2025-09-28
When someone wants to do work for someone else and the receiver of the work is willing to run into debt for it, they should be able to do the transaction without asking anyone else for money to keep track of the debt.
Using commodities, such as gold as money makes money sparse, which hinders the economy.
Bartering is not practical in a large society where people do highly specialized work. A programmer needs to get food from a farmer, even if the farmer does not need software.
If bank credit is used as money, the people who use it, must pay interest to the bank.
If the money would be created interest free by the government, it could be used for free by the citizens. Such money would not have value unless every citizen would have to pay taxes using it. The taxes would then be the cost of using the money.
The government could lend money at interest. The interest could be used for public spending. The value of the money would come from the need to repay the debt with interest. There would then be both interest free money and governemnt credit in circulation. This is in contrast with bank credit system, where all money is bank credit. In bank credit system some interest free money is some times created by forgiving debts, which is called "quantitative easing". Forgiving debts regularly has been common practice in some cultures, but is currently done only during financial crisis.
In a mutual credit ⬀ system there are no interest nor taxes. The value of the money comes from the trust between the participants.
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