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🌿⚙️ The Natural Economic Order

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💰🌍🔄 The Natural Economic Order by Silvio Gesell proposes a radical overhaul of economic systems through free money and free land to eliminate unearned income and foster equitable competition.

🤖 AI Summary

🧠 Core Philosophy

• 🌟 Self-interest: Natural inducement for economic activity.
• 🤝 Fair Competition: Equal chances for all, abolition of privileges.
• 💡 Economic Liberalism: Aims for basis in contrast to collectivism/planned economy.

💵 Free Money (Freigeld)

• 📜 Concept: Currency designed to gradually lose purchasing power over time (demurrage/stamp scrip).
• ⚙️ Mechanism: Prevents hoarding, encourages spending and investment.
• 📈 Objective: Increase velocity of money, stimulate economic activity, eliminate inflation and unemployment.
• 🚫 Interest: Acknowledged as unearned income due to money’s store-of-value function; Gesell aimed to abolish it.
• 🔄 Money Function: Primarily a medium of exchange, not a store of value.

🏞️ Free Land (Freiland)

• 🌐 Concept: Land not private property, but a common good, publicly owned and leased out.
• ⚖️ Objective: Eliminate land speculation and rent, make land cheaper for productive use, promote sustainable wealth distribution.
• 💲 Compensation: Proposes compensation for current landowners.

🌐 Free Trade (Freihandel)

• 📈 Principle: Unhampered free trade, no deals.
• 🌍 Global Vision: Advocated for a voluntary confederacy of states and free flowing global trade.

⚖️ Evaluation

• 🗣️ Keynes’s Endorsement: John Maynard Keynes called Gesell an unduly neglected prophet whose idea behind stamped money is sound. Keynes also acknowledged Gesell’s influence on his theory of liquidity preference. However, Keynes believed Gesell’s theory was half a theory, failing to fully discern the importance of liquidity.
• ⏳ Experimental Success (Short-Term): Demurrage currencies, like stamp scrip, saw successful but localized implementations during the Great Depression in places like Wörgl, Austria, and Schwanenkirchen, Germany. These experiments revived local economies, eliminated unemployment, and funded public works, but were typically suppressed by central banks and did not last long.
• 📉 Critiques of Demurrage: Some argue that demurrage currencies can only temporarily increase economic activity and that the total money in circulation might decrease over time, potentially leading to instability. Critics also suggest that hoarding (saving) money is a precursor to investment, and punishing it could make the economy poorer. The concept is sometimes viewed as a justification for inflation, redistributing from savers.
• 🚫 Anti-Marxian Socialism: Gesell’s work is described as an anti-Marxian socialism, aiming to unfetter competition rather than abolish it, contrasting with Marxist foundations. He critiqued Marx’s view of capital as physical goods, arguing it’s an economic situation dependent on supply and demand, with surplus value determined by economic forces.
• 🗺️ Georgism Distinction: While an admirer of Henry George, Gesell differed on land reform, believing land value taxes wouldn’t solve the problem of land rent as they could be passed to tenants. He advocated for public ownership and leasing of land instead.

🔍 Topics for Further Understanding

• ❓ The practical challenges of implementing demurrage currency on a national or global scale.
• 💡 Modern digital currencies and their potential to incorporate demurrage mechanisms.
• 🏠 Alternative land tenure systems and their impact on housing affordability and wealth distribution.
• 🧠 The psychological and social effects of a free money system on saving, investment, and consumer behavior.
• 📊 The interaction of Gesell’s monetary and land reforms with contemporary fiscal and monetary policies.

❓ Frequently Asked Questions (FAQ)

💡 Q: What is Free Money in The Natural Economic Order?

✅ A: 💸 Free Money (Freigeld) is a currency concept proposed by Silvio Gesell that loses value over time, often through a periodic fee or stamp requirement (demurrage). Its purpose is to discourage hoarding and incentivize immediate spending and productive investment, thereby increasing the velocity of money and stimulating economic activity.

💡 Q: What is Free Land according to The Natural Economic Order?

✅ A: 🌳 Free Land (Freiland) in The Natural Economic Order refers to a system where land is not privately owned but is a common good, publicly owned by the community. It is leased out to users at market rates, with the rent revenue flowing back to the public. This aims to eliminate land speculation, unearned income from rent, and make land more accessible for productive use.

💡 Q: How does The Natural Economic Order propose to address economic inequality?

✅ A: 📉 The Natural Economic Order addresses economic inequality primarily through its twin reforms of Free Money and Free Land. By eliminating interest on money and rent on land, it seeks to abolish unearned income, ensuring that wealth is derived from labor and productive activity, rather than from holding money or owning land as speculative assets.

💡 Q: Was Silvio Gesell’s economic theory ever implemented in practice?

✅ A: 🏛️ Yes, parts of Silvio Gesell’s economic theory, particularly the concept of demurrage currency (stamp scrip), were implemented in several local experiments during the Great Depression, most notably in Wörgl, Austria, and Schwanenkirchen, Germany. These experiments were largely successful in stimulating local economies and reducing unemployment but were typically short-lived and eventually suppressed by national authorities.

📚 Book Recommendations

📖 Similar

• 📈📉 Progress and Poverty by Henry George
• 🏛️💰 Debt: The First 5,000 Years by David Graeber
• 🌟 Utopia for Realists by Rutger Bregman

⚔️ Contrasting

• 🚧 The Road to Serfdom by F.A. Hayek
• 💰📈🌍⏳ Capital in the Twenty-First Century by Thomas Piketty
• 🍎 The Wealth of Nations by Adam Smith

🔗 Related

• 🧑‍💼🏦💸 The General Theory of Employment, Interest, and Money by John Maynard Keynes
• ✨ Sacred Economics by Charles Eisenstein
• 🗺️ The World for Sale by Javier Blas

🫵 What Do You Think?

🤔 If Free Money were implemented today, how might it reshape personal savings habits and long-term investment strategies, and would you embrace or resist a currency designed to depreciate?