During the nineteenth century many anarchists and individualists attempted to issue low-interest or no-interest private currencies. Mutual Banking, by Colonel William Greene, and True Civilization, by Josiah Warren, are records of two such attempts, by their instigators. Lysander Spooner, an anarchist who was also a constitutional lawyer, argued at length that Congress had no authority to suppress such private currencies (see his Our Financiers: Their Ignorance, Usurpations and Frauds). A general overview of such efforts at free enterprise, soon crushed by the Capitalist State, is given by James M. Martin in his Men Against the State, and by Rudolph Rocker in Pioneers of American Freedom (an ironic title, since his pioneers all lost their major battles). Lawrence Labadie, of Suffern, N.Y., has collected (but not yet published) records of 1,000 such experiments; one of the present authors, Robert Anton Wilson, unearthed in 1962 the tale of a no-interest currency, privately issued, in Yellow Springs, Ohio, during the 1930s depression. (This was an emergency measure by certain local businessmen, who did not fully appreciate the principle involved, and was abandoned as soon as the "tight-money" squeeze ended and Roosevelt began flooding us all with Federal Reserve notes.)
It is traditional among liberal historians to dismiss such endeavors as "funny-money schemes." They have never explained why government money is any less hilarious. (That used in the U.S. now, for instance, is actually worth 47 percent of its "declared" face value). All money is funny, if you stop to think about it, but no private currency, competing on a free market, could ever be quite so comical (and tragic) as the notes now bearing the magic imprint of Uncle Sam-and backed only by his promise (or threat) that, come hell or high water, by God he'll make it good by taxing our descendants unto the infinite generation to pay the interest on it The National Debt, so called, is of course, nothing else but the debt we owe the bankers who "loaned" this money to Uncle after he kindly gave them the credit which enabled them to make this loan. Hempscrip or even acidscrip or peyotescrip could never be quite so clownish as this system, which only the Illuminati (if they really exist) could have dreamed up. The system has but one advantage: It makes bankers richer every year. Nobody else, from the industrial capitalist or "captain of industry" to the coal-miner, profits from it in any way, and all pay the taxes, which become the interest payments, which make the bankers richer. If the Illuminati did not exist, it would be necessary to invent them-such a system can be explained in no other way, except by those cynics who hold that human stupidity is infinite.
The idea behind hempscrip is more radical than the notion of private-enterprise currency per se. Hempscrip, as employed in the novel, depreciates; it is, thus, not merely a no-interest currency, but a negative-interest currency. The lender literally pays the borrower to take it away for a while. It was invented by German business-economist Silvio Gesell, and is described in his Natural Economic Order and in professor Irving Fisher's Stamp Script.
Gresham's Law, like most of the "laws" taught in State-supported public schools, is not quite true (at least, not in the form in which it is usually taught). "Bad money drives out good" holds only in authoritarian societies, not in libertarian societies. (Gresham was clear-minded enough to state explicitly that he was only describing authoritarian societies; his formulation of his own "Law" begins with the words "If the king issueth two moneys…," thereby implying that the State must exist if the "Law" is to operate.) In a libertarian society, good money will drive out the bad. This Utopian proposition-which the sane reader will regard with acute skepticism-has been seen to be sound by a rigorously logical demonstration, based on the axioms of economics, in The Cause of Business Depressions by Hugo Bilgrim and Edward Levy.*
* Economists can "prove" all sorts of things from axioms and few of them turn out to be true. Yes. We saved for a footnote the information that at least four empirical demonstrations of the reverse of Gresham's Law are on record. Three of them, employing small volunteer communities in frontier U.S.A. circa 1830-1860, are recorded in Josiah Warren's True Civilization. The fourth, employing contemporary college students in a psychology laboratory, is the subject of a recent Master's thesis by associate professor Don Werkheiser of Central State College, Wilberforce, Ohio.
APPENDIX ZAIN: PROPERTY AND PRIVILEGE
Property is theft
–P. J. PROUDHON
Property is liberty.
–P. J. PROUDHON
Property is impossible.
–P. J. PROUDHON
Consistency is the hobgoblin of small minds.
–RALPH WALDO EMERSON
Proudhon, by piling up his contradictions this way, was not merely being French; he was trying to indicate that the abstraction "property" covers a variety of phenomena, some pernicious and some beneficial. Let us borrow a device from the semanticists and examine his triad with subscripts attached for maximum clarity.
"Property1 is theft" means that property1, created by the artificial laws of feudal, capitalist, and other authoritarian societies, is based on armed robbery. Land titles, for instance, are clear examples of property1; swords and shot were the original coins of transaction.
"Property2 is liberty" means that property2, that which will be voluntarily honored in a voluntary (anarchist) society, is the foundation of the liberty in that society. The more people's interests are comingled and confused, as in collectivism, the more they will be stepping on each other's toes; only when the rules of the game declare clearly "This is mine and this is thine," and the game is voluntarily accepted as worthwhile by all parties to it, can true independence be achieved.
"Property3 is impossible" means that property3 (= property1) creates so much conflict of interest that society is in perpetual undeclared civil war and must eventually devour itself (and properties1 and 3 as well). In short, Proudhon, in his own way, foresaw the Snafu Principle. He also foresaw that communism would only perpetuate and aggravate the conflicts, and that anarchy is the only viable alternative to this chaos.
It is not averred, of course, that property3 will come into existence only in a totally voluntary society; many forms of it already exist. The error of most alleged libertarians- especially the followers (!) of the egregious Ayn Rand- is to assume that all property1 is property2. The distinction can be made by any IQ above 70 and is absurdly simple. The test is to ask, of any title of ownership you are asked to accept or which you ask others to accept, "Would this be honored in a free society of rationalists, or does it require the armed might of a State to force people to honor it?" If it be the former, it is property? and represents liberty; if it be the latter, it is property1 and represents theft.