Comment on the Wörgl Experiment with Community Currency and Demurrage

The text looks at demurrage, which is the intentional depreciation of a currency over time, the main object being to prevent its being hoarded and to speed its circulation from hand to hand. The most celebrated case in which a demurrage currency was issued was that of the Austrian town of Wörgl.

Thomas H. Greco, May 2002

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Summary :

The concept of demurrage is generally credited to Silvio Gesell. Of all his great insights into money and economics, this idea of “depreciating money” is the one item that his followers have seized upon with great passion. The Wörgl experience has often been heralded by modern day Gesellians as proof of the effectiveness of demurrage in stimulating the circulation of currency, and thus, as the main feature that is necessary for the economic advantages of a community currency to be realized. But does the evidence support such a conclusion? The fundamental question in the Wörgl case is this: Would the Wörgl currency have been just as effective without the demurrage feature, as with it?