By Toby Maloney

Sancho Panza once had a dream of a world so far away, that it appeared no larger than a mustard seed, and this world had millions of people inhabiting it which he observed going about their business, though they were each but the size of a peppercorn.

To all inquiries as to how, as a peppercorn is larger than a mustard seed, millions the size of the former could be observed as part of the latter, he could but humbly reply that he had no idea of why this was, but could only say what he saw.

The difficulty is that nobody else has ever been able to imagine what Sancho could so clearly describe.

But imagination is not only confined by Sancho’s lonely ability to transcend relativity. Fashion too, plays its part.

In the 19th century almost nobody could imagine a world without private property. During the 20th century, for a time, hundreds of millions dreamed of little else.

Because men will insist upon having an explanation for everything in terms of environmental pressures, we always have them ready to hand. So why was it in the 1700’s that Englishmen wore stovepipe hats? The weather? A lack of storage space elsewhere? It beggars all imagination now.

Which brings us to the severe limitations of imagination. Only the unimaginative can believe themselves capable of imagining everything they so choose. The rise of objective observation in science has inclined us to see imagination as an undisciplined process, in which reality is open-ended and limitless. This is not the case.

Imagining New Things

For about eighty years now, a few people have been imagining a way in which society might be both richer, and more stable and secure for everyone.

Because they have made an enormous effort to understand everything about what they’re suggesting, they’ve tried to get the rest of us to understand it too. And it hasn’t worked.

This is a pity, because we’re all interested.

They’ve been a bit like motor mechanics, lawyers or dentists, trying to give better service by getting us all to understand their improved methods. It would be foolish of professionals to attempt this, of course.

But sometimes it’s hard to avoid. About one hundred and fifty years ago, the idea of old age pensions came along. A handful of people in Government could have organised old age pensions immediately, but because a large number of people, and politics, were involved, it took about fifty years to have the idea accepted.

Some ideas only need one person to do them. James Watt built a steam engine, and the world followed his example.

Rugby Union needed thirty people to start with (fifteen per side), and then the spectators at Rugby in England could see how it was done. The world’s been football mad ever since!

Other ideas, like national constitutions, old age pensions, and abolishing slavery, needed majority support to introduce them. This made them difficult and slow to achieve.

The really difficult thing about totally new ideas, especially those that need majority support, is that without examples, the only way forward is through imagination.

But unlike Sancho Panza’s dream, a majority must be able to imagine some of them, before they’re possible. Thankfully, little understanding is necessary.

Sometime in the future, a majority of people may use the Internet, but very few will ever be required to actually understand it.


An Imaginative Experiment

If you can imagine a non-violent experiment in which you are the guinea pig, perhaps you can help us all.

We are trying to discover whether a particular desirable reform is possible. You will never be required to fully understand it. After much work you may, if you wish, I suppose, but it’s not worth considering just now.

This idea involves distributing new money creations in a different way. If it has a name, perhaps it’s “a democratic money system”, or “social credit ”, but the world hasn’t made up its mind what to call it yet.

The hypothesis we’re working upon is as follows:

“The progression of mass recruitment to any new social idea, towards critical mass (“do-ability”) seems to involve large numbers of people in a three stage process. In order both of progress and decreasing difficulty, they are: imagine it, believe it, and consent to it. Understanding is not required here, nor is it possible.”

So to the difficult part. Just imagine it.

Imagine what? Here we must ask for as little as is enough. This requires realism.

We need to imagine something which is both the lowest common imaginable denominator, but from the conclusions of which there is no imaginable escape, if we are to recruit inevitability. From here on it’s easier. We are all merely the handmaidens of history.


Imagination Number One

Imagine you lived in a country where every single year, for a hundred years, there was always more money at the end of each year, than there was at the beginning.

Imagine that during this 100 years, there were severe depressions and wild booms, bitter wars and much peace, cruel droughts and good seasons too .... but always, absolutely always, at the end of each year, we always had more money than we started it with.

Now open your eyes. You’ve found it.

If you live in Australia, or Canada, or Britain, or the USA, or France, or any first world country, or in most of the others also, your country is it.

The figures over the last five years in Australia are given in the chart below.


At 30th June

Existing A$

Annual Increase




















(Reserve Bank of Australia 
Bulletin, March 1998)



The 1996-1997 increase was $31 billion. This was approximately $1,800 per Australian, and over $7,000 per family of four.

An Updating Insert:   The 2012 Reserve Bank Bulletin shows that 10 years later in 2007, the Australian dollars in existence (M3) was $960 billion; an increase of 199% in 10 years. By 2011 M3 was $1364, increasing a further 42%. By 2011 it had increased to 652.63% of what it was 19 years previously in 1992. One is left imagining that fact is stranger than fiction.


Imagination Number Two

Let’s try a little more imagination. This time it’s harder.

Let’s try to imagine where the $7,000 per family came from in 1996- 1997.

Imagine you’re looking under the bed at your place - and there it is, all $7,000. Now imagine your friends, one by one, and they’re looking under their beds too, and Hey Presto! Their households have each discovered $7,000 also. Imagine all the households in Australia. . . .

Before we go any further, unfortunately, we need to remind ourselves that the objective is to imagine where the $7,000 came from. How did the $31 billion get under our beds?

What we will need to imagine here, is the miraculous conception of money.

Now I find this very hard to do. And even when I do, somehow, envisage the spontaneous materialisation of money in space and time, and then open my eyes, it’s never there. So I can’t be sure that I really did imagine it.

It’s like this when you imagine it growing on trees, too!

So let’s “get real” about this imagining. Imagine a vast building, full of printing presses, that are thundering away, and imagine it’s called a Mint, and imagine that trucks are being loaded with printed and coined money and taking it to banks around the country for distribution.

Now open your eyes and scratch around in your pockets. So where did I put that $7,000 - must have had a heavy night?

If you’re lucky you’ll probably find at least some evidence that it was there once; a few scraps remaining. We’re getting better at imagining, aren’t we?

Now look at some facts:


Currency (Notes and Coins) in Existence 

At 30th June

Currency in Existence
(A$ Billions)

Annual Increase
(A$ Billions)




















(Reserve Bank of Australia 
Bulletin, March 1998)



The 1996-1997 increase was only $A1 billion. So we’ve still got to imagine how the other $30 billion of the increase in the money supply that year came into existence.

Lest the imagination boggle into overload, a little direction is helpful.

Let’s try imagining that your neighbours to the north and south are having a conversation in your presence. Mr South mentions that he is putting his motor vehicle up for sale. Mr North responds that he is interested in purchasing it, but that he will first need to speak to his banker for a loan. Later he informs you that the loan has been granted and you adjust yourself to the familiar vehicle going into the wrong driveway.

Now just imagine that the postman brings your monthly bank statement. You open it up and immediately see a debit for $20,000. You know you haven’t spent any such amount. You ring your banker in outrage.

Your banker says “Well, you know that a bank’s business is lending its deposits out at interest. ”

“Well, yes,” you say, “but what has this got to do with $20,000 of my money disappearing?”

“Well, this time, we’ve decided to lend out your deposit.” says the banker, “Your neighbour wanted a loan. ”

“No way! You put my money back immediately!” you bellow, “or I’ll take my money to another bank!”

Your banker is patient. He has this every day when he makes a loan.

“Try to be reasonable,” he says. “We’ve considered your interests in this. We could have lent your deposit to a perfect stranger, but we know you’re friendly with Mr North, and our bank likes to personalise our service. Personal service is our motto. Don't you trust your neighbour? You know he’s a good chap. So isn’t this a perfectly good arrangement? ”

“I can’t imagine anything worse!” you roar. “And furthermore, I’m taking my deposit to another bank!”

“That’s impossible” says the banker, “Your deposit is already in another bank. Mr South received it for his car, and he banks elsewhere. ”

“I never imagined that the banking system worked like that!” you sob.

“Oh, come now!” says the banker, "' we've been telling everybody for years, that we banks take in money on deposit, and then lend these deposits out at a higher interest. Don’t you believe us?"

For the first time in your life, you imagine that perhaps you don’t.

It gets harder. Where do you imagine that banks get the money they lend out, if they don’t take it from deposits, and they obviously don’t?

Almost no academic, no politician, and no financial journalist, or university economist and even few bishops, have ever been able to imagine it. This one’s up to you and me.

They create it!!

To imagine this, we have to:                                         

1.    Imagine that the postman didn’t come bringing the bank statement on which the bank reduced your deposit by $20,000. And he didn't.

2.    Imagine that the bank didn’t take anyone else’s deposit of $20,000 either. And they didn’t.

3.    Then imagine that Mr South’s deposit did increase by $20,000 when he was paid for the car. And it did.

Now it’s easy to imagine that the bank deposits of the world increased by $20,000, because they have.

Only if we can imagine the banks’ lending money they don’t have, can we imagine people getting deposits that didn’t previously exist.

At this stage, if the penny drops, most say “If this is true, I can't imagine how the banks get away with it!”

Can you imagine anyone launching an inquiry into an event, which they can’t even imagine has happened?

So now we can imagine how, if the banks lent $30 billion they didn’t have in 1996-1997, we’ve now got $30 billion in bank deposits that we didn’t previously have either. 

The borrowers of imaginary funds get real debts, and their payees get real deposits.

It seems that imagination murders mysteries. But there’s more.


Imagination Number Three

The next thing to imagine is the democratic distribution of all new money creations.

 To attempt this we suggest:

Imagine you are married, and have two wonderful children. Now imagine the postman comes again, bringing your monthly bank statement. But this time it’s different.

This time you are mortified to see that the bank has made a deposit of $7,000 into your account. You know that you’ve made no such deposit. You ring your banker.

He explains, “Government authorities have decided to increase the supply of money this year, by the same amount as in 1996-97.”

“In the past, of course, in return for creating additional money, we were allowed to own it. We would then find clients who were prepared to go into debt, and we would lend them this money we had created, at interest. ”

“This has now changed. The Reserve Bank has been directed by Government to create the $30 billion, and distribute it “democratically”, i.e., we’re all getting an equal share at the cost of its creation, which is nothing.”

Imagine how upset you’d be. “There's no such thing as a free feed!" you scream down the phone.

“We agree this is very upsetting,” says the banker, “so it’s been decided to assist those who feel this way.”

“Government has set up a special fund for conscientious objectors who don’t believe in something for nothing. If you register as one, they will send you an account for everything you receive for nothing. ”

“This will include the $7,000 of course. But there are other miscellaneous things too. Our records show that you haven’t paid anything for the invention of the wheel or the discovery of fire yet.”

“Then there's sunlight, of course. It’s quite expensive actually, what with the capital cost of building suns these days.”

“You don't seem to have invented any useful new words lately, so as you use the English language every day, there’s a charge for that.”

“Your share of the capital cost of building the earth, and creating the air you breathe, the moon, and space, and time, come to quite a bit also.

“So, with one thing and another, we'll be posting you a bill tomorrow for $365 trillion. This is only the initial payment of course, but don’t worry, you’ve got thirty days to pay.”

“Personally, I’d encourage you to pay it, because I know too well how getting something for nothing makes one feel uncomfortable, even guilty, and we don’t want that.”

So, as we couldn’t imagine a way to pay this account, we had to accept the fact of something for nothing, although we never lost the faith that it didn’t exist.

Unfortunately, after this, whenever we were all far too pessimistic to borrow any money and invest it, we got it in the post anyhow, so we couldn’t cause recessions or depressions any more. Nor, when we were wildly optimistic, did we get any extra money to speculate with excessively, so a mild type of boom became more or less boringly permanent.

With regular cheques for about $7,000 arriving each year for nothing, and what with Australia not having to annually go into debt for an additional $30 billion to get it, and falling prices because business had little in debt charges to recover, which made inflation a thing of the past, as you can imagine;

We all lived unhappily ever after.



If you’re a person who can imagine what the democratic distribution of money creations is, and can imagine its benefits and accept the good sense of it, and given a choice you’d consent to it, that’s not the end of demands upon your imagination.

What do you imagine we do about it? 

While I will suggest a couple of things, the worst thing I can imagine is trying to do your imagining for you.

You’ll need initiative to do something, but since all your initiative arises from your imagination, I’d only take your initiative away by doing your imagining of effective action.

Perhaps “don'ts” are safer.

1.   Don’t rush to the ends of the earth immediately, imagining that your own circle of people are inadequate to this great reform. Act locally. Nobody is more important than yourself and your friends.

2.   Don’t try too hard.  This is an endeavour to draw imagination out of your acquaintances, not push knowledge into them.

3.   Don’t imagine that some single organisation exists, or can be made to exist, to which you can enslave yourself to democratise money creations. Free yourself to support it wherever it offers.

An effective programme should include:

(a)      Encouragement to persist with the idea (to keep it in an imaginary prison under cross examination for as long as it takes) until your verdict of consent or rejection is clear.

(b)      Communicating your consent to democratise money to those in authority, whatever their attitudes.

(c)       Practising your consent-giving as opportunity arises or can be created.