John Zube's Monetary Freedom Manifesto
Addressed to an association of retail businesses
I believe I never sent such a letter. But, especially during economic crises, such approaches should be tried.
In my formerly rather frequent drives to and from Sydney I used to pass the headquarters of the NSW Assn. of Retailers. The quarterly turnover of retailers in Australia I estimate to come to at least A $ 25 billions. If that is true, then up to that amount they could issue their own notes, which only they would have to accept from any presenter at par, for their goods and services or in payment of other debts due to them.
Whoever managed to persuade and organise retailers to pay at least their x_mas bonus payments to their employees _ might be able to earn considerable in commissions. Gift_vouchers are already legal and their use for bonus payments is probably legal as well. It might lead retailers to consider their wider but still outlawed monetary freedom options, especially in crisis times. (J.Z., 21.12.03.)
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Dear Sirs,
So far you have concentrated on helping your members against taxation, bureaucratic regulation, union despotism, to keep them informed on legislative changes and better advertisement and salesmanship options, etc., the important details of their daily business.
You have left untouched, however many general principles, policies, practices and institutions that lead to inflation, mass unemployment, numerous bankruptcies and depressed sales. Nor are you free to trade with wholesalers of the world. You are made dependent upon the laws and institutions and policies of monetary and financial despotism, and interventionist "protectionism", powers that always were and always will be abused, at least to some extent and that do impoverish you and your customers.
You do feel helpless in this respect because you are not given any voice of powers in these matters but are simply victimized and made dependent, like all others are in these respects, upon privileged banks and financial institutions and, especially, upon the central bank, in Australia the Reserve Bank.
This in spite of the fact that the goods and services you own and trade in do constitute the real redemption fund for any currency in any country, as well as the ultimate redemption fund for any savings that are invested in medium or long terms. Constitutions, legislation and jurisdiction as well as false economic and especially monetary and financial doctrines have so far prevented you from mobilizing, to your own advantage and that of everyone else, this redemption fund directly, independently and properly and thus to provide your local communities and the whole country, with
a) a sufficiency of exchange media and
b) with sound and competitive exchange media, something that no central banking system has ever achieved anywhere.
Such thoughts and such actions have so far been out of your minds and out of your experiences and practices. Universities, colleges, most books and magazines have not enlightened you on monetary freedom and its opportunities and the role you could and should play in its realization. But there are growing school of monetary freedom and free banking advocates, and a growing literature that could help to enfranchise and emancipate you in this respect. Unanimity among these schools has not yet been achieved. Many controversies do remain but they could be settled not only by more theoretical arguments but also by the advocacy of individual rights, especially detailed and explicit monetary and clearing and free exchange rights, freedom of contract, experimental freedom, voluntarism, self_help, decentralization, consumer sovereignty and free enterprise and minority autonomy in this sphere, no matter what the advocates and "experts" and fashionable consultants, bureaucrats, politicians and judges say or assert in this sphere.
A monetary and financial revolution, that permanently, properly and quite non_violently would overthrow monetary and financial despotism and, for the first time, introduces fully free market conditions at least somewhere in the world, later everywhere, at least for all who appreciate and want them, is long overdue.
In this revolution you could and should play a large role because you could and should operate its essential media, namely sound currency issues _ with "shop foundation" and short_term loans in your own local currencies especially for wage and salary payments.
You are owning and running and all the time replenishing the essential redemption fund for any currency. Moreover, by rights, no one else should be entitled to issue tickets to be redeemed by you with your goods and services.
Nor should you be forced to borrow tickets from a central bank, through its privileged banking system and associates, in order to enable you to pay your suppliers, employees, tradesmen, taxes. You should be freed to pay them with assignments upon your own goods and services, in a conveniently standardized medium, in denominations like money, be it in form of book accounts, paper or plastic slips or coins or electronic credits or transfers of them or through a complete and independent and federated mutual clearing system.
In Australia e.g. a variety of "shop currencies", issued in the limited sphere of consumer credits and still repayable in government money, has set a precedent for private shop foundation money, at least in paying these consumer credits and accepting these shop currencies in payment for the consumer goods wanted by the debtors of these consumer credits.
The system worked well for many years, in its limited sphere, and it could be rapidly expanded, locally, by a number of issuers mutually accepting their shop currencies and, finally, issuing a common one.
There were other such practices, undertaken in ignorance of the law and later hushed up to avoid legal persecution. But persecution is not to be expected when a monetary revolution is so well prepared that it would, as it could,
a) abolish involuntary mass unemployment and
b) inflation
within a day or two and if, moreover, this monetary revolution were timed to occur shortly before a general election, so that all of its immediate benefits would already be felt before it, so that no politician would dare to immediately suppress this monetary emancipation, because it would lead to a return to mass unemployment, inflation and depression or stagflation. Then, after the election, whichever party would have won, would jump on the band wagon and legalize this revolution retroactively.
You should not let yourself be confined, in your actions and thinking and preparations to mere "shop currencies" issued in consumer credits, or "gift vouchers" purchased from you, but you could gain some practice in the techniques of sound private issues if you were e.g. to pay any x_mas bonus which you are anyhow paying otherwise in cash, directly in your own or in common gift certificates, mutually accepted by you, i.e., indirectly, with your own goods and services.
While you have political "leaders" who promise to abolish unemployment and depression and inflation and stagflation only over years to decades, if ever, and who never fulfilled their promises and who made cynical remarks like "the depression we ought to have had"!, and "the economy is now successfully slowed down" (Keating, on ABC, 25.10.95 ), or who believe still only in Keynesian despotic and absurd practices of inflationary attempts to provide employment, leaders who showed no knowledge of or interest in monetary freedom but only their ignorance and determination to hold on to the powers which monetary and financial despotism (from state paper money to state_insecurities and taxation) do presently grant them, it is high time that all citizens and especially you start thinking how we might help ourselves in spite of these bastards, who are seriously interested only in their own careers, powers and finances and the corruption opportunities open to them and who, in a few cases of honesty, are not saved by their ignorance and prejudices. For decades we have been misled by them, by their slogans, their false programmes and promises, their lies, deceptions and cover_ups, their wrong pretences.
Some of their pop slogans, are e.g. "Buy Australian!", and "Buy your kids a job". Within their protectionist and monetary despotism premises and conditions, they are wrong, misleading and even absurd. But do engage in at least a thought_game of monetary and financial freedom and you will find that they do contain a grain of truth. Your own money, issued by you, will always return to you for redemption, assuring you sales and the chance to issue orders for further supplies and thus employment in trade and production.
Likewise in external trading, clearing certificates or corresponding electronic credits, by suppliers, e.g., of ores, wheat, wool etc., which are common stocks in international trade, and which are accepted by their issuers like ready cash, for their export goods, could well and fast become an efficient international payment and clearing means, one that would obviously bring our own imports, paid with them, into full balance with our exports.
As Prof. Dr. Heinrich Rittershausen, Dr. Walter Zander, Dr. Best and Ulrich von Beckerath, the main spokesmen and writers of the German Monetary Freedom School have taught, the ready_for_sale goods and services of any country are the primary and essential redemption fund of any country and also its short term and long_ term working capital, if expressed in corresponding voluntary savings and investments. In this respect any free economy could and should be completely independent of the present monetary and financial despotism, its privileges and licences, quotas, regulations and prohibitions, commands, interferences and dirigism.
Everyone should be free to pay with his labour, goods and services, in as convenient a monetary and clearing form as could be arranged under monetary freedom.
No one should be under any (but his own contractual) obligation to accept the currencies and financial certificates that are not issued by himself, and free to refuse or rate them as he pleases.
No private or public issue should have legal tender (forced acceptance and force value) for anyone _ but the issuer himself and those who are thus contractually obliged to him.
Consequently, no one could by his own over_issues inflate all prices and wages with his currency. He could at most depreciate is own issues to a limited extent _ and would all the time still have to accept it at par from his customers and debtors. It would be rapidly refused or discounted in the general market, while stable value reckoning and pricing in sound alternative currencies would go on. He would even be likely to go bankrupt as a result and would never again be trusted as an issuer.
Over_issues of optional, private and competing currencies are as unlikely to impossible as those with monopoly game money or with private cheques.
But private cheques could become standardized like money and could be issued for clearing purposes only, i.e. redeemable by the issuer not in government money but in his own goods and services, in debt payments to him and through the general free clearing process.
One cannot inflate an economy by free clearing transactions, by refusable cheques and even less by cheques for clearing and acceptance in one's goods and service sales only.
And while all people are free to issue alternative sound currencies and while sound currencies would quite naturally drive out any unsound attempted currency issues, the market would tend to be always sufficiently supplied with exchange and clearing media to manage all possible and desirable exchanges of goods and services, with labour counted as one of these goods and services.
Circulation period. A short_term sales assurance, one corresponding to the quantity of local currencies with shop foundation that were issued, could best be achieved by limiting each issue to a stated short circulation period of ca. 3 months. By then they must have and will have returned, achieving corresponding sales and usually they will have returned much sooner. People that can handle time_ limited tickets to theatres, buses, trains and planes, can handle such tickets, too.
Forgeries will be rendered difficult to impossible due to the limited circulation period and area and would, if attempted, be rapidly discovered as such, and so would be their issuers. Duplicated numbers would turn up at the issuing office within hours and could be much more easily traced back to the forgers.
International trade. Its issues would be based on the usual export items, not on general and local consumer goods.
Medium and long term investments. They would require prior savings and investments with the local currencies. The savings, investments and repayments could likewise be made with local currencies, each only with a short circulation period.
Precedents:
Roselands Shopping Centre, which for the last few months of building it granted a wage rise in its own notes.
1765? _ Acceptance declaration by London retailers stopped a run on the Bank of England.
Petrol money,
railway money,
bus and street car money,
electricity and gasworks money.
Street money, brothel, tea shop and restaurant money already in ancient China.
Subsistence local village economies, especially in France, managed, for centuries, much of their internal trade via private IOU issues, mutually accepted and periodically cleared.
Australia has also a history of the issue of local private trading tokens, issued by general stores or other well_known enterprises.
Anyone is a potential issuer or could establish a clearing centre who has locally many payments to make and to receive.
The self_limiting and self_liquidating nature of private issues, based on the own labour, goods and services, is obvious. It is also obvious that mutual acceptance, especially by retail shops, would form the most acceptable redemption fund basis. A single labourer or tradesman or shop would not find as wide and ready acceptance _ although, in a perfect clearing system, their notes would be accepted, too and presented to them when payments are due to them. But they could issue their certificates only to a limited extent, to a limited circle and at a discount. They would, like formerly the issuers of bills of exchange and their acceptors, have to resort to a bill discount and its business, to get more widely acceptable bank notes for their personal notes. And these notes, based upon the bills of exchange or personal IOUs, would ultimately serve and suffice to repay the bills of exchange and personal IOUs and this could and should be recognized by issuing them right away as for clearing purposes only.
The right to demand a scarce coin of the realm or an insufficiently supplied government legal tender, could be generally done away with. If debtors want to speculate that they will be able to supply them, then they should in each case do so with private contracts. But more and more the speculative nature of such delivery contracts (dealings in futures for money not yet earned) will become realized and people will prefer to make contracts with media whose redemption will not be in doubt, because it consists in the labour, service and goods supply capacity of the issuer.
The new financiers or issuing centre managers will be those who can properly estimate this redemption capacity of individual and of associates. They will be aided by the rating of each issue in a free market.
To assure full publicity, all details of all issues should be fully publicized. There should be no closed books for them.
Acceptance or Readiness_to_Accept or Clearing and Debt Foundation. These would indicate the possible extent and ultimate limits for private issues.
Some still hold that gold or silver cover would be required. But consumers do not want these goods, as a rule. They resort to them only when other redemption comes into doubt. Instead of rare metal redemption, depending on sufficient rare metal stocks by the issuer, requiring a correspondingly large and non_productive investment, issues could and should rather reckon and express their prices and debts and credits in rare metal weight units, if this is agreeable with their trading partners, employees, debtors and creditors.
This, combined with full freedom to issue, refuse, rate, contract payments and freedom to clear, would make exchanges independent of the gold or silver stocks of an issuer. Whoever wanted rare metal redemption and whenever he did so, could then be referred to the largest ever "redemption fund", namely that of the free rare metal market, for all his par value (with rare metal weight units) clearing and accounting certificates. And the value of all private certificates on this market would also be continuously publicized.
All those trusting neither the government's paper standard nor any rare metal standard, should remain free to utilize whatever value standard they find acceptable among themselves. Freedom of choice of value standards. This can be introduced, in principle, overnight. It does not cost anything more than an agreement on this. In practice it will take some time before some alternative standards will be widely used, if at all, in any particular location. But liberty to do so should always remain assured, as fundamental. And a few, at least in their private and long_term contacts, will always be tempted to do so.
Tax_Foundation. Apart from its confiscatory legal tender and despotic monopoly power, the government paper money is, essentially, only a tax anticipation certificate with tax _foundation. That could and should be soundly managed, not mismanaged in an inflationary way as today, as long as involuntary taxes to finance political budgets are still tolerated by people.
Points to be clarified, to increase awareness of the power and opportunity of associated retailers, informed on their monetary freedom options. They ought to add up
a) the value of their total stocks,
b) their present short_term sales under monetary freedom conditions,
c) how rapidly they could increase their short_term turnover and to what extent, if sales were not problem.
d) Then the figures under c) would be the upper limit for their issues. Up to that limit at most they could issue their own "goods warrants", "service vouchers", "purchasing certificates", always ready to be accepted by them. Initially, they would remain with their issues (granted only in short term production credits, to pay wages of manufacturing or agricultural etc. employers with, pay their taxes, suppliers and own employees), below that maximum level.
The optimal level of issues at any particular time would be determined by free and public market_ rating of their issues. As long as they are freely accepted at par, or would even have a premium over e.g. inflated government money, the issues could and should be continued. As soon as they suffer the slightest discount, they should be discontinued until the par value is attained again.
There would be a vested interest in keeping one's issues at par, so that they could serve as a local currency, now and in future, while maximizing the own turnover.
Lack of uniformity? It has not stopped a great variety of personal and business cheques and of credit card and traveller's cheque systems, nor of tickets and vouchers and gift certificates or shares and other securities. Banks and exchange centres do already deal with a great variety of foreign currencies and could always be consulted on the quality of a local private issue.
But the best and immediate test available to any currency private currency holder or creditor, who is offered private issues in payment, would be to go to the nearest shop and ask it: Would you accept this currency at par? With this shop foundation assured, his mistrust and doubts would be laid to rest. He might also simply refer to corresponding acceptance signs displayed by all the associated shops regarding the currencies they must accept by contract or are prepared to accept like cash.
Does a railway or bus company or air line usually issue more tickets than it is ready to redeem? No shop owner or department store or local shop association would risk the corresponding wrath of the usual local customers that it depends upon. Under full publicity the first over_issues would be very quickly noticed and lead to corresponding discounts and refusals _ with the refusals tending to become permanent.
The own expenses, paid in this way, would lead to corresponding returns from sales. Or, to the extent that you succeed in paying your debt with your own money, you will assure your own sales.
With your own money, issued in a locally acceptable form, you will always be able to pay your own way, at least locally, to the extent that you have goods and services and labour to offer which other local people do want, provided only that your prices are competitive free_market prices.
The equivalent to the present traveller cheques and internationally acceptable credit cards and cash payments by more suitable and rightful issuers than the national government or even a world government, will also come into existence under full monetary freedom. The risks and difficulties and charges involved will even be smaller, because this whole sphere will become much more competitive and efficient in the absence of any legal privileges for some.
The first issues are likely to use the government's paper standard, while the government inflation is not yet galloping. But to the extent that people become monetarily emancipated in their minds and daily experiences, they will look around and establish or accept sound value standards instead. They will become more interested than union functionaries are in preserving e.g. the purchasing power of their wages, while union functionaries benefit through the frequent wage renegotiations made necessary by inflation.
Under stable value reckoning the purchasing power of wages would tend to increase because the prices of goods would tend to fall, due to technical, scientific, management and self_management progressive steps.
To find out the total issue potential, e.g. for wage payments in Australia, we ought to find out at least the total amount of retail stocks or consumer goods in daily demand, of their average present turn_over time and the extent to which the turnover could be increased if present sales facilities and staff were fully employed or increased, in the short term, as much as is possible.
I believe that we would find out that the monetary and financial potential thus revealed would be so enormous that it alone would attract people to ponder how and how fast they could realize this potential and thereby increase sales and employment for themselves and all others, while safeguarding themselves against any future economic crises arising presently from monetary and financial despotism.
A permanent boom period for all productive and creative people would result, including especially all those already involved in trading with daily required consumer goods and services, which would tend to become or could be turned into the equivalent of at least locally liquid cash.
For each particular goods and service there is, for a given population, a present maximum amount. More of it cannot be sold. But once that amount can, at least in the average, be sold certainly, due to monetary freedom, then retailers can much more easily determine the quantities they need and can sell under this system and can thus much more easily give advance orders to the producers. Thus production for the market would become much less speculative and much more adapted to the actual demand, once that is free from the limits imposed by monetary despotism.
The production of all ordinary consumer goods would reach its limits in the consumer capacities of those monetarily emancipated. Nobody who has any labour or service to offer would have difficulties in with them satisfying his primary needs, in full.
Only the consumption of "luxury" goods and services would tend to increase, beyond the limits of e.g. our digestive systems, and within the limits of our ability to provide our labours in return for them.
In other words, our needs could be satiated _ through our own efforts and our wants beyond them could be satisfied, too, via our own efforts quite freely exchanged for them.
The money of monetary freedom would not be considered a curse, because it would not, like the money of monetary despotism, often be too hard to impossible to acquire in sufficient quantities. Free money would always be available to the extent that one is prepared to give one's labour and goods in return for them. It would become an unmixed blessing rather than being considered a curse in its flawed form, that of monetary despotism.
Liquidify your own offers to the market by issuing vouchers upon your goods and services. By nature you should be free to do so. Clear them against the goods and services of others, as conveniently as possible. No one has an individual human right or natural law right to stop you from doing so.
But proceed well informed and carefully against all those, who presently hold power and influence under monetary despotism. Use their customs, including the electronic processes, and the dependence of politicians upon votes, to realize your monetary liberties at an opportune moment.
Under dictatorships even a revolution could be financed against it, by undertaking monetary and financial freedom steps. But details of this kind of monetary revolution goes beyond this initial discussion and limited interest in a relatively democratic to republican country.
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