Lessons from Wörgl: Key considerations for the continuation of an economic “miracle”

Abstract

The Wörgl Experiment that took place in the Austrian town of Wörgl has long been celebrated as an economic miracle as the town experienced a remarkable economic revival amidst the Great Depression that drew attention from around the world. Community currency (CC) advocates often tout the experiment as a prime example of the socio-economic impact that CCs can have at the local level. However, despite its success, the Wörgl Experiment was short lived due to being shut down by the Austrian Central Bank. Consequently, questions regarding its unfulfilled potential remain. This paper conducts a detailed analysis of the experiment and uncovers what would have been two key considerations for the experiment’s continued success. The first key consideration would have been the labor certificates convertibility with, and therefore their potential substitutability and competition with the Austrian Schilling. This reframes the current understanding of the Wörgl Experiment as the amount of labor certificates redeemed for Austrian Schillings and its implications have not been discussed in the literature. The second key consideration would have been maintaining demand for the labor certificates in the face of dwindling tax arrears. Implications of these considerations for the broader field of CCs are discussed.