Begetting Silvio Gesell in the Modern Economy: A Marriage of Frederick Soddy and Kenneth Boulding

ABSTRACT In the Natural Economic Order, first published in 1916, Silvio Gesell warned against a fiat monetary system that in place of controlling the circulation of money with demurrage, sought to manage the system by accommodating demand for liquidity. We have been in such a system since 1971 and it has survived these 55 years without collapsing in the way that Gesell predicted. We will explore how Gesell's concerns apply to the modern system of monetary management and will argue that he has been right about the process but that we have not yet reached his inevitable end. We will also expand on Gesell with a marriage of Soddy and Boulding to help understand wider implications of monetary management in the modern economy.