Free money becomes real money

For decades, money that expired unless stamped was mostly a theory. It took the Great Depression to make it a reality. As the economy went into a free-fall, people scrambled to find solutions. And in towns scattered throughout Europe and the United States, they found their solution in Gesell. The money reformer, who died in 1930 of pneumonia, would not live to see it.

In 1932, in the small town of Wörgl, Austria, a town leader, Michael Unterguggenberger, got Wörgl to issue stamped money as a way to combat skyrocketing unemployment and business closures. The town used it to pay the unemployed to do public works, and by all contemporary accounts, the system worked to lift the town out of misery.

The press dubbed it the "miracle of Wörgl," and it was one in a series of local experiments with stamped money. These experiments inspired many other struggling cities, like Hawarden, Iowa, and Anaheim, Calif., to do the same. It was around then that Gesell's work was finally published in English. With classical economics discredited by the prolonged depression and with leading economists scrambling to figure out what to do, many were inspired by Gesell. Among them were Irving Fisher and John Maynard Keynes, two of the most influential economists of the 20th century.

In 1933, Fisher wrote a short book inspired by Gesell's ideas called Stamp Scrip. Fisher was an economist at Yale University, and he's now somewhat unfairly remembered for making overly optimistic predictions before the crash of 1929. He lobbied Congress to institute stamped money to provide relief to a distressed America. U.S. senators introduced a bill (S. 5125) that would have issued a billion dollars of stamped money to be distributed nationally. But it did not end up becoming law. Perhaps that's because that year was already seeing huge changes, with newly elected President Franklin D. Roosevelt implementing the New Deal and taking the U.S. off the gold standard.

Keynes, in 1936, dedicated five pages to Gesell in a concluding chapter of his magnum opus, The General Theory of Employment, Interest and Money. While critiquing some of Gesell's overall theory, Keynes concluded, "The idea behind stamped money is sound."

Why do we care about this now?

After World War II, the industrialized world entered a remarkable period of economic growth. And central banks, now off a rigid gold standard, played a greater role in managing money to ease the ups and downs of the market. Negative-interest money lost its allure, and Gesell was mostly forgotten.

But the world's central banks are now thinking about how to keep money moving again. When the economy enters a downturn, they usually cut interest rates to encourage spending. But interest rates are already close to zero, which could be a huge problem in another recession. For a long time, economists believed rates couldn't go negative for a simple reason: If saving in places like a bank costs people money, they will instead just hoard cash, which won't cost them money. Cash becomes a roadblock to economic stimulus. One way around this is higher inflation, which devalues or "taxes" money in real terms, but central banks like the Fed have been showing that they have much less power to increase inflation than previously thought.

Central banks in Europe and Japan have been experimenting with teeny-tiny negative interest rates as a way to stimulate the economy, but the issue still remains that people will start hoarding cash if rates go significantly negative. It's why serious economic thinkers consider Gesell relevant again.

In our technological age, a Gesellian system of unhoardable cash wouldn't actually have to involve stamping paper bills for a fee. It could involve high-tech physical cash, such as magnetic strips that allow the government to impose a "Gesell tax" on holding cash, as one economist proposed some years ago. Harvard University's Kenneth Rogoff has been advocating we get rid of paper money altogether and move almost completely to a system of electronic cash. He believes it could give central banks the power to impose negative interest rates deep enough to rescue our economy from future recessions. In all of this, Gesell was a pioneer.

Silvio Gesell has been called everything from a "libertarian socialist" to an "anarchist" to a "free spirit" to a "crank." John Maynard Keynes had a much more affectionate term for him: a "strange, unduly neglected prophet."

  Project igRA has this Natural Economic Order  implemented. If you want to understand what type of economy awaits you in this game, we strongly suggest to read at least a part of the book "The Natural Economic Order" concerning Free Money. You need to understand the idea behind it and understand the benefits of such system. Here is the link to the book: https://www.community-exchange.org/docs/Gesell/en/neo/
   Please do your research, see how this theory was put into practice in different countries and in different times and how it succeeded every time, unless terminated by governments.