# 11 / 2016

The Empty Promises of the «Sovereign Money Initiative»

Land of milk and honey

The «Vollgeld Initiative»

In Switzerland anyone can propose changes to the constitution by collecting 100’000 signatures. In December 2015, the «Vollgeld Initiative» (full title: «Initiative for crisis-proof money: creation of money by the Swiss National Bank alone!») was submitted. Literally translated, «Vollgeld» means «full money» in English and has the same meaning as «Sovereign Money».

What are the aims of the initiative?

The authors of the initiative promise a rosy future for Switzerland: sovereign money means that deposits on domestic accounts would at last be absolutely secure. Tax payers and the real economy would benefit from the seigniorage. Financial bubbles and bank runs could be prevented and the government would no longer be compelled to rescue banks that have run into difficulty. The finance sector would again be at the service of society, and the monetary and banking system would no longer be a closed book, but instead would at long last be understandable for everyone again. In other words, the initiative promises to make Switzerland a land of milk and honey again.

As is so often the case with moves aimed at radically improving the world, this initiative, too, glorifies the potential benefits while ignoring the associated major drawbacks and risks. It is supported by Monetary Modernisation (MoMo), an organisation based on the ideas of German economist and social scientist Joseph Huber. Its backers include several well-known critics of the growth system, as well as a notably large number of players from Germany. Like the initiative calling for an unconditional basic income which was rejected by a clear majority in June 2016, it appears that, here too, an international organisation wants to put an ideologically-based concept to the test in a direct democracy.


The term «seigniorage» is derived from the French word «seigneur» (feudal lord). It is a reference to an era in which the right to mint coins – originally granted by the king – was assigned to feudal lords (sovereign right of coinage), who were able to siphon off the gains resulting from the difference between the value of the metal and the nominal value of the coins brought into circulation. Today, it is a more general term that refers to the gains that result from the issue of money by a central bank.