Re: Putting Chartalism In Its Place?

[William F Hummel <wfhummel@xxxxxxxxxxx>]

Barkley Rosser wrote:

>     I know I shouldn't get into
>this, as this is an old and much
>beaten up chestnut on this list,
>with many holding views very strongly,
>but, can somebody please remind me
>why the objects whose use as general
>media of exchange in "primitive" economies
>with no state collecting taxes are not
>"money" as is thought by most economists?
>Is this simply a matter of definition,
>or is there something else involved here?

>     Presumably no one is going to pretend
>that no such spontaneously evolved objects
>have existed in world history, even if they
>are now no longer in use much of anywhere.
>I have no problem with someone arguing that
>in our current world economy with well
>developed and domineering states, it is
>irrelevant to speak of anything being
>money that is not used for paying taxes.
>But to argue that it is being able to pay
>taxes with something that makes it money,
>well, what then are we to call those
>objects that most economists call
>"natural commodity monies"?
>Barkley Rosser

Barkley,

I don't claim that the state theory of money explains all historical
examples of money usage.  Money has so many facets that it may be
impossible to find a theory that covers all cases, though it's fun
try.

Where the state theory of money shines is in explaining how a modern
fiat money system works.  Taxes are the key element because they drive
the system and provide the means of controlling the abundance of money
and credit in the system.  I briefly discussed that in another post,
and won't attempt to elaborate here.

William