which quite clearly represent capital = \-assets and are bought up and traded by people interested in\- capital = investments. To reduce this kind of mix up of capital\- securities with turnover bills and notes, the issue departments\- for = both should be as far as possible kept separate, for people \-have = fallen for the errors of "asset currencies" again and again\- and they = have often been embodied in banking laws. \par CLEARING AND QUANTITY OF MONEY: Full clearing freedom (as well\- = as the freedom to issue and to rate and discount or to refuse\- money = tokens, be they "real" money or "merely" sound money substitutes) when = \- fully thought through and applied, at least in thought\- experiments, = demolishes the notion that a certain quantity of \-money is absolutely = necessary and that it ought to be fixed, e.g. \-to the GNP, as = calculated by some, or increased at a fixed rate,=20 \-or tied to the population, the price level, a corresponding = gold-\-reserve etc. etc. People need only freedom to clear and to\- = account in value units chosen by them or accepted by them or even \- established by them, not any exchange medium or any particular = \-quantity of any exchange medium. However, once exchange media are = \-seen as media to facilitate clearing, then as many of these media\- s as those people involved in the clearing find convenient to use,\- = should be freely issued and accepted by them and cancelled after \-their = use. Nobody can rightly prescribe for others how many of\- such more or = less adva nced private "cash" or clearing or ticket \-certificates they should be = allowed to issue and accept. That \-would be like prescribing to them = how much they should produce \-and exchange. The subjective value theory = applies here, too,\- quite apart from property rights and the right to make private = \-contracts. No monetary theoretician or technician, expert or = \-reformer or authority has the right to prescribe to them how they \- are to settle their exchanges and to promote them to the utmost \-and = what means and processes they are to use for them. In fact\-, there = exists no one and no one may ever exist who knows best what\- is best for all other people in all situations or even some of \-them. = Even if he did exist, he would still not be entitled to \-force other = people to become happy or rich in the way he thinks \- they ought to go. If they do adopted him, individually, or as a group, = as their medicine man or guru, then that is their affair \-and risk, = indeed, also their right and part of their liberty. - J. Z., 3/97. \par CLEARING: Let's clear the air about clearing. With people free \-to = clear their labour, services and goods, all ready to be\- supplied, for = the labour, services and goods of others, there \- could be no unemployment or underemployment or sales difficulties \-for = any labour, services and goods that are still wanted at\- market prices. = All being supplied with either sufficient sound\- exchange media or = clearing avenues, to facilitate all these=20 \-desired exchanges (settled, even when paid in "cash", simply by a = convenient form of clearing\-), all could be cleared against each other, = provided only that\- all people concentrated on supplying labour, = services and goods \- that are wanted rather than on those that are not wanted or not \-at = prices that would more than cover their production costs. \-Moreover, = under this condition, all ready for sale labour, \- services and goods could be liquidified & then utilized as purchasing = \-power - redeemable in these wanted things. Whoever puts any \-obstacle = in the way of the free and competitive private or\- cooperative supply = of sound exchange media o r of clearing avenues \-and banking institutions and payment centres, = does thereby assure \-unemployment, underemployment, depressions, = inflations and\- stagflations. While a single and very efficient = clearing centre\- for the whole world could, theoretically, arrange for all possible and = desired\- exchanges, keeping all willing to provide labour, services = or\- goods busy, producing them and exchanging them through this clearing = centre, it remains true that coins and paper notes, do facilitate = clearing\-, e.g. in the purchase of a newspaper or a book. Thus, \- fully freed clearing should always be accompanied by the free \-issue of = optional and market rated and competitively issued \-exchange media in = form of paper notes and coins. The sum of clearing exchanges and the = total circulation of notes required \- can be no more rightly and efficiently prescribed or limited than\- = could be the sum of labour, services and goods which people are\- able = and willing to provide for each other in a division of\- labour process = that depen ds upon free enterprise, free exchanges\- and free trade. All attempts = to centrally manage and limit\- exchange media and clearing facilities = have led to abuses and\- economic crises. Only full monetary freedom can = prevent them - as\- far as is humanly possible. - J. Z., 3/97. \par COMMODITY RESERVE STANDARD OR CLASSICAL GOLD STANDARD? MONETARY = FREEDOM: Competition would provide better money than\- would government. = I believe we can do much better than gold ever \-made possible. = Governments cannot do better. Free enterprise,\- i.e. the institutions that would emerge from a process of\- competition = in providing good money, no doubt would. There would \-in that event = also be no need to encomber the money supply with \- the complicated and expensive provision for convertibility which \-was = necessary to secure the automatic operation of the gold\- standard and = which made it appear as at least more practicable\- than what would ideally seem much more suitable - a commodity \-reserve = standard.... - Hayek, Denationalisation of Money, 83. \par COMMUNISM, CENTRAL BANKING AND LEGAL TENDER: Why did and do all = \-supposedly anti-communist parties and non-communist parties \-support = both central banking and legal tender even after the fall \-of most = communist regimes and economic systems? Why is that \- system still preserved in the countries supposedly liberated from = \-communist regimes? Karl Marx and Engels in their platform in the\- = Communist Manifesto of 1848: "5. Centralization of credit in the \-hands = of the State by means of a national bank wit h state capital\- and an exclusive monopoly." In an 1848 leaflet this = was further\- clarified in point 10: "A state bank the paper money of = which is \-legal tender, will replace all private banks." - In the = Communist \- Manifesto they called their programme themselves one of "despotic = \-inroads on the rights of property and on the conditions of\- bourgeois = production, by means of measures, therefore, which \-appear economically = insufficient and untenable." - So, why is\- this despotic, insufficient and untenable system still legally \-and = coercively upheld everywhere and hardly even criticized? -\- J. Z., = 20.3.97. \par CONFIDENCE & TRUST: The present banking system of monetary = \-despotism does not deserve the maintenance or restoration of = \-confidence or trust but, rather, the solid establishment of = \-permanent doubt and distrust and the replacement of this \- despotism by the individually chosen alternatives of monetary freedom. - = J. Z., 15.3.97. \par CONFIDENCE: Confidence as the basis for the value of a currency?\- = Nowadays you can only be confident that a government paper\- currency = will NOT be redeemed by the government issuer (or its\- central banking system ) in gold or silver or by any private bank\- = forced to deal only in the government's forced and exclusive \-currency = - or forced and exclusive currencies of other \-governments. - You can = also be confident that you can pay your \- taxes with it and that the government will mostly back you if you \-use = its currency to cheat your creditors with it for part of your = \-repayment obligation. At most you remain somewhat=20 free to try to purchase with it, at current paper prices for gold weight = units, \-and often taxed, gold on a somewhat free gold market. - J. = Z.,\- 16.3.97. \par CONFIDENCE: Only that confidence is needed for a currency, to be = \-widely enough accepted, at least locally, that consists in the = \-assurance that one can buy with the currency all one's wanted\- consumer goods and services and pay one's debts with it. When \-this = confidence is assured then it comes close enough to a \-certainty. A = further guaranty by the issuer: a promise to \-deliver gold or silver = for the currency, too, upon demand, is\- then not required and thus metal redemption will be renounced by\- = competitive issuers and not asked for by most users of such a\- = currency. If they really want to buy gold, they would remain free \-to = do so on a free gold market. - J. Z., 16.3.97. \par CONSPIRACY THEORY AND CREDIT-, MONEY- AND DEPOSIT "CREATION": To\- = assume that all accountancy and trustee companies and directors of = \-banking coops are unanimous members in an international conspiracy, to = "cover up" an endless "creation" of deposits and \- credits out of thin air, goes a bit too far for me to take on\- = credit or faith, just upon the assertion hot air or written assertions = that such things would\- occur. Some accountants have written detailed = reports to prove \- that such frauds and cover ups do not and cannot occur (although\- many = other culpable acts do happen), and that we have here \-merely one = segment of the many sectarian and popular beliefs on \-money and credit. = - J. Z., 3/97. \par COSME, PARAGUAY, Cooperative Colony, had a Labour Exchange Bank, = \-according to TIMES, Aug. 31, 1897. Source: A. Menger. \par CREDIT BANKING: It is possible without fractional gold reserves\- = or short sales of gold, without the risks of runs upon gold \-metal or = legal tender cash or reserves of legal tender at a\- central bank. = Matter of fact, it works best when purely based on=20 \-credits and debts and their free clearing, using any value \-standard = which the participants find acceptable for their \-accounts. There is no = fixed limit for the total productivity of \-people, at least not in the = long run, in spite of obvious present=20 \-limits, due to presently known and accessible resources, \-scientific = knowle}{\f0\fs24 d}{\f0\fs24 ge and technology and available capital. = But \-under full freedom each can only exchange the products and \- services of his own productivity for those of others. That is his\- = present limit. Credit merely bridges some time spans, during\- which he = can develop his potential. But, apart from insurable\- risks, all = credits and debits cancel each other. And a small \-insurance charge on all transactions can cover that risk. We\- should = credit all participants in credit-money transactions with \-the ability = to select for themselves better value standards,\- under freedom, than governments provide them with under monetary\- despotism. = See: ISSUE LIMITS, CIRCULATION, LIMITS, REAL-BILLS\-DOCTRINE. - J. Z., = 3/97. \par CREDIT CREATION, MONEY CREATION, DEPOSIT CREATION, SOCIAL CREDIT\-: = To Robert de Fremery: Your own preferred monetary system is \-based on = some of the premises of Social Credit people - followers\- of Major = Douglas' teach ings. They are split in many different\- schools and sects but do share = some common premises or prejudices and false observations, especially = that on the supposed\- "creation" of money and credit out of nothing. It = is\- fundamentally and especially false when ascribed to those private = \-banking institutions, which are otherwise privileged but not in \-this = respect. "Ex nihil nihil!" ("Nothing comes from nothing!") \- Even the greatest artist, chemist, physicist or biologist cannot\- = create something from nothing. He can only reshape and rearrange\- = existing materials in a better way. When the government "spends" \- its additionally printed legal tender notes, then it does not \-create = anything, no more so than an officer of an occupation army\- does, who = issues "requisitioning certificates" in a supposed\- "payment". I.e., he appropriates the values of others. He doe s\-not = "create" new values. When a cheque forger forges cheques, he\- does not = "create" anything, either, but, instead, wrongly \-appropriates some = money that r ightfully belongs to others. When a \-government issues directly or = indirectly its currency notes,\- those needed to finance its spending as = well as those which an \- economy has to have, in the absence of monetary freedom, as some form of = money, even if it is a monopolized money, then it does\- not create and = offer something that is currently wanted, to the \- extent that it is supplied, but it rather makes war on many to\- most of = its subjects and charges them the costs of this warfare \-under all = kinds of illusions, lies and false pretences. It \- requisitions rather than produces. It can rightfully act only for = \-those of its peaceful citizens who have given their consent to \-all = its actions. And that is often only a small minority. Least\- of all is = it able to provi de peace, justice, prosperity, freedom,\- security and stability. = Parodies of each are offered instead and\- contraries. Please consider: = For many decades now we have seen the growth not only of privileged = commercial deposit and savings\- banks but also of cooperative and credit union banks, even banks = \-specially of and for women and for the ecology and conservation = \-movement. How happy would all these people be, and how fast their \- banking enterprises would have grown, if they had "discovered" \-that = merely by putting on the hats of bankers, they could, thereby, \- suddenly and arbitrarily multiply their deposits, at will, between them, = "creating" wanted values and becoming rich, "out of\- thin air". How = nice it would be for them if they could "create" \-most of th e funds they need for a new car or a new house in this\- fashion! How = come all these millions of cooperative people did\- never discover THESE = supposed banking advantages and privileges \-for themselves? Are they so = dumb or blind? Berthold Brecht must\- have had a similar prejudice in his mind, when he suggested, in\- one = of his left-wing propaganda writings: "Do not rob a bank! \-Start a = bank!" - If that kind of "something for nothing" scheme \- were possible, then everybody, especially the already rich and\- = powerful, would love to get into the act and all barriers against \-it = would have been broken down, long ago in their general rush for unearned = riches. How come so many rich people, skilled \- businessmen and entrepreneurs and innovators are still satisfied\- = with making an average of 5 - 15% in interest and profits on\- their = productive capital investments, when they could thus, and\- much faster, multiply their riches without any effort or ingenuity\- or = investment and risk? What could hold them back or away from\- this = supposed "pot of gold at the end of a rainbow"? - I have\- reproduced 2 books critical of Social Credit ideas and also some\- = writings by David Taylor. A third book title of this kind did once see = but did not buy. - J. Z., 3/97. =20 \par CREDIT CREATION: There is no room or possibility for = "credit-\-creation" in a monetary freedom scheme. It does not even exist = in\- the present system of governmental monetary despotism and\- government privileged banking - although many other mistakes are \-made = in that system, many wrongs committed and many abuses do\- occur there. = Government monetary and financial activities are\- never "creative" but, = rather, confiscatory. - But=20 can one prove that something non-existent does not really exist or = exists only\- in the imagination of some? That is as impossible as to = "prove" \-the non-existence of God or the Devil or of "evil spirits" or = of fairies. \par CREDIT CREATION? Many merchants do offer their goods on credit,\- = with payment due only in 30 days, and without interest, at least\- for = 30 days. Often such offers go now for much longer periods, \- even 6 to 12 months, interest free, if instalments are paid and\- often = without an initial deposit. This also might be called a\- credit = "creation", offered upon private initiative, offered quite \- publicly and to many members of the public. But what is actually\- = offered on credit is the goods of the seller, which he could also = \-repossess upon non-payment. If it were true that privately\- "created credits", seemingly out of thin air (but here granted in\- = goods values transferred, to be repaid later, on agreed terms, in\- cash = or non-cash), were inflationary, then all such actions would \-be = inflationary. In reality, they indicate rath er a deflationary\- conditions, in which sellers are desperate for cash = and do not\- flee into goods but still want money, even when the full = money\- payment is postponed for a long period and even when no interest = is\- paid. At the same time, the government inflation may go on, so \-that, = in combination, we have here a symptom for a stagflation. \-Closer still = to home: If you were to grant me a credit in form \- of your literature, postponing repayment for it and if I were to \-grant = you a credit in my literature, mostly microfiche,\- postponing payment = for it, would we then have to add up both \-these credits as our = contributions to the existing money\- inflation? Or would exact equivalents of valued goods-deliveries\- = exist? Could not out mutual debts, be completely cancelled, if \-they = happened to come to the same amounts, without a single cash\- or non-cash Australian or U.S. dollar being set into motion in \-the = process, even without effecting the statistical GNP, although \-both of = us might feel information-enriched? - Would any woman, \- who in a baby-sitting exchange accumulates some baby-sitting credits = against other participants, thereby contribute to the \-supposedly = credit creation and credit inflation? - If you are\- short of cash, so = short that you cannot buy a beloved grandchild\- a present, and promise to buy it later, after your next pay day\- and = he grants you a credit for this, does he thereby contribute \-to the = supposed "credit creation" and "credit inflation" or would we \-rather = have a deflationary situation, at=20 least one confined to you? - Try to envision a private bank of issue, = one designed and for discounting short term real bills or other promises = to shortly pay for goods received, or for keeping current accounts with = cheque and clearing facilities and imagi ne it as having the worst possible intentions\- but, at the same time, = not enjoying the privilege of legal tender for its notes, or\- the = chance to hide its over-issues, in the absence of a free \-market for = exchange media and value standards and also not \-enjoying the privilege of keeping as "business secrets" the facts\- of = its short term cover and reflux arrangements and of the number \-of its = notes in circulation at any time and of the degree and\- speed of their reflux. Under such free and open conditions its\- notes = would very soon get a discount upon any over-issues and would then = encounter \-wide-spread refusals, that will extend to its future issues, = too,\- which it might have reckoned upon. Any holder of its notes, with a\- = wad of them in his hands and, finding that he has no debts to pay \-to = the issuer nor that there is anything he wants or can purchase\- with them, because there is an insufficient "readiness to accept" = \-foundation for them, especially, an insufficient shop foundation, = \-might find his own wad=20 of notes depreciating in his hands and cursing himself to have accepted = so many of them merely upon\- confidence or trust in them, which were = very much misplaced. But\- few will be so foolish to accept many notes = from such an issuer. \- Notes they do not know or are suspicious of, or against which\- their = friends have warned them, or the mass media did, will\- simply be = refused. His only remaining option will be as a\- creditor with a claim = against all the remaining assets of such a \- fraudulent issuer. The same applies to any cheque account credits\- = obtained with such a dishonest bank. If the courts were just, efficient = and competitive, the "banker" involved would loose his \- car, his house, the shirt on his back and would be forced, for a\-long = time, to work in possibly menial jobs to pay his restitution\- = obligations. But it is unlikely to come to many such cases. They \- were rare even in the cases of "wildcat banking" (with all the \-flaws = and fraud options of metal redemptionism), as several \-recent = researches have shown. Already William B. Greene, in his\- classical = work "Mutual Banking", pointed out, the notes of\- supposedly failed U.S. banks, unable to fulfil their formal = gold\-redemption obligation, often continued to circulate at par, = until\- all the local short term debts, they were based upon (in\- discounting), had been settled by paying them with these notes.\- Some = circulated even at par beyond such short term periods, kept\- at par by = longer running debts with their reduced current demand\- for notes. Via = the repa yments of debts to the banks the notes\- disappeared from circulation = and no note holder was economically\- harmed by notes thus kept at par, = even though he did not get any\- gold coins from the issuer. He could = have got them, if he wanted\- to, on the free gold market. Under freedom conditions a\- unilateral = "creation" of credit, deposits or money, at the expense of others, is = even less likely or possible than it is\- now. - J. Z., 3/97. \par CREDIT, ESPECIALLY TURNOVER CREDITS. IS FUNDING ALWAYS REQUIRED?\- = Your system would permit credits only with already pre-existing \- monetary funds, with savings that are invested. Such notions were = natural for advocates of a an exclusive rare metal currency\- or of 100% = covered certificates of g old, silver or platinum or of any other commodity-based currency, based = on e.g. stored coal or wheat reserves. In this whole host of \-opinions, = preconceived notions and convictions, the clearing\- options are usually overlooked, especially in the sphere of = turnover-\-credit. These options have been extensively discussed by = Ulrich\- von Beckerath, Prof. Heinrich Rittershausen and Dr. Walter\- Zander, to speak only of the most advanced representatives of the\- = German monetary freedom school, particularly with regard to the \- inflation, depression and mass unemployment risks of the present system. = (I have tried to illustrate the turnover-credit and\- clearing money = issue options in my circulation charts in PEACE\- PLANS 41, to = supplement their theoretical texts and those of\- others.) Turnover credit, like medium and long-term production\- = credits, also benefits from a sound value standard, preferably \-one = chosen or agreed upon by the participants, but it does not \-need any = external provider of exchange media or any unifo rm and\- externally prescribed value standard. It can provide its own = \-self-liquidating and inflation- and deflation-proof clearing \-media = or banknotes and did so, traditionally, for a long time and\- well, limited or interrupted and sabotaged, sometimes, only by \-the = prejudice in favour of metallic reserves and redemptions. It \-could = have functioned much better and undisturbed without these\- unjustified and unnecessary impositions, "precautions" and \-"reserves" = or "guaranties". Especially under full freedom of\- choice of value = standards, if the participants are sufficiently \- enlightened on this and on the freedom to issue and refuse to accept or = to discount (or to\- free-market-rate or price) any currency (that was = not issued by them or which they are not, by=20 contract, obliged to accept at par) and thus are habituated to compare & = choose, rationally and well informed, all exchange media and \-value = standards. These two should not be coercively and\- monopolistically combined because then the pricing mechanism of a\- = free market cannot function with regard to them. This tradition \-is = sometimes known and described as the essence of the "banking \- principle" (especially in Beckerath's writings, and in the \-English and = US tradition as the "Real Bills Doctrine". Alas, it, \-too is largely = still misunderstood even by most "free banking" \- advocates, even 200 years after this principle and practice was = \-seriously but not yet fully discussed. I had a long exchange\- with = Kevin Dowd on this, which I will not repeat here. It is \-filmed in my = series. Considerable controversy on this subject \- exists still. Most of it overlooks some monetary freedom \-traditions = or options. I will here only shortly describe, in one \-instance, what = is involved. Even after centuries sufficient\- enlightenment in this = sphere is still as rare as it is e.g. on=20 \-free trade, land reform, cooperative production, rightful\- revolution = and liberation and defence efforts: Assume a local \-productive and = exchange and payment community, free to help \-itself and insufficiently = supplied with government cash currency \- to pay all wages and to enable all potential customers to pay for = \-their wanted and needed purchases, e.g. a depression condition. = \-Under freedom the local factory owner, for instance, who might\- = employ mos t local people, would be free to sell his goods, as \-usual, to a = wholesaler, for a short term promise to pay, which \-the wholesaler = hopes to make good by the sale of the goods to \-retailers. So he pays = the factory owner e.g. with a sound \- commercial "bill of exchange", sound, because it represents a \-real = commercial transaction, a sale of goods already produced and \-on their = way to the final consumer. But the factory owner cannot \- pay his labourers or his suppliers with this large bill. It is a single = \-certificate for a large amount owed to him. So he needs it\- "broken" = or "cut" up into small bills, in money denominations, \- running for the time until the large bill is due. Thus he takes \-the = large bill to a local bank of issue, which does provide this\- service = for him. For the bank's discount of the bill it does not require \- any savings or rare metal gold reserve. It can and should\- "discount" = the large bill by exchanging it into its own \-standardised and typified = bills or bank notes, in money \-denominations. (It should not utilise = any exiting legal tender \- paper standard for this, for then it would be involved in any = \-inflation or deflation of that paper standard, by the third party = "authority".) Now, neither the large bill nor the small bills \-need = carry any promise to pay gold coins or bullion or government\- currency but = merely the promise to accept them in clearing and \-payments like ready = cash - using such and such a value standard, \-one agreed upon. With = this discount the employer gets the small\- bills or notes he can use to pay his labourers with. (If these \-are = not prejudiced against any private payment alternatives, \-misled by = their union functionaries, as usual.) Alternatively, \-he can establish = corresponding deposits at the bank for them, \- which they can dispose of with cheques or credit cards. Those\- = hesitant to accept the alternative private bills or deposits could be = informed and shown easily that the local shops are ready\- to accept = them like ready cash. Perhaps an insufficiently=20 \-prepared group of employees hesitates or refuses at first such an\- = alternative payment. Then someone might be sent by them, \-immediately, = to the nearest store to try this new payment method\- out, while the = others still wait, refusing to accept the\- alternative banknotes or accounts until their messenger returns. \-He = could be back within minutes with his important message: It's \-as good = as cash at the nearest local store! Thereupon the \- labourers will be, most likely, willing to be paid in this way,\- or so = we will assume here. As usual, they will spend their cash \-or cheque = accounts fast, mostly in the local stores. These return \- the notes, directly (or indirectly via their bank), to the\- = wholesalers, to pay with them for their previous or new orders.\- The = wholesaler uses the notes - or the corresponding account at \- the bank, to redeem his large bill of exchange, now held by the \-bank = against him. Then, ideally, all the small notes and the \-large bill = should be cancelled. They have fulfilled their \-functions. This process = can be endlessly repeated and paralleled=20 \-by other such turnover-credit facilities or, accordingly applied, \-in = other circles, too. Such bills or notes will be readily\- accepted, at = least locally, only if and while they are running at \-par with their = nominal v alue, e.g. a certain gold weight unit, \-initially probably the = government's paper or rubber "standard".\- They will be and should be = widely or altogether refused should \-they suffer a considerable = discount, making further issues \- impossible or costly to the issuer and beneficial only to his\- = remaining debtors - if he has not contractually obliged them to\- always = accept his notes at par. Obviously, they do not require a \- gold cover or reserve or redemption by the issuer in order to \-function = well enough. Such a single issue transaction does not\- describe = sufficiently the mutual dependence between local firms \- and others. But, historically, it has often happened that notes \-of = well known local firms were locally circulating like ready \-cash. Some = of these local firms did even later turn into local \-banks of issue. - = The law in most countries and most\- theoreticians and reformers would not permit a local payment\- = community such a freedom or freedom for essentially similar \-mutual = clearing experiments. Almost all \- rely on father State or Big Brother doing his best and on his best being = good enough. Even at their best they are mostly not good enough, nor can = they be, for several \-inherent reasons. To illustrate one of these, = shortly, Ulrich von Beckerath used to sa y: A single bakery cannot supply a whole\- country sufficiently with = fresh bread, either. For more arguments on this see under CENTRAL = BANKING. The banking \-principle or real bills doctrine, as applied = above, is not \- and cannot be inflationary - if a sound alternative value\- standard is = used. If, uncritically, an inflated government \-standard is used, then = it would, naturally, participates in the\- general inflation - but not = by adding to it. Remember, it merely \- mediates local genuine, wanted and necessary exchanges. It is = \-self-liquidating. It does not put additional notes permanently\- into = circulation, by giving them a fictitious, exclusive and\- forced tender = "value" but it sees to it that the issue is in\- correspondence with the goods produced and already sold to the = \-wholesalers and on their way to the retailers or on their shelves\-, = waiting for the consumers and also that these additionally\- issued notes, achieving additional turn-overs, are extinguished\- = again, soon, with the consumed products. Often they may already\- = disappear from circulation or their representation in deposits,\- before the worker - consumers have used up all the perishable \-food = items they may have bought with these private notes or\- accounts. = Without this option to provide wage payments, the factory owner might = have to close the factory, the wholesaler \- could not redeem his bill, the retailers might go bankrupt, the\- = workers would go hungry - to the extent that the governmental\- central = bank system does not supply the local community\- sufficiently with cash = - or clearing facilities. Even in the best=20 \-of times under the despotic central banking system a number of\- = manufacturers and wholesalers and retailers do go bankrupt merely = \-because of the unjustified and unnecessary frictions and\- = difficulties introduced by this anti-free-exchange system. \- Tradition and sound theories insisted that only sound commercial \-bills = be so discounted, because they are self - liquidating, not "financial = bills" or long-term or habitually extended bills,\- bec ause these would at least postpone their redemption, for a\- longer = period and would be much less certain to be redeemed by \-their debtors = at all. FINANCIAL bills, if discounted with\- banknotes that are not = covered by gold reserves, would\- inevitably lead to a depreciation of these bank notes (unless \-they = are given the legal tender privilege and can thus drive up\-prices) in a = market in which they may be freely rated, refused \- or discounted against sound alternative value standards and other = \-currencies. Their "reflux" is not assured, in time. The same \-amount = that was issued is not soon due, exerting a corresponding \- immediate demand for the notes. Moreover, they do not represent = \-additional goods added to the market, which act as their \-redemption = fund. On the contrary, they exert an additional demand\- for the pre-existing goods, thus driving prices up. Only already \-sold = goods, ideally consumer goods, not stocks of presently\- unsaleable ores = or grains, or ready for sale goods (of shop-\-associations acting as = note issuers) can form a rightful and\- efficient basis for private currencies, local or shop currencies, = \-that are truly "current" and readily acceptable because of this = \-foundation or "readiness to accept" for daily wanted consumer goods = and\- services . All other kinds of issues are mostly attempts to thus \-acquire the = goods and services of others without immediately offering them goods and = services which they do want. Assignments \-upon accumulated wool or = wheat or coal stocks or blocks of land\- have only a speculative value to some consumers, with some \-capital to = invest, more or less speculatively, for prolonged \-periods. They cannot = satisfy their "current" or "currency" \-requirements and they do not = oblige those who have ready for sale\- goods and services to offer. Only when the issuers are \-monopolists = will the suppliers of consumer goods and services be\- more or less = forced to sell for such monopolistic issues, if they want to participate = in monetary exchanges at all. - The "Real\- Bills Doctrine", as practised above, does not fulfil the\- requirements = of Rothbard's "100 % Gold Dollar" or of Robert de\- Fremery's = "Population Standard." But it can satisfy the exchange \-requirements of = a local community, no matter how productive or=20 \-unproductive it may be and quite independent of the payments\- system = desired by a State, State federation or world federation. \-No monopoly = for such issues is needed nor any coercive powers but\- merely the right of the believers in them to practise them among = \-themselves. To prevent forgeries or discover them sooner and to \-keep = better track of the issues, returned bills used to be \- regularly cancelled or destroyed. But in order to save printing\- costs = this practice was largely discontinued and the same paper-\-bills were = issued over and over again, as long as they lasted, in \- new such limited and self-liquidating issues. Beckerath suggested \-a = return to the cancellation practice after the reflux. He also\-suggested = a limited and short circulation period for the issue of\- each serie s. Now there exist even automatic machines that check \-for forgeries. = Duplicate numbers in short and often issued series\- of notes, that = circulate only shortly and locally, in most \-instances, before they = return, would be very rapidly discovered by \- the use of such machines. Then, in many instance, the forger \-could be = traced very rapidly, too. - J. Z., 3/97. \par CRIMINAL MONEY ISSUES: The issue of monopoly money or of money that = \-is otherwise coercive and confiscatory or fraudulent towards third = parties, who \-have not contracted for it or were not at liberty to = contract, for\- themselves, payments in alternative and better currencies and may\- not = freely refuse or discount the monopoly money, is quite wrong, \-even = criminal and harmful. - J. Z., 1.2.96, 20.3.97. - That, at the \- same time, it does provide a uniform currency for a whole territory, = cannot make up for its \-wrongs and the harm it does. - J. Z. 20.3.97. \par CRISIS THEORIES: Decades ago over 140 were listed once,\- = somewhere. Probably many more do exist.\tab They are so numerous that = \-all should be listed - and confronted with the facts and contrary \- theories as far as is possible, in order to enable the patient = \-researchers to finally sort the wheat from the chaff. - J. = Z.,\-19.3.97. \par DEATH PENALTY FOR THE REFUSAL TO ACCEPT DETERIORATED GOVERNMENT = PAPER MONEY: Governments could not, of course, pursue the\- practices by = which they forced bad money upon the people without \- the cruellest measures. As one legal treatise on the law of money\- sums = up the history of punishment for merely refusing to accept\- the legal = money: "From Marco Polo we learn that, in the 13}{\f0\fs24\super = th}{\f0\fs24 \- century, Chinese law made the rejection of imperial paper money = \-punishable by death, and twenty years in chains or, in some cases\- = death, was the penalty provided for the refusal to accept French = \-ASSIGNATS. Early English law punished repudiation as\- LESE-MAJESTY. At the time of the American revolution, \-non-acceptance = of Continental notes was treated as an enemy act \-and sometimes worked = a forfeiture of the debt." - Hayek,\- Denationalisation of Money, 28. \par DEBT FOUNDATION & CLEARING: Since clearing is the essence of any = \-monetary exchange and since all clearing is the mutual\- settlement of = debts, any money has, in essence, a debt\- foundation. It does not need = any other foundation but only a\- value standard chosen, contracted or provided by the\- participants. - = J. Z., 28.5.95, 16.3.97. \par DEBT FOUNDATION: All debtors, to enable them to pay all their\- = debts more easily, should become free to offer in debt settlement = standardised assignments upon their own goods and service\- delivery = capacity. None should be driven into bankruptcy before=20 \-this potential is exhausted. Creditors would not be obliged to\- = accept them at par, as if they were legal tender, but remain free\- to = accept them only at a market-rated or arbitration-determined \- discount, so that both parties can be satisfied with the debt = \-settlement. The automatic legal and juridical assumption that a = creditor may demand (if not, in our times. gold or silver coin or = certificates to them, that "right" has already been aboli shed)\- government legal tender currency should not be upheld, \-unless = it has been especially agreed upon in advance. Since \-creditors are = also debtors at the same time, in many ways, no\- one-sided interest or = privilege is involved here but just a \- facilitation of the payment and clearing process that was often = \-interrupted by inherently unwarranted demands for cash which the = \-old system of monetary despotism could not sufficiently and fast \- enough satisfy whenever the non-cash payment system partly broke \- down and thus, & quite suddenly, the demand for cash was increased, = precisely when cash was already somewhat short and this lead to the = part-collapse of the non-cash payment system. Sooner or\- later the debtors' clearing certificates and those of other local = \-providers of goods and services will become recognized as local = \-currency cash, which is in some ways more risk free and more\- helpful to attain and maintain local boom economy conditions. = especially when enough of these potential local issuers combine their = capacities and issue, between them, their own local currency. - \-J. Z., = 19.3.97. \par DEBTOR'S RIGHT TO SETTLE BY CLEARING RATHER THAN BY HAVING TO PAY\- = CASH: See: FUTURE'S DEALINGS WITH CASH. \par DEFLATION & UNEMPLOYMENT: Under freedom of note issue and\- freedom = to clear, all deflations and their mass unemployment can be easily and = very fast prevented or ended. A historical check of \-this assertion is = possible. One will always find deflations \- associated with this monopoly - and ignorance of, disinterest in \-and = prejudice on monetary matters, which sometimes can take the\- place of legal prohibitions. But neither state universities nor = parliamentary committees nor pressure groups of the unemployed \-and = businessmen are so far likely to undertake such research,\- although = objectively they have a vested interest in it. How could\- one motivate them to promote such research or undertake = it \-themselves? That should be easier than trying to induce them to = \-compile and read shelves of books and papers discussing the \- monetary freedom options. Seek and you shall find. But how to get\- them = to seek? Businessmen might be motivated by pointing out to \- them how vast the amounts are, that they might issue, in combination, in = short-term money tokens, based on their delivery \-capacity for goods = and services. It would be in the interest of\- any politician trying to become popular, to fast to unearth and prove = \-that connection. But, do they have the intelligence to try this\- path = towards success in their career? - J. Z., 3/97. \par DEFLATION THEORIES: They are so numerous that all should be = \-listed - and confronted with the facts and contrary theories as \-far = as is possible, in order to enable the patient researchers to \-finally = sort the wheat from the chaff. - J. Z., 19.3.97. \par DEFLATION: A deflation policy, undertaken in an attempt to undo = \-the damage done by an inflation, is like running over a person\- with = a car and then, to restore him to health, to reverse over\- him. - J. = Z., 15.3.97. \par DEPOSIT CREATION: The arbitrary creation of deposits, out of = \-nothing, is a myth that is almost as frequently repeated as \-do = Christians repeat, in their writings and preachings, the myth \- of Christ as the universal saviour for all our lives and all our = "\-sins", and "God" as a caring father for all of us, as supposedly\- = his children - if only we adopt full faith in this supposed\- father and son and children relationship. Child murders and\- = sacrifices are generally abhorred only in other relationships. No = \-matter how often such irresponsible assertions are repeated, \- they still remain untrue. But they can lead to irresponsible = \-accusation of and persecutions of inherently innocent people, doing = their things to, for and with each other, voluntarily, but\- classed by = dogmatic Christians, who do not l ove their neighbours, \-as incurable sinners that ought to be punished = or at least \-slandered, if not exterminated. This false dogma has = turned many\- people into enemies of monetary freedom. While otherwise = they may\- think and act as defenders of freedom, right and justice, here \-they = are in reality upholding one or the other version of\- monetary = despotism. Repent, if you can, before it is too late.\- The future holds only "eternal damnation" for such doctrines. "Adore = what you have condemned, condemn what you have adored", at \-least in = this respect. I sincerely doubt that many will do so but\- am convinced, nevertheless, that they ought to. - J. Z., 3/97. \par DEPOSIT CREATION: When deposits, like cash, have also a separate\- = value standard and are valued against it, daily and publicly and\- can = thus suffer a discount against that standard, then any \- imagined and large scale "over-issue" or "creation" of deposits or\- = credits or non-cash money, becomes as impossible as it is for\- free = market rated and competitive cash issues. -\tab What actually \- happens in deposit banking is a more or less efficient use of the\- term = deposits of others to grant corresponding term loans to\- people, in = anticipation of their future ability to repay them.\- Banks would love to be able to "create" bank deposits out of\- "thin = air". Then they would no longer have to advertise for \-depositors and = to pay them interest. Fixed and strange ideas like \-that are earnestly = advanced like the most advanced wisdom and \- even a few free market libertarians have fallen for them. The\- = "creationists" in that sphere manage to overlook the credit\- = transaction that is involved and the security given or provided\- by the debtor for the loan received. They also ignore the origin\- of = the funds for the loan. Perhaps a deposit game should be \-developed = that would help to drive out this silly notion when\- played among the converted. One of the fallacies involved is that \-the = loan recipients would have nothing better to do with their \-loans than = to put them into a savings bank, as if their intention \- had not been to spend the borrowed money productively. Especially\- = since electronic funds transfer has become possible, all these\- debts = and credits should balance almost instantaneously. - Let's \- over-simplify, in a thought experiment: If any Bank could \-suddenly = increase, tenfold, the nominal value of all its depositor's deposits, by = unilateral and administrative action, \-then that part of the total = purchasing power of its customers \- would be increased tenfold (unless that supposed additional \- value or = purchasing power were confiscated or embezzled by the\- bank). With = anyone but the bank and, by contract, its debtors,\- not being under = obligation to accept this multiplied deposit=20 \-"currency" like cash, at its face value, and, seeing that the \-total = of goods and services has not been increased by this paper-value = multiplication, the inevitable result would be that these \- paper tokens or accounts could buy less and often nothing. Their\- = depreciation would be rapidly noted by the mass media and would \-lead = to massive refusals to accept them at all. Lastly, a "panic"\- would might occur or might be imagined as happening, among those = \-debtors of the issuers or "creators" of paper credits, who have = \-still plenty of these paper "values" on hand, after having paid\- a ll their debts to these issuers or "creators" and among the\- consumers, = who find the shop shelves empty and their own hands or\- wallets still = full of deposit certificates with which they cannot\- buy anything. In reality, the discount of such paper accounts or = \-certificates would occur very early, some would always know or\- find = out what is going on, and their discounting and refusals\- would tend to = be well and widely reported would lead to\- wide-spread and larger discounts and refusals and these would \-make = further issues soon impossible and also make it impossible \-for that = issuer or "deposit creator" ever to engage in such \-actions again. - = However, you do consider only the command\- economy and exploitation of an exclusive and forced currency with = \-legal tender (forced acceptance and forced value) and, under \-these = conditions, not only all cash but also all credit and\- deposit and clearing arrangements are severely interfered with.\- They = are only allowed to ride on the inflation paper tiger and\- participate = in its crashes into reality, even when such a crash \- may be considerably delayed because such a system makes people\- very = ignorant and prejudiced on money and supports beliefs like\- those which = assert that mere confidence and trust, government\- controls,=20 coercion, guarantees and "insurance" arrangements can\- maintain a = currency and the security and value of on demand\- deposits fully and = indefinitely. - J. Z., 3/97. \par DEPOSIT GUARANTEES & INSURANCE: I would protest government\- = guaranties and insurance offers and organizations that pretend to = \-cover the risk of bad loans being made. They do only encourage a \- growth of bad loans, that in the short term offer high interest \-and in = the long run and average rather lead to capital losses.\- The careful = lenders should not be made to pay for the careless \-lenders, either. = Nor should their depositors be so victimized - or the taxpayers. - One = should not \-forget, either, that many people, including investors, are = born gamblers and speculators. They are sometimes prepared to take \- large risks in the hope for great returns. And, as gamblers, they = \-must also expect losses. Thus people who want to gamble and\- = speculate with their funds or want others to do this for them, \- ought to put up with the inevitable losses, too. Such activities\- = should not be prohibited for them or rendered impossible. - J. Z., 3/97. \par DEPOSIT INFLATION: The assumed automatic growth and = \-multiplication of deposits assumes that to deposit owners the = \-deposits are purposes in themselves, which they never utilise and\- = thus rapidly reduce by withdrawals. (As if they lo ved paying interest on loans which they would refuse to use in order to = make a profit from them, even after interest and taxes and other costs = are deducted from their returns.) Alas, our expenditures tend to equal\- and often even exceed our incomes, if we do not severely check\- our = spending habits. And borrowers do not borrow as a rule to\- establish = savings deposits but to pay their current and up-coming \- bills - by becoming more productive. - In the all-over picture all debts = are equal to all\- credits. They do balance each other. Neither debts = nor credits\- can be unilaterally decreased or increased except for force or fraud, = which correspondingly reduces the credits of the victims. - No one can = rightly and unilaterally multiply his assets. That is\- wishful=20 thinking or part of the "thinking" of conspiracy-theory \-believers. - = If you combined all the balances of all the deposits\- and credits and = debts and did so correctly, for any given moment\- in time, you would arrive at a complete balance. But, as I stated\- = above, only current debts and credits ought to be so balanced and \-the = same should be done for tomorrow, the day after and any day \- in the future, to arrive at the correct balance. All future due\- debts = should not be confronted only with the ready cash and\- the = on-demand-deposits available to the debtors right now but\- only with their corresponding medium and long term securities. - In = your proposals you want to see to it that short-term deposits\- are not = long term invested, to take care of the time factor and\- reduce the risk. Apply that kind of precaution to your general \-notion = of the supposedly "exploding" or arbitarily multiplied\- deposits, too. = A merchant with a current balance of only $\-20,000, might, indeed, be = given a book credit of 200,000, over,\- let us say, two years. But that credit would have to come, to be\- = realized, from other accounts. He would have to EARN the repayments, = gradually, over a period. And to be fully useful it would\- have to be fully used-up by the borrower, too. and his total = \-repayments would come from his current account, in instalments,\- = although this current account, from then on, in the average, \- might never exceed $ 20,000 at all or by much, immediately after\- the = deposit-loan of $ 200,000 is more or less productively and profitably = spent by him. No "deposit creation" is involved but\- merely a temporary current account credit, granted from other = \-deposited funds. Indeed, these should be correspondingly termed\- = deposits. When short-term funds are used for short-term credits, \- then, as a rule, short-term or immediate clearing or non-cash\- = transactions are involved. In a more primitive and obvious way, \-the = merchants wanting short term credits could grant it to each\- other via = a common pot, with the transactions going in and=20 out of \-the pot being fully recorded, with the records available to all = \-the members. Such a pot need not be full of rare metal coins.\- = Instead, paper IOU slips could be used by all the members and\- cleared against each other. They would all be covered by the\- known or = checkable delivery or short-term production capacity of \-the members = with their goods and services. - J. Z., 3/97. \par DEPOSIT INFLATION? Unless banks are VERY inefficient, in spite of\- = electronic communication channels, the reduction of one deposit = \-account and the corresponding increase of another, via a = bank\--transfer, will be almost instanta neously, preserving the total\- balance between credits and debts. And = the trail of such payments\- can at any time be checked via computers. = Bank secrecy has often\- been broken by computer fans. None of them has = as yet reported\- having found any evidence for the assumed "creation of credit or\- = deposits or money". Nor has any honest accountant. - J. Z., 3/97. \par DEPOSITS, FICTITIOUS ONES, UNILATERALLY & ARBITRARILY CREATED?\- = Claims against deposits (via cheques ) or note issues without = \-sufficient, immediate and short term reflux arrangements, e.g.\- , shop foundation for their redemption and short term repayment\- = obligations for loans granted with deposits or notes, i.e. \-without = debt- foundation, or readiness to accept or readiness to \- accept them in clearing, would suffer the same depreciation and = encounter the same refusal and suits for fraud which any ticket \-vendor = would encounter who cannot offer seats or enough seats in\- exchange for them. An angry crowd might even beat them up or burn \-their = premises or vehicles. And they would lose their chance to\- become = issuers again. - Over-issues and deposit or credit-\-inflation are not = as easy and without consequences as especially \- believers in "Social Credit" assume them to be. I believe such\- = "creations" to be almost entirely imaginary, the result of a\- = miscalculations or false book keeping or wrong observations or \- interpretations of observations. - Naturally, under conditions of = \-monetary ignorance or prejudice, where culprits like the central\- = bank and its inflationary policy, get away unblamed and can\- manage to blame instead, even in the mass media and supposedly \-more = expert channels, e.g., the trade unions, employers, traders and = general\- greed or speculation and, naturally, private banks, for their = supposed credit \- "creation" and where they find the "sanction of the victims" for \-such = self-serving propaganda assertions, then real culprits can\- get away = with fraud, deception, embezzlement and corruption for a\-long time and = still do so, remaining unpunished and \- not under obligation to indemnify their victims. Often the \-taxpayers = are forced to make good such losses. Even people who \-have pondered = such questions for decades, do rather blame \-innocent private = enterprises for crimes they did not and cannot \- commit, than hold the government and its monetary despotism\- = responsible. - J. Z., 3/97. \par DEPRECIATION OF THE GOVERNMENT CURRENCY THROUGH PRIVATE NOTE = \-ISSUES AND CLEARING? People who mutually offset their debts did\- not, = do not and cannot depreciate the official currency but\- simply ignore = it by this action and leave it to i ts own merits or \-demerits. They are not under any moral obligation to = use the \-government's currency. The government has no right to demand = such\- a use. Moreover, they have all too much experience with\- government caused inflations. Thus they will tend to avoid the\- = current and government-caused depreciation of the government's \-current = paper money by contracting alternative value standards,\- e.g. gold or silver weight units instead, whether such reckoning is = government policy or permitted or not. - Assume that almost\- all people = in a country thus refuse to use government currency\- and made their own payment, valuation and settlement arrangements = \-instead. Assume also that they would refuse to pay taxes and \-rather = pay themselves the policemen, judges and soldiers\- mobilised against = them, as unwilling tax victims. Then and thus=20 \-and otherwise they could turn these executioners from\- enemies into = neutrals or even allies. Then government paper money \-issues would = become almost valueless. Could the refusers be \-blamed for having = CAUSED this depreciation or would they merely\- have REVEALED the INHERENT valuelessness of the government's\- = currency, by refusing to grant it their own support, at the own\- = expense? - J. Z., 3/97. \par DISCOUNTS OF PRIVATE OR COOPERATIVE EXCHANGE MEDIA: While a\- first = discount for a competitively issued private exchange medium\- or current account (possibly and, most likely, happening only in = wholesale trading) is still rather small, let us say, 1%, the \-few, who = would still owe something to the issuer and would get\- access to a = corresponding qua ntity of the slightly discounted \-private notes or bank accounts, would = gladly buy them up in order \-to instantly pay their debt to the issuer = with them. They could \-thus, at a discount of 1%, make saving of 1% of = the remaining\- debt, thus repaid, on that day. Reckoned annually, their saving \-would = be at the rate of 365% of the debt amount! Debtors would\- often jump to = so reduce their debts. \-Whatever reflux option would still remain open = would thus be\- quickly exhausted. If the discount was unjustified then it would\- = quickly disappear, with the discounted notes and accounts being \-used = as means of payment against the issuer and account holder.\- The larger the discount, the more widespread would be the refusal\-s = and the faster the still accepted notes would be returned to the = \-issuer in payment at par, because he would be the only one \- towards whom they would, juridically, have "legal tender". - J. Z., = 3/97. \par DIVERSITY, VARIETY & UNIFORMITY OF MONEY: The concurrent\- = circulation of several currencies might at times be slightly = \-inconvenient, but a careful analysis of its effects indicates \-that = the advantages appear to be so very much greater than the\- inconveniences that they hardly count in comparison, though = \-unfamiliarity with the new situation makes them appear much\- bigger = than they probably would be. - Hayek, Denationalisation of\- Money, 84. = - Under full freedom to refuse acceptance and free \- market rating and through the existence of alternative \-currencies, = no more currencies will be locally issued and\- accepted by most = potential acceptors than they will find\- convenient and profitable to = issue and accept. The process is \- continuously self-regulating. Suits that don't suit and shoes \-that = don't fit won't flood the market, either and thus will not\- be an = inconvenience to most people. - J. Z., 21.3.97. \par DOUBLE CURRENCY, BOTH LEGAL TENDER: In one of the mini States,\- = Andorra? the Spanish Peseta and the French Franc circulate, under\- = legal tender, side by side. I do not know whether this is under a \- fixed or controlled exchange rate against each other or under a\- freely = fluctuating one. In my hometown, West Berlin, for a few \-years, there = where also two currencies used, the Eastern Mark \- (Ostmark) and the Western Mark (Westmark). Their exchange rate = \-fluctuated daily. The daily rate was determined and published by\- one = authority. Many exchange offices exchanged them for each\- other and prices were often marked in both currencies. The exchange = rate fluctuated around 1 Western Mark for 5 Eastern \-Marks. Many West = Berliners worked in East Berlin and were paid in\- Eastern Marks. Some were partly paid in Eastern Mark and partly in = \-Western Mark. Both currencies were legal tender and on both sides\- = competing currency issues were severely outlawed and all too\- effectively suppressed. - J. Z., 19.3.97. Compare: BIMETALLISM. \par DUEHRING, EUGEN: His teachings are a mixed bag, quite apart from\- = his irrational antisemitism. In some passages, for instance, he \-is in = favour of panarchism and in others against. In some he is\- for moneta ry freedom and in others against. Sometimes he favours \-Free Trade and = sometimes Protectionism. Sometimes he favoured \-trade unions and = sometimes he opposed them. Sometimes he wrote\- like a statist and = sometimes he opposed statism. Ayn Rand would\- have charged him with inability to make up his mind. -\- Nevertheless, = his writings are often thoughtful and \-thought provoking. One can = somewhat benefit from them by reading \-them very critically. He was = vehemently attacked by Marx and\- Engels. Some would consider that to be a recommendation. - J. Z., 3/97. \par EMERGENCY MONEY ISSUES DURING INFLATIONS: During the Great\- German = inflation almost every printer and numerous firms were\- also busy = issuing their own emergency currency, always counting,\- until close to = the end, in the continuously depreciated legal\- tender paper standard. The private emergency issues were\- permitted or = tolerated by the authorities because of the\- accelerating shortage of = legal tender cash, even while the note\- printing presses of the governmental ran hot, 24 hours a day. The = prices \-and sometimes wages, anticipating further inflation, rose = faster \-still than the note production. In the end, the = note-printing\- costs came to 48% of the face value of the notes. Then a monetary = \-revolution occurred and the government was wise enough to put\- itself = at its head. All accounts reckoned in and transferred in \- that very rapidly depreciating paper standard did, naturally participate = in that depreciation. They should not be blamed for\- it, but, instead, = the government's central banking system, with\- its inbuilt and intended = (for war and deficit financing) \- inflation system. - J. Z., 3/97. \par ENCYCLOPAEDIA ON MONETARY FREEDOM AND MONETARY DESPOTISM: By now = \-all the nonsense said and written about money, currency, credit,\- = value standards, investments, savings, interest, note-issuing \- banks, etc., could and should be written down, alphabetized,\- computer = sorted, and confronted with the correct observations, \-theories and = laws of money etc. that were so far found. Having a\- few pearls of wisdom buried in all too much muck is not a good \- = enough help for most information seekers. - J. Z., 16.3.97. \par EUROPEAN CURRENCY: Free Trade in Europe does not require a = \-unified currency. Instead of reducing all European currencies to \-one = we should allow free enterprise and a free market for all\- kinds of exchange media, value standards and clearing facilities \-in = Europe, i.e. we should multiply rather than reduce monetary\- options, = as many as a fully free market would be ready to accept\- and maintain. = - J. Z., 30.7.96, 18.3.97. \par EUROPEAN CURRENCY: Monetary despotism does not become improved \-by = practising its monopoly and coercion on a larger scale. Since \-already = the centralised, monopolized and forced national \-currencies lead to = inflations, deflations, stagflations,\- bankruptcies and mass unemployment and prolonged or perpetuated \-them = and remained unable to effectively substitute for local\- private and = cooperative competing currencies, how could we look\- forward to a centralised European currency? Let those, who want it, = \-use e.g. full weight rare metal coins, in internationally \-acceptable = weight denominations, and credit cards and electronic\- accounts in such = weigh t units or any other value standard that \-pleases them. Free choice and = free enterprise for all exchange \-media and value standards. Any = enforced unification is wrong and \- less efficient than self-help could be, in every sphere. It is = especially absurd to try to introduce the communist centralistic \-and = monopolistic kind of monetary despotism in Western\- Europe, on an even = larger scale, after the fall of or loss of\- faith in State socialism in Eastern Europe. The uniform \-imposition of = a criminal institution is no solution. - J. Z.,\- 16.3.97. \par EXCHANGE MEDIA AND CLEARING: Transferable certificates = (etc.)\-often merely FACILITATE free clearing but they do not change its = \-essential nature nor are they required for it. Even when gold\- coins are used in transactions, then, as exchange media, they do\- = actually merely function (apart from their use for \-jewelry and various = industrial purposes, or storage-medium to preserve capital) as clearing = tokens or signals, when, where and while=20 \-people know of no better and cheaper ones. - J. Z., 3/97. \par EXPERTS QUOTED IN FAVOUR OF THE MONETARY CREATION HYPOTHESIS: = \-Many of the official and private supposed experts are merely, as\- = someone said, the high priests of this popular religion or faith\- on = money. And this faith is as diversified an d as false as the \-churches and sects and their belief and dogma = systems are. Thus we do need, in the monetary and financial field, too, = the\- equivalent to religious freedom and tolerance, in form of monetary and = financial freedom, not a merely a new and supposedly \-reformed Catholic = or other hierarchical, exclusive, despotic and\- centralised system - upon the neck of every dissenter. Monetary\- = freedom means monetary panarchism. - J. Z., 3/97. \par EXTERRITORIAL AUTONOMY AND EQUAL RIGHTS FOR ALL VOLUNTEERS IN THE = \-MONETARY & FINANCIAL FREEDOM SPHERE, TOO: This is just one of \-the = practical applications of the general framework of panarchism\- : to each the government or free society and thus also monetary\- and = financial (saving, investment, securities trading etc.) and\- the taxing = or contribution system of his or her choice. Single \- taxes only for single taxers. Before we get there we might have\- to = engage in a monetary and financial revolution and to achieve \-that, we = might have to engage in a genuinely cultural or \-educational revolution = first=20 of all, making optimal use of all easily affordable alternative = expression and information media,\- like microfiche, floppy disks, text = only CD-ROMs, audio and video\-tapes and disks, e-mail, the Internet, = free broadcasting, etc.,\- all at their optimal strengths. - J. Z., 3/97. \par FIAT MONEY: Fiat money - money with no backing, whose acceptance\- = (and fictitious value! J. Z.) is mandated by the State..." - \-David F. = Nolan, LP News, March 95. - Most overlook that fiat \- money can have tax foundation, even a sound tax foundation, if \-one = presumes that any compulsory taxation can be sound. Voluntary = \-contribution or subscription based money is also possible, for \- voluntary societies. Is an IOU, readily accepted, representing a private = and mere fiat currency or is it an obligation binding\- only upon the = issuer and accepted only because of that? Those who\- cannot imag ine any other but a rare metal backing as possible or \-honest or = trustworthy enough, do either lack imagination or \-historical knowledge = or theoretical understanding of the\- alternatives to government fiat = and even the great varieties that\- occurred among currencies issued by governments. To equate legal\- = tender and monopolized paper-money of the State with private and = \-optional paper monies, that are kept at par, under free market rating, = with \- their nominal values, and call both mere "fiat money", indicates \-lack = of knowledge of what one is talking about. Without legal \-tender a = unilateral fiat attempt or offer by any issuer does not \- have to be accepted by any potential acceptor. It takes two to \-dance = tango. Any contract requires at least two participants \-agreeing with = each other. It takes an issuer and an acceptor. \- Neither can command the other unilaterally and without consent. Neither = can "create" a fictitious value and force the other to \-accept it. The = term, as usually used, is not enlightening but,\- rather, misleading. - = J. Z., 3/97. \par FIAT MONEY: It is "money" unilaterally and either legally or\- = juridically declared to be money, regardless of its substance or = \-foundation, backing, cover or reflux arrangement and the \-soundness = or unsoundness of its value standard, by an order, \- command or legal authorisation. Only governments have the power and a = \-strong motivation to do so. The victims, all debts, including all\- employees and pensioners, are not asked for their agreement or consent = about this, not even in the supposedly self-governing\- democracies and = republics or constitutional monarchies. The form \-which this fiat = usually takes is legal tender legislation,=20 \-accompanied by privileges granted to a government-favored \-bank, = which in turn is forced to support the government, or even \-to an = exclusive issuer, a central bank, all to rarely questioned\- since it = was=20 proposed in the communist manifesto of 1848. Most \-critics of it = consider only the fact that most fiat monies are\- not convertible into = rare metals and forget about the other part \-of the definition: "Money = (such as an inconvertible paper \- currency) which is made legal tender by a fiat of the government." - = Shorter Oxford English Dictionary. There would not \-be much point for a = government in making its paper money legal \-tender if it is still fully = convertible into gold. But it has a\- vested interest in having its money, compulsorily accepted and this at = its face value,\- in the absence of any sound foundation for it. = Otherwise it could be \-freely discounted or refused. The decisive \- point about the fiat money is its legal tender. Anything without \-legal = tender is simply not a fiat money but can exist only on its\- own merits, with or without any gold backing or gold accounting. - The = fiat makes it a unilateral not a contractual act. In Don\- Werkheiser's = terms, it is a "single convenience" rather than a "\-mu tual convenience" relationship that is thereby established. If a\- = genuine gold coin or gold certificate currency with 100 = %\-convertibility at any time and 100% cover were made legal tender = \-then this might clarify some juridical fine point but it would \- hardly be necessary. But when a currency is not made out of rare = metals or redeemable in them and not even covered by them, then, like = any other goods or service in the market, it does not have a \- fiat value but only a market value, depending upon its voluntary = \-acceptance. Precisely here the intention and practice of fiat \-money = sets in. Not by the abolition of cover and redemption but \- by turning it into a forced value or forced currency with a \-fictitious = value that is, usually, far above its market value and \-which also = permits the government to go on taxing its subjects \- more and more via the inflation tax - which also boost returns \-from = other taxes, at least until the inflation becomes\- galloping. A gold or = gold certificate currency, when not legally\- declared to be an = exclusive currency, is rightful and harmless\- , even somewhat beneficial, for those who can afford it. Those who = \-can't afford it are not helped by it. But they can still use it\- at = least as an accounting or clearing unit for their own gold-less \- transactions, without possessing a single gold coin, far less a\- gold = reserve. It is also harmless to declare a gold currency to \-be legal = tender, as long as it is not declared to be an }{\b\f0\fs24 = exclusive}{\f0\fs24 \- legal tender, i.e., as long as people remain free to pay and\- account = while using other standard of value units. Forcing those who believe = that they have some \-reasons or sufficient motives for hating gold, to = use gold\- nevertheless, might be considered as an infringement of their = \-religious liberty. Perhaps the error on fiat money arose because\- the repeal of convertibility and the introduction of legal tender were = often coming close together, or were even introduced at the same \-time. = Those imagining only rare metal money as real and desirable \-money and = n ever having thought about alternative monies, \-privately issued and = without legal tender but market rated \-instead, tended then to condemn = all paper monies and inferior \-metal coins as mere fiat money or = fictitious money, regardless of \- whether they were legal tender or not. Even now very few \-textbooks on = economics get the relationship between legal tender\- and Inflation and = Gresham's Law right. A currency that is neither \- made out of rare metals or convertible into them and that does \-not = have to be accepted and if accepted has not to be accepted at \-its face = value but may be freely refused or discounted or market-\- rated by all potential acceptors - the issuer excepted (for he \-must = accept his IOUs at their face values, in accordance with \-basic = principles of justice) - is thus not part of a despotic or\- command = economy with unilateral fiats but part of a market \- economy. People may doubt whether in a market economy anything not = \-made of rare metals or redeemable in them could successfully\- exist = and compete against conventional gold standard currencies.\- But they cannot rightly say that that if they existed then they \-would = exist merely by a fiat, a unilateral say-so. Here,\- too, it takes two = to dance tango. The alternative market money,\- without legal ten der power, may have some other foundation than \-rare metal and = redemption in it at any time by the issuer, \-whether the gold bugs = understand that foundation or not. As long\- as it cannot be = unilaterally, juridically and legally forced upon \- them or other dissenters, they cannot correctly call it a "fiat = \-currency" although they like to slander it as such - because of\- = their lack of understanding. Market money can be issued, offered and = accepted \- as real value tokens or certificates only when and if the issuer obliges = himself or\- herself to deliver for it, upon demand, not rare metal = (That\- particular promise might and usually should be explicitly = excluded!), but something which most\- participants in a free market need, want and are willing to pay \-for, = namely and especially, consumer goods and services that are in daily\- = demand. E.g. the money issued by a shopping centre or department \- store, a bus company, power plant, a net of petrol stations, etc.\- Such = ticket or token money is obviously not unilateral fiat - at\- least not = towards others. It only unilaterally obliges the issuer \- to accept it at any time at its face value. The issuer obliges \-himself = thereby. He does not oblige any potential acceptor to accept it - = \-except by individual contracts. He might e .g., insist that his debtors accept his tokens at par as long as they = owe him money \-and their debts are due or close to due, so that they = can simply\- pay off their debt at par with his tokens. But a unilateral = and\- coercive action towards others, infringing their rights, is not = \-involved. It is not "fiat" money but, rather, a responsibly issued = real money, representing real and wanted values. Any form of IOU, to = have a value, without\- being a coercive requisitioning certificate by a government (one with = \-legal tender powers and an exclusive position), requires voluntary = acceptance and market\-rating and obliges only the issuer. Thus it is = NOT fiat money. It\- obliges only the issuer to deliver his goods, services and labour\- for = it, upon presentation, up to the amounts involved. To call\-s such money = "fiat money" is an abuse of the term. But to\- government paper money, = given legal tender powers in general\- c irculation and also the status of an exclusive currency, it can \-be = rightly applied, especially, when it is neither made out of\- gold nor = convertible in it. But that is the whole point for the \- government in giving it legal tender and the money monopoly. = \-Nevertheless, we should also consider that even the worst kind of\- = government fiat paper money has still got a limited foundation, \- namely tax foundation. You can get rid of it by paying your tax\- burden = with it. To that extent it is then still having a \-foundation, a = clearing foundation. In the best case, the taxes\- would be determined = in weight units of rar e metals, used merely as value standards and accounting units and the = tax\--foundation paper money would be accepted by the government at its = \-face value in rare metal weight units, regardless of how low\- these units this paper money would have sunk against their rare metals = in trades in general\- circulation and on the rare metal markets. Such = degree of honesty, within a system of imposed \-tributes, could = establish a self-limiting tax foundation paper=20 \-money issue, reckoning in rare metal weight units. To function \-well = enough, its legal tender must then be confined to the tax offices. It = must not be given any in general circulation. If it has \- legal tender and tax foundation, then it is fiat money towards \-those = who do not have tax debts to pay taxes to the government. These can = \-then only make indirectly some use of the tax foundation by using\- such paper money to pay those who do "owe" the government the\- tribute = it extracts from them. One should also concede to this \-kind of = "system" that the government, by its education, \-propaganda and = slogans, has established at least a pretence of \- representation, self-government, voting and consent to taxation \-as = well as to the inflation, deflation or stagflation "targets" a = government\- engages in or has even openly p roclaimed. Only towards others than the tax payers does the legal tender = paper money become, quite obviously, a fiat money. Their only escape is = \- then to use such paper money to pay some tax payers with it, for what = they have to offer, and thus to get rid \- of it and get something of value in return. - There are two aspects to = "fiat money": The one is its "compulsory acceptance" The other is the = "compulsory value" or\- fictitious value given to it. In combination = they form a "forced" or "legal tender" curren cy for "fiat money". If people remained free to discount \-it to zero, = or to refuse it outright, then it would obviously not be effective legal = tender money or fiat money. Imposing a\- fictitious value standard and = forcing people to accept it at face \- value, or "at par" with its nominal value, on the "principle" that "Mark = equals Mark" and "Dollar equals Dollar", no matter how different the = values of Marks and Dollars \-of different issue and indebtedness dates = really are and were, \- turns a money quite unilaterally into fiat money and causes all the = \-wrongs and harms of inflations, deflations and stagflations and their = serious consequences. These are some of the facts and\- truths on the matter which are usually ignored by gold bugs in\- their = oversimplifications and generalisations and oversights. \-They are = partisans of a particular monetary scheme and one has to \- listen to all their opponents, too. Otherwise, we would allow \-them to = throw out the child with the bath water. - J. Z., 3/97, 29.8.02. \par FORCED CURRENCY: Any currency valid only by legally excluding\- = others and by giving it a forced value does hardly deserve the \-name of = currency or money. However, for decades we have been\- forced to experience almost nothing else and the literature is = \-largely only full of theories of advocates of forced and\- exclusive = currencies, unaware of the wrong and harm they do and\- of the rights = and benefits of competing currencies. Thus many \- people have even come to condemn money altogether. That is like = \-condemning all societies because of the existing of some despotic\- = groups and of a multitude of inherently despotic territorial \- States. - J. Z., 12.7.96, 20.3.97. See: LEGAL TENDER, CENTRAL \-BANKING, = MONEY.=20 \par FREE BANKING & MONETARY COMPETITION OR COMPETITIVE MONIES: One = \-can either competitively fight for more or less scarce monopoly = \-means of exchange (scarce, for some, as some times and occasions, even = during inflations and\- stagflations) or issue one's own sound and competitive means of\- = exchange, based on the own goods and service supply ability or clearing = \-capacity, thus appearing, first of all, as a most welcome buyer \- with them and then merely having to redeem one's own standardised = \-IOU's with one's own goods and services or clearing capacity. -\- J. = Z., 13.3.97, 20.3.97. \par FREE BANKING: Freedom to sell one's OWN goods, products, labour\- = and services for the self-issued and self-managed means of \-exchange, = and to freely clear their values, exchange media and\- securities = against those of others, using self-chosen standards \- of value - as opposed to the compulsion to use only a monopolised\- = medium of exchange, imposed by a territorial government, together \-with = its exclusive and forced paper value standard. It means also \- freedom from the juridical obligation to redeem all one's own\- payment = promises upon demand by a creditor not by clearing or \-monetized = assignments to one's own goods or services but, \-instead, by delivering = cash, either in form of gold or silver\- coins or in from of a possibly as scarce exclusive and forced \-legal = tender currency. \par FREE EXCHANGE AND MONETARY DESPOTISM: Our very survival depends = \-upon division of labour and free exchange of our goods and \-services. = So how can we favour or consent to any restriction upon\- exchange = media, value standards and clearing options, in a=20 \-manifold monetary despotism, rather than insist upon full\- monetary = and clearing freedom? The very term "value standard"\- suggests already that it should be more reliable than is the frequently = mismanaged and often very much depreciated and further deteriorating = paper\- standard provided by the government. The very term "exchange \- medium" indicates how dependent we are on this medium of an\- advanced = civilisation and economy and that we should never \-tolerate its = monopolisation and manipulation. The very term "monetary policy" should = get our hackles up - after all the\- experiences we have had with it. Nevertheless, we remain calm or\- = apathetic, when our "leaders" proclaim inflation and unemployment\- = "targets"! - J. Z., 19.3.97. \par FREE MARKET & MONETARY FREEDOM: A free market needs freedom in\- = the supply of money. - Henry Meulen, THE INDIVIDUALIST, 4/75. \par FREE MARKET RATING FOR COMPETING CURRENCIES & ACCOUNTS & THE\- = EFFECTS OF LEGAL TENDER ESPECIALLY UPON INFLATION & STAGFLATION: \-The = monopolies or oligopolies for the issue of banknotes or for running = cheque accounts and\- clearing centres, are not discussed sufficiently in most writings\- on = economics. Instead, legal tender is uncritically accepted as a \- supposed ideal or as a necessity and the fact that they are the = necessary and sufficient ingredients to make inflations, deflations and = stagflations possible, is usually ignored. Thus most "thinkers" and = "expe rts" on this subject remain unaware that free-market rating for = currencies, voluntary acceptance or refusals, the self-interest of = competing issuers and their internal clearing would rapidly stop or = altogether prevent any over-issues. Is there one book in a thousand on economics, that clearly indicates the relationship = between inflation, deflation, stagflation and the issue monopoly and = legal tender? -=20 \par FREE MARKET RATING OF CURRENCIES & THE QUANTITY THEORY: Unless = \-the government money is freely priced, the government will never = \-know whether it is putting into circulation too much of its money\- or = not en ough. - J. Z., 24.2.75. - The same applies to any private\- currency = issues. Free market rating does also require sufficient \-publicity for = it - in order to be effective. - J. Z., 21.3.97. \par FREEDOM OF NOTE ISSUE: We must return to a floating gold price\- = and to freedom of note issue. How and when we do this is a matter\- for = the politicians; but the sooner it is done, the better. - Henry Meulen, = THE INDIV IDUALIST, Feb. 76, p. 5. - We are not \-bound to accept Meulen's hobby = horse of a supposedly more stable value standard, consisting of a = fluctuating gold weight value of\- a thus supposedly more stable paper = pound. But people should be \- free to adopt his preferred "standard" for themselves. As for = \-expecting politicians to take up this matter and realize freedom of = note issue soon: We might have a very long wait ahead. The \- matter has been left in the hands of politicians almost since the\- = beginnings of monetary economics. It should finally be taken out \-of = their hands. Enough is enough. - J. Z., 21.3.97. \par FREEDOM TO EXCHANGE : Kids have the right to swap their = \-possession, and to do some extra household chores to earn some\- = extra pocket money. Adults also and obviously have the right to\- swap = surplus goods and services and labour in family, friendship=20 \-and neighbourhood circles. All members of all free communities \-have = the right to swap whatever labour, goods or services they\- can offer = for whatever labour goods or services they wish to obtain, directly or = via some agreed-upon money toke n or clearing process. They do have the right to pay off their debts in = whichever way they \-please and with whichever means of exchange and = value standard \-that suits them AND their creditors, or to simply \- settle them by clearing or to have them cleared via special clearing = \-agencies set up by them or used by them. No one has a right to = \-interfere with any of their peaceful and creative transactions\- and with the ways, means and methods they do want to use. Especially no = government has the right to administratively, \-juridically, legally or = constitutionally interfere with any \-voluntaristic, tolerant, honest = and well publicised monetary, \- clearing and financial exchanges, exchange and clearing\- arrangements = and institutions, and any experiments of this kind, \-designed by their = participants to abolish unemployment, \-underemployment, inflation and = stagflation, sales difficulties\- and bankruptcies between them. The only condition is that all\- these = exchanges and experiments are only undertaken at the risk \-and expense = of their voluntary members, customers and investors. Governments are = obviously unable to prevent or end economic \- crises but rather cause them, again and again and worsen them = \-further, by their interventionist, command, regulation, licensing\- = and monopolistic or other despotic monetary and financial policies. - J. = Z., 30.10.93, 30.10.95, 18.3.97, 28.8.02. \par FREMERY, ROBERT DE, "Money and Freedom" and "Rights vs. = Privilege":\- These 2 titles are the best and the most misleading among = his \-monetary writings. For he does not write about full monetary \- freedom. Instead, he offers his version of a supposedly ideal, = \-exclusive and forced currency, based upon population figures \-rather = than products and services offered. He does, instead, \- share many of the prejudices of Social Credit advocates and of Single = Taxers. A few freedom insights are almost buried among \-them. But he is = right in the common sense rule that short-term\- funds should not be = invested on medium and long terms. He does=20 \-not realize the wrongs and harms of the State's money monopoly and\- = legal tender power and advocates as a reform a population-\-determined = circulation, monopolistic and forced currency, issued \-by the=20 government. That might turn out even worse than the\- present central = banking system. He opposes inflation but proposes \-what makes inflation = possible and likely: a forced and exclusive\- currency. "Oh liberty! What crimes are committed in your name!" He = wants to outlaw all credit currencies and seems \-nowhere to have = comprehended the banking principle or real bills \-doctrine. He = considers even a freely contracted fractional \- reserve currency as fraudulent, even when safeguard clauses are \-added, = like option clauses etc. His constitutional stabilization \-and = circulation rule is not likely to work any better than the \- others that were proposed. But those satisfied with Fremeries \-should = be free to try them - among themselves. - By all means, \-add your own = abstract or review! No one can read, abstract and \-review all the = literature. - J. Z., 16.3.97. \par FULCRAUD-MAZEL, M., Labour Exchange Bank, 1818. In Paris, in = 1829\-a bank was established on his principles. - Hint by A. Menger.\- = More information on this would be welcomed by me. - J. Z., 19.3.97. \par FULL EMPLOYMENT: Full employment for all able and willing to\- work = at market rates and payment for work done in competitive and\- optional = currencies, that are privately or cooperatively issued\- but presently outlawed, unknown or wrongly maligned or suspected.\- = That would be a free economy or free market measure, one of = free\-enterprise, free exchange, free contracts and free trade, one of = \-self-help, more=20 useful than all the Welfare State measures\- combined. Finally an end to = monetary despotism, to the \-totalitarian communistic or state = socialistic and centralistic \-money system, with its coercion, = monopoly, fraud and wrongful \- taxation powers, without any representation by the victims of it.\- Nor = have the masses of unemployed, now ca. 800,000 in Australia\- and about = a billion in the world, been given a vote for or against \- monetary despotism and for or against monetary freedom, at least \-as = far as their own voluntary associations are concerned, their\- own = potential payment communities. Enterpreneurs do not really\- deserve this name or the name of employers until they prove that \-they = can turn the huge stock of ready for sale consumer goods and\- services = and=20 of under-employed or unemployed labour into at least locally useful cash = to pay newly employed labourers with and to \-become thus employers of = all able and willing to work for\- competitive monies. Their addiction in their thinking to forced = currencies, only, and\- its practices, does probably do much more wrong = and harm than do the combined addictions to alcohol, tobacco and other = drugs. - Without monetary freedom the required=20 \-monetary, credit and clearing self-help steps cannot be taken.\- = Monetary despotism is the problem, not the solution. - The\- despotic = monetary clauses in the constitutions, laws, \-regulations, juridical = decisions and despotic powers in the \- government's monetary and financial institutions have to be\- either = repealed, ignored or overthrown in a monetary revolution, one \-that is = rightful, non-violent, economic, non-destructive of\- property rights and very rapid in abolishing unemployment through = \-alternative and sound exchange media and value standard\- reckoning. = To the extent that this monetary revolution is not\- obstructed, the old institutions and practices could be tolerated \-and = continued by those who still like them - at their own expense \-and = risk. But under fully free competition in this sphere they\- are = unlikely to last long. - Mon etary freedom would realize the \-right to supply oneself with work = without depriving anyone of\- their rightful jobs and without extorting = tributes or privileges \-from others. (Some bureaucratic jobs would, = indeed, become \- superfluous. But if the current jobholders are intelligent, = \-industrious and willing, they would soon find productive and \-perhaps = even better paying but certainly more satisfying jobs.) \-In essence, a = new kind of merely monetary and financial \- revolution is required that would not infringe any basic individual = rights but rather would realize many important and so \-far largely = unknown, ignored or suppressed individual rights. - J. Z., 29.8.02. \par FUTURES DEALINGS WITH CASH. EACH MONEY DEBT IS TODAY SUCH A\- = SPECULATION: A speculation in futures is involved in any promise \-to = supply a form of cash which at present one does not yet have \-on hand.=20 I know of only of one author, namely Ulrich von Beckerath, 1882-1969, = \-who has extensively discussed this problem and its solution. He\- did = not want to abolish the non-cash and clearing transactions \- but, rather, free them and make them customary and standard \-behaviour, = a basic monetary and property right. Any debtor should become free to = offer clearing, instead of cash to his creditor,\- under conditions that are mutually acceptable, in the settlement\- of = all his debts. For this purpose, he should also become free to \-offer = his own clearing certificates in settlement, in some cases\- at a discount that would be required to satisfy a creditor. When = necessary, the\- settlement should be arbitrated through an = agreed-upon\- arbitration avenue. The liquidity and ba nkruptcy rules, like the reserve, redemption and convertibility rules of = governments, are \-entirely unsatisfactory and have caused, promoted = prolonged \-and sharpened many monetary crises. In most cases, when the = \- system is fully developed, such a discount would not even be\- required. = Even when clearing was merely carried on via book\--entries, it was = already so developed e.g. in colonial India, that\- a colonial official = could "pay" for his coffee, meal or \- purchases on the market with a privately written and informal "chit", = then and there,\- accepted at par, without hesitation, which ultimately = was\- deducted from his income account, via some chit traders, who\- specialised on mediating such clearing. And more or less \-primitive = French subsistence villages, far from Paris, had their \-own clearing = payment communities, for their internal exchanges,\- in which private = IOUs were freely issued and accepted and\- , periodically, mutually offset, without any official "Franc" being = \-involved at all, physically. The government's cash currency\-" = standard" was merely used as an accounting and pricing standard\- but not used physically in most of the local payments. - No one should = be driven into liquidation or bankruptcy without every\- clearing = options having been fully exhausted first of all. \par GESELLIANS: How many of them, apart from Paul Nagel, Karl Walker = \-and Heinz Peter Neumann, advocated at least a degree of monetary\- = freedom? Help me to compile an honours roll for them, preferably \- with a reference to those of their writings in which they uttered\- = monetary freedom ideas. Since their prophet advocated only \-another = form of monetary despotism, their independent minds \- towards him should be especially celebrated, in spite of the fact \-that = most of them would still have expected Gesellian money to \-win in free = competition. - J. Z., 20.3.97.=20 \par GOLD AS MONEY, A MATTER OF CHOICE: The man concerned with \-justice = does not aim to force others to use gold as money.\- Rather, he insists = that government has not right to prevent him\- and other men from using = gold as money if they choose. - Paul\- Stevens, THE FREEMAN, 1/75, 3/4. \par GOLD BUGS: Should people not possessing gold or silver or not\- = having credit with those who do, give up trying to exchange their = \-goods and services and labours among themselves, in a monetary\- way = or via clearing, j ust because they lack sufficient rare \-metals to cover with them all = the transactions they desire? Their \-own labour, services and products = can be all the cover they do \- need for themselves, for their exchange media and for their clearing = transactions. Without possessing a single gold or \-silver coin they = could price out all their goods, labours and\- services in rare metal weight units and clear their exchanges with a = mere rare metal }{\b\i\f0\fs24 accounting}{\f0\fs24 standard.\-Why = should e.g. every petrol money token, gas or electricity\- money, railway, bus or tramway money have to be "covered" by gold\- or = silver - when there is sufficient service potential to cover\- its = value? Those who can't think of any better monetary and \-clearing = arrangement than via rare metal pieces and ac counts of \-them, should never be put into a position where they can = outlaw\- all other transactions as the otherwise admirable Murray N. = Rothbard would have been inclined to do. - J. Z., 16.3.97. \par GOLD CONVERTIBILITY, REDEMPTION, COVER OR RESERVE FUND: = Gold-\-convertibility could and should be realized via the greatest = \-redemption fund at all, namely the free gold market. Anything \-that = passes there at par with gold is, by definition and in \- practice, as good as gold in value, has the value of gold - but\- is = much more portable and less risky than the equivalent gold-\-weight = units would be, if physically present. - J. Z., 3/97. \par GOLD COVER & REDEMPTION OR CONVERTIBILITY: There is no inherent = \-reason why each exchange of labour, goods and services or any\- = exchange medium or exchange process, in a free exchange economy,\- should be "covered" by an equivalent amount in form of rare \-metals. = This compulsory gold or silver "licence fee" for every exchange should = be abolished - at least as a wrongful and \-unnecessary imposition. = Likewise abolished should be the \- equivalent "licence" requiring a "cover" of each transaction by\- or = conversion option upon demand by the creditor into, legal \-tender cash = - any forced and exclusive currency. Free trade in\- any form for any free exchange, using any medium or process, at\- least = among all consenting adults. Gold and Silver as exclusive \-means of = exchange and standards of value should be no more than \-options for the believers in them, not obligatory for those who\- do not = believe that they are the only or best options available.\-- The cover, = redemption or reserve spleen demanding rare metals,\- fractionally or = 100% behind every monetary certificate, is so=20 \-popular, even within "scientific" writings, that the few\- exceptions = to this few and counter arguments and references\- should be combined = and published together and so should be all\- the alternative cover, = reserve, convertibility proposals, \- experiences and practices for all kinds of alternative transport = \-tickets or ticket money, purchasing vouchers etc. - J. Z., 3/97. \par GOLD DISCOVERIES: They have often wrongly been blamed for = \-scarcity and emergency prices, after bad harvests, revolutions, = natural \-catastrophes etc., leading to shortages in the supply of goods = \- and services. If one compares the price levels for subsequent\- periods, = then one will soon find out, that the added gold,\- remaining accessible = or in circulation, has not correspondingly\-=20 and permanently driven up prices and, upon further researches, one\- = will usually find the real causes of the temporary price \-increases, = reckoned in gold units, that did occur. Even in my \-youth and in a = relatively developed country like Germany, the=20 \-monetary economy had not yet completely penetrated and some = \-exchanges were still made by payments in goods or produce. Gold \-and = silver coins were never available in sufficient quantities to \- mediate all possible and desired exchanges. To that extent even\- large = new gold and silver finds did not and could not affect the \-price = levels much. Moreover, they constituted only a small\- fraction, as a rule, of the accumulating total of these metals. - J. = Z., 3/97. \par GOLD STANDARD AND MONETARY FREEDOM: Today's free-market\- advocates = of the gold standard differ from past advocates. For \-example, = free-market advocates do not exclude silver or other \-commodities from = their concept of a gold standard. Indeed, they\- do not even insist that gold MUST be money. - Paul Stevens,\- referred = to as a freelance writer, in THE FREEMAN, 1/75. - Alas,\- some have not = yet forgotten anything about the old standard -except bad experiences = with it - and have not learned anything\- about its other options and are not willing to listen, or study,\- = either. - J. Z., 21.3.97. \par GOLD STANDARD, MONETARY DESPOTISM & POLITICAL MONEY: The old\- = standard functions with the force and inevitability of natural \-law, = for it is the money of freedom and honesty. Society may\- temporarily depart from it in the vain hope of replacing it with = \-political money that is managed and manipulated for political \-ends - = used and abused as an instrument of public plunder. - \- Sennholz, THE FREEMAN, 2/75. - When gold payment, in gold or gold\- = certificates with gold redemption is legally and juridically \-imposed = upon all debtors then this gold standard becomes\- dishonest, = impractical and very harmful, too, for all non-cash \- and clearing transactions cannot be so covered, nor, by their\- very = nature, need they be so covered. A single gold weight, used\- as a = standard of value, would suffice for all these transactions. \- The imposed obligation to deliver gold instead of clearing has \-often = led to panics and economic depressions. It should be\- replaced by an = optional and individual obligation and even then withdrawal premiums = ought to be included in the contract, as they \- are in most other dealings with futures (Trades that promise to\- = deliver what one does not yet possess but only hopes to attain.\-). \par GOLD STANDARD, THE: It is wrong to speak and write as if only\- one = kind of gold standard were possible, did occur historically\- or had = been proposed. - Ignored are e.g. the various forms of\- option clauses and the gold clearing or gold for account value\- = standard. Both eliminate, in their way, the redemption risk and\- this = without having to accumulate a 100% gold redemption fund.\- Even a fractional reserve redemption currency can be frankly \-offered = as such and run, without false pretence, as long as it\- can be. Its = runs an d moratoria can be foreseen and anticipated by clauses for gradual = settlements that are satisfactory for the \-bank and its voluntary = customers. - J. Z., 16.3.97. \par GOLD-REDEMPTIONISM OR A COMMODITY RESERVE STANDARD? MONETARY = FREEDOM: Competition would provide better money than\- would government. = I believe we can do much better than gold ever \-made possible. = Governments cannot do better. Free enterprise,\- i.e. the institutions that would emerge from a process of\- competition = in providing good money, no doubt would. There would \-in that event = also be no need to encomber the money supply with \- the complicated and expensive provision for convertibility which \-was = necessary to secure the automatic operation of the gold\- standard and = which made it appear as at least more practicable\- than what would ideally seem much more suitable - a commodity \-reserve = standard.... - Hayek, Denationalisation of Money, 83. \par GOVERNMENT & BANKING: Some believe that "government has been\- = forced to interfere with the business of banking." - What has = \-happened, rather, is that much meddling by governments with \-banking = has led to many abuses, which the government tries to\- cure and in reality makes worse by further meddling. See: \-REGULATION, = DEREGULATION, CENTRAL BANKING, MONETARY DESPOTISM,\- MONEY POLICY, = CURRENCY POLICY, CONTROLS, LIMITS. - J. Z., 3/97. \par GOVERNMENT MONEY WITH TAX OR CLEARING FOUNDATION: Even\- government = money used to be similar to privately issued clearing certificates or = turn-over promoting and self-liquidating banknote \- issues. They were issued in anticipation of short-term tax claims \-and = were rapidly streaming back from a limited circulation in payment of = taxes. Usually the taxes for up to the next 3 months could thus be = \-"anticipated" by issuing and spending=20 these kinds of clearing \-certificates. Ideally, this kind of tax = foundation (if there is \-anything ideal about coercive tributes) was = practised without\- legal tender and using a sound value standard, to = avoid\- over-issues and the cheating of any creditor. Such clearing\--issues of = "tax foundation money", for the clearing of government\-- spending = against its tax claims, and anticipating near future tax-\- payments, persisted for a considerable time but governments do\- not = tend to remain honest for very long, if they can get away\- with using = fraud and coercion instead, to their short-term advantage. Even Adam = Smith, in one of his neglected passages, in\- Wealth of Nations, realized that tax foundation money does not = \-require a gold reserve but merely sound accounting. Knapp, too, \-in = his famous The State Theory of Money, recognized the possibility of = tax-\- foundation money and its clearing nature, as the essence of \-government = paper money issues. But he realized as well, in a \-short passage, the = possibility and clearing nature of private payment communities and their = certificates. He merely did not \- develop the private options in this work, since it was, by its title, = dedicated to the other and supposed "ideal" clearing\- option for a = country-wide and uniform paper money. When \-governments extort payments = from their victims, then they should\- at least provide the victims with sufficient sound exchange media\- to = facilitate these payments. Otherwise they do act like \-inquisitors who = torture deaf and dumb persons in order to extract\- confessions of them. = - J. Z., 3/97. \par GOVERNMENT PAPER MONEY ISSUES: Can they be honest, non-abusive, = \-non-coercive? Such issues happened but they were the exception\- = rather than the rule. When all powers of monetary despotism are \- granted to a government then they are usually abused, sooner or \-later, = more often than not. - J. Z., 3/97. \par GRESHAM'S LAW: If government "services" did not have "legal\- = tender", namely forced value and forced acceptance, if \-individuals = could freely negotiate them (by contracting e.g.\-, voluntary taxation = alternatives) or refuse them altogether (by \- individual and minority group secessions) then, here, too,\- Gresham's = law, applying only to forced currency, would be \-reversed and so far = enforced public payments and services (\-single convenience = relationships, wrongly advocated as "public or\- welfare services"), would be replaced by mutual convenience = or\-mutually preferred currencies and services, whose voluntary\- aspect = would make them moral and honest ones. They would thus,\- step by step, = individual by individual, minority group by\- minority group, replace the bad, non-competitive and so far \-enforced = and authoritarian ones. - J. Z., 3/97. \par GRESHAM'S LAW: Let good private currencies and current accounts = \-and clearing systems, all competitive, well publicised and = market\--rated, drive out the bad ones, which under freedom would not\- = enjoy any legal privileges and cover-up options or, in p ractice, \-immunity from prosecution, altogether or for all too long. - = J. Z., 3/97. \par HARD CURRENCY : "The essence of hard money is that it has precise = \-limits to its supply." - A value standard like a gram of gold\- is not = depreciated proportionately to the numbers of grams of \- gold available. Compared with the accumulated gold stock even the = \-largest additional annual gold production amounts to little - and\- = industrial use of gold is ever increasing and takes a larger and\- = larger share of current pro duction. The value of meter and kg\-measures is not depreciated by the = number of meter and kg\- measures being increased. And the same = relatively stable value \-standard can be used in an ever increasing = circulation that \- corresponds to the ever increasing flood of goods and services \-offered = for sale. The precise limit for any competitive private \-or cooperative = currency is the same as that for any other product \- or service. As long as it can be honestly offered and sold at = \-competitive prices, it does not exceed its limits. But any\- = considerable and lasting discount of a free market rated currency \-will = induce the issuer to stop issuing and his potential\- acceptors to refuse or still further discount his money tokens - \-and = to force them upon him, as the issuer, as soon as possible, \-at par. In = one's thinking and issue and reflux practice one\- should distinguish between exchange media and value standards and = \-between forced acceptance and forced values as against optional = \-acceptance and free market rating. Otherwise one will inevitably\- arrive at wrong conclusions. - It indicates soft-headed\- "thinking" to = class all other currencies but gold or silver metal\- or 100% gold or = silver covered certificates as "soft" currencies.\- - J. Z., 16.3.97. \par HONEST MONEY: "... an honest money system; i.e. one where the = \-currency is backed by something of true value ( usually gold or\- = silver )." - David F. Nolan, LIBERTARIAN PARTY NEWS, March 95. -\-If it = were backed ONLY by gold or silver but not by consumer \-goods and services - then how = acceptable would it be to most \-people? Imagine a city that is = blockaded or a lifeboat situation. \-- J. Z., 16.3.97. \par HUNGARY: In 1946, according to Julia Brophy, on radio, 8.10.93,\- = the worst inflation ever occurred in Hungary. No more is known to\-me at = this stage. - J. Z., 16.3.97. \par IMAGINARY DEPOSITS: They exist only in the imagination of those = \-who imagine that they do exist because they cannot imagine the\- = clearing and short term credit transactions that are involved. - \-J. = Z., 8.10.92, 16.3.97. See : SOCIAL CREDIT, CREDIT CREATION, \-DEPOSIT CREATION, MONEY CREATION. - = J. Z., 3/97. \par IMMIGRATION RESTRICTIONS & UNEMPLOYMENT OR FEARS OF UNEMPLOYMENT\-: = We do not have 800,000 unemployed in Australia because we have ca. = 100,000 or even less immigrants to Australia p.a. Nor do we \-have a = vast youth unemployment, from 20 to 40% in some areas,\- due to immigration. Most immigrants are = adults. Nor do their\- young children throw ours out of jobs. All such = notion are based \-on primitive and false nations, e.g. that there is = only a limited\- number of jobs available at any one time, which ought to be\- "fairly = shared" - first of all among the locally born or \-already naturalized = citizens. At the same time, the really limiting \- factor: Prohibitions, regulations, red tape and, most of all, a = \-monopoly means of exchange, especially for wage and salary \-payments = and the suppression of monetary freedom and of freedom to \- clear all one's debts, is ignored, although it is the major factor in = preventing all desired and possible exchanges from\- taking place, which = would require the labour of all our \-unemployed and that of all the = immigrants we could manage to get. - J. Z., \-20.3.97. \par INFLATION & LEGAL TENDER: Try also to find any large and lasting\- = inflation of the general price level, through any physical or\- = accounts-only currency, that ever happened without the legal \- tender and monopoly issue privilege. I would be very interested \-to = hear or read about one. - J. Z., 3/97. \par INFLATION THEORIES: They are so numerous that all should be = \-listed - and confronted with the facts and contrary theories as \-far = as is possible, in order to enable the patient researchers to \-finally = sort the wheat from the chaff. - J. Z., 19.3.97. \par INFLATION: Inflation is the over issue of exclusive and forced\- = "legal tender" and monopoly currency by the government or its central = bank - \-beyond the quantity that a free market and competitive issues = and\- value standard conditions would be prepared to accept at par\- value = with its nominal value under free market rating for such a currency, or = at par with alternative value standards, if the paper-\- standard of the government is not suitable for marking out prices, wages = and other debt contracts or contract offers or searches. For instance, = in Israel, at least a few years ago, \-wages were frequently settled by = an index standard and most \- prices in the shops were marked out not in the official Shekel\- = standard but, rather, in U.S. dollars. Without legal tender and \-the = issue monopoly refusals and discounting of any inflated\- currency would = be wide-spread to overwhelming. - J. Z., 3/97. \par INFLATION: Inflation is the product of centralised control of\- = your money. - Peter A. Wright: Australian Campaign Against\- Centralism. = - Rather, it is the product of centralised control of\- THEIR money, which is FORCED UPON YOU as an exclusive currency. -\-J. = Z., 20.3.97. \par INFLATION: No clearing of deposits acts inflationary. It cannot\- = do so any more than barter can inflate prices. It just does what = \-barter does (namely exchange goods and services), but unlike barter, = not as slowly\- and inefficiently, but much faster, easier, more effectively, more\- = widely, multilaterally and anonymously. Thus no clearing medium or = method ought to be outlawed or made difficult or more or less\- monopolised or qualified and restricted. The debtors and\- creditors, = whose debts and credits are somewhere and soon settled\- in a free = clearing system, in several stages, may never come to \-meet or even h ear of each other. During clearing debts and assets are mutually = cancelled -\- in enormous amounts, daily. They do not indefinitely grow = and\- cannot be made to grow, indefinitely and unilaterally. They are\- based on and depending upon the underlying sales and purchases of = \-goods, services and labour. Mere paper profits and paper capital\- = illusions may grow, even for prolonged periods, if there is no\- truly free market - in the monetary sphere as well. But, sooner or = later they collapse down to the reality behind them. - J. Z., 3/97. \par INFLATION: The Notion that the private deposit and credit system\- = acted itself in an inflationary way and that it could do so, on\- its = own. (Price increases on the goods side or due to temporary = \-speculation and hoarding attempts, are not permanent but \-temporary. They soon lead to corresponding = price falls - reckoned\- in honest value standards. They indicate = dearness from the goods\--side but not inflation from the monetary = side.) - Wherever, as\- long and to the extent that clearing occurs, which is using a \-sound = value standard, no inflationary effect does occur or can occur. That = applies to any payments carried on in books, bank\- -passports, bank accounts, or bank computers, too. But forcing all = \-people to use a governmental and legal tender paper standard,\- one = frequently or almost constantly depreciated by the government, involves = all private \- transactions in the depreciation of this paper standard, too. But \-the = private non-cash or clearing transactions themselves do not \-depreciate = this depreciating standard further. I would not\- depreciate the government's paper currency when I clear e.g., \-paper $ = 10 of my apples against paper $ 10 of your potatoes.\- Naturally, the = government as the culprit for every inflation,\- tends to blame=20 everyone and everything - except itself. However, \-if all managed to = settle all their transactions by clearing or\- private optional note = issues and if all used in these \-transactions a more reliable value = standard than most governments\- are able or willing to supply, then the government's "value standard\-" = and its paper money would become worthless because they would be = \-ignored or refused, i.e. their inherent worthlessness would be \- revealed. Government's inflationary paper money issues, like\- other = forms of government spending, based on taxation or forced \-loans or = "investments" in future tax slaves, is entirely \-parasitical. That is = its own flaw. It cannot rightly blame its\- worthlessness on others. - J. Z., 3/97. \par INFLATION: Without legal tender and the note issue monopoly, = \-i.e., under free market rating for competing and optional \-currencies = and their freely chosen value standards, no inflation \-is possible. A = systematic historical research would soon provide=20 \-enough evidence for this precondition for inflation. So many more \-or = less silly researches are officially financed. This kind is\- not. I = have recently challenged my State MP to initiate it \- through the Liberal Party's research department. But I do doubt \-that = this will happen. The best way to convince someone else is\- not to try = to convince him against his will by raining facts and\- arguments down upon him but, rather, to challenge him into\- convincing = himself and to appeal to his self-interest for doing \-so. - J. Z., = 19.3.97. My own letter, to the Australian Libera l Party's research department, through the local MP, trying to follow = this advice, received no response at all. One cannot effectively appeal = to the knowledge and reason of politicians, not even to their = self-interest, outside of their usual channels of " thought", "ideas" and "interests". However, unlike a Stalin, Hitler or = Mao, they did not order my imprisonment or execution. - J. Z., 28.8.02. \par INTEREST & MONETARY FREEDOM: Monetary Freedom would abolish = \-interest at most in all turnover credits - apart from a small\- = service and insurance charge. Even this might be absorbed by the \- issuers, if they are e.g. a cooperative shop association that is \-more = interested in assuring and increasing its sales than in\- recovering all = its costs of its issue department. Thus it might \-include these small = costs in its prices as it does its\- advertising costs. - J. Z., 20.3.97. \par INTEREST RATES. ARE LOW INTEREST RATES A PRIMARY CONDITION FOR AN\- = ECONOMIC BOOM? The easy availability of credit and the ease in\- = achieving sales of labour, other services and goods, are probably \-mo re important to achieve a boom condition and to maintain it\- than low = interest rates are. Likewise, a stable enough currency\- or stable = enough currencies are more important for prosperity \-than low interest = rates. During inflations even a negative\- interest rate, with the nominal interest rate below the inflation = \-rate, cannot boost an economy sufficiently. - J. Z., 6.11.96. \par IOU'S OR ASSIGNMENTS UPON ONESELF: Free banking means freedom to = \-issue, refuse, accept, discount exchange and trade private or\- = cooperatively issued assignments, IOUs, certificates, notes,\- tokens, = etc., in as convenient forms as possible, i.e. in\- standardised monetary denominations, but otherwise distinct from\- all = other monies - that make them suitable for at least local = \-circulation. Each may thus freely offer, in transferable\- symbols, in private coins, notes or electronic messages, all his\- = ready for sale goods, services and labour and he may also make a = \-business out of facilitating private and cooperative issues for \- others and to manage them. To so assign one's ready for sale = \-properties and services, including labour, and to do so in \-suitable = associations with others, is a basic right and liberty,\- part of the total freedom to own property, make contracts, trade \-and = exchange freely and associated with the right and duty to as\- far as = possible support oneself by one's own efforts and \-property. It is = obvious that such a freedom is rightful and=20 \-harmless and that at least potentially it can be very beneficial\- if = fully realized. - J. Z., 11.1.96, 20.3.97. \par IOUs: All producers and service providers could freely exchange\- = all their products and services via IOUs freely issued by them\- and = then cleared against each other. - J. Z., 16.5.96. - To\- facilitate the = issues and that clearing process and make that=20 \-clearing appear much more on a monetary way, the IOUs should\- become = standardised in form and appear in numbered and certified \-money = denominations, using any value standard attractive to the \-issu ers and the users of these clearing certificates. - See :\-Clearing = House Certificates, Clearing. - J. Z., 19.3.97. \par ISSUERS, POTENTIAL: Any centre that receives many payments and\- = has many payments to make, can act as a centre for the issue of \-bank = notes and clearing certificates. - J. Z., 20.3.97. \par LABOUR & GOODS EXCHANGES, ISSUING THEIR OWN GOODS WARRANTS, ON \-A = TIME OR OTHER VALUE STANDARD: One of the conceptual mistakes\- of such = experiments - like those by Josiah Warren and Robert Owen \-- is, that = they try to establ ish new and separate stores that\- attempt to help the whole local = economy by their inevitably\- limited issue potential, while they bypass = the huge stocks of \-goods, services and labour that are offered by all = others in the \- community, which would provide the necessary shop foundation for \-an = effective local currency alternative. Any local bank of issue \-should = not appear as a competitor to the existing shops and\- businesses but as a helper to all of them. It should not attempt \-to = concentrate all goods and services and all turnover in a new kind of = business, the labour exchange, but, rather, leave them\- were they are and help to sell them from there, through its issue\- of = labour notes, goods warrants and ticket money or purchasing\- = certificates etc. The experiment should right away aim at\- monetising or liquidifying all the local ready for sale assets,\- = labour and services, which at present are difficult to impossible \-to = sell. Thus it could win friends almost everywhere instead of \-making = right away more ene mies than it has already naturally, as \-a radical reform. The issue = association might immediately publish \-its evaluations of all local = businesses, their goods stocks and\- service potential and of all local = unemployed and underemployed \- and state for each of them the limits to which they would be \-prepared = to grant them short term loans if they are prepared to \-accept the = local currency in all payments due to them and repay \- the loan after a short period, with the local currency. The sum \-total = should also be publicised as the limit for the local \-economy to help = itself - pulling itself up by its own bootstraps: \- its own potential turnover credit asset. No attempt should be \-made, = initially, to provide for the needs of medium and long term \-capital, = too. But at least studies should be undertaken, to\- provide them in the future on a stable value standard basis, by\- = contracts, and, once the local currency is fully functioning, to = \-accept term deposits and bond purchases in it, to mobilise \-whatever = the local community can in additional savings and=20 \-investments. But even the long-term loans must only be granted\- when = backed by corresponding willingness to save and invest and\- they must = be paid only and repaid finally, in local currency of\-short term = validity, so=20 that the turnover credit character of the\- local currency remains = preserved, and thereby its liquidity and \-reflux foundation or debt = foundation or clearing function. The\- local issues should clearly = express that they are to be usable \- only for clearing settlements, debt payments to, including wage \-and = salary payments, or purchases from the local members. No \-redemption on = legal tender, foreign exchange or rare metals \- should be promised. - As soon as possible the payability of local = \-rates and fees with the local currency should be aimed at, too, \-but = only at its market rate, not at its face value. Instead, the \- local government should be induced to issue its own sound = tax\--foundation currency. Local gas-, water-, electricity- and = bus\--companies should also be induced to issue their own notes, = backed\- by their service capacity. Local tradesmen might also be induced\- to = issue their own service vouchers in money denominations, with = \-acceptance by all members of their association. Every potential issuer = should be induced to fill his niche with his clearing and\- payment = certificates, to the limits of his ability and of the \-readiness of the = local community to accept them at par. None of \-these issues is to have = legal tender power - except towards the issuer=20 \-and, by contract, towards his debtors. Only under this condition\- can = it be achieved that all local labour, services and goods, for \-which = there is a local and still unsatisfied need, can be\- expressed in effective local demand or purchasing power, i.e. can be = easily and soon \-sold, after first having been used to purchase = additional labor, services and goods. Once the local turnover has = reached its maximum, with\- optimum ease, additional savings will occur in the local \-currencies = and these can then be saved and invested in the \-traditional manner, = but still using the local currencies in the \- process, as means of payment, corresponding to the ability and readiness = of the local people to save and invest, using this\- currency and its by = then, hopefully, much improved value standard,\- over the government's all too unreliable and usually depreciating = \-paper standard. - If the experiment is undertaken fast,\- understood = well and publicised well enough, then it will be\- difficult to = impossible for the state or federal government to\- suppress it, especially if it is undertaken shortly before an = \-election and when the numbers of local underemployed, unemployed,\- = bankruptcies and social service recipients have been greatly \-reduced = by it. Then other local communities will demand their \-right to follow this successful model and will not = tolerate its suppression, expressing their sympathies with it on = election\- day. (Thus, optionally, such monetary freedom and self-help or monetary = revolution experiments should be undertaken shortly before an election, = when local unemployment or inflation are severe.) The newly elect will = have to grant an amnesty for all \- breaches of laws and regulations that were involved and have to\- = legalise these actions a.s.a.p. - J. Z., 18.10.84, 19.3.97, 28.8.02. \par LABOUR EXCHANGE BANK, See: FULCRAUD-MAZEL, M., & TOPOLOBAMPO, = \-Colony, COSME, PARAGUAY. \par LABOUR EXCHANGES, See: BRAY, JOHN FRANCIS. \par LABOUR NOTES AND LABOUR EXCHANGES : 1.) Such experiments should\- = attempt to leave the goods and services where they are and sell \-them = from there, through their owners. They should not try to \- replace all of the market through one labour exchange. That will \-never = be successful. 2.) The easiest approach would be to allow \-all the = owners of goods and services, prepared to offer them in \-this way, to = issue notes, tickets, tokens, IOU s, clearing\-certificates etc. upon them. That would correspond to their = \-self-interest and they would be able to manage that, alone or in\- = association with other shops in their shopping centre. 3.) A more\- convenient and much easier determined value standard should be\- chosen = than the vague standard of the supposed average number of \-hours or = minutes spent upon the production of each article. 4.) \- Neither profits nor interest charges should be frowned upon. 5.)\- The = goods so offered and the goods warrants should be \-sufficiently = publicised. Signs should be well displayed in every\- shop about the readiness to accepting such alternative means of = exchange and clearing.\- 6.) One should stress that these tokens are = optional, refusable, \-discountable, in general trading and that only = the issuers have \- to accept them at any time at par. 7.) A free market for these \-tokens = and for their value standards should be established. 8.) \-Employees = should be persuaded to accept payment of at least part\- of their = earnings in these private and cooperative local \- currencies, as long as are quoted and circulate at par with their = \-nominal value - as a precondition for the security of their jobs, = \-which would thereby become independent of the provision of a = monopolised government pa per money, which is also often rapidly \-depreciating. 9.) Debtors of = the issuers should be contractually\- obliged to accept them at par at = least to the extent of their due\- or soon due debts to the issuing = centre. - J. Z., 2.5.96, 20.3.97. \par LEGAL TENDER: Governments could not, of course, pursue the\- = practices by which they forced bad money upon the people without \-the = cruellest measures. As one legal treatise on the law of money\- sums up the history of punishment for merely refusing to accept\- the = legal money: "From Marco Polo we learn that, in the 13th\- century, = Chinese law made the rejection of imperial paper money \- punishable by death, and twenty years in chains or, in some cases\- = death, was the penalty provided for the refusal to accept French = \-ASSIGNATS. Early English law punished repudiation as\- LESE-MAJESTY. = At the time of the American revolution, \- non-acceptance of Continental notes was treated as an enemy act \-and = sometimes worked a forfeiture of the debt." - Hayek,\- Denationalisation = of Money, 28. \par LEGAL TENDER: Legal tender acts of a government do not indicate\- a = government's credit but, rather, a lack of it. Only sound, e.g. \-gold = or silver weight accounted and market rated tax-foundation \- money could (apart from the immorality of compulsory taxes) \-mobilize = the existing (and enforced) tax credits of a\- government and could, to = that extent, be a credit money. But even \-then only the government = itself should have to accept it as legal \- tender, at its face rare metal value, no matter how much of a\- discount = it may have suffered in general circulation. One must accept one's own = IOU at par. Everything else would be dishonest \-or fraudulent. - J. Z., = 5.9.92, 16.3.97. \par LIQUIDITY CRISES: Even if banks had wrongly and inefficiently = \-invested short term funds on long terms, then, under free clearing\- = options they could arrange for a considerable percentage of the \- long-term invested funds becoming mobilised, in instalments,\- through = clearing certificates, that could immediately be used \-against the = long term borrowers, at least shortly before any\- instalment repayments of these borrowers become due and to the amounts = of these instalments. - J. Z., 3/97. \par LIQUIDITY THEORIES: They are so numerous that all should be = \-listed - and confronted with the facts and contrary theories as \-far = as is possible, in order to enable the patient researchers to\- finally = sort the wheat from the chaff. - J. Z., 19.3.97. \par LITERATURE ON MONEY: Most such writings are describing or = \-advocating, alas, just a variation upon monetary despotism, a = \-centralised and exclusive and authoritarian system, supposedly = \-ideal, imposed upon all people in a territory, via a monopoly and=20 \-legal tender legislation. Diverse authors of this kind just want\- to = run their monetary despotism somewhat different from most\- others. Who = is to blame for this? The monetary freedom advocates \-have not yet go t their act fully together. They have so far \-failed even to provide a = complete bibliography, abstracts and\- review service, far less have = they provided all their texts in\- affordable editions, upon demand or = some handbooks on monetary\- freedom, explaining all the terms, concepts, practices and\- = techniques, experiences and various traditions suffiently. I have \-gone = further in that direction than anyone else has so far, to my \- knowledge, standing on the shoulders of giants, but I could\- afford to = do this on ly on microfiche, which most people refuse to utilise. - All too many = people still believe that a "uniform" currency with the widest possible = circulation area would already thereby be ideal. They manage to forget = that almost all such currencies over the l a st 100 years have been mismanaged, country-wide, either by inflation, = deflation or stag-flation - and that they have helped to finance all too = many wrongful wars and other wrongful and irrational government = interventions and that they had to be severely p rotected against competition from better currencies, which free people = would have found much more acceptable. - J. Z., 28. 8.02. \par LITERATURE ON MONEY: Mostly, when one browses in it, not \-monetary = wisdom is predominant but, rather, dogmatism, \-prejudices, errors, = wrong observations, false hypotheses and \-misunderstandings, not only = by the dozens but by hundreds to \- thousands. Its quantity is so large and so few truths are \-contained in = most books on this subject, that the errors etc. \-ought to be = extracted, alphabetized and confronted with the best \-refutations so = far found, to produce, gradually, a useful\- encyclopaedia on the subject. When scanners and computers are \-used = for this and a few dozen people collaborate on this project, \- such a work could be compiled rather fast and could be frequently = supplemented and updated. No one has time and energy enough to \-peruse = all the relevant literature on his own and deal with it in\- this way. - = J. Z., 16.3.97. \par LOAN FUND CREATION: When any bank, somewhat rationally and = \-responsible run, grants a short, medium or long-term credit, in\- form = of a deposit entry, it does not draw or suck that deposit\- out of thin = air, but takes all its other deposits, already on- \-hand, into consideration and uses them, anticipating the \-repayment = by the debtor, when due, plus its profit and that of \-the other = depositors, who, in effect, provided this loan, \-only mediated by the = bank. Nor does it provide this credit for thin air but only for a sufficient security, which will = assure the repayment, in most cases. Admittedly, the timing is often = done \- wrong in practice, misleading the participants and establishing, quite = unnecessarily, considerable repayment risks, at least for crisis = \-times. But precisely the mistake of long-term investing the short-term = \- deposits of others, about which critics do rightly complain, \-indicates = already, contrary to the other dogma (thin air \-transformation into = deposits ) that deposits of others ARE used, \-although wrongly, instead = of using all or some of the available \- thin air. One cannot have it both ways. - Depositors with \-current = account deposits expect their accounts to be used by the\- bank for the = provision of short term liquidity to others.\- Otherwise they could not = earn any interest on their deposits and\- would be subjected to bank charges for safely hoarding the deposits\-. = If a bank could endlessly multiply deposits, short-term, medium-\-term, = long-term, creating them out of thin air, it would never \- run a timing risk at all. Why should it? Why should it bother to\- = advertise for depositors at all? Then it would not need them at\- all. = Thin air would be enough as its raw material or capital. It could = "transform" it and\- lend it out and collect interest on it! - How unrealistic this\- whole = notion is, is already indicated by the term used: thin \-air. Thin air = is thinner than ground level air. Mountain-top \-air, cloud level air = and the air jet liners cruise in, is\- relatively thin compared with sea level air, but most banks are not = located high up in the air. Do the various\- "social credit" thinkers = really propose that the nefarious \-bankers first capture such "thin = air" and then turn it into their \- kind of paper gold and paper profits? - If any bank really could = \-create deposits and make loans from them, then it could also \-create = medium and long term deposits "from nothing". It could \- make itself entirely independent from savers and depositors. Why should = it then even bother asking its debtors to repay loans - \-since then it = could simply "create" new deposits and spend them? - \- Why should it engage in the banking business at all, rather than = \-merely creating its kind of credit and money or deposits from\- = nothing and merely enjoy spending them? There is no reality or \- intelligence behind this notion at all. It is the equivalent to a = \-religious spleen or a superstitious notion. - J. Z., 3/97. \par LOCAL CURRENCIES, INTRODUCTION, TRANSITION PERIOD: Either there = \-will be a single major issuer, a large department store or a\- = shopping centre association, then no major problems are to be\- expected with such an issue, apart from the legal and juridical \-one = and general ignorance and prejudice. But when the penetration\- of a = local currency experiment is much smaller then the danger \- exists that e.g. one general store becomes the major acceptor for\- the = currency issued and that it would have difficulties in using \-the local = currency received in its local and other payments. Thus \- such participants should be free to declare right away that they \-would = limit their daily acceptance of a newly issued local\- currency to = certain total amounts only, let us say $ 50 or $ 500,\- at least until the new issue has become a widely accepted local\- = currency. Then such potentially very valuable participants will \-not be = forced to shoulder too much of the risk of the new issue\- and will not = be turned off early from the experimen t. The \-resistance among local wage and salary recipients against the = new \-currency will also be reduced if they remain free and are even\- = asked to declare how much of their wages they are willing to\- accept in the local currency. Sometimes only e.g. x-mas bonuses\- may, = initially, be paid in a local currency or wage increases. Only in\- = extreme cases will an employer be forced to declare to his\- employees: My situation is such that I have either to dismiss all \-of = you and close my business down, or you will permit me to pay\- you, in = full, in the newly issued local currency. It will also be necessary \- to establish an exchange bureau, in which the local currency is\- = market-rated and exchanged against the established national and = \-perhaps even some foreign currencies. Every case of discounting \- of the local currency - while the shops of the associated issuers = \-remain fully stocked at competitive prices, would then lead to extra = sales for them, as if they had all started a discount sale,\- due to = people buying the=20 discounted local currency at this\- exchange and using it for their = local shopping. One of the first\- steps of local businessmen, examining = this option as a self-help \-measure, would be to find out their = combined offers for sale and\- with this their potential issue limit. - J. Z., 3/97. \par LOCAL CURRENCIES: Freedom to issue local currencies, official,\- = private and cooperative ones, all competitive and optional, i.e.\-, = without legal tender (except towards the issuer) and using \-agreed-upon = alternative value standards, if they are desired. \- They are to be freely market rated against their own chosen = \-standards - and all others and all details of their issue and\- = reflux, readiness to accept foundation and short term securities \- as their backing ought to be sufficiently publicised. In the main, = \-they should be based upon the local goods and services, e.g.: shopping = centres and public utility companies, like gas, \-electricity and water = and sewage services, transport companies \- like bus companies, petrol stations, tradesmen and professional = \-services, insurance services, local rates. They should be issued\- for = all local ready for sale potentials that are immediately or \- very soon available and to the extent that these are locally \-wanted. = Clearing and exchange arrangements should be aimed at\- with other, = especially neighbouring communities that also issue \-local currencies = and establish local clearing centres. \par MONETARY & FINANCIAL FREEDOM: Once it is realized boom times will = be \-permanent. We would not merely temporarily experience some limited = boom periods and in between recessions to depressions. Temporary gold, = silver,\- share or land booms, out of fear of further inflation, would also = become be a \-thing of the past, as well as excessive speculation in = excessively \-fluctuating managed foreign currencies. We would also have = to do without the numerous bargains now obtainable from forced sales and = \-the boom times for bureaucrats, their measures, committees, \-boards, = authorities and quangos, and for politicians with their \- popular prejudices and misleading and false promises and the high = \-burdens they can manage to impose upon the economy. Another\- = "drawback", once monetary and financial freedom are universally = introduced, will be the absence of refugee capital from other \- countries, i.e., of capital forced to flee to a few places where it = is\- still treated somewhat respectfully and gratefully. Naturally, the = country that first introduced monetary and financial freedom would get = the full benefit of all such capital. The \-fluctuations at the stock = exchanges will be much less. Garage \- sales and shops dealing in second hand goods will almost disappear - as = they had almost disappeared in West Germany by 1991. So will beggars. = Even drug use, drunkenness, gambling\- and crime will be reduced. Even = terrorism, dictatorships, civil \-wars, r evolutions and international wars will become much less frequent or = lasting. \-We would loose the "industrial reserve army", too. - Shall we = \-mourn their passing? - J. Z., 19.3.97, 28.8.02. \par MONETARY DESPOTISM & UNDER-PRODUCTION: The World is not\- = overpopulated but all too many people are under-producing - \-because = the exchange media are artificially and legally \-restricted. - J. Z., = 7.5.78. \par MONETARY DESPOTISM & BOOMS & SLUMPS, SOCIALISM & CAPITALISM: It\- = is State interference with the money supply that causes the = \-alternation of boom and slump - the succession of boom and slump \- that provides the chief target of criticism in the socialist \-attack on = capitalism. - Henry Meulen, THE INDIVIDUALIST, 6/75. \par MONETARY DESPOTISM & CENTRAL BANKING : Absolute monetary power \-is = also being absolutely abused. - J. Z., 20.8.74. \par MONETARY DESPOTISM & EMPLOYMENT: Employment opportunities\- should = not be legally confined to the number of jobs for which \-the government = makes its exclusive and forced currency available \-for wage payments. - = J. Z., 7.8.75, 20.3.97. \par MONETARY DESPOTISM & MEDIUM OF EXCHANGE: Governments cannot be = \-trusted with power to determine what traders should use as a\- medium = of exchange. - L. E. Read, THE FREEMAN, 1/75. - Or as a\- \par MONETARY DESPOTISM & MONETARY FREEDOM: When monetary freedom is\- = illegal monetary despotism and all its abuses is the only \-remaining = legal alternative. - J. Z., 74. \par MONETARY DESPOTISM & MONETARY REFORMS: The inflations and\- = deflations of the government's money monopoly and its money\- = manipulations, e.g. by discount rate-, interest- and = open-market-policies, and compulsory "reserve" requirements, harmfully = affect \- all monetary and financial transactions, inflate or deflate or stagflate = cash, deposits, savings, all credits and debts. Instead\- of trying to = "reform" that monopoly and power, we ought to strive \- towards its elimination. That does not necessarily mean its\- outlawry = or prohibition but its shrinking to finally nothing - by \-depriving it = of all involuntary support and thus letting it fail \-upon its demerits. = - J. Z., 3/97. \par MONETARY DESPOTISM & PEASANTS, FARMERS, AGRICULTURE: The only = \-reason why the peasants have no access to cheap capital is not the = \-callousness of the rich, not "production for profit instead of\- for use," but simply stupid state interference with money and = \-banking. - Henry Meulen, THE INDIVIDUALIST, 8/75. - Actually, \-here = it is less the interference with money options that matters \-but = interference with financial freedom, like the issue and \- circulation of mortgage bonds, to help to overcome some of the = \-natural fluctuations in agricultural production. Naturally, once = \-farmers do have produce to sell, after the harvests, then it \-would = also be much easier to sell, internally and extern ally, if they were free to issue their own purchasing certificates. But = farmers' purchasing certificates should not be issued upon their = \-future produce - which might still be destroyed, e.g. by a flood,\- = frost, hailstorm or a pest. - J. Z., 21.3.97. \par MONETARY DESPOTISM & STATE SOCIALISM: Socialist orders, planning\- = states, are thus entirely favourable to a purely fiat currency, to \-an = unbacked paper money. Without such a monetary system, their \- totalitarian power is broken, since gold and silver make possible\- an = independent wealth, since their intrinsic worth escapes the \-control of = the state and the effort of the state to make itself \-th e sole source of value. - Rushdoony, Overpopulation, 28. - This\- = statement includes wrong assumptions on fiat money, legal tender\- and = intrinsic value but is otherwise correct. - J. Z., 21.3.97. \par MONETARY DESPOTISM & THE GOLD STANDARD: For some 200 years\- = governments have tried to manipulate and regulate the people's \-choice = of money. Since the gold standard was least amenable to\- government = control it was systematically assaulted. It was\- suspended at government convenience, gradually deprived of its = substance, and finally replaced by the fiat standard. The stage \-thus = was set for an age of inflation. - Hans Sennholz, Inflation\- or Gold = Standard? 50. \par MONETARY DESPOTISM & THE SUPPOSED EXPERTS: We have the spectacle = \-of the world's economists gathering in discussion only of what\- form = state regulation of the monetary system should take. - Henry\- Meulen, THE INDIVIDUALIST, 12/74. That is like political scientists = discussing exclusively despotic regimes. Actually, \-they do, by = exclusively discussing only territorial political \-regimes that are, = because of their territorialism, inherently\- despotic. See my ON PANARCHY series. - J. Z., 21.3.97. \par MONETARY DESPOTISM : If the legislature may forbid men to enter = \-into one kind of obligatory contracts, they may, by the same \-rule, = forbid them to enter into any - and the natural rights of \-men to buy, = sell, contract, and exchange property, with each \- other, instead of being secured by the constitution, would become = \-merely privileges to be withheld or permitted at the caprice or\- = discretion of the Legislature. And if a banker's contracts, for \- the purchase, sale, or delivery of money, are forbidden today, a\- = farmer's, merchant's, and mechanic's, for the purchase, sale, and\- = delivery of their respective commodities, or appropriate articles\- of traffic, may be forbidden tomorrow. - Lysander Spooner,\- = Constitutional Law Relating to Credit..., pp. 10/11. \par MONETARY DESPOTISM AND THE "FREE" ENTERPRISE ECONOMY: The money\- = supply is today not any more efficient that are the postal, \-railway = and road services. They are all mismanaged by\- monopolistic = bureaucracies. Consequently, there are always \- difficulties in selling goods and labour for this monopolistic exchange = medium and it is also continuously depreciated because we \-are not free = to compete it out of existence or to refuse it\- altogether or to = discount it. - J. Z., 8.4.79, 20.3.97. \par MONETARY DESPOTISM, GOLD & MONETARY FREEDOM: The distinctive\- = function of gold money does not consist in its intrinsic value or \-in = the constancy of that value, which fluctuates even in the\- absence of government intervention. The excellence of metallic\- m oney in free circulation consists in the fact that it renders impossible = the abuse of the power of the government to dispose of the possessions = of its citizens by means of monetary policy and \- thus serves as the solid foundation of economic liberty within\- each = country and of free trade between one country and another. -\- Faustino = Ballve, quoted in L.E. Read's The Free Man's Almanach,\- for August 20. Metallic money is just ONE of the alternative\- = currencies that one should always be free to choose instead of being = confined to an exclusive and forced government currency \-that is = fraudulent, exploitative and tribute raising. The \- supposedly "intrinsic" value of gold is still based on its\- subjective = value in a free market. But that tends to be rather\- steady, via its = subjective value in jewelry and the subjective\- value of its extensive = use in industry. - J. Z., 21.3.97. \par MONETARY DESPOTISM, MONETARY POLICY, DEVALUATION, MONETARY\- = LEGISLATION & VALUE STANDARDS: We are undone, my dear sir, if = \-legislation is still permitted which makes our money, much or = \-little, real or imaginary, as the moneyed interests shall choose=20 \-to make it. - Thomas Jefferson. \par MONETARY DESPOTISM, REGULATION OF THE CURRENCY: All regulation of = \-the currency, Spooner argued, was unconstitutional because it\- = impaired the individual's right of free contract. Outside the \- consent of contracting parties, any encumbrance on a contract \-violated = the fundamental reason for forming societies - to \-protect property. = The right to make and the obligation to fulfil\- contracts provided the = bedrock of civilisation. Abandon it and \- there could be no law, no justice, no civilisation. Without it, \-no = property could be safe. - Charles Chiveley, Introduction to\- Spooner's = works, page 28, vol. I. \par MONETARY DESPOTISM, TAMPERING WITH MONEY THROUGH CURRENCY LAWS: = \-Let me first draw your attention to those despotic ordinances, \-known = as the Bank Charer Acts of 1844-45 and the Coinage Act.\- Those Acts are = commands of the British Government to all its \- subject in this manner: "Thou shalt use no other money than \-mine, = or such as is issued by those bankers whom I have granted\- special = privileges to." Other governments have enacted currency \- laws to much the same effect as ours. You understand, owing to \-the = indirect nature of all exchange, due to the division of labor,\- a = medium is required in order that exchanges be completed. This \- medium, money, is necessitated in the transactions between\- shopkeepers = and their customers, between capitalists and\- laborers, and in fact, = whenever producers want to exchange their \-products with one another. = Given division of labor and consequent\- indirect exchange, and money is a necessity. It is, in fact, the\- = first necessity in any community that has advanced beyond direct\- = barter. It goes without saying, therefore, that any tampering \- with the money supply will have far-reaching effects, and that = \-whenever currency laws exist trade cannot be free. - John Badcock, = Slaves to Duty, pp 21/22. \par MONETARY DESPOTISM: Absolutism suppressed merchants' attempts to\- = create stable money. - Hayek, Denationalisation of Money, 28. \par MONETARY DESPOTISM: After half a century of monetary depreciation = and economic instability, still to accept the dogma that it is \-the = proper function of government to issue money and regulate its \-value, = reflects a high degree of insensibility to=20 our monetary\- plight. - Hans F. Sennholz, The Freeman, 9/73. \par MONETARY DESPOTISM: And central banks, national debts, = \-depreciating currencies and legal tender laws spell one thing - \-the = end of free enterprise, freedom and justice. - Leslie Snyder, Justice or = Revolution, p. 133. \par MONETARY DESPOTISM: But as soon as sit was widely understood some\- = 50 years ago that the convertibility into gold was merely a method\- of = controlling the AMOUNT of a currency, which was the real \- factor determining its value, governments became only too anxious\- to = escape that discipline, and money became more than ever before \-the = plaything of politics. Hayek, Denationalisation of Money, 29. \-- Here = Hayek does not recognize that other mea ns can effectively\- control the amount of money issued when it is not = monopoly money \-and has no legal tender powers. Even for him it was not = easy to\- entirely free himself from a host of old and popular = prejudices.\-- J. Z., 21.3.97. \par MONETARY DESPOTISM: For a government to limit the currency of a\- = people, and to designate the individuals (or corporations) who\- shall = have the control of that currency, is, manifestly,\- equivalent to = saying there shall be but so much industry and \- wealth in the nation, and that these shall be under the special\- = control, and for the special enjoyment of the individuals\- designated; = and, of course, that all other persons shall be\- simply their = dependants and servants; receiving only such prices\- for their property, and such compensation for their labor, as \-these = few holders of the currency shall see fit to give for them.\- - Lysander = Spooner, A New Banking System, pp. 52/53. \par MONETARY DESPOTISM: How much have we all heard (we who are old\- = enough), within the last fifty years, of the power of congress, \-or of = the States, "to regulate the currency". And "to regulate \- the currency" has always meant to fix the kind, and limit the\- amount, = of currency, that men may be permitted to buy and sell, \-lend and = borrow, give and receive, in their dealings with each \-other. It has = also meant to say who shall have the control=20 of the \-licensed money; instead of making it mean the suppression only = of\- false and dishonest money, and then leaving all men free to\- = exercise their natural right of buying and selling, borrowing and\- lending, giving and receiving, all such, and so much, honest and\- true = money, or currency, as the parties to any or all contracts \-may = mutually agree upon. - Lysander Spooner, Cleveland, p. 92, in\- Works, = I. \par MONETARY DESPOTISM: If any monetary issue, clearing system,\- = non-cash payment method, deposit saving and investment system or\- any = other capital market system is good enough then it does not \-require = any privilege, licensing, subsidies, controls or\- regulations. And the bad ones are, obviously, never sufficiently\- = prevented or kept under controls by the government controllers = (\-themselves the worst offenders, through their inflationary, = deflationary and stagflationary, coercive, centralised,\- authoritarian, fraudulent, exploitative, oppressive and war\-promoting = system), as almost daily reports in the mass media prove\- sufficiently, = although these media do neither recognize the \- correct causes nor the natural cures and preventative steps. - J. Z., = 3/97. \par MONETARY DESPOTISM: In reality, those theoreticians dislike = \-monetary stability, because they dislike the fact that by means\- of = money the individual may escape the arbitrariness of the \-government. = Stable money is one of the last arms at the disposal \- of the individual to direct his own affairs, whether it be an\- = enterprise or a household. It is certain that nothing so\- facilitates = the seizure of all activities by the government as\- its liberty of = action in monetary matters. - Charles Rist. \par MONETARY DESPOTISM: Just as the nationalization of the note \-issue = has forced the state to nationalize various industries in \-order to = combat the resulting unemployment, so the same initial \- interference with industry's right to create its own medium of\- = exchange produced the inflation that forced the state to control = \-prices. - Henry Meulen, THE INDIVIDUALIST, 8/78, p. 47. - The\- = "force" involved was in both cases only a false pretence,=20 \-no a valid excuse. - J. Z., 20.3.97. \par MONETARY DESPOTISM: Managed money goes with a statist and = \-collectivist philosophy, with government "planning", with a\- coercive = economy in which the citizen is always at the mercy of \-bureaucratic = caprice. - Henry Hazlitt, Inflation, p. 26. \par MONETARY DESPOTISM: Men do make mistakes. But the tendency is to\- = correct such mistakes most rapidly when the costs are instantly \-and = clearly revealed. The dreadful cost of letting the government \- prescribe and manage our money is now becoming clear. If that\- mistake = is corrected, it would go far to curb numerous other \-wasteful = practices - ... Paul Poirot, THE FREEMAN, 4/75. \par MONETARY DESPOTISM: Money being the life-blood of the economic\- = system, the control of money means that the economic life of the = \-people is controlled. - Rev. Rushdoony, The Myth of\- Overpopulation, = p. 28. \par MONETARY DESPOTISM: Money-control is the supreme and most = \-comprehensive of all governmental controls short of \-expropriation. - = Gustav Stolper, This Age of Fable, p. 64. \par MONETARY DESPOTISM: Our monetary difficulties spring from unwise\- = state tampering with the money supply. - Henry Meulen, THE\- = INDIVIDUALIST, June 77, p. 27. \par MONETARY DESPOTISM: Sproul can seriously speak of leaving\- = everything to what he calls "competent and responsible men." = ...\-Sproul's currency theory may be summed up thus: Put your faith\- in = the monetary managers, who have always fooled you in the \- past. - Henry Hazlitt, What You Should Know About Inflation, p.\-30. \par MONETARY DESPOTISM: State control of money was generally started\- = as a source of revenue. - Henry Meulen, THE INDIVIDUALIST, 12/74. \par MONETARY DESPOTISM: The existing (world money) system...\-creates = poverty... and is the root cause of war. - Vincent C.\-Vickers, Economic = Tribulation.=20 \par MONETARY DESPOTISM: The more completely public finance can be = \-separated from the regulation of the monetary circulation, the = \-better it will be. It is a power which always has been harmful. \- Its use for financial purposes is always an abuse. And government\- has = neither the INTEREST nor the CAPACITY to exercise it in the manner = required to secure the smooth flow of economic effort. -\- Hayek, = Denationalisation of Money, 102. \par MONETARY DESPOTISM: The only difficulty, but a most serious one, = \-is that the State now fixes the total supply and type of money \-used = in exchange. This is as frustrating as though the State\- s should limit the number of postage stamps or railway tickets that\- = can be issued, except that the harm done by money control is very \-much = greater. We write letters, or travel, relatively seldom. We\- buy and sell every day. - Henry Meulen, THE INDIVIDUALIST, 10/77. \par MONETARY DESPOTISM: The world is now allowed to use only fiat = \-paper money... - Henry Meulen, THE INDIVIDUALIST, 10/76, p.54. - \-Or = tokens and non-cash payments based on it and limited by it. -\- J. Z., = 3/97. \par MONETARY DESPOTISM: There is no more ground for the State to = \-prescribe the use of a particular money than to specify the = \-transport or the type of invoice to be used. - Henry Meulen, THE\- = INDIVIDUALIST, 12/77, p. 70. \par MONETARY DESPOTISM: There is thus an immense educational task = \-ahead before we can hope to free ourselves from the gravest \-threat = to social peace and continued prosperity inherent in\- existing monetary = institutions. - Hayek, Denationalisation of\- Money, 101. \par MONETARY DESPOTISM: They have all held that it was not necessary\- = that money should be a bona fide equivalent of the labor or\- property = to be bought with it; but that, by the prohibition of \- all other money, the holders of a comparatively worthless amount \-of = licensed money would be enabled to buy, at their own prices,\- the labor = and property of all other men. - Spooner, A Letter to\- Grover = Cleveland, Works I, p. 37. \par MONETARY DESPOTISM: They know, therefore, that prohibitions upon = \-money are prohibitions upon industry itself; that there can be no = \-such thing as freedom of industry, where there is not freedom to \- lend and hire capital for such industry. - Spooner, A New Banking\- = System, p. 50. - Alas, he does mix up monetary rights with\- savings and = investment rights and does propose that the \- monetization of ALL capital would be possible and desirable, thereby = overlooking the function of money as a means to promote\- primarily the = turnover of daily wanted consumer goods, not the \- turnover of productive capital. For the latter, under financial = \-freedom, special issue and trading rights and special kinds of \-paper = securities do exist, which are not and cannot be currency.\- - J. Z., = 20.3.97. \par MONETARY DESPOTISM: To entrust our money to government is like\- = leaving our canary in trust with a hungry cat. - Sennholz,\- Inflation = or Gold Standard? p. 6. - Inflation or free choice in value standards = and exchange media is a better alternative. It\- frees us from the quantity of gold available and affordable for \-us. = It could, e.g., still permit us to account or clear in gold \-weight = units, without possessing any - and would leave all other \-options = open, too. - J. Z., 21.3.97. \par MONETARY DESPOTISM: Total control of a people is possible \-through = control of money. - Rev. Rushdoony, The Myth of \-Overpopulation, p. 28. \par MONETARY DESPOTISM: Traditionally, stabilisation theory has\- = viewed private, capitalist economy as a mechanism which produces = \-fluctuations... There is no question that government is a major = \-source of instability. - O. Eckstein, quoted in Hayek,\- Denationalisation of Money, 78. \par MONETARY DESPOTISM: When the supply of any commodity is stopped,\- = we can generally turn to a substitute of our own choice, but when the = supply of money is stopped, all buying is restricted. - Henry \-Meulen, = THE INDIVIDUALIST, 10/77. \par MONETARY DESPOTISM: Whoever controls the volume of money in any\- = country is absolute master of all industry and commerce. - James\- A. = Garfield, in George Seldes, The Great Quotations. \par MONETARY DESPOTISM: Why should the government have the power to = \-force its deteriorated paper money on us and to outlaw all\- = alternative sound currencies? - J. Z., n.d. \par MONETARY DESPOTISM: Would you want to continue legal tender for = \-printing press paper money and the restrictions on silver and\- gold = coin and bullion trading and pricing of one's products, \-services and = labour and outlaw trading by means of privately=20 \-issued banknotes? - J. Z., 8.9.75, 21.3.97. \par MONETARY DESPOTSM: That universal riddle of today: how to\- = increase the money supply and employment without raising prices.\- We = have swum in the tank, closely confined by state monetary\- control for = nearly a century and a half, bumping our noses\- violently at both the boom and slump ends of the tank, and we have\- = not yet guessed what the obstacle is. - Henry Meulen, THE = \-INDIVIDUALIST, 2/78, p 2. \par MONETARY ENLIGHTENMENT: It requires freedom to experiment in \-this = sphere - among voluntary payment communities. Once the money\- monopoly = and coercion and conception of legal are ended,\- officially, or ignored = and by-passed by a monetary revolution\- introducing monetary freedom, the monetary disfranchisment of the\- = population will soon end, issuers and acceptors will rapidly \-learn = from their mistakes and thus monetary enlightenment will begin or spread = rapidly. - J. Z., 3/97. \par MONETARY ENLIGHTENMENT: People who expect to be sufficiently = \-enlightened on money questions through the perusal of short\- = articles, leaflets and pamphlets only, will still have to learn \-much = more in this sphere. These sources are at best incomplete,=20 \-often misleading, if not quite wrong on many points. One should\- not = entrust e.g. one's car maintenance to a car mechanic or \-medical doctor = or plane pilot thus superficially trained. The\- consequence of lack of = knowledge, prejudice and dogm atism in the \-sphere of money are much more catastrophic to large = numbers of\- people. - J. Z., 16.3.96. \par MONETARY FREEDOM & BOOM & BUST: I have now no doubt whatever \-that = private enterprise, if it had not been prevented by\- government, could = and would long ago have provided the public with \-a choice of = currencies, and those that prevailed in the \- competition would have been essentially stable in value and would \-have = prevented both excessive stimulation of investment and the\- consequent = periods of contraction. - Hayek, Denationalisation of Money, 14. - = Compare my pamphl et: The Soft Option. - J. Z. \par MONETARY FREEDOM & CHEQUES : Have the supporters of state = \-currency considered the system of payment by cheque? It is today\- = open to anybody to offer a cheque in payment of goods, and the \- state rightly leaves the decision whether to accept the cheque in\- the = hands of the seller. Just as we say "Let the buyer beware "\-because the = variety of goods offered makes any state control\- impossible, so we say "Let the seller beware" when he is offered\- a cheque for his = goods; the circumstances of each sale, and the \-parties between whom = the sale is effected, are so various that \-state control of cheque = payment would be intolerable. - It is an \- aim of THE INDIVIDUALIST to urge that the principle applied to \-the use = of cheques should be applied to all money. - Henry \-Meulen, THE = INDIVIDUALIST, 12/77, p. 71. \par MONETARY FREEDOM & DEFLATION: The reader may not yet feel = \-reassured that, in the kind of competitive money system we are \-here = contemplating, a general deflation will be as impossible as \- a general inflation. Experience seems indeed to have shown that, in = conditions of severe uncertainty or alarm about the future, \-even very = low rates of interest cannot prevent a shrinking of a\- bank's outstanding loans. - Hayek, Denationalisation of Money,\- 76. - = Not only the constitutional, legal and juridical situation \-determines = monetary actions or non-actions or false actions but \- also the ignorance, prejudices, errors, false assumptions and\- lack of = interest which most people reveal towards monetary\- questions and = solutions, even when as a result, they experience catastrophic = consequences of monetary despotism. The nominal\- existence of e.g. freedom of press, does not mean, either, that\- all = will make use of it or that those who do so will do so most\- sensibly. = - For decades I have tried in vain to initiate an\- extensive monet ary freedom discussion and publishing effort by\- anarchists and = libertarians. Even these radicals do mostly evade \-the issue. - I am = guilty of it myself, having postponed the\- microfiche preparation of = another batch of Beckerath papers for\- many years already and by having given other freedom texts precedence = \-in my LMP efforts. - I have notes accumulated on monetary freedom for = decades - but have as yet failed to keyboard all of them in. \- Regarding Hayek's question on deflation: Even among advocates of\- = degrees of monetary freedom there exist all too often either no \-or not = enough sound notions on correct monetary issue techniques\- and rules and precautions. And these somewhat interested people\- form = only a small minority among a generally apathetic to \-antagonistic = crowd. Thus we should not expect the instant demise\- of all deflations = even should all constitutional, legal and\- juridical obstacles to monetary freedom be suddenly abolished. - \-J. = Z., 21.3.97. \par MONETARY FREEDOM & FREE EXCHANGE RATES: Remove protection of\- = official currency from competition. Secondly, I had regarded\- fixed = rates of exchange as necessary for the same reason for \-which I now = plead for completely free markets for all kinds of\- currency, namely that it was required to impose a very necessary = discipline or restraint on the agencies issuing money. Neither I, \-nor = apparently anybody else, then thought of the much more\- effective discipline that would operate if the providers of money = \-were deprived of the power of shielding the money they issued\- = against the rivalry of competing currencies. - Hayek,\- = Denationalisation of Money, 82. - Actually, Hayek was a latecomer=20 \-with his monetary freedom ideas. He had numerous predecessors \-that = he did not know or did not appreciate. All the relevant\- writings were = and are not readily accessible, not even tom him. - J. Z., 21.3.97. \par MONETARY FREEDOM & FREE LABOR: But it is to be kept constantly \-in = mind, that there can be no such thing as free labor, unless \-there be = freedom in money; that is, unless everybody, who can\- furhish money, shall be at liberty to do so. - Lysander Spooner, = \-Cleveland, Works I, 51/52. \par MONETARY FREEDOM & MONETARY RELIGION: The best defence against = \-any despotic monetary religion is full monetary freedom, in \-theory = and in practice. It would confine the effects of the\- religion of = monetary despotism to its voluntary followers - as\- long as it can retain any under this condition. - J. Z., 15.3.97. \par MONETARY FREEDOM & MUTUAL TOLERANCE FOR TOLERANT ACTIONS: Let us = \-agree to disagree and I beg you only to at least consider the = \-options and preconditions for monetary freedom and tolerance for\- various tolerantly practised monetary systems, including various = \-short-term account keeping, clearing and short-term credit \-systems, = all desired by and pleasing their supporters, at least \- for a while, while they can stand them, if they still do have flaws. In = the latter case one might be willing to give them a \-theoretical = warning and free advice but one should in no way \-continue to support = their suppression. - J. Z., 3/97. \par MONETARY FREEDOM & SOCIALIST MONEY SYSTEM: The foundation of all = \-freedom is freedom of exchange. The single most restraining = \-influence on freedom of exchange is our socialist money system. -\- = E.C. Riegel in "Flight from Inflation".=20 \par MONETARY FREEDOM & THE GOLD STANDARD: The case for the gold\- = standard is actually the case for market-originated commodity\- money, = and the case against government-regulated fiat money. It \- is simply an extension of the case for free markets which respect \-the = rights of man, and the case against controlled markets which\- violate = the rights of man. - Paul Stevens, THE FREEMAN, 1/75. -\- The rare = metals are not the only sui table commodities or \-commodity mixes to redeem money in, even though = most advocates of\- "the" gold standard can't perceive of anything else. = Most people\- do not want to buy weight units of gold every day but every day they = need or want some consumer goods and services. Any exchange medium or = clearing system \-that makes it easy for them to do pay for these goods = and services so, will suffice for them and \- would often even be preferred by them to payments in gold and = silver,\- as historical experience has often shown. Their preferred = tokens \- do not even have to be redeemable by the issuer in rare metals (as long = as, in case one does want gold, one can buy with them gold on a free = gold market, paying in one's other commodity tokens,\- i.e., if they = reckon in gol d weight units, usually at par with their \-nominal gold weight unit = value). - J. Z., 21.3.97. \par MONETARY FREEDOM : The circulation of more than one kind of money = \-has been, historically, the rule rather than the exception... - = \-Samuel Brittan, THE FINANCIAL TIMES, Nov. 20.75. \par MONETARY FREEDOM AND FREEDOM OF CONTRACTS: Spooner begins\- = CONSTITUTIONAL LAW RELATIVE TO CREDIT, CURRENCY AND BANKING \-(1843), = with the statement that "The Constitution of the U.S., (\-Art. 1, Sec. = 10), declares that 'No state shall pass any law\- impairing the obligation of contracts.'" On this basis alone, the = \-courts should overthrow all governmental interference \-with}{\f0\fs24 = }{\f0\fs24 currency, and allow a free banking system. - Charles\- = Chiveley, introduction to Spooner, Works, I/28. \par MONETARY FREEDOM AND FULL EMPLOYMENT: To end unemployment you = \-must have monetary freedom. When monetary freedom is legal, \-known, = appreciated and practised, mass unemployment cannot occur\- or persist. = - J. Z., n.d., 21.3.97. \par MONETARY FREEDOM VS. MONETARY DESPOTISM: What would be the = \-grossest fraud if an individual tried it has become the common = practice of governments - all quite legal because it is a\- governmental = monopoly. And the result is a runaway inflation that\- disrupts business activities and hinders rather than facilitates = \-trade. This is why government cannot be trusted with power to \- determine what traders should use as a medium of exchange. Let the = traders choose. - L. E. Read, THE FREEMAN, 1/75. - Not to \-speak of = deflations, mass unemployment and bankruptcies, \-stagflations and the = wars, revolutions, civil wars and terrorism\- caused by the governments' mismanagement of currencies. - J. Z.,\- = 21.3.97. \par MONETARY FREEDOM, CONFIDENCE AND GOVERNMENT CONTROLS: People = \-would learn to trust the new money only if they were confident it\- = was completely exempt from any government controls. - Hayek, \- Denationalisation of Money, 94. - Alas, this is only a future \-ideal. = Today even some of the advocates of monetary freedom have\- not yet = quite liberated themselves of all governmentalist and \-interventionist = notions.=20 \par MONETARY FREEDOM, INFLATION & POLITICIANS: There is only one way\- = to prevent inflation and that is to have a currency out of the \-reach = of politicians. - Anthony Fisher, The Case for Freedom, 61. \par MONETARY FREEDOM, MONEY AS WAREHOUSE RECEIPTS OR WARRANTS WITH\- = SHOP FOUNDATION: "But of course, there's no reason on earth why\- the = issuance of warehouse receipts should be a governmental\- function. Let = anyone do it who has a warehouse, and printing=20 \-press, and a sufficient stock of gold or silver or whatever the = \-receipt calls for. And let government intervene only to see that the = receipts are not fraudulent - counterfeit. - L. E. Read, THE\- FREEMAN, 1/75. - These "receipts", purchasing-vouchers, = goods-\-warrants, clearing certificates, tickets or token money need = not\- name any specific commodity. They will, mostly, offer, instead, = the wide\- variety of goods offer ed by a general store, or even a department\- store or a shopping = centre. And services might also be offered\- instead of goods. It is = rather absurd to propose that all of the \-millions of different goods = and services and all of the billions \- of daily transactions with them, ought all to be covered, to \-their = full exchange value, with their equivalent value in just a\- single = commodity or two, namely gold or silver. That fact does, \- naturally, not prevent the possibility of pricing out all goods \-and = services and debts in gold or silver weight units - but this can and = should be done \-without any obligation of the buyer or debtor to = deliver rare \- metal or the issuer or purchasing certificates to redeem them not\- in = his goods and services but, instead, in gold and silver, although he is = not a rare metal dealer. It would help if we could\- get the total figures, even under today's depressed and underdeveloped = conditions, of all monetary and clearing\- transactions in the world, of = a single day, and then could\- compare them with the current market = value of all the gold and \- silver accumulated and ready for action in all of the world. The\- = discrepancy would then become obvious and more and more people \-would = come to see that convertibility of any currency on the free \- are metal market is enough. It does not require for its \-stability = that 100 % redeemability, upon demand, at any time, in rare metal, is = promised by the issuer and that this promise is kept. Such a promise = would \- limit exchanges to those which could be so covered or it would \-amount = to empty sales or risky dealings in futures, while all \-payment = contracts could not possibly be settled in this way. The \- aim of all rational gold advocates should be only to deal in\- stable = gold weight values, or value standards possibly "as-good- as- \-gold or = even better. For this it is not necessary deal only in\- the metal gold. Millions of debtors and issuers can offer \-billions in = gold weight values of goods and services and they\- should be free to do = so, not bound to the limited transactions\- which gold coins and 100% = covered gold certificates would permit. \- Nor should we set limits,\- in stored and convertible rare metal = weights, at all issuing centres, to the inherently unlimited clearing = and \-non-cash exchange transactions that are possible and desired\- between human beings, seeing that clearing and non-cash}{\f0\fs24 = }{\f0\fs24 transactions neither require the possession nor the transfer = of\- any piece of rare metal in and from the hands of the trading = partners. - \-J. Z., 21.3.97. \par MONETARY FREEDOM, POVERTY, TYRANNY & SLAVERY: By establishing\- = freedom in currency and credit - and thereby freedom in industry\- and = commerce - end at once, and forever the tyranny that \-impoverishes and = enslaves them. - Lysander Spooner, New Banking\- System, 58. \par MONETARY FREEDOM, PROFIT & PUBLIC INTEREST: The issuing banks,\- = guided solely by their striving for gain, would thereby serve the = \-public interest better than any institution has ever done or\- could = do that supp osedly aimed at it. - Hayek, Denationalisation\- of Money, 78/79. \par MONETARY FREEDOM, SELF-INTEREST & BENEVOLENCE: He argues, in the = \-classic tradition of Adam Smith but with reference to the 20th\- = century, that money is no exception to the rule that self\- -interest would be a better motive than benevolence in producing \-good = results. - Arthur Seldon, in : Hayek: Denationalisation of Money, 3.=20 \par MONETARY FREEDOM, TUCKER & USURY: In addition to land monopoly\- = and patent-copyright monopoly, Tucker denounced the banking \-monopoly = privileges granted by the government. Being opposed to \-governmental = compulsion, he objected to the prohibition of any \- voluntary currency or arrangements that the people might make for = \-and among themselves. Free banking and free money meant free \-trade = carried into finance, unlimited competition (*) in the\- business of making money, and as a result the utter rout of i\-nferior = and usurious currencies by the virtues of the cheapest and \-the best. = While Tucker rejected the claim that one has a moral \- right to engage in usury, he did not advocate any method of\- abolishing = it save the removal of all restrictions preventing the \-free action of = natural principles. "To attempt to suppress usury \-by state is = outrageous because=20 tyrannical, and foolish because \-ineffectual." - Carl Watner on Tucker = in REASON 4/79. - *) and\- thereby self-limiting competition as in the = provision of other \-goods and services. - J. Z., 22.3.97. \par MONETARY FREEDOM, U.S. CONSTITUTION: But the powers of Congress\- = "to declare war" and "to coin money", are in reality exclusive\- ONLY AS AGAINST THE STATE GOVERNMENTS. They are not exclusive of any = NATURAL rights on the parts of individuals. The constitutional\- = prohibition upon individuals, to coin money, extends no farther\- than = to prohi bitions upon "COUNTERFEITING the securities and\- current coin of the = U.S." Provided individuals do not \-"COUNTERFEIT" OR IMITATE "the = securities or current coin of the \-U.S.," they have a perfect right, = and Congress have no power to \- prohibit them, to weigh and assay pieces of gold and silver, mark \-upon = them their weight and fineness, and sell them for whatever \-they will = bring, in competition with the coin of the U.S. - It\- was stated in Congress a few years since, by Mr. Rayner, I think,\- of = North Carolina, that in some parts of the gold region of that\- State, a = considerable portion of their local currency consisted\- of pieces of gold, weighed, assayed, and marked by an individual,\- in = whom the public had confidence. And this practice was as unquestionably = legal, as the sale of gold in any other way. It was\- no infringement of the rights of Congress." - Lysander Spooner,\- = Collected Works, I/18, in discussing the P.O. - - What good is\- any = constitution that can be so misunderstood or misinterpreted,\- for so = long? - J. Z., 21.3.97. \par MONETARY FREEDOM, UNEMPLOYMENT & SALES DIFFICULTIES: With the\- = realization of all monetary rights, most unemployment and sales\- = difficulties would disappear. - J. Z., 7.8.75. - One should think \- that this fact would give unemployed and businessmen a vested\- interest = in it. Alas, human beings are not as rational and just. \-At least not = yet. Let's try to lead these horses to the water. -\- J. Z., 21.3.97. \par MONETARY FREEDOM: "... monetary freedom we may have to retrieve = \-it slowly and painstakingly on the road back to freedom, which \-gives = it birth and meaning through inexorable economic law. This \- is why we seek no reform law, no restoration law, no conversion or\- = parity, no government cooperation, merely freedom. The road is short and = direct. And yet, depending on the resistance offered by\- popular ignorance and prejudice, by government greed and lust of\- = power, it may take us many years to traverse. - Sennholz,\- Inflation or = Gold Standard? 62. \par MONETARY FREEDOM: 1. That to make all traffic just and equal, it\- = is indispensable that, in each separate purchase and sale, the\- money = paid should be a BONA FIDE equivalent of the labor or \- property bought with it. - Dare you, or any other man, of common\- sense = and common honesty, dispute the truth of that proposition? \-If not, let = us consider that principle established. It will then \- serve as one of the necessary and infallible guides to the true = settlement of all the other questions that remain to be settled. \-- 2. = That so long as no force or fraud is practised by either \-party, the = parties themselves, to=20 each separate contract, have \-the sole, absolute, and unqualified right = to decide for \-themselves, WHAT MONEY, AND HOW MUCH OF IT, shall be = considered a\- BONA FIDE equivalent of the labor or property that is to = be\- exchanged for it. All this is necessarily implied in the NATURAL = \-right of men to make their own contracts, for buying and selling = \-their respective commodities. - Will you dispute the truth of\- that proposition? - 3. That any one man, who has an honest \-dollar, of = any kind whatsoever, has as perfect a right, as any \-other man can = have, to offer it in the market, in competition \-with any and all other = dollars, in exchange for such labor or\- property as may be in the market for sale. - Will you dispute the = \-truth of that proposition? - 4. That where no fraud is practised,\- = every person, who is mentally competent to make reasonable \- contracts, must be presumed to be as competent to judge of the \-value = of the money that is offered in the market, as he is to\- judge of the = value of all the other commodities that are bought \- and sold for money. - 5. That the free and open market, in which\- all = honest money and all honest commodities are free to be given \-and = received in exchange for each other, is the true, final,\- absolute, and = only test of the true and natural market value of\- all money, as of all the other commodities = that are bought and\- sold for money. - Will you dispute the truth of = that proposition? \-- 6. That any prohibition, by a government, of any = such kind or \- amount of money - provided it be honest in itself - as the \-parties to = contracts may voluntarily agree to give and receive in\- exchange for = labor or property, is a palpable violation of their \- natural right to make their own contracts, and to buy and sell \-their = labor and property on such terms as they may find to be \-necessary for = the supply of their wants, or may think most \-beneficial to their = interests. - Will you dispute the truth of \- that proposition? - 7. That any government, that licenses a small = \-amount of an article of such universal necessity as money, and\- that = gives the control of it into a few hands, selected by\- itself, and then = prohibits any and all other money - that is=20 \-intrinsically honest and valuable - palpably violates all other = \-men's natural right to make their own contracts, and infallibly\- = proves its purpose to be to enable the few holders of the \- licensed money to rob all other persons in the prices of their \-labor = and property. - Will you dispute the truth of that\- proposition? - Are = not all these propositions so self-evident, or\- so easily demonstrate, = that they cannot, with any reason, be\- disputed? - If you feel competent to show the falsehood of any\-one of = them, I hope you will attempt the task. - Lysander Spooner, Cleaveland, = Works I, 37/38. \par MONETARY FREEDOM: A free market economy cannot permanently\- = operate on a politically manipulated paper money standard. Free\-men = need a market-selected money. Under present conditions, this\- means a = gold standard. - Percy L. Greaves, Understanding the=20 \-Dollar Crisis, quoted from Hazlitt's review in THE FREEMAN, 1/74. \par MONETARY FREEDOM: A money deliberately controlled in supply by \-an = agency whose self-interest forced it to satisfy the wishes of\- the = USERS might be the best. A money regulated to satisfy the \- demands of group interests is bound to be the worst possible. -\- Hayek, = Denationalisation of Money, 25. \par MONETARY FREEDOM: Abolish state-issued currencies, and let the\- = commercial banks issue notes in response to the demand for money.\-- = Henry Meulen, THE INDIVIDUALIST, 2/75. - Not only the\- commercial banks = - every potential issuer! - J. Z., 21.3.97. \par MONETARY FREEDOM: All over the world, government paper now forms\- = 120 national fiat standards that are managed and depreciated at\- will. = - The decline of monetary freedom and the concomitant rise\- of = government power over money gave birth to our age of \- inflation. Step by step, government assumed control over money,\- not = only as an important source of revenue but also as a vital \-command = post over our economy. The result is continuinig \- inflation. Only monetary freedom can impart stability. - Hans F.\- = Sennholz, Inflation or Gold Standard? \par MONETARY FREEDOM: All plans to make money stable are\- = contradictory to human nature and dangerous to individual \-freedom, as = they would call on government to enforce the \-impossible. The yearning = for "stable money", therefore, is\- forever futile unless it means to want honest money that is free\- from = the political processes of public treasuries and central \-banks. The = best we can hope for is monetary freedom that embodies \- the freedom of contract and choice of money. In freedom, the \-American = people once again could express their preference for \-gold and silver = coins over depreciating political fiat. - Hans F.\- Sennholz, THE = FREEMAN, 6/75, p341. \par MONETARY FREEDOM: Allow everyone to produce, offer, accept or\- = reject tokens or coins or certificates, giving or taking them at \-any = value they like or have committed themselves to. - J.Z,\- 7.6.79. \par MONETARY FREEDOM: Anyone could open a bank under Spooner's = \-system. "It leaves", he says, "the business of furnishing a \-currency = open to free competition." - Charles Chiveley,\- introduction to = Spooner, I/27. \par MONETARY FREEDOM: As money and credit constitute the mos\-t = abstract features of free market trading, it is no wonder that \-they = are even less understood than other simple market phenomena.\-=20 They involve all and are thus understood by hardly any. - J. = Z.,\-24.2.79. - But seeing how important they are and that everyone's = \-interests are objectively involved, at least a number of\- committed = scholars should get it right between them, document=20 \-monetary freedom options sufficiently and popularize them. -\- J. Z., = 22.3.97. \par MONETARY FREEDOM: As THE INDIVIDUALIST has tirelessly insisted,\- = industry is fully capable of supplying itself with a sound and = \-flexible monetary system, if only the State will not interfere. -\- Henry Meulen, THE INDIVIDUALIST, 12/74. - Not only industry! -\-J. Z., = 21.3.97. \par MONETARY FREEDOM: As we trust the grocer to furnish us with = \-pounds of tea, and the baker to send us loaves of bread, so we \-might = trust Heaton and Sons, or some of the other enterprising \-firms of = Birmingham, to supply us with sovereigns and shillings \- at their own risk and profit. - W. S. Jevons version of Herbert\- = Spencer's proposal, are quoted by Hayek in Denationalisation of \-Money, = 34. \par MONETARY FREEDOM: Both, the present exclusive or privilege\-d = deposit and credit systems and central banks, their forced and\- = exclusive paper money issues, and the subordination to and\- dependency of the other "private" banks upon the central-bank-system, = the legislation on this system, statutory authorities \-and their = regulations and licensing, ought to be replaced, fully,\- at least for exterritorially autonomous communities of volunteers\- and = their monetary and financial systems and, within the\- supposedly = democratic, free and representative system, challenged by competitive = alternatives, too, so that they could continu \-ously upon their merits, if any. See: CENTRAL BANKING, MONETARY\- = DESPOTISM. - J. Z., 3/97. \par MONETARY FREEDOM: But the superstition that it is necessary for\- = government (usually called the 'state' to make it sound better) \-which = could not exist without it, probably originated in the \-naive belief = that s uch a tool as money must have been 'invented'\- and given to us by some = original inventor This belief has been\- wholly displaced by our = understanding of the spontaneous\- generation of such undesigned = institutions by a process of social\- evolution of which money has since become the prime paradigm (\-law, = language and morals being the other main instances). ... -\-Hayek, = Denationalisation of Money.=20 \par MONETARY FREEDOM: But, while governments have never used their = \-power to provide a decent money for any length of time, and have = \-refrained from grossly abusing it only when they were under such\- a = discipline as the gold standar d imposed, the reason that should\- make us refuse any longer to = tolerate this irresponsibility of\- government is that we know today = that it is possible to control \-the quantity of a currency so as to = prevent significant\- fluctuations in its purchasing power. - Hayek, Denationalisation\- of = Money, 29. - I am not certain that Hayek knew enough about\- alternative = monetary controls. He certainly didn't know enough \- about Prussian monetary history, which had its honest years, even\- = decades, without a legal tender paper money, although many paper \-money = issues were made by it. - J. Z., 21.3.97. \par MONETARY FREEDOM: Competition would provide better money than\- = would government. I believe we can do much better than gold ever \-made = possible. Governments cannot do better. Free enterprise,\- i.e. the = institutions that would emerge from a process of\- competition in providing good money, no doubt would. There would \-in = that event also be no need to encomber the money supply with \-the = complicated and expensive provision for convertibility which \- was necessary to secure the automatic operation of the gold\- standard = and which made it appear as at least more practicable\- than what would = ideally seem much more suitable - a commodity \-reserve standard.... - = Hayek, Denationalisation of Money, 83. \par MONETARY FREEDOM: Completely free private banking has never yet\- = existed in any country. It was always held back by laws, customs\- & = prejudices. Thus we cannot go back to it but only forward to\- it. - J. = Z., 4.6.82. \par MONETARY FREEDOM: Contemplate the abolition of the monopoly of\- = the issue of money and the free admission of competition into the\- = business of providing currency. - Hayek, Denationalisation of \-Money, = 70. \par MONETARY FREEDOM: Denationalize the money supply. - J. Z., 1973. \par MONETARY FREEDOM: Don't rely on any money pope. Make up your own\- = mind, make or, rather, issue your own money, your own value standard, as = you\- make up your own religion. - J. Z., 27.11.74. \par MONETARY FREEDOM: End the socialisation of the money supply and\- = the value standard. - J. Z., 73, 21.3.97. \par MONETARY FREEDOM: Every producer and trader is to be free to = \-issue money based on his products or services, alone or in\- = association with others. - J. Z., 75, 21.3.97. \par MONETARY FREEDOM: Every seller knows that it is essential that = \-the money he accepts shall be acceptable to other sellers when he \-in = turn wishes to buy. If men are free to experiment, we may be \- sure that the most suitable form of money will be invented, just \-as = men's freedom to invent produced that marvellous thing, the \-aeroplane. = - Henry Meulen, THE INDIVIDUALIST, 10/77. - In spite\- of such utterances, he was not an enlightened and thus uncompromising = opponent of legal tender. - J. Z., 22.3.97. \par MONETARY FREEDOM: Exclude politics from the issue of money. -\- = Henry Meulen, THE INDIVIDUALIST, 2/73. \par MONETARY FREEDOM: Finally, the people who think about such\- things = will recognize that freedom of note issue is essential to \-promote = competition in banking; and free competition in banking\- is essential = to free production and exchange. - Henry Meulen, THE \-INDIVIDUALIST, 8/76. \par MONETARY FREEDOM: Free Money Is Sound Money, - Hans. F.\- Sennholz, = heading, in THE FREEMAN, 6/75. \par MONETARY FREEDOM: Free money requires free pricing and free = \-pricing requires monetary freedom. - J. Z., 15.9.75. \par MONETARY FREEDOM: Free yourself of coercively manipulated money\- = which is either inflated or deflated and, sometimes, both\- = simultaneously. - J. Z., 12.10.74, 1978, 21.3.97. \par MONETARY FREEDOM: Freedom in monetary matters means no political\- = manipulation of our medium of exchange. - L. E. Read, THE FREEMAN,\- = 8/73. \par MONETARY FREEDOM: Freedom includes the right to issue one's own\- = money if others will accept it. - Mr. W.A. Dowe, quoted in GOOD\- = GOVERNMENT, 12/78, p5. \par MONETARY FREEDOM: Freedom of note issue needs no help from the\- = State. The notes from the new banks will make their own way into\- = circulation. People who get cheaper loans from new banks will try \- to get those notes into circulation. Wage-earners may be offered\- = higher wages if they are willing to accept the new notes in\- payment of = wages. They will shop in those stores that are willing\- to accept the new notes. - Henry Meulen, THE INDIVIDUALIST, 8/76. \par MONETARY FREEDOM: Government has no more responsibility for an\- = honest money than for an honest measure of length. It just ought \-to = leave both alone. - J. Z., n.d. \par MONETARY FREEDOM: Hardly ever do the advocates of free \-capitalism = realize how utterly their ideal was frustrated at the \-moment the State = assumed control of the monetary system. There is \- to-day only one prominent liberal theorist consistent enough to = \-advocate free, uncontrolled competition among banks in the\- creation = of money. (Mises, Theory of Money, 1911.) Mises, whose\- intellectual influence on modern neo-liberalism was very strong, - has = made hardly one proselyte for that extreme conclusion. Yet\- without it = the ideal of the State-free economy collapses. -\- Gustav Stolper, This = Age of Fable, 64. - Mises was not the \- radical advocate of full monetary freedom that he is often made\- out = to be. He was still stuck on gold convertibility by the\- issuer and = wanted free banking only for such banks. - J. Z.,\-22.3.97. \par MONETARY FREEDOM: Have you ever considered repealing the legal = \-tender of the Australian currency and of the Reserve Bank's\- = privileges, and the competitive issue of exchange media, using\- any agreeable standard, so that good money will be free to drive\- out = the bad? - J. Z., 12/75, 21.3.97. \par MONETARY FREEDOM: He is arguing that th attempt for the past 50\- = years to depend on benevolence in government to manage money has\- = failed and that the solution must lie in the self-interest of \-monetary = agen cies that will suffer by losing their livelihood if \-they do not supply = currencies that users will find dependable and\- stable. - Arthur = Seldon, introduction to Hayek, Denationalisation\- of Money, 5. \par MONETARY FREEDOM: How more paper money, which already is = \-unacceptable in international trade, will buy us friends abroad\- or = keep us warm at home is a puzzle. Have we not had sufficient = \-experience with the bad money government provides, and the\- excessive waste of resources under government control, to get the = \-message and relay it to Congress: "Stop the waste and leave us to\- = our own choices in the world market. Let us buy and sell on our \- own terms in the money of our choice." - Paul Poirot, THE\- FREEMAN, = 4/75. \par MONETARY FREEDOM: I am accustomed to pay men back in their own\- = coin. (Ich bin gewohnt in der Muenze wiederzuzahlen in der man \-mich = bezahlt.) - Bismarck, Speech to the Ultramontanes, 1870. -\- This is a = sound reflux principle. Having to anticipate it, \- issuers will also tend to make their issues self-limiting, i.e.,\- = sound. Look at it in another way: In their own self-interest all = \-honest men will tend to limit their own obligations or IOUs to\- those they can fulfil. Dishonest men might try to spread\- dishonest = money but their dishonesty is more likely to be fast discovered in this = respect, than in any other. All the dispersed\- knowledge of all their = actual and potential acceptors will act\- against them and a clearing house for their notes and all other \-local = issues, would discover over-issues within hours.\- Communications are = now that fast that he could be charged within\- hours, before = competitive courts, with fraud and that he could\- lose, in consequence, all his property and carry moreover an = \-indemnification burden whose payment could also be enforced upon\- = him. - J. Z., 22.3.97.=20 \par MONETARY FREEDOM: I believe that if money is to be useful to = \-traders as a medium of exchange then the decision as to what\- shall = serve as money must be worked out by traders in the market,\- VOLUNTARILY, rather than by government edict. - L. E. Read, THE = \-FREEMAN, Jan. 75. - Even somewhat depreciated governmental paper = money, up to\- a certain degree of inflation, is still useful to traders = as a \- means of exchange - when this is the only monetary option left to = \-them. But it is not optimally useful and it ceases to be a good = \-enough standard of value as soon as any degree of persistent\- = depreciation occurs. Compare what Keynesian slow inflations have\- done to our = currencies in recent decades. Otherwise the statement \-is correct. - J. = Z., 22.3.97. \par MONETARY FREEDOM: If government control of money is unavoidable\-, = Professor Hayek thinks a gold system better than any other; but\- he = maintains that even gold would be found less dependable than\- competing paper currencies whose value would be maintained more \-or = less stable because their issuers would have a strong inducement to = limit their quantity or lose their business. -\- Arthur Seldon, = introducing Hayek's Denationalisation of Money, 4.\- - Private competing monies, not being legal tender, would be\- = market-rated and refusable. They would be market-rated against\- value = standards which potential acceptors trust. Any currency not standing at = par with its=20 value standard, or very close to it,\- would be widely refuse and any = depreciated monies could and\- should be presented to their issuers, as = soon as possible, at \- their face value. That they have usually no interest to issue their = currency at a considerable discount \-and thus to confine their issues = to a very few remaining voluntary acceptors, can \-be judged by an = extreme and hypothetical example. How many would=20 \-accept at all a private currency that is already 90% depreciated\- in = general circulation? And why would the issuer go on issuing \-it, if he = could still find acceptors, while getting only 10% of its\- face value in exchange? At the next moment he would have to \-accept = any quantity of his own depreciated notes at their face \-value. For = holders of his notes the forced sale of all his \-property to them, for = his notes, would be bargains. For him they\- would mean ruin. After any considerable discount of his notes \-few = people would ever touch them again - if they are interested\- mainly in = getting readily usable means of exchange. Another point\- cannot be stressed too much: When exchange medium and value\- standard = are clearly separated in a note then any multiplication \-of the note = does perhaps depreciate the value of the notes but it\- cannot = depreciate the val ue of its sound value standard. Nobody \-is forced to reckon only in his = depreciated notes, at their par value, or to use them \-at all and sound = value standard expression of wages and prices \- and other contracts can go on undisturbed. - J. Z., 21.3.97. - E ven such an over-issuer (assuming he would have been able to = considerably over-issue, under full monetary freedom conditions and = their appreciation by the public) would have to continue to price his = goods, services, wages and other contracts in a sound va l ue standard or no one would be prepared to deal with him. And, however = depreciated his notes would have become, he would still have to accept = them at par for everything he owns. Except, presumably, his own person. = He would not be sold as a slave. But ther e would be a long term lean on his future earnings! - J.Z., 29.8.02. \par MONETARY FREEDOM: If individuals are to have their full freedom = \-to make exchanges, they must also be free to determine the media \-in = which their exchanges shall be made. Throughout history, gold \- has been the commodity chosen by free men to accomplish this end. \-- = Robert G. Anderson, THE FREEMAN, 1/75. - If A. had bothered to study = monetary history a bit more, then he would have discovered \-that = silver, copper, platinum, bronze and nume rous other means,\- including wooden tablets, leather strips, knots, = stones, shells, \-a vast variety of things and representations, has = served people \-as money - more or less well. - J. Z., 21.3.97. \par MONETARY FREEDOM: If the use of several concurrent currencies is = \-to be seriously considered for immediate application in a limited\- = area, it is evidently desirable to investigate the consequences \-of a = general application of the pr inciple on which this proposal \-is based. If we are to contemplate = abolishing the exclusive use\- within each national territory of a = single national currency \- issued by the government and to admit on equal footing the currencies = issued by other governments, the question at once\- arises whether it = would not be equally desirable to do away \-altogether with the monopoly = of government supplying money and to \- allow private enterprise to supply the public with other media of = \-exchange it may prefer. - Hayek, Denationalisation of Money, 20. \par MONETARY FREEDOM: In a natural economy each producer produces\- his = own money. The issue of money is not a function of the State. \-The = economic body can make MUCH money much more easily than all \- the restraints in the world. - Dr. H.G. Pearce. Say probably had this = idea and practice in mind when he worded his famous "law", namely that = good and services produce their own currency. - J.Z., 29.8.02. \par MONETARY FREEDOM: In effect, Professor Hayek is arguing that\- = money is no different from other commodities and that it would be\- = better supplied by competition from private issuers than by a\- monopoly of government. - Arthur Seldon, in Hayek's Denationalisation = of Money. \par MONETARY FREEDOM: In order to take from government the power to = \-manipulate the currency and credit there is one simple = \-constitutional right which must be conferred on all citizens: the = \-right to hold assets in the currency and credit instruments of=20 \-their own choice, with absolutely no restriction upon what that\- = currency or those credit instruments may be. - H. S. Ferns, The\- = Disease of Governments, 121. - Not only financial freedom in form\- of investments in various foreign currencies and securities,\- should = be expanded, but freedom to issue any financial securities \-- that are = not fraudulent and any exchange media that are \-optional and honest and = to use or agree upon=20 any value standard. \-- Why have so many voices for monetary freedom = have had almost no\- effect on the mass media, public opinion and most = academic \-economists so far? - Their false views on money do not have = \- legal tender but their authority is still unquestioned by popular\- = opinion. The priests of the monetary religion of the people do \-still = rule - with stupid slogans like e.g.: "Buy\-Australian!" - J. Z., = 21.3.97. \par MONETARY FREEDOM: In sum, the belief that the creation and\- = management of a monetary system ought to be the prerogative of\- the = State - i.e., of the politicians in power - is not only false \- but harmful. For the real solution is just the opposite. It is to\-get = government, as far as possible, out of the monetary sphere. - \-Hazlitt, = THE FREEMAN, 11/75, p. 670. - Why are so many old\- arguments not settled at all but indefinitely adjourned, for\- years, = decades and even centuries? One extreme case, the "free\- will" debate, = has been going on for over 2,000 years. Should we \- not by now get rather impatient and systematically tackle such\- = controversies? In this flow chart discussions, collections of\- = definitions, encyclopaedias of the best refutations of popular \-errors = myths and prejudices, could greatly help - and so could\- the Internet, if it = were sufficiently mobilised for such \-discussions. It is an extra = difficult riddle that the money system \-has not been thoroughly = explored, with all the old myths\- exploded, for all people except government crooks and dishonest\- = debtors have a vested interest in sound money. And even the \-debtors = would benefit greatly from the avoidance of any\- deflation. - J. Z., = 21.3.97. \par MONETARY FREEDOM: Individualists insist on freedom of demand and\- = supply in goods and services because it is beyond the power of\- any = body of men to decide what shall be produced, how much, when \- and where. It seems therefore reasonable that since every\- exchange of = goods and services involves the use of money,\- exchangers should be = free to use any money that both parties are\- willing to use. Only thus can we be sure that money will appear where = and whenever it is needed for exchange. - Henry Meulen THE\- = INDIVIDUALIST, 10/77. \par MONETARY FREEDOM: It is essential that we be permitted to make\- = contracts with each other payable in gold, or in the dollar value\- of = gold. Whether this is permissible now under our present laws\- is a grave question. But there is no doubt that in a free society = \-contracts made in gold should be just as permissible as contracts = \-made in any other commodity. This - plus the ownership of gold -\- would act as a brake on the insatiable appetite of government for more = and more printed paper money. It would be a most important \-aid in the = fight against inflation. - Lawrence Fertig, THE \- FREEMAN, 3/75. - Legal tender as a pre-condition for inflation is\- not = even mentioned here! - J. Z., 21.3.97. \par MONETARY FREEDOM: It is my thesis that the public would select\- = from a number of competing private currencies a better money than\- = government provides. - Hayek, Denationalisation of Money, 55. - \-See = Gresham's Law. \par MONETARY FREEDOM: It would therefore now be possible, if it were = \-permitted, to have a variety of essentially different monies. \- They could represent not merely different quantities of the same metal, = but also different abstract units fluctuating in their\- value = relatively to one another. In the same way, we could have\- currencies circulating concurrently. - Hayek, Denationalisation \-of = Money, 25. \par MONETARY FREEDOM: It would therefore now be possible, if it\- were = permitted, to have a variety of essentially different \-monies. They = could represent not merely different quantities of\- the same metal, but = also different abstract units fluctuating in\- their value relatively to one another. In the same way, we could\- have = currencies circulating concurrently... - Hayek, \-Denationalisation of = Money, 25. - Such practices have long \-existed, although mostly only on = a limited scale and were, \- nevertheless, largely ignored by scholars like Hayek. During\- = depressions and inflations in this century alone there were more = \-issues of emergency monies, not only by public authorities but \- also by private or cooperative issuers, than anyone has so far\- been = able to document fully. Some catalogues of coin and money \-collectors = come close to such documentation but most of their\- authors would deny that their listings are already complete. -\- J. Z., = 21.3.97. \par MONETARY FREEDOM: Leave all creative activities, including the\- = medium of exchange - money - to the wisdom of the market. Do this or our = country will end up with a five-cent thousand-dollar bill. \-- L. E. = Read, THE FREEMAN, 1/75. \par MONETARY FREEDOM: Leave the decisions about money to the market. = \-- L. E. Read, THE FREEMAN, 1/75. \par MONETARY FREEDOM: Leave the decisions about money to the market. = \-Limit the government to its proper function of policing the \-market = and punishing traders who cheat or rob or wilfully injure\- other peaceful persons. - L. E. Read, THE FREEMAN, 1/75. - Why\- assume = that the government can and will fulfil this task better \-than any = others that have been surrendered to it? - J. Z.,\-22.3.97. \par MONETARY FREEDOM: Let buyers and sellers choose what to use for\- = money; let governments prevents fraud. - L. E. Read, The Love of = Liberty, p. viii. - Let the worst fraud of all pretend that he \-could = and would prevent fraud? - J. Z., 21.3.97. \par MONETARY FREEDOM: Let buyers and sellers choose what to use for = \-money; let government prevent fraud. - L. E. Read, The Love of = \-Liberty, ch. 6. - Since governments were the worst defrauders in = \-this sphere it would be tragi-comic to entrust t hem with this \-role. - J. Z., 21.3.97. \par MONETARY FREEDOM: Let the good money drive out the bad. - As it\- = would inevitably under competitive issue for private money tokens\- = subject to a free market rate. - J. Z., n.d. \par MONETARY FREEDOM: Let those who exchange goods and services (\-and = that, one way or another, is nearly all of us) choose and\- use as money = the most trustworthy marketable item available. -\- Ralph Bradford, THE = FREEMAN, Aug. 74. - Even that should not \- become an exclusive currency, even if it is favoured by 99% of\- the = people. Each marketable item favoured by some can serve to\- conduct or = promote their exchanges, at least until they adopt\- something they think is even better. Neither experts nor laws nor = \-majority votes should be authorised to decide these matters for = \-them. Freedom of contract. Freedom to exchange. Monetary freedom.\- = Not just the monetary free dom practice that some people think\- would be the best for all. - J. = Z., 21.3.97. \par MONETARY FREEDOM: Means of payment should not be pursued and\- = struggled for - but issued instead, so extensively and so soundly \-that = everyone who has goods and services for sale, that others \- are prepared to exchange for their goods and services, will have \-no = difficulty to sell them for soundly issued exchange media - \-that are = immediately redeemable by the issuers in their goods and\- services. - = J. Z., n.d. & 22.3.97. \par MONETARY FREEDOM: Monetary freedom does not permit inflation but\- = does allow the issue of as much private currency as the market = \-requires for its equilibrium, i.e. to bring about all desired and \- possible exchanges at market rates. - J. Z., 25.10.76, 31.7.78, = \-21.3.97. \par MONETARY FREEDOM: Monetary freedom requires the repeal of all\- = laws restricting money issues, clearing, credit and value\- standards = used. - J. Z., 74. \par MONETARY FREEDOM: Money is usually defined as THE generally = \-acceptable medium of exchange, but there is no reason why within\- a = given community there should be only one kind of money that is\- generally (or at least widely) accepted. In the Austrian border \-town, = in which I have been living for the past few years, \-shopkeepers and = most other business people will usually accept\- D-Marks as readily as = Austrian schillings, and only the law\- prevents German banks in Salzburg from doing their business in = \-D-Marks in the same manner as they do 10 miles away on the German = \-side of the border. The same is true of hundreds of other tourist\- = centres in Austria frequented mainly by Germans. In most of them\- dollars will also be accepted nearly as = readily as D-Marks. I\- believe the situation is not very different on = both sides of long\- stretches of the border between the U.S. and = Canada, and probably\- along many other frontiers. - Hayek, Denationalisation of Money, \-46. \par MONETARY FREEDOM: No unemployment and no inflation - long before\- = next x-mas - if only we adopt monetary freedom. - J. Z., 9/75. \par MONETARY FREEDOM: Once American citizens are properly depressed = \-over government waste through monetary manipulation, they may\- then = get the message to Congress to let money be whatever the \- market says it is. Then, if government has need for resources,\- let = them be taken directly and openly from owners - not through a}{\f0\fs24 = }{\f0\fs24 mystifying monetary procedure. - Paul Poirot, THE FREEMAN, = 4/75. \par MONETARY FREEDOM: Only because there was active trading on the = \-currency exchange would the issuing banks be warned to take the = \-required action in time. Only because the frontiers were open to \- the movement of currency and capital would there be assurance of\- no = collusion between local institutions to mismanage the local currency. = And only because there were free commodity markets\- would stable = average prices mean that the process of adapting \- supply to demand was functioning. - Hayek, Denationalisation of\- = Money, 94. \par MONETARY FREEDOM: Only because they were under the sharp control\- = of competition could the private banks be trusted to keep their \-money = stable. - Hayek, Denationalisation of Money, 94. \par MONETARY FREEDOM: Our initial mistake was to allow governments\- to = issue paper money at all. Notes should be issued only by\- commercial = banks, whose issues are checked daily by the Clearing \-House; and these = notes should be convertible into gold on demand\- at the issuing bank at the gold price ruling on the = previous day\- in the bullion market. Freedom of note issue was working = well \-when the government abolished it in 1844. What was not working\- well then, and what never has worked well, was a fixed gold\- price, = and the 1844 Act did not change this. - Henry Meulen, THE\- = INDIVIDUALIST, 12/75. - He had fixed ideas on the fixed gold \-price and = on convertibility by the issuer. - J. Z., 22.3.97. \par MONETARY FREEDOM: Our opposition to a common (state) currency = \-relies on the principle that, just as producers should be free to = \-make and exchange their products, so they should be free to\- choose the method of exchange. - Henry Meulen, THE INDIVIDUALIST,\- = 12/77, p70. \par MONETARY FREEDOM: Our wealth and our liberty are based on = \-"plugging in" to a flowing, monetary current which becomes\- = increasingly easy to siphon off. We depend absolutely on the \-integrity = of the medium and on free, uninhibited exchange. - L. E.\- Read, Deeper than you Think, page x.=20 \par MONETARY FREEDOM: Reduce or remove the power of politicians over = \-the supply of money. - Arthur Seldon, introducing: Hayek, = \-Denationalisation of Money, 4/5. \par MONETARY FREEDOM: Repeal Legal Tender and the monopoly of the = \-Central Banks. - J. Z., n.d., ca. 1975. \par MONETARY FREEDOM: Seeing the addiction to system gambling, = \-snowball or chain letter system (pyramid scheme or multi-level\- = marketing), welfare statism, doubtful guaranties and insurance = \-schemes, the little interest that exists in monetary and credit \- and clearing theories and practices, the frauds that numerous\- = finance companies and banks do get away with and what we allow or = \-politicians to do to us, at our expense, even in future, under \- full monetary freedom, a lot of fraud and deception will go on, = \-although usually on a much smaller scale and confined largely to = \-voluntary or foolish victims. - J. Z., 29.3.82, 21.3.97. \par MONETARY FREEDOM: Spooner's number one selling point was that,\- = "The system would furnish, at all times, an abundant currency"... \-Free = competition would increase the number of banks and, thereby, \- the amount of money in circulation. Almost until the 20th\- century, the = U.S. suffered (as the colonies had) from a lack of \-money. There were = never sufficient funds for all the needs of the \-country. Spooner's = system was intended to remedy that need. - \-Charles Chiveley, introduction to Spooner, I, 25. \par MONETARY FREEDOM: The commercial banks should issue their own = notes. There is no more reason for the government to fix the \-volume of = notes issued than to fix the volume of linen washed by\- housewives on = Mondays. - Henry Meulen, THE INDIVIDUALIST, 6/7 7, p.\-33. \par MONETARY FREEDOM: The fact that freedom of note issue is useful\- = to both buyers and sellers is enough to ensure that a suitable \-note = will be introduced. It is useful to buyers because it\- enables a man more readily to convert his reputation into buying\- = power; and it is useful to sellers because it provides for more\- = automatic sales of their goods. - Henry Meulen, THE\- INDIVIDUALIST, = 12/77, p 71.=20 \par MONETARY FREEDOM: The issue of money is not a state prerogative.\- = - Dr. H. G. Pearce. \par MONETARY FREEDOM: The medium of exchange should be governed by\- = possible turnover and not the turnover by the available means of\- = exchange. - Ulrich von Beckerath, in PP 9, p. 83. \par MONETARY FREEDOM: The monetization of commercial credit would be\- = like a wagon way through the air. - Adam Smith, in Wealth of \-Nations, = according to Dr. H.G. Pearce. \par MONETARY FREEDOM: The money issue must be left to the market. -\-J. = Z., 12.6.73. \par MONETARY FREEDOM: The money supply needs no regulation; it can \-be = left to the free market in which individuals determine the\- demand for = and supply of money. - Hans F. Sennholz, THE FREEMAN,\- 9/73. \par MONETARY FREEDOM: The monies of monetary freedom have free \-market = rates, those of monetary despotism have legal tender. -\- J. Z., 1.6.76, = 21.3.97. \par MONETARY FREEDOM: The people turn to privately issued monies, and = \-the private sector takes over from the government the function of\- = issuing currency. This is truly an exciting possibility. As money\- is the basis of all economic activity, a free market in money \-could = prove the basis of a truly free society. - Mark Tier,\- REASON 10/78.=20 \par MONETARY FREEDOM: The possibility of free competition between a = \-multiplicity of issuing institutions and the complete freedom of\- all = movements of currency and capital across frontiers are\- equally = essential to the success of the scheme. Any hesitant \- approach by a GRADUAL relaxation of the existing monopoly of \-issue = would be certain to make it fail. - Hayek,\- Denationalisation of Money, = 94. - Contrary to this I hold that\- even from a limited monetary = freedom experiment, in a village or\- small town, monetary freedom could spread and become complete, \-based = on its own inherent strengths and tendencies, if only it is\- not = coercively suppressed. Moreover, one can make it as difficult\- as = possible for a govern ment to suppress it. The monetary freedom \-might e.g. be practised by = people already up in arms against a\- government. It might be practised = during a galloping inflation \-or under mass unemployment shortly before = an election and be so\- fully and rapidly effective, at least locally, that the going-out = rulers and the \-coming-up politicians would not dare to suppress these = \- experiments but rather jump on the band wagon. Revolutionaries and = freedom fighters might e.g. properly finance their revolution\- through = their own monetary and financial issues. Free trade can\- also be practised on a limited scale in free trade industrial\- zones = and duty free shops for a limited clientele. Numerous \-monetary = freedom experiments have already happened and are still \-happeni ng in spite of monetary despotism. But most are still full\- of = theoretical and practical flaws and few of them have so far \-been fully = recorded and correctly examined and evaluated. - J. Z.,\-21.3.97. \par MONETARY FREEDOM: There certainly can be and has been money,\- even = very satisfactory money, without government doing anything \-about it, = though it has rarely been allowed to exist for long. - \-Hayek, = Denationalisation of Money, 31. \par MONETARY FREEDOM: There is no good reason why an exchange medium\- = or a value standard should be a monopoly good (or why they \-should be = coercive) and every economic and moral reason to leave\- their production and usage free, i.e. confine them to individual = \-acceptance, discounting or refusal. - J. Z., 16.5.78. \par MONETARY FREEDOM: There is only one answer to monetary chaos and\- = monetary despotism: monetary freedom. - J. Z., 5.3.75. \par MONETARY FREEDOM: To provide a sound and honest currency is not = \-impossible, it's merely illegal. - J. Z., 29.7.75. - Not even one = \-but several sound and honest currencies can be privately or\- cooperatively provided and peacefully coexist in free market\- = competition with each other - as long and to the extent that \-their = voluntary users find them useful for their transactions. -\- J. Z., = 21.3.97. \par MONETARY FREEDOM: Under free competition in the supply of = \-exchange media everyone who offers them must endeavour, in his own = \-interest, to keep them stable. Otherwise he will be pushed out of \- the market by his competitors, particularly through the public \-itself. = - K.H.Z. Solneman (Kurt H. Zube), Drei Kernforderungen\- zur = Vermoegensverteilung, S. 16. \par MONETARY FREEDOM: USA loudly protests that every man should be\- = free to choose what goods he will make and at what price he will \-offer = them, what work he will do, when he will work, and for what\- wages. But what is the use of all this freedom if the State \-tightly = controls the means of exchanging the goods he makes - the \-money he = shall use? Men work generally only in order to exchange \- the results of their labour. Surely, freedom of choice in the\- means of = exchanging goods is just as important as freedom to \-offer goods and = services. Yet governments everywhere, including\- the government of "The = Land of the Free", n ot only monopolise the \-issue of permits to exchange goods and = services, but proceed to \-regulate the volume of such permits = regardless of the whole \-principle of demand and supply in an open = market. - Henry Meulen, THE INDIVIDUALIST, 12/74. \par MONETARY FREEDOM: We must end the power of the government to\- = create "dollars" at will; money must once again be a commodity\- such as = gold, produced solely on the free market. As we have \-seen, these = measures would end the boom-bust cycle as well as\- inflation, but we can speed up the adjustment to recession, and\- grow = and prosper far more if we cut taxation and government \-expenditures = drastically. - McBride, A New Dawn, 32. \par MONETARY FREEDOM: When man is free he chooses natural money that\- = is free from all strictures of government and politics. - Hans F.\- = Sennholz, THE FREEMAN, 2/75. \par MONETARY FREEDOM: When people become free to agree upon\- = alternative exchange media, value standards and clearing avenues\- among = themselves then they become independent of all monetary\- policies and = measures of the practitioners of monetary despotism, \- of "their" central banks, "their" interest rate-, discount- and\- = "open market" policies to control their forced and exclusive\- = currencies, their inflations, deflations, credit restrictions and = stagflations. - J. Z., 18.7.96, 19.3.97. \par MONETARY FREEDOM: When stating that monetary freedom is required = \-for full employment, this does not mean that free pricing is\- = considered as unnecessary. On the contrary, it is assume as given\- and to be perfected by freeing monetary transactions also from\- all = price controllers and coercers. - J. Z., 2/75. \par MONETARY FREEDOM: With freedom in money, the scientific = \-discoveries and mechanical inventions made in each country, will\- not = only be used to the utmost in that country, but will be\- carried into = all other countries. And these discoveries and \- inventions, given by each country to every other, and received by\- each = country from every other, will be of infinitely more value\- than all = the material commodities that will be exchanged between \- these countries. - In this way each country contributes to the\- wealth = of every other, and the whole human race are enriched by \-the increased = power and stimulus given to each man's labor of \- body and mind. - Lysander Spooner, Cleveland, Works I, 51. - \-Towards = that aim the abolition of patent and copyrights \-monopolies would be = required, too. Tucker was more consistent in \- advocating this liberty, too, than Spooner was. - J. Z., 22.3.97. - = Spooner still insisted upon copyrights.=20 \par MONETARY FREEDOM: Withdraw the right of note issue from\- = governments and restore it to the commercial banks, who suffer no \-such = temptation... - Henry Meulen, THE INDIVIDUALIST, 12/74. -\- Allow both = to issue - NON-COERCIVE TOKENS! - Meulen never fully \- realized the significance and consequences of legal tender. Even = \-today may assume that because legal tender fails to coerce in the = \-last stages of an inflation, when people ignore it even at great\- risk and choose alternatives agreeable to them, that, therefore, = \-legal tender is not really effective. But it took legal tender to\- = bring a currency to the desperate stage of a }{\f0\fs24 = galloping}{\f0\fs24 inflation\- , where it finally becomes ignored or simply too expensive to = \-}{\f0\fs24 utilise}{\f0\fs24 . In 1923 the printing costs came to 48% = of the market}{\f0\fs24 }{\f0\fs24 value of newly printed notes. In the = Hungarian inflation after WW\- II this percentage may have risen even higher. Imagine a\- government = trying to hawk its money around when it is merely its \-printed paper, = not covered or redeemed in rare metals, not legal \-tender (forced = acceptance and forced value), not a monopoly \- money - and if it were (since governments ignored sound tax\- foundation = for so long) not even accepted in payment of taxes. -\- J. Z., 21.3.97. \par MONETARY FREEDOM: You have the right to issue your own money -\- = and to refuse that of anyone else, even that of the government. - \-J. = Z., 11.2.73. \par MONETARY POLICY: Monetary national policy is a misnomer. It\- = should be called: Monetary national mismanagement. It is \-inevitably a = mismanagement because it is a national management of \-something that = can only be properly managed by the individuals\- involved. - J. Z., 18.9.73, 11/73, 31.7.78. \par MONETARY REVOLUTION: Cetero censeo: Exclusive and forced\- currency = must be destroyed in a monetary revolution, by being \-out-competed and = refused. We won't have widespread peace, freedom\- and wealth without = this step. - J. Z., 17.8.78. \par MONEY & ALL ITS OPTIONS: No one - and I will repeat that - NO\- one = knows what money is or can cause, given its own will. -\- Richard = Condon, Money Is Love, 123. - Indeed, goods and services \- are so diverse and so are free exchanges of them, that no one can\- = quite predict, in details, what will be exchanged and what will\- result = from free exchanges. One can only generally predict e.g.\- progress, growth in common wealth, peace, security, order & justice. - = J. Z., 22.3.97. \par MONEY & CLEARING: When no coercion, monopoly or fraud is = \-involved, then all monetary transactions are merely an advanced\- form = of multilateral and anonymous bartering of goods and\- services for = goods and services, or more or less advanced and\- generalized clearing of their agreed upon values against each\- other, = even though we do all too often loose sight of these \-underlying facts. = Even capital and securities represent,\- essentially, only goods and = services and would be valueless\- without them. Goethe, when contemplating the free exchanges in\- = Florence, considered them as miraculous as a "wagon way through \-the = air". - J. Z., 3/97. \par MONEY : Money, when available, is the "happy medium". - J. Z.,\- = 1.6.76. \par MONEY AS PROPERTY NOTION: Under monetary freedom all = ready-for-\-sale goods could, obviously, become more transferable, or = even\- liquid or self-selling - since then offers of them can be freely = circulated in\- form of token or ticket money, goods warrants, purchasing\- vouchers, = clearing and service certificates, IOUs, shop\--foundation money etc. = They would oblige only their issuers - to \- deliver their goods or services for them, which is usually their = intended business anyhow. It is property they want to part with - in = order \-to obtain, with the values received, other properties. This\- property is already a means for exchange for them - only so far \-they = were not free to turn it into proper means of exchange.\- Since their = own property and that of free other persons is \-involved, they should, = obviously, also be free to determine the \- kind of value standard they want to use in their own exchanges,\- = instead of meekly submitting to whatever standard the supposed = \-monetary authorities and experts want to legally impose upon them. In = \-this way no one can impose his property upon ot hers. It will only \-be accepted if others want his goods or services - = or know others\- who do and to whom they can pass on these money-like = property-\-claims. Without this kind of money issue - discounting- = and\- money-refusal freedom, no one is fully free as a proprietor and trader, = \-no one experiences full freedom of contract and a fully free \-market = and free enterprise, free trade and free exchange. Only \- this freedom will set property fully free. But to argue, without this\- = freedom, that "money is property", is often absurd, when it\- is a = government issue, that can rightly be used only against this \- issuer and that is mostly continuously depreciated or mismanaged \-and = sometimes intentionally kept in short supply or inflated, thus causing\- = sales difficulties, bankruptcies and mass unemployment. Should \- the unemployed and bankrupt then say that it is their money of\- which = they still hold a few notes, although this kind of money \-has not been = issued by them or managed by them and although this \-kind of despot ic money has made them bankrupt and unemployed? - \-J. Z., 19.3.96, = 19.3.97. \par MONEY CIRCULATION, QUANTITY OF MONEY, OPTIMUM QUANTITY OF MONEY\-: = There is an optimal amount of currency for any particular\- condition, = time and place. It is comparable to the happy medium \-between drought = and flood and only a free enterprise syst em can provide it and only free market rating can stimulate sufficient = \-into existence and prevent over-issues. - J. Z., 75, 78, 22.3.97. \par MONEY FORCED INTO CIRCULATION: Without legal tender and an issue\- = monopoly more money cannot be FORCED into circulation. Because \-then = only optional monies can exist and are market rated and thus \- limited via issuers and potential acceptors, like e.g. shares and = \-bonds and mortgage letters are. They are even more so limited, for = every potential acceptor can easily test their validity by \- taking them to the nearest shop, testing their "shop foundation". \-That = is what makes optional, market-rated and competitive \-money in practice = a very hard or stable money. Legal tender and \-issue monopolies and = official regulations of issuers must be=20 \-ended because they permit bad monies to be forced into \-circulation = and do not permit sound monies to compete the bad\- currencies out of = existence. - J. Z., 3/97. \par MONEY MANIPULATION & MONETARY EMANCIPATION: Emancipate yourself\- = from the government's money manipulators: Demand freedom for the \-issue = of all non-coercive notes and freedom to use the value \- standard of your choice and that of your trading partners. -\- J. Z., = n.d., ca. 1975. \par MONEY MONOPOLY LEGAL TENDER & INFLATION: We cannot trade the = details of the nefarious\- activities of rulers in monopolising money = beyond the time of the\- Greek philosopher Diogenes who is reported, as = early as the fourth\- century BC, to have called money the politicians' game of dice.\- But = from Roman times to the 17th century, when paper money in various forms = begins to be significant, the history of coinage is\- an almost uninterrupted story of debasements or the continuous = \-reduction of the metallic content of the coins and a\- corresponding = increase in all commodity prices. - Hayek,\- Denationalisation of Money, = 27. \par MONEY REFORMERS: Like the communists, most of the money\- reformers = (there are a few honourable exceptions, e.g. the \-Gesellian Paul Nagel) = considered only a centralised,\- authoritarian and coercive money = system, exclusive to a whole\- territory, with forced value and forced acceptance,\- euphemistically = called "legal tender", usually quite unaware of \-all the variations of = legal tender and of its general\- consequences: inflation, deflation, = stagflation, Gresham's Law,\- the vitiation of Say's Law. Although legal tender was openly\- declared = to be necessary to inflate the currency during the next \-war, as = happened during the German Bank Enquete of 1908, they \- tend to ignore such relationships. Even when they are fans of\- Karl = Marx, which I am definitely not, they tend to ignore his observation on = this (Zur Kritik der Politischen Oekonomie - \-Critique of Political = Economy), p. 129 of the Dietz, Berlin 1951\- edition ) : "... observers who studied the phenomena of money = \-circulation exclusively on the examples of the circulation of \-legal = tender paper money, had to overlook the inherent laws of \-money = circulation." - More on this in my booklet, \- reproduced in PEACE PLANS No. 19A : "Stop the $ X00 Million Legal\- = Tender Crime". To some legal tender seems to be rather an ideal \-than = a crime. - Perhaps the only legal tenders that are\- justified, are: a) = one agreed upon within a volunteer community\- or b) one individually contracted for, c) most = importantly, the\- one that is inherent in the obvious obligation of any = issuer of \-any kind of IOU: He must, at any time, in case of a = "currency" \- issue and, otherwise, at the due date, accept the own IOUs at par \-in = all payments to him. He cannot rightfully refuse that obligation, \-no = more so than could a cinema owner or an airline, bus-company\- or railway refuse to accept its own tickets. If one ponders along \-the = lines of "ticket money", then one will come to quite different\- and = more accurate conclusions than the popular misconceptions. d)\- The one which is customary for a local currency, in a juridical = \-assumption that settlement in the local currency is meant - when = \-nothing to the contrary has been agreed upon. But even that would\- apply only while a local currency is maintained at par with its nominal = value, in public free market ratings. There may be some \-other features = of legal tender that are rightful, occasionally, \-but I cann ot think of them at present. Most other versions are\- despotic, = characterising monetary despotism, and have long term\- disastrous = consequences. In my booklet on legal tender I\- distinguished between 19 = varieties of legal tender but made no\- claim that this list would be complete. See : LEGAL TENDER. - J. Z., = 3/97. \par MONEY THEORIES: They are so numerous that all should be listed = \-and confronted with the facts and contrary theories as far as is = \-possible, in order to enable the patient researchers to finally \-sort = the wheat from the chaff. - J. Z., 19.3.97. \par MONEY, DEFINITION: What is money? Everything that can greatly = \-facility free, i.e. voluntary exchanges and sound value\--reckoning. - = J. Z. 18.7.96. - Not what any government or central \-bank by fiat tries = to declare and make out to be money. - J. Z.,\- 19.3.97. \par MONEY, EVIL & GOOD: Too little of good money is the root of all\- = evil. - David Zube, 14.8.76. (He was close to 14 then. ) \par MONEY, GOVERNMENTS & MONETARY FREEDOM: Money is too important and = \-too vital to be left in the hands of governments. It should be in\- = the realm of private enterprise where it will be controlled by \- the people by their purchases in the market place. - Oscar B. = \-Johannsen, from the U.S. GARGOYLE, March 73, quoted in PROGRESS, = \-June 73. \par MYSTERY OF BANKING: Among the several dogmas still surviving in = \-the "mystery" sphere of banking is that of the "creation of money\- = and credit". Many do, for instance, believe private commercial\- bankers to be able to perform that miracle. Most of them assert\- that = any banker would be able and willing to do so. To this Mises\- once = replied, quoting from my not very reliable memory, not from \-the = relevant book : "Only=20 the government can take two such\- valuable commodities as paper and ink = and turn them into \-worthless trash." - Non-cash payments, clearing = transactions and\- also credit arrangements, over a period, are quite = naturally \- larger than the cash circulating at any particular time, without\- any = "credit or money creation" and any depreciation of the\- currency being = inherently and necessarily involved. Alas, they \- are all too often wrongly considered as wrongful and exploitative\- = "blow-ups" or "blow-outs" of the cash currency, precisely because what = is \-involved is to most people still a mystery. When a group of ball\- players pass a ball among themselves, and do so for a\- considerable = time, then each is involved in a number of \-successful (and some = unsuccessful) ball transactions but from \-this one should not conclude = that the total number of balls in\- circulation has obviously been miraculously increased, since the = \-total number of ball passes, over a period, was much larger than\- = one. - Non-cash payments, in their clearing, whether using stone\- symbols, wooden tickets, beads on a string, shells, or even\- valuable = commodities for accounting purposes, e.g. in form of gold dust or coins = or bullion bars, ounces of tobacco or cigarette packs,\- furs, etc., = etc., whether=20 reckoning and transferring physical\- symbols in the process, like some = paper moneys or clearing\- certificates, or merely book entries or = electronic signals,\- whether using an abstract value or index standard = or a physical \- unit, kilowatt hour, weight of wheat or metal, do not, \-essentially, = for an exchange or the clearing of debts, require ANY physical\- exchange medium or value standard. They do not have to be present and = used. Nor is a corresponding stock of the value standard units required. = The use of the meter standard for measurements does\- not require that e.g. every meter measure must be "covered" by\- the = physical presence, then and there, of an exact duplicate of\- the = original platinum meter standard stored, I believe, in\- Paris. And the = presence of numerous cheap and even somewhat\- elastic and inaccurate meter standards for daily measurements \-does = not, in any way, diminish or depreciate the value of the meter = measure.\- Millions more cheap but good enough meter measures can be = produced and effectivel y used in billions meter measures every day, \-without each being = "covered" by a meter stick made up of \-platinum. The same applies to = litres and kilograms etc., as \-applies to sound value standards, among = those who accepted them.\- - J. Z., 3/97. \par NATURAL MONEY VS. POLITICAL MONEY: So the people must choose = \-between political money, of which they may try another issue or\- = series, and natural money. - Sennholz, THE FREEMAN, 2/75.=20 \par NEUTRAL MONEY? Money should facilitate transactions, not disturb = \-or distort or prevent them. Otherwise it could be neutral, for \-all I = care. Complete clearing of all transactions would not only \- neutralize money but make it altogether unnecessary. But this is \-an = ideal which not only overlooks the taxation threat that is\- involved = with making thus all transactions all too visible to the taxers, \-but = also that all forms of money h elp to bring about a form of\- clearing and that for some minor = transactions they are superior \-to involving bookkeeping or electronic = checks, records, transfers \-and settlements. - J. Z., 19.3.96. \par NOTE ISSUES: Rightly issued, competitive and optional notes,\- = freely market rated, using sound value standards, fully\- publicised, = must essentially be vouchers, warrants, cheques or clearing = certificates\- or assignments upon the own immediate goods and service supply = capacity,\- not a future one, or such capacity of \-those with whom we = voluntarily associated for our note issues.\- Government paper money can = be considered (if taxation is\- considered acceptable) as only an assignment upon taxes "owed"\- to the = government or as tax receipts issued in advance and then \-to be paid in = or cleared as credits when the taxes fall due. They\- are, thus, indirectly, representing government services or = \-disservices, paid for with them. They also represent the pay\-cheques = for the huge bureaucracy more or less mismanaging all \-government = services and disservices. But as forced currency (\- exclusive currency with compulsory acceptance and enforced value\-), = used in payments for services and goods, against other victims \-than = taxpayers, it is always wrong, even though many of the \-victims can = pass these bucks on to the taxpayers. Its use for\- welfare State payouts cannot = make it right. - J. Z., 28.1.95,\-20.3.97.=20 \par NOTE ISSUING BANKS, THEIR DON'TS, LIMITS & SOUND ISSUE & \-REFLUX = RULES: 1.) Their notes must not acquire an issue \-monopoly. They must = always be exposed to free competition. 2.)\-Their notes must never = become legal tender in general \- circulation. But they must be legal tender towards the issuing \-bank = itself and, by contract, towards its debtors. 3.) No capital loans = (medium or long term loans) should be granted with their \- turnover credit notes - unless some note holders return them to \-the = bank as savings and want them so invested on terms agreeable\- to all = concerned. 4.) The business with any particular firm \-should never = exceed 10% of the total=20 banking business. 5.) The business of the bank of issue should be = confined to business with\- local firms, firms within a certain = circumference. 6.) To avoid \-over-issues, the notes should not be = granted tax foundation, i.e. \- the tax authorities should not be obliged to accept them at their\- = face-value (i.e., "at par" with their nominal value) but only at their = market rate, if that has sunk below\- its par value. 7.) No notes are to = be issued upon capital assets.\- 8.) All issues are to be based upon short-term securities that = \-represent goods already produced and sold at least to wholesalers \- or ready for sale service or labour capacity. 9.) Primarily, the issues = of such a bank should be used as means to pay local wages \-and salaries = with - if employees are finding them acceptable for \- this. 10.) A redemption by the issuer in gold, silver or platinum \-is = not to be offered. 11.) The bank is to point out which stores\- and = businesses are ready to accept its notes are par - redeeming\- them with = their goods and serv ices. 12.) The bank must always be \-prepared to accept its own notes at = par, at least within their\- limited circulation period. 13.) If the = bank receives other means\- of payment then it should utilise these a) = for its own payments\- due in these means of payment and for the purchase of its own\- notes = on the free market, at par, when and wherever its notes \-suffer a = discount. It should also exchange notes of other banks\- of issue with the other banks for its own notes. 14.) Further \-issues = have to cease while locally the notes suffer a discount of\- 1% or more. = 15.) When debts owed to the bank are paid in other \- means of exchange than the own notes, then the bank may charge a\- small = fee: In order to withdraw its own notes faster and more\- thoroughly and = in order to cover any costs involved in utilizing \- the notes of others. 16.) Its notes should clearly state their \-limited = circulation period, usually 3 months and never more than\- 12 months. A = limited usability, e.g. for the payment of overdue \-debts, might be p roclaimed for notes that are presented after \-their period of validity. = 17.) Although the administrative \-and insurance costs for = turnover-credits granted with the own notes are low, a considerable = interest should be charge for them, one to be \- increased when repayments are late. Part of that additional \-interest = may be distributed as a premium among those who repaid \-their debts to = the bank early. - These are not thoroughly\- pondered and worded bank statutes but just some of the rules which = stuck in my \-mind. For well drafted bank statutes for banks of issue = see\- especially the writings of Ulrich von Beckerath, 1882-1969. - J. = Z., 3/97. \par OBJECTIONS TO FREE BANKING: "Freedom of issue cannot be\- tolerated = because this would inevitably depreciate the \-government's currency, = thereby disproving the notion that without\- legal tender and the money monopoly there could be no inflation." - One = has to distinguish between depreciating something that is \-inherently = or subjectively valuable and something that obtains\- all or much of its value only through coercion, deception and monopoly = - as forced and exclusive currency of the government's \-central bank = does. Competition in this sphere would merely reveal \-the insufficient foundation of the government's or its central\- bank money = and bring this forced currency back to whatever market\- value it can = then still manage to retain. It would be the same \- process as a free stock market properly evaluating a formerly\- = privileged and compulsorily issued and accepted government\- security = (insecurity is here a better name) and from then on \-noting and trading = it, if at all, at a much reduced rate, far \- below its par value. One might also compare this "depreciation" with the = reduction of a monopoly goods or service price to its \-market value, = e.g. the price of a monopoly telephone call or a\- monopoly letter charge to their free market rate charges. As for \-the = competitive and privately or cooperatively issued currencies \-without = any monopoly, privilege or legal tender powers, they\- would, indeed, be = inflation and deflation-proof, which \- governmental currencies, in spite of their privileges, monopolies \-and = legal tender powers - and because of them - never were. - The \-marking = down of any overpriced goods or service to its true \- market value is not an act of depreciation of any real but only\- of any = fictitious, fraudulent and imposed value. Government \-currencies do not = have to be depreciated by others. They can \-manage this quite well on = their own. Only so far they were \- coercively covered operations. They will shrink to their true \-size and = value in the full light of publicity and effective competition. - \-J. = Z., 4.10.96, 19.3.97. \par OVER-ISSUES & THEIR LIQUIDATION: Under a competitive and almost\- = instant justice and arbitration system, the somewhat careless acceptors = and holders (of wads of an over-issued private currency) \-mi ght also successfully insist on an immediate forced sale of the = \-responsible issuer's car, house, furniture and other valuables,\- = paying with him with his notes, at their nominal value. And the \- mass media would love to widely report such cases. - J. Z., 3/97. \par OVER-ISSUES, MOTIVE FOR: Would the issuer even be willing to\- = continue issuing notes at a large discount - if he could still \-find = acceptors for them at a large discount - when immediately\- afterwards he would have to accept them himself, at par, from any = note-\-holder? - Pricing, justice, free exchanges, do work and = function.\- Fraud, and coercion may for a short time pay some, at the = expense\- of others, but are in the long run self-defeating, unless publicity, = policing, courts and prisons are as ineffective or\- slow as they are = now, all too often, because they are government\--run and thus = bureaucracy-ridden. - J. Z., 3/97. \par PAPER MONEY: It is said that the Chinese had been driven by \-their = experience with paper money to try to prohibit it for all \-time (of = course unsuccessfully) before the Europeans ever \-invented it. = Certainly European governments, once they knew about=20 \-this possibility, began to exploit it ruthlessly, not to provide\- = people with good money, but to gain as much as possible from it\- for = their revenue. - Hayek, Denationalisation of Money, 28/29. \- There were a few exception to this rule in Prussian history,\- pointed = out by the German School on Money, around Ulrich von \-Beckerath. That = governmental honesty lasted, at least in Prussia, from about the\- = Napoleonic Wars to WW I. - J. Z., 21.3.97.=20 \par PEOPLE'S MONEY: The "people's money" is not the people's money \-or = "our" money but a coercive monopoly money of the State forced \-upon the = people. - In the monetary sphere, too, our popular \-language is often = our own worst enemy. - J. Z., 16.3.97. \par POPULATION GROWTH AS GUIDE TO CURRENCY CIRCULATION GROWTH? Under = \-that system the growing population in an economy stagnating or = \-collapsing under State socialism would get the same total circulation = of currency as the same population would get under a \- free market economy. In both cases the circulation issued would \-be = unrelated to the total quantity of goods and services produced \-and = offered for sale. Consequently, either not enough or too much \- of such a currency would be issued in most cases. Moreover, when in a = "developed" country there is a general strike, lasting e.g. one month, = then its circulation by population figures would be \- still the same, although its production for this quarter would be \-down = by one third. Take the case of primitive tribes with a \-subsistence or = barter economy. Under this system they would be \-provided with exchange = media to the same amounts as the same \- population in a very productive country would be. What could they\- = buy with this population currency? Babies and old people to fry? \-Money = can be money or currency only when you can pay for all \-your current = needs with it,=20 i.e. when there is an abundance of\- ready for sale goods and services = in shops, shopping centres and \-markets. These goods and services = should form the basis for sound \-issues - by their owners and their = associations. To base the \- circulation of a currency or of competing currencies on the \-population = is no more sensible than to base it on e.g. the number \- of "holy books" or "holy cows" in a community. - Usually, the = differences between different economies are not as large as those\- = between a vastly underdeveloped economy and a somewhat developed \- one. But even these differences would make already any "per head" = \-provision of currency false and harmful. In essence, we would \-here = have only another form of monetary despotism. - Not only the population = but the degree of its economic development matters and\- its degree of work = ethic or withdrawal from productive\- activities, its degree of e.g., = saving and productive investment\- or involvement in narcotic = consumption and gambling, playing \- sick or going on strike, being peaceful or becoming involved in civil = wars or revolutions. Their productivity depends upon their \-education, = training and willingness to work hard and long, their \- freedom to sell and buy as they please, their readiness to \-innovate, = engage in private or cooperative enterprise, their \-freedom from = governmental or private robberies, their degree of \- health and strength. A mere head count is no more a solution here \-than = it is for political arrangements. - If more and more people \-became = retreatists of the School of Living type or utopian \- colonists or intentional community members, "out of the rat race"\- of = high productivity, then a population-measured circulation\- would, = obviously, be oversupplied as far as their output is\- concerned. - J. = Z., 3.8.95, 16.3.97. \par POPULATION SIZE AS A MEASURE FOR THE CIRCULATION OF EXCHANGE = \-MEDIA? - The notion that a circulation cannot be self-limiting\- and = self-managed, subject to voluntary acceptance or rejection \- and to market rating against a chosen value standard, is inherent\- in = this monetary reform notion. Check your premises! Note toRobert de = Fremery: When clearing arrangements are not complete \-or to the extent = that clearing is still mediated by physical \- exchange media, then the quantity of exchange media required, in = \-the opinion of some central and monopolistic issuing centre, \-should = be determined, according to you, by the population. \-However , the quantity of exchanges to be mediated and the sum of\- the prices = of these exchanges and the daily required total sum of \-exchange media = for consumer purchases, is not firmly determined \-by population numbers = alone. Populations differ, according to \- education, training, attitudes, state of development of their = \-economy and the degree of their productivity. Nomadic herding = \-societies and subsistence agricultures will differ greatly from \- industrialized populations in the number of exchanges they are \-capable = and willing to undertake and the quantity of exchange\-media they would = require for their exchanges. Anyhow, why should \- third parties have discretionary powers over people and their\- = exchanges and exchange methods and exchange media and their value\- = standards? - A population suffering much sickness or preferring \- idleness and ease or deterred from producing much by excess\- taxation = or prohibited from producing as much as it could via \-compulsory = licensing, or, through its political system, refusing\- to licence anyone but monopolists (e.g. in the banking sphere), as well as = heavy taxation, \-price controls, quotas and other interventionist = actions, will \-lead to a much reduced production among such populations = compared\- with those populations, of equal numbers, that are not so\- restricted = or self-limited in their economic activities. - By \-rights, the = producers and exchangers themselves should determine \- how many exchange media, of what kind and with what kind of value\- = standards they want and how they can best supply themselves with\- = these, in accordance with their exchange requirements, so that \- they can easily achieve the almost complete sale of everything \-they = have to offer for sale. After all, they are the owners of \-the ultimate = "redemption" fund for any currency and they should\- be free to mobilise that fund, reserve or backing for their own = \-currencies, which would oblige only themselves, as their own \-IOUs, = payable or redeemable in their own goods and services, and\- reckoning = for pricing and the de nomination of their tokens, in\- one or the other value standard which = they find attractive, \-never mind what the laws of others, the experts = and theories of\- others, including some monetary reformers, state or = wish to the \- contrary. Each should mind his or her own business, in this\- sphere, = too. Governments have never been good at minding the \-business of = others to the advantage of these others or their\- customers. - J. Z., = 3/97. \par POWER TO COIN MONEY: Some imagine, especially believers in\- = "social credit", that private banks have it, even now, under \-monetary = despotism and more monetary legislation than anyone has \-time to read, = study and comprehend. They overlook that in the\- absence of forced acceptance, forced value and any issue \-monopoly, = the consumers of money do enjoy consumer sovereignty\- towards it as a = product or service. They are free to refuse or to\- discount it and will in most cases only accept the best and most\- = stable money offered, thus driving out the bad types. - History\- also = teaches that most private and competitive mints were run \- more honestly than most government mints were. - See COINAGE,\- MINTING, = COMPETITIVE MONEY, REFUSAL TO ACCEPT, DISCOUNTING. - J. Z., 3/97. \par PRIVATE BANKERS: The illusion, prejudice or myth that private = \-bankers can arbitrarily increase and multiply deposits and\- credits, = thus creating an inflationary additional "money", is\- one of the = greatest supports for the continuance of monetary\- despotism. See: CREATION OF MONEY & CREDIT. - It ignores, among\- many = other things, that non-cash "payments" have no legal tender\- power. = They can be and sometimes are refused and CAN suffer a \- considerable discount against cash. - This illusion overlooks, = \-moreover, that government cash and accounts reckoning in it, can \-be = inflated only via the government's money issue monopoly and\- its = enforced paper value st andard, combined in its paper money, a\- "legal tender" currency, which, = as such, prevents pricing of the \-paper standard and of the exchange = medium and free competition\- for both and the pricing of goods, = services and labour in \- alternative and sound standards, not participating in the \-inflation of = the forced currency of governments. With legal \-tender the bad exchange = medium, the bad value standard, can, \-indeed, drive out good money and = value standard alternatives.\- Without legal tender they could not but would, instead, be driven\- out = by alternatives which payers and payees prefer to use. - J. Z., 3/97. = See: \-GRESHAM'S LAW. \par PRIVATE MONEY ISSUES: Just ANY private money issues is good = \-enough just because it is a private or cooperative one - except,\- = perhaps, as a deterrent example. It must also be a sound issue, \-in = theory and practice. People should be free and have the\- opportunity to learn about sound issue and reflux techniques = \-theoretically, from complete information sources on such \-subjects, = and also to learn from their own monetary freedom\- experiments, = undertaken only among volunteers and at their own\- expense and risk only. No one has the right to undertake despotic\- = monetary experiments at the risk and expense of non-consenting = \-victims, especially not any government or presumed monetary authority. = \-- J. Z., 21.9.95, 20.3.97. \par QUANTITY THEORY, CASH & CREDIT & CLEARING & THE CREDITOR'S LEGAL\- = & JURIDICAL AUTHORITY TO DEMAND CASH & CASH CRISES OR CURRENCY FAMINES: = The\- quantity of any kind of cash currency in existence, legally or \- illegally, becomes significant only artificially, and\- customarily, not = inherently, and economically, namely, when it is\- considered to be a = necessary reserve and redemption fund for any note, ticket and clearing = certificate serving as money, for any \- non-cash account, for any claim of a creditor against a debtor,\- with = every debtor thought to be under obligation to supply that\- cash, = whenever payment or settlement is due and whenever it is, \- then and there, demanded in form of cash, instead of him being \-merely = obliged to settle in a non-cash way, by any form of\- clearing that is = acceptable to both creditor and debtor. When \-custom, habit, = constitution, law, jurisdiction, bankruptcy\- procedures and bank failure notions do insist upon or allow such \-a = demand for an unjustified and unnecessary "backing" for the\- vastly = larger non-cash and clearing transactions, even for the\- short term and self-liquidating credit transactions, involved in\- = turnover credits for already produced and sold (to wholesalers) \-goods, = then, indeed, the slightest trouble or irregularity can\- set off an = avalanche or chain reaction, in which a sma ll cash\- shortage somewhere, of someone, can "explode" into requiring = more \-and more payments that were formerly and customarily settled\- non-cash and by multilateral and anonymous clearing. They would, then = and there tend to become also payable in cash, as well. Then, that is, = just when cash is already somewhat short, the demand for more cash rises = suddenly, almost\- astronomically, but the supply of cash, especially under a \-currency = issue monopoly (or coinage monopoly, in previous \-generations), does = not. There is a discrepancy between the \-available cash (under any = monopoly issue system) and the vast \- number of non-cash transactions and clearing transactions built \-up and = made possible beyond that limited quantity of cash, which\- are still = redeemable in that limited quantity of cash. This right \- to demand cash, suddenly, in place of a non-cash or clearing = \-settlement, establishes an inherent instability and leads all too\- = often and rather suddenly to the inability of many to pay cash, when = cash demands s uddenly increases, somewhere, between some\- people (today, maybe, for = some additional drug deals or tax avoidance cash \-deals). For each = amount of cash mobilised to settle the\- additional cash demand, from = the existing total quantity, a much \- larger total of non-cash transactions becomes then impossible or \-is = not renewed and for these transactions cash is now also in \-demand but = insufficiently supplied (under monetary despotism).\- That leads to further collapses of the non-cash transactions.\- = Moreover, everyone in such a situation, who still gets some cash\- and = would otherwise readily pass it on, does then rather hold on\- to it and increases his cash demands in settlements, too, to\- increase = his cash hoard. Our present system is not adapted to\- suddenly and = correspondingly increase the cash demand, but rather \- causes and increases it in crisis times. If a central bank were, \-for = instance, to produce additional legal tender notes, then\-, during the = crisis, they would tend to be hoarded, i.e. not be\- available t o mediate turnovers and get business and employment \-going again. = Moreover, these additional notes would remain in \-circulation even = after the cash crisis had disappeared, and would\- thus lead to a = corresponding inflation. Legal tender notes are\- not self-liquidating. They push notes into circulation but do not = \-push them out of it, back to the issuer, unless the government\- were = to increase taxes accordingly. But that is rarely\- politically opportune or is not done fast enough and extensively = \-enough to counterbalance any additional legal tender issue, if\- = experience is any guide. During such sudden monetary famines (\- one was sensibly described by John DeWitt Warner in his "The\-Currency = Famine of 1893", reproduced in my series), people are\- either free to = issue and to clear their debts or they are not.\- Currency famines can = arise only, when the right of creditors to \- demand cash is built into the system, by law, custom, habits,\- false = economic teachings and practices. To the extent that people\- are free = to clear and know how to do so, they become independent\- of the quantity of cash. To the extent that they are free to\- provide = alternative forms of private cash, they become \-independent of the = supply of governmental cash from some government centre, more or less = bureaucratically and thus \- inefficiently run. To the extent that creditors are not granted\- the = right to demand cash, under all circumstances, regardless of \-its = availability, cash shortages do not matter. Clearing can go\- on = undisturbed and expand as=20 required. One is then even likely to\- think of further improvements = upon the current clearing \-technique, as happened e.g. in the repeated = and sudden private\- issues of "clearing house certificates" during past cash famines. - = Whenever debtors find it difficult to raise official cash but are = \-still ready to supply their goods and services, to clear their\- debts, then they should become free to do so. The panicky demands\- of = creditors for cash will also disappear, when they, in their\- turn as = debtors, do also become free to clear instead of having \- to supply cash. Thus the legal and juridical entitlement or the = \-commercial custom or fall-back option, to demand any exclusive = \-currency, gold coins or legal tender paper money, in quantities = \-which were or are no t or not fast enough supplied by the monetary\- authorities, as long as = these are allowed to exist, and which are thus not readily available to = the debtors, should be \- abolished. A risky dealings in futures is involved, which everyone = thought could be readily settled with the as yet\- "ungrown" or = "uncaught" or "unproduced" cash. Even millionaires\- found it sometimes = in difficult just to paying for a cup of\- coffee - in cash. Precisely when a little bit more cash is asked\- for, = it is not made freely available but leads to more and more\- cash = demands and then to the at least temporary collapse of the\- non-cash-payment and clearing sphere, precisely because it is\- wrongly = based on the supposed right of creditors to demand cash.\- By all means, = let individual debtors and creditors go bankrupt \- when they individually contracted to engage in such risky future\- = dealings, without agreeing upon e.g. withdrawal premiums. But \-allow = the general market to emancipate itself from such \-requirements, by = freeing up the clearing option in all cases. \- Moreover, allow private people to produce alternative "cash" \-tokens or = substitutes, as useful and less risky than government\--provided cash = tokens inevitably are. They are safer e.g. through \-their free market = rating, alternative and agreed-upon value \- standard reckoning, elasticity of their issue and and\- prearranged = reflux channels and obligations, local availability or supply option = whenever needed, in the quantity needed and by\- their inherent close = ties to the values of the consumer goods and=20 \-services, which the issuers offer for sale, and which these cash = tokens entitle the holders to purchase them with. In short, allow\- = alternative clearing and cash settlements. Do not grant any\- exchange = medium or value standard an exclusi ve and general\- monopoly in any country. Monetary freedom in every = respect\- instead of monetary despotism of any kind. - J. Z., 3/97. \par READINESS TO ACCEPT FOUNDATION & PUBLICITY FOR PRIVATELY OR = \-COOPERATIVELY ISSUED COMPETING NOTES: All associated issuers\- and = acceptors should and would be likely to indicate their readiness to = accept in the same way that shops now indicate e.g., \- their readiness to accept travellers' cheques and credit cards. - J. Z., = 3/97. \par REAL BILLS DOCTRINE: Those who consider it fallacious tend to\- = think only in terms of modern legal tender paper money, which is\- not = self-regulating with regard to its quantity and the quality\- of its value standard. But the Real Bills Doctrine was advanced\- at a = time of largely competing currencies and their free-market\--rating = against standard gold and silver weight units. This rating \- prevented over-issues of small standard bills which temporarily replaced = and facilitated the payment of the original and\- discounted bills - by = paying them in the more convenient and\- transferable small bills into = which the original bills were cut-\- up (or by which they were temporarily replaced, in circulation) by the = discounting process. As long as the value of the original large bill and = its temporary replacement in circulation \-by small bills in money = denominations, were measured in stable\- values, refusable and discountable, no over-issues could occur. \-Only = other than sound commercial bills (which represent goods\- already = produced and sold and, over the wholesalers, on the road to the \- retailers and consumers, and thus representing real values),\- e.g. = financial bills, were discounted with banknotes, could these = \-banknotes, not representing real consumer values but speculative hopes and expectations only, often unfounded, become greatly = depreciated. The art\- of a note issuing banker consisted in knowing his = customers and\- their business well enough to enable them to distinguish = between\- the real bills and the financial bills. The latter might have no = \-better foundation than a gambling debt of the issuer. (By the\- way, = Casino money is also possible and, to some extent, already\- practised, if only to ensure honesty among the casino employees. \-So, = the customers of a casino usually have to buy first the\- casino's own = token money before beginning their plays with it and\- they have to redeem their winnings, if any, in outside money, \-before = they leave.) - Another point, often ignored in the current\- discussions = of the Real Bills Doctrine, is that prices and wages\- were denominated in gold and silver weight units and paper \-monies, = like optional bank notes, where accepted at par in payment\-s only when, = on the free market, they were traded at par. In other \-words, they = could not blow up=20 the level of prices and wages. At\- most they depreciated or were = refused and were replaced by better means of exchange. - When all = prices and wages are\- expressed only in an exclusive and forced = currency and its paper\- standard and all bills of exchange indiscriminately discounted\- only = in such forced currency, only then can real bills and their\- = participation in the use of this scandalously wrong and flawed "standard = of value", not prevent the coercive\- and fraudulent depreciation and shortages that are involved in\- this = system of monetary despotism. Honest traders are then not\- free to deal = honestly with each other, to utilize sound exchange \- media and sound value standards. That is not the fault of the\- Real = Bills doctrine or the best application of the soundest version of the = "banking principle". - The quantity \-of banknotes based on the real = bills doctrine and practice is\- limited a) by the limited number and sum total of real bills and\- of = the real goods transactions that stand behind them: already\- sold and = produced goods on the road to the consumers. b) by free\- pricing of goods with sound value standards, which prevents the = \-acceptance of depreciated notes arising from the discount of\- = financial bills at their face value and of legal tender notes at \- par. c) by full publicity for this pricing and all details of the = \-issue of banknotes based on real bill discounting or the \-discounting = of equivalent short term securities. d) by the right\- of potential acceptors to refuse to accept them at all. e) by the\- = right of potential acceptors to discount them to such an extent \-that = the issuer will be unable to continue to issue them - for\- he has to continue to accept his own notes at par at any time\- from = anyone. f) by the operation of Gresham's Law, which for\- exchange media = without legal tender means that the good money\- drives out the bad. g) = A note discounter who wants to stay in=20 \-business has to prevent his notes from suffering too much of a = \-discount for too long, otherwise he will lose this business to \-other = more efficient issuers. g) by free market rating of the \- banknotes so issued. Only those keeping at par or close to par \-can be = issued and withdrawn by their due date, in ever repeated\- business = transactions. Without legal tender, i.e., forced\- accept ance and force value, they cannot be multiplied beyond those limits. The = real bills discount and note issue practice \-works only when there is = no monopoly and price control for value\- standards and exchange media. That should have been obvious to = economists. Instead,\- they merely copied and repeated early errors on = the real bills\- doctrine since about 1800. Compare my correspondence = with Kevin \- Dowd on this. - J. Z., 6.7.95, 19.3.97. \par REDEEMPTION IN DAILY WANTED CONSUMER GOODS AND SERVICES RATHER\- = THAN IN RARE METALS: Free note-issuing banks and = shop-\-association-banks could proudly declare: Our notes and\- = certificates and clearing accounts are fully redeemable and\- convertible, any time during shopping hours, into all the goods, = services and labours of our associated members, at any time and\- to = their full nominal value. - That readiness far exceeds the\- la rgest gold reserve we could offer or that our customers would\- want to = acquire, at their expense. As you can see in the daily\- quotations of = the free gold market, our notes and accounts are, \- as a rule, at par with their nominal and stated gold weight value\- (or = whatever other standard is adopted for them and the local \-prices) or = very close to them. - We do utilise other exchange \- media received by us to buy up our own exchange media, at least to the = extent that we find them anywhere at a discount. - J. Z., 3/97. \par REDEMPTION IN RARE METAL COINS BY THE ISSUER, UPON DEMAND: It is = \-a primitive, costly and clumsy and also risky way to preserve or\- = guaranty the value of private banknotes in case their value is\- = doubted. There are other rightful, open, non-fraudulent, \- contractual options to eliminate or reduce the time risk and prevent = panics. E.g., the Option Clause notes of the Scottish Free \-Banking = system. Banks and their customers might also agree that \- redemption in rare metal coins, if agreed upon, will be available\- only = in quotas, in instalments, from whatever funds become \-currently = available, having been repaid when due. With \-an agreement reached upon = no immediate and full redemption upon\- demand, panics would not occur. Banks might declare e.g. that, in\- = case of a cash shortage (avoidable anyhow under quite free note \-issue = and clearing), they would pay out either all claims on a \-fir st come first served basis, to the exhaustion of present cash.\- = Tomorrow, they would do the same, for the cash then available.\- Or, = more sensibly, they might say that anyone might enter a\- waiting list for getting everything back, or even a waiting list \-for = each getting paid out a certain minimum amount, $ 50, 500,\-5,000, from = his deposit and that insofar the instant "on demand"\- deposit refund claim would be ended and replaced by an "as soon\- as = possible claim." As long as this is agreeable to the\- depositors, = prepared to sign a contract to this effect, then who \-has the right to = complain? Fixed time deposits are not the only \- alternative. But I would prefer it if such deposits were always\- = freely negotiable. Here in Australia and usually they are not.\- The = bank could also assign to each depositor a transferable \- certificate, based on the gradually due assets of the bank, to \-make up = for any cash it cannot immediately supply. If the\- customers believe = that in this way, and in the average, they can\- gain the=20 highest possible interest on their deposits, then they \-will be = agreeable to such offers. - J. Z., 3/97. \par RETAIL TRADE AND FREE BANKING: How to greatly increase retail = \-figures and fight bankruptcies and mass unemployment. Make retail\- = goods and service supply capacity the basis for the issue of \-privately = and cooperatively issued alternative money tokens=20 \-without any legal tender privilege, optional, freely\- transferable, = with value standards freely chosen by issuers and\- acceptors and have = all goods and services additionally or\- exclusively priced out in these = certificates, likewise all local\- debts made payable in them as optional, refusable and\- discountable = means of exchange - unless acceptance at par has \-been contractually = agreed upon by the debtors of the issuer. Have \-also all details of the = issues and of their reflux well\- publicised. Moreover, see to it that employers and employees use \-them = as far as possible and acceptable to them as means to pay \-all local = wages, salaries, suppliers, d ues and charges with them. - Each such issue, especially when it is = short-term time-limited,\- will bring about a corresponding sale. The = few initial private \-tokens snapped by collectors would bring = additional profits and\- could easily be replaced by other such turn-over promoting\- issues. = The total issues would be self-regulating through the self-interest of = the issuers, free market rating, publicity, the \- option to reject or to discount them. Only those could continuously = issue them, who managed their issues so well that \-their notes would = almost always be readily accepted at par or \-would only suffer minor = and temporary discounts - from which a\- few alert locals could profit, by snapping them up and presenting\- = them at par to the issuer for his goods and services. In each\- = community the total values of retailers, ready for sale, should\- be totalled up. They would represent the maximum for such = turnover\-credit issues, managed by those most interested in promoting\- = their turnovers. - J. Z., 30.7.96, 19.3.97. \par RIGHT OF CREDITORS TO DEMAND AS CASH THE MONOPOLY MONEY ISSUED BY\- = SOMEONE ELSE?\tab As Ulrich von Beckerath put it, the creditor has \-not = right to demand cash but only whatever is freely agreed-upon.\- The legal or juridical right of creditors to demand cash ought to\- be = replaced by a right to demand clearing only. Otherwise, panics\- and = depressions are guaranteed by this system, sooner or later.\- Moreover, as part of that right to clear, debtors ought to be \-free to = offer their own alternative private or cooperative\- currencies or = clearing certificates in settlement - at agreed\--upon rates. - J. Z., = 95. \par ROTHBARD, MURRAY N.: The Mystery of Banking. The title implies = \-that banking and its principles and practices are still a mystery \-to = most people and that in such cases all kinds of false and odd\- theories and dogmas continue to prevail, including the belief in = \-miracles. Alas, with his limited vision, partly blinded by his\- own = dogmatic adherence to a 100% gold dollar, many of the honest \- and free banking options remained a mystery to Rothbard, too. He\- all = too readily dismissed all alternatives to his ideal as \-"fraudulent", = no matter how voluntary and well contracted a \-private alternative = issue and reflux system would be, no matter=20 \-whether it, too, soundly accounted and cleared in gold weight = \-standards, and no matter that clearing inherently does not need\- any = cover or reserve, convertibility or redemption at an issuer\- at all but just an agreed upon value standard, of whatever kind\-, one = that is popular enough among those who contracted it for themselves = \-and their transactions. - Gold convertibility could and should be\- re alized via the greatest redemption fund at all, namely the free \-gold = market. Anything that passes there at par with gold is, by\- definition = and in practice, as good as gold in value, has the\- value of gold - but is much more portable and less risky than the = \-equivalent gold weight units would be, if they were physically = present. - J. Z., 3/97. \par SALES OF GOODS AND SERVICES AND THEIR DIFFICULTIES UNDER PRESENT\- = CONDITIONS: In a free exchange economy goods services and labour \-could = not only be barter ed for each other or their values freely cleared against each other, by = using a common clearing centre but \-they could also be used by their = owners, alone or in suitable \-associations, as "cover" or "redemption = funds" for token money, \- purchasing certificates, goods and service warrants, redeemable \-in = them, all standardised and in money denominations and \-indicating the = same and freely chosen value standard in which the \-goods, services and = labour are priced out. This is such an \- obvious solution to make goods etc. much easier to sell or \-transfer = them or to turn them into liquid cash and the legal monopolies which = prevent that are so despotic, that it is really \-surprising that so few = recognize this monetary despotism, under\- which everybody directly or indirectly suffers, and that even \-less = people demand its replacement by monetary freedom. \par SALES THROUGH ASSURED REFLUX OF THE SELF-ISSUED MONEY OR CLEARING\- = CERTIFICATES: The return of each privately or cooperatively\- issued = money or clearing certificate to the issuer or his \-association, in the = payment of debts owed to him or the purchase \- of his goods or services, can be as certain, much cheaper and = certainly faster than is the dispatch of an air mail letter today \-to = the other side of the world. If such clearing credits or \- payments were made electronically, the pay-outs and receipts, i.e., = \-the mutual settlement of various debts, could sometimes take \-place = in seconds or minutes. Alas, the costs and slowness of \-posting or = otherwise forwarding goods over long distances would\- remain. - J. Z., 30.10.95, = 19.3.97. \par SHARE INVESTMENTS AS SECURITY AGAINST THE INFLATION RISK? Even = \-investments in shares were not ALWAYS inflation-proof since the\- = share prices often did not catch up with the increase in prices \- of consumer goods and services due to monetary depreciation. Most of = Germany's 1913 millionaires had disappeared by 1923 -due \-to this = crisis and their ignorance and prejudices which prevented\- them from = taking sensible precau tions. New millionaires arose,\- who borrowed vast sums and legally = "repaid" them with inflated\- paper money. A fool and his money soon = part company. The old\- millionaires, even though presumed to be = experts in financial\- matters, had not experienced or studied paper money inflation and = \-thus did not wake up to the true nature of inflation soon \-enough. = They, like the man in the street, were usually fools or \- prejudiced in monetary matters and maintained their all too misplaced = "confidence" for all too long. Those who were wise to\- what was = happening and dishonest enough, did tend to become\- debtors on a large = scale increasing the defrauding of creditors.\- But these became less and less willing to be so defrauded and to\- make = credits available at all or to accept pretended "repayments"\- in legal = tender notes, at their fictitious and enforced nominal\- value. To that extent a new class of millionaires arose, for a\-while, = at the expense of former ones and of uninformed or \-irresponsibly = administered savings institutions. - J. Z., 3/97. \par SHORT TERM FUNDS INVESTED ON LONGER TERMS: Would this have = \-happened if the depositors were fully informed on this \-relationship = by corresponding tabulations, well displayed inside \-and outside the = banks? Would the more secretive ones remain \- more successful under full competition? There would also be \-public = reports on the security or safety of the various banks of \-issue or of = savings and loans and their rating against others.\- All this on top of the daily and hourly rating of their exchange = \-media, value standards and security certificates. - Many of the\- = additional safeguards recommended by Ulrich von Beckerath would\- also be voluntarily adopted, either because of better foresight\- or = because one wants to catch up with one's competitors. E. g., \-the small = penalties to be paid when repayments to a bank are in\- any other currencies than the bank's own. The requirement that no\- = loan to a single person or firm should exceed a certain \-percentage of = the sum of the loans of a savings and investment\- bank. The turnover = and employment promoting banks would grant\- only short term discounts and loans for such purposes and no\- others. = Nor would they lend their means to far districts or\- countries, but, = instead, only to enterprises within their\- district and their usual = payment community. That would be an \- obvious self-help step for local shop keepers forming their own\- bank = of issue for their own kinds of goods and service warrants. \-Further = issues are to be stopped as soon as the current issue \-suffers a = discount of 1% or more. The readiness-to-accept \- capacity of the issuer's associates should not only be made = \-available to note holders but should be fully publicised, too,\- = including and comparing it with the outstanding notes or claims = \-against the bank. For more such hints see Beckerath's propo sed statutes. - J. Z., 3/97. See: LIMITS FOR ISSUES, CIRCULATION, FREE = BANKING. \par SOUND MONEY: Sound money will not solve all the problems of\- = mankind. But it will provide some stability in our lives. In 1975 \-that = seems a lot. - A. A. Walters: 1985, p. 8. \par STAGFLATION THEORIES: They are so numerous that all should be = \-listed - and confronted with the facts and contrary theories as \-far = as is possible, in order to enable the patient researchers to \-finally = sort the wheat from the chaff. - J. Z., 19.3.97. \par STAGFLATION: It can occur only under monetary despotism not \-under = monetary freedom. History supplies no evidence to the \-contrary, if one = detracts cases where monetary freedom options \-were simply entirely = unknown and unimagined and thus not\- practised. Even today, many of the more advanced libertarian\- thinkers = have been unable to think, monetarily, beyond the\- conventional gold = standard or gold redemption system. Some went \-to their death, like = Mises and Rothbard, still stuck within the \- limited options of that exclusive currency. Could an appeal to \-the = Internet users help to promote such research? - J. Z.,\- 19.3.97. \par \line STAGFLATION: With an inflated paper money currency, if = reckoned \-in gold weight units and against the paper money prices and\- = wages, that have already anticipated further inflation of the \- paper money, the gold weight value of the total of the inflated \-paper = money issue, as reckoned on a free gold market, may\- actually decline, = leaving less total purchasing power than \-before. Thus, even while the = printing presses may be running hot\- with printing more paper money notes, a shortage of exchange\- media to = pay the inflated prices and wages does occur, i.e., a \-deflation in the = middl}{\f0\fs24 e of an inflation, aptly termed}{\f0\fs24 :}{\f0\fs24 = }{\f0\fs24 \-"stagflation". - J. Z., 15.3.96. \par standard of value. Free choice of value standards, instead! -\- J. = Z., 21.3.97. \par STATE CONTROL OF MONEY ISSUE: State control of money issue is = \-today responsible for disastrous stagnation of trade, inflation\- and = unemployment. - Henry Meulen, THE INDIVIDUALIST, 12/77, p.\-70. \par STATE MONETARY SYSTEM: Hardly ever do the advocates of free = \-capitalism realize how utterly their ideal was frustrated at the = \-moment the State assumed control of the monetary system. - Gustav\- = Stolper, This Age of Fable, p. 64. See : CENTRAL BANKING, \- MONETARY DESPOTISM.=20 \par STORE CURRENCIES: In Australia we have "shop currencies" issued = \-in consumer credits, often for considerable totals, seeing how\- = wide-spread hire-purchase still is and how much the process is \- simplified by the issue of a "store currency" (an Australian \-invention = by an accountant in Goulburn). I have not heard of a\- forgery attempt = for them as yet. It would be too easily\- discovered. Forgers depend = largely upon forced currencies with a \- large and exclusive circulation area, to remain long enough = \-undiscovered. The store currency issues, limited to hire \-purchases = and with the loans made in these currencies, which the borrowers spent = in\- the stores like ready cash, do later have to repaid by the consumer credit debots on = terms, and, alas, with government cash only. Such shop currencies could = be easily\- expanded, during an emergency, into a general wage payment = means,\- with different shops in a locality at first agreeing to mutually = \-accept and then to clear their tokens and later issuing a common\- = one, through their own bank of issue, cooperatively run. Some\- such wage payments experiments were undertaken, illegally but = successfully, and later hushed up because of the legal penalties \-that = they would have involved. - J. Z., 3/97. \par THIRD PARTY PROVISION OF EXCHANGE MEDIA AND VALUE STANDARDS: If it = is not based on unanimous consent then this is inevitably\- despotic, = wrong and harmful. It would be like a third party\- drawing on your = check account without your authori}{\f0\fs24 s}{ \f0\fs24 ation. It\- would also be like the coercive issue of = requisitioning\- certificates in "payment" for your goods, labour and = services.\- The natural issuers and contractors for exchange media and = value \- standards are the producers and traders and their associations. \-The = natural cover for their issues are the goods and services \-they are = ready to supply. Only they can rightly issue IOUs upon \- what they have to offer. No one else is morally entitled to draw = \-promissory notes upon what belongs to them, unless there is a = \-corresponding contract in each case. Only under full monetary \- freedom will the owners of goods and services be soon revealed as\- the = only able and honest issuers and users of sound exchange \-media and = sound value standards. All other exchange media and\- value standards = are a coercive or fraudulent imposition, no=20 \-matter how much it may be constitutionalized, legalized or = \-juridically defended. - J. Z., 3.8.95, 16.3.97. \par TICKET MONEY: That's the ticket! - J. Z., 3.2.97. \par TIME FACTOR: Don't invest short-term funds on medium or long = \-terms. Do not issue current purchasing power notes upon any other\- = "securities" except short-term debt certificates that represent\- goods already for sale or on the road to the retailers. Goods to\- be = produced in the future and capital assets should never be \-turned into = current purchasing power because the goods and services req uired to cover them, immediately, do not yet exist in correspondingly = increased quantities - unless they are made so\- available in = corresponding special credit transactions. - J. Z., \-16.3.97. \par TIME RISK (From comments to Fremery): Admittedly, and wrongly, a = time risk is often and wrongly taken \-by banks, with the money = entrusted to them for prudent investments only, via the practice of long = term investment of short-term\- funds. But free competition, combined with full publicity would\- = eliminate that, too. Short as well as long term loans are \-presently = also under other difficulties, which are too\- much ignored, namely the = difficulties caused by a monopoly \- means of payment and the assumed privilege of creditors to always\- = demand payment in monopoly cash, whenever it pleases or suits \-them, or = their creditors demand it from them, regardless of the \-current = availability or shortage of the monopolized cash=20 \-means of payment. That cash speculation in an artificially scarce = commodity,\- an exclusive government currency, exists and does so in = addition to the\- due time discrepancy risk. And it is, inherently, = vast, during \- payment crises, and automatically multiplying, to a large extent,\- = because of the numerical difference between the cash settlements\- = possible and practised upon the present limited cash basis and the huge = non-cash transactions customar ily taking place every day \-and every hour. So there exist at present a = timing and a means of\- payment problem. Both could be avoided by = abolishing legal and bureaucratic \-meddling rather than by adding new = meddling. - J. Z., 3/97. \par TOPOLOBAMPO, Colony, Mexican California. It ran a labour exchange = \-bank, according to Yorkshire Post, Sep. 18, 1896. Hint by A. \-Menger. = More information would be welcomed by me. - J. Z.,\-19.3.97. \par TURNOVER CREDIT & CAPITAL : Capital should not be used for = \-turnover-credit and turnover credit should not be used as\- capital. - = J. Z., 2.11.95. - See: TIME FACTOR, COVER, SHORT TERM\- VS. LONG TERM = MONEY.=20 \par UNEMPLOYMENT IN THE WORLD: According to ABC Radio News, \-25.11.96, = there are now ca. 1 billion unemployed and\- underemployed in the world. = This means that the need for monetary \- freedom was probably never greater before than it was then. (I do not = know a currency estimate of this kind. - J. Z., 28.8.02.) Unfortunately, = no unemployed in Australia, has so far shown to me, or in my reading = matter, any \-interest in the mone tary freedom self-help options. Nor has any businessman\-, whose = business is close to faltering due to the almost permanent economic = crisis. How can one get them to become interested in the \- monetary despotism analysis and the monetary freedom solution? -\- You = tell me! - I offer more monetary freedom writings than anyone\- ever did = before and also much more cheaply than it was mostly\- offered before, but all only on microfiche - and the victims of\- = monetary despotism still do not beat a path to my door. The\- sanction = of the victims applies here, too. - J. Z., 19.3.97. \par UNEMPLOYMENT THEORIES: They are so numerous that all should be = \-listed - and confronted with the facts and contrary theories as \-far = as is possible, in order to enable the patient researchers to \-finally = sort the wheat from the chaff. - We should, as\- systematically examine all such theories and all proposals to \-cope = with unemployment, as we examined disease- causing agents and\- the = various cures offered for them. - Actually, all the unemployed and = their \- sympathisers should be prepared to finance such research and to = \-participate in it. - On microfiche all such findings could be cheaply = published and combined, even by the unemployed themselves. - So far they = largely granted the "sanction of the\- victim." - J. Z., 19.3.97. \par UNEMPLOYMENT, POVERTY & AN ABUNDANCE OF UNSOLD CONSUMER GOODS & = \-SERVICES & UNDER-UTILIZED MACHINES, FACTORIES, MINERALS & = \-AGRICULTURAL LAND: In combination, they do indicate already, to \-the = thoughtful observer, that means of exchange or clearing are \- missing to bring them all together, in full employment an easy = \-sales, in a permanently booming economy. Thoughtful observers\- would = also neither expect a sufficient nor an even and reliable \- supply of a monopolised exchange medium over a whole country,\- from one = centre, nor a reliable value standard from a government-\-managed = exclusive and forced value standard, which most\- governments have a = vested interest in deteriorating, thus \- shedding their debts, while using inflation as an extra means of = \-taxation and also to increase the other tax burdens even more. = \-Governments have repeatedly declared themselves ignorant,\- guiltless and helpless in the face of galloping inflations, = mass\-unemployment and stagflations. It is high time that their victims = \-finally resort to self-enlightenment and self-help in this \- sphere. Inflations and deflations have lead to dictatorships, = \-totalitarianism, terrorism, civil wars and international wars. We = \-should not tolerate their causes any longer. Without monetary = \-despotism, especially without central banking's=20 issue monopoly \-and legal tender powers, they would be impossible. Thus = let us\- repeal or ignore all legal tender laws and central banking = powers \-and compete them out of existence by our own optional issues = and \- freely chosen value standards. Let the good money drive out the\- bad. = Begin by allowing the good monetary ideas to drive out the \-bad in your = own head. Do no longer give any credit to any of the \- myths of government managed currencies which have led us and are = \-leading us from one disaster to the other. Become monetarily\- = enlightened and enlighten others monetarily - and you will soon\- come to enjoy not only monetary freedom but all the other increases in = liberties, peace, rights and prosperity and progress \-that it would = bring. Even your defence and liberation capacities \-against the = remaining dictatorship could be increased in this \- way. - J. Z., 19.3.97. \par UNEMPLOYMENT: If we manage to provide enough sound exchange \-media = then all possible and desirable exchanges will take place \-without = difficulties - in the absence of price-, wage-, rent\- controls, = compulsory licensing, taxation, regulations, legal \- monopolies, strikes, quotas, revolutions, wars, civil wars and\- natural = catastrophes. Interventions with free exchanges are \-numerous but = monetary despotism provides the basic, major and\- most harmful one and = in consequence most other economic \- interventions arose and are still all too popular. One consequence of = this is that once monetary freedom is practised \-anywhere on earth, = undisturbed, but fully publicised, then\- and from there the whole = system of monetary despotism and all its\- consequences might become unravelled and this process might \-happen = rather fast and unexpected, like e.g. the fall of the \-Berlin Wall and = of the Iron Curtain. One of the consequences of the \- still prevailing monetary despotism is that borders are again\- = severely guarded against illegal immigrants and that the poor\- victims = of still worse systems are then forcefully deported back \- to their oppressors. - A sufficient supply of sound exchange \-media for = turning everyone's ability & willingness to produce and exchange into\- = an ability to pay, means that then everyone can freely and easily\- = exchange the ir labour, services and goods into those of others \-that he wants, at = market prices. Employers, wholesalers and \-retailers would have no = sales difficulties and all wants would be\- satisfied to the extent that = people are able and willing to give\- goods, labour and services in return. The danger might then \-rather be = over-employment or over-work than unemployment, \-underemployment or = lack of work or part time work only. No efficient \-employer would then = ever be short of means of payment to pay \- salaries and wages with - unless he was fool enough to have}{\f0\fs24 = }{\f0\fs24 wasted his resources, talent and funds and labour on the = \-production of goods which no one wants or which cannot be sold at \- a profit. That will always be the exception rather than the rule.\- A = fully publicised market and price system will see to that each \-is = mostly engaged in activities where he can serve others best and\- thus make more money than he could do otherwise. "Making money" \-would = also get a new meaning: issuing one's own money. Others would be free to = reject or\- discount your money. Only you would be obliged to accept = your \- issues always as money - and thereby you could turn it into locally at = least somewhat acceptable \-money. Instead of you chasing potential = customers for their\- scarce legal tender money, you would first appear = as a welcome\- buyer with your own money or pay all your debts with it - and\- then = these customers would be chasing you, turning your money \-into your = goods, services or labour and thereby removing it from \-circulation - = so th at you could repeat this issue and reflux process again and again. = Independence from foreign or absentee \-banks would get a new meaning = and self-government would extend to \-the cooperative banks of issue in = which you might participate, \- e.g., as a shop keeper with other shop keepers in a local shopping\- = centre's bank of issue. Shops and service supplies would at last \-be = able to serve customers whose ability to pay is maximised,\- limited only by the customers' own productive ability and willingness = to use it fully. Under these conditions the exchange \-of goods, = services and labour can go on undisturbed, under \-permanent boom = conditions - perhaps until our sun goes cold or \- supernova. \par UNEMPLOYMENT: Stop taxing employment and capital, directly and = \-indirectly. Stop taxing labour and capital and purchasing power \-by = inflation and devaluations. Stop depreciating or restricting\- o r manipulating the money and credit supply by a money monopoly \-and = legal tender laws. Stop reducing the supply of exchange media \-below = the quantity required at any particular time and place, via \- monopolisation of the money issue and central bank privileges, \-below = the quantities required to exchange all ready for sale\- goods, labour = and services. Leave the provision of sufficient and \- sound exchange media to the market, to voluntary producers and\- = voluntary acceptors. Stop meddling. Admit that you neithe r know cause nor cure and let the businessmen, manufacturers, unemployed = and under-employed help themselves. According to one estimate, there are = now more than one \-billion unemployed and underemployed in the world. = Set them and entrepreneurs \- and cooperators free to help themselves. No regulation,\- compulsory = licensing or taxation or penalty upon any self-help \-measure and free = and voluntaristic experiment in this sphere. \-Most experiments would be = flawed and would fail. But some would\- be correct and successful and spread their successful systems \-fast. = There were cases of the issue of self-help clearing \-certificates, = which were arranged within 2 hours and helped to\- prevent a crisis then and there. See e.g. John DeWitt Warner's "The = Currency Famine of 1893" (Published in: 'SOUND CURRENCY", 1895 & 1896. = Those who do not want to study all \-the previous and contemporary = experiments and all the theoretical\- literature to come to a scientifically sound analysis and\- solution, = should at least examine whether large scale and\- persistent = unemployment, apart from wars, revolutions and natural \-disasters, did = ever occur under full, known and practised freedom=20 \-to issue money tokens and engage in free clearing or only under = \-monetary despotism and in advanced stages of the inflations of = monetary despotism. It would be easiest to start with "shop-\- foundation money" issued by shopping centres. - J. Z., 16.3.97. \par UNEMPLOYMENT: Why are most kids not productive most of the time? = \-Because we are prepared to subsidize their idleness, although \-there = would be plenty of jobs for them in house and garden, \-industry, = business and agriculture, all voluntary, part time,=20 \-market rated, if all restrictions upon their creative and\- productive = activities, including taxation, licensing, labour \-laws, wage controls = etc., were abolished. Only their guardians\- should be free to set = rightful limits upon their activities. See \-: CHILD LABOUR. With adults it is the same. Apart from the degree \-of = mass unemployment that is due especially to monetary \-despotism, we can = get all the additional unemployment that we may \- want or are willing to tolerate merely by being prepared to \-subsidize = at an attractive level of pay for doing nothing. Under \-full monetary = freedom no unemployment benefits would be required, \- because full employment would result. But in the transition\- period we = should turn all such benefits into repayable personal\- loans to be = guaranteed by family members and friends and other \-unemployed and also = by the remaining assets of the unem ployed, only \-necessary work clothing and tools excepted. - J. Z., = 16.3.97. \par UNIFORM CURRENCY: We do not really need it or want it and it\-would = not be right and efficient. Imagine uniform men and women.\- Viva the = difference! Imagine all men alike and all women alike,\- uniform, no = differences among each sex. Would they still be \- individually lovable? Imagine all sex acts would be quite uniform\-, = all the time. No variations at all. Would they remain attractive = \-enough or become turn-offs? In currency as in love, under freedom, \- the good drives out the bad and that is as it should be. More is \-not = required. Least of all uniformity. Imagine anyone being able\- to issue = a uniform cheque or use a uniform credit card - upon your \- own cheque or credit card account! Viva the difference. Your own\- and = self-issued tickets would return to you and help you to run \-your = business. Where would you be if you had to redeem, with \-your goods and = services, the uniform tickets i ssued by all others \-or the uniform monopoly tickets of a central bank = run by others?\- - J. Z., 20.3.97. \par UNIFORMITY OF MEANS OF EXCHANGE & REFLUX TO THE ISSUER: The more = \-uniformity of means of exchange is enforced over a large area, = \-country or continent, the less are any issues to return, for\- purchases and debt payments, to any particular issuer. The own \-IOUs = will always tend to return to oneself. While issues for \-small shops = will be difficult to impossible, those of large\- department=20 stores or department store chains, like Coles and Woolworth (in = Australia), will be quite feasible and the local shopping centres\- will = often be able to provide most of the local currency \-required. To that = extent the popular demand that the own money\- should stay in the own country, or the own community, would be = \-realized. But it would obviously a less urgent need, since the\- = option to issue continues and since any private money tokens that \- have gone astray, will tend to suffer a discount elsewhere and will thus = be under a strong pressure to return fast to the only \-locality where = they will be and must be accepted at face value. \- Exchange arrangements between issuing centres will also speed up \-their = return. Cheques and credit cards are not uniform, either,\- but present = in practice little difficulties for making payments \- with them. A full weight gold coin, privately minted and spent in = \-trade, is far less likely to return to the issuer and the\- equivalent = return of full weight gold coins issued by others is\- only statistically certain and this only in the long run. The\- less = inherent subjective value any money tokens have, the more \-likely they = are to be used, soon, as means of payment against the \-issuer. - J. Z., = 20.3.97. \par UNIFORMITY OF MEANS OF EXCHANGE & VALUE STANDARDS: Only that\- = degree of uniformity in exchange media and value standards is = \-required, just or optimal, which fully free competition and free\- = enterprise, free trade, free exchange, free contracts and\- consumer sovereignty would provide in this sphere. The good\- money, = provided by successful businesses or monetary experiments \-would tend = to drive out the bad. - It is preferable to have\- variety in the = exchange media and value standards and no\- inflation, deflation or stagflation than to have a uniform\-, national, = continental or world currency, accompanied by\- inflation, deflation, = stagflation and mass unemployment. As \-Ulrich von Beckerath used to = say: A whole country, all its \- spheres of activity, cannot be satisfactorily supplied with\- suitable = exchange media any more than a whole country can be\- supplied by a = single bakery with fresh bread. - J. Z., 18.7.95,\-18.3.97.=20 \par VALUE STANDARD, EXPRESSION, USE AND FREE CHOICE, UNDER FREEDOM\-, = SEPARATE FROM AND YET USED IN EXCHANGE MEDIA: A value standard \-can and = should be kept separately from the exchange medium, at\- least = conceptually, and when dealing and expressing it in=20 \-exchange media. Only legal tender does inextricably mix the two\- = together and causes a lot of misjudgements, errors, wrongs and \-harm = thereby. All gold transactions in the world could,\- theoretically, be = cleared if only a single ounce of gold existed \- in the whole world and if it were, by general agreement,\- considered = to be the common value standard. Admitted is only that \-the circulation = of some sound gold weights and their daily\- trading in a free gold market is helpful to establish a sufficiently = established known market rate for all other currencies and standards = against it. If\- only a single standard weight unit existed for value \- measurements, then it would not be everywhere and often enough\- turned = over to establish its value firmly and frequently enough \-in the minds = of the public. However, abstract index currencies,\- like the "makuta" food basked standard of some Negro tribes, can\- also = exist mainly in the mind, in the imagination, and be be very\- useful, = at least for them. Eric Frank Russell's "obs" (\-obligation currency), = in one of his free communities of the\- future, reported, I believe, in "The Great Explosion", was\- carried = merely in the heads of members of the small free and\- non-violent = community described by him. Each loved to provide \-services to others, = thus acquiring their "obs", in the own mind\- and in their minds, which the others could then only offset by\- = supplying him with goods and services that he wanted, thus \-reducing = their "obs" against him. - J. Z., 3/97. \par VALUE STANDARD, IDEAL ONE: Any value standard is ideal only to = \-those who think it is ideal. The subjective value theory applies \-to = value standards, too, although gold bugs of the Austrian\- School of Economics would tend to deny that. From this follows \-the = demand for free choice in value standards as a basic economic\- and = individual human right. Only under this condition will the \- most useful ones become most widely recognized as such and thus most = widely used. But no one should be forced to give up in his\- contracts = even the worst possible value standard, as long as he \-and his part ners still do believe in it. Religious liberty and \-tolerance, here, = too! - J. Z., 7.7.95, 19.3.97. \par VALUE STANDARDS: When contracts are worded in terms of a \-monetary = unit that alters in value, an element of uncertainty is \-introduced = which is capable of upsetting all values and traders \- may at any time find themselves playing a game of chance, running = \-risks they did not intend to, and forced to speculate to save = \-themselves. It is impossible for contracts to be equitable with\- the antiquated money system now in vogue. - Badcock, Slaves to\-Duty. - = With such terms even gold and silver standards were often \-attacked, in = favour of some or the other index standard, insteady \- of becoming tolerant towards free choice in value standards. All\- of = them will prove to be more or less stable in practice. None\- will be = perfect, which makes free choice towards them not only \-sensible but = just and obligatory. - J. Z., 21.3.97. \par WORKING CAPITAL REQUIRED FOR A BANK OF NOTE ISSUE? It needs none = \-to back its notes. But it does need and office, office equipment \-and = a trained staff as well as sufficiently enlightened potential \- users of its notes. At least during crisis times it should be \-possible = to win over sufficient self-interested people to the \-self-help options = of monetary freedom. Those who continue to\- question liberty in this = sphere or even attack or slander it,\- will have to continue to suffer the consequences of monetary = \-despotism. A bank of note issue could be self-managed, cooperatively, = or in partnership, by its users and it could help all of them to turn \- their readiness to supply goods, services and labour into ready = \-although only local cash of their own, based on these goods,\- = services and labour. What more could they rightly ask for. Why \-should = they be content with anything less? - J. Z., 20.3.97. \par WRITINGS ON MONEY: See: LITERATURE, BIBLIOGRAPHY. Anyone can = \-suffocate in the swamps of faulty writings on money, in case he \-does = not come across, early enough, some sound monetary freedom\- writings. These, alas, are still relatively rare and unknown and = \-inaccessible to most, in most languages and countries. Most\- people = never encounter most of these writings at all and even the \- few who have searched for them, for decades, have usually been\- able to = obtain only a fraction of the total of all monetary\- freedom writings. = A network of these few, self-publishing in\- alternative and affordable = media like microfiche, floppy disks,\- ZIP disks, text only CD-ROM disks, could achieve complete \-publishing = in this sphere relatively fast. How can such\- collaboration be best = initiated and organized? - J. Z., 16.3.97. \par }} ------=_NextPart_000_0004_01C24F8F.E3610860--