Living Big in Tiny Houses

Posted on July 17, 2015 by Deirdre

Henry David Thoreau, the American author, poet, and philosopher (among other things) who wrote the classic essay “Walden” is somewhat of a poster boy for many in the tiny house movement. Thoreau himself lived in a tiny house (a 10′ x 15′ English style cottage) near Walden ponds. He spent more than two years living is this small cottage, contemplating life and turning conventional living on its head.

He worked as little as possible, in direct opposition to the standard mantra of the era, which entailed six days working and one day off. The freedom his new approach to working hours afforded allowed him to gain clarity of mind. He witnessed those around him endure the monotony of everyday work, suggesting, “the mass of men lead lives of quiet desperation.” He was passionate about acting on one’s individual conscience and not blindly following laws, government, and societal norms. Thoreau’s view of the world in some way represents the essence of the tiny house movement.

Today
Thanks to people like Jay Shafer (who founded Tumbleweed, a California-based company that designs and builds ready-made models and floor plans), there has been increased exposure on tiny homes throughout the mainstream media. This exposure has helped bring awareness to the idea of alternative modes of living. The mainstream are taken by the tiny house movement with major networks and media outlets such as CNN, AP, The Guardian, Huffington Post, NBC, Oprah, PBS and many other blogs and networks featuring the phenomenon. Today the internet has been flooded with various images, videos, and stories of people living in and becoming involved with tiny homes around the world. Television shows, documentaries and You Tube clips abound. The tiny house movement, while still in its early days, will most likely be one of the biggest trends over the coming decades.

Six Reasons Why the Tiny House Movement is Going to be Big Over Coming Decades
1. Economic
In the aftermath of the financial crisis and now the Euro crisis, many people have simply lost their hard earned dollars or had their homes repossessed. This segment has had to reassess their lives and their future. When you have lost decades of earning capacity you really need to rethink things. Since the GFC, things have become a lot worse for economies, with both private and sovereign debt levels almost double what they were before. In OECD cities such as Sydney, Melbourne, Toronto, Vancouver, Auckland, London, and New York, the average price of a standard home or apartment is close to or pushing through the million dollar mark. Even in the far flung outlying suburbs of large cities properties can easily be priced from $500,000 upwards. Even if you are fortunate enough to have a well paying job or business, mortgages can take anywhere between 2o to 40 years to repay. According to “The Tiny Life” research, 21% of people who own a tiny home are under 30. 21% are between 30 – 40, 18% between 40 -50, and the majority (38%) over 50 years of age.

2. Environmental
As people become more conscious of their environmental footprints, small homes will become more prevalent throughout the mainstream. As energy prices continue to increase and the costs of living rise, the tiny house movement will grow. The overall cost of maintaining, heating, and cooling a small space is significantly less than that for larger, more energy and resource intense properties. Not to mention the resources used in the build process are often ten times less than a conventional 2,200 square foot property.

3. Simplicity
Simplifying one’s life and being able to live life within ones means is a good starting point for being able to weather any economic contraction. Reducing debt and downsizing will make the transition to a more sustainable life much easier. Many studies maintain that a simpler and less consumerist lifestyle can lead to a happier and more fulfilling life. A consumerist lifestyle distracts individuals from more meaningful endeavours. Reducing the amount of possessions in one’s life can lead to a cleansing not only of physical possessions, but also of the mind, leading to enhanced mental clarity. Having limited space forces one to de-clutter and minimize the amount of stuff owned. Your entire life is therefore simplified, everything from clothes and appliances to furniture begins to take up less mental energy. You only carry what is essential and what is needed. Many tiny homes are roadworthy, mounted on trailers which gives owners the ability to easily relocate.

4. Tiny Homes Give You Big Think Space
The 1950’s heralded the rise and development of suburbia which expanded throughout many Western nations. In conjunction with larger parcels of land came larger homes. It was predominately the post war economic growth in the United States and other OECD nations which encouraged the suburbanization of cities. With cheap energy in the form of crude oil helping fund this suburban expansion, consumer patterns also shifted. The baby boomers went on a spending spree as industrial output enabled people to purchase an array of goods and services that only decades earlier did not exist or were cost prohibitive. With suburbia and larger houses came a new consumer culture. These large homes needed more ‘stuff’ to make them look like they weren’t empty. Today approximately 30% of most American weekly income is spent servicing debt and mortgage repayments. In countries such as Australia and Canada the number is closer to 40%. It is easy to see why there has been a lack of dissent and free thinking among the masses. Tiny homes and downsizing free you up from the burden of expensive living and being chained to the wheel.

5. Happiness Levels
With less stress and without the burden of having to pay and repay debt, people are waking up to the realization that you don’t need to live in a monster home to be truly happy. With the average size of most North American homes increasing by over 60% since the early 1970’s, there is no evidence to suggest living in a bigger home adds to overall levels of happiness, despite what the advertisers and mortgage brokers will tell you! Having a larger home doesn’t mean you are 60% happier than those living in a small space. In fact, studies show that the larger the home, and the more time you devote to maintaining, cleaning, and servicing, the more financial and personal stress you will experience. Living light gives people space to define their worlds and gain more control over how they live life, ultimately leading to greater happiness and satisfaction.

6. Community
Since the rapid period of ‘suburbanization’ from the 1950’s onwards, which brought about long distance commutes to central business districts, more frequent overseas travel, and consumerism, community ties and networks have been lost. People in large cities and throughout suburbia have become isolated. While there are pockets of vibrant communities, in general there has been a disintegration of community values and connection. We have become too busy working to pay off large mortgages and engaging in hedonistic pursuits which have distracted us from what really matters – family, community, and relationships. There are many vibrant developments in the small space community. Due to the relatively new nature of the movement people are coming together in collaboration to solve some of the zoning, planning, and logistical challenges that have since arisen. Projects like the Tiny House Village in Sonoma Country will become blueprints for others to follow. This project will offer shared amenities with the village structured more like a co-op.

Article compiled by Andrew Martin, editor of onenesspublishing and author of One ~ A Survival Guide for the Future… and Rethink…Your world, Your future.

Sources: Rethink…Your world, Your future.

Images: Living Big in A Tiny House

Tax reform or monetary reform? Which is most important?

Posted on July 1, 2015 by Deirdre

The meshing together of Georgism with monetary reform remains a challenge, especially for ardent individuals who claim their cause to be the most critical. I have heard monetary reformers say Georgism is irrelevant and I have even heard a Georgist describe monetary reform as “heresy” and declare it must be “exorcised” at all costs. Then there are the moderates who say Georgism is more important than monetary reform but willingly acknowledge monetary reform is needed. Critics come in many varieties. Regrettably there is a tendency for advocates from both sides tend to promise a growing list of wonderful results from their reform. Maybe Henry George School people only see landlords as “the enemy,” and to mention money, credit and bankers confuses them. Do we see people on both sides arguing that the others should just get off their territory?

Recently I heard a Georgist argue that if you transfer land into community ownership then the money issue disappears.

So let’s tease this one out. To some extent he is right, but he misses several vital factors. For instance he doesn’t appear to understand the growth imperative will still be present, so he needs to work out where the excess money will go, and follow the results to their logical conclusion.

Take the important book Money and Sustainability, The Missing Link, a Club of Rome Report by Bernard Lietaer, Christian Arnsperger, Sally Goerner and Stefan Brunnhuber. The authors say there are five results of creating money as interest-bearing debt – amplification of boom and bust cycles, short-term thinking, compulsory growth, and devaluation of social capital where selfish behaviour replaces co-operative behaviour.

Or take another example of monetary reformers overpromising. While we can’t tell if she actually believes it herself or not, monetary reformer Amanda Vickers lists their extravagant promises. She writes in the Otaki Mail, “Sovereign money advocates extrapolate further that the outcome would also be far-reaching throughout our economy and our lives. They say it could also improve: the inequality gap, child poverty, housing bubble control, student debt, state asset sales, job security, local businesses performance (due to the 10% higher output gains), budgets for local community projects and facilities, health care and education.”

Positive Money in their little video says money is created every time someone takes out a mortgage. The money doesn’t come from someone else’s saving but is new money just created. The bank enters your debt as an asset on their accounts then enters the same amount in the liabilities column of their books, your deposit. The entire money supply is on loan from the banking system. When they charge interest on this money creation £200 billion a year is transferred from the public to the financial sector every year in UK. Since money is created as interest-bearing debt, if we all pay off our debts the current economic system would collapse. There would be no money in the system.The debt can never be repaid. The money creating power needs to be transferred to some democratically accountable body and spent into existence instead. He mentioned it has been pumped into property bubbles and financial markets.

They claim it would reduce inflation and that you would also be able to move towards a low carbon society this way.

So what I take out of this is that Positive Money people, by not addressing tax reform, may think that if you create money by spending it into existence you will avoid rising land prices. By creating a monetary authority to control inflation they give their new monetary authority magic power to stop money going into a land bubble. It simpley wouldn’t happen this way.

So let’s go back to the Georgist’s claim that when you have land in community ownership the money issue disappears. Not so. If you continue to create money as interest bearing debt, then money still moves from the public to the financial sector. Though there is always the personal desire to pay off your debt the money supply would disappear if everyone did this. Moreover, there is always the mathematical imperative for the money supply to grow in order to pay off the debt with interest. That is what we don’t want on a finite planet.

It is true that when there is either no cost or little cost on the holding of land AND money is created without interest or with low interest, you get money pouring into land inflation. Anyone who has paid a mortgage knows that when interest rates decline, there is what they call a housing bubble (it is really a land price bubble). This is undesirable. And if you take land out of the market entirely money won’t go into a land bubble, but it will go into some other form of monopoly.

When Karl Fitzgerald of Prosper Australia did his 2013 study Total Resource Rents of Australia, he subtitled it “Harnessing the Power of Monopoly.” The list includes Land Residential, Land Commercial, Land rural, Land other, Subsoil Minerals, Oil and Gas, Water Rights, Taxi Licences, Airports, Utilities, Fishing, Forestry, Gambling, EMS, Satellite Orbit Rights, Internet Infrastructure, Domain Name Registration licence, Banking Licences, Corporate Commons Fee, Patents, Parking fees, Public Transport, Liquor Licences, Vehicle Rego Licences, Sin Taxes on Tobacco and Alcohol, Carbon Taxes, Non Tax Revenue (sale of goods). That’s quite a list of the things you can claim a monopoly right on. “Land” in its widest sense is actually a list this long and longer.

So if we just deal to land by taking it out of the marketplace, you just put your money into monopolising another part of the commons. You could buy a much desired personalised number plate. The plate “F1” fetched £14 m and the number plate with the number 1 was bought by an Emirati businessman for £7.25m in 2008. Perhaps you could buy a domain name? Sex.com sold in Nov 2014 for $10m and insurance.com in 2010 for $35.6m.

Or the extra money could go into the financial sector including securities, commodities, venture capital, private equity, hedge funds, trusts, and other investment activities like investment banking). Nothing productive here. Yale economics professor Robert Schiller says, “The classic example of rent-seeking is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free. If enough lords along the river follow suit, its use may be severely curtailed.” Yet that is where a lot of money and activity is going.

In June 2015 the Guardian reported that “Adair Turner, the former chair of the Financial Services Authority, gave a memorable critique of the UK financial services industry in the wake of the credit crisis when he said that some of the activities carried out by the City’s finance firms were “socially useless”.”

There are many places where the excess money can go if there is tax reform but no monetary reform. We haven’t even touched on fishing quotas, art investments, oil and gas, utilities, or forestry. Leaving the growth imperative firmly in place by leaving money created as interest bearing debt will invite trouble and plenty of it.

However there is no doubt that land price inflation would disappear if all land was owned communally and leased from a public entity instead. While the boom-bust cycles would exist for other parts of the commons that remain in the market place, these cycles would no longer be present for land prices.

As Professor Michael Hudson explains “In a nutshell,land rent today is paid out as mortgage interest. Ditto for oil and gas, and monopolies.In terms of reform, financial and tax reform must go together. What is not taxed will be capitalized into bank loans. That’s the basic message.”

In one of Michael Hudson’s papers he quotes from Tolstoy when discussing the issue with Henry George. “The land cultivator in a bad year, not being able to pay the rent exacted from him by force, would have to enslave himself to the man with money in order to keep his land and not lose everything.”

Social bonds an experiment that can’t work because…

Posted on June 21, 2015 by Deirdre

This morning during a Q and A current affairs programme I tweeted the following tweet. “#nzqanda Social bonds experiment risky. Can’t solve social problems separate from wages, jobs, tax, governance issues @NZQandA” Six people retweeted it and many marked it as favourite, showing it resonated with others watching the programme.

Quite frankly the Minister of Social Development, Anne Tolley, is bound to fail with this experiment. And it is not just that you can’t privatise social welfare and expect good results. It is because the whole political system is one system so you can’t put welfare in a silo, treat it separately and expect good outcomes.

Yesterday I heard Kim Hill in a Radio NZ interview with UK Renegade Economist Ross Ashcroft utter this telling remark: “It seems nothing you can do in an economy isn’t going to cause some bad effects somewhere else.” Well Kim you hit the nail on the head there! Everything is connected. And it is not just within the economic system. It is the tax system, the welfare system, jobs, governance, the credit system and wages structures that are all tied up together. Change the paradigms of a few of these and the whole system gets tweaked for the better.

So how do we get a healthy economic system that results in good social outcomes? Looking at the range of social problems from truancy, mental health problems, crime, family dysfunction, stress, educational issues, loneliness, health where does it all stop and where is the best place to intervene? Try education of young mothers? Oh no, they are victims of domestic violence and poverty. Try wages alone? Oh dear the businesses shed jobs. Try crime alone? Nothing changes. Poverty persists, the wealth gap keeps widening. Try housing without changing the tax and rating systems? Oh dear, you get urban sprawl and an inability of councils to build essential infrastructure so you get more social problems. Fix the money system by itself with zero interest rates but fail to address the tax system? You just exaceberate the housing bubble and widen the wealth gap further.

Whanau Ora , a cross-government system, an approach that places families/whānau at the centre of service delivery, requiring the integration of health, education and social services, gets it right as far as it goes. This system treats the family as a whole system and refuses to accept that ten state agencies must enter the home that has a social problem. Everything affects everything else. The presenting problem of the misbehaving adolescent may reveal a range of other issues – domestic violence, poverty, educational failure and health problems, housing problems, job insecurity and so on.

But even the integrated Whanau Ora programme can’t solve the fundamental issues of a structurally faulty currency system, tax system, welfare system and governance system. A currency must circulate at an optimal pace, businesses must create well paid and satisfying jobs and be constrained by a tax system that protects exploitation of the habitat.

One of the more interesting admissions from the Minister of Social Welfare was that a lot of problems can be solved locally rather than centrally. Panel member Josie Pagani agreed. Yet devolving functions in the way we have previously understood it isn’t going to work either. Why not? Because the state can still intervene, give councils less money, legislate to put further financial burden on councils and so on.

The only way to restructure an economy is to change four major paradigms. Instead of central devolving functions and finance try the other way round. Instead of banks creating the country’s credit as interest bearing debt, let the people create their means of exchange interest free. Instead of taxing work and spending and enterprise, let’s put a rental on the exclusive use of the commons like land, minerals and so on. Instead of a welfare system that is asset and income tested, let’s give a basic income derived from the land rents that were previously privately captured.

There is a great deal of thinking to do. When the global financial system’s huge credit bubble finally bursts let’s make sure we start again, but start properly. The New Economics movement is a vehicle for this new thinking. We can and we must develop a new economic system that works for nearly all life. Otherwise we are going to repeat the same failed experiment. And it is not just the social bonds experiment.

Productivity Commission recommends change to land value rating system

Posted on June 17, 2015 by Deirdre

You won’t find this headline in the NZ Herald or the Dominion Post because it is all but ignored in their reports. Admittedly the Dominion Post gives the rating system a mention in paragraphs 16 and 17 of its report, but its headline was “User pays seem as vital for housing”.

If we look at the actual report, Using Land for Housing, it argues logically that a return to land value rating system is going to incentivise building. After several pages of evidence it concludes very moderately that “A good case appears to exist for setting general rates on the basis of land value rather than capital value, to encourage the development and efficient use of land. Arguments used to prefer capital value rating are not strong.”

It says:
“A number of policy settings would influence a landowner’s incentive to develop land, at the margin. This
section considers four:
 the valuation basis of councils’ general rates;
 land taxes;
 tax breaks for development; and
 charging rates on Crown-owned land.”

The media of course will focus on on the last of these.

Go to P258 of the report and read the subsequent pages. Submissions on the draft report are due on 4 August

Nicole Foss talks about why small currencies will help in the coming credit crunch

Posted on June 11, 2015 by Deirdre

At the recent New Economics Party Unconference in Otaki the participants decided to make their own agenda. This is the group that talked about complementary currencies. Nicole Foss, Kai Hackemesser and Andrew Casey.

Why we do what we do and what we believe

Posted on May 21, 2015 by Deirdre

Why we do what we do in the New Economics Party

We believe that a political economy should be like a living organism and obey the laws of Nature. It should have both protection mechanisms to protect us from harm and growth opportunities to allow everyone to develop and specialise. In a healthy organism there are jobs for every cell and organ. It should have a thriving economy fuelled by the energy of money yet constrained by the limits of Nature. We believe the human species is part of Nature not there to dominate it. The riches of Nature and our heritage must be fairly shared and wisely managed.

Cooperation for common good
We believe in the collective power of good people to work for our common purpose and we refuse to say, “Change isn’t possible”. We know in our bones that the design of an economy is the critical factor needed to sustain and nourish life on this beautiful planet and that that like the 50 trillion cells in our bodies, seven billion people can actually work cooperatively without poverty, climate crises or war. We must do it or else perish as a species. Failure is not an option.

We are audacious enough to believe that people of every colour and creed can live together in peace with their basic needs met. With our collective refugee population now amounting to millions, it is time to address the causes of the injustices causing war, for without justice there will be no peace. We are adamant that every person has the right to the basics of life – a safe warm home, nourishing food, education health care and a sense of belonging.

We are one with our habitat
We believe that a political economy designed along the laws of Nature doesn’t result in the belching of greenhouse gases into a warming planet. We are impatient to protect our grandchildren from ever worsening storms, droughts and food shortages. After the wakeup calls of climate change and gross inequality, there is no time to waste trying to dominate and subdue Nature. Our country and indeed the world must be subservient to Nature and listen to her wisdom. Our laws and our human created currencies and structures must be in line with Nature’s laws. Only then can we live in harmony, solve climate change and live happily with our families free from war and Nature’s ravages. Nature bats first and last.

Biomimcry
We believe it is imperative to design a political economy that is both elegant and simple. Add-on policies like Working for Families or Accommodation Supplements are simply signs that the basic design is poor. We want a simple tax system, not one full of ways to avoid tax and only serving to employ bureaucrats and accountants. We won’t tolerate a benefit system that invites dishonesty and penalises thrift and cooperation.

Honouring the Treaty
We recognise that Te Tiriti o Waitangi is a living treaty that must constantly be honoured. We understand the pain of colonisation of the Maori people by the British and will work cooperatively with Maori at each hapu and iwi level to work out policies in line with our principles. We acknowledge the injustice of the forced change to privately owned land that was brought by colonisers. We acknowledge the pain of a new money system on Maori and the need to pay tax in that currency.

We acknowledge the catch 22 demands of collective land ownership and the demands of the banking system for collateral for loans that has locked Maori outside the mainstream economy, generating an inability to finance productive investment in Maori enterprise for the last 175 years and that still ongoing. We understand the ongoing dispute between local government and Maori about unpaid rates originates from this demand.

We acknowledge the contribution Maori culture has made to the wider New Zealand culture, and the contribution it may yet make as pakeha are ready to receive – in particular the understanding of reciprocity in economic relations (sometimes known as utu) that underpins sustainable economy and sustainability per se.

We acknowledge the destructiveness of forced aggregation of Maori interests to iwi level that has resulted in the corporatization of ownership of Maori resources and consequent alienation of the bulk of the Maori population from those resources.

Energy transfer
The lifeblood of an economy is its flow of money. We believe we must take full control of our money systems – that is the sovereign right of any country. No longer will we allow commercial banks to create and control our money supply and gamble with our deposits, while they are poised to leave the innocent depositors to pick up the mess if they fail. We reserve the right to design the currencies we need.

Diversity, recycling
Everything manufactured is sourced as close as possible to where it is needed, and recycled for a no-waste economy. In a natural economy nobody will go hungry or homeless. Every individual is of worth and has the right to meaningful work. Nobody will be neglected, living in cars or crowded homes while others amass wealth they do not need. That is not Nature’s way.

Redistribution
Without revenue neither central nor local government can build infrastructure, schools and hospitals. The revenue we aim should tax the exclusive use of the commons (in its wider sense). Everyone should have the inalienable right to a share of the common wealth so the rents from the commons are be shared by distributing Citizens Dividends. Nobody should own the earth, water or fisheries or anything left to us by our ancestors.

Governance
A living system is a self-organising organism with a multitude of feedback and feed-forward mechanisms in a state of tension and negotiation till equilibrium is established. So we believe that decisions must not all be made centrally but all over the country. Local and national government must constantly be negotiating. We want strong communities with the inalienable right to elect their own decision makers; the fundamental unit of government must be a powerful Community Board.

Cities
We won’t tolerate sprawling cities with an elite landed class occupying desirable land near good schools and regular transport while those on the outskirts must wake early, leave their children and catch two buses to unsatisfying low paid jobs. For parents of young children two hours commuting is not conducive to anyone’s wellbeing. We can do better. We want compact walkable cities with efficient rapid transit without the use of fossil fuels. We understand that economic signals like rating systems and tax systems are driving our irrational behaviour. That is no way to plan a city.

We want local and national governments to have sufficient reliable income to pay for rapid transit, education and healthcare – revenue derived from charging a full rent on the exclusive use of the commons in its wider sense. Taxing the good things is not an option – it’s illogical to tax work, sales or enterprise. We will not watch on while governments struggle for revenue, people work long hours while property owners grow rich on the rising price of land.

Managing borders
We believe firmly in our national sovereignty. Although we know how to control our borders when it comes to pests and threats to our agriculture we don’t yet know how to control our borders when it comes to money. While hot money sloshes round the globe in search of higher returns and international trade agreements are written largely by the corporations that rule the world, we will not rest. We demand our country’s freedom to make laws without fear of being sued by a foreign corporation in a secret offshore tribunal.

New Zealand’s opportunity
We believe New Zealand with its small educated population and rich resources has an obligation to be a model of how to run a vibrant and exciting post fossil fuel economy where entrepreneurs can truly thrive and nobody is left uneducated or in poverty.

https://neweconomics.net.nz

The 1-3% inflation target is really a circulation incentive and we need to read Gesell instead

Posted on April 14, 2015 by Deirdre

The other morning on the radio I distinctly heard a senior politician say that the economy wasn’t going well ‘because the inflation rate was too low at below 1%’.

I thought I was hearing things. Indeed someone coming to Earth from Mars might ask a few questions. Presuming inflation is a bad thing and it is now near zero, why then is the economy not going swimmingly?

Then I remembered what I had recently learnt – that economists had designed a 1-3% inflation target as an ideal because you had to have some incentive to spend today or the economy would seize up. You didn’t want inflation too high, but a low rate of inflation is acceptable and even necessary simply because otherwise people hold on to their money and nobody spends. They realise that goods will be dearer tomorrow – if only by a little – so they decide to spend now rather than wait.

Goodness, how few people know this. And how it is becoming exposed now that the inflation is below 1% in more than one of the developed nations.

Now land was taken out of the CPI in 1999 as you can see in this graph.

Yes the graph makes good sense. With land safely out of the CPI, economists can brag that their target has been achieved for a consistently long period. And you had the huge land bubble of 2002-2008 never recorded in the CPI and then again the land bubble of 2011 onwards completely out of the graph.

So putting aside this statistical sleight of hand, we also know now that the national currency must have a circulation incentive. (That is under the current currency design of money created as interest bearing debt)

As we collectively head blindly into a period of deflation of unknown length and pain, we must pay attention to the writings of Silvio Gesell, a far thinking German businessman who also lived during a Depression in the 1880s in Argentina. His book The Natural Economic Order has been translated and put online for all to read. Of him Keynes said “The world will owe more to Gesell than it does to Marx”.

Gesell realised that a businessman with goods is at a disadvantage from those holding money. While the goods decayed, rotted and generally went out of date as they waited for someone to buy them, the money retained its value. Those in possession of money were better off than those who had goods. He famously wrote: “Only money that goes out of date like a newspaper, rots like potatoes, rusts like iron, evaporates like ether, is capable of standing the test as an instrument for the exchange of potatoes, newspapers, iron and ether.”

After decades of having loyal followers, during the 1930’s depression, Gesell’s theory was put into practice, but only briefly because the banks managed to persuade the government to stop it. It was in the small town of Wōrgl, Austria 1932 that the Mayor put aside 20,000 schillings and used them as backing for notes called Work Certificates. They paid their employees partly in Work Certificates. Each note had 12 spaces on the back and a stamp had to be stuck on every month to validate the note. To avoid paying for the stamp people spent the Work Certificates quickly. The currency was successful at reducing unemployment, so much so that people came from miles around to witness the Miracle of Wōrgl. It was in place 15 months before the government made it illegal and they went back to unemployment.

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