The book being reviewed here is Money A Mirror Image of The Economy, the second edition, copyright 2009 by J. W. Smith. Somehow along the way, Joseph W. Smith decided that he could evade expectations of truth and accuracy by someone familiar with monetary reform and economic history. I expect that what few academics there are that have an established interest in this domain will simply ignore his nonsense. The positivistic material coming out of major name university economics departments is bad enough by the courtier service they provide. It is through the groveling required, typically to gain peer recognition among other grovelers toward first securing a teaching job, and then to secure tenure. Perhaps the theo-classical economists would modify their faith based economics if they were accused of endangering the general population, or if they actually would be held responsible for the outcomes of their policies. It seems very parallel to shouting "fire" and causing people to be hurt by the panic, for which people can be arrested. Similarly, telling people to be calm and stay the course when the theater or communities are on fire really isn't much different. Both should be at least subjected to public ridicule. My perspective is as a non-academy based intellectual who is sincerely concerned about economic literacy, and thereby also advancing economic democracy. Smith's book is particularly offensive. If his goal was to advance authentic monetary reform and economic literacy, then there is no reason to regard the domain with the level of contempt that he has demonstrated toward facts and critical thinking. Even so, I have hope for those who have been exploited and diverted as a result of their naiveté.

Smith's Perception Management
Smith has claimed to have received his PhD from the Union Institute and University in Cleveland. The odd detail here is that there has never been a branch of the Union Institute and University in Cleveland, I checked. The main campus/office for the Union Institute and University is actually in Cincinnati, Ohio. I called and talked with the registrar's office and they do have a record of a Joseph W. Smith receiving a PhD in 1994, with the dissertation domain being described as "environmental political economics." Both of his dissertation committee members had Phd’s in political science. Apparently, they had no reasonable familiarity with economics at all, except no doubt a concern for cashing their paychecks for services rendered. Mr. Smith now presents himself as being an "economist," though his degree seems to be vague to the extreme and he shows little serious interest in actually knowing the material about which he has chosen to write this book, monetary reform.

He claims to have been strongly influenced by Henry George, but I see no evidence of that in the section that addresses monetary issues. He does use a few terms which George used, but he seems to have redefined them. Given the hash that he has made of monetary and economic history, his lack of understanding of these areas does not reflect favorably on Henry George or the Georgists who have validated Smith's license to exploit Henry George's legacy. If his material was well researched and supported, there really would not be much of a problem, or even a need for "perception management," as he describes it. There is a short discussion about "perception management" that has been inserted into the text that is used by Smith as an explanation of the conformity and complexity of economics. Smith obviously places himself as contrary to the more typical take on economics, which never seems to get around to dealing with the real problems experienced as part of economic life. This one of his earliest broad generalizations. I believe that this digression was intended as a posed distancing in advance of his own perception management.

This is his attempt at validation by dis-association, which will be attractive to most people who picture themselves as being "progressive." Instead, I must insist that it is also a description of what he does through his entire book. After understanding that his entire book is filled with lies and misrepresentations, you will perhaps understand that his book is entirely about perception management.(pp 4-5). So rather than being the iconoclastic truth-teller, he is extending the same process of dis-information and perception management. The difference is that this book is designed to entrap illiterate, wannabe progressives and liberals. In this case by him pointing at others, he has also drawn attention to himself. Relative to the established theory of technological assimilation when worked to prevent the adoption of an idea or a perspective, it is the early adopters and the early majority adopters which need to be targeted to confuse and dis-inform. The proof of this is in the massive disinformation and lies that follow his attempted deflection.

Most of the difficulties with contemporary academic economics is due to the patronage and influence of the banking trade association also known as the US Federal Reserve. Because of this influence there is little space in the economics curriculum for monetary issues except in a very marginal way, and there is rarely any serious discussion about the need for monetary reform. Add an excess measure of positivistic pseudo-science and pompous oration, and the process will soon resemble a theology complete with unintelligible incantations. By the resulting low level of public economic literacy, which also seems intentional, the possibility of an informed public discourse about monetary policies has been substantially reduced. This creates a context which is a magnet for fraud relative to stock brokers seeking commisions, personal finances, public economic policies, and in particular monetary reform. One variety of this chaos is charitably described as "pop-economics," which is often only a caricature of the academic and "professional" level of the domain. Money the Mirror Image of the Economy is quite near the bottom of that barrel. In my opinion, Smith's perception mis-management should be taken equally seriously, not less seriously, because it is directed to a popular audience.

The Abuse of Economic History
In abusing economic history apart from errant interpretation of US monetary legislation, Smith tends to broad generalizations that confuse the process. He states that "Money is a social technology discovered over 5,000 years ago. " (p.3) There is little argument that money is a social technology, but relative to how money is currently defined, it is usually described as having "evolved". There was no identifiable period in which Dr. Ugg turned over a rock and discovered "money." Though Smith doesn't reference it, there was an archaeologist who claimed that an accounting method of recording trades was equivalent to "money." Attempting to use this as a definition of money, in the modern sense, just scrambles any related discussion. The modern definition of money is "That Which Is Necessary To Pay Taxes.." Money is a social technology which is created and recognized by institutions of governance.

On page 12, Smith makes the statement "Classical monetary theory is silent on the enormous potential for created money..." Aristotle, Solon the Great, David Hume, and others understood that money was a institution created by law. It was actually the classical economists of Adam Smith, David Ricardo, Thomas Malthus and the "neo-classical" economists which treated money as if was a commodity only. So Smith is using another grand generalization and doesn't seem to know much about the topic, or he was referring "classical" and "neo-classical" economists primarily, and then ignoring those who don't fit within his generalization.

Also on page 12, he demonstrates that he doesn't understand much about societal change at all, when he declares "Societies do not transform incrementally, necessary occurs in revolutionary leaps." This is another fiction, though a popular fiction, whose lineage goes back to the aggrandizement of the feudal order, and was in effect an early product of the public relations publicist, the precursors of Edward Bernays, by way of "perception management." There are numerous historians currently, and even sociologists who suggest that the only way societal and even technological change happens is by increments and cultural change precedes the more noticeable milestones and white knights charging past, for instance Christopher Hill, E.P. Thompson, Dan Foss and Ralph Larkin, Peter Linebaugh, and others.

On page 14 he reduces much of 10,000 years of human history into the span of a few sentences, as a rear view mirror summation of how we arrived where we are now, relative to the "primary cause of poverty" was "the establishment of property rights ." Toward more accuracy, in my opinion, Smith should direct attention to the late feudal era when the rights of rentiers, the elimination of property rights by occupation in commons, and the establishment of property rights by royal grant, deed, and by hedging were established. I expect that Henry George would strongly agree. Another sweeping generalization is found in the muddling of the definition of currency. On page 24 he declares that "the secret of creating money was first learned by goldsmiths." This a fairly popular statement, but on closer inspection it does not have much merit. About 1500 years previously, the money changers were well established at the great temple in Israel, and they were busy making profits in the money speculation process. Thereby they were creating money or profits from monetary exchanges.

What the goldsmiths did was to establish the use of paper gold receipts as currency. Gold receipts were not usable for the payment of taxes. This fraudulent practice was later accepted and made part of the banking franchise, as the fractional reserve process. It was when bank currency was established as legal tender and expected in the payment of taxes, that bank currency became money. This practice also morphed from the creation of debt-based currency into debt-based money. And this does not even address the confusion he has injected into his text through using other poorly defined terms, including accepting an acknowledged poor definition because it was "easier to visualize, and then there is his avoidance of the use of the standard descriptions of different types money, M0, M1, M2, and M3.

The Abuse of US Monetary History
On page 26 Smith sums up about 80 years of monetary history into a few sentences as a rationalization for the establishment of the US Federal Reserve. Perhaps not uncoincidentally, this is very similar to one of the main rationalizations for the deliberation which ended in a choice between the Aldrich Act supported by the Republicans, and superficially by the banking trade associations, and then the Owen Glass Act, as promoted by the Democrats. Both pieces of legislation were identical in their intended effect. The whole process was scammed, including President Wilson being recruited, and whose political campaign was largely funded by the the banking interests. Wilson was explicitly instructed to sign the supposed monetary reform legislation. The number of banking panics which led to this were caused by the specie nature of the currency at that time, particularly before the issuance of the US Greenbacks and after the passage of the Specie Payment Resumption Act passed in 1879, which removed US Greenbacks from circulation. The rationalization that Smith uses is very close to the one that was used by the banking interests, in advocating for the privatization of monetary control and regulation.

The period known as the US Free Banking period extended from 1836 to 1861, and had the most intense period of banking frauds occur up until the present time. The National Banking Acts of 1863-64 eliminated currencies issued by state-chartered banks, by applying a ten percent tax on transactions using currencies used by those banks. The point here is that Smith doesn't have any idea what he writing about, and the notion that because he cites legislation which established banking related laws does mean that his interpretations are right. Given what I have found, I would guess that Smith is only incidentally correct maybe 20% of the time or less. Because of the wide difference between his "fictions" and fact, it is very obvious that it is quite intentional on Smith's part, and that he assumed that no one reading his book would either know he was lying, or be willing to go to the effort to verify his references. Smith ends up praising the Owen Glass Act, which established the privately controlled US Federal Reserve, which is particularly strange, given that most monetary reform advocates including the Georgists, for example Robert De Fremery, agree that it was a very, very bad piece of legislation in terms of its effect upon the US economy. Smith's pseudo-analysis as presented in his book would place him as opposed to most respected monetary reform advocates, and for that matter most honest economic historians.

On page 27, he makes a similar set of erroneous claims of the assignment of the "authority to create money to the Board of Governors of the US Federal Reserve" by Franklin Roosevelt, which was actually made in the the Owen Glass Act, about twenty years earlier. Roosevelt's monetary policy legacy is actually quite different than as characterized by Smith, but then most readers won't even know that they are being lied to. The same sort of disinformation is applied in his use of the The Depository Institution Deregulation, and the Monetary Control Act of 1980 is similarly abused and misrepresented. This ploy of mentioning legislation is intended to impress people who are naive, already confused, and in doubt of their comprehension of what he is presenting, and that is a quite intentional piece of perception management.

The Abuse of Definitions and Citations to Other Sources

Later beginning on page 27 and onto page 28 he refutes the description of how money functions in a banking system as described by "Modern Money Mechanics" (MMM). MMM was produced and distributed by the US Federal Reserve Bank of Chicago, copyrighted in 1962 and still available on the internet. Its content is well respected by most monetary economists. Again, for reasons of his own perception management. The errors claimed by Smith to have been done by the US Federal Reserve Bank of Chicago, are actually his. He runs out a list of well known authors on the topic of monetary history and policies, and if I had all of those sources close at hand I could prove the opinions of those authors that he cites would validate MMM and well recognized economic historians. I have already consumed well over a solid week of my time disclosing his evasions and lies. It is simply not my responsibility to re-write a very poorly written book whose primary basis for organization seems to be perception management. The quote supposedly from President Abraham Lincoln on page 34 entitled Monetary Policy (1865) is a fabrication though extrapolated from Lincoln's policies and personal political affiliation with Henry Clay, and originates from a Canadian monetary reformer by the name of Gerald McGreer. He also redefines all sorts of other established monetary concept for his own convenience. There are some valid sections recounting monetary concepts and economic history, but it is mixed with such a huge quantity of fabrications and substantial deviations that it is just not worth the effort to sort and correct the errors.

He later advocates for an international reserve currency, but other than a mis-used quote from Michael Hudson about the Euro (bottom of P13), he shows no apparent knowledge at all of the 1947 Bretton Woods Accord, or of the history of that agreement as it devolved. Even when he seems to pose what he claims is an innovation of dual currency systems, both in specific reference to China and, more generally, he does not demonstrate that he even knows his material. The Bancor was first suggested by John Maynard Keynes, and more recently Zhou Xiaochuan, as the governor of the central bank of the People's Republic of China has recommended that Special Drawing Rights(SDR) be adopted as an international trade currency, based upon a basket of currencies. Smith's attempt to use China's currency policies as a validation of his delusion of a dual currency process is flatly wrong. What Smith has described as a dual currency system in China, is simply a very rational response by China to exclude the effects of foreign currencies upon a sovereign economy, sometimes described as imperialism. The SDR that Smith also refers to as a dual currency system will be based upon multiple sovereign currencies, and thereby does not represent specifically a dual currency system.

Even where he cites William Grieder's The Secrets of the Temple on page 33 to reference Smith's claim that the US Federal Reserve is federally owned, the actual passage documents exactly the opposite conclusion. Effectively, Smith is attempting to leverage his own scheme of disinformation upon the solid credentials of a well recognized writer on these topics. When Smith cites legislation related to monetary issues, you need to actually go and locate the text of that legislation. You will find that most of the time he is lying about the meaning of that legislation. He also likes to cherry pick through economic history to pretend to prove his assertions.

A Quick Exit from the Hall of Funhouse Mirrors

Being able to realize this level of fraud require a deeper knowledge of economic theory and history. He also comes up with his own ideas which are contrary to most legitimate treatment of monetary history and reform. His definition of money is based upon the assertion that his is easier to visualize, than how it is described in Modern Money Mechanics, or by legitimate authors on the topic. He also references other self-published books which make those references close to impossible to check, this includes authors that distribute through his website which makes for a cozy clubhouse, but not a credible and open discourse. When he does reference recognized authors such as William Grieder, the passage has no supportive value for the material written by Smith. Most readers will not have the background or immediately available resources to verify his references, and he relies on that lack of knowledge to sell his baloney scented his snake oil.

If you are serious about wanting to know more about monetary reform, I strongly urge you to visit the American Monetary Institute web site and read the articles and book reviews there FOR FREE, and then maybe attend one of their annual conferences. If you want more material FOR FREE also visit the Re-Imagining Economics Website at http://www.economics.arawakcity.org I can be contacted through that website to answer additional questions. If you spend a bit of time investigating the history of dis-information efforts that have been used to confuse the public during times when monetary reform was being discussed nationally, I think that you will realize the similarity to Smith's "perception management." His disinformation is a caricature upon the caricature of the nonsense strung together to validate free market economics, which has delivered the current economic collapse. This book is worse than a serious waste of paper, it is effectively promoting dis-information and the effect of which will to disable an informed public dicourse, which is also a major intention of theo-classical economics.