Re: Putting Chartalism In Its Place?

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

William:

Re. the following:

> I haven't seen anyone assert that paying taxes DEFINES what money is.

Comment:

Here is Randy Wray on the subject matter:

"In the Chartalist approach, money is a creature of the state; at least in
the case of modern money, examples of stateless money are hard to come by.
The state DEFINES money as that which it accepts at public pay offices
(mainly in payment of taxes).  This has important policy implications.  Once
the state imposes a tax on its citizens, payable in a money over which it
has a monopoly of issue, it can influence the value of that money by setting
the conditions under which the population can obtain it.  The government
does not 'need' the public's money in order to spend; rather, the public
needs the government's money in order to pay taxes.  This means that the
government can 'buy' whatever is for sale in terms of its money merely by
providing that money."  ('Understanding Modern Money', Edward Elgar, 1998,
p. 18)

And, of course, Randy is right.

To say that 'money' has 'value' BECAUSE the State accepts it in payment of
taxes is to DEFINE 'money' as WHATEVER the State will so accept - "cowrie"
shells, empty milk cartons, bottle tops etc.

Such stuff may be hard to swallow - but to do so is what DEFINES a
Chartalist!

Gunnar

----- Original Message -----
From: "William F Hummel" <wfhummel@xxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Monday, September 15, 2003 5:18 PM
Subject: Re: Putting Chartalism In Its Place?


> Barkley,
>
> I haven't seen anyone assert that paying taxes DEFINES what money is.
> In my view, money is simply whatever is widely accepted as a medium of
> exchange.  That necessarily implies it must also be a store of value,
> at least in the short run.