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NOTES ON MERCANTILISM, ETC.

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its literature seems to be distributed from San Antonio ,Texas, its main strength lying to-day in the UnitedStates, where Professor Irving Fisher , alone amongstacademic economists, has recognised its significance.

In spite of the prophetic trappings with which hisdevotees have decorated him, Gesell ’s main book iswritten in cool, scientific language; though it is suffusedthroughout by a more passionate, a more emotionaldevotion to social justice than some think decent in ascientist. The part which derives from Henry George , 1though doubtless an important source of the move-ment’s strength, is of altogether secondary interest.The purpose of the book as a whole may be describedas the establishment of an anti-Marxian socialism, areaction against laissez-faire built on theoretical founda-tions totally unlike those of Marx in being based on arepudiation instead of on an acceptance of the classicalhypotheses, and on an unfettering of competition in-stead of its abolition. I believe that the future willlearn more from the spirit of Gesell than from that ofMarx. The preface to The Natural Economic Order willindicate to the reader, if he will refer to it, the moralquality of Gesell. The answer to Marxism is, I think,to be found along the lines of this preface.

Gesell ’s specific contribution to the theory of moneyand interest is as follows. In the first place, he dis-tinguishes clearly between the rate of interest and themarginal efficiency of capital, and he argues that it isthe rate of interest which sets a limit to the rate ofgrowth of real capital. Next, he points out that therate of interest is a purely monetary phenomenon andthat the peculiarity of money, from which flows thesignificance of the money rate of interest, lies in thefact that its ownership as a means of storing wealthinvolves the holder in negligible carrying charges, andthat forms of wealth, such as stocks of commodities

1 Gesell differed from George in recommending the payment of com-pensation when the land is nationalised.