« | Home | »

The Miracle of Wörgl

Tags: | |

‘Death to the Euro.’ The handmade sign was pinned to the wall of a community centre in San Luis, a gentrified neighbourhood just inside the boundaries of Seville’s old city. It was a balmy Friday evening, but inside a crowd of around a hundred people were listening to a 45-minute PowerPoint presentation on puma, a new local currency for San Luis launched last month. Puma is the third local currency to be introduced in the Andalusian capital this year. Pepa and jara already circulate in Macarena, a working-class district on the other side of Seville’s city walls.

After explaining how the new currency would work – euros can be exchanged one-for-one for puma notes, which are valid in designated San Luis shops – the speaker took questions from the floor: an elderly man with a straw hat wanted to know if his local café would accept puma; a young mother asked how she could sign up for the scheme on-line.    
 
Repeated doses of EU-enforced austerity have hit Spain hard. Last week, the country officially slipped back into recession. The Spanish economy, the fifth largest in Europe, is expected to contract by 1.7 per cent in 2012.
 
In the slipstream of the Eurozone crisis, local currencies – perfectly legal, so long as income tax is paid – have proliferated across Spain. The zoquito has circulated in parts of Galicia since 2007. Local currencies are proving popular in the UK, too: the Totnes pound has been around since 2007; the Brixton pound, with a natty picture of Ziggy Stardust on the tenner, emerged in 2009; the Bristol pound is about to launch.
 
Local currencies tend to circulate more rapidly than national (or transnational) currencies, as well as keeping money in the area, with the result that local economic activity increases. In 1932, the mayor of Wörgl in Austria replaced the faltering national currency with specially printed ‘Certified Compensation Bills’. Inspired by Silvio Gesell’s theory of ‘free-flowing money’, the Wörgl bills were designed to depreciate by 1 per cent of their value each month in order to promote rapid circulation and dissuade hoarding. Within weeks Wörgl had almost full employment. A new ski jump was built. Roads were repaired. Six neighbouring villages soon copied the ‘miracle of Wörgl’. In 1933, the Austrian Supreme Court upheld the Central Bank’s monopoly over the issuing of currency. Thirteen months after it began, Worgl’s experiment was over; within weeks joblessness in the town returned to around 30 per cent.
 
At the end of the evening in Seville, plates of runny omelette were passed around the room. An activist in his late twenties – a member of Spain’s M15, or indignados, movement – said the presentation was ‘fantastic’: ‘He wasn’t just talking about money, he was talking about trying to create a new society. We need another system. The currency is just a tool.’ 

Comments on “The Miracle of Wörgl”

  1. anton_15 says:

    For some contemporary accounts of the experiment, see the 1934 issue of the Annals of Public and Cooperative Economics: http://onlinelibrary.wiley.com/doi/10.1111/apce.1934.10.issue-1/issuetoc. These pieces are interesting in part because the experiment had proved controversial and been subject to so much outside criticism.

    The piece by Alex von Muralt, identifying those who lost out in the experiment, notes without a trace of cynicism that Wörgl’s inhabitants were all in it together: “the parish does not consist of a few officials only, but of the whole of its inhabitants, and that all would be victims if the parish became insolvent”.

Comment on this post

Log in or register to post a comment.


  • Recent Posts

    RSS – posts

  • Contributors

  • Recent Comments

    • Alex K. on At the Gogol Centre: "Bo-beh-o-bi, sang the lips" and the following lines are metrically convenient but grammatically problematic translations. Khlebnikov is using a refle...
    • Simon Wood on At the Gogol Centre: I am baffled by politics now, when it used to be like table football with a blue team and a red team. This is, indeed, like being a small child, not q...
    • Gardiner Linda on At the Gogol Centre: A couple of years ago I was in Rijeka, where the Zagreb Experimental Theatre was performing Hamlet (in Croatian). Although I have perhaps ten words of...
    • Higgs Boatswain on Cold War Ghosts: Although the paranoid fear of the Russian East is undoubtedly a deep-seated nightmare in the psyche of the liberal West, it is not quite so cliched as...
    • Stu Bry on Trump and the Doomsday Machine: Surely the death knell for MAD was the US withdrawal from the ABM treaty in 2002? Reagan had Alzheimers and was under the influence of Teller. Bush...

    RSS – comments

  • Contact

  • Blog Archive

Advertisement Advertisement