Today, out of curiosity, I asked Copilot this question:

“How would E. C. Riegel organize the exchange of value among producers and intermediaries in the distribution process?”

Here is Copilots’ surprisingly accurate response to that question. It is, in effect, a brief summary of his book Private Enterprise Money.

E. C. Riegel envisioned a radically decentralized and voluntary system of value exchange that bypassed both government-issued money and centralized banking. His proposed framework, known as the Valun Exchange System, was designed to empower producers and intermediaries to coordinate trade through a self-regulated, non-political monetary mechanism.

Here’s how it would work in practice:

1. Voluntary Association of Producers: Producers and intermediaries would form a cooperative network called a Valun Exchange. Membership would be voluntary and based on mutual trust and creditworthiness.

2. Private Credit as Currency: Instead of using state-issued money, members would issue credit to one another in the form of Valun units. These units would be backed by the members’ productive capacity and promises to deliver goods or services—not by gold, fiat, or government decree.

3. Accounts, Not Cash: Transactions would be recorded as debits and credits in members’ accounts, similar to a mutual credit system. No physical currency would be needed; the system would operate through bookkeeping entries.

4. Intermediaries as Facilitators: Distributors, wholesalers, and retailers would participate as both buyers and sellers, using their Valun accounts to settle transactions. Their role would be to facilitate the flow of goods, not to extract value through speculative finance.

5. Self-Limiting Credit: A member’s ability to issue credit would be limited by their past performance and the confidence of the network. This would prevent inflation and ensure that credit was grounded in real economic activity.

6. No Interest, No Taxes: Since the system was private and voluntary, it would not involve interest-bearing loans or taxation. Riegel believed this would eliminate many distortions in the traditional monetary system.

In essence, Riegel’s model treated money not as a commodity or a government tool, but as a social contract among producers—a means of measuring and facilitating exchange based on trust and productivity. It was a bold attempt to return the power of money creation to the people actually producing value.

If you’d like, I can sketch out a visual flow of how this system would operate among producers, intermediaries, and consumers.

To that offer, I answered, “yes,” but in successive attempts Copilot failed to produce an accurate flow diagram. I have for many years been using my own diagram of credit flows in mutual credit clearing systems. Here it is below. If you substitute the word “valun” for “Currency vouchers,” this diagram shows exactly what Riegel was describing:

The “Trusted Producer” depicted in the upper right begins the process by using their line of credit to purchase something for an employee, supplier or contractor. Those credit vouchers then flow in the numbered sequence, the final step being when the Trusted Issuer accepts them back in payment for the goods or services they sell, thus completing the circuit of reciprocity. Note that at each step of the way, goods and services are circulating in the opposite direction to the voucher credits (or valuns).

I then pointed out to Copilot that it had failed to specify the units in which valun credits were to be denominated. This was its response:

Great point, Thomas. Riegel proposed that all debits and credits in his system would be denominated in a unit called the Valun—short for “value unit”. This was not just a name, but a deliberate attempt to establish a new standard of value independent of national currencies and political influence.

At the system’s launch, the Valun was intended to be roughly equivalent in purchasing power to the U.S. dollar, simply to ease adoption and pricing familiarity. However, over time, its value would be maintained internally by the productivity and trustworthiness of the network’s members, not by fiat or commodity backing.

So, in essence, every transaction—whether between producers, intermediaries, or consumers—would be recorded in Valuns, making it a closed-loop accounting system grounded in mutual credit and real economic activity.

Would you like a breakdown of how Valun pricing might work in practice, or how it could be stabilized over time?

I already knew how Riegel proposed to stabilize the Valun pricing unit, and I am not satisfied with it being adequate. I make my case in a document which Copilot cited as a source; it is contained in a previous post to my website, E. C. Riegel’s Valun Mutual Money Plan, but the reference was to a site other than my own. It would be better to read the original post on my site. That post contains the full text of the Valun Mutual Money Plan, together with my comments and critique. I believe that serious students would do well to read it.