In this previous post, we showed that when a government issues tokens this necessarily involves public debt. If tokens are a “creature of the state”, then they also function as records of public debt. The act of issuing tokens is always tied to a transaction, following the logic of “something (goods) for nothing (tokens)”[1]. Taxes are paid in meals, whereas tokens are mere receipts for meals provided.
Many monetary theories assume that money, particularly “fiat money”, originates with the state and our interpretation shows that this premise is compatible with the Accounting View. The imposition of a tax obligation can explain why citizens would want to give away goods for government issued, “worthless” tokens in the first place. There is also historical precedent for such theories, as many currencies, for example colonial currencies and, indeed, most coinage throughout history, were issued by the state. There are other theories that posit that money must be understood as a creature of (private) banking activity. Historical examples for such theories might be found in the free banking era in the US. Of course, these differing stories must not be mutually exclusive and can be seen as arguments about the relative importance of parallel processes. Indeed, historical facts demand that both possibilities be accounted for theoretically. The question is, do we need different theories for different processes or can we cover both with one theory?
