The idea of constructing a monetary system without (positive) interest rates can be traced to the German-Argentine businessman Silvio Gesell and the French economist Maurice Allais. Gesell observed the booms and busts of the economy in which he was doing business and developed the idea that fluctuating currency circulation leads to oscillating economic activity. When money circulates faster, a boom or inflation sets in; when it slows down, then there is less turnover and investment. The results are economic crises and deflation. Gesell saw as a central cause the fact that one can withdraw money from economic circulation: physically in that it disappears under the proverbial pillow; or in a more modern sense it gets swallowed up by the speculative financial markets that have very little to do with the real economy. In both cases it is not directly available for the purchase of produced goods, which with time wear out, rust or rot, or in other words lose their value, whilst money initially holds its value. Instead of rewarding the possessors of money with high interest payments for their “sacrifice of non-consumption”, he proposed the opposite: that they should pay a fee for keeping their money out of circulation in the economy. The term ‘demurrage’ is still used in the shipping industry: when the agreed period of time for loading or unloading a freight ship is overrun, then ‘demurrage’ or ‘storage money’ is due. Gesell wanted to apply the same principle to cash. In order to avoid the “costs of money hoarding”, the owner of money would make his liquidity available, even at an interest rate of 0%. So the theory goes. Because this money would mostly be lent out interest-free, he called his money concept “Freigeld” (German for “free money”). While Gesell’s reform proposal is mostly unknown to outsiders and highly controversial among economists, in practice, there is increasing acknowledgement of its value. Central banks and commercial banks in several countries have added this financial instrument to their toolkit and have begun to charge negative interest or ‘asset fees’ on current accounts. They thus hope to avoid deflationary economic crises without fuelling inflationary risks through increasing the money supply. Up to now, the ‘free money’ idea has only been tried in local ’emergency currencies’ and ‘parallel currencies’. This was how the mayor of the small town of Wörgl in Tirol, Austria issued ‘work vouchers’, on which a monthly ‘hoarding fee’ was payable, during the international Great Depression in 1932. This system led the community out of the worst of the crisis until it was outlawed by the central bank a year later. In 1930s USA, hundreds of ’emergency currencies’ were emitted, some of them with exorbitant circulation fees. Many modern regional currencies, the best example being the ‘Chiemgauer’ in Bavaria, also charge a ‘hoarding fee’ in order to increase local money circulation and stimulate the local economy. This idea is also used in commercial circles: purchased credits with the online telephony provider Skype (TM) disappear if they are not used within a certain period. There is a similar model in the history of coins; ‘bracteates’ were thin metal coins that were valid in certain regions and were regularly recalled. During the compulsory exchange of old for new coins, a fee was charged, which was meant as a tax but also led to a different relationship to money. Instead of hoarding the coins, which would become worthless on a certain day, people preferred to pass the money on today rather than tomorrow thus perpetuating the circulation of currency. This principle can still be found today with vouchers, prepaid cards or companies offering time-limited accounts. Lufthansa airline’s customer loyalty program is designed so that ‘air miles’ normally disappear after 36 months if not used, in order to prevent, amongst other things, Lufthansa going bankrupt because of its loyalty program, which would happen with a successful loyalty scheme if for example all customers were to redeem their points at the same time.