Freiwirtschaft

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Freiwirtschaft (German for free economy) is an economic idea founded by Silvio Gesell in 1916. He called it Natürliche Wirtschaftsordnung (natural economic order). His idea has not been put into practice by any state since then. However, in 1932, a group of Swiss businessmen used his ideas to found WIR, an organization which created an economic miracle and serves as an essential component of Switzerland's legendary economic stability[dubious ].

Freiwirtschaft consists of three central aspects, usually summed up as The Three Fs:

The (proposed) results include:

  • More private spending for consumption and investment
  • Consumers invest surplus money in expanding companies
  • Full employment: Work for everyone who can work
  • Rate of economic growth can be set by the society
  • Interest rates drop to almost zero percent in the long run
    • Freiland prevents high real estate prices
  • Tremendous social disparities will cease
  • Less working hours per week for everyone in the long run

There seems to be an attempt to realize Freiwirtschaft in a small area in Canada, based on artificial money called Gogo.

Contents

Flaws of the money system

Freiwirtschaft claims that current monetary systems are flawed. According to Adam Smith, prices convey information. For example, dropping prices mean that there is less demand or more supply. This leads to a buyer buying more, or a seller starting to produce something else. As a reaction, the price rises again. So, the price, together with the market participants, builds up a feedback loop around a stable, "ideal" price. At this stable price, the market is ideal, no one pays too much or earns too little, and there are no tendencies from either party to change that price. The "wobbling" around that ideal price is called self-stabilizing.

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