Edwin Clarence Riegel (1879-1953), generally known as E.C. Riegel, was an independent scholar, author and consumer advocate who campaigned against restrictions on free markets that harmed consumers and promoted an alternative monetary theory and an early private enterprise currency alternative.The above photograph shows American mutualist Laurence Labadie with the libertarian monetary theorist, E.C. Riegel, outside the latter's New York City home at 226 East 26th Street, November 14, 1948. Photo is courtesy of Labadie's niece, Carlotta Anderson.
Riegel's primary published works on monetary theory include Private Enterprise Money: A Non-Political Money System (1944), The New Approach to Freedom (1949), and Flight from Inflation: The Monetary Alternative (1978). As the publisher responsible for reviving many of his writings, Spencer MacCallum also prepared a detailed summary of Riegel's thoughts on money.
The entire individualist anti-statist position from Pierre-Joseph Proudhon, Josiah Warren, Benjamin Tucker, and William B. Greene to the modern money theorists, Hugo Bilgram and E.C. Riegel, is inextricably linked to the insistence of competing money systems and the evolution of marketplace control over money, credit, and interest rates. Riegel anticipated Austrian economist Friedrich Hayek's thinking that the separation of money and State also entailed the separation of the standard unit of value and the State. The non-Hayekian 'libertarians' persist in a dogged devotion to the gold standard, which Riegel believed was essentially a formula for a different brand of State-controlled money, run in collusion between ambitious State finance ministers and the major holders of gold, thereby tying currency to a gold price fixed by political agreement and made immune to the market adjustment process of a free market in gold trading.
With echoes of the late 19th-century standards battle between New York gold interests and the agrarian Free Silver Movement, Riegel's valun system describes a voluntary banking association of private abstract standards based on goods and services (or labor) that they are being exchanged for, similar to a mutual credit system. Essentially, a greater number of choices in monetary standards will increase the dignity of the common man and the overall prosperity of the people. In extrapolating this mutual participatory banking system, I doubt Riegel would have advocated that the valun currency unit assume the new monopoly privilege barring other free enterprise entrants. Therefore, other private currency units would evolve naturally and they would be competing directly against the valun. This is where it gets interesting.
Although Hayek departed from some of his Austrian peers in turning towards a totally free market monetary system that may end up not being based on a 100% gold-backed monetary unit, his insistence on free banking and market-determined standards was unwavering. In the worldwide evolution of standards left free to develop unhindered, I maintain that a metals based monetary unit will tend to dominate in the race for nonpolitical digital currency adoption.
We can observe this today in the many digital currency companies jockeying for adoption and circulation. The digital gold currency issuers, as opposed to the digital fiat currency issuers, appear to have a distinct advantage in trust when the elements of jurisdiction and political risk are removed. Otherwise, why would e-gold have achieved such market dominance before being challenged legally by the U.S. authorities? The evidence to date is that online, cross-border digital currency users will gyrate toward objectively-measured value, such as gold, rather than abstract subjective value.
What Riegel did not foresee as possible in the 1940s was technology's ability to permit competing non-State currency providers to issue online and beyond political boundaries. This is a paramount change to the money issuing landscape, not least of which allows for immediate convertibility, partial or full. Riegel's market process for nonpolitical money is correct; however, the conclusions that he reaches regarding the separation of standard unit of value and the State are not realistic. The challenge for the community currency crowd is to demonstrate in practice how a valun or a local time-labor note will prevail over a metals-based currency unit in the digital world.For further reading:
"The Legacy of E.C. Riegel", Thomas Greco, September 7, 2009
"Monetary Theory of E.C. Riegel", Christopher Quigley, March 6, 2007
The Money Changers: Currency Reform from Aristotle to e-cash, David Boyle, 2003
"Anarchy and Money", Jon Matonis, December 15, 1984
Men Against the State, James J. Martin, 1953
Individual Liberty, Benjamin R. Tucker, 1926
Proudhon and His "Bank of the People", Charles A. Dana, 1896
Hard Cash, Ezra Heywood, 1875
True Civilization, Josiah Warren, 1863
Our Mechanical Industry, As Affected By Our Present Currency System: An Argument for the Author's New System of Paper Currency, Lysander Spooner, 1862
Equitable Commerce, Josiah Warren, 1852
Mutual Banking, William B. Greene, 1850
Jon
ReplyDeleteThis is a great intro article and start. How can we help?
Jon. For starters your blog readers may not like to hear that E.C.Riegel wrote-- "The lack of monetary rationale and the universal confusion on the subject existing throughout society from the grass roots to the academies and parliaments is due to the acceptance of a basic error, namely, that money is a creation of the state and must have a legal tender status and political regulation. If one accepts this false premise, only confusion can result, as has resulted in the entire literature and jurisprudence of money. If we reject this postulate, we free our mental processes and can easily master the subject".
ReplyDeletehttp://www.inspiredconstitution.org/riegel_naf/appendix.html
Mike
(I concur)
DeleteMike,
ReplyDeleteThank you for the link provided. To the contrary, I think that my readers would like to hear that Riegel believed in total separation of money and State. If freedom in money chooses gold or another metal via the marketplace, that does not make it a creature of the State, per se. The digital gold currency issuers operate independently of the State today.
Jon
This is true. Riegel further said that--
ReplyDeleteMan must have untrammeled command of a daily— an hourly ballot which he casts in the market place to support the things and services he desires and which he withholds from others and which he transmits to the state or denies it according as it merits his patronage. He must have the power to create this money ballot in a measure commensurate with his power to produce and serve his fellow man without hindrance from his servant, the state. The moment we limit or thwart or bias this money power, which is natural to man, and the very criterion of his sovereignty, we pervert democracy beyond the power of any political ballot or any parliament to remedy. Money power cannot be separated from democratic power without miscarriage and ensuing frustration— political and economic. Democracy implies the sovereignty of man; and, since man cannot be sovereign without the money power, there can not be democracy under the political money system. http://www.newapproachtofreedom.info/pem/chapter02.html --3rd to the last paragraph
(Excellent citation! Thank-you)
DeleteThanks much for all the information, Jon, and especially regarding Riegel's ties to the individualist anarchists. Thanks also for the links to Riegel's work. I know of him only indirectly, through Tom Greco's writing, but am interested in digging in.
ReplyDeleteRiegel's work is gaining in interest and importance as world events go forward. Indeed, relieving us of the Legal Tender Law, which I believe might be technically unconstitutional, it doesn't matter as Riegel indicated, the framers could have put in there that Congress had the right to legislate the orbits of the planets. The whole system is so unsound that it will be only a matter of time (a short time now) before it fails. We need to be able to have something else in place or there will be violence and chaos and THEY WILL TAKE OVER AND ENSLAVE THE WORLD. It's that simple.
ReplyDeleteWhen the people of the world have a common monetary language, completely freed from every government, it will so facilitate and stabilize exchange that peace and prosperity will ensue even without world government.
ReplyDeleteThe operative phrase is "common monetary language". It is my opinion that language is Promise Language. It is something I designed about 7 years ago after reverse-engineering the idea of "money". I have a prototype for the exchange built.