Monopoly of currency leads to serfdom Link http://www.themalaymailonline.com/opinion/gaurav-daga/article/monopolyof-currency-leads-to-serfdom Nobel laureate Fredrick ugust !

!ayek is often viewed as a radical in the field of theory of money. "ven the liberals see his arguments on monetary diversity as too revolutionary. #t$s been almost %&' years since the industrial revolution yet we continue to deploy the timeworn monetary concepts of currency monopoly. (he practice of solo currency within a nation state still prevails. nd today) many countries have political democracy without monetary democracy. *ince %+,') the #nternational -onetary Fund .#-F/ has identified - 0'1 monetary collapses) %1& banking crashes and ,0 countries around the world embroiled in sovereign debt crises. *tatistics have shown that very few people in there own country uses currencies that are distinct from their bank owned debt notes. Furthermore) in this knowledge economy) to tackle 0%st century complications) the monetary paradigm has to be fundamentally transformed to monetary ecology. (hat is) scaling up of complementary currencies of different values in parallel with the e2isting money system. (he need for monetary diversity has been much delayed. 3y analy4ing four simple 5uestions) we can develop the low resilient nature of the solo currency within a nation state. First) 6ho creates money7 *econd) !ow is money created7 (hird) how is the monopoly of money enforced7 nd Fourth) what do we mean by 8money$7 *cholarly studies offer us the keys for first two 5uestions. 9nly around :; of the total money is printed out by the reserve banks. nd the ma<ority of money is created by the debt with the banks. (his is so because notes are issued with interest by the banking system. nd every dollar/rupee/ringgits) we see is someone$s debt. #t$s either a government debt) corporate debt or private debt. (hird) why is that everybody uses dollars in =* or yen in >apan or rupees in #ndia7 nswer - ta2es. 3usinesses can e2change whatever they want. !owever they need to pay ta2es and there is <ust one thing) which is acceptable 3ank debt owned notes. 9ne of the purposes of the ta2 system is to give value to the currency. Lastly) (he definition of -oney) as per our economic te2tbooks is a component of functions vi4. unit of account) medium of e2change) store of value and so on. !owever) that$s not what money is) it$s what money does. #ncreasingly scholars have also started to redefine the function of money as an agreement within the community to use something standardi4ed as a medium of e2change. 6here in community can differ from being a nation state to a two-person economy. "ven 3retton woods institutions defined dollar as worldly use because of an agreement. !owever) the agreement remains unconscious. >ust like fish in the water. (here is no alternative as divorce is to marriage. 6e tend to assume money is neutral but it isn$t. -oney is programmed to be a monoculture. (he very reason for money$s

structural instability is monoculture. ?ritics often view this systematic problem as a byproduct of development strategies. @et) comple2ity theory proves that monetary monoculture causes structural problems. ?onse5uently) low diversity leads to low resilience. Need for monetary innovations: Now) to achieve higher diversity with high resilience) *wit4erland$s monetary innovation offers us such multiplicity. *wit4erland is often considered as one of the most stable economies in the world. #talians remain as one of the largest nonnaturali4ed groups in *wit4erland yet its more stable than #taly. #t isn$t for the cows or the mouse. #t$s the 6#A currency started in %+:1 by %B key businessmen) who started creating money themselves. (he mechanism is <ust as same as the bank owned debt notes. # sell you something) # have the credit in 6#A .% 6#A C % *wiss Franc/ and you have a debt if you are doing something back to me. dvantageously) the currency can be used among themselves without interest and not having to go to the bank. Furthermore) it has been macroeconomically proven as one of the clandestine of *wit4erland$s economy. #n the last few years) 6#A has created commercial credit circuit where 6#A can be e2changed for international currencies under certain specific conditions. *imilarly) =ruguayan government now accepts two types of currencies in the form of ta2es and services to be paid by the people. First) the conventional bank notes and *econd) the business-to-business currency. Aesult7 3ingoD "verybody in =ruguay now accepts this monetary diversity. nother such multiplicity was seen in Ehent) 3elgium when government introduced 8(orekes$. complementary currency used to promote gardeningF cultivation of fresh vegetables and use of ?FL bulbs. Aesult7 "verybody began cleaning up their neighborhood and started planting in need of special currency. -ore torekes you have) the more euros you earnD (herefore to achieve such monetary flying geese paradigm) governments should progressively support such multiplicity. Not only will it help in deficit reductions but also help achieve benefits in fundamental needs such as safer environment and global warming decline.