Freigeld / Schwundgeld
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Nothilfe mit Arbeitswertscheinen - das Experiment von Wörgl
Freigeld (German for free money) or Schwundgeld (depreciative money) is a monetary (or exchange) unit, which follows the economic concept of Freiwirtschft (free economy). The concept was invented by Silvio Gesell.
The Freigeld has several special properties. It is
- maintained by a monetary authority to be spending power stable (no inflation or deflation) by means of printing more money or withdrawing money from circulation
- cash flow safe (a scheme will be put in place to ensure that the money is returned into the cash flow - for example, by requiring stamps to be purchased and attached to the money to keep it valid)
- convertible into other currencies
- localized to a certain area
The name results from the idea that there is no incentive to store the money, as it will automatically lose its value after some time (depreciate). It is claimed that as a result, interest rates will drop to almost zero, preventing any form of Inflation.
Gesell argued that saved money will keep its value, while goods - which are not consumed - will loose value by getting old, rot or deteriorate. To keep the value of the money and goods synchronised, the issued money should loose value in regular intervals. Therefore the holder of the money has an incentive to spend the money before it depreciates, which will foster consumption and economic growth.
Wörgl and the practical use of Freigeld
Freigeld has been tried several times during the 1930s. However, most famous is the use of Freigeld in the Austrian community of Wörgl.
During the Great depression in 1929 Austria and Germany was hit by a deflation, preventing economic growth and prosperity. The effects were also felt in Wörgl - a place of 4600 people, out of which more than 400 were unemployed. Since no help seemed to be available from the central bank the local council decided to try and tackle the problem themselves.
It printed money worth 32,000 Schillinge - it deposited the same amount of real money at a local bank - and used it to pay the community workers. Before, it had been agreed with local businesses that they would accept the new money.
The money lost 1% of its value each month, which was controlled by stamps that had to be glued onto the bills. Thus the holder of the money had an incentive to circulate the money as quickly as possible. The deflation was mainly caused by the extra-ordinary saving and hoarding of money, due to the expectation of continuously falling prices. This vicious circle was disrupted by the new money.
As the money was flowing again the businesses began to prosper, the town got tax income, which it used to employ more people and repair and improve streets and communal property and equipment. This lead to further economic activity.
The experiment was so successful that neighbouring villages started to accept and use the new money as well. The unemployment increased during 1932 and early 1933 by 10%, while in Wörgl it dropped by 25%. The "Miracle of Wörgl" was widely publicised in the press and many delegates came to the area to see it work. Many other regions were interested in adopting the system.
[http://neuesgeld.com/page.php?id=22]
Plakat Nr. 4 Wörgler Freigeld
Nothilfe mit Arbeitswertscheinen
Als wirkungsvolle Wirtschaftskrisenhilfe erwies sich 1932/33 das Wörgler Freigeld. Durch die Verwendung der Wörgler Arbeitswertscheine, die vom damaligen Bürgermeister Michael Unterguggenberger zur Finanzierung eines Bauprogrammes eingesetzt wurden, gelang es, die Regionalwirtschaft wieder anzukurbeln.
Poster No. 4 Wörgler free money
Help in need with work value lights
As an effective economic crisis assistance 1932/33 proved the Wörgler free money. By the use of the Wörgler of work value lights, which were used by the mayor at that time Michael Unterguggenberger for the financing of a schedule of work, it succeeded, to set the regional economy in motion again.
Mayor of Wörgl, Hon. Michael Unterguggenberger
Während in Österreich die Arbeitslosigkeit in diesem Zeitraum um 19% weiter anstieg, ging sie in Wörgl um 16% zurück.
Wörgler Arbeitswertscheine
Das Erfolgsrezept der Wörgler Arbeitswertscheine nach der Schwundgeld-Idee von Silvio Gesell war ihr schneller Umlauf. Diesen garantierte die monatliche Abwertung um ein Prozent.
While in Austria unemployment in this period continued to rise around 19%, it decreased/went back in Wörgl around 16%.
Wörgler of work value lights
The success prescription of the Wörgler of work value lights after the falling currency idea of Silvio associate was its fast circulation. This guaranteed the monthly devaluation around a per cent.
Durch das Aufkleben einer Marke behielt der Schein seinen vollen Wert. Die Abwertung bewirkte, dass jeder das nur regional gültige Zahlungsmittel so schnell wie möglich wieder ausgab. Das "Schwundgeld" kreiste vom Arbeiter zum Kaufmann und landete als Steuergelder wieder in der Gemeindekasse, wo es für weitere Lohnzahlungen an Arbeiter zur Verfügung stand.
By gluing a mark on the light kept its full value. The devaluation caused that everyone spent the only regionally valid currency as fast as possible again. "The falling currency "circled from the worker to the buyer and landed as tax fundses again in the municipality cash, where it was available for further wage payments at workers.
Ein von der Gemeinde eingerichteter Treuhandausschuss hinterlegte bei der örtlichen Raiffeisenkasse die Deckung für die ausgegebenen Arbeitswertscheine, die jederzeit bei Bezahlung einer zweiprozentigen Gebühr in Schilling eingewechselt werden konnten. Einen Teil der Deckung gab die Kasse als Kredit an Geschäftsleute weiter, was
ebenso zur regionalen Wirtschaftsbelebung beitrug.
Die Gemeinde finanzierte im Rahmen des Nothilfe-Programms in die Infrastruktur, reparierte desolate Straßen, verlegte Kanalrohre, errichtete ein Wasch-und Holzhaus, Straßenbeleuchtungen und eine Stahlbetonbrücke über den Wörgler Bach für die Wildschönauer Straße, legte zur Förderung des entstehenden Tourismus die Sprungschanze und Wanderwege an und richtete eine Notstandsküche zur Armenausspeisung ein. Von den 1932 registrierten 400 Arbeitslosen in Wörgl fanden durch das Nothilfeprogramm durchschnittlich 100 wieder einen Job.
A trust committee furnished by the municipality deposited covering for the spent work value lights, which could be exchanged at any time with payment of a two percent fee in Schilling with the local Raiffeisen bank. The cash passed a part on of covering as credit to businessmen, which
likewise to the regional economic revival contributed.
The municipality financed repaired desolate roads, in the context of the emergency aid program into the infrastructure, shifted sewer pipes, established Wasch-und timber building, road lightings and a reinforced concrete bridge over the Wörgler brook for the Wildschönauer road, put on for the promotion of the developing tourism the Sprungschanze and moving way and furnished a state of emergency kitchen for arm from supply. From the 1932 400 unemployed persons in Wörgl registered found by the emergency aid program on the average 100 again a job.
Der Erfolg blieb nicht verborgen – die Nachbargemeinde Kirchbichl startete 1933 mit Wörgler Arbeitswertscheinen den Bau des Strandbades. Der amerikanische Senat befasste sich mit der Wörgler Freigeld-Aktion ebenso wie die europäischePresse. 22 Gemeinden in den USA führten nach Wörgler Vorbild Markennotgeld ein. 170 Bürgermeister wollten im Sommer 1933 in Österreich das Wörgler Experiment zur Bekämpfung der Krise in ihren Gemeinden nachahmen.
Die österreichische Nationalbank sah durch die Gutscheinaktion allerdings ihr Geldausgabemonopol verletzt und setzte mit Nachdruck das Verbot der Wörgler Nothilfeaktion im September 1933 durch. Das Wörgler Währungsexperiment erntet heute noch weltweit Beachtung als funktionierendes Beispiel einer regional gültigen Zweitwährung.
Weitere Infos (auch in englisch und französisch) auf www.woergl.at
Historische Quellen:
Fritz Schwarz: "Das Experiment von Wörgl"
Axel von Muralt: Schwundgeld Wörgl
Das Unterguggenberger Institut dokumentiert das historische Experiment und informiert über Komplementärwährungen heute. Infos: www.unterguggenberger.org
Success did not remain hidden - the neighbour municipality Kirchbichl started 1933 with Wörgler work value lights the building of the bathing beach. The American senate was concerned with the Wörgler free money action just like European-presses. 22 municipalities in the USA introduced after Wörgler model mark emergency money. 170 mayors wanted to copy the Wörgler experiment in the summer 1933 in Austria for the fight of the crisis in their municipalities.
The Austrian central bank saw its cash dispensing monopoly hurt by the coupon action however and implemented with reproduction the prohibition of the Wörgler help in need action in September 1933. The Wörgler currency experiment harvests today still world-wide attention as functioning example of a regionally valid secondary currency.
Further information (also in English and French) up www.woergl.at
Historical sources:
Fritz black: "The experiment of Wörgl"
Axel of Muralt: Falling currency Wörgl
The Unterguggenberger Institut documents the historical experiment and informs about complementary currencies
today. Information: www.unterguggenberger.org
Regiogeld heute
Nach dem Vorbild des Wörgler Freigeldes startete 2003 der "Chiemgauer" als Regionalwährung in Südbayern, heute die erfolgreichste Regiogeld-Initiative des deutschsprachigen Raumes. Weitere Infos hier...
Regiogeld today
After the model of the Wörgler of free money "the Chiemgauer started 2003 "as regional currency in South Bavaria, today the most successful Regiogeld initiative of the German-speaking countries. Further information here…
Steuergutschriften als Zahlungsmittel: Taxos
Wesentlicher Baustein zum Erfolg des Wörgler Freigeldes 1932/33 war dessen Gültigkeit als Steuerzahlungsmittel. Damit war der regionale Kreislauf der Arbeitswertscheine geschlossen. Beim Steuerzahlen setzt auch die Idee der Taxos-Initiative an: Durch die Schaffung übertragbarer Steuergutschriften, den "Taxos", könnte die öffentliche Hand
zusätzliche Nachfrage schaffen, ohne sich zusätzlich zu verschulden und dafür Zinsen zahlen zu müssen. Die Steuergutschriften könnten als Zahlungsmittel und damit als Komplementärwährung verwendet werden.
Tax credit notes as currencies: Taxos
Substantial component for the success of the Wörgler of free money 1932/33 was its validity as payment of taxes means. Thus the regional cycle of the work value lights was closed. With tax numbers also the idea of the Taxos initiative sets: By the creation of transferable tax credit notes, the public hand additional demand could create the "Taxos", without being to blame for themselves and for it interest to pay have additionally. The tax credit notes could be used as currencies and thus as complementary currency.
Weitere Infos unter www.taxos.info
In Summer 1933 the Austrian Central Bank (Österreichischen Nationalbank), who was the only instance to legitimately issue money in Austria, decided to forbid the Schwundgeld in Wörgl from 15. September 1933. The council of Wörgl complaint against the decision using all legal instances up to the highest (Verwaltungsgerichtshof Wien), which finally supported the decision of the central bank on 18. November 1933.
Today the economists are still divided about the effect of Freigeld. However, there seems to be a consensus that in a crisis situation - like the depression of the 1930s - the money can have stimulating effects on the economy. In normal and stable free market conditions there are many negative side effects (e.g. tendency to discriminate on imports), which make the Freigeld unsuitable for general use.
Silvio Gesell (1862-1930)
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Silvio Gesell was born at St. Vith on the German-Luxembourg frontier to a German father and a French mother. In 1886 Gesell moved to Argentina to become a successful merchant. During the depression of 1873-96 he became interested in the theory of money and currency. In his first work, "Currency Reform as Bridge to the Social State" (1891), Gesell made the celebrated proposal for unhoardable money. Further studies on the disastrous effects of deflation and the necessity for stabilizing the purchasing power of money followed. Retiring to Switzerland, Gesell brought out a periodical for currency and land reform and in 1906 wrote his main book "The Natural Economic Order", which described the concept of the Freiwirtschaft.
In 1919 Gustav Landauer, one of the chief figures of the German Revolution of 1918-19, invited Gesell to become finance minister in the short-lived Bavarian Republic. Both men were arrested and charged with treason. Landauer was murdered in prison; Gesell was acquitted. He continued to publish actively in Berlin where he died in 1930.
Plakat 4 als
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