A lost page in economics


There is a lost page in economics. And on the page, We can discover the answer to the question of economics. That is: How can we overcome the limits of capitalism? Capitalism has already revealed many deficiencies, and the suffering and conflicts of those who live in it are turning into limitations. We may say that there is no pain and no conflict as capitalists say. We can oppose capitalism without offering a clear alternative as Marxists do. We can only increase public intervention without touching capitalism.  But I know a better way. That is Silvio Gesell's path, <The Natural Economic Order>. This book was published in 1916, influenced famous economists such as Keynes and Irving Fisher and contributed greatly to the modern regional monetary movement, but the essence of his theory has yet to be fully understood. So I translated the book into Korean in order to introduce the economic theory and open a new economic discourse. The natural economic order is an economic order to replace capitalism. This is the economics for future generations.

Silvio Gesell's natural economic order reforms the land system and the monetary system and solves all the economic problems. According to Gesell, the limitations and side effects of capitalism cannot be resolved in capitalism. It must be resolved by transforming capitalism into another economic order. Social therapies that human beings have used so far have been temporary treatments that only work on the localities of social organisms, resulting in temporary effects and long-term side effects. In such a way, this world cannot be cured. Silvio Gesell 's therapy is a holistic medicine that treats the entire body mass of the social organism. It is the fundamental therapy for touching the core of social pathology.

Summarizing social problems is growth and distribution. In other words
1. The wealth produced by society is not enough.
2. Insufficient wealth is distributed unfairly.

Generally, liberalists are interested in growth. Marxists and socialists are interested in distribution. Liberalists argue that economic growth can only be achieved by promoting free economic activities and reducing government interference. Marxists and socialists argue that governments should intervene more to decrease the gap between the rich and the poor. They do not listen to each other. Their claims always run parallel.

The liberalists are wrong. History teaches us what happens in capitalism without government intervention. The rich get richer and the poor get poorer. Poverty will expand and poverty will result in crime. The politicians will turn the arrow of anger abroad and the war will burst if the hostility is raised. Then the poor will serve as cannon fodder.

The Marxists are wrong. They do not acknowledge the private ownership of property. But if you can not get the proceeds of your labor, you don't work hard. Then the wealth produced by society as a whole will decrease. The nationalization should be applied not to the proceeds of labor, but to the land (including natural resources) on which the labor takes place and the circulation of money that links labor and labor. If both of them are nationalized, privatization of the rest is no problem.

The social democrats are wrong. They try to correct inequality through tax and welfare policies. However, if private ownership of land exists, all the benefits of the welfare system are absorbed by the rents and the rents go into landowners' pocket. hence the effects of the welfare system are canceled.

In short, liberalism has no solution to distribution, Marxism has no solution to growth, and social democracy is filling a bottomless jar. So what should we do? 

According to Gesell, 

Growth is limited because of hoarding money. If you make the face value of money depreciated regularly like stamp script, it will be a loss to hoard the money, therefore the money will circulate regularly and it will spread to every corner of the society.

Distribution is unfair because workers are robbed of their proceeds of labor by interest and rent. So Gesell says, "Share the rent and get rid of the interest." Nationalize the Land, Let people use the land by public lease, and let the rents be used for public welfare, but let government has the right of adjusting rent so that anybody cannot steal it. (The way to get rid of interest is the same as the way to prevent money-hoarding.) If money is depreciated regularly as if the goods are worn out and rotten, the basic interest that the holder of money charges the holder of goods for the advantage of money as a medium of saving will be disappeared. If basic interest disappeared, all kinds of real capital born from money no longer yield interest.

These are Free-Land reform and Free-Money reform proposed by Silvio Gisel. It means that you don't need to pay any rent and any interest. It can achieve both goals, that is growth and distribution. Free economic activity will be guaranteed and government intervention will be disappeared as liberalists want. Workers will get the right of whole proceeds of labor as the Marxists and social democrats hope.

Since I met Silvio Gesell's theory in 2011, I have analyzed it from various angles and now I convinced it is the ultimate solution for mankind. It will not only be an economic salvation, but also a social, cultural, ecological, and even spiritual salvation. This is no exaggeration. You should note that all the pathological symptoms of modern civilization are attributed to the land system and the monetary system. The roots of evil are land system and monetary system without considering human nature which pursues one's own interests above all. Human nature will not change forever. The attempt to change it is in vain and artificial. As Laozi said, the artificial thing cannot solve the problem fundamentally, but only to confuse the world. Now we must adopt the natural economic order that fits the human nature.




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