Benutzer:Anselm Rapp/The Natural Economic Order

Dies ist eine maschinelle Übersetzung des Artikels Freiwirtschaft mittels DeepL, zwangsläufig noch stark fehlerbehaftet. Ansprechpartner: Anselm Rapp

Title page of the standard work of the free economic movement: Natural economic order through open land and free money (1919³)

Silvio Gesell (1862-1930), founder of the free enterprise theory

The free economy is an economic model developed by Silvio Gesell, a German-Argentinean merchant, farmer and self-taught economist, essentially between 1891 and 1916. The occasion for his first three writings, which were still exclusively concerned with monetary reform, was an Argentinean economic crisis around 1890. At the beginning of the 20th century, Gesell demanded land reform in addition to monetary reform. The title of his main work, published in 1916, therefore reads: The Natural Economic Order through open land and free money.

The term free land is used in the free economy to refer to land that has been peacefully transferred to public ownership. However, the use of the open land remains under private or cooperative control against payment of a lease. From the lease, the former owners are first to be adequately compensated. Once this has been done, the rent - as a kind of skimmed-off land rent - flows to the public. The implementation of the idea of the open land is a prerequisite for the successful realization of the idea of the free money.

With free money the Natural Economic Order describes a means of payment which (like the goods) is subject to a decline in value and thus is under circulation compulsion. However, the owner of free money can avoid devaluation by avoiding hoarding the means of payment, i.e. either exchanging it for goods, lending it or depositing it in a bank account (in the long term). The free money, which in the opinion of the company leads to falling interest rates, possibly even to negative interest rates and ultimately to zero interest rates, is also known as rusting banknotes, floating money or shrinking money. Free-market money experiments, which are also referred to by the modern complementary currency]s, took place in Germany, Austria and the United States in the late 1920s / early 1930s. There were also a number of attempts to implement the free-field ideas. These experiments were mainly carried out by various settlement projects organised as cooperatives.

Historical relations of the Natural Economic Order to the Physiocracy exist. François Quesnay's (1694-1774), to the so-called "self-interestethics" Max Stirner's (1806-1856), to the solidary anarchism Pierre-Joseph Proudhons (1809-1865) and on the land reformers of the 19th and 20th centuries. Among the latter, Michael Flürscheim is especially worthy of mention.

Since the beginning of the 21st century, the natural economic order has received new attention. Reasons for this include the emergence of regional currencies, the global economic crisis from 2007, the euro crisis from 2010 and the zero interest rate policy of the European Central Bank

About the term

The term free enterprise goes back to Silvio Gesell. He used it to describe a kind of preliminary stage of his Natural Economic Order. The actual goal was the establishment of a physiocracy. (= 'natural dominance'). Gesell as well as his early followers Georg Blumenthal and Hans Timm referred to François Quesnay, but at the beginning of the 20th century combined his ideas with anarchism and free economic thinking. Gesell's followers called themselves Physiocrats (also Fysiocrats, Fisiokraten) in the first phase of the free economy movement. Martin Hoffmann, a young theologian and also an early follower of Gesell, distinguished two currents within the Gesell movement in the mid-1920s with the above-mentioned terms: the bourgeois free-enterprisers on the one hand and the proletarians on the other. Physiocrats on the other side. Since the 1930s, representatives of Gesells' ideas have been calling themselves Freiwirtschaftler, Freiwirte and/or Gesellianer. Recently, the terms Human Economy and Fair Economy] have also been used. ref>The journal of the free economic Initiative for Natural Economic Order bears this name, for example;

Functionality

The supporting pillars of an ideal free economic system are free money and open land. They are interdependent and therefore cannot be introduced independently of each other. The free money and settlement experiments described below are therefore only a rudimentary demonstration of the economic model developed by Gesell. The situation is similar with the regional currencies.

Free money

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Pattern of a Physiocratic 100-Mark-Bill from 1919

The means of payment of the free money differ from those of the common currencies in that they (not the free money itself!) are subject to a permanent decline in value. In the course of history, various proposals have been made to document and compensate for this decline. So the so-called Physiocratic Money offered "devaluation boxes" (see picture!). Each time on the last day of a month a box had to be cut off. Within one year the value of the banknote sank in this way by 10 percent. A similar suggestion was that of stamp duty. The probably best known (but not necessarily the simplest) procedure can be illustrated by the example of the free WÄRA money: Each WÄRA note was subject to a regular monthly loss of one percent of its face value. This shrinkage was compensated by the purchase of tokens at 0.5, 1, 2, 5 and 10 Wära-Cent. The backs of the Wära notes therefore contained printed fields in which the tokens were to be affixed on the monthly closing date. They were intended to provide an incentive not to hoard the money. Other ideas for making the free money practicable are connected with the terms table money, dynamic double currency (Theophil Christen), shock method, money circulation tax and serial money.

In Gesell's opinion, the decline in value means that the means of payment loses its "unnatural" special position vis-à-vis the goods; it is now just as "perishable" as the goods themselves. The owner of "natural" money can now no longer demand interest for its issuance and thus exploit the scarcity of capital. Such money would correspond to the essence of nature, since like real goods it devalues itself and is therefore perishable. {{{Review}}}

Goals and demands

Historical FFF Logo of the Free Trade Movement

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Physiocratic money with cancellation fields

The main goal of the free economy is a stable, social justice Market economy. In a free economic system, production and consumption should be mediated via the market (market economy). Private or public Companies bear the business risk and generate a profit-related return with the capital invested. Financial assets are subject to a negative interest rate, which makes them "money in circulation". This is intended to increase the circulation of free money, which would provide sufficient funds for investment. The free money would even allow the general market interest rate level to fall to 0% (or even below). At the same time, the reform of the open land market is intended to transfer to the general public and socialise the non-cooperative incomes that arise from land ownership and cannot be eliminated systematically.

The reform demands of the free economy movement, which grew up in the German-speaking countries, especially in the 1920s, are often summarised as "F.F.F.": Free money, open land, fixed currency.

Free money (monetary reform)

The main demands of this monetary policy are:

• Introduction of a circulation-hedged money currency
• Abolition of the gold standard

Silvio Gesell called for the abolition of the gold cover that had been spread worldwide until then, because only a limited amount of gold was available for the money cycle, while an economy could grow almost indefinitely. Gold shortage could cause deflation, surplus gold could lead to destabilizing inflation.

In free economic theory, the fundamental problem of money is the lack of storage costs. Everything in nature is subject to the rhythmic alternation of becoming and passing away, only money seems to be withdrawn from the transience of everything earthly.

There are two approaches to illustrate this: The social approach is based on the analysis of Pierre-Joseph Proudhon, which states that the owner of money would have a decisive advantage over the owner or provider of goods, products, services and labor: The storage of goods, products and services would generate running costs, but not money. This would give the money owner (the demand) a systemic advantage over the supply, which would result in money being sold at a higher price than goods. Gesell defined this additional value as the "original interest", the amount of which he estimated at 4-5 percent annually.

In his opinion, investments would not be made if the general market interest rate were below three percent. Instead, it would be held as liquid assets and, according to Gesell, would be used for speculation (economic) purposes. From the perspective of the investors, the investment crisis would arise, from the perspective of the entrepreneurs, the impression of a shortage of capital would arise. Experience shows that deflation and speculation bubble would be the consequences of such situations.

As an antidote to this, Gesell offers the circulation hedge, which is intended to ensure that the money with negative interest rates continues to be invested. The circulation hedging is therefore intended to act like a tax on liquidity in order to control the circulation speed. This should - according to the free economic assumption - lead to full employment, comparable to a permanent boom, whereby wages would rise while prices would fall in real terms.

Such a "free money" does not fulfil the value retention function of money. Sometimes the term Schwundgeld, coined by Otto Heyn, is also called Schwundgeld, Freiwirtschaft und Rassenwahn. Critique of capitalism from the right: The case of Silvio Gesell. Konkret Verlag, 2012, Friedrich Burschel (ed.), ISBN 978-3-930786-64-0.

Field

A further point of criticism of the free economy of the existing distribution of production goods and resources is the private ownership of soil. In general, it provides its owners with a soil rent, which accrues to them as unproductive income], both in the case of self-use of the land and in the case of leasing and letting. According to the free economic view, the land rent should not be put at private disposal but should be paid to the general public, because land is a product of nature and not a man-made good, and the value, and thus the land rent, is only created by the general public.

Through land reform , the free economy wants to combine public ownership of land with its private use. To this end, it demands that all land be transferred into public ownership against full compensation of its previous owners, for example into the ownership of the municipalities. The previous owners retain the right of use of their land against payment of a regularly recurring usage fee to the public authorities. Land in hitherto public ownership which is not expressly used for public purposes shall be awarded to the highest bidder for use.

In contrast to land, facilities such as buildings or industrial plants that are or will be constructed on land can and should remain private property and can be used privately because they are the result of human labour. The rights to rent or lease such facilities remain guaranteed according to the free market concept, but not the private leasing of land use.

Anyone who needs and wishes to use land - both private individuals and legal entities, both previous owners and new users - should pay the competent land administration authority a regular recurring user charge for the use of the land, the amount of which corresponds approximately to the land rent. The amount of the levy should be calculated according to the desirability of the land in question and can, for example, be determined as the highest bid in an auction of rights of use. Thus the amount of the user charge would be determined by supply and demand in accordance with market economy principles.

This land reform requires the creation of a legal separation between land and the facilities located on it, whereas the existing law does not distinguish between land and buildings, but refers to both together as land and treats them legally as a whole. With the new order trade and speculation with land would no longer be possible, but still the purchase and sale of private facilities would be possible. When a building is sold, the buyer would also have to take over the land use contract with the relevant authority from the seller.

With the land use levy, the land rent will flow to the general public. Gesell himself planned to distribute the money gained by the socialisation of the land rent as a mother's pension, a kind of high child benefit, to the mothers in order to make them economically independent of men.

A land reform based on a free-enterprise model would be necessary to prevent big money owners whose unproductive income from interest payments would be cut off after the introduction of free money from switching to buying up land. This would cause land prices to climb to immeasurable heights, and with them the land pension in private hands, to the great detriment of all the others, because everyone is dependent on land for living and working.

Gesell refers to the land reform theory of Henry George. This theory provides for a property tax on land at a level that adequately neutralizes the basic pension. However, Gesell believes that open land is the systemically superior solution.

Free trade

Another aspect that belongs to the free economy is free trade. This means the abolition of national economic borders. Since free trade is demanded and advocated by practically all economists, free trade is the only free economic aspect that seems to be globally accepted. Organizations such as the WTO exert great international pressure on states to reduce customs and import barriers and to abolish export subsidies, in the conviction that intensive trade relations and interdependencies ensure long-term peace between the countries of the world, which is consistent with the original free trade movement.

History

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Title page of the Geseller writing Reformation in the Coinage [...] (1891)

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Letter Gesells to the land reformer Michael Flürscheim

The beginnings of the theory of free enterprise lie in the last decade of the 19th century. In 1891 Silvio Gesell published a brochure in Buenos Aires / Argentina entitled The Reformation in Coinage as a Bridge to the Social State. This writing "was the nucleus of an independent social movement, which later got the name Freiwirtschaftsbewegung" It reflects Gesell's experiences as a merchant in crisis-ridden Argentina. His reflection on the causes of economic crises led him to contradict Marxism. Human exploitation - according to Gesell - has its causes not in the private ownership of means of production, but in a defective currency system. In his second paper Nervus rerum, also published in 1891, he further elaborated on this idea.

In addition to a radical currency reform, Gesell also demanded an equally far-reaching land reform. He was inspired to do so by a whole series of "learned and unlearned theorists [...], who had given their attention to the land question as the focal point of the whole social coexistence". To be mentioned here Theodor Stamm. (1822-1892), member of the Social Democratic Workers' Party (Germany), who was one of the first to publish in his 1871 book Erlösung der darbenden Menschheit demanded to eliminate private property by a "just expropriation procedure" and in 1874 applied (unsuccessfully) to include it in the programme of the Labour Party.

In 1890 the Austrian Theodor Hertzka (1845-1924) with his book Freiland, written in novel form, met with great response. Not only did he use the term for the first time, but he also drafted the concepts of free trade and free money as fundamental principles of his economic model. The ideas of the book found many supporters in Germany and Austria and led to settlement projects, associations and political currents in various countries. Other contemporary representatives of land reform ideas by which Gesell was inspired were the American Henry George. (1839-1897), the Baden (Land) Michael Flürscheim (1844-1912) and the Prussian Adolf Damaschke (1865–1935). While George and Damaschke wanted to leave it at private land ownership and tax only the increase in value for the benefit of society, Silvio Gesell followed Flürschim's demand to transfer the ownership of land into the hands of the state, but to compensate the former private owners. A brother-in-law of Michael Flürscheim, who Emder family doctor Max Sternberg, also came from the land reform movement and turned to the free economy after 1922. He was responsible for the spread of the Gesellsche Lehren in northwest Germany.

Early followers

In 1909, the trained carpenter Georg Blumenthal joined the then small circle of socialites. He came from the trade union movement and during his years of travel he was Anarchists and independent socialists. The Workers' School, which he later attended, introduced him to Benedikt Friedländer and through him to Adolf Damaschke and the Bund deutscher Bodenreformer. There he heard about Gesell, who was living in Argentina again during this time, read his writings and lectured on his newly gained insights into anarchist and anarcho-syndicalism. Circling. Only a short time later he founded the Verein für physiokratische Politik in Berlin, which Gesell joined from South America. In 1910 followed the foundation of the Physiokratischer Verlag and two years later that of the journal Der Physiokrat, whose first issue was published in May 1912. In 1913 Blumenthal expanded the association he had founded into the Physiokratische Vereinigung.

Another important multiplier for the dissemination of the Gesell Teaching was the former Roman Catholic country priest and Damaschke supporter Paulus Klüpfel. (1876–1918). In 1914 he met first Blumenthal and then Gesell, for whom he soon worked as a private secretary. Only one year later Klüpfel founded the Freiland-Freigeld-Bund with headquarters in Berlin-Steglitz. Unlike Gesell and Blumenthal, he was strongly influenced by Christian ethics, although he had separated from the church. "In a certain respect", according to Günter Bartsch, "Klüpfel was the free-enterprise Franz von Assisi". He took a critical look at the Physiokratische Vereinigung, founded the Freiland-Freigeld-Bund (FFB) in mid-1915 and, among other things, caused some of the Gesellianer Blumenthal's to leave the association and become FFB members. Klüpfel exchanged letters with Walther Rathenau. He was unable to keep an arranged appointment with Rathenau; he died on 29 July 1918 after a long period of fasting "for the end of the war".

The Natural Economic Order appears

His programmatic essay The natural economic order through open land and free money (NWO), "the standard work of the free economy theory" published by Silvio Gesell himself in 1916. He stayed in Les Hauts-Geneveys during the First World War (French-speaking Switzerland), where he ran an agricultural business. The preface to the second edition, which appeared shortly afterwards, was written by the aforementioned Paulus Klüpfel. During Gesell's lifetime six editions of the NWO were published. Posthumously in 1930 the Stirn-Verlag Leipzig published a seventh edition, an eighth was published during the period of National Socialism in the Swiss Genossenschaft-Verlag freiwirtschaftlicher Schriften and finally in August 1949 a ninth post-war edition edited by Karl Walker was published by the Rudolf Zitzmann Verlag in Nürnberg.

New multipliers

{{{Review}}} In 1949, a popular initiative (Switzerland) "to ensure purchasing power and full employment (free money initiative)" took place in Switzerland. However, this initiative was rejected in the referendum of 15 April 1951 by 87.6% of the votes against, and received fewer votes in favour than signatures were collected to submit the popular initiative. However, the referendum accepted the Federal Assembly's alternative draft, with 69.0% and in 22 (19 6/2) states. The subject of the vote was not, however, the introduction of circulation hedging itself, but the partial abandonment of gold backing in order to ensure monetary stability. With the collapse of the Bretton Woods System this gold cover was later abolished.

Free-market oriented practical experiments

Settlement and cooperative projects

At the suggestion of Theodor Hertzka's book Freiland numerous consumer, productive and building cooperatives, as well as various settlement projects back, including the project Eden, the later residence of Gesells.

currency projects

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WÄRA display 1931

One of the first attempts to test the free-enterprise free money theory in practice was the so-called WÄRA experiment. It was conducted in many places in Germany at the end of the 1920s. The experiment was initiated by Gesell supporters Hans Timm and Helmut Rödiger in 1926. {{Main article}}

After 1929, the mining engineer Max Hebecker carried out the Schwanenkirchener Freigeldexperiment in cooperation with Hans Timm and Helmut Rödiger. In the following period the region around Schwanenkirchen experienced an economic upswing which was highly regarded by the public.

The so-called Wunder von Wörgl became known beyond the borders of Europe. In the context of the world economic crisis in 1929, the mayor of Wörgl Michael Unterguggenberger worked out an emergency aid program based on the Gesellsche Freiwirtschaftslehre [Society for Free Trade and Commerce], which led to circulating secured free money being issued as a complementary currency for the Wörgl region.

Also in the United States of America at the beginning of the 1930s a free-enterprise money experiment was carried out in many places. Under the title stamp scrip, the experiment gained so much popularity that the economist Irving Fisher published a scientific study on it.

A continuation of these historical free money experiments is the so-called Regiogeld, which today is in circulation in many places under different names as a complementary currency. {{Main Article}}

Free enterprise organizations

{{{Review}}} During the period of the Weimar Republic, several free-market oriented lists ran for the Reichstag elections between 1924 and 1932. Among them, the Freiwirtschaftsbund F.F.F. was the most successful grouping, which 1924 received almost 40,000 votes or 0.1 %, thus not entering parliament.

On 1 May 1933, Wilhelm Radecke's initiative led to the founding of the Rolandbundes, a "national federation to secure the market sovereignty of the Reich". The new political system - Radecke said in the rallying cry of the Roland Bund - was not to be overthrown but supported, even more: "Roland wanted to complete it". The Rolandbund had at least 1500 members. It was dissolved - probably at the instigation of Hjalmar Schacht - after the so-called Röhm Putsch on 30 June 1934.

Very soon after the Second World War , free-market-oriented parties were constituted in the Western occupation zones, of which the Radical Social Freedom Party of the British occupation zone was the most successful: in the Hamburg City Elections 1949 it won a parliamentary seat with 2.0% of the vote, which was taken by Willi Eberlein. For the Bundestag election 1949, the RSF, the Social Freedom Party of the American and the Free Social Party of the French occupation zone ran jointly in six of the then eleven federal states, but without winning seats. In 1950, the three parties mentioned above merged to form the Human Economic Party Free Social Union (FSU). After 1968, the party's name was changed to Democratic Centre. From 2001 it called itself Human Economic Party. Due to the small number of members, it currently plays no significant role in German politics. In the opinion of the Federal Election Committee, the prerequisites for the recognition of party status are now lacking. In September 2010, the party had itself entered in the Register of Associations.

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Memberbook of the Free Social Union (since 1950)

Other organisations that deal with and are committed to the free economy are

• Initiative for Natural Economic Order (INWO) Deutschland e. V., also INWO Switzerland and INWO Austria, with the magazine Fairconomy
• DF German Free Trade Association
• Förderverein Natürliche Wirtschaftsordnung e. V. with the magazine Humane Wirtschaft
• Bündnis Zukunft; this party was founded in 2001 as a free-market spin-off from Bündnis 90/Die Grünen
• Aktion Dritter Weg/Liberalsoziale within the party Bündnis 90/Die Grünen, represents free economic ideas and publishes them in the magazine Alternativen (see Georg Otto)
• "Freiwirtschaftlicher Jugendverband" e. V.

The following private educational institutions try to spread free economic ideas through courses, conferences and the publication of magazines:

• Sozialwissenschaftliche Gesellschaft e. V., Northeim with the [[Journal of Social Economics]
• Foundation for reform of monetary and land readjustment in Kirn/Nahe
• Seminar for the Freedom of Culture, Economy and the State e. V. in Bad Boll

Among other things, they also represent free-market positions:

• Christen für gerechte Wirtschaftsordnung e. V. (CGW) (various streams of ideas: Judeo-Christian social teaching, free economic and anthroposophical insights, insights of modern monetary theory and environmental economics)
• Association Equilibrism (holistic approach to the sustainable solution of existential global problems in the social, political and ecological fields)

Collections of free enterprise literature include

• in the Archive for Monetary and Land Reform at the University of Oldenburg (see Werner Onken)

Role of the free economy in the economic sciences

Immediately after company

John Maynard Keynes]] in his 1936 major work General Theory of Employment, Interest and Money came to the following assessment of Gesell's doctrine: "I believe that the future will learn more from the spirit of Gesell than from that of Marx". In: Keynes, General Theory, Chapter 23 (Notes on Mercantilism, The Usury Laws, Stamped Money and Theories of Under-consumption) - VI</ref> The US-American economist Irving Fisher, inspired by a model experiment in Wörgl, advocated the introduction of "free money" in the form of "stamp scrips" in the USA.

Until the beginning of the 21st century

The later winner of the Nobel Prize for Economics Maurice Allais outlined in his main work "Économie et Intérêt" ("Wirtschaft und Zins") a "socialisme concurrentiel", or "planisme concurrentiel", which contains as central elements the nationalisation of land ownership and the "continuous devaluation of the money in circulation". Allais saw both as conditions for maximum economic efficiency. In doing so, he referred to the proximity of his concept to that of Gesell. Similar to this, he pleaded for a "systematic organization of competition" that would eliminate all privileges and monopolies.

Free enterprise has rarely been discussed in current economics textbooks and journals. However, Dieter Suhr, professor of public law at the University of Augsburg from 1975 to 1990, has in his books made fundamental constitutional criticism of today's monetary system and provided essential, both theoretical and practical impulses for the further development of free enterprise.

Bernd Senf, Professor of Economics at the Fachhochschule für Wirtschaft Berlin, presented in his book Die blinden Flecken der Ökonomie, first published in 2001, the theory of free enterprise as one of seven historically significant schools of economics (besides Physiokratie, Classical Economics, Marxism, Neoclassical Theory , Keynesianism and Monetarism).

In 2003 Roland Wirth received his doctorate from Peter Ulrich at the University of St. Gallen with a dissertation on the topic Market Economy without Capitalism. A re-evaluation of free enterprise theory from the perspective of economic ethics. After reviews by Jost W. Kramer, Professor for General Business Administration at the Hochschule Wismar, and by Dr. Stephan Märkt, Bologna advisor to the HRK at the Leuphana University of Lüneburg, summarized the Berlin Professor Hermann Kendel, Wirth's doctoral thesis brings "Silvio Gesell's ideas back into the general expert discussion."

Present

With the beginning of the world economic crisis from 2007, the idea of circulation-secured money was taken up again in various places. So referred Gregory Mankiw or Willem Buiter referred to Silvio Gesell.

On 9 March 2014, ECB Executive Board member Benoît Cœuré addressed the ECB's Money Market Contact Group with the speech Life below zero: Learning about negative interest rates. In it, he explained that the idea of negative interest rates, or "taxation of money", goes back to 19th century, to Silvio Gesell, the German founder of free enterprise, supported by Irving Fisher and called by John Maynard Keynes "a strange prophet, unjustly overlooked".

The Greek financial crisis 2015 also prompted experts, including the British economic historian and Keynes biographer Robert Skidelsky, the u.s. economics professor miles kimball, the British journalist and university lecturer George Monbiot and the Capital International Group, to point out Gesells Freigeld as a possible solution. Stanley Fischer, Vice President of the US Federal Reserve FED, mentioned in his speech Monetary Policy, Financial Stability, and the Zero Lower Bound on January 3, 2016 Silvio Gesell as one of the pioneers of negative interest rates.

criticism of the free economy

Liberal criticism of the free economy

The liberal social order is largely based on property law. The money circulation security fee restricts the right of the money owner to dispose of the money, which, according to the liberal view, also includes the right to hoard money. According to neoclassical theory, the interest corresponds to neoclassical. conception ([Eugen Böhm von Bawerk Eugen von Böhm-Bawerk) of the time preference]rate of the owner of money and thus also of human needs. According to the neoclassical view, the interest costs also correspond to the social preference. Every consumer has the free choice between paying the interest costs or refraining from consumption.

Economic criticism of the free economy

The circulation fee for cash is the core idea of the free-market monetary reform.

= Substitution by other currencies

Criticism is levelled, among other things, at the free-market premise that money would be forced onto the consumer or credit market by safeguarding circulation. The money secured in circulation would "instead" be substituted by foreign exchange and precious metal, which are not subject to a decline in value.

Gresham's Law Gresham's Law describes the effect that "bad money displaces good money in circulation". When there is a saturated market, any consumer who is faced with the choice of paying out with money in circulation or other money will make the payment with money in circulation. The other money will thereby "leave the country or disappear from circulation through hoarding".

= Inflation

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The money amounts M₁ to M₃

According to the quantity equation $M\cdot V=P\cdot Y$, an orbital protection increases the orbital velocity (money) $V$. In principle, this has the same effect as increasing the money supply $M$.

However, it does not take into account that the volume of trade $Y$ also increases due to the increased demand for goods in the free economy.

Also, a simple increase in the money supply $M$ can lead to a simultaneous decrease in the velocity of circulation if money is withdrawn from the monetary base $M_{0}$ and $M_{1}$, which has a high circulation speed $V_{0}$, is retained or saved and thus becomes the money supply $M_{2}$ or even $M_{3}$, which have lower circulation speeds $V_{3}<V_{2}<V_{1}<V_{0}$. This shift to money supply with lower (or no) circulation velocity occurs when people

• hope for price reductions and thereby hold back money or
• when individual people have a very high income which they cannot use directly, save up and thus take it out of the money cycle, which leads to an increase in the financial assets of these people without contributing to the volume of trade or
• when people accumulate money to purchase major investments.

The first two effects are counteracted in the case of free money by the circulation safeguards, because here the increase in the circulation speed is caused by the shift of the long- to medium-term invested money quantities $M_{3}$ and $M_{2}$ to the rapidly circulating money quantities $M_{1}$ and $M_{0}$.

Marxist criticism of the free economy

Marxists such as the economist Elmar Altvater describe the free economy as "[[Social Darwinism ] concept", and therefore reject it.

In his response to this accusation, Werner Onken]] states that the doctrine of evolution was then new and, above all, in contrast to the dogmas of the churches, was "en vogue" - also in the labour movement - and Gesell did not at all advocate a "struggle of the strongest against the weakest", but rather advocated "creating the conditions for a fair distribution of income and wealth by means of a fair framework of economic activity".

close to national socialism?

Altvater's accusation that many of Gesell's supporters made deals with National Socialists and sought their proximity, "unfortunately cannot be denied: In the historical context, however, it appears in a more differentiated light." Gesell's supporters had repeatedly made proposals to politicians of the democratic parties and the trade unions to stabilize the economic situation. However, they had not been considered, but ignored.

However, attempts to implement the free enterprise theory on National Socialism soon failed. As early as 1923, the National Socialist monetary theorist Gottfried Feder wrote in Völkischer Beobachter that the complete rejection and scientific settlement of the Gesell's "false doctrine" could be regarded as the common property of National Socialism. (See also: Silvio Gesell and Gottfried Feder) On January 24, 1933, a few days before Hitler's seizure of power, Wilhelm Radecke, Karl Walker and others organized held a free economic meeting in one of the largest halls in Berlin, entitled "Without Hitler into the Third Reich", which was crushed by a strong SA-Kommando, devastating the inventory and causing bloody injuries to participants. A short time later, interrogations, confiscations and acts of terror against about 2000 members of the free economic movement began abruptly throughout the country. Company supporters were taken to concentration camps, some of them died there.

Other representatives of the free economy doctrine

Hans Bernoulli

Karl Walker

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Two painters and freelancers Hans Trimborn (left) and Bernhard Grotzeck in conversation (around 1970)

• Tristan Abromeit (* 1934), co-founder of the party The Greens
• Hans Bernoulli (1876-1959), architect and co-founder of the Swiss Free Trade Association
• Georg Blumenthal (1872-1929), founder of the Physiocratic Movement and editor of Gesellscher Schriften
• Helmut Creutz (1923-2017), publicist, economic analyst, architect and well-known author of books for the free market
• Theophil Christen (1873-1920), Swiss mathematician, doctor and economist
• Eugen Drewermann (* 1940), German theologian and psychoanalyst
• Willi Eberlein (1904-1986), Member of the Hamburg Parliament 1949-1953 (RSF)
• Roland Geitmann (1941-2013), Professor of Public Law at the University of Applied Sciences Kehl from 1983 to 2006
• Eckhard Grimmel (* 1941), Professor of Geography at the University of Hamburg, co-founder of the Deutscher Freiwirtschaftsbund
• Bernhard Grotzeck (1915-2008), tax official and German painter; RSF candidate for the Bundestag 1949
• Max Hebecker (1882-1948), mining engineer and initiator of the Schwanenkirchen Wära experiment
• Peter Kafka (1933-2000), German astrophysicist and nuclear power critic, numerous lectures and publications critical of capitalism
• Margrit Kennedy (1939-2013), German architect, professor at the University of Hanover from 1991 to 2002
• Gustav Lilienthal (1849-1933), master builder and social reformer, younger brother of Otto Lilienthal, follower of Hertzka's open land movement, built in Eden and founded his own settlement cooperative Freie Scholle.
• Hans Langelütke (1892-1972), economist, president of the ifo Institute for Economic Research from 1955 to 1965
• Dirk Löhr (* 1964), tax consultant and professor for ecological economics and tax theory at the FH Trier
• Heinz Nixdorf (1925-1986), German entrepreneur, founder of Nixdorf Computer AG
• Franz Oppenheimer (1864-1943), German doctor, sociologist and economist, follower of Hertzka, further development to the theory of the 3rd way, a market economy without private property.
• Elimar Rosenbohm (1916-1997), economist, co-editor of the Journal for Social Economics (ZfSÖ)
• Paul von Schoenaich (1866-1954), Chairman of the German Peace Society (DFG)
• Fritz Schwarz (1887-1958), Swiss life reformer, author and politician
• Hans Konrad Sonderegger (1891-1944), Swiss theologian, attorney and National Councillor
• Hans Trimborn (1891-1979), German painter and co-initiator of a free economic WÄRA experiment on the island of Norderney
• Johannes Ude (1874-1965), Catholic priest and professor of theology, adherent of the free economy and persecuted by the Nazi regime
• Michael Unterguggenberger (1884-1936), former mayor of Wörgl, initiator of the open air experiment there
• Karl Walker (1904-1975), social scientist and author of economics
• Werner Zimmermann (1893-1982), life reformer, book author and co-founder of the Swiss WIR Wirtschaftsring (now WIR Bank)

Sympathizers and artists who reflected on free economic issues

• Michael Ends (1929-1995), German writer, processed the criticism of interest money, among others in his novel Momo.
• Johannes Kleinhappl (1893-1979), Catholic priest and moral theologian
• Hermann Oberth (1894-1989), German physicist and rocket pioneer
• Georg Otto (* 1928), co-founder of the political party The Greens, founder of the quarterly magazine "Alternatives", spokesman of the liberal-social wing of the Greens and chairman of the "Aktion Dritter Weg" (A3W)
• Ezra Pound (1885-1972), American poet, admiring mention of the Wörgler Freigel Experiment and the person Michael Unterguggenberger in the Pisaner Gesängen (Canto LXXVIII)

Libraries, archives, collections (selection)

• Uni Oldenburg.de: Archive for Monetary and Land Reform at the Carl von Ossietzky University Oldenburg
• UB.Unibas.ch: Free University of Basel Library
• Staatsarchiv des Kantons Bern: DQ 1312 Schriften zur Sozialen Frage: Freiwirtschaft, Freigeld, Abstinenz, Ernährungsformen, Erziehung, 1930-1933
• Bibliothek der Freien: Sammlung Freiwirtschaft (books and brochures). Status: April 2006

Literature (selection)

The Catalogue of Books, Brochures and Journals with Numerous Samples and Documentary Illustrations published by the Freiwirtschaftliche Bibliothek and edited by Werner Onken offers an almost complete list of free economic publications until 1986. The following selected references are arranged chronologically within the various subsections.

programmatic writings / sources

• Silvio Gesell: The Reformation in coinage as a bridge to the social state. Buenos Aires 1891. (A reprint of this writing can be found in: Silvio Gesell. Collected Works in 18 volumes and one register volume. Gauke Verlag: Hannoversch-Münden / Lütjenburg 1988-1997/2000. volume I)
• Silvio Gesell: Nervus Rerum (first continuation of the Reformation in Coinage). Self published: Buenos Aires 1891.
• Silvio Gesell: The Nationalization of Money (second sequel to the Reformation in Coinage). Self-published: Buenos Aires 1892.
• Silvio Gesell: The natural economic order through open land and free money. Self-published: Les Hauts-Geneveys 1916. This was a revised 2nd edition and summary of the following Gesell publications:
  • The realization of the right to full earnings from work. Published by Silvio Gesell and Bernhard Hermann: Les Hauts-Geneveys and Leipzig 1906.
  • The new doctrine of money and interest. Self-published: Les Hauts-Geneveys 1916

History of the free enterprise movement

• Hugo Luczak: Historical facts about the FFF movement in Germany. A review. No. 12 in the series Wissenschaftliche Schriftenreihe der FZ / Freiwirtschaftliche Zeitung. Publisher of the Freiwirtschaftliche Zeitung: Erfurt 1931.
• Hans-Joachim Werner: History of the Free Trade Movement. 100 years of struggle for a market economy without capitalism. Waxmann publishing house: Münster 1990. ISBN 3-89325-022-0.
• Günter Bartsch: Hans Timm and the Fisiokratische Kampfbund. In: Stirner's anti-philosophy. The revolutionary Fisiokraten. Two essays. Publisher Jochen Knoblauch (Edition Aurora): Berlin 1992. ISBN 3-924001-22-7.
• Günter Bartsch: The NWO Movement Silvio Gesells - Historical Outline 1891-1992/93. Gauke, Lütjenburg, now Kiel 1994, ISBN 3-87998-481-6.
• Werner Onken / Günter Bartsch: Natural economic order under the swastika. Adaptation and resistance. Gauke Verlag / Fachverlag für Sozialökonomie: Lütjenburg 1996, ISBN 3-87998-441-7.

Free Economic Experiments

• Norbert Rost: Experimental verification of the statements of the free economy theory. Diploma thesis, 2003 (full text as pdf; 2,7 MB)
• Fritz Schwarz: "The Experiment of Wörgl. Synergia, Darmstadt 2006, ISBN 3-9810894-5-6 (revised new edition, original: Bern 1951).
• Gebhardt Ottacher: Giving a sign to the world - The free-range experiment by Wörgl 1932/33 - Gauke, Kiel 2007, ISBN 978-3-87998-450-3.
• Wolfgang Broer: Fading money. Michael Unterguggenberger and the Wörgl Currency Experiment 1932/33. Studienverlag Wien, Innsbruck, Bozen 2007, ISBN 978-3-7065-4472-6. (The book is based on 2500 pages of so far unknown documents including the correspondence of the Wörgler Mayor and contains details of the social and economic history of the 1930s in Austria).

Free economic single topics

• Fritz Schwarz: Blessing and curse of money in the history of nations (2 volumes). Pestalozzi-Fellenberg: Bern 1925 (2nd edition: Bern 1931)
• Theodor Reents: The free economic state idea in the light of philosophy. Publisher of the Freiwirtschaftliche Zeitung: [no place mentioned; Erfurt?] 1933.
• Otto Valentin: Überwindung des Totalitarismus (PDF; 498 kB). Hugo Mayer publishing house, Dornbirn 1952.
• Werner Zimmermann: Money and land - questions of fate for all peoples. Blume Verlag: Bern 1966.
• Hans Weitkamp: The High Middle Ages - A Gift of the Monetary System. HMZ publishing house: Hilterfingen 1985.
• Christof Karner: Catholicism and free enterprise. The life reform program of Johannes Ude. Volume 928 in the series Europäische Hochschulschriften (Series 3: History and its ancillary sciences). Peter Lang GmbH / European Publishing House of Sciences: Frankfurt am Main; Berlin; Bern; Brussels; New York; Oxford; Vienna 2002. ISBN 3-631-38923-X

The Natural Economic Order in contemporary literature

• Dieter Suhr: Money without added value - relieving the market economy of monetary transaction costs. Fritz Knapp Verlag: Frankfurt am Main 1983, ISBN 3-7819-0302-8.
• Dieter Suhr: Optimal liquidity - a liquidity theory analysis and a competitive concept for the banking industry. (Together with Hugo Godschalk). Fritz Knapp Verlag, Frankfurt am Main 1986, ISBN 3-7819-0349-4.
• Joseph Huber: Full money. Employment, basic income and less government quota through a modernised monetary system. Duncker & Humblot, Berlin 1998, ISBN 3-428-09526-X.
• "The money of the future. Riemann, Munich 2002, ISBN 3-87998-435-2.
• Roland Wirth: Market economy without capitalism. A re-evaluation of the theory of free enterprise from the perspective of economic ethics (PDF; 107 kB). dissertation. St. Gallen Contributions to Business Ethics 34 St. Gallen 2003. ISBN 3-258-06683-3.
• Helmut Creutz: The Money Syndrome - Ways to a Crisis-Free Economic Order. Mainz, Aachen 2004, ISBN 3-928493-46-9, full text in pdf format, 1.5 MB.
• Helmut Creutz: The 29 mistakes around money. SIGNUM Wirtschaftsverlag, July 2004, ISBN 3-85436-362-1.
• Johannes Heinrichs: Leap out of the vicious circle. Social Ethical Economic Theory Volume I, Munich 2005, ISBN 978-954-449-200-7
• Margrit Kennedy: Money without interest and inflation. Goldmann, Munich 2006, ISBN 3-442-12341-0, Book as PDF file, 815 KB.
• Bernd Senf: The fog around the money. Interest rate problems - currency systems - economic crises. A clearing-up book. Gauke Verlag: Kiel 2007. ISBN 978-3-87998-456-5.
• Bernd Senf: The blind spots of the economy - economic theory in the crisis. Gauke Verlag: Kiel 2007. ISBN 978-3-87998-452-7.

Criticism and counter-criticism

• Oskar Stillich: The Free Money. A review. Industriebeamten-Verlag, Berlin 1923
• Heinrich Färber: The false doctrine of Silvio Gesells. 1st edition 1932; 2nd edition Graz 1996. ISBN 3-901805-03-6.
• Peter Bierl: Fading Money, Free Economy and Racial Delusion: Critique of Capitalism from the Right: The Case of Silvio Gesells. KKV concrete: 2012. ISBN 978-3930786640.

Web links

• Theophile Christians: Free Money Primer. Freiland-Freigeld-Verlag: Berlin 1924; put online by the German National Library.
• Materials on money, interest and debt problems (geldreform.com)
• Website of the Unterguggenberg Institute

Itemised statements and notes

{{{Standard data|TYP=s|GND=4128046-5}} [[Category:Free enterprise ] [[Category:Economic system]] [[Category:Trade]]