Dear Duncan,
Thank you for your post [2410]. It makes me think more.
You wrote:
But the fiscal policies of the state still establish a speculative value
for its debt. One could argue, for example, that the market values the debt
of the state just equal to its estimate of the future taxing power of the
state.
As I've explained above, through speculation on the future taxing power of
the state.
Chai-on:
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Is the value of the state debt seen as the value of the paper money unit
in the above?
Duncan:
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Take Marx's analysis of paper money issued by the state without a
guarantee of convertibility into gold (like the British pound during the
Napoleonic Wars, or the "greenback dollar" in the U.S. Civil War period).
He argues for a quite different mechanism of valuing these liabilities than
for valuing gold or state credit money convertible at a fixed rate of
exchange into gold.
Chai-on:
--------
I see. But the mechanism you mention in the above appeared to me as
the same as the quantity theory of money. IMO, it was not a Marx-like
expedition.
In solidarity,
Chai-on