The solution lies in keeping a stable relationship between the money supply and the volume of available wares. This connection, this relationship, one calls currency. Money is an OBJECT. Currency is a DEED, consisting of action and reaction. A deed that must be made achievable. The conditions for doing this deed, are still to be created. Without starving producers, without starving children and without the proletarisation of the whole world.
When the money supply and the volume of wares correlate, we have stable prices. Or better: a stable price level. The individual prices will always be changing, because our wishes and preferences also change. Volkswagen today, Mercedes tomorrow. Denim today, silk tomorrow. Cheese today, salami tomorrow. Spain today, Korea tomorrow. As preferences change, so the prices also change. For supply and demand determine the price of individual wares.
Advancing technological development, may also affect prices in certain branches or areas. Yet the general level of prices remains stable if the total amount of wares and of money, continue to cover one another. With that, the money retains its power of exchange. This is also called buying-power stability. What must the administrators of money - the monetary watchdogs - bring about, to keep this connection between the supply of money and the quantity of wares in a reliable relationship?
They must steer the money supply! That is the precept of our times - and yet, today it isn't possible! Not with money as we know it. For the money is withdrawn, as soon as it ceases to earn enough interest. Then the issue-bankers have to bridge the gap. No one can say how much. And this money too doesn't move around, but disappears after a short time from circulation. So we have to go as deeply into debt as we can. Debts on the one side, generate riches on the other. These are going to want to earn interest, and so the situation see-saws it's way upwards to the billionaires. Sometime though, right near the end, the printing presses will be switched on, and the state relieves itself of debts through hyperinflation.
Money must circulate
To be able to steer the emitted supply of money, it must be circulating. Moving around. All of it. Only something that is moving can be steered. So how could we manage to keep the money circulating, unavoidably and independently of the "greed-level" of it's owners?
Very simple: we equip our money with the same disadvantage that urges the wares to the market. An annual depreciation of around five percent. We could call it a circulation fee. Today, interest is supposed to regulate this circulation - and it does. Only, after a certain point interest becomes murderous, because it grows exponentially. A circulation fee on the banknotes however, would be an absolute peacemaker and wealth-maker for everyone. At least for those who want riches and know how to utilise their skill and abilities. The less ambitious though, could also live in prosperity. When banknotes depreciate at five percent pro annum (if they are not being used), then after twenty years under the mattress, they will simply become waste-paper.
No reasonable person would do such a thing. Restraint of buying-power (or hoarding or numbered bank accounts) would become completely superfluous. The rouble would roll, quite independently of the character and nature of it's owner. That which in the near future cannot or will not be spent, would end up in the bank. Long-term. There it would be lent out to other participants. And so the rouble would roll through other hands. Whatever! The main thing is - it rolls. For only turnover brings prosperity. Movement. Not the owning of money. Neither money nor gold with it's "lasting value." That is a chimaera, a phantom - and sadly, at the present time, a world-wide convention.
Because the money would lose every possibility of being withheld, there would be no likelihood of ever reaching the point of "capital scarcity." For the money is there. And what is there will be on offer. With that, at last, the interest rate would begin to approach zero. Supply and demand regulate prices. And that must also apply to money. The producer wouldn't need to take capital-costs into account when reckoning his prices, the profit margins would grow. Profits in any sector will attract competitors. Further enterprise. More jobs, more production, more turnover, more trade. A greater and jauntier increase in prosperity. Globally.
To summarise: The freed banknote is only a means of exchange, that can no more afford to avoid the market place than the wares can. Unless their respective owners can afford to accept a loss. In a free market-economy, all the wares and money turn up together at at the market place. Nobody will be able to play hard-to-get any more. Full stop.
Freed money featured as an index-based currency
Freed money would be featured as an index-based currency. From the index then, one could recognise whether too much money is in circulation, or too little. For this purpose, one would only have to monitor prices, either by means of paid observers or through the wholesale trade, which for example, would publicise quarterly the prices given out by the monetary watchdogs. Should the index climb, then it will be clear that too much money is in circulation and a portion of it would be taken out, which thanks to the circulation fee would be an easy matter. For due to this five percent fee, five percent of the money would be taken out of circulation each year anyway. When the index climbs, then the currency administration would simply not reissue this "up to five percent". Should the index sink, it would mean falling prices, deflationary tendencies. So extra money would have to be printed and put into circulation. Then there will be tax refunds, lottery wins or children's allowance for everyone. Who cares? The main thing is, more money gets back in circulation.
Money into and money out of, circulation - the establishment of a truly stable currency, is such a simple undertaking. This money management, the emission and the steering of the money supply, is about all that a state needs to accomplish. A state though, that for certain has nothing more in common with today's dreadful "state" of affairs. Perhaps the railways and telecommunications too - and land management. The rest could be regionally, privately or communally organised. Just as the people please. Do you want to live as a communist? - please do! Found a sect? - go ahead! Build a school? - Sure, why not? For just eight kids? - No problem! Due to the land reform (to be explained elsewhere) there will be absolutely free rights of settlement for all. Everywhere. The whole earth belongs to each person.
Freed money is nothing but a means of exchange. Because it retains a stable buying-power, as long as we wish it to, a person can save it and it's full buying-power will be preserved. Even when he comes to withdraw it fifty years later. Neither inflation nor deflation will have robbed him of his savings. They are there in full. He just hasn't received any interest. But that would only really bother about five percent of people, the ones who at present really profit from that game. And even them, not so very much. For if the international division of labour were to be threatened, and breakdowns in production to occur, then in a trice we will be back to the point, where gnawing on a biscuit in an underground shelter doesn't seem so delightful, even to billionaires.......
Freed money generates wealth
Freed money generates prosperity for all, and he who wishes to can become rich. Pop stars could carry on charging millions for a small concert - painters, thousands for a little dab of colour....all may carry on, as long as he, or she, has customers or outlets. Each person ought to decide for himself what he needs to have or what services he wants. Yet the insane takings from pop concerts or cup finals, would be unable to be profitably invested. They could only be spent and frittered away - or taken to the bank, where they will be used to give loans to other members of the economic community.
Today's billionaires will stay way out in front for a few more decades. There will be enough to ensure that the next two generations will have to do absolutely nothing. But who wants to spend his life on the sofa? But even if they do: the main thing is, that at least their riches will no longer be able to make others poor!
What the other consequences of freed money will be, is almost indescribable. Monopolies will break up. Suddenly even a small workshop will be able to afford to develop a car. For a quite small circle of customers. Absolutely custom-built. Quality and craftsmanship will again be way out in front and will lead the business. New technology could enter the market. Every firm need only be economic (which means that there must be a demand for their products, and it must be worthwhile for the employer and his employees).
These days even an old-peoples' home must bring in "returns". But how is a warden in an old-peoples' home supposed to generate a growth rate of ten percent per annum and still remain self-respecting? Ten percent for the shareholders and the foundation's owner. Less than that is unacceptable, otherwise there would simply be no old-peoples' home. Stack up the old ones? Two to a bed? Self carpentered wheelchairs? Water-soup? Murder? Unreported deaths, and continuing to draw their pensions? It's all there already. Interest-earning money compels criminality, compels fiddling, botching and deceit. It pays the military, media, lobbyists, politicians. Bribes judges and attorneys. Of course some will stay clean. Not all though. Not even the church could manage that as an organisation. Otherwise the system would cease to function. Thence the motto: do what you will, but don't get caught!
All that is over and done with, if we introduce freed money. This money would make free men of everybody. Then we wouldn't need quite as many politicians and lawyers. The end of the bureaucrats.