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Freiland (German for "free land") is an economic theory and proposal founded by the German-Argentine economist Silvio Gesell in his 1916 book, The Natural Economic Order (German: Die natürliche Wirtschaftsordnung durch Freiland und Freigeld) as a component of his proposed Freiwirtschaft economic system.

Freiland was inspired by Georgism. Despite their aims and similarities, there are multiple important differences regarding their implementation and effects. ^[1]

Gesell disagreed with Henry George that land value taxes could solve the problem of land rent,^[2] as he believed that the taxes could be passed onto the tenants.^[3] He proposed nationalizing all land from current landowners, with the purchases financed by land bonds that would be paid over 20 years from revenues raised by leasing the purchased land through competitive bidding.^[4][5] All private property in land, including "agricultural land, forests, building sites, mines, water-power, and gravel pits" would become common property by purchases from the current owners.^[6] The land would be divided into reasonably sized sections that are each leased to the highest bidders at public auctions.^[6]

There are two episodes which influenced Gesell's beliefs on land. Gesell gravely denounced the landlord-dominated German legislature for its protective legislation in the late 1800s and early 1900s. The massive land speculation and severe impoverishment in Argentina also mirrored the situations that influenced Henry George.^[6] Gesell first used the word Freiland in 1904.^[7]

Henry George's ideas about land reform became known in the German speaking world through land reformers like Michael Flürscheim (1844-1912) and Adolf Damaschke (1865-1935).^[8] While Damaschke favored Georgist land reform, Flürscheim instead favored transferring land into public ownership by compensating former landowners and leasing the usufruct rights of land to the highest bidders.^[8]

Gesell rejected the nationalist and racially oriented blood and soil ideologies of his time.^[8] He supported freedom of movement and believed that the Earth belongs to all humans equally, regardless of birthplace, ethnicity, or religion.^[8]

According to economist Dirk Löhr [de], while demurrage currency has successfully worked on local scales in the past and present, there is an economic consensus that successful large-scale freigeld monetary reform will not be possible without freiland reform.^[9][10] The reason is that landowners would still retain unjustified rents due to the scarcity of land. If money can no longer be used as a long-term store of wealth, then most people would thus shift to storing their wealth within land instead.^[7][11] If land reform is unfeasible for any reason, then large scale freigeld reform will be unlikely to have its intended effects.^[5] In theory, Freiland compliments Freigeld since the demand for land, independently of its yield, increases the rate of interest.^[12][13]

Gesell's social philosophy is similar to the Manchester school.^[6] While the free trade policies of the Manchester school would enable agricultural lands across the world to be used more efficiently, Gesell believed that nationalizing land is necessary in order to fully maximize efficiency and eliminate unearned income.^[6] i.

i.

Freiland would achieve many of the intended effects of Georgism, but there are many important differences regarding their implementation and effects.

Freiland would compensate previous landowners through bond payments, whereas Georgism does not compensate landowners at all.^[14][15] Gesell believed that landowners should be compensated, rather than expropriated, since most of them acquired their land by purchasing it.^[16] Since demurrage money would theoretically eliminate risk-free interest, significantly less interest would be required to pay back the land bonds.^[16] The interest rate for the land bonds would be equal to the rate that the land was capitalized at.^[6]

Some challenges to establishing Freiland include: the establishment of free trade, designing auctions that are suitable to all farmers (whether for a family or for an anarchic commune), and compensating prior landowners with state bonds.^[17]

Gesell proposed that the land bonds and leasings under Freiland would be implemented under local governments, whereas the land value taxes of Georgism could be collected on a local or national level.^{[citation needed]}

Both systems would likely require gradual transitions before all land becomes publicly owned. Freiland would completely abolish private land ownership outright, since the government would gain complete ownership of the land after buying it through land bonds. By contrast, Georgism would have a more gradual transition for phasing out land ownership until 100% of the value of land is de facto owned by the government.^{[citation needed]}

Under the current land property system, it may be faster to transition to the Freiland system compared to Georgism, since it would transfer ownership of all land to the government overnight via compulsory person purchase. While landowners would have to be compensated, the government would be able to start leasing all land at 100% of its value through the comparative leasing system, which means that land would be leased from the government at 100% of its value immediately, which would greatly increase the amount of revenue that the government can get from leasing land out of private entities. For a while, this revenue would go towards paying back the land bonds to compensate the previous landowners, but the immediate the ability to immediately lease land at 100% value with share a ton of revenue, which could be used for other things, especially if the bomb payments are extended by say 30 years ago or something. In fact, it may even be better to extend the bond payments out to 30 years instead of 20 years, because if the previous landowners die, then they would no longer have to be compensated, since that is the legal law for how most lending and bonds work.

Since Freiwirtschaft would require completely ending private land ownership, the value of improvements to land would have to be completely separated from the value of the land itself, when the amount of bond payments for purchasing the land from existing landowners is decided. This could make legal matters pertaining to the ownership of improvements to land more complicated, in comparison to Georgism.

Under Freiland, it would not be necessary to repeatedly re-appraise the value of land.^[5] Land would only have to be appraised when the government decides how much land is worth for acquiring via eminent domain.

Freiland would use a competitive auction system for determining who gets to occupy land parcels,^[17] which is arguably less vulnerable to corruption and bureaucracy.^[18] It may be more similar to a free-market system.^[5]

Land value taxation might be easier regarding the implementation. Property taxes could be gradually replaced by land value taxes. By contrast, the consequences of the land bonds system may be less uncertain since it is never been tried before on such a massive scale.

The Georgism system may provide land possessors greater incentives to take good care of the land, compared to the Freiland land leasing system.^{[citation needed]}

It is debatable which one would be easier for gaining public support. Georgism is arguably easier to implement, and Georgism would appeal more to people who do not already own land. By contrast, Freiland might be more popular among current landowners and homeowners, since 100% of the value of all their land holdings would be compensated through bond payments. Freiland may thus have stronger appeal in areas and countries that have higher homeownership rates.

Under both systems, people who have the right to occupy land also have usufruct rights.^[19] Under both systems, it is possible to eventually abolish all taxes, until the only taxes paid are through land value taxes or land lease payments.

After all government expenditures are paid, Gesell favored redistributing the excess rents to mothers based on the number of children that they each care for under the age of majority.^[20] Gesell reasoned that mothers should be paid in proportion to the number of children that they have because the amount of rental revenue that the state collects depends on population density, which depends on birthrates.^[8] Gesell believed that all mothers should be released from economic dependence upon working fathers.^[8]

Silvio Gesell did not read Henry George's works or ideas in the original English language text. Gesell only knew George second-hand, which might be one of the reasons why Gesell spoke poorly about George. [NAME] has suggested that Gesell's criticisms of George may have been due to language barriers, rather than conceptual differences.

Georgism is more well-known in the Anglosphere, whereas Freiland is more well known in the German-speaking and Spanish-speaking worlds. There are major language barriers between the general familiarity of the two economic theories.

Theodor Hertzka wrote an 1896 novel describing a utopia in the at-time German colony of Kenya.^{[citation needed]} Hertzka also referred to his vision as "Freiland", but it should be confused with the economic proposal by Silvio Gesell. Hertza's Freiland refers to an economic proposal through a fictitious narrative, which never came to fruition in the real world. The similarities between the two ideas are that they were both influenced by Georgism and both oppose private ownership of land.

Look up freiland in Wiktionary, the free dictionary.

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• Full text of The Natural Economic Order