At 12:20 11/10/96 -0700, Duncan K. Foley wrote [in #3360, JL]:
> I doubt that there is any historical example of "fiat" money. What gives
> modern state issued banknotes value is their role as part of the state
> debt, backed not by gold reserves but by the state's power to raise tax
> revenue. They are no more "worthless pieces of paper" than are the bonds
> or stock certificates of profitable corporations.
Is it not the existence of an obligation to pay taxes in Dollars that enforces
the currency of the greenback, rather then their being backed by a power to tax
in the sense of the tax raising power substituting for reserves.
Paul Cockshott (wpc@cs.strath.ac.uk)