PEN-L message, Re: Marx and fiat money

In a message dated 11/1/03 4:51:28 PM Pacific Standard Time, pen-l@xxxxxxxxxxxxxxxx writes:

So is this Marx's theory? It would seem a tenet of Marxian thought that
fiat money is worthless (or at least that it would be implied that it is
backed by gold or some other commodity in an emergency, if not in actual
current legality).

-- Lance

Henry C.K. Liu has written several articles - in depth, on the banking system and fiat versus specie money. Fiat money is not worthless, but apparently valueless - without quotes.

Full article at Asia Times: http://www.atimes.com/atimes/Global_Economy/EI16Dj03.html

"Fiat money issued by government is now legal tender in all modern national economies since the collapse of the Bretton Woods regime of fixed exchange rates linked to a gold-backed dollar in 1971. The State Theory of Money (Chartalism) holds that the general acceptance of government-issued fiat currency rests fundamentally on government's authority to tax. Government's willingness to accept the currency it issues for payment of taxes gives the issuance currency within a national economy. That currency is sovereign credit for tax liabilities, which are dischargeable by credit instruments issued by government. When issuing fiat money, the government owes no one anything except to make good a promise to accept its money for tax payment. A central banking regime operates on the notion of government-issued fiat money as sovereign credit. That is the essential difference between central banking with government-issued fiat money, which is a sovereign credit instrument, and free banking with privately issued specie money, which is a bank IOU that allows the holder to claim the gold behind it."