Re: A General Framework For The Analysis Of Currencies...[Was: Re: two

[Warren Mosler <mosler@xxxxxxxx>]

>
> *****
> By definition, "a commodity with 0 cost of production" - Sunshine etc. - is
> a "free good" to which economic reasoning does NOT apply.
> *****
>

Yes, but that's a slightly different story.  If the sunshine was a public
monopoly,
like perhaps water is in some places, the govt could set 'price.'


>
> >

(snip)

>
> And "why would an INPUT supplier exchange his..." - this is where you miss
> my point, namely, that an INPUT supplier has NO "goods and services" to
> offer in exchange "for units of the currency".  All he has is Factor
> Services which, if he can find entrepreneurs willing to acquire them, permit
> him to translate Factor Services into CLAIMS on Goods and Services.
>

CLAIMS from the entrepreneur for actual product?  That's a barter arrangement,
we were discussing discussing an 'intermediate' floating exchange rate currency.

> *****
> (snip)



>
> > The law of contract has nothing to do with value, though enforceable law
> is
> > probably fundamental in anycase.  all that states is that debts must be
> repaid,
> > etc.
>
> *****
>
> "The law of contract has nothing to do with value"?

In the obvious sense that you can have law of contract and worthless
currency.  As above, law of contract is fundamental to monetary
relations, but not the 'thing' that mandates value.

>
>
> Absent the Law of Contract, what is the "value" of any intrinsically
> worthless IOU?
>

As above.  Just like you need water to live before you can talk, you don't call
water
the thing that creates language.

>
> *****
> >
>
> And IF the state did "tax that stuff directly", THEN - by Chartalist
> reasoning - the state would remove the very foundations of the Monetary
> System.
>
> Does this make sense to you?
>

?   You mean the state would not tax/spend with it's currency of issue?  Then
it would have no (floating fx) currency of issue.

>

w

>
> Gunnar