Johann Silvio Gesell (; 17 March 1862 – 11 March 1930) was a German-Argentine

economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...

, merchant, and the founder of

Freiwirtschaft (German language, German for "free economy") is an economic idea founded by Silvio Gesell in 1916. He called it ' (natural economic order). In 1932, a group of Swiss businessmen used his ideas to found the WIR Bank (WIR). Structure Freiwirtschaft ...

, an economic model for

market socialism Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owne ...

. In 1900 he founded the magazine ''Geld-und Bodenreform'' (''Monetary and Land Reform''), but it soon closed for financial reasons. During one of his stays in Argentina, where he lived in a vegetarian commune, Gesell started the magazine ''Der Physiokrat'' together with Georg Blumenthal. In 1914, it closed due to censorship. The

Bavarian Soviet Republic The Bavarian Soviet Republic, or Munich Soviet Republic (german: Räterepublik Baiern, Münchner Räterepublik),Hollander, Neil (2013) ''Elusive Dove: The Search for Peace During World War I''. McFarland. p.283, note 269. was a short-lived unre ...

, in which he participated, had a violent end and Gesell was detained for several months on a charge of treason, but was acquitted by a Munich court after a speech he gave in his own defense.

Life

Silvio Gesell's mother was Walloon and his father was German, originally from Aachen, who worked as a clerk in the then-

Prussian Prussia, , Old Prussian: ''Prūsa'' or ''Prūsija'' was a German state on the southeast coast of the Baltic Sea. It formed the German Empire under Prussian rule when it united the German states in 1871. It was ''de facto'' dissolved by an e ...

district of

Malmedy Malmedy (; german: Malmünd, ; wa, Måmdiy) is a city and municipality of Wallonia located in the province of Liège, Belgium. On January 1, 2018, Malmedy had a total population of 12,654. The total area is 99.96 km2 which gives a populati ...

, now part of

Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...

. Silvio was the seventh of nine children. After visiting the public Bürgerschule in

Sankt Vith St. Vith (german: Sankt Vith ; french: Saint-Vith ; lb, Sankt Väit ; wa, Sint-Vit) is a city and municipality of East Belgium located in the Walloon province of Liège. It was named after Saint Vitus. On January 1, 2006, St. Vith had a tota ...

, he attended Gymnasium in Malmedy. Being forced to pay for his living expenses from an early age, he decided against attending a university and worked for the '' Deutsche Reichspost'', the

postal system The mail or post is a system for physically transporting postcards, letters, and parcels. A postal service can be private or public, though many governments place restrictions on private systems. Since the mid-19th century, national postal syst ...

of the German Empire. Dissatisfied, he began an apprenticeship to his merchant brother in

Berlin Berlin ( , ) is the capital and List of cities in Germany by population, largest city of Germany by both area and population. Its 3.7 million inhabitants make it the European Union's List of cities in the European Union by population within ci ...

. Then he lived in Málaga,

Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , i ...

for two years, working as a

correspondent A correspondent or on-the-scene reporter is usually a journalist or commentator for a magazine, or an agent who contributes reports to a newspaper, or radio or television news, or another type of company, from a remote, often distant, locati ...

. He then returned to Berlin involuntarily to complete his

military service Military service is service by an individual or group in an army or other militia, air forces, and naval forces, whether as a chosen job ( volunteer) or as a result of an involuntary draft (conscription). Some nations (e.g., Mexico) require ...

. After this, he worked as a merchant in Brunswick and

Hamburg (male), (female) en, Hamburger(s), Hamburgian(s) , timezone1 = Central (CET) , utc_offset1 = +1 , timezone1_DST = Central (CEST) , utc_offset1_DST = +2 , postal ...

. In 1887, Gesell relocated to

Buenos Aires Buenos Aires ( or ; ), officially the Autonomous City of Buenos Aires ( es, link=no, Ciudad Autónoma de Buenos Aires), is the capital and primate city of Argentina. The city is located on the western shore of the Río de la Plata, on South ...

Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...

, where he opened a

franchise Franchise may refer to: Business and law * Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees * Franchise, a privilege to operate a type of business such as a cable television p ...

of his brother's business. The 1890 depression in Argentina, which hurt his business considerably, caused him to think about the structural problems caused by the

monetary system A monetary system is a system by which a government provides money in a country's economy. Modern monetary systems usually consist of the national treasury, the mint, the central banks and commercial banks. Commodity money system A commodity m ...

. In 1891, he released his first writing on this topic: ''Die Reformation des Münzwesens als Brücke zum sozialen Staat'' (''The Reformation of the Monetary System as a Bridge to a Social 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 a stay in Germany, Gesell relocated to

Les Hauts-Geneveys Les Hauts-Geneveys is a former municipality in the district of Val-de-Ruz in the canton of Neuchâtel in Switzerland. The municipalities of Boudevilliers, Cernier, Chézard-Saint-Martin, Coffrane, Dombresson, Engollon, Fenin-Vilars-Saules, Fonta ...

in the Swiss canton of Neuchâtel. He farmed in order to support himself while continuing his economic studies. In 1900, he created the magazine ''Geld- und Bodenreform'' (''Monetary and Land Reform''), but it failed in 1903 for financial reasons. From 1907 to 1911, Gesell was in Argentina again, then he returned to Germany and lived in the

vegetarian Vegetarianism is the practice of abstaining from the consumption of meat (red meat, poultry, seafood, insects, and the flesh of any other animal). It may also include abstaining from eating all by-products of animal slaughter. Vegetariani ...

commune ''Obstbausiedlung Eden'', which was founded by

Franz Oppenheimer Franz Oppenheimer (March 30, 1864 – September 30, 1943) was a German Jewish sociologist and political economist, who published also in the area of the fundamental sociology of the state. Life and career After studying medicine in Freiburg and ...

Oranienburg Oranienburg () is a town in Brandenburg, Germany. It is the capital of the district of Oberhavel. Geography Oranienburg is a town located on the banks of the Havel river, 35 km north of the centre of Berlin. Division of the town Oranienburg ...

, north of Berlin. There, he founded the magazine ''Der Physiokrat'' together with Georg Blumenthal. It folded in 1914 due to

censorship Censorship is the suppression of speech, public communication, or other information. This may be done on the basis that such material is considered objectionable, harmful, sensitive, or "inconvenient". Censorship can be conducted by governments ...

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

began. In 1915, Gesell left Germany to return to his farm in Les Hauts-Geneveys. In 1919, he was asked to join the

Ernst Niekisch Ernst Niekisch (23 May 1889 – 23 May 1967) was a German writer and politician. Initially a member of the Social Democratic Party (SPD), he later became a prominent exponent of National Bolshevism. Early life Born in Trebnitz (Silesia), and b ...

. The republic offered him a seat on the Socialization Commission and then appointed him the People's Representative for Finances. Gesell chose the Swiss

mathematician A mathematician is someone who uses an extensive knowledge of mathematics in their work, typically to solve mathematical problems. Mathematicians are concerned with numbers, data, quantity, structure, space, models, and change. History On ...

Theophil Christen and the economist Ernst Polenske as his assistants and immediately wrote a law for the creation of

Freigeld As part of the theory of Freiwirtschaft, Freigeld ('free money', ) is a monetary (or exchange) unit proposed by Silvio Gesell. Properties Freigeld has several special properties: * It is maintained by a monetary authority to be ''spending- ...

, a currency system he had developed. His term of office lasted only seven days. After the violent end of the Bavarian Soviet Republic, Gesell was detained for several months until being acquitted of

treason Treason is the crime of attacking a state authority to which one owes allegiance. This typically includes acts such as participating in a war against one's native country, attempting to overthrow its government, spying on its military, its diplo ...

by a

Munich Munich ( ; german: München ; bar, Minga ) is the capital and most populous city of the German state of Bavaria. With a population of 1,558,395 inhabitants as of 31 July 2020, it is the third-largest city in Germany, after Berlin and Ha ...

court A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in acco ...

. Because of his participation with the Soviet Republic, Switzerland denied him return to his farm in Neuchâtel. Gesell then relocated first to

Nuthetal Nuthetal is a municipality in the Potsdam-Mittelmark district, in Brandenburg, Germany. Geography ''Nuthetal'' is situated south-west of Berlin. The area was formed from a series of large moraines during the last ice age. The municipality orig ...

Potsdam-Mittelmark Potsdam-Mittelmark is a ''Kreis'' (district) in the western part of Brandenburg, Germany. Its neighbouring administrative units are (clockwise from the north) the district of Havelland, the free cities of Brandenburg and Potsdam, the state of Berl ...

, then back to Oranienburg. After another brief stay in Argentina during 1924, he returned to Oranienburg in 1927. There, he died of

pneumonia Pneumonia is an inflammatory condition of the lung primarily affecting the small air sacs known as alveoli. Symptoms typically include some combination of productive or dry cough, chest pain, fever, and difficulty breathing. The severi ...

on 11 March 1930. He promoted his ideas in

German German(s) may refer to: * Germany (of or related to) ** Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ge ...

and in

Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many Latin American countries **Spanish cuisine Other places * Spanish, Ontario, Can ...

Villa Gesell Villa Gesell is a seaside resort city in Villa Gesell Partido, Buenos Aires Province, Argentina. It was founded in 1931, with the intention of turning a dune field into a timber plantation.

, a seaside town in Buenos Aires Province, Argentina was founded by his son, Don Carlos Idaho Gesell, who named it after his father.

Economic philosophy

Gesell considered himself a

world citizen Global citizenship is the idea that one's identity transcends geography or political borders and that responsibilities or rights are derived from membership in a broader class: "humanity". This does not mean that such a person denounces or waives ...

and was inspired by

Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of the Progressive Era. He inspired the eco ...

to believe that the

earth Earth is the third planet from the Sun and the only astronomical object known to harbor life. While large volumes of water can be found throughout the Solar System, only Earth sustains liquid surface water. About 71% of Earth's surfa ...

should belong to all people, regardless of

race Race, RACE or "The Race" may refer to: * Race (biology), an informal taxonomic classification within a species, generally within a sub-species * Race (human categorization), classification of humans into groups based on physical traits, and/or s ...

class Class or The Class may refer to: Common uses not otherwise categorized * Class (biology), a taxonomic rank * Class (knowledge representation), a collection of individuals or objects * Class (philosophy), an analytical concept used differentl ...

wealth Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...

religion Religion is usually defined as a social- cultural system of designated behaviors and practices, morals, beliefs, worldviews, texts, sanctified places, prophecies, ethics, or organizations, that generally relates humanity to supernatural, ...

, or age and that

border Borders are usually defined as geographical boundaries, imposed either by features such as oceans and terrain, or by political entities such as governments, sovereign states, federated states, and other subnational entities. Political borders c ...

s should be made obsolete. But his land reform proposal was different from

Georgism Georgism, also called in modern times Geoism, and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land—includi ...

. He believed that taxes could not solve the problem of rent on land, as taxes could be transferred to tenants. He thought we must abolish the private ownership of land and put free-land reform, a sort of public lease of land, into effect. According to Silvio Gesell, it is not effective to establish welfare systems without abolishing private ownership of land because the proceeds of the labor of workers are determined by the proceeds of labor that they can obtain on free land. The benefits gained by the welfare system are not to increase the proceeds of labor that workers can obtain on free land, but rather to increase the proceeds of labor that they can obtain on the lands of landowners. Private ownership of land converts all the advantages of using one's land into cash and it belongs to the landowner. In order not to cancel the effects of welfare policies, Silvio Gesell believed that Free-Land reform was needed. Gesell based his economic thought on the self-interest of individuals, which he saw as a "natural" and healthy motive, in satisfying their needs and being productive. Gesell believed that an economic system must do justice to individual proclivities; otherwise the system would fail. He believed that this stance put him in opposition to

Marxism Marxism is a left-wing to far-left method of socioeconomic analysis that uses a materialist interpretation of historical development, better known as historical materialism, to understand class relations and social conflict and a dialectical ...

, which, Gesell considered, proposed an economic system that was against human nature. Believing that the talent and selfishness of individuals must be taken into account, Gesell called for free, fair business competition, with equal chances for all. This included the removal of all legal and inherited privilege. Everyone should rely only on their abilities to make a living. In the "natural economic order" which Gesell recommended, the most talented people would have the greatest income, without distortion by

interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...

and

rent charge In English property law, a rentcharge is an annual sum paid by the owner of freehold land (terre-tenant) to the owner of the rentcharge (rentcharger), a person who need have no other legal interest in the land. They are often known as chief rents ...

s. The economic status of the less-talented would improve because they would not be forced to pay interest and rent charges. According to Gesell, this would result in less difference between the poor and the rich. Furthermore, greater

average income Per capita income (PCI) or total income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population. Per capita i ...

s would mean that the poor would have a greater chance of escaping poverty, in part because other poor people would have greater disposable income and spending power. Some regard Gesell's idea as a negative interest rate policy. The difference between them is that, with the free-money reforms of Gesell, hoarding money becomes impossible because the face-value of money is depreciated regularly. This forces the circulation of money. With negative interest, on the contrary, there is the possibility of hoarding money because the face value of money is constant and people can use their money as a means of saving. For example, Japan's negative interest rates are driving up the sales of safes and strongboxes. Gesell denied value theory in economics. He thought that value theory is useless and prevents economics from becoming science and that a currency administration guided by value theory is doomed to sterility and inactivity.

Works

* Gesell, Silvio
''The Natural Economic Order''
Revised edition. London: Peter Owen, 1958.

In German

* ''Die Reformation des Münzwesens als Brücke zum sozialen Staat.'' Selbstverlag, Buenos Aires 1891 * ''Die Verstaatlichung des Geldes.'' Selbstverlag, Buenos Aires 1892 * ''Die Anpassung des Geldes und seiner Verwaltung an die Bedürfnisse des modernen Verkehrs.'' Herpig & Stieveken, Buenos Aires 1897 * ''Die argentinische Geldwirtschaft und ihre Lehren.'' 1900 * ''Das Monopol der schweizerischen Nationalbank und die Grenzen der Geldausgabe im Falle einer Sperrung der freien Goldausprägung.'' K. J. Wyss, Bern 1901 * ''Die Verwirklichung des Rechts auf den vollen Arbeitsertrag durch die Geld- und Bodenreform.'' Selbstverlag, Les Hauts Geneveys/Leipzig 1906 * ''Die neue Lehre von Geld und Zins.'' Physiokratischer Verlag, Berlin/Leipzig 1911 * ''Die natürliche Wirtschaftsordnung durch Freiland und Freigeld.'' Selbstverlag, Les Hauts Geneveys 1916
9. Auflage herausgegeben von Karl Walker
Rudolf Zitzmann Verlag, Lauf 1949
PDF; 1,4 MB
* ''Gold oder Frieden? Vortrag, gehalten in Bern am 28. April 1916.'' Selbstverlag, Les Hauts Geneveys 1916 * ''Freiland, die eherne Forderung des Friedens. Vortrag, gehalten im Weltfriedensbund in Zürich am 5. Juli 1917 in Zürich.'' Selbstverlag, Les Hauts Geneveys 1917 * ''Der Abbau des Staates nach Einführung der Volksherrschaft. Denkschrift an die zu Weimar versammelten Nationalräte.'' Verlag des Freiland-Freigeld-Bundes, Berlin-Steglitz 1919 * ''Die gesetzliche Sicherung der Kaufkraft des Geldes durch die absolute Währung. Denkschrift zu einer Eingabe an die Nationalversammlung.'' Selbstverlag, Berlin/Weimar 1919 * ''Das Reichswährungsamt. Wirtschaftliche, politische und finanzielle Vorbereitung für seine Einrichtung.'' Freiland-Freigeldverlag, Rehbrücke 1920 * ''Internationale Valuta-Assoziation (IVA). Voraussetzung des Weltfreihandels – der einzigen für das zerrissene Deutschland in Frage kommenden Wirtschaftspolitik.'' Freiwirtschaftlicher Verlag, Sontra 1920 * ''Die Freiwirtschaft vor Gericht.'' Mit einer Einleitung von Richard Hoffmann. Freiland-Freigeld-Verlag, Erfurt/Bern 1920 * ''An das deutsche Volk! Kundgebung des Freiwirtschaftlichen Kongresses zu Hannover.'' Freiland-Freigeld-Verlag, Erfurt 1921 * ''Deutsche Vorschläge für die Neugründung des Völkerbundes und die Überprüfung des Versailler Vertrages. Öffentlicher Vortrag, gehalten in der Aula des Gymnasiums zu Barmen am 20. Dezember 1920.'' Verlag des Freiland-Freigeld-Bundes, Barmen-Elberfeld 1921 * ''Die Wissenschaft und die Freiland-Freigeldlehre. Kritik und Erwiderung.'' Ohne Verfasserangabe erschienen. Erfurt/Berlin 1921 * ''Denkschrift für die Gewerkschaften zum Gebrauch bei ihren Aktionen in der Frage der Währung, der Valuta und der Reparationen.'' Selbstverlag, Berlin-Rehbrücke 1922 * ''Die Ausbeutung, ihre Ursachen und ihre Bekämpfung. Zweite Denkschrift für die deutschen Gewerkschaften zum Gebrauch bei ihren Aktionen gegen den Kapitalismus. Vortrag, gehalten in der Sozialistischen Vereinigung zur gegenseitigen Weiterbildung in Dresden am 8. Mai 1922.'' Selbstverlag, Berlin-Rehbrücke 1922 * ''Die Diktatur in Not. Sammelruf für die Staatsmänner Deutschlands.'' Freiland-Freigeld-Verlag, Erfurt 1922 * ''Das Trugbild der Auslandsanleihe und ein neuer Vorschlag zum Reparationsproblem. Eine weltwirtschaftliche Betrachtung, eine Warnung vor Illusionen und ein positiver Lösungsvorschlag.'' Freiwirtschaftlicher Verlag, Erfurt 1922 * unter dem Pseudonym Juan Acratillo:

'' 1922
PDF
* ''Der Aufstieg des Abendlandes. Vorlesung, gehalten zu Pfingsten 1923 in Basel auf dem 1. Internationalen Freiland-Freigeld-Kongress.'' Freiland-Freigeld-Verlag, Berlin/ Bern, 1923. * mit Hans Bernoulli und Fritz Roth: ''Das Problem der Grundrente. Einleitende Gedanken zu einer wissenschaftlichen Abklärung.'' Selbstverlag des Schweizer Freiwirtschaftsbundes, Bern 1925 * ''Die allgemeine Enteignung im Lichte physiokratischer Ziele.'' Selbstverlag, Potsdam 1926 * ''Der abgebaute Staat. Leben und Treiben in einem gesetz- und sittenlosen hochstrebenden Kulturvolk.'' A. Burmeister Verlag, Berlin-Friedenau 1927 * ''Reichtum und Armut gehören nicht in einen geordneten Staat.'' Werkauswahl zum 150. Geburtstag, zusammengestellt von Werner Onken. Verlag für Sozialökonomie, Kiel 2011,

In Spanish

* ''Nervus rerum.'' Selbstverlag, Buenos Aires 1891 * ''El Sistema Monetario Argentino. Sus Ventajas y su Perfeccionamento.'' Selbstverlag, Buenos Aires 1893 * ''La Cuestion Monetaria Argentina.'' Buenos Aires 1898

References

External links

* * * Full text o
''The Natural Economic Order''

Money reform
A number of online text related to money reform and interest free money, in several languages.

*

* ttps://web.archive.org/web/20100113195215/http://userpage.fu-berlin.de/~roehrigw/keynes/engl.htm John Maynard Keynes in "General Theory of Employment, Money and Interest" by Silvio Gesell* {{DEFAULTSORT:Gesell, Silvio 1862 births 1930 deaths Argentine Esperantists Argentine writers in German Bavarian Soviet Republic Freiwirtschaft Georgists German communists German socialists German anti-fascists German anti-capitalists German economists German emigrants to Argentina German Esperantists German libertarians German merchants Left-libertarians Libertarian socialists Monetary reformers People acquitted of treason People from St. Vith Walloon people