E.C. Riegel
Encyclopedia
Edwin Clarence Riegel generally known as E.C. Riegel, was an independent scholar
, author
and consumer advocate
who campaigned against restrictions on free market
s that harmed consumers
and promoted an alternative monetary theory
and an early private enterprise currency alternative
.
Best selling libertarian
author Harry Browne
, in the introduction to his 1974 book You Can Profit from a Monetary Crisis described Riegel’s book The New Approach to Freedom as “The best explanation of the free market I’ve seen." Author David Boyle
, devotes a chapter of his book The Money Changers: Currency Reform from Aristotle to e-cash to E.C. Riegel. Riegel is referenced on alternative currency
, commercial barter
and investment strategy
sites.
and left home in 1894 at age 15 with a vision of social justice
for the common person. Self-educated, without academic degrees or distinctions, when speaking for groups he labeled himself a "non-academic student of money and credit." He supported himself working intermittently in sales at upscale department stores. He was married in 1905 to Blanche Ellis Beach; the marriage lasted seven years.
Riegel associated and corresponded with libertarians, individualist anarchists, mutualist
s and diverse progressives such as Laurence Labadie, anarcho-capitalist Spencer Heath
and libertarian and free thinker
Charles T. Sprading.
Riegel established the Consumer Guild of America in 1928 to campaign against restrictive consumer credit practices. After the Wall Street Crash of 1929
and during the Great Depression
he published articles and books exposing big business
, trade associations, the Better Business Bureau
and “blue sky law
” manipulation of investment markets
which impoverished small investors.
He began to question whether it was the government controlled monetary system
which was the problem. He prepared questions about the nature of money
and sent them to a list of eighteen “world authorities” on the meaning of money he had solicited from famed economist Irving Fisher
. Six replied, but shared no of consensus on the subject, as he illustrated in his 1936 book Irving Fisher’s World Authorities on The Meaning of Money.
Over the next few years in consultation with friends and students, Riegel constructed his own theory of money. In the 1940s he established The Valun Institute for Monetary Research to promote his monetary theories. In 1944 Harbinger press published his most successful book Private Enterprise Money.
After Riegel’s death, Spencer H. MacCallum
, who had met Riegel through his grandfather Spencer Heath, obtained all Riegel’s papers, which now reside with the Heather Foundation, of which MacCallum is director. In 1976 the Heather Foundation edited and published Riegel’s book, “The New Approach to Freedom” (formerly published as a pamphlet) and in 1978 his "Flight from Inflation: The Monetary Alternative," augmenting both with material from his unpublished papers.
writes of Riegel:
Riegel's monetary theory differentiated between the "objective view of money" as an "entity having some kind of an independent existence," especially fiat money
issued by government. He contrasted this with "the subjective" idea of money, that "money can spring only from trade——that trade creates money, and not vice versa." This is a similar concept to credit money
.
Spencer MacCallum writes that E.C. Riegel thought "that a simple and dependable means of exchange would do more to enhance the dignity and well being of the common man than any political reform." He notes that: "Riegel conceived of money as simply number accountancy among private traders. ... Riegel came down on the side of a rigorously free-market fiat system; for a mature exchange system as he conceived it would depend on no intrinsic value at all, nor would it require or tolerate any government participation. In that sense, the fully evolved exchange system would be a natural system operating entirely as a spontaneous, free-market process with no political mandates imposed."
In the "Money Freedom Declaration” issued by Riegel and supporters of the ideas expressed in Private Enterprise Money, Riegel described the "The Valun Private Enterprise Money System":
Riegel's “Money Freedom Declaration” and Private Enterprise Money were endorsed by several progressive thinkers of the time including James Peter Warbasse
, an early leader of the cooperative
movement in America; libertarian author Charles Sprading; civil liberties attorney Thorwald Siegfried; and Wing Anderson, author of War’s End about the banking system and war.
Endorser Lawrence Labadie wrote that the book "brings out a fact that has not been seen clearly before, namely, that totalitarianism and war would be practically impossible unless the state had control of the money system." Economist John Lossing Buck, husband of Pearl Buck, stated that it explains "the meaning and function of money better than any other treatise on the subject that has come to my attention." Spencer Heath opined that it "is the best expose to date of how a political and coercive money system is bound to destroy free enterprise-to corrupt free citizens into subjects and slaves."
Independent scholar
An independent scholar is anyone who conducts scholarly research outside universities and traditional academia. Independent scholars play an especially important role in areas such as art history and other humanities fields...
, author
Author
An author is broadly defined as "the person who originates or gives existence to anything" and that authorship determines responsibility for what is created. Narrowly defined, an author is the originator of any written work.-Legal significance:...
and consumer advocate
Consumer protection
Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...
who campaigned against restrictions on free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
s that harmed consumers
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
and promoted an alternative monetary theory
Alternative currency
Alternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems...
and an early private enterprise currency alternative
Private currency
A private currency is a currency issued by a private organization. It is often contrasted with fiat currency issued by governments or central banks. In many countries, the issue of private paper currencies is severely restricted by law....
.
Best selling libertarian
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
author Harry Browne
Harry Browne
Harry Browne was an American libertarian writer, politician, and free-market investment analyst. He ran for President of the United States as the nominee of the Libertarian Party in 1996 and 2000....
, in the introduction to his 1974 book You Can Profit from a Monetary Crisis described Riegel’s book The New Approach to Freedom as “The best explanation of the free market I’ve seen." Author David Boyle
David Boyle (author)
David Courtney Boyle, 1958-, is a British author and journalist who writes mainly about history and new ideas in economics, money, business and culture. He lives in Crystal Palace, London. His book Authenticity put the phenomenon on the business and political agenda...
, devotes a chapter of his book The Money Changers: Currency Reform from Aristotle to e-cash to E.C. Riegel. Riegel is referenced on alternative currency
Alternative currency
Alternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems...
, commercial barter
Barter
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a...
and investment strategy
Investment strategy
In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio...
sites.
Life and work
Riegel was born in Cannelton, IndianaIndiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
and left home in 1894 at age 15 with a vision of social justice
Social justice
Social justice generally refers to the idea of creating a society or institution that is based on the principles of equality and solidarity, that understands and values human rights, and that recognizes the dignity of every human being. The term and modern concept of "social justice" was coined by...
for the common person. Self-educated, without academic degrees or distinctions, when speaking for groups he labeled himself a "non-academic student of money and credit." He supported himself working intermittently in sales at upscale department stores. He was married in 1905 to Blanche Ellis Beach; the marriage lasted seven years.
Riegel associated and corresponded with libertarians, individualist anarchists, mutualist
Mutualism (economic theory)
Mutualism is an anarchist school of thought that originates in the writings of Pierre-Joseph Proudhon, who envisioned a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market...
s and diverse progressives such as Laurence Labadie, anarcho-capitalist Spencer Heath
Spencer Heath
Spencer Heath was an American engineer, attorney, inventor, manufacturer, horticulturist, poet, philosopher of science and social thinker. An anarchist and a dissenter from Georgist economic views, he pioneered the theory of proprietary governance and community in his book Citadel, Market and Altar...
and libertarian and free thinker
Freethought
Freethought is a philosophical viewpoint that holds that opinions should be formed on the basis of science, logic, and reason, and should not be influenced by authority, tradition, or other dogmas...
Charles T. Sprading.
Riegel established the Consumer Guild of America in 1928 to campaign against restrictive consumer credit practices. After the Wall Street Crash of 1929
Wall Street Crash of 1929
The Wall Street Crash of 1929 , also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout...
and during the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
he published articles and books exposing big business
Big Business
Big business is a term used to describe large corporations, in either an individual or collective sense. The term first came into use in a symbolic sense subsequent to the American Civil War, particularly after 1880, in connection with the combination movement that began in American business at...
, trade associations, the Better Business Bureau
Better Business Bureau
The Better Business Bureau , founded in 1912, is a corporation consisting of several private business franchises of local BBB organizations based in the United States and Canada, which work through their parent corporation, the Council of Better Business Bureaus .The Better Business Bureau, through...
and “blue sky law
Blue sky law
A blue sky law is a state law in the United States that regulates the offering and sale of securities to protect the public from fraud. Though the specific provisions of these laws vary among states, they all require the registration of all securities offerings and sales, as well as of stock...
” manipulation of investment markets
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
which impoverished small investors.
He began to question whether it was the government controlled monetary system
Monetary system
A monetary system is anything that is accepted as a standard of value and measure of wealth in a particular region.However, the current trend is to use international trade and investment to alter the policy and legislation of individual governments. The best recent example of this policy is the...
which was the problem. He prepared questions about the nature of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
and sent them to a list of eighteen “world authorities” on the meaning of money he had solicited from famed economist Irving Fisher
Irving Fisher
Irving Fisher was an American economist, inventor, and health campaigner, and one of the earliest American neoclassical economists, though his later work on debt deflation often regarded as belonging instead to the Post-Keynesian school.Fisher made important contributions to utility theory and...
. Six replied, but shared no of consensus on the subject, as he illustrated in his 1936 book Irving Fisher’s World Authorities on The Meaning of Money.
Over the next few years in consultation with friends and students, Riegel constructed his own theory of money. In the 1940s he established The Valun Institute for Monetary Research to promote his monetary theories. In 1944 Harbinger press published his most successful book Private Enterprise Money.
After Riegel’s death, Spencer H. MacCallum
Spencer MacCallum
Spencer Heath McCallum , commonly known as Spencer MacCallum, is an American anthropologist, business consultant and libertarian anarchist author...
, who had met Riegel through his grandfather Spencer Heath, obtained all Riegel’s papers, which now reside with the Heather Foundation, of which MacCallum is director. In 1976 the Heather Foundation edited and published Riegel’s book, “The New Approach to Freedom” (formerly published as a pamphlet) and in 1978 his "Flight from Inflation: The Monetary Alternative," augmenting both with material from his unpublished papers.
Riegel’s Monetary Theories
Community and monetary economist Thomas H. Greco, Jr.Thomas H. Greco, Jr.
Thomas Henry Greco, Jr. is a community economist, who blogs, writes, and speaks on the subject of free market alternative currency and monetary systems.-Life and work:...
writes of Riegel:
Riegel left a great legacy of writings and correspondence. ...as he showed so clearly, [peace, freedom and prosperity] are dependent upon the liberation of the exchange process from the dominance of political and banking interests, and he showed how private initiative and voluntary action could achieve it. Much of what he proposed and tried to implement in the 1930s and 40's has been reinvented in more recent times in the form of the mutual credit, LETS, and clearing circles that have been proliferating around the world. But there is yet something incomplete about these. Today's initiatives could benefit from the deeper understanding and structural proposals that Riegel shares with us in his works.
Riegel's monetary theory differentiated between the "objective view of money" as an "entity having some kind of an independent existence," especially fiat money
Fiat money
Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.Fiat money originated in 11th...
issued by government. He contrasted this with "the subjective" idea of money, that "money can spring only from trade——that trade creates money, and not vice versa." This is a similar concept to credit money
Credit money
Credit money is any claim against a physical or legal person that can be used for the purchase of goods and services. Examples of credit money include personal IOUs, and in general any financial instrument or bank money market account certificate, which is not immediately repayable in specie, on...
.
Spencer MacCallum writes that E.C. Riegel thought "that a simple and dependable means of exchange would do more to enhance the dignity and well being of the common man than any political reform." He notes that: "Riegel conceived of money as simply number accountancy among private traders. ... Riegel came down on the side of a rigorously free-market fiat system; for a mature exchange system as he conceived it would depend on no intrinsic value at all, nor would it require or tolerate any government participation. In that sense, the fully evolved exchange system would be a natural system operating entirely as a spontaneous, free-market process with no political mandates imposed."
In the "Money Freedom Declaration” issued by Riegel and supporters of the ideas expressed in Private Enterprise Money, Riegel described the "The Valun Private Enterprise Money System":
By private initiative and without intervention of government or banks, private enterprisers (employers, employees and self-employers) in any state will organize a Valun Exchange to operate a money system of, for and by the people. Such Valun Exchange will unite with every other Valun Exchange in any other state or nation making a universal money system with a single money unit, called the valun .
The money will spring from the mutual credit of all of the members of the Valun Exchanges in this way: It will be agreed that each member will have a credit on the Valun Exchange based upon prospective income, against which he or she can draw checks in payment of purchases from other members - in other words, will have the over-draft privilege.
When currency bills or coins are desired the members may draw the desired cash. No notes are to be signed and no interest is to be paid. The Valun Exchange will be a nonprofit, non-stock organization. No capital will be invested and the membership fee will be nominal. The Exchange will pay its expenses out of a small charge for each check cleared. All members of Valun Exchanges will use valuns when trading with each other and will continue to use dollars when trading with non-members.
As the valun system demonstrates its superiority, more persons and corporations will join it and thus more and more trading will be done with valuns and less with dollars, pounds, francs and the scores of other political money units. By this evolutionary process a universal money system will be established under the control of the people. Banks will not participate and governments will be empowered only to receive valuns and pay them out but not to create them.
The valun private enterprise money system is designed to break the present money control against the people and (a) raise wages and, salaries to the highest possible level, (b) maintain constant employment, (c) maintain a steady price level and prevent inflation and deflation, (d) abolish bureaucracy and centralization of government, (e) defeat fascism and communism, (f) assure real freedom, prosperity and democracy, (g) preserve peace.
Riegel's “Money Freedom Declaration” and Private Enterprise Money were endorsed by several progressive thinkers of the time including James Peter Warbasse
James Peter Warbasse
Dr. James Peter Warbasse was an American surgeon and advocate for cooperatives. He founded the Cooperative League of the United States of America and was its president from 1916 to 1941.-Early life:Warbasse was born on November 22, 1866 in Newton, New Jersey to Joseph Warbasse and...
, an early leader of the cooperative
Cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
movement in America; libertarian author Charles Sprading; civil liberties attorney Thorwald Siegfried; and Wing Anderson, author of War’s End about the banking system and war.
Endorser Lawrence Labadie wrote that the book "brings out a fact that has not been seen clearly before, namely, that totalitarianism and war would be practically impossible unless the state had control of the money system." Economist John Lossing Buck, husband of Pearl Buck, stated that it explains "the meaning and function of money better than any other treatise on the subject that has come to my attention." Spencer Heath opined that it "is the best expose to date of how a political and coercive money system is bound to destroy free enterprise-to corrupt free citizens into subjects and slaves."
See also
- Alternative currencyAlternative currencyAlternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems...
- Credit moneyCredit moneyCredit money is any claim against a physical or legal person that can be used for the purchase of goods and services. Examples of credit money include personal IOUs, and in general any financial instrument or bank money market account certificate, which is not immediately repayable in specie, on...
- Digital cash
- Electronic moneyElectronic moneyElectronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
- Flex dollarFlex dollarFlex dollars are a form of payment used at large institutions, especially Universities. James Madison University, University of Toronto, Queen's University, University of Waterloo, University of Western Ontario, and Messiah College are all schools that use this system...
- Free bankingFree bankingFree banking refers to a monetary arrangement in which banks are subject to no special regulations beyond those applicable to most enterprises, and in which they also are free to issue their own paper currency...
- Local currencyLocal currencyIn economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
- Local Exchange Trading SystemsLocal Exchange Trading SystemsLocal exchange trading systems , also known as LETSystems, are locally initiated, democratically organised, not-for-profit community enterprises that provide a community information service and record transactions of members exchanging goods and services by using the currency of locally created...
- MoneyMoneyMoney is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
- Private bankPrivate bankPrivate banks are banks that are not incorporated. A private bank is owned by either an individual or a general partner with limited partner...
- Private currencyPrivate currencyA private currency is a currency issued by a private organization. It is often contrasted with fiat currency issued by governments or central banks. In many countries, the issue of private paper currencies is severely restricted by law....
- Time-based currencyTime-based currencyIn economics, a time-based currency is an alternative currency where the unit of exchange is the man-hour.Some time-based currencies value everyone’s contributions equally. One hour equals one service credit...