Editing Monetary reform (section)

==Alternative money systems==
{{See also|Modern monetary theory}}
===Government Control vs Central Bank independence===
To regulate credit creation, some countries have created a [[currency board]], or granted independence to their [[central bank]].  The [[Reserve Bank of New Zealand]], the [[Reserve Bank of Australia]], the [[Federal Reserve]], and the [[Bank of England]] are examples where the [[central bank]] is explicitly given the power to set interest rates and conduct monetary policy independent of any direct political interference or direction from the [[central government]]. This may enable the setting of interest rates to be less susceptible to political interference and thereby assist in combating [[inflation]] (or debasement of the currency) by allowing the [[central bank]] to more effectively restrict the growth of [[money supply|M3]].<ref>[https://mises.org/story/2810 Manipulating the Interest Rate: a Recipe for Disaster], by Thorsten Polliet, December 2007</ref>

However, given that these policies do not address the more fundamental issues inherent in fractional reserve banking, many suggest that only more radical monetary reform such as government directly taking over central banks such as the China or Swiss models can promote positive economic or social change.  Although [[central bank]]s may appear to control inflation, through periodic bank rescues and other means, they may inadvertently be forced to increase the [[money supply]] (and thereby debase the currency) to save the banking system from bankruptcy or collapse during periodic bank runs, thereby inducing [[moral hazard]] in the financial system, making the system susceptible to [[economic bubble]]s.<ref>[http://www.rgemonitor.com/blog/roubini/210283/ Moral Hazard Effects of Central Bank Intervention] {{webarchive|url=https://web.archive.org/web/20080324142328/http://www.rgemonitor.com/blog/roubini/210283 |date=24 March 2008 }}, by [[Nouriel Roubini]]</ref>

===International monetary reform===
Theorists such as [[Robert Mundell]] (and more radical thinkers such as [[James Robertson (activist)|James Robertson]]) see a role for global monetary reform as part of a system of global institutions alongside the [[United Nations]] to provide global [[ecological]] management and move towards [[world peace]], with [[Robert Mundell]] in particular advocating the revived use of gold as a stabilising factor in the international financial system.<ref>[http://www.usagold.com/gildedopinion/mundellgresham.html Uses and Abuses of Gresham's Law, by Robert Mundell]</ref><ref>[http://www.jamesrobertson.com/article/roleofmoneyandfinance.pdf The Role of Money, James Robertson]</ref> Henry Liu of the ''[[Asia Times Online]]'' argues that monetary reform is an important part of a move towards [[post-autistic economics]].<ref>[http://atimes.com/atimes/Global_Economy/JA30Dj03.html The Road to Hyperinflation] {{Webarchive|url=https://archive.today/20120629220416/http://atimes.com/atimes/Global_Economy/JA30Dj03.html|date=29 June 2012}}, [[Henry C.K. Liu]]</ref>

While some mainstream economists{{who|date=April 2021}} favour monetary reforms to reduce [[inflation]] and [[currency risk]] and to increase [[efficiency (economics)|efficiency]] in the allocation of [[financial capital]], the idea of all-encompassing reform for green or peace objectives is typically espoused by those{{who|date=April 2021}} on the [[left-wing]] of the subject and those associated with the [[anti-globalization movement]].{{citation needed|date=April 2021}}

===Commodity money===
[[Newt Gingrich]] called for a commission on returning to a [[hard currency]] or asset-backed currency, which is often argued to be an antidote to [[inflation]].<ref>{{cite news |last1=Isidore |first1=Chris |title=Gingrich: U.S. should reconsider gold standard |url=https://money.cnn.com/2012/01/18/news/economy/gingrich_gold_standard/index.htm?iid=EL |work=CNNMoney}}</ref> This may involve using commodity money such as money backed by the [[Gold standard|gold]], [[Silver standard|silver]] or [[Bimetallism|both]], commodities which supporters argue possess unique properties:<ref>{{cite book |last1=Westerfield |first1=Ray Bert |title=Elements of money, credit, and banking |date=1921 |publisher=Ronald Press Company |url=https://books.google.com/books?id=nskZAAAAYAAJ&q=gold%20universal%20money |language=en}}</ref> their extraordinary [[malleability]], their strong resistance to [[forgery]], their character as stable and impervious to decay, and their inherently limited supply.<ref>[https://mises.org/library/theory-money-and-credit Theory of Money and Credit], [[Ludwig von Mises]] 1953</ref><ref>{{cite news |last1=Prada |first1=Luis |title=Gold Bars Are Worth $1 Million for the First Time |url=https://www.vice.com/en/article/gold-price-1-million-dollars/ |work=VICE |date=21 August 2024}}</ref>

===Social credit and the provision of debt-free money directly from government===
Still other radical reform proposals emphasise monetary, tax and capital budget reform which empowers government to direct the economy toward sustainable solutions which are not possible if government spending can only be financed with more government debt from the private banking system.  In particular, a number of monetary reformers, such as Michael Rowbotham, [[Stephen Zarlenga]] and [[Ellen Brown]], support the restriction or banning of fractional-reserve banking (characterizing it as an illegitimate banking practice akin to [[embezzlement]]) and advocate the replacement of fractional-reserve banking with government-issued debt-free [[fiat currency]] issued directly from the [[Treasury]] rather than from the quasi-government Federal Reserve.{{citation needed|date=April 2021}} [[Austrian School|Austrian commentator]] [[Gary North (economist)|Gary North]] has sharply criticized these views in his writings.<ref>[https://mises.org/books/coogan_north.pdf Gertrude Coogan's Bluff, Greenback Populism as Conservative Economics]</ref>

Alternatively, some monetary reformers such as those in the [[social credit]] movement, support the issuance of repayable interest-free credit from a government-owned central bank to fund infrastructure and sustainable social projects.  This social credit movement flourished briefly in the early 20th century, but then became marginalized. In Canada, it was [[Canadian social credit movement|an important political movement]] that [[Alberta Social Credit Party|ruled Alberta]] through nine legislatures between [[Alberta general election, 1935|1935]] and 1971, and also won many seats in [[List of Social Credit/Créditistes MPs|Québec]]. It died out in the 1980s.

Both these groups (those who advocate the replacement of fractional-reserve banking with debt-free government-issued fiat, and those who support the issuance of repayable interest-free credit from a government-owned [[central bank]]) see the provision of interest-free money as a way of freeing the working populace from the bonds of "[[debt slavery]]" and facilitating a transformation of the economy away from environmentally damaging [[consumerism]] and towards sustainable economic policies and environment-friendly business practices.{{citation needed|date=April 2021}}

===Examples of government issued debt-free money===
Some governments have experimented in the past with debt-free government-created money independent of a bank. The American Colonies used the "[[Colonial Scrip]]" system prior to the [[American Revolution|Revolution]], much to the praise of [[Benjamin Franklin]]. The paper money of Pennsylvania maintained its value for forty years.<ref>{{cite book |last1=Carey |first1=Lewis James |title=Franklin's Economic Views |date=1928 |publisher=Doubleday, Doran & Company |url=https://books.google.com/books?id=9U9wn2cG4JoC&q=%22maintain%20its%20value%22 |language=en}}</ref>

[[Abraham Lincoln]] used interest-free money created by the government to help the Union win the [[American Civil War]]. Since greenbacks were not limited by gold, they fueled wartime prosperity among farmers and industrial growth.<ref>{{cite book |last1=Arnold |first1=James R. |last2=Wiener |first2=Roberta |title=American Civil War: The Essential Reference Guide |date=19 July 2011 |publisher=Bloomsbury Publishing USA |isbn=978-1-59884-906-6 |url=https://books.google.com/books?id=lEzEEAAAQBAJ&dq=%22The+Greenbacks:+Or,+The+Money+that+Won+the+Civil+War%22&pg=PA335 |language=en}}</ref>

===Free banking===
[[Kevin Dowd]] favours permitting competing banks to issue private banknotes whilst also eliminating the central bank's role as [[lender of last resort]].<ref>{{cite web |title=What You Should Know about Free Banking History |url=https://www.cato.org/blog/what-you-should-know-about-free-banking-history |website=www.cato.org}}</ref> He describes a gold standard as a "natural choice."<ref>{{cite web |title=Easy Money and the Decapitalization of America |url=https://www.cato.org/policy-report/january/february-2011/easy-money-decapitalization-america# |website=www.cato.org}}</ref>

[[Electronic money|Digital means]] are also now possible to allow trading in hard currencies such as gold, and some believe a new free market will emerge in money production and distribution, as the [[internet]] allows renewed decentralisation and competition in this area, eroding the [[central government]]'s and bankers' old [[monopoly]] control of the [[means of exchange]].<ref>[http://www.lewrockwell.com/podcast/?p=episode&name=2009-02-01_095_not_losing_your_head.mp3 ''Not Losing Your Head''] {{webarchive|url=https://web.archive.org/web/20090416083310/http://lewrockwell.com/podcast/?p=episode&name=2009-02-01_095_not_losing_your_head.mp3 |date=16 April 2009 }}, Speech by [[Lew Rockwell]]</ref><ref>[https://www.mises.org/store/Free-Market-Monetary-System-A-P553.aspx?AFID=14 ''Free Market Money System''] by [[F.A. Hayek]]</ref>

===Local barter, local currency===
[[Paul Hawken]] suggests wholesale reform of money and currency, based on ideas from [[green economics]] or [[Natural Capitalism]], would be beneficial.<ref>{{cite book |last1=Berghoff |first1=Hartmut |last2=Rome |first2=Adam |title=Green Capitalism?: Business and the Environment in the Twentieth Century |date=2 May 2017 |publisher=University of Pennsylvania Press |isbn=978-0-8122-4901-9 |url=https://books.google.com/books?id=_DWXDgAAQBAJ&dq=%22Paul+Hawken+and+others+suggest%22&pg=PA14 |language=en}}</ref> These include the ideas of [[soft currency]], [[barter (economics)|barter]] and the local [[service economy]].

[[Local currency]] systems can operate within small communities, outside of government systems, and use specially printed notes or tokens called [[scrip]]s for exchange. [[Barter (economics)|Barter]] takes this further by swapping goods and services directly; a compromise being the [[Local Exchange Trading Systems]] (LETS) scheme: a formalised system of [[community-based economics]] that records members' [[mutual credit]] in a central location.

===Demurrage currency===
{{Excerpt|Demurrage currency}}