The Natural Economic Order - Summary and Key Ideas

"The Natural Economic Order" by Silvio Gesell is a comprehensive exploration of economic theory, proposing solutions to economic problems through the application of the concepts of Free-Land and Free-Money. The book argues for an economic system that is adapted to human nature, respects the laws of natural selection, and promotes a fair exchange of goods and services.

The target group of "The Natural Economic Order" are individuals interested in economic theories, particularly those exploring alternatives to traditional capitalism and Marxism, such as economists, social scientists, and students of these disciplines.

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The Natural Economic Order

Key ideas

01

Silvio Gesell's "The Natural Economic Order" advocates for an economic system based on self-interest and free competition, which he believes will lead to human advancement and individual sovereignty, surpassing both communism and flawed capitalism.

02

Gesell challenges Marx's view on surplus value, suggesting it can be eliminated through unrestricted labor, land ownership reforms, and money deterioration, without resorting to nationalization.

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03

Silvio Gesell's "The Natural Economic Order" posits that rent absorbs the entire benefit of fertile land over free land, with social conditions, transport costs, and market dynamics influencing migration, wages, and ultimately, the power of landlords.

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04

Wages, rents, land prices, and land taxes are all interconnected, fundamentally rooted in the profits from free land and interest rates.

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05

Wages are determined by quality and market demand, not production costs, and to maximize wages, workers must protect their wage fund from rent and interest through institutional reforms.

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06

The Free-Land system advocates for equal land distribution and public auctions to lease land, aiming to promote economic equality and social progress.

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07

Money is a state creation, not tied to any commodity, and that economists should focus on its legal privileges and public utility, rather than the illusory concept of "value".

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08

The price of money, unlike other goods, is determined by the interplay of supply and demand, not its production cost, and is influenced by human behavior and the concept of 'free money'.

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09

The unique durability and hoardability of money disrupts traditional economic theories linking price, supply, and stock.

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10

"Free-Money", a depreciating currency system, aims to stabilize prices and prevent economic crises by discouraging hoarding and speculation, thus transforming money into a neutral medium of exchange.

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11

Free-Money, focusing on stable domestic prices, proves more effective for international monetary cooperation than the gold standard.

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12

An international currency union using managed paper currencies could mitigate exchange rate volatility, protecting trade while allowing national economic control.

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Summary & Review

"The Natural Economic Order" by Silvio Gesell is a comprehensive exploration of economic systems and theories. Gesell argues that the economic order should be natural, meaning it should be adapted to the nature of man and not imposed externally. He proposes two main solutions to economic problems: Free-Land and Free-Money. Free-Land refers to the abolition of unearned income from land ownership, while Free-Money refers to a monetary system that loses value over time, encouraging spending and circulation. Gesell's theories challenge both capitalism and Marxian socialism, offering a new perspective on economic structures.

Silvio Gesell

Silvio Gesell was a German merchant, theoretical economist, and social activist in the late 19th and early 20th centuries. He is best known for his theory of "Freigeld," which proposed a form of currency subject to demurrage to stimulate spending and prevent hoarding.

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