limo:money

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limo:money [2025/12/05 10:36] – created - external edit 127.0.0.1limo:money [2025/12/12 16:16] (current) – dave
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 Money appeared in many forms at various times in different parts of the world; but here are three important ways that money originated. Money appeared in many forms at various times in different parts of the world; but here are three important ways that money originated.
  
-**Tax tokens:** this was a way of building empires stretching back to ancient times. A king stamps his head on coins, pays soldiers with them and demands them as taxes, so that all subjects have to provide goods and services to the soldiers and to the king, to obtain the coins. [More...](/limo/money)+**Tax tokens:** this was a way of building empires stretching back to ancient times. A king stamps his head on coins, pays soldiers with them and demands them as taxes, so that all subjects have to provide goods and services to the soldiers and to the king, to obtain the coins. [More...](https://www.lowimpact.org/categories/money/further-info/brief-history-of-money/#tax-tokens)
  
-**Goldsmith’s** **receipts****:** goldsmiths kept valuables in their store-rooms and provided receipts that could then be passed around as, in effect, money – because everyone knew the receipts were good for real gold or jewels. Goldsmiths saw that people didn't often come to collect their valuables, so started lending money backed by gold in their vaults. They eventually realised that they could lend out more than they actually had, and became fabulously wealthy. This is the basis of ‘fractional reserve’ banking – i.e. they only had a fraction of what they lent in reserve in their vaults. [More..](/limo/money).+**Goldsmith’s** **receipts****:** goldsmiths kept valuables in their store-rooms and provided receipts that could then be passed around as, in effect, money – because everyone knew the receipts were good for real gold or jewels. Goldsmiths saw that people didn't often come to collect their valuables, so started lending money backed by gold in their vaults. They eventually realised that they could lend out more than they actually had, and became fabulously wealthy. This is the basis of ‘fractional reserve’ banking – i.e. they only had a fraction of what they lent in reserve in their vaults. [More..](https://www.lowimpact.org/categories/money/further-info/brief-history-of-money/#goldsmiths) 
  
-**'Common tender':** this can include traders' market money, or informal mutual credit. Imagine a medieval village in which everyone is a producer and a consumer, and knows everyone else, but no-one has any money. Everyone manages to obtain the services of thatchers, carpenters, farmers, fishermen, blacksmiths, bakers, brewers, cheesemakers, weavers, leatherworkers, basketmakers etc. because everyone keeps a tally in their head (or maybe in a more formal way), of what’s been provided to the community (including by you). If anyone is lazy or unreliable, people won’t want to provide things for them, and so everyone plays the game, and they all get what they need. [More...](/limo/money)+**'Common tender':** this can include traders' market money, or informal mutual credit. Imagine a medieval village in which everyone is a producer and a consumer, and knows everyone else, but no-one has any money. Everyone manages to obtain the services of thatchers, carpenters, farmers, fishermen, blacksmiths, bakers, brewers, cheesemakers, weavers, leatherworkers, basketmakers etc. because everyone keeps a tally in their head (or maybe in a more formal way), of what’s been provided to the community (including by you). If anyone is lazy or unreliable, people won’t want to provide things for them, and so everyone plays the game, and they all get what they need. [More...](https://www.lowimpact.org/categories/money/further-info/brief-history-of-money/#common-tender) 
  
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 Here's our '[brief history of money](http://lowimpactorg.onyx-sites.io/infoarticle/brief-history-of-money/)'. Here's our '[brief history of money](http://lowimpactorg.onyx-sites.io/infoarticle/brief-history-of-money/)'.
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 ### Where does money come from now? ### Where does money come from now?
  
-Most people probably believe that the state creates money. That’s true for about 3% of money – coins, notes and central bank reserves. The other 97% is created by banks when they make loans. If you borrow £10k from a bank, they haven’t taken that money from anywhere else. They’ve just created it from nothing and deposited it in your account. [More...](/limo/money) +Most people probably believe that the state creates money. That’s true for about 3% of money – coins, notes and central bank reserves. The other 97% is created by banks when they make loans. If you borrow £10k from a bank, they haven’t taken that money from anywhere else. They’ve just created it from nothing and deposited it in your account. [More...](https://www.lowimpact.org/categories/money/further-info/brief-history-of-money#__RefHeading___Toc41879_2618143146)
 It’s not even a ‘fractional reserve’ system any more, in that that no portion of the money banks lend out needs to be held in reserve anywhere. Their decisions are solely based on confidence that the loans will be repaid (with interest). This is proven by [Richard Werner](https://www.sciencedirect.com/science/article/pii/S1057521914001070) and confirmed by the [Bank of England](https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/quarterly-bulletin-2014-q1). It’s not even a ‘fractional reserve’ system any more, in that that no portion of the money banks lend out needs to be held in reserve anywhere. Their decisions are solely based on confidence that the loans will be repaid (with interest). This is proven by [Richard Werner](https://www.sciencedirect.com/science/article/pii/S1057521914001070) and confirmed by the [Bank of England](https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/quarterly-bulletin-2014-q1).
  
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 ## What are the benefits of low-impact money? ## What are the benefits of low-impact money?
  
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-_10-year-old girl explains to her teddy where money comes from. I’m not sure he believes her – but she’s right. More introductory videos from Positive Money [here](https://positivemoney.org/videos/introduction/)._+_10-year-old girl explains to her teddy where money comes from. I’m not sure he believes her – but she’s right. [More introductory videos from Positive Money](https://positivemoney.org/videos/introduction/)._
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 Low-impact money, as a means of exchange, is useful only in a commodity-based economy. Here are some advantages of this kind of economy: Low-impact money, as a means of exchange, is useful only in a commodity-based economy. Here are some advantages of this kind of economy:
  
-- it doesn’t require perpetual GDP growth ([which d](/stea/steady-state_economics)[amages](/stea/steady-state_economics) [ecology](/stea/steady-state_economics))+- it doesn’t require perpetual GDP growth ([which damages ecology](/stea/steady-state_economics))
  
-- it doesn’t concentrate wealth in very few hands ([which](/thde/the_democracy_problem) [prevents](/thde/the_democracy_problem) [democracy](/thde/the_democracy_problem))+- it doesn’t concentrate wealth in very few hands ([which prevents democracy](/thde/the_democracy_problem))
  
 - it prevents the means of exchange from being sucked out of communities and stored (which reduces [community resilience and well-being](/comy/community)) - it prevents the means of exchange from being sucked out of communities and stored (which reduces [community resilience and well-being](/comy/community))
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-After that, the first thing to do it to avoid commercial banks. Use [building societies](/buil/building_societies), [credit unions](/crun/credit_unions) or [ROSCAs](/rosc/roscas) instead. Click on the links for why they’re better.+After that, the first thing to do it to avoid commercial banks. Use [[bsoc:building societies]], [[crun:credit unions]] or [[rosc:ROSCAs]] instead. Click on the links for why they’re better.
  
 However, this still involves using conventional money. Some support conventional money if it’s backed by gold, or if it’s issued by the state rather than banks. But why dig gold out of the ground (in environmentally-damaging and exploitative ways), just to bury it again in bank vaults, where it has to be guarded, and some people can still hoard it all? And state control doesn’t change the money monopoly, it just puts it under new management (and not that new, really, when bank CEOs are recruited as US Treasury Secretaries). However, this still involves using conventional money. Some support conventional money if it’s backed by gold, or if it’s issued by the state rather than banks. But why dig gold out of the ground (in environmentally-damaging and exploitative ways), just to bury it again in bank vaults, where it has to be guarded, and some people can still hoard it all? And state control doesn’t change the money monopoly, it just puts it under new management (and not that new, really, when bank CEOs are recruited as US Treasury Secretaries).
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 As Henry Kissinger said: ‘Who controls money controls the world’. So unless we’re happy with a financial elite controlling the world, we have to control it ourselves. As Henry Kissinger said: ‘Who controls money controls the world’. So unless we’re happy with a financial elite controlling the world, we have to control it ourselves.
 +
  
 ## Further resources ## Further resources
  
-- Matthew Slater and Jem Bendell’s _[Money and Society MOOC](https://matslats.net/money-society-mooc)_+- Glyn Davies’ (2002) _[History of Money](https://lowimpactorg.onyx-sites.io/wp-content/uploads/HistoryOfMoney.pdf)_ (pdf)
  
-- Tom Greco’s updated, 2024 version of _[The End of Money and the Future of Civilisation](https://beyondmoney.net/welcome-to-the-new-2024-edition-of-the-end-of-money-and-the-future-of-civilization/)_+- David Graeber’s (2011) _[Debt: the first 5000 years](https://lowimpactorg.onyx-sites.io/wp-content/uploads/Debt-first-5000-years.pdf)_ (pdf)
  
-- Brett Scott’s _[Altered States of Monetary Consciousness](https://brettscott.substack.com/)_+- Matthew Slater and Jem Bendell’s (2015–16) _[Money and Society MOOC](https://matslats.net/money-society-mooc)_
  
-- Glyn Davies’ _[History of Money](https://lowimpactorg.onyx-sites.io/wp-content/uploads/HistoryOfMoney.pdf)_ (pdf)+- Tom Greco’s (2024) _[The End of Money and the Future of Civilisation](https://beyondmoney.net/welcome-to-the-new-2024-edition-of-the-end-of-money-and-the-future-of-civilization/)_
  
-- David Graeber’s _[Debt: the first 5000 years](https://lowimpactorg.onyx-sites.io/wp-content/uploads/Debt-first-5000-years.pdf)_ (pdf)+- Brett Scott’s _[Altered States of Monetary Consciousness](https://brettscott.substack.com/)_
  
 - Positive Money’s [video series](https://positivemoney.org/videos/) - Positive Money’s [video series](https://positivemoney.org/videos/)
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