APPENDIX VAU: FLAXSCRIP AND HEMPSCRIP
Flaxscrip was first introduced into Discordian groups by the mysterious Malaclypse the Younger, K.S.C., in 1968. Hempscrip followed the year after, issued by Dr. Mordecai Malignatus, K.N.S. (In the novel, taking one of our few liberties with historical truth, we move these coinages backward in time and attribute hempscrip to the Justified Ancients of Mummu.)
The idea behind flaxscrip, of course, is as old as history; there was private money long before there was government money. The first revolutionary (or reformist) use of this idea, as a check against galloping usury and high interest rates, was the foundation of "Banks of Piety" by the Dominican order of the Catholic Church in the late middle ages. (See Tawney, Religion and the Rise of Capitalism.) The Dominicans, having discovered that preaching against usury did not deter the usurer, founded their own banks and provided loans without interest; this "ethical competition" (as Josiah Warren later called it) drove the commercial banks out of the areas where the Dominicans practiced it. Similar private currency, loaned at a low rate of interest (but not at no interest), was provided by Scots banks until the British government, acting on behalf of the monopoly of the Bank of England, stopped this exercise of free enterprise. (See Muellen, Free Banking.) The same idea was tried successfully in the American colonies before the Revolution, and again was suppressed by the British government, which some heretical historians regard as a more direct cause of the American Revolution than the taxes mentioned in most schdolbooks. (See Ezra Pound, Impact, and additional sources cited therein.)
During the nineteenth century many anarchists and individualists attempted to issue low-interest or no-interest private currencies. Mutual Banking, by Colonel William Greene, and True Civilization, by Josiah Warren, are records of two such attempts, by their instigators. Lysander Spooner, an anarchist who was also a constitutional lawyer, argued at length that Congress had no authority to suppress such private currencies (see his Our Financiers: Their Ignorance, Usurpations and Frauds). A general overview of such efforts at free enterprise, soon crushed by the Capitalist State, is given by James M. Martin in his Men Against the State, and by Rudolph Rocker in Pioneers of American Freedom (an ironic title, since his pioneers all lost their major battles). Lawrence Labadie, of Suffern, N.Y., has collected (but not yet published) records of 1,000 such experiments; one of the present authors, Robert Anton Wilson, unearthed in 1962 the tale of a no-interest currency, privately issued, in Yellow Springs, Ohio, during the 1930s depression. (This was an emergency measure by certain local businessmen, who did not fully appreciate the principle involved, and was abandoned as soon as the "tight-money" squeeze ended and Roosevelt began flooding us all with Federal Reserve notes.)
It is traditional among liberal historians to dismiss such endeavors as "funny-money schemes." They have never explained why government money is any less hilarious. (That used in the U.S. now, for instance, is actually worth 47 percent of its "declared" face value). All money is funny, if you stop to think about it, but no private currency, competing on a free market, could ever be quite so comical (and tragic) as the notes now bearing the magic imprint of Uncle Sam-and backed only by his promise (or threat) that, come hell or high water, by God he'll make it good by taxing our descendants unto the infinite generation to pay the interest on it The National Debt, so called, is of course, nothing else but the debt we owe the bankers who "loaned" this money to Uncle after he kindly gave them the credit which enabled them to make this loan. Hempscrip or even acidscrip or peyotescrip could never be quite so clownish as this system, which only the Illuminati (if they really exist) could have dreamed up. The system has but one advantage: It makes bankers richer every year. Nobody else, from the industrial capitalist or "captain of industry" to the coal-miner, profits from it in any way, and all pay the taxes, which become the interest payments, which make the bankers richer. If the Illuminati did not exist, it would be necessary to invent them-such a system can be explained in no other way, except by those cynics who hold that human stupidity is infinite.
The idea behind hempscrip is more radical than the notion of private-enterprise currency per se. Hempscrip, as employed in the novel, depreciates; it is, thus, not merely a no-interest currency, but a negative-interest currency. The lender literally pays the borrower to take it away for a while. It was invented by German business-economist Silvio Gesell, and is described in his Natural Economic Order and in professor Irving Fisher's Stamp Script.
Gresham's Law, like most of the "laws" taught in State-supported public schools, is not quite true (at least, not in the form in which it is usually taught). "Bad money drives out good" holds only in authoritarian societies, not in libertarian societies. (Gresham was clear-minded enough to state explicitly that he was only describing authoritarian societies; his formulation of his own "Law" begins with the words "If the king issueth two moneys…," thereby implying that the State must exist if the "Law" is to operate.) In a libertarian society, good money will drive out the bad. This Utopian proposition-which the sane reader will regard with acute skepticism-has been seen to be sound by a rigorously logical demonstration, based on the axioms of economics, in The Cause of Business Depressions by Hugo Bilgrim and Edward Levy.*
* Economists can "prove" all sorts of things from axioms and few of them turn out to be true. Yes. We saved for a footnote the information that at least four empirical demonstrations of the reverse of Gresham's Law are on record. Three of them, employing small volunteer communities in frontier U.S.A. circa 1830-1860, are recorded in Josiah Warren's True Civilization. The fourth, employing contemporary college students in a psychology laboratory, is the subject of a recent Master's thesis by associate professor Don Werkheiser of Central State College, Wilberforce, Ohio.