Silvio Gesell: The Natural Economic Order
Part 4: Free-Money or Money as it Should Be


5. HOW FREE-MONEY WILL BE JUDGED

H. The Co-operator

Since the introduction of Free-Money the popularity of our movement has strikingly diminished, and I hear almost daily of the dissolution of consumers' co-operative societies. This is another of those unforeseen and surprising consequences of Free-Money. But in reality there is nothing to be surprised about. The consumer buys for ready money, lays in stores and buys goods in large quantities in the original packing. The merchant is not called upon to give credit. He keeps no books, nor does he need a large warehouse, for goods are mostly delivered direct from the railway station.

The combined effect of all these circumstances is of course an extraordinary simplification of commerce. Formerly only the cleverest businessmen managed to escape the perils of buying and selling on credit; formerly only the most capable, industrious, thrifty, orderly and active persons were fit for commerce; now anyone of average intelligence can succeed in commerce. No warehouse, no scales, no errors, no book-keeping, no estimates of future demand. At the same time cash payment, ready money on the delivery of the goods, no bills of exchange, no cheques, no humbug! Not even an invoice is asked for. Here is the case or sack, and here is the money. The matter is settled and forgotten, and the merchant is free to look out for new transactions.

Work of this kind can be done by any subordinate; and by the laws of competition the remuneration for it must fall to the level of a subordinate's wage.

So what is the use of the co-operative society ? Its purpose, the reduction of the cost of commerce, is realised by the money reform. Whom is our society to associate henceforward ? It was composed of the Úlite of the consumers, those, namely, who were able to pay cash and to purchase in quantities considerable enough to make it worth their while coming to our shop. But owing to the changed conditions of commerce such selection is no longer possible, because today every consumer possesses these qualities; they all pay cash and they all buy in large quantities. It would be impossible to form an association of negroes in Africa, or an association of beer-drinkers in Munich. For the same reason the money reform has made consumers' co-operative societies impossible.

Nor is the disappearance of the societies any great loss. As a nursery for public spirit they failed, because they were necessarily in opposition to the rest of the people. Sooner or later they would have come into conflict with their natural counterpart, namely societies of producers, and that would have created problems which, in theory and practice, could have been solved only by universal communism, by the abolition of every kind of property in every country. What price, for instance, would the Union of German Co-operative Societies have consented to pay to the Union of German slipper manufacturers ? Only the police could answer the question.

And had we any real cause for pride in our achievements ? It is a humiliating reflection that although we succeeded in ruining many small independent shopkeepers, we never ousted a single speculator in stocks or produce. But it was just there, on the Stock-Exchange, that we ought to have shown our strength!

Who can respect a "public-spirited society" which displays its power by striking only at the weak ? I much prefer Free-Money which also, indeed, ousts the small shopkeepers, but at the same time opposes as decisively the money magnates of the Stock-Exchange.

Nor can it be affirmed that the co-operative movement was exempt from the grave evils of bribery and corruption. When the administration of public funds or the funds of a society cannot be efficiently controlled, the thief is sure to appear in the course of time. And the members of the society cannot be expected to examine every invoice and to compare all the goods delivered with the samples. Nor is it possible to prevent private agreements, through which co-operative officials may be bribed to the detriment of the society. If the society dealt only in goods of uniform quality such as, for instance, money, an effective control of the officials would be possible; but is there any commodity, except money, in which quality as well as quantity must not be taken into consideration ?

What we have to expect from a general application of the co-operative system is therefore communism, the abolition of private property, and widespread corruption. That is why I welcome the attainment of the object of the co-operative movement, namely the reduction of commercial costs, simply by a change in commercial practice resulting from Free-Money. Goods now pass once more from owner to owner; goods and property are inseparable. The interference of middlemen, the fixing of prices and qualities by agents on behalf of third parties not only leads to corruption, it is in itself a corruption of the idea of a commodity, a corruption of price-fixing by demand and supply.

And is it not strange that the natural aim of the co-operative movement, the association of all the societies, should have been realised by the dissolution of all the societies ? For the most efficient co-operative society is always the open market, where owner deals with owner, where the quality of the goods is estimated by those concerned personally, where the buyer is not bound to certain branch shops, villages, towns; where the tokens of the society (money) are available throughout the realm, where distrust disappears and corruption is excluded, and where public control is superfluous, because no private persons with special interests act as agents to conclude the bargain on behalf of the absent principals. Provided of course, that the open market does not add to the cost of the goods more than does the administration of the co-operative society! But this condition has been fulfilled by the creation of Free-Money. Commerce has been accelerated, secured and cheapened through Free-Money to such an extent that commercial profit can no longer be distinguished from a common wage. Which means that co-operative societies have become superfluous.

 

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