The Natural Economic Order, published in 1916, encapsulates the theories of Silvio Gesell regarding a market-based economic model termed Freiwirtschaft. Born in 1862 in Sankt Vith, Gesell navigated a career spanning commerce and social reform across Germany, Argentina, and Switzerland. His work centered on monetary imbalances and the structural flaws inherent in traditional financial systems.
Early Merchant Experience
After completing his gymnasium education, Gesell moved away from postal work to pursue commercial interests. He gained experience as a merchant across Berlin, Málaga, Braunschweig, and Hamburg. In 1887, he moved to Buenos Aires to operate a franchise of his brother’s business. The 1890 depression in Argentina proved a turning point, as the resulting economic instability prompted him to analyze the structural mechanics of money and trade.
Twenty questions, eight minutes on the clock, and a percentile measured against everyone who has taken it. No sign-up.
Take the IQ test →Monetary Theory and Freiwirtschaft
Gesell argued that money possesses an unfair advantage over physical goods because it does not decay. He believed this hoardability suppressed circulation and triggered recessions. To counter this, he proposed Freigeld, a currency system designed to depreciate over time. He also advocated for the nationalization of land, proposing a system where the state would purchase land from current owners using bonds and lease it back through competitive bidding, distinguishing his approach from the land-value tax concepts of Henry George.
Political Involvement and Later Years
In 1919, following an invitation from Ernst Niekisch, Gesell served as the finance minister for the Bavarian Soviet Republic in Munich. His tenure lasted only eight days. After the republic collapsed, he faced charges of treason but was acquitted following his own defense in court. He spent his final years in the Eden cooperative in Oranienburg, continuing his work until his death in 1930. He is buried at the Friedhof Oranienburg.
Fast facts
- Born: 1862, Sankt Vith
- Died: 1930, Oranienburg
- Primary Field: Economics
- Notable Publication: The Natural Economic Order
- Languages: German, Spanish, Esperanto
- Key Concept: Freiwirtschaft
- Citizenship: Belgium and Germany
Questions readers ask
What was Silvio Gesell's role in the Bavarian Soviet Republic?
He served as the People's Representative for Finance for eight days in 1919.
Why did he advocate for depreciating money?
He believed that money's ability to be hoarded without decay created an unfair advantage over producers of perishable goods.
Achievements
- Educated at gymnasium
