Lost and forgotten in the corruption of political economy in the 1900s, Silvio Gessel seems to be a promising and ideal successor to Henry George, given his influential intuition and insight, his uncorrupted and modest self-funding, and his equal treatment for monetary and land reform, free of prejudice and full of observation and science.
While I have not read his economic treatise, The Natural Economic Order, written in 1929, I have read enough of his life and his philosophy and influences to put it at the top of my reading list. Just the name of his magazines, Land and Monetary Reform and The Physiocrat, is enough to read some of Gessel’s works for quotations, reasons for his solutions, and an account of history.
His respect for all people, economic justice, and the free market gives his work a green light for not only a reading but as a possible father of modern Georgism, where land and monetary reform are considered of equal and fundamental importance and not to be abstracted away erroneously as capital, marginal utility, and other neo-classical scientific models which miss the point, confusing the products of labor with the abstract and legal products of state, losing sight of natural rights and sound free market economics where the rights of your toil are fully respected by the government rather than stolen through the utility of the state by wealthy interests and the “anglo-slaveonomics” of the financial, insurance, and real estate industries.
Perhaps we’re not all Georgists, but Gesselists.
Human Psychology and Natural Decay Processes comes to mind when thinking about Gesells’ natural money theory.
What I mean is that in our present economic environment currency hording is a real issue leading to a vicious cycle of declining economic activity.
It is the destruction of debt that has lead to our declining money supply.
We already have inflation on some levels, that is in things we need, and deflation and debt destruction on sunk capital such as real estate, and much mal-investment in a wide variety of things already produced.
Gesells’ money at some level effects the psychology of inflation by turning it upside down in our consciousness leading to increased economic activity, that is money exchange – velocity, not hoarding.
Gesell also helps us come to terms with nature, resource depletion, socialized pollution costs, and decay, naturally leading to conservation, and efficiencies down to the individual level such as recycling, waste reduction, and finding other creative new uses for what has already been produced.
This in turn frees us look in the mirror honestly so we can develop true 21st century models and policies on what we choose to produce now, and that which we choose to conserve for later use.
Rare earths, and precious metals come to mind, but it really includes all natural resources including the application of human capital – “time” investment.
It also begins to address the problem of friction, the increasing complexity of our socioeconomic systems which would lead to rethinking regulation and its’ relation to natural economic liberty.
In other words it would provide a new framework – a socioeconomic environment that would tend to re-balance controls and freedoms in a new, more natural, and practical manner.
Equilibrium adapting to entropy so to speak.
Gesell certainly deserves further critical inquiry.
Here are some books that look at these issues from a socio-historical viewpoint covering such concepts as language, objectification, separation, spirituality, and the pressing need to reverse these processes.
http://ascentofhumanity.com/text.php
http://www.realitysandwich.com/sacred_economics_introduction
Feel free to email me Keith to exchange ideas.
Human Psychology about inflation and deflation, and the reality of the decay processes, and diminishing returns, comes to mind when thinking about Gesells’ Natural Economic and Monetary theory.
In our present economic environment, currency hording is a real issue, leading to a vicious cycle of declining economic activity.
It is the destruction of debt which extinguishes “wealth”, much of it speculative, which is a part of our nature, that has lead to our present declining “money” supply, and our response to it.
We already have inflation on some levels, that is in things we need, and deflation – debt destruction on sunk capital, such as real estate, and much mal-investment in a wide variety of things already produced.
Gesells’ money at some level effects the psychology of inflation by turning it upside down in our consciousness leading to increased economic activity, that is social “money” exchange, not hoarding.
Gesell also addresses our psychological tendency toward mal-investment, and the deflation that leads to, by helping us come to terms with nature, resource depletion, socialized pollution costs, and decay.
This in turn naturally leads to conservation, preservation, and efficiencies down to the individual level such as recycling, waste reduction, and finding other creative new uses for what has already been produced.
This in turn frees us look in the mirror honestly so we can develop true 21st century models and policies on what we choose to produce now, and that which we choose to conserve for later use.
Rare earths, and precious metals come to mind, but it really includes all natural resources including the application of human capital – “exchange time” investment, in the context of the short term vs. the long term needs of our society, and our individual wants and needs, limitations, or situational constraints.
This must also include contemplating the above point for future generations of course, unless we are choosing eventual extinction.
It also begins to address the problem of friction, the increasing complexity of our socioeconomic systems today, which would lead to rethinking regulation and its’ relation to natural economic liberty.
A more natural equilibrium adapting to entropy, false scarcity, and complexity, so to speak.
It would begin a path to true “price” discovery which we would continually improve upon.
Is this a recipe or part of a recipe for social stability, prosperity, and human progress?
That’s up to us to decide.
Gesell certainly deserves further critical inquiry.
Here are some books that look at these issues from a socio-historical viewpoint covering such concepts as language, objectification, separation, spirituality, and the pressing need to reverse these processes.
http://ascentofhumanity.com/text.php
http://www.realitysandwich.com/sacred_economics_introduction
Feel free to exchange ideas by email Keith.
thanks. i’m sure i’ll have more opinion after reading gessel. i tend to have an excess supply of opinion and a lack of demand for my opinion.
the links provided an interesting take on money. it helped me understand the point of demurrage for holding money as opposed to a more invisible inflation though i’m skeptical if it would actually achieve those goals. the demurrage could be cancelled by interest in a savings deposit.
monetary expansion and how the supply enters the system is most important, where a fee or inflation are conceptually the same, to encourage productive use rather than hoarding. thus, a simple fee for holding money is not going to change much, especially if the supply issue isn’t addressed. money must originate debt-free. distribution should be through a citizen dividend or funding of the government so there is no privilege to monetary origination. inflation is ideal under such conditions since the monetary expansion benefits the public rather than the usurer or rentier. it is less obtrusive than the demurrage but conceptually the same. i could be wrong about demurrage making a difference in how money is viewed. i just think the subtle difference would not be much different than what we have now in making a difference in how money is viewed. actual supply would also be a concern in addition the demurrage, even if monetary velocity increases effective supply, since when you’re at maximum velocity, growing population would still need more supply.
it would help clarify the distinction between velocity effects and population effects on monetary supply, increasing predictability of inflation rates as merely a function of population, meaning the demurrage would take velocity out of the equation. i assume the demurrage would fund government which is conceptually the same as the government printing money to fund government. the difference is that the government can encourage velocity without printing more money and thus new printing could simply be fixed as a function of population.
i think i get the whole advantage of a demurrage now.
Yes, Gesell holds many keys.
One little point: the income to the system through demurrage is very low: because the money circulates very much more quickly, volume is very much lower, as result income through negative interest is also very low.
And this is just good news: society bears very low cost for greatly added value as the means of exchange is no longer burdened by those hoarding it.
Of course the demurrage must be SPENT back into circulation to avoid similar problems as under an interest bearing money supply.