- 11 Aug, 23
Silvio Gesell 101: Founder of the Successful Freiwirtschaft Model
Silvio Gesell 101: Who is the Founder of the Successful Freiwirtschaft Model? in our article of Zatrun.com, we will cover in detail everything you need to know about Silvio Gesell, the founder of the successful Freiwirtschaft model that our readers are curious about.
Table of Contents
Who is Silvio Gesell?
Johann Silvio Gesell was a German-Argentine economist, trader, and founder of the economic model of Freiwirtschaft. In 1900, he founded the Geld-und Bodenreform (Money and Land Reform) journal, which was short-lived due to financial reasons. While living in Argentina, he co-founded Der Physiokrat journal with Georg Blumenthal. However, it closed down in 1914 due to censorship.
Silvio Gesell’s mother was of Walloon origin, while his father was German and worked as a civil servant in the Malmedy region of Prussia. Silvio was the seventh of nine children. In 1887, he settled in Buenos Aires, Argentina, and opened a branch of his brother’s business. The Argentine depression of 1890 caused serious damage to his business, and he began to think about the structural problems of the monetary system.
In 1891, he published his first article on this topic: Die Reformation des Münzwesens als Brücke zum sozialen Staat (The Reform of the Monetary System as a Bridge to the Social State). He later wrote works such as Nervus Rerum and The Nationalization of Money. He left his business to his brother and returned to Europe in 1892. After a short stay in Germany, he settled in Les Hauts-Geneveys in the Neuchâtel canton of Switzerland. While continuing his economic studies, he supported himself by farming.
In 1900, he founded the Geld- und Bodenreform (Money and Land Reform) journal, which failed due to financial reasons in 1903. Between 1907 and 1911, Gesell returned to Argentina and then to Germany, where he lived in the Obstbausiedlung Eden vegetarian commune founded by Franz Oppenheimer in Oranienburg, north of Berlin. There, he co-founded Der Physiokrat journal with Georg Blumenthal. However, it closed down in 1914 due to censorship.
Views on Life:
Silvio Gesell saw himself as a global citizen and was inspired by Henry George. He believed that the world belonged to all people, regardless of factors such as gender, class, wealth, religion, or age, and that the relevance of borders had diminished. However, his proposals for land reform differed from Georgism. He believed that taxes could not solve the problem of land rent, as taxes could be transferred to tenants. Therefore, he advocated for the elimination of private land ownership and the implementation of free land reform (a type of land nationalization).
According to Silvio Gesell, social security systems are not effective if private land ownership is not abolished. This is because the income earned from workers’ labor is determined by the working income they could earn on free land. The benefits of social security systems do not increase the working income that workers could earn on free land, but instead increase the working income that landowners could earn on their land. Land ownership turns the advantages of using land into cash and belongs to the landowner. Silvio Gesell believed that Free Land Reform was necessary to avoid the cancellation of the effects of social security policies.
Ideas on Economy:
Silvio Gesell based his economic ideas on individual interests. He believed that the economic system should reflect these interests, which he saw as a “natural” and healthy motivation to meet individual needs and be productive. Thus, he considered the economic system to be against Marxism, which offers something contrary to human nature.
Believing that individual abilities and selfishness should be taken into account, Gesell suggested that everyone should have an equal chance to compete in a free and fair job market. This also includes the elimination of all legal and inherited privileges. Everyone should make a living based solely on their abilities.
In the “natural economic order” proposed by Gesell, the most talented individuals will have the highest income, without being affected by interest and rent prices. The economic situation of less talented individuals will also improve because they will not have to pay interest and rent fees. According to Gesell, this will reduce the gap between the rich and the poor. Additionally, the increase in average incomes will increase the chances of poor people getting out of poverty, as other poor people will have more purchasing power and spending ability.