Saving the world from governments and banks

Today I have something a little different for you.

I’m not going to forecast the gold price. I’m not going to tell you about a mining company I like the look of. I’m not even going to remind you that house prices have fallen by 75% (if you measure them against gold).

It’s something much bigger than that.

Today I want to tell you why I think our system of money is failing us so badly. And what that means for you, me, and everyone else in the country. How it affects every aspect of our lives.

And also – let me hide nothing from you – how I’ve come to write a book about it.

A big topic – but here goes…

How inflation benefits a very select group of people

We’ve grown used to inflation. Our central bank explicitly wants prices to rise by 2% a year. Deflation – when prices fall – is deemed a threat to economic growth.

Yet when gold and silver were officially used as money, prices were constant. In fact, according to the wholesale price index, prices actually drifted lower through the 19th century at a time when the western world was enjoying great economic growth and prosperity.

They remained constant until the First World War. Then Germany, France and the UK abandoned the gold standard, and prices shot up.

In 1971, the world made its final move away from gold. The modern system of government fiduciary money – fiat currency – became the global norm. It wasn’t planned to any great extent. It happened out of political expediency. The US had issued more dollars than it had gold to back them, and was facing a run on its gold.

How have prices changed since then? In 1971, I could have taken my son to the FA Cup Final for £2 (now over £100). The Mars Bar I bought him at half-time would be 2p (now 60p). The beer I bought myself would be 11p (now £5 a pint at Wembley). The gallon of petrol I needed to get me there and back would be 33p (now £7). And the house we went home to would be something like 40 times cheaper. One forgets the scale of the robbery.

Average earnings have increased too, but not by the same multiples. They have risen from around £2,000 to about £25,000 today. The differential has been covered up by more debt, longer working hours, more women in the workplace and so on.

Why does everything – except mass-produced goods – relentlessly rise in price? It’s this system of fiat currency. There is almost no limit to how much can be created. And the more money there is, the more diluted its purchasing power becomes, and the higher prices will rise.

Some benefit hugely from this system: those who control it, and those who are at or near its point of issuance. Governments and banks, in other words. As well as enjoying a monopoly, they have the power to create money (whether by printing or through lending) and to charge interest on it. They also get to buy assets with their share of the newly minted money, before prices rise to reflect the new money in circulation.

Meanwhile the rest of us find that our savings or wages buy less and less, so we have to take on debt, and then pay interest on that debt, to be able to buy the things that we, or our parents, were once able to afford to buy outright.

There is a constant transfer of wealth and it compounds over time. The few benefit at the expense of the many. This is why the state and financial sectors have grown so disproportionately large.

It’s led to the horrendous gap between the so-called 1% (the super-rich) and everyone else. It’s responsible for this gap in the wealth between generations. It’s why we have a culture based on debt and spending, rather than saving and investment.

And it will only get worse as this transfer-of-wealth cycle repeats and repeats.

A radical yet simple idea that could make the world a better place

Because it’s so blatant – yet invisible – I see this money creation process as possibly the most insidious force in the world today.

That’s a pretty big statement. But I stick by it.

We have no choice but to accept, use and, ultimately, be robbed by this money.

But what if we could change that?

I want you to think about something for a moment.

Independent money.

Gold and silver are one form of independent money – though by no means the only one. (A gold standard is sort of, but not quite, independent).

Let me give you an example. In 1914, when gold was official money, neither Britain nor Germany had enough to pay for the world war. Once they’d spent their gold, the war should have ended.

But both governments took their countries off the gold standard, ran up huge deficits and printed the money they needed. They passed the bill onto their people. This was an essentially fraudulent action made to suit a political agenda.

Over 16 million were killed in the war, another 20 million wounded. Then came the waves of consequences: German reparations, Weimar hyperinflation, the rise of Hitler, and the Second World War.

If governments hadn’t held the monopoly on money, none of this – what was, essentially, hideous mal-investment – could have happened.

That’s an astonishing thought. It’s why many praise gold for its ‘restrictive force’ on governments.

The monopoly that governments and banks hold on money gives them too much power. Whether through incompetence or worse, that power will inevitably be abused. The best way to stop the abuse of power is to spread it as widely and thinly as possible.

Governments and banks should operate by the same rules as the rest of us. No bail-outs, no deficit spending, a need to live within your means, real risk of failure forcing prudent conduct – all that kind of stuff.

In my Brave New World there is no monopoly on money. We restore choice. We restore transparency. We use whatever money we like. We have independent money.

What do you fancy using, sir? Gold, silver, Bitcoins, paper issued by a farmer against stocks of grain in his barn, Brixton Pounds, Dominic Frisby’s currency (the ‘Dominus’, I think I’ll call it, since you ask), pounds, dollars? You name it, you can use it.

Payment with these alternative currencies is as easy as clicking ‘pay’ on an app on your phone or on a website.

Governments can go on issuing their money and debasing it. They can do whatever they like to it, as long as the rest of us have other options. In such a liberated market place, there would be a flight to better-run currencies, the true value of government money quickly exposed, and better practices pushed through.

Multiple currencies can work on a practical, day-to-day basis. I’ve just come back from Istanbul. Traders in the Grand Bazaar will accept dollars, euros, Turkish lira, pounds, Russian rubles – anything, as long as it means trade for them. The complications arise with taxation – but that’s a subject for another day.

And if, in your foray into the market place, you don’t feel comfortable storing your wealth in Bitcoins, ‘Domini’ or that paper issued against Farmer Giles’ grain stock, then stick with the government money you know. Or, better still, go for something tangible, something you know is actually there – gold and silver, for example. That’s what most people will do.

Most people spend a lot of time thinking about how to make more money. But not many people think about how money actually works – or how our system of money could be improved. I believe it’s time that happened.

So I would be delighted if you read my book, which is called Life After The State. In it you’ll discover:

• How this system of money came about
• Case studies: the hidden, destructive effects of this system on the city of Glasgow, on the health service and on education.
• How government spending and subsidy actually cause poverty, rather than prevent it.

And I’ve already had some very complimentary remarks about the early drafts:

“Suddenly stuff started to make sense. Bells were going off. This book reminds me of Malcolm Gladwell. We’re really excited about it. We think it’s going to do very well.”  Dan Kieran, Director, Unbound Publishing.

“A real eye-opener. Given what I’ve seen, that’s saying something.”  Jimmy Leach, Former Head Of Digital Communications, Prime Minister’s Office.

I’ve decided to publish the book with Unbound, which is changing the traditional publishing model. You can find out more and pre-order my book here.

Changing the way money works is simple. It’s not electorally unpalatable. And it would make a huge, dramatic improvement in all of our lives. Read Life After The State and you’ll see why.

• This article is taken from the free investment email Money Morning. Sign up to Money Morning here .

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  • Roger Manners

    That all makes sense to me Dominic.
    So which politicians are you recruiting to help change the system?
    Good luck
    Roger Manners

  • HL

    This is a brilliant and timely article.

    The link between fiat money on the one hand and impoverishment (and even war) on the other should be the subject of widespread debate. Everyone in the Western world should be aware of it.

    Buy gold.

  • Graham Wadsworth

    Great article Dominic. I would love to use an alternative currency to the one foisted on me by the Government. The problem is finding an alternative that everyone will accept.

  • JohnW

    Can I buy your book using my personal currency? Hang on – I’ll just print off a few notes on the computer….

    Will 20 notes be OK?

  • Clive

    “when gold and silver were officially used as money, prices were constant”

    Sounds great, shame it isn’t true. There’s a book I read a year or two back – title escapes me for now – about the economies of the 4 big powers (UK, USA, Germany, France) after WWI and up to the mid 1930s.

    I believe each of those powers were on the gold standard (at least part of the time), yet Germany suffered hiperinflation, UK had deflation (late 1920s) and the US had the depression in the 1930s.

    Hardly constant prices !

  • Sam Cow

    Dominic, I should have thought you would have known better than to describe something as, in this case, 40 times cheaper than something else. Think about it. If you mean something costs 2.5% of a price, then say so!

  • dr ray

    All very true but you conveniently ignore that barring the last few years gold (and silver) had not maintained there purchasing power either.
    Maybe it was an aberration between about 1980 and 2000 or maybe it is an aberration now
    It may be inevitable given your age but its dangerous to assume the current situation is the normal one.

  • Brian Anderson

    The Casey Report repeatedly questioned why “less than three” companies were shorting gold to the extent of 30+ million oz. If more than 4 their positions would have been reportable. The effect was to uphold the dollars reserve status.
    The lead (allegedly) company recently were the centre of a major multi billion dollar loss by a “rogue” trader.

  • Peter

    Dominic, A VERY interesting article.
    Even 2% inflation halves the value of money every 36 years.
    Another aspect is that politicians always seem to incline to regulation to reduce fraud – but the fraudsters will ALWAYS find a way round he rules.
    The ONLY solution to get back to “My word is my bond” and to enforce it. Regulations then become redundant.
    From 1815 until 1914, the value of the pound was largely maintained.

  • Ray Kelly

    I’ve always thought that inflation is the invisible tax on savings. You’re article confirms this and destroys the incentive to save. As a pensioner all I want to do is put the price of a meal in a bank and be able to buy a meal when I withdraw it. With low interest and inflation I don’t stand a chance.

  • John Hutton

    The problem is the “golden rule” those that have the gold make the rules.
    A relentless, gentle, and very long rebellion would be required.

  • iain b

    Is there any ground breaking stuff in your book Dominic or is it a re-hash of the excellent moneymasters internet documentary and money(the goldsmith’s tale)?

  • Dominic Frisby

    Hi All, thanks for the comments.
    Clive – Here is wholesale price inex 1790 – 1940. Prices were constant –
    Roger – Doug Carswell and Steve Baker
    Sam – noted(!)
    Peter – unfortunately, they probably always will find a way round …
    Dr Ray – noted
    John W – you can pay me in anything you like. But Unbound are selling the book, not me. You’ll have to agree currency with them!
    Graham – 1954 currency act needs sorting. Then how tax is levied …
    HL – thanks

    I thnk that’s everyone. Apologies if I missed someone out!

  • Carol Massey

    Hi Dominic – marvellous article.
    I just wish someone , when writing about housing , would explain to the country the danger of the buy to let scheme , whereby more and more housing belongs to the ever richer few. This is a scheme destined to elevate house prices so that, taken to its logical extreme, the growing mass of poor will be renting and paying yet more to the rich.

    1984 here we come. Cheers.

  • Clive

    Before you go getting too keen on the idea that the gold standard fixes everything, read this

    “Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed “

    pretty much puts the boot into that idea.

  • Dominic Frisby

    I’ve read that book, Clive, and it’s excellent.

    I don’t say gold standard. I say independent money. There’s a big diference.

    he issue is the monopoly on money

    (And, anyway, as Ahamad notes, the mistake was going back to the GS at the pre-WWI rate in 1925. )

    John Hutton – nice!
    Carol – thanks

  • Iain

    Hi Dominic, nothing to do with this article but just wanted to say I enjoyed your blog post about your father’s forgotten sitcom – and good on you for sharing it with the world!

  • Dion

    Another great article and how simple should life be!!! Its the same when the banks bring out these over complicated issues using deratives etc and confusing the hell out of Joe Public. I’m with you back to bartering paying in whatever you want and can be accepted but we can dream.

  • aff

    Wholeheartedly agree with your ideas Dominic, i’ll look out for your book.

    Some of those ideas can already be put into practice in a sense. Precious Metals and bitcoins are already viable even if not widely used or accepted yet. The only way things will really change is if the population can wake up from a collective delusion that the government is out to help us.


    The tyranny of traditional autocratic rule was replaced by the tyranny of big government and its stranglehold over our money, regulation and taxes. Our democracy is more pantomine than substance and does not serve us well. All political systems, governments and economies have been, and always will be, controlled by a minority that pulls the strings of our Punch & Judy parliament and politics. Perhaps the best that we can do is to restrict the size and power of government so that it can do less harm to its citizens. Or perhaps tyranny- like ‘original sin !- is rooted in human nature and can never be be exorcised.

  • Alastair

    Excellent Dominic, I have ordered a book, hard copy of course need something tangible! – All the best with it, look forward to reading it.

  • Chris A

    Excellent comments Dominic – I salute your clarity of explanation too.
    Re your book, do you stick to the issue of the monopoly of money issuance, or delve into some of the issues/vested interests that prevent the move to a system that serves the needs of the people not the government etc. Such as a broken political/democratic system, crony capitalism, too much government (inc tax and debt), not to mention how the debt based system has skewed the norms and morals of the general populace – all just for starters. All these are issues and road blocks to prevent a long overdue move toward sanity..

  • Steve Williams

    Great Article Dominic
    Effectively quantitative easing QE is a massive stealth tax on cash.
    If a Government prints 10% more cash – everyone else’s cash devalues by 10% and they are left with the 10% to spend as they wish.

  • Clive


    I don’t see ‘independent money’ as a step forward, more a step back towards the days of bartering goods with no money involved.

    Under your scheme, let’s imagine two parties with differing views of what ‘independent money’ should be used. If they don’t agree (seems likely to me), they’ll either have to simply barter their goods directly or agree on some other form of money – which is why we have a world reseverve currency (US dollar at the moment).

    Also you say in response to one of my earlier posts “I don’t say gold standard. I say independent money. There’s a big diference”, yet your article says “Or, better still, go for something tangible, something you know is actually there – gold and silver, for example. That’s what most people will do”

    Seems you’re not clear as to whether you’re suggesting gold (or silver) or ‘independent money’


  • Lindsay

    Excellent and interesting! With all the ‘money’ being printed now you wonder why governments bother with tax. In Star Trek there is no money. in Hitchhikers Guide to the Galaxy ‘Hot Black’ is not communicating for a year ‘for tax purposes’. Dominic is taking us to the future!

  • Jim C

    Hey Dominic,

    Excellent article. And congratulations on getting your book published!

    A few months back I saw a video that you put together with regards to fiat inflation – what happened to that? It’s an excellent primer I’d like to direct my (uninformed) friends to.

    @24. Clive, no Dominic is not confused. The ‘gold standard’ is not independent money, it’s the government declaring how many ounces/grams of gold a unit of currency is worth. It can be changed by bureaucratic whim for political expediency at any time. Whereas, in a situation where money was independent – ie, when the government does not declare a specific ‘legal tender’, the metal itself would serve as money, and its value as money would be determined by supply and demand (ie, the market), not government diktat.

  • Clive

    @ Jim C

    How does that differ from now, when we’re already free to put any price on metal (gold, silver,…) that we like ?

  • Jim C

    @27 Clive – the difference is that, at the moment, we are obliged to take GBP as payment for services and products via legal tender laws – ie, there is an implicit subsidy for GBP, discouraging (and dis-advantaging) use of other forms of money.

    Furthermore, we are taxed on apparent ‘profits’ denominated in that ever depreciating currency. So, for instance, if I decide to buy gold as an inflation hedge, and it goes up nominally in GBP, I am taxed for that ‘profit’, even if the value of my gold – in broad purchasing power terms – hasn’t budged.

    Of course, this is true of any other asset too, which underscores the perniciousness of our ever-inflating fiat currency regime.

  • Clive

    @ 28 Jim C

    Using ‘independent money’ (or anything else) isn’t going to stop the government taxing you. E.g. a number of areas in the country have invented local ‘currency’ (seem to remember reading about the ‘Bristol pound’). You can pay be paid in anything you like, HMRC will simply apply some conversion rate and charge you on what they see as it’s GBP equivalent.

  • Luke

    I very much enjoyed this fantastic article, hilariously sending up inflationary alarmists and gold obsessionists like your colleague Ms SW. And saying Carswell is supporting you is a brilliant comic touch.

    My only concern is whether you really meant to send it to Private Eye or The Daily Mash.

    Keep up the good work.

  • Nacho

    Governments can abuse power horrendously, I absolutely agree, but that is the whole point of a democratic system. If the people control the government, it should not matter that the government controls the monetary system. So then the problem comes back to a democracy that is not working properly. Governments could still do horrendous things if they were not properly checked by democracy without control of paper money. In terms of a 1% exploiting the majority, again a democratically elected government should have the power to intervene as required in the interests of the majority.
    Also even before the gold standard was abandoned, governments were able to raise money in times of war by issuing bonds. I’m not sure if removing a government’s ability to print money is a free market or an anarchist action, or both- which is not to say in itself that makes it a bad idea.

  • Jo

    You are so right Dominic. I believe the happiest people in the world live on some S.Pacific island and use bones for money (poor animals though).

    In this window of opportunity called “the current crisis”, now is the perfect time for us to re-start the barter system. This info needs to circulate as much as possible. If the economic collapse does come, as predicted by some, then people would be prepared and practised at bartering, instead of rioting in the streets, achieving nothing. Even worse, waiting on the governments/banks that caused it all to help us out. to be continued….

  • Jo

    God’s produce, i.e all the earth and all that grows on it, is so abundant and without cost, yet 99% of the world’s population is just about surviving or hungry?

    The cost lies in people’s talents. We need to learn to work together because strife and competition allows the 1% to take it all. The 99% need to organise in small communities first, as in Volos, Greece. As for the legality, laws are made by the 1% remember. As they say, if it were legal to kill your neighbour would yo do it ? (no funny answers please).

    One disagreement with the info, when I was young during the early 60’s, I distinctly remember our pensioner neighbour complaining about how much prices had risen since she was young.

  • Quicksilver

    Hi Dominic,

    I’d be interested to see the contents pages for this book, given this gives a high level idea of what areas you cover. The summary excerpt is not enough to hook me.

    Any chance this book could be made available via Kobo; their eReaders are more competitively priced than Amazon (so I have one) and I have no plans to open a Kindle account. I find the Kobo preview downloads useful to see if books are worth buying.

    I suggest that Positive Money ideas combined with independent money (something of real value) would offer one of the better solutions, given the biggest problem is most currency is created by banks, and this fractional reserve debt cancer is the main driver behind booms and busts, and the ridiculous synthetic derivatives tower of cards.

  • Boris MacDonut

    Leaving aside the fact that the 1971 cup final was a very different beast to the 2012 one and the fact I’m amazed Dominic had a son in 1971 and the fact that in 1971 we had just “gone decimal”.
    a) In 1971 my dad kept a pub in Devon. Beer was 16p a pint not 11p. Now my local sells at £3.20 A 20 fold increase.
    b)1971 average wage was £28 a week ,or £1,500pa, now average income is over £33,000….a 22 fold increase.
    c) Petrol was 40p a gallon, now it is actually £6.40, a 16 fold increase.
    d) House Price was £5,700, now it is £194k. The 25 year cost to buy a new house was £11,000 and is now £252,000. A 23 fold increase.
    Dominic is trying to fiddle stats to fit his theory and that is very poor journalism.

  • Alick Munro

    A wwillingness to work for 10 minutes in unskilled work could be a valid unit of account internationally. Let’s call it a Worktoken or WT. It gets its credibility from the register of people willing to work for WTs or accept them in payment for goods or services, and be accepted on to the register of the scheme, with their debit limit specified.The net stock of WTs is zero. Debtors must do work of public benefit, specified by the community to redeem their debt. Bad debts lead to expulsion and the debts pass to the debtor’s guarantors.
    The result: a currency free of inflation, and lots of work of public benefit undertaken.
    I’m up for it. I provide basic work at 6WTS./hr or skilled work at 18WTs/hr. I’ll donate some of my WTs to amenity charities so there’ll always be work available for those who get into debt on their WT account. Anyone else?

  • Jon

    @33 Jo
    “99% of the world’s population is just about surviving or hungry”; basic maths makes that 1% = 70million people, or approximately the population of the UK. Are you suggesting that of the world’s population, the equivalent of every person bar that of the UK is just about surviving or is hungry ?

    And the 1% take it all….and the 1% make the laws ?

    Catchy phrase this “1%”, shame you’ve debased it in such a shambolic argument.

  • Jon

    @36 Alick
    nice idea, however when the world realises they require more than public beneficient works so the semi-skilled worker demands 12 WTS/hr for the excess benefit he can provide, the skilled worker 20 WTS/hr, the investment banker 200 WTS/hr and the premier league footballer 5000 WTS/hr…isn’t that the same as a market place currency ?

  • Colin Selig-Smith


    Congratulations on the book, I think it’s a worthy effort. Bringing monetary reform to the public has been an exercise in frustration for many people. There is an unimaginably powerful vested interest involved. If you’re successful all the better for it though I won’t hold my breath on the matter.

    If you’re interested, Silvio Gesell has some interesting thoughts on the nature of money and it’s implication in the creation of poverty.

    Finally, be careful.

  • Colin Selig-Smith

    @35. Boris MacDonut

    You are missing the point (as usual?). It’s about who gets the new money before it devalues and who gets it after it devalues. Inflation isn’t even.

    The first people to get new money get to spend it before it devalues. Every single year they get an RPI% advantage over the rest of the population and that advantage compounds.

  • Michael12

    Bravo Dominic – great article. You have hit the nail on the head. The only question is how to coerce the establishment to abandon their money monoply. Clearly they have no incentive to do that since, as you point out, it gives them all the power and wealth. Is revolution the only option? I hope not. Mind you, with hyperinflation comes the black market – when the people will undoubtedly find their own currencies anyway. Maybe that will be their final undoing. But then again, Mugabe is still in power isn’t he?

  • BG

    This is bananas. It’s complete nonsense. It has zero historical sense and zero economic sense. It gets the last decades completely wrong (the retreat of the state from the market is the cause of problems, causing excessive speculation, if the state was where it should have been, there would not need to be so much money, if businesses were not hooked into financialisation processes [investing profits, kowtowing to shareholders] and instead gave real increases in wages [which are lower than they were decades ago] the problems would not be there etc etc). It also has a bizarre anti-thought idea about the meaning and use of money. The first three chapters of Marx’s Capital would explain to this nonce why you can’t have “independent money.”

  • Teign Girl

    Go, Dominic! Details might be suspect but underlying premise is spot on.

  • Pusser

    Lovely bit of writing and some answers I have been looking for. I shall have to buy the book now as there must be some more answers in it . You would serve our Country, nay the World, by serialising in the Sunday Times as the more people that read it, the more likely changes will come. (Not in our lifetime of course.)

  • Jo

    @37 Jon
    forgive me if my maths is not 100% spot on, but obviously it is easy for someone who lives in the developed world to not realise how much hunger or hardship is prevalent in the world today.

    True, most people in the developed world have a roof over their head, but look how many hours of labour it costs them and likely in work that stifles their real talents. The cost of this way of life born by families, short of together time. Ever heard of tent cities in the US?

    You seem to be living in the world of the politicians who make out to be unaware how many in the UK alone are homeless or struggling. Happiness and well being need to be included in the assets class.

    The 1% do make the laws – facts not a catchy phrase.

  • Frank Caves

    Mostly true. What has happened is that the effect of the rich getting richer and the poor getting poorer has led to the money in circulation decreasing, because it is held by the few super rich.
    They either hold it in Banks (But the banks blew it away – to some smarter banks/financiers so the poor taxpayer has had to repay them) or in ridiculous prices for works of art, etc. So there isn’t enough money in to enable the economy to run. So called Free Trade is another big problem. It means that big companies move their manufacturing to the lowest labour+taxes countries. This then causes massive unemployment in “the West”
    This is exacerbated by the countries benefiting not spending the money they receive in the countries of origin, thus taking more money out of circulation.

  • Frank Caves

    In my view the only solution is a new political party who would have the welfare of the whole nation at heart, and who had scientists, engineers, economists and really successful business people like Branson and Dyson as advisors. And we have to either leave the EU or modify our place in it.

  • Boris MacDonut

    #40 Colin S-S. How do you surmise I miss any point? I have not commented on the article per se only Dominic’s poor journalism.
    He has relied on inaccurate staitistics to illustrate his odd utopian/marxist/hippy idea. I have merely pointed out that if the statistics are put accurately they do not support his contention. I’m afraid this is pink and fluffy stuff and not worthy of much serious comment.

  • Jim C

    @48 Boris – I haven’t yet had the chance to see whose figures are more accurate – yours or Dominic’s – but you are a very, very confused man if you think the idea of free-market money is ‘Marxist’.

    Having a bunch of central-planners attempt to control the money supply and cost of capital – our present system – is infinitely more Marxist than the market determining what is money through supply and demand in voluntary transactions.

    By the way – as you haven’t provided a source for your figures, how are the rest of us to determine you’re not any less ‘sloppy’ than Dominic?

    PS – Dominic – can you please supply references for your figures with regards to wages & costs, 1971 vs 2012?

  • 4caster

    This article is somewhat naive. Civilisations suffered inflation, deflation, depressions and bubbles even whilst the gold standard existed. Economic troubles tended to last longer then. The discovery of South America and its abundant silver brought about inflation in Europe, especially Spain and Portugal. Despite the abandonment of the gold standard, the second half of the 20th century saw unprecedented advances in standards of living for most people throughout the world.
    And you will never persuade a bankrupt nation, that is about to suffer foreign invasion, not to borrow or create money to avert defeat – all with the enthusiastic approval of its people.

  • Cristina

    Thanks for your post. You said everything I already knew but in a much clear way that I would ever be able to do.

  • Jim C

    @50. 4caster – the article is naive? Coming from a person who can’t differentiate between the gold standard – which is a government-imposed currency regime – and free-market money that’s pretty rich (but while we’re on the subject of the gold standard – which Dominic is NOT advocating – and the length of ‘economic troubles then’, I suggest you read this: )

  • Jim C

    @50. 4caster (cont) As for the example of the glut of silver from the Spanish conquests of the ‘New World’, that actually reinforces the point about a government-imposed currency; citizens were obliged to accept and use silver rather than switch to more stable monies… but unless you think some vast new supply of silver, or gold (or any other likely candidate for monetisation) is going to be found, what’s your point? We’ve run out of new continents to discover, in case you haven’t noticed. And the inflation the Spaniards suffered under silver was small beer compared with the hyperinflations suffered throughout the centuries by citizens obliged to use the unbacked fiat currencies that failed. Which, eventually, is ALL of them.

    What is it about monetary economics that brings out such confidence in people who have absolutely no knowledge of the subject?

  • Dominic Frisby

    Thank you everyone for your comments. Much appreciated.

    Re. 1971 costings. Wage stats are a nightmare to find. ONS don’t ofer proper stats on this. One figure I got was £30 per week (Ie £1,500) vs £539 per week.Another was over £2,300 per annum. So I went with about £2,000. The points is prices have risen since 1941 in a way that they didn’t during the economic growth of 19th century was money was ‘more’ independent. (As I say gold standard is not totally independent and not what I am arguing for). Wages have not risen by the same amount.

    None of this detracts from the main point which is that governments should not have a monopoly on money. It gives them too much power and they abuse that power.

  • Dominic Frisby

    Obviously that should say 1971! Oops

  • Jo

    Hi Dominic

    Not knit picking, but as i remember, wages in 1971 were around 20 pounds a week or 1000 per annum (or less) and I am talking outside of London. Hope this is helpful to you.

    In any case, your point is clear and imo spot on

  • Boris MacDonut

    #49 Jim C. Perhaps not Marxist ,but Utopian,egalitarian and a bit Orwellian. As to figures the HP is from DCLG mid 1971 £5,632.
    Many sites show 1971 typical wages the main one quoted is £28 a week, I took mine from an article in the Independent. Beer I relied on my dear old dad,his pub went decimal in 1971 and 16p was the first price he charged under the new system. Petrol I may be a bit out as I have seen it quoted at 34p a gallon. But Dominic does my work for me at #54 where he admits he can choose suitable statistics to fit his theory, from a wide range.

  • Jim C

    @57 Boris, it’s not ‘perhaps not Marxist’, it’a ABSOLUTELY not Marxist; and it’s not ‘Orwellian’ either – ‘Orwellian’ implies collectivist central planning, which is what we have now. Do you actually have any understanding of the labels you’re throwing around in your intellectually dishonest attempts to discredit Dominic’s argument?

    As for ‘utopian’ and ‘egalitarian’ – I suppose you have similar feelings about outlawing, say, theft, or rape, or slavery? After all, we’ve always had people wanting to do these thing to other people – instituting rules against such behaviour must seem frightfully egalitarian and utopian to a deep thinker such as yourself.

  • Boris MacDonut

    #58 Jim C. As Carol has pointed out at #14 this is a grim effort to deny freedom to the masses . It is a smug hippy fascism that sits uneasily with my libertarian ideals. The freedom of the masses to access debt. The references to the 1% and overthrowing the controllers of finance have quite marxist leanings. Indeed Mr Frisby wants to call his own currency the Dominus which is latin for master/owner and implies a tyranny.
    #24 Clive and #42 BG have it right here it is not a step forward and it is an idea worthy of the Daily Mash.
    Boiled down down to its essence this is yet another MW attempt to tell us how marvellous Gold is. At best it is crackpot at worst it is an insidious effort to challenge tradition…… a hippy.

  • Jim C

    @59. Boris – ‘Deny freedom to the masses’? What are you talking about? The masses, under an independent monetary regime, could get together and institute their OWN currencies and banks, something that is virtually impossible now because our regulators simply won’t extend new banking licences to aspiring new banks because there’s absolutely no incentive for them to do so, and every incentive for them not to.

    ‘Hippy fascism’? Do you even know what fascism, economically, is? It’s tight regulation of the means of production and monetary system by the State. It’s what we have NOW.

    ‘The freedom of the masses to access debt’ – what, their access to credit isn’t being squeezed NOW? Do you think maybe there’s a reason our present crisis is also called ‘the credit crunch’? New, independent currencies would free up credit, not restrict it.

  • Jim C

    @57 Boris

    ‘The references to the 1% and overthrowing the controllers of finance have quite marxist leanings’ – er, no, removing state-imposed cartels (in this case, commercial banks which are granted the privilege of creating legal tender every time they make a loan) is actually the opposite of Marxism – it’s an embracing of free-market ideals. Heard of competition?

    They’re only the 1% because the State has granted them the right to act as counterfeiters for hire.

    ‘Indeed Mr Frisby wants to call his own currency the Dominus which is latin for master/owner and implies a tyranny’ LOL, Boris finally jumps the shark. No, it’d be called the Dominus because his name is DOMINIC, and you would be free to accept, discount, or refuse his currency as you saw fit. Tyranny is what we have NOW – you HAVE to accept pounds, have you no understanding of what ‘legal tender’ means?

    Are you genuinely this confused?

  • Boris MacDonut

    #60 &61 Jim C. You seem quite upset that anyone should disagree with you. It has made you come across a bit condescending. I’m sure you’ve heard of Liberal Fascism. Dominic’s system is heavy on the saving bit and has little mention of debt. Would it countenance IOU’s? Or would it in reality amount to a puritanical world of only spending what you currently have? It is too regressive and it puts too much faith in trust. Trust has all but disappeared in the modern world.
    PS. Why doesn’t he call it the Dominicus then Or the Frisby pound? How ironic that he chose the Latin word for a tyrant for his fascist scheme.

  • Jim C

    @62 Boris: This is a complex subject – most people have to study it for a long time before they get any real grasp of it – so most of us who have put in the time don’t expect people who haven’t to ‘get it’. But if you don’t like people being condescending to you, I suggest you don’t initiate it; @48 you kicked off the sneering with: “I’m afraid this is pink and fluffy stuff and not worthy of much serious comment.”

  • Jim C

    @62 Boris (cont) “Liberal Fascism” – I see you’re still throwing around in-apposite phrases in the hope one will stick and do the heavy lifting for you. The word ‘Liberal’ in this context (which USED to mean Libertarian, ie, little government intervention) now denotes HEAVY government economic intervention… ie, what we have now, which IS more akin to fascism than anything else, whereby companies are still nominally in private ownership but are tightly controlled by government. ‘Liberal fascism’ is therefore tautologous…. and obviously nothing to do with Dominic’s proposal, which is a free market solution to the current disaster: government and a few privileged commercial banks forming a cozy cartel that cycles between flooding and throttling OUR economies with credit.

  • Jim C

    @62 Boris (cont) “Would it countenance IOU’s? Or would it in reality amount to a puritanical world of only spending what you currently have? “

    So… now you admit you actually don’t even understand what it is Dominic is proposing… yet you had the temerity to slag it off?

    For a start – ask yourself this: how could you have a ‘puritanical’ free market solution? Puritanism implies dictatorship, ie, it requires coercive imposition. Free markets are VOLUNTARY by definition.

    For someone who says he has ‘Libertarian ideals ‘(@59) you appear strangely unaware of what ‘Libertarian’ actually means.

  • Boris MacDonut

    #63-65. Jim C. I must defer to your boasts about studying whatever it is you study. My view on economists is well known.
    I am fully conversant with the terms I employ. I hold libertarian socialist ideals because I believe in freedom for the many, particularly the disadvantaged. I refer to Liberal Fascism as this idea is well meaning middle class, middle brow, ostensibly open -minded and helpful but which would require imposition on the many. It smacks of “for your own good ” measures thrown at us.
    As for Puritanism, that is what this is. Hair shirt, live within your means denial and restriction. The Puritans were negative folk who demonized the Catholic Church. They feared the lights going out in Europe and wished to impose their self-centred views on others. Dominic’s idea is dour and Puritanical, and saying it is an option only signals an excuse to criticise those who fail to embrace this new way……’s their own fault.

  • Jim C

    @66 Boris – Anyone who is tempted to believe your assertions that you “are fully conversant with the terms [you] employ” can quickly look into the history of libertarianism, puritanism, modern liberalism, and fascism, and decide for themselves whether your wild conflations indicate being ‘conversant’ with anything at all.

    Dominic’s scheme would smooth the supply of credit – the cost of borrowing would reflect saver’s willingness to lend, not central planners’ educated guesses of what the money supply should be. In the current economic climate this would free up credit, not restrict it. If you had even a cursory understanding of what he’s advocating, you’d have realised this… but no, you’d rather condemn it out of hand, all the while boasting of your complete ignorance of even the basics of the subject.

    As repeating canards is all you appear capable of, I’ll leave you to it.

  • Boris MacDonut

    267 Jim C. It’s not April 1st is it? Perhaps you feign smugness all year round. The issue here is some middle class pseudo intellectual has come up with a pink &fluffy plan that is at first glance utterly ridiculous and on closer investigation sinister.
    My worry is that chaps like yourself may be advising the Treasury,based on your cerebral musings. Be afraid.
    Dominic’s scheme takes no account of the poor ,the disabled ,the deprived African and so on.It is a top down fantasy. I remain unconvinced and that is the point. If you can’t convince someone who knows about finance how on earth will you convince ordinary Joes? I have not heard such a load of baloney in a long time and your vociferous support of it makes me suspicious of your raison d’etre. On one point you are correct,I condemn it.
    I assume you can point us to the reason why it might be a good idea for those with no access to the “means of production”. Or maybe we just get regaled with more woolly right wing nonsense.

  • Boris MacDonut

    Perhaps we could use sea shells or just barter? This is the sort of tosh one gets in Green villages like Stroud and Brighton. I am quite incredulous and shocked that the posh kids would seek to disenfranchise the ordinaries with such a sleight of hand. Dominic tell us it is not so.

  • Jim C

    @68-69: Boris

    “April 1st”, “middle class pseudo intellectual”, “pink &fluffy”, “utterly ridiculous”, “sinister”, “load of baloney”, “the poor”, “the disabled”, “the deprived African”, “woolly right wing nonsense”, “tosh”, “posh kids”…

    “The deprived African”! LOL. I see lots of dog-whistle ad hominems here, but as with most of your posts on the subject, nothing approaching reasoning or even understanding.

    As I said previously @67: As repeating canards is all you appear capable of, I’ll leave you to it.

  • Laura

    Best wishes as ever Dom., but £10 is going some, isn’t?! :) — I’ll quite understand if you delete this.

  • Geo s

    Boris MacBigmouth
    has made 8 comments out of the last 34.
    Statistic: 23.5%.
    He certainly does not suffer from modesty!
    Give it a rest please and take a holiday.
    You’re boring.

  • Boris MacDonut

    #72 Geo. Thanks for your input. I note Jim C who so vehemently diagrees with/dislikes me has made 13 of the last 42 posts. I make that 31% of the comments mostly just sneering and oafish. Still a good effort to sell Dominics book,which I will of course read …….. and try to laugh only at the genuinely funny bits.

  • Cape
  • antipositivist

    Dominic, I haven’t read your book yet, but will surely do. I would like to ask if you have taken any inspiration from writers like Rick Maybury, the writer of “whatever happened to penny candy?”. This book has the best description and history of money I have seen. Also, I’d like to know where the education system sits in the system of smoke and mirrors that is money. Are you saying that the entire education system is complicit in and encourages the deceit? If so, what can be done about it?

  • GladysFriday

    Yes government printing money devalues the money I Have because its chasing the same amount of goods. But if government took from me compulsory savings in the form of my purchasing inflation proof bonds , which I could not cash before the age of say sixty, the devalue element would be removed. yes?

  • Eddie

    The fact is, for far too long the public and politicians have been wanting and encouraging insane house price rises, causing a situation where professional hard working people now cannot afford the most basic of houses. Very profitable for greedy selfish socialist hippie polytechnic lecturers of course whose houses are now pushing a million quid (property is theft indeed…)

    In the 1970s when I was a child, we could afford to live in a semi in the London area (the same place Dominic’s dad grew up actually and I went to his school too) back then – now, they cost £300 000 and half a million in the near suburbs of London. If I were a child today I’d probably be sharing a room in an ex-council flat in some rough area. Children suffer because of crazily high house prices, as do adults – we need an Irish-style crash and I look forward to it.

  • Eddie

    The salary stats Dominic mentions are correct: my mum earned around £3000 a year in the mid-70s as a teacher. So £2,300 would have been the average in 1972.

    The insane 40-fold rise in house prices is the real problem here – the elephant in the room really – and one that no politician has the guts the shoot.

    Germany, France, many counties have property prices half of those in the UK – because ours have been artificially bloated and the market kept high by dishonest politicians who need the votes of a greedy selfish electorate and who have not acted in the best long term interested of this country.

    It simply is not a just or desirable state of affairs when salaries are kept down because some have made 6 figure profits just because they bought a house in London in the 70s. This sort of thing causes crime, riots and a lack of social cohesion too.

  • Nacho

    @ Boris and Jim C

    I found both your posts interesting, although getting a little abstract as the discussion went on, particularly Boris’.
    The crux of this discussion though seems to be should monetary policy be centralised or not? In theory central banks are generally supposed to be independent of government now however their actions seem to take into account more than just stated inflation targets.

    The removal of monetary control from a centralised and state linked body would seem to be both a free market and an anarchist action. While it has to be taken on case by case basis I generally support de-centralising actions while appreciating the need for co-ordination, and I appreciate the need for a free market while believing that left to its own devices it would be destructive and requires a democratically elected body to maintain as something that works in the interests of society as a whole.

  • Nacho

    So should centralised monetary control stay or go? I think the reality is perhaps that neither course of action is a solution or an absolute obstacle in itself. In the hands of an effective democratically elected body acting in the interests of the majority it could be a useful tool with which to regulate the free market, although only so much can be done ‘from the top’. While in the hands of an inept government or one that acts in the interests of a minority it is another tool with which said body could cause havoc. So for me it comes back to the quality of the government.

    Just a few of my thoughts but they are a bit half-baked because it is not an issue I have done much reading around.

  • Jim C

    @79, 80 Nacho. Yes, it’s an interesting subject. The problem (as I see it) with giving monetary control to the government is that governments will always be tempted to print their way to popularity; and, because of their very nature, democracies are as prone to this as any other. In fact, we see this happening now, but at one remove; our supposedly ‘independent’ central bank is buying UK sovereign debt with printed money (metaphorically speaking) to keep yields low so the government can continue to spend money it doesn’t dare tax the electorate enough to raise.

    If you’re interested in the subject, I recommend Rothbard’s ‘Mystery of Banking’, which is free to download at ; though Rothbard was more in favour of a gold standard, it’s a good place to start, and an easy read. is another site worth checking out… and, hopefully, Dominic’s book. I’ve yet to read it, but he can write, and clearly knows the subject better than most.

  • Boris MacDonut

    #78 Eddie. Either your mum was a very well paisd teacher, had a lot of London weighting or a misplaced memory. NQT pay was £975pa in 1971. A Graduate of 5 years experience with a responsibility point got £1,775. Teachers were still well repsected professionals paiud more than most ,now Teacher salaries have been eroded down to close to average income. Perhaps your mum remembers 1974 to 77 when teacher pay leapt by 33%. The 1971 average pay is often quoted at £31 for a 44 hour week, equivalent to about £1500pa for a 40 hour week.
    On one hand not much has changed, a 1971 student on a £9 a week grant paid £4 a week rent, 45% of income.
    You repeat Dominics incorrect stat’ about HP’s rising 40 fold. They have not. They have risen at most 33 fold and the actual cost of buying a house is only up by 23 times, largely in line with incomes.

  • Boris MacDonut

    Simply looking at price changes,however accurate the statistics is not sufficient as we are not comparing like with like. In 1971 only 9.5 million homes were owner occupied, now it is over 18 million. In 1971 only 20% of under 5’s attended education now it is 72%. We have 7 million more people. We have twice as many over 65’s, double the divorce rate, three times as many one parent families,we have central heating,washing machines fridges, TV and phones which were often rare in 1971. We travel 9 billion air miles instead of 2 billion. By and large we have all done pretty well out this “great con”,healthier and wealthier.
    Dominic is wrong to say we work longer hours. The typical working week in 1971 was 44.7 hours, now it is 38.
    Sorry if this has bored anyone, but I am a sucker for accuracy over conjecture.

  • Jim C

    @82,83 Boris,

    Again, can you please give references for your figures.

    You provide many examples of how today is different from 1971, but no analysis or synthesis of the data to show how this refutes (or confirms, for that matter) Dominic’s thesis.

    You might start asking yourself if the wealth increases for the average person since 1971 have reflected their productivity increases since then. If not, then why not? For the record, the wealth gap has increased, and, given the top-down nature of monetary inflation this is not surprising (see ‘Cantillion effect’).

    So… has the lot of the ordinary person improved over the last 40 years, despite the ‘great con’? Undoubtedly. But has the average person benefited in proportion to their society’s increase in wealth? Clearly not.

  • Nacho

    @ 81. Jim C

    Thank you for your response. Yes the popularity point is an interesting one, how can a party convince people to take a harder option- I think if it can be done the least that is required is a sense of everyone contributing their fair share for the common good, but then even at that stage the debate is around what is ‘fair’, and also on a practical level what is sustainable and even optimum.

    In terms of printing money, as I understand it all things being equal this will devalue cash savings and debt, make exports more profitable and imports more expensive- and it does it in quite a subtle way. Perhaps there is more to it than that, and I also understand that there is an argument being made here that a minority in the right positions are able to ‘take advantage’ of this process.

    All interesting stuff, thanks again for your response.

  • Boris MacDonut

    #84 Jim C. So desperate are you for Dominic’s daft thesis to be even slightly correct you absolve him from the need to cite sources for what he quotes, but insist I do. Well, all the teaching figures are from the NUT. Some of the comparitive stats are from a lengthy article in the Independent ,I also use figures from the ONS. I have previously told you I use the most accurate HP stats from the DCLG. Try googling 1971 Jim, you will find most of what Dominic quotes is tosh,shame that it shatters your delusions. We are better off, we live longer, travel more and houses relatively cost the same as ever. Dominic’s concept is badly flawed. It is comic and that is ironic.

  • Jim C

    @85: Boris – “desperate”, “daft”, “tosh”, “shatters your delusions”, “comic” – still attempting to use abuse instead of reasoning, I see.

    Not surprising from a man who has openly admitted @66 he knows nothing about the subject, I suppose.

    So I repeat: “You might start asking yourself if the wealth increases for the average person since 1971 have reflected their productivity increases since then. If not, then why not? For the record, the wealth gap has increased, and, given the top-down nature of monetary inflation this is not surprising (see ‘Cantillion effect’).

    So… has the lot of the ordinary person improved over the last 40 years, despite the ‘great con’? Undoubtedly. But has the average person benefited in proportion to their society’s increase in wealth? Clearly not.”

  • Boris MacDonut

    #87 Jim. FYI the words daft, desperate,comic and delusion are not abusive, except to those uber sensitive types who always assume they are correct. If they were in any way offensive I’m sure the moderator would step in. Trying to label me as abusive is a pathetic resort to childishness, but I am not surprised, as your grasp of this quite difficult subject is tenuous to say the least. As for “tosh” that simply means nonsense, which is what Dominic’s theory is. A total nonsense worthy of the opium addled thinkers of the romantic era.

  • Jim C

    @88: Boris “Trying to label me as abusive is a pathetic resort to childishness…”

    Keep ’em coming, Boris.