A lost page in economics

칼럼

There is a lost page in economics. And on it, we can discover the answer to the old question of economics. That is: How can we overcome the limits of capitalism? Capitalism has already revealed many deficiencies, and the sufferings and conflicts are turning into limitations. You may say "All is well" as capitalists say. Or you can say "No capitalism" without offering a clear alternative as Marxists do. Or you can only increase public intervention without touching capitalism as socialists do. 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 will 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 him, the limitations and adverse 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 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. In contrast, Silvio Gesell 's therapy is a holistic medicine that treats the entire body mass of the social organism. It is a radical therapy touching the core of social pathology.

Economically summarizing social problems is growth and distribution. In other words,
1. We cannot produce enough wealth.
2. And it is distributed unfairly.

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

Liberalists are wrong. The existing conditions of competition are not fair because of rent and interest. History teaches us what happens in capitalism without changing this condition. 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. Then the poor will serve as cannon fodder.

Marxists are wrong. if you can not get the proceeds of your labor, you don't work hard. Then the wealth 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 monetary circulation that links labor and labor. If we nationalize both of them, privatization of the rest make no problem.

Socialists are wrong. They try to console people with tax and welfare policies. But all the benefits of the welfare system are absorbed by rents and they 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 socialism is filling a bottomless jar. So what should we do? 

Listen to Gesell. According to him, growth is limited because of hoarding money. If you make the face value of money depreciated regularly, it will be a loss to hoard money, therefore the money will circulate regularly and it will spread to every corner of the society. And distribution is unfair because workers are robbed of their proceeds of labor by interest and rent. So Gesell proposed sharing the rent and eliminating interest. It needs nationalizing the Land. People will use the land by public lease, and the rents will be used for public welfare. But anybody cannot steal it since the amount paid on their leases would keep pace with the rise of rent. 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.

Free-Land reform and Free-Money reform means that you don't need to pay any charge when you use land and money. 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 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 not harmonized with human nature which pursues one's own interests above all. Human nature will not change forever. The attempt to change it is in vain. If you fight against your nature, you cannot solve the problem fundamentally, but only to confuse the world. It is the reason why we must adopt the natural economic order now.

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