this is much less complicated then it seems at first. commodities are just assets. they are physical constructs that can exist without any liability. chartalists argue that money is not given value by commodities even when money is made of commodities or is "backed" (see pegged) to commodities. when a coin's value as a commodity rises above it's nominal (state given) value, it is melted down and sold. since it is not any intrinsic use value that provides money with value, money's exchange value comes from social relations. but not just any social relation. this is a particular social relations where i agree (or am forced) to owe you a precise amount of the unit of account (Jim is correct in pointing out that money needs to be precisely defined to discuss these issues. the wiki is pretty good: http://en.wikipedia.org/wiki/Money#Functions) and you agree to provide me with certain goods and services now (or you have a gun and provide me the service of not killing me.) the particular question here, "why can money not be created without the simultaneous creation of debt?", has a rather simple answer. money is a social asset. for money to be created, someone else needs to take that money as a responsibility or a debt. if chase bank creates 100 dollars by loaning me that money, i have that money as an asset, but also something i have to pay back later, a debt. when the government creates money, in accounting terms it takes that money on as a liability but since it can create infinite amounts of the unit of account that liability isn't burdensome or necessitate the return of real goods and services to it's creditors.
-- -Nathan Tankus _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
