What If Money Expired? | NOEMA
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A long-forgotten German economist argued that society and the economy would be better off if money was a perishable good. Was he an anarchist crank or the prophet of a better world?
  • Overzeetop@beehaw.org
    8·
    1 year ago

    Hilarious. Our money already works this way. In the US, the federal reserve targets 2% by altering their policies, and other governments do similar. It’s not perfect because it’s not a defined loss like his stamps or check marks, but it works the same way. If your dollar today is worth 98c of the one you got last year but the wage for you fixed amount for work is $1.021, then it has the same effect.

    And rich people don’t hold dollars, for just that reason. They hold assets which (they hope) will increase in value at least as fast as this drop in dollar value. US I-bonds are a perfect example, and the sale of treasury bonds are keyed to this drop in value.

    This is also why regulators fear deflation - it leads to hoarding and loss of liquidity because nobody wants to buy today what will cost less next year.

    His personal financial utopia is already with us and it sucks. It’s the treadmill which beats down every wage earner who needs to save for anything - to buy a house or car, take a dream vacation, or retire.

  • mermaldad@beehaw.org
    3·
    1 year ago

    I’m trying to understand how retirement and disability would work in such a monetary system. While the hoarding of wealth by the rich is a problem in the current system, it seems like devaluing all savings would make anyone who can’t work worthless.

    • sculd@beehaw.org
      2·
      1 year ago

      It can’t, which is why no country will use this system.

      There are plenty of ways in which we can combat unnecessary accumulation of wealth (cough, tax, cough). A depreciating currency is not one of them.

      Even communism might be easier to administer than this suggested monstrous system.

    • liv@beehaw.orgEnglish
      1·
      1 year ago

      Yes this was pretty telling:

      Instead, an individual’s economic success would be tied directly to the quality of their work and the strength of their ideas. Gesell imagined this would create a Darwinian natural selection in the economy: “Free competition would favor the efficient and lead to their increased propagation.”

  • sculd@beehaw.org
    2·
    1 year ago

    It is an “interesting idea” in the sense that it would force people to use other things, such as precious metal, as store of value.

    If any national economy tries this? Watch capital flight before the regime collapse by riot, coup, assassination, or all of them.