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Free Money: A Modest Proposal

Free Money: A Modest Proposal

Free Money is an idea whose time is fast approaching for the West, from Athens to Oakland (hopefully). For other regions, the concept is not necessarily applicable.

People from both political wings – Occupy Wall Street on the left and the Libertarian movement on the right – have been considering similar ideas.

As described here, the “Free Money” concept pulls from the anti-monopolistic National Grange movement of the 19th-century; from the populist movement of the 1930s; and from the “free banking” wing of Austrian economics (a narrower concept limited to banks).

With a Free Money system, at least five types of organizations could issue currency. As this would play out in the United States, these include: the federal government, 50 state governments, corporations, banks, and citizen networks.

Free Money is “sound money” backed up by things of value: precious metals; commodities, real-estate, or stocks. Insurance for currencies is also a possibility.

At present in the United States and Europe, we find hegemonic monetary regimes circulating debt. No new money is ever created without creating more debt. This is why it is mathematically impossible to ever pay off the debt in Dollars or Euros. This is madness by design, since debt = political control.

Here, it is important to list the specific advantages of Free Money

Advantage 1: A Real Foundation for Growth and Development

A Free Money system does not lend itself to cycles of boom-and-bust. Economic growth proceeds on ever thickening foundations of real wealth.

Free Money creates synergistic feedback loops with other sectors of the economy. It is possible to imagine partnerships between citizen-networks, banks and corporations to release joint money.

Transparency makes it difficult for organizations to lend out more than their reserves. More importantly, lenders would be held in check by the overriding desire to maintain the value of their currency.

With no bailouts, the economy eliminates the worst kinds of predatory and parasitic behavior that we witness in the US and Europe.

Advantage 2: Democratic Money

Under the present system, new money is gifted to the largest banks and corporations. Then, if and when they feel like it, these elitist institutions invest downward into society. This is a top-down, hierarchic model of money creation that is designed to serve the 1%.

With Free Money, new money is injected into the economy from all directions, including sideways and from the bottom-up. This empowers sectors of the society that have never been empowered before.

By this means, a singular monetary regime (centralized, monopolistic and hegemonic) yields to a complex ecosystem in which multiple currencies co-exist. Sometimes, these currencies are complementary; sometimes they are competitive.

Advantage 3: Fusing the Values of Markets and Societies

Free Money moves beyond the politics of “left” and right.”

After all, issuers of currency (or participating organizations) include governments, corporations and banks but also citizen networks, cooperatives and unions, many with populist orientations.

Instead of interest rates being fixed by a coterie of central bankers behind closed doors, in a Free Money system the cost of borrowing is not a cause but rather an effect, emerging from bottom-up and system-wide “information.”

Free Money promotes traditional communities rather than destroys them: information sharing, cooperation, pooling of resources, horizontalism, and peer-to-peer networking all contribute to solidarity.

In fact, these practices strengthen families, nuclear and extended, so that they become, once again, real economic units.

Free Money strengthens both consumer-driven “free markets” and, simultaneously, “communities” that can advance standards for health and safety.

It is a paradox: more economic growth and, simultaneously, more social stability.

Advantage 3: Complexity, Resilience, Adaptability

At present, the fate of 400 million Europeans hinges on a single, debt-based currency; the fate of 315 million Americans hinges on a single, debt-based currency.

The level of vulnerability and exposure to disaster is mind-boggling. Indeed, the central bankers themselves keep reminding everyone that we are on the verge of catastrophe.

Not being considered are obvious intermediate remedies: the liquidation of much of the debt and the direct issuance of debt-free, interest-free Dollars by the Treasury Department (eliminating the Federal Reserve System).

Meantime, central bankers in the US and Europe urge governments to impose austerity and/or lower deficits. Perhaps this is an effort to deflect attention away from the more systemic, fundamental question of money creation.

Instead of rearranging the deck chairs on the Titanic it is time to build a new ship, or a new fleet, this time with boats of all types and sizes.

With Free Money, currencies become memes (evolving units of knowledge and information). In order to survive and reproduce, currencies will need to retain their value and circulate in a manner contributing to growth and development. And wide swaths of the population can engage in this process, even ordinary citizens.

Free Money complexifies the economy: more choices, more possibilities, more options, more solutions.

Advantage 4: Beyond Tyranny and Empire

In the core West, debt-based monetary regimes are the principal forces behind domestic oppression, imperialism and war.

Debt-based monetary regimes operate over and above the nation-state system, over and above run-of-the-mill banks; over and above corporations.

Central bank managers – the front-row, visible administrators – are decent, normal people. That is why they have been pushed to the front row.

The forces behind debt-based monetary regimes are more hidden, intentionally so, and operate via informal networks. Invisibility is the first and highest rule – the prime directive. It should be mentioned that profit is not the primary goal; it is political control. Debt-based monetary regimes provide the template, the mechanism, for control over vast populations.

It did matter, once, who owned the means of production. It did matter, once, the governmental mix between public and private, and the rate of taxation.

Today, however, for the core West, there is only one question that matters: Who prints money? Everything else is secondary, even minor.

With Free Money, the nefarious forces behind monetary regimes are cut out of the picture altogether.

Money is no longer debt; there is no need for debt servitude. There is no need for imperial expansion; business is no longer done at gunpoint.

The western world – from Athens to Oakland – should move beyond the debt prison that is central banking.

As events in Europe suggest, the very survival of western civilization, as we know it, depends upon a transition towards a currency system that works for humanity, and not against it.

The table is visible here:

Andrew Bosworth


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