John Zube, 7 Oxley St., Berrima, NSW 2577, Australia   7 August 92 - 10/7/92.

Klaus Falke,

Dear Klaus,
            I received your letter and the draft some days ago but did not reply immediately because I am still at the tail end of the worst cold I have suffered under for many years.

As for the draft : You and your designer of it know probably best what will appeal to your potential customers. I know only what appeals or does not appeal to me.

A prospect for another barter clearing exchange between businessmen has no appeal for me, no matter how well it is drafted. It does bring the participants some advantages and it amounts to another application of the clearing principle but it does not bring the advantages of the clearing and issue principles to the ones who are still almost completely excluded from their practice now - and still almost completely misinformed on the theories behind them and the promises they hold out for them : employees, unemployed and masses of refugees.

If, indeed, the German legislation on this subject has significantly changed in recent years then I would, indeed, like to hear about and film any details, including the relevant paragraphs and jurisdical precedents applying it. Any truly significant breach in the legal structure of monetary despotism in any significant country could lead to the rapid bursting of the over-sized and over-pressurized balloon of monetary despotism. Alas, I have learned not to trust German legislators, regulators, licensing authorities and courts and judges. If they haven't already blocked freedom options in dozens if not hundreds of ways, they are ready at any time to do so, almost immediately and even retroactively. Like Eastern Europeans, we still have most of those legal and bureaucratic chains around our necks and limbs and on our backs. And the bolt cutter of individual secessionism may not yet be freely applied by the more enlightened victims. And they would better be suitably armed, organized and militarily trained, too, to uphold self-help based on free exchanges between them. When I left Germany in 1959, I escaped what someone a few years before had estimated to be ca. 5 million police regulations. How many are there now? Naturally, I cannot vouchsafe for the accuracy of this estimate but I do know that in my own professional sphere, social insurance legislation, there was such a flood, that from one new law in 1945 we turned to over 1,500 and single laws became already so long and complicated that specialists were appointed to deal with the application of a single paragraph in some of them. All the time basic rights, honesty, liberty and market economics were almost entirely ignored in that sphere or even willfully suppressed. Not that Australian bureaucrats and politicians are exactly unproductive when it comes to the output of laws and regulations.

Now you try to make me believe that in one of the most despotic aspects of modern States and in one of the most politicized and bureaucratized ones, namely Germany, central banking powers have been restricted and exposed to some competitive actions? It will take a good deal to convince me.

If there was some significant legislative oversight or loophole, I would not expect it to last. If it had been intentional, I, in your place, would do my best not only to use it but to trumpet it from the rooftops, hoping that many others would join me or compete with me soon. One swallow alone does not yet make a summer.

Your draft is clearly stating that people could grant each other commercial advantages and save cash outlays between themselves, especially when computers aided them in searching out such opportunities. But it does not explain sufficiently, in my eyes, the liberating principle and practice of clearing and its unlimited potential and its nature underlying even every cash transaction. Nor did it explain that so far, by various laws, it had been interdicted, which one usually does not consider as "currency laws". E.g. : Gewerbeordnung, Par. 116 for wage payments, "Gesetz gegen den Missbrauch des Bargeldlosen Zahlungsverkehrs", a ca. 1934 (?) Nazi law, & the prohibition of cheques that precluded cash redemption but were really to be for clearing ONLY. And at least in Berlin there existed a rule against clearing tax debts against long overdue payment claims agaist public authorities. Even Rabattmarken were legislated against by a book-sized legislation and probably still are.

When the Beckerath circle, mainly Beckerath himself, drafted the Berlin Programme against massive unemployment and economic dependency of West Berlin, we tried to find and list all legal obstacles and found quite a few but were certain that we had not yet found all.

Karl Walker tried to battle the restrictionists in court, in vain.

Most people simply cannot imagine that any or many legal restrictions exist in this sphere at all. There are hundredthousands of Social Credit followers, for instance, who have not yet discoved that the central bank system has an issue monopoly and has had it for many decades - and they demand such a monopoly for it and expect wonders from it.

Then there is the question of suitable timing of any new issue or clearing experiment, one that aims at additional turnovers. Here the question of public opinion, of confidence or business climate, is significant. When the business community imagines that things go well enough, without new experiments, then new experiments are hard to start and to maintain. Innovations are then welcome only within the existing framework. I do not know about the present condition in West Germany. Is there now enough of a deflationary situation to make monetary experiments appealing? In Eastern Germany this situation may exist - however, there are still other problems there and still worse opinions and attitudes, established over decades, to overcome.

And since other countries have run their national forced and exclusive currencies so much worse than Germany has, since WW II, there is also, I presume, a strong body of opinion that sees nothing at all wrong with the DM and how it is run and maintained. Insofar you would have an uphill battle.

The people who would be most interested in self-help options, if they could understand and readily apply them, would be unemployed, especially the refugees. Alas, they are even more under the thumbs of the authorities than the rest of the German population, ofte herded or kept in camps with insufficient employment options and under special work and housing and residency restrictions. Plans and actions for their rapid integration in the process of production would interest me. However, the refugees themselves, most of them, still expect too much from the existing system and are granted too little liberty by it. Moreover, they are widely perceived as unwelcome competitors, by ignorant people and thus they have become unpopular.                                                   

Businessmen and employers are ill educated for monetary freedom and unemployed and refugees even more so. And they have little interest in monetary and clearing studies.

Rather than exluding several prospects who would be internal competitors of the same type, I would try to sign up as many people as possible as members - and promote similar exchange circles elsewhere or in the same city or take up contact with existing ones. By linking up with other circles, having similar internal imbalances, because they, too, constitute only fragments of the whole market, the chance to flatten out these imbalances increases and the horizon of the members widens. With sufficient linkages something like an all over internal market for the members of interlinked clearing centres can finally be achieved. Ultimately the linkages could cover not only Darmstadt but Germany, Europe and the world. If the bureaucrats leave you alone. A big IF.                

Especially when one consideres the mercantilist mentality of most such circles, more based on excluding than including relationships with potential or already existing competitors and their tendency to regard their listings as business secrets.

Thus, I would rather say, do not reject any but book them, at least, as prospective member of exchange circle 2, 3 or 4 - and delegate the development of these and subsequent circles to them and make e.g. copies of your software available to them for this. However, most of the potential members may push for exclusion rather than for inclusion. Buy "Made in Germany" and here "Buy Australian" - expresses an all too popular anti-economic and anti-free trade stance. You find the same attitude on a smaller scale - from medieval townships and their guilds onwards.

Not by exclusion of participants but ultimately only by inclusions of all could all exchanges become easily cleared, even if only in stages, passing through a number of clearing centres. Each would "pay" with his job, service or goods and would be "paid" with those of others. 

If we try to think away, for a moment, the mere mask or "Schleier" of money transactions, this is what happens anywhere and at any time, anyhow. As long as we remain masked against or camouflaged against this reality we will not understand and try to limit clearing rather than try to expand it to the fullest.

But trying to be realistic or down to earth : Seeing the small number of members and their possible mutual services, one would have to question how much of your immediate or near term objectives they could also achieve merely via a mutual purchase, order and discount agreement. The order system involved would, naturally, have to grant larger discounts for larger orders and those given more in advance. - But would this really improve upon already locally customary discounts of traders to traders?
Could improved clearing later be added to membership and service lists and attractive discounts for members?

Is there any chance that members would acquire shares in the exchange and base their exchanges on the exchanges of such shares between them and on record-keeping of such transactions, always assuming that they would be able to keep their "share accounts" roughly in balance?            

Admittedly, whatever would be economically possible and desirable is not necessarily legal. Generally I do hold that almost all loopholes are blocked and that we can advance only by ignoring in our theories and practices the whole legal mess.

Assume that 100 or 10000 members succeeded in settling almost all their requirements in this way between them, without cash and that this activity would amount to most of their total business. How then are they to satisfy the cash requirements which Big Brother will suddenly insist upon? Naturally, you could assume that your circle will always only achieve turnovers amounting to a fraction of the business of their members and that out of their cash savings, by being members or out of other cash transactions, they could satisfy the additional taxes in legal tender, too. But I can imagine that some of the more successful LETS green dollar recipients came into trouble in this way.

Seeing that most of you prospective members are already familiar at least with conventional clearing, over their current accounts, one can take two positions : It is not necessary to tell them anything about clearing or : Since they understand already something about it, one could try to teach them the full potential of clearing and its expansion into the wage and salary payment sphere and into the mobilization of the resource existing in unemployed workers and refugees.

When expanding explanations in this direction, one should stress the risk of all past and present non-cash transactions, namely that creditors were explicitly or implicitly authorized to demand cash, instead - which prevented the unlimited growth of the clearing system and led to its frequent crashes. Any additional sudden and unforeseen cash demand could then lead to a chain reaction - to more and more cash demands at at time when there is already a cash shortage and the cash saving non-cash or clearing system is collapsing.

In several passages, it seems to me, not so much knowledge of and belief in clearing options was expressed but a faith in the abilities and intelligence of computers, as if they could save us understanding, thinking, private planning, decision making and actions, as if the whole exchange process could ultimately become entirely computerized. That faith I do not share. But as information gatherers, classifyers and retrievers, advising us on many of our options. they can be very helpful.

To me illustrated schemes rarely provide sufficient clarity. I prefer old-fashioned verbal and logical surveys. One of the basic ones is that of Aphtonios : Quis? Quid? Quibus auxiliies? Cur? Quomodo? Quando? ( If I remember right and if my translations is right : Who? What? By what means? Why? How? When? ) All too often one or several of these basic points are neglected in planning and actions. Rudyard Kipling expressed it, much later, thus : I keep six honest serving men. They taught me all I knew: Their names are What & Why and When and How and Where and Who.
                                                                              
People who know each other and have and use clearing options, will always tend to evade taxes on these deals, too. But since, I believe, in most of your cases they would be employers and have still employees with the class warfare mentality disturbing their minds, they would thus leave themselves upon to more denunciations to the the tax office. To leave no record is sometimes as indicative as to leave a paper trail. Naturally, if all your planned transactions can be done quite legally, all the better.

These notes must suffice for the time being. I could attempt to transcribe some more notes I made on the second reading but will leave that to a future exchange on this, if you want any. Rather than hearing the marketing expert, I would have liked to see your own views on the subject in your own words. As it is, we are practically conversing through a diplomat - which does not always contribute towards better understanding, particularly when this diplomat is making a public speech.

Mind you, I am neither a practical businessman not do I claim to sufficiently known the history and theoretical potential of clearing and how to manage a clearing centre best. I just believe that I know of some points or aspects or experiences which are frequently overlooked. Beckerath would probably have supplied you with a detailed point by point criticism and an alternative draft within days - if he would have had any faith that a loophole would now exist for such an advance.

I have just finished another transcript of notes on free banking, alphabetized, and it came to 192 K. Once integrated with several previous such files and some to be transcribed still, such alphabetized notes on free banking could form the beginnings for a handbook on free banking. If accessible on line, it could lead to more contributions and corrections this way - and should be accessible periodically in fiche and in disc form, apart from on-line information some may be able to offer and others to ask for. It would need much more than my own entries to be attractive and informative enough. But it could make a beginning.

I have not yet updated the free banking bibliography I had when I visited you. Stacks of material wait for filming. Still all of the additional Beckerath material that I collected. But at least I filmed this older bibliography in PP 1022.

Do you see any way to launch in any German newspaper or radio or TV a quest for more information on Ulrich von Beckerath, particularly his pre-1943 correspondence? When I asked the Berlin Tagesspiegel to include such an information request in their Kultural Notes, they declined, because he had not been a regular columnist or published letter to the editor writer with them. What really happened was, that all of his contributions none did pass through their internal and self-inflicted censoship barriers. Naturally, one could advertise but such adv. are costly and would be swamped in the mass of commercial and other cultural notices. Beckerath had at least one long term correspondent in Darmstadt. I am not sure, offhand, whether it was e.g. a Dr. Runge. Most of Beckerath's post 1943 correspondence I have got by now and do intend to film.

If you should ever meet up with S. Blankertz again - probably still burdened with family responsibilities - you might ask him what he thinks of getting more of his old anarchist correspondence with Kurt and more of his papers and books filmed in my series. Kurt died last year. I know only of Timm and Mueller considering a revival of Mackay Society activities. While he was a driving force, he also drove many away. Such a society could, thus, blossom perhaps better without his help. Last contact I had with S.B. was at the Freenetwork Festival near Cologne, in 1986. Alas, there we had as strong misunderstanding on the possibility of referenda. He condemned all of them as threats to liberty and would not hear of my defence of them - if restricted to upholding and restoring basic rights and liberties only, without help or hindrance from bureaucrats and politicians. When one's attention is focussed on a fixed idea and definition then one tends to become blind to all other related ideas and definitions. I still think very highly of him. He is one of the few individualist anarchists who has followed the market theorists in the rest of the world.

Sorry that I cannot be more helpful to you at present. I will not film the draft but at most my letter.

I wish you success with your experiment as a business and hope that one day it might even develop into a fully free clearing centre within a world-spanning network of them.

Do not be too disappointed if your appeal or your project should fail. In the cause of liberty one has to try again and again.  I believe that it was William of Orange who once said : In the cause of liberty one needs no hope to begin and no success to continue.
Naturally some well founded hopes and certain successes would help.

Sorry for my writing to you in English but I presume that you can cope with it. If not, I will make the extra effort, required by now, next time, and write in German.

I have as yet seen no good anarchist or libertarian or free marketeer review of the absurdities committed in the unification of Germany and in the supposed introduction of market economics in Eastern Germany. Replacement of one bureaucracy by the other did have its tragi-comic aspects, I believe and in some points led even to a reduction of liberties rather than an expansion. ( Re-introduction of seniority system and age barriers and of progressive taxation.) But then, living as far away and dependent only the occasional and all too flawed journalistic report, I have missed probably most of the developments. 

1022, 1006.         PIOT, John