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Money: Understanding and Creating Alternatives to Legal Tender
Cash. Loot. Scratch. Lucre. Bread. Coin. Scrip. Moolah. Green. We all think we know intuitively what money is, and what it can do for us. Tom Greco, director of the Community Information Resource Center, understands and explains money on an eye-popping, fundamental level. Moreover, he provides a roadmap on how to make alternatives to the "legal tender" work for individuals, communities, and local economies.Money will set your mental gears spinning with fantastic ideas. This book explains the mysteries and realities of money in clear and accessible prose, and reveals the true workings, and alarming fragility, of our existing financial system. It also describes concrete and realistic actions that individuals, businesses, social service agencies, and governments can take to enhance productivity and purchasing power, to protect local economies from the ravages of globalization, and to strengthen the bonds of community. "Money" is a radical critique of our existing financial system, but also a practical and inspirational how-to manual for creating a vibrant and effective community currency system.You'll learn: the truth about how money is created, and what it actually represents;why we're all in debt;how the financial system is structured to inevitably transfer wealth from the poor to the rich; andhow to start a financial revolution in your local community.A retired professor of business and economics, Tom Greco has spent twenty years studying community currency systems around the world, including historical models (such as during the Great Depression), and the scores of contemporary examples now operating in the United States, Canada, Europe, South America, Australia, New Zealand, and Japan. He helped establish the Tucson Traders currency in Arizona, and he has served as a consultant for many others. No pie-in-the-sky idealist, Greco offers a realistic vision of how healthy local economies can be supplemented with flourishing community currencies.Anyone who works routinely with money needs this book--this means bankers, stockbrokers, merchants, community organizers, loan sharks, gamblers, investors, bank robbers, hedgefund operators, sports agents, and ordinary people.
320 pages, Paperback
First published November 1, 2001
4 people are currently reading
89 people want to read
About the author
Thomas H. Greco Jr.
6 books7 followersThomas H. Greco, Jr. is the director of the Community Information Resource Center, which he founded in 1992. CIRC is a nonprofit consulting organization and networking hub dedicated to economic equity, social justice, and community improvement, specializing in community currency and mutual credit design, development, and implementation. He is a former engineer and professor of business administration. Tom's previous books include New Money for Healthy Communities; Money and Debt: A Solution to the Global Crisis; and Money: Understanding and Creating Alteratives to Legal Tender. His newest book is called The End of Money and the Future of Civilization. "
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January 16, 2015
Introduction
xxi. The development of computerized telecommunications technologies and the Internet have put into the hands of ordinary people an information matrix and ability to communicate that was undreamed of just a few years ago. Among other things, such tools have enabled the organization of grassroots communities of interest that transcend barriers of distance, language, and culture…
What’s the Matter with Money?
p5. In order for money to come into circulation, someone must go into debt to a bank.
p8. The principal amount is created at the time the loan is made, but the money to pay the interest due in subsequent periods has not yet been created. Thus debtors, as a group are in an impossible situation of always owing more money than there is in existence.
Community Currency and the New World Order
p15. When we seek to make change in the world, we must make it at every level, beginning with ourselves. Change at the personal level then enables change at the inter-personal level, then at the societal, structural, and institutional level, and maybe even at the biological level.
What is Money?
The Disintegration of Local Economies
Money, Power, and the U.S. Constitution
p43. In colonial America, Spanish milled silver coins, called dollars, circulated widely as money. The Constitutional Congress, in adopting these cons as the basis for the monetary system of the newly formed United States of America, was simply recognizing what was already common practice. Since the Spanish coins varied in their silver content, the main work of the committee was to determine the average silver content of the coins in circulations and to specify what should be the silver content of the new American dollar coins. This they did, and eventually settled on a figure of “371.25 grains of silver, .999 fine.”
Restoring Local Economies
p51. A fundamental principle of sound money management is that the supply of money or credit available at any given time should accurately reflect the wealth of material wares and services available in the market for purchase in the near term.
A Brief History of Community Currencies and Private Exchange Systems
Global Finance, Inflation, and Local Currencies
p79. New money that is created on the basis of anything except the exchange of goods and services coming to market represents a debasement of the currency and will cause inflation of prices in the market. (“Bonds That Brought a Boom,” by José Ressig, in New Economics, no. 20, winter 1991, London, England.)
New Wave Pioneers
Recent Models and Developments
p104. Shortly after making the shift to paper currency, the system accountant reported that “the greater advantage so far seems to be a change in people’s attitude about [Tucson Trader’s] adminstrative role—many folks came to us with their personal disputes about trades. Now that there’s nobody to report their trades to, there’s less temptation to report their complaints as well.”
Currency Fundamentals
p131. I believe that a community-based exchange system, in contrast to the dominant system with which we are all familiar, should not depend on legal enforcement of contracts. As with any voluntary association, apart from crime and malfeasance, there should be no legal penalties for failure to honor one’s commitment. Sanctions should be internal, such as suspension of membership privileges or expulsion from the association.
p132. Although an “Ithaca HOUR” is not precisely defined, people tend to think of it as having a value more or less equal to the local average hourly wage.
Mutual Credit
p142. As the mutual credit system develops, members will likely find that they are supporting one another in a variety of ways—as friends, confidants, counselors, and more. Some direct barter and informal trading will occur. This should be encouraged rather than discouraged. Even though private and informal transactions bypass the system and avoid paying fees into it, they also reduce the workload. The primary objective, after all, is to foster the development of mutually supportive relationships. If the system works for people, they will help to maintain it through donations and volunteer labor. Sometimes it’s better not to keep score.
p142. Continuing Issues in Mutual Credit Systems. Debit Limits. Account Settlement Agreements. Savings and Investment Provisions. Interest/Demurrage on Account Balances. Coresponsibility Groups. Group/Organizational/Family Memberships. Taxability/Reportability. Advertising and Transaction Fees.
p144. Strategies for Enhancing Mutual Credit Systems and Gaining Acceptance.
Basic Currency Types: A Classification Scheme
p147. The most powerful type of community currency is not issued on the basis of a national currency or any other existing currency, but is issued into circulation as a credit obligation of some group or organization other than the government or the banking establishment.
p147. A currency can be either cash-based, that is, issued by some entity or authority that transfers the currency to a buyer who pays for it with official money; or it can be wealth-based, that is, issued by some individual or group or authority that transfers the currency as payment to a seller of commodities, merchandise, or services.
A Note on Interest
Medium of Exchange or Savings Medium?
p175. A chronic debit balance may indicate that a member is having some kind of personal trouble, in which case fellow members would probably want to help in some way. Perhaps that member has a spending addiction or limited abilities.
Improving Local Currencies, or How to Make a Good Thing Better
p185. A principal is one who initially receives valuable goods and/or services and uses the notes to pay for them. It is the principal who actually issues the currency into circulation by buying goods and services with it.The currency notes are a generalized IOU that must be redeemed at some time.
p185. An agent performs a different role. An agent does not spend the currency notes into circulation. She or he does not issue the notes but merely distributes them to the principals who will issue them (spend them into circulation). The agent, therefore, is not responsible for redeeming the notes.
p193. How Does It Work?
How to Design and Implement a Community Exchange System
A Business-Based Community Currency
Currency Alternatives for Impersonal Markets
Good Money for Good Work
Youth Employment Scrip (YES)
xxi. The development of computerized telecommunications technologies and the Internet have put into the hands of ordinary people an information matrix and ability to communicate that was undreamed of just a few years ago. Among other things, such tools have enabled the organization of grassroots communities of interest that transcend barriers of distance, language, and culture…
What’s the Matter with Money?
p5. In order for money to come into circulation, someone must go into debt to a bank.
p8. The principal amount is created at the time the loan is made, but the money to pay the interest due in subsequent periods has not yet been created. Thus debtors, as a group are in an impossible situation of always owing more money than there is in existence.
Community Currency and the New World Order
p15. When we seek to make change in the world, we must make it at every level, beginning with ourselves. Change at the personal level then enables change at the inter-personal level, then at the societal, structural, and institutional level, and maybe even at the biological level.
What is Money?
The Disintegration of Local Economies
Money, Power, and the U.S. Constitution
p43. In colonial America, Spanish milled silver coins, called dollars, circulated widely as money. The Constitutional Congress, in adopting these cons as the basis for the monetary system of the newly formed United States of America, was simply recognizing what was already common practice. Since the Spanish coins varied in their silver content, the main work of the committee was to determine the average silver content of the coins in circulations and to specify what should be the silver content of the new American dollar coins. This they did, and eventually settled on a figure of “371.25 grains of silver, .999 fine.”
Restoring Local Economies
p51. A fundamental principle of sound money management is that the supply of money or credit available at any given time should accurately reflect the wealth of material wares and services available in the market for purchase in the near term.
A Brief History of Community Currencies and Private Exchange Systems
Global Finance, Inflation, and Local Currencies
p79. New money that is created on the basis of anything except the exchange of goods and services coming to market represents a debasement of the currency and will cause inflation of prices in the market. (“Bonds That Brought a Boom,” by José Ressig, in New Economics, no. 20, winter 1991, London, England.)
New Wave Pioneers
Recent Models and Developments
p104. Shortly after making the shift to paper currency, the system accountant reported that “the greater advantage so far seems to be a change in people’s attitude about [Tucson Trader’s] adminstrative role—many folks came to us with their personal disputes about trades. Now that there’s nobody to report their trades to, there’s less temptation to report their complaints as well.”
Currency Fundamentals
p131. I believe that a community-based exchange system, in contrast to the dominant system with which we are all familiar, should not depend on legal enforcement of contracts. As with any voluntary association, apart from crime and malfeasance, there should be no legal penalties for failure to honor one’s commitment. Sanctions should be internal, such as suspension of membership privileges or expulsion from the association.
p132. Although an “Ithaca HOUR” is not precisely defined, people tend to think of it as having a value more or less equal to the local average hourly wage.
Mutual Credit
p142. As the mutual credit system develops, members will likely find that they are supporting one another in a variety of ways—as friends, confidants, counselors, and more. Some direct barter and informal trading will occur. This should be encouraged rather than discouraged. Even though private and informal transactions bypass the system and avoid paying fees into it, they also reduce the workload. The primary objective, after all, is to foster the development of mutually supportive relationships. If the system works for people, they will help to maintain it through donations and volunteer labor. Sometimes it’s better not to keep score.
p142. Continuing Issues in Mutual Credit Systems. Debit Limits. Account Settlement Agreements. Savings and Investment Provisions. Interest/Demurrage on Account Balances. Coresponsibility Groups. Group/Organizational/Family Memberships. Taxability/Reportability. Advertising and Transaction Fees.
p144. Strategies for Enhancing Mutual Credit Systems and Gaining Acceptance.
Basic Currency Types: A Classification Scheme
p147. The most powerful type of community currency is not issued on the basis of a national currency or any other existing currency, but is issued into circulation as a credit obligation of some group or organization other than the government or the banking establishment.
p147. A currency can be either cash-based, that is, issued by some entity or authority that transfers the currency to a buyer who pays for it with official money; or it can be wealth-based, that is, issued by some individual or group or authority that transfers the currency as payment to a seller of commodities, merchandise, or services.
A Note on Interest
Medium of Exchange or Savings Medium?
p175. A chronic debit balance may indicate that a member is having some kind of personal trouble, in which case fellow members would probably want to help in some way. Perhaps that member has a spending addiction or limited abilities.
Improving Local Currencies, or How to Make a Good Thing Better
p185. A principal is one who initially receives valuable goods and/or services and uses the notes to pay for them. It is the principal who actually issues the currency into circulation by buying goods and services with it.The currency notes are a generalized IOU that must be redeemed at some time.
p185. An agent performs a different role. An agent does not spend the currency notes into circulation. She or he does not issue the notes but merely distributes them to the principals who will issue them (spend them into circulation). The agent, therefore, is not responsible for redeeming the notes.
p193. How Does It Work?
How to Design and Implement a Community Exchange System
A Business-Based Community Currency
Currency Alternatives for Impersonal Markets
Good Money for Good Work
Youth Employment Scrip (YES)
December 20, 2020
Some of the information in here is dated as it was written in late 90's however the theory in here is spot on and in fact very helpful for understanding the mechanics and transformational power of community credit systems. With the advent of smartphone apps with 100% visibility of all marketplace trading it has allowed some truly revolutionary community credit markets to grow such as Sardex in Sardinia, Italy doing over 100 million Euros a year in community trading and other networks in Calgary like the Calgary Dollars.
The lack of a book on this subject from 2019 onward is a hole in the book publishing industry that should be filled.
The lack of a book on this subject from 2019 onward is a hole in the book publishing industry that should be filled.
July 23, 2014
Good explanation of how banks work, why there should not be interest paid for loans. Many examples of local currencies and how they work. IN some cases the same advice was repeated numerous times. Good list of resources and the end of the book. Most benefical to explain how money comes into existence and that a shortage means people will not get paid for their work because there is no money for them. (somewhat simple characterization on my part). Argues that local control means everyone wins, no inflation, money helps local commerce, employment, and can be directed to what is important to the community. Three stars because it was somewhat disjointed in how it was organized.
Displaying 1 - 3 of 3 reviews