What I mean is that the state has, in the absence of a gold
standard, no obligation to redeem its money. In what sense
then is the money state debt?
Formally, the finance of state expenditure by the issue of
currency may be borrowing, but in practice, given the non
redeemable nature of the currency, it is a tax on holders
of existing money balances.
>> Paul
>> ----
>> Is this not a legal fiction?
>> Is it not better to see seigneurage as a form of taxation?
>>
>I don't see that it is a legal fiction. I could choose to use British, or
>French money, or Japanese money, or gold if I wanted to. Seigniorage
>results from the government outlawing banks and other potential
>competitors from issuing small denomination notes, and from reserve
>requirements that give the government's debt a monopoly of certain functions.
>
>Duncan
>
>
>>
>>
>
Paul Cockshott
wpc@cs.strath.ac.uk
http://www.cs.strath.ac.uk/CS/Biog/wpc/index.html