File:Of Money Part 2.pdf

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In this second part of the essay, the case is made for a 'Perishable currency' regime as a means of dealing with the fundamental problems of our existing interest bearing perpetual money.

Disclaimer (#3)Document.png essay  by Guido Preparata dated 2009
Subjects: demurrage, banking
Source: Guido Preparata's Web site (Link)

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Of Money, Heresy and Surrender, Part 2



A Plea for a Regional and Perishable Currency

Abstract

A fundamental, but neglected truth of the nature of money resides in its imperishable character. The advertence to this peculiar physical property of the money metals, which have traditionally been employed as the chief means of payment before being transmuted into the virtual form of contemporary bank money, has seldom been made in the vast literature dealing with the subject. It stands as one of the great merits of the German anarchist current of thought of the early twentieth century (Silvio Gesell and Rudolf Steiner in particular) to have acknowledged the extraordinarily unfair advantage wielded by “money” vis—a—vis the rest of the economy, and sought thereby to remedy this aboriginal distortion via the introduction of a genial device: a time—sensitive money certificate. This article explores the institutional and theoretical issues that have led to this innovation, and concludes with a brief survey of the record achieved thus far by the late attempts of introducing in several parts of the World regional currencies in substitution of proprietary bank money—i.e., money as we know it.

Introduction

A necessary condition, though possibly not a sufficient one, for the improvement of collective life is that the money of the World communities ought, like the goods and performances it is assigned to mirror, have an expiration date. In other words, money must die. The economic root of all social and economic evil does not so much reside in Man’s avid obsessions, but rather in the transformation of the means of payment —a mere intangible sign—into a tradable good, which is managed by an establishment of private owners —the oligopolistic banking cartel—within the virtual boundaries of a proprietary network. The wills and appetites of the network’s custodians perforce direct, shape and inform the activities of the World at large, for every economic endeavor begins indeed With the issuance of money. The first distortion wrought upon money was thus to have assimilated it to a commodity; a commodity,—gold above all, in fact— Which possesses the formidable, and perfectly uneconomic property of never perishing.

Proponents of a dying currency were granted a nook of the social forum during the nineteen twenties in Germany. Silvio Gesell (1862—l93O)—an ex-businessman of dental tools catapulted by anarchist demand to the post of Finance Minister in a five—day Soviet experiment in Munich (19l9)—, and Rudolf Steiner (l86l—19Z5)—the Austrian mystic that did not leave a single stone of the physical and praeternatural realms unturned, are the two isolated prophets of perishable money. They roused some passion in their time, but after the fire of the Depression and its bellicose resolution (WWII), their reflections on the nature of money were shoved from the discursive periphery to the warehouse of irrelevance.

These last years, however, it appears that movements advocating regional currencies and groups of committed dissidents seeking to bring decisions where they belong —in the community’s fold—are astir: at the grassroots, perishable money has been rediscovered; more and more individuals are striving to bypass the oligarchic network, by establishing alternative grids of economic exchange. Within such weaves of relations, a periodical charge imposed on money balances—i.e., the imposition of a negative rate of interest—would act as the natural stimulant to circulation and trade, as Well as the most conspicuous impediment to pecuniary hoarding, which is the curse of economic life.

This essay is divided into three sections. The first (On Money) introduces the money question initially by relating the life and exploits of the economic doyen of German anarchism, Silvio Gesell. Gesell’s crucial, yet still poorly known reformist endeavor, is complemented —in the second section (Heresy)—by the fascinating intuitions of Rudolf Steiner, who had reached, at about the same time, conclusions virtually identical to those of Gesell himself. There follows a review of the several alternative systems of exchange based on and inspired by this anarchistic tradition of regional self—help, which have been recently launched (for the most part in Germany) to overcome economic hardships and/or to stimulate communal entrepreneurship. The third and conclusive section (and Surrender) addresses the state of public knowledge in monetary matters by focusing on the tangle of offcial “theories” and opinions that presently account for the utter confusion reigning over this subject. Indeed, it will be seen that the most critical aspects of contemporary monetary policy bear a tight and intriguing connection to the very theoretical subtleties developed by the anarchist tradition three generations ago...

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