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C H A P T E R 5

Monetary Reform in the Context of Global Transformation: 
An Example of How to Make the Change
 THE FACT THAT this book concentrates on the issue of 
monetary reform as one important aspect of the total 
global transformation which we are about to witness 
does not mean that it is more important than other 
aspects. From organizational to individual 
transformation, from technological to spiritual 
transformation, we need change.
 Money, how it works and what it does to society, has 
been notoriously overlooked although it seems to be a 
fairly central piece of the puzzle. Neither experts nor 
those who occupy themselves with alternatives to the 
present econornic system seem to worry much about 
this issue. It may not be more important but it certainly 
is not less important than others. It simply affects 

 While the three reforms - in money, land and tax 
systems - proposed in this book constitute only a small 
part of the overall changes that are necessary for survival 
on this planet, they may fit readily into many attempts to 
create a new relationship between human beings and 
nature - and human beings and their fellow human beings. 
Social justice, ecological survival and freedom are 
threatened where we allow the proliferation of societal 
structures which in themselves tend to work against these 
 The proposed reforms clearly combine the 
advantages of both capitalism and communism. They 
avoid their respective shortcomings and provide a "third 
type of solution." They would allow individual freedom 
and growth together with a free market system, and with 
a far greater degree of social equity. At the same time, 
they would stop the exploitation of the large majority by 
a small minority - without introducing the heavy 
regulations of a planned economy and an almighty 
 The communist attempt to create freedom from 
exploitation failed because, in order to secure a 
minimum existence for everybody, communism 
eliminated personal freedom. The capitalist tendency, on 
the other hand, by letting land and capital be exploited in 
an unrestricted practice of personal freedom has 
endangered the minimum existence of the majority of 
people. Both systems have gone too far in their 
respective directions. One has set the priority of 
freedom from hunger above freedom to choose one's 
own life style. The other has set the top priority on 
personal freedom which, in the present monetary 
system, can only be achieved by very few people. Both are 
partially right, but both have failed to create the 
preconditions for a genuinely human existence including 
genuine freedom.
 The reforms proposed here could reduce 
governmental intervention and create an ecological 
economy in which goods and services could be produced 
at an optimum size and level of complexity because that 
is where they would be the cheapest, i.e., most 
competitive in a free system.
 While the full extent to which wealth is redistributed 
through the monetary and land systems is less obvious in 
highly industrialized countries, because of the 
exploitation of developing countries, the working people 
in the latter really pay the price for the monetary 
systems of the industrialized world. Although they 
suffer most, there is little hope that these ideas will be 
used first in the Third World where small elite groups 
dominate in terms of money, land and political power.
 However, there may be a possibility for change in the 
smaller democratic nations of Europe. Scandinavia, for 
instance, with a majority of wealthy and well educated 
people, might prove comparatively well open to social 
change. And this is what monetary reform is all about.
 At the U.N. World Commissions Public Hearing in 
Moscow on December 11, 1986, A. S. Timoschenko of 
the Institute of State and Law, U.S.S.R. Academy of 
Sciences, proposed that:
 "Today we cannot secure security for one state at the ex-
pense of the other. Security can only be universal, but secu-
rity cannot only be political or military, it must be as well 
ecological, economical and social. It must ensure the 
fulfillment of the aspirations of humanity as a whole." (32)
 The struggle of humankind for social and economic 
justice has been long and fierce. It has created sharp 
divisions in political orientations and religious beliefs. It 
has cost many lives. It is indeed urgent that we come to 
the understanding that nobody can obtain security for 
oneself at the expense of another, or at the expense of 
the environment on which we depend. In order to make 
this feasible we need some deep and practical changes in 
the structures of our social framework. Hopefully the 
changes proposed in this book will contribute to the 
creation of security and justice for people and our global 
environment, and finally begin to replace revolution with 

 Before the money system could be reformed, a large 
section of the population must realize that we have to 
limit money to its functions as an exchange medium, as 
a scale for prices and as a constant standard of value. If 
this recognition is transformed into political action, 
then the central bank, as directed by the government, 
would employ a parking fee rather than interest to keep 
money in circulation. 

Figure 18

 As a method to secure circulation, the parking fee 
would make possible all necessary transactions. If there 
is enough money available to accomplish all necessary 
transactions, then it is not necessary to put more into 
circulation. Hereby, the growth of the amount of money 
available follows the growth of the economy and this 
follows, once again, the natural growth curve (curve in 
Figure 1).
 If somebody has more cash than they need, at any 
time, they pay it into their bank. Depending on the length 
of time the money is deposited, the parking fee will be 
either diminished or waived. Figure 18 shows how 
today's interest scale would be replaced by a parking fee 
scale. In the case of long term deposits there would be 
no fee; cash would have the highest fee.
 The hoarding of cash in the new system could be 
avoided much more easily than by gluing a stamp on the 
back of a banknote as was done in Wörgl. Several 
suggestions have been made: One is a lottery system. It 
would ensure the circulation of cash by the withdrawal 
of one specific note denomination, in the same way as a 
lottery draw.
 Based on today's eight denominations (in the case of 
the German Mark DM 5/10/50/100/200/500/1000), 
e.g., the eight coloured balls representing different bank 
note denominations would be mixed with white balls 
representing no conversion in such a way that on 
statistical average - a conversion of one denomination 
would occur once or twice per year. 
 Draws could take place, for example, on the first Saturday 
of each month. Once a denomination is drawn, the conversion 
period could go on until the end of the month. The drawn notes 
would remain legal tender and could be used for payment in all 
shops. However, the respective fee would have to be deducted
these bank notes.
 Another option is to exchange the invalid notes against 
payment of the exchange fee at a bank or post office. Because 
no one likes to pay fees, everyone would limit their use of cash 
to the necessary amount, and surplus money would be paid into 
bank accounts.
 The exchange would be facilitated by giving the new note 
denominations a new colour and size. New DM 100 yellow 
notes replace the old blue notes which go out of circulation. The 
concealment of overdue notes can be avoided by making the 
new notes slightly longer or wider so that every false note would 
jut out of a bundle, no matter how thick.
 Unlike stickers, or stamp money, the drawing of 
denominations has the advantage that there is no need to print 
new money. We could keep the same money we have today 
and the actual cost of the system would be no higher than the 
replacement of worn out notes today.
 In this new neutral money system, banks are under the same 
obligation as everybody else to pass the money on to those 
who need it. If they have interest free deposits
on their books, and don't lend the money out or transfer it to the 
central or regional bank, they would also have to pay the 
parking fee. People receiving a credit would
pay no interest but banking charges and risk premiums,
comparable to those included in every bank loan. The 
two amount to about 2.5% (1991 in Germany) of the 
average credit costs (see Figure 18). In Switzerland, they 
only amounted to about 1.5% of the average credit costs. 
In industrially developing countries, they were even two 
to three times as high.