Freedom, Society, and State - Ludwig von Mises Institute

er day it might only buy two bushels. Further, the
fact that the right to issue money was monopolized by
chartered banks meant that its money could be sold at
far above its cost. Warren believed that a circulating
me dIu m wh i c h wa stir e presen tat I ve 0 fad e fin I t e qua ntit Y
of propertytlwould prove to be a stable and therefore a
jus t me c han ism for f a c iIi tat i ngin d irec t ex chan g e •
T his tI de fin i t e qua n tit Y 0 f pro per t y tI wo u I d be 1a bo r
hours. Once exchange ratios between occupations were
est a b lis h e d b Y mea n s 0 fin d i v i d ua I .est i rna t e s 0 f cos t s
and a n a v era g e p ric e i n h 0 u r s for e a c hoc c u pa t ion
emerged, labor notes could circulate. in place of money.
AIl that was r e qui red was to choose If s omepart i cuIa r
kind of labor, the average repugnance of which is most
easily ascertained • and use it as a standard of
comparIson .• for measuring the relative repugnance
of other kinds of labor."(32) Warren believed that
t his n s tan dar d nco U I d be f 0 undIn co r n • I fit we r e
the n f 0 u n d t hat the a v era g e pro d u c t ion 0 f cor n wa s
twenty pounds per hour, any occupation whose average
repugnance was rated by the estimates of the members of
the community at one half more difficult would then
receive the equivalent in labor to thirty pounds of
corn. Any occupat ion rated one-half less difficult
w0 u 1 d on 1 y r ec e i v e the labor equi valent of ten pounds
of corn. Each individual would be perfectly free to
iss u e his ow n I abo r not e s wit h his I abor, but Wa rr en
saw no diffiCUlty here. Anyone who exaggerated the
repugnance of his labor, refused to honor, or overissued,
his own notes, would be unable to find anyone
wi 11 ing to accept them.(33) Warren therefore believed
that necess i ty would compel honesty in the issue of
notes. These notes would then circulate as dollars do
now, but having the advantage of representing something
definite and stable. Hence, if A issued a labor note
to B in payment for a service and B didn't require A's
type of labor, he could exchange it for an equivalent
amount of labor from C, who needed the type of labor
offered by A.(34)
By making each man his own banker, Warren saw
another advantage in his labor note system: it would
break the government-banker money monopoly and thereby
red u c e i n t eres t tot he cos t 0 f rna kin g the t ran sac t ion.
The t1costtl of any loan transaction, however, would include
all sacrifice or burden endured by the lender,
including that of uncertainity or risk. But since information
on demand would be available to all, no unwanted
goods would be produced. Investment would
therefore be riskless and the cost or sacrifice to the
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