Zarlenga Interview with Alistair McConnachie, Prosperity, 2004


by Alistair McConnachie, Part 1.
PROSPERITY, JUNE 2004: Stephen, it was a pleasure to meet you at the Reformers bookshop in Edinburgh in May, and to see a copy of your book, The Lost Science of Money. Please tell readers about yourself?

Thanks Alistair, it was good to meet, after hearing about you from Peter Challen and James Robertson.

My parents emigrated from Europe to Chicago and achieved the “American Dream” – owning a home, a job, more opportunity for their children. They sacrificed and I attended the University of Chicago, under the Hutchins curriculum, a unique program that focused on “The Great Books of the Western Tradition” and on critical thinking and using primary source materials – as much as possible.

What do you do for a living?

I’m the Director of the American Monetary Institute.

What is the American Monetary Institute, what is its aim, why did you set it up, and where is it?

The AMI is a Charitable Trust dedicated to the independent study of monetary history, theory and reform. Emphasis on Independent. The universities have let society down regarding progress in economics, especially money and banking

It can be contacted at AMI, PO Box 601, Valatie, NY 12184, USA; Tel: (USA) 518-392-5387

When did you become interested in Money Reform and why?

I’ve always been interested in it, even as a teenager. The subject as taught, never made full sense. I remember civics class in high school when the Federal Reserve was “explained.” I exchanged glances with my childhood friend Chuck and we both shook our heads in disbelief.

Are you a full-time campaigner now?

Yes . Feels like, more than full time though! Thanks to good fortune and growing interest from the Institute’s supporters and friends I devote all my time to spreading our research results.

What sort of campaigning do you do to spread the message – other than writing this amazing book, that is? For example, have you spoken at any conferences?

Thanks. The book is our main vehicle for the message and funding. I talk wherever I’m invited. Recently at TOES (The Other Economic Summit) in Brunswick Georgia, June 10th, contra the G8 finance ministers meeting.

In May I spoke at the International Philosophers for Peace conference at Radford College.

I told them that as philosophers – the guardians of human knowledge – they had the standing to de-certify economics as a science until the economists cleaned up their act regarding methodology, and definitions.

They laughed in the aisles as I described typical economist methodology.

What were your impressions of the Money Reform scene over here?

People in the UK have a more advanced view of monetary reform than in the US.

We’re burdened by nonsense spread by the Austrian School of Economics – a monetarily and methodologically illiterate group in my view. Libertarians are generally under their sway.

That’s why we still have “goldbugs” in the US. “Goldbug” is the term we generally use here to describe proponents for going “back onto a gold standard” [See Prosperity, December 2003].

There is a mythology that there was great stability under the so-called gold standard.

The goldbug folk tend to be conservatives, often from the fundamentalist Christian community, combined in an unlikely alliance with generally atheistic Libertarians, who learned to be goldbugs from the novelist Ayn Rand, as exemplified in the cocktail party speech of one of her fictional heroes Francisco D’Anconia. She was mentally fixed on this subject by the Austrians.

Sorry to bring in such fictional writers, but in fact one of the methodological weaknesses of the Libertarians is that they have confused Ayn Rand novels with historical evidence!

Some Austrian sympathizers criticize me for being so gruff with them, but that’s all they merit, as I demonstrate in the book.

I regard it as a kind of duty to wean my fellow Americans off their pablum.

Traditionally the US was ahead of the UK in monetary thought. We were a monetary laboratory from the start, and tried everything; whereas the UK was quickly put on the false path of private bank credit money with the formation of the Bank of England in 1694. In our monetary struggles, the UK would send financial “experts” like Walter Bagehot and Bonamy Price to befuddle the Americans. Normally they failed.

Let’s talk about your book. What gave you the idea for The Lost Science of Money, and how long did it take to write?

One of my major goals was to discover a solution to our unjust monetary system. That took years of focused research begun in 1991. Over 800 monetary source books and papers and materials were studied to reach the main thesis.

Your book is heavily based on history. What was your reason for covering history so fully?

The history of money has been ignored – even censored. Yet, that history presents some self-evident conclusions regarding money and banking, that are counter to the practices of today’s financial establishment.

Those supporting corrupt monetary power find it easy to hide behind obtuse theories, but historical case studies are usually clear and instructive.

The monetary system is a source of so much power to those who control it that the area is purposely confused. So a detailed historical format was considered necessary to help do an initial cleaning up of the error and misinformation which we have all suffered under.

Without history, you are in what some Brits used to call “cloud-cuckoo-land.” You need the facts to utilize the empirical method to the extent possible, and those monetary experiences are found in mankind’s history.

It’s also the easiest way to understand the subject and explain it to others. Since I did the studies chronologically, that’s the way I present them.

Finally, since money is always so close to power, following the money thread gives a fascinating historical perspective. It’s not about remembering dates, it’s about clashes of power!

What’s the main point you aim to make in the book?

The main point is the importance of the concept or nature of money as an abstract social power embedded in law.

Not a commodity, not really a form of tangible wealth, and certainly not to be confused with private credit; money is on a higher order as an unconditional means of payment.

The main political battle over money, from Aristotle’s time to the present, has been whether society’s money power be in private hands, and thus used for the benefit of the few in control; or in public (governmental) hands thus potentially used for “promoting the general welfare.” That is the big divide – public v private. Today it’s Aristotle v Adam Smith, with Smith on the wrong side of that battle.

Part 2 of this interview will be continued in the July 2004 issue of Prosperity.

AN INTERVIEW WITH STEPHEN ZARLENGA, with Alistair McConnachie, Part 2.


Continuing Part 2 of our interview with author of The Lost Science of Money, Stephen Zarlenga. Part 1 of this interview appeared in the June 2004 issue of Prosperity.

Stephen, as a consequence of your study, what are your suggested policy proposals for the government of the USA?

To reform our system and assert societal control we have to understand how it was stolen in the first place. It’s always relied on bribery but the main weapon has been Manipulation of Language through obscure theories on the nature of money.

By mis-defining the concept of money, corrupt interests grabbed control of society’s Money Power and the society itself. Definitions have been used as heavy artillery!

The latest form of this attack is an effort to remove the real concept of money from the English language and replace it with a concept of credit!

When I mentioned that at the House of Lords meeting of monetary reformers on 6th May, a number of people recognized how that process of language manipulation works and I saw a reaction go through the room.

There are three parts to the American reforms:

First: Nationalize the Federal Reserve System as the Bank of England was nationalized in 1946.

Reconstitute the Fed within the US Treasury, to evolve into a fourth branch of government, on a par with the executive, judicial and legislative branches.

Only our government would create money, and it would do so directly, not by making loans. Money’s nature is not a loan credit. That is crucial to remember.

Once the money is in existence, it could be loaned, but you don’t want a situation where repaying loans then liquidates the money. Using loans to create money would make it too easy for banking elements to regain their private control over money.

Second: Remove the privilege which banks presently have to create money. They continue to be private companies but can only lend what has been deposited with them. An elegant process automatically turns the previously issued bank credit into real American money. 100% reserves are reached not by calling in loans and wrecking the economy but by increasing reserves.

Third: Provide for automatic, constitutionally determined government money creation, starting with the 2 trillion dollars which the American Society of Civil Engineers say is needed to bring infrastructure up to acceptable levels.

From there we go forward carefully determining how to best run the monetary system, and thoughtfully use Aristotle’s method, we learn by doing.

Do you think these policies are also suitable for the UK?

Yes, you have already done step number 1, thanks to the Archbishop of Canterbury’s initiative, which I describe in Chapter 20.

Next remove the money creation privilege from private banks. Figure out how that money power is best applied, based on desired social goals.

What difference would these policies make to the life of the average person, if they were implemented?

Government money tends to go into infrastructure, like education, roads, clean water, health care and social security.

Control over how the money is used directs the money to solving pressing problems rather than into useless speculation that merely concentrates wealth. This assures a better quality of life not dominated by arcane forces with whatever hidden agendas.

Have you faced any outright opposition to your ideas, and if so, from whom?

The opposition doesn’t want to draw attention to the book so they ignore it, or misreview it – create false reviews putting forward things that are not in the book.

If a reviewer gives an accurate picture of a book and then attacks it, many people still say – “but I find those ideas interesting” and get the book anyway.

False reviews don’t give the reader that chance. Nasty reviewers try to make a book sound either dull, or weird, and turn people away. There have been two reviews like that, apparently from Austrian School sympathizers – one an American goldbug, the other a Canadian economist.

Outright opposition doesn’t work against my book because I present so much of the factual evidence that destroys their arguments and outright lies.

The opposition prefers such evidence never be seen or discussed. In other words the facts beat them.

So getting interviewed in positive publications such as prosperity is really quite important.

Now because my book breaks much new ground, reviewing it requires a really good mind to start with. And I’m happy to report that we are getting some great reactions as more people read the book. PROSPERITY readers can see the reactions, including reviews at our website

I can’t over-emphasize the importance to the AMI of people purchasing and reading this book. It’s only when people help by purchasing our research results in book form, that we can continue with more research.

What sort of people are most interested in your book?

Those looking for an uncensored, accurate presentation of the monetary problem and its solution. It’s strongly enjoyed by those with an inkling something’s wrong with the monetary system but can’t put their finger on it; or have done a bit of reading in this area or even devoted a lot of effort but still haven’t put all the pieces together.

We do put the pieces together and give tons of factual ammunition of which most specialists are not aware. For example, a substantial part of my presentation in London was dispelling the myth that government money systems have been more dangerous and inflationary than privately controlled ones. We aim to make monetary reform the 21st Century’s top priority.

Can you give us an idea of the Money Reform scene in the USA?

After WW2, the Bank of England was nationalized and the locus of the world’s money power had a little earlier shifted over from London to New York. With it came the Austrian School of Economics with their monetary obfuscations and wearing the “freedom” mantra on their cuffs, while the real effects of their ideas were to promote plutocracy.

This culminated in Hayek’s, Denationalization of Money book in the 70s – an unsuccessful attempt to throw a monkey wrench into the Euro plans and an affront to all thinking people. Ayn Rand put the Austrians on the map in America, through her “Objectivist” movement.

She was stuck in a backward “money is gold” framework. And so we have small pressure groups promoting goldbug viewpoints and these are easily ignored in public debates, and they expect to be ignored also. Normally they are promoted by mining companies, coin dealers and related investment groups and much of their leaderships focus is on making money rather than achieving reform.

The Libertarians are either backing these gold standard ideas, or even worse, Hayek’s free banking viewpoints.

I demonstrate to the free bankers 6 major errors in Chapter 16. The first is that they have misidentified the free banking period of American history.

The local currency people are very decent people who understand that there is a serious monetary problem, and I’m very interested in reaching them, as a believer in moving forward along many fronts toward monetary reform. But some of their leadership seems to think they can ignore the national reform scene and will be allowed to escape into their local enclaves.

That kind of escapism was promoted by Ayn Rand – her heroes in Atlas Shrugged escape to a secret valley in Colorado, as civilization crumbles around them!

Then there is the American Monetary Institute promoting the reform proposals described above. We have to do a great deal more than we have so far.

Politicians are still afraid to get involved in any of these movements because they are all counter to the Fed. That will happen when the bankers malfeasance creates the next crisis.

Our battle is not only with the financial establishment, it’s with a confused atmosphere where some who think of themselves as reformers are actually serving to confuse the situation.

Life is interesting, and it would be strange indeed if this key power area had been left undefended. It’s up to the AMI to work harder and smarter to get our message across to those who have maintained open minds. We could use as much help in that as we can get.

Now remember, although the book is printed on 300-year paper, I am highly optimistic that we will be successful in this work. Why?

TINA! There Is No Alternative! (Note: the Brits were constantly barraged with this abbreviation by Prime Minister Thatcher in her drive to de-regulation and pseudo-free markets)

The alternative is too terrible to imagine. Mankind’s “fate” is not to have civilization derailed by the characters presently controlling our money systems!

Stephen, best of luck in your important work, and thank you for a very insightful and instructive interview.

Thank you Alistair!


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