Re: Putting Chartalism In Its Place?

[Harry Veeder <eo200@xxxxxxxxxxxxxxxxxxx>]

> From: William F Hummel <wfhummel@xxxxxxxxxxx>
> Date: Mon, 15 Sep 2003 15:00:06 -0700
> To: pkt@xxxxxxxxxxxxxxxx
> Subject: Re: Putting Chartalism In Its Place?
>
> Re the following:
>
>>> "Any particular seller will accept as money what he can use for buying
>>> things himself or for settling his own obligations.  This seems to say
>>> that a means of payment will be generally acceptable if it is already
>>> generally acceptable, and it looks like a circular argument.  But it
>>> only means that general acceptability is not easily established.
>>> General acceptability may come about gradually.  If a growing number of
>>> people are willing to accept payment in a particular form, this makes
>>> others willing to accept that kind of payment.  General acceptability
>>> may be established rapidly if very important sellers or creditors are
>>> willing to accept payment in a particular form of money.  For example if
>>> the government announces its readiness to accept a certain means of
>>> payment in settlement of taxes, taxpayers will be willing to accept this
>>> means of payment because they can use it to pay taxes.  Everyone else
>>> will then be willing to accept it because they can use it to buy things
>>> from the taxpayers, or to pay debts to them, or to make payments to
>>> others who have to make payments to the taxpayers, and so on."  (p. 693)
>>>
>> This implies that if I don't pay taxes to a particular authority,
>> I will never accept that authority's currency.
>
>> Harry Veeder
>
> No.  It implies that _even_ if I don't have to pay taxes, if enough
> other people do, I will accept the authority's currency because I know
> that currency is valuable to many others.
>
> William F Hummel
>

The passage implies that an American taxpayer (or non-taxpayer) who doesn't
pay Canadian taxes and does not plan to make purchases with Canadian
currency, will never accept Canadian currency.

However, in reality he is free to accept or reject Canadian currency because
US/Canadian currency exchange is permitted.

Here is an extreme case which emphasises my point.  If the rest of the world
collectively outlawed Canadian currency, Canadian currency would eventually
disappear, unless the Canadian government in turn made it illegal for its
citizens to accept non-Canadian currency.

Harry Veeder