Saturday, 10 November 2012

Silvio Gesell

Silvio Gesell (March 17, 1862 – March 11, 1930) was a German merchant, theoretical economist, social activist, anarchist and founder of Freiwirtschaft.



[edit] Life

Silvio Gesell's mother was Belgian and his father came from Aachen. Silvio was the seventh of nine children.
After visiting the public Bürgerschule in Sankt Vith, he attended Gymnasium in Malmedy. Being forced to pay for his living expenses from an early age, he decided against attending a university and received work for the Deutsche Reichspost, the postal system in the German Empire. He did not like this profession, so he decided to start an apprenticeship as merchant under his brother in Berlin. Then he lived in Málaga, Spain for two years, working as a correspondent. He then returned to Berlin involuntarily to complete his military service. Following this, he worked as a merchant in Brunswick and Hamburg.
In 1887, Gesell moved to Buenos Aires, Argentina, where he opened up a branch of his brother's business. The 1890 depression in Argentina, which hurt his business considerably, caused him to reflect upon the structural problems caused by the monetary system. In 1891, he released his first writing on this topic: Die Reformation des Münzwesens als Brücke zum sozialen Staat (German for: The reformation of the monetary system as a bridge to a just state). He then wrote Nervus Rerum and The nationalization of money. He gave his business to his brother and returned to Europe in 1892.
After an intermediate stay in Germany, Gesell moved to Les Hauts-Geneveys in the Swiss canton of Neuchâtel. He established a farm in order to finance his living expenses while continuing his economic studies. In 1900, he founded the magazine Geld- und Bodenreforn (Monetary and Land Reform), but it failed as it had to be wound up in 1903 for financial reasons.
From 1907 to 1911, he was in Argentina again, then he returned to Germany and lived in the vegetarian commune Obstbausiedlung Eden, which was founded by Franz Oppenheimer in Oranienburg, north of Berlin. Here, he founded the magazine Der Physiokrat (The Physiocrat) together with Georg Blumenthal. It had to be wound up in 1914 as World War I broke out because of censorship.
In 1915, Gesell left Germany to return to his farm in Les Hauts-Geneveys. In 1919, he was called on to take part in the Bavarian Soviet Republic by Ernst Niekisch. The republic offered him a seat in the Socialization Commission and then appointed him the People's Representative for Finances. Gesell chose the Swiss mathematician Theophil Christen and the economist Ernst Polenske as his assistants and immediately wrote a law for the creation of Freigeld. His term of office lasted only 7 days. After the bloody end of the Soviet Republic, Gesell was held in detention for several months until being acquitted of treason by a Munich court because of the speech he gave in his own defense. Because of his participation in the Soviet Republic, Switzerland denied him the opportunity to return to his farm in Neuchâtel.
Gesell then moved first to Nuthetal, Potsdam-Mittelmark, then back to Oranienburg. After another short stay in Argentina in 1924, he returned to Oranienburg in 1927. Here, he died of pneumonia on March 11, 1930.
He promoted his ideas in German and in Spanish.
Villa Gesell, a seaside town in Buenos Aires Province, Argentina was founded by (and is named after) his son Don Carlos Idaho Gesell.

[edit] Opinions

He considered himself a world citizen and believed the Earth should belong to all people, regardless of race, gender, class, wealth, religion and age and that borders should be made obsolete.
Gesell founded his economic thoughts on the self-interest of people as a natural, healthy motive to act, which allows the individual to follow the satisfaction of his needs and to be productive. The economic system must do justice to this pre-condition, otherwise this system would undoubtedly fail. This is why Gesell called his proposed economic system "natural". This stance put him in clear opposition to Karl Marx, who called for a change in social conditions.
Taking selfishness into account, Gesell called for free, fair business competition with equal chances for all. This included the removal of all legal and inherited privileges. Everyone should rely only on his personal abilities in order to make a living. In the "natural economic order" which he aimed for, the most talented people would have the highest income, without distortion by interest and rent charges. The economic status of the less talented would also improve, because they would not be forced to pay interest and rent charges. According to Gesell, this would lead to an equalization between the poor and the rich. Further, there would be more means available to help the poor because the higher average income would mean that everyone would have enough money to spare what was necessary to help.

[edit] Opinions about Gesell

Some opinions about Gesell:[1]
Free money may turn out to be the best regulator of the velocity of circulation of money, which is the most confusing element in the stabilization of the price level. Applied correctly it could in fact haul us out of the crisis in a few weeks ... I am a humble servant of the merchant Gesell.
—Prof. Dr. Irving Fisher, economist at Yale University New Haven/USA[2]
Gesell's chiefwork is written in cool and scientific terms, although it is run through by a more passionate and charged devotion to social justice than many think fit for a scholar. I believe that the future will learn more from Gesell’s than from Marx’s spirit.
John Maynard Keynes, Economist, Fellow of King's College, University of Cambridge/England[3]
Gesell's standpoint is both anticlassical and antimarxist... The uniqueness of Gesell's theory lies in his attitude to social reform. His theory can only be understood considering his general point of view as a reformer ... His analysis is not completely developed in several important points, but all in all his model shows no fault.
—Prof. Dr. Dudley Dillard, economist at the University of Maryland /USA [4]
We would especially like to certify our great esteem for pioneers such as Proudhon, Walras, and Silvio Gesell, who accomplished the great reconciliation of individualism and collectivism that the economic order we are striving for must rest upon.
—Prof. Dr. Maurice Allais, economist at the University of Paris/France[5]
Academic economists are ready to ignore the ‘crackpots’, especially the monetary reformers. Johannsen, Foster and Catchings, Hobson and Gesell all had brilliant contributions to make in our day, but could receive no audience. It is hoped, that in the future economists will give a sympathetic ear to those who possess great economic intuition.
—Prof. Dr. Lawrence Klein, economist at the University of Pennsylvania/USA[6]
Economic science owes Silvio Gesell profound insights into the nature of money and interest, but Silvio Gesell has always been considered a queer fellow by economic circles. To be sure, he was no professor, which already raises suspicion... The decisive fact is that Silvio Gesell's fundamental ideas with regard to an economic order are correct and exemplary. Exemplary is furthermore, that in the creation of a functional monetary order he should see the 'nervus rerum' of a functional economic and social order.
—Prof. Dr. Joachim Starbatty, economist at the University of Tübingen/Germany[7]
Silvio Gesell managed to write clearly and make himself understood, a gift that most pure theorists and reformers as well as many practical experts of today lack. The Natural Economic Order makes worthwhile reading even in our days... Gesell developed brilliant concepts and was forgotten, while his less brilliant contemporaries ... dazzled several generations before the realization of their falseness could break through.
—Prof. Dr. Oswald Hahn, economist at the University of Erlangen-Nuremberg/Germany[8]
Gesell is a smart outsider, who ... treated the subjects of money and interest, the right to full proceeds from labor and suggestions for remedies, in a very original way... The ideas he conceived regarding his problems and what he deemed appropriate for the crises of his times are worth considering with respect to a fundamental improvement of monetary conditions in general.
—Prof. Dr. Dieter Suhr, jurist at the University of Augsburg/Germany[9]
Gesell is the founder of the free economy, an economic outsider who nevertheless was recognized by Keynes, in a certain sense, as his forerunner. He is therefore still considered to be above all a Keynesian economist, even a kind of hyper-Keynesian, that is to say, an advocate of a school that propagates the lowest (nominal) interest rate possible as a means of avoiding crises. Gesell, however, also recognized that the problem of a crisis cannot be solved solely by reducing the rates of interest... Gesell suggests, therefore, as the necessary correlative to the introduction of ‘free money’ ... the introduction of ‘free land’... Gesell's chief work thus carries the title ‘A Natural Economic Order Through Free Land (!) and Free Money’. It proves that the real aspects of an economy – that is to say, the claim on land or resources – must never be lost from view, even if primary importance is attached to monetary factors. This was recognized more clearly by Gesell than by Keynes.
—Prof. Dr. Hans C. Binswanger, economist at the College of Economic and Social Sciences Academy at St. Gallen/Switzerland[10]

[edit] See also

[edit] Bibliography

[edit] References

  1. ^ The Future of Economy – A Memoir of Economics (1984) International Association for a Natural Economic Order (Ed.) [1]
  2. ^ Stamp Scrip, New York: 1933, p. 67 and Mail and Empire, Toronto: 21 November 1932.
  3. ^ General Theory of Employment, Interest and Money, London (1957), p. 355 (whole text on Gesell p. 353–358 and 379).
  4. ^ Gesell's Monetary Theory of Social Reform, American Economic Review (AER), Vol 32 (1942), p. 348–349.
  5. ^ Economie et Intérèt, Paris 1947, p. 613.
  6. ^ The Keynesian Revolution (1949/1968), p. 152.
  7. ^ Eine kritischeWürdigung der Geldordnung in Silvio Gesells utopischem Barataria (cheapland). Fragen der Freiheit Nr. 129 / 1977, pp. 6 and 30–31.
  8. ^ In memoriam Silvio Gesell. Zeitschrift für das gesamte Kreditwesen, Vol. 33 (1980), No. 6, p. 5.
  9. ^ Geld ohne Mehrwert – Entlastung der Marktwirtschaft von monetären Transaktionskosten. Frankfurt 1983, pp. 17 and 51.
  10. ^ Arbeit ohne Umweltzerstörung – Strategien einer neuen Wirtschaftspolitik. Frankfurt 1983, pp. 246–248.

[edit] External links

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