Healthy Money Healthy Planet - library.uniteddiversity.coop

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f everyone had to spend, wouldn’t money could go straight into land speculation? Gesell
predicted this, and so saw currency reform working hand in hand with land reform:
‘Usury is usury, whether it is for land or for money. What difference does it make to the
farmer whether he is fleeced in renting land or in borrowing money? Both the money
usurer and the land­usurer will take exactly as much as they can get – neither will rebate
one jot.’
Gesell believed that land is a vital natural resource to be held in trust rather something that
can be treated as be a tradeable commodity and an object of speculation. Influenced by the
American political economist Henry George (1839–97), he advocated that the state should
buy all land.
Gesell was writing almost a century ago, so it is interesting to speculate what would
happen if his system were to be introduced today. For a start, when consumers want to
spend their money, advertising becomes less necessary and so advertising costs would
reduce. As discussed above, there would be a downward pressure on prices, expressed in
higher real wages. People would therefore save by not having to pay interest on everything
they bought. As a result, they might then choose to buy goods and services that bring
long­term benefits, such as further education, house insulation, solar and wind power,
better quality furniture and curtains, better quality machinery, soil restoration systems,
and more durable and fuel­efficient cars. For their part, manufacturers, no longer
burdened with high interest and storage costs, would be under less pressure to make a
quick profit and thus be able to make more durable and better quality goods.
Speed Money in History
While Gesell may have been the first person formally to propose a kind of velocity control
for a national currency (so­called ‘speed money’), according to Bernard Lietaer similarly
designed currencies have existed at least twice before in history, when real wealth rather
than monetary wealth was accumulated. 4
In ancient Egypt, when people brought their bags of corn to a storehouse, a piece of
pottery called on ostraca was given to them as a receipt. These ostraca were more
convenient to handle than bags of corn, and so they began to circulate as currency. At the
storehouse, depositors were charged a 10 per cent storage fee for the privilege of having
their corn stored and protected from vermin. So, if they deposited ten bags of corn, six
months later they received only nine bags back. The effect of this was rather like a negative
interest rate, and the result was that Egyptians didn’t save their money but instead spent it
on things that would last. They constructed pyramids and an agricultural system so