Maybe Our Money Should Have an Expiration Date

Noema explores the concept put forth by a long-ago German economist
By John Johnson,  Newser Staff
Posted Nov 25, 2023 2:45 PM CST
Maybe Our Money Should Expire
   (Getty / Marian Vejcik)

It's a novel thought experiment: What if our money had an expiration date? In Noema, Jacob Baynham explores the idea and how it would transform the very idea of what money is, or should be. As Baynham explains, a German economist named Silvio Gesell proposed the idea more than a century ago in his book The Natural Economic Order. "Only money that goes out of date like a newspaper, rots like potatoes, rusts like iron, evaporates like ether, is capable of standing the test as an instrument for the exchange of potatoes,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," he wrote. In Gesell's view, people tend to hoard money because it gathers interest and gains value, and he argued that the practice leads to both economic and social ills. Gesell went beyond theory, however, devising a form of currency called Freigeld that is explained in detail in the piece.

Freigeld, alas, did not catch the world by storm. And while many have dismissed Gesell as a crackpot, none other than John Maynard Keynes years later wrote that the principles of Freigeld were sound. "I believe that the future will learn more from the spirit of Gesell than from that of Marx," Keynes wrote. A modern-world example: Former Federal Reserve official David Andolfatto wrote a paper in 2020 noting that COVID stimulus checks didn't goose the economy as quickly as expected because people held onto the money. "What if we gave them the money with a time fuse?" Andolfatto tells Baynham. "You're giving them the money and saying look, if you don't spend it in a period of time, it's going to evaporate." He says he now finds Gesell's theory "intriguing" but doesn't think it would could work on a large scale. Read the full story. (Or check out other longforms.)

Stories to sink your teeth into.
Get our roundup of longform stories every Saturday.
Sign up
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X