Geoffery Ingham (2004) claims, “The scarcity of money is always the result of very carefully constructed social and political arrangements”. I claim that many of today's CC advocates pay insufficient attention to this political-economic construction and reinforcement of scarce money, leading to an idea of democratic money that fails to engage with the history of representative democracy, designed specifically to reinforce the existence of the capitalist economy (which is itself dependent on an idea of scarce money). To explore this claim, I look at the history of the political idea of democratic money, exploring the way in which the Greenback Part of the 1870's conceptualized democratic money and the version expressed by CC advocates today. How does today’s conceptualization of democratic money, presented by CC advocates, compare and contrast to this original claim to democratize money?

During the 1860’s and 1870’s, the Greenback Party argued that the Federal government had the right, and obligation, to issue paper money. This argument rested on the belief that an adequate supply of currency would enable the expansion of the economy and an increase in employment. The debate was triggered by the Federal government’s decision to print paper money and declare it Legal Tender in 1862. The Greenbacker’s argument rested on two concepts that challenged the central assumptions of mainstream monetary theory. The first dealt with the source of money’s value claiming, “we do not need gold or silver for money, or as a basis for paper currency. All the money we need is legal tenders issued by the government”. The claim that money’s value was the product of government’s actions was a direct challenge to bullionist ideas of intrinsic and alienated sources of money value. Secondly, in a direct challenge to the historical assumption that the source of money is inconsequential, they claimed that the source of money had direct distributive consequences. These two ideas led them to demand the democratization of money by retaining and rightfully claiming the government’s right to create money.  This line of thinking threatened the dominant ideas of money, and the Federal government, with the support of powerful banking interests, chose to reinforce the ideas of scarce and alienated sources of money, an essentially capitalist form of money. To do this the Federal government would instead focus on creating credit, leaving money and its source unquestioned and unchallenged. President Wilson in 1913 would claim to have created the “democracy of credit”, upon the creation of the Federal Reserve System.

Greenackers democratized money by placing the power to create money in the hands of government. The government and bankers, believed in the democratization of credit, focusing on the creation of credit and not money. For many CC advocates money is democratized through empowering individuals and communities to create their own money. These ideas about how to create money are critically different but all claim to be democratic.