Book Review of
"The End of Money and the Future of Civilization"
by Thomas Greco

« Back

Book Review: The End of Money and the Future of Civilization

By Thomas H. Greco, Jr

Published by: Chelsea Green Publishing, White River Junction, Vermont, USA (, 2009. ISBN 978-1-60358-078-6

Thomas Greco is the most radical writer on money today. The very title of the book suggests that the future of civilization depends on abandoning money-as-we-know-it. What could be more radical and revolutionary than that? Yet on reading this book Tom Greco does not come across as some wild revolutionary wanting to turn the world upside down. His style is calm, thorough and systematic. He talks us through the historical record and shows how the current financial system has shaped and governs our world. The entire argument of the book is that if we are to tackle the gigantic issues of our time we have to understand how money works and adopt a new way of doing money. We do not have to re-invent it entirely for it has evolved over the centuries and we are now entering a new era where modern technologies allow us to move away from the existing centralised, globalised, monopolised and privatised money system that is a tragic relic of history to a truly modern, democratic money system that belongs to the commons.

Greco is brilliant at exposing the workings of our current money system and explaining how this can evolve into a new system. But all the time there is this feeling that he is holding back, that he is not following his own arguments to their logical conclusion. "Prognostication is a hazardous business - something that is best avoided", he tells us. He does hint at where new monetary trends might take us but leaves most of it to our imaginations. So if you are hoping to find out what lies in store for civilization or what the future of civilization will look like you will be disappointed. It is only in the epilogue that he touches on the prospects for civilization, and then in only two pages.

This review is neither a critique nor a summary of the book; it is about what it says between the lines and what would result if we were to follow the logic of Greco's arguments. In the same way as he wants to 'liberate the exchange process', this is an attempt to 'liberate' some of his ideas to ensure that their full potential is realised. This will be achieved by looking at some of the monetary concepts used by Greco and by following through what might ensue if his proposals were adopted.

The first eight chapters set the scene for the main theme of the book, which is that the prevailing money system has brought humanity to the brink of disaster in many different ways. It is the money system that defines how our economies work and has set them on the unsustainable growth-oriented trajectory. Today it is the 'money power' that rules the world:

"I have argued that control of money and exchange mechanisms is the key structural element that determines the distribution of power, and that it must be the main focus if any degree of community empowerment and self-determination is to be achieved. A money monopoly, whether in private hands or government controlled, is inimical to freedom and equity."

In order to realise a new monetary paradigm, money-as-we-know-it needs to be 'depoliticised'. This can only be accomplished by the separation of money and the state. Under the current arrangement the banking cartel creates money as debt and charges interest on it while governments get to spend as much as they want without regard to tax revenues. Legal tender laws and banking regulations endow the banking cartel with the exclusive power to issue money (as debt), which we are forced to use (through legal tender laws). The collusion between political power and financial power is the root cause of the mega-crises facing humanity.

The Evolution of Money

In this chapter we are taken on a journey through history that explains how money evolved as a reaction to the inconveniences of barter. While this is extremely helpful in understanding how the current money system came about and how it can be transcended, Greco could have expressed his proposals more powerfully had he considered the broader concept of the evolution of exchange systems instead of money alone. Money is a sub-set of exchange, a period in the evolution of exchange systems where exchange was mediated by value representations, either in the form of tangible commodities or instruments of various degrees of abstraction. Exchange is not reducible to money and so when the history of money is abstracted from the history of exchange it appears to be linear, starting with commodity money, evolving through symbolic money, credit money and towards some kind of credit clearing system that Greco says is the highest stage of money.

If a history of the evolution of exchange systems had been provided instead, the process would have appeared less linear and more of a Hegelian dialectic, spiralling upwards to higher and higher forms. Certain forms appear to repeat themselves through history. Exchange did not start with barter or with any hard exchange medium that could be identified as money. Exchange is a property of life on earth and not something special or unique to humans. Nature itself provides all sorts of feedback mechanisms to regulate and control exchange but what is unique about human exchange is that humans developed their own systems to regulate and control it. Initially this would have been in the form of mental records of who did or gave what to whom. Various mnemonic devices were introduced to keep a more accurate record. The earliest civilizations learned how to record exchanges on clay tablets; the Incas kept the record by tying knots in pieces of string (quipus); in many places artefacts like notched bones and tally sticks were used. Numeracy and writing arose out of the need to keep records of exchanges (accounting). In a sense 'keeping the record' in this way was an earlier form of the mutual credit clearing process that Greco proposes, where today computers replace the primitive mnemonic devices.

After the earlier information-based exchange systems came the era of money-based exchange systems, where exchange was organised by the mediation of 'stuff' instead of information. This was inevitable when trading increased both in quantity and in distance. With primitive technologies it was no longer possible to keep the record accurately. Money did that simply by being an abstract and portable representation of the real values that were being exchanged. The problem with 'stuff' money is that it can be appropriated. It has to be created, distributed and controlled, and these functions always fell into the hands of the powerful who used it to increase their power over the rest of society. This has come to its apotheosis with the current global money system, which is in the process of morphing into a single world currency. Today the money power is all-powerful, rendering national governments insignificant.

The evolution of exchange systems will not stop with credit clearing, as Greco suggests. It is possible to see another swing back to money-based exchange systems after a brief period of information-based exchange systems. When the energy crisis really begins to bite as we enter the steep downside of peak oil, there may not be enough energy to power the millions of computers that will be needed to run a global credit clearing network. A higher form of tangible money might have to be re-introduced, but hopefully next time we will have learnt that its creation, issuance and control must not fall into private hands and thereby become monopolized.

The Third Evolutionary Stage - The Emergence of Credit Clearing

In this chapter we are introduced to the concept of credit clearing, comparing the credit clearing process of banks today with mutual credit clearing. In the first instance the economic players use bank-borrowed credit (money) to clear debts between themselves; in the latter mutual credit (self-issued IOUs) is used instead. Where bank credit is used the monetary output has to be greater than the monetary input because interest has to be paid on top of the principal amount borrowed. Since the difference between the output and the input was not created at loan time, the deficit can only come from further borrowing down the line. This means that the system has to continually expand, creating an unstable situation prone to crisis and collapse when output does not meet the requirements. Where mutual credit is used there is no need for interest, for there is no third party providing any service that the traders in the circle can't provide themselves. This keeps the system in equilibrium as the full proceeds of production go to the producers and are not siphoned off by a parasitic class who play no part in the production/distribution process. The removal of interest from the equation not only removes the parasites, it also removes the expansionary imperative.

In removing the need for any third party currency or credit instruments, direct credit clearing makes conventional money and banking obsolete. By freeing themselves from “the limitations by monopolized bank-credit and government money”, traders will be creating a 'new economy' in which conventional money plays no part. Greco is not talking about a complementary currency here, but an entirely new exchange system that excludes the financial industry as we know it, central banking, fractional-reserve banking, the political money nexus and everything else that flows from removing the concept of interest from the concept of money.

Credit clearing is a truly revolutionary idea which if it were to be taken up in a big way would shake the foundations of the prevailing economic, social and political order. Perhaps Greco does not follow through the full implications of his proposals out of fear of turning his book into a manual of revolutionary change!

Ignoring what the monetary elite might do if they felt that 'their' money system was under threat, let us take a look at where the widespread implementation of credit clearing circles could take us.

If, as Greco suggests, a network of locally-based 'circles' was implemented - not one giant clearing mechanism to replace the existing one - these circles would result in an economy consisting of a multitude of discrete, locally-based, mini economies without the huge concentrations of capital that characterise the present global economy. This would reduce the size of production units to a community scale and eliminate the opportunities for globalised mega-corporations. This is precisely what the world needs at this time, but it would also mean the deconstruction of the present globalised economy.

Not only that, by eliminating the political nexus and breaking the economy up into locally administered units, would there be any need for the kind of national governments that now reign the earth? Would it not make more sense for governments to scale down to the size of the economic units? Would these then still be called governments, or should they just be called local administrations responsible for providing public services in the areas where the clearing circles operate?

If 'governments' were to scale down surely politics too would be very different if the focus was local instead of national. There would be no place for nationwide political parties, for the concept of nation would become much more fuzzy. Taking this line of thinking to its ultimate conclusion, would nation states make sense any more? Currently nations map to the areas where their currencies operate, but if money systems were more granular then so too would 'nations'. When reduced to city-sized units or smaller, would these still be nation states, or would we be back to the city states of ancient Greece?

Solving the Money Problem and Credit Clearing

According to Greco the 'money problem' can be defined as:

  1. Legal tender status for central bank-created currency
  2. The monopolization of credit by the banking cartel
  3. The lack of an operational measure of value and unit of account that is independent of political currencies

Distilled to its essence it is the concentration of power by the financial elite through its monopolization of money. This has been achieved through a pact with governments, which has given the money monopoly such power that today it is not inaccurate to say that governments are the junior partners in this alliance.

Reformers who believe that there is a political solution to this unhealthy arrangement fail to understand that governments are fully tied into and dependent on this system, and are not the primary decision makers about what happens and how it works. Even if governments did have the will and the power to wrest control of the issuance of credit from the banking cartel, the situation would not be a lot different. The historical record suggests that where governments have come out on top their monopolization of credit has led to militarization, wars, expansion and a weakening of democratic processes.

The money problem will not be solved by shifting the issuing power, even if governments are able to do it debt free. What is required is the ending of the money monopoly. This means the decentralisation and democratisation of the exchange process. Again this can only be achieved through traders establishing their own mutual credit clearing circles and independent private and community currencies.

By creating their own local currencies traders can liberate the exchange process and disperse the money power amongst themselves. It is in fact a lot more than just the exchange process that is liberated when a usury-free exchange system is adopted. Ruling classes have always used control over the exchange system as the basis of their power. Usury (interest) has always been one of the main instruments they have used. Attempts to undermine that basis would result in class warfare in the form of 'currency wars'. The ruling class would appeal to its allies in government to quash any attempts to 'undermine the economy'. Widespread adoption of mutual credit clearing would seriously weaken class rule and usher in a period of democracy where for the first time in history power really would belong to the people.

Mutual credit clearing circles fall under the category of information-based exchange systems and are not part of the money-based camp. Where the organising principle is information and not exchange media, the terminology needs to be quite different. Because the distinction between these two types of exchange systems is seldom made, they are usually conflated and the terminologies merged. Using concepts from the 'old' system to explain how the 'new' one works can lead to confusion and conceals the potential of the latter.

Although Greco insists that "every piece of currency is a credit obligation - an IOU of a particular issuer" and "money is nothing more than credit", in information-based exchange systems (such as the mutual credit clearing circles he proposes) the concepts of credit and issuance are outdated, relics of the dominant, money-based exchange system that we are so used to.

Credit, as commonly understood, is an agreement between trading parties and an obligation on the part of the recipient of the credit: I give you something now and you give me something else later (or you borrow from a bank and settle with me now and transfer that obligation to the bank). It is a normal exchange but with a time delay between delivery and settlement, and that time delay is usually represented by some kind of a credit instrument with an interest component. The interest is always explained as the 'compensation' or the 'penalty' imposed by the giver of the credit for having to wait for settlement.

In an information-based exchange system when there is a transfer of value from a seller to a buyer there is no agreement between the two and no direct obligation on the part of the buyer to the seller. Both the agreement and the obligation are social, and they apply to both sides. Buyers must agree to sell in order to 'pay' for their purchases and sellers must agree to purchase so that buyers can sell. Another way of putting it is that traders must agree to sell in order to buy and buy in order to sell. Everyone has an obligation to the community to keep their mean balance as close to zero as possible. Clearing is the process of ensuring that balances remain at or near to zero.

This could be called community credit but that is stretching the meaning of credit to something else. The community does not 'issue' credit; all that happens is that the system records (as a balance debit) the quantity of value received by the buyer. The value received needs to be offset by the provision of goods and services of an equivalent value so that the debit can be cleared. There is no place for interest in this scheme because the community does not require compensation for the delay in settlement. Everyone delays settlement and so if everyone is penalised for doing so then everyone should benefit from the penalties, but penalties and benefits would cancel each other out and so be pointless.

As there is no credit in an information-based exchange system and certainly no physical currency, the term issue has no meaning as well. When money is issued into circulation it implies that it has substance - it has been 'created' - and that it circulates between trading parties (i.e. it passes from hand to hand). Information can neither be issued nor can it circulate. It is always retrospective - a record of what has already happened. While the use of the terms issue and circulate can help us visualise what is happening because we are so used to them, they are best avoided as they add unnecessary complexity and prevent us seeing that information is a better organiser and regulator than 'stuff'.

Following on from removing the conventional concepts of credit and issuance, the concept of paying (pay, payments etc.) can also be removed from the list of concepts associated with information-based exchange systems, such as clearing circles. To 'pay' is normally understood as giving something in return for something received. Most usually to 'pay' for something means to give money in exchange for whatever was received.

When the exchange system does not have any tangible or symbolic representations of value (i.e. money) but only keeps records of the transfers of value, the concept of 'payment' is rendered meaningless. Nothing 'goes' from the buyer to the seller and so there is no 'payment'. The buyer needs to 'pay' for what was received by delivering like value back to the community, but this is a different meaning for the word 'pay' than it is commonly understood. The 'payment' here is the settlement of a social obligation, not a direct transfer of value to the seller in recompense.

As buyers do not 'pay' sellers in information-based exchange systems, the next question that arises is: who enters the transactions into the system (records them on the computer)? This might at first seem like a trivial matter and the intuitive answer is that the buyer should do it, as buyers have always 'paid' sellers and by entering the transaction they are in effect 'paying' or 'settling' with their sellers.

It is the counter-intuitive, however, that is the most meaningful. Vendors would never tolerate a system where the buyers walk off with the goods, trusting that they will go home and enter the transactions into their PCs. It is not in the interest of buyers to enter transactions as that debits their accounts. Sellers would quickly get very frustrated if they had to chase their buyers after every sale.

Sellers entering transactions is about as revolutionary as mutual credit clearing itself, for it turns upside down the normal buyer/seller relationship, in particular the employer/employee relationship. It also streamlines business processes by removing the need for accountants and for the whole rigmarole of sending statements, waiting for cheques, chasing customers to pay, bad debts, cash flow problems, waiting in bank queues to deposit cheques etc.

The great power of the employing class of capitalism (and socialism) derives from the way that money-based exchange systems work. Businesses are in business to make money and the revenue from production accrues to the owners of the business. As buyers of labour, employers are greatly empowered by the fact that they control the supply of money in their businesses. This keeps their workers in thrall as they are in a weak position vis a vis their employers. Their wages and salaries are paid to them by their employers who are in a position to determine, withhold or terminate payments at any time.

Under a credit clearing scenario employees would not be 'paid' by their employers. As the sellers of labour they would be in a position to credit themselves against their employers. This turns the normal employer/employee relationship on its head. Employees would be greatly strengthened in relation to their employers as the latter would no longer be in a position to unilaterally withhold or terminate their wages/salaries. The very concepts of wages and salaries, which are associated with the concepts of paying and remuneration, would also become meaningless.

How this would actually work in practice is difficult to say because it would depend on the agreements between employees and their employers. Perhaps it would lead to a situation where the concepts of employer and employee would change their meaning, as well as the concepts of employment and jobs. When 'employees' are enabled to credit themselves and debit their 'employers' they are no longer part of a 'workforce' but independent service providers with livelihoods.

We can go on with this train of thought but it becomes increasingly fuzzy as we are entering the realm of the imaginary here. There are no mutual credit clearing circles out there that we can monitor for trends, apart from numerous LETS groups and other similar exchange systems that are too small and insignificant to provide any meaningful clues.

The Next Big Thing in Business: A Complete Web-Based Trading Platform

"As we've shown, money today is not what it used to be, and tomorrow ... well, tomorrow we won't use money at all."

Although it has a long history, the money system of today was developed and adapted for the industrial age. It has always been able to generate practically unlimited amounts of credit, especially after it was delinked from limited precious metals. It has also been able to produce more credit than is necessary for normal trading in order to cover the interest requirement. This has forced economies based on this money system to be locked onto an endless growth path. Growth has been possible while there has been the energy to power the growth, but as we enter the downward slope of the peak oil bell-shape and growth becomes more difficult, so it will become increasingly difficult to service the interest requirement. Because interest is contingent on growth, you could say that the 'production' of credit also has a bell shape and maps on top of the energy production bell shape. We have thus reached 'peak credit' and 'peak interest'. This is a dangerous contradiction for a money system that can only work on the upward slope of the energy production curve.

We are now supposed to be moving into the post-industrial world, the information age, but with a money system designed for the industrial age. Until the computer revolution and the advent of the Internet it simply was not possible to have a purely information-based exchange system. The complexity of keeping track of each and every trade on a global scale could only be achieved by using a money system where each trading entity kept track of its own supply of money and used banks to clear and settle accounts with other trading entities. While this worked, it was hugely inefficient and labour intensive. It needed interest to finance itself. A new money system based entirely on information can keep track of each and every transaction so efficiently that its running costs are negligible. All that would be required from users is a small service fee to keep the system running. A service fee does not require an underlying economy that is geared to keeping its money system working.

While much of what was done manually by banks is now performed by computers, money today still works in pretty much the same way as it has always done. It is issued into circulation as debt by third parties outside of the trading circuit and even where there is innovation in payment systems, such as PayPal, “it only allows the transfer of the same old bank-created debt-money”.

Greco suggests that we can do better than all the existing forms of 'electronic' money that are already out there. To become true alternative payment systems they would have to offer interest-free lines of credit to some or all of their account holders. Until this happens there is nothing stopping anyone from setting up a non-political trading platform that is essentially a credit clearing circle. To be successful it requires four basic components:

  1. A marketplace
  2. A social network
  3. A means of payment
  4. A measure of value or pricing unit

Many of these are already available on the Internet but what is required is that they are integrated to form a new 'trading space' free of the negative aspects of conventional money and that will “enable the evolution of civilization toward greater peace, prosperity and sustainability”.

We are not provided with any clues about how this can be achieved, but it is unlikely to be provided by any of the 'big players' today or a new startup until one of them is prepared to provide the service without expecting any reward in conventional money. This will require a huge leap of faith because the provider will have to believe that its rewards will come from providing the service alone and not from extraneous sources.


The End of Money and the Future of Civilization is a powerful book that should not only be read by everyone in the complementary currency movement, but by all those concerned about what is happening on the economic, social, political and environmental fronts. It is almost impossible to understand what is happening in the world today without understanding how our lives are governed by the “politicized global debt-money regime”. Greco reminds us that the slide to a despotic materialistic feudalism can only be averted if the processes of exchange and finance are recreated.

Tim Jenkin
Cape Town
November 2009