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The Swiss WIR, or: How to Defeat the Money Power

by on April 19, 2012

For eighty years a major not for profit, private currency has been operating in the heartland of Europe. In Zurich, almost next door to the Bank of International Settlements in Basel, there is the WIR, turning over the equivalent of almost 2 billion CHF per year.

By Anthony Migchels for Henry Makow and Real Currencies

WIR was founded by businessmen Werner Zimmerman and Paul Enz in 1934. It was a direct response to the Great Depression. They built on the legacy of Silvio Gesell, whose thinking also was the basis for the famous Wörgl Scrip and today’s German Regional Currencies, like the Chiemgauer.

Silvio Gesell is in fact the Patriarch of what I suggest should be called ‘German Economics’ or ‘Interest-Free Economics‘, the theoretical basis for the anti-usury movement. His analysis of Usury inspired both Gottfried Feder and Margrit Kennedy, two other leading lights of the European anti-usury movement. He also had interesting and much needed ideas about land reform.

Where the Wörgl and the Chiemgauer were/are backed by national (banking) currencies, the WIR goes where nobody before dared to go: it is basically Mutual Credit. Mutual Credit based currencies are nowadays used in Barter organizations world wide. Barter in this sense is a misnomer, they do use a means of exchange but not the national currency. WIR is undoubtedly one, if not the first Mutual Credit facility in the world and most certainly the longest surviving one.

Nowadays WIR turns over a little less than 2 billion WIR (1 WIR = 1 CHF) per year. Because many transactions involve maybe 25 to 50% in WIR while the rest is settled in CHF (Swiss Francs), real turn over generated by WIR is maybe up to three times higher. It has 1 billion of WIR in credit outstanding.

Transactions are settled with the use of debit cards or with their on-line banking system.

Werner Zimmerman and Silvio Gesell

Werner Zimmerman and Silvio Gesell

WIR is operated for the common good and not for profit. About 62,000 small and midsized businesses participate. There are six regional offices through the Swiss republic.

WIR is especially important during downturns. Deflation and capital scarcity make businesses more creative and more willing to deal with WIR’s limitations.

For our purposes WIR is important because it proves that Mutual Credit facilities have a viable business model. It proves currency can be offered at very low cost while maintaining a prosperous and professional organization over the long term.

Notwithstanding its major achievements, WIR suffers from some significant limitations.

In the first place it is not convertible to other units. This is a common problem with Mutual Credit based currencies. Until recently, the technology was not available. Amazingly, many people are so used to this situation that they do not even consider it a problem. They will claim that non-convertibility is actually a strength, as it forces participants to shop within the network. However, this is a mistake. Non-convertibility damages the liquidity (what it will buy) of the currency and liquidity is everything. As a result, many businesses accept only certain percentages in WIR. This hampers liquidity even further.

Another problem is that consumers are not serviced. Only businesses can participate. This again badly damages liquidity: businesses cannot pay their employees in WIR, for instance.

Just think of what is possible for modern units leaving these limitations behind them.

Money Power Subversion
Obviously, WIR is very important opposition against the Money Power. The Money Power can be expected to keep a keen eye on it and there are serious indications it has been resisting WIR actively.

There is a persistent rumor suggesting the Banks have told WIR that things are fine as they are, but that they should not vie for further growth. This may explain why they have not developed a comprehensive strategy for consumer participation.

Also, in the 1950’s WIR started to price its credit with interest. Even today interest rates are very low, with 1% rates for mortgages, for instance, but still. Interest is an affront to Gesell’s ideas. It hinders circulation, which was one thing very much on Gesell’s mind. The price for credit, even at 1%, is somewhat high for collateralized (and thus risk free) long term loans.  It also lessens the power of the message: that interest free credit is not only possible but a fact.

The last few years WIR has been starting to focus on more traditional banking activities, including ordinary loans in CHF.

This has led Thomas Greco, a leading expert on Mutual Credit, to state that the Banking Cartel has probably found a way of getting its henchmen on WIR’s board of directors.

WIR is a leading example for the entire world. It has proven that interest free mutual credit can be offered on a large scale. Its superior management was a key factor to its success: it was not a couple of dreamers that built it, but down to earth businessmen understanding the issues and the solution.

It is not convertible and it has no comprehensive strategy to compete outright on a full scale with the Banking Cartel and yet it turns over billions per year. These limitations can nowadays be solved. Convertibility for Mutual Credit is now possible. A comprehensive strategy including consumers not difficult to devise.

In this way the Money Power monopoly on currency can be assaulted. Regulators, inimical as they may be to these schemes, are left empty handed: there are no laws against Mutual Credit and they are very difficult to develop, especially against determined market players who understand what they are up against.

Even though today WIR seems to have been subverted, it took the Money Power eighty years. It is fully possible for just a few thousand ambitious people world wide to open up their own initiatives and the Money Power could easily become overwhelmed.

It goes directly at the heart of the matter: the Money Power’s control over the money supply and extortion through usury and the boom/bust cycle. In this day and age of deflation and stagflation, additional working capital is desperately needed by small and mid sized firms. Now, more than ever, are they willing to take a chance when they are offered a real alternative.

The German Regional Currency Movement shows that it can be done even today. In Britain, too, many regional currencies are now starting, most recently in Bristol. This unit is not even circulating yet, but already 100 small businesses have signed up. They desperately need additional cash and new customers and Regional Currencies supply both.

It is no use to wait until the Government cleans up its act. It never will. It is completely controlled by the enemy. Private initiative is the only hope we have. In fact, let’s face it: why would children of the One expect to have their lives be run by sugardaddies like Government? Private initiative is all there is.

Private currencies, competing with the Money Power in the market place are the way forward.

The world was conquered by a few ambitious men serving the Adversary.

It is now time for it to be liberated by a few ambitious men serving the One.

“THERE IS NOTHING MORE DANGEROUS THAN PERSONAL INITIATIVE: if it has genius behind it, such initiative can do more than can be done by millions of people among whom we have sown discord.”
Protocol No.5

Regional Currencies in Germany: the Chiemgauer
Mutual Credit, the Astonishingly Simple Truth about Money Creation
Mutual Credit for the 21st century: Convertibility
Financial Warfare 2012: Boycott All Banks
Interest-Free Economics

More on WIR:
WIR Bank-Genossenschaft
P2P Foundation on WIR

  1. Chris permalink

    PLEASE !!!!!!!!!!!! Not another article praising this stupid fool Silvio Gesell.
    Are you aware, that he wanted not only ZERO interest, which by itself means taking all incentive away from the savers. No, he even wanted a fast depreciating currency.
    This means, depending on one’s income and the pace of depreciation, that one can NEVER surpass a certain amount.
    For example, if a worker earns 2000 EUR per month, and the monthly depreciating rate is 10%, one can NEVER save more than 20000 EUR, and it will be very hard to approach even this level.

    Why would anyone lend their money to the bank or to someone else, if he gets nothing in return, but is only screwed?

    If WIR is coupled to CHF… this means it realls is CHF !!!! AND NOTHING ELSE.
    Back in 1998, when the european currencies FX rates were locked, the national currencies already became EUROS, even if the real EURO banknotes only came in 2002.

    • Chris, my friend, you are obviously a newbie to Interest-Free Economics. The normal attitude would be just to ask some questions, instead of assuming everybody is crazy.

      Gesell does not want you to save. He wants you to not hoard the means of exchange, but buy real assets. Gold is probably cool for you. Hoard anything, NOT the means of exchange. Money is to exchange goods. To exchange is to circulate. To hoard is not to circulate. Ergo: money is not a good store of value. That’s why Gesell destroyed the store of value function of money. And that’s exactly why his money was so successful, for instance at Wörgl.

      WIR is coupled to CHF, but it is a completely independent unit, created by credit. It is has nothing to with CHF, other than that it uses its accounting function. But it’s a completely independent means of exchange.

      Nobody wants you to lend your money in Interest-Free Economics. Nobody wants it, because they get interest-free credit based money from a Mutual Credit facility.

      • Alan permalink

        “It also lessens the power of the message: that interest free credit is not only possible but a fact.”

        Those doesn’t lessen the message, it undermines it completely.

    • WIR money is no longer depreciating.
      However, now that inflation is greater than interest in savings, we ALL have depreciating currency.
      I support Gesell’s ideas (very good for Wörgl!), as well as WIR Bank in it’s current form. It’s still going strong, with a beautiful building here in Basel, not too far incidentally from the Bank for International Settlements (BIS). It’s a blessing for many Swiss SMEs, as I suppose any local currency is for some of the locals. Others stumble over the fact that it is…well, LOCAL.
      (But not “loco”!)

  2. Reblogged this on dragon dreaming and commented:
    more examples of local exchange schemes, in Switserland this has been running since 1934, turnover of 2 billion francs!

  3. “The DHS is concerned that there will be a collapse of the U.S. dollar and the hyperinflation a
    collapse in the value of the world’s primary reserve currency implies to a nation of 311 million Americans — this year!
    Through his sources, Hagmann confirmed Rickards’ ongoing thesis of a fear of a U.S. dollar collapse at the hands of the Chinese (U.S. treasury bond holders of approximately $1 trillion) and, possibly, the Russians (threatening to launch a gold-backed ruble as an attractive alternative to the U.S. dollar) in retaliation for aggressive U.S. foreign policy initiatives against China’s and Russia’s strategic allies Iran and Syria.” (

    Can you please write an article outlining how the US could implement a local currency (or preserve the value of the USD locally) if this happens? It seems that if we’re all still working at the same jobs and producing the same goods locally, and if we continue to get the same salaries and vendors charge the same prices for US goods and services as they are currently, that there ought to be a way to still be able to provide food for our families — trading the same number of hours for food as we are currently. If this happens, we would probably also want to keep (by law) charging the same amounts in foreign currencies for US goods and services, or many US companies would preferentially sell to foreign countries due to their stronger currency (as the USD exchange rate becomes less favorable). Would the price that foreign countries charge the US for imported (to the US) goods and services tend to adjust downward, if the previously-mentioned items were in place?

  4. This is the best solution that I have heard yet, I had no idea that real models of this are currently in action. Very inspiring! You just gave me a whole new field to research, one that actually offers a real solution to the real problem of money and debt. This is what Occupy should be talking about, truly freeing ourselves from economic enslavement. The only question is how do we get started? I have so many questions. Does the WIR have actual notes? How could we form an interest free currency in a local community? Is there any legal boundaries? Would it be accepted by the State… Do we care?

    As you see I need to start doing some reading 🙂
    Thank you for being a beacon of light in what seems like a dark world.

    • WIR is proof that mutual credit is viable but largely due to pressure by conventional wisdom (as we know is not very wise) they were coerced into basing their mutual credit on deposits of conventional money that now, in order to maintain minimum reserves has resorted to was applying interest. At we eliminate any relevance of conventional “wisdom” by proving that scientifically that interest free mutual credit is not only stable it happens to be the only way to generate a stable currency.

  5. Reblogged this on Light Worker 29501 and commented:
    We need a non-usary currency like WIR, in the Americas. The US dollar is going away.


    For some comic relief, let me share one of my favorite sayings:

    “There is nothing more dangerous than an idiot with initiative”


    And when the world figures out that all the gratuitous suffering and humiliation it has suffered has been because some idiots thought it would be a good idea to confuse the notion of a scarce commodity with that of a unit of measure, then we will know the true meaning of ” there is nothing more dangerous than an idiot with initiative”.


  7. Talk about shooting yourself in the foot. The logo says it all – WIR Bank. You can’t use anything resembling the banking model to kill the bank. It should be called WIR Currency Issuance and Brokerage. Currency loans made as equally as possible to all members, checking account services, stock issuance and trade services. You can’t call a keeper of book entries a bank.

  8. The JAK Members Bank of Sweden is the best example of Interest Free Loans.The concept is practised mostly in Asia.
    The draw back is for people with no regular income. or live by their pay check,with no savings cannot afford to participate.Similar to the Co-op movement
    Only solution is publicly owned Central bank issuing Interest Free Loans

    • JAK is indeed also a viable model. The problem is is does not allow for interest free credit creation. It is based on savings in the national currency. Participants basically give each other interest free loans in the national currency. It’s viable, but limited.

      Like the article states, I don’t believe it’s worth while waiting for publicly owned Central Banks to happen. The Money Power is too much entrenched. We’ll have to take matters in our own hands.

      It’s doable.

    • mind you, I don’t resist JAK in any way. I’m just saying it won’t be enough.

      Same with reform at Govt level, we must continue pressing for it. But we cannot afford to wait to see it happen.

    • The problem with the JAK bank is that they can’t create their own money, to get that kind of charter for conventional currencies you need to charge interest :-((

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