The cycle of life and the blessing of transience

Executive Summary

Transience is not a flaw, but the most fundamental law of nature in the universe. From subatomic particles to biological organisms and galaxies: everything goes through a life cycle of becoming and passing away. This insight, although recognized in the natural sciences for centuries, has not yet found its way into the prevailing economic theory. As a result, the debt money system attempts to circumvent the law of nature - and thereby enforces unwanted, violent forms of transience in the form of economic crises, wars, poverty and environmental destruction. The Gradido model of the Natural Economy of Life breaks with this pattern by consciously planning for impermanence: 50% of the account balance passes per year. This figure is not arbitrarily chosen, but results from the equilibrium of a self-regulating system that structurally enables stable money supplies, basic incomes with strong purchasing power and the world's largest environmental fund.

I. The universal law of nature: the cycle of growth and decay

1.1 From the atom to the galaxy

The cycle of life is omnipresent and scales across all orders of magnitude of the universe. In the subatomic realm, particles and antiparticles are created in pairs, annihilate and become energy - a perpetual cycle at the smallest level of matter. Stars are born from huge clouds of gas and dust, pass through their stable phase over millions to billions of years, in which they fuse hydrogen into helium, and finally die - as red giants, white dwarfs, neutron stars or black holes. The material ejected into space becomes the raw material for new stars and planets. Our own Earth, and the atoms in every human body, are made from the recycled dust of long-dead stars.

Galaxies themselves are also subject to this principle: as Heidelberg astrophysicists report in the journal Nature young stars heat up molecular clouds, propel hot gas bubbles through galaxies and finally dissolve them, producing new material for the next generation of stars.

1.2 The second law of thermodynamics: the physical basis

There is a profound physical principle behind the cycle of life: the second law of thermodynamics, also known as the „entropy law“. It describes the fundamental irreversibility of natural processes. In its classic formulation by Rudolf Clausius (1865), it states that the entropy of a closed system never decreases. In other words: no process in nature runs backwards without a trace. Heat always flows by itself from the warmer to the colder, never the other way around. This irreversibility is the physical foundation of becoming and passing away - even the laws of physics know no standstill, no eternal accumulation without loss.

The decisive factor: In open In living systems - and all living things are open systems that constantly absorb and release energy - the flow of energy creates local order, while at the same time disorder is released into the environment. Living systems are therefore islands of temporary order in a stream of change. They only exist because they are constantly part of a cycle.

1.3 Biological cycles: the ecosystem as the master of recycling

In biology, the cycle principle manifests itself as a material and energy cycle. In every ecosystem, producers (plants) absorb inorganic substances and solar energy and build up organic matter. Consumers eat plants, are themselves eaten, die. Destructors decompose dead organisms and return the nutrients to the cycle. Not an ounce of matter leaves this cycle; what dies becomes food for the new. The forest is also a living example: trees do not accumulate energy, they pass it on. Breathing air is not hoarded - it circulates.

The life cycle of individual organisms - from germination to growth, maturity and death - mirrors the same pattern on a small scale. From human life to the annual cycles of plants: The duration of life cycles varies, the pattern remains universal.

1.4 The cycle principle as a law of nature

When a pattern occurs from the smallest subatomic level to the cosmic scale of galaxies, it is a fundamental law of nature. The Gradido Academy for Economic Bionics describes this aptly: „The most important law of nature for us is the cycle of life, the cycle of becoming and passing away.“ What can be found everywhere in the physical world - whether directly visible or measurable with instruments - differs only in the duration of life cycles, not in the fundamental structure. It is a law of nature that constantly brings forth new life and enables constant renewal.

The conclusion is compelling: in a limited space - such as the earth - eternal growth is only possible because what passes away frees up space and resources for something new. Transience is not the enemy of life, but its prerequisite.

II The fatal exception: the economy and the denial of transience

2.1 The debt money system and its structural flaws

Surprisingly, the most fundamental law of nature in the universe has not found its way into the prevailing economic theory. On the contrary: the existing financial system is based on three principles that directly contradict the cycle of life:

Error 1 - Money creation through debt: Over 95% of the world's money is created through lending. Every credit balance on one account corresponds to an equal debt on another. Money is structurally scarce - a zero-sum game.

Error 2 - Interest and compound interest: Interest causes a continuous redistribution from debtors to money owners. The gap between wealth and poverty does not widen due to individual wickedness, but due to mathematical regularity.

Error 3 - Disregarding the cycle: Money does not rust, spoil or perish - unlike goods, human labor and all other goods. Silvio Gesell already formulated this at the beginning of the 20th century: since money, unlike goods, neither „rusts“ nor „spoils“, a money owner can hold back his money without disadvantage. This creates a structural superiority of the money owner over every seller, which disrupts the free interplay of forces.

2.2 Involuntary transience: crises, wars, poverty, environmental destruction

The natural law of becoming and passing away cannot be permanently suppressed. If you try to circumvent it, it will assert itself violently by other means. This is not a metaphor, but historically verifiable:

Economic crises as enforced transience: The stock market crash of 1929 and the subsequent global economic crisis led to a massive slump in industrial production, deflation, bank collapses and mass unemployment. The financial crisis of 2007/2008, triggered by uncontrolled debt accumulation in the US real estate sector, hit the entire global economy and led to the destruction of trillions in assets - a violent correction of accumulated imbalances. These crashes are not coincidences, but systemic discharges of the built-up tensions.

War as the most extreme form of enforced transience: The debt-based zero-sum game structurally creates a competition in which one person's gain is another's loss. Resource wars arise from structural scarcity: what I don't have, someone else has. It is well documented in military history that wars often arise from economic constraints - President Eisenhower warned of the military-industrial complex as a permanent threat as early as 1961. Wars are the most extreme form of involuntary transience: they destroy what the system did not want to let pass voluntarily.

Poverty and hunger as structural transience: The gap between rich and poor is widening continuously despite enormous technological progress. The debt money system systematically transfers wealth from the poorer to the richer through interest and compound interest. This is not a market failure, but the programmed result of the wrong rules of the game.

Environmental destruction as enforced transience: The growth imperative of the debt money system forces companies and economies to grow constantly - the debts grow too. The result is the systematic overexploitation of natural resources. In 1972, the Club of Rome stated unequivocally in its groundbreaking report „The Limits to Growth“: „Infinite growth is not possible on a finite planet.“ Economic growth at the expense of the environment inevitably comes up against limits. The destruction of nature is another form of involuntary transience - uncontrolled, socially unfairly distributed and irreversible.

The Gradido Academy puts it in a nutshell: „Disregarding the cycle of becoming and passing away makes us experience this natural law involuntarily. Unintentional forms of transience are financial crises, crashes, inflation, wars, environmental destruction and other disasters.“

III Historical precursors: Silvio Gesell and the Wörgl experiment

3.1 Silvio Gesell and the free economy

The German-Argentine merchant and social economist Silvio Gesell (1862-1930) was one of the first to recognize that the fundamental problem with the monetary system is that money does not go bad. His main work The natural economic order through free land and free money (1916) called for monetary reform: money - like goods and human labor - should be subject to a loss of value. He called this principle „circulation protection“: money that is hoarded loses value; money that circulates retains its value. Through this mechanism, money should lose its structural market advantage over goods and bring about full employment, falling interest rates and price stability.

John Maynard Keynes said in his main work The General Theory of Employment, Interest and Money very favorably about Gesell's theories - a sign that the idea also found resonance in academic economics without gaining lasting acceptance.

3.2 The miracle of Wörgl (1932/33)

Gesell's theory became reality in 1932 in the Austrian municipality of Wörgl under Mayor Michael Unterguggenberger. The initial situation was dramatic: 400 of the 4,200 inhabitants were unemployed, the community coffers were empty and pending infrastructure projects were at a standstill.

On July 8, 1932, the municipal council unanimously decided to issue so-called „work vouchers“ - a shrinkage allowance with a built-in monthly loss in value of one percent. The special feature: Anyone who kept the bill had to buy an adhesive stamp worth one percent of the face value every month and stick it on to keep the bill valid. This punished the hoarding of money and encouraged its circulation.

The results were astounding: while unemployment rose by around 20 percent throughout Austria between 1932 and 1933, it fell noticeably in Wörgl. The municipality renovated roads, built a ski jump and a new water supply system. The international press reported euphorically about a „flourishing town in crisis-stricken Austria“. Over 200 other Austrian municipalities wanted to emulate the experiment.

In September 1933, the Austrian National Bank had the experiment stopped by the courts - it saw the banknote monopoly under threat. The Wörgl experiment was ended before it could show its full effect. To this day, it is regarded as one of the clearest historical proofs that backed money works in practice.

3.3 Gradido and free enterprise: similarities and differences

The Gradido model emerged independently of Gesell's ideas and the Wörgl experiment. It shows similarities, but goes beyond them in many respects:

The fundamental difference: while the free economy is primarily about Circulation speed of money, Gradido integrates transitoriness as a self-regulating mechanism into a comprehensive, threefold money creation system.

IV. The gradido model: transience as conscious design

4.1 The threefold creation of money

In the Gradido model, money is not created through debt, but as credit - for everyone. A total of 3,000 gradido (GDD) is generated per person per month:

• 1,000 GDD as Active basic income - Everyone has the right to contribute 50 hours per month to the community at 20 GDD/hour (sick and elderly people receive it unconditionally)

• 1,000 GDD for the public budget including health and social services - in Germany this corresponds to the previous public budget of the federal, state and local governments

• 1,000 GDD for the Compensation and Environment Fund (AUF) - for the restoration and preservation of nature and the environment, the largest environmental pot in the history of mankind

This system makes taxes and other compulsory levies superfluous. Money is created out of life - not out of debt.

4.2 The necessity of transience: the self-regulating system

If new money is constantly being created, it must also disappear again, otherwise the money supply would continue to grow and lead to inflation. The gradido model thus follows the circular flow principle: if and Passing, not just becoming.

The planned perishability at Gradido is 50% per year, which corresponds to a monthly perishability of 5.61%. Similar to a negative interest rate, the perpetuity is calculated continuously to the second.

4.3 The balance of the money supply: Why ~54,000-60,000 GDD per capita

The system automatically settles on the value at which monthly money creation and monthly perishability are in equilibrium. With a monthly perishability of approx. 5.61% and a monthly creation of 3,000 GDD, this results in an equilibrium value of just under 54,000 GDD per capita.

This per capita money supply roughly corresponds to the money supply in euros in Central Europe in 2007 - in other words, at a time before the major financial crisis when the rich industrialized nations enjoyed widespread, stable prosperity. The price level in Gradido should therefore roughly correspond to the 2007 level. The money supply cannot be manipulated and no financial bubbles can form.

4.4 Why exactly 50%? The mathematical necessity

The question of why transience cannot be made variable or changed by majority vote can be answered mathematically and systemically:

Argument 1 - Simplicity and comprehensibility: Half a year is an intuitively understandable benchmark that can be calculated in your head. This simplicity has a high value for the acceptance and verifiability of the system.

Argument 2 - Stability of the money supply: If transience were only half as great (i.e. 25% per year), the money supply would double in a self-regulating system. A money supply twice as large would lead to a doubling of prices in the medium term. In order to maintain purchasing power, all three money creation paths would then also have to be doubled - which would double the money supply again. This would not be a feedback loop to stability, but a feedback loop to permanent expansion.

Argument 3 - Self-regulation instead of feedback: With 50% perishability, the system is self-regulating: the creation of 3,000 GDD per month corresponds exactly to the perishability of a per capita money supply of ~54,000 GDD. No external control, no central bank, no committee is necessary to keep the money supply stable - the system regulates itself, analogous to natural ecosystems.

Argument 4 - The 2007 prosperity level as a reference: The Gradido Academy deliberately focuses on the level of prosperity that was widely achievable in the industrialized nations before the 2007/2008 financial crisis and declares this to be the global benchmark for a decent standard of living. The chosen figures - 3 × 1,000 GDD and 50% transience - result in that price and money supply level.

Argument 5 - Appropriateness of perception: A perishability of 5.61% per month - i.e. a good twentieth of the account balance each month - is still easy to argue for and can be felt in practice without being perceived as punitive. It is well below the current taxes and compulsory contributions and provides an incentive to use money wisely without creating pressure.

V. The blessing of transience: systemic effects

5.1 Transience prevents concentration of power

In today's system, very small proportions of the population accumulate huge financial assets that are withdrawn from the productive cycle. Those who hoard money live in constant fear of losing it; those who use it, share it, invest it or give it away return it to the cycle - and thus make everyone richer. Transience makes money structurally what it should be: a medium of exchange and store of value in the service of mankind, not an instrument of undemocratic concentration of power.

5.2 Transience makes interest superfluous

In the Gradido system, loans are interest-free because both parties benefit from the perishable nature of the loan: The lender can preserve its value by lending the money instead of letting it rot - he gets the same amount back at an agreed time. The borrower receives an interest-free loan. Saving is structurally the same as lending interest-free. Transience thus creates the incentive to lend that Gesell sought to create through the circulation guarantee - but in a much more mature system framework.

5.3 Transience as a driver for quality instead of quantity

An unpleasant by-product of the pressure to grow in the debt money system is the „cheap culture“: as interest requires constant debt servicing, products are manufactured as cheaply as possible in order to secure market share. In the gradido system, this pressure is eliminated. Due to its transience, people have an incentive to use money sensibly and in a quality-conscious manner instead of hoarding it. There is less demand for the cheap junk that is currently the norm. This favors durable, high-quality products - which in turn reduces the consumption of resources.

5.4 The compensation and environmental fund: transience as nature conservation

The third money creation - 1,000 GDD per capita per month for the compensation and environmental fund - is historically unprecedented in its scope. It finances the restoration and preservation of nature and the environment, subsidizes high-quality biological products and services so that environmentally harmful products are no longer competitive. Forest protection, marine restoration and reforestation become paid activities. The standing tree, worth less than the felled tree in today's system, acquires its natural economic value in the Gradido system. The transience of money thus enables the permanence of natural foundations of life.

VI Classification in the scientific and economic policy discourse

6.1 Club of Rome and the limits to growth

The 1972 Club of Rome report „The Limits to Growth“ by Dennis and Donella Meadows formulated one of the most important economic warnings of the 20th century: climate change and resource scarcity are symptoms of a deeper problem - namely the belief in infinite growth on a finite planet. This paradigm is formative: economic growth at the expense of the environment is reaching its limits; economic prosperity is only possible in the long term if it is combined with ecological sustainability. The Gradido model draws the conclusion from this: not less prosperity, but a different monetary system that enables prosperity without the need for growth.

6.2 Degrowth and post-growth: correct diagnosis, incomplete solution

The degrowth and post-growth movement shares the diagnosis that constant quantitative growth is ecologically unsustainable and calls for a different way of doing business. However, it comes up against political and social limits because it combines shrinkage with social suffering in the existing debt-based system: In a debt-based system, economic contraction immediately generates unemployment and social hardship because work or productivity is the only means of securing a livelihood. The Gradido model solves this dilemma: companies can shrink healthily without triggering social catastrophes because the Active Basic Income is structurally secured.

6.3 Economic bionics as a methodological framework

The Gradido Academy justifies its approach methodically as Economic Bionics - the transfer of biological laws of success to the economic system. Bionics - the scientific discipline that transfers the ingenious inventions of nature to other areas - has produced numerous technical innovations. The Gradido Academy applies the same principle to money: Nature has been working successfully for four and a half billion years. Its recipe for success is the cycle of life - and it is precisely this cycle that is to be transferred to the economic system.

VII Critical appraisal and open questions

7.1 Strengths of the approach

The Gradido model has several impressive features:

• Systemic consistency: The numbers (3 × 1,000 GDD, 50% transience) are not arbitrary, but result mathematically from the equilibrium of a self-regulating system.

• General comprehensibility: Halving the account balance each year is intuitively understandable and can be calculated in your head.

• Historical forerunners: The Wörgl experiment provides empirical proof that in practice, money backed by a circulation guarantee does indeed have an economic stimulating effect.

• Triple well-being as system architecture: The anchoring of the individual, community and nature in the money creation structure itself is an original approach that translates moral appeals into systemic incentives.

7.2 Outstanding issues and challenges

No honest consideration should conceal critical aspects:

• Transition design: How exactly will existing financial assets be transferred to Gradido without generating massive losses for savers? The Gradido Academy has developed models that describe a longer-term preservation of value, but the transition phase remains a complex political and technical problem.

• Currency competition: In a multi-currency world, exchange rate stability is crucial. How does Gradido perform against other currencies and global financial flows?

• Acceptance and trust: Every monetary system thrives on collective trust. Building this trust in Gradido requires time, education and practical experience on a small scale.

• Empirical validation on a large scale: The Wörgl experiment was small and short-lived. More comprehensive historical or contemporary evidence for a system of this complexity is still lacking.

VIII Conclusions: Understanding transience as a blessing

The cycle of life is the most universal of all natural laws. From quarks to galaxies, from seasons to stellar cycles - everywhere nature shows that decay is not loss, but a prerequisite for renewal. No ecosystem on earth has ever attempted to accumulate energy or substances permanently - and those that produce flourishing diversity in a limited space do so precisely through permanent cycling.

The prevailing economic theory has so far ignored this law of nature and is paying the price in the form of periodic devastation: Crashes, wars, poverty, environmental degradation. These are not unfortunate coincidences, but structural consequences of the attempt to avoid transience.

The Gradido model of the Natural Economy of Life turns transience into an ally: 50% of the account balance passes per year, but 3,000 GDD per month are newly created - for each person, debt-free, as a credit balance. The result is a self-regulating system with a stable money supply that structurally enables prosperity for all at the level of prosperous industrialized nations, without growth pressure, without tax burden, with the world's largest environmental fund.

Transience is not a punitive mechanism - it is the law of nature that turns money back into a means of flow rather than an instrument of undemocratic power. What flows sustains life. What stagnates rots. Nature has been proving this for four and a half billion years. It is time to apply this insight to the economy as well.

Sources and further reading

• Gradido Academy for Business Bionics: Natural economy of life (ebook), gradido.net

• Gradido FAQ: gradido.net/en/faq

• Gradido - Economy of love: gradido.net/en/gradido-wirtschaft-der-liebe

• Silvio Gesell: The natural economic order through free land and free money, 1916

• Wikipedia: Wörgler Schwundgeld; Free economy; Silvio Gesell

• Unterguggenberger Institut: Free money - historical

• FairConomy.org: The miracle of Wörgl

• Chiemgau regional money: The miracle of Wörgl

• Vienna University of Economics and Business: Constructive disobedience - the Wörgl money experiment

• Deutschlandfunk: The Limits to Growth (1972)

• ifo Institute: Economic growth and ecological sustainability

• Zeiss-Planetarium Jena: The life cycle of stars

• Deutschlandfunk: Cycle of the elements

• Heidelberg University: Galaxies as cosmic cooking pots

• World of physics: Entropy

• Wikipedia: Second law of thermodynamics

• Gradido: Financial System / Fatal mistakes

• Gradido: Economic bionics