Sep 5, 2023Liked by Josh Sidman

Beautifully written and powerfully argued. My question is - If money is not to be hoarded, then how do you accumulate savings in order to invest and increase the capital stock of society? Is there a Gesellian theory of capital accumulation and investment? Thank you !

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Thanks for the question, Ibrahima. It's a very important one.

As I often argue, the main challenge in promoting the Gesellian economic perspective is not so much constructing a new edifice of Gesellian economic thought (which is actually very simple and straightforward), as it is deconstructing the existing edifice of irrational economic ideas which prevent the self-evident truth of Gesell's ideas from shining through.

So my answer to your question is that what we need to do is simply dispel an irrational belief that most people in today's world hold. Once we do that, the answer to your question will be obvious.

The irrational belief underlying your question is the idea that money is capital. From a Gesellian perspective, money, properly understood, is NOT capital. Only the present irrational form of money, which attempts to combine the medium-of-exchange and store-of-wealth functions in one instrument, could lead one to hold the belief that money is capital. No one would hold such an irrational belief under a more rational monetary system in which money is properly constituted ONLY as a medium-of-exchange.

Once this irrational idea is cleared away, the answer to your question is self-evident. How do we invest and accumulate capital in a Gesellian system? In Part 3, Chapter 13 of The Natural Economic Order, Gesell writes, “All the commodities of the world are at the disposal of those who wish to save, so why should they make their savings in the form of money? Money was not made to be saved!”

That's the answer. It's that simple. Save and invest in any way you can imagine. Buy stocks, start a business, build a house, buy gold, art, collectibles, grow crops, raise livestock... The possibilities are virtually infinite. The ONLY wrong answer is to use money as a vehicle to store wealth.

To reinforce the point by way of an analogy, asking how we are to accumulate capital if we can't use money to do so is like asking where we can park our cars if we can't park in the middle of public roads. The answer is -- anywhere else on God's green earth! The only place you should never park your car is in the middle of public roadways. Likewise with money. Money, properly understood, is not a form of private property. It is a public utility, and allowing individuals to use it as a vehicle for private wealth accumulation is harmful to society. A Gesellian form of money couldn't be used that way.

So there is no new theory of capital accumulation and investment required. We just need to remove the irrational elements from the theory or capital accumulation and investment that we already have.

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