Silvio Gesell - The NATURAL ECONOMIC ORDER
stimulus of interest, deprives his stomach of $10 for his own and his children's benefit, with $200 wages he could probably, from the natural impulse of saying, set aside, if not $110 at any rate much more than $10. Saving is practised throughout nature without the incentive of interest. Bees and marmots save, although their stores bring them no interest and many enemies. Primitive peoples save although interest among them is unknown. (* African negroes, Red Indians, Hottentots, have never obtained interest from their savings, yet none of them would exchange these savings (provisions) for the savings of our proletariat (savings-bank book).)
Why should civilised man act otherwise ? Men save to build a house, they save for marriage, illness, old age; and in Germany they even save for masses for the repose of their souls and for a burial fund, although burial brings the corpse no interest. And when did the proletariat begin to save for the savings-bank ? Did the money formerly hidden in mattresses yield interest ? Yet such a form of saving was customary until 30 years ago. Winter provisions, too, bring no interest but much annoyance. (* That the prohibition of interest by the medieval Popes prevented the growth of an economic system based on money (the scarcity of the precious metals was a contributing cause), shows that the impulse of saving was obeyed even without interest. The savers hoarded the money.)
Saving means that the saver produces more wares than he consumes. But what does the individual saver, or the population, do with this surplus of wares ? Who keeps the wares and who pays the cost of keeping them ? If we answer here: "The saver sells his surplus produce", we merely transfer the problem from the seller to the buyer. To the population in general this answer does not, obviously, apply. If a person saves, that is, produces more wares than he consumes, and finds someone to whom he can lend his surplus on condition that after a certain period his savings are to be given back without interest but without loss, the saver has concluded an extraordinarily advantageous bargain. For he avoids the expense of upkeep of his savings. He gives 100 tons of fresh wheat as a young man and receives 100 tons of fresh wheat, of equally good quality, in his old age. (See the Story of Robinson Crusoe, p. 365). The simple restitution, without interest, of the borrowed savings represents, therefore - if we leave money out of the account - a considerable piece of work done by the debtor or borrower, namely the payment of the expense of upkeep of the borrowed savings. The saver himself would have had to bear this expense if he had found nobody to take charge of his savings. True, the borrowed goods do not cause the borrower any expense of upkeep since he consumes them in his undertaking (example: borrowed seed-wheat). But when loans are made without interest, the borrower transfers this advantage, which is really his, to the lender, without receiving any return service. If lenders were more numerous than borrowers, borrowers would claim payment for this advantage in the shape of a deduction from the amount of the loan (Negative interest). Thus from whatever view-point the problem of loans without interest is examined, no obstacles of a natural order can be discovered. On the contrary, the greater the fall of interest, the greater the incentive to the multiplication of houses, factories, ships, canals, railways, theatres, crematoria, tramways, lime-kilns, blast-furnaces, etc.; and the work upon such enterprises reaches its highest intensity when they produce no interest at all. To Boehm-Bawerk it is obvious that a "present good" must be more highly valued than a "future good", and upon this assumption his new theory of interest is based. But why is this assumption supposed to be obvious ? Boehm-Bawerk himself gives the somewhat strange reply: Because wine can be bought which becomes annually better and dearer in the cellar. (* Compare footnote p. 374.) But because wine-and among all commodities Boehm-Bawerk discovered no second with this wonderful property automatically, it seems, without labour or costs of any kind and without, therefore, costs for storage, becomes annually dearer and better in the cellar, do the remaining commodities, potatoes, flour, powder, lime, hides, wood, iron, silk, wool, sulphur, ladies' costumes, also become annually better and dearer. If Boehm-Bawerk's explanation is correct, we have here a complete solution of the social problem. We need only pile together sufficient products (the inexhaustible fertility of modern production and the army of unemployed workers provide an excellent opportunity), and the whole population can, without work of any kind, live from the proceeds of these commodities which will constantly become better and dearer (a difference in quality can always, in economic life, be traced to a difference in quantity). It is indeed not easy to see why one should not make the opposite deduction: Because all commodities, with the exception of money and wine, soon fall into decay, therefore wine 186