The year is 1931 and a man called Michael Unterguggenberger has just been elected mayor of a small Austrian town named Wörgl. The events of the coming two years will create a story of vision, courage, and one of the most ugly, most pertinent examples of industries that would prefer to suffer than change. Due to that starkness, this story may well have been missing from your history class, even if you studied economics. However, this story is one of my favourite examples of how purpose, focus, and velocity, can produce the most miraculous results. Let us begin.
Born into a Tyrolean peasant family and having apprenticed himself to a master mechanic, Michael built a modest career whilst striving for social justice. His hometown, Wörgl, had grown rapidly in the early 1900s but was affected significantly by the financial crash of 1929. At the time, Michael was town councillor and eventually mayor two years later. Despite the numerous projects to re-build the town, the depression had driven a population of 4500 to include 1500 without a job and 200 families penniless.
Michael studied a book called “The Natural Order” by Silvio Gesell and theorised that the faltering economy was principally caused by the slow circulation of money. Money that increasingly moved from working people into the banks, without being re-circulated back into the market. His plan was to replace the common currency with “Certified Compensation Bills” that the public would be given to be used at their face value (1, 5 and 10 shillings). 32,000 such bills were printed and circulated.
Wörgl bills were designed to depreciate 1% of their nominal value monthly and the owner had to buy and place a stamp on the bill on the last day of the month, showing the devalued amount. Obviously as nobody wanted to essentially pay a premium (by losing value), bills were spent as fast as possible.
On the back of the bills this was printed:
“To all whom it may concern! Sluggishly circulating money has provoked an unprecedented trade depression and plunged millions into utter misery. Economically considered, the destruction of the world has started. – It is time, through determined and intelligent action, to endeavour to arrest the downward plunge of the trade machine and thereby to save mankind from fratricidal wars, chaos, and dissolution. Human beings live by exchanging their services. Sluggish circulation has largely stopped this exchange and thrown millions of willing workers out of employment. – We must therefore revive this exchange of services and by its means bring the unemployed back to the ranks of the producers. Such is the object of the labour certificate issued by the market town of Wörgl: it softens suffering’s dread; it offers work and bread.”
What a statement.
During the 13 months following, Michael initiated all the intended projects: new houses, a new bridge, even a ski jump. Six neighbouring villages copied the system to great effect and the French Prime Minister at the time, Edouard Daladier, made a special visit to see the “miracle of Wörgl”.
Spin forward to January 1933 and Michael addressed a meeting with representatives from 170 towns and villages, all interested in adopting the concept.
The public was happy, employment was high, and poverty was virtually non-existent. People paid their taxes in advance enthusiastically and price increases (the first sign of inflation) didn’t occur.
However, the Central Bank started to freak out due to its lack of control over the situation and decided to assert its monopoly rights by banning complementary currencies. Following a court case where the Austrian Supreme Court upheld the ban, it became a criminal offence to issue “emergency currency”.
Wörgl quickly returned to 30% unemployment and social unrest spread like wildfire across Austria. Michael died in 1936 having watched his life’s mission come into being, succeed brilliantly, then be stripped apart.
Two years later a chap called Hitler entered the scene and many people welcomed him as their economic and political saviour.
The rest, as they say, is history.
The thing that moves me about the story of Michael and Wörgl is the implementation of a vision into real life. There are so many good ideas around, so many interesting things that could be done, and so many idealists, but very few executors. To me it doesn’t matter so much that the concept was ultimately outlawed (although it saddens me that many great concepts are killed at birth), the point is that it actually went to market.
I witness numerous people with new companies, new offerings, new concepts, all with kick-ass technology, fancy slogans, and cool haircuts but I rarely see robust go-to-market actions. It’s almost as if we are living in perpetual concept stage.
Don’t be fooled into thinking that Michael was only able to execute because he was mayor, in fact by 1912 he was elected representative for the union of Innsbruck Rail Engineers in the committee for personnel. He was seen as the person who represented the concerns of the workers against the capitalist interests of the railroad. His active campaigning at that time had a positive result for workers but yet a negative effect on his career progression because of it. His perseverance was due to the purpose that was in his heart. This was a guy who had found his path, focussed like hell, and applied his courage to move things forward.
I see a direct correlation between people who are following their heart and actual outcomes happening, versus people who are following only their head.
Maybe we should look within and ask, “Why am I really doing what I’m doing?” It is said that to truly know where your heart is, one must observe where our thoughts are when they wander… and I say that magical things can happen when we are properly playing from our heart. A blend of both is likely the best mix, but let’s take the head thinking as a given, it’s the heart piece I’m seeing mostly a lack of. But as Miles Davis said, “It takes a long time to play like yourself”.
Michael, along with using your head, you played it from the heart. I salute you.
Taken from 28 Thoughts – see ‘books‘ on the menu.