Re: [gang8] Re: two currencies and Korean war

["Alan G. Isaac" <aisaac@xxxxxxxxxxxx>]

On Mon, 31 Dec 2001, Harry Veeder wrote:
> If the state theory of money is correct, then those people who are
> not expected to pay *any* income tax will prefer not to work for
> money because it will have no (tax) value.

It may sound like Harry is proposing a simple fallacy of
composition here, but in fact his statement pokes at
the chartalist theories where they are weak.  The answer
a chartalist can give is that as long as someone else
expects to have to pay taxes they the non-taxpaying individual
will expect there to be a demand for the currency and thus for
the currency to have value.

Will the chartalists ever stop and notice how often they must
use the word `expect' in such discussions??

Money will not be held unless it is expected to serve as a store of
value.  There are many ways in which this expectation can be
generated, and the chartalists are simply discussing one of them.

Cheers,
Alan Isaac