MONEY CANNOT operate without competition to determine values. Such process of determination of values is the only means of assuring money acceptors that value equivalent to that surrendered will be available to them in turn. It follows that the stability of the monetary unit depends upon the spontaneous action and reaction of all participants in competitive exchange, and not upon the creditability of the issuer who, though known to the bank or central bookkeeper, is unidentified with his issue in the actual circulation. This disposes of the idea that the issue power must be exercised only by the wealthy.

Nor should the credit from which money springs be confused with ordinary commercial credit. Commercial credit involves the promise to deliver money or goods to the creditor. It is defaultable by intent, and is more rigidly structured than money-creating credit, since it stipulates a specific creditor and date of maturity. Money-creating credit is not subject to intentional default. The issuer is eager to redeem the sum of his issue, since to do so involves only getting money rather than giving. This eagerness on the part of everyone to gain money by selling goods or services is the security back of money-creating credit. Therefore, since it exists universally, the criterion of the money creating power is not one of moral responsibility of the issuer, but of his exchange capacity.

In other words, the qualifying determinant of the would-be money issuer is not his moral or material responsibility, but his capacity to deliver value to the market in exchange for the money which he eagerly desires. In short, anyone who has marketable goods or services is qualified to issue money to the extent of such capacity. Everyone is so dependent upon money, the medium of exchange, that he needs no moral persuasion to give his goods or services for it. That is what he is in business for.

In fact, need of money is a condition precedent to the issue thereof. To issue money, one must be without it, since money springs only from a debit balance on the books of the authorizing bank or central bookkeeper. N o money can spring from a black ink balance, because such balance indicates that the holder stands as creditor to the economy, having obviously delivered more value to the market than he has taken out. This statement does not mean that on his own ledger he is in a creditor position, because therein is involved also the weight of his commercial credit. But if on the books of the bank or central money bookkeeper he stands as creditor to the economy, he cannot be a money issuer without first establishing a red ink balance.

The statement that a would-be money issuer must be impecunious requires the qualifying explanation that this does not include currency held, as, obviously, there is no record of this on the central bookkeeper's account. Nor does it mean that a "loan" may not be executed to one who has a black ink balance. But the "loan" does not constitute issue, and before the depositor can write new money, he must exhaust his black ink balance. Nor does "red ink balance" mean an overdraft as shown on the depositor's account. It means a deficit when the sum of the note representing the "loan" is taken into account. The fact that only those without money can be money issuers shows that the adequacy of money circulation requires adequacy of issuers, and that the supply can never be adequate for a healthy economy when the number of issuers is restricted.

Since moral responsibility is not a qualification for a money issuer, and only the impecunious can be issuers, we must give up the idea that money issuance is the prerogative only of the elite and the wealthy. All money springs from those who have none, and just to the extent that the money issuing policy is governed by snobbish and aristocratic ideas will the economy be starved and restricted.

We must also recognize that firms or corporations are more likely to be disappointed in their ability to garner money through sales than salary and wage workers. Business institutions are limited to the marketing of specific items, which the market may turn from between the time that they have issued money and the time that they undertake its recapture by sales, whereas wage and salary workers deal in the raw material, labor, which can be switched to the production of any commodity for which there is demand. This flexibility of labor application makes money redeeming power less speculative on the part of employees than employers.

For example, take a manufacturer with a thousand employees, and compare the issuance of 100,000 money units by the employer with the same sum as issued by the employees in average lots of 100 each. Suppose the enterprise should fail and the corporation go out of business. The employees would still be in business, since they could sell their labor to other employers even if the product of their previous employment were unmarketable by their erstwhile employer. Man, the manufacturer of human energy, is less of a speculative enterpriser than an employer who has converted that energy into a specific commodity. The marketability of the latter is confined to a particular category of commodities, whereas the former is the raw product of all commodities.

Labor, as services, is indeed the sole commodity dealt with in exchange, and its value is determined by exchange. Now if money is based upon value, and the only value lies in human services, mental and manual, it may be seen that all money is service money. Does it not follow that man, the fountain of all values, is the natural fountain of all money?

There inheres in every producer the power to issue the money necessary to negotiate his production in exchange. Therefore as we humanize our concept of money and exchange, we enlarge its power to advance the social and economic order. As we have seen, a money issuer initiates a money circle, and it is these circles that organize society into cooperatives. The more circle organizers the economy has, the greater its effect in elevating human standards. To be sure, not everyone can act as a money circle initiator at the same time since, as pointed out, one must be in a debit position to become a money issuer, i.e. one must be moneyless, and therefore those with money are naturally, as long as they hold that status, disqualified as issuers. But under the existing monetary system, many who are naturally qualified are artificially disqualified. This puts a limitation upon exchange initiators, and as exchange is limited, so must production be also.

Producers or potential producers must always be permitted to spark exchange and thus, in consequence, production, when it stalls by reason of a deficiency of money circulation. In other words, no producer should be dependent upon the money circles initiated by others. When all circles fail to include him and he is left impecunious, he serves not only himself but the economy by starting a circle himself. For if he does not, he must stop buying, and thus he reduces the demand for the production of others and spreads the contagion of unemployment. By buying, he absorbs materialized labor, thus creating demand for more, which will react upon him, since when we buy of others we indirectly buy from ourselves. This is the security against unemployment and depression. It requires but the recognition that every man is his own employer and must not be denied the opportunity of employing himself by employing others, i.e., buying the production of others.

Two misconceptions plague our ideas of money. One is that which admits governments—which have not and cannot be invested with money issuing power—to the money circulation, and the other is that which bars those who by nature are qualified to issue. Thus money and exchange and production suffer from a deficiency of true money and a burdening of the false.

To solve our politico-economic problems, we must eradicate these two evils. Our inventive genius, so marvelous in mechanics, must be turned toward contriving a monetary system that will liberate invention in the industries, since without a facile and faithful exchange system, further progress is stymied and industrial invention is rendered useless.

The key concept in the organization of a new and adequate monetary system must be the recognition of the dignity of man as the producer and provider of the means of exchange. The individual must be viewed as the elector in the economic democracy who determines by his monetary ballot the course of both the economy and the state, and he must never be denied the use of such ballot. If these provisions are respected, the economic democracy will dissolve within its operation the evils that now exist and thus progressively confine the state's activities and diminish its interventions in the economic affairs of the people.

Political democracy is a delusion and a snare when it undertakes to reflect the public will in the field of economics. The ballot is too infrequent and, even then, involves special effort. It undertakes to secure the delegation of power to resolve legislative and executive action on a myriad of questions, some of which were not even contemplated at the time of polling and all of which are abstract, requiring objectivity and a presumed understanding of the complex interaction of forces that neither the elector nor the elected possesses.

Economic democracy, on the other hand, using the money ballot, permits the elector to cast his ballot subjectively and frequently in the regular course of his living as he pursues his happiness. Furthermore, he is not subject to the will of the majority. He may vote for and secure what he desires even if he is in the minority.

To seek liberation from our limitations not through political democracy, which at best can only negative the state's invasion of natural rights, but to pursue it by positive measures through the mastery of money, utilizing it as an untrammeled ballot in an economic democracy that knows no political boundaries—this is the new approach to freedom and human fellowship.