Greco on Money

I have just read a book called Money: Understanding and Creating Alternatives to Legal Tender by Thomas J Greco. I found it very interesting. He shows how alternative forms of money can emerge without any government intervention. The most common form is the LETS, or Local Employment and Trading Exchange. I did not realise how common these exchanges are. They work by recording what people owe to each other on a computer. This is very similar to the system that I describe in my parable called Beeble. It is nice to have the viability of this proposal confirmed.

The book does have a couple of serious limitations. He sees credit as something that someone must issue. This is not correct, as credit is something that emerges from our character, or something we gain by selling something we have produced. I have explained this in Money. He does not fully the grasp the problems that arises when banks treat their depositor’s money as an asset of the bank. I have described this problem in Bank Loans and Deposits.

One strength of this book is his view that new forms of money must emerge at a local level and spread out. They cannot be imposed from the top. This is an important principle.