Chartalism
Categories: Banking, Regulations, Econ
Money. You want some. You need some. But...who exactly defines its real value?
Back before World War II, a German economist named Georg Freidrich Knapp argued that the government’s willingness to accept money as tax payment decides money’s value. This theory, widely dismissed by most economists, is in contrast to the argument that money is a commodity with intrinsic value. As a result, many people see it as a pure medium of exchange and preservation of wealth.
Knapp said that governments assign the value, and not people taking part in the market. No wonder the German economy experienced hyperinflation after World War I.
