Healthy Money Healthy Planet - library.uniteddiversity.coop

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US$260 million worth of work in a year. 16
However, it was not to be. In 1933 President Roosevelt introduced his ‘New Deal’ to fight
the Depression, which was based on a centralised plan of large construction projects. Soon
after, under pressure from his advisers, he prohibited any use of emergency currency.
These examples of successful demurrage currencies had three things in common: they
were depreciating currencies; they were backed by, and therefore redeemable for, national
currency; and they were acceptable for the payment of local taxes. Despite the clear
advantages of these complementary currencies, they struck fear into the hearts of
governments, which banned them. Below, I shall look at some of the objections to
demurrage, giving arguments in its favour.
Common Objections to Demurrage
Demurrage is useful only during a depression, when circulation is slow.
This is not true. As discussed earlier in this chapter, demurrage was used for more than 300
years in western Europe during the Middle Ages and for at least a thousand years in
ancient Egypt, both times with strong positive economic and social results.
Demurrage will encourage more consumerism.
Some say that demurrage will simply encourage people to spend more, thereby
encouraging consumerism so that shops and houses will fill up with more unnecessary
goods. These objectors say that it is immoral to advocate that people should be forced to
spend their money.
Again, this is not true.
What demurrage does in practice is to encourage people to save, not in the form of money,
but in the form of productive assets. In Wörgl, residents paid their taxes early and the local
authority built roads and other forms of infrastructure. Using a modern example, if a
demurrage charge was imposed now, people with money to spend quickly might use it in a
variety of ways. While it is true that some might fritter it away on shoddy consumer goods,
the general trend would be towards buying goods that would bring long­term benefits.
When business decisions were being made about investments, the choice would trend
away from short­term profits towards long­term alternatives.
In answering this objection, we can only look to the experience of history. As people
have used their money wisely in the past, it is unreasonable to assume that with a similar
system today they would rush out to sales to buy cheap furniture, carpets or television