I remember clearly a story from that time about a Soviet Union factory that paid its workers in sanitary napkins.

I also don't imagine huge international transactions in gold or silver. We only have about 160,000 tonnes of gold in the world, total - 0.024kg or less than one ounce of gold for each of the 6.7 billion people on Earth. Or if we consider silver, about 43 billion ounces have been produced ever, about 6 ounces each. The medieval silver penny had a bit over a gram of silver, so that 6 ounces would allow some 170 pennies.

Would this really be enough currency for all the transactions people want to make?

My point was not that any particular way of having currency was the best, but that there were very many different ways of doing things throughout history - not just silver and gold.

Some of the community-based and/or intentional community barter systems use a time system. You work or trade an hour for a set amount of value. A key point is that all work has equal value. An hour of lawyering is equal to an hour of babysitting. (This has implications for education, of course, but again, if all education is given equal value and/or is merit-based - say, highest achievers getting their choice of major - then it might not matter.)

The starting value would be arbitrarily set, I imagine, but from that point on, there wouldn't be much need to adjust it up or down. If some resource isn't available, then that resource is doled out at a fraction of the set value. Anything that there's plenty of, well, there's just plenty of it.

Just thinking by the seat of my pants again, so blast away, folks.

Cheers

I think the cumbersomeness of barter gets overstated a lot. That's not to say that money wouldn't re-emerge, if only because we live in a society heavily adapted and accustomed to fiat currency, but I do think it is important to recognize that barter systems can be very complex and sophisticated, and that monetary exchanges don't always *replace* - that is, barter offers refinements over and above monetary systems in tight-knit communities, among people where money is short (ie, the poor who never have a lot of access to currency), and it operates, when frequently used, to enmesh people in relationships with one another - often permanent ties, since nothing ever comes out "even" in bartering.

We tend to view economic history as a one-way trip away from barter, and towards currency by preference, because currency is so preferrable to barter. And for some things it is - but for some things it isn't, and it might be more accurate to argue that part of the problem has been the prioritization of a way of life that made barter seem inferior, rather than the inherent limitations of barter.

Sharon

Although you might believe that free-markets are dream, or utopia, my point is only to show that we would be better off. I'm not concerned with how improbable this is, just what would result in a return to sound money. My whole point is that sound money limits the power of those in control to devalue your savings endlessly and use your money for evil means.

If people desired to be free, and understood the game, we could end this control tomorrow. It would only take individuals to bypass central banking currency altogether. There is no law against what can be used as a medium of exchange. For example, we could use gold and silver coins to exchange goods between each other, and not use paper currency at all in the process. If these coins were once issued by the government, they would be legal tender, and taxes would only be paid on the face value. The effect would be a completely legal way to pay less tax, and usurp the power of the political majority. Another benefit to this is that it would strengthen local economies, as people would have more purchasing power, as the Fed would not be able to use the invisible inflation tax.

I never said it would be easy to create a system free from control of the elite, but the first, and most important step is to take away their credit card. Quickly, the American empire disintegrates; without the common citizen to pay the bills war and destruction would be limited. No longer would poor people have to go kill other poor people for the sake of the ruling elites. It would take a revolution, but with the only other option being endless slavery for our masters, is it not worth trying?

Hi D. Benton Smith,

Thanks for responding. I will try and answer the case for the free market as best I can. This is a very broad topic, so forgive me if my response is a little narrow.

Most economists would agree that the current economic debacle was triggered by the increasing defaults on Sub-prime mortgages, which is both a result and cause of the real estate market bubble popping. Most economists would also state that this collapse is due to deregulation that saw the financial institutions recklessly lending, seemingly without any regard for the future. Oh my, how the free market has failed, they cry. We need more government regulation and nationalization to ensure that this does not occur again, to make sure that the nasty free market doesn't cause so much damage.

This issue can be understood in the same way as the question of what our world without money would be like. I argue we don't have money. I argue that we don't have anything that resembles a free market either.

In order to understand subprime mortgages, one must understand that there exists two Government-sponsored entities called Fannie Mae and Freddie Mac. These two quasi-government entities subsidized mortgages for people who, under more-prudent rules of borrowing, would never have qualified for a loan from a conservative banking institution. In fact, Fannie and Freddie Mac hold half of all mortgage debt in the US. Without Fannie and Freddie buying up this mortgage debt, there would have been no market for debt that could never be serviced. Without the governments intervention, the free-market would have ensured that these loans would not have been made, and the result would be that we would not have a major collapse in real estate prices, nor would we have had a major run up in property prices.

Here's a quote from Congressman Barney Frank in 2003 , "I want to roll the dice a little bit more in this situation toward subsidized housing." Of course, when the luck eventually runs out, and the massive fraud is exposed, its quite convenient to blame the free-market and advocate even more government to solve the problem which they themselves created. Kind of like the fox eating some of the chickens, and than believing that only the fox should look after the chickens.

With regards to your question about the money supply being given back to control of the government. Here are two articles from the constitution;

Article I, Section 8, Clause 5: The Congress shall have Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.
Article I, Section 10, Clause 1: No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

The founding fathers understood how the Republic could be undermined through paper currency. If Congress took over control of the money supply and followed the constitution, they would mint gold and silver. Congress (and government) would also be handcuffed; they would not be able to spend at will, for there power would be limited due to their inability to "print" more money. Mining gold and silver is a very difficult task, and the supply of both metals only increases by about 3% per year. So you see, even if congress wanted to expand the money supply, they would be prevented from doing so. Not only that but instead of selling debt to private banksters, in which every citizen has to pay interest on, Congress would receive the interest payments from the people, which could be used to cover costs of the government, rather than increasing the power of the Fed owners.

I understand that there might be objections to this, which is why I also wouldn't find it a problem to allow competition in currency. Let the free-market decide what should be money, just as letting the free-market decide who should receive mortgages would have largely prevented the current economic debacle.

Reasonable?