Economic Circle Cooperative - Switzerland

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This is an explanation of the still surviving Swiss WIR system (Wirtschaftsring-Genossenschaft = Economic Circle Cooperative),which is one of theMonetary Reform initiatives from the 1930's:



The WIR "was founded as a self-help organization in 1934 by Werner Zimmermann and Paul Enz, both adherents of the "free-money" theory of Silvio Gesell. Small and medium-sized businesses were especially hard hit at that time by the depression following the stock market crash of 1929. Sales had receded massively, and many employees had lost their jobs. There were no signs of a recovery....

The new self-help organization was intended to provide a remedy. It started with 16 members and an initial capital of SFr 42,000....

The WIR-founders were not alone at the time. All around the globe similar organizations were springing up. Whole towns and associations of people of the most diverse types were seeking effective remedies to the crippling mood of the great depression, using tools like non-cash barter circles and self-created money. These groups followed the same general approach:

1. As a stopgap to replace the missing national currency, they created complementary currencies which functioned within an overseeable framework.

2. They equipped the new medium of exchange with a stimulus to spend it quickly, rather than holding on to it. Thus as a rule, not only was no interest paid on accounts, but on the contrary, a "storage fee", a kind of negative interest, was charged. This was to counteract people's tendency to hang onto their money for fear of the future. In this way, the familiar "blocked thought and action" syndrome -- perceived by psychologists even in the group pathology of the depression -- was to be broken through and the circulation of money assured....

After the war it made a new start, and in the postwar boom period its membership rolls grew rapidly. This demonstrates that the basic complementary currency idea is advantageous not only in times of economic crisis. The demurrage feature that burdened accounts with a storage fee was done away with. Such a strong stimulus for spending money rapidly would have been inappropriate to the fast-moving business climate of those years. But the interest-free feature was maintained, and has remained constant to this day: WIR accounts earn no interest....

The WIR Cooperative now numbers over 62,000 members, who amongst themselves create transactions worth approximately SFr 1.65 billion [!] annually. Considering that payments on average are made only from 30-40% in WIR and the remainder in Swiss francs, the total value of goods and services traded in the Cooperative more than doubles that amount." (

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