14 Jul 2012

Thomas Greco : The End of Money?

I've just read a fascinating book by a guy called Thomas H. Greco Jr. which is called "The End of Money and the future of Civilization" and came out in 2009.

The starting point is one that was already pretty familiar to me now - namely, the fact that the current system of allowing commercial banks to control the money supply is a total disaster. However, while I and others have been arguing that the system could be fixed by taking the right to create new money from banks and allowing the money creation process to be done by governments in the interest of the people, Greco is perhaps even more radical.

He claims that we might even be able to get away without the need for centralized money system at all. He has been involved in a variety of schemes including the use of what are known as credit clearing systems that can be run locally. Essentially, if people are trading at the local level, much exchange can be done without actually needed to pay for things directly. It's very much what happens in systems such as LETS (or SEL in French speaking countries).

He actually thinks that having central governments produce money should be avoided. I couldn't quite follow him that far. I'm all for having as many local exchange systems as you want running in parallel - and you might get a lot done that way. But I don't see the problem with having elected governments also having the option of generating credit that could be used to finance projects that are in the public interest directly.

Indeed, at one point he actually raises the option that major players such as electricity companies could issue their own vouchers that could become a sort of parallel system. So, if electricity companies can do it, what's the problem with having governments producing their own "vouchers" too?

In other words, while I found the arguments very cogent, I think I would rather have my cake and eat it!

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