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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.

tying knots

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

mental

clay tablets

Exchange is a property of life on earth and not something special or unique to humans

tally sticks

notched bones

earlier form of the mutual credit clearing process

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

Today the money power is all-powerful, rendering national governments insignificant

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 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.

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.

would nation states make sense any more? Currently nations map to the areas where their currencies operate

the lack of an operational measure of value

This means the decentralization and democratization of the exchange process.

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."

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.

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.

As there is no credit in an information-based exchange system and certainly no physical currency, the term "issue" has no meaning as well.

Information can neither be issued nor can it circulate

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

The "payment" here is the settlement of a social obligation, not a direct transfer of value to the seller in recompense.

who enters the transactions into the system (records them on the computer)?

Sellers entering transactions is about as revolutionary as mutual credit clearing itself,

bad debts

As buyers of labour, employers are greatly empowered by the fact that they control the supply of money in their businesses

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.

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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.

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.

Until the computer revolution and the advent of the Internet it simply was not possible to have a purely information-based exchange system

To be successful it requires four basic components: A marketplace A social network A means of payment A measure of value or pricing unit

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.