Deficit Owls | MMT: Taxes Drive Money @deficitowls5296 | Uploaded December 2017 | Updated October 2024, 5 hours ago.
Rohan Grey, founder and President of the Modern Money Network, explaining a core tenet of Modern Monetary Theory, derived from the "Chartalist" doctrine, expressed in shorthand as "taxes drive money." What this means is that if the government is able to impose and enforce some sort of obligation on (at least some of) its citizens, then this will create a demand for whatever object extinguishes that obligation.
In other words, if the government declares that you owe $100 in taxes, and that there will be a very unpleasant penalty for failing to pay, then you now have to do something to go out and get $100. Taxes are just one way to do this, and historically fees, fines, and tithes all might have been more important for getting currencies started.
Another way is by limiting access to necessary public resources. For instance, if some entity had monopoly control over the water supply, then it might declare it will only deliver water to citizens who present its tokens, and that it will sell these tokens in exchange for goods and labor.
So we see that using its ability to impose and enforce a non-reciprocal obligation, the state gives value to its otherwise valueless tokens. Therefore, the nature of monetary systems is intrinsically tied up with power relations and coercion. In the case of modern democracy, we might amend this to say that the majority provide consent to the government to use its coercive power to move real resources to itself in order to achieve the democratically-decided public purpose.
See the whole talk here: youtube.com/watch?v=4hUItzbGP7k
Rohan Grey, founder and President of the Modern Money Network, explaining a core tenet of Modern Monetary Theory, derived from the "Chartalist" doctrine, expressed in shorthand as "taxes drive money." What this means is that if the government is able to impose and enforce some sort of obligation on (at least some of) its citizens, then this will create a demand for whatever object extinguishes that obligation.
In other words, if the government declares that you owe $100 in taxes, and that there will be a very unpleasant penalty for failing to pay, then you now have to do something to go out and get $100. Taxes are just one way to do this, and historically fees, fines, and tithes all might have been more important for getting currencies started.
Another way is by limiting access to necessary public resources. For instance, if some entity had monopoly control over the water supply, then it might declare it will only deliver water to citizens who present its tokens, and that it will sell these tokens in exchange for goods and labor.
So we see that using its ability to impose and enforce a non-reciprocal obligation, the state gives value to its otherwise valueless tokens. Therefore, the nature of monetary systems is intrinsically tied up with power relations and coercion. In the case of modern democracy, we might amend this to say that the majority provide consent to the government to use its coercive power to move real resources to itself in order to achieve the democratically-decided public purpose.
See the whole talk here: youtube.com/watch?v=4hUItzbGP7k
