Prosperity & Community - And Canada's Great Monetary Experiment

In this engaging set of video clips (see below), Bill Abrams, a retired, 85-year old Canadian high school teacher nicely tells the story of modern money and banking that, I hope, is gradually working its way into the public awareness.

The story he tells, which parallels what has happened in the United States and elsewhere, is about Canada’s growing national debt and the gradual bankrupting of its community life, individual freedoms, and public goods and services consequent to the adoption and spread of the “fractional reserve banking system.”

This is the system the United States, without public debate, adopted in 1913 with the creation of the Federal Reserve. Ever since, our country’s direction has been largely determined by private banks, our national debt has grown exponentially, and we have been subject to unnecessary cycles of economic boom and collapse.

Abrams talks about how Canada for many decades operated on a different monetary system — a healthier system that pulled it out of the depression and enabled Canada to build a national infrastructure, full employment, and safe, happy communities from 1935 to 1972, without incurring any significant public debt.

But as Abrams relates, in 1972, under pressure from the international banking system, Canada too adopted the debt-based, fractional reserve currency-issuance system. Since then, its public debt has been skyrocketing year after year, and interest payments to banks on that debt have been taking an ever-larger piece of the public budget. In other words, Canada joined the club.

Perhaps surprising to many, the United States, too, has at times enjoyed monetary systems that were in fundamental ways like what Canada had in place from 1935 to 1972. In fact, the American Colonies invented similar systems when they devised paper money to fund local prosperity. It was British opposition to Colonial-issued paper money that helped to ignite the American Revolution. Abraham Lincoln resurrected such a system when he started issuing the famed “Greenbacks” in the mid-19th century, to fund the Civil War without going into debt to banks. But, like the Bank of Canada, Lincoln's Greenback system was gradually displaced by modern banking, and with similar results.

Similar stories have occurred elsewhere. For instance, there is the dramatic example of the Island of Guernsey, which I wrote of elsewhere (Guernsey).

All of these stories renew hope for a world where every community can rediscover its way to creating a world of safety and prosperity, where we lead more fulfilling and meaningful lives, in more caring and neighborly communities.

The stories also suggest that local communities – towns, neighborhoods, counties — have it within their power to create complementary currencies that can help them regain the sovereignty and self-sufficiency they have lost to the “system,” i.e. to large private and public institutions and the marketplace that they control. The phenomenon of local currency creation is one of the remarkable stories going on around the world right now, with many thousands of examples springing up around the world.

Money in its essence is a human creation, an artifact of the law — or, more fundamentally, of human agreement. Money, in its essence, is simply a powerful enabler of human cooperation. It can be understood as an acknowledgment of service rendered, and the promise of the same in return. Money is therefore simply a sign of trust. Even in our corrupt, privatized system, and despite money’s alternating “golden” and “filthy” emotional associations, this mutual trust is still the underlying core from which money derives and that makes money work. Our current monetary system, which uses privately-issued bank debt as a substitute for money, falls sadly short of fulfilling money's social promise. A good money system builds community trust and capacity, and engages everyone in building a world that benefits all. How we create money is a great piece of the puzzle for setting the world on a better and different course. History shows that there is a better way.

Here are the Bill Abram video clips:

THE CRIME OF THE CANADIAN BANKING SYSTEM: Bill Abram

Part 1 (http://www.youtube.com/watch?v=jghiU55O5eY)
Part 2 (http://www.youtube.com/watch?v=FyHpaHo71mQ)
Part 3 (http://www.youtube.com/watch?v=1ixeDP5LEEQ)
Part 4 (http://www.youtube.com/watch?v=hLtretltL3I)

Other people who are telling the story, each from a different angle, include:

- Stephen Zarlenga, The Lost Science of Money
- American Monetary Institutute - www.monetary.org
- Bernard Lietaer, The Future of Money
- Robert De Fremery, Rights and Privileges
- Ellen H. Brown, The Web of Debt
- Thomas H. Greco, Jr., Money: Understanding and
Creating Alternatives to Legal Tender
- Paul Grignon, Videos (available on YouTube): “Money as Debt,”
parts 1 & 2; Web: www.moneyasdebt.net

“All of the perplexities, confusion and distress in America arises, not from the defects of the Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation” -- John Adams