December 4, 2010

Let’s Take Back Our Money


Our goal should be total relocalized control of money. The optimal amount of centralized (“federal”*) currency and taxes is zero. Even at this early stage we should look to pioneering projects like the Brixton pound (which can be used to pay local taxes). (We also ought to think in terms of economic relocalization in the form of co-ops. This would have many advantages which I’ll discuss in future posts, but the one I want to mention here is the possibility of bringing as much diversification and exchange as possible under the rubric of cooperative share schemes, so that the parasitic central structure would have trouble getting after us even through trying to tax barter.)
[* Going forward I’ll probably be using political relocalization terms like federation and federated more often, in addition to referring to the Orwellian name “federal government”. I hope context will make the difference clear enough, and at any rate I’ll try to avoid using the term federal itself except to refer to the kleptocracy, even though that’s unfair to the term. And a reminder, I hope the (vast) difference between democrat and Democrat is always clear.]
Before I get to my affirmative ideas on money reclamation, let me quickly dispose of some negation, what I’m not really advocating.
As I wrote in my MMT posts (parts one and two), I do want the knowledge to spread, that in principle deficit spending is unconstrained and beneficial where the economy is depressed. There Is No Deficit Problem. It’s a fiscal terrorist lie.
We know for a fact that no one among the elites who claims to care about the deficit or the debt actually does. The Bailout, the wars, the Pentagon budget, Big Ag subsidies, and corporate welfare in general, all prove this. No one thinks the government spends too much as such. (We know that corporatist spending does destroy the real economy by stealing real wealth from the productive people and further enriching and empowering the criminal parasites.)
Therefore, we know that all deficit terrorism, all calls for “fiscal responsibility” and spending cuts, all “austerity”, is nothing but a criminal LIE on the part of politicians, media hacks, and academic prostitutes.
But I’m not in fact calling for more deficit spending from the kleptocracy. It’s clear that any new spending this government undertakes will only be for further corporate welfare, police state expansion, and power aggrandizement. Obama’s corporatist “stimulus”, just a bailout by other means, proves that. (The fact that “stimulus” money was used by the TSA for the pork/police state purpose of buying totalitarian scanners from a connected crony corporation, in direct defiance of the will of Congress itself, which explicitly voted against allocating funds for the scanners, should be taken as the definitive characterization of Obama’s “stimulus”, and of what any kleptocracy spending will be like.)
I do say that we must resist all new taxes or increased taxes on the non-rich. These mean nothing but robbery. Every cent extracted from us, through for example a VAT, would simply be handed over to the banksters and to the likes of Chertoff-connected scanner contractors. Anyone who advocates a VAT or anything like it is simply advocating corporate robbery.
And I do say that we must draw a line against any further cuts to any public interest spending. If anyone sincerely thinks cuts are necessary, there are trillions in worthless bailout, war, and corporate welfare spending to cut. So there’s the only answer we ever need give. Anyone whose “deficit” plan is not 100% corporate welfare cuts and increased taxes on the rich is manifestly a liar and a criminal.
The watchword is clear:
The deficit and the debt are not a problem while there’s still unemployment. Absolutely refuse to even discuss public spending cuts.
No Taxes for the Non-Rich.
Total Austerity for the Criminals, Not One Cent More From the People.
So there’s the basic negative strategy for how the people should regard the central kleptocracy.
Affirmatively, we must take back our money sovereignty. Money is nothing but a unit of account among participants in a real economy, and is based on their productive activities. No one but the participants themselves has a right to create or exchange it. Money creation is a core feature of the people’s sovereignty. If a legitimate government existed, by definition it would directly issue money based upon the productivity of the real economy, toward the goal of the overall distributed health of this economy, and of the productive society at large. No “finance sector” would or could exist at all in a legitimate system.
So it follows that for a government to abdicate the money creation power to private banks, in the form of “the Fed”, is to abdicate sovereignty itself, and to become illegitimate. We know the Fed serves no legitimate purpose. The only reason it exists is to give the bankster racket its main rent extraction point, and indeed to enable the bank rackets to exist at all. Abolish the Fed, take back the money creation, and we abolish the banksters. Similarly, shadow banking serves only destructive, larcenous purposes and has no right to exist by any measure. So as political demands I support calling for the abolition of the Fed, repeal of the CFMA, and the reinstatement of one big bucket law.
Not that I expect the kleptocracy to actually do any such thing, but the Fed may be the most politic target, and the call to End the Fed may be a good wedge behind which to push the rest of the anti-bank, anti-“austerity”, and affirmative money sovereignty ideas.
The basic principle and practice of money distribution including credit must be that the community lends to itself, on collateral of future productivity. One existing blueprint for this, alas never put into practice, was Charles Macune’s sub-treasury idea. As described in Lawrence Goodwyn’s The Populist Moment:

Through [Macune’s] sub-treasury system, the federal government would underwrite the cooperatives by issuing greenbacks to provide credit for the farmer’s crops, creating the basis of a more flexible national currency in the process; the necessary marketing and purchasing facilities would be achieved through government-owned warehouses, or “sub-treasuries”, and through federal sub-treasury certificates paid to the farmer for his produce – credit which would remove furnishing merchants, commercial banks, and chattel mortgage companies from American agriculture. The sub-treasury “certificates” would be government-issued greenbacks, “full legal tender for all debts, public and private”…

In principle, this can be done at the local, state, or federal level. But I think it’s a lost cause to do more than state the possibilities for federal money creation. We should focus more practical work at the state level, where public banking is an idea on the rise.

North Dakota broke new ground nearly a century ago, but the true potential of publicly-owned banks remains to be explored. Nearly all of our money today is created by banks when they extend loans. We the people have given away our sovereign money-creating power to private, for-profit lending institutions, which have used it to siphon wealth from the productive economy. If we were to take that power back, we could generate the credit we need to underwrite a whole cornucopia of projects that we don’t even consider because we think we lack the “money.” We have the labor and we have the materials; we just lack the “liquidity” necessary to put them together to create products and services.

North Dakota provides proof of principle: State-level public banking works. Banks have been proposed in California, Washington, Michigan, Illinois, Vermont, and elsewhere.
This could be a big decentralizing step. The basic idea as it exists is for the state to lend for productive purposes within the state’s real economy. This could easily be ramified into something like a state subtreasury system.
From there the possibilities roll out to distant vistas. Perhaps the next step, or better yet a concurrent one, would be for the state to issue its own currency for use within the statewide co-op, certainly for state and local taxes. This could dovetail with a state breaking Wall Street at least within its borders by calling upon the people to Jubilate In Place: stop paying their mortgages, stay in the house, keep paying property taxes. Such an economy could largely sustain itself, and encourage collaborative efforts in other states.
This is to envision steps toward decentralization, anti-corporate liberation, relocalization. Of course the road from centralized kleptocracy and corporate tyranny to full relocalization and democracy is a long one.


  1. Russ,

    “Money is nothing but a unit of account among participants in a real economy..”

    How about money is a PUBLIC measure of value for goods and services exchanged or exchangeable.

    As Alexander Del Mar wrote in his The Science of Money (1885), “Value is an arithmetical relation between two or more commodities or services which makes its appearance during an act of exchange. When you have that great truth firmly fixed in mind, you will have laid a solid foundation for your knowledge of money. Without it, you will build upon quicksand. There is but one truth, the rest is vanity, perversion, and madness.”

    “If an equitable settlement of monetary systems can be brought about,the past thirty years of financial intrigue, and the industrial distress to which it has led, will not have been suffered by the community in vain. For two hundred and odd years the goldsmith and money-lending class have used a Public Measure – the coins of the realm – as an instrument of their own enrichment and aggrandisement; in this design they have not scrupled at dissimulation, treachery, the employment of bribery, or the altering of ancient statutes.” (Written in 1885.)

    “The practical world wants a working theory or explanation of money as it now stands in law and fact; a theory which explains precisely what money does, and precisely how it does it. The explanation is, that money measures value by expressing it in price, and that price is a numerical relation expressed in the symbols of money, a relation between two sums and velocities, the sum of exchanges in time, and the sum of the circulation in time.”

    If you have not read The Science of Money by Alexander Del Mar, I suggest you do so. If you have, I suggest you re-read it.

    I enjoy your articles and postings very much and wish you all the best in your future endeavors.


    Comment by Kurt — December 4, 2010 @ 9:02 am

    • Thanks, Kurt. I haven’t read Del Mar, but he sounds like one of the pioneers of the era.

      Comment by Russ — December 4, 2010 @ 10:43 am

  2. we need ron paul to be our prez!!!

    check this out about the relationship between the fed and the us treasury and why schools don’t teach about money:

    for more, follow the blog http://www.joshuagamen.wordpress.com and “like” http://www.facebook.com/?ref=home#!/pages/Joshua-Gamen/115571041833009

    Comment by joshuagamen — December 5, 2010 @ 1:32 am

    • Hi Joshua.

      I want to get rid of all tyrannical structures, which means corporations and the centralized government.

      There are lots of reasons to get rid of the centralized State, but the main reason is precisely that it acts to empower big corporations, which need to be eradicated completely.

      That means, for example, that we reject “contract” enforcement against the people on behalf of corporate structures as a legitimate function of government.

      Comment by Russ — December 5, 2010 @ 6:45 am

  3. My take is that money is a primitive form of information technology. Because this tool readily facilitates corrupt behavior, we would be better served by it’s elimination. Toby just posted a translation of an interview with the economist Franz Hoermann who basically says the same thing.

    Comment by Karl — December 6, 2010 @ 1:41 am

    • Well, my link doesn’t seem to work so here’s the URL:


      Comment by Karl — December 6, 2010 @ 1:42 am

    • Google Books has some of Franz Hoermann’s writings. These include:

      Premises and Promises of Theory Formation in Economics

      Knowledge Management in Societies

      I quickly skimmed over these and very much agreed with what I read. In short, he points out that the system is based on medieval models and our schools and businesses indoctrinate people into treating this nonsense as some sort of science.


      Comment by Karl — December 6, 2010 @ 3:28 am

    • Thanks, Karl. I’ll check it out.

      I think the ideal goal for relocalization will be for most transactions to exist under a cooperative system, “non-reciprocal” as they say at P2P.

      As we maximise that as well as reciprocal barter we can minimize the usage of money.

      Of course, the main reason authoritarian structures want to impose the use of money for taxes is to impose power. We can see there how even direct issuance as with MMT, while a big improvement over bank money, is still an ambivalent tool and far from ideal.

      Comment by Russ — December 6, 2010 @ 5:12 am

  4. […] […]

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  5. […] to the bank-controlled cash supply. So one key part of fighting back is the imperative to Take Back Our Money. One key part of relocalization is the development of alternatives to the system cash economy. […]

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  6. […] full awareness of the Land Scandal.   We’ll articulate the real nature of money and how to Take Back Our Money.   As I mentioned in an earlier post, we should each take responsibility for reporting on a topic. […]

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  7. […] I’ve written before about our imperative and ability to Take Back Our Money. There I only touched on the capacity of time dollars (T$) to replace “normal” command […]

    Pingback by Time Dollars vs. Command Money (1 of 2) « Volatility — August 26, 2011 @ 1:49 am

  8. There’s a simpler more direct explanation for the creation of the Fed.

    There was no secret conspiracy to create a central bank, both a bank for other banks and a bank for the govt. According to details in Gabriel Kolko’s “Triumph of Conservatism”, this central bank idea was discussed and promoted by various think tank types for around a decade. As the plan began to be fleshed out, there were large conferences in New York City and Chicago. But this was not just a Northern plan, the plans were shopped around to bankers and major businesses all across the country. ALL approved of the idea, there was only some disagreement on some of the details, like how many bankers vs. businessmen would sit on boards, which shareholders would be Class C vs Class A with regard to voting rights.

    I have deduced, though it was not clearly explained as such, that the people considering a central bank, were concerned with bypassing Constitutional challenges in the courts. The Treasury is empowered to COIN money in unlimited quantities (unless a “fiat” standard of using Gold or some other precious rare metal is imposed; they could use copper or nickel) and the Treasury is also empowered to engage in limitless borrowing, the issuing of Bonds. The Treasury is NOT empowered to issue plain old money, either in paper dollars or electronic credits, as they do now. So it is by legal limitation and custom that the Treasury must “borrow”.

    By the way, my reading of history of Lincoln’s Greenbacks is that they were NOT money, but rather Bonds. The Govt insisted they were not issuing “money”, but the bonds were issued to pay soldiers and suppliers, so they began to circulate AS money, in the absence of Gold specie.

    By the way, again, famous libertarian Lysander Spooner *opposed* a govt-imposed Gold Standard. This is where the Govt stamps a value on coins with a certain weight-fineness of Gold (or Silver). The problem Spooner saw, is that this conventional price is always wrong. The mere existence of a Gold Std increases the demand for Gold to coin money, which increases its value. When the metal value of the coins is greater than the face value, people take their coins to be melted down for ornamental or industrial purposes, or otherwise hoard Gold coins, reducing the supply in circulation.

    (Gresham’s law states that most people will spend money into circulation when it has less or little or no intrinsic commodity value. Since paper and electronic money holds no commodity value at all, that circulates for commerce while Gold coins go into safety deposit boxes or collections or to modern goldsmiths.)

    ANYHOW, with Congress creating a Central Bank which — like all banks — does have the power to issue credit out of thin air, and to purchase assets like mortgage securities or govt bonds, and the Treasury can sell unlimited Bonds to the Fed, it’s essentially “money creation”, or it’s cousin. By Law, however, the Fed cannot purchase Tsy Bonds directly from Tsy. Instead, it must purchase Bonds from the Market, from Banks. Banks — especially those designated as “Primary Dealers”, including foreign non-US banks, are REQUIRED to participate on Tsy bond auctions, so their profit on interest, fees, and any gains is mandatory.

    MMT starts out by simply and clearly describing the current system as it exists. THEN they deduce policy proposals.

    If the “national debt” was really a crisis, the Treasury and Congress could act like the Soup Nazi in Seinfeld and say “No more Bonds for you!!” to all the bond traders, banks, and foreign govts that hold Dollars. In that case, when Bonds mature on the 15th of every month, these Securities Accounts (savings) at the Fed would be debited, and Reserve accounts (checking) would be credited — exactly what happens today — and those Dollar balances — which are then no longer counted as “national debt” — would accumulate, and pay no interest. Or Congress or the Fed could authorize those Reserve accounts to pay interest. The owners of those liquid financial assets probably would seek out other safe investments.

    But that would be stabbing rich people in the back, and seizing from them a means of cheap guaranteed profits. THEN the Bond Vigilantes would have a real reason to be angry. Instead of them cutting off the US from this “lending” (it’s not) — which they have never done and won’t do — the Govt would cut them off.

    I have seen similar proposals, such as for the Tsy to issue a short series of $1 Trillion in coins to “pay off the debt”. That’s not functionally necessary, but it’s an interesting insight to consider. In this case, no laws would have to be changed.

    But Congress has the power to repeal, modify, or create laws for more substantial changes in the “US Debt”.bogeyman. Why haven’t they done so yet?

    Comment by Gary Goodman — July 13, 2012 @ 11:24 pm

    • Sorry, I forgot to mention, GREAT ARTICLE on the downside of this fabulous power which *should* and *could* be utilized to help Americans, and everyone else.

      Comment by Gary Goodman — July 14, 2012 @ 12:40 am

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