change to �credit� or fiat money�going off �the gold standard��as the ultimate debasement, and as the cause of inflation. He is well aware of the power deriving from the issuance and control of the money supply, but cannot accept the fact that its divorce from any commodity-base to become pure �credit�, i.e. �belief�, makes it possible for the first time in history to create and control its volume, as national currency, for the benefit of society, as proposed by James Robertson and Joseph Huber in �Creating New Money�, among others.

The power and profit banks derive from their privilege must be removed, and the sole power to create or destroy national money should be in the hands of a �credit-creation authority�, under democratic control and mandated to monitor society�s needs and maintain the money supply at the level needed to allow trading, saving and investment, without such oversupply as to cause serious inflation. (It has to be recognised that, apart from the dubious meaning of the term �inflation�, it is a complex phenomenon, with a variety of causes.)

A vital point, however, is that all the money in circulation should have been spent, not lent, into circulation, just as commodity money enters circulation. This means that all the new money should be credited to the Treasury�s account, so that the �seigniorage� on it is gained by the nation, not by any individual or business. Greco sees �fiat money� as �inflationary�; in fact, as the cause of inflation, because it is not �backed by debt�. This is where his failure to note that commodity-money is also not �backed by debt� limits his vision; any money is accepted as a medium of exchange either because of its �inherent� value as a commodity or, more fundamentally, because of its �credit� value�the �belief� that others will accept it equally, as a medium of exchange. This latter is the reason behind acceptance of all current national monies. The debts created along with it are not necessary to give it value, and are destructive, even without the interest which grows on them. This is perhaps most clearly shown in the example of the pre-independence American �Colonial scrip�, used to such good effect to relieve the problems due to the shortage of coinage. It also supports the contention that, with a sound money system, a moderate excess of supply has little effect, and it is much more important to see that the supply is large enough. (See, for example, www.monetary.org/briefusmonetaryhistory.htm).

What gives the national monies special advantage over �complementary� currencies is the fact that only they are acceptable for payment of taxes, or legally recognised settlement of debts, as well as their convenience and general acceptance for all purposes of trade within the national boundaries. As long as they function tolerably well for individuals, they remain the preferred medium of exchange. The exponential build-up of debt, climaxing over recent decades, cannot be eliminated with any complementary currency�and is the reason why money must be kept in short supply, �to curb inflation�. The only way to eliminate these debts without collapse of the system is through reform of the national systems, creating and issuing debt-free (and therefore necessarily interest-free) money enough to retire all the debts created along with the �credits�, and replace these credits as medium-of-exchange, without creating further debts. With this reform in place, especially if it is combined with the issuing of Citizens� Incomes and switch from income tax and VAT to land-value, pollution and resource taxation (the nature and source of money is not the only source of the world�s ills, though it is a major one) there should remain little need or demand for local or alternative currencies, but until then, or in the absence of reform, these currencies are likely to become of increasing importance to survival.

Both authors look at the history and failings of the systems of money creation, but while Lietaer places this much more in context of other factors driving society and the economy�a �whole systems� approach�and speculates about possible futures, Greco places much more emphasis on the nature and implementation of alternatives, with extensive examples, references and �sources and resources�, covering the world. This would be the book to get as a guide to start an alternative currency.

Lietaer envisages the development of multi-level currencies: a Global Reference Currency (the Terra); three main Multinational Currencies: the Euro, a �NAFTA dollar�, and an �Asian Yuan Currency�; (just) some National Currencies; and Local Complementary Currencies. But he sees both the national and the multinational currencies as continuing to be based on bank-debt. I see this as a serious shortcoming of this thought-provoking book!

Brian Leslie




A Proposed New Introduction by Frances Hutchinson to SOCIAL CREDIT CLEARLY EXPLAINED: 101 QUESTIONS ANSWERED By John Hargrave

(The proposed reprinting has been abandoned in favour of a new �q&a� booklet, to be published shortly.)

When originally published, Social Credit Clearly Explained formed a small part of an extensive literature on alternatives to the ecologically and socially destructive economics already responsible for two world wars. In The Wisdom of the Fields, also written at the close of World War II, H.J. Massingham observed:

A new war lies before us, the greatest of all wars, the war of values, and it may be that our soldiers who have so valiantly borne themselves through the hell o f modern war will have a part to play in this other war (The Wisdom of the Fields 1945-7).

Hence John Hargrave could take for granted a UK and wider general public asking the questions to which he provides the answers. This was no isolated attempt to draw attention to the work of an obscure economist. It must, however, be placed within the broader context of political and economic writings of the times.

During World War 11 Massingham also published The English Coun�tryman (1942), Remembrance (1942) and The Tree of Life (1943). Much sought after to this day, these books are now only available in second hand bookshops. Although an anthology of his writings was published by Green Books in 1988, it carries virtually nothing of the power of his political and economic thought. In his own battle Massingham drew upon the writings of the great whistle blower, William Cobbett (whose Rural