The paper presents four non-exclusive options for reforming the economy and the financial system. Three options reintroduce cost-carrying money as supported by Gesell1, Fisher2 and Keynes3, but in electronic form. One variant is a government issue redeemable into official money as proposed by the US Bankhead-Pettengill Bill of 1933. A second option is to allow private issues redeemable into official money as occurred during the Great Depression. The third option involves private issues convertible into specified commodities as occurred in Europe in the 1920s. The redemption of a currency into kilo-Watt-hours (kWh) of electricity generated from renewable resources provides a way to create “green” dollars with a stable unit of local value. Green cost-carrying money could make renewable energy cheaper than burning carbon. The fourth option involves using existing fiat money to reduce: (i) the cost of seigniorage; (ii) interest on government debt; (iii) size of organisations considered too big to fail; (iv) tax incentives to favour equity rather than debt; (v) the different types of risks accepted by financial institutions; and (vi) ability of banks and “shadow” banks to create credit to finance derivatives many times greater than the GDP of the global economy.

This paper presents four non-mutually exclusive approaches for reforming the economy and the financial system to make it more efficient, equitable and resilient

A common feature of three of the options is the introduction of cost-bearing money as proposed by Gesell5 for “the abolition of unearned income.” Gesell described cost-bearing money as “Free-Money” as it removed the cost of interest and it could be designed to become self-financing to allow it to be given away. Suhr6 described it as “neutral” money because it could remove the bias to invest in financial assets rather than real assets. However, many forms of Free-Money adopted in the last century adopted a cost regime that reversed the bias to make this description inappropriate.

Cost-carrying money introduced into Europe and the US was described as “Stamp Scrip”. Fisher7 and Keynes8 supported Stamp Scrip because, among other things, it could be used to stabilise prices. Keynes referred to Gesell as “unduly neglected prophet”. In Chapter 23 Part VI of his “General Theory”, Keynes stated that Gesell’s 1916 book described “the establishment of an anti-Marxian socialism” based on “an unfettering of competition instead of its abolition.”9 Onken10 described it as “A Market Economy without Capitalism”. The 2008 failures in the financial system provide lessons for financial innovators and regulators in accepting the introduction of the various forms of cost-bearing money described below.

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