Talk:Monetary reform

Motivations for reform
A lot has happened in the monetary reform debate since the 2008 crisis. This page needs a major update to adjust to this. Especially the reasons why reformers want a new system need to be summarized in a clear manner. I have tried to summarize the criticism of fractional reserve banking in the following points:


 * The central banks cannot control the money supply when private banks are creating credit money. Credit money can be converted to reserve money in various ways so that there is no practical limit to the amount of credit money that can be created by private banks.


 * Less than 6% of the money in circulation in the world is coins and bank notes, the rest originates from bank credit, carrying interest. This interest allows banks to earn rents from the mere fact that money exist. Reformers do not think it fair that banks have this extremely profitable privilege and that the market as a whole is paying rents to the banks just for having money to circulate.


 * A major part of all new credit money that is created is spent on changing the ownership of existing assets rather than creating new assets. This process inflates the prices of assets, including real estate, factories, land, and intellectual rights. This makes living unnecessarily costly for everybody. It also makes the economy unstable because of the creation of asset bubbles.


 * There is 2-3 times as much debt in the world as there is money in circulation. This is a result of the accumulated compound interest of credit money. This counterintuitive fact makes it virtually impossible to repay all debt. The mathematical consequence is that somebody will go bankrupt even if they have done nothing wrong. It seems unfair that somebody will become destitute as a consequence of the money system rather than because of their own reckless behavior. Businesses and even states can go bankrupt too as a consequence of the fact that there is more debt than money in circulation. Take Greece as an example. There are many explanations of the poor state of the Greek economy, but one rarely recognized factor is that a large fraction of the money in circulation in Greece originates from credit issued by banks outside of the country. A monetary union will be unstable when there is an imbalance between the creation of credit money in the different states.


 * The USA is earning rents from the fact that US dollars are used as an international currency in trade and money reserves.

These points need to be backed by reports from monetary reform organizations and other critics, as well as academic publications. The following publications appear to be particularly important:
 * * Graeber, David: Debt - The first 5,000 Years. Melville House, 2011.
 * * Zarlenga, Stephen. The Lost Science of Money: The Mythology of Money - The Story of Power. New York: American Monetary Institute, 2002.
 * * Di Muzio, Tim, and Richard H. Robbins. An Anthropology of Money: A Critical Introduction. Routledge, 2017.
 * * Maier, Michael. Die Plünderung Der Welt: Wie Die Finanz-Eliten Unsere Enteignung Planen. FinanzBuch Verlag, 2014.

The articles on money creation, fractional-reserve_banking, Credit theory of money, History of money, Heterodox economics and Money as Debt also need a short summary of this criticism with a link like: The list of proposed alternatives also needs an update. Bolarno (talk) 12:48, 25 June 2018 (UTC)


 * I have added two sections with arguments for and against reform. See my comment below.Bolarno (talk) 15:08, 13 September 2018 (UTC)

NESARA
NESARA is a monetary reform legislative proposal at http://www.nesara.org

The late Dr. Harvey Barnard wrote a book called "Draining the Swamp" which talks about the coming monetary rights movement. —Preceding unsigned comment added by 207.5.110.24 (talk • contribs) 15:36, 23 June, 2005


 * Unfortunately, NESARA does not have much credibility since it is connected with New Age thinking about ascended masters, and the like. However, something like the American Monetary Institute which is a genuine movement head by Zarlenga is quite a different matter. —Preceding unsigned comment added by 213.78.15.212 (talk • contribs) 09:35, 30 August, 2007


 * Just wanted to point out that the creator of NESARA and writer of "Draining the Swamp" Dr. Harvey Barnard has written that his proposal has absolutely nothing to do with New Age thinker who has the internet user name "Dove of Oneness" who probably found NESARA after Dr. Harvey Barnard posted it on the internet then proceeded to tell far-fetched stories such as how it was secretly signed into law all the while pandering for donations. Not that clarifying this here will make any difference in people associating one mans good intentions which resulted in NESARA to crazy wild eyed conspiracy stories by someone interested in notoriety and donations anyway but due to the fact that Dr. Harvey Barnard was actively doing something he believed could change the world for the better, agree with him or not, taking a few minutes to clarify the truth is time well spent.    —Preceding unsigned comment added by 0WhatWhat0 (talk • contribs) 13:08, 20 February 2010 (UTC)


 * I would recommend to put a link from List of monetary reformers to Nesara, rather than discussing it here. Bolarno (talk) 09:04, 25 June 2018 (UTC)

Major overhaul
I am planning to give this article a major overhaul, if that's OK. It is currently very dense and switches wildly between criticisms and solutions. There are a lot of well meaning sentences but they don't go together and the whole thing is a bit of a dog's breakfast. It also goes alarmingly off-topic from the start.

Money Reform is an important entry point to a little-taught area of economics so I think it is important to introduce the main objections - namely fractional reserve and the fact that governments do not supply money - then move on to offered alternatives.

This restructure will not add any more references, that are badly needed, but it may be easier to add them once it is done. - RubyJester (talk) 22:25, 13 May 2008 (UTC)


 * It is done! I tried to keep as many of the existing sentences as possible but nearly everything received attention. I hope you agree it is now be easier to add references and hopefully remove the 'not enough citations' template. Since this is more like an introductory page to many sub-topics I summarised some principles with the onus on the relevant specialist page to back that up. Please jump in. - RubyJester (talk) 19:38, 14 May 2008 (UTC)

Neutrality or war of ideas
Monetary reform can be achieved such that it controls the world, its resources and its people through an unelected and unaccountable Single Global Currency Association or through democratically elected national governments.
 * The above sentence implies that the current (unreformed) monetary system does not control the world (albeit on a nation-by-nation basis). Is that intentional? Janosabel (talk) 18:21, 17 April 2009 (UTC)

The sovereignty of nation states includes the issue of a national currency. Robert Mundell states that governments impose national currencies.

NESARA is as questionable a monetary reform initiative as is the Single Global Currency Association. —Preceding unsigned comment added by 89.240.43.222 (talk) 08:03, 12 August 2008 (UTC)

Sorry, I added this before logging in and I don't like to edit other people's comments. But I don't consider it 'neutral' to associate monetary reformers with left or anti-globalization labels.

Sabine Organiser, Forum for Stable Currencies

Publisher, Public Credit Petition

Transfinancial Economics
Evolving Transfinancial Economics

There is a project in research, and development called Transfinancial Economics.........

http://www.p2pfoundation.net/Transfinancial_Economics

R.Searle. —Preceding unsigned comment added by 195.188.183.89 (talk) 12:38, 18 October 2008 (UTC)

Missing mention of advocates, other popular approaches
The article has apparently been spammed by advocates of gold standard or "full reserve" nonsense. Given they don't even seem to understand how modern capital requirement rules work, nor cite any important global agreements, these issues should be de-emphasized.

This version is far easier to read and provides a better overview of the basic issues and current thought. This version has more on the history of monetary reform movements. Certainly at least the following para shoudl be restored:


 * Marilyn Waring, John Kenneth Galbraith, Robert Tobin, Amartya Sen, Amory Lovins, Paul Hawken, Herman Daly, David Suzuki, Robert Costanza, Joseph Stiglitz, David Korten, George Soros, and almost all other theorists who have become associated with the anti-globalization movement, peace movement, Green movement, Natural Capitalism, green economics and human development theory have strongly criticized current systems of money supply, banking, and debt, and made a great many policy recommendations. For details see the articles on those individuals and theories. —Preceding unsigned comment added by 142.177.92.153 (talk) 22:40, 25 November 2008 (UTC)


 * I would like to add that C.H. Douglas and the Social Credit movement be added to this list. Major Douglas gave testimonies before the Select Standing Committee on Banking and Commerce (1923), The MacMillan Committee on Finance and Industry (which includes exchanges between Douglas and J.M. Keynes), and the Alberta Agricultural Commission.  Douglas did understand how capital requirements work, and was quite critical of the gold standard, and totally dismissivie of those who advocate "full reserve" or "100% reserve" banking.  The article on Social Credit has been re-written.Chdouglas (talk) 15:27, 27 December 2008 (UTC)


 * Yes, and those points need to be made in this article, because as it stands the social credit view is sitting unjustified amidst a sea of gold standard nonsense. ~

The version you wrote is almost unreadable. I do not support its reinsertion. —Preceding unsigned comment added by 203.206.178.15 (talk) 06:52, 1 January 2009 (UTC)


 * Who is "you" that supposedly wrote that version? It looks like a mishmash to me, like the present one, with various people who understand the issue writing over the mess left by other people who have a lot of references they have misunderstood.


 * An "almost unreadable" but correct article is more desirable and easier to fix than a very readable but totally wrong article that introduces questionable terms like "debt-free money" and "fractional reserve banking" that no modern economist would use, and for good reason.


 * Certainly I agree that the older articles have at least a good list of credible modern theorists who've written on the topic and this one has some good history.  However, I've largely fixed the latter problem with the new section 2 outlining modern, 19th and 20th century debates (separately).  Though it relies on US examples, the book cited (by Galbraith) actually has many other examples notably from Europe between the wars, and outlines in great detail exactly how the Bretton Woods situation fell apart.  I don't think anyone who has not read Money by Galbraith should be trying to write an economic history of the USA, he's the most credible US economic historian probably.

Gold standard advocate POV
I raised the POV flag on the article after my own edit because the article is a POV joke after the first two sections. It's clear that the author advocates the gold standard and considers other approaches inferior or subordinate.

The new introduction frames the controversies better so as to debunk some of the stuff further down, but that's not enough. The article needs to actually survey what all of the most recent Swedish Bank Prize and Nobel Peace Prize winners have said about this, including Amartya Sen, Paul Krugman, Daniel Kahneman, Al Gore, Wangari Maathai, etc..

Ecological and biodiversity finance still missing
The fact that ecological and biodiversity finance approaches have been left out entirely despite being advocated by a long list of highly credible advocates (Paul Martin Jr., Gordon Brown, Bill Clinton, etc.) with actual experience running real G8 countries, is probably the surest sign that the article's gold standard view is well out of hand.

The introduction now makes mention of the fact that the UN advocates the triple bottom line (social capital and natural capital treated as peers to financial capital) approach, but the article needs much more on the biodiversity finance issue, at the very least it.

Patrick Carmack, J.D., author of the Monetary Reform Act
... should also have a page on wp, as well as Monetary Reform Act. --79.102.23.143 (talk) 19:49, 17 February 2010 (UTC)

Does "debt-free" mean anything?
I don't think that the term "debt-free money" makes any sense. If the government (or anybody else) issues notes that it will accept as payment (for taxes, e.g.), then those notes are counted as liabilities— that is, debt. The notes may be interest-free, but they are debts as a matter of accounting. Should the term "debt-free" be replaced with "interest-free" throughout the article? —KHirsch (talk) 21:45, 16 July 2010 (UTC)


 * Currency is counted as a liability of the government but it isn't debt in itself - debt is a subset of liabilities (and assets) which doesn't include currency. I think what they mean when they indicate "debt-based money" is that when the central bank issues new currency, it does so by buying debt, which in turn is lent out by banks as new debt. So the term is in some sense accurate, although misleading and POV since "debt-based money" tends to summon up the impression that citizens of an economy are being grossly indebted by every dollar issued and that the interest paid on this debt never comes back to them. (which is wrong) I have never heard "debt-based money" used by a mainstream economist. Personally I'd prefer to describe it as "money that costs something" (debt) versus "free cash" which is basically the inflation counterargument but at any rate the article doesn't really give a useful statement of the counterargument. Equilibrium007 (talk) 06:29, 17 July 2010 (UTC)

Colonial scrip
The "colonial scrip" story is a hoax that was popularized by Congressman Charles Binderup. While Parliament's regulation of currency was a source of friction with the colonies, that had almost disappeared by 1775 and there is no evidence that Franklin or any of the other Founding Fathers ever thought that the currency conflict was a primary cause of the American Revolution.

Blogger Anthony Hopkins investigated the story at his web site, eliciting comments from the late Leo Lemay, distinguished scholar of Benjamin Franklin. Among other things, Lemay says: As for the causes of the American Revolution, the colonists had many complaints, but the most fundamental one was taxation without representation. There are no accurate quotations from Franklin, though sometimes his point of view is reflected in the speech, but sometimes, too, it misrepresents him.

You can also check that none of the quotes are valid by searching the comprehensive Papers of Benjamin Franklin web site. —KHirsch (talk) 21:47, 16 July 2010 (UTC)

Greenbacks
Lincoln did not call greenbacks "the greatest blessing the people of this republic ever had."

This quote is from a letter that Lincoln scholars reject as a forgery. See. —KHirsch (talk) 21:48, 16 July 2010 (UTC)

Recent back and forth
For any interested observers who may be wondering, reverting banned users is one of the exceptions to WP:3RR. USER:Karmaisking is a banned user with a long history of sockpuppeting, and DebtDukkha has all the hallmarks of a Karmaisking sockpuppet. He easily passes the WP:DUCK test. It's a waste of time, but a sockpuppet investigation has been started Sockpuppet investigations/Karmaisking. LK (talk) 06:33, 22 September 2010 (UTC)

Bold, or evolution interrupted?
BigK HeX and Ravensfire have suggested these changes are "bold". Even leaving aside the irony that new editors are actually encouraged to be "bold" in their edits, these are not bold in any way. They cut down irrelevant (and I might add factually incorrect) stuff about fractional reserve banking. They add a reference to recent stuff from Steve Keen (that subtly corrects the myths about FRB if you actually read the reference). It only really makes amendments to one or two paragraphs. It doesn't change the structure of the article. It seems like it's getting to the point that any edits are being blocked on some pages by self-appointed WP 'guardians'. There is no appeal to WP:POLICY. Just saying you're too bold is actually not a justification to revert. The same bizarre conduct has occurred on the Austrian School page. I think it's important for admins to actually read the refs added and reflect on the relatively minor changes made before auto-reverting on some 'sensitive' pages. Chill guys...


 *  I concur. It's like new or better information has to fight it's way in, regradless of content. and since most people don't check their edits after posting, or try it again. there's a real problem wiht reforming the reform page, to show some real reforms..-- Namaste@ ? 11:35, 2 October 2011 (UTC)

Monetary reform vs currency reform
I suspect that there is a difference also in English between monetary reform and currency reform. The introduction of the euro, the dollarisation of some countries and devaluations in the national currency, are example of a currency reform. Monetary reform is another thing, its reform of how money is created, by private banks through fractional reserve-banking or by a state-owned bank for example. So, I suggest that you should have a separate article on currency reform. See Swedish WP, penningreform and valutareform. --Mats33 (talk) 01:17, 1 December 2012 (UTC)

Positive Money
"Positive Money in the UK Positive Money website tries to raise awareness of the connections between the current monetary and banking system, and some of the biggest social, economic and environmental issues that face society."

Who removed my previous attempt and why under Heading "International Monetary reform" ? --brandsby (talk) 16.56, 30 August 2013 (UTC)

FAO Bob Rayner - What is Positive money advocating if not monetary reform ?? --brandsby (talk) 17.00, 2 September 2013 (UTC)


 * What additions are you proposing? Jonpatterns (talk) 16:55, 6 April 2014 (UTC)
 * The old Positive Money article was deleted. It is potentially a notable organization, I would suggest researching that if you are interested in this area. Jonpatterns (talk) 18:28, 6 April 2014 (UTC)


 * The Positive Money article exists. It was apparently recreated in 2016 as the notability of this organization has increased. There is a link to it from List of monetary reformers. Bolarno (talk) 09:21, 25 June 2018 (UTC)

Dr. Wyplosz's comment on this article
Dr. Wyplosz has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"Please note that not all countries impose a mandatory reserve ratio (e.g. the UK or Canada). I would also suppress "legal" in the second sentence.

"However, some critics of fractional reserve banking argue that the practice inherently artificially lowers real interest rates and leads to business cycles propagated by excessive capital investment and subsequent contraction": this is plain wrong. Central banks fully control the short term interest rate, which seems what the sentence refers to. This also applies to the last sentence of the following paragraph.

"Some critics discuss the fact that governments pay interest for the use of money which the central bank creates "out of nothing"." Logically this implies that governments should borrow at zero interest, which is nonsensical. Like any borrower, governments should face the cost of credit.

The same applies to developing countries in the next section on central bank independence. The second paragraph of that section is at best misleading and mostly wrong.

Mundell supports a rettunr to gold, but nor the reasons mentioned.

There is no evaluation of the many reform proposals, most of which are nonsensical."

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

Dr. Wyplosz has published scholarly research which seems to be relevant to this Wikipedia article:


 * Reference : Yung Chul Park & Charles Wyplosz, 2012. "International Monetary Reform : A Critical Appraisal of Some Proposals," Finance Working Papers 23313, East Asian Bureau of Economic Research.

ExpertIdeasBot (talk) 18:23, 27 June 2016 (UTC)

Currency reform should not be redirected here...
Monetary reform and currency reform is not the same thing. Currency reform is when you change from kronor to euro or devalue etc. Monetary reform on the other hand is based on the critique of money creating by private banks. We have just created new wikidata on penningreform vs valutareform in Swedish, based on this, and English WP should also note the difference, and not redirect wrongly. --Mats33 (talk) 14:16, 12 October 2017 (UTC)

External links modified (February 2018)
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Do we need a history section?
Maybe it would be nice to have a section on the history of monetary reform attempts - perhaps a whole article. It could include the history of the current money system, old religious bans on usury, as well as the reform debates that were prompted by previous crises and crashes in history. Useful references: Zarlenga: The Lost Science of Money; Graeber: Debt: The first 5000 years. Reinhart & Rogoff: This time is different: Eight centuries of financial folly. Di Muzio and Robbins: An Anthropology of Money: A Critical Introduction Bolarno (talk) 15:31, 13 September 2018 (UTC)

New sections added: Arguments for and against reform
I have added two new sections with arguments for and against monetary reform. I think that a list of these arguments is important in order to understand the reform movement, the problems they are trying to solve, and the possible problems of a reformed system. The publications arguing for reform were easy to find, while publications arguing against reform were quite difficult to find and some of them used a jargon that was difficult to understand. Nevertheless, I have tried to represent both sides in a fair and neutral way. Wikipedia is not a forum for debate, and I don't want to add counterarguments or a review of the debate, because that would be difficult to keep neutral and it would make the article too complicated. The section on Alternative money systems probably needs an update. Bolarno (talk) 15:31, 13 September 2018 (UTC)