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The euthanasia of the rentier — A way toward a steady-state economy?

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  • Loehr, Dirk

Abstract

A positive interest rate has many impacts on ecology. One of them is the pushing of economic growth. In the present economy, accumulation of capital is an end in itself. According to the “Golden Rule of Accumulation”, the extension rate of the capital stock is equal to the interest rate. However, in the present economic conditions the interest rate is always significantly higher than zero, due to the liquidity premium of money (Keynes). In this context, old proposals such as the “free money” approach of Silvio Gesell could provide interesting solutions. Gesell wanted to neutralize the liquidity premium by putting “artificial” carrying costs on money. By increasing the stock of capital assets without being interrupted by economic crises, the interest and profitability level should be reduced down to zero. Because in this situation every marginal saving and marginal investment would cause a negative interest or profitability rate, they would be stopped. Though Keynes was very excited by the proposals of Gesell, he criticized the fact that Gesell did not see many of the further obstacles. However, these obstacles could be overcome by means of further institutional reforms.

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  • Loehr, Dirk, 2012. "The euthanasia of the rentier — A way toward a steady-state economy?," Ecological Economics, Elsevier, vol. 84(C), pages 232-239.
    • Handle: RePEc:eee:ecolec:v:84:y:2012:i:c:p:232-239
    DOI: 10.1016/j.ecolecon.2011.11.006
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    Cited by:

    1. Cahen-Fourot, Louison & Lavoie, Marc, 2016. "Ecological monetary economics: A post-Keynesian critique," Ecological Economics, Elsevier, vol. 126(C), pages 163-168.
    2. Larue, Louis, 2020. "The Ecology of Money: A Critical Assessment," Ecological Economics, Elsevier, vol. 178(C).
    3. Engler, John-Oliver & Kretschmer, Max-Friedemann & Rathgens, Julius & Ament, Joe A. & Huth, Thomas & von Wehrden, Henrik, 2024. "15 years of degrowth research: A systematic review," Ecological Economics, Elsevier, vol. 218(C).
    4. Svartzman, Romain & Dron, Dominique & Espagne, Etienne, 2019. "From ecological macroeconomics to a theory of endogenous money for a finite planet," Ecological Economics, Elsevier, vol. 162(C), pages 108-120.
    5. Sebastian Strunz & Bartosz Bartkowski & Harry Schindler, 2017. "Is there a monetary growth imperative?," Chapters, in: Peter A. Victor & Brett Dolter (ed.), Handbook on Growth and Sustainability, chapter 15, pages 326-355, Edward Elgar Publishing.
    6. Dittmer, Kristofer, 2015. "100 percent reserve banking: A critical review of green perspectives," Ecological Economics, Elsevier, vol. 109(C), pages 9-16.
    7. Vuorinen, Katariina E. M., 2026. "Structural liquidity shortfalls, competition and macroeconomic stability: Conceptual synthesis of economic growth dependencies," Working Paper Series 02/2026, Post-Growth Economics Network (PEN).
    8. Jouzi, Fatemeh & Levänen, Jarkko & Mikkilä, Mirja & Linnanen, Lassi, 2024. "To spend or to avoid? A critical review on the role of money in aiming for sufficiency," Ecological Economics, Elsevier, vol. 220(C).
    9. Lee, Kang-Soek & Werner, Richard A., 2018. "Reconsidering Monetary Policy: An Empirical Examination of the Relationship Between Interest Rates and Nominal GDP Growth in the U.S., U.K., Germany and Japan," Ecological Economics, Elsevier, vol. 146(C), pages 26-34.

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