Category Archives: Basic Concepts

Transcending the present political money system–the urgent need and the way to do it.

In case you missed my webinar and would like to see the presentation, here is the recording that was made. The first part is a specially prepared slide show presentation titled, A World Without Money, Interest, and Debt: A Pathway Toward Economic Equity, Social Justice, Freedom, and Peace. The webinar concludes with a short video titled, VITA: A worldwide web of exchange, Locally controlled but globally useful, in which I describe my vision of a new decentralized, peer-to-peer, system of exchange.
The question and answer portion is not include.

Updates:
A PDF file of the slide show plus some added pertinent slides can be viewed here.
I’ve recently added an edited recording of the discussion that followed my presentation. You can view it at Q&A Discussion.

Upcoming webinar: Transcending the present political money system–the urgent need and the way to do it.

Jefferson_EndOfDemocracy2
This Wednesday, Nov 24, 2021, I will be presenting one of the most important webinars I’ve ever done. It is being organized by Prof. Lubo Jankovic of the Centre for Future Societies Research at the University of Hertfordshire in the UK.

Here is the description and link.
Transcending the present political money system-the urgent need and the way to do it, by Thomas H. Greco, Jr.

Date and Time: Nov 24, 2021
at 4:00 PM London [11:00 AM New York, 09:00 AM Arizona, 08:00 AM Pacific time]
Join Zoom Meeting
https://herts-ac-uk.zoom.us/j/96844432493?pwd=VXZZN0dSblVxUDJMZXdlNU4zcDR2Zz09

Meeting ID: 968 4443 2493
Passcode: 099266

Abstract
This presentation describes the fundamental role of the global system of money, banking and finance in generating social injustice, economic inequity, environmental despoliation and violent conflict.  It outlines the collusive arrangement that exists between finance and politics that has created the global central banking regime to centralize power and concentrate wealth in ever fewer hands and explains how the creation of money by banks as interest-bearing debt causes a growth imperative that is destructive to the environment, democratic government, and the social fabric. But more importantly, it describes the positive developments that are emerging to create a new “butterfly economy” and a civilization in which everyone can live a dignified life.

Thomas H. Greco, Jr. is a preeminent scholar, author, educator, and community economist. He is widely regarded as a leading authority on moneyless exchange systems, community currencies, and financial innovation, and is a sought after speaker internationally. He has conducted workshops and lectured in 15 countries on five continents and has been an advisor to currency and reciprocal exchange projects around the world. He has authored numerous articles and books including, The End of Money and the Future of Civilization (https://beyondmoney.net/the-end-of-money-and-the-future-of-civilization/).

E. C. Riegel and Private Enterprise Money

Announcing,  The Monetary Wisdom of E. C. Riegel: An annotated précis of Private Enterprise Money, with commentary compiled by Thomas H. Greco, Jr.

I have long credited E. C. Riegel as the foremost authority in shaping my understanding of money and the process of reciprocal PEMexchange. His penetrating insights and proposals for a new independent system for the exchange of value have provided a solid foundation for my own work of developing improved exchange mechanisms that I consider to be crucial to the future of civilization.

Riegel’s book, Private Enterprise Money, published in 1944, is perhaps the most complete and concise statement of his insights and proposals. For that reason I have undertaken the task to extract what I consider to be Riegel’s most important insights, interpret for the contemporary reader the passages that seem difficult to understand, and articulate the few points on which I disagree with Riegel. With that said, I urge every serious student of money and exchange to read Riegel’s book, Private Enterprise Money, in its entirety, as well as Riegel’s other works which are available to be freely downloaded from my website, BeyondMoney.net.  

Solar Dollars — a community currency based on real value

In August of 2016, I posted a white paper that described in some detail how a private or community currency ought to be issued on the basis of real value, which in this case is the electric energy from renewable sources that a utility company provides to its customers. My fundamental objectives in implementing such a program are:
(1) To incentivize a more rapid shift from fossil fuel energy sources to renewable sources,
(2) To help communities to become more resilient and self-determined, and
(3) To enable the decentralization of economic and political power.

The immediate benefits of this plan are:

  1. It provides the issuing company with an interest-free source of short-term credit,
  2. It provides the community with a sound and reliable supplemental means of payment that can:
    • Augment the supply of debased and often unavailable official money,
    • Circulate throughout the local community connecting the unused capacity of local businesses with the unmet needs of people in the community,
    • Remain within the local economy to encourage local spending and local economic development.

Once this basic concept of “monetizing” the value of real goods and services is understood, it can be applied to any goods or services that are in steady demand and are readily available for sale by a trusted issuer(s).

In July of 2021, I was invited to give a presentation on the Solar Dollar currency at a virtual conference that was sponsored by the Zero Carbon Lab at the University of Hertfordshire (UK). That presentation was recorded and can now be viewed on the Zero Carbon Lab website at http://zerocarbonlab.com/rzcc-2021/videos/ThomasGreco.html or here.

The white paper, Solar Dollars-a private currency with multiple benefits, is still available. You are welcome to quote it with proper attribution, or download and distribute it provided it remains unchanged.

Special Note:
This same basic currency model can be used not only to promote the shift to renewable energy but also to promote other desirable economic shifts. The fact is that the value of any product or service that is in everyday demand can be monetized in the form of a private currency. Providers of organically produced food, for example, could issue Organic Dollars or Bio Dollars by using them to pay their contractors, suppliers, and employees, in just the same way as we described for the issuance of Solar Dollars.

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Newsletter May 2021. Upcoming podcast series on “Our Money System,” and other news

In this issue:

  • Upcoming podcast series
  • Conversation with Tim Jenkin, Edgar Cahn, et al
  • Latest post–How, Then, Shall We Live? — What we might learn from the Amish
  • Markets and finances in today’s world
  • U.S. foreign policy, the primary threat to peace
  • Travel plans

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Upcoming webinar series

I will be conducting a free three part webinar series for the Henry George School of Social Science. Here is the description and registration link:

Our Money System – What’s Wrong with it and How to Fix it
A critical look at money & credit, their political and economic implications, and innovations that are making conventional money obsolete.

About this event

HGS_WebinarIn this webinar series, renowned monetary reformer Thomas Greco Jr., will present our system of money and banking, how it has evolved, why it is problematic, and where it is trending. The series will also look into past, present, and future exchange and payment alternatives, like Depression-era script, local and private currencies, commercial trade exchanges and LETS systems that apply the “credit clearing” process, and the more recent emergence of crypto-currencies and blockchain ledgers and their potential role. It will include discussion of how these have evolved, their advantages, limitations and future potential and what needs to be done to take them to scale.

The speaker, Thomas H. Greco, Jr., is the author of The End of Money and the Future of Civilization. For more than 40 years Mr. Greco has been studying, writing and lecturing and advising on the subjects of money, exchange, and political economy. His distinctive insights into these subjects and his innovative approaches to a more equitable and sustainable economy have made him a sought after speaker and advisor worldwide. His full bio can be viewed here.

Topics

  • WHAT is money?
  • WHY do we need money?
  • WHAT is wrong with our money system?
  • Can we live without money?
  • How can business be conducted without money?
  • What are the economic, social and political implications of monetary policies and systems?
  • What is the likely impact of present day monetary innovations?

May 21 – Session 1 will provide an overview of the present system of money and banking, how it has evolved, how and why it is problematic, and where it is trending. Mr. Greco will talk about the interest-based debt-money system, how it causes the growth imperative and the politicization of finance and exchange, and the political and economic consequences of its continuation. He will outline the fundamental concepts of exchange and finance and the principles upon which sound and sustainable systems are being developed. Participants will be asked to read or listen to some specific materials in preparation of the subsequent sessions.

June 4 – Session 2 will be a more interactive webinar that will provide ample opportunity to discuss whatever questions have been evoked by the previous session and the assignments. These might include topics like inflation, depressions, asset bubbles and busts, the savings and investment functions, and government responses to shocks like the 2008 financial crisis and the more recent pandemic. This will lead into a discussion about possible solutions to the problems that the present system causes, and the role of local currencies and other alternatives for the exchange of value.

June 18 – Session 3 will concentrate upon past, present, and future exchange and payment alternatives, like Depression-era scrip, local and private currencies, commercial trade exchanges and LETS systems that apply the “credit clearing” process, and the more recent emergence of crypto-currencies and blockchain ledgers and their potential role. It will include discussion of how these have evolved, their advantages, limitations and future potential and what needs to be done to take them to scale.
Please note that each session will start at 6 PM Eastern Time (3 PM Pacific and Arizona time), and end at 7:30 PM (4:30 PM).

Register Now!

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Conversation with Edgar Cahn, Tim Jenkin, et al

I was recently the featured guest on Taking Back Our Economy, a podcast series hosted by the Community ExchangeEdgar-Cahn-photo-600x599 Alliance. In this episode I discuss principles of exchange, the various kinds of systems that have been tried, and what needs to be done to realize their full potential, with Tim Jenkin, founder of the Community Exchange System, Edgar Cahn, founder of Time Banking, Anitha Beberg, Christine Gray, and Martin Simon.

You can tune in to the discussion on YouTube at https://youtu.be/BtIG9YLySD4.

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My latest post: How, Then, Shall We Live? — What we might learn from the Amish

While most of us have been caught up in the high-tech, consumerist, debt-ridden rat-race, there are certain groups that have been thriving on low-tech, low-consumption, earth-friendly, cooperative approaches to living. Notable randy-fath-Amish-Cramong these are the Amish communities which are characterized by their strong social bonds and mutual support. In the present chaotic times as we struggle to reinvent civilization there may be something important to be learned from the Amish. Read about it here.

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Markets and finances in today’s world

The biggest players in money and markets today are central banks and central governments. Their market interference is massive and largely overrides the effects of other market player’s actions. If you have not already done so, please read my article, Money and Finance Have Now Been Completely Collectivized.

One complicating factor that market analysts and investment advisors universally fail to mention, and probably do not even recognize, is the withdrawal of large segments of the population from the work force, and from the “old civilization.” In my view, a new civilization has been emerging for decades from the bottom upward and that process is now accelerating as people lose faith in the dominant centralized financial, economic, and political systems and structures. The new civilization is being built on relationships of trust that already exist among family members and friendship groups and within local business and political circles. As corruption, malfeasance, and errors in the dominant centralized structures become more egregious and apparent, this process is bound to accelerate further until the old systems become irrelevant. My “Walking Away…” series of articles (Part I, Part II, Part III) articulates in more detail my thoughts about that.

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U.S. foreign policy, the primary threat to peace

Two or three years ago in my efforts to gain a deeper understanding of the political dynamics of the Middle East I came across Graham E. Fuller, a Middle-east analyst and former CIA operations officer. Reading his book, Turkey and the Arab Spring, gave me an appreciation for the pivotal role the Turkey plays in the region and in the Muslim world generally. Since then I’ve been following Fuller on his website and on Facebook.

In his recent editorial, US primacy is a self-fulfilling threat generator, Fuller provides an excellent overview of US government foreign policy and the US role in the world. In it, Fuller states:

I have no wish to launch into a litany of American sins, failures, or mistakes by omission, or more often commission, that have by almost any measure been disastrous for so many foreign countries “visited” by U.S. military operations. The list is long and well known — Iraq, Afghanistan, Syria, Libya, Pakistan, Somalia, indirectly in Yemen in most recent times. He then nicely summarizes the essence of US foreign policy, saying, “…it’s hard to get off that enemy list when you actively assert your independence from Washington.”

The editorial is brief and well worth reading. You can find it on Fuller’s website.

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Travel Plans

As spring passes and summer begins, we wonder about the possibilities for travel and tourism to return to anything like normal. Will “vaccine passports,” testing, and/or masking be required to travel? If so, what form will those passports take, paper certificates, digital apps, chips embedded under the skin? Will governments impose quarantine requirements for people entering their country, as many have been doing for more than a year? If one does travel abroad, what are the chances of being stuck there and not allowed to leave?

Considering all that, it seems unlikely that I’ll be doing much traveling this year.

Stay alert, keep learning, and seek your inner peace,

Thomas

There ain’t no such thing as a free lunch: Principles of Credit, Exchange, and Finance

“There ain’t no such thing as a free lunch.” That’s a well-known adage that goes back a long time, but it was popularized by famed economist Milton Friedman and expressed in his 1975 book titled, There’s No Such Thing as a Free Lunch.

But the abuses of political money by national governments, central banks and the banking establishment and the consequent separation between the financial economy and the real economy have made it appear that there may be a free lunch after all. But we must not allow ourselves to be misled. It may not be immediately apparent but there is always a price to be paid when fundamental principles of reciprocal exchange are violated.

There have been many in the alternative currency and exchange movement who seem to think that this principle does not apply to their proposed schemes and the landscape is strewn with the wreckage of their folly, but the lessons from that experience are yet to be learned. Political currencies have the power of governments and huge financial institutions behind them and are able, through legal tender laws and taxation, to compel the circulation of their currencies and hide the ill effects of their malfeasance. Private and community currencies however must stand on their own merits without the crutch of legal compulsion and must therefore demonstrated their superiority in enabling the reciprocal exchange of goods and services in the marketplace.

Any would-be innovators in this realm must therefore understand the fundamental principles of currency, credit, investment, saving, and the exchange of value. That is a rather vast territory that I have been writing and lecturing about for a very long time. In this post I wish only to state explicitly the fundamental principles that must underlie the design and implementation of any private, community or complementary currency.

Principle #1, the essence of a currency: A currency is a short-term credit instrument of the issuer.
Currency is created when a provider of real value accepts it in payment from issuer, and it is redeemed and destroyed when the issuer accepts it back in payment for the goods or services that they provide. It may change hands many times between issuance and redemption.  

Principle #2, Currency circulation: The circulation of a currency is driven by the issuer’s obligation to accept it back.

Corollary #1.a.: To be sound, credible and effective, a currency must be spent into circulation by one or more trusted issuers who are ready, willing and able to deliver valued goods or services that are in regular demand, and to accept the currency back as payment.

Corollary #1.b.: A currency that is issued in such a way monetizes the value that is inherent in the goods and services that the issuer is ready, willing and able to sell immediately or in the very near future. In other words, it takes the value that is inherent in those real goods and services and converts it into a form (currency) that can be used to make payments.

Definition: Liquidity is the ability to pay, i.e., to meet immediate and short-term obligations.

It has long been recognized that the issuance of private, non-governmental currencies is not only possible and desirable, but also necessary if true freedom and government “by the people and for the people” is to be achieved. It is entirely feasible that any community can create its own liquidity (means of payment) by monetizing (in the form of its own currency) the value inherent in the goods and services produced within that community.

This is not a new idea. Arthur Kitson made the same point 125 years ago:

To the average man, a currency that has not the authority or stamp of government is inconceivable; and yet there is no good reason why communities should not create and control their own currency without the aid or intervention of governments, just as they incur debts or liabilities without such aid or intervention. —Arthur Kitson, A Scientific Solution of the Money Question (1895), p. 279.

Addendum 1: This may help to further clarify the matter:

Credit is given and received in each transaction as follows: a seller gives credit to a buyer when he delivers real value in exchange for the buyer’s promise (his/her currency or i.o.u.) to reciprocate at some time later. The buyer reciprocates when he/she later becomes a seller and accepts his/her previously issued currency as payment.
ReciprocityCircuit

Addendum 2: One of my correspondents on LinkedIn replied to my post saying this:

During high interest phases, credit clearing so clearly offers many benefits. In the current low or no interest phase these seem to be less obvious. Unless the community currency can avoid inflation maybe? But in a way inflation helps productive businesses to repay their debt. So where do you see the biggest benefit now?

That comment highlights some common misconceptions which I answer as follows:

Interest savings are a minor benefit of direct credit clearing. The BIG benefit is that it makes buyers and sellers independent of money and banks. This is especially important when money is made scarce, as it usually is for small and medium sized businesses (SMEs) who are often not able to get credit from banks, and when they do it is on onerous terms: high rates of interest, burdensome repayment schedules, pledge of collateral, and the inclination of banks to foreclose and force liquidation of assets rather than help a business through a difficult period. Credit clearing provides a friendly independent source of liquidity that is limited only by the value produced by businesses that are part of the credit clearing circle.

Regarding inflation, it is never a good thing for SMEs or for most consumers. Inflation “helps productive businesses to repay their debt” only if the business has sufficient market power to raise prices of the things it sells and/or to keep the cost of inputs like labor and materials low. That may be true of big corporations that dominate those markets, but not for SMEs who get caught in the squeeze and are unable to raise their prices enough to keep up with inflation or to prevent their costs from rising.

The corporatocracy would like us to believe that the effects of inflation are the same for everyone but they are not.

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My latest interview with Greg Magarshak

This discussion between Thomas H. Greco, Jr. and Intercoin founder Greg Magarshak covers a wide range of topics including the principles of sound currency issuance; mutual credit clearing; proper allocation of credit; the problems of centralized power, depression, and inflation; empowerment of small businesses and local communities; crypto-currencies; universal basic income (UBI), and more.  

Moneyless Exchange in One Easy Lesson

When the division of labor has been once thoroughly established, it is but a very small part of a man’s wants which the produce of his own labor can supply.  – Adam Smith, Wealth of Nations.

We have become so accustomed to using money to get the things we want and need that most people find it nearly impossible to conceive of any other possible way. Whenever I tell people that my work is about exchanging goods and services without using money they invariably ask, “Oh, you mean barter?” Then I go on to explain that barter requires a coincidence of wants between two people — I must have something you want, and you must have something I want. No, we must think beyond barter.

Through intensive study of monetary history and exchange principles extending over a long period of time I’ve come to a deeper understanding of the exchange process and the possibilities for advancing beyond our present dysfunctional and destructive monetary system.

“Mutual credit clearing” is a process that enables producers to trade goods and services directly among themselves without the need to use money. The credit clearing process is not a new invention; banks have been using it for a long time to settle accounts among themselves. But businesses can also use it to trade with one another and settle accounts among themselves, and they have been doing so for the past several decades. There are now scores of commercial “trade exchanges” operating around the world to provide credit clearing services for their tens of thousands of member businesses. While these exchanges are often referred to as “barter exchanges,” they do not do barter in the conventional meaning of the word. Rather, they utilize the collective credit of the members themselves as the internal payment medium. Members earn “trade credit” when they sell goods or services to another member, and they spend trade credit when they buy goods or services from another member. It is a simple process of accounting for value given and value received. When a member sells something their account is credited (increased) and when the buy something their account is debited (decreased). 

What enables the system to work is the fact that some trusted members who offer for sale goods and services that are in high demand are allowed to spend trade credits before they earn them. In other words, these trusted members are given a line of credit against their future sales; their account balances are allowed to be negative, up to some predetermined limit that is based mainly on the amount of value they are ready willing and able to sell to the other members.

Here, in a minute and a half, one of the major trade exchange operators explains the processes in its utter simplicity:

Note, this is not meant to be an endorsement of Bartercard or any other company. I refer to this video only as a good description of how credit clearing works to enable producers to trade among themselves without needing to make payment with conventional money, nor the need to borrow from banks.

And in this video a member of another trade exchange describes how credit clearing works for his business:

Properly organized and managed mutual credit clearing exchanges provide an effective, stable, and sustainable means of creating interest-free local liquidity and enabling companies and individuals to enhance their opportunities for success despite the adverse policies of banks and governments.

A more complete description of the credit clearing process can be found in my book, The End of Money and the Future of Civilization, particularly Chapter 12, Credit Clearing, the UnMoney.

Addendum: This subject is further explicated in my recent conversation with Greg Magarshak, founder of Intercoin, in which we discuss the essence of money, reciprocal exchange, credit allocation and whether or not cryptocurrencies and/or blockchain have a role to play in the reciprocal exchange process. A particularly pertinent clip is here. The entire two hour conversation can be seen at https://community.intercoin.org/t/interview-with-thomas-h-greco-community-currency-economist/1341.

Reclaiming the Credit Commons

The concept of the “credit commons” is something I articulated at length in my 2009 book The End of Money and the Future of Civilization, along with a thorough description of how it can be reclaimed from monopoly control. In November of 2010 I was invited to participate in the International Commons Conference: Constructing a Commons Based Policy Platform Economy, sponsored by the Heinrich Böll Foundation, in Berlin, Germany.

In my presentation there I pointed out that credit is a crucial aspect of the commons that has been generally overlooked, and that reclaiming it is crucial to any attempt to promote social justice, economic equity, democratic government and a world that works for everyone.

This video is a composite of the video record that was made and the slides that I showed at that time. It can also be viewed at Credit Commons on YouTube.

The true pathway to peace, prosperity and freedom

For the past four decades E. C. Riegel has been my primary source of insight and

E,. C. Riegel

inspiration on the concepts and mechanisms of money and exchange. Writing mainly from the 1920s thru the 1940s, his is vision is acutely penetrating and his expression clear and almost poetic. For that reason I and a few others have made every effort to make his work known to a much wider audience. His most important works are freely available to be downloaded and I have listed the web links on my website under the Library menu item at https://beyondmoney.net/library/.

I realized very early in my peace and justice work, that the primary obstacle to peace, justice, and freedom, lies in the centralization of power and the concentration of wealth. Riegel and others helped me to see that the global money and banking system is the main instrument by which that is made possible. Riegel opened my eyes to the true nature of money and the fact that we the people already have in our hands the power to create true money. He pointed out that “Heretofore, economics has located the source of production at one point and the source of money at another, with the result that synchronization and balancing of issue between wealth producing power and money power were impossible.” Riegel then laid out a way to bring those two powers together, a plan which I, in all modesty, have enhanced and adapted to present conditions.

I’ve lately been in the process of preparing a document containing excerpts from Riegel’s 1944 book, Private Enterprise Money, along with my comments, much as I did years ago with my annotated précis of his book, Flight From Inflation. That may take a while to complete but I would rather not delay in sharing with my readers a little gem from pages 106 in which Riegel presciently described our present predicament. Here it is:

THE SURPRISE WEAPON

Society is in the twilight of a passing day. The state now undertakes to finance the economy, and, since a free economy is manifestly impossible where the state assumes the responsibility of supplying the money circulation, the politician is compelled to choose between fascism and communism. Under either choice liberty is abolished and the people are enslaved. As the planners all over the world adopt their devices for a managed economy, and ideologists and sloganizers prepare their implements to condition the minds of men to their control plans, and the cause of human freedom seems defenseless, there falls into the hands of the people a surprise weapon that will turn the tide of battle and give the people mastery, not only over their private affairs, but over the would-be political planners. This weapon is the people’s money power as defined in the following pages. It will change the whole course of human events into the paths of liberty, prosperity and peace.

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