The Comparative Literature Undergraduate Journal

A Premier Humanities Research Journal at the University of California, Berkeley

Critique of Pure Value: Silvio Gesell’s Monetary Theory Applied to Defoe’s Roxana

Parker Towle

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This essay is an investigation into the monetary system of Daniel Defoe’s Roxana and how it relates to value, through the lens of a little-known critic and monetary theorist, Silvio Gesell (1862-1930).  We take our current monetary system for granted, but Gesell asks us to imagine an entirely different one.  He proposes that money, too, should decrease in value over time, just like any other object or product that holds value, so that money is more “natural”.  Roxana provides this essay with a view into the monetary system of eighteenth-century England, which is surprisingly similar to our own.  Applying Gesell’s monetary theory shows that our interpretation of Roxana’s actions and motivations must be altered when we reconsider our notions of value.

Daniel Defoe’s 1724 novel Roxana offers an intriguing view into the monetary system of eighteenth-century England.  By reading Defoe’s novel, we can examine how (at that time) the idea of value was contained within gold and paper.  A number of critics have used a Marxist lens to interpret Defoe’s novels, but in order to offer a unique analysis, this paper will turn to the theory of a much lesser-known critic, Silvio Gesell (1862-1930).  Gesell’s most famous work (relatively obscure, compared to the works of Marx) was his book The Natural Economic Order (1916), in which he critiques the contemporary monetary system of capitalism and posits a new one.  Gesell’s goal at the time of writing was to create a new kind of money, “free money” (Freigeld), which would decrease in value over time, to replicate the same kind of spoilage that occurs with all other natural products.  Gesell argued that money should not hold the inherent advantage of eternal value over every other kind of good.  In Roxana, this advantage of money’s stable and increasing value is very much the case.  Once Roxana makes her fortune (through vice), she is able to live more than comfortably off of the interest of her estate and has no need to work.  Gesell would call this income “unearned income,” as it is only created by the alchemy of interest, not provided in exchange for any kind of value.  The eternal and reproductive value of money is a fantasy created by humankind, argues Gesell.  He writes, “Fantasies are cheap…. Fantasies have no place in the world of reality; they vanish into thin air…. Such is value” (31-32).  By applying Gesell’s theory to Defoe’s Roxana, it becomes clear that the monetary system in the novel is – to use Gesell’s terminology – quite “unnatural.”

Before discussing Roxana, a working understanding of Gesell’s somewhat obscure theory would be helpful.  In The Natural Economic Order, Gesell writes, “The abolition of unearned income, of so-called surplus-value, also called interest and economic rent, is the immediate economic aim of every socialistic movement” (3).  His “socialistic movement” is no different: Gesell wants to eradicate the practice of interest to create fair economic competition in society.  Marxists would argue that competition is inherently unfair, and that, therefore, social conditions must be changed to produce social equality.  Gesell is opposed to this idea.  He writes, “Levelling the proceeds of labor is an aim of Communism. Our aim, on the contrary, is the right to the whole proceeds of labor as apportioned by competition” (13).  Contrary to Marxists, Gesell argues that competition can be fair, but, given the contemporary monetary system, competition is decidedly unfair.  The solution, he says, is the elimination of the advantage of unearned income.  In a capitalist system, a person can earn money and then invest it, causing that money to multiply.  The returns on that investment, Gesell says, are unearned, and therefore interest gives those who have enough money to invest a distinct advantage over those who do not, those whose income must be solely “earned” (and then used to repay debt).

According to Gesell, once interest and economic rent are removed from the monetary system, competition will be fair.  He writes,

The general laws of competition determining the relative amounts of the individual proceeds of labor will remain in force. The most efficient worker will receive the highest proceeds of labor, to use as he pleases. – Today the proceeds of labor are curtailed by interest and rent which are not, of course, determined arbitrarily, but by the conditions of the market, everyone taking as much as the conditions of the market allow him. (14)

Gesell sees no problem with human self-interest being the motivation for economic development, as long as that self-interest leads to income that is earned.  The market conditions (namely the phenomena of interest and rent), not human behavior or social conditions, need to change.

For Gesell, interest springs from an imbalance of value between money and every other form of wares.  Money holds its value indefinitely.  Gold will always be gold, and paper money will always maintain its face value (during inflation, a bill’s relative value may drop, but its face value will always be upheld). Gesell provides a good example of this phenomenon:

The 180 million marks of demand stored at Spandeu (the French war-indemnity) has not entered the market once in 40 years, yet any expense caused the German government by this so-called war-chest has come from without, not from within the Julius Tower. The amount and quality of the gold has remained the same. Not a pfennig has been lost through loss of material. The soldier on guard protects the gold, not from moth and rust, but from thieves. He knows that as long as the locks remain intact no harm can come to the treasure piled within. (92)

Gold will always, quite literally, be “worth its weight in gold.”  Therefore, the possessor of gold (or other forms of money) is under no pressure to use that gold for its exchange value; the money at Spandeu from Gesell’s example may sit locked away infinitely, and when it is finally utilized it will be worth the same amount as when it went in (assuming the currency is still accepted, and not controlling for increased value through singularization, in the sense used by Kopytoff1).

Other wares, by contrast, do not enjoy the same stability of value that money does; the value of wares naturally diminishes over time.  Food rots, houses deteriorate, and technology becomes obsolete.  As Gesell writes, “The wares which compose supply decay, lose weight and quality, decrease continually in price in comparison with fresh wares” (93).  While money’s value remains constant, wares are gradually losing value.  Gesell adds, “Wares, again not alone deteriorate, they also become antiquated. Who would today [1916] buy a muzzle-loader or spinning wheel? Who would even pay the cost of the raw material of such wares” (93)?  Wares become less desirable over time because of their decreasing use value (once again, discounting singularization), but the demand for money remains consistent because of money’s enduring exchange value.

Over time, then, possessing money is more valuable than possessing wares; the money’s value will survive when the wares fall apart or become outdated.  Gesell recognizes the problem that this imbalance creates for those whose value is stored in wares as opposed to money: “The only way in which an owner of wares can protect himself against such losses is to sell them. He is compelled by the nature of his property to offer it for sale. If he resists this compulsion he is punished, and the punishment is carried out by his property, by the wares in his possession” (93).

The longer an owner of wares waits to sell, the less profit, for the wares inevitably become less and less valuable.  For example, the owner of an apple orchard owns the value of all of her apples.  She must sell her apples as quickly as possible because they are losing value as they age.  If she cannot sell her apples one week, they are less valuable the next week, until eventually they have rotted and are literally worthless.

If it is natural for wares to devalue over time, then money is distinctly unnatural, argues Gesell.  He argues that money should not enjoy the special privilege of being exempt from the natural course of devaluation.  Emphasizing the unnatural properties of money (gold, in this case), Gesell describes, “Gold neither rusts nor decays, neither breaks nor dies. Neither frost, heat, sun, rain nor fire can harm it. The holder of money made of gold need fear no loss arising from the material of his possession. Nor does its quality change. Gold which has lain buried for a thousand years remains unconsumed” (95).  Paper money is clearly more physically vulnerable than gold, but it has the same timeless value of gold.  As long as it is preserved adequately, it will retain its prescribed value, and the owner will not lose value (i.e. face value).

Thus the naturally decreasing value of wares is in sharp contrast to the value of money, and therefore the possessor of money also possesses a distinct advantage over the possessor of wares.  One advantage this provides the possessor of gold is the power of choice.  In Gesell’s words, “The possessor of money can therefore postpone his demand for wares; he can use his will. He must indeed sooner or later offer his gold for sale, for in itself it is useless to him. But he is free to choose the time at which he does so” (96).  There is no pressure on the possessor of money because it is just as valuable at some time in the future as it is at present.  The possessor of wares has no such power; the wares are constantly depreciating, so the more time before the owner of wares can sell, the less value the owner can receive from the sale.

Not only can the owner of money hold that money without a reduction in value; the owner may also invest that money to make more money: interest.  Gesell considers the interest gained by the investor unearned income because, after all, the possessor has not performed any labor or exchanged any wares to earn the interest.  Gesell’s criticisms of interest are central in his theory.  As economist Dudley Dillard writes, “The most important single phase of [Gesell’s] theory as a whole is his theory of interest. In its critical aspect this theory represents an attempt to show that, in a system of conventional money, interest income is a payment to prevent the hoarding of money” (348).  That is, Gesell’s theory states that interest is an incentive for possessors of money to invest their money, rather than hoard it, which would isolate it from circulation.  As shown earlier, owners of money are not pressured to exchange their money because their money will not devalue over time.  Therefore, interest provides a stimulus for owners of money to reenter their money into circulation.  When it is invested, money may be leant to those who need capital, and the investors are compensated with interest.  In essence, interest is a reward (unearned, for Gesell) for owners of money who decide not to hoard their money.

But Gesell fears this “interest as reward” phenomenon, for it makes money even more unnatural.  Not only can money maintain its value indefinitely, it can also multiply, a process that is nonexistent in any other kind of wares.2  This is money’s largest advantage over other wares: it has the ability to be invested, and therefore to create more of itself through interest.  Thus, in economic competition, those with value in money hold major advantages over those with value in wares: owners of money can both choose when to exchange their money, and invest their money to make more money without labor.  Followed to its conclusion, Gesell’s theory states that the gap between those with money and those without increases exponentially as interest accrues.  Gesell therefore identifies two major problems with the monetary system: money is an unnatural vessel of value because its value remains constant, and interest twists money even further into the realm of the unnatural by allowing investors to gain money as if by magic.  In the words of Dillard, “Gesell’s objective as a social reformer was to attack rentier capitalism and to substitute in its place an interest-free society” (348).  The specifics of Gesell’s proposed “natural” monetary system are not crucial for this essay, but, essentially, Gesell wanted to create “free money,” paper money that depreciated (about 5% annually, or approximately 0.1% per week (184)), to reflect the natural devaluation of wares.  In a free money system, money would be much less “hoard-able” because it declines in value over time, just like every other form of wares, and eventually interest rates would, theoretically, drop to zero.  Interest is the principal villain in Gesell’s portrait of society; his theory states that if interest could be eliminated (by using free money), then gradually competition would become fair by abolishing unearned income.

Daniel Defoe created the economic world of Roxana almost two hundred years prior to Gesell’s economic theory in The Natural Economic Order, but, despite the large time difference, Defoe and Gesell portray capitalist economies that are remarkably similar.  As Roxana discovers, interest plays a large role in the contemporary English economy (and the economies of several other European nations).  Once Roxana establishes a fair amount of wealth from her labor as a prostitute, she is able to multiply that wealth by gaining interest (to which she is introduced by real-life banker Sir Robert Clayton).  The process of interest performs several functions for Roxana.  Most obviously, it increases her wealth substantially, which feeds Roxana’s avarice; but interest also means Roxana no longer has to work for her income (though she often does anyway), and provides her with financial security, allowing her to prepare for a time when her income from prostitution will not be able to support her.

Yet Roxana did not always enjoy such immense wealth.  Later in the novel, she makes money by lending, but at the beginning of the novel, Roxana is a borrower.  When Roxana’s husband runs his business into the ground and squanders the family’s money, the “fool” leaves his family to seek his fortune elsewhere.  He leaves Roxana to support their five children and Amy, their maid.  Roxana has no earning power (and no training that would provide her with prospects for employment), and in addition to the money she needs to pay for food and other necessities for her family, she also needs money to pay the rent on her house.  At this point, Roxana experiences the borrowing side of interest.  Early in the novel she must contend with the very forces of interest and rent that she will so adore later, and faced with her impossible situation, there seems to be no way out.  As Gesell writes, “Money creates a proletariat, not because the burden of interest deprives the masses of their property, but because money forcibly prevents the masses from constructing property for themselves” (242).  Gesell sees a society composed of two classes: lenders and borrowers, separated by the “burden of interest.”  Lenders profit from interest, while borrowers are limited by it.  At this time in the novel, Roxana is a member of Gesell’s borrowing proletariat, so she is prevented from economic success (or from even economic survival) by her required, regular payments of rent.  As Gesell points out, money doesn’t mean the borrowing class will lose their property; it means that they will not be capable of owning any property as long as they are locked in the role of borrowing.

Roxana’s relationship to her landlord only changes when she discovers a new source of value: her body.  When she first realizes her poverty, Roxana finds other places for her children to be raised because she cannot afford to raise them herself.  Taking pity on her, Roxana’s landlord allows Roxana and Amy to continue living in the house for one year rent-free, but, as it turns out, rent will be charged in a different way.  After a spell of free rent, the landlord invites himself over for dinner; Roxana explains, “The sad condition which I was reduc’d to, had made him pity me, so my conduct in it, and the courage I bore it with, had given him a more than ordinary respect for me, and made him very thoughtful for my good; that he was resolv’d for the present to do something to relieve me” (26).  As Roxana and Amy converse after the landlord has left, Roxana denies that she would prostitute herself to remedy their situation, saying to Amy defiantly, “No, I’d starve first” (28), and thinking to herself that “a woman ought rather to die, than to prostitute her virtue and honor, let the temptation be what it will” (29).  But eventually, of course, Roxana does give in to temptation by exchanging her body for financial security.  When it seemed that Roxana had neither money nor the ability to earn money to pay rent, the landlord takes advantage of her body’s use value, and it seems to Roxana that she has no choice.

The landlord’s sexual exploitation of Roxana provides a concrete representation of the economic exploitation in Gesell’s theory.  Roxana, the borrower, is forced into prostituting herself to her landlord, the lender.  This makes for an unnerving literal example of the exploitative relationship between Gesell’s two classes.  Roxana herself is conscious of the class difference between her landlord and herself.  She explains: “There was a vast difference between our circumstances, and that in the most essential part; namely, that he was rich, and I was poor; that he was above the world, and I infinitely below it; that his circumstances were very easie, mine miserable, and this was an inequality the most essential that cou’d be imagin’d” (41-42).  Gesell would agree that the inequality between the classes is “most essential,” and he would argue that even if class exploitation is not as clearly sickening as in the case of Roxana, all dealings between lender and borrower have the same unscrupulousness.  Roxana’s prostitution makes her payment of rent disturbing to us because the goods exchanged (i.e. Roxana’s body) are done so immorally, but Gesell would hold that all exchanges based on rent and interest are just as manipulative as Roxana’s because they share the same exploitation of the borrower.  The exploitation of Roxana continues even after her landlord becomes her husband.  Despite the new context of their relationship, Roxana says, “I was a whore, not a wife; nor cou’d I ever frame my mouth to call him husband, or to say my husband, when I was speaking of him” (45).  Roxana realizes that she is still prostituting herself, regardless of her new title.  The lender’s exploitation of the borrower continues, but, in Roxana’s case, it is notable that the financial reward for selling her body and labor begins to increase.

When her husband dies transporting his wares in France, Roxana profits enormously from his death.  All of his jewels, money, and bills of exchange were presumed stolen when he was killed by highwaymen, but they had actually been left in Roxana’s possession.  Her husband’s wealth becomes her “start-up capital,” in a sense.  At first, prostitution is merely a means for Roxana to maintain her property, but upon the death of the landlord she comes to realize the extraordinary amount of money she can make by selling herself.  Once she is free to sell herself however she wishes, Roxana completely gives herself over to vice and greed.  In Paris, Roxana makes an effort to become the mistress of another (wealthy) gentleman: “I did not forget to set myself out with all possible advantage, …as I did thus from my own vanity, for I was not ignorant that I was very handsome; I say, on this account, I was soon made very public, and was known by the name of…the pretty widow of Poictou” (57).  Through this conspicuousness, she gains the attention of a French prince, who places a silk purse full of one hundred pistoles in her hand.  In a very short time, Roxana acquires another gentleman with whom to make her exchanges.

However, her dealings with the French prince are different from her arrangements with the landlord because the French prince is paying her with money.  In the exchanges with her landlord, Roxana’s rent was being forgiven: her body substituted for the money she owed.  But the French prince is not extorting Roxana for her body.  He is paying her, and, for Gesell, this constitutes a significant difference, for Roxana is now earning income (setting aside the immorality of the exchange), rather than paying rent.  This is true whether one considers Roxana’s prostitution as an exertion of labor, or as the repeated exchange of a (renewable) commodity, her body.  In the former interpretation, she is directly exchanging her labor for money.  In the latter sense, she is selling her body to a purchaser for what it is worth to that purchaser (one hundred pistoles, according to the French prince, as much as the equation of the human body with a price repulses us).  Either way, Roxana’s income is wholly earned, and in that sense, the exchanges are, as Gesell would say, natural (again, ignoring the exchanges’ clear vice).  No longer a borrower, Roxana now has the power to earn money.  Therefore, her transition from the landlord to the French prince marks a critical development in Roxana’s financial status: not only has Roxana escaped the borrowing class, she has also begun to accumulate money, which will allow her the opportunity later in the novel to ascend into the lending class.

While she is the mistress of the French prince, Roxana significantly adds to the fortune that she gained when the landlord died, and she expresses concern over how to secure her “treasure,” as she calls it (105).  Roxana recognizes that her profitability as the French prince’s mistress cannot continue indefinitely:

In all this affluence, I did not forget that I had been rich and poor once already, alternately; and that I ought to know, that the circumstances I was now in, were not to be expected to last always; that I had one child, and expected another, and if I bred often, it wou’d something impair me in the great article that supported by interest, I mean, what he call’d beauty; that as that declin’d, I might expect the fire wou’d abate, and the warmth with which I was now so caress’d, wou’d cool, and in time, like the other mistresses of great men, I might be dropt again; and that, therefore, it was my business to take care that I shou’d fall as softly as I cou’d. (105)

In this case, it is more helpful to interpret Roxana’s prostitution as the exchange of a commodity for money.  Her body, the commodity in question, is declining in value over time, just as Gesell argues that every example of natural wares will do.  Roxana realizes the devaluation of her body in the eyes of potential “gentlemen,” and she infers that as her body becomes less desirable, her fortune will proportionally decline – unless she can reverse that process by securing the money she has earned (and the money she will continue to earn).  For Gesell, it is natural that, as Roxana’s body becomes less valuable, her wealth should decline.  After all, it is true for all goods that as use value decays, exchange value wanes correspondingly.  Roxana’s desire to reverse the decline of her income (the exchange value derived from her body) thus represents an attempt to create an unnatural process.  For Gesell, Roxana should not be able to increase her earnings over time any more than she should be able to restore her body by reversing the natural effects of aging and childbirth.

Yet Roxana realizes money’s advantage for securing her prosperity, for, as Gesell is thorough in pointing out, money does not deteriorate in value. She understands that she can convert the fleeting use value of her body (i.e. her “beauty”) into money, and that, despite the inevitable decline of her body’s value, the value of the money she earns will not decay.  Roxana is therefore a seller of goods, and, as Gesell says, she is under temporal pressure to sell because of the natural devaluation of wares.  She is financially penalized the longer she waits to enact the transformation of body into money, and Roxana comprehends the urgency of her situation.  “I did not forget, therefore, … to make as good provision for myself, as if I had had nothing to have subsisted on, but what I now gain’d; whereas I had not less than ten thousand pounds … which I had amass’d, or secur’d, rather out of the ruins of my faithful friend, the jeweler” (105-106).  While already quite wealthy, Roxana wants to ensure that she is financially secure well into the future, and, to do this, she realizes she must protect her money: “My greatest difficulty now, was, how to secure my wealth, and to keep what I had got; for I had greatly added to this wealth, by the generous bounty of the Prince ––––” (106).  She continues to earn money as the mistress of the prince, and she also looks for a way to store the money she has earned to preserve her wealth.  All the while, however, Roxana is aware that the value of her body is slowly diminishing.

When the French prince honors the dying wish of his wife and becomes a monk, Roxana is once again left a mistress without a gentleman, but soon she finds not only a new gentleman, but also a way to secure her money.  Still in Paris, Roxana meets the Dutch merchant, who advises her “to take bills upon Amsterdam, and to go that way to England; for that I might lodge my treasure in the bank there [Amsterdam], in the most secure manner in the world” (112).  Roxana now has a method by which to preserve her money securely.  The Dutch merchant also suggests where she may sell the wares she carries, her jewels, so that she can “convert them into money” (112).  This is another example of her attempt to transform the declining value of goods into the enduring value of money.  Roxana eventually reaches Rotterdam by sea, and a merchant there arranges for the deposit of some of her bills of exchange into the bank in Amsterdam.  By putting her money in the bank, Roxana does not ensure that her money will hold its value: as Gesell demonstrates, money will do that regardless of how secure it is.  However, she does secure the value of her body that she has already converted into money.  That is, the conversion into money preserves the declining value of her body, and securing her money in the bank safeguards it from being lost or stolen (it is important to note that while Gesell is adamant about gold’s indestructible quality, the paper bills of exchange Roxana carries are decidedly more vulnerable, and thus need more protection).  This preservation of value in the form of money is unnatural for Gesell, even if Roxana did not proceed to accrue any interest from her savings.

It is unclear in the novel how much interest Roxana accumulates by saving her money in the bank in Amsterdam.  Regardless, once she returns to London, Roxana desires to acquire a significant annual income based on interest, and Sir Robert Clayton becomes her financial adviser.  Upon her return to England, Roxana says,

I had now all my effects secur’d; but my money being my great concern at the time, I found it a difficulty how to dispose of it, so as to bring me in an annual interest; however, in some time I got a substantial safe mortgage for 14000 pound, by assistance of the famous Sir Robert Clayton, for which, I had an estate of 18000 pounds a year bound to me; and had 700 pounds per annum interest for it. (164)

Roxana succeeds in reversing the eventual downward trend of her body’s value by investing her money with Sir Robert.  At first, she is only able to stop the deterioration of her value by converting her body into money and then securely storing that converted money.  Once she beings to accrue interest from her account, however, her money increases in value completely independently of the value of her body, the commodity she originally sold to earn that money.  The value she possesses in money, then, is increasing, while the value she possesses in her body is decreasing; for Gesell, this is a paradox.  From the perspective of the market, though, interest is a perfectly rational phenomenon that acts as an incentive for investors to allow money into circulation.

By taking advantage of this incentive, Roxana acts within the market’s accepted logic and firmly establishes herself as a member of Gesell’s lending, exploiting class, which is composed of other investors who accumulate income as a result of self-interest.  Importantly, Gesell would not argue that Roxana’s new membership in the lending class is a result of her moral failing.  Sinful as Roxana’s prostitution may be, her self-interested desire to protect her money and gain money by interest is not a problem for Gesell.  Market conditions, not human self-interest, are the root of the exploitation of the borrowing class.  These market conditions include a form of money that is unnatural, as well as a system by which one can gain unearned income.  According to Gesell, the money Roxana gains by accumulating interest is unearned, for Roxana is neither exerting labor nor exchanging any goods.  To counter Gesell, one could argue that, in a sense, interest is earned, for the lender subjects him- or herself to the risk of the investment and forfeits the right to use the leant money until it is returned.  This argument may be valid, but it does not apply to Roxana’s investments in Defoe’s novel.  If Roxana is aware of the risk she is taking by investing her money with Sir Robert, she does not mention any concern.  In fact, she does not note Sir Robert warning her of the risks of investing, and based on the dependable prosperity of her interest, risk does not seem to be a factor in Defoe’s economy.  Roxana is equally unconcerned about temporarily foregoing the money she is lending.  (After all, she is able to invest so much of her money because she subsists on relatively little of her fortune.)  Therefore, Roxana does not earn the income she derives from interest in any way: labor, exchange, risk, or temporary forfeiture.  Yet Gesell would not fault Roxana for utilizing these unnatural market conditions that present themselves to her, for self-interest, Roxana’s motivation, is a natural human impulse.

It is beyond doubt for Gesell, however, that the market conditions are unnatural, especially if they can reproduce money for someone who has no expertise in finance.  It might seem that Roxana’s achievement of her immense fortune demonstrates that she is accomplished in matters of finance, but according to critic D. Christopher Gabbard, “The assumption of her financial acumen needs to be reconsidered, if not thrown entirely into question” (237).  Gabbard highlights Roxana’s inability to read financial documents when the Dutch merchant (her husband at the time) shows her his financial books.  Gabbard writes, “Roxana appears unable to identify what types of books her husband is showing her, so she dismisses them as ‘Writings, and such things.’ Her ignorance may be even more profound, for on the following page she admits that she cannot grasp the meaning of what appear to be relatively simple documents” (238).  This evidence is in direct conflict with Roxana’s own assertion that she is financially proficient: “By managing my business thus myself, and having large sums to do with, I became as expert in it, as any she-merchant of them all; I had credit in the bank for a large sum of money, and bill and notes for much more” (131).  It appears, however, that Roxana has overestimated her financial expertise.  As Gabbard points out, Defoe himself declared bookkeeping “the essential skill for the management of credit” in the Complete English Tradesman (qtd. by Gabbard 239), in which he also “emphasizes that people engaging in trade not only must be able to interpret financial records, but also must maintain them scrupulously” (Gabbard 239).  Roxana’s inability to perform the basic financial task of reading and keeping books, then, is important to consider, for Defoe must have been very aware of the subtleties of Roxana’s financial literacy.  If Roxana is indeed financially illiterate, her attention to the details of her many holdings does not give her away.  As Gabbard notes, “Readers are struck by her repetitive and ostentatious detailing of assets, especially in the novel’s second half” (240).  Roxana is clearly aware of the wealth she possesses, often down to the exact pound (“I shou’d in twelve years time have in bank, one and twenty thousand, and fifty eight pounds” [168]).  As her exhaustive level of precision shows, she has, as she says, “incredible wealth,” despite her lack of financial expertise (182).  “While Roxana’s confessions of financial illiteracy may be intriguing, by themselves they do not undermine the assumption of her economic prowess,” Gabbard writes (240).

From Gesell’s perspective, though, Roxana’s accumulation of unearned income may be even more frightening because she has gained it with little to no financial literacy.  Roxana herself is staggered by Sir Robert’s ability to make money from money: “Indeed, as Sir Robert’s pupil she appears to be as mystified by the emerging speculative commercial environment as were those among Defoe’s readers who still viewed the new markets as tinged with usury, even dark magic” (Gabbard 245).  If she does not know how to keep her own books (and is unaware of the market’s “magic” powers), then Roxana is certainly not performing any labor to manage her interest.  Instead, she has given the task of managing her wealth to Sir Robert, and it does not seem that she is paying him for his labor.  Roxana’s money is truly reproducing itself without requiring any labor from her.  It takes only money, then, and nothing more, to make interest.  This demonstrates even further that Roxana’s income is truly unearned, from a Gesellian perspective.

Sir Robert is an important figure in Roxana’s development of her capital, but his role is even more crucial if Roxana has little or no knowledge of finance.  Although Roxana is aware of the phenomenon of interest before she meets Sir Robert, she needs Sir Robert’s expertise to invest her money and realize her desire of accruing interest.  As Gabbard writes,

Of crucial importance here is that it is Sir Robert and not Roxana who effects this transformation: what money she brings to him, he makes grow exponentially. This is to say that an accurate assessment of Sir Robert’s role indicates that it is not chiefly through her efforts as a courtesan, but rather, through his successful investment strategies, that she becomes an exceptionally wealthy woman. (245)

Prostitution earned Roxana her original (and quite substantial) source of wealth, but she needs Sir Robert if she wants to become truly prosperous, which, of course, she does.  In one sense, Sir Robert is an enabler of Roxana’s avarice.  When Roxana has admitted she already has an excess of money, she craves more, and Sir Robert is conscious of his role as catalyst of Roxana’s greed.  Roxana says, “He told me, that if I thought I had enough, it was well; but if I desir’d to have more, this was the way; that in another twelve year, I shou’d be too rich, so that I shou’d not know what to do with it” (168).  Even though Sir Robert and Roxana both know Roxana will likely never need the money Sir Robert is offering her, Roxana accepts his investment proposal.  Sir Robert also “frequently took occasion to hint, how soon I might raise my fortune to a prodigious height, if I wou’d but order my family-[economy] so far within my revenue, as to lay-up every year something, to add to the capital” (167).  Sir Robert encourages Roxana not only to invest, but to reinvest the capital she gains by interest.  It seems that Sir Robert occupies a complicated role, playing both the well-meaning financial adviser, who wants the best for his client, and the tempter, who uses Roxana’s greed to help her on her way down the path of damnation, for his guidance “turns out to be a curse” (Kibbie 1029).

Gesell, though, would be unlikely to agree with the latter, harsh interpretation of Sir Robert, despite the fact that Sir Robert’s role represents a problem in the economy for Gesell.  Sir Robert is largely responsible for Roxana’s unearned income, especially if Roxana does not have the requisite knowledge of finance to invest, and therefore he is a pivotal, enabling figure in the landscape of Gesell’s exploitative economy.  Further, as scholar Ann Kibbie writes, Sir Robert is surely “place[d] … within the discourse of usury” by Defoe (1029).  But despite being a fierce opponent of “usury,” Gesell would not attack Sir Robert personally on moral grounds.  Sir Robert’s job is to create more lending and more borrowing, creating a further separation between Gesell’s two classes and leading to further exploitation of the borrowing class.3  Yet it is in Sir Robert’s self-interest, as a banker, to do so, and because the market of Roxana allows (and requires) financial advisers, Gesell could not fault Sir Robert for carrying out his job (quite adeptly, it would seem), even though Gesell would consider Sir Robert’s occupation to be a manipulative and unnatural part of an exploitative machine.

In fact, even the most noble of characters in Roxana exemplify self-interest.  The Quaker with whom Roxana stays is arguably the most virtuous, moral character in the novel.  She displays all forms of kindness and hospitality, and never avarice in any degree.  She too, however, utilizes interest.  Roxana gives a considerable amount of money to the Quaker as a reward for her hospitality (to the Quaker’s amazement), and upon presenting this gift, Roxana tells the Quaker to invest the money and then reinvest the interest to make even more money.  Roxana tells her friend the Quaker:

She had nothing more to do, than to consult with me, how it shou’d be effectually secur’d for her, … that she cou’d live comfortably, and not want it for bread, or other necessaries, she shou’d not make use of it, but lay up the income of it, and add it every year to the principal, so to increase the annual payment, which in time, and perhaps before she might come to want it, might double itself. (252)

The Quaker is shocked by and endlessly grateful for Roxana’s gift, and the reader assumes the Quaker does indeed proceed to invest the money Roxana gives her.  Despite the Quaker’s investment, Gesellian analysis does not lead to the conclusion that the Quaker “falls” to the corrupt level of Roxana by investing, nor that the Quaker should be read as avaricious and condemnable.  On the contrary, for Gesell, it is natural for the Quaker to invest her money because self-interest encourages her to gain money, just as it drives Roxana, Sir Robert, and every other character in the novel (and in reality).  Once again, market conditions, not human self-interest, are responsible for investments leading to the exploitation of the borrowing class.

And self-interest never lets go of Roxana.  She continues to prostitute herself even in later stages of the novel, when she is fully aware that she no longer requires a source of income.  She confesses, “I lov’d it for the sake of the vice, … necessity first debauch’d me, and poverty made me a whore at the beginning; so excess of avarice for getting money, and excess of vanity, continued me in the crime” (202).  According to Roxana, not only sin but “excess” of sin has caused her to remain a prostitute.  For Gesell, however, Roxana’s means were sinful, but her motivations are the opposite: they are natural.  Yet Roxana is more critical of herself.  She finally believes she has begun a reformation, however, when she marries the Dutch merchant, with which, she says, “I put an end to all the intrieguing part of my life; a life full of prosperous wickedness; the reflections upon which, were so much the more afflicting, as the time had been spent in the grosses crimes, which the more I look’d back upon, the more black and horrid they appear’d” (243).  Roxana is still haunted by her sins, even though her prostitution has finished, and she also continues to prosper from her past sins.  Her investing continues through the rest of the novel (although the novel’s conclusion is ambiguous as to Roxana’s ultimate financial status), and the interest she accrues (from her husband’s fortune as well as from her own) is more than capable of sustaining her.  While Roxana is no longer performing any kind of labor nor exchanging any goods, her increasing wealth is no doubt unearned from Gesell’s perspective, and the disproportionate relationship between her value as a commodity (decreasing) and her value in money (increasing) endures and intensifies.  Even though Roxana forsakes her original source of income, she continues to become increasingly prosperous, for the money she has already saved is enough to maintain her future wealth.  But her eventual rejection of prostitution is not enough to earn the reward of salvation.  She enjoys immense worldly riches, but as she describes in the novel’s final paragraph, she understands that her actions have inevitably damned her.  Kibbie writes, “Roxana’s narrative ends abruptly with a ‘Blast of Heaven’ that reverses all her fortunes, an event that remains unexplained. The disintegration of the narrative mimics the disintegration of the heroine into madness of guilt and terror” (1031).  As Kibbie notes, it is unclear how exactly Roxana is “brought so low again” (330) by the “Blast of Heaven,” but it is implied that Roxana will receive the punishment of damnation.

This essay has had two primary functions: first, to test Silvio Gesell’s economic theory as a framework for literary analysis, and second, to determine whether that framework provides any useful readings or new understandings of Daniel Defoe’s Roxana.  Gesell’s theory does seem useful in that it has provided a new way of considering Roxana’s actions because Gesell posits that self-interest is not the problem leading to social stratification, while the novel claims that “avarice” is Roxana’s major sin.  Self-interest does lead to lending, which in turn, Gesell argues, exploits the borrowing class, but Gesell also argues that it is actually the market conditions themselves, not human behavior, that leads to this exploitation.  The market allows for interest and rent, so it is natural that people will utilize those processes as opportunities for profit.  Rather than fault human self-interest, Gesell places the blame on the rules of the market.  If money were a different, “natural” medium, then interest and rent would not be possible, and therefore the market could not divide society into two classes, lenders and borrowers.

Upon reading Roxana, it appears that Roxana’s many vices, including prostitution and avarice, are the result of an internal moral depravity.  Thus Defoe creates an “inversion of the spiritual autobiography,” in the words of Gabbard (247).  Rather than trace Roxana’s development from skeptic to believer (as a traditional spiritual autobiography would), Defoe gives us a woman who falls from grace.  The novel chronicles the fall of a woman from a Christian housewife to a greedy woman of the world.  Roxana is tempted by financial prosperity, gives in to sin, fails to reform herself, and therefore must suffer damnation, and Roxana is more aware than anyone of her sins and the damnation to which it eventually leads her.  If this can be taken as the “traditional” interpretation of Roxana, then the novel seems to tell us that human behavior is the cause of Roxana’s downfall.  Roxana gives in to the temptation of financial security by prostituting herself to her landlord, and even after she gains a substantial (indeed, enormous) fortune, she continues to engage in vice in order to make even more money and secure for herself titles of nobility.  Therefore, the novel (along with Roxana herself) instructs the reader that Roxana is damned because of her own sinful choices: her avarice and wickedness lead her to use (and abuse) the market conditions.

Gesellian analysis posits that the opposite is true, that market conditions use Roxana.  Gesell’s theory offers an alternative reading by suggesting that self-interest is natural (aligning him with the infamous Wall Street mantra, “greed is good”), while the market conditions are not.  Roxana’s financial dealings are integrally linked with her actions of immorality, and thus her motivations behind them must be considered.  By examining how and why her numerous and varying economic exchanges take place, her development as a financial figure begins to unfold.  By Gesellian analysis, components of the economy are divided into two categories: the natural and the unnatural.  Carrying these categories into the traditional interpretation of Roxana as an “inversion of the Christian autobiography” (to use Gabbard’s phrase once more), Roxana’s internal desires, her “avarice” and ambition, are portrayed as unnatural, for they lead her to abuse market conditions such as money and interest, otherwise natural fixtures in Roxana’s economic milieu.  Gesell argues for the exact opposite: his theory’s model for the “natural” is the devaluation of wares over time, and this is perfectly represented by Roxana’s body.  Like any other commodity, her body naturally deteriorates, and therefore experiences a decline in value.  Unnaturally, however, money experiences the opposite: it increases in value due to interest, unlike any other holder of value.  Further, Gesell argues that human desire for prosperity is a natural phenomenon, even including Roxana’s intense level of hunger for wealth.  What the novel calls sinful, unnatural “avarice,” Gesell calls natural “self-interest,” and this distinction is critical for the analysis of Roxana.

Roxana undeniably becomes a woman of vice under both the traditional and Gesellian interpretations, but the causes for her life of vice and eventual damnation are very different if Roxana is interpreted as a reactive character affected by an unnatural market.  Gesell’s theory offers us this tale: as a member of the borrowing class, Roxana is forced into her life of sin by her exploitative landlord, and once she becomes a prostitute, her self-interest deterministically leads her to take advantage of existing market conditions that cyclically resupply that self-interest, leading Roxana to riches but also to damnation.  Under more “natural” market conditions (as defined by Gesell), Roxana’s self-interest would be checked, and, presumably, her borrowing-class status never would have led her to vice in the first place (because, ideally for Gesell, no such class division would exist).  In the market of Daniel Defoe’s novel, though, Roxana is inescapably drawn in by the “unnatural” conditions that eventually doom her.  As Kibbie writes, “In Roxana Defoe pursues the monstrous logic of a closed circuit in which capital destroys the self that it creates” (1032).  How much more “monstrous” then, if the circuit is set in motion without our consent.  And perhaps that is a more frightening conclusion than the interpretation of an individual woman’s “fall from grace,” for the Gesellian interpretation tells us that Roxana was damned without ever having the agency to choose salvation.


1. Igor Kopytoff writes that singularization is the process by which value is attributed to an object by some cultural force after the object has been produced.  The exchange value of the object, or commodity, thus increases not because of the use value of the object but because of some external reason.  For example, a religious icon is singularized as a sacred object: its value far exceeds its use value (indeed, these sacred objects can be considered “priceless).  Or, such commodities can increase in value over time as collectors’ items, such as stamps or comic books.

2. One possible exception is domesticated animals.  A farmer’s livestock can grow through biological reproduction, so perhaps this kind of wares avoids natural devaluation. Gesell does not supply a thorough defense against this argument, though he does point out that the value of animals, unlike that of money, is threatened by disease and requires labor to maintain.  In any case, Roxana’s value is never invested in animals, so fortunately this interesting exception is not crucial to this essay.

3. For Marx, this separation between classes leads to revolution against the bourgeoisie.  Gesell argues for an economic revolution, rather than a political one.  He predicts that his proposed system of free money would be enough to create social equality, probably because, unlike Marx, Gesell sees no reason to effect political change to account for human behavior, which he does not blame for producing inequality.  Gesell believes that only the economic system is at fault, so, therefore, only the economic system itself needs to be changed.

Works Cited

Defoe, Daniel. Roxana. 1724. Oxford: Oxford UP, 1996. Print.

Dillard, Dudley. “Silvio Gesell’s Monetary Theory of Social Reform.” The American

Economic Review 32.2 (1942): 348-352. Web. 12 Nov 2011. JSTOR.

Gabbard, D. Christopher. “The Dutch Wives’ Good Husbandry: Defoe’s ‘Roxana’ and

Financial Literacy.” Eighteenth Century Studies 37.2 (2004): 237-251. Web. 13

Nov 2011. JSTOR.

Gesell, Silvio. The Natural Economic Order. 1916. Trans. Philip Pye. San Antonio, TX:

Free-Economy Publishing Co., 1934. Print.

Kibbie, Ann Louise. “The Birth of Capital in Defoe’s ‘Moll Flanders’ and ‘Roxana.’”

PMLA 110.5 (1995): 1023-1034. Web. 13 Nov 2011. JSTOR.

Kopytoff, Igor. “The Cultural Biography of Things: Commoditization as a Process.” The Social Life of Things: Commodities in Cultural   Perspective. Ed. Arjun Appadurai. Cambridge: Cambridge UP, 1986. 65-90. Print.