In my mail this morning: someone calling himself Miguel Yasuki Hirota is giving a talk on complementary currencies for sustainable development at 19:30 on the 15th at Argentona 11. Gugel reveals that “Miguel” is a fan of the author of The natural economic order, of whom almost everyone’s favourite (since last month, anyway) liberal fascist economist, Keynes, wrote:
Gesell was a successful German merchant in Buenos Aires who was led to the study of monetary problems by the crisis of the late ‘eighties, which was especially violent in the Argentine, his first work, Die Reformation im Münzwesen als Brücke zum socialen Staat, being published in Buenos Aires in 1891. His fundamental ideas on money were published in Buenos Aires in the same year under the title Nervus rerum, and many books and pamphlets followed until he retired to Switzerland in 1906 as a man of some means, able to devote the last decades of his life to the two most delightful occupations open to those who do not have to earn their living, authorship and experimental farming.
… In April 1919 Gesell joined the short-lived Soviet cabinet of Bavaria as their Minister of Finance, being subsequently tried by court-martial. The last decade of his life was spent in Berlin and Switzerland and devoted to propaganda. Gesell, drawing to himself the semi-religious fervour which had formerly centred round Henry George, became the revered prophet of a cult with many thousand disciples throughout the world. The first international convention of the Swiss and German Freiland-Freigeld Bund and similar organisations from many countries was held in Basle in 1923.
[…]
He argues that the growth of real capital is held back by the money-rate of interest, and that if this brake were removed the growth of real capital would be, in the modern world, so rapid that a zero money-rate of interest would probably be justified, not indeed forthwith, but within a comparatively short period of time. Thus the prime necessity is to reduce the money-rate of interest, and this, he pointed out, can be effected by causing money to incur carrying-costs just like other stocks of barren goods. This led him to the famous prescription of ‘stamped’ money, with which his name is chiefly associated and which has received the blessing of Professor Irving Fisher.
According to this proposal currency notes (though it would clearly need to apply as well to some forms at least of bank-money) would only retain their value by being stamped each month, like an insurance card, with stamps purchased at a post office. The cost of the stamps could, of course, be fixed at any appropriate figure…
The idea behind stamped money is sound. It is, indeed, possible that means might be found to apply it in practice on a modest scale. But there are many difficulties which Gesell did not face. In particular, he was unaware that money was not unique in having a liquidity-premium attached to it, but differed only in degree from many other articles, deriving its importance from having a greater liquidity-premium than any other article. Thus if currency notes were to be deprived of their liquidity-premium by the stamping system, a long series of substitutes would step into their shoes – bank-money, debts at call, foreign money, jewellery and the precious metals generally, and so forth…
Which is to say: Gesell’s Swiss farm was to cover him against his German economic policy recommendations. I suppose every charlatan is, in his own sweet way, a one-man hedging operation.
It will be interesting to hear how Mr Hirota gets on in Barcelona, which has consistently maintained a moderately-sized, vocal following for Enver Hoxha-style, go-it-alone solutions–and The Economist be damned.
In particular I’d like to know more about the ideas which led to the introduction by the anarchists at the beginning of the Civil War of local currencies, which made travel difficult for all but the new elite. My guess is that they came from the 1932 depreciating-money experiment in Wörgl, which was inspired by Gesell.
Given the Spanish tendency to see the 1930s as thronged with heroic martyrs to be emulated, rather than dangerous lunatics to be forgotten as fast as possible, and given that obsessive regionalism continues to be nation’s principal unifying characteristic, it wouldn’t be surprising to find neue Gesell-igkeit crankery sweeping the ranks of those who can no longer afford their yoga classes.
[
The Wikipedia articles on Gesell and The natural economic order are pure uncritical shite, btw.
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