International trade and Jack Iggulden’s IMPEX scheme
Editor
In 1996, Australian author John (Jack) Iggulden published a book [1] entitled Silent Lies: Things that you need to know that you weren’t ever taught. This book presents possible solutions to a range of problems associated with the Western industrial economic system. In particular, it discusses a balanced foreign exchange management system known as IMPEX, in addition to issues relating to foreign investment control, banking and monetary reform, prosperity support, work sharing, electorate power, population growth, and the impact of modern technology on the environment.
In addition to this book, a range of economic issues, including the IMPEX scheme, were discussed by Jack in The Promised Land Papers (3 volumes) [2], as well as in some essays on monetary policy which are available along with his voluminous memoirs in the archives of his writings held at the Thomas Cooper Library of the University of South Carolina [3].
Jack Iggulden had a long association with ERA, and his IMPEX scheme was adopted as an ERA-advocated policy during the 1990s. For three decades now, the complex of economic forces pushing for globalisation and capital mobility have been orchestrating what is often referred to as the neoliberal agenda and a planetary “race to the bottom”. This race takes the form of downward pressure exerted on wages, employment conditions, and environmental standards. A range of reforms are therefore needed in order to limit global capital movements to the extent required for balanced trade, and to restore comparative advantage as the primary driving principle of international trade.
In a nutshell, the IMPEX scheme requires each participating nation to operate a national trading currency facility (the currency unit is labelled IMPEX dollars), operating independently under the management of the central bank. All transactions involving international trade must operate via the IMPEX facility, and local IMPEX dollars will only be available to locally based traders.
According to Iggulden [1]:
“There would be an IMPEX market, where IMPEX drafts are sold at the current IMPEX market rate as establish- ed by free and open bidding, to those seeking foreign exchange overseas, …”
IMPEX dollars will be created locally when goods and services are exported, and exporters are free to change these IMPEX dollars into their local currency. These dollars will then become available for importers, who are obliged to buy the IMPEX dollars at the IMPEX exchange rate in order to purchase anything from foreign exporters.
The price of IMPEX dollars in each participating country will fluctuate, as will exchange rates between different currencies. If a country’s exports are high, then the price of IMPEX dollars will fall, making imports more attractive. And if imports are high, then the price of IMPEX dollars will rise, making exports more attractive. These dynamical processes will ensure that a country’s trade will be in balance (i.e. the balance of trade will be zero). And according to the sectoral balance equation (Lawn, 2013) [4], in such circumstances a central-government deficit (surplus) will always ensure that the private sector will increase (reduce) its net savings.
References:
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Iggulden, J. (1996), Silent Lies, Evandale, Bellingen.
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Iggulden, J. (1986-1993), The Promised Land Papers, Dominion Press, Maryborough
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Iggulden, J. (1983-2001) The Iggulden Papers, Cooper Library, Univ of S. Carolina
4. Lawn, P (2013), ERA Rev, v5, n5, 2013; p18
