The Monetary Economics of E.C. Riegel

Jon Matonis
4 min readApr 20, 2019

Originally published at The Monetary Future on September 9, 2009.

Edwin Clarence Riegel (1879–1953), generally known as E.C. Riegel, was an independent scholar, author and consumer advocate who campaigned against restrictions on free markets that harmed consumers and promoted an alternative monetary theory and an early private enterprise currency alternative.

The above photograph shows American mutualist Laurence Labadie with the libertarian monetary theorist, E.C. Riegel, outside the latter’s New York City home at 226 East 26th Street, November 14, 1948. Photo is courtesy of Labadie’s niece, Carlotta Anderson.

Riegel’s primary published works on monetary theory include Private Enterprise Money: A Non-Political Money System (1944), The New Approach to Freedom (1949), and Flight from Inflation: The Monetary Alternative (1978). As the publisher responsible for reviving many of his writings, Spencer MacCallum also prepared a detailed summary of Riegel’s thoughts on money.

The entire individualist anti-statist position from Pierre-Joseph Proudhon, Josiah Warren, Benjamin Tucker, and William B. Greene to the modern money theorists, Hugo Bilgram and E.C. Riegel, is inextricably linked to the insistence of competing money systems and the evolution of marketplace control over money, credit, and interest rates. Riegel anticipated Austrian economist Friedrich Hayek’s thinking that the separation of money and State also entailed the separation of the standard unit of value and the State. The non-Hayekian ‘libertarians’ persist in a dogged devotion to the gold standard, which Riegel believed was essentially a formula for a different brand of State-controlled money, run in collusion between ambitious State finance ministers and the major holders of gold, thereby tying currency to a gold price fixed by political agreement and made immune to the market adjustment process of a free market in gold trading.

With echoes of the late 19th-century standards battle between New York gold interests and the agrarian Free Silver Movement, Riegel’s valun system describes a voluntary banking association of private abstract standards based on goods and services (or labor) that they are being exchanged for, similar to a mutual credit system. Essentially, a greater number of choices in monetary standards will increase the dignity of the common man and the overall prosperity of the people. In extrapolating this mutual participatory banking system, I doubt Riegel would have advocated that the valun currency unit assume the new monopoly privilege barring other free enterprise entrants. Therefore, other private currency units would evolve naturally and they would be competing directly against the valun. This is where it gets interesting.

Although Hayek departed from some of his Austrian peers in turning towards a totally free market monetary system that may end up not being based on a 100% gold-backed monetary unit, his insistence on free banking and market-determined standards was unwavering. In the worldwide evolution of standards left free to develop unhindered, I maintain that a metals based monetary unit will tend to dominate in the race for nonpolitical digital currency adoption.

We can observe this today in the many digital currency companies jockeying for adoption and circulation. The digital gold currency issuers, as opposed to the digital fiat currency issuers, appear to have a distinct advantage in trust when the elements of jurisdiction and political risk are removed. Otherwise, why would e-gold have achieved such market dominance before being challenged legally by the U.S. authorities? The evidence to date is that online, cross-border digital currency users will gyrate toward objectively-measured value, such as gold, rather than abstract subjective value.

What Riegel did not foresee as possible in the 1940s was technology’s ability to permit competing non-State currency providers to issue online and beyond political boundaries. This is a paramount change to the money issuing landscape, not least of which allows for immediate convertibility, partial or full. Riegel’s market process for nonpolitical money is correct; however, the conclusions that he reaches regarding the separation of standard unit of value and the State are not realistic. The challenge for the community currency crowd is to demonstrate in practice how a valun or a local time-labor note will prevail over a metals-based currency unit in the digital world.

For further reading:
“The Legacy of E.C. Riegel”, Thomas Greco, September 7, 2009
“Monetary Theory of E.C. Riegel”, Christopher Quigley, March 6, 2007
The Money Changers: Currency Reform from Aristotle to e-cash, David Boyle, 2003
“Anarchy and Money”, Jon Matonis, December 15, 1984
Men Against the State, James J. Martin, 1953
Individual Liberty, Benjamin R. Tucker, 1926
Proudhon and His “Bank of the People”, Charles A. Dana, 1896
Hard Cash, Ezra Heywood, 1875
True Civilization, Josiah Warren, 1863
Our Mechanical Industry, As Affected By Our Present Currency System: An Argument for the Author’s New System of Paper Currency, Lysander Spooner, 1862
Equitable Commerce, Josiah Warren, 1852
Mutual Banking, William B. Greene, 1850



Jon Matonis

Chief Economist at Cypherpunk Holdings, Inc | Former CEO of Hushmail | Startup Team at VeriSign | Head of FX Trading at VISA