Various readers and non-readers of Private Enterprise Money have likened the valun system of private enterprise money to the plans of Proudhon and Greene. I would like to make the distinction clear.

Proudhon, who saw clearly that it is the labor of the people that gives substance to money, proposed a mutual credit plan for the issuance of bills of exchange in terms of the franc. Greene, the American Proudhon, proposed a mutual credit plan for the issuance of currency bills in terms of the dollar. There have been other mutual credit plans, usually called Giro plans, in Europe. All these accept the political monetary unit and make no effort to limit the government's issue power. They are aimed at escape from the restrictions and impositions of the banks, but not the perversions of government.

A mutual money plan, to be successful, must be restricted to private enterprisers (employers, employees, and self-employers) so far as issue power is concerned, because they both buy and sell and, thus, redeem as well as issue. Any mutual credit plan can be perverted and ultimately ruined if the government is given the issue power.

Under the valun system, governments—national, state and local—would be entitled only to class B membership, thus limiting them to drawing against a credit balance, whereas all private enterprisers would be permitted to draw against a debit balance, the only method by which money can be created.