Tag Archives: valun

Sovereign or Slave? How perversion of the money power has decided the issue—until now!

As I indicated in my previous post, No democracy when government has the money power, E. C. Riegel, more than 75 years ago, explained, better than anyone else I’ve encountered, the nature of money, its fundamental function, and the history and consequences of its politicization, and outlined a way of transcending the perverse and dysfunctional system that we have lived under for far too long. His work is perhaps best summarized in his book, Private Enterprise Money, from which I quoted. I continue here with further quotes that elucidate the key points of sovereignty, money and government.

Riegel’s solution involved the organization of credit clearing circles that he called “Valun Exchanges” that would be joined together in networks for exchanging goods and services. He argues, as I do, that it is the individual person that is sovereign, not any king, emperor or government, and that the power to issue money, therefore, also resides in the individual. When we realize that money is really only short-term credit, it becomes clear that it is in our power as individuals to give it or withhold it as we go about our daily business of exchanging the value (goods and services) we produce and consume.

In Chapter 9 of his book, Riegel proposes that the Valun Exchanges be organized on a “state-wise” basis. He observes that:  “The sovereign power of the citizen rises to the state government; and from there it is delegated upward to the federal government, and downward to subdivisions. We are, first of all, citizens of our respective states; and this implies citizenship also in local and national governments.” p. 139

He then recounts the history of the union of the American colonies after their separation from British rule and argues that: “The advantage in abolishing this multiplicity of monies [of the various colonies] was obvious, but the implications involved in surrendering the money issuing power to the federal government was not comprehended. The gain to all in uniformity of money unit was visualized; the loss in sovereignty thereby suffered, was not.”  p. 140

From this point onward, I will let Riegel’s words speak for themselves. All page number refer to the printed edition.

“We now realize that the money power of the private citizen is in fact his sovereignty; and that in yielding it he yields his sovereignty. Thus the transferring of the money power from the states to the federal government was the transferring of the citizens’ sovereignty to the national government, and the reducing of the state to the status of a subordinate. p. 140

“The political money system implies that the citizen will abate his natural money issuing power, and make the criterion of his exchanges and the regulation of the money system entirely dependent upon the government that he recognizes as the money power. By making the federal government the sole money issuing power, the individual states transferred the fealty of their citizens to the national government, because they became thereby dependent upon its money power. The citizen having thus had his fealty transferred to the national  government—it was taken from the state governments—and the latter are now dismayed by the increase of federal power and the commensurate subordination of state power.”

“What has actually transpired is a reversal of the intent of the federal plan whereby the national government was to be dependent upon the states for grants of power. The national government, through its money power, is now supreme and in reality holds the state governments in subjection to it. Federal fiscal policy now determines the bounds of state sovereignty. It took many years to reveal this structural weakness because, in the earlier days of the federation, the economy depended more upon the private issuance of money through the banking system, and thus federal fiscal power was dormant. The policy of the federal government up to 1932 was to leave to the banks the function of supplying money. During the Jackson administration, with the abolishment of the United States Bank, government participation in money supply reached its lowest point—with the government confining itself to the mere minting of gold and silver coins at a seigniorage charge to any one who brought the metal to the mint.” pp. 140-141.

Money Power Is Sovereignty
The states, to recapture their independence and sovereignty, must look to their citizens who, in turn, must assert their sovereignty by exercising their inherent money power. It was right that the states should have surrendered their money power; but they should have surrendered it to their citizens, and not to another government. At the time the federation was formed the nature of the money power was not understood; and it was not realized that it is the essence of sovereignty. But we know now that it is and if we wish to preserve the federation and also home rule, we must now deal intelligently with the money power.

While the states have surrendered their money power, their citizens have not. The citizens have merely failed to exercise their natural powers against which there is no prohibition in either state or federal constitutions. This is not a political issue – requiring legislation or repeal of legislation, or constitutional amendments, or any official action – but it is, nevertheless, a profound political movement; because, as the people assert their money power, their natural intimacy with their state and local governments asserts itself – since there is no other power that can step between. Today, the federal government stands between the citizen and local government, and thus alienates him.

If our states are to develop their individuality and counter the stereotyping influence of a monetary dictatorship, if local government and private enterprise are to work out their natural virtues, if democracy is to prevail in business and government, and if our federal republican system is to survive, we must meet our problems by dealing with their fundamental causes – the political money system.”

To accomplish these broad and vital aims, the Governor or some other public official should take the leadership of this cause within his state. In the absence of this, leadership must be taken by private citizens. It offers an incomparable opportunity for public service.”

While the money issuing power is inherent in every man, it can be realized only by a pact among many. Therefore, the individual is helpless, and organized action is necessary. The method of organizing a Valun Exchange should be no different from organizing any other cooperative movement.” pp. 143-144.

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The Language of Money and Accountancy

One of E. C. Riegel’s most important published articles is, Money Is the Language of Accountancy, which was published in The Journal of Accountancy, the official publication of the American Institute of Accountants, in November 1945 (pp. 358-360).

In this article, Riegel outlines the benefits of a proposed “Private Enterprise Money” system (which I have highlighted), explains its elegant simplicity, and shows how it can be the key to solving myriad economic, social, and political problems.

The article achieves Riegel’s usual high standards of incisive reasoning and eloquent expression, but there are a few points on which I disagree. I therefore find it necessary to write and publish my critique along with it. While Riegel’s explanation of the nature of money is superb, I have some serious disagreements with him regarding the measure of value and the requirements for implementation of the mutual credit system. We now have the advantage of six decades of actual experience with clearing systems of the sort that Riegel envisioned. I also find it necessary to clarify a few of Riegel’s points. I urge the reader therefore to read both the article, which appears below, and my critique which follows it.

Anyone who truly wishes to understand money and to discover the way forward toward justice, freedom, and economic democracy should study Riegel’s works starting with his book, Fight From Inflation. These can be found at http://www.newapproachtofreedom.info/—t.h.g.

Money Is the Language of Accountancy

By E. C. Riegel

Proceeding from the assumption that the study and comprehension of money is an integral part of accountancy, this author explains his own conception of the function of money and credit, proposes the establishment of a “private-enterprise money” system, outlines it’s operation, and lists some of the advantages which he believes would result from the point of view of accountants, in particular, and the national welfare. Mr. Riegel, who is president of the Valun Institute in New York, describes himself as “a non-academic student of credit and money.” He is the author of several books, including a recent volume entitled “Private Enterprise Money,” which develops the proposal outlined in this article.

SINCE money is the language of accountancy, an unstable unit plagues the accountant with a confusion of tongues. This year’s statement is written in a tongue different from last year’s and perhaps even last month’s. Figures are not merely black and red; they are also gray and pink. Taxes are impossible of estimation because when the government runs a deficit there is a hidden tax that manifests itself in inflation. Depreciation cannot be gauged because property may show appreciation in terms of the changing dollar. Profit-and-loss figures are deceptive. Reserves may depreciate or appreciate in terms of the unit. All is confusion. Is accountancy futile?

The problem is serious enough to challenge the profession. If it is not solved accountancy must suffer. If accountants master the problem the profession will be raised to new levels of prestige in the business world. The study and comprehension of money is an integral part of accountancy and must not be left to the voodooism of monetary economics.

Money can best be understood by inquiring into the purpose of it. In simple or whole barter there is no need of money. When barter is to be split into halves, i.e., one trader is to receive full satisfaction in value, and the other is to receive only a promise of value, there arises the need of an accounting system and money is a system of split-barter accounting. It is essential to remember that in the process of trading by means of money, there is no departure from barter, but merely a facilitation of barter by splitting it into two parts, one half finished and the other half prospective. Values still continue to exchange for values with money acting as an interim device, but itself having no value.

Perhaps the easiest way to comprehend money is to imagine ourselves in a position where we had to initiate a system that would enable us to escape from the rigidity of whole barter to the flexibility of split barter. Let us approach the problem as one purely of accountancy, completely divorced from politics.

The problem would be one of providing the means whereby trader No. 1 could receive value from trader No. 2 by the former giving the latter an order for an equal value which order would be acceptable to any trader at any time. An IOU would not be sufficient; it must be converted into a WeOU. In other words there must be a conversion from private credit to composite credit underwritten by all the participants in the trading circle. Obviously, this calls for a pact of all the traders agreeing to honor the promises of each as if issued by all. Mutual or social or composite credit is, therefore, the foundation of a money system and the device that liberates traders from the limitations of whole barter.

Before such common agreement can be obtained two questions must be determined: (a) what is the promise of each that is to be credited by all? (b) what is the limit of such promises? In other words we must define the meaning of the credit and the limit of it. Since the purpose of money is to split barter in two parts with one trader receiving value and the other “holding the bag,” it is obvious that the money must issue from the former (the buyer) and must pledge not money but value and the buyer-issuer promises to deliver value when any money is tendered to him from whatever quarter. Thus we see that the essence of credit under a true money system is not to promise to pay money but a promise to receive money. To comprehend this is to liberate private enterprise from the control of finance.

As to the limit of the credit of each participant, this can be agreed upon on the basis of the needs of various trades, and industries, and professions rather than passing upon the applications of each member thereof. This being done, each participant would be authorized to draw checks against his assigned credit without giving any note or other instrument. The credit would have no term but would be in the nature of a call credit since the pledge is to deliver value on demand by tender of money.

Realizing that we have a mutual credit agreement whereunder the credit can be offset only by delivering value (selling goods or services), it is obvious that we cannot afford to admit to our money exchange as a money issuer any factor [entity, ed.] that is not engaged in the business of buying and selling. Ipso facto governments are excluded since they have no way of making good their promise which is implicit in the issue power. This explodes the delusion that governments back money. It is only private enterprisers that back money; governments merely depreciate it by freely issuing it but never backing it by over-the-counter transactions.

Establishing a Monetary Unit

Before we can give meaning to our agreements we must determine the size or power of the money unit. This may seem formidable but is quite simple. Few people realize that our dollar was given its meaning by merely making it par with the Spanish dollar already current in the colonies and the states. Thus we can agree that our unit (I suggest the name “valun” from VALue UNit) shall be equal to the current dollar or some multiple thereof and set our prices in valuns accordingly.

Having agreed upon the three essentials: (a) the definition of the credit, (b) the extent of the credit, (c) the size of the unit, we are ready to set up a clearing house through which our bookkeeping can operate and to provide the means of covering its expenses. This latter can be accomplished by the simple device of a check-clearing charge. No investment is needed, the
Exchange being able to equip itself on credit based upon its prospective income from check-clearance charges. The Exchange itself would have no money-issuing power but could draw only upon accrued income. To provide currency in bills and coins would be very simple. The Exchange would purchase the bills and coins and they would be subject to requisition by members by cashing a check. Such requisition would bring a debit to the account of the check writer and a credit to the account of “the currency controller.”

A deposit of currency would, of course, bring the reverse action. The cost of printing the currency and minting the coins could be charged to each drawer or thrown into overhead and covered by the check-clearing charge just like the cost of printing check books.

Private-Enterprise Money

These are the general outlines of the establishment and operation of a private-enterprise money system. For details I must refer the reader to my book, Private Enterprise Money. Since the substance of the whole plan is mutual credit there is no occasion for anybody to pay interest to anybody and, of course, there is no place for the promissory note. Check drafts and deposits are the only instruments of record and the “money-makes-money” principle is absent. Money is made the instrumentality of the private profit system but of itself is valueless and profitless. This revolution has tremendous significance in the issue between private enterprise and collectivism because the criticism of the former is due entirely to financism.

The reason a private-enterprise money system assures stability of the unit and gives definite meaning to accountancy is that no units will be issued except for value received since each trader in self-defense must restrict his issue to selfish purposes. There could be no issues for boondoggling, or relief, or subsidy, or war, because the government would have no issue power. There could be no inflation or its reflex, deflation. This does not imply that the government could not carry out any project that the taxpayer approved, but it does mean that such approval would be necessary since the taxpayer would be the sole source of money and the government would be powerless to tax by the deficit process of changing the power of the unit through inflation. In brief, we would have government of government—democracy at last. The private-enterprise money system would accomplish the following:

Provide a stable price level.

End the debt-money system. Credit would be extended solely on the promise to pay with goods and services.

Abolish interest within the system.

Take the money-creating power out of the hands of government and banks and place it in the hands of private enterprisers.

Make government operate on a cash basis; prevent deferred and delusive taxes through inflation.

Assure distribution of goods by distributing money power.

Prevent inflation and deflation.

Defeat bureaucracy, fascism, and communism by taking the money power from government

Defeat hidden money control from any quarter.

Assure full employment and a high standard of living.

Give the people the veto power over war and all government extravagances.

Supply the perfecting element in democracy and private enterprise.

If the accounting profession will interest itself in the establishment of a true money system it will render an incomparable service to business and the public. The study of the subject is not extra-curricular; it is part and parcel of accountancy. No profession can gain so much from its solution; none must suffer so much from its non-solution.

Money and Reconversion

The reconversion problem with which the nation is now engaged is basically a problem of dollar-power conversion from the prewar power to the current power. By rationing and restraints upon spending, the action of demand upon supply has been cushioned. This cushion must be removed and since there are now about eighteen available dollars for each dollar of consumer goods (at 1939 prices) we face a tremendous potential inflationary price rise. If through the self-restraint of the people, or by artificial restraints imposed by government, the accumulated dollars are not permitted to come into the market, industry will stagnate and relief and public-works payments will increase the unbalance between a dollars and goods. When the flood breaks prices will skyrocket into runaway inflation. The dollar must be converted, sooner or later, from its prewar power to its natural current power which will grow progressively smaller and I believe will not be arrested short of complete fade-out.

The creation of a private-enterprise money unit is, therefore, imperative if we are to escape chaos and bloodshed. The subject is one of greatest urgency and I hope that the accountants will actively participate in the project.

This article was published in The Journal of Accountancy, November 1945, pp. 358-360. (Official Publication of the American Institute of Accountants).

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A Brief Critique of E. C. Riegel’s article, Money Is the Language of Accountancy

By Thomas H. Greco, Jr.

Riegel says,

“Having agreed upon the three essentials: (a) the definition of the credit, (b) the extent of the credit, (c) the size of the unit, we are ready to set up a clearing house through which our bookkeeping can operate and to provide the means of covering its expenses.”

I agree that “the essence of credit under a true money system is not to promise to pay money but a promise to receive money,” but I cannot fully agree with his proposals for b) and c).

Regarding b), he says:

“As to the limit of the credit of each participant, this can be agreed upon on the basis of the needs of various trades, and industries, and professions rather than passing upon the applications of each member thereof. This being done, each participant would be authorized to draw checks against his assigned credit without giving any note or other instrument.”

Surely, the nature of the member’s particular business must be considered, but it cannot be the sole criterion for determining credit limits. I would want each account limit to be based, at least, upon their historical volume of business, plus perhaps one or two additional factors, like their reputation and overall contribution to the welfare of the community. Also, he does not make clear that there must be some formal underlying agreement defining rights and responsibilities of membership in the clearing exchange.

Regarding c), the size of the unit, it is not enough to set its initial value equal to the dollar at the time of commencement, as Riegel suggests. That is only a logical starting point, considering that dollar valuation is what we are all accustomed to. Dollars is the value “language” we understand. But unless the system unit is defined in physical terms, it will simply depreciate along with the dollar as debasement of the dollar by the monetary authorities continues. I’ve written about that before in my books. In order to maintain its value over time, the credit unit (Riegel calls it a valun) must be defined in terms of something other than the dollar. My choice of definition has long been a “market basket” of basic commodities, because that will be the most stable measure over time and is impossible for any group of entities to manipulate.

Further, I think it is naive and inconsistent for Riegel to say that, “No investment is needed, the Exchange being able to equip itself on credit based upon its prospective income from check-clearance charges. The Exchange itself would have no money-issuing power but could draw only upon accrued income.”

I agree that the system should support itself through transaction fees, i.e., what he calls “check-clearance charges,” but if the Exchange itself has no money issuing power, how is it to cover its start-up costs? Either some up-front investment will be needed, or the exchange must be given a credit line. I favor the former as a safer alternative, but if the exchange is given a line of credit it must be strictly limited on the basis of its anticipated near-term revenues.

Regarding Private-Enterprise Money, Riegel is quite correct in saying, “Since the substance of the whole plan is mutual credit there is no occasion for anybody to pay interest to anybody and, of course, there is no place for the promissory note.”

By way of clarification, what he means is that mutual credit does not require that anyone borrow money into circulation. Thus, there is no need for the issuer of credit to sign a promissory note to a bank or anyone else, or to pay interest on negative account balances. There is however the need for each member of a mutual credit exchange to sign a general agreement that outlines the rights and responsibilities of their participation. I have provide a draft of such an agreement in my book, The End of Money and the Future of Civilization.

The key provision, as Riegel states, is that “no units will be issued except for value received.” That means no monetization of government debts or the inflation of credits on the basis of valueless or non-marketable assets. It is Riegel’s objective and mine to deprive government of the power to exceed its budget by debasing the currency, but Riegel’s insistence that “the government would have no issue power,” may be both impractical and overly restrictive, especially with regard to lower levels of government, like counties and municipalities. Nonetheless, government spending at all levels must be strictly limited to their legitimate tax revenues as approved by the people. Their participation in a mutual credit system must limit their credit issuing power to some small fraction of their annual anticipated tax revenues.

Finally, I wish to make a point about one of Riegel’s predictions. In the final section of the article titled, Money and Reconversion, Riegel says, “The dollar must be converted, sooner or later, from its prewar power to its natural current power which will grow progressively smaller and I believe will not be arrested short of complete fade-out.” Obviously, he was wrong about the “complete fade-out” of the dollar in the post World War II era. There was, indeed, a significant increase in prices at that time, but the tremendous increase in productive capacity that America achieved during the war enabled an unprecedented flood of consumer goods to reach the market rather quickly and absorb the very large savings that people had accumulated. While dollar debasement has continued up to the present day, and the purchasing power of the dollar has continued to decline, the monetary authorities have found many ways to forestall an acute crisis—until recently. Now, concerted action can no longer be deferred. The usury-debt-money system must be transcended, the credit commons must be reclaimed, and a decentralized and democratic network of mutual credit clearing circles is within our power to create. Riegel has provided us a torch to light our way.—t.h.g.

The Legacy of E. C. Riegel

A Primer on E.C. Riegel by Spencer H. MacCallum

With a Comment by Thomas H. Greco, Jr.

This article by Spencer MacCallum is a nice summary of Riegel’s ideas and works. Fortunately, our modern technologies are making it easier to implement Riegel’s ideas, and that has been progressing in the form of mutual credit clearing circles like LETS, and in commercial “barter” exchanges.

The main obstacle to progress is people’s preconceived notions about money. The ideas of non-governmental money and the need to separate money and state run counter to their general conditioning, but the increasing amounts of media attention given to the recent proliferation of community currencies and exchange systems has helped in changing that.

The most difficult task will be the creation of an independent, non-political unit of account. This is the one area where Riegel falls short. He failed to explain how his abstract unit of value might achieve a meaning independent of the dollar unit. If the dollar is the “language” of value we have grown up with, we can learn a new language only in relation to it (translation), or by immersing ourselves in a culture where dollar is NOT “spoken.”

It is by our everyday purchases of goods and services that the dollar as a value unit acquires meaning. If the valun is to have a life that is independent of the dollar, it must be defined in terms of some of those goods and services, at least initially. Which goods and services to use?, traded in which markets?, are the questions that constitute the measurement challenge.

The valun can be launched at par with the dollar or other political unit, but how can people differentiate one from the other unless there is a physical reference? What will cause the valun to diverge from the dollar as the dollar is debased? Without that physical definition, the valun will simply follow the dollar as a unit of measure. If vendors will accept either dollars or valuns in payment, how will they know how many dollars to ask for if the valun price is held constant?

You may answer, “By looking at a price index.” Well, any index will be defined in terms of specified goods and services. So that amounts to a de facto definition. Let’s choose our own definition instead of relying on a manipulated government index like the CPI. – t.h.g.

Edwin Clarence Riegel (1879-1953), better known as E.C. Riegel, was an independent scholar who dedicated himself in the 1930s to understanding exchange, thinking that a simple and dependable means of exchange would do more to enhance the dignity and well being of the common man than any political reform. Before that, he had been active in the consumer movement in the 1920s and 30s, launching, as president of the Consumer Guild of America, virtually a one-man war to make America safe for the consumer, publishing four books in the first two years (The Yellow Book (1927); Barnum & Bunk: An Exposure of R.H. Macy & Company (1928); The Three Laws of Vending; and Main Street Follies (1928). Later, he concentrated on understanding the nature and functioning of money, publishing The Meaning of Money (1936), Private Enterprise Money (1944) and, posthumously, The New Approach to Freedom (1976) and Flight from Inflation: The Monetary Alternative (1978).

Riegel conceived of money as simply number accountancy among private traders. As he came to see it, an exchange medium is still direct barter to the degree that it has any intrinsic value. Fully evolved money enables traders to escape altogether the limitations of direct barter and achieve “split barter,” enabling the purchaser in a transaction to make payment at such time and to such parties as he might choose.

Riegel’s ideas do not coincide with those of any established monetary school. Traditional views of money lie along a spectrum from those of the “hard money” theorists who favor least possible government intervention in the free-market process, to those of the “fiat money” theorists who are quite comfortable with statism, viewing money as a creation of government and requiring no intrinsic value or anything more than government management of money issue. Ironically, Riegel came down on the side of a rigorously free-market fiat system; for a mature exchange system as he conceived it would depend on no intrinsic value at all, nor would it require or tolerate any degree of government participation. In that sense, the fully evolved exchange system would be a natural system operating entirely as a spontaneous, free-market process with no political mandate imposed.

Since virtually everyone assumes that money must have, if not intrinsic value, at least some degree of government involvement, Riegel’s idea of true, i.e. fully evolved, money requiring neither has been slow for find acceptance. It might be easier to understand his concept as a moneyless exchange system—although his idea of the evolution of exchange from primitive, direct barter to true money as mere number accountancy among traders in the market place has an elegance about it.

Riegel’s idea of a fully developed exchange system can be understood in terms of “trading circles.” A is a furniture maker, and B has a lumber company. A buys lumber from B to make furniture, paying him with valuns (Riegel’s contraction of “value units”). B then spends the valuns as he likes to purchase what he needs, as do those farther down the line, while A proceeds to make furniture. When A completes the furniture, he offers it for sale competitively on the market, accepting valuns.

Who issues valuns? If A’s balance with the system accountant is zero or negative, then the valuns he pays to B are new issue; if not, then they are simply valuns circulating in the trading circle. None but the system accountant knows which they are. If they are new issue, then when A sells his furniture and accepts valuns in payment, he redeems his issue, and his account with the system accountant comes out of the red and into the black. Valuns may be thought of as mutual credit tokens. To qualify as a member of a trading circle, one agrees to put product or services competitively into the market and to accept valuns in payment. There can be no question about a person’s willingness to redeem his issue because, after all, that is what he is in business for.

There might be numerous trading circles, each with its own accountant but its valuns indistinguishable from those of other trading circles. The accountant in each case assigns each member of his circle a credit limit based on experience with that member’s type of business, charging a small fee to cover bookkeeping and insurance against default. Thus might accounting firms form competitive trading circles, charging less or more for their insurance depending how lenient or strict the credit limits they allow. The circles would cooperate under a board of governors primarily conducting research into optimal credit limits for different lines of enterprise and periodically performing credit clearances among the various trading circles.

Riegel proposed launching a valun system with the valun at par with some existing political unit such as the dollar, much as the United States dollar historically was introduced at par with the Spanish dollar. As people internalize the value of a given political unit at any given time, so would they internalize that of the valun. Over time, as infusions of new units diluted its value, the political unit would diverge from par with the valun, the latter remaining constant or showing relatively little change.

Since Riegel proposed valun trading circles long before the Internet, he described a valun system operating with paper checks. The Internet would vastly simplify its implementation.

Some advantages of trading with valuns:

(1) It would facilitate micro and start-up enterprises that under the existing political system cannot qualify for bank loans, since it would enable them to monetize their future productivity which, after all, is the backing of every valun.

(2) It entails no use of interest because with the exception, perhaps, of a small personal loan now and then, there would be no occasion for borrowing. The business person would simply issue new valuns as needed, according to his credit limit. This is an attractive feature for Islamists, since it accords with their religious stricture against interest.

(3) It does not require or tolerate participation by governments. Because these are not traders offering goods and services competitively in the market, they could not qualify as participants in a trading circle. Consequently, they could not issue units that would dilute the valun. The resulting constancy of the valun, relative to all political monetary units, would be a boon for business accounting and planning. Riegel observed that long-term business planning today, dependent on political units that are continually changing in value, is like a builder trying to build a house using a yard stick that varied in length from day to day.

(4) Because of their relative constancy, valuns could be expected to become the preferred unit of account over dollars or other political units. To the degree this happened, it would eliminate deficit public spending, effectively restraining governments to what could be collected in direct taxes and hence severely curtailing global military adventuring.

Riegel was the first to explicitly call for separation of money and state. Rather than advocating any political reform, he forecast the continued, natural evolution of exchange towards true, apolitical money and looked for ways to assist in that evolution.

He also was the first to predict a global inflation. Foreseeing all political monetary units inflating and “sliding into the sea,” he urged study and implementation of the valun plan. Past inflations had been local or regional; there remained always some unit, such as the British pound in the 19th century and the dollar in the 20th, to which businessmen could escape to carry on their accounting. Today there is no such unit. Should accountancy fail worldwide for want of a sufficiently stable unit of account, the global economy could fail. Hence the urgency, as he saw it, to set up a unit to which business might flee before that occurred (that is the significance of the book title, Flight from Inflation).

For a thoughtful discussion of Riegel’s ideas, see David Boyle, The Money Changers (London: Earthscan Publications 2003). Riegel’s ideas are available on the web at www.ReinventingMoney.com. Apart from many brief essays, his main works are:

1978 Flight from Inflation: The Monetary Alternative.
Los Angeles: The Heather foundation

1974 The New Approach to Freedom.
San Pedro, CA: The Heather Foundation

1944 Private Enterprise Money.
New York: Harbinger House

1936 Irving Fisher’s World Authorities on the Meaning of Money.
New York: Consumer’s Guild of America

E. C. Riegel Added to Wikipedia

Wikipedia now has a detailed entry on E. C. Riegel, “master of monetary truth.”