Legal & Policy Challenges

Natural money: the most efficient monetary system



Natural money was the result of the discovery of the most efficient monetary system. Natural money will create an economy with constant economic growth at maximum potential that will destroy all other monetary systems in competition. Therefore the natural money monetary system will become the dominant monetary system in the world at some point in the future. Natural money has the following features:

- a hoarding tax, which amounts to 0.5% to 1.0% a month;

- a complete ban on usury, which is charging interest on money;

- a money supply that is constant;

- a complete ban on credit, which is creating money out of nothing.



The Wörgl experiment


There are a number of successful examples of the introduction of money with a hoarding tax. Wörgl is the best known example. During the Great Depression, the Austrian town of Wörgl made economic history by introducing a complimentary currency. The mayor Michael Unterguggenberger had a long list of projects he wanted to accomplish, but there was hardly any money with which to carry them out. Rather than spending the 40,000 Austrian schillings in the town’s coffers to start these projects off, he deposited them in a local savings bank as a guarantee to back the issue of a type of complimentary currency known as 'stamp scrip'. The Wörgl currency required a monthly stamp to be stuck on all the circulating notes for them to remain valid, amounting 1% of the each note’s value.


Because nobody wanted to pay what was effectively a hoarding fee, everyone receiving the notes would spend them as fast as possible. The 40,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in schillings. This offer was rarely taken up though. Over the 13-month period the project ran, the council not only carried out all the intended works projects, but also built new houses, a reservoir, a ski jump, and a bridge.


The key to its success was the fast circulation of scrip within the local economy, 14 times higher than the Schilling. This in turn increased trade, creating extra employment. At the time of the project, Wörgl was the only Austrian town to achieve full employment. Six neighbouring villages copied the system successfully. In January 1933, the project was replicated in the neighbouring city of Kirchbuhl, and in June 1933, two hundred Austrian townships were interested in adopting the idea. At this point the central bank panicked and decided to assert its monopoly rights by banning complimentary currencies. The people unsuccessfully sued the bank and later lost in the Austrian Supreme Court. It then became a criminal offence to issue 'emergency currency'.



Joseph in Egypt


Money with a hoarding tax was already introduced by Joseph when he was viceroy of Egypt. When the pharaoh had dreams about seven fat cows being eaten by seven lean cows and seven full ears of corn being devoured by seven thin and blasted ears of corn, Joseph explained the dreams to the pharaoh. He told the pharao that seven good years would come and after that seven bad years would follow. Joseph advised the Egyptians to store food on a large scale. They followed his advise and built storehouses for food. In this way Egypt survived the seven years of scarcity.


What is less known, because it is not recorded in The Bible, is that the storing of food resulted in a financial system. The historian Friedrich Preisigke discovered that the Egyptians used corn receipts for money. Farmers bringing in the food, got receipts for corn. Bakers who wanted to make bread, brought in the receipts, which could be exchanged for corn. It did not take long before the receipts where generally accepted as money. Because of the degradation of the corn and mice eating it, the value of the receipts was steadily decreasing. This enticed people to spend the money fast.


The corn receipt system lasted for many centuries. It made sense to store food to provide for hard times. This currency remained in function in Egypt until it was replaced by the Roman currency during the late Ptolemaic period. The introduction of natural money may have enabled Egypt to remain a stable civilisation for another 1,500 years. The Egyptian civilisation lasted for more than 2,000 years, far longer than any civilisation ever.



12 steps to freedom and wealth


The natural money system brings freedom and wealth in 12 steps:

1. Interest on money should be banned. Return on capital is a good thing, and should not be abolished.

2. Raise a tax on money. This is not a tax on wealth, so shares, real estate and money lent, are not taxed.

3. Do not create more money, so there will be no monetary inflation.

4. Because there is a tax on money, people will soon use the money to invest, to consume or to lend without interest.

5. Because on money lent, no interest may be charged:

- money will only be lent to reliable people and companies.

- less money will lent and more money will be directly invested in equities and real estate.

6. Therefore there will never be an economic crisis, because money is spent directly and there are no bad loans.

7. Because all money is directly used for investment or consumption, the economy grows steadily at maximum potential and there is full employment.

8. The financial sector is largely superfluous. That is a good thing, because this sector produces nothing and destabilises the economy.

9. Governments also need much less to interfere with the economy.

10. As the economy grows constantly at maximum speed, and because no more money is created, prices will fall. Therefore loans with zero percent interest will have a return that is probably higher than the interest rate you will get at the bank now. The money lent will be worth more when the loan matures.

11. If one country chooses to apply this system, it will attract capital from other countries since the return of loans with zero percent interest rate is higher than the yield on interest in other countries. Therefore, all other countries will need to do this, if one country has changed its money system in this way.

12. Now everyone is free. There is no fear in the economy. There will always be work for employees and there will always be customers for viable businesses. Nobody is deeply in debt.





Using natural money all kinds of problems we face now can be solved easily. Natural money will have the following effects:

- Natural money will save the earth and nature by promoting sustainable investment and recycling;

- Natural money will free people and countries from debt slavery;

- Natural money will end unemployment without government intervention;

- Natural money will create a stable economy without crisis which does not need government or central bank intervention;

- Natural money will end senseless economic activities in the money system which destroy the economy;

- Natural money will result in a dramatic rise in government income which makes it easy to lower taxes and address all social problems in society;

- Natural money economies will perform better than all other kinds of economies. This will attract investment capital, which forces all other economies to adapt the natural money system.





Natural money is the most efficient type of free money. Silvio Gesell outlined the theory of free money in the Natural Economic Order. Many famous economists and scientists saw the enormous potential of free money:

- "I thoroughly enjoyed Silvio Gesell's brilliant style. The creation of money that cannot be hoarded will lead to a different and more real kind of property."

Professor Albert Einstein, Nobel Prize Winner

- "Gesell's name will be a leading name in history once it has been disentangled."

H.G. Wells

- "The application of Gesell's principle of circulation of money will lead the nation out of the depression within two to three weeks. I am a humble student of this German-Argentine businessman."

Professor Irving Fisher, Yale University, America's greatest economist

- "I believe that the future will learn more from the spirit of Gesell than from that of Marx."

John Maynard Keynes

- "Gesell's work will initiate a new epoch in the history of mankind."

Prof. Dr. B. Uhlemayr

- "Gesell's discoveries and proposals are of the greatest importance for centuries to come."

Dr. Theophil Christen, eminent mathematician and physicist, Berne



Stimulating local trade


States and municipalities can issue their own currencies that circulate along with the national currency. If they come into existence, those currencies should only be used for payments within the state or the municipality issuing the currency. People will be inclined to spend the local currencies first because they can only be used locally. This will stimulate local trade at the expense of long distance trade.


Local currencies have the following advantages:

- They promote local trade and therefore generate employment in the local community.

- Local production will replace centralised production which makes the economy more energy efficient.

- Local currencies will generate tax income for local governments.

- Local currencies give local communities more possibilities to handle their own affairs making the central government less needed.



More information


The following information can be found on the website:

- More information about the current state of the economy can be found here:

- The natural money theory in detail can be found here:

- A realistic conversion plan to the natural money economy can be found here:

- A plan for the future with natural money can be found here:

Why Is This Idea Important?

It can do many things: solve the credit crisis in a few months, make the economy far more efficient, create far more wealth, strengthen local communities, bring unemployment back to practically zero, create a sustainable economy and generate dramatic rise in government income which makes it easy to lower taxes and address all social problems in society.


-31 votes
Idea No. 2027