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The German economist Silvio Gesell is not very well known in wide circles today, but meanwhile the famous British scientist John Maynard Keynes argued: “I am convinced that the future will learn more from Gesell than from Marx.” Gesell is not just a theorist, the author of the original reform of the financial system - his idea of free money, repeatedly and successfully tested in practice, provides a very real opportunity to change this world for the better.
http://piratemedia.net/svobodnye-dengi-silvio-gezellya
Johan Silvio Gesell was born on March 17, 1862 in the city of St. Vith (now in Belgium) in the family of a Prussian father and a Belgian mother. In 1887 he moved to Argentina, to Buenos Aires. By this time, he had already become a successful businessman and was running a joint business with his brother. The economic crisis of the late 1880s, which had a very significant impact on Argentina, made Gesell interested in socio-economic and financial issues, in particular the problems money circulation. In 1891, Silvio Gesell published his first work on this topic in Buenos Aires, entitled “Monetary Reform as a Path to a Social State.” Later, his work “Nervus rerum” was published, and then a number of books and articles devoted to financial and economic topics. In 1906, Gesell retired and moved to Switzerland. The first part itself famous work Gesell's “Exercising the Right to Full Time Work” was published in 1906 in Switzerland, and the second was published a few years later in Berlin under the title “The New Doctrine of Interest.” Both parts were published together during the war, in 1916, and went through six editions during the author's lifetime. This work is best known in English translation entitled "Natural Economic Order". Silvio Gesell constantly moved between Switzerland, Argentina and Germany. At one time he lived in the vegetarian commune "Obstbausiedlung Eden", founded by the famous German economist and sociologist Franz Oppenheimer in Oranienburg, near Berlin. In 1909, Gesell's comrade Georg Blumenthal created the "Association of Physiocrats" - an organization of supporters of Gesell's theory of free economics, which attracted its members from the ranks of land reformers, individualist anarchists and syndicalists in Berlin and Hamburg. The association published the journal Physiocrat, but with the outbreak of the First World War this publication fell victim to censorship. Silvio Gesell moved to Switzerland, where he had many supporters in local progressive circles. They created an organization called the Federation of Swiss Free Land and Free Money. Giving lectures, Gesell detailed the significance of his reform proposals as a path to social justice and peace. After the end of World War I and the 1918 revolution in Germany, Gesell was invited to head the People's Commissariat for Finance in the first Bavarian Soviet Republic. True, he did not stay in this position for long - only 7 days. Gesell prepared a law on the introduction of free money in accordance with his theory, but did not have time to apply it in practice - the Bavarian Republic was defeated. After her overthrow, Gesell was accused of treason, but was subsequently found not guilty of all charges. Silvio Gesell later settled near Berlin and devoted his life to literary activity and promoting his ideas, observing with interest and commenting on the development of the Weimar Republic in numerous articles. Silvio Gesell died on March 11, 1930 in Oranienburg.
Gesel's main merit lies in the fact that he truly formulated revolutionary idea"natural economic order".
In his opinion, the cause of economic crises and social inequality lies in the incorrect monetary circulation system. Gesell argued that the growth of real capital is inhibited by the monetary rate of interest. Back in 1918, after the end of the First World War, Gesell wrote a truly prophetic letter to the publisher of the Berlin newspaper Zeitung am Mittag: “Contrary to all hopes for a better future, I must say: if the current monetary system retains the interest economy, then I dare to assert today that in less than 25 years we will be faced with a new, even more destructive war. I see the development of events very clearly. Today's technology will allow the economy to quickly reach its highest productivity. Despite significant losses in the war, there will be a rapid formation of capital, which, due to excess supply, will reduce interest rates. Then the money will be withdrawn from circulation. This will lead to a reduction in industrial production, armies of the unemployed will be thrown onto the streets... Wild, revolutionary sentiments will awaken among the discontented masses, and the poisonous shoots of super-nationalism will again break through. Neither country will be able to understand the other anymore, and the end can only be war.”
Gesell noted the contradictory, dual role of modern money. On the one hand, this is an indispensable means of payment for ensuring economic activity, on the other hand, is an instrument of power that provides the opportunity to dominate the market. Therefore, it is necessary to overcome the property of money as a usurious instrument of power, while maintaining its positive quality as a neutral means of payment. To do this, it is necessary that money become “just a means of exchange and nothing more. Their function is to facilitate the exchange of goods... Barter was unreliable, expensive, associated with difficulties and very often stopped altogether. Money, replacing barter, provides reliability, increases and reduces the cost of exchange of goods. That, in fact, is all we need from money.
A certain level of reliability, the speed and cheapness with which goods are exchanged - all this is a test of the usefulness of money. Karl Marx believed that the root of evil lies in surplus value, and to restore justice it is necessary to withdraw this value from one class in favor of another. For Gesell, "evil" lay in the credit nature of money, and a necessary condition to restore justice is its liquidation.
Silvio Gesell put forward the idea of Freigeld, a truly revolutionary idea for his time - “free” (more precisely, “freely distributed”) money. He believed that it was necessary not only to deprive money of its ability to generate profit through interest, but that money itself should be subject to interest. In other words, there must be a charge for using the money.
The advantage of free money is its payback due to taxes, but another thing is more important - the regular expiration of such money sharply increases its turnover. According to Gesell, money is also a kind of commodity, “a product for constant exchange,” which means, like any other commodity, money must lose its value over time. In this case, people will strive to get rid of them as quickly as possible.
“Only that money that becomes unusable, like yesterday’s newspapers, like last year’s potatoes, like a piece of iron that has lain in the ground for a hundred years, can be real money, i.e., a tool for exchanging those same newspapers, potatoes, iron, etc. d. Because no one will distinguish such money from the actual goods that a person consumes, no one will in any way distinguish it as something better. Nobody: neither buyer nor seller. And then, and only then, will money become what it is in itself pure form: a means of exchange, an assistant in the exchange of goods. And then no one will feel like a RULE simply because they have money.”
Thus, according to Gesell, the main task is to make money as perishable as goods.
Sellers of goods are interested in only one thing - how to sell them as quickly as possible, which means it is necessary to establish the same conditions for the owners of money, so that they also rush to get rid of them as soon as possible. It is known that the new is the well-forgotten old, and Gesell’s free money in this sense was no exception. More precisely, we're talking about about the practical side of the issue. Peculiar analogues of free money were used many centuries ago. For example, at the end of the 10th century in England, coins were minted every six years, while the royal treasurers gave only three new coins for four old ones. This was equivalent to a 25% tax every six years, or approximately 0.35% per month. Thus, the new coinage was a kind of “storage fee”. From the 10th to the 15th centuries, a kind of free money, the so-called “bracteates,” was in use in Germany, Hungary, Switzerland, Bohemia, Poland and Scandinavia. They were issued by cities, bishoprics and even individual feudal lords. Bracteates served not only for the exchange of goods and services, but also as a means of collecting taxes. They served exclusively the local market. Once a year, bracteates were taken out of circulation and replaced with newly minted ones. At the same time, the money was devalued by 25%, and this quarter was withheld as a “coinage tax.” Naturally, people sought to get rid of such coins as quickly as possible, preferring to invest their savings in works of art, beautiful furniture, good-quality houses - in everything that had a stable or increasing value over time. It is not surprising that it was during this era that many masterpieces of architecture and wonderful works religious and secular art.
By the 15th century, bracteates were replaced by the money we were used to, which did not depreciate. Interest began to be charged again, and more and more wealth began to be concentrated in the hands of fewer and fewer people - with all the social and economic problems that entailed.
Gesell's work is particularly interesting because it contains specific practical recommendations. He proposed issuing new, “free” money (Freigeld) in the form of 1, 5, 10, 20, 50 and 100 dollar bills (the same for the French and Swiss francs, the German mark, etc.). In turn, special stamps should be sold through the country's post offices at prices of 1, 2, 5, 10, 20 and 50 cents. In order for a banknote to be “in working order”, its owner must affix the appropriate stamps to it weekly. Thus, “free” money will lose part of its nominal value every week - this is approximately 5% per year. The cost of losses is borne by the owner of the note. For example, over the course of a year, a $100 bill would have 52 stamps worth 10 cents each (a total of $5.20) attached to it, or in other words, that $100 bill would lose 5.2% of its face value over the course of a year. Naturally, every person will strive to get rid of such money as soon as possible - make purchases, pay off their debts, pay someone for work, put this money in a bank, or will offer it to someone as a loan, and under preferential conditions for borrower. In this case, it will turn out that money will be forced to constantly circulate, and not accumulate somewhere.
According to Silvio Gesell, “The purpose of introducing free money is to destroy the unfair privileges of current money. This dishonesty lies entirely in the fact that our traditional form of money has one indisputable and everlasting advantage over goods, i.e., that money is “eternal.”
Instead of the issuing bank, the right to issue money rests, according to Gesell, with the National Exchange Regulatory Office, which monitors the daily demand for money. The national office does not conduct any banking activities, does not buy or sell bills, and has no connections with individuals. It only issues money when the country needs it and destroys money when there is a surplus.
Despite the fact that Silvio Gesel was virtually self-taught, his ideas were recognized not only by thousands of followers, but also by such prominent specialists in the field of monetary theory as Irving Fisher and John Maynard Keynes. In particular, Fisher wrote in his 1933 work “Brand Certificates”: “Medicine owes much to untrained minds, at least to minds untrained in medicine. Even Pasteur, being a professional scientist, was not a doctor, but the laryngoscope was improved, many claim - even invented - by a prominent spanish singer Manuel Garcia. The recently deceased Silvio Gesell was a German entrepreneur and quasi-economist. He lived in Argentina and wrote many of his works in Spanish. In 1890, while in Argentina, Gesel proposed replacing money with “stamp certificates,” the same ones that are now so widespread in our country...”
Gesell's theory is of interest not only from an academic point of view. Perhaps more important: many of his ideas were put into practice, and some of these experiments turned out to be very successful. It is worth noting that all practical attempts to implement the idea of free money initially acted not as an alternative to the global financial system, but as a local initiative designed to make life easier for a local community, town or city, or at most a district or region. As a rule, events developed according to the same scenario: after the introduction of new money, unemployment disappeared within a few months, tax collection increased, there was a general increase in municipal activity and local trade, and most importantly, the shortage of real money disappeared. As news of the success of the reforms spread throughout the area, neighboring municipalities and communities also declared their desire to introduce free money. And as a result - a logical result: the national Central Bank intervened in the course of events and, under one pretext or another, prohibited the experiment. This is exactly what happened in Germany and Austria - in particular, in the small Bavarian village of Schwanenkirchen, whose inhabitants lived in the early 1930s. lived hand to mouth on unemployment benefits. In 1931, temporary money, the so-called wära, was introduced in the village. The initiator of the experiment was the owner of the coal mine, Max Hebecker. Every two weeks a stamp had to be affixed to one wära (hence the name - stamped money), which could be purchased for 1 cent. Thus, wära actively circulated, stimulating economic growth in the village. The introduction of a kind of duty for storing money led to the fact that any person who had wära in his hands sought to get rid of them as soon as possible. Within a few months, workers and owners retail shops have fully paid off all their debts. In the midst of the economic depression that hit Germany, news of a prosperous village instantly spread throughout the area.
German journalists began to write about the “miracle of Schwanenkirchen,” and even in the United States, information about the Bavarian experience appeared in the financial sections of major newspapers. However, after a few months, the authorities ordered the production of wära to cease.
Perhaps the most famous example The successful implementation of Gesell's theory can be considered an experiment conducted in the Austrian town of Wörgl. Special role The mayor of the city, Michael Unterguggenberger, played here. He took over as mayor in 1931, a time of severe economic crisis that gripped Europe. The unemployment rate in Wörgl at that time exceeded 30% - a typical figure for Austria at that time. There were no large factories in the city, and small firms went bankrupt before our eyes; the number of people receiving unemployment benefits increased, and tax arrears increased from 21 thousand to 118 thousand shillings over five years. In search of a way out of this situation, Michael Unterguggenberger turned to the works of famous economists, and in Gesell’s book “The Natural Economic Order” he found not only interesting theoretical calculations, but also specific practical recommendations. Unterguggenberger held conversations with members of the city government and influential local residents and, having enlisted their support, began the experiment. On July 31, 1932, the magistrate issued 5,000 so-called "free schillings", which were covered by the same amount of ordinary Austrian schillings in the bank. “New” money was used to pay salaries and materials; traders and entrepreneurs agreed to accept them as payment. For the use of “free shillings” a fee was charged, amounting to 1% monthly, i.e. 12% per year. The payment was made at the end of each month in the form of a stamp with a face value of 1% of the value of the banknote, which was stuck on back side bills, and without such a stamp the banknote was considered invalid. The income from this “demurrage tax” went to the city treasury. The fee received by the magistrate was 12% of 5,000, that is, 600 “free shillings.” This money was spent on public needs. It is not surprising that anyone who received “free shillings” as payment tried to spend them as quickly as possible. Over time, the residents of Wörgl even began to pay their taxes in advance to avoid fees for using money. All city employees half wages received “free shillings,” and those newly hired were paid all their earnings in new money. During the year, 5,000 “free shillings” were in circulation 463 times, thus producing goods and services worth about 2,300,000 shillings (5,000 x 463). During this time, the ordinary shilling was in circulation only 213 times. In just six months, the issue of free money ensured the implementation of public works in the amount of 100 thousand shillings: 7 streets were paved, work was carried out to improve 12 roads, the sewerage system was expanded, a bridge was built, new park, and 50 unemployed citizens received jobs. At a time when many European countries were struggling with rising unemployment, Wörgl became the only city in Austria with full employment. On January 1, 1933, construction began on a new ski resort and reservoirs for the fire service.
Edouard Daladier, Prime Minister of France, specially came to the city to see this economic miracle with his own eyes.
The Swiss journalist Bourdais wrote: “I visited Wörgl in August 1933, exactly a year after the experiment began. Despite everything, we must admit that his success borders on a miracle. The streets, which were previously in terrible condition, can now only be compared to highways. The city government building has been extensively renovated and is a beautiful mansion with blooming geraniums. On the new concrete bridge there is a commemorative plaque with the proud text: “Built with spare money in 1933.” All working residents are staunch supporters of free money. In all stores, free money is accepted on an equal basis with real money.”
Residents of the neighboring town of Kitzbuhl, inspired successful example, decided to conduct a similar experiment at home, and already in January 1933 they issued free money for 3,000 shillings. New means of payment were accepted for payment in both cities without restrictions. In the summer of 1933, Unterhugenbergen invited representatives of 170 towns and villages to a meeting, and soon more than two hundred Austrian communities expressed a desire to conduct a similar experiment.
This news caused panic in the Central Bank; he declared his monopoly rights to issue and prohibited the printing of local free money. The community sued the Central Bank, but lost the case in November 1933. The confrontation lasted a long time, the case was even sent to the Austrian Supreme Court, but the city lost again. The experiments were over.
There is an attempt to implement Gesell's concept within the framework of the Stampscrip Movement in 1933 in the United States. More than 100 American communities, including several large cities, spoke in favor of introducing money that was supposed to act similar to Wörgl’s “free money”, but this initiative did not meet with understanding from the American authorities and, accordingly, was not crowned with success. The state suppressed initiatives to create additional monetary systems in other countries, in particular in France. The only exception, perhaps, can be considered the Swiss currency WIR, created in 1934. In essence, this is a mutual credit system, where the currency is equal in value to the national one, but has no interest. Each member of the circle can receive WIR either by selling a product and serving someone else in the circle, or as an interest-free WIR loan from the focal point.
After World War II, the development of the concept of free money went in two directions. Firstly, these are local mutual lending systems (the so-called LETS - Local Exchange Trading Systems), which use checks or electronic forms of offset instead of physical certificates. Secondly, time banking systems, “time banks”, allowing project participants to exchange their labor for the so-called. "time dollars". The latter model has become especially widespread in the USA and Japan. A person provides one or another service for other participants in the project, receiving local money for it at an agreed rate. This could be walking the dog, babysitting, mowing the lawn, etc. With the “time dollars” received, you can purchase either other services registered in the “time bank” or goods in stores participating in the project.
Some monetary systems implement the classic Gesellian function of free money - demurrage (i.e. negative percentage, or fee for using money). In particular, these are ROCs (Robust Currency System), the French social currency SOL, as well as the Chiemgauer (or Chiemgauer). The Chiemgauer is the local Bavarian currency introduced in 2003. Along with the euro, this money can be used in more than 600 shops and businesses in the region. Today there are about 300,000 of these banknotes in circulation, some of whom are paid by the Chiemgauers. Every quarter this money depreciates - banknotes must be regularly renewed using stickers for 2% of the face value.
Despite the fact that several types of additional monetary systems operate successfully today, most of experiments to introduce free money ended with them being stopped “from above” under one pretext or another - as a rule, as a result of the actions of national central banks. Central banks are extremely hostile to such initiatives, and the point is not only that they see this as an encroachment on their monopoly - the right to conduct money issue. The central bank in the economy of any country is called upon to control and regulate the monetary system; its actions are always strictly determined by the interests of the state and government. The implementation of Gesell's theory is quite capable of eliminating the dictates of credit money, and therefore affecting the interests of the financial elite, since the entire modern world economy is built on the basis of interest rates or, in other words, credit. It is not surprising that many see Gesell's ideas as a serious threat to the existing order of things, and this may explain the fact that his name is not very widely known even among economists. Of course, Gesell's concept is not without its shortcomings, and it has many supporters and opponents. However, practice shows that the free money system is quite viable, at least when solving local problems of small communities or as an anti-crisis measure during a period of economic depression.
Johann Silvio Gesell (17 March 1862, St. Vith, now in Belgium - 11 March 1930, Oranienburg, Germany) - German entrepreneur, financial theorist and social reformer, author of the theory of the "free economy" (from German: Freiwirtschaft ).
He was the seventh of nine children in the family of Prussian Ernst Gesell from Aachen and Walloon Jeanette Talbot from Belgium. In 1887 he moved to Buenos Aires, Argentina. In Buenos Aires, he was a successful German merchant who began to study the problems of monetary circulation under the influence of the economic crisis of the late 1880s, which was especially severe in Argentina.
His first treatise- “Monetary Reform as a Path to a Social State” - was published in Buenos Aires in 1891. The main ideas about money were published in the same year in Buenos Aires in the work “Nervus rerum”, as well as in many subsequent books and pamphlets , published until his retirement and departure to Switzerland in 1906. In 1907-1911 he again lived in Argentina, then returned to Germany and settled in the vegetarian commune “Obstbausiedlung Eden”, founded by Franz Oppenheimer in Oranienburg, north of Berlin. Here he published the journal Physiocrat, which was closed due to censorship that intensified after the outbreak of the First World War.
The first part of it classic work“The Exercise of the Right to Full Time Work” was published in 1906 in Switzerland, and a second in 1911 in Berlin under the title “The New Doctrine of Interest.” Both parts were published in Berlin and Switzerland during the war (1916) and went through six editions during his lifetime, the last of which is entitled "Free State and Free Money as the Path to a Natural Economic Order." In an English translation (by Philip Rai), this work was published under the title “The Natural Economic Order.”
In April 1919, Gesell, at the invitation of Ernst Niekisch (then a left-wing socialist), served as finance minister and member of the socialization commission in the short-lived revolutionary cabinet of the Bavarian Soviet Republic, electing the Swiss mathematician Theophilus Christen and the economist Ernst Polenske as his assistants. He tried to put his theoretical constructs into practice, but after only 7 days in office, the Bavarian revolution was brutally suppressed, Gesell was detained and subsequently convicted by a military tribunal. Because of his involvement in the government of the Soviet republic, the Swiss authorities refused to allow Gesell to return to his farm in Neuchâtel. Last decade He spent his life in Berlin and Switzerland, devoting himself to promoting his ideas.
Books (1)
Natural economic order
There are many alternative systems to fiat and credit money, which means there is theoretically a reason to avoid financial disaster.
The uniqueness of the topic is that all “free money” models were initially created not as an alternative to the global financial system, but as a local initiative that could make life easier for a small community, town, city, or at most a region or county. There is even a synonym for the varieties of “free money” (Freigeld) by Silvio Gesell - community currencies, local currencies.
All attempts to put into practice the theory of free money in the 1930s had common destiny: V as soon as possible(maximum - one year, and usually within two to three months) they showed phenomenal results in overcoming the darkest manifestations of economic depression - eliminating unemployment, radically increasing tax collection, reviving municipal activity, causing a flourishing of local trade, and most importantly - eliminating the deficit real money, driven by deflation into bank vaults.
After the triumph, however, a hangover quickly set in: as soon as the news of the miracle money spread throughout the area, there was a massive desire from neighboring municipalities and communities to join the experiment. Then the national Central Bank intervened, under one pretext or another (as a rule, charges were brought against the monopoly on the issue and circulation of Money) closing the project...
“I am convinced that the future will learn more from Gezzel than from Marx.”
John Maynard Keynes
Johan Silvio Gesell (Johann Silvio Gesell)- German entrepreneur, financial theorist and social reformer, author of the theory of “free economy” (from German: Freiwirtschaft) and free money Freigeld. - (Wikipedia)
All attempts to put into practice the theory of free money in the 30s had a common fate: in the shortest possible time (maximum - one year, and usually within two to three months) they demonstrated phenomenal results in overcoming the darkest manifestations of economic depression - they eliminated unemployment, radically increased tax collection, revived municipal activity, caused a flourishing of local trade and - most importantly! — eliminated the shortage of real money, driven by deflation into bank vaults.
In the mid-30s, Freigelds were successfully introduced in Austria, Switzerland, Germany and - almost everywhere - in the United States of America. It seemed that the cause of Silvio Gesell was guaranteed a stellar future, but very quickly both his name and his theory were completely erased from public consciousness. Why?
The real reason lies in Keynes’s prophecy, contained in the epigraph: Gesell’s idea of Freigeld not only undermines the very foundations of the world financial system, but is also the most effective of the actually existing ones and, moreover, a method that has been repeatedly and successfully tested in practice to eliminate the dictates of credit money. In such a context, the danger to the status quo of the global financial elite hidden in the Freigeld concept is incomparably higher than from all variations on the theme of Marx’s “Capital”.
At the heart of Freigeld's theory is the idea that good money should be "an instrument of exchange and nothing more." According to Gesell, traditional forms money are extremely ineffective, since they “disappear from circulation whenever there is an increased need for them, and flood the market at times when their quantity is already excessive.” Such forms of money “can serve only as an instrument of fraud and usury and should not be recognized as usable, no matter how attractive their physical qualities may seem.”
For Marx, “evil” is in surplus value, and the restoration of justice involves the withdrawal of this value from one class in favor of another. For Gesell, “evil” is in the credit nature of money, and the restoration of justice presupposes the elimination of this credit nature. Just think about the difference: instead of violence against people, there is violence against an abstraction!
Money in its modern form has become an ideal commodity, which determines its disinterest in servicing the market of traditional goods and services, from where it is withdrawn for self-satisfaction - be it in the form of time deposits, securities, bonds, options, futures, warrants, swaps and a host of derivatives.
Silvio Gesell put forward a revolutionary idea for modern times: it is not enough to deprive money of the ability to generate profit through interest, it must be subject to interest! In other words, a fee must be charged for the use of money: “Only money that becomes obsolete like newspapers, rots like potatoes, rusts like iron and evaporates like ether can become a worthy instrument for the exchange of potatoes, newspapers, iron and ether.
Because this is the only money that buyers and sellers will not choose over the product itself. And then we will begin to part with goods for money only because we need money as a means of exchange, and not because we expect advantages from possessing money itself" ( Silvio Gesell, The Natural Economic Order, Part 4, Ch. 1 Free Money).
I think it will be interesting to know that free money long time were used in... Ancient Egypt! "Units of money with demurrage ( One of the modern synonyms for Freigeld (along with “neutral”, “negative”, “free” money): “You can compare money to a railway carriage, which, like money, facilitates the exchange of goods.
It goes without saying that the railroad company does not pay a premium (interest) to the user of the car for unloading it so that it can continue to be used; but the user pays a small “demurrage fee” if he has not ensured the unloading of the wagons.
That's basically all we should do with the money to eliminate negative impact percent. Each user pays a small “parking fee” if they hold the money longer than necessary for exchange purposes” (Margrit Kennedy.
"Money without interest and inflation")) in Egypt, rough fragments of pottery, called “ostraka”, were used. In essence, these fragments were receipts for deposits made by farmers at local warehouses: the farmer handed over grain and received an "ostraca" ( Bernard Lietard. "Soul of Money").
And the information is absolutely sensational that various variations on the theme Freigeld served as the main form of money in Medieval Europe from X to XIII century!
“In the German lands these were “bracteaten”, thin silver plates that were taken out of circulation and replaced with new ones every year.” And also: “In 930 AD. e. English kingÆthelstan established that everyone small town must have its own mint!
In the context of this tradition of local lords, increasing revenue through the "Renovatio Monetae" (literally "Resumption of Coinage") was established throughout. For example, in 973 Edgar completely changed the coinage of the English penny.
Almost six years later, the young king Ethelred II began minting a new coin. He has repeated this since then at approximately equal intervals. The main motivation was that the royal treasurers would only give three new coins for four old ones, which was equivalent to a tax of 25% every six years on any capital contained in the coins, or approximately 0.35% per month. Thus, the new coinage was a crude form of payment for storage" ( Ibid.).
This is what it looks like. The obverse side of Freigeld is generally similar to regular money. It indicates the value equivalent (for example, one dollar), the name of the issuer, the conditions and terms of exchange for regular money. On back side There are 52 cells on which stamps must be affixed weekly.
Let’s assume that by agreement the reference day of the week is Wednesday. This means that a stamp certificate can be in circulation with the old stamp on Thursday, Friday, Saturday, Sunday, Monday and Tuesday, and on the following Wednesday the last certificate holder is obliged to stick a new stamp. The two-cent stamp is being sold by the authorities implementing the free money project.
Now it is clear where the money comes from to exchange free money for regular money at the time of expiration: at the end of the year, each stamp certificate will have 52 stamps attached, which the municipality sold for 1 dollar 4 cents. An issue of $1,000 thus brings in $1,040 in cash. 1,000 will go to cover the exchange, and 40 will go to cover the costs of administering the project.
However, the self-sufficiency of brand certificates is a minor matter. The main thing is that the weekly expiration of free money leads to an unprecedented turnover!
Judge for yourself: every owner of a stamp certificate strives to get rid of it as soon as possible in order not to pay a tax in the form of a two-cent stamp next Wednesday. Ultimately, all free certificates on Tuesday evening are accumulated by retailers, wholesalers or manufacturers, who paste stamps - a kind of tax - with great pleasure: it is this energetic money that provides them with unprecedented trade turnover.
According to Irving Fisher's calculations, the turnover of free money in hundreds of American cities during the Great Depression was at least 12 times (!) higher than the turnover of ordinary dollars! It is this property of free money that allows us to speak about its unique efficiency, which, as is known, is determined by the formula: “volume multiplied by circulation velocity.”
Triumph
The model of the functioning of free money, described by Irving Fisher, was literally implemented verbatim in the very first attempts to apply Gesell's concept in practice. First in Germany, coal mine owner Max Hebecker revived from the ashes the Bavarian village of Schwanenkirchen, whose population (500 people) had been living hand to mouth for the past two years on state unemployment benefits:
« Just a few months after the resumption of the mine, Schwanenkirchen was unrecognizable - the workers and shop owners had completely paid off all their debts, and a new spirit of freedom and life literally hovered over the city. News of the village's prosperity in the midst of the economic depression that struck Germany instantly spread throughout the area. Reporters from all over the country wrote about the "Schwanenkirchen miracle", and even in the United States one could read about the experiment in the financial sections of all major newspapers».
In a year German experience was triumphantly repeated by the mayor of the Austrian city of Wörgel, Michael Unterguggenberger. After the introduction into circulation of free money created according to the Freigeld type ( Stamps for Wörgel's free money were pasted once a month, not weekly), the city, whose tax arrears increased from 21 thousand shillings to 118 thousand in five years, began repayment in the first month (4,542 shillings). Over the next six months, the emission of “free shillings”, equivalent to 32 thousand ordinary shillings, provided public works worth 100 thousand shillings: 7 streets were paved, 12 roads were improved, sewerage was expanded into two new blocks, a new park was created, a bridge was built and new jobs for 50 unemployed.
On January 1, 1933, construction began on a new ski resort and reservoir for the fire service in Wörgel. A neighboring city with a population of 20 thousand residents hastily began preparing to issue its own free money. When 300 communities in the country became interested in Wörgel’s experience, the National Bank of Austria, sensing a threat to its monopoly, banned the printing of free local money.
The most powerful free money system - Swiss WIR(Wirtschaftsring-Genossenschaft, Economic Circle Cooperative), numbering 62 thousand members and providing an annual turnover of the equivalent of 1 billion 650 million Swiss francs (!). Despite the fact that WIR is not a full-fledged free money system, since it does not have demurrage ( WIR arose in 1934 and initially, as befits classic free money, it involved a fee for demurrage, but after the Second World War demurrage was abandoned), it is in fundamental opposition to credit money, since it is completely interest-free. Loans provided by WIR Bank to system participants are also interest-free.
Well, for those who want to invest, nothing changes - Gezzel does not cancel stocks and bonds as investment instruments
Now with the help of computer technology you can make EVERYTHING MUCH MORE CONVENIENT.
What do you need?
1. Understanding by the local community of the functions and purpose of money.
2. Activists, enthusiasts, interested users of the local financial system.
3. Network infrastructure ( local networks, Internet access is good, but not necessary).
4. Modify, install and maintain software, managing cash flow.
5. Management, training, support.
I see the most promising option as a hybrid of the LETS (or CES) settlement system with a tiny fee for idle money. Such systems, as practice shows, make it possible to revive the most depressed regions. There would be resources and people willing to work.
(Summary of the article by Sergei Golubitsky
"Business magazine" No. 18 dated October 02, 2007.)
