Tuesday, 20 January 2015 14:49 James Clayton Editorial Dept - Philosophy
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Canada is described as a democratic constitutional monarchy with a sovereign as head of state and a prime minister as head of government. The state, embodied in the sovereign and often referred to simply as “the Crown”, claims ownership of all the land within its geopolitical boundaries and claims sovereignty over the population within its territory. The capital and shares of the Bank of Canada and the Royal Canadian Mint are also held on behalf of Her Majesty the Queen in Right of Canada.

National currency is used to maintain political and economic power. It is not a benign medium of exchange or a reliable store of value. It is systemically scarce, which keeps us in a collective state of perpetual debt, restrains legitimate economic activity, and leads to a shortage of paid employment and involuntary unemployment, even though there are productive activities that can be done and people who are willing and able to produce and exchange goods and services.

Every dollar is “borrowed” or credited into existence as interest-bearing debt, and the interest has to be obtained from money that is also created as interest-bearing debt. Total aggregate debt, including principal and interest, is always more than the total amount of money in circulation.

Money, in the form of credit and “loans”, is created by the financial institutions in collusion with the state and its government, central bank and mint. Government obtains credit from the financial institutions and then passes its debt to taxpayers, but taxes must also be paid with money that is created as interest-bearing debt. The central bank manipulates the price of credit by influencing interest rates, which influences decisions to “borrow” and spend and affects demand for goods and services. Legal tender notes and coins, which represent only a very small portion of the money circulating in the economy at any one time, are distributed to the financial institutions as tangible tokens of credit.


When new money is brought into circulation it adds more money to the economy without necessarily bringing more goods and services to the market. This can lead to currency inflation and price inflation, which erodes the value of savings.

There does appear to be a growing awareness of the problems associated with the present monetary system, and an increasing level of dissatisfaction with government and the political process, but there certainly isn’t a consensus in defining the problem or offering a solution that will sufficiently address all of our concerns or satisfy everyone. This poses a challenge, but it also presents us with an opportunity to examine the form and function of government and money and explore a range of possible alternatives.

As consumers we can choose from an ever-expanding array of goods and services from a variety of producers and providers, with the option to customize some of our purchases. We should not feel compelled to do business with anyone who offers poor quality goods and services or does not pay their legitimate debts, and we should not be expected to pay for anything that we don’t want and don’t use. We should be able to negotiate mutually agreeable prices, control the allocation of our own credit, accept or refuse any form of payment, and use various methods and media of exchange, including barter, mutual credit clearing, community currencies, cryptocurrencies and commodity money. Various arrangements can operate concurrently to facilitate the exchange of goods and services, according to the preferences of the buyers and sellers.

We can also join together to coordinate our activities by forming new groups or seeking membership in various existing organizations, associations and communities. Various groups with diverse religious, social, educational, economic and political interests can coexist in the same geographical area. Organized groups and intentional communities do not need to be defined by contiguous properties, restrictive geopolitical boundaries, exclusive territorial sovereignty and jurisdiction, or compulsory membership.

Voluntary communities and autonomous associations can make their own decisions, according to the preferences of the participants. Different groups and communities can compete or collaborate to attract new members and customers based on the quality and price of any services offered, without any coercive monopolies. Decisions about group membership and the exchange or distribution of goods and services can be made without imposing one’s preferences on anyone else, and without forcing anyone to move to another location.

Money and government are human inventions that have changed over time and will continue to change, but the direction of this transformation will be determined by the way we think and the choices we make. Everything comes down to costs and benefits, and it is possible for various communities, arrangements, methods and systems to exist simultaneously in any locality for the mutual benefit of all voluntary participants, at their own risk and expense.


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