The free economy is a term or model developed by Silvio Gesell in 1916 and its objective was to increase private initiative with certain characteristics, ensuring free access to resources. Its original name is Natürliche Wirtschaftsordnung and it is the complete opposite of the socialist system.
This economic system is a bit complex, since the way in which currencies are managed is with a negative interest, indicating that monopolizing property is in itself private property, if not the legal monopoly of money. A premise of the free economy is that all money is issued for a certain time, that is, without inflation or deflation.
A fundamental purpose of this system is to stimulate investment and productive credit, since it does not seek to eliminate interest, because they are considered as an incentive, but rather the oxidation of the value of the currency so that interest does not come from inactive accumulation but from the return of money invested in the real generation of wealth. In this way it popularizes private property.
The free economy model holds that current monetary systems are flawed. According to Adam Smith, prices convey important information. For example, if prices fall it means that there is less demand or more supply, indicating that it leads a buyer to buy more, or a seller to start producing another product or service. That is why the price, together with the members in the market, accumulates a feedback loop around a stable situation, which seems to be the most suitable of prices. This is the best time, since the market is ideal, nobody pays too much or earns too little and there are no tendencies from either party to change the price.
