Beyond the Dollar

With greenbacks under attack, critics search for a currency that really makes change

| September-October 1999


Imagine, if you will, seated at a table an earnest community activist, a Big Brother technocrat, and a conspiracy-mad libertarian. They are all nodding their heads in agreement. Now imagine that one of them strikes a match. The others nod approvingly, and a pile of paper in the middle of the table bursts into flame.

Except for the vivid bonfire, this is a tough image to conjure. In reality, these three probably wouldn't sit at the same table, much less find common ground. But in their different ways, and for their different reasons, they would all happily torch that pile of paper, and watch with satisfaction as a symbolic stack of Federal Reserve Notes disappeared in a cloud of green smoke.

The mighty greenback, it seems, has come under attack. The vagaries of global capitalism have left the local activist's neighbors behind, undervaluing their skills and expertise, and siphoning wealth from their communities. For the technocrat, the electronic economy has rendered paper bills obsolete; they invite theft, for one thing, and they make it easy for criminals (and the rest of us) to cheat the tax collector. The libertarian sees the Federal Reserve System as an enormous conspiracy between government and private interests promoting a currency backed by nothing, that changes its value on a whim. Three disparate concerns are united by sheer frustration with the almighty dollar.

The frustration stems from both the clumsiness and the freedom of cash, says David Warrick, a California-based investment writer. In his new book, Ending Cash: The Public Benefits of Federal Electronic Currency (Quorum Books), Warrick argues that coins and paper bills not only are cumbersome to carry but also allow criminals to conduct business and hide their profits from the law. Even honest citizens might be tempted to conceal cash income from the IRS. In place of it, Warrick proposes what he calls FEDEC, "federal electronic currency," which would take debit and checking cards one giant leap further by making all transactions electronic, and thus traceable.



Nothing could be more distasteful to the folks at NORFED, the Indiana-based National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code. As a NORFED press release puts it, "A government that does not control the money is a government that is much easier to control."

Writer Cletus Nelson explains in EYE (April/May 1999) that "in a biblical crusade to eject the money-changing Feds from the temple of American commerce," NORFED has begun to issue Liberty Bucks, silver-backed bills in $1, $5, and $10 denominations. Each buck is a warehouse receipt equivalent to approximately one ounce of silver. "Unlike our cash supply, whose value as a commodity is constantly being manipulated by Washington bureaucrats and well-heeled banking interests," writes Nelson, "American Liberty Currency (ALC) constitutes a daring attempt to eliminate the government from monetary transactions and let an unbridled economy run its course."